E

MCX WEEKLY NEWSLETTER

✍ BULLION

On the demand side, there are signs of revival as demand is showing signs of pick up in India as the

impact of demonetization fades. Imports also usually jump post the budget as the duty related

uncertainty goes away. A decline in prices will also help physical demand to tick up in India and China.

SPDR holdings meanwhile increased by ~43 tonnes in February but holdings are down by ~17 tonnes

this month. If gold prices sustain below, we could see more investment outflows in the coming days

which could weigh on prices.US economic data continues to be better and the latest jobs data provided

further confirmation. Non-farm payrolls increased by 235k last month and the unemployment rate ticked

down to 4.7%. Wage growth was lightly disappointing in m/m terms earnings increased by a healthy

2.8% y/y. The total of employed Americans surged by 447,000 to 152.5 million, the highest ever. Initial

jobless claims remain near a 43-year low. Claims have now remained below 300k for 102 straight

weeks, the longest stretch since 1970. Apart from better jobs data, another factor that will help the Fed

to raise rates is that inflation readings are ticking up. The consumer price index (CPI) increased 2.5%

y/y in January, the biggest year-on-year gain since March 2012. US PPI increased for a second straight

month, rising 1.6% y/y. Wholesale inventories increased 1.0% and wholesale stocks excluding autos

increased 0.9%. Inventory investment contributed one percentage point to the economy's 1.9%

annualized growth rate in Q4. Importantly, the data showed that sales at wholesalers jumped 2.6% in

December, the largest increase since March 2011. Data earlier showed that activity in the mid-Atlantic

region accelerated to a two-year high, amid jumps in new orders, employment and inventories. US retail

sales and producer prices in December came in mostly in line with forecasts. Retail sales rose in

December amid strong demand for automobiles and furniture. Business inventories increased 0.7%, the

biggest increase since June 2015. US economy however expanded at a slower annual rate of 1.9% in Q4

after a 3.5% advance in Q3. Much of the slowdown was due to the fact that soyabeans exports fell after

a strong jump in Q3. Excluding soybean, GDP increased at about a 2.7% rate in both the third and fourth

quarters suggesting that the underlying growth momentum remains strong. Growth accelerated from a

1.4% advance in Q2 and a 0.8% increase in the first three months of 2016. Consumer spending

increased at a 2.5% rate in the fourth quarter. The GDP forecast for real GDP growth in Q1 of 2017 is

2.4%. 4.4 4.5 4.6 4.7 4.8 4.9 5 5.1 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 Nov-15

Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16

Jan-17 Feb-17 US Jobs Market Nonfarm Payrolls Source: Reuters Unemployment Rate (RHS) 35000

45000 55000 65000 75000 85000 95000 -50000 0 50000 100000 150000 200000 250000 300000 Oct-

14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Speculative Positioning Gold Net

longs Silver Net longs(RHS) Precious Metals Weekly Please refer to the disclaimer at the end of

Tuesday, 14.March.2017

the report. 3 Over the last few months, readings on manufacturing and services have also

rebounded. The ISM manufacturing PMI came in at 57.7 in February, up from 56 in January, the

highest in three years. The ISM Non-Manufacturing PMI came in at 57.6, boosted by business

activity and employment. While rate hikes have been much talked about and hence factored into

prices till a considerable degree, political uncertainty emanating from Europe could potentially be

price positive. Elections in Netherland are due this week and a win of a far-right candidate could

create considerable uncertainty in the region. Euro-skeptic candidate Geert Wilders has gathered

momentum among Dutch voters in this year's campaigning. The polls suggest that she may come

second but chances of a surprise are high considering the latest controversy between Turkey and

Netherlands. Turkey has suspended high-level diplomatic relations with the Netherlands after Dutch

authorities prevented its ministers from speaking at rallies of expatriate Turks. This will also help

prospects of the anti-Islam Geert Wilders and keep risk premium elevated in gold. If she wins, we

could see a risk off sentiment and a rebound in gold as it would create fears of similar results in the

French election. In France, markets are assigning a low probability to the victory of Marine Le Pen

but we have seen how markets have gone wrong with Brexit and Donald Trump. Le Pen, the far

right candidate has spoken about exiting the Euro zone and redenominating France’s national debt

in francs. This is a huge potential risk to global market stability and her victory could push safe

haven demand significantly higher and help gold and silver.

