Commodity Trading Tips for Menthaoil by Kedia Commodity

Ajay Kumar Kedia 24 July 2013

Menthaoil yesterday settled down -0.36% at 879.5 tracking weakness in spot demand after prices seen support due to export demand. Sentiments were supported bolstered on tight supplies in the spot markets due to less arrival from growing belts. Production this year expected higher at more than 60,000 tons against 50,000 tons last year. Higher stock levels could pressurize prices in medium term. Heavy rains over last few days in UP have adversely affected the harvesting and could also lead to crop damage may impact future prices. Prices looks to remain steady due to possibility of some crop damage in major growing areas along with fragile arrivals in local mandies. As per market sources , heavy rainfall in major mentha growing areas such as Rampur , Sambhal and Moradabad might lead to serious damage to the standing mentha crop. Moreover, this might also reduce the overall oil recovery from the crop. Traders are expecting the total production in the range of 50-55 thousand tonnes, down 15 thousand tonnes from the earlier projection of 70-75 thousand tonnes. The total daily arrivals of the mentha oil were also reported at lower side. The physical mandies have reported the total arrivals of around 700-800 drums, down almost 300-400 drums from the last year in the same period. The spot prices were also augmented by Rs 10 per kg today to trade at Rs 1080-1120 per kg. Technically market is under long liquidation as market has witnessed drop in open interest by -2.6% to settled at 3632 while prices down -3.2 rupee, now Menthaoil is getting support at 871.7 and below same could see a test of 863.8 level, And resistance is now likely to be seen at 889.9, a move above could see prices testing 900.2.