Mentha Oil To Trade Downwards

Mentha oil trading range for the day is 520.2-520.2. Support for menthol is seen at 1508.3 and below could see a test of 1455.2. Resistance is now likely to be seen at 1631.4, and a move above could see prices testing 1701.4.

Spot prices are now hovering in the range of Rs. 1680-1760 per Kg. No major activity is running at spot front as every one is waiting for fresh crop to hit the market. Futures prices started the day on higher not on fresh buying in far month contracts amid April contract expiry.

Traders expect an overall bullish trend to prevail in the markets as arrivals in the mandis remained moderately low. Expectations of higher sowing activities this year put pressure on the markets even as low stocks and lower arrivals were reported in the mandis. Rising export demand amidst lower stocks however are expected to support the prices in the medium term.

According to spot market sources, the overall acreage is forecast to increase from 1.75 lakh ha to 2.1 lakh ha this year. Sowing of mentha in Western UP is expected to increase by 30% as compared to last year, while sowing in all regions is expected to increase by 20%.

Chana To Remain Firm

Chana trading range for the day is 3734-3904. Support for chana is at 3790 below that could see a test of 3734. Resistance is now seen at 3875 above that could see a resistance of 3904.

Chana prices are expected to remain firm due to demand from the local stockiest. Further, lower output and thereby slow pace of arrivals may lead to further upside in the chana prices. In the short-term (2 weeks), we expect the chana May contract to trade in the range of Rs 3730 and Rs 3920 per qtl levels. Long-term fundamentals remain supportive for chana prices on the back of supply concerns caused by lower output and growing consumption.

The total daily arrivals of chana were hovering at the levels of around 1.90 lakh bags in the entire major mandis, unchanged from the last day. 

Base Metals Fall On US Dollar Strength, Oil On Rise In Inventory

Unfavorable economic data from the eurozone front led the European markets to trade on a mixed note today. European unemployment rate increased at its highest level in fifteen years to 10.9 percent in March with respect to 10.8 percent in February. European Final Manufacturing Purchasing Managers' Index (PMI) declined marginally to 45.9-level in April from 46-mark a month ago.

German unemployment change increased by 19,000 in March as against a previous decline of 13,000 in February. Italian monthly unemployment rate increased to 9.8 percent in March as compared to 9.3 percent in previous month. 

Gold prices witnessed a fall of around 0.6 percent till 4.30 pm IST today on the back of strength in the US Dollar Index coupled with mixed sentiments in the global markets due to weak economic data from the eurozone front. Additionally, a fall in crude oil prices also affected the inflation-led demand for gold which further led downside in the yellow metal prices. However, a weaker rupee led gains in gold prices on the domestic bourses. 

Spot silver prices dropped more than 1 percent till 4.30 pm IST today on the back of fall in gold prices, strength in the US Dollar Index and downside in the base metal pack. Rise in risk aversion in the markets also acted as a negative factor for white metal prices. However, depreciation in the Indian rupee cushioned further decline on the MCX today.

Strength in the US Dollar Index along with mixed sentiments in the global markets exerted downside pressure on the base metal prices on the LME today. Additionally, weak economic data from the eurozone increased tensions over Europe’s debt worries which also acted as a negative factor for metal prices.

Nymex crude oil prices declined by 0.5 percent today on the back of expected rise in US crude oil inventories coupled with unfavorable economic data from the European region. Additionally, a stronger Dollar Index also exerted further downside pressure on oil prices. 

However, MCX crude oil prices gained around 0.2 percent due to a weaker rupee and was trading at Rs. 5607/bbl after touching an intraday low of Rs. 5598/bbl till 4:30pm IST today. The US Energy Department (EIA) is scheduled to release it weekly inventories report today at 8:00pm IST and US crude oil inventories are expected to rise by 2.5 million barrels for the week ending on 27th April 2012.

Rising worries over Europe’s debt crisis due to unfavorable economic data from the eurozone front has led to weak sentiments in the global markets today and on account of this, the dollar is expected to remain strong. Taking cues from this, we expect precious metals, base metals and crude oil prices to trade lower today. 

In case of crude oil, expected rise in US crude oil inventories will also act as a negative factor for oil prices in the evening session. US ADP nonfarm employment change and factory orders data is expected to be on a negative side and if the data come as expected then this will lead to further downside in commodity prices.