R M seed to trade lower on weak fundamentals

Fundamental Analysis

NCDEX July Mustard seed futures closed mildly higher on short covering and firm overseas market on Thursday.
Weak fundamentals of oilseeds may drag the prices lower in the medium term.

Domestic Kharif oilseeds area so far been covered on 0.27 lakh hectares against 0.47 lakh hectares during corresponding period a year ago, as on May 28, 2010.

The area under Groundnut Seed is reported down at 0.075 lakh hectares against 0.100 lakh hectares a year ago and Sunflower sowing is reported steady at 1.0 lh in the corresponding period last year.

Technical Analysis

Prices closed below its 10 Day & its 20 Day EMA, which indicates bearish market sentiments.
14-Day RSI is at 49.10, which is in neutral zone.
Daily MACD is in negative territory.

Outlook

Mustard seed prices are expected to trade lower on weak fundamentals of oilseeds and better carry over stock mustard seed as well as oilseeds (for short term). In the long term, it is expected to trade lower on account of higher global oilseeds output and huge import of edible oils may provide support to bears.