13 th April 2018
News & Development MCX Crude Oil prices has witnessed a spike in the last couple of days and closed at Rs.4362/bbl by 12 th April. Geopolitical tensions prevailing across the globe led to incline in Crude futures in the past few days. Tensions between US and Russia are currently high after US imposed sanctions on Moscow last week. Tensions in Middle-east rose further as Saudi Arabia intercepted missiles that targeted Riyadh and another city. Tensions relating to Iran are already high amid worries that US may pull out of the nuclear deal. Tensions have also further intensified with rising issues with Syria due to suspected chemical attacks being made. President Donald Trump warned Russia on 11 th April that it should "get ready" for a missile strike on Syria, vowing to thwart any missile defenses. In retaliation, Russia has vowed to shoot down any missiles fired at Syria. For the month ahead, oil prices are likely to remain supported as US is gearing up for military and air strike on Syria to counter suspected chemical attacks. Saudi Oil Minister Khalid Al-Falih has also sounded increasingly hawkish in public, suggesting that OPEC should keep tightening the oil market even through they are close to achieving its target price levels. Saudi Arabia has given signals regarding its ambition to bring crude oil prices to $80/bbl. However, there are factors that can cap down extreme bullishness in the market which is rising crude oil inventories/production in United States. As per latest weekly EIA report, crude oil inventories has reported higher by 3.3 million barrels while production hit a fresh high of 10.525 million barrels. On the daily chart, MCX Crude Oil prices has been moving within a Rising Channel and forming higher high, higher lows formation; which indicate continue bullish trend in the counter. Moreover, price has also moved above upper Bollinger Band formation; which suggests bullish rally will continue further for near term. On the other end, NYMEX Crude Oil has breached its previous high of $66.64 level and traded at three-year highs amid ongoing expectations that geopolitical tensions in the Middle East could add a possible fear premium to oil, while continued OPEC cuts supported sentiment. In addition, price has extended the gain of around 4% on monthly basis and sustained above $67 levels. Furthermore, daily RSI and MACD have favored the bullish trend with positive crossover on daily chart. For short term perspective, one can initiate a long position in MCX Crude Oil (May) at CMP Rs. 4400 or on fall in the prices till Rs.4300 should be used as buying opportunity for an upside target of Rs. 5000 levels. However, the bullish view can be reversed if MCX Crude Oil (May) close below the support of Rs. 4050. Overall, we maintain our bullish view in MCX Crude Oil for the next one month.
News & Development Refined Soy Oil spot price has been following an uptrend since the month of February and closed at Rs.765/quintal by 12 th April. Increased import duties by Government on Crude Palm Oil had brought similar bullish sentiment in Refined soy oil prices. The above import duties was raised by the Government to reduce the dependency on imports for domestic consumption. This also provides opportunities for domestic farmers to increase sowing and production of oilseeds for 2018-19. Also higher domestic demand has prevailed in the past two months which supported uptrend in spot and future prices Looking forward, we are expecting soy oil prices future prices to remain bullish owing to lower production of Soybean in 2017-18, which eventually brought decline in refined soy oil production. Also poor weather conditions has been witnessed in Argentina which has led to decline in yield of and lower amount of crops has been harvested for the current year. As per USDA Data, soy oil production of Argentina has reported at 7950 thousand metric tonnes for the current year. It is lower by 6% compared to previous year s production of 8395 thousand metric tonnes. This eventually has led to lower supplies for the current year as opening stocks have also been reported to be down for 2017-18. On a weekly time frame, NCDEX Refined Soya Oil (May) had given Cup & Handle pattern breakout around 760 levels and sustained above it for couple of week; which indicate more bullish strength in the counter. On the other hand, prices has been moving within a rising channel formation, where price has tested the upper line of the said formation and retreated from there due to further profit booking on higher levels and it may fall towards Rs. 765-760; which would be a immediate neck line support for the prices. In addition, Price has been sustained above the Ichimoku Clouds ; where leading span A has crossed leading span B, which reinforce bullish signals in the counter for near term. Moreover, a momentum indicator RSI (14) and another lagging indicator MACD are in bullish mode with positive crossover on weekly chart. For short term perspective, one can initiate a long position in NCDEX RSO (May) around Rs. 768 or on fall in the prices till Rs. 760 should be used as buying opportunity for an upside target of Rs. 820 levels. However, the bullish view can be reversed if NCDEX RSO (May) close below the support of Rs. 740. Overall, we maintain our bullish view in NCDEX Refined Soya Oil for the next one month. SEBI Registered Research Analyst www.choiceindia.com * Please Refer Disclaimer on Website
Commodity LTP WoW (%) MoM (%) Open Interest (weekly) NYMEX Crude Oil ($/bbl) 67.37 7.75 7.78-154.02 Brent Crude Oil ($/bbl) 72.31 6.97 9.62-108.13 MCX Crude Oil (Rs./bbl) 4395 8.26 8.59 339 NCDEX Refined Soy Oil (Rs./quintal) 774.50-1.56-1.88 13800 US Crude Oil Inventories Seasonality Chart Commodity Country Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec SOYBEAN India USA Brazil Argentina China Sowing Growth Harvesting/ Arrivals SEBI Registered Research Analyst www.choiceindia.com * Please Refer Disclaimer on Website
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