NCDEX Chana under fresh buying; Resistance seen at 4103
Commodity Online | May 21 2020
UPDATED 12:10:22 IST

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Technically Chana market is under fresh buying as market has witnessed gain in open interest by 0.2% to settled at 30180 while prices up 7 rupees.

Now NCDEX Chana is getting support at 4076 and below same could see a test of 4064 levels, and resistance is now likely to be seen at 4103, a move above could see prices testing 4118.

Chana yesterday settled up by 0.17% at 4088 amid severe shortage in supply of raw cotton amid the nationwide lockdown.

Production of cotton oilcake has been temporary halted as the crushing units in the major producing states are not functioning because of the lockdown.

Coupled with the supply shortage, increased demand for the oilcake from the cattle feed industry and disruption in supply of cotton at spot markets have also contributed to the upside.

The Cotton Association of India has estimated production in the country in the 2019-20 (Oct-Sep) season at 35.45 mln bales (1 bale = 170 kg), up 13.6% due to an increase in acreage and better yield.

However, traders estimate the crop at around 37.0 mln bales. According to trade estimates, around 30.0 mln bales of the crop have already arrived in the market, with farmers holding 5.0-6.0 mln bales.

Cotton Corporation of India (CCI) had already procured 91.90 lakh quintals of Kapas equivalent to 18.66 lakh bales of cotton valuing Rs.4995 crores from farmers in Maharashtra through 83 centres.

Around 77.40 percent of total Kapas produced in Maharashtra had arrived in the markets and sold to CCI and private traders.

The CCI’s operations under which the corporation procures cotton from farmers at the government declared Minimum Support Price (MSP) of Rs 5,550 per quintal continues till September.

Trading Ideas:
--Chana trading range for the day is 4064-4118.
--Chana prices gained as there are concerns regarding shortage of labour, transport, led to significant drop in arrivals.
--The acreage of the crop in the recently ended week is reported at 107.21 lakh hectares.
--According to NAFED, The government has procured nearly about 2.5 Lakh metric tonnes of Chana.
--In Delhi spot market, chana remains unchanged at by 0 Rupees to end at 4095 Rupees per 100 kgs.

Courtesy: Kedia Commodities

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