Recent Softs Analysis
CFTC COT Report Analysis
The major finding of Friday’s CFTC report is that funds are increasingly and somewhat aggressively bullish corn as they rapidly expanded a small long into a near-100,000 contract bullish position. Over the period 5 through 12 November, funds bought over 96,000 contracts, which is the 11th large...
USA Gone Nuts
While oilseeds receive much of the attention, tree nuts, which are technically a seed and containing oil, have gone even more gangbusters for U.S. producers in recent years. Almonds have received much of the focus as the U.S. produces nearly 80 percent of the crop and a comparable share of the...
CFTC COT Report Analysis
The major finding of Friday’s CFTC report was the confirmation that funds have officially flipped their formerly massive net short in corn to a net long. After buying back nearly 40,000 contracts last week, funds now sit long 3,035 contracts as of 5 November, a position which was extended signi...
CFTC COT Report Analysis
Through 29 October, funds continued their aggressive short covering in the corn market with strong export sales justifying the move. Funds reduced their net short position by about 60 percent last week, and now hold a relatively small position of 35,000 contracts short. The continued exit from...
CFTC COT Report Analysis
Through 22 October, funds engaged in the expected short covering in the corn market amid the unexpected surge in exports. Funds’ total buying volume, however, was below expectations at just shy of 20,000 contracts though they certainly added to that number after Tuesday’s data reporting deadlin...
Going up with a Bang
A futures contract that persistently moves up or down by just a penny or two each day imposes its own burden on the market. While speculators are said to prosper from volatility, and sellers want higher prices and buyers prefer them lower, everyone prefers a story. Apparently, the cotton market...
CFTC COT Report Analysis
Through 8 October, funds continued to exit their formerly massive short positions in corn and soybean futures and now hold a small fraction of that commitment. Funds covered 40 percent of their short position in soybeans and are now only short 18,000 contracts. Similarly, funds bought back half...
Cocoa Market Update: Prices Rise as Stocks Fall
At the end of July 2024, WPI published an article looking at the drivers of the cocoa market’s massive rally in 2023 and 2024 and that offered an outlook for MY 2024/25. This article offers a brief update on market conditions and developments that have occurred in the two months since our...
Say Cheese!
Ilena Peng from Bloomberg has written about the expansion of U.S. cheese exports. Former French President Charles de Gaulle once noted that his country has hundreds of different cheeses and the U.S. had hundreds of different religions. But the U.S. has since become a major producer of many diff...
Coffee Rally Stalls as Weather Shifts, Bear Move Ahead?
Coffee futures have been on a massive rally in 2024 with the ICE “C” contract rising above $2.60/lb last week, breaching that point for just the fifth time since 1970. The catalyst for the rally has been well reported this year, with declining stocks and weather issues in major prod...
Kenya’s Crop Choices
In yesterday’s WPI Middle East, Mediterranean and Africa Regional analysis report, it was noted that Kenyan farmers are switching from growing maize to growing sweet potatoes. The latter being easier to grow than drought sensitive maize and netting three crops per year. But whether maize...
CFTC COT Report Analysis
Funds activity in the ag futures markets was more subtle than expected for the second straight week. Specifically, fund short-covering in the corn and wheat markets lagged expectations by a wide margin. In corn futures, funds bought back 3,700 contracts (2.6 percent) of their prior short, which...
CFTC COT Report Analysis
Funds activity in the ag futures markets was more subdued last week than expected. Funds were slight net buyers in soybeans, soymeal, corn, and across the wheat complex, but the percentage shifts in their positions and overall buying volumes underperformed expectations. In the soy complex...
CFTC COT Report Analysis
Funds continued covering shorts across the grain and oilseed complex through last Tuesday as futures trended firmer heading into the September WASDE. The most notable short covering was in wheat where funds bought back 30 percent of the CBOT position and 33 percent of their HRW short. The buyin...
CFTC COT Report Analysis
Friday’s CFTC report featured the expected trends in managed money funds’ activity, but the volume of trade and the degree of change in their position was below expectations. Funds covered about 21,000 contracts of their soybean futures short last week (12.5 percent of the prior wee...
Pulses Not Pulsing
The International Grains Council (IGC), Rabobank, and others have followed countries and companies moving into the pulses space. It is logical that plant-based proteins like pulses should be an attractive market. However, the compound average growth rate (CAGR) for the larger category is only 2...
Sugar Price Response
The March 2025 No. 11 sugar contract rebounded last week but it is still down over 20 percent from its high. Analysts started the year expecting sugar prices to rise this year on short supplies. The International Sugar Organization is still warning of a net deficit once global consumption is su...
CFTC COT Report Analysis
Friday’s CFTC report was largely in-line with expectations as it showed mild short covering by managed money traders across the soy complex and corn futures. Funds fought back about 3 percent of their corn short, which continues to hover near this year’s record low values. Funds wer...
CFTC COT Report Analysis
Friday’s CFTC report showed funds continuing to expand their short position in soybeans and added about 8.5 percent to their net position last week. That will come as no surprise to anyone watching the markets with soybeans having reached new contract low amid a dearth of fundamental or t...
Cotton Market Basics and 2024/25 Outlook
Following recent client requests, WPI provides the following overview of the cotton market, its basic structure and recent trends, and a short outlook for MY 2024/25. Cotton Production World cotton production is highly concentrated with four countries (China, India, Brazil, and the...
Dairy Trade Expands Despite Hurdles
Concerns about faltering U.S. dairy exports last year have now subsided as growth has returned to the sector. This despite: production growth leveling off as increases in milk per cow do not offset the fall in the number of dairy farms; an 18 percent rise in dairy futures over the past year...
CFTC COT Report Analysis
Friday’s CFTC report was in line with expectations as it showed minimal net fund activity with managed money traders remaining heavily short the major ag commodities. Funds bought back just 1 percent of their short position in soybeans last week while adding an equal share to their soyoil...
Oats Decline
A relatively minor crop, just a little over 2 MMT of oats are globally traded each year. Still, it is an important niche and yet seemingly in decline. This year’s crop is slightly larger than last year’s, but that isn’t saying much since that one was the smallest in over a dec...
Citrus Impacts
The global production of oranges is nearly five times greater than the output of lemons and limes. Their distribution is different as well. Over a third of oranges go to processing, versus a quarter of lemons and limes. And less than 10 percent of oranges are moved into the export market, versu...
Spuds Sputter
It is reported that EU potato production has fallen by 37 percent over the past 20 years. This is consistent with U.S. potato production falling by 10.6 percent over the past five years. Some cite the impacts of climate, disease, and changing consumer demand (health) for the declines. Productio...
CFTC COT Report Analysis
Friday’s CFTC report showed funds more aggressively covering shorts in the grains and oilseed sector heading into the August WASDE. The most notable buying was in corn, where funds bought back 50,000 contracts or about 17 percent of their previous short position and have now shed over 100...
Cocoa Consumption and Demand – How Will EUDR Affect the Industry?
Two weeks ago, WPI published an article looking at the supply-side factors in the cocoa market and what has been driving the massive price rally. With this article, we will look at the consumption and demand-side factors that are likely to influence the market and pricing for LH 2024 and into 2...
Proposed New Subsidy Program
Two Georgia Congressional officials, Senator Jon Osoff and Rep. Sanford Bishop, have introduced legislation that would extend crop loss payments to seasonal and perishable crop producers. Payments would be triggered when a crop’s national average price drops below its five-year average re...
CFTC COT Report Analysis
Friday’s CFTC report shows that funds were – through Tuesday’s data reporting deadline – cautiously covering shorts in corn and soybeans as they continued to edge back from their recent record-large short position in both commodities. That was as little surprising given...
CFTC COT Report Analysis
As expected, short-covering was the major theme from the latest CFTC Commitments of Traders report, which showed that managed money funds backed off from the record-breaking positions they previously amassed. Funds bought back about 10K contracts in soybeans and about 19K in corn, but the buyin...
Cocoa: Will the Challenges of 2023 Continue into 2024?
Recently, WPI has received requests from a few clients to provide some analysis on the cocoa market. Clearly, there is a reason for this request as cocoa prices have been exceptionally volatile and futures more than doubled over the nine months from August 2023 through April 2024. I...
Perceived Rice Shortage
Rice prices have begun to normalize after spiking recently due to India fearing a shortage and imposing export restrictions. This sparked panic buying and resulted in higher prices. The price of rice early this year was around $602/MT, substantially higher than the historical average of $381/MT...
CFTC COT Report Analysis
The latest CFTC Commitment of Traders report highlights the ongoing bearish sentiment for oilseed and grain markets with managed money traders remaining massively short agricultural commodities. Perhaps the most notable item in this week’s report was the expansion of the record-large net...
Sugar Volatility
It has been a volatile year for global sugar prices. They hit 27.95 cents/pound on 6 November 2023 – the highest since 1980. They fell 30 percent to 19.69 cents/pound in May and now are running around 20.26 cents/pound. It is difficult to draw a complete supply/demand imbalanc...
CFTC COT Report Analysis
Funds now hold their largest short position in corn futures since at least 2015 after adding another 9,000 contracts to their holdings last week. That, and their selling of nearly 30,000 soybean contracts to bring their short in that market close to the record short were the headlines from this...
Geopolitical Trade Substitution
Historically, Canada has been the fourth largest producer of green peas and the largest exporter of the product. Canada’s global market share for the green pea trade was 37.9 percent in 2022, while Russia supplied 13.7 percent. Meanwhile, China is both the largest producer and importer of...
CFTC COT Report Analysis
The weekly CFTC report was in-line with expectations as it showed funds remaining dedicated net sellers across oilseed complex. The only exception was the buying in soyoil, where funds took back nearly half their short position in that contract amid the fears about the Indonesia-China trade war...
Misalignment of Land and Labor
U.S. fruit and vegetable growers made their annual trek to Capitol Hill but instead of their usual gift of a full box of fresh produce for the Members of Congress, they only filled it a quarter full. Their message: fresh fruit production has fallen by 10 percent and fresh vegetable output has g...
CFTC COT Report Analysis
As expected, funds were proven to be staunch net sellers last week, according to Friday’s CFTC report data. Funds were the most aggressive in corn where they sold nearly 90,000 contracts and obtained their largest short position since April and the largest early-June short since 2020. Fun...
No Mimosas
Brazil produces more than a third of the world’s oranges and controls 70 percent of global exports. This drought, plus disease and other issues has caused production to fall by nearly a quarter. As a result, prices have spiked. It may not be a proxy for soybeans and corn since oranges are...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
Where are the Veggies?
