NEW DELHI (Commoditiescontrol) – Wheat prices are likely to remain range bound this week as fresh demand from mills may bolstered the market. On the other side, high production estimates will continue to pressure on the prices of the grain.
Most of the markets of key wheat growing belts witnessed slack tone in wheat prices last week as prices of mill quality wheat ruled almost at the bottom line, much below the Minimum Support Price (MSP) fixed by the centre at Rs. 1,625/100kg for the current rabi marketing season(RMS) 2017-18, Rs. 100 up from last year. Arrivals as well as demand from stockiest and flour mills were week. However, a little improvement was observed in the prices in the secondary market as milling wheat traded firm at Rs. 1,620-25/100kg at Lawrence road market in Delhi amid increased demand from flour mills that attracted good demand in chakki atta and maida.
Though, improved demand for milling wheat was observed from flour mills in some markets but it couldn’t boost prices in primary agriculture produce markets and future market as well.
Mill quality wheat was priced in the range of Rs. 1,450-1,550/100kg in the markets of Madhya Pradesh, the second largest wheat producer in the country.
In the major markets of Rajasthan, prices of milling wheat held at Rs. 1,480-1,525/100kg.
Wheat prices were also quoted lower in some of the key markets of Uttar Pradesh, India’s largest wheat grower where production is estimated at 331 lakh tones, all time high.
Wheat future contract for May delivery settled at Rs. 1,581/100kg on Friday, four rupees down from previous session while it was Rs. 29 or 1.8 percent down from corresponding last week.
However, wheat futures settled up 4-1/2 cents at $4.42-1/4 a bushel on Friday at Chicago Board of Trade (CBOT) amid crop loss worries as recent wet weather has caused damages to the winter crop in the key wheat producing regions of the USA.
Though, snowstorm in the USA that sent wheat prices surging this week on concerns about crop damage but it will do little to stop global inventories piling up, as per the market analyst.
World stockpiles of the grain will reach the highest level in 17 years by the end of next season, according to the United Nations’ Food & Agriculture Organization. With abundant supplies, any impact from recent snow and high winds in the U.S. Midwest will be limited, said Abdolreza Abbassian, a senior economist at the FAO.
Global wheat stockpiles will rise 3.3 percent to 24.76 crore tonnes at the end of 2017-18 season to the highest level since 2000-01, as per estimates of the FAO.
Food Corporation of India and state agencies have procured 257.85 lakh tonnes of wheat as on May 5, 2017, in the current rabi marketing season 2017-18 while the total wheat bought by the govt agencies in the last season was only 229.61 lakh tonnes.
As per the data available on the twitter handle @FCI_India, the procurement agencies have bought 112.20 lakh tonnes of wheat so far in Punjab while total procurement was at 106.49 lakh tonnes last year. The state government has set a target for wheat procurement in ongoing season at 115 lakh tonnes.
The agencies engaged in procurement have bought 72.01 lakh tonnes of wheat so far in Haryana against 67.52 lakh tonnes procured last year while the state govt has fixed a target of 75 lakh tonnes for procurement of wheat in the season.
Wheat procurement in Madhya Pradesh rose to 54.08 lakh tonnes against 39.92 lakh tonnes purchased by the govt last year. The state government has set a target to procure 85 lakh tonnes for this season.
The government agencies have procured 11.40 lakh tonnes of wheat till May 5, 2017 in Uttar Pradesh while the state government has raised its target from 30 lakh tonnes to 80 lakh tonnes. However, current figure of wheat procured is higher than last year as the agencies engaged in procurement of wheat could buy only 7.97 lakh tonnes only in the previous rabi marketing season in UP.
The government of India has set a target to buy 330 lakh tonnes of wheat for central pool this rabi marketing season 2017-18.
Union Agriculture Ministry has indicated that production would touch a record level of 980 lakh tonnes, higher than the figure of 966.4 lakh tonnes predicted for the crop season 2016-17, in its second advance estimates.
(By Commoditiescontrol Bureau; +91-22-40015533)
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