The prices are likely to firm up further during the new April futures contract expected to begin from Monday (December 21) at the Ahmedabad Seed Merchants' Association (ASMA).

Castorseed futures' trading is gaining momentum, traders said. Brokers are keenly watching the futures trade. The February futures opened last week at Rs 1,551.25 and dropped to Rs 1,421 recently. Since then prices are gradually increasing. It is hovering in the range of Rs 1,505-1,520. Due to backwardation charges of Rs 150 (indicating spot prices are higher than in futures) speculative buying from exporters seen lower.

In the spot market, castorseed prices are seen bottoming out after touching Rs 2,500 last August. They had plummeted to Rs 1,550, only to recover to Rs 1,700 last week. Brisk buying by the seed crushers and exporters has halted the price slide.

According to a trader with oneMumbai-based multinational, large miller- cum-shippers are buying seeds to cover their export commitments.

Anticipating future demand, the seed crushers have resumed their activities which had been closed since past few months on slack demand. Seed arrivals are steady but demand is seen rising, said market sources.

Technical outlook: As of now, the castorseed market has bottomed out, feel technical analysts. From the peak of Rs 2,500, castorseed prices had dipped to Rs 1,550, a single move of Rs 950. "At least 33 per cent of retracement is essential, hence, prices should go to Rs 370-375, to complete the correction", said one analyst.

Momentum indicators also support this view. In the daily chart, the 140-day RSI touched near 25, indicating oversold positions. The MACD indicators turn upward which indicates bullish break out. In the monthly charts too, MACD is still positive, which indicates long term bull trend is still intact.

In the parallel futures market at Babhar, prices soared to Rs 315.50(per 20 kg) from the recent low of Rs 297.50. The future trading witnessed wild swing in prices. Here too, technical outlook appears bullish. MACD is positive, fast stochastic has given sale signals, but slow stochastic gives strong signal.

In the daily chart, the ascending triangle is taking place, it seems, break out above Rs 316 will confirm the bull run.

Bahbhar futures will close on January 5. There is backwardation of Rs 9-11. If spot price do not fall, futures should rise to converge with spot prices. (Bhabhar futures is quoted in terms of 20 kg and minimum lot of volume is 500 kg).

In the export trade, there is a sort of tug-of-war between exporters and overseas buyers, where buyers are still quoting the prices at which it is difficult to make an export commitment. Exporters, after burning their fingers in last year's cornering drive, do not seem to be wiling to repeat last year's mistake. This points to a shift in balance in favour of Indian players, where, a multinational conglomerate is saidto hold command.

Mumbai-based largest oil exporter has joined hand with the multinational who has interest in detergents and icebreakers, it is believed.

"It is this conglomerate who wants to become mammoth in each and every part of Indian trade," said the analyst quoted above. "Naturally, castorseed cannot be excluded from its portfolio."

Approximately 20,000 tonns of export commitments of castor oil is seen unfulfilled. Fresh commitments are yet to be made; exporters and overseas buyers are testing each other's patience to get a good bargain.

Meanwhile, brokers at ASMA are eagerly waiting for election to be convened on December 30. Hectic parleying activities are is going on between factions of the local broking community. What is more, in order to get a semblance of control in the small castorseed economy, even some of the upcountry players have filed their nominations for directorship on the highly factionalised ASMA. Brokers are keenly awaiting the outcome. Little wonder therefore, the nextelections at ASMA are going to become a prestigious issue.