As noted yesterday, USDA estimates that the food category incurring the most inflation this year in the U.S. will be fresh vegetables. Part of the problem is the disconnect between encouraging consumption of this food group, and domestic production. About 40 percent of fresh vegetables are impo...
CFTC COT Report Analysis
The big surprise in this week’s CFTC report was the expansion of funds’ short position in corn by over 54,000 contracts. Funds had been aggressively exiting these shorts but apparently decided the threats to the U.S. planting effort and Brazil’s safrinha crop were insufficient...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
Milking Future Demand
U.S. and Mexican dairy industry representatives met and renewed their commitment to “collaborate and advocate for mutually beneficial dairy policies. This was a policy initiative begun back in 2016. At first glance, the effort seems surprising given that Mexico exports more than three tim...
CFTC COT Report Analysis
The surprise in this week’s CFTC report is that – through Tuesday’s data reporting deadline - funds were more aggressive covering grain/oilseed shorts than expected. The headline number is that funds bought back over 111,000 contracts and are now only short about 30,000 contra...
Meeting with the Cotton Hopeful
Although many small developing countries produce cotton, about five countries produce most of the fiber. China and India alone account for nearly half the global output of cotton. Four small African countries (Benin, Burkina Faso, Chad, and Mali) formed the Cotton-4 or C-4 consortium many years...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
Eat less, Toot Less
Plants such as beans, lentils and chickpeas are the nutritional rage. They are plant derived foods with higher protein content and thus their production and consumption should be on the rise. But alas, the USDA data is not comporting with that nutritional advice. Over the past four years,...
CFTC COT Report Analysis
Based on futures’ price action late last week and early this week, one would be expecting funds to have been net sellers in the major ag commodities, and that’s exactly what happened. Funds expanded their short soybean position by some 30,000 contracts, making it a new five-year low...
An Era up in Smoke
British Prime Minister Rishi Sunak has proposed that anyone turning 15 years of age or younger in 2024 will be banned forever from purchasing cigarettes. Eash year, the age restriction will be raised by one year. The bill also makes vapes less appealing. The goal is to start the first generatio...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
Cocoa Puffs
The global cocoa price hit $10,120/MT yesterday, triple its price last fall, and it is still unlikely to be at its apex. The cause is a sharp drop-off in production in Ghana and Côte d’Ivoire, the two countries that produce nearly 65 percent of the world’s cocoa beans. Some ha...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
We All Scream
President Joe Biden is “bad talking” about the food industry, accusing it of greed for raising prices. While his focus was on “chips” and shrinkflation, he could also have talked about his favorite food, ice cream. After all, his generation – those over age 75, are...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
Peas Please
As noted in today’s Black Sea report, the price of peas in Russia are rising as exports go unfettered by any export tax. Canada is by far the largest exporter of peas with a two-thirds market share. But Russia is second with a 12.4 percent market share, the U.S. exports about 9 percent of...
Cotton is King
At least it is in the U.S. South. While production increased last year in Pakistan and Brazil, USDA predicts that most of the increase in global production in 2024/25 will be due to the expansion in U.S. output. The area under production is forecast to expand by 8 percent. Production in India a...
Hops Market Declines
After a decade of blistering growth, the U.S. domestic beer market declined in 2023. The reasons given include some consumers opting for a healthier, alcohol-free lifestyle, and others switching to drinking higher alcohol spirits. This increases the importance of exports but both beer and hops...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
CFTC COT Report Analysis
The weekly CFTC report was unsurprising in that managed money funds were net sellers through Tuesday’s data reporting period, which obviously coincided with the new contract lows in the grain markets. Funds were aggressive net sellers in corn, SRW wheat, and soyoil but were more cautious...
Honey Rebounding
Global honey production fell 6.3 percent between 2017 and 2019. Culprits for the decline included Colony Collapse Disorder and the use of pesticides such as neonicotinoids. However, since then production has rebounded by 4 percent and continues expanding on an upward trend. In Europe where the...
CFTC COT Report Analysis
The weekly CFTC report featured a few surprises, most notably the 11,000-contract net buying in the Chicago wheat market. Heading into the report, expectations were that it would show funds expanding short positions heading into the February AOF from USDA. Rather, funds were parging back shorts...
CFTC COT Report Analysis
The weekly CFTC report was in-line with expectations as it showed funds still being heavy net sellers in soybeans and corn with light short selling in the SRW wheat contract. Equally unsurprising was the net buying by managed money traders in soymeal and soyoil as they’ve largely whittled...
Eat Your Rice
South Korea wants more rice to be consumed and is subsidizing rice for college students, the cohort least likely to eat breakfast, and is incentivizing food products made from rice flour. Rice production is dropping as population growth has stalled, but rice consumption is dropping even faster...
Targeting India’s Rice Subsidies
At the behest of the domestic rice industry, U.S. House Ways & Means Committee Chair Jason Smith (R-MO) asked the U.S. International Trade Commission to conduct Section 332 fact-finding investigation of global competitiveness in rice, which the industry claims is skewed by unfair trade prac...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
Sweetly Accessible
World sugar prices have begun to moderate after hitting a multi-year high in 2023. The high of $0.28/pound last year was the highest price since 2011, but well below the $0.65/pound experienced in 1974. In real terms, sugar was the equivalent of $4.00/pound that year. That year also saw the lar...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
Food Sovereignty Flipped
The government of Mexican President Andrés Manuel López Obrador and now the social justice warrior class in the U.S. are framing the impending ban on GMO corn imports as fulfilling their right to food sovereignty. U.S. corn exports to Mexico are around 17 MMT worth about $3.3 bill...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
India’s Rice Squeeze
The New Delhi playbook for staple crops is to offer farmers a generous Minimum Support Price (MSP), donate the extra output to the nation’s poor, and then dump on the world market any surpluses that would otherwise depress domestic prices. India’s rice surplus was around a quarter o...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
Smashing Success
Global demand for avocados has been growing at 7 percent per year. Mexico produces 30 percent of the world’s avocados but supplies 45 percent of those in international trade. The U.S. is by far the largest importer. Bloomberg cites the years-long drought in Spain as a threat to that count...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
CFTC COT Report Analysis
New: WPI has added softs (cocoa, coffee, cotton, and sugar) and selected energy futures (NYMEX natural gas, crude oil, RBOB gasoline, and Chicago ethanol) to this report. Consequently, the attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net...
Tilting at Windmills
The American Salad Belt is largely on the West Coast and Congressional representatives mostly from that region have introduced legislation (The Specialty Crops Reporting on Opportunities and Promotion Act) intended to boost the export of crops like fruits and vegetables. The political represent...
Regional Favorites
Just as North America both produces and consumes most of the world’s turkey meat (with a small honorable mention to Brazil), it also has a unique fascination with cranberries. The U.S. produces 65 percent of the world’s cranberries and adding Canada makes North America the supplier...
CFTC COT Report Analysis
New: WPI has added softs (cocoa, coffee, cotton, and sugar) and selected energy futures (NYMEX natural gas, crude oil, RBOB gasoline, and Chicago ethanol) to this report. Consequently, the attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net...
Usual Problem for Specialty Crops
The Biden Administration has cranked up its outreach to politically red rural America with USTR Katherine Tai now following President Biden’s focus on agriculture. Instead of picking up rural Republican votes in 2024, the goal is said to be at least reducing voter turnout in these areas...
CFTC COT Report Analysis
New: WPI has added softs (cocoa, coffee, cotton, and sugar) and selected energy futures (NYMEX natural gas, crude oil, RBOB gasoline, and Chicago ethanol) to this report. Consequently, the attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net...
Export Sales
Export Sales and Shipments for October 20-26, 2023. Wheat: Net sales of 275,600 metric tons (MT) for 2023/2024 were down 24 percent from the previous week and 43 percent from the prior 4-week average. Export shipments of 100,500 MT--a marketing-year low--were down 24 percent from the prev...
White Commodities Focus
White commodities is an American euphemism for three crops, cotton, rise, and sugar, that are all white in color and each have statutory programs considered complex or unique. They are generally produced in the U.S. south, and their traits include: Cotton: A chemically intensive crop with the l...
Tangential Rice Market Impacts
Given current tight global rice stocks and high prices (see graph below), the question is how much wheat will be substituted for food or feed use. Rice prices have dropped since their peak early this year, but wheat is still 35 percent cheaper by weight than rice as a food grain. It is one reas...
CFTC COT Report Analysis
New: WPI has added softs (cocoa, coffee, cotton, and sugar) and selected energy futures (NYMEX natural gas, crude oil, RBOB gasoline, and Chicago ethanol) to this report. Consequently, the attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net...
Tale of Two Commodities
EU olive oil and U.S. oranges are each having a challenging year. Beyond that the similarities are few. The EU produces 60 percent of the world’s olive oil. At its peak, the U.S. produced around 12 percent of global oranges, but that is now down to 4.6 percent. Olive oil is a premiu...
War’s Impact on Food
Israel is not the agricultural export powerhouse like Ukraine, but it is a supplier of high quality and high value fruits and vegetables. The country is 95 percent self-sufficient in food despite occupying semi-arid desert land. Much of this was achieved through intense effort at land improveme...
CFTC COT Report Analysis
New: WPI has added softs (cocoa, coffee, cotton, and sugar) and selected energy futures (NYMEX natural gas, crude oil, RBOB gasoline, and Chicago ethanol) to this report. Consequently, the attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net...
Sub-Saharan Africa’s Future
Analysts at Rabobank looked at future food needs in Sub-Saharan Africa and concluded that wheat imports will increase and so will the need for milling capacity. Although its wheat production has been expanding, the region already imports almost 73 percent of its wheat consumption. Its wheat yie...
CFTC COT Report Analysis
New: WPI has added softs (cocoa, coffee, cotton, and sugar) and selected energy futures (NYMEX natural gas, crude oil, RBOB gasoline, and Chicago ethanol) to this report. Consequently, the attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net...
Rice Signals Future
Global rice stocks are down just 2.7 percent this year, but the drop is larger in key rice consuming countries, plus the largest rice exporting nation, India, imposed an export restriction. This has caused an exaggerated response in price with global values rising 29 percent year-on-year. ...
CFTC COT Report Analysis
New: WPI has added softs (cocoa, coffee, cotton, and sugar) and selected energy futures (NYMEX natural gas, crude oil, RBOB gasoline, and Chicago ethanol) to this report. Consequently, the attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net...
Tomato Wars
U.S. and Mexican trade officials meet in Washington this Friday for the annual bilateral economic dialogue. Labor rights, automobile domestic content, and maybe GMO corn are likely topics. Another will be tomatoes. American tomato growers and their members of Congress are demanding that the Bid...
