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

Lower maize prices - lower feed bills for farmers; good monsoon could boost grain production and lower prices

Maize prices are down by about 2.1% this week to Rs.9070 per MT. Prices are higher than last year by 8.7%. A spike in the price was seen in the last week, which could be due to speculation on monsoon front and farmers holding stocks. As the arrivals increased, the prices have come down and GOI/IMD has also indicated a normal monsoon to 98%, which could have added to the decline in prices. Overall the prices in the state market yards moved lower. Andhra Pradesh down by 1.2% to Rs. 8587 per MT; Gujarat down 1% to Rs.9814 per MT; Karnataka stable at Rs.8200-8400 per MT range; Tamil Nadu down by 1.5% to Rs.8600 per MT; Maharashtra down by 0.5% to Rs.8700 per MT; Uttar Pradesh down by 0.25% to Rs.9650 per MT. It was only in Rajasthan that the prices moved up by 0.87% to Rs.9608 per MT.

In the future as well as the spot market, maize prices declined. May down 1.41% to Rs.8895 per MT; June down 1.36% to Rs.9055 per MT; July down by 0.96% to Rs.9270 per MT and Aug down by 1.77% to Rs.9430 per MT. In the spot markets, Nizamabad down by 0.5% to Rs.8893 per MT; Karimnagar down by 0.78% to Rs.9090 per MT and Davangere down by 1% to Rs.9113 per MT.

Pearl Millet (Bajra) prices down by 2.5% to Rs.9544 per MT, but have remained higher than last year by 5.6%. On an average pan India basis, pearl millet prices are higher than maize by 5%.  Prices in Uttar Pradesh were reported lowest at Rs.8200. Deliveres are good in almost al the major markets and specially in North India the dairy feed manufacturers are using about 10% Pearl Millet in their rations along with maize. 

Sorghum (Jowar) prices were down by 4.5% to Rs.11699 per MT, but were higher than last year by 16.3%. Against maize prices are higher by 22.5%. Deliveries were reported to be good in Maharashtra and have brought down the average price to Rs.10420 per MT.

Barley prices moved up by 4.9% to Rs.8881 per MT. Prices were higher than last year by 11.6%. Deliveries are slow which is keeping the prices somewhat higher. North India is reeling under intense heat and is likely to effect the production of grain in North India, specially wheat and other grains as there are areas that are still to be harvested.  

In the future as well at the spot market, prices have moved up. May up 3.9% to Rs.10730 per MT; Jun up 4.5% to Rs.10930 per MT; Jul up 4.94% to Rs.11040 per MT; Aug up 5.47% to Rs.11180 per MT and Sept up 4.53% to Rs.11300 per Mt. Prices in Jaipur were down by 4.23% to Rs.10173 per MT.

In the US, corn prices on CBOT declined this week. may down 2.22% to $138.96 per MT; July down 2.85% to $142.11 per MT and Sept down 3.04% to $145.42 per MT. The lower prices are due to traders going out of the market. Reports are that the cash market is firm and the farmers are not selling the stocks and are busy planting corn. As per a conservative estimate almost 50% planting could be complete in US my May 01, 2010. All this also suggests a good crop in 2010/11, which will pressure the prices.

The decrease in CBOT prices is reflected in a the FOB values as well, which are indicated at $163-166 per MT for US Gulf and $184-189 per MT for US PNW. 

There are also reports that China will be releasing 1.3 MMT of stocks in the open market to bring down the prices. China is becoming a large importer of DDGS from US, which is increasing the price of DDGS in US. In addition ethanol plants under maintenance is adding to the price increase. DDGS FOB values are indicated at $171 for Apr, $165 for May and $160  for Jun. CNF SEA are indicated at $254-260 per MT while CNF China is indicated at $247-253 per MT.

Bulk freights are lower than containers freights at this time, which in times to come will also put pressure on the containers, which may decline to come to level at the bulk freight rates.

