Tuesday, July 28, 2009

Oregon Admits Ethanol Damages Engines

Good Ethanol-free Gas Now Available in Oregon

Pressure from consumers (voters) caused Oregon Governor Ted Kulongoski to change Oregon law in order to sell premium gasoline with ethanol blended with it, as outraged consumers rebel against the horrid fuel as it destroys their expensive small engine products.

Now Oregonians will have good gas available for their machines as before only a few scattered stations sold ethanol free gas, and it was prohibitive to get it for many in the state.

All gas stations across the state can now sell good gas, and hopefully this will encourage other states to follow, and get rid of this worthless, tax payer-financed boondoggle that, while promoting some political careers, is devastating to consumers and the environment, in name of, of course, the environment.

This is nothing new, as boat motor owners, chainsaw owners, snowmobile owners, law mower owners, and any small engine machinery owner of any kind have discovered: ethanol is bad gas, and the sooner we get rid of the misguided policy, the better.

What this does is confirm what was always known - but stubbornly and criminally neglected - that ethanol is damaging, and needs to be completely rejected, as the industry can't survive unless as another socialist industry that people simply have no desire to underwrite, and in an alleged free market like the united States, shouldn't have to.

Incredibly, federal authorities and regulators are actually thinking about increasing ethanol blends to 15 percent, which many fear would start to damage some automobiles as well.

Antique autos already suffer from having to use the gas, although in Oregon, that has now changed.

How about some class action lawsuits to destroy this industry forever. Nobody but politicians and greed big business farmers want this to continue, and that's not a good enough reason to destroy poor people through higer food prices because of the artificial industry, and that includes many of the poorest countries in the world, which resulted in food riots because of high prices from the ethanol nonsense.

Good Ethanol-free Gas Now Available in Oregon

Gold Prices | 12-Day Low

Gold Prices

Gold prices plunged to a 12-day low, after a 2 percent drop in oil prices and 1 percent decline in U.S. equity indexes, as investors took profits when a weak U.S. confidence reading implied consumer demand would languish for some time to come, and that will definitely be true.

Other precious metals, which rose to multi-week highs in early trading, changing direction to also suffer steep losses when investors decided to sell a bunch of commodities it the midst declining confidence.

Spot gold dropped to a low of $934.70 an ounce, its lowest since July 17, to change hands in late New York trade a bit higher at $936.95 an ounce, down from $953.25 an ounce in late Monday business.

New York August gold futures tumbled $14.40, or 1.51 percent, to $939.10 an ounce on the COMEX division of the New York Mercantile Exchange.

August gold's average plummeted to a low at $933.80 - last experienced on July 17 - from a day's high at $956.80.

Along with lower oil and share prices, gold added to losses when the U.S. dollar increased from its lowest level of the year against a currency basket. The dollar rebounded as sinking confidence rekindled worries about the U.S. economic recovery and increased demand for safe-haven assets.

Gold, like other dollar-priced commodities, becomes less expensive for holders of other currencies as the U.S. unit weakens.

"We ran into profit taking. We had a technical failure at the $956 level. A little bit of dollar strength, a little bit of stock market weakness, a little bit of crude weakness cascaded into the tight trailing stops," said Frank McGhee, head precious metals trader at Integrated Brokerage Services LLC in Chicago.

McGhee said there were a number of factors driving the price down, including a series of automatic sell orders bunched up between $942 to $958 an ounce that lead to accelerated selling in the New York afternoon session.

Crude prices fell 2 percent, causing interest in gold to decline as a hedge against oil-led inflation.

Gold Prices

CFTC Caves in to Government

Government Interference in Oil Markets

Somehow the Commodity Futures Trading Commission, which has always said it has never found a correlation between speculation and oil price swings, has suddenly got regulation religion, and now says it's ready to go before Congress and 'admit' speculators are playing a huge role in price runups. This is plain evil, and an investigation needs to be conducted on where this new found information has come from, and if shady politicians and some big energy companies are behind the new found information.

Any price swing in any commodity can happen short term with commodity investors, but to say that is what's behind the price swing of last year which pushed oil prices up is in itself huge speculation, and just another attempt by the socialist Obama and Democrats to attempt to play god, thinking they can alter the age-old reality of supply and demand.

One of the major reasons this is ludicrous is commodity investors can make money when prices go up and down, and so the idea they can push prices up on their own has no merit, and supply and demand always bring it back to reality either way, as consumer respond to price swings. It's as simple as that, and the strong-arming and dishonesty emerging concerning so-called speculators being able to manipulate the market in any meaningful way is just ugly and a lie.

