Chana futures recovers on rain concern, outlook still bearish

Written by fe Bureau | Mumbai | Updated: Mar 31 2009, 05:57am hrs
Chana futures on the national commodities bourses, MCX and NCDEX have recovered smartly on the first day of the week mainly on speculation that recent rains in the major chana growing states Rajasthan and Madhya Pradesh may harm the standing crop and may delay fresh arrivals in the physical market.

NCDEX chana (Delhi) April futures increased by Rs 9 to trade at Rs 2,201 per quintal on Monday from previous day's level while MCX chana (Delhi) April contracts also rose by Rs 10 to trade at Rs 2,210 per quintal on some short coverings, a trader said.

Earlier, chana futures fell by nearly Rs 80 or 3.5% over the two weeks on reports of higher crop and pulses ban extended for one more year. Futures prices recovered on reports that recent rains affected the crop in the Rajasthan and Madhya Pradesh but a projected 13.7% rise in output may cap the gains, Tarun Satsangi, AVP, Bonanza Commodity Broker said.

In short term, weather situation in main chana growing areas will be the deciding factor while long term fundamentals are still bearish, he said.

Firm demand from millers and stockists were noticed during the week-end. Desi chana traded in the range of Rs 2,150-2,175 per quintal at major markets of Rajasthan and Madhya Pradesh. Arrivals would drop considerably in April, giving reason for prices to rise. In the medium term we maintain our bullish view on chana, analyst with Sharekhan said.

Impact of rains on the crop is not yet known. Fresh arrivals in Rajasthan will start next month, a local trader said.

In NCDEX April futures counter, immediate support is seen at Rs 2,193 and resistance is seen at Rs 2,255, analyst said.