agri commodity.............MCX futures...Copper.....Energy......soybean

Bullion: MCX August Gold futures traded higher in beginning of the last week as India’s rupee made all time record low of 58.98 against the US dollar in the spot market. Rupee came under pressure after the government said it is considering overseas bond sale to spur inflows, economic slow down coupled with record current account deficit were also added further weakness to the currency. However, gold prices fell during later part of the week when rupee sharply recovered by covering early losses after India’s Finance Minister said steps are being taken to stabilize the nation’s currency. There was a speculation that the central bank may have sold dollars to limit rupee’s drop. Additionally, Fitch rating revised the nation’s credit rating outlook to stable from negative is also provided support to strength in Indian rupee. Further, gold imports by India, the world’s largest consumer, fell as an increase in tax and regulations by the Reserve Bank of India (RBI) on the metal purchases also weighed on the market. Market anticipated Federal Reserve would scale back its economic stimulus as U.S. economic indicators show a recovery. On Thursday, an increase in U.S. retail sales and a drop in U.S. jobless claims brought some sell-off in bullion. Fed Chairman Ben S. Bernake said on May 22 the Central Bank could reduce its $85 billion monthly bond purchase if the employment outlook shows a sustainable improvement. The Bank of Japan refrained from introducing additional stimulus measures in the last week, which also left negative effect on gold. Assets in the SPDR Gold Trust fell 0.6 per cent to 1003.53 tonnes on Thursday. ¬¬¬¬¬Price Movement in the Last week: MCX August gold prices opened the week at Rs 27,617/10 grams, initially traded sharply higher and found strong resistant at Rs 28,288/10 grams. Later, prices fell sharply from high and currently trading at Rs 27,640/10 grams (June 14, Friday at 5.00 PM) with a nominal gain of Rs 60/10 grams as compared with previous week’s close. Outlook for this week: MCX August gold is expected to trade lower on account of favorable US economic data and decelerating US unemployment rate. Additionally, declining investment demand in gold and appreciating rupee will also leave negative effect on gold prices at domestic bourses. MCX August gold shall find supports at 27,170/26,850 levels and resistances at 28,130/28,300 levels. Spot gold has supports at 1350/1335 and resistances at 1400/1423 levels. Recommendation for this week: Sell MCX August Gold between 28,100-28,130, SL above 28,300 and Target- 27,200/26,900. Copper: MCX June Copper futures traded slightly lower in the last week on account of slowing global economic growth. The World Bank said that global economy will expand 2.2 percent in 2013, below January’s 2.4 percent projection. Additionally, India’s industrial production grew at slower pace in April, is also negative for prices. However, weakening Indian rupee and lower inventories at London Metal Exchange (LME) warehouses restricted from sharp price fall. Price movement in the last week: MCX June Copper prices opened the week at Rs 412.10/kg and initially traded higher and touched a high of Rs 421.45/kg. Later prices came under pressure at higher levels and touched a low of Rs 406.15/kg. Currently trading at Rs 407/kg (June 14, Friday at 5.00 PM) with a loss of Rs 6.25/kg as compared with previous week’s close. Outlook for this week: MCX June Copper is expected to trade lower due to slowing growth in global economy. Additionally, strengthening rupee would pressurize prices at domestic bourses. However, sharp fall will be restricted on account of lower stocks at LME warehouses and some signs of US economic recovery will also add optimism on demand concerns. MCX June Copper shall find a supports at 400/392 levels and resistances at 416/422 levels. Recommendation for this week: Sell MCX June Copper between 414-416, SL above 422 and Target- 400/393. Energy: MCX June Crude oil futures traded slightly higher in the last week as India’s rupee weakened against the U.S. dollar. Further, favorable US economic data in terms of decline in US jobless claims data, small business climbed to year high and retail sales increased more than expectation all these indicators suggest an improvement in the world’s largest economy. However, crude oil came under pressure after the Organization of Petroleum Exporting Countries (OPEC) said that the crude output rose in May to the highest level in six months but crude demand forecast unchanged for 2013. OPEC increased production by 106,000 barrels a day to 30.57 million a day last month and it said global oil demand will increase by 780,000 barrels a day, or 0.9 percent, this year to 89.7 million a day. Price movement in the last week: MCX June crude oil prices opened the week at Rs 5522/bbl, initially traded higher and found strong resistant of Rs 5648/bbl. Later, prices came under pressure and currently trading at Rs 5584/bbl (June 14, Friday at 5.00 PM) with a gain of Rs 71/bbl. Outlook for this week: MCX June crude oil is expected to trade slightly higher on account of favorable US labor market and economy is getting better which shows that the economic recovery of biggest crude oil consumers is on track is