Menthaoil yesterday settled down -1.96% at 878.3 due to fresh supplies in local mandies along with strong production in the current year. As per the market data, the fresh arrivals of around 950-1000 drums of new mentha oil is coming in the major mandies of Chandausi. Besides the new arrivals, the strong production estimates might also encourage some stockiest selling from higher levels. As per latest data, the total mentha oil production is expected to be in the range of 52000-55000 tonnes in the current year, up almost 10-12% from the last year. This is mainly due to the better price realization and favourable crop conditions. Moreover, the total opening stocks of Mentha oil are estimated at 13000-15000 tonnes for the current year. This may encourage stockiest liquidation at high levels. Steady demand was mainly seen in the wake of anticipation of poor sowing acreage in the season as a weak price trend in the current year will divert the farmer's interest towards other crops. Therefore, low prices of mentha oil encourage the long term investor's demand in local mandies. The total area under mentha crop is expected to increase this year as the commodity prices witnessed firm trend in the last year due to good demand from pharmaceutical industry. Technically market is under fresh selling as market has witnessed gain in open interest by 1.96% to settled at 5770 while prices down -17.6 rupee, now Menthaoil is getting support at 870 and below same could see a test of 861.7 level, And resistance is now likely to be seen at 891.6, a move above could see prices testing 904.9.

Trading Ideas:

Menthaoil trading range for the day is 861.7-904.9.

Menthaoil spot is at 960/-. Spot market is down by Rs. 8/-.

Mentha oil ended with losses due to fresh supplies in local mandies along with strong production in the current year.

Besides the new arrivals, the strong production estimates might also encourage some stockiest selling from higher levels.

Technically market is under fresh selling as market has witnessed gain in open interest by 1.96% to settled at 5770