NCDEX Mustard Seed under short covering; Support seen at 4390
Commodity Online | May 27 2020
UPDATED 11:30:14 IST

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Technically Mustard Seed market is under short covering as market has witnessed drop in open interest by 6.29% to settled at 12060 while prices up 100 rupees.

Now Mustard Seed is getting support at 4390 and below same could see a test of 4323 levels, and resistance is now likely to be seen at 4514, a move above could see prices testing 4571.

Mustard Seed yesterday settled up by 2.29% at 4458 amid a smaller crop and limited supply. In recent session prices gained because of lower-than-expected supply of fresh crop in spot markets following restrictions due to coronavirus scare in the country.

Arrivals of the oilseed in April were at just over 980,000 tn, compared with 1.55 mln tn a year ago, according to data from the Mustard Oil Producers Association of India. The association has estimated India's mustard output in 2019-20 (Jul-Jun) at 7.6 mln tn, down from 8.1 mln tn in the previous crop year.

This is lower than the farm ministry's third advance estimate of 8.7 mln tn. During Nov-Apr, mustard oil imports fell sharply to 17,000 tn, from 44,167 tn a year ago, according to The Solvent Extractors' Association of India.

Total imports in 2018-19 were around 59,000 tn. Imports are down due to the coronavirus pandemic and ample stocks of edible oils in domestic markets.

The government had procured 411,152 tn of mustard harvested in 2019-20 (Jul-Jun) under the price support scheme from farmers in Gujarat, Rajasthan, the top grower, Haryana, Uttar Pradesh, and Madhya Pradesh, a government official said.

Trading Ideas:
--Mustard Seed trading range for the day is 4323-4571.
--Mustard Seed prices gained amid a smaller crop and limited supply.
--In recent session prices gained because of lower-than-expected supply of fresh crop in spot markets following restrictions due to coronavirus.
--Arrivals of the oilseed in April were at just over 980,000 tn, compared with 1.55 mln tn a year ago.
--In Alwar spot market in Rajasthan the prices gained 103 Rupees to end at 4797.5 Rupees per 100 kg.

Courtesy: Kedia Commodities