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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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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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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India maize prices stable, rain damage reported; Despite prices moving up, DDGS remains a feasible protein source; US ethanol price competitive, can ease the Air Pollution pain

Maize arrivals started in different states at the market yards and the prices remained stable, moved down for some time and suddenly saw a spurt. On Sept 22 2017, Spot maize price in Jalgaon was Rs.13300/MT and on Oct 18, 2017 was Rs.13500, a small increase. Prices in Davangere were however down from Rs.15250/MT on Spet 22, 2017 t o Rs.14600/MT on Oct 18, 2017, just before the Diwali season. Prices in Sangli also increased a bit from Rs.14650/Mt to Rs.14800/Mt in the same period. Rains in parts of South India seem to have damaged crops in some parts and that could not only affect the quality of the material, but also the quantity of the supplies. As per the new data availably, the Khariff crop has already been projected lower than last year at 18.73 MMT by GOI, against 2016/17 production estimate of 19.24 MMT.

The harvest of US corn continues. As of last week 28% corn has been harvested, weather is good for harvest and that seems to help in easing the corn prices in the US. While US corn arrivals at the elevators will be good, for crops sold earlier, if the prices do remain low, US farmers will tend to store the crop at the farm level. The harvest at this point is delayed as over 90% of the crops is mature. As the weather improves, the harvest pace too will increase.

In the end of Sept 2017, the corn price on CBOT was $139.83/MT (Dec); $144.71/MT (Mar); and $148.10/MT (May) and the prices have eased and last week closed at $135.58/MT (Dec); $141.90/MT (Mar) $144.56/MT (May). The lower prices were made sure that the prices on FOB basis remain stable, especially US Gulf, where the prices were indicated at $159/MT and at PNW prices were down by $10MT to $169/MT against Sept last week. Agrentine corn prices were indicated at $147/Mt. Brazil at $151/Mt and Black Sea (Ukrainian) at $153/MT.

As the prices of corn eased, price of DDGS have also come down and indicated at $177/Mt (US Gulf) and $193/MT (PNW). Delivered prices have tended to move up only because of the freight rates moving up. Delivered price of DDGS to Vietnam and China $204 and $205/MT respectively. Price to B’desh rose to $226/Mt this week and to Myanmar $223/MT. US DDGS price at this time is still lower than soybean meal on per unit protein basis in the US on FOB pricing. While US SBM 48% is $7.2/unit of protein; US DDGS is $6.32/unit of protein and also provides additional energy (7% fat).

US ethanol prices have continued to ease in the last few weeks. US ethanol on CBOT in end of Sept was priced at $1.486/gallon (Nov); $1.460/Gallon (Dec) and $1.433/Gallon (Jan). the priecs in three weeks are down and indicated at $1.386/Gallon (Nov); $1.385/Gallon (Dec); and $1.378/gallon (Jan). US Ethanol price on FOB basis has also eased and averaged $0.390/liter against Brazilian ethanol at $0.568/liter, a differential of 45.64 percent. The same is also true for Aromatics (which are blended in gasoline) and the average price in the US (FOB) is $0.64/liter. US ethanol is much cheaper (61.54%) than aromatics that are normally used in fuel as an additive for octane and also for burning, but are responsible for the Particulate Matter. Ethanol burns better and completely and at higher blends rates the Particulate Matter (PM less than 1) is also less.

In the current state as the Diwali festival is over, even as the bursting of crackers was banned in NCR the Air pollution problem persisted. As the nights get colder and winter sets in, the Air is likely to get much heavier. Clean burning fuel for cars is the key and Oil Marketing Companies (OMC’s) came out with the tender to purchase 3.13 billion liters of ethanol for an E-10 blend in the year 2017/18. The production of ethanol from Molasses route is expected to be 2.53 billion liters and there are also other industries (potable, industrial), who would need ethanol as well. Even if the sugar industries could provide 1 billion liters, 0.29 billion liters higher than last year, the blending rate achieved will be 3.19 percent. To fulfill the E-10 blend mandate 2.13 billion liters will need to be sourced from outside/imported. The current price of Molasses based ethanol is Rs.39/liter ex factory and the equivalent price in US is Rs.26/liter (FOB) and after accounting for freight, it could be delivered to Indian shores at a much cheaper price.

