Recent Softs Analysis
CFTC COT Report Analysis
Once again, the major finding of Friday’s CFTC report is that funds still remain solidly bullish corn and added another 7 percent to their long position in that market. That was particularly impressive as the week ending 19 November (the reporting deadline for the CFTC report) included days wit...
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...
Indian Subcontinent Regional Analysis
Poultry Sector Suffering Severe Losses; Imported Chicken Cheaper As a follow-up to the issue of rising feed prices that was discussed in the 11 January report (click here), the poultry sector’s margins continue to fall with the cost of production up at least 7.5 percent due to those price...
Indian Subcontinent Regional Analysis
Sugar Production Estimates Lowered Based on new satellite survey data from the Indian Sugar Mills Association’s (ISMA’s) satellite survey of sugarcane plantings, the sugar production estimate has been decreased from 31.5 MMT to 30.7 MMT. That is 4.3 MMT or 12.28 percent lower than t...
Indian Subcontinent Regional Analysis
Rabi Sowing Down As of 18 January 2019, the total rabi planted area was down 4.8 percent versus 2017/18. While wheat is among the crops affected, pulses and coarse cereals, most especially pearl millet, are down significantly (see table below). The overal oilseed area has been good, however, as...
Brainstorming without USDA
It takes something like the current partial shutdown of the U.S. government to make those involved with agricultural markets realize how much we depend on the stream of data from USDA. The regularity of things like export sales reports, livestock reports, and estimates of production, supplies a...
Indian Subcontinent Regional Analysis
Pulse Prices Continue to Rise; GOI Restricts Imports India’s Ministry of Commerce has extended the yellow pea import restriction through 31 March 2019. The import restrictions’ goal is to curb cheaper imports and help boost domestic pulse prices. The Government of India...
Indian Subcontinent Regional Analysis
Rapeseed-Mustard Prices Crash as Hopes of Exporting to China Vanish As relations between the U.S. and China thawed and a 90-day truce was called, all hopes of India exporting rapeseed-mustard meal and soymeal to the latter vanished. China was back in the market for U.S. soybeans. It did make st...
Indian Subcontinent Regional Analysis
Vegetable Oil Imports Decline India’s vegetable oil imports totaled 1.073 MMT last month, a drop of 10.1 percent from 1.174 MMT in October and down 15.2 percent versus November 2017. In June 2018, the government of India (GOI) raised the duty on vegetable oils. The rates on crude palm oi...
Indian Subcontinent Regional Analysis
Sensitive Sugar Situation in India India has so far contracted to export approximately 1 MMT of sugar against the government’s fixed target of 5 MMT. Despite dropping 3.49 percent in the past month, however, the Indian sugar price is still 21.06 percent higher than the world price, which...
Indian Subcontinent Regional Analysis
Pulses Demand, Supply and Prices India has been importing large quantities of pulses/lentils over the years. That slowed in the last year, however, as domestic production has increased because of higher Minimum Support Prices (MSP). Khariff pulses production is expected to rise from 6 MMT in 20...
Indian Subcontinent Regional Analysis
How Much Sugar and Ethanol Will India Produce in Sugar Year 2018/19? It was widely speculated about four months ago that India would produce a huge volume of sugar at 35.5 MMT, adding to its problems of plenty. Following new reports of water scarcity and drought conditions in Maharashtra (as we...
Indian Subcontinent Regional Analysis
As India’s Sugar Production Commences, Ethanol Tender Under Scrutiny The sugarcane crush season has started in India with a few mills beginning operations in Maharashtra last week. There are still some issues to be resolved before all mills are crushing, including the labor wages for harv...
Indian Subcontinent Regional Analysis
Oil Meal Exports Continue Upward Trend India’s oil meal exports totaled 1.403 MMT for the first six months of FY 2018/19 (April-March), up 0.119 MMT or 9 percent from 1.284 MMT a year ago. Rapeseed meal exports had the biggest gain at 0.601 MMT versus 0.3 MMT during April-September 2017...
Indian Subcontinent Regional Analysis
MSP for Rabi Crops Announced The commitment to double farmers’ income by the Modi government ensured an increase in the Minimum Support Prices (MSPs) of key rabi crops, which was approved by the Cabinet Committee on Economic Affairs (CCEA) early this week. The goal is to provide at least...
Indian Subcontinent Regional Analysis
Another Bailout Package for Sugar Sector The Cabinet Committee on Economic Affairs (CCEA) has approved a third package to bail out the sugar industry. Worth $758 million, it includes a freight subsidy for sugar exports of up to 5 MMT and $1.89/MT on cane crushed in 2018/19. The first package, v...
Early 2019 Acreage Forecasts
In advance of USDA’s winter wheat acreage report on Friday, WPI has prepared early forecasts of 2018/19 crop planted area for the U.S. Given current market dynamics, it comes as no surprise that our research finds corn acres will increase at the expense of soybeans. Wheat area will increa...
Indian Subcontinent Regional Analysis
Drop in Vegetable Oil Imports India’s vegetable oil imports have increased over the years. They rose from 14.42 MMT in 2014/15 (November-October) to 14.57 MMT in 2015/16 and 15.07 MMT (approx. 1.25 MT/month) in 2016/17. In 2017/18, though, overall imports are down. According to data...
Market Commentary: The Bear that Ate the Corn Market
The WASDE was undeniably bearish with December corn and November soybean futures reaching new contract lows (actually, soybeans hit the low before and after the WASDE’s release), while wheat futures were down double-digits in response to the latest news. The headline numbers cratering the...
Indian Subcontinent Regional Analysis
Demand for Quality Malt and Beer Increasing The number of microbreweries has grown from 20 to 120 in the past five years (2013-2018), up 500 percent. New international brands have come to India during this period, and now the trend is to sell bottled/canned craft beer. However, none of this mea...
India Subcontinent Regional Analysis
Sugar Prices Stable; Exports Not Feasible Even with the Merchandise Export from India Scheme (MEIS) export incentive of 7 percent, it is not possible to make a profit exporting sugar. The government of India (GOI) set an export target of 2.0 MMT for the 2017/18 season (ending 30 September), but...
India Subcontinent Regional Analysis
Vegetable Oil Imports via South Asian Countries India’s edible vegetable oil imports dropped about 2.23 percent during November 2017-June 2018 to 9.4 MMT versus 9.615 MMT in the same previous eight months. For June 2018, they were 19.18 percent lower than May 2018 at 1.007 MMT and down 22...
Indian Subcontinent Regional Analysis
Increased Sugarcane Prices a Double Blow for the Sugar Industry As this is an election year, the government must please farmers, the backbone of the Indian economy. As it promised in the election manifesto and again in the budget speech to guarantee them at least a 50 percent profit above the c...
India Subcontinent Regional Analysis
Ethanol Policy Changes May Not Ease Pressure on Sugar Sector Immediately Changes in ethanol prices, including that of B-Heavy molasses as an input for making the fuel, do not mean that India will become self-sufficient in supplies and fulfil the demand of the Ethanol Blending Program (EBP). Fur...
Indian Subcontinent Regional Analysis
Ban on Yellow Pea Imports Extended for Three Months India’s Ministry of Commerce has extended the ban on yellow pea imports, first implemented in late April 2018 for a three-month period as the price of chickpeas cotinued to slide, until 30 September 2018. Per the notification, “The...
Closing Bell Wrap-Up
CBOT products bounced higher today as the Trump Administration confirmed it is backing away from new restrictions in investment and intellectual property purchase rights to be applied on China. The move is being interpreted as the Administration taking a softer tone to draw China back to the ne...
Indian Subcontinent Regional Analysis
Falling Soymeal Prices May Move Up if Exports Continue Soybean and soymeal prices moved lower last week but had some upward movement near its end, and they are stable now due to slow poultry sector demand as well as international cues. However, world prices are still lower. The Indian soybean s...
Indian Subcontinent Regional Analysis
Ethanol Production Up; Prices Nose-Dive As noted in earlier reports, India’s sugar production in sugar year 2017/18 (November-October) is expected to reach 32 MMT, and that is having an effect on ethanol production. The latter is now expected to total 3.11 billion liters (0.822 bill...
India Subcontinent Regional Analysis
Wheat Procurement Exceeds Estimates; Open Market Prices Drop As of 4 June 2018, 34.724 MMT of wheat had been procured for 2018/19 by the Food Corporation of India (FCI) and state agencies, 8.51 percent more than the government of India’s (GOI’s) fixed target of 32 MMT. For reference...
Indian Subcontinent Regional Analysis
Sugar Prices Improve on GOI Intervention It seems that the government of India (GOI) has finally heeded the sugar industry’s demand and will create a buffer stock. With the Indian Sugar Manufacturers Association now boosting its sugar production forecast to 32 MMT, 2018/19 opening stocks...
Indian Subcontinent Regional Analysis
Higher Sugar Production Keeping Prices Low India’s sugar production could reach 31.5 MMT, according to the Indian Sugar Manufacturers Association (ISMA). The mills in Uttar Pradesh are still crushing sugarcane and may continue to do so until the end of the month. The higher-than-normal pr...
Indian Subcontinent Regional Analysis
Subsidy for Sugarcane Growers Unable to pay for sugarcane deliveries because of high input costs and low sugar prices, the sugar industry approached the government for an intervention. The arrears owed to farmers had reached $2.98 billion at the end of March 2018, and the government of India (G...
Indian Subcontinent Regional Analysis
Soymeal Exports Trending Lower For FY 2017/18 (April-March), India’s soymeal exports totaled 1.156 MMT, up from 0.916 MMT the previous year. However, they were lower in the first six months at 0.666 MMT versus 0.840 MMT during the same period of FY 2016/17. After peaking at 0.207 MMT in N...
India Subcontinent Regional Analysis
Wheat Procurement Starts; New Crop Quality Issues Unseasonal rains across the wheat belt (north India) in the last week have somewhat damaged the crop, which is ready for harvest. In those areas where harvesting has begun, the stock arrivals at market yards have been similarly impacted by rainf...
India Subcontinent Regional Analysis
Record Sugar Production Expected as Prices Tumble and Arrears Mount India’s sugar production for 2017/18 (October-September) is now expected to total 30.3 MMT, up from the previous estimate of 29.5 MMT. The production cycle is coming to an end with output reaching a high of 28.18 M...
Stocks and Prospective Plantings
USDA’s 1 March quarterly stocks and initial planting intentions reports have a history of providing market-moving surprises, and today’s releases add to that history. The corn and soybean stocks had been expected to be record large, and they were. Along with those of wheat, they all...
Indian Subcontinent Regional Analysis
Soybean Supply and Demand Balance Shows Deficit While the government of India (GOI) has forecast the 2017/18 soybean crop at 11.39 MMT, the trade and industry is projecting 7.2-7.5 MMT. Domestic crushers have procured 0.1 MMT from various African origins (mainly Ethiopia) in recent months as th...
Indian Subcontinent Regional Analysis
Record Sugar Production Expected Based on the projected increase in sugarcane production (see Ag Perspectives, 2 March), a higher crush as well as good recovery in Maharashtra, Karnataka and Uttar Pradesh, the sugar industry expects 2017/18 sugar production to reach 29.2 MMT, a record. That is...
China In-Country Analysis
Macro Trends China’s Ag Imports Climb Nearly 13 Percent in 2017 With the conclusion of China’s Lunar New Year celebrations, its Ministry of Commerce has started to release year-end data. Farm-related products entering the country in 2017 were valued at $125.9 billion, up 12.8 percen...
Let the Guessing Games Begin
The noted economist John Kenneth Galbraith famously observed that “the only function of economic forecasting is to make astrology look respectable,” which is interesting since he was one of the foremost economic forecasters of his time. His remark could be considered especially appl...
Indian Subcontinent Regional Analysis
Soymeal Prices Up, but DDGS Not Available as Alternative The Soybean Oil Processors Association (SOPA) has again trimmed its estimate for India’s 2017/18 soybean production (harvest in October-November 2017), reducing the previous forecast of 9.15 MMT to 8.35 MMT. The government of India...
Indian Subcontinent Regional Analysis
Sugar Prices Firm; Export Duty Could Be Removed Sugar prices continue to firm following the imposition of an export duty and stock limits on sugar mills. According to National Commodity and Derivatives Exchange (NCDEX) data, the bottom spot price occurred on 5 February 2018 with prices rising 8...
Indian Subcontinent Regional Analysis
Higher Duties on Sugar and Chickpea Imports Have Immediate Effect To keep a check on prices, the government of India (GOI) has raised the duty on sugar from 50 percent to 100 percent. The increase was a demand from the sugar industry as sugar prices were below the cost of production. Both carry...
Indian Subcontinent Regional Analysis
High Duty Reduces Edible Oil Imports Edible oil imports dropped in December 2017 following an increase in the duty the previous month, falling approximately 9.88 percent to 1.058 MMT versus 1.174 MMT in December 2016. They totaled 2.283 MMT for the two months of November and December 2017, down...
Market Commentary
Soybean and product prices moved lower overnight while grains climbed higher, reversing yesterday’s pattern of direction. The volume of trade was notably higher than during recent overnight sessions, probably in response to a sharp decline of the U.S. dollar against most other major curre...
Indian Subcontinent Regional Analysis
Sugar Prices Continue to Tumble Sugarcane processors (mills) should pay farmers for their stocks within two weeks of the harvest/purchase, and the government of India (GOI) had increased the prices in 2017 for sugar year 2017/18 (October-September). There is a lag period as the sugar is process...
Summary of Futures
Ag, energy, and soft commodity futures’ technical patterns, including momentum and long-term indicators, are examined. Changes in the forward curve for grain futures have important implications while livestock momentum indicators provide directional insights. ...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MIDDLE EAST/MEDITERRANEAN COMMENTS The first shipment of 2,200 MT of Indian wheat has arrived in Kabul, Afghanistan via Iran’s Chabahar port. Another 60,000 MT are reported to be in Chabahar, the first lot of an estimated 1.1 MMT destined for various locations in Afghanis...
Summary of Futures
Ag, energy, and soft commodity futures’ technical patterns, including momentum and long-term indicators, are examined. Changes in the forward curve for grain futures have important implications while livestock momentum indicators provide directional insights. ...
Summary of Futures
Changes in energy products’ recent price behavior point to potential trading opportunities. Similarly, the momentum indicators in grains show opportunities in those commodities are rapidly changing as well. Finally, livestock and soft commodity futures are analyzed and their forward curve...
Regulated Commodity; Foodtopia
Regulated Commodity The Commodity Futures Trading Commission (CFTC) announced that it will hold hearings at the end of the month to examine issues related to regulating the trading of bitcoin. The value of bitcoin has risen rapidly in recent weeks as speculators have taken a more dominant posit...
Indian Subcontinent Regional Analysis
Higher Supplies Keeping Sugar Prices in Check India’s sugar production reached 10.3 MMT as of 31 December 2017, a 25.36 percent increase from the total 8.2 MMT on the same date in 2016. It totaled 3.8 MMT in Maharashtra, 3.33 MMT in Uttar Pradesh and 1.62 MMT in Karnataka. This boost corr...
Summary of Futures
Changes in energy products’ recent price behavior point to potential trading opportunities. Similarly, the momentum indicators in grains show opportunities in those commodities are rapidly changing as well. Finally, livestock and soft commodity futures are analyzed and their forward curve...
Summary of Futures
Recent price activity for ag, energy, and soft commodities is examined in tabular and graphical format. The most important price analysis is distilled for easy understanding and presentation. Starting with a five-day price history for ag, energy and soft commodity futures prices, Commodity Anal...
Summary of Futures
Ag, energy, and soft commodity futures’ technical patterns, including momentum and long-term indicators, are examined. Changes in the forward curve for grain futures have important implications while livestock momentum indicators provide directional insights...
Indian Subcontinent Regional Analysis
Soymeal Prices on the Rise Demand for soymeal and soyoil is robust, but the soybean supply is limited and slow. The government of India’s (GOI’s) first advance estimates in September 2017 put soybean production at 12.217 MMT. However, the trade’s estimate was much lower...
Summary of Futures
Changes in Commodity Analytics’ short-term technical indicators for grain futures should be carefully examined against long-term signals. Elsewhere, livestock futures (live cattle, feeder cattle, and lean hogs) are showing technical signals that may influence how traders should man...
Summary of Futures
Changes in energy products’ recent price behavior point to potential trading opportunities. Similarly, the momentum indicators in grains show opportunities in those commodities are rapidly changing as well. Finally, livestock and soft commodity futures are analyzed and their forwar...
Closing Futures Prices
WPI provides a summary of the week’s futures price activity and the gains/losses experiences by grain, oilseed, and livestock markets. Additionally, today’s data from the CFTC points to changing views among managed money funds. Meanwhile, commercial traders’ positions are chan...
Indian Subcontinent Regional Analysis
Sugar Prices Under Pressure as Production Rises India’s 2017/18 sugar production totaled 6.94 MMT as of 15 December 2017, up 5.346 MMT (29.81 percent) versus the same date last year. The sugar manufacturing/cane crushing was delayed in 2016, and it began this year on 1 October. With highe...
Friday
Fri 12/22/2017 12:00 pm Cattle on Feed NASS 12:00 pm Chickens and Eggs NASS 12:00 pm Cold Storage NASS 12:00 pm Cotton Ginnings NASS 12:00 pm Hogs and Pigs NASS 12:00 pm Peanut Prices NASS ...
Summary of Futures
Changes in Commodity Analytics’ short-term technical indicators for grain futures should be carefully examined against long-term signals. Elsewhere, livestock futures (live cattle, feeder cattle, and lean hogs) are showing technical signals that may influence how traders should mana...
Indian Subcontinent Regional Analysis
Higher Cotton Production Expected; Prices Slowly Moving Up: The Cotton Advisory Board (CAB)’s estimate of India’s 2017/18 cotton production is 37.7 million bales (170 kg each), up 9.27 percent from 34.5 million bales in 2016/17.It is projected to be down in states that include Mahar...
Cotton Terrorism; Cultural Shipping; Bored in BsAs; Oil versus Wheat
Cotton Terrorism Domestic agricultural subsidies distort markets and thus cause a multitude of harms. However, none seems worse than the overproduction of cotton in rich countries that adversely impacts farmers in the “cotton-four” West African countries. Nonetheless, they are...
Indian Subcontinent Regional Analysis
Wheat Sowing Slow; Higher Prices Remain Stable The rabi wheat sowing has reached 11.066 million hectares thus far, down 12.41 percent from 12.635 million hectares at the same time last year. The government of India (GOI) had doubled the wheat import duty in early November (near the start of the...
Stuff and Fluff of en dehors; Carbo-Overload
Stuff and Fluff of en dehors Donald Trump has adopted the “Asian pivot” of his predecessor but not in the same fashion. While Barack Obama approached China cautiously and all others with full embrace, the Donald’s less nuanced approach involves far higher risk. Thus far on his...
Next Week
WPI provides a list of coming USDA reports that will have market-moving interest to our readers. Reports included in this list span those covering feed grains, wheat, oilseeds, livestock, and soft markets. Mon 11/06/2017 9:00 am Milk Cost of Production ERS 11:00 am Livestock and Me...
Indian Subcontinent Regional Analysis
Indian Market Should Open to U.S. Imports The U.S. Commerce Dept. and U.S. Trade Representative first raised market access issues with India at the 26 October 2017 Trade Policy Forum (TPF) held in Washington, DC, and pressure has continued to build on the nation to open its doors to U.S. produc...
Friday
WPI provides a list of coming USDA reports that will have market-moving interest to our readers. Reports included in this list span those covering feed grains, wheat, oilseeds, livestock, and soft markets. Fri 11/03/2017 3:00 pm Latest U.S. Agricultural Trade Data ERS 3:00 pm Peanu...
Wednesday
WPI provides a list of coming USDA reports that will have market-moving interest to our readers. Reports included in this list span those covering feed grains, wheat, oilseeds, livestock, and soft markets. Wed 11/01/2017 3:00 pm Broiler Hatchery NASS 3:00 pm Cotton System NASS 3:00...
Next Week
WPI provides a list of coming USDA reports that will have market-moving interest to our readers. Reports included in this list span those covering feed grains, wheat, oilseeds, livestock, and soft markets. Mon 10/30/2017 3:00 pm Agricultural Prices NASS 4:00 pm Crop Progress NASS &...
Indian Subcontinent Regional Analysis
MSPs for Key Crops Increased Before Sowing Season Begins The government of India (GOI) has raised the 2017/18 Minimum Support Prices (MSPs) for rabi crops in order to encourage farmers to plant more pulses and oilseeds. The MSPs for wheat and barley were also increased. The government and its...
Friday
WPI provides a list of coming USDA reports that will have market-moving interest to our readers. Reports included in this list span those covering feed grains, wheat, oilseeds, livestock, and soft markets. Fri 10/27/2017 12:00 pm Rice Stocks NASS 3:00 pm Livestock & Meat Domest...
Short-Lived Sugar Taxes
Many food and ag regulations/policies start off as state and/or local initiatives before spreading elsewhere. Animal welfare began with a referendum on swine production practices in Florida, and nutritional labeling on restaurant menus was a New York City requirement. Labeling of GM ingredients...
India Subcontinent Regional Analysis
Vegetable Oil Imports Up and Expected to Increase Further India’s oil year 2016/17 (November-October) ends soon with all vegetable oil imports in the past 11 months totaling 14.268 MMT, up 5.18 percent against 13.565 MMT during the same period of the previous year. This included 13.939 MM...
Wednesday
WPI provides a list of coming USDA reports that will have market-moving interest to our readers. Reports included in this list span those covering feed grains, wheat, oilseeds, livestock, and soft markets. Wed 10/18/2017 11:00 am Fruit and Tree Nut Data ERS 11:00 am Vegetable and P...
Oilseed Highlights: China’s Soybean Crop Impacts Prices; U.S. Senators and Biodiesel Blending Mandate; NOPA Crush Report
Larger China Soybean Crop Results in Lower Prices Last year China decided to boost its support to farmers growing soybeans while simultaneously reducing that provided for growing corn. The objective was to begin to reduce corn production in order to lower its huge stocks as well as decrease soy...
