Technically Mustard Seed market is under long liquidation as market has witnessed drop in open interest by 1.14% to settled at 32040 while prices down 34 rupees.
Now NCDEX Mustard Seed is getting support at 5305 and below same could see a test of 5263 levels, and resistance is now likely to be seen at 5400, a move above could see prices testing 5453.
Mustard Seed yesterday settled down by 0.63% at 5346 on profit booking after prices gained as support seen due to low crop estimates, festival and seasonal demand and increased prices by Nafed are strong factors.
It is estimated that the mustard oil consumption in the domestic market has increased by 12% to 15% this year as mustard oil is considered as immunity booster in the fight against corona infection.
However, the remaining available supply of mustard in the market is not sufficient to comfortably fulfil demand of mustard until the arrival of new crop.
All major mandis for RM Seed are functioning on normal course however, some mandis like Kota and Bikaner have reduced their operational capacity as some Corona positive cases were detected.
As per USDA, World Mustard seed production is estimated to increase marginally by around 2% to 698 Lakh tonnes during 2020-21 against 682 Lakh tonnes seen during 2019-20. However, beginning stock is expected to fall by around 28% to 65 Lakh tonnes.
Hence, the total supply is projected to marginally fell by around 1% to 914 Lakh tonnes. Ending Stock too expected to fell by 8% to 60 Lakh tonnes as compared to 65 Lakh tonnes last year. NAFED has plan to procure RM seed around 18 Lakh tonnes under PSS scheme across the states.
Trading Ideas:
–Mustard Seed trading range for the day is 5263-5453.
–Mustard dropped on profit booking after prices gained due to low crop estimates, and increased prices by Nafed are strong factors
–It is estimated that the mustard oil consumption in the domestic market has increased by 12% to 15% this year
–As per USDA, World Mustard seed beginning stock is expected to fall by around 28% to 65 Lakh tonnes.
–In Alwar spot market in Rajasthan the prices dropped 43 Rupees to end at 5440.9 Rupees per 100 kg.