Amit Sachdev, Serving Agriculture and Livestock in India, Bangladesh and Sri Lanka * E Mail: amit@techproindia.in

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India maize area down, prices down for now; US corn prices move up; Co-product prices follow

India has completed the maize sowing and as per the last data available, the sowing is down by 5.08% against last year at 7.866 mill hac. It is a wait and watch situation, wherein areas have received above normal rains and some have received less rains. In the short term, expect prices to be down.

Against last week, prices corrected and were down on SPOT basis, Jalgaon Rs.14000/Mt down 3.45%; Nizamabad Rs.14900/MT down 3.63%; Davangere Rs.16650/MT down 2.35%; Sangli Rs.15400/MT down 3.75% and Gulabbagh Rs.12350/Mt down 0.38%. The crop is fast moving towards maturity.

In contrast US prices moved up a bit due to some dry weather concerns, but also as demand is up for ethanol production. Sept up 1.24% to $135.50/Mt; Dec up 0.39% to $140.39/MT; Mar up 0.38% to $145.27/MT and May up 0.37% to $148.26/MT. The FOB prices though were down a bit and indicated at $158/MT ( US Gulf); and $170/MT (PNW). Overall the US corn crop looks good, 13% is in poor and very poor condition, 13% in excellent and 74% in good and fair condition.

DDGS prices were supported by Soybean/Soybean Meal prices as they moved up this week. In addition, with Vietnam demand anticipated to move in, prices are likely to move up. The seasonal maintenance of the ethanol plants is also coming up, which would keep the prices higher. FOB prices were indicated at $170 (US Gulf) and $182-185/MT (PNW)> Delivered prices to various locations in the region, Vietnam $202/MT; China $197/MT; Chittagong $218/MT and Myanmar $217/MT.

Ethanol prices have also been moving up. Oct futures up 2.74% to $0.4061/lit; Nov up 2.13% to $0.3929/lit; Dec up 1.88% to $0.3868/Lit and jan up 1.91% to $0.3807/Lit. On FOB basis US ethanol was prices at 0.431/lit, up 2.31% against last week, but lower than Brazilian ethanol by $0.162/lit, which is priced at $0.593/lit, up 5.89% against last week. Aromatics, the key additive in gasoline, international prices moved up by 8.47% to $0.66/lit and US ethanol is cheaper than Aromatics by $0.229/lit.

Amit Sachdev, Serving Agriculture and Livestock in India, Bangladesh and Sri Lanka * E Mail: amit@techproindia.in

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India maize price stable, US prices up slightly; DDGS prices down, Vietnam DDGS demand to increase; Ethanol turns cheaper

India maize prices remain stable and on a downward trend at least for some time as the endusers wait for the new crop and the demand is also subdued. The sowing is complete for maize and now it is wait and watch. The monsoon has also entered the last phase and as per IMD the the withdrawal could be delayed bit. Overall the rains have been just about normal and deficit at 3%, but there are areas in the corn belt which have received less rains and there is a possibility of productivity loss due to moisture stress.

Sept (Rabi) future Rs.13000/MT, down 0.61%; Oct (K) Rs.15580/MT down 2.14%; Nov (K) Rs.15680/MT down 2.12%; Dec (K) Rs.15760/MT down 2.17% and Jan 2018 (K) Rs.15840/MT. Spot prices too were down, Jalgaon Rs.14500/MT (Same as last week); Nizamabad Rs.15462/MT down 2.02%; Davangere Rs.17050/MT down 0.87%; Sangli Rs.16000/MT, down 4.19% and Gulabbagh Rs.13300/MT down 0.12%.

