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...
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...
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...
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...
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...
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
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
The Reality of Low Prices
As they begin planning for 2016, many producers are now thinking the big bull market might have been the worst thing to happen to production agriculture.2016 started on a sour note today for farmers. The March corn and wheat futures contracts put in new lows, and the March soybean futures contr...
The IoT and Big Data Impact on Agriculture
Economics, as a discipline, has been based on several assumptions over the years, and the evolution of Big Data and the “Internet of Things” (IoT) is rapidly proving that one of the basic tenets of textbook economics is obviously flawed. One of the most discussed concepts in the information tec...
Brazil Weather Starting to Attract Attention
While it is difficult to assess the impact of weather on Brazil's overall crop production at this point in time, it is safe to say that it will be difficult to reach the current soybean production estimate there and that corn's is likely too high as well.We’ve commented recently about the...
Ag Review: The 2016 Outlook
Technology, Finance, Geopolitics and Demographics The big four dynamics of technology, finance, geopolitics and demographics will collide to make 2016 very interesting. The Economy in 2016: Three Bright Spots Looking forward to 2016, there are three predicted bright spots in the U.S. economy, t...
Mercosur Regional Analysis
While Brazilian beans are offered at +144 SH for February, U.S. beans are traded in the low 130s SF for January and could be around 135-140 SH for February. Meanwhile, farmers in Uruguay are still not selling, but exporters are starting to show more interest in moving product. Soybeans After la...
Paris Climate Conference and Agriculture
The end goal of the conference is to forge a new international agreement on climate change that would keep global warming below 2 degrees centigrade by the year 2100, while the Green Climate Fund lists “agriculture and related land management” as one of its priority areas. The UN Framework Conv...
Indian Subcontinent Regional Analysis
The government of India (GOI) has finally taken steps to help cane growers and the sugar industry at large. However, some trade experts argue that the plan is not WTO compliant. Direct Subsidy to Sugarcane Growers The government of India (GOI) has finally taken steps to help cane growers and th...
The Acreage Game
Analysts with a longer-term view of the markets are starting to put together budget worksheets for 2016 crops. The winter farm meeting season is about to embark, and the potential for 2016 profits doesn’t look very good.Analysts with a longer-term view of the markets are starting to put togethe...
Thoughts from a Conference in Europe
There was an excellent panelist discussion that included a person in the coffee industry, one in the cocoa/chocolate industry, a finance officer for a major grain company and a trader from the Black Sea region. The primary question concerned what each believed to be the major risk in their resp...
Oilseed Highlights
Brazil's ABIOVE today raised its forecast for the country's 2016 soybean crop from 97.8 MMT to 98.6 MMT. That is less than the forecasts of USDA and the Brazilian government, which are projecting a harvest of 100 MMT or greater. However, it is far from certain that the crop will be as large as...
Middle East and Mediterranean Regional Analysis
Turkey reports that this year’s wheat production will be a record 23 MMT, but imports will continue. This is because quite a bit of the crop is of low quality and needs to be blended with higher quality imported milling wheat. Regional Updates MEDITERRANEAN/MIDDLE EAST COMME...
Middle East and Mediterranean Regional Analysis
Iran is intending to export about 400,000 MT of domestic wheat as local supplies are sufficient to meet demand. The government’s stockpile is reported to total about 8.3 MMT, up from an approximate average of 3 MMT over the past few years. Regional Updates MEDITERRANEAN/MIDDLE EAS...
Ag Review: The Volatility Issue
Loss Avoidance, Volatility and Food Security Volatility is the market seeking supply and demand balance, but the market lacks trust when it comes to balancing the food supply. Policy's Role in Market Volatility Domestic policies can provide an ongoing impact on the market by creating volatility...
TPP Analyzed; Soft Power; Proximity; Worms
Trade ministers highlighted the precedent this accord sets for future agreements as well as for the Pacific region. Unmentioned but more important at this time is its signal to economic players and financial markets. TPP Soberly Analyzed Negotiators of the Trans-Pacific Partnership (TPP) reache...
When All the Money Goes to Debt
There are some parallels to be drawn between the predicament that debt-laden commodity businesses find themselves in and our personal households. Although gross oversimplification is a risk, this is one way to examine the situation. Commodity headlines this week are dominated by the free fall...
Middle East and Mediterranean Regional Analysis
Iran has cancelled both the wheat and barley import duties that had been added this past July. It is still expected to import about 4 MMT of wheat in 2015/16, an approximate 2.3 MMT drop from last year, after purchasing 8.3 MMT of domestic stocks. Regional Updates MEDITERRANEAN/MIDDLE E...
Suffering; Unscientific; Trade; VW’d
The new U.S. Dietary Guidelines released earlier this year were roundly criticized by the agriculture sector and have now been attacked by more disinterested specialists in the British Medical Journal. Food Suffering Sovereignty A hodgepodge of small, populist groups (so-called civil society),...
Mercosur Regional Analysis
Brazil's exchange rate weakened this past week, and that could encourage an expansion in the country's soybean production to 100 MMT compared with last season's approximate 95 MMT. Soybeans Brazil's exchange rate weakened to four reals per U.S. dollar this past week. That could encourage an exp...
The Pervasive Bearish Attitude
The world is still super bearish regarding nearly everything related to commodities with many now creating more reasons why prices will never go back up. They have lost all objectivity.It's no surprise that the world is still super bearish regarding nearly everything related to commodities. Tha...
GMO Reorder; Miscellaneous; Media Mutters
An Australian court has issued a decision regarding an organic farmer's charge against a neighboring GMO producer's cultivation practices. GMO Reorder An Australian court has decided that a GMO farmer is not obligated to alter normal cultivation practices just because the farmer next door...
Comments from Argentina
With a presidential election looming next month, Argentine farmers are facing difficult decisions in light of the current economic situation as well as a potential change in government.An old friend from Argentina, who manages a large commercial grain and livestock farming operation in addition...
Oilseed Highlights
Soybean and corn prices already have fallen to unprofitable levels for nearly all farmers. The almost certain big crops this year in the U.S. and the likelihood of larger plantings next season in South America will probably result in even greater downward pressure on prices. Fantastic Crops in...
Mercosur Regional Analysis
At the moment, present global prices in the soy complex do not offer favorable margins for Brazilian and Argentine market participants. This basically means that the global soybean market belongs to another origin from October until January or until prices increase. Wheat The marketing of Argen...
Price Influences and Opportunities
The current period of low global grain prices presents a temporary opportunity for end users to be proactive, primarily because this is a time is when growers are most receptive to ideas that guarantee a sufficient margin and enable farming without interruption.Changing values of equity markets...
Middle East and Mediterranean Regional Analysis
The Turkish lira has reached a record low against the U.S. dollar after falling 22 percent so far in 2015, and that is pushing up prices for imported grains and proteins. Higher food costs are in turn having an impact on the country's overall consumer price index. Regional Updates MEDIT...
Brazil’s Farmers Struggling
Recent conversations with an associate farming and living in Brazil underscored a number of concerns that will eventually have a negative impact on crop production.I had a lengthy conversation with an associate who has been farming in Brazil for more than 20 years and is now a permanent residen...
Mercosur Regional Analysis
Traders may wish to note that the recent drop in CBOT prices is not attracting any additional selling of South American soybeans from the coming 2015/16 campaign and the fact that the old crop beans are not competitively priced against U.S. origin.Traders may wish to note that the recent drop i...
Middle East and Mediterranean Regional Analysis
Egypt has decided to allow 13.5 percent moisture in wheat tender offers for a period of twelve months at the request of France, which has had difficulty meeting its 13 percent moisture standard. However, there is a condition to this acceptance Regional Updates MEDITERRANEAN/MIDDLE EAST...
Oilseed Highlights
The drop in soybean prices over the last year has obviously helped to boost global soybean demand. However, the increase in global consumption predicted for 2015/16 now has to be questioned because of several factors. U.S. Biodiesel Production Reached 122 Million Gallons in June The U.S. Energy...
Mercosur Regional Analysis
South America could potentially benefit from present conditions within the global soy complex as there seems to be a delayed beginning of the soybean harvest in the U.S. Delta region with a possible, resulting short-term bounce in Chicago soybean contract prices. Soybeans South America could po...
Middle East and Mediterranean Regional Analysis
Officials in Bangladesh have said that the country will import 950,000 MT of wheat in the 12-month period ending June 2016, a significant increase over the 300,000 MT in 2014/15. They are also taking specific steps to address the quality issues with recent shipments. Regional Updates ME...
Brazil’s Export Infrastructure Growing Rapidly; Transportation System a Problem
As impressive as the new barge and export facilities are, there continue to be major bottlenecks in the inland transportation system that hinder commodity movements.Participating in a tour last week, which was organized by the U.S. soybean sector to investigate Brazil's agricultural transportat...
Mercosur Regional Analysis
There have recently been promises by Argentine political candidates to remove export taxes on all crops except soybeans. The one certainty is the country will continue to lose market share unless existing agricultural policies are adjusted. Argentina: Politics versus Agricultural Production It...
Oilseed Highlights
USDA's foreast for global 2015/16 rapeseed production indicates a notable decline from last year's record 71.815 MMT. This has implications for many countries, and the EU is expected to import more palm oil, soybeans and soymeal as a result. Decline Forecast for 2015/16 Global Rapeseed Output T...
USDA Report Shakes Up Soy Sector
USDA's higher forecasts for U.S. soy yields and production noted in yesterday's report clearly sent shock waves through the market as they were much above average analyst estimates. There were also a number of changes to estimates related to the rest of the world.USDA's higher forecasts for U.S...
Mercosur Regional Analysis
Brazil has the means to undercut current USG soybean prices. However, if the present selling opportunities are missed, South American merchandisers may need to seek advantage in the February period, which is the time of the first Brazilian new crop. Soybeans Argentine soybeans are temporarily u...
Low-Price Environment Getting More Headlines
We are now starting to see the headlines in the more traditional news arenas reflect concerns about the crash in profits across the agricultural spectrum.The substantial impact that the low-price environment is going to have on all levels of the agricultural supply chain has been covered a numb...
Middle East and Mediterranean Regional Analysis
Egypt's GASC is reviewing its current position with regard to French wheat moisture levels. It stipulates a maximum level of 13 percent but has allowed French wheat with up to 13.5 percent, provided there is a discount. Regional Updates MEDITERRANEAN/MIDDLE EAST COMMENTS Iran has decide...
Market Commentary
Fund selling continued overnight and today, which pushed corn, soybean and wheat futures sharply lower and at/or below key technical support. There were several factors that collapsed prices again this week. General Comments Fund selling continued overnight and today, which pushed corn, soybean...
2015 Crop Comparison
At a meeting of farmers this week in southeastern North Dakota, which was sponsored by the regional Farm Business Management group from the local college, some interesting data was presented regarding costs and net returns per acre for corn, wheat and soybeans.I participated in a meeting regard...
Greece and the Long-Term Outlook of the Euro
The steps back to normalcy in Greece have had a short-term impact on southern Europe. With yields falling today on Portuguese, Spanish and Italian government bonds, questions remain as to whether this is just the calm before the storm and what will ultimately happen to the euro.Greek banks reop...
Implications of the Low Price Environment
All segments of agriculture have been hugely profitable during this six-seven year bull market, but there are potentially negative consequences for many going forward if the current low price environment continues.I attended a meeting last week held by an agricultural consultant with clients th...
Middle East and Mediterranean Regional Analysis
Egypt' recent rate of population growth, 22.3 percent between 2006 and 2015, could mean a total of 100 million or more in less than five years. This will have an impact on future grain consumption as wheat imports rose by 45 percent during the 2006-15 period. Regional Updates MEDITERRAN...
Ag Review: Sustainability and Agriculture
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Defining Sustainability Activists, ecologists and economists have all battled over the concept of sustainability, though no one doubts it is an infinite dynamic. Surprise Ending to Economic Sustainability Economic history is filled with prolonged periods of irresponsible action that culminates...
Middle East and Mediterranean Regional Analysis
Turkey's soybean imports have increased by about 30 percent over the past three or four years and are expected to rise by another 200,000 MT in 2015/16. In turn, this is impacting the volume of soymeal it imports, mainly from South America. Regional Updates MEDITERRANEAN/MIDDLE EAST COM...
Corn Supply/Demand Tightening
The very wet conditions across the eastern Corn Belt have caused other problems in addition to lost acres. Corn is or has been standing in water in many areas, and plant development has been stunted.Last week's USDA acreage and quarterly stocks estimates coupled with some ongoing weather proble...
