Wheat (Wheat Prices May Remain Under Pressure )

As on 13th June, Wheat mill delivery is trading at Rs.1510 per quintal at Khanna Market and

Rs.1480-1500 per quintal at Ludhiana Market.

In a fresh directive to FCI, the Food Ministry said, "Besides continuing sale of wheat in non-

wheat producing states, FCI will take action to liquidate surplus stock of wheat from its

depots located in Punjab and Haryana during the period of June 2015 to March 2016."

Wheat will be sold to bulk consumers in wheat-producing states at Rs 1,550 per quintal, it

said.

Overall the supply of Wheat might remain in the range of Rs.1460-1550 per quintal this year

considering the ending stocks across World might remain same as previous year stock, but

being largest since 2009-10.

In India wheat stocks reduction was seen due to untimely rains, the prices might remain under

pressure due to good supply across World. Any weather change on harvesting countries can

impact the supply of wheat which can push the prices up.

Production/Supply

Looking forward at global market where US government forecast winter wheat production at

1.505 billion bushels, up 33 million bushels from its estimate last month.

The International Grains Council (IGC) on May 28 projected 2015-16 world wheat

production at 715 million tonnes, up 10 million tonnes from its April projection but down 6

million tonnes from a record 721 million tonnes in 2014-15.

If the projection holds true, the 2015-16 crop would be the worlds second largest. The IGC pointed out since its April projections, it raised its forecasts for wheat production in the E.U.,

the Commonwealth of Independent States (former-Soviet Union), China and Morocco.

Production increases projected for those countries more than offset lower production

forecasts for the U.S., India and Pakistan.

As per WASDE, Global wheat supplies for 2015/16 are raised 2.1 million tons as a 2.6-

million-ton increase in production is partly offset by a 0.6-million-ton reduction in beginning

stocks.

Production is raised 1.5 million tons for Russia and 1.0 million tons for Ukraine on improved

spring rains following last autumns drought. The EU crop is raised 0.4 million tons on good growing conditions in United Kingdom and France.

Partially offsetting is a 0.5-million-ton reduction in Argentina, and 0.3-million-ton reductions

each for Algeria and Tunisia.

Beginning stocks are reduced 0.7 million tons each for Iran, Russia, and Syria on trade

changes for the 2014/15 crop year. The largest beginning stocks increase is 0.5 million tons

for Argentina on lower 2014/15 exports.

Beginning stocks for 2015/16 are raised 0.2 million tons each for Bangladesh, EU, Morocco,

Philippines, and Thailand.

Demand/Trade

World wheat consumption in 2015-16 was projected at a record 715 million tonnes, up 4

million tonnes from the April outlook and compared with a forecast 710 million tonnes in

2014-15, the current record.

The IGC noted a projected increase in food and industrial demand for wheat would be partly

offset by declines in feed and other uses. Consumption as human food was projected at 484

million tonnes, up 1.2% from 2014-15.

World trade in wheat in 2015-16 was projected at 149 million tonnes, down 2 million tonnes

from the IGCs April projection, down 4 million tonnes from 153 million tonnes in 2014-15

and compared with a record 156 million tonnes in 2013-14

The IGC said the lower world trade projection for 2015-16 was because of weaker import

needs in Near East Asia, particularly in Turkey, the E.U. and North Africa.

As per WASDE report, Global wheat trade and consumption for 2015/16 are raised with

larger foreign supplies. Imports are raised 0.5 million tons for EU on large supplies in

Ukraine, and 0.3 million tons for Algeria on a smaller crop. Imports are raised 0.2 million

tons each for Egypt, Tunisia, Thailand, and Yemen.

World wheat exports are raised 1.5 million tons with Russia and Ukraine each raised 1.0

million tons on larger crops. Partially offsetting is a 0.5-million-ton reduction for Argentina.

Foreign consumption is raised 2.6 million tons with almost all of it on higher feeding.

Feeding is raised 1.0 million tons in EU, 0.5 million tons in Russia, and 0.4 million tons in

Thailand.

USDA pegged 2015/16 domestic ending stocks for wheat at 814 million bushels, up from 793

million bushels in May.

Global stocks are pegged at 202.4 million tons, down 0.9 million tons from last month but

still the largest since 2009/10.

The IGC projected world wheat ending stocks for 2015-16 at 200 million tonnes, up 6 million

tonnes from the April projection and equal to the forecast 2014-15 ending stocks.

Technical Outlook

Wheat july contract on NCDEX might remain sideways within the range of Rs.1472-1542. At

current rate which is Rs.1486 as on 16th June, the rate is good enough to buy physical stocks

on exchange.

Traders can wait for the prices to break above Rs.1542 and target Rs.1700 per quintal.

Barley ( Barley Prices May Remain Sideways For Some Time)

Barley Dara loose is trading at Rs.1320-1380 per quintal at Agra market (U.P.) and Other

quality is trading at Rs. 1121-1155 per quintal at Sri Ganganagar (Rajasthan).

The production of Barley is projected less across World and ending stocks are forecasted at

low levels. The price of this commodity normally increases during winter time when all

breweries have high demand of Barley.

So prices of barley might improve in later half year and can offer good returns.

Production/Supply

In global markets as per IGC, Barley production is projected at 136.9 million tons in 2015-16

compared to 141 million tons in 2014-15. The projected 3% decline was due to smaller

harvest in EU and CIS .

Barley production in the EU has been raised to 59.5m tonnes from 58.6m tonnes forecast in

April.

However as per WASDE, production is projected at 138.5 million tons in 2015-16 as

compared to 140.76 million tons in 2014-15. The major reduction is noticed in countries like

European Union, Russia, Ukraine and India.

In India production is projected at 1.63 million tons in 2015-16 as against 1.83 million tons in

2014-15.

Demand/Trade

As per IGC, trade in barley is projected at 25 million tons in 2015-16 compared to 30 million

tons forecasted in 2014-15 which is 16% decline. However it is forecasted more compared to

23 million tons in 2013-14 due to upward revision for China.

As per WASDE, Barley exports for 2014/15 are projected 400,000 bushels larger.

Global Consumption is projected at 138 million tons in 2015-16 as opposed to 142 million

tons in 2014-15. A contract of 3%, mostly due to lower use in North Africa and Near East

Asia.

Stocks are seen receding by 4% in 2015/16, with those in the major exporters potentially at a

20-year low

Carryover stocks are projected at 24 million tons in 2015-16 as compared to 25 million tons

forecasted in 2014-15.

Technical Outlook

Barley July contract on NCDEX might remain sideways within range of Rs.1240-1327 per

quintal which is good range to buy the physical stocks on exchange.

Traders can buy stock once it crosses above Rs.1327 per quintal with target of Rs.1645-1685

per quintal.