Recent Farm Inputs Analysis
Feast or Famine
The COVID supply chain meltdown created anxiety over the availability of agricultural inputs. This compelled many operators to look forward and lock in their needs for 2023, often at elevated prices. This buy-high insurance marker has been met with ammonia prices that have now fallen by 50 perc...
Similarities of Farming and Manufacturing
Debate around the reauthorization of the U.S. farm bill is focused on the legislation’s two major functions, domestic food assistance and farm price supports. The former involves Republicans trying to reduce the most generous portions of what amounts to 81 percent of farm bill spending, a...
Black Sea Grain Initiative: One and Done?
The uncertainty that Russia’s invasion has brought to agricultural markets continues. Roughly 32.9 MMT of grain has been exported from Ukraine since the Black Sea Grain Initiative (BSGI) began in July 2022. Russia refused to extend it Monday, siting the continued sanctions that target Rus...
Green Deal Strategies
It has been a year since the EU released its plan for halving the use of pesticide and slashing fertilizer use and the debate over it is evolving. The farming lobby has stiffened its spine with the Dutch government backing away from some of its strident demands, and now agriculture members of t...
Climate Change and Farm Bill
During the farm bill reauthorization this year, farmers want to protect their support programs including crop insurance. By contrast, environmentalists want to see a stronger emphasis on conservation. American Farmland Trust is an organization focused on preserving farms, farmland and promoting...
USA Land Use Changes
The acres used for crops in the U.S. peaked in 1981 when farm income was low and farmers tried to make up for it by expanding production. The acres used for crops in 2022 was 14.7 percent fewer and the share of cropland successfully harvested had risen slightly to 85 percent. While the n...
AMLO Spits on U.S. Corn; Sovereign Right to EV’s; Green Fertilizer Dreams
AMLO Spits on U.S. Corn If there were any doubts in the U.S. government about Mexico’s intent about GMO corn, President Andrés Manuel López Obrador cleared up their unwarranted confusion. He said Mexico could not buy GMO corn because there is no evidence it is safe. In a Tru...
Fertilizer: No Room for Error
There are a lot of uncertainties in the market and ranging from the political like the war, to the mundane such as weather. One variable front and center is fertilizer. It is both essential to crop production, and an environmental externality. The goal of reducing its use has come squarely conf...
Fertilizer Crisis
Fortunately, Hurricane Ian did not adversely impact Florida’s production of phosphate for crop production, but nitrogen remains a major supply concern. This is especially true in Europe where limited natural gas supplies will be focused on winter heating needs and maintaining industrial o...
South America’s Fertilizer Situation
Rabobank reports that fertilizer supplies will improve in 2023 with downward pressure on phosphate and potash prices, but nitrogen may see a 20-30 percent price hike. This is an important competitiveness factor for agricultural exporters. North and South America both have abundant supplies of p...
Green Food Crisis; Geopolitical Collusion
Green Food Crisis Regardless of the war in Ukraine and a global food price shock, the EU is moving forward with its plan to cut by half the use of “risky” pesticides by 2030. The goal is to replace them with “safe and sustainable alternatives.” For some, it looks like ad...
War on Energy and Food
While the price of Brent crude is up 12 percent since Friday, fertilizer has increased 33 percent. Fertilizer values are priced to energy but now seem to be outpacing it. Crop nutrients have been hit by a trifecta of higher energy input costs, soaring demand and low supplies. Agricultural commo...
Getting Away with It; On Message, Out of Tune; Its Complicated
Getting Away with It The threats of sanctions did not deter Vladimir Putin’s invasion of Ukraine and there is no reason to believe their implementation will now reverse the situation. The aggression has created much for the transatlantic alliance to ponder. First and foremost is China, wh...
Eye on Weather for 2022 Considering Fertilizer Prices
There has been much discussion and focus on the weather conditions in South America, and Brazil in particular where it has been dry across the central and southern parts of the country. Heavy rains are also causing crop loss in some of the northern areas. The forecast is for more La Nina effect...
Africa Already Green
Changes in Chemical Usage
The U.S./Canada and Europe have increased pesticide usage only slightly over the past two decades whereas South America’s usage has grown by almost 120 percent. Africa’s pesticide usage in agriculture has grown by nearly 69 percent, but from a very small base. Asia is the dominant a...
Worsening Food Prices
Key agricultural commodity prices have risen sharply over the past two years, some reaching their highest level in a decade (see graph below). Now the UN says that climate change could cause production to fall 30 percent at the same time food demand is forecast to rise by 50 percent. The cautio...
No N, No GMO, No Food
Some environmentalists were aghast at the COP26 meeting when mega-billionaire and serial do-gooder Bill Gates described nitrogen fertilizer as “magical” and opined that, “to grow crops, you want tons of nitrogen.” They called nitrogen fertilizer a major cause of greenhou...
Tech City on a Hill; Distance Warms Heart
Tech City on a Hill Some nationalistic political philosophers like to characterize the U.S. as a beacon of hope for democratic ideals and while some will say this has come to pass, it does offer hope to technologists. The proof was today’s House Agriculture Committee hearing on how to boo...
Notable TFP Changes
U.S. Secretary for Agriculture Tom Vilsack and EU Agriculture Commissioner Janusz Wojciechowski will be on the stage together next week at the Forum for the Future of Agriculture & Farm Europe. Mr. Vilsack has taken the position that increasing productivity is the pathway to sustainability...
High-Cost Energy/Ag Inputs Forecast
The U.S. Energy Information Administration (EIA) released its winter fuels outlook last week, forecasting rising prices for several key agricultural inputs. First, natural gas will continue pushing up nitrogen fertilizer prices. While there are a number of factors at play in fertil...
F2F Proxy; Rolling Inflation; Selective View of Tensions
F2F Proxy Greens in Europe have been downplaying the impact on production from reduced use of inputs, arguing that studies showing lower production are flawed. Whether the use of inputs like fertilizer are reduced due to government restrictions on use (F2F) or tempered by record high prices, th...
Technical Views - Retrace Lower
SPREADS Dec crush trades to 88c/bu while oilshare trades at 45.0%. Dec/March corn trades out to 8c from 7c, while Dec 21/22 trades from 23 1/2c carry to 20 3/4c. Dec/March wheat carry trades from 10 1/2c to 11c. Dec wheat/corn trades from 1.86 1/4c to 1.83c. Nov/Jan bean...
Fertilizer Prices and Production
DTN reports that for the first time in about nine months there was no significant increase in fertilizer prices this past month. Among the eight major components, prices have risen between 36 percent to a 76 percent increase for MAP. Higher crop prices have meant higher farm revenue and increas...
GMO Tipping Point; One-Way Ethanol; Opium or Food?
GMO Tipping Point They do not call it genetic modification because of all the negative baggage associated with the first wave of organisms modified to be better. The technologies that have evolved from originally inserting a gene into DNA instead have a trendier moniker, new genomic techniques...
EO “Attempts” Competitive Ag Economy
Much of the Biden Administration’s agriculture agenda was furthered today by an Executive Order (EO) issued from the White House while Secretary Vilsack was in Council Bluffs, Iowa, to tout the plan. The order to Promote Competition in the American Economy is a broad reaching effort...
CPTPP Appeal; Food Opponents; TRIPS for Free
CPTPP Appeal China’s aggressive effort to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) may be having an unintended effect – causing the U.S. to reconsider its previous rejection of such an agreement. If China were to join, which seems unlike...
AM Outlook - Overbought?
GOOD MORNING, Prices are higher across the board this morning as beans and soyoil place new contract highs for the week, continuing strong up-trends. Crude oil is firmer, which underpins the soyoil market, though Asian values are a bit lower this AM. Higher world vegoil markets in t...
Exporting Water
The latest mantra from development specialists is concern about the future availability of water. It is an old topic but a durable one given the preciousness of the resource. Since 70 percent of the withdrawals of freshwater around the world are for agriculture, and 60 percent more food must be...
Green on Black Equals Red; Fake Honey
Green Impact on Black Equals Red Activists in Europe are protesting against today’s “Black Friday” shopping extravaganza. They argue that the environmental externalities of consumerism will destroy the planet. This begs the question of whether commercial minimalism will destro...
Technical Views - Meal Correction Upwards
SPREADS September KC/Chicago spreads moved to new contract lows yesterday. KC wheat/corn spreads moved back to levels conducive to putting HRW back into feed. October crush firms to 1.07c/bu while oilshare firms to new highs at 33 percent. Dec/March corn trades from 10c...
Market Commentary
Weather forecasts run yesterday afternoon and evening continue to show a drying trend across the Corn Belt, which led futures lower overnight. The worst of the planting-delaying weather seems to be over, and fresh forecasts are broadly encouraging. Overnight pressure also came from news that ho...
Market Commentary
Overnight trade featured prices on both sides of unchanged in heavy volume (well, heavy for an overnight session). Corn attempted to break below yesterday’s low but failed, which brought more buying heading into the morning. At the close, corn, soybean and wheat futures were all higher. T...
Black Sea Regional Analysis
Russian Grain Markets: 18-22 March 2019 Prices on the domestic market again declined in RUB expression but moved in different directions in USD expression. Meanwhile, the average milling wheat export price rose $4/MT to $228/MT FOB Black Sea, while purchase prices remained unchanged in RUB expr...
Ag Review - February 2019
WPI's monthly publication features analyses of U.S. agribusinesses, the U.S. farm equipment industry, the U.S. meat and livestock industry, the global outlook for farm inputs, and policy trends. It also provides a review of agribusiness stock prices along with expectations for future performanc...
Phoney Trade War; Stop the Phony War on Biotech; False Plan for Africa
Phoney Trade War In September 1939, Hitler’s army imposed the infamous blitzkrieg attack on Poland and, with the complicity of the Soviet Union, the nation was completely subdued in just over a month. Historically it is known as the start of WWII, but because a half-year passed before Hit...
Ag Review - November 2018
WPI's monthly publication features analyses of U.S. agribusiness, the U.S. soybean crushing complex, the U.S. meat and livestock industry, the global outlook for farm inputs, and policy trends. It also provides a review of agribusiness stock prices along with expectations for future performance...
Ag Review - October 2018
WPI's monthly publication features analyses of U.S. agribusiness, U.S. soybean marketing strategies, the U.S. biofuels industry, the global outlook for farm inputs, and policy trends. It also provides a review of agribusiness stock prices along with expectations for future performance...
Natural Gas and Fertilizer Outlook
With the cold weather season coming, natural gas storage is at long-term lows. The U.S. Energy Information Administration’s (EIA’s) October Short-Term Energy Outlook is forecasting natural gas inventories at 3,263 billion cubic feet (Bcf) by the end of the month. That would be the l...
Market Commentary
Corn and soybeans rallied Monday on news of the deal that brought Canada into what is now being called the U.S.-Mexico-Canada Agreement (USMCA), while wheat stayed closer to unchanged. Trade overnight found corn and soybeans correcting lower with wheat trading both sides before posting a small...
Ag Review - September 2018
WPI's monthly publication features analyses of the U.S. grain industry, U.S. soybean marketing strategies, the U.S. biofuels industry, the global outlook for farm inputs and equipment, and policy trends. It also provides a review of agribusiness stock prices along with expectations for future p...
Ag Review - July 2018
WPI's monthly publication features analyses of the U.S. grain industry, U.S. soybean marketing strategies, the U.S. biofuels industry, the global outlook for farm inputs and equipment, and policy trends. It also provides a review of agribusiness stock prices along with expectations for future p...
Indian Subcontinent Regional Analysis
Falling Rupee and Higher Input Costs Make Agriculture a Tough Choice Two developments that the government of India (GOI) had not anticipated are higher crude oil prices and the rupee falling against the U.S. dollar. In discussions with the U.S. regarding market access, India moved to impose saf...
