5 Best Commodity Market Ideas

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5 Best Commodity Market ideas

• Investmentz.com

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(No Transcript)
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What are commodity markets?

• Commodity markets are a little different in terms
  of trading from traditional equity markets.
• A commodity market is a market that trades in
  primary economic sector rather than manufactured
  products.
• Soft commodities are agricultural products such
  as wheat, coffee, cocoa, fruit and sugar.
• Hard commodities are mined, such as gold and oil.

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5 best commodity market ideas that can work in
India

• Cautious to negative on MCX crude
• Uncertainty factors could help MCX gold
• Using bounces-to-sell strategy for copper might
  help
• Going short-term negative on MCX zinc could be a
  good option
• Long trade on NCDEX cumin on shortfall in supply
  could be a good option

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Cautious to negative on MCX crude

• OPEC is finding it increasingly difficult to
  influence crude prices, which means that MCX
  crude could come under pressure.
• Moreover, Russia has joined the OPEC consortium
  in terms of cuts in crude supply.
• However, the US appears to enjoy a few clear
  distinctive advantages in terms of expansion in
  crude supply.
• Further, Trump has already withdrawn from the
  Paris Climate Agreement, which opens significant
  opportunities for the US for undertaking
  substantial expansion of its shale capacity.
• Thus, going cautious to negative on MCX crude.

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Uncertainty factors could help MCX gold

• The World Gold Council has announced that the
  gold demand for 2017 will not be substantially
  more than the previous year.
• Although India and China are the highest
  consumers of gold, gold prices will not be driven
  by consumption demand.
• Moreover, volatility in North Korea and Middle
  East coupled with other global factors could
  influence the direction gold prices takes.
• All these uncertainty factors could help MCX
  gold.

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Using bounces-to-sell strategy for copper might
help

• The fact that copper has corrected for two weeks
  on-the-trot gives it a weak outlook.
• Thus, waiting for a bounce in price to sell
  could be a good strategy.
• Moodys recently downgrading China doesnt help
  copper prices either, since China contributes
  more than half of global copper demand.

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Going short-term negative on MCX zinc could be a
good option

• Owing to environmental inspections, many zinc
  mines in the Hunan province of China were shut
  down. This led to subdued supply of zinc.
• Post completion of inspections, zinc supplies
  have started flooding the markets, which has
  brought prices under pressure as well.
• Moreover, strength of the US Dollar will weigh on
  MCX Zinc. Thus, going short-term negative on MCX
  zinc could be a good option

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Long trade on NCDEX cumin on shortfall in supply
could be a good option

• With more than 70 of the worlds supply of
  cumin, India is the worlds largest producer of
  cumin.
• Other cumin producer such as Syria and Turkey are
  much smaller. Exports of cumin in India are
  expected to remain buoyant despite higher prices
  of the commodity.
• The commodity saw decent open interest gains,
  which again indicate towards pricing heading
  upwards. Therefore, long trade on NCDEX cumin on
  shortfall in supply could be a good option.

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