MUMBAI Dec 11 Indian corn futures are likely to
remain rangebound this week, after rising over 2 percent in the
previous week, as buying by feed and starch makers could offset
rising supplies in spot markets amid lacklustre overseas demand.
Corn futures rose in the week ended Dec. 8, on
short-covering after falling over 5 percent in the previous week
as supplies improved in spot markets, following the end of the
"Stocks with corn-consuming industries such as starch and
feed makers are very low, and they are buying to replenish
stocks. This is supporting prices," said Poonamchand Gupta, a
trader based in Nizamabad, Andhra Pradesh.
Corn supplies in local spot markets are rising as farmers
accelerated harvesting to clear fields for planting winter
crops, traders said.
Higher supplies are putting pressure on corn prices, but
demand from starch makers and feed makers is very strong and it
is offsetting the supply pressure to some extent, said Gupta.
"Traders do not expect prices to fall much rather they could
remain rangebound this week," he added.
Corn stocks in India are low as a record high corn exports
(around 4.8 million tonnes) in 2011/12 marketing year ended on
Sept. 30. left little stocks with local traders.
Local prices have also found support from the projected
decline in India's 2012/13 summer-sown corn output to 14.89
million tonnes, down from 16.22 million tonnes in the previous
year, offsetting tepid overseas enquiries.
"Only exporters with long-term contracts are buying now,
while others are staying away from market," said Gupta.
Most exporters are only willing to buy at less than $220 per
tonne whereas corn in local spot markets is being traded at
around $260 per tonne, traders said.
In Chicago, the key December corn contract on the CBOT
was trading down 0.52 percent at $7.23 per bushel at 1017 GMT on
The contract fell over 4 percent in the previous three
sessions to hit its lowest level in over three weeks.
The key January contract on the National Commodity
and Derivatives Exchange (NCDEX) was trading down 1.36 percent
at 1,448 rupees per 100 kg. ($6.8 per bushel)
The contract touched a three-month high on Nov. 24
as supplies in spot markets fell due to festivals.
Indian cottonseed oilcake, or kapashkhali, futures fell for
the second session on Tuesday, and are likely to remain
rangebound as below expectation cotton supplies in spot markets
outweighed a fall in demand.
Kapashkhali is a by-product of cottonseed and is used as a
cattle feed, mostly for dairy animals in northern India.
Kapashkhali prices are getting support from a 12.4 percent
decline in cotton supplies in spot markets in the current crop
year that started on Oct. 1, and that could offset a fall in
"Easy availability of crop residue as fodder, after
harvesting of summer-sowing crop, has cut demand for Kapaskhali,
but lower supply of cotton is supporting prices," said Ranjeet
Mankharia, a trader based in Bikaner, Rajasthan.
The key January contract on the NCDEX was trading
down 0.5 percent at 1,405 rupees per 100 kg.
($1 = 54.5150 rupees)
(Reporting by Deepak Sharma; Editing by Anand Basu)