MCX Mentha Oil likely to move in a range of 1188 5 1219 9

Technically Mentha Oil market is under short covering as market has witnessed drop in open interest by 8.36% to settled at 1008 while prices up 13.5 rupees.

Now MCX Mentha Oil is getting support at 1198.4 and below same could see a test of 1188.5 levels, and resistance is now likely to be seen at 1214.1, a move above could see prices testing 1219.9.

Mentha Oil on MCX settled up by 1.13% at 1208.3 as low level buying seen as demand season starts. As per Central Institute of Medicinal and Aromatic Plants (CIMAP) mentha sowing touched 3 lakh ha. Sowing witnessed a huge jump this year because of high returns farmers experienced the whole of last year.

The surge in output is likely due to buoyancy in planting intentions, not only in the traditional pockets of Uttar Pradesh and Bihar in recent days, but also in Madhya Pradesh. Due to improving exports prospects, estimates for ending stocks has been reduced even lower than previous year. Export demand of oil in global market is likely to be improved due to recovery in currency which is supportive for prices.

Future demand of mentha oil is expected to rise as Colgate-Palmolive sees a rise in Sales by 4%; recorded net sales of Rs. 1,075.9 Crore for Q1. Official data on mentha, with respect to sowing or production and export, is not available as trade in the commodity is tightly controlled by a few. This season, the area under mint is expected to be 250,000-265,000 ha. Mentha oil spot at Sambhal closed at 1358.50 per 1kg. Spot prices was down by Rs.1.80/-.

Trading Ideas:
--Mentha Oil trading range for the day is 1188.5-1219.9.

--Mentha Oil spot at Sambhal closed at 1358.50 per 1kg. Spot prices was down by Rs.1.80/-.
--Mentha Oil settled up as low level buying seen as demand season starts.
--Due to improving exports prospects, estimates for ending stocks has been reduced even lower than previous year.
--The surge in output is likely due to buoyancy in planting intentions, not only in the traditional pockets of Uttar Pradesh and Bihar in recent days.

Courtesy: Kedia Commodities