US, especially Texas was hit by Hurricane Harvey, but it is not affecting the corn crop. The contract to watch at this time in Dec 2017, which turned lower than $3.5/bushel and on Aug 30 closed at $3.455/Buhsel ($136/MT) and then rose sharply to close at $139.83/MT on Sept 01, 2017. There is no such to buy corn by domestic users as well and that is keeping the prices stable. If there is a export demand, prices may move up. Sept contract $133.85/MT, up 0.41%; Dec $139.83/MT up 0.51%; Mar 2018 $144.72/MT up 0.33% and May closed at $147.71/MT. US corn on FOB basis (US Gulf) was indicated at $160Mt slightly higher than last week and Prices at PNW were same as last week at $176/MT.

DDGS prices on FOB basis was down and indicated at $168/MT (US Gulf), down 3.45% and on PNW basis $177/MT down 6.35%. On FOB basis DDGS is priced at 105% of corn and is a good buy. Delivered price to SEA region remains stable, Vietnam $195/MT; China 4188/MT; Chittagong $212/MT and Myanmar $212/MT. As on Sept 01, 2017, Vietnam cleared DDGS imports with Phospine fumigation. This is likely to increase the demand of DDGS into Vietnam. The country is one of the biggest users of DDGS in SEA region and uses is a feed ingredient of choice in Poultry, swine and fish feeds.

US ethanol futures moved up on CBOT this week, Sept $0.4416/lit, up 7.46%; Oct 0.3952/lit up 5.14%; Nov $0.3847/lit, up 3.86%; Dec $0.3796/lit and jan 2018 $0.3735/lit. On FOB basis however prices were own and indicated $0.419/lit down 1.41%. Brazil ethanal prices were up by 1.82% to $0.56/lit. US ethanol at this time is cheaper than Brazil ethanol by 33.65%. Last week the differential was 29.41%. Aromatics (Benzene, Toluene and Xylene), commonly called a BTX, prices moved up and indicated at 0.64/lit, up 8.47% against last week and also higher than ethanol by 52.74%. It makes sense to use ethanol as a source of Octane in Gasoline as it provides a better boost and is clean burning. Much more lighter on the pocket as well as the lungs, for sure.

Amit Sachdev, Serving Agriculture and Livestock in India, Bangladesh and Sri Lanka * E Mail: amit@techproindia.in

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Maize sowing lags, prices stable as yet; US corn condition stable, prices down; CO-product prices down

Following a short gap in the monsoon, the rainfall deficiency as on Aug 25,2 017 stands at 6% for India. The deficiency in Southern Peninsula is however 12%. Maize sowing in India has been lagging by 5.93% as on Aug 25, 2017. Maize has been sown in 7.799 mill hac against 8.291 mill hac last year. With dry spells in between, the productivity could be affected.

In the US there has been some dry weather conditions and that has led to some issues with the corn crop. The latest report estimates 62% of the US corn is rated good/excellent and 26% is rated as fair. Across the U.S., 76% of the corn in in dough stage while only 29% is dented. Typically, 35% of the corn is dented at this point in the crop year. At this point it is early to discount the yields in the US due to the superior genetics and technology used that can withstand the drastic weather conditions. US carry over stocks are good and hence even if there is a production drop, the difference may not be significant. Overall the prices of US corn on CBOT have been trending downward. Sept corn was $147.31/MT at the end of Jul (Jul 28,2017) and is down to $133.30/MT on Aug 25, 2017, down 9.51%. Dec corn onJuly 28, 2017 was $152.75/Mt down 8.92% over one month to $139.13/MT; Mar 2018 was $157.31 on July 28,2 017 and closed at $144.24/MT on Aug 25,2017 down 8.31%. FOB prices too corrected and indicated at $156/MT (US Gulf) and $176/MT.

