Mumbai: Indian wheat futures may trade in a narrow range on Tuesday as expectations that the government will sell stocks from its granaries in the local market may offset concerns of lower rice output, analysts said.
The September futures contract on National Commodity and Derivatives Exchange last ended at Rs1,166.6 per 100kg, up 0.05%.
Analysts said if government releases 3 million tonnes of wheat and 2.5 tonnes of rice through open market scheme, as media reports say, prices will come down significantly in short-term.
Wheat stocks stood at 32.92 million tonnes as on 1 July, almost double the required buffer norm of 17 million tonnes.
According to latest data, India has procured 25.13 million tonnes of wheat in 2009/10 marketing year that began in April, up from 22.6 million tonnes in the previous year.
Prices of the grain have been moving up in the last few days on hopes of higher demand driven by a drop in rice sowing due to deficient monsoon rains, analysts said.
As per latest data, paddy sowing area fell to 24.74 million hectares from 30.45 million hectares because of weak monsoon rains.