MCX Mentha Oil under fresh selling; Support seen at 1239.9

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167

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Technically Mentha market is under fresh selling as market has witnessed gain in by 16.28% to settled at 1243 while prices down 16.8 rupees

Now MCX Mentha Oil is getting support at 1239.9 and below same could see a test of 1225.7 levels, and resistance is now likely to be seen at 1264.1, a move above could see prices testing 1274.1.

Mentha Oil on MCX settled down by 1.32% at 1254.1 due to delay in monsoon, there has been an increase in the arrival of mentha. There were estimations of a 20-25% rise in sowing in 2019 versus last year. It is likely to touch ~3 lakh ha—as per Central Institute of Medicinal and Aromatic Plants (CIMAP).

It should be noted that this year’s production expectation of 38500- 39000 MT stood slightly above the average production of 36,968 MT productions seen in between 2013 and 2018. Therefore expectations of a significant jump in production over last year due to is ruled out.

Due to improving exports prospects, estimates for ending stocks has been reduced even lower than previous year. The output has not risen in past few years with producing ~80% of global production and exporting ~75% of its output. 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. Mentha oil spot at Sambhal closed at 1394.00 per 1kg. Spot prices was down by Rs.11.80/-.

Trading Ideas:
–Mentha range for the day is 1225.7-1274.1.
–Mentha Oil spot at Sambhal closed at 1394.00 per 1kg. Spot prices was down by Rs.11.80/-.
–Mentha Oil dropped due to delay in monsoon, there has been an increase in the arrival of mentha.
–Mentha sowing may witness a huge jump this year because of high returns farmers experienced the whole of last year.
–There were estimations of a 20-25% rise in sowing in 2019 versus last year.

Courtesy: Kedia Commodities

Source: Commodityonline.com