Ethanol for air pollution mitigation; India harvests maize, prices up; US corn cheaper; DDGS prices drop

As the temperatures move up and Air quality deteriorates as higher temperature, sunshine, actually aid ‘Chemical Reactions’ and create a kind of “gas Soup” which combines with the particles, creating a smog of ground level ozone gas. This makes breathing difficult, especially for those who have respiratory ailments and also for Children and the elderly. While it may not be possible to reduce temperature, but it is possible to reduce the emissions from the cars, by using clean burning fuels and additives like ‘ethanol’, which is being used not only in the US, but also in Brazil, Philippines, Peru and many other nations. Based on the current price of Rs.39/litre ++ (EX sugar mill in India) and additional domestic transport, it is delivered to the a depot of Oil Marketing Company (OMC) at Rs.42/litre is mixed in gasoline, at 5-10% as and when available, it finds its way to the pump and finally the car. India’s demand of gasoline is about 28 billion litres, increasing at 8-10% per year and the demand of gasoline for E -10 blend (10% ethanol and 90% gasoline), would be 2.808 billion litres and the sugar industry has been able to offer 0.81 billion litres in the sugar year 106/17 (ends Oct 2017) which effectively would mean a blend for 2.88% if all gasoline gets blended with ethanol). In some states, it may be higher and is some ZERO as no offer has been received. The current price of US Ethanol is $620/MT and with duty paid it would cost Rs.32.44 per litre, With additional cost of Rs.5 to cover denaturing, transport etc it would cost Rs.37.44 (Max) per litre to the deport.  A clean burning additive that is cheaper and the reduced prices can also be passed on to the consumer. Other nations have been using the clean burning alternative fuel, including ethanol for many years and it has proved to be not only an effective tool to mitigate Air Pollution, but saves money to the consumers by reducing the cost of gasoline and keep the engine clean.

Corn sowing has started in the US and about 6% corn has been sown. It be behind 5-year average, but is just the start and the planting will catch up. US prices were down this week in the range 3.14 – 3.81% on future prices as the market was under pressure due too developments in Brazil, the good weather which is making sure the corn gets planted. may corn was down 3.77% top $140.54/MT; Jul down 3.81%to $143.14/MT; Sept down 3.48% to $146.06/MT and Dec down 3.14% to $150.38/MT. Lower prices got reflected in the FOB prices and US corn was indicated at $156-159/MT (FOB US Gulf) and in the range of $170-174/MT (PNW). It is being quoted as delivered to China at $200/MT, Argentine corn is priced at $153-158/MT (FOB) and Brazilian at in the range of $156-162/MT, Its delivered price to China is about $207/MT. Similarly Black se corn at this time is being at $164-168/MT and may be quoting at $190/MT delivered to China (China is being consisted a point in the Asia region and trying to set a benchmark price around it for the Asian region)..

While some of the ethanol plants are closed for annual maintenance and that should make DDGS prices higher, but the prices have remained stable and DDGS is still priced at 92.3% of corn. It is still the cheapest source of protein (on per percent basis), which US SBM at $7.18 per percent protein and US DDGS at $ 5.14 per percent protein. The difference is also higher this week against last week. US DDGS is indicated $144/MT (FOB) for 28% protein and US SBM at $345/MT for 48% protein.

Maize harvest in India continues and stocks is arriving at the market yards, but the prices remain high. Prices in Bihar at Gulabbagh came down by 0.75% to Rs.13300/MT and delivered prices of corn from Bihar to SouthIndia quoted at Rs.15800-16200/MT. Prices in other locations including Jalgaon up 0.88% to Rs.14375/MT; Nizmabad up 2.18% to Rs.15225/MT; Davangere up 0.46% to Rs.16300/MT; Sangli up 0.48% to Rs.15600/MT. Future prices too have shown an upward trend May Rabi maize up 3.71% to Rs.13700/MT; Jun Rabi up 4.57% to Rs.14180/MT; July rabi up 4.03% to Rs.14470.MT and Aug Rabi up 3.86%t o Rs.14810/MT. This is up when the Rabi harvest has just started.

The benchmark freight rates showed a upward trend this week. Benchmark US Gulf-Japan indicated at $40.5/MT; PNW-Japan $22/MT; US Gulf-China $39.5/MT; PNW-China $21/MT; Argentina-Brazil to China ranged between $40.75-31.50/MT.

