May 12, 2010

India wheat and corn futures rise

India wheat futures rose on Tuesday (May 11) on expectations of a 1.5 million tonne output drop from Uttar Pradesh, whereas corn continued to trade higher, analysts said.

"The fall in output will support prices but we have enough stocks to control any sharp rise in prices," said Veeresh Hiremath, a senior analyst with Karvy Comtrade Ltd.

The most-active June wheat contract NWTM0 ended at INR1,159 (US$25.67) per 100 kilogramme, up 0.35%.

The Indian government will provide 3 million tonnes of subsidised grain in aid for states in the next six months, Farm Minister Sharad Pawar told reporters last week.

India's wheat stocks on May 1 were at 30.8 million tonnes against the target of 4 million tonnes. India expects a strong harvest in 2010, with output likely to exceed demand for the fourth consecutive year.

Pawar said government-run agencies have procured 21.2 million tonnes of wheat from local farmers compared with 27.7 million tonnes during same period last year.

India's corn futures rose due to some local demand from poultry feed makers, but a higher winter crop limited gains, analysts said.

The May corn contract NMZK0 ended at INR895 (US$19.82) per 100 kilogramme, up 0.73%. Latest government estimates show a higher winter crop at 5.64 million tonnes, from 5.61 million tonnes last year.