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Le grand bond en arrière de Pékin sur le riz transgénique

Le grand bond en arrière de Pékin sur le riz transgénique | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |

Pékin prendrait-il ses distances avec les organismes génétiquement modifiés (OGM) ? Le ministère chinois de l'agriculture vient de refuser le renouvellement des certificats de biosécurité accordés en 2009 – à des fins expérimentales – à deux variétés de riz transgénique ainsi qu'à du maïs, et qui arrivaient à expiration le 17 août. Mettant a priori un coup d'arrêt à toute perspective future de commercialisation.

Aucune explication officielle n'a pour l'instant été fournie sur les raisons de cette décision. On connaît le dilemme chinois, et il est de taille : avec 7 % des terres arables de la planète, le pays doit nourrir 22 % de la population mondiale.

La Chine se retrouve ainsi contrainte d'examiner tous les moyens permettant de garantir sa sécurité alimentaire. Pékin investit donc des milliards dans la recherche sur les OGM afin d'améliorer les rendements des céréales. Mais le pays cherche aussi depuis 2012 à mieux encadrer leur utilisation.

Cette fermeté nouvelle a conduit à un conflit larvé avec les Etats-Unis, la Chine ayant bloqué ou annulé l'importation depuis 2013 de centaines de milliers de tonnes d'une variété de maïs transgénique américain au prétexte qu'il n'avait pas été inspecté.

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China is awash in grain crops

As the harvest looms next month, the country is on track for an 11th year of bumper grain crops. But production is too much, even for the world's most populous nation, with warehouses bursting at the seams and posing a dilemma for policy makers.

Estimates from state media say the government will be sitting on 150 million tons of grains that include three of the most important crops for China: rice, wheat and corn. That is double the 75 million tons last year and adds to an oversupply of these agricultural commodities that is pressuring prices lower.

"Chinese officials always talk about having a big harvest," said Fred Gale, an economist at the U.S. Department of Agriculture. "That sounds like a good thing, as they have been worried about supply keeping up with demand. But now, China seems to be struggling with surpluses of most of their commodities."

The glut of grains is being lauded in a country that grappled with acute food shortages and starvation as recently as a few decades ago. But China is paying far more than necessary to feed its people and it will be forced to sell down its surpluses into a global market already suffering from oversupply, potentially driving down prices further.

The situation has exposed China's inefficient and expensive government subsidy program aimed at keeping farmers' incomes up. The government is struggling with how to protect its rural residents while cutting production of these perishable commodities to save money and keep surpluses down.

The precise size and costs of the subsidy program are hard to come by. Official data show that China buys up one-third of corn production, while an estimate by state media said the government spent $36 billion in the last two years to buy up corn when the market price has fallen below a minimum floor.

"The stockpiles are absolutely ginormous, way out of line with anything that you could justify holding onto on any sort of commercial basis," said Thomas Pugh, an economist at Capital Economics in London. "These are perishable goods, so they will start to deteriorate."

He estimates China holds about 40% of the world's corn stocks. China plans to build storage facilities to hold 50 million metric tons more of grain by 2015 to cope with the excess, according to state media.

About 70% of China's corn consumption goes to feed for livestock as the country's appetite for meat rapidly rises, and the rest is processed into syrups or starches.

It is a particularly vexing problem for China this year, as crop production is also booming in the U.S. and dragging down prices there to near four-year lows, while Chinese prices have remained elevated because of the subsidies. That creates an incentive for Chinese traders to import corn from overseas, exacerbating China's already huge stockpile, said Jikun Huang, director of the government's Center for Chinese Agricultural Policy in Beijing.

The USDA forecast this month that U.S. corn production will exceed 14 billion bushels, far above last year's record harvest.

Corn on China's Dalian Commodity Exchange traded at around 2,390 yuan ($388) a ton as on Monday, compared with corn on the Chicago Board of Trade which traded at about 367 cents a bushel -- equivalent to about 890 yuan a ton.

China has tried to curb corn U.S. imports this year, citing the presence of genetically modified strains. But Mr. Huang says traders are getting around it by importing other feed substitutes such as barley and sorghum.

And ridding China of these huge stockpiles isn't easy.

A recent government auction of corn from Heilongjiang province held by the Chinese government went awry, with only a fifth of it sold at the price of 2,200 yuan a ton, "more than twice what U.S. feed mills are paying for corn right now," said the USDA's Mr. Gale.

The government has signaled that it recognizes the problem. State media have said the shortage of storage is a problem and Chinese Premier Li Keqiang has been photographed on visits to grain depots recently.

"In the past we have focused on expanding production and grain we need reforms for better buying, selling, and storage, to contribute to national security," Mr. Li is quoted as saying on the State Administration of Grain website.

China's surplus couldn't have come at a worse time for U.S. farmers, who are expected by the USDA to harvest a record 14 billion bushels. Corn futures have dropped 15% this year after falling 40% last year, and China's unwillingness to buy U.S. corn will further pressure prices, said Jason Britt, president of brokerage Central States Commodities Inc. in Kansas City, Mo.

"China's [lack of buying] has been a contributing factor in these lower prices," he said. "Now, the job of the market is to go down to a level where we find demand.

"It's amazing that China can overlook GMOs when stocks are tight, but when they're trying to protect their domestic farmers or they're in surplus, they can come up with things to mess with us--they're trade barriers, let's just call them what they are."

In January, the government said it would start trial programs in cotton and soybeans--two less-strategically important crops--to end stockpiling, and implement a target price system instead, first for cotton in Xinjiang and soybeans in the northeast, so that commodity prices are more market-driven.

The government will pay farmers the difference when the market price falls below the target price, but the government doesn't buy the commodity in the market to keep prices at a certain level. The idea is to set target prices for agricultural commodities at more market-based levels, which should in turn influence how much farmers decide to produce.

China is also in the process of unwinding its 10 million-ton cotton stockpile since late last year, which means China's appetite for cotton imports is likely to fall in coming years. That has hit cotton prices hard. In the U.S., cotton futures have fallen more than 20% this year.

"The government is moving in the right direction, step by step," said Cherry Zhang, a corn analyst at Shanghai JC Intelligence Co. "But much depends on how the changes for cotton and soybeans pan out in practice."

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Canadian Dollar Strengthens Amid M&A Activity Boost Bets

Canada’s dollar strengthened the most in almost a year as its U.S. counterpart weakened and traders speculated that the acquisition of coffee-shop chain Tim Hortons Inc. will increase demand for the local currency.

The loonie, as it is referred to because of the image of the waterfowl on the C$1 coin, was the biggest gainer among major currencies against the greenback. The Bloomberg Dollar Spot Index, which tracks the U.S. currency versus 10 leading global peers, fell after rising yesterday to the highest level since Feb. 3.

“We’re in a dynamic where the Canadian dollar should do well from the U.S. recovery and the U.S. dollar has lost its momentum a little bit,” Tom Fitzpatrick, Citigroup Inc.’s chief technical foreign-exchange strategist, said by telephone from New York. “There’s speculation about whether the Burger King purchase will result in the need for Canadian dollars.”

The loonie gained 0.8 percent to C$1.0865 per U.S. dollar as of 5 p.m. in Toronto, the biggest one-day increase since Sept. 6, 2013. One Canadian dollar buys 92.04 U.S. cents.

Fitzpatrick anticipates the loonie will outperform Group of 10 currencies including the dollar, euro and yen in the short-term, rising to as high as $1.0735 over the next week.

Burger King Worldwide Inc. has lined up $12.5 billion in financing to fund the cash portion of the acquisition. Currency traders are speculating Burger King will convert the funds to Canadian dollars to pay for Oakville, Ontario-based Tim Hortons, creating demand for the loonie.

Market Perception

“You don’t know whether the firm doing the acquisition is hedged, so you can’t really articulate what it means from the FX side,” Fitzpatrick said. “It’s actually people just speculating -- it’s not known whether it will be the case. It affects people’s perception about what supply and demand will be for the currency.”

The headquarters of the combined company will be in Canada, which has a lower tax rate than the U.S. The deal, which is still subject to the standard approvals, for Tim Hortons follows Valeant Pharmaceuticals International Inc.’s merger with Canada’s Biovail Corp. in 2010, which sparked the latest so-called tax-inversion wave.

The Canadian dollar slumped in March to C$1.1279, the weakest level since July 2009, after the Bank of Canada said it couldn’t rule out a interest-rate cut to head off the risk that low inflation would slip into deflation.

