Menthaoil settled down -0.52% at 873.4 on profit booking after prices gained as reports of a fall in sowing in the growing state of UP created a bullish impact. With present rates being low, traders also foresee some improved demand in coming days with Elections getting over. Further, weak sowing progress along with strong export demand too supported mentha oil prices. As per the market sources, the total sowing acreage of mentha oil is expected to decline by 20-25% in the current year on the account of delayed harvesting mustard and wheat crop in major areas of Uttar Pradesh and Punjab coupled with poor realization rate from mentha oil. Sources added that the total production of mentha oil in the current year is likely to be around 35-36 thousand tonnes against the previous year of 50 thousand tonnes. The prices were also supported by strong export demand in local mandies. Traders mentioned that the total exports of mentha oil for the full year April 1, 2013 to March 31,2014 are likely to surpass the previous record of 20,500 tonne , ie. reported in 2008. Traders are expecting that the total exports is likely to reach in the range of 21000 to 21500 tonnes as most of exporters are showing strong buying participation at current levels with the anticipation of limited supplies in next marketing season. technically market is under long liquidation as market has witnessed drop in open interest by -1.73% to settled at 3573 while prices down -4.6 rupee, now Menthaoil is getting support at 865.6 and below same could see a test of 857.8 level, And resistance is now likely to be seen at 886.1, a move above could see prices testing 898.8.

Trading Ideas:

Menthaoil trading range for the day is 857.8-898.8.

Menthaoil spot is at 992/-. Spot market is down by Rs.5/-.

Menthaoil dropped on profit booking after prices gained as reports of a fall in sowing in the growing state of UP supported prices.

Further, weak sowing progress along with strong export demand too supported mentha oil prices.

Sources added that the total production of mentha oil in the current year is likely to be around 35-36 thousand.