CFTC COT Report Analysis
New: WPI has added softs (cocoa, coffee, cotton, and sugar) and selected energy futures (NYMEX natural gas, crude oil, RBOB gasoline, and Chicago ethanol) to this report. Consequently, the attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net...
CFTC COT Report Analysis
New: WPI has added softs (cocoa, coffee, cotton, and sugar) and selected energy futures (NYMEX natural gas, crude oil, RBOB gasoline, and Chicago ethanol) to this report. Consequently, the attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net...
Minor Reserves
Norway will reportedly begin spending $6 million/year through the end of the decade to purchase 15,000 MT grain each year for a strategic reserve. Although the grain is not specified, it will presumably involve wheat since that is the primary food grain consumed by Norway’s 5.4 million pe...
Vegetable Market Uniqueness
Unlike grains, oilseeds and livestock products, the U.S. is increasingly import dependent for fresh vegetables. About one-third of the U.S. fresh vegetable market is supplied by imports, with 77 percent of the volume supplied by Mexico and 11 percent trucked down from Canada. Central and South...
CFTC COT Report Analysis
New: WPI has added softs (cocoa, coffee, cotton, and sugar) and selected energy futures (NYMEX natural gas, crude oil, RBOB gasoline, and Chicago ethanol) to this report. Consequently, the attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net...
Rice Constrained
The Philippines Department of Agriculture announced the need to import another 500 KMT of rice. The country is already the second largest importer of rice after China, and this purchase will ensure it is a record year for Philippine imports. For most staple commodities, this is not a large volu...
New Era for Sweet
The world’s two largest sugar producing and exporting nations, Brazil and India, also use part of their output to make ethanol. Brazil has a long history of doing so but it has not changed the relative share of sugar that is exported. By contrast, and as predicted, India’s share of...
Exporting Food Insecurity
New Delhi is always one of the first capitals to raise the issue of food insecurity in international fora. It concurrently argues that agricultural subsidies by rich countries worsen global food insecurity while its own policies and subsidies are designed to lessen the problem. But rich countri...
Fungibility for Food Security
There is speculation that rice prices will increase due a smaller crop in India, the world’s largest exporter, and the impacts of El Niño. That is not currently reflected in futures prices, which have fallen 18 percent from their high at the beginning of the year. India’s ric...
Global Sugar Rebound
After hitting the lowest global sugar ending stocks in more than a dozen years, production is making a rebound. Production is expected to jump 6 percent to its highest level since 2017/18. While some of the rebound will go to the benefit of biofuel makers, most will go to human consumption. Whi...
Avocado Dominance
Around one-half of global avocado exports are from Mexico and 86 percent of them are shipped to the U.S. The dominance of this trade is illustrated by Mexico’s avocado exports growing at 9.5 percent CAGR and U.S. imports expanding at 9.2 percent CAGR. Of the top five global avocado export...
Healthier Diet Cost
Nutritionists advise eating more fruits and vegetables (F&V). On a calorie basis, F&V can be more expensive than a diet of carbs and fats so a trial program subsidized their use by some recipients of U.S. domestic food assistance. Policymakers are also considering limiting the number of...
Grain is Out, Veggies are In
Some members of the U.S. Congress want more support going to fruits and vegetables. They note that the overwhelming majority of farm bill income support and risk management subsidies go to grains and oilseeds. California dominates U.S. production of fruits and vegetables, accounting for 70 perc...
Perking up Supply
Although coffee futures are edging back up (Arabica hit a peak a month ago), prices are descending in longer dated contracts as Brazil is expected to supply a good crop. The normally higher priced arabica has been getting chased by robusta prices as buyers seek substitution to save costs. World...
Challenging India Subsidies
A bipartisan group of U.S. Congressmen are asking USTR Katherine Tai and the Biden Administration to mount a WTO challenge to India’s use of agricultural subsidies for wheat and rice. Washington has issued multiple counter-notifications to the WTO that highlight how much India is understa...
Sugar High – Part II
Last Monday, Gary Blumenthal wrote on the bullish sugar market as global supplies tighten, and demand stays strong. The March Consumer Price Index showed sugar (and substitutes) up 12.7 percent year-over-year. Other sugar containing products, especially when combined with tight supplies of whea...
Sugar High
Sugar prices are moving to new highs as supplies tighten. Brazil, the world’s largest producer of sugar, saw output this year drop below that of 2020/21. China’s production is also below 2021 but demand is growing. Initial concerns might turn to biofuel but human consumption is the...
No Rice Crisis
The Economist magazine notes that rice yields are not improving very quickly and that the International Rice Research Institute says that it is the food commodity perhaps most vulnerable to climate change. It is also a major contributor to climate change due to its methane emissions and yet con...
Rice is Tight
EU rice consumption has been rising at 1.8 percent CAGR at the same time production has fallen by 30 percent since 2018/19. Italy produces about half of the EU’s rice output, and it has suffered from drought. As a water intensive crop, climate change will have an outside impact on this st...
Thailand Rice Exports
Thai government official Anucha Burapachaisri said the target for rice exports has been raised to 7.5 MMT. The official cited both higher domestic production, and a rebounding global economy that has elevated the value of rice. In truth, Thai rice exports are highly correlated to production, wh...
Tomato Economics
U.S. domestic farm policy critics like U.S. Senator Cory Booker (D-New Jersey) have a point when they note that the Farm Bill encourages the production of commodities for which Americans often over-consume, while mostly ignoring what is under-consumed and known to be healthy – fruits and...
Oats are In
David McKee at Key International LCC points out the surge in demand for oat milk, which now dominates the creamer used at many coffee shops. Global oat production has been relatively stagnant for years, running at about half the output level of the 1960’s. Production this year increased b...
How Sweet It Isn't
Global surplus sugar stocks are at their lowest since 2010/11 and futures prices are at their highest level in six years. Yet global import demand continues to expand at around 1.8 percent each year. Brazil is the world’s largest sugar exporter, and it will begin harvesting a crop that is...
Declining Population Impacts Consumption
According to USDA, South Korea’s government is taking steps to stop the price of rice from falling and to slow over-production. There will be payments to farmers for reducing planted area by 5.1 percent, and increased government purchases of rice at more than one-fifth of the crop. The pr...
Rice not Nice
India’s rice subsidies were again a complaint today at a hearing before the Senate Agriculture Committee. India’s rice exports have increased by a fifth over the past decade with all of it being moved into the export market. New Delhi’s rice subsidies have been part of a long-...
Less Traded Category
The news headline says that the Filipino government will import 21,060 MT of onions to fill a supply shortfall until the next domestic harvest in February. Consumer prices have quadrupled in the last four months, which has created a political issue. Vegetables as a general category are subject...
Let Us Say There’s a Problem
Grain and livestock products are the primary delivery sources for dietary calories, yet the accompaniment of a salad provides additional micronutrients and fiber in a low-impact package. Essential to the salad has been lettuce, a plant that is 95 percent water, and has traditionally been a low-...
Yams versus Sweet Potatoes
Yams and sweet potatoes are easily confused and yet they are very different crops, including in global trade. Yams are starchier are more like potatoes, whereas sweet potatoes are sweet. Roughly the same volume of yams and sweet potatoes are produced by the world’s largest producers. Yet...
Coffee Demand Steady
Demand growth for coffee has been far less volatile than production and ending stocks. Ending stocks peaked at 25 percent of consumption in 2001 as the price sunk to $0.44/pound. However, there was a stronger reaction when stocks slipped to 17 percent of production in 2011, and the price peaked...
Trade and Food Security
An anomaly since COVID disrupted supply chains is that the price of rice has been more stable than other food staples such as corn and wheat. One argument for this is that a far smaller share of total rice production is traded, making it less subject to global supply/demand volatility.&n...
Wheat Concerns in Asia
Asia has been adopting wheat as a food staple over many decades but the war In Ukraine has some worried about its supply reliability. Over the past dozen years, rice consumption has averaged a 0.86 percent annual increase while wheat consumption has been growing at twice that rate. Because clim...
Blame the Rice Boogey Man
Rice is the top staple food crop in Asia and the third largest global crop after corn and sugarcane. When rice production is in trouble, people pay attention. This year’s crop is suffering from flooding in Thailand, the sixth largest producer and second largest exporter. Plus excess rain...
Drought’s Double Whammy on China
Rice is the second largest crop in China, behind corn, but is perhaps the most important food crop. This year, drought in south China has hurt yields and quality, driving up the price of good rice. China is also the world’s largest importer of cotton, and drought in the world’s larg...
Benefit of Noncompeting Goods
U.S. pet food has been identified as a high-potential agricultural export. Pet food exports have been increasing by an average 8 percent per year and probably higher if Covid’s impact on 2020 is excluded. There are several reasons for this dynamic: Pet food is a rich world concept, and t...
Seeing Red
California is by far the largest tomato producing state with Florida far behind. However, California processes most of the tomatoes, leaving Florida’s production more subject to the impacts of trade. U.S. fresh tomato imports have been increasing at about 0.4 percent per year, with Mexico...
Real Climate Impact
Climate change is being blamed for drought limited grain crops this year, but tree nuts are a better example. Weather has caused volatility in grain markets for ions. In Genesis, Joseph saves the Egyptians during a distressed crop year by releasing grain from the stores he maintained. Variable...
Drought and Rice
Although several crops are at risk due to the drought in southern China, rice is said to be the most at risk. This is because almost half the country’s rice crop is produced in the six provinces being impacted (Sichuan, Chongqing, Hubei, Henan, Jiangxi and Anhui). Some call it a severe ch...
Ongoing Shortages
A French fry shortage is now expanding into a tomato shortage. The U.S. production of potatoes had been expanding even as the acres harvested declined due to increased yields. However, last year’s crop was reduced in size by high heat, and the crop being harvested this month was delayed b...
Princess Cotton
Global cotton production has declined, led by reductions in its two largest producers, China and India. Cotton is a heat tolerant, modest user of water, which appears perfect for climate change. It is also a natural fiber, and its oil contributes to food security. However, the fossil fuel-based...
No Rice Shortage
Food scarcity has been a frequent headline this year but with food inflation now dropping along with commodity prices, rice is an example of the scare that wasn’t. The monsoon was late starting in India, leading concerns that the world’s largest rice exporter would be driving up pri...
Cotton Market Shifts
While area planted to cotton is expanding elsewhere in the world, U.S. farmers are sowing less. More importantly, abandonment is projected to jump from 8.5 percent last year to 31.5 percent this season, almost matching the high level in 2020. The extreme drought in the Southwest is the primary...
