Indian Wheat Latest

With rice production this year expected to fall to more than 7 MMT below the level of production, India is keeping its fingers crossed that late season heat doesn't cause too much damage for the impending wheat crop.

Indian wheat potential was damaged by a very warm and dry February in the normally high-yielding states Punjab and Haryana pushing wheat development rapidly towards maturity, says Gail Martell of Martell Crop Projections:

Hot temperatures are forecast continue this week, with highs in the 90-97 degrees Fahrenheit (32-36 degrees Celsius) range in the northern wheat states. An 82.3 MMT harvest will not be achieved as the Indian government had hoped for, as heat late in the growing season is very damaging reducing kernel-fill, says Gail.

Despite constantly insisting that domestic wheat stocks are plentiful, bordering on burdensome, the Indian government yesterday announced that they were considering extending the period in which wheat can be imported duty free until the end of 2010. The current duty free regime expires at the end of this month.

Today they have dropped their wheat production estimate for the coming harvest to 80.28 MMT.

Who knows what the real stock situation is in India? The government recently forecast that they would have nearly 15 MMT of old crop wheat left in storage when the new marketing year begins on April 1.

Due to their constant prevarications and hesitation across the winter as to whether to allow any of their 'burdensome stocks' go for export, I strongly suspect that much that has either already been eaten by rats, exported via the back door, or wouldn't pass as fit for canine consumption let alone anything else.

The government plan to buy a further 24 MMT from farmers in the new MY, according to the Press Trust of India. Annual consumption is pegged at around 76 MMT. If production this year comes in nearer to that sort of number, the reality of the Indian stock situation could be a whole lot tighter than the paperwork suggests.