MUMBAI (Commodity Online): After the profit booking observed for Guar for last few days, Guar started hitting the Upper Circuits yet again as traders expect the exports would again pick up in coming weeks.
High volatility likely to continue due to impositions of additional margins on Buy side.
Low volumes amidst lower trading activities have been reported at these levels even though exports are expected to pick up again in near term.
Lower production prospects, moderate arrivals and any further strength in Dollar are likely to support the market Fundamentals later on though some more corrections in the short term cannot be ruled out.
Traders however expect short term very high volatility to continue due to the recent additional margin impositions on the Buy side. A major profit booking too is not ruled out from some sources.
As per directions from FMC, the position limits of Guarseed and Guargum have been revised details available on NCDEX website.
Lower productions prospects than earlier estimates, overall strength in Dollar aiding exports and reports of lower stocks are likely to support the market sentiments in medium term however.
Anticipations of further rise in exports in coming weeks could aid the uptrend further as per traders.
High demand from China for oil drilling activities have been reported recently thus pushing up the demand for Gum. Arrivals of the new crop from Rajasthan and Haryana continue.
As per First Advanced Estimates of Kharif Crop in Rajasthan, the sowing area is 29.07 lakh hectares compared to 30 lakh ha last year.
Production expected at 11.37 lakh tonnes vs 15.46 lakh tonnes in 2010-11(Directorate of Agriculture, Rajasthan).
Traders estimate that in Har-yana too the sowing area has fallen to 2.15 lakh ha vs 2.56 lakh ha last year.
Production expected at 2 lakh tonnes while in Gujarat, produc-tion estimates at 0.65 lakh tonnes. Better rains in Rajasthan and Gujarat are expected to improve productivity of the crops this year.
Courtesy:Religare Commodities