Rotten Cotton
The war against GMO’s is still playing out in Africa. French news platform RFI reports that farmers in Kenya are fighting over whether to grow Bt cotton. One farmer claimed his yields jumped 166 percent with Bt cotton seed, but opponents say initial yield gains eventually recede and Bt co...
Toughest Commodity Business
While many agricultural commodities are experiencing a boom in demand and prices, orange juice consumption has plummeted worldwide. Global demand over the past decade has fallen by 12.6 percent. U.S. consumption has dropped by 29 percent over that period and Europe, the largest consumer of the...
It’s More Than Food
In Japan, rice has been called the essence of culture; it has meant more than just food, though food security is the basis for policy interventions to protect it. Despite the nostalgia and market controls, rice on paddy fields is declining, giving way to more profitable wheat and soybeans that...
Dominance in Rice
India is the world’s largest exporter of rice and Refinitiv points out that India’s export rice prices have been consistently lower than that of Thailand and Vietnam for the past two years. India is exporting roughly twice the amount of rice as Thailand and Vietnam combined. India h...
White Commodities
The U.S. rice industry motivated its politicians to attack USTR Katherine Tai last week as she made the rounds on Capitol Hill. The main point of their ire is India, which they claim uses subsidies far more than WTO rules allow. Indeed, India has subsidized agriculture to the point that its ric...
Limits of Sanctions
The repeated threat of sanctions by the EU and U.S. were not enough to prevent Vladimir Putin from moving on Ukraine, and they likely will not be enough to affect Daniel Ortega in Nicaragua. He has been the president of the country for most of the past 15 years and the U.S. argues it is because...
Clueless Leaders
The U.S. government shut down avocado imports from Mexico’s Michoacán state after a federal inspector received presumably a threatening phone message. Rather than accept the plausibility of wrongdoing in one of the most corrupt, drug cartel running parts of his country, Michoac&aac...
Coffee Flip
Food commodities are rising in price and that includes coffee, but the coffee bean market is also changing. Out of 100 species of coffee, just two dominate: Arabica and Robusta. And of those two, Arabica has been the bean to beat. Because of a higher lipid and sugar level, it is considered swee...
Monopoly Sweeteners
Two of the largest sugar refiners in the southeast United States are seeking a merger but the U.S. Justice Department is objecting. The Department says that would leave just two refiners in the region controlling "an overwhelming majority of refined sugar sales." The refiners complain that the...
Not so Sweet; Not so Green
Not so Sweet The WTO last month sided with Australia, Brazil, and Guatemala that India’s sugar subsidies were distorting and illegal. India has appealed the ruling knowing that the WTO’s Appellate Panel is non-functioning, thus putting the case in limbo. However, Brazil intends to r...
Perk up Attention
Exports point to climate change as the cause of the plateauing in global crop production but no where is it more apparent than in coffee production. Brazil is responsible for 40 percent of global coffee production and around 31 percent of global trade. This year, Brazil’s coffee exports w...
How Sweet it Isn’t
In the past three years, India has switched from being the number four exporter of sugar in the world to number two. Over the past dozen years, its domestic production has grown by 56 percent, but its exports have exploded by 229 percent. It turns out there is a reason. In a WTO challenge by Au...
Potato Trade Grows
Potatoes have taken a dietary beating for being a basic starch that raises blood sugar as fast as pure glucose. By contrast, whole wheat contains complex starch, plus protein and some fiber. However, potatoes may have high bioavailability of certain vitamins and minerals, plus other health bene...
Cotton Beats Wheat
There is much consternation over the fact that global stocks-to-use in wheat is down to 12.5 percent and as a result, the price of the March SRW contract is up 65 percent. Yet the price on the December cotton contract is up 120 percent from its low. Cotton is not essential for the food supply...
How Sweet it Isn't
Two major U.S. sugar processors, U.S. Sugar and Imperial Sugar planned a merger, but the Justice Department is saying no. It warns that the duopoly would result in higher sugar prices in the Southeast. But higher sugar prices are the point of U.S. sugar policy. The government sets a floo...
Orange Juice is Fleeting
In the spring of 2020 as COVID-19 was spreading, U.S. consumption of orange juice increased as consumers sought to inoculate themselves with vitamin C. However, the increase was fleeting and not reflected on a global scale. Consumers are seeking to reduce their consumption of sugary drinks at t...
Volatility in Pistachios
The U.S. first displaced Iran as the world’s leading producer of pistachios in 2012 and for the past four years it has not even been a contest. Iran’s downfall was in part U.S. trade sanctions, but also its failure to manage water resources and disease problems properly. While the p...
How Sweet It Isn't
Global sugar consumption has now paced below the population growth rate for three years in a row. After dipping sharply in 2019, per capita consumption continues to be lower than it was in the first part of the last decade. There are many factors involved including substitutes, price, and deman...
2021 Sour Domestic Sugar Outlook
The MY 2020/21 outlook for sugar is for more domestic production and a reduction in imports, but with lower deliveries and increasing year-end stocks. Beet sugar production is up 133,662 short tons – raw value (STRV) based on higher extraction rates in Minnesota and North Dakota. Cane pro...
Agriculture and RCEP
Asian leaders gather this Sunday to hopefully put the final touches on a trade agreement called the Regional Comprehensive Economic Partnership (RCEP). The negotiations have taken eight years and, as usual, the word comprehensive does not apply to agriculture. Likely exempt from tariff reductio...
CFTC Approves Commodity Position Limits
One common thread running through part of the history of grain trading has been the subject of federally set limits on the size of positions that a trader could hold in grain and oilseed futures and options. On 15 October, the CFTC finally approved a new rule regarding commodity position limits...
Could Be More Bearish
Trading grain is not as sexy now as it was back in 2007-2008, but it could be worse. Orange juice futures were a big deal in 1983 when the movie Trading Places was a Hollywood hit but the underlying commodity has been falling out of favor in recent years. Global production and trade have been t...
Cocoa Canary
Given their inelasticity, staple agricultural commodities are a poor indicator of economic health. However, luxury food items like cocoa may be a better indicator of the world’s recovery from the coronavirus. The December contract was up about 2 percent in today’s trading but remain...
Food versus Fiber
A common debate about a decade ago was framed as food versus fuel; should crops traditionally used for food instead be converted into biofuel, especially during a food shortage. Opponents of biofuel may continue to argue in favor of only crops for food but there was also a forecast of declining...
WHO Guidance Effectiveness
The World Health Organization’s Eastern Mediterranean Regional Office issued an advisory recently that advised people to consume unsaturated fats such as those in fish, avocado, nuts, olive oil, soy, canola, sunflower and corn instead of the saturated fat in meat, butter, palm and coconut...
The Next China
The country with the largest population is China and India is second but agricultural marketers are always looking for alternative markets. Indonesia has 265 million people living on 17,000 islands with a total arable land base of just 13 percent. While its import policies have been designed to...
Trade War Trade Impacts
The U.S.– China trade war has had a far more dramatic impact on American agriculture than it has had on farmers in the Middle Kingdom. In fiscal year 2017, the U.S. had a $16 billion agricultural trade surplus with China. In percentage terms, U.S. food sales to China that year were 142 pe...
China In-Country Analysis
Livestock Live Hog Price Down 2 Percent, White Feather Broiler Rises By 11 Percent After peaking at RMB 40.28/kg ($5.73/kg) or RMB 18.27/lb. ($2.60/lb.) at the end of October, the national average live hog price has fallen for five straight weeks. Ending last week at RMB 31.61/kg ($4.50/kg) or...
A Faint Light from Golden Rice
As someone who has for many years pursued a deep interest in the business and economics of agriculture and food, one of the greatest frustrations and disappointments is the organized, systematic opposition to nearly all the scientific and technical advances in food and agricultural production d...
Alternative Crops
U.S. cotton farmers are lamenting a season in which they planted a lot of acres, faced lower yields due to weather, lower prices due to competition from Brazil, and restricted markets due to the U.S. - China trade war. Still, natural fibers remain a buoyant market and cotton was always a fallba...
The Long View
Grain traders from commodity fund managers to the big multinational agribusinesses have consistently complained about the lack of profitable trading opportunities during the past five years or so. Big crops and large stockpiles of corn, wheat and soybeans in both the U.S. and the world drove pr...
Can’t Beat Beet Molasses
Molasses left over from the processing of beets for sugar is typically the poor cousin to the molasses that results from making sugar from sugarcane. Cane-based molasses has superior nutritional qualities and has historically earned a premium. USDA pricing from more than a decade ago shows a 50...
Agricultural Funds and ETFs
The theory that commodities were a useful tool for anyone seeking to diversify an investment portfolio gained considerable popularity in the early years of the 21st century. This was based on studies indicating that commodity and equity prices often moved in opposite directions. The viability o...
USDA Makes Changes to WASDE Tables
USDA announced this week that it will make some changes (noted below) to the monthly WASDE (supply and demand estimates) starting with the May report. While not huge, these modifications will likely add clarity and should have been implemented long ago. They will not affect the actual numbers b...
More Things to Keep You Up at Night
- Grain and oilseed markets were firm today, mostly on growing chatter that the U.S. and China are very close to reaching an agreement on trade. The devil is always in the details, which won’t be known until the deal is made public. Much of the commentary on various business channels toda...
Indian Subcontinent Regional Analysis
Higher Early Sugar Production and Slow Exports Could Pressure Prices Due to the early start of the 2018/19 sugarcane crushing season, Indian sugar mills were able to produce 21.93 MMT of sugar as of 15 February 2019 versus 20.36 MMT at the same point a year ago, an increase of 7.71 percent. Ano...
Indian Subcontinent Regional Analysis
Ample Soybean Supplies Expected to Result in 1 MMT Carryover While the government of India (GOI) has projected 2018/19 (October-September) soybean production at 13.459 MMT, the Soybean Processors Association (SOPA) projects the total at 11.483 MMT, a difference of 1.976 MMT. Per available detai...
China In-Country Analysis
Market Trends A Tale of Two Years With the shutdown of the U.S. government over (at least temporarily), its official statistics are now available to the general public for analysis. Similarly, China’s curtailment of the widespread distribution of official data, the result of a crackdown o...
Indian Subcontinent Regional Analysis
Cotton Imports to Surge on Lower Production; Prices Could Remain Depressed The Cotton Association of India (CAI) has now estimated cotton production in 2018/19 (October-September) at 33 million bales, down from last month’s estimate of 33.5 million bales as well as the government of India...
