February 3, 2014 / 1:32 PM / 4 years ago

India guar set for further falls; sugar underpinned by low output

MUMBAI, Feb 3 (Reuters) - Guar and oilseeds futures are among those expected to open lower on Tuesday after a bearish performance on Monday, as supplies look strong, while sugar could gain further after news that output so far is down 17 percent.

Guar seed futures fell for a fifth straight session on estimates of higher production and supplies from the new season harvest as well as sluggish demand.

* "Most of the farm commodities are likely to open weak on Tuesday on subdued demand. Higher carry-forward stocks and increased production in guar seed are weighing on sentiment," said Chowda Reddy, a senior analyst with Inditrade Derivatives and Commodities.

* Reddy expects the February contract to test support at around 4,550 rupees in a day or two.

* The February contract ended 3.68 percent lower at 4,705 rupees per 100 kg on the National Commodity and Derivatives Exchange (NCDEX), after hitting a low of 4,690 rupees, a level seen last on Jan. 7

OILSEEDS

Soybean futures dropped following weak cues from soybean futures in the U.S., where they are expecting a bumper South American crop and sluggish demand in the home market. Prospects of higher rapeseed production in India and conducive weather also added to the downside.

* Analysts and spot traders expect oilseeds and soyoil futures to open on a weak note on Tuesday.

* Soybean production in Brazil and Argentina is likely to be a record this year.

* The key March soybean contract ended down 0.81 percent at 3,786.5 rupees per 100 kg on the NCDEX.

* The March soyoil contract ended down 0.87 percent at 666.45 rupees per 10 kg, while the rapeseed contract for April eased 0.51 percent to 3,287 rupees per 100 kg.

SUGAR

News of a sharp drop in production pushed Indian sugar futures higher on Monday and they are expected to continue to trade up in the next session, helped by continuing hopes the government will provide incentives for raw sugar output.

* Indian sugar mills produced 11.54 million tonnes of the sweetener between Oct. 1 and Jan. 31, nearly 17 percent lower than a year earlier.

* The key March contract on the NCDEX ended up 1.06 percent at 2,677 rupees per 100 kg. It fell to 2,630 rupees on Jan. 30, the lowest level since June 22, 2011.

TURMERIC

Turmeric futures were the top gainers on the NCDEX on Monday on fresh overseas demand and some concern about the quality of new supplies due to excessive rains during harvesting.

* The most-actively traded turmeric contract for April delivery ended up 1.86 percent at 7,342 rupees per 100 kg on the NCDEX, after hitting a high of 7,390 rupees.

CHICKPEAS

Chana, or chickpea, futures hit a contract low on Monday because stocks are high and there is more land under cultivation with the crop this year, while demand is sluggish.

* Chana futures are likely to open on a bearish note in the next trading session as supplies remain high, spot traders said.

* The April chana contract ended 0.96 percent down at 2,983 rupees per 100 kg after hitting a contract low of 2,976 rupees earlier in the day.

JEERA

Cumin seed futures ended lower after hitting a contract low, weighed down by large stocks and prospects of higher production due to a larger area planted with the crop.

* The actively traded jeera contract for March delivery ended 0.63 percent lower at 11,827.5 rupees per 100 kg on the NCDEX, after hitting a contract low of 11,780 rupees.

Closing prices on Monday:

Contract closing price Pct chg

(Rupees per 100 kg)

Wheat (March) 1,584 + 0.32

Maize (Feb) 1,184 - 0.25

Reporting by Meenakshi Sharma; Editing by Sunil Nair

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