Area under maize up; prices stable; US corn and protein prices up on higher demand; Ethanol prices down

More maize has been sown in India in Rabi Season (2017/18). Area under maize is 1.5739 mill hac, slightly higher than 1.535 mill hac last year. The area is slightly lower than the average area under maize (1.5797 mill hac), as per data available on Jan 19, 2018. The crop is still being sown in some areas, but there are areas, where maize has been replaced by Gram (Chick pea), in parts of Maharashtra and also in Rajasthan. Overall prices are more or less stable. With the NCDEX new delivery center from Erode, benchmark prices would be available for the consumers in Tamil nadu. Future price of maize for Khariff range between Rs.12900-13100/MT. Maize future (South @ Erode) closed at Rs.13670/MT, down 4.07% against last week. May Rabi @ Gulabbagh closed at Rs.11300/MT, down 2.92% against last week. Spot prices too remain stable, with the endusers not venturing to buy more than the requirements. Indian maize is outprices from the world market.

Corn futures moved up this week in the range of 1.77-2.09%, Mar $138.73/MT, up 2.09%; May $141.96/MT, up 1.69% and Jul at $145.27/MT, up 1.77%. Prices are about the same as on first week of Jan 2018. There is ample corn and this increase may be a spot, but may move up if there is more rain in Brazil and less in Argentina. US Corn on FOB US Gulf was stable at $162/MT, FOB PNW was up $4/MT to $175/MT. Delivered to SEA region, US corn would be just about $200/MT.

Plant protein prices to moved up in tandem with SBM. US SBM futures were up $15/MT and closed $331/MT. DDGS prices this week on FOB (US Gulf) were up $3/Mt to $207/MT and delivered to B’desh indicated at $263/MT and Myanmar at $258/MT, up $6/MT and $7/MT respectively. At this point on FOB basis US SBM and DDGS are at par on value per % protein basis, but DDGS has an advantage of extra energy by way of 6-7% fat. It makes sense to have a diverse feed ingredient supply to make changes based on the prices.

One reason for DDGS prices to move up in the US is the higher SBM prices and higher domestic demand of DDGS during winter, especially for cattle, which must be fed inside the sheds.

US Ethanol futures closed lower than last week by an average of 2%. Feb $0.352/Lit, down 1.84%; Mar $0.359/Lit, down 2.02%; Apr $0.367/Lit, down 1.98%; May $0.372/Lit down 1.95% and Jun closed at $0.3759/Lit. US ethanol remains the cheapest source for octane in the gasoline and can be added upto 25% in gasoline without any changes in the engine.

Amit Sachdev, Serving Agriculture and Livestock in India, Bangladesh and Sri Lanka * E Mail: asachdev@grains.org

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