MUMBAI, Aug 17 (Reuters) - Indian corn futures are likely to rise this week on strong export demand and higher buying by feed millers.
“Due to high prices in overseas markets, exporters are still buying from the local market and it could keep prices up for some time,” said Faiyaz Hudani, senior analyst with Kotak Commodity Services.
The front-month corn on Chicago Board of Trade (CBOT) climbed to an all-time high of $8.43-3/4 a bushel last week on severe drought-like conditions in key growing areas in the United States.
High prices of soymeal, which is trading at 3,800 rupees per 100 kg in the local spot markets, are forcing feed millers to mix higher quantity of corn in poultry and animal feed to cut costs, thereby pushing corn prices up in both spot and futures markets.
Corn and soymeal are used for making animal and poultry feed.
On Friday, the key September contact on the National Commodity and Derivatives Exchange (NCDEX) closed up 1.22 percent at 1,491 rupees per 100 kg.
Deficient rainfall in key growing areas of Karnataka and Rajasthan is likely to keep prices firm for some time, traders said.
A consumer industry official has called for curbs on corn exports from India and traders are worried that New Delhi could concede to the demand as the government keeps an eye on rising prices fanned by drought.
Indian cottonseed oilcake, or kapashkhali, futures are likely to rise on lower rains in northern India, which have raised concerns over the availability of fodder and triggered higher buying.
Kapashkhali is a by-product of cottonseed used as cattle feed, mostly in the north-western states of India.
The key September contract on the NCDEX closed marginally up at 1,652 rupees per 100 kg on Friday. “Rains in Punjab and Haryana are still deficient and farmers are buying in higher quantity fearing shortage in near future,” said Ranjit Mankharia, a trader based in Bikaner in Rajasthan.
Lower availability of soymeal in the local market has also created demand for the oilcake and it could keep prices firm until new stocks arrive in October, Mankharia said. (Reporting by Deepak Sharma; Editing by Jijo Jacob)