MCX Mentha Oil under short covering; Support seen at 1673.4

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Technically Mentha Oil market is under short covering as market has witnessed drop in by 3.01% to settled at 837 while prices up 7.4 rupees.

Now MCX Mentha Oil is getting support at 1673.4 and below same could see a of 1654.5 level, And resistance is now likely to be seen at 1705, a move above could see prices testing 1717.7.

Mentha Oil on MCX settled up by 0.44% at 1692.3 on short covering after prices dropped due to low demand at major physical centers. Prices also seen pressure earlier amid expectations of higher acreage under mint in 2019 due to lucrative prices throughout last year. Export demand of oil in global market is likely to be improved due to recovery in currency which is supportive for prices.

The surge in output is likely due to buoyancy in planting intentions, not only in the traditional pockets of Uttar Pradesh and Bihar in recent days, but also in Madhya Pradesh. Mentha sowing may witness a huge jump this year because of high returns farmers experienced the whole of last year. Production of mentha oil is expected to rise to 48,000-50,000 tn in 2019 from 33,000-35,000 tn last year.

This year, sowing of the crop started towards the end of last month, a couple of weeks later than usual due to extended cold weather in all major growing regions. Official data on mentha, with respect to sowing or production and export, is not available as trade in the commodity is tightly controlled by a few.

This season, the area under mint is expected to be 250,000-265,000 ha. Speculation that German major BASF SE has re-started deliveries of mentha oil will also be a deterrent to prices. Mentha oil spot at Sambhal closed at 1756.30 per 1kg. Spot prices was down by .8.80/-.

Trading Ideas:
–Mentha range for the day is 1654.5-1717.7.
–Mentha Oil spot at Sambhal closed at 1756.30 per 1kg. Spot prices was down by Rs.8.80/-.
–Mentha Oil gained on short covering after prices dropped due to low demand at major physical centers.
–Prices also seen pressure earlier amid expectations of higher acreage under mint in 2019 due to lucrative prices throughout last year.
–The surge in output is likely due to buoyancy in planting intentions, not only in the traditional pockets of Uttar Pradesh and Bihar in recent days.

Courtesy: Kedia Commodities

Source: Commodityonline.com