Some Democrats need to be investigate concerning this, along with the Commodity Futures Trading Commission to see if there is any criminal activity concerning this sudden turn around by the CFTC, which is unprecedented.

Misguided and misinformed watchers say this will help consumers. No it won't. Consumers do struggle at times when prices swing up, but they also profit tremendously when prices go down. To say government regulation of the oil market will make a difference is stupid and ignorant.

The failure of socialism and turning of communist countries to capitalism has already shown that governments cannot and should not attempt to interfere with any market, as the unintended consequences that always follow never seem to teach them to stick to minding their own business, rather than interfering with the market place.

Government Interference in Oil Markets

Silver Market Outperforming Gold

Silver Prices Going Up

So far this year silver has outperformed gold, and that could continue on for some times, as silver is not only used as a hedge against inflation, but trades much more on supply and demand than its stronger cousin gold, which will keep silver prices going up.

With commodities certain to perform strongly in the years ahead, and silver possibly one of the potentially strongest performers among commodity metals, it future looks bright for investors in this area.

Those that understand commodities are starting to respond stronger in preparation for that, and one of those is the European-based ETF Securities, which has just created a new ETF focusing on silver.

"It's the first step in building a platform for commodities," said Graham Tuckwell, founder and chairman of ETF Securities.

This particular ETF will buy silver, and those investing in it will be buying into physical silver stored in a vault and stamped with a serial number.

Silver prices should continue to go up as demand outpaces supply, and new demand causes permanent usage of the metal which is unrecoverable.

Silver Prices Going Up

Corn Silking Behind 5-year Average

Corn Silking, doughing news

While corn silking improved by 24 points for the week, now standing 55 percent complete, which is equal to last year's silking, but far behind the 5-year corn silking average by 21 points.

The corn belt performed very well because conditions have remained ideal for corn silking, as 34 percent of the crop is at that stage in Minnesota and Iowa. Illinois corn silking came in at 27 percent.

Acroos the nation, 7 percent of corn acreage is beyond the dough stage, again, the same as last year at this time, but 10 points slower than the average.

North Carolina has the most advanced doughing stage, now standing at 80 percent complete, while Minnesota and Iowa haven't reached that stage yet, and neither has corn in other Great Lakes regions or Great Plains regions.

Appromimately 70 percent of all corn in the U.S. is rated as good to excellent in condition, a little down from last week, but still 4 points better than a year ago at this time.

Corn silking, doughing news

Funding of Perennial Wheat Study

Perennial Wheat Research

While the idea of developing a perennial wheat strain is a great one, the thought of using taxpayers money to do it is outrageous.

Researchers at Michigan State University are recipients of the $1 million in federal grants (taxpayers money) to work on developing a perennial wheat strain.

There's the potential to generate huge savings for farmers if wheat didn't have to be replanted every season. The fuel and labor cost declines would be magnificent.

According to lead researcher Sieg Snapp, a perennial wheat strain would help reduce erosion problems and keep moisture in the soil longer.

Again, the idea is a great one, it should be done with private money and entrepreneurs, not taxpayer money.

Perennial Wheat Research

Montana Winter Wheat Harvest Starts

Montana Winter Wheat Harvest

Reports are the winter wheat harvest in Montana has started, according to the Montana Crop Weather Report issued Monday at the Montana Field Office of the National Agricultural Statistics Service.

Approximately 4 percent of the state's winter wheat harvest is complete, in contrast to 2 percent during the same time period last year. This is far behind the five-year winter wheat harvest average in Montana, which usually stands at 25 percent at this time.

So far farmers are rating the Montana winter wheat crop at 41 percent good and only 36 percent fair.

Close to 30 percent of the Montana spring wheat crop is turning according to the report, in comparison to 46 percent last years at the same time. That is faring a little better, with farmers rating the spring wheat crop at 47 percent good, while 31 percent is rated as fair.

The conditons of range and pasture feed are down about five percent from last year, with 39 percent being rated as good, a decline from 44 percent last year during the same period.

Dry conditions have causes pastures to dry up.

Montana Winter Wheat Harvest

Tuesday, July 21, 2009

CBOT Owner Resists Wheat Restrictions

Wheat Markets

The attempt by the government to regulate and interfere with the wheat market could be another disaster in the making, as the completely foolish, misguided and clueless Democrats continue their assault on free markets.

