MUMBAI, Jan 22 (Reuters) - Wheat futures in India, the world’s second-largest producer, are likely to rise this week on an expected rise in export demand, following a recent surge in overseas prices and on lower supplies due to lean season.
However, the key February contract on the National Commodity and Derivatives Exchange (NCDEX) fell on Tuesday on profit-taking after rising over 5 percent in the previous seven sessions.
“Strong demand from exporters could keep prices firm this week as supplies in spot markets are low due to lean season, and it would take more than two months for the new season crop to reach market,” said Pradeep Aggarwal, a trader based in Ludhiana, Punjab.
India grows one wheat crop, which is planted in November-December and harvested in April-May.
Wheat shipments from India are likely to rise as dry weather in the United States and drought in the Black Sea region have pushed benchmark global wheat prices up more than 6 percent in the previous seven sessions, boosting demand for the Indian produce particularly in Southeast Asian countries, traders said.
At 0937 GMT, in Chicago, the key March contract on CBOT was trading up 0.7 percent at $7.96-3/4 per bushel.
Most traded February contract on the National Commodity and Derivatives Exchange was trading down 1.04 percent at 1,517 rupees (around $7.2 per bushel) per 100 kg.
Indian wheat is being offered at about $325-$330 per tonne CIF (cost, insurance and freight) in Southeast Asian countries, while Australian wheat is available for $350 per tonne.
Wheat shipments from India usually fetch lower prices due to quality concerns such as pest infestation and other bacterial infections, which can spoil some of the produce.
Last week, two state-run trading companies - unlisted PEC Ltd and MMTC - got the highest bids at $314 a tonne and $309 a tonne, respectively, in their latest export tenders. ($1 = 53.8650 rupees) (Reporting by Deepak Sharma; Editing by Anand Basu)