Rains likely to push down soyoil, guarseed prices

WEEKLY COMMODITIES OUTLOOK

Soyoil: Seen down on good rains. Domestic prices are seen declining following good rains in the soybean and groundnut growing regions.

According to the weather forecasts, rains are likely to continue during the first half of this week, thereby keeping prices lower. Spot prices may even go down to Rs 356 per 10 kg level from the current Rs 360-61.

Contrary to the expectations, the imported oil is not selling cheaper than the domestic one despite there being a supply glut.Soy complex prices are likely to remain weak on the Chicago Board of Trade.

Bean prices may fall for the seventh week on expectations that US storage silos will overflow with newly harvested crops coming in, as Hurricane Katrina delays exports from New Orleans, Si Kannan, an analyst with Sharekhan Commodities said.

Gold: Seen up after small correction. The yellow metal is glittering since consumers are likely to cut down their spending due to fuel price rise. With the effects of Katrina still looming large, the US economy may cool off before seeing a strong growth again.

Domestic prices are seen tracking international prices. An expected rise in demand due to the upcoming festival season is also likely to boost the prices. Jewellers are buying the commodity from the international market despite high prices on expectations of a good seasonal demand.

"However, buying is almost nil on Monday following the price rise. We hope it will pick up but certainly the demand this year is seen lower than last year's," said Suresh Hundia, director of Hundia Exports and former president of the Bombay Bullion Association.

Overseas spot prices are likely to touch $455. They had rose to the highest level so far this year at $451.50 an ounce in Asia on Monday since uncertainty prevailed over the US interest rates. Gold is likely to cross $500 by the year end.

The MCX October contract is likely to rise to Rs 6,480 per 10 gm from Friday's closing of Rs 6,408.

However, a small correction is likely, in the domestic as well as overseas markets, before the price rise continue. The correction level in the overseas spot will be till $446 an ounce and the MCX October may touch Rs 6,370-75 per 10 gm.Buy gold on dips for long-term investment.

Guarseed: Seen down on good rains. With good weather forecast for the north west region this week, speculators are playing on the likelihood of rains in Rajasthan's guarseed growing areas, mainly Jodhpur and Bikaner.

This is likely to keep prices down. The price fall is likely to be supported with good rains in the guar-sown areas of Pakistan.India Meteorological Deparment, however, has forecast monsoon's departure from Rajasthan.

After profit bookings, prices are expected to touch new highs since government agencies are not expecting much rains for Rajasthan. The market expects the NCDEX September contract to touch a low of Rs 1,640 per 100 kg if the rains continue. The NCDEX October seed contract ended on Saturday at Rs 1,768.