Jeera Gains as There is a Possibility of Damage to the Crop due to Rain

Jeera yesterday settled up by 2.84% at 18825 as there is a possibility of damage to the cumin crop due to rain and cloudy sky. The rise in export demand, the decline in the 2020-21 production as well as carryover stock estimates kept trade sentiments strong. The production in Syria had fallen by roughly 25-30 percent in 2021, versus the previous year because of political instability. Exports of Indian cumin usually decrease after July-August every year when Turkey and Syria used to supply the global consumers. The estimated jeera production for the crop year 2020-21 may be lower by 30-35% on account of decline in sown area and lower yield (because of adverse weather prevailing) in the major producing states Gujarat and Rajasthan.  
 
The cropped area has fallen due to a shift towards other crops like Cotton, Soybean, and Mustard, which offered lucrative returns last year. The export of cumin is increasing continuously and in the coming days, the export sales are expected to continue with greater quantity. The carryforward inventory is pegged lower versus last year, as consumption is likely to remain stable while the production estimate is revised lower. Considering the production estimate dropping by nearly 30-40 percent over last season, and stable demand situation, there are expectations of prices to touch even 20000 levels this year. In Unjha, a key spot market in Gujarat, jeera edged up by 649.65 Rupees to end at 18205.9 Rupees per 100 kg. 
 
Technically market is under short covering as the market has witnessed a drop in open interest by -1.42% to settled at 11061 while prices up 520 rupees, now Jeera is getting support at 18525 and below same could see a test of 18225 levels, and resistance is now likely to be seen at 19030, a move above could see prices testing 19235.  

Trading Ideas:
# Jeera's trading range for the day is 18225-19235.
# Jeera prices gained as there is a possibility of damage to the cumin crop due to rain and cloudy sky.
# Rise in export demand, the decline in the 2020-21 production as well as carryover stock estimates kept trade sentiments strong.
# Market is expecting the overall area under Jeera to reduce by 50% for next marketing year
# In Unjha, a key spot market in Gujarat, jeera edged up by 649.65 Rupees to end at 18205.9 Rupees per 100 kg.