Ag Review - June 2018
WPI's monthly publication features analyses of the U.S. grain industry, U.S. soybean marketing strategies, the U.S. meat industry, the global outlook for farm inputs, and policy trends. It also provides a review of agribusiness stock prices along with expectations for future performance...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MIDDLE EAST/MEDITERRANEAN COMMENTS Syria and Russia are said to be developing a shipping route between Tartus, Syria and Sebastopol, Crimea, mainly for the supply of grain to Syria but also for building materials. Syria will ship agricultural products to Sebastopol. “Rebe...
Ag Review - May 2018
WPI's monthly publication features analyses of the U.S. grain industry, U.S. soybean marketing strategies, the U.S. biofuels industry, the global outlook for farm inputs, and policy trends. It also provides a review of agribusiness stock prices along with expectations for future performance...
Ag Review - April 2018
WPI's monthly publication features analyses of the U.S. grain industry, U.S. soybean marketing strategies, the U.S. biofuels industry, the global outlook for farm inputs, and policy trends. It also provides a review of agribusiness stock prices along with expectations for future performance...
Ag Review - March 2018
WPI's monthly publication features analyses of the U.S. grain industry, U.S. soybean marketing strategies, the U.S. biofuels industry, the global outlook for farm inputs, and policy trends. It also provides a review of agribusiness stock prices along with expectations for future performance...
Oilseed Highlights: Soybean Rust; Argentine Weather and Soy Export Taxes; Monsanto
Growing Soybean Rust Problem in Parana Asian soybean rust can be a devastating pathogen if not adequately controlled, and agronomists in Brazil recommend that farmers spray their crop at least every two weeks as a preventative measure. However, dry periods are required for this process to be ef...
Ag Review - December 2017
2017 was an eventful year for the U.S. economy and the agricultural markets. 2018 promises to be just as interesting, although perhaps not as bullish. A few ag sectors look to continue patterns of the current year as the U.S. biofuels industry is under strong political influence. Meanwhil...
More Things to Keep You Up at Night
Soy complex prices eased a bit this week on better chances for precipitation across the driest parts of southern Brazil and Argentina over the next 10-14 days. Bob Kohlmeyer’s piece about La Nina and Argentine crop production (see Ag Perspectives, 14 December) explained the current situat...
Ag Review - November 2017
This month's look at the markets around the world. We have seen a lot of activity this month and things are looking up internationally. Check out this month's issue for more detail...
Friday
WPI provides a list of coming USDA reports that will have market-moving interest to our readers. Reports included in this list span those covering feed grains, wheat, oilseeds, livestock, and soft markets. Fri 11/03/2017 3:00 pm Latest U.S. Agricultural Trade Data ERS 3:00 pm Peanu...
Ag Review - October 2017
WPI's monthly publication featuring the following analysis in this issue: Biofuel’s Long Road Ahead U.S. Farm Profitability Outlook Changing Dynamics in Fertilizer Prices Global Trade’s Changing Winds...
Mob versus Science
Activists in Europe delivered more than the 1 million signatures required under the European Citizens’ Initiative to compel action on their demand to completely ban glyphosate. However, their petition involves an even bolder change than just banning a singular chemical: “We call on...
Middle East, Mediterranean and Africa Regional Analysis
Kenya is facing a maize shortage while Zambia faces oversupply with the inability to export. Meanwhile, Turkey is looking for a new customs union arrangement with the EU that will benefit both sides while Syria claims to import Russian wheat. Regional Updates MEDITERRANEAN/MIDDLE EAST COMMENTS...
Ag Review: Meat Exports and Macroeconomic Opportunities
WPI Agribusiness Subsector Outlook A brief review of WPI’s past Bull/Bear calls and industry stock price performance. WPI Bull/Bear Leanings for Agribusiness in 2017 A summary and graphical depictions of WPI’s expectations for future agribusiness performance. The U.S. Gr...
Middle East, Mediterranean and Africa Regional Analysis
USDA and other international agencies are working in Pakistan to address an issue with the wheat crop there. Meanwhile, a recent study indicates maize-producing countries in Africa could lose $2.2-5 billion per year due to yield loss caused by one particular pest. Regional Updates MIDDLE EAST/M...
Middle East, Mediterranean and Africa Regional Analysis
The Egyptian Company for Agriculture and Rural Development (ECARD), a government agency, will restart its contract growing program with the main focus on one particular crop. It is hoped that this effort will help substantially reduce the need for imported stocks. Regional Updates MIDDLE EAST/M...
Can Technology Play a Role in Organic Production?
This week the National Organic Standards Board discussed emerging ag production systems and their role in organic agriculture – just as they have since 2002.Ever-developing technology poses ever-changing questions about agriculture, policy and regulation. Consider the relatively new boom in ind...
Thoughts from a Montana Farmer
The spring wheat harvest is quickly winding down, and a large farmer from eastern Montana recently sent some comments about his crop and what he (and his neighbors) are thinking these days.The spring wheat harvest is quickly winding down. Last Monday’s weekly crop progress report showed it was...
Death’s Recovery; Reverse Engineering; Wrong Again; North Korea
European food makers are finding out what some American brands like Sunkist learned many years ago – the Chinese will steal the names of your products. Death’s Slow Recovery The “dead zone” in the Gulf of Mexico is the largest ever, creating a slew of media stories, and thus calls for action. A...
More Pain
The grain market news this week seemed to be full of more stories of financial woe and disappointment at the upper levels of the industry.The grain market news this week seemed to be full of more stories of financial woe and disappointment at the upper levels of the industry: CHS reports a thi...
Middle East, Mediterranean and Africa Regional Analysis
Kenyan farmers are saying that the extended duty-free maize import period will make large volumes of those low-cost stocks available when the local crop is harvested in September. They are also unhappy about the impact of a Kenya Food Reserve Agency decision. Regional Updates MIDDLE EAST/MEDITE...
Ag Review: Geopolitics and the Black Sea
WPI Agribusiness Subsector Outlook A brief review of WPI’s past Bull/Bear calls and industry stock price performance. WPI Bull/Bear Leanings for Agribusiness in 2017 A summary and graphical depictions of WPI’s expectations for future agribusiness performance. The U.S. Gr...
2016 Farm Income Numbers
A survey of one program's Red River Valley farm clients’ 2016 financial results provided some interesting points, but that data will likely be quite different in 2017.The North Dakota and Minnesota Farm Business Management Education program recently released a summary of its Red River Valley fa...
Oilseed Highlights: NOPA Soy Crush; U.S. Biodiesel Tax Credit; Sunseed Production in Bulgaria and Romania; Brazil’s Road Blockade
The EU Commission has issued its forecasts for sunseed production in Bulgaria and Romania, which indicate notable changes from 2016. Meanwhile, protestors last Friday lifted their blockade of Brazil’s BR-163 highway that had impacted port deliveries. NOPA Soy Crush Falls Below Trade Estimates T...
Indian Subcontinent Regional Analysis
As India rolls out its new Good and Services Tax (GST) starting 1 July 2017, the largest tax reform in quite some time is expected to possibly make Indian products competitive and cheaper in the long run. However, that may not be its impact on the agricultural sector. Methyl Bromide Fumigation...
Ag Review: U.S. Grains and the Weather Market
WPI Agribusiness Subsector Outlook A brief review of WPI’s past Bull/Bear calls and industry stock price performance. WPI Bull/Bear Leanings for Agribusiness in 2017 A summary and graphical depictions of WPI’s expectations for future agribusiness performance. The U.S. Gr...
Middle East, Mediterranean and Africa Regional Analysis
Turkey is seeking changes to its customs union with the EU. Industrial goods are currently covered, and there is talk of possibly adding agricultural products, which could affect its grain shipments from certain countries. Regional Updates MIDDLE EAST/MEDITERRANEAN COMMENTS Turkey is seeking ch...
Border Adjustment Tax Idea Is Fading
Two of the top leaders in Congress, the speaker and the House Ways and Means Committee chairman, are running into stiff opposition to their border adjustment tax.One of the major “American First” issues that emerged with the election of President Trump and from which he has since distanced hims...
Oilseed Highlights; Sunseed Production; New Palm Oil Varieties
The company SMART Tbk has developed two new clones of oil palms via conventional breeding techniques, and they have been shown to produce much higher yields. Ukraine and Russia Leaders in Sunseed Production While the U.S. has a significant sunflower seed sector, Russia and Ukraine are now the...
Oilseed Highlights: Brazil’s 2017/18 Soy Area Projection; Argentine Crush Capacity Expansion; India’s Vegoil Tariffs
While India's consumers are benefiting from more vegoil imports at lower prices, its farmers and processors find those low prices are making oilseeds unprofitable. As a result, they want the government to take certain action. Brazil’s Agriculture Ministry Expects Soy Area to Increase in 2017/18...
Middle East, Mediterranean and Africa Regional Analysis
The Zimbabwean government is pushing ahead with plans for mandatory food fortification beginning 1 June 2017, including maize and wheat flour. Millers are saying it is not possible to comply because of three significant factors. Regional Updates MIDDLE EAST/MEDITERRANEAN COMMENTS The month of R...
Mercosur Regional Analysis
Argentine farmer selling stands at around 20 percent of the crop. However, the market dried up after the Brazilian political scandal moved the CBOT lower. The lack of farmer selling is a problem for Argentina, but there is also another one. Soybeans Argentina Farmer selling stands at around 20...
Ag Review: China's Soyoil Problem
WPI Agribusiness Subsector Outlook A brief review of WPI’s past Bull/Bear calls and industry stock price performance. WPI Bull/Bear Leanings for Agribusiness in 2017 A summary and graphical depictions of WPI’s expectations for future agribusiness performance. The U.S. Gr...
Green Waste; NAFTA Nonsense; Chocolate; Stocks; Obvious
After ruling out imposing tariffs on ethanol imports from the U.S. due to concerns about retaliation, the Brazilian government will require that importers fulfill the same obligation (Resolution 67/2011) as domestic suppliers. Green Solution to Food Waste Some estimate that 70 percent of crops...
Rough Night in Jericho
Rough Night in Jericho is the name of an old western movie. As the title implies, things didn’t go as expected, and so it was with the wheat market this week.Rough Night in Jericho is the name of an old western movie. As the title implies, things didn’t go as expected, and so it was with the wh...
Mercosur Regional Analysis
Farmer selling of corn in Argentina is still very slow and centered on nearby delivery months as well as expensive versus FOB prices. Exporters are paying farmers a basis-equivalent of $0.70K (2,400 ARS), The main issue, though, is another matter. Soybeans Argentina The soybean harvest in Argen...
A New Month, A New Market
Funds increased all their short positions last week in the face of what looked like a bullish weather outlook over the weekend. While it will be several weeks or longer before the final effect of this weather event can be determined, there are a few certainties.Funds went home last Friday holdi...
Ag Review: Can Exports Save the Dairy Industry?
WPI Agribusiness Subsector Outlook WPI Bull/Bear Leanings for Agribusiness in 2017 A summary and graphical depictions of WPI’s expectations for future agribusiness performance. The U.S. Grain Industry Industry focus on divesting non-core business units will stabilize b...
Middle East, Mediterranean and Africa Regional Analysis
The MENA region has been the major destination for Black Sea wheat, but more of it is expected to flow elsewhere because of one development. Meanwhile, reports from Kenya indicate that maize imports from Mexico may not have the hoped-for effect there. Regional Updates MIDDLE EAST/MEDITERRANEAN...
Soybeans Move Further West and North
The westward movement of soybeans in the U.S. has been occurring for many years as hardier, shorter-season varieties have been developed. That is expected to continue as well as to the north with another significant variable also driving expansion of soybean planted area.Last Friday’s USDA Pros...
Black Sea Regional Analysis
Turkey's introduction of import duties on certain goods from Russia has driven the latter to a nearby, alternate source for sunflower oil. Meanwhile, Ukraine significantly increased its imports of nitrogen mineral fertilizers from Russia during January-February. Russian Grain Markets: 20-24 Mar...