Amit Sachdev

India Representative

U S Grains Council

E mail: usgcindia@gmail.com

Higher corn prices in future and spot markets, Corn prices move up in US

Maize prices moved up on the market yard by 4.5% to Rs.9265 per MT. Prices are higher than last year by 9.2%.  Farmers in Uttar Pradesh are paying Rs.11000 per MT for corn, delivered to farm. Prices in Andhra Pradesh have moved up by 3% to Rs.8695 per MT; Maharashtra by 1% to Rs.8743 per MT; and Rajasthan by 1% to Rs.9525 per MT and Uttar Pradesh by 0.78% to Rs.9675 per MT. Prices have slid lower in Tamil nadu by 2.5% to Rs.8725 per MT and have remained stable in Gujarat at Rs.9900 per MT .

In the futures market the prices moved up for the near months, Apr up 1.59% to Rs.8930 per MT; May up 1.29% to Rs.9025 per MT; Jun up 0.45% to Rs.9180 per MT and also for Aug up 0.15% to Rs.9600 per MT. Price for Jun contract was down by 0.1% to Rs.9360 per Mt. In the spot markets as well prices have moved up. Nizamabad up 2.65% to Rs.8944 per MT; Karimnagar up 0.37% to Rs.9162 per MT and Davangere up 1.78% to Rs.9200 per MT.

Pearl Millet (Bajra) prices have come down by 6.6% at the market yard to Rs.9787 per MT and are higher than last year by 7%. Prices are higher than maize by 5.3%.

Sorghum (Jowar) prices remained stable at Rs.12250 per MT at market yards. Prices are higher than last year by 23.8% and also higher than maize by 24.4%. White sorghum for food purpose is being traded at the market yard at Rs.17000 per MT.

Barley prices a moved up by 4.5% to Rs.8460 per MT. Prices are higher than last year by 4.8%. Prices in Gujarat averaged Rs.9130 per MT, while in Rajasthan were Rs.8110 per MT. Barley prices have also moved higher this week in the futures market. Apr up 5.5% to Rs.10140 per MT; May up 5.66% to RS.10328 per MT; Jun up 5.33% to Rs.10460 per MT; Jul up 5.09% to Rs.10520 per MT and Aug up 4.74% to Rs.10600 per MT. Prices in Jaipur spot market wereup by 6.08% to Rs.9760 per MT.

Intense heat is taking toll on the crops. It is exceptionally dry is north India and all over the plains. Temperatures are almost 6-8 deg C above normal. There are areas in Haryana and Punjab, where harvest of wheat has not been done and farmers/experts fear that the grain will be shriveled and the production will be effected. It is still debatable that such intense heat will be good and lead to early rains

On CBOT, corn prices have moved up, Apr up 3.55% to $142.11 per Mt; May up 3.16% to $146.29 per MT; Sept up 2.85% to $149.99 per MT. The increase in prices is reflected in the FOB values on Gulf and PNW basis, where prices are indicated at $166-170 per MT and $187-193 per MT respectively for the period April – June 2010. Sorghum prices on FOB Gulf basis moved up to $175 per MT.

DDGS prices have moved up due to increased demand from China. On FOB Gulf basis, prices for Apr moved up to $183 per MT, while for May at $166 ($10 higher than last week) and for June prices were indicated at $158 per MT ($12) higher than last week. On CNF basis the prices have moved up to $255-260 per for Vietnam and $251-256 for China. The freight market is stable, but last week also saw up and down. Chinese economy numbers (growth at 11%) could further increase the demand and thus the prices.   

Amit Sachdev

India Representative

U S Grains Council

E Mail: usgcindia@gmail.com

Lower maize prices can keep a check on inflation; Milk is a superior food, but not a luxury food

Lower maize prices can keep a check on inflation

Maize prices dropped by 2.1% to Rs.8864 per MT at the market yard on average. The prices is for the loose material brought by the farmers to the market yard. The prices were higher than last year by 6.2%. Stocks arrivals in the market are keeping a check on the prices. The average prices in some states however were reported up, Andhra Pradesh up by 0.45% to Rs.8441 per MT; Gujarat up 7.2% to Rs.9916 per MT; Karnataka up 1.38%, Tamil Nadu up 1.68% to Rs.8950 per MT. However prices were reported lower in Rajasthan 3.77% to Rs.9430 per Mt and Uttar Pradesh 3.35% to Rs.9600 per MT.

