Commodity Research Report Ways2Capital 1 May 2018

 

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BULLION
Last week, spot gold prices rose 1.4 percent to trade at $1316 per ounce while MCX gold prices declined 1 percent although rupee depreciation of around 0.9 percent cushioned sharp downfall. Spot silver prices declined around 4 percent to close at $16.5 per ounce in line with fall in gold and base metals prices while stronger dollar index also exerted downside pressure on silver. Stronger US dollar and lofty bond yields have dampened the interest in bullion for traders and investors across the globe. Growing supply of US government debt and inflationary pressures from ris-ing oil prices have pushed the yields on the 10 year bond yields above 3 percent for the first time in four years.

BASE METALS
LME Copper prices plunged 2.6 percent while MCX prices fell 2.3 percent last week as dollar surged to three and half month highs buoyed by rising bond yields above 3% for the first time since 2014. The rise in yields was a result of expectations that the Fed would raise interest rates more aggressively to combat inflation. Further downside was limited as failed negotiations at Escondida mine in Chile and Gras-berg in Indonesia, world's biggest Copper mines, supported the red metal. Alumin-ium led the losses in base metals, down by a whopping 10 percent last week, after the US extended deadline given to American customers of Rusal to comply with the sanctions, from June to October 2018. Nickel was the second worst performer since the fears of sanction extension to Norilsk Nickel eased.

ENERGY
WTI oil prices declined by around 0.8 percent last week while MCX oil prices rose marginally by 0.2 percent in the same time frame. Risk of renewed U.S. sanctions on Iran, plunging Venezuelan output, and robust global demand shook off the ef-fects of a strong dollar on oil prices.

SPICES
Turmeric futures prices registered sharp gains during its trade in last week. Prices traded higher on expectations of good demand in the coming days. Fur-ther, report of strong export demand is a positive factor for turmeric futures prices.
Dhaniya futures traded higher to stage recent recovery from their continuous recent fall on profit booking. However, recovery was limited tracking weaker demand side at the spot markets. Arrivals at the spot market are higher due to peak harvesting season with limited buying demand


OIL & OILSEEDS
NCDEX Refined soy oil dropped 0.5% last week tracking firmness in Indian currency. Moreover, limited buying at physical market also weighed on prices last week RM Seed futures traded down on limited buying at physical market. Most active May contract of RM seed traded at NCDEX closed the day at Rs.3831/quintal, lower by 0.05% against the previous close. Soybean futures extended its gains following firmness in CBOT soybean futures. CBOT soybean futures gained substantially after President Donald Trump's confirmation in last week that he would send a high-ranking team to China to start negotiations on trade dispute with China.

GUAR COMPLEX
Prospects of a normal monsoon for the third consecutive year kept pressure on the market sentiments for Guar as prices failed to hold above the 9000 mark. Firmness in crude oil prices and a firm Dollar vs Rupee kept supporting market sentiments. But good monsoon reports amidst higher stocks limited the uptrend. Strength in crude oil will keep export demand of guar gum quite stable. Consumption of drilling chemicals is increasing with rising

OTHERS
The near term fundamentals for RM seed are most likely to restrict the up-side movement in coming sessions. As per the charts, the May contract is now expected to find tough in sustaining above 3835- 3850. RM seed could not sustain at higher levels and settled even below 3800 support. On daily basis the May contract was down roughly 2%. The good Monsoon reports and ongoing arrival season are keeping sentiments bearish for RM seed also since it would imply better sowing prospects during its planting sea

Calls of the Week (MCX)
COPPER
CRUDE OIL
Copper prices retreated after early gains while losing 2.19 percent last week. On weekly chart, a bearish candle has formed after an unsuccessful attempt at breaking upside resistance of Rs.470 mark in the June series. However, counter witnessed selling pressure after reaching 12-week peak but trading above key support at Rs.452 mark that can assist prices to recover. However, a break below the same can exert pressure on prices that can lead to next support level of Rs.440 mark

CRUDE OIL
After a strong rally for two consecutive weeks, counter paused for the week to take a breath. On weekly charts, prices traded with marginal gains of 0.35% at Rs.4547/bbl and formed a doji candlestick pattern. Pattern suggests that the bulls in current rally of uptrend are now losing steam and fresh sellers are ready to step in. RSI on daily charts is trading close to overbought zone of 73 which indicates selling pressure in the counter, which may push it to next support of Rs.4330/bbl. As of now short term trend on four hourly and hourly charts remains bearish

Calls of the Week (NCDEX)
SOYREF
Last week SYOREF May Futures started the week on negative note and made a low of 761.10 and closed at 762.50 with overall marginal loss of 1.82% on weekly basis. And continuously making lower highs and lower lows indicating bearish trend in upcoming session.Technically for this week, we can expect further downside movement in it due to support level breakout & formation of bearish candlestick patterns on the higher levels. For this week, if it breaks the level of 759, then it can test the level of 745 during the week. One can make sell position in it by maintaining a SL 767.30

CASTORSEED
NCDEX Castor Seed Apr future continued to trade in the range of 4270-4170 for the fourth consecutive trading week. Price made the low of 4160 during the week and the high of 4260 and settled at 4242. Market closed flat during the week with higher volume and open interest indicating building of long positions. We can expect market can break its resistance level of 4270 on this week.

Calls of the Week (FOREX)
GBPINR
Last week GBPINR May Futures started the week on negative note and made a low of 92.9125. However it witnessed positive movement on Wednesday but overall closed in negative at 92.2475 with the loss of 1.24% on weekly basis. Technically for this week, we can expect further downside movement in due to formation of bearish candlestick pat-terns on the higher levels coupled with the oversold RSI. For this week, if it breaks the level of 92.1900, then it can test the level of 91.6025 during the week. One can make sell position in it by maintaining a SL 92.6025

EURINR
Last week EURINR May Futures started the week on negative note and made a low of 81.3900. However it witnessed positive movement on Wednesday but overall closed in negative at 81.0150 with the loss of 0.96% on weekly basis. Technically for this week, we can expect further downside movement in due to trend line resistance on higher levels & formation of bearish candlestick patterns on the higher levels. For this week, if it breaks the level of 80.9300, then it can test the level of 80.3325 during the week. One can make sell position in it by maintaining a SL 81.3325

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