Maize prices are stable; Cost of production of chicken

Maize prices stable

Maize prices are stable in India for the moment. For the last 4 weeks the prices are hovering around Rs.7000 per MT mark at the market yard, which is much lower than the April 2007 average of Rs.7300 per MT at the market yard. The prices are lower due to higher arrivals and small number of buyers. Most of the end users are covered for at least the next two months, unless a demand comes in the prices are not likely to go up. The prices are about 22% higher than last year prices. Even at such high price of basic raw material for poultry feed, there are no complaints as the end users in all parts of the country have rediscovered the prices and are selling end products at a good profit.

Pearl Millet (Bajra) prices are up by about 2% over last week to Rs.6750 – 6800 per MT at the market yard. The prices are about 9% higher than last year. The Pearl Millet prices are 4 – 5% lower than maize prices.

Sorghum (Jowar) prices are also up about 3.6% over last week to Rs.8950-9000 per MT and are just about 4% higher than last year prices. Against maize, the prices are 27% higher.

Barley prices have come down by 1% over last week to Rs.6800 per MT and are about 24% lower than last year.

Corn prices at CBOT moved up slightly ending at $148 per Mt for July delivery, $148 for Sept and Dec Delivery. The Indicative FOB prices (Us Gulf) were $164 for June, $165 for July and $167 for August.

The last USDA report for planting progress estimated that the 18 states have planted 93% of corn acerage as on May 20, 2007 and that 67% of the corn has emerged this year as against 56% average of 2002-2006.

Cost of production of chicken and Broiler Placements

At the current prices of maize and soybean meal the current cost of production of chicken is ranging between $ 0.73 – 0.80 per kg live at different location and the sale prices is at $ 0.90 – 1.10 per kg live.

Currently India is in a middle of AI area, with Bangladesh, Mynamar, Pakistan reporting an outbreak, the authorities are vigilant across the border areas.

Based on the current estimates taken from various players, Indian poultry sector is placing about 35 million chicks per week on an average, thus placing about 1820 million broilers in the year 2007/08. Based on these numbers the sector will use approximately 3.6 MMT of maize.

Amit Sachdev

Representative

U S Grains Council

bluecross303@gmail.com

Maize price remain stable; New products from Corn

Maize prices remain stable

Maize prices were up slightly (1%) over last week, reaching Rs.7000 – 7200 per MT range at the market yard. The pieces are higher than last year by about 25%. GOI has estimated a higher Rabi crop this season to 2.8 MMT, higher than the last estimate of 2.3 MMT. The increased availability and a slower demand due to summer months my not allow the prices to go up significantly in the coming weeks.The demand for maize for the year 2006/07 is estimates at 14.15 MMT and is expected to go up to 14.54 MMT for the year 2007/08.

Pearl Millet (Bajra) prices went down further 4$ over last week, reaching Rs.6000 – 6200 per Mt range at the maret range. The prices are now abot 6% lower than maize, making it a good substitute to Maize. Layer farmers can use the coomodity at 5 – 7% rate in the rations. But pieces of Pearl Millet are still higher than last year by 3%.

Sorghum (Jowar) prices stumbled 3% over last week to Rs.8600 – 8700 per MT, but the prices remain higher than last year by 14% and also against maize by 23%.

Barley prices were also down by 2.4% over last week to Rs.6850 – 6900 per MT range in the markets. The prices are lower than last year by 5.3%.

Prices at CBOT have remained stable and similar to last week levels between $144 - 146 per MT. FOB values (US Gulf) were also similar to last week ranging from $158 - $162 for deliveries in July - Sept.

New products from corn

What can be made out of corn? Starch and other value added products, Ethanol to run cars and Poly Lactic Acid (PLA), to replace plastics.

Computer companies in Japan are all out to woo the consumers with green computers. The new products lines launched by some of the companies, Fujitsu, Sharp and Sakata, us PLA the corn-based polymer to make the computer casings. The products price is nor high as compared to normal casing products as per U S Grains Council, Japan Office. Comapanies like Fujitsu and Sharp have have policies that requie them to use Plant Based raw materials. The new technology also allows PLA to be blended with convential plastic to be used in home appliances. Companies like Sakata have also manufactured corn based ink, which along with the corn based package/film is bio-degradable.

A new product in the market under the brand “Earth First” PLA film manufactured by Plastic Suppliers Inc. using Nature Works polymer, can withstand a temp of 79 deg C, highest for any film in this category as per the company newsletter.

Taiwan has been using the PLA packs for packing eggs, sandwitches and other food products for some time now and it is time that the developing world should be able to use such products, which will benefit the environment in these countries. There are enough people in these countries who can afford to pay a price for such products.

Amit Sachdev

Representative

U S Grains Council, India

bluecross303@gmail.com

Coarse Grain Price Tumble across India; Corn Production in US will be higher

Coarse Grain Prices in India Tumble

Prices of coarse grains (Maize, Pearl Millet, Sorghum) took a hit this week and tumbled across all markets, giving some relief to the end users, specially of maize. The feed sector including poultry & livestock) and the starch sector are major users of maize, consuming about 10.45 MMT. In 2007/08 the sectors are expected to consume 10.88 MMT by a conservative estimate and this might go up as the expansions in poultry and starch sectors some online by the middle or end of this year.

Maize prices in the market yard reach Rs.6900 - 7000 per MT range, about 1% lower than last week, but 20% higher than last year, during the same time. In the markets across the country higher arrivals and lack of demand as most of the end users are covered for the next few weeks has likely to have depressed the prices.

