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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US corn prices down as harvest starts; India maize prices remain high, harvest to start soon; DDGS is the most competitive protein ingredient

US corn harvest has started, though slow. The WASDE report earlier in the week put the corn production in the world at 1028 MMT, which is likely to keep the prices under pressure. But at the same time there few changes in domestic consumption were made as low priced wheat would give completion to corn. The global corn ending stocks though were unchanged at 219.4 MMT which suggests ample corn. US ending corn stocks are estimated at 60.55 MMT. Prices in the US were down this week, Sept down 2.30% to $126.84/MT; Dec down 1.18% to $132.67/MT; Mar down 1.20% to $136.39/MT and May down 1.17% to $139.52/MT. This is also reflected in US FOB prices where were down by at least $5/Mt against last week to $161-166/MT for deliveries in Oct-Dec period (FOB US Gulf). Indicative price FOB PNW was $181/M, down $4/Mt against last week. Argentine corn was indicated at $171/MT and Brazil at $189/MT, while Black se corn was indicated at $164-169/Mt for the period Oct-Dec.

corn-in-india-for-silageIndian corn prices on SPOT were high and a full fledged harvest is yet to start. Though small arrivals have started in some markets. Expecting a crop of 16-17 MMT, Indian corn prices will need to be at $165/Mt (FOB) (Rs.11055/MT) if any exports have to happen. Nizamabad corn was prices at Rs.18210/MT up 0.52%; Davangere at Rs.18200/MT; Karimnagar at Rs.18735/MT and Sangli at Rs.19200/MT up 1.02% and Gulabbagh at Rs.15578/MT up 0.83%. Poultry prices are improving, but still lower than cost of production. Photo on the left from Chattisgarh for corn ready for harvest. This though is for silage production and has been produced using drip irrigation.

As the US corn prices are down, DDGS prices too have been down and DDGS remains a cheapest protein source in comparison to other protein sources, DDGS with 27% protein is price at $6.59 per unit protein, while SBM at $372/MT with 48% protein is priced at $7.75 per unit protein. DDGS offers and additional advantage of 6-7% oil to provide energy in the rations.

US continued to make more ethanol and exports remain strong. US ethanol prices were up this week for Oct by 1.41% to $0.399/litre, but for next four months were down. Nov down 2.96%to $0.382/Litre; Dec down 0.92% to $0.37/Litre; Jan down 1.93% to 0.362/Litre and Feb at $0.364 per litre. India’s gasoline demand continues to grow and was up by 25% year-on-year for Aug 2016 and India has set a target for blending 10% ethanol in gasoline, which would be a good oxygenate and assist in reducing Air Pollution. Indian sugar sector currently converts Molasses to ethanol, which is currently being blended, but the blend rate is less than 4%. India will need to step up to fulfil the blend rate of 10% to be effective in reducing/combating Air pollution.

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

 

 

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US corn prices down, Indian maize prices up, harvest soon, prices will dip; DDGS remains a good buy; Ethanol blending policy to bring investment to India

Last week, the corn prices in the US were possibly the lowest ever. Sept corn closed at $124.55/Mt leading to lower FOB prices and the drop in CNF prices as well. This did lead to a situation where US corn was priced lower than Argentine and Brazilian corn delivered to China and SEA by atlas $15-29/MT. US corn delivered to China from US Gulf was indicated at $186/MT and Argentine, Brazilian and Black Sea corn to China was indicated in the range of  $203-207. This week prices on CBOT did move up and Sept corn closed at $129.91/Mt up 4.30% against last week; Dec up 3.84% to $134.24/MT; Mar up 3.84% to $138.34/MT and May up 3.88% t o $141.17/MT. Prices of corn on FOB basis were up by $10/MT and reported in the range of $166-172/MT (US Gulf) and Argentine/Brazilian corn was indicated at $177-188/MT. The difference remains and US corn is the lowest priced today and possibly would be. New crop harvests stars soon and 74% ion the crop is the good to excellent condition.

Lower corn prices also translate to lower DDGS prices on FOB basis and indicated at $184-188/MT (FOB US Gulf); $186/Mt (PNW). Delivered price of  DDGS to SEA region, Vietnam as a benchmark at $223/MT and to China at $220/MT. CGM prices too ahem come down and current prices at indicated at $570/Mt (FOB)

Barley is a focus grain and can be used in cattle feed. Current prices are somewhat higher in the US at $180/MT, but other origins it is priced lower. Argentine feed barley # $162/MT and Black Sea at $152/MT. Barley iOS a versatile grain and can be used in various foods especially breads and of course is the main ingredient for beer and mal beverages. In India, there is no duty on import of barley.

