Menthaoil yesterday settled down -0.6% at 874.9 tracing the lackluster demand of the commodity in the spot markets. The trading sentiments weakened further due to higher production estimate and high stock levels in physical market. Meanwhile, the production of Mentha this year is estimated higher at 60,000 tonnes as compared to 50,000 tonnes last year as the area under crop this year is expected to be higher at 2.10 lakh hectares as against 1.75 lakh hectares last year. Weak demand prevented any strong upside movement. Traders waited for some more dips before initiating fresh demand. Higher production estimates, good stocks may limit the commodity prices in the short term to certain extent. 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. Higher production estimates are also putting further pressure on the commodity movement. The area under mentha crop is expected to be higher at 2.10 lakh ha against last year's 1.75 lakh ha. Technically market is under long liquidation as market has witnessed drop in open interest by -2.34% to settled at 4045 while prices down -5.3 rupee, now Menthaoil is getting support at 867.1 and below same could see a test of 859.2 level, And resistance is now likely to be seen at 885.1, a move above could see prices testing 895.2.

Trading Ideas:

Menthaoil trading range for the day is 859.8-895.8.

Menthaoil spot is at 975/-. Spot market remains unchanged.

Mentha oil edged lower tracing the lackluster demand of the commodity in the spot markets.

The trading sentiments weakened further due to higher production estimate and high stock levels.

Higher production estimates are also putting further pressure on the commodity movement.