Amit Sachdev, USGC Representative for India, Bangladesh and Sri Lanka * E Mail: usgcindia@gmail.com

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India maize prices stable, US corn prices down; DDGS is a cheapest protein source, prices could move lower

Even though arrivals have started the prices of Indian maize have tended to remain up. The future prices for Apr (Rabi) up 2.31%to Rs.12850/Mt, Apr (Khr) up  2.56% to Rs.14440/MT; May (R) up1.92% to Rs.13300/MT; Mat (Khr) up 2.61% to Rs.14540/MT; Jun (R) up 0.68% to Rs.13340/MT; Jun (Khr) up 2.66% to Rs.14640/MT; Jul (R) up 2.36% to Rs.13460/MT and Jul (Khr) up 2.72% to Rs.14740/MT. Aug (R) closed at Rs.13460/MT and Aug (Khr) at Rs.14840/MT. In the spot market to, prices  were mixed with Jaggaon at Rs.14250/Mt down by 2.40% and in Gulabbagh down by 0.34%to Rs.14500/MT. In Davangere prices were up by 0.31%  to Rs.16200/MT and also in Sangli up by 1.30% to Rs.15600/MT. Prices in Nizamabad were Rs.14766/MT. In Hyderabad region delivered prices were being quoted at Rs.15300-15500/MT delivered to feed mill in the region.

In the US while there was an initial uptrend in corn prices due to a lower expected crop in 2017/18 planted in 90 mill acres that would produce some 365 MMT of corn, which still would be good crop. But in the interim the demand in US is also likely to increase for feed and ethanol use which could keep the prices stable. But there is a also a good South American crop and higher world ending stocks that could keep the prices down. CBOT closed lower against last week, may down 1.32% to $141.49/MT; Jul down 1.18% $144.56/MT; Sept down 1.21% to $147.47/MT. Dec 2017 corn closed at $151.33/MT. US corn on FOB basis (US Gulf) was quoted at $157-160/MT (Apr-Jun delivery) and PNW at $173/MT. US DDGS is still priced at about 93% of the corn on FOB prices, $146-148/MT (US Gulf) and $164-166/Mt (PMW). Delivered prices to Indonesia were indicated at $175/MT; Vietnam $185/MT and China $177/MT. Other corn co-product – CGM was priced at $595/MT. DDGS is the cheapest protein available on FOB basis at $5.25 per percent protein and gives addition 7% fat, which needs to be valued. DDGS could be expected to remain stable or even go down as US farmers will move their cattle out in pastures in spring.

The benchmark freight rates showed a decline this week. Benchmark US Gulf-Japan indicated at $39/MT; PNW-Japan $21/MT; US Gulf-China $38/MT; PNW-China $20.25/MT; Argentina-Brazil to China ranged between $38.25-29/MT.

US ethanol prices moved up on higher demand and somewhat lower production duet o seasonal maintenance of the plants. May up 0.62% top $0.431/litre; Jun up 0.25% to $0.425/litre; Jul down 0.75% to $0.42/liter and Aug closed this week at $0.416/MT. With USD-INR exchange rate at Rs.64.7623 to a dollar, it is cheaper to import these days as it was in last year. India has also removed the tariff on raw sugar for a limited period, and 0.5 MMT of raw sugar can be imported until Jun 12, 2017. This is primarily aimed to keep some of the plants in port areas running and keep sugar prices in check in some regions.

Amit Sachdev, USGC Representative for India, Bangladesh and Sri Lanka * E Mail: usgcindia@gmail.com

 

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US farmers to plant less corn, more Soy; India maize prices stable, new arrivals in Bihar; DDGS prices down, value for money

The planting intentions report from US was out on Mar 31, 2017. Farmers intent to plant little less corn in 2017, 90 million hac against 94 mill hac planted in 2016 – down 4.25%. Farmers intent to plant more Soybeans in 2017, 89.5 mill hac, up from 83.4 million hac planted in 2016, up 7.31%. Wheat planting too is expected to be down to 46.1 mill hac, from 2016 sowing on 50.20 mill hac. Cotton too is expected to be up at 12.2 mill hac from 10.07 mill hac. As farmers get on the fields and the weather permits we will see how these numbers unfold over the next few weeks.

In India, maize arrivals have started in Bihar, the main Rabi maize producer. Prices where were ruling at Rs.15500/Mt on Spot about a month back (feb 24, 2017)  are now at Rs.14550/MT at Gulabbagh (NCDEX Spot) down 6.13%. In last one week however prices moved up bit up 0.34%. Open market price would at Rs.12000-12500/MT, which for a new high moisture corn would be fair price. Prices are fairly stable over one month at other locations, demand continues, Jalgaon Rs.14600/MT, up 2.46% over one month; Davangere and Sangli stable at Rs.16150/MT and Rs.15400/MT respectively.