positive for crude oil price. MCX June crude oil shall find a support at 5500/5390 levels and resistance 5650/5730 levels. Recommendation for this week: Buy MCX June Crude between 5500-5520, SL 5380, target- 5645/5725 . Soybean: NCDEX July soybean futures traded slightly higher in the last week on account of weakness in Indian rupee against US dollar as soy meal exporters will get more return on soy meal exports and soybean oil imports would be more expensive. Delayed planting in US soybean due to heavy rains and lower production estimates of Argentina is positive for soybean prices. U.S. Soybean planting was 71% completed in the last week, up from 57% a weak earlier, below from its five year average of 84% and again at its lowest since 1996. Argentina’s agriculture ministry has cut its 2012/13 forecast to 50.6 million tones from its April forecast of 51.3 million tonnes and Buenos Aires Grain Exchange kept soybean production forecast at 48.5 million tonnes on June 06, 2013. Improved soy meal prices coupled with lower supply of soybean in major mandis of Madhya Pradesh is also provided support to the soybean prices. However, higher prices could not sustain and came under pressure in the mid of the last week on account of early monsoon rains in major soybean growing areas. Sowing acreage under kharif oilseeds may increase by 5-7% this year as compared to last year due to better returns on soybean as compared to other crops. According to the 3rd advance estimates, Soybean output is pegged at 14.14 million tonnes. As per USDA’s Monthly Supply & Demand Report, U.S. soybean supply and use projections for 2013/14 are unchanged from last month. Soybean ending stocks for 2012/13 are projected at 125 million bushels, unchanged from last month. Global oilseed production for 2013/14 is projected at 490.8 million tons, down 0.5 million from last month. Brazil’s 2012/13 soybean production is reduced 1.5 million tons to 82 million reflecting the impact of dry conditions in the northeast. Outlook for this week: NCDEX July soybean is expected to trade slightly higher on account of lower supply and improved demand for soy meal is also in favour of the bulls. However, for the long term, soybean is expected to trade lower on account of timely monsoon for this year. Sowing of soybean is already started in Andhra and Karnataka. Sowing will pick up in Maharashtra and Madhya Pradesh in next week. NCDEX July soybean shall find a support at 3758/3720 levels and resistance 3870/3974 levels. Recommendation for this week: Buy NCDEX July Soybean between 3760-3780, SL 3715, target- 3870/3950. Edible Oils (soy oil and palm oil): NCDEX July refined soy oil futures traded higher in the beginning of the last week on account of firm overseas market as speculation that palm oil exports from Malaysia will climbed ahead of Ramadan (fasting month for Muslims) which falls in July this year. Further declining inventories of palm oil in Malaysia also added provided support to the prices. As per Malaysian Palm Oil Board, palm oil inventory dropped 5.1% to 1.82 million tonnes in the month of May 2013. Additionally, weakness in INR against US dollar also provided support to the prices at domestic bourses. Depreciation of INR against US dollar would make edible oil imports costly. India imports edible oil about 50% of its total requirement. However, prices came under pressure at higher levels in the mid of the last week on account of profit taking after continuous rise in prices from the last few weeks. Higher imports of edible oil in the month of May also added bearish market sentiments. According to the Solvent Extractors’ Association of India, the import of vegetable oils in the month of May 2013 is reported at 892,066 tons, up about 1% compared to 883,410 tons in May 2012. The overall import of vegetable oils during November 2012 to May 2013 is reported at 6,030,829 tons, up about 10% compared to 5,486,553. Import of RBD Palmolein reported to 373,837 tons in May 2013, highest in any single month since edible oil allowed under OGL in 1994, up 125% compared to 165,426 tons in May 2012, Overall import of refined oil (RBD Palmolein) during November 2012 to May 2013 reported at 1,248,024 tons, up 15% compared to 1,084,933 tons during the same period of last year. During November 2012 to May 2013 Palm Oil import increased to 5,082,926 tons compared to 4,164,378 tons during the same period of last year. However, Soft oils import reduced to 947,903 tons from 1,322,175 tons last year. In last one year, RBD Palmolein has fallen by US$ 261 (24%), CPO by US$ 253 (23%), Crude Soybean Oil by US$ 157 (13%) and Crude Sunflower Oil by US$ 46 (4%). However, rupee has suddenly fallen in last few days and touched Rs.58.98 a dollar as on June 11, 2013, putting a pressure on import of vegetable oils. Outlook for next week: Edible oils are expected to trade slightly lower owing to higher imports of edible oils. Higher sowing acreage of US soybean and early monsoon in India is also negative for prices. NCDEX July Refined Soybean Oil shall find a support at 688/684 levels and resistance 700/705 levels. MCX July Crude Palm Oil (CPO) shall find a support at 490/484 levels and resistance 507/512 levels. Recommendation for this week: Sell MCX July Crude Palm Oil (CPO) between 505-507, SL above 512, target- 490/485.