Wheat

Wheat futures on the National Commodity and Derivatives Exchange ended largely unchanged as higher supplies in physical markets were offset by demand from flour millers ahead of Ramzan. The most-active June contract on the NCDEX ended up 0.06% from the previous close. The overall sentiment was bearish as the government raised this year wheat production estimate to a record prominent level. In benchmark Indore market, mill quality wheat traded steady. In the Delhi market wheat prices were a tad up 5 rupees from previous close.

New Delhi Barring rise in wheat prices, other commodities moved in a tight range in the absence of worthwhile activities, settling at their previous levels. Arrivals and offtake too remained at a low ebb and volume of business restricted. Wheat dara also showed some strength on increased offtake by flour mills. Rise in wheat dara prices was mostly supported by increased offtake by rolling flour mills to meet increased demand. In the national capital, wheat dara (for mills) on the back of increased offtake by flour mills wheat dara prices rose by another Rs 20 per quintal.

Last week, the Ukrainian grain market was sluggish. Domestic prices for all major cereals kept falling. CPT market was also quiet amid the decreased demand from importers for old-crop grain. A significant reduction of wheat exports from Ukraine is expected in May-June. Domestic grain CPT-port prices dropped on average by UAH 50-100/MT. New crop as well as strengthening of the national currency still pressured the domestic prices.

U.S. wheat supplies for 2017/18 are projected down 9 percent from 2016/17 on lower production, which is partially offset by higher beginning stocks. All wheat production for 2017/18 is projected at 1,820 million bushels, down nearly 500 million bushels from the prior year. The year-to-year decline is due to a sharp reduction in planted area and projected lower yields. The all wheat yield is projected at 47.2 bushels per acre, down 10 percent from last year’s record. The first survey-based forecast for 2017/18 winter wheat production is down sharply with the lowest harvested area in more than a century and lower yields. Winter wheat benefited from diminishing drought conditions in the Plains and Midwest. However, a late April snow storm affected large portions of the Hard-Red Winter wheat belt, especially western Kansas. Combined spring wheat and Durum production for 2017/18 is projected to decline 10 percent on lower area and a return to trend yields. Total use for 2017/18 is projected down 2 percent on lower exports and feed and residual use. Exports are projected at 1.0 billion bushels, down 35 million from the previous year’s revised level but above the five-year average. The EU is expected to regain export market share following last year’s small crop and quality problems. U.S. feed and residual use is projected down 20 million bushels on lower supplies. U.S. ending stocks are projected to decline 245 million bushels to 914 million, the lowest in three years. The season-average farm price is projected at $3.85 to $4.65 per bushel. The mid-point of this range is up $0.35 from the previous year’s low level. Global wheat supplies are projected to decline fractionally as higher beginning stocks are more than offset by a production decline following last year’s record. Total wheat production is projected at 737.8 million tons, the second highest total on record. Global wheat consumption is projected down slightly from last year’s record with reduced feed and residual usage partially offset by increased food use. Global imports are expected to be a record for the fifth consecutive year. Global ending stocks are projected at a record 258.3 million tons, up 2.9 million from 2016/17.

India wheat production in the current crop year to June is expected to rise to a record high of 97.44 million tonne, against 96.64 million tonne estimated earlier, backed by good monsoon rains and higher acreage, as per the third advance estimate released by the agriculture ministry. Bumper harvest of wheat may push the country total food grain production to record 273.38 million tonne in 2016-17, higher by 8.7% than last year 251.57 million tonne, and surpassing the previous record of 265.04 million tonne hit in 2013-14 by a wide margin.

Wheat futures on the National Commodity and Derivatives Exchange ended down as the government raised its estimate for the country wheat output in the current crop year ending June. The most-active June contract on the NCDEX ended down 0.6% from the previous close. The rise in output may be attributable to higher acreage, good soil moisture and favourable weather conditions. Arrivals in Rajasthan Kota market also fell due to rainy weather and lifted prices of mill quality wheat up 5-10 rupees from previous day. In benchmark Indore market, mill quality wheat sold up 5-10 rupees from previous close.

