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Allendale`s December 2012 Supply & Demand Estimates

Corn - No change to production will be made this month. We expect USDA to lower demand moderately on this report, exports and ethanol, with further declines reserved for the January report. Argentina corn production is estimated at 26 million tonnes (USDA 28 mt) and Brazil corn is left equal to USDA's 70 mt.

 

Soybeans - No change to production will be made this month. Though the trade knows demand will fall sharply in the coming months, for now the pace is better than USDA expectations. Argentina soybean production is lowered to 53 million tonnes (USDA 55 mt) while Brazil is left equal with USDA's latest 81 mt expectation.

 

Wheat - Though exports are seen picking up in the coming weeks, the increase needed to meet USDA hopes is seen unreasonable. Part of the expected increase in US wheat ending stocks is seen by offsets in Argentina (11.0 mt) and Australia (20.0 mt) production.


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China's hunger for soy could drain world supply

Oilseed meals are poised to turn the tables on vegetable oils and drive price incentives for the sector, as China's hunger for feed drains the world's exportable supplies of soybeans, analysis group LMC International said.

Investors can be "relatively bullish" on soymeal prices long-term, thanks to the need by China to supply its grow its meat production, and meet demand whetted by a rising population and increased wealth, LMC senior economist Julian McGill said.

Indeed, the growing pace of China's demand for soybeans - a meal-heavy rather than oil-heavy oilseed – will at current levels see it in a decade's time "trying to import more soybeans than the major producing countries are exporting", Mr McGill said.

"If China continues to import at this rate, we are going to run out of soybeans," with the country's projected demand of some 180m tonnes by 2024 exceeding the likely combined exportable surplus of Argentina, Brazil and the US.

'Staggering consequences'

Meal's turn in the driving seat in oilseed markets follows a period when vegetable oils have set the pace, spurred by the encouragement given by the European Union and the US for their use as raw materials for biodiesel.

Such a boost to biodiesel use, incentivised through the likes of blending mandates and tax credits, has had "staggering consequences" for the vegetable oils market, encouraging demand to grow far faster than that for meal since around 2000. 

Some 15% of vegetable oil production is now used to make biodiesel, compared with a marginal level at the turn of the century, with one-third of global rapeseed output used for fuel at a 2010 peak.

Indeed, this dynamic has been a large driver behind soaring output of palm oil which, with its high production rates of 4 tonnes per hectare, and low levels of meal manufactured as a byproduct, is "ideally suited to rising demand for oil running faster than that for meal", Mr McGill said.

'Incentive disappeared'

However, a recent retreat in EU and US encouragement for biodiesel, though measures such as curbing blend rates, had helped curtail the vegetable oils boom, seeing prices converge with those of crude oil – which are themselves under pressure.

The fall of palm oil prices, for instance, below crude oil values has a history of encouraging demand from biodiesel plants, in making production of the fuel viable even without state incentives.

Crude prices are being undermined by a reluctance by major producers such as Saudi Arabia to cut output despite the waning demand from countries such as the US, which are turning energy demand to domestically-produced gas.

With vegetable oil production remaining high, resulting price weakness has seen, for example, sunoil reach markets "where it has never been before", Mr McGill said, citing Indian demand.

Furthermore, the low prices are placing a question mark over further expansion of oilseed sowings on the "frontiers of agriculture", such as the interior of Brazil.

"The premium to expand agriculture in this frontier has disappeared," Mr McGill said.

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ARC-CO and PLC Payment Indicator for 2014 Crop Year: October 2014 WASDE U.S. Yield and Price

ARC-CO and PLC Payment Indicator for 2014 Crop Year: October 2014 WASDE U.S. Yield and Price | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it

This article provides payment level indicators for ARC-CO and PLC payments based on the October 10, 2014 WASDE U.S. yield and U.S. price projections for barley, corn, oats, long grain rice, medium (and short) grain rice, sorghum, soybeans, and wheat. This article updates previous indicators given on August 13, 2014 and September 18, 2014 based on the August and September WASDE (World Agricultural Supply and Demand Estimates). Estimated payments are referred to as indicator estimates because they use U.S. yield not the county yield used by ARC-CO or farm payment yield used by PLC. The estimates are not payments an individual FSA farm will receive. Nevertheless, the indicator estimates using U.S. yields should help frame perspectives and questions for FSA farm owners and operators regarding program choices.

Calculation of Estimated Indicator Program Payments

ARC-CO makes a payment if county revenue is below 86% of the county's benchmark revenue. Benchmark revenue is the product obtained by multiplying 5-year Olympic moving averages (removes high and low values) of county yield and U.S. crop year price. ARC-CO payments are capped at 10% of the benchmark revenue. PLC makes payments when U.S. crop year average price is less than the crop's reference price. Congress specified the reference price in the 2014 farm bill. For an extended discussion of various topics related to these two programs, see the August 13, 2014 farmdoc daily article. Topics include the third program option, ARC-IC (ARC-individual farm). The formulas used to calculate payments by ARC-CO and PLC are presented in an Appendix in the August 13, 2014 article.

U.S. per acre Payment Indicator for 2014 Crop Year - October WASDE Mid-Price

Table 1 contains the October 2014 WASDE price projections for the 2014 crop year. The mid-price projections indicate payments by ARC-CO for corn, sorghum, and wheat and by PLC for corn, long grain rice, and sorghum (see Figure 1). Indicated payment is highest for corn from ARC-CO at $79 per acre. Next highest is $78 per acre by PLC for long grain rice. Remember, actual payments depend upon county yield for ARC-CO and FSA payment yield for PLC, and payment is made on only 85% of base acres (65% for ARC-IC).

Due to a $0.10 per bushel decline in projected corn price from the September to October WASDE and because corn's projected price is below its $3.70 reference price, indicated PLC payments for corn increased from $26 to $39 per acre. In contrast, indicated ARC-CO payment for corn did not change from the September to October WASDE. The reason is that the September corn price projection resulted in an indicated ARC-CO payment equal to its cap (10% of benchmark revenue).

U.S. per acre Payment Indicator for 2014 Crop Year - October WASDE Low Price

At the low projected price in the October WASDE, payments are indicated for all crops except oats and medium/short grain rice (see Figure 2). Highest indicated payment is $108 per acre for long grain rice by PLC. Next highest is $79 per acre for corn by both ARC-CO and PLC. No payment is indicated by ARC-CO for long grain rice and by PLC for soybeans and wheat. ARC-CO has indicated per acre payments of $27 for soybeans and $21 for wheat. Both ARC-CO and PLC have payments indicated for barley and sorghum, with PLC's payment being higher.

Since ARC-CO and PLC make the same payment at a crop year average price of $3.10 per bushel for corn, the higher paying program at prices around $3.10 for corn will depend on the relationship among the yields that affect payment: farm program yield for PLC, and actual and benchmark county yield for ARC-CO. As crop year price increases above (decreases below) $3.10 for corn, the higher paying program will tend toward ARC-CO (PLC), especially as price moves further from $3.10.

For sorghum the difference between indicated payments by ARC-CO and PLC increased from the mid-price to low price calculation (Figure 1 vs. Figure 2). The reason is that ARC-CO payment was at its cap or maximum value of $26 per acre at the projected mid-price. In contrast, PLC has a much higher cap, which is determined by the difference between the reference price and loan rate. Again, remember, actual payments depend upon county yield for ARC-CO and FSA farm payment yield for PLC, and payment is made on only 85% of base acres (65% for ARC-IC).

U.S. per acre Payment Indicator for 2014 Crop Year - October 2014 WASDE High Price

Corn - ARC-CO, long grain rice - PLC, and sorghum - both programs had payments indicated at the high October WASDE price (see Figure 3). Because payment is indicated at the high price, likelihood of payment for these crop-program combinations is higher. However, payment is not 100% certain as U.S. crop year price can end up higher and, for ARC-CO, high county yields can offset low prices.

Importance of Price Uncertainty

The sizeable difference in estimated indicator payment at the low and high October WASDE price projections needs to be underscored. The current range on U.S. crop year price projections is such that both high payments and no payments may occur. To emphasize this point, Figure 4 presents the largest difference between the October WASDE mid-price forecast and final crop year price for corn, soybeans, and wheat over the 1979 through 2012 crop years. Largest difference is $1.00 for corn, $1.75 for soybeans, and $0.38 for wheat. Wheat is smallest because its crop year begins June 1, which is earlier than the September 1 start for the corn and soybean crop year. Simply put, it is too early in the 2014 crop year to talk with much certainty about the size of payments. It is reasonable to say that 2014 crop year payments may occur, that they may be large if the right combination of price and yield materialize, that they will likely vary by crop, and that they will likely vary by program for a given crop.

Potential Total 2014 Crop Year Payments

In policy it is important to think at both the micro (individual farm or acre) level and macro (national) level. However, given the uncertainty surrounding 2014 crop year price (and to some degree yield) projections and the critical unknown issue of which program farms will choose, we think it is too early to provide estimates of total farm program payments. However, simple sensitivity assessments suggest that total payments could be both smaller and larger than the $4 billion plus in direct payments that farmers gave up in the 2014 farm bill. Also corn is likely to account for the bulk of payments based on current information because of its large program acres, its current price projection, and the fact that the 2014 mid-price estimate is 46% below the average price for the 2010 through 2012 crop years.

