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OUTLOOK-Indian wheat seen steady on festivals, holidays

Source : REUTERS
Last Updated: Wed, Mar 27, 2013 00:13 hrs

NEW DELHI, March 26 (Reuters) - Indian wheat futures are likely to remain almost steady as trade is expected to be subdued due to festivals and a long holiday this week.

But prices are likely to fall next week as arrivals pick up.

Wheat harvesting will gather momentum in April and farmers are expected to produce 92.3 million tonnes, the sixth straight year of output surpassing domestic demand of about 76 million tonnes.

"Prices are likely to be steady as trade will be more or less muted because of festivals and holidays this week," said Chowda Reddy, a senior analyst at JRG Wealth Management.

As harvests roll in, the government will be struggling with massive stocks.

As part of its efforts to cut down unmanageable stocks, the government earlier this month allowed private traders to export up to 5 million tonnes of wheat from its overflowing warehouses, doubling the quantity of shipments first permitted in July 2012.

But the government needs to create additional room for the new season harvest and some traders believe it may allow more exports.

India's wheat stocks at government warehouses on March 1 were at 27.1 million tonnes, more than three times the official target of 8.2 million tonnes for the quarter ending March 31.

On Tuesday, the most-active wheat contract for April delivery on the National Commodity and Derivatives Exchange lost 0.63 percent at 1,417 rupees per 100 kg. (Reporting by Mayank Bhardwaj; Editing by Bijoy Koyitty)




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