CFTC COT Report Analysis
The major finding of Friday’s CFTC report is that funds are increasingly and somewhat aggressively bullish corn as they rapidly expanded a small long into a near-100,000 contract bullish position. Over the period 5 through 12 November, funds bought over 96,000 contracts, which is the 11th large...
USA Gone Nuts
While oilseeds receive much of the attention, tree nuts, which are technically a seed and containing oil, have gone even more gangbusters for U.S. producers in recent years. Almonds have received much of the focus as the U.S. produces nearly 80 percent of the crop and a comparable share of the...
CFTC COT Report Analysis
The major finding of Friday’s CFTC report was the confirmation that funds have officially flipped their formerly massive net short in corn to a net long. After buying back nearly 40,000 contracts last week, funds now sit long 3,035 contracts as of 5 November, a position which was extended signi...
CFTC COT Report Analysis
Through 29 October, funds continued their aggressive short covering in the corn market with strong export sales justifying the move. Funds reduced their net short position by about 60 percent last week, and now hold a relatively small position of 35,000 contracts short. The continued exit from...
CFTC COT Report Analysis
Through 22 October, funds engaged in the expected short covering in the corn market amid the unexpected surge in exports. Funds’ total buying volume, however, was below expectations at just shy of 20,000 contracts though they certainly added to that number after Tuesday’s data reporting deadlin...
Going up with a Bang
A futures contract that persistently moves up or down by just a penny or two each day imposes its own burden on the market. While speculators are said to prosper from volatility, and sellers want higher prices and buyers prefer them lower, everyone prefers a story. Apparently, the cotton market...
CFTC COT Report Analysis
Through 8 October, funds continued to exit their formerly massive short positions in corn and soybean futures and now hold a small fraction of that commitment. Funds covered 40 percent of their short position in soybeans and are now only short 18,000 contracts. Similarly, funds bought back half...
Cocoa Market Update: Prices Rise as Stocks Fall
At the end of July 2024, WPI published an article looking at the drivers of the cocoa market’s massive rally in 2023 and 2024 and that offered an outlook for MY 2024/25. This article offers a brief update on market conditions and developments that have occurred in the two months since our...
Say Cheese!
Ilena Peng from Bloomberg has written about the expansion of U.S. cheese exports. Former French President Charles de Gaulle once noted that his country has hundreds of different cheeses and the U.S. had hundreds of different religions. But the U.S. has since become a major producer of many diff...
Coffee Rally Stalls as Weather Shifts, Bear Move Ahead?
Coffee futures have been on a massive rally in 2024 with the ICE “C” contract rising above $2.60/lb last week, breaching that point for just the fifth time since 1970. The catalyst for the rally has been well reported this year, with declining stocks and weather issues in major prod...
Kenya’s Crop Choices
In yesterday’s WPI Middle East, Mediterranean and Africa Regional analysis report, it was noted that Kenyan farmers are switching from growing maize to growing sweet potatoes. The latter being easier to grow than drought sensitive maize and netting three crops per year. But whether maize...
CFTC COT Report Analysis
Funds activity in the ag futures markets was more subtle than expected for the second straight week. Specifically, fund short-covering in the corn and wheat markets lagged expectations by a wide margin. In corn futures, funds bought back 3,700 contracts (2.6 percent) of their prior short, which...
CFTC COT Report Analysis
Funds activity in the ag futures markets was more subdued last week than expected. Funds were slight net buyers in soybeans, soymeal, corn, and across the wheat complex, but the percentage shifts in their positions and overall buying volumes underperformed expectations. In the soy complex...
CFTC COT Report Analysis
Funds continued covering shorts across the grain and oilseed complex through last Tuesday as futures trended firmer heading into the September WASDE. The most notable short covering was in wheat where funds bought back 30 percent of the CBOT position and 33 percent of their HRW short. The buyin...
CFTC COT Report Analysis
Friday’s CFTC report featured the expected trends in managed money funds’ activity, but the volume of trade and the degree of change in their position was below expectations. Funds covered about 21,000 contracts of their soybean futures short last week (12.5 percent of the prior wee...
Pulses Not Pulsing
The International Grains Council (IGC), Rabobank, and others have followed countries and companies moving into the pulses space. It is logical that plant-based proteins like pulses should be an attractive market. However, the compound average growth rate (CAGR) for the larger category is only 2...
Sugar Price Response
The March 2025 No. 11 sugar contract rebounded last week but it is still down over 20 percent from its high. Analysts started the year expecting sugar prices to rise this year on short supplies. The International Sugar Organization is still warning of a net deficit once global consumption is su...
CFTC COT Report Analysis
Friday’s CFTC report was largely in-line with expectations as it showed mild short covering by managed money traders across the soy complex and corn futures. Funds fought back about 3 percent of their corn short, which continues to hover near this year’s record low values. Funds wer...
CFTC COT Report Analysis
Friday’s CFTC report showed funds continuing to expand their short position in soybeans and added about 8.5 percent to their net position last week. That will come as no surprise to anyone watching the markets with soybeans having reached new contract low amid a dearth of fundamental or t...
Cotton Market Basics and 2024/25 Outlook
Following recent client requests, WPI provides the following overview of the cotton market, its basic structure and recent trends, and a short outlook for MY 2024/25. Cotton Production World cotton production is highly concentrated with four countries (China, India, Brazil, and the...
Dairy Trade Expands Despite Hurdles
Concerns about faltering U.S. dairy exports last year have now subsided as growth has returned to the sector. This despite: production growth leveling off as increases in milk per cow do not offset the fall in the number of dairy farms; an 18 percent rise in dairy futures over the past year...
CFTC COT Report Analysis
Friday’s CFTC report was in line with expectations as it showed minimal net fund activity with managed money traders remaining heavily short the major ag commodities. Funds bought back just 1 percent of their short position in soybeans last week while adding an equal share to their soyoil...
Oats Decline
A relatively minor crop, just a little over 2 MMT of oats are globally traded each year. Still, it is an important niche and yet seemingly in decline. This year’s crop is slightly larger than last year’s, but that isn’t saying much since that one was the smallest in over a dec...
Citrus Impacts
The global production of oranges is nearly five times greater than the output of lemons and limes. Their distribution is different as well. Over a third of oranges go to processing, versus a quarter of lemons and limes. And less than 10 percent of oranges are moved into the export market, versu...
Spuds Sputter
It is reported that EU potato production has fallen by 37 percent over the past 20 years. This is consistent with U.S. potato production falling by 10.6 percent over the past five years. Some cite the impacts of climate, disease, and changing consumer demand (health) for the declines. Productio...
CFTC COT Report Analysis
Friday’s CFTC report showed funds more aggressively covering shorts in the grains and oilseed sector heading into the August WASDE. The most notable buying was in corn, where funds bought back 50,000 contracts or about 17 percent of their previous short position and have now shed over 100...
Cocoa Consumption and Demand – How Will EUDR Affect the Industry?
Two weeks ago, WPI published an article looking at the supply-side factors in the cocoa market and what has been driving the massive price rally. With this article, we will look at the consumption and demand-side factors that are likely to influence the market and pricing for LH 2024 and into 2...
Proposed New Subsidy Program
Two Georgia Congressional officials, Senator Jon Osoff and Rep. Sanford Bishop, have introduced legislation that would extend crop loss payments to seasonal and perishable crop producers. Payments would be triggered when a crop’s national average price drops below its five-year average re...
CFTC COT Report Analysis
Friday’s CFTC report shows that funds were – through Tuesday’s data reporting deadline – cautiously covering shorts in corn and soybeans as they continued to edge back from their recent record-large short position in both commodities. That was as little surprising given...
CFTC COT Report Analysis
As expected, short-covering was the major theme from the latest CFTC Commitments of Traders report, which showed that managed money funds backed off from the record-breaking positions they previously amassed. Funds bought back about 10K contracts in soybeans and about 19K in corn, but the buyin...
Cocoa: Will the Challenges of 2023 Continue into 2024?
Recently, WPI has received requests from a few clients to provide some analysis on the cocoa market. Clearly, there is a reason for this request as cocoa prices have been exceptionally volatile and futures more than doubled over the nine months from August 2023 through April 2024. I...
Perceived Rice Shortage
Rice prices have begun to normalize after spiking recently due to India fearing a shortage and imposing export restrictions. This sparked panic buying and resulted in higher prices. The price of rice early this year was around $602/MT, substantially higher than the historical average of $381/MT...
CFTC COT Report Analysis
The latest CFTC Commitment of Traders report highlights the ongoing bearish sentiment for oilseed and grain markets with managed money traders remaining massively short agricultural commodities. Perhaps the most notable item in this week’s report was the expansion of the record-large net...
Sugar Volatility
It has been a volatile year for global sugar prices. They hit 27.95 cents/pound on 6 November 2023 – the highest since 1980. They fell 30 percent to 19.69 cents/pound in May and now are running around 20.26 cents/pound. It is difficult to draw a complete supply/demand imbalanc...
CFTC COT Report Analysis
Funds now hold their largest short position in corn futures since at least 2015 after adding another 9,000 contracts to their holdings last week. That, and their selling of nearly 30,000 soybean contracts to bring their short in that market close to the record short were the headlines from this...
Geopolitical Trade Substitution
Historically, Canada has been the fourth largest producer of green peas and the largest exporter of the product. Canada’s global market share for the green pea trade was 37.9 percent in 2022, while Russia supplied 13.7 percent. Meanwhile, China is both the largest producer and importer of...
CFTC COT Report Analysis
The weekly CFTC report was in-line with expectations as it showed funds remaining dedicated net sellers across oilseed complex. The only exception was the buying in soyoil, where funds took back nearly half their short position in that contract amid the fears about the Indonesia-China trade war...
Misalignment of Land and Labor
U.S. fruit and vegetable growers made their annual trek to Capitol Hill but instead of their usual gift of a full box of fresh produce for the Members of Congress, they only filled it a quarter full. Their message: fresh fruit production has fallen by 10 percent and fresh vegetable output has g...
CFTC COT Report Analysis
As expected, funds were proven to be staunch net sellers last week, according to Friday’s CFTC report data. Funds were the most aggressive in corn where they sold nearly 90,000 contracts and obtained their largest short position since April and the largest early-June short since 2020. Fun...
No Mimosas
Brazil produces more than a third of the world’s oranges and controls 70 percent of global exports. This drought, plus disease and other issues has caused production to fall by nearly a quarter. As a result, prices have spiked. It may not be a proxy for soybeans and corn since oranges are...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
Where are the Veggies?