Summary Observations

  • As of October 10, 2014, corn, long grain rice, and sorghum are the most likely program crops examined in this article to receive a payment for the 2014 crop year.
  • Whether or not ARC-CO or PLC is likely to make a payment varies by crop.
  • Lower prices will increase the likelihood of payments, especially by ARC-CO. However, because of the 10 percent cap on ARC-CO's payment, lower prices will not likely increase payments by ARC-CO for corn and sorghum.
  • County yield is a factor in determining 2014 payments by ARC-CO given currently expected prices while payment yield is a factor in determining 2014 payments by PLC.
  • Payments are far from certain for both ARC-CO and PLC if prices strengthen due to lower production or higher demand whether in the U.S. or around the world during the 2014 crop year. At this time, it is reasonable to only say that 2014 crop year payments may occur, that they may be large if the right combination of price and yield materialize, that they will likely vary by crop, and that they will likely vary by program for a given crop.
  • Comparison of payments under the current low, mid, and high prices in the October 2014 WASDE reveals some of the tradeoffs that need to be considered when choosing between ARC-CO and PLC. They include that ARC-CO payments are based on a benchmark revenue that follows the market, which increases the likelihood that ARC-CO will make payments in 2014 because 2014 prices are lower than the high prices of recent years. However, the cap on payments is smaller for ARC-CO than for PLC, which means that the potential payment by PLC is higher, although actual payment may be smaller. Two tradeoffs not illustrated are (1) that ARC-CO's benchmark will eventually trend lower if prices remain low although this downward adjustment is tempered because ARC-CO has the PLC reference price as a minimum price and (2) that ARC-CO pays on price and yield declines while PLC pays if price is below the reference price. Preferences among these tradeoffs are important considerations in determining which program farmers will choose.
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Mapping technology could help farmers better understand soil

Mapping technology could help farmers better understand soil | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it

WEST LAFAYETTE, Ind. — A Purdue University agronomist has developed soil-mapping technology that provides visual information about soil functionality and productivity, which could increase profitability for farmers and growers as they cultivate their crops.

Phillip Owens, associate professor of agronomy in Purdue’s College of Agriculture, said the U.S. Department of Agriculture provides soil survey maps of the contiguous 48 states. These maps only classify and name soil types as broad units based on their appearance, while Owens’ functional maps provide a broader spectrum of highly detailed information.

“These functional maps show properties like organic carbon content, clay content, the location of water tables, the native nutrient potential, catatonic exchange and more,” he said. “They also show categorized information like the highest- and lowest-yielding areas, how much water the soil would store after a rainfall event, and how fast a farmer could expect runoff. This information could impact how farmers choose to manage their land and their crops in order to decrease costs and increase profits.”

A video about the soil mapping technology is available at http://youtube/7alAHvhBZ9Q.

Jenette Ashtekar, a doctoral graduate from Purdue’s College of Agriculture, worked with Owens to create the functional soil maps by using algorithms that capture the important relationships between the landscape, water and soil development.

“The computer algorithms that we developed exploit the relationship between soil properties and the landscape. We then use the same algorithms to determine precise locations in the fields to sample so we can create the best possible map with a limited number of samples,” she said. “After sampling, we use Geographical Information Systems, or GIS, technology to develop beautiful, color-image maps that farmers can use in the field to inform their management decisions.”

The Purdue Office of Technology Commercialization has filed a patent application on the technology, which was developed with funding from the USDA and Purdue. Owens is looking for venture capitalists or agriculture firms to license and scale up the technology for the marketplace.

“The maps currently are in GIS format, but they can be delivered multiple ways,” he said. “Ultimately farmers will want the information on their tractors so they can make decisions about where to plant, what seeding rate to use, where and how much to fertilize or more as they drive across the field.”

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Changing times, yet again for grain prices

Changing times, yet again for grain prices | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it

Over the past month a number of things have happened that are going to impact world grain prices.

Reports from the Ukrainian Ministry of Agriculture are saying that due to conflicts they expect that at least 15 per cent of the crops in Eastern regions will be lost because they have not been tended to properly. Shipments out of the major ports are continuing as normal, but there are concerns that any further escalation in the conflict could target these ports and cause some real problems.

Harvest in parts of the EU and the U.S. have begun and volumes look to be up from early estimates. This has buyers waiting to see how low prices will go as there looks to be plenty of volume available.

Rains in some regions of the EU, particularly France, and in parts of the U.S. and across the Prairies are is impacting harvest yield and quality. This is forcing some buyers who need high quality grains (wheat) to look elsewhere and or forcing them to buy up good quality old crop stocks or new crop stocks sooner than they had expected to cover their needs. This panic will help support prices for a while but there is still a lot of wheat harvesting to be done over the next four to five months.

Logistics problems continue to persist in the northern U.S. states where most facilities are full of newly harvested grain and waiting for rail cars to ship to port.

Will this problem rear its ugly head on the Prairies as we head into our harvest? Most likely, yes. We will no doubt experience the typical yearly harvest congestion scenario where grain comes in faster than it can be shipped. The question is how many cars will be available and which elevators will get them. If we see the railways follow their strategy from last winter of shipping from the closest points to port, then the Calgary Edmonton corridor elevators will be well served going to Vancouver and the facilities in eastern Manitoba will have good shipping to the Lakehead, but everyone in between might be sitting full and waiting for cars.

U.S. Department of Agriculture crop tours have concluded that the current U.S. bean and corn crops are going to be record-breaking crops.

Here at home

If we look at the current situation across the Prairies we find ourselves in a rather precarious place.

Crops in general are late compared to last year and the five-year average. Cool weather and rains have not helped, delaying maturity and bringing us very close to freezing temperatures. Frost was reported in northeast Alberta and northwest Saskatchewan in the later parts of August which will no doubt impact crop quantity and quality.

We need warm weather for another month. This would allow us the opportunity to export our milling wheat into those markets that the French cannot serve this year because of their poor quality crop, and hopefully help to elevate prices here.

Exporting feed grains from Canada is not very lucrative because of the freight and the location of the majority of the buyers. French feed wheat will already have a head start on selling into those markets because their harvest is two or three months before ours. They are also closer to the end users, so they can sell cheaper due to lower freight costs.

We will most likely end up marketing the majority of our feed grains into our local feed markets. The volume of feed grains we produce will dictate where price will go, especially if exporting is not a realistic option.

Another major concern is the massive record corn crop being harvested in the U.S. The U.S. regularly exports a huge volume of corn into the world feed markets but if those markets are being flooded by cheaper EU feed wheat then you will no doubt see corn values start to drop accordingly. They will continue to drop until they either buy back some of their export markets or they are cheap enough to sell into Canada (against our lower dollar) into our feed market. If that happens, you know what will happen to our feed grain values.

So how do you try to best protect yourself from these kinds of possible scenarios?

Do you realistically expect to get your entire wheat crop off without any frost problems?

If your answer is yes, do nothing and get it in the bin ASAP.

If your answer is no, maybe you should consider selling some feed wheat for immediate movement at harvest at current levels before prices slide any further if a frost event should occur.

Hedge or use options on the Chicago wheat futures to protect yourself from the worst case that some or all your wheat is feed and prices collapse over harvest.

Use crop and revenue insurance products like those offered by Global Ag Risk Solutions.

This way you can protect yourself against both production and revenue shortfalls to a minimum dollar value per acre. If you lose quantity and quality and prices collapse, that insurance payment could mean the difference between making a profit or facing a huge loss.

No one knows what will happen, but if you prepare and protect yourself as best you can with the right kinds of insurance and a good marketing plan you can greatly reduce your overall risk and exposure in the market place, become more profitable and sleep better at night.

Brian Wittal has 30 years of grain industry experience, and currently offers market planning and marketing advice to farmers through his company Pro Com Marketing Ltd. (www.procommarketingltd.com).

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Farm Commodities | Corn Wheat Soybeans Heating Oil | Big Pat's Blog SETTLEMENTS-CME-2014 OCTOBER 20 MONDAY

SETTLEMENTS-CME-2014 OCTOBER 20 MONDAY

Markets-price supply/demand during relative strength trading

Trends-monthly=direction=down-lower highs, up-higher lows
Trading-weekly trend+prevailing strengths+activity+momentum
Targets-projected length of move

CORN- 35 cent daily trading limit, premium to back months
NET positions: user-less long, investor-more long, other-more short
trends: prices-UP, open interest-DOWN, supply-UP/MORE
trading: DOWN-day/1, @trend support, offset buying, lost momentum
targets: 371-388-423-452                           =BULLISH SIGNAL
SOYBEANS- 1 dollar daily trading limit, premium to back months
NET positions: user-less long, investor-less short, other-less short
trends: prices-UP, open interest-UP, supply-UP/MORE
trading: DOWN-day/1, support@trend, net selling, lost momentum
targets: 946-960-988-1016                         =WEAK BULLISH
WHEAT- 45 cent daily trading limit,premium to back months
NET positions: user-less long, investor-less short, other-more short
trends: prices-DOWN, open interest-FLAT/DOWN, supply-UP/LESS
trading: DOWN-day/1, support@trend, offset buying, same momentum
targets: 547-497-415-349                              =TEST OF BULLISH
CANADIAN DOLLAR- no daily trading limit
NET positions: user-more long, investor-more short, other: more short
trends: prices-DOWN, open interest-DOWN
trading: DOWN-day/1, lower high, offset selling, lost momentum
targets: 9076-9030-8959-8902-8820               =BEARISH
HEATING OIL- 25 cent daily trading limit, mostly flat to back months
NET positions: user-more long, investor-more short. other-long
trends: prices-DOWN/LESS, open interest-UP
traded: FLAT-DAY/2, trend support, net selling, gained momentum
targets: 279-269-252-239                               =LESS BEARISH
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Brazil rains dent soy prices, but batter coffee

If last week was largely about strength in crop prices, this week started off with declines as more of a theme.

Some price falls were extreme.

Arabica coffee futures plunged 5.3% to 199.40 cents a pound in New York for December delivery, undermined by reports of much-needed rain in Brazil's coffee belt, if limited so far, but with large quantities to come.

