Coarse grain prices move lower - but for a short time

Coarse grain prices move lower - but for a short time

Maize prices at the market yard moved lower by Rs.200 (2%) per MT to Rs.9300 range, but remained higher than last year by 15.7%. In Andhra Pradesh, Rajasthan and Tamil nadu prices were up by 0.62%, 2% and 3% to Rs.8600, Rs.10,550 and Rs.8860 per MT respectively. In Karnataka and Maharashtra prices were stable at Rs.8400 per MT at the market yard. Gujarat average prices was close to Rs.9900 per MT, down 1.4%. Prices in Uttar Pradesh corrected at Rs.9233 per MT, down 15.3%. This could be an anomaly, as the trade informs that the average price at Mandi (market yard) is about Rs.9400 per MT (loose) and packed, ready to move maize would be close to Rs.10500 per MT. Delivered prices in North India and heading north, and maize is being delivered in Punjab and Haryana at Rs.11,200 per MT.

Average price of Nov 2009 was Rs.9333 per MT, about 15% higher than Nov 2008 and 2.7% higher than Oct 2009.

Reports also indicate that there are some quality issues maize in Karnataka (water damage), but the quantum may not be as big and limited area was affected due to rains.

In the futures market (NCDEX), all contracts were down, Dec down 0.3% to Rs.9860; Jan down 0.3% to Rs.10210 per MT; Feb down 0.65% 10550 per MT; Mar down 1.09% to Rs.10810 per MT. Experts believe that this could be due to the Dubai debacle as well. In the Spot market priced moved up, Nizamabad up 1.56% to Rs.9420; karimnagar up 5.22% to Rs.9399 per MT, while prices in Davangere were stable at Rs.9170 per MT. On MCX, Dec contract was up by 0.2% to Rs.9850 per MT and prices in Nizamabad Spot market was close to Rs.9250 per MT.

Pearl Millet (Bajra) prices moved lower by 3.2% to Rs.10090 per MT, but were higher than last year by 28%. Prices are higher than maize by 8%. Average price for Nov 2009 is Rs.10361 per MT, 38% higher than Nov 2008 and 9% higher than Oct 2009.

Sorghum (Jowar) prices moved down by 3.7% to Rs.13765 per MT, remained higher than last year by 35.6%. Prices are higher than maize by 32.5%. Average prices for Nov 2009 was Rs.13179 per MT, 45% higher than Nov 2008 and 10.45% higher than Oct 2009.

Barley prices added 13.8% to the tally to Rs.10480 per MT. For the first time is many weeks, barley prices are higher than last year's by 12.3%. Average price for Nov 2009 was Rs.9578 per MT, 3.2% higher than Nov 2008 and 22% higher than Oct 2009.

In the US, the harvest is going on, but is much delayed. Reports indicate 68% of the corn crop is harvest against 87% harvested last year. Sorghum harvest is much better at 75%, but is lower than last years 87%. Soybean harvest is only 3% short at 94% against last year's 97% harvest at this time of the year. This week was a short working week, due to Thankgiving Holiday and possibly by this week the harvest would move faster as farmers would like to put in the corn in storage.

On CBOT, prices gained, possible due to delayed harvest weaker dollar. Also as farmers are not selling currently, prices are reported to be higher. Dec up 1.58% to $156.36 per MT; Mar up 1.37% to $162.74 per MT; May contract up 1.68% to $166.92 per MT. FOB gulf is indicated at $186/190 per MT for Dec - April while FOB PNW is indicated at $210/214 per Mt for the same period. Sorghum (FOB US Gulf) was indicated at $195/197, 3.5 to 4% higher than corn. Argentinian and Brazilian corn is being offered at $175 and $188 per MT respectively on FOB basis.

DDGS prices were stable at $166/170 per MT (FOB US gulf), but with container prices moving up, delivered prices to the region may be moving up.

Food inflation in India is inching up day by day. Reports show almost 100% increase in retail prices of some of the staple food products, specially pulses (Dal), which provides protein to the Indian population. India is the largest consumer of sugar and its low production has created a shortage and retail prices are up to Rs.38 - 40 per Kg. Last year Sugar was selling at Rs.18 per kg in the retail market. With overall deficit in grain production and demand increasing, would Rabi be able to cover the loss in Khariff, possibly not, but there is hope.