Ag Review: 2017 Cow/Calf Profitabitiy Outlook
WPI Agribusiness Subsector OutlookWPI Bull/Bear Leanings for Agribusiness in 2017 A summary and graphical depictions of WPI’s expectations for future agribusiness performance. Wheat Market Risks and New Realities U.S. wheat’s declining global importance gave rise to ongoing battle f...
Middle East, Mediterranean and Africa Regional Analysis
A recent report in South Africa indicated that the poultry industry needs expanded production of feed maize and soybeans in order to help control prices. While the former is achievable, one factor makes it more difficult to boost soybean production. Regional Updates MIDDLE EAST/MEDITERRANEAN CO...
Ag Review: Farm Equipment Outlook 2017
2016 Agribusiness Performance Recap and 2017 OutlookWPI Bull/Bear Leanings for Agribusiness in 2017 A summary and graphical depictions of WPI’s expectations for future agribusiness performance. The U.S. Grains Industry Now, perhaps more than ever, the U.S. grain industry’s success i...
A Big One Falls
One of North Dakota’s largest farmers filed a Chapter 7 bankruptcy petition recently. Most will blame the collapse on the downturn in commodity prices. While that was certainly a major reason, there are many other contributing factors.One of North Dakota’s largest farmers filed a Chapter 7 bank...
Farm Balance Sheet Impact on Planting and the Farm Bill
What will continued low crop prices and debt accumulation mean for production and policy?Macroeconomic factors in 2016 (i.e., uneven global economic growth and shifting currency values) are still in play in 2017, according to USDA testimony at the House Agriculture Committee last week. Economic...
Middle East, Mediterranean and Africa Regional Analysis
The annual inflation rate in Egypt jumped to 24.3 percent in December, the highest it has been in seven years and more than double the 2015 level. This was largely due to a government action last year that also particularly affected grain prices. Regional Updates MIDDLE EAST/MEDITERRANEAN COMME...
Trump Ag Speaks; USAID Concerns; OECD Water
A Trump administration agriculture official addressed a meeting of private sector industry representatives today and made several notable points. Trump Ag Speaks A Trump administration agriculture official addressed a meeting of private sector industry representatives today and made several not...
First Year of Macri Ag Policies Leads to Argentine Natural Gas Boom
President Mauricio Macri began his efforts to encourage innovation in agriculture, increase exports and boost rural economies upon assuming office in December 2015. The resulting new demand for inputs is already impacting the country’s natural gas sector.In Washington, the House Ways and...
Middle East, Mediterranean and Africa Regional Analysis
Grain traders in Europe are saying that Germany, Poland and the Baltic states will be replacing France as the major exporters of wheat to North Africa and Saudi Arabia. Meanwhile, one African nation intends to procure white maize from Mexico as nearby supplies are not available. Regional Update...
Soybeans Rule
Rarely has there been a period of time in grain markets when one commodity has dominated the market action as soybeans recently have, both in terms of price and analysis.Rarely has there been a period of time in grain markets when one commodity has dominated the market action both in terms of p...
Indian Subcontinent Regional Analysis
Chickpeas are a popular source of protein in India. However, prices of the whole chickpea and the split dal (pulse) are on the rise. As a result, many consumers have shifted to one alternative. High Chickpea Prices Shift Demand to Yellow Peas Chickpeas are a popular source of protein in India...
Ag Review: The Exit of Commodities Bear Market?
WPI Bull/Bear Leanings for Agribusiness A summary and graphical depictions of WPI’s expectations for future agribusiness performance. The Flour Milling Industry Excellent operational management and hedging effectiveness are critical features of this historically low-margin business. Oilse...
Oilseed Highlights
An Argentine government proposal would require farmers to pay royalties on patented biotech seed for three years after the initial purchase, but the seed companies claim that is not sufficient time for them to recoup their costs. It now appears, though, that an agreement may be reached. Push to...
Mercosur Regional Analysis
While the soybean market in Argentina remains quiet with no trades last week, there was demand for June at +$0.18N but no sellers. Today demand is at +$0.08N for May and +$0.15N for June, although offers are still lacking so far. In Brazil, it is beginning to calm down after some weeks with str...
Middle East, Mediterranean and Africa Regional Analysis
Turkey has announced a new $4 billion agricultural subsidy program that will cover 19 strategic crops. However, production of one in particular is nevertheless expected to drop because of a certain factor, and USDA is forecasting that the country may have to import stocks in 2017 as a result. R...
Mercosur Regional Analysis
It is too early to determine whether Argentina will have sufficient 12 percent protein wheat to fulfill the contracts already made. The lack of demand for lower quality wheat is pressuring those prices and giving reasons for exporters to defend prices of the higher quality stocks, resulting in...
Oilseed Highlights
USDA recently released its annual long-term projections for major crops, and those for soybeans can be justifiably challenged for several reasons. USDA’s Long-Term Soybean Yield Projections Too Conservative USDA recently released its annual long-term projections for major crops, including soybe...
Middle East, Mediterranean and Africa Regional Analysis
In light of recent action taken by Egypt's government regarding a certain tax together with the need to purchase feed ingredients, medicines, etc. from outside the country, the local poultry industry there says that it will have difficulty competing price-wise with imported chicken. Regio...
Natural Gas Overview
Warmer winter weather last year and to date this year is driving higher-than-normal natural gas storage inventories despite demand from the power sector, and two developments may put even more of it on the market to the benefit of the agricultural and fertilizer sectors as well as others.Domest...
Transitional Crops; Dead Zone Policy; Huge Conspiracy
The Organic and Non-GMO Forum this week highlighted the conundrum hitting U.S. farmers as consumers change their preferences. However, a new farm bill initiative may attempt to help address some of the issues. Transitional Crops The Organic and Non-GMO Forum this week highlighted the conundrum...
Indian Subcontinent Regional Analysis
India's recent move against the country's old currency notes is having a profound effect on farmers who bring their produce to market as well as truckers transporting perishable goods. Meanwhile, GOI has taken a step to strongly incentivize the production of more food grains. 2016/17 Rabi...
Oilseed Highlights
Brazil’s biodiesel production is forecast to change notably in 2017, based partially on a revision to the required blending level for biodiesel with petroleum diesel that is to be implemented in the first quarter. U.S. Soymeal Export Sales Up Last Week (None to Europe) Today’s USDA export...
Ag Review: Agribusiness Margins in the Face of Uncertainty
WPI Bull/Bear Leanings for Agribusiness A summary and graphical depictions of WPI’s expectations for future agribusiness performance. The Grain Industry Low prices are leading farmers to pursue cost-cutting decisions. In turn, this will pressure margins at all levels of the farm economy,...
Middle East, Mediterranean and Africa Regional Analysis
Egypt has set up a new wheat import inspection system that seems to be giving some confidence to traders and tender participants. It will be under the authority of the General Organization for Export and Import Control (GOEIC,) which has an alternative way to conduct the inspections. Regional U...
Oilseed Highlights
The All India Poultry Exporters Association wants the government to either ban the importation of chicken meat produced with biotech feed ingredients or allow Indian farmers to plant the more productive biotech soybeans and corn. Soy Export Tax Rebate for Northern Argentina Likely to Have Littl...
Oilseed Highlights
U.S. farmers are in the process of harvesting the largest soybean crop ever along with a record yield. In many states, they are seeing yields far above average and delivering more than normal volumes of soybeans directly to elevators and processing facilities. In turn, this is impacting basis l...
Ag Review: Industry Insights and Outlook for Q4 2016
The Grain Industry Farmland values have been among the last to experience the impact of low commodity prices, but the downward pressure has now begun. Oilseed Processing Several factors appear to be converging for the benefit of exporters and processors of U.S. soybeans as well as the livestock...
Policy and Technology
Much the way Washington and Brussels help their respective main aircraft builders, Boeing and Airbus, the EU and the U.S. subsidize their respective agriculture sectors, albeit in very different ways.Much the way Washington and Brussels help their respective main aircraft builders, Boeing and A...
Fracking and Farming; Wasted Effort; Megafarms
Opponents key in on two or three generalized arguments against it, but there are dozens of specific outcomes of the TPP that are better than the status quo for most Americans. There is also a more effective way to garner support. Fracking and Farming Just as high prices and technology enabled A...
Middle East, Mediterranean and Africa Regional Analysis
Kenya reports that local maize and maize meal prices are dropping slightly as the local harvest has boosted supplies. However, maize imports are still needed despite those plentiful local stocks, and the government specified a significant volume that will need to be imported as the year progres...
Oilseed Highlights
The aquaculture sector has long relied heavily on fish meal as a prime source of protein in its feeds. The supply is decreasing, however, so it will need to find ways to use higher levels of an alternative if the industry is to continue expanding. Chinese Agency’s Soybean Import Forecast The Ch...
Ag Mergers Impact Washington’s K Street
Lower crop prices and farm income together with pressure for new products are leading to a wave of consolidation in the ag sector. One of the little-discussed, major implications of this will be the effect on the K Street lobbying corridor in the nation’s capital.Lower crop prices and farm inco...
Mercosur Regional Analysis
Buyers returned to the Brazilian soybean market after a prolonged, especially quiet period. February shipments traded several times at $1.54-1.55 over March CBOT futures, but the market has otherwise traded more actively in the far deferred positions. Demand was primarily coming from China for...
Middle East, Mediterranean and Africa Regional Analysis
A recent GMO report notes that only three countries in Sub-Saharan Africa allow biotech crops, although eight other African countries are conducting fields trials. Various varieties of drought-tolerant maize have been developed with one particular type planted in South Africa this year. Regiona...
Oilseed Highlights
The average forecast of analysts queried by Reuters is for Brazil to produce a record 103.1 MMT of soybeans in 2017. This is clearly a possibility if the country has good weather in the growing season. However, it is far from being a certainty for several reasons. Canadian Canola Stocks Larger...
New Year’s Eve for U.S. Corn and Soybeans
31 August is effectively New Year’s Eve for U.S. corn and soybeans as their 2016/17 crop year officially begins tomorrow. While it is doubtful that many involved in the U.S. grain and soy marketing chain will be engaging in celebrations today, the situation may not be as bleak as it might appea...
TPP Officially Dead; Slippery Slope; Energy Crops
Beef cattle catch a lot of grief for their land and water requirements, but a recent USDA analysis shows them to be a relative energy bargain. TPP Officially Dead The Trans-Pacific Partnership (TPP) has been dead for a long time, but U.S. Senate Majority Leader Mitch McConnell (R-Kentucky) fina...
Oilseed Highlights
Brazilian fertilizer companies are being challenged this year by a shortage of trucks amidst rising demand. This has driven up the cost of transporting the goods by about 35 percent and doubled it for some routes. However, this is benefitting one group. Stats Canada’s Surprising August Canola C...
Middle East, Mediterranean and Africa Regional Analysis
The ”smart-card” system in Egypt for subsidized food, including bread, is being moved to the control of the military production agency from the ministry of supply. The government says that the switch will have two notable effects. Regional Updates MIDDLE EAST/MEDITERRANEAN COMMENTS There is goo...
Middle East, Mediterranean and Africa Regional Analysis
Recent analysis of maize cereals and flour in Tanzania have shown very high levels of aflatoxin, but the government claims a different cause of the reported death and illness there. Meanwhile, DuPont’s Pioneer seed division has announced it is expanding one of its programs to that country. Regi...
Farmland Economics
USDA’s National Agricultural Statistics Service (NASS) has released its annual survey results on farmland values and cash rents, which indicate some changes of interest.During the first week of August every year, USDA’s National Agricultural Statistics Service (NASS) releases its survey results...