Indian maize remains expensive and prices this week intact moved up a bit in Spit as well as future. Some locations small delivered have also started especially in Madhya Pradesh, but large quantitates will only arrive in last week of Sept and early Oct. Nizamabad at Rs.18115/MT; Davangere at Rs.18200/MT; Karimnagar at Rs.18733/MT; Sangli at Rs.19000/Mt and Gulabbagh at Rs.15450/MT. Crop condition across the country remain good. Expectations of the good crop and with stocks available across the country, and no plans to stock, prices counts remain subdued, but not much to get Indian maize into the export market in large quantities. Some quantities may still move in containers in SEA region. But Indian poultry and starch sector can get good quantities at a reasonable price and the situation could well be back to normal after a demand destruction in the last one quarter due to high maize prices.

Current poultry prices remain low and are likely to improve by end of Sept 2016 and that would also be the time for new harvest maize. Cost of production could come down and prices improve, would bring profits to poultry.

Ethanol prices in US remain competitive. Bio-ethanol is priced at $0.393/litre in Oct 2016 on CBOT, though higher than last week by 2.84%; Nov $0.394/litre; Dec $0.374/litre and jan 2017 $0.370/litre. In India, biofuel is priced at Rs.49.5/litre ($0.73/litre), but as the gasoline demand is increasing, the ethanol blending program is lagging behind. GOI has planned for a 10% blend, allocation for 2015/16 was for 5%, but seems that the blend rate of 4.48% would be managed. Other countries have used low priced ethanol to fulfill the mandates and in the interim have focused in increasing the domestic availability via investments in the sector, providing jobs in the rural sector and helping communities to create assets in the rural areas.

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

 

 

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US corn and co-product prices down; Indian maize area up, good crop expected; DDGS is a cheap protein source

With the largest corn crop expected in the history of US, with record yields, prices have started to show a down trend this week. 75% of the corn crop is in good to excellent condition. There’re reports of yields from Illinois at 193.5 bu/acre (4.9149 MT/acre), up from last year’s 4.7752 MT/Acre. The export sales remain good and India’s neighbour, Bangladesh too has purchased another cargo of 60,800 MT of corn last week, delivery would be set for Oct 2016. Price of corn on CBOT was down by over 5%. Sent down 5.39% to $124.48/MT; Dec down 5.41% to $127.95/MT; Mar down 5.38% to $131.65/MT and May at $134.48/MT. FOB price for US corn was indicated at $171/MT (US Gulf) and $184/MT (PNW). Price of Argentine corn was down little bt this week at $182/MT and Brazilian corn was priced at $193/Mt (FOB). Black sea corn too was priced in the range of $179-184/Mt (FOB) for the period Sept-Nov.

In India, maize has been planted in close to 8.2 mill hac and end users expect a large crop, starting Sept-Oct. There are some maize belts in Madhya Pradesh, Uttar Pradesh, parts of Bihar where flood waters might affect the crop, but it is too early to tell. Overall as per the IMD report, the deficiency of rains fall for the period Jun 01 – Aug 28, 2016 is -3%, and there are areas in Telangana, Andhra Pradesh and Karnataka were there is dryness. It is too early to forecast the yields and the production. Prices seem to move up as the supply crunch is being felt and demand atlas in some pockets is being seen. Nizamabad up 3.69% to Rs.17608/MT; Davangere up 3.74% Rs.18050/MT; Karimnagar up 1.29% to Rs.17766/MT and Sangli up 0.89% to Rs.18700/MT; Gulabbagh down 0.12%to Rs.15522/MT.(These prices are for packed material at NCDEX warehouse). Market prices may vary based on the quality of the material and will be for loose material. Future price for Sept were down by 0.53% to Rs.14970/MT;Oct up 0.85% to Rs14300/MT; Nov up 1.99% to Rs.13830/MT; Dec up 2.58% to Rs.13890/MT.