Market Commentary
Soybeans were weak early in the session, but light fund buying brought prices back to unchanged before noon. It was a big week for soybeans as they traded back to the highest levels in over five weeks on weather and planting concerns. General Comments Markets were quietly lower overnight with c...
Oilseed Highlights
Reports out of China indicate the government has decided to end its program of purchasing and storing rapeseed and rapeseed oil as a means to support farmer incomes. It plans to adopt an alternative strategy that is expected to also affect imports. China Eliminating Rapeseed Stockpiling in Favo...
Market Commentary
Grains and the soy complex were trading factors other than interest rates today. Weather and technical considerations once again dominated grain markets, beginning with the overnight session. General Comments The U.S. Federal Reserve Bank concluded its June meeting with a statement emphasizing...
WOTUS Rule Backlash
Yesterday the American Farm Bureau Federation (AFBF) issued a fact-check document rebutting the agency's "Fact Sheet" on the final rule, which also provides a description of some of the new onerous regulations associated with it.As is known by now, the U.S. EPA has released its final rule on th...
Oilseed Highlights
A combination of declining global prices for soybeans and soymeal together with China's corn price supports has resulted in soymeal and corn now trading in that country at about the same price per ton. China's Soymeal and Corn Prices Now Equal A combination of declining global prices for soybea...
House Ag Committee Looks at Global Farm Subsidies
The scope of agricultural subsidies is large and comes in many forms. According to the OECD, the estimated support to farmers was about $492 billion globally in 2012. China provided 34 percent of the total, while the U.S. contributed about 7 percent.The House Agriculture Committee held a hearin...
Mercosur Regional Analysis
The South American soybean market is seeing reduced Chinese demand for July. One reason is that a sharp drop in the Dalian futures this week eroded crush margins. Consequently, there is some available elevator capacity in Brazil for May shipment, which is unusual for this time of year. Soybean...
Media Now Discussing Poor Ag Outlook
After nearly a decade of generally excellent crops coupled with high prices that brought the best economic times in history to U.S. agriculture, the immediate problem now facing many farmers is cash flow or the lack thereof.The planting season is quickly winding down. Now with the markets still...
Crude Oil Exports and the Future of the U.S. Energy Sector
With the debate over lifting the ban on the export of crude oil becoming more pertinent, the U.S. Energy Information Administration (EIA) commissioned a study to examine future oil production under two different policy scenarios.One of the key energy issues in the 114th Congress, as we've previ...
Ag Review: Water Around The Globe
Water Solution at Hand There are resource constraints on earth, but water is not one of them. Likely Future Conflicts over Water Safe water for human consumption and crop irrigation is a luxury for many countries. In fact, as the global population grows, there very well may be several future gl...
Successful Regular Order; GMO Stunts
While the Senate Environment and Public Works Committee has been one of the most politically contentious with the two parties at wide odds on environmentally-sensitive issues, it successfully reported a bill today to reform toxic substances. Chemicals Regularly Ordered The U.S. Senate is back o...
Show Me the Weather
Today's extended weather maps and the pattern that is developing should impact talk of planting delays across the Corn Belt.Today's extended weather maps finally show a warmer and drier pattern developing across the eastern Corn Belt. In fact, nearly all of the U.S. agricultural production acre...
Black Sea Regional Analysis
Both Russia and Ukraine have reported domestic grain stock volumes that have notably changed from a year ago. Meanwhile, the board chairman of Cherkizovo Group has made suggestions regarding how the Russian government should address its lack of grain storage capacity. Russian Grain Markets Plan...
Oilseed Highlights
Argentine farm organizations yesterday asked soy exporters to stop inspecting cargoes for bootleg biotech soybean events. The exporting firms have been doing so on behalf of Monsanto, but farmers insist that there is only one entity that should be conducting inspections. NOPA's Record March Soy...
Ag Review: Screwy Currencies
Currency Valuation and Trade The Federal Reserve's interest rate decision and the strong U.S. dollar weigh on commodity trading decisions. The TPP and a Provision to Prevent Currency Manipulation There has been a push from certain U.S. sectors to add a provision to the TPP that would prevent si...
Middle East and Mediterranean Regional Analysis
Syria and Italy are reportedly discussing a trade involving 100,000 MT of Syrian durum wheat for 100,000 MT of soft milling wheat. This type of countertrade could provide a good alternative to difficult payment methods associated with Syria. Regional Updates Of major importance to wheat...
Math; Prejudice; Pivot
According to some analysts, the logical "pivot to Asia" made by the Obama administration is in trouble without the TPP. Math and Trade U.S. Representative Rosa DeLauro (D-Connecticut) and her fellow politicians opposed to Trade Promotion Authority (TPA) and the Trans-Pacific Partnership (TPP) m...
Oilseed Highlights
The Brazilian government's effort to re-evaluate 14 pesticides for possible bans has been ongoing for seven years and stymied by lawsuits as well as opposition from legislators. Two of those currently employed by farmers there are no longer approved for usage in the U.S. and elsewhere bec...
Funding Pipedreams
The Environmental Working Group (EWG) correctly asserts in its new analysis, "Feeding the World – Without GMOs," that it is "possible" to feed the growing world population without GMOs, but that is only in theory and ignores several fundamental hurdles.The Environmental Working Group (EWG) corr...
Middle East and Mediterranean Regional Analysis
While Egypt, Ethiopia and Sudan have signed a preliminary agreement regarding Nile water, the major water source for farming in Egypt and Sudan, it is estimated that there could be as much as a 35 percent drop in that supply due largely to an Ethiopian project. Regional Updates ME...
Glyphosate; China Policy; Real Food
For foodies, some processed food with substitute ingredients can be bad and others can be good, depending on whether there is an agreeable social cause that undergirds the product. More Chemophobia The United Nations, an organization only trusted by about a third of Americans, according to Harv...
Middle East and Mediterranean Regional Analysis
A tremendous amount of interest regarding investments in Egypt's agriculture was generated at a conference held there last week. Two key development agreements worth $6 billion were signed, which included one related to the new global grain logistics centre in Damieitta. Regional Update...
More Things to Keep You Up at Night
U.S. farmers must soon make their 2015 crop revenue insurance decision, and it is likely that they will take reduced coverage per acre in reaction to certain financial considerations that could also impact production.Weather will now start to play a more important role in the markets. Temperatu...
Indian Subcontinent Regional Analysis
GOI's recently released Economic Survey 2014-15 strongly advocated cutting subsidies and using new technologies to address problems with the distribution system. It is now planning to use three such tactics to justify the allocations and target the recipients, especially for fertilizer. Overpro...
Market Commentary
A stronger wheat market helped corn as did more talk that farmers are looking for ways to reduce corn costs because of low prices. Soybean and meal contracts did work progressively higher throughout the day. General Comments The markets all opened steady to higher Sunday evening after last week...
Black Sea Regional Analysis
The Russian Grain Union announced that spring planting costs will rise at least 40 percent compared to 2014 because of certain other increasing expenses. Russian Grain Markets Market Trends: 9-13 February 2015 During the week in review, domestic wheat prices dropped as other grains prices sligh...
Chlorine; Emissions; the Devil
Agriculture is being targeted for many ills ranging from obesity to water pollution. Now the Food and Agriculture Organization has piled on with a study claiming the sector is responsible for yet another adverse effect. Chlor Campaign Like parents withholding measles vaccine from their children...
Middle East and Mediterranean Regional Analysis
The deputy chairman of the Cyprus Grain Commission (CGC) resigned last week and indicated certain steps that the organization will need to implement in order to meet the needs of farmers and consumers. Regional Updates MEDITERRANEAN/MIDDLE EAST COMMENTS It is reported in Egypt that the...
Black Sea Regional Analysis
Russia has exported 22.7 MMT of grains as of 28 January and from the beginning of MY 2014/15, 31 percent more than during the same period in MY 2013/14. This growth may be attributable to an increase in shipments prior to enactment of the new wheat export tax on 1 February. Russian Grain Market...
Black Sea Regional Analysis
Market Trends: 26-30 January 2015During the week in review, wheat prices moved in different directions as prices for other grain crops increased (in RUB expression). On 1 February, the export duty for wheat went into effect.GEOGRAPHICALLY:3rd grade soft milling wheat prices increased in Central...
U.S. Corn Supply and Demand Outlook
Those analysts with a bearish slant, probably representing the higher percentage today, will at least use a big yield estimate and are also likely to have larger planting numbers than others.We're going to start to see all kinds of supply and demand forecasts for the coming marketing year, star...
Environment; Biotech; Biofuel; Beef and Pork
U.S. EPA is working on a plan to slow the adaptation by corn rootworms to corn that has been genetically modified to contain Bacillus thuringiensus (Bt). Meanwhile, a Pew Research Center survey found that the greatest divide between scientists and the American public is over the safety of genet...
Middle East and Mediterranean Regional Analysis
Turkey is said to have imported as much as 200,000 MT of EU rapeseed in recent months with more expected after it rejected stocks from the Black Sea when GM grains were found mixed in with the seeds. News Updates MEDITERRANEAN/MIDDLE EAST COMMENTS Unfortunately for the Egyptian poultry...
Court Case Precedent on Manure Management
In a district court case decided last week in the state of Washington, a judge applied the Resource Conservation and Recovery Act (RCRA) to dairy manure for the first time in history. Court Case Precedent on Manure Management The Resource Conservation and Recovery Act (RCRA) is a 40-year old la...
Understanding the U.S. Crude Oil Market
The boom in U.S. crude oil production has been a game changer in terms of handling and refining crude oil as well as supply. This is impacting the market as are several other factors.There are many type of crude oil produced around the world with differing quality characteristics. The two most...
The EPA Considers Sorghum for Cellulosic
The National Sorghum Producers (NSP) had asked that the EPA conduct an evaluation to determine which biofuels category (including cellulosic ethanol) could accept sorghum.For those without a New Year's party to attend, the U.S. EPA provided some alternative entertainment as it published a reque...
Meat and Livestock Overview
The newly organized North American Meat Institute (NAMI) has charged the federal Dietary Guidelines Advisory Committee with dropping a recommendation to include lean meat in consumers' diets in a "stunning" and "arbitrary and capricious" manner. Dietary Guidelines and Meat The newly organized N...
Middle East and Mediterranean Regional Analysis
Egypt's Chamber of Tourism reports that a side effect of the Russian situation is a 30 percent decline in hotel bookings. The decrease will have a serious effect on the domestic poultry industry, a major consumer of imported corn and soymeal, as the tourist sector is one of its major customers...
Black Sea Regional Analysis
The Russian grain market was influenced by several very serious factors during the week in review. These included the sharp ruble devaluation, a suspension in purchases of its grains by most exporters and the government's higher, fixed minimal purchase prices. Russian Grain Markets Market Trend...
China In-Country Analysis
It is clear that China's new administration continues to consider the nation's agricultural development and reform to be its top priority as adjustments in policies are considered to address a number of issues. China Calls for Transforming Agricultural Development Model China's leaders and seni...
Middle East and Mediterranean Regional Analysis
Morocco's grain imports for the June-October period are up by 80 percent against last year at a total 2.2 MMT including 750,000 MT of wheat and 1.1 MMT of corn. The wheat is mainly from Ukraine, France and Russia with about 80 percent of the corn from Argentina and Brazil. News Up...
Oilseed Highlights
China's Ministry of Commerce is currently indicating the country's December soybean imports will be about 6.8 MMT, but that number is far below the likely total of well above 8 MMT. USDA inspected 8.737 MMT of soybeans destined for China in November. Big Increase in Conab's Forecast for Brazili...
Middle East and Mediterranean Regional Analysis
Reports from Turkey indicate that the government is now strictly enforcing GMO import rules, which have resulted in the rejection of several vessels of U.S. origin DDGS. Buyers in Egypt and Israel are said to be looking at purchasing the refused cargo. News Updates The Polish port of Gd...
Crude Oil Exports
Although oil state lawmakers of both parties support the lifting of the crude oil export ban, the rank-and-file non-energy state Republicans are more cautious. Indeed, the economics can seem counterintuitive as exports will be assumed to raise gas prices.Representative Joe Barton (R-Texas) has...
Oilseed Highlights
Brazil recently imposed a 7 percent blending mandate for combining biodiesel with petroleum diesel. The higher production would increase the use of soyoil by about 23.4 percent to 2.9 MMT from 2.35 MMT in CY 2014. European Rapeseed Production Forecasted to Decline in 2015 The European consultin...
Friends; Surprise; Okay
While Chinese government officials announced an effort to reduce fertilizer and pesticide use by 2020 in an attempt to decrease pollution, the U.S. EPA was in federal court insisting it did not need judicial involvement in determining allowable nitrogen and phosphate runoff into the Mississippi...
