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Commodity Important Updates for 23 May 2016

Commodity Important Updates for 23 May 2016

Silver trading range for the day is 39423-40355.Silver remained under pressure amid speculation the Federal Reserve will raise interest rates as soon as next month. Feds Dudley said a June to July time frame for a hike was reasonable, while Feds Lacker said there was a very strong case for a raise next month. Holdings at ishares silver trust gained by 0.28% i.e. 29.58 tonnes to 10451.53 tonnes from 10421.95 tonnes. Traders boosted bets that U.S. policy makers will raise interest rates in the next few months, spurred by comments from Fed officials.

Zinc trading range for the day is 124.1-127.9.Zinc prices settled with small gains as speculators closed out bearish positions before the weekend, but it pared gains as the dollar rebounded. As per WBMS data, the global zinc market recorded small surplus of 90 kt during the initial three months of the year from January to March. Global refined zinc production witnessed decline of 6.4% during the initial three-month period of 2016. Warehouse stock for Zinc at LME was at 386750mt that is down by -600mt.

Jeera trading range for the day is 16455-16805.Jeera prices gained on expectation of good export demand on reports of good quality jeera production this year in the producing belts. In Rajasthan, jeera output expected to be lower this year, compared to last year due to hot weather and lower acreage. NCDEX accredited warehouses jeera stocks gained by 20 tonnes to 4091 tonnes. In Unjha, a key spot market in Gujarat, jeera edged up by 43.55 rupees to end at 16958 rupee per 100 kg.

Turmeric trading range for the day is 7898-8094.Turmeric gained on account of increasing demand from traders and stockiest at the spot market. Farmers are holding good quality stocks hoping prices to go up in the coming months. NCDEX accredited warehouses turmeric stocks gained by 135 tonnes to 5133 tonnes. In Nizamabad, a major spot market in AP, the price ended at 8500 rupees remains unchanged at0 rupees.

Chana trading range for the day is 5839-5959.Chana prices dropped triggered by sluggish demand against increased supplies at spot market. However, expectations of tight supplies due to lower production reports and expensive imports, capped some losses. NCDEX accredited warehouses chana stocks dropped by 201 tonnes to 3068 tonnes. In Delhi spot market, chana dropped by -20.9 rupee to end at 6132 rupee per 100 kgs.

Soyabean trading range for the day is 3897-4029. Soyabean prices gained on higher demand in international market following improved export data from United States and Brazil. According to USDA, weekly export of soybean for 2015/16 was around 556,400 tons which is noticeably up on week. NCDEX accredited warehouses soyabean stocks dropped by 1721 tonnes to 45388 tonnes. At the Indore spot market in top producer MP, soybean gained 14 rupee to 4061 rupee per 100 kgs.

Menthaoil trading range for the day is 854.4-896.8. Mentha oil spot at Sambhal closed at 1013.90 per 1kg. Spot prices is down by Rs.-4.70/-. Mentha oil prices dropped driven by weak demand from consuming industries at the spot market. Further, rising arrivals from major growing regions of Chandausi in Uttar Pradesh also weighed on mentha oil prices. Markets had remained weak for quite some time from lack of demand amidst reports of higher sowing activities.

Naturalgas trading range for the day is 134.4-142.2.Natural gas rose for a second straight session after inventory data showed that stockpiles had risen less than expected last week. But prices posted a third straight weekly decline amid concerns about the continued oversupply of gas. Natural-gas inventories rose by 73 billion cubic feet in the week ended May 13, the Energy Information Administration said, below the 78 bcf expected Natural-gas demand is expected to be low in the next 15 days, due to mild weather that reduces the need for indoor heating or cooling.

Aluminium trading range for the day is 102.6-106.8.Aluminum pared gains as the dollar rebounded but posted weekly advance as the lowest Chinese stockpiles in a year signal a tightening market for the metal. Aluminum stocks in LME warehouses now at lowest since 2009 and Shanghai inventories of the metal drop to the lowest in a year China, the maker of about half the world’s aluminum, will export less in 2016 as output expands at the slowest pace in five years. Warehouse stock for Aluminium at LME was at 2560550mt that is down by -5575mt.