"Rains should spread across Mato Grosso, Mato Grosso do Sul, western Goias, western Sao Paulo and south central Minas Gerais this week," MDA said, Minas Gerais being the important part, as Brazil's top coffee-producing state.

Some areas could receive 2.5 inches.

'Stabilise crop prospects'

There are doubts about how much even heavy rains, and more, will be able to improve prospects for the 2015 coffee crop, given the damage to trees already done.

"No one expects the rains to solve the problem overnight, and they might be too light to help much at all," said Jack Scoville at Price Futures Group.

"But, these are the first forecasts for rains to appear since July and some rains now could at least help to stabilise crop prospects."

Robusta coffee for January fell 3.2% to $2,060 a tonne in London in sympathy.

Sowings slowdown

But in Chicago, price falls were more measured, even though the prospect for Brazilian rains is a negative too for soybeans, in boosting prospects for crop currently being sown – although with dryness having slowed progress.

In Mato Grosso, the top soybean producing state, "Brazil bean planting is estimated at 9% complete last week, compared to 18% last year, as farmers wait for better planting conditions," CHS Hedging said.

Benson Quinn Commodities said: "Dry conditions in west central and north eastern Brazil have delayed the start to planting of the 2014-15 soybean crop.

"But with rains over the weekend in major growing state of Mato Grosso, and an improving rain outlook for the coming two weeks, planting pace of the bean crop should quicken."

'A lot of harvest'

Furthermore, weather has improved in the US too, in terms of getting drier, boosting prospects for the corn and soybean harvests.

CHS Hedging reported "a lot of harvest over the weekend - looks like soybeans are wrapping up in several places".

For corn, "clearing harvest weather this past weekend and into this week, will see more of this large crop coming out of fields adding pressure to prices starting off the week".

US Department of Agriculture data later are expected to show corn harvest progress reaching 30-32% completion, if behind the average of 52%.

Soybean harvesting is seen at 48-52% complete, compared with an average of 65%.

'Burden of proof'

Furthermore, there was a lack of panic in external markets, of the type which last week, in encouraging mass liquidation of investments, was positive for agricultural commodities, in that hedge funds were largely short.

"Unlike last week, outside markets are not posting new lows, US harvest weather is better and northern Brazil is getting rain," said Richard Feltes at Chicago broker RJ O'Brien.

This is a more negative aspect for prices, with "the burden of proof this week on the shoulders of recent longs".

Still, a break by futures "to new lows is unlikely until the market can gauge the degree to which record crops triggers distressed harvest selling".

Soybeans vs corn

Indeed, the news was not all negative, with US exports of soybeans last week coming in at a huge 1.99m tonnes, up from 1.45m tonnes the previous week, and 1.69m tonnes the year before.

US soybean exports so far in 2014-15 are running at 5.94m tonnes, up from 4.80m tonnes a year ago.

For corn, the volumes, at 717,605 tonnes, were not so impressive, falling from 939,667 tonnes the week before.

Still, with soybeans under more pressure from US harvest, and from Brazilian rains, futures fell further, by 0.8% to $9.44 ¼ a bushel for November delivery, closing below the contract's 10-day moving average for the first time in six sessions.

Corn for December actually put in a late spurt to close up 0.25 cents at $3.48 ¼ a bushel.

'Victim of its own success'

Wheat for December closed down 0.5% at $5.13 ½ a bushel in Chicago, if also well above its intraday low, helped by the revival in corn, which limited some of the selling pressure.

"The wheat market looks to be a victim of its own success - Friday's rally to five-week highs, coupled with a lower close, has triggered profit taking on overbought technicals," said Benson Quinn Commodities.

US export data were actually OK, at 481,878 tonnes, up from 455,967 tonnes the week before,

And there are plenty of signs of world demand for wheat at current price levels, with Jordan and Ethiopia tendering for 200,000 tonnes apiece, Maldives and Mauritius after wheat flour and, after the market close, Egypt's Gasc agency unveiling its third tender of October.

 Still, with the technical picture declining, Chicago wheat, the speculators' favourite, fell 0.5% to $5.13 ½ a bushel.

Kansas City hard red winter wheat did better, in easing only 0.5 cents to $6.01 ¼ a bushel for December delivery.

In Europe, Paris wheat for November also recorded marginal losses, down E0.25 at E159.75 a tonne.

'Much better for crushing'

Back in New York, raw sugar for March added 0.4% to 16.68 cents a pound, with the Brazilian rains viewed as less positive for production of the sweetener, in the short-term, in delaying cane harvesting.

Still, industry data expected this week for production in the first half of October may show a different picture, with the weather "much better for crushing in the Centre South Brazil cane area and no days lost to rain", Sucden Financial said.

And while sugar concentrations in cane typically fall at this time of year, "there may be a surprise considering the dry and hot weather seen recently", the broker said.

Datagro downgrade

Back in favour of bulls, Datagro after the close of markets cut by 700,000 tonnes to 31.6m tonnes its forecast for 2014-15 sugar output from the Centre South, forecasting a drop in the cane crush to 550.2m tonnes from 597m tonnes last season.

And prospects for 2015-16 are even worse, thanks to a reduced rate of carry over cane.

Next season, Centre South sugar output will fall to 29.1m-31.3m tonnes.

Datagro pegged Brazil's overall sugar output this year at 35.1m tonnes.

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WTO rules against U.S. meat labelling laws

WTO rules against U.S. meat labelling laws | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it

Canada has won an important battle in an ongoing trade dispute with the United States over meat labelling laws that have hurt the beef and pork industries.

The World Trade Organization has ruled that U.S. country-of-origin labelling (COOL) rules discriminate against exports from Canada and Mexico.

The rules, which went into effect in 2008 and were updated last year, are blamed by the Canadian beef industry for reducing meat exports to the U.S. by half.

The WTO compliance panel says COOL breaks trade rules because it treats Canadian and Mexican livestock less favourably than U.S. livestock.

The panel says changes the U.S. made to the rules last year made the policy even more detrimental to livestock exporters.

"The compliance panel concluded that the amended COOL measure increases the original COOL measure's detrimental impact on the competitive opportunities of imported livestock in the U.S. market," the panel said.

"It necessitates increased segregation of meat and livestock in the U.S. market, entails a higher record-keeping burden and increases the original COOL measure's incentive to choose domestic over imported livestock."

2nd ruling against COOL laws

This is the second time the WTO has ruled against country-of-origin labelling — it also said the practice contravened trade laws in 2012.

The federal government hailed the ruling Monday and called on the United States to comply with the WTO decision.

"Today's WTO compliance panel's report reaffirms Canada's long-standing view that the revised U.S. COOL measure is blatantly protectionist and fails to comply with the WTO's original ruling against it," Agriculture Minister Gerry Ritz said in a statement.

"The WTO's clear and consistent findings in support of Canada's position effectively supply a clear message to the U.S. — end this protectionist policy that creates economic harm on both sides of the border and comply with your international trade obligations."

Ritz has said that he expects the U.S. may appeal the ruling before the trade battle is finally resolved.

COOL rules require all packaged meat to identify where the animal was born, raised and slaughtered.

Supporters of the law say it better informs U.S. consumers, while opponents argue that segregating animals and tracking them adds costs and violates free-trade agreements.

International Trade Minister Ed Fast has said the legislation undermines North American supply chains and costs the Canadian pork and beef industries about $1 billion a year.

Some U.S. companies have said they can't afford to sort, label and store meat from Canada differently than meat from domestic animals.

Ritz has said the federal government would consider imposing retaliatory tariffs measures on some U.S. goods as early as next year if Washington doesn't comply with WTO COOL rulings.

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Planting Well Behind Average Due to Hot, Dry Weather

- Another hot, dry week in Brazil's Center-West and South-East regions put Brazil's soybean planting further behind schedule, according to AgRural, a local farm consultancy.

Up to Friday, farmers had planted 10% of the projected Brazilian crop, well behind the five-year average of 20%. (DTN file photo by Alastair Stewart)

Up to Friday, farmers had planted 10% of the projected Brazilian crop, well behind planting at this stage last year, when 19% was in the ground, and the five-year average of 20%.

Field work moved forward just three percentage points last week as growers continue to wait for spring rains in Mato Grosso and surrounding Center-West states, which account for nearly 50% of soy production.

Spring rains are around a month late in the Center-West. As a result, farmers who planted early in the month on light showers will now have to replant a portion of their crop. The extent of the replanting will only become clear once rains arrive.

Weather charts indicate rain will return to the region from Wednesday, with between 15 to 30 mm forecast for the week in Mato Grosso, Goias and northern Mato Grosso do Sul, according Somar, a local weather service.

However, even if farmers do get into the fields this week, the window for planting second-crop corn after soybeans is getting tighter. AgRural estimates that, given regular weather conditions, Mato Grosso will only have planted 5% of second-crop corn by the end of January, compared with the five-year average of 14%. The later the corn is planted, the higher the risk of dry weather during the key reproductive phases and this risk has already been reflected in rising prices on the Brazilian corn market, said AgRural.

In the south, planting has also not gone as fast as it could due to heavy rains at the end of September and early October and then high temperatures over the last couple of weeks.

Parana, the No. 2 soy state, had planted 33% of the soybean crop up to Oct. 17, which is back from the 40% planted last year although in line with the five-year average of 33%.

The hot weather has made farmers in the region edgy, although temperatures should drop this week.

In the Center-West, Mato Grosso had planted 11% of the crop as of Friday, well back from the 30% recorded at the same stage last year. In the west of the state, isolated showers last week allowed for some planting progress and 16% had been planted there.

Similarly in Mato Grosso do Sul, some 10% had been planted as of Friday compared with 30% last year.

In Goias, just 3% of the crop was planted compared with 7% last year and a five-year average of 17%.

