Market Commentary: Today was Green but Headwinds for the Week
Corn, soymeal, live cattle and lean hogs all traded lower during the morning start but by the end of the day, only lean hogs ended lower. There were modest volumes being traded on Friday for most contracts, except feeder cattle where it was nearly double the five-day average.December soymeal hi...
Cow-Calf Margins Steady in November, Herd Expansion Still Likely
Despite recent decreases in feeder cattle futures and rising feedstuff costs, estimated cow-calf producer margins are largely unchanged from WPI’s October estimate. The stable and positive financial environment means that producers are still facing strong financial incentives to expand the U.S...
McSustainability Through Feed Efficiency
McDonalds has entered the sustainability space by partnering with Syngenta and paying cattle producers to use Syngenta’s Enogen Trait corn to improve feed efficiency. Enogen corn contains an enzyme, alpha amylase. This enzyme has been added during the ethanol production process to induce starch...
Livestock Roundup: Turkey Production Adjusted Down
Turkey production in August totaled 434.7 million pounds, slightly above July production but down 11 percent year-over-year. August slaughter was down 15 percent year-over-year, but heavier weights in August (32.25 pounds) offset the reduced slaughter. Based on the August production data, estim...
FOB Prices and Freight Rates App (Updated 15 November)
Ocean Freight Comments - 15 November 2024By Matt HerringtonDry bulk freight markets were mixed this week with Capes rising while Supramax vessel rates declined yet again. The Capesize sector found support from China’s recent efforts to stockpile coal and iron ore, but this support has not yet t...
Market Commentary: Biofuel and Trade Policy Worries Pressure CBOT along with Dollar Strength
The CBOT saw another day of pronounced weakness with expectations for larger global soybean and wheat production and stocks in 2025 weighing on values. Product demand in the soy complex has also been a huge negative factor recently with uncertainty over U.S. biofuels policy causing a sharp redu...
Oilseed Highlights: Multi-Bearish Factors
The MarketThe January soybean contract has been sliding all week and despite support at the 20-day moving average of $10.01/ST, it closed today below $10/bushel for the first time this month. The reasons are many including: a rising dollar value, 2) large impending South American production, 3)...
Market Commentary: Bearish Beat Goes On
The CBOT was essentially all red on Wednesday with traders finding little support from either the fundamental or technical components of commodity price analysis. Wheat was the downside leader for the day as a strong dollar, improving conditions in the Plains, and increasingly tepid exports fro...
EU Studies Trading Houses
As part of its witch hunt for unfair market practices, the EU Parliament’s AGRI Committee requested a study of the major agricultural commodity trading companies and their impacts. The study may inform populists in the U.S. that also see consolidated industries as inherently harmful, but...
USA Gone Nuts
While oilseeds receive much of the attention, tree nuts, which are technically a seed and containing oil, have gone even more gangbusters for U.S. producers in recent years. Almonds have received much of the focus as the U.S. produces nearly 80 percent of the crop and a comparable share of the...
Black Sea Regional Analysis
Russian Grain Markets: 4 – 8 November 2024We have heard the voices from various sources forecasting a new grain crop in Russia and most of them differ in numbers. We will have to deal with terminology like bunker weight (straight from the combine) and standard weight (cleaned and dried accepted...
WPI Crop Progress and Conditions App (Updated 12 November)
Update for 1 April 2024: Last year, users pointed out differences between the 5-year averages reported in this app and what USDA estimates in its weekly report. The difference exists because WPI calculates average based on the last 5 years of observations for the current week. In cases where ob...
Market Commentary: Funds Resume Soy Complex Selling; Wheat Falls on Improved Weather
The CBOT was almost uniformly in the red on Tuesday with any bullish supply-side implications from the November WASDE largely forgotten (or ignored) amid bearish demand-side developments. The recent rally in the U.S. dollar is threatening to undo much of the export demand gains the market has w...
Cuban Pipedream
Some in the U.S. agriculture community have spent years trying to improve sales to Cuba, which have increased though from a very small base. Now there is even less reason to think they’ll succeed. Their pipedream has been a hungry population of around 11 million people just 60 miles off the Ame...
Trump’s Tariff Plan; Whither Europe; RTO Beats WFH
Trump’s Tariff PlanFew things attract more speculation than how President-Elect Donald Trump will model his plan to increase tariffs on imports. Some economists have taken his most exaggerated claims and predict they will cause slower economic growth and higher inflation. At least one advisor s...
Political Landscape Taking Shape
After the 2024 elections, the Republicans look to have taken control of Congress, along with a Trump victory, providing a Republican triple sweep. The Senate GOP majority is 53 to 47; and the House GOP majority is still TBD. However, as of today, the Republicans have secured 215 seats, and Demo...
Middle East, Mediterranean and Africa Regional Analysis
Regional UpdatesMEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGIONPakistan has decided to allow the importation of GMO soybeans from the U.S. – critics say that this decision was made without proper risk assessment and was only done due to pressure from large industrial companies. Forty...
Livestock Industry Margins
WPI is excited to present the latest edition of our newest data-driven publication Ag Perspectives Quant: U.S. Livestock Industry Profit Margins. This report offers a comprehensive look at the profitability of the U.S. beef and pork sectors, from cow-calf and farrow-to-finish producers up the v...
Market Commentary: CBOT Slips as Demand Worries Overtake Supply-Side Surprises
The November WASDE offered mixed influences for the major ag markets with USDA making surprise cuts to the U.S. corn and soybean crops and ending stocks, which rallied markets on Friday. The report also, however, cast doubts on the demand-side outlook for both crops and wheat, and that is what...
Deep Bench to Fight RFK; China Market Risk; Thankless Job
Deep Bench to Fight RFKBeing the U.S. Secretary of Agriculture is usually a pretty good job. It involves doling out billions of dollars, the constituency is dominated by courteous country people, and controversies tend to be minor. The person serving the longest in any Cabinet position was Jame...
Rice as a Stable Crop
Last year, India restricted non-Basmati rice exports believing there would be a weather-related short supply. Production was ample and now the country faces record high inventories that will likely be dumped on the world market. The OECD calculates that Indian farmers are implicitly taxed $120...
Senate Committee Changes and Ethanol Legislation
As WPI noted a week ago on 4 November, As a general rule, a Republican agenda is likely to be friendlier to liquid fuels, especially petroleum fuels, whereas a Democrat agenda is more likely to include a role for electric vehicles, and a renewable fuels policy that will focus on reducing c...
Mercosur Regional Analysis
Wheat As of the end of the first week of November, 12 percent of Argentina’s sown wheat area has already been harvested. Harvesting is progressing quickly in the country’s north, with yields that are low but within expectations. Although a few more weeks will pass before the harvest is wid...
CFTC COT Report Analysis
The major finding of Friday’s CFTC report was the confirmation that funds have officially flipped their formerly massive net short in corn to a net long. After buying back nearly 40,000 contracts last week, funds now sit long 3,035 contracts as of 5 November, a position which was extended signi...
Market Commentary: Somewhat Tumultuous WASDE
The November WASDE report usually involves some tweaking of the numbers by USDA, and that is all it mostly was today, but with some quirky impacts. First, there were a few surprises but not dramatic ones and yet the report spurred larger to outsized volume in trading across the grain and oilsee...
Who Might Be the Next Ag Secretary?
As most Presidents-elect do, former President and President-elect Donald Trump has named his new White House Chief of Staff as his first appointment. It is Susi S. Wiles. Wiles was the co-manager of Trump’s 2024 campaign, and also was a key strategist focused on Florida in his 2016 and 2020 cam...
WPI 2025 Hog and Pork Outlook
U.S. hog producers saw a mixed year in 2024 with early-year prices bringing poor profitability while the dramatic hog rally since the summer has lifted financial fortunes significantly. A major component of those rising prices was the unexpected surge in pork demand, which pushed the cutout to...
Market Commentary: Soybeans, Soyoil Rally on Export Numbers; Cattle Gain on Macro Strength
The CBOT was mixed on Thursday following the news of Donald Trump’s election to President of the United States with markets, particularly corn and cattle futures, seeing continued support from “risk on” trade. It’s not necessarily that traders and investors are particularly excited about Trump’...
Transatlantic Trade War; Traders Beat Pollsters; Transatlantic Lesson
Transatlantic Trade WarU.S. equity markets rose yesterday on news of Donald Trump’s victory, while shares in Europe fell. The EU is America’s biggest trading partner and Trump promises tariffs. EU officials are strategizing on how to deal with a Trump presidency, with some urging cooperation, a...
Livestock Roundup: Beef Overview
Little to no action has been reported in the cash markets and asking prices are back at $190/cwt and higher. Cattle supply numbers are tighter in the south than in the north, and carcass weights took a pause from the steep rise that has taken them to all-time highs this year. The latest report...
Oilseed Highlights: On an Upswing
The MarketThe January soybean contract is up 3.2 percent on the week and has is now up 3.5 percent from its late October low at 979/bushel, but it is still 5 percent below its late August high at 1083/bushel.11072024oilseeds_beans.png 1.16 MBUntil today’s turnaround following very large export...
Market Commentary: Mild Election Impacts
Outside markets closed higher and the dollar was up, but not because of bullishness over Mr. Trump’s victory. The business sector likes his pledge for lower taxes and less regulation but is less enthralled with his attraction to tariffs. In fact, the tariffs are expected to be inflationary, cau...
The Day After
The political establishment in Washington is stunned following yesterday's rout by Donald Trump and the Republicans. The Democrats’ arch nemesis not only survived everything they threw at him, but he also took an increasing share of the minority voting block that they claimed as their own. It w...
WPI Preliminary 2025 Acreage Forecasts
The polling for the 2024 U.S. Presidential election had significant forecast errors and history will likely judge the numbers as “wrong”. While it’s hard to argue against such judgement when the results proved a historic sweep for Trump versus predictions of a tight race, the pre-election polls...
Black Sea Regional Analysis
Russian Grain Markets: 28 October – 1 November 2024Russian analysts revised the 2024 Russian crop downwards to 128.8 MMT without newly occupied territories but with Crimea which was occupied a decade ago. This new forecast is down 11 percent from the previous year. Wheat is at 85.6 MMT – down 8...
Market Commentary: Election Day Brings CBOT Gains
It’s election day in the U.S. and the nation will decide on new leadership for the White House and Congress, though results may not be available for days or possibly even weeks. National polls indicate a tight race between candidates Trump and Harris, but betting markets tell a different story...
Tax Policy Outlook Post Election
After the votes are fully counted, as a new Administration forms, and Congress organizes, WPI will take a deeper look into the policy implications of today’s election. From today’s point of view, unless this election is an unexpected blowout (countering polling data that shows it neck and neck...
EU Confirmation Hearings; Japanese Independence; Lemonades out of Lemons; Border War
EU Confirmation HearingsIn a few months, it will be the turn of either Donald Trump or Kamala Harris’s cabinet nominees to seek confirmation by the legislature but this week it is Europe’s Commission designates confronting the hurdle of the European Parliament (EP). Maroš Šefčovič, Commissioner...
Middle East, Mediterranean and Africa Regional Analysis
Regional UpdatesMEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGIONTunisia will shortly receive a shipment of 33,000 MT of U.S. corn, the first shipment in quite a while. The U.S. Grains Council office in Tunis says that they expect more U.S. corn imports in the coming weeks.Morocco has...
Livestock Industry Margins
WPI is excited to present the second edition of our newest data-driven publication Ag Perspectives Quant: U.S. Livestock Industry Profit Margins. This report offers a comprehensive look at the profitability of the U.S. beef and pork sectors, from cow-calf and farrow-to-finish producers up the v...
Market Commentary: Grains Rise on Export Demand; Soyoil, Livestock Fall on Technical Trade
The CBOT was mostly higher to start the week with fresh daily export sales announcements and a solid Export Inspections report underpinning the day’s moves. While corn, soybeans, and KC wheat all settled higher for the day, gains were muted as few traders were interested in adding significant r...
Renewable Fuel Policy Outlook in 2025
Tomorrow is election day; the make-up of Congress and who is in the White House is expected to have an impact on renewable fuel policy in 2025. As a general rule, a Republican agenda is likely to be friendlier to liquid fuels, especially petroleum fuels, whereas a Democrat agenda is more likely...
Transatlantic Inverse; Farm Bill Chances
Transatlantic InverseDepending on tomorrow’s election outcome, American businesses will either be saddled with more taxes, regulations, and attacks on consolidation, or be hit with higher import tariffs and maybe the goofy ideas of people like Robert F. Kennedy, Jr. By contrast, Europe has now...
Mercosur Regional Analysis
Wheat The long-awaited rains have finally arrived in southeastern Buenos Aires, with precipitation totals ranging from 20–50 mm. While the rainfall isn’t sufficient to complete the wheat crop, it provides relief to an area where plants were beginning to suffer. For now, it halts the declin...
European Market Analysis
Regional News Algeria bought 600 KMT of wheat in its tender that closed on Monday, buying the full volume permitted, and prices are rumored to be near $263/MT C&F. Traders suspect much of the wheat is Black Sea-origin, given the diplomatic tensions between Paris and Algiers right now...
CFTC COT Report Analysis
Through 29 October, funds continued their aggressive short covering in the corn market with strong export sales justifying the move. Funds reduced their net short position by about 60 percent last week, and now hold a relatively small position of 35,000 contracts short. The continued exit from...
State Directed Meat; Living Space
State Directed MeatUSDA has been issuing loans and grants to startup livestock businesses with the goal of diversifying the industry, providing producers with more options, and lowering the price of meat. Now Pure Prairie Poultry of Minnesota, a beneficiary of $38.7 million in loan guarantees a...
Market Commentary: A Week of Notable Numbers
Except for soymeal, the rest of the grains and oilseeds contracts traded higher in the overnight, and opened higher this morning, but only corn and soyoil ended the day higher. New contract highs were scored today in lean hogs and Malaysian palm oil. A new contract low was marked today fo...
October Jobs Report Tepid
The Bureau of Labor Statistics (BLS) released the October jobs report this morning. Total nonfarm payroll employment was essentially unchanged in October (+12,000), and the unemployment rate was unchanged at 4.1 percent. The pre-report consensus was for an additional 100,000 payroll...
U.S. Soybean Crush Margin Outlook
The three legs of the U.S. soybean crush have each seen interesting and divergent dynamics over the past month that have influenced the crush margin outlook. Notably, soymeal prices have slumped $30/MT lower since early October and are hovering near contract lows just below the $300 mark. Conve...
Market Commentary: CBOT Debates Following Seasonal Rules
The CBOT was mixed for the day with wheat futures sinking lower after the HRW and SRW growing regions received favorable rains Wednesday and early Thursday. That, combined with export pressure from Russia and the Black Sea countries, put wheat on the defensive with funds emerging as net sellers...
Oilseed Highlights: Bounce off the Bottom?
The MarketJanuary soybeans have now rebounded a second day in a row after opening the week lower. While it came within 10-cents of the contract low, exports are booming and most of the bearish inputs (better weather and large South American crops, a weaker real, harvest pressure, and rising glo...
Livestock Roundup: Broiler Outlook
Broiler slaughter was 158.86 million head last week, up from 158.139 million the week before and continuing to run above a year ago. Broiler production in the last quarter of 2024 is forecast to be up 4 percent, bringing the total annual production up 2.2 percent from 2023. Any miss in th...
Market Commentary: End-of-Month Trade, Profit Taking Create Mixed Markets
The CBOT was mixed in moderate-volume trade on Wednesday with markets across the board seeing impacts from end-of-month position adjusting and profit taking. Wheat futures were higher on poor U.S. conditions ratings and drought conditions in the Southern Plains, despite forecasts of rains this...
Misdirected Fire; Over-Capacity
Misdirected FireThe Kamala Harris campaign is frustrated that the economy is hot, inflation has dissipated to just 2.4 percent, and yet voters are not feeling it. Politicians learned long ago to never tell the voters they are wrong and have misperceptions. Consequently, she has been acknowledgi...
Black Sea Regional Analysis
Russian Grain Markets: 21 – 25 October 2024The Russian grain markets remained stable on the export front and slightly bearish after recent peaks. Domestic prices are trying to catch up with export price levels and even in Siberia, prices were recovering. Global pricing effects export prices in...
Market Commentary: Poor Conditions Rally Wheat; Big Crop(s) Pressure Soybeans; Hogs Hit New Highs
The CBOT was mostly higher on Tuesday with the wheat market in the lead on worrying crop conditions and persistent drought in the HRW growing region. USDA’s initial crop ratings for the winter wheat crop were the second lowest for the week since the mid-1980s, which means the rains in the two-w...
Livestock Industry Margins
WPI is excited to present a new, weekly, data-driven publication Ag Perspectives Quant: U.S. Livestock Industry Profit Margins. This report offers a comprehensive look at the profitability of the U.S. beef and pork sectors, from cow-calf and farrow-to-finish producers up the value chain through...
Interest Rate Outlook
The Fed meets next week, the day after the election. It looks likely there will be a rate cut again for the second time in as many meetings. The federal funds futures market is pricing in a 95.4 percent probability of a cut. At the September meeting, Fed members signaled another 50 basis point...
Post-Election Transatlantic
The EU’s dependency on the U.S. for both defense and economic well-being has focused discussions in Brussels on what the relationship will look like should Donald Trump win on 5 November. The Biden Administration initiated a Trade and Technology Council (TTC) in 2021 with designs to coordinate...
Middle East, Mediterranean and Africa Regional Analysis
Regional UpdatesMEDITERRANEAN, MIDDLE EAST, NORTH AFRICA, and AFRICA – MEA REGIONTurkey’s wheat production is seen dropping by 5.5 percent to 20.8 MMT according to Turksat estimates. It also sees barley production down by 11 percent to 8.2 MMT and corn down by 8 percent to 8.3 MMT. Soybean prod...
Market Commentary: Oil Drags CBOT Lower; Hogs Hit New Highs; Cattle Rise After Report
The CBOT was mostly lower for the day with the sharp decline in crude oil futures dragging soyoil, the broader soy complex, and corn and wheat lower. There was little fresh fundamental news to guide commodity futures for the day, which gave the oil market’s plunge an outsized influence on ag fu...
Newsom for President; Fake Meat Lacks Standing
Newsome for PresidentUntil this past Friday, U.S. ethanol producers feared that the California Air Resources Board (CARB) might make an effort to limit the marketing of their products in the Golden State. Now they are singing in the streets as California Governor Gavin Newsom instructed CARB to...
Food Price Outlook Improves
There are often lags in time between when consumers notice a change in the economy, they begin to voice concerns, politicians begin to echo those concerns, and ultimately policymakers take some form of action, if any. Food price inflation is a perfect example of that dynamic. Democratic preside...
RFK Jr Role in a Potential Trump Admin Worrying Aggies
With the election one week from tomorrow, many aggies are turning their attention to the probable role of Robert F. Kennedy Jr. in a Trump Administration should Trump win the election. Over the last week, this is literally the biggest topic of conversation among this analyst’s contacts and sour...
European Market Analysis
Regional News Russia’s winter crops may see 1.5 million hectares (Mha) go unseeded this year due to poor weather in key growing regions. Originally, 20 Mha was expected to be sown to all winter crops. Grain production in 2025 is unlikely to exceed 120 MMT now, due to the acreage reduction...
Mercosur Regional Analysis
Weather Argentina saw continued rainfall throughout last week and so far during October, nearly all of the country’s agricultural regions experienced at least some precipitation. In areas like the Nucleus Region, totals have even exceeded historical averages for October. This rainfall has...
CFTC COT Report Analysis
Through 22 October, funds engaged in the expected short covering in the corn market amid the unexpected surge in exports. Funds’ total buying volume, however, was below expectations at just shy of 20,000 contracts though they certainly added to that number after Tuesday’s data reporting deadlin...
Market Commentary: Mix Week Reflecting Fundamentals
Yesterday’s bullish Export Sales report was followed by more sales of corn and soybeans today. However, there had already been sufficient gains in the futures market this week and current sales are simply on track with USDA’s forecast. The trade does not want to get too far out in front of the...
Cattle on Feed Report
USDA released the monthly Cattle on Feed report today, which was mostly in line with pre-report expectations; only placements came outside of the consensus forecast. 10252024dj.jpg 50.4 KBSeptember marks the beginning of the fall run for cattle placements. Placements last month at 2.156 million...
Forecasting 2025 Cattle Inventories: Small Herd Increases Expected
As WPI has written about several times recently, the beef industry is eagerly awaiting the January Cattle Inventory report from USDA to see whether producers are starting to expand the herd. This information will be valuable for gauging cattle supplies in 2025 and 2026 and will help set pricing...
Market Commentary: Corn, Wheat Rise on Export Data; Soybeans Fall on South American Weather
Exports remain the name of the commodity game this week with all eyes on the UDSA daily “flash” export sales announcements as well as this week’s weekly Export Sales report. On Thursday, both of those factors did not disappoint and gave the already bullish corn market another boost. USDA report...
Oilseed Highlights: Steady Under a Delicate Balance
The MarketU.S. soybean exports have been impressive, but funds continue to focus on South American rains. For the week to date, November soybean futures are higher but cannot maintain a close back up over $10/bushel. They are challenging resistance but remain below the 50-day MA at 1007.25/bush...
BRICS Grain Exchange; Transatlantic Gaslighting
BRICS Grain ExchangeVladmir Putin used his BRICS conference in Kazan, Russia to formally suggest the creation of a grain exchange by the bloc of countries. He said such an exchange could later be expanded to other products and that it would " contribute to the formation of fair and predictable...
Livestock Roundup: Cattle on Feed Preview
USDA will release its Cattle on Feed report tomorrow; the pre-report consensus of analysts’ estimates is for the inventory of cattle on feed as of 1 October to be 99.7 percent of last year; September placements and marketings are expected to be 95.8 and 102 percent respectively of last year’s t...
Market Commentary: More Exports, More Gains
A sixth straight day of daily “flash” export sales announcements from USDA sent CBOT corn and soybean futures higher with funds covering shorts and commercials positioning bullishly too. The export demand for corn caught the market by surprise and has created the current rally, while the season...
Inflation Disconnect; Economic Opinions
Inflation DisconnectEconomists including those at the Federal Reserve use so-called core inflation when assessing the level of rising prices in the economy. Core inflation excludes food and energy prices since they are considered more volatile, and less directly impacted by the Fed’s monetary p...
TFP as Focus
The International Monetary Fund increased its forecast for U.S. GDP growth this year to 2.8 percent, versus 0.8 percent for the Euro Area and the 0.9 percent average for the non-U.S. G-7 countries. Competitiveness is said to be the primary term in Brussels these days, as it should be. The avera...
Mercosur Regional Analysis: Soybeans
Last week, soybean trading saw a lot of activity, particularly with Brazilian old crop shipments and increased movement in U.S. new crop sales. CNF China trade levels began at 240X for the PNW and 255X for the U.S. Gulf, rising rapidly due to several factors. A drop in Chicago futures triggered...
Black Sea Regional Analysis
Russian Grain Markets: 14 – 18 October 2024Russian grain markets remained slightly bullish but not as bullish as a week ago. The biggest concern of all grain exporters is a “threat” from the Russian Grain Export Union that October export prices should be $240/MT and that to make this happen the...
Market Commentary: Exports, Weather Concerns Push CBOT Higher
The CBOT was mostly higher on Tuesday as export demand continues to fuel what looks like the start of a demand-led swing higher in the markets. Tuesday marked the fifth straight business day with a “flash” export sales announcement for corn, with Mexico responsible for essentially all of the de...
U.S. Dietary Guidelines: Booze and Junk Food
Every five years, the Dietary Guidelines for Americans, issued by USDA and the Department of Health and Human Services (HHS) are updated. The new guidelines will be issued next year for 2025-2030. This guidance provides advice on what to eat and drink to meet nutrient needs, promote health, and...
Policy Shortz
U.S. – EU Reset: The transatlantic relationship must be reset after the upcoming election. Brussels produced a state-by-state report on Europe’s trade and investment engagement to help set the environment. U.S. technology firms argue it is ludicrous for Europe to think it can be competitive in...
Bangladesh Food Import Projection
Bangladesh is the third largest food importer in the world. It imports over $15 billion worth of food annually or about 11 percent of its total food consumption. Imports include 5 MMT of grain (3.57 MMT is wheat), plus palm oil, milk powder, and other products. Roughly 3.5 percent of its food i...
The Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN, MIDDLE EAST, NORTH AFRICA, AFRICA – MEA REGIONAfrica spends $75 billion every year importing cereals according to the African Development Bank – 50 MMT being wheat – 27 MMT imported by North Africa, 12 MMT by East Africa and 9 MMT by West Africa. Wheat...
Market Commentary: Exports Rally Corn, Soybeans but Pressure Wheat; Hogs Hit New Contract Highs
The CBOT saw mixed trade again to start the week with a slate of fresh daily “flash” export sales announcements supporting corn and soybeans, as did a generally positive Export Inspections report. That helped soybeans recover from Friday’s drubbing and allowed the corn market to follow through...
Biggest Monopoly; Aggies Challenge Trump; Food Safety Risks and Perceptions
Biggest MonopolyReflecting voter concerns about food inflation, both Harris and Trump are attacking the food system and implying concerns about monopoly power. But no industry is as monopolistic as politics where consumer choice is often limited to just two parties. Voters are near evenly split...
Aging, Shrinking Dairy Herd Tied to Beef Dynamics
There has been much discussion this year to the size of the beef cattle herd. The year started with the lowest overall cattle herd since 1951. Demand for beef, high prices for beef and cattle, and marginal increases in imported feeder cattle have all helped maintain production, as has heavier s...
The Mercosur Regional Analysis
WeatherThe week continued with rain in some areas of the agricultural region that spread water across almost the entire region, ending a 10-day period of instability. The exceptions were the western part of Buenos Aires Province, which received only a few millimeters despite needing more, and t...
Olive Oil Volatility
Bloomberg notes the problems confronting small scale olive oil producers in Spain and Italy. Production is volatile and has been under duress from drought and climate change. As a result, the price has risen, attracting investors who are creating larger scale farms. The article says, “The Super...
European Market Analysis
Regional News Kazakhstan and Egypt are working to negotiated trade terms that would allow wheat to trade from the former country to the latter. The two countries are reportedly working on resolving issues that prevent Kazakhstan from participating in GASC tenders and are discussing the pos...
CFTC COT Report Analysis
Through 15 October, funds reversed their short covering trends and emerged as net sellers in the soybean, corn, and soymeal markets after the bearish October WASDE and shift towards wetter weather in South America. Funds doubled their short position in soybean futures and are now short a small...
Market Commentary: Harvest Pressure Outweighs Demand
There was modest to lower volume generally today, except in wheat where there was a gang beating. Wheat closed lower in the overnight, opened lower this morning, and sealed the deal with losses at the close. Soyoil was treated similarly but soybeans and corn each were higher in the overnight an...
Food Inflation and the Food Service Sector
September retail sales rose slightly more than expected and the underlying details of the report were solid. Sales rose 0.4 percent in September versus a consensus expected rise of 0.3 percent, while revisions to the prior months’ activity pushed the overall gain to 0.5 percent. The monthly inc...
Cow-Calf Margins Outperform Forecasts, Imply Herd Rebuilding
With the start of the fall weaning and marketing program for most of America’s cow-calf producers, we’re starting to see the first realized profits for the sector this year. From January through September, WPI’s cow-calf profit models are built upon the assumption that most producers will marke...
Market Commentary: Turnaround Thursday on Exports, Weather
Bears started out the week in full control of the CBOT, but their grip loosened on Thursday and bulls managed to post at turnaround in several markets. Chief among the turnaround was corn futures where an early dip below $4.00 in the December contract triggered short covering and some commercia...
Livestock Roundup: A Look at Cattle Herd Rebuilding
As WPI reported yesterday, the total supply of beef per capita is up this year over last based on imports and heavier slaughter weights; both are related to the pace of beef cow salughter. A bigger percent of fed cattle in the mix has resulted in heavier slaughter weights, as well as feeder cat...
Oilseed Highlights: Under Pressure but Hovering
The MarketToday’s IGC report increased the growth in global soybean carryout and thus reinforced the bearish trend in the November futures contract. There are still counterfactuals such as Brazil’s delayed planting, low moisture U.S. pods, plus wilt (Fusarium oxysporum) and Brown stem rot (Cada...
State Control of Markets – Russia; State Control of Markets – U.S
State Control of MarketsRussia’s agriculture ministry recently “suggested” that grain exporters not sell wheat internationally below the minimum price of $250/MT FOB. The minimum price approach is less clumsy than export quotas but is a harder stop than Moscow’ use of export taxes to try and ma...
Market Commentary: Corn Rallies on Export Sales; Bean Bears Return in Heavy Options Trade
The CBOT was mixed on Wednesday with corn rising after the USDA reported “flash” export sales of over 1.9 MMT of corn to Mexico and unknown destinations combined. The news put a bid under futures and caused corn spreads to firm slightly with funds buying back some of what they sold earlier this...
The Black Sea Regional Analysis
Russian Grain Markets: 7 – 11 October 2024The world has been watching the 2024 Russian grain harvest forecasts, especially wheat production. The Russian Ministry of Agriculture was not making any sharp moves in one direction or the other, while domestic analysts have revised the 2024 grain crop...
Asymmetric on Tariffs
Most economists are clear in describing tariffs as a border tax. Their impacts include increasing costs on consumers and reducing trade, and thus self-harming a nation’s economic well-being. Yet, it is difficult to identify a nation that doesn’t use tariffs, and most utilize them more than the...
Market Commentary: Bears Win Again, but Crush Report Buoys Soybeans
Bears were in control of the CBOT for the second straight day with very few bullish news items seeming to exist on the horizon. Between improving weather forecasts for the Northern Hemisphere, lower threat of a La Nina this year, strong harvest progress in the U.S., large crop forecasts for Bra...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Algeria decided to bar French companies from its wheat import tenders due to France’s support for Morocco’s continued sovereignty over the Western Sahara region. All tender participants have been advis...
Planned Website Downtime Wednesday, 16 October
WPI is completing a series of upgrades to our website that will require about 50 minutes of downtime on Wednesday, 16 October starting at 12:00 PM EDT. There is never a “good” time for a website to be down, but this was deemed to be among the least disruptive to our U.S. and interna...
Red Meat and Poultry Situation
As WPI reported last week, the October WASDE increased its projection for beef production by 205 million pounds on higher slaughter and heavier carcass weights and increased the 2025 forecast for beef production by 300 million pounds. Nonetheless, October slaughter is starting slowly. Total sla...
Farm Subsidies on the March
Subsidies can increase output and there are many ways to subsidize an industry, but that doesn’t mean that countries should do it. Cost of Production: The EU badly wants to become self-sufficient in plant protein. More than four decades ago Europe lost a dispute settlement cas...
Market Commentary: Bears Gain Control; Soybeans End Below $10, Corn Breaks Support
Bears regained control of the CBOT ag market trade on Monday, seemingly not because of the WASDE but rather because of shifting weather forecasts and apparently receding threats. The weather in South America is trending more favorably for the corn and soybean crops down there, and showers in th...
Politics: Will 2024 Election Yield an Unprecedented Triple Flip?
The 2024 election is three weeks from tomorrow. This cycle has been unusual. The campaign started as a Biden versus Trump rematch of the 2020 campaign, the first such rematch since 1956 (only the seventh time in history and only the second time since 1900). However, President Biden stepped down...
European Market Analysis
Regional News Political tensions between Algeria and France reportedly prompted the former country to exclude its traditionally favored European trading partner from a recent wheat purchase tender. Algeria in its latest tender specifically requested no submissions from France and purchase...
Mercosur Regional Analysis
Wheat After weeks of anticipation, rains finally arrived in the most needed areas of Argentina. At the beginning of the week, the central and northern parts of Córdoba, central and northern Santa Fe, and parts of Entre Ríos received significant rainfall. Toward the end of th...
Going up with a Bang
A futures contract that persistently moves up or down by just a penny or two each day imposes its own burden on the market. While speculators are said to prosper from volatility, and sellers want higher prices and buyers prefer them lower, everyone prefers a story. Apparently, the cotton market...
CFTC COT Report Analysis
Through 8 October, funds continued to exit their formerly massive short positions in corn and soybean futures and now hold a small fraction of that commitment. Funds covered 40 percent of their short position in soybeans and are now only short 18,000 contracts. Similarly, funds bought back half...
WASDE Wheat
WPI offers the following PDF of key supply and demand tables and charts relating to the USDA’s latest WASDE report. This is not an all-inclusive compilation of relevant market factors, only those which we feel are of top priority. WPI will seek to expand the offerings in this report and w...
WASDE Soybeans
WPI offers the following PDF of key supply and demand tables and charts relating to the USDA’s latest WASDE report. This is not an all-inclusive compilation of relevant market factors, only those which we feel are of top priority. WPI will seek to expand the offerings in this report and w...
WASDE Corn
WPI offers the following PDF of key supply and demand tables and charts relating to the USDA’s latest WASDE report. This is not an all-inclusive compilation of relevant market factors, only those which we feel are of top priority. WPI will seek to expand the offerings in this report and w...
Market Commentary: Only Pork Survives the WASDE Intact
The U.S. crop situation for 2024/25 was largely firmed up by today’s USDA October WASDE report. Net, net – there is a lot of grain available. Not enough for any precipitous drop in prices today, but only Lean Hogs managed to end the day higher. Today’s report reinforced...
WASDE Outlook for Livestock: More Beef
Today’s WASDE increased the price outlook for 2024 fed steers after dropping it in September. The September WASDE dropped the fed steer price by $3/cwt to $185.11/cwt from the month prior. Today the price forecast was adjusted up $1/cwt. The forecast for the 2025 annual...
Cocoa Market Update: Prices Rise as Stocks Fall
At the end of July 2024, WPI published an article looking at the drivers of the cocoa market’s massive rally in 2023 and 2024 and that offered an outlook for MY 2024/25. This article offers a brief update on market conditions and developments that have occurred in the two months since our...
Market Commentary: Wheat Rises as Russia Considers Export Ban; Cattle Extend Rally
The CBOT saw wheat emerge as the upside leader for the day with multiple bullish stories offering support, including one from Reuters that indicates Russia may be considering a ban on grain exports. Details are nonexistent, but there is reportedly a meeting soon between the ag ministry and grai...
Oilseed Highlights: Pre-WASDE but Relatively Firm
The Market The soybean market has been sliding heading into tomorrow USDA October WASDE report. The trade has positioned itself in the middle of the September trading range and is still positioned in a somewhat bullish position slightly above the 50-day trading average. The market has been tren...
Livestock Roundup: Red Meat Exports
August trade data was released yesterday. High prices of U.S. beef exports have kept exports down. Compared to August 2023, total exports were 102,682 MT, which was the lowest monthly total since January. For the first eight months of the year, January through August, exports at 856,834 MT were...
Market Commentary: CBOT Trades Weather and WASDE Expectations
Trade at the CBOT on Wednesday was dominated by two factors: global weather and preparations for the October WASDE report, which will come out on Friday. The weather was mostly relevant for wheat as parts of Russia, Ukraine, Australia, and the U.S. Plains battle persistent and increasingly dry...
Policy Potpourri
Good Many Organisms: The Nobel Prize in Chemistry was awarded this week to scientists at Google DeepMind using AI to predict the structure of proteins and inventing new ones. Capitaslizing on the opportunities, Ginkgo Bioworks announced that it would make available to researchers its API that u...
Say Cheese!
Ilena Peng from Bloomberg has written about the expansion of U.S. cheese exports. Former French President Charles de Gaulle once noted that his country has hundreds of different cheeses and the U.S. had hundreds of different religions. But the U.S. has since become a major producer of many diff...
Black Sea Regional Analysis
Russian Grain Markets: 30 September – 4 October 2024 The first week of September proved bullish in European Russia and slightly bearish in the Asian part and Siberia. The weather factor is important but it’s not the key driver. It may become the decisive factor later on depending on...
