Commodity prices move lower

Commodity prices move lower

Maize prices at Mandi level (Market yard) moved up by about 1% to 8770 per MT and remained higher than last year by 4.3%. In the futures trade (NCDEX), the price moved lower by 0.5 - 3.8% from July - Oct contracts. prices were ranginging between Rs.9260 for Sept contract to Rs.9550 per Mt for August contract. Near month close, July contract was down to Rs.9380 per MT. In the spot markets too, prices were lower than last week by 0.6 - 1% in Nizamabad (Rs.8868) and Davangere (Rs.8767). It was only at karimnagar that prices were higher at Rs.9029 per MT. Average price of maize at the market yard in June was Rs.8670, about 8% higher than last year and 2.3% higher than May 2009.

One reason for prices being lower is the quantity of maize availability being higher in Karnataka as the tender has been cleared and stocks will be available for sale. This has possibly forced some traders to bring out stocks as well increasing the overall availability of maize in the market.

Pearl Millet (Bajra) prices also moved lower by 1.8% to Rs.8500 per MT at the market yard, but were higher than last year by 19%. Prices were lower than maize by 3.1%. Average price of Pearl Millet at the market yard was Rs.8591 per Mt, 21.58% higher than last year and about 4.11% lower than last month.

Sorghum (Jowar) prices moved a bit higher at the market yard by 1.3% to Rs.10530 per MT and also were higher than last year by 1.8%. Against maize, the prices remained higher by 16.7%. Average sorghum prices were Rs.10775 per MT, 4.34% higher than last year Jun 2008 prices and were 2.38% higher than may 2009 prices.

Barley prices have moved lower at the market yard by 2.3% to Rs.7360 per MT. Prices were lower than last year by 43.4%. Average price of barley at market yard for Jun 2009 was Rs.7857, about 30% lower than last year and 8.91% lower than last month.. In the futures market too, prices moved down by 0.5 - 3.6% and in the spot market (jaipur) prices were lower by 0.8% to Rs.8369 per MT. Current prices of feed barley in the US are indicated at $200 per MT.

Due to increased availability of barley in the India, specially in the Northern Region (Rajasthan, Haryana, Punjab, Uttar Pradesh), dairy farmers are increasinly using barley as an energy source. Reports are a mix of 50-50 mix of corn and barley is being used in some areas. With monsoon playing traunt in North India, the avaiability of greens for dairy is a major issue.

On CBOT, corn prices moved lower by 3.7 - 5.2%. Jul contract closed at $151.25, down 3.75% against last week's close. Similarly Sept and Dec contracts were at $154.16 per MT and $158.02 per MT, losing 3.85% and 5.24% respectively against last week's close. US Gulf FOB value corrected and was down to $175/178 per MT for Jun/Aug delivery. Prices for PNW FOB also were down at $190/194 per MT. With Gulf-Japan and PNW-Japan freight rates also down to $59 and $31 per MT, deliveries to SEA region would be close to $240 per MT. DDGS prices have also decreased as the corn prices have come down. Indicative delivered value to SEA region is $240 per MT, while FOB Gulf is $171 per MT.

In the US use of silage in dairy rations has increased, which has effected the demand of DDGS, but else where in Asia, the demand is there as the Soybean meal prices are still higher.

There are reports that China has some 40 MMT of corn stocks and there could be some exports of corn in the comming time. On the other side, Brazil may be growing less corn due to higher Soybean prices and also as maize requires higher inputs, Soybean would be a better bet for the farmers. What happens in India is still to be seen as the monsoon has covered almost

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

Prices move lower, monsoon delays cause worry

Prices move lower, monsoon delays cause worry

Maize prices were stable at the market yard at Rs.8690 per MT, but prices were higher than last year by 4.6%. In the futures market (NCDEX), prices moved lower by 3-4%. July Rs.9420 per MT, lower by 4.2%; Aug Rs.9710 per MT, lower by 2.9%; Sept 9630 per MT, lower by 3.2%. Oct prices were Rs.9655 per MT. In the SPOT market though prices moved up for Nizamabad at Rs.8927 per MT, up 1.65%; Davangere Rs.8852 per MT, up 2.4%. It was only in Karimnagar prices moved lower by 0.5% to Rs.8979 per MT.

Pearl Millet (Bajra) prices moved up by 2% to Rs.8650 per MT on an average and were 17% higher than last year. Prices are similat to maize prices.

Sorghum prices corrected at Rs.10400 per MT, down 13.4% this week, are are also lower than last year prices by 1.5%. Prices are higher than maize by 16.5%.