Indian Subcontinent Regional Analysis
India's annual edible oil demand stands at 18-19 MMT with an annual growth rate of approximately 4 percent. Last year's imports totaled 11.3 MMT, but that could increase if there is any further drop in the country's oilseed production. Slow Rapeseed-Mustard Sowing Could Impact Production, Incre...
Wheat – Part II
How great have world wheat crops been? Russia, Ukraine, China, India and Canada have all had record yields in at least two of the last three years. However, the outlook for the world's 2015 crop may be different.This is wheat week, as is evident by Monday's analysis and today's. Wheat has becom...
Black Sea Regional Analysis
Rosselkhoznadzor, the Russian Federal Service for Veterinary and Phytosanitary Surveillance, wants to decrease the volume of grain exports by tightening quarantine and phytosanitary control. It has also requested a ban on shipments through offshore countries. Russian Grain Markets Market...
Climate Change and Agriculture: Part Deux
Back in 2008, climate change was a hot topic for U.S. agriculture with both presidential candidates having proactive plans to address greenhouse gases and climate change. Now the EPA is proposing to lower the ozone standard to between 65-70 parts per billion (ppb).Back in 2008, climate change w...
Oilseed Highlights
Today's weekly USDA export sales report once again indicated there was a net decline in U.S. soymeal export sales last week of 22,300 MT. Meanwhile, last week's U.S. soymeal exports totaled 417,300 MT, the greatest weekly volume since 1998 and the third-highest ever. Negative Soymea...
Middle East and Mediterranean Regional Analysis
According to the FAO, Egypt's 2014/15 grain imports will drop by about 1 MMT against last year, but the total is still approximately 1 MMT greater than the five-year average. It expects wheat imports will remain at approximately 10 MMT due to several factors. Middle East and Mediterrane...
Southern States a Substantial Contributor to Record U.S. Soybean Crop
One factor that has not received a great deal of attention is how much Southern states have contributed to the increase in U.S. soybean production in recent years as a result of larger plantings and much higher yields.It came as no surprise yesterday that the USDA supply and demand report raise...
Middle East and Mediterranean Regional Analysis
Turkey's poultry industry is benefiting greatly from the Russian ban on EU imports with a jump in its poultry meat exports from approximately 50 MT per month to almost 6,000 MT in October. The country is also set to be the beneficiary of a $300 million allocation from USDA's GSM-102 program. &...
Indian Subcontinent Regional Analysis
Russia has expanded its economic footprints in India, an old ally, after the imposition of sanctions by the U.S. and its Western allies. The importation of Indian buffalo meat is now allowed and likely to grow with pork imports also a possibility. India's Expanding Meat Business Following the i...
More Things to Keep You Up at Night
The U.S. rail shuttle freight market, at least the BNSF, seems to be softening. If the weakness in shuttle rates stays, it should mean that interior basis levels will start to strengthen. That might shake some post-harvest selling loose.It is Halloween, and there seemed to be plenty to spook al...
Indian Subcontinent Regional Analysis
In a bid to incentivize farmers, the government of India (GOI) has announced an increase in the Minimum Support Price (MSP) for several of the 2014/15 winter-sown crops including wheat, mustard, barley, chickpeas and masoor (red lentil), etc. MSP Raised for Key Crops In a bid to incentivize fa...
Indian Subcontinent Regional Analysis
MSP Raised for Key CropsIn a bid to incentivize farmers, the government of India (GOI) has announced an increase in the Minimum Support Price (MSP) for several of the 2014/15 winter-sown crops including wheat, mustard, barley, chickpeas and masoor (red lentil), etc. The crops will be marketed i...
Argentina is Still a Mess
There is some question regarding whether as many total acres of all crops in Argentina will be planted as expected with the low prices, high input costs and current peso exchange rate.I recently met with an old friend who manages a large farming operation in Argentina. It was our annual meeting...
The Soybean Outlook Stays Bearish into 2015/16
The soybean outlook continues to have a negative picture unless there is a significant production problem in South America this season or a big soybean yield issue in the U.S. in 2015. However, there are always caveats when discussing potential outcomes 12-18 months from now.We wrote abou...
Talking About 2015 Already?
We are seeing a number of analysts telling producers they ought to be selling not just 2015 production, but also some 2016 production. This does seem very premature with December 2015 corn futures trading below $4.00.Friday's talk about what U.S. farmers might plant in 2015 drew some comments f...
Middle East and Mediterranean Regional Analysis
Egypt is considering a free trade zone with Russia, Kazakhstan and Belarus, also known as the Eurasian Economic Union. This would allow for increased exports of its agricultural goods to these countries, while providing a steady and secure source for wheat imports. News Updates Local wh...
Oilseed Highlights
The Argentine government claims that farmers and exporters are holding as much as 21-22 MMT of stocks as a hedge against inflation, which it considers financial speculation that is bad for the country as well as for those two groups retaining them. Argentine Government Seeks to Force Farmers to...
Oilseed Highlights
The recent sharp declines in global soybean prices may be good news for the world's soybean processors, food manufacturers and animal feeders after years of very high prices. However, this turn has U.S. farmers almost in shock and most likely South American farmers as well. Sizable Soy Export S...
Mercosur Regional Analysis
The only way for Argentina to be competitive in the current global corn market is to sell corn via combos (corn with meal). Presently, the country can offer to load both products at the same port and berth with little or no lineup. South American Soybeans The Chinese are celebrating a national...
Middle East and Mediterranean Regional Analysis
Tunisia's government reported that the 2014 grain crop is up by about 80 percent at 2.34 MMT. It was also noted that there will be a very significant drop in the quantity of grain that the country will need to import this year as a result. News Updates MEDITERRANEAN/MIDDLE EAST COMMENTS...
USDA’s 1 September Stocks Report
If there is a surprise in the stocks reported today, it is the extremely tight ending 2013/14 soybean stocks of 92 million bushels, the lowest ending soybean stocks since 1972. Analysts will have to revise their views about the minimum pipeline volume needed to bridge from one crop year to the...
Mercosur Regional Analysis
The Buenos Aires Grain Exchange recently toured the region south of Buenos Aires and estimates that 150,000 hectares have been entirely lost to flooding. This acreage consists of 60,000 hectares planted to wheat and 90,000 planted to barley. Soybeans There is presently no wait time at the port...
Middle East and Mediterranean Regional Analysis
Egypt's GASC had a very busy week with two tenders and surprising purchases of wheat from France and the U.S. It bought 180,000 MT of French wheat at an average price of $247.40/MT CNF and 55,000 MT of U.S. soft red winter wheat at $244.42/MT CNF. News Updates Russia announced that its...
A Few More Things to Keep You Up at Night
The market is assuming another record Brazilian soybean crop in 2015, based on more planted acres and another super yield. One potential impediment to this forecast is the significant collapse in soybean prices. Market Assumes another Record Brazilian Soybean Crop in 2015 That assumption is aga...
Oilseed Highlights
Stoller Enterprises, a Houston-based agronomic firm, announced yesterday that it was able to harvest 214.7 bushels of soybeans per acre (14.44 MT/hectare) in yield trials conducted at a farm in the Texas Rio Grande Valley. Huge U.S. Soybean Crop Gets Bigger As expected, USDA today raised its es...
Mercosur Regional Analysis
Argentine farmer are heading into the corn planting season, and expectations are that more acreage will be planted early as this past year's strategy of doing it later did not work out well. Argentina's Possible Return to Early Corn Next Season Argentine farmer are heading into the corn plantin...
Middle East and Mediterranean Regional Analysis
Along with Egypt's new wheat relationship with Russia, there is news that it will have a direct freight service to Black Sea Russia in order to facilitate the flow of Egyptian fruit and vegetables to that country and the shipping of grain back to Egypt. News Updates MEDITERRANEAN/MIDDLE...
Mercosur Regional Analysis
Various participants in Argentina's corn market expected that prices could temporarily heat up when the government recently announced a shutdown of corn licenses for major exporters. However, that did not occur. Significant Decline in Argentine Corn Premiums and Planting Various participants in...
Crop Insurance Premium Subsidies
The underlying fundamental issue with crop insurance is its actuarial soundness, and gaining higher levels of coverage through premium subsidies has been a key leveraging tool to bring more acres with better actuarial histories into the program.As commodity markets went on a multi-year bu...
Dead Zones; Rating Africa; Trade Games; Water
One initiative arising out of the U.S.-Africa Leaders' Summit this week in Washington is a commitment by the U.S. Agency for International Development to produce later this year an assessment on the ease of doing business and investing in Africa's agriculture. Runaway Runoff The so-called "Dead...
Dietary Guidelines: Politics on a Plate
Sustainability is the latest ingredient to be mixed in to the nutrition policy making process. It is also a topic that the Dietary Guidelines Committee has addressed this year by creating a subcommittee dedicated to this issue.We've commented frequently on the new consumer trends in food consum...
Middle East and Mediterranean Regional Analysis
Turkey's reduced crop production, resulting from several weather-related issues, is negatively impacting both wheat and barley exports as well as increasing the volume of imports required to meet its needs. News Updates With the month of Ramadan coming to an end last Monday, most countr...
Railroad Backlog Emerging as Market and Regulatory Issue
The railroads report that they are working on solutions to the rail backup problem for the fall grain harvest season, and BNSF projects that it is on track to have eliminated past due deliveries by mid-September. The issue is not isolated to railcars, however.Rail backups were wreaking havoc th...
Lower Prices Will Mean Smaller Margins
The six-year run of high commodity prices coupled with generally good yields and record net farm income have also allowed all of the ancillary industries to operate with very wide margins. However, that is likely to change with the current low prices. The six-year run of high commodity prices c...
China In-Country Analysis
Although China has announced a record harvest this summer, a major concern among rural development researchers is sustainability, considering the combination of China's growing population, shrinking productive land due to urbanization, desertification, water shortages and pollution. China Annou...
Indian Subcontinent Regional Analysis
While India's monsoon has somewhat rebounded, farming communities have been impacted by the delayed rains. Rural demand is diminishing with crop selection and productivity expected to be affected as well as the country's overall economy. The Late Monsoon and Declining Demand The delayed monsoon...
More Scrutiny for EPA’s Waters of the U.S. Rule
To date, the one EPA action that has triggered a complaint by the National Farmers Union (NFU) is the setting of the 2014 biofuels volumes, which its letter to the EPA mentions as a catalyst to the new scrutiny over the new definition of the waters of the U.S. When being confirmed and early in...
Middle East and Mediterranean Regional Analysis
Iraqi grain traders advise that it has become impossible for Syria to deliver the wheat to Iraq that was arranged in June 2013 as truckers are not able to avoid the current difficulties in both countries that have limited transportation access. News Updates MEDITERRANEAN/MIDDLE EAST COM...
Indian Subcontinent Regional Analysis
India's 2014/15 budget attempts to target economic growth at 7–8 percent over a three-four year period after less than 5 percent growth for the past two years, and agriculture remains a high priority. Economic Survey of India: Key Points The most recent report from World Bank pegs India as the...
Climate Change Impact on Agriculture
Potential impacts of climate change that do not consider agricultural adaptation are of limited use and insight. This is a long-term trend, so anticipating farmers' spontaneous and planned responses to it should be included in projecting future effects.USDA recently held an Expert Stakeholders'...
Does Rain Make Grain or Not?
Everyone associates crop stress with heat and dryness. It can also be caused by too much water, and this is starting to attract some attention as the rains just won't stop across a significant portion of the U.S.This early summer is shaping up to be the wettest ever for a significant portion of...
Market Commentary
Standard commodity analysts may soon adjust their stories to proclaim, "Production will be large but demand is even larger!" Similar market dialog occurred soon after a bumper crop in 1994. General Comments Today's trading was the normal activity of lining up positions according to expectations...
Middle East and Mediterranean Regional Analysis
According to the FAO, Egypt's wheat and corn crops this year will be slightly above average size this year, but it expects that the country will have to import a near record 18.2 MMT of grain in 2014/15, a 5 percent increase from 2013/14. News Updates MEDITERRANEAN/MIDDLE EAST COMMENTS...
Indian Subcontinent Regional Analysis
There is hope that India's new government will bolster the economy's upward turn with revisions in policy. Industrial production rose in April 2014 as inflation decreased, but the delayed monsoon season brings concern about its impact on crops and agricultural output. New Hope for the Indian Ec...
