Indian corn futures are expected to trade range-bound with a negative bias next week as profit-taking after the recent rally in prices and fears of government action could outweigh strong demand and concerns over the monsoon.
Lower rains in key growing areas, which could trim sowing, have pushed up the price in the local market.
"There could be some correction in its prices this week as rally seems to have fizzled out, though it may not be a sharp one," said Chowda Reddy, senior analyst with JRG Wealth Management.
An expected decline in U.S. corn prices is also putting pressure as it could trim export demand for Indian corn, traders said.
Scattered rain in the north and east of the U.S. farm belt this week brought relief to this summer's drought. ID:nL2E8IPLNJ]
Rain in the northern Midwest in U.S. this week has likely improved crop prospects there but heat and dryness in the southwest continue to stress corn and soybeans, according to agricultural meteorologists.
The key August contract on the National Commodity and Derivatives Exchange (NCDEX) closed up 2.4 percent at 1,539 rupees per 100 kg.
In the Nizamabad spot market, corn, primarily used as poultry feed, rose 12 rupees to 1,397 rupees per 100 kg.
Indian cottonseed oilcake, or kapaskhali futures are likely to remain firm on concerns over decline in cotton acreage though traders predict it may touch a new contract high this week.
The key August contract on the NCDEX closed up 1.1 percent at 1,598 rupees per 100 kg.
Demand for oilcake, mainly used as cattlefeed, usually goes down with the beginning of rainy season due to availability of green fodder.
"Rains have improved in central India, which could drag down prices but concerns over cotton acreage may support prices and prevent a fall," said a trader based in New Delhi.
Kapaskhali is a by-product of cottonseed and used as cattlefeed, mostly in the north-western states of India.
At Akola, a key market in Maharashtra, cottonseed oilcake prices were flat at 1,581 rupees per 100 kg.
NCDEX has imposed a 20 percent special margin on the long side of cottonseed oilcake contracts, effective Saturday.