Coarse grains prices show strength; Food grain production to be hit

Coarse grains prices show strength

Maize prices moved up again this week by 1.3% to Rs.9200 per MT on an average at market yard. The prices are higher than last year by 6.8%. At the state level, while prices are stable at MSP (Rs.8400 per MT) in Andhra Pradesh, they have risen steadily in Gujarat by 4.5% to Rs.10450 per MT; Rajasthan by 5.3% to Rs.9930 per MT; Uttar Pradesh by 7.6% to Rs.9850 per MT. Prices were down by 5.9% in Tamil Nadu to Rs.8550 per MT. In Maharashtra markets the prices was reported at Rs.8700 per MT. Reports are that arrivals have started. Punjab local is available at Rs.9900 per MT. Quality issues have been reported at some locations where wet maize is in the market. The average price of maize for Oct 2009 was 9084 per MT, 1.5% lower than Sept 2009, but 10.84% higher than Oct 2008.

On the futures market prices have moved up by 2 – 4%. For the closest month Nov, prices moved up by 2.2% to Rs.9660 per MT; Dec up 2.7% to 9770 per MT; Jan up 3.4% to Rs.10210 per MT and Feb up 4.2% to Rs.10380 per MT. In the spot market the price in Nizamabad was up by 2% to Rs.9225, but in Karimnagar and Davangere prices moved lower by 0.4% and 0.8% to Rs.8770 per MT and 8592 per MT respectively.

Pearl Millet prices have risen 14% this week to Rs.9950 per MT. Arrivals are good, but quality of the grain is an issue in Haryana, Punjab and Uttar Pradesh. Against last year, pries are up by 23%. Pearl Millet can be used in dairy/poultry rations, but the current price is higher than maize by 7.6%. making it difficult for the farmers to use the same. Average prices of Pearl Millet in Oct 2009 was Rs.9491 per MT, 4.85% higher than Sept 2009 and 26% higher than Oct 2008.

Sorghum price moved lower by 6% at the market yard to Rs.11680 per MT against last week, but remained higher than last year by 13.5%. Against maize the price is higher by 21%. The average price of Sorghum for Oct 2009 was Rs.11932 per MT, 1.5% lower than Sept 2009, but 24.8% higher than Oct 2008.

Barley prices have also moved up by 1.2% this week to Rs.7933 per MT. Prices remained lower than last year by 16.7%. The average prices of barley at the market yard for Oct 2009 was Rs.7856 per MT, similar to Sept 2009 price and 16.74% lower than Oct 2008 prices.

On the futures market prices moved up by 6 – 7%. For Dec contract the prices are up by 6.4% to 10150 per MT and for April up by 7.4% to Rs.10600 per MT. In the spot market the prices moved up by 10% to Rs.9454 per MT.

Corn prices ended lower this week as the weather is expected to be dry next week and harvest will proceed. Near month contract for Dec was down by 7.6% to $144.55 per MT. For Mar contract prices were down 7% to $149.59 per MT and for May the prices were down by 6.6% to $153.37 per MT. The FOB value too was down and indicated at $175-177 per MT for Nov – Feb for US Gulf, while for FOB PNW, prices were indicated at $200 per MT for the same window. Sorghum prices on FOB basis US gulf were indicated at $177/180 per MT.

DDGS FOB US Gulf prices are indicated at $ 166 for Nov; 4160 for Dec and $155 for Jan delivery. The reason being attributed to the drop is prices is the good quantum of corn and lower prices this week. The demand remains strong and the CNF prices are indicated at $225 per MT for SEA region.

The freight markets are also getting strengthened with US Gulf-Japan prices moving up by a dollar to $66 per MT. Argentina-Brazil to China freight rates have also been reported higher at $49-51 per MT.

Food grain production to be hit

Centre for Monitoring Indian Economy (CMIE) has projected that the Khariff Food Grain production for 2009/10 will be down to 98 MMT against 117.7 MMT last year. USDA has also projected that the rice production for the year 2009/10 will be down by 16-17 MMT.

