US corn prices stable; higher domestic demand of DDGS; Ethanol prices down in last 3 months

US corn futures have remained stable and in downtrend since late sept 2017 as the new crop was being harvested. Mar 2018 future price on Sep 29, 2017 closed at $144.71/MT and has been moving down since then and on Jan 12, 2018 closed at $139.60/MT, down 6.09%. May 2018 future price of corn on Sept 29, 2017 was $148.10/MT and possibly the highest in the period and since then has been on a decline and on Jan 12, 2018 closed at 142.75/MT, down 5.74%. FOB prices of Corn on the other hand have been moving up slightly over the 3 month period from $158/MT on Oct 6, 2017 to $163/MT, just up at 2.53%.

The Jan 12, 2018 WASDE report projects US corn production in 2017/18 at 370.96 MMT and higher ending stocks at 62.93 MMT. The world’s corn production is projected at 1044.56 MMT and ending stocks at 206.57 MMT, about 2 MMT higher than Dec 2017 projections.

DDGS prices on the other hand moved up much faster and starting Sep 29, 2017, where the FOB prices were $174/MT, they have moved up to $204/MT, up 14.70%. The increase was more pronounced in Dec as the temperatures went down, domestic demand picked up (Animals are indoors in winters and the requirement is high) and also ethanol plants were shut down for routine maintenance. Delivered prices to the region (South Asia), mainly Chittagong and Myanmar moved along the same lines and as on Jan 12, 2018, the delivered prices were indicated at $257/MT and $251/MT respectively. Bangladesh has been a leader of the pack and from Jan – Oct 2017 has imported 101,625 MT of DDGS against last year’s 29,225 MT, a 3 fold increase. The Industry in B’desh imported DDGS as it found it of value and was able to include it in the feed mix. In most cases DDGS is being used in B’desh at 5% in feed rations and also in Aqua rations at the same level. The potential is to include DDGS at higher levels in the feed formulations upto 10% in broiler and layer rations and also in Aqua feeds. DDGS can be used in Cattle rations at much higher levels of 20% of higher. Based on the protein and energy value (28% and 7% fat), it makes for a good, stable feed ingredient.

Ethanol prices in the US have also remained stable and in fact since Sept 29,2017, the FOBV prices have been down by 14.96%. The FOB prices on Sept 29,2017 were indicated t $0.421/Lit and on Jan 12, were indicated at $0.358/Liter. Brazilian Ethanol prices on the other hand have moved up by 8.34% in the period from $0.551/Lit to $0.597/Lit.

Ethanol is possibly the best octane booster the world has on the market and is also a clean burning fuel. At higher levels on blending, it would be able to reduce pollution, especially soot (small particles), which effect the lungs the most.

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

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