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Weekly Commodity: CRB, the major indices of commodities traded in a range last week

SMC | 28 Aug, 2017  | Follow Author | Add to my Favourites 
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Weekly Commentary            


CRB, the major indices of commodities traded in a range last week. Base metals continued their bull run on strong fundamentals. A group that includes everything from copper to zinc to aluminum, have shot higher in 2017. The PowerShares DB Base Metals Fund (DBB), which holds an equal-weighted basket of all three metals, has jumped 20.8% year-to-date. Meanwhile, nickel outshone other metals last week. The global deficit of refined nickel narrowed in June from May as stainless steel plants in China ramped up production, as per the latest data from the International Nickel Study Group (INSG). Refined production of the metal in June was 170,200 tonnes, almost matching consumption of 170,600 tonnes, leaving a deficit of 400 tonnes, according to INSG. On MCX, it surpassed the level of 750. In the energy counter, crude recovered its weekly losses whereas natural gas closed up. As per the EIA data, crude oil inventory declined by 8.9 million barrels last to last week. On the flip side, spread between WTI and Brent has also increased in past few weeks. Spread between the two has increased due to good demand and continued cut in production from OPEC countries. Gold prices inched up as the dollar slipped after remarks by U.S. President Donald Trump raised fears of a government shutdown, while investors awaited further direction from a key annual central banking conference this week.

In agri commodity segment, chana witnessed super rally. Upside in vegetables prices and government step of import restriction on arhar and tur helped pulses to trade up, which is ultimately giving relief to the farmers. Traders, farmers and companies feel this is a positive trend ahead of the harvest of urad and moong pulses in Madhya Pradesh and Maharashtra, as prices have been ruling below the minimum support price fixed by the government. It was a strong week for oil seeds and edible oil, which saw strong buying in futures as well as in spot market. Mustard seed prices were up in futures trade as traders raised their bets in tune with rising demand in spot markets. The rise in guar counter in futures trade was mostly supported by a firm trend at the spot markets, sparked by robust spot and overseas demand amid halt in arrivals from producing belts. Mentha oil prices fell in futures trade as speculators trimmed their positions, taking negative cues from spot market on easing demand from industries.

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About SMC
SMC Research, founded in 1990, is India’s leading share and stock broker, provides a wide range of financial services and investment solutions. A blend of extensive experience, diverse talent and client focus has made us the 4th largest broking house in India(Source: Dun and Bradstreet, 2008). Over the years, SMC has expanded its operations domestically as well as internationally. Existing network includes regional offices at Mumbai, Kolkata, Chennai, Cochin, Ahmedabad, Jaipur, Hyderabad, Bangalore plus a growing network of 2100+ offices spread across 425 cities/towns in India.

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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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