Maize Sorghum prices up, Bajra tumbles
Maize prices moved up over last week by 6.5% to average at Rs.8585 per MT at the market yard. One of the reasons is the lower delivery this week due to the festival week (Diwali, the festival of lights was celebrated this week all over the country).. The price of maize was about 22.8% higher than last year at the end of the October. Average price for October 2008 was averaged at Rs.8228 per MT, higher by 25.6% over last year’s October average. The price though is about 3.25% lower than Sept 2008 average. The delivered prices were noted at Rs.10,500 per MT at some locations.
In the futures market, maize was up by about Rs.200 per MT over last week to Rs.8600 levels for Nov 2008 delivery, Also it added Rs.100 to reach Rs.8360 per MT for Dec delivery and remained similar at the last weeks level for Jan/Feb deliveries. In the spot markets, Maize was up by about Rs.100 per MT in Nizamabad over last week to Rs.9100 and lsot Rs.100 per Mt to level at Rs.9460 per Mt at Davangere. In Karimnagar the value was stable at Rs.9040 per MT.
Industry estimates and working done based in discussions with end user associations, seed companies suggest that by 2020 the requirement of the end users (Poultry, starch, livestock feed, food and brewery etc) will be about 30.73 MMT. This is without taking into consideration any exports. The growth in demand is expected to increase by 5-6%, while the production may increase by 4-5%. In 2007/08 the supply increased by 27.88% over 2006/07, which was abnormal. It may be touch and go every year as the demand is likely to pick up much faster.
Pearl Millet (Bajra) prices were down this week by 3.7% to average at 7670 per MT at the market yard. The price is about 20% higher than last year value. The prices are lower than maize by 12%. The average price for October 2008 was Rs.7502 per M, about 17.5% higher than Octber 2007 avearge.
Sorghum (Jowar) prices were up this week by 8.7% against last week, to average at Rs.10102 per MT, about 5.6% higher than last year. The price was also higher than maize by 15%. The October 2008 average was Rs.9559 per MT, about 3.7% higher than October 2007 average.
Barley prices have remained stable and delivered prices to the malt companies in Haryana are seen at Rs.11,500 MT. Nov/Dec delivery was reported at Rs10,900 per MT and in the SPOT market at Jaipur the price was quoted at Rs.10,800 per MT.
In the US, corn on CBOT was up for Dec 2008 and Mar 2009 deliveries by 7.8% over last week’s close to reach $158.02 and $165.03 per MT levels. With freight rates at the lowest, US corn would be a cheapest buy in South East Asia and Middle East markets.
USDA revises production estimates
United States Department of Agriculture on Oct 28, 2008 released a corrected U.S. Crop Production report. USDA is now projecting the 2008/2009 corn harvest at 305.5 MMT. Feed and residual use is projected at 134.6 MMT about 8.7% lower than the Oct 10 forecast. Corn exports are forecast at 49 MMT in the new report. USDA has revised the report for the first time and the area under corn (sown and harvested) has been brought down by 1 million acres and the national average yield has also been trimmed by 3.90 tons/acre.
While the forecast for export of corn has been reduced, there is likely hood that more and more countries import more of DDGS to fulfill the needs of energy and protein in the rations. Already China and Taiwan have started scouting for better deals for DDGS. Other countries who will increase DDGS usage are Vietnam and Indonesia.
Ethanol Production and usage in USA
The Renewable Fuels Standard (RFS) mandates use of 56.7 billion liters of ethanol by 2015. The mandate also states that all of gasoline produced in US will be blended with 10% ethanol by 2015.
In 2008, U.S. is estimated to use 521 billion liters of gasoline (down from 536 billion liters in 2007) and approximately 34 billion liters of U.S.-produced ethanol plus another 3 billion liters of imported ethanol. Since February 2008, the price of ethanol has been less than the price of gasoline. U.S. Environmental Protection Agency (EPA) regulations allow blended fuel to contain up to 10% ethanol. California regulations allow up to 5.7% blends.