✍ BASE METAL

MCX Zinc prices cracked last week, trading close to the lowest in the month. Resistances for the

futures are placed at 183.65, 185.65 and 188, while supports on the downside are at 179.25 and

176.5. .Copper was among a slew of commodities that posted their biggest weekly decline in months

last week after recent rallies showed signs of petering out, pressured by a glut and tepid demand from

top consumer China. BHP Billiton last week planned to present workers with an improved offer. What

is more, under Chilean employment law, after 30 days of strike, BHP Billiton can bypass the union and

legally make individual offers to workers in a bid to encourage them to resume production. If BHP

Billiton succeeds in persuading more than half of the workforce to return to work, the union would

have to admit defeat and the strike would end. The current strike at Escondida mine is the third-longest

so far in recent Chilean mining history. Production at Grasberg mine in Indonesia will be resumed to

supply a local smelter with copper concentrate. According to the mine’s operator, production is to run

at 40% capacity. New trouble is brewing in Peru, at the Cerro Verde mine. Over half of workers will be

going out on strike for an indefinite period. The mine was expanded significantly at the end of 2015

and is the country’s largest copper mine Speculators cut their bullish position by 13,511 lots to 57,149

lots in copper, bringing it to the lowest level since November. Copper stocks in LME-registered

warehouses are up 125,500 tons, or 63%, higher than at the start of March and at their highest since

December. The coordinated nature of this inflow suggests the bear-bull battle that raged sporadically

across the London market last year has started again. Treatment and refining charges for traderto-

smelter deals for shipments to China are reported to have fallen to roughly $70 a ton, at a 4 year low.

TC-RC’s are an important indicator of market tightness. A steep drop in China’s aggregate financing,

seen as a proxy for credit available to store metals, spooked traders that Beijing may be clamping down

on the type of credit used by the metals industry. U.S. employers hired workers at a robust pace of

235,000 in February, beating expectations, which could give the Federal Reserve the green light to

raise interest rates this week despite slowing economic growth. Nickel also cracked last week, with an

8% weekly drop, widest since May 2015, on concerns that mine supply from Philippines may pick up

just as Indonesia resumes exports. Supply-side uncertainties in Indonesia and the Philippines continue

to dominate nickel price sentiment – the latest development is of more Indonesian companies receiving

approval to resume nickel-ore exports, following the release last week of further details from

government. LME stocks total 384,978 tons, up 3.5% in the year to date amid busy two-way flows.

There is little sign of tightness in the market. Indonesian state miner PT Aneka Tambang Tbk will

apply next week for a permit to export 6 million tons of nickel ore for year. Nickel prices are set to

remain volatile as the market continues to react to supply-side developments. But the recent softening

of fundamentals implied by the INSG, coupled with the large overhang of visible stocks, suggests

prices will remain low from a historical perspective without greater supply-side discipline. 0 0.5 1 1.5

Escondita Grasberg Morenci Buenavista Del Cobre Collahuasi El Teniente Copper King Disruptions

are impacting production at world's two largest copper mines Source: International Production

Capacity Copper Study Group Please refer to the disclaimer at the end of the report. 3 Philippines’

mining industry expressed its confidence that Commission on Appointments will reject Gina Lopez as

Environment secretary, emphasizing that she was unable to persuade the members of the committee.

Nickel prices fell 10% as bears believe there will be rejection. The Philippines is top nickel ore

exporter and Lopez’s approval would probably sustain worries over supply disruptions that could lift

global prices this year. On other hand, rejection would give miners a key win in battle against

environmentalists, adding pressure to nickel prices.

