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UPDATE 1-India sells new-crop wheat, more deals likely
* Traders sell 200,000 T of Indian wheat to Middle East
* Indian wheat at $30-$40 discount to Australian wheat
* U.S. wheat futures up nearly 19 pct over 7 sessions (Adds details, quotes)
By Naveen Thukral
SINGAPORE, June 26 (Reuters) - The Middle East has bought around 200,000 tonnes of new-crop Indian wheat and more deals are likely, as a rally in global prices and the weakening currency of the South Asian nation make exports competitive, grains traders said on Tuesday.
"Indian wheat has been moving to the Middle East but now there should be more interest," said one Singapore-based trader. "The spread between Indian and Australian wheat is around $30 to $40 today, which is very attractive."
U.S. wheat futures was little changed at around nine-month highs on Tuesday, after climbing more than 7 percent in the last session, tracking gains in corn and on expectations of lower production from the Black Sea region.
In the cash market, Indian wheat is quoted at around $255 a tonne free on board (FOB), compared with $295 a tonne being offered for Australian wheat.
In the Middle East, Indian wheat is being offered at around $280 a tonne, including cost and freight (C&F), while rival Black Sea cargoes are being quoted at close to $315 a tonne.
Aiding Indian wheat exports is the embattled rupee, which has hit a succession of record lows this year. It has fallen about 7 percent year-to-date, making it the worst performing currency monitored daily in Asia by Reuters.
India, the world's second-biggest rice and wheat producer, is grappling with storage problems due to bumper harvests in recent years.
Grain stocks at government warehouses were at a record 82.4 million tonnes on June 1 against 63.0 million tonnes of storage space, forcing authorities to store grains in the open.
Officials concede that 6 million tonnes of grains could rot due to lack of storage space, but analysts say the losses could be higher as more than 19 million tonnes lie in the open.
Chicago Board of Trade front-month wheat has gained almost 19 percent in seven trading sessions, the biggest such gain in almost a year. The rally has been mainly triggered by a drought in the U.S. grain-belt and forecasts of lower output in Russia and Ukraine.
Ukraine's 2012 grain harvest is likely to total 43 to 44 million tonnes, compared with a record 56.7 million tonnes in 2011 due a sharp decrease in wheat output, a senior weather forecaster said on Monday.
Russia's Agriculture Ministry and a leading analyst cut their 2012/13 grain crop and export forecasts on Monday after winterkill and spring drought caused yields to fall. For the new season the ministry cut its wheat crop forecast to 46-49 million tonnes from 57 million tonnes expected earlier, a government source said.
At the same time, India, which is sitting on a burdensome stockpile of wheat, has been trying to sell grains, including to sanctions-hit Iran.
India could export up to 3 million tonnes of wheat to Iran if supplies are requested, Food Minister K.V. Thomas said, as India seeks to reduce huge wheat stocks and help settle payment for a large oil import bill.
"Indian wheat is cheapest in the world at the moment," said another Singapore-based grains trader. "It is even cheaper than feed wheat." (Editing by Himani Sarkar)
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