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Posts Tagged commodity news

Crude Back On Track After A “Blast”

Sep 3

Posted by FxCommcalls in Commodity Update | No Comments

Crude Oil prices rebounded on Wednesday after two straight days of decline and rose more than 2 percent, on getting strong manufacturing data from US and China, reviving risk appetite, also the dollar weakened against a basket of other currencies. Though the US Energy Information Administration (EIA) data showed crude oil stockpiles rose 3.43 million barrels last week, more than expected, but the US manufacturing sector grew faster than expected in August and relieved the concern about tepid oil demand.

Oil rebounded after the U.S. Coast Guard reported the blast, which occurred 90 miles (145 kilometers) off the Louisiana coast. The Obama administration instituted a temporary moratorium on deep-water oil and gas drilling in the Gulf on May 27 in reaction to a BP Plc oil spill, the worst in U.S. history.

Meanwhile in a survey, it was shown that OPEC crude oil supply fell in August to the lowest since November 2009 as reduced supplies from Nigeria, the United Arab Emirates and Iraq offset increased output in Angola.

Benchmark crude for October delivery rose $1.99, or 2.77 percent, to settle at $73.91, after trading in a range of $71.67 to $74.48 on the New York Mercantile Exchange.

In London Brent crude for October rose $1.93 to $73.85 on the ICE.

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Sugar Futures Trading Ban May Be Lifted

Aug 20

Posted by FxCommcalls in Commodity Update | No Comments

Agriculture Minister Sharad Pawar has indicated that the Centre is going to discuss relaxing the ban on trading of sugar futures early next month. The ban, which was placed in May 2009 to avoid price rigging in commodity, is valid till end of this month.

The decision on lifting over-a-year old ban will be taken after considering production level in September, the minister added. October to September is considered as sugar season in the country. Sugar prices have witnessed sharp correction since the beginning of 2010. In January 2010 the sweetener’s price was hovering around Rs 50 per kg level which has now corrected to around Rs 30 a kg. Change in the demand-supply dynamics is one of the major reasons for sharp drop in sugar prices.

India’s sugar production is likely to stand at around 25.5 million tonnes in the next season against the demand of around 23 million tonnes. For the current season ending September 30, 2010, the projections for production are at around 18.8 million tonnes.

Sugar futures trade was banned upon demand by the Left parties who contended that manipulation in the futures trade in the commodities market played a key role in increase in prices of essential commodity. In 2010-11, sugar output is expected at 25.5 million tonnes, higher than the annual demand of 23 million tonnes. The high output estimates, although questionable at this juncture, will ensure adequate domestic supply and lower consumer prices, allowing the government to free sugar trade without worrying about prices.

Pawar has also summarily rejected the Supreme Court’s recommendations of distribution of food grains to the hungry poor of the country instead of allowing it to rot in Food Corporation of India (FCI) godowns.

Sugar production in India, the world’s second largest producer and the biggest consumer, is estimated to touch 18.8 million tonnes in the ongoing 2009-10 season, nearly 3 million tonnes more than the earlier projection. The country has imported about 6 million tonnes of sugar since early last year as sugar output in 2008-09 and 2009-10 crop-year was lower than the domestic demand. 

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Crude Oil Update

Feb 17

Posted by FxCommcalls in Commodity Update | No Comments

Technical Recap

Bulls really controlled the action last week beginning with a boost off of the 200-day moving average followed by reinforced settlements above the crucial $72.50 benchmark area.  Prices trended higher for the week through Thursday to $75.70 before pulling back on Friday on a round of profit taking ahead of the 50 and 100-day moving averages.  The market closed firm on the week just above the 7-week dowtrend channel at $74.00 level with a minor uptrend potentially developing early this week.

We are still maintaining settlements below the broken key longer term Quarterly trend lines at the $77.00 to 78.00 range leaves the market vulnerable to renewed selling.  With options expiration on Today (Wednesday), we anticipate rallies early this week, and then begin fade against $78.00 to 80.00 leading to a turnover later in the week.

Technical Outlook

Upside:

The market reversed the 7-week downtrend to start the week off rallying off the $74.00 level on Tuesday. Maintaining settlements above $74.00 to 75.00 supports advances this week targeting the key broken Quarterly trends in the $77.00 to 78.00 range.  Trade or settlements above $78.00 brings the $80.00 psychological mark easily in range for the week.  Any settlements above $80.00 will provide solid Bullish reinforcement with the potential to propel the market back to the Jan 2010 highs at $84.00.  If momentum fades out in the $77.00-78.00 range, longs should cover all positions.

Downside:

Failing rallies at the $77.00-78.00 range generates a sell signal for an initial drive back to the broken 7-week downtrend at $74.00.  Settlements below $74.00 reinforces short term weakness as it puts prices back the weekly downtrend channel while violating the minor daily uptrend.  The objective below $74.00 is placed at the key $72.50-71.75 Support range where shorts should initially scale back positions.  Trade and settlements below $72.50-71.75 will rekindle sustainable Bear forces triggering sell offs targeting the current 2010 lows at $70.00 to 69.50 while bringing the next major objective in range at $68.50-68.00.  A settlement below $70.00 on the week, or trade that takes out the $68.00 level, lines up for $65.00 oil in the coming weeks.

