Thursday, June 01, 2017 Overview Asian markets mixed after US markets fall Chinese Caixin Manufacturing PMI at 11 month low Offshore yuan jumps to seven month high Dollar falls, euro up and pound lower ahead of UK elections Precious Metals Precious metals are rebounding as US markets came under selling pressure and the dollar fell to six month lows. Political uncertainties also continue to underpin gold prices. The UK is due for a vote next week and speculation about an early election in Italy has gained ground. Latest polls suggest that Theresa May's Conservative Party may fall short of winning an overall majority of seats in the UK parliament which has led to a risk off sentiment. On the upside, June rate hike prospects remain near 88% and continue to cap precious metals. US consumer spending recorded its biggest increase in four months in April; rising 0.4% m/m and Personal income grew 0.4% in line with expectations. On the whole, we believe that gold and silver could consolidate in a higher range today and the focus will be on the NFP data due tomorrow for further triggers. Close %Chg. Precious metals Gold 1268.1 0.4% Silver 17.3-0.4% WTI Crude oil 48.6-2.1% Brent Crude 51.3 2.5% Natural gas 3.1 0.5% Base metals LME COMEX Copper 343.5-0.6% Copper 5679.5-0.2% Aluminium 1927.0-0.2% Nickel 8910.0-0.4% Lead 2115.5-0.1% Zinc 2591.0-0.4% Others DXY 96.9-0.4% US 10yr 2.2 0.5% CBOE VIX 10.4 2.8% Please Refer to Disclaimer at the end of the report Page 1
Base Metals Base metals have been trading range bound over the last couple of session except nickel which slid sharply yesterday. Better than expected China manufacturing data pushed supported copper prices. However, a private survey showed China's manufacturing activity unexpectedly contracted in May for the first time in 11 months to 49.6, below the 50-point mark. A continued drop in copper LME warehouse stocks have been supporting prices. Global aluminium producer has offered Japanese buyers a premium of $123 per tonne for July-September primary metal shipments, down 4% from the current quarter. Nickel prices have been dragged down by worries about oversupply and fears of tepid demand from steel mills, along with high LME warehouses stocks. Crude oil prices declined sharply yesterday as increasing output from Libya and Nigeria weighed on prices. Libyan output has touched 0.8 mbpd after technical issue at Sharara field was resolved. This led to total OPEC production increasing by 250,000 bpd in May to 32.22 mbpd. The output of 11 member countries with output targets fell by 1.108 million bpd, implying 95% compliance. Rising US production has already been capping prices at higher levels. US crude oil production is expected to average 9.3 mbpd this year and 10 mbpd next year as per EIA forecasts. US inventory data is due today and will be closely watched for details on gasoline demand and US oil production. The API reported a drawdown of 8.6 million barrels. In terms of price action, we expect oil prices to probably see a bounce back as they have managed to hold above $48 on the Nymex. Natural gas remains weak due to low seasonal demand. Speculative Longs Change WoW Gold 117661 47738 Silver 29686 11388 Copper 50191 12202 Crude oil 193143 31849 Nat gas 234025-11615 EUR/USD 64845 27241 DXY 31324-2951 INVENTORIES Current W/W Chg. Units Crude oil 516.34-4.43 MBbl Gasoline 239.88-0.79 MBbl Distillate 146.34-0.49 MBbl Natural gas 2.44 0.08 TCF Base Metals Aluminium Copper Nickel Lead Zinc Precious metals LME 1473925-13775 MT SHFE w/w 413626-2448 MT LME 311150-4050 MT SHFE w/w 198585 2227 MT LME 378984-1308 MT SHFE w/w 72254-268 MT LME 181250-1925 MT SHFE w/w 82968-654 MT LME 331225-1575 MT SHFE w/w 78272-13477 MT GOLD ETF 1673-36.60 MT Silver ETF 20068-5.25 MT MT- Metric Tonne, MBBL Million Barrels, BCF Billion Cubic Feet. Please Refer to Disclaimer at the end of the report Page 2
