REPEAT/SUGAR WEEKLY: May trade flat on weak demand, govt sops

 

  Sugar futures on the National Commodity and Derivatives Exchange are likely to trade flat next week after subdued demand for the sweetener from bulk consumers and as the government is likely to bring in rules to make it compulsory for sugar mills to export surplus sugar, analysts said.

  "Subdued demand for the sweetener in domestic market will pressurise the prices of sugar," said Ravi Shankar Pandey, research analyst with Karvy Comtrade.

  Domestic demand for the sweetener has fallen as monsoon, which usually brings cold weather, has started in many areas, traders said.

  Also, total sugar supply is expected to touch 38.4 million tons in 2015-16 after accounting for 10.4 million tons of carry-over stock, from the current season, according to estimates released by Indian Sugar Mills Association (ISMA).

  Meanwhile, consumption on the other hand is seen at 25.2 million tons, leaving a huge surplus of 13.2 million tons in the new season.

  However, sharp fall in sugar prices may cushioned as the government is likely to bring in rules to make it compulsory for sugar mills to export surplus sugar, analysts said.

  "Export of excess sugar will help to reduce the surplus output as well as to curb prices," said Abhijeet Banerjee, research analyst with Religare Commodities.

   Government may make it compulsory for the sugar mills to export a fixed quantity of sugar to solve the problem of glut and ease industry's liquidity problem, reported Reuters Wednesday.

  India is likely to bring in rules to make it compulsory for sugar mills to export million of tons of surplus supplies to support local price, said Reuters quoting sources.

  A final decision rests with Prime Minister Narendra Modi, who discussed the politically sensitive issue at a weekend meeting with ministers, officials and sugar mill bosses, said the two government sources.

  Meanwhile, mounting arrears and surplus stocks of sugar forced sugar mills to sale their produce at depressed prices which accelerate the exportable supply due to lower price.

  Total cane arrear has dropped a bit due to aggressive sale by domestic mills but total arrear still stood at 181.12 billion till mid June, as per government officials.

  Raw sugar October contract on the Intercontinental Exchange (ICE) slumped 2.82% to 10.85 cents per pound for the week ended Aug 6.

  White sugar October contract on the London International Financial Futures and Optional Exchange (LIFFE) fell 0.72% to $346.90 per ton for the week ended Aug 6.

  Sugar is expected to find support at Rs 2,150 per quintal and resistance at Rs 2,450 per quintal next week, analysts said.

  Sugar for October delivery traded in Rs 2,220-2,335 per quintal range in the past five trading session on the National Commodity & Derivatives Exchange.

 

Base Metal Outlook: Copper seen flat Mon on demand worries, short covering

 

  : Copper may open flat Monday on demand worries from China following weaker than expected economic data and  buying at lower level after prices dropped to five-year low on Friday, said analysts.

  "Base metals will fall on China demand worries while short covering will cushion the prices at lower level," said Ajay Kumar Kedia an analyst with Kedia Commodities.

  Base metals will be down after a government data indicated a slowdown in the Chinese economy.

  China imports fell 8.1% in July compared to analysts' estimate of 8.1% fall and 6.1% de-growth for the same period a year earlier, data by the National Bureau Statistics of China showed.

  Exports in China also declined to 8.3% for the same period compared to 2.8% growth a year ago.

  Prices of red metal will also be under pressure after China Jan-Jul copper, copper product imports fell 9.5% to 2.59 million tons on year, government data showed.

  China is the world's largest consumer of copper accounting for about 40% of total global demand and major consumer of other industrial metals.

   However, sharp fall in the red metal prices will be cushioned as investors are likely to buy back oversold position after prices dropped to five-year low on Friday, said analysts.

  On Friday, copper for August delivery at the close of trades slipped 0.43% to Rs 329.70 per kilogram on the MCX, at its lowest level since July 23, 2010.

  Red metal prices will also be under pressure on higher stockpiles of the metal on LME, indicating oversupply situation, said analysts.

  Copper stockpiles rose by 725 tons to 352,325 tons, LME data showed on Friday, its highest level since January 2014.

   On Friday, copper for August delivery at the close of trades slumped 0.43% to Rs 329.70 per kilogram on the MCX.

  MCX copper prices are likely to find support at Rs 324.6 per kilograms while resistance is seen at Rs 335.2 per kilograms today.

  London Metal Exchange (LME) copper prices may open at $ 5,147.50 per MT and find support at $5,043 MT and resistance at $5,271 per MT.

  MCX aluminium for July delivery at close of trades dropped 0.19% to Rs 100.35 per kilograms on the MCX, at its lowest level since May 23, 2012.  

   MCX aluminium prices are likely to find support at Rs 99.3 per kilograms while resistance is seen at Rs 102.1 per kilograms today.

STOCKS: Tata Motors slips 2% as Q1 net profit falls 48%

STOCKS: Divis Labs jumps 7% as Q1 net profit climbs 45%

STOCKS: Future Consumer slimps 2.6% as Q1 net loss widens

STOCKS: GSPL jumps 2.8% as Q1 net profit climbs 33%

STOCKS: Jindal Stainless slips 2.2% as Q1 net loss widens

STOCKS: UCO Bank slumps 2.8% as Q1 net profit plunges 51%

REPEAT/CRUDE WEEKLY: May trade flat on oversupply woes, short-covering

 

   Crude futures on Multi-Commodity Exchange are likely to trade flat next week on increasing supplies from global market and as investors may cover short positions at lower level, analysts said.

