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Maize is doing well

posted May 16, 2010, 12:30 AM by Unknown user   [ updated May 16, 2010, 1:02 AM ]
Strong demand for Bihar maize by Bangladesh continues. As stated in earlier posts, Bihar maize is also finding acceptability from Malaysia. In Bangladesh their local maize crop has come to the market, though the production level is low and the maize is expected to be water damaged due to rains as was the case with Indian Karnataka maize last year. Hence even if there is a slight relaxation of demand from Bangladesh, it should only be for 1-2 weeks. Overall Bihar maize is bullish. To keep tune with Bihar maize, Andhra origin maize has also reduced in price and now offering at only a slight premium to Bihar maize for SEA countries.Andhra maize is also finding takers at current levels from Kakinada. So outlook is neutral to bullish. 

Soybean meal is steady on dull sentiments and slight new arrivals. Arrivals were steady at 3,000 bags in Indore mandi and 40,000 bags in Madhya Pradesh On Wednesday. Poor export demand of soy meal and higher carry overstock of soybean provided support to bears. The USDA increased the Brazilian soybean crop to 67.5 million tonnes vs 67 mln tonnes last month and 57 million last year. Argentina production was pegged at 54 million tonnes, up 1 million from last month. All of the above suggest further bearish sentiments in soybean going forward. 

Turmeric corrected slightly last week in the spot market, but found immediate takers. Bangladesh also came into buying of the Duggirala variety for the first time in 2-3 months. Demand from Dubai is steady. However, turmeric arrivals in the Erode mandis reduced to around 6,000 bags as compared to 16,000 bags in the first day of the week. Arrivals at Nizamabad are steady around 2000 bags. Also turmeric production in 2009-2010 is now being revised at 48 lakh bags as projected earlier in the beginning of the year at 53 lakh bags (each bag weighs 70-75 kgs). These factors suggest further bullishness in turmeric.

Cumin prices came under pressure slightly this week. Benchmark Unjha prices of Cumin were quoted at lower rates amidst arrivals of 8000 bags and lower offtakes of 5400 bags on Wednesday. But as stated in our last post, much depends on Syria & Turkey production which is expected to be good but also there is expectation of showers. Cumin for now looks, neutral to bullish. 

Chilli market was negative on sustained arrivals. The major market at Guntur is closed for one month from 8 May 2010 till 07 June 2010, due increasing mercury levels. According to market sources, despite the increase in the number of cold storages in Guntur district, all the cold storages are almost full to their capacity this year. According to market sources, nearly 65-70 lakh bags have been stored in the cold storages in this area. Higher production for this year has resulted into bumper stocks in the cold storages. Also considerable amount of chilli has also been stored in cold storages of Bangladesh, the prime buyer of Indian chilli. Hence the demand from Bangladesh going forward is a bit uncertain. These factors add to the bearishness. However, lower chinese crop has been the major support for Indian chilli, which will act as a limiting factor for fall in prices. According to market sources, China chilli crop is reported lower by 50% this year and hence good export demand is coming for Indian Chilli. Also Sri Lanka & Malaysia will come into buying from mid-May & June adding support to the bulls. At the moment the bears and bulls balance itself. However, reccently cold storage material is being offered by some suppliers at a Rs 10/kg higher that what was sold before the markets closed. Hence the initial reaction seems to favor the bulls.