Chana settled up 0.85% at 2854 extended gain for second straight on robust domestic demand also support seen after Spot prices gained on a pick-up in spot demand ahead of festivals though hopes of bumper production from the winter-sown crop due to heavy rainfall in the top producing state of Madhya Pradesh, restricted the upside. While domestic chana demand is robust due to upcoming festivals like Navratri and Diwali consumption of besan, a byproduct of chana increases for making sweets and snacks.

Chana prices were also supported in domestic market on falling warehouse stocks, NCDEX accredited warehouses chana stocks dropped by 3,282 tons to 103,819 tons. This year as on Sep 5 total ware house stocks were 103,819 tons as compared to 109,809 tons last year. 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. Meanwhile agriculture ministry has estimated chana output at record 9.79 million ton up from 8.83 million ton a year ago. The 4th Advance Estimates pegged total pulses output for 2013-14 at 19.27 mn tn, up from 18.34 mn tn earlier. There was a delay in the harvesting of the chana crop along with some crop damage in Madhya Pradesh, Rajasthan, Maharashtra and Andhra Pradesh.

Also there is disparity of Rs. 362/qtl for importing of chickpea from Australia. This may slow down import of chickpea from Australia to India. Meanwhile at JNPT port, 19 containers of Canadian lentil, 1 containers of Canadian green pea, 50 containers of Burmese tur whole, 12 containers of Tanzanian chana dal, 22 containers of Tanzanian chana, 5 containers of Tanzanian tur and4 Uzbekistan green moong arrived on August 28,2014. Technically market is under fresh buying as market has witnessed gain in open interest by 0.24% to settled at 122700 while prices up 24 rupee, now Chana is getting support at 2826 and below same could see a test of 2798 level, And resistance is now likely to be seen at 2871, a move above could see prices testing 2888.

Trading Ideas:

Chana trading range for the day is 2798-2888.

Chana extended gain after Spot prices gained on a pick-up in spot demand ahead of festivals

Domestic demand is robust due to upcoming festivals like Navratri and Diwali consumption of besan.

NCDEX accredited warehouses chana stocks dropped by 3,282 tons to 103,819 tons.

In Delhi spot market, chana gained by 28.9 rupee to end at 2905.55 rupee per 100 kgs.