Fresh selling seen in Mentha Oil, open interest up by 10.56%
Commodity Online | May 27 2016
UPDATED 13:55:36 IST

MCX Mentha Oil likely to move in a range of 1259.7-1295.5

MCX Aluminium may trade between 130.5-132.3 levels

MCX Nickel under long liquidation; Support seen at 1091.2

MCX Zinc under fresh selling; Resistance seen at 192.7

MCX Copper under fresh selling; Support seen at 435.2


Mentha oil on MCX settled down by -0.9% at 861.4 on account of increased arrivals in the physical market from major producing belts in Uttar Pradesh. Sentiments remain weak as this season the farmers are seen getting more interested in sowing mentha in the major growing area of Barabanki. Markets had remained weak for quite sometime from lack of demand amidst reports of higher sowing activities.

The preliminary mandi source suggests that production of menthol is likely to be around 34-35000 tonnes during 2016-17 as compared to 32000 tonnes in 2015-16. While some sources estimate that total area under Mentha planting has dropped by 25% to 1.70 lakh ha this season resulting into a proportionate fall in Mentha oil production this year. However a pick up in sowing over last few weeks have ensured prices falling for the commodity, as low demand further pressurized market sentiments.

As per latest reports Mentha Oil export in 2014-15 has surpassed targeted 21000 tons by 23% at 25750 tons. Export in 2013-14 was 24500 tons. Higher carryover stocks and lack of strong demand have prevented strong upside movement till now. At Sambhal market total arrivals are at 60 Drums(1-drum=180kg), steady as against previous day’s arrival. At Rampur market total arrivals are at 5 Drums(1-drum=180kg), steady as against previous day’s arrival.

Mentha oil spot at Sambhal closed at 1008.40 per 1kg. Spot prices is down by Rs.-5.50/-.Technically market is under fresh selling as market has witnessed gain in open interest by 10.56% to settled at 2922 while prices down -7.8 rupee, now Mentha oil is getting support at 858 and below same could see a test of 854.5 level, and resistance is now likely to be seen at 867.5, a move above could see prices testing 873.5.

Trading Ideas:
--Mentha oil trading range for the day is 854.5-873.5.
--Mentha oil spot at Sambhal closed at 1008.40 per 1kg. Spot prices is down by Rs.-5.50/-.
--Mentha oil dropped on account of increased arrivals in the physical market from major producing belts in Uttar Pradesh.
--Sentiments remain weak as this season the farmers are seen getting more interested in sowing mentha.
--Markets had remained weak for quite sometime from lack of demand amidst reports of higher sowing activities.

Courtesy: Kedia Commodities
 
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