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Saturday, May 21, 2022

MCX Mentha Oil under short covering; Resistance Seen at 1609

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Technically Mentha Oil market is under short covering as market has witnessed drop in open interest by 6.34% to settled at 901 while prices up 33.6 rupees.

Now MCX Mentha Oil is getting support at 1571.1 and below same could see a test of 1551.6 level, And resistance is now likely to be seen at 1609, a move above could see prices testing 1627.4.

Mentha Oil on MCX settled up by 2.16% at 1590.6 amid improved demand from consuming industries at the domestic spot market. However, upside seen limited amid expectations of higher acreage under mint in 2019 due to lucrative prices throughout last year.

Further, lower arrivals from major producing belts of Chandausi in Uttar Pradesh limited the downside. Export demand of oil in global market is likely to be improved due to recovery in currency which is supportive for prices.

Farmers have started preparing to harvest mentha this time in many villages of Saheb Tehsil. Actually, this time demand was high in the market and availability of Mentha Oil was low. Farmers and businessmen are hoping that this time the harvest of mentha will be more. Because for a few years the price of Mentha was very low.

Since last few years the number has been steady to lower. But in response to decent appreciation in last year’s prices, farmers sowing improved resulting in rise in production prospects. Therefore, the total availability of oil will rise this year.

As of now traders expect a 20-25% rise in sowing versus last year. It should be noted that this years production expectation of 38500- 39000 MT remains slightly above the average production of 36,968 MT productions seen in between 2013- 2018.Mentha oil spot at Sambhal closed at 1722.90 per 1kg. Spot prices was up by Rs.19.00/-.

Trading Ideas:
–Mentha Oil trading range for the day is 1551.6-1627.4.
–Mentha Oil spot at Sambhal closed at 1722.90 per 1kg. Spot prices was up by Rs.19.00/-.
–Mentha Oil prices gained amid improved demand from consuming industries at the domestic spot market.
–However, upside seen limited 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.

Courtesy: Kedia Commodities

Source: Commodityonline.com

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