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 recent WASDE report. 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. World corn production in 2017/18 is expected to be 1041.74 MMT and carryover 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.