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Mustard Seed

NCDEX Mustard Seed Future has witnessed a bullish trend in month of September so far owing to reports of rising demand of vegetable oils and continued lower stocks in the domestic markets in India. Moreover, high amount of RM seed crush reported in the domestic market for this year 2020-21 so far has supported prices in the last couple of weeks. By 22nd September, NCDEX Mustard Futures has closed higher by 4.98% at Rs.8607/quintal compared to Rs. 8198/quintal reported on 30th August. For the month ahead, we are expecting NCDEX Mustard seed futures to trade bullish with the reports of higher demand for Mustard Seed and oil in the ongoing festive season in India. Although, the global vegetable oils such as Crude Palm Oil and Refined Soy Oil continue to trade choppy amid lower buying in China with easing import duties in India. However, the overall closing stock scenario of RM Seed has been reported to lower which is expected to support prices in the coming weeks prior to the harvesting season. As per the USDA Data, global RM Seed production for the year 2021-22 has been reported at 69,970 thousand tonnes, lower compared to 71,808 thousand tonnes reported during the year 2020-21. The global opening and closing stocks has been reported at 5731 thousand tonnes and 4560 thousand tonnes respectively for the year 2021-22, lower by 1838 thousand tonnes and 1171 thousand tonnes respectively compared to the year 2020-21. A significant decline in the arrival of mustard stocks in the spot market prior to the upcoming sowing season is expected to support prices. Traders are forecasting major harvesting in Rajasthan to begin from November and December months.

On a weekly chart, NCDEX RM Seed (Oct) future has been rising continuously in a bullish channel with Higher Highs and Higher Lows formation from the last couple of weeks . In addition, the price has been trading above 50 Exponential Moving Averages, which point out positive trend for near future. Moreover, an oscillator Stochastic RSI also suggested positive crossover, which is again an upside confirmation. However, on a four hourly chart, the indicator Stochastic RSI suggested negative crossover, which indicates some correction in the counter till the level of lover band of channel. Hence, based on above technical structure we are recommending buy on dip strategy in NCDEX RM Seed (Oct) around 8370 or a fall in the price till 8310 levels, that can be used as buying opportunity for the upside target of 8790 . However, the bullish view will be negated if NCDEX RM Seed (Oct) future close below the support levels of 8145.

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