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Must-know: Why the all-important Baltic Dry Index is on a run-up

Must-know: Why the all-important Baltic Dry Index is on a run-up | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |

The Baltic Dry Index measures the cost of major raw materials that are transported by sea in the global economy. Indicating a strict demand-and-supply price situation, the lower the cost to move goods by ship, the lower the amount of goods to ship.

The Baltic Exchange Dry Bulk Index (or BDIY) is a composite of rates for different ship sizes. It factors in the average daily earnings of Capesize, Panamax, Supramax, and Handysize dry bulk transport vessels. Shipping rates have surged, with most vessel classes recording rate increases and brighter expectations for the coming months.

According to data from Clarkson’s derivatives brokerage, Capseize rates are estimated at $21,789 in 2014. This is 53% more than last year, and $28,000 in 2015.

How the Baltic Dry Tanker Index performs—especially its year-over-year growth—is one factor that has significant implications for companies like DryShips Inc. (DRYS), Diana Shipping Inc. (DSX), Navios Maritime Partners LP (NMM), Navios Maritime Holdings Inc. (NM), and Safe Bulkers Inc. (SB) as well as the Guggenheim Shipping ETF (SEA).

Recent run-up

Similar to last year’s trend in August 2013, the Baltic Dry Index surged in the first two weeks of August 2014. It was driven by an increase in iron ore production and exports from Australia and Brazil.

Last year, the Baltic Dry Index took off due to an increase in demand for cheap coal and iron ore. Analysts believe the same trend may be happening again. As the daily rate increases, dry bulk shippers are expected to come off contract and move to the more volatile and rewarding daily rate.

Meanwhile, Brazil is planning to double its ore output over the next five years. Miners are forecasting increases in production, which will bode well for shippers and increase the volume of dry bulk shipments. Similar to ships, these are big, long-lead-time projects that can’t be easily turned. They require a lot of room. If miners are committed to increasing production, this would be a positive signal to the dry bulk shipping industry.

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Bayer CropScience Plans 2015 Release of New Corn Herbicide DiFlexx

Research Triangle Park, NC (August 26) -- CropScience announces their plans to release a new broadleaf corn herbicide, DiFlexx™*. DiFlexx will offer growers flexibility for a broad range of application while also fitting a variety of soil and weather conditions. DiFlexx will be available to growers in 2015, pending regulatory approvals.

DiFlexx is a blend of dicamba and Crop Safety Innovation (CSI™) Safener technology, which enables corn plants to better withstand herbicidal activity, for excellent crop safety. With a liquid formulation, DiFlexx will have a wide window of application from burndown to V10. More importantly, DiFlexx will effectively target tough weeds like Palmer amaranth, lambsquarters and waterhemp while also targeting more than 100 annual and perennial weeds, including those resistant to glyphosate-, PPO-, and ALS-based herbicides.

"Bayer CropScience is excited to offer growers innovative solutions to help them control their most troublesome weeds," said Jeff Springsteen, Bayer CropScience US Product Manager. "Once commercialized, DiFlexx will offer growers the option to use an effective broadleaf herbicide from pre-plant burndown through post-emergence, improve overall plant health and ultimately increase yields."

DiFlexx with CSI™ Safener technology will work to improve soil and foliar uptake of plants. DiFlexx will also have the capability of being applied to all soil types making it applicable for silage, white corn, seed corn and popcorn crops. Additionally, DiFlexx can be safely combined with MSO (Methylated Seed Oil) or COC (Crop Oil Concentrate) for improved weed control as compared to non-safened dicamba.

When applied as a pre-emergence herbicide, DiFlexx will safen amide products applied in the same tankmix. When applied postemergence, DiFlexx can be tankmixed with other postemergence herbicides, such as Capreno® or Laudis®. Such a postemergence tankmix will provide an additional mode of action to further control herbicide-resistant weeds.

Jody Wynia, Bayer CropScience US corn marketing manager, added the benefit of DiFlexx will extend beyond weed control alone.

" Growers are encountering dicamba shortages at an increasing rate," Wynia explained. "DiFlexx will be a dicamba option, but with more crop safety than they find with other dicamba products."

* Registration pending. DiFlexx is not currently registered for sale or use in the United States.

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U.S. railcar crunch makes crop storage critical: CHS chief

Chicago | Reuters – The U.S. transportation network is inadequate to cope with bumper crops due to be harvested this season, creating a critical role for storage operations, the head of CHS Inc., a leading agricultural co-operative, said Friday.

Farmers, who had already struggled with a tight supply of railcars delivering fertilizer this spring, will need to put away some of their upcoming corn and soy harvests in storage bins due to continued competition with crude oil for space on the rails in the northern Plains, CHS CEO Carl Casale said in an interview.

The ability to transport grain is key for grain companies like Minnesota-based CHS, Archer Daniels Midland and Bunge because they sign deals to deliver crops to certain locations at certain times. That undertaking is set to become even more challenging this year because massive harvests will increase the demand for railcars and barges.

“There’s currently not the capacity to move this crop to market as it comes off,” Casale said.

The comments will fuel concerns that farmers will struggle to get their crops to customers after the U.S. Department of Agriculture, in a monthly report on Tuesday, projected the U.S. corn harvest at a record 14.032 billion bushels and the soybean harvest at a record 3.82 billion bushels.

Many analysts expect the government will increase its production estimates further in the coming months due to favorable crop weather.

“In the short term, storage is going to be the buffer that’s going to allow this crop to basically get in,” Casale said. “Physical supply chain management is where value is going to be created in grain, because that’s what the industry really, really needs right now.”

Commercial traffic on the Mississippi River, the main shipping waterway for grain moving from Midwest farms to export facilities at the Gulf of Mexico, already ran into trouble this summer when a section in Minnesota was shut for emergency dredging following floods.

In response to challenges on the rails and river, grain handlers are increasingly relying on trucks to move crops, Casale said.

The radius in which trucks are cost effective for moving grain has expanded because “everything else is either unavailable or has gotten a lot more expensive,” he added.

Aside from transportation troubles, falling grain prices are encouraging farmers to make plans to put crops in storage. Corn prices are down 13 per cent this year and 24 per cent from a year ago at about US$3.65 a bushel on the Chicago Board of Trade.

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Soybeans Slump to Lowest Price Since 2010 on U.S. Harvest

Soybeans extended a slide to the lowest price since September 2010 in Chicago on expectations that farmers will harvest a record crop in the U.S., the world’s biggest producer. Corn and wheat also declined.

Seventy percent of soybeans in the main growing areas were in good or excellent condition as of Aug. 24, the highest for this time of year since 1992, the U.S. Department of Agriculture said yesterday. The harvest may reach 3.816 billion bushels, boosting global inventories 28 percent to a record, the USDA estimates. As much as five times the normal rainfall in the past week has eased soil-moisture deficits in the Midwest, government data show.

“Soybean yields are growing with the rains during the past week,” Roy Huckabay, an executive vice president for The Linn Group in Chicago, said in a telephone interview. “The harvest is starting in the south,” increasing supplies available for processors and exporters, Huckabay said.

Soybeans futures for November delivery fell 0.1 percent to close at $10.28 a bushel at 1:15 p.m. on the Chicago Board of Trade, after touching $10.1975, the lowest for a most-active contract since Sept. 3, 2010.

Corn futures for December delivery declined 0.7 percent to $3.65 a bushel, dropping for a second day.

The USDA rated 73 percent of the domestic corn crop as good or excellent on Aug. 24, up from 72 percent the week before and 59 percent a year earlier. The agency estimates the harvest will be 14.032 billion bushels, the most ever.

Wheat futures for December delivery gained 0.4 percent to $5.565 a bushel in Chicago, after sliding 1.4 percent yesterday.

The condition of the spring wheat declined last week, the USDA said. After damaging rains from Montana to Minnesota, 66 percent of the crop was in good or excellent condition, the lowest for this season and down from 67 percent a year ago. Spring-wheat production may rise 7.1 percent to 572 million bushels this year, the government said Aug. 12.

“Too much rain has hurt yields and quality,” Joe Hofmeyer, a market analyst at CHS Hedging Inc. in Inver Grove Heights, Minnesota, said in a telephone interview. “We are still going to have a big U.S. spring-wheat crop. It’s just smaller than it was earlie

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USDA and the Ag War for Trade Policy Leadership

One of the provisions of the new farm bill is a requirement that USDA establish a new position of Under Secretary for Trade and Foreign Agricultural Affairs, which is to take the lead in a reorganization of the international trade functions within USDA. Further, the law requires the Secretary, in proposing the reorganization and creating the Under Secretary position, consider how the new post "would serve as a multi-agency coordinator of sanitary and phytosanitary issues and nontariff trade barriers" in agricultural trade.

