Guar futures likely to stay rangebound

The December contract of guar seed on the National Commodity and Derivatives Exchange is likely to be range-bound with a positive bias for six to seven days, analysts and traders said today.

December guar seed is likely to trade in a range of Rs 1,750-1,880 a quintal in the coming week, they said.

"Prices are seen slightly positive in the next week on good demand from stockists as they are expecting further rise in prices on low crop estimates," said an analyst at Karvy Comtrade.

Traders have estimated guar output of 6.5-8 million bags (1 bag=100 kg) this year as against an earlier forecast of 8.5-9 million bags.

The contract may face minor resistance at Rs 1,840.

"However, huge arrivals of new crop of around 80,000 bags (1 bag=100 kg) against 60,000-65,000 bags earlier, may restrict major upward movement in prices for a short period," he said.

On the downside, December contract is likely to find support at Rs 1,750 rupees in the next few days, he said.

A lot of arbitrage trade is happening in guar seed, thereby keeping prices range-bound, the analyst said.

Currently, spot guar seed is trading at Rs 150 discount to December futures, offering good arbitrage for traders.

Although the long-term trend is expected to be bullish on improvement in export demand, prices may remain under pressure of higher arrivals and ample stocks in exchange warehouses, said a Jodhpur-based exporter.

"There is good demand from upstream global crude oil companies as well as stockists in the long term, but not enough to support a major upside in prices immediately," the exporter said.

Today, spot markets were trading mixed on lack of triggers.

In Jodhpur, guar seed prices were at Rs 1,665.65 a quintal, down Rs 3 from Wednesday.