Emergence of La Nina may bring bountiful rains in August
While everyone is glued to hear about likely heatwaves this month, which may not be as worrisome, India Meteorological Department hopes that there may be bountiful of monsoon rains in August this year due to La Nina, which if proved correct, will bring a big relief to the farmers. Last year, the rainfall in August was the lowest for the month since 1901 as the deficit was 36 per cent.
Since July has highest 32 per cent share in the JuneSeptember monsoon season in a normal year, a small deficit in August is manageable for the crops. However, agriculture experts also caution the negative impacts of heavy rainfall on crops as they say flood has been seen to bring more damage than a drought.
“After driest August in Maharashtra last year, there were reports of farmers using standing sugarcane crop for fodder. But, rains after September changed the entire situation and the State is now the top producer of sugar in the country this year,” said an industry expert.
Briefing media on the likely temperature and rainfall during May, India Meteorological Department's Director General, Mrutyunjay Mohapatra,
Experts caution against the negative impact of heavy rainfall on crops
predicts 8-11 heatwave days in south Rajasthan, west Madhya Pradesh, Vidarbha, Marathwada and Gujarat and 5-7 heatwave days in remaining parts of Rajasthan, east Madhya Pradesh, Punjab, Haryana,
Chandigarh, Delhi, Uttar Pradesh and some parts of Chhattisgarh, interior Odisha, Gangetic West Bengal, Jharkhand, Bihar, north interior Karnataka and Telangana.
Normally, northern plains, central India and adjoining areas of peninsular India experience around three days of heatwave in May.
HEATWAVE FORECAST
According to IMD forecast, above normal maximum temperatures are likely to be seen over most parts of the country during May, except northeastern region, some parts of north-west and central India, where maximum temperatures may be normal to below normal.
Mohapatra said that the prolonged heatwave spell over east, south peninsular India in April was mainly due to the absence of thunderstorms and a persisting anticyclone at lower levels over the west central Bay of Bengal and the adjoining eastern coasts of India. This caused sea breeze to cut o over Odisha and West Bengal on most days, he added.
South peninsular India experienced its second highest average temperature of 31 degrees Celsius in April since 1901, accompanied by 12.6 mm of rainfall in April, the fifth lowest since 1901. The IMD chief noted that above-normal maximum temperatures is becoming more frequent in this region after the 1980s. Moreover, the east and northeast region saw its highest minimum average temperature of 22 degrees Celsius since 1901.
Lead futures (May contract) on the Multi Commodity Exchange (MCX) rallied sharply over the past month. It rebounded from the support at ₹180. On Tuesday, the contract closed at ₹191.55 per kg.
Although it has seen a fresh breakout and the recent trend has been up, lead futures has a strong barrier at ₹195. The resistance has been holding true since 2021, making it a significant one.
The chart of the continuous contract of lead futures shows that it has been oscillating between ₹173 and ₹195 since 2021.
Given the above factors, it is safe to assume that the rally in lead futures could be nearing its end, for the short-term. A fresh leg of downswing can begin if the May futures slip below ₹190, where the 20-day moving average lies.
TRADE STRATEGY
Since ₹190 can oer a support, we suggest traders to initiate short positions after this level is breached. Target and stop-loss can be placed at ₹180 and ₹195, respectively.