US Corn Futures - Dec'16- Mar'17Prices of corn in the US continue to be stable for last three week, though in the first week of March there was a price spike, which later stabilised. On Mar 31, 2017, Corn on CBOT closed lower than last month end, but higher than last week. May $143.37/MM up 2.20% against last week; Jul $146.29/MT up 2.16% and Set up 1.12% to $149.28/MT mainly due to lower planting intentions for corn. Early in the week, the prices were down as the prices is Argentina/Brazil is keeping the pressure. FOB prices were indicated at $160/MT (US Gulf) and 4170/MT (PNW). Argentine corn on FOB basis indicated at $163/MT; Brazilian at $162/MT and Black Sea at $170/MT.

On the protein side, DDGS prices on FOB basis have declined in this last one month and currently DDGS is priced at $146/Mt (US Gulf), 7% down over the price indicated on Feb 24, 2017. Delivered price to Vietnam at $185/MT and to China at $178/MT. With rupee appreciating 2.82% in last one month and trading at Rs.64.7236 to a dollar, US DDGS is value for money and could be delivered to an Indian port in West coast at Rs.12350/MT at port. With clearing costs and transport to a feed mill, it should cost no more than Rs.14500/MT (Duty free) and with 28% protein, it would be possibly one of the cheapest protein source and will provide additional 7% fat which will need to be valued. At this time DDGS is priced at 91.25% of corn price on FOB basis. In most of Feb it was 94% of the corn value (FOB) and prices have dipped considerably.

US ethanol prices in one week moved up on CBOT. Apr $0.427/liter; up 4.81%; May $0.4283/Liter, up 3.52%; Jun $0.4243/Liter, up 2.3%; Freight rated Dec'16-Mar'17Jul $0.423/Liter, up 2.24/MT. But with the rupee appreciating 0.88% in this one week, the change in ethanol prices is not much.

Freight rates have continued to move up consistently is last quarter. Benchmark US Gulf-Japan indicated at $39.25/MT; PNW-Japan $21.25/MT; US Gulf-China $38/MT; PNW-China $20.5/MT; Argentina-Brazil to China ranged between $38.25-29.25/MT.

Amit Sachdev, USGC Representative for India, Bangladesh and Sri Lanka * E Mail: usgcindia@gmail.com

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India maize price stable, US futures up, FOB down; Ethanol & DDGS are the best buys; India Barley prices up

Reporting from Washington Dulles Airport.

India’s maize prices remain stable, but higher than the world market.  Spot prices in Nizamabad up 1.51% against last week to Rs.14694/MT; Davangere up 1.42%to Rs.16025/MT; Sangli down 1% to Rs.14800/MT and Gulabbagh up 0.46% to Rs.16500/MT. Overall area under Rabi maize is also up, expect a good crop, but a major drop is prices may not be there. Future prices though have shown a decline. Jan down 0.71%to Rs.14030/MT; Feb down 0.76% to Rs.14370/MT; Mar down 1.21% to Rs.14650/MT; Apr stable at Rs.14930/MT and May up 0.33%to Rs.15210/MT.

Mar corn contract Jan 13, 2017While future corn prices have moved up a bit and Mar corn closed 0.11% higher at $141.09/MT; May up 0.22% to $143.85/MT and Jul up 0.27% to $146.61/MT, US FOB prices remain competitive and were down by a $1/MT, indicated at $166/MT (US Gulf) and $178/MT (PNW). The biggest drop though has been in the DDGS prices this week and a drop of $9/MT to $139/MT (US Gulf) and $4/Mt drop to $172/MT (PNW) indicative prices Delivered prices to the main destination in Asia down as well and CNF price to Vietnam dropped $6/Mt to $180/MT and to China by $10/MT to $175/MT. DDGS remains the most optimally priced plant protein today and there is plenty available in the US and at this prices, livestock farmers can take advantage to reduce the feed costs.

India’s barley prices in the last three months have risen by almost Rs.1820/MT, an increase of 11.22% and currently spot prices Spot Barley Prices in India in Rs./100 kgare ruling at Rs.18030/MT at Jaipur. India has imported some stocks from Argentina and France and much cheaper prices (Rs.14000-15000) delivered to Kandla in bulk in the last few months.  US barley prices are currently ranging between $185-190/MT.

US ethanol prices this week have come down and are very competitive in relation to other origins. US ethanol on CBOT for Feb contract was down 5.57%to $0.39/liter; Mar down 4.81% to $398/liter; Apr down 3.61% to $0.403/Liter and May down 2.23% to $0.407/Liter.