As more ethanol is being produced in the US, corn is priced lower, DDGS production is good, prices of all corn co-products is down. DDGS is selling at a premium over corn because of its energy and protein value (6% oil and 28% protein) and it is being priced in the global market as an ingredient of choice in some markets. For the crop year 2015/16 in the period Sept 2015 – Jun 2016, the world has procured 9.4 MMT of DDGS against 8.9 MMT last year. Bangladesh in this period imported 21,824 MT of DDGS against 8,881 MT last year, because it made sense to use DDGS in poultry and aqua feeds and despite being imported, it has been cost effective and continues to be. Current price of DDGS on FOB basis is indicated at $189/MT (US Gulf) and $190 (PNW) and its delivered price to Vietnam is indicated at $218/MT and to China at $215/MT. SBM price on FOB basis (US Gulf) is indicated t $385/MT. Ethanol prices too closed lower this week on CBOT. Sept down 2.70% to $0.381/Litre; Oct down 3.12% to $0.378/Litre; Nov down 3.57% to $0.371/Litre; Dec down 4.46% to $0.363/Litre and Jan 2017 closed at $0.359/litre. India has been using the fuel ethanol for blending in petrol. While the mandate is set at 10% and India requires 2.6-2.88 billion litres of ethanol for blending, only 1.2-1.3 billion litres is being supplied and the effective blending rate is less than 5%. The overall areas under sugarcane is down and the sugar production is expected to be down by 7-8% by a rough estimate, which would reduce molasses production also. Indian Oil Marketing Companies think of using the imported ethanol to fulfill the mandate and in the meantime create infrastructure to make available ethanol from domestic sources over a period of time. It needs to look at other countries which have used the blending mandate to help communities and industries in country, but the mandates have been enforced and fulfilled first. It has helped reduce the air pollution in cities, reduce water contamination due to use of chemical oxygenates and at the same time brought in investment in the country and created jobs.

Bulk freight rates were up slightly, and the benchmark US Gulf-Japan freight rate was indicated at $29.5/ MT and PNW-Japan at $16.5/MT; US Gulf-China quoted at $28/MT and PNW-China at $15.5/MT. Argentina/Brazil to China indicated in the range of $29.25-18.75/MT.

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

 

 

 

 

 

 

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Expect US corn production to be highest in 3 decades; Area under maize in India also up by 10%

US corn production (Courtesy USDA-NASS)USDA came out with the WASDE report on Aug 12, 2016. Expectations for a huge crop in the US 384 MMT, Average production of 4.4 MT/Acre or 11.02 MT/Hac. Corn ending stocks in the US for the 2016/17 marketing year are projected at 61.2 MMT, the highest in 29 years. (Graph on the left shows the corn production in US over the years in Billion bushels. 1 bushel = 25.4 kg). Meanwhile, prices are expected to average just $124/MT (Rs.8370/MT), the lowest in 10 years. World is going to be flush with corn and production is estimated at 1028.4 MMT and corn ending stocks to be 220.8 MMT. There will be no dearth of corn in 2016/17 in the world. 74% of the crop in the US is in good to excellent condition. Exports are good and this probably has kept the US prices stable even after such a report which projects the highest ever crop. Sept corn was down 0.62% to $126.84/MT; Dec down 0.36% to $131.09/MT and Dec down 0.29% to $135.19/MT. Not much change in the FOB prices as well,which were indicated at $168-173/MT (FOB US Gulf) for Aug-Oct period and $183-184/Mt (PNW) for Sept-Oct 2016 delivery. Brazil corn is selling at a premium over US and hence less of buyers and prices are indicated at $181-189/MT for Argentina and Brazil, while Black Sea corn is prices at $175-180/MT (Prices are on FOB basis) are respective ports)

India too is likely to produce more as more area has been planted on corn 8.129 mill hac has been planted, which is 110.60% of normal and 9.77 % higher then last year’s 7.152 mll hac. This is likely to keep the keep the price down and there may be no need to import if the crop conditions remain good. Overall only the prices for close contracts (Aug and Sept are up) and reported at Rs.15140/MT and Rs.15010/MT, up 2.92% and 0.74% respectively. Oct down 2.42% to Rs.14110/MT; Nov down 0.30% to Rs.13450/MT and Dec down 0.82% to Rs.13300/MT. Spot prices too have been down and the demand remains subdued. Nizamabad down 0.46% to Rs.17158/MT; Davangere down 1.69% to Rs.17450/MT; Sangli down 3.74% to Rs.18000/Mt. Davangere and Gulabbagh prices were up at Rs.17533/MT and Rs.15544/Mt up by 0.19% and 1.08% respectively.

On the ethanol front, Department of Energy (DOE) projects 2016 ethanol production will average 980,000 barrels per day — or 15.1 billion gallons. The agency also is projecting record ethanol consumption of 14.3 billion gallons. Expecting 134 MMT of corn to be used to produce ethanol and production of DDGS expected at 44.22 MMT. Which also means a prices could be remain lower, making is a good buy for the next year. Current price is indicated at $183-184/MT (FOB US Gulf) and 189-191/MT (PNW). Delivered price to SEA region, Vietnam was $220-215/MT (Aug-Oct) and to China at $220-210/MT (Aug-Oct).

