Wheat prices extended gains at local bourse on Monday while the prices of the commodity eased in the international market. However, unfavorable weather condition in the U.S. and Australia will support wheat futures. Similarly, prices of grain in the domestic market are also expected to remain firm due to supply concerns.
Wheat futures slipped in the U.S. market on Monday amid technical correction as the commodity had rallied last week on the back of dry weather threatening damage to spring wheat crop which may result in low yield.
Chicago wheat futures declined nearly 1 percent today after witnessing a sharp rally in past sessions. Wheat prices remained firm in the global market in the previous weak as dryness in Western Australia, the key wheat growing belts where soil moisture was recorded significantly low, also raised the concerns over newly-seeded crop.
Besides, the reports of low yield in the early harvest of the hard red winter wheat crop in the U.S. supported wheat futures and the market analysts have to say the weather concern is not over as rain outlook is weak in western Dakotas and Montana in coming weeks which will affect growth of spring wheat crop.
Hence, there is limited downside in prices of wheat in the international market this week.
By 1019 IST, July delivery wheat future contract was three rupees up at Rs. 1,630/100kg after opening at the same level at National Commodity and Derivatives Exchange Ltd (NCDEX). August wheat contract was flat at Rs. 1,650 on the NCDEX.
July wheat contract had closed firm at Rs. 1,627/100kg at local bourse on Friday after rising to high of Rs. 1,640/100kg. The benchmark wheat contract remained firm last week due to restricted supply in agriculture produce market in Madhya Pradesh, the second largest wheat grower in the country.
Farmers’ agitation across the country disrupted supply of the agriculture commodities in the spot market following which stockiest raised their price quotes for wheat. Apart from this, higher base rates for wheat to be offloaded through Open Market Sales Schemes (OMSS) from July boosted market sentiment.
By 0307 GMT, Wheat future contract for delivery in July at Chicago Board of Trade (CBOT) was 0.75 percent down at $4.62-1/2 a bushel .