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Durum premium to quadruple, say Canada officials

Canadian officials hiked their estimate for the premium that growers will receive for durum, over prices of conventional wheat, citing the squeeze on world stocks - which will fall to their tightest in 15 years.

The Canadian farm ministry, AAFC, lifted by Can$20 to Can$255-285 a tonne its forecast for the price that domestic farmers will receive for their newly-harvested durum crop.

The upgrade implies a premium of some Can$65 a tonne over the price of common wheat, which was seen gaining farmers Can$190-220 a tonne, an estimate downgraded by Can$10 at both ends of the range.

Last season, the durum premium was Can$15 a tonne, and in 2012-13 just Can$5 a tonne.

Indeed, the buoyant price of durum contrasts with weakened price expectations for most grains, with AAFC also lowering its forecasts for Canadian barley, corn and oats prices to below last season's rates.

'Very strong prices'

"In general, grain prices are expected to decrease slightly from the 2013-14 level, but durum prices are expected to be very strong due to strong demand and relatively low global supply," the ministry said.

Indeed, AAFC trimmed by 200,000 tonnes to a 15-year low of 4.8m tonnes its forecast for world durum inventories at the close of 2014-15, reflecting a cut of 190,000 tonnes to 4.76m tonnes in Canada's own output thanks to a lower yield estimate.

Poor weather, including early snow and persistent rain, dogged Canada's wheat harvest.

Indeed, the paucity of durum supplies in Canada, the top exporter of the grain, raised doubts over a forecast from the International Grains Council last month that the country will achieve record shipments of 5.0m tonnes in 2014-15.

AAFC cut its own forecast for Canada's exports by 200,000 tonnes to 4.7m tonnes, saying the ability of merchants to "respond to strong demand in export markets will be limited by the lower supply".

13-year low

World durum supplies have been dented not just by a decline in Canada's production - from 6.51m tonnes in 2013, an unusually good year for grains output - but by weaker harvests in other major producing countries too.

With Italy's output hurt by excessive rain, and Turkey production by drought, the world harvest has fallen by 4m tonnes to a 13-year low of 33.7m tonnes.

The dearth of quest for durum, used in making pasta, will see Mexico's exports match last season's record of 1.3m tonnes, according to the International Grains Council.

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Corn Prices Tumble in North Dakota

Corn Prices Tumble in North Dakota | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it

In late September, corn prices at two North Dakota grain elevators dropped to levels farmers thought they’d never see again: $1.73 at one facility and $1.81 at another. A wide basis—more than $1.50 per bushel below futures quotes at some locations—is driving the low corn prices.

That puts new crop corn prices below variable costs for North Dakota corn producers. Soybean prices have also tumbled far below breakeven to just over $8 per bushel.

The wide basis in North Dakota is caused by an interplay of several factors. Key among them is that some 
elevators are dealing with large quantities of small grains and corn. As a result, elevators are wrestling with two choices, says Frayne Olson, ag economist at North Dakota State University: cap how much corn they buy or store for farmers, or accept all corn, which forces them to widen basis. The above bids reflect the latter.

An additional challenge is that North Dakota has increased corn production more than any other state in the past decade. “Replacing 60-bu. wheat with 120-bu. corn doubles the grain volume,” he says.

On-farm and commercial storage has increased to largely match growth, but when all the pieces to the storage puzzle aren’t in alignment, the system can be stressed, Olson adds.

A big piece to the storage puzzle in North Dakota is how long harvest lasts. This year’s wheat harvest took a while, allowing elevators and rail carriers to avoid major back-up. If corn harvest is similar, the system will be better able to deal with it, Olson says. 

But if the harvest window is tight, storage problems will be more severe. What’s good for farmers—a warm, dry fall—is not necessarily good for the storage system, he adds.

The math on storage capacity versus harvest doesn’t tell the entire story, either, Olson says.

“The challenge in North Dakota is the wide range in barley, spring wheat and durum quality,” he says. Farmers don’t put high and low protein wheat in the same bin because of the huge difference in premiums and discounts,  Olson adds. 

Because of that, a lot of grain bins will be half full, further pressuring the storage system for all crops. 

Another issue factoring into the equation is transportation. In North Dakota, the railroad is the preferred mode for grain transportation. While the Burlington Northern Santa Fe is largely caught up from earlier delays, it remains to be seen whether harvest pressures will allow timely rail service, or if it will be a repeat of this past year. 

While storage issues and accompanying wide basis are most severe in North Dakota, it’s a national problem. As storage in the northern and western fringes of the Corn Belt starts to fill up, grain produced in those regions will need to find a home elsewhere, such as in Iowa, where there is more capacity and narrower basis, says Chad Hart, ag economist at Iowa State University. But once storage is maxed out there, basis in the I-States will widen too. 

It’s not only the massive 2014 crop that’s causing trouble. “I’m amazed at how much old crop [2013] is still out there,” Hart adds.

He predicts the storage and basis problem will recede post-harvest when corn starts to move to end users. At current bids, though, farmers won’t sell much, if any, before spring unless they have to. 

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Corn Extends Drop as Dry Weather Seen Aiding U.S. Harvest

Corn and soybeans fell for a second session in Chicago on speculation that drier and warmer weather will allow U.S. farmers to accelerate harvesting of crops that are expected to be the biggest on record.

The U.S. Midwest will see mostly dry weather in the next 10 days, allowing corn and soybean harvesting to move forward after recent rain, Commodity Weather Group said today. About 24 percent of corn was collected in the main U.S. growing areas by Oct. 12, behind the average pace of 43 percent, U.S. Department of Agriculture data show. The soybean harvest was 40 percent complete, compared with the average 53 percent pace. The USDA is scheduled to update its weekly crop progress report today.

“The weather forecast in the U.S. has cleared up and remains near ideal for harvest conditions, warm and dry,” Matt Ammermann, a commodity risk manager at INTL FCStone, said in an e-mailed note. “Talk of big yields and potential harvest pressure should allow for price values to weaken this week.”

Corn for December delivery fell 1.4 percent to $3.43 a bushel at 7:21 a.m. on the Chicago Board of Trade. Prices rose 4.2 percent last week, the biggest gain since the week to March 7, after rain delayed harvesting. The grain has still tumbled 19 percent this year as the USDA estimates the U.S. harvest, the world’s largest, to rise to a record 14.475 billion bushels.

Soybeans for November delivery dropped 1.1 percent to $9.4125 a bushel, after climbing 3.2 percent last week. Prices are down 27 percent this year. U.S. farmers may harvest 3.927 billion bushels of the oilseed, the most ever, the USDA says.

Brazil, the world’s biggest soybean exporter, may see “crucial rainfall” this week in central and southeastern areas that have experienced dryness, which will encourage farmers to accelerate planting, QT Weather said in a report yesterday. The country’s output may climb to a record 94 million metric tons in 2014-2015, the USDA predicts. Planting started this month and will run until December.

Wheat for delivery in December dropped 1 percent to $5.11 a bushel in Chicago. In Paris, milling wheat for November delivery fell 0.8 percent to 158.75 euros ($202.95) a ton on Euronext. 

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Grain futures ease as share prices recover

Broader markets started on a positive note, helped by Friday's late revival by shares on Wall Street, which saw the S&P 500 close 1.3% higher at 1,886.8 points.

Tokyo shares ended Monday 4.0% higher, with smaller gains recorded in the likes of Hong Kong and Seoul.

Not that this necessarily means that the market mayhem seen last week, so typical of Octobers, is over.

"Markets ended last week on a more positive note with equities recovering some ground, but it is probably too early to conclude that we are back into the time of steady and healthy risk appetite," Crédit Agricole said. 

"High volatility will likely remain the story for now especially as expectation on monetary policies shift back and forth." 

'Running to the sidelines'

The reduced enthusiasm for position-closing weakened the trend of short covering which supported agricultural commodity prices last week.

Regulatory data late on Friday, for positions as of Tuesday, highlighted the short-covering trend, which was seen continuing until the end of the week.

"It's been a tad strange on markets," said Mike Mawdsley at broker Market 1 noting that "some investors are just running to the sidelines in times of uncertainty - ie if Ebola spreads. 

"If funds liquidate short positions they have to buy them back."

Drier weather

However, Mr Mawdsley added that "ultimately fundamentals should prevail. Supplies should be more than adequate".

And that theme added to pressure on prices even as short-covering waned, with the improvement in US harvest weather  conditions seen ramping up supplies and so pressure to hedge crops.

While the US did see some showers over the weekend, they were light and localised, limiting the damage to the pace of harvest.

While there will be "widespread" rains "in western areas on Wednesday and Thursday", they will, at 0.10-0.75 inches produce only "minor" corn and soybean harvesting delays, weather service MDA said.

'Good window for fieldwork'

At Futures International, Terry Reilly said: "We will see a good window for fieldwork for most of the Corn Belt, and below-normal moisture through the end of the month will allow for great crop harvest progress."

Indeed, soybean gathering is "wrapping up in the Upper Midwest", CHS Hedging said, with the South Dakota harvest 66% complete, and North Dakota harvest 64% finished, as of a week ago.

Still, with the rain further south and east last week, US Department of Agriculture crop progress data due later on Monday are expected to show US soybean harvesting overall 50-52% finished, compared with 40% a week ago.

Brazilian forecast

Sticking on weather, there is some prospect of rain for Mato Grosso, the top Brazilian soybean producing state, where moisture is indeed needed to help sowings, although dryness will prevail in some other parts of the country.

"Mato Grosso is forecast to see significant showers this week," MDA said.

However, "limited shower activity this week in north eastern and central areas will provide little relief in terms of replenishing soil moisture. 

"Very warm temperatures, above normal, are expected as well."

Price falls

And, as an extra setback, some of the technicals supporting futures weakened, with November soybeans, for instance, in dropping 0.6% to $9.46 ¼ a bushel  as of 08:40 UK time (02:40 Chicago time), falling back below their 10-day moving average.

