Seasonal Trading/Value Buying in Commodities

I see very few members here who trade in commodities or talk about commodities. I hope i get some company in this thread.

From the experience in commodities what i have seen is that for a given commodity we can recognise the time of the year when it touches its high and the time of the year when it touches its low. Basically commodites are all about demand and supply. Again the demand and supply varies on seasons. For example Mentha oil is at its low around may-july. It peaks between dec and feb. What i am aiming at is buying in june or july and rolling over till january. If we look at the price range it would be easy to get mentha oil at Rs 480 (sep contract) in june then in september to roll over to december for a small cost. Over all including brokerage our cost would be around 520. In december january it touches close to 900. So with an investment of Rs 45k (including some extra money for unpredictable movements) we could make upto Rs 1,44,000 in 6 months. Again in feb we can reverse our trade and go short and cover in May. The point supporting this theory is that never can anything become free of cost. There is inflation of 5% so the prices would always rise over a long period (25 years). Its like infosys today, we all know that it will cross Rs 2500 ( currently at 1980), its just that we need to buy and have the potential to hold it. At the end of the day the buy should be a value for money.

I tried this in Sugar recently. Sugar was at 1280. My dad being a sugar broker and me closly following it for like 15 years its very straight forward that its a value buy. It is very difficult for sugar to go below 1200 as it would lead to a huge loss to the industry and the millers would stop selling. This would create supply issues. Hence the demand would overcome the supply. Sugar moved to 1380 and i sold it making a profit of 10k on a investment of 10k in 2 months. Sugar is still a good buy as its peak is generally during diwali thats when we all eat sweets the most.

Another possible candidate is Gur. Basically it drops a lot during november -december as there is new production output at that time. Basically by september october it peaks.

The basic aim of this thread is to identify the season of various commodities and the right time to buy them and hold for sometime to attain good returns. I again hope i have some company.

Excellent, me very much inetersted.

Although i just do Equities and Fno ddefinitely im interested.

saleem ji!

i am also interested ..chalo ..ap hi sae seek na shuru karaengae hum.

Thank you

suba

Sir

Your article is very interesting and informative, please post more.


Thank you

Subbu

hai saleem
your article is very much interseted and nice analysis,i dont know this type of analysis so l lost lot of money in this commodities segement by wrong guidance
i think with ur analysis i can earn,keep giving tips to us.
ur analysis thinking is nice,keep doing
Thank you
kishore kkc

Dear Guys,

Better take care while doing cash and CARRY for price appreciation. CARRY can have a very high cost attached. Check the premium / discount between various months ( badla ) to be incurred when rolling over the contracts. Pls. check previous history.

I have been doing it, its a friendly advise.

rgrds,

Best Deal VKM

nice advice boss this is one of the good method

any body can give such advice for gold
some season is there when gold is low or high ??
pls help