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CASTOR SEED

NCDEX Castor Seed Futures traded rangebound to mild bullish during the June month so far, owing to lower buying of the new crops from the states of Gujarat and Rajasthan. However, prices has also witnessed support due to rise in exports of castor oil and castor meal in Europe and United States. Higher exports to China amid easing lockdown in their country had also sentimentally supported the spot and future prices, By 24th June, NCDEX Castor Seed futures closed at Rs.5092/quintal, higher by 1.35% compared to Rs.5024/quintal reported on 31st May.

Fundamentally for the coming month, we are expecting NCDEX Castor Seed futures to trade bullish as the APMC markets in the major mandis of Deesa, Palanpur and Patan in Gujarat has reopened due to covid-19 easing of restrictions adding demand in the domestic market. Moreover, prices of other vegetable oils such as Crude Palm Oil and Soy Oil have started to rise and is estimated to support the prices of castor seed as well. Moreover, exports to China, US and Europe has remained steady over the months and expected to rise in the month of July with higher vaccination process worldwide. Due to less availability of Hybrid Castor seeds the productivity this year has gone down by 10%. As per SEA associated agriculture research, the total production of Castor seeds for castor seed is down to 17.5 lakh tonnes, lower compared to 19 lakh tonnes earlier estimated in, which is anticipated to come down to 13-15 lakh tonnes in the year 2020-21. Moreover, NCDEX Castor Seed Futures can find strength, as we are approaching the main season of sowing of Castor Seed in Gujarat and Rajasthan in July month onwards. Based on recent traders report, castor sowing acreage is expected to decline by 10-15% in the major states of Gujarat and Rajasthan due to higher available prices of cotton and soybean respectively causing switching in crops.

On the daily chart, NCDEX Castor seed (Aug) future has been rising continuously with Higher Highs and Higher Lows formation from the last couple of weeks, In addition, the price has also given breakout of bullish Pennant pattern with large Bullish Engulfing candlesticks pattern, which indicates bullish movement in the near future. Moreover, the price has also taken support of the 50 Exponential Moving Averages, which confirms the continued bullish trend. In addition, the RSI indicator has also sustained above 50 levels, which supports the upward trend. Furthermore, the price has been taking support of Ichimoku Cloud which indicates bullish momentum in the near future. Hence, based on above technical structure one can initiate a long position in NCDEX Castor Seed (Aug) future at CMP 5160 or a fall in the price till 5010 levels can be used as buying opportunity for the upside target of 5850. However, the bullish view will be negated if NCDEX Castor seed (Aug) future close below the support level 4800.

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