Technically Chana market is under short covering as market has witnessed drop in open interest by 19.83% to settled at 26520 while prices up 94 rupees.

Now NCDEX Chana is getting support at 5270 and below same could see a test of 5195 levels, and resistance is now likely to be seen at 5390, a move above could see prices testing 5435.

Chana yesterday settled up by 1.79% at 5344 as sentiments are quite positive as the government has started procuring gram in some major producing states at MSP. Madhya Pradesh, the largest producing state of gram, has started a procurement campaign since last week.

About 1.45 million tonnes of gram will be purchased in the state. Support also seen on expectations of better demand during the forthcoming festival season amid lower inventories.

This apart, the concern of unseasonal rain in the early part of this year has stoked up crop damage fears in some of the northern states.

In addition, the government has spruced up procurement through minimum support price as higher arrivals at major markets have pulled down spot prices below the ?5,100 per quintal. Chana arrivals last month increased three-fold to 6.4 lakh tonnes.

The government agency Nafed is learnt to have procured 1.24 lakh tonnes of chana in Andhra Pradesh, Maharashtra, Madhya Pradesh, Telangana, Karnataka and Gujarat. As per Ministry of Agriculture data, chana sowing in this Rabi season crossed 112 lakh ha, which is up by about five per cent from same period last year.

The second advance estimates of Ministry of Agriculture pegs chana production at a record high of 116 lakh tonnes in 2020-21 season (111 lakh tonnes). In Delhi spot market, chana dropped by 2.9 Rupees to end at 5297.1 Rupees per 100 kgs.

Trading Ideas:
–Chana trading range for the day is 5195-5435.
–Chana gained as sentiments are quite positive as the government has started procuring gram in some major producing states at MSP.
–Madhya Pradesh, the largest producing state of gram, has started a procurement campaign since last week.
–Support also seen on expectations of better demand during the forthcoming festival season amid lower inventories.
–In Delhi spot market, chana dropped  by 2.9 Rupees to end at 5297.1 Rupees per 100 kgs.