Mustard Seed on NCDEX settled up by 1.24% at 4567 on short covering tracking firmness in spot demand after prices dropped on hopes of higher supply in global market. There are expectation of higher supply as good monsoon rainfall this year has provided better than expected soil moisture to encourage farmers on timely sowing resulting early harvest. There is expectation of higher kharif oilseed output along with hopes of rise in rabi acreage in Indian. Further, Canada is likely to produce 2.5 million tons mustard seed in 2016-17 (Aug-Jul) compared to 1.23 million tons a year ago. The rise in production could be attributed to larger acreage under the oilseed at 212,460 hectare from 140,000 hectare a year ago. Driven by higher yield of mustard seed, India’s oilseed production is seen higher by about 7 lakh tonnes (lt) for the year 2015-16 rabi season, according to the industry estimates. The COOIT has pegged the overall rabi oilseed crop for 2015-16 at 77.41 lt – about 7.47 lt higher from the previous year’s 69.94 lt. Canadian canola processors are running at close to full capacity, with a near record weekly crush posted during the week ended September 21. Global oilseed production is forecast up this month, primarily on higher soybean and rapeseed output. Soybean production is projected up for the United States, Brazil, and Canada. In Alwar spot market in Rajasthan the prices dropped -25.75 rupees to end at 4733.15 rupees per 100 kg. Technically market is under short covering as market has witnessed drop in open interest by -0.11% to settled at 52720 while prices up 56 rupee, now Rmseed is getting support at 4521 and below same could see a test of 4476 level, And resistance is now likely to be seen at 4593, a move above could see prices testing 4620.

Trading Ideas:

Rmseed trading range for the day is 4476-4620.

Mustard seed prices gains on short covering tracking firmness in spot demand after prices dropped on hopes of higher supply.

There is expectation of higher supply as good monsoon rainfall this year has provided better than expected soil moisture to encourage farmers.

NCDEX accredited warehouses mustard seed stocks dropped by 1095 tonnes to 9767 tonnes.

In Alwar spot market in Rajasthan the prices dropped -25.75 rupees to end at 4733.15 rupees per 100 kg.