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OUTLOOK-India corn, kapashkhali to fall on higher supplies
MUMBAI Oct 19 (Reuters) - Indian corn futures fell on Friday and are likely to slip more next week as supplies in the spot markets rise and exporters hold off for further price falls, offsetting strong demand from poultry feed makers.
Corn futures are also under pressure from a near 7.5 percent decline in the prices of soymeal in October, w hich is also used in making animal and poultry feed.
Supplies of soymeal improved in the market after farmers accelerated harvest of soybean to clear fields for planting winter-sown crops.
"Overall fundamentals for corn are weak, prices are also under pressure from increased sowing activity in the ongoing winter-sowing season," said Faiyaz Hudani, a senior analyst with Kotak Commodity Services.
Exporters are looking for prices at least 50 rupees lower than the current spot prices of 1,310-1,330 rupees per 100 kg and that continues to dampen spirits for sellers.
In addition, heavy rains in September increased moisture in the soil and boosted the prospects of increased sowing of corn during the ongoing winter season. That could compensate partly for the near 15 percent decline in output of the summer-sown crop and this is also depressing prices, traders said.
Against this background, there is little support from seasonal buying by poultry feed makers, traders said. Demand for poultry products rises during the winter, because people eat more fatty food than in the high temperatures of summer.
At 0931 GMT, the key December corn contract on Chicago's CBOT was 0.49 percent at $7.64-1/2 per bushel.
The domestic November contract on the National Commodity and Derivatives Exchange (NCDEX) was trading down 1.03 percent at 1,255 Indian rupees per 100 kg (around $6.1 per bushel).
The contract has fallen around 2.5 percent this week.
In Nizamabad, a key spot market, corn fell 17 rupees to 1,300 rupees per 100 kg( around $6.2 per bushel).
Indian cottonseed oilcake, or kapashkhali, futures were range bound this week as a rise in cotton supplies was offset by demand from farmers. Traders expect prices to fall next week as fibre availability could improve further.
Kapashkhali is a by-product of cottonseed and is used as cattle feed, mostly for dairy animals in northern India.
"Prices are expected to fall next week as harvesting of cotton is likely to gather momentum," said Manjit Singh, a trader based in Ludhiana, Punjab.
India's cotton crop is likely to be down 5.4 percent in 2012/13, according to the Cotton Advisory Board. The previous year's crop was a record 35.3 million bales and though output will be lower, it will still be enough to meet local demand.
The key December contract on the NCDEX was trading flat at 1,412 rupees per 100 kg. ($1 = 53.1250 Indian rupees) (Reporting by Deepak Sharma; Editing by G.Ram Mohan)
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