Spot Wheat Trades Firm In MP; Futures Down

Wheat prices were firm in the major grain markets of Madhya Pradesh, the second largest wheat grower in the country, due to weak arrivals while demand from local flour mills improved. As per the trade sources, farmers are seen interested in liquidating only those crop for which they are getting better prices. The sowing season of kharif crop is in progress and the farmers need financial support for farming, hence, they are selling moong, urad and onion to the government agencies at fixed prices which are obviously higher than market rates, said the sources.. 

Apart from this, the confusion about GST rates on branded foot items is still there in the market and bulk buyers are staying away. As per the trade sources, south Indian millers are buying wheat for MP markets but the quantity demand by them is too low as they  need it only for mixing purposes.

Traders anticipate improvement in south India’s demand as the stocks of imported wheat lying on the ports are falling day by day and the importers are not reported signing new contracts with their foreign counterparts for wheat imports. 

Food Corporation of India and state agencies have procured over 306 lakh tonnes of wheat so far in the country. Procurement has stopped in most of the states. 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.

 The agencies could procure

Wheat procurement in Madhya Pradesh totaled at 67.24 lakh tonnes against 39.92 lakh tonnes purchased by the govt last year. However, the target fixed by the govt remained underachieved.  The state government had set a target to procure 85 lakh tonnes for this season.

The government of India has set a target to buy 330 lakh tonnes of wheat for central pool this rabi marketing season 2017-18.

The agriculture ministry has estimated wheat production all time high at 974.4 lakh tones in the third advance estimates released by the agriculture ministry. This year’s wheat production 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. 

U.S. Department of Agriculture (USDA) has lowered India’s wheat production forecast by 10 lakh tonnes to 960 lakh tonnes in its June forecast, however, it is still a record this year. The USDA has kept India’s wheat import projection steady at 40 lakh tonnes.

By 1354 IST, wheat future for delivery in July was seven rupees down at Rs. 1,620/100kg after opening firm at Rs. 1,630/100kg at National Commodity and Derivatives Exchange Ltd (NCDEX). Similarly, August contract also declined seven rupees to trade at Rs. 1,643/100kg on the NCDEX.