Monsoon gather speed, commodity prices stable

Monsoon gather speed, commodity prices stable

Maize prices moved lower by 3.6% at the market yard on an average to Rs.8778 per MT. Prices remained higher than last year by 1.9%. Prices in Andhra and Karnataka markets were lower by 2.3% and 1.44% to Rs.8300 and Rs.8400 respectively. Prices in Gujarat, Maharashtra, Rajasthan and Tamil Nadu moved up by 9%, 1.7%, 1.2%, and 3.3% to Rs.8950, Rs.9200, 10,000 and Rs.8800 respectively.

In the futures market prices moved lower for Aug, Sept and October contracts to Rs.9360, Rs.9310 and Rs.8720 per MT. This is mostly on increased monsoon activity in some areas and lower demand from the export side. It was only in Davangere that the prices moved up, while in Nizamabad and Karimnagar prices remained stable at Rs.9245 and Rs.8924 per MT respectively.

Pearl Millet (Bajra) prices moved up by 3.4% to Rs.9234 per MT, higher than last year by about 14.5%. Against maize the prices were higher by 4.7%.

Sorghum ( Jowar) prices moved lower by 6.3% to Rs.11800 per MT on pan India average. Prices were higher than last year by 8.7% and also higher than maize by 25.6%.

Barley prices were lower than last week by 1.3% to Rs.7610 per MT, lower than last year by 44.5%. In the futures market as weel prices moved lower by 3-5%, Sept contract was Rs.8822 per MT, down 3.6%, while Oct contract was down by 4.2% to Rs.8974 per MT. In the spot market (Jaipur), prices were Rs.8269, 3.2% lower than last week. US barley prices were being quoted at $200 per MT.

The rainfall deficit is now down to 19% and if good rains continue, even though the Khariff production will be affected due to the delay, the soil moisture for Rabi crop will be better.

Prices on CBOT this week were similar to last week at $126.96 per MT for Sept; $130.50 per MT for Dec; and $135.91 per MT for Mar 2010 delivery. FOB values were down slighlty US Gulf at $155/157 per MT, whil PNW at $167/171 per MT for the next 3 month period. Sorghum (FOB US Gulf) was indicated at $148/150 per MT.

DDGS prices have moved lower on lower corn prices, higher availability of DDGS. While FOB US Gulf and PNW are indicated at $133 and 144 per MT respectivelt, DDGS delivered to SEA region is indicated at $190/194 per MT. Another protein source, Corn Gluten Meal (60% protein) is indicated at $590 per MT (FOB), about %60 cheaper than last week.

The freight rates for bulk grains have moved up slightly, US-gulf to Japan is indicaed at $64 per MT, while PNW-Japan is indicated at $33 per MT. Freighr rates Argentina/Brazil to China has also moved up to $48/49 per MT.

Amit Sachdev
India Representative
U S Grains Council
usgcindia@gmail.com

Commodity prices move up, monsoon is still deficient

Commodity prices move up, monsoon is still deficient

Maize prices moved up at the market yard by almost 4.2% this week to reach Rs.9100 per MT. The prices are about 6.9% higher than last year. Uneven distribution on monsoon rains, near drought like conditions in North India are reasons enough to set the tone for high prices. The buyers may be covered for some the months ahead, increasing prices are indication enough that the supplies will be tight in near future as the marketing season comes to an end.

In the futures market as well and the spot markets, maize prices moved up as the supplies dry and the monsoon plays truant. It was only for July delivery that the prices were lower by about 0.4% against last week to Rs.9230 per MT, but were higher for Aug +073% to Rs.9620 per MT; Sept +1.05% to Rs.9500 per MT; Oct +2.19% to Rs.8850 per MT. In the Spot market to except Davanagere, prices moved up. Davangere -1.15% to Rs.8470 per MT; Nizamabad +2.4% to Rs.9243 per MT; Karimnagar +2.73% to Rs.8977 per MT.

Pearl Millet (Bajra) prices also moved higher at the market yard by 1.9% to Rs.8900 per MT, just about 2.2% lower than maize prices. Pearl Millet prices are higher than last year by 18.6%. Reports indicate that farmers in Rajasthan and parts of Haryana who would have grown corn have planted Pearl Millet. And if the monsoon is subdued, as it is for the period Jun 1- Jul 15, 2009, farmers may need to feed the bajra as fodder to livestock. Pearl Millet is a staple food for many people in Rajasthan and Haryana, who grow the bold variety of the commodity.

Sorghum (Jowar) prices also moved up by 6.1% to reach 12595 per MT at the market yard. Prices are about 14.1% higher than last year and 27.7% higher than maize. Sorghum is a coarse grain and a staple in Maharashtra, Parts of Karnataka.

Barley prices moved lower by about 12.6% to reach Rs.7700 per MT the market yard. This is a correction and the prices are same as first week of July 2009. Prices are lower than last year by 43.3%.

