Soybean rallies,smart gains for chana

Most agri-commodities witnessd a rally in global futures markets with corn posting a 29-month high while soybean saw the biggest weekly gain in six weaks on speculation about drop in inventories in USA. 
Production of corn in the U.S. dropped 4.9 percent last year and will leave stockpiles before the 2011 harvest at the lowest in 15 years, the Department of Agriculture said Jan. 12. The agency also cut its estimate of the soybean crop by 1.4 percent and said domestic inventories will fall to 4.2 percent of consumption. 
Soybean output in Argentina, the largest producer after the U.S. and Brazil, is forecast to fall 15 percent to 47 million metric tons this year because of water shortages in the main growing regions, the Buenos Aires Cereals Exchange said. Corn production may fall to 20.4 million tons from 22.5 million last year, the exchange said. Tracking the global trends, India’s soybean prices rallied on National Commodity and Derivatives Exchange while a rally in pulses complex pushed chana futres prices higher last week supported by marriage season demand ahead from February to May. 
COMMODITY ANALYSIS
Pepper 
India's pepper futures were down at the end of the week weighed by weakening demand from overseas for Indian pepper due to higher prices, but lower availability of the spice with major producing countries restricted the fall. 
The market remained sluggish for want of sufficient buying support. Sellers were also limited. And because of high volatility the small and medium players moved away from the market. They were liquidating. Arrivals of new pepper have not picked up as anticipated and at the usual levels at this time of the season, they said. 
Arrivals from the fresh crop are expected to hit the market by mid-January or last week of January. India's pepper exports in April-November 2010 fell 17 percent to 11,500 tonnes. Traders and analysts however, do not expect any sharp fall in prices as lower stocks seen supporting prices at lower levels. 
On Friday in Kochi, a key market for the commodity in Kerala, pepper fell 138 rupees to end at 22,206 rupees per 100 kg. 
NCDEX Pepper January contract opened this week at Rs.22800 and closed lower by 1.04% to Rs.22561per quintal, whereas the February contract traded in the range of Rs.23100-Rs.22823, a decline of 0.471%. 
Chana 
India chana gained this week tracking increase in prices of its substitutes tur and urad. Stockists are buying ahead of marriage season beginning from February to May, according to market reports. Towards weekend profit booking led to fall in prices but regained on Saturday. Lower arrivals and firm domestic demand provided firm support for chana. 
According to the Ministry report, total Chana production in 2010 stood at 73.6 lakh tonnes against 70.6 lakh tonnes in 2009. With respect to production, MP is the largest Chana producing state in India contributing around 40%, followed by UP and Rajasthan contributing 16% and 14% respectively. 
For 2011, Government has set production target of 75.8 lakh tonnes. Chana acreage as on 24th December 2010 stood at around 87.79 lakh hectares against 81.89 lakh hectares in the same period last year. NCDEX January delivery contract gained by 0.471 per cent from Rs.2559 to Rs.2606 where as the February contract rose by 2.8% per cent to Rs.2639 per quintal. On Friday, in Delhi chana was up 22.25 rupees at 2,534.20 rupees per 100 kg. 
Rubber 
India rubber futures declined this week on selling pressure and production estimates. According to observers, the market was following the gains in the trendsetting international markets which ruled around Rs 25 above the domestic market in the coming weeks. 
Certain tyre manufacturers were active in the market. But the gap between the demand and supply was still wide since there were no quantity sellers even at these extraordinary levels. 
At NMCE, January contract gained 1.72% at Rs 21777 whereas February contract rose 2.35% to 22595. Spot rates of rubber on Friday were (Rs/kg): RSS-4: 221; RSS-5: 209; ungraded: 205; ISNR 20: 217. 
In global markets, Rubber has gained as much as 9.7 percent this year, beating the returns of members in the S&P GSCI Commodity Index. The cash price in Thailand has also risen to a record, reaching 166.3 baht ($5.46) per kilogram on Friday 
Natural rubber will be in deficit in 2011 for a second year, according to an analyst at HSBC Trinkaus & Burkhardt. Global demand of 10.7 million tons may outpace supply by 513,000 tons this year after a shortage of 417,000 tons in 2010, according to an HSBC report. 
Soybean
Indian soybean rose this week due to good export demand for soymeal. Whereas soyoil fell marginally despite a drop in the country's edible oil imports in December. 
NCDEX January soybean prices rose to Rs.2378, up by 2,14% per cent while Feb Soybean prices gained from Rs 2405 to Rs.2493, higher by 3.65% per cent. Jan soyoil prices fell 0.27% % to 632.65. Soyoil Feb contract fell 0.20% to 644.65. 
On Friday, in the Indore spot market in Madhya Pradesh on Friday, soyoil edged down by 0.2 rupee to 630.9 rupees, while soybean edged higher by 3 rupees to 2,349 rupees per 100 kg. 
In global markets soybean fell after China took steps to cap inflation, signaling less demand for crops from the U.S. On Friday, Soybean futures for March delivery dropped 2.5 cents, or 0.2 percent, to $14.135 a bushel. 
The USDA, in its monthly report, reduced its estimate for last fall's U.S. corn and soybean harvests, trimmed its corn and soy output forecast for drought-hit Argentina, and cut its wheat production view for flood-hit Australia. 
India's annual vegetable oil imports in December fell 4.4 percent on high global prices, a trade body said on Friday, but monthly imports rose as buyers stepped up purchases ahead of Indonesia's export tax hike.