Bulk freight rates have been moving up slightly and steadily and the benchmark US Gulf-Japan freight rate was indicated at $35/ MT and PNW-Japan at $18/MT; US Gulf-China quoted at $34/MT and PNW-China at $17.25/MT. Argentina/Brazil to China indicated in the range of $31.50-22.5/MT.

Amit Sachdev, USGC Representative for India, Bangladesh and Sri Lanka * E Mail: usgcindia@gmail.com

 

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Maize prices stable in India, down in the US; Maize area up in Rabi; DDGS is an economical feed ingredient

US Corn and DDGS prices Oct - Dec 2016The last quarter of 2016 with the new crop harvest in India and the US saw increased availability in both the countries, but also several issues.

In the US the harvest was good, productivity excellent, much higher than expected, which led to lower prices in Nov 2016 and by early Dec 2016 the FOB price of US Corn (US Gulf) was down to $152/MT. Since then there has been an improvement but still prices are much lower at $166/MT US corn is possibly the cheapest corn available in the world market. South America was facing a problem of lower moisture and planting, which made exports from US viable. US DDGS production has been good, low corn prices made sure that ethanol plants were running smoothly. Even before the Oct harvest US DDGS was a competitive product and from Jan – Oct 2016, the world had traded 9.6 MMT of DDGS. In the Indian neighbourhood, Myanmar imported more than 18000 MT (2700 Mt in Jan – Oct 2015); Bangladesh imported 32000 MT (11000 MT in Jan-Oct 2015). New Zealand imported 71,000 in the period Jan – Oct 2016 as an ingredient to feed its animals, up from 27,000 MT purchased in Jan – Oct 2015; Malaysia purchased over 40,000 MT. By the end of the year DDGS prices in US is down to $153/MT (US Gulf) and DDGS is being delivered to Vietnam at $197/MT.

Indian corn prices Oct - Dec 2016Indian maize production was delayed, even though the area under maize was reported to be higher, there was some damage reported to to delayed rains and rains diurnal harvest. As arrivals started late in Oct, prices have been fairly stable since then in some of the major production centres including Nizamabad, Karimnagar and Sangli at 14500-15000/MT. Arrivals were good in Madhya Pradesh which is a new centre of maize production in India and prices have been Rs.13700 – 14000/MT at the various market yards. Delivered prices to feed mills/starch plants has been close to Rs.15500/MT. Prices in South India however have been ruling much higher continued to be high even after the harvest. Maize was delivered to South India’s primary poultry production centre in Coimbatore at prices between Rs.16500 – 17000/MT in Nov and even early Dec.

The overall area under maize from Rabi sowing is higher than last year by 0.087 mill hac (as on Dec 30 2016) as per the report available from Ministry of Agriculture. Area barley is also higher at 0.079 mill hac (up 0.093 mill hac). However area under Sorghum and Ragi is down. Overall area under coarse cereals is down at 5.221 mill hac (from last year’s 5.629 mill hac). This could be due to demonetisation or just that the there are areas where soil moisture has been low. Overall area under Rabi crop is however higher at 58.287 mill hac, with more area under Pulses and Oilseeds (helped by higher Minimum Support Price announced by GOI).

The poultry industry in India saw an erosion of profits post demonetisation and prices of live chicken dropped to a low of Rs.37/kg. which led farmers and companies to try to consolidate their positions and to get into the mainstream, connecting with the consumers direct. While there are still hiccups, the prices are good, but the losses cannot be recovered and the industry must look at ways and means to deliver chicken and eggs at a reasonable price to the consumer so as the demand remains good. Higher prices also erode demand.

The last quarter also saw the freight prices move up with the benchmark US Gulf-Japan freight moving to over $37/MT and later stabilising at $35/MT. USGulf – China also breached the $35/MT mark in Dec and later settled at $34/MT.

The ethanol market in the US remained strong, prices stable. but the last week of Dec saw prices move up and current prices range between $0.425/liter in Jan 2017, down to $0.413/liter in April 2017. India has imported good quantity of ethanol from US and these imports are for the chemical industries to make specialised chemicals for various uses. Indian ethanol production via molasses is likely to be limited due to less of sugar cane production in 2016 after two years of drought conditions in major sugar cane production areas including Maharashtra, Karnataka, Andhra Pradesh and Telangana. The production is expected to be higher in Uttar Pradesh, but not enough to fulfil the demand or reduction in production.

Hoping the new year of 2017 will be good for agriculture and the end user industries at large.

Wishing every one a very HAPPY and A PROSPEROUS NEW YEAR 2017.

