Technically Chana market is under long liquidation as market has witnessed drop in open interest by 12.17% to settled at 17610 while prices down 29 rupees.
Now NCDEX Chana is getting support at 4023 and below same could see a test of 3990 levels, and resistance is now likely to be seen at 4097, a move above could see prices testing 4138.
Chana yesterday settled down by 0.71% at 4056 dropped on good arrivals while prices look to see support after the report that The National Agricultural Cooperative Marketing Federation of India has stocks of 1.6 mln tn of chana, which the agency bought under the price support scheme in the 2019-20 (Apr-Mar) rabi season.
As part of a central scheme, NAFED buys crops at the minimum support price when prices slump in spot markets.
The agency started buying chana from growers at the minimum support price of 4,620 rupees per 100 kg for crops produced in 2018-19 (Jul-Jun) and marketed in 2019-20 after state governments requested the Centre to arrest the fall in prices.
For the 2020-21 rabi marketing season, the government has fixed the minimum support price for chana at 4,875 rupees per 100 kg.
Meanwhile upside for Chana prices will be capped as arrivals of the new crop started in south India, and soon other mandis from north India will start getting arrivals which may depress the prices in spot markets and prompt states to request the Centre to initiate the procurement.
India's chana output this season is seen rising to 10.7 mln tn, 7% higher on year, despite a sharp decline in acreage in MP. The output is likely to rise as a jump in acreage and expected higher yield in Rajasthan and Maharashtra are likely to more than offset the decline in MP.
Production estimates for 2019-20 (Jul-Jun) were in the range of 7.8-12.0 mln tn, while for 2018-19, they were in the range of 7.0-10.5 mln tn.
--Chana trading range for the day is 3990-4138.
--Chana output in the country is expected to be over 11 mln tn in 2019-20 (Jul-Jun) against 10.1 mln tn
--Chan higher area under the crop and a rise in yield, a senior official with the farm ministry said.
--Upside for Chana prices will be capped as arrivals of the new crop started in south India
--In Delhi spot market, chana remains unchanged at by 0 Rupees to end at 4103.75 Rupees per 100 kgs.
Courtesy: Kedia Commodities