According to Charles Carey, vice chairman of CBOT owner CME Group Inc., government restrictions on trading "are more likely to be harmful to the functioning of our markets than helpful," and he's absolutely right.

The idea that we should have some type of perfection in place so no one ever gets hurt is outrageous, socialist and fascist to the core. Short term fluctations in wheat prices will never last, and that's the illusory problem the goofy Democrats think needs to be solved.

Unbelievably, federal regulators are "seriously considering" restrictions in the wheat futures market being urged by lawmakers concerned over speculation they say has artificially inflated prices, supposedly interfering risk management by farmers and grain processors.

After a wasted year and time, a faux investigation by the investigative panel of the Senate Homeland Security and Governmental Affairs Committee found that the disconnect between the wheat futures and cash markets can mean higher prices for consumers. They say this with a straight face when corn prices and lack of planting of wheat does more to jack up the prices because of other government interference through subsidies from taxpayers dollars.

A number of senators have called on the Commodity Futures Trading Commission to restrict the volume of index trading in the wheat futures market on the Chicago Board of Trade, a completely ridiculous idea.

Foolishly, CFTC Chairman Gary Gensler told the Senate subcommittee at a recent hearing that the agency "is seriously considering this recommendation ... (and) will continue to closely monitor the performance of the wheat futures contract."

Democrat Panel chairman Carl Levin, ignorantly said such a review "is badly needed." Several other members of the committee, representing farm states, voiced concern about the impact of market problems on wheat producers in those states.

Again, to me much of this is to hide the real culprit in wheat prices, federal subsidies of corn for the failing corn-based ethanol industry, which is pushing up prices because of less acreage used for wheat because of the artifical price increases created by the U.S. government.

But an official of the company that operates the Chicago Board of Trade, where wheat futures are traded, opposed such constraints and disputed the Senate probe's findings, as mentiond above from Charles Carey's accurate comments.

The idea of attempting to manipulate the market by the U.S. government and Democrats will fail, as the utopian idea of reducing risk is completely foolish and always fails, and the wheat and commodities markets overall will suffer.

Commodity indexes include futures contracts for delivery in different months. Commodity index traders sell financial instruments whose values rise and fall along with the value of the index on which they are located.

Commodity index traders acquire wheat futures to help offset their risk from selling the instruments to third parties. That pumps billions of dollars into the market and lifts demand and prices for wheat futures, the faulty results of the Senate investigation found.

Other related to the risk factors are also whining about the alleged discrepencies, as one person representing the American Bakers Association and the Sara Lee Corp said at the hearing, "Bakers cannot escape the impact. Today's volatility represents millions of dollars daily in undue financial risk."

What this disingenous bureaucrat doesn't say is this has always been the case, and the those that manage this risk factor are the ones who win. In the stimulous and spirit of bailing out company after company, those that can't compete are attempting to make it look like something unusual is happening, when in fact it has been the practice and way of doing business for a long time.

The one who knows about this the best is Charles Carey, vice chairman of CBOT owner CME Group Inc., and he concludes that the findings of the Senate report "are based on faulty economic analysis and a misunderstanding of basic market economics."

Just look at what the Democrats and Obama are doing to destroy America with its socialist and fascist policies, and you can easily understand how this group of politicians are among the most inexperienced and naive in American history; in both foreign and domestic policy, and they need to just shut up and let the free market work things out, which it always has done.

Wheat Markets

Friday, July 17, 2009

US Mint Launches 2009 Silver Proof Set

US Mint 18-coin 2009 Silver Proof Set

The US Mint just launched the 18-coin 2009 Silver Proof Set for $52.95. The annual set is a favorite with collectors, highlighted by the no longer available 2008 Silver Proof Set with sales of 774,874 as of Sunday.

The 2009 set is actually $8 more than last year’s offering, but it also includes an additional silver quarter and four bicentennial 2009 Lincoln cents specially struck in 95% copper, 3% zinc and 2% tin — the same alloy used in the original 1909 penny.

Similar to the fast-selling 2009 clad proof set that was issued by the Mint in June, the silver set contains collector proof versions of circulating 2009 coinage. All coins bear the "S" mint mark denoting they were minted at the United States Mint in San Francisco. Additionally, the dime, half-dollar, and six quarters are struck in lustrous 90 percent silver. The set has an intrinsic silver value of $19.99 at Friday’s silver spot price of $13.16 an ounce.

