Chana settled up 1.43% at 3060 on some buying at lower levels, though higher stocks and expectations of higher production limited the gains. Prices are trading near the MSP levels thus no major downside is seen. Lower-level buying may also emerge at these levels. India raised the price the government must pay to farmers for buying next year's chana to 3,100 rupees per 100 kg from 3,000 rupees a year earlier. Farmers have begun sowing chana in the major cultivating regions. There are some concerns over a shift in acreage in Madhya Pradesh. Meanwhile, the Agri Department has announced a robust start to the rabi sowing this season. The latest data shows that the area under rabi pulses is at 123.60 lakh hectares as on December 12, 2013, up 3.23% compared to the same time last year. Bulk of this spurt in acreage is due to an excellent Monsoon and accounts for a generous rise in local Chana acreage this season. Such a spurt is making traders release their Chana stocks as prices could correct further one the new crop hits the market in February next year. The total output of Chana is likely to be 8.57 million tonnes in the last season. This marks a gain of 11.29% compared to the last year's production of 7.57 million tonnes. In Delhi spot market, chana gained by 40.1 rupee to end at 2953.55 rupee per 100 kgs. Technically market is under short covering as market has witnessed drop in open interest by -0.92% to settled at 83850 while prices up 43 rupee, now Chana is getting support at 3024 and below same could see a test of 2987 level, And resistance is now likely to be seen at 3088, a move above could see prices testing 3115.

Trading Ideas:

Chana trading range for the day is 2987-3115.

Chana rose on some buying at lower levels, though higher stocks and expectations of higher production limited the gains.

Prices are trading near the MSP levels thus no major downside is seen. Lower-level buying may also emerge at these levels.

NCDEX accredited warehouses chana stocks dropped by 1536 tonnes to 16970 tonnes.

In Delhi spot market, chana gained by 40.1 rupee to end at 2953.55 rupee per 100 kgs.