Maize Prices in India crossed industry expectations

The maize planting in the US is almost done and more than 72% of the corn has emerged. The weather looks good and with no threats at present, looks like US corn crop is having a good start. 31st was the last day of the trade for the month of May and the July contract was down considerably, closing at $4.0475/bushel ($159.34/MT), but the prices were back with the bang the next day, the first day of the new month closing at $4.1375/bushel ($162.88/MT). By end of the first week of June, the prices were up at $164.64/MT, closing 1.36% higher than last week’s close, after the dip in the middle of the week. Sept contract was also up by 1.30% to $165.19/MT, Dec up 1.50% to $165.19/MT. The exports sales have been very good from US and with Brazil prices high due to losses there, it is keeping the US prices high. FOB prices for US corn at US Gulf were indicated at $183-186/MT for Jun-Aug period and high at $193/Mt for Sep. FOB prices at PNW were indicated at $194-196/Mt for the period July-Sep.
The plant protein prices also continued to increase, following rains in Argentina, which could lead to damage and slow down the harvest of Soybeans. As the demand plant protein was strong, there was no change in the FOB prices at (US Gulf) prices were at $214 and PNW at $232. Aug FOB (US Gulf) was down to $204/MT and PNW at $226/MT. Delivered price to Vietnam and China were up for immediate delivery and were indicated at $270/Mt and $250/Mt respectively. For Aug 2016 delivery the prices were indicated lower at $253/MT and $245/Mt respectively.
India maize price on spot basis continue to move up, breaching the Rs.17000/Mt mark in Sangli and closing on 3rd June at Rs.17300/MT, up 2.98% against last week; Prices in Bihar at Gulabbagh were also up 1.03% to Rs.13250/MT. Nizamabad up 1.37% to Rs.15605/MT; Davangere up 2.82% to Rs.16400/MT and Karim Nagar up 1.66% to Rs.16037/MT. This week also saw GOI announcing the new MSP for various Khariff crops. While Pulses got the maximum increase ranging from 7.73% to 9.18%, maize got an increase of 3.01% to Rs.13650/MT. With the coarse cereals even Sorghum MSP has been increased by 3.5% to Rs.16250/MT; Pearl Millet 4.31% to Rs.13300/Mt and Ragi 4.54% to Rs.17250/MT (these are the coarse cereals are better suited for dry conditions and do not require much water). The new prices will be valid from Oct 1, 2016 and only time will tell about the shift to other crops. Some reports do point towards a shift to pulses against Soybeans in Madhya Pradesh; Oilseeds and Pulses in place of cotton in Punjab, but it is little early to predict what the farmers decide to plant in major corn belts of India, including Karnataka, Andhra Pradesh, Telangana, Rajasthan, parts of Madhya Pradesh and Chattisgarh. With monsoon predicted at 106% of LPA, it seems to be a good start for now.
Future prices were mixed and June contract on NCDEX down 0.36% to Rs.13800/MT; July down 0.42% to Rs.14180/MT; Aug slightly up at Rs.14560/MT; Sept 0.54% to Rs.14940/MT.