US corn prices down, crop in good condition; Co-products – DDGS and ethanol prices down

In the US 78% of corn planted is in good-very good condition. The 2017 corn crop continues to be exported and find markets around the world. There are freight issues in Brazil. With the US-China trade conflict, commodity prices are down and while it may not be so good form the farmers/producers, the end users will be able to get good deals. Corn on CBOT dropped by over 1%, Jul down 1.11% to $140.62/MT; Sept down 1.13% to $144.24 per MT; Dec down 1.20% to $148.81/MT. The lower corn prices are also being seen on FOB basis, US Gulf $170 for Aug and $173 for Sept; FOB PNW $187/MT (Aug) and $189 – Sept 2018. Argentine corn was indicated at $173/MT and Brazilian at $174-175/MT on FOB basis.

ON the co-products side, US DDGS prices of FOB basis (USGULF) down 3.81%, down $9 from last week to $227/MT. DDGS train delivered to PNW is indicated at $201/MT down 7.80%. TO South Asian region, DDGS offers price Jun-Aug 2018 $268/MT (Chittagong) down almost $16/Mt from last week. CNF price to Myanmar $264/MT.

US ethanol prices have also seen a dip in the last few weeks and are stable now, but substantially lower than what they were a month ago. Ethanol was indicated on CBOT at $0.3751/Lit for Jul; Aug at $0.3785/Lit; Sept 0.3820/Lit; Oct $0.3812/Lit and Nov $0.3804/Lit. There is enough ethanol in country (India), but still not enough to fulfill the needs. As per data available 1.6-1.7 billion liters of ethanol will be supplied to OMC, against the demand of 3.13 billion liters. If the ethanol supplies are augmented, the country will be able to valuable FOREX, a required octane rated gasoline could be made available at a cheaper price and the OMC would also be sable to save a substantial amount. In the US, when the EBP was introduced, the net savings to the refiners was 1-1.5 cents/octane/gallon. The overall drop was 3 octane points at refinery level and net saving of 3-4.5 US cents/gallon.

US SBM prices have also come down on FOB basis and DDGS on per protein basis is a little cheaper than SBM in the US and hence finds scope in feeds across species.CGM prices in the US have beens table for some time and currently indicated at $585/MT Jul and $585/MT for Aug delivery (FOB).

Indian maize prices remain stable. It is hot in most parts of the country. The sowing is progressing fine, 1.175 mill hac of area has been sown which is a normal for this time. Prices in South India are close to Rs.14500/Mt and in Bihar Rs.11300/MT and there is not much change in the last few weeks.

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

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US corn prices correct, co-product prices also come down; Ethanol is one solution for two issues, high gasoline prices and Air Pollution

Corn prices in the US corrected this week leading to drop in FOB corn prices as well and co-product prices. July contract closed at $154.01/MT on Jun 01, 2018, down 3.65% from its earlier close of $159.83/MT on May 25, 2018. Sept corn was also down 3.52% to $157.63/MT and Dec down 3.13% to $162.04/MT. As on May 27, 97% of the corn was planted and 79% was rated as good to excellent and 72% has emerged and this is one reason for the prices to fall. The sowing is 2 percent higher than 5 year average. As per USDA report, the average temperature across the corn belt is going up, which could boost crop development, but it also reduced sub- soil moisture and the demand for irrigation was up.

US corn on FOB basis (US Gulf) was indicated at $183/MT (Jun) and $187/MT (Aug). FOB prices (PNW) were indicated higher at $200/MT. Argentine corn was indicated at $185-189/MT, Brazil at $186-190/MT and Ukrainian at $189/192/MT. US corn is still the cheapest corn available in the world.

Corn co-products, namely DDGS prices corrected on FOB basis (US Gulf) as corn prices were down and were indicated at $260/MT (June) and down to $249/MT (Aug). Prices in PONW were also down and indicated at $251/MT (June) and $248/Mt (Aug). The above prices are on bulk basis. Delivered prices for the period are yet to correct and in the indicative prices to Vietnam were at $275/MT; China $269/MT; Chittagong at $293/MT and Myanmar at $291/MT.