It little helped that, elsewhere in oilseeds, Kuala Lumpur palm oildropped 0.5% to 2,131 ringgit a tonne, after data from cargo surveyor Intertek showing a 10.2% drop in Malaysian palm exports so far this month, compared with the same period of September.

That said, this represented an improvement on the 16.5% rate of decline in the first 15 days of this month.

Back in Chicago, corn for December dropped 0.7% to $3.45 ¾ a bushel, fighting to stay above its own 10-day moving average, having surrendered the 50-day moving average in the last session.

"I view trade below the 50-day moving average as a negative input, but the influence is limited by the fact that the market has traded through this level multiple times," said Brian Henry at Benson Quinn Commodities.

'Clear weather to finish planting'

The decline in row crops weighed on wheat too, which fell 0.7% to $5.12 ½ a bushel in Chicago, for December delivery.

As a positive, there was a fresh demand signal, with Jordan over the weekend tendering for up to 100,000 tonnes of the grain.

But, on the negative side for prices, the drier US weather bodes well for winter wheat sowings, which will also have got help from previous moisture.

"The Plains will see clear weather to finish planting the last of the winter wheat crop over through the end of the month," said Futures International's Terry Reilly.

Cotton eases

Among soft commodities, New York cotton for December eased 0.2% to 62.85 cents a pound.

China's cotton imports fell 39%, year on year, last month to 122,900 tonnes, the China Cotton Association said.

Still, a drop in imports has been expected, after a change in China's subsidy regime aimed at reversing a huge rise in inventories, and last month's performance is in line with the 2014 average decline of 38%.

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THESE PILES ARE THE REASON WE NEED ETHANOL MARKETS AND NEW LOCKS AND DAMS

THESE PILES ARE THE REASON WE NEED ETHANOL MARKETS AND NEW LOCKS AND DAMS | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it

A few miles away from the IL Corn home office, this is happening today.  Farmers are bring their corn to Yuton Elevator, where the elevator has had to increase their amount of ground storage just to try to hold it all.

Right now, Yuton has 2.3 million bushels of ground storage for the corn coming out of the field.  They have storage that is still not full, as you can see in the above photo, but our farmers are reporting that they are only about 50% finished getting their corn harvested.

We have SO MUCH CORN right now all over the Midwest.  These piles are the reason we work for increased ethanol markets and upgraded locks and dams.

Although non-farmers think that we don’t have enough corn to feed all our markets, WE DO!  These piles are proof!  We need ethanol as a growing market to use up all this corn.  We need locks and dams to get our corn to international markets.

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China wastes at least 35 million metric tons of grain every year due to poor storage

China wastes at least 35 million metric tons of grain every year due to poor storage and transportation methods and excessive processing.

Students at an elementary school in Handan, Hebei province, learn to identify different varieties of grain on Wednesday. The lesson is intended to improve awareness of the importance of not wasting food. Hao Qunying / China Daily 



Official calls for new measures to end 'shameful' food loss

China wastes at least 35 million metric tons of grain every year due to poor storage and transportation methods and excessive processing, an official said.

"The losses can feed 200 million people for a year, which is shameful and needs urgent measures to prevent such waste and loss," said Chen Yuzhong, an official with the State Administration of Grain, adding that the amount wasted during consumption is more shocking.

He said lack of proper storage and transportation methods leads to grain losses of more than 27.5 million tons, and excessive processing causes losses of 7.5 million tons.

According to the State Administration of Grain, in major grain production regions including Liaoning, Jilin, Heilongjiang, Henan, Hebei and Shandong provinces, there are no storage buildings for about 35 million tons of grain.

Of the 210 million farming households across the country, only 3 percent can store grain in a scientific way, according to the Ministry of Agriculture.

"If all of the farmers could store grain properly, 20 million tons of grain would not be wasted," Chen said, adding that, by the end of this year, nearly 8.2 million items of grain-storage tools and equipment will be distributed to farmers in 26 provinces and regions, leading to a saving of nearly 1 million tons of grain.

"In the coming 13th Five Year Plan (2016-2020), building more barns to store grain will continue," Chen said.

Zhao Lijun, deputy director of the Department of International Cooperation of the Ministry of Agriculture, said saving food is China's theme for World Food Day on Thursday, which calls on all sectors of society to take action against food waste.

Wang Lirong, chief engineer of the standards and quality center under the State Administration of Grain, said that besides saving food, grain-processing companies should avoid excessive processing to prevent waste.

"Nowadays, consumers have a higher demand for the appearance of rice in color and shape, but whiter rice doesn't mean more nutrition," Wang said, adding that polishing rice twice or three times results in wastage of rice and energy.

Li Jinyou, head of the Panjin Dingxiang Cereal Co Ltd in Liaoning province, said proper processing helped the company save up to 815 tons of rice and 1.8 million kilowatt-hours of power last year.

"It is a win-win situation for companies and customers," Li said.

Food waste is a severe problem around the world, with about 1.3 billion tons of food lost or wasted every year, which amounts to roughly one-third of all the food produced for human consumption, according to a report released by the United Nations' Food and Agriculture Organization in 2011.

Bayer hopes to cure what ails Chinese farms
Wheat harvest season in China



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Will Agrium Inc. Hit $125?

Shareholders of Agrium Inc. (TSX: AGU)(NYSE: AGU) are watching the stock trade at 2014 lows and wondering if they should buy more shares, sell the stock before it drops further, or simply hold on.

The stock has been under pressure lately because Agrium announced it would miss Q3 and Q4 earnings guidance due to the shutdown of its Vanscoy potash plant. An earnings miss is never good news, but in the case of Agrium, investors should take a close look at the details.

Here are the reasons why I think Agrium’s earnings could rebound significantly in the next 12 months.

Production growth

Agrium is near the end of a $2 billion expansion at the Vanscoy mine. Once the final tie-in is complete, the mine’s production capacity will increase by 40%.

A mechanical failure on the main hoist system occurred in July, forcing the company to fast-track the planned tie-in of the expansion project. The original shutdown was expected to take three to four months, but the equipment problem has extended the closure.

In the summer, Agrium indicated the plant would be back online by the end of November. Investors should prepare for that deadline to be extended when the company reports third-quarter earnings in the first week of November. Even if Vanscoy remains down for an extra month or two, the long-term benefit of the expansion is the most important aspect for investors.

The 40% additional production is coming on line just as the Potash market is rebounding. Uralkali, the world’s largest potash producer, said global potash demand could hit record levels by the end of 2014.

Wholesale prices are expected to rise as much as 10% in 2015.

On September 23, Uralkali announced a deal to sell a 12.5% stake of the company to China’s sovereign wealth fund, China Investment Corp. Analysts believe the stake is too small for the Chinese to dictate global prices.

Nitrogen market

Agrium’s nitrogen division is the largest part of its wholesale business. The company had an unplanned shutdown at its Caresland, Alberta, plant earlier this year. Lower production coupled with high natural gas input costs hurt nitrogen profits during the first six months of 2014.

Nitrogen prices are stabilizing, natural gas prices are lower than the first half of this year, and production through 2015 should be back at regular levels.

Retail strength

Agrium is North America’s largest retailer of farm products. The company also has an extensive network of stores in Australia and South America. In 2013, Agrium purchased the retail operations of Viterra. The company expects the largest synergy gains from the deal to come in 2015.

In the second quarter, Agrium’s retail division enjoyed a 28% year-over-year earnings gain. Record crops in the U.S. this year should be good new for the retail division going into 2015.

Dividend growth

Agrium pays a dividend of US$3 per share that yields about 3.6%. Cash flow available for payouts should increase as Vanscoy shifts from development to production. The payout ratio is currently 54%.

Short-term risks

A much longer delay in the start-up of Vanscoy could put extra pressure on the stock. Another tough winter in the prairies could also cause shipping issues similar to the ones experienced last winter when a railway bottleneck reduced the amount of product Agrium was able to transport from its facilities.

Should you buy?

If Vanscoy restarts on time, and revised earnings come in as expected, the stock could see a significant move heading into 2015. Otherwise, the shares will likely trend lower.

Agrium is trading at 11 times forward earnings and 1.7 times book. For long-term investors, the stock is probably a good buy at current levels, but it might be best to wait for the third-quarter earnings report.

Our top choice in this market

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Simply click here now for our FREE report and discover 1 top Canadian stock for 2014 and beyond!

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Enzyme breakthrough may boost biofuels

WEST LAFAYETTE, Ind. — Purdue researchers have discovered the structure of the enzyme that makes cellulose, a finding that could lead to easier ways of breaking down plant materials to make biofuels and other products and materials.

The research also provides the most detailed glimpse to date of the complicated process by which cellulose — the foundation of the plant cell wall and the most abundant organic compound on the planet — is produced.

“Despite the abundance of cellulose, the nitty-gritty of how it is made is still a mystery,” said Nicholas Carpita, professor of plant biology. “Now we’re getting down to the molecular structure of the individual enzyme proteins that synthesize cellulose.”

Cellulose is composed of several dozen strands of glucose sugars linked together in a cablelike structure and condensed into a crystal. The rigidity of cellulose allows plants to stand upright and lends wood its strength.

“Pound for pound, cellulose is stronger than steel,” Carpita said.

A large protein complex synthesizes cellulose at the surface of the plant cell. The basic unit of this complex is an enzyme known as cellulose synthase. 

The protein complex contains up to 36 of these enzymes, each of which has a region known as the catalytic domain, the site where single sugars are added to an ever-lengthening strand of glucose that will be fixed in the plant cell wall as one of the strands in the cellulose “cable.”

