Rmseed on NCDEX settled up 0.73% at 3982 on speculation of crop damages in domestic market. 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). India exports mainly to South and Far East Asian countries such as South Korea, Vietnam and Taiwan. Technically market is under fresh buying as market has witnessed gain in open interest by 14.24% to settled at 47810 while prices up 29 rupees, now Rmseed is getting support at 3947 and below same could see a test of 3912 level, And resistance is now likely to be seen at 4007, a move above could see prices testing 4032.

Trading Ideas:

# Rmseed trading range for the day is 3912-4032.

# Mustard seed settled up on speculation of crop damages in domestic market.

# India is expected to produce around 6.5-7 million tonnes (mt) of rape mustard seeds in 2016-17.

# NCDEX accredited warehouses mustard seed stocks gained by 2001 tonnes to 5597 tonnes.

# In Alwar spot market in Rajasthan the prices dropped -64.35 Rupees to end at 3857.65 Rupees per 100 kg.