Reduction in corn prices led to stable Corn DDGS prices which have been indicated in the range of $174-176/MT (FOB US Gulf) and down from $195/MT (FOB PNW) to $189/MT on Aug 25,2017. Delivered price to Vietnam down to $191/MT from a high off $200/MT; China delivered at $1800/MT; Bangladesh and Myanmar delivered price stable at $213-211/MT. SBM prices in India have been moving up steadily. There has been a lag in soybean sowing as well and it is down by 7.27% to 10.488 Mill hac against last year’s 11.31 MMT. As per Soy Oil Processors Association, the soybean sowing is down by 6.47%. In the interim the SBM prices have also moved up in 3 weeks period by over 9% and currently SBM is trading at Rs.27000/MT at Indore on Spot basis. DDGS makes a better buy at this stage at least for those who are in the costal areas.

US ethanol prices too have been down in one month period. Aug contract down 2.77% to $0.3968/lit; Sept down 6.94% to $0.3831/lit; Oct down 8.03% to $0.3759/lit and Nov down 8.56% to $0.3704/lit. Ethanol could be added in gasoline/petrol against Aromatics to get the desired octane in gasoline and at the same time get the advance of a clean burning additive. Aromatics are one of the main cause of PM1, in the air and most harmful for humans. Use of ethanol at 20-30% in gasoline can substantially reduce PM1 in the Air.

Amit Sachdev, Serving Agriculture and Livestock in India, Bangladesh and Sri Lanka * E Mail: amit@techproindia.in

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Maize prices remain stable in India, down in US; DDGS prices up a bit, but still a good buy

Maize sowing in India remains slow and is trailing last year’s sowing by 5.21$%. As on Jul 28, 2017 data fromMinistry of Agri, 6.914 mill hac of maize has been sown against 7.294 sown in Jul 2016. Bajra (pearl Millet) sowing is much higher at 22.54% higher than last year. Soybean sowing is also lower than last year as on date, down 10.31% at 9.566 mill hac. Less farmers are opting for Soybean sowing as the prices remain low, possible.

There has been extensive rains in Gujarat, and flooding. There have been reports of extensive damage to crops in some areas, especially cotton, ground nut and also some cereals. After the water recedes the full extent of the damage will be known.

Overall maize prices in India this week on the futures as well as spot market have been seen moving lower in anticipation of a higher crop on the back of good monsoon. Expect a lower demand/pick up during gains due to festivals as well. But against last month’s close, prices have moved up. Jalgaon Rs.14500/MT, down 1.69% against last week and same as Jun 30,2017; Nizmabad Rs.16306/MT, down 0.88% against last week, and 1.70% higher than Jun 30, 2017; Davangere Rs.17250/MT, up 0.15% against last week, and 5.83% higher than Jun 30,2 017; Sangli Rs.16750/MT, 1.90% lower than last week and 1.47% lower than Jun 30, 2017; Gulabbagh Rs.13428/MT, down 0.32% against last week and 4.52% higher than the price on Jun 30, 2017.

US corn prices in the week Jul 14-21 were up and there were weather conditions that could have effected the crop. In the middle of this week, good weather was forecast and rains have been beneficial for the standing crop, which led to the prices moving lower on CBOT. 62% of the crop is is good-excellent condition and 26% is in fair condition, expectations are that the weather will improve. Sep 2017 closed $147.31, down 1.45% against last week, and 1.78% lower than Jun 30, 2017; Dec closed at $152.75/MT down 1.40%, down 1.02% against Jun 30,2 017 close; Mar 2018 $157.31%, down 2.99% against last week and down0.40% against Jun 30,2017 close.

on FOB basis, US corn prices (US GULF) last week were indicated at $167-168/MT and this week at $164-160/Mt (Aug to Oct 2017). FOB prices at PNW were indicated at $174-177/MT last week and little bit higher at $174-184/MT this week (Aug-Oct 2017 delivery). South American corn (Argentina) indicated at $148-153/MT and Brazil indicated at 155-159/MT.

