Dr. Dinesh T. Bhosale
March 21, 2013
Corn to Six-Week Peak on Dwindling Supplies
Source: Reuters
(dated 19/03/2013)
March 19 - Chicago Board of Trade (CBOT) corn futures rose nearly 1 percent on Tuesday to a six-week peak on dwindling supplies of corn, slow
farmer selling and firm cash basis markets.
Active spot May futures broke above technical resistance at the 200-day moving average, reaching a session high of $7.31 per bushel, the highest for a spot contract
since Feb. 6.
"Corn is reflecting the tight cash situation and strong basis levels. I also think they're putting a little premium in ahead of the USDA report next week," McCambridge
said.
Tight supplies of U.S. corn are expected to again be confirmed when the U.S. Department of Agriculture (USDA) releases its quarterly stocks report at 11:00 a.m.
CDT ( 1600 GMT) on Thursday, March 28.
USDA also will release its prospective plantings of U.S. crops on that day. In its March supply/demand report, the USDA projected the smallest supply of corn in 17
years at the end of summer in the United States, the world's largest supplier.
Wheat resumed its upward march, a day after tumbling 1.5 percent as investors liquidated long positions on concern about bank deposits in Cyprus and how a bailout
in the country would affect the euro zone. Wheat's tumble on Monday also reflected profit taking after seven straight sessions of advances.
"We pushed the market down to oversold conditions so there is some short-covering and profit-taking," said Shawn McCambridge, analyst for Jefferies Bache.
"Also, we're seeing some export tenders show up so it looks like we've gotten down to a point to draw some business in."
Soybeans reversed five days of losses and firmed as investors saw the potential for increased U.S. export business amid slow shipments of soy from South America
and following news that China, the world's largest soybean buyer, planned to cancel soy orders from Brazil.
Soybean futures had tumbled near 5 percent over the past five trading sessions as China moved to the sidelines, a large crop of South American soy became
available to buyers and as crop weather prospects improved in the United States.
At 10:49 a.m. CDT (1549 GMT) , CBOT May wheat was up 7-1/4 cents per bushel at $7.20 per bushel, May corn was up 6 at $7.26 and soybeans for May delivery
were up 8-1/2 cents per bushel at $14.18.
CHINA'S MOVES SCRUTINIZED; EURO ZONE'S TOO
Traders said the soybean market was on edge after China's leading soybean trader, the Sunrise Group, said it would cancel almost 2 million tonnes of Brazilian
soybean cargoes because shipments have been delayed by severe port congestion in the South American nation, a company official said on Tuesday.
"The Chinese cancellations indicates Chinese demand is a little softer than people realized. If they really needed the beans they wouldn't have canceled," said Sterling
Smith, futures specialist for Citigroup.
Wheat, corn and soybean investors also were nervous a day after prices slid on a strong dollar and risk aversion on fears of financial turmoil in Cyprus and the euro
zone.
"Grains and beans could work lower unless there is a big breakdown in the dollar, which is doubtful given the Cyprus situation," Smith said.
"People will probably keep buying the dollar and selling commodities."
The dollar was flat to firm and crude oil was weak as global markets continued to digest the potential longer-term impact of the bailout of Cyprus and that country's
plans for a levy on bank deposits to raise cash for recapitalisation of its banking sector.
The chairman of euro zone finance ministers said there will be no need to impose a levy on assets in other euro zone countries. U.S. crop watchers were also
encouraged by better weather.
"There also is more moisture in the Midwest which will improve soil moisture," Citigroup's Smith said.
Below-normal temperatures and wetter weather are expected in the U.S. crop belt over at least the next two weeks, which will help boost depleted soil moisture
reserves but also slow early spring fieldwork and corn plantings, an agricultural meteorologist said on Tuesday.
"It looks like below normal temperatures on into the first of April so there certainly won't be much planting done," said Don Keeney, meteorologist for MDA Weather
Services.
