Mustard Seed on NCDEX settled up by 1.41% at 3955 on supply worries following reports of unfavourable weather. Prices of seed were up as the rainfall activity along with localized hailstorms has disturbed harvesting of rabi crops over the parts of Rajasthan and Madhya Pradesh. India is expected to produce around 6.5-7 million tonnes (mt) of rape mustard seeds in 2016-17 as compared to 5.8 mt produced in 2015-16 due to higher acreage and improving productivity. The carry- forward stock from the previous season was around 0.15 mt. The Ministry of Agriculture expects 8.5 mt of mustard seeds to be produced in the current rabi season against 6.8 mt a year ago, as per its 4th advanced estimates. Higher price levels seen before sowing, favourable weather and a hike of over 10.4 per cent in MSP to Rs. 3,700/Q (including Rs. 100 bonus) explain the increase in acreage by over 9 per cent to 7.05 million hectares. Initial estimates show that arrivals this year are going to be better than last year. Increasing arrivals will put downward pressure and a price correction is likely. The demand for Indian mustard meal in the international market is down by 44 per cent for the FY 2016-17 (April-December) compared with the same period last year, and the export in December has been the lowest in the current financial year, down 86 per cent (YoY). In Alwar spot market in Rajasthan the prices gained 51.5 Rupees to end at 3922 Rupees per 100 kg. Technically market is under short covering as market has witnessed drop in open interest by -2.2% to settled at 37330 while prices up 55 rupees, now Rmseed is getting support at 3907 and below same could see a test of 3859 level, And resistance is now likely to be seen at 3991, a move above could see prices testing 4027.

Trading Ideas:

# Rmseed trading range for the day is 3859-4027.

# Mustard seed prices gained on supply worries following reports of unfavourable weather.

# India is expected to produce around 6.5-7 mt of rape mustard seeds in 2016-17 as compared to 5.8 mt produced in 2015-16.

# NCDEX accredited warehouses mustard seed stocks dropped by 60 tonnes to 60 tonnes.

# In Alwar spot market in Rajasthan the prices gained 51.5 Rupees to end at 3922 Rupees per 100 kg.