Amit Sachdev, USGC Representative for India, Bangladesh and Sri Lanka * E Mail: usgcindia@gmail.com

 

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India maize prices move up; US corn prices also up; DDGS a good buy; Brazil buys US ethanol to fix pollution

India corn prices have moved up in all markets. Arrivals in some markets have come down, like in Nizamabad, while Some markets of Madhya Pradesh have gone up as the harvest is good there. Average market prices some states market yards as on Nov 18, 2016

Karnataka Rs.13500 – 14750/MT Ranebannur, Haveri, Davangere, Shimoga, Chitradurga, Bagalkot)

Madhya Pradesh Rs13000-13650/MT (Chindwara, Shore, Seen, Chapra)

Telangana Rs.13500-13750/MT (Badepalli, Sidipet, Nizamabad) (Medium quality grain with about 3-4% back material available).

The move prices are for loose material.

Spot prices not he NCDEX ports have moved up. Nizamabad up 0.29% to Rs.14425/MT; davanagere up 1.73% to Rs.16150/MT; Karimnagar up 1.67% to Rs.14437/MT; Sangli up 3.45% to Rs.15000/MT and Gulabbagh up 3.07% to Rs.16090/MT. Future price too have tended to move upNov up 4.59% to Rs.14590/MT; Dec up 2.78% to Rs.14440/MT; Jan 2017 up 2.64% to Rs.14750/MT; Feb up 2.93% to Rs.14750/MT and Mar up 2.93% to Rs.14750/MT. Overall sowing of maize in Rabi season as on Nov 18, 2016 was reported at 0.316 mill hac as against 0.42 mill hac last year. About 21% of the total area has been planted so far and with GOI allowing use old denomination notes to purchase seeds and inputs from government run shops, the sowing may speed up.

In the US the prices moved up slightly on higher export numbers. There have been some downtrend as the dollar continues to become stronger. Harvest is ending soon and that higher prices would certainly help the farmers. CBOT closed a little higher on Nov 18, 2016, Dec up 1.53% to $135.98/MT; Mar up 1.26% to $139.13/MT and May u p 1.01% to $141.72/MT. FOB prices more or less remained stable at $162/MT (US Gulf) and $173/Mt (Fob PNW). Argentine corn is indicated at $173/MT and Brazil at $187/MT (FOB at respective ports). Weather has turned in Brazil and sowing is moving at a faster pace.

DDGS continues to be a good choice as a feed ingredient and on protein basis a cheaper choice. US SBM is indicated at $360/MT for 48% protein ($7.5 per unit of protein) and US DDGS (corn) is priced at $170/MT ($6.07 per unit of protein). Indian SBM spot price is indicated at Rs.24000/MT at Indore and delivered to a feed miller would cost Rs.28000/MT for 44% protein (Rs.636 per unit of protein). US DDGS is reaching the region (SEA) at a price of $197-203/Mt depending on the destination, making is a much cheaper source of protein in other markets.

Ethanol continues to be produced in the US and it is expected that the production could go up in 2017, which would also mean more DDGS will become available. Overall the Ethanol prices have gone up slightly this week. Dec up 3.03% to $0.414/liter; Jan 2017 up 2.32% to $0.396/liter; Feb 2017 up 01.58% to $0.392/Liter; Mar up 1.56% to $0.395/liter. Brazil continues to buy US ethanol for blending in its gasoline supply to combat air pollution.

Amit Sachdev, USGC Representative for India, Bangladesh and Sri Lanka * E Mail: usgcindia@gmail.com

 

 

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Downtrend in US corn prices; India corn prices down at Market Yard, supplies slow; DDGS prices down in US

What a week it was. Two major historical events in the two largest economies of the world. While the world waited for the execution results on Nov 08, 2016, Just about time, voting started for the presidential elections started in US, India’s Dec Corn - Nov 11, 2016currency was demonetised, the world was shocked. But eventually it sank in that it is good move and weed out corruption and black money in the system. While India slept or many may have remained awake, on the same day on the other side of the world an unexpected win. It is taking time to sink in and the markets were in turmoil due to the two events on two sides of the globe.  But eventually all will be settled and it would be business as usual.

In the US, Nov 7, 2016 report was well received. The harvest was progressing well, export expected to high and Dec 2016 corn prices closed a bit higher on expectations of good election results. The final tally $139.46/Mt on CBOT. The unexpected turn on events on Nov 08, 2016 and the market was down, closing at $134.14/MT and recovered bit in the next day, but closing lower at  $133.93/MT, down 2.41% against last week’s close. Mar 2017 corn down 2.35% at $137.39/MT and May 2017 down 2.36% to $140.31/MT. The downtrend was reflected in the FOB prices at Corn on FOB basis US Gulf was indicated at $162/MT and at PNW $173/MT.

