Maize prices remain down and may remain so in the short term

Maize prices remain down and may remain so in the short term

Maize prices moved up slightly at the market yard by about 2% to Rs.9400 ($205) per MT on an average which may not be a correct picture as prices in major markets were down. Prices are higher than last year by 15%. While prices in Andhra Pradesh and Maharashtra were stable as last week and close to MSP levels, prices in Karnataka moved up by 2.55% to Rs.8610 ($188) per MT. In other regions, prices moved down, Rajasthan down 6% to Rs.9992 ($219) per MT; Tamil Nandu down 1.1% to Rs.8530 ($187) per MT and Uttar Pradesh down 7.4% to Rs.9433 9$206) per MT. There are quality concerns and that could be one reason for prices to at this level. Reports also indicate that at some locations, lower quality maize is being sold at prices lower than MSP and hence this disparity in prices. Endusers, specially poultry feed manufacturers and integrators ready to pay for quality, expect to pay a higher price.

Futures market reflect the higher corn availability over the next few months and hence the prices are down. Jan down 1.6% to Rs.9150 ($200) per MT; Feb down 1.63% to Rs.9320 ($204) per MT; Mar down 2.46% to Rs.9480 ($207) per MT; Apr down 2.8% to Rs.9660 ($211) per MT. May contract was close to Rs.9670 ($211) per MT. In the spot market prices in Davangere were up by 2.79% to Rs.9149 ($200) per MT and at othet spot markets prices moved lower or remained stable. Nizamabad stable at Rs.9163 ($200) per MT and Karimnagar down by 3.87% to Rs.8800 ($192) per MT and Davangere up by 2.79% at Rs.9149 ($200) per MT.

Pearl Millet prices moved up by 1% to Rs.10257 per MT at the market yard, about 21% higher than last year at the same time. Prices are about 8.3% higher than maize.

Sorghum prices are down by 6.8% to Rs.10942 per Mt, reflection good availability. Prices are higher than last year though by about 15% and against maize by 14%.

Barley prices moved up by 7.6% at the market yard and are higher than last year by 7.7%. On the futures market (NCDEX), prices were up by 1-1.5%. April up 1% to Rs.10310 per MT; May up 1.4% to 10488 per MT. In the spot market (Jaipur) prices are higher by 0.5% to Rs.9500 per MT.

Food inflation for the first week of Jan 2010 may be down to 17.28%, which may be a good sign, but overall inflation for Dec was up to 7.31%. Inflation rate for Nov 2009 was only 4.78%. The food inflation is expected to be down in the next few months as the new crop (Rabi) is expected, but as per report, wheat area is don and so in the Rapeseed/Mustard area, which would be reflected in the production and prices. Overall area under coarse cereals and oilseeds is down and is up slightly for pulses.

In the US market, prices are down substantially, showing an over supply situation. The three contracts the prices were down by close to 12%. mar down by 12% to $145.35 per MT; May down 11% to $150 per MT and Jul down 11.16% to $154.08 per MT. The drop in prices is reflected in the FOB values as well. FOB US Gulf was indicated at $175 per MT for Feb and $173 for Mar, down almost $19 per MT against last week. FOB PNW was indicated at $195 for Jan/Feb and $198 for Apr, against down by +$20 per MT.

Sorghum prices also moved lower with corn and FOB US Gulf was indicated at $180/182 per MT for Feb/Apr.

DDGS prices (FOB basis) US Gulf was inducated at $166 per MT for Feb and $155 per MT for Mar. CNF prices (SEA region - Vietnam) are indicated at $246 per MT. The prices are little higher due to the higher freight at container costs in US.

Freight markets were down down slightly across the board. Gulf-japan benchmark prices were down by $2 per MT to $70 per MT and PNW-Japan was also down by $2 per Mt to $40 per MT.

Amit Sachdev,

India Representative,

U S Grains Council

Email: usgcindia@gmail.com