  "Higher global supplies are likely to pressurise the prices of crude," said Madhavi Mehta, research analyst with Kotak Commodities.

  Global oil supply surged by 550,000 barrels per day in June, on higher output from both Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC producers, International Energy Agency (IEA) said.

  World oil production jumped by 3.1 million barrels per day to 96.6 million barrels per day, with OPEC crude and natural gas liquids accounting for 60% of the gain. Non-OPEC supply growth is expected to grind to a halt in 2016, as lower oil prices and spending cuts take a toll.

  Organization of the Petroleum Exporting Countries (OPEC), which includes Saudi Arabia and other big Middle East producers, pumped over 32 million barrels per day in July, up 140,000 barrels per day from June, the Reuters data showed.

  Saudi produced more than 10.6 million barrels per day, amounting to its highest level on record, various data showed.

  Crude oil prices may also be under pressure on weak global demand forecast, analysts said.

  Global oil demand growth is forecast to slow to 1.2 million barrels per day in 2016, from an average 1.4 million barrels a day this year, International Energy Agency (IEA) said in its oil market report (OMR).

  World oil demand growth appears to have peaked in the first quarter at 1.8 million barrels a day and will continue to ease throughout the rest of 2015 and into 2016 as temporary support fades.

  Weak economic data from US and China, world's biggest consumers, will indicate lower demand, analysts said.

  Manufacturing activity in United States came lower than expected triggering growth concerns in the world's biggest economy.

  US manufacturing PMI came at 52.7 in Jul lower than analysts' at 53.5, a data from Institute for Supply Management (ISM) showed.

  Another data showed from Markit showed manufacturing in US remained steady at 53.8 in July.

  Government and a private survey showed manufacturing data in China came lower than forecast triggering growth concerns in the Asia's biggest economy.

  China NBS manufacturing PMI came at 50 in Jul lower than analysts' estimate of 50.2, a government data showed.

  Another data from Caixin/Markit survey showed manufacturing activity in China shrank most in two years.

  Caisin/Markit China manufacturing PMI dropped to 47.8 in July compared to 48.2 month ago.

  "Prices are likely to be supported on short-covering as prices have a fallen lot," Ajay Kumar Kedia, research analyst with Kedia Commodities.

  Domestic crude oil prices fell by more than 28% and traded between the range of Rs 2,826-3,797 per barrel in past six trading sessions on weak demand and increasing supplies from global markets.

  Meanwhile, US oil inventories rose by 2.4 million barrels to 459.6 million barrels for week ended Jul 31 against analysts' expectation for an increase by 1.1 million barrels, data by American Petroleum Institute (API) showed.

  US oil inventories rose by 4.2 million barrels to 463.9 million barrels for week ended Jul 31 against analysts' expectation for an increase by 1.2 million barrels, data by Energy Information Association (EIA) showed.

  West Texas Intermediate, the US benchmark, for September delivery slumped 5.49% to $44.53 a barrel on the New York Mercantile Exchange for the week ended Aug 6.

  Brent, European benchmark for September contract plunged 5.79% to $49.19 per barrel, on the London-based ICE Futures Europe exchange for the week ended Aug 6.

  However, any movement in the local currency will also impact crude oil prices, analysts said.

  The local currency rose 0.50% to Rs 63.81/$1 in the week ended Aug 6.

  Crude oil is expected to find support at Rs 2,700 per barrel and resistance at Rs 3,250 per barrel, analysts said.

  Crude for August delivery traded in Rs 2,826-3,035 per barrel range in the past five trading session on the Multi Commodity Exchange

Castor Seed in Gujarat Physical Market

At Rajkot market , Castor Seed Loose price is trading lower at Rs. 3575-3715 per quintal, down by 0.67 per cent from previous trading day. Total arrivals are at 50 per quintal, down by 91 per quintal from previous trading day. Castor Seed Loose price at Gondal market is offered at Rs. 3530-3780 per quintal, steady against previous close. Traders reported arrivals at 100 per quintal, down by 204 per quintal from previous dayn#39;s arrivals. Castor Seed Loose price at Patan market is quoted at Rs. 3800-3850 per quintal, steady as against previous close. Trade sources reported arrivals at 3750 per quintal, lower by 1875 per quintal from previous dayn#39;s arrivals. Castor Seed Loose price at Harij market is offered strong at Rs. 3840-3875 per quintal, up by 1.31 per cent against previous day. Todayn#39;s arrivals are at 1125 per quintal, up by 75 per quintal as compared to previous day. Castor Seed Loose price at Mehsana market is trading high at Rs. 3840-3860 per quintal, higher by 0.65 per cent from previous trading day. Arrivals were reported at 800 per quintal, steady as against previous dayn#39;s arrival. Castor Seed Loose price at Kadi market is quoted at Rs. 3825-3875 per quintal, steady as against previous close. Estimated market supply was at 1600 per quintal, lower by 160 per quintal from previous dayn#39;s arrivals. Castor Seed in Gujarat Market (Prices in Rs. per quintal) Market Commodity/Variety Price Change Absolute Rajkot Castor Seed Loose price 3575-3715 -25 Gondal Castor Seed Loose price 3530-3780 0 Patan Castor Seed Loose price 3800-3850 0 Harij Castor Seed Loose price 3840-3875 +50 Mehsana Castor Seed Loose price 3840-3860 +25 Kadi Castor Seed Loose price 3825-3875 0 nnbsp;