Ethanol prices on CBOT also were down, June $0.3963/lit; July 0.3910/Lit; Aug 0.3952/Lit; Sept 0.3979/Lit and Oct $0.3971/Lit. It must be borne that ethanol offers the cheapest Octane against the aromatics, which are priced at $0.78/Lit (Almost double the value) and their (Aromatics) removal from the gasoline processing will not only reduce the price of gasoline, but also lower the Air Pollution in the countries. The Octane requirement can be met by addition ethanol in gasoline. Ethanol upto 27% in gasoline does not harm the car engines and cane be used effectively as has been proven in Brazil. Even in US many states allow E30 (30% ethanol in gasoline) and it is the choice of the car owner to fill the car with E20 or E2, which E10 is bland mandate enforced all across the country.

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

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US corn production to be down, prices down; Sorghum fits into the rations at the current price; DDGS remains a good buy; Ethanol can be one tool to combat Air Pollution

The WASDE report was out this week and corn production in the US is projected to be down at 356.61 MMT, but overall corn production in the world in 2018/19 is expected to be up at 1056.07 MMT. Overall the world is likely to consume more corn and world ending stocks are likely to go down from 194.85 MMT in 2017/18 to 159.15 MMT. Ending stocks for US are likely to be 42.73 MMT against 55.44 MMT in 2017/18. Countries that are expected to produce more corn in 2018/19 include Argentina (41 MMT against 33 MMT in 2017/18); Brazil 96 MMT against 87 MMT in 2017/18); and Ukraine (30 MMT against 24.12 MMT in 2017/18). Production of corn in EU is expected to be down to 61 MMT in 2018/19 from 62.10 MMT in 2017/18 as per the WASDE report.

On the use of corn in the US, Feed use is expected to be down to 136.52 MMT in 2018/19 against 140.78 MMT in 2017/18, but corn for ethanol is expected to go up marginally to 142.87 MMT in 2018/19 against 141.60 MMT in 2017/18. Overall Feed Seed Industrial (FSI) use is expected to be up at 180.72 MMT in 2018/19 against 178.81 MMT in 2017/18. Expect more DDGS production and more ethanol production in the US. Corn exports are expected to be down at 53.34 MMT and ending stocks down to 42.72 MMT.

Corn planting this week is still lagging behind and is at 39% against 44% (5 year average). Last year at this time the sowing was up at 45%. Overall it should have been a signal for higher prices, but it was not. Corn prices on CBOT closed lower this week. May down 2.26% to $153.38/MT; Jul down 2.41% to $156.05/MT; Sept down 2.08% to $159.44/MT and Dec down 1.57% to $163.14/MT. Lower prices on CBOT also signaled lower FOB prices and indicated price of corn at US Gulf were $193/MT and PNW at $203/MT. Argentine corn is indicated at $192/MT and Brazilian at $183-186/MT (For July-Aug shipments). Black Sea corn on FOB basis is indicated at $198/MT.

Indian corn prices are mixed this week. Prices in South (Erode) were indicated up by 1.37% at Rs.13887/MT and prices in Bihar down by 3.54% at Rs.11575/MT. With thunderstorms across the Northern belts, there is damage to harvested grains in many market yards and it is still being accessed. Harvest in Bihar is late and also there was the grain filling issue that will reduce arrivals in some parts of Bihar.

US Sorghum prices at this time are lower than corn on FOB basis and indicated at $189/MT. US Sorghum, which is zero tannin can be used in combination with corn, without any difficulty. As the prices are lower, almost 0.7 MMT of Sorghum has been shipped out of US for Saudi Arabia and Spain. Other countries are also looking to buy Sorghum.

