Markets highly volatile

Updated: Aug 23 2005, 05:30am hrs
Carrying on from the buoyancy that was witnessed in the previous trading sessions, the Commodity markets opened on Monday on a positive note.

Prices for most of the commodities were firm in the morning and mid sessions. Later profit taking set in erased some of the earlier gains. Buying was broad with aggressive buying interest in commodities like guarseed, guargum, chana coffee and cardamom.

However few commodities like chilli, jeera, and pepper extended their losses on weak fundamental factors. The overall sentiment remained mixed with selected buying interest. Activity was good with substantial increase in volumes in guarseed and chana.

Market watch

After a strong close last week, guarseed and guargum prices spurted up on Monday on high speculative buying interest. Anticipation of decline in production by 40% this year and sharp rise in spot price at Jodhpur pushed the prices to higher levels, according to experts.

In NCDEX guar gum for September delivery finished more than 10% from Saturday. Guar seed maintained its position in the top active commodity list. Pepper prices lost further ground on Monday due to increase in imports and weak international trends.

Imports up to June this year stood at 9,651 tonne as against 7,726.98 tonne and 5,196.98 tonne in the corresponding periods in 2004 and 2003 respectively.

In the international markets, Indonesia, prices dropped to $1,250 a tonne while in Brazil, where the harvesting is being delayed by a month, the prices quoted were $1,350 a tonne. Vietnam was offering at $1,250-1,300 a tonne. Indian parity is at $1,500 a tonne. Other spices like chilli, and jeera witnessed similar bearish trends.

Soyabean and refined soyoil prices showed smart recovery on Monday on thin arrivals and good demand. Firm trend in soyoil and weak soya arrival from producing regions helped to boost the soya prices.

Increasing trend in Madhya Pradesh soya prices also pushed up soya prices in Vidarbha. About 1,500 soya bags reported for auctions in all over Vidarbha mandis, according to APMC (Agriculture Produce Marketing Committee) sources.

Plantations like rubber and coffee were firm on shortcovering and uptrend in the international markets. Inventories in top-producer Brazil are expected to tighten in late 2005 since the new crop is smaller and seen at 33.3 million bags versus 39 million last year.

Chana prices improved considerably on Mondaydue to buying support. Other pulses like urad, tur and yellow peas remained soft. Crude oil prices were little changed with slightly lower tone on Monday. However strong demand and technical buying prevented further downslide.

Oil demand is forecast to increase to a record 85.9 million barrels a day in the fourth quarter, according to the International Energy Agency.

Gold and silver prices remained firm on low stocks and weak US Dollar. Comex gold warehouse stocks were down 256 ounces on Friday at 5,901,735 ounces, while silver stocks were down 6,00,186 ounces at 1,10,632,096.

Courtesy: Geojit Commodities Ltd