North American Carbon Reduction: A Tale of Two Nations
A carbon tax was the concept behind President Obama’s cap and trade proposal that was ultimately abandoned early in his first term. In Canada, meanwhile, Environment Minister Catherine McKenna announced that the country will set a price on carbon emissions by the end of this year.The Obama Whit...
Farm Income Problems and What to Do
Low prices and weak or no profits are spurring a resurgence in marketing interest among farmers, and there are several steps that each can take.There have been numerous media stories on the poor financial outlook for farmers because of the current low price environment (see http://www.startribu...
Productivity; People; Marketing
Like Europe, U.S. use of inputs like fertilizer slowed as genetics and technology increased in their role in production. The difference is that U.S. agricultural productivity will see substantially differernt gains in the years ahead. Partial Productivity HFFA Research completed a study for the...
Oilseed Highlights
Compared with 2014/15, this year’s volume of U.S. soymeal exports has not been very good. However, it would be even worse if not for the big increase to two particular markets. Separately, the current ship lineup in the Gulf for soybean loadings could be indicative of how those exports finish i...
Oilseed Highlights
It has been Vietnam’s rapidly increasing demand for pork, poultry meat and farm-raised fish that has driven the quick growth in demand for soymeal, corn and other feed ingredients. While domestic feed mills exist or are being constructed, a high volume of imports are essential. Big Increase in...
China Drives Pork Expansion
While pork exports are down 6 percent from last year based on slower slaughter, those to China and Hong Kong increased notably during January-May with additional growth expected. As a result, steps are being taken to expand production. China Drives Pork Expansion Two pork-packing plants are und...
Middle East, Mediterranean and Africa Regional Analysis
According to reports in Egypt, the price for local poultry, the main consumers of corn and soymeal, has grown 25 percent in recent weeks. While some sources are blaming this on the higher cost of imported grains and protein meals, others maintain that the reason is a drop in production. Regiona...
Oilseed Highlights
Although India expects to produce a larger soybean crop in 2016, its protein meal exports continued to drop in May as a lack of supply and high prices made its soymeal noncompetitive. Meanwhile, its high soybean prices are benefiting another country. India’s Protein Meal Exports Continue to Dec...
Indian Subcontinent Regional Analysis
The Cabinet Committee on Economic Affairs (CECA) has approved an increase in the Minimum Support Prices (MSPs) for all 2016/17 kharif crops. While pulses have been given a bonus for many years as an incentive, such payment is now also being extended to oilseeds this year. MSPs for Key Crops Inc...
Black Sea Regional Analysis
Russia's domestic grain prices continued to rise due to the decreasing stocks and offers of the 2015 production. However, barley prices started dropping significantly in the South where the winter crop harvest will soon start and boost supplies. Russian Grain Markets Market Trends: 23-27...
Mercosur Regional Analysis
Brazil’s soybean market keeps heating up with the basis showing a regular daily increase as the old crop offer is being reduced due to the very negative origination margins. The issue is that this origin is well above FOB trading levels, making it very difficult for exporters to obtain stocks f...
Oilseed Highlights
The rich countries of Europe along with some developing nations in Asia and Africa continue to oppose the planting, and in some cases the consumption, of GMOs due to supposed fear that they may ultimately prove to be harmful to human health or the environment. However, that clearly does not see...
Middle East, Mediterranean and Africa Regional Analysis
For the past few years, Egypt has been one of the top two importers of U.S. 60 percent protein corn gluten meal (CGM). However, the sudden rally in those prices has created difficulties for feed producers there, causing them to look more closely at alternatives. Regional Updates MIDDLE EAST/MED...
Farm Dust; New Rules; Pick a Veep
NASA has combined with Columbia University to produce a study (Geophysical Research Letters), which claims that fine particulate matter from food production creates as much PM2.5 pollution as all other human activities combined. Regulating Farm Dust U.S. EPA fought back hard against charges a f...
Southeast Europe Regional Analysis
France’s exports to non-EU destinations have significantly increased during the last month as its wheat is competitive against Black Sea origins. Algeria bought 500,000 MT of it last week, paying $187-188 for July shipment. Milling Wheat The weather in Russia and Ukraine is excellent for the wh...
Middle East, Mediterranean and Africa Regional Analysis
U.S. corn exports to North Africa/Africa in the first quarter of 2016 are down 75 percent versus 2015, mainly due to reduced business with Algeria, Morocco and Egypt. However, those to the Middle East are up strongly from last year because of a 50 percent increase in shipments to Saudi Arabia...
Middle East, Mediterranean and Africa Regional Analysis
Egypt reports that it has purchased approximately 57,000 MT of local wheat in the first 10 days of buying against a target of 4 MMT by 31 July 2016. However, wheat farmers are complaining that the government is refusing to buy some stocks due to one particular issue. Regional Updates MIDDLE EAS...
Middle East, Mediterranean and Africa Regional Analysis
Italy is looking at three zone developments related to agricultural logistics in Egypt with one project for wheat and grain said to be likely in the Red Sea area at Beni Suef, 120 kilometers south of Cairo. The other two are for fruit, vegetable and sugar logistics. It also has another grain-re...
U.S. Trade Policy; China GMO Policy
The U.S. trade deficit is growing worse as the U.S. dollar stays strong and the economy stands out from many others. This trend will eventually feed back into presidential campaign politics and the anti-Trans-Pacific Partnership (TPP) rhetoric. Fixing U.S. Trade Policy The U.S. trade deficit is...
Southeast Europe Regional Analysis
Bulgaria has been officially added to the list of potential suppliers in the GASC tenders, which is good news for the country’s milling wheat farmers. However, there is one challenge to any such sales. Milling Wheat The Black sea market remained quiet last week. The offers for Ukrainian and Rus...
Oilseed Highlights
The Genetic Engineering Appraisal Committee (GEAC), the government of India’s regulator responsible for issuing clearances for field trials of GM crops and import/export of GM seeds, has deferred permits to import biotech soymeal and DDGS this year. Argentine Corn, Wheat and Sunflower Plantings...
Tough Time to Make a Profit
There’s no question that big profits were made during the boom times and balance sheets looked wonderful. The problem is that money is now going out the door at an alarming rate, and those balance sheets can change quickly in this environment.It was easy to make money in the grain business from...
Middle East, Mediterranean and Africa Regional Analysis
Egypt reports that current wheat supplies are sufficient until July 2016 and that it is planning to purchase 4-4.5 MMT of local stocks during the April-July harvest. Meanwhile, the ergot situation remains unresolved as the government and the FAO analyze/review standards. Regional Updates...
Argentina Will Take Years to Recover
It is easy to see the damage the policies of the Kirchner government have inflicted on the Argentine agricultural sector. The heretofore large export taxes starved it of capital. Most farmers have not been able to make the investments they need in equipment, fertilizers, conservation, agrichemi...
Ag Review: Opportunities in the Philippines
Sorting Through the Hazards With over 100 million people and an investment grade rating, the Philippines is an important player in the global agricultural market. The Philippines: Helping Tear Down the Blendwall Limits for Ethanol The Philippines is the second-largest and fastest-growing market...
Continuing Pressure on the Short Side of Wheat
One of the important misconceptions regarding the wheat market today is that prices are low because world demand has slowed. This is simply not true by any measurement.There has been no letup in the beating down of the wheat market. The super strong U.S. dollar and adequate supplies among the w...
Indian Subcontinent Regional Analysis
India’s 2016/17 union budget was released and has been hailed as rural-centric with an emphasis on agricultural growth and sustainability. When the Modi government took office, the clear message was to “grow more from less,” which this budget aims to fulfill. 2016/17 Union Budget and Agricultur...
More On the Outlook Forum Numbers
The acreage numbers used weren’t surprising. The talk over most of the winter has been that U.S. farmers want to plant more corn. There might be some external factors, though, that hold corn acres closer to unchanged from 2015 than up 2 million acres.Thank goodness for the USDA’s Outlook Forum...
Black Sea Regional Analysis
Ukraine's domestic milling wheat, feed wheat and feed barley prices all increased during 15-19 February as a result of the weakening national currency and limited offer. However, milling rye prices were stable with producers' offer prices starting at $125/MT EXW. Russian Grain Marke...
Market Commentary
Soybean futures responded to the sharp gains in crude and financial markets, trading 8-9 higher at mid-morning before weakening towards noon. Meanwhile, corn bounced with the soy complex. General Comments Markets opened Sunday evening little changed from last Friday’s closes, but crude oil rall...
More Things to Keep You Up at Night
Lentils are now trading at record high prices with peas expected to follow. These high old crop prices and relatively strong new crop prices will have an impact on the number of pulse acres in western Canada as well as parts of Montana and North Dakota. The El Nino Winter The El Nino winter is...
Ag Review: Big Data
From Cold War to Farms Big data got a slow start in agriculture and many fear some of the outcomes it offers, but opportunity is certainly one of them. Linking Big Data to Production Data analytics changed the way baseball is played; how can the agriculture and food sectors follow that path? Te...
TPP; China Acquisitions; Countercyclical; VW
The TPP agreement was signed this week in New Zealand, and some ministers proclaimed that they would not wait for the Americans before pushing it through the ratification process in their own countries. However, developments in Washington might give them pause. Renegotiating TPP The Trans-Pacif...
Oilseed Highlights
The U.S. biodiesel industry has renewed its efforts to convince Congress to change the recipients of the current $1/gallon biodiesel tax credit from blenders to producers. This is intended to prevent the credit from going to those blending imported biodiesel and thereby encouraging those import...
Natural Gas Consumption and Price Up
EIA reported this week that marketed natural gas in 2015 was priced 6 percent higher on average than 2014 levels, while it also has projected that consumption will continue to increase. Most of that growth is due to one particular usage relevant to agriculture.Back in September, we report...
More Things to Keep You Up at Night
The bearish psychology that has blanketed agricultural markets for many months has masked a significant developing story. That story is the severe drought that has encompassed South Africa and its neighboring countries for several months, impacting a significant crop. Drought Impacts Southern A...
Middle East, Mediterranean and Africa Regional Analysis
Israel and Turkey are reported by Ukraine to be in discussions regarding FTAs that would cover its grains, oilseeds and agricultural equipment along with fruits and vegetable from those two countries. There is an additional expected benefit to all three nations if these are enacted. Regional Up...
Crop Budget
The crop budget worksheets are of course only estimates, and virtually every producer will have a different set of numbers. Yields are always the key factor in these types of profit/loss exercises.As mentioned in Monday’s analysis, many of the university extension services now have 2016 crop bu...
Indian Subcontinent Regional Analysis
GOI is permitting PEC Limited, a State Trading Enterprise (STE), to import 500,000 MT of corn for poultry feed and starch manufacturers under the tariff-rate quota (TRQ). This would be the first corn imports in 16 years, but India’s zero tolerance of GMOs is likely to restrict the origins...
Dietary Guidelines Released
Today the U.S. Departments of Agriculture and Health and Human Services jointly released the 2015-2020 Dietary Guidelines for Americans. At the time of the original draft in late 2014, it was not clear that lean meat would be among the recommended protein foods. Dietary Guidelines Released Toda...
Middle East, Mediterranean and Africa Regional Analysis
It is reported that fewer than half of the maize plantings in South Africa have been completed due to the severe drought. With yellow maize prices up about 30 percent in recent days and 82 percent on the year, livestock farmers and dairy producers are warning that their meat, egg and dairy prod...
Input Costs – Natural Gas
While grains were 19 percent lower on the S&P Goldman Sachs Commodity Index (GSCI), energy was down 41 percent. However, there may be a silver lining to this commodity cloud going into 2016.Commodities as an asset class experienced another bear year in 2015 with all six sectors (precious me...
Oilseed Highlights
As a result of recent policy changes by the Argentine government, farmers are now expected to double wheat plantings in the next growing season and corn plantings over the next few years. Argentina Eliminates Export Permits for Grains and Oilseeds The Argentine government published a decree on...
