Prices of maize across key spot markets rose sharply due to firm demand from bulk buyers and fall in arrivals. With arrivals in Uttar Pradesh and Bihar shrinking gradually, bulk buyers have stepped up their purchases to pile up enough stock until the fresh kharif crop arrives in October.
In the near term, maize prices are seen rising as production in 2018-19 (Jul-Jun) is expected to fall. Poultry feed and starch manufacturers, the key industrial buyers of maize, have pegged the crop at 18-20 mln tn this year, much lower than last year. However, the farm ministry has estimated the output to be only 3% lower from the previous year at 27.82 mln tn.
On the National Commodity and Derivatives Exchange, maize futures fell due to profit booking after the contracts gained sharply during the last few trading sessions. The most-active July contract ended at 2,205 rupees per 100 kg, down 0.8% from the previous close. Prices in the long term are seen declining as the government allowed import of another 400,000 tn feed-grade maize for 2019-20 (Apr-Mar) under the tariff rate quota at 15% import duty. It had, in April, allowed import of 100,000 tn maize to ease the shortage of supply in domestic market. It may take some time for imports to arrive leading to a rise in prices.
Corn futures settled 6 to 7 cents lower in the 2019 contracts. Some of the late 2020 contracts were down a penny or less. Warmer weather expected in the coming week was seen as aiding crop maturity.
The weekly Crop Progress report showed all of the 18 reported states except TX were lagging their average silking pace. NASS crop conditions by state showed NE up 7 points on the Brugler500 scale, with MN 3 points higher. IA was down 6, with IN 3 lower and IL down 10 points.
Ahead of Thursday’s monthly USDA update, analysts are looking for old crop corn ending stocks to rise slightly to 2.204 bbu according to a Bloomberg survey.
An export cut is the predominant notion on the how. New crop is expected to be trimmed by 12 mbu to 1.663 bbu. A Ukrainian weather forecaster pegs the country’s corn crop at 36 MMT (vs. 33 MMT from USDA), noting favorable weather conditions.