SENTIMENT INDICATOR (NIFTY)

SENTIMENT INDICATOR (BANKNIFTY)

FII’S ACTIVITY IN INDEX FUTURE

FII’s ACTIVITY IN DERIVATIVE SEGMENT

Top 10 Rollover

Bottom 10 Rollover

SPICES

Turmeric futures (Dec) is likely to plunge further to test 5600-5500 levels. The factors of sluggish demand from domestic stockists and expectations of a higher crop in 2019-20 (Jul-Jun) season keep the counter in the negative zone. Jeera futures (Dec) is trading near its four month low & this bearishness is likely to get extended towards 15500, if breaks 15950 levels. This season the acreage in Gujarat has gained pace due to availability of good moisture in soil. So far in the 2019-20 (Oct-Sep) Rabi season, the progressive acreage under jeera as on 18th November was at 19,723 ha, higher by 5.86% over normal area, according to the Gujarat farm department. Dhaniya futures (Dec) is expected to trade on a bullish note towards 7200, taking support near 6780 levels. The reason being is that the pace of sowing in key growing regions of Rajasthan is slower than usual. The domestic demand has kept the prices steady so far on the spot market. In Ramganj, a key trading center in Rajasthan, the badami machine clean coriander variety sold at 5800-6000 rupees per 100 kg, and the eagle variety at 6200-62500 rupees, at Kota market. Cardamom futures (Dec) would possibly hold on to its 200 days EMA support near 2590 & trade with an upside bias to test 3000-3100 levels. The auction market has remained strong, especially on the availability of good quality. Farmers are also in high spirits following the upward trend in prices. According to traders, the market has witnessed an average price increase of Rs.50 per kg on a daily basis, on the back of strong demand from exporters, North Indian buyers and stockists.

BULLIONS

Bullion counter may trade with sideways to downside bias as a report of China's efforts to smooth the way for trade talks with the United States offset worries that an interim deal might not occur until next year. China has invited top U.S. trade negotiators for a new round of face-to-face talks in Beijing amid continued efforts to strike at least a limited deal, the Wall Street Journal reported on Thursday, citing unnamed sources. China will strive to reach the agreement with the United States as both sides keep communication channels open, the Chinese commerce ministry said. On concerns that US-China trade deal could get delayed after US lawmakers passed legislation supporting Hong Kong protesters, which Beijing condemned. The main driver in gold currently is the uncertainty about the trade deal and the market is in a wait-and-see mode. The number of Americans filing applications for unemployment benefits was unexpectedly unchanged at a five-month high last week, suggesting some softening in the labour market. Gold may trade in a wider range of 37500-38200 whereas on the other had silver may test 43900 and face resistance near 45300. There have been some buyers on dips and the holders of gold still hope prices will go higher. But if this does not materialize in the near-term, they will likely take profit on longs, pushing prices lower. The market, yet to swallow the report, was still wary about the fate of a trade deal after the United States passed two bills intended to support protesters in Hong Kong and send a warning to China about human rights.

OIL AND OILSEEDS

Soybean futures (Dec) may continue to remain steady & witness consolidation in the range of 3925-4060 levels. This oilseed counter is steady on the spot markets supported by good buying support from local crushing plants amid weak supply from producing belts. It is reported by the Reuters that after the ample monsoon rains, the Solvent Extractors’Association (SEA) had expected India soybean harvest to be more than 10 million tonnes, just a little down on 2018’s 10.3 million tonnes. The heavy recent rains damaged the crop in Maharashtra and Madhya Pradesh, which account for more than 85% of India’s output, and forced the trade body to cut that estimate to below 9 million tonnes. Mustard futures (Dec) is expected to post gains for the third consecutive week & move higher towards 4350-4380, holding on to the support near 4230 levels. This seasonthere may not be drop in overall acreage of mustard but due to late rains in September and October, farmers are waited for water to dry up from their fields in low-lying areas. This season sowing has been delayed & the latest statistic show that all India as on 15th November 43.09 lakh hectares has been sown as compared to 44.02 lakh hectares. The bullish momentum is likely to persist in CPO futures (Dec) as it has the potential to test 670 levels, while soy oil futures (Dec) may trade with an upside bias in the range of 795-815. The supply situation has become tight with both Indonesia and Malaysia the countries that account for most of palm oil production globally deciding to increase their bio-diesel mandate substantially from next year.