DDGS prices on FOB basis have not changed much and indicated at $175/MT (US Gulf) and $194/MT (PNW). Delivered prices to the SEA region (Vietnam) were reported up, from last weeks $188 to this week’s $200/MT. Chittagong delivered prices too were up from $215/MT to $218-222/MT. But it is still a feasible buy for the feed industry.

Amit Sachdev, Serving Agriculture and Livestock in India, Bangladesh and Sri Lanka * E Mail: amit@techproindia.in

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Maize sowing slow, will catch up, prices up; US corn prices drop on higher ending stocks; DDGS remains an affordable protein source

Overall, maize sowing has been lagging behind last year sowing by 5.41%, though overall coarse cereals sowing has been good and 14.4% above last year. 5.249 Mill hac of maize area had been sown as on Jul 14 2017, which is 71.57% of the total areas (5 year average) as per data available from Ministry of Agriculture.

Demand of chicken remains stable in most areas, but due to the Hindu festivals, the prices are weak. In Maharashtra region live chicken prices were Rs.100-105/kg on July 06, 2017 which is down by 25% and ranging between Rs.74-75/kg on Jul 16, 2017.
Maize prices on the spot market moved up this week. Jalgaon up 4.31% to Rs.15125/MT; Nizamabad up 1.14% too Rs.16350/MT; Davangere up 2.98% to Rs.17300/MT; Sangli up 0.73%to Rs.17150/MMT and Gulabbagh up 0.12% top Rs.13516/MT. Future prices too have been moving upward. Oct kharif, which would be the key first month Kharif contract for new crop, closed 1.03% higher than last week’s close at Rs.16620/MT.

In the US, while the weather forecast predict hot weather conditions for few days and this could keep the prices higher, the WASDE report projected higher ending corn stocks bringing the prices down. Jul corn closed at $143.77/MT, down 4.45%; Sept $148.10/MT down 4.13%; Dec $153.30/MT down 3.76% and Mar 2018 closed at $157.55/MT down 3.24%. WASDE report of Jul 12, 2017 has projected corn yield of 4.335 MT/acre and production of 362 MMT and total supplies of 423 MMT (begging stocks of 60.198 MMT and some imports). Feed/residual is estimated at 139 MMT and Food/Seed/Industrial use at 177.* MMT, of which 139.7 MMT will be used for ethanol production. US is expected to export 47.625 MMT of corn and the ending stocks will be 59.055 MMT.

US corn on FOB basis was indicated at $157-161/MT (US Gulf) and $167-170/Mt (US PNW). Argentine corn for Aug/Spet supplies is indicated at $154-157/MT and Brazilian corn indicated t $154-158/MT. Black Sea corn indicated at $170-175/MT (All price son FOB basis at respective country ports).

US DDGS prices have tended to move up as there is demand but at the same time as corn prices were up for three weeks, which has increased the prices. US DDGS on FOB basis is prices at $170/MT and PNW $192/MT (In Bulk). Delivered prices for DDGS in 40 ft containers to Vietnam $183/MT in July and upward of $192/MT in Sept; China $188/MT in July – Sept period; Chittagong at $214/MT and Myanmar at $213/MT. For the period Jan – May 2017, Bangladesh has imported 28,969 MT of DDGS, Pakistan 17764 MT and Myanmar 11686 MT. The world has imported 4.648 MMT of US DDGS. On a per protein basis, DDGS is still a good protein buy against Soybean and carries a differential of $1.34 in favour of DDGS.

US ethanol prices have moved up as well as corn prices were up. Aug ethanol contract closes at $0.153/gallon (0.4069/liter) up 1.32%; Sep up 0.92% to $4069/Liter; Oct up 0.39% to $0.4048/Liter and Nov up 0.33% to $0.40/liter. As per a report, Delhi had a good air day after 9 months and it was only due to the rains and noting to do with the Air pollution management.

