Chana futures on National Commodity and Derivatives Exchange are likely to trade higher during the week on peak demand ahead of Diwali, analysts said. |
Short covering in the October contract ahead of expiry on Friday is also expected to support prices at every intra-day fall, they said. |
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"The most-active November contract is likely to touch Rs 2,450 a quintal, and then Rs 2,476 this week," said an analyst at Delhi-based brokerage. |
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Spot prices will continue to remain at a premium on peak demand season lasting until Dussehra Sunday, the analyst said. |
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"Spot chana in Delhi will see Rs 2,500-2,525 a quintal level in a week," he added. |
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Today, spot chana in Delhi was at Rs 2,440-2,450 a quintal, up nearly Rs 40 from Saturday's close. |
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Delivery against October contract may be good in the region of 7,000-8,000 tonnes as millers are unlikely to cover their long positions, built at lower levels, the analyst said. |
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Although, futures are likely to be bullish over the next few days, there will be some volatility until the expiry of October contract Friday, said Chowda Reddy, an analyst at Karvy Comtrade. |
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"November contract is likely to touch Rs 2,480 and Rs 2,550 on good physical demand," Reddy said. |
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Festival demand has triggered short covering in the past couple of days, he said. |
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Open interest in October and November declined by 1,300 tonnes and 2,400 tonnes, respectively, on continued short covering. |
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"Nearly 3,400 tonnes rise in December open interest on the long side today has surprised the market," Reddy said. |
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December is likely to have huge supplies in excess of 200,000 tonnes of chana and its closest substitute yellow-peas through release of imported pulses by government and private importers. |
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This should ideally keep the December contract at deep backwardation to November contract, currently trading at par. |
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However, speculative buying by private importers may be driving up the contract to enable them to sell at higher levels, Reddy said. Reddy expects even the December contract to touch Rs 2,500 a quintal by the end of this month. |
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