MUMBAI Feb 1 Corn futures in India, Asia's largest exporter, fell on Friday to hit a new contract low, and are likely to extend losses next week on higher supplies in spot markets amid subdued demand from both local and overseas buyers.
The key March contract on the National Commodity and Derivatives Exchange (NCDEX) ended down 1.37 percent at 1,363 rupees (about $6.4 per bushel) per 100 kg, after hitting a new contract low of 1,352 rupees.
Last week, volumes shifted from February to March contract.
Higher supplies from Latin American countries affected demand for Indian corn in overseas market particularly in countries like Vietnam, Malaysia and Indonesia, traders said.
India corn is now being offered at $310 a tonne CIF (cost, insurance and freight), down from $320 a tonne last week. And this is also putting pressure on local prices, traders said.
Additional pressure on local corn prices could come from higher supplies in spot markets amid lack of buying from poultry feed makers.
"Farmers are still bringing harvests in large quantities and buying by feed makers has decline as winter season is ending. All these factors are likely to drag prices down," said K. D. Singh, a trader based in Patiala, Punjab.
Demand for poultry products in India usually rises during the winter season as people eat more fatty foods than in the high temperatures of the summer.
In Chicago, the key March corn contract on CBOT was trading up 0.51 percent at $7.44-1/4 per bushel at 1224 GMT.
The contract rose more than 6 percent in January on concerns about dry weather in Argentina that is lowering production prospects.
Indian cottonseed oilcake, or kapashkhali, futures fell on Friday after rising in the previous three sessions, and may fall further this week on a likely decline in demand for cattle feed products.
Kapashkhali is a by-product of cottonseed and is used as cattle feed, mostly for dairy animals, in northern India.
"Demand for cattle feed is likely to fall on higher availability of crop residue, which is widely used as an alternative fodder in India for dairy animals," said Ranjit Mankharia, a trader based in Bikaner in Rajasthan.
Farmers in India use the crop after harvesting chana, wheat or rice as fodder for dairy animals.
Traders said, demand for cattle feed is likely to fall as harvesting of winter-sown crop has started in some areas, and it could make crop-residue available for fodder.
The key February contract on the NCDEX closed down 0.08 percent at 1,320 rupees per 100 kg. The contract fell more than 8.5 percent this year to hit its lowest level at 1,292 rupees on Tuesday. (Reporting by Deepak Sharma; Editing by Anand Basu)
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