In 2008/09, as per the 4^th Advance Estimate by GOI, the food grain production in Khariff for Rice 84.58 MMT; Pulses 4.78 MMT, Pearl Millet (Bajra) 8.83 MMT; Sorghum (Jowar) 3.10 MMT; Maize 13.90 MMT; Ragi 2.06 MMT and Small Millets 0.45 MMT, making a total of 117.7 MMT. Rice constituted 71.86% of the total food grain package and if the production is down by 20% against last year to 68 MMT, as per estimates it would be 69.38% of the Khariff Food Grain production. The rest of food grains in 2008/09 totaled 33.12 MMT and in 2009/10 the total is expected to be 30 MMT, down 9.42% against last year. Which one will shall bear the brunt of the loss is still being counted, but there is no doubt that production of almost all food grains (pulses, coarse cereals) is hit. Reports indicate losses in Uttar Pradesh and Rajasthan due to drought, while in Andhra Pradesh and Karnataka the loss is due to floods and excessive rains.

Amit Sachdev

India Representative

U S Grains Council

E Mail: usgcindia@gmail.com

Higher prices of maize, reflect buying spurt; Prices in US move up due to wet weather concerns

Higher prices of maize, reflect buying spurt; Prices in US move up due to wet weather concerns

Maize prices moved up at the market yard by 1% to Rs.9100 per MT range. Arrivals have started in almost all areas and prices are reported to be higher in all states except Uttar Pradesh, where they are down by 1.3% to Rs.9150 per MT. Prices in Andhra Pradesh moved up by 0.3% to 8400 per MT; Gujarat up by 4.4% to Rs.10,000 per MT; Karnataka up 2.6% to Rs.8650 per MT; Rajasthan up by 2.3% to Rs.9430 per MT and Tamil nadu up by 8.2% to 9088 per MT. This is for loose material at the market yard. The average price is higher than last year by 11.3%.

In the futures market (NCDEX), the prices for the four contracts moved up by 3 – 5%, which is substantial in the harvest time. Nov up 3.1% to Rs.9445 per MT; Dec up 4.5% to R.9700 per MT; Jan 2010 up by 5.37% to Rs.9870 per MT and Feb 2010 up by 4% to Rs.9960 per MT. In the spot markets prices have remained more or less stable with Nizamabad at Rs.9045 per MT; Karimnagar at Rs.8813 per MT and Davangere at Rs.8665 per MT.

Pearl Millet (BAJRA) prices moved lower at the market yard as arrivals have been very strong in the northern region. Prices moved lower by 8.9% to Rs.8760 per MT. Reports indicate that the quality may not be as good due to lower rainfall in some areas and also grain in shown black spots due to rainfall during the final harvest stages. Price is 9.1% higher than last year and about 4% lower than maize at the market yard (on average).

Sorghum (JOWAR) prices moved lower by 2.5% this week to Rs.12435 per MT. The prices are 25.3% higher than last year and almost 27% higher than maize at the market yard.

Barley prices have moved up by 1.8% this week. Prices however are lower than last year by 18%. Report are that new breweries are being set up as the demand of beer is increasing. The total beer market in growing by almost 15% per annum, which is making foreign brands look towards India and make investments to tap the Indian market.

In the futures trade (NCDEX) prices have moved up by 7.3% for the Dec contract to Rs.9540 per MT. For April 2010 as well prices were higher by 5.9% to Rs.9870 per MT. In the spot market (Jaipur), prices showed an upward trend by about 4% to Rs.8591 per MT. In the US, prices of barley on FOB basis US gulf is indicated at $175 to $185 per MT for Nov – Jan period.

Corn prices in the US have been fueled due to wet weather condition. Prices are up by almost $10 per MT on CBOT and that is also reflected in FOB values and the same is the case with DDGS prices.

