Fundamental Analysis
Expectations of below normal monsoon and thereby firm sentiments in the Pulses segment have supported Chana prices in the initial day of the last week. Prices continued to trade higher in the current week.
Delayed monsoon has affected sowing of other Pulses like Tur and thus Tur prices have surged in the past few weeks. However, the prices of the main substitute of Chana, i.e. Yellow Peas have remained weak due to sluggish demand and huge imports.
Thus, Chana prices in the short term will remain range bound. Huge stocks at exchange warehouses will pressures the prices at the time of expiry of the July contract.
Technical Analysis
Chana prices (NCDEX August Contract) settled at Rs. 2252 per qtl higher as compared to 2214 levels on the previous day.
Chana contract closed above its 5 days SMA, 20 days and 65 days SMA, indicating an uptrend.
Outlook
Chana futures are likely to trade rangebound in the current week due to improved demand amidst sufficient supplies. Firm sentiments across the Pulses segment will support the prices in the coming weeks. In the medium term prices are likely to trade in the range of Rs. 2100-2300 per qtl (August contract). Buying on dips is advisable from the medium term perspective.
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