Trading limits pull wheat prices down

MUMBAI: On Thursday, wheat for September delivery on the NCDEX was down about half a per cent at Rs 961 per quintal. The reason for the fall in the September contract prices is mainly due to the rollover of positions from near to far month as the open position limits set by FMC come into effect from September 1, said a Mumbai-based broker.

The near month position limits for clients had been fixed at 2,000m tonnes and many participants have been squaring off their positions to take fresh ones in the October contract, he said.

The October contract which was a tad lower from Wednesday’s closing price at Rs 981 per quintal witnessed volumes of 19,510 metric tonnes compared with 12,030m tonnes in the September contract.

Also, since the September contract specifications have provided for a premium for delivery from Karnal and Khanna, traders have been buying wheat in the cash market and selling in the futures segment. This has resulted in the September contract quoting at a discount to cash wheat in Delhi, which is near Rs 990 levels per quintal, said a research analyst.

In chana too there has been a rollover of positions to cater to FMC guidelines on near-month position limits with effect from September 1. The imposition of additional margins on net long (15%) and short positions (10%) could also have impacted sentiment. While chana for September delivery closed at Rs 2,747 per quintal from Rs 2,766 on Wednesday, October chana closed at Rs 2,760 per quintal from Rs 2,785 on Wednesday. Volumes for October chana were at 2,15,340m tonnes against 50,570m tonnes for the September contract, while open interest was 97,490 and 43,880 respectively.

Volumes on NCDEX were Rs 3,942 crore (one-way) and 113,382 trades were put through by members . Bullion, metals and energy rose substantially in the domestic futures market taking cues from the international market, on speculation that Iran will defy the UN deadline to stop enriching uranium.

The combined bullion contracts registered a turnover of nearly Rs 1,876 crore, the open interest for gold contracts was 14,734 kg while the outstanding position for silver was 240,595 kg.In the bullion segment, MCX October gold closed at Rs 9,523 per 10 gm, up Rs 68, MCX silver for September closed at Rs 19,161 per kg, up Rs 91.

In the metals segment, MCX copper contracts registered a turnover of Rs 493.1 crore with 13,911,000 kg as volumes; while MCX zinc registered a turnover Rs 60.2 crore with 3,815 tonnes as volumes. MCX August copper closed at Rs 355.2, up Rs 7.7. MCX September zinc closed at Rs 158.40 a kg up Rs 2.4 from the previous close. In the energy segment, crude oil contracts showed a turnover of Rs 179.8 crore with open interest of 761,000 bbl.