On CBOT Dec corn closed at $156.52 per MT, up 6.6%; Mar corn was up 6.5% to $161.01 per MT while May corn was up 6.33% to $164.24 per MT. FOB US Gulf prices are indicated at $187 per MT for Oct’09 –Feb’10 while FOB PNW is indicated at $211/212 for the same period, reflecting a $10 per MT increase against last week’s prices. Freight rates have also shown an increasing trend. Benchmark Gulf-Japan and PNW-Japan freight rates have increased by almost 10% in one week to $65 – 65 per MT and $37 respectively. One reason could be the increase in crude prices, but then the demand for export is also higher. Argentina/Brazil – China freight rates have also gone up by almost 10% to $48 – 50 per MT.

DDGS (Dried Distillers Grains with solubles) is increasingly finding space in the livestock rations (poultry, dairy, fish, swine) across the globe. Current estimates put the figure at 4-9 – 5 MMT of DDGS export from US in 2009 (Jan – Dec). For the period Jan – August 2009, exports are up by 14%, the major change being China where imports are up to 93 TMT (+1947.12%). Imports by Thialand up by 85%, Philippines up by 22.8%; Korea up by 65.74%; Indonesia up by 93.4%. As per reports from USDA, Bangaldesh has imported trial batched totaling 1334 MT of DDGS during the period and all has been sold/consumed in Bangaldesh.

The current prices are higher, reflecting the change in corn prices in the US. FOB value, US gulf is indicated at $187 per MT for Nov and $179 per MT for Dec. CNF SEA region is indicated at $222 – 225 per MT for Nov, but lower at $218 per MT for Jan 2010.

Amit Sachdev,

India Representative,

US Grains Council.

Email: usgcindia@gmail.com

Commodity prices move up

Commodity prices move up

This was a festival week, with most people getting ready to celebrate Deepawali, the Festival of Lights at the end of the week. Hopes that Indian economy is back on the path of recovery, Industrial production has revived, malls, markets were full of people buying gifts for themselves and friends. The stock market moved up and so did the commodity prices.

Wishing every one a happy and a prosperous Deepawali.
May the festive lights sparkle your life with loads of love, laughter, luck, happiness, prosperity and wisdom to take on the world with new energy.

Maize prices have been more or less stable at the market yard on pan India average at about Rs.9000 per MT. GOI has not taken out any estimates as yet for the Khariff 2009/10 crop. Prices are higher than last year by 10.2%. In the states, except Gujarat where prices have moved up this week by 1.6% to Rs.9580 per MT at the market yard, prices is all states have shown a downward trend. Andhra Pradesh, down by 2.6% to Rs.8400 per MR; Rajasthan down 3.1% to Rs.9220 per MT; Uttar Pradesh down 2.1% to Rs.9270 per MT; Karnataka down 4.8% to Rs.8430 per MT. Prices in Maharashtra were close to Rs.9060 per MT,w hile in Tamil nadu were stable at Rs.8400 per MT.

On NCDEX the moved up for Oct contract by 1.7% to Rs.9160 per MT and 4 other new contracts also started with Nov Rs.9160 per MT; Dec Rs9280 per MT; jan 9370 per MT and FEb Rs.9570 per MT. The higher prices are indication enough that prices are likely to remain firm or move higher. In the spot markets as well the prices showed an upward trend by the end of this week. While prices in Nizamabad were stable at Rs.9066 per MT, prices in Karimnagar were up 0.5% to Rs.8848 per MT and Davangere up 0.3% to Rs.8727 per Mt. Trade reports indicate that some volumes of maize have been contracted for supplies to North India (Delhi and around) for Rs.10200 - 10700 per MT (Rake delivery).

Pearl Millet (Bajra) prices moved up by about 1.5% this week to Rs.9600 per MT. Prices are higher than last year by 25.3% and higher than maize by 6.3%. In most of the areas of Haryana, parts of Rajasthan the crop has been harvested or is being harvested and left in the fields to dry. In some cases the grains has already reached the market.

