Silver prices are expected to continue the bull run which began in
October 2008 while copper prices are riding high on falling
inventories in LME. MCX Silver prices made huge gains at Rs 31,321
while US Silver futures prices rose to $19.9 levels targeting a
possible $21 plus levels soon. Gold prices have continued to hover
around $1254, $10 short of the alltime high of $1264 set in
Global wheat harvest largest ever
A U.N. agency says the 2010 global wheat harvest is one of the
largest ever but experts say a less stable climate will mean bigger
food supply fluctuations.
The United Nations reported a 5 percent rise in food prices in
August, The New York Times said. Contributing factors included a
Russian ban on wheat exports because drought has cut the harvest by
20 percent and flooding in Canada and Argentina.
In Mozambique, 10 people died and 300 were hurt in recent riots at
least partly caused by a sharp jump in bread prices. The unrest was
a reminder of the situation in 2008 when riots occurred in several
This year's wheat harvest is the third-biggest ever and food prices
are still about 30 percent below 2008 levels.
Other nations can make up for Russia grain loss
The U.N. Food and Agriculture Organization, based in Rome, has
scheduled a Sept. 24 conference of agricultural experts. Abdolreza
Abbassian, an FAO economist, said Friday other grain suppliers can
make up for the loss of wheat from Russia but psychological factors
come into play when supplies are disrupted.
Professor Per Pinstrup-Anderson of Cornell University said
climate change will bring more extreme weather in many areas.
"We are going to have much bigger fluctuations in weather and
therefore the food supply than we had in the past, so we are going
to have to learn how to cope with fluctuating food prices," he
India sugar production
Sugar production in India, the biggest consumer, may jump 17
percent as rains improve yields, helping the nation meet domestic
demand, Agriculture Minister Sharad Pawar said.
India's sugar output may rise to 22 million metric tons, news
reports quoting him in New York said. India's monsoon rainfall, the
main source of irrigation for the nation's 235 million farmers, was
1 percent below normal from June 1 to Aug. 30, the Indian
Meteorological Department said.
India has been a net buyer since 2008 after a drought ravaged
crops, pushing prices in New York to a 29-year high of 30.4 cents
in February. Increased production from the Asian country may weigh
on prices that have slumped 24 percent this year on bets that
rising supplies may erase a global deficit.
India forex reserves up
India's foreign exchange reserves rose to $282.842 billion as on
Aug. 27, from $282.549 billion in the previous week, the central
bank said in its weekly statistical supplement on Friday.
Changes in foreign currency assets, expressed in dollar terms,
include the effect of appreciation or depreciation of other
currencies held in its reserves such as the euro, sterling and yen,
the central bank said.
Foreign exchange reserves include India's Reserve Tranche position
in the International Monetary Fund (
), the central bank said.
India's food inflation up
India's food and fuel inflation accelerated in the third week of
August, maintaining pressure on the Reserve Bank of India (RBI) to
tighten monetary policy.
Despite a muted global economic recovery and signs that India's
booming growth may have peaked, the RBI is expected to raise rates
by another 50 basis points in 2010. Data released on Friday showed
that the food price index, which has a weightage of over 15 percent
in the wider wholesale price index, rose an annual 10.86 percent in
the week to Aug. 21, more than its 10.05 percent rise in the
US Gold prices rose to $1254 an ounce on economic recovery concerns
but there after weakened to $1239 on better than expected US
payrolls data although a disappointing service industry index did
provide support towards weekend. Next week trading may be lower on
account of a light economic calendar and two holidays. New York
market will be shut on Monday.
SPDR- the world largest gold-backed exchange traded fund
reversed inflow and as its holdings fell 9 tonnes to 1249.908
tonnes on Thursday. Gold prices rose 6% in August. In Indian market
gold prices were muted as traders were cautious about placing fresh
Silver prices turned bullish and rose to $19.47 and is expected
to resume a bull trend that began in October 2008. Some analysts
expect silver to rally to $21.35. Comex December silver rose to
$19.949 while spot silver traded at $19.82 levels. Rally in
industrial metals following positive US labor market report also
aided the positive sentiments towards silver. MCX December Silver
made huge gain of Rs 885 at Rs 31, 321.
Copper prices rose on positive US payroll data, the red metal has
advanced 14% since June 1,as LME inventories dropped. Last week
copper gained 3.6%, the biggest increase since late July. Copper
December at Comex rose to $3.50;/lb and looks set for a rally to
$3.65/lb and the rally looks sustainable on China demand. Other
metals, Aluminium, lead and nickel also climed in US and UK
markets. At MCX, November copper contract rose to Rs 359 levels, a
gain of Rs 6.
