Menthaoil settled down -1.13% at 889.8 tracking weakness in spot demand amid profit booking. Prices all dropped due to higher production prospects and reports of better sowing. The market picture for mentha oil looks weak as higher output and high stock levels put a stop on the markets from recovering in a big way. 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. Heavy rains over last few days in UP have adversely affected the harvesting and could also lead to crop damage may impact future prices. 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. 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. 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 fresh selling as market has witnessed gain in open interest by 5.43% to settled at 3788 while prices down -10.2 rupee, now Menthaoil is getting support at 880.9 and below same could see a test of 871.9 level, And resistance is now likely to be seen at 903.4, a move above could see prices testing 916.9.

Trading Ideas:

Menthaoil trading range for the day is 871.9-916.9.

Menthaoil spot is at 995/-. Spot market is down by Rs. 12/-.

Mentha oil ended with losses tracking weakness in spot demand amid profit booking.

Steady demand was mainly seen in the wake of anticipation of poor sowing acreage in the season

The market picture for mentha oil looks weak as higher output and high stock levels put a stop on the markets from recovering in a big way.