Crude oil futures ended lower in the domestic market

Market News: Crude oil futures ended lower in the domestic market on Thursday as investors and speculators exited positions in the energy commodity tracking a weak trend in the overseas market as US crude supplies climbed for the ninth week on the trot to a fresh record, raising fears over a widening supply glut.

US crude stockpiles climbed by 4.5 million barrels to 448.9 million barrels in the week ended March 6, 2015. A third straight drop in US retail sales last month signaled a slowdown in the world’s biggest economy, clouding the demand outlook for the fuel. US retail sales fell by 0.6 per cent in February over the previous month when it declined 0.8 per cent. Investors cast aside a decline in the number of applications seeking unemployment benefits last week, signaling US labour market progress. US jobless claims fell to the lowest level in three weeks, down 36,000 to 289,000 in the week ended March 7, 2015. Oil may extend a decline today amid lingering oversupply fears. At the MCX, Crude oil futures, for the March 2015 contract, closed at Rs 2,982 per barrel, down by 0.60 per cent, after opening at Rs 3,021, against the previous close price of Rs 3,000. It touched an intraday low of Rs 2,956 till the closing.

Chana prices closed higher 0.49 per cent on Thursday at the National Commodity & Derivatives Exchange Limited (NCDEX) as the traders enlarged their holdings in the commodity on account of the good demand in the market. At the NCDEX, chana futures for April 2015 contract closed at Rs. 3,688 per quintal, up by 0.49 per cent, after opening at Rs. 3,674 against the previous closing price of Rs. 3,670. It touched the intra-day high of Rs. 3,690. Moreover, the restricted arrivals of the commodity in the physical market due to lower estimated output also influenced the chana prices.

India is the largest producer of chickpea followed by Pakistan, Turkey and Iran. India produces around 6 to 8 million tonnes and contributes around 70 per cent of the total world production.

Mustard seed prices closed higher by 0.15 per cent on Thursday at the National Commodity & Derivatives Exchange Limited (NCDEX) as a result of the decline in the supply for the commodity in the major markets. At the NCDEX, mustard seed futures for April 2015 contract closed at Rs. 3,382 per quintal, up by 0.15 per cent, after opening at Rs. 3,375 against the previous closing price of Rs. 3,377. It touched the intra-day high of Rs. 3,394.

India produces 5.5 million MT to7 million MT annually and about 0.15 million MT is retained for sowing and direct consumption as seed which leaves about 4.8-5.1 million MT for crushing and extracting oil.

Barley prices closed higher by 0.9 per cent on Thursday at the National Commodity & Derivatives Exchange Limited (NCDEX) as a result of strong demand from beer and cattle-feed making industries against restricted supply in physical markets. At the NCDEX, barley futures for April 2015 contract closed at Rs. 1,183.5 per quintal, up by 0.9 per cent, after opening at Rs. 1,177 against the previous closing price of Rs. 1,173. It touched the intra-day high of Rs. 1,186.

The consumption demand for Barley in India mainly comes for malt, poultry and animal feed. Barley malt is majorly used for the production of alcoholic beverages in the country.

Maize prices closed higher by 0.86 per cent on Thursday at the National Commodity & Derivatives Exchange Limited (NCDEX) as a result of a rise in the demand from exporters and poultry industries. At the NCDEX, maize futures for March 2015 contract closed at Rs. 1,296 per quintal, up by 0.86 per cent, after opening at Rs. 1,299 against the previous closing price of Rs. 1,285. It touched the intra-day high of Rs. 1,300

USA, China and Brazil are the top three maize producing countries in the world while the prominent exporters of maize are USA, Argentina and Brazil. Chief importers are Japan, EU, Malaysia, Taiwan, Indonesia etc.

Jeera prices closed higher by 2.7 per cent on Thursday at the National Commodity & Derivatives Exchange Limited (NCDEX) as the investors increased their holdings in the commodity in the midst limited arrivals from growing regions. At the NCDEX, jeera futures for March 2015 contract closed at Rs. 14,630 per quintal, up by 2.7 per cent, after opening at Rs. 14,300 against the previous closing price of Rs. 14,245. It touched the intra-day high of Rs. 14,650. Sentiment improved further as a result of reduced domestic supplies in the physical markets and some export enquiries.

Global output of Jeera is around 2.2 lakh MT per year, of which India produces about 1.5 lakh MT per year. India exports Jeera mainly to the US, UK, UAE, Japan, Brazil, Bangladesh, Singapore and many other countries. Other Major exporters are Syria and Turkey.

