Commodity prices surged to the highest level in almost two years after the U.S. government cut its crop-supply forecasts and the dollar slumped on speculation the Federal Reserve will buy more debt to revive the economy. The Reuters/Jefferies CRB Index of 19 raw materials jumped as much as 2.7 percent to 295.17, the highest level since Oct. 15, 2008. Every price advanced. Wheat, soybeans and corn led the gains, each jumping the most allowed by the Chicago Board of Trade. Copper climbed to a 27-month high, and crude oil topped $83 a barrel.
Dow crosses the 11,000 mark
The Dow closed above the 11,000 mark for the first time in five months on Friday as a surprisingly weak jobs report strengthened the case for more stimulus from the Federal Reserve.
While a loss of 95,000 jobs normally might be expected to hurt stocks, the market's desire for cheap money trumped concerns about the slow economy.
Agriculture-related shares surged in sync with U.S. corn and soybean futures after the U.S. Department of Agriculture said the corn crop is likely to be far smaller than expected. Caterpillar (CAT.N) rose 2.1 percent to $80.37 and gave the biggest boost to the Dow industrials.
Dollar slumps to 15-year low
The dollar slumped to a 15-year low against the yen on Friday after data showed an unexpected drop in U.S. payrolls in September, bolstering expectations of further easing by the Federal Reserve to revive a sputtering economy
ETF gold assets surpass $1 bn mark
ETF Securities USA LLC ( ETFS ) announced that the total assets under management of its ETFS Physical Swiss Gold Shares ( SGOL ) passed the $1 billion mark as of Sept 29th, 2010. In the opinion of ETF Securities, recent flows into SGOL have largely been driven by investor's desire to hold gold in Switzerland and to position portfolio's for possible inflationary pressures resulting from currency debasement.
India's wealth triples in a decade to $3.5 trillion
Total wealth in India has tripled over the past decade to $3.5 trillion and could further increase to $6.4 trillion by 2015, says a report on global wealth by investment bank Credit Suisse.Relative to the rest of the world, the distribution of wealth in India is heavily biased towards the lower end of the wealth pyramid, with the proportion of adults having wealth below $1,000 roughly double the global average, says the report.At the other end of the scale, a very small proportion of the adult population (0.4%) owns more than $100,000 on average.
Gold
Gold prices continued to be bullish and hit a high of $1364 but fell back in what seemed to be a correction. Gold prices rose 2% this week and towards weekend weak US employment report spurred buying interest. Federal Reserve may start buying government debt again to stimulate the economy. Silver prices outperformed gold by gaining 5%. Spot gold prices were hovering at $1,344 after attaining a high of $1,349.70. Gold prices had hit a low of $1,324 after St. Louis Fed chief James Bullard said policy makers face a tough decision at next month's meeting. U.S. gold futures for December delivery settled up $10.30 an ounce at $1,345.30. Final volume was about 195,000 lots, 50 percent above its 30-day average, a Reuters report said. COMEX gold open interest eased but held near a record high 621,941 lots as of Wednesday.
The dollar fell 7.5 percent last month versus the euro, its biggest monthly decline since December of 2008. Gold rallied 10% since endof August on safe haven demand as it is seen as a hedge against inflation and dollar depreciation.The world's largest gold-backed exchange-traded fund, New York's SPDR Gold Trust, reported a 13.4 tonne
MCX Gold December contract managed to make gains despite initial weakness to end at Rs 19465, a gain of Rs 252. Support 19380 in upward trend.Silver prices rose to record levels at MCX with December contract surging to 34,497 a gain of Rs 1379. Trend bullish.
Crude Oil
Crude Oil prices continued to gain this week on likely monetary easing and prospects of weakening of dollar. The oil futures complex got further support as a strike at France's top oil port, now in its 12th day threatened to cut European oil products output. Also, a surprisingly sharp cut in the U.S. government's corn crop forecast sent cash ethanol prices sharply higher. At Nymex crude oil traded between $80.30 and $83.13 rising 1.32 percent this week.
