Fundamental Analysis
Guar futures had surged by almost 3.7% during the last week as Metrological department has predicted below normal monsoon for period June to September. However, prices witnessed some profit booking on Tuesday.
Below normal rains coupled with weak advancement of monsoon may support Guar prices to remain firm in the coming days.
Sowing of Guari, which normally takes place between 15th of May and continues till Mid June has been delayed this year. Also, drastic fall in acreage under Guari has been witnessed across North Rajasthan.
Also, it expected that area under Guar might decline in the current season due to shift in acreage to other remunerative crops like Cotton, Moong etc.
Technical Analysis
Guar prices (NCDEX August) settled at Rs. 1,837 per qtl, lower as compared to the Tuesday’s close of Rs. 1,845.
RSI is at 49.2 and is moving sideways. Prices closed below its 5 days and 65 days SMA but above its 20 days SMA indicating sideways to up trend.
Outlook
Guar prices are expected to remain firm on below average monsoon forecast and expected fall in acreage in the upcoming sowing season. Guar futures will take some corrections as prices have surged in the last 3-4 sessions. Overall trend in Guar remains positive due to lower sowing acreage and lower stocks. Any significant decline in the prices should be treated as a good buying opportunity due to strong fundamentals. Expect prices to trade in the range of Rs. 1800-1890 in the current week (August contract).
Courtesy: Angel Commodities
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