Market Commentary: Brazil Rains, Crude Oil Selloff Sink Soy Complex; Cattle Extend Rally on Beef Demand
Trade at the CBOT was mostly lower on Tuesday with the soy complex leading the way south as weather models show more promising rains for South America. Soybeans turned sharply lower on the forecasts and scored a bearish technical day on the chart, with additional selling pressure coming from th...
War on Food Companies; Holding Back the Future
War on Food Companies Market skeptics like U.S. Senator Elizabeth Warren (D-Massachusetts) have stepped up their attack on food companies by accusing them of price gouging by “squeezing profits out of consumers” through shrinkflation and avoiding federal taxes. They charge that comp...
USDA Announces Cattle Price Discovery Rule
Today, the Biden Administration issued an Advanced Notice of Public Rulemaking (ANPR) on Price Discovery and Transparency in Markets for Fed Cattle. This is the fifth livestock and poultry market regulation put forth under the Packers and Stockyards Act (P&SA) and under the Biden Executive...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Egypt has a program that it says will reduce wheat imports and cut subsidies on bread. The plan is to blend wheat flour with local corn and sorghum flour. Savings, it is said, could be in the hundreds of millions...
Market Commentary: Harvest and Weather Pressure Continue
Clear weather and rolling combines in the Northern Hemisphere together with prospective showers in South America maintain pressure on commodity futures. However, volume today was relatively low except in soybeans and livestock. While soybeans closed lower, the end of Golden Week and China&rsquo...
Allowing Private Contributions to Conservation Programs to Create Public Assets
USDA’s Natural Resource Conservation Service (NRCS) closed the comment period for the implementing rules for the Sponsoring USDA Sustainability Targets in Agriculture to Incentivize Natural Solutions (SUSTAINS) Act last month. The Act authorizes USDA to accept private contributions to cha...
Mercosur Regional Analysis
Wheat Despite the lack of rain, the Buenos Aires Grain Exchange maintains its outlook for this season’s wheat crop. As we mentioned previously, the rains in August and September were disappointing, and thus far in October they’ve been absent. Additionally, we are seeing rising tempe...
2024/25 Corn Outlook: Strong Demand Shifts Prices Higher
In light of the surprisingly bullish Grain Stocks data, WPI has updated our quarterly corn market outlook to reflect the supply and demand trends reflected in the USDA’s most recent data. Since the September edition of our quarterly outlook, WPI’s forecast has shifted to feature sma...
Market Commentary: Next Week’s Weather Makes or Breaks
It was another day lower for the grain and oilseeds sectors, and another day of weak volume for corn and the soy sector. The causes have not changed: A strengthening dollar Very good harvest weather in the U.S. Potentially better weather in South America late next week If good rains materiali...
U.S. Soybean Crush Margin Outlook
The recent strength in U.S. soyoil and soymeal prices has helped push “board” crush margin (i.e., the margin implied or calculated by CBOT futures contracts) to new highs with the VVX margin hitting $1.62/bushel and the HHH margins topping the $1.45 mark for the first time in over a...
Port Strike Suspended: A Look at Short-Term and Long-Term Issues
East and Gulf Coast port workers are back on the job today after striking on 1 October. Many of the affected ports will add weekend overtime hours to load trucks; several ports will remain closed to trucks today as containers are offloaded to prepared for resumptions of trucking. Importers repo...
WPI Website Restored
Apologies to those that had trouble accessing WPI's website and analysis articles. Service has now been restored. Please advise if you are still having any issues and thank you for your patience during this technology glitch. ...
Market Commentary: Multiple Influences from Macros to Weather
The somewhat bullish influence of Monday’s stocks report has now fully faded. The market today pretty much ignored a solid USDA Export Sales report and instead focused on mostly bearish factors: The EU is postponing enactment of its deforestation policy. Macro jitters around the Middle E...
Oilseed Highlights: EUDR Decision and South American Weather Weigh on Complex
The Market It has been a tough week thus far for soybeans and meal. The EU’s decision to delay its European Union Deforestation Regulation (EUDR) means there will be no break for U.S. exporters in competition from South America and Southeast Asia. The two days of decline have November soy...
Livestock Roundup: Broiler Outlook
Hatcheries set 242.69 million eggs in incubators during the week ending 28 September, up 6.1 percent from a year ago. So far this year, egg sets are up 1.9 percent over last year, and to date through the second half of the year are up 3.5 percent. Last year, eggs set started trendng lower in J...
Coffee Rally Stalls as Weather Shifts, Bear Move Ahead?
Coffee futures have been on a massive rally in 2024 with the ICE “C” contract rising above $2.60/lb last week, breaching that point for just the fifth time since 1970. The catalyst for the rally has been well reported this year, with declining stocks and weather issues in major prod...
Market Commentary: Wheat Jumps Higher on Massive Egypt Imports; Soymeal Falls on EUDR News
Wheat remains the darling of the CBOT with more bullish news pouring into the complex. Today’s rally was sparked by reports that Egypt has booked over 3 MMT of wheat from the Black Sea (presumably Russia) to be exported over the next six months. That move comes as Russian wheat stocks are...
Ludditic Longshoremen; Symptom not Disease
Ludditic Longshoremen Labor strikes are always about money, working conditions and job protection but the latter is skyrocketing to the top. The U.S. East and Gulf Coast port workers’ strike is a prime example. Automation is threatening the number of longshoreman positions needed, and the...
Kenya’s Crop Choices
In yesterday’s WPI Middle East, Mediterranean and Africa Regional analysis report, it was noted that Kenyan farmers are switching from growing maize to growing sweet potatoes. The latter being easier to grow than drought sensitive maize and netting three crops per year. But whether maize...
Black Sea Regional Analysis
Russian Grain Markets: 23–27 September 2024 The Russian grain market was bullish in European Russia but bearish in the Asian part and Siberia because Kazakhstan introduced a temporary ban on imports of Russian wheat. Grain storage facilities are being filled up to the brim with new crop c...
Market Commentary: Grain Stocks Fuel 2-Day Corn Rally; Wheat Rises with Russian Prices
CBOT grains and oilseeds seem to be playing “follow the leader” and have recently switched roles. Previously, soybeans were rallying and pulling grain futures grudgingly higher, but that has completely flipped following Monday’s Grain Stocks report. Now, corn and wheat are ris...
Trade Policy Spin; Interstate Trade Barriers
Trade Policy Spin It is an election year, and the Biden Administration is claiming to have opened up $26.7 billion in overseas market access for American farmers. But that carries the same weight with farmers as grocery buyers hearing that food inflation has declined. They are still paying more...
East and Gulf Port Workers on Strike
A port worker strike in the U.S. East Coast and Gulf Ports started today affecting container shipments, while a strike in Vancouver, Canada affecting grain shipments came to an end on Saturday with the final ratification vote to come this Friday, 4 October. As WPI’s Matt Herrington...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Pakistan’s wheat imports in 2024/25 could drop to almost nothing as a result of the very good harvest in 2024 – up by 3.2 MMT. Wheat production was well above the average at a record level of 31,400 MM...
Market Commentary: Grain Stocks Bullish Corn but Neutral Soy, Wheat; Port Strike Looms
Monday’s CBOT trade was essentially dedicated to the Grain Stocks report with pre-report trading seeing muted action and steady volumes while post-report trade saw a meaningful rally in corn and a pullback in soybeans. The report issued a surprisingly small corn stocks figure, which spurr...
Hurricane Helene Impacts in the Southeast
After making landfall along the Gulf Coast of Florida, Hurricane Helene struck northeast Georgia and western North Carolina. All commodities in the region have been affected, including pecan orchards and timber land, but also corn, soybeans, cotton and poultry. Given the location, hog pro...
Green for You, Grey for Me; Slaying National Champions
Green for You, Grey for Me Some say the EU has been vague about whether it will seek a delay in the December 30 implementation deadline for implementing the EU Deforestation Regulation (EUDR). Brussels told WTO members last week that delay would require a legislative change, which is not imposs...
Russia’s Grain Shortfall
Today’s USDA quarterly Grain Stocks report provided the market with a bullish input but there may be another shoe to drop. Russia’s stocks to use ratio for corn and wheat have been dropping for four straight years. Over that timeframe, it is down 64 percent for corn and 48 percent f...
Mercosur Regional Analysis
Argentina’s Weather The weather remains a recurring issue in Argentina. The lack of rainfall across much of the country's agricultural region is starting to impact both the wheat crop, currently in its yield-defining stages, and the sowing of summer crops. Precipitation anomaly maps...
European Market Analysis
Regional News Four regions in Russia’s Siberia have declared states of emergency due to heavy rains and flooding. Milling Wheat Wheat markets were higher last week with U.S. futures rising about $5/MT while the Paris market added €1.25/MT for the week. Markets remain conc...
Grain Stocks Report Charts
The attached PDF offers graphical depiction and analysis of the latest USDA Grain Stocks data for key commodities. The data is, of course, taken from the quarterly Grain Stocks report. WPI recently completed an expansion of the analysis and welcomes any feedback/suggestions. ...
CFTC COT Report Analysis
Funds activity in the ag futures markets was more subtle than expected for the second straight week. Specifically, fund short-covering in the corn and wheat markets lagged expectations by a wide margin. In corn futures, funds bought back 3,700 contracts (2.6 percent) of their prior short, which...
Market Commentary: Pre-Report Plus Brazil Lightens Risk
Volume was light except in soymeal, Feeders and lean hogs. USDA’s final quarterly stocks report for MY 2023/24 arrives Monday and it has surprised to the bullish side for the past four out of five years. So the goal was to get out of short positions. On the week, soymeal exploded on...
Policy Quick Hits
Government Funding President Biden yesterday signed a continuing resolution passed by Congress to fund the government at current levels until 20 December. There were no riders – such as an extension of the farm bill – included. This sets up another deadline before the Christmas holi...
Cow-Calf Margins Down from July but Still Imply Herd Rebuilding
Since WPI’s July update on cow-calf margins, expected 2024 returns for producers have shifted lower but remain well above year-ago values and near record highs. WPI’s models indicate that revenue for the “average” Southern Plains (i.e., Kansas) cow-calf operation will hi...
Nudge versus Cudgel; New Japanese PM; Pesticide Restrictions
Nudge versus Cudgel The Biden Administration has achieved some market openings in various countries, the most recent being obtaining agreement from Chile to accept American cheese products marked with European origin names like gouda, cheddar, and provolone. Chief Agricultural Negotiator Doug M...
Market Commentary: Crude Oil Selloff Sinks Soyoil, Soybeans; Corn, Wheat Lower Ahead of Stocks Report
A surprise selloff in crude oil put heavy selling pressure on the CBOT soy complex on Thursday, with soyoil and soybeans scoring bearish reversals for the day. The weakness in the soy complex sent corn and wheat into the red as well, with traders unwilling to take more long risks heading into t...
Oilseed Highlights: Weakness Today But Still Plenty of Support
The Market The soy complex has had a bullish week thus far, moving higher on a weather premium added for Brazil, and news that China, the largest importer of soybeans, will significantly boost economic stimulus. Short-covering had been rampant until today’s selloff. News that Saudi Arabia...
Livestock Roundup: Hogs and Pigs Report Mostly Neutral
Today, USDA released its quarterly Hogs and Pigs report for the June through August quarter. The total inventory of hogs and pigs on 1 Spetmeber was 76.48 milllion head, which was up from 76.133 million head in 2023. Typically, inventories grow from 1 June and peak for the ye...
Market Commentary: Soyoil and Beans Lead Sector Higher
The CBOT was higher once again with soybeans and the oilseed complex leading the way. Drought in Brazil and the surging soyoil prices have supported the complex and driven a widespread wave of short-covering by funds. Corn and wheat futures followed the oilseed markets higher at midweek but fai...
Industry Consolidation
U.S. antitrust law is complicated, but current efforts to block a merger between grocery retailers Albertsons and Kroger may not fit the bill. Current triggers under the law include: Market share of 70 percent or more, or less than 50 percent if barriers limit competition. Barriers to entry pr...
Black Sea Regional Analysis
Russian Grain Markets: 16–20 September 2024 Russian grain markets remained stagnant as export demand is weak and domestic demand is even weaker. Moreover, appreciation of grains earlier in the month reached its peak at this stage of the game and buyers are very careful right now. Sellers...
Market Commentary: Soybeans, Soyoil Extend Rallies; Wheat, Corn Fall as Short-Covering Fades
The CBOT saw diverging trading patterns on Tuesday with soybeans and soyoil continuing their rallies and extending gains to new highs. China is rumored to be purchasing up to 1.2 MMT (44 Mbu or 20 cargoes) of U.S. soybeans for October-November delivery, which put a bid under the market. Too, th...
Hogs and Pigs Report Preview
On Thursday, USDA will release its quarterly Hogs and Pigs report for the June through August quarter showing the inventory as of 1 September. Pre-report expectations peg the total inventory at 100.5 percent of last year. That would imply 75.7 million head, the largest inventory for the quarter...
Tariff Spiral and WTO Failure; Nuclear Power and GMO’s
Tariff Spiral and WTO Failure Republican presidential nominee Donald Trump now says he will impose 200 percent tariffs on farm machinery from John Deere should the company move its manufacturing to Mexico. He said he would also provide incentives for foreign companies to move their operations t...
Energy and Agriculture
Global agriculture produces energy, with 23 percent of ethanol produced from sugarcane, and another 7 percent produced from the molasses byproduct of processing sugarcane or sugarbeets. Increased production of ethanol has caused global sugar carryover to decline. Agriculture is also a major con...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Bangladesh reports that it will be importing 400,000 MT of wheat immediately with the normal buying approval being shortened from 42 days to 15 days. The change is being made in order to maintain food security. Th...
Market Commentary: CBOT Rallies on Weather, Short Covering; Monetary Policy Turns Bullish Commodities
The CBOT jumped sharply higher to start the new week with wheat leading the move with overnight strength. Fund short covering drove much of the day’s gains, but dryness in Brazil and the Black Sea, along with some rain-induced U.S. harvest delays, offered some fundamental motivation...
Hypocritical on Process Standards; Buy America Bust; Politics of the Port Strike
Hypocritical on Process Standards EU Commission President Ursula von der Leyen will make a decision this week on implementation of the EU Deforestation Regulation. It is set to take effect at the start of 2025 but both internal and external forces want the measure delayed and modified. That inc...
Pending Port Strikes: U.S. East and Gulf Coasts and Vancouver Canada
With a pending 1 October strike deadline on the U.S. East and Gulf Coasts by the International Longshoreman’s Association (ILA), the U.S. Department of Labor has reached out to the U.S. Maritime Alliance (USMX), a group that represents employers of the East and Gulf Coasts longshore indus...
Running Out of Protein
Europe ran out of energy when the Russian attack on Ukraine forced it to reduce imports from Russia. Europe lacks the ability to defend itself despite Russia’s threat on its eastern border. Now Europe is reducing its consumption of meat but failing to invest in meat alternatives that coul...
European Market Analysis
Regional News WPI sources in Brussels say it’s increasingly likely that the EU Deforestation Regulations will be delayed until the region can develop better implementing systems. Recall that EUDR – which would force massive reporting and traceability requirements on seven comm...
Mercosur Regional Analysis
Argentina Economic/Policy Update Argentine President Javier Milei, in a public speech this week, presented the 2025 budget that will be sent to Congress for approval. Farmers had high expectations for potential announcements that might improve their business or provide visibility concerni...
CFTC COT Report Analysis
Funds activity in the ag futures markets was more subdued last week than expected. Funds were slight net buyers in soybeans, soymeal, corn, and across the wheat complex, but the percentage shifts in their positions and overall buying volumes underperformed expectations. In the soy complex...
Market Commentary: Wheat Retraces; Soyoil Surges
Wheat was the big gainer last week but this week it gave up most of those gains. And soyoil was last week’s biggest loser but it rose to the top this week. Lean hogs also staged a major reversal after losing 1.32 percent last week and then rising 4.1 percent this week. Where there...
Too Bad for Ag, Tariff Impacts; Climate and Agriculture
Too Bad for Ag In a surprise from the Biden Administration, Deputy National Security Advisor Daleep Singh said that the U.S. should negotiate more sectoral specific trade agreements and outlined new incentives under the Indo-Pacific Economic Framework to entice more buy-in from other countries...
Neutral Cattle on Feed Report
USDA released the monthly Cattle on Feed report today. All categories came in near expectations, making the report neutral. August placements at 1.98 million head were above the average for the month during this cattle cycle of 1.93 million head, but still below last year. As WPI noted yesterd...
Weaker Consumer Finances Darken Economic Outlook, Despite Interest Rate Cuts
The past two weeks have seen the typical influx of macroeconomic data releases, most of which helped prompt the Federal Reserve to issue its 50-bps interest rate cut on Wednesday. While the interest rate cut was initially viewed as a positive signal (lower interest rates generally increase econ...
Market Commentary: Wheat Falls Amid Weak Russian Prices; Soyoil Rises on Exports; Macro Markets Boost Cattle
Markets and traders were broadly enthusiastic following the U.S. Federal Reserve’s 50-bps cut to its target interest rate on Wednesday, but you wouldn’t know that from looking at the grain or oilseed markets. Wheat futures were sharply lower on Thursday amid pressure from French whe...
Oilseed Highlights: Bouncing Off Seasonal Lows
The Market U.S. soybeans have a nearly $1/bushel advantage as Brazilian basis moves higher. The result is that last week’s export sales were substantial. Rumors are rampant of more Chinese purchasing of U.S. soybeans. Argentina reportedly bought U.S. soybeans but those may washout on fina...
How Not to Resuscitate; Micromanagement
How Not to Resuscitate The European Parliament rejected the Commission’s proposal to allow tolerance levels for pesticide residues on some imported foods. Allowing a rat pack of politicians to directly decide scientific issues only contributes to domestic decline. Pesticides can be produc...
Livestock Roundup: Cattle on Feed Preview
USDA will release its Cattle on Feed report tomorrow; the pre-report consensus analysts’ estimate is for the inventory of cattle on feed as of 1 September to be 101 percent of last year. August placements and marketing are expected to be 98.5 and 96.5 percent respectively of last year&rsq...
Market Commentary: Soy Complex Rises on China Rumors, Brazil Drought; Hogs Extend Rally
Soybeans saw the liveliest action of the major grain/oilseed contracts on Wednesday with a strong, 18-cent overnight rally developing on rumors of Chinese export business. That rally fizzled, however, after the USDA did not report any daily “flash” export sales at 9 AM ET and the ma...
High Cost of Food; Sick Man in Europe
High Cost of Food Gallop’s annual Work and Education survey found that Americans have soured on the restaurant and grocery business. They still love farmers but have followed Democratic Presidential nominee Kamala Harris in faulting the food industry for inflation. Over the past year, fav...
More Food, and Fewer Children
Few philanthropists are as focused on hunger in Sub-Saharan Africa than Bill Gates. The Bill and Melinda Gates Foundation has spent billions of dollars on the problem. Activists do not like his promotion of GMO’s as a solution, but they are not as focused as he is on human suffering...
Black Sea Regional Analysis
Russian Grain Markets: 9–13 September 2024 Russian grain markets remained stable with only corn slightly bullish, possibly showing the first real signs of a lower crop this season. Farmers are playing a waiting game switching to sunflower seed trade which is showing bullish sentiments and...
Market Commentary: Grains Drift Sideways as Harvest Looms; Livestock Rally on Strong Cash Trade
The CBOT was mostly sideways on Tuesday with funds still paring back a few shorts in the corn and soy complex while resuming some light selling in wheat futures. There was little fresh news for the day, which contributed significantly to the lack of price action. Russian FOB offers continue to...
Three Wheat Peculiarity
The December SRW and HRW contracts closed lower today, while December HRS added value. These three wheat contracts often move in unison, but not always. And they have many other differences that define them. HRS is typically priced higher due to its greater protein content and thus demand, espe...
New EU Commission; America First Channels Sovereignty
New EU Commission European Commission President Ursula von der Leyen made known her nominees to run the government in Brussels and the trade and agriculture portfolios have interesting selections. As was speculated previously, Christophe Hansen from Luxembourg has been picked for the agricultur...
Ad Hoc Farm Bill in the Works?
The current underlying farm bill (extended for a year last year) expires in 13 days. Another extension is likely, but there is also some movement on Capitol Hill to provide some ad hoc assistance with a potential extension. The 2024 federal fiscal year expires in 13 days. Without funding,...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Egypt’s GASC is reported to have arranged a private purchase of 430,000 MT of Russian wheat at a price of $231 CIF. GASC has not confirmed this purchase. Egypt’s wheat imports, on a dollar basis,...
Market Commentary: Bears Win as CBOT Emerges from Post-WASDE Weekend
The CBOT emerged from the post-WASDE weekend with bears gaining the upper hand in a relatively light news day. Wheat was the big loser for the day as profit taking developed when futures neared the $6.00 mark that kicked values sharply lower. Corn and soybeans were in the red for the day as wel...
Future of EU Agriculture; Future of U.S. Agriculture
Future of EU Agriculture Mercosur: Newly appointed French Prime Minister Michel Barnier reiterated French opposition to a trade agreement with Mercosur at the upcoming G20 summit in Brazil, saying he is seeking coalition partners for a blocking minority. Meanwhile, Mercosur leaders receive...
SUSTAINS Act Under the Radar
Today is the final day to submit comments to the Natural Resources Conservation Service (NRCS) under a request for information (RFI) on the Sponsoring USDA Sustainability Targets in Agriculture to Incentivize Natural Solutions (SUSTAINS) Act. That legislation was passed as a rider on the 2023 a...
Mercosur Regional Analysis
Wheat The Rosario Grain Exchange reports that wheat fields in the central, northern, and western parts of the planted area are suffering from a lack of water, raising doubts about its current production estimate of 20.5 MMT- a figure considered high by many in the market. In September, th...
European Market Analysis
Regional News Last Thursday, a Ukrainian merchant vessel carrying grain and bound for Egypt was struck by a Russian missile in the Black Sea waters near Romania. The event is escalating the geopolitical tensions between the two countries and threatens Ukraine’s ability to protect ci...
CFTC COT Report Analysis
Funds continued covering shorts across the grain and oilseed complex through last Tuesday as futures trended firmer heading into the September WASDE. The most notable short covering was in wheat where funds bought back 30 percent of the CBOT position and 33 percent of their HRW short. The buyin...
Market Commentary: It Was Wheat’s Week
Russia’s Vladimir Putin warned that Ukraine using Western long-range missiles to attack inside his country would bring NATO into the war. That and his threats to use nuclear weapons and the attack this week on a grain carrying ship in the Black Sea pressured the gold market and likely whe...
Hurricane Francine Energy Production Disruptions
The WTI Crude oil futures saw its third consecutive day of gains from the impacts of Hurricane Francine in the Gulf of Mexico and the contract remains up on the week. Francine made landfall on Wednesday on the Louisiana coast and has now been downgraded to a tropical storm. It is tr...
WPI’s Post-WASDE Quarterly Corn, Soy Outlook
Now that the WASDE has come and gone, it’s time for the commodity market analyst community to argue about why USDA’s projections are wrong and what the world will actually look like over the next marketing year. WPI is loath to miss this monthly festival of forecasting, so we offer...
WASDE Wheat
WPI offers the following PDF of key supply and demand tables and charts relating to the USDA’s latest WASDE report. This is not an all-inclusive compilation of relevant market factors, only those which we feel are of top priority. WPI will seek to expand the offerings in this report and w...
WASDE Soybeans
WPI offers the following PDF of key supply and demand tables and charts relating to the USDA’s latest WASDE report. This is not an all-inclusive compilation of relevant market factors, only those which we feel are of top priority. WPI will seek to expand the offerings in this report and w...
WASDE Corn
WPI offers the following PDF of key supply and demand tables and charts relating to the USDA’s latest WASDE report. This is not an all-inclusive compilation of relevant market factors, only those which we feel are of top priority. WPI will seek to expand the offerings in this report and w...
Market Commentary: USDA Confirms Record Corn, Soy Yields but Ending Stocks Fall
For a WASDE report that confirmed record-large corn and soybean yields, futures’ reaction to the data was relatively muted. Those hoping for a festival of bearish numbers were disappointing as USDA moderated the impacts of larger yields with reductions in 2023/24 carryout and modest &ndas...
Farm Bill Force; Black Sea Risks; Food Price Competition
Farm Bill Force A coalition of 300 agricultural groups sent a letter to Congressional leaders urging passage of a new farm bill. Some on Capitol Hill see it as unachievable and sought to add a one-year extension of current law onto a continuing resolution. Instead, there will be one more push d...
Livestock Roundup: WASDE Trims Cattle Price Outlook
The big news on the livestock side of today’s WASDE was USDA’s reduction in the fed cattle price forecast. Prices for 2024 were trimmed by $3/cwt and USDA dropped its forecast for 2025 annual average prices by $5/cwt from $191/cwt last month to $186 this month. The supply and deman...
Oilseed Highlights: WASDE Affirms a Sideways Market
The Market Today’s USDA WASDE report should drive discussion, but it was mostly neutral. The 20-day moving average has begun to rise and November soybeans hit 1031 less than a week ago, lending hope for bulls that it can break 1050/bushel resistance. But the stocks-to-use ratio remains at...
Market Commentary: Calm Before the WASDE Storm; Drought Concerns Support Wheat, Soybeans
The CBOT was mostly higher on Wednesday as traders continued adjusting positions and preparing for the upcoming September WASDE report. Wheat was the upside leader – though trading volume was suspiciously low – as concerns intensify about drought in the U.S. Plains, the Black Sea, a...
Agricultural Trade with Africa
Africa’s population is on a trajectory that could double its size by 2050 to 2.5 billion, or a quarter of the global populace. The West (U.S., EU, Japan) are in a competition with the Axis (China, Russia) for influence over Africa. One way to influence is to actively trade, including in a...
Tariffs are Popular
Tariffs were a hot topic in last night’s debate between the two U.S. presidential candidates. Trump first imposed tariffs, which Harris calls a sales tax, but her Administration keep most of them and she has not ruled out using them again. Trump added to his pro-tariff position by saying...
Black Sea Regional Analysis
Russian Grain Markets: 2–6 September 2024 The Russian grain market is finally showing bullish sentiments. Adverse weather in Russia this season concerns many analysts, and they are one after another decreasing their forecasts for overall grain production. Exact numbers are hard to figure...
Remembering 9-11
Twenty-three years ago, on September 11, 2001, the U.S. experienced one of the most tragic and influential days in the nation’s history. The events of that day would spark great unity, and later division, as our nation grappled with terrorism’s fallout. The days and weeks immediatel...
Market Commentary: Wheat Rises on Plains Dryness; Corn, Soybeans Sink in Pre-WASDE Trade
Trading at the CBOT was mixed on Tuesday with expectations for the WASDE differing significantly. For corn and soybeans, traders and analysts are all in on the bearish side of things while there is some growing positivity for the wheat markets. That was reflected in Tuesday’s trade with s...
Farm Bill and Prop 12
Yesterday, WPI reported that several commodity organizations were in Washington to lobby on the farm bill. One of those groups was the National Pork Producers Council (NPPC). One of the solutions they’re seeking is preemption of California’s Proposition 12 and Massachusetts’ Q...
DEI and Trade; Barriers Against Real Emitters
DEI and Trade Today was Day 1 of the annual WTO Public Forum. The sessions were started many years ago as the institution's response to critics. Each year nongovernmental organizations with a dislike of international trade show up in Geneva to share their angst and demands for change. The agend...
Meat Trade Holds Up
Hitting the downside of the cattle cycle and having a higher value product based on a strong U.S. dollar has certainly reduced, but the trade has held up relatively well over the past year. U.S. beef imports have trended higher, with an especially large boost from Brazil back in January. But No...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Egypt’s trade deficit in June dropped by 5.1 percent to $2.87 billion – in dollar terms wheat imports were down by 21.5 percent while corn imports saw a reduction of 28.6 percent. Total for all imports...
Market Commentary: CBOT Prepares for September WASDE
The CBOT started the week with a mood that was decidedly oriented towards preparing for the September WASDE report. Volume and price action were relatively limited for the day and cattle futures were the surprise bullish leaders. In the grains, corn and soybeans pushed higher with the latter ma...
Draghi versus Strategic Dialogue; Cooking the CVD Books
Draghi versus Strategic Dialogue Mario Draghi issued his long-awaited report on European competitiveness that had been requested by the European Commission. Its content stands in both contrast and conflict with U.S. goals and the Strategic Dialogue just completed on future support for European...
Producer Groups Getting Restless on Farm Bill
The current farm bill – the extended Agriculture Improvement Act of 2018 – expires in 10 days. With no practical window to pass a bill in 2024, it will need to be extended again. From a practical perspective, that needs to be done before 2025 when dairy programs enter a new marketin...
Mercosur Regional Analysis
Weather Recent rains have benefited parts of Argentina, but not all areas received significant precipitation. The highest accumulations occurred in the central-east and southern regions of Buenos Aires Province, with 30–50 mm recorded. However, the provinces of Córdoba, Santa...
European Market Analysis
Regional News The EU is set to receive beneficial rains across its central region this week with some of that precipitation extending out into parts of western and eastern Europe. That will offer some relief from the drought for central Europe, but the north-central and eastern regions wi...
CFTC COT Report Analysis
Friday’s CFTC report featured the expected trends in managed money funds’ activity, but the volume of trade and the degree of change in their position was below expectations. Funds covered about 21,000 contracts of their soybean futures short last week (12.5 percent of the prior wee...
Market Commentary: Mixed Signals
There were lots of mixed pressures on the market today, and this week overall. Outside markets were key among them. Trading volume was modest today, except for meal, oil, and livestock. On the week, livestock and soyoil took losses, while fund long positions held up for soymeal. While so...
Jobs Report and How the Fed Will See It
Today’s jobs report was highly anticipated as a key benchmark before the Federal Open Market Committee (FOMC) meeting later this month and expected to be a factor in the Fed’s decision of whether to cut the federal funds rate by 25 basis points or 50 basis points. As it happens, tod...
India’s Ethanol Conundrum and Impact on Global Markets
India is attempting to pursue its climate goals through the expansion of biofuel blending into transportation fuels, but the dynamics of the country’s agricultural systems and protectionist trade policies may stymie these efforts. The USDA recently issued an outlook that calls for India t...
Market Commentary: CBOT Dips as Short Covering Subsides; Livestock Fall on Macro Worries
The CBOT was mostly lower on Thursday as traders took a day to pause and reassess positions and the grain market outlook with just one day of trade left before the weekend. Too, the September WASDE is looming next week and traders are positioning and adjusting expectations in advance of that re...
Livestock Roundup: Cattle and Beef Imports
High cattle and beef prices are supporting imports. First, cattle imports through July are up 22.6 percent compared to last year. Imports from Canada are up 18.1 percent and imports from Mexico have increased 25.2 percent over the same period. This trend of increased imports certai...
Oilseed Highlights: The Rally Has Capped Out
The Market In this holiday shortened trading week, November soybeans are up 23.5 cents (2.35 percent). The rally in prices has caused deliveries to increase against December futures. Futures have been rising but basis levels are weak, raising doubts about real demand. December soymeal is...
Competitor Opportunities (Future of EU Agriculture Part II)
Yesterday, we took an initial and cursory look at the outcome of the EU’s Strategic Dialogue on farm support. Basically, it says move away from area payments and focus resources on small farmers not large operations. Today, we look at it in more detail, the current spin on its outcome ver...
Market Commentary: CBOT Extends Broad-based September Rally
The CBOT was higher once again with wheat, corn, soybeans, and soymeal all scoring new rally highs and bullish technical victories. In wheat in particular, fund managers are working hard to cover shorts as the technical outlook rapidly shifts bullish, which has driven much of this week’s...
Competitiveness versus Social Goals; Food to Energy
Competitiveness versus Social Goals The EU completed a strategic dialogue on the future of the Continent’s agriculture and despite the June elections whittling down the power of the Greens, they have won the debate on farm subsidies. The farmers protesting ahead of this year’s elect...
Pulses Not Pulsing
The International Grains Council (IGC), Rabobank, and others have followed countries and companies moving into the pulses space. It is logical that plant-based proteins like pulses should be an attractive market. However, the compound average growth rate (CAGR) for the larger category is only 2...
Black Sea Regional Analysis
Russian Grain Markets: 26–30 August 2024 Russian grain markets remained relatively stable; however, they are under pressure of a large crop and growing stocks. Even though the 2024 grain crop may be slightly lower than earlier estimates, Russia will have a solid export surplus. Dome...
Market Commentary: CBOT Rallies Sharply on Bullish Technicals; China-Canada Trade War Looms
The CBOT was nearly uniformly higher following the U.S. Labor Day holiday with wheat, corn, and soybeans all scoring strong gains and meaningful bullish technical developments. There wasn’t a major fundamental catalyst for any of the markets, rather the day’s trade seemed to build u...
New Guidelines for Substantiating Meat and Poultry Label Claims
Last week, USDA released an updated guideline for label claims on meat products as they pertain to how livestock is raised. Specifics included are claims related to animal welfare, breed, diet (e.g., grass fed), living conditions or raising practices, negative antibiotic use claims, negative ho...
Business Economics on Ballot; Tariff Doublespeak
Business Economics on Ballot The American economy largely relies on large corporations for generating growth and wealth. That engine is under attack on numerous counts by politicians looking to stoke voter support by creating a scapegoat. Democrats have pledged to raise the corporate tax rate f...
Sugar Price Response
The March 2025 No. 11 sugar contract rebounded last week but it is still down over 20 percent from its high. Analysts started the year expecting sugar prices to rise this year on short supplies. The International Sugar Organization is still warning of a net deficit once global consumption is su...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Saudi Arabia’s Arabian Mills has set the share issue price range under their upcoming IPO. The IPO is expected to raise about $271 million. The total offering will be for 15.4 million shares, which represent...
CFTC COT Report Analysis
Friday’s CFTC report was largely in-line with expectations as it showed mild short covering by managed money traders across the soy complex and corn futures. Funds fought back about 3 percent of their corn short, which continues to hover near this year’s record low values. Funds wer...
Market Commentary: Pre-Holiday Run-up Continued
This trading week marked a series of reversals, and the latest trend continued for the most part today. It was generally pre-holiday lower volume for corn, wheat, and lean hogs but there was outsized volume trading in soybeans. Some notable stats from today and the trading week include:...
U.S. Labor Day Holiday
The U.S. will celebrate Labor Day on Monday, 2 September, and the U.S. markets as well as our office will be closed that day. The next Ag Perspectives will be published Tuesday, 3 September...
Thinking About 2025 Post Election Economy
There has been a spate of favorable economic news. Orders for durable goods were up 9.9 percent in July, mostly on orders for new aircraft. This was the biggest increase since July 2020. Corporate profits rose 1.7 percent in the Q2 over Q1 and are up 8.0 percent from a year ago. GDP in Q2 was r...
No Right to Complain; Runaway Subsidies; Plastics and Cows
No Right to Complain Farmers in Nebraska, Iowa, Florida, and Alabama have no right to complain about Mexico’s attempt to ban GMO corn imports, nor GMO restrictions elsewhere in the world. These four states have all enacted various restrictions on lab-grown meat. Florida and Alabama have o...
U.S. Soybean Oil Outlook
Soyoil futures have seen a dramatic few years with a huge rally in 2020 sending the market to new record highs by 2022 amid the expectations for higher demand from biofuel mandates. However, since reaching mid-2022 highs soyoil has been on a long and volatile decline as global soybean and soyoi...
Market Commentary: CBOT Rallies on Export Sales, Weather; Wheat Follows Through on Reversal
Thursday and Friday are the last two days of the month with a three-day weekend present to kick off September, which helped create a “risk off” short covering tone in the markets. Consequently, the major CBOT ag markets were all higher for the day with additional fundamental develop...
Oilseed Highlights: Low Prices Yield Big Sales
The Market The soy complex followed last week’s modest gains with a larger move upward thus far this week. The funds are still near a record short but with the RSI now over 40, they are no doubt covering some of their short positions. The competitive pricing and today’s Export Sales...
