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Commodity Important Updates for 26 May 2016

Commodity Important Updates for 26 May 2016

Global Markets update – Oil prices top $50, Asian shares struggle on China worries , Asian shares flat, keep some distance from 12-week low , Emerging market still weighed by worries on Fed China , Oil prices at 7-month high after U.S. inventory data

Silver trading range for the day is 38932-39568. Silver prices were little changed after sharp declines as investors shifted their attention to a spate of economic data. Speculation about the path and timing of a Federal Reserve interest rate increase continued to weigh on the precious metals market. Participants will be actively monitoring the US economic data over the next two days to determine the Fed’s plans for next month s interest rate meeting. Investors are looking to an appearance by Fed chair Janet Yellen at week s end for further indications on the timing of the FOMC first interest rate hike in 2016.

Zinc trading range for the day is 121.8-125.2. Zinc prices recovered to settle flat on short covering amid with oil amid speculation the world economy will cope with the impact of higher U.S. interest rates. Overall sentiment in the financial markets was boosted by news that creditors reached an agreement to release 10.3 billion euros of aid funds to Greece. Premiums for zinc held in Shanghai bond fell $20 to $115, the lowest since last August. Warehouse stock for Zinc at LME was at 385075mt that is down by -600mt.

Nickel trading range for the day is 554.7-575.5. Nickel prices dropped as LME Nickel slipped 0.7 percent as developments on the supply-side also suggest caution and a less bullish view towards nickel. Confidence at Japanese manufacturers tumbled to a three-year low in May and is seen recovering only modestly in the next three months Next week, Chinese manufacturing PMIs will offer further clues on the country’s growth and demand appetite. Warehouse stock for Nickel at LME was at 401874mt that is down by -630mt.

Naturalgas trading range for the day is 142.9-149.1.Natural gas struggled near a one-month low as traders looked ahead to fresh weekly information on US gas inventories. The latest U.S. weather model called for mild temperatures over the next two weeks, which should reduce heating demand during that time. Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting outlooks on spring heating demand. EIAs storage report slated for release on Thursday is expected to show a build of approximately 67bcf for the week ending May 20.

Menthaoil trading range for the day is 861.5-882.3.Mentha oil spot at Sambhal closed at 1013.90 per 1kg. Spot prices is up by Rs.1.50-.Mentha oil dropped driven by sluggish demand from pharmaceutical units in the spot market. Besides, rising arrivals from major producing belts of Uttar Pradesh also influenced mentha oil. At Sambhal market estimated market supply was at 60 Drums (1-drum=180kg), down by 10 Drums (1-drum=180kg) as compared to previous day.

Soyabean trading range for the day is 3828-3974.Soyabean prices dropped on easing worries after Skymet raised monsoon forecast and on subdued demand following weak export data. USDA reported export inspections of US beans in the latest week at 77,372 tons, below a range of trade expectations for 100,000 to 250,000 tons. NCDEX accredited warehouses soyabean stocks dropped by 1795 tonnes to 38141 tonnes. At the Indore spot market in top producer MP, soybean dropped -66 rupee to 4040 rupee per 100 kgs.

Jeera trading range for the day is 15705-16265. Jeera dropped on account of a surge in the supply from the producing regions. Traders are expecting some more export enquiries at lower prices on good quality jeera this year but the demand is limited. NCDEX accredited warehouses jeera stocks dropped by 29 tonnes to 4095 tonnes. In Unjha, a key spot market in Gujarat, jeera edged down by -66.65 rupees to end at 16700 rupee per 100 kg.

Turmeric trading range for the day is 7790-8038. Turmeric prices gained on lower level buying after prices dropped earlier on anticipation of good sowing in next season on forecast of good rains. New season crop has hit the markets and continue to peak in current month but majority of arrivals are of medium quality. NCDEX accredited warehouses turmeric stocks gained by 40 tonnes to 5457 tonnes. In Nizamabad, a major spot market in AP, the price ended at 8469.45 rupees dropped -13.85 rupees.

Chana trading range for the day is 5921-6171.Chana prices dropped amid easing demand against ample stocks position in the spot market. Further, reports of government to relax VAT and other taxes too weighed on chana prices. NCDEX accredited warehouses chana stocks dropped by 52 tonnes to 2595 tonnes. In Delhi spot market, chana gained by 15.7 rupee to end at 6236.55 rupee per 100 kgs.

Aluminium trading range for the day is 102.5-105.7.Aluminium dropped pulled down by rising local production as higher prices encourage smelters to restart and exacerbate a local glut. Meanwhile, Chinese factories, which typically slow down over the northern hemisphere summer months, are scrimping on their orders. Data on U.S. unemployment and durable goods are due later, potentially offering further evidence on the strength of the U.S. Warehouse stock for Aluminium at LME was at 2544325mt that is down by -5375mt.

Copper trading range for the day is 309.8-318.4.Copper prices gained as investors bought futures to close positions betting on price falls, unsure about the short-term market direction due to mixed signals from China. Also supporting copper were LME warehouse cancellations of about 18,000 tonnes over the past two days. Latest China data souring the mood included copper exports that surged by 38 percent to 32,371 tonnes while refined imports rose by only 3.7 percent to 341,677 tonnes. Warehouse stock for Copper at LME was at 155250mt that is down by -2000mt.

Crude Oil trading range for the day is 3259-3383.Crude oil prices ended with gains after data showed that oil supplies in the U.S. fell more than expected last week. A series of outages around the world, such as wildfires in Canada and a spate of violence in Nigeria’s oil-producing region, has helped cut global oil supply. U.S. Crude stocks fell 4.2 million barrels to 537.1 million in the week to May 20, the steepest weekly drop in seven weeks, the EIA said Crude oil imports fell 4.7 percent to 7.3 million barrels per day last week, the EIA said.

Gold trading range for the day is 28657-29363.Gold fell to a seven-week low after upbeat US data boosted expectations that the Fed will press ahead with interest rate hikes in the near term. The dollar hit a two-month high on expectations the Fed will raise rates in the near term. IMF showed regular official sector gold buyers China, Russia and Kazakhstan raised their bullion reserves again last month. Holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Shares, fell 3.9 tonnes on Tuesday to 868.66 tonnes, its first decline in a month.

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