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