Easy trend was witnessed in precious metals on the Mumbai bullion market last week. Despite a small recovery overseas, gold and silver ruled weak due to the absence of demand following 'shradha paksha'.
Traders are keenly awaiting the start of festival season demand. Dassera demand for silver is likely to be fairly good. The advices from upcountry centres is also expected to rise.
Silver has been ruling distinctly weak even piercing the Rs 6,900-mark. Comparatively, standard variety gold has been able to stay above the Rs 5,100-mark.
The turnover in Mumbai has been affected and traders anticipate a decline in volumes as more centres for supplies have opened up. The city had to depend on the supplies from other states due to stringent sales tax and octroi rules.
Gold standard after starting the week at Rs 5,120 fell due to lack of fresh buying support. It slid to Rs 5,105 at the end of the week. Gold 22-carat fluctuated between Rs 4,735 and Rs 4,720. Gold (official) biscuits declined from Rs 59,900 to Rs 59,700. Silver 999 fine, after starting steady at Rs 6,925, dipped to Rs 6,870. It ended the week at Rs 6,880.
Oilseeds: An easy trend in castorseed futures highlighted trading on the Mumbai oilseeds market last week. After the end of the September contract, there was no perceptible bull support for the December contract which gave way on selling pressure.
However, on slightly better Ahmedabad advices, lower levels attracted bear covering which led to a small recovery. Only 10 tonnes of orders were reported for the September contract.
The calculations of bulls that there will be a bad crop may come a cropper looking at the rainfall in Gujarat and the new castorseed offerings being made at sizeable discounts in Andhra Pradesh.
It was indicated that with the start of the receipts of new crop both in Andhra Pradesh and Gujarat, the supply position for the December contract would be very favourable and hence spot houses were keen on hedging as the current prices had been considered higher.
In edible oils, groundnut oil prices rebounded as due to rainfall new crop supplies in Saurashtra were affected. The inflow of groundnut to Maharashtra and other production centres would also be delayed due to the recent rains. However, the downpour in Gujarat would help the standing crop which would turnout to be higher than the earlier expected 14-15 lakh tonnes.
Castorseed September contract lacked activity on the last day as most of the outstanding positions had been settled. The December delivery commenced at Rs 1,132.50 against the previous close of Rs 1,134.
On Monday, the contract touched a high of Rs 1,136. Lack of fresh follow up support affected sentiment and prices plateaued. In view of the better Ahmedabad advices, scattered bear covering ensued.
In edible oils, groundnut oil, after touching the low of Rs 400 recovered on poor supplies to be finally placed at Rs 418. Palmolein was demanded higher at Rs 251 per 10 kg. The supply position was favourable.
Grains: Prices ruled mixed last week on the Mumbai grains market which saw limited turnover. With good rainfall, the prospects for the new kharif crop brightened. Agricultural experts were jubilant and expected a good output for the ninth straight year.
However, wheat inferior varieties continued to be scarce due to the restrictive policy of the Food Corporation of India. The government, however, claimed that the buffer stock is adequate to handle the public distribution system needs. In the open market, prices were higher for Punjab inferior at Rs 675-700 per quintal. At the same time superior Shihori pissi demand was slightly higher at Rs 950-1,200 per quintal.
Activity in rice was subdued. However, sale by the Food Corporation of India in Mumbai continued. Besides, auction rice had been sold around Rs 700-725 and Punjab parmal at Rs 750-875 per quintal. Gujarat-17 was offered at Rs 1,100-1,300 and Kolaba Kolam at Rs 1,400-1,900 per quintal. In coarse grains activity was low. Due to the recent rainfall the bajra standing crop is expected to be damaged and hence stockists were reserved in offering small bajra below Rs 500. Jowar fetched Rs 500-900.
