Wheat futures down amid import expectations

Wheat August and September futures went down by Rs 4 per quintal at National Commodity and Derivatives Exchange (NCDEX) amid import expectations today, even as the spot prices at Delhi moved southwards.

Commenting on the fall in the futures prices of wheat, flour miller Ajay Goyal said, "Fear in the mind of people regarding imposition of certain barriers by government in futures trade of wheat have lead to a lack of interest for the commodity coupled with arrivals of private imports of wheat." The August futures for wheat closed at Rs 856 per quintal against yesterday's close of Rs 860 while the September Futures closed at Rs 876.8 per quintal against Rs 881 per quintal.

State Trading Corporation (STC) on July 24 floated a fresh tender for four lakh tonnes of wheat imports, adding to the 35 lakh tonnes already contracted.

Commenting on the rise in the spot prices against the fall in the futures prices of wheat, Goyal said there are strong fundamentals of demand-supply gap that has led to a rise in spot market prices.

"Both the government and private bodies are competeing currently to procure the grain that has fallen short of estimated figures," he added.

The Centre earlier lowered its projections on wheat output in its fourth advanced estimate to 69.48 million tonnes against 71.54 mt in third estimate.

The Food Corporation of India (FCI) has also been able to gather only 9.2 mt of wheat this year as against targets of 16.2 mt set for the year.

As on July 1, the government wheat stocks were at 8.2 mt, substantially lower than previous year's level, according to Government of India Economic Survey. This is also well below the buffer stock norm of 17.1 mt. The analysts here have also accounted for the increased margins on both long and short positions for futures trade of commodity.

The margins currently on wheat short positions are 10 per cent while on long positions they are 20 per cent.

Article Source: http://www.share.onlypunjab.com

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