Commodity Trading Tips for Menthaoil by KediaCommodity

Ajay Kumar Kedia 2 June 2014

Menthaoil settled down -0.61% at 812.7 amidst weak demand in the spot market. Further, ample stocks position following higher supplies from Chandousi in Uttar Pradesh too added pressure on mentha oil prices. In Baranbaki total arrivals are at 90 Drums(1-drum-180kg), steady as against previous day's arrival. In Sambhal arrivals were reported at 40 Drums(1-drum=180kg), steady as against previous dayn#39; s arrival. In Bareilly total arrivals are at 20 Drums(1-drum-180kg), up by 5 Drums(1-drum-180kg) as compared to previous day. With present rates being low, traders do foresee some improved demand in coming days. But till that happens, the uptrend may be limited. As per the market sources, the total sowing acreage of mentha oil is expected to decline by 20-25% in the current year on the account of delayed harvesting mustard and wheat crop in major areas of Uttar Pradesh and Punjab coupled with poor realization rate from mentha oil. Sources added that the total production of mentha oil in the current year is likely to be around 35-36 thousand tonnes against the previous year of 50 thousand tonnes. The prices were also supported by strong export demand in local mandies. Traders mentioned that the total exports of mentha oil for the full year April 1, 2013 to March 31,2014 are likely to surpass the previous record of 20,500 tonne , ie. reported in 2008. Technically market is under fresh selling as market has witnessed gain in open interest by 4.26% to settled at 3650 while prices down -5 rupee, now Menthaoil is getting support at 807.1 and below same could see a test of 801.4 level, And resistance is now likely to be seen at 820.7, a move above could see prices testing 828.6.