Maize Futures May Recover On Lack Of Stocks

Mumbai: Volatile maize futures are set to trade on the higher side despite forecast of a bumper 2007 kharif production of 13 million tonnes, against last year’s production (kharif and rabi) of 11.5 mt.

In 2006-07, maize prices touched a peak of Rs 835-840 levels per quintal in March and since crashed to a low of the current level of Rs 697.

Maize prices had fallen as the poultry industry, which consumes nearly 70 per cent of the production, shifted to soyameal.

“Traders turned bearish on information that the acreage under maize had increased by 10-15 per cent,” said Harish Galipalli, head of research, Karvy Comtrade.

However, analysts feel that the prices have bottomed out and are expected to recover in the short-term.

Warehouses have no inventories due to rise in exports to Sri Lanka and Bangladesh.

Demand from domestic starch and poultry feed manufacturers are expected to increase in the coming days. Kharif arrivals of 15,000-20,000 bags (100 kg) per day to the Nizamabad markets have started, while in Maharashtra and Karnataka it is picking up pace.

Increase in demand

Less moisture content in the Nizamabad stock has attracted buyers at this lower price level.

“Increasing ethanol demand is an additional factor for a bullish sentiment in the long-term,” said Galipalli.

The near-month November contract on NCDEX, after touching a low of Rs 663 rose to Rs 745 levels and is currently trading at Rs 685.

“Market is expected to move up with support at Rs 680 per quintal and if breached may test Rs 665 levels. Once it tops Rs 745 levels, the trend may reverse,” he said.