Weak fundamental keeps Mustard Seed in range

Fundamental Analysis

NCDEX January Mustard seed futures opened lower on weak overseas report. However, prices could not sustain lower levels and it recovered an hours before closing the market and managed to close slightly higher as compared to previous close.

Domestic Rabi oilseeds area so far been covered on 84.23 lakh hectare against 90.01 lakh hectare during corresponding period a year ago, as on January 07, 2010.

Area under Rapeseed/Mustard Seed is reported at 64.02 lakh hectares against 66.24 lakh hectares a year ago, Groundnut at 4.54 lakh hectares against 4.73 lakh hectares, Sunflower sowing is reported at 7.58 lakh hectares against 10.03 lakh hectares in the corresponding period last year.

Technical Analysis

Prices (NCDEX April Contract) closed higher at Rs. 549.45 per 20 Kg on Wednesday; its high of the day was 550.00 levels and touched a low of 540.10 levels.

Prices closed below its 10 Day & its 20 Day EMA. 14-Day RSI is at 37.42, which is in neutral zone.

Outlook

Mustard Seed prices are expected to trade range bound amid subdued trading activity on lack of fresh fundamentals (for short term). However, in the long term, overall it is expected to trade lower on account of higher global oilseeds output and huge import of edible oils may provide support to bears.

Courtesy: Angel Commodities