No BS Labeling; Price Controls
No BS Labeling USDA issued notice yesterday that companies making environment and animal welfare claims on meat product packaging show more evidence of their practices. For example, using third party verifiers. They should also provide sampling and testing for things like antibiotics. Notably,...
U.S. and Canada Hogs and Pigs Inventory
USDA released the U.S. Canada Hog Inventory Report yesterday. The U.S. data is based on the quarterly Hogs and Pigs Report which is as of the second quarter ending on 1 June and the data for Canada is a semi-annual report as of 1 July. This is always an insightful benchmark because of the...
Market Commentary: Wheat Continues Reversal; Corn Soy Fall on U.S. Weather
The CBOT was mixed on Wednesday with wheat futures following through on Tuesday’s bullish technical reversal after Stats Canada forecast a 34-MMT all-wheat wheat crop, which was below traders’ expectations. That, combined with weather issues for some major wheat growing/exporting co...
Policy Adaptation; Policy Rejection
Policy Adaptation Europeans reacted to the regulatory over-prescriptiveness emanating out of Brussels by voting early this summer to reduce the number of Greens in the European Parliament. Conservatives won in the Netherlands, are about to take over in Austria and the central German state of Th...
U.S. Agriculture Recession
What do Germany and U.S. agriculture have in common? They may both be in recession. U.S. net cash farm income is in record decline, having fallen nearly 37 percent in two years. The Ag Economists’ Monthly Monitor survey of 70 economists shows just over half think the sector is in recessio...
Black Sea Regional Analysis
Russian Grain Markets: 19–23 August 2024 Kazakhstan announced they will close the borders with Russia for wheat from now until 31 December. This will put even more pressure on the Russian wheat market and may push them to offer softer offers for GASC tenders where they are the key players...
Market Commentary: Technical Trade Suggests CBOT Has Made its Near-Term Lows
The CBOT saw technical trade emerge and dominate the day, which sent corn, wheat, and soybeans higher after a weak overnight start. The day’s strength was sufficient to score bullish reversals on the corn and wheat charts, which indicates near-term lows are likely for these commodities. T...
Wheat 180; Thinking Small
Wheat 180 Concerned that wheat modified using biotech would cause the collapse of U.S. wheat’s overseas markets, growers wrote a policy in 2008 (later amended) that required approval of the trait in major wheat markets before domestic production could occur. It contained other burdensome...
Fiscal Policy Post Election
Regardless of the outcome of the U.S. election, policymaking in 2025 and beyond will play out in an environment shaped by the federal budget deficit and national debt. The current state of fiscal policy has been exacerbated by federal spending related to the COVID recovery response. ...
Cold Storage Anomalies
USDA’s Cold Storage report for July showed the volume of beef and pork continuing to decline. There is a natural seasonal decline as the summer barbeque season spikes demand, but there is also a decline year-over-year. Pork and beef production are rebounding and could restock freezers, bu...
Middle East, Mediterranean and Africa Regional Analysis
MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Regional Updates Iranian wheat farmers are complaining that the government has not yet paid them for wheat delivered earlier in 2024 and that this is impacting planting for the next wheat crop. Iran’s government bought 11.6...
Market Commentary: Corn, Wheat Find New Lows; Soy Complex Rallies with Soyoil in the Lead
The CBOT was mixed on Monday with corn scoring new contract lows after Friday’s crop tour’s record-breaking yield forecast while wheat was on the defensive amid the ongoing pricing malaise affecting nearly every major exporter. The Paris wheat market is particularly beleaguered righ...
Mercosur Regional Analysis
Wheat On 20 August, rainfall ranged from 2-10 millimeters across almost the entire province of Buenos Aires, the agricultural region of La Pampa, and Entre Ríos. The central and southeastern parts of Buenos Aires received similar amounts on 21 August. However, most of the core agri...
California LCFS Proposes Caps on Soybean and Canola Oil
This month the California Air Resources Board (CARB) issued a proposal to modify the Low Carbon Fuel Standards (LCFS), including a cap on the use of soyoil and canola oil as feedstocks in relation to earning credits under the program. CARB will be holding a hearing on these proposed changes on...
European Market Analysis
Regional News Drought in Romania has affected over 2 Mha of wheat, corn, rapeseed, and sunflower seed with about 40 percent of the crops having been destroyed. This is the fourth year of the past five in which drought has caused significant damage to Romania’s crops. Tunisia p...
Spring Wheat Quality
Some are raising concerns that cooler temperatures and excess late season rain have caused quality problems for the typically high protein/strong gluten spring wheat crop. There is the threat that the lower quality wheat will end up being delivered against futures contracts and is causing falli...
Political Fallacies
He who smelt it, dealt it. This vulgar framing nonetheless holds an underlying truth. Politicians are concurrently demagoguing about high food prices and warning against the fake news espoused by others. It is altogether an odorous room. Politicians in Europe have no evidence that industr...
CFTC COT Report Analysis
Friday’s CFTC report showed funds continuing to expand their short position in soybeans and added about 8.5 percent to their net position last week. That will come as no surprise to anyone watching the markets with soybeans having reached new contract low amid a dearth of fundamental or t...
Market Commentary: Little to Move the Market But it Moved Anyways
The only real market mover on this last trading day of the week was the Fed’s nod to rate cuts. It is still bearish in grains, and the soy complex continued its small rebound despite the prospect of record production. No doubt because of continued strong demand. It was the second da...
Cattle on Feed Report: Placements, Marketings Up Compared to Low July 2023
USDA released the monthly Cattle on Feed report today. Total inventory and marketings were as expected, but placements were up above the pre-report consensus. For context, all the projected ranges of estimates for today’s report were relatively tight – the consensus to...
Cotton Market Basics and 2024/25 Outlook
Following recent client requests, WPI provides the following overview of the cotton market, its basic structure and recent trends, and a short outlook for MY 2024/25. Cotton Production World cotton production is highly concentrated with four countries (China, India, Brazil, and the...
Market Commentary: Wheat Hits New Contract Lows; Corn, Soybeans Fall on Record Yields
The CBOT was sharply lower on Thursday with the Canadian rail workers strike and forecasts of record-breaking yields emboldening bears. Wheat futures scored new contract lows amid signs of weaker demand while corn and soybeans saw threats primarily from the ever-expanding production outlook for...
Livestock Roundup: Cattle on Feed Preview
USDA will release its Cattle on Feed report tomorrow; the consensus pre-report analysts’ estimate is for the inventory of cattle on feed as of 1 August to be 100 percent of last year. July placements and marketing are expected to be 104 and 108 percent respectively of last year’s to...
Oilseed Highlights: Big Crop Gets Bigger
The Market Soybeans had been rebounding from last Friday’s new contract low but news from the Pro Farmer crop tour of seeing record high pod counts caused a 20-cent plunge today in the November contract. Not only has the weather been sublime but pressure from pests and weeds are reportedl...
Market Commentary: EU and U.S. Wheat Futures Decline Sharply; Soy Climbs on Sales to China
The CBOT saw mixed trade on Wednesday with wheat futures seeing the most interesting trade as they posted double-digit losses amid weak European markets and the threats posed by the Canadian railway strike. In contrast, soybeans scored another higher close with support coming from soyoil’...
U.S. Agriculture’s Downfall; Mexican Threats
U.S. Agriculture’s Downfall Technically, Democratic presidential nominee Kamala Harris has no fingerprints on her Party’s Convention policy platform. It was produced before President Biden handed her the baton. But insiders say she is likely to continue the trade policy agenda set b...
Wheat Supplier Trends and Volatility
Global wheat ending stocks have been on a steady decline since 2017/18. Global corn ending stocks have also declined and nothing compares to the relatively small carryover for soybeans. Wheat carryover is skewed by the fact it is a food grain, and governments like China have stockpiled the grai...
European Market Analysis
Regional News Romania’s government announced a drought compensation program for farmers that will range from €200-250/ha with the total aid expense projected to reach €600 million. Algeria purchased durum wheat at prices of $328-332/MT FOB with the grain likely sourc...
Black Sea Regional Analysis
Russian Grain Markets: 12–16 August 2024 Crop Outlook As of 13 August, Russian farmers produced 69 MMT of grains from 20.6 Mha versus 73.5 MMT from 19.5 Mha last year. The average yield showed 3.36 MT/ha versus 3.76 a year ago. Wheat production reached 56.3 MMT from 15.8 Mha versus 57.4 M...
Market Commentary: Corn Dips on Crop Conditions; Cattle Plunge on Lower Beef Values
The big themes from Tuesday’s CBOT trade were that wheat continues to find slow, cautious support amid a weaker U.S. dollar and troubles in Argentina while steady corn and soybean ratings resulted in muted trade for the latter two commodities. Corn futures drifted lower as specs are neith...
CBO Farm Bill Score
The Congressional Budget Office (CBO) has scored the House Agriculture Committee’s farm bill at $322.973 billion over budget over 10 years, and $15.384 over five years. CBO’s scoring is coming under criticism from Committee Chairman Representative Glenn Thompson (R-Pennsylvania) ove...
China Developments; Canned or Uncanned
China Developments For a second day in a row, China bought U.S. soybeans now totaling nearly a half million tons early this week, not counting sales to unknown destinations. These sales come despite a U.S. industry concern that Beijing would ignore the economics favoring U.S. soybeans and purch...
Dairy Trade Expands Despite Hurdles
Concerns about faltering U.S. dairy exports last year have now subsided as growth has returned to the sector. This despite: production growth leveling off as increases in milk per cow do not offset the fall in the number of dairy farms; an 18 percent rise in dairy futures over the past year...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Egypt’s recent massive wheat tender did not generate the 3.8 MMT of buying that GASC had planned. Reports say that the long delivery period – to April 2025 – coupled with the requirement for 270...
Market Commentary: Bouncing Off the Lows Again
In 2000, the American punk rock band Sugarcult released a song called “Bouncing Off The Walls” that featured the chorus line “I’m bouncing off the walls again (whoa)”, which is a pretty good description of Monday’s CBOT trade. Except, instead of walls, the ma...
Jackson Hole Fed Conference Setting Outlook for Monetary Policy
As WPI reported last week, inflation – particularly food inflation – has been ensconced in the 2024 election campaign. The USDA released its food inflation series today, showing a trend through the end of last year that mirrors what BLS data on the CPI showed for July. Retail food i...
Interconnected Biodiesel Mess; Food Fight over Inflation
Interconnected Biodiesel Mess Markets are globalized and so when the U.S. has border measures against Chinese steel or EVs, more get diverted to the European market. U.S. imports of renewable diesel during the first five months of this year were up 29 percent from a year ago. American producers...
Limits of STU
CME corn and soybean prices rebounded today with the December corn contract price back over $4/bushel but November soybeans still under the $10 threshold at $9.76/bushel. Supplies of Brazilian and Ukrainian corn are currently priced at a premium and moving higher. China is capitalizing on cheap...
Mercosur Regional Analysis
Wheat Currently, 85 percent of Argentina’s wheat crop is in normal to good condition, reflecting a nearly 10 percent decline from the previous week. Recent rains benefited many areas, but a significant portion of the wheat has not received rain for several weeks and is showing signs...
CFTC COT Report Analysis
Friday’s CFTC report was in line with expectations as it showed minimal net fund activity with managed money traders remaining heavily short the major ag commodities. Funds bought back just 1 percent of their short position in soybeans last week while adding an equal share to their soyoil...
Market Commentary: Weather, Specs and Cheap Prices
The weather is bearish, except for spring wheat, and speculators are record short. Even having the cheapest grain in the world cannot spark enough new demand to slow the slide. Finding a bottom requires a supply shock, and the potential 20 MMT loss in Black Sea production due to drought is not...
Strategic Petroleum Reserve: Half Full or Half Empty?
On 29 July, the U.S. Department of Energy (DOE) announced that it has purchased 4.65 million barrels of crude oil to be delivered to the Strategic Petroleum Reserve (SPR) between October and December 2024. With this latest round, DOE has purchased 43.25 million barrels to replenish the SP...
Despite Market Volatility, U.S. Economic Outlook Remains Strong
As WPI readers know, the U.S. stock markets have recently seen heightened volatility due to surprising macroeconomic data and trends, including unemployment and interest rates. The data have been somewhat conflicting, with unemployment rates and inflation gauges offering different outlooks. WPI...
Third Time’s a Charm; California versus Iowa; State Run Economy
Third Time’s a Charm After losing appeals before the Ninth and Eleventh Courts of Appeal, Bayer won a unanimous decision from the Third Circuit Court that the company did not err by not labeling Roundup as a carcinogen. The Court ruled that primacy for labeling pesticides is the Federal I...
Market Commentary: Bearish Pall Over 2024/25 Sends CBOT Lower
Soymeal was the only major CBOT ag market to see significantly higher trade with the rest of the grains and oilseed sector either holding steady or scoring losses on Thursday. Favorable weather conditions in the U.S. Midwest and somewhat disappointing export sales data sent corn lower for the d...
Livestock Roundup: Food Inflation Enters the Presidential Campaign
Food inflation has made its way into the Presidential campaign. In a rally in Michigan yesterday, Republican Vice Presidential candidate Senator J.D. Vance, when asked about food inflation, called to “fire” Secretary of Agriculture Tom Vilsack and to double down on energy production...
Oilseed Highlights: Bigger, Cheaper, Bin Busting
The Market The soy complex continues its trek lower with November soybeans down 34.1 cents (-3.4 percent) thus far this week, December soymeal down $2.70 (.86 percent) but rebounding the last two sessions, and December soyoil losing 2.61 cents (-6.3 percent). Comparing historical carryout and s...
Market Commentary: Soybeans Bounce Higher; Paris Wheat Falls; Livestock Futures Extend Gains
The CBOT and CME markets were mostly higher on Wednesday with soybeans and soymeal seeing a surprise turnaround in the afternoon after scoring new contract lows overnight. There was little fundamental news to drive the reversal in soybeans’ fortunes and WPI attributes most of the day&rsqu...
Vietnam FTA; Debt versus Efficiency; Gallows Humor
Vietnam FTA USDA’s Foreign Agricultural Service notes that the U.S. is the largest trading partner with Vietnam that lacks a free trade agreement. The result is that U.S. farm product exporters continue to lose market share, especially in higher valued goods. At the same time, Vietnam&rsq...
Oats Decline
A relatively minor crop, just a little over 2 MMT of oats are globally traded each year. Still, it is an important niche and yet seemingly in decline. This year’s crop is slightly larger than last year’s, but that isn’t saying much since that one was the smallest in over a dec...
Black Sea Regional Analysis
Russian Grain Markets: 5–9 August 2024 Crop Outlook Russian analysts woke up to the fact that grain production reported from farms is higher than originally predicted. The reaction was quick and most of the main analytical agencies in Russia reforecast their numbers upwards. Particularly,...
Leverage at all Cost; NZ Joins Modern Era
Leverage at all Cost Activists have asked the Biden Administration to end the use of economic sanctions against other countries, saying they amount to a collective punishment of civilians. They acknowledge that it is not going away. In fact, all governments use every tool of leverage they can o...
Market Commentary: Soy Posts New Lows; Corn Eases on Yields, Conditions; Cattle Extend Rally
The aftermath of the August WASDE saw the major ag CBOT contracts push lower, with the greatest weakness concentrated in the soy complex. There was really nothing supportive about the WASDE’s numbers for soybeans on Monday, and Tuesday’s drop to new contract lows in new crop futures...
Citrus Impacts
The global production of oranges is nearly five times greater than the output of lemons and limes. Their distribution is different as well. Over a third of oranges go to processing, versus a quarter of lemons and limes. And less than 10 percent of oranges are moved into the export market, versu...
Tracking Sustainable Aviation Fuel
A bill has been introduced in the House of Representatives that would require the U.S. Energy Information Administration (EIA) to add sustainable aviation fuel (SAF) to the agency’s monthly published data to provide a benchmark on how the fuel is developing. Recall, the Biden Administrati...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Iraq’s wheat production is estimated by the Iraq Wheat Board to be up by 21 percent to 6.3 MMT resulting in the second consecutive year of wheat self-sufficiency for the government. The Board adds that Iraq...
Market Commentary: Corn Scores Bullish Reversal; WASDE Confirms Soy’s Bearish Outlook
The WASDE held more than a few surprises on Monday with USDA offering hope for the beleaguered corn market to the extent that futures posted a bullish key reversal on the chart. If the soybean market was hoping for similar aid, it received none, and the WADSE was deeply bearish with a record-br...
Balancing Offense and Defense; Border Measures; Economic Returns from Sport
Balancing Offense and Defense All growers of all crops are not necessarily competitive even in a large agriculture country. Major U.S. row crop growers have asked USTR to ensure that the Americas Partnership for Economic Prosperity (APEP) provide greater market access for their products. By con...
Spuds Sputter
It is reported that EU potato production has fallen by 37 percent over the past 20 years. This is consistent with U.S. potato production falling by 10.6 percent over the past five years. Some cite the impacts of climate, disease, and changing consumer demand (health) for the declines. Productio...
WASDE Livestock Projections
Today’s WASDE made marginal changes to the projections for red meat and broiler production for the second half of the year. The beef forecast is up from last month on expected slaughter totals, which is offsetting the smaller gap in weights compared to last year. In July, sl...
European Market Analysis
Regional News International demand for wheat has picked up after the recent decline in prices with Egypt and Algeria issuing large tenders last week. Egypt’s GASC set a deadline of 12 August for its large tender for over 3 MMT in several tranches, and early results indicate Ukraine...
Mercosur Regional Analysis
Wheat After several weeks of waiting, rain finally fell over much of Argentina’s wheat-planted area, bringing relief to many producers. However, some regions, including the northern core zone, western Buenos Aires, and the northern agricultural region, received little to no rain. In...
CFTC COT Report Analysis
Friday’s CFTC report showed funds more aggressively covering shorts in the grains and oilseed sector heading into the August WASDE. The most notable buying was in corn, where funds bought back 50,000 contracts or about 17 percent of their previous short position and have now shed over 100...
Market Commentary: Slow, Steady Descent Ahead of WASDE
Midwest commodity futures had a bearish but mild week relative to the volatility on Wall Street. Volume in general trended lower as the week progressed and while soymeal and lean hogs reversed last week’s gains, overall the downward slope has been shallowing out. This is especially true f...
E15 Summertime Waivers and Ethanol Supply and Demand
This week, EPA extended (effective as of today) the summertime waiver for E15 until 29 August. Note the summer driving season – when E15 would otherwise be prohibited – ends on 15 September. The beginning of the summer driving season when retail sale of E15 is prohibited start...
Cocoa Consumption and Demand – How Will EUDR Affect the Industry?
Two weeks ago, WPI published an article looking at the supply-side factors in the cocoa market and what has been driving the massive price rally. With this article, we will look at the consumption and demand-side factors that are likely to influence the market and pricing for LH 2024 and into 2...
Interactive Ocean Freight Rates (Updated 9 August)
*** Developer Note ***This app is deprecated as of 13 August 2024 and will no longer be updated. Ocean Freight Comments - 9 August 2024By Matt HerringtonDry-bulk markets continue to chop sideways with gains one week yielding losses the next before gains emerge again. This past week was one...
Market Commentary: Soybeans Make New Lows; Corn, Wheat Fall on WASDE Supply Expectations
The CBOT was once again mostly red for the day with traders preparing for the August WASDE and generally expecting large crops and ending stocks for the 2024/25 year. The Midwest weather remains nearly ideal for producing big crops, and the only real question is how harvested acreage will impac...
Livestock Roundup: U.S. Cattle and Beef Markets and Brazil’s Cattle
This past week’s slaughter at 593,000 was down 7,000 head from the previous week and down 22,000 from last year. The fed cattle portion of the weekly slaughter continues to make a larger percentage of the total slaughter than prior years with cow slaughter of both dairy and beef cows in d...
Oilseed Highlights: Decline Shallows Out
The Market The Board continued its bearish trend over the past five days of trading, though at a shallower pace. November soybeans hit a new contract low today (1007/bushel) and over the past five days have dropped another 8.25 cents (-0.8 percent). Falling soybean values have sparked purchases...
Market Commentary: CBOT Drifts Lower as Traders Prep for WASDE; Soyoil Rises on UCO Investigation
The CBOT/CME was mostly lower at midweek as traders prepare for what is expected to be a bearish WASDE report next week. The favorable shift in the U.S. weather is adding to negative sentiments for corn, soybeans, and the spring wheat crop and most are expecting large ending stocks increases in...
Proposed New Subsidy Program
Two Georgia Congressional officials, Senator Jon Osoff and Rep. Sanford Bishop, have introduced legislation that would extend crop loss payments to seasonal and perishable crop producers. Payments would be triggered when a crop’s national average price drops below its five-year average re...
Black Sea Regional Analysis
Russian Grain Markets: 29 July–2 August 2024 Russian Vice Premier Patroushev announced that Russia is 40 percent done with harvesting small grains. The harvesting pace is ahead of last year’s pace; however, production is only 64 MMT which is lower than last year’s crop. The gr...
Market Commentary: Corn, Soy Fall on Weather, Crop Ratings; Wheat Firms on EU Worries
If Monday’s trade as all about the macro market meltdown, then Tuesday’s trade was about returning to normal. Global equity, bond, and currency markets mostly reversed course on Tuesday and pared back some of the massive losses they incurred over the past three trading sessions. Tha...
Politics and Trade; EU Livestock to Get Smaller
Politics and Trade Democratic Presidential candidate Kamala Harris picked Minnesota Governor Tim Walz to be her vice president nominee on the ticket and he reveals the divide on trade for politicians. Representing a Midwest agricultural state, Walz has been a supporter of expanding overseas mar...
RAPP versus Exchange Rate
USDA is making another $300 million available to U.S. agricultural export marketers under the Regional Agricultural Promotion Program (RAPP). The program was launched in 2023 with $1.2 billion from the Commodity Credit Corporation and is in addition to other cost-share export assistance efforts...
Former House Aggie Tim Walz is Democrat Veep Candidate
Vice President Kamala Harris has picked Minnesota Governor Tim Walz as her running mate a week before the Democrat National Convention in Chicago. Walz is in his second term as Governor, first elected in 2018, and before that he was a six-term Congressman and member of the House Agriculture Com...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Egypt’s Ministry of Supply has increased its selling price of wheat, both local and imported, by about 20 percent. At the same time, the price of government wheat flour has increased by 35 percent. These pri...
Market Commentary: Grains Trade Higher Amid Rout in Cattle and Equities
Despite bearish supply and demand outlooks coupled with the ongoing selloff in global equity markets, the CBOT’s major grain and oilseed markets turned higher to start the week. Corn, wheat, soybeans, and soymeal all scored meaningful gains and – in the case of corn and wheat &ndash...
Ideas for Sustenance
Too long; didn’t read, so summarized here. Successful Farming: Farmers are trying new things. We are looking at the data from new harvest methods, changing plant spacings, row spacings, and populations. The fertility program gets pushed later and later. We rotate grazing and diversi...
Mercosur Regional Analysis
Wheat The Buenos Aires Grain Exchange said the wheat planting has ended with a total seeded area of 6.3 Mha, aligning it with other private estimates of 6.3–6.4 Mha. In certain regions, some fields were not planted due to a lack of soil moisture, and with current prices, it is not worth t...
Another Extension for BTC Proposed
Representatives Mike Carey (R-Ohio) and Ann Kuster (D-New Hampshire) last month introduced the Biodiesel Tax Credit Extension Act of 2024 that would extend the $1.00/gallon biodiesel blender credit through 2025. By way of background, the Biodiesel Tax Credit (BTC) – which applies to both...
European Market Analysis
Regional News Russia’s ag ministry says the country exported a record volume of 70 MMT of grain in 2023/24 but that total will fall to 60 MMT for 2024/25 due to smaller production. Last week, Tunisia purchased 125 KMT of soft wheat at prices ranging from $243.99-246/MT C&F...
CFTC COT Report Analysis
Friday’s CFTC report shows that funds were – through Tuesday’s data reporting deadline – cautiously covering shorts in corn and soybeans as they continued to edge back from their recent record-large short position in both commodities. That was as little surprising given...
Market Commentary: Short Covering Caps Bearish Week; Cattle and Macro Meltdowns Continue
The CBOT saw some light short covering in corn, wheat, and soybeans develop after this week’s deeply bearish trade that brought new contract lows in all three commodities. There wasn’t a lot of bullish news, other than the continued hot weather forecast for the U.S. Midwest and conc...
Oilseed Highlights: Another Week Closer to a Bottom
The Market With expectations of higher U.S. soybean output this season than officially suggested thus far, new crop positions printed new contract lows this week. With record competing output on the market from South America, the outlook is for increased stock building. On the path lower, Novem...
Market Commentary: Corn, Soy Sink on Record Yield Chatter; Wheat Firms on Quality Worries
Corn, the soy complex, and cattle futures each saw extended weakness in Thursday’s CBOT trade with the crop markets coming under pressure from favorable weather conditions and forecasts for the U.S. There is increasing market chatter about record breaking yields for both corn and soybeans...
Trade Influences
Although the Biden Administration is pushing quasi-trade agreements like APEP and IPEF, they are only expected to impact the movement of goods and services on the margin, if at all. Both President Biden and former President Donald Trump recognize that most Americans now believe that the U.S. lo...
Record Plunge in Farm Income
Tyne Morgan of the U.S. Farm Report points out that U.S. farm income is facing its largest drop in value in 2024 and its largest ever two year drop in real value when adding 2023 to the calculus. It is a $90 billion drop in two years and farmers appear to be holding on to their supplies in hope...
Livestock Roundup: Ground Beef Reaching Record Price Levels
Labor is still playing a role in cattle markets as it has since the COVID interruptions in 2020, and the labor shortage during the high beef demand period in 2021 and 2022. This time around it is what are the minimums that packers can maintain under their contracts with unions to keep slaughter...
Market Commentary: Good Crop with Improving Conditions
This growing season’s major crops were already looking good, and now weather conditions are improving. If that doesn’t spell bearish, how about new contract lows this week for corn, soybeans, soyoil, plus SRW HRW wheats. New lows were hit today for corn and soybeans. USDA&rsqu...
Activists Lose; AI Hurdles; Chevron and Biofuels
Activists Lose As of this week, there are 136 statewide ballot measures to be voted on this November in 39 different states. That is down more than 15 percent from the average for an even-numbered year election. Notably, there are no initiatives being considered that relate to activists’...
Cow-Calf Margins Hit Records, Imply Herd Rebuilding
U.S. cow-calf producers are facing unprecedented economic incentives to expand the beef herd with expected production margins hitting record highs this year. WPI’s models indicate that revenues for the “average” Southern Plains (i.e., Kansas) cow-calf operations are forecast t...
Black Sea Regional Analysis
Russian Grain Markets: 22–26 July 2024 This season Russia will fail to produce a record crop despite an earlier harvesting campaign. The Ministry of Agriculture believes in their previous forecast of 132 MMT of which wheat is 86 MMT. Interestingly, the Ministry of Agriculture is the most...
Market Commentary: CBOT Declines After Crop Conditions Didn’t
Better-than-expected crop ratings and shifting global weather forecasts sent the CBOT lower again on Tuesday. Monday’s Crop Conditions report showed broadly steady ratings for corn and soybeans across the major producers, with Kansas being the only notable decline, which was in sharp cont...
A Buffet of Thoughts
Summarized policy ideas under current debate. Technology Revolutions: The U.S. has not missed many (computers, space, nuclear power, semiconductors, solar, the internet, fracking, genetics, AI) but it has been late to the battery revolution. Economist Noah Smith Transatlantic Trade War: T...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Turkey’s year end wheat stocks are expected to drop by 61 percent due to the wheat import ban. The ban is set to expand in October but wheat imports for the year are seen dropping by 3 MMT – a drop of...
Market Commentary: Bears Concentrate on Soybeans, Wheat Scores Reversal
The CBOT started the week with a collapse in soybeans and the broader soy complex in early trade that pulled corn and wheat lower as well. Soybeans, soyoil, and wheat all scored new contract lows in the early selloff with funds eagerly extending their short positions. By the day’s end, ho...
GMO’s 50 Years On
More than 50 years after direct genetic modification was first identified, and nearly three decades after GMO crop production began in the U.S., it is still a controversial technology in many parts of the world. Opposition to GMO’s remains strong in Africa where just four countries have a...
FOMC Preview
The Federal Reserve starts its July meeting tomorrow and has now received the last key data. The Personal Consumption Expenditure (PCE) prices – the Fed’s preferred inflation measure – rose 0.1 percent in June and is up 2.5 percent in the past year compared to a 3.2 percent ga...
European Market Analysis
Regional News Kazakhstan’s grain harvest is expected to coincide with heavy rains forecast for the next few weeks, which will likely cause a significant deterioration of the crop’s quality. Last week, the EU Commission’s MARS crop monitoring unit adjusted its 2024/...
Mercosur Regional Analysis
Wheat According to the Buenos Aires Grain Exchange, Argentina’s wheat planting reached 98.5 percent of the expected 6.3 Mha last week, with some localized rains allowing producers to advance planting. However, the lack of water and frost damage to tissues caused the crop condition t...
CFTC COT Report Analysis
As expected, short-covering was the major theme from the latest CFTC Commitments of Traders report, which showed that managed money funds backed off from the record-breaking positions they previously amassed. Funds bought back about 10K contracts in soybeans and about 19K in corn, but the buyin...
Market Commentary: Down on the Day but Some Ups for the Week
Most of the major agricultural commodity contracts opened today’s trading session in the red and stayed that way to the close. Only feeder cattle and lean hogs managed small gains on the day. New contract lows were hit for December soyoil, September SRW and September HRW. Volume was overa...
Friday Shorts
Non-Meat: In a first, a Europe-based company has sought EU approval to market lab-grown meat, in this case fake foie gras. Some member states have already banned such products. While lab-grown meat remains expensive, and plant-based meat substitutes have faced declining popularity, the increase...
Cocoa: Will the Challenges of 2023 Continue into 2024?
Recently, WPI has received requests from a few clients to provide some analysis on the cocoa market. Clearly, there is a reason for this request as cocoa prices have been exceptionally volatile and futures more than doubled over the nine months from August 2023 through April 2024. I...
June Cold Storage Report
June 2024 total red meat and poultry stocks were up slightly from May but 5.4 percent below June 2023 levels due to sharp declines in poultry and pork stocks. Total poultry stocks were down 7.8 percent year-over-year (YoY) due to reductions in broiler slaughter for the month. Total pork stocks...
Market Commentary: Corn, Soybeans Rise on Weather, Export Sales; Wheat Dips on Yields, Exports
The headline for the CBOT on Thursday was the unexpected surge in soymeal export sales that boosted that market and new crop soybeans to strong gains for the day. Soymeal exports have been a prominent support for the market this year and their recent uptick after December futures fell to near $...
Oilseed Highlights: Good Exports and a Weather Premium
The Market The soy complex is on something of a rebound this week. A weather premium is finally being added as the outlook is hot and dry for August when plants in the U.S. Midwest are trying to set pods. U.S. new crop soybean export sales were impressive last week, and the combination has spar...
Livestock Roundup: Dairy Overview
As of 24 July, there have been 170 cases of HPAI in dairy herds across 13 States with the last being 22 July, in Colorado. The first confirmed case was 25 March Texas. In response to the outbreak, USDA has maintained mandatory testing requirements for lactating dairy cows prior to interstate m...
Market Commentary: CBOT Ends Mixed on Momentum Switch
The CBOT had relatively little fresh news upon which to trade Wednesday, which meant markets were largely at the mercy of fund positioning and existing trends. As equity markets fell sharply for the day and currencies wobbled, traders began looking for safe-haven assets, which helped diminish C...
Trump versus Harris Trade Policy; Africa Shines; Trade and the Environment
Trump versus Harris Trade Policy While trade policy analysts assess the future of their vocation under either a Trump or Harris presidency, there is not a lot of uncertainty. Mr. Trump has already advertised his intentions to raise tariffs. He views the U.S. trade deficit as the barometer of ho...
Decline in U.S. Flour Trade
The International Grains Council recently increased its forecast for global flour trade by 11 percent to 16.1 MMT, though that would still be a decline of 4 percent from 2023/24. Turkey dominates the global trade in flour, with some saying it does so in an unfair manner. Kazakhstan is the other...
Black Sea Regional Analysis
Russian Grain Markets: 15–19 July 2024 Russia started harvesting several weeks earlier this season due to hot weather conditions and early maturity of early grains. As of 12 July, Russian farmers harvested 32 MMT of grains from 8.4 Mha versus only 12.2 MMT from 3.3 Mha a year ago. The ave...
Market Commentary: Midwest Heat Concerns Corn, Soybeans; Cattle Finally React to COF Report
After two days of exciting trade, the CBOT settled down a little on Tuesday to reflect more deeply on market fundamentals. Monday’s Crop Progress data was largely reassuring for the major row crops, which helped create more stability in futures for the day. Wheat futures dipped but did no...
Counting Chickens: How Many Layers Are There Really?
At the end of June, there were 97.335 million birds depopulated due to HPAI; more than 75 percent at 73.5 birds, were egg layers. So far this month according to USDA, two more operations in Colorado have depopulated another 3.1 million birds, first on 8 July (1.8 million) and the second on 16 J...
U.S. Policy Battle; WTO Policy Battle; EU Policy Battle
U.S. Policy Battle The two major parties are past the battle over President Biden’s age and should move on to the policy differences. Democrats will try to take their own problem of Biden’s age and apply it to Trump but it is likely to have less salience. Instead, the election will...
Cultivating Canola Crystalizes
In just four years, U.S. production of canola has expanded by 73 percent, albeit from a smaller base. The production of biodiesel and renewable diesel are the drivers but more interesting is how part of the expansion is occurring. The incentives remain large for using oilseeds as feedstoc...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Iraq’s government announced record local wheat purchases of 6.3 MMT. Iraq is now self-sufficient in wheat. The government says that this will help it to ensure long-term food security and economic stability...
Market Commentary: CBOT Rallies as Funds Cover Shorts, Markets Forge Bottom?
The CBOT was mostly higher for the day with the strength originating from the soybean market and spilling over into corn and soybeans. The soybean market derived its strength from new forecasts of hot, dry weather for the U.S. Midwest as the soybean crop approaches pollination and pod filling...
Weekend Reading Insights
Because the information superhighway is tl;dr, we did the work for you and summarized the most relevant. Economic Growth: It is not just the result of building tangible things but making use of new ideas. It is relentless technological progress. Economist Daniel Susskind Trade Flows: Water foll...
Perceived Rice Shortage
Rice prices have begun to normalize after spiking recently due to India fearing a shortage and imposing export restrictions. This sparked panic buying and resulted in higher prices. The price of rice early this year was around $602/MT, substantially higher than the historical average of $381/MT...
Biden Drops Out 107 Days Before Election: What Now?
The 2024 election cycle has been unique from the outset, and it just got more so with President Joe Biden opting to step aside. This came after more than three weeks of a crescendo of calls from within the Democrat party for the President to drop out of the race. The trigger was Biden’s d...
Mercosur Regional Analysis
Wheat Argentina’s 2024/25 new crop wheat campaign is already 95 percent sown, but the last plots are struggling to finish. The lack of surface moisture is delaying the sowing of the remaining plots, mainly for short cycles in the central agricultural region. The campaign will likely end w...
European Market Analysis
Regional News Russia set a new record for wheat exports in MY 2023/24, with the country shipping 55.3 MMT of grain and accounting for 26.1 percent of global exports. Egypt’s GASC secured 20 KMT of sunflower seed oil at $1,013.99/MT for 1-15 September delivery. The original pla...
CFTC COT Report Analysis
The latest CFTC Commitment of Traders report highlights the ongoing bearish sentiment for oilseed and grain markets with managed money traders remaining massively short agricultural commodities. Perhaps the most notable item in this week’s report was the expansion of the record-large net...