Next Week
Mon 10/16/2017 12:00 pm Cotton & Wool Outlook: October 2017 ERS 12:00 pm Oil Crops Outlook: October 2017 ERS 3:00 pm Feed Outlook: October 2017 ERS 3:00 pm Rice Outlook: October 2017 ERS 3:00 pm Wheat Outlook: October 2017 ERS 4:00 pm Crop Progress NASS Tue 10/17/2017 3:00 pm Feed Gr...
India Subcontinent Regional Analysis
Higher Cotton Production Could Bring Prices Down The land planted to cotton in India has increased 18.62 percent to 12.1 million hectares in 2017/18 versus 10.2 million hectares in 2016/17. Farmers shifted to cotton as they were unable to make a profit last year with other crops, mainly pulses...
Scapegoat Wine
Copa-Cogeca’s Wine Working Party has warned that climate change and extreme weather have caused a “historically low” wine harvest. French production is reportedly down 18 percent, and Italy’s wine output is off 26 percent. However, global grape production is up 40 percen...
Summary of Futures
Ag, energy, and soft commodity futures' technical patterns, including momentum and long-term indicators, are examined. Changes in the forward curve for grain futures have important implications while livestock momentum indicators provide directional insights.Summary of Closing Prices...
Moral Based Trade; Marginal Change Required
Tying climate change requirements to trade agreements may seem wise, but doing so holds dangerous moral implications. Elsewhere, negotiation means everybody gets something and NAFTA renegotiations mean Mexico should target the U.S. sugar supply management program. Moral Based Trade When activis...
Middle East, Mediterranean and Africa Regional Analysis
Kenya is facing a maize shortage while Zambia faces oversupply with the inability to export. Meanwhile, Turkey is looking for a new customs union arrangement with the EU that will benefit both sides while Syria claims to import Russian wheat. Regional Updates MEDITERRANEAN/MIDDLE EAST COMMENTS...
Derivative Choices; Policy Choices; Loss of Hydrogen
India is allowing commodity derivatives trading while the European Parliament wants to increase regulation on futures markets, time will tell which policy choice will be preferable. Elsewhere, hydrogen changes a product’s tariff scheme. Derivative Choices The Reserve Bank of India has decided t...
Conference Critical of Farm Policy to Be Convened in DC
It is easy to tell that the farm bill is right around the corner because all the anti-farm program think tanks are suddenly engaging in the policy debate.Next week an invitation-only policy confab is being convened to criticize crop supports, export promotion programs and crop insurance. Moreov...
Indian Subcontinent Regional Analysis
India is expected to have a robust sugarcane harvest with production at 25.1 MMT in sugar year 2017/18, and there has been considerable discussion about enhancing the mills’ ethanol production capabilities. Sugar or Ethanol India is expected to have a robust sugarcane harvest with production at...
Middle East, Mediterranean and Africa Regional Analysis
Zimbabwe’s acting president has said that the government’s program of buying maize at $390/MT from farmers and selling it to maize millers at $250 /MT is “very economic” for the country, and there are several reasons why. Regional Updates MIDDLE EAST/MEDITERRANEAN COMMENTS Egypt’s prosecutors h...
Indian Subcontinent Regional Analysis
India and the U.S. have continued to build their relationship, but the issue is the trade deficit that favors the former. The U.S. could impose restrictions on Indian products to bridge the gap, but there is an alternative policy that India could implement. Pulses Exports Allowed After an 11-Ye...
Outdated Embargo Protection; Transatlantic Troubles
Some aggies are concerned that the Trump administration will impose a trade embargo against China if Beijing does not do more to stop North Korea’s nuclear missile efforts. Outdated Embargo Protection Some aggies are concerned that the Trump administration will impose a trade embargo against Ch...
Indian Subcontinent Regional Analysis
With India's planted corn area down and production expected to be impacted by the effects of flooding and drought, several factors could limit any imports to meet demand. India’s Vegetable Oil Demand Rises; Shares of Traditional Oils Drop India’s edible oil imports in oil year 2016/17 (November...
Trade Policy Conundrum; Bipartisan Tax Time; Target India
A meeting of U.S. aggies to discuss the renegotiation of NAFTA involved much focus on the net benefits of trade agreements and what is disliked about the current situation, but some key issues remain. Trade Policy Conundrum A meeting of U.S. aggies to discuss the renegotiation of NAFTA involved...
Energy Fallout; Farm Support Fallout; Reap What You Sow
The prospects for a WTO agreement on further capping domestic agricultural supports at this December’s ministerial meeting are quite slim. Meanwhile, the push by U.S. farm groups to alter farm programs here could have unintended consequences. Energy Policy Fallout China’s cabinet says it will s...
Indian Subcontinent Regional Analysis
Market/trade reports indicate India's soybean crop this year could be 10 percent less because of the smaller planted area as well as the water damage incurred. If soymeal prices move up, the country could lose one advantage. Sugar Imports Allowed Exclusively for South Indian Sugar Mills I...
Congress Passes Major Fiscal Package
The House followed the Senate in passing a bill that funded the government, provided hurricane relief and addressed the debt limit. However, this is only a temporary solution until December.Today the House of Representatives passed an amended Reinforcing Education Accountability in Development...
Oilseed Highlights: Vietnam and U.S. DDGS; Brazil Soybean Export Forecast; Canadian Canola Stocks; The EU and Argentine Biodiesel
The U.S. Trade Representative’s office indicates the government of Vietnam has addressed the issue of U.S. DDGS imports, and the EU is taking action on the antidumping duties (ADs) it had imposed on imports of Argentine biodiesel in 2013. Vietnam to Resume Importing U.S. DDGS The U.S. Trade Rep...
Oilseed Highlights: Bolivian Soybeans to China; EU Oilseed Production; Thai Soy Imports; Indian Vegoil Imports
The government of Bolivia has reached an agreement with China that is aimed at boosting its exports to that country. However, it faces one certain challenge to achieving this goal. Bolivia Agreement with China to Boost Soybean Exports The government of Bolivia has reached an agreement with Chin...
Indian Subcontinent Regional Analysis
According to a recent report, India’s broiler industry is on a growth path in 2017/18. However, it is also under immense pressure from various sources as new data reveals a critical issue. Stock Limits Imposed on Sugar to Control Prices With low output in sugar year 2016/17 (October-November),...
Market Commentary
Hurricane Harvey is creating export challenges, but robust yield estimates keep pressuring grain and oilseed futures. The cattle and hog markets took diverging paths with cattle earning triple-digit gains and hogs suffering triple-digit losses. General Comments Grain futures were mixed in moder...
Overproduction Support; Canadian Walls
Donald Trump has made clear that he wants to build a wall on the U.S.-Mexican border, but today the U.S. and Mexican dairy industries decided that one needs to come down, and it is located elsewhere. Overproduction Support The EU’s Common Agricultural Policy (CAP) support may have not only enco...
Pot Calls Kettle Black; Dangerous GMOs
European Central Bank President Mario Draghi, speaking at the U.S. Federal Reserve’s annual policy meeting in Jackson Hole, gave warning against protectionism and its adverse impact on the global economy. Pot Calls Kettle Black European Central Bank President Mario Draghi, speaking at the U.S...
Indian Subcontinent Regional Analysis
The sowing of some key commodities is down, and the major crops affected include pulses, coarse cereals and corn. There are two reasons for this, and it will be difficult at this point to expand the planted areas. Sowing Lags; Rain Shortfall Affects Key Commodities Two reasons why the sowing of...
Middle East, Mediterranean and Africa Regional Analysis
Kenya’s National Biosafety Authority (NBA) has announced that field trials for GM maize and cotton will start in October 2017, which is contrary to the efforts of one government ministry. Regional Updates MIDDLE EAST/MEDITERRANEAN COMMENTS A new finance program with Saudi Arabia will allow the...
Cotton Wants Back in Title I of Farm Bill
Farm income data shows that cotton has been a volatile market, and the industry is pressing to get back into Title I of the next farm bill.While the farm bill is scheduled to be taken up in 2018, it could possibly come before the full House of Representatives or the Senate in 2017 at any time a...
Indian Subcontinent Regional Analysis
As the GM food debate in India continues, the supply and demand gap, especially of vegetable oil, is widening, and farmers are losing money due to pest attacks while using more pesticides and herbicides. Possible Sugar Imports Could Alleviate Shortages in a Few States Sugar prices have moved u...
One-Way Pattern; GMOs Worse than CAFOs; Sweet Elasticity
U.S. exports of ethanol to Brazil are up 80 percent, and industry groups there have been demanding a tax be placed on the imports from America. Washington warns that it can reciprocate. One-Way Pattern U.S. exports of ethanol to Brazil are up 80 percent, and industry groups there have been dema...
Water versus Climate Change; Blocking Imports; Wheying Yogurt Name
The Trump administration talks a tough game on trade. When it comes to protectionism, though, it is other countries that are taking real action. Water versus Climate Change Climate change is the number one issue within the environmental community. The theory is that most everything is worthless...
Oilseed Highlights: Record Chinese Soy Imports; Containerized Soy Shipments; Brazilian Rail; Shooting Fire-Setters
U.S. soybean exports via containers have been exceptionally strong this year, almost all destined to Asia with the key markets being Taiwan, Indonesia, Thailand, Vietnam and Malaysia, and shippers are citing one particular reason. Record Chinese Soybean Imports in July Reuters reported today th...
Brazil May Impose TRQ on Ethanol Imports
The Brazilian Foreign Trade Council (Camex) may place a TRQ on ethanol imports in the next two weeks that will impact U.S. ethanol producers.It is nothing like the clashes within the Trump administration, but two cabinet members in Brazil have played out their very different views on ethanol im...
Dicamba – New Soybean Issue?
The Dicamba soybean is the latest (and hoped to be the next greatest) soybean seed/chemical combination, resistant to the broadleaf killer of the same name. However, an issue has developed.Dicamba is a broadleaf killer, and the Dicamba soybean is the latest (and hoped to be the next greatest) s...
Commodity Outlook; Internet and Innovation Inequality
Americans file four times as many patent applications as do Europeans, and part of the reason is a contrast in attitude. Commodity Price Outlook Consumer prices continue to fall in the Group of 20 largest economies. If protectionism were a problem, inflation would likely be rising as higher-pri...
Indian Subcontinent Regional Analysis
India is set on fulfilling its fuel blending mandate and has plans to achieve up to 20 percent ethanol blending in the near future. However, there are several factors and/or obstacles that must first be considered. Soy Plantings Lagging; Prices Down Ministry of Agriculture data indicates that t...
Trade Policy Roundup
Canada does not want to give up its supply management programs for dairy and poultry in the NAFTA 2.0 negotiations, and now it reportedly also wants to maintain the carve-out protecting another sector.Following are a few short, cynical takes on trade policy developments.Better Trade Deal: Last...
Why 2017/18 Will Be Different
A number of developing factors over the past several weeks suggest that the 2017/18 crop cycle will be different across the globe.Major common threads for world agricultural production, trade and crop prices during the last four crop cycles were growing production and building global stocks. Th...
Indian Subcontinent Regional Analysis
India’s rice exports have been lower in 2016/17, but its non-basmati varieties are expected to do better in 2017/18 and find a market in Bangladesh as well as possibly Nigeria. However, basmati could lose the EU market because of a new policy. Pulses Prices Continue to Slide; Planted Area is Up...
Ag Review: Geopolitics and the Black Sea
WPI Agribusiness Subsector Outlook A brief review of WPI’s past Bull/Bear calls and industry stock price performance. WPI Bull/Bear Leanings for Agribusiness in 2017 A summary and graphical depictions of WPI’s expectations for future agribusiness performance. The U.S. Gr...
Oilseed Highlights: Smaller Soybean Production Forecast for Three Countries with a Larger One Expected Elsewhere
Three countries are expected to reduce their soybean planted areas in favor of other crops, but another is forecast to increase its production of the oilseed. Argentina Reduces Estimate of 2017 Soybean Crop Argentina’s Ministry of Agriculture last week lowered its estimate for the 2017 soybean...
Cotton War; Org Mistake; Italy First; Deadly Friteries; Campbell Gamble
The Senate Appropriations Committee not only ignored the agricultural budget cuts recommended by the White House, but it ordered USDA Secretary Sonny Purdue to restore a position he had cancelled. Cotton War The Senate Appropriations Committee responded to the whining of the U.S. cotton industr...
Senate Ag Appropriations Bill Makes Down Payment on Farm Bill
The Senate ag appropriations bill includes funding and reform proposals for two programs that will help make the farm bill slightly easier to craft next year.Following in the steps of the House Appropriations Committee, the Senate Appropriations Committee approved its FY 2018 agriculture approp...
NAFTA Objectives; Cotton Subsidies; GMO Transparency; Crooked Pointing
The White House released its negotiating objectives for NAFTA modernization, and there were mixed reactions. NAFTA Objectives Analyzed The White House released its negotiating objectives for NAFTA modernization, and there were mixed reactions. Republicans praised the intended revision by saying...
Agricultural Trade Policy Moving
The EU, Brazil, Peru, Colombia and Uruguay have together proposed new disciplines on domestic agricultural supports. By contrast, the largest U.S. farm groups are calling for outright increases in subsidy levels for crop insurance and commodity price support.The EU, Brazil, Peru, Colombia and U...
Indian Subcontinent Regional Analysis
GOI's 26 May notifiation of new rules that effectively banned the trading of cattle, including buffaloes, for slaughter at animal markets was met with a petition from farmer associations and the meat industry. Now the Honorable Supreme Court has taken action. Higher Duty on Sugar Imports Will L...
G20 Trade Realism; Risky Forecasts
The OECD and FAO issued their annual long-range outlook (2017-2026) for global food commodity prices, and the U.S. Congressional Budget Office makes the same forecast. G20 Trade Realism Unlike language related to the Paris climate accord that noted discord between Donald Trump and other leaders...
Is the “America First” Approach Changing Biofuel Policy?
The U.S. EPA has released the proposed 2018 Required Volume Obligations (RVOs) for biofuels, the first such issued by the Trump administration, and it signals a different approach toward the Renewable Fuel Standard (RFS) that could shape the future of biodiesel.As Gary Blumenthal noted the othe...
Indian Subcontinent Regional Analysis
Even though the MSPs for pulses and oilseeds have been increased for the khariff season, the market prices for the former are much lower. As a result, farmers are more inclined to shift to other crops, and they are favoring one in particular. Could More Cotton Plantings Produce a Glut? 7.182 m...
Oilseed Highlights: U.S. Soy Crush; Brazil’s Soy Exports; China’s Soybeans; French Biodiesel; Lower Cotton Prices
French Environment Minister Nicolas Hulot today indicated his country’s government will take steps to restrict the use of non-sustainable palm oil and soyoil for biodiesel production in order to reduce indirect deforestation. U.S. Soybean Crush Rate Up Slightly in May USDA’s fats and oil report...
RIN Investigation; Ag Export Hearing
U.S. EPA announced a review of the Renewable Identification Numbers (RINs) system that undergirds the fuel ethanol utilization program and has issued a request. RIN Investigation U.S. EPA announced a review of the Renewable Identification Numbers (RINs) system that undergirds the fuel ethanol u...
Trade Trouble; KROUS Redux; Back to Bite; Fuel Fight
The historical criticism is that America’s economic interests have taken a backseat to national security objectives, and despite his rhetoric demanding fairer trade, Trump looks to be making the same calculation as his predecessors. Foreign = Trade Trouble China has started importing U.S. beef,...
Ag Review: U.S. Grains and the Weather Market
WPI Agribusiness Subsector Outlook A brief review of WPI’s past Bull/Bear calls and industry stock price performance. WPI Bull/Bear Leanings for Agribusiness in 2017 A summary and graphical depictions of WPI’s expectations for future agribusiness performance. The U.S. Gr...
EU-Japan; NAFTA +/-; Kowtowing; Budget Bobbing
EU negotiators are reportedly anxious to close a free trade agreement with Japan. Meanwhile, a report by the Congressional Research Service identifies the pros, cons and negotiating objectives for agriculture in a NAFTA modernization effort. Fast, Slow, Stop EU negotiators are reportedly anxiou...
Oilseed Highlights: Indian Monsoon and Soybean Plantings; U.S. Soyoil Exports to Korea; Soy Export Sales; South American Soybean Updates
Commodity Analytics shows the most recent data for grain export sales and shipments along with historic patterns. Current deviations from historic norms point to changing export opportunities for U.S. products. U.S. wheat exports are analyzed as a share of global exports and presented in graphi...
New Season for USDA Reports
On 30 June, the new season of USDA reports gets well underway. USDA may have a longer history of reporting on world agriculture than any other entity, and each report has its own audience.On 30 June, USDA will release its June survey of how much land was planted to major U.S. field crops as wel...
Cattle on Feed; Fat Fight
Last month's feeder calf placements data points to a changing supply situation for the beef market next quarter. Similarly, feedlots' fed cattle marketings show the industry is remaining current on inventories. Analysis of the fed cattle supply situation offers insight into trading strategies t...
Market Commentary
Trading volume overnight was better than might be indicated by the lack of price movement, but it was unimpressive during the day session. Later during the day, though, grain and soy markets got caught up by a broader sell-off covering multiple commodities. General Comments Grains and the soy c...
Oilseed Highlights: China Subsidy; EU and Soymilk; Argentine Soybeans; Potential Big Soy Buy
China had already implemented a subsidy this year to encourage farmers to plant more soybeans, and that production is likely to be even higher as a separate initiative is introduced to address the country's issue with a different crop. China Sharply Increases Farmer Subsidy to Encourage Crop Ro...
Market Commentary
Minneapolis wheat futures took the lead again in overnight trade, and that pattern followed through at the day session opening. The uncertainty today was that there are some good chances for widely scattered rain events and cooler temperatures in the short-term forecasts. Bulls and bears could...
Where Ag Finds Itself on Trade
Who could have predicted the situation in which the U.S. ag sector now finds itself with Mexico and China?As the saying goes, “Don’t judge a book by its cover.” This apparently applies to the trade policy book for the Trump administration. What is emerging in its first few months is not what wa...
Indian Subcontinent Regional Analysis
The federal and state governments have been unable to buy grain/oilseeds/pulses at the declared MSP, and GOI wants the private sector to lower the prices of inputs. Meanwhile, today it released the final 2017 MSP for various ag commodities, which were not as expected. Sugar Prices Continue Down...
Milk Shake; Beef Hurdles; NAFTA Issues; Shorts
USDA Secretary Sonny Perdue appeared to be referencing the ultrafiltered milk issue when he stated that Canada’s dairy processing schemes were key to the future success of NAFTA negotiations. Transatlantic Milk Shake The European Court of Justice has ruled against a tofu-based maker of products...
Unsustainable Splintering; Farm Policy Splintering; Robotic Benefit
The U.S. rural credit entity Farmer Mac issued its quarterly report called The Feed, which indicates that wage rates have risen faster in production agriculture than in any other industry. It also notes that the result is an incentive for mechanization. Unsustainable Splintering The traditional...
USA versus PRC; Taxes before Building; Sugar Solution
Former five-time Malaysian Prime Minister Mahathir Mohamad contradicts Donald Trump by saying that the remaining countries in the Trans-Pacific Partnership agreement are better off without the U.S. in the pact because too much of it favored the Americans. USA versus PRC Former five-time Malaysi...
U.S. Sugar Industry Abandons Deal with Mexico
Despite a detailed agreement that addresses almost all U.S. concerns over Mexican sugar imports, the U.S. industry does not support the pact.U.S. Commerce Secretary Wilbur Ross and Mexican Secretary of the Economy Ildefonso Guajardo today announced a new agreement in principle regarding Mexican...
Middle East, Mediterranean and Africa Regional Analysis
It is being suggested that most of South Africa’s possible 3 MMT of maize exports this year will be used in East Africa, although some countries there will restrict entry as they are mainly GM. A new report has named four potential target destinations for the maize if it cannot all be sold in t...
NAFTA Sweeteners: Let’s Make a Deal
After nearly two-and-a-half years of trade negotiations over sugar, last month the U.S. commerce secretary put a hard deadline on the talks. A deal now appears within reach to be signed tomorrow.Today was the deadline for the U.S. and Mexico to reach a deal on sweetener trade, and a pact was re...
Middle East, Mediterranean and Africa Regional Analysis
The Zimbabwean government is pushing ahead with plans for mandatory food fortification beginning 1 June 2017, including maize and wheat flour. Millers are saying it is not possible to comply because of three significant factors. Regional Updates MIDDLE EAST/MEDITERRANEAN COMMENTS The month of R...
Indian Subcontinent Regional Analysis
An increase in the MSP for pulses incentivized farmers to expand their plantings, and 2016/17 production is projected at a record 22.4 MMT. However, those farmers and GOI are now finding there are some repercussions. Effect of Higher Sugarcane FRP on Sugar Prices As India’s sugarcane farmers pr...
Trumped Agenda; Ignore the Previous; Political Animals; China Cynic
China’s Commerce Ministry has issued a report on trade relations with the U.S. and publicizes the government’s commitment to increase imports from America. There are at least three problems with this. Trumped Agenda Donald Trump is fiddling away while his policy agenda burns. His week-long fore...
U.S. Winter Wheat Issues
With tightening supplies of HRW and concerns about new crop quality, it is reasonable to ask what is going on in the KC HRW futures market.U.S. winter wheat prospects for 2017/18, murky though they may be, raise some interesting issues and questions. Historically, hard red winter wheat (HRW) ha...
Oilseed Highlights: China Advocates More U.S. Soybeans; Bad Chinese Crush Margins; Wet Weather and Canadian Canola; U.S. Soy Export Sales
Changes in U.S. market share for global soyoil exports, along with those of soymeal, are analyzed. Results offer insight into the opportunities U.S. exporters face for the remainder of the marketing year. Developments in the corn, soybean, and wheat markets are similarly analyzed and results sh...
Oilseed Highlights: Indian Soymeal Exports; Canadian Soy Production; Russian Crush Plant; Chinese Soy Trade
The executive director of India’s Solvent Extractors Association (SEA) expects the country’s soymeal exports to fall 25 percent below earlier projections because of one significant development. Strong Rupee to Cut Indian Soymeal Exports The executive director of India’s Solvent Extractors Asso...
