Guar seed up on steady demand

Guar seed and guar gum futures on National Commodity and Derivatives Exchange are seen positive for five to six days on reports of differing crop output estimates amid steady demand, analysts and traders said.

Also, reports of a positive outcome of European Union official's visit regarding guar gum exports from India have lifted sentiment, a Mumbai-based analyst said.

Rajasthan government had recently estimated guar seed output at 8.9-9 million bags (1 bag=100 kg) compared with 7-7.5 million bags a year ago that has been weighing on prices so far.

However, traders' estimates pegged guar output at 7.5-8 million bags, leading to a variance in crop projections.

Guar seed contract for November delivery is seen firm in the next few days in the range of Rs 1,640-1,744 a quintal, if it breaches the first essential resistance level of Rs 1,723 intraday today, said Meenakshi Sharma, analyst, Indiabulls Commodities.

However, overall long-term trend is likely to be down on weak technical factors.

November guar seed contract may find support at Rs 1,677 a quintal and face a crucial resistance at Rs 1,777 during the next few days, said Suresh Mantri, analyst, Ventura Commodities.

Over the last few sessions, open interest in guar futures has been declining continuously. Open interest in guar seed front-month October contract has fallen by 5,710 tonnes to 2,3270 tonnes currently and the same in November has decreased by 9,220 tonnes to 84,830 tonnes.

Spot markets, however, are likely to be range-bound with a positive bias on varying crop estimate coupled with fresh arrivals of 30,000-35,000 bags (1 bag=100 kg) a day in the country, traders said.

Spot prices are seen firm as traders see guar seed output lower than that of 'guari' seed. 'Guari', largely grown in Haryana, is a variety of guar and has a smaller seed compared with guar.

However, the rupee's appreciation, which is deterrent to exports, may cap the sharp rise in prices.

Rupee has risen 12 per cent against the US greenback from January.

In Jodhpur spot market, guar seed prices were quoting at Rs 1,665 a quinatl today, up Rs 10-12 from Wednesday, while guar gum prices were at Rs 4,313, marginally up from the previous day, according to NCDEX data.