Nickel trading range for the day is 563.4-587.6.Nickel dropped amid renewed concerns that Fed will soon boost U.S. interest rates and mounting speculation that demand will slow in China. A global nickel market deficit widened to 8,200 tonnes in March from a month earlier, led by a surge in demand from China. Nickel weekly stocks at Shanghai exchange came up by 2074 tonnes. Warehouse stock for Nickel at LME was at 404556mt that is down by -1104mt.

Copper trading range for the day is 304.6-315.6.Copper dropped undermined by a firmer dollar as better U.S. economic data boosted the outlook for a June rate hike. The U.S. economy could be strong enough to warrant an interest rate increase in June or July, New York Federal Reserve President William Dudley said. Signs that buyers in China were becoming more active emerged as local copper prices in the physical market traded higher than front-month futures on SHFE. Warehouse stock for Copper at LME was at 155725mt that is down by -2875mt.

Crudeoil trading range for the day is 3205-3371.Crude oil prices pared gains amid broad signals that supply disruptions in Nigeria, Canada and Libya are about to end. In Nigeria, militant activity has cut oil exports below 1.4 million bpd, the lowest in more than 22 years. Russian Energy Minister Alexander Novak said he saw supply in excess of demand of around 1.5 million bpd. Oil services firm Baker Hughes said Friday in its weekly rig count that U.S. oil rigs were unchanged last week at 318, halting an 8-week streak of weekly declines.

Gold trading range for the day is 29521-29955.Gold remained on track for its biggest weekly slide in nearly two months on growing expectations of an increase in U.S. interest rates as soon as next month. New York Feds Dudley said that there was a strong sense among central bank officials that markets were underestimating the probability of policy tightening. Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Shares, rose by 8.92 tonnes to their highest since November 2013.Gold demand in Asia was subdued this week by a strengthening dollar and weak seasonal demand in major trading centers.

Mentha oil update: Mentha oil is used for several purposes like in the food, perfumery, flavoring and pharmaceutical industry. It is used in manufacturing of products like lozenges, toothpaste, pain balm, cold balm etc. Strong industrial growth over two decades and increasing off-take from tobacco industry has pushed up the consumption of menthol. In India, menthol and mint oil are extensively used in betel (pan) related industries. Acche din are far away for Mentha, Mentha prices since June2015 trading with weakness and dropped almost -24% from high of 1146 to 870 this week. Earlier to June2015 prices surge from 670 onwards as support reportedly came after excise duty on pan masala has been increased to 16 per cent from 12 per cent, unmanufactured tobacco to 55 per cent from 50 per cent; gutkha and chewing tobacco to 70 per cent from 60 per cent. Now this week after liquor, the Bihar government has cracked down on gutka and pan masala, banning the sale, distribution, storage and publicity of such tobacco products. The government issued an order on Friday, authorizing officials to conduct raids and inspections and take action against those flouting the guidelines. The ban, which will remain effective for the next one year, on edible items having tobacco content, both packaged and unpackaged, aims at preventing the deterioration of public health, officials said. But, the order will hit the business interests of a large number of small businessmen and vendors. The ban on the sale of gutka in many states in the recent past led to a reduced demand of mentha oil in the domestic sector at the same time, its demand slowed from overseas markets due to weakening global economies. Outlook: Lastweek prices started the week with positive node and surge above the 894.20 the level seen on 22 April 2016 to test 895.60 but failed to breached 900 level again and dropped to close at 867.90. Now technically prices should get support at 852.50 and below support is at 837.20 while resistance will be at 892.50 and above same can test 926.70 level on weekly bases. Trader this week should be more caution on this counter as weakness can be seen in first 2 session to test 850-845 level.

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