Maize futures in India are expected to trade lower next week due to rising spot supplies, anticipation of higher winter crop while concerns over an outbreak of bird flu in China may cut feed demand and larger-than-expected US grain stockpiles also seen weighing on sentiment.
In India, Asia's largest exporter of the grain, maize is cultivated twice in a year during summer and winter season with major contribution coming from the summer season crop. Supplies from the winter sown or rabi crop has started coming in the market and are expected to pick up gradually in the coming weeks.
The key May contract for maize rabi on the National Commodity and Derivatives Exchange (NCDEX) fell 1.02 percent to 1,159 rupees ($5.42 per bushel) per 100 kg after hitting a contract low of 1,150 rupees earlier in the day. The farm ministry has estimated 2012/13 corn output at 21.06 million tonnes, compared with 21.76 million tonnes in the year earlier. Traders said a drop in the summer sown crop due to delayed monsoon resulted in a decline in the total output but a good harvest in winter marginally compensated the loss.
"Negative cues from the global market on worries about bird flu and higher US stockpiles are expected to keep maize under pressure," said Ambika T.B, an analyst at Karvy Comtrade. The local government in Shanghai said the Huhuai market for live birds had been shut down and 20,536 birds had been culled after authorities detected the H7N9 virus from samples of pigeons in the market.
"Exporters have also switched to wait-and-watch mode hoping further dip in prices," Ambika said. Indian cottonseed oilcake, or kapaskhali, futures are expected to fall next week, tracking bearish cues from cotton and sluggish demand from local feed makers. Kapaskhali is a by-product of cottonseed and is used as cattle feed, mostly for dairy animals, in northern India. "It is expected to remain bearish in the short-term because of poor demand from cattle feed makers," said Karvy Comtrade's Ambika. The key May contract on the NCDEX closed 0.84 percent lower at 1,540 rupees per 100 kg.
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