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Weekly Commodity: It was another round of selling in energy and bullion counter

SMC | 11 Jul, 2017  | Follow Author | Add to my Favourites 
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Weekly Commentary            

 

It was another round of selling in energy and bullion counter, which brought fresh 52-week low for the CRB Commodity Index. The CRB Index touched a low below 168 last to last week not that far above the January 2016 lows at 154.85. Recovery in dollar index amid uncertainties in economic performance of major countries and geopolitical tensions refrained investors to trade aggressively in commodities. Gold prices slipped below 28000 per ten gram, amid a weak trend overseas and slump in demand from local jewelers. Muted demand from industrial units and coin makers at the domestic spot market, coupled with a weak trend overseas, kept the silver prices depressed too. It saw a wild swing in the prices. In base metals, only zinc and aluminum saw some upside, rest of the base metals prices slashed down. Nickel received a heavy blow and prices plummeted following comment by an Indonesia mining ministry official that two more companies have been issued recommendations to export mineral ores. Earlier in May'17, government had allowed Indonesian largest nickel producer PT Aneka Tambang to ship 2.7 million tonnes of nickel ore and 850,000 tonnes of bauxite. Both crude and natural gas prices suffered another round of selling despite lower export from OPEC. OPEC's total crude and condensate exports stood at 25.187 million bpd last month, down from 25.424 million bpd in May, and down from 25.493 million bpd in October 2016.


GST created some confusion in the spot agri market, but those are solving gradually. In agri counter, some bullish momentum was witnessed in oilseeds and edible oil counter owing to firm international market. Strong demand continues from processors due to improved sales of soy oil and soymeal. Guar counter, which is monsoon sensitive reacted on above average monsoon and closed the counter on negative note. Even cotton counter saw some firm move. Cotton superior quality surged as sellers showed reluctance to offload at lower prices. Spices counter gave opportunities to both buyers and sellers. Turmeric and cardamom prices augmented whereas jeera and dhaniya shed some of their previous gain. Wheat prices extended gains in the major markets of Rajasthan on improved demand from local mills. There is no significant improvement in demand for wheat from south Indian markets.


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