From allaboutfeed.net
•
•
India: Decline in maize production
According to Second Advance Estimates of Production of Foodgrains
for 2012-2013 forecast, there is a 3.2% decline in the production of
maize from 21.76 million tonnes to 21.06 million tonnes."In a globalised
and market determined economy, there is always a competing demand on
raw materials from different user industries," said Union Commerce &
Industry Minister Anand Sharma in a written reply in the Lok Sabha. "At
present, there is no such proposal to ban or restrict the export of maize," he
said. "The export of agricultural products depends on various factors
including availability of surplus over and above the requirement of buffer
stock including strategic reserve, if any, concerns of food security,
diplomatic/humanitarian considerations, international demand and supply
situation, quality standards in the importing countries, varieties traded and
price competitiveness, need to balance between remunerative prices to the
growers and availability of agricultural products to common man at
affordable prices," said the minister.(allaboutfeed.net)
Hindu Business Line
•
•
Chicken may rule firm as demand outstrips supply
Rising prices of maize are likely to be a source of concern for the Reserve Bank of India over the next two years, with the
demand-supply gap for the key feed ingredient expected to exacerbate in this period. Food inflation in India has been driven
by a sharp rise in the cost of poultry meat, which in turn has been spurred by the spiral ascent of maize (corn) prices globally.
Chicken prices shot up by 21 per cent in January 2013 in comparison to the corresponding month of the previous year. It
was the primary driver of food inflation during the month. Prices of poultry were nearly 14 per cent higher on an average in
2011-12 than the previous year. Simultaneously, eggs and milk prices have also been rising steadily as a consequence of
costlier feed. According to International Grains Council (IGC) forecasts, production of maize is expected to fall short of
consumption by 15 million tonnes (mt) in 2013-14, resulting in upward pressure on prices in India and overseas. The gap is
expected to narrow to 3 mt in 2014-15 as cultivation of the crop is stepped up and in 2015-16, the situation will vastly
improve as production outstrips demand by 3 mt, which will expand to 7 mt in 2016-17 and 2017-18. Over the past five
years, production of maize has only risen by 0.9 per cent, even as consumption grew by 1.7 per cent. In 2013-14, however,
production will shoot up by 10.3 per cent and consumption by 6.2 per cent. Over the 2014-15 to 2017-18 period, demand is
expected to grow by 1.7 per cent and consumption by 5.5 per cent. Spot prices of maize have fallen from their peak of Rs
15,770 a tonne on the MCX in August 2012. But the worst appears to be over and the long-term trend for the agri-commodity
is upward. Corn is presently trading at Rs 13,125 a tonne on the MCX. The immediate support is at Rs 12,950/ tonne and the
support after this level is at Rs 11,750/ tonne. The key resistance will be at Rs 1,410 a tonne. Maize is the third-largest
agricultural crop in India, accounting for over 50 per cent of total kharif coarse cereal production. Production of maize has
grown at a compound annual growth rate (CAGR) of 4.9 per cent over the past decade and amounted to 21.5 mt in 2011-12.
In contrast, consumption of maize has grown at a CAGR of 3.28 per cent and stood at 18-18.5 mt last fiscal. Around 50 per
cent of total consumption is used for feed, primarily poultry feed, while around 5-10 per cent is used by the starch
industry.The weather will play an important role in determining the extent of maize production in 2013-14. Temperature,
rainfall and moisture are factors that determine the condition of the crop. But the minimum support prices announced by the
Government for maize will play an equally important role in motivating greater cultivation of the commodity.At any rate, the
availability of substitute products at a cheaper rate could weaken demand, particularly if the price of corn becomes too high
to stomach. For example, jowar and bajra may be substituted by poultry feed manufacturers instead of maize. But seasonal
fluctuation should be expected, as prices tend to be lower as harvesting progresses and produce starts coming into the
market, but rises at the time of sowing and before harvesting due to the tight supply situation.
