Wheat may dip further on government intervention
Sunday, 3 January 2010
Wheat futures market remained range bound negative during December month on slack buying interest due to higher prices. It is to be learnt that wheat price climbed to nearly Rs 1450 per quintal during first fortnight of December due to short supply in the open market.
However later on Indian Government announced that it will off load ample stock in the open market to meet the demand. It further added that the open market sale would be approximately 200 rupees lower from the previously announced prices.
This news significantly impacted the market sentiments and prices sharply corrected to the extent of 150 rupees. During last week of December month, futures market prices were hovering near 1300 levels.
It appears that prices may further correct in near future. All will depend up on the timely move by the government of open market wheat sale to ease the supply pressure. One another factor that is in the favor of bears is the Rabi wheat sowing progress.
The overall area sown under wheat, at 23.1 million (231.32 lakh) hectare, is more than the 22.6 million (226.01 lakh) hectares achieved during this period of last Rabi season. India produced a record 80.58 million tons last year. For the current year, the Agriculture Ministry has targeted wheat output at 79 million tons.
According to the Agricultural Ministry latest review of Rabi season crop sowing trends, farmers in Punjab have till now planted 33.91 lh under wheat, compared with 34.59 lh during the corresponding period of 2008-09.
--Commodity Online
Madhya Pradesh farmers have brought in extra area in wheat. Weather has so far remained benign for wheat crop and it all remains favorable the county can achieve the target of 79 MMT this year.
Thus enough stocks with the government and good production prospects may keep prices steady to slightly bearish for medium term.
However later on Indian Government announced that it will off load ample stock in the open market to meet the demand. It further added that the open market sale would be approximately 200 rupees lower from the previously announced prices.
This news significantly impacted the market sentiments and prices sharply corrected to the extent of 150 rupees. During last week of December month, futures market prices were hovering near 1300 levels.
It appears that prices may further correct in near future. All will depend up on the timely move by the government of open market wheat sale to ease the supply pressure. One another factor that is in the favor of bears is the Rabi wheat sowing progress.
The overall area sown under wheat, at 23.1 million (231.32 lakh) hectare, is more than the 22.6 million (226.01 lakh) hectares achieved during this period of last Rabi season. India produced a record 80.58 million tons last year. For the current year, the Agriculture Ministry has targeted wheat output at 79 million tons.
According to the Agricultural Ministry latest review of Rabi season crop sowing trends, farmers in Punjab have till now planted 33.91 lh under wheat, compared with 34.59 lh during the corresponding period of 2008-09.
--Commodity Online
Madhya Pradesh farmers have brought in extra area in wheat. Weather has so far remained benign for wheat crop and it all remains favorable the county can achieve the target of 79 MMT this year.
Thus enough stocks with the government and good production prospects may keep prices steady to slightly bearish for medium term.