Agricultural Commodities Cardamom traded higher as investors extended their bets amid surge in physical demand for cardamom in domestic spot market. Further, insufficient supplies on restricted physical arrivals from major cardamom producing regions also added support to prices' uptrend. Coriander futures traded lower as participants cut down their bets on back of muted demand in domestic spot market. Further, rising arrivals from major producing belts also weighed on coriander futures. Mentha oil exhibited mixed trend as May contract declined on sluggish demand from major consuming industries in domestic spot market, while June contract gained on tight stocks position following restricted arrivals from major producing belts of Chandausi in Uttar Pradesh. Sugar closed flat due to good supplies and steady demand from physical market. Gov. has increase FRP of sugarcane by Rs 25 per quintal to Rs 255 for 2017-18 season beginning Oct. Sugarcane acreage in country was at 46.5 lakh hectares last week, higher than 43.9 lakh ha year ago. Moreover, government extended curbs on holding of sugar stocks by six months for sugar traders. Soyabean is under long liquidation and fell below MSP in key growing regions due to shifting in cropping patterns in coming Kharif season. Farmers are opting for cotton castor or groundnut. The country may export 15 lakh tonnes of soymeal during 2016-17 marketing year that runs from Oct. to Sept. Lower shipments from India will help South American countries like Brazil and Argentina to increase soymeal sales to Asian buyers like Vietnam Thailand Japan and Indonesia. This may prompt farmers to cut soybean cultivation and shift to other crops like cotton in upcoming sowing season. Commodity Month Price %Chg. Cardamom Jun 974.3 3.98% Castor Seed Jun 4228-2.27% Cocud Jun 1790-0.67% Cotton Jun 21000-0.05% CPO Jun 498.3 0.12% Coriander Jun 4730-4.00% Guar Gum Jun 7248-2.03% Guar Seed Jun 3354-2.22% Jeera Jun 17630 0.17% Mentha Oil Jun 938.3-3.99% R M Seed Jun 3483-0.31% Soyabean Jun 2696 0.00% Soyoil Jun 620.1 0.83% Sugar Jul 3750 0.00% Turmeric Jun 5322-0.15% Wheat Jun 1596-0.25% Commodity Expiry Price % Chg. Malaysian Palm Oil Jul 2636 0.50% US Soybean Aug 919 0.08% US Soyoil Aug 31.53 0.19% US Soymeal Jul 298.1 0.00% ICE US Cotton Jul 76.83-0.19% China Cotton Jul 15160-0.62% US Sugar Jun 14.87-1.00% Please Refer to Disclaimer at the end of the report Page 3
Level playing Sheet Commodity Exch. Expiry Close S2 S1 Pivot R1 R2 Trend Conviction Intraday Range Gold MCX Aug 29094 28776 28935 29027 29186 29278 Bullish Moderate 28981-29232 Gold COMEX Jul 1274 1255 1264 1269 1279 1283 Bullish High 1267-1281 Silver MCX Jul 40096 39729 39912 40094 40277 40459 Bearish Moderate 39821-40186 Silver COMEX Jul 17.41 17.16 17.28 17.35 17.48 17.55 Strong Low 17.32-17.51 Crude MCX Jun 3127 3032 3079 3138 3185 3244 Bearish Moderate 3056-3162 Crude NYMEX Jul 48.56 46.86 47.71 48.83 49.68 50.80 Bearish Moderate 47-49 Nat Gas MCX Jun 198.6 193.9 196.3 200.5 202.9 207.1 Bearish Moderate 195-202 Copper MCX Jun 368.8 363.3 366.0 367.8 370.5 372.3 Strong Low 367-371 Zinc MCX Jun 166.0 162.3 164.1 166.7 168.5 171.0 Bearish Moderate 163-168 Lead MCX Jun 133.4 131.5 132.4 133.6 134.6 135.8 Bearish Moderate 132-134 Nickel MCX Jun 569.6 560.2 564.9 572.2 576.9 584.2 Bearish Moderate 563-575 Aluminium MCX Jun 123.3 122.4 122.8 123.6 124.0 124.8 Bearish Moderate 123-124 Commodity Exch. Expiry Close S2 S1 Pivot R1 R2 Trend Conviction Intraday Range CARDAMOM NCDEX Jun 974 929 951 963 986 997 Flat Moderate 957-992 CASTOR SEED NCDEX Jun 4,228 4,123 4,175 4,246 4,298 4,369 Bearish Moderate 4149-4272 COCUDAKL MCX Jun 1,790 1,754 1,772 1,786 1,804 1,818 Bearish Moderate 1763-1795 Cotton NCDEX Jun 20,940 20,580 20,760 20,930 21,110 21,280 Bullish Moderate 20845-21195 CPO NCDEX Jun 513 512 512 512 513 513 Bearish Moderate 512-513 DHANIYA NCDEX Jun 4,730 4,593 4,661 4,799 4,867 5,005 Bearish Moderate 4627-4833 JEERA NCDEX Jun 17,630 17,130 17,380 17,540 17,790 17,950 Bearish Moderate 17460-17870 Guar Seed NCDEX Jun 3,354 3,271 3,312 3,367 3,408 3,463 Bearish Moderate 3292-3388 Guar Gum NCDEX Jun 7,248 7,062 7,155 7,270 7,363 7,478 Bearish Moderate 7109-7317 MENTHA OIL MCX Jun 958 943 951 966 973 989 Bearish Moderate 947-970 R M Seed NCDEX Jun 3,483 3,451 3,467 3,478 3,494 3,505 Bearish Moderate 3459-3486 Soyabean NCDEX Jun 2,696 2,659 2,678 2,691 2,710 2,723 Bearish Moderate 2685-2717 SOYOIL MCX Jun 620 612 616 619 623 625 Bearish Moderate 618-624 SUGAR NCDEX Jul 3,750 3,749 3,749 3,750 3,750 3,751 Bearish Moderate 3750-3751 TURMERIC NCDEX Jun 5,322 5,210 5,266 5,318 5,374 5,426 Bearish Moderate 5238-5346 WHEAT NCDEX Jun 1,596 1,585 1,590 1,596 1,601 1,607 Bearish Moderate 1588-1599 Please Refer to Disclaimer at the end of the report Page 4