In India the arrivals of corn were steady, but post Nov 08, 2016 demonetisation move the arrivals seem to have come Price comparison - Corn Nov 4 - 11, 2016down, but at the same time, prices have also come down and large denomination currency is not available for cash transactions at the market yards across the country.  The situation is likely to ease within a month, but there could be delay is sowing as the farmers may not be able to get the cash on time. The spot prices were a mixed bag, down in Nizamabad by 0.12% and also in Karimnagar by 2.24% respectively to Rs.14383/MT and Rs.14200/MT, but moved up in other locations. Davangere up 2.42% to Rs.15875/MT; Sangli up 3.57% ti Rs.14500/MT and Gulabbagh stable at Rs.15610/MT. Future prices also closed lower only for Nov 2016, down 1.48% to Rs.13950/MT and higher for all other contracts. Dec up 1.22% Rs.14050/MT; Jan up 1.48% to Rs.14370/MT; Feb up 2.07% to RS.14330/MT and Mar up 1.49% to Rs.14330/MT.

DDGS remains a good buy, remains cheaper on per protein basis. On FOB basis, DDGS costs $5.78 per percent protein ($162/MT US Gulf) and SBM is worth $7.68 per percent protein ($369/MT US Gulf). It mist be noted that DDGS is not a complete replacement of corn or SBM in rations, but can be used as an additional ingredient to manage costs and replace part of corn and soybean meal. Delivered price of DDGS to SEA region is $204/MT CNF Vietnam and $193/MT CNF China.

Ethanol prices too moved lower slightly in the US and Dec contract was $0.402/liter, down 1.81%; Jan $0.387/Liter, down 2.14%; Feb 0.385/liter, down 2.48%; Mar $0.389/Liter, down 2.58%. More ethanol plants are coming back on track after the maintenance. The latest WASDE forecast increased corn used for ethanol to 134.62 MMT, higher than 127.66 MMT used in the last marketing year.

Bulk freight rates have been moving up slightly and steadily and the benchmark US Gulf-Japan freight rate was indicated at $32/ MT and PNW-Japan at $17.75/MT; US Gulf-China quoted at $30.50/MT and PNW-China at $16.75/MT. Argentina/Brazil to China indicated in the range of $29-19.50/MT.

Amit Sachdev, USGC Representative for India, Bangladesh and Sri Lanka * E Mail: usgcindia@gmail.com

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US corn prices down, India maize prices stable; Delhi chokes, ethanol blending with gasoline can help

US corn harvest is progressing fast and about 75% of the corn crop was harvested as on Oct 30, 2016 as per the USDA report. The next report will be out on Nov 07, 2016 and hopefully by them, expectations are that the about 85% of the corn crop would’ve been harvested. Good weather and a better harvest weighed on the prices this week and it was kind of a sell of this week. Dec Corn was down to $136.29/Mt in midweek (Wednesday, Nov 02, 2016) before climbing up again and closed at 137.24/MT, but still lower than last week by 1.80%. Traders are of the view that corn would stay close to the threshold of $3.50/bushel ($137.78/MT).  Mar corn down 1.60% to $140.70/MT and May also down 1.40% to $143.69/MT.

Exports of US corn remain strong as the Brazilian corn prices remain high. US corn is most competitively priced and likely to remain so until early next year. On FOB basis corn was indicated at $169/MT (US Gulf) and $176/MT (PNW). DDGS prices too have been good, though higher than last two weeks by atlas $10/Mt on FOB basis, it remains good buy for the poultry, dairy and other livestock sectors. On FOB basis it is indicated at $183/MT (US Gulf) and $188/MT (PNW). Delivered price to Vietnam and China are $202/MT and $193/MT respectively.

US sorghum too is priced competitively and is trading below corn on FOB basis at $165/MT. It can used in poultry/dairy feeds on them same lines as corn as US Sorghum is ZERO tannin. For those countries which do not allow GM corn imports, Sorghum offers a solution that can be used as a feed ingredient of choice.

India’s maize harvest is also progressing slowly and gradually. As the sowing was staggered, the harvest too will be. Prices remain stable at the market yards. Telangana ranging between Rs.12450-14300/MT; Andhra Pradesh Rs.13100-15000/MT; Maharashtra Rs.10610-15000/MT and Madhya Pradesh Rs.10600-13650/MT. The prices are for lose material at the market yards. Spot prices on NCDEX portal are mixed. Nizamabad down 1.23% to Rs.14401/MT; Davangere down 0.80% to Rs.15500/MT; Karimnagar down 0.85% to Rs.14525/MT, Sangli up 0.22% to Rs.14000/MT and Gulabbagh up 0.08% to Rs.15602/MT. The arrivals are likely to remain strong, but the quality inion irrigated areas may be suspect. There are issues with kernel weight in many locations and only time will tell. Late sown corn is expected to be better as it may not have been affected by dry weather conditions to that extent.