Complex Agenda; Muddle and Muddle; Quote of the Week
While the Trump administration notified Congress this week of its intent to renegotiate NAFTA, starting a 90-day window before the talks begin, trade policy is in a much larger and complex situation. Complex Agenda While the Trump administration notified Congress this week of its intent to rene...
Ag Review: China's Soyoil Problem
WPI Agribusiness Subsector Outlook A brief review of WPI’s past Bull/Bear calls and industry stock price performance. WPI Bull/Bear Leanings for Agribusiness in 2017 A summary and graphical depictions of WPI’s expectations for future agribusiness performance. The U.S. Gr...
Indian Subcontinent Regional Analysis
As India transitions into the new Goods & Services Tax (GST) regime to be rolled out 1 July, the tax rates for various goods have been announced. Meanwhile, the "Make in India" initiative has shown some success, but there are cerain steps needed to reform Indian agriculture. New Goods &...
Green Waste; NAFTA Nonsense; Chocolate; Stocks; Obvious
After ruling out imposing tariffs on ethanol imports from the U.S. due to concerns about retaliation, the Brazilian government will require that importers fulfill the same obligation (Resolution 67/2011) as domestic suppliers. Green Solution to Food Waste Some estimate that 70 percent of crops...
Market Commentary
Commodity markets were supported in general by the sinking U.S. dollar, which hit a six-month low today and has now given back its entire post-election rally. Wheat, especially KC, was the active leader among grain futures markets. General Comments Commodity markets were supported in general by...
Market Commentary
Grain and soy futures trade was either dull as dishwater or exciting, depending on what one’s interest might be. KC wheat was a bit more interesting today, but trade in the soy complex was comparatively exciting, at least by recent standards. General Comments Grain and soy futures trade was eit...
Indian Subcontinent Regional Analysis
With a goal of doubling Indian farmers’ income by 2022, agriculture needs land reforms. This will require an increase in productivity and a move away from the Minimum Support Price (MSP)/subsidy-driven system. India Becomes Largest Two-Wheeler Market; No Way to Control Air Pollution India becam...
Money and Hypocrites; Shrinking Yield Folly; Nanny NaNa; Rigged
Overcoming their geopolitical concerns in the region and lingering animosity over WWII atrocities, the finance ministers for China, Japan and South Korea managed to reach agreement on language opposing protectionism. Money and Hypocrites Overcoming their geopolitical concerns in the region and...
Sweet and Pesticide Battles; EU Policy Clash; WTO Impasse
The election of Emmanuel Macron to the French presidency was viewed as a vote of support for broader Europe, but that doesn’t mean a lack of policy clashes ahead. Sweet Battle Sensing that bilateral negotiations with Mexico over sugar imports were not reaching a resolution, the Trump administra...
Financial Stress; TTIP Lite
The attorney general for the state of New Mexico has launched a political witch hunt into beef processing companies, claiming ranchers are hurt by their size and anti-competitive practices. Financial Stress The trade press is hot on the stresses currently being felt in the agribusiness sector...
Oilseed Highlights: EPA Approves Nematicide; Chinese Biotech Concerns; Brazil Soy Exports
Soybean processors and soyoil refiners in China are facing growing consumer resistance to purchasing soyoil from biotech soybeans, which could also have ramifications for the government as well as ChemChina. Monsanto Wins EPA Approval of New Nematicide Monsanto today announced it had a new nema...
Flawed; Sour; Wrong; Double-Dealing; Implications
Japanese Deputy Prime Minister Taro Aso had earlier warned that the U.S. might not get as good a deal bilaterally with Japan than it would by simply rejoining the TPP. Now two contentions by the Japanese ambassador to the U.S. are respectively somewhat insulting and revelatory. Flawed Trade Str...
A Few Random Thoughts
As the new month begins, there are a number of concerns and issues related to agricultural production and/or trade.We begin the Merry Month of May, as the song from Lerner and Loewe’s musical “Camelot” called it, with some random and mostly unconnected thoughts for whatever they may be worth.-...
How Sugar Could Spark NAFTA Renegotiations by June
The U.S. has set a hard deadline on the U.S.-Mexico sugar trade talks, backed up by a possible re-imposition of duties on Mexican sugar. Will that be the de facto beginning of NAFTA renegotiations?Yesterday was the deadline for the U.S. and Mexico to come to an agreement on bilateral sweetener...
Congress Strikes Deal on Government Funding Package
Congress has struck a deal on a funding bill to keep the government open through the end of FY 2017, and it also addresses many ag policy issues that WPI has reported on over the past two years.On 28 April, Congress agreed to a one-week continuing resolution (CR) as a stopgap measure to fund th...
Ignorance and Contradictions
Newly-minted USDA Secretary Sonny Perdue needs to tell his Commerce Department counterpart Wilbur Ross to mind his own portfolio. Meanwhile, former USDA Secretary Tom Vilsack is telling Canadians that it’s time to modernize NAFTA but improve U.S. market access to certain areas. Ignorance on Agr...
Ag Review: Can Exports Save the Dairy Industry?
WPI Agribusiness Subsector Outlook WPI Bull/Bear Leanings for Agribusiness in 2017 A summary and graphical depictions of WPI’s expectations for future agribusiness performance. The U.S. Grain Industry Industry focus on divesting non-core business units will stabilize b...
Market Commentary
The day session saw trading volume fade some as the market tried to hang onto yesterday’s gains. There was more fund short covering in wheat, and those markets were up about 5-6 cents at one point. General Comments Yesterday’s robust trading volume carried over into last night’s session with s...
Oilseed Highlights: Canadian, Argentine and Indian Soybean Plantings; Brazil’s Biotech Crop
Although most expect that the current disparity in Argentina's export taxes will be enough to cause farmers there to continue decreasing their soybean plantings in favor of more corn, Canadian farmers apparently have other intentions. Canadian Farmers Plan Big Boost in Soybean Plantings Statist...
Indian Subcontinent Regional Analysis
While GOI is continuing to procure local wheat for the MY 2017/18 program, imports are still feasible despite the 10 percent duty with one particular origin deliverable at a lower cost than domestic stocks. Sugar Production Down; Ethanol Blending Limited Based on India’s current sugar productio...
Federal Funding Deadline for Government Shutdown Nears
With the deadline to pass a federal funding bill in the offing, Congress is revisiting a strategy employed in 2014 that kept the government open.A week from today (28 April), the federal government runs out of money. The short-term funding bill passed at the end of last year set the date for wh...
Overstated and Misunderstood; Self-Defeating Ag Policy
As if he’d never paid a second of attention to bilateral trade issues before running for president, Donald Trump suddenly realizes that Canada operates a supply management program for dairy. Overstated; Misunderstood For Donald Trump, everything is “huge” and NAFTA is a “disaster.” As if he’d n...
DEIP the Canucks; Trump PO’d at TPA
Canadian Ambassador to the U.S. David McNaughton may be correct that his country’s pricing policy on ultrafiltered milk may be WTO legal, but that doesn’t mean it lacks adverse impact on U.S. suppliers. DEIP the Canucks Canadian Ambassador to the U.S. David McNaughton may be correct that his co...
Oilseed Highlights: NOPA’s March Crush Volume; Canada’s Soybean and Canola Areas; Chinese Crush Margins and Soybean Prices
Leaders of Canada’s soybean industry expect the soybean plantings there will total 10 million acres by 2027. However, the sector has a notable problem with its production that impacts prices, and addressing this matter is said to be a priority. NOPA’s March Soybean Crush Volume Falls Below Trad...
Oilseed Highlights: Export Sales; Indonesian Minister Says No Palm Oil to EU; Brazilian Corruption
Commodity Analytics shows the most recent data for grain export sales and shipments along with historic patterns. Current deviations from historic norms point to changing export opportunities for U.S. products. U.S. wheat exports are analyzed as a share of global exports and presented in graphi...
NAFTA Strategies; Self-Flagellation; Xenophobic Soda; Bombs for Beans
The government of Canadian Prime Minister Justin Trudeau is still trying to figure out what to expect and how to position itself in the upcoming renegotiation of NAFTA. Meanwhile, big U.S. soda companies are under attack over sugar content in the West and water in India. Canada's NAFTA Calculat...
U.S. Dairy Calls for Trade Action Against Canada
A new milk pricing regulation implemented in Canada on 1 April has the U.S. dairy industry calling for the Trump administration to take action against that country.As the Trump administration prepares to renegotiate the NAFTA agreement with Canada and Mexico, the U.S. dairy industry is pressing...
Indian Subcontinent Regional Analysis
Following the landslide victory of the Bharatiya Janata Party (BJP) in Uttar Pradesh, there is hope that the government will be able to move forward with promised reforms as certain economic changes in the country have been noted. Appreciating Rupee is Good News for Imports Following the landsl...
U.S. Agriculture’s Stake in China
While U.S. relations with China are tense, due in no small part to President Trump’s harsh rhetoric and threats, U.S. grain and soybean producers have quite a large stake in trade with that country.With the world watching intently, U.S. President Donald Trump is hosting China’s President Xi Jin...
Draft Outline for NAFTA Renegotiation
The Trump administration has prepared a draft letter notifying Congress of its intent to renegotiate NAFTA, which spells out the objectives while pledging to work cooperatively with the legislative body on the process.The Trump administration has prepared a draft letter notifying Congress of it...
NAFTA Goals; Faulty WTO; Secession
A draft text of Trump administration negotiating objectives for modernizing NAFTA reflects an undramatic change from the Obama administration’s trade policy. NAFTA Objectives A draft text of Trump administration negotiating objectives for modernizing NAFTA reflects an undramatic change from the...
Dairy Competition; Pest Friendly; No Brexit Trade; Unsweet
EU chief negotiator on Brexit Michel Barnier says there will be no trade deal with Britain if London decides to impose weaker regulations than the Continent. This effectively means no trade agreement. Competition and Dairy Production Having studied the relationship between the country’s milk pr...
Indian Subcontinent Regional Analysis
India is facing a possible tight sugar supply situation with lower-than-expected production and higher-than-expected demand. India is considering import duties on sugar, wheat, and pulses to help... Duty on wheat and pulses imports possible In order to protect the Indian wheat growers, the gove...
Oilseed Highlights: Fewer Indian Soy Plantings; Paraguay’s Big Soy Crop; Indonesian Biodiesel; Slow China Biotech Approvals
The American Chamber of Commerce in China complained this week about the government’s slow approval process regarding new biotech crops, which most notably impacts the soybean sector. There is also a potential development that could worsen the situation. Low Pulse and Soybean Prices Drive India...
Ag Review: 2017 Cow/Calf Profitabitiy Outlook
WPI Agribusiness Subsector OutlookWPI Bull/Bear Leanings for Agribusiness in 2017 A summary and graphical depictions of WPI’s expectations for future agribusiness performance. Wheat Market Risks and New Realities U.S. wheat’s declining global importance gave rise to ongoing battle f...
Ethanol Exports Facing Potential Problems in 2017
Ethanol exports are starting the year strong, but there is some uncertainty in major markets.The March World Agricultural Supply and Demand Estimates (WASDE) report from USDA raised the estimate of corn to be used in ethanol production by another 50 million bushels to 5.4 billion during the 201...
Indian Subcontinent Regional Analysis
India's wheat prices dropped at the start of this year's harvest, gradually increased and then stabilized at about Rs.17,000/MT ($250/MT) at the spot market. However, there is now a concern regarding the crop. Stable Wheat Prices; Disease Affects Crop in West Bengal India’s 2016/17 rabi wheat h...
Farm Bill Tidbits
Farm bill proposals are emerging from producer groups and legislators alike, but there are questions. Will USDA put forth a farm bill plan? Will acreage idling expand under conservation programs? Will sugar policy finally be altered?USDA’s farm bill input - The Trump transition team indicated t...
More Things to Keep You Up at Night
Although the market can now put the South American soybean crop in the rearview mirror, one potential problem remains. Meanwhile, the U.S. southern Plains hard red winter wheat crop, well ahead of normal in terms of development, is getting deeper into trouble every day. Another USDA WASDE (sup...
Dairy Margin Protection Program Reforms for Feed Costs
House Ag Committee Chairman Michael Conaway (R-Texas) outlined the key areas for the next farm bill at the recent Commodity Classic and indicated the industry would likely have a plan of action for MPP reforms. Sure enough, the NMPF released its recommendations this week.House Agriculture Commi...
Market Commentary
From the limited price action, it is clear that the market is not expecting big changes from tomorrow’s March WASDE. There is some sentiment that USDA might raise estimates for corn exports and/or use for ethanol, which would lower end stocks. Others, though, think that it may wait until next m...
A Conflicted Soybean Market
Despite the large fund investment in the soybean market, soybean futures prices have stayed in a trading range during the past two months that reflects the conflict between funds’ desire to be long amid a rather bearish fundamental outlook.Monday’s Wall Street Journal carried an article describ...
Indian Subcontinent Regional Analysis
Wheat prices have softened quite a bit in the past five weeks as imports have been good. While there has been no official announcement yet, it is being speculated that the government of India (GOI) might impose a 25 percent tariff on wheat imports as of 1 April for two reasons. Wheat Prices Sof...
Wars: Food; Labor; Science
The U.S. farm sector is nervous about Donald Trump’s crackdown on illegal laborers. Those workers may account for half the labor in sectors such as dairy. War on Food University of Sussex researchers found that each parent contributed 20 percent of the correlation of a child’s BMI, regardless o...
A Big One Falls
One of North Dakota’s largest farmers filed a Chapter 7 bankruptcy petition recently. Most will blame the collapse on the downturn in commodity prices. While that was certainly a major reason, there are many other contributing factors.One of North Dakota’s largest farmers filed a Chapter 7 bank...
China Plans High-Value, Improved Quality, Large-Scale Agriculture
China's so-called Number 1 Document has been released, which is focused on agriculture and rural policy. While reaffirming some key policies already in place, it also indicates that crop production and support programs will be considered under three tiers.Last week the USDA post in Beijing rele...
Indian Subcontinent Regional Analysis
India's production of milk, egg and poultry meat continues to grow, but most of that is consumed by a simultaneously expanding population. However, its buffalo meat is in high export demand for several reasons. India’s Sugar Production Continues to Trail as Prices Rise Sugar prices continue to...
Outlook Acreage Projections
USDA always holds its annual Agricultural Outlook Forum in late February. Among other things, there has been great interest in learning its latest views on what planted acreage will likely be for various spring planted crops.USDA no doubt has good reasons for always scheduling its annual Agricu...
Farm Balance Sheet Impact on Planting and the Farm Bill
What will continued low crop prices and debt accumulation mean for production and policy?Macroeconomic factors in 2016 (i.e., uneven global economic growth and shifting currency values) are still in play in 2017, according to USDA testimony at the House Agriculture Committee last week. Economic...
Indian Subcontinent Regional Analysis
GOI released the second Agricultural Production Advance Estimates this week, which indicated an approximate 8.11 percent increase in farm output versus last year. Despite high production, though, corn exports are not currently possible because of one critical factor. India’s Second Agricultural...
Indian Subcontinent Regional Analysis
India's 2017/18 budget was released early and includes several notable provisions that will help the agriculture sector. Left out, however, was any significant allocation for one specific area that would help ease the cost of production and increase efficiency. Soaring Sugar Prices May Result i...
Oilseed Highlights: Large U.S. Soymeal Sales; Caterpillar Emergency in Brazil, Soyoil-Based Graphene
Today’s USDA export sales report brought some good news to the U.S. soy sector in the form of larger-than-expected soymeal export sales last week. Meanwhile, researchers in Australia have discovered how to make graphene from soyoil. Large U.S. Soymeal Export Sales Last Week Today’s USDA export...
Oilseed Highlights: Limited Biodiesel Feedstocks; Philippines’ Higher Soymeal Imports; Tight Rapeseed Supplies in Europe
The National Biodiesel Board believes reinstatement of the $1/gallon biodiesel tax credit and issuing payments to producers instead of blenders will allow it to greatly boost production while eliminating most of the biodiesel that is now imported. Where Will U.S. Biodiesel Industry Get Feedstoc...
Ethanol Policy; Farm Bill Issues; FTAs and Buy America
Donald Trump contends that bilateral trade agreements are better for the U.S., presumably because there is no dilution of America’s leverage from being the larger economic power at the table. However, there are other strategic factors in picking bilateral partners. Ethanol Policy Change Some su...
Indian Subcontinent Regional Analysis
Chickpeas are a popular source of protein in India. However, prices of the whole chickpea and the split dal (pulse) are on the rise. As a result, many consumers have shifted to one alternative. High Chickpea Prices Shift Demand to Yellow Peas Chickpeas are a popular source of protein in India...
Oilseed Highlights: Size of Brazilian Soybean Crop; Big Aussie Canola Crop; More Soybeans than Corn in 2017
If recent forecasts are to be believed, Brazil’s 2017 soybean crop will apparently not only be a record, it will be huge. As optimistic as those projections are, however, there is some evidence to suggest it will be smaller. Is Brazil’s Soybean Crop as Large as Many Forecast? If the forecasts i...
Indian Subcontinent Regional Analysis
After being stable until the third week of December 2016, sugar prices are moving up faster than expected in this current sugar season as there is higher demand from institutions. However, there are also a few other factors that are having an impact. Higher Per Capita Income and Lower GDP Growt...
Kansas Reclaims Seat on House Ag Committee, Joining Other New Republican Members
House Agriculture Committee Chairman Michael Conaway (R-Texas) has announced the six new Republican members of the House Agriculture Committee for the 115th Congress, which includes a Kansan.In December 2012, Kansas Republican Tim Huelskamp lost his seat on the House Agriculture Committee for b...
Oilseed Highlights: New Bunge Soy Crush Plant; India’s Soymeal Exports Rise; Poor Chinese Crush Margins
Yesterday Bunge announced plans to build a new soybean processing facility at an undisclosed location in either Indiana or Ohio, and adding additional soybean crushing capacity on the inland river system in the U.S. would benefit not just the domestic market. Bunge to Build New Soy Crush Plant...
Trends for Commodity Prices
Commodity prices are notoriously cyclical, and those who follow grain and oilseed markets may not fully appreciate the broader rally they had in 2016. Now there is of course considerable chatter and speculation about what 2017 may hold for commodity values.Commodity prices are notoriously cycli...
Indian Subcontinent Regional Analysis
During the demonetization period that began in November 2016, the price of cottonseed oil cake, a major source of protein for livestock in India, continued to drop due to lack of demand. However, recent developments have changed the situation. Cottonseed Oil Cake Prices Recovering India’s cotto...
Taxes and Trade, Food; Nationalism; Skewed Sources
Contradicting President-elect Donald Trump, U.S. House Speaker Paul Ryan (R-Wisconsin) announced this week on a radio program that there will be no border taxes on products shipped to the U.S. However, past presidents have prevailed in the courts in upholding their actions under declared emerge...
Predicted Food Trends: Will Meat Follow the Path of Beer?
A recent National Restaurant Association survey of chefs shows protein demand is likely to grow and change toward more specialty items. Could the evolution of the craft and specialty beer market be a structural map for the future of the meat industry?To a large extent, food trends have come ful...
Indian Subcontinent Regional Analysis
Prior to GOI’s elimination of the import duty in early December, wheat prices had reached a high of $354/MT in the New Delhi spot market. They have eased considerably to $291/MT, but imports still remain feasible for one region. Domestic Sugar Prices Expected to Firm with No Change in Duties Th...
2017 U.S. Policy Forecast
By their essence, government policies subsidize or penalize various actors in the economy. Some of this will change, but the complex nature of the democracy and policy making apparatus makes the wholesale remaking of government impossible.Overview: Those who voted for Donald Trump want change,...
Indian Subcontinent Regional Analysis
Sugar prices in Maharashtra may be dropping as new stocks become available at the market, but they could rise over the next few months because of one anticipated scarcity. There is also a fear that this could be the earliest season for some mills, and the current import duty may need to be reco...
Oilseed Highlights
Stats Canada reports that a record 1.77 MMT (65 million bushels) of soybeans were produced in Manitoba Province this year as farmers there continue to boost the plantings for several reasons. NOPA Soy Crush for November The National Oilseed Processors Association (NOPA) today reported its membe...
Europe’s GMO Achievement; Unsustainable
Recent action by the European Food Safety Authority (EFSA) s a stunning rebuke to the critics of GM technology that despite their rants and tactics, scientific principles continue to prevail in Europe. EFSA Clears Events 63 and 64 The European Food Safety Authority (EFSA) gave safety approval t...
Oilseed Highlights
USDA recently released its annual long-term projections for major crops, and those for soybeans can be justifiably challenged for several reasons. USDA’s Long-Term Soybean Yield Projections Too Conservative USDA recently released its annual long-term projections for major crops, including soybe...
Commerce Department Reviewing Sugar Agreement with Mexico
With a renegotiation of NAFTA high on the incoming Trump administration’s agenda, a new Commerce Department investigation may tee up sugar as one of the first sectors to be discussed. However, it will be within the context of a vastly changing market for sugar in the U.S. than has existed for t...
Truth Revealed; Diverging Transatlantic Emissions
Pedro Marcilio of the Brazilian firm Participacoes SA admits that U.S. government funds have been used as production loans for Brazilian cotton farmers. Now U.S. cotton farmers say they are not receiving enough government subsidies and are demanding a fatter check from taxpayers in the upcoming...
Election Impact on the Farm Bill
A Farm Foundation debate today on prospects for the next farm bill, post the election of Donald Trump, brought much enlightenment and a variety of opinions.A Farm Foundation debate today on prospects for the next farm bill, post the election of Donald Trump, brought much enlightenment. The pres...
Indian Subcontinent Regional Analysis
Wholesale wheat prices in New Delhi, the country’s key market, surged to Rs.23,916/MT ($346/MT) on 18 November from Rs.18,858/MT ($281/MT) on 18 October. There are many reasons for this, and the trade anticipates prices could rise further. Rupee Tanks as USD Grows Stronger Following its demonet...
