April 2015: The sowing pace of corn in the US is faster than last year at 19%. The 5 year average was 25% and with drier weather, corn will be planted at the right time. Prices continue to come down for corn and the co-product prices too, specially DDGS. There is also pressure from SBM from South America and that is also causing prices of DDGS to be very competitive.
Corn on CBOT closed 1.5-2% lower this week. May down 1.32% to $141.57/MT. Jul down 1.79%to $142.91/MT; Sept down 2.07% to $145.50/MT and Dec down 2.06% to $149.68/MT. This has also helped the FOB prices to be lower than last week and the FOB US GULF prices of corn was indicated at $172 and could be down to $170/Mt for July delivery. FOB PNW indicated at $179/MT, down $3/MT this week. Argentine corn is indicated at $168 May delivery and $172/MT July delivery. Similarly Brazil corn at $166/MT in May and $170/MT FOB in July; Black sea corn at $160/Mt May is a competitive price.
DDGS and other plant proteins very competitive in the world
DDGS prices on FOB basis (US Gulf and PNW) were down by $13/MT against last week and were quoted at $233 230/MT and $242/Mt for the period May-Jul for the two locations. Delivered prices of DDGS to Vietnam and China were also down and were indicated at $303/MT and $286/Mt respectively. July delivery price of DDGS to China is indicated at $280/MT. SBM prices are also putting pressure in DDGS and are being quoted at $358/Mt from Brazilian; $370/MT Argentine SBM and $410/MT US SBM. Indian SBM price at this point is about Rs. 40000/MT ($634/MT) in the domestic market. Another 4 months to go before the new plant protein crop becomes available and these higher prices will certainly give a jolt to the domestic livestock sector. Corresponding CGM price is US is indicated at $690/MT in May and down to $685/MT in July.
Ingredient prices in India are higher
In the domestic market maize prices continue to move upward in all markets, except in Gulabbagh where arrivals are putting downward pressure on the price, which is indicated at Rs.11880/MT the NCDEX delivery centre. Current farmer selling price is ranging between Rs.11000-11500/MT depending on the quality. At other locations, like Telangana delivered price is being quoted at Rs. 13400/Mt; Gujarat 14000/MT. On the exchange (NCDEX), while May prices were up at Rs. 12140/MT, June and July prices closed lower than last week at Rs.12140/Mt and $12340/MT respectively.
Barley prices in India have tended to move up at Jaipur (Spot) and were indicated at Rs. 12639/MT, possible due to delayed arrivals in North India and crop damage due to unseasonal rains. In the US, feed barley was quote at $240/MT and malting barley was indicated at $250/MT at Idaho and $265/MT at Minneapolis.
A recent study acknowledges that the weather pattern in India has changed and that the monsoon peaks later than normal. The withdrawal of the monsoon is now mid October and suggests that the sowing should be done accordingly. The farmers should move away from the normal/traditional systems and adopt scientific means, and seek weather information before making a decision to plant.
Freight rates remain stable mostly and the benchmark US Gulf-Japan and PNW-Japan freight being indicated at $30.75/MT and $17/MT respectively. USG-China and PNW-China is indicated at $29.5/MT and $16/Mt respectively. Argentina/Brazil to China freight was indicated in the range of $22.75-31/MT depending on the port, ship load and the discharge.
Mr. Amit Sachdev, Indian Representative, US Grain Council