Pearl Millet (Bajra) prices have come down to Rs.6800 - 6900 per MT range at the market yard, lower by 6% over last week, but 4.6% higher than last year. The prices are similar to corn this time though.

Sorghum (Jowar) prices are at Rs.8900 - 9000 per MT at the market yard and are lower by 3% over last week. The prices are higher than last year by 9.5% and also 30% higher than maize.

Barley prices also moved lower by 2% over last week at Rs.7000 - 7100 per MT range. The prices this time are also 4% lower than last year.

Maize prices at CBOT were also down, due to report of good planting progress. Current USDA reports indicate a 53% planting complete, which is lower than 67% achieved last year. The planting is expected to pick up as the corn producing areas encounter drier weather in coming days. Prices at CBOT were down by $5 - 9 depending on the delivery months, i.e., for July it was $145.3 per MT against $153.83 last week and $146.84 for Sept as against $153.34 last week. FOB prices came down accordingly to $154 - 160 per MT for May - Aug 2007 deliveries adding about $2 per month as carrying charge.

Ocean Freight situation is very precarious and the costs are going up. Unless some balance is achieved and demand eases, freight costs my not come down. Freight from US gulf to South China is quoted at $72 per MT for a 55,000 tons cargo ship.

Corn production in US expected to go up

The latest report from USDA out May 11, 2007 expects a production of 316.48 MMT of corn for the year 2007/08 in US, up 15% over last year's (2006/07) 267.59 MMT. The average production is expected to be 3.82 tons/acre (9.43 tons/hac).

The usage in feed is expected to be a tad lower at 144.78 MMT over last year's 148.59 MMT as more DDG's are expected to be fed to the animals. Use of corn in Food/industrial usage is expected to increase to 121.67 MMT for the year 2007/08 against 89.79 MMT for the year 2006/07 mainly due to the expected increase in use of corn for ethanol production, which will be 86.36 MMT. The carry over stocks are expected to be 24.05 MMT for the year 2007/08.

Corn production in the world is expected to be 766.50 MMT while the usage is expected to be 769.45 MMT, reducing the overall carry over stocks to 90.25 MMT in 2007/08 as against 93.20 MMT.

Argentina is expected to produce 24 MMT of corn, of which 16 MMT is expected as exportable surplus, while Brazil is expected to produce 50 MMT, with an export surplus of 6.5 MMT. China is expected to produce 146 MMT and may have 3 MMT as exportable surplus. The usage of corn in China is expected to be 148 MMT and the carry over stocks are likley to be down to 25.96 MMT in 2007/08 as against 30.86 in 2006/07.

Amit Sachdev

Representative

U S Grains Council

bluecross303@gmail.com

Maize Prices in India down; Storage of Corn

Maize prices In India are down

Maize prices in India are down to Rs.7000 per Mt at the market yard, on higher arrivals is key markets of Andhra Pradesh, Tamil Nadu and Bihar. The prices at the market yard are down by almost 3.5% over last week. The prices are about 23% higher that last year prices, when they are at Rs.5700 – 5800 per MT range at the market yard. The demand of maize in the summer months takes a hit, which stabilizes the prices. Analysts believe that this is short term and the prices will go up in the next couple of days as the arrivals slow down. The next new crop will be in the market in Oct 2007.

Pearl Millet (Bajra) prices have gone up by almost 4% over last week to Rs.7200 – 7200 per MT range and the prices are higher than last year by 8.5%. Against maize the prices have gone up and are higher by 4.1%.

Sorghum (Jowar) prices have gone up again this week by 6.5% over last week, reaching Rs.9200 – 9300 per MT at the market yard. The prices are higher than last year by over 14%. Against maize the prices are higher by over 32%, thus making it just impossible to use in feeding poultry.

Barley prices have been stable for some time now at Rs.7100 – 7150 per MT range and the prices are lower than last year by 3%.

The price of corn on CBOT shot up this week. This increase is attributed to the planting delays in US, due to wet weather in the corn belt. Prices at CBOT closed about 4 – 6% over last week. May $150.09; July $153.83; Sept $153.34; and Dec $153.74. The FOB values, US Gulf were also up by 3-4% for deliveries in June, July, Aug to $166.45, $166.80 and $169.10 per MT respectively. The delivery for May shot up by 7% over last week to $168.40 per MT.

Ocean freight is running historically higher, fuelled by the Asian demand, especially by China and India. Reports indicate that the increase is over 100% from April 2006.

As the demand of corn increases world wide, Brazil this winter is likely to increase in its share in the pie, by producing more corn than anticipated earlier. First estimates made available by the U S Grains Council Representative in Brazil, Alfredo Navarro de Andrade, indicate that the production is estimated at 49.5 – 50.5 MMT, which is about 3 MMT higher than the earlier expectations.

Storage of corn a major issue

In India, maize is traded, packed, transported and stored in jute bags. While it is a good system, if commodity is not dry or the place is not properly ventilated, there are chances that the commodity (maize) will spoil much faster. In all cases it is important to follow FIFO (First in First out) system, which is a management tool.

More recently there has been interest to move from bagged storage to bulk storage. Some end users are practising it others and other are contemplating to move in that direction.

The US Grains Council has a technical publication on Storage in Tropical Countries, which can be downloaded from the US Grains Council site. Please follow the link given below to open the file.

http://www.grains.org/galleries/technical_publications/CORNE.PDF

Amit Sachdev

Representative

U S Grains Council, India

bluecross303@gmail.com