MCX Cardamom market under short covering

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Cardamom on MCX settled up by 0.96% at 1301.8 amid pick up in physical demand for cardamom in the domestic spot market. Growers are happy to hold back their produce as the crop is going to be less than 50 per cent this season following the failure of both the south east monsoon and the North-East monsoon this year. Total arrivals last week at five auctions stood at 144 tonnes as against 416 tonnes the week before and the sales were at 136 tonnes. Exporters also stayed away from the market as the prices were ruling much above their affordable levels.

Total arrivals during the season from August 1 up to November 19, 2016 were at 7,924 tonnes and sales were at 7,462 tonnes. Farmers did not want to sell fearing delayed receipt of sale proceeds while the buyers were not enthusiastic to buy for want of sufficient funds and that in turn led to the suspension of over 50 per cent of the auctions last week. India’s production is likely to fall by 30-40% in 2016-17 due to unfavourable weather conditions. Prolonged dry weather occurred in the Idukki district, which has severely affected yield of the crop, which was in the flowering stage at that point of time.

Technically market is under short covering as market has witnessed drop in open interest by -4.08% to settled at 517 while prices up 12.4 rupee, now Cardamom is getting support at 1293.3 and below same could see a test of 1284.7 level, And resistance is now likely to be seen at 1312.2, a move above could see prices testing 1322.5.

Trading Ideas:
–Cardamom trading range for the day is 1284.7-1322.5.

–Cardamom prices gains amid pick up in physical demand for cardamom in the domestic spot market.

–Total arrivals last week at five auctions stood at 144 tonnes as against 416 tonnes the week before and the sales were at 136 tonnes.

–Exporters also stayed away from the market as the prices were ruling much above their affordable levels

–Cardamom prices in spot market gained by 8.30 rupees and settled at 1347.70 rupees.

Courtesy: Kedia Commodities

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