Fundamental Analysis

NCDEX July Mustard seed futures closed slightly higher on improvement from millers due to higher prices of other edible oils on Wednesday.

However, weak fundamentals of oilseeds may drag the prices lower in the medium term.

Domestic Kharif oilseeds area so far been covered on 0.27 lakh hectares against 0.47 lakh hectares during corresponding period a year ago, as on May 28, 2010.

The area under Groundnut Seed is reported down at 0.075 lakh hectares against 0.100 lakh hectares a year ago and Sunflower sowing is reported steady at 1.0 lh in the corresponding period last year.

Technical Analysis

Prices closed above its 10 Day & its 20 Day EMA, which indicates bullish market sentiments.

14-Day RSI is at 58.15, which is in neutral zone.

Outlook

Mustard seed prices are expected to trade slightly higher on account of short covering and firmness in other oilseeds and edible oils (for short term). In the long term, it is expected to trade lower on account of higher global oilseeds output and huge import of edible oils may provide support to bears.

Courtesy: Angel Commodities

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