As noted yesterday, USDA estimates that the food category incurring the most inflation this year in the U.S. will be fresh vegetables. Part of the problem is the disconnect between encouraging consumption of this food group, and domestic production. About 40 percent of fresh vegetables are impo...
CFTC COT Report Analysis
The big surprise in this week’s CFTC report was the expansion of funds’ short position in corn by over 54,000 contracts. Funds had been aggressively exiting these shorts but apparently decided the threats to the U.S. planting effort and Brazil’s safrinha crop were insufficient...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
Milking Future Demand
U.S. and Mexican dairy industry representatives met and renewed their commitment to “collaborate and advocate for mutually beneficial dairy policies. This was a policy initiative begun back in 2016. At first glance, the effort seems surprising given that Mexico exports more than three tim...
CFTC COT Report Analysis
The surprise in this week’s CFTC report is that – through Tuesday’s data reporting deadline - funds were more aggressive covering grain/oilseed shorts than expected. The headline number is that funds bought back over 111,000 contracts and are now only short about 30,000 contra...
Meeting with the Cotton Hopeful
Although many small developing countries produce cotton, about five countries produce most of the fiber. China and India alone account for nearly half the global output of cotton. Four small African countries (Benin, Burkina Faso, Chad, and Mali) formed the Cotton-4 or C-4 consortium many years...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
Eat less, Toot Less
Plants such as beans, lentils and chickpeas are the nutritional rage. They are plant derived foods with higher protein content and thus their production and consumption should be on the rise. But alas, the USDA data is not comporting with that nutritional advice. Over the past four years,...
CFTC COT Report Analysis
Based on futures’ price action late last week and early this week, one would be expecting funds to have been net sellers in the major ag commodities, and that’s exactly what happened. Funds expanded their short soybean position by some 30,000 contracts, making it a new five-year low...
An Era up in Smoke
British Prime Minister Rishi Sunak has proposed that anyone turning 15 years of age or younger in 2024 will be banned forever from purchasing cigarettes. Eash year, the age restriction will be raised by one year. The bill also makes vapes less appealing. The goal is to start the first generatio...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
Cocoa Puffs
The global cocoa price hit $10,120/MT yesterday, triple its price last fall, and it is still unlikely to be at its apex. The cause is a sharp drop-off in production in Ghana and Côte d’Ivoire, the two countries that produce nearly 65 percent of the world’s cocoa beans. Some ha...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
We All Scream
President Joe Biden is “bad talking” about the food industry, accusing it of greed for raising prices. While his focus was on “chips” and shrinkflation, he could also have talked about his favorite food, ice cream. After all, his generation – those over age 75, are...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
Peas Please
As noted in today’s Black Sea report, the price of peas in Russia are rising as exports go unfettered by any export tax. Canada is by far the largest exporter of peas with a two-thirds market share. But Russia is second with a 12.4 percent market share, the U.S. exports about 9 percent of...
Cotton is King
At least it is in the U.S. South. While production increased last year in Pakistan and Brazil, USDA predicts that most of the increase in global production in 2024/25 will be due to the expansion in U.S. output. The area under production is forecast to expand by 8 percent. Production in India a...
Hops Market Declines
After a decade of blistering growth, the U.S. domestic beer market declined in 2023. The reasons given include some consumers opting for a healthier, alcohol-free lifestyle, and others switching to drinking higher alcohol spirits. This increases the importance of exports but both beer and hops...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
CFTC COT Report Analysis
The weekly CFTC report was unsurprising in that managed money funds were net sellers through Tuesday’s data reporting period, which obviously coincided with the new contract lows in the grain markets. Funds were aggressive net sellers in corn, SRW wheat, and soyoil but were more cautious...
Honey Rebounding
Global honey production fell 6.3 percent between 2017 and 2019. Culprits for the decline included Colony Collapse Disorder and the use of pesticides such as neonicotinoids. However, since then production has rebounded by 4 percent and continues expanding on an upward trend. In Europe where the...
CFTC COT Report Analysis
The weekly CFTC report featured a few surprises, most notably the 11,000-contract net buying in the Chicago wheat market. Heading into the report, expectations were that it would show funds expanding short positions heading into the February AOF from USDA. Rather, funds were parging back shorts...
CFTC COT Report Analysis
The weekly CFTC report was in-line with expectations as it showed funds still being heavy net sellers in soybeans and corn with light short selling in the SRW wheat contract. Equally unsurprising was the net buying by managed money traders in soymeal and soyoil as they’ve largely whittled...
Eat Your Rice
South Korea wants more rice to be consumed and is subsidizing rice for college students, the cohort least likely to eat breakfast, and is incentivizing food products made from rice flour. Rice production is dropping as population growth has stalled, but rice consumption is dropping even faster...
Targeting India’s Rice Subsidies
At the behest of the domestic rice industry, U.S. House Ways & Means Committee Chair Jason Smith (R-MO) asked the U.S. International Trade Commission to conduct Section 332 fact-finding investigation of global competitiveness in rice, which the industry claims is skewed by unfair trade prac...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
Sweetly Accessible
World sugar prices have begun to moderate after hitting a multi-year high in 2023. The high of $0.28/pound last year was the highest price since 2011, but well below the $0.65/pound experienced in 1974. In real terms, sugar was the equivalent of $4.00/pound that year. That year also saw the lar...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
Food Sovereignty Flipped
The government of Mexican President Andrés Manuel López Obrador and now the social justice warrior class in the U.S. are framing the impending ban on GMO corn imports as fulfilling their right to food sovereignty. U.S. corn exports to Mexico are around 17 MMT worth about $3.3 bill...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
India’s Rice Squeeze
The New Delhi playbook for staple crops is to offer farmers a generous Minimum Support Price (MSP), donate the extra output to the nation’s poor, and then dump on the world market any surpluses that would otherwise depress domestic prices. India’s rice surplus was around a quarter o...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
Smashing Success
Global demand for avocados has been growing at 7 percent per year. Mexico produces 30 percent of the world’s avocados but supplies 45 percent of those in international trade. The U.S. is by far the largest importer. Bloomberg cites the years-long drought in Spain as a threat to that count...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
CFTC COT Report Analysis
New: WPI has added softs (cocoa, coffee, cotton, and sugar) and selected energy futures (NYMEX natural gas, crude oil, RBOB gasoline, and Chicago ethanol) to this report. Consequently, the attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net...
Tilting at Windmills
The American Salad Belt is largely on the West Coast and Congressional representatives mostly from that region have introduced legislation (The Specialty Crops Reporting on Opportunities and Promotion Act) intended to boost the export of crops like fruits and vegetables. The political represent...
Regional Favorites
Just as North America both produces and consumes most of the world’s turkey meat (with a small honorable mention to Brazil), it also has a unique fascination with cranberries. The U.S. produces 65 percent of the world’s cranberries and adding Canada makes North America the supplier...
CFTC COT Report Analysis
New: WPI has added softs (cocoa, coffee, cotton, and sugar) and selected energy futures (NYMEX natural gas, crude oil, RBOB gasoline, and Chicago ethanol) to this report. Consequently, the attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net...
Usual Problem for Specialty Crops
The Biden Administration has cranked up its outreach to politically red rural America with USTR Katherine Tai now following President Biden’s focus on agriculture. Instead of picking up rural Republican votes in 2024, the goal is said to be at least reducing voter turnout in these areas...
CFTC COT Report Analysis
New: WPI has added softs (cocoa, coffee, cotton, and sugar) and selected energy futures (NYMEX natural gas, crude oil, RBOB gasoline, and Chicago ethanol) to this report. Consequently, the attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net...
Export Sales
Export Sales and Shipments for October 20-26, 2023. Wheat: Net sales of 275,600 metric tons (MT) for 2023/2024 were down 24 percent from the previous week and 43 percent from the prior 4-week average. Export shipments of 100,500 MT--a marketing-year low--were down 24 percent from the prev...
White Commodities Focus
White commodities is an American euphemism for three crops, cotton, rise, and sugar, that are all white in color and each have statutory programs considered complex or unique. They are generally produced in the U.S. south, and their traits include: Cotton: A chemically intensive crop with the l...
Tangential Rice Market Impacts
Given current tight global rice stocks and high prices (see graph below), the question is how much wheat will be substituted for food or feed use. Rice prices have dropped since their peak early this year, but wheat is still 35 percent cheaper by weight than rice as a food grain. It is one reas...
CFTC COT Report Analysis
New: WPI has added softs (cocoa, coffee, cotton, and sugar) and selected energy futures (NYMEX natural gas, crude oil, RBOB gasoline, and Chicago ethanol) to this report. Consequently, the attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net...
Tale of Two Commodities
EU olive oil and U.S. oranges are each having a challenging year. Beyond that the similarities are few. The EU produces 60 percent of the world’s olive oil. At its peak, the U.S. produced around 12 percent of global oranges, but that is now down to 4.6 percent. Olive oil is a premiu...
War’s Impact on Food
Israel is not the agricultural export powerhouse like Ukraine, but it is a supplier of high quality and high value fruits and vegetables. The country is 95 percent self-sufficient in food despite occupying semi-arid desert land. Much of this was achieved through intense effort at land improveme...
CFTC COT Report Analysis
New: WPI has added softs (cocoa, coffee, cotton, and sugar) and selected energy futures (NYMEX natural gas, crude oil, RBOB gasoline, and Chicago ethanol) to this report. Consequently, the attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net...
Sub-Saharan Africa’s Future
Analysts at Rabobank looked at future food needs in Sub-Saharan Africa and concluded that wheat imports will increase and so will the need for milling capacity. Although its wheat production has been expanding, the region already imports almost 73 percent of its wheat consumption. Its wheat yie...
CFTC COT Report Analysis
New: WPI has added softs (cocoa, coffee, cotton, and sugar) and selected energy futures (NYMEX natural gas, crude oil, RBOB gasoline, and Chicago ethanol) to this report. Consequently, the attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net...
Rice Signals Future
Global rice stocks are down just 2.7 percent this year, but the drop is larger in key rice consuming countries, plus the largest rice exporting nation, India, imposed an export restriction. This has caused an exaggerated response in price with global values rising 29 percent year-on-year. ...
CFTC COT Report Analysis
New: WPI has added softs (cocoa, coffee, cotton, and sugar) and selected energy futures (NYMEX natural gas, crude oil, RBOB gasoline, and Chicago ethanol) to this report. Consequently, the attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net...
Tomato Wars
U.S. and Mexican trade officials meet in Washington this Friday for the annual bilateral economic dialogue. Labor rights, automobile domestic content, and maybe GMO corn are likely topics. Another will be tomatoes. American tomato growers and their members of Congress are demanding that the Bid...