Mercosur Regional Analysis
This year Argentine farmers have sold 1.57 MMT fewer soybeans than the total for the same date a year ago. The most important information for the market is the unsold balance that producers retain, which is 35.76 MMT for this crop. Argentina The Rate of Currency Devaluation in Argentina Increas...
Selective; True Colors; Inequality
FAS Agricultural Counselor Allan Mustard (nominated to be U.S. Ambassador to Turkmenistan) has issued a report exposing how New Delhi is substantially subsidizing Indian agriculture, but failing to report it to the WTO as required. Selective Approvals EU environment ministers are likely to vot...
Political Instability in Ukraine – the Fertilizer Fallout
A major determinant for the competitiveness of Ukrainian fertilizer on global export markets is its cash cost of production, and the country's current conflict presents a threat to this domestic industry. U.S. President Barack Obama is scheduled to meet Petro Poroshenko, Ukraine's newly electe...
Unintended; False; Survey Says
The group People for the Ethical Treatment of Animals (PETA) has sparked furor with its "Got Autism?" campaign that seeks to link consumption of dairy products with increased rates of the disease. Unintended Policy Consequences Most aggies will pay little attention to the Obama administration's...
Indian Subcontinent Regional Analysis
As India's milk demand rises for many reasons, the sourcing of good, quality milk is one of the main concerns for the large dairy processing companies as small and marginal dairy farmers still account for 70-80 percent of total production. Dairy Sector Requires More Investment in Backward...
MCC/TF; Denials; Shorts
Ideas of all stripes can be threatening to some, but Europe faces the unique risk of completely offshoring the pursuit of scientific ideas. Tie MCC to TF The 54 member countries of the Africa Group at the WTO have said that they will not implement trade facilitation (TF) until an overall Doha R...
Middle East and Mediterranean Regional Analysis
The Chamber of Commerce in Egypt has announced that it is working with four banks there to provide financing for the expansion of the poultry industry in Upper Egypt, which will certainly lead to increased feed consumption and growth in the poultry feed business as well. News Updates ME...
The Issue of Rail Logistics
The situation in Canada is far worse than in the U.S., and all of this has prompted much talk about how long the logistical problems will last. Some are even suggesting comparisons to the problems in Brazil.Rail logistics across the Northern Plains and Canada have been a real mess since last fa...
India’s Election Result and the Global Phosphates Market
The prospect of a new government with a strong economic agenda has recently helped the INR recoup some of its losses, which could result in improved affordability of DAP imports and a rebounding of Indian DAP purchases. Last week's Indian election resulted in an exceptionally strong win for Na...
China In-Country Analysis
China's Ministry of Agriculture (MOA) and Ministry of Education together recently launched the "Training Plan for New Type Professional Farmers." This initiative has come as China struggles to improve agricultural efficiency amid a decrease of rural laborers. China's Corn and Hog Prices Increas...
More Things to Keep You Up at Night
This late spring will result in fewer corn acres across the Northern Plains. North Dakota, for example, was expected to plant 2.95 million acres of corn in 2014, down from 3.85 million acres last year. Just 3 percent of the state's intended corn acres were planted as of 11 May. Earlier Concerns...
Dying for Rice; Faithless; Naked Tommy
It is hard to complain after pondering the conditions in North Korea where it is reported that Supreme Leader Kim Jong Un has ordered up some reforms in agriculture. He is even going to try a little capitalism. Plant Rice and/or Die It is hard to complain after pondering the conditions in North...
Southeast Europe Regional Analysis
For the moment, the trend of increasing quality that was observed in the Bulgarian and Romanian wheat crop during the past five years will be reversed as farmers are using a higher volume of quality seeds and more fertilizers and pesticides every year. Milling Wheat The Black Sea market once ag...
Ag Review: Commentary on Opportunities in Agriculture
Opportunity: Complementarity The TTIP negotiations are an opportunity, despite the skepticism. The challenge is overcoming all of the pitfalls and finding complementarity. Aquaculture: Leading Food Production Opportunity Aquaculture production has grown at an annual rate of 8.3 percent and must...
Trade Trumped; Greek Spin; Cow Poop; Etc.
Given that free trade is about unleashing economic comparative advantage, there is much to worry about in Greek agriculture. Security Trumps Business, Again The spin following the Trans-Pacific Partnership (TPP) negotiations in Tokyo includes "breakthrough" and "a path forward," but there is so...
Middle East and Mediterranean Regional Analysis
Egypt's government has advised that current stocks and orders of wheat will last until 19 June 2014, while the country's wheat crop has a very wide range of production estimates. News Updates MEDITERRANEAN/MIDDLE EAST COMMENTS This year's Egyptian wheat crop has a very wide range of pro...
U.S. Soybean Outlook
We note that every year at this time we have looked at projections for rapidly building soybean ending supplies in the U.S. that have yet to materialize, either because of lower yields or increased demand.The soybean market continues its push to new highs despite all the pleading from the bears...
Middle East and Mediterranean Regional Analysis
Jordan will need to continue importing close to 100 percent of its needed wheat supply, according to USDA FAS in Amman. With the influx of Syrian refugees, wheat demand should increase as it seems to do every year. News Updates MEDITERRANEAN/MIDDLE EAST COMMENTS The local USDA forecast...
Southeast Europe Regional Analysis
With 27 MMT of exports, the EU wheat carryout stocks will be significantly tighter than last year. However, Western Europe's crop seems to be developing faster this year due to favorable weather. Milling Wheat The Black Sea market remained mostly unchanged last week with limited offers and litt...
Black Sea Regional Analysis
The president of the Russian Grain Union said Russia's current financial problems may negatively impact the planting of grains. Ukraine has planted early spring grains and leguminous crops on 90 percent of its target area as of 7 April 2014. Russian Grain Markets Planting Update Russian farmers...
Ag Review: Crimea and it's Implications
Crimea River History suggests that geopolitical troubles have less impact on food production than fundamentals like the weather. Crimea: Present Situation, Impact on Ag Business and Outlook A firsthand account of the situation in Ukraine and its impacts on grain and oilseed markets. Caging the...
Black Sea Regional Analysis
As of 31 March 2014, Ukraine has exported 27.351 MMT of grain from the beginning of the market year, and preliminary forecasts indicate the country's grain exports total may reach 33 MMT. Russian Grain Markets Planting update Russian farmers planted spring grain crops on 913,900 hectares (2.9 p...
Wrong; Imperfect; Smuggled and Quantified
A WTO agriculture committee meeting revealed why it will be difficult to get the Doha negotiations back on track. Naturally Wrong Recently installed Federal Judge William H. Orrick of Northern California ruled in a plaintiff's favor that General Mills' marketing a product as "natural" when it c...
Southeast Europe Regional Analysis
The EU has now allocated 22.7 MMT of wheat export licenses versus 15.1 MMT a year ago, and its wheat balance will be dangerously tight at the end of the campaign if the final total approaches 26 or 27 MMT. Milling Wheat The Black Sea market remained mostly unchanged last week without any...
Oilseed Highlights
It is rare that palm oil trades at a premium to soyoil, but a shortage is resulting in higher prices that are expected to lead to substantial increases in demand for soyoil, sunflower oil and rapeseed oil. Chinese Crushers Band Together to Slow Soybean Imports and Crush Large negative soybean c...
Middle East and Mediterranean Regional Analysis
Moody's is reviewing the ratings for 10 Turkish banks with the trade expecting that there could be a general downgrade for all involved, affecting their international operations and financing of grain imports. News Updates MEDITERRANEAN/MIDDLE EAST COMMENTS There is a great deal of talk...
Middle East and Mediterranean Regional Analysis
Buyers in the Levant, particularly Jordan and Syria, who source all of their corn from Ukraine are very concerned about a possible force majeure situation, because they don't have any easy source for a backup supply. News Updates MEDITERRANEAN/MIDDLE EAST COMMENTS North African wheat bu...
Ag Block; Fertilizer BS; Crimea
Mega-retailer Walmart announced that it will require suppliers of agricultural crops to reduce fertilizer use on 20 million acres by 2020. Ag is Stumbling Block U.S. Trade Representative (USTR) Michael Froman was asked by Financial Times reporter Edward Luce if Japan's opposition to conceding m...
TTIP Strategy; Aiding Ukraine
The Transatlantic Trade and Investment Partnership (TTIP) negotiations are hung up on tariffs, but Europe's aspiration for geographical indicators is an area of huge leverage for the U.S. TTIP Strategy The Transatlantic Trade and Investment Partnership (TTIP) negotiations are hung up on tariffs...
Middle East and Mediterranean Regional Analysis
A biotech conference in Ethiopia with African and European scientists last week has come out strongly in support of using agricultural biotechnology as a means to enable Africa's efforts to provide for the population's nutritional needs. News Updates MEDITERRANEAN/MIDDLE EAST COMMENTS E...
Middle East and Mediterranean Regional Analysis
According to a comment from Iran, Ukraine may not be able to complete their outstanding corn business because of its dwindling supplies and domestic unrest. News Updates MEDITERRANEAN/MIDDLE EAST COMMENTS Australian grain traders report that 28,000 MT of durum wheat have been shipped to...
TPP Threats; Getting Along; Manure
If adding labor to industry groups is a good idea, why not just throw all of the disparate interests onto the same committee and enjoy a literal three-ring circus? Loss of Face This week's Trans-Pacific Partnership (TPP) negotiations in Singapore will not conclude the talks and instead shows a...
Indian Subcontinent Regional Analysis
India is likely to produce 263.2 MMT of food grains in 2013/14. This is greater than the target of 259 MMT established by the agriculture ministry in September 2013 and the 257.13 MMT produced last year. Food Grains Production–Second Estimates India is likely to produce 263.2 MMT of food grains...
What Is Wrong With Being Big?
Farming is like any other business that produces and sells goods and services. Its profitability depends on maximizing productivity, efficiency and economies of scale.We grew up in eastern South Dakota a long time ago when agriculture was not just the leading industry in the area, it was the on...
Black Sea Regional Analysis
The Russian Grain Union supports the government resolution to allow GM seeds for use in sowing as of 1 June 2014. Russian Grain Markets: 12-18 February 2014 Grain Market Interventions A stock exchange trading was held on 18 February within context of the grain market intervention in Russia. The...
Market Commentary
Wheat, the soy complex and now corn are all re-emphasizing the lesson to both speculative and commercial traders that excessive reliance upon automated indicators can result in substantial returns being left on the table. General Comments Corn, wheat and the soy complex all closed higher today...
North American Logistics Not Getting Better
There are still more than 50 vessels waiting to load from the west coast of Canada. That totals more than 2 MMT of grain and oilseeds.We have written on several occasions recently about the logistical mess in Canada and, to a lesser extent, in the U.S. It hasn't improved, and some will argue it...
Black Sea Regional Analysis
Russian seaports increased the volume of grain shipments in January 2014 to 1.2 MMT, 2.9 times more than the total in January 2013. Russian Grain Markets: 5-12 February 2014 Grain Market Interventions Regular stock exchange trading was held 11-12 February within context of the grain market inte...
Global Biofuel Growth
It would seem the real future growth for U.S. biofuels lies in the export market.New reports indicate that Navigant Research has released a study projecting that global biofuel use will grow from 32.4 billion gallons in 2013 to 51.1 billion by 2022, an increase of 18.7 billion gallons. This pro...
Ag Review: The Outlook for 2014
2014 Agripalooza The market, government and technology development will all three conspire to change things in the agrifood sector in 2014. It will be exciting for some and disappointing for others. 2014 Outlook for the Global Soybean Sector The U.S. and global soybean sectors have enjoyed reco...
Farmers’ Major Decision
Today's final passage of a new U.S. farm law will pose a tricky decision for farmers – do they select the short-term protection of the Agriculture Risk Coverage (ARC) program, or the potentially longer-term subsidies under the Price Loss Coverage (PLC) program. Farmers' Major Decision; Politici...
Who Remembers Low Prices?
The current marketing environment will lead to some significant changes in attitudes.Two years ago, I hired a 28-year old to work with me in my farm marketing consulting business. He had three years' experience in the commodity business and grew up on a farm. His Dad and brother still farm. It...
China In-Country Analysis
Chinese society's public debate on GM food has greatly intensified and evolved from a health issue to one of national security. China's Beef Price Soars before the Chinese New Year As the Chinese New Year approaches at the end of this month, China's beef price is soaring. According to the Minis...
Indian Subcontinent Regional Analysis
In the first seven months of 2013/14 (April–October 2013), foreign direct investment (FDI) in the food processing sector was $2.15 billion, and there are expectations that the investments will increase in coming months. Investment in India's Food Processing Sector India ranks second in the worl...