DDGS prices on FOB basis (US Gulf) were down this week by 6.54% to $243/MT. Moving forward the prices are indicated lower for Aug delivery at $235/MT. Delivery of DDGS in the region in Chittagong in May was indicated at $293/MT and in Aug $291/MT. Delivery to Myanmar down slightly at $290/MT and for Aug down to $288/MT. Other plant protein prices, including CGM were stable at $615/MT on FOB basis. US SBM was indicated little lower at $449/MT, Argentine at $434/MT and Brazil at $419/MT. US DDGS is still priced lower than SBM on protein basis and with higher energy level makes a valuable feed ingredient.

In the first three months of the year 2018 (Jan-Mar 2018), Bangladesh has bought 30,000 MT of DDGS, 68% more than last year’s purchase. Sri Lankan purchase is at par with last year, just about 8% higher than last year at 5424 MT. Myanmar has purchases 11,943 MT, 140% more. All these countries are buying US DDGS as they see a value in the product and there is an ingredient in the feed mix to work with, which helps in keeping the prices of feed stable and value of animal protein affordable to the consumers.

US ethanol prices on CBOT were down. June contract down 2.6% to $0.3860/Lit; Jul down 2.06% to $0.389/Lit; Aug down 1.98% to $0.3939/Lit and Sept down 0.86% to $0.3974/Lit. US ethanol remains the cheapest Octane booster in the world and for those who are using high priced aromatics (82% higher than ethanol), they are also paying the price of higher pollution. There is enough evidence to prove that higher blends of ethanol can help reduce Carbon Emissions and Particulate Matter in the air which effect the young and the old alike. But countries need to have uniform norms for blending across the country and ethanol should be made available at all locations and its benefits available country wide.

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

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US corn and co-product prices move up: US Sorghum prices competitive; DDGS prices up due to high SBM prices; Ethanol offers a solution to India’s Air Pollution problem

World corn prices moved up this week. US corn planting is slow as only 17% of the corn crop has been planted, against 32% last year and last 5 year average was 23%. US has had weather related issues. There is also the Brazil weather concern, which is a threat to the corn crop in Brazil. US corn on CBOT closed higher. May %156.92/MT, up 2.36%; Jul $159.91/MT, up 1.96%; Sep $162.83/MT up 2.02% and Dec $165.74/MT up 1.59 against last week’s close.

Higher corn prices, coupled with Ethanol plants closing for spring maintenance (less ethanol production) has led to higher ethanol and also DDGS prices in the market. US Ethanol futures closed higher last week. Jun $0.3963/lit up 3.10%; Jul $0.3981/lit, up 3.15%; Aug $4008/lit, up 3.06% and Sep $0.4008/Lit, up 2.43%. DDGS prices moved up not only due to less production, but also found support in SBM prices moving up in Argentina. US SBM prices on FOB basis were somewhat lower at $467/MT, down 1.48% and by Jun US SBM was indicated at $463/MT. Argentine SBM however was up at $454/MT, up 1.11%. DDGS prices on FOB basis (US Gulf), were up by 3.17% at $260/MT and CNF prices to Vietnam were up at $274/MT; China $270/MT, Chittagong $295/MT and Myanmar $291/MT.

With US corn prices going up, the other grain that could be used effectively in livestock rations is Sorghum. US Sorghum prices have come down by $10/MT on FOB basis in the last one month and currently priced at $191/MT. US Sorghum is ‘Tannin Free’ and can be used in poultry rations in the same manner as Corn.

http://www.sorghumcheckoff.com/assets/media/feedingguides/Poultryguideforweb.pdf

Indian maize prices on the futures market have moved up slightly by 1%. Spot prices too are seen moving up as demand grows in the domestic industry and there is an export viability. Current price in ERODE is indicated at Rs.13709/MT; Gulabbagh at Rs.12000/MT and Nizamabad at Rs.12594/MT.