The following 18 coins are included in the set:
Four 2009-S Lincoln Cents: Lincoln Birthplace Penny, Lincoln Formative Years Penny, Lincoln Professional Life Penny and Lincoln Presidency Penny
2009-S Jefferson nickel
2009-S Roosevelt dime
Six 2009-S Quarters: DC quarter, Puerto Rico quarter, Guam quarter, American Samoa quarter, US Virgin Islands quarter and Northern Mariana Islands quarter
2009-S Kennedy half-dollar
2009-S Native American $1 Coin
Four 2009-S Presidential Dollar Coins: Harrison $1 Coin, Tyler $1 Coin, Polk Presidential $1 and Taylor Presidential $1

What are proof sets? As described by the Mint, they are:

"Proof coins are extraordinarily brilliant, with sharp relief and a mirror-like background. Their frosted, sculpted foregrounds give them a special cameo effect. Proof blanks are specially treated, polished and cleaned to ensure high-quality strikes. The blanks are then fed into presses fitted with specially polished dies and struck at least twice to ensure sharp relief."

2009 US Mint Silver Proof Set order information

No limits are in place and ordering is available directly on the US Mint page:

United States Mint 2009 Silver Proof Set™

Sets may also be purchased through the Mint’s toll-free number, 1-800-USA-MINT (872-6468). Hearing and speech-impaired customers may order by calling 1-888-321-MINT (6468).

The Mint indicates domestic orders will include a $4.95 shipping and handling charge.

US Mint 18-coin 2009 Silver Proof Set

Cash for Corn Cobs?

Cash for corn cobs a stupid idea

Using tax payer money for subsidizing farmers even more than the outrageous levels they're already being subsidized at is outrageous and criminal.

We don't need any more subsidies of corn, as the artificial market created through the nonsensical ethanol policy are detrimental and misguided, as wheat production suffers, and the poor around the world as well. That won't stop the outrage until food riots start again though, as prices surge above market levels in the socialist induced artificial market for corn and now corn cobs.

Cobs, the refuse left behind after harvest, are now plowed back into fields. But companies from California and South Dakota plan to start changing that by building two plants in Iowa, one to turn the material into ethanol and another to produce fertilizer.

Boyer already sells most of the corn from his farm to a traditional ethanol plant. Most ethanol in the U.S. is made from corn kernels.

But a $200 million plant being built by Sioux Falls, S.D.-based Poet Energy will make cellulosic ethanol, which comes from plant material such as cobs, wood chips and switchgrass. About two dozen cellulosic ethanol projects are being developed or built around the country, according to the Renewable Fuels Association.

The projects vary by region, with companies using whatever local crop is available. Louisiana and Florida companies, for instance, are using sugar cane, while one based in Oregon plans to convert poplar tress and wood chips into ethanol.

In Iowa, it's corn, and a switch from regular to cellulosic could mean more kernels are available for human food and livestock feed.

The push for new ways to produce cellulosic ethanol comes as many ethanol makers are struggling to turn a profit. They've had to drop prices to remain competitive as gas prices have fallen, but the cost of corn used to make ethanol has remained relatively high, said David Swenson, a researcher at Iowa State University.

Some of the largest producers have declared bankruptcy or been sold.

Poet spokesman Nathan Schock said the company hasn't yet figured out how much it will pay farmers, but it could be $30 to $60 per ton for corn stover, which includes cobs and some stalk. An average acre in Iowa yields about 1.5 tons of corn stover.

The company's payments to farmers could be supplemented by the federal government through the Biomass Crop Assistance Program.

Poet's plant in Emmetsburg, about 120 miles northwest of Des Moines, is expected to produce about 25 million gallons of ethanol per year when it opens in 2011. It could generate as much as $10 million per year in extra income for farmers.

Meanwhile, San Francisco-based SynGest, Inc., plans to build an $80 million facility in Menlo, about 40 miles west of Des Moines, that will be the first to make ammonia fertilizer from corn cobs.

The plant, expected to be completed by fall 2011, will process 130,000 tons of cobs per year into 50,000 tons of fertilizer, or enough for 100,000 acres of corn, SynGest CEO Jack Oswald said. Farmers would get about $50 per ton of cobs.

The company plans to market ammonia fertilizer to nearby farms as alternative to nitrogen fertilizer, which is made from oil. More than half the nation's supply of nitrogen fertilizer is imported, which drives up the price to farmers, Oswald said.

Poet expects $100 million in federal and state aid to build its plant, while SynGest has applied for $40 million in federal aid and additional state help.

Farmers said they'd like to trade their trash for cash, but most lack equipment to easily scoop up cobs. Prototypes for such machines are being built, but they could cost more than the cobs bring in. Boyer said a lot of questions remain.

