The commodity futures market, considered as a platform for price discovery, seems to have so far discounted the prospect of good agricultural production this year as rates quoted for October-November contracts are ruling higher than the current level for most items.
According to traders, generally the rates quoted under futures contracts remain lower when supply is expected to increase.
But leading commodity exchanges, NCDEX and MCX, show that speculators, traders and hedgers are quoting higher prices from the current rate for most of the products to be delivered three or four months from now.
Government data shows that acreage of most crops has increased in the ongoing kharif season, compared with the year-ago period, which means a better output provided weather conditions continue to remain conducive.
Futures prices of November and December delivery of groundnut at NCDEX are higher than the current level even as the acreage under it is up by 10% this year as on 3 August.
Groundnut (in shell) November contract at the exchange is up by about 2% at Rs580.55 per 20 kg from Rs69.95 August delivery level. The September contract is ruling at Rs573.50 per 20 kg, while the October delivery is projected at Rs576.85 per 20 kg.
In soyabean, however, the market sentiment is weak. Futures prices at NCDEX for December contract is ruling at Rs1,512.50 per quintal from the August delivery of Rs1,555.50 a quintal.
“Soyabean is an exception as its prices are dependent on the domestic soya oil price, which is again influenced by the quantity of imports and global prices,” a wholesale edible oil trader said.
Cotton for November delivery at the futures market is also higher at Rs21,174 per candy from Rs20,788 for August contract.
Jeera futures of October contract is ruling at Rs12,456 per quintal against the August contract at Rs11,938 a quintal.
Masoor October delivery closed last week at Rs2,861 per quintal as against Rs2,827 of August contract.
Yellow peas are also going northwards with its October futures at NCDEX ruling at Rs1,955 per quintal as against Rs1,932 a quintal in August.
The futures of cardamom at MCX are also up at Rs565.50 a kg for November delivery, while the August contract is at Rs 520.70 per kg.
Potato futures for Agra delivery are also on the surge at Rs659 per quintal for October from Rs630 a quintal for August contract.