Wheat Prices Remain Steady to Weak Amidst Increased Supplies and Positive Crop Outlook

New Delhi, February 14 (CommoditiesControl): Wheat prices showed a consistent to downward trend, influenced by an increase in OMSS supplies and optimistic expectations for the upcoming crop. In Indore mandi, 1300 bags of new wheat were delivered today, with prices ranging from INR 2500-2550 for mill quality, and Lokwan new wheat quoted at INR 2600-2690.

Reports of enhanced domestic wheat production, attributed to improved yield prospects, added to the pressure on market sentiment. Favorable weather conditions in Rajasthan are anticipated to result in an average productivity of 50-60 quintals per hectare, a 3-4 quintal increase compared to the previous year. Wheat harvesting in Rajasthan is scheduled to commence at the end of March.

Madhya Pradesh is also expected to witness a good production due to favorable weather conditions. As wheat harvesting gains momentum, an increase in supplies is expected in the markets, potentially leading to steady to weak wheat prices in the near term.

Delhi witnessed steady prices at INR 2550 per quintal, while Bihar experienced a decline of INR 10 per quintal at INR 2570 per quintal. Kolkata saw a decrease to INR 2700 per quintal, down by INR 10 per quintal, attributed to increased OMSS supplies in local markets.

The UP market remained steady at INR 2550 per quintal, with muted demand from Southern Millers. The UP-Bengaluru line traded at INR 2960 per quintal, down by INR 10 per quintal. Rajasthan and Madhya Pradesh markets traded at INR 2550 and INR 2560 per quintal, respectively, facing downward pressure from OMSS supplies.

Black Sea wheat experienced a decline to CNF 275 per ton, down by USD 3 per ton, owing to low export demand. The potential for India to open up imports this year indicates a healthy parity of USD 30-40 per ton.

Considering the Minimum Support Price (MSP) of new wheat at INR 2275 per quintal, mandi prices may dip to the range of INR 2250-2275 if government procurement begins at that rate. However, the possibility of bonus incentives from the government could mitigate a significant price decline.

With the revised wheat stock limit applicable until March 31, 2024, major stockpiling by bulk stockists is unlikely in the near term, contributing to the expectation of weak wheat prices.