Market Commentary: Mixed Week – How Low Can It Go
Trading opened today’s session mostly in the green, except for feeder cattle, but late in the session corn and the soybean complex turned lower. Notables for the week included new contract lows for: November soybeans December soymeal September SRW September HRW September HRS Weather wi...
Cattle on Feed Report: Inventory Up, Placements and Marketings Way Down
USDA released the monthly Cattle on Feed report today. Total inventory was up as expected, but a big drop in placements and a lower-than-expected volume of marketings made the report bullish. First, let’s look at marketings, which came in only slightly lower than expected, bu...
Summary of Recent Factors Driving Commodity Price Action
Recently, a WPI client asked if we could summarize the major factors that have driven commodity markets over the past several months. The goal is to succinctly describe how markets have ended up in their current state and examine the next major trend(s) that are likely to develop. This report,...
Market Commentary: Spring Wheat Rallies on Dry Weather; Soybeans See Large New Crop Export Sales
The CBOT saw a mixed day of trade with corn and soybeans seeing pressure from favorable U.S. weather outlooks and large supply expectations. Soybeans managed to find some support after USDA reported large export sales for 500 KMT of new crop soybeans overnight, the first significant sign of new...
Doubling Down on Protectionism; Conflicting CAP Goals
Doubling Down on Protectionism Typically, the party platforms crafted every four years by Republicans and Democrats are equally meaningless. Some of their policy prescriptions become codified but many do not. But speakers at this week’s Republican Convention are leaving no doubt that &ldq...
Oilseed Highlights: Market Stabilizing, For Now
The Market November soybeans traded at a new intrasession contract low of 1031.75/bushel on Thursday, a four-year low, but then bounced back and closed at its high for the week. The big drop came on Monday and pricing has now stabilized. There is near-term support in that old crop soybeans and...
Livestock Roundup: Hog Pressures
Last week, WPI noted in a summer cattle market outlook that 14 percent of the cattle producing regions were in drought, compared to 38 percent last year, with the exception of the southeast cow/calf country where drought is worsening and raises questions about cow culling, heifer retention, and...
Market Commentary: Firmer Trends Continue; Ukraine’s Corn in Jeopardy
The CBOT saw generally quiet, steady trade at mid-week, but many players noted firmer undertones as futures stabilize or start to recover from deeply oversold conditions. Corn and all three wheat futures markets turned higher with cautious bull spreading with the latter market seeing support fr...
No Olive Branch; Farm Price Charade
No Olive Branch In 2018, the U.S. began imposing 30-44 percent antidumping and countervailing duties on ripe olives originating in Spain. The EU was aghast since it implied that farm payments could be countervailed. Brussels challenged the duties in the WTO dispute settlement process and won. T...
Black Sea Regional Analysis
Russian Grain Markets: 8–12 July 2024 Russian grain markets remained unmistakably bearish which is tradition at the peak of grain harvesting campaign. Even though this year’s crop is quite modest compared to the past several seasons, the pressure on prices is significant because of...
Market Commentary: Corn, Soy Post Half-Hearted Reversals; Hogs Extend Nascent Rally
Tuesday’s CBOT trade featured gains in corn and the soy complex with funds casually covering some of their massive short positions amid oversold technical conditions and following Monday’s damage-inducing storms across the Midwest. Conviction was lacking, however, and the day’...
Trump Picks JD Vance as Running Mate
On the eve of the Republican national nominating convention, Former President Trump has picked freshman Ohio Senator JD Vance, a one-time critic, to be his running mate. There is an element of generational balance; Vance is 39, Trump is 78. Ideologically, Vance who was endorsed by Trump in the...
Food Security Angst; More Trade Agreements; Ag Regains EU Power
Food Security Angst Norway announced that it would spend $6 million a year for five years to build up a 60–75-thousand-ton grain reserve, or a three-month supply. The head of the Olam agricultural trading warned of a potential future food war. Supply chains are fragile, countries are erec...
Poultry Wins Meat Battle
The latest OECD-FAO Agricultural Outlook plots the growth outlook to 2033 for the major animal proteins and with little surprise, poultry expands its lead. With a per annum growth rate of 1.4 percent, poultry production expands at nearly three times the rate of increased pork production. Howeve...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Pakistan has banned the import of wheat and the export of wheat flour in order to “regulate the wheat market”. The ban on wheat flour exports only covers flour made from imported wheat. Pakistan’...
Market Commentary: Bearishness Envelops CBOT Trade
The CBOT was sharply lower on Monday with markets seeing continued pressure from Friday’s generally bearish WASDE, favorable Midwest weather trends, and gains in the U.S. dollar following the weekend assassination attempt on former President Trump. The assassination attempt obviously does...
WASDE Mid-Year Livestock and Poultry Forecasts
The July WASDE upped the projections for red meat production and trimmed the broiler forecast by 85 million pounds. The beef forecast is up on heavier weights. To benchmark, the average slaughter weight last week at 1,383 pounds was up 39 pounds per head compared to a year ago. Much of t...
Mercosur Regional Analysis
Grains Weather Argentina has faced extreme cold across the country for several days with temperatures well below 0 degrees Celsius for many hours. This extreme weather impacts various crops. For maize still standing in the field, the cold aids in drying and thus speeds up the harves...
Farm Bill Reassessment; Von der Leyen Threads Needle; Trade Agreements are Dead
Farm Bill Reassessment The chance of reauthorizing the farm bill this year was already looking unlikely but now it has shifted that way for new reasons. A House Agriculture Committee approved bill pleased farm groups but faced a gauntlet from food assistance groups and others on the political l...
Sugar Volatility
It has been a volatile year for global sugar prices. They hit 27.95 cents/pound on 6 November 2023 – the highest since 1980. They fell 30 percent to 19.69 cents/pound in May and now are running around 20.26 cents/pound. It is difficult to draw a complete supply/demand imbalanc...
Market Commentary: WASDE Bearish Wheat, Neutral Corn; Soybeans Fall on Demand Worries
CBOT futures had a relatively muted reaction to the USDA’s July WASDE as large U.S. and global new crop ending stocks damped much of any potential volatility. The biggest theme was larger U.S. and world wheat supplies and stocks while the outlook for corn saw far more muted changes. Soybe...
CFTC COT Report Analysis
Funds now hold their largest short position in corn futures since at least 2015 after adding another 9,000 contracts to their holdings last week. That, and their selling of nearly 30,000 soybean contracts to bring their short in that market close to the record short were the headlines from this...
Oilseed Highlights: WASDE Fails to Stem Price Decline
The Market The USDA July WASDE was directionally bearish but not as much as expected. The trade initially turned higher after the report’s release but couldn’t sustain the turnaround. Instead, the week involved the November contract falling from grace, or at least dropping below the...
SCOTUS Regulatory Ruling Already Having Impact
On 5 July, WPI reported that the recent Supreme Court decision on Loper Bright Enterprises v. Raimondo, which overturned the so-called “Chevron deference” whereby courts were to defer to agencies interpretations of ambiguous legislative intent, could have significant impacts on fede...
Market Commentary: New Contract Lows, Including a Soymeal Double
Contrasted with yesterday’s sour mood, most contracts found greenery in today’s trading. But that doesn’t mean the bearish overcast went away, it just took a small break here and there. Beyond the general tenor, there were some notable milestones: Corn and soybeans got a sma...
Livestock Roundup: Summer Cattle
The beef and cattle market is now past the milestone 4th of July holiday, between Memorial Day and Labor Day weekends that define the high demand season. Beef demand has held up so far and so has cattle supply, perhaps more than otherwise would have been expected. The last cattle on feed report...
PRC GMO in USA; Food Aid Dependency; CFTC Musical Chairs
PRC GMO in USA Members of Congress on the House Select Committee on China are furious at USDA for moving forward with approval of a biotech soybean developed by China’s QiBiodesign. China has refused to approve for domestic planting GMO’s that have been develop by Western companies...
Market Commentary: Bulls Don’t Dare Challenge CBOT Bears
Bears once again dominated trade at the CBOT on Wednesday with a favorable U.S. weather forecast and somewhat surprisingly cheap wheat from Russia proving the impetus for the day’s selling. The soy complex saw perhaps the most dramatic and persistent declines for the day, with a combinati...
U.S. Talk Representative; EUDR Expansion; Hungary Tanks Innovation; Russia Bolsters CAP
U.S. Talk Representative The Generalized System of Preferences (GSP) that grants duty free access to products from poorer countries expired almost four years ago. The African Growth and Opportunity Act (AGOA), which provides similar nonreciprocal preferential access to the U.S. market but aimed...
Geopolitical Trade Substitution
Historically, Canada has been the fourth largest producer of green peas and the largest exporter of the product. Canada’s global market share for the green pea trade was 37.9 percent in 2022, while Russia supplied 13.7 percent. Meanwhile, China is both the largest producer and importer of...
Black Sea Regional Analysis
Russian Grain Markets: 2–5 July 2024 Russian grain markets remained unmistakably bearish under pressure of high carryover and optimistic new crop forecasts. New crop is already arriving at inland elevators and even port terminals. Feed wheat lost $10/MT on a week which is a good indicator...
Market Commentary: Corn, Wheat Stabilize while Soy Complex, Livestock Collapse Further
Trade at the CBOT was highly mixed across the different market categories Tuesday with grains (corn and wheat) seeing mild gains and signs of pre-WASDE stability emerge while oilseeds and livestock futures sold off sharply again. The vegoil rally that last week’s tensions between Indonesi...
Trade Barriers or Facilitation; Ag Rises in EU; Biden Regs
Trade Barriers or Facilitiation The WTO reported that its monitoring of various countries evidences that members are introducing more trade-facilitating policies than they are trade-restrictive measures. It only seems unreal because the trade restrictive practices receive more media attention...
Wheat Supplies and Price Both Falling
Global wheat ending stocks have been persistently falling now for five years. Ordinarily, price and carryover supplies move inversely but the price of wheat has been dropping for four straight years along with the availability of wheat. The same is true more recently. Forecasts in recent...
Regulatory Agenda for 2024
The Administration has released its regulatory agenda for the rest of 2024. The agenda is a public notice process that details agencies’ work on proposed and upcoming regulations that will be put out for comment. In all, USDA has 109 regulations in the works, some significant and some les...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Egypt is the largest importer of Russian wheat with imports of 8.6 MMT in MY 2023/24 that ended June 30. Egypt’s government purchases of local wheat have reached 3.55 MMT causing the target purchase to...
Market Commentary: Grains Fall as Bears Grab Control
Bears were solidly in control of trade at the CBOT on Monday with mostly favorable U.S. weather forecasts and expectations of a bearish July WASDE report driving price action. Grain and oilseed markets were lower overnight with Matif wheat futures leading the CBOT and KCBT into the red in early...
Capital Investment and Productivity
While much of the focus on Europe relates to political instability in the EU, and threats from Russia, there are ample economic issues that also need to be addressed. This is true in both industrial production and agricultural output. European farms continue to lag their American counterparts i...
CFTC COT Report Analysis
The weekly CFTC report was in-line with expectations as it showed funds remaining dedicated net sellers across oilseed complex. The only exception was the buying in soyoil, where funds took back nearly half their short position in that contract amid the fears about the Indonesia-China trade war...
Dairy is Trading Despite Headwinds
U.S. dairy exporters have kept product moving despite a strong dollar and softer global demand. Prices for dairy have moved higher and are expected to stay that way. Producer fixed costs such as labor and equipment have moved higher, but feed costs are dropping. There is also the threat of HPAI...
Ag Appropriations Overview
Congress is back in session after the 4th of July Independence Day holiday break. But there are only 12 days on the legislative calendar for the month; there will be a break next week for the Republican nominating convention, and then Congress adjourns for the August recess on 2 August. Legisla...
Mercosur Regional Analysis
Wheat Argentina Wheat planting slowed last week, and farmers only seeded any additional 4 percent of the estimated area. The main reasons are the lack of surface soil moisture in the central and northern agricultural areas, and excess moisture in the south. Fifteen percent of the es...
European Market Analysis
Regional News Europe saw mixed weather trends last week with showers in western Europe, Scandinavia, and the Balkans. Ukraine received little to no rainfall, however, and Russia was also dry, except for light showers in the southern region. Dryness and heat building over eastern Europe re...
Market Commentary: Lower Volume, Soyoil Spikes, and Short Covering
Volume was expected to be light today given yesterday’s holiday and a weekend ahead. And it was low for corn, soybeans, soymeal, and all three wheats. Plus, there is little new or different information when it comes to fundamentals. For the week, it was soyoil that stood out above t...
Oilseed Highlights: Soyoil Drives Reversal for Soybeans, But Not Soymeal
The Market After hitting a four-year low last week, November soybeans reversed course this week, adding 25.75 cents (2.33 percent) to end at 1129.75/bushel. It was driven by strong demand in soyoil for renewable diesel, and possible trade retaliation by China against major palm oil suppli...
New Paradigm for Regulatory Policy?
On 28 June, the Supreme Court issued its decision in Loper Bright Enterprises v. Raimondo (Secretary of Commerce) case, which could have significant impacts on federal regulatory policy moving forward as it overruled the so-called “Chevron deference” in place for the past 40 years...
U.S. July Fourth Holiday
Please note that Ag Perspectives will not be published tomorrow, Thursday, 4 July 2024 in observance of the Fourth of July holiday in the U.S. We will resume our normal report schedule on Friday, 5 July 2024. Enjoy the holiday!...
Market Commentary: Soy Complex Extends Rally while Corn, Wheat Move Lower
Pre-holiday trade at the CBOT featured the continuation of the soyoil and broader soy complex rally while corn and wheat sagged lower in uninspired trade. Trading volume was expectedly light ahead of the one-day break in trading and few markets made major moves. Those that did, however, include...
Transatlantic Monopsonists; Ex-Im Battle Continues
Transatlantic Monopsonists The three coalition partners (EPP, S&D, Renew) set to continue running the EU cannot agree on a sustainability agenda since the Greens got trounced in recent elections but they do agree on farmers. Specifically, they agree that farmers do not get “fair&rdquo...
Black Sea Regional Analysis
Russian Grain Markets: 24–28 June 2024 Russian grain markets are moving slowly but steadily to the end of the current season anticipating new crop pressures and global trends. Overall, the market was bearish last week, but a bigger bear seems to be ahead as the new season is only starting...
Market Commentary: Soyoil Leads Soy Complex Higher Again; Cattle Find Pre-Holiday Support
Once again, the excitement at the CBOT was dominated by soyoil, which posted its fifth straight higher close amid rising trade tensions between Indonesia and China. The rally in soyoil – and the broader vegoil complex – helped push soybeans higher and at one point November soybeans...
Corn for Cars; Squeezed Between Two Labors
Corn for Cars Incoming Mexican agriculture minister Julio Berdegue said his country’s new government will not reduce imports of (GMO) yellow corn, but will make self-sufficiency in white corn a priority. Others suggested GMO white corn will continue to be restricted no matter the verdict...
FMMO Proposal Released by USDA
Yesterday, USDA’s Agricultural Marketing Service (AMS) released its proposed changes to the Federal Milk Marketing Order (FMMO) from the hearing process that started in July 2023. Below are some of the key updates proposed by AMS: Milk Composition: Update the factors to 3.3 percent...
Corn Basis Pressure Points
Last week’s USDA Quarterly Stocks report revealed that farmers are holding 36 percent more corn in on-farm storage than a year earlier. One rule of thumb is for farmers to calculate their break-even point and then market their crop over the marketing year. The old calculus, before South A...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Egypt reports receiving 3.55 MMT of local wheat from farmers in this year’s harvest. The government’s local wheat buying target of 3.5 MMT has been exceeded. Egypt’s wheat reserves now stand at 6...
Market Commentary: Changing Winds for Soybeans, Wheat?
CBOT grain futures initially saw continued impacts from Friday’s surprisingly bearish USDA reports, but those shockwaves seemed to fade throughout the day, which left wheat and soybeans to trade higher. Wheat found support from dryness in the Black Sea and smaller crop estimates for Russi...
Summary of Weekend Reads
Back by popular demand. Hang on to your seat, this is a whirlwind review of this past summer weekend’s beach reads. Taxes: One of former President Donald Trump’s signature accomplishments was the 2017 Tax Cuts and Jobs Act (TCJA), which his opponents derided for cutting the taxes of...
Misalignment of Land and Labor
U.S. fruit and vegetable growers made their annual trek to Capitol Hill but instead of their usual gift of a full box of fresh produce for the Members of Congress, they only filled it a quarter full. Their message: fresh fruit production has fallen by 10 percent and fresh vegetable output has g...
Mercosur Regional Analysis
Weather Projections made by NOAA on 20 June for the rest of the year show, for the third consecutive month, a decrease in the predicted cooling of the sea surface temperature in the central equatorial Pacific compared to what was calculated in March this year. This indicates that the intensity...
European Market Analysis
Regional News European weather trends remain unfavorable for crops with drought in Hungary and Romania hurting winter crop development and yield potential while wet weather slowed summer crop seedings across France, Germany, and Italy. Now, heatwaves across Spain, eastern Europe and the B...
USDA Still Quantifying Practices and Procedures for 45Z Tax Credit
On Friday, USDA released a Request for Information (RFI) on the Production of Biofuel Feedstocks Using Climate-Smart Practices, with a 30-day comment period. That implies that the earliest the final rule under 45Z could come is in September – considering a 30-day comment period and, at th...
Market Commentary: Reports were Bearish Corn; Neutral Soy and Wheat
The market had been positioning in advance for today’s USDA Acreage and Q2 Stocks reports to be bearish and traders were generally rewarded. Though corn absorbed the harshest reaction, more than half its weekly losses occurred earlier in the week. For the week: September Corn: -7.5%...
Oilseed Highlights: Fifth Weekly Drop in Value
The Market This was the fifth consecutive week of decline in soybean values. November soybeans lost 16 cents (-1.42 percent) to finish out the week at 1104/bushel. December soymeal was down $5.90 (-1.72 percent) for a contract value of 335.5/ST. December soyoil ended the week at 43.79/pound, a...
USDA Proposes More Packer and Stockyard Act Rules
The Administration has proposed a new rule, Fair and Competitive Livestock and Poultry Markets, designed to clarify unfair practices under the Packers and Stockyards Act (PSA). This is the fourth in a suite of livestock marketing rules promised in 2021 via President Biden’s Executiv...
Market Commentary: Stocks versus Weather
While the overnight market was all green except for soymeal, it was only joined by wheat in green by the end of today’s trading session. There were lots of lead changes for corn and soybeans, with narrow trading on both sides of nowhere. This led to some mini-whiplashes as the market calc...
Livestock Roundup: Hogs and Pigs Report
Today, USDA released its quareterly Hogs and Pigs report for the March through May quarter. The total inventory of hogs and pigs on 1 June was 74.5 million head, which was 101 percent of June 2023, in line with pre-report expectations. This is the second consecutive year to see an increased Ju...
Technology Ignores Regulators; Two Records in One Year
Technology Ignores Regulators Perhaps as expected, EU member states failed to agree to the latest compromise language on allowing the development of new genomic techniques. Meanwhile, researchers at the University of Sydney have developed a gene editing tool, seekRNA, that could provide higher...
Market Commentary: A Weak Bounce for Wheat; Livestock Rally
Wheat and soyoil managed some green today, but corn, beans and meal saw red. Not the whole session, but most of it. Volume could be called modest to low in corn and soy complex as the trade appears to have found its positions ahead of Friday’s key USDA reports. July corn and August lean h...
Mixed Action for U.S. Exporters; Attacking American Citizens
Mixed Action for U.S. Exporters The Biden Administration announced an initiative to boost U.S. business opportunities abroad. The effort will be led by the State Department, USTR, and the Commerce Department. No USDA. American industry has long run trade deficits but now agriculture has slipped...
Black Sea Regional Analysis
Russian Grain Markets: 17–21 June 2024 Russia’s grain markets were quite volatile with some regions showing price recoveries. Southern Russia’s harvesting campaign is underway. Fresh demand for new crop barley has seen better price levels and as long as feed barley exports are...
Market Commentary: First the Acreage Report, Then the Weather
The trade today continued to set up for what could be a bearish USDA Acreage report at the end of the week. Certainly, there is the possibility of farmland switching from corn to soybeans due to rain delayed planting. But there is also the chance that both crops got planted on more land than th...
Hogs and Pigs Report Preview
On Thursday, USDA will release its Quarterly Hogs and Pigs report. Key data will be inventories of slaughter hogs, breeding sows, an estimate of the March–May pig crop with its accompanying litter rate, and producers’ farrowing intentions for June through August – the second e...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Iran’s wheat production is forecast by the FAO to be at 13.5 MMT out of total grain production of 19.8 MMT, including rice. Iran’s total grain imports are seen as reaching 14.9 MMT. Iran’s govern...
Market Commentary: Corn, Soy Post Turnaround; Hog Selloff Continues; Cattle Shrug Off COF Report
Trade at the CBOT was dynamic and interesting on Monday with early-day weakness sending wheat, corn, and soybeans all to fresh lows while late-day short-covering and buying pulled the latter two markets higher. Soybeans scored double-digit gains for the day while the corn market could only mana...
The Future of Loose Fiscal Policy and the Economy
Since the early 2000s, there has been plenty of discussion about whether monetary policy is too loose or too tight given the underlying economic conditions. It continues through today as the Fed tightened monetary policy to reign in inflation after the massive amounts of fiscal policy stimulus...
NGT Test this Week; New Mexican Authorities
NGT Test this Week The Belgian presidency of the EU will make its last effort to obtain approval of a regulatory proposal for new genomic techniques. If it fails, the effort will be passed along to the Hungarian presidency that begins in July. Chances are, it will fail despite being watered dow...
Pork and Beef Diverge
U.S. beef production has been falling but pork output is rising. The higher price of beef has made the consumption of competing animal proteins like pork and poultry more attractive. Thus, pork prices initially got a boost out of the extra demand created by the shortfall in beef availability.&n...
Mercosur Regional Analysis
Wheat It was a short trading week in Argentina with holidays on Monday, Thursday, and Friday and the CBOT being closed on Wednesday, all of which led to low activity for the week. Origination and FOB markets were quiet for both corn and wheat. Presently, with a weekly progress of almost 2...
Market Commentary: Grain Rally Fades; Soybeans Try for Recovery; Bearish COF Numbers
The CBOT was mixed to close the week with traders seeming to take a break after this week’s generally bearish price action. There was notable short profit taking that helped the soy complex, while corn and wheat continued to drift lower amid weak technicals and bearish fundamental sentime...
Cattle on Feed Report: Placements Way Up in May
USDA released the monthly Cattle on Feed report today. Placements were the only category off from the consensus expectation. The range of estimates was a low of 95 percent to a high of 102.4 percent. Actual placements were 104 percent of May 2022. For the year, January through May,...
Oilseed Highlights: Big Potential Supplies, Weather Bear on Market
The Market For the week, the July soybean contract fell 1.6 percent in value and is trading at 1160.5/bushel, its lowest level in three years. November soybeans ended the week at 1120/bushel, a loss of 2.5 percent. July soymeal is now at 361.8/ST, down 0.7 percent on the week. Soymeal remains t...
Poor Feed for the Golden Goose; Disingenuous Argument
Poor Feed for the Golden Goose Most people understand basic economics, but not all the subtleties of its principles. Competition makes sense, unless someone says it’s unfair. Some politicians trying to lead America out of its muddle, which is to say the octogenarian “leadership,&rdq...
Market Commentary: Still Looking for that Inevitable Bottom
Today, everything bled red except live cattle. Generally favorable U.S. weather overhangs the market until USDA’s Acreage Report is issued next week on 28 June. Nothing is tanking as much as wheat, with Paris now entering oversold territory and July HRS hitting a new contract low...
Livestock Roundup: Cattle on Feed Preview
USDA will release its Cattle on Feed report tomorrow; the consensus pre-report analysts’ estimate is for the inventory of cattle on feed as of 1 June to be 99 percent of last year. May placements and marketing are expected to be 98 and 100 percent respectively of last year’s totals...
Black Sea Regional Analysis
Russian Grain Markets: 10–14 June 2024 Last week, Russian grain markets were quite volatile. In the south, the main export-oriented areas saw grain prices drop following the global bearish trend and Russia’s most recent failure on the GASC tender in Egypt. Moreover, Russia’s s...
Market Commentary: Soy Complex Rises on NOPA Crush; Harvest Progress Pressures Wheat; Cattle Conundrum
The CBOT was mixed on Tuesday with the Juneteenth holiday on Wednesday blunting trading volume and overall price action. Corn and soybeans settled higher amid modest declines in crop ratings and emerging technical support while the wheat market ignored hot, dry conditions in eastern Europe and...
U.S. Juneteenth Holiday
The CBOT/CME markets and our offices will be closed tomorrow, Wednesday, 19 June in observance of the U.S. Juneteenth holiday. Please note that the next Ag Perspectives will be published on Thursday, 20 June. ...
Tight Margins Prevent Disruption; Hungary Isn’t Hungry; Two-Tiered Pricing
Tight Margins Prevent Disruption While populist politicians complain about corporate greed, the businesses with long term success in agriculture achieve their success via tight margins. Bloomberg notes that upstarts in the “agrifoodtech” space like Farmers Edge Inc. and Gro Intellig...
Trade Spat Between China and EU
When President Biden announced higher Section 232 tariffs on a list of Chinese goods (see WPI 14 May) anxieties were raised over possible retaliation (see WPI 10 June). Right now, the EU is on the leading edge of the tariff tit-for-tat. Yesterday, China announced its Ministry of Commerce would...
Biofuel Trade Issues
U.S. ethanol exports during December-March were up 42 percent over the same period a year earlier. The increased sales are not due to the price of petroleum as there is a very low correlation between the two. Instead, demand is driven by efforts to reduce the carbon intensity of fuels, particul...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Turkey’s announcement that it would stop wheat imports from June to October in order to protect local wheat production has surprised and upset the wheat trade in Turkey and internationally. Turkey’s la...
Market Commentary: No Threats so Hedging Bearish
Final planted numbers are unknown until late this month and the spread on that outcome is wide, but weather is only a theoretical threat to what could be a big U.S. crop. USDA’s weekly Crop Progress report was released after the market close, but the crop conditions were already viewed as...
U.S. Pork Kept Out of Africa
At a recent hearing of the Senate Finance Committee, the National Pork Producers Council (NPPC) highlighted Africa’s call for the renewal of the African Growth and Opportunity Act (AGAO) while at the same time calling for the removal of South Africa and Nigeria from the agreement because...
Mercosur Regional Analysis
Wheat Wheat planting is progressing rapidly. According to the Buenos Aires Grain Exchange, 43 percent of the estimated 6.2 Mha have been sown. The Rosario Grain Exchange is slightly more optimistic, estimating an area of 6.9 Mha, and a production of 21 MMT. The market, in general, is taking a m...
Market Commentary: Ignoring Weather, Modest Volume Sees Mostly Red
Grains and soybeans followed the overnight close by trading lower at the open. The early stretch just saw fractional declines but later in the morning, corn and soybeans took deeper dives. Volumes were modest to lower, except in cattle futures. Despite expectations that the current hotter, drie...
USDA Proposes Poultry Contracting Rule
Early this month, USDA proposed the Poultry Grower Payments Systems and Capital Improvement Systems rule, the third in a series of livestock and poultry marketing regulations. This proposal is targeted at regulating so-called tournament pricing systems for poultry This rule has been long in the...
Oilseed Highlights: Barely Higher And Needing Rain
The Market If it is better to be lucky than good, it is better to close higher even if only barely. July soybeans rose a half-penny this week or 0.04 percent and ended at 1179.75/bushel. In the same vein, July soyoil gained 5/100 of a penny or 0.1 percent in value to end the week at 43.68/pound...
Market Commentary: Some Higher Closes on Sideways Trade
Corn, the soybean complex and SRW all closed higher on the day with Kansas City and Minneapolis fractionally lower. For the trading week thus far, July corn is up 9.75 cents (2.1 percent), July soybeans are 10.25 cents higher (0.8 percent), and July SRW is down 7.5 cents (-1.1 percent). ...
Cutting Food Waste; Conflicting Approaches
Cutting Food Waste USDA issued a national strategy yesterday that aims to cut food waste by 50 percent by 2030. According to the agency, food waste in the U.S. involves a third of the supply. There are many reasons why this is concerning and USDA has proposed many remediation steps along the su...
Livestock Roundup: Production and Price Outlook
This week’s WASDE upped the projections for pork and broiler production and trimmed the beef forecast slightly at 5 million pounds. The beef forecast is down on lower slaughter but is offset by heavier weights. For the past 10 weeks, slaughter weights have averaged 1,399 pounds, hi...
Market Commentary: Wheat Falls on WASDE Numbers, Corn and Soy Steady; Hogs Post Turnaround
The CBOT was steady heading into Wednesday’s WASDE report from the USDA and largely remained so after the report’s release. Corn and soybeans saw few changes to the key balance sheets (the U.S., South America, and the world) and so traded mostly sideways with somewhat lackluster vol...
Farm Bill Prospects; Transatlantic Reverberations; Trade Policy Disconnect
Farm Bill Prospects Although the odds are long, there are some political dynamics that benefit the completion of a farm bill. Republicans barely control the House, but they have the potential to complete passage of a bill in that body. Democrats barely control the Senate, but there are Democrat...
Black Sea Regional Analysis
Russian Grain Markets: 3–7 June 2024 Russian grain markets remained stable and slightly bullish against solid demand for Russian wheat globally and recently appreciated markets due to fears of lower production caused by adverse spring weather. All Russian ministries, including the Ministr...
Market Commentary: Wheat Reverses Course, Corn and Soy Quiet Ahead of WASDE
The CBOT’s trade was primarily focused on last-minute preparation and positioning for the WASDE, which USDA will release at Noon ET on Wednesday. That meant corn and soybeans saw more selling pressure as expectations call for larger U.S. crops and ending stocks for the coming year. Wheat,...
Food as National Security; Food Policy and Climate Change
Food as National Security Journalists like Greg Ip and Noah Smith have identified the West’s trifecta of tools to counter China: industrial policy, export controls, and tariffs. They note another needed factor, unified western economics, but acknowledge it is difficult to achieve. Other f...
Senate Republican Farm Bill Framework
As WPI reported on 13 May, both the House and Senate agriculture committees released broad outlines of their respective farm bill drafts. The House Committee then tabled a full draft and passed a farm bill, the provisions of which were reported here. In the Senate, Chairwoman Debbie...
Priced to Move
U.S. wheat prices and export sales are moving as expected. Nearing the end of the marketing year, old crop wheat was cheaper and now new crop wheat as harvest is beginning is the better bargain. This is reflected in weekly export sales as new crop commitments are increasing and the declining su...
Market Commentary: Wheat Selloff Accelerates; Corn, Soy Stabilized Before WASDE; Cattle and Hogs Diverge
The CBOT was mixed to start the week with corn and the soy complex seeing some cautious support, mostly concentrated in old crop markets, while the massive selloff in wheat continued with funds eagerly selling into the weakness. One feature of the day’s trade was the Goldman roll, which h...
Immigration Tariffs?
At a campaign event in Arizona, former President Trump floated the idea of using tariffs on countries who don’t cooperate with the U.S. on illegal immigration, and specifically, those countries taking back citizens who illegally immigrate into the U.S. While most illegal immigration...
CFTC COT Report Analysis
As expected, funds were proven to be staunch net sellers last week, according to Friday’s CFTC report data. Funds were the most aggressive in corn where they sold nearly 90,000 contracts and obtained their largest short position since April and the largest early-June short since 2020. Fun...
Goodbye Green Deal/F2F; Unfarming California
Goodbye Green Deal/F2F The EU’s ruling elites are still assessing the impacts of yesterday’s victories by conservative parties that they had derisively called “far right,” anti-democratic, and anti-EU ahead of the election. The results and especially the loss by the Gree...
El Niño Sparks Corn Demand
Corn production in Sub-Saharan Africa has been volatile for decades but when technology and investment should have been making it less so, it has instead gotten worse. This year’s El Niño has helped make a bad situation worse. USAID’s Famine Early Warning System Networ...
Mercosur Regional Analysis
Corn This week, the Argentine government confirmed that the sworn export sales declarations (DJVE) will not be extended, unlike the previous administration. Exporters must ship a minimum of 26 MMT by January 2025. Between June, July, and August alone, DJVEs account for 8.7 MMT, with an addition...
Market Commentary: Thursday’s Dead Cat Bounce
Thursday’s few flashes of green turned out to be an anomaly instead of a turning point. On Friday the trade returned to selling off grains and oilseeds. It became the eighth consecutive session lower for SRW and HRS, and the eighth session lower in the past nine for corn and soybeans. Goo...
Oilseed Highlights: Good Weather Nudges Bearish Trend
The Market For the week, front month contracts saw a 4 percent decline (-25.75 cents) in soybeans (1179.25/bushel), a 1 percent decline (-$4) in soymeal ($360.7/ST), and a 4.1 percent (-1.89 cents) in soyoil (43.63/pound. Speculators increased their net short position in soybeans by 3.7 percent...
Mixed Jobs Report, Higher Manufacturing, and Next Week’s Fed Meeting
Today’s jobs report indicated that total non-farm payrolls rose 272,000 in May, easily beating the consensus pre-report expectation of 180,000. Total hours worked in May rose 0.2 percent and are up 1.3 percent from a year ago. Average hourly earnings increased 0.4 percent and are up 4.1 p...
Silly International Bureaucrat
UN Secretary General António Guterres has called fossil fuel firms the “grandfathers of climate chaos” and argues that advertising limits like those imposed on tobacco should be applied to the fossil fuel industry as well. Unlike tobacco, energy is a demand inelastic necessit...
Market Commentary: Bouncing Off a New Floor
Corn, soybeans, and wheat were both higher in the overnight session and added to that mood today except only HRW amongst the wheats held on to gains. For corn and soybeans, today broke a seven consecutive session losing streak, and HRW ended a six-session losing streak. Some in the trade...
Cattle and Beef: Bigger and Better Respectively
Total cattle slaughter last week during the shortened Memorial Day holiday week was down 67,000 head from the prior week and down 28,000 from last year. However, slaughter weights reached 1,400 pounds. The heavier carcass weights are being driven by lower cattle supplies, fewer cows (both beef...
Market Commentary: CBOT’s Game of Price “Limbo” Continues
The CBOT seems to be locked in a game of bearish limbo with markets battling to see which can bend itself beneath the lowest levels of technical support. Grains, oilseeds, and the entire livestock complex finished lower on Wednesday with soymeal being the only major ag market to see higher trad...
Farm Bill Prognosis; Reciprocity with Canada
Farm Bill Prognosis A recent survey of economists indicated most do not believe a new U.S. farm bill will be enacted this year. Some speculated it would be 2025, and still others thought 2026. The 2018 Farm Bill is currently on extensions that expire later this year. The Senate Agriculture Comm...
Black Sea Regional Analysis
Russian Grain Markets: 27–31 May 2024 Russia remains the focus of many world grain analysts as weather factors in Russia and Ukraine make global markets nervous and bullish. Futures markets reacted almost instantaneously while Russian markets only now realize the situation and all grains...
Market Commentary: Crop Progress Data Pressures CBOT; Hogs Collapse on Demand Worries
The CBOT was once again mostly lower with traders shedding position length and getting short as U.S. farmers make solid strides seeding the 2024 crop. There are certainly some areas of concern and potential for some acres to be planted to soybeans at the last minute, but the overall outlook is...
U.S. – Brazil Dialogue; Tone Deaf in Europe
U.S. – Brazil Dialogue The 22nd Plenary of the U.S. – Brazil Commercial Dialogue will be held in September to discuss reducing non-tariff barriers. However, some of the larger issues between the two countries should include tariffs and foreign policy. Brazil maintains an 18 percent...
Egypt Needs Wheat
Egypt’s General Authority for Supply Commodities (GASC) purchased 470 KMT of wheat today. It will come from four countries: Romania, France, Ukraine, and Bulgaria. Russia is notably absent. Egyptian President Abdel Fattah el-Sisi was re-elected with 90 percent of the vote and is now formi...
