Posts Tagged ‘maize crop’

CORN- The Un-discovered Legend Part 2 :)

Hello Friends here we come up with an extension of our previous blog, CORN………. “The Un-discovered Legend” Part 1

🙂

CORN- The Un-discovered Legend Part 2

In previous Blog we had touched upon few points related to importance of Maize crop in Indian commodity market and its relevance in the context of Indian Scenario 🙂

In this blog, we would get to know of Potential sources of demand for Maize crops and industrial demand of maize crop.   Also read about the PVO (Price-volume-open Interest) Analysis of the Crop.

🙂

Potential sources of demand:

The apparent increase in consumption demand has been sourced from the preference for corn based food products for human consumption as well as increased use in feed industries.

Human consumption – corn flakes, corn oil, corn flour, etc.,

Feed industry – poultry & animal feed

Ethanol – maize has already proved to be a potential source of ethanol.

🙂

Corn consumption has seen a rapid growth during last few years.

Indeed, consumption patterns have changed at an accelerating pace especially during the winter season; from the time when it has
been introduced in numerous shopping malls around the world in the form of popcorns, baby corns etc.

🙂

Industrial demand:

This commodity has placed itself in an advantageous position & made its presence felt in the industry.

Maize is a key ingredient in animal feed mix, & being the animal feed sector growing at a healthy pace with increasing demand for
meat and milk and milk products, coupled with stagnation in cattle population, there is a rising need to feed the existing population
of cattle with quality feeding.

Therefore, this has opened a window of opportunity for strengthening of global corn prices, which in turn is triggering enormous
demand for Indian maize in the Asian regions.

With the growing demand & expansion of starch sector, the overall demand for maize is likely to grow at a brisk pace.

🙂

Change in % from 2008-09 to 2009-10 (India) Source: USDA

Area Harvested: 11.44%

Beginning Stocks: 51.72%

Production: 0.10%

Total Supply: 1.60%

Total Consumption: -1.1%

Ending stocks: 12.55%

Total Distribution: 1.60%

These positive figures indicate that India has sufficient & comfortable stocks of maize.

In 2009-10 the area harvested (India) is expected to increase by 11.44%, while the consumption is expected to remain almost flat or marginally down in next year.

The ending stocks are also quite high which can pressurize the prices in long term.

In a monthly update on 10th November 2009, USDA cut the corn forecast by 1 percent to 12.921 billion bushels (328 million tonnes).

🙂

PVO (Price-volume-open Interest) Analysis:

Maize futures have proved the old saying “Slow & steady wins the race”.

The prices, volume & open interest in maize futures both in NCDEX & CBOT which had taken a backseat during the beginning of the
year 2009, have been rising again without much volatility in their behaviour.

The prices have been rising from the levels of Rs.795 to Rs.965 during January to November’09, which resulted into bull-run and resultantly futures made a high of 1015 levels on 3rd November ’09, giving a return of 21% till now.

Since the month of March ’09 prices have been seen rising witnessing some corrections during their journey; however factors like
higher international prices & continuous demand from starch & poultry industries have supported the prices.

🙂

Note : For More Latest Industry, Stock Market and Economy News and Updates, please click here

CORN………. “The Un-discovered Legend” Part 1

Hello Friends here we come up with another write up on “Commodity Corner Series”.

Here we would touch upon the importance of Maize crop in Indian commodity market and its relevance in the context of Indian Scenario 🙂

🙂

CORN………. “The Un-discovered Legend”

Maize, also known as corn, is a cereal which is an important crop after rice and wheat.

The domestication of maize has been dated back as far back as 12,000 years ago. Today, maize is widely cultivated throughout the world, in a greater size with top producing countries like United States, China, Brazil, France, Indonesia, India and South Africa.

🙂

Indian Scenario:

Andhra Pradesh is now the largest producer contributing around 21% of annual maize production.

India ‘s area harvested of maize and yield have risen by mainly on account of rising production of single cross hybrids seeds, its demand and increasing acceptability among farmers.

In India, its cultivation extends from the hot arid plains of Rajasthan and Gujarat to the wet hills of Assam and Bengal.

There are three distinct seasons for the cultivation of maize:

the main season is kharif;

next is Rabi in Peninsular India and Bihar and

in spring in northern India.

🙂

Normally, higher yields have been recorded in the rabi and spring crops.

Over 85 per cent of the maize acreage is sown under rain-fed conditions during the monsoon when over 80 per cent of the annual rainfall is received.

However, this year due to the erratic monsoon production has been affected, as a result of which maize prices have been in uptrend since the withdrawal of monsoon from the country.

During 2008-9, Indian exported 3 million tonnes of maize and 12,000 tonnes of maize seed worth of Rs 2,400 crore and Rs 2,000 crore respectively.

🙂

Stay Tuned for more on this.

In next blog we would touch upon the issues like Potential source of demand for Maize crop, Industrial Demand and PVO (Price-volume-open Interest) of MAize crops.

🙂

Note : For More Latest Industry, Stock Market and Economy News and Updates, please click here

WHEAT MAY MOVE IN RANGE WITH UP BIAS

Domestic wheat prices have escalated by around 10 per cent

Domestic wheat prices have escalated by around 10 per cent

Domestic wheat prices have escalated by around 10 per cent amid concerns of adverse monsoon and flood in Karnataka and Andhra Pradesh, which has raised concern over kharif food grain production particularly rice and maize.

Although there is still some upside left as far as wheat prices are concerned.

The prices will face strong resistance at higher level as supply situation in India and in rest of the world is in healthy shape.

Ample availability of stock at domestic level

At domestic level, wheat inventories have increased after two back to back record crops in the country.

Due to better carry over stock and record purchase government stocks reached to second highest level in the history at 32.29 million tonnes almost double than buffer stock requirement of 17 million tonne.

🙂

According to the Agriculture ministry’s fourth advance estimates, India produced a record crop of 80.58 million tonnes in 2008-09, while production was at 78.57 million tonnes in 2007- 08.

With bumper production and steep hike in minimum support price, government made record purchase of 25.3 million tonnes this year, 13 percent more as compared to last year.

🙂

Prospects of next year crop

Despite having comfortable supply currently, weak monsoon, flood in Andhra Pradesh and Karnataka and consequent Shortfall in kharif paddy output prospects has started fueling prices in the market.

A smaller paddy and maize crop will lift demand for their substitutes, primarily wheat.

As per crop weather watch report, acreage of kharif paddy this year remained at 324.28 million hectare till October 09, 2009 which is 16.2 percent or 6.26 million hectare lower than same period last year.

However kharif maize acreage remained higher this year but recent flood in Andhra Pradesh and Karnataka has aggravated the concerns of lower output.

As per Agriculture department report, kharif maize acreage was at 71.08 lakh hectares, 0.8 percent or 0.5 lakh hectares higher than last year.

Besides, flood in Karnataka and Andhra Pradesh and weak monsoon also raised concern over prospect of next wheat Crop.

Due to weak monsoon in northern part of India mainly in Punjab, Haryana and Uttar Pradesh, soil moisture condition is not sufficiently good for next wheat sowing.

😦

Water storage in this region has also declined. As per Central Water Commission’s latest data in 81 important water reservoirs monitored by CWC in different parts of the country, total live storage has increased from 90.48 BCM on 01.102009 to 91.75 BCM on 08.10.2009.

But still is far from a satisfactory level.

Stay Tuned for More on this topic.

We would see demand and supply scenario in coming months, price trend and on Export Ban.

Note : For More Latest Industry, Stock Market and Economy News and Updates, please Click Here