Wheat futures take a knock on hopes of higher yield

MUMBAI: In agri commodities on the NCDEX, the wheat counter is experiencing bearish sentiments with the prognostication of a good crop in 2006-07. The benchmark January contract was down a fifth of a per cent at Rs 1,080.2 per quintal, while the December contract fell almost three-fifths of a per cent at Rs 1,063.2.

Most analysts are apprehensive of being quoted in the aftermath of the FMC ban on PMS (portfolio management services) and advisory services related to fund management in the absence of any guidelines.

However, a prominent broker tracking wheat has advised selling April and May on dips. He expects wheat for December-January to be rangebound over the coming fortnight.

For December, Rs 1,050 is seen as the first support level, which, if breached, can touch Rs 1,030, while traders can buy around Rs 1,080 on expectations of an upside of Rs 1,100. The January contract support has been pegged at Rs 1,066, while resistance is at Rs 1,095 with upside anticipation at Rs 1,115.

Chana fell across all contracts too. The near month contract was down over a fourth of a per cent at Rs 2,867 per quintal, while the benchmark January contract was down over half a per cent at Rs 2,718.

Analysts see limited demand in chana and advise staying short in the far months, April and May, as arrivals at end-February and March would bring the market in contango. The January contract is expected to move within a small band. In order to facilitate more deliveries, NCDEX has decided to accept desi chana from all producing states at its warehouses in contracts from May 2007 onwards.

The situation is not bleak for urad as demand is expected to heighten with the onset of Pongal. “Currently, limited imported stocks are available and there is good demand from millers in Maharashtra and UP,” said Pankil Shah, head of commodities at Motilal Oswal.

He feels investors can stay invested in January with proper stop loss as upside for January is seen at Rs 3,200. Urad for December delivery closed up 1.7% at Rs 3,364 per quintal while the most active January contract zoomed up 2.5% at Rs 3,183 per quintal.

Tur for December was up three-fifths of a per cent at Rs 1,834 per quintal while the January contract closed up 0.7% at Rs 1,917. A trader said only limited upside or downside movement could be expected in the two contracts once estimates of the new crop became clear. Major producing states are Maharashtra, Uttar Pradesh, Karnataka, Madhya Pradesh and Gujarat.