Crude to trade firm

Crude oil: Firm prices
The cold weather in the USA has lifted crude back above $61 a barrel amid concerns that OPEC might trim production if oil prices continue to fall. The remarks by Bernanke further confirmed that energy inflation is still looming large and posing a threat to the economy. Expect the prices of crude to stay firm and any surprise draw down in the inventory would further support crude.

Bullion: US GDP to give direction
Existing home sales bouncing back saw some profit taking in gold ahead of the Federal Reserve chairman's speech. However, the durable goods numbers dropped and consumer confidence fell, which supported gold from its initial slide. Further, Bernanke’s comments that there was inflationary risk supported the precious metals.

Today, the US Q3 gross domestic product numbers should dictate the market direction. Initial forecasts are dollar positive, but any surprises would see huge volatility in the evening. We continue to reiterate that gold should be accumulated on dips.

Soybean: Bird flu in South Korea
Soybean prices declined sharply on the news of an outbreak of bird flu in South Korea. The outbreak could disrupt Indian soy meal exports in the short term. As per trade estimates, India exported around 600,000 tonne of soy meal to South Korea in 2005-06 (October 2005-September 2006), up from around 204,000 tonne a year ago. The situation would be clearer in the coming days.
Soy oil: External factors at play
Soy oil prices declined in conjunction with soybean prices on reports of an outbreak of the bird flu. The weakness in palm oil futures also added to the decline. The counter saw some profit booking after a huge rally in the last few days. If the weakness in soybean continues then the soy oil prices too could come under pressure.

Mustard: Affected by soy
Mustard prices ended lower in tandem with the prices of soybean and soy oil. The counter too witnessed profit booking after a sharp rally. The demand at higher levels has not been encouraging. NAFED has decreased its selling price by Rs10 to Rs1,870 per quintal. The off take by the processors has also decreased in the last few days.

Wheat: Range-bound
Imported wheat is available in some south Indian states. The total quantity of piled up wheat now stands at 3.5 lakh tonne. Due to the poor stock position the FCI has not been selling wheat to millers since the last couple of months, reducing the supply in the market.