In Commodity News 11/03/2016
India’s wheat crop, the world’s second largest, is at risk from rain and hail forecast over the next four days after unseasonably wet weather shrunk the previous crop to the smallest in five years.
Northwest and central regions of India, the main wheat-growing areas, will get thunderstorms accompanied by strong wind and hail over the next three to four days, the India Meteorological Department said in a statement. The agency advised farmers to reap matured crops at the earliest and secure already-harvested grain. Harvesting normally starts in April and ends by June.
A smaller Indian crop may help alleviate a global wheat glut that sent prices to a third annual loss in 2015. Production will be 86.53 million metric tons this year, down from last month’s forecast of 88.94 million tons, the U.S. Department of Agriculture said Wednesday. Indian imports may increase if the crop is damaged, according to Kotak Commodity Services Ltd.
“Any unseasonal weather pattern, especially during February-March, is not good for the crop,” said Faiyaz Hudani, associate vice president at Kotak in Mumbai. “Sentiments should definitely turn bullish on the price front and a lot will depend on how much damage the hailstorm does to the crop.”
About 19 million hectares (47 million acres) of crops from wheat to rapeseed and vegetables were damaged last year as rainfall more than double the 50-year average in February and March drenched fields, according to government data. The main wheat-producing regions had almost five times the average, data show. That discolored the grain and raised moisture content.
India’s agriculture ministry estimates wheat production to rebound to 93.8 million tons in 2015-16 from 86.5 million tons a year earlier, which was the smallest harvest since 2009-10. That compares with the 84.5 million tons median forecast in a Bloomberg survey in February.
Wheat for May delivery lost 0.1 percent to $4.6775 a bushel on the Chicago Board of Trade. Prices are 0.5 percent lower this year after posting a 20 percent loss last year.