Market Commentary: Today was Green but Headwinds for the Week
Corn, soymeal, live cattle and lean hogs all traded lower during the morning start but by the end of the day, only lean hogs ended lower. There were modest volumes being traded on Friday for most contracts, except feeder cattle where it was nearly double the five-day average.December soymeal hi...
Cow-Calf Margins Steady in November, Herd Expansion Still Likely
Despite recent decreases in feeder cattle futures and rising feedstuff costs, estimated cow-calf producer margins are largely unchanged from WPI’s October estimate. The stable and positive financial environment means that producers are still facing strong financial incentives to expand the U.S...
McSustainability Through Feed Efficiency
McDonalds has entered the sustainability space by partnering with Syngenta and paying cattle producers to use Syngenta’s Enogen Trait corn to improve feed efficiency. Enogen corn contains an enzyme, alpha amylase. This enzyme has been added during the ethanol production process to induce starch...
Livestock Roundup: Turkey Production Adjusted Down
Turkey production in August totaled 434.7 million pounds, slightly above July production but down 11 percent year-over-year. August slaughter was down 15 percent year-over-year, but heavier weights in August (32.25 pounds) offset the reduced slaughter. Based on the August production data, estim...
FOB Prices and Freight Rates App (Updated 15 November)
Ocean Freight Comments - 15 November 2024By Matt HerringtonDry bulk freight markets were mixed this week with Capes rising while Supramax vessel rates declined yet again. The Capesize sector found support from China’s recent efforts to stockpile coal and iron ore, but this support has not yet t...
Market Commentary: Biofuel and Trade Policy Worries Pressure CBOT along with Dollar Strength
The CBOT saw another day of pronounced weakness with expectations for larger global soybean and wheat production and stocks in 2025 weighing on values. Product demand in the soy complex has also been a huge negative factor recently with uncertainty over U.S. biofuels policy causing a sharp redu...
Oilseed Highlights: Multi-Bearish Factors
The MarketThe January soybean contract has been sliding all week and despite support at the 20-day moving average of $10.01/ST, it closed today below $10/bushel for the first time this month. The reasons are many including: a rising dollar value, 2) large impending South American production, 3)...
Market Commentary: Bearish Beat Goes On
The CBOT was essentially all red on Wednesday with traders finding little support from either the fundamental or technical components of commodity price analysis. Wheat was the downside leader for the day as a strong dollar, improving conditions in the Plains, and increasingly tepid exports fro...
EU Studies Trading Houses
As part of its witch hunt for unfair market practices, the EU Parliament’s AGRI Committee requested a study of the major agricultural commodity trading companies and their impacts. The study may inform populists in the U.S. that also see consolidated industries as inherently harmful, but...
USA Gone Nuts
While oilseeds receive much of the attention, tree nuts, which are technically a seed and containing oil, have gone even more gangbusters for U.S. producers in recent years. Almonds have received much of the focus as the U.S. produces nearly 80 percent of the crop and a comparable share of the...
Black Sea Regional Analysis
Russian Grain Markets: 4 – 8 November 2024We have heard the voices from various sources forecasting a new grain crop in Russia and most of them differ in numbers. We will have to deal with terminology like bunker weight (straight from the combine) and standard weight (cleaned and dried accepted...
WPI Crop Progress and Conditions App (Updated 12 November)
Update for 1 April 2024: Last year, users pointed out differences between the 5-year averages reported in this app and what USDA estimates in its weekly report. The difference exists because WPI calculates average based on the last 5 years of observations for the current week. In cases where ob...
Market Commentary: Funds Resume Soy Complex Selling; Wheat Falls on Improved Weather
The CBOT was almost uniformly in the red on Tuesday with any bullish supply-side implications from the November WASDE largely forgotten (or ignored) amid bearish demand-side developments. The recent rally in the U.S. dollar is threatening to undo much of the export demand gains the market has w...
Cuban Pipedream
Some in the U.S. agriculture community have spent years trying to improve sales to Cuba, which have increased though from a very small base. Now there is even less reason to think they’ll succeed. Their pipedream has been a hungry population of around 11 million people just 60 miles off the Ame...
Trump’s Tariff Plan; Whither Europe; RTO Beats WFH
Trump’s Tariff PlanFew things attract more speculation than how President-Elect Donald Trump will model his plan to increase tariffs on imports. Some economists have taken his most exaggerated claims and predict they will cause slower economic growth and higher inflation. At least one advisor s...
Political Landscape Taking Shape
After the 2024 elections, the Republicans look to have taken control of Congress, along with a Trump victory, providing a Republican triple sweep. The Senate GOP majority is 53 to 47; and the House GOP majority is still TBD. However, as of today, the Republicans have secured 215 seats, and Demo...
Middle East, Mediterranean and Africa Regional Analysis
Regional UpdatesMEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGIONPakistan has decided to allow the importation of GMO soybeans from the U.S. – critics say that this decision was made without proper risk assessment and was only done due to pressure from large industrial companies. Forty...
Livestock Industry Margins
WPI is excited to present the latest edition of our newest data-driven publication Ag Perspectives Quant: U.S. Livestock Industry Profit Margins. This report offers a comprehensive look at the profitability of the U.S. beef and pork sectors, from cow-calf and farrow-to-finish producers up the v...
Market Commentary: CBOT Slips as Demand Worries Overtake Supply-Side Surprises
The November WASDE offered mixed influences for the major ag markets with USDA making surprise cuts to the U.S. corn and soybean crops and ending stocks, which rallied markets on Friday. The report also, however, cast doubts on the demand-side outlook for both crops and wheat, and that is what...
Deep Bench to Fight RFK; China Market Risk; Thankless Job
Deep Bench to Fight RFKBeing the U.S. Secretary of Agriculture is usually a pretty good job. It involves doling out billions of dollars, the constituency is dominated by courteous country people, and controversies tend to be minor. The person serving the longest in any Cabinet position was Jame...
Rice as a Stable Crop
Last year, India restricted non-Basmati rice exports believing there would be a weather-related short supply. Production was ample and now the country faces record high inventories that will likely be dumped on the world market. The OECD calculates that Indian farmers are implicitly taxed $120...
Senate Committee Changes and Ethanol Legislation
As WPI noted a week ago on 4 November, As a general rule, a Republican agenda is likely to be friendlier to liquid fuels, especially petroleum fuels, whereas a Democrat agenda is more likely to include a role for electric vehicles, and a renewable fuels policy that will focus on reducing c...
Mercosur Regional Analysis
Wheat As of the end of the first week of November, 12 percent of Argentina’s sown wheat area has already been harvested. Harvesting is progressing quickly in the country’s north, with yields that are low but within expectations. Although a few more weeks will pass before the harvest is wid...
CFTC COT Report Analysis
The major finding of Friday’s CFTC report was the confirmation that funds have officially flipped their formerly massive net short in corn to a net long. After buying back nearly 40,000 contracts last week, funds now sit long 3,035 contracts as of 5 November, a position which was extended signi...
Market Commentary: Somewhat Tumultuous WASDE
The November WASDE report usually involves some tweaking of the numbers by USDA, and that is all it mostly was today, but with some quirky impacts. First, there were a few surprises but not dramatic ones and yet the report spurred larger to outsized volume in trading across the grain and oilsee...
Who Might Be the Next Ag Secretary?
As most Presidents-elect do, former President and President-elect Donald Trump has named his new White House Chief of Staff as his first appointment. It is Susi S. Wiles. Wiles was the co-manager of Trump’s 2024 campaign, and also was a key strategist focused on Florida in his 2016 and 2020 cam...
WPI 2025 Hog and Pork Outlook
U.S. hog producers saw a mixed year in 2024 with early-year prices bringing poor profitability while the dramatic hog rally since the summer has lifted financial fortunes significantly. A major component of those rising prices was the unexpected surge in pork demand, which pushed the cutout to...
Market Commentary: Soybeans, Soyoil Rally on Export Numbers; Cattle Gain on Macro Strength
The CBOT was mixed on Thursday following the news of Donald Trump’s election to President of the United States with markets, particularly corn and cattle futures, seeing continued support from “risk on” trade. It’s not necessarily that traders and investors are particularly excited about Trump’...
Transatlantic Trade War; Traders Beat Pollsters; Transatlantic Lesson
Transatlantic Trade WarU.S. equity markets rose yesterday on news of Donald Trump’s victory, while shares in Europe fell. The EU is America’s biggest trading partner and Trump promises tariffs. EU officials are strategizing on how to deal with a Trump presidency, with some urging cooperation, a...
Livestock Roundup: Beef Overview
Little to no action has been reported in the cash markets and asking prices are back at $190/cwt and higher. Cattle supply numbers are tighter in the south than in the north, and carcass weights took a pause from the steep rise that has taken them to all-time highs this year. The latest report...
Oilseed Highlights: On an Upswing
The MarketThe January soybean contract is up 3.2 percent on the week and has is now up 3.5 percent from its late October low at 979/bushel, but it is still 5 percent below its late August high at 1083/bushel.11072024oilseeds_beans.png 1.16 MBUntil today’s turnaround following very large export...
Market Commentary: Mild Election Impacts
Outside markets closed higher and the dollar was up, but not because of bullishness over Mr. Trump’s victory. The business sector likes his pledge for lower taxes and less regulation but is less enthralled with his attraction to tariffs. In fact, the tariffs are expected to be inflationary, cau...
The Day After
The political establishment in Washington is stunned following yesterday's rout by Donald Trump and the Republicans. The Democrats’ arch nemesis not only survived everything they threw at him, but he also took an increasing share of the minority voting block that they claimed as their own. It w...
WPI Preliminary 2025 Acreage Forecasts
The polling for the 2024 U.S. Presidential election had significant forecast errors and history will likely judge the numbers as “wrong”. While it’s hard to argue against such judgement when the results proved a historic sweep for Trump versus predictions of a tight race, the pre-election polls...
Black Sea Regional Analysis
Russian Grain Markets: 28 October – 1 November 2024Russian analysts revised the 2024 Russian crop downwards to 128.8 MMT without newly occupied territories but with Crimea which was occupied a decade ago. This new forecast is down 11 percent from the previous year. Wheat is at 85.6 MMT – down 8...
Market Commentary: Election Day Brings CBOT Gains
It’s election day in the U.S. and the nation will decide on new leadership for the White House and Congress, though results may not be available for days or possibly even weeks. National polls indicate a tight race between candidates Trump and Harris, but betting markets tell a different story...
Tax Policy Outlook Post Election
After the votes are fully counted, as a new Administration forms, and Congress organizes, WPI will take a deeper look into the policy implications of today’s election. From today’s point of view, unless this election is an unexpected blowout (countering polling data that shows it neck and neck...
EU Confirmation Hearings; Japanese Independence; Lemonades out of Lemons; Border War
EU Confirmation HearingsIn a few months, it will be the turn of either Donald Trump or Kamala Harris’s cabinet nominees to seek confirmation by the legislature but this week it is Europe’s Commission designates confronting the hurdle of the European Parliament (EP). Maroš Šefčovič, Commissioner...
Middle East, Mediterranean and Africa Regional Analysis
Regional UpdatesMEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGIONTunisia will shortly receive a shipment of 33,000 MT of U.S. corn, the first shipment in quite a while. The U.S. Grains Council office in Tunis says that they expect more U.S. corn imports in the coming weeks.Morocco has...
Livestock Industry Margins
WPI is excited to present the second edition of our newest data-driven publication Ag Perspectives Quant: U.S. Livestock Industry Profit Margins. This report offers a comprehensive look at the profitability of the U.S. beef and pork sectors, from cow-calf and farrow-to-finish producers up the v...
Market Commentary: Grains Rise on Export Demand; Soyoil, Livestock Fall on Technical Trade
The CBOT was mostly higher to start the week with fresh daily export sales announcements and a solid Export Inspections report underpinning the day’s moves. While corn, soybeans, and KC wheat all settled higher for the day, gains were muted as few traders were interested in adding significant r...
Renewable Fuel Policy Outlook in 2025
Tomorrow is election day; the make-up of Congress and who is in the White House is expected to have an impact on renewable fuel policy in 2025. As a general rule, a Republican agenda is likely to be friendlier to liquid fuels, especially petroleum fuels, whereas a Democrat agenda is more likely...
Transatlantic Inverse; Farm Bill Chances
Transatlantic InverseDepending on tomorrow’s election outcome, American businesses will either be saddled with more taxes, regulations, and attacks on consolidation, or be hit with higher import tariffs and maybe the goofy ideas of people like Robert F. Kennedy, Jr. By contrast, Europe has now...
Mercosur Regional Analysis
Wheat The long-awaited rains have finally arrived in southeastern Buenos Aires, with precipitation totals ranging from 20–50 mm. While the rainfall isn’t sufficient to complete the wheat crop, it provides relief to an area where plants were beginning to suffer. For now, it halts the declin...
European Market Analysis
Regional News Algeria bought 600 KMT of wheat in its tender that closed on Monday, buying the full volume permitted, and prices are rumored to be near $263/MT C&F. Traders suspect much of the wheat is Black Sea-origin, given the diplomatic tensions between Paris and Algiers right now...
CFTC COT Report Analysis
Through 29 October, funds continued their aggressive short covering in the corn market with strong export sales justifying the move. Funds reduced their net short position by about 60 percent last week, and now hold a relatively small position of 35,000 contracts short. The continued exit from...
State Directed Meat; Living Space
State Directed MeatUSDA has been issuing loans and grants to startup livestock businesses with the goal of diversifying the industry, providing producers with more options, and lowering the price of meat. Now Pure Prairie Poultry of Minnesota, a beneficiary of $38.7 million in loan guarantees a...
Market Commentary: A Week of Notable Numbers
Except for soymeal, the rest of the grains and oilseeds contracts traded higher in the overnight, and opened higher this morning, but only corn and soyoil ended the day higher. New contract highs were scored today in lean hogs and Malaysian palm oil. A new contract low was marked today fo...
October Jobs Report Tepid
The Bureau of Labor Statistics (BLS) released the October jobs report this morning. Total nonfarm payroll employment was essentially unchanged in October (+12,000), and the unemployment rate was unchanged at 4.1 percent. The pre-report consensus was for an additional 100,000 payroll...
U.S. Soybean Crush Margin Outlook
The three legs of the U.S. soybean crush have each seen interesting and divergent dynamics over the past month that have influenced the crush margin outlook. Notably, soymeal prices have slumped $30/MT lower since early October and are hovering near contract lows just below the $300 mark. Conve...
Market Commentary: CBOT Debates Following Seasonal Rules
The CBOT was mixed for the day with wheat futures sinking lower after the HRW and SRW growing regions received favorable rains Wednesday and early Thursday. That, combined with export pressure from Russia and the Black Sea countries, put wheat on the defensive with funds emerging as net sellers...
Oilseed Highlights: Bounce off the Bottom?
The MarketJanuary soybeans have now rebounded a second day in a row after opening the week lower. While it came within 10-cents of the contract low, exports are booming and most of the bearish inputs (better weather and large South American crops, a weaker real, harvest pressure, and rising glo...
Livestock Roundup: Broiler Outlook
Broiler slaughter was 158.86 million head last week, up from 158.139 million the week before and continuing to run above a year ago. Broiler production in the last quarter of 2024 is forecast to be up 4 percent, bringing the total annual production up 2.2 percent from 2023. Any miss in th...
Market Commentary: End-of-Month Trade, Profit Taking Create Mixed Markets
The CBOT was mixed in moderate-volume trade on Wednesday with markets across the board seeing impacts from end-of-month position adjusting and profit taking. Wheat futures were higher on poor U.S. conditions ratings and drought conditions in the Southern Plains, despite forecasts of rains this...
Misdirected Fire; Over-Capacity
Misdirected FireThe Kamala Harris campaign is frustrated that the economy is hot, inflation has dissipated to just 2.4 percent, and yet voters are not feeling it. Politicians learned long ago to never tell the voters they are wrong and have misperceptions. Consequently, she has been acknowledgi...
Black Sea Regional Analysis
Russian Grain Markets: 21 – 25 October 2024The Russian grain markets remained stable on the export front and slightly bearish after recent peaks. Domestic prices are trying to catch up with export price levels and even in Siberia, prices were recovering. Global pricing effects export prices in...
Market Commentary: Poor Conditions Rally Wheat; Big Crop(s) Pressure Soybeans; Hogs Hit New Highs
The CBOT was mostly higher on Tuesday with the wheat market in the lead on worrying crop conditions and persistent drought in the HRW growing region. USDA’s initial crop ratings for the winter wheat crop were the second lowest for the week since the mid-1980s, which means the rains in the two-w...
Livestock Industry Margins
WPI is excited to present a new, weekly, data-driven publication Ag Perspectives Quant: U.S. Livestock Industry Profit Margins. This report offers a comprehensive look at the profitability of the U.S. beef and pork sectors, from cow-calf and farrow-to-finish producers up the value chain through...
Interest Rate Outlook
The Fed meets next week, the day after the election. It looks likely there will be a rate cut again for the second time in as many meetings. The federal funds futures market is pricing in a 95.4 percent probability of a cut. At the September meeting, Fed members signaled another 50 basis point...
Post-Election Transatlantic
The EU’s dependency on the U.S. for both defense and economic well-being has focused discussions in Brussels on what the relationship will look like should Donald Trump win on 5 November. The Biden Administration initiated a Trade and Technology Council (TTC) in 2021 with designs to coordinate...
Middle East, Mediterranean and Africa Regional Analysis
Regional UpdatesMEDITERRANEAN, MIDDLE EAST, NORTH AFRICA, and AFRICA – MEA REGIONTurkey’s wheat production is seen dropping by 5.5 percent to 20.8 MMT according to Turksat estimates. It also sees barley production down by 11 percent to 8.2 MMT and corn down by 8 percent to 8.3 MMT. Soybean prod...
Market Commentary: Oil Drags CBOT Lower; Hogs Hit New Highs; Cattle Rise After Report
The CBOT was mostly lower for the day with the sharp decline in crude oil futures dragging soyoil, the broader soy complex, and corn and wheat lower. There was little fresh fundamental news to guide commodity futures for the day, which gave the oil market’s plunge an outsized influence on ag fu...
Newsom for President; Fake Meat Lacks Standing
Newsome for PresidentUntil this past Friday, U.S. ethanol producers feared that the California Air Resources Board (CARB) might make an effort to limit the marketing of their products in the Golden State. Now they are singing in the streets as California Governor Gavin Newsom instructed CARB to...
Food Price Outlook Improves
There are often lags in time between when consumers notice a change in the economy, they begin to voice concerns, politicians begin to echo those concerns, and ultimately policymakers take some form of action, if any. Food price inflation is a perfect example of that dynamic. Democratic preside...
RFK Jr Role in a Potential Trump Admin Worrying Aggies
With the election one week from tomorrow, many aggies are turning their attention to the probable role of Robert F. Kennedy Jr. in a Trump Administration should Trump win the election. Over the last week, this is literally the biggest topic of conversation among this analyst’s contacts and sour...
European Market Analysis
Regional News Russia’s winter crops may see 1.5 million hectares (Mha) go unseeded this year due to poor weather in key growing regions. Originally, 20 Mha was expected to be sown to all winter crops. Grain production in 2025 is unlikely to exceed 120 MMT now, due to the acreage reduction...
Mercosur Regional Analysis
Weather Argentina saw continued rainfall throughout last week and so far during October, nearly all of the country’s agricultural regions experienced at least some precipitation. In areas like the Nucleus Region, totals have even exceeded historical averages for October. This rainfall has...
CFTC COT Report Analysis
Through 22 October, funds engaged in the expected short covering in the corn market amid the unexpected surge in exports. Funds’ total buying volume, however, was below expectations at just shy of 20,000 contracts though they certainly added to that number after Tuesday’s data reporting deadlin...
Market Commentary: Mix Week Reflecting Fundamentals
Yesterday’s bullish Export Sales report was followed by more sales of corn and soybeans today. However, there had already been sufficient gains in the futures market this week and current sales are simply on track with USDA’s forecast. The trade does not want to get too far out in front of the...
Cattle on Feed Report
USDA released the monthly Cattle on Feed report today, which was mostly in line with pre-report expectations; only placements came outside of the consensus forecast. 10252024dj.jpg 50.4 KBSeptember marks the beginning of the fall run for cattle placements. Placements last month at 2.156 million...
Forecasting 2025 Cattle Inventories: Small Herd Increases Expected
As WPI has written about several times recently, the beef industry is eagerly awaiting the January Cattle Inventory report from USDA to see whether producers are starting to expand the herd. This information will be valuable for gauging cattle supplies in 2025 and 2026 and will help set pricing...
Market Commentary: Corn, Wheat Rise on Export Data; Soybeans Fall on South American Weather
Exports remain the name of the commodity game this week with all eyes on the UDSA daily “flash” export sales announcements as well as this week’s weekly Export Sales report. On Thursday, both of those factors did not disappoint and gave the already bullish corn market another boost. USDA report...
Oilseed Highlights: Steady Under a Delicate Balance
The MarketU.S. soybean exports have been impressive, but funds continue to focus on South American rains. For the week to date, November soybean futures are higher but cannot maintain a close back up over $10/bushel. They are challenging resistance but remain below the 50-day MA at 1007.25/bush...
BRICS Grain Exchange; Transatlantic Gaslighting
BRICS Grain ExchangeVladmir Putin used his BRICS conference in Kazan, Russia to formally suggest the creation of a grain exchange by the bloc of countries. He said such an exchange could later be expanded to other products and that it would " contribute to the formation of fair and predictable...
Livestock Roundup: Cattle on Feed Preview
USDA will release its Cattle on Feed report tomorrow; the pre-report consensus of analysts’ estimates is for the inventory of cattle on feed as of 1 October to be 99.7 percent of last year; September placements and marketings are expected to be 95.8 and 102 percent respectively of last year’s t...
Market Commentary: More Exports, More Gains
A sixth straight day of daily “flash” export sales announcements from USDA sent CBOT corn and soybean futures higher with funds covering shorts and commercials positioning bullishly too. The export demand for corn caught the market by surprise and has created the current rally, while the season...
Inflation Disconnect; Economic Opinions
Inflation DisconnectEconomists including those at the Federal Reserve use so-called core inflation when assessing the level of rising prices in the economy. Core inflation excludes food and energy prices since they are considered more volatile, and less directly impacted by the Fed’s monetary p...
TFP as Focus
The International Monetary Fund increased its forecast for U.S. GDP growth this year to 2.8 percent, versus 0.8 percent for the Euro Area and the 0.9 percent average for the non-U.S. G-7 countries. Competitiveness is said to be the primary term in Brussels these days, as it should be. The avera...
Mercosur Regional Analysis: Soybeans
Last week, soybean trading saw a lot of activity, particularly with Brazilian old crop shipments and increased movement in U.S. new crop sales. CNF China trade levels began at 240X for the PNW and 255X for the U.S. Gulf, rising rapidly due to several factors. A drop in Chicago futures triggered...
Black Sea Regional Analysis
Russian Grain Markets: 14 – 18 October 2024Russian grain markets remained slightly bullish but not as bullish as a week ago. The biggest concern of all grain exporters is a “threat” from the Russian Grain Export Union that October export prices should be $240/MT and that to make this happen the...
Market Commentary: Exports, Weather Concerns Push CBOT Higher
The CBOT was mostly higher on Tuesday as export demand continues to fuel what looks like the start of a demand-led swing higher in the markets. Tuesday marked the fifth straight business day with a “flash” export sales announcement for corn, with Mexico responsible for essentially all of the de...
U.S. Dietary Guidelines: Booze and Junk Food
Every five years, the Dietary Guidelines for Americans, issued by USDA and the Department of Health and Human Services (HHS) are updated. The new guidelines will be issued next year for 2025-2030. This guidance provides advice on what to eat and drink to meet nutrient needs, promote health, and...
Policy Shortz
U.S. – EU Reset: The transatlantic relationship must be reset after the upcoming election. Brussels produced a state-by-state report on Europe’s trade and investment engagement to help set the environment. U.S. technology firms argue it is ludicrous for Europe to think it can be competitive in...
Bangladesh Food Import Projection
Bangladesh is the third largest food importer in the world. It imports over $15 billion worth of food annually or about 11 percent of its total food consumption. Imports include 5 MMT of grain (3.57 MMT is wheat), plus palm oil, milk powder, and other products. Roughly 3.5 percent of its food i...
The Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN, MIDDLE EAST, NORTH AFRICA, AFRICA – MEA REGIONAfrica spends $75 billion every year importing cereals according to the African Development Bank – 50 MMT being wheat – 27 MMT imported by North Africa, 12 MMT by East Africa and 9 MMT by West Africa. Wheat...
Market Commentary: Exports Rally Corn, Soybeans but Pressure Wheat; Hogs Hit New Contract Highs
The CBOT saw mixed trade again to start the week with a slate of fresh daily “flash” export sales announcements supporting corn and soybeans, as did a generally positive Export Inspections report. That helped soybeans recover from Friday’s drubbing and allowed the corn market to follow through...
Biggest Monopoly; Aggies Challenge Trump; Food Safety Risks and Perceptions
Biggest MonopolyReflecting voter concerns about food inflation, both Harris and Trump are attacking the food system and implying concerns about monopoly power. But no industry is as monopolistic as politics where consumer choice is often limited to just two parties. Voters are near evenly split...
Aging, Shrinking Dairy Herd Tied to Beef Dynamics
There has been much discussion this year to the size of the beef cattle herd. The year started with the lowest overall cattle herd since 1951. Demand for beef, high prices for beef and cattle, and marginal increases in imported feeder cattle have all helped maintain production, as has heavier s...
The Mercosur Regional Analysis
WeatherThe week continued with rain in some areas of the agricultural region that spread water across almost the entire region, ending a 10-day period of instability. The exceptions were the western part of Buenos Aires Province, which received only a few millimeters despite needing more, and t...
Olive Oil Volatility
Bloomberg notes the problems confronting small scale olive oil producers in Spain and Italy. Production is volatile and has been under duress from drought and climate change. As a result, the price has risen, attracting investors who are creating larger scale farms. The article says, “The Super...
European Market Analysis
Regional News Kazakhstan and Egypt are working to negotiated trade terms that would allow wheat to trade from the former country to the latter. The two countries are reportedly working on resolving issues that prevent Kazakhstan from participating in GASC tenders and are discussing the pos...
CFTC COT Report Analysis
Through 15 October, funds reversed their short covering trends and emerged as net sellers in the soybean, corn, and soymeal markets after the bearish October WASDE and shift towards wetter weather in South America. Funds doubled their short position in soybean futures and are now short a small...
Market Commentary: Harvest Pressure Outweighs Demand
There was modest to lower volume generally today, except in wheat where there was a gang beating. Wheat closed lower in the overnight, opened lower this morning, and sealed the deal with losses at the close. Soyoil was treated similarly but soybeans and corn each were higher in the overnight an...
Food Inflation and the Food Service Sector
September retail sales rose slightly more than expected and the underlying details of the report were solid. Sales rose 0.4 percent in September versus a consensus expected rise of 0.3 percent, while revisions to the prior months’ activity pushed the overall gain to 0.5 percent. The monthly inc...
Cow-Calf Margins Outperform Forecasts, Imply Herd Rebuilding
With the start of the fall weaning and marketing program for most of America’s cow-calf producers, we’re starting to see the first realized profits for the sector this year. From January through September, WPI’s cow-calf profit models are built upon the assumption that most producers will marke...
Market Commentary: Turnaround Thursday on Exports, Weather
Bears started out the week in full control of the CBOT, but their grip loosened on Thursday and bulls managed to post at turnaround in several markets. Chief among the turnaround was corn futures where an early dip below $4.00 in the December contract triggered short covering and some commercia...
Livestock Roundup: A Look at Cattle Herd Rebuilding
As WPI reported yesterday, the total supply of beef per capita is up this year over last based on imports and heavier slaughter weights; both are related to the pace of beef cow salughter. A bigger percent of fed cattle in the mix has resulted in heavier slaughter weights, as well as feeder cat...
Oilseed Highlights: Under Pressure but Hovering
The MarketToday’s IGC report increased the growth in global soybean carryout and thus reinforced the bearish trend in the November futures contract. There are still counterfactuals such as Brazil’s delayed planting, low moisture U.S. pods, plus wilt (Fusarium oxysporum) and Brown stem rot (Cada...
State Control of Markets – Russia; State Control of Markets – U.S
State Control of MarketsRussia’s agriculture ministry recently “suggested” that grain exporters not sell wheat internationally below the minimum price of $250/MT FOB. The minimum price approach is less clumsy than export quotas but is a harder stop than Moscow’ use of export taxes to try and ma...
Market Commentary: Corn Rallies on Export Sales; Bean Bears Return in Heavy Options Trade
The CBOT was mixed on Wednesday with corn rising after the USDA reported “flash” export sales of over 1.9 MMT of corn to Mexico and unknown destinations combined. The news put a bid under futures and caused corn spreads to firm slightly with funds buying back some of what they sold earlier this...
The Black Sea Regional Analysis
Russian Grain Markets: 7 – 11 October 2024The world has been watching the 2024 Russian grain harvest forecasts, especially wheat production. The Russian Ministry of Agriculture was not making any sharp moves in one direction or the other, while domestic analysts have revised the 2024 grain crop...
Asymmetric on Tariffs
Most economists are clear in describing tariffs as a border tax. Their impacts include increasing costs on consumers and reducing trade, and thus self-harming a nation’s economic well-being. Yet, it is difficult to identify a nation that doesn’t use tariffs, and most utilize them more than the...
Market Commentary: Bears Win Again, but Crush Report Buoys Soybeans
Bears were in control of the CBOT for the second straight day with very few bullish news items seeming to exist on the horizon. Between improving weather forecasts for the Northern Hemisphere, lower threat of a La Nina this year, strong harvest progress in the U.S., large crop forecasts for Bra...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Algeria decided to bar French companies from its wheat import tenders due to France’s support for Morocco’s continued sovereignty over the Western Sahara region. All tender participants have been advis...
Planned Website Downtime Wednesday, 16 October
WPI is completing a series of upgrades to our website that will require about 50 minutes of downtime on Wednesday, 16 October starting at 12:00 PM EDT. There is never a “good” time for a website to be down, but this was deemed to be among the least disruptive to our U.S. and interna...
Red Meat and Poultry Situation
As WPI reported last week, the October WASDE increased its projection for beef production by 205 million pounds on higher slaughter and heavier carcass weights and increased the 2025 forecast for beef production by 300 million pounds. Nonetheless, October slaughter is starting slowly. Total sla...
Farm Subsidies on the March
Subsidies can increase output and there are many ways to subsidize an industry, but that doesn’t mean that countries should do it. Cost of Production: The EU badly wants to become self-sufficient in plant protein. More than four decades ago Europe lost a dispute settlement cas...
Market Commentary: Bears Gain Control; Soybeans End Below $10, Corn Breaks Support
Bears regained control of the CBOT ag market trade on Monday, seemingly not because of the WASDE but rather because of shifting weather forecasts and apparently receding threats. The weather in South America is trending more favorably for the corn and soybean crops down there, and showers in th...
Politics: Will 2024 Election Yield an Unprecedented Triple Flip?
The 2024 election is three weeks from tomorrow. This cycle has been unusual. The campaign started as a Biden versus Trump rematch of the 2020 campaign, the first such rematch since 1956 (only the seventh time in history and only the second time since 1900). However, President Biden stepped down...
European Market Analysis
Regional News Political tensions between Algeria and France reportedly prompted the former country to exclude its traditionally favored European trading partner from a recent wheat purchase tender. Algeria in its latest tender specifically requested no submissions from France and purchase...
Mercosur Regional Analysis
Wheat After weeks of anticipation, rains finally arrived in the most needed areas of Argentina. At the beginning of the week, the central and northern parts of Córdoba, central and northern Santa Fe, and parts of Entre Ríos received significant rainfall. Toward the end of th...
Going up with a Bang
A futures contract that persistently moves up or down by just a penny or two each day imposes its own burden on the market. While speculators are said to prosper from volatility, and sellers want higher prices and buyers prefer them lower, everyone prefers a story. Apparently, the cotton market...
CFTC COT Report Analysis
Through 8 October, funds continued to exit their formerly massive short positions in corn and soybean futures and now hold a small fraction of that commitment. Funds covered 40 percent of their short position in soybeans and are now only short 18,000 contracts. Similarly, funds bought back half...
WASDE Wheat
WPI offers the following PDF of key supply and demand tables and charts relating to the USDA’s latest WASDE report. This is not an all-inclusive compilation of relevant market factors, only those which we feel are of top priority. WPI will seek to expand the offerings in this report and w...
WASDE Soybeans
WPI offers the following PDF of key supply and demand tables and charts relating to the USDA’s latest WASDE report. This is not an all-inclusive compilation of relevant market factors, only those which we feel are of top priority. WPI will seek to expand the offerings in this report and w...
WASDE Corn
WPI offers the following PDF of key supply and demand tables and charts relating to the USDA’s latest WASDE report. This is not an all-inclusive compilation of relevant market factors, only those which we feel are of top priority. WPI will seek to expand the offerings in this report and w...
Market Commentary: Only Pork Survives the WASDE Intact
The U.S. crop situation for 2024/25 was largely firmed up by today’s USDA October WASDE report. Net, net – there is a lot of grain available. Not enough for any precipitous drop in prices today, but only Lean Hogs managed to end the day higher. Today’s report reinforced...
WASDE Outlook for Livestock: More Beef
Today’s WASDE increased the price outlook for 2024 fed steers after dropping it in September. The September WASDE dropped the fed steer price by $3/cwt to $185.11/cwt from the month prior. Today the price forecast was adjusted up $1/cwt. The forecast for the 2025 annual...
Cocoa Market Update: Prices Rise as Stocks Fall
At the end of July 2024, WPI published an article looking at the drivers of the cocoa market’s massive rally in 2023 and 2024 and that offered an outlook for MY 2024/25. This article offers a brief update on market conditions and developments that have occurred in the two months since our...
Market Commentary: Wheat Rises as Russia Considers Export Ban; Cattle Extend Rally
The CBOT saw wheat emerge as the upside leader for the day with multiple bullish stories offering support, including one from Reuters that indicates Russia may be considering a ban on grain exports. Details are nonexistent, but there is reportedly a meeting soon between the ag ministry and grai...
Oilseed Highlights: Pre-WASDE but Relatively Firm
The Market The soybean market has been sliding heading into tomorrow USDA October WASDE report. The trade has positioned itself in the middle of the September trading range and is still positioned in a somewhat bullish position slightly above the 50-day trading average. The market has been tren...
Livestock Roundup: Red Meat Exports
August trade data was released yesterday. High prices of U.S. beef exports have kept exports down. Compared to August 2023, total exports were 102,682 MT, which was the lowest monthly total since January. For the first eight months of the year, January through August, exports at 856,834 MT were...
Market Commentary: CBOT Trades Weather and WASDE Expectations
Trade at the CBOT on Wednesday was dominated by two factors: global weather and preparations for the October WASDE report, which will come out on Friday. The weather was mostly relevant for wheat as parts of Russia, Ukraine, Australia, and the U.S. Plains battle persistent and increasingly dry...
Policy Potpourri
Good Many Organisms: The Nobel Prize in Chemistry was awarded this week to scientists at Google DeepMind using AI to predict the structure of proteins and inventing new ones. Capitaslizing on the opportunities, Ginkgo Bioworks announced that it would make available to researchers its API that u...
Say Cheese!
Ilena Peng from Bloomberg has written about the expansion of U.S. cheese exports. Former French President Charles de Gaulle once noted that his country has hundreds of different cheeses and the U.S. had hundreds of different religions. But the U.S. has since become a major producer of many diff...
Black Sea Regional Analysis
Russian Grain Markets: 30 September – 4 October 2024 The first week of September proved bullish in European Russia and slightly bearish in the Asian part and Siberia. The weather factor is important but it’s not the key driver. It may become the decisive factor later on depending on...