In the future market as well as spot market of Jaipur though, prices moved up. Jul +0.87% to Rs.8740 per MT; Sept +1.77% to Rs.9150 per MT; Oct +3.60% to Rs.9376 per MT; Jaipur spot +1.94 to Rs.8544 per MT.

On CBOT, corn prices moved down slightly for Sept and dec contracts by about 2-2.5% to $126 - $130 per MT. FOB US GULF remained same as last week at $159 per MT for the period July/Oct. FOB PNW was also stable at $168/170 per MT. Sorghum prices on the other hand moved up slightly to $512 per MT FOB PNW.

There is steady demand of DDGS in the Asian markets as the prices move lower. Domestic poultry sector continues to be a buyer of DDGS and replaces high prices Soybean meal. FOB prices US gulf are indicated at $138 per MT, while delivered values are indicated at $192 per MT for Malaysia and $198 per MT for Thailand.

Freight rates for panamax (US Gulf – Japan) moved up by $5 per MT this week to reach $60 per MT, while Freight rates for PNW-Japan remained same at $31 per MT. Freight rates for China from Argentina and Brazil moved up slightly to $44/45 per MT.

Amit Sachdev
India Representative
U S Grains Council
usgcindia@gmail.com

World corn prices move down, Indian prices are higher; Checkoff fund program can help poultry sector grow in India

World corn prices move down, Indian prices are higher

Indications are monsoon in the North is delayed, if not failed completely and this will certainly affect sowing of khariff crops in the region. Crops like Paddy, Corn, Barley and oilseeds are likely to be effected. The met department predicts that the revival of the monsoon will be there in about 3 days. News reports indicate sowing of maize in North India would be down by 25%. Only 50% of the area has been covered under coarse cereals as yet and a complete cover is almost impossible now.

Maize prices moved higher in the market yard this week by about 0.6%, average at Rs.8740 per MT for loose material. Delivery prices in Gujarat were close to Rs.10000 – 10,300 per MT. The prices are higher than last year by 6.5%.

On the futures market, maize prices moved up by over 2% for all the contracts, July Rs.9360 per MT; Aug Rs.9550 per MT; Aug Rs.9400 per MT. Oct delivery was similar to last wee. In the spot market of Nizamabad, prices were higher slightly by 0.87% to Rs.9026 per MT, while in Karimnagar, prices were lower by 1.5% at Rs.8738 per MT.

Pearl millet (bajra) prices remained stable at Rs.8740 range, but were higher than last year by 16.4%. Prices are same at maize at the market yard. With soil moisture being low, farmers in some areas of Haryana may look at bajra as an option where normally oilseeds would be grown.
Sorghum (Jowar) prices moved up by 1.3% in the market yard to Rs.11,870 per MT. Prices are 9.3% higher than last year and also 26.4% higher than maize at the market yard.

Barley prices have shown a rise of about 14.5% to s.8820 per MT, which could be rally and may subside in the next week. But there sure is demand from the dairy sector for grains.

In the spot market though, prices were down this week by about 1-1.2% and at Jaipur market too prices moved lower to Rs.8381 per MT.

Corn prices on CBOT for the three most close contracts slipped lower by 0.63% for July to $135.18 per MT, 4.69% for Sept to $129.67 per MT; and 4.86% for Dec $133.85 per MT. This has also lowered the FOB values. US Gulf is indicated at $159 per MT, while PNW at $168/172 per MT. With Freight also going lower by at least $5 to $55 per MT for US Gulf to Japan, delivered corn pries will be much lower. PNW-Japan freight rates is also down but only by a dollar to $31 per MT. Argentina/Brazil – China freight is down by at least $10 per MT as per reports to $41/42 per MT. One reason being attributed to lower freight rates is China being out if the iron ore market at least for the time being and also crude being lower and reaching close to $50 per barrel.

With corn prices being lower, the prices for DDGS have come down drastically. FOB (US Gulf) is indicated at $144 per MT, $10 lower than last week. Delivered value for SEA is indicated at under $200 per MT. Delivered India would be a little higher at maybe $225 (Rs.+11000 per MT). Corn Glutten Meal prices have also corrected to $660 per MT (FOB US Gulf), down from $720 per MT.

The latest WASDE report was released by USDA yesterday and several changes have been made in the Marketing year 2008/09 balance sheet and well and 2010.

Domestic usage in US is lowered to 133.3 MMT, Domestic food and industrial usage lowered to 124.96 MMT, Ending stocks raised to 43.18 MMT. For Marketing Year 2010, USDA raised U.S. production to 312.16 MMT. Domestic feed usage at132.08 MMT (lower than 2008/09), domestic food and industrial usage at 136.52 MMT (increase from 2008/09). Corn usage for ethanol kept at 104.14 MMT. Ending stocks at 39.37 MMT

The higher ending stocks in the US are weighing on the market and pulling the market lower, as per the analysts.

