India wheat seen opening higher on stock release delay

MUMBAI, Nov 9 (Reuters) - India wheat futures may open higher on Monday on delay in stock release into the open market, but a smaller-than-expected increase in the government's support price of the grain could cap the upside, analysts said.

The government had earlier said it would release up to 3 million tonnes of wheat for sale in open market during the six months from October, but supplies haven't hit the market so far, and this was supporting prices, analysts said.

India has raised the price it will pay domestic farmers to buy new season wheat to 1,100 rupees per 100 kg, Home Minister Palaniappan Chidambaran said.

The government paid farmers 1,080 rupees per 100 kg for the 2009 harvest. See [ID:nBMA006356]

Some traders said they had expected the support price to be raised to 1,180 rupees and hence are expecting the government to offer a bonus above the support price to boost acreage and procurement.

The most-traded November wheat NWTX9 last ended 0.2 percent lower at 1,423.4 rupees per 100 kg.

India aims to raise wheat output by 2 million tonnes from last year, Farm Minister Sharad Pawar told the annual Economic Editors Conference on Wednesday. In 2008/09, India produced 80.58 million tonnes of wheat. See [ID:nDEB003062]

India is seeking to raise its winter wheat output to overcome a drop in rice production in the wake of the country's worst monsoon since 1972.

On Oct. 1, India had 28.18 million tonnes of wheat stocks, while the buffer norm was 11 million tonnes. See [ID:nBOM437272] At the beginning of the new marketing year in April 2010, stocks are estimated at 10 million tonnes. (Reporting by Siddesh Mayenkar; Editing by Sunil Nair