While it is not clear just how all of the aspects of the new position and the reorganization will be developed, it is clear that this effort is a continuation of the decades-long fight between agricultural interests and the rest of government. In general, the aggies have long believed that the stripy pants guys at the State Department do not look after US ag interests well--and, they are not much more impressed with the performance of the US Trade Representative.

USDA has been involved in one or other aspects of this battle so long it is hard to remember when it did not have its own powerful Foreign Ag Service, which often resists the Department's efforts to impose budget and policy directions. FAS Ag Attaches were boosted in rank in the late 1970s to increase the visibility of their mission in a victory over the then-current embassy structure and a General Sales Manager has been added, along with several programs to boost exports. And, USDA personnel attached to USTR now play a number of important roles in trade negotiations. The recent Act clearly intends to boost those roles further.

At the same time, reorganizing USDA along trade lines would certainly be a messy business. For example, the Animal and Plant Health Inspection and Agricultural Marketing Services, which are under the Under Secretary for Marketing and Regulatory Programs, and the Food Safety and Inspection Service which report to the Under Secretary for Food Safety, all manage critical regulatory market functions as well as in trade matters. As the reorganization proceeds, it has the potential to affect many organizations.

The Secretary has 180 days from the date of the farm bill's enactment to report to Congress with a detailed proposal for reorganizing the trade functions. Given the number and depth of bureaucratic approvals required for a reorganization of this scope, that deadline seems highly optimistic.

So, there was considerable attention paid last week to the nomination of Janet Nuzum as Associate FAS administrator, responsible for overall trade policy coordination within USDA. She will, at least for now, report directly to the FAS administrator.

Nuzum is well known for her work on international trade policy as Vice Chairman of the US International Trade Administration and, earlier, on the staff of the House Ways and Means Committee's Trade Subcommittee. She also was the Committee's point person on farm bills and liaison with the agriculture committees--all valuable experience for her future role in trade negotiations.

It is not clear, however, how well her experience will qualify her for a role in what is seen by many as yet another inter-agency, intra-administration fight for prominence on trade issues. And, some observers believe her appointment will turn out to be an effort to undercut the Farm Act's requirement for a reorganization effort within USDA.

In fact, few would be surprised if the Nuzum appointment signals the start of a new home-grown US trade fight. Clearly, there is plenty of evidence that trade development has received very little attention by this administration, or by the Congress, for that matter. And, while a bitter intra-administration squabble probably would help no one, it might build a fire under USTR that could highlight some agricultural issues that appear to be languishing in the current negotiations, Washington Insider believes.

Source: DTN   

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KKR to Buy China Chicken Producer Stake for $400 Million

KKR & Co. (KKR), the private-equity firm led by billionaires Henry Kravis and George Roberts, agreed to acquire a minority stake in China’s largest chicken breeder and processor for about $400 million.

KKR will buy 18 percent of Fujian Sunner Development Co., the Chinese company said today in a statement. The companies will form a partnership to expand Fujian Sunner’s operations to provide meat that’s safe to eat, according to the statement.

Food quality has become a major concern in China in recent years following a string of incidents in which products were found to be tainted. Earlier this month, H.J Heinz recalled some batches of flour in the country after one was found to contain high levels of lead. In July, a recall of meat from a Shanghai unit of OSI Group LLC, a U.S. company, prompted McDonald’s Corp. to pull some items from its Chinese restaurants.

Fujian Sunner said it aims to ensure quality by controlling all stages of production, from farming to processing.

“Vertically integrated chicken farming is a key solution to the food safety threats facing China’s animal protein sector,” Julian Wolhardt, an executive at New York-based KKR, said in today’s statement.

China protein demand is booming as its middle class expands. The country accounts for 15 percent of global chicken demand, according to data compiled by Bloomberg, and most of that meat comes from small farmers and processors. Large-scale producers make up 30 percent of chicken supply, compared with 95 percent in the U.S., according to Fujian Sunner.

Bird Flu

Rising meat consumption and the desire for better food standards is attracting other foreign companies to China, such as Tyson Foods Inc., the biggest U.S. meat company, which is investing in chicken houses and processing plants. The spread of bird flu in China in the last year has reinforced the need for the kind of biosecurity measures Tyson uses at its operations, the company’s Chief Executive Officer Donnie Smith said last month.

China has also invested in foreign meat companies. Hong Kong-based WH Group Ltd. bought U.S. pork producer Smithfield Foods Inc. last year for $4.73 billion.

KKR, which oversaw $98 billion in assets as of June 30, manages a $6 billion fund making investments in Asia, the largest private-equity fund dedicated to the continent. The firm, founded in 1976, also manages a $1 billion fund that makes growth-equity investments in Chinese companies.

The firm has done at least two other deals in China this year: Investing in Cofco Meat Investment Co., a hog processing company, and Qingdao Haier Co., which sells consumer electronics and home appliances. KKR’s other China investments include China Cord Blood Corp., a blood-bank operator, and Novo Holdco Ltd., a clothing retailer. 

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Corn speculator position much bigger than it looks: Maguire

At just 517 contracts, the current net position held by fund managers and other large speculators in the corn market looks about as non-committal as it gets, and suggests non-commercial traders have very little exposure to corn in the run up to harvest.

But in actuality speculators are sitting on more than 1.5 billion bushels of corn on both the long and short sides of the market, which marks the largest balanced exposure held by the speculator community in more than 8 years.

This means that far from being uncommitted to corn, fund managers are actually deploying substantial positions in corn and are merely being counterbalanced by equal-sized holdings on the opposite side of the market. And this in turn suggests that once one side of the market eventually capitulates, they will have a substantial number of contracts to unwind before exiting the market completely that will likely have a strong impact on prices.


Grain market trackers are used to assessing speculative trader positioning on a net basis, interpreting net long exposure as reflective of a bullish view on the market and a net short stance as a bearish bias.

A net even position, such as that held currently by non-commercials, is widely viewed as indicative of a neutral market view, and is often portrayed by market commentators as if speculators have funds parked on the sidelines until a compelling opportunity arises.

Yet with more than 300,000 contracts deployed on both the long and short sides of the corn futures and options arena, speculative traders are already heavily committed to this market, and so have a strong vested interest in where prices head next.

Long-biased non-commercials have held their exposure to corn fairly steady for the last several weeks, straddling the 300,000 contract mark since early April.

Short-sided positions have shown much more movement, climbing from 100,000 lots in early April to more than 330,000 contracts in mid-August as the U.S. corn crop got planted and then flourished amid broadly non-threatening weather conditions.

The latest assessment of speculative trader positioning – released by the Commodity Futures Trading Commission in the weekly Commitments of Traders report – revealed that long positions in corn futures and options nosed to 315,126 contracts lately and their highest level since September 2012.

Meanwhile, short-sided positions showed their first weekly decline since May last week, shrinking from just over 330,000 contracts to 314,609 lots.

These gyrations have left the speculative net position nicely balanced with a modest skew to the upside.

But with more than 3 billion bushels of ownership in play, speculators are clearly anything but neutral in terms of their views and expectations for the market going forward.


Traders holding a short position in corn futures since April have been rewarded with a roughly 28 percent decline in corn prices to their lowest levels since mid-2010.

Broadly friendly weather conditions across the Midwest during the growing season fostered the development of what is expected to come in as the largest corn crop in history, leaving traders, producers and consumers alike concerned about the potential for fresh supplies to overwhelm storage and logistics infrastructure at harvest.

However, now that the lion’s share of growing season is complete, crop forecasters are starting to release yield estimates that are not quite as astronomical as many had expected, leaving some market trackers wondering if the high water mark has now been established in terms of crop size projections.

If that’s the case, some traders who have been sitting on short positions for the past several weeks will be inclined to unwind that exposure and take profits. Indeed, there is some evidence of that having already taken place in the latest accounting of fund positions.

If more traders start to buy into the notion that short positions should now be cut as the growing season winds down, corn prices may find support from the flow of buying tied to those traders buying back their previously sold contracts.

At the same time, long-biased traders are likely to take heart from the fact that widely tracked yield estimates are falling short of many projections just as the multi-year low price of corn boosts profitability for nearly all grain end users.

Should forthcoming yield revisions by the U.S. Department of Agriculture also come in slightly lower than the prevailing market consensus, bullish sentiment could well build momentum and trigger an additional flow of buying from the speculative community.

Naturally, many short-biased speculators will likely stick to their guns and may even expand their positions in the weeks ahead on the assumption that the onset of harvest will force prices even lower before the end of the year. In 2013, non-commercial short positions in corn continued to swell into November before contracting over the final weeks of the year.