 

Whats Making the News

  1. Crude futures ended sharply higher Tuesday as investors bet that Greece’s debt problems wouldn’t spill over to dent demand for commodities. Light, sweet crude for March delivery settled up $2.88, or 3.9%, at $77.01 a barrel on the New York Mercantile Exchange in its biggest one-day gain since Sept. 30. Brent crude on the ICE futures exchange settled $3.17, or 4.4%, higher at $75.68 a barrel.
  2. Crude oil prices were higher Tuesday after a new report showing that manufacturing activity is on the rise in the New York region and on a weaker US dollar that made purchases in other currencies cheaper for buyers.
  3. With no indication of a fuel price hike happening in the near future, the public sector oil refiners are hoping that crude prices do not spin out of control in 2010-11. Refiners still hope Crude Oil will stay at $75 in 2010-2011.
  4. Bharat Petroleum Corp (BPCL) bought 1 million barrels each of Algerian and Libyan crude in a tender for oil loading in April, trade sources said on Tuesday.
  5. Euro hits a high for the day at 1.3730 cable briefly breaks 1.5700 on the back of higher oil prices, now at 77.15

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Way to tackle sun outage

Jan 18

Posted by FxCommcalls in Commodity Update | No Comments

Commodity exchanges finding way to beat sun outage. The NCDEX is asking its members to connect through an alternative mode instead of VSAT (very small aperture terminal) starting February 20.

MCX has managed to overcome sun outage problem by using advance Data Networking technology jointly provided by the BSNL and MTNL for the last five years.

Sun outage occurs when a satellite and earth are in perfect position. During this period, the interference in satellite signals disturbs VSAT, a two-way satellite ground station, through which trading terminals are connected. Exchanges have been changing or suspending trade timing by 45 minutes during sun outage.

“The exchange has decided that during the sun outage period market would not be suspended and trading would continue in the normal course,” NCDEX said in a circular.

Barring VSATs, leased lines through point of presence, multi-protocol label switching and Internet remain unaffected during the sun outage, NCDEX added.

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Latest Commodity Update

Jan 11

Posted by FxCommcalls in Bullion Update, Commodity Update | No Comments

Crude oil

Crude oil prices rose to a new 15 month high on speculation that fuel demand will rebound as freezing temperatures in the northern hemisphere and weakening dollar also supported the prices.
The oil advanced for the second day as Chinese crude imports climbed to a record 203.8 million metric tons last year weighing over weak last weeks weak US NFP data. Chevron corp, the second largest US energy producer said the Makaraba-utonana pipeline it operates in the southern Nigeria’s delta state was breached on Jan 8, affecting 20,000 barrels of crude oil production a day. Attacks by armed groups in Nigeria’s oil rich delta region have cut the country’s output by more than 25 percent since 2006. Crude Feb month contract was trading at $83.5 gaining 1.57 percent. Crude oil mcx Dec contract was trading at Rs 3790 gaining 0.03 percent.

Base Metals

Copper futures prices rallied for the first time in last three days as Chinese imports and weak dollar boosted investors confidence in the metal. The china imported 369,368 metric tons of copper and its products in December, 27 percent increase from November. The Chinese exports of all products climbed for the first time in 14 months, according to census bureau. LME copper inventories rose by 4575 metric tons and mcx copper is trading at 348.10 gaining 0.96 percent.

 

Technical Trends

GOLD MCX Feb

While above 17000 prices could stay firm and could target 17080/17125 followed by 17250 levels. Unexpected fall below 16978 could see a move lower towards 16920 followed by 16870 levels.
Res: 17080/ 17160 Supp: 16970/16920

Silver MCX Mar:

As long as 28320 holds, prices could move up and find resistance at 28600 initially followed by 28730/29000 levels. If unable to hold 28300 expect a corrective move towards 28150/27980.
Res: 28610/28730 Supp: 28300/ 27980

CRUDE MCX Jan

Dips to 3763 may find support for a rise towards 3805 initially. Rallies above 3812 could invite fresh rallies towards 3848/3878. Falls below 3752 may cause doubts on the bullish view.
Res: 3812/3870 Supp: 3762/3736

Natural Gas MCX Jan

As long as support at 251/249 holds prices could stay firm and edge higher towards 258/261 followed by 264. Falls below 249 may negate the view and target 241.
Res: 258/264 Supp: 254/247

Copper MCX Feb

Dips to 347/345 hold downside expect to move up and find resistance at 349/350.50 followed by 354. If unable to hold 345 drag prices lower towards 343/341 levels.
Res: 349/351 Supp: 347/ 345

Lead MCX Jan

As long as 118.70/120 caps the upside expect a corrective fall towards 117/116 followed by 115.30. Needs to break 120 to negate the view.
Res: 118.70/120 Supp: 117/ 116

Nickel MCX Jan

Moves to 844 may find resistance for a fall towards 831/826. Break below 825 could invite fresh sell off towards 814/802. Needs to break 847 to negate the view.
Res: 845/862 Supp: 831// 824

Zinc MCX Jan

If 118 cap the upside expect a fall towards 116.50/115.50. Need to break 118.70 to negate the view.
Res 118/119 Sup: 116.70/115

Aluminium MCX Jan

If 105 expects to move up and target 106/106.80followed by 107.60 Needs to break 104.20 to negate the view.
Res: 106.20/107 Sup: 105/104.40

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