Ag Review: Agribusiness Margins in the Face of Uncertainty
WPI Bull/Bear Leanings for Agribusiness A summary and graphical depictions of WPI’s expectations for future agribusiness performance. The Grain Industry Low prices are leading farmers to pursue cost-cutting decisions. In turn, this will pressure margins at all levels of the farm economy,...
North Dakota Congressman Outspoken on Ag Policy
Representative Kevin Cramer (R-North Dakota) is becoming an outspoken leader in proposing new agricultural policy ideas, but his biggest reforms come in the area of trade.Representative Kevin Cramer (R-North Dakota) is becoming an outspoken leader in proposing new agricultural policy ideas. In...
Farm Bill Issues and the 2018 Election
With the election over and all eyes in the ag sector on the 2018 Farm Bill, it is worth looking ahead to the 2018 mid-term elections and what role they will play with regard to this debate in the 115th Congress that is set to convene in January 2017.With the election over and all eyes in the ag...
Indian Subcontinent Regional Analysis
The Government of India’s surprise demonetization of the Rupee has financial impacts rippling through the Indian economy, though commodity prices remain relatively isolated. Separately, India’s soybean meal exports have been picking up and small cereal crop production is falling due to farmer s...
New Tax Magnet; Pinging Barriers
Food may be replacing fossil fuels as the flavor of the day for taxes while the WTO’s new system for reporting regulatory barriers to trade may need to be reversed to be truly effective. New Tax Magnet For decades, fossil fuels attracted lots of taxes (and subsidies) due to the essential necess...
Sugar Tax Election; TPP Dead; Precision Subsidies
Taxes on sugary soft drinks are on several municipal ballots tomorrow, but will they achieve their desired results? Meanwhile, TPP is practically dead and the EU will adopt subsidies to encourage precision farming. Sugar Tax Election A tax on sugary soft drinks is on the ballot in at least four...
Indian Subcontinent Regional Analysis
The market yard price of corn in Nizamabad has dropped 11.06 percent from the start of the season to $201/MT, and the NCDEX spot price there also decreased 26.20 percent over a five-week period to $214/MT. However, prices are still not as low as they should be at peak arrivals, which is partial...
Farm Groups Start Asking Questions About Next Farm Bill
The 2014 Farm Bill doesn’t expire until 2018, but deliberations on the next one will start in earnest when the new Congress convenes in January 2017. In preparation, the AFBF has already been surveying its members regarding what is needed in the next comprehensive re-write of farm policy.The 20...
It’s Hard to Make Some People Happy
Ironically, the most protected industry in U.S. agriculture is complaining that its farmers are disadvantaged, and it makes an emotional appeal with an economically-flawed statistic.Some people are hard to please. No matter what is done for them, they always see dark clouds on the horizon or fe...
Indian Subcontinent Regional Analysis
India's peanut-in-shell MSP for the 2016/17 season was fixed at $629/MT in June 2016. However, GOI’s first advanced estimates of September 2016 have projected a 21.68 percent increase in kharif production versus last year. With a higher available supply now in certain areas, many of the market...
Indian Subcontinent Regional Analysis
Keeping food prices down is key for Indian households. In order to do that and also maintain low inflation, the government has taken a step that would allow it to intervene in certain pricing of essential commodities, including pulses and sugar. Possible Impact of GST on Food Items The governme...
Clinton versus Trump on Ag; Chemo-Marketing
Differences, nuances and agreement marked the outcome of a session today between former USDA Deputy Secretary Kathleen Merrigan representing the Clinton campaign and Sam Clovis on the Trump campaign team. Clinton versus Trump on Agriculture Differences, nuances and agreement marked the outcome...
Indian Subcontinent Regional Analysis
GOI has undertaken the task of integrating the Regulated Agriculture Market Yards, which provide pricing for farmers’ produce bought in the market yard. The plan is to instead have an online platform (e-NAM) bring more transparency and a much wider market to farmers. Ethanol-for-Blending Prices...
Ag Review: Industry Insights and Outlook for Q4 2016
The Grain Industry Farmland values have been among the last to experience the impact of low commodity prices, but the downward pressure has now begun. Oilseed Processing Several factors appear to be converging for the benefit of exporters and processors of U.S. soybeans as well as the livestock...
Middle East, Mediterranean and Africa Regional Analysis
High maize prices in South Africa have in turn pushed up local poultry prices, leading to an expected notable increase in poultry imports this year and an additional 8 percent in 2017. Meanwhile, a recent report indicates Morocco's grain situation is even worse than expected. MIDDLE EAST/MEDITE...
Farm Program Spending Outpacing Other Entitlement Programs
USDA announced this week that more than $7 billion will be paid out in farm support payments under the new ARC and PLC programs versus approximately $5 billion last year. Perhaps the only good fiscal news for the next farm bill is that SNAP is forecast to have a decreasing baseline of spending...
Indian Subcontinent Regional Analysis
India's domestic oil industry had asked GOI to raise both the duty on imported oil along with the differential between the crude and refined oils duties to 15 percent. However, the government decided to take a different approach. Vegoil Import Duty Slashed; Imports Rising In September 2016, the...
An Anniversary of Sorts
Much has happened in the 20 years that have passed since the first genetically modified (GM) soybean crop was harvested in commercial quantities by U.S. farmers in October 1996.After many years of public and private research, field trials and government testing, the first genetically modified (...
Indian Subcontinent Regional Analysis
At the start of the wheat season, it was thought in India that international prices could rise if large volumes of wheat were to be imported. That has not occurred, however, and GOI has taken a step to facilitate those imports while making assurances regarding the open market there. Slashed Whe...
From the Campaign Trail
Last night’s first presidential debate of the general election campaign did not include any mention of agriculture or agricultural policy – as was to be expected. However, there was one agricultural trade issue discussed, although it was never identified as such.Last night’s first presidential...
Indian Subcontinent Regional Analysis
The first advance estimates for India’s 2016/17 kharif production have been released, and they indicate a bumper crop this year. However, the trade believes these are too high, especially for soybeans, and this is reflected in its own forecasts. Kharif Production First Estimates Released The fi...
Middle East, Mediterranean and Africa Regional Analysis
The fallout from Egypt's new zero ergot standard for wheat continues with no offers for its recent tenders and confusion regarding shipments purchased under the previous level allowed. Meanwhile, in what is perceived to be a reaction to rejection of any ergot presence, Russia has taken action o...
Ag Mergers Impact Washington’s K Street
Lower crop prices and farm income together with pressure for new products are leading to a wave of consolidation in the ag sector. One of the little-discussed, major implications of this will be the effect on the K Street lobbying corridor in the nation’s capital.Lower crop prices and farm inco...
Formers on Trade; Bogus Solutions; Clean and Messy Labels
The Center for Strategic and International Studies (CSIS) pooled together four former U.S. Trade Representatives (USTRs) to discuss American interest in the topic, and the frustration of these former officials clearly showed. Former USTRs on Trade The Center for Strategic and International Stud...
Think Tanks Calls for Privatizing Federal Ag Risk Management
The market-oriented think tank Heritage Foundation yesterday issued a special report, which provides a number of policy recommendations geared toward privatizing risk management for U.S. agriculture.The market-oriented think tank Heritage Foundation yesterday issued a special report entit...
Indian Subcontinent Regional Analysis
In response to an appeal for approval, a subcommittee of India's Genetic Engineering Appraisal Committee has issued its findings regarding the food safety, environmental safety, compliance etc. of GE mustard, and the report is now available for public comment. Temporary Measures to...
TPP Uncertainty; Disrupting Obesity; EU Insurance
Governments continue to be attracted to one-off tax schemes in an effort to fight the obesity epidemic and concurrently increase the budget coffer for politicians. Several such initiatives are pending in the U.S. as well as Europe. Uncertain TPP Push The trade policy and political machinery in...
Positive but Slow Economic Growth with Pressure on Ag and Food
The recent Institute for Supply Management (ISM) reports indicate growth, although slow, for the economy overall. There is still considerable pressure on the ag and food sector, indicated by the concerns about inventories noted at the food service level.The service sector economy continue...
Policy Change; Hate Answer; FarmTech; Coup
Thus far, activist groups such as Plate of the Union have been unable to achieve any kind of presidential candidate focus on U.S. food policy. Meanwhile, two issues that have activists riled are ironically solvable by the technology they typically hate: biotechnology. Food Policy Change Thus fa...
Free Trade Cycles
Support for free trade has ebbed and flowed in cycles that frequently track the ups and downs of national economies. Nearly every political leader is in favor of it or at least claims to be. Yet free trade is under frequent attack these days, and part of the problem is how it is defined.The 201...
Oilseed Highlights
Argentina’s major farm organizations fear new legislation that the government plans to introduce next month regarding royalties on biotech soybean seed. Farmers there have largely avoided any such payments, largely because of one reason. Argentine Farmers Continue to Resist Paying Biotech Soybe...
TPP Officially Dead; Slippery Slope; Energy Crops
Beef cattle catch a lot of grief for their land and water requirements, but a recent USDA analysis shows them to be a relative energy bargain. TPP Officially Dead The Trans-Pacific Partnership (TPP) has been dead for a long time, but U.S. Senate Majority Leader Mitch McConnell (R-Kentucky) fina...
Tax Extenders for Renewables in the U.S. and Brazil
The biodiesel tax credit will expire in December if not renewed. Senator Charles Grassley (R-IA) has proposed legislation, co-sponsored by 13 other senators, that will shift how it is applied. In Brazil, the tax exemption for ethanol sales also expires in December, and a change could occur ther...
Indian Subcontinent Regional Analysis
Prime Minister Modi recently assessed the Ethanol Blending Program (EBP) for India and wants 10 percent of the output made available across the country. However, there are certain obstacles to meeting this target that must first be addressed. India’s Wheat Situation Over the years, Food Corpora...
Naturally Dumb; Trade Policy Frustration
The term “natural” is not defined by the U.S. FDA for its use in labeling food products, and companies are increasingly being challenged in court by litigants who want the judiciary to accomplish what the agency has been remiss in doing. Naturally Dumb The term “natural” is not defined by the U...
Dairy Policy, Politics and the Cheese Market
Dairy policy has always been highly politicized from Lyndon Johnson’s time in the Senate in the 1950s right up through this week as USDA announced a major initiative to help boost milk prices.Former President Lyndon Johnson once tried to explain the byzantine structure of dairy policy when he w...
Oilseed Highlights
Monsanto's withdrawal of its application to sell Bollgard II Roundup Ready Flex cottonseed in India is said to be due to a new government-proposed requirement. The company is apparently also upset about a pricing matter related to the older version. Monsanto Withdraws Application for New GM Cot...
Indian Subcontinent Regional Analysis
Considering how difficult it currently is to cull/sell cows in India as there is likely to be a clash of ideologies with the Hindu lobbies, farmers in some areas such as Uttar Pradesh are now instead raising a different source of meat for export. New, Expanded Crops May Help Stabilize High Food...
EPA Did Not Comply With RFS Assessment Obligations
Yesterday the U.S. EPA’s Office of the Inspector General released its report on a review to determine if the agency complied with the statutory reporting requirements of the RFS, focusing on three key components.Yesterday the U.S. EPA’s Office of the Inspector General (OIG) released its r...
Policy Conundrum; Extraterritorial; High Prices
There is great frustration on the part of some that the adverse impacts of the food system fail to garner more political attention in a major election year. These critics tend to focus on its perceived faults more than does the general public. Food Policy Conundrum There is great frustration on...
Indian Subcontinent Regional Analysis
GOI may not be able to procure the volume of ethanol required to meet its Ethanol Blending Program (EBP) mandate of a 10 percent blend in all gasoline used domestically. However, there is a potential solution. Potential Solution to EBP’s Ethanol Shortfall The government of India (GOI) may not b...
Indian Subcontinent Regional Analysis
As India’s inability to import non-GM corn from international markets continues, high input and low output prices as well as other issues over the past few months appear to have affected the profits of Indian end user industries, particularly poultry and starch. Goods and Services Tax (GST) – I...
Farm Policy Risk; Trade Policy Risk
With the increasing attention in Washington on income inequality, any focus in the future on what parts of agriculture have money and assets while concurrently receiving large subsidies will create a risk to that dynamic. Farm Subsidy Risk The last time agricultural commodity prices were this l...
Sweet is Sweet; Inequality
Although income inequality was heightened by the Great Recession and has statistically tempered, it remains a major policy concern. The outcome of research by McKinsey & Company about its cause will not please everyone. Sweet is Sweet McDonald’s, the world’s largest hamburger fast food chai...
Productivity; People; Marketing
Like Europe, U.S. use of inputs like fertilizer slowed as genetics and technology increased in their role in production. The difference is that U.S. agricultural productivity will see substantially differernt gains in the years ahead. Partial Productivity HFFA Research completed a study for the...
Bitter Labeling; U.S. Election and Economy
The recently enacted GMO labeling law may cause a bitter rift in one U.S. industry if USDA uses its discretion and determines that products containing sugar from a certain source must be labeled. Bitter over Labeling The recently enacted GMO labeling law may cause a bitter rift in the U.S. suga...
Indian Subcontinent Regional Analysis
India's sugar prices are expected to remain volatile as its area under sugarcane is down approximately 4 percent for 2016/17. Sugar is priced at $540/MT on the National Commodity and Derivatives Exchange (NCDEX), and the trade expects that imports could be triggered if it reaches $565-575/MT. S...
ARC Program in Search of New Yield Data
The American Soybean Association (ASA) just completed its July board meeting, and it is urging USDA to provide an administrative fix to the 2014 Farm Bill regarding the way payments are calculated under the Ag Risk Coverage (ARC) county-based payment program.The American Soybean Association (AS...
China Non-Market; SPS Cost; Cost of Non-GMO
The U.S. is hoping to negotiate with China on supply controls regarding steel and other products when the G-20 meets in September. Meanwhile, the EU says that China is not a market economy. It will have such status in the WTO, though. Non-Market Economy The U.S. is hoping to negotiate with Chin...
Middle East, Mediterranean and Africa Regional Analysis
13 African nations met in Tanzania to discuss ways of controlling aflatoxin, mainly with maize and groundnuts (peanuts). Much time was focused on the success of Aflasafe, which is said to reduce aflatoxin levels by a significant amount if applied correctly to croplands. Regional Updates MIDDLE...
Indian Subcontinent Regional Analysis
As India's domestic corn price remains higher than those on the world market, the country's 2016/17 corn tariff-rate quota (TRQ) of 500,000 MT was announced this week. However, one specific requirement limits the source to just one origin. Cotton Production Down in India Following the white fly...
Market Commentary
Yesterday’s post-report rally continued in overnight trading with grains and the soy complex all posting gains. That same pattern continued again during the day session with strength across the board until one market gave back most or all of its gains. General Comments Once again, it is all abo...
Free Trade in Ag
The Heritage Foundation, a free-market think tank in Washington, DC, released a paper yesterday, “Promoting Free Trade in Agriculture,” which is part of the run-up to the congressional consideration of the Trans-Pacific Partnership (TPP) and includes a number of recommendations.The Heritage Fou...
Veep Speculation: GOP and Democratic Selections Pending Soon
Speculation over who presumptive presidential nominees Donald Trump and Hillary Clinton will pick as running mates is heating up as their respective party-nominating conventions draw near.Speculation over who presumptive presidential nominees Donald Trump and Hillary Clinton will pick as runnin...
Indian Subcontinent Regional Analysis
India has decided to increase the blending rate of ethanol in gasoline to 22.5 percent. However, the big question pertains to how this ethanol will be sourced. Several factors prohibit the country from even reaching a 5 percent blend mandate in sugar year 2015/16. Pulses Prices to Rise as Indi...
Oilseed Highlights
The Canadian province with the fastest-growing soybean area in recent years has been Manitoba where it has expanded 103 percent since 2012. This has been made possible by two particular factors. Brazil's Revised Crop Estimates Today the Brazilian government’s crop supply agency (Conab) reduced...
Labeling Mess; Subsidizing Competitors; Trade Plan
Both the Vermont labeling law and the proposed federal labeling requirement pending in Congress are likely to lead to consumer confusion, but an equally bad mess may be starting in Europe. Legal Approach on GMO Labeling A consortium of agrifood associations contracted for a survey to assess the...
100 Years of Farm Bills
Although the new farm bill won’t be passed until 2018, a number of producer groups are already holding informal meetings in Washington, DC and elsewhere throughout the country in an attempt to find a new consensus approach to legislation that dates back 100 years.When policymakers and stakehold...
Oilseed Highlights
South Korea is reported to have sharply increased its imports of soybeans and soymeal in the first eight months of MY 2015/16 as those of two other oilseeds have declined. Last Week’s U.S. Soybean Export Inspections Impact Futures USDA’s export inspections report for last week, which was releas...
Points of Interest
As is usually the case at this point in the U.S. summer growing season and with USDA's June reports as well as the Fourth of July holiday now in the past, there are a number of not necessarily consistent factors swirling around to unsettle grain and soy markets.With USDA’s June acreage and quar...
30 June and 4 July
After being swept up in the geopolitical tsunami that resulted from the Brexit vote, grain and soy complex markets should return their focus to their own more specific market drivers as the next seven days are of more considerable, fundamental importance in determining price direction.After bei...
Indian Subcontinent Regional Analysis
India has a mandate to use up to 10 percent ethanol in gasoline and was expected to reach a 5 percent blend rate by September 2016, but that may be in jeopardy because of its bleak sugar situation. Sugar Production Down, Jeopardizing Ethanol Blending Program India is the second-largest producer...
Indian Subcontinent Regional Analysis
India's retail inflation reached a 21-month high of 5.76 percent in May 2016, largely fueled by protein demand, espcially for pulses. The expected good monsoon may slowly improve the situation, but GOI is also considering steps to control prices. GOI Boosts Pulses Imports and the Buffer Stock a...
Deadly Hyperbolism; Chem-Free Farming; Sugar Tax Failure
After a nearly three-year delay, the EU Commission has issued criteria for identifying endocrine disruptors. Significantly, the specific potency of the disruption will not be a consideration. Deadly Hyperbolism Commodity markets took it on the chin today, purportedly because big money funds shi...
House Ways and Means Committee Looks at Ag Trade
The recent U.S. ITC report on the TPP identified agriculture as one of the sectors that will benefit the most. The House Ways and Means Committee’s Subcommittee on Trade took political advantage of that positive news to promote the agreement today in a hearing.The recent U.S. International Trad...
Indian Subcontinent Regional Analysis
Farmers do not wish to grow soybeans in 2016/17 for many reasons, including low prices and a lack of good seeds as well as fear that the excessive rains forecast for September could be damaging during harvest. Rising Chickpea Prices Could Impact Inflation The chickpea (aka chana), one of the m...
Ag Review: The Global Livestock Industry
Issues Plaguing the Meat Industry From animal welfare to meat substitutes, the livestock sector faces many challenges. U.S. Meat Exports and the TPP The U.S. International Trade Commission’s (ITC’s) analysis of the Trans-Pacific Partnership (TPP) projects the biggest increase in U.S...
Oilseed Highlights
Although India expects to produce a larger soybean crop in 2016, its protein meal exports continued to drop in May as a lack of supply and high prices made its soymeal noncompetitive. Meanwhile, its high soybean prices are benefiting another country. India’s Protein Meal Exports Continue to Dec...
Ethanol: Exports Help Scale Blendwall
Through the first quarter of 2016, domestic ethanol use totaled 3.4864 billion gallons or 83.01 million barrels. Until higher blends can circumvent the blendwall, exports will be the only outlet for higher ethanol production, although they do not count toward the RVOs.USDA’s Economic Research S...
War on America; War on Salt; Subsidies to Pollute
The European Commission once again failed to achieve agreement by a qualified majority to provide a temporary extension for the approved use of glyphosate. Opposition is based on politics and not science War on America The European Commission once again failed to achieve agreement by a qualifie...
Commodities Back in the Lead
It’s far too early to say the bear market is dead. It is interesting, however, to watch how some of these commodity markets have exploded higher without any really disastrous supply-side news. A story in today’s Financial Times under the headline “Commodities beating global bonds and stocks in...
Sugar War; Mixed on Quotas; Other Briefs
Policy can have a great impact on markets, as shown by the current multi-prong attack on sugar. Some say this will be a huge benefit to artificial sweetener. War on Sugar Policy can have a great impact on markets, as shown by the current multi-prong attack on sugar. Labeling in the U.S. will re...
Indian Subcontinent Regional Analysis
The Cabinet Committee on Economic Affairs (CECA) has approved an increase in the Minimum Support Prices (MSPs) for all 2016/17 kharif crops. While pulses have been given a bonus for many years as an incentive, such payment is now also being extended to oilseeds this year. MSPs for Key Crops Inc...
Oilseed Highlights
A European environmental group, Transport & Environment (T&E), claims the EU biodiesel industry has sharply increased its usage of palm oil as a feedstock and is thereby contributing to rainforest destruction. Greens Attack EU Biodiesel Sector’s Use of Palm Oil A European environmental...
Indian Subcontinent Regional Analysis
India’s pulses demand is close to 24 MMT with current production stagnant at about 17-18 MMT, leading the country to be a net importer. Now Canada, Australia, the U.S. and even Myanmar are planning to expand their production to meet the rising demand as prices are also growing. Meanwhile, India...
U.S. AB Repeat; Unsustainable Demand; Xenophobes for the TPP
The EU reportedly described the U.S. effort at blocking an additional term for Korean Seung Wha Chang on the WTO Appellate Body as “unprecedented,” and Japan said it was “extraordinary” and “exceptional in nature.” Not so, according to Cato’s Daniel Pearson. U.S. Pattern at WTO AB The EU report...
AB Politics; Government Money; Exporter of Death
A draft EU-backed study of the Transatlantic Trade and Investment Partnership (TTIP) oddly concludes that the pact will actually raise the cost of food and promote unhealthy consumption because the cost of sugar, tobacco and alcohol will go down. Politics at AB The U.S. is being criticized for...
More Things to Keep You Up at Night
The U.S. hard red winter wheat crop is likely getting larger. Barring a wet weather pattern during the harvest period, the last issue is what the market can expect in terms of protein content. The U.S. hard red winter wheat crop is likely getting larger. Additional good, widespread rains combi...