Maize prices moved up over last week by 6.5% to average at Rs.8585 per MT at the market yard. One of the reasons is the lower delivery this week due to the festival week (Diwali, the festival of lights was celebrated this week all over the country).. The price of maize was about 22.8% higher than last year at the end of the October. Average price for October 2008 was averaged at Rs.8228 per MT, higher by 25.6% over last year’s October average. The price though is about 3.25% lower than Sept 2008 average. The delivered prices were noted at Rs.10,500 per MT at some locations.
In the futures market, maize was up by about Rs.200 per MT over last week to Rs.8600 levels for Nov 2008 delivery, Also it added Rs.100 to reach Rs.8360 per MT for Dec delivery and remained similar at the last weeks level for Jan/Feb deliveries. In the spot markets, Maize was up by about Rs.100 per MT in Nizamabad over last week to Rs.9100 and lsot Rs.100 per Mt to level at Rs.9460 per Mt at Davangere. In Karimnagar the value was stable at Rs.9040 per MT.
Industry estimates and working done based in discussions with end user associations, seed companies suggest that by 2020 the requirement of the end users (Poultry, starch, livestock feed, food and brewery etc) will be about 30.73 MMT. This is without taking into consideration any exports. The growth in demand is expected to increase by 5-6%, while the production may increase by 4-5%. In 2007/08 the supply increased by 27.88% over 2006/07, which was abnormal. It may be touch and go every year as the demand is likely to pick up much faster.
Pearl Millet (Bajra) prices were down this week by 3.7% to average at 7670 per MT at the market yard. The price is about 20% higher than last year value. The prices are lower than maize by 12%. The average price for October 2008 was Rs.7502 per M, about 17.5% higher than Octber 2007 avearge.
Sorghum (Jowar) prices were up this week by 8.7% against last week, to average at Rs.10102 per MT, about 5.6% higher than last year. The price was also higher than maize by 15%. The October 2008 average was Rs.9559 per MT, about 3.7% higher than October 2007 average.
Barley prices have remained stable and delivered prices to the malt companies in Haryana are seen at Rs.11,500 MT. Nov/Dec delivery was reported at Rs10,900 per MT and in the SPOT market at Jaipur the price was quoted at Rs.10,800 per MT.
In the US, corn on CBOT was up for Dec 2008 and Mar 2009 deliveries by 7.8% over last week’s close to reach $158.02 and $165.03 per MT levels. With freight rates at the lowest, US corn would be a cheapest buy in South East Asia and Middle East markets.
USDA revises production estimates
United States Department of Agriculture on Oct 28, 2008 released a corrected U.S. Crop Production report. USDA is now projecting the 2008/2009 corn harvest at 305.5 MMT. Feed and residual use is projected at 134.6 MMT about 8.7% lower than the Oct 10 forecast. Corn exports are forecast at 49 MMT in the new report. USDA has revised the report for the first time and the area under corn (sown and harvested) has been brought down by 1 million acres and the national average yield has also been trimmed by 3.90 tons/acre.
While the forecast for export of corn has been reduced, there is likely hood that more and more countries import more of DDGS to fulfill the needs of energy and protein in the rations. Already China and Taiwan have started scouting for better deals for DDGS. Other countries who will increase DDGS usage are Vietnam and Indonesia.
Ethanol Production and usage in USA
The Renewable Fuels Standard (RFS) mandates use of 56.7 billion liters of ethanol by 2015. The mandate also states that all of gasoline produced in US will be blended with 10% ethanol by 2015.
In 2008, U.S. is estimated to use 521 billion liters of gasoline (down from 536 billion liters in 2007) and approximately 34 billion liters of U.S.-produced ethanol plus another 3 billion liters of imported ethanol. Since February 2008, the price of ethanol has been less than the price of gasoline. U.S. Environmental Protection Agency (EPA) regulations allow blended fuel to contain up to 10% ethanol. California regulations allow up to 5.7% blends.
Amit Sachdev
India Representative
U S Grains Council
bluecross303@gmail.com
1 comment:
Hello,nice post thanks for sharing?. I just joined and I am going to catch up by reading for a while. I hope I can join in soon.
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