Fundamental Analysis

Shift by the farmers to other crops such as pulses and bajra due to increase in the MSP and high profits earned in the last year will provide support to the price if significant demand is placed from the overseas buyers.

Lower production of guar in the previous year has led availability of the guar and guargum to be scarce. This will control prices from falling sharply down.

The sowing of guar commences in July following the first showers of monsoon in June. Rajasthan contributes around 50% of the total production while Haryana has a share of 25% and remaining 25% comes from Gujarat, Punjab, Madhya Pradesh and Uttar Pradesh. Thus, in the short term prices will takes cues from the advancement of rains in the interior parts of the nation and demand from the overseas buyers for guar gum.

Technical Analysis

Prices on daily charts closed above its 10-days but below its 20-days EMA, which indicates sideways trend.

14-days RSI is at 49.6 and is in the neutral region.

Outlook

Guar seed futures are likely to trade in sideways to up manner due to improved buying at lower levels. Short term prices will take cues from the advancement of monsoon into the interior parts of India. In the medium to long term prices will depend on the sowing progress of Guar and demand from the overseas buyers for guar gum.

Courtesy: Angel Commodities

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