Wheat prices are likely to move forward in Indian markets tracking improved demand from flour mills and firm cues from global markets. The weather reports from America and Australia are supportive for wheat in the international market. The higher prices of wheat in the global markets will discourage Indian buyers to import as India sourced nearly 55 lakh tonnes of wheat last year mainly from Ukraine and Australia.
Wheat prices were firm in the key markets of Madhya Pradesh previous day while weak tone was observed in Uttar Pradesh and Rajasthan while domestic futures held flat.
Wheat futures continued to trade firm for the fourth straight session at Chicago Board of Trade (CBOT) on Tuesday amid concerns over low yield of spring wheat crop in the U.S. due to persisting dry weather conditions. As per the USDA, only 41 percent of spring wheat crop is in good to excellent condition in the U.S. as per the latest report this week while the U.S. agency had rated it at 45 percent last week. The USDA has rated 49 percent winter crop in the USA in good to excellent condition this week against 50 percent predicted previous week while it was at 61 percent last year.
Other supportive news is that Russian wheat export prices have surged for a fifth week on the back of higher global benchmarks and due to a possible late arrival of the domestic harvest after rainy weather in the spring.
By 0432 GMT, wheat future for July delivery was o.75 percent up at $4.71-1/4 a bushel after hitting high of $4.72-1/2 a bushel on the CBOT.
July delivery wheat future contract held flat at Rs. 1,627/100kg in the last session on the NCDEX while August contract closed one rupee up at Rs. 1,651/100kg.
India has a record wheat crop this year, therefore, pressure is continuously seen on domestic prices. As per the third advance estimate, India’s wheat output is all time high at 974.4 lakh tones which is higher by 1.66% than the previous record production of 958.5 lakh tonnes achieved during 2013-14. Production of wheat during 2016-17 is also higher by 48.3 lakh tonnes (5.21%) than the average wheat production. The current year’s production is higher by 51.5 lakh tonnes (5.58%) as compared to wheat production of 922.9 lakh tonnes achieved during 2015-16.
As per the data complied across the country on June 19, 2017, wheat procurement has reached to 306.48 lakh tonnes in the current rabi marketing season 2017-18 against 229.61 lakh tones procured in the whole season last year.
However, the government of India has set a target to buy 330 lakh tonnes of wheat for central pool this rabi marketing season 2017-18.
Wheat procurement has stopped in most of the wheat producing states, the government agencies are still buying it in few states which will conclude by June 30.