Menthaoil yesterday settled down -1.18% at 843.3 on the account of strong production estimates for the current year along with weak demand by user industries. Sentiment weakened further as the investors indulged in profit-booking in the midst of a fall in demand in the spot market. Moreover, the total opening stocks of the current year were also estimated higher at 12 thousand tonnes against 8 thousand tonnes that were reported last year. Market sources suggested that the total production of mentha oil is estimated around 54-55 thousand tonnes in the current year against 45 thousand tonnes of the last year. This is mainly due to the better price realization and favourable crop conditions. Moreover, the total opening stocks of the current year were also estimated higher at 12 thousand tonnes against 8 thousand tonnes that were reported last year. Sources also added that the total daily arrivals of mentha oil are also likely to witness some momentum in the coming days as farmers will liquidate their stocks ahead of festival season. The total daily arrivals will increase to the level of 1000 tonnes from the current level of 600 tonnes in the coming days. Market sources suggested that strong demand is mainly on the account of possibility of poor sowing acreage in the next season as a weak price trend in the current year will divert the farmer's interest towards other crops. Technically market is under fresh selling as market has witnessed gain in open interest by 0.34% to settled at 4403 while prices down -10.1 rupee, now Menthaoil is getting support at 839.3 and below same could see a test of 835.2 level, And resistance is now likely to be seen at 850.7, a move above could see prices testing 858.

Trading Ideas:

Menthaoil trading range for the day is 835.6-858.4.

Menthaoil spot is at 944/-. Spot market is down by Rs. 9/-.

Mentha oil ended with losses on the account of strong production estimates for the current year along with weak demand.

Sentiment weakened further as the investors indulged in profit-booking in the midst of a fall in demand in the spot market.

Market sources suggested that strong demand is mainly on the account of possibility of poor sowing acreage in the next season