Chana shows signs of strain, more trouble brewing

Pulse prices continue to reel under pressure since last year.

Take chana, for instance, whose prices are ruling below government minimum support prices.

Domestic and export demand for pulses stays softer than expected. Considering the arrival of new crops in mandies, we expect the prices to see more pressure in March, which will test the crucial support of Rs 3,940 in coming days.

Chana, a major rabi pulse crop of India sown during October-November, is harvested in February and March. Its major producers are Rajasthan, Madhya Pradesh, Maharashtra, Karnataka, Uttar Pradesh and Andhra Pradesh.

Average area sown for gram read 96.55 lakh hectares. This year, total sowing is done in around 96.60 lakh hectares, which is equal to the average sowing of the country, but less than last year’s 107.57 lakh hectares.

Total pulse sowing covered approximately 156.30 lakh hectares, less than last year’s 166.11 lakh hectares. Harvesting has started in Madhya Pradesh, Rajasthan and Maharashtra, with arrivals taking off in the mandies.

Technically, chana formed double top on the daily chart in February, reversed the trend from the top of Rs 4,300 and broke below Rs 4,100 on February 28. The crop is banking on crucial support of Rs 4,100 and any close and continuity below that level will bring about more pressure. This means the prices could test Rs 4,030-3,980-3,940 in days ahead.

Upside move is possible only when it closes and sustains above Rs 4,220. In that case, it could show strength towards Rs 4,300 again, but such chances are very less. We expect current negative trend in chana to continue and any bounce in the prices towards Rs 4,100-4,120 will be a good opportunity to sell again, keeping a strict stop loss above Rs 4,220 on a closing basis with the downside target of Rs 4,030-3,980-3,940.

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Sell Chana Rs 4,100-4,120 Stop loss above Rs 4,220 (closing basis) Targets Rs 4,030-3,980-3,940.

(The writer is Director, IndiaNivesh Commodities Pvt)



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