Indian corn likely to be steady on supplies below expectations

Indian corn futures are likely to remain steady next week, after falling on Friday, as arrivals below expectations in spot markets could support prices, traders and analysts said. "Corn in major spot markets across the country is being sold at around 1,350 rupees per 100 kg, much higher than the futures prices, as supplies from the new season crop are lower than expectations," said Chowda Reddy, a senior analyst with JRG Wealth Management.
Corn futures fell sharply due to a steep drop in the overseas market and traded below spot prices since the last week of August as restricted supplies kept spot prices firm. India's corn output during the summer-sown or kharif season of 2012 is likely to fall by nearly 9 percent to 15 million tonnes, farm ministry data showed. Traders were expecting supplies from the new season crop to rise this week but that did not happen. Lower-than-expected supplies are k e eping prices in both futures and spot markets steady, despite a lack of demand from exporters, said Shankarji, a trader based in Karimnagar in Andhra Pradesh.
In Chicago, the December corn contract on the CBOT was 4.16 percent up at $7.45 per bushel at 1336 GMT as a USDA report showed a steep fall in stocks. The contract fell to $7.05 per bushel, the lowest level in three months, earlier in the day. The November contract on the National Commodity and Derivatives Exchange (NCDEX) was down 0.79 percent at 1,249 Indian rupees per 100 kg (around $6.1 per bushel).
In the Nizamabad spot market in Andhra Pradesh, corn fell 6 rupees to 1,441 rupees per 100 kg (around $6.9 per bushel). Indian cottonseed oilcake, or kapashkhali, futures are likely to extend losses next week, on weak demand and higher availability of seeds for crushing, traders said. Rising cotton supplies from the new season crop as farmers start harvesting in northern India could also depress prices, traders said. India's cotton crop is likely to be down 5.4 percent in 2012/13, farm minister Sharad Pawar said. The previous year's was a record 35.3 million bales and though output will be lower, it will still be enough to meet local demand.