Weakness was initiated by selling pressure in guar seed, guar gum, chilli and rubber. However, some sporadic buying and shortcovering seen in few commodities like soyabean, refined soyoil, pepper and maize supported sentiment. The tone of the market was cautious and mixed. Guarseed maintained its top active traded list followed by chana and urad.
Soybean and soya refined oil prices finished marginally higher on Wednesday on buying support. Selected edible oil prices in the Vidarbha region of Indias western state of Maharashtra rose on good buying support from local and north-based traders, amid poor arrivals from producing regions due to rains. Good hike in overseas edible oil prices and firm trend in oil prices of Madhya Pradesh state were said to be the main reason for upward trend.
The estimated total production of soybean during kharif 2005-06 is 58.51 lakh mt from 72.08 lakh mt during 2004-05, according to the Soybean Processors Association of India.
Pepper prices was highly volatile on news like Kerala governments plan to export pepper procured by the marketing federation from farmers. Other spices like chilli, turmeric, cardamom and Jeera continued to loose momentum on weak demand. Downtrend continued in rubber prices on Wednesday. Improving weather conditions and weak international signals are the causes behind this behaviour of price. China is considering to reduce 20% import duty on natural rubber to increase imports and meet huge domestic demand. Rubber prices may recover in the near future.
Pulses like chana, tur and yellow peas continued to remain soft on weak demand. Other commodities like guar seed and guar gum witnessed bearish patterns.
Bull run continued in crude prices on tight supply and strong demand. Continuing refinery problems in the US underpinned the bullish sentiment, along with an Atlantic hurricane season that is likely to be worse than expected, with as many as 21 tropical storms and 11 hurricanes, according to US government weather forecasters.
Gold and silver prices continued to remain firm on weak dollar and bullish fundamentals.
Gold companies in South Africa, the biggest bullion producer in the world, faced the first country-wide strike in 18 years as early as Sunday after wage talks broke down with miners unions.
The strike would paralyse South African mines of Anglo Gold Ashanti, Gold Fields and Harmony Gold the worlds second, fourth and sixth ranking gold producers leading to a loss of 28,000 ounces per day.
Courtesy: Geojit Commodities Ltd.