Wheat futures prices may remain weak over the next few days mainly on restricted buying interest amid huge stocks with Food Corporation of India (FCI) and state government agencies
Wheat June 2009 futures on the National Commodity & Derivatives Exchange (NCDEX) fell by nearly Rs 35 over eight trading session to trade at Rs 1,105 a quintal on limited buying support.
On Wednesday, prices quoted below Rs 1,100 mark a quintal. Significant volumes were witnessed with an increase in the open interest at 17,350 tonne compared with 6,610 tonne two days back.
?Futures prices are still higher than the spot markets. I think prices may remain under pressure amid slow trades. Buyers have reserved their buying thanks to huge stock base with government agencies. Other hand, spot prices are also weakening slowly on lack of fresh buying. Big MNCs are currently away from the market,? a local trader said.
Spot prices in the northern India also declined gradually and are quoting below minimum support price (MSP) level in some part of Uttar Pradesh and Rajasthan mainly due to restricted buying. Spot price in Delhi market was quoted at Rs 1,088 a quintal as against MSP level of Rs 1,080.
Among the major trading in north India, spot prices were quoted lower at Rs 1,045 at Kanpur mandi, Rs 1,020 at Bareilly mandi and Rs 1,074 a quintal in Kota market.
?Fundamentally, there is a supply glut in both the Indian and global wheat markets. Thus, from the longer term perspective, wheat prices are expected to remain bearish,? analyst with Angel Commodities said.
The government is not in hurry to lift wheat exports curbs which will keep price under check. The quantitative restriction of 20 lakh tonne on wheat export may soon be waived by allowing free trade as there is a record procurement of the food grain this year, trade sources said.
In the short to medium term, prices are likely to fall further due to bumper crop in the current season and government agencies have procured huge stocks in the domestic market due to a record production, analyst said.
It can be noted that huge wheat stocks (13-14 million tonnes as on 1 April) with the government against the normal 4 million tonnes and higher procurement target 24.4 million tonnes ensures that wheat prices in the domestic market are unlikely to shoot up in the longer term.