Festive demand perks up grains, pulses

Nov wheat futures rises 2.5% on NCDEX to close at Rs 1,056 a quintal.

Market seems to have discounted the news of stock limits imposed on private players with prices of wheat, chana and urad firming up last week on festive demand.

Wheat firmed up further around 3 per cent in Delhi spot markets and wheat November futures rose around 2.5 per cent on the NCDEX to close at Rs 1,056 per quintal.

The shortage of wheat in the international market has also supported the prices, a trader said.

Wheat futures witnessed a good rally on the NCDEX, touching a high of Rs 1065 per quintal on fears of possible shortage.

However, fresh arrivals of wheat will keep the prices under pressure but the upside is also capped as the overall market sentiment is uncertain due to constant government intervention to check the prices.

A slide in prices would put pressure on the longs and would force them to liquidate their positions leading to a crash in the prices, commodity analyst at Anand Rathi Securities said.

Chana futures consolidated further on lacklustre consumer demand as well as regulatory statements from the state government of Delhi. Chana MCX- spot closed the week at Rs.3246 against previous week's close of 3054, up 6.29 per cent.

November contract at MCX was higher at Rs 3,293 per quintal compared with previous week's close of Rs 3,175.

Some support to the prices came from the news that draught like conditions existed in special-crop growing region in Australia.

As per earlier estimates, Australian crop of desi Chana could be as large as 2.5 lakh MT compared with last year's 1.15 lakh MT. India is looking forward to import Chana from Australia. On account of low consumption demand, Chana has entered a phase of price consolidation.

Desi urad recovered last week in the spot markets with MCX spot rising 3.08 per cent to close at 3,814 on Friday. Urad Jalgaon at NCDEX too firmed up 3.36 per cent to close at Rs 3,813 per quintal.

Urad futures traded sideways and prices more or less remained unmoved on both exchanges on account of huge price difference in spot and futures prices.

Desi tur futures rose sharply until mid-week to scale a high of Rs 1,915 per quintal, but later found some selling pressure and closed marginally higher at Rs 1,850 per quintal from the previous week's close of Rs 1,832.

Tur prices may continue to decline in the short term. Besides availability being surplus, demand is also expected to continue remaining low. Also, the medium term outlook remains bearish as availability remains surplus.