But, with the current short stance up more than 200 percent since April to its second highest level ever for this time of year, speculative traders may view any additional upside room for short exposure as fairly limited, especially in light of the emerging uncertainty surrounding national yield estimates.

At the same time, with long positions still more than 30 percent smaller than the all-time peak of more than 470,000 contracts, bullish-biased traders may feel there is ample room for additional inflows of speculative interest before risking becoming frothy.

Either way, with longs and shorts sitting on positions in excess of 300,000 contracts, neither side is likely to sit by and watch prices move against them as if they were neutral observers. Instead, both sets of traders can be expected to decisively participate in the corn market going forward, even if it is only to unwind their current stance. 

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Soybean Buyers Seen by Oil World Shifting to U.S. Supply

Soybean exports from the U.S. are set to accelerate in the next few months as farmers harvest the biggest crop ever and stockpiles in competing shipper Brazil are “unusually low,” Oil World said.

U.S. soybean exports will climb to a record 46.3 million metric tons in the 2014-15 marketing season that starts Sept. 1 from 44.65 million tons a year earlier, the Hamburg-based researcher said in an e-mailed report. That compares with the U.S. Department of Agriculture’s estimate for U.S. exports at 45.59 million tons in 2014-15. Global soybean output will total 306.7 million tons, 1.1 million more than estimated in July.

“This year’s record U.S. soybean crop is likely to be disposed of quickly in the first four to six months of the new season,” Oil World said. “Brazilian stocks are currently unusually low and this will enforce declines in the country’s soybean exports and crushings in September-December 2014.”

Soybean prices have dropped 21 percent this year, falling to an almost four-year low of $10.24 a bushel today on the Chicago Board of Trade, as beneficial U.S. growing weather boosted oilseed and grain development. Oil World estimates U.S. soybean production at 103.85 million tons in 2014-15, in line with USDA’s forecast and 13 percent bigger than a year earlier.

Rising demand from importers and domestic crushers means stockpiles in Brazil, the second-biggest producer, may drop to 17.7 million tons as of Sept. 1, 1.8 million tons less than the “already low stocks a year ago,” Oil World said. Production in 2014-15 may climb 5.1 percent to 90 million tons, allowing stockpiles to rebound to 22.4 million tons by the end of the season, according to the report.

Argentina’s Production

Argentina’s production in 2014-15 may total 55 million tons, up from 54 million tons a year earlier, Oil World said. The country is facing “considerable uncertainty” amid an economic crisis, so farmers may reduce planting of costlier crops including corn amid a liquidity squeeze, Oil World said. Yields may also be affected for soybeans “considering that inputs are likely to be reduced,” according to the report.

China, the world’s biggest soybean consumer, will produce 11.8 million tons in 2014-15, down from 12 million tons a year earlier because of drought in some regions, Oil World said. The growth in the country’s soybean imports may still slow in 2014-15 as “quite significant soybean stocks were built in China during the past 10 months,” according to the report. 

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Indiana soybeans: SDS and brown stem rot

Sudden death syndrome, or SDS, has been observed in soybean fields in Indiana over the last week. The fungus that causes SDS, Fusarium virguliforme, infects soybean early, and symptoms are typically expressed later in the growing season. Many soybeans throughout Indiana emerged from wet soils this spring, and growers should be watching for symptoms of SDS in fields over the next few weeks.

Symptoms of SDS are expressed as interveinal yellowing and necrosis. Veins of symptomatic leaves will remain green. Leaflets will curl or shrivel and drop off with only the petiole remaining. The disease brown stem rot (BSR) has also been identified in Indiana. Foliar symptoms of this disease can resemble foliar symptoms of SDS and it is important to split the lower stem of symptomatic plants to determine which fungal disease is present.

BSR can cause internal stem browning, resulting in a dark brown discoloration of the pith at the lower nodes of the plant. The pith of plants affected by SDS will remain white, while the tissue below the epidermis will have brown to gray discoloration present.

SDS and BSR are diseases best managed through preventative methods. Producers are encouraged to plant varieties that are less susceptible to SDS and BSR in fields with a history of the disease. However, varieties that are resistant to SDS may not be resistant to BSR, so it is important to properly diagnose plants in each field. SDS is typically more problematic in early-planted soybeans, although if soil and weather conditions are favorable for infection, later planted soybeans are also at risk for disease development.

Other factors such as soil compaction and high soybean cyst nematode populations may increase severity and impact of these diseases. Foliar fungicide applications are not recommended for management of SDS or BSR.

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Rehedging With a 'Mammoth' Crop in the Field

Rehedging With a 'Mammoth' Crop in the Field
Ray Grabanski08/26/2014 @ 6:17am President, Progressive Ag

Pro Ag yield estimates keep rising, with our corn yield now nearing 174 bu/acre and soybeans 47 bu/acre, massive crops that will be decades before we shatter previous yield records by such a massive amount! The 2014 crop will go down as a massive crop of corn and soybeans, with ideal weather all year, and especially ideal as we finish out August and move into September, with warm and wet weather which is allowing crops to fill in unprecedented good weather.  

Weather has been nearly ideal, and is propelling this crop to higher and higher yield estimates by Pro Ag's yield models for corn and soybeans as it remains warmer than normal across the corn belt for the next 7 days, and intermittent rain showers continue to bless grain growers.  The next 7 days will bring .5-2", locally 3-4" rains across 85% of the corn belt, including the HRW wheat area and most of the Delta that will finish this crop with ample moisture nearly everywhere.  It will also remain warm and wet for the 8-14 day forecast as well, also perfect weather to finish off this mammoth crop with ideal conditions.           

Already, the Pro Farmer tour is outdated as the crop is improving rapidly now to finish off the season.  The crop conditions improved 1% in corn to 73% G/E yesterday and declined 1% in soybeans to 70% G/E, but the yield models in both crops continued to rise rapidly.  Corn is now the highest rated it has been since the massive crop of 1994, with soybeans the highest rated crop ever in 29 years. This is truly a mammoth crop! The Pro Ag corn yield model rose 2.3 bushels/acre to 173.8 bu/acre, with the soybean yield model rising 0.41 bu/acre to 47 bu/acre.  Its likely that this crop will not only shatter yield records, but will shatter them with a once in decades record!

The crop is also developing nicely, with corn now at 83% dough stage vs. 78% normally, and 35% dented vs. 43% normally.  Soybeans are slightly ahead of normal pace with 90% setting pods vs. 89% normally.  Cotton conditions rose 1% yesterday to 51% G/E, with development at normal levels at 19% bolls opening vs. 18% normally.  Sorghum conditions declined 1% to 58% G/E, with 86% headed (vs. 85% normally), 52% coloring (vs. 44% normally), and 34% mature (vs. 27% normally). Rice conditions were steady at 74% G/E, with 11% harvested vs. 17% normally.  

HRS wheat is only 27% harvested vs. 49% normally, with only 10% harvested last week during what was a wet week in HRS wheat country.  However, weather will be clearing most of this week, and its expected that harvest will be rapid.  HRS wheat conditions declined 2% to 66% G/E due to the rain delays in harvest this week.  Oats are 74% harvested vs. 86% normally. Barley is 43% harvested vs. 50% normally, with the rating dropping a large 6% to 56% G/E due to the rain delays and the quality damage that it can produce in barley.  

Overall, we have a mammoth corn and soybean crop on the way, with corn approaching 174 bu/acre and soybeans at 47 bu/acre and rising.  HRS wheat and barley are declining in conditions due to quality concerns, but the crop is also a good one if we can just get it harvested.   

We have rehedged all grains recently, remaining 100% hedged for multiple years as the trend is down and we are going to have record shattering, mammoth large yields of grains in 2014.  We may have to revise lower our objectives of expected lows under $9 soybeans and $3.30 corn during harvest.  In fact, the next targets are about $9.40 lows soybeans and $3.30 corn, but the targets becoming more likely to be hit are $8.40 soybeans and $3.05 corn for lows if we keep adding bushels to this year's crop, and frost stays away this fall until crop maturity.

They are surprisingly low prices we are forecasting at $8.40 Nov. soybeans and $3.05 Dec corn for the lows (likely around the January final crop report), but we need to take prices low enough to attract demand to get rid of this mammoth crop, and limit supply increases in 2015 with very low prices until spring planting is completed.  Its likely we will make multiple year lows (like for the next 3 years) this winter and into spring.  