World corn production is pegged at 789.8 MMT, up more than 8 MMT from a month ago and 1.2 MMT higher than the previous year. World ending stocks also jumped significantly this month to 139.2 MMT, up nearly 14 MMT from a month ago but still down 4.7 MMT or 3% from the previous year.

Checkoff fund program can help poultry sector grow in India

Colombian poultry industry has grown exponentially since 1994 and the per capita chicken consumption has grown from 10 kg in 1994 to 22.7 kg in 2008, thanks to the consumer promotion program initiated by the association as a result of the checkoff fund, which generates approximately $5 million annually. The Poultry association in Morocco (FISA) is likely to follow the lead and establish a checkoff fund, which will be used to promote consumption of poultry products and change consumer perceptions.

India also has a checkoff fund of sort in National Egg Co-ordination Committee (NECC), which promotes egg consumption and assists the farmers in getting a fair price for eggs. A similar checkoff fund can be created for Broiler meat and if GOI can provide matching funds, the demand of poultry meat, eggs and other products can soar. At a cost of Rs.0.50 per broiler produced (1.1% of the cost of production), only from the integrated segment (60% of the poultry- 1080 million) the checkoff would be able to generate $11 million and a mere 0.14% of the amount given to National Rural Emplyment Guarantee Scheme (NREGS) would double the amount of the checkoff fund which can used to promote poultry product consumption.

Amit Sachdev
India Representative
U S Grains Council
Email: usgcindia@gmail.com

Monsoon and mixed bag for commodity prices

Monsoon and mixed bag for commodity prices

Monsoon has covered the entire country, but for the period June 1 - July 1, 2009 the monsoon rains are deficit by 46%. The last week's rainfall is likley to give a boost to sowing of rice, oilseeds, pulses, maize and sugarcane is the northern part of the country which was reeling under extreme weather conditions. This may be one reason way maize prices were lower

Maize prices moved lower by about 1% at the market yard to Rs.8650 per MT level. The prices though remained higher than last year by about 6.2%. The delivery prices though would move higher as the truck owners/transporters would increase the charges due to increase in diesel prices.

In the futures market, prices moved lower by about 2% for July / sept period to 9160 – 9350 per MT, but for October, prices were lower by about 7.5% to Rs.8650 per MT, possibly as the monsoon has fully covered India and there is anticipation of a good corn crop. In addition, the US prices moving lower could have helped the Indian prices moving to lower levels.

In the SPOT markets of Karimnagar and Davangere prices moved lower by 1.5 – 2.3% to Rs.8871 and Rs.8565 per MT respectively. While in Nizamabad prices moved up slightly t Rs.8948 per MT.

Pearl Millet prices moved up by about 3.1% this week to Rs.8766 per MT and were also higher than last year by 22%. The prices were just about 1% higher than maize at the market yard.

Sorghum (Jowar) prices were higher than last week by 11.3% to Rs.11727 per MT and also higher than last year prices by 11.7%. Against maize, the prices were higher by 26%.

Barley prices moved up by 0.7% to Rs.7700 per MT. and were lower than last year by about 40%. There is ample amount of barley available in the India for malt manufacture and feeding the animals. At least 1.2 MMT of barley will be used for feed and food purposes in 2009/10.

In the futures market, the prices were lower than last week by about 2% for Jul/Oct period. The price in the SPOT market (Jaipur) was stable at Rs.8400 range.

On CBOT, corn prices were down by about 10% for July, Sept and Dec deliveries. July $136.05 per MT; Sept 136.06 per MT; Dec $140.70 per MT. This was reflected in the FOB Gulf and PNW prices which were down to $160/162 and $172/177 per MT range respectively. Sorghum prices have moved down by about 6.2% against corn on FOB US Gulf.

Lower corn values have lowered the prices of DDGS in the market. FOB value (US Gulf) is indicated at $154 per MT, down 10% against last week. Delivered prices in SEA region are indicated at $215/218 per MT. Possibly this is the cheapest protein available and is pushing the demand higher.

The freight rates have remained stable this week, moving up by about $1 per MT for Gulf-Japan, PNW-Japan or Brazil-Argentina to China.

One of the reasons being attributed to lower corn prices is the increased land under corn in the US. As per the June 30, USDA report, US farmers have planted more than 87 Mill Acres of land under corn, up 1% against 2008. Also the Soybean planting is up by 2% to 77.5 mill acres. If the weather remains favorable, US would be harvesting the biggest corn crop in Oct 2009.

Reports from Argentina point to higher soybean crop at the expense of corn due to the agricultural policy and an export tax on corn in Argentina. In addition, China is expected to release about 30 MMT of corn in the market this year. Also the Chinese government has set the standards for grain (corn), which will be effective Sept 1, 2009.

With the US prices being lower, Indonesia exporting corn in the region, China coming into the market, there is scope for Indian corn prices to move lower. But the biggest force here will be China and when the stocks will be in the International market.

Amit Sachdev
India representative
U S Grains Council
email: usgcindia@gmail.com