Crude oil prices fell as fundamentals are not supportive of the
energy complex. US petroleum stock piles which are a mixture of oil
and fuel supplies have increased by 4.04 mn barrels or 0.4% to 1.14
bn barrels, the highest level since 1990. Last week, oil prices
climbed on better than expected US jobless data but fell towards
weekend on service industries data which showed US service sector
grew at the weakest pace in seven months, raising concerns about
economic recovery. Index of non-manufacturing business fell to 51.5
in August from 54.3 the prior month.
Nymex Crude oil futures slipped 0.8% this week and ended at
$74.60 while brent crude at London Inter continental Exchange (
) last traded at $76.67. Futures weakened on explosion of oil and
natural gas platform at Mariner Energy Inc in the Gulf of Mexico.
Fundamentals of oil continue to be bearish in the short to medium
term. The commodity touched a low of $64.24 on May 20.
MCX September Crude oil fell marginally to 3471 tracking global
Chana prices weakened on mounting stocks, higher acreage under
kharif pulses and fresh arrivals of moong in the spot markets.
NCDEX September contract fell from Rs 2242 to Rs 2179 before
climbing back to Rs 2196 on bargain hunting on Friday. Traders took
advantage of 3% fall in prices to make purchases. Hopes of pickup
in demand ahead of festivals such as Ganesh Chathurthi and Diwali
also supported prices. Sufficient rains in chana growing regions
raised the prospects of sowing in the coming season due to good
soil moisture levels. As on August 26, area under Kharif pulses
stood at 10.9 mn ha compared to 8.9 mn ha a year ago. NCDEX October
contract fell from Rs 2294 to Rs 2243 before climbing up to 2263 on
bargain buying in the weekend. Chana prices may continue to trade
bearish with only festival demand to support in the near term.
India pepper prices continue to trade range bound even as
fundamentals are supportive of a bullish trend. Weak supplies and
lower stocks provide firm support for black pepper while higher
prices of Indian parity has led to weak export demand while
Indonesia and Brazil are quoting lower. India's pepper exports rose
2% to 6750 tonnes from April to July 2010, Spices Board data
NCDEX September contract weakened from Rs 20, 259 to Rs 20,212
before falling to below Rs 19500 levels while October contract fell
from 20447 to Rs 20401 before falling to a low of Rs 19,641. Pepper
is likely to trade bullish on tight supplies while weak export
demand may cap gains even as festive demand provides some
India's oil and oilseeds market slumped on higher supplies due to
increased imports and rise in soybean crushing. As on August.
26,area under oilseeds in the world's biggest edible oil importer
stood at 16.59 million hectares, against 15.92 million hectares a
year ago, Ministry of Agriculture said.
Major oilseeds-growing states such as Madhya Pradesh,
Maharashtra, Gujarat, Andhra Pradesh and Rajasthan received good
rains in the current monsoon season.
In US markets soybean prices rose towards weekend on speculation
that Chian, world's largest consumer will import more in the coming
marketing year. China is expected to import 55 mn MT in themarket
year that begain in October 1 up from 52 mn MT last year.
Industrial feed output is expected to double in 10 years. US
soybean futures for November rose to $10.35 per bushel rising 0.9%
At India's NCDEX, September soybean fell from Rs 2058 to RS 2017
before climbing back to Rs 2046 on bargain buying while September
soyoil contract fell from RS 490.9 to Rs 480 before climbing back
to Rs 486.35 and September Rapeseed closed marginally lower at Rs
535 after hitting a low of Rs 527. Indore soybean spot market
prices rose to Rs 2012 on Friday.
India's spot rubber prices have fallen from a high of Rs 186
recorded on August 6 to Rs 163 thanks to a jump in production in
August and on hopes that farmers will harvest more in view of
higher prices. Spot prices for RSS 4 grade have climbed back to Rs
165 levels during the weekend on fresh buying and short covering.
Traders expect tyre manufacturers to re-enter the market soon,
there by creating positive sentiments.
Rubber prices have declined over fears that the government will
cap the import duty on the commodity. The proposal for capping the
import duty on rubber had led to a sharp decline in rubber prices
in the domestic market.
An expert panel had earlier recommended that the import duty
should be retained at 20 per cent, but a maximum ceiling of Rs
20.46 should be fixed, based on the average domestic price of
rubber for the last three financial years. The recommendation was
made after hearing the views of consumer industries and submissions
by the grower organisations. At NMCE, September futures weakened
from Rs 16817 to Rs 16,496 while October contract weakened from
16417 per 100 kg to Rs 16279.