Sorghum (Jowar) prices have moved up by 17.4% by the end of this week. Prices were higher than last year by 26.6% and 29.3% higher than maize. There is speculation that Sorghum crop has been damaged in Maharashtra and part of karnataka and this is going to lead to severe shortage for those who grow Sorghum for their own subsistence. While teh grain is used as food, the dry plant is fodder for the animals.

Barley prices moved lower than last week by 3.2% to Rs.7700 per MT. Prices are lower than last year by 27%. The rabi sowing will start in areas of Rajasthan and Haryana soon after dewali (festival of lights).

On NCDEX while prices for the close month Oct were down by 0.8% to RS.8420 per MT, Dec contract was up by 1% to Rs.8890 per Mt and Apr up by 2.4% to Rs.9320 per MT. In teh spot market at jaipur, prices remained stable at Rs.8260 per MT.

On CBOT for the three most close contracts Dec 2009, Mar 2010 and May 2010 the prices moved up by 2.4 - 3.2% as harvest is delayed and some freezing in corn belt has been reported. Dec corn closed at $146.84 per MT, up 3.15%; Mar up 2.4% to $151.17 per MT and May up 2.46% to $154.48%.

FOB prices for Gulf and PNW were also reported to be higher at $177/178 and $201/202 per Mt respectively for the period Oct-Feb. Sorghum prices FOB US Gulf were reported to be close to corn at $179/180 per MT.

DDGS FOB values (US Gulf) were reported at $148/149 per MT and CNF prices for the SEA region were close to $216/220 per MT. China is a major buyer of DDGS and so are other nations. Poultry and dairy farmers are finding it a cheaper source of protein and energy. As the harvest in US is also delayed, cattle, poultry and swine farmers are also using more of DDGS, thus increasing the demand locally. The prices in midwest, where most of the US corn is grown and ethanol plants are there, DDGS is priced at $120 per MT ($110 per short ton - 910 kgs), FOB Plant basis.

Reports indicate that Argentina may not be exporting more corn this year. The first of the export licenses for 400 TMT was issued recently. Brazil on the other side is exporting more corn and the Government may issue more licenses for another 500 TMT. Current prices were close to $174 per MT (FOB).

The freight rates moved up slightly this week with US Gulf - Japan up to $59 per MT, PNW - Japan up to $33.50 per MT and Argentina-Brazil to China up to $43/44 per MT.

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

No major effect on prices due to floods; More corn expected in USA and demand set to increase in India

No major effect on prices due to floods

Maize prices moved up slightly by about 1% to Rs.9022 per MT at the market yard. Against last year the prices were higher by 8.6%. Prices were down in Andhra Pradesh by 4% to Rs.8600 per MT; Gujarat by 3.8% to Rs.9400 per MT; and Tamil Nadu by 1.7% to Rs.8400 per MT. Prices moved up by 2% in Karnataka to Rs.8800 per MT; 2.2% in Rajasthan to Rs.9500 per MT and 1.5% in Uttar Pradesh to Rs.9500 per MT.

In the futures market though the prices were down by 1% to Rs.9000 per MT. In the Spot markets in Nizamabad and Karimnagar prices were up by 1.7% to Rs.9073 per MT and 0.1% to Rs.8800 per MT respectively. In Davangere the prices were down by 0.6% to Rs.8700 per MT.

Pearl Millet (Bajra) prices have moved up this week by 2.5% to Rs.9500 per MT at the market yard. Prices are higher than last year by 21.6% and higher than maize by 4.7%. In the northern market though the prices are lower than maize by 1.5% and the new crop being harvested is being used in poultry rations in some areas.

Sorghum (Jowar) prices have moved lower by 14.3% this week to Rs.10900 per MT, but remained higher than last year by 17.3%. Against maize the prices were higher by 16.9%.