✍ ENERGY

WTI prices fell below the psychological $50 mark for the first time since December as the optimism

built up post the OPEC deal started to fade. OPEC producers have implemented nearly 98% of the

agreed cuts as per latest data. Estimates show that supply from the 11 OPEC members with production

targets fell to 29.88 million bpd last month. Production by all OPEC members, including cut-exempted

Nigeria and Libya, fell to 32.14 million bpd. Saudi Arabia, which raised oil production to a record this

year took a bigger burden of the cut and has reduced output by more than 700,000 bpd to 9.74 million

bpd. Iraq’s compliance still hasn’t come fully but more output cuts are likely in the coming weeks.

Non-OPEC compliance has been a concern with some estimates suggesting only ~60% compliance so

far. The OPEC and IEA monthly reports due this week will give better understanding about Tuesday,

March 14, 2017 Energy Weekly 2 Please refer to the disclaimer at the end of the report. 100 120 140

160 180 200 220 240 260 280 200 275 350 425 500 575 US inventories Crude stocks gasoline RHS

distillate RHS the level of compliance. We believe that unless all producers come fully on board to

implement their quotas, oil prices could remain under pressure as other factors are outweighing the

supply cuts. A bigger worry is the fact that Russia also hasn’t cut output as per the agreed terms with

February production unchanged from January at 11.1 mbpd. Brazil’s oil exports also have been

climbing with February exports at a record 1.63 mbpd. Brazil is not a part of the non-OPEC group that

agreed to production cuts. Meanwhile, given that Libya and Nigeria are exempt, a rebound in their

production will increase OPEC output even if other members stick to their quotas. Nigerian output was

higher at 1.8 million bpd as per latest data, up 0.2 mbpd from 1.6 million bpd in January. Libya’s oil

output is also edging higher and is close to 0.70 million bpd. While the production cut is surely

medium term price positive, the biggest headwind to prices is the re-emergence of shale producers. US

oil rig count has been increasing since June and is now at its highest since October 2015. Weekly data

from EIA shows that US oil production is above 9.0 million bpd and latest EIA forecasts show that oil

production could average 9.2 million bpd this year. US shale oil output hit a low of around 8.46 million

bpd in July 2016. EIA forecasts show that US shale oil production is expected to rise again in April by

109,000 bpd to 4.96 million bpd suggesting that shale is surely making a comeback at this level of oil

prices. On the inventory side, US oil stocks have increased for nine straight weeks, touching a record

528 million barrels, a record high. Crude oil inventory increase since the start of this year has been ~50

million barrels. Gasoline and Distillate stocks are also near the upper end of the five-year range. In

Europe, stocks at the Amsterdam-RotterdamAntwerp (ARA) are down 9.4% y/y to 46.54 million

barrels. It remains to be seen if reduced OPEC supply leads to significant inventory drawdown in the

coming months. In the natural gas market, prices rebounded sharply as weather supported in the recent

days.

