love_gundu22
Praveen Gurwani
Base metals to remain under pressure
Copper: Sell on rise
Copper closed at $7,040 per tonne on the LME yesterday. The
growth prospects of the various economies are clouded,
affecting the prospects of an increase in the demand for
copper. Along with the seasonal correction, concerns about
the world’s economic growth are looming large on the counter.
Expect the various economic data from the USA to have an
impact on the counter, which will result in high volatility. The
US inflation data should also have an impact on the counter.
The weakness is likely to persist and hence sell on rise.
Aluminium: Under pressure
The biggest aluminium producer Alcan has stated that the
improvement in the mining of bauxite and the expected
improvement in the power supply in China should see higher
aluminium production. Amidst the prospects of adequate
supplies the pressure is likely to continue in the counter in
the medium term and hence sell on rise.
Sugar: Stuck in a range
There is a lack of demand for sugar in the spot market and
a lack of buying interest in the futures market. The volumes
are very thin and there is no market moving news.
Internationally, the bids offered to Pakistan and Egypt were
rejected, as the prices offered were very high. Owing to an
absence of market moving news and poor demand expect
sugar to trade in a range.
Wheat: No clear direction
The prices of wheat displayed range-bound moves yesterday
in the futures. The spot prices have also been moving at the
upper end of the range. The demand from south India is
continuing, supporting the prices. The stockists are still not
releasing their stocks due to the depressed monsoon activity.
The situation is expected to continue for a few more days.
Soya bean: Some upmove likely
The spot prices were strong in both the spot and futures
markets on weather concerns. The delay in the rains has led
to some postponement in the sowing of seeds. As a result there
is speculation of a price rise. The rise in soy oil prices also
helped the counter. However, the medium term outlook does
not change much. The break in the rains has to be very prolonged
in order to have an impact on the production.
Bullions: Slide to continue
Bullions are likely to extend the correction, as concern about
the interest rates still looms large. Further downside is visible
in bullions from the current levels as our average annual
gold price is $593 per ounce.
The dollar touched a six-week high against the euro on
growing expectations that the Federal Reserve will continue
to raise interest rates. The key US data this week starting
with the PPI numbers would decided the fate of the yellow
metal. Silver is no exception and is also vulnerable to a
downmove as indicated in our position pointer.
Meanwhile, the Federal Reserve Chairman Ben Bernanke is
scheduled to make three appearances this week. After
hawkish comments on inflation last week, the markets are
expecting the Federal Reserve to raise the interest rates for
a 17th straight time at its June 29 meeting. For details on
the same, refer Commodity Insights released on Monday.
Crude oil: Taking support
Crude oil prices drifted lower to hover around $70 a barrel on
Tuesday after the tropical storm Alberto missed the Gulf of
Mexico. The storm Alberto unexpectedly gained strength over
the Gulf of Mexico on Monday, threatening to become the
season's first hurricane, but remained on track to come ashore
in northwest Florida, well clear of the Gulf oilrigs and refineries.
With the gasoline stocks down by about 2.4% from the year
ago levels and the nuclear issue still looming large, we expect
a base of around $70 for crude oil before the next upmove.
Copper: Sell on rise
Copper closed at $7,040 per tonne on the LME yesterday. The
growth prospects of the various economies are clouded,
affecting the prospects of an increase in the demand for
copper. Along with the seasonal correction, concerns about
the world’s economic growth are looming large on the counter.
Expect the various economic data from the USA to have an
impact on the counter, which will result in high volatility. The
US inflation data should also have an impact on the counter.
The weakness is likely to persist and hence sell on rise.
Aluminium: Under pressure
The biggest aluminium producer Alcan has stated that the
improvement in the mining of bauxite and the expected
improvement in the power supply in China should see higher
aluminium production. Amidst the prospects of adequate
supplies the pressure is likely to continue in the counter in
the medium term and hence sell on rise.
Sugar: Stuck in a range
There is a lack of demand for sugar in the spot market and
a lack of buying interest in the futures market. The volumes
are very thin and there is no market moving news.
Internationally, the bids offered to Pakistan and Egypt were
rejected, as the prices offered were very high. Owing to an
absence of market moving news and poor demand expect
sugar to trade in a range.
Wheat: No clear direction
The prices of wheat displayed range-bound moves yesterday
in the futures. The spot prices have also been moving at the
upper end of the range. The demand from south India is
continuing, supporting the prices. The stockists are still not
releasing their stocks due to the depressed monsoon activity.
The situation is expected to continue for a few more days.
Soya bean: Some upmove likely
The spot prices were strong in both the spot and futures
markets on weather concerns. The delay in the rains has led
to some postponement in the sowing of seeds. As a result there
is speculation of a price rise. The rise in soy oil prices also
helped the counter. However, the medium term outlook does
not change much. The break in the rains has to be very prolonged
in order to have an impact on the production.
Bullions: Slide to continue
Bullions are likely to extend the correction, as concern about
the interest rates still looms large. Further downside is visible
in bullions from the current levels as our average annual
gold price is $593 per ounce.
The dollar touched a six-week high against the euro on
growing expectations that the Federal Reserve will continue
to raise interest rates. The key US data this week starting
with the PPI numbers would decided the fate of the yellow
metal. Silver is no exception and is also vulnerable to a
downmove as indicated in our position pointer.
Meanwhile, the Federal Reserve Chairman Ben Bernanke is
scheduled to make three appearances this week. After
hawkish comments on inflation last week, the markets are
expecting the Federal Reserve to raise the interest rates for
a 17th straight time at its June 29 meeting. For details on
the same, refer Commodity Insights released on Monday.
Crude oil: Taking support
Crude oil prices drifted lower to hover around $70 a barrel on
Tuesday after the tropical storm Alberto missed the Gulf of
Mexico. The storm Alberto unexpectedly gained strength over
the Gulf of Mexico on Monday, threatening to become the
season's first hurricane, but remained on track to come ashore
in northwest Florida, well clear of the Gulf oilrigs and refineries.
With the gasoline stocks down by about 2.4% from the year
ago levels and the nuclear issue still looming large, we expect
a base of around $70 for crude oil before the next upmove.