Disclaimer: This e-mail /message may contain confidential, proprietary or legally privileged information. It should not be used by anyone who is not the original intended recipient. If you have erroneously received this message, please delete it immediately and notify the sender. The recipient acknowledges that Motilal Oswal Securities Limited [MOSt] and or its affiliate companies, as the case may be, are unable to exercise control or ensure or guarantee the integrity of/over the contents of the information contained in e-mail or its attachment, and further acknowledges that any views expressed in this message are those of the individual sender and no binding nature of the message shall be implied or assumed unless the sender does so expressly with due authority of MOSt and or its affiliate companies, as applicable. Information mentioned in the email or in its attachment is for personal information of the intended recipient and does not construe to be any investment advice, legal or taxation advice to you. The above information does not constitute an offer, invitation or inducement to invest in securities or other investments and MOSt is not soliciting any action based upon it. Information in the email or its attachment is not for public distribution and has been furnished to you solely for your purpose and should not be reproduced or redistributed to any other person in any form. Unauthorized disclosure, use, dissemination or copying (either whole or partial) of this information, is prohibited. The person accessing this information specifically agrees to exempt MOSt or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOSt or any of its affiliates or employees responsible for any such misuse and further agrees to hold MOSt or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this information due to any errors and delays. The information contained herein is based on publicly available data or other sources believed to be reliable. All efforts will be made to update the information herein on reasonable basis, MOSt and/or its affiliates/ employees are under no obligation to update the information. Also there may be regulatory, compliance, or other reasons that may prevent MOSt and/or its affiliates / employees from doing so. MOSt or any of its affiliates or employees shall not be in any way responsible and liable for any loss or damage that may arise to any person from any inadvertent error in the information contained in this email. MOSt or any of its affiliates or employees do not provide, at any time, any express or implied warranty of any kind, regarding any matter pertaining to this report, including without limitation the implied warranties of merchantability, fitness for a particular purpose, and non-infringement. The recipients of this report should rely on their own investigations. The information above may be distributed to institutional investors or to recipients who are not institutional investors, MOSt does not conduct a suitability analysis prior to dissemination of such information, Each recipient, should therefore seek advice of their independent financial advisor prior to taking any investment decision based on information given above or for any necessary explanation of its contents. MOSt and/or its affiliates and/or employees/ analyst may have interests/positions, financial or otherwise in securities mentioned herein above MOSt and its affiliates are a full-service, investment banking, investment management, brokerage and financing group. We and our affiliates have investment banking and other business relationships and may deal in the securities mentioned herein as a broker or for any other transaction as a Market Maker, Investment Advisor, etc. to the issuer company or its connected persons. In addition, MOSt has other business units with independent research teams separated by 'Chinese walls' catering to different sets of customers having varying objectives, risk profiles, investment horizon, etc and therefore, may at times have, different and contrary views on stocks, sectors and markets. MOSt generally prohibits its analysts, persons reporting to analysts, and members of their households from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover. Additionally, MOSt generally prohibits its analysts and persons reporting to analysts from serving as an officer, director, or advisory board member of any companies that the analysts cover. Our salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions expressed herein, and our proprietary trading and investing businesses may make investment decisions that are inconsistent with the recommendations expressed herein. In reviewing these materials, you should be aware that any or all of the foregoing, among other things, may give rise to real or potential conflicts of interest. Please Refer to Disclaimer at the end of the report Page 5