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

Toxin levels in various feed ingredients - guidance from FDA

In my last report (Nov 23, 2009), the level of Aflatoxin for poultry was mentioned at 300 PPB. My apologies, it is 20 PPB as per the guidance document of FDA. 300 ppb is for cottonseed meal for swine and poultry.

Detailed guidance documents can be found using the link below

www.ngfa.org/files/misc/Guidance_for_Toxins.pdf

https://www.msu.edu/~mdr/g1514.pdf

Amit Sachdev

Mixed calls for prices of coarse cereals

Mixed calls for prices of coarse cereals

Maize prices moved up further at the market yard by 2.5% to Rs.9500 per MT. Prices are higher than last year at this point by 10.2%. The highest prices of yellow maize was quoted in Rajasthan at +10,000 per MT and for Red maize, it was in Gujarat at + Rs.10,000 per MT. Prices in Andhra Pradesh has been stable at Rs.8500 per Mt, while in Rajasthan and Tamil nadu prices moved little lower by 0.7% and 2% to Rs.10350 and Rs.8600 per Mt respectively. Prices in Gujarat and Uttar Pradesh moved up by 2.4% and 8% to Rs. 10080 and Rs.10900 per Mt at the market yard.

On NCDEX prices were mixed, while the Dec contract was down by 0.9% to Rs.9890, Feb contract was up by 1.62% to Rs.10620 per MT. January contract remained stable at Rs.10250 per MT. Mar contract closed at 10930 per MT. In the spot market, the price moved up in Karimnagar by 0.21% to Rs.8933 per MT, while in Nizamabad and Davangere prices remained stable at Rs.9275 and Rs.9160 per MT. On MCX , Dec contract closed 3.5% lower to Rs.9850 per MT.

Pearl Millet (Bajra) prices moved little lower by 1.1% to Rs.10450 per MT. Prices are higher than last year by almost 25% and against maize up by 9%.

Sorghum (Jowar) prices moved up by 24.8% this week to reach 14290 per MT. Prices are higher than last year by 35% and against maize up by 33.6%.

Barley prices moved lower by 7.5% at the market yard to Rs.9225 per MT. The prices are lower than last year by 0.8%. In the futures market, prices moved lower across all contracts. Dec down 0.57% to Rs.10016 per MT; Apr down 1.42% to Rs.10400 per MT; May down 0.46% to Rs.10640 per MT. In the spot market (Jaipur) as well prices were down by 0.61% to Rs.9384 per MT.

On CBOT the prices were up slightly for the 3 contracts, Dec up 0.14% to $153.92 per MT; Mar up 0.34% to $160.22 per MT and May up 0.33% to $164.16 per MT. The increased prices are reflected in the indicative FOB values as well. FOB Gulf for Dec – Feb is indicated at $184/185 per MT and for PNW indicated at $203-211 per MT. Sorghum (FOB US Gulf) is indicated at $191/193, little higher than corn.

DDGS prices moved up slightly for Dec at $166, while Jan price was indicated at $160 per MT (FOB, US Gulf), CNF prices wee indicated at $240 for Dec and $246 for Jan 2010.

There are some reports of toxins in US Corn due to higher moisture levels and delayed harvest. The trade and endusers are cautious and are testing corn and co-products before shipping/using the same. Food and Drug Administration (FDA) has set a maximum recommended level of toxins in different species of animals for trade and use.

Level for Afltoxin for poulry and dairy is set at 300 PPB and 20 PPB; Level for Fumonsin is set at 50 PPM and 15 PPM, while level for Vomitoxin have been set at 10 PPM and 5 PPM for the above species. FDA has also recommended levels of toxin containing ingredients in feed to limit the amount of toxin in the feed ration.

The freight rates have shown an increase in all sectors, Gulf-Japan benchmark up by $3.5 per MT to $73.5 per MT, while PNW-Japan up to $47 per MT. Argentina/Brazil – China freight is also indicated higher at $55-58 per MT for PANAMAX bulk shipments.

In India there is a major issue related to sugarcane prices, which is leading to delay it its harvest. The amended bill which is likely to be brought in the parliament on Monday will make sure that the differential in price F&RP (Fair and Remunerative price) and SAP (State Advised prices) will be paid by the sugar mills and not the state.

