Commodity insight 04.05.12(NG,Sybean)


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Commodity insight 04.05.12(NG,Sybean)

  1. 1. Commodity Insight 4th May, 2012 Turnover of 03.05.12 Commodity Rate Rate Up / Down 04.05.12 03.05.12 Exchange Turnover (Cr.) Gold 1629.60 $ 1634.80 $ - 5.20 $ MCX 47868 Silver 29.82 $ 30.00 $ - 0.18 $ NCDEX 8510 Crude 101.15 $ 102.65 $ - 1.50 $ USDINR 53.84 53.71 - 0.13 Natural Gas Fundamentally, Natural gas prices have rallied almost 14% in the past two weeks, since falling to a ten-year low of USD1.902 on April 19. Sentiment on the heating fuel has improved in recent sessions after prices hit a string of 10-year lows amid speculation that lower prices would lead to production cuts. Last week’s storage data from the U.S. Energy Information Administration showed that natural gas storage rose by 47 billion cubic feet to 2.548 trillion. However, the report showed that the previous week’s inventory level was revised down by 11%, supporting prices. But storage levels are still 52% above last year’s level and almost 56% higher than the five-year average for this time of year, fuelling concerns that U.S. gas supplies will reach total storage capacity by October. Technically, Natural gas prices have broken the major resistance of 120 levels. As the prices have broken major resistance so natural gas can remain bullish and can touch levels of 140 in few weeks. We expect prices to move up from these levels, so any dip in prices till 115 or 120 should be used as buying opportunity for the target of 140 Rs. In Long term, i.e. for next two to three month we expect prices to break levels of 140 Rs. If Natural Gas is able to break 140 then further bullishness in prices can be seen till 160 or 170 levels. We are bullish in Natural gas till the time prices does not break and give close below 90 levels. So for long term dips in prices should be used as buying opportunity. Soybean Fundamentally, On back of rising soymeal demand from Iran and Japan coupled with lower arrivals of soybean in the domestic markets in India, the price of soybean has advance more than 17 percent in last month. The soymeal purchase of Iran and Japan from India is likely to touch 275,000 tons and 2.1 million tons respectively. While, the arrivals of soybean in the domestic mandis in India has been lower for the past three weeks. Global soybean prices are likely to sustain at higher levels as China plans to buy more soybeans in the midst of lower production prospects in Latin American nations Like Argentina and Brazil. Argentina’s Agricultural Ministry has cut its soybean production to 42.9 million tons for 2011-12. Production of soybean is affected due to the drought like conditions in the major growing areas of Argentina. China is expected to import at least 2.3 million tons of soybean during June-August 2012. Soyabean production is also set to rise this year in India. Soyabean is grown over 101 lakh hectares but this year it is expected that another 5-7 lakh hectares will be added to this crop. As price of soyabean is rising from last four month this has prompted farmers of Maharashtra, Tamil Nadu, and Karnataka to shift from cotton to soyabean. Moreover, soyabean does not require too much water and, therefore, easier to grow.• Equities • Commodities • Wealth • Mutual Funds • Insurance 1
  2. 2. Commodity Insight 4th May, 2012 Technically, Soybean has given good upside move in past three months, we have seen prices moving up from 2260 to 3730 Rs i.e. a upside move of more than 65%. As the upside move was sharp so there can be some correction in prices till 3500 or 3400 levels. Overall soybean will find support at lower levels, so any correction or fall in prices should be used as buying opportunity. For long term, any dip in prices till 3400 levels should be used as buying opportunity for the target of 3800 and 4000 levels. We maintain our bullish view in Soybean for next one to two months. Natural Gas Chart NATURAL GAS MMBTU - 1 MONTH (121.000, 128.300, 121.000, 127.300, +6.00000) 210 200 190 180 170 160 150 140 130 120 110 100 Relative Strength Index (69.5834) 70 60 50 40 30 20 Volume (146,706,256) 17000 16000 15000 14000 13000 12000 11000 10000 9000 8000 7000 6000 5000 4000 3000 2000 1000 x10000 11 18 25 1 8 16 22 29 5 12 19 26 3 10 17 24 31 7 14 21 28 5 12 19 26 2 9 16 23 30 6 13 20 27 5 12 19 26 2 9 16 23 30 7 14 August September October November December 2012 February March April May• Equities • Commodities • Wealth • Mutual Funds • Insurance 2
  3. 3. Commodity Insight 4th May, 2012 Daily Trading Range N.G today’s trading levels are 119 - 130…. Intraday Support @ 119 – 123 and Resistance @ 128 - 130 Intraday Trend Up, Buy on dips…. N.G Buy @ 123 SL 119 TGT 130…. Open Calls Type Stop Closing Date of Commodity Initiated Price Target Comments Loss Price Call 03.05.12 Sell Copper 444.50-446 449 439-427 444.35 1st TGT Achieved, 02.05.12 Sell Lead Mini 114.4 115.1 113.50-111 112.50 Hold with SL @ 114.4 Spread Calls Date Type Commodity Initiated Stop Target Comments of Call Price Loss Spread Spread 03.05.12 Buy Aluminium 111.25 7000 7000-12000 Sell Lead 113.05 Report by: - Sumeet Bagadia (Head - Commodities & Currencies Research) Kunal Kame (Research Associate) Siddhesh Ghare (Research Associate)• Equities • Commodities • Wealth • Mutual Funds • Insurance 3
  4. 4. Commodity Insight 4th May, 2012 For private circulation only Website: Disclaimer In the preparation of the material contained in this document, Destimoney* has used information that is publicly available, as also data developed in-house. Some of the material used in the document may have been obtained from members/persons other than Destimoney and which may have been made available to Destimoney. Information gathered & material used in this document is believed to be from reliable sources. Destimoney has not independently verified all the information and opinions given in this material. Accordingly, no representation or warranty, express or implied, is made as to the accuracy, authenticity, completeness or fairness of the information and opinions contained in this material. For data reference to any third party in this material no such party will assume any liability for the same. Destimoney does not in any way through this material solicit or offer for purchase or sale of any financial services, commodities, products dealt in this material. Destimoney and any of its officers, directors, personnel and employees, shall not be liable for any loss or damage of any nature, including but not limited to direct, indirect, punitive, special, exemplary, consequential, as also any loss of profit in any way arising from the use of this material in any manner. The recipient alone shall be fully responsible, and/or liable for any decision taken on the basis of this material. All recipients of this material before dealing and/or transacting in any of the products advised, opined or referred to in this material shall make their own investigation, seek appropriate professional advice and make their own independent decision. This information is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject Destimoney or its affiliates to any registration requirement within such jurisdiction or country. This information does not constitute an offer to sell or a solicitation of an offer to buy any financial products to any person in any jurisdiction where it is unlawful to make such an offer or solicitation. No part of this material may be duplicated in whole or in part in any form and / or redistributed without the prior written consent of Destimoney. This material is strictly confidential to the recipient and should not be reproduced or disseminated to anyone else. Names such as Teji Mandi, Maal Lav, Maal Le or similar others for market calls and products are merely names coined internally and are not universally defined, and shall not be construed to be indicative of past or potential performance. Recipients of research reports shall always independently verify reliability and suitability of the reports and opinions before investing. *"Destimoney" means any company using the name “Destimoney” as part of its name.• Equities • Commodities • Wealth • Mutual Funds • Insurance 4