In the futures market (NCDEX), the prices for Apr delivery remained stable as last week at Rs.8490 per MT, while for May and June the prices dropped to Rs.8910 and Rs.9135 per MT, down by 0.44% and 0.60% respectively. However the prices for July delivery were higher by 0.42% to Rs.9370 per MT. In the spot market the prices moved higher. Nizamabad up by 2.6% to Rs.8713 per MT, Karimnagar up by 5.6% to Rs.9128 per MT and Davangere up by 0.2% to Rs.9039 per MT.

Pearl Millet prices moved up by 11.9% to Rs.10476 per MT, remained higher than last year by 15.9% and also higher than maize by 15.4%. 

Sorghum prices moved up by 2.8% to Rs.12250 per MT, higher than last year by 23.5% and higher than maize by 27.7%. 

Barley prices moved down by 1.6% to Rs.8102 per MT, but were higher than last year by 1.6%. In the futures market as well prices have fallen as new stocks have started to arrive. Apr down 4.18% to Rs.9610 per MT; May down 4.5% to Rs.9774 per MT; Jun down 4.18% to Rs.9930 per MT and Jul down 1.96%to Rs.10010 per MT. The the Spot market (Jaipur) however the prices were reported yp be higher than last week by 1.16% to Rs.9220 per MT.

On CBOT there is no major change in the prices, which were report at 1.04% higher for May at $137.23 per MT, 1.18% for Jul at $141.80 per MT and 1.32% higher for Sept contract at $145.82 per MT. The FOB values for Gulf and PNW have remained stable at $157-163 per MT and %179-184 per Mt for the period Apr - Jul. Sorghum price on FOB basis (Gulf) has remained stable at $167-168 per MT for the same period.

The DDGS have suddenly spiked due to increased demand from China and other Asian destination have followed China and increased purchases. FOB Gulf value of DDGS is $166 for Apr; $156 for May and $146 for Jun. CNF value for SEA region (vietnam) is indicated at $249-254 per MT and for China at $245-250 per MT for the same period. The price of DDGS, relative to corn is lower in Southern China and this has lead to increased buying. As container prices are higher, bulk shipments have also increased and hence increased buying.

There are reports that Chinese government will release corn in the open market, which will help stem  the increase in corn price in China, but the demand of DDGS is expected to remain strong in coming years. In addition US is expected to produce more DDGS when the E 15 (15% ethanol blend) is made mandatory in the US. 

As the Argentine dock workers strike has come to an end and South American exports surge, the freight rates have moved up. Gulf-Japan benchmark was up $3 per Mt to $70 per MT, while PNW-Japan benchmark was up $2 to $42 per MT. Argentina/Brazil - China freight rates were reported higher at $74-76 per MT.

Milk is a superior food, but not a luxury food

The recent National Sample Survey Organization (NSSO) data reveals that Indian's consume more milk and almost 15% of the monthly income on milk and milk products. And the spend increases with the increase in income. In rural India, almost 14.9% income is spent on milk and 18.3% in Urban India and in both cases it is second to cereals, which for the basic diet of Indian families.

As the demand has increased and supplies affected due to increased summer (lower production), agencies have increased the procurement price (in tune with the increased cost of production), but at the same time have increased the sale price. Nandini milk from Karnataka Milk Federation increased the prices this week, Mother dairy and AMUL had increased the prices in National Capital Region (NCR) last week.

Amit Sachdev

India Representative

U S Grains Council

Email: usgcindia@gmail.com

    

Future prices drop in India and higher corn crop weighs on US prices

Maize prices moved up in the last week of the Mar 2010 at the market yard for higher quality product. The prices were up by 5.2% to Rs.9050 per MT, and there is likely to be correction to lower prices in short term as new stocks from Bihar start to reach the market. Prices remained higher than last year by 10.2%. The average price of maize for the month of Mar 2010 was Rs.9013 per MT, 8.44% higher than Mar 2009 and about 1% lower than Feb 2010 prices.