GOI also proposes to penalize oil companies, which are not blending ethanol in petrol at 5% level. With molasses production effected due to lower sugarcane production, this would be a major bottleneck in future as the demand is set to increase in the cattle feed sector.

Amit Sachdev

India Representative

U S Grains Council

usgcindia@gmail.com

Coarse cereal prices remain strong

Coarse cereal prices remain strong

Average maize prices remained stable at the market at Rs.9300 per MT. Prices are up against last year by 13.2 percent. Average prices in Andhra Pradesh and Uttar Pradesh were up by 1.5% and 5% respectively, while price in Gujarat, Rajasthan and Tamil Nadu were down by 2%, 5% and 1.6% respectively.

The prices are moving down in some areas due to production/delivery pressure, which may be short lived.

On the futures market (NCDEX), prices were lower than last week, Nov down 3.4% to Rs.9525; Dec down 1.86% to Rs.9980; Jan down 3% to Rs.10235 and Feb down 3.5% to 10450. Mar contract closed at 10,800 per MT. In the spot market though prices in Karimnagar were up by 0.83% to Rs.8914 and Davangere up by 3.87% to Rs.9158 per MT. In Nizamabad, prices remained stable at Rs.9274 per MT.

On MCX which has two ongoing contracts, prices were stable at Rs.9950 per MT for Nov, while for Dec contract prices moved up by 0.74% to Rs.10210 per MT.

Pearl Millet prices have moved up by 1.6% to Rs.10550 per MT,. Price are higher than last year by 25.7%. Against maize, the prices are higher by 12.5%.

Sorghum prices were down by 13.4% to Rs..11450 per MT at the market yard, but were 20.6% higher than last year. Against maize, prices are higher by 19.2%. Arrivals in major markets of Maharashtra could be one reason for the prices to turn soft.

Barley prices moved lower this week by 4.7% for Dec contract to Rs.10074 per MT, also for April the prices moved down by 4.2% to Rs.10550 per MT. May contract closed at 10690 per MT. In the spot market (Jaipur) prices were down by 3.65% to Rs.9442 per MT.

On CBOT corn prices moved up by +6% for the three contracts. Dec up 6.3% to $153.69 per Mt; Mar up 6.68% to $159.69 per MT; May up 6.56% t0 $163.61 per MT. One of the reasons being attributed to increase in futures is the marginal decrease in production numbers given by USDA last week and also a slow harvest due to rains in US. (Only 37% of the corn crop has been indicated as harvested by Nov 8). With CBOT higher, FOB rates are also indicated to be up. US Gulf was indicated at $$184/191 per MT, while PNW was indicated at $202/212 for Nov - Feb window.

The freight rates for Gulf-PNW remained stable at $70 per MT, but PNW-Japan rates were up to $43 per MT. Argentina/Brazil to China was indicated at $53-55 per MT.

The new USDA report put the production of corn at 328.21 MMT, slightly lower than Oct report. Increased demand ans slightly lower production is the reason behind increased price indication of $127 - 151 per MT for the 2009/10 crop in US. Report also indicates that the world production is likely to be down to 789.73 MMT against Oct projection of 792.54 MMT.

Reports from china indicated a crop production of close to 144 MMT, about 10 MMT lower than the USDA estimate. China has a end stock of over 48 MMT and with the low production would China release additional stocks in the market to ease the supply situation.

Amit Sachdev
India Representative
U S Grains Council
email: usgcindia@gmail.cm

Prices move up, first estimates confirm fears of lower production; GOI plans for a model code in food advertising

Prices move up, first estimates confirm fears of lower production

Maize prices moved up again this week by 1% to reach Rs.9300 per MT. Prices are higher than last year

by 12.2%. While prices have been stable at Minimum Support Price (MSP) level in Andhra Pradesh, prices have move up in Rajasthan (up 10% to 10950 per MT) and Tamil nandu (4.5% to Rs;.8900 per MT) and were lower in Gujarat (3.8%, Rs.10040 per MT) and Uttar Pradesh (2.2% to Rs.9600 per MT).

In the futures market (NCDEX) prices have moved up by 2 – 4%. Nov and Dec contracts were up by 2% to Rs.9860 and Rs.10170 respectively. Jan contract was up by 3.3% to Rs.10210 per MT, while Feb was up by 4.3% to Rs.10830 per MT. In the spot market as well, prices moved up marginally in Nizamabad by 0.6% to Rs.9281 per MT; 0.8% in Karimnagar at 8840 per MT and 2.6% in Davangere at Rs.8816 per MT.

