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GUAR SEED

NCDEX Guar Seed future price has been trading bullish in the month of May so far amid reports of steady demand in the domestic market and higher exports of Guar split from India especially in the European Union and United States. Though lockdown situation in the European Union and United States continues to prevail, positive economic data has revived the shale demand for Guar gum. Moreover, rising lockdown situation in India has also led to supply tightness in the local market. Panic buying had been witnessed in almost agriculture commodities which has simultaneously driven the Guar complex prices higher. By 17th May, NCDEX Guar seed price closed at Rs.4274/quintal, higher by 4.26% compared to Rs.4099/quintal reported on 30th April.

Fundamentally for the month ahead, we are estimating NCDEX Guar Seed futures to trade bullish as most of the cash market yards remained closed for COVID lockdown restriction. India’s March guar gum export figure once again remained positive, up by 12% to 20,127 tonnes compared to 17,915 tonnes during February 2021. We also expect the April-May export figures too to be higher compared to the same period last year. India’s guar split exports rose in the month of March 2021 by 12.5% to 3,334 tonnes compared to 2,964 tonnes during February 2021. The exports of guar gums seems to be gradually picking-up with gradual increase in the oilrig counts. Reopening of the US and European Markets due to faster vaccination process is another added factor to support Guar gum exports from India, There is considerably a good sign of gradual increase in oil rigs with surge in crude oil demand in recent months, which could increase in the overseas guar gum demand. But then, extreme bullishness in prices can be capped in the June month in case India’s monsoon sentiment becomes favourable for the Guar crop. Prices may also sentimentally decline in case other agriculture commodities showcase decline in the initial phase of monsoon.

Onaweekly timeframe, NCDEX Guar Seed (Jun) future has been trading in sideways trend from last couple of weeks and it has formed trend reversal pattern “Inverse head & shoulder. However, the price has shifted below the upper Bollinger Band which indicates some correction in the counter. In addition, the price has taken support of 200 weeks Exponential Moving Averages which confirms bullish trend for the long term. Moreover, an oscillator Stochastic RSI is also supportive for the long position with positive crossover. Furthermore, the RSI indicator has also sustain above 50 which indicate bullish strength in near term. So, based on above technical structure one can initiate a long position in NCDEX Guar seed (Jun) future at 4180 or a fall in the price till 4100 levels can be used as buying opportunity for the upside target of 4900. However, the bullish view will be negated if NCDEX Guar Seed (Jun) future Ce close below the support level of 3750.

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