Technically Mustard Seed market is under short covering as market has witnessed drop in open interest by 0.29% to settled at 27640 while prices up 161 rupees.

Now NCDEX Mustard Seed is getting support at 5915 and below same could see a test of 5812 levels, and resistance is now likely to be seen at 6077, a move above could see prices testing 6136.

Mustard Seed yesterday settled up by 2.75% at 6019 as support seen after Mustard production has been pegged at 91.16 Lakh tonnes, down by around 1.51% from 92.57 Lakh tonnes last year.

As per USDA, World Mustard seed production is estimated to decrease marginally by around 0.38% to 684 Lakh tonnes during 2020-21 against 687 Lakh tonnes seen during 2019-20.

Domestic mustard oil consumption has increased by 12% to 15% this year due to its immunity boosting properties in the fight against Covid-19.

The Food Safety and Standards Authority of India (FSSAI)‘s clampdown on blending of other edible oils with mustard oil in a bid to ensure purity also supporting prices.

The companies were allowed to mix 20 per cent other edible oil in mustard oil. However, after the new regulation comes into force companies will be allowed to market the pure mustard oil.

Prohibition of adulteration in mustard oil by the food watchdog may turn mustard oil costlier than other oils that may moderate the demand at higher prices.

The government announced an increase in the Minimum Support Prices for all mandated Rabi crops for marketing season 2021- 22. MSP for Mustard has been increased by 5% to Rs. 4,650 per quintal from Rs. 4,425 per quintal in 2020-21.

Trading Ideas:
–Mustard Seed trading range for the day is 5812-6136.
–Mustard Seed gains as support seen after Mustard production has been pegged at 91.16 Lakh tonnes, down by around 1.51%.
–Prohibition of adulteration in mustard oil by the food watchdog may turn mustard oil costlier than other oils that may moderate the demand at higher prices
–MSP for Mustard has been increased by 5% to Rs. 4,650 per quintal from Rs. 4,425 per quintal in 2020-21.
–In Alwar spot market in Rajasthan the prices gained 150 Rupees to end at 6050 Rupees per 100 kg.