New Study titled “The Impact of Higher Ethanol Blend Levels on Vehicle Emissions in Five Global Cities” by Dr. Steffan Mueller at the University of Illinois at Chicago and his associates analysed the air quality of five major cities worldwide. By utilizing a spreadsheet based model, Dr.Mueller and his team utilized variables such as vehicle fleet descriptors, miles driven, current gasoline composition, projected electric vehicle share, etc. to determine vehicle emission reductions resulting from blending E10 and E20 into the gasoline supply of five major cities: Beijing, Mexico City, New Delhi, Seoul and Tokyo. On average, the study determined that blending E10 reduced deadly toxins such as carbon monoxide (CO), total hydrocarbons (THC), particulate matter (PM), weighted toxins including benzene and formaldehyde, and greenhouse gas emissions by as much as 15%. These compounds have been linked to global warming, ozone, acid rain, smog, heart disease, lung cancer, and death. At E20, these impacts were even more pronounced with average reductions as high as nearly 32%.

Using a E10 blend in New Delhi, would reduce CO by 3.1% and by using an E20 blend a reduction of 20.6% is possible. Total hydrocarbon reduction on 8.7% via an E10 blend and 7.4% via a E20 blend. PM levels could go down by 1.2% if E10 blend is used and reduction of 7.1% is possible if the blend of raised to E20. Weighted toxins levels could go down by 21.1% in case of E10 blend and 36.6% by E20 blend. Green House Gas (GHG) Emissions could go down by 3.6% via a E10 blend and 7.1% by E20 blend.

India is home of 15 of the top 20 most polluted cities. Delhi has the distinction of the being the 6th most polluted city. While there are other reasons for Air Pollution, vehicular pollution is one of the reasons and ethanol is one solution that can be used.

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

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Maize harvest delayed a bit; US farmers to plant relatively less corn, prices up; Sorghum prices down a bit; Ethanol is a cheapest source of octane

Indian maize harvest for Rabi will be late, another 2 weeks before the new corn is large quantities could be seen in the market. In the interim, the price have gone up, in Gulabbagh by over 9% in last one month. Against last week, prices are down slightly and are at Rs.13000/MT. Prices in Erode, (South) have also gone up by over 4% in last one month and currently close to Rs.13900/MT. Against last week, prices are up by 2.5%

In the US, farmers will be planting more Soybeans and less corn and that has led to higher corn prices. Corn acres in 2018/19 are projected at 88 mill hac and Soybeans at 89 mill hac. This had led to US corn prices moving up on CBOT, May corn up 0.83% to $152.90/MT; Jul corn up1.17% to $156.29/MT; Sep up 1.61% to $159.05. FOB prices were volatile last month and US Gulf (FOB were at a high of $190/MT on Mar 16, but last week were down at 188/MT, up $2, against last month end close. FOB PNW prices are now at $200/MT, moving up steadily. Sorghum prices however have shown a decline and from a peak of $206/MT (FOB), prices are down by $6/MT are at $200/MT. FOB Texas, prices are indicated at $190/MT.

Higher demand of DDGS in the domestic as well as foreign markets has led to higher prices, which are indicated at $245/MT FOB US Gulf, up 10% in one month. Prices of DGGS to Vietnam are indicated at $251/MT, China $251/MT, Chittagong $283/MT and Myanmar $279/MT. Other co-product price, CGM prices have been more or less stable at $620/MT (FOB US gulf) for the last couple of weeks.

While all other commodities, co-product prices are up, ethanol prices are moving downward (down). May futures are down 3.11% in one month at 0.3794/Lit; Jun down 2.78% in one month at 0.3823/Lit; July at $0.3854/Lit and Aug at $0.3870/Lit. FOB prices of US ethanol too have shown a decline continuously over last one month and down by 2.88% at $0.404/lit (US Gulf); down $0.408/lit (PNW). While Brazilian ethanol prices also have been moving down, but still are much higher than US ethanol at $0.591/Lit. Aromatics, which are used a source of octane in gasoline, prices are down at $0.70/lit, but still much higher than ethanol, which is the cheapest source of ethanol in the market.