Carpita and a team of researchers used X-ray scattering to show that cellulose synthase is an elongated molecule with two regions — the catalytic domain and a smaller region that couples with another cellulose synthase enzyme to form a dimer, two molecules that are stuck together.

These dimers are the fundamental building blocks of the much larger protein complex that produces cellulose.

“Determining the shape of cellulose synthase and how it fits together into the protein complex represents a significant advance in understanding how these plant enzymes work,” Carpita said.

The findings could be used to redesign the structure of cellulose for different material applications, he said. 

For example, cellulose — the base for many textiles such as cotton and rayon — could be modified to better absorb dyes without chemical treatments. The structure of cellulose also could be altered to break down more easily for the production of cellulosic biofuels.

“For decades, we’ve been doing our best to replace cellulose and other natural products with compounds made from oil,” Carpita said. “Plant biologists are now beginning to do the reverse — combining new knowledge from genetics, genomics and biochemistry to make new kinds of natural products to replace those we now make from oil.”

Collaborators on the study include Anna Olek of Purdue’s Department of Botany and Plant Pathology; Catherine Rayon of the University of Picardie Jules Verne; Lee Makowski of Northeastern University; and Daisuke Kihara of Purdue’s Department of Biological Sciences and the Department of Computer Science.

The paper was published in The Plant Cell.

Funding for the research was provided by the Center for the Direct Catalytic Conversion of Biomass to Biofuels, an Energy Frontier Research Center based at Purdue’s Discovery Park; the National Science Foundation; the National Institutes of Health; and the National Research Foundation of Korea.

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Seed Makers Continue Offering Coated Soybeans

The largest U.S. seed makers will keep selling soybeans coated with a pesticide suspected of contributing to bee deaths even though the Environmental Protection Agency says the product doesn’t increase yields. 

Monsanto Co. (MON), DuPont Co. and Dow Chemical Co. all said they will still offer soybeans treated with neonicotinoids, an insecticide related to nicotine. The EPA on Oct. 16 said it found little or no increase in soybean yields from neonicotinoid seed treatments. 

The EPA is reviewing how pollinators are affected by neonicotinoids, made by Germany’s Bayer AG and Switzerland’s Syngenta AG. The European Union temporarily banned the chemicals in December after studies showed a link to Colony Collapse Disorder, a syndrome of unknown cause marked by disoriented bees failing to find their way back to their hives and dying. 

“Our data shows that these seed treatment products provide value to growers,” John C. Combest, a spokesman for St. Louis-based Monsanto, said today in an e-mail. 

DuPont will still sell neonicotinoid treatments because they protect soybeans from pests and protect yields, Jane Slusark, a spokeswoman for the Wilmington, Delaware-based company said in an e-mail. Dow Chemical also will continue offering seed treatments for customers who request them, Kenda Resler Friend, a spokeswoman for the Midland, Michigan-based company said in an e-mail. 

Public Comment 

DuPont and CropLife America, a Washington-based pesticide industry group, both said the research picture will be clearer after EPA collects public comments on its report. 

“A much more positive account of the value of seed treatments will emerge when a more robust body of information is considered,” Ray McAllister, CropLife’s senior director of regulatory policy, said in an e-mailed statement. 

Neonicotinoid seed treatments help control pests when crops are young and most vulnerable, McAllister said. Seed treatments also are a precise way to deliver insecticides while minimizing the risk of exposure to people applying them and non-target species, he said. 

The treatments were applied to about 30 percent of U.S. soybean acres on average in the five years through 2012, the EPA said in its report. 

To contact the reporter on this story: Jack Kaskey in Houston at jkaskey@bloomberg.net

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Adama (Formerly MANA) Acquires ChinaChem

ADAMA Agricultural Solutions Ltd. (formerly Makhteshim Agan Industries) and China National Agrochemical Corporation (CNAC), a strategic business unit of China National Chemical Corporation (ChemChina) and Adama's parent company, today announced the signing of a definitive agreement for Adama to acquire control of businesses in China (the Chinese businesses) with 2013 total sales of approximately $850m. 

Once finalized, the acquisition is expected to raise the company's revenues close to $4bn and give the company a major foothold in the Chinese market, which is expected, over time, to become one of the Company's key growth engines. Adama expects to close the transaction during the first half of 2015. 

"This transaction marks the realization of the vision set forth in our acquisition of a majority stake in Adama in 2011. We believe there is remarkable potential emanating from the combination between Adama and the Chinese businesses it is acquiring," said Yang Xingqiang, Chairman of Adama. 

"These businesses are key players in the Chinese agrochemical industry, and we believe they will provide Adama with a significant foundation for a leading commercial and operational platform in China. When combined with Adama's industry leading capabilities across the entire value chain, from its global commercial footprint, to R&D and manufacturing, this combination holds great promise, over time, to improve and simplify the lives of farmers in China and worldwide." 

"This is the most significant milestone in the evolution of Adama's six-decade history, and in our partnership with ChemChina," said Chen Lichtenstein, President and CEO of Adama. 

"The signing of the agreement with CNAC is a first step towards the creation of the only truly integrated China-Global player in the crop protection industry. Due to China's unique role in our industry, as both one of the largest and fastest growing global markets, and its substantial world-wide leadership in off-patent product development, launch and manufacturing, we view our strategic combination as facilitating our transformation into the most competitive, differentiated, and largest off-patent crop protection provider. 

"Furthermore, we believe that we will be uniquely positioned to become a leading player in the still fragmented domestic Chinese crop protection market." 

Through the acquisition, Adama will acquire 100% of each of Jiangsu Anpon, Jiangsu Maidao, Jiangsu Huaihe (collectively called the Huai'an Hub) and Jingzhou Sanonda Holdings (Sanonda Holdings), for a cash consideration of approximately $323m, together with assumed net debt of approximately $300m. The Huai'an Hub is based in the vicinity of Huai'an City in Jiangsu Province, the heart of the agrochemical industry in China. Sanonda Holdings owns a 20% stake in Hubei Sanonda Ltd. (Sanonda) a company publicly traded on the Shenzhen Stock Exchange, and its acquisition by Adama will increase Adama's existing stake in Sanonda from 11% to 31%, with Adama thereby becoming the single largest shareholder in the company. 

The transaction is expected to close during the first half of 2015, following Adama's intended US IPO, and is subject to certain customary closing conditions, including receipt of all required regulatory approvals. 

Expected Benefits of the Acquisition 

Adama anticipates that it will be uniquely positioned to take advantage of the following opportunities: 

*China Market Access - Establishing a Robust Foundation for a Leading Commercial Platform in the Chinese Market: Adama intends to use its global registration, marketing and distribution know-how and expertise to gradually build-up the development, registration and distribution capabilities of the Chinese businesses it is acquiring into a leading Chinese domestic commercial platform. 

*Enhance Global Product Offering: As a result of the acquisition, Adama's ability to develop and launch advanced off-patent products will be enhanced via a new global R&D hub currently being established, with nearby modern synthesis facilities and a global formulation center, all of which will operate under Adama's strict quality assurance. 

*The acquisition is expected to provide Adama with unique access to, and a competitive, backward-integrated cost position in, certain key agrochemical molecules that the company currently purchases from third parties. This will assist Adama, after obtaining the required registrations over the next few years, to increase both the sales and profitability of those products on a global basis. Adama also intends to use its global distribution channels to expand sales of various products that the Chinese businesses currently export through third parties. 

*Operational Optimization: Given the industry and Adama's growing proportion of products that are either produced or procured in China, creating a global production, formulation, packaging and logistics center in China is expected to provide the most appropriate location for optimizing operations and shortening supply lines, thereby increasing flexibility and reducing inventory and working capital, shipping, and other logistics costs. 
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Crop Storage Issues May Be Less Severe Than Anticipated

The large size of fall harvested crops in the U.S. have raised very real concerns about the ability to readily store the record supply of crops available this year. Supplies that exceed permanent storage capacity require the use of temporary storage facilities or may require delayed harvest in some circumstances. However, weather related harvest delays to date and a rapid rate of consumption mean that overall storage issues may be less severe than feared this year.

The supply of crops to be stored in the fall of the year consists of the inventory already in store as well as the newly harvested crops. The USDA's September Grain Stocks report showed the inventory of feed grains, wheat, and soybeans on September 1, 2014 at 3.528 billion bushels, 422 million bushels larger than the inventory of the previous year. The October Crop Productionreport estimated that the corn, sorghum, and soybean harvest would total 18.806 billion bushels, 1.134 billion bushels larger than last year's harvest. The fall supply of feed grains, wheat, and soybeans is estimated to be 22.334 billion bushels, 1.556 billion bushels larger than the supply of a year earlier. The majority (62 percent) of the total year-over year increase in supply comes from larger corn supplies.

Each year, the USDA provides an estimate of on-farm and off-farm grain storage capacity based on surveys conducted in December. Total storage capacity as of December 1, 2013 was estimated at 23.44 billion bushels. Some additional capacity has been added in 2014, but the total fall crop supply this year likely represents about 95 percent of total storage capacity. While overall storage capacity appears to be fully adequate to handle the available crop supply, issues develop because some of that capacity is occupied by other crops and more importantly the location of available storage capacity does not always align with the location of fall harvested crops. Still, not all of the supply has to be stored. Harvest occurs over a relatively long period of time and crops are continually consumed.

Harvest has proceeded more slowly this year than in the recent past due to wet weather in some major producing areas. As of October 12, the USDA estimated that only 24 percent of the corn acreage had been harvested, compared to the previous 5-year average of 43 percent. That average includes 2009 when only 13 percent of the acreage had been harvested as of the same date. Soybean harvest has been a little more timely, but was estimated at only 40 percent complete as of October 12, compared to the previous 5-year average of 53 percent. The slower pace of harvest has allowed for more crops to be consumed as harvest progresses, reducing the overall requirement for storage space.

