NCDEX Chana under short covering; Resistance seen at 4477
Commodity Online | December 06 2019
UPDATED 12:10:30 IST

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Technically Chana market is under short covering as market has witnessed drop in open interest by 0.11% to settled at 35420 while prices up 17 rupees.

Now NCDEX Chana is getting support at 4417 and below same could see a test of 4386 levels, and resistance is now likely to be seen at 4477, a move above could see prices testing 4506.

Chana on NCDEX settled up by 0.38% at 4448 on short covering amid intermittent rains in Madhya Pradesh and decline in selling at a lower rate by the NAFED.

Further, extended monsoon rains till mid-October also reported to have caused some damage to the crop and quality deterioration is also a concern particular in Urad.

Rains in various parts of the country were observed even till end of the month causing delay in sowing activities of the Rabi season crops. Chana production is estimated at 101.3 Lakh tonnes during 2018- 19.

Production Estimate is 10.98% less than the estimate of 113.8 Lakh tonnes during 2017-18. Overall, pulses production is also estimated to decline by around 7.95% to 234 Lakh tonnes 2018-19 from 254.2 Lakh tonnes in the previous year.

As per market sources, Chana sown area might witness some improvement owing to good soil moisture due to prolonged monsoon rains in most part of India even till October end. However, at the same time, delay in sowing is also expected.

The increase in MSP for Rabi Crops for 2020- 21 is in line with the principle of fixing the MSPs at a level of at least 1.5 times of the all India weighted average cost of production, which was announced in the Union Budget 2018-19.

Government has increased the Minimum Support Price of the Chana by 6% to 4,875 rupees per Quintal from 4620 rupees per Quintal last year.

Trading Ideas:
--Chana trading range for the day is 4386-4506.
--Chana gained on short covering amid intermittent rains in Madhya Pradesh and decline in selling at a lower rate by the NAFED.
--Further, extended monsoon rains till mid-October also reported to have caused some damage to the crop and quality deterioration is also a concern
--Chana sown area might witness some improvement owing to good soil moisture due to prolonged monsoon rains in most part of India.
--In Delhi spot market, chana dropped  by 2.5 Rupees to end at 4305.15 Rupees per 100 kgs.

Courtesy: Kedia Commodities