CFTC COT Report Analysis
Once again, the major finding of Friday’s CFTC report is that funds still remain solidly bullish corn and added another 7 percent to their long position in that market. That was particularly impressive as the week ending 19 November (the reporting deadline for the CFTC report) included days wit...
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...
Indian Subcontinent Regional Analysis
Poultry Sector Suffering Severe Losses; Imported Chicken Cheaper As a follow-up to the issue of rising feed prices that was discussed in the 11 January report (click here), the poultry sector’s margins continue to fall with the cost of production up at least 7.5 percent due to those price...
Indian Subcontinent Regional Analysis
Sugar Production Estimates Lowered Based on new satellite survey data from the Indian Sugar Mills Association’s (ISMA’s) satellite survey of sugarcane plantings, the sugar production estimate has been decreased from 31.5 MMT to 30.7 MMT. That is 4.3 MMT or 12.28 percent lower than t...
Indian Subcontinent Regional Analysis
Rabi Sowing Down As of 18 January 2019, the total rabi planted area was down 4.8 percent versus 2017/18. While wheat is among the crops affected, pulses and coarse cereals, most especially pearl millet, are down significantly (see table below). The overal oilseed area has been good, however, as...
Brainstorming without USDA
It takes something like the current partial shutdown of the U.S. government to make those involved with agricultural markets realize how much we depend on the stream of data from USDA. The regularity of things like export sales reports, livestock reports, and estimates of production, supplies a...
Indian Subcontinent Regional Analysis
Pulse Prices Continue to Rise; GOI Restricts Imports India’s Ministry of Commerce has extended the yellow pea import restriction through 31 March 2019. The import restrictions’ goal is to curb cheaper imports and help boost domestic pulse prices. The Government of India...
Indian Subcontinent Regional Analysis
Rapeseed-Mustard Prices Crash as Hopes of Exporting to China Vanish As relations between the U.S. and China thawed and a 90-day truce was called, all hopes of India exporting rapeseed-mustard meal and soymeal to the latter vanished. China was back in the market for U.S. soybeans. It did make st...
Indian Subcontinent Regional Analysis
Vegetable Oil Imports Decline India’s vegetable oil imports totaled 1.073 MMT last month, a drop of 10.1 percent from 1.174 MMT in October and down 15.2 percent versus November 2017. In June 2018, the government of India (GOI) raised the duty on vegetable oils. The rates on crude palm oi...
Indian Subcontinent Regional Analysis
Sensitive Sugar Situation in India India has so far contracted to export approximately 1 MMT of sugar against the government’s fixed target of 5 MMT. Despite dropping 3.49 percent in the past month, however, the Indian sugar price is still 21.06 percent higher than the world price, which...
Indian Subcontinent Regional Analysis
Pulses Demand, Supply and Prices India has been importing large quantities of pulses/lentils over the years. That slowed in the last year, however, as domestic production has increased because of higher Minimum Support Prices (MSP). Khariff pulses production is expected to rise from 6 MMT in 20...
Indian Subcontinent Regional Analysis
How Much Sugar and Ethanol Will India Produce in Sugar Year 2018/19? It was widely speculated about four months ago that India would produce a huge volume of sugar at 35.5 MMT, adding to its problems of plenty. Following new reports of water scarcity and drought conditions in Maharashtra (as we...
Indian Subcontinent Regional Analysis
As India’s Sugar Production Commences, Ethanol Tender Under Scrutiny The sugarcane crush season has started in India with a few mills beginning operations in Maharashtra last week. There are still some issues to be resolved before all mills are crushing, including the labor wages for harv...
Indian Subcontinent Regional Analysis
Oil Meal Exports Continue Upward Trend India’s oil meal exports totaled 1.403 MMT for the first six months of FY 2018/19 (April-March), up 0.119 MMT or 9 percent from 1.284 MMT a year ago. Rapeseed meal exports had the biggest gain at 0.601 MMT versus 0.3 MMT during April-September 2017...
Indian Subcontinent Regional Analysis
MSP for Rabi Crops Announced The commitment to double farmers’ income by the Modi government ensured an increase in the Minimum Support Prices (MSPs) of key rabi crops, which was approved by the Cabinet Committee on Economic Affairs (CCEA) early this week. The goal is to provide at least...
Indian Subcontinent Regional Analysis
Another Bailout Package for Sugar Sector The Cabinet Committee on Economic Affairs (CCEA) has approved a third package to bail out the sugar industry. Worth $758 million, it includes a freight subsidy for sugar exports of up to 5 MMT and $1.89/MT on cane crushed in 2018/19. The first package, v...
Early 2019 Acreage Forecasts
In advance of USDA’s winter wheat acreage report on Friday, WPI has prepared early forecasts of 2018/19 crop planted area for the U.S. Given current market dynamics, it comes as no surprise that our research finds corn acres will increase at the expense of soybeans. Wheat area will increa...
Indian Subcontinent Regional Analysis
Drop in Vegetable Oil Imports India’s vegetable oil imports have increased over the years. They rose from 14.42 MMT in 2014/15 (November-October) to 14.57 MMT in 2015/16 and 15.07 MMT (approx. 1.25 MT/month) in 2016/17. In 2017/18, though, overall imports are down. According to data...
Market Commentary: The Bear that Ate the Corn Market
The WASDE was undeniably bearish with December corn and November soybean futures reaching new contract lows (actually, soybeans hit the low before and after the WASDE’s release), while wheat futures were down double-digits in response to the latest news. The headline numbers cratering the...
Indian Subcontinent Regional Analysis
Demand for Quality Malt and Beer Increasing The number of microbreweries has grown from 20 to 120 in the past five years (2013-2018), up 500 percent. New international brands have come to India during this period, and now the trend is to sell bottled/canned craft beer. However, none of this mea...
India Subcontinent Regional Analysis
Sugar Prices Stable; Exports Not Feasible Even with the Merchandise Export from India Scheme (MEIS) export incentive of 7 percent, it is not possible to make a profit exporting sugar. The government of India (GOI) set an export target of 2.0 MMT for the 2017/18 season (ending 30 September), but...
India Subcontinent Regional Analysis
Vegetable Oil Imports via South Asian Countries India’s edible vegetable oil imports dropped about 2.23 percent during November 2017-June 2018 to 9.4 MMT versus 9.615 MMT in the same previous eight months. For June 2018, they were 19.18 percent lower than May 2018 at 1.007 MMT and down 22...
Indian Subcontinent Regional Analysis
Increased Sugarcane Prices a Double Blow for the Sugar Industry As this is an election year, the government must please farmers, the backbone of the Indian economy. As it promised in the election manifesto and again in the budget speech to guarantee them at least a 50 percent profit above the c...
India Subcontinent Regional Analysis
Ethanol Policy Changes May Not Ease Pressure on Sugar Sector Immediately Changes in ethanol prices, including that of B-Heavy molasses as an input for making the fuel, do not mean that India will become self-sufficient in supplies and fulfil the demand of the Ethanol Blending Program (EBP). Fur...
Indian Subcontinent Regional Analysis
Ban on Yellow Pea Imports Extended for Three Months India’s Ministry of Commerce has extended the ban on yellow pea imports, first implemented in late April 2018 for a three-month period as the price of chickpeas cotinued to slide, until 30 September 2018. Per the notification, “The...
Closing Bell Wrap-Up
CBOT products bounced higher today as the Trump Administration confirmed it is backing away from new restrictions in investment and intellectual property purchase rights to be applied on China. The move is being interpreted as the Administration taking a softer tone to draw China back to the ne...
Indian Subcontinent Regional Analysis
Falling Soymeal Prices May Move Up if Exports Continue Soybean and soymeal prices moved lower last week but had some upward movement near its end, and they are stable now due to slow poultry sector demand as well as international cues. However, world prices are still lower. The Indian soybean s...
Indian Subcontinent Regional Analysis
Ethanol Production Up; Prices Nose-Dive As noted in earlier reports, India’s sugar production in sugar year 2017/18 (November-October) is expected to reach 32 MMT, and that is having an effect on ethanol production. The latter is now expected to total 3.11 billion liters (0.822 bill...
India Subcontinent Regional Analysis
Wheat Procurement Exceeds Estimates; Open Market Prices Drop As of 4 June 2018, 34.724 MMT of wheat had been procured for 2018/19 by the Food Corporation of India (FCI) and state agencies, 8.51 percent more than the government of India’s (GOI’s) fixed target of 32 MMT. For reference...
Indian Subcontinent Regional Analysis
Sugar Prices Improve on GOI Intervention It seems that the government of India (GOI) has finally heeded the sugar industry’s demand and will create a buffer stock. With the Indian Sugar Manufacturers Association now boosting its sugar production forecast to 32 MMT, 2018/19 opening stocks...
Indian Subcontinent Regional Analysis
Higher Sugar Production Keeping Prices Low India’s sugar production could reach 31.5 MMT, according to the Indian Sugar Manufacturers Association (ISMA). The mills in Uttar Pradesh are still crushing sugarcane and may continue to do so until the end of the month. The higher-than-normal pr...
Indian Subcontinent Regional Analysis
Subsidy for Sugarcane Growers Unable to pay for sugarcane deliveries because of high input costs and low sugar prices, the sugar industry approached the government for an intervention. The arrears owed to farmers had reached $2.98 billion at the end of March 2018, and the government of India (G...
Indian Subcontinent Regional Analysis
Soymeal Exports Trending Lower For FY 2017/18 (April-March), India’s soymeal exports totaled 1.156 MMT, up from 0.916 MMT the previous year. However, they were lower in the first six months at 0.666 MMT versus 0.840 MMT during the same period of FY 2016/17. After peaking at 0.207 MMT in N...
India Subcontinent Regional Analysis
Wheat Procurement Starts; New Crop Quality Issues Unseasonal rains across the wheat belt (north India) in the last week have somewhat damaged the crop, which is ready for harvest. In those areas where harvesting has begun, the stock arrivals at market yards have been similarly impacted by rainf...
India Subcontinent Regional Analysis
Record Sugar Production Expected as Prices Tumble and Arrears Mount India’s sugar production for 2017/18 (October-September) is now expected to total 30.3 MMT, up from the previous estimate of 29.5 MMT. The production cycle is coming to an end with output reaching a high of 28.18 M...
Stocks and Prospective Plantings
USDA’s 1 March quarterly stocks and initial planting intentions reports have a history of providing market-moving surprises, and today’s releases add to that history. The corn and soybean stocks had been expected to be record large, and they were. Along with those of wheat, they all...
Indian Subcontinent Regional Analysis
Soybean Supply and Demand Balance Shows Deficit While the government of India (GOI) has forecast the 2017/18 soybean crop at 11.39 MMT, the trade and industry is projecting 7.2-7.5 MMT. Domestic crushers have procured 0.1 MMT from various African origins (mainly Ethiopia) in recent months as th...
Indian Subcontinent Regional Analysis
Record Sugar Production Expected Based on the projected increase in sugarcane production (see Ag Perspectives, 2 March), a higher crush as well as good recovery in Maharashtra, Karnataka and Uttar Pradesh, the sugar industry expects 2017/18 sugar production to reach 29.2 MMT, a record. That is...
China In-Country Analysis
Macro Trends China’s Ag Imports Climb Nearly 13 Percent in 2017 With the conclusion of China’s Lunar New Year celebrations, its Ministry of Commerce has started to release year-end data. Farm-related products entering the country in 2017 were valued at $125.9 billion, up 12.8 percen...
Let the Guessing Games Begin
The noted economist John Kenneth Galbraith famously observed that “the only function of economic forecasting is to make astrology look respectable,” which is interesting since he was one of the foremost economic forecasters of his time. His remark could be considered especially appl...
Indian Subcontinent Regional Analysis
Soymeal Prices Up, but DDGS Not Available as Alternative The Soybean Oil Processors Association (SOPA) has again trimmed its estimate for India’s 2017/18 soybean production (harvest in October-November 2017), reducing the previous forecast of 9.15 MMT to 8.35 MMT. The government of India...
Indian Subcontinent Regional Analysis
Sugar Prices Firm; Export Duty Could Be Removed Sugar prices continue to firm following the imposition of an export duty and stock limits on sugar mills. According to National Commodity and Derivatives Exchange (NCDEX) data, the bottom spot price occurred on 5 February 2018 with prices rising 8...
Indian Subcontinent Regional Analysis
Higher Duties on Sugar and Chickpea Imports Have Immediate Effect To keep a check on prices, the government of India (GOI) has raised the duty on sugar from 50 percent to 100 percent. The increase was a demand from the sugar industry as sugar prices were below the cost of production. Both carry...
Indian Subcontinent Regional Analysis
High Duty Reduces Edible Oil Imports Edible oil imports dropped in December 2017 following an increase in the duty the previous month, falling approximately 9.88 percent to 1.058 MMT versus 1.174 MMT in December 2016. They totaled 2.283 MMT for the two months of November and December 2017, down...
Market Commentary
Soybean and product prices moved lower overnight while grains climbed higher, reversing yesterday’s pattern of direction. The volume of trade was notably higher than during recent overnight sessions, probably in response to a sharp decline of the U.S. dollar against most other major curre...
Indian Subcontinent Regional Analysis
Sugar Prices Continue to Tumble Sugarcane processors (mills) should pay farmers for their stocks within two weeks of the harvest/purchase, and the government of India (GOI) had increased the prices in 2017 for sugar year 2017/18 (October-September). There is a lag period as the sugar is process...
Summary of Futures
Ag, energy, and soft commodity futures’ technical patterns, including momentum and long-term indicators, are examined. Changes in the forward curve for grain futures have important implications while livestock momentum indicators provide directional insights. ...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MIDDLE EAST/MEDITERRANEAN COMMENTS The first shipment of 2,200 MT of Indian wheat has arrived in Kabul, Afghanistan via Iran’s Chabahar port. Another 60,000 MT are reported to be in Chabahar, the first lot of an estimated 1.1 MMT destined for various locations in Afghanis...
Summary of Futures
Ag, energy, and soft commodity futures’ technical patterns, including momentum and long-term indicators, are examined. Changes in the forward curve for grain futures have important implications while livestock momentum indicators provide directional insights. ...
Summary of Futures
Changes in energy products’ recent price behavior point to potential trading opportunities. Similarly, the momentum indicators in grains show opportunities in those commodities are rapidly changing as well. Finally, livestock and soft commodity futures are analyzed and their forward curve...
Regulated Commodity; Foodtopia
Regulated Commodity The Commodity Futures Trading Commission (CFTC) announced that it will hold hearings at the end of the month to examine issues related to regulating the trading of bitcoin. The value of bitcoin has risen rapidly in recent weeks as speculators have taken a more dominant posit...
Indian Subcontinent Regional Analysis
Higher Supplies Keeping Sugar Prices in Check India’s sugar production reached 10.3 MMT as of 31 December 2017, a 25.36 percent increase from the total 8.2 MMT on the same date in 2016. It totaled 3.8 MMT in Maharashtra, 3.33 MMT in Uttar Pradesh and 1.62 MMT in Karnataka. This boost corr...
Summary of Futures
Changes in energy products’ recent price behavior point to potential trading opportunities. Similarly, the momentum indicators in grains show opportunities in those commodities are rapidly changing as well. Finally, livestock and soft commodity futures are analyzed and their forward curve...
Summary of Futures
Recent price activity for ag, energy, and soft commodities is examined in tabular and graphical format. The most important price analysis is distilled for easy understanding and presentation. Starting with a five-day price history for ag, energy and soft commodity futures prices, Commodity Anal...
Summary of Futures
Ag, energy, and soft commodity futures’ technical patterns, including momentum and long-term indicators, are examined. Changes in the forward curve for grain futures have important implications while livestock momentum indicators provide directional insights...
Indian Subcontinent Regional Analysis
Soymeal Prices on the Rise Demand for soymeal and soyoil is robust, but the soybean supply is limited and slow. The government of India’s (GOI’s) first advance estimates in September 2017 put soybean production at 12.217 MMT. However, the trade’s estimate was much lower...
Summary of Futures
Changes in Commodity Analytics’ short-term technical indicators for grain futures should be carefully examined against long-term signals. Elsewhere, livestock futures (live cattle, feeder cattle, and lean hogs) are showing technical signals that may influence how traders should man...
Summary of Futures
Changes in energy products’ recent price behavior point to potential trading opportunities. Similarly, the momentum indicators in grains show opportunities in those commodities are rapidly changing as well. Finally, livestock and soft commodity futures are analyzed and their forwar...
Closing Futures Prices
WPI provides a summary of the week’s futures price activity and the gains/losses experiences by grain, oilseed, and livestock markets. Additionally, today’s data from the CFTC points to changing views among managed money funds. Meanwhile, commercial traders’ positions are chan...
Indian Subcontinent Regional Analysis
Sugar Prices Under Pressure as Production Rises India’s 2017/18 sugar production totaled 6.94 MMT as of 15 December 2017, up 5.346 MMT (29.81 percent) versus the same date last year. The sugar manufacturing/cane crushing was delayed in 2016, and it began this year on 1 October. With highe...
Friday
Fri 12/22/2017 12:00 pm Cattle on Feed NASS 12:00 pm Chickens and Eggs NASS 12:00 pm Cold Storage NASS 12:00 pm Cotton Ginnings NASS 12:00 pm Hogs and Pigs NASS 12:00 pm Peanut Prices NASS ...
Summary of Futures
Changes in Commodity Analytics’ short-term technical indicators for grain futures should be carefully examined against long-term signals. Elsewhere, livestock futures (live cattle, feeder cattle, and lean hogs) are showing technical signals that may influence how traders should mana...
Indian Subcontinent Regional Analysis
Higher Cotton Production Expected; Prices Slowly Moving Up: The Cotton Advisory Board (CAB)’s estimate of India’s 2017/18 cotton production is 37.7 million bales (170 kg each), up 9.27 percent from 34.5 million bales in 2016/17.It is projected to be down in states that include Mahar...
Cotton Terrorism; Cultural Shipping; Bored in BsAs; Oil versus Wheat
Cotton Terrorism Domestic agricultural subsidies distort markets and thus cause a multitude of harms. However, none seems worse than the overproduction of cotton in rich countries that adversely impacts farmers in the “cotton-four” West African countries. Nonetheless, they are...
Indian Subcontinent Regional Analysis
Wheat Sowing Slow; Higher Prices Remain Stable The rabi wheat sowing has reached 11.066 million hectares thus far, down 12.41 percent from 12.635 million hectares at the same time last year. The government of India (GOI) had doubled the wheat import duty in early November (near the start of the...
Stuff and Fluff of en dehors; Carbo-Overload
Stuff and Fluff of en dehors Donald Trump has adopted the “Asian pivot” of his predecessor but not in the same fashion. While Barack Obama approached China cautiously and all others with full embrace, the Donald’s less nuanced approach involves far higher risk. Thus far on his...
Next Week
WPI provides a list of coming USDA reports that will have market-moving interest to our readers. Reports included in this list span those covering feed grains, wheat, oilseeds, livestock, and soft markets. Mon 11/06/2017 9:00 am Milk Cost of Production ERS 11:00 am Livestock and Me...
Indian Subcontinent Regional Analysis
Indian Market Should Open to U.S. Imports The U.S. Commerce Dept. and U.S. Trade Representative first raised market access issues with India at the 26 October 2017 Trade Policy Forum (TPF) held in Washington, DC, and pressure has continued to build on the nation to open its doors to U.S. produc...
Friday
WPI provides a list of coming USDA reports that will have market-moving interest to our readers. Reports included in this list span those covering feed grains, wheat, oilseeds, livestock, and soft markets. Fri 11/03/2017 3:00 pm Latest U.S. Agricultural Trade Data ERS 3:00 pm Peanu...
Wednesday
WPI provides a list of coming USDA reports that will have market-moving interest to our readers. Reports included in this list span those covering feed grains, wheat, oilseeds, livestock, and soft markets. Wed 11/01/2017 3:00 pm Broiler Hatchery NASS 3:00 pm Cotton System NASS 3:00...
Next Week
WPI provides a list of coming USDA reports that will have market-moving interest to our readers. Reports included in this list span those covering feed grains, wheat, oilseeds, livestock, and soft markets. Mon 10/30/2017 3:00 pm Agricultural Prices NASS 4:00 pm Crop Progress NASS &...
Indian Subcontinent Regional Analysis
MSPs for Key Crops Increased Before Sowing Season Begins The government of India (GOI) has raised the 2017/18 Minimum Support Prices (MSPs) for rabi crops in order to encourage farmers to plant more pulses and oilseeds. The MSPs for wheat and barley were also increased. The government and its...
Friday
WPI provides a list of coming USDA reports that will have market-moving interest to our readers. Reports included in this list span those covering feed grains, wheat, oilseeds, livestock, and soft markets. Fri 10/27/2017 12:00 pm Rice Stocks NASS 3:00 pm Livestock & Meat Domest...
Short-Lived Sugar Taxes
Many food and ag regulations/policies start off as state and/or local initiatives before spreading elsewhere. Animal welfare began with a referendum on swine production practices in Florida, and nutritional labeling on restaurant menus was a New York City requirement. Labeling of GM ingredients...
India Subcontinent Regional Analysis
Vegetable Oil Imports Up and Expected to Increase Further India’s oil year 2016/17 (November-October) ends soon with all vegetable oil imports in the past 11 months totaling 14.268 MMT, up 5.18 percent against 13.565 MMT during the same period of the previous year. This included 13.939 MM...
Wednesday
WPI provides a list of coming USDA reports that will have market-moving interest to our readers. Reports included in this list span those covering feed grains, wheat, oilseeds, livestock, and soft markets. Wed 10/18/2017 11:00 am Fruit and Tree Nut Data ERS 11:00 am Vegetable and P...
Oilseed Highlights: China’s Soybean Crop Impacts Prices; U.S. Senators and Biodiesel Blending Mandate; NOPA Crush Report
Larger China Soybean Crop Results in Lower Prices Last year China decided to boost its support to farmers growing soybeans while simultaneously reducing that provided for growing corn. The objective was to begin to reduce corn production in order to lower its huge stocks as well as decrease soy...
