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GUAR SEED

NCDEX Guar Seed future price has been trading sideways in the month of February so far amid reports of dull demand in the domestic market and worries of exports of Guar split from India especially in the European Union and United States. Second wave of covid-19 and lockdown situation in the European Union and United States had led to fall in demand for guar split in various industries. Strengthening Rupee as compared to dollar had also put lot of pressure on Guar seed and Guar Gum exports in India. By 11th February, NCDEX Guar seed price closed at Rs.3956/quintal, similar compared to Rs.3963/quintal reported on 31stjJanuary. Fundamentally for the month ahead, we are estimating NCDEX Guar Seed futures to trade bullish as the global oil prices is forecasted to incline after OPEC Member countries have maintained the supply cuts and OPEC has forecasted for better-than-expected oil demand data from India in fourth quarter of 2020-21. This is expected to ease concerns regarding the export demand for Guar Gum from India. Higher imports of Crude Oil to China on a monthly basis could also support Guar prices. Moreover, India's guar gum exports improved in the month of December 2020 by +32% to 17,644 tonnes compared to 13,414 tonnes during November 2020. Furthermore, easing lockdown in most of the states in India could boost the demand in the textile, food and pharmacy industries especially during the coming Holi festival and later in the Ramadan season. Recovering Indian economy is expected to revive the demand for the said commodity in the manufacturing sector. Since, the we are in the Rabi harvesting season of 2020-21, prices of guar complex are likely to witness uptrend, with possible supply tightness due to lower stocks inthe first quarter of the year 2021 after the reports of lower production by 19-20% that came from the states of Gujarat, Rajasthan and Haryana. Hence, we can expect bullish trend in NCDEX Guar Seed futures for the month ahead.

On the daily timeframe, NCDEX Guar Seed (Mar) has been trading in a “Rectangle Formation” which indicates choppiness in the counter. But, price has been trading below its “Parabolic SAR" which signals weakness. Moreover, price has sustained below its “Ichimoku Cloud” which indicates that the bears arein control, But, price is trading above its 200 Day “Simple Moving Average” which indicates positive momentum in the counter. Additionally, the counter's Bollinger Bands have contracted which indicates decreased volatility. So, based on the above mixed technical structure, we can expect a sideways to bearish movement in NCDEX Guar Seed (Mar) futures for the month ahead. On the higher end, the price may find the resistance around 4200 levels, while on the lower end; it may test the support at 3800 levels.

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