A smart start led to a sad ending

Updated: Aug 2 2005, 05:30am hrs
After a smart recovery in the previous sessions, commodity markets opened the day on a positive note for most of the commodities. The markets remained firm throughout the session on increased buying in commodities like chana, urad, soybean and refined soyoil.

The undertone of the market appeared optimistic in the earlier sessions of the day. However early closing of major exchanges like NCDEX and MCX due to unprecedented rains in Mumbai and other places damped trading interest at the end. Activity was moderate with increased volume in commodities like guar seeds, chana and urad.

Oil and Oil seed prices remained firm on Monday as a huge amount of commodities were damaged in the rain, according to sources. Normal life was disrupted, following rains and conditions have not yet normalised in the Vashi wholesale market, according to traders. Castor seeds, mustard seed and refined soyoil prices gained marginally. Chana prices extended their gains from last week on short supply. Incessant rains in the major growing areas continued to weigh sentiment. Producing centers are sending cargoes with normal to slow pace only to key markets of the country. As the crop size is expected to be 5.4 million tonne in 2005, so the imports are likely to be heavy.

Indias chana production fluctuates between 4-7 million tons and is normally 40% of Indias total pulse production. Spices like chilli, jeera, and turmeric continued to move lower on weak demand and availability of huge inventories. After a weak close last week, guar seed and guargum prices continued to move towards south on lackluster demand and bearish sentiments. Cereals like maize, rice and wheat ended mixed amid thin trade.

Crude oil rose to its highest in more than three weeks in New York after Saudi Arabias King Fahd, ruler of the worlds largest oil exporter, died.

Prices were also bolstered after BP Plc reported a refinery unit closed in Texas. Saudi Arabia is the largest producer in the Organization of Petroleum Exporting Countries, which supplies about 40% of the worlds oil. Gold and silver prices remained firm on weak dollar and good physical demand. Gold soared 4.8% in August 2004 as manufacturers geared up for increased jewelery demand during year-end holidays and the wedding season in India, the worlds biggest buyer of gold.

Courtesy: Geojit Commodities Ltd