Next Week
Mon 10/16/2017 12:00 pm Cotton & Wool Outlook: October 2017 ERS 12:00 pm Oil Crops Outlook: October 2017 ERS 3:00 pm Feed Outlook: October 2017 ERS 3:00 pm Rice Outlook: October 2017 ERS 3:00 pm Wheat Outlook: October 2017 ERS 4:00 pm Crop Progress NASS Tue 10/17/2017 3:00 pm Feed Gr...
India Subcontinent Regional Analysis
Higher Cotton Production Could Bring Prices Down The land planted to cotton in India has increased 18.62 percent to 12.1 million hectares in 2017/18 versus 10.2 million hectares in 2016/17. Farmers shifted to cotton as they were unable to make a profit last year with other crops, mainly pulses...
Scapegoat Wine
Copa-Cogeca’s Wine Working Party has warned that climate change and extreme weather have caused a “historically low” wine harvest. French production is reportedly down 18 percent, and Italy’s wine output is off 26 percent. However, global grape production is up 40 percen...
Summary of Futures
Ag, energy, and soft commodity futures' technical patterns, including momentum and long-term indicators, are examined. Changes in the forward curve for grain futures have important implications while livestock momentum indicators provide directional insights.Summary of Closing Prices...
Moral Based Trade; Marginal Change Required
Tying climate change requirements to trade agreements may seem wise, but doing so holds dangerous moral implications. Elsewhere, negotiation means everybody gets something and NAFTA renegotiations mean Mexico should target the U.S. sugar supply management program. Moral Based Trade When activis...
Middle East, Mediterranean and Africa Regional Analysis
Kenya is facing a maize shortage while Zambia faces oversupply with the inability to export. Meanwhile, Turkey is looking for a new customs union arrangement with the EU that will benefit both sides while Syria claims to import Russian wheat. Regional Updates MEDITERRANEAN/MIDDLE EAST COMMENTS...
Derivative Choices; Policy Choices; Loss of Hydrogen
India is allowing commodity derivatives trading while the European Parliament wants to increase regulation on futures markets, time will tell which policy choice will be preferable. Elsewhere, hydrogen changes a product’s tariff scheme. Derivative Choices The Reserve Bank of India has decided t...
Conference Critical of Farm Policy to Be Convened in DC
It is easy to tell that the farm bill is right around the corner because all the anti-farm program think tanks are suddenly engaging in the policy debate.Next week an invitation-only policy confab is being convened to criticize crop supports, export promotion programs and crop insurance. Moreov...
Indian Subcontinent Regional Analysis
India is expected to have a robust sugarcane harvest with production at 25.1 MMT in sugar year 2017/18, and there has been considerable discussion about enhancing the mills’ ethanol production capabilities. Sugar or Ethanol India is expected to have a robust sugarcane harvest with production at...
Middle East, Mediterranean and Africa Regional Analysis
Zimbabwe’s acting president has said that the government’s program of buying maize at $390/MT from farmers and selling it to maize millers at $250 /MT is “very economic” for the country, and there are several reasons why. Regional Updates MIDDLE EAST/MEDITERRANEAN COMMENTS Egypt’s prosecutors h...
Indian Subcontinent Regional Analysis
India and the U.S. have continued to build their relationship, but the issue is the trade deficit that favors the former. The U.S. could impose restrictions on Indian products to bridge the gap, but there is an alternative policy that India could implement. Pulses Exports Allowed After an 11-Ye...
Outdated Embargo Protection; Transatlantic Troubles
Some aggies are concerned that the Trump administration will impose a trade embargo against China if Beijing does not do more to stop North Korea’s nuclear missile efforts. Outdated Embargo Protection Some aggies are concerned that the Trump administration will impose a trade embargo against Ch...
Indian Subcontinent Regional Analysis
With India's planted corn area down and production expected to be impacted by the effects of flooding and drought, several factors could limit any imports to meet demand. India’s Vegetable Oil Demand Rises; Shares of Traditional Oils Drop India’s edible oil imports in oil year 2016/17 (November...
Trade Policy Conundrum; Bipartisan Tax Time; Target India
A meeting of U.S. aggies to discuss the renegotiation of NAFTA involved much focus on the net benefits of trade agreements and what is disliked about the current situation, but some key issues remain. Trade Policy Conundrum A meeting of U.S. aggies to discuss the renegotiation of NAFTA involved...
Energy Fallout; Farm Support Fallout; Reap What You Sow
The prospects for a WTO agreement on further capping domestic agricultural supports at this December’s ministerial meeting are quite slim. Meanwhile, the push by U.S. farm groups to alter farm programs here could have unintended consequences. Energy Policy Fallout China’s cabinet says it will s...
Indian Subcontinent Regional Analysis
Market/trade reports indicate India's soybean crop this year could be 10 percent less because of the smaller planted area as well as the water damage incurred. If soymeal prices move up, the country could lose one advantage. Sugar Imports Allowed Exclusively for South Indian Sugar Mills I...
Congress Passes Major Fiscal Package
The House followed the Senate in passing a bill that funded the government, provided hurricane relief and addressed the debt limit. However, this is only a temporary solution until December.Today the House of Representatives passed an amended Reinforcing Education Accountability in Development...
Oilseed Highlights: Vietnam and U.S. DDGS; Brazil Soybean Export Forecast; Canadian Canola Stocks; The EU and Argentine Biodiesel
The U.S. Trade Representative’s office indicates the government of Vietnam has addressed the issue of U.S. DDGS imports, and the EU is taking action on the antidumping duties (ADs) it had imposed on imports of Argentine biodiesel in 2013. Vietnam to Resume Importing U.S. DDGS The U.S. Trade Rep...
Oilseed Highlights: Bolivian Soybeans to China; EU Oilseed Production; Thai Soy Imports; Indian Vegoil Imports
The government of Bolivia has reached an agreement with China that is aimed at boosting its exports to that country. However, it faces one certain challenge to achieving this goal. Bolivia Agreement with China to Boost Soybean Exports The government of Bolivia has reached an agreement with Chin...
Indian Subcontinent Regional Analysis
According to a recent report, India’s broiler industry is on a growth path in 2017/18. However, it is also under immense pressure from various sources as new data reveals a critical issue. Stock Limits Imposed on Sugar to Control Prices With low output in sugar year 2016/17 (October-November),...
Market Commentary
Hurricane Harvey is creating export challenges, but robust yield estimates keep pressuring grain and oilseed futures. The cattle and hog markets took diverging paths with cattle earning triple-digit gains and hogs suffering triple-digit losses. General Comments Grain futures were mixed in moder...
Overproduction Support; Canadian Walls
Donald Trump has made clear that he wants to build a wall on the U.S.-Mexican border, but today the U.S. and Mexican dairy industries decided that one needs to come down, and it is located elsewhere. Overproduction Support The EU’s Common Agricultural Policy (CAP) support may have not only enco...
Pot Calls Kettle Black; Dangerous GMOs
European Central Bank President Mario Draghi, speaking at the U.S. Federal Reserve’s annual policy meeting in Jackson Hole, gave warning against protectionism and its adverse impact on the global economy. Pot Calls Kettle Black European Central Bank President Mario Draghi, speaking at the U.S...
Indian Subcontinent Regional Analysis
The sowing of some key commodities is down, and the major crops affected include pulses, coarse cereals and corn. There are two reasons for this, and it will be difficult at this point to expand the planted areas. Sowing Lags; Rain Shortfall Affects Key Commodities Two reasons why the sowing of...
Middle East, Mediterranean and Africa Regional Analysis
Kenya’s National Biosafety Authority (NBA) has announced that field trials for GM maize and cotton will start in October 2017, which is contrary to the efforts of one government ministry. Regional Updates MIDDLE EAST/MEDITERRANEAN COMMENTS A new finance program with Saudi Arabia will allow the...
Cotton Wants Back in Title I of Farm Bill
Farm income data shows that cotton has been a volatile market, and the industry is pressing to get back into Title I of the next farm bill.While the farm bill is scheduled to be taken up in 2018, it could possibly come before the full House of Representatives or the Senate in 2017 at any time a...
Indian Subcontinent Regional Analysis
As the GM food debate in India continues, the supply and demand gap, especially of vegetable oil, is widening, and farmers are losing money due to pest attacks while using more pesticides and herbicides. Possible Sugar Imports Could Alleviate Shortages in a Few States Sugar prices have moved u...
One-Way Pattern; GMOs Worse than CAFOs; Sweet Elasticity
U.S. exports of ethanol to Brazil are up 80 percent, and industry groups there have been demanding a tax be placed on the imports from America. Washington warns that it can reciprocate. One-Way Pattern U.S. exports of ethanol to Brazil are up 80 percent, and industry groups there have been dema...
Water versus Climate Change; Blocking Imports; Wheying Yogurt Name
The Trump administration talks a tough game on trade. When it comes to protectionism, though, it is other countries that are taking real action. Water versus Climate Change Climate change is the number one issue within the environmental community. The theory is that most everything is worthless...
Oilseed Highlights: Record Chinese Soy Imports; Containerized Soy Shipments; Brazilian Rail; Shooting Fire-Setters
U.S. soybean exports via containers have been exceptionally strong this year, almost all destined to Asia with the key markets being Taiwan, Indonesia, Thailand, Vietnam and Malaysia, and shippers are citing one particular reason. Record Chinese Soybean Imports in July Reuters reported today th...
Brazil May Impose TRQ on Ethanol Imports
The Brazilian Foreign Trade Council (Camex) may place a TRQ on ethanol imports in the next two weeks that will impact U.S. ethanol producers.It is nothing like the clashes within the Trump administration, but two cabinet members in Brazil have played out their very different views on ethanol im...
Dicamba – New Soybean Issue?
The Dicamba soybean is the latest (and hoped to be the next greatest) soybean seed/chemical combination, resistant to the broadleaf killer of the same name. However, an issue has developed.Dicamba is a broadleaf killer, and the Dicamba soybean is the latest (and hoped to be the next greatest) s...
Commodity Outlook; Internet and Innovation Inequality
Americans file four times as many patent applications as do Europeans, and part of the reason is a contrast in attitude. Commodity Price Outlook Consumer prices continue to fall in the Group of 20 largest economies. If protectionism were a problem, inflation would likely be rising as higher-pri...
Indian Subcontinent Regional Analysis
India is set on fulfilling its fuel blending mandate and has plans to achieve up to 20 percent ethanol blending in the near future. However, there are several factors and/or obstacles that must first be considered. Soy Plantings Lagging; Prices Down Ministry of Agriculture data indicates that t...
Trade Policy Roundup
Canada does not want to give up its supply management programs for dairy and poultry in the NAFTA 2.0 negotiations, and now it reportedly also wants to maintain the carve-out protecting another sector.Following are a few short, cynical takes on trade policy developments.Better Trade Deal: Last...
Why 2017/18 Will Be Different
A number of developing factors over the past several weeks suggest that the 2017/18 crop cycle will be different across the globe.Major common threads for world agricultural production, trade and crop prices during the last four crop cycles were growing production and building global stocks. Th...
Indian Subcontinent Regional Analysis
India’s rice exports have been lower in 2016/17, but its non-basmati varieties are expected to do better in 2017/18 and find a market in Bangladesh as well as possibly Nigeria. However, basmati could lose the EU market because of a new policy. Pulses Prices Continue to Slide; Planted Area is Up...
Ag Review: Geopolitics and the Black Sea
WPI Agribusiness Subsector Outlook A brief review of WPI’s past Bull/Bear calls and industry stock price performance. WPI Bull/Bear Leanings for Agribusiness in 2017 A summary and graphical depictions of WPI’s expectations for future agribusiness performance. The U.S. Gr...
Oilseed Highlights: Smaller Soybean Production Forecast for Three Countries with a Larger One Expected Elsewhere
Three countries are expected to reduce their soybean planted areas in favor of other crops, but another is forecast to increase its production of the oilseed. Argentina Reduces Estimate of 2017 Soybean Crop Argentina’s Ministry of Agriculture last week lowered its estimate for the 2017 soybean...
Cotton War; Org Mistake; Italy First; Deadly Friteries; Campbell Gamble
The Senate Appropriations Committee not only ignored the agricultural budget cuts recommended by the White House, but it ordered USDA Secretary Sonny Purdue to restore a position he had cancelled. Cotton War The Senate Appropriations Committee responded to the whining of the U.S. cotton industr...
Senate Ag Appropriations Bill Makes Down Payment on Farm Bill
The Senate ag appropriations bill includes funding and reform proposals for two programs that will help make the farm bill slightly easier to craft next year.Following in the steps of the House Appropriations Committee, the Senate Appropriations Committee approved its FY 2018 agriculture approp...
NAFTA Objectives; Cotton Subsidies; GMO Transparency; Crooked Pointing
The White House released its negotiating objectives for NAFTA modernization, and there were mixed reactions. NAFTA Objectives Analyzed The White House released its negotiating objectives for NAFTA modernization, and there were mixed reactions. Republicans praised the intended revision by saying...
Agricultural Trade Policy Moving
The EU, Brazil, Peru, Colombia and Uruguay have together proposed new disciplines on domestic agricultural supports. By contrast, the largest U.S. farm groups are calling for outright increases in subsidy levels for crop insurance and commodity price support.The EU, Brazil, Peru, Colombia and U...
Indian Subcontinent Regional Analysis
GOI's 26 May notifiation of new rules that effectively banned the trading of cattle, including buffaloes, for slaughter at animal markets was met with a petition from farmer associations and the meat industry. Now the Honorable Supreme Court has taken action. Higher Duty on Sugar Imports Will L...
G20 Trade Realism; Risky Forecasts
The OECD and FAO issued their annual long-range outlook (2017-2026) for global food commodity prices, and the U.S. Congressional Budget Office makes the same forecast. G20 Trade Realism Unlike language related to the Paris climate accord that noted discord between Donald Trump and other leaders...
Is the “America First” Approach Changing Biofuel Policy?
The U.S. EPA has released the proposed 2018 Required Volume Obligations (RVOs) for biofuels, the first such issued by the Trump administration, and it signals a different approach toward the Renewable Fuel Standard (RFS) that could shape the future of biodiesel.As Gary Blumenthal noted the othe...
Indian Subcontinent Regional Analysis
Even though the MSPs for pulses and oilseeds have been increased for the khariff season, the market prices for the former are much lower. As a result, farmers are more inclined to shift to other crops, and they are favoring one in particular. Could More Cotton Plantings Produce a Glut? 7.182 m...
Oilseed Highlights: U.S. Soy Crush; Brazil’s Soy Exports; China’s Soybeans; French Biodiesel; Lower Cotton Prices
French Environment Minister Nicolas Hulot today indicated his country’s government will take steps to restrict the use of non-sustainable palm oil and soyoil for biodiesel production in order to reduce indirect deforestation. U.S. Soybean Crush Rate Up Slightly in May USDA’s fats and oil report...
RIN Investigation; Ag Export Hearing
U.S. EPA announced a review of the Renewable Identification Numbers (RINs) system that undergirds the fuel ethanol utilization program and has issued a request. RIN Investigation U.S. EPA announced a review of the Renewable Identification Numbers (RINs) system that undergirds the fuel ethanol u...
Trade Trouble; KROUS Redux; Back to Bite; Fuel Fight
The historical criticism is that America’s economic interests have taken a backseat to national security objectives, and despite his rhetoric demanding fairer trade, Trump looks to be making the same calculation as his predecessors. Foreign = Trade Trouble China has started importing U.S. beef,...
Ag Review: U.S. Grains and the Weather Market
WPI Agribusiness Subsector Outlook A brief review of WPI’s past Bull/Bear calls and industry stock price performance. WPI Bull/Bear Leanings for Agribusiness in 2017 A summary and graphical depictions of WPI’s expectations for future agribusiness performance. The U.S. Gr...
EU-Japan; NAFTA +/-; Kowtowing; Budget Bobbing
EU negotiators are reportedly anxious to close a free trade agreement with Japan. Meanwhile, a report by the Congressional Research Service identifies the pros, cons and negotiating objectives for agriculture in a NAFTA modernization effort. Fast, Slow, Stop EU negotiators are reportedly anxiou...
Oilseed Highlights: Indian Monsoon and Soybean Plantings; U.S. Soyoil Exports to Korea; Soy Export Sales; South American Soybean Updates
Commodity Analytics shows the most recent data for grain export sales and shipments along with historic patterns. Current deviations from historic norms point to changing export opportunities for U.S. products. U.S. wheat exports are analyzed as a share of global exports and presented in graphi...
New Season for USDA Reports
On 30 June, the new season of USDA reports gets well underway. USDA may have a longer history of reporting on world agriculture than any other entity, and each report has its own audience.On 30 June, USDA will release its June survey of how much land was planted to major U.S. field crops as wel...
Cattle on Feed; Fat Fight
Last month's feeder calf placements data points to a changing supply situation for the beef market next quarter. Similarly, feedlots' fed cattle marketings show the industry is remaining current on inventories. Analysis of the fed cattle supply situation offers insight into trading strategies t...
Market Commentary
Trading volume overnight was better than might be indicated by the lack of price movement, but it was unimpressive during the day session. Later during the day, though, grain and soy markets got caught up by a broader sell-off covering multiple commodities. General Comments Grains and the soy c...
Oilseed Highlights: China Subsidy; EU and Soymilk; Argentine Soybeans; Potential Big Soy Buy
China had already implemented a subsidy this year to encourage farmers to plant more soybeans, and that production is likely to be even higher as a separate initiative is introduced to address the country's issue with a different crop. China Sharply Increases Farmer Subsidy to Encourage Crop Ro...
Market Commentary
Minneapolis wheat futures took the lead again in overnight trade, and that pattern followed through at the day session opening. The uncertainty today was that there are some good chances for widely scattered rain events and cooler temperatures in the short-term forecasts. Bulls and bears could...
Where Ag Finds Itself on Trade
Who could have predicted the situation in which the U.S. ag sector now finds itself with Mexico and China?As the saying goes, “Don’t judge a book by its cover.” This apparently applies to the trade policy book for the Trump administration. What is emerging in its first few months is not what wa...
Indian Subcontinent Regional Analysis
The federal and state governments have been unable to buy grain/oilseeds/pulses at the declared MSP, and GOI wants the private sector to lower the prices of inputs. Meanwhile, today it released the final 2017 MSP for various ag commodities, which were not as expected. Sugar Prices Continue Down...
Milk Shake; Beef Hurdles; NAFTA Issues; Shorts
USDA Secretary Sonny Perdue appeared to be referencing the ultrafiltered milk issue when he stated that Canada’s dairy processing schemes were key to the future success of NAFTA negotiations. Transatlantic Milk Shake The European Court of Justice has ruled against a tofu-based maker of products...
Unsustainable Splintering; Farm Policy Splintering; Robotic Benefit
The U.S. rural credit entity Farmer Mac issued its quarterly report called The Feed, which indicates that wage rates have risen faster in production agriculture than in any other industry. It also notes that the result is an incentive for mechanization. Unsustainable Splintering The traditional...
USA versus PRC; Taxes before Building; Sugar Solution
Former five-time Malaysian Prime Minister Mahathir Mohamad contradicts Donald Trump by saying that the remaining countries in the Trans-Pacific Partnership agreement are better off without the U.S. in the pact because too much of it favored the Americans. USA versus PRC Former five-time Malaysi...
U.S. Sugar Industry Abandons Deal with Mexico
Despite a detailed agreement that addresses almost all U.S. concerns over Mexican sugar imports, the U.S. industry does not support the pact.U.S. Commerce Secretary Wilbur Ross and Mexican Secretary of the Economy Ildefonso Guajardo today announced a new agreement in principle regarding Mexican...
Middle East, Mediterranean and Africa Regional Analysis
It is being suggested that most of South Africa’s possible 3 MMT of maize exports this year will be used in East Africa, although some countries there will restrict entry as they are mainly GM. A new report has named four potential target destinations for the maize if it cannot all be sold in t...
NAFTA Sweeteners: Let’s Make a Deal
After nearly two-and-a-half years of trade negotiations over sugar, last month the U.S. commerce secretary put a hard deadline on the talks. A deal now appears within reach to be signed tomorrow.Today was the deadline for the U.S. and Mexico to reach a deal on sweetener trade, and a pact was re...
Middle East, Mediterranean and Africa Regional Analysis
The Zimbabwean government is pushing ahead with plans for mandatory food fortification beginning 1 June 2017, including maize and wheat flour. Millers are saying it is not possible to comply because of three significant factors. Regional Updates MIDDLE EAST/MEDITERRANEAN COMMENTS The month of R...
Indian Subcontinent Regional Analysis
An increase in the MSP for pulses incentivized farmers to expand their plantings, and 2016/17 production is projected at a record 22.4 MMT. However, those farmers and GOI are now finding there are some repercussions. Effect of Higher Sugarcane FRP on Sugar Prices As India’s sugarcane farmers pr...
Trumped Agenda; Ignore the Previous; Political Animals; China Cynic
China’s Commerce Ministry has issued a report on trade relations with the U.S. and publicizes the government’s commitment to increase imports from America. There are at least three problems with this. Trumped Agenda Donald Trump is fiddling away while his policy agenda burns. His week-long fore...
U.S. Winter Wheat Issues
With tightening supplies of HRW and concerns about new crop quality, it is reasonable to ask what is going on in the KC HRW futures market.U.S. winter wheat prospects for 2017/18, murky though they may be, raise some interesting issues and questions. Historically, hard red winter wheat (HRW) ha...
Oilseed Highlights: China Advocates More U.S. Soybeans; Bad Chinese Crush Margins; Wet Weather and Canadian Canola; U.S. Soy Export Sales
Changes in U.S. market share for global soyoil exports, along with those of soymeal, are analyzed. Results offer insight into the opportunities U.S. exporters face for the remainder of the marketing year. Developments in the corn, soybean, and wheat markets are similarly analyzed and results sh...
Oilseed Highlights: Indian Soymeal Exports; Canadian Soy Production; Russian Crush Plant; Chinese Soy Trade
The executive director of India’s Solvent Extractors Association (SEA) expects the country’s soymeal exports to fall 25 percent below earlier projections because of one significant development. Strong Rupee to Cut Indian Soymeal Exports The executive director of India’s Solvent Extractors Asso...
