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  • KARVY COMTRADE LIMITEDREGISTERED OFFICE: Karvy House, 46, Avenue 4, Street No.1, Banjara Hills, Hyderabad, Telangana-500034

    CORPORATE OFFICE: Karvy Millennium, 9th Floor, Plot No.31, Financial District, Nanakramguda, Gachibowli, Hyderabad, Telangana 500032 Contact Us: Toll Free No: 1800-425-1900

    SEBI REGISTRATION NO: INZ00007335 | MCX MEMBERSHIP ID: 10775 | NCDEX MEMBERSHIP ID: 00236 | NMCE MEMBERSHIP ID: CL0268 |

    INVESTMENT IN SECURITIES MARKET ARE SUBJECT TO MARKET RISKS, READ ALL RELATED DOCUMENTS CAREFULLY BEFORE INVESTING

  • Annual Commodity Report 2017 3

    Preface

    Dear Readers

    At the beginning of the year 2017, it gives me immense pleasure to release 9th edition of Karvy Comtrades Annual Commodity Report 2017. In the last eight years, this report has received an overwhelming response from the readers including academicians, traders, investors, market participants and other stakeholders who are engaged in the commodity trade either directly or indirectly. This report offers a comprehensive outlook on all the commodities traded on the Indian exchanges for the year 2017, which will guide the market participants to maximize their profits. The outlook presented in the report has been formulated infusing the fundamental and technical analysis. We believe this report would provide you a deeper understanding of the commodity markets and facilitate knowledge-based investment for the year 2017.

    The year 2016 was a silver lining in the commodity market as most of the commodities gave a positive return shrugging off earlier years of negative returns. Base metals sector was the best performing sector as the prices of few metals rallied to multi year highs due to strong economic growth across the world. Besides, the world market witnessed few important events like Britain exiting the European Union, US Presidential Election as well as demonetization of high value cur-rency by the Indian government. All these events had a ripple effect on the commodities in the immediate short term.

    The report starts with overall commodity market outlook for 2017 taking the events that hap-pened in 2016 as a benchmark. This report covers all the major commodities traded on Indian ex-change, which are having maximum trade participation. Sectors covered in this report are bullion, energy, base metals, oilseeds, spices, softs and cereals.

    While preparing the report, all the macro and micro factors affecting the market movement are taken into consideration in order to derive outlook in terms of direction of the market as well as entry and exit levels for the year 2017. Further, the report is prepared in a most simple man-ner so that all sections of the trading fraternity can benefit from understanding the report. In order to attract the readers attention, we have made this report statistics driven by using tables, graphs, pie-charts etc. Each commodity starts with the review of previous year followed by an in-depth analysis of various fundamental factors and concludes with long term outlook. Further, to strengthen the fundamental outlook, advanced technical analysis has been carried out to de-termine the entry exit levels for each commodity.

    Finally, the success of this report goes to all research analysts who have worked extensively to come out with a long term outlook and make this report a grand success and insightful. I would also like to acknowledge the efforts put in by Mr. Vijayendra Kumar in designing this report.

    I wish all our readers a prosperous New Year with peace and happiness in your personal and professional endeavours and to maximize your wealth.

    A Very Happy New Year 2017 from Karvy Comtrade Ltd.

    Thank you and good luck.

    Veeresh HiremathHead Commodity Research

  • Annual Commodity Report 2017 4

    Note: The data in all charts and tables have been sourced from Bloomberg and KCTL Research, unless otherwise indicated