ICE Brent November crude rose 60 cents, or 0.72 percent, to settle at $84.03 a barrel. Brent was up 28 cents for the week, a seventh straight weekly rise.
The dollar's weakness this week helped oil prices rally, reaching $84.43 intraday on Thursday, a five-month high, before the dollar bounced and crude ended the day lower as investors booked profits ahead of Friday's payrolls report.A weak dollar boosts dollar-denominated oil by making it cheaper for buyers holding other currencies, lowering the value of greenbacks paid to producers and attracting investment looking to shift from cash to commodities.
Four oil refineries in southern France face closure this weekend, the country's oil lobby said on Friday, after workers at a key oil port voted to continue a strike for a 12th day. Enbridge Inc. (ENB.TO) said it shut its 670,000 barrel-per-day Line 6A pipeline bringing crude from Canada to the United States after discovering a problem during maintenance early Friday.The pipeline snag comes three weeks after Line 6A was restarted after being shut for more than a week after a leak. MCX October crude gains marginally at Rs 3661. Support 3615
Base Metals
Copper continued to be bullish and rose above $3.80 per lb on Friday, the highest in more than two years, after an unexpected drop in U.S. monthly payrolls data raised expectations that more quantitative easing could be on the way sooner, rather than later. Copper for December delivery on the COMEX metals division of the New York Mercantile Exchange shot up 12.20 cents, or 3.3 percent, to $3.8015 per lb, a new peak for the third position futures contract since early July 2008.
This week, copper advanced 2.3 percent, the fourth straight gain. The price has climbed 13 percent this year. Copper looks susceptible to immediate profit booking and may fall upto 20% before rising again.
The metal has gained 31 percent since July 1 as the dollar slumped and inventories dropped.Copper may run into deficit on gains in US and European deamnd.oducer Antofagasta Plc. Demand will exceed supply by 300,000 metric tons in 2010 and 400,000 to 450,000 tons in 2011, Awad said today in an interview in Santiago.
Copper for delivery in three months rose $210, or 2.6 percent, to $8,310 a ton ($3.77 a pound) on the London Metal Exchange by weekend. Aluminum, lead, nickel, tin and zinc also rose. MCX Copper November up at Rs 368.60 in upward trend tracking global cues at LME and Nymex.
Pepper
Pepper prices weakened on weak spot markets and subdued exprt demand on higher Indian parity prices.At National Commodities and Derivatives Exchange of India, October futures fell from Rs 18634 to Rs 18,356 levels while November contract fell from Rs 18783 to Rs 18,549. Hopes of good production due to favourable monsoon rains also added to the fall, they said. However, lower stocks in major producing countries are supportive of the spice which in turn led to prices moving beyond 19,000 levels on Tuesday. In the Kochi market, a trading hub in Kerala, pepper dropped 53 rupees to 18,880 rupees per 100 kg on Friday. Harvesting is in progress in Brazil and Indonesia due to which these countries are quoting lower.India's pepper exports in April-August 2010 fell 5 percent to 7,600 tonnes from a year ago. Pepper futures look weak for the near to short term and October contract may hit 18300 levels while November contract has support at 18400 levels. Trend Bearish. (Get a better insight into Indian spices market)
Chana
Higher chana acreage and weak spot market demand has weakened the Chana futures with traders expected furhter fall in prices.According to the fourth advance estimates, production of chana in 2009/10 is likely to be 7.35 million tonnes as against 7.06 million tonnes last year, official data showed.In the Delhi spot market, chana was down 25 rupees to 2,300 rupees per 100 kg on Friday. Rabi sowing which begins in October is expected to rise as farmers turn to chana against competing crops on hopes of better price realisation. Festival demand during September to November is normally supportive of pulses complex.
