July 22, 2010

Indian wheat futures gain on firm market demand

Indian wheat futures traded INR9.60 (US$0.2), or 0.74% higher at INR1,310 (US$27.8) per 100 kg on firm market demand and speculators building up positions on reports that the government was considering imposition of import duty on grain.

However, the government decision to release five million tonnes of grain in the open market along with mounting stocks in spot markets, capped gains.

At the National Commodity and Derivatives Exchange counter, wheat for delivery in far-month November contract moved up by INR9.60 (US$0.2) or 0.74% to INR1,310 (US$27.8) per 100 kg, with an open interest of 2,840 lots.

The grain for delivery in August contract also traded INR6.40 (US$0.14) or 0.51% higher, at INR1,259.20 (US$26.7) per 100 kg, with an open interest of 24,840 lots.

Analysts said the rise in wheat prices in futures market was mostly due to increase offtake by flour mills at the physical markets and reports of the government considering imposition of import duty on grain.

However, they said that government's decision to release five million tonnes of grain for open market sales, restricted gains.