In the states, prices were reported lower in Gujarat by 2.63% to Rs.9250 per MT; Karnataka by 1$% to 8325 per MT and Rajasthan by 2.48% to Rs.9800 per MT. Prices were however reported up in Andhra Pradesh by 0.33% to 8403 per MT; Tamil Nadu by 2.70% to Rs.8802 per Mt and Uttar Pradesh by 1.8% to Rs.9933 per MT.

In the futures as well as the spot markets prices were lower than last week. Apr delivery down 0.11%to Rs.8790 per MT; May down 0.27% to Rs.8950 per MT; Jun down 0.4% to Rs.9190 per MT and Jul down 0.21% to Rs.9330 per MT. In the spot markets, prices were stable in Nizamabad at Rs.8491 per MT and down in Karimnagar by 0.13% to Rs.8688 per MT and Davangere by 0.2% to Rs.9020 per MT.

Pearl Millet (Bajra) prices moved up by 1.4% to Rs.9362 per MT against last week. Prices were higher than last year by 6.4% and also higher than maize by 3.3%. The average price for Pearl Millet for mar 2010 was Rs.9756 per MT, 13.5% higher than Mar 2009 price, but 0.03% lower than Feb 2010 price.

Sorghum (Jowar) prices also moved up by 6.1% to Rs.11916 per MT. Prices were higher than last year by 14.7% and higher than maize by 24.1%. The average price of Sorghum for Mar 2010 was Rs.11444 per MT, 19.33% higher than Mar 2009 and 1.63% higher than Feb 2010 price.

Barley prices at the market yard moved lower by 4.2% to Rs.8231 per MT and were reported at 3.2% lower than last year in the last week of Mar. The average price of market for Mar 2010 was Rs.8509 per MT, 2.12% higher than Mar 2009 and 9.15% lower than Feb 2010 price. In the futures as well as the spot market however the prices moved up. Apr delivery up by 7.98% to Rs.10030 per MT; may up 6.4%to Rs.10236 per MT; Jun up by 5.36% to Rs.10364 per MT; Jul up 1.79% to Rs.10210; Aug up 1.27% to Rs.10300 per MT and Sept up by 2.59% to Rs.10428 per MT. In the Jaipur market price was up by 1.11% to Rs.9094 per MT.

Corn prices in US were down substantially as the planting intentions 2010 report came out. On CBOT, corn prices for May delivery was down 3.25% to $135.81 per MT; Jul down 3.26% to $140.14 per MT and Sept down 2.90% to $143.92 per MT. FOB values were reflective in the drop in prices. US Gulf indicated at $158-163 per MT and PNW $181-187 per MT for the period Apr - Jul. Sorghum prices also were reported lower at $167 per MT for the same period and higher than corn.

DDGS prices were relatively stable on FOB basis and indicated at $152 per Mt for Apr; $146 for May and $144 for Jun delivery. CNF values for Vietnam were indicated at $242-247 per MT for May - Jun and to China $238-243 per MT. The DDGS production is somewhat lower as many ethanol plants are under maintenance and the margins on ethanol are lower.

The export demand is good, and end users in Asia are looking to move to bulk shipments as per reports as the container freight rates are much higher than bulk and the difference is as higher as $30 per MT, which makes a huge difference.

USDA’s released its 2010 Prospective Plantings report last week, based on farmer survey, which suggests that U.S. corn acreage for 2010 will be 88.8 million acres, up 3 percent from both 2009 and

2008. The report also suggests that US farmers will plant 3.3 million acres of barley, down 8% from 2009. The report also suggest lower land under Sorghum by 4% to 6.4 million acres. The area under corn may also go up if the prices of inputs and output remains stable.

Amit Sachdev

India Representative

U S Grains Council

Email: usgcindia@gmail.com