October 31, 2007

India corn futures at contract high on spot demand

All Indian corn futures reached contract highs over strong spot buying in Andhra Pradesh and lower arrivals in Karnataka and Maharashtra, analysts and traders said on Tuesday (October 30).

A. Rajalaxmi, an analyst with Karvy Comtrade Ltd, said strong corn demand from the poultry industry is driving the futures.

Benchmark December futures on National Commodity and Derivatives Exchange (NCDEX) reached contract high of 783 rupees (US$19.91) per 100 kilograms in the early trading hours. December, January and February contracts hit the upper circuit of 4 percent.

Corn arrival is only limited to Nizamabad in Andhra Pradesh and yet to begin in other regions of India. Rajalaxmi said this is also helping the futures to remain firm.

Spot prices in Nizamabad were 687 rupees per 100 kg, up 13 rupees from Monday, data from NCDEX showed.

Andhra Pradesh, where corn arrives early every year, because of early sowing, has seen a daily arrival of around 70,000 bags of 100 kg each with most of it lifted by poultry feed makers.

According to Mohanlal Vedant, a large trader in Nizamabad, poultry makers are now buying due to the 13 to 14 percent moisture of corn, which is very ideal as poultry feed. Last year's moisture content was 20 percent.

Lower moisture content increases weight of the produce per kilogramme and is preferred in feed making, said traders.

US$1 = 39.325 Indian rupee  

As of October 30, 2007