Amit Sachdev, Serving Agriculture and Livestock in India, Bangladesh and Sri Lanka * E Mail: amit@techproindia.in

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US corn prices drop; India maize up; DDGS remains competitive; Ethanol, as renewable energy source, prices drop

US corn prices were down as good weather conditions prevailed and good weather is expected over the next 10 days, which is likely to boost corn growth in the US. The crop conditions remain good as per the last report from USA. Excellent 12%; Good 55% and fair 25%. On the CBOT prices were down by over 6% over theist week. Jul down 6.87% to $140.78/MT; Sep down 6.79% to $143.85/MT; Dec down 6.67% to $147.71/MT and Mar 2018 down 6.52% to $151.57/MT. This also led to US corn prices on FOB basis slide a bit lower and price at US Gulf was indicated at $159-160/MT (Jul-Sep); PNW indicated at $164-166/MT (Jul-Sep). Argentine corn prices too were down a bit and indicated at $147-154/MT and Brazilian corn at $152-158/MT for Aug-Sep delivery. Black Sea (Ukrainian) corn is priced T $167-172/MT for the same period. Report indicate that the Ukrainian corn crop is good and Brazil is also going to harvest a good record crop.

Indian maize prices in the spot market were relatively up last week, Jalgaon up 1.93% to Rs.14500/MT; Nizamabad up 1.84% to Rs.15362/MT; davanagere up 1.71% to Rs.16350/MT and Gulabbagh also up by 1.56% to 12625/MT. There seems to be no parity for export and Bangladesh is expected to import cheeper corn from the world market. Indian maize sowing is moving on a sow pace and is just about 0.944 million hac, same as last year and only about 12% of the area planted. Soybean has been sown in 0.597 mill hac against 0.315 mill hac last year and 5.14% of the area is covered. Sugarcane has been sown in 4.752 Mill hac, up 6% against last year and this is about 94% of the normal five year average area on which sugarcane is grown. Pulses area is cruising along and only 0.597 mill hac has been sown, against 0.901 mill hac that was sown last year, down over 33%.

Overall as on Jun 22, 2017, India had received 4% more than than the average, but it was not  a level playing field.North West India as per the report from IMD had received 46% more rains than the average and South peninsula 8% more. The two other divisions, East and North east 6% lower rains and Central India 3% lower. As the monsoon covers India, the anomaly may be corrected.

The livestock feed market continues to gain traction and with that the demand of DDGS as feed ingredient in the world market and around India as well. The prices of DDGS remain competitive in the US market, priced 15% lower than SBM on a per percent protein basis. While US SBM is priced at $323/Mt for 48% protein on FOB basis, US DDGS is priced at %160/MT for 28% protein. Other countries are using DDGS as an ingredient of choice in poultry, dairy, fish feeds. It delivered optic to Vietnam is $191/MT and in China $181/MT. Delivered price to Chittagong and Myanmar is indicated at $206/Mt. Indian SBM is prices at Rs.24000/MT (FOB) ($$\369) and US DDGS delivered is at this point cheaper than even Indian SBM on per percent protein in Chittagong, making it a much cheeper feed ingredient that can be used.

As the corn prices in the US have dropped, so have the ethanol prices, by at least 5% for July and Aug on CBOT. Last week, prices were over 0.415/liter and this week dropped to 0.394/litre on average for July-Aug, making it a cheap renewable energy source and an additive that can help India lower its emissions, reduce air pollution. Most of India’s cities and including those in National Capital Region have a severe Air Pollution problem, which ethanol cannot not be termed as a one silver bullet it could be a renewable energy solution to be looked into.

Amit Sachdev, Serving Agriculture and Livestock in India, Bangladesh and Sri Lanka * E Mail: amit@techproindia.in

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