Business Standard

Chana to stay firm on short covering

Image

Newswire18 Mumbai
Short-term prices may go up by 2%
 
Chana futures are likely to stay steady-to-firm in the next five to six trading sessions as short covering, ahead of expiry of the December contract, will support prices at the current level, analysts said.
 
Chana futures have fallen nearly 9-10 per cent in the past couple of weeks, and bouts of short covering may lift prices 1-2 per cent in the short-term, said Chowda Reddy, research analyst, Karvy Comtrade.
 
"The most-active January contract on the National Commodity and Derivatives Exchange may go up to Rs 2,250 a quintal from the current level (Rs 2,210)," Reddy said.
 
However, the major trend remains bearish, and prices may start falling again after the contract expires on December 20, Reddy said.
 
Chana fundamentals are also seen weak. Market expectations of lower chana acreage this season have not been met as the government on Friday said chana acreage had already reached over 6.6 million hectare, equivalent to acreage in the same period last year.
 
Howevre, Abhay Lakhwan, analyst, Religare Commodities, said, "Acreage in Maharashtra, Madhya Pradesh and Rajasthan is likely to be good, and any small loss in acreage will be offset by higher yield this year."
 
Andhra Pradesh is also likely to record bumper chana output in the current rabi season as the state government had distributed nearly 15,000 tonnes seeds to farmers for sowing, compared with 10,000-11,000 tonnes per annum previously, Reddy added.
 
Spot demand for chana is likely to remain weak, while supply of imported and local chana will continue to exceed demand, thereby keeping prices weak, analysts said.
 
However, spot prices are likely to move up around Rs 50 a quintal in the current week due to ongoing shortage of good quality chana for mills, Lakhwan said.
 
January contract has a firm support at Rs 2,180 a quintal, while resistance is seen around Rs 2,250, a Mumbai-based technical analyst said.

 
 

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Dec 11 2007 | 12:00 AM IST

Explore News