Sugar To Trade Downwards, Chana To Pick Up On Weak Arrivals

The downside in sugar futures may remain capped as India has removed any limit on sugar export volumes for now. In other words, sugar exports have been freed, and there will not be any quantitative restriction.

Wheat futures may trade with a negative bias on reports that The Ministry of Agriculture's third advance estimate has raised India's food grain production for the Indian crop year 2011/12 to a record 252.6 million tonnes on record production of rice and wheat.

Chana futures are likely to trade higher on buying by local traders and dal millers, amid declining arrivals in the spot markets, and on reduction in delivery default penalty by the exchange. Moreover, weakening of the rupee is also adding to the price increase, making imports costlier.

Jeera Could Strengthen On Domestic Demand

Jeera trading range for the day is 12231-13155. Support for jeera is at 12539 below that could see a test of 12231. Resistance is now seen at 13002 above that could see a resistance of 13156.

In Unjha, a key spot market in Gujarat, jeera gained 120.6 rupees to end at 12850 rupees per 100 kg. Prices in the futures settled at the upper freeze of 4% on Wednesday. Carryover stocks of jeera is expected to be around 7-8 lakh bags as compared to 4-5 lakh bags in the last year.

Jeera futures in the intra-day may trade firm due to demand from the overseas and local buyers. In the medium to long-term (June-July 2012) prices are likely to remain weak owing to bumper production this season. Prices will also take cues from weather in Syria and Turkey, the other major producers of the spice where the sowing is almost complete.

Unjha markets witnessed arrivals of 18,000 bags, higher by 1,000 bags as compared to previous day while off-takes stood at 18,000 bags on Wednesday.

The total arrivals slipped to 20,000 bags from 20,500 bags, while demand was seen for around 20,000 bags. In Unjha, a key spot market in Gujarat, jeera gained 120.6 rupees to end at 12850 rupees per 100 kg. The contract made intraday low of Rs 12385 a kg and high of Rs 12847.5 a kg.