Reviewing the weekly price behavior of the agricultural commodities, spices and guar complex markets traded with a softened tone at the beginning of the week followed by a moderate pull towards in the later half. Chana was range bound but downside was capped throughout the week. Early part of the week was moderately bullish for chana.
Mentha oil on the other hand was the only futures that traded with an upward bias for the entire week. Bad weather had discouraged production of mentha oil. Production of mentha oil is carried out in open fields therefore adverse weather normally hampers the production activity. Cotton market was bullish till Thursday except for a modest fall on Friday amid profit taking activity. Oil complex were strong during early part of the week but towards emerging bearish cues from overseas markets towards latter half put pressure over the price levels.
The Indian Meteorological Department (IMD) expects rise in maximum temperatures over northwest India by 2-4°C during next 3 days. No significant change in maximum temperatures over rest parts of the country during next 5 days. Fairly widespread to widespread rainfall with isolated heavy falls may continue this week, over most parts of Northeast and adjoining East India. On the other hand, scattered rainfall along the west coast and isolated to scattered rainfall is likely over remaining parts of the country. Subdued rainfall/weak monsoon phase is predicted over Central, peninsular and northwest India.
Meanwhile enhanced rainfall activity may be observed along the Himalayan foothills regions of north Bihar, North Uttar Pradesh and Uttarakhand for next 4-6 days. Overall, the weather situation may not support adequate rainfall in major producing areas of the Kharif season crops like soybean/cotton or guar seed during this week.
As unlocking activity may enhance in coming days, trade interest is expected to improve for most of the commodities. However, it will take few more weeks to monitor the situation in context to drop in the pandemic cases. Until then traders in physical markets may prefer the transactions for short-term needs mainly. Weather situation on the other hand does not seem in favor of adequate rainfall in major areas producing Kharif crops like castor, mung, soybean, cotton or guar seed.
These aspects may encourage buyers to enter the futures markets after moderate price fall for next few days, but the gains are most likely to be limited in the commodity derivatives.
