Commodity Trading Tips for Menthaoil by Kedia Commodity

Ajay Kumar Kedia 8 August 2013

Menthaoil yesterday settled down -0.29% at 848.9 due to increased arrivals of the commodity in the physical market from the major producing parts Most of the traders and end users have engaged into fresh buying in local mandies in anticipation of strong demand in domestic and international market at lower 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. 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 with the price range of Rs 950-990 per kg. 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. Technically market is under long liquidation as market has witnessed drop in open interest by -3.24% to settled at 5085 while prices down -2.5 rupee, now Menthaoil is getting support at 839.8 and below same could see a test of 830.7 level, And resistance is now likely to be seen at 860.5, a move above could see prices testing 872.1.