Zinc futures rose in the domestic market on Thursday as investors and speculators booked fresh positions in the industrial metal as new loan growth in China, the world’s biggest metals consumer, topped estimates, lifting the demand outlook for zinc.

Chinese banks and financial institutions created 1.02 trillion yuan worth of new loans in February, well above the 750 billion yuan expected by analysts. However, a 0.1 per cent drop in industrial output in the 19-member Euro area in January signaled a fragile economic recovery, dimming the demand outlook for zinc, curbing gains in the industrial metal. At the MCX, Zinc futures for March 2015 contract closed at Rs 125.65 per 1 kg, up by 0.31 per cent after opening at Rs 125.20, against the previous closing price of Rs 125.25. It touched the intra-day high of Rs 126.55 till the closing.

Gold futures closed lower in the domestic market on Thursday as an appreciation in the Indian rupee against the US dollar more than offset the gains witnessed in the precious metal in the overseas market. Stronger rupee tends to exert downward pressure on prices of the bullion in the domestic market. However, a firm trend in the overseas market curbed losses in the precious metal as a weaker dollar boosted the appeal of gold as an alternative asset. Weaker greenback makes gold cheaper for those holding other currencies, thus bolstering demand. Bets of an imminent US interest rate hike by the US Federal Reserve were put to rest by a third straight dip in US retail sales last month, signaling slight weakness in the world’s biggest economy, boosting the lure for gold as a store of value. Gold may drop today as a dollar rebound dims appeal.

At the MCX, Gold futures for April 2015 contract closed at Rs 25,655 per 10 gram, down by 0.12 per cent after opening at Rs 25,660, against the previous closing price of Rs 25,685. It touched the intra-day low of Rs 25,562 till the closing.

Natural gas futures plunged in the domestic market on Thursday as investors and speculators exited positions in the energy commodity as mild weather threatens to curb consumption of the heating fuel in the world’s biggest fuel consumer. Weather forecasts called for above normal temperatures in the next two weeks in the US Midwest and South. A polar blast has been followed by warmer than usual weather in the lower 48 states this week. Investors cast aside data which showed that last week’s storage withdrawal was in line with analysts’ estimates. US gas supplies fell 198 billion cubic feet in the week ended March 6, 2015 to 1.512 trillion, against an expected decline of 191 billion cubic feet.

At the MCX, Natural Gas futures for March 2015 contract closed at Rs 172 per 1 kg, down by 3.7 per cent after opening at Rs 177.90, against the previous closing price of Rs 178.60. It touched the intra-day low of Rs 171.50 till the closing.

Government plans to hike import duty on rubber to 25 per cent while a slew of other steps are under way to protect the interest of rubber growers, hit hard by declining prices, Commerce and Industry Minister Nirmala Sitharaman said as per the PTI report. A methodology was also being evolved to monitor the usage of imported rubber to push domestic demand while an expert committee was examining the concerned issues in-depth, she said in Rajya Sabha in response to a calling attention motion on the plight of rubber farmers. A proposal to enhance "the existing import duty on dry forms of natural rubber from the existing 20 per cent or Rs 30 per kg to bound-level duty of 25 per cent, has been forwarded with my recommendation to the Ministry of Finance and is under consideration," Sitharaman said. These measures, she said, would regulate imports and "may have a salutary effect on domestic prices", as she promised enhanced subsidy of Rs 35,000 per hectare, up from existing Rs 25,000, to the growers by the Rubber Board. "The concern among rubber growers caused by the downward movement in domestic prices of rubber has been noted. ... The government has reduced the period of utilisation under advanced licensing scheme for import of rubber from 18 months to six months," Sitharaman said. While motivating the rubber consumers to exhaust stocks and push up demand, the government was also working to evolve methods to monitor usage of rubber imported under advance license to ensure that existing stocks are consumed, she said. Sitharaman said the fall in rubber prices to Rs 118 in November last from Rs 176 in 2012-13 was due to "slump in international consumption" and the resultant decline in global prices. This was aggravated by a relatively low growth in domestic demand for specific forms of natural rubber. To boost the segment, she said, the government intended to expand production as a long-term strategy and was promoting plantation development programmes in non-traditional regions like the North East. "Currently, rubber is produced in 7.57 lakh hectares in the country", she said adding, "During the 12th Plan, an area of 36,300 hectares is proposed to be covered under fresh rubber plantation for which an outlay of Rs 726.99 crore has been provided.