Did maize prices in India bottom out for this season?

Maize prices have started rebounding in the past few days. Prices in Chhindwara rose about 5% since November 1 to date, trading at Rs 2,200 per quintal (ex-warehouse). In the ongoing season, maize prices bottomed out at Rs 2,100 levels, touched on October 27, 2022.

Thereafter, prices have traded in a narrow range of Rs 2,110-2,170 for a fortnight. Meanwhile, yesterday the prices hit the resistance level of Rs 2,200, and we expect the prices to trade bullish in the coming days.

“Maize prices in Chhindwara would touch Rs 2,250 for a very short-term and then Rs 2,300 in the medium-term.”

Strong demand for maize kept the prices firm despite the peak arrival season.

Buying remained quite strong from the poultry and starch industries to cover their demand, as their buying remained hand-to-mouth in the previous few months due to higher prices.

In addition to domestic demand, the export demand for maize from India remains strong, with about 5 vessels booked for exports in the last few days, mostly to the Southeast Asian nations.

Meanwhile, the rail rake movement for maize was higher compared to last year. Rake movement from Madhya Pradesh was around 2.60 Lakh MT, up by 56% year-on-year, and from Karnataka, around 1 Lakh MT, up 30% year-on-year.

Around 85,000 MT of maize was moved by rakes to the seaports of Visakhapatnam, Krishnapatnam, Chennai, and Mangalore.

Maize arrivals improved since the last fortnight

The new maize crop arrivals in India from 1st October to 18th November 2022 were 13.18 Lakh MT, 5.8% higher than the same period last year. During October, arrivals were 16% lower than last year due to the unseasonal rains owing to which harvesting was delayed.

Arrivals improved in November and remained about 26% higher during November 1-18 period as compared to the same period last year. The state-wise breakup of maize arrivals is shown in the chart below:

Source: Agmarknet

Rabi maize sowing pick pace

The rabi-sowing data published by the Ministry of Agriculture as of 18th Nov showed that maize sowing stood at 3.92 lakh Ha, 26% higher than the previous year.

Sowing remains higher in Gujarat, Maharashtra, Karnataka, Bihar, West Bengal, Tamil Nadu, and Andhra Pradesh, while it lagged in Telangana. The state-wise breakup of maize sowing progress is shown in the chart below:

India remained a consistent maize exporter for the last 2 years.

Maize exports during the 2021-22 marketing year (October 2021 – September 2022), India exported 3.43 Million MT of maize against 3.70 Million MT in the previous year. Bangladesh was the major export destination with a 52% share of total exports, Vietnam and Malaysia accounted for 27%, and Nepal 14%.

International Market

Corn prices in CBOT for December futures softened by around 4% from month to date. The volatility over the extension of the Black Sea grain corridor kept the corn prices firm.

However, the extension of the Black Sea grain corridor deal for another 120 days, sighed relief to global trade. CBOT Corn December Futures are likely to trade weak in the price band of $650-690 cents/bushel in the short term.