Commodity prices remain stable
The commodity prices remained stable this week, with maize prices slightly lower than last week. Maize prices were down to Rs.7200 – 7300 per MT, lower by 2% over last week. The prices were still higher than last year by 23.8%. There are reports of some arrivals in Bihar, Karnataka and Andhra Pradesh. Prices decreased in the markets in Jharkhand, Karnataka, Maharashtra, Rajasthan and Tamil nadu and increased in Gujarat and Uttar Pradesh.
Pearl Millet (Bajra) prices came down about 3.7% over last week and settled at Rs.6900 7000 per MT range. The prices were higher than last year by 9.3%. As against maize the prices were lower by 3.3%, and there are signs of increased usage of the commodity in North India, specially in the layer rations in Punjab & Haryana. The prices dipped in Andhra Pradesh and Maharashtra, but due to high demand increased in Haryana & Punjab.
Grain Sorghum (Jowar) prices increased by 4.6% over last week at Rs.8450 – 8500 per MT range. The prices were higher than last year by 10.7% and against maize the prices were higher than 18%. The prices increased in Andhra Pradesh, Gujarat and Tamil nadu.
Barley prices increased by almost 17% over last week to Rs.8200 – 8300 per MT range. Reports of a bad crop due to untimely rains may have fuelled the market.
This week saw freak weather in parts of North India and reports of wheat crop being affected due to this weather situation. With GOI intending to buy 13 – 15 MMT of wheat from the farmers at a price of Rs.8500 per ton, including a bonus of Rs.1000 per MT and market prices prevailing higher, it is highly unlikely that the farmers will sell wheat at the prices lower than the market prices. Reports also indicate that GOI will now shy from importing 3 – 4 MMT of wheat in 2007/08 to cover the deficit. There is still speculation on what the final production of wheat will be, but a higher wheat price will surely mean higher maize prices.
The prices in US were down due to anticipated higher crop in 2007/08. May futures closed at $157.23 per MT as against $165.73 per MT of last week, while July futures $161.44 from $169.12 per MT. Sept futures closed ar $158.88 per MT while dec futures closed at $158.65 per MT.
Indian end users team in US
An 8 member team from India consisting of the Poultry and Starch end users was in USA this week (Mar 12 – 17, 2007) at the International Grains Program to understand the US Production and distribution system & trading on commodities. The team also met with the traders to get an insight into the grain trading business, prices of US corn in coming years and the ocean freight etc for Indian ports.
The team also traveled to sites to see how corn is handled, stored and makes its way to the designated markets (domestic or export). The team visited the Federal Grain Inspection Services Laboratory at Kansas City to understand the inspection process for the commodities exported. The team also visited Kansas City Board of Trade to see the futures market and understand its working.
Higher Corn crop estimated in US
A private US analyst company, Informa Economics has estimated a highest ever corn acreages this week. The company estimates the corn acreage to be 87.8 million acres in 2007/08 as against 78.327 million acres in 2006/07 as per USDA estimate. This is an increase of 9.47 million acres. The company also believes that the Soya acres will be down from 75.552 millin acres in 2006/07 as per USDA estimate to 70.384 million acres, a loss of 5.184 million acres. All increase in corn acreages would be at the cost of soybean, cotton and other crops.
The company has estimated that if the average yield on corn is about 3.78 tons/acres the production is estimated at 332.75 million tons for the year 2007/08. USDA will come out with its estimates only on Mar 30, 2007 and the market is awaiting the report eagerly.
Amit Sachdev
Representative
U S Grains Council, India
bluecross303@gmail.com
Mar 17, 2007
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