It should be long, slow low formed after this massive crop, with corn and soybean prices likely to form a bowl bottom on the 3 year lows made this late fall/winter.  There will be plenty of time to buy it at or near the lows, as it could take 3 months or more to form the bottom.  There will be a lot of lamenting how low prices will get this coming year, especially among those who did not hedge heavily.  This will be a great time for buyers of grains to buy up multiple years of grain sometime from January to April 2015.  

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Grain Piles Up, Waiting for a Ride, as Trains Move North Dakota Oil

Grain Piles Up, Waiting for a Ride, as Trains Move North Dakota Oil | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |

FARGO, N.D. — The furious pace of energy exploration in North Dakota is creating a crisis for farmers whose grain shipments have been held up by a vast new movement of oil by rail, leading to millions of dollars in agricultural losses and slower production for breakfast cereal giants like General Mills.

The backlog is only going to get worse, farmers said, as they prepared this week for what is expected to be a record crop of wheat and soybeans.

“If we can’t get this stuff out soon, a lot of it is simply going to go on the ground and rot,” said Bill Hejl, who grows soybeans, wheat and sugar beets in the town of Casselton, about 20 miles west of here.

Although the energy boom in North Dakota has led to a 2.8 percent unemployment rate, the lowest in the nation, the downside has been harder times for farmers who have long been mainstays of the state’s economy. Agriculture was North Dakota’s No. 1 industry for decades, representing a quarter of its economic base, but recent statistics show that oil and gas have become the biggest contributors to the state’s gross domestic product.

Railroads have long been the backbone of North Dakota’s transportation system and the most dependable way for farmers to move crops — to ports in Portland, Ore., Seattle and Vancouver, from which the bulk of the grain is shipped across the Pacific to Asia; and to East Coast ports like Albany, from which it is shipped to Europe.

But reports the railroads filed with the federal government show that for the week that ended Aug. 22, the Burlington Northern Santa Fe Railway — North Dakota’s largest railroad, owned by the billionaire Warren E. Buffett — had a backlog of 1,336 rail cars waiting to ship grain and other products. Another railroad, Canadian Pacific, had a backlog of nearly 1,000 cars.

For farmers, the delays often mean canceled orders from food giants that cannot wait weeks or months for the grain they need to make cereal, bread and an array of other products. “They need to get this problem fixed,” Mr. Hejl said. “I’m losing money, and my customers are turning to other sources as a result. I don’t know how much longer we can survive like this.”

This month, federal Agriculture Department officials said they were particularly concerned that Canadian Pacific would not be able to fulfill nearly 30,000 requests from farmers and others for rail cars before October. As a result, North Dakota’s congressional delegation and lawmakers in Minnesota and South Dakota have called on the Surface Transportation Board, which oversees the nation’s railroads, to step up pressure on the companies.

“This rail backlog is a national problem,” Senator Heidi Heitkamp, Democrat of North Dakota, said in an interview. “The inability of farmers to get these grains to market is not only a problem for agriculture, but for companies that produce cereals, breads and other goods.”

A recent study conducted by North Dakota State University at Ms. Heitkamp’s request found that rail congestion could cost farmers in the state more than $160 million because a local oversupply of grain has lowered prices.

The study also found that farmers would lose $67 million in revenue from wheat, corn and soybeans from January to mid-April. Around $95 million more in losses are expected if farmers are unable to move their remaining inventory of crops.

The study was done before the current harvest, which is forecast at a record 273 million bushels of wheat, up from 235 million bushels in 2013. This year’s soybean harvest is also expected to be a record, and corn will be a near-record.

Food companies say they are feeling the effects of the delayed shipments. General Mills, the Minnesota-based maker of Cheerios, told investors in March that it had lost 62 days of production — as much as 4 percent of its output — in the quarter that ended in February because of winter logistics problems, including rail-car congestion. In its earnings report this month, Cargill, another Minnesota-based food giant, reported a drop in net earnings that it attributed in part to “higher costs related to rail-car shortages.”

Farmers and agriculture groups say rail operators are clearly favoring the more lucrative transport of oil. Rail shipments of crude oil in North Dakota have surged since 2008, and the state now produces about a million barrels a day. About 60 percent of that oil travels by train from the Bakken oil fields in the western part of the state to faraway oil refiners. There are few pipelines to ship it.

Oil seems to be pushing us off the trains,” said Bob Sinner, a farmer and the brother of a Democratic congressional candidate, George Sinner, who is running against the state’s lone House member, Representative Kevin Cramer, a Republican. George Sinner has called on the Surface Transportation Board to use its emergency powers to address the rail-car shortage — the board could allow shippers to move their products with the help of a different carrier, for example. But Dennis Watson, a spokesman for the board, said it rarely invoked its emergency powers and preferred to work with rail carriers to solve problems.

B.N.S.F. and Canadian Pacific maintain that their oil shipments have not replaced shipments of crops.

“Of course, the big difference in what we are shipping these days is oil,” said Matthew K. Rose, the executive chairman of B.N.S.F. “But we aren’t favoring one type of product over another.”

Nonetheless, B.N.S.F. is investing about $400 million in North Dakota, in part to build additional tracks, hire new staff members and add rail cars. “We understand the frustration of our customers,” Mr. Rose said. “We’re making this investment in our infrastructure to make sure that we get things back to normal.”

Doug Goehring, the state’s agriculture commissioner, is not optimistic so far. “I know that B.N.S.F. especially is trying, but I just don’t see that it’s going to be any better this year,” he said. “We’re expecting record crop yields, and I expect we will see more of the same with shipments lagging.”

Canadian Pacific officials said they were working with farmers to clear the backlog. But in a letter to Ms. Heitkamp, E. Hunter Harrison, the railroad’s chief executive, argued that many of the delays stemmed from what he called phantom requests — farmers’ ordering more rail cars than they need to ship products. As a result, Mr. Harrison said, cars are not available for farmers who have more immediate shipping needs.

The letter prompted an angry response from Ms. Heitkamp and state officials like Mr. Goehring. “With C.P., it’s everybody’s fault but theirs,” Mr. Goehring said.

Both railroads said some of the blame for the slowed traffic lay with one of the coldest winters in years and with an increase in shipments of all types of products as a result of an improving economy.

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Heavy biased hogs

Lean Hog (CME:HEV14) Fundamental Support: There is still a pretty heavy bearish bias in this market. We still have yet to stop the losses in cash hogs or pork. There is still an expectation that demand after the holiday will be a problem. Friday’s Cold Storage report indicated July pork demand may have been a little less than previously expected.

Like cattle, the issue here is not that prices need to go lower. It is that futures have taken this to the “nth” degree. Demand has fallen from earlier this year, but it is still pretty good. Pork production is still running below last year. Why are October futures only holding a $2 premium over last year’s settlement?

Live Cattle (CME:LEV14 Fundamental Support: Though Friday Cattle on Feed and Cold Storage reports held bearish implications, futures traded $1 higher today. The COF report indicated that we did not even meet the low Marketing number that analysts were expecting. That would imply there are more market ready numbers available in August and September. That bearish news seemed to coincide with this afternoon’s finding that showlists grew by 14,000 head in the latest week. The bigger numbers were found in Nebraska and Colorado. Slightly smaller numbers were reported in the South. We are in the process of repairing the sharply low levels from July. Last week saw a moderate jump over the past five weeks. This week will be the same.

In the big picture, we would not say that today’s higher trade was any rejection of Friday’s bearish reports. It is likely that most of the trade fully believes these numbers. The issue in this cattle market is not one of whether prices were going down, it was at what price will the bottom be seen? As noted last week, our position is that live cattle futures are undervalued. Sure, in the short term cash cattle could drop to the $148 area (two weeks from now). By the end of the year we can see $155 again.

One interesting point about today’s rally was that it was led by feeders. Where bears can make a valid short term bearish argument for live cattle it is hard to make the same case for feeders other than “…they are high priced”. From a supply and demand perspective, this is a market which still has strong backing. We are now getting questions in the office about lifting those hedges applied last month (bear put spread). It would appear we are ready to stabilize futures. For those who do lift hedges we would suggest to put them back on below last week’s lows.

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No Monsanto, No Problem for Syngenta: Real M&A

Syngenta and Monsanto held preliminary talks with advisers earlier this year about a combination that never came to fruition, people familiar with the matter have said. Syngenta’s willingness to have such conversations signals it’s open to a deal, whether as an acquirer or as a target, according toshareholder Wintergreen Advisers LLC. With shares down 9.5 percent in the last 12 months amid slowing revenue growth, Berenberg Bank said an acquisition could help the crop chemicals company improve its prospects.

