Mustard Seed on NCDEX settled up by 1.34% at 4008 on supply worries following reports of unfavourable weather. Fear of return of el-nino weather phenomena is firming up market sentiments. 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 90.15 Rupees to end at 4012.15 Rupees per 100 kg. Technically market is under short covering as market has witnessed drop in open interest by -0.11% to settled at 37290 while prices up 53 rupees, now Rmseed is getting support at 3965 and below same could see a test of 3921 level, And resistance is now likely to be seen at 4041, a move above could see prices testing
4073.

Trading Ideas:

Rmseed trading range for the day is 3921-4073.

Mustard seed prices ended with gains on supply worries following reports of unfavourable weather.

The Ministry of Agriculture expects 8.5 mt of mustard seeds to be produced in the current rabi season.

NCDEX accredited warehouses mustard seed stocks gained by 220 tonnes to 280 tonnes.

In Alwar spot market in Rajasthan the prices gained 90.15 Rupees to end at 4012.15 Rupees per 100 kg.