Feast or Famine
The COVID supply chain meltdown created anxiety over the availability of agricultural inputs. This compelled many operators to look forward and lock in their needs for 2023, often at elevated prices. This buy-high insurance marker has been met with ammonia prices that have now fallen by 50 perc...
Similarities of Farming and Manufacturing
Debate around the reauthorization of the U.S. farm bill is focused on the legislation’s two major functions, domestic food assistance and farm price supports. The former involves Republicans trying to reduce the most generous portions of what amounts to 81 percent of farm bill spending, a...
Black Sea Grain Initiative: One and Done?
The uncertainty that Russia’s invasion has brought to agricultural markets continues. Roughly 32.9 MMT of grain has been exported from Ukraine since the Black Sea Grain Initiative (BSGI) began in July 2022. Russia refused to extend it Monday, siting the continued sanctions that target Rus...
Green Deal Strategies
It has been a year since the EU released its plan for halving the use of pesticide and slashing fertilizer use and the debate over it is evolving. The farming lobby has stiffened its spine with the Dutch government backing away from some of its strident demands, and now agriculture members of t...
Climate Change and Farm Bill
During the farm bill reauthorization this year, farmers want to protect their support programs including crop insurance. By contrast, environmentalists want to see a stronger emphasis on conservation. American Farmland Trust is an organization focused on preserving farms, farmland and promoting...
USA Land Use Changes
The acres used for crops in the U.S. peaked in 1981 when farm income was low and farmers tried to make up for it by expanding production. The acres used for crops in 2022 was 14.7 percent fewer and the share of cropland successfully harvested had risen slightly to 85 percent. While the n...
AMLO Spits on U.S. Corn; Sovereign Right to EV’s; Green Fertilizer Dreams
AMLO Spits on U.S. Corn If there were any doubts in the U.S. government about Mexico’s intent about GMO corn, President Andrés Manuel López Obrador cleared up their unwarranted confusion. He said Mexico could not buy GMO corn because there is no evidence it is safe. In a Tru...
Fertilizer: No Room for Error
There are a lot of uncertainties in the market and ranging from the political like the war, to the mundane such as weather. One variable front and center is fertilizer. It is both essential to crop production, and an environmental externality. The goal of reducing its use has come squarely conf...
Fertilizer Crisis
Fortunately, Hurricane Ian did not adversely impact Florida’s production of phosphate for crop production, but nitrogen remains a major supply concern. This is especially true in Europe where limited natural gas supplies will be focused on winter heating needs and maintaining industrial o...
South America’s Fertilizer Situation
Rabobank reports that fertilizer supplies will improve in 2023 with downward pressure on phosphate and potash prices, but nitrogen may see a 20-30 percent price hike. This is an important competitiveness factor for agricultural exporters. North and South America both have abundant supplies of p...
Green Food Crisis; Geopolitical Collusion
Green Food Crisis Regardless of the war in Ukraine and a global food price shock, the EU is moving forward with its plan to cut by half the use of “risky” pesticides by 2030. The goal is to replace them with “safe and sustainable alternatives.” For some, it looks like ad...
War on Energy and Food
While the price of Brent crude is up 12 percent since Friday, fertilizer has increased 33 percent. Fertilizer values are priced to energy but now seem to be outpacing it. Crop nutrients have been hit by a trifecta of higher energy input costs, soaring demand and low supplies. Agricultural commo...
Getting Away with It; On Message, Out of Tune; Its Complicated
Getting Away with It The threats of sanctions did not deter Vladimir Putin’s invasion of Ukraine and there is no reason to believe their implementation will now reverse the situation. The aggression has created much for the transatlantic alliance to ponder. First and foremost is China, wh...
Eye on Weather for 2022 Considering Fertilizer Prices
There has been much discussion and focus on the weather conditions in South America, and Brazil in particular where it has been dry across the central and southern parts of the country. Heavy rains are also causing crop loss in some of the northern areas. The forecast is for more La Nina effect...
Africa Already Green
Changes in Chemical Usage
The U.S./Canada and Europe have increased pesticide usage only slightly over the past two decades whereas South America’s usage has grown by almost 120 percent. Africa’s pesticide usage in agriculture has grown by nearly 69 percent, but from a very small base. Asia is the dominant a...
Worsening Food Prices
Key agricultural commodity prices have risen sharply over the past two years, some reaching their highest level in a decade (see graph below). Now the UN says that climate change could cause production to fall 30 percent at the same time food demand is forecast to rise by 50 percent. The cautio...
No N, No GMO, No Food
Some environmentalists were aghast at the COP26 meeting when mega-billionaire and serial do-gooder Bill Gates described nitrogen fertilizer as “magical” and opined that, “to grow crops, you want tons of nitrogen.” They called nitrogen fertilizer a major cause of greenhou...
Tech City on a Hill; Distance Warms Heart
Tech City on a Hill Some nationalistic political philosophers like to characterize the U.S. as a beacon of hope for democratic ideals and while some will say this has come to pass, it does offer hope to technologists. The proof was today’s House Agriculture Committee hearing on how to boo...
Notable TFP Changes
U.S. Secretary for Agriculture Tom Vilsack and EU Agriculture Commissioner Janusz Wojciechowski will be on the stage together next week at the Forum for the Future of Agriculture & Farm Europe. Mr. Vilsack has taken the position that increasing productivity is the pathway to sustainability...
High-Cost Energy/Ag Inputs Forecast
The U.S. Energy Information Administration (EIA) released its winter fuels outlook last week, forecasting rising prices for several key agricultural inputs. First, natural gas will continue pushing up nitrogen fertilizer prices. While there are a number of factors at play in fertil...
F2F Proxy; Rolling Inflation; Selective View of Tensions
F2F Proxy Greens in Europe have been downplaying the impact on production from reduced use of inputs, arguing that studies showing lower production are flawed. Whether the use of inputs like fertilizer are reduced due to government restrictions on use (F2F) or tempered by record high prices, th...
Technical Views - Retrace Lower
SPREADS Dec crush trades to 88c/bu while oilshare trades at 45.0%. Dec/March corn trades out to 8c from 7c, while Dec 21/22 trades from 23 1/2c carry to 20 3/4c. Dec/March wheat carry trades from 10 1/2c to 11c. Dec wheat/corn trades from 1.86 1/4c to 1.83c. Nov/Jan bean...
Fertilizer Prices and Production
DTN reports that for the first time in about nine months there was no significant increase in fertilizer prices this past month. Among the eight major components, prices have risen between 36 percent to a 76 percent increase for MAP. Higher crop prices have meant higher farm revenue and increas...
GMO Tipping Point; One-Way Ethanol; Opium or Food?
GMO Tipping Point They do not call it genetic modification because of all the negative baggage associated with the first wave of organisms modified to be better. The technologies that have evolved from originally inserting a gene into DNA instead have a trendier moniker, new genomic techniques...
EO “Attempts” Competitive Ag Economy
Much of the Biden Administration’s agriculture agenda was furthered today by an Executive Order (EO) issued from the White House while Secretary Vilsack was in Council Bluffs, Iowa, to tout the plan. The order to Promote Competition in the American Economy is a broad reaching effort...
CPTPP Appeal; Food Opponents; TRIPS for Free
CPTPP Appeal China’s aggressive effort to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) may be having an unintended effect – causing the U.S. to reconsider its previous rejection of such an agreement. If China were to join, which seems unlike...
AM Outlook - Overbought?
GOOD MORNING, Prices are higher across the board this morning as beans and soyoil place new contract highs for the week, continuing strong up-trends. Crude oil is firmer, which underpins the soyoil market, though Asian values are a bit lower this AM. Higher world vegoil markets in t...
Exporting Water
The latest mantra from development specialists is concern about the future availability of water. It is an old topic but a durable one given the preciousness of the resource. Since 70 percent of the withdrawals of freshwater around the world are for agriculture, and 60 percent more food must be...
Green on Black Equals Red; Fake Honey
Green Impact on Black Equals Red Activists in Europe are protesting against today’s “Black Friday” shopping extravaganza. They argue that the environmental externalities of consumerism will destroy the planet. This begs the question of whether commercial minimalism will destro...
Technical Views - Meal Correction Upwards
SPREADS September KC/Chicago spreads moved to new contract lows yesterday. KC wheat/corn spreads moved back to levels conducive to putting HRW back into feed. October crush firms to 1.07c/bu while oilshare firms to new highs at 33 percent. Dec/March corn trades from 10c...
Market Commentary
Weather forecasts run yesterday afternoon and evening continue to show a drying trend across the Corn Belt, which led futures lower overnight. The worst of the planting-delaying weather seems to be over, and fresh forecasts are broadly encouraging. Overnight pressure also came from news that ho...
Market Commentary
Overnight trade featured prices on both sides of unchanged in heavy volume (well, heavy for an overnight session). Corn attempted to break below yesterday’s low but failed, which brought more buying heading into the morning. At the close, corn, soybean and wheat futures were all higher. T...
Black Sea Regional Analysis
Russian Grain Markets: 18-22 March 2019 Prices on the domestic market again declined in RUB expression but moved in different directions in USD expression. Meanwhile, the average milling wheat export price rose $4/MT to $228/MT FOB Black Sea, while purchase prices remained unchanged in RUB expr...
Ag Review - February 2019
WPI's monthly publication features analyses of U.S. agribusinesses, the U.S. farm equipment industry, the U.S. meat and livestock industry, the global outlook for farm inputs, and policy trends. It also provides a review of agribusiness stock prices along with expectations for future performanc...
Phoney Trade War; Stop the Phony War on Biotech; False Plan for Africa
Phoney Trade War In September 1939, Hitler’s army imposed the infamous blitzkrieg attack on Poland and, with the complicity of the Soviet Union, the nation was completely subdued in just over a month. Historically it is known as the start of WWII, but because a half-year passed before Hit...
Ag Review - November 2018
WPI's monthly publication features analyses of U.S. agribusiness, the U.S. soybean crushing complex, the U.S. meat and livestock industry, the global outlook for farm inputs, and policy trends. It also provides a review of agribusiness stock prices along with expectations for future performance...
Ag Review - October 2018
WPI's monthly publication features analyses of U.S. agribusiness, U.S. soybean marketing strategies, the U.S. biofuels industry, the global outlook for farm inputs, and policy trends. It also provides a review of agribusiness stock prices along with expectations for future performance...
Natural Gas and Fertilizer Outlook
With the cold weather season coming, natural gas storage is at long-term lows. The U.S. Energy Information Administration’s (EIA’s) October Short-Term Energy Outlook is forecasting natural gas inventories at 3,263 billion cubic feet (Bcf) by the end of the month. That would be the l...
Market Commentary
Corn and soybeans rallied Monday on news of the deal that brought Canada into what is now being called the U.S.-Mexico-Canada Agreement (USMCA), while wheat stayed closer to unchanged. Trade overnight found corn and soybeans correcting lower with wheat trading both sides before posting a small...
Ag Review - September 2018
WPI's monthly publication features analyses of the U.S. grain industry, U.S. soybean marketing strategies, the U.S. biofuels industry, the global outlook for farm inputs and equipment, and policy trends. It also provides a review of agribusiness stock prices along with expectations for future p...
Ag Review - July 2018
WPI's monthly publication features analyses of the U.S. grain industry, U.S. soybean marketing strategies, the U.S. biofuels industry, the global outlook for farm inputs and equipment, and policy trends. It also provides a review of agribusiness stock prices along with expectations for future p...
Indian Subcontinent Regional Analysis
Falling Rupee and Higher Input Costs Make Agriculture a Tough Choice Two developments that the government of India (GOI) had not anticipated are higher crude oil prices and the rupee falling against the U.S. dollar. In discussions with the U.S. regarding market access, India moved to impose saf...
