Crude oil, plunged in the domestic market on Tuesday

Market News for Crude oil, plunged in the domestic market on Tuesday as investors and speculators exited positions in the energy commodity tracking a weak trend in the overseas market as a stronger dollar, which surged to multi-year highs curbed the demand for the fuel as an alternative asset. Stronger greenback makes oil more expensive for those holding other currencies, thus dimming demand. he dollar surged on expectations of a US rate hike, calls for which got louder after US job openings rose to a 14-year high in January while small business confidence ticked higher last month, signaling a pickup in the world’s biggest economy. Job openings rose 2.5 per cent to the highest level since January 2001 or to nearly 5 million in January 2015. The gauge measuring US small business confidence rose to 98 in February from 97.9 in the previous month. Meanwhile, Saudi King Salman said the Saudi Kingdom will continue with oil and gas exploration despite a price slump, signaling oversupply concerns. Investors cast aside a drop in US crude supplies last week, as stockpiles fell 400,000 barrels. Oil may extend a decline today as EIA data shows a record build-up in inventories. At the MCX, Crude oil futures, for the March 2015 contract, closed at Rs 3,061 per barrel, down by 3.22 per cent, after opening at Rs 3,166, against the previous close price of Rs 3,163. It touched an intraday low of Rs 3,052 till the closing.

Chana prices closed lower by 0.3 per cent on Tuesday at the National Commodity & Derivatives Exchange Limited (NCDEX) as a result of the steady sowing progress of pulses along with high supplies in major producing states. At the NCDEX, chana futures for April 2015 contract closed at Rs. 3,655 per quintal, down by 0.3 per cent, after opening at Rs. 3,668 against the previous closing price of Rs. 3,666. It touched the intra-day low of Rs. 3,627. 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.

Barley prices closed higher by 0.34 per cent on Tuesday 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. 1,171.5 per quintal, up by 0.34 per cent, after opening at Rs. 1,170 against the previous closing price of Rs. 1,167.5. It touched the intra-day high of Rs. 1,172. 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.

Mustard seed prices closed higher by 0.59 per cent on Tuesday 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. 3,383 per quintal, up by 0.59 per cent, after opening at Rs. 3,357 against the previous closing price of Rs. 3,363. It touched the intra-day high of Rs. 3,385. 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.

Gold futures closed lower in the domestic market on Tuesday as investor and speculators exited positions in the precious metal tracking a weak trend in the overseas market as the US dollar soared to multi-year highs amid expectations of a sooner than expected rate hike, curbing the demand for the fuel as an alternative asset. Stronger greenback makes oil more expensive for those holding other currencies, thus dimming demand. Prospects of an imminent interest rate lift-off have also dimmed the appeal of the yellow metal as a store of value. Calls for a rate hike have got louder following Friday’s payrolls data which showed a twelfth straight month of job gains topping the 200K level.

Gold may extend a decline today as caution persists ahead of key data this week including retail sales, consumer sentiment, industrial production and jobless claims which may signal further momentum in the world’s biggest economy, likely forcing the Fed to bring forward its timeline for an interest rate lift-off. At the MCX, Gold futures for April 2015 contract closed at Rs 25,919 per 10 gram, down by 0.40 per cent after opening at Rs 25,962, against the previous closing price of Rs 26,024. It touched the intra-day low of Rs 25,780 till the closing.

Natural Gas futures rebounded in the domestic and overseas market on Tuesday as the sharp retreat in prices in the previous session offered good bargain buying opportunity in the fuel at existing levels. Prices plummeted nearly 5 per cent on Monday amid speculation that waning winter weather in the US, the world’s biggest consumer of the fuel may crimp gas-fired heating demand. At the MCX, Natural Gas futures for March 2015 contract closed at Rs 172.40 per 1 kg, up by 1.35 per cent after opening at Rs 170.80, against the previous closing price of Rs 170.10. It touched the intra-day high of Rs 173.50 till the closing.

Zinc futures plunged in the domestic market on Tuesday as investors and speculators exited positions in the industrial metal amid weak physical demand for zinc in the domestic spot market. China’s factory gate deflation deepened in February as producer prices tumbled 4.8 per cent, year on year, while consumer inflation at 1.4 per cent remained well below the 3 per cent target, signaling weak underlying demand in the world’s biggest metals consumer, clouding the demand outlook for industrial metals. At the MCX, Zinc futures for March 2015 contract closed at Rs 126.65 per 1 kg, down by 1.29 per cent after opening at Rs 127.85, against the previous closing price of Rs 128.30. It touched the intra-day low of Rs 126.45 till the closing.

Maize prices ended lower by 0.15 per cent on Tuesday at the National Commodity & Derivatives Exchange Limited (NCDEX) as a result of heavy selling activity by the traders on account of higher global supplies and weak offtakes from the local buyers. At the NCDEX, maize futures for March 2015 contract closed at Rs. 1,289 per quintal, down by 0.15 per cent, after opening at Rs. 1,273 against the previous closing price of Rs. 1,291. It touched the intra-day low of Rs. 1,261. Sentiment weakened further as a result of a decline in the demand for the commodity from bio-fuel making industries tracking the weak global markets. 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 0.07 per cent on Tuesday 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 April 2015 contract closed at Rs. 14,970 per quintal, up by 0.07 per cent, after opening at Rs. 14,985 against the previous closing price of Rs. 14,960. It touched the intra-day high of Rs. 15,080. 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.