Complex Agenda; Muddle and Muddle; Quote of the Week
While the Trump administration notified Congress this week of its intent to renegotiate NAFTA, starting a 90-day window before the talks begin, trade policy is in a much larger and complex situation. Complex Agenda While the Trump administration notified Congress this week of its intent to rene...
Ag Review: China's Soyoil Problem
WPI Agribusiness Subsector Outlook A brief review of WPI’s past Bull/Bear calls and industry stock price performance. WPI Bull/Bear Leanings for Agribusiness in 2017 A summary and graphical depictions of WPI’s expectations for future agribusiness performance. The U.S. Gr...
Indian Subcontinent Regional Analysis
As India transitions into the new Goods & Services Tax (GST) regime to be rolled out 1 July, the tax rates for various goods have been announced. Meanwhile, the "Make in India" initiative has shown some success, but there are cerain steps needed to reform Indian agriculture. New Goods &...
Green Waste; NAFTA Nonsense; Chocolate; Stocks; Obvious
After ruling out imposing tariffs on ethanol imports from the U.S. due to concerns about retaliation, the Brazilian government will require that importers fulfill the same obligation (Resolution 67/2011) as domestic suppliers. Green Solution to Food Waste Some estimate that 70 percent of crops...
Market Commentary
Commodity markets were supported in general by the sinking U.S. dollar, which hit a six-month low today and has now given back its entire post-election rally. Wheat, especially KC, was the active leader among grain futures markets. General Comments Commodity markets were supported in general by...
Market Commentary
Grain and soy futures trade was either dull as dishwater or exciting, depending on what one’s interest might be. KC wheat was a bit more interesting today, but trade in the soy complex was comparatively exciting, at least by recent standards. General Comments Grain and soy futures trade was eit...
Indian Subcontinent Regional Analysis
With a goal of doubling Indian farmers’ income by 2022, agriculture needs land reforms. This will require an increase in productivity and a move away from the Minimum Support Price (MSP)/subsidy-driven system. India Becomes Largest Two-Wheeler Market; No Way to Control Air Pollution India becam...
Money and Hypocrites; Shrinking Yield Folly; Nanny NaNa; Rigged
Overcoming their geopolitical concerns in the region and lingering animosity over WWII atrocities, the finance ministers for China, Japan and South Korea managed to reach agreement on language opposing protectionism. Money and Hypocrites Overcoming their geopolitical concerns in the region and...
Sweet and Pesticide Battles; EU Policy Clash; WTO Impasse
The election of Emmanuel Macron to the French presidency was viewed as a vote of support for broader Europe, but that doesn’t mean a lack of policy clashes ahead. Sweet Battle Sensing that bilateral negotiations with Mexico over sugar imports were not reaching a resolution, the Trump administra...
Financial Stress; TTIP Lite
The attorney general for the state of New Mexico has launched a political witch hunt into beef processing companies, claiming ranchers are hurt by their size and anti-competitive practices. Financial Stress The trade press is hot on the stresses currently being felt in the agribusiness sector...
Oilseed Highlights: EPA Approves Nematicide; Chinese Biotech Concerns; Brazil Soy Exports
Soybean processors and soyoil refiners in China are facing growing consumer resistance to purchasing soyoil from biotech soybeans, which could also have ramifications for the government as well as ChemChina. Monsanto Wins EPA Approval of New Nematicide Monsanto today announced it had a new nema...
Flawed; Sour; Wrong; Double-Dealing; Implications
Japanese Deputy Prime Minister Taro Aso had earlier warned that the U.S. might not get as good a deal bilaterally with Japan than it would by simply rejoining the TPP. Now two contentions by the Japanese ambassador to the U.S. are respectively somewhat insulting and revelatory. Flawed Trade Str...
A Few Random Thoughts
As the new month begins, there are a number of concerns and issues related to agricultural production and/or trade.We begin the Merry Month of May, as the song from Lerner and Loewe’s musical “Camelot” called it, with some random and mostly unconnected thoughts for whatever they may be worth.-...
How Sugar Could Spark NAFTA Renegotiations by June
The U.S. has set a hard deadline on the U.S.-Mexico sugar trade talks, backed up by a possible re-imposition of duties on Mexican sugar. Will that be the de facto beginning of NAFTA renegotiations?Yesterday was the deadline for the U.S. and Mexico to come to an agreement on bilateral sweetener...
Congress Strikes Deal on Government Funding Package
Congress has struck a deal on a funding bill to keep the government open through the end of FY 2017, and it also addresses many ag policy issues that WPI has reported on over the past two years.On 28 April, Congress agreed to a one-week continuing resolution (CR) as a stopgap measure to fund th...
Ignorance and Contradictions
Newly-minted USDA Secretary Sonny Perdue needs to tell his Commerce Department counterpart Wilbur Ross to mind his own portfolio. Meanwhile, former USDA Secretary Tom Vilsack is telling Canadians that it’s time to modernize NAFTA but improve U.S. market access to certain areas. Ignorance on Agr...
Ag Review: Can Exports Save the Dairy Industry?
WPI Agribusiness Subsector Outlook WPI Bull/Bear Leanings for Agribusiness in 2017 A summary and graphical depictions of WPI’s expectations for future agribusiness performance. The U.S. Grain Industry Industry focus on divesting non-core business units will stabilize b...
Market Commentary
The day session saw trading volume fade some as the market tried to hang onto yesterday’s gains. There was more fund short covering in wheat, and those markets were up about 5-6 cents at one point. General Comments Yesterday’s robust trading volume carried over into last night’s session with s...
Oilseed Highlights: Canadian, Argentine and Indian Soybean Plantings; Brazil’s Biotech Crop
Although most expect that the current disparity in Argentina's export taxes will be enough to cause farmers there to continue decreasing their soybean plantings in favor of more corn, Canadian farmers apparently have other intentions. Canadian Farmers Plan Big Boost in Soybean Plantings Statist...
Indian Subcontinent Regional Analysis
While GOI is continuing to procure local wheat for the MY 2017/18 program, imports are still feasible despite the 10 percent duty with one particular origin deliverable at a lower cost than domestic stocks. Sugar Production Down; Ethanol Blending Limited Based on India’s current sugar productio...
Federal Funding Deadline for Government Shutdown Nears
With the deadline to pass a federal funding bill in the offing, Congress is revisiting a strategy employed in 2014 that kept the government open.A week from today (28 April), the federal government runs out of money. The short-term funding bill passed at the end of last year set the date for wh...
Overstated and Misunderstood; Self-Defeating Ag Policy
As if he’d never paid a second of attention to bilateral trade issues before running for president, Donald Trump suddenly realizes that Canada operates a supply management program for dairy. Overstated; Misunderstood For Donald Trump, everything is “huge” and NAFTA is a “disaster.” As if he’d n...
DEIP the Canucks; Trump PO’d at TPA
Canadian Ambassador to the U.S. David McNaughton may be correct that his country’s pricing policy on ultrafiltered milk may be WTO legal, but that doesn’t mean it lacks adverse impact on U.S. suppliers. DEIP the Canucks Canadian Ambassador to the U.S. David McNaughton may be correct that his co...
Oilseed Highlights: NOPA’s March Crush Volume; Canada’s Soybean and Canola Areas; Chinese Crush Margins and Soybean Prices
Leaders of Canada’s soybean industry expect the soybean plantings there will total 10 million acres by 2027. However, the sector has a notable problem with its production that impacts prices, and addressing this matter is said to be a priority. NOPA’s March Soybean Crush Volume Falls Below Trad...
Oilseed Highlights: Export Sales; Indonesian Minister Says No Palm Oil to EU; Brazilian Corruption
Commodity Analytics shows the most recent data for grain export sales and shipments along with historic patterns. Current deviations from historic norms point to changing export opportunities for U.S. products. U.S. wheat exports are analyzed as a share of global exports and presented in graphi...
NAFTA Strategies; Self-Flagellation; Xenophobic Soda; Bombs for Beans
The government of Canadian Prime Minister Justin Trudeau is still trying to figure out what to expect and how to position itself in the upcoming renegotiation of NAFTA. Meanwhile, big U.S. soda companies are under attack over sugar content in the West and water in India. Canada's NAFTA Calculat...
U.S. Dairy Calls for Trade Action Against Canada
A new milk pricing regulation implemented in Canada on 1 April has the U.S. dairy industry calling for the Trump administration to take action against that country.As the Trump administration prepares to renegotiate the NAFTA agreement with Canada and Mexico, the U.S. dairy industry is pressing...
Indian Subcontinent Regional Analysis
Following the landslide victory of the Bharatiya Janata Party (BJP) in Uttar Pradesh, there is hope that the government will be able to move forward with promised reforms as certain economic changes in the country have been noted. Appreciating Rupee is Good News for Imports Following the landsl...
U.S. Agriculture’s Stake in China
While U.S. relations with China are tense, due in no small part to President Trump’s harsh rhetoric and threats, U.S. grain and soybean producers have quite a large stake in trade with that country.With the world watching intently, U.S. President Donald Trump is hosting China’s President Xi Jin...
Draft Outline for NAFTA Renegotiation
The Trump administration has prepared a draft letter notifying Congress of its intent to renegotiate NAFTA, which spells out the objectives while pledging to work cooperatively with the legislative body on the process.The Trump administration has prepared a draft letter notifying Congress of it...
NAFTA Goals; Faulty WTO; Secession
A draft text of Trump administration negotiating objectives for modernizing NAFTA reflects an undramatic change from the Obama administration’s trade policy. NAFTA Objectives A draft text of Trump administration negotiating objectives for modernizing NAFTA reflects an undramatic change from the...
Dairy Competition; Pest Friendly; No Brexit Trade; Unsweet
EU chief negotiator on Brexit Michel Barnier says there will be no trade deal with Britain if London decides to impose weaker regulations than the Continent. This effectively means no trade agreement. Competition and Dairy Production Having studied the relationship between the country’s milk pr...
Indian Subcontinent Regional Analysis
India is facing a possible tight sugar supply situation with lower-than-expected production and higher-than-expected demand. India is considering import duties on sugar, wheat, and pulses to help... Duty on wheat and pulses imports possible In order to protect the Indian wheat growers, the gove...
Oilseed Highlights: Fewer Indian Soy Plantings; Paraguay’s Big Soy Crop; Indonesian Biodiesel; Slow China Biotech Approvals
The American Chamber of Commerce in China complained this week about the government’s slow approval process regarding new biotech crops, which most notably impacts the soybean sector. There is also a potential development that could worsen the situation. Low Pulse and Soybean Prices Drive India...
Ag Review: 2017 Cow/Calf Profitabitiy Outlook
WPI Agribusiness Subsector OutlookWPI Bull/Bear Leanings for Agribusiness in 2017 A summary and graphical depictions of WPI’s expectations for future agribusiness performance. Wheat Market Risks and New Realities U.S. wheat’s declining global importance gave rise to ongoing battle f...
Ethanol Exports Facing Potential Problems in 2017
Ethanol exports are starting the year strong, but there is some uncertainty in major markets.The March World Agricultural Supply and Demand Estimates (WASDE) report from USDA raised the estimate of corn to be used in ethanol production by another 50 million bushels to 5.4 billion during the 201...
Indian Subcontinent Regional Analysis
India's wheat prices dropped at the start of this year's harvest, gradually increased and then stabilized at about Rs.17,000/MT ($250/MT) at the spot market. However, there is now a concern regarding the crop. Stable Wheat Prices; Disease Affects Crop in West Bengal India’s 2016/17 rabi wheat h...
Farm Bill Tidbits
Farm bill proposals are emerging from producer groups and legislators alike, but there are questions. Will USDA put forth a farm bill plan? Will acreage idling expand under conservation programs? Will sugar policy finally be altered?USDA’s farm bill input - The Trump transition team indicated t...
More Things to Keep You Up at Night
Although the market can now put the South American soybean crop in the rearview mirror, one potential problem remains. Meanwhile, the U.S. southern Plains hard red winter wheat crop, well ahead of normal in terms of development, is getting deeper into trouble every day. Another USDA WASDE (sup...
Dairy Margin Protection Program Reforms for Feed Costs
House Ag Committee Chairman Michael Conaway (R-Texas) outlined the key areas for the next farm bill at the recent Commodity Classic and indicated the industry would likely have a plan of action for MPP reforms. Sure enough, the NMPF released its recommendations this week.House Agriculture Commi...
Market Commentary
From the limited price action, it is clear that the market is not expecting big changes from tomorrow’s March WASDE. There is some sentiment that USDA might raise estimates for corn exports and/or use for ethanol, which would lower end stocks. Others, though, think that it may wait until next m...
A Conflicted Soybean Market
Despite the large fund investment in the soybean market, soybean futures prices have stayed in a trading range during the past two months that reflects the conflict between funds’ desire to be long amid a rather bearish fundamental outlook.Monday’s Wall Street Journal carried an article describ...
Indian Subcontinent Regional Analysis
Wheat prices have softened quite a bit in the past five weeks as imports have been good. While there has been no official announcement yet, it is being speculated that the government of India (GOI) might impose a 25 percent tariff on wheat imports as of 1 April for two reasons. Wheat Prices Sof...
Wars: Food; Labor; Science
The U.S. farm sector is nervous about Donald Trump’s crackdown on illegal laborers. Those workers may account for half the labor in sectors such as dairy. War on Food University of Sussex researchers found that each parent contributed 20 percent of the correlation of a child’s BMI, regardless o...
A Big One Falls
One of North Dakota’s largest farmers filed a Chapter 7 bankruptcy petition recently. Most will blame the collapse on the downturn in commodity prices. While that was certainly a major reason, there are many other contributing factors.One of North Dakota’s largest farmers filed a Chapter 7 bank...
China Plans High-Value, Improved Quality, Large-Scale Agriculture
China's so-called Number 1 Document has been released, which is focused on agriculture and rural policy. While reaffirming some key policies already in place, it also indicates that crop production and support programs will be considered under three tiers.Last week the USDA post in Beijing rele...
Indian Subcontinent Regional Analysis
India's production of milk, egg and poultry meat continues to grow, but most of that is consumed by a simultaneously expanding population. However, its buffalo meat is in high export demand for several reasons. India’s Sugar Production Continues to Trail as Prices Rise Sugar prices continue to...
Outlook Acreage Projections
USDA always holds its annual Agricultural Outlook Forum in late February. Among other things, there has been great interest in learning its latest views on what planted acreage will likely be for various spring planted crops.USDA no doubt has good reasons for always scheduling its annual Agricu...
Farm Balance Sheet Impact on Planting and the Farm Bill
What will continued low crop prices and debt accumulation mean for production and policy?Macroeconomic factors in 2016 (i.e., uneven global economic growth and shifting currency values) are still in play in 2017, according to USDA testimony at the House Agriculture Committee last week. Economic...
Indian Subcontinent Regional Analysis
GOI released the second Agricultural Production Advance Estimates this week, which indicated an approximate 8.11 percent increase in farm output versus last year. Despite high production, though, corn exports are not currently possible because of one critical factor. India’s Second Agricultural...
Indian Subcontinent Regional Analysis
India's 2017/18 budget was released early and includes several notable provisions that will help the agriculture sector. Left out, however, was any significant allocation for one specific area that would help ease the cost of production and increase efficiency. Soaring Sugar Prices May Result i...
Oilseed Highlights: Large U.S. Soymeal Sales; Caterpillar Emergency in Brazil, Soyoil-Based Graphene
Today’s USDA export sales report brought some good news to the U.S. soy sector in the form of larger-than-expected soymeal export sales last week. Meanwhile, researchers in Australia have discovered how to make graphene from soyoil. Large U.S. Soymeal Export Sales Last Week Today’s USDA export...
Oilseed Highlights: Limited Biodiesel Feedstocks; Philippines’ Higher Soymeal Imports; Tight Rapeseed Supplies in Europe
The National Biodiesel Board believes reinstatement of the $1/gallon biodiesel tax credit and issuing payments to producers instead of blenders will allow it to greatly boost production while eliminating most of the biodiesel that is now imported. Where Will U.S. Biodiesel Industry Get Feedstoc...
Ethanol Policy; Farm Bill Issues; FTAs and Buy America
Donald Trump contends that bilateral trade agreements are better for the U.S., presumably because there is no dilution of America’s leverage from being the larger economic power at the table. However, there are other strategic factors in picking bilateral partners. Ethanol Policy Change Some su...
Indian Subcontinent Regional Analysis
Chickpeas are a popular source of protein in India. However, prices of the whole chickpea and the split dal (pulse) are on the rise. As a result, many consumers have shifted to one alternative. High Chickpea Prices Shift Demand to Yellow Peas Chickpeas are a popular source of protein in India...
Oilseed Highlights: Size of Brazilian Soybean Crop; Big Aussie Canola Crop; More Soybeans than Corn in 2017
If recent forecasts are to be believed, Brazil’s 2017 soybean crop will apparently not only be a record, it will be huge. As optimistic as those projections are, however, there is some evidence to suggest it will be smaller. Is Brazil’s Soybean Crop as Large as Many Forecast? If the forecasts i...
Indian Subcontinent Regional Analysis
After being stable until the third week of December 2016, sugar prices are moving up faster than expected in this current sugar season as there is higher demand from institutions. However, there are also a few other factors that are having an impact. Higher Per Capita Income and Lower GDP Growt...
Kansas Reclaims Seat on House Ag Committee, Joining Other New Republican Members
House Agriculture Committee Chairman Michael Conaway (R-Texas) has announced the six new Republican members of the House Agriculture Committee for the 115th Congress, which includes a Kansan.In December 2012, Kansas Republican Tim Huelskamp lost his seat on the House Agriculture Committee for b...
Oilseed Highlights: New Bunge Soy Crush Plant; India’s Soymeal Exports Rise; Poor Chinese Crush Margins
Yesterday Bunge announced plans to build a new soybean processing facility at an undisclosed location in either Indiana or Ohio, and adding additional soybean crushing capacity on the inland river system in the U.S. would benefit not just the domestic market. Bunge to Build New Soy Crush Plant...
Trends for Commodity Prices
Commodity prices are notoriously cyclical, and those who follow grain and oilseed markets may not fully appreciate the broader rally they had in 2016. Now there is of course considerable chatter and speculation about what 2017 may hold for commodity values.Commodity prices are notoriously cycli...
Indian Subcontinent Regional Analysis
During the demonetization period that began in November 2016, the price of cottonseed oil cake, a major source of protein for livestock in India, continued to drop due to lack of demand. However, recent developments have changed the situation. Cottonseed Oil Cake Prices Recovering India’s cotto...
Taxes and Trade, Food; Nationalism; Skewed Sources
Contradicting President-elect Donald Trump, U.S. House Speaker Paul Ryan (R-Wisconsin) announced this week on a radio program that there will be no border taxes on products shipped to the U.S. However, past presidents have prevailed in the courts in upholding their actions under declared emerge...
Predicted Food Trends: Will Meat Follow the Path of Beer?
A recent National Restaurant Association survey of chefs shows protein demand is likely to grow and change toward more specialty items. Could the evolution of the craft and specialty beer market be a structural map for the future of the meat industry?To a large extent, food trends have come ful...
Indian Subcontinent Regional Analysis
Prior to GOI’s elimination of the import duty in early December, wheat prices had reached a high of $354/MT in the New Delhi spot market. They have eased considerably to $291/MT, but imports still remain feasible for one region. Domestic Sugar Prices Expected to Firm with No Change in Duties Th...
2017 U.S. Policy Forecast
By their essence, government policies subsidize or penalize various actors in the economy. Some of this will change, but the complex nature of the democracy and policy making apparatus makes the wholesale remaking of government impossible.Overview: Those who voted for Donald Trump want change,...
Indian Subcontinent Regional Analysis
Sugar prices in Maharashtra may be dropping as new stocks become available at the market, but they could rise over the next few months because of one anticipated scarcity. There is also a fear that this could be the earliest season for some mills, and the current import duty may need to be reco...
Oilseed Highlights
Stats Canada reports that a record 1.77 MMT (65 million bushels) of soybeans were produced in Manitoba Province this year as farmers there continue to boost the plantings for several reasons. NOPA Soy Crush for November The National Oilseed Processors Association (NOPA) today reported its membe...
Europe’s GMO Achievement; Unsustainable
Recent action by the European Food Safety Authority (EFSA) s a stunning rebuke to the critics of GM technology that despite their rants and tactics, scientific principles continue to prevail in Europe. EFSA Clears Events 63 and 64 The European Food Safety Authority (EFSA) gave safety approval t...
Oilseed Highlights
USDA recently released its annual long-term projections for major crops, and those for soybeans can be justifiably challenged for several reasons. USDA’s Long-Term Soybean Yield Projections Too Conservative USDA recently released its annual long-term projections for major crops, including soybe...
Commerce Department Reviewing Sugar Agreement with Mexico
With a renegotiation of NAFTA high on the incoming Trump administration’s agenda, a new Commerce Department investigation may tee up sugar as one of the first sectors to be discussed. However, it will be within the context of a vastly changing market for sugar in the U.S. than has existed for t...
Truth Revealed; Diverging Transatlantic Emissions
Pedro Marcilio of the Brazilian firm Participacoes SA admits that U.S. government funds have been used as production loans for Brazilian cotton farmers. Now U.S. cotton farmers say they are not receiving enough government subsidies and are demanding a fatter check from taxpayers in the upcoming...
Election Impact on the Farm Bill
A Farm Foundation debate today on prospects for the next farm bill, post the election of Donald Trump, brought much enlightenment and a variety of opinions.A Farm Foundation debate today on prospects for the next farm bill, post the election of Donald Trump, brought much enlightenment. The pres...
Indian Subcontinent Regional Analysis
Wholesale wheat prices in New Delhi, the country’s key market, surged to Rs.23,916/MT ($346/MT) on 18 November from Rs.18,858/MT ($281/MT) on 18 October. There are many reasons for this, and the trade anticipates prices could rise further. Rupee Tanks as USD Grows Stronger Following its demonet...