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

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Dryness in Argentina keeps corn prices up; Co-products prices move up on the back on higher corn prices; India maize prices stable for now

Corn prices in the US moved up by over 1.5% across the four contracts. There is a higher demand for US corn, higher exports and also higher use in domestic market as the per the WASDE report released last week. It is expected 141.5 MMT of corn will be used for making ethanol and also exports will be to the tune of 56.5 MMT in 2018. Ending stocks were down to 54.04 MMT. The other reason for prices to jump was the dryness in Argentina, which would reduce yields and production to 36 MMT. Brazilian corn production has been reduced slightly to 94.5 MMT, while increased for South Africa at 13 MMT and also India. Word corn production in 2017/18 is expected to be 1041.74 MMT and carry over stocks of 231.86 MMT. Total corn demand is expected at 1074.43 MMT and world ending stocks will be down to 199.17 MMT.

Mar contract closed at $150.78/MT up 1.54%; May $153.69, up 1.35%;Jul $156.68/MT up 1.43% and Sep %158.42/MT up 1.21%. US corn (FOB, US Gulf) was indicated at $190/MT this week for Apr delivery and down to $187/Mt for Jun delivery. PNW FOB prices were indicated at $193/MT (Apr delivery) and down to $191/MT for Jun delivery. Argentine corn was indicated at $183/MT (Apr) and up at $186/Mt for Jun delivery; Brazilian corn at $180 (Jul) and up at $184/Mt (Aug). Ukrainian corn at $194/MT in April and up at $197/MT in Jun. Pressure is building up and as India harvests a big crop, will the prices be competitive enough to deliver to South East Asia will need to be seen.

Spot price in Erode were down by 3.37% to Rs.12900/MT and up in Gulabbagh (Bihar) by 1.47% to Rs.12100/MT. Harvest is still few weeks away in Bihar, one of the key state for maize production. Demand of maize in India is likely to grow as the poultry sector grows, but there are also issues with cyclic nature of the placements and chicken demand, which effect maize demand in India at certain times. Future prices for Rabi were down, April Rs.11480/MT, down 0.61%; May Rs.11430/MT down 1.04%; Jun and Jul at Rs.11430/MT. May (South) Rs.13080/MT down 3.40%.

While the Soybean prices have taken a hit this week and WASDE projected higher ending stocks in the US and production of Soybean meal is projected upward. There was a correction of corn in the SBM prices as the market had risen much higher. US SBM prices were down $439/MT (FOB) basis; Argentine SBM at $410/MT (FOB) and Brazilian at $397/MT. In the interim US DDGS prices moved up mainly because of higher US corn prices and also domestic transport issues. FOB prices were indicated at $228/MT (April) and down to $224/MT (Jun) for US Gulf. PNW prices were indicated at $238/MT. Delivered prices to Vietnam $253/MT; China $250/MT, Chittagong $275/MT and Myanmar $270/MT. Higher US corn and DDGS prices dragged US CGM prices up at $620/MT for April delivery.

Ethanol prices in the US moved up on the back of higher corn prices, but still US ethanol remains a cheapest in the world market as raw material for chemicals and a clean burning fuel additive and also offers cheapest Octane. Apr $0.3995/Lit, up 2.58%; May $0.4026/Lit, up 2.84%; Jun $0.4024/Lit, up 2.77% and Jul closed at $0.4017/Lit.

Freight rates have been moving up consistently over the last few weeks. US Gulf to Japan at $45/MT and PNW-japan at $24/MT; US Gulf to China at $44/MT and PNW – China at $23.50/MT; Argentina/Brazil to China in the range $34.25 – $40.25.

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

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Higher maize production expected in India; US corn prices move up on Argentina drought situation; Higher SBM prices drag DDGS prices up; Ethanol futures down

The 2nd advanced agricultural production estimates were released this week by GOI and the corn production in India is estimated at 27.14 MMT (19.51 MMT in Khariff and 7.63 MMT in Rabi), up 4.78%. Prices remain stable or downward in the SPOT market. Price in Erode were indicated at Rs.13350/MT down 0.46% and in Gulabbagh Rs.11925/MT down 3.05%.