Clark Bredahl, who raises corn, soybeans and cattle 320 acres near Greenfield, also said he'd need to figure out whether selling his cobs made economic sense.

This farmer is right. This is a bunch of ridiculous nonsense initiated by those attempting to fleece more taxpayers of their hard earned money in order to shore up a very stupid socialist corn and energy fiasco.

Cash for corn cobs a stupid idea

Commercial Biotech Modified Wheat

Biotech Modified Wheat

There can be no doubt that whether opposition to modified wheat like it or not, there will be commercialization sometime in the near future, as the alternative could never be acceptable.

Growing demand for wheat products and other foodstuffs will continue for some time, as emerging markets and growing middle classes increase their food consumption.

A lot of U.S. farmers have been positive about renewed efforts by biotech crop leader Monsanto Co to genetically modified wheat, but convincing world markets to embrace genetic alteration of the key food crop remains a big challenge to overcome.

Monsanto added fuel to a debate over biotech wheat on Tuesday when it announced it was buying WestBred LLC, a wheat germplasm specialist as a platform to develop higher-yielding biotech wheat that would be more tolerant of drought and require less nitrogen.

Along with Monsanto, rival seed technology companies such as Syngenta AG, BASF and Dow AgroSciences, a unit of Dow Chemical Co, are pouring resources into wheat development. Some companies are focusing on transgenic alterations using DNA from other species and some are manipulating genes already found in wheat.

Currently there is no biotech wheat grown on a commercial-scale anywhere in the world due to opposition from consumers and food industry players.

Most notably, Japan, one of the world's largest importers of wheat and a leading critic of past efforts to introduce genetically altered wheat, remains a steadfast opponent. Many European countries also continue to resist genetically modified crops.

Japan, which imports around 5.5 million tons of wheat each year, including about 3 million tons from the United States, is starting to acknowledge that there might be a valid argument for biotech wheat. But much work remains to be done before full acceptance, Tracy said.

U.S. Wheat is still laboring to get Japan and other countries to establish regulatory systems and tolerance levels that would allow for continued imports if biotech wheat is commercialized, he said.

Some U.S. farm groups also remain cautious of biotech wheat. They say conventional breeding can bring many of the same benefits without negative market consequences.

These critics also say biotech wheat work is aimed more at improving profits at corporations such as Monsanto than at helping farmers.

Quite a few consumer and environmental groups have concerns over introducing genes from other species into wheat could make it harmful for humans, and say it would be difficult to keep biotech wheat segregated from conventional wheat seed and products.

Monsanto, a global leader in biotech corn and soybeans, backed away from commercializing a herbicide-tolerant wheat five years ago as foreign buyers threatened boycotts.

Opponents say a biotech wheat introduction could still deal a significant blow to U.S. markets, recalling how U.S. corn lost European buyers when genetically modified corn was brought to the market.

But biotech wheat supporters say the global wheat crop needs a technological boost. They note that over the last few years, farmers have reduced wheat acreage in favor of more-profitable, easier-to-grow crops such as corn and soybeans.

They also point to fears mount about global food shortages and a rapid rise in world population. Just last year, shortages drove wheat prices to record highs, and prices remain historically high this year despite ample supplies.

Those factors have prompted corporations and researchers in the United States and Australia to increase development efforts in wheat.

Some farmer groups support commercialization of biotech varieties, saying they will have several years to address buyer fears before any biotech wheat is commercialized.

Either way, biotech modified wheat should go commercial in about 5 years if not sooner, as global conditions will force it upon us.

Biotech Modified Wheat

Wednesday, July 15, 2009

Monsanto Looking to wheat

Monsanto Looking to wheat to drive share prices up

Looking for more ways to increase their share price, Monsanto is looking to wheat as a significant means of doing that, and recent aquisition of WestBred LLC is the first significant step in that direction, although it could take a decade before the investment pays off.

Knowing it needs a way to expand market share in wheat, Monsanto a Monsanto analyst, citing expectations that the company's $45 million acquisition of WestBred LLC won't add to earnings until 2016, and will add less than a dime a share by 2025.

Privately held WestBred, with offices in Montana, specializes in wheat germplasm, the genetic material of a seed.

Monsanto said about the investment that it will strengthen the future growth of Monsanto's seeds and traits platform; and allow farmers to benefit from the company's experience in drought-, disease- and pest-tolerance innovations.