One option for $34 billion Syngenta is a takeover of Dow Chemical Co. (DOW)’s agricultural business, said Alembic Global Advisors and SunTrust Banks Inc. Dow Chief Executive Officer Andrew Liveris has suggested the company is open to divesting that unit. DuPont Co. (DD) and Basel, Switzerland-based Syngenta could also merge and then spin off the U.S. company’s non-agricultural businesses, said Zuercher Kantonalbank.

“The last couple of months weren’t that pleasing for shareholders,” Martin Lehmann, co-manager of 3v Asset Management’s 3v Invest Swiss Small & Mid Cap Fund, which owns shares of Syngenta, said in a phone interview from Zurich. “Management is under pressure to do something smart, and that’s not a bad thing.”

A representative for Syngenta said the company doesn’t comment on speculation. Representatives for Midland, Michigan-based Dow and Wilmington, Delaware-based DuPont declined to comment.

Multiple Partners

“There are a lot of ways to win here,” David Winters, CEO at Wintergreen, which oversees about $2.2 billion, including Syngenta shares, said in a phone interview. “They’ve tipped their hand that they’re willing to do something. Who they end up doing the dance with and mating with, we’ll see but they’re clearly at the dance.”

Monsanto (MON), a $61 billion U.S. seed company, explored a takeover of Syngenta earlier this year that would have allowed it to move its legal address overseas for tax advantages, according to people familiar with the matter in June. The talks fizzled amid questions about strategic fit, antitrust issues and the relocation to Switzerland, the people said, asking not to be identified because the talks were private.

Monsanto later announced a $10 billion stock buyback, a move that Matt Arnold of Edward Jones & Co. says reduces the company’s financial flexibility.

Moving On

“The fact that maybe it didn’t happen with Monsanto doesn’t mean it couldn’t happen with someone else,” Bill Selesky of Argus Research Co., a New York-based analyst, said by phone. “It’s a very positive sign that they’re willing to sit down and talk and listen and possibly hammer out a deal. I wouldn’t rule out somewhere down the road that Dow or DuPont could buy Syngenta.”

While both companies may find a deal appealing, DuPont would probably be a better fit, Selesky said. Its seed business is bigger than Dow’s and has more brand recognition, he said.

A merger of $60 billion DuPont and Syngenta would create a balanced portfolio, split almost evenly between crop chemicals and seeds, a novelty in an industry where most companies focus on one or the other, Martin Schreiber, an analyst at Zuercher Kantonalbank in Zurich, wrote in an e-mail. If the two companies joined, DuPont could then spin off its non-agricultural operations and become a pure-play agricultural science company, he said.

Better Taxes

On the other hand, Dow may be a better candidate to use a Syngenta acquisition to relocate overseas for tax advantages, said James Sheehan, an analyst at SunTrust. With the Treasury Department weighing ways to discourage tax-inversion acquisitions, DuPont’s well-known brands and sales to the U.S. military may spark greater political pushback, he said.

“DuPont is likely to take a very cautious approach toward this issue,” Sheehan said in a phone interview from Atlanta. “Dow has a little bit more flexibility.”

Rather than sell itself, Syngenta could go on the prowl for acquisitions of its own, said John Klein, a London-based analyst at Berenberg.

Shareholders are getting impatient as a corporate realignment three years ago hasn’t yet delivered the desired results, Klein said. Syngenta’s 2013 profit fell short of analysts’ estimates and sales that year grew at the slowest pace since 2009.

“If they want to kickstart growth, they should make an acquisition,” Klein of Berenberg said by phone.

The 9.5 percent drop in Syngenta shares the last 12 months compares with a 19 gain for Monsanto and a 16 percent rise for DuPont. Dow has climbed more than 40 percent.

Dow’s Situation

For Dow, selling its agricultural business may be a way to unlock value as activist investor Dan Loeb pressures the company to improve profitability, Sheehan of SunTrust said.

The $64 billion company is already planning to divest as much as $6 billion of low-return assets. Reuters reported yesterday that Dow is in the process of selling two of its speciality chemicals subsidiaries, which could get a combined $2 billion.

When asked about a possible deal for the agricultural division in July, Dow CEO Liveris said “there are no sacred cows.”

That unit and Syngenta share similarities that would unlock value if they were combined, Hassan Ahmed, co-founder of Alembic Global Advisors, said in a phone interview. “A Dow agriculture business and Syngenta marriage could actually result in significantly higher synergies than a Syngenta marriage with a more seed-oriented company such as DuPont’s agriculture business or Monsanto for that matter.”

Mark Gulley of BGC Partners Inc. estimated the unit, known as AgroSciences, could be valued at about $12 billion in a sale.

Alternative Ideas

Syngenta may be more inclined to make smaller acquisitions, said Patrick Rafaisz, an analyst at Bank Vontobel AG in Zurich.

“Syngenta is in acquisition mode, but targets are usually seed companies and bolt-on in nature,” Rafaisz wrote in an e-mail. A large deal, especially with a crop chemicals company, may not add value for shareholders and could distract management when the focus should be on managing costs and pressing ahead with its existing strategy, he said.

While Ahmed of Alembic says DuPont and Dow may be more focused on slimming down than bulking up, Winters sees the possibility of some sort of deal in Syngenta’s future.

“They’re probably willing to buy, they’re probably willing to sell,” he said. “Either way, that’s why we own the stock because we feel like it’s heads we win, tails we could win bigger.”

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          The Chart of the Day belongs to TransCanada Pipelines (TRP).  I found the stock by sorting the New High List for technical buy signals then used the Flipchart feature o review the charts.  Since the Trend Spotter signaled a buy on 8/14 the stock gained 3.79%.

TransCanada is a North American energy company. They are focused on natural gas transmission and power services. Their pipeline transports the majority of Western Canada's natural gas production to growing markets in Canada and the United States.

Barchart's Opinion trading systems are listed below. Please note that the Barchart Opinion indicators are updated live during the session every 10 minutes and can therefore change during the day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the web site when you read this report.

Barchart technical indicators:

  • 100% Barchart technical buy signals
  • Trend Spotter buy signal
  • Above its 20, 50 and 10 day moving averages
  • 4 new highs and up 1.84% in the last month
  • Relative Strength Index 68.08%
  • Barchart computes a technical support level at 51.50
  • Recently traded at 52.64 with a 50 day moving average of 49.66
Fundamental factors:
  • Market Cap $37.27 billion
  • P/E 24.35
  • Dividend yield 3.46%
  • Revenue expected to grow 17.40% this year and another 2.50% next year
  • Earnings estimated to increase 4.50% this year, an additional 9.40% next year and continue to increase at an annual rate of 14.75% for the next 5 years
  • Wall Street analysts issued 1 buy and 3 hold recommendations on the stock
This is a total return stock, keep till the total return is negative.
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French wheat returns to Egyptian tender

France showed it retained firepower in wheat export markets, despite merchant "panic" instilled by rain damage to quality, even as it lost out on the latest tender by Egypt, the world's top importer of the grain.

Egypt's Gasc grain authority, at its fifth tender of 2014-15, purchased 175,000 tonnes of wheat, mainly from Russia, but with 60,000 tonnes bought from Romania.

Expectations for Russia's grain exports have risen with harvest expectations, with the country's farm ministry on Tuesday raising to 27.5m-30m tonnes its forecast for shipments this season, from a previous estimate of 25m-27m tonnes.

In July, Russia exported a record 3.2m tonnes of grain, including 2.7m tonnes of wheat.

French offers

However, French wheat � signally absent at the previous two tenders � was also offered, and at prices, excluding freight, not far above the winning lots.

Soufflet offered French wheat at $249.47 a tonne, just $0.56 a tonne above a winning Russian wheat bid by Bunge, although lower shipping costs from the Black Sea to Egypt also favour the former Soviet Union country.

Three further cargos of wheat from France, the European Union's top producer and exporter of the grain, were tendered too.

The offers came despite concerns over the availability of French milling wheat after a harvest marred by late rains, sparking ideas that only one-third of the crop would be fit for meeting specifications demand by major importers.

'Certain element of panic'

Indeed, traders at a major European commodities house identified a "certain element of panic amongst French shippers and merchants", which have imported better-quality wheat in an effort to beef up the quality domestic supplies.

"Further evidence of the chaos in France was seen when a large cargo of Lithuanian milling wheat turned up to discharge in Rouen, presumably to be blended with poorer quality French wheat before being re-exported," the traders said,

"The French even bought two small cargoes of UK soft wheat, although it is difficult to understand what use they might have for it and it is by no means certain that they will take any more."