MCX DAILY LEVELS ✍

DAILY EXPIRY DATE R4 R3 R2 R1 PP S1 S2 S3 S4

ALUMINIUM 31 MAR 2017 127 126 125 124 123 122 121 120 119

COPPER 28 APR 2017 396 393 390 387 385 382 379 376 373

CRUDE OIL 20 MAR 2017 3290 3270 3250 3230 3210 3190 3170 3150 3130

GOLD 05 APR 2017 31580 31480 31380 28280 31180 31080 30980 30880 30780

LEAD 31 MAR 2017 154 153 152 151 150 149 148 147 146

NATURAL GAS 28 MAR 2017 209 207 205 203 201 199 197 195 193

NICKEL 31 MAR 2017 690 685 680 675 670 665 660 655 650

SILVER 05 MAY 2017 41000 40800 40600 40400 40200 40000 39800 39600 39400

ZINC 31 MAR 2017 185 184 183 182 181 180 179 178 177

MCX WEEKLY LEVELS ✍

WEEKLY EXPIRY R4 R3 R2 R1 PP S1 S2 S3 S4

ALUMINIUM 31 MAR 2017 130 128 126 124 122 120 118 116 114

COPPER 28 APR 2017 402 397 392 387 382 377 372 367 362

CRUDE OIL 20 MAR 2017 3320 3290 3260 3230 3200 3170 3140 3110 3080

GOLD 05 APR 2017 28900 28750 28500 28280 28150 27950 27750 27550 27200

LEAD 31 MAR 2017 157 155 153 151 149 147 145 143 141

NATURAL GAS 28 MAR 2017 213 210 2017 203 200 197 194 191 188

NICKEL 31 MAR 2017 705 695 685 675 665 655 645 635 625

SILVER 05 MAY 2017 41300 41000 40700 40400 40100 39800 39500 39200 38900

ZINC 31 MAR 2017 188 186 184 182 180 178 176 174 172

FOREX DAILY LEVELS ✍

DAILY EXPIRY DATE R4 R3 R2 R1 PP S1 S2 S3 S4

USDINR 29 MAR 2017 66.65 66.55 66.45 66.35 66.25 66.15 66 65.90 65.80

EURINR 29 MAR 2017 71.25 71.05 70.90 70.75 70.60 70.45 70.30 70.15 70

GBPINR 29 MAR 2017 81.70 81.50 81.30 81.10 80.90 80.70 80.50 80.30 80.10

JPYINR 29 MAR 2017 58.30 58.15 58 57.85 57.70 57.55 57.40 57.25 57.10

FOREX WEEKLY LEVELS✍

DAILY EXPIRY DATE R4 R3 R2 R1 PP S1 S2 S3 S4

USDINR 29 MAR 2017 66.97 66.77 66.57 66.37 66.17 66 65.80 65.60 65.40

EURINR 29 MAR 2017 71.50 71.25 71 70.75 70.50 70.25 70 69.75 69.50

GBPINR 29 MAR 2017 82 81.70 81.40 81.10 80.80 80.50 80.20 79.90 79.60

JPYINR 29 MAR 2017 58.70 58.40 58.10 57.85 57.60 57.30 57 56.70 56.40

TECHNICAL PERSPECTIVE

Gold prices have tested the immediate support of 50% retracement mark in the previous week and

settled just above it along with a Doji candle stick formation on the daily chart. Going ahead, prices

are likely hold the support of 50% retracement level for this week and could lead to recovery in the

coming session till 29650 then 29860 levels. However a convincing close below 29300 will extend

fall till the next key support of 61.8% retracement level of 27960. Momentum indicators, MACD is

still on a positive note, while the RSI indicator sharply declined from 0.49 – 0.44.

MCX Copper corrected last week amidst all the strike concerns globally and rising LME inventory.

We expect prices to take resistance at 389 and 394.7 above which prices may turn positive for the

short term. Strong supports on the downside are placed at 378 and 372.5.

MCX Zinc prices cracked last week, trading close to the lowest in the month. Resistances for the futures

are placed at 183.65, 185.65 and 188, while supports on the downside are at 179.25 and 176.5

