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Weekly Commodity: Commodities counter witnessed wild swings both sides

SMC | 12 Jun, 2017  | Follow Author | Add to my Favourites 
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Weekly Commentary           


Commodities counter witnessed wild swings in the both sides and finally closed on weaker note as the week was full of event risks. CRB closed below 180 levels. Gold rose to its highest in seven weeks as weak economic data in the United States reduced expectations of rapid US interest rate rises this year, pushing the dollar to a seven month-low and lowering US bond yields. It traded near $1300 in comex but on later part of the week both gold and silver shed their weekly gain on profit booking at higher levels ahead of UK Elections. In India, upside was bit limited on appreciation in rupee. In MCX, it touched 29600. Day by day, crude is losing its strength on higher production and inventories issues in US amid mediocre demand. Oil prices slid nearly 5% on last Wednesday after the U.S. government reported an unexpected increase in crude inventories, fanning fears that output cuts by major world oil producers have not drained a global glut very much. The U.S. AS per EIA, U.S. crude oil production could hit a record 10 million bpd next year, up from 9.3 million bpd now, putting it nearly on a par with top exporter Saudi Arabia. Natural gas prices saw some support by the news that Saudi Arabia and key allies cut ties today with Qatar, the world's top seller of liquified natural gas. The move has fueled concerns over supply disruptions not just impacting neighboring countries, but the global gas market as well. In base metal counter, copper prices rallied after severe weather hit some mines in South America and labor issues recurred in Indonesia. The weather had reduced output at BHP Billiton's Escondida mine, Codelco's Chuquicamata operation, and Antofagasta's Zaldivar project among others. Better than expected Chinese's export import data also support the prices. Rest of the metals closed weak. It was overall another bearish week for agri commodities, but Spices counter gave ample of buying opportunities and most of them saw sharp upside move. Wheat prices saw a pause in the fall in the prices. Wheat futures on CBOT rose on forecasts for scorching heat in the northern U.S. Plains. Rise in MSP also supported the price in India. Guar counter saw further fall on monsoon issue. Meanwhile, Guargum export was better in recent months, but didn't reflect on prices due to ample stock and forecast of normal monsoon.


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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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