Ethanol prices in US were down following the report. Ethanol prices on CBOT were indicated at $0.373/litre, down 1.47% for Sept, Oct stable at $0.371/litre; Nov down 0.07% to $0.365/litre and Dec closed at $0.360/litre, down 0.07% against last week

Bulk freight rates also were stable, and the benchmark US Gulf-Japan freight rate was indicated at $28.5/ MT and PNW-Japan at $16/MT; US Gulf-China quoted at $26.5/MT and PNW-China at $15/MT. Argentina/Brazil to China indicated in the range of $28.5-18/MT.

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

 

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Maize sowing in India improves, lower demand keeps prices stable; US corn prices continue to slide lower

India maize sowing is moving ahead. As per reports available 7.9 million hac has been planted so far, against 7 mill hac last year, up by 12.85%. Expecting good crop this year would ease prices in India. But on the other had, it is mostly wait and watch and rains continue and as per IMD if rains are plentiful at 106-107% as expected in Aug-Sept, the crop could be delayed by at least a month. On the NCDEX, it is a mixed bag of sorts, Aug down 3.98% to Rs.14710/MT; Sept down 3.06%to Rs.14900/MT; Oct up 4.53%to Rs.14460/MT; Nov up 0.37%to Rs.13490/MT and Dec at Rs.13410/MT. Spot prices continued to slide lower as the demand is subdued. Nizamabad down 0.08%to Rs.17238/MT; Davangere down 0.84% to Rs.17750/MT; Karimnagar down 0.57% to Rs.17500/MT; Sangli down 0.53% to Rs.18700/MT and Gulabbagh down 1.83%to Rs.15378/MT. Stocks remain available from Uttar Pradesh at Rs.14500/MT (market yard) and delivered to North India feed millers at Rs.16500/MT. Overall there has been a slow down of demand for poultry in North as well and South as prices have come down. South and west due to the religious reasons and North due to stocks not moving to kashmir, which has had a cascading affect. Over the next few weeks, the poultry placement is also expected to be down, which would reduce demand. The same goes for starch sector, which over the last few months has been using less of corn, first due to water issues in Karnataka and Maharashtra and also due to high corn prices. Many of the  planet reduced the crush and overall it is expected that the demand for corn could be down by 1 MMT for the year 2015/16, which has kept the prices stable.

Corn prices - Friday Aug 05, 2016 on CBOTIn the US however, the corn prices have been moving lower, only due to near perfect weather and a good crop expectation. 76% of the corn crops is in good to excellent condition, 18% in fair condition. While exports remained good, dollar moved higher, which might have weighed on the prices somewhat. Sept corn closed 3.05% lower than last week at $127.63/MT; Dec down 2.45% to $131.57/MT and Mar’2017 down 1.99% to $135.58/MT. Is this the lowest not can go and there is still some margin left will need to be seen. market is waiting for the Aug WASDE report and a lot will depend on the report. US corn prices on FOB basis were lower than Brazil as Brazil crop is expected to be little down. FOB prices were indicated as $167-170/MT (US Gulf) and $178-180 (PNW) for the period Aug-Oct.

Ukraine crop on the other side may be facing some weather issues as temperatures were reported higher and also precipitation lower. But this may change if it starts to rain this week.

DDGS prices on FOB basis were down this week and  indicated at $184 (US Gulf) and $190/MT (PNW) and delivered prices to Vietnam were $224-218/MT and china at $230-213/MT for Aug-Oct period (Oct will be cheapest).

Ethanol prices in US remained stable this week. US continues to produce more ethanol and use is a fuel additive. New report suggests that higher blends of ethanol in gasoline (E25) give additional benefit of high octane and higher efficiency. Ethanol prices on CBOT were indicated at $0.378/litre, up 0.85% for Sept, Oct down 0.21% to $0.371/litre; Nov down 0.22% to $0.365/litre and Dec closed at $0.360/litre.

Bulk freight rates seem to have come down little bit against last week. The benchmark US Gulf-Japan freight rate was indicated at $28.5/ MT and PNW-Japan at $16/MT; US Gulf-China quoted at $27/MT and PNW-China at $15/MT. Argentina/Brazil to China indicated in the range of $29-18.5/MT.

