Bears tighten grip in futures markets

Updated: Aug 5 2005, 05:59am hrs
Selling pressure continued in commodity markets on Thursday on bearish fundamentals. After a week, markets opened in red for most of the commodities on Wednesday. Markets were trading in tight range for most of commodities in the earlier sessions.

Later, long liquidations and fresh selling came in and drifted the prices towards south during the course of the day. Selling was broad-based with pulses like chana, tur, and yellow peas other sectors like plantations, cereals and few oils.

However, minor buying interest were seen in few commodities like pepper and jute. Carrying on from high levels of volatility in the past days continued on Thursday. Guar seed was the top star of Thursdays volumes followed by chana and urad.

Market watch

Pulses were under pressure on Thursday, as bears were under control of the market.

Decline in price in the spot market on poor demand and huge stocks continued to weigh on prices of chana, urad and tur and yellow peas.

Market could weaken further as spot is unable to sustain its strength and shedding expected amid good arrival in couple of month.

Rubber prices plunged on long liquidations and selling pressure in both domestic and international markets.

Improving weather conditions and absence of buyers are the primary reasons for this fall.

However, supply remains still tight, as tapping is not fully recovered from rain according to producers.

Coffee prices remained almost unchanged to slightly lower on sluggish international trends. Indias coffee exports in the calendar year so far total around 101,201 metric tonne, down 38% from the same period last year, according to Coffee Board.

Coffee production in India is expected to total around 250,000 tonne compared with 270,000 tonne in 2004, because of pest infestation in arabica plantations.

Spices like pepper, chilli and turmeric remained firm on shortcovering and sporadic buying interest.

Night riders

Crude prices were volatile and recorded a volume of 1,408 crore on Wednesday. Prices had a nosedive after an US government report showed near-record crude imports lifting stockpiles unexpectedly in the worlds largest energy consumer.

Crude oil inventories rose by 200,000 barrels, countering expectations among analysts that stockpile would decline by 1.6 million barrels.

Bullions like gold and silver continue to shine on weak dollar and fund buying.

US gold futures rose on Wednesday, reaching a one-month peak as a sharply higher euro made bullion more attractive and sparked heavy institutional buying.

A weaker dollar tends to boost gold prices as dollar-denominated bullion gets cheaper for investors overseas.

Courtesy: Geojit Commodities Ltd