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Indian Maize/Corn- Rabi Season Outlook for Q1 of 2013 fiscal.... Pramod Mane

Indian Maize/Corn- Rabi Season Outlook for Q1 of 2013 fiscal.... Pramod Mane

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Maize/Corn outlook
Maize/Corn outlook

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Maize Report (Rabi crop) 24 January 2013

Market Apercu: Corn futures proved one of 2012's best performers in the commodities complex, rising 21% on CBOT, rise in prices were supported by the poor U.S. corn crop. Albeit CBOT corn prices started 2013 on positive note and bulls were encouraged by USDA January report which affirmed lower U.S. corn ending stock and added depressed comments about 2013/14 U.S. corn crop prospect citing the low levels of soil moisture, We believe prices will not be able to sustain current level after mid February, expecting bumper South American crop will arrive in market in mid February. Optimistic forecast of USDA, about South American corn crop is holding back importers, which is debilitating pace U.S. corn export. Maize prices on domestic futures also took positive note from CBOT corn and Feb contract on NCDEX rose to Rs 1440 per quintal but prices couldn’t able to hold and retreated to Rs 1416 per quintal by the end of week. Presently NCDEX February contract is trading around Rs 1385 per quintal. Presently for SEA region, Indian traders are offering corn at $310 while Argentine & Brazilians traders are offering at $335 and $345 respectively and U.S. offering corn at $370 per MT for the delivery by February on FOB basis. Indian Maize -Kharif Harvest: Maize output for kharif season dropped to 14.89 MMT compared to 16.22 MMT a year ago. Feeblish mansoon rain reduced the yield and harvested area across the country. Actual production fall short by 0.5 MMT compared to our kharif crop estimates which were 15.4 MMT. The fall in production ignited rally in maize prices and made high to Rs 1500 in late November, 2012.

Excluding Tamil Nadu. Tamil Nadu state has almost 26 percent less planting because of water shortage. Major push came from Bihar and Andhra Pradesh who shown 16 and 22 percents gain in area respectively. With the help of late mansoon showers in Maharashtra and Karnataka. Lower reservoir levels in Andhra Pradesh have lead many farmers to switch from paddy to maize. Indian farmer planted 1. as higher maize prices looming more farmers to plant maize. Rabi MAIZE PLANTING 2012/13 .Indian Maize-Rabi Planting for 2012-13: As of 10 Jan. rest all major Rabi growing states shown rise in planting area. compared to last year. farmers are able to marginally increase maize planting.302 million Ha of maize compared to 1.171 Million Ha a year ago.

Estimates for 2012-13): 2012/13 E (In MMT) Beginning stocks Production Imports Total supply World 132 852 95 984 India 0.9 MMT expected from Rabi.88 Arge ntina 0. Global Scenario (Crop Balance Sheet.49 China 59.00 21.70 20. Maize production is estimated to fall by 3.00 269.83 2.2012/13 Corn Supply: Indian maize production for 2012/13 could total to 20.54 301.89 MMT from Kharif and 5.01 28.S.79 0.95 . 14. As far as world corn production concern 2012/13 crop production estimated to be at 845 MMT with ending stock expected around 113 MMT. Supply is going to be tight until the South American corn enters in world market by late February.34 Brazil 10.57 MMT.00 0.00 2.A 25.00 0.12 273.94 28.08 71.80 81.49 U.79 MMT out of it.62% compared to last year’s 21. Standing Rabi crop is in good condition and at the movement there is no major weather risk for crop.34 208. We expect Rabi crop harvest to arrive in market by the late February.

00 72.20 60.13 262. Bumper crops in Europe and China will help to ease the supply concern. crop last year.15 World corn market will be experience tight demand and supply scenario.14 17.30 0. Chinese import is expected to be ~2 MMT compared to 5 MMT a year ago.19 15.49 24.00 0.00 209.50 8. . Even though this might not fully replenish the gap created by lower U.90 18.10 21.30 27.50 9.50 55. until arrival of expected record corn crop from Brazil and Argentina.80 1.S.20 209.06 286.38 19. but definitely it will be narrowed.Exports Domestic Demand Total Demand Ending Stocks 91 868 959 116 2.

but the export would be lower compared to last year as growing domestic demand will reduce quantity available for export. USDA says its 4. which accounts almost half of total demand.4 million MT. Our export destination like as Malaysia. (Export figure varies from 3 to 4. Between Oct 2012-Jan 21.8 % (annual CAGR rate) backed by mainly expanding poultry consumption. Indian exporters will be wary of the rupee appreciation vs US dollar. For the 2012/13 we are expecting animal feed sector demand for maize to subdue and the food sector demand would witness marginal increase. Poultry will alone consume around ~9. 2013 total exports were at 669.629 MT between Oct-Jan 24.193 MT compared to 826. We believe the 2012/13 domestic consumption would total around 18. wheat etc. once South American corn start to arrive in late February.8 MMT). Domestic maize consumption is largely driven by poultry feed. as the government undertaking various steps to halt fall in rupees value.4 MMT of maize with estimated chick placements around 240 million per month in India.10 MMT compared to last year’s 17. . Starch manufacturing accounts about 13 percent of domestic usage and its manufacturing capacity believed to grown which will ultimately push up the demand. We believe India could export around 2 to 3 MMT of maize in 2012/13.60 MMT.2012/13 Corn Demand: The demand of maize for domestic consumption is expected to grow at 2. 2012. During 2011/12 domestic demand for maize was sluggish because of higher prices and cheaply available substitute raw material like broken rice. Export during 2011/12 has grown dramatically compared to 2010/11 and reached to ~3.8. Indonesia and Vietnam who depend on us for speedy and usually small corn supplies might disappear.

.Price Scenario: Indian Maize Price Seasonality Indian prices broadly remain range bound with negative bias during first four months of calendar year and start rebound in May and make the tops during last week of July.

as lower export drives the bearish sentiments and so sentiments moves prices. Price outlook: Price CBOT NCDEX April Sangli CMP 730 1425 1460 Up to 15 Feb 750 1450 1480 By 31st Mar 2013 660 1350 1400 Range: 15 Feb to 31 Mar 2013 660-730 1350-1450 1400-1500 For comments and feedback write to: pramodmane96@gmail. Lack of demand from export side will pressurize the domestic prices despite robust domestic demand. for the first quarter of 2013 corn prices will be negatively biased in domestic as well as global market.Outlook: Domestic prices are expected to trade of positive sentiment up to middle of February and then move downside with the commencement of Rabi crop arrival. In a nutshell. it will vaporize the demand for Indian maize in world market.com . After February once South American crop start to arrive in market.

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