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...
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...
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...
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...
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...
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
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
The Reality of Low Prices
As they begin planning for 2016, many producers are now thinking the big bull market might have been the worst thing to happen to production agriculture.2016 started on a sour note today for farmers. The March corn and wheat futures contracts put in new lows, and the March soybean futures contr...
The IoT and Big Data Impact on Agriculture
Economics, as a discipline, has been based on several assumptions over the years, and the evolution of Big Data and the “Internet of Things” (IoT) is rapidly proving that one of the basic tenets of textbook economics is obviously flawed. One of the most discussed concepts in the information tec...
Brazil Weather Starting to Attract Attention
While it is difficult to assess the impact of weather on Brazil's overall crop production at this point in time, it is safe to say that it will be difficult to reach the current soybean production estimate there and that corn's is likely too high as well.We’ve commented recently about the...
Ag Review: The 2016 Outlook
Technology, Finance, Geopolitics and Demographics The big four dynamics of technology, finance, geopolitics and demographics will collide to make 2016 very interesting. The Economy in 2016: Three Bright Spots Looking forward to 2016, there are three predicted bright spots in the U.S. economy, t...
Mercosur Regional Analysis
While Brazilian beans are offered at +144 SH for February, U.S. beans are traded in the low 130s SF for January and could be around 135-140 SH for February. Meanwhile, farmers in Uruguay are still not selling, but exporters are starting to show more interest in moving product. Soybeans After la...
Paris Climate Conference and Agriculture
The end goal of the conference is to forge a new international agreement on climate change that would keep global warming below 2 degrees centigrade by the year 2100, while the Green Climate Fund lists “agriculture and related land management” as one of its priority areas. The UN Framework Conv...
Indian Subcontinent Regional Analysis
The government of India (GOI) has finally taken steps to help cane growers and the sugar industry at large. However, some trade experts argue that the plan is not WTO compliant. Direct Subsidy to Sugarcane Growers The government of India (GOI) has finally taken steps to help cane growers and th...
The Acreage Game
Analysts with a longer-term view of the markets are starting to put together budget worksheets for 2016 crops. The winter farm meeting season is about to embark, and the potential for 2016 profits doesn’t look very good.Analysts with a longer-term view of the markets are starting to put togethe...
Thoughts from a Conference in Europe
There was an excellent panelist discussion that included a person in the coffee industry, one in the cocoa/chocolate industry, a finance officer for a major grain company and a trader from the Black Sea region. The primary question concerned what each believed to be the major risk in their resp...
Oilseed Highlights
Brazil's ABIOVE today raised its forecast for the country's 2016 soybean crop from 97.8 MMT to 98.6 MMT. That is less than the forecasts of USDA and the Brazilian government, which are projecting a harvest of 100 MMT or greater. However, it is far from certain that the crop will be as large as...
Middle East and Mediterranean Regional Analysis
Turkey reports that this year’s wheat production will be a record 23 MMT, but imports will continue. This is because quite a bit of the crop is of low quality and needs to be blended with higher quality imported milling wheat. Regional Updates MEDITERRANEAN/MIDDLE EAST COMME...
Middle East and Mediterranean Regional Analysis
Iran is intending to export about 400,000 MT of domestic wheat as local supplies are sufficient to meet demand. The government’s stockpile is reported to total about 8.3 MMT, up from an approximate average of 3 MMT over the past few years. Regional Updates MEDITERRANEAN/MIDDLE EAS...
Ag Review: The Volatility Issue
Loss Avoidance, Volatility and Food Security Volatility is the market seeking supply and demand balance, but the market lacks trust when it comes to balancing the food supply. Policy's Role in Market Volatility Domestic policies can provide an ongoing impact on the market by creating volatility...
TPP Analyzed; Soft Power; Proximity; Worms
Trade ministers highlighted the precedent this accord sets for future agreements as well as for the Pacific region. Unmentioned but more important at this time is its signal to economic players and financial markets. TPP Soberly Analyzed Negotiators of the Trans-Pacific Partnership (TPP) reache...
When All the Money Goes to Debt
There are some parallels to be drawn between the predicament that debt-laden commodity businesses find themselves in and our personal households. Although gross oversimplification is a risk, this is one way to examine the situation. Commodity headlines this week are dominated by the free fall...
Middle East and Mediterranean Regional Analysis
Iran has cancelled both the wheat and barley import duties that had been added this past July. It is still expected to import about 4 MMT of wheat in 2015/16, an approximate 2.3 MMT drop from last year, after purchasing 8.3 MMT of domestic stocks. Regional Updates MEDITERRANEAN/MIDDLE E...
Suffering; Unscientific; Trade; VW’d
The new U.S. Dietary Guidelines released earlier this year were roundly criticized by the agriculture sector and have now been attacked by more disinterested specialists in the British Medical Journal. Food Suffering Sovereignty A hodgepodge of small, populist groups (so-called civil society),...
Mercosur Regional Analysis
Brazil's exchange rate weakened this past week, and that could encourage an expansion in the country's soybean production to 100 MMT compared with last season's approximate 95 MMT. Soybeans Brazil's exchange rate weakened to four reals per U.S. dollar this past week. That could encourage an exp...
The Pervasive Bearish Attitude
The world is still super bearish regarding nearly everything related to commodities with many now creating more reasons why prices will never go back up. They have lost all objectivity.It's no surprise that the world is still super bearish regarding nearly everything related to commodities. Tha...
GMO Reorder; Miscellaneous; Media Mutters
An Australian court has issued a decision regarding an organic farmer's charge against a neighboring GMO producer's cultivation practices. GMO Reorder An Australian court has decided that a GMO farmer is not obligated to alter normal cultivation practices just because the farmer next door...
Comments from Argentina
With a presidential election looming next month, Argentine farmers are facing difficult decisions in light of the current economic situation as well as a potential change in government.An old friend from Argentina, who manages a large commercial grain and livestock farming operation in addition...
Oilseed Highlights
Soybean and corn prices already have fallen to unprofitable levels for nearly all farmers. The almost certain big crops this year in the U.S. and the likelihood of larger plantings next season in South America will probably result in even greater downward pressure on prices. Fantastic Crops in...
Mercosur Regional Analysis
At the moment, present global prices in the soy complex do not offer favorable margins for Brazilian and Argentine market participants. This basically means that the global soybean market belongs to another origin from October until January or until prices increase. Wheat The marketing of Argen...
Price Influences and Opportunities
The current period of low global grain prices presents a temporary opportunity for end users to be proactive, primarily because this is a time is when growers are most receptive to ideas that guarantee a sufficient margin and enable farming without interruption.Changing values of equity markets...
Middle East and Mediterranean Regional Analysis
The Turkish lira has reached a record low against the U.S. dollar after falling 22 percent so far in 2015, and that is pushing up prices for imported grains and proteins. Higher food costs are in turn having an impact on the country's overall consumer price index. Regional Updates MEDIT...
Brazil’s Farmers Struggling
Recent conversations with an associate farming and living in Brazil underscored a number of concerns that will eventually have a negative impact on crop production.I had a lengthy conversation with an associate who has been farming in Brazil for more than 20 years and is now a permanent residen...
Mercosur Regional Analysis
Traders may wish to note that the recent drop in CBOT prices is not attracting any additional selling of South American soybeans from the coming 2015/16 campaign and the fact that the old crop beans are not competitively priced against U.S. origin.Traders may wish to note that the recent drop i...
Middle East and Mediterranean Regional Analysis
Egypt has decided to allow 13.5 percent moisture in wheat tender offers for a period of twelve months at the request of France, which has had difficulty meeting its 13 percent moisture standard. However, there is a condition to this acceptance Regional Updates MEDITERRANEAN/MIDDLE EAST...
Oilseed Highlights
The drop in soybean prices over the last year has obviously helped to boost global soybean demand. However, the increase in global consumption predicted for 2015/16 now has to be questioned because of several factors. U.S. Biodiesel Production Reached 122 Million Gallons in June The U.S. Energy...
Mercosur Regional Analysis
South America could potentially benefit from present conditions within the global soy complex as there seems to be a delayed beginning of the soybean harvest in the U.S. Delta region with a possible, resulting short-term bounce in Chicago soybean contract prices. Soybeans South America could po...
Middle East and Mediterranean Regional Analysis
Officials in Bangladesh have said that the country will import 950,000 MT of wheat in the 12-month period ending June 2016, a significant increase over the 300,000 MT in 2014/15. They are also taking specific steps to address the quality issues with recent shipments. Regional Updates ME...
Brazil’s Export Infrastructure Growing Rapidly; Transportation System a Problem
As impressive as the new barge and export facilities are, there continue to be major bottlenecks in the inland transportation system that hinder commodity movements.Participating in a tour last week, which was organized by the U.S. soybean sector to investigate Brazil's agricultural transportat...
Mercosur Regional Analysis
There have recently been promises by Argentine political candidates to remove export taxes on all crops except soybeans. The one certainty is the country will continue to lose market share unless existing agricultural policies are adjusted. Argentina: Politics versus Agricultural Production It...
Oilseed Highlights
USDA's foreast for global 2015/16 rapeseed production indicates a notable decline from last year's record 71.815 MMT. This has implications for many countries, and the EU is expected to import more palm oil, soybeans and soymeal as a result. Decline Forecast for 2015/16 Global Rapeseed Output T...
USDA Report Shakes Up Soy Sector
USDA's higher forecasts for U.S. soy yields and production noted in yesterday's report clearly sent shock waves through the market as they were much above average analyst estimates. There were also a number of changes to estimates related to the rest of the world.USDA's higher forecasts for U.S...
Mercosur Regional Analysis
Brazil has the means to undercut current USG soybean prices. However, if the present selling opportunities are missed, South American merchandisers may need to seek advantage in the February period, which is the time of the first Brazilian new crop. Soybeans Argentine soybeans are temporarily u...
Low-Price Environment Getting More Headlines
We are now starting to see the headlines in the more traditional news arenas reflect concerns about the crash in profits across the agricultural spectrum.The substantial impact that the low-price environment is going to have on all levels of the agricultural supply chain has been covered a numb...
Middle East and Mediterranean Regional Analysis
Egypt's GASC is reviewing its current position with regard to French wheat moisture levels. It stipulates a maximum level of 13 percent but has allowed French wheat with up to 13.5 percent, provided there is a discount. Regional Updates MEDITERRANEAN/MIDDLE EAST COMMENTS Iran has decide...
Market Commentary
Fund selling continued overnight and today, which pushed corn, soybean and wheat futures sharply lower and at/or below key technical support. There were several factors that collapsed prices again this week. General Comments Fund selling continued overnight and today, which pushed corn, soybean...
2015 Crop Comparison
At a meeting of farmers this week in southeastern North Dakota, which was sponsored by the regional Farm Business Management group from the local college, some interesting data was presented regarding costs and net returns per acre for corn, wheat and soybeans.I participated in a meeting regard...
Greece and the Long-Term Outlook of the Euro
The steps back to normalcy in Greece have had a short-term impact on southern Europe. With yields falling today on Portuguese, Spanish and Italian government bonds, questions remain as to whether this is just the calm before the storm and what will ultimately happen to the euro.Greek banks reop...
Implications of the Low Price Environment
All segments of agriculture have been hugely profitable during this six-seven year bull market, but there are potentially negative consequences for many going forward if the current low price environment continues.I attended a meeting last week held by an agricultural consultant with clients th...
Middle East and Mediterranean Regional Analysis
Egypt' recent rate of population growth, 22.3 percent between 2006 and 2015, could mean a total of 100 million or more in less than five years. This will have an impact on future grain consumption as wheat imports rose by 45 percent during the 2006-15 period. Regional Updates MEDITERRAN...
Ag Review: Sustainability and Agriculture
Defining Sustainability Activists, ecologists and economists have all battled over the concept of sustainability, though no one doubts it is an infinite dynamic. Surprise Ending to Economic Sustainability Economic history is filled with prolonged periods of irresponsible action that culminates...
Middle East and Mediterranean Regional Analysis
Turkey's soybean imports have increased by about 30 percent over the past three or four years and are expected to rise by another 200,000 MT in 2015/16. In turn, this is impacting the volume of soymeal it imports, mainly from South America. Regional Updates MEDITERRANEAN/MIDDLE EAST COM...
Corn Supply/Demand Tightening
The very wet conditions across the eastern Corn Belt have caused other problems in addition to lost acres. Corn is or has been standing in water in many areas, and plant development has been stunted.Last week's USDA acreage and quarterly stocks estimates coupled with some ongoing weather proble...
