Despite the volatility in soybean and soyoil, both the commodities are headed for gains this week, says Aurobinda Prasad, commodities head at Karvy Comtrade, in an interview with Sharleen D'Souza.
1. Currently, due to the high volatility in soyaoil and soybean, how do you see the movement in commodities this week?
The trend is going to remain positive in the coming week too. Giving high importance to USDA report, soybean traders would remain on the long side. Low acreage data has made soybean crop planting to decline by 2% which is basically caused by drought in US/Latin America. So the trend is expected to remain bullish. Low corn stock piles and higher yielding commodity would push more plantation of corn in the US this year. It would reduce the planting acreage of Soybean, which, in turn, would cause soybean prices to remain higher in the near term. Currently, at CBOT market Soybean futures have surpassed 1,400 marks is certainly something likely to push prices higher. However, we have to look at the US dollar performance.
Entire edible oil sector traded positive last week. However, gains were almost similar to bean price performance. In fact, gains eroded a little from its weekly high. The edible oil sector performed higher due to bullish trend in underlying commodity soybean.
2. Do you expect jeera and pepper to be the leading commodities in the spice basket?
Jeera prices are projected to trade on lower note on back of prevailing sluggish demand across the spot markets. Physical market traders are expecting a small recovery in prices on Monday as spot market will open after 4 days. On the other hand, farmers are likely to bring huge supplies to the market in anticipation of further fall in prices. Therefore, prices are expected to trade on volatile note prevailing concerns. Nonetheless, overall trend is projected to remain biased towards downside amid lack of bulk buying activity.
Pepper prices are expected to continue the down trend on back of prevailing weak global fundamentals. Rising arrivals from Vietnam are likely to weigh on global pepper prices. According to trade sources, spot market is expected to become active from April 3. Therefore, resumed activity at spot front might support the prices to recover from earlier losses. However, this recovery might remain shortlived as most of the overseas buyers are staying away amid prevailing uncertainty in Indian prices. Indian parity in international pepper market has declined but still it is higher from other origins which might keep prices under pressure.
3. Do you still see a correction mentha oil?
Mentha oil April prices resumed uptrend on buying last week at lower levels. Price at futures traded down initially, extending the corrections started in previous week. However, later on prices reversed the trend on fresh buying at lower levels and made a weekly high of 2505. Though prices took small corrections during the week, overall trend remained bullish.
4. Will gold continue with its range bound movement?
The week ended with the completion of the first quarter of the year, in which gold gained over 6% and silver rose 15.7% on quarter-on-quarter basis. Bullions settled the quarter up, having outperformed the 1.46% fall in dollar index. Despite getting charged up by the dual combo of Bernanke speech and European news last week, gold failed to pierce the $1,700 mark ahead of the option expiry and prices fell to as much low as $1,645. However, prices were garnered after European chiefs agreed to boost the region's anti debt firewall to a roughly 800 billion Euros. The crucial week ahead, intense anticipations on US labour market at a before hand is likely to rattle the market. Bullions therefore may get a big push to the upper side at the initial days of the week
5. What is the outlook for copper?
Base metal prices traded mixed last week as lead and copper gained slightly due to euro zone deal. However, other metals continued to retreat as US personal income and consumptions remained fragile coupled with declining industrial and manufacturing activity and profits. Nickel was the top loser due to weak spot activities coupled with rising inventories. At MCX, losses were comparatively more as the rupee appreciated 0.58% against the greenback.