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OUTLOOK-Indian wheat likely to rise on stock drawdown, export expectations

Source : REUTERS
Last Updated: Wed, Feb 27, 2013 04:20 hrs

NEW DELHI, Feb 26 (Reuters) - India's wheat futures are likely to rise this week due to brisk export deals but prices are expected to ease in March and April when the new season harvest begins.

The government is likely to allow extra exports from its warehouses after permitting 4.5 million tonnes in 2012 to cut stocks at brimming silos due to bumper harvests since 2007.

Private exporters are also sealing export contracts.

Traders have jumped in to take advantage of attractive global prices by sealing deals to export up to 750,000 tonnes of the new season wheat, kicking off overseas sales for the harvest to start next month.

But yet another bumper harvest is likely to keep stocks substantially high. Left with no other option, the government will have to stock a large quantity in open fields.

"The March contract will trade higher due to the export deals and lack of delivery pressure for the March contract but going forward prices will fall, especially in March and April," said Chowda Reddy, a senior analyst at JRG Wealth Management.

On Tuesday, the most-active wheat contract for March delivery on the National Commodity and Derivatives Exchange closed down 0.39 percent at 1,522 rupees per 100 kg.

India's wheat output could slip about 3 percent in 2013 from a record 95 million tonnes in the previous year. Output will still be higher than an annual consumption of about 76 million tonnes.

India's wheat stocks at government warehouses on Feb. 1 were 30.8 million tonnes, nearly four times the official target of 8.2 million tonnes for the quarter ending March 31. (Reporting by Mayank Bhardwaj; Editing by Anand Basu)



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