Import restrictions

The potential for French merchants selling wheat blended from multiple origins prompted Algeria's OAIC grain authority, which has stringent import criteria, at the weekend to caution against mixing grains.

"Any mixture of wheat detected ... will force us to reject shipments on one hand but also to permanently eliminate suppliers concerned," the OAIC said in a letter sent to trading houses.

Gasc's specifications state that the port where wheat is loaded "should be in the same country of the origin of the goods".

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Novozymes and Monsanto Showcase New Microbial Innovations

Huxley, IA (August 27, 2014) -- Novozymes and Monsanto Company leaders this week highlighted how the companies’ BioAg Alliance is working to develop innovations for agriculture to boost productivity and further support the management of natural resources on the farm. The Alliance is expected to expand the research and commercialization of a new generation of microbials to help farmers meet the world’s demands for food and feed in a sustainable way. This year, the companies conducted research across 170,000 field trial plots in 70 locations throughout the United States, and the companies expect to more than double the number of research field plots next season.

“The early results from 2013 showed a lot of promise – we discovered several microbes that are demonstrating increased yield in corn and soybeans. We have expanded testing this year and believe we are on track to discover transformational microbial products farmers can add to their toolbox,” says Robb Fraley, executive vice president and chief technology officer, Monsanto.

Microbial-based solutions are derived from various microbes such as bacteria and fungi. The BioAg Alliance is researching the next generation of these solutions, and has already introduced two types of microbial products: inoculants products, which help plants take up nutrients, and biocontrol products, which help protect plants against pests, disease and weeds. The products can be utilized by farmers that grow broad acre crops such as corn and soy, and on fruits and vegetables.

“Microbials have a significant potential to transform modern agriculture and help meet growing global demand for food. The goal of The BioAg Alliance is to bring cutting-edge innovation in microbials to farmers, so they can produce more crops with fewer inputs,” says Thomas Videbæk, executive vice president for business development, Novozymes.

Microbials make up about two-thirds of the agricultural biologicals industry today, and build on the successful application of microbes in everything from personal healthcare to food processing and production. Today, microbials such as Rhizobium offer farmers ways to replace or complement traditional fertilizers, while Bacillus thuringiensis (Bt) sprays continue to be used in organic and conventional agriculture.

Novozymes and Monsanto formed The BioAg Alliance in February 2014. The Alliance brings together Novozymes’ capabilities for discovering, developing, and producing microbes and Monsanto’s discovery capabilities, field testing, and market reach.

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CME: Results of Statistic Canada's Cattle, Hog Surveys

US - Statistics Canada released the results of its semi-annual surveys of cattle and hog producers and the numbers offer little optimism in terms of a quick recovery in North American livestock supplies, write Steve Meyer and Len Steiner.

Before we look at the highlights from these two important reports, keep in mind that StatCan has discontinued its quarterly hog surveys and now only measures the hog inventory numbers as of 1 January and 1 July.

The Canadian 1 July cattle inventory was pegged t 13.330 million head, down 1.4 per cent from the previous year and now 21 per cent lower from the last inventory peak in 2005. Coming into the report, there had been some hope that higher cattle prices in North America, lower grain prices and improving pasture conditions would help bolster inventory numbers but, so far, that has not been the case.

Indeed, Canadian producers had shown some willingness in rebuilding the herd, holding back more heifers in 2011, 2012 and 2013. With more heifers coming into the herd the decline in beef cow numbers appeared to have bottomed out. Beef cow inventories increased slightly in 2012 and then again in 2013.

This year, however, despite excellent feeder prices and a strong profit outlook, cow-calf producers took a step back and the beef cow inventory declined. With record cow and grinding beef prices, it is likely some producers saw this as an opportunity to sell high.

After all, it is difficult to pass on all time record high cow prices simply because of the hope of good profits down the road. This is the challenge that the beef industry faces today in North America. Consumers are clamoring for beef, leading to all time record high prices and, somewhat perversely, pushing some producers to sell some of the cows and calves they have.

This is especially the case for those part time producers who look at the cows as a asset that has appreciated significantly - when that happens you sell and diversify. The number of heifers held back for herd rebuilding was pegged at 616,200 head, down about 22,300 head (-3.5 per cent) comparted to year ago levels.

Some of those heifers likely have moved south to the US, with the strong US dollar adding to their value. According to USDA data, imports of Canadian breeding female cattle through second week of August were about 16,160 head, up by some 10,235 head (+172 per cent) compared to a year ago. Feeder cattle imports from Canada also have increased by almost 66,000 head so far this year, a 39 per cent increase compared to year ago levels.

The low Canadian cattle inventories and particularly the decline in the breeding herd points to limited beef supplies in the North America for the foreseeable future. The survey did not provide an estimate for the calf crop in Canada for 2014 but we expect the calf crop to continue to decline, reflecting the lower breeding stock numbers.

The Canadian calf crop was 4.888 million head in 2009. By 2013 it had declined to 4.516 million head, a 7 per cent decline in five years and we could see the crop down another 1 to 1.5 per cent in 2014. The lower calf crop and strong demand for feeders and breeding animals in the US will continue to make it challenging to rebuild cattle numbers in Canada for the next few years.

Mid-year hog inventories in Canada were pegged at 12.935 million head, 1.3 per cent higher than the previous year. Similar to the US, Canadian producers have struggled with the effects of PEDv although the impact of the disease has not been as devastating as it has beef for US producers.

The pig crop was pegged at 13.439 million head, down 3 per cent compared to year ago levels. USDA, on the other hand, pegged the 1 June pig crop down 5 per cent compared to a year ago. Different from the US, Canadian producers are slowly adding to the breeding herd.

As of 1 July 2014, the number of hogs kept for breeding pas reported at 1.222 million head, about 0.7 per cent higher than the previous year. A larger breeding herd and a modest recovery in the number of pigs per litter (depending on how PEDv develops later this year) should help bolster hog supplies in 2015. In the short term, however, the lower pig crop numbers imply that overall hog supply growth will continue to be constrained in the short term.

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Trimble Announces NextSwath End Of Row Turn Technology

Trimble Announces NextSwath End Of Row Turn Technology

Trimble announced it is conducting live demonstrations of its cutting-edge NextSwath end of row turn technology at the Farm Progress Show in Boone, IA. Trimble’s NextSwath with implement compensation technology enables any farm machine — regardless of machine type, implement type or manufacturer — to calculate the best possible path to turn around and approach the next crop row or swath.

By optimizing the turn for the implement, NextSwath technology can eliminate towed implement undershooting or overshooting, and minimize skips and overlaps when lining up for the next row. This improved turning efficiency and repeatability can increase yield while also saving time and fuel costs. NextSwath demonstrates Trimble’s continued leadership in next generation machine and implement guidance.

“The implement is actually doing the work in the soil, so we’ve made it the focal point for the turn. With NextSwath technology, we’re turning the tractor in a path that is more precise for the implement to begin working — which is what operators really care most about,” said Erik Ehn, Smart Machines business area director of Trimble’s Agriculture Division. “We’re able to avoid unnecessary driving, overshooting and compensating the tractor to get the implement on line for the next row.”

When approaching the end of a crop row, the system will determine the NextSwath end of row sequence. Once engaged, NextSwath will automatically enable the vehicle to make the most efficient turn in order to align it and the implement to the beginning of the next row or swath. This saves time in the field, increases machine efficiency and improves productivity since the operator does not need to manually re-align to the next row.

The ability to make tighter end of row turns with pull-type implements can also reduce the headland space needed at the end of the field for turning machines. In addition to the onboard automation, farm managers can use the equipment utilization functionality in Connected Farm to observe and measure the efficiencies gained by automating the end of row turns.

GPS Ontario is Currently on Route to the Farm Progress Show in Boone Iowa to See this Amazing technology in Action.  Pictures and Videos to Follow Shortly

Prices and Availability to be announced at a Later Date,

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Fred Evans : August 26, 2014 - AM Grain Comment

August 26, 2014 - AM Comment


Crop ratings remain strong with Corn at 73% gd to ex and soys falling 1 point to 70%.  Very impressive for this time of year and discouraging to the market bulls.  The funds continued their liquidation again yesterday in all three grain pits.  Approaching first notice day continues to pressure the nearbys, especially the Sep soys which are currently down 21 cents while the Novs are down only four.  Sep corn is off two cents while the Dec is down one half.  Dec wheat is off only one quarter cent.  The Canadian dollar is up .0017 at .9118.


