Chana dropped Rs 59 and settled at Rs 3549 per quintal due to rising arrivals in the spot markets and worries the government might curb trading to rein in prices. Production of chana, or chickpea, is expected to drop to 7.66 million tonnes in 2011/12 from 8.22 million tonnes a year earlier, farm ministry data showed. The production of yellow peas, which is used as substitute for chana, in Canada was also lower in 2011, and this is also supporting the prices. The total daily arrivals of chana were hovering at the levels of around 3 lakh bags in the entire major mandis against 2.80 lakh bags on last day. Expected fall in production in Chana and overall Pulses was reported as per 2nd Advanced Estimates. Pulses output is expected to fall by 5.26% to 17.29 mln tonnes vs 18.24 mln tonnes in 2010-11. Chana production is expected to fall by 6.8% to 7.66 mln tonnes as compared to 8.22 mln tonnes last year. Lower acreage contributed for this fall as per reports (Chana acreage reportedly fell by ~4% to 89.57 lakh ha vs 93.41 lakh ha same period last year. As per Rajasthan farm department’s first advance estimates for Rabi crops, Chana output is estimated down 7.8% at 14.76 lakh tonnes in 2011-12 season vs 16 lakh tonnes in 2010-11. In Delhi spot market, chana jump up by 11.15 rupee to end at 3500 rupee per 100 kgs. The volume was noted at 95260 lots. Support for chana is at 3506 below that could see a test of 3462. Resistance is now seen at 3634 above that could see a resistance of 3718.

Trading Ideas:

Chana  trading range for the day is 3462-3718.

Chana dropped due to rising arrivals in the spot markets and worries government might curb trading to rein in prices

Production of chana is expected to drop to 7.66 mln tns in 2011/12 from 8.22 mln tns a year earlier

NCDEX accredited warehouses chana stocks gained by 692 tonnes to 13420 tonnes.

In Delhi spot market, chana jump up by 11.15 rupee to end at 3500 rupee per 100 kgs.