Jeera prices extended the down trend with huge volatility during the week ended on Jan. 28th. Futures started the week on positive note on lower level buying. However, later on futures turned bearish on profit booking at higher levels.
Sudden rise in arrivals across the spot markets further added to the down side. Different onions about production estimates created huge volatility in the prices during the week.
Reports of fresh crop arrival in small pockets of Gujarat also weighed on sentiments and futures ended the week on negative note.
Outlook
Jeera prices are projected to trade lower on extended correction during the week. Rise in arrivals across the major spot markets along with reports of fresh arrivals of early sown crop might also weigh on prices.
However, Prevailing mixed sentiments about production estimates might create huge volatility later in the week. However, short covering on huge losses can not be over ruled during the week.
Factors to watch out
Spot market of Unjha arrivals were in the range of 4500-8000 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 7471 tonnes as on January 25, 2011
As per Spices Board data, international price of jeera in New York market declined marginally to $3.86 per kg during the week ended January 20th 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 declined. 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.