CFTC COT Report Analysis
New: WPI has added softs (cocoa, coffee, cotton, and sugar) and selected energy futures (NYMEX natural gas, crude oil, RBOB gasoline, and Chicago ethanol) to this report. Consequently, the attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net...
CFTC COT Report Analysis
New: WPI has added softs (cocoa, coffee, cotton, and sugar) and selected energy futures (NYMEX natural gas, crude oil, RBOB gasoline, and Chicago ethanol) to this report. Consequently, the attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net...
Minor Reserves
Norway will reportedly begin spending $6 million/year through the end of the decade to purchase 15,000 MT grain each year for a strategic reserve. Although the grain is not specified, it will presumably involve wheat since that is the primary food grain consumed by Norway’s 5.4 million pe...
Vegetable Market Uniqueness
Unlike grains, oilseeds and livestock products, the U.S. is increasingly import dependent for fresh vegetables. About one-third of the U.S. fresh vegetable market is supplied by imports, with 77 percent of the volume supplied by Mexico and 11 percent trucked down from Canada. Central and South...
CFTC COT Report Analysis
New: WPI has added softs (cocoa, coffee, cotton, and sugar) and selected energy futures (NYMEX natural gas, crude oil, RBOB gasoline, and Chicago ethanol) to this report. Consequently, the attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net...
Rice Constrained
The Philippines Department of Agriculture announced the need to import another 500 KMT of rice. The country is already the second largest importer of rice after China, and this purchase will ensure it is a record year for Philippine imports. For most staple commodities, this is not a large volu...
New Era for Sweet
The world’s two largest sugar producing and exporting nations, Brazil and India, also use part of their output to make ethanol. Brazil has a long history of doing so but it has not changed the relative share of sugar that is exported. By contrast, and as predicted, India’s share of...
Exporting Food Insecurity
New Delhi is always one of the first capitals to raise the issue of food insecurity in international fora. It concurrently argues that agricultural subsidies by rich countries worsen global food insecurity while its own policies and subsidies are designed to lessen the problem. But rich countri...
Fungibility for Food Security
There is speculation that rice prices will increase due a smaller crop in India, the world’s largest exporter, and the impacts of El Niño. That is not currently reflected in futures prices, which have fallen 18 percent from their high at the beginning of the year. India’s ric...
Global Sugar Rebound
After hitting the lowest global sugar ending stocks in more than a dozen years, production is making a rebound. Production is expected to jump 6 percent to its highest level since 2017/18. While some of the rebound will go to the benefit of biofuel makers, most will go to human consumption. Whi...
Avocado Dominance
Around one-half of global avocado exports are from Mexico and 86 percent of them are shipped to the U.S. The dominance of this trade is illustrated by Mexico’s avocado exports growing at 9.5 percent CAGR and U.S. imports expanding at 9.2 percent CAGR. Of the top five global avocado export...
Healthier Diet Cost
Nutritionists advise eating more fruits and vegetables (F&V). On a calorie basis, F&V can be more expensive than a diet of carbs and fats so a trial program subsidized their use by some recipients of U.S. domestic food assistance. Policymakers are also considering limiting the number of...
Grain is Out, Veggies are In
Some members of the U.S. Congress want more support going to fruits and vegetables. They note that the overwhelming majority of farm bill income support and risk management subsidies go to grains and oilseeds. California dominates U.S. production of fruits and vegetables, accounting for 70 perc...
Perking up Supply
Although coffee futures are edging back up (Arabica hit a peak a month ago), prices are descending in longer dated contracts as Brazil is expected to supply a good crop. The normally higher priced arabica has been getting chased by robusta prices as buyers seek substitution to save costs. World...
Challenging India Subsidies
A bipartisan group of U.S. Congressmen are asking USTR Katherine Tai and the Biden Administration to mount a WTO challenge to India’s use of agricultural subsidies for wheat and rice. Washington has issued multiple counter-notifications to the WTO that highlight how much India is understa...
Sugar High – Part II
Last Monday, Gary Blumenthal wrote on the bullish sugar market as global supplies tighten, and demand stays strong. The March Consumer Price Index showed sugar (and substitutes) up 12.7 percent year-over-year. Other sugar containing products, especially when combined with tight supplies of whea...
Sugar High
Sugar prices are moving to new highs as supplies tighten. Brazil, the world’s largest producer of sugar, saw output this year drop below that of 2020/21. China’s production is also below 2021 but demand is growing. Initial concerns might turn to biofuel but human consumption is the...
No Rice Crisis
The Economist magazine notes that rice yields are not improving very quickly and that the International Rice Research Institute says that it is the food commodity perhaps most vulnerable to climate change. It is also a major contributor to climate change due to its methane emissions and yet con...
Rice is Tight
EU rice consumption has been rising at 1.8 percent CAGR at the same time production has fallen by 30 percent since 2018/19. Italy produces about half of the EU’s rice output, and it has suffered from drought. As a water intensive crop, climate change will have an outside impact on this st...
Thailand Rice Exports
Thai government official Anucha Burapachaisri said the target for rice exports has been raised to 7.5 MMT. The official cited both higher domestic production, and a rebounding global economy that has elevated the value of rice. In truth, Thai rice exports are highly correlated to production, wh...
Tomato Economics
U.S. domestic farm policy critics like U.S. Senator Cory Booker (D-New Jersey) have a point when they note that the Farm Bill encourages the production of commodities for which Americans often over-consume, while mostly ignoring what is under-consumed and known to be healthy – fruits and...
Oats are In
David McKee at Key International LCC points out the surge in demand for oat milk, which now dominates the creamer used at many coffee shops. Global oat production has been relatively stagnant for years, running at about half the output level of the 1960’s. Production this year increased b...
How Sweet It Isn't
Global surplus sugar stocks are at their lowest since 2010/11 and futures prices are at their highest level in six years. Yet global import demand continues to expand at around 1.8 percent each year. Brazil is the world’s largest sugar exporter, and it will begin harvesting a crop that is...
Declining Population Impacts Consumption
According to USDA, South Korea’s government is taking steps to stop the price of rice from falling and to slow over-production. There will be payments to farmers for reducing planted area by 5.1 percent, and increased government purchases of rice at more than one-fifth of the crop. The pr...
Rice not Nice
India’s rice subsidies were again a complaint today at a hearing before the Senate Agriculture Committee. India’s rice exports have increased by a fifth over the past decade with all of it being moved into the export market. New Delhi’s rice subsidies have been part of a long-...
Less Traded Category
The news headline says that the Filipino government will import 21,060 MT of onions to fill a supply shortfall until the next domestic harvest in February. Consumer prices have quadrupled in the last four months, which has created a political issue. Vegetables as a general category are subject...
Let Us Say There’s a Problem
Grain and livestock products are the primary delivery sources for dietary calories, yet the accompaniment of a salad provides additional micronutrients and fiber in a low-impact package. Essential to the salad has been lettuce, a plant that is 95 percent water, and has traditionally been a low-...
Yams versus Sweet Potatoes
Yams and sweet potatoes are easily confused and yet they are very different crops, including in global trade. Yams are starchier are more like potatoes, whereas sweet potatoes are sweet. Roughly the same volume of yams and sweet potatoes are produced by the world’s largest producers. Yet...
Coffee Demand Steady
Demand growth for coffee has been far less volatile than production and ending stocks. Ending stocks peaked at 25 percent of consumption in 2001 as the price sunk to $0.44/pound. However, there was a stronger reaction when stocks slipped to 17 percent of production in 2011, and the price peaked...
Trade and Food Security
An anomaly since COVID disrupted supply chains is that the price of rice has been more stable than other food staples such as corn and wheat. One argument for this is that a far smaller share of total rice production is traded, making it less subject to global supply/demand volatility.&n...
Wheat Concerns in Asia
Asia has been adopting wheat as a food staple over many decades but the war In Ukraine has some worried about its supply reliability. Over the past dozen years, rice consumption has averaged a 0.86 percent annual increase while wheat consumption has been growing at twice that rate. Because clim...
Blame the Rice Boogey Man
Rice is the top staple food crop in Asia and the third largest global crop after corn and sugarcane. When rice production is in trouble, people pay attention. This year’s crop is suffering from flooding in Thailand, the sixth largest producer and second largest exporter. Plus excess rain...
Drought’s Double Whammy on China
Rice is the second largest crop in China, behind corn, but is perhaps the most important food crop. This year, drought in south China has hurt yields and quality, driving up the price of good rice. China is also the world’s largest importer of cotton, and drought in the world’s larg...
Benefit of Noncompeting Goods
U.S. pet food has been identified as a high-potential agricultural export. Pet food exports have been increasing by an average 8 percent per year and probably higher if Covid’s impact on 2020 is excluded. There are several reasons for this dynamic: Pet food is a rich world concept, and t...
Seeing Red
California is by far the largest tomato producing state with Florida far behind. However, California processes most of the tomatoes, leaving Florida’s production more subject to the impacts of trade. U.S. fresh tomato imports have been increasing at about 0.4 percent per year, with Mexico...
Real Climate Impact
Climate change is being blamed for drought limited grain crops this year, but tree nuts are a better example. Weather has caused volatility in grain markets for ions. In Genesis, Joseph saves the Egyptians during a distressed crop year by releasing grain from the stores he maintained. Variable...
Drought and Rice
Although several crops are at risk due to the drought in southern China, rice is said to be the most at risk. This is because almost half the country’s rice crop is produced in the six provinces being impacted (Sichuan, Chongqing, Hubei, Henan, Jiangxi and Anhui). Some call it a severe ch...
Ongoing Shortages
A French fry shortage is now expanding into a tomato shortage. The U.S. production of potatoes had been expanding even as the acres harvested declined due to increased yields. However, last year’s crop was reduced in size by high heat, and the crop being harvested this month was delayed b...
Princess Cotton
Global cotton production has declined, led by reductions in its two largest producers, China and India. Cotton is a heat tolerant, modest user of water, which appears perfect for climate change. It is also a natural fiber, and its oil contributes to food security. However, the fossil fuel-based...
No Rice Shortage
Food scarcity has been a frequent headline this year but with food inflation now dropping along with commodity prices, rice is an example of the scare that wasn’t. The monsoon was late starting in India, leading concerns that the world’s largest rice exporter would be driving up pri...
Cotton Market Shifts
While area planted to cotton is expanding elsewhere in the world, U.S. farmers are sowing less. More importantly, abandonment is projected to jump from 8.5 percent last year to 31.5 percent this season, almost matching the high level in 2020. The extreme drought in the Southwest is the primary...