As per the first advance estimates for Khariff crop of 2009/10, maize production is expected at 12.61 MMT, down 9.28% from last year’s (2008/09), 13.90 MMT. The target for 2009/10 Khariff crop was fixed at 15.50 MMT. Possibly this is one reason for the prices moving up.

Prices of Pearl Millet (Bajra) moved up by 4.1% to Rs.10381 per MT and the prices are higher by 31.6% against last year. Prices are higher than maize by 10.4%. For the Khariff season of 2009/10, the production of Pearl Millet is expected at 5.83 MMT, down 33.98% from last year’s (2008/09) 8.83 MMT. The target for Khariff 2009/10 was fixed at 10 MMT

Sorghum (Jowar) prices are moved up by 13.1% to Rs.13200 per MT and against last year prices were higher by 31.2%. Prices remained higher than maize by 29.6%. The production of Sorghum in 2009/10, Khariff Season is expected to be 2.55 MMT, down 17.74% from last year’s Khariff production which was at 3.10 MMT. The target for 2009/10 Khariff crop was fixed at 4.10 MMT.

Barley prices have moved up by 8.9% this week to Rs.8650 per MT, but are lower than last year by 11.1%. GOI has increased the MSP for Barley for the Rabi Season by 10.29% (Rs.700 per MT) to Rs.7500 per MT. This is the biggest increase as MSP for wheat has been increased by Rs.200 per MT to Rs.11000 per MT, Gram by Rs.300 to Rs.17600 per MT.

In the futures market barley prices have moved up again this week. Dec contract was close to Rs10,580 per MT up 4.2%, while April contract was up 3.88% to Rs.11012 per MT. At the spot market in Jaipur prices moved up by 3.65% to Rs.9800 per MT.

As per the estimates, the overall loss of production for coarse cereals (maize, Sorghum, Pearl Millet, Ragi and Small Millets) is about 5.58 MMT, 19.69% lower than last year’s 28.34 MMT. The production is 9.89 MMT lower than the target fixed for Kahriff Coarse grain production (32.65 MMT). Will Rabi production be able to cover the loss in Khariff production, will be a question that would need to be answered in the next few weeks as the farmers plant the rabi crop.

On CBOT corn prices ended similar to last week, Dec $144.47 per MT; Mar $149.59 per MT and May $153.53 per MT. FOB values for Nov to Feb period for US Gulf ranged between $175-178 per MT and $200-201 per MT respectively.

DDGS demand in the domestic and export markets remained strong and poultry sector remained the biggest buyer. US gulf prices for DDGS were almost similar to last week Nov $163, Dec $160 and Jan $157. CNF prices in SEA region were indicated at $230-234 per Mt, due to the increase in freight costs.

For the bulk commodities, freight is strengthening and the benchmark rates for US Gulf Japan and PNW – Japan were indicated higher this week by $4 per Mt and $2.50 per MT to $70 and $39.50 per MT respectively. Agrentina – Brazil to China freight also ended $2 up against last week.

As the demand of grain is rising in the world market for food and feed, European Union (EU) has cleared types of biotech for food, feed, import and processing. These include YieldGard VT Pro (MON 89034) and YieldGard VT Rootworm/RR2 (MON 88017) and Herculex RW protection trait stacked with Roundup Ready Corn 2. With the new approvals, feed millers in EU will be able to import corn, DDGS and also Corn Glutten Meal/Feed from US containing these traits.

GOI plans for a model code in food advertising

The newly constituted Food Safety and Standards Authority of India (FSSAI) has set guidelines for the "Self Regulation in Food Advertisement". The draft code has been posted on the web and can be assesed on the FSSAI website (http://www.fssai.gov.in/).

The guidelines seeks to regulate the law relating to advertising and unfair trade practices in the food sector. There are many instances when labels and advertisements tend to provide misleading information to the public/consumers and charge higher for the same.

Honourable Supreme Court has also said that companies selling products under false clains should be prosecuted.

Amit Sachdev

India Representative,

U S Grains Council

E mail: usgcindia@gmail.com