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

 

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US corn production to be up, prices stable; Bangladesh buys US corn; US ethanol prices dip, good for blending

While there have been some speculation that US corn crop could suffer due to dry weather, in reality it does not seem so and 76 percent of crop is rated as Good to Excellent and 19 percent as fair. US farmers have planted 94.1 mill acres of corn and it is expected that 86.6 million acres will be harvested. By a rough estimate if the productivity is 4.26 MT/Acre, US corn production could be 369.53 MMT, possibly the  highest in history. Whatever the concerns were on weather front have been put to rest and some experts even suggest an average yield of 4.34 – 4.36/ MT/Acres, but the conservative estimate remains at 4.26 MT/Acre. Based on the production numbers, the market in US remained stable and all eyes are on Aug 2016 WASDE report which will give a clear picture. Current CBOT prices for Sept were down 0.18% to $131.65/MT; Dec up 0.29% to $134.87/MT and Mar stable at 4138.34/MT. The FOB prices did not also show much change and were indicated at $176-177/MT (US Gulf) and $182-184/MT  (PNW) for the period Aug-Oct.

The buying by the end users in almost all markets continued and Bangladesh has bought 49,900 MT of US corn this week. Also it has bought 4 vessels of Brazilian corn, destined for delivery in Aug/Sept/Oct at a price in the range of $205-210/MT. The tender for corn imports into India by PEC/STC from Non GM origins was quoted at $252-253/MT last week for Aug/Sept delivery, much higher than India’s neighbours price. Even the price for PEC tender for corn imports in Dec’16-Jan’17 period was quoted at $216-229/MT, much higher than the expected price. 

DDGS was well supported this week and prices were down on FOB basis and indicated at $193-195/MT (US gulf) and $200-197/MT (PNW) for the period Aug-Oct period. Delivered prices to Vietnam were indicated at $226-221/MT and to China $225-213/MT for the above period. It makes sense to continue to buy DDGS and use as livestock feed and the price of corn is likely to remain low as the production of corn in US is expected to be higher.

Interest in ethanol too remains strong in South East Asia and countries use ethanol for blending in gasoline and reduce Air pollution. Prices are down and it makes to use is not only as a cheap oxygenate, but also a cheapest octane booster. Aug price was down 2.53% to $0.378/Litre; Sept down 2.81% to $0.375/litre; Oct down 1.89% to $0.372/litre and Nov down 1.91%to $0.366/litre.

IMD data - Jun 01 - Jul 29 2016 - District wise rains in IndiaIndia continues to receive good rains. For the period Jun 01 – Jul 29, 2016 the monsoon has been normal on average. But as per the data from Indian Meteorological Department 8 subdivisions have received deficient rains, which include Western Rajasthan, Gujarat, Parts of Himachal Pradesh, Partsof Jharkhand and parts of Kerala. In addition parts of Northeast too have received deficient rains. Also though there have been floods as well in Assam, Bihar, West Bengal.

Maize prices in India have more or remained stable on spot basis, Nizamabad down 0.82% to Rs.17251/MT; Davangere at Rs.17900/MT; Karimnagar down 0.37% to Rs.17600/MT; Sangli up 1.08% to Rs.18800/MT and Gulabbagh up 1.05% to Rs.15664/MT. There is still some maize with stockists and with early maize plated in areas which received good pre-monsoon rains, arrivals could start early in Mid-Sept, which will help stabilise prices. Current delivered prices of maize to Gujarat and Tamil nadu still is high ranging between Rs.18000-18500/MT and it is difficult to pass this price increase to the consumers in the form of increased egg, meat and milk prices.

Bulk freight rates seem to have come down little bit. The benchmark US Gulf-Japan freight rate was indicated at $29.5/ MT and PNW-Japan at $16.5/MT; US Gulf-China quoted at $28.5/MT and PNW-China at $15.5/MT. Argentina/Brazil to China indicated in the range of $29.5-19/MT.