ENERGY COMPLEX

Oil gained more than 6% in previous week after data showed a smaller than expected builds in U.S. inventories. Also getting support from report that OPEC and its allies are likely to extend production cuts until mid-2020 when they meet early next month. In coming week, prices may trade with bullish bias as Saudi Arabia wants to focus first on boosting adherence to OPEC's production pact before committing to any more cuts. Rising tensions in the Middle East could also be impacting oil prices since one-fifth of the world’s oil flows through the Strait of Hormuz. Separately, Russian President Vladimir Putin said Wednesday he would continue to cooperate with OPEC on reducing output, according to Reuters. Russia is a member of OPEC+. At last December’s meeting of OPEC and its allies, the group agreed to cut daily production by 1.2 million barrels. The cartel meets on Dec. 5 in Vienna, and could consider an even steeper cut. Natural gas saw fresh buying from the low after a steep downfall. On MCX Crude oil may trade with bullish bias it can test 4350 where as taking support at 4120. Yemen’s Houthi rebels said Wednesday they intercepted a Saudi F-15 warplane, Earlier, Reuters had said the plane had been shot down. Weather is major trigger for this commodity and we see a rise seasonal demand during winter. Right now it is trapped in a range of 195-170. If it breaches the mark of 195 then more upside should be seen in this commodity. The next upside level which market may see in the month of Dec is in between 210-230.

OTHER COMMODITIES

Cotton futures (Dec) may trade with a downside bias in the range of 18900- 19200 levels. The spot rates of raw cotton in markets of Vidarbha are fetching rates even below the minimum support price (MSP) that was five years ago, while the farmers in Telangana are resorting to distress sale. The reason being is that the unseasonal rains had wet the standing crop and moisture-ridden crop this season. In order to arrest the fall in prices the Cotton Corporation of India (CCI) has commenced the procurement of cotton in many states. Farmers are slowly bringing their produce to the procurement centres. They have been advised to bring cotton with moisture content not more than 12 per cent. In the international market, ICE cotton futures is trading near its multiweek low as mixed signals on the US-China trade talks is continuously weighing on investor sentiments. This soft commodity is also being pressurized by weak export sales for the 2019/20 marketing year, which recently cited that it is down 34% from the previous week. Chana futures (Dec) may witness correction towards 4390-4360 levels. It is reported that the government is monitoring the prices of all the major kharif pulses and may intervene if they continue to rise. Going ahead, chana prices trend in spot market will depend on the sowing figures, weather condition in major producing areas, imports of kabuli Chana and also on Nafed policy on liquidation old procured stocks. Mentha oil futures (Nov) is expected to maintain its upside momentum & may even go higher towards 1315 levels. The demand is increasing from the consuming industries with the start of the winter season.

BASE METALS

Base metal counter may trade with subdued path as weak manufacturing and investment data from China fuelled concerns about Chinese economy. China and the United States are holding “in-depth” discussions on a first phase trade agreement, and cancelling tariffs is an important condition to reaching a deal. Copper may trade sideways to downside bias and it can take support near 420 levels and resistance near 435 levels. Miner FreeportMcMoRan Inc and two large Chinese copper smelters - Jiangxi Copper and Tongling Nonferrous Metals - agreed to a 23% cut in annual treatment and refining charges (TC/RCs) for 2020, pushing the industry benchmark to a nineyear low. China will strive to reach an initial trade agreement with the US as both sides keep communication channels open, the Chinese commerce ministry said. Meanwhile, lead may remain sideways as it can move in the range of 151-158 levels. Zinc may continue to fall and test 180 levels while facing resistance near 192 levels. Nickel prices can move with weaker path and may dip lower towards 1040 levels while taking resistance near 1140 levels. Indonesia’s mining ministry is revising the rules that govern the domestic price of nickel ore to ensure smelters follow government benchmark prices. Aluminium can further dip towards 126 levels while facing resistance near 132 levels. LME is considering creating a new market for "green" aluminium, using warehouse ownership documents to identify low-carbon material instead of spinning off a new futures contract. Global primary aluminium output rose to 5.392 million tonnes in October from revised 5.222 million tonnes in September, data from the International Aluminium Institute (IAI) showed.