Ag Review - June 2018
WPI's monthly publication features analyses of the U.S. grain industry, U.S. soybean marketing strategies, the U.S. meat industry, the global outlook for farm inputs, and policy trends. It also provides a review of agribusiness stock prices along with expectations for future performance...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MIDDLE EAST/MEDITERRANEAN COMMENTS Syria and Russia are said to be developing a shipping route between Tartus, Syria and Sebastopol, Crimea, mainly for the supply of grain to Syria but also for building materials. Syria will ship agricultural products to Sebastopol. “Rebe...
Ag Review - May 2018
WPI's monthly publication features analyses of the U.S. grain industry, U.S. soybean marketing strategies, the U.S. biofuels industry, the global outlook for farm inputs, and policy trends. It also provides a review of agribusiness stock prices along with expectations for future performance...
Ag Review - April 2018
WPI's monthly publication features analyses of the U.S. grain industry, U.S. soybean marketing strategies, the U.S. biofuels industry, the global outlook for farm inputs, and policy trends. It also provides a review of agribusiness stock prices along with expectations for future performance...
Ag Review - March 2018
WPI's monthly publication features analyses of the U.S. grain industry, U.S. soybean marketing strategies, the U.S. biofuels industry, the global outlook for farm inputs, and policy trends. It also provides a review of agribusiness stock prices along with expectations for future performance...
Oilseed Highlights: Soybean Rust; Argentine Weather and Soy Export Taxes; Monsanto
Growing Soybean Rust Problem in Parana Asian soybean rust can be a devastating pathogen if not adequately controlled, and agronomists in Brazil recommend that farmers spray their crop at least every two weeks as a preventative measure. However, dry periods are required for this process to be ef...
Ag Review - December 2017
2017 was an eventful year for the U.S. economy and the agricultural markets. 2018 promises to be just as interesting, although perhaps not as bullish. A few ag sectors look to continue patterns of the current year as the U.S. biofuels industry is under strong political influence. Meanwhil...
More Things to Keep You Up at Night
Soy complex prices eased a bit this week on better chances for precipitation across the driest parts of southern Brazil and Argentina over the next 10-14 days. Bob Kohlmeyer’s piece about La Nina and Argentine crop production (see Ag Perspectives, 14 December) explained the current situat...
Ag Review - November 2017
This month's look at the markets around the world. We have seen a lot of activity this month and things are looking up internationally. Check out this month's issue for more detail...
Friday
WPI provides a list of coming USDA reports that will have market-moving interest to our readers. Reports included in this list span those covering feed grains, wheat, oilseeds, livestock, and soft markets. Fri 11/03/2017 3:00 pm Latest U.S. Agricultural Trade Data ERS 3:00 pm Peanu...
Ag Review - October 2017
WPI's monthly publication featuring the following analysis in this issue: Biofuel’s Long Road Ahead U.S. Farm Profitability Outlook Changing Dynamics in Fertilizer Prices Global Trade’s Changing Winds...
Mob versus Science
Activists in Europe delivered more than the 1 million signatures required under the European Citizens’ Initiative to compel action on their demand to completely ban glyphosate. However, their petition involves an even bolder change than just banning a singular chemical: “We call on...
Middle East, Mediterranean and Africa Regional Analysis
Kenya is facing a maize shortage while Zambia faces oversupply with the inability to export. Meanwhile, Turkey is looking for a new customs union arrangement with the EU that will benefit both sides while Syria claims to import Russian wheat. Regional Updates MEDITERRANEAN/MIDDLE EAST COMMENTS...
Ag Review: Meat Exports and Macroeconomic Opportunities
WPI Agribusiness Subsector Outlook A brief review of WPI’s past Bull/Bear calls and industry stock price performance. WPI Bull/Bear Leanings for Agribusiness in 2017 A summary and graphical depictions of WPI’s expectations for future agribusiness performance. The U.S. Gr...
Middle East, Mediterranean and Africa Regional Analysis
USDA and other international agencies are working in Pakistan to address an issue with the wheat crop there. Meanwhile, a recent study indicates maize-producing countries in Africa could lose $2.2-5 billion per year due to yield loss caused by one particular pest. Regional Updates MIDDLE EAST/M...
Middle East, Mediterranean and Africa Regional Analysis
The Egyptian Company for Agriculture and Rural Development (ECARD), a government agency, will restart its contract growing program with the main focus on one particular crop. It is hoped that this effort will help substantially reduce the need for imported stocks. Regional Updates MIDDLE EAST/M...
Can Technology Play a Role in Organic Production?
This week the National Organic Standards Board discussed emerging ag production systems and their role in organic agriculture – just as they have since 2002.Ever-developing technology poses ever-changing questions about agriculture, policy and regulation. Consider the relatively new boom in ind...
Thoughts from a Montana Farmer
The spring wheat harvest is quickly winding down, and a large farmer from eastern Montana recently sent some comments about his crop and what he (and his neighbors) are thinking these days.The spring wheat harvest is quickly winding down. Last Monday’s weekly crop progress report showed it was...
Death’s Recovery; Reverse Engineering; Wrong Again; North Korea
European food makers are finding out what some American brands like Sunkist learned many years ago – the Chinese will steal the names of your products. Death’s Slow Recovery The “dead zone” in the Gulf of Mexico is the largest ever, creating a slew of media stories, and thus calls for action. A...
More Pain
The grain market news this week seemed to be full of more stories of financial woe and disappointment at the upper levels of the industry.The grain market news this week seemed to be full of more stories of financial woe and disappointment at the upper levels of the industry: CHS reports a thi...
Middle East, Mediterranean and Africa Regional Analysis
Kenyan farmers are saying that the extended duty-free maize import period will make large volumes of those low-cost stocks available when the local crop is harvested in September. They are also unhappy about the impact of a Kenya Food Reserve Agency decision. Regional Updates MIDDLE EAST/MEDITE...
Ag Review: Geopolitics and the Black Sea
WPI Agribusiness Subsector Outlook A brief review of WPI’s past Bull/Bear calls and industry stock price performance. WPI Bull/Bear Leanings for Agribusiness in 2017 A summary and graphical depictions of WPI’s expectations for future agribusiness performance. The U.S. Gr...
2016 Farm Income Numbers
A survey of one program's Red River Valley farm clients’ 2016 financial results provided some interesting points, but that data will likely be quite different in 2017.The North Dakota and Minnesota Farm Business Management Education program recently released a summary of its Red River Valley fa...
Oilseed Highlights: NOPA Soy Crush; U.S. Biodiesel Tax Credit; Sunseed Production in Bulgaria and Romania; Brazil’s Road Blockade
The EU Commission has issued its forecasts for sunseed production in Bulgaria and Romania, which indicate notable changes from 2016. Meanwhile, protestors last Friday lifted their blockade of Brazil’s BR-163 highway that had impacted port deliveries. NOPA Soy Crush Falls Below Trade Estimates T...
Indian Subcontinent Regional Analysis
As India rolls out its new Good and Services Tax (GST) starting 1 July 2017, the largest tax reform in quite some time is expected to possibly make Indian products competitive and cheaper in the long run. However, that may not be its impact on the agricultural sector. Methyl Bromide Fumigation...
Ag Review: U.S. Grains and the Weather Market
WPI Agribusiness Subsector Outlook A brief review of WPI’s past Bull/Bear calls and industry stock price performance. WPI Bull/Bear Leanings for Agribusiness in 2017 A summary and graphical depictions of WPI’s expectations for future agribusiness performance. The U.S. Gr...
Middle East, Mediterranean and Africa Regional Analysis
Turkey is seeking changes to its customs union with the EU. Industrial goods are currently covered, and there is talk of possibly adding agricultural products, which could affect its grain shipments from certain countries. Regional Updates MIDDLE EAST/MEDITERRANEAN COMMENTS Turkey is seeking ch...
Border Adjustment Tax Idea Is Fading
Two of the top leaders in Congress, the speaker and the House Ways and Means Committee chairman, are running into stiff opposition to their border adjustment tax.One of the major “American First” issues that emerged with the election of President Trump and from which he has since distanced hims...
Oilseed Highlights; Sunseed Production; New Palm Oil Varieties
The company SMART Tbk has developed two new clones of oil palms via conventional breeding techniques, and they have been shown to produce much higher yields. Ukraine and Russia Leaders in Sunseed Production While the U.S. has a significant sunflower seed sector, Russia and Ukraine are now the...
Oilseed Highlights: Brazil’s 2017/18 Soy Area Projection; Argentine Crush Capacity Expansion; India’s Vegoil Tariffs
While India's consumers are benefiting from more vegoil imports at lower prices, its farmers and processors find those low prices are making oilseeds unprofitable. As a result, they want the government to take certain action. Brazil’s Agriculture Ministry Expects Soy Area to Increase in 2017/18...
Middle East, Mediterranean and Africa Regional Analysis
The Zimbabwean government is pushing ahead with plans for mandatory food fortification beginning 1 June 2017, including maize and wheat flour. Millers are saying it is not possible to comply because of three significant factors. Regional Updates MIDDLE EAST/MEDITERRANEAN COMMENTS The month of R...
Mercosur Regional Analysis
Argentine farmer selling stands at around 20 percent of the crop. However, the market dried up after the Brazilian political scandal moved the CBOT lower. The lack of farmer selling is a problem for Argentina, but there is also another one. Soybeans Argentina Farmer selling stands at around 20...
Ag Review: China's Soyoil Problem
WPI Agribusiness Subsector Outlook A brief review of WPI’s past Bull/Bear calls and industry stock price performance. WPI Bull/Bear Leanings for Agribusiness in 2017 A summary and graphical depictions of WPI’s expectations for future agribusiness performance. The U.S. Gr...
Green Waste; NAFTA Nonsense; Chocolate; Stocks; Obvious
After ruling out imposing tariffs on ethanol imports from the U.S. due to concerns about retaliation, the Brazilian government will require that importers fulfill the same obligation (Resolution 67/2011) as domestic suppliers. Green Solution to Food Waste Some estimate that 70 percent of crops...
Rough Night in Jericho
Rough Night in Jericho is the name of an old western movie. As the title implies, things didn’t go as expected, and so it was with the wheat market this week.Rough Night in Jericho is the name of an old western movie. As the title implies, things didn’t go as expected, and so it was with the wh...
Mercosur Regional Analysis
Farmer selling of corn in Argentina is still very slow and centered on nearby delivery months as well as expensive versus FOB prices. Exporters are paying farmers a basis-equivalent of $0.70K (2,400 ARS), The main issue, though, is another matter. Soybeans Argentina The soybean harvest in Argen...
A New Month, A New Market
Funds increased all their short positions last week in the face of what looked like a bullish weather outlook over the weekend. While it will be several weeks or longer before the final effect of this weather event can be determined, there are a few certainties.Funds went home last Friday holdi...
Ag Review: Can Exports Save the Dairy Industry?
WPI Agribusiness Subsector Outlook WPI Bull/Bear Leanings for Agribusiness in 2017 A summary and graphical depictions of WPI’s expectations for future agribusiness performance. The U.S. Grain Industry Industry focus on divesting non-core business units will stabilize b...
Middle East, Mediterranean and Africa Regional Analysis
The MENA region has been the major destination for Black Sea wheat, but more of it is expected to flow elsewhere because of one development. Meanwhile, reports from Kenya indicate that maize imports from Mexico may not have the hoped-for effect there. Regional Updates MIDDLE EAST/MEDITERRANEAN...
Soybeans Move Further West and North
The westward movement of soybeans in the U.S. has been occurring for many years as hardier, shorter-season varieties have been developed. That is expected to continue as well as to the north with another significant variable also driving expansion of soybean planted area.Last Friday’s USDA Pros...
Black Sea Regional Analysis
Turkey's introduction of import duties on certain goods from Russia has driven the latter to a nearby, alternate source for sunflower oil. Meanwhile, Ukraine significantly increased its imports of nitrogen mineral fertilizers from Russia during January-February. Russian Grain Markets: 20-24 Mar...
