Bullish Outlook For Maize

Chennai: Demand from overseas feed manufacturers is likely to support maize (corn) prices and the outlook for it appears bullish.

“Steady procurement by starch manufacturers in the domestic market is expected to support (maize) as well. Concerns of weather are also likely to put some pressure on prices,” a report prepared by the Knowledge Management Department of NCDEX has said.

Inclement weather, particularly in Andhra Pradesh, was likely to cause less damage since harvest had almost been completed.

On the other hand, weather in States such as Karnataka, Maharashtra, Gujarat and Madhya Pradesh would assist harvest, the report prepared by Sarah Koshie said.

Maize exports

Quoting the US Grains council, the report said there were strong indications of maize exports to South-East Asian countries. The f.o.b prices were quoted at $220-230 a tonne (Rs 8,750-9,150).

Pointing out at the running futures contracts for the commodity, it said the near month December contract was quoted at Rs 749 a quintal, which was a premium of Rs 50 over spot prices at Nizamabad in Andhra Pradesh. January contract was quoted at Rs 767 and that of February and March at Rs 786 and Rs 800, respectively.

Also, rise in month volumes since August is an indicator of a bullish trend.

Higher acreage

The report said kharif maize output was estimated at 130.7 lakh tonnes (lt) compared with 114.3 lt with the increase coming mainly from higher acreage. Sowing in maize during kharif was done in 74.55 lakh hectares against 68.4 lakh hectares last year.

On the global front, production was projected at a record 768 million tonnes, up 10 per cent over last year in view of bumper crops in the US and South America. But sharp increase in production of grain-based ethanol has led to rise in consumption to 763 mt.

The rising prices have led to the domestic consumers complaining about it and are demanding measures to hold the price line.