Commodity Outlook – Wheat

agribazaar January 15, 2020

Sowing period: October
Harvesting period: April to May
Crop season: Rabi

According to Ministry of Agriculture, the sowing acreage of Wheat as on January 10, 2020 was 326.46 lakh hectares (lh) up by 11.11 percent compared to 293.81 lh during the corresponding period.
Stock positions of Wheat were down by 21.06 percent held at National Commodity Clearing Limited (NCCL) approved warehouses at Kota location. The stocks held as on January 1, 2020 was 967 MT compared to 1,225 MT as on December 16, 2019.
According to media reports The Food Crop of India (FCI) has proposed to reduce the offer price of wheat under open market sale scheme (OMSS) to Rs. 2,145 per 100 kg from Rs. 2,245 in order to make the central pool stock more attractive for bulk users.
The Food Ministry of India had hiked the base price Wheat for FY 2019-20 at an increase of 55, during each quarter as mentioned in the below table:

Source: Agmarknet
Note: January Mandi arrivals are for the period: 1 – 15 January 2020

Source: NCDEX
Note: Markets currently are in Backward direction where the Spot market prices are higher than the Futures market prices.

Source: NCDEX

Wheat prices are likely to trade steady to weak in the immediate / short term.
For the 2020-21 Rabi marketing season (RMS), the government fixed minimum support price for Wheat at Rs. 1,925 per 100 kg, up by 4.62 percent from Rs. 1,840 a year ago per 100 kg for 2019-20 RMS.