Gold futures on Shanghai exchange
The Shanghai Futures Exchange has announced that it will launch trading in gold futures on January 9। One lot is equivalent to 1,000 grams, according to an exchange statement। The China Securities Regulatory Commission approved the gold futures trading on the SFE, a statement posted on its website said on Friday। The launch of gold futures on the SFE would add to the hedging options for gold producers against the fluctuating global market, analysts said. The Shanghai Futures Exchange, one of China's three commodities futures exchanges, now trades copper, aluminium, zinc, natural rubber, and fuel oil futures. It also currently trades spot gold and spot-deferred gold.

Cardamom Strategy
A crop loss of over 30% has been estimated this season.
Arrivals are half of what used to be same period last year.
Markets appear to be long term bullish
Exports have been good and thus demand for 7 mm and above grade will be good.
Auction prices on Sunday maintained the bullish tone, on low arrivals and upcountry demand .

Cardamom Jan
Strategy 1: Buy above 629 for targets of 634, 637 s/l 626.
Startegy 2: Sell only below 622 for targets of 617, 614 s/l 625।

Guar trades awaits revival of export demand
Guar continues to trade weak with subdued export demand and continuing supplies keeping the prices on the softer side. The rupee’s appreciation and the EU contamination issue hurt activities on the export front. Meanwhile, expectations of export demand improving arose after the European Union sent its recommendation to the Shellac and Forest Products Export Promotion Council that Indian manufacturers must separate production and processing of food and industrial grade gum. While this is seen increasing the costs for small producers, those having separate facilities are not likely to be affected. It would be interesting to see if small processors accept the EU recommendation or they shift focus to the other markets. As exports to Europe account for only 8-10 per cent of total guar exports, they are unlikely to be severely affected. Meanwhile, activities on the export front are expected to improve from the first week of January, which might give some boost to the subdued guar market. Thus, prices may remain range bound until export demand improves until when they are likely to stay range-bound. Guar futures also traded weak in conjunction with physical markets during the holiday-shortened week though both volume and open interest improved slightly.

PRICE DRIVERS:
§ Steady arrivals continues
§ EU asks Indian manufacturers to separate processing of industrial and food grade guar gum
§ Exports expected to gather momentum in early January
§ Stockists buying cautiously
§ Strong rupee hurting exporters’ margins
§ Lower production expected in Pakistan
§ Lower availability of quality seeds this year

OUTLOOK:
Short Term (1 Week): Steady to slightly firm on expected improvement in export demand
Medium Term (1 Month): Slightly firm on dwindling supplies and likely export demand
Long Term (3 Months): Firm as stocks have entered stronger hands and due to offseason

Guar seed (MCX February Contract)
Support-1 1605 Support-2 1595
Resistance-1 1722 Resistance-2 1770

Guar seed (NCDEX March Contract)
Support-1 1690 Support-2 1675
Resistance-1 1762 Resistance-2 1777
Strategy: Buy on major dips

Little news keeps sugar steady to weak
Spot sugar traded steady to weak on subdued activity, with little physical demand present. Observers say the unsold FSQ for December is likely to be carried over to January. The centre’s move on extending the sugar export subsidy by another year supported sentiments. But, not much is seen happening on the export front as the crop damage in China–a potential market–is seen minimal, However, Fiji will be importing 25,000 tonnes to bridge shortfall in its domestic production, and this could boost Indian exports. Also, the government will pay around Rs 8.8 billion in reimbursements to mills from the sugar development fund and it may extend the validity period of buffer stocks by one more year. On the production front, sugar output estimates have been lowered to the previous season’s level of 28 MMT due to delay in crushing in UP and bad weather. India's sugar surplus in the crop year ending October is expected to swell to around 16 million tonnes. Thus, sugar prices are not likely to recover till 2009, given the glut situation. NCDEX sugar futures closed higher after trading steady to slightly weak, with open interest and volume declining as compared to the previous week.

PRICE DRIVERS:
· Sugarcane output estimate lowered to last year’s 28 MMT
· Crushing in full swing in the mills of Maharashtra and UP
· Diversion of more cane to gur industry
· Farmers diverting to more remunerative crops
· Govt to extend export incentives to mills
· Domestic and global glut situation in sugar

OUTLOOK:
Short Term (1 Week): Steady to slightly firm on extension of export incentives for another year.
Medium Term (1 Month): Steady to slightly firm on lowered production estimates amid higher supply due to ongoing crushing.
Long Term (3 Months): Likely to gradually edge up on steady exports amid continuing global glut.

Sugar (NCDEX January Contract)
Support-1 1296 Support-2 1281
Resistance-1 1353 Resistance-2 1368
Strategy: Buy on dips towards supports

Potato bearish as fresh arrivals pick up
Potato ruled bearish during the week ending Friday as arrivals of fresh potato picked up. Other bearish factor were lower rates of other winter vegetables, which suppressed demand for potato. Besides, rabi sowing of potato is increasing in UP, West Bengal, Bihar and other northern parts. Most of the land under potato has been sown in the northern region while over 90 per cent of the sowing is complete in West Bengal. In Punjab, late blight has affected field potato in some pockets. Traders said the current weather is not favourable in parts of West Bengal and worries of late blight prevail among the growers. Potato in North Indian markets traded down and was quoted at Rs 550-600/quintal in Agra. In Bengal’s Tarkeswar and Burdwan markets, potato quoted at Rs 750-800/quintal and Rs 720-800/quintal, respectively. In Meerut, around 1,500-1,800 bags of new potato arrived into the market. Potato prices were down in Delhi also and prevailed at Rs 450-550/quintal on improved arrivals from Punjab, HP and Haryana. On the MCX, potato Agra futures maintained a downward trend during the week amidst selling interest arising from a weak spot market. However, Potato Tarkeshwar March contract traded rangebound to slightly down.

PRICE DRIVERS:
Increasing arrivals of fresh early new variety of potato
Moderate demand from the consumers
Good sowing progress and increased acreage
Lower prices of other winter green vegetables
Late blight concerns in Punjab, Bengal due to weather

OUTLOOK:
Short Term (1 Week): Slightly weak on increasing arrivals of fresh potato in domestic markets.
Medium Term (1 Month): Weakon expectation higher production and higher arrivals.
Long Term (3 Months): Likely to recover on expectation of higher demand from the stockists, industries and neighbouring countries.

Potato Agra (MCX March Contract)
Support-1 500 Support-2 490
Resistance-1 522 Resistance-2 532

Potato Tarkeshwar (MCX March Contract)
Support-1 440 Support-2 430
Resistance-1 451 Resistance-2 461
Strategy: Sell on rallies towards resistances.