Splendid Bull Run was seen in RMseed futures market during July on good buying support both in physical as well as futures market. Physical market arrivals in the major mandis of Rajasthan and Madhya Pradesh declined significantly during July month amidst increased demand.

Major decline in arrivals was seen in the Rajasthan where arrivals reduced more than 50 % during July. Prices in the physical market rose nearly 5­6 percent while futures market prices rose nearly 8 % during July month.

There was a significant rise in the RMseed DOC prices in the physical market on improve demand. In fact whole oilseeds complex witnessed a positive movement during July month. All India arrivals also declined nearly 25 % during the same period.

In fact, a very good positive movement was seen in whole oilseeds complex during July month. A host of factors is responsible for this sudden rise in prices. First, prices fell enough during past and there was little scope of further fall, second, delay in the monsoon activities in the Madhya Pradesh and Rajasthan region prompted traders to add risk premium to the market and good buying support was seen on lower levels.

In the international market as well, drought in the Russia, weather concerns in the Canada and US added to the bullish undertone of the soybean and canola prices. Further India government also reduced RM seed production estimates during its forth advanced estimates. It pegged RM seed production for the year 2009­10 at 6.41 MMT as compared to the 7.20 MMT during 2008­09.

That also served as a bullish factor for the market. However traders still believe that RM seed production was hardly near 5.5 MMT during 2009­10. We expect that positive trend would continue in RM seed prices in near future. Stay in buy side and utilize any sharp fall if seen in to a fresh buying opportunity.

Courtesy: Religare Commodities

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