Market Commentary
Soybeans were weak early in the session, but light fund buying brought prices back to unchanged before noon. It was a big week for soybeans as they traded back to the highest levels in over five weeks on weather and planting concerns. General Comments Markets were quietly lower overnight with c...
Oilseed Highlights
Reports out of China indicate the government has decided to end its program of purchasing and storing rapeseed and rapeseed oil as a means to support farmer incomes. It plans to adopt an alternative strategy that is expected to also affect imports. China Eliminating Rapeseed Stockpiling in Favo...
Market Commentary
Grains and the soy complex were trading factors other than interest rates today. Weather and technical considerations once again dominated grain markets, beginning with the overnight session. General Comments The U.S. Federal Reserve Bank concluded its June meeting with a statement emphasizing...
WOTUS Rule Backlash
Yesterday the American Farm Bureau Federation (AFBF) issued a fact-check document rebutting the agency's "Fact Sheet" on the final rule, which also provides a description of some of the new onerous regulations associated with it.As is known by now, the U.S. EPA has released its final rule on th...
Oilseed Highlights
A combination of declining global prices for soybeans and soymeal together with China's corn price supports has resulted in soymeal and corn now trading in that country at about the same price per ton. China's Soymeal and Corn Prices Now Equal A combination of declining global prices for soybea...
House Ag Committee Looks at Global Farm Subsidies
The scope of agricultural subsidies is large and comes in many forms. According to the OECD, the estimated support to farmers was about $492 billion globally in 2012. China provided 34 percent of the total, while the U.S. contributed about 7 percent.The House Agriculture Committee held a hearin...
Mercosur Regional Analysis
The South American soybean market is seeing reduced Chinese demand for July. One reason is that a sharp drop in the Dalian futures this week eroded crush margins. Consequently, there is some available elevator capacity in Brazil for May shipment, which is unusual for this time of year. Soybean...
Media Now Discussing Poor Ag Outlook
After nearly a decade of generally excellent crops coupled with high prices that brought the best economic times in history to U.S. agriculture, the immediate problem now facing many farmers is cash flow or the lack thereof.The planting season is quickly winding down. Now with the markets still...
Crude Oil Exports and the Future of the U.S. Energy Sector
With the debate over lifting the ban on the export of crude oil becoming more pertinent, the U.S. Energy Information Administration (EIA) commissioned a study to examine future oil production under two different policy scenarios.One of the key energy issues in the 114th Congress, as we've previ...
Ag Review: Water Around The Globe
Water Solution at Hand There are resource constraints on earth, but water is not one of them. Likely Future Conflicts over Water Safe water for human consumption and crop irrigation is a luxury for many countries. In fact, as the global population grows, there very well may be several future gl...
Successful Regular Order; GMO Stunts
While the Senate Environment and Public Works Committee has been one of the most politically contentious with the two parties at wide odds on environmentally-sensitive issues, it successfully reported a bill today to reform toxic substances. Chemicals Regularly Ordered The U.S. Senate is back o...
Show Me the Weather
Today's extended weather maps and the pattern that is developing should impact talk of planting delays across the Corn Belt.Today's extended weather maps finally show a warmer and drier pattern developing across the eastern Corn Belt. In fact, nearly all of the U.S. agricultural production acre...
Black Sea Regional Analysis
Both Russia and Ukraine have reported domestic grain stock volumes that have notably changed from a year ago. Meanwhile, the board chairman of Cherkizovo Group has made suggestions regarding how the Russian government should address its lack of grain storage capacity. Russian Grain Markets Plan...
Oilseed Highlights
Argentine farm organizations yesterday asked soy exporters to stop inspecting cargoes for bootleg biotech soybean events. The exporting firms have been doing so on behalf of Monsanto, but farmers insist that there is only one entity that should be conducting inspections. NOPA's Record March Soy...
Ag Review: Screwy Currencies
Currency Valuation and Trade The Federal Reserve's interest rate decision and the strong U.S. dollar weigh on commodity trading decisions. The TPP and a Provision to Prevent Currency Manipulation There has been a push from certain U.S. sectors to add a provision to the TPP that would prevent si...
Middle East and Mediterranean Regional Analysis
Syria and Italy are reportedly discussing a trade involving 100,000 MT of Syrian durum wheat for 100,000 MT of soft milling wheat. This type of countertrade could provide a good alternative to difficult payment methods associated with Syria. Regional Updates Of major importance to wheat...
Math; Prejudice; Pivot
According to some analysts, the logical "pivot to Asia" made by the Obama administration is in trouble without the TPP. Math and Trade U.S. Representative Rosa DeLauro (D-Connecticut) and her fellow politicians opposed to Trade Promotion Authority (TPA) and the Trans-Pacific Partnership (TPP) m...
Oilseed Highlights
The Brazilian government's effort to re-evaluate 14 pesticides for possible bans has been ongoing for seven years and stymied by lawsuits as well as opposition from legislators. Two of those currently employed by farmers there are no longer approved for usage in the U.S. and elsewhere bec...
Funding Pipedreams
The Environmental Working Group (EWG) correctly asserts in its new analysis, "Feeding the World – Without GMOs," that it is "possible" to feed the growing world population without GMOs, but that is only in theory and ignores several fundamental hurdles.The Environmental Working Group (EWG) corr...
Middle East and Mediterranean Regional Analysis
While Egypt, Ethiopia and Sudan have signed a preliminary agreement regarding Nile water, the major water source for farming in Egypt and Sudan, it is estimated that there could be as much as a 35 percent drop in that supply due largely to an Ethiopian project. Regional Updates ME...
Glyphosate; China Policy; Real Food
For foodies, some processed food with substitute ingredients can be bad and others can be good, depending on whether there is an agreeable social cause that undergirds the product. More Chemophobia The United Nations, an organization only trusted by about a third of Americans, according to Harv...
Middle East and Mediterranean Regional Analysis
A tremendous amount of interest regarding investments in Egypt's agriculture was generated at a conference held there last week. Two key development agreements worth $6 billion were signed, which included one related to the new global grain logistics centre in Damieitta. Regional Update...
More Things to Keep You Up at Night
U.S. farmers must soon make their 2015 crop revenue insurance decision, and it is likely that they will take reduced coverage per acre in reaction to certain financial considerations that could also impact production.Weather will now start to play a more important role in the markets. Temperatu...
Indian Subcontinent Regional Analysis
GOI's recently released Economic Survey 2014-15 strongly advocated cutting subsidies and using new technologies to address problems with the distribution system. It is now planning to use three such tactics to justify the allocations and target the recipients, especially for fertilizer. Overpro...
Market Commentary
A stronger wheat market helped corn as did more talk that farmers are looking for ways to reduce corn costs because of low prices. Soybean and meal contracts did work progressively higher throughout the day. General Comments The markets all opened steady to higher Sunday evening after last week...
Black Sea Regional Analysis
The Russian Grain Union announced that spring planting costs will rise at least 40 percent compared to 2014 because of certain other increasing expenses. Russian Grain Markets Market Trends: 9-13 February 2015 During the week in review, domestic wheat prices dropped as other grains prices sligh...
Chlorine; Emissions; the Devil
Agriculture is being targeted for many ills ranging from obesity to water pollution. Now the Food and Agriculture Organization has piled on with a study claiming the sector is responsible for yet another adverse effect. Chlor Campaign Like parents withholding measles vaccine from their children...
Middle East and Mediterranean Regional Analysis
The deputy chairman of the Cyprus Grain Commission (CGC) resigned last week and indicated certain steps that the organization will need to implement in order to meet the needs of farmers and consumers. Regional Updates MEDITERRANEAN/MIDDLE EAST COMMENTS It is reported in Egypt that the...
Black Sea Regional Analysis
Russia has exported 22.7 MMT of grains as of 28 January and from the beginning of MY 2014/15, 31 percent more than during the same period in MY 2013/14. This growth may be attributable to an increase in shipments prior to enactment of the new wheat export tax on 1 February. Russian Grain Market...
Black Sea Regional Analysis
Market Trends: 26-30 January 2015During the week in review, wheat prices moved in different directions as prices for other grain crops increased (in RUB expression). On 1 February, the export duty for wheat went into effect.GEOGRAPHICALLY:3rd grade soft milling wheat prices increased in Central...
U.S. Corn Supply and Demand Outlook
Those analysts with a bearish slant, probably representing the higher percentage today, will at least use a big yield estimate and are also likely to have larger planting numbers than others.We're going to start to see all kinds of supply and demand forecasts for the coming marketing year, star...
Environment; Biotech; Biofuel; Beef and Pork
U.S. EPA is working on a plan to slow the adaptation by corn rootworms to corn that has been genetically modified to contain Bacillus thuringiensus (Bt). Meanwhile, a Pew Research Center survey found that the greatest divide between scientists and the American public is over the safety of genet...
Middle East and Mediterranean Regional Analysis
Turkey is said to have imported as much as 200,000 MT of EU rapeseed in recent months with more expected after it rejected stocks from the Black Sea when GM grains were found mixed in with the seeds. News Updates MEDITERRANEAN/MIDDLE EAST COMMENTS Unfortunately for the Egyptian poultry...
Court Case Precedent on Manure Management
In a district court case decided last week in the state of Washington, a judge applied the Resource Conservation and Recovery Act (RCRA) to dairy manure for the first time in history. Court Case Precedent on Manure Management The Resource Conservation and Recovery Act (RCRA) is a 40-year old la...
Understanding the U.S. Crude Oil Market
The boom in U.S. crude oil production has been a game changer in terms of handling and refining crude oil as well as supply. This is impacting the market as are several other factors.There are many type of crude oil produced around the world with differing quality characteristics. The two most...
The EPA Considers Sorghum for Cellulosic
The National Sorghum Producers (NSP) had asked that the EPA conduct an evaluation to determine which biofuels category (including cellulosic ethanol) could accept sorghum.For those without a New Year's party to attend, the U.S. EPA provided some alternative entertainment as it published a reque...
Meat and Livestock Overview
The newly organized North American Meat Institute (NAMI) has charged the federal Dietary Guidelines Advisory Committee with dropping a recommendation to include lean meat in consumers' diets in a "stunning" and "arbitrary and capricious" manner. Dietary Guidelines and Meat The newly organized N...
Middle East and Mediterranean Regional Analysis
Egypt's Chamber of Tourism reports that a side effect of the Russian situation is a 30 percent decline in hotel bookings. The decrease will have a serious effect on the domestic poultry industry, a major consumer of imported corn and soymeal, as the tourist sector is one of its major customers...
Black Sea Regional Analysis
The Russian grain market was influenced by several very serious factors during the week in review. These included the sharp ruble devaluation, a suspension in purchases of its grains by most exporters and the government's higher, fixed minimal purchase prices. Russian Grain Markets Market Trend...
China In-Country Analysis
It is clear that China's new administration continues to consider the nation's agricultural development and reform to be its top priority as adjustments in policies are considered to address a number of issues. China Calls for Transforming Agricultural Development Model China's leaders and seni...
Middle East and Mediterranean Regional Analysis
Morocco's grain imports for the June-October period are up by 80 percent against last year at a total 2.2 MMT including 750,000 MT of wheat and 1.1 MMT of corn. The wheat is mainly from Ukraine, France and Russia with about 80 percent of the corn from Argentina and Brazil. News Up...
Oilseed Highlights
China's Ministry of Commerce is currently indicating the country's December soybean imports will be about 6.8 MMT, but that number is far below the likely total of well above 8 MMT. USDA inspected 8.737 MMT of soybeans destined for China in November. Big Increase in Conab's Forecast for Brazili...
Middle East and Mediterranean Regional Analysis
Reports from Turkey indicate that the government is now strictly enforcing GMO import rules, which have resulted in the rejection of several vessels of U.S. origin DDGS. Buyers in Egypt and Israel are said to be looking at purchasing the refused cargo. News Updates The Polish port of Gd...
Crude Oil Exports
Although oil state lawmakers of both parties support the lifting of the crude oil export ban, the rank-and-file non-energy state Republicans are more cautious. Indeed, the economics can seem counterintuitive as exports will be assumed to raise gas prices.Representative Joe Barton (R-Texas) has...
Oilseed Highlights
Brazil recently imposed a 7 percent blending mandate for combining biodiesel with petroleum diesel. The higher production would increase the use of soyoil by about 23.4 percent to 2.9 MMT from 2.35 MMT in CY 2014. European Rapeseed Production Forecasted to Decline in 2015 The European consultin...
Friends; Surprise; Okay
While Chinese government officials announced an effort to reduce fertilizer and pesticide use by 2020 in an attempt to decrease pollution, the U.S. EPA was in federal court insisting it did not need judicial involvement in determining allowable nitrogen and phosphate runoff into the Mississippi...
