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.
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
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