Market Commentary: Brazil Rains, Crude Oil Selloff Sink Soy Complex; Cattle Extend Rally on Beef Demand
Trade at the CBOT was mostly lower on Tuesday with the soy complex leading the way south as weather models show more promising rains for South America. Soybeans turned sharply lower on the forecasts and scored a bearish technical day on the chart, with additional selling pressure coming from th...
War on Food Companies; Holding Back the Future
War on Food Companies Market skeptics like U.S. Senator Elizabeth Warren (D-Massachusetts) have stepped up their attack on food companies by accusing them of price gouging by “squeezing profits out of consumers” through shrinkflation and avoiding federal taxes. They charge that comp...
USDA Announces Cattle Price Discovery Rule
Today, the Biden Administration issued an Advanced Notice of Public Rulemaking (ANPR) on Price Discovery and Transparency in Markets for Fed Cattle. This is the fifth livestock and poultry market regulation put forth under the Packers and Stockyards Act (P&SA) and under the Biden Executive...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Egypt has a program that it says will reduce wheat imports and cut subsidies on bread. The plan is to blend wheat flour with local corn and sorghum flour. Savings, it is said, could be in the hundreds of millions...
Market Commentary: Harvest and Weather Pressure Continue
Clear weather and rolling combines in the Northern Hemisphere together with prospective showers in South America maintain pressure on commodity futures. However, volume today was relatively low except in soybeans and livestock. While soybeans closed lower, the end of Golden Week and China&rsquo...
Allowing Private Contributions to Conservation Programs to Create Public Assets
USDA’s Natural Resource Conservation Service (NRCS) closed the comment period for the implementing rules for the Sponsoring USDA Sustainability Targets in Agriculture to Incentivize Natural Solutions (SUSTAINS) Act last month. The Act authorizes USDA to accept private contributions to cha...
Mercosur Regional Analysis
Wheat Despite the lack of rain, the Buenos Aires Grain Exchange maintains its outlook for this season’s wheat crop. As we mentioned previously, the rains in August and September were disappointing, and thus far in October they’ve been absent. Additionally, we are seeing rising tempe...
2024/25 Corn Outlook: Strong Demand Shifts Prices Higher
In light of the surprisingly bullish Grain Stocks data, WPI has updated our quarterly corn market outlook to reflect the supply and demand trends reflected in the USDA’s most recent data. Since the September edition of our quarterly outlook, WPI’s forecast has shifted to feature sma...
Market Commentary: Next Week’s Weather Makes or Breaks
It was another day lower for the grain and oilseeds sectors, and another day of weak volume for corn and the soy sector. The causes have not changed: A strengthening dollar Very good harvest weather in the U.S. Potentially better weather in South America late next week If good rains materiali...
U.S. Soybean Crush Margin Outlook
The recent strength in U.S. soyoil and soymeal prices has helped push “board” crush margin (i.e., the margin implied or calculated by CBOT futures contracts) to new highs with the VVX margin hitting $1.62/bushel and the HHH margins topping the $1.45 mark for the first time in over a...
Port Strike Suspended: A Look at Short-Term and Long-Term Issues
East and Gulf Coast port workers are back on the job today after striking on 1 October. Many of the affected ports will add weekend overtime hours to load trucks; several ports will remain closed to trucks today as containers are offloaded to prepared for resumptions of trucking. Importers repo...
WPI Website Restored
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Market Commentary: Multiple Influences from Macros to Weather
The somewhat bullish influence of Monday’s stocks report has now fully faded. The market today pretty much ignored a solid USDA Export Sales report and instead focused on mostly bearish factors: The EU is postponing enactment of its deforestation policy. Macro jitters around the Middle E...
Oilseed Highlights: EUDR Decision and South American Weather Weigh on Complex
The Market It has been a tough week thus far for soybeans and meal. The EU’s decision to delay its European Union Deforestation Regulation (EUDR) means there will be no break for U.S. exporters in competition from South America and Southeast Asia. The two days of decline have November soy...
Livestock Roundup: Broiler Outlook
Hatcheries set 242.69 million eggs in incubators during the week ending 28 September, up 6.1 percent from a year ago. So far this year, egg sets are up 1.9 percent over last year, and to date through the second half of the year are up 3.5 percent. Last year, eggs set started trendng lower in J...
Coffee Rally Stalls as Weather Shifts, Bear Move Ahead?
Coffee futures have been on a massive rally in 2024 with the ICE “C” contract rising above $2.60/lb last week, breaching that point for just the fifth time since 1970. The catalyst for the rally has been well reported this year, with declining stocks and weather issues in major prod...
Market Commentary: Wheat Jumps Higher on Massive Egypt Imports; Soymeal Falls on EUDR News
Wheat remains the darling of the CBOT with more bullish news pouring into the complex. Today’s rally was sparked by reports that Egypt has booked over 3 MMT of wheat from the Black Sea (presumably Russia) to be exported over the next six months. That move comes as Russian wheat stocks are...
Ludditic Longshoremen; Symptom not Disease
Ludditic Longshoremen Labor strikes are always about money, working conditions and job protection but the latter is skyrocketing to the top. The U.S. East and Gulf Coast port workers’ strike is a prime example. Automation is threatening the number of longshoreman positions needed, and the...
Kenya’s Crop Choices
In yesterday’s WPI Middle East, Mediterranean and Africa Regional analysis report, it was noted that Kenyan farmers are switching from growing maize to growing sweet potatoes. The latter being easier to grow than drought sensitive maize and netting three crops per year. But whether maize...
Black Sea Regional Analysis
Russian Grain Markets: 23–27 September 2024 The Russian grain market was bullish in European Russia but bearish in the Asian part and Siberia because Kazakhstan introduced a temporary ban on imports of Russian wheat. Grain storage facilities are being filled up to the brim with new crop c...
Market Commentary: Grain Stocks Fuel 2-Day Corn Rally; Wheat Rises with Russian Prices
CBOT grains and oilseeds seem to be playing “follow the leader” and have recently switched roles. Previously, soybeans were rallying and pulling grain futures grudgingly higher, but that has completely flipped following Monday’s Grain Stocks report. Now, corn and wheat are ris...
Trade Policy Spin; Interstate Trade Barriers
Trade Policy Spin It is an election year, and the Biden Administration is claiming to have opened up $26.7 billion in overseas market access for American farmers. But that carries the same weight with farmers as grocery buyers hearing that food inflation has declined. They are still paying more...
East and Gulf Port Workers on Strike
A port worker strike in the U.S. East Coast and Gulf Ports started today affecting container shipments, while a strike in Vancouver, Canada affecting grain shipments came to an end on Saturday with the final ratification vote to come this Friday, 4 October. As WPI’s Matt Herrington...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Pakistan’s wheat imports in 2024/25 could drop to almost nothing as a result of the very good harvest in 2024 – up by 3.2 MMT. Wheat production was well above the average at a record level of 31,400 MM...
Market Commentary: Grain Stocks Bullish Corn but Neutral Soy, Wheat; Port Strike Looms
Monday’s CBOT trade was essentially dedicated to the Grain Stocks report with pre-report trading seeing muted action and steady volumes while post-report trade saw a meaningful rally in corn and a pullback in soybeans. The report issued a surprisingly small corn stocks figure, which spurr...
Hurricane Helene Impacts in the Southeast
After making landfall along the Gulf Coast of Florida, Hurricane Helene struck northeast Georgia and western North Carolina. All commodities in the region have been affected, including pecan orchards and timber land, but also corn, soybeans, cotton and poultry. Given the location, hog pro...
Green for You, Grey for Me; Slaying National Champions
Green for You, Grey for Me Some say the EU has been vague about whether it will seek a delay in the December 30 implementation deadline for implementing the EU Deforestation Regulation (EUDR). Brussels told WTO members last week that delay would require a legislative change, which is not imposs...
Russia’s Grain Shortfall
Today’s USDA quarterly Grain Stocks report provided the market with a bullish input but there may be another shoe to drop. Russia’s stocks to use ratio for corn and wheat have been dropping for four straight years. Over that timeframe, it is down 64 percent for corn and 48 percent f...
Mercosur Regional Analysis
Argentina’s Weather The weather remains a recurring issue in Argentina. The lack of rainfall across much of the country's agricultural region is starting to impact both the wheat crop, currently in its yield-defining stages, and the sowing of summer crops. Precipitation anomaly maps...
European Market Analysis
Regional News Four regions in Russia’s Siberia have declared states of emergency due to heavy rains and flooding. Milling Wheat Wheat markets were higher last week with U.S. futures rising about $5/MT while the Paris market added €1.25/MT for the week. Markets remain conc...
Grain Stocks Report Charts
The attached PDF offers graphical depiction and analysis of the latest USDA Grain Stocks data for key commodities. The data is, of course, taken from the quarterly Grain Stocks report. WPI recently completed an expansion of the analysis and welcomes any feedback/suggestions. ...
CFTC COT Report Analysis
Funds activity in the ag futures markets was more subtle than expected for the second straight week. Specifically, fund short-covering in the corn and wheat markets lagged expectations by a wide margin. In corn futures, funds bought back 3,700 contracts (2.6 percent) of their prior short, which...
Market Commentary: Pre-Report Plus Brazil Lightens Risk
Volume was light except in soymeal, Feeders and lean hogs. USDA’s final quarterly stocks report for MY 2023/24 arrives Monday and it has surprised to the bullish side for the past four out of five years. So the goal was to get out of short positions. On the week, soymeal exploded on...
Policy Quick Hits
Government Funding President Biden yesterday signed a continuing resolution passed by Congress to fund the government at current levels until 20 December. There were no riders – such as an extension of the farm bill – included. This sets up another deadline before the Christmas holi...
Cow-Calf Margins Down from July but Still Imply Herd Rebuilding
Since WPI’s July update on cow-calf margins, expected 2024 returns for producers have shifted lower but remain well above year-ago values and near record highs. WPI’s models indicate that revenue for the “average” Southern Plains (i.e., Kansas) cow-calf operation will hi...
Nudge versus Cudgel; New Japanese PM; Pesticide Restrictions
Nudge versus Cudgel The Biden Administration has achieved some market openings in various countries, the most recent being obtaining agreement from Chile to accept American cheese products marked with European origin names like gouda, cheddar, and provolone. Chief Agricultural Negotiator Doug M...
Market Commentary: Crude Oil Selloff Sinks Soyoil, Soybeans; Corn, Wheat Lower Ahead of Stocks Report
A surprise selloff in crude oil put heavy selling pressure on the CBOT soy complex on Thursday, with soyoil and soybeans scoring bearish reversals for the day. The weakness in the soy complex sent corn and wheat into the red as well, with traders unwilling to take more long risks heading into t...
Oilseed Highlights: Weakness Today But Still Plenty of Support
The Market The soy complex has had a bullish week thus far, moving higher on a weather premium added for Brazil, and news that China, the largest importer of soybeans, will significantly boost economic stimulus. Short-covering had been rampant until today’s selloff. News that Saudi Arabia...
Livestock Roundup: Hogs and Pigs Report Mostly Neutral
Today, USDA released its quarterly Hogs and Pigs report for the June through August quarter. The total inventory of hogs and pigs on 1 Spetmeber was 76.48 milllion head, which was up from 76.133 million head in 2023. Typically, inventories grow from 1 June and peak for the ye...
Market Commentary: Soyoil and Beans Lead Sector Higher
The CBOT was higher once again with soybeans and the oilseed complex leading the way. Drought in Brazil and the surging soyoil prices have supported the complex and driven a widespread wave of short-covering by funds. Corn and wheat futures followed the oilseed markets higher at midweek but fai...
Industry Consolidation
U.S. antitrust law is complicated, but current efforts to block a merger between grocery retailers Albertsons and Kroger may not fit the bill. Current triggers under the law include: Market share of 70 percent or more, or less than 50 percent if barriers limit competition. Barriers to entry pr...
Black Sea Regional Analysis
Russian Grain Markets: 16–20 September 2024 Russian grain markets remained stagnant as export demand is weak and domestic demand is even weaker. Moreover, appreciation of grains earlier in the month reached its peak at this stage of the game and buyers are very careful right now. Sellers...
Market Commentary: Soybeans, Soyoil Extend Rallies; Wheat, Corn Fall as Short-Covering Fades
The CBOT saw diverging trading patterns on Tuesday with soybeans and soyoil continuing their rallies and extending gains to new highs. China is rumored to be purchasing up to 1.2 MMT (44 Mbu or 20 cargoes) of U.S. soybeans for October-November delivery, which put a bid under the market. Too, th...
Hogs and Pigs Report Preview
On Thursday, USDA will release its quarterly Hogs and Pigs report for the June through August quarter showing the inventory as of 1 September. Pre-report expectations peg the total inventory at 100.5 percent of last year. That would imply 75.7 million head, the largest inventory for the quarter...
Tariff Spiral and WTO Failure; Nuclear Power and GMO’s
Tariff Spiral and WTO Failure Republican presidential nominee Donald Trump now says he will impose 200 percent tariffs on farm machinery from John Deere should the company move its manufacturing to Mexico. He said he would also provide incentives for foreign companies to move their operations t...
Energy and Agriculture
Global agriculture produces energy, with 23 percent of ethanol produced from sugarcane, and another 7 percent produced from the molasses byproduct of processing sugarcane or sugarbeets. Increased production of ethanol has caused global sugar carryover to decline. Agriculture is also a major con...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Bangladesh reports that it will be importing 400,000 MT of wheat immediately with the normal buying approval being shortened from 42 days to 15 days. The change is being made in order to maintain food security. Th...
Market Commentary: CBOT Rallies on Weather, Short Covering; Monetary Policy Turns Bullish Commodities
The CBOT jumped sharply higher to start the new week with wheat leading the move with overnight strength. Fund short covering drove much of the day’s gains, but dryness in Brazil and the Black Sea, along with some rain-induced U.S. harvest delays, offered some fundamental motivation...
Hypocritical on Process Standards; Buy America Bust; Politics of the Port Strike
Hypocritical on Process Standards EU Commission President Ursula von der Leyen will make a decision this week on implementation of the EU Deforestation Regulation. It is set to take effect at the start of 2025 but both internal and external forces want the measure delayed and modified. That inc...
Pending Port Strikes: U.S. East and Gulf Coasts and Vancouver Canada
With a pending 1 October strike deadline on the U.S. East and Gulf Coasts by the International Longshoreman’s Association (ILA), the U.S. Department of Labor has reached out to the U.S. Maritime Alliance (USMX), a group that represents employers of the East and Gulf Coasts longshore indus...
Running Out of Protein
Europe ran out of energy when the Russian attack on Ukraine forced it to reduce imports from Russia. Europe lacks the ability to defend itself despite Russia’s threat on its eastern border. Now Europe is reducing its consumption of meat but failing to invest in meat alternatives that coul...
European Market Analysis
Regional News WPI sources in Brussels say it’s increasingly likely that the EU Deforestation Regulations will be delayed until the region can develop better implementing systems. Recall that EUDR – which would force massive reporting and traceability requirements on seven comm...
Mercosur Regional Analysis
Argentina Economic/Policy Update Argentine President Javier Milei, in a public speech this week, presented the 2025 budget that will be sent to Congress for approval. Farmers had high expectations for potential announcements that might improve their business or provide visibility concerni...
CFTC COT Report Analysis
Funds activity in the ag futures markets was more subdued last week than expected. Funds were slight net buyers in soybeans, soymeal, corn, and across the wheat complex, but the percentage shifts in their positions and overall buying volumes underperformed expectations. In the soy complex...
Market Commentary: Wheat Retraces; Soyoil Surges
Wheat was the big gainer last week but this week it gave up most of those gains. And soyoil was last week’s biggest loser but it rose to the top this week. Lean hogs also staged a major reversal after losing 1.32 percent last week and then rising 4.1 percent this week. Where there...
Too Bad for Ag, Tariff Impacts; Climate and Agriculture
Too Bad for Ag In a surprise from the Biden Administration, Deputy National Security Advisor Daleep Singh said that the U.S. should negotiate more sectoral specific trade agreements and outlined new incentives under the Indo-Pacific Economic Framework to entice more buy-in from other countries...
Neutral Cattle on Feed Report
USDA released the monthly Cattle on Feed report today. All categories came in near expectations, making the report neutral. August placements at 1.98 million head were above the average for the month during this cattle cycle of 1.93 million head, but still below last year. As WPI noted yesterd...
Weaker Consumer Finances Darken Economic Outlook, Despite Interest Rate Cuts
The past two weeks have seen the typical influx of macroeconomic data releases, most of which helped prompt the Federal Reserve to issue its 50-bps interest rate cut on Wednesday. While the interest rate cut was initially viewed as a positive signal (lower interest rates generally increase econ...
Market Commentary: Wheat Falls Amid Weak Russian Prices; Soyoil Rises on Exports; Macro Markets Boost Cattle
Markets and traders were broadly enthusiastic following the U.S. Federal Reserve’s 50-bps cut to its target interest rate on Wednesday, but you wouldn’t know that from looking at the grain or oilseed markets. Wheat futures were sharply lower on Thursday amid pressure from French whe...
Oilseed Highlights: Bouncing Off Seasonal Lows
The Market U.S. soybeans have a nearly $1/bushel advantage as Brazilian basis moves higher. The result is that last week’s export sales were substantial. Rumors are rampant of more Chinese purchasing of U.S. soybeans. Argentina reportedly bought U.S. soybeans but those may washout on fina...
How Not to Resuscitate; Micromanagement
How Not to Resuscitate The European Parliament rejected the Commission’s proposal to allow tolerance levels for pesticide residues on some imported foods. Allowing a rat pack of politicians to directly decide scientific issues only contributes to domestic decline. Pesticides can be produc...
Livestock Roundup: Cattle on Feed Preview
USDA will release its Cattle on Feed report tomorrow; the pre-report consensus analysts’ estimate is for the inventory of cattle on feed as of 1 September to be 101 percent of last year. August placements and marketing are expected to be 98.5 and 96.5 percent respectively of last year&rsq...
Market Commentary: Soy Complex Rises on China Rumors, Brazil Drought; Hogs Extend Rally
Soybeans saw the liveliest action of the major grain/oilseed contracts on Wednesday with a strong, 18-cent overnight rally developing on rumors of Chinese export business. That rally fizzled, however, after the USDA did not report any daily “flash” export sales at 9 AM ET and the ma...
High Cost of Food; Sick Man in Europe
High Cost of Food Gallop’s annual Work and Education survey found that Americans have soured on the restaurant and grocery business. They still love farmers but have followed Democratic Presidential nominee Kamala Harris in faulting the food industry for inflation. Over the past year, fav...
More Food, and Fewer Children
Few philanthropists are as focused on hunger in Sub-Saharan Africa than Bill Gates. The Bill and Melinda Gates Foundation has spent billions of dollars on the problem. Activists do not like his promotion of GMO’s as a solution, but they are not as focused as he is on human suffering...
Black Sea Regional Analysis
Russian Grain Markets: 9–13 September 2024 Russian grain markets remained stable with only corn slightly bullish, possibly showing the first real signs of a lower crop this season. Farmers are playing a waiting game switching to sunflower seed trade which is showing bullish sentiments and...
Market Commentary: Grains Drift Sideways as Harvest Looms; Livestock Rally on Strong Cash Trade
The CBOT was mostly sideways on Tuesday with funds still paring back a few shorts in the corn and soy complex while resuming some light selling in wheat futures. There was little fresh news for the day, which contributed significantly to the lack of price action. Russian FOB offers continue to...
Three Wheat Peculiarity
The December SRW and HRW contracts closed lower today, while December HRS added value. These three wheat contracts often move in unison, but not always. And they have many other differences that define them. HRS is typically priced higher due to its greater protein content and thus demand, espe...
New EU Commission; America First Channels Sovereignty
New EU Commission European Commission President Ursula von der Leyen made known her nominees to run the government in Brussels and the trade and agriculture portfolios have interesting selections. As was speculated previously, Christophe Hansen from Luxembourg has been picked for the agricultur...
Ad Hoc Farm Bill in the Works?
The current underlying farm bill (extended for a year last year) expires in 13 days. Another extension is likely, but there is also some movement on Capitol Hill to provide some ad hoc assistance with a potential extension. The 2024 federal fiscal year expires in 13 days. Without funding,...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Egypt’s GASC is reported to have arranged a private purchase of 430,000 MT of Russian wheat at a price of $231 CIF. GASC has not confirmed this purchase. Egypt’s wheat imports, on a dollar basis,...
Market Commentary: Bears Win as CBOT Emerges from Post-WASDE Weekend
The CBOT emerged from the post-WASDE weekend with bears gaining the upper hand in a relatively light news day. Wheat was the big loser for the day as profit taking developed when futures neared the $6.00 mark that kicked values sharply lower. Corn and soybeans were in the red for the day as wel...
Future of EU Agriculture; Future of U.S. Agriculture
Future of EU Agriculture Mercosur: Newly appointed French Prime Minister Michel Barnier reiterated French opposition to a trade agreement with Mercosur at the upcoming G20 summit in Brazil, saying he is seeking coalition partners for a blocking minority. Meanwhile, Mercosur leaders receive...
SUSTAINS Act Under the Radar
Today is the final day to submit comments to the Natural Resources Conservation Service (NRCS) under a request for information (RFI) on the Sponsoring USDA Sustainability Targets in Agriculture to Incentivize Natural Solutions (SUSTAINS) Act. That legislation was passed as a rider on the 2023 a...
Mercosur Regional Analysis
Wheat The Rosario Grain Exchange reports that wheat fields in the central, northern, and western parts of the planted area are suffering from a lack of water, raising doubts about its current production estimate of 20.5 MMT- a figure considered high by many in the market. In September, th...
European Market Analysis
Regional News Last Thursday, a Ukrainian merchant vessel carrying grain and bound for Egypt was struck by a Russian missile in the Black Sea waters near Romania. The event is escalating the geopolitical tensions between the two countries and threatens Ukraine’s ability to protect ci...
CFTC COT Report Analysis
Funds continued covering shorts across the grain and oilseed complex through last Tuesday as futures trended firmer heading into the September WASDE. The most notable short covering was in wheat where funds bought back 30 percent of the CBOT position and 33 percent of their HRW short. The buyin...
Market Commentary: It Was Wheat’s Week
Russia’s Vladimir Putin warned that Ukraine using Western long-range missiles to attack inside his country would bring NATO into the war. That and his threats to use nuclear weapons and the attack this week on a grain carrying ship in the Black Sea pressured the gold market and likely whe...
Hurricane Francine Energy Production Disruptions
The WTI Crude oil futures saw its third consecutive day of gains from the impacts of Hurricane Francine in the Gulf of Mexico and the contract remains up on the week. Francine made landfall on Wednesday on the Louisiana coast and has now been downgraded to a tropical storm. It is tr...
WPI’s Post-WASDE Quarterly Corn, Soy Outlook
Now that the WASDE has come and gone, it’s time for the commodity market analyst community to argue about why USDA’s projections are wrong and what the world will actually look like over the next marketing year. WPI is loath to miss this monthly festival of forecasting, so we offer...
WASDE Wheat
WPI offers the following PDF of key supply and demand tables and charts relating to the USDA’s latest WASDE report. This is not an all-inclusive compilation of relevant market factors, only those which we feel are of top priority. WPI will seek to expand the offerings in this report and w...
WASDE Soybeans
WPI offers the following PDF of key supply and demand tables and charts relating to the USDA’s latest WASDE report. This is not an all-inclusive compilation of relevant market factors, only those which we feel are of top priority. WPI will seek to expand the offerings in this report and w...
WASDE Corn
WPI offers the following PDF of key supply and demand tables and charts relating to the USDA’s latest WASDE report. This is not an all-inclusive compilation of relevant market factors, only those which we feel are of top priority. WPI will seek to expand the offerings in this report and w...
Market Commentary: USDA Confirms Record Corn, Soy Yields but Ending Stocks Fall
For a WASDE report that confirmed record-large corn and soybean yields, futures’ reaction to the data was relatively muted. Those hoping for a festival of bearish numbers were disappointing as USDA moderated the impacts of larger yields with reductions in 2023/24 carryout and modest &ndas...
Farm Bill Force; Black Sea Risks; Food Price Competition
Farm Bill Force A coalition of 300 agricultural groups sent a letter to Congressional leaders urging passage of a new farm bill. Some on Capitol Hill see it as unachievable and sought to add a one-year extension of current law onto a continuing resolution. Instead, there will be one more push d...
Livestock Roundup: WASDE Trims Cattle Price Outlook
The big news on the livestock side of today’s WASDE was USDA’s reduction in the fed cattle price forecast. Prices for 2024 were trimmed by $3/cwt and USDA dropped its forecast for 2025 annual average prices by $5/cwt from $191/cwt last month to $186 this month. The supply and deman...
Oilseed Highlights: WASDE Affirms a Sideways Market
The Market Today’s USDA WASDE report should drive discussion, but it was mostly neutral. The 20-day moving average has begun to rise and November soybeans hit 1031 less than a week ago, lending hope for bulls that it can break 1050/bushel resistance. But the stocks-to-use ratio remains at...
Market Commentary: Calm Before the WASDE Storm; Drought Concerns Support Wheat, Soybeans
The CBOT was mostly higher on Wednesday as traders continued adjusting positions and preparing for the upcoming September WASDE report. Wheat was the upside leader – though trading volume was suspiciously low – as concerns intensify about drought in the U.S. Plains, the Black Sea, a...
Agricultural Trade with Africa
Africa’s population is on a trajectory that could double its size by 2050 to 2.5 billion, or a quarter of the global populace. The West (U.S., EU, Japan) are in a competition with the Axis (China, Russia) for influence over Africa. One way to influence is to actively trade, including in a...
Tariffs are Popular
Tariffs were a hot topic in last night’s debate between the two U.S. presidential candidates. Trump first imposed tariffs, which Harris calls a sales tax, but her Administration keep most of them and she has not ruled out using them again. Trump added to his pro-tariff position by saying...
Black Sea Regional Analysis
Russian Grain Markets: 2–6 September 2024 The Russian grain market is finally showing bullish sentiments. Adverse weather in Russia this season concerns many analysts, and they are one after another decreasing their forecasts for overall grain production. Exact numbers are hard to figure...
Remembering 9-11
Twenty-three years ago, on September 11, 2001, the U.S. experienced one of the most tragic and influential days in the nation’s history. The events of that day would spark great unity, and later division, as our nation grappled with terrorism’s fallout. The days and weeks immediatel...
Market Commentary: Wheat Rises on Plains Dryness; Corn, Soybeans Sink in Pre-WASDE Trade
Trading at the CBOT was mixed on Tuesday with expectations for the WASDE differing significantly. For corn and soybeans, traders and analysts are all in on the bearish side of things while there is some growing positivity for the wheat markets. That was reflected in Tuesday’s trade with s...
Farm Bill and Prop 12
Yesterday, WPI reported that several commodity organizations were in Washington to lobby on the farm bill. One of those groups was the National Pork Producers Council (NPPC). One of the solutions they’re seeking is preemption of California’s Proposition 12 and Massachusetts’ Q...
DEI and Trade; Barriers Against Real Emitters
DEI and Trade Today was Day 1 of the annual WTO Public Forum. The sessions were started many years ago as the institution's response to critics. Each year nongovernmental organizations with a dislike of international trade show up in Geneva to share their angst and demands for change. The agend...
Meat Trade Holds Up
Hitting the downside of the cattle cycle and having a higher value product based on a strong U.S. dollar has certainly reduced, but the trade has held up relatively well over the past year. U.S. beef imports have trended higher, with an especially large boost from Brazil back in January. But No...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Egypt’s trade deficit in June dropped by 5.1 percent to $2.87 billion – in dollar terms wheat imports were down by 21.5 percent while corn imports saw a reduction of 28.6 percent. Total for all imports...
Market Commentary: CBOT Prepares for September WASDE
The CBOT started the week with a mood that was decidedly oriented towards preparing for the September WASDE report. Volume and price action were relatively limited for the day and cattle futures were the surprise bullish leaders. In the grains, corn and soybeans pushed higher with the latter ma...
Draghi versus Strategic Dialogue; Cooking the CVD Books
Draghi versus Strategic Dialogue Mario Draghi issued his long-awaited report on European competitiveness that had been requested by the European Commission. Its content stands in both contrast and conflict with U.S. goals and the Strategic Dialogue just completed on future support for European...
Producer Groups Getting Restless on Farm Bill
The current farm bill – the extended Agriculture Improvement Act of 2018 – expires in 10 days. With no practical window to pass a bill in 2024, it will need to be extended again. From a practical perspective, that needs to be done before 2025 when dairy programs enter a new marketin...
Mercosur Regional Analysis
Weather Recent rains have benefited parts of Argentina, but not all areas received significant precipitation. The highest accumulations occurred in the central-east and southern regions of Buenos Aires Province, with 30–50 mm recorded. However, the provinces of Córdoba, Santa...
European Market Analysis
Regional News The EU is set to receive beneficial rains across its central region this week with some of that precipitation extending out into parts of western and eastern Europe. That will offer some relief from the drought for central Europe, but the north-central and eastern regions wi...
CFTC COT Report Analysis
Friday’s CFTC report featured the expected trends in managed money funds’ activity, but the volume of trade and the degree of change in their position was below expectations. Funds covered about 21,000 contracts of their soybean futures short last week (12.5 percent of the prior wee...
Market Commentary: Mixed Signals
There were lots of mixed pressures on the market today, and this week overall. Outside markets were key among them. Trading volume was modest today, except for meal, oil, and livestock. On the week, livestock and soyoil took losses, while fund long positions held up for soymeal. While so...
Jobs Report and How the Fed Will See It
Today’s jobs report was highly anticipated as a key benchmark before the Federal Open Market Committee (FOMC) meeting later this month and expected to be a factor in the Fed’s decision of whether to cut the federal funds rate by 25 basis points or 50 basis points. As it happens, tod...
India’s Ethanol Conundrum and Impact on Global Markets
India is attempting to pursue its climate goals through the expansion of biofuel blending into transportation fuels, but the dynamics of the country’s agricultural systems and protectionist trade policies may stymie these efforts. The USDA recently issued an outlook that calls for India t...
Market Commentary: CBOT Dips as Short Covering Subsides; Livestock Fall on Macro Worries
The CBOT was mostly lower on Thursday as traders took a day to pause and reassess positions and the grain market outlook with just one day of trade left before the weekend. Too, the September WASDE is looming next week and traders are positioning and adjusting expectations in advance of that re...
Livestock Roundup: Cattle and Beef Imports
High cattle and beef prices are supporting imports. First, cattle imports through July are up 22.6 percent compared to last year. Imports from Canada are up 18.1 percent and imports from Mexico have increased 25.2 percent over the same period. This trend of increased imports certai...
Oilseed Highlights: The Rally Has Capped Out
The Market In this holiday shortened trading week, November soybeans are up 23.5 cents (2.35 percent). The rally in prices has caused deliveries to increase against December futures. Futures have been rising but basis levels are weak, raising doubts about real demand. December soymeal is...
Competitor Opportunities (Future of EU Agriculture Part II)
Yesterday, we took an initial and cursory look at the outcome of the EU’s Strategic Dialogue on farm support. Basically, it says move away from area payments and focus resources on small farmers not large operations. Today, we look at it in more detail, the current spin on its outcome ver...
Market Commentary: CBOT Extends Broad-based September Rally
The CBOT was higher once again with wheat, corn, soybeans, and soymeal all scoring new rally highs and bullish technical victories. In wheat in particular, fund managers are working hard to cover shorts as the technical outlook rapidly shifts bullish, which has driven much of this week’s...
Competitiveness versus Social Goals; Food to Energy
Competitiveness versus Social Goals The EU completed a strategic dialogue on the future of the Continent’s agriculture and despite the June elections whittling down the power of the Greens, they have won the debate on farm subsidies. The farmers protesting ahead of this year’s elect...
Pulses Not Pulsing
The International Grains Council (IGC), Rabobank, and others have followed countries and companies moving into the pulses space. It is logical that plant-based proteins like pulses should be an attractive market. However, the compound average growth rate (CAGR) for the larger category is only 2...
Black Sea Regional Analysis
Russian Grain Markets: 26–30 August 2024 Russian grain markets remained relatively stable; however, they are under pressure of a large crop and growing stocks. Even though the 2024 grain crop may be slightly lower than earlier estimates, Russia will have a solid export surplus. Dome...
Market Commentary: CBOT Rallies Sharply on Bullish Technicals; China-Canada Trade War Looms
The CBOT was nearly uniformly higher following the U.S. Labor Day holiday with wheat, corn, and soybeans all scoring strong gains and meaningful bullish technical developments. There wasn’t a major fundamental catalyst for any of the markets, rather the day’s trade seemed to build u...
New Guidelines for Substantiating Meat and Poultry Label Claims
Last week, USDA released an updated guideline for label claims on meat products as they pertain to how livestock is raised. Specifics included are claims related to animal welfare, breed, diet (e.g., grass fed), living conditions or raising practices, negative antibiotic use claims, negative ho...
Business Economics on Ballot; Tariff Doublespeak
Business Economics on Ballot The American economy largely relies on large corporations for generating growth and wealth. That engine is under attack on numerous counts by politicians looking to stoke voter support by creating a scapegoat. Democrats have pledged to raise the corporate tax rate f...
Sugar Price Response
The March 2025 No. 11 sugar contract rebounded last week but it is still down over 20 percent from its high. Analysts started the year expecting sugar prices to rise this year on short supplies. The International Sugar Organization is still warning of a net deficit once global consumption is su...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Saudi Arabia’s Arabian Mills has set the share issue price range under their upcoming IPO. The IPO is expected to raise about $271 million. The total offering will be for 15.4 million shares, which represent...
CFTC COT Report Analysis
Friday’s CFTC report was largely in-line with expectations as it showed mild short covering by managed money traders across the soy complex and corn futures. Funds fought back about 3 percent of their corn short, which continues to hover near this year’s record low values. Funds wer...
Market Commentary: Pre-Holiday Run-up Continued
This trading week marked a series of reversals, and the latest trend continued for the most part today. It was generally pre-holiday lower volume for corn, wheat, and lean hogs but there was outsized volume trading in soybeans. Some notable stats from today and the trading week include:...
U.S. Labor Day Holiday
The U.S. will celebrate Labor Day on Monday, 2 September, and the U.S. markets as well as our office will be closed that day. The next Ag Perspectives will be published Tuesday, 3 September...
Thinking About 2025 Post Election Economy
There has been a spate of favorable economic news. Orders for durable goods were up 9.9 percent in July, mostly on orders for new aircraft. This was the biggest increase since July 2020. Corporate profits rose 1.7 percent in the Q2 over Q1 and are up 8.0 percent from a year ago. GDP in Q2 was r...
No Right to Complain; Runaway Subsidies; Plastics and Cows
No Right to Complain Farmers in Nebraska, Iowa, Florida, and Alabama have no right to complain about Mexico’s attempt to ban GMO corn imports, nor GMO restrictions elsewhere in the world. These four states have all enacted various restrictions on lab-grown meat. Florida and Alabama have o...
U.S. Soybean Oil Outlook
Soyoil futures have seen a dramatic few years with a huge rally in 2020 sending the market to new record highs by 2022 amid the expectations for higher demand from biofuel mandates. However, since reaching mid-2022 highs soyoil has been on a long and volatile decline as global soybean and soyoi...
Market Commentary: CBOT Rallies on Export Sales, Weather; Wheat Follows Through on Reversal
Thursday and Friday are the last two days of the month with a three-day weekend present to kick off September, which helped create a “risk off” short covering tone in the markets. Consequently, the major CBOT ag markets were all higher for the day with additional fundamental develop...
Oilseed Highlights: Low Prices Yield Big Sales
The Market The soy complex followed last week’s modest gains with a larger move upward thus far this week. The funds are still near a record short but with the RSI now over 40, they are no doubt covering some of their short positions. The competitive pricing and today’s Export Sales...