Major Indices	Closing Data for Friday, 14th January 2011	Percentage Change
Dow Jones	11787.38	1.27
MCX COMDEX	3314.93	1.19
BSE Sensex	18,860.44	-4.52
NSE	5,654.55	-1.78
Continuous Commodity Index (CCI)	629.71	1.49
Reuters Jeffrey/CRB Index	333.06	1.86

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Precious Metals 
Precious metals fell at the end of the week on speculation that European Union leaders will stabilize the region’s economy, eroding the appeal of the metal as a haven. China's central bank raised lenders' required reserves for the fourth time in just over two months, vowing the fight against inflation would be a top priority also added the fall. This week, gold dropped 0.6 percent, on COMEX in New York. 
On Friday Gold futures for February delivery fell $26.50, or 1.9 percent, to settle at $1,360.50 an ounce on the Comex in New York. 
Gold is likely to reach $1,500 per ounce in the first quarter, and then may retreat if the market expects central banks to exit quantitative easing, according to an economist at Credit Suisse Group AG. In the long-term, as inflation will enter a new era, gold may rise above $2,000 in the next 5 to 10 years, he said. 
MCX February Gold Futures opened in the week at 20,412 and started gaining, reached at a high of Rs.20514 on Thursday while closing at Rs 20,261 in the weekend, lower by 1.23%. MCX Silver March tumbled by 1.25% to Rs 43842. 
Among other precious metals, Silver futures for March delivery dropped 94.3 cents, or 3.2 percent, to $28.32 an ounce. The metal dropped 1.2 percent this week after tumbling 7.3 percent last week. 
Palladium futures for March delivery declined $22.95, or 2.8 percent, to $790.50 an ounce on the New York Mercantile Exchange. This week, palladium gained 4.6 percent. Platinum futures for April delivery slipped $5.20, or 0.3 percent, to $1,816 an ounce.This week platinum rallied 4.5 percent. 
Crude Oil 
Crude oil gained this week as U.S. industrial production rose more than forecast in December in a sign that fuel demand will strengthen. 
On Friday, Crude for February delivery settled at $91.54 a barrel on the New York Mercantile Exchange. Futures have climbed 4 percent in this week. Brent crude for February settlement rose 0.6 percent, to expire at $98.68 a barrel on the London-based ICE Futures Europe exchange. 
Crude Oil in New York may decline next week on speculation U.S. refineries will boost supply after an end-of-year clearing of stockpiles, reports said. Oil prices may surge to $117 a barrel by the end of the year if the commodity can break through resistance at $98 a barrel, according to a technical analyst with New York brokerage. 
At MCX, Crude oil January contract rose from Rs.4060 to Rs.4163 higher by 21.53 per cent whereas the February contract gained by 2.13 per cent to Rs.4220. 
OPEC raised its forecast for 2011 crude production from outside the group on increases from Russia and China. Non-OPEC supply will climb by 410,000 barrels to 52.62 million barrels a day next year, OPEC said in its monthly. 
Base Metals 
Copper in global markets gained this week as expanding industrial output in the U.S. boosted prospects for metal demand. 
On Friday, Copper futures for March delivery rose 2.65 cents, or 0.6 percent, to $4.4035 a pound on the Comex in New York. A close at that price would leave a 2.8 percent gain for the week. 
On the London Metal Exchange, copper for delivery in three months climbed 0.2 percent to $9,632 a metric ton ($4.37 a pound). 
The world refined copper market is expected to have a 500,000-metric-ton to 600,000-ton deficit in 2011, even with a significantly weaker demand scenario, according to JPMorgan Securities Ltd. 
At MCX, Copper February contract gained this week from Rs 432.50 to Rs 446.40 levels, an increase of 3.21 per cent on global cues. Other metals such as Lead and nickel prices also gained on the LME, while aluminum and zinc declined. Tin was unchanged.

(Source: http://www.commodityonline.com/news/Commodity-TrendsSoybean-ralliessmart-gains-for-chana-35682-2-1.html)