Ag Review: 2017 Cow/Calf Profitabitiy Outlook
WPI Agribusiness Subsector OutlookWPI Bull/Bear Leanings for Agribusiness in 2017 A summary and graphical depictions of WPI’s expectations for future agribusiness performance. Wheat Market Risks and New Realities U.S. wheat’s declining global importance gave rise to ongoing battle f...
Middle East, Mediterranean and Africa Regional Analysis
A recent report in South Africa indicated that the poultry industry needs expanded production of feed maize and soybeans in order to help control prices. While the former is achievable, one factor makes it more difficult to boost soybean production. Regional Updates MIDDLE EAST/MEDITERRANEAN CO...
Ag Review: Farm Equipment Outlook 2017
2016 Agribusiness Performance Recap and 2017 OutlookWPI Bull/Bear Leanings for Agribusiness in 2017 A summary and graphical depictions of WPI’s expectations for future agribusiness performance. The U.S. Grains Industry Now, perhaps more than ever, the U.S. grain industry’s success i...
A Big One Falls
One of North Dakota’s largest farmers filed a Chapter 7 bankruptcy petition recently. Most will blame the collapse on the downturn in commodity prices. While that was certainly a major reason, there are many other contributing factors.One of North Dakota’s largest farmers filed a Chapter 7 bank...
Farm Balance Sheet Impact on Planting and the Farm Bill
What will continued low crop prices and debt accumulation mean for production and policy?Macroeconomic factors in 2016 (i.e., uneven global economic growth and shifting currency values) are still in play in 2017, according to USDA testimony at the House Agriculture Committee last week. Economic...
Middle East, Mediterranean and Africa Regional Analysis
The annual inflation rate in Egypt jumped to 24.3 percent in December, the highest it has been in seven years and more than double the 2015 level. This was largely due to a government action last year that also particularly affected grain prices. Regional Updates MIDDLE EAST/MEDITERRANEAN COMME...
Trump Ag Speaks; USAID Concerns; OECD Water
A Trump administration agriculture official addressed a meeting of private sector industry representatives today and made several notable points. Trump Ag Speaks A Trump administration agriculture official addressed a meeting of private sector industry representatives today and made several not...
First Year of Macri Ag Policies Leads to Argentine Natural Gas Boom
President Mauricio Macri began his efforts to encourage innovation in agriculture, increase exports and boost rural economies upon assuming office in December 2015. The resulting new demand for inputs is already impacting the country’s natural gas sector.In Washington, the House Ways and...
Middle East, Mediterranean and Africa Regional Analysis
Grain traders in Europe are saying that Germany, Poland and the Baltic states will be replacing France as the major exporters of wheat to North Africa and Saudi Arabia. Meanwhile, one African nation intends to procure white maize from Mexico as nearby supplies are not available. Regional Update...
Soybeans Rule
Rarely has there been a period of time in grain markets when one commodity has dominated the market action as soybeans recently have, both in terms of price and analysis.Rarely has there been a period of time in grain markets when one commodity has dominated the market action both in terms of p...
Indian Subcontinent Regional Analysis
Chickpeas are a popular source of protein in India. However, prices of the whole chickpea and the split dal (pulse) are on the rise. As a result, many consumers have shifted to one alternative. High Chickpea Prices Shift Demand to Yellow Peas Chickpeas are a popular source of protein in India...
Ag Review: The Exit of Commodities Bear Market?
WPI Bull/Bear Leanings for Agribusiness A summary and graphical depictions of WPI’s expectations for future agribusiness performance. The Flour Milling Industry Excellent operational management and hedging effectiveness are critical features of this historically low-margin business. Oilse...
Oilseed Highlights
An Argentine government proposal would require farmers to pay royalties on patented biotech seed for three years after the initial purchase, but the seed companies claim that is not sufficient time for them to recoup their costs. It now appears, though, that an agreement may be reached. Push to...
Mercosur Regional Analysis
While the soybean market in Argentina remains quiet with no trades last week, there was demand for June at +$0.18N but no sellers. Today demand is at +$0.08N for May and +$0.15N for June, although offers are still lacking so far. In Brazil, it is beginning to calm down after some weeks with str...
Middle East, Mediterranean and Africa Regional Analysis
Turkey has announced a new $4 billion agricultural subsidy program that will cover 19 strategic crops. However, production of one in particular is nevertheless expected to drop because of a certain factor, and USDA is forecasting that the country may have to import stocks in 2017 as a result. R...
Mercosur Regional Analysis
It is too early to determine whether Argentina will have sufficient 12 percent protein wheat to fulfill the contracts already made. The lack of demand for lower quality wheat is pressuring those prices and giving reasons for exporters to defend prices of the higher quality stocks, resulting in...
Oilseed Highlights
USDA recently released its annual long-term projections for major crops, and those for soybeans can be justifiably challenged for several reasons. USDA’s Long-Term Soybean Yield Projections Too Conservative USDA recently released its annual long-term projections for major crops, including soybe...
Middle East, Mediterranean and Africa Regional Analysis
In light of recent action taken by Egypt's government regarding a certain tax together with the need to purchase feed ingredients, medicines, etc. from outside the country, the local poultry industry there says that it will have difficulty competing price-wise with imported chicken. Regio...
Natural Gas Overview
Warmer winter weather last year and to date this year is driving higher-than-normal natural gas storage inventories despite demand from the power sector, and two developments may put even more of it on the market to the benefit of the agricultural and fertilizer sectors as well as others.Domest...
Transitional Crops; Dead Zone Policy; Huge Conspiracy
The Organic and Non-GMO Forum this week highlighted the conundrum hitting U.S. farmers as consumers change their preferences. However, a new farm bill initiative may attempt to help address some of the issues. Transitional Crops The Organic and Non-GMO Forum this week highlighted the conundrum...
Indian Subcontinent Regional Analysis
India's recent move against the country's old currency notes is having a profound effect on farmers who bring their produce to market as well as truckers transporting perishable goods. Meanwhile, GOI has taken a step to strongly incentivize the production of more food grains. 2016/17 Rabi...
Oilseed Highlights
Brazil’s biodiesel production is forecast to change notably in 2017, based partially on a revision to the required blending level for biodiesel with petroleum diesel that is to be implemented in the first quarter. U.S. Soymeal Export Sales Up Last Week (None to Europe) Today’s USDA export...
Ag Review: Agribusiness Margins in the Face of Uncertainty
WPI Bull/Bear Leanings for Agribusiness A summary and graphical depictions of WPI’s expectations for future agribusiness performance. The Grain Industry Low prices are leading farmers to pursue cost-cutting decisions. In turn, this will pressure margins at all levels of the farm economy,...
Middle East, Mediterranean and Africa Regional Analysis
Egypt has set up a new wheat import inspection system that seems to be giving some confidence to traders and tender participants. It will be under the authority of the General Organization for Export and Import Control (GOEIC,) which has an alternative way to conduct the inspections. Regional U...
Oilseed Highlights
The All India Poultry Exporters Association wants the government to either ban the importation of chicken meat produced with biotech feed ingredients or allow Indian farmers to plant the more productive biotech soybeans and corn. Soy Export Tax Rebate for Northern Argentina Likely to Have Littl...
Oilseed Highlights
U.S. farmers are in the process of harvesting the largest soybean crop ever along with a record yield. In many states, they are seeing yields far above average and delivering more than normal volumes of soybeans directly to elevators and processing facilities. In turn, this is impacting basis l...
Ag Review: Industry Insights and Outlook for Q4 2016
The Grain Industry Farmland values have been among the last to experience the impact of low commodity prices, but the downward pressure has now begun. Oilseed Processing Several factors appear to be converging for the benefit of exporters and processors of U.S. soybeans as well as the livestock...
Policy and Technology
Much the way Washington and Brussels help their respective main aircraft builders, Boeing and Airbus, the EU and the U.S. subsidize their respective agriculture sectors, albeit in very different ways.Much the way Washington and Brussels help their respective main aircraft builders, Boeing and A...
Fracking and Farming; Wasted Effort; Megafarms
Opponents key in on two or three generalized arguments against it, but there are dozens of specific outcomes of the TPP that are better than the status quo for most Americans. There is also a more effective way to garner support. Fracking and Farming Just as high prices and technology enabled A...
Middle East, Mediterranean and Africa Regional Analysis
Kenya reports that local maize and maize meal prices are dropping slightly as the local harvest has boosted supplies. However, maize imports are still needed despite those plentiful local stocks, and the government specified a significant volume that will need to be imported as the year progres...
Oilseed Highlights
The aquaculture sector has long relied heavily on fish meal as a prime source of protein in its feeds. The supply is decreasing, however, so it will need to find ways to use higher levels of an alternative if the industry is to continue expanding. Chinese Agency’s Soybean Import Forecast The Ch...
Ag Mergers Impact Washington’s K Street
Lower crop prices and farm income together with pressure for new products are leading to a wave of consolidation in the ag sector. One of the little-discussed, major implications of this will be the effect on the K Street lobbying corridor in the nation’s capital.Lower crop prices and farm inco...
Mercosur Regional Analysis
Buyers returned to the Brazilian soybean market after a prolonged, especially quiet period. February shipments traded several times at $1.54-1.55 over March CBOT futures, but the market has otherwise traded more actively in the far deferred positions. Demand was primarily coming from China for...
Middle East, Mediterranean and Africa Regional Analysis
A recent GMO report notes that only three countries in Sub-Saharan Africa allow biotech crops, although eight other African countries are conducting fields trials. Various varieties of drought-tolerant maize have been developed with one particular type planted in South Africa this year. Regiona...
Oilseed Highlights
The average forecast of analysts queried by Reuters is for Brazil to produce a record 103.1 MMT of soybeans in 2017. This is clearly a possibility if the country has good weather in the growing season. However, it is far from being a certainty for several reasons. Canadian Canola Stocks Larger...
New Year’s Eve for U.S. Corn and Soybeans
31 August is effectively New Year’s Eve for U.S. corn and soybeans as their 2016/17 crop year officially begins tomorrow. While it is doubtful that many involved in the U.S. grain and soy marketing chain will be engaging in celebrations today, the situation may not be as bleak as it might appea...
TPP Officially Dead; Slippery Slope; Energy Crops
Beef cattle catch a lot of grief for their land and water requirements, but a recent USDA analysis shows them to be a relative energy bargain. TPP Officially Dead The Trans-Pacific Partnership (TPP) has been dead for a long time, but U.S. Senate Majority Leader Mitch McConnell (R-Kentucky) fina...
Oilseed Highlights
Brazilian fertilizer companies are being challenged this year by a shortage of trucks amidst rising demand. This has driven up the cost of transporting the goods by about 35 percent and doubled it for some routes. However, this is benefitting one group. Stats Canada’s Surprising August Canola C...
Middle East, Mediterranean and Africa Regional Analysis
The ”smart-card” system in Egypt for subsidized food, including bread, is being moved to the control of the military production agency from the ministry of supply. The government says that the switch will have two notable effects. Regional Updates MIDDLE EAST/MEDITERRANEAN COMMENTS There is goo...
Middle East, Mediterranean and Africa Regional Analysis
Recent analysis of maize cereals and flour in Tanzania have shown very high levels of aflatoxin, but the government claims a different cause of the reported death and illness there. Meanwhile, DuPont’s Pioneer seed division has announced it is expanding one of its programs to that country. Regi...
Farmland Economics
USDA’s National Agricultural Statistics Service (NASS) has released its annual survey results on farmland values and cash rents, which indicate some changes of interest.During the first week of August every year, USDA’s National Agricultural Statistics Service (NASS) releases its survey results...