Based on USDA weekly export inspection estimates, exports of feed grains, wheat, and soybeans from September 1 through October 16 totaled about 625 million bushels. Based on the USDA's projection of feed and residual use of corn for the 2014-15 marketing year and the recent seasonal pattern of that use, about 1.225 billion bushels of corn were likely used in that category during that same time period. Similarly, about 800 million bushels of corn were likely used for domestic food and industrial products, mostly ethanol. Feed and residual use of other feed grains and wheat was likely near only 50 million bushels as residual use of wheat is often negative during the fall quarter. Based on the National Oilseed Processor Association (NOPA) estimate of the domestic soybean crush for September and assuming a normal seasonal increase in October, about 170 million bushels of soybeans were likely processed during that time period. Based on a typical seasonal pattern, seed, feed and residual use of soybeans was likely near 150 million bushels. Food and industrial use of wheat and feed grains other than corn would have been near 180 million bushels if use followed a typical seasonal pattern.

In total, it is likely that consumption of feed grains, wheat, and soybeans during the period from September 1 through October 16 totaled about 3.2 billion bushels, or about 69.6 million bushels per day. That pace of use continues so that nearly 16 percent of the total fall crop supply has already been consumed. That magnitude of consumption has substantially reduced the requirement for crop storage capacity, resulting in a modest strengthening of the corn and soybean basis in many areas.

While overall crop storage issues may be less severe than anticipated, regional issues persist. In addition, a more rapid pace of harvest, particularly for corn, is expected to occur this week and beyond as weather conditions remain favorable over much of the production area. A rapid pace of harvest would be expected to keep basis levels for corn and soybeans seasonally weak. A typical post-harvest recovery in basis levels, however, is expected.

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Informa predicts record US soybean acres in 2015

Informa predicts record US soybean acres in 2015 | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it

Farmers will likely shift acres from corn to soybeans in 2015 because of the more favorable economics, a report from private analytical firm Informa Economics said.

Informa forecasts corn acreage will decline 3.1 million acres from 2014 to 87.8 ma, while soybean acreage will climb 4.3 ma to 88.5 ma.

“The expectation that corn acres will be less than 2014’s 90.9 million acres helps to give corn prices support at these lower levels, but is not necessarily bullish by itself,” Hultman said. “The expectation that soybean acres will be increased from 2014’s planting of 84.2 million acres is bearish as it adds to notions of even higher soybean supplies in the fall of 2015.”

Informa said that using its acreage projections and assuming normal abandonment and trendline yields, corn production comes in at 13.4 billion bushels and soybean production at 3.9 billion bushels.

Its acreage analysis for row crops was largely based on a profitability analysis and economic and weather conditions.

“Of the major row crops, soybeans continue to have the highest implied net revenue return per acres,” Informa stated. A chart indicated soybeans’ annual planning net revenue is about $200 per acre while corn’s is about $29 lower. “Compared with last season, the current incentive to plant corn is lower. As a result, Informa expects that most acres shifted from corn will be planted to soybeans. Informa expects some cotton acreage to shift to soybeans as well due to the economic incentive to plant soybeans relative to cotton.”

Informa sees cotton acreage declining 1.6 ma from 2014 to 9.5 million acres. According to Informa’s net revenue chart, of the major row crops, cotton is the only one showing negative anticipated revenue for 2015.

Farmers aren’t necessarily in agreement on the topic, according to one conversation on Twitter. Cory Ritter, a farmer in Blue Mound, Ill., argues it’d be tough for some farmers to increase soybean acres next year if they already made large increases in 2014. Several others added they’re going to stick to their rotations.

Kyle Wendland, who farms near Fredericksburg, Iowa, thinks there are plenty of reasons, mostly economic, for farmers to increase soybean production. Traditionally, his area is heavy on corn-on-corn production. Given the revenue incentives, there’s lots of land that could be planted to beans for the first time in a while.

Some farmers pointed to stubbornly high corn seed costs as a reason to plant more beans. Others argued that double-crop bean acres are likely to be higher next year.

While it’s not a perfect benchmark, Hultman said the new-crop soybean-to-corn price ratio for 2015 is at 2.46, which is more in line with historical levels and less than the current 2.76 ratio. The higher the ratio, the higher the economic incentive is to plant soybeans over corn.

“More importantly, Dec 2015 corn is priced at $3.95, which is even with USDA’s estimated production cost per bushel for 2014-15,” Hultman said. “Nov 2015 soybeans are priced at $9.73, which is below USDA’s estimated cost per bushel of $10.14 for 2014-15. This suggests a slight edge for planting more corn, but the problem here is that USDA’s soybean cost estimate may be low.

“I would say that it is too early yet to confidently know which direction plantings will go next spring.”

Informa also released its forecast for wheat acreage based on its surveys, and it’s little changed from 2014. Overall acreage was estimated at 56.4 ma, about 400,000 acres less than last year. Hard red winter wheat acreage dropped about 300,000 acres to 30.3 ma while soft red winter wheat acreage is expected to total 8 ma, down 238,000 acres.

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Tendering process underway for CWB’s future

CWB has initiated a formal tendering process aimed at identifying a potential corporate partner interested in either buying the company, merging with it or entering some other type of partnership arrangement.

Federal agriculture minister Gerry Ritz confirmed Oct 17 that the tendering process “has been underway for some time” and is being adjudicated by a nationally recognized accounting firm.

The accounting firm, believed to be Deloitte Canada, was hired by CWB earlier this year to accept bids and identify potential corporate partners.

Ritz did not say when the tendering process was scheduled to conclude.

“It (the process) has been underway for some time,” he told reporters in Saskatoon.

“As I understand it, the CWB will cast the net as widely as possible. They’re using an accounting firm so that there’s fairness in these tenders coming in. It will be the CWB bringing forward what they think is the best case scenario.”

Terms of the tender, including the deadline for submissions, have not been made public. CWB has declined to comment on the process.

It is believed the tendering process will be used to identify a short list of potential corporate partners, which will then be involved in more in-depth negotiations.

CWB will ultimately select the partner and the deal that it considers most beneficial for the organization and western Canadian farmers.

CWB must submit a privatization plan to the federal government by July 31, 2016. Sources in the industry suggest the privatization plan will be completed and submitted to government well in advance of that deadline.

Ritz said he was aware of a package that Saskatoon-based Farmers of North America (FNA) is currently putting together.

FNA is attempting to raise as much as $380 million in farmer capital to build a grain company and/or buy a controlling stake in CWB.

Ritz said FNA officials were late coming to the table, despite being informed eight to 10 months ago that a tendering process might be initiated.

“I first spoke to (FNA executives) Jim Mann and Bob Friesen about the possibility of this eight or 10 months ago … so they’ve taken quite a while to throw their hat in the ring,” Ritz said.

“They’re a little slow off the starting line, but that doesn’t mean their issues aren’t taken seriously.”

Ritz said tendering bids are open to all types of organizations, including multinational grain companies and farmer-supported organizations based in Canada.

“I think anything is on the table,” he said.

“I wouldn’t discount any (bidder), but at the end of the day, we have to look at viability.”

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No export bonanza this year from record U.S. harvest

No export bonanza this year from record U.S. harvest | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it

 The largest U.S. grain harvest in history has pushed prices to four-year lows, which usually means a sales bonanza for the world's largest food exporter. Not this year.

Traditional rivals and aggressive new competitors with their own huge harvests, such as Ukraine and Russia, are leveraging the dollar's strength to snap up a bigger share of a market that is shrinking as importers themselves boost output.

In addition, a clogged domestic transport system has pushed rail and river freight rates sky-high, making it expensive to bring the mountains of grain to ports for shipping. That is driving down what farmers get paid by exporters, encouraging many to hold on to their crops hoping that U.S. rivals will eventually run down their stocks and bids for their grain will pick up.   

"We're going to get this crop harvested, put it away and our exports are going to pick up," said Jerry Mohr, president of the Iowa Corn Growers, who farms 1,100 acres of corn and beans near Davenport, Iowa. 

Mohr hauls his crops to a nearby elevator on the Mississippi River, where it is loaded on barges for shipment to export facilities at the Gulf Coast. He expects prices there to weaken in coming weeks when the mammoth crop clogs the pipeline.

"There is going to be so much corn around and no place to go with it," he said.

Rail congestion caused by soaring demand for hauling crude oil by rail sent rates from the usual $200-300 per a 100 ton rail car just little over a year ago to around $5,000 this harvest season. Barge costs for harvest time shipping hit records in some areas this year.

"Agriculture has not paid that price before," said analyst Stephen Nicholson with Rabobank, a major farm lender.

As U.S. share of the global export market shrinks, analysts expect the resulting supply backlog will mean more soybeans planted in the United States and less corn and wheat next season. That will add to the shift in world grain trading patterns, with the Black Sea region continuing to be an aggressive world player in grains.

The mountains of grain left behind will be hard for the domestic market to absorb, weighing heavily on the farm economy and pressuring everything from farmland values to farm machinery sales.

Exports of corn, the biggest U.S. cash crop, are expected to drop 9 percent this season to 1.75 billion bushels, according to the U.S. Department of Agriculture. Big crops overseas will reduce total world imports by 8 percent to 4.4 billion bushels.

Corn prices at the U.S. Gulf Coast export terminals are now around $12 per tonne higher than in Ukraine and Brazil's big Paranagua port, and $17 above Argentine exports, according to Reuters data. Ocean freight costs from the United States are not cheap enough to offset those price differences.

Several years of high prices, bolstered by growing demand from China and an expanding biofuels industry, encouraged farmers worldwide to plant more crops and invest in the infrastructure to move them. Competitors such as Brazil, Ukraine and other Black Sea producers will start running out of corn supplies by February or March, giving U.S. players a chance to return to the game, grain analysts say.