Barley prices also were lower than last week by 9% to Rs.8000 per MT. Against last year, the prices were lower by 20.5%. In the futures market, all three contracts moved lower, Oct down 2.92% to Rs.8492 per MT; Dec down 3.59% to Rs.8810 per MT and April down 2.13% to Rs.9150 per MT. In the spot market, Jaipur prices moved lower by 0.6% to Rs.8255 per MT.

Last week saw unprecedented rains and floods in the deccan penninsula, extending from Goa to Vijaywada covering the states of Goa, Maharashtra, Karnataka and Andhra Pradesh. Press reports indicate about 0.9 t0 1 Mill hac, and crops like Paddy, Sorghum, Maize, Pulses etc have fallen victim to the rains and floods. Some experts have put the damage at 1 - 1.3 MMT for maize. Press reports have indicated 2.5 Mill hac of land effected by floods in Karnataka alone and paddy crop is expected to be down by 3.0 MMT in Andhra Pradesh due to drought conditions and now rains and floods.

Corn prices in CBOT made huge gains this week and prices were up by almost 7 - 8%. Dec up 8.2% to $142.35 per MT; Mar up 8.37% to $147.62 per MT and May up 7.82% at $150.77 per MT. The FOB gulf prices have also gained and are up to $174/176 per MT for the period Oct'09 to Feb'10. FOB PNW is up to $197/200 per MT for the same period.

Freight rates too have moved up as the economy responds. Gulf-Japan rate is up to $58.50 per MT, while PNW-Japan rate is up to $32 per MT.

More corn expected in USA and demand set to increase in India

The latest USDA report (WASDE) has put the corn production in US at 330.6 MMT a 1 MMT increase over Sept 2009 projection. The 2009 crop is expected to be 7.5% higher than 2008, when the crop was 307.36 MMT. The main reason for higher production is the producivity, which is expected to be 4.17 tons per acre. The Sept 2009 projection was 4.11 tons per acre.

The report also increases the total use of corn slightly to 330.96 MMT and that in due to increase in Food, Seed and Industrial category. The ending stocks are expected to be up tp 43.52 MMT against Sept 2009 projection of 41.53 MMT.

The world production of corn in 2009 is put at 792.54 MMT, slighly lower than the Sept projection of 794.06 MMT. The total use is expected at 803.14 MMT, up from Sept projection of 799.62 MMT. The world ending stocks are expected to be 136.25 MMT. In 2008 the world production of corn is estimated at 791.28 and total use 774.72 MMT. the ending stocks in 2008 were expected at 146.84 MMT.

China's production is expected to fall to 155 MMT from sept proejction of 160 MMT and its use is expected to be higher at 159 MMT against earlier estimates of 158 MMT. The ending stocks will be close to 48.64 MMT, down from earlier projected 54.64 MMT.

India's total demand for the end user sectors is expected at 12.46 MMT including Poultry at 7.87 MMT, starch at 1.87 MMT; Livestock at 2.69 MMT and Brewery at 0.3 MMT. The food use of corn in India is expected at 4.87 MMT. Thus the total demand for corn would be 17.6 MMT from Oct 2009 to Sept 2010. This demand does not take into account any export and seed use of corn. Farmers normally keep corn seeds and use the same in the fields.

With Khariff corn being effected due to drought and then by excess rains and floods, rabi corn has to be enough to cover the loss in Khariff as per some experts and trade.

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

Except maize, all other coarse grain prices move up; New corn products in the market

Expect maize, all other coarse grain prices move up

This week was a 3 day trade week, Monday was a holiday on account of Duserra while Friday was a holiday on account of Gandhi Jayanti.