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

 

 

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US corn prices continue to decline; India plants more maize, price remain stable; DDGS remains a competitive livestock feed

Corn crop conditions in the US continue to be good. 69% Good to excellent and 24% fair. There has been some weather concern, but not much. Over one month the US corn prices on CBOT dropped by over 13%, which is about $20/MT. In one week prices were down by close to $5%. July 22, 2016 close on CBOT for Sept corn was $131.88/MT, down 4.9%; Dec $134.48/MT down 4.65% and Mar 2017 $138.34/MT down 5.16%. This is very well reflected in the FOB prices in the US, which were reported $$176-178/MT (US Gulf) and 179-184/Mt (PNW) for the period Aug-Oct 2016 delivery. Argentine/Brazil corn was prices competitively at $173-177/MT for the same period and Black sea corn prices were also reported down at $170-176/MT. New corn arrivals in Black Sea region are expected in Sept/Oct and and the same time early planted corn will become available in India especially in Karnataka and parts of Telangana which had received good pre-monsoon showers and farmers had planted early

PEC’s tender for import of 40,000 MT maize at JSW-Jaigarh port and 80,000 MT for Kandla and Krishnapatnam/Tuticorin port for starch and poultry sector for delivery in July-Aug did not receive much support and one quote was received for $252.3/MT delivered in Aug 2016.

STC Limited has come out with a tender for import of 130,000 MT of maize for delivery between Aug 01 – 30, 2016 at various ports. The tender closes on July 28, 2016. If the PEC tender for Aug 2016 delivery received only one bid, not sure if any bids will be received for STC tender, even though prices have come down, but NON GM maize supplies have to be there.

http://www.stclimited.co.in/Templates/UI/Views/OpenPDF.aspx?id=GIDMZ210716.pdf

PEC came out with another tender for supply of 200,000 MT of corn (NON GM). Kandla/Adani Tuna 80,000 MT; JSW Jaigarh 40,000 MT; Tuticorin 40,000 MT and Vishakhapatnam/Krinapatnam 40,000 MT. All delivered scheduled between Dec 2016 – Feb 2017.

http://www.peclimited.com/Tender%20for%20Import%20of%20Maize%20-%2004-%202016-17.pdf

As on Jul 22, 2016  maize has been planted in 6.826 mill ha, 9.7% more than last year. Planting is catching up as farmers in most areas received good prices this year. Total area under pulses is up by over 39% due to higher market prices and high MSP announced by GOI  and cotton is down by 12.7% due too white fly attach last year. Overall rains were high than average by 1%. About 19% of the area in India had received deficient rains and that is mostly concentrated in Rajasthan and Gujarat.

The maize prices in India overall have been stable for some time now and  priced did show some upward movement may be because of the tender not being fulfilled. Aug up 1.41% to Rs.15830/MT; Sept up 1.77% to Rs.16090/MT. Oct down 2.41%to Rs/14180/MT and Nov down 7.06% to Rs.13430/MT as more maize maize one expected in the market in Oct/Nov. Spot prices too moved up slightly on the news, Nizamabad up 0.57% to Rs.17394/MT; Davanagere down 0.18% to Rs.17900/MT’ Karimnagar up 1.24% to Rs.17666/MT; zsanh;li  down 0.53% to Rs.18600/Mt and Gulabbagh up 0.16% to Rs.15501/MT. In the Uttar Pradesh market maize price (loose) was selling at Rs.14500-14700/MT, which was fair price, high than the MSP declared by the government.

Plant protein prices, particularly DDGS have been declining and current prices FOB US Gulf were indicated $205/Mt and at PNW $200/Mt. prices delivered to Vietnam and China were reported $230/Mt and $219/Mt for the period Aug-Oct 2016 deliveries. The US SBM price too remains competitive at $410-415/Mt (FOB)m but all the above plant protein are of GM origin and India poultry sector is not allowed to use the same. With the US poultry now open to be imported into India, as GOI has notified the new rules for import of poultry from AI affected countries, India should allow imports of GM feed ingredients to be fed to poultry and dairy animals. This would make sure than Indian poultry stays competitive over the long run. Most of the countries around India continue to import these materials to be fed to the livestock and the farmers remain in business and stay competitive.

U.S. ethanol production is remains strong and prices are also competitive. The National Green Tribunal (NGT) last week declared a banned the use of 10 year and older vehicles using Diesel as fuel in NCR. This would mean that all these old vehicles are top be scrapped and the same of gasoline/petrol run vehicles needs to increase. If India needs to push of 5% of higher ethanol blends in gasoline/petrol, Indian Oil marking Companies would need to import ethanol from the world market as India’s sugar mills may not be able to fulfill the increased demand. The gap can certainly be fulfilled using ethanol from other sources. Ethanol prices have been going down and last week were at  Aug $0.387/liter; Sept $0.386/liter, Oct $0.379/Liter and Nov $0.373/Liter. In one month the ethanol prices have come down by 6.5 – 7.28%, which makes it much cheaper than Indian ethanol, new stocks of which will not be available before Nov 2016 when the sugarcane mills start operating.

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

 

 

 

 

 

 

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