Indian Subcontinent Regional Analysis
India's annual edible oil demand stands at 18-19 MMT with an annual growth rate of approximately 4 percent. Last year's imports totaled 11.3 MMT, but that could increase if there is any further drop in the country's oilseed production. Slow Rapeseed-Mustard Sowing Could Impact Production, Incre...
Wheat – Part II
How great have world wheat crops been? Russia, Ukraine, China, India and Canada have all had record yields in at least two of the last three years. However, the outlook for the world's 2015 crop may be different.This is wheat week, as is evident by Monday's analysis and today's. Wheat has becom...
Black Sea Regional Analysis
Rosselkhoznadzor, the Russian Federal Service for Veterinary and Phytosanitary Surveillance, wants to decrease the volume of grain exports by tightening quarantine and phytosanitary control. It has also requested a ban on shipments through offshore countries. Russian Grain Markets Market...
Climate Change and Agriculture: Part Deux
Back in 2008, climate change was a hot topic for U.S. agriculture with both presidential candidates having proactive plans to address greenhouse gases and climate change. Now the EPA is proposing to lower the ozone standard to between 65-70 parts per billion (ppb).Back in 2008, climate change w...
Oilseed Highlights
Today's weekly USDA export sales report once again indicated there was a net decline in U.S. soymeal export sales last week of 22,300 MT. Meanwhile, last week's U.S. soymeal exports totaled 417,300 MT, the greatest weekly volume since 1998 and the third-highest ever. Negative Soymea...
Middle East and Mediterranean Regional Analysis
According to the FAO, Egypt's 2014/15 grain imports will drop by about 1 MMT against last year, but the total is still approximately 1 MMT greater than the five-year average. It expects wheat imports will remain at approximately 10 MMT due to several factors. Middle East and Mediterrane...
Southern States a Substantial Contributor to Record U.S. Soybean Crop
One factor that has not received a great deal of attention is how much Southern states have contributed to the increase in U.S. soybean production in recent years as a result of larger plantings and much higher yields.It came as no surprise yesterday that the USDA supply and demand report raise...
Middle East and Mediterranean Regional Analysis
Turkey's poultry industry is benefiting greatly from the Russian ban on EU imports with a jump in its poultry meat exports from approximately 50 MT per month to almost 6,000 MT in October. The country is also set to be the beneficiary of a $300 million allocation from USDA's GSM-102 program. &...
Indian Subcontinent Regional Analysis
Russia has expanded its economic footprints in India, an old ally, after the imposition of sanctions by the U.S. and its Western allies. The importation of Indian buffalo meat is now allowed and likely to grow with pork imports also a possibility. India's Expanding Meat Business Following the i...
More Things to Keep You Up at Night
The U.S. rail shuttle freight market, at least the BNSF, seems to be softening. If the weakness in shuttle rates stays, it should mean that interior basis levels will start to strengthen. That might shake some post-harvest selling loose.It is Halloween, and there seemed to be plenty to spook al...
Indian Subcontinent Regional Analysis
In a bid to incentivize farmers, the government of India (GOI) has announced an increase in the Minimum Support Price (MSP) for several of the 2014/15 winter-sown crops including wheat, mustard, barley, chickpeas and masoor (red lentil), etc. MSP Raised for Key Crops In a bid to incentivize fa...
Indian Subcontinent Regional Analysis
MSP Raised for Key CropsIn a bid to incentivize farmers, the government of India (GOI) has announced an increase in the Minimum Support Price (MSP) for several of the 2014/15 winter-sown crops including wheat, mustard, barley, chickpeas and masoor (red lentil), etc. The crops will be marketed i...
Argentina is Still a Mess
There is some question regarding whether as many total acres of all crops in Argentina will be planted as expected with the low prices, high input costs and current peso exchange rate.I recently met with an old friend who manages a large farming operation in Argentina. It was our annual meeting...
The Soybean Outlook Stays Bearish into 2015/16
The soybean outlook continues to have a negative picture unless there is a significant production problem in South America this season or a big soybean yield issue in the U.S. in 2015. However, there are always caveats when discussing potential outcomes 12-18 months from now.We wrote abou...
Talking About 2015 Already?
We are seeing a number of analysts telling producers they ought to be selling not just 2015 production, but also some 2016 production. This does seem very premature with December 2015 corn futures trading below $4.00.Friday's talk about what U.S. farmers might plant in 2015 drew some comments f...
Middle East and Mediterranean Regional Analysis
Egypt is considering a free trade zone with Russia, Kazakhstan and Belarus, also known as the Eurasian Economic Union. This would allow for increased exports of its agricultural goods to these countries, while providing a steady and secure source for wheat imports. News Updates Local wh...
Oilseed Highlights
The Argentine government claims that farmers and exporters are holding as much as 21-22 MMT of stocks as a hedge against inflation, which it considers financial speculation that is bad for the country as well as for those two groups retaining them. Argentine Government Seeks to Force Farmers to...
Oilseed Highlights
The recent sharp declines in global soybean prices may be good news for the world's soybean processors, food manufacturers and animal feeders after years of very high prices. However, this turn has U.S. farmers almost in shock and most likely South American farmers as well. Sizable Soy Export S...
Mercosur Regional Analysis
The only way for Argentina to be competitive in the current global corn market is to sell corn via combos (corn with meal). Presently, the country can offer to load both products at the same port and berth with little or no lineup. South American Soybeans The Chinese are celebrating a national...
Middle East and Mediterranean Regional Analysis
Tunisia's government reported that the 2014 grain crop is up by about 80 percent at 2.34 MMT. It was also noted that there will be a very significant drop in the quantity of grain that the country will need to import this year as a result. News Updates MEDITERRANEAN/MIDDLE EAST COMMENTS...
USDA’s 1 September Stocks Report
If there is a surprise in the stocks reported today, it is the extremely tight ending 2013/14 soybean stocks of 92 million bushels, the lowest ending soybean stocks since 1972. Analysts will have to revise their views about the minimum pipeline volume needed to bridge from one crop year to the...
Mercosur Regional Analysis
The Buenos Aires Grain Exchange recently toured the region south of Buenos Aires and estimates that 150,000 hectares have been entirely lost to flooding. This acreage consists of 60,000 hectares planted to wheat and 90,000 planted to barley. Soybeans There is presently no wait time at the port...
Middle East and Mediterranean Regional Analysis
Egypt's GASC had a very busy week with two tenders and surprising purchases of wheat from France and the U.S. It bought 180,000 MT of French wheat at an average price of $247.40/MT CNF and 55,000 MT of U.S. soft red winter wheat at $244.42/MT CNF. News Updates Russia announced that its...
A Few More Things to Keep You Up at Night
The market is assuming another record Brazilian soybean crop in 2015, based on more planted acres and another super yield. One potential impediment to this forecast is the significant collapse in soybean prices. Market Assumes another Record Brazilian Soybean Crop in 2015 That assumption is aga...
Oilseed Highlights
Stoller Enterprises, a Houston-based agronomic firm, announced yesterday that it was able to harvest 214.7 bushels of soybeans per acre (14.44 MT/hectare) in yield trials conducted at a farm in the Texas Rio Grande Valley. Huge U.S. Soybean Crop Gets Bigger As expected, USDA today raised its es...
Mercosur Regional Analysis
Argentine farmer are heading into the corn planting season, and expectations are that more acreage will be planted early as this past year's strategy of doing it later did not work out well. Argentina's Possible Return to Early Corn Next Season Argentine farmer are heading into the corn plantin...
Middle East and Mediterranean Regional Analysis
Along with Egypt's new wheat relationship with Russia, there is news that it will have a direct freight service to Black Sea Russia in order to facilitate the flow of Egyptian fruit and vegetables to that country and the shipping of grain back to Egypt. News Updates MEDITERRANEAN/MIDDLE...
Mercosur Regional Analysis
Various participants in Argentina's corn market expected that prices could temporarily heat up when the government recently announced a shutdown of corn licenses for major exporters. However, that did not occur. Significant Decline in Argentine Corn Premiums and Planting Various participants in...
Crop Insurance Premium Subsidies
The underlying fundamental issue with crop insurance is its actuarial soundness, and gaining higher levels of coverage through premium subsidies has been a key leveraging tool to bring more acres with better actuarial histories into the program.As commodity markets went on a multi-year bu...
Dead Zones; Rating Africa; Trade Games; Water
One initiative arising out of the U.S.-Africa Leaders' Summit this week in Washington is a commitment by the U.S. Agency for International Development to produce later this year an assessment on the ease of doing business and investing in Africa's agriculture. Runaway Runoff The so-called "Dead...
Dietary Guidelines: Politics on a Plate
Sustainability is the latest ingredient to be mixed in to the nutrition policy making process. It is also a topic that the Dietary Guidelines Committee has addressed this year by creating a subcommittee dedicated to this issue.We've commented frequently on the new consumer trends in food consum...
Middle East and Mediterranean Regional Analysis
Turkey's reduced crop production, resulting from several weather-related issues, is negatively impacting both wheat and barley exports as well as increasing the volume of imports required to meet its needs. News Updates With the month of Ramadan coming to an end last Monday, most countr...
Railroad Backlog Emerging as Market and Regulatory Issue
The railroads report that they are working on solutions to the rail backup problem for the fall grain harvest season, and BNSF projects that it is on track to have eliminated past due deliveries by mid-September. The issue is not isolated to railcars, however.Rail backups were wreaking havoc th...
Lower Prices Will Mean Smaller Margins
The six-year run of high commodity prices coupled with generally good yields and record net farm income have also allowed all of the ancillary industries to operate with very wide margins. However, that is likely to change with the current low prices. The six-year run of high commodity prices c...
China In-Country Analysis
Although China has announced a record harvest this summer, a major concern among rural development researchers is sustainability, considering the combination of China's growing population, shrinking productive land due to urbanization, desertification, water shortages and pollution. China Annou...
Indian Subcontinent Regional Analysis
While India's monsoon has somewhat rebounded, farming communities have been impacted by the delayed rains. Rural demand is diminishing with crop selection and productivity expected to be affected as well as the country's overall economy. The Late Monsoon and Declining Demand The delayed monsoon...
More Scrutiny for EPA’s Waters of the U.S. Rule
To date, the one EPA action that has triggered a complaint by the National Farmers Union (NFU) is the setting of the 2014 biofuels volumes, which its letter to the EPA mentions as a catalyst to the new scrutiny over the new definition of the waters of the U.S. When being confirmed and early in...
Middle East and Mediterranean Regional Analysis
Iraqi grain traders advise that it has become impossible for Syria to deliver the wheat to Iraq that was arranged in June 2013 as truckers are not able to avoid the current difficulties in both countries that have limited transportation access. News Updates MEDITERRANEAN/MIDDLE EAST COM...
Indian Subcontinent Regional Analysis
India's 2014/15 budget attempts to target economic growth at 7–8 percent over a three-four year period after less than 5 percent growth for the past two years, and agriculture remains a high priority. Economic Survey of India: Key Points The most recent report from World Bank pegs India as the...
Climate Change Impact on Agriculture
Potential impacts of climate change that do not consider agricultural adaptation are of limited use and insight. This is a long-term trend, so anticipating farmers' spontaneous and planned responses to it should be included in projecting future effects.USDA recently held an Expert Stakeholders'...
Does Rain Make Grain or Not?
Everyone associates crop stress with heat and dryness. It can also be caused by too much water, and this is starting to attract some attention as the rains just won't stop across a significant portion of the U.S.This early summer is shaping up to be the wettest ever for a significant portion of...
Market Commentary
Standard commodity analysts may soon adjust their stories to proclaim, "Production will be large but demand is even larger!" Similar market dialog occurred soon after a bumper crop in 1994. General Comments Today's trading was the normal activity of lining up positions according to expectations...
Middle East and Mediterranean Regional Analysis
According to the FAO, Egypt's wheat and corn crops this year will be slightly above average size this year, but it expects that the country will have to import a near record 18.2 MMT of grain in 2014/15, a 5 percent increase from 2013/14. News Updates MEDITERRANEAN/MIDDLE EAST COMMENTS...
Indian Subcontinent Regional Analysis
There is hope that India's new government will bolster the economy's upward turn with revisions in policy. Industrial production rose in April 2014 as inflation decreased, but the delayed monsoon season brings concern about its impact on crops and agricultural output. New Hope for the Indian Ec...
