Farm Commodity prices Soften on Monsoon Hopes, Cereals Lead Fall

Prices of agriculture commodities have softened on hopes of a normal monsoon, following a steep rise in the first half of May on concerns that the heat wave would take a toll on rainfall. Prices in several commodities began correcting in the middle of the last month, and in many more during the past week.
Among cereals, maize and bajra have seen sharp fall, followed by guar seed and castor seeds. However, oilseeds led by Soybean, and other farm produce such as wheat, pulses, spices, and even cotton fell. Traders used the forecasts as the trigger. While players in the futures market were waiting for an opportunity to book profits or generate liquidity, those in the spot market, who were already reeling under a cash crunch, also sold their stocks, setting off a fall in prices, starting in the second half of May. Some traders incurred mark-to-market losses in long positions, which forced them to sell.

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