Crude oil basket eases to $70.35/bbl

NEWS CAPSULES

The country's crude oil basket on Wednesday eased marginally to $70.35 a barrel from $70.56 a day earlier, data from petroleum and natural gas ministry said Thursday.

The Indian crude basket had touched an all-time high of $71.33 Monday. The current price of the Indian basket is above the benchmark of $70 a barrel set by the government for state-owned oil marketing firms to revise prices.

The government has allowed these companies to raise prices if the average monthly Indian crude oil prices cross $70 a barrel. The country's crude basket averaged $70.75 a barrel in July so far, compared with $66.80 in June and $67.29 in May.

The Indian crude basket comprises Oman-Dubai sour grade of crude and Brent dated sweet crude in a 58:42 ratio. Wednesday, Brent crude closed at $72.64 a barrel, while the Dubai and Oman benchmarks were at $68.22 and $69.15, respectively.

NMCE jute futures up on short covering

Early month raw jute contracts rose on National Multi Commodity Exchange Wednesday due to short covering.

However, far month contracts stayed subdued. Sacking bags continued to fall, dealers said. August and September contracts were in much demand on Thursday, a trader at Jute Balers' Association said.

The contracts had seen heavy selling in past few days on expectation of a bumper crop of around 11 million bales this season beginning July. Speculators are now squaring off positions before fresh arrivals start from next month, he said.

August contract touched an intra-day high of Rs 1,220 per 100 kg, after resuming weak at Rs 1,204. September moved between Rs 1,142-1,152.

However, October and November contracts were subdued. Fresh demand for raw jute from mills is also not likely in coming few days as government orders for sacking bags is not expected before September-end, he said.

There were few sacking bag deals and selling pressure in the commodity is likely to continue, a trader at Gunny Trades Association said.

NCDEX cotton futures strong

Opening on a weak note, cotton futures on National Commodity & Derivatives Exchange staged modest recovery on all-round buying, traders said.

A firm spot market and expectation of low rains in areas where sowing is currently on prompted buying support, they said. Fresh buildup of long positions was seen in July contract as traders made brisk purchases at low levels.

Sowing in Maharashtra, Madhya Pradesh and Gujarat was delayed due to late rains and reports suggest it is yet to pick up in parts of Maharashtra, a trader said.

The current estimate is that cotton crop in India in 2006-07 (October-September) would be around previous year's level of 24 million bales and with international prices turning slightly weak prospect of exports from India is quite high, a Mumbai-based trader said.

Domestic demand for quality cotton is still quite high and unless there is report of substantially higher acreage in India, prices will remain firm, he said.

July contract on the exchange touched a low of Rs 1,830.50 per bale in early trade, but rose to a high of Rs 1,841towards the end.

Open interest in the contract increased fourth session running indicating buying support at low levels, a trader said. August contract continued to remain subdued, but prices jumped sharply in limited deals.Spot prices gained marginally on good demand for quality cotton.

Nafed sells 12,000 tn mustard since July 1

The National Agricultural Cooperative Marketing Federation has sold around 12,000 tonne of mustard through its daily quotation process since July 1, a senior official said Thursday.

The mustard was sold at an average price of Rs 1,500-1,540 per 100 kg, the official said. In the last week of June, Nafed sold the commodity at an average price of Rs 1,500-1,535 per 100 kg.

Sources said since the process of stock clearance was started by Nafed in mid-June, it has managed to sell over 75,000 tonnes of mustard seed.

The agency had fixed a target of liquidating around 100,000 tonnes of mustard seed every month starting June to clear its huge stocks of 3.6 million tonnes.

The price fetched by Nafed for the seeds is less than its procurement price of 1,715 rupees per 100 kg, as it is first liquidating last year's stocks with low oil content.

Like last year, this year too, Nafed planned to sell the commodity through daily and weekly tenders.

However, with its daily tenders getting a good response, Nafed decided to discontinue the process of weekly tenders for the time being. Nafed had procured 2.1 million tonne this rabi season.

In 2005, Nafed's daily tenders saw a good response, but the weekly tenders could not take off due to low price quotes. Nafed had to carry over a huge stock of around 1.3-1.5 million tonnes of mustard to the current rabi season.