Mercosur Regional Analysis
This year Argentine farmers have sold 1.57 MMT fewer soybeans than the total for the same date a year ago. The most important information for the market is the unsold balance that producers retain, which is 35.76 MMT for this crop. Argentina The Rate of Currency Devaluation in Argentina Increas...
Selective; True Colors; Inequality
FAS Agricultural Counselor Allan Mustard (nominated to be U.S. Ambassador to Turkmenistan) has issued a report exposing how New Delhi is substantially subsidizing Indian agriculture, but failing to report it to the WTO as required. Selective Approvals EU environment ministers are likely to vot...
Political Instability in Ukraine – the Fertilizer Fallout
A major determinant for the competitiveness of Ukrainian fertilizer on global export markets is its cash cost of production, and the country's current conflict presents a threat to this domestic industry. U.S. President Barack Obama is scheduled to meet Petro Poroshenko, Ukraine's newly electe...
Unintended; False; Survey Says
The group People for the Ethical Treatment of Animals (PETA) has sparked furor with its "Got Autism?" campaign that seeks to link consumption of dairy products with increased rates of the disease. Unintended Policy Consequences Most aggies will pay little attention to the Obama administration's...
Indian Subcontinent Regional Analysis
As India's milk demand rises for many reasons, the sourcing of good, quality milk is one of the main concerns for the large dairy processing companies as small and marginal dairy farmers still account for 70-80 percent of total production. Dairy Sector Requires More Investment in Backward...
MCC/TF; Denials; Shorts
Ideas of all stripes can be threatening to some, but Europe faces the unique risk of completely offshoring the pursuit of scientific ideas. Tie MCC to TF The 54 member countries of the Africa Group at the WTO have said that they will not implement trade facilitation (TF) until an overall Doha R...
Middle East and Mediterranean Regional Analysis
The Chamber of Commerce in Egypt has announced that it is working with four banks there to provide financing for the expansion of the poultry industry in Upper Egypt, which will certainly lead to increased feed consumption and growth in the poultry feed business as well. News Updates ME...
The Issue of Rail Logistics
The situation in Canada is far worse than in the U.S., and all of this has prompted much talk about how long the logistical problems will last. Some are even suggesting comparisons to the problems in Brazil.Rail logistics across the Northern Plains and Canada have been a real mess since last fa...
India’s Election Result and the Global Phosphates Market
The prospect of a new government with a strong economic agenda has recently helped the INR recoup some of its losses, which could result in improved affordability of DAP imports and a rebounding of Indian DAP purchases. Last week's Indian election resulted in an exceptionally strong win for Na...
China In-Country Analysis
China's Ministry of Agriculture (MOA) and Ministry of Education together recently launched the "Training Plan for New Type Professional Farmers." This initiative has come as China struggles to improve agricultural efficiency amid a decrease of rural laborers. China's Corn and Hog Prices Increas...
More Things to Keep You Up at Night
This late spring will result in fewer corn acres across the Northern Plains. North Dakota, for example, was expected to plant 2.95 million acres of corn in 2014, down from 3.85 million acres last year. Just 3 percent of the state's intended corn acres were planted as of 11 May. Earlier Concerns...
Dying for Rice; Faithless; Naked Tommy
It is hard to complain after pondering the conditions in North Korea where it is reported that Supreme Leader Kim Jong Un has ordered up some reforms in agriculture. He is even going to try a little capitalism. Plant Rice and/or Die It is hard to complain after pondering the conditions in North...
Southeast Europe Regional Analysis
For the moment, the trend of increasing quality that was observed in the Bulgarian and Romanian wheat crop during the past five years will be reversed as farmers are using a higher volume of quality seeds and more fertilizers and pesticides every year. Milling Wheat The Black Sea market once ag...
Ag Review: Commentary on Opportunities in Agriculture
Opportunity: Complementarity The TTIP negotiations are an opportunity, despite the skepticism. The challenge is overcoming all of the pitfalls and finding complementarity. Aquaculture: Leading Food Production Opportunity Aquaculture production has grown at an annual rate of 8.3 percent and must...
Trade Trumped; Greek Spin; Cow Poop; Etc.
Given that free trade is about unleashing economic comparative advantage, there is much to worry about in Greek agriculture. Security Trumps Business, Again The spin following the Trans-Pacific Partnership (TPP) negotiations in Tokyo includes "breakthrough" and "a path forward," but there is so...
Middle East and Mediterranean Regional Analysis
Egypt's government has advised that current stocks and orders of wheat will last until 19 June 2014, while the country's wheat crop has a very wide range of production estimates. News Updates MEDITERRANEAN/MIDDLE EAST COMMENTS This year's Egyptian wheat crop has a very wide range of pro...
U.S. Soybean Outlook
We note that every year at this time we have looked at projections for rapidly building soybean ending supplies in the U.S. that have yet to materialize, either because of lower yields or increased demand.The soybean market continues its push to new highs despite all the pleading from the bears...
Middle East and Mediterranean Regional Analysis
Jordan will need to continue importing close to 100 percent of its needed wheat supply, according to USDA FAS in Amman. With the influx of Syrian refugees, wheat demand should increase as it seems to do every year. News Updates MEDITERRANEAN/MIDDLE EAST COMMENTS The local USDA forecast...
Southeast Europe Regional Analysis
With 27 MMT of exports, the EU wheat carryout stocks will be significantly tighter than last year. However, Western Europe's crop seems to be developing faster this year due to favorable weather. Milling Wheat The Black Sea market remained mostly unchanged last week with limited offers and litt...
Black Sea Regional Analysis
The president of the Russian Grain Union said Russia's current financial problems may negatively impact the planting of grains. Ukraine has planted early spring grains and leguminous crops on 90 percent of its target area as of 7 April 2014. Russian Grain Markets Planting Update Russian farmers...
Ag Review: Crimea and it's Implications
Crimea River History suggests that geopolitical troubles have less impact on food production than fundamentals like the weather. Crimea: Present Situation, Impact on Ag Business and Outlook A firsthand account of the situation in Ukraine and its impacts on grain and oilseed markets. Caging the...
Black Sea Regional Analysis
As of 31 March 2014, Ukraine has exported 27.351 MMT of grain from the beginning of the market year, and preliminary forecasts indicate the country's grain exports total may reach 33 MMT. Russian Grain Markets Planting update Russian farmers planted spring grain crops on 913,900 hectares (2.9 p...
Wrong; Imperfect; Smuggled and Quantified
A WTO agriculture committee meeting revealed why it will be difficult to get the Doha negotiations back on track. Naturally Wrong Recently installed Federal Judge William H. Orrick of Northern California ruled in a plaintiff's favor that General Mills' marketing a product as "natural" when it c...
Southeast Europe Regional Analysis
The EU has now allocated 22.7 MMT of wheat export licenses versus 15.1 MMT a year ago, and its wheat balance will be dangerously tight at the end of the campaign if the final total approaches 26 or 27 MMT. Milling Wheat The Black Sea market remained mostly unchanged last week without any...
Oilseed Highlights
It is rare that palm oil trades at a premium to soyoil, but a shortage is resulting in higher prices that are expected to lead to substantial increases in demand for soyoil, sunflower oil and rapeseed oil. Chinese Crushers Band Together to Slow Soybean Imports and Crush Large negative soybean c...
Middle East and Mediterranean Regional Analysis
Moody's is reviewing the ratings for 10 Turkish banks with the trade expecting that there could be a general downgrade for all involved, affecting their international operations and financing of grain imports. News Updates MEDITERRANEAN/MIDDLE EAST COMMENTS There is a great deal of talk...
Middle East and Mediterranean Regional Analysis
Buyers in the Levant, particularly Jordan and Syria, who source all of their corn from Ukraine are very concerned about a possible force majeure situation, because they don't have any easy source for a backup supply. News Updates MEDITERRANEAN/MIDDLE EAST COMMENTS North African wheat bu...
Ag Block; Fertilizer BS; Crimea
Mega-retailer Walmart announced that it will require suppliers of agricultural crops to reduce fertilizer use on 20 million acres by 2020. Ag is Stumbling Block U.S. Trade Representative (USTR) Michael Froman was asked by Financial Times reporter Edward Luce if Japan's opposition to conceding m...
TTIP Strategy; Aiding Ukraine
The Transatlantic Trade and Investment Partnership (TTIP) negotiations are hung up on tariffs, but Europe's aspiration for geographical indicators is an area of huge leverage for the U.S. TTIP Strategy The Transatlantic Trade and Investment Partnership (TTIP) negotiations are hung up on tariffs...
Middle East and Mediterranean Regional Analysis
A biotech conference in Ethiopia with African and European scientists last week has come out strongly in support of using agricultural biotechnology as a means to enable Africa's efforts to provide for the population's nutritional needs. News Updates MEDITERRANEAN/MIDDLE EAST COMMENTS E...
Middle East and Mediterranean Regional Analysis
According to a comment from Iran, Ukraine may not be able to complete their outstanding corn business because of its dwindling supplies and domestic unrest. News Updates MEDITERRANEAN/MIDDLE EAST COMMENTS Australian grain traders report that 28,000 MT of durum wheat have been shipped to...
TPP Threats; Getting Along; Manure
If adding labor to industry groups is a good idea, why not just throw all of the disparate interests onto the same committee and enjoy a literal three-ring circus? Loss of Face This week's Trans-Pacific Partnership (TPP) negotiations in Singapore will not conclude the talks and instead shows a...
Indian Subcontinent Regional Analysis
India is likely to produce 263.2 MMT of food grains in 2013/14. This is greater than the target of 259 MMT established by the agriculture ministry in September 2013 and the 257.13 MMT produced last year. Food Grains Production–Second Estimates India is likely to produce 263.2 MMT of food grains...
What Is Wrong With Being Big?
Farming is like any other business that produces and sells goods and services. Its profitability depends on maximizing productivity, efficiency and economies of scale.We grew up in eastern South Dakota a long time ago when agriculture was not just the leading industry in the area, it was the on...
Black Sea Regional Analysis
The Russian Grain Union supports the government resolution to allow GM seeds for use in sowing as of 1 June 2014. Russian Grain Markets: 12-18 February 2014 Grain Market Interventions A stock exchange trading was held on 18 February within context of the grain market intervention in Russia. The...
Market Commentary
Wheat, the soy complex and now corn are all re-emphasizing the lesson to both speculative and commercial traders that excessive reliance upon automated indicators can result in substantial returns being left on the table. General Comments Corn, wheat and the soy complex all closed higher today...
North American Logistics Not Getting Better
There are still more than 50 vessels waiting to load from the west coast of Canada. That totals more than 2 MMT of grain and oilseeds.We have written on several occasions recently about the logistical mess in Canada and, to a lesser extent, in the U.S. It hasn't improved, and some will argue it...
Black Sea Regional Analysis
Russian seaports increased the volume of grain shipments in January 2014 to 1.2 MMT, 2.9 times more than the total in January 2013. Russian Grain Markets: 5-12 February 2014 Grain Market Interventions Regular stock exchange trading was held 11-12 February within context of the grain market inte...
Global Biofuel Growth
It would seem the real future growth for U.S. biofuels lies in the export market.New reports indicate that Navigant Research has released a study projecting that global biofuel use will grow from 32.4 billion gallons in 2013 to 51.1 billion by 2022, an increase of 18.7 billion gallons. This pro...
Ag Review: The Outlook for 2014
2014 Agripalooza The market, government and technology development will all three conspire to change things in the agrifood sector in 2014. It will be exciting for some and disappointing for others. 2014 Outlook for the Global Soybean Sector The U.S. and global soybean sectors have enjoyed reco...
Farmers’ Major Decision
Today's final passage of a new U.S. farm law will pose a tricky decision for farmers – do they select the short-term protection of the Agriculture Risk Coverage (ARC) program, or the potentially longer-term subsidies under the Price Loss Coverage (PLC) program. Farmers' Major Decision; Politici...
Who Remembers Low Prices?
The current marketing environment will lead to some significant changes in attitudes.Two years ago, I hired a 28-year old to work with me in my farm marketing consulting business. He had three years' experience in the commodity business and grew up on a farm. His Dad and brother still farm. It...
China In-Country Analysis
Chinese society's public debate on GM food has greatly intensified and evolved from a health issue to one of national security. China's Beef Price Soars before the Chinese New Year As the Chinese New Year approaches at the end of this month, China's beef price is soaring. According to the Minis...
Indian Subcontinent Regional Analysis
In the first seven months of 2013/14 (April–October 2013), foreign direct investment (FDI) in the food processing sector was $2.15 billion, and there are expectations that the investments will increase in coming months. Investment in India's Food Processing Sector India ranks second in the worl...