Maize prices were down about 3.2% this week to Rs.9000 per MT at the market yard. Prices remained higher than last year by about 9%. The average price for Sept 2009 was Rs.9220 per MT, about 8.4% higher than Sept 2008 and 03% lower than Aug 2009. Prices in almost all states were down except in Andhra Pradesh where prices moved up by 6.2% to Rs.9000 per MT. Prices in Gujarat down 5.6% to Rs.9500 per MT; Maharashtra down 1.6% to Rs.9000 per MT; Rajasthan down 2.6% to Rs.9300 per MT; Tamil nadu down 0.5% to Rs.8600 per MT; Uttar Pradesh down 6.2% Rs.9300 per MT. Prices in Karnataka remained stable at Rs.8700 per MT.

In the futures market (NCDEX) prices moved up for Oct 2009 delivery to Rs.9100 per MT. Prices in Nizamabad were down 0.6% to Rs.8920 per MT; Davangere down 0.78% to Rs.8751 per MT and prices in Karimnagar were up by 0.6% to 8790 per MT.

Pearl Millet (Bajra) prices were up this week by 3.5% to Rs.9230 per MT. New arrival of pearl Millet have started in Haryana. Prices are higher than last year by 21.2%. The prices against maize are higher by 3.1%. Average prices in Sept 2009 was Rs.9014 per MT, 26.2% higher than Sept 2008, but 0.25% lower than Aug 2009.

Prices of Sorghum (Jowar) moved up higher by 31.7% this week to Rs.12680 per MT. Prices are higher than last year by 20.7%. Prices are higher than maize by 29.5%. The average price of Sorghum in Sept 2009 was Rs.12118, 25% higher than Sept 2008, but about 9% lower than Aug 2009.

Barley prices moved up by 22.3% to Rs.8730 per MT. Prices were down from last year by 6.8%. Average price in Sept 2009 was Rs.7885 per MT, 17% lower than Sept 2008 and down by 4.5% against Aug 2009.

In the futures market the prices for Oct 2009 delivery was down by 0.5% to Rs.8750, Fpr Dec dprices down by 0.24% to Rs.9140 per MT; Apr 2010 delivery up 1% to Rs.9300 per MT. In the spot market (Jaipur), prices were up by 0.26% to Rs.8300 per MT.

On CBOT, corn prices moved up for both Dec 2009 and Mar 2010 delivery by 5.29% and 0.46% to $131.56 per MT and $136.21 per MT. May 2010 delivery prices were quoted at $139.83 per MT. FOB value (US gulf) was indicated at $163 per Mt for Oct/Nov/Dec, while FOB PNW was indicated at $194/195 for the same period.

DDGS prices (FOB US Gulf) have more or less remained stable at $144/145 per MT for Oct/Nov/Dec period. CNF values for the SEA region were indicated at $210 – 216 per MT. The total exports for the period Jan – July 2009 from US are 2.614 MMT, up about 7% against last year same time period. Some major buyers in SEA region include China (+34 TMT), Bangaldesh, Philippines (+64 TMT), Vietman (+113 TMT). In all these countries use of DDGS has helped reduce cost of production of meat, milk and eggs and has assisted in taming the rate of inflation. In the US too, the increased production and sage of DDGS is expected. As per reports US is likely to produce 43.47 billion liters of Ethanol in calendar year 2009.

Without the use of alternative protein and energy sources in India it will be difficult to reduce the cost of production of meat, milk and eggs. Molasses, as a source of energy is used extensively in cattle feed is priced at Rs.11500 per MT feed mill delivery. GOI is thinking of reducing the excise duty on molasses to reduce the cost of cattle feed and the burden on the farmers. 

New corn products in the market

Corn is a source of energy specially for poultry and dairy. School of Nutrition of the Philippine Women’s University (PWU) has developed the energy bar from corn for physically active individuals. The energy bar will be made from white flint corn grits (why not yellow). Corn due to its high Amylose content would be a good meal, similar to corn flakes.

Energy bars in India have found a niche and quite a few people who are on the move prefer to consume energy bars not available in India and made indigenously. Using corn as a source of energy will be more feasible and healthy.

Amit Sachdev

India Representative

U S Grains Council

email: usgcindia@gmail.com