Jeera prices witnessed huge volatility on heavy speculative activities during the week ended on Jan. 21st. Futures started the week on positive note on short covering on previous week’s losses.
However, data released by Gujarat Govt. showed further increase in acreage which pulled down the prices drastically.
However, later on prices recovered on declining arrivals across the spot markets. However, overall trend remained very volatile on mixed reports from traders. However, overall trend remained down side biased and futures ended in red.
Outlook
Jeera prices are projected to continue the volatile movement during next week. Declining arrivals across the major spot markets might also support the prices.
However, Prevailing mixed sentiments among the traders might support the prices. According to trade sources, some traders are expecting production might fall to 25 lakh bags due to poor seed germination while others are still anticipating that production will remain higher due to rise in acreage. Therefore this mixed news might create huge volatility at spot and futures both.
Factors to watch out
Spot market of Unjha arrivals in the range of 3000-4500 bags (1 bag= 60 Kg.)
As per data released by Spices board, during Apr-Nov, 2011 Jeera export from India were reported up by 28% to 26,500 tonnes against the same period last year
Sowing Data In Gujarat cumin seed sowing reported around 2.82 lakh hectares till 27th December as compared to the 2.38 lakh hectares in the last year
NCDEX accredited warehouse stocks were at 8279 tonnes as on January 19, 2011
As per Spices Board data, international price of jeera in New York market remained stable to $3.92 per kg during the week ended January 13th 2011 however, remained higher against $3.64 per kg in the same period last year
Derivative Analysis
The NCDEX jeera February contract prices, volumes and open interest have increased. It is a good indication that the price decline is being caused by disgruntled long position holders being forced to liquidate their positions.
Technicians view this scenario as a strong position technically because the downtrend will end as all the sellers have sold their positions, creating fresh buying opportunity at lower levels.
Courtesy: Karvy Commtrade Ltd.
