OUTLOOK-India corn, kapashkhali seen down on higher supplies

MUMBAI Mon Dec 3, 2012 6:29pm IST

MUMBAI Dec 3 (Reuters) - Indian corn futures are likely to fall this week, after losing over 7 percent in the previous week, as supplies from the new crop rose and a decline in overseas prices outweighed buying by poultry feed makers.

On Monday, the key January contract on the National Commodity and Derivatives Exchange (NCDEX) rose 0.21 percent to 1,436 rupees per 100 kg (around $6.7 per bushel) on short-covering after falling over 7 percent in the previous six sessions.

Last week, volumes in Indian corn futures shifted to January contract from December.

"Daily supplies in major spot markets have jumped to 6,000-6,200 bags (1 bag=100 kg) last week from less than 3,000 bags in the week before," said Shreedhar Reddy, a trader based in Davangere Karnataka, India's largest producer of corn.

Farmers have accelerated harvesting as they need to clear fields for planting winter crops, resulting in higher supplies, Reddy said.

Softening global corn prices, which could cut demand for the Indian produce in overseas markets, also put pressure on local prices, traders said.

However, aggressive buying by poultry feed makers amid a projected decline in corn output in summer-sowing season of the current crop could limit the downtrend in prices, traders said.

Demand for poultry products usually rises during winter as people eat more fatty foods than in the high temperatures of the summer.

In Chicago, the key December corn contract on the CBOT was up 1 percent at $7.55-1/2 per bushel at 1208 GMT. The contract fell nearly 1.5 percent in previous two sessions.

In the Nizamabad spot market, corn prices fell by 10 rupees to 1,426 rupees per 100 kg, from previous closing on Saturday.

KAPASHKHALI

Indian cottonseed oilcake, or kapashkhali, futures fell on Monday, and are likely to extend losses on rising cotton supplies in spot markets amid a decline in demand.

Kapashkhali is a by-product of cottonseed and is used as a cattle feed, mostly for dairy animals in northern India.

"Cotton supplies are rising in spot markets and demand is falling due to higher availability of grass (as fodder) ," said Manjit Singh, a trader based in Ludhiana, Punjab.

The key January contract on the NCDEX closed down 0.71 percent at 1,407 rupees per 100 kg.

Last week, volumes in Indian cottonseed oilcake futures shifted to January contract from December. ($1 = 54.3950 rupees) (Reporting by Deepak Sharma; Editing by Anand Basu)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Popularity Poll

REUTERS SHOWCASE

Record Highs

Record Highs

Nifty touches record high; software stocks gain.  Full Article 

New Adviser

New Adviser

Arvind Subramanian likely to be chief econ adviser.  Full Article 

Pricing Mechanism

Pricing Mechanism

Govt sets up a four-member panel to re-examine gas pricing.  Full Article 

Royalty Rates

Royalty Rates

India to hike iron ore royalty, miners may struggle to pass on extra cost.  Full Article 

Commodities

Commodities

Gold near two-month low; set for weekly drop on interest rate fears  Full Article 

Reuters Exclusive

Reuters Exclusive

Apple iPhone 6 screen snag leaves supply chain scrambling   Full Article 

Helping Regional Mills

Helping Regional Mills

Govt raises sugar import duty to 25 pct from 15 pct.  Full Article 

Curbing Risks

Curbing Risks

RBI to lower ceiling on bank loans to a single corporate group.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage