RMseed prices rise mostly on short covering and rolling over: Angel Broking

Views of Mr. Ritesh Kumar Sahu (Fundamental Analyst - Agri Commodities, Angel Broking):

"National Commodities and Derivative Exchange (NCDEX) soybean April delivery futures jumped more than 1.55% on Tuesday, due to short-covering rally sparked for the near month contract (April) as market participants rolled over to May from the lowest levels not seen since April 2015.

NCDEX April Mustard jumped to the highest levels for the month today even as the market is expecting a record-large domestic crop this season. The agriculture ministry has set a production estimate of 79.12 lakh tonnes in the 2016-17 (Jul-Jun) crop year, up from 68 lt estimated production last year in the second advance estimates for 2016/17 published in Feb 2015.

The mustard prices on NCDEX jumped for second consecutive session from Rs. 3750 a quintal, which is close to the minimum support prices (MSP) declared by the government for 2016/17 crop, to trade near Rs. 3,850 levels today.

The sudden surge in prices of RMseed / Mustard sees is mainly due to short covering in near month contract (April delivery ) by `the market participants and carry forward their positions to far month contract (May delivery). The Open Interest (OI) decline for near month (April) to 42,340 lots today (28-Feb-17) compared to 49,610 lots on Monday (27-Feb-17). However, OI increases for May delivery contract from 14,600 tonnes to 16,320 tonnes thus see a fresh buying in the far month contract."

Source : Equity Bulls

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