    Contents

    Best Recommendations 2017 5

    Major Events 2016 6

    Gainers and Losers - 2016 9

    Statistics 10

    Commodity Market Outlook 11

    Precious MetalsGold: An Investors Paradise 14

    Silver: Watch out for the Dark Horse 21

    EnergyCrude Oil: Driven by the historic deal 28

    Natural gas: Spark might continue 33

    Base Metals

    Aluminum: Tough road ahead 38

    Copper: Winding shall get tighten 41

    Nickel: Stuck among producers 44

    Lead:The accumulated power 47

    Zinc: The glow for steel shall drive 50

    Agri Commodities

    Oil & Oil Seeds 53

    Soybean: Finally the dawn after long night 54

    Soyoil: Bears on the prowl, May follow the bear 57

    RM Seed: Bumper harvest may set the bears to loose 61

    CPO: May regain its Glory 64

    Spices 67

    Turmeric: Time for the fresh entry 67

    Jeera: Bulls to ride the market 70

    Cardamom: Bullish all the way 73

    Dhaniya: Hopes of Revival 76

    Others 79

    Guar Complex: On revival path 79

    Cotton: A stonger fibre 82

    Sugar: Sweeten your portfolio 86

    Maize: Record sowing couldnt feed the output 89

    Wheat: Stronger demand to drive the market 92

    Mentha Oil: A mixed bag for the year ahead 95

    Other Commodity Recommendations 97

  • Annual Commodity Report 2017 5

    DisclaimerThe report contains the opinions of the author that are not to be construed as investment advice. The author, directors and other employees of Karvy, and its affiliates, cannot be held responsible for the accuracy of the information presented herein or for the results of the positions taken based on the opinions expressed above. The above-mentioned opinions are based on the information which is believed to be accurate

    and no assurance can be given for the accuracy of this information. There is risk of loss in trading in derivatives. The author, directors and other employees of Karvy and its affiliates cannot be held responsible for any losses in trading.

    Commodity derivatives trading involve substantial risk. The valuation of the underlying may fluctuate, and as a result, clients may lose their entire original investment. In no event should the content of this research report be construed as an express or an implied promise, guarantee or implication by, or from, Karvy Comtrade that you will profit or that losses can, or will be, limited in any manner whatsoever. Past results are no indication of future performance. The information provided in this report is intended solely for informative purposes and is obtained from

    sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.

    We do not offer any sort of portfolio advisory, portfolio management, or investment advisory services. The reports are only for information pur-poses and not to be construed as investment advice. For a detailed disclaimer please go to following URLs:

    http://karvycommodities.com/disclaimer; http://karvycommodities.com/risk-disclaimerINVESTMENT IN SECURITIES MARKET ARE SUBJECT TO MARKET RISKS, READ ALL RELATED DOCUMENTS CAREFULLY BEFORE INVESTING

    Note: These calls are indicative in nature as they reflect the likely movement in future contracts based on their respective spot price direction. For example, in Comex gold futures, the benchmark is international spot gold. Especially for agricultural com-modities, recommendations may differ based on their seasonal pattern wherein wide swings could be seen in select commodity contracts depending on their sowing and harvesting.

    Best Recommendations 2017

    Commodity Exchange Action Entry Target SL

    GoldComex Buy 1100-1120 1440/1662 950

    MCX Buy 26350-26450 34500/39850 22250

    AluminiumLME Sell 1960-1980 1540 2220

    MCX Sell 144-146 105 164

    Refined Soy Oil NCDEXSell

    760-770 640 880

    810-820

    Buy 630-640 730 570

    RM Seed NCDEX Buy3600-3620

    4850/52503000

    3300-3320

    Guar Seed NCDEX Buy3000-3020

    4100/4450 22002600-2620

    Jeera NCDEX Buy15800-16200

    20000 1150013600-14000

    Mentha Oil MCXBuy 925-945 1180/1300 730

    Sell 1300-1320 960 1470

    Crude Oil

    NYMEX Buy43-44

    68/78 2533-34

    MCX Buy2900-2950

    4650/5500 17502250-2300

  • Annual Commodity Report 2017 6

    Major Events 2016

    September 2016Surgical StrikeSeven terror launch pads in the Pakistan-occupied Kash-mir were destroyed by the Indian Army on the night of September 28 and 29, when soldiers crossed the Line of Control and carried out swift operation. The surgical strike was a result of tough decision making by the Narendra Modi-led BJP government at the Centre and was widely appreciated by the people. The Army said the operation was carried out based on intelligence reports.

    Hurricane MathewHurricane Matthew was a tropical cyclone which originated in the Caribbean Sea in December and caused mass devastation in the Haiti, United States of America, Cuba, Dominic Republic and parts of South America. The cyclone claimed more than 800 lives in United States; 1000 died in Haiti.

    February 2016North Korea Launches a Satellite into OrbitNorth Korea has apparently launched a satellite to orbit, in a move that the United States and other nations quickly con-demned as an attempt to further develop a prohibited long-range missile capability.

    (www.space.com)

    November 2016

    January 2016

    Zika Virus Spread Acr

    oss US

    In the year 2016, th

    e World

    Health Organizatio

    n (WHO) had

    declared the Zika v

    irus as global

    risk factor. The viru

    s attacks of

    the fetus and resu

    lts into birth

    of infants with sma

    ll head. This

    virus had its large

    impact

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