NCDEX DAILY LEVELS✍

DAILY EXPIRY

DATE

R4 R3 R2 R1 PP S1 S2 S3 S4

SYOREFIDR 20-APR-2017 643 641 639 637 635 633 631 629 627

SYBEANIDR 20-APR-2017 2930 2910 2890 2870 2850 2830 2810 2790 2770

RMSEED 20-APR-2017 3885 3865 3845 3825 3805 3785 3765 3745 3725

JEERAUNJHA 20-APR-2017 17400 17300 17200 17000 16900 16800 16700 16600 16500

GUARSEED10 20-APR-2017 3880 3860 3840 3815 3800 3780 3760 3740 3720

TMC 20-APR-2017 6820 6780 6740 6700 6660 6620 6580 6540 6500

NCDEX WEEKLY LEVELS✍

WEEKLY EXPIRY

DATE

R4 R3 R2 R1 PP S1 S2 S3 S4

SYOREFIDR 20-APR-2017 648 645 641 638 636 633 630 627 624

SYBEANIDR 20-APR-2017 2960 2930 2900 2870 2852 2820 2790 2760 2730

RMSEED 20-APR-2017 3900 3875 3850 3825 3803 3775 3750 3725 3700

JEERAUNJHA 20-APR-2017 17600 17400 17200 17000 16800 16600 16400 16200 16000

GUARSEED10 20-APR-2017 3900 3870 3840 3815 3795 3762 3730 3700 3664

TMC 20-APR-2017 7000 6900 6800 6700 6600 6500 6400 6300 6200

NCDEX WEEKLY NEWSLETTER

✍ CASTORSEED

In Palanpur market in Gujarat, castor seeds prices traded at Rs.4025/quintal down by Rs.45/quintal amid decreased arrivals of 1180 quintals In Siddhpur market, prices traded at Rs.4015/quintal, up by Rs.3/quintal amid increased arrivals of 2090 quintals while at Visnagar market, prices traded at Rs.4017/quintal, down by Rs.60/quintal amid increased arrivals of 2310 quintals During Feb’17, castor meal were exported at 30,312 tons, down by 25% Y/Y According to SEA, castor seeds production is likely to decrease by 25% to 1.06 million compared 1.43 million MT in 2015-16 At NCDEX approved warehouses, total 50,920 MT castor seeds are available, up by 1,854 MT compared to prior day,

✍ CARDAMOM

During the last trade, cardamom futures traded mostly in lower note Good rainfall in growing district of Kerala which is good for the crop weighed down the cardamom futures prices Hence, Apr futures closed the trade at Rs.1385.5/kg, down by 1.21% while May futures closed with loss of 1.10% from their previous close During the last auctions at spot centers, supplies were at 25 MTs which traded at average price of Rs.1215/kg and superior quality material fetched Rs.1434/kg There is slight improvement in the buying activities at spot market as prices have fallen considerably in past few days

✍ TURMERIC

During the last trade, turmeric futures witnessed smart recovery from prior sharp fall on profit booking at lower levels However, steady pace of fresh crop supplies at spot market limited recovery for turmeric futures prices Hence, Apr futures closed the trade at Rs.6692/quintal, up by 2.04% while May futures closed with recovery of 1.95% from its previous close During last trade at Erode, prices decreased in the range of Rs.100-300 to Rs.8300/quintal and Rs.7500/quintal due to weak demand from North India

✍ DHANIYA

According to FISS, dhaniya production is expected to 0.72 lt, 1.62 lt and 1.71 lt in Rajasthan, Madhya Pradesh and Gujarat respectively (lt: lakh tons) At Mandsaur market in MP, FAQ variety prices traded at Rs.3810/quintal amid increased arrivals of 2000 quinatls At Halvad market, prices were traded at Rs.5150/quintal, up by Rs.150/quintal amid decreased supplies of 2340 quintals while at Neemuch and Junagadh market prices were traded at Rs.3950/quintal and Rs.5250/quintal respectively

✍ JEERA

At Unjha market, jeera prices traded at Rs.16250/quintal while at Gondal market, prices traded at Rs.15055/quintal,Expectations of pickup in demand in coming days supported prices to trade higher However, higher supplies of new crop across major spot markets limited the gains for jeera futures prices Hence, Mar futures closed the trade at Rs.17010/quintal, down by 1.22% while Apr futures closed with loss of 1.12% from its previous close

TECHNICAL PERSPECTIVE

RM seed prices traded on corrective move last week and retracted till the low of 3871 and finally ended at 3894 mark. On the weekly chart, prices have exactly tested the previous candle high support as well as the breakout trend line support and have recovered from the same. Prices holding above the trend line are indicating further bullishness in the counter and we expect the prices to move higher till the next resistance of 4020 levels. While the immediate support is at 3860 and the crucial support of the

whole at 3800 mark break down below that will turn the scenario bearish.

NCDEX Jeera is consolidating in the form of a symmetrical triangle C-C1 and breakout of the same is expected soon. Strong short-term supports are placed at Rs.17000 / 16600 whereas Rs.17450 / 18100 may act as stiff resistances. Range bound movement is likely to continue. Risk takers can go long near mentioned support with strict SL below 16600 for a pullback rally.

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