US ethanol prices too have come down this week, and more ethanol was manufactured, margins were better. US ethanol, Dec 2016 contract down 2.15% to 0.41/Litre; Jan 2017 down 2.16% to $0.396/Litre; Feb 2017 down 1.65% to $0.395/Litre and Mar down 1.76% to $0.399/Litre. For the last one week the National Capital Region (NCR) comprising of Delhi, Gurgaon, Ghaziabad and Faridabad has had a very high Air Quality Index and most times have been under RED zone. Schools have been closed. While Stubble (Agri waste) burning is one cause of the bad air quality, there are other reasons as well In the last week, therefore more vehicles on the road and that did cause higher pollution. Use of ethanol as a oxygenate in gasoline/petrol is one tool that can help mitigate the higher pollution levels. It does help in reducing particulate matter. Ethanol can replace other aromatics, burns cleaner and reduces the micro particles, which are a cause of concern and do effect the health of the people. Advisories have been issued for children to not to go out to play and for elders not to go out for mornings walks. India too has a biofuel policy and the target was to blend ethanol at 5%, but only only 3.5% blending could be achieved. Target is 10%. In 2016/17 as the local production will be less and gasoline consumption will increase, the blending %age could go down to 2.5%.

Amit Sachdev, USGC Representative for India, Bangladesh and Sri Lanka * E Mail: usgcindia@gmail.com

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Maize harvest begins in India; quality is an issue; 70% US corn harvested, price up; DDGS remains a good buy

Wishing everyone a HAPPY AND A PROSPEROUS DIWALI

Maize being dried on the roads in Nizamabad - small cobs - Oct 22, 2016Maize harvest continues at a fast pace in Telanagana, Karnataka and arrivals are somewhat good, but the quality of the produce is inconsistent. The farmers in non-irrigated areas had experienced dry patches during the monsoon season which severely affected the grain setting as the temperatures were high. Post that, there have been damage to the crop due to excessive rains. Farmers have complained of severe losses in corn belts of Telangana and Andhra Pradesh. While in the irrigated areas, the productivity has been comparatively better at 0.80 MT/Acre. In non-irrigated the productivity in in the range of 0.23 – 1.41 MT/Acre. (Only one farmer in group of 14 has a higher productivity). The overall average productivity of 0.597 MT/Acre or 1.47 MT/hac of the surveyed area. Even though the price is higher than the Minimum Support Price (MSP) of Rs.13650/MT, the cost of production in most cases has been much higher.

Prices on the futures (NCDEX) were up for the next 4 months. Nov up 1.77% to Rs.13810/MT; Dec up 2.51% to Rs.13910/MT; Jan 2017 up 3.24% to Rs.14010/MT and Feb 2017 up 3.98% to Rs.14110/MT. Spot prices though moved lower than earlier week, but still remained higher than the MSP. Nizamabad down 0.47% to Rs.14581/MT; Davangere down 10.20% to Rs.15625/MT; Karimnagar down 6.98% to Rs.14650/MT; Sangli down 2.57% to Rs.13969/MT and Gulabbagh down 1.24%to Rs.15590/MT.

 In the US 70% of the corn is harvested and the conditions remain favourable for a bountiful crop. The prices moved up this week from harvest lows in earlier weeks primarily as exports have been good and the South America is facing issues with planting due to excessive rains. US corn Dec 2016 was up 0.71% to $139.76/MT on Friday close. Last month (Sept 30,2016), Dec corn closed at $132.55/MT. Mar 2017 up 0.19% to $142.98/MT and May up 0.33% to $145.74/MT. FOB prices were indicated at $170/MT (US Gulf) and $180/MT (FOB PNW). Argentine corn was indicated at $17/MT and Corn and DDGS prices and spread - Oct 28 2016Brazil at $191/Mt at respective ports on FOB basis. Black Sea corn remained unchanged at 166-170/Mt for two weeks now.

DDGS prices on FOB basis would tend to move up from now on as the experts are of the view that the low prices during harvest have happened in the past weeks. In the last two week’s DDGS prices on FOB basis have moved up by almost $20/MT at US Gulf, where DDGS is indicated at $177/MT and $10/MT at PNW, where DDGS is indicated at $181/MT. Those who had purchased DDGS earlier have made a substantial saving, but still DDGS continues to be good buy for the livestock producers across the world. CNF prices of DDGS have remained consistent and current price is $203/MT delivered Vietnam and $191/MT delivered China.

