(Reuters) – Indian corn futures are likely to trade lower next week due to subdued demand from overseas buyers amid arrivals from the new season crop and expectations of higher production, though concerns about the quality of the crop after excessive rains could restrict losses.
Supplies from the new season harvest have been higher in the spot market and are likely to keep prices under pressure, spot traders said.
Overall corn production is expected to be higher than in the previous year, but excessive rains in parts of Andhra Pradesh, one of the leading cultivating states, have raised concerns about the quality of the crop, they said.
“Fresh deals are not being signed for Indian origin corn. In the short term, the trend looks weak but any sharp fall is unlikely because farmers will not sell their produce at lower prices,” said Deepak Chavan, a commodity analyst at Agro Futures in Pune, Maharashtra.
Reduced demand from the Asian feed millers in the first quarter of next year, as delayed cargoes from Brazil are flooding the market, may hurt corn prices in India.
Corn is cultivated during both summer and winter in India, Asia’s largest exporter of the grain, but most of the output comes from the summer crop.
The January contract for maize ended down 0.48 percent at 1,254 rupees per 100 kg ($5.20 per bushel) on the National Commodity and Derivatives Exchange.
The January contract is expected to trade in the range of 1,220-1,280 rupees next week, said Chowda Reddy, a senior analyst with Inditrade Derivatives and Commodities.
The Chicago Board of Trade March corn was up 0.23 percent at $4.34-1/2 a bushel at 1243 GMT due to unwinding of wheat/corn spreads, although gains were checked by the rejection by China of around 120,000 tonnes of U.S. corn tainted with a genetically modified strain not yet approved by its agriculture ministry.