Barley prices were down by 2.1% to Rs.7800-7850 per MT range. Prices were lower than last year by 46.4%. In the futues as well as the spot market (Jaipur), prices were lower than by 2-3.5%. Jul Rs.9000 per Mt, down 2.8%; Sep Rs.9170 per MT, down 3.35%; Oct Rs.9712 per MT. Jaipur spot prices Rs.8436 per MT, down 1.8%.

Delayed monsoon is a cause of worry in India. Sowing of major crops, inclusing rice, cotton, oilseeds (soybean), maize etc is lagging behind except in Karnataka. Rainfall this week has been reported 51% below normal and for the period Jun 1 - 17, it is 45% below normal. The World Weather Inc., in its report has cited EL NINO effect that could lower monsson in India and China region and lower grain production. There is still time for monsoon to revive over India, but some time has surely been lost.

Corn prices on CBOT were down more than 6% on an average, due to concerns on economic stability and reports that ending stocks for 2008/09 will be higher and that demand may not be as high as anticipated. July contract was down 6.13% at $157.15 per MT; Sept down 6.25% at $160.3 per MT; Dec down 5.36% at $166.76 per MT.

FOB values of corn US Gulf and PNW have falled as the CBOt prices have come down. FOB (US gulf) prices are indicated at $178-183 per MT, while fOB (PNW) are indicated at $196/200 per MT.

Freights cost from Gulf - japan have gone up by about $6 per MT to $62, while for PNW-Japan are stable at $35 per MT. Freight costs from Argentina/Brazil to China have also moved up by $4 this week to $52/53 per MT. Sorghum is indicated at $175/178 per MT for US Gulf.

DDGS prices for SEA region are down by $5 per MT to reach $245 per MT, FOB values (US Guf) are also reported to be lower at $186 per MT. The demand for DDGS in some countries is substantially higher as the SBM prices are higher and DDGS has proven to be a good, consistent product for protein.

Corn Gluten Meal prices have been rising and current FOB gulf prices are at $770 per MT. This might also be the reason for Indian CGM prices to move up the circuit.

If monsoon is delayed any longer and if EL NINO takes effect, productivity of all crops this Khariff season may be an issue.

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

Commodity prices move up in India; WASDE report released

Commodity prices move up in India

Maize prices moved up by 1.7% on an average, pan India basis at the market yard reaching Rs.8700 per MT. Prices were higher than last year by 10%. In the SPOT markets, prices moved up by 4-6%. In Nizamabad prices were Rs.8780, up 4.3%; Davangere Rs.8641, up 4.9% and in Karimnagar Rs.9019 per MT, up 5.89%. In the Futures market as well, prices moved higher by 3.5-5.5%. August maize was at Rs.10,000 per MT, up 5.5% against last week's close. Even though the sowing has started in India, monsoon is delayed which could be one reason. Also increased demand rom poultry and other users, Starch would be aiding to price increase. It is still 4 months before the new crop comes into the market and prices normally move up during this period.

Pearl Millet Prices were down by 2.4% to Rs.8500 per MT range, but 16% higher than last year. Prices are lower than maize by 2.2% and in areas like Haryana, Rajasthan, where Pearl Millet is grown, it can be repalce maize at 5-10%.

Sorghum prices made a jump of 18.4% this week, to Rs.12000 per MT range. Prices are higher than last year by 16% and also 28% against maize.

Barley prices moved up slightly by 0.6% to Rs.8000 per MT range, but were 42% lower than last year. There could be ample amount of barley in the market which would find use in dairy rations in the production areas. In the SPOT as well as the futures market, barlet prices moved lower than last week by 1-2%.

On CBOT, corn prices were lower than last week by about 4%. July corn was $167.47, Sept $171; Dec $176.21 per MT. FOB gulf was also lower to $190/192 for Jun/Sept delivery, and FOB PNW was down to $205/207 per MT for the same period. Sorghum was indicated at $182/184 per MT for the same period for FOB Gulf delivery and still at a discount on corn.

DDGS prices also moved lower in the US by about $7-10 per MT and delivered prices for SEA region were indicated at close to $250 per MT, while FOB Gulf prices were $203 per MT. One reason being attributed to the lower DDGS prices is the increase in supplies, which is keeping the prices low.