Rotten Cotton
The war against GMO’s is still playing out in Africa. French news platform RFI reports that farmers in Kenya are fighting over whether to grow Bt cotton. One farmer claimed his yields jumped 166 percent with Bt cotton seed, but opponents say initial yield gains eventually recede and Bt co...
Toughest Commodity Business
While many agricultural commodities are experiencing a boom in demand and prices, orange juice consumption has plummeted worldwide. Global demand over the past decade has fallen by 12.6 percent. U.S. consumption has dropped by 29 percent over that period and Europe, the largest consumer of the...
It’s More Than Food
In Japan, rice has been called the essence of culture; it has meant more than just food, though food security is the basis for policy interventions to protect it. Despite the nostalgia and market controls, rice on paddy fields is declining, giving way to more profitable wheat and soybeans that...
Dominance in Rice
India is the world’s largest exporter of rice and Refinitiv points out that India’s export rice prices have been consistently lower than that of Thailand and Vietnam for the past two years. India is exporting roughly twice the amount of rice as Thailand and Vietnam combined. India h...
White Commodities
The U.S. rice industry motivated its politicians to attack USTR Katherine Tai last week as she made the rounds on Capitol Hill. The main point of their ire is India, which they claim uses subsidies far more than WTO rules allow. Indeed, India has subsidized agriculture to the point that its ric...
Limits of Sanctions
The repeated threat of sanctions by the EU and U.S. were not enough to prevent Vladimir Putin from moving on Ukraine, and they likely will not be enough to affect Daniel Ortega in Nicaragua. He has been the president of the country for most of the past 15 years and the U.S. argues it is because...
Clueless Leaders
The U.S. government shut down avocado imports from Mexico’s Michoacán state after a federal inspector received presumably a threatening phone message. Rather than accept the plausibility of wrongdoing in one of the most corrupt, drug cartel running parts of his country, Michoac&aac...
Coffee Flip
Food commodities are rising in price and that includes coffee, but the coffee bean market is also changing. Out of 100 species of coffee, just two dominate: Arabica and Robusta. And of those two, Arabica has been the bean to beat. Because of a higher lipid and sugar level, it is considered swee...
Monopoly Sweeteners
Two of the largest sugar refiners in the southeast United States are seeking a merger but the U.S. Justice Department is objecting. The Department says that would leave just two refiners in the region controlling "an overwhelming majority of refined sugar sales." The refiners complain that the...
Not so Sweet; Not so Green
Not so Sweet The WTO last month sided with Australia, Brazil, and Guatemala that India’s sugar subsidies were distorting and illegal. India has appealed the ruling knowing that the WTO’s Appellate Panel is non-functioning, thus putting the case in limbo. However, Brazil intends to r...
Perk up Attention
Exports point to climate change as the cause of the plateauing in global crop production but no where is it more apparent than in coffee production. Brazil is responsible for 40 percent of global coffee production and around 31 percent of global trade. This year, Brazil’s coffee exports w...
How Sweet it Isn’t
In the past three years, India has switched from being the number four exporter of sugar in the world to number two. Over the past dozen years, its domestic production has grown by 56 percent, but its exports have exploded by 229 percent. It turns out there is a reason. In a WTO challenge by Au...
Potato Trade Grows
Potatoes have taken a dietary beating for being a basic starch that raises blood sugar as fast as pure glucose. By contrast, whole wheat contains complex starch, plus protein and some fiber. However, potatoes may have high bioavailability of certain vitamins and minerals, plus other health bene...
Cotton Beats Wheat
There is much consternation over the fact that global stocks-to-use in wheat is down to 12.5 percent and as a result, the price of the March SRW contract is up 65 percent. Yet the price on the December cotton contract is up 120 percent from its low. Cotton is not essential for the food supply...
How Sweet it Isn't
Two major U.S. sugar processors, U.S. Sugar and Imperial Sugar planned a merger, but the Justice Department is saying no. It warns that the duopoly would result in higher sugar prices in the Southeast. But higher sugar prices are the point of U.S. sugar policy. The government sets a floo...
Orange Juice is Fleeting
In the spring of 2020 as COVID-19 was spreading, U.S. consumption of orange juice increased as consumers sought to inoculate themselves with vitamin C. However, the increase was fleeting and not reflected on a global scale. Consumers are seeking to reduce their consumption of sugary drinks at t...
Volatility in Pistachios
The U.S. first displaced Iran as the world’s leading producer of pistachios in 2012 and for the past four years it has not even been a contest. Iran’s downfall was in part U.S. trade sanctions, but also its failure to manage water resources and disease problems properly. While the p...
How Sweet It Isn't
Global sugar consumption has now paced below the population growth rate for three years in a row. After dipping sharply in 2019, per capita consumption continues to be lower than it was in the first part of the last decade. There are many factors involved including substitutes, price, and deman...
2021 Sour Domestic Sugar Outlook
The MY 2020/21 outlook for sugar is for more domestic production and a reduction in imports, but with lower deliveries and increasing year-end stocks. Beet sugar production is up 133,662 short tons – raw value (STRV) based on higher extraction rates in Minnesota and North Dakota. Cane pro...
Agriculture and RCEP
Asian leaders gather this Sunday to hopefully put the final touches on a trade agreement called the Regional Comprehensive Economic Partnership (RCEP). The negotiations have taken eight years and, as usual, the word comprehensive does not apply to agriculture. Likely exempt from tariff reductio...
CFTC Approves Commodity Position Limits
One common thread running through part of the history of grain trading has been the subject of federally set limits on the size of positions that a trader could hold in grain and oilseed futures and options. On 15 October, the CFTC finally approved a new rule regarding commodity position limits...
Could Be More Bearish
Trading grain is not as sexy now as it was back in 2007-2008, but it could be worse. Orange juice futures were a big deal in 1983 when the movie Trading Places was a Hollywood hit but the underlying commodity has been falling out of favor in recent years. Global production and trade have been t...
Cocoa Canary
Given their inelasticity, staple agricultural commodities are a poor indicator of economic health. However, luxury food items like cocoa may be a better indicator of the world’s recovery from the coronavirus. The December contract was up about 2 percent in today’s trading but remain...
Food versus Fiber
A common debate about a decade ago was framed as food versus fuel; should crops traditionally used for food instead be converted into biofuel, especially during a food shortage. Opponents of biofuel may continue to argue in favor of only crops for food but there was also a forecast of declining...
WHO Guidance Effectiveness
The World Health Organization’s Eastern Mediterranean Regional Office issued an advisory recently that advised people to consume unsaturated fats such as those in fish, avocado, nuts, olive oil, soy, canola, sunflower and corn instead of the saturated fat in meat, butter, palm and coconut...
The Next China
The country with the largest population is China and India is second but agricultural marketers are always looking for alternative markets. Indonesia has 265 million people living on 17,000 islands with a total arable land base of just 13 percent. While its import policies have been designed to...
Trade War Trade Impacts
The U.S.– China trade war has had a far more dramatic impact on American agriculture than it has had on farmers in the Middle Kingdom. In fiscal year 2017, the U.S. had a $16 billion agricultural trade surplus with China. In percentage terms, U.S. food sales to China that year were 142 pe...
China In-Country Analysis
Livestock Live Hog Price Down 2 Percent, White Feather Broiler Rises By 11 Percent After peaking at RMB 40.28/kg ($5.73/kg) or RMB 18.27/lb. ($2.60/lb.) at the end of October, the national average live hog price has fallen for five straight weeks. Ending last week at RMB 31.61/kg ($4.50/kg) or...
A Faint Light from Golden Rice
As someone who has for many years pursued a deep interest in the business and economics of agriculture and food, one of the greatest frustrations and disappointments is the organized, systematic opposition to nearly all the scientific and technical advances in food and agricultural production d...
Alternative Crops
U.S. cotton farmers are lamenting a season in which they planted a lot of acres, faced lower yields due to weather, lower prices due to competition from Brazil, and restricted markets due to the U.S. - China trade war. Still, natural fibers remain a buoyant market and cotton was always a fallba...
The Long View
Grain traders from commodity fund managers to the big multinational agribusinesses have consistently complained about the lack of profitable trading opportunities during the past five years or so. Big crops and large stockpiles of corn, wheat and soybeans in both the U.S. and the world drove pr...
Can’t Beat Beet Molasses
Molasses left over from the processing of beets for sugar is typically the poor cousin to the molasses that results from making sugar from sugarcane. Cane-based molasses has superior nutritional qualities and has historically earned a premium. USDA pricing from more than a decade ago shows a 50...
Agricultural Funds and ETFs
The theory that commodities were a useful tool for anyone seeking to diversify an investment portfolio gained considerable popularity in the early years of the 21st century. This was based on studies indicating that commodity and equity prices often moved in opposite directions. The viability o...
USDA Makes Changes to WASDE Tables
USDA announced this week that it will make some changes (noted below) to the monthly WASDE (supply and demand estimates) starting with the May report. While not huge, these modifications will likely add clarity and should have been implemented long ago. They will not affect the actual numbers b...
More Things to Keep You Up at Night
- Grain and oilseed markets were firm today, mostly on growing chatter that the U.S. and China are very close to reaching an agreement on trade. The devil is always in the details, which won’t be known until the deal is made public. Much of the commentary on various business channels toda...
Indian Subcontinent Regional Analysis
Higher Early Sugar Production and Slow Exports Could Pressure Prices Due to the early start of the 2018/19 sugarcane crushing season, Indian sugar mills were able to produce 21.93 MMT of sugar as of 15 February 2019 versus 20.36 MMT at the same point a year ago, an increase of 7.71 percent. Ano...
Indian Subcontinent Regional Analysis
Ample Soybean Supplies Expected to Result in 1 MMT Carryover While the government of India (GOI) has projected 2018/19 (October-September) soybean production at 13.459 MMT, the Soybean Processors Association (SOPA) projects the total at 11.483 MMT, a difference of 1.976 MMT. Per available detai...
China In-Country Analysis
Market Trends A Tale of Two Years With the shutdown of the U.S. government over (at least temporarily), its official statistics are now available to the general public for analysis. Similarly, China’s curtailment of the widespread distribution of official data, the result of a crackdown o...
Indian Subcontinent Regional Analysis
Cotton Imports to Surge on Lower Production; Prices Could Remain Depressed The Cotton Association of India (CAI) has now estimated cotton production in 2018/19 (October-September) at 33 million bales, down from last month’s estimate of 33.5 million bales as well as the government of India...