Outlook for this week......soybean......guar complex.....

Copper: Copper futures traded lower on the back of subdued industrial production in euro area and in India escalated concerns on lower demand while China’s communist party meet on economic reforms has shortened the investor’s expectations. China is the world’s largest metals consuming country posted better than expected trade balance report for the month of October. However, economic growth in developed countries like Japan, France and Germany slowed in the June-September quarter, making unfavorable macro economic conditions for metals consumption. But some relief came for metals when the Fed testimony showed there is urgency for reducing quantitative easing as U.S. economy is not showing enough growth to its potentiality. Euro area economic worries mounted when the S&P cut France sovereign rating by one notch to “AA”, citing concerns about the country’s growth prospects. The contraction in France and slowing growth in Germany shows that the euro area economy remains weak despite dragging itself out of recession. Germany’s statistics body warned that trade was weak in the last quarter, pulling GDP growth down to rise only 0.3 percent. The French national statistics agency said that GDP fell 0.1 percent in the July to September quarter. Japan’s economy slowed less than expected in July-September. In the month of October, India’s trade deficit jumped to $10.56 billion compared with $6.7 billion in September, the trade ministry said. Price movement in the last week: MCX November copper prices opened the week at Rs 457.90/kg, initially traded slightly higher, but found strong resistance at Rs 460.15/kg. Later, copper prices fell sharply made a low of Rs 440.65/kg and finally managed to close Rs 442.15/kg (November 14, Thursday) with a loss of Rs 14.85/kg or 3.25% as compared to previous week’s close of Rs 457/kg. Outlook for this week: MCX November copper is expected to trade lower due to slowdown in growth of global economy. Release of the U.S. retail sales, U.S. existing home sales and flash manufacturing data of France, Germany and the U.S. will have effect on metals market in this week. MCX-November copper shall find a supports at 432/424 levels and resistances at 452/458 levels. Soybean: NCDEX soybean December contract traded slightly lower in the last week on account of short covering after continuous rise from the last three weeks. Higher sowing acreage of rabi oilseeds and arrival pressure kharif crop also added bearish market sentiments. According to Ministry of Agriculture (GOI), total sowing acreage of rabi oilseeds covered to 53.93 lakh hectares as on November 14, 2013, up about 23% as compared to 43.94 lakh hectares during the same period last year. However, firm overseas market and higher export figures of domestic oil meal in the month of October restricted from sharp fall in soybean prices. As per Solvent Extractors’ Association of India (SEA), export of oil-meals for the month of October 2013 reported at 368,317 tonnes, up more than 3 times or 200% compared to 122,108 tonnes in October, 2012. The export of oil-meals during first seven month of financial year (April-October 2013) is reported at 2,019,582 tons, up more than 15% compared to 1,749,412 tons during the same period of last year. Price movement in the last week: NCDEX December Soybean futures opened the week at Rs 3996/qtl, initially traded mildly higher. But found good resistance at Rs 4019.50/bbl. Later price came under pressure and made a low of Rs 3850/qtl and finally manage to close at Rs 6865/qtl (November 14, Thursday) with a loss of Rs 48/qtl or 1.23% as compared to previous week’s close of Rs 3913/qtl. Outlook for this week: NCDEX December soybean is expected to trade slightly higher on the back of firm overseas market as solid export demand and ideas that crush demand is also strong due to hefty meal exports. U.S. traders expects weekly export sales above 1 million tonnes for soybeans and 275,000 tonnes for meal as compared with sales needed each week to reach the USDA projections at 92,800 tonnes and 76,400 tonnes respectively. Further, higher export figures of domestic soy meal coupled with weakness in Indian rupee against the U.S. dollar is also positive for prices as exporter will get more return on soy meal exports. Additionally, Last year’s soybean crop revised downward to 107.00 lakh tons from 113.40 lakh tons. In the current year, in-spite of sizable increase in area under soybean, the crop is lower than last year i.e. 102.30 lakh tonnes, compared with 107 lakh tonnes in the last year due to extensive damage both in term of quality and quantity due to heavy rain fall during end September also early October at the time of harvesting. For the year 2013-14, soybean yield declined to 837kg/hectare from 1000kg/hectare in 2012-13. NCDEX December soybean shall find a support at 3760/3700 levels and resistance 4045/4120 levels. Guar Complex Guar complex traded sharply higher on the back of improved demand from stockists and as millers started crushing operations. Arrivals of fresh crop have recorded less than expectations during the last as farmers are holding their stocks in anticipation of prices will increase in coming days. Further, there is a talk about the crop damage or lower yield in rainfed areas of Western Rajasthan and higher guar gum export figures in the last month are also added bullish market sentiments. Guar gum (split and powder) export surged to 33723 tonnes in the month of October 2013, up 38% on comparing with 24504 tonnes in the month of September 2013. While, India exported 408574.82 tonnes in the year 2012-13, this was down by 42% from 707326.42 tonnes in the year 2011-12. However, in the long term, guar seed/gum may come under pressure due to higher existing carry over stocks coupled with higher sowing acreage estimates for this year as compared to last year. According to Ministry of Agriculture, Rajasthan, guar seed sowing acreage increased to 34.71 lakh hectares; up more than 15% from 30 lakh hectares in the last year. According to Ministry of Agriculture, Rajasthan, fourth advance estimates for guar seed production stood at 20.23 lakh tons in 2012-13. Arrival of fresh crop started in Haryana and Ganganagar region (Rajasthan) is also negative for prices. Price movement in the last week: NCDEX December Guar Seed prices opened at Rs 4960/qtl, initially traded slightly lower, but found strong support at Rs 4860/qtl. Later prices bounced back and finally managed to close at Rs 5350/qtl with a gain of Rs 110/qtl or 2% as compared to previous week’s close of Rs 5240/qtl Outlook for this week: Guar is expected to slightly higher on the back of improved demand from millers as started crushing operations. Higher exports data in the month of October and lower arrivals than expectation in major mandis as farmers expects prices will rise in coming days. Weakness in Indian rupee against the U.S. dollar is also supportive for prices. NCDEX December guar seed shall find a support at 5040/4730 levels and resistance 5460/5600 levels. NCDEX December guar gum shall find a support at 13900/13000 levels and resistance 15330/16000 levels.