Production of kharif pulses in 2010-11 is expected to be 6 million tonnes against 4.30 million tonnes the previous year, according to the first advance estimate for summer-sown pulses. NCDEX October contract weakened to Rs 2, 256 from Rs 2,307 while November contract fell from RS 2, 351 to Rs 2303. The trend is bearish and October contract looks set to hit 2200 levels soon. November contract has support at Rs 2250 levels. ( For a better insight into Indian pulses market)
Soybean
Indian oilseeds and edible oil market mirrored global trends rising 4.3% in the first four days of the week. U.S. soybean futures jumped 1.3 percent to a one-week top on Friday as buying by Chinese traders after a week-long holiday buoyed the market amid expectations of lower output in Brazil and Argentina.
The soybean market was also being supported by expectations of lower production in South America. Brazil's 2010/2011 soybean crop is expected to come in slightly smaller than the record harvest last season, despite an expansion of the planted area, an average of eight outlooks indicated.Argentina's 2010/11 soybean area is seen at 18.7 million hectares, down 1.3 percent from last season, the Buenos Aires Grains Exchange said, in its first forecast for new crop plantings. Soaring demand for vegetable oils used in food and biofuel will send U.S. soybean oil prices to highs not seen since 2008 despite rising supplies of soyoil and competing palm oil.
Farmers in Maharashtra and Madhya Pradesh, top two soybean producing states in the country, have hastened harvesting as weather has been dry in these areas, traders said. India is likely to produce 17.27 million tonnes of oilseeds in 2010/11 from summer-sown crops, higher than 15.66 million tonnes a year ago, the farm ministry had said last month. At NCDEX, Soybean November contract rose from Rs 1979 to Rs 2065.50 while November soyoil rose from Rs 484 to Rs 499 and RM seed rose from Rs 541 to Rs 545.30 on a weekly basis.
Soymeal exports have given firm support to oilseeds complex.However, rising exports of soybean by-product as feed meal limited the downside, they added.India's oilmeal exports in September rose 53 percent from a year ago, its third straight monthly rise, owing to higher demand from traditional buyers in Japan and China. India's soymeal exports are expected to rise 43 percent to 4 million tonnes in the new season that begins in October. NCDEX November soybean has support at Rs 2050 levels while Nov soyoil has support at Rs 530 levels on rising festival demand and overseas market cues. (For a better insight into Indian OIlseeds market)
Rubber
Rubber prices continued to rule steady and firm on extreme weather conditions causing short supplies in the market and tracking TOCOM's rally as global supplies are tight.Indian tyre makers will import over 30,000 tonnes natural rubber in Oct-Dec and are also looking for similar quantities for Jan-March delivery, as rising demand outweighs higher international prices, industry players said.In August, Indian rubber makers were charging a premium of as much as 35 rupees ($0.79) per kilogramme (kg) over the Bangkok market, prompting Indian tyre companies to buy rubber from overseas markets.
That would put total imports for this fiscal year close to the 170,679 tonnes of 2009/10, when India's needs nearly doubled as domestic production was hit by a severe drought.
The world's fourth-biggest natural rubber producer currently charges 20 percent duty on the imports. India's imports between April-September stood at 107,190 tonnes, down 12 percent compared to 122,095 tonnes a year ago. Indian rubber prices are higher by Rs 5-8 per kg when compared to Bangkok spot rates.
India's natural rubber production in 2010/11 is likely to fall short of the estimated 893,000 tonnes due to adverse weather conditions, Sajen Peter, Chairman of the Rubber Board. The Rubber Board estimates consumption in the country will rise by 5 percent to 978,000 tonnes in 2010/11.
At NMCE October rubber futures improved to Rs 176.73 from Rs 174.7 while November contract was steady at Rs 177 levels while spot rates for RSS 4 grade was at Rs 174.50 in the weekend compared to Rs 171 on Monday. Bullish sentiments to rule rubber on the back of ANRPC forecast for global market and rising demand from Indian tyre industry. (Courtesy: Commodity Online Info Service)