US corn futures moved up 3% this week, adding $4/MT over the last week’s close. Mar futures closed $148.5/MT; May $151.64% up 2.88%; May $154.48/MT up 2.67% and Sep $156.53/MT up 2.16%. The prices are up as Argentina drought situation has worsened and is likely going to affect the corn crop more drastically than thought before. Brazilian corn production is also likely to get affected as there will be a likely delay in soybean harvest and effect the second corn crop. Higher futures prices have lead to higher FOB prices of US corn, which added $10/MT against last week’s indicative prices. US Gulf $183/MT for Mar and $181/MT May. Indicated prices for PMW (FOB) were also higher at $185/MT (Mar) and $186/MT (May). Sorghum prices did not move up so much and added $3/MT on FOB basis and US Gulf prices was indicated at $204/MT.

Even though the world prices are moving up, it is yet to be seen if Indian prices will come down enough to be competitive for export in the South East Asian region.

With USSBM prices moving up 5% on CBOT and were indicated at $394/MT, against last week’s $375/MT. Higher SBM prices is moving other plant protein prices up and domestic usage of DDGS is going up as it fits well in the feed rations. FOB prices (US Gulf) were indicated at $222/MT for Mar and somewhat lower at $216/MT for May delivery. Prices for DDGS (rail delivered) to PMW were also up and indicated at $233/MT (Mar) and down slightly for May at $229/MT. CGM prices have moved up and indicated at $590/MT (FOB US Gulf). US DDGS delivered to Vietnam is up at $248/MT; China stable at $240/MT; Chittagong up at $270/MT and Myanmar at $266/MT (The FOB prices indicated above are for Bulk, while the delivered prices are for container loads).

US ethanol futures this week were down. Mar down 0.88% to $0.3857/Lit; Apr down 0.81% to $0.3894/Lit; May down 0.67% to $0.3915/Lit and Jun down 0.54% to $0.3915/Lit.

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

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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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Maize prices stable in India; US corn prices up; US DDGS even with slightly higher prices remains a competitive feed ingredient

Maize prices in India remain stable, buying is slow, as trade and end users wait for the new crop in Rabi (To be harvested in Mar-Apr-May, in parts of North East, South India). Overall area under maize in India for Rabi sowing is estimated at 1.67 mill hac against 1.626 mill hac last year. It is also higher than the normal area under Maize (1.58 mill hac). Expecting a good Rabi crop of maize this season is likely to put pressure on prices. Spot price of maize in South India (erode) was indicated t Rs.13720/MT and delivered to the feed mills at Rs.14200/MT. The maize is delivered to North Indian feed millers at Rs.14200/MT, not much difference. April Rabi futures dropped 4.16% to Rs.11165/MT and May Rabi too dropped by 1.41% to Rs.11150/MT on Feb 02, 2018.

US corn prices on CBOT moved up this week on news of dry weather in Argentina and that the crop will be less. By the end of the week, there was rain, but that did not hamper the market trend, which continued to move up. March contract up 1.40% to $142.28/MT; May up 1.21% to $145.42/MT and Jul; up 1.07% to $148.50/MT. This did aid FOB prices, which were indicated at $165/MT (US Gulf) and $177/MT (PMW). Argentine corn was priced at $170/MT; Brazil at $164/MT and Black Sea corn at $174/MT (All on FOB basis, at respective ports).

DDGS prices remained stable or downward on FOB basis and were indicated at $204/MT (FOB USGC). Rail delivered to PNW was $227/MT (The above mentioned FOB prices are in bulk). In the region March delivery prices were up slightly, Vietnam $246/MT; China $235/MT; Chittagong $267/MT and Myanmar $261/MT (The prices to destinations are in Containers).