No BS Labeling; Price Controls
No BS Labeling USDA issued notice yesterday that companies making environment and animal welfare claims on meat product packaging show more evidence of their practices. For example, using third party verifiers. They should also provide sampling and testing for things like antibiotics. Notably,...
U.S. and Canada Hogs and Pigs Inventory
USDA released the U.S. Canada Hog Inventory Report yesterday. The U.S. data is based on the quarterly Hogs and Pigs Report which is as of the second quarter ending on 1 June and the data for Canada is a semi-annual report as of 1 July. This is always an insightful benchmark because of the...
Market Commentary: Wheat Continues Reversal; Corn Soy Fall on U.S. Weather
The CBOT was mixed on Wednesday with wheat futures following through on Tuesday’s bullish technical reversal after Stats Canada forecast a 34-MMT all-wheat wheat crop, which was below traders’ expectations. That, combined with weather issues for some major wheat growing/exporting co...
Policy Adaptation; Policy Rejection
Policy Adaptation Europeans reacted to the regulatory over-prescriptiveness emanating out of Brussels by voting early this summer to reduce the number of Greens in the European Parliament. Conservatives won in the Netherlands, are about to take over in Austria and the central German state of Th...
U.S. Agriculture Recession
What do Germany and U.S. agriculture have in common? They may both be in recession. U.S. net cash farm income is in record decline, having fallen nearly 37 percent in two years. The Ag Economists’ Monthly Monitor survey of 70 economists shows just over half think the sector is in recessio...
Black Sea Regional Analysis
Russian Grain Markets: 19–23 August 2024 Kazakhstan announced they will close the borders with Russia for wheat from now until 31 December. This will put even more pressure on the Russian wheat market and may push them to offer softer offers for GASC tenders where they are the key players...
Market Commentary: Technical Trade Suggests CBOT Has Made its Near-Term Lows
The CBOT saw technical trade emerge and dominate the day, which sent corn, wheat, and soybeans higher after a weak overnight start. The day’s strength was sufficient to score bullish reversals on the corn and wheat charts, which indicates near-term lows are likely for these commodities. T...
Wheat 180; Thinking Small
Wheat 180 Concerned that wheat modified using biotech would cause the collapse of U.S. wheat’s overseas markets, growers wrote a policy in 2008 (later amended) that required approval of the trait in major wheat markets before domestic production could occur. It contained other burdensome...
Fiscal Policy Post Election
Regardless of the outcome of the U.S. election, policymaking in 2025 and beyond will play out in an environment shaped by the federal budget deficit and national debt. The current state of fiscal policy has been exacerbated by federal spending related to the COVID recovery response. ...
Cold Storage Anomalies
USDA’s Cold Storage report for July showed the volume of beef and pork continuing to decline. There is a natural seasonal decline as the summer barbeque season spikes demand, but there is also a decline year-over-year. Pork and beef production are rebounding and could restock freezers, bu...
Middle East, Mediterranean and Africa Regional Analysis
MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Regional Updates Iranian wheat farmers are complaining that the government has not yet paid them for wheat delivered earlier in 2024 and that this is impacting planting for the next wheat crop. Iran’s government bought 11.6...
Market Commentary: Corn, Wheat Find New Lows; Soy Complex Rallies with Soyoil in the Lead
The CBOT was mixed on Monday with corn scoring new contract lows after Friday’s crop tour’s record-breaking yield forecast while wheat was on the defensive amid the ongoing pricing malaise affecting nearly every major exporter. The Paris wheat market is particularly beleaguered righ...
Mercosur Regional Analysis
Wheat On 20 August, rainfall ranged from 2-10 millimeters across almost the entire province of Buenos Aires, the agricultural region of La Pampa, and Entre Ríos. The central and southeastern parts of Buenos Aires received similar amounts on 21 August. However, most of the core agri...
California LCFS Proposes Caps on Soybean and Canola Oil
This month the California Air Resources Board (CARB) issued a proposal to modify the Low Carbon Fuel Standards (LCFS), including a cap on the use of soyoil and canola oil as feedstocks in relation to earning credits under the program. CARB will be holding a hearing on these proposed changes on...
European Market Analysis
Regional News Drought in Romania has affected over 2 Mha of wheat, corn, rapeseed, and sunflower seed with about 40 percent of the crops having been destroyed. This is the fourth year of the past five in which drought has caused significant damage to Romania’s crops. Tunisia p...
Spring Wheat Quality
Some are raising concerns that cooler temperatures and excess late season rain have caused quality problems for the typically high protein/strong gluten spring wheat crop. There is the threat that the lower quality wheat will end up being delivered against futures contracts and is causing falli...
Political Fallacies
He who smelt it, dealt it. This vulgar framing nonetheless holds an underlying truth. Politicians are concurrently demagoguing about high food prices and warning against the fake news espoused by others. It is altogether an odorous room. Politicians in Europe have no evidence that industr...
CFTC COT Report Analysis
Friday’s CFTC report showed funds continuing to expand their short position in soybeans and added about 8.5 percent to their net position last week. That will come as no surprise to anyone watching the markets with soybeans having reached new contract low amid a dearth of fundamental or t...
Market Commentary: Little to Move the Market But it Moved Anyways
The only real market mover on this last trading day of the week was the Fed’s nod to rate cuts. It is still bearish in grains, and the soy complex continued its small rebound despite the prospect of record production. No doubt because of continued strong demand. It was the second da...
Cattle on Feed Report: Placements, Marketings Up Compared to Low July 2023
USDA released the monthly Cattle on Feed report today. Total inventory and marketings were as expected, but placements were up above the pre-report consensus. For context, all the projected ranges of estimates for today’s report were relatively tight – the consensus to...
Cotton Market Basics and 2024/25 Outlook
Following recent client requests, WPI provides the following overview of the cotton market, its basic structure and recent trends, and a short outlook for MY 2024/25. Cotton Production World cotton production is highly concentrated with four countries (China, India, Brazil, and the...
Market Commentary: Wheat Hits New Contract Lows; Corn, Soybeans Fall on Record Yields
The CBOT was sharply lower on Thursday with the Canadian rail workers strike and forecasts of record-breaking yields emboldening bears. Wheat futures scored new contract lows amid signs of weaker demand while corn and soybeans saw threats primarily from the ever-expanding production outlook for...
Livestock Roundup: Cattle on Feed Preview
USDA will release its Cattle on Feed report tomorrow; the consensus pre-report analysts’ estimate is for the inventory of cattle on feed as of 1 August to be 100 percent of last year. July placements and marketing are expected to be 104 and 108 percent respectively of last year’s to...
Oilseed Highlights: Big Crop Gets Bigger
The Market Soybeans had been rebounding from last Friday’s new contract low but news from the Pro Farmer crop tour of seeing record high pod counts caused a 20-cent plunge today in the November contract. Not only has the weather been sublime but pressure from pests and weeds are reportedl...
Market Commentary: EU and U.S. Wheat Futures Decline Sharply; Soy Climbs on Sales to China
The CBOT saw mixed trade on Wednesday with wheat futures seeing the most interesting trade as they posted double-digit losses amid weak European markets and the threats posed by the Canadian railway strike. In contrast, soybeans scored another higher close with support coming from soyoil’...
U.S. Agriculture’s Downfall; Mexican Threats
U.S. Agriculture’s Downfall Technically, Democratic presidential nominee Kamala Harris has no fingerprints on her Party’s Convention policy platform. It was produced before President Biden handed her the baton. But insiders say she is likely to continue the trade policy agenda set b...
Wheat Supplier Trends and Volatility
Global wheat ending stocks have been on a steady decline since 2017/18. Global corn ending stocks have also declined and nothing compares to the relatively small carryover for soybeans. Wheat carryover is skewed by the fact it is a food grain, and governments like China have stockpiled the grai...
European Market Analysis
Regional News Romania’s government announced a drought compensation program for farmers that will range from €200-250/ha with the total aid expense projected to reach €600 million. Algeria purchased durum wheat at prices of $328-332/MT FOB with the grain likely sourc...
Black Sea Regional Analysis
Russian Grain Markets: 12–16 August 2024 Crop Outlook As of 13 August, Russian farmers produced 69 MMT of grains from 20.6 Mha versus 73.5 MMT from 19.5 Mha last year. The average yield showed 3.36 MT/ha versus 3.76 a year ago. Wheat production reached 56.3 MMT from 15.8 Mha versus 57.4 M...
Market Commentary: Corn Dips on Crop Conditions; Cattle Plunge on Lower Beef Values
The big themes from Tuesday’s CBOT trade were that wheat continues to find slow, cautious support amid a weaker U.S. dollar and troubles in Argentina while steady corn and soybean ratings resulted in muted trade for the latter two commodities. Corn futures drifted lower as specs are neith...
CBO Farm Bill Score
The Congressional Budget Office (CBO) has scored the House Agriculture Committee’s farm bill at $322.973 billion over budget over 10 years, and $15.384 over five years. CBO’s scoring is coming under criticism from Committee Chairman Representative Glenn Thompson (R-Pennsylvania) ove...
China Developments; Canned or Uncanned
China Developments For a second day in a row, China bought U.S. soybeans now totaling nearly a half million tons early this week, not counting sales to unknown destinations. These sales come despite a U.S. industry concern that Beijing would ignore the economics favoring U.S. soybeans and purch...
Dairy Trade Expands Despite Hurdles
Concerns about faltering U.S. dairy exports last year have now subsided as growth has returned to the sector. This despite: production growth leveling off as increases in milk per cow do not offset the fall in the number of dairy farms; an 18 percent rise in dairy futures over the past year...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Egypt’s recent massive wheat tender did not generate the 3.8 MMT of buying that GASC had planned. Reports say that the long delivery period – to April 2025 – coupled with the requirement for 270...
Market Commentary: Bouncing Off the Lows Again
In 2000, the American punk rock band Sugarcult released a song called “Bouncing Off The Walls” that featured the chorus line “I’m bouncing off the walls again (whoa)”, which is a pretty good description of Monday’s CBOT trade. Except, instead of walls, the ma...
Jackson Hole Fed Conference Setting Outlook for Monetary Policy
As WPI reported last week, inflation – particularly food inflation – has been ensconced in the 2024 election campaign. The USDA released its food inflation series today, showing a trend through the end of last year that mirrors what BLS data on the CPI showed for July. Retail food i...
Interconnected Biodiesel Mess; Food Fight over Inflation
Interconnected Biodiesel Mess Markets are globalized and so when the U.S. has border measures against Chinese steel or EVs, more get diverted to the European market. U.S. imports of renewable diesel during the first five months of this year were up 29 percent from a year ago. American producers...
Limits of STU
CME corn and soybean prices rebounded today with the December corn contract price back over $4/bushel but November soybeans still under the $10 threshold at $9.76/bushel. Supplies of Brazilian and Ukrainian corn are currently priced at a premium and moving higher. China is capitalizing on cheap...
Mercosur Regional Analysis
Wheat Currently, 85 percent of Argentina’s wheat crop is in normal to good condition, reflecting a nearly 10 percent decline from the previous week. Recent rains benefited many areas, but a significant portion of the wheat has not received rain for several weeks and is showing signs...
CFTC COT Report Analysis
Friday’s CFTC report was in line with expectations as it showed minimal net fund activity with managed money traders remaining heavily short the major ag commodities. Funds bought back just 1 percent of their short position in soybeans last week while adding an equal share to their soyoil...
Market Commentary: Weather, Specs and Cheap Prices
The weather is bearish, except for spring wheat, and speculators are record short. Even having the cheapest grain in the world cannot spark enough new demand to slow the slide. Finding a bottom requires a supply shock, and the potential 20 MMT loss in Black Sea production due to drought is not...
Strategic Petroleum Reserve: Half Full or Half Empty?
On 29 July, the U.S. Department of Energy (DOE) announced that it has purchased 4.65 million barrels of crude oil to be delivered to the Strategic Petroleum Reserve (SPR) between October and December 2024. With this latest round, DOE has purchased 43.25 million barrels to replenish the SP...
Despite Market Volatility, U.S. Economic Outlook Remains Strong
As WPI readers know, the U.S. stock markets have recently seen heightened volatility due to surprising macroeconomic data and trends, including unemployment and interest rates. The data have been somewhat conflicting, with unemployment rates and inflation gauges offering different outlooks. WPI...
Third Time’s a Charm; California versus Iowa; State Run Economy
Third Time’s a Charm After losing appeals before the Ninth and Eleventh Courts of Appeal, Bayer won a unanimous decision from the Third Circuit Court that the company did not err by not labeling Roundup as a carcinogen. The Court ruled that primacy for labeling pesticides is the Federal I...
Market Commentary: Bearish Pall Over 2024/25 Sends CBOT Lower
Soymeal was the only major CBOT ag market to see significantly higher trade with the rest of the grains and oilseed sector either holding steady or scoring losses on Thursday. Favorable weather conditions in the U.S. Midwest and somewhat disappointing export sales data sent corn lower for the d...
Livestock Roundup: Food Inflation Enters the Presidential Campaign
Food inflation has made its way into the Presidential campaign. In a rally in Michigan yesterday, Republican Vice Presidential candidate Senator J.D. Vance, when asked about food inflation, called to “fire” Secretary of Agriculture Tom Vilsack and to double down on energy production...
Oilseed Highlights: Bigger, Cheaper, Bin Busting
The Market The soy complex continues its trek lower with November soybeans down 34.1 cents (-3.4 percent) thus far this week, December soymeal down $2.70 (.86 percent) but rebounding the last two sessions, and December soyoil losing 2.61 cents (-6.3 percent). Comparing historical carryout and s...
Market Commentary: Soybeans Bounce Higher; Paris Wheat Falls; Livestock Futures Extend Gains
The CBOT and CME markets were mostly higher on Wednesday with soybeans and soymeal seeing a surprise turnaround in the afternoon after scoring new contract lows overnight. There was little fundamental news to drive the reversal in soybeans’ fortunes and WPI attributes most of the day&rsqu...
Vietnam FTA; Debt versus Efficiency; Gallows Humor
Vietnam FTA USDA’s Foreign Agricultural Service notes that the U.S. is the largest trading partner with Vietnam that lacks a free trade agreement. The result is that U.S. farm product exporters continue to lose market share, especially in higher valued goods. At the same time, Vietnam&rsq...
Oats Decline
A relatively minor crop, just a little over 2 MMT of oats are globally traded each year. Still, it is an important niche and yet seemingly in decline. This year’s crop is slightly larger than last year’s, but that isn’t saying much since that one was the smallest in over a dec...
Black Sea Regional Analysis
Russian Grain Markets: 5–9 August 2024 Crop Outlook Russian analysts woke up to the fact that grain production reported from farms is higher than originally predicted. The reaction was quick and most of the main analytical agencies in Russia reforecast their numbers upwards. Particularly,...
Leverage at all Cost; NZ Joins Modern Era
Leverage at all Cost Activists have asked the Biden Administration to end the use of economic sanctions against other countries, saying they amount to a collective punishment of civilians. They acknowledge that it is not going away. In fact, all governments use every tool of leverage they can o...
Market Commentary: Soy Posts New Lows; Corn Eases on Yields, Conditions; Cattle Extend Rally
The aftermath of the August WASDE saw the major ag CBOT contracts push lower, with the greatest weakness concentrated in the soy complex. There was really nothing supportive about the WASDE’s numbers for soybeans on Monday, and Tuesday’s drop to new contract lows in new crop futures...
Citrus Impacts
The global production of oranges is nearly five times greater than the output of lemons and limes. Their distribution is different as well. Over a third of oranges go to processing, versus a quarter of lemons and limes. And less than 10 percent of oranges are moved into the export market, versu...
Tracking Sustainable Aviation Fuel
A bill has been introduced in the House of Representatives that would require the U.S. Energy Information Administration (EIA) to add sustainable aviation fuel (SAF) to the agency’s monthly published data to provide a benchmark on how the fuel is developing. Recall, the Biden Administrati...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Iraq’s wheat production is estimated by the Iraq Wheat Board to be up by 21 percent to 6.3 MMT resulting in the second consecutive year of wheat self-sufficiency for the government. The Board adds that Iraq...
Market Commentary: Corn Scores Bullish Reversal; WASDE Confirms Soy’s Bearish Outlook
The WASDE held more than a few surprises on Monday with USDA offering hope for the beleaguered corn market to the extent that futures posted a bullish key reversal on the chart. If the soybean market was hoping for similar aid, it received none, and the WADSE was deeply bearish with a record-br...
Balancing Offense and Defense; Border Measures; Economic Returns from Sport
Balancing Offense and Defense All growers of all crops are not necessarily competitive even in a large agriculture country. Major U.S. row crop growers have asked USTR to ensure that the Americas Partnership for Economic Prosperity (APEP) provide greater market access for their products. By con...
Spuds Sputter
It is reported that EU potato production has fallen by 37 percent over the past 20 years. This is consistent with U.S. potato production falling by 10.6 percent over the past five years. Some cite the impacts of climate, disease, and changing consumer demand (health) for the declines. Productio...
WASDE Livestock Projections
Today’s WASDE made marginal changes to the projections for red meat and broiler production for the second half of the year. The beef forecast is up from last month on expected slaughter totals, which is offsetting the smaller gap in weights compared to last year. In July, sl...
European Market Analysis
Regional News International demand for wheat has picked up after the recent decline in prices with Egypt and Algeria issuing large tenders last week. Egypt’s GASC set a deadline of 12 August for its large tender for over 3 MMT in several tranches, and early results indicate Ukraine...
Mercosur Regional Analysis
Wheat After several weeks of waiting, rain finally fell over much of Argentina’s wheat-planted area, bringing relief to many producers. However, some regions, including the northern core zone, western Buenos Aires, and the northern agricultural region, received little to no rain. In...
CFTC COT Report Analysis
Friday’s CFTC report showed funds more aggressively covering shorts in the grains and oilseed sector heading into the August WASDE. The most notable buying was in corn, where funds bought back 50,000 contracts or about 17 percent of their previous short position and have now shed over 100...
Market Commentary: Slow, Steady Descent Ahead of WASDE
Midwest commodity futures had a bearish but mild week relative to the volatility on Wall Street. Volume in general trended lower as the week progressed and while soymeal and lean hogs reversed last week’s gains, overall the downward slope has been shallowing out. This is especially true f...
E15 Summertime Waivers and Ethanol Supply and Demand
This week, EPA extended (effective as of today) the summertime waiver for E15 until 29 August. Note the summer driving season – when E15 would otherwise be prohibited – ends on 15 September. The beginning of the summer driving season when retail sale of E15 is prohibited start...
Cocoa Consumption and Demand – How Will EUDR Affect the Industry?
Two weeks ago, WPI published an article looking at the supply-side factors in the cocoa market and what has been driving the massive price rally. With this article, we will look at the consumption and demand-side factors that are likely to influence the market and pricing for LH 2024 and into 2...
Interactive Ocean Freight Rates (Updated 9 August)
*** Developer Note ***This app is deprecated as of 13 August 2024 and will no longer be updated. Ocean Freight Comments - 9 August 2024By Matt HerringtonDry-bulk markets continue to chop sideways with gains one week yielding losses the next before gains emerge again. This past week was one...
Market Commentary: Soybeans Make New Lows; Corn, Wheat Fall on WASDE Supply Expectations
The CBOT was once again mostly red for the day with traders preparing for the August WASDE and generally expecting large crops and ending stocks for the 2024/25 year. The Midwest weather remains nearly ideal for producing big crops, and the only real question is how harvested acreage will impac...
Livestock Roundup: U.S. Cattle and Beef Markets and Brazil’s Cattle
This past week’s slaughter at 593,000 was down 7,000 head from the previous week and down 22,000 from last year. The fed cattle portion of the weekly slaughter continues to make a larger percentage of the total slaughter than prior years with cow slaughter of both dairy and beef cows in d...
Oilseed Highlights: Decline Shallows Out
The Market The Board continued its bearish trend over the past five days of trading, though at a shallower pace. November soybeans hit a new contract low today (1007/bushel) and over the past five days have dropped another 8.25 cents (-0.8 percent). Falling soybean values have sparked purchases...
Market Commentary: CBOT Drifts Lower as Traders Prep for WASDE; Soyoil Rises on UCO Investigation
The CBOT/CME was mostly lower at midweek as traders prepare for what is expected to be a bearish WASDE report next week. The favorable shift in the U.S. weather is adding to negative sentiments for corn, soybeans, and the spring wheat crop and most are expecting large ending stocks increases in...
Proposed New Subsidy Program
Two Georgia Congressional officials, Senator Jon Osoff and Rep. Sanford Bishop, have introduced legislation that would extend crop loss payments to seasonal and perishable crop producers. Payments would be triggered when a crop’s national average price drops below its five-year average re...
Black Sea Regional Analysis
Russian Grain Markets: 29 July–2 August 2024 Russian Vice Premier Patroushev announced that Russia is 40 percent done with harvesting small grains. The harvesting pace is ahead of last year’s pace; however, production is only 64 MMT which is lower than last year’s crop. The gr...
Market Commentary: Corn, Soy Fall on Weather, Crop Ratings; Wheat Firms on EU Worries
If Monday’s trade as all about the macro market meltdown, then Tuesday’s trade was about returning to normal. Global equity, bond, and currency markets mostly reversed course on Tuesday and pared back some of the massive losses they incurred over the past three trading sessions. Tha...
Politics and Trade; EU Livestock to Get Smaller
Politics and Trade Democratic Presidential candidate Kamala Harris picked Minnesota Governor Tim Walz to be her vice president nominee on the ticket and he reveals the divide on trade for politicians. Representing a Midwest agricultural state, Walz has been a supporter of expanding overseas mar...
RAPP versus Exchange Rate
USDA is making another $300 million available to U.S. agricultural export marketers under the Regional Agricultural Promotion Program (RAPP). The program was launched in 2023 with $1.2 billion from the Commodity Credit Corporation and is in addition to other cost-share export assistance efforts...
Former House Aggie Tim Walz is Democrat Veep Candidate
Vice President Kamala Harris has picked Minnesota Governor Tim Walz as her running mate a week before the Democrat National Convention in Chicago. Walz is in his second term as Governor, first elected in 2018, and before that he was a six-term Congressman and member of the House Agriculture Com...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Egypt’s Ministry of Supply has increased its selling price of wheat, both local and imported, by about 20 percent. At the same time, the price of government wheat flour has increased by 35 percent. These pri...
Market Commentary: Grains Trade Higher Amid Rout in Cattle and Equities
Despite bearish supply and demand outlooks coupled with the ongoing selloff in global equity markets, the CBOT’s major grain and oilseed markets turned higher to start the week. Corn, wheat, soybeans, and soymeal all scored meaningful gains and – in the case of corn and wheat &ndash...
Ideas for Sustenance
Too long; didn’t read, so summarized here. Successful Farming: Farmers are trying new things. We are looking at the data from new harvest methods, changing plant spacings, row spacings, and populations. The fertility program gets pushed later and later. We rotate grazing and diversi...
Mercosur Regional Analysis
Wheat The Buenos Aires Grain Exchange said the wheat planting has ended with a total seeded area of 6.3 Mha, aligning it with other private estimates of 6.3–6.4 Mha. In certain regions, some fields were not planted due to a lack of soil moisture, and with current prices, it is not worth t...
Another Extension for BTC Proposed
Representatives Mike Carey (R-Ohio) and Ann Kuster (D-New Hampshire) last month introduced the Biodiesel Tax Credit Extension Act of 2024 that would extend the $1.00/gallon biodiesel blender credit through 2025. By way of background, the Biodiesel Tax Credit (BTC) – which applies to both...
European Market Analysis
Regional News Russia’s ag ministry says the country exported a record volume of 70 MMT of grain in 2023/24 but that total will fall to 60 MMT for 2024/25 due to smaller production. Last week, Tunisia purchased 125 KMT of soft wheat at prices ranging from $243.99-246/MT C&F...
CFTC COT Report Analysis
Friday’s CFTC report shows that funds were – through Tuesday’s data reporting deadline – cautiously covering shorts in corn and soybeans as they continued to edge back from their recent record-large short position in both commodities. That was as little surprising given...
Market Commentary: Short Covering Caps Bearish Week; Cattle and Macro Meltdowns Continue
The CBOT saw some light short covering in corn, wheat, and soybeans develop after this week’s deeply bearish trade that brought new contract lows in all three commodities. There wasn’t a lot of bullish news, other than the continued hot weather forecast for the U.S. Midwest and conc...
Oilseed Highlights: Another Week Closer to a Bottom
The Market With expectations of higher U.S. soybean output this season than officially suggested thus far, new crop positions printed new contract lows this week. With record competing output on the market from South America, the outlook is for increased stock building. On the path lower, Novem...
Market Commentary: Corn, Soy Sink on Record Yield Chatter; Wheat Firms on Quality Worries
Corn, the soy complex, and cattle futures each saw extended weakness in Thursday’s CBOT trade with the crop markets coming under pressure from favorable weather conditions and forecasts for the U.S. There is increasing market chatter about record breaking yields for both corn and soybeans...
Trade Influences
Although the Biden Administration is pushing quasi-trade agreements like APEP and IPEF, they are only expected to impact the movement of goods and services on the margin, if at all. Both President Biden and former President Donald Trump recognize that most Americans now believe that the U.S. lo...
Record Plunge in Farm Income
Tyne Morgan of the U.S. Farm Report points out that U.S. farm income is facing its largest drop in value in 2024 and its largest ever two year drop in real value when adding 2023 to the calculus. It is a $90 billion drop in two years and farmers appear to be holding on to their supplies in hope...
Livestock Roundup: Ground Beef Reaching Record Price Levels
Labor is still playing a role in cattle markets as it has since the COVID interruptions in 2020, and the labor shortage during the high beef demand period in 2021 and 2022. This time around it is what are the minimums that packers can maintain under their contracts with unions to keep slaughter...
Market Commentary: Good Crop with Improving Conditions
This growing season’s major crops were already looking good, and now weather conditions are improving. If that doesn’t spell bearish, how about new contract lows this week for corn, soybeans, soyoil, plus SRW HRW wheats. New lows were hit today for corn and soybeans. USDA&rsqu...
Activists Lose; AI Hurdles; Chevron and Biofuels
Activists Lose As of this week, there are 136 statewide ballot measures to be voted on this November in 39 different states. That is down more than 15 percent from the average for an even-numbered year election. Notably, there are no initiatives being considered that relate to activists’...
Cow-Calf Margins Hit Records, Imply Herd Rebuilding
U.S. cow-calf producers are facing unprecedented economic incentives to expand the beef herd with expected production margins hitting record highs this year. WPI’s models indicate that revenues for the “average” Southern Plains (i.e., Kansas) cow-calf operations are forecast t...
Black Sea Regional Analysis
Russian Grain Markets: 22–26 July 2024 This season Russia will fail to produce a record crop despite an earlier harvesting campaign. The Ministry of Agriculture believes in their previous forecast of 132 MMT of which wheat is 86 MMT. Interestingly, the Ministry of Agriculture is the most...
Market Commentary: CBOT Declines After Crop Conditions Didn’t
Better-than-expected crop ratings and shifting global weather forecasts sent the CBOT lower again on Tuesday. Monday’s Crop Conditions report showed broadly steady ratings for corn and soybeans across the major producers, with Kansas being the only notable decline, which was in sharp cont...
A Buffet of Thoughts
Summarized policy ideas under current debate. Technology Revolutions: The U.S. has not missed many (computers, space, nuclear power, semiconductors, solar, the internet, fracking, genetics, AI) but it has been late to the battery revolution. Economist Noah Smith Transatlantic Trade War: T...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Turkey’s year end wheat stocks are expected to drop by 61 percent due to the wheat import ban. The ban is set to expand in October but wheat imports for the year are seen dropping by 3 MMT – a drop of...
Market Commentary: Bears Concentrate on Soybeans, Wheat Scores Reversal
The CBOT started the week with a collapse in soybeans and the broader soy complex in early trade that pulled corn and wheat lower as well. Soybeans, soyoil, and wheat all scored new contract lows in the early selloff with funds eagerly extending their short positions. By the day’s end, ho...
GMO’s 50 Years On
More than 50 years after direct genetic modification was first identified, and nearly three decades after GMO crop production began in the U.S., it is still a controversial technology in many parts of the world. Opposition to GMO’s remains strong in Africa where just four countries have a...
FOMC Preview
The Federal Reserve starts its July meeting tomorrow and has now received the last key data. The Personal Consumption Expenditure (PCE) prices – the Fed’s preferred inflation measure – rose 0.1 percent in June and is up 2.5 percent in the past year compared to a 3.2 percent ga...
European Market Analysis
Regional News Kazakhstan’s grain harvest is expected to coincide with heavy rains forecast for the next few weeks, which will likely cause a significant deterioration of the crop’s quality. Last week, the EU Commission’s MARS crop monitoring unit adjusted its 2024/...
Mercosur Regional Analysis
Wheat According to the Buenos Aires Grain Exchange, Argentina’s wheat planting reached 98.5 percent of the expected 6.3 Mha last week, with some localized rains allowing producers to advance planting. However, the lack of water and frost damage to tissues caused the crop condition t...
CFTC COT Report Analysis
As expected, short-covering was the major theme from the latest CFTC Commitments of Traders report, which showed that managed money funds backed off from the record-breaking positions they previously amassed. Funds bought back about 10K contracts in soybeans and about 19K in corn, but the buyin...
Market Commentary: Down on the Day but Some Ups for the Week
Most of the major agricultural commodity contracts opened today’s trading session in the red and stayed that way to the close. Only feeder cattle and lean hogs managed small gains on the day. New contract lows were hit for December soyoil, September SRW and September HRW. Volume was overa...
Friday Shorts
Non-Meat: In a first, a Europe-based company has sought EU approval to market lab-grown meat, in this case fake foie gras. Some member states have already banned such products. While lab-grown meat remains expensive, and plant-based meat substitutes have faced declining popularity, the increase...
Cocoa: Will the Challenges of 2023 Continue into 2024?
Recently, WPI has received requests from a few clients to provide some analysis on the cocoa market. Clearly, there is a reason for this request as cocoa prices have been exceptionally volatile and futures more than doubled over the nine months from August 2023 through April 2024. I...
June Cold Storage Report
June 2024 total red meat and poultry stocks were up slightly from May but 5.4 percent below June 2023 levels due to sharp declines in poultry and pork stocks. Total poultry stocks were down 7.8 percent year-over-year (YoY) due to reductions in broiler slaughter for the month. Total pork stocks...
Market Commentary: Corn, Soybeans Rise on Weather, Export Sales; Wheat Dips on Yields, Exports
The headline for the CBOT on Thursday was the unexpected surge in soymeal export sales that boosted that market and new crop soybeans to strong gains for the day. Soymeal exports have been a prominent support for the market this year and their recent uptick after December futures fell to near $...
Oilseed Highlights: Good Exports and a Weather Premium
The Market The soy complex is on something of a rebound this week. A weather premium is finally being added as the outlook is hot and dry for August when plants in the U.S. Midwest are trying to set pods. U.S. new crop soybean export sales were impressive last week, and the combination has spar...
Livestock Roundup: Dairy Overview
As of 24 July, there have been 170 cases of HPAI in dairy herds across 13 States with the last being 22 July, in Colorado. The first confirmed case was 25 March Texas. In response to the outbreak, USDA has maintained mandatory testing requirements for lactating dairy cows prior to interstate m...
Market Commentary: CBOT Ends Mixed on Momentum Switch
The CBOT had relatively little fresh news upon which to trade Wednesday, which meant markets were largely at the mercy of fund positioning and existing trends. As equity markets fell sharply for the day and currencies wobbled, traders began looking for safe-haven assets, which helped diminish C...
Trump versus Harris Trade Policy; Africa Shines; Trade and the Environment
Trump versus Harris Trade Policy While trade policy analysts assess the future of their vocation under either a Trump or Harris presidency, there is not a lot of uncertainty. Mr. Trump has already advertised his intentions to raise tariffs. He views the U.S. trade deficit as the barometer of ho...
Decline in U.S. Flour Trade
The International Grains Council recently increased its forecast for global flour trade by 11 percent to 16.1 MMT, though that would still be a decline of 4 percent from 2023/24. Turkey dominates the global trade in flour, with some saying it does so in an unfair manner. Kazakhstan is the other...
Black Sea Regional Analysis
Russian Grain Markets: 15–19 July 2024 Russia started harvesting several weeks earlier this season due to hot weather conditions and early maturity of early grains. As of 12 July, Russian farmers harvested 32 MMT of grains from 8.4 Mha versus only 12.2 MMT from 3.3 Mha a year ago. The ave...
Market Commentary: Midwest Heat Concerns Corn, Soybeans; Cattle Finally React to COF Report
After two days of exciting trade, the CBOT settled down a little on Tuesday to reflect more deeply on market fundamentals. Monday’s Crop Progress data was largely reassuring for the major row crops, which helped create more stability in futures for the day. Wheat futures dipped but did no...
Counting Chickens: How Many Layers Are There Really?
At the end of June, there were 97.335 million birds depopulated due to HPAI; more than 75 percent at 73.5 birds, were egg layers. So far this month according to USDA, two more operations in Colorado have depopulated another 3.1 million birds, first on 8 July (1.8 million) and the second on 16 J...
U.S. Policy Battle; WTO Policy Battle; EU Policy Battle
U.S. Policy Battle The two major parties are past the battle over President Biden’s age and should move on to the policy differences. Democrats will try to take their own problem of Biden’s age and apply it to Trump but it is likely to have less salience. Instead, the election will...
Cultivating Canola Crystalizes
In just four years, U.S. production of canola has expanded by 73 percent, albeit from a smaller base. The production of biodiesel and renewable diesel are the drivers but more interesting is how part of the expansion is occurring. The incentives remain large for using oilseeds as feedstoc...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Iraq’s government announced record local wheat purchases of 6.3 MMT. Iraq is now self-sufficient in wheat. The government says that this will help it to ensure long-term food security and economic stability...
Market Commentary: CBOT Rallies as Funds Cover Shorts, Markets Forge Bottom?
The CBOT was mostly higher for the day with the strength originating from the soybean market and spilling over into corn and soybeans. The soybean market derived its strength from new forecasts of hot, dry weather for the U.S. Midwest as the soybean crop approaches pollination and pod filling...
Weekend Reading Insights
Because the information superhighway is tl;dr, we did the work for you and summarized the most relevant. Economic Growth: It is not just the result of building tangible things but making use of new ideas. It is relentless technological progress. Economist Daniel Susskind Trade Flows: Water foll...
Perceived Rice Shortage
Rice prices have begun to normalize after spiking recently due to India fearing a shortage and imposing export restrictions. This sparked panic buying and resulted in higher prices. The price of rice early this year was around $602/MT, substantially higher than the historical average of $381/MT...
Biden Drops Out 107 Days Before Election: What Now?
The 2024 election cycle has been unique from the outset, and it just got more so with President Joe Biden opting to step aside. This came after more than three weeks of a crescendo of calls from within the Democrat party for the President to drop out of the race. The trigger was Biden’s d...
Mercosur Regional Analysis
Wheat Argentina’s 2024/25 new crop wheat campaign is already 95 percent sown, but the last plots are struggling to finish. The lack of surface moisture is delaying the sowing of the remaining plots, mainly for short cycles in the central agricultural region. The campaign will likely end w...
European Market Analysis
Regional News Russia set a new record for wheat exports in MY 2023/24, with the country shipping 55.3 MMT of grain and accounting for 26.1 percent of global exports. Egypt’s GASC secured 20 KMT of sunflower seed oil at $1,013.99/MT for 1-15 September delivery. The original pla...
CFTC COT Report Analysis
The latest CFTC Commitment of Traders report highlights the ongoing bearish sentiment for oilseed and grain markets with managed money traders remaining massively short agricultural commodities. Perhaps the most notable item in this week’s report was the expansion of the record-large net...
Market Commentary: Mixed Week – How Low Can It Go
Trading opened today’s session mostly in the green, except for feeder cattle, but late in the session corn and the soybean complex turned lower. Notables for the week included new contract lows for: November soybeans December soymeal September SRW September HRW September HRS Weather wi...