TREND SHEET

TECHNICAL RECOMMENDATIONS

NATURALGAS MCX (DEC) contract closed at Rs. 189.10 on 21st Nov’19. The contract made its high of Rs. 212.30 on 06th Nov’19 and a low of Rs. 180.90 on 24th Oct’19. The 18-day Exponential Moving Average of the commodity is currently at Rs. 194.06. On the daily chart, the commodity has Relative Strength Index (14-day) value of 44.910.

One can buy between Rs. 182-184 for a target of Rs. 210 with the stop loss of Rs. 172.

CRUDEOIL MCX (DEC) contract closed at Rs. 4191.00 on 21st Nov’19. The contract made its high of Rs. 4199.00 on 21st Nov’19 and a low of Rs. 3696.00 on 03rd Oct’19. The 18- day Exponential Moving Average of the commodity is currently at Rs. 4070.39. On the daily chart, the commodity has Relative Strength Index (14-day) value of 60.751.

One can buy between Rs.4080-4100 for a target of Rs.4350 with the stop loss of Rs.3980.

JEERA NCDEX (DEC) contract was closed at Rs. 16150.00 on 21st Nov’19. The contract made its high of Rs. 17155.00 on 04th Nov’19 and a low of Rs. 15910.00 on 22nd Nov’19. The 18-day Exponential Moving Average of the commodity is currently at Rs. 16312.00. On the daily chart, the commodity has Relative Strength Index (14-day) value of 37.934.

One can sell near Rs. 16150 for a target of Rs. 15400 with the stop loss of Rs 16525.

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NEWS DIGEST

• The Baltic Exchange’s index ticked lower for a sixth straight session on Thursday, hurt by weaker demand for capesize vessels.

• The Commodity Participants’ Association of India plans to create a registry of individual clients trading on the exchange platform to avoid defaulted members from one exchange moving to another.

• China will accelerate the launch of futures contracts for rare earths on the Shanghai Futures Exchange, used in devices such as mobile telephones and batteries.

• Gold miners’ body World Gold Council (WGC) has recommended that the Indian government launch bullion banking by carving the niche bullion business out of the core banking system to bring in more transparency in business.

• The USDA in its weekly cotton export-sales report showed net sales of 227,600 running bales (RB) for the 2019/20 marketing year, down 34% from the previous week, but up 20% from the prior 4-week average, for the period ended Nov. 14.

• Miner Freeport-McMoRan Inc and two large Chinese copper smelters on Thursday agreed a 23% cut in annual treatment and refining charges (TC/RCs) for 2020.

• Silver demand will creep up by 1% this year, reducing global oversupply of the metal to the lowest since 2015.

WEEKLY COMMENTARY

Some recovery from lower level was noticed in commodities and CRB moved above 190 after making a low below 187. Dollar index saw see saw movements throughout the week on ambiguity in the market. Even bullion counter didn’t trade with clarity. Gold in the international market was marginally lower, however though silver saw some upside whereas in Indian market gold somehow managed to gain marginally and silver was up. In the energy counter, crude saw good jump whereas natural gas traded lower. Saudi is trying to keep oil prices up ahead of taking Saudi Aramco public. Furthermore prices are already reacting positively on a news leak that OPEC’s existing production cuts will be extended until June. Russian President Vladimir Putin’s indication that Moscow will support the Organization of the Petroleum Exporting Countries in whatever way necessary on production cuts when the cartel meets next month; also supported prices. Crude was trading near 4200 levels whereas natural gas prices saw dip on moderate weather issue. Beijing has invited U.S. trade negotiators for a new round of face-to-face talks ahead of President Donald Trump’s threat to pile another round of tariffs on Chinese goods starting Dec. 15. Ambiguity in trade deal between China and US tension in Hongkong and US support to Hongkong pressurized base metals prices. The LME Index fell for a third day last week, touching the lowest since early Sept. Copper consumption outside of China fell 1.5% during the first 8-months of the year, ICSG said. Alumunium total LME warehouse stocks rose for an 8th straight day. Zinc saw decline on build up in short positions. It is the biggest net short since the last week of August last year. Nickel was complete grip of bears. The metal dipped to $14,150 – the lowest since July 29 - and breaking below the 200-day moving average at $14,265. Available nickel in LME warehouses stood at 43,965 tons, up around 50% since reaching a 2007-low a month ago.