Hindu Business Line
•
•
India’s demand for milk likely to touch 210 mt by 2020-21: Amrita Patel
National Dairy Development Board (NDDB) Chairman Amrita Patel on Thursday said
with increased income levels, the demand for milk is expected to go up to 200 -210
million tonnes by 2020-21, and called for collective efforts and increased
productivity.While delivering the keynote address at the 41st Dairy Industry
Conference, with the theme “Global Dairy Industry and Food Security” in Mumbai,
she said the first obligation of the dairy industry is to continue to build and expand the
domestic market and find creative ways with the Central and State Governments to
ensure that an increasing proportion of children drink milk, according to an NDDB
release here. Dr Patel pointed out that milk production has been growing at over four
per cent annually compared to the growth in world milk production which is 2.75 per
cent. Per capita availability of milk has also increased to 290 gm a day, which is
comparable with the world per capita availability of 289 gm/day. Stressing upon a
scientific approach, she said a comprehensive Web-based National Information
Network covering all aspects of productivity enhancement, i.e., breeding, feeding and
healthcare, has been developed at NDDB and is available to any organisation,
producer, service provider and policy maker that wishes to link up. The NDDB is also
setting up a national HRD facility to offer need-based technical, managerial and
leadership training programmes, deliver distance education and facilitate training of
trainers. The dairy industry must ensure that prices remained affordable and
competitive, she added.
Category
2007
2020
CB cattle
33.06
65.30
Indigenous cattle
166.02
161.37
Buffalo
105.33
115.60
Sheep
71.56
74.78
Goat
140.53
142.23
Pigs
11.13
11.91
Poultry
648.83
1062.69
Fish**
7.13
12.38
** million tons
Crossbreds double, poultry 1.6 times, fish 1.7 times
Source: NIANP, 2012
Scenario I
Scenario II
Scenario III
10
7
0
-3
-10
-9
-7
-8
-20
Dry fodder
-25
-30
Green fodder
-29
Concentrates
-33
-40
-50
-47
Scenario I – 100% each to productive & non productive animals
Scenario II – 90% to productive animals & 80% to non productive animals
Scenario III – 90% to productive animals & 60% to non productive animals
Category
Dry fodder
Green fodder
Concentrate
Requirements * Availability *
%
(million tons) (million tons) Deficit *
530
404
24
880
96
NIANP Estimates
590
61
33
37
Oilseed
Production
(Million tons)
Extraction rate of
cake (%)
Potential Oil
Cake (MT)
6.95 #
60
2.92
Rape & Mustard
6.96
67
4.66
Soybean
12.2
73
8.91
Sesame
0.73
60
0.44
Sunflower
0.54
70
0.38
Lineseed
0.14
67
0.09
Niger
0.09
72
0.06
Safflower
0.09
70
0.06
Cotton
35.2*
84
3.32
Ground Nut
Total
20.85
 # kernels to nuts ratio- 70%
 *million bales of 170 kg each consisting of 2/3 seeds and 1/3 cotton
 Assuming 60-70% of the potential availability ( leaving aside the direct consumption, use as seeds, differences in extraction
efficiency etc) the actual availability works out to be around 12-14 million tons.
32 Million
53 Million
60 mil/wk
100 mil/wk
65 Billion
93 Billion
Source: Internal analysis
65 Billion eggs produced / year`
@ 125 Grams of layer feed / egg
8.1 Million MT of layer feed
Approximately 85% is home mix
Sizing the market for poultry feed
Source: BAHS 2010 (Ministry of Agriculture); Internal estimates
60 Million broiler / Week
@ 3.5 Kg of feed /
broiler
10.9 million MT of broiler
feed
Sizing the market for Poultry feed
Source: BAHS 2010 (Ministry of Agriculture); Internal estimates
0.19 MT
3.65 MT
0.34 MT
6.76 MT
Source: Internal analysis
3.65 million MT of pond cultivation
525,000 MT of floating fish feed @ 1.2
FCR
70,000 MT of sinking fish feed @ 1.5
FCR
Rest is RM feeding (DORB) @ 3.0 FCR
Sizing the market for aqua feed
Source: Internal estimates
185,000 MT of shrimp production @
1.5 FCR > at least 50% now vannamei
2.80 lakh MT of shrimp feed
Sizing the market for aqua feed
Source: Internal Estimates
State
4,05,000
34.0
Area
developed
(ha)
50,405
31,600
2.7
12,877
40.8
1,50,000
12.6
76,687
51.1
800
0.1
130
16.3
Tamil Nadu
56,000
4.7
5,286
9.4
Kerala
65,000
5.5
14,106
21.7
8,000
0.7
1,910
23.9
Goa
18,500
1.6
310
1.7
Maharashtra
80,000
6.7
1,281
1.6
3,76,000
31.6
2,271
0.6
1,65,263
13.9
West Bengal
Orissa
Andhra Pradesh
Pondicherry
Karnataka
Gujarat
Total
Potential
area ( ha)
11,90,900
Potential
area ( %)
Area
developed
(%)
12.5
Source: Internal data
1
• Nutrient Density
2
• Local Availability
3
• Cost
4
• Seasonal Availability
5
• Limited Inclusion Rate
6
• Handling / Processing/ Storage
7
• Health / Production Effects
• To a nutritionist maize is one of the golden ingredients
which solves a lot of problems. It is a good source of
energy and there is no other ingredient which can
compete with maize in terms of its energy value. It is
basically a source of energy and gives around 3250
kcal/kg ME. The main advantage of maize is that it
contains less crude fiber and the number of incriminating
factors are also very less in it. However, it is poor source
of limiting amino acids.