Cattle on Feed Report: Inventory Up, Placements and Marketings Way Down
USDA released the monthly Cattle on Feed report today. Total inventory was up as expected, but a big drop in placements and a lower-than-expected volume of marketings made the report bullish. First, let’s look at marketings, which came in only slightly lower than expected, bu...
Summary of Recent Factors Driving Commodity Price Action
Recently, a WPI client asked if we could summarize the major factors that have driven commodity markets over the past several months. The goal is to succinctly describe how markets have ended up in their current state and examine the next major trend(s) that are likely to develop. This report,...
Market Commentary: Spring Wheat Rallies on Dry Weather; Soybeans See Large New Crop Export Sales
The CBOT saw a mixed day of trade with corn and soybeans seeing pressure from favorable U.S. weather outlooks and large supply expectations. Soybeans managed to find some support after USDA reported large export sales for 500 KMT of new crop soybeans overnight, the first significant sign of new...
Doubling Down on Protectionism; Conflicting CAP Goals
Doubling Down on Protectionism Typically, the party platforms crafted every four years by Republicans and Democrats are equally meaningless. Some of their policy prescriptions become codified but many do not. But speakers at this week’s Republican Convention are leaving no doubt that &ldq...
Oilseed Highlights: Market Stabilizing, For Now
The Market November soybeans traded at a new intrasession contract low of 1031.75/bushel on Thursday, a four-year low, but then bounced back and closed at its high for the week. The big drop came on Monday and pricing has now stabilized. There is near-term support in that old crop soybeans and...
Livestock Roundup: Hog Pressures
Last week, WPI noted in a summer cattle market outlook that 14 percent of the cattle producing regions were in drought, compared to 38 percent last year, with the exception of the southeast cow/calf country where drought is worsening and raises questions about cow culling, heifer retention, and...
Market Commentary: Firmer Trends Continue; Ukraine’s Corn in Jeopardy
The CBOT saw generally quiet, steady trade at mid-week, but many players noted firmer undertones as futures stabilize or start to recover from deeply oversold conditions. Corn and all three wheat futures markets turned higher with cautious bull spreading with the latter market seeing support fr...
No Olive Branch; Farm Price Charade
No Olive Branch In 2018, the U.S. began imposing 30-44 percent antidumping and countervailing duties on ripe olives originating in Spain. The EU was aghast since it implied that farm payments could be countervailed. Brussels challenged the duties in the WTO dispute settlement process and won. T...
Black Sea Regional Analysis
Russian Grain Markets: 8–12 July 2024 Russian grain markets remained unmistakably bearish which is tradition at the peak of grain harvesting campaign. Even though this year’s crop is quite modest compared to the past several seasons, the pressure on prices is significant because of...
Market Commentary: Corn, Soy Post Half-Hearted Reversals; Hogs Extend Nascent Rally
Tuesday’s CBOT trade featured gains in corn and the soy complex with funds casually covering some of their massive short positions amid oversold technical conditions and following Monday’s damage-inducing storms across the Midwest. Conviction was lacking, however, and the day’...
Trump Picks JD Vance as Running Mate
On the eve of the Republican national nominating convention, Former President Trump has picked freshman Ohio Senator JD Vance, a one-time critic, to be his running mate. There is an element of generational balance; Vance is 39, Trump is 78. Ideologically, Vance who was endorsed by Trump in the...
Food Security Angst; More Trade Agreements; Ag Regains EU Power
Food Security Angst Norway announced that it would spend $6 million a year for five years to build up a 60–75-thousand-ton grain reserve, or a three-month supply. The head of the Olam agricultural trading warned of a potential future food war. Supply chains are fragile, countries are erec...
Poultry Wins Meat Battle
The latest OECD-FAO Agricultural Outlook plots the growth outlook to 2033 for the major animal proteins and with little surprise, poultry expands its lead. With a per annum growth rate of 1.4 percent, poultry production expands at nearly three times the rate of increased pork production. Howeve...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Pakistan has banned the import of wheat and the export of wheat flour in order to “regulate the wheat market”. The ban on wheat flour exports only covers flour made from imported wheat. Pakistan’...
Market Commentary: Bearishness Envelops CBOT Trade
The CBOT was sharply lower on Monday with markets seeing continued pressure from Friday’s generally bearish WASDE, favorable Midwest weather trends, and gains in the U.S. dollar following the weekend assassination attempt on former President Trump. The assassination attempt obviously does...
WASDE Mid-Year Livestock and Poultry Forecasts
The July WASDE upped the projections for red meat production and trimmed the broiler forecast by 85 million pounds. The beef forecast is up on heavier weights. To benchmark, the average slaughter weight last week at 1,383 pounds was up 39 pounds per head compared to a year ago. Much of t...
Mercosur Regional Analysis
Grains Weather Argentina has faced extreme cold across the country for several days with temperatures well below 0 degrees Celsius for many hours. This extreme weather impacts various crops. For maize still standing in the field, the cold aids in drying and thus speeds up the harves...
Farm Bill Reassessment; Von der Leyen Threads Needle; Trade Agreements are Dead
Farm Bill Reassessment The chance of reauthorizing the farm bill this year was already looking unlikely but now it has shifted that way for new reasons. A House Agriculture Committee approved bill pleased farm groups but faced a gauntlet from food assistance groups and others on the political l...
Sugar Volatility
It has been a volatile year for global sugar prices. They hit 27.95 cents/pound on 6 November 2023 – the highest since 1980. They fell 30 percent to 19.69 cents/pound in May and now are running around 20.26 cents/pound. It is difficult to draw a complete supply/demand imbalanc...
Market Commentary: WASDE Bearish Wheat, Neutral Corn; Soybeans Fall on Demand Worries
CBOT futures had a relatively muted reaction to the USDA’s July WASDE as large U.S. and global new crop ending stocks damped much of any potential volatility. The biggest theme was larger U.S. and world wheat supplies and stocks while the outlook for corn saw far more muted changes. Soybe...
CFTC COT Report Analysis
Funds now hold their largest short position in corn futures since at least 2015 after adding another 9,000 contracts to their holdings last week. That, and their selling of nearly 30,000 soybean contracts to bring their short in that market close to the record short were the headlines from this...
Oilseed Highlights: WASDE Fails to Stem Price Decline
The Market The USDA July WASDE was directionally bearish but not as much as expected. The trade initially turned higher after the report’s release but couldn’t sustain the turnaround. Instead, the week involved the November contract falling from grace, or at least dropping below the...
SCOTUS Regulatory Ruling Already Having Impact
On 5 July, WPI reported that the recent Supreme Court decision on Loper Bright Enterprises v. Raimondo, which overturned the so-called “Chevron deference” whereby courts were to defer to agencies interpretations of ambiguous legislative intent, could have significant impacts on fede...
Market Commentary: New Contract Lows, Including a Soymeal Double
Contrasted with yesterday’s sour mood, most contracts found greenery in today’s trading. But that doesn’t mean the bearish overcast went away, it just took a small break here and there. Beyond the general tenor, there were some notable milestones: Corn and soybeans got a sma...
Livestock Roundup: Summer Cattle
The beef and cattle market is now past the milestone 4th of July holiday, between Memorial Day and Labor Day weekends that define the high demand season. Beef demand has held up so far and so has cattle supply, perhaps more than otherwise would have been expected. The last cattle on feed report...
PRC GMO in USA; Food Aid Dependency; CFTC Musical Chairs
PRC GMO in USA Members of Congress on the House Select Committee on China are furious at USDA for moving forward with approval of a biotech soybean developed by China’s QiBiodesign. China has refused to approve for domestic planting GMO’s that have been develop by Western companies...
Market Commentary: Bulls Don’t Dare Challenge CBOT Bears
Bears once again dominated trade at the CBOT on Wednesday with a favorable U.S. weather forecast and somewhat surprisingly cheap wheat from Russia proving the impetus for the day’s selling. The soy complex saw perhaps the most dramatic and persistent declines for the day, with a combinati...
U.S. Talk Representative; EUDR Expansion; Hungary Tanks Innovation; Russia Bolsters CAP
U.S. Talk Representative The Generalized System of Preferences (GSP) that grants duty free access to products from poorer countries expired almost four years ago. The African Growth and Opportunity Act (AGOA), which provides similar nonreciprocal preferential access to the U.S. market but aimed...
Geopolitical Trade Substitution
Historically, Canada has been the fourth largest producer of green peas and the largest exporter of the product. Canada’s global market share for the green pea trade was 37.9 percent in 2022, while Russia supplied 13.7 percent. Meanwhile, China is both the largest producer and importer of...
Black Sea Regional Analysis
Russian Grain Markets: 2–5 July 2024 Russian grain markets remained unmistakably bearish under pressure of high carryover and optimistic new crop forecasts. New crop is already arriving at inland elevators and even port terminals. Feed wheat lost $10/MT on a week which is a good indicator...
Market Commentary: Corn, Wheat Stabilize while Soy Complex, Livestock Collapse Further
Trade at the CBOT was highly mixed across the different market categories Tuesday with grains (corn and wheat) seeing mild gains and signs of pre-WASDE stability emerge while oilseeds and livestock futures sold off sharply again. The vegoil rally that last week’s tensions between Indonesi...
Trade Barriers or Facilitation; Ag Rises in EU; Biden Regs
Trade Barriers or Facilitiation The WTO reported that its monitoring of various countries evidences that members are introducing more trade-facilitating policies than they are trade-restrictive measures. It only seems unreal because the trade restrictive practices receive more media attention...
Wheat Supplies and Price Both Falling
Global wheat ending stocks have been persistently falling now for five years. Ordinarily, price and carryover supplies move inversely but the price of wheat has been dropping for four straight years along with the availability of wheat. The same is true more recently. Forecasts in recent...
Regulatory Agenda for 2024
The Administration has released its regulatory agenda for the rest of 2024. The agenda is a public notice process that details agencies’ work on proposed and upcoming regulations that will be put out for comment. In all, USDA has 109 regulations in the works, some significant and some les...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Egypt is the largest importer of Russian wheat with imports of 8.6 MMT in MY 2023/24 that ended June 30. Egypt’s government purchases of local wheat have reached 3.55 MMT causing the target purchase to...
Market Commentary: Grains Fall as Bears Grab Control
Bears were solidly in control of trade at the CBOT on Monday with mostly favorable U.S. weather forecasts and expectations of a bearish July WASDE report driving price action. Grain and oilseed markets were lower overnight with Matif wheat futures leading the CBOT and KCBT into the red in early...
Capital Investment and Productivity
While much of the focus on Europe relates to political instability in the EU, and threats from Russia, there are ample economic issues that also need to be addressed. This is true in both industrial production and agricultural output. European farms continue to lag their American counterparts i...
CFTC COT Report Analysis
The weekly CFTC report was in-line with expectations as it showed funds remaining dedicated net sellers across oilseed complex. The only exception was the buying in soyoil, where funds took back nearly half their short position in that contract amid the fears about the Indonesia-China trade war...
Dairy is Trading Despite Headwinds
U.S. dairy exporters have kept product moving despite a strong dollar and softer global demand. Prices for dairy have moved higher and are expected to stay that way. Producer fixed costs such as labor and equipment have moved higher, but feed costs are dropping. There is also the threat of HPAI...
Ag Appropriations Overview
Congress is back in session after the 4th of July Independence Day holiday break. But there are only 12 days on the legislative calendar for the month; there will be a break next week for the Republican nominating convention, and then Congress adjourns for the August recess on 2 August. Legisla...
Mercosur Regional Analysis
Wheat Argentina Wheat planting slowed last week, and farmers only seeded any additional 4 percent of the estimated area. The main reasons are the lack of surface soil moisture in the central and northern agricultural areas, and excess moisture in the south. Fifteen percent of the es...
European Market Analysis
Regional News Europe saw mixed weather trends last week with showers in western Europe, Scandinavia, and the Balkans. Ukraine received little to no rainfall, however, and Russia was also dry, except for light showers in the southern region. Dryness and heat building over eastern Europe re...
Market Commentary: Lower Volume, Soyoil Spikes, and Short Covering
Volume was expected to be light today given yesterday’s holiday and a weekend ahead. And it was low for corn, soybeans, soymeal, and all three wheats. Plus, there is little new or different information when it comes to fundamentals. For the week, it was soyoil that stood out above t...
Oilseed Highlights: Soyoil Drives Reversal for Soybeans, But Not Soymeal
The Market After hitting a four-year low last week, November soybeans reversed course this week, adding 25.75 cents (2.33 percent) to end at 1129.75/bushel. It was driven by strong demand in soyoil for renewable diesel, and possible trade retaliation by China against major palm oil suppli...
New Paradigm for Regulatory Policy?
On 28 June, the Supreme Court issued its decision in Loper Bright Enterprises v. Raimondo (Secretary of Commerce) case, which could have significant impacts on federal regulatory policy moving forward as it overruled the so-called “Chevron deference” in place for the past 40 years...
U.S. July Fourth Holiday
Please note that Ag Perspectives will not be published tomorrow, Thursday, 4 July 2024 in observance of the Fourth of July holiday in the U.S. We will resume our normal report schedule on Friday, 5 July 2024. Enjoy the holiday!...
Market Commentary: Soy Complex Extends Rally while Corn, Wheat Move Lower
Pre-holiday trade at the CBOT featured the continuation of the soyoil and broader soy complex rally while corn and wheat sagged lower in uninspired trade. Trading volume was expectedly light ahead of the one-day break in trading and few markets made major moves. Those that did, however, include...
Transatlantic Monopsonists; Ex-Im Battle Continues
Transatlantic Monopsonists The three coalition partners (EPP, S&D, Renew) set to continue running the EU cannot agree on a sustainability agenda since the Greens got trounced in recent elections but they do agree on farmers. Specifically, they agree that farmers do not get “fair&rdquo...
Black Sea Regional Analysis
Russian Grain Markets: 24–28 June 2024 Russian grain markets are moving slowly but steadily to the end of the current season anticipating new crop pressures and global trends. Overall, the market was bearish last week, but a bigger bear seems to be ahead as the new season is only starting...
Market Commentary: Soyoil Leads Soy Complex Higher Again; Cattle Find Pre-Holiday Support
Once again, the excitement at the CBOT was dominated by soyoil, which posted its fifth straight higher close amid rising trade tensions between Indonesia and China. The rally in soyoil – and the broader vegoil complex – helped push soybeans higher and at one point November soybeans...
Corn for Cars; Squeezed Between Two Labors
Corn for Cars Incoming Mexican agriculture minister Julio Berdegue said his country’s new government will not reduce imports of (GMO) yellow corn, but will make self-sufficiency in white corn a priority. Others suggested GMO white corn will continue to be restricted no matter the verdict...
FMMO Proposal Released by USDA
Yesterday, USDA’s Agricultural Marketing Service (AMS) released its proposed changes to the Federal Milk Marketing Order (FMMO) from the hearing process that started in July 2023. Below are some of the key updates proposed by AMS: Milk Composition: Update the factors to 3.3 percent...
Corn Basis Pressure Points
Last week’s USDA Quarterly Stocks report revealed that farmers are holding 36 percent more corn in on-farm storage than a year earlier. One rule of thumb is for farmers to calculate their break-even point and then market their crop over the marketing year. The old calculus, before South A...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Egypt reports receiving 3.55 MMT of local wheat from farmers in this year’s harvest. The government’s local wheat buying target of 3.5 MMT has been exceeded. Egypt’s wheat reserves now stand at 6...
Market Commentary: Changing Winds for Soybeans, Wheat?
CBOT grain futures initially saw continued impacts from Friday’s surprisingly bearish USDA reports, but those shockwaves seemed to fade throughout the day, which left wheat and soybeans to trade higher. Wheat found support from dryness in the Black Sea and smaller crop estimates for Russi...
Summary of Weekend Reads
Back by popular demand. Hang on to your seat, this is a whirlwind review of this past summer weekend’s beach reads. Taxes: One of former President Donald Trump’s signature accomplishments was the 2017 Tax Cuts and Jobs Act (TCJA), which his opponents derided for cutting the taxes of...
Misalignment of Land and Labor
U.S. fruit and vegetable growers made their annual trek to Capitol Hill but instead of their usual gift of a full box of fresh produce for the Members of Congress, they only filled it a quarter full. Their message: fresh fruit production has fallen by 10 percent and fresh vegetable output has g...
Mercosur Regional Analysis
Weather Projections made by NOAA on 20 June for the rest of the year show, for the third consecutive month, a decrease in the predicted cooling of the sea surface temperature in the central equatorial Pacific compared to what was calculated in March this year. This indicates that the intensity...
European Market Analysis
Regional News European weather trends remain unfavorable for crops with drought in Hungary and Romania hurting winter crop development and yield potential while wet weather slowed summer crop seedings across France, Germany, and Italy. Now, heatwaves across Spain, eastern Europe and the B...
USDA Still Quantifying Practices and Procedures for 45Z Tax Credit
On Friday, USDA released a Request for Information (RFI) on the Production of Biofuel Feedstocks Using Climate-Smart Practices, with a 30-day comment period. That implies that the earliest the final rule under 45Z could come is in September – considering a 30-day comment period and, at th...
Market Commentary: Reports were Bearish Corn; Neutral Soy and Wheat
The market had been positioning in advance for today’s USDA Acreage and Q2 Stocks reports to be bearish and traders were generally rewarded. Though corn absorbed the harshest reaction, more than half its weekly losses occurred earlier in the week. For the week: September Corn: -7.5%...
Oilseed Highlights: Fifth Weekly Drop in Value
The Market This was the fifth consecutive week of decline in soybean values. November soybeans lost 16 cents (-1.42 percent) to finish out the week at 1104/bushel. December soymeal was down $5.90 (-1.72 percent) for a contract value of 335.5/ST. December soyoil ended the week at 43.79/pound, a...
USDA Proposes More Packer and Stockyard Act Rules
The Administration has proposed a new rule, Fair and Competitive Livestock and Poultry Markets, designed to clarify unfair practices under the Packers and Stockyards Act (PSA). This is the fourth in a suite of livestock marketing rules promised in 2021 via President Biden’s Executiv...
Market Commentary: Stocks versus Weather
While the overnight market was all green except for soymeal, it was only joined by wheat in green by the end of today’s trading session. There were lots of lead changes for corn and soybeans, with narrow trading on both sides of nowhere. This led to some mini-whiplashes as the market calc...
Livestock Roundup: Hogs and Pigs Report
Today, USDA released its quareterly Hogs and Pigs report for the March through May quarter. The total inventory of hogs and pigs on 1 June was 74.5 million head, which was 101 percent of June 2023, in line with pre-report expectations. This is the second consecutive year to see an increased Ju...
Technology Ignores Regulators; Two Records in One Year
Technology Ignores Regulators Perhaps as expected, EU member states failed to agree to the latest compromise language on allowing the development of new genomic techniques. Meanwhile, researchers at the University of Sydney have developed a gene editing tool, seekRNA, that could provide higher...
Market Commentary: A Weak Bounce for Wheat; Livestock Rally
Wheat and soyoil managed some green today, but corn, beans and meal saw red. Not the whole session, but most of it. Volume could be called modest to low in corn and soy complex as the trade appears to have found its positions ahead of Friday’s key USDA reports. July corn and August lean h...
Mixed Action for U.S. Exporters; Attacking American Citizens
Mixed Action for U.S. Exporters The Biden Administration announced an initiative to boost U.S. business opportunities abroad. The effort will be led by the State Department, USTR, and the Commerce Department. No USDA. American industry has long run trade deficits but now agriculture has slipped...
Black Sea Regional Analysis
Russian Grain Markets: 17–21 June 2024 Russia’s grain markets were quite volatile with some regions showing price recoveries. Southern Russia’s harvesting campaign is underway. Fresh demand for new crop barley has seen better price levels and as long as feed barley exports are...
Market Commentary: First the Acreage Report, Then the Weather
The trade today continued to set up for what could be a bearish USDA Acreage report at the end of the week. Certainly, there is the possibility of farmland switching from corn to soybeans due to rain delayed planting. But there is also the chance that both crops got planted on more land than th...
Hogs and Pigs Report Preview
On Thursday, USDA will release its Quarterly Hogs and Pigs report. Key data will be inventories of slaughter hogs, breeding sows, an estimate of the March–May pig crop with its accompanying litter rate, and producers’ farrowing intentions for June through August – the second e...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Iran’s wheat production is forecast by the FAO to be at 13.5 MMT out of total grain production of 19.8 MMT, including rice. Iran’s total grain imports are seen as reaching 14.9 MMT. Iran’s govern...
Market Commentary: Corn, Soy Post Turnaround; Hog Selloff Continues; Cattle Shrug Off COF Report
Trade at the CBOT was dynamic and interesting on Monday with early-day weakness sending wheat, corn, and soybeans all to fresh lows while late-day short-covering and buying pulled the latter two markets higher. Soybeans scored double-digit gains for the day while the corn market could only mana...
The Future of Loose Fiscal Policy and the Economy
Since the early 2000s, there has been plenty of discussion about whether monetary policy is too loose or too tight given the underlying economic conditions. It continues through today as the Fed tightened monetary policy to reign in inflation after the massive amounts of fiscal policy stimulus...
NGT Test this Week; New Mexican Authorities
NGT Test this Week The Belgian presidency of the EU will make its last effort to obtain approval of a regulatory proposal for new genomic techniques. If it fails, the effort will be passed along to the Hungarian presidency that begins in July. Chances are, it will fail despite being watered dow...
Pork and Beef Diverge
U.S. beef production has been falling but pork output is rising. The higher price of beef has made the consumption of competing animal proteins like pork and poultry more attractive. Thus, pork prices initially got a boost out of the extra demand created by the shortfall in beef availability.&n...
Mercosur Regional Analysis
Wheat It was a short trading week in Argentina with holidays on Monday, Thursday, and Friday and the CBOT being closed on Wednesday, all of which led to low activity for the week. Origination and FOB markets were quiet for both corn and wheat. Presently, with a weekly progress of almost 2...
Market Commentary: Grain Rally Fades; Soybeans Try for Recovery; Bearish COF Numbers
The CBOT was mixed to close the week with traders seeming to take a break after this week’s generally bearish price action. There was notable short profit taking that helped the soy complex, while corn and wheat continued to drift lower amid weak technicals and bearish fundamental sentime...
Cattle on Feed Report: Placements Way Up in May
USDA released the monthly Cattle on Feed report today. Placements were the only category off from the consensus expectation. The range of estimates was a low of 95 percent to a high of 102.4 percent. Actual placements were 104 percent of May 2022. For the year, January through May,...
Oilseed Highlights: Big Potential Supplies, Weather Bear on Market
The Market For the week, the July soybean contract fell 1.6 percent in value and is trading at 1160.5/bushel, its lowest level in three years. November soybeans ended the week at 1120/bushel, a loss of 2.5 percent. July soymeal is now at 361.8/ST, down 0.7 percent on the week. Soymeal remains t...
Poor Feed for the Golden Goose; Disingenuous Argument
Poor Feed for the Golden Goose Most people understand basic economics, but not all the subtleties of its principles. Competition makes sense, unless someone says it’s unfair. Some politicians trying to lead America out of its muddle, which is to say the octogenarian “leadership,&rdq...
Market Commentary: Still Looking for that Inevitable Bottom
Today, everything bled red except live cattle. Generally favorable U.S. weather overhangs the market until USDA’s Acreage Report is issued next week on 28 June. Nothing is tanking as much as wheat, with Paris now entering oversold territory and July HRS hitting a new contract low...
Livestock Roundup: Cattle on Feed Preview
USDA will release its Cattle on Feed report tomorrow; the consensus pre-report analysts’ estimate is for the inventory of cattle on feed as of 1 June to be 99 percent of last year. May placements and marketing are expected to be 98 and 100 percent respectively of last year’s totals...
Black Sea Regional Analysis
Russian Grain Markets: 10–14 June 2024 Last week, Russian grain markets were quite volatile. In the south, the main export-oriented areas saw grain prices drop following the global bearish trend and Russia’s most recent failure on the GASC tender in Egypt. Moreover, Russia’s s...
Market Commentary: Soy Complex Rises on NOPA Crush; Harvest Progress Pressures Wheat; Cattle Conundrum
The CBOT was mixed on Tuesday with the Juneteenth holiday on Wednesday blunting trading volume and overall price action. Corn and soybeans settled higher amid modest declines in crop ratings and emerging technical support while the wheat market ignored hot, dry conditions in eastern Europe and...
U.S. Juneteenth Holiday
The CBOT/CME markets and our offices will be closed tomorrow, Wednesday, 19 June in observance of the U.S. Juneteenth holiday. Please note that the next Ag Perspectives will be published on Thursday, 20 June. ...
Tight Margins Prevent Disruption; Hungary Isn’t Hungry; Two-Tiered Pricing
Tight Margins Prevent Disruption While populist politicians complain about corporate greed, the businesses with long term success in agriculture achieve their success via tight margins. Bloomberg notes that upstarts in the “agrifoodtech” space like Farmers Edge Inc. and Gro Intellig...
Trade Spat Between China and EU
When President Biden announced higher Section 232 tariffs on a list of Chinese goods (see WPI 14 May) anxieties were raised over possible retaliation (see WPI 10 June). Right now, the EU is on the leading edge of the tariff tit-for-tat. Yesterday, China announced its Ministry of Commerce would...
Biofuel Trade Issues
U.S. ethanol exports during December-March were up 42 percent over the same period a year earlier. The increased sales are not due to the price of petroleum as there is a very low correlation between the two. Instead, demand is driven by efforts to reduce the carbon intensity of fuels, particul...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Turkey’s announcement that it would stop wheat imports from June to October in order to protect local wheat production has surprised and upset the wheat trade in Turkey and internationally. Turkey’s la...
Market Commentary: No Threats so Hedging Bearish
Final planted numbers are unknown until late this month and the spread on that outcome is wide, but weather is only a theoretical threat to what could be a big U.S. crop. USDA’s weekly Crop Progress report was released after the market close, but the crop conditions were already viewed as...
U.S. Pork Kept Out of Africa
At a recent hearing of the Senate Finance Committee, the National Pork Producers Council (NPPC) highlighted Africa’s call for the renewal of the African Growth and Opportunity Act (AGAO) while at the same time calling for the removal of South Africa and Nigeria from the agreement because...
Mercosur Regional Analysis
Wheat Wheat planting is progressing rapidly. According to the Buenos Aires Grain Exchange, 43 percent of the estimated 6.2 Mha have been sown. The Rosario Grain Exchange is slightly more optimistic, estimating an area of 6.9 Mha, and a production of 21 MMT. The market, in general, is taking a m...
Market Commentary: Ignoring Weather, Modest Volume Sees Mostly Red
Grains and soybeans followed the overnight close by trading lower at the open. The early stretch just saw fractional declines but later in the morning, corn and soybeans took deeper dives. Volumes were modest to lower, except in cattle futures. Despite expectations that the current hotter, drie...
USDA Proposes Poultry Contracting Rule
Early this month, USDA proposed the Poultry Grower Payments Systems and Capital Improvement Systems rule, the third in a series of livestock and poultry marketing regulations. This proposal is targeted at regulating so-called tournament pricing systems for poultry This rule has been long in the...
Oilseed Highlights: Barely Higher And Needing Rain
The Market If it is better to be lucky than good, it is better to close higher even if only barely. July soybeans rose a half-penny this week or 0.04 percent and ended at 1179.75/bushel. In the same vein, July soyoil gained 5/100 of a penny or 0.1 percent in value to end the week at 43.68/pound...
Market Commentary: Some Higher Closes on Sideways Trade
Corn, the soybean complex and SRW all closed higher on the day with Kansas City and Minneapolis fractionally lower. For the trading week thus far, July corn is up 9.75 cents (2.1 percent), July soybeans are 10.25 cents higher (0.8 percent), and July SRW is down 7.5 cents (-1.1 percent). ...
Cutting Food Waste; Conflicting Approaches
Cutting Food Waste USDA issued a national strategy yesterday that aims to cut food waste by 50 percent by 2030. According to the agency, food waste in the U.S. involves a third of the supply. There are many reasons why this is concerning and USDA has proposed many remediation steps along the su...
Livestock Roundup: Production and Price Outlook
This week’s WASDE upped the projections for pork and broiler production and trimmed the beef forecast slightly at 5 million pounds. The beef forecast is down on lower slaughter but is offset by heavier weights. For the past 10 weeks, slaughter weights have averaged 1,399 pounds, hi...
Market Commentary: Wheat Falls on WASDE Numbers, Corn and Soy Steady; Hogs Post Turnaround
The CBOT was steady heading into Wednesday’s WASDE report from the USDA and largely remained so after the report’s release. Corn and soybeans saw few changes to the key balance sheets (the U.S., South America, and the world) and so traded mostly sideways with somewhat lackluster vol...
Farm Bill Prospects; Transatlantic Reverberations; Trade Policy Disconnect
Farm Bill Prospects Although the odds are long, there are some political dynamics that benefit the completion of a farm bill. Republicans barely control the House, but they have the potential to complete passage of a bill in that body. Democrats barely control the Senate, but there are Democrat...
Black Sea Regional Analysis
Russian Grain Markets: 3–7 June 2024 Russian grain markets remained stable and slightly bullish against solid demand for Russian wheat globally and recently appreciated markets due to fears of lower production caused by adverse spring weather. All Russian ministries, including the Ministr...
Market Commentary: Wheat Reverses Course, Corn and Soy Quiet Ahead of WASDE
The CBOT’s trade was primarily focused on last-minute preparation and positioning for the WASDE, which USDA will release at Noon ET on Wednesday. That meant corn and soybeans saw more selling pressure as expectations call for larger U.S. crops and ending stocks for the coming year. Wheat,...
Food as National Security; Food Policy and Climate Change
Food as National Security Journalists like Greg Ip and Noah Smith have identified the West’s trifecta of tools to counter China: industrial policy, export controls, and tariffs. They note another needed factor, unified western economics, but acknowledge it is difficult to achieve. Other f...
Senate Republican Farm Bill Framework
As WPI reported on 13 May, both the House and Senate agriculture committees released broad outlines of their respective farm bill drafts. The House Committee then tabled a full draft and passed a farm bill, the provisions of which were reported here. In the Senate, Chairwoman Debbie...
Priced to Move
U.S. wheat prices and export sales are moving as expected. Nearing the end of the marketing year, old crop wheat was cheaper and now new crop wheat as harvest is beginning is the better bargain. This is reflected in weekly export sales as new crop commitments are increasing and the declining su...
Market Commentary: Wheat Selloff Accelerates; Corn, Soy Stabilized Before WASDE; Cattle and Hogs Diverge
The CBOT was mixed to start the week with corn and the soy complex seeing some cautious support, mostly concentrated in old crop markets, while the massive selloff in wheat continued with funds eagerly selling into the weakness. One feature of the day’s trade was the Goldman roll, which h...
Immigration Tariffs?
At a campaign event in Arizona, former President Trump floated the idea of using tariffs on countries who don’t cooperate with the U.S. on illegal immigration, and specifically, those countries taking back citizens who illegally immigrate into the U.S. While most illegal immigration...
CFTC COT Report Analysis
As expected, funds were proven to be staunch net sellers last week, according to Friday’s CFTC report data. Funds were the most aggressive in corn where they sold nearly 90,000 contracts and obtained their largest short position since April and the largest early-June short since 2020. Fun...
Goodbye Green Deal/F2F; Unfarming California
Goodbye Green Deal/F2F The EU’s ruling elites are still assessing the impacts of yesterday’s victories by conservative parties that they had derisively called “far right,” anti-democratic, and anti-EU ahead of the election. The results and especially the loss by the Gree...
El Niño Sparks Corn Demand
Corn production in Sub-Saharan Africa has been volatile for decades but when technology and investment should have been making it less so, it has instead gotten worse. This year’s El Niño has helped make a bad situation worse. USAID’s Famine Early Warning System Networ...
Mercosur Regional Analysis
Corn This week, the Argentine government confirmed that the sworn export sales declarations (DJVE) will not be extended, unlike the previous administration. Exporters must ship a minimum of 26 MMT by January 2025. Between June, July, and August alone, DJVEs account for 8.7 MMT, with an addition...
Market Commentary: Thursday’s Dead Cat Bounce
Thursday’s few flashes of green turned out to be an anomaly instead of a turning point. On Friday the trade returned to selling off grains and oilseeds. It became the eighth consecutive session lower for SRW and HRS, and the eighth session lower in the past nine for corn and soybeans. Goo...
Oilseed Highlights: Good Weather Nudges Bearish Trend
The Market For the week, front month contracts saw a 4 percent decline (-25.75 cents) in soybeans (1179.25/bushel), a 1 percent decline (-$4) in soymeal ($360.7/ST), and a 4.1 percent (-1.89 cents) in soyoil (43.63/pound. Speculators increased their net short position in soybeans by 3.7 percent...
Mixed Jobs Report, Higher Manufacturing, and Next Week’s Fed Meeting
Today’s jobs report indicated that total non-farm payrolls rose 272,000 in May, easily beating the consensus pre-report expectation of 180,000. Total hours worked in May rose 0.2 percent and are up 1.3 percent from a year ago. Average hourly earnings increased 0.4 percent and are up 4.1 p...
Silly International Bureaucrat
UN Secretary General António Guterres has called fossil fuel firms the “grandfathers of climate chaos” and argues that advertising limits like those imposed on tobacco should be applied to the fossil fuel industry as well. Unlike tobacco, energy is a demand inelastic necessit...
Market Commentary: Bouncing Off a New Floor
Corn, soybeans, and wheat were both higher in the overnight session and added to that mood today except only HRW amongst the wheats held on to gains. For corn and soybeans, today broke a seven consecutive session losing streak, and HRW ended a six-session losing streak. Some in the trade...
Cattle and Beef: Bigger and Better Respectively
Total cattle slaughter last week during the shortened Memorial Day holiday week was down 67,000 head from the prior week and down 28,000 from last year. However, slaughter weights reached 1,400 pounds. The heavier carcass weights are being driven by lower cattle supplies, fewer cows (both beef...
Market Commentary: CBOT’s Game of Price “Limbo” Continues
The CBOT seems to be locked in a game of bearish limbo with markets battling to see which can bend itself beneath the lowest levels of technical support. Grains, oilseeds, and the entire livestock complex finished lower on Wednesday with soymeal being the only major ag market to see higher trad...
Farm Bill Prognosis; Reciprocity with Canada
Farm Bill Prognosis A recent survey of economists indicated most do not believe a new U.S. farm bill will be enacted this year. Some speculated it would be 2025, and still others thought 2026. The 2018 Farm Bill is currently on extensions that expire later this year. The Senate Agriculture Comm...
Black Sea Regional Analysis
Russian Grain Markets: 27–31 May 2024 Russia remains the focus of many world grain analysts as weather factors in Russia and Ukraine make global markets nervous and bullish. Futures markets reacted almost instantaneously while Russian markets only now realize the situation and all grains...
Market Commentary: Crop Progress Data Pressures CBOT; Hogs Collapse on Demand Worries
The CBOT was once again mostly lower with traders shedding position length and getting short as U.S. farmers make solid strides seeding the 2024 crop. There are certainly some areas of concern and potential for some acres to be planted to soybeans at the last minute, but the overall outlook is...
U.S. – Brazil Dialogue; Tone Deaf in Europe
U.S. – Brazil Dialogue The 22nd Plenary of the U.S. – Brazil Commercial Dialogue will be held in September to discuss reducing non-tariff barriers. However, some of the larger issues between the two countries should include tariffs and foreign policy. Brazil maintains an 18 percent...
Egypt Needs Wheat
Egypt’s General Authority for Supply Commodities (GASC) purchased 470 KMT of wheat today. It will come from four countries: Romania, France, Ukraine, and Bulgaria. Russia is notably absent. Egyptian President Abdel Fattah el-Sisi was re-elected with 90 percent of the vote and is now formi...