This action by Monsanto, the world's biggest provider of seeds, signifies the company's re-entry to the wheat market, but will only increase earnings several years down the road at best.

Assuming Monsanto has a 20 percent share of the certified seed market by 2025, estimates are wheat could only add between 7 cents and 9 cents a share to earnings a share by 2025.

"Clearly, Monsanto needs to find ways to drive significant market share gains, wheat platform should not be accretive to earnings until 2016 or later."

Managing expectations, Monsanto is calling the acquisition a long-term investment that won't add to earnings until the middle or latter part of the next decade.

Monsanto Looking to wheat to drive share prices up

Wednesday, July 8, 2009

Slow Start to Kansas Corn

Kansas Corn Crop

The Kansas corn crop has been doing pretty good so far this year even though there was an very late planting, but its late start has made the crop especially vulnerable to damage.

If everything goes right, Kansas farmers plant their corn by the first week in April. But rain kept farmers out of fields at the usual planting time, so a lot of of the state's corn was planted in late May and early June.

What that means is the crop will be pollinating during the hot, dry Kansas summer months. Another potential problem is an early freeze before the corn is ready for harvest could be devastating.

This week's crop condition report showed 68 percent of the corn in good to excellent condition, with 25 percent rated as fair. Only 7 percent of the crop got a poor to very poor rating.

Kansas farmers put 3.8 million acres into corn this season, compared to 3.85 million acres a year earlier.

Acroos the nation, the corn acreage of 87 million acres was up 1 percent from 2008. It was the second largest planted corn acreage since 1946, behind 2007, which set the record.

But some analysts remain nervous at the crop's late planting dates in major growing regions.

When the Agriculture Department came out with its acreage report last week the numbers of corn acres were higher than expected, said Mike Woolverton, grain marketing economist at Kansas State University. The market had anticipated a reduction in acreage from a year ago.

"The acres are there," he said. "But - and here's the kicker - and that is that the corn was planted late. Very late, some of it, and it may not develop to full maturity before frost. So we may end up with a short corn crop this year."

Kansas Corn Crop

India's Wheat Exports Limited by High Domestic Prices

India wheat exports down in fiscal year

In the midst of high local prices, projections are it will limit India's wheat and wheat product exports in the fiscal year ending March 2010, although the country has eased an earlier ban on exports this month to allow limited shipments.

On July 3, the federal government allowed three state-run firms - MMTC, STC and PEC - to export 300,000 tons each of wheat by March 31, 2010. In addition, private companies were allowed to export another 650,000 tons in wheat products, also by the same date.

But that is unlikely to lead to a surge exports.

"International prices are around $195 to $198/ton and Indian wheat costs around $232/ton," said Veena Sharma, secretary of Roller Flour Millers Federation (RFMF) of India.

She said exports are feasible only if international prices rise in the coming months.

"Unless there is a government subsidy of $30-$40/ton, (wheat exports are) not feasible," said Ajay Goyal, president of Maharashtra Roller Flour Millers Association (MRFMA).

However, the formal government order allowing the exports made it clear that "no subsidy will be given" to exporters.

India's federal government had imposed a ban on exports of wheat and wheat products in December 2007 to help curb inflation.

Since then, domestic wheat stocks have reached comfortable levels following two bumper crops and on carryover stocks from previous imports.

Even if some exports take place now, those could mainly be to neighboring countries, traders said.

"We may have to look to export to countries like Bangladesh, Nepal, Bhutan and Maldives to save on freight costs," said a state-run trading firm official, who did not want to be identified.

However, industry officials ruled out the possibility of wheat exports to Pakistan because there is no supply shortage there.

Meanwhile, state procurement of wheat has been on the rise following higher support prices.

Farmers sold more wheat to government agencies, rather than to private companies, as the state-fixed price of 10,800 rupees ($223)/ton was attractive, and relatively higher than even global prices, traders said.

Latest government data showed local wheat purchases by government agencies have already touched a record 25.06 million tons since purchases started in April, and more was trickling into state granaries.

In its annual budget announcement Monday, the government said it would step up subsidized sale of grains to poor consumers in the coming months.

With the chance of wheat exports looking slim, industry officials were more hopeful about exports of wheat products such as flour and semolina.

"Although there is not so much of demand for wheat products in the global market now, there could be some demand coming from the Middle East," said A N Gupta, chairman of Wheat Products Promotion Society of India.

He said demand for value-added wheat products from India is likely to be much more than the demand for the grain itself in global markets.

India wheat exports down in fiscal year