Fred Evans
HDC Grain Marketer 
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Oil World Raises Oilseed Crop Forecast as Surplus Remains

Global production of seven major oilseeds will be larger than forecast last month as consumption is set to lag behind output for a third year, Oil World said.

Combined production of oilseeds including soybeans, rapeseed and sunflower will reach a record 507.2 million metric tons, 2.2 million tons higher than forecast five weeks ago and 18.1 million tons more than the previous all-time high last year, the Hamburg-based researcher said in an e-mailed report. The third consecutive surplus will leave stockpiles at the end of 2014-15 at 99.6 million tons, 18 percent more than a year earlier.

“The most outstanding increase in oilseed production is set to occur in the U.S.A., where excellent weather conditions are seen resulting in record yields per hectare not only in soybeans but also corn,” Oil World said. “A record oilseed crop has also been grown in the European Union this year.”

Soybean production globally may rise to 306.7 million tons, up from 284.6 million tons in the prior season, with the U.S. crop, the world’s biggest, accounting for 103.85 million tons, according to the report. Futures fell 21 percent this year on the Chicago Board of Trade.

Global production of rapeseed and canola will decline to 68.7 million tons from 69.7 million tons, Oil World said. The harvest in Canada, the top exporter, is expected to decrease 20 percent from the prior year to 14.4 million tons, still bigger than Statistics Canada’s forecast last week of 13.9 million tons, according to the report. EU output will reach a record 23.54 million tons from 21.25 million tons a year earlier amid increasing harvests in Germany, France, Poland and the U.K.

Rapeseed Futures

Rapeseed traded in Paris dropped 12 percent this year, with futures coming “under considerable pressure, partly due to spillover weakness from soybeans as well as from vegetable oils,” Oil World said. “Farmers have become reserved sellers in Europe and Canada. We expect only little additional downward potential, but rather see rapeseed prices building a bottom.”

Sunflower seed production globally may total 41.59 million tons, about 1.2 million tons higher than previously expected, while still 2.1 percent smaller than the past season’s harvest, Oil World said. Combined output in Ukraine and Russia, the top two exporters, will be 20.7 million tons, near the record 21.05 million tons achieved in 2013-14. The EU’s harvest will total 8.2 million tons, bigger than previously expected while below last year’s output at 8.86 million.

Oil World’s combined figure for oilseed production takes into account seven crops, including groundnuts, or peanuts, palm kernels, cottonseed and copra, or coconut kernels.

“Groundnut prices are probably on the verge of appreciating significantly” because of smaller crops in China and India, the biggest producers, Oil World said. India’s groundnut plantings as of Aug. 21 were 14 percent smaller than a year earlier on “scanty rainfall.” In China, dry weather may cut the area by more than 20 percent, it said. 

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Sudden Death Syndrome Popping Up In Midwest Soybeans

The ample moisture in the last week or so in parts of the Corn Belt has been a boon for the corn and soybean crops rounding the final turn and into the homestretch toward fall harvest.

But, for soybeans, it’s also causing some disease pressures to tighten, namely Sudden Death Syndrome (SDS). Some farmers say they’re seeing the disease pop up and say yield potential could be starting to get trimmed by SDS.

“Everywhere. Probably less than 10% of the fields don't have at least a few spots showing. A few fields are a week from it taking the whole field,” says Marketing Talk veteran advisor Mizzou_Tiger. “Definitely bad and came in early enough to thump yield. We even have it in 2 varieties that have almost perfect SDS scores. Granted, the area effected is much smaller in those fields compared to 2 other numbers. But it’s still there, which is scary.”

Adds Marketing Talk senior contributor hanktbd: “Nearly every field has some here and a few are getting pretty severe. Not sure how much of a yield hit, as it has never been more than a minor problem in this area until now.”

The disease’s flare-up has been fueled by ample rainfall, and it’s especially problematic in areas where that rain’s been accompanied by generally overcast conditions and a lack of sunshine, conditions that are perfect for SDS, experts say. And, it goes back well before hot, soggy conditions developed in the Corn Belt in recent weeks.

“Unlike last year, most of the soybean crop was planted before the bulk of the rains started which further increases the risk of SDS. The early wet weather we have experienced helps increase the root rot phase of the disease,” says Iowa State University Extension plant pathologist Daren Mueller. “One of the driving factors for late-season SDS development is significant rainfall during the late-vegetative and early reproductive stages.”

If you suspect SDS in your fields, look for a few key characteristics. First and foremost, SDS causes defoliation and yellowing of upper leaves. If your fields have been infected, but you’re just seeing spotty symptoms, it’s a sign you’re early in the disease cycle, according to a Purdue University report by a team of plant pathologists led by Andreas Westphal.

“When symptoms first appear in a field, they may be confined to a few small areas or strips in the field, often in wetter or compacted areas, such as turn rows. Over the following two or three weeks, affected areas may enlarge, and other areas in the field may show symptoms,” according to the university report. “Because the SDS fungus can overwinter in soil, areas of a field that show symptoms of the disease often grow larger with each growing season until most of the field is affected.”

There’s one kicker with SDS, though; once a field’s infected, symptoms can sometimes resemble those from other similar diseases, making it important to scout even after you know you’ve got a disease infection on your hands.

“Early symptoms are mottling and mosaic of the leaves. Later, leaf tissue between the major veins turns yellow, then dies and turns brown. Soon after, the leaflets die and shrivel. In severe cases, the leaflets will drop off, leaving the petioles attached. Examining the interior of the lower stem and taproot provides a more diagnostic symptom. When split, the lower stem and taproot of a plant infected with SDS will exhibit a slightly tan to light brown discoloration compared to a healthy plant. The pith will remain white or slightly cream-colored,” according to the university report by Westphal and other Purdue plant pathologists. “It is important to look for these stem symptoms because other diseases (such as brown stem rot) or chemical burn can produce foliar symptoms similar to SDS (although in other diseases dead leaflets tend to remain attached to the petioles). For example, brown stem rot darkens the pith, but there is little discoloration of the cortex. If a plant with advanced foliar symptoms of SDS is dug up when soil is moist, there may be small, light blue patches on the taproot’s surface near the soil line. These patches are blue spore masses of the fungus that causes SDS. As the plant dries, the blue color will fade, but these blue spore masses, seen in conjunction with the other symptoms mentioned above, are strong indicators of SDS.”

The bad news is if you’ve got SDS at this point in the season, you’re not likely to find an easy solution. Most SDS planning happens earlier on in the season, namely with the selection of resistant soybean varieties. Fungicides are sometimes applied early in the season, but they typically aren’t effective. 

“Although soybean varieties less sensitive to SDS have been developed, there are no highly resistant varieties. Fungicides applied in furrow during planting or as seed treatments have only limited effects, and fungicides applied to foliage have no effect on SDS, presumably because the fungal infection is restricted to root systems and fungicides typically do not move downward in the plant to reach the site of infection,” according to Westphal’s report. 

Other SDS control options include adjusting planting dates to avoid planting soybeans in cooler, damp soils and eliminating compaction through adjusting tillage systems. The latter strategy has worked well for Marketing Talk senior contributor tree fmr.

“Talked with my brother yesterday; he said some soybeans have patches turning color, but does not know if it is SDS. Says all of ours are still green and look good,” he says. “The only thing we do different is all no-till. We never have had any SDS to speak of.”

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DuPont to sell copper fungicide business assets

DuPont Crop Protection (DuPont) announced an agreement with Mitsui & Co., Ltd. (Mitsui) for DuPont to sell its global Kocide and ManKocide copper fungicide business assets to Mitsui. The sale is expected to close in the fourth quarter 2014, subject to approvals from applicable regulatory authorities. Financial terms of the agreement were not disclosed.

As part of the transaction Mitsui will acquire DuPont Crop Protection’s global copper fungicide trademarks (including the DuPont Kocide and ManKocide brands); product registrations; registration data; manufacturing know-how (including process patents); certain third-party contracts; and DuPont’s Houston, Texas copper fungicide production facility. 

“This agreement is another step in the execution of our DuPont Crop Protection business growth strategy,” said Rik Miller, president, DuPont Crop Protection. “The agreement further enhances our focus on innovative new offerings that drive profitable growth both today and over the long term.”

Under the agreement, DuPont will continue to sell Kocide and ManKocide branded products within Asia Pacific exclusively for a period of up to five years under a supply and distribution agreement, and also will continue to supply DuPont’s current copper fungicide mixture partner needs globally.

Kocide copper fungicides remain important fungal and bacterial disease management tools and are registered for use in more than 75 countries globally and in all major regions of the world. The most important crops for copper fungicides are grapes, citrus, olives, vegetables and fruits.

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