In agri cotton, counter was bearish as ICE cotton futures fell over 1% to a more than one-month low after a report said a "phase one" trade deal between Washington and Beijing may not be completed this year. Chana futures were in range. It is reported that the government is monitoring the prices of all the major kharif pulses and may intervene, if they continue to rise. In spices, coriander saw some good buying momentum. At present the seasonal domestic consumption is higher due to ongoing winter season. According to traders, the price of Eagle and Badami varieties is trading higher at the Ramganj and Baran markets in Rajasthan due to good buying.

NCDEX TOP GAINERS & LOSERS (% Change)

WEEKLY STOCK POSITIONS IN WAREHOUSE (NCDEX)

MCX TOP GAINERS & LOSERS (% Change)

WEEKLY STOCK POSITIONS IN WAREHOUSE (MCX)

SPOT PRICES (% change)

WEEKLY STOCK POSITIONS IN LME (IN TONNES)

PRICES OF COMMODITIES IN LME/ COMEX/ NYMEX (in US $)

Diamond....... beauty of Jewellary & Investment

Diamonds are an investor’s best friend. It is mostly considered as a secure investment. The online trading of diamond futures is available at platform Indian Commodity Exchange (ICEX), the only exchange in the world, started inAugust 2017 to provide exporters with a hedging tool.

Global scenario of diamond

Major Diamond mines are in Botswana, Zimbabwe, Namibia, SouthAfrica,Angola, Russia, Canada and Australia. Major cutting and Polishing countries of Diamonds are Belgium, Israel, USA, Indi a and China . Important centres of diamond cutting and trading are Surat (India), Antwerp (Belgium), London (UK), New York (USA), Tel Aviv (Israel), Amsterdam (Netherlands). More than 50% of the world’s production of rough, polished and industrial diamond passes through Antwerp. USA, Japan, China, Gu lf r e g i o n a n d I n d i a constitute approximately 70% of Diamond Jewellery sales.Global supply ofrough diamonds (in carats)is expected to expand at a CAGR ofthree per cent between 2016 and 2022, peaking in 2021 (Bank ofAmerica Merrill Lynch).

Indian scenario of diamond

Production or mining ofrough diamond in India is negligible. ButIndia is the world’s largest cutting and polishing centre for diamonds where 14 out of every 15 rough diamonds in the world are polished. Surat is the major centre for cutting, polishing and processing of rough diamonds. It contributes more than 85% of diamonds trading in India.

India is the world's third largest diamond consumer with 8% market share. India ranks first with 16.7 % market share in total export of diamond.India exports 95 per cent oftotal imported rough diamond the world’s diamonds,as per statistics from the Gems and Jewellery Export promotion Council(GJEPC).

India's Imports of rough diamonds & export of cut and polished diamonds during last ten years (In million $)

Latest update

In its latest financial report for Q3 2019, Rio Tinto said that its overall diamond production at its Argyle Mines and Diavik Mine fell sharply year-on-year. At Argyle, production in Q3 totaled 3.83 millioncarats,adropof19%year-on-year.AtDiavik,productionfell9%year-on-yearto1.06million carats. Rio Tinto’s diamond production guidance for 2018 was between 17 and 20 million carats while for 2019 is between 15 and 17millioncarats.

AngloAmerican, De Beers’parent company, has announced that De Beers’ Q3 production dropped 14% year-on-year to total 7.4 million carats.

D e B e e r s ’ y e a r-t o - d a t e production totals 23 million carats – a drop of 12% year-onyear. However, the miner still expects a full-year production of around 31 million carats.

INTERNATIONAL COMMODITY PRICES

Currency Table

News Flows of last week