The Hindu Business Line : Rise in mentha oil futures may be capped

Chennai May 27 Upward movement in mentha oil futures is likely to be capped, while spot prices are likely to decline on new arrivals pressurising the market.

According to Angel Commodities Pvt Ltd, mentha oil June contracts on MCX are likely to be range-bound between Rs 500 and Rs 530 a quintal. On MCX, the contract ended at Rs 522 on Saturday, while on NCDEX, it closed at Rs 518.

Weakening Dollar

Spot prices (Chandausi) ruled at Rs 575.50 a quintal. Pointing out to mixed sentiments in the markets, both domestic and gutures, it said the weakening of the dollar had resulted in a sharp fall in the profit margin of exporters. This has resulted in exports slowing down as exporters had to lower their costs.

However, good demand was expected from exporters from the new crop and arrivals would put pressure on prices in the Barabanki region.

The broking services firm said refined soyabean oil prices were expected to improve on firm overseas market, while guar futures were expected to move in a narrow range with a positive bias.

"Emergence of fresh demand for guarseed at lower levels is likely to support the prices but rising stocks in the exchanges could cap the gains," it said. Refined soyabean oil was quoted at Rs 580 for June contracts on MCX and NCDEX.

COPPER SHORT-COVERING

Meanwhile, Kotak Commodities Services Ltd, in its outlook, said the coming week could see more short covering in copper that had developed in the previous weeks and prices could move upwards.

Copper prices would be driven by fund activity and short-covering seen on Friday could bring stability into the system that saw prices dropping 11 per cent since the correction began two weeks ago.

Copper on MCX could take support at Rs 295.6 a kg levels with strong resistance coming in at Rs 307-308. But if prices decline, it could go down to Rs 290 and further to Rs 284. Copper June contracts closed at Rs 299 on NCDEX and on MCX during the weekend.