The most active July wheat contract on the CBOT fell 1% due to better weather conditions in the US. The July wheat contract was at $4.3750 a bushel, down 1.1% from the previous close. Weather conditions in the wheat growing areas in the US are easing now after heavy rains and storms during the last week. The demand for wheat contracts is also weak due to sharp rise in prices following the crop damage concerns.

The government has procured 26.4 million tonne wheat so far in the 2017-18 marketing year ending march, up 20.2% on year. The purchases are highest in Punjab where the government has procured, 11.4 million tonne wheat, slightly lower than its target of 11.5 million tonne. The government total wheat procurement across the country is still short of its target of 33 million tonne for the current fiscal. The government has so far purchased 5.6 million tonne wheat in Madhya Pradesh up 48% from a year ago but lower than the target of 8.5 million tonne for the current year.

Wholesale prices of wheat in the benchmark market of Indore, Madhya Pradesh, were unchanged because a fall in arrivals of the grain was offset by weak demand from flour mills. In Indore, mill-quality wheat was sold at largely unchanged from Saturday. Arrivals in Indore were at about 8,000 bags, each carrying 100 kg of the grain, down from 10,000 bags on Saturday. On the NCDEX, the most active June contract of wheat was up as investors continued to buy at lower prices for the second consecutive session after prices fell earlier. On NCDEX, the most active June wheat contract was up 0.3% from the previous close.

Prices of wheat rose in the key market of Delhi due to good demand from private buyers and a fall in supplies. Mill quality wheat was sold up 25-30 rupees from Saturday. Prices were unchanged in Madhya Pradesh. Demand from companies like ITC and other bulk buyers is good while arrivals are falling now as most farmers are stocking their crop. The most active June wheat contract on the NCDEX ended up 0.4% from previous close while the current month contract ended up 0.7% from previous close.

The government wheat procurement rose to 25.8 million tonne up 19.6% on year. Procurement is up nearly one-fifth on year, its progress is slower than expected, and reaching the initial procurement estimate of 33 million tonne seems difficult, Procurement may be closer to 30 million tonne this year. The government had bought 23.0 million tonne wheat from farmers last year. The government has bought 5.4 million tonne wheat in Madhya Pradesh so far, an increase of 45% on year. Last year, procurement in the state had taken a big hit as the crop size was smaller. The government has bought 11.2 million tonne wheat so far in Punjab, up 10.0% on year, and 7.2 million tonne so far in Haryana, up 9.5%.

Prices of wheat rose marginally in the market of Indore, Madhya Pradesh, due to lower arrivals. Arrivals were around 7,000 bags (1bag=100kg), down nearly 1,000 bags from the previous day. In Delhi, wholesale market, prices of wheat fell because of a rise in supplies from Uttar Pradesh. The most active June contract of wheat ended down 0.1% from the previous close. The May contract also ended 0.5% lower at 1,577 rupees.

Despite a decline in arrivals in the benchmark market of Indore, Madhya Pradesh, prices of wheat fell due to subdued demand from Stuckists and flour mills Mill quality grain was sold down from 1,550 rupees on previous close. Arrivals were around 6,000 bags (1bag=100kg), down nearly 1,000 bags from the previous day. Prices also fell in Delhi, as supplies from Uttar Pradesh rose Arrivals were around 50,000 tonne, up 5,000 tonne. The most active June contract of wheat ended up 0.3%.

USDA Foreign Agricultural Services has raised the estimate for India wheat output this year to a record 96.5 million tonne from 95 million tonne. The agency wheat output estimate for India is close to the government projection of 96.64 million tonne. The production estimate for the crop has been raised on hopes of better yields due to conducive weather conditions. Cool temperatures and adequate rainfall during Jan-Mar helped in better yield of the crop. Despite record production of the food grain, the agency expects wheat imports to continue, as domestic price is likely to remain higher compared with international prices. India is likely to import 4 million tonne wheat this year, as against 6 million tonne last year. Imports are likely to remain attractive for flour mills nearer the coast despite the 10% import duty on the food grain imposed in March.