 Ethanol prices were up this week and have been going up continuously for few weeks now. Nov 2016 indicated at $0.435/Liter; Dec 2016 $0.19/Liter; Jan 2017 $0.404/Liter; Feb 2017 $0.402/Liter and Mar 2017 $0.406/Liter.

 Amit Sachdev, USGC Representative for India, Bangladesh and Sri Lanka * E Mail: usgcindia@gmail.com

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US corn prices stable, Brazil buys US corn; India Maize arrivals start; DDGS is the cheapest protein source

US corn prices moved up slightly this last week. From the low of $128/Mt on CBOT, Dec corn is now at $139.44/MT and still most competitive in the world market. Mar 2017 contract was $143.14/Mt and may at $145.74/MT. USDA’s last report has projected a slight decline in production, which is now estimated at 382.5 MMT and yield is at 10.88 MT/Hac. Overall  the exports are projected to be at a record level of 56.5 MMT, 1.4 MMT higher than Sept report. Ending stocks for 2016/17 are now projected at 58.9 MMT in the US. World corn production is estimated at 1025 MMT and ending stocks at 216.8 MMT for 2016/17. Almost 38 percent of US Corn and 49% of sorghum has been harvested, which is same as a 5 year average for corn and Sorghum harvest is going faster.

Based on the higher prices on the exchange, the FOB prices also showed a slight increase and were indicated at $164-169/MT (US Gulf); 179/MT (PNW). Against this the Argentina corn is indicated at $180/MT and Brazil at $192/MT. In the last few weeks Brazilian prices have tended to move up as the country is short of corn and has approved US traits for feed and food and has allowed US corn imports. It is strategic decision which would allow the livestock industry to continue to remain in business and provide low prices animal protein to the consumers in country and may be also export. Brazil is one of the largest exporters of poultry meat.

US sorghum too is priced good and is indicated at $175/MT (FOB US Gulf). US Sorghums finding buyers many countries including China, Pakistan, Mexico and Japan to name a few. US Sorghums low tannin and can be used as a replacement for corn. For those countries where trade of GM crops restricted, Sorghum can be a viable option.

Bangladesh has bought a huge quantity of US and Brazilian corn in tech last few weeks, delivery Nov – Dec. It may just be possible that Bangladesh end users do not come to India to buy corn this year again or if there is a need may buy small parcels.

India maize harvest has started and new maize has arrived in the market. It will still be time before peak arrivals start. Prices reman steady and still on higher side at Rs.16500/MT delivered to main consumption centres in Coimbatore and Gujarat. There have been some reports of damage in Maharashtra, Karnataka due to late rains and in some cases a dry period during production time. In the irrigated areas, the production is good and quality too is good. In the spot market prices have started to decline. Nizamabad Rs.16365/MT; Davangere RS.17800/MT; Karimnagar Rs.16033/MT; Sangli Rs.16141/MT and Gulabbagh Rs.15987/MT.

Protein prices, especially SBM in India have come down. Current price of SBM delivered to Coimbatore and other poultry centres in Tamil nadu is Rs.31000/MT (Rs.704-761 per % protein – depending on 44% protein or a 42% protein). If the protein %age is higher the price would be higher. US SBM 48% protein is priced at $370/MT (US Gulf). US DDGS is possibly the cheapest protein alternative available and is priced at $158/MT *FOB US Gulf) and delivered to China at $199/MT and to Vietnam at $200/MT (40 ft containers). DDGS contains 28% protein and 6-7%. At this point many of the ethanol plants are closed due  to maintenance and as the plants start operations, the availability is likely to increase and put pressure on prices.

Ethanol prices too moved up slightly in the US and Nov contract was $0.41/liter; Dec $0.403/Liter; jan 0.395/liter; Feb $0.394/Liter.

Due to annual maintenance closure of ethanol plants, the ethanol production was down this week. and reached 0.962 million barrels per day. Gasoline consumption was up and that drew down on the stocks leading to higher ethanol prices. This would again settle as the ethanol plants start operations, but at the same time, the gasoline demand will also slow down as US is out of the driving season as winter sets in.

Bulk freight rates have been 30 and the benchmark US Gulf-Japan freight rate was indicated at $30.25/ MT and PNW-Japan at $17.5/MT; US Gulf-China quoted at $29.50/MT and PNW-China at $16.25/MT. Argentina/Brazil to China indicated in the range of $28.25-19/MT.

Amit Sachdev, USGC Representative for India, Bangladesh and Sri Lanka * E Mail: usgcindia@gmail.com

 

 

 

 

 

 

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