North American Carbon Reduction: A Tale of Two Nations
A carbon tax was the concept behind President Obama’s cap and trade proposal that was ultimately abandoned early in his first term. In Canada, meanwhile, Environment Minister Catherine McKenna announced that the country will set a price on carbon emissions by the end of this year.The Obama Whit...
Farm Income Problems and What to Do
Low prices and weak or no profits are spurring a resurgence in marketing interest among farmers, and there are several steps that each can take.There have been numerous media stories on the poor financial outlook for farmers because of the current low price environment (see http://www.startribu...
Productivity; People; Marketing
Like Europe, U.S. use of inputs like fertilizer slowed as genetics and technology increased in their role in production. The difference is that U.S. agricultural productivity will see substantially differernt gains in the years ahead. Partial Productivity HFFA Research completed a study for the...
Oilseed Highlights
Compared with 2014/15, this year’s volume of U.S. soymeal exports has not been very good. However, it would be even worse if not for the big increase to two particular markets. Separately, the current ship lineup in the Gulf for soybean loadings could be indicative of how those exports finish i...
Oilseed Highlights
It has been Vietnam’s rapidly increasing demand for pork, poultry meat and farm-raised fish that has driven the quick growth in demand for soymeal, corn and other feed ingredients. While domestic feed mills exist or are being constructed, a high volume of imports are essential. Big Increase in...
China Drives Pork Expansion
While pork exports are down 6 percent from last year based on slower slaughter, those to China and Hong Kong increased notably during January-May with additional growth expected. As a result, steps are being taken to expand production. China Drives Pork Expansion Two pork-packing plants are und...
Middle East, Mediterranean and Africa Regional Analysis
According to reports in Egypt, the price for local poultry, the main consumers of corn and soymeal, has grown 25 percent in recent weeks. While some sources are blaming this on the higher cost of imported grains and protein meals, others maintain that the reason is a drop in production. Regiona...
Oilseed Highlights
Although India expects to produce a larger soybean crop in 2016, its protein meal exports continued to drop in May as a lack of supply and high prices made its soymeal noncompetitive. Meanwhile, its high soybean prices are benefiting another country. India’s Protein Meal Exports Continue to Dec...
Indian Subcontinent Regional Analysis
The Cabinet Committee on Economic Affairs (CECA) has approved an increase in the Minimum Support Prices (MSPs) for all 2016/17 kharif crops. While pulses have been given a bonus for many years as an incentive, such payment is now also being extended to oilseeds this year. MSPs for Key Crops Inc...
Black Sea Regional Analysis
Russia's domestic grain prices continued to rise due to the decreasing stocks and offers of the 2015 production. However, barley prices started dropping significantly in the South where the winter crop harvest will soon start and boost supplies. Russian Grain Markets Market Trends: 23-27...
Mercosur Regional Analysis
Brazil’s soybean market keeps heating up with the basis showing a regular daily increase as the old crop offer is being reduced due to the very negative origination margins. The issue is that this origin is well above FOB trading levels, making it very difficult for exporters to obtain stocks f...
Oilseed Highlights
The rich countries of Europe along with some developing nations in Asia and Africa continue to oppose the planting, and in some cases the consumption, of GMOs due to supposed fear that they may ultimately prove to be harmful to human health or the environment. However, that clearly does not see...
Middle East, Mediterranean and Africa Regional Analysis
For the past few years, Egypt has been one of the top two importers of U.S. 60 percent protein corn gluten meal (CGM). However, the sudden rally in those prices has created difficulties for feed producers there, causing them to look more closely at alternatives. Regional Updates MIDDLE EAST/MED...
Farm Dust; New Rules; Pick a Veep
NASA has combined with Columbia University to produce a study (Geophysical Research Letters), which claims that fine particulate matter from food production creates as much PM2.5 pollution as all other human activities combined. Regulating Farm Dust U.S. EPA fought back hard against charges a f...
Southeast Europe Regional Analysis
France’s exports to non-EU destinations have significantly increased during the last month as its wheat is competitive against Black Sea origins. Algeria bought 500,000 MT of it last week, paying $187-188 for July shipment. Milling Wheat The weather in Russia and Ukraine is excellent for the wh...
Middle East, Mediterranean and Africa Regional Analysis
U.S. corn exports to North Africa/Africa in the first quarter of 2016 are down 75 percent versus 2015, mainly due to reduced business with Algeria, Morocco and Egypt. However, those to the Middle East are up strongly from last year because of a 50 percent increase in shipments to Saudi Arabia...
Middle East, Mediterranean and Africa Regional Analysis
Egypt reports that it has purchased approximately 57,000 MT of local wheat in the first 10 days of buying against a target of 4 MMT by 31 July 2016. However, wheat farmers are complaining that the government is refusing to buy some stocks due to one particular issue. Regional Updates MIDDLE EAS...
Middle East, Mediterranean and Africa Regional Analysis
Italy is looking at three zone developments related to agricultural logistics in Egypt with one project for wheat and grain said to be likely in the Red Sea area at Beni Suef, 120 kilometers south of Cairo. The other two are for fruit, vegetable and sugar logistics. It also has another grain-re...
U.S. Trade Policy; China GMO Policy
The U.S. trade deficit is growing worse as the U.S. dollar stays strong and the economy stands out from many others. This trend will eventually feed back into presidential campaign politics and the anti-Trans-Pacific Partnership (TPP) rhetoric. Fixing U.S. Trade Policy The U.S. trade deficit is...
Southeast Europe Regional Analysis
Bulgaria has been officially added to the list of potential suppliers in the GASC tenders, which is good news for the country’s milling wheat farmers. However, there is one challenge to any such sales. Milling Wheat The Black sea market remained quiet last week. The offers for Ukrainian and Rus...
Oilseed Highlights
The Genetic Engineering Appraisal Committee (GEAC), the government of India’s regulator responsible for issuing clearances for field trials of GM crops and import/export of GM seeds, has deferred permits to import biotech soymeal and DDGS this year. Argentine Corn, Wheat and Sunflower Plantings...
Tough Time to Make a Profit
There’s no question that big profits were made during the boom times and balance sheets looked wonderful. The problem is that money is now going out the door at an alarming rate, and those balance sheets can change quickly in this environment.It was easy to make money in the grain business from...
Middle East, Mediterranean and Africa Regional Analysis
Egypt reports that current wheat supplies are sufficient until July 2016 and that it is planning to purchase 4-4.5 MMT of local stocks during the April-July harvest. Meanwhile, the ergot situation remains unresolved as the government and the FAO analyze/review standards. Regional Updates...
Argentina Will Take Years to Recover
It is easy to see the damage the policies of the Kirchner government have inflicted on the Argentine agricultural sector. The heretofore large export taxes starved it of capital. Most farmers have not been able to make the investments they need in equipment, fertilizers, conservation, agrichemi...
Ag Review: Opportunities in the Philippines
Sorting Through the Hazards With over 100 million people and an investment grade rating, the Philippines is an important player in the global agricultural market. The Philippines: Helping Tear Down the Blendwall Limits for Ethanol The Philippines is the second-largest and fastest-growing market...
Continuing Pressure on the Short Side of Wheat
One of the important misconceptions regarding the wheat market today is that prices are low because world demand has slowed. This is simply not true by any measurement.There has been no letup in the beating down of the wheat market. The super strong U.S. dollar and adequate supplies among the w...
Indian Subcontinent Regional Analysis
India’s 2016/17 union budget was released and has been hailed as rural-centric with an emphasis on agricultural growth and sustainability. When the Modi government took office, the clear message was to “grow more from less,” which this budget aims to fulfill. 2016/17 Union Budget and Agricultur...
More On the Outlook Forum Numbers
The acreage numbers used weren’t surprising. The talk over most of the winter has been that U.S. farmers want to plant more corn. There might be some external factors, though, that hold corn acres closer to unchanged from 2015 than up 2 million acres.Thank goodness for the USDA’s Outlook Forum...
Black Sea Regional Analysis
Ukraine's domestic milling wheat, feed wheat and feed barley prices all increased during 15-19 February as a result of the weakening national currency and limited offer. However, milling rye prices were stable with producers' offer prices starting at $125/MT EXW. Russian Grain Marke...
Market Commentary
Soybean futures responded to the sharp gains in crude and financial markets, trading 8-9 higher at mid-morning before weakening towards noon. Meanwhile, corn bounced with the soy complex. General Comments Markets opened Sunday evening little changed from last Friday’s closes, but crude oil rall...
More Things to Keep You Up at Night
Lentils are now trading at record high prices with peas expected to follow. These high old crop prices and relatively strong new crop prices will have an impact on the number of pulse acres in western Canada as well as parts of Montana and North Dakota. The El Nino Winter The El Nino winter is...
Ag Review: Big Data
From Cold War to Farms Big data got a slow start in agriculture and many fear some of the outcomes it offers, but opportunity is certainly one of them. Linking Big Data to Production Data analytics changed the way baseball is played; how can the agriculture and food sectors follow that path? Te...
TPP; China Acquisitions; Countercyclical; VW
The TPP agreement was signed this week in New Zealand, and some ministers proclaimed that they would not wait for the Americans before pushing it through the ratification process in their own countries. However, developments in Washington might give them pause. Renegotiating TPP The Trans-Pacif...
Oilseed Highlights
The U.S. biodiesel industry has renewed its efforts to convince Congress to change the recipients of the current $1/gallon biodiesel tax credit from blenders to producers. This is intended to prevent the credit from going to those blending imported biodiesel and thereby encouraging those import...
Natural Gas Consumption and Price Up
EIA reported this week that marketed natural gas in 2015 was priced 6 percent higher on average than 2014 levels, while it also has projected that consumption will continue to increase. Most of that growth is due to one particular usage relevant to agriculture.Back in September, we report...
More Things to Keep You Up at Night
The bearish psychology that has blanketed agricultural markets for many months has masked a significant developing story. That story is the severe drought that has encompassed South Africa and its neighboring countries for several months, impacting a significant crop. Drought Impacts Southern A...
Middle East, Mediterranean and Africa Regional Analysis
Israel and Turkey are reported by Ukraine to be in discussions regarding FTAs that would cover its grains, oilseeds and agricultural equipment along with fruits and vegetable from those two countries. There is an additional expected benefit to all three nations if these are enacted. Regional Up...
Crop Budget
The crop budget worksheets are of course only estimates, and virtually every producer will have a different set of numbers. Yields are always the key factor in these types of profit/loss exercises.As mentioned in Monday’s analysis, many of the university extension services now have 2016 crop bu...
Indian Subcontinent Regional Analysis
GOI is permitting PEC Limited, a State Trading Enterprise (STE), to import 500,000 MT of corn for poultry feed and starch manufacturers under the tariff-rate quota (TRQ). This would be the first corn imports in 16 years, but India’s zero tolerance of GMOs is likely to restrict the origins...
Dietary Guidelines Released
Today the U.S. Departments of Agriculture and Health and Human Services jointly released the 2015-2020 Dietary Guidelines for Americans. At the time of the original draft in late 2014, it was not clear that lean meat would be among the recommended protein foods. Dietary Guidelines Released Toda...
Middle East, Mediterranean and Africa Regional Analysis
It is reported that fewer than half of the maize plantings in South Africa have been completed due to the severe drought. With yellow maize prices up about 30 percent in recent days and 82 percent on the year, livestock farmers and dairy producers are warning that their meat, egg and dairy prod...
Input Costs – Natural Gas
While grains were 19 percent lower on the S&P Goldman Sachs Commodity Index (GSCI), energy was down 41 percent. However, there may be a silver lining to this commodity cloud going into 2016.Commodities as an asset class experienced another bear year in 2015 with all six sectors (precious me...
Oilseed Highlights
As a result of recent policy changes by the Argentine government, farmers are now expected to double wheat plantings in the next growing season and corn plantings over the next few years. Argentina Eliminates Export Permits for Grains and Oilseeds The Argentine government published a decree on...