• In fact, if maize is available at good prices, it can be
included at very high levels. Generally, in broiler diets
the inclusion level of maize may vary between 55-70%
from the starter to the finisher stages. As such there is
no such upper limit for inclusion of maize because there
is practically no toxic or antinutritional factors present
there. Today we are looking for some alternative
ingredients only because the price of maize has gone
up. Had it been available at RS 11 a kg then the
formulation job would have been much easier.
• Very difficult to get maize replaced as we do not have any ingredient
which is comparable to maize in terms of nutritive values. The only
comparison can be made with broken rice. However, in pelleted
feeds, broken rice above 20-25% may pose problem in getting good
quality pellets. Wheat may be another option but again you can not
get as much energy from wheat as you can get from maize.
However, when maize is not available or highly priced then
alternatives may be bajra or jower. In mash feed broken rice will also
work. Generally, for millets the 20-25 % inclusion does not have any
negative impact. Total replacement of maize is also possible with
these ingredients although that will be a high risk affair.
Maize Requirements
•
•
•
•
•
Broiler Feeds: 6.5 MMT
Layer Feeds: 3.5 MMT
Cattle Feeds” 1 MMT
Others: 1 MMT
Total: 12 MMT
Raw material cost – accounts for 70% of
feed production.
Tends to rise when operation becomes
bigger.
Good input gives better finished products.
Paying attention to raw material quality
always gives dividend
Feed ingredients are by products
from other industries.
Quality of raw material depends a
lot on the processing of the main
material – beyond the control of the
manufacturer.
A sort of underdog situation !!!!
Difficult indeed –
unless there is a
high grade QC lab.
NIR is the most reliable
way to get the most
realistic picture.
Wet chemistry is time
consuming – may be
erroneous if the lab
technician is not trained
enough.
Automation in moisture
analysis is a good way
– needs regular
calibration.
Yellow Maize Specifications
•
•
•
•
•
•
•
•
•
Moisture
Foreign matter
Weevilled Seeds
Damaged otherwise
Discoloured/immature kernels
Broken seeds
Aflatoxin
Free from live weevils
: min 12 to max 14.0%
: max 2%
: max 2%
: max 5%
: max 5%
: max 2%
: 30 ppb to 50 ppb
Private
Sector %
80%
78%
73%
67%
67%
71%
24%
But That Would Require R&D, Which Almost No Indian Company Is Doing
Source: European Commission, CII
Rs crore
(Current Prices)
Sector
GDP
FY2009-10
ICAR
Budget
FY2011-12
Livestock
170,237
533
Total Agriculture
767,119
4611
22.2%
11.6%
Livestock as % of Total
ICAR budgets also ignore animal science
Source: CSO, ICAR
R&D Expenses
Total Sales
R&D as % of Sales
Nutreco
Tyson Foods
EUR 19.8 million
USD 38.0 million
EUR 4.9 billion
USD 28.4 billion
0.40%
0.13%
Could we all agree to invest
0.25%?
we need to adopt global animal science R&D funding benchmarks
Source: Annual Reports
 Dr. Dinesh T. Bhosale (Chairman)
 Mr. Rahul Kumar (Deputy Chairman)
 Dr. Sandeep Karkhanis (Deputy Chairman)
 Mr. Amit Saraogi (Deputy Chairman)
 Dr. P. G. Phalke (Hon’ Secretary)