Wholesale prices of wheat in the benchmark market of Indore, Madhya Pradesh, fell due to weak demand from flour mills. In Indore, mill quality wheat was sold down 25-30 rupees from Tuesday. Low demand for flour has hit demand for wheat from flour mills. Arrivals were low in Indore at 7,000 bags, each carrying 100 kg of the grain, down from 10,000 bags on previous close. This prevented further fall in prices. Supplies have dwindled as farmers are not willing to sell the produce at low prices. Futures of wheat too were down, tracking weakness in spot markets. On NCDEX, the most active June wheat contract was down 1% from the previous close.

The government has procured 25.07 million tonne of wheat so far in the marketing year that started April. The procurement is 18.8% higher than a year ago. The purchases are higher on year largely because wheat output in 2016-17 (Jul-Jun) is seen at a record high of 96.6 million tonne. Government procurement is highest in Punjab at 11.04 million tonne, up 10.4% on year, followed by Haryana at 7.12 million tonne, up 9.2%. In Uttar Pradesh, government agencies have bought 978,206 tn of the food grain, up 141.8% from a year ago. The Uttar Pradesh government aims to procure 8 million tonne of wheat this year. In Madhya Pradesh, the government has bought 5.17 million tonne of the grain so far, up 41.3% on year. In the benchmark market of Indore, the grain sold down 25-30 rupees. The central government aims to target of 33.0 million tonne wheat to be procured in the current marketing season, up from 22.9 million tonne on year.

The government has procured 24.66 million tonne of wheat across the country so far, this marketing year started April. The procurement is 18.3% higher than in the year-ago period, as production in 2016-17 (Jul-Jun) is seen at a record high. Procurement by the government was the highest in Punjab at 10.92 million tonne, up 10.4% from a year ago. Haryana was the second, at 7.06 million tonne, up 9.2% on year. In Uttar Pradesh, where the state government expects to procure a whopping 8 million tonne of wheat this year, 904,704 tonne has already been procured. The purchase is 152.8% higher on year. In Madhya Pradesh, another major producer, the government has bought 5.06 million tonne of the grain so far, up 39.1% from the year-ago period. In Indore, the grain was sold up 10-20 rupees from Saturday. Overall, the central government has set a target to procure 33.0 million tonne of wheat in the current marketing season, up from 22.9 million tonne on year.

Wheat prices in the benchmark market of Indore rose due to a decline in supplies. In Indore, the grain was sold up 10-20 rupees from the previous day. Around 5,000 bags (1bag=100kg) of wheat were brought to Indore markets down from 7,000-8,000 bags. Wheat prices in the key wholesale market of Delhi fell because supplies from Uttar Pradesh and Punjab are on a rise. Wheat was quoted down 15 rupees from the previous day. Arrivals were at around 50,000 tonne up from 40,000 tn. The most active May wheat contract on NCDEX had hit a two-month low down 0.9% from previous close. The July wheat contract on CBOT was at $4.58 a bushel, up 0.6% from previous close.

Until 01st May over 69 lakh tonne of wheat have arrived in Haryana compared to 64.59 lakh tonne for the same period last year. Traders and government agencies have purchased 5874 tonne and 69.27 lakh tonne of wheat respectively. Of the total quantity procured by government agencies around 17.02 lakh tonnes has been procured by food, civil supplies and consumer affairs department, 24.72 lakh tonne by HAFED, 8.23 lakh tonne by FCI, 6.36 lakh tonne by Haryana Agro Industries corporation and 12.91 lakh tonne by Haryana warehousing corporation. Sirsa is the leading district with 9.69 lakh metric tonne of arrival

Export prices for Russian milling wheat decreased by $1 per tonne on weekly basis. Russian wheat with a protein content of 12.5% and 11.5% for April- May delivery settled at $186-188/tonne FoB and $181-183/tonne FoB respectively. Milling wheat prices kept on falling in Russia due to strengthening of Rouble and sufficient market supply. Furthermore, millers have enough stocks to keep prices down.