Ag Review: Agribusiness Margins in the Face of Uncertainty
WPI Bull/Bear Leanings for Agribusiness A summary and graphical depictions of WPI’s expectations for future agribusiness performance. The Grain Industry Low prices are leading farmers to pursue cost-cutting decisions. In turn, this will pressure margins at all levels of the farm economy,...
North Dakota Congressman Outspoken on Ag Policy
Representative Kevin Cramer (R-North Dakota) is becoming an outspoken leader in proposing new agricultural policy ideas, but his biggest reforms come in the area of trade.Representative Kevin Cramer (R-North Dakota) is becoming an outspoken leader in proposing new agricultural policy ideas. In...
Farm Bill Issues and the 2018 Election
With the election over and all eyes in the ag sector on the 2018 Farm Bill, it is worth looking ahead to the 2018 mid-term elections and what role they will play with regard to this debate in the 115th Congress that is set to convene in January 2017.With the election over and all eyes in the ag...
Indian Subcontinent Regional Analysis
The Government of India’s surprise demonetization of the Rupee has financial impacts rippling through the Indian economy, though commodity prices remain relatively isolated. Separately, India’s soybean meal exports have been picking up and small cereal crop production is falling due to farmer s...
New Tax Magnet; Pinging Barriers
Food may be replacing fossil fuels as the flavor of the day for taxes while the WTO’s new system for reporting regulatory barriers to trade may need to be reversed to be truly effective. New Tax Magnet For decades, fossil fuels attracted lots of taxes (and subsidies) due to the essential necess...
Sugar Tax Election; TPP Dead; Precision Subsidies
Taxes on sugary soft drinks are on several municipal ballots tomorrow, but will they achieve their desired results? Meanwhile, TPP is practically dead and the EU will adopt subsidies to encourage precision farming. Sugar Tax Election A tax on sugary soft drinks is on the ballot in at least four...
Indian Subcontinent Regional Analysis
The market yard price of corn in Nizamabad has dropped 11.06 percent from the start of the season to $201/MT, and the NCDEX spot price there also decreased 26.20 percent over a five-week period to $214/MT. However, prices are still not as low as they should be at peak arrivals, which is partial...
Farm Groups Start Asking Questions About Next Farm Bill
The 2014 Farm Bill doesn’t expire until 2018, but deliberations on the next one will start in earnest when the new Congress convenes in January 2017. In preparation, the AFBF has already been surveying its members regarding what is needed in the next comprehensive re-write of farm policy.The 20...
It’s Hard to Make Some People Happy
Ironically, the most protected industry in U.S. agriculture is complaining that its farmers are disadvantaged, and it makes an emotional appeal with an economically-flawed statistic.Some people are hard to please. No matter what is done for them, they always see dark clouds on the horizon or fe...
Indian Subcontinent Regional Analysis
India's peanut-in-shell MSP for the 2016/17 season was fixed at $629/MT in June 2016. However, GOI’s first advanced estimates of September 2016 have projected a 21.68 percent increase in kharif production versus last year. With a higher available supply now in certain areas, many of the market...
Indian Subcontinent Regional Analysis
Keeping food prices down is key for Indian households. In order to do that and also maintain low inflation, the government has taken a step that would allow it to intervene in certain pricing of essential commodities, including pulses and sugar. Possible Impact of GST on Food Items The governme...
Clinton versus Trump on Ag; Chemo-Marketing
Differences, nuances and agreement marked the outcome of a session today between former USDA Deputy Secretary Kathleen Merrigan representing the Clinton campaign and Sam Clovis on the Trump campaign team. Clinton versus Trump on Agriculture Differences, nuances and agreement marked the outcome...
Indian Subcontinent Regional Analysis
GOI has undertaken the task of integrating the Regulated Agriculture Market Yards, which provide pricing for farmers’ produce bought in the market yard. The plan is to instead have an online platform (e-NAM) bring more transparency and a much wider market to farmers. Ethanol-for-Blending Prices...
Ag Review: Industry Insights and Outlook for Q4 2016
The Grain Industry Farmland values have been among the last to experience the impact of low commodity prices, but the downward pressure has now begun. Oilseed Processing Several factors appear to be converging for the benefit of exporters and processors of U.S. soybeans as well as the livestock...
Middle East, Mediterranean and Africa Regional Analysis
High maize prices in South Africa have in turn pushed up local poultry prices, leading to an expected notable increase in poultry imports this year and an additional 8 percent in 2017. Meanwhile, a recent report indicates Morocco's grain situation is even worse than expected. MIDDLE EAST/MEDITE...
Farm Program Spending Outpacing Other Entitlement Programs
USDA announced this week that more than $7 billion will be paid out in farm support payments under the new ARC and PLC programs versus approximately $5 billion last year. Perhaps the only good fiscal news for the next farm bill is that SNAP is forecast to have a decreasing baseline of spending...
Indian Subcontinent Regional Analysis
India's domestic oil industry had asked GOI to raise both the duty on imported oil along with the differential between the crude and refined oils duties to 15 percent. However, the government decided to take a different approach. Vegoil Import Duty Slashed; Imports Rising In September 2016, the...
An Anniversary of Sorts
Much has happened in the 20 years that have passed since the first genetically modified (GM) soybean crop was harvested in commercial quantities by U.S. farmers in October 1996.After many years of public and private research, field trials and government testing, the first genetically modified (...
Indian Subcontinent Regional Analysis
At the start of the wheat season, it was thought in India that international prices could rise if large volumes of wheat were to be imported. That has not occurred, however, and GOI has taken a step to facilitate those imports while making assurances regarding the open market there. Slashed Whe...
From the Campaign Trail
Last night’s first presidential debate of the general election campaign did not include any mention of agriculture or agricultural policy – as was to be expected. However, there was one agricultural trade issue discussed, although it was never identified as such.Last night’s first presidential...
Indian Subcontinent Regional Analysis
The first advance estimates for India’s 2016/17 kharif production have been released, and they indicate a bumper crop this year. However, the trade believes these are too high, especially for soybeans, and this is reflected in its own forecasts. Kharif Production First Estimates Released The fi...
Middle East, Mediterranean and Africa Regional Analysis
The fallout from Egypt's new zero ergot standard for wheat continues with no offers for its recent tenders and confusion regarding shipments purchased under the previous level allowed. Meanwhile, in what is perceived to be a reaction to rejection of any ergot presence, Russia has taken action o...
Ag Mergers Impact Washington’s K Street
Lower crop prices and farm income together with pressure for new products are leading to a wave of consolidation in the ag sector. One of the little-discussed, major implications of this will be the effect on the K Street lobbying corridor in the nation’s capital.Lower crop prices and farm inco...
Formers on Trade; Bogus Solutions; Clean and Messy Labels
The Center for Strategic and International Studies (CSIS) pooled together four former U.S. Trade Representatives (USTRs) to discuss American interest in the topic, and the frustration of these former officials clearly showed. Former USTRs on Trade The Center for Strategic and International Stud...
Think Tanks Calls for Privatizing Federal Ag Risk Management
The market-oriented think tank Heritage Foundation yesterday issued a special report, which provides a number of policy recommendations geared toward privatizing risk management for U.S. agriculture.The market-oriented think tank Heritage Foundation yesterday issued a special report entit...
Indian Subcontinent Regional Analysis
In response to an appeal for approval, a subcommittee of India's Genetic Engineering Appraisal Committee has issued its findings regarding the food safety, environmental safety, compliance etc. of GE mustard, and the report is now available for public comment. Temporary Measures to...
TPP Uncertainty; Disrupting Obesity; EU Insurance
Governments continue to be attracted to one-off tax schemes in an effort to fight the obesity epidemic and concurrently increase the budget coffer for politicians. Several such initiatives are pending in the U.S. as well as Europe. Uncertain TPP Push The trade policy and political machinery in...
Positive but Slow Economic Growth with Pressure on Ag and Food
The recent Institute for Supply Management (ISM) reports indicate growth, although slow, for the economy overall. There is still considerable pressure on the ag and food sector, indicated by the concerns about inventories noted at the food service level.The service sector economy continue...
Policy Change; Hate Answer; FarmTech; Coup
Thus far, activist groups such as Plate of the Union have been unable to achieve any kind of presidential candidate focus on U.S. food policy. Meanwhile, two issues that have activists riled are ironically solvable by the technology they typically hate: biotechnology. Food Policy Change Thus fa...
Free Trade Cycles
Support for free trade has ebbed and flowed in cycles that frequently track the ups and downs of national economies. Nearly every political leader is in favor of it or at least claims to be. Yet free trade is under frequent attack these days, and part of the problem is how it is defined.The 201...
Oilseed Highlights
Argentina’s major farm organizations fear new legislation that the government plans to introduce next month regarding royalties on biotech soybean seed. Farmers there have largely avoided any such payments, largely because of one reason. Argentine Farmers Continue to Resist Paying Biotech Soybe...
TPP Officially Dead; Slippery Slope; Energy Crops
Beef cattle catch a lot of grief for their land and water requirements, but a recent USDA analysis shows them to be a relative energy bargain. TPP Officially Dead The Trans-Pacific Partnership (TPP) has been dead for a long time, but U.S. Senate Majority Leader Mitch McConnell (R-Kentucky) fina...
Tax Extenders for Renewables in the U.S. and Brazil
The biodiesel tax credit will expire in December if not renewed. Senator Charles Grassley (R-IA) has proposed legislation, co-sponsored by 13 other senators, that will shift how it is applied. In Brazil, the tax exemption for ethanol sales also expires in December, and a change could occur ther...
Indian Subcontinent Regional Analysis
Prime Minister Modi recently assessed the Ethanol Blending Program (EBP) for India and wants 10 percent of the output made available across the country. However, there are certain obstacles to meeting this target that must first be addressed. India’s Wheat Situation Over the years, Food Corpora...
Naturally Dumb; Trade Policy Frustration
The term “natural” is not defined by the U.S. FDA for its use in labeling food products, and companies are increasingly being challenged in court by litigants who want the judiciary to accomplish what the agency has been remiss in doing. Naturally Dumb The term “natural” is not defined by the U...
Dairy Policy, Politics and the Cheese Market
Dairy policy has always been highly politicized from Lyndon Johnson’s time in the Senate in the 1950s right up through this week as USDA announced a major initiative to help boost milk prices.Former President Lyndon Johnson once tried to explain the byzantine structure of dairy policy when he w...
Oilseed Highlights
Monsanto's withdrawal of its application to sell Bollgard II Roundup Ready Flex cottonseed in India is said to be due to a new government-proposed requirement. The company is apparently also upset about a pricing matter related to the older version. Monsanto Withdraws Application for New GM Cot...
Indian Subcontinent Regional Analysis
Considering how difficult it currently is to cull/sell cows in India as there is likely to be a clash of ideologies with the Hindu lobbies, farmers in some areas such as Uttar Pradesh are now instead raising a different source of meat for export. New, Expanded Crops May Help Stabilize High Food...
EPA Did Not Comply With RFS Assessment Obligations
Yesterday the U.S. EPA’s Office of the Inspector General released its report on a review to determine if the agency complied with the statutory reporting requirements of the RFS, focusing on three key components.Yesterday the U.S. EPA’s Office of the Inspector General (OIG) released its r...
Policy Conundrum; Extraterritorial; High Prices
There is great frustration on the part of some that the adverse impacts of the food system fail to garner more political attention in a major election year. These critics tend to focus on its perceived faults more than does the general public. Food Policy Conundrum There is great frustration on...
Indian Subcontinent Regional Analysis
GOI may not be able to procure the volume of ethanol required to meet its Ethanol Blending Program (EBP) mandate of a 10 percent blend in all gasoline used domestically. However, there is a potential solution. Potential Solution to EBP’s Ethanol Shortfall The government of India (GOI) may not b...
Indian Subcontinent Regional Analysis
As India’s inability to import non-GM corn from international markets continues, high input and low output prices as well as other issues over the past few months appear to have affected the profits of Indian end user industries, particularly poultry and starch. Goods and Services Tax (GST) – I...
Farm Policy Risk; Trade Policy Risk
With the increasing attention in Washington on income inequality, any focus in the future on what parts of agriculture have money and assets while concurrently receiving large subsidies will create a risk to that dynamic. Farm Subsidy Risk The last time agricultural commodity prices were this l...
Sweet is Sweet; Inequality
Although income inequality was heightened by the Great Recession and has statistically tempered, it remains a major policy concern. The outcome of research by McKinsey & Company about its cause will not please everyone. Sweet is Sweet McDonald’s, the world’s largest hamburger fast food chai...
Productivity; People; Marketing
Like Europe, U.S. use of inputs like fertilizer slowed as genetics and technology increased in their role in production. The difference is that U.S. agricultural productivity will see substantially differernt gains in the years ahead. Partial Productivity HFFA Research completed a study for the...
Bitter Labeling; U.S. Election and Economy
The recently enacted GMO labeling law may cause a bitter rift in one U.S. industry if USDA uses its discretion and determines that products containing sugar from a certain source must be labeled. Bitter over Labeling The recently enacted GMO labeling law may cause a bitter rift in the U.S. suga...
Indian Subcontinent Regional Analysis
India's sugar prices are expected to remain volatile as its area under sugarcane is down approximately 4 percent for 2016/17. Sugar is priced at $540/MT on the National Commodity and Derivatives Exchange (NCDEX), and the trade expects that imports could be triggered if it reaches $565-575/MT. S...
ARC Program in Search of New Yield Data
The American Soybean Association (ASA) just completed its July board meeting, and it is urging USDA to provide an administrative fix to the 2014 Farm Bill regarding the way payments are calculated under the Ag Risk Coverage (ARC) county-based payment program.The American Soybean Association (AS...
China Non-Market; SPS Cost; Cost of Non-GMO
The U.S. is hoping to negotiate with China on supply controls regarding steel and other products when the G-20 meets in September. Meanwhile, the EU says that China is not a market economy. It will have such status in the WTO, though. Non-Market Economy The U.S. is hoping to negotiate with Chin...
Middle East, Mediterranean and Africa Regional Analysis
13 African nations met in Tanzania to discuss ways of controlling aflatoxin, mainly with maize and groundnuts (peanuts). Much time was focused on the success of Aflasafe, which is said to reduce aflatoxin levels by a significant amount if applied correctly to croplands. Regional Updates MIDDLE...
Indian Subcontinent Regional Analysis
As India's domestic corn price remains higher than those on the world market, the country's 2016/17 corn tariff-rate quota (TRQ) of 500,000 MT was announced this week. However, one specific requirement limits the source to just one origin. Cotton Production Down in India Following the white fly...
Market Commentary
Yesterday’s post-report rally continued in overnight trading with grains and the soy complex all posting gains. That same pattern continued again during the day session with strength across the board until one market gave back most or all of its gains. General Comments Once again, it is all abo...
Free Trade in Ag
The Heritage Foundation, a free-market think tank in Washington, DC, released a paper yesterday, “Promoting Free Trade in Agriculture,” which is part of the run-up to the congressional consideration of the Trans-Pacific Partnership (TPP) and includes a number of recommendations.The Heritage Fou...
Veep Speculation: GOP and Democratic Selections Pending Soon
Speculation over who presumptive presidential nominees Donald Trump and Hillary Clinton will pick as running mates is heating up as their respective party-nominating conventions draw near.Speculation over who presumptive presidential nominees Donald Trump and Hillary Clinton will pick as runnin...
Indian Subcontinent Regional Analysis
India has decided to increase the blending rate of ethanol in gasoline to 22.5 percent. However, the big question pertains to how this ethanol will be sourced. Several factors prohibit the country from even reaching a 5 percent blend mandate in sugar year 2015/16. Pulses Prices to Rise as Indi...
Oilseed Highlights
The Canadian province with the fastest-growing soybean area in recent years has been Manitoba where it has expanded 103 percent since 2012. This has been made possible by two particular factors. Brazil's Revised Crop Estimates Today the Brazilian government’s crop supply agency (Conab) reduced...
Labeling Mess; Subsidizing Competitors; Trade Plan
Both the Vermont labeling law and the proposed federal labeling requirement pending in Congress are likely to lead to consumer confusion, but an equally bad mess may be starting in Europe. Legal Approach on GMO Labeling A consortium of agrifood associations contracted for a survey to assess the...
100 Years of Farm Bills
Although the new farm bill won’t be passed until 2018, a number of producer groups are already holding informal meetings in Washington, DC and elsewhere throughout the country in an attempt to find a new consensus approach to legislation that dates back 100 years.When policymakers and stakehold...
Oilseed Highlights
South Korea is reported to have sharply increased its imports of soybeans and soymeal in the first eight months of MY 2015/16 as those of two other oilseeds have declined. Last Week’s U.S. Soybean Export Inspections Impact Futures USDA’s export inspections report for last week, which was releas...
Points of Interest
As is usually the case at this point in the U.S. summer growing season and with USDA's June reports as well as the Fourth of July holiday now in the past, there are a number of not necessarily consistent factors swirling around to unsettle grain and soy markets.With USDA’s June acreage and quar...
30 June and 4 July
After being swept up in the geopolitical tsunami that resulted from the Brexit vote, grain and soy complex markets should return their focus to their own more specific market drivers as the next seven days are of more considerable, fundamental importance in determining price direction.After bei...
Indian Subcontinent Regional Analysis
India has a mandate to use up to 10 percent ethanol in gasoline and was expected to reach a 5 percent blend rate by September 2016, but that may be in jeopardy because of its bleak sugar situation. Sugar Production Down, Jeopardizing Ethanol Blending Program India is the second-largest producer...
Indian Subcontinent Regional Analysis
India's retail inflation reached a 21-month high of 5.76 percent in May 2016, largely fueled by protein demand, espcially for pulses. The expected good monsoon may slowly improve the situation, but GOI is also considering steps to control prices. GOI Boosts Pulses Imports and the Buffer Stock a...
Deadly Hyperbolism; Chem-Free Farming; Sugar Tax Failure
After a nearly three-year delay, the EU Commission has issued criteria for identifying endocrine disruptors. Significantly, the specific potency of the disruption will not be a consideration. Deadly Hyperbolism Commodity markets took it on the chin today, purportedly because big money funds shi...
House Ways and Means Committee Looks at Ag Trade
The recent U.S. ITC report on the TPP identified agriculture as one of the sectors that will benefit the most. The House Ways and Means Committee’s Subcommittee on Trade took political advantage of that positive news to promote the agreement today in a hearing.The recent U.S. International Trad...
Indian Subcontinent Regional Analysis
Farmers do not wish to grow soybeans in 2016/17 for many reasons, including low prices and a lack of good seeds as well as fear that the excessive rains forecast for September could be damaging during harvest. Rising Chickpea Prices Could Impact Inflation The chickpea (aka chana), one of the m...
Ag Review: The Global Livestock Industry
Issues Plaguing the Meat Industry From animal welfare to meat substitutes, the livestock sector faces many challenges. U.S. Meat Exports and the TPP The U.S. International Trade Commission’s (ITC’s) analysis of the Trans-Pacific Partnership (TPP) projects the biggest increase in U.S...
Oilseed Highlights
Although India expects to produce a larger soybean crop in 2016, its protein meal exports continued to drop in May as a lack of supply and high prices made its soymeal noncompetitive. Meanwhile, its high soybean prices are benefiting another country. India’s Protein Meal Exports Continue to Dec...
Ethanol: Exports Help Scale Blendwall
Through the first quarter of 2016, domestic ethanol use totaled 3.4864 billion gallons or 83.01 million barrels. Until higher blends can circumvent the blendwall, exports will be the only outlet for higher ethanol production, although they do not count toward the RVOs.USDA’s Economic Research S...
War on America; War on Salt; Subsidies to Pollute
The European Commission once again failed to achieve agreement by a qualified majority to provide a temporary extension for the approved use of glyphosate. Opposition is based on politics and not science War on America The European Commission once again failed to achieve agreement by a qualifie...
Commodities Back in the Lead
It’s far too early to say the bear market is dead. It is interesting, however, to watch how some of these commodity markets have exploded higher without any really disastrous supply-side news. A story in today’s Financial Times under the headline “Commodities beating global bonds and stocks in...
Sugar War; Mixed on Quotas; Other Briefs
Policy can have a great impact on markets, as shown by the current multi-prong attack on sugar. Some say this will be a huge benefit to artificial sweetener. War on Sugar Policy can have a great impact on markets, as shown by the current multi-prong attack on sugar. Labeling in the U.S. will re...
Indian Subcontinent Regional Analysis
The Cabinet Committee on Economic Affairs (CECA) has approved an increase in the Minimum Support Prices (MSPs) for all 2016/17 kharif crops. While pulses have been given a bonus for many years as an incentive, such payment is now also being extended to oilseeds this year. MSPs for Key Crops Inc...
Oilseed Highlights
A European environmental group, Transport & Environment (T&E), claims the EU biodiesel industry has sharply increased its usage of palm oil as a feedstock and is thereby contributing to rainforest destruction. Greens Attack EU Biodiesel Sector’s Use of Palm Oil A European environmental...
Indian Subcontinent Regional Analysis
India’s pulses demand is close to 24 MMT with current production stagnant at about 17-18 MMT, leading the country to be a net importer. Now Canada, Australia, the U.S. and even Myanmar are planning to expand their production to meet the rising demand as prices are also growing. Meanwhile, India...
U.S. AB Repeat; Unsustainable Demand; Xenophobes for the TPP
The EU reportedly described the U.S. effort at blocking an additional term for Korean Seung Wha Chang on the WTO Appellate Body as “unprecedented,” and Japan said it was “extraordinary” and “exceptional in nature.” Not so, according to Cato’s Daniel Pearson. U.S. Pattern at WTO AB The EU report...
AB Politics; Government Money; Exporter of Death
A draft EU-backed study of the Transatlantic Trade and Investment Partnership (TTIP) oddly concludes that the pact will actually raise the cost of food and promote unhealthy consumption because the cost of sugar, tobacco and alcohol will go down. Politics at AB The U.S. is being criticized for...
More Things to Keep You Up at Night
The U.S. hard red winter wheat crop is likely getting larger. Barring a wet weather pattern during the harvest period, the last issue is what the market can expect in terms of protein content. The U.S. hard red winter wheat crop is likely getting larger. Additional good, widespread rains combi...