Stable maize prices in India; but higher than the world prices; DDGS remains a good buy despite higher prices; US ethanol prices down

Spot corn prices in India remain stable. New crop to be harvested keeps pressure on the domestic prices and buying too remains subdued. Maize (South) at Erode was indicated at Rs.13412/MT on Feb 23, 2018, down 0.65% against last week. Gulabbagh also closed lower at Rs.12300/MT.

International prices, mainly US futures were stable this week. Mar 18, $144.16/MT; May $147.39/MT; Jul $150.21/MT and Sep $153/MT. FOB prices however showed an increase and were indicated at $173/MT (US Gulf) and $181/MT (PNW). Argentine corn prices were stable this time at $173/MT, but going forward, prices are up and indicated at $178/MT (May/Jun) and expected to increase due to drought conditions prevailing that is likely to hit the corn production the hardest. Brazilian corn prices are indicated at $167/MT (FOB) and moving up by July to $172/MT. Brazil too will be experiencing delayed corn planting and that could keep the prices up. Ukraine corn is currently indicated at $182/MT and moving up over next few months to $186/MT. Indian corn is outpriced from the world market at the above prices. Considering best case scenario, Indian corn would be priced at $225/MT FOB at South Indian port and US corn is being delivered to the region below these prices. The world has ample amount of corn and as per the WASDE report of Feb 08, 2018, world production of corn in 2017/18 is expected to be 1041.73 MMT and ending stocks will be 203.09 MMT, of which 59.75 MMT will be in the US. Argentine corn production is likely to be down to 39 MMT from earlier estimates of 42 MMT.

DDGS prices were indicated higher this week on FOB basis. $220/MT US Gulf, March and down to $212/MT for May 2018. PNW Fob prices was $232/Mt (March) and down to $228/MT for May 2018. Delivered prices to the region remain stable Vietnam $243/Mt, China $240/MT, Bangladesh $268/MT and Myanmar $264/MT. Other protein prices show an upward trend particularly US SBM, which was indicated at $444/Mt (FOB), moving forward the prices are expected to drop to $427/MT (Jun). Argentine SBM currently quoted at $420/MT (FOB) is indicated at $425/MT for May and Brazil currently at $405/MT to $410/Mt in Jun. Indian SBM delivered to feed mills is at Rs.35,000/Mt ($538/MT) and DDGS could play an important role in fulfilling the gap at a reasonable price. Indian SBM (protein value) will be $11.95 (per % protein) and if DDGS delivered prices to India is considered same at Bangladesh and with additional costs of delivery to feed mill, it will be at $11 (per % protein, without any duty). As indicated, if the FOB prices are down in May/Jun, the delivered price of DDFS could come down. Currently DDGS price (per % protein) is the cheapest on FOB basis at $7.85 and moving forward in May it would be $7.57 and it does provide additional benefit of energy via the fat it contains.

US ethanol on CBOT corrected and for the 4 months futures, prices were down. Mar $0.389/Lit, down 0.88%; Apr $0.392/lit, down 0.74%; May $0.394/Lit, down 0.73% and Jun $0.393/Lit, down 0.73%.

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

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