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Technically Mentha Oil market is under short covering as market has witnessed drop in open interest by 0.72% to settled at 1378 while prices up 55.3 rupees.
Now MCX Mentha Oil is getting support at 1411.6 and below same could see a test of 1385.2 level, And resistance is now likely to be seen at 1451.2, a move above could see prices testing 1464.4.
Mentha Oil on MCX settled up by 4% at 1438 due to bullish demand outlook from domestic market as well as exporters. Spot markets are also witnessing strong consumption demand amid restricted supplies.
Bumper crop harvest has been discounted in the market and market is moving upwards on rising demand from end users. The Multi Commodity Exchange of India will double the total additional margin to 10% on both buy and sell side of all running as well as yet-to-be-launched contracts of mentha oil from Monday.
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Despite the peak season of harvest in June, prices of mentha oil have risen over 20% since the beginning of June as farmers held back stocks. Farmers are holding back stocks as they are expecting prices to rise to 1,800 rupees a kg in the next two-three months.
As per preliminary estimates, acreage under mentha crop will rise this year as the farmers are encouraged by higher price in recent past. As per trade sources, all the major markets are likely to witness higher inflow of the produce.
There could be chances of crop damage to certain extend due to unfavourable weather condition. Besides, farmers are likely to hold back the stocks as the present prices are not remunerative for them.
However, in recent years, the growth in production and consumption of synthetic mentha has influenced the demand for natural mentha. Mentha oil spot at Sambhal closed at 1721.40 per 1kg. Spot prices was up by Rs.155.40/-.
Trading Ideas:
–Mentha Oil trading range for the day is 1385.2-1464.4.
–Mentha Oil spot at Sambhal closed at 1721.40 per 1kg. Spot prices was up by Rs.155.40/-.
–Mentha Oil prices rallied due to bullish demand outlook from domestic market as well as exporters.
–Spot markets are also witnessing strong consumption demand amid restricted supplies.
–Bumper crop harvest has been discounted in the market and market is moving upwards on rising demand from end users.
Courtesy: Kedia Commodities
Source: Commodityonline.com
