Wheat almost steady; bumper crop offsets exports.

MUMBAI: India's wheat futures were almost steady on Monday afternoon as bumper output and stocks offset market talk of increasing exports to Asian neighbours as a drought forced Russia to temporarily halt shipments, analysts and trade said. The September wheat contract on the National Commodity and Derivatives Exchange was down 0.13 percent at 1,270 rupees per 100 kg at 1:18 p.m.

Three traders said there is a likelihood of India allowing more exports to Asian buyers as Russia's absence from the overseas markets will boost prices. Russia is the world's third biggest exporter of wheat. U.S. wheat futures gained about 25 percent in the previous week as Russia's move to temporarily halt grain shipments sparked a buying frenzy.

"India may release more grains to neighbouring countries like Bangladesh the have already started the process," said an executive with a multinational trader. India has allowed the export of 300,000 tonnes of non-basmati rice and 200,000 tonnes of wheat to Bangladesh, a government statement said on Friday, as good rainfall and higher planting have boosted crop prospects.

India, which curbed grain exports in recent years to head off domestic price rises, made the announcement after two global suppliers cancelled deals to ship some 65,000 tonnes of Black Sea wheat to Bangladesh after Russia curbed grain exports.

Bangladesh, the world's fifth-biggest wheat importer, is expected to buy more than 3 million tonnes of the grain this year against 2.2 million tonnes the previous year. Trade expects India to allow upto 3 million tonnes of exports by end of December to manage stocks. "Even if India increases exports the price may not rally sharply as we have massive stocks and expect a record production," said an analyst with Agriwatch Research.

Food Corp of India had stocks of 33.58 million tonnes of wheat as on July 1, against buffer norms of 17.1 million tonnes, government data showed. The U.S Department of Agriculture estimated India's wheat output at 80.7 million tonnes, in a report released on Tuesday, while the Indian government estimated it at 80.71 million tonnes, a record harvest.

Source : economictimes.indiatimes.com