NCDEX Chana under short covering; Resistance seen at 4235
Commodity Online | March 22 2019
UPDATED 11:40:16 IST

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Technically Chana market is under short covering as market has witnessed drop in open interest by 0.59% to settled at 57240 while prices up 18 rupees.

Now NCDEX Chana is getting support at 4235 and below same could see a test of 4205 level, And resistance is now likely to be seen at 4285, a move above could see prices testing 4305.

Chana on NCDEX settled up by 0.42% at 4265 on short covering after prices dropped as market is expecting another year of bumper production because of favourable climatic conditions and sufficient rains in northern and central India following Western disturbances.

Moreover, climatic support for top chana producing states, record stocks with government agencies that was procured last year under price support scheme (PSS) and imports of chana from Tanzania, Myanmar and Sudan are weighing.

Chana output in the country came in higher during the last two years on the back of record production and higher imports. Areas under chana too went up during the last three years because of a jump of 34 per cent in minimum support price (MSP).

From Rs 4,425 per quintal in 2015-16 to Rs 4,620 in 2017-18. India produced a record 112.3 lakh tonnes (lt) of chana followed by 93.8 lt and 70.6 lt in the previous two years, estimates of the government showed.

Meanwhile, India imported more than 31 lakh tonnes of the commodity in the last three years with the average of over 10 lt per year. This raised supplies by more than 100 lt during the previous two years against the consumption of 70-75 lt. Higher supplies kept chana prices under MSP for the major part of last year.

Trading Ideas:
--Chana trading range for the day is 4205-4305.
--Chana gained on short covering after prices dropped as market is expecting another year of bumper production.
--Chana output in the country came in higher during the last two years on the back of record production and higher imports.
--Areas under chana too went up during the last three years because of a jump of 34 per cent in minimum support price (MSP).
--In Delhi spot market, chana gained  by 11.7 Rupees to end at 4114.2 Rupees per 100 kgs.

Courtesy: Kedia Commodities

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