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Weekly Commodity: CRB index saw five months continuous decline

SMC | 17 Jul, 2017  | Follow Author | Add to my Favourites 
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Weekly Commentary            


CRB index saw five months continuous decline and July is already trading in negative zone and this is a concern for the market. However, in the last week market saw some recovery owing to some upside in bullion, energy pack and some industrial commodities, but recovery was marginal. Downside in dollar index also supported upside. Oil climbed as a lower 2018 forecast on U.S. crude production and speculation of possible output curbs in Libya and Nigeria fueled buying. The U.S. Energy Information Administration lowered its WTI and Brent oil-price forecasts for this year and next and cut its 2018 U.S. production forecast by 1% to 9.90 million barrels a day. Natural gas prices too strengthened. Limited buying was witnessed in bullion counter. Gold prices rose after U.S. Federal Reserve Chair Janet Yellen said the central bank would only gradually tighten monetary policy, curbing speculation that interest rates would rise more than once this year. Appreciation in local currency capped the upside of this counter. In base metals, copper and nickel prices strengthened, zinc was sideways whereas aluminum and lead shed some of their previous gain. Copper futures rose, buoyed by a weaker U.S. dollar. China's imports of copper and copper products for June were unchanged with May at 390,000 tonnes. Zinc prices climbed to their highest in more than three months on Wednesday as the market worried about falling stocks in exchange warehouses, shortages and expectations of stronger demand from China, but, couldn't sustain at the higher levels.

It was a bearish week for oil seeds and edible oil counter. The agriculture department in Rajasthan has estimated mustard output in 2016-17 (Jul-Jun) to rise by 21% on year to 3.94 mln tn because of higher yields. Rajasthan is one of the major producers of mustard seed in the country. In spices, jeera saw magical upside on strong export numbers. It was just few points shy away from 20000 marks. Profit booking by participants at existing level, fall in demand against adequate stocks position, mainly led to decline in cardamom prices at futures trade. Amid pick up in demand at domestic spot market and restricted supplies from producing regions, mentha oil prices traded up. Sugar prices saw no respite and it fell further on bearish news. The Indian Sugar Mills Association has pegged the country's sugar output in 2017-18 (Oct- Sep) at 25.1 mln tn, up 23.6% from 20.3 mln tn produced in the previous year.

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Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor accept any liability whatsoever arising from the use of any of the above contents.

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