"I think there is steady demand moving forward in January, February and March but not anything that's going to knock our socks off," said one U.S. wheat exporter who declined to be named. "It's still a function of cheap Black Sea prices and European prices," he added.

Combined corn, soybean and wheat exports from the United States are projected to make just 30 percent of world trade this season, the lowest U.S. market share on record for a non-drought year.

   

FARMLAND VALUES, EQUIPMENT SALES SUFFER

Low grain prices have already stalled a rally in farmland values while farm equipment sales have slumped, prompting market leader Deere & Co to idle several plants and lay off 1,000 workers.

It is a similar story for wheat, even with domestic output falling 5 percent this year to 2.04 billion bushels, the USDA expects end-season stocks next June to rise 11 percent.

"The Ukrainians, the Brazilians, the Argentineans are cheaper than we are in corn. The Russians and everyone else is cheaper than we are in wheat," said Dan Basse, head of AgResource, a market adviser in Chicago.

"We believe USDA's export number could be 100 to 150 million bushels too high on corn. We think their wheat export number is 25 million bushels too high."

The USDA is expecting wheat exports to drop 21 percent this season to 925 million bushels, the lowest in five years.

And while the USDA forecasts soybean exports to rise 3 percent to 1.7 billion bushels thanks largely to China's guzzling of the edible oil and livestock feed made from the oilseed, it also predicts U.S. end-season stocks to rise almost 400 percent.

The build will come partly because Brazil's exports will be huge again this year after rising 30 percent over the last two years and partly as China itself is building up stocks.

"I think it's more an issue of the ample supplies of competitive stocks than it is about our record crop and our large potential export surplus," said Rich Feltes, vice president of commodity research at brokerage RJ O’Brien.

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Farmers May Reap Subsidy Boom on Record Crops

A record U.S. harvest has pushed crop prices so low that taxpayers may pay billions of dollars more to subsidize farmers than anticipated just months ago, thanks in part to changes Congress approved this year.

Lawmakers passed a five-year farm law in February and hailed its projected savings in subsidies of $14 billion over a decade. The forecast was based on farmers getting paid more for their crops. Instead, prices have fallen and may trigger subsidies the law aimed to reduce.

“This was a bill based on false premises of fake savings,” said Josh Sewell, a policy analyst with Taxpayers for Common Sense in Washington. “The prices Congress used to calculate the bill’s cost were divorced from reality.”

The bill, one of the few bipartisan measures Congress passed this year, could end up costing taxpayers billions of dollars more than expected after legislators bet commodity prices would stay high and states would end programs that qualified them for higher food stamp spending.

In reauthorizing farm policies, Democrats and Republicans crafted a compromise to overhaul programs that protect farmers from market swings or bad weather. The law replaced direct payments with programs tied to price and revenue, and raised the threshold at which farmers would get a subsidy when commodity prices fall.

Further savings were projected from spending less on food stamps, based on an assumption states would exit an aid program as eligibility rules were tightened. Most states, however, defied predictions of budget analysts and increased their contributions to “heat-and-eat” aid programs, erasing much of $8.6 billion in projected savings.

‘Very Premature’

“It’s very premature to speculate about the farm bill savings when major programs haven’t even gone into effect yet,” Rachel McCleery, spokeswoman for Senate Agriculture Chairwoman Debbie Stabenow, a Michigan Democrat, said in an e-mail. Farmers will have until March to select from new subsidy options.

A drop in crop prices, combined with subsidies added in the new bill, may more than double payments in 2015 from what lawmakers anticipated, according to one estimate. Making matters worse, the government has proposed lowering a requirement to blend corn-based ethanol into gasoline, which may reduce demand for the grain.

Anticipated Savings

Payments to growers of corn, peanuts and other crops may reach $6.5 billion for this year’s harvest, or about $4 billion more than lawmakers anticipated in the farm bill, said Vincent Smith, director of the Agricultural Marketing Policy Center at Montana State University.

U.S. farmers are growing more corn than ever. The USDA this month estimated a record yield of 174.2 bushels an acre. Such bumper crops may lower Deere & Co. (DE) tractor sales along with Monsanto Co. (MON) seed revenues, agricultural economists said.

“If we keep producing the way we have, we will see some very low prices, and we will be in for a scary time,” said Harwood Schaffer, an economist at the Agricultural Policy Analysis Center at the University of Tennessee.

Congress this year increased the prices that would prompt government subsidies, making such payouts both potentially larger and quicker to kick in.

Previously, corn farmers were paid when the price fell below $2.63 a bushel. Now, support may start when prices slump under $3.70. On the day the bill passed, corn traded at $4.3575.

Low Prices

Futures traded in Chicago closed Oct. 16 at $3.5225 a bushel, below the new trigger and above the previous benchmark. The price is down 10 percent this year, and touched a five-year low $3.1825 on Oct. 1. The USDA predicts an average price in the year ending Aug. 31 of $3.40, the lowest since 2006.

Wheat, the fourth-biggest crop, is below the threshold for subsidies. Rice and peanuts crop prices also may spur payments, as harvests outstrip demand, Smith said.

Some producers could be at risk, said Chip Bohling, who grows 1,600 acres of corn, soybeans, wheat and sorghum near Newburg, Maryland, about 30 miles south of Washington. He said low prices may be short-lived as buyers, including ethanol plants, step in to generate more demand.

Bohling, who sells grain to nearby Perdue Farms Inc. for chicken feed, this year started supplying a biofuels plant that opened near Richmond, Virginia.

“Farmers are going to receive more in government subsidies than we anticipated,” said Bohling, who next year will be president of the National Corn Growers Association advocacy group. “We didn’t need corn at $8, but we don’t need at $3 where it is now either. It needs to be $5 or $6 a bushel for a farmer to make a living on it.”

Crop sales overseas should pick up as prices fall and renewed demand for feed should boost the farm economy, Agriculture Secretary Tom Vilsack said in an interview last month. “I’m not pessimistic about the situation,” he said.

Agricultural trade in 2015 will be $144.5 billion, second-highest on record, the USDA said in August. Record pork exports in April drove hog futures to a quarter-century high. 

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CP Rail ends takeover talks with U.S. railway CSX

CP Rail ends takeover talks with U.S. railway CSX | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it

Canadian Pacific Railway Ltd. says talks with potential takeover target CSX Corp. have broken off.

Calgary-based CP said on Monday that “exploratory conversations held with CSX Corp. about a possible business combination have ended. No further talks are planned.”

The Canadian rail giant did not provide reasons for the talks’ end.



Previously, neither CP nor Jacksonville, Fla.-based CSX chose to comment on reports that Florida-based company had rejected a takeover offer from CP.

CP said on Monday it proposed “a coast-to-coast combination that would improve service, promote competition, alleviate congestion in North America – specifically the key Chicago gateway – and generate significant shareholder value. Such a business combination would offer creative alternatives for shippers, greater fluidy, increased capacity and improved efficiency industry-wide.

“While regulatory concerns appear to be a major deterrent for many railroads considering combinations, CP believes that given the right structure between the right players, and having thoughtful considerations and remedies to address shipper concerns, regulatory approvals are achievable.”

The North American rail sector faces significant challenges in moving more freight than ever and the need to move even more as oil production, crop yields and consumer-demand grow will only heighten existing problems unless “solutions aren’t put in place immediately,” CP said.

“A pro-competition, customer-friendly, safety-focused railway combination is one such solution that could not be ignored on its merits by regulators.”

CP chief executive officer Hunter Harrison is scheduled to discuss the issues of railroad mergers and acquisitions and a North American-wide transportation policy on a conference call Tuesday, on which third-quarter financial results are also expected to be discussed.

Mr. Harrison and other industry executives have been particularly critical of the heavily congested Chicago hub, which plays havoc with their operations and delivery schedules.

Analysts have pointed out that CP could avoid Chicago altogether in a tie-up with CSX, travelling east through Winnipeg, on to Montreal and then south to Albany, N.Y. CP would then have access to CSX’s lines going to refineries in New Jersey and the Gulf Coast.

Getting a bigger share of the growing volumes of crude oil now moving by rail would be one of the benefits of a merger with CSX.

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New Holland Combine Sets Guinness Harvest Record

New Holland Combine Sets Guinness Harvest Record | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it

A wheat field in Lincolnshire, United Kingdom, set the scene for New Holland Agriculture to set a new Guinness World Records title. In an 8-hour span a New Holland CR10.90 combine harvested 797.656 tonnes (879.265 tons) of wheat. Roughly, that’s the equivalent of 28 trailer-truck loads.

Launched in July 2014, the CR10.90 has a maximum power of 653 horsepower and is built at the New Holland Agriculture Centre of Harvesting Excellence in Zedelgem, Belgium. It is the world’s first Class 10 rotary combine and is equipped with Twin Rotor technology, which was developed by New Holland 40 years ago.

On the day the record was set, the CR10.90’s average output was 99.7 tonnes per hour and peaked at 135 tonnes per hour in a crop yielding an average of 9.95 tonnes (10.99 tons) per hectare. That works out to 4.45 tons per acre or 163.5 bushels an acre. The record was achieved using only 1.12 litres of fuel per tonne of grain harvested.

The extra-long 10-metre unloading auger  and super-fast unloading speed of 142 litres per minute made grain handling even easier. The model used to set the record was also equipped with IntelliSteer fully integrated auto guidance which ensures an accuracy of 1-2 centimetres. This optimizes the effectiveness of the 13.7 metre 840CD draper-header.

“The Guinness World Records title has further reinforced the CR10.90 combine as New Holland’s flagship harvesting product, and cemented its position as the leading combine harvester,” said Carlo Lambro, Brand President of New Holland Agriculture, upon hearing the news.”

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