Chana settled up 0.21% at 2836 helped by bargain-buying, though ample supplies and weak demand kept the upside limited. Prices failed to recover as improved rains in Central and North-west India kept market sentiments weak. Domestic demand for chickpea is weak in local mandis as chana available is of inferior quality. Chana was sown over an area of 10.21 million hectare compared to 9.5 million hectare a year ago thanks to normal monsoon and good soil moisture. Agriculture ministry has estimated chana record output at 9.79 million ton up from 8.83 million ton a year ago, which could revised downwards. Stockiest are entering in the market on ideas that these are very attractive levels given the supply squeeze seen in the markets every year around late December till mid February. Moreover, weak rainfall so far in the major chana growing states such as Rajasthan and Madhya Pradesh will discourage fresh sowing in the current year. The latest kharif data suggested that kharif pulses sowing have been completed in 2.15 million hectares as on 19 July, 2014, down 32% from the last year in the same period. As per the second advance estimates of Indian government, the total chana production in 2013-14 is estimated at 9.76 million tonnes against 8.83 million tonnes due to higher sowing acreage coupled with favourable crop conditions in major producing states. In Delhi spot market, chana dropped by -5.35 rupee to end at 2837.85 rupee per 100 kgs. Technically market is under short covering as market has witnessed drop in open interest by -2% to settled at 151370, now Chana is getting support at 2812 and below same could see a test of 2789 level, And resistance is now likely to be seen at 2850, a move above could see prices testing 2865.

Trading Ideas:

Chana trading range for the day is 2789-2865.

Chana settled up helped by bargain-buying, though ample supplies and weak demand kept the upside limited.

Prices failed to recover as improved rains in Central and North-west India kept market sentiments weak.

Domestic demand for chickpea is weak in local mandis as chana available is of inferior quality.

In Delhi spot market, chana dropped by -5.35 rupee to end at 2837.85 rupee per 100 kgs.