WASDE report released

WASDE report last week estimates a lower production of corn in the world (781.46 MMT) and a lower ending stocks (125.46 MMT) in 2009/10. US is expected to produce 303.16 MMT, against 307 MMT estimated last month and ending stocks will also be relativerly lower at 27.70 MMT. The lower production estimates are due to delayed plantig and thus a lower yield. Usage of corn is expected to be 130 MMT for Feed & residual, lower than last month's estimation of 133 MMT. Food seed and industrial usage is expected to 137.41 MMT wnd the use of corn for ethanol (part of industrial usage) is expected to be 104.14 MMT in 2009/10.

The report can be downloaded using the link below

http://www.usda.gov/oce/commodity/wasde/latest.pdf

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

Commodity prices move up, no respite

Commodity prices move up, no respite

Maize prices have moved up in the market yard by 1.5% to Rs.8500 range. Prices are higher than last year by 10.7%. Delay in monsoon in the coastal areas, news about farmers shifting to other crops has increased the market values.

Export continues slowly, with prices at port (east) touching $215 (taking into consideration all costs and 5% subsidy). Delivery to SEA markets is close to $245 -250 per MT. Domestic end users are facing trouble in finding good quality stocks in some areas.

Food Corporation of India, Bangalore has put out another tender for sale of 0.373 MMT of maize from its godowns in Karnataka. The last date is Jun 22, 2009. With the two tenders combined, approximately 0.7 MMT of corn would be in the market by July/August 2009.

On the futures market (NCDEX), maize prices moved higher fro, 0.7 – 2.3%. Jun corn was higher by 0.67% at Rs.9010, while July corn was up to Rs.9360 per MT, adding 1.19% August corn added 2.32% to close at Rs.9480, while Sept corn close at Rs.9600 per MT, adding 2.89%. Prices in the SPOT market also gained 1-3%. Nizamabad was up 1.4% to Rs.8420 per MT, while Karimnagar added 3.12% to close at Rs.8517 per MT. Davangere closed at Rs.8232 per MT, up 0.83%.

Pearl Millet prices are stable at Rs.8700 range and are higher than last year by 18.6%. Against maize prices are higher by just 2%.

Sorghum prices have also moved up by 1.5% to Rs.10152 per MT, but are 1.5% lower than last year. Against maize, prices are higher by 16%.

Barley prices are down by 7.8% to Rs.7950 per MT and against last year prices are down by almost 41%.

In the futures market as well, barley prices were lower than last week by 0.2 – 1.3% and within the range of Rs.9400 for July and 9840 for Oct delivery. Prices in Jaipur spot market were Rs.8764 per Mt, down 0.93% from last week.

On CBOT the corn closed higher than last week for July, Sept and Dec deliveries, gaining 1.8%. Prices were $174.79, $178.72 and $184 for corresponding month’s delivery. FOB gulf corn was indicated at $194/198 per MT, while FOB PNW was indicated at $210/213 per MT. Sorghum prices (FOB US Gulf) were indicated at $188/194 per MT, higher than last week, but lower than corn.

Corn crop progress is good and as per USDA report almost 93% was planted, as against 94% last year. About 73% of crop has also emerged, against 71% last year. Sorghum plating is about 57%, better than last year’s 53%, but almost similar to 5 year average 58%. Barley planting is at 87%, lagging behind against last year’s planting of 99% at this time. About 60% of barley is reported to be emerged as per USDA report, against 89% emerged last year at this time.

Some independent studies/reports put US corn crop at 287 MMT against 307 MMT estimated by USDA. The June report is eagerly awaited, which will probably clear some air of the production estimates. The lower production estimates are only due to late sowing of corn in three states namely Illinois, Indiana and Iowa. Average productivity is estimated at 3.77 tons/acre in the report against 3.94 tons/acre by USDA in May 2009 report.

As crude moves up, Dry Baltic Index (DBI) also moved up this week, indicating that the freight costs are going to move up. This is also an indication that the global recovery has started. Freight rates from US have been going up for couple of weeks now, US Gulf-Japan was indicated at $56.5, up from last week’s $54 per MT. Also PNW-Japan freight rate was indicated up $3 per MT to $34 per MT. Freight rates from Brazil/Argentina to China were stable at $48/49 per MT.

DDGS prices have moved up in the US and export markets due to increased demand and Soybean meal prices moving up. Farmers in SEA/Middle East/Far East/Oceania are finding it easy to use DDGS in rations and reduce cost of production of meat, milk and eggs and make products affordable. The increased availability of protein and use of diverse protein meals makes it easy to select. CNF prices for SEA region were indicated at $260, while FOB values were close to $210 per MT.

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