Other protein prices – corn co-product prices (CGM) were up and were indicated at $595/MT. US SBM at $387/MT and future prices expected to drop to $377/MT. Argentine SBM (47%) at $370/MT and Brazilian SBM at $353/MT. Indian SBM is being delivered to the feed manufacturers at Rs.32500/MT (Approximately $504/MT), per percent protein valve (45% protein) at Rs.722. US DDGS if allowed will be reach the feed manufacturers at $311/MT (Rs.20055), for 28% protein. Per % protein valued at par with SBM, but with additional energy via 6-7% fat, which makes it a ingredient worth looking into and including in the livestock rations.

Ethanol futures moved up this week, Feb 0.387/Lit, up 7.48%; Mar 0.3817/lit, up 4.57%; Apr 0.3844, up 3.34%; May 0.3868, up 2.60 and Jun 0.3881, up 2.16%. The prices were up as ethanol production fell this week and there is a possibility that ethanol production will be coming back on stream, which will stabilize prices of ethanol as well as co-products (DDGS) a bit.

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

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US corn and SBM prices up; DDGS is the most competitive plant protein available; Ethanol prices too are competitive

US corn futures moved up this week by over 1%. Mar closed $140.31/MT, up 1.14%; May $143.69/MT, up 1.22% and Jul $146.92/MT up 1.14%. Over last month, the prices were up by 1.91%$, 1.67% and 1.47% respectively. The prices are up as the news of a short Argentine corn and less exports from South Africa hit the market. US corn of FOB basis, despite a slight uptrend remains competitive and cheaper at $164/MT against Brazilian corn at $168/MT and Black sea corn at $167/MT on FOB basis.

India is likely to harvest a good corn/Maize crop in Mar/Apr 2018 and future prices remain more at less stable. Rabi corn (Gulabbagh, Bihar) for May 2018 was indicated at Rs.11310/MT a the week closed early due to Friday holiday on the occasion on Republic Day (Jan 26, 2018). Spot prices in South were up by 0.29% to Rs.13470 and in Gulabbagh down by 0.72% to Rs.13000. Compared agaiunst last month, South prices were up by 2% and Gulabbagh up by 0.19%. As at both the locations, a good corn/maize crop is expected, prices could drop.

On the plant protein side, US SBM prices moved up this week by 4.31% to $387/MT, Argentine SBM was up by 2.23% to $367/MT and Brazilian up by 1.42% to $356/MT. All the above prices are on FOB basis at respective e country ports. As against last month, US SBM prices were up by 14.16%, Argentine prices up by 10.54% and Brazilian prices by 12.66%. Indian SBM prices against last week were up by over 13$=% and SBM is being delivered to feed mills in South India at Rs.32000/MT. US DDGS prices in this one week on FOB basis have gone up by $4/Mt to $211/MT and indicative prices delivered to the region is $264/MT. The delivered price of US DDGS has gone up by $10/MT (3.92%) in this one month. Based on the protein availability Indian SBM is priced at Rs.727/percent protein and US DDGS would cost Rs.705/Percent protein and there is additional advantage of 6-7% fat and high phosphorus in US DDGS (The price working is based on a ZERO % duty in India). Feed manufacturers, integrators around India, within the SAARC and ASEAN regions, continue to import US DDGS and using it in livestock feeds and taking advantage of low priced plant protein. US DDGS demand continues to grow across the world and also in the region.

Ethanol, is a clean burning fuel that will be solve some of Air Pollution problems in most parts of India, especially the one due to vehicular pollution caused by gasoline, which emits more noxious gases and particulate matter. Last week, US ethanol futures closed slightly higher, Feb up 2.18% to $0.360/Lit; Mar up 1.69% to $0.365/Lit’ Apr up 1.37%t to $ 0.372/Lit; May up 1.35% to $0.377/Li and Jun up 1.06% to $0.38/Lit. Against last month, prices are down for Mar by 0.14%; 0.50% for Apr and 0.49% for May 2018 futures. Brazilian Ethanol at this time is priced at $0.605/lit (On FOB basis).

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

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