Grain du Coteau :...
Follow
Find
16.0K views | +15 today
Scooped by Stéphane Bisaillon
onto Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar)
Scoop.it!

Despite Drought, USGC Report Indicates High Quality U.S. Corn Crop

The overall quality of the 2012 U.S. corn crop is high and improves upon last year’s very good marks across a range of test factors, according to the U.S. Grains Counci...
more...
No comment yet.
Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar)
Your new post is loading...
Your new post is loading...
Scooped by Stéphane Bisaillon
Scoop.it!

Ukraine could lose over 500,000 tonnes of grain due to war

KIEV (Reuters) — Ukraine could lose 500,000 to 550,000 tonnes of grain out of a projected 60 million tonne harvest, because of fighting in the country’s east, Ukrainian Agriculture Minister Ihor Shvaika said on Friday.

“Some 500,000 to 550,000 tonnes of grain. That’s the potential loss due to the anti-terrorist campaign,” he told reporters.

Shvaika also said the hostilities had forced producers and traders to change the way of grain supplies for exports.

Ukraine has threshed a total of 20.5 million tonnes as of July 24.

The volume included 14.2 million tonnes of wheat and 5.9 million tonnes of barley.

The ministry has said Ukraine exported 1.3 million tonnes of grain, mostly barley, in the first 23 days of July, the first month of the new 2014-15 season.

Ukraine exported 32.3 million tonnes of grain in 2013-14, including 20.3 million tonnes of corn, 9.2 million tonnes of wheat and 2.4 million tonnes of barley.

more...
No comment yet.
Scooped by Stéphane Bisaillon
Scoop.it!

Farmland REIT debuts IPO as bubble fears deflate IPO Report

Farmland REIT debuts IPO as bubble fears deflate IPO Report | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it

NEW YORK (MarketWatch) — If there is a bubble in farmland values, you wouldn’t know it by looking at the stock-market debut of Farmland Partners Inc. on Friday.

The first day of trading for Farmland FPI -4.66% , which plans to get taxed as a real-estate investment trust, was hardly frothy. The stock ended at $12.98, down $1.02, or 7.3% below its $14 offering price. The broader market dropped sharply, sending the Russell 2000 RUT -1.00%  down 1.4%, though some IPOs surged.

Farmland, which priced its offering late Thursday after delaying it a day, raised a net $49.5 million as it sold 3.8 million shares of common stock.

CEO Paul Pittman put the early trading weakness down to overall stock-market sentiment, noting that “people are pretty nervous.”

In addition, a farmland-focused REIT is somewhat new and unusual, Pittman said in a phone interview. That creates a learning curve for investors who need to be taught that “this is not a land-flipping and trading mentality; this is about building long-term value in an asset class that for all kinds of macro reasons we believe is certainly going to keep appreciating.”

Back to bubble talk

Farmland’s debut, while overshadowed by more high-profile launches in a busy week for IPOs, offers a good excuse to revisit what’s been going on in terms of farmland values, which saw an extraordinary boom over the last decade. See: Farmland bubble? 10-year rise raises red flags.

Some bankers, academics and Federal Reserve officials had warned that a continued surge higher in the face of weaker commodity prices and other headwinds could lead to a bubble.

A bubble occurs when prices become divorced from fundamentals, creating a cycle in which buyers rush in purely in anticipation of future price gains. The nearly unbroken 10-year rise in prices still looks impressive, particularly compared to other parts of the real estate market. But relieving worries that prices were on the verge of entering bubble territory, prices decelerated late last year and in early 2014.

FPI 12.07-0.59-4.66% 
Farmland’s tough IPO debut

The fact that land prices have softened as headwinds have increased should offer some reassurance to experts who had feared a potential bubble was building in the heartland. Paul Ashworth, chief U.S. economist at Capital Economics, said he expects the slowdown in the growth rate of farm prices to turn into an outright decline this year.

But he doesn’t expect it to turn into a bust.

“For a start, with the Fed focused on the labor market, there is little prospect of any sharp rise in interest rates, which was the principal reason for the slump in prices in the 1980s. The stabilization in crop prices is also encouraging,” Ashworth said in a note with the title: “Farmland: Is the bubble bursting?”

Others contend there never was a bubble nor much threat of one developing.

“I actively rail against the use of the word ‘bubble,’” said Bruce Sherrick, professor of farmland economics at the University of Illinois at Urbana-Champaign and director of the TIAA-CREF Center for Farmland Research.

Sherrick argues, for example, that the implied capitalization rate — or rate of return on a real-estate investment property — for farmland largely mirrors the return for other longer-term alternative investments. In the 1980s, that relationship was far out of whack.

Bubbles are often not evident until they burst. In the 1980s, farmland values plummeted. Leveraged landowners were forced to sell, creating a vicious cycle that devastated the rural economy.

Page 2 of 2

IPO ReportArchives | Email alerts

April 12, 2014, 8:31 a.m. EDT

By William L. Watts, MarketWatch

In the 80s, a 20% land value decline would cause people to go bankrupt. Now, a 20% land value decline isn’t going to be even noticed on some folks’ balance sheets

-- Bruce Sherrick, University of Illinois at Urbana-Champaign

The ingredients for such a bust aren’t evident now, Sherrick said. A look at the financial profiles of landowners indicates a 20% drop in land values would do little harm to balance sheets, while a fall on that scale in the 1980s was often catastrophic.

“The distance to the edge of the cliff, if you will, is much greater than it was in the 80s,” he said, in a phone interview. “We really have deep collateralization in anything that has any debt. In the 80s, a 20% land value decline would cause people to go bankrupt. Now, a 20% land value decline isn’t going to be even noticed on some folks’ balance sheets.”

Sherrick and other farmland experts note that lenders have been much more conservative, limiting the amount per acre they’re willing to lend. At the same time, yield-hungry buyers have often been eager to pay cash to acquire land.

At the same time, downside potential in farm income is now significantly limited by crop insurance. Around 80% of crop farmland is effectively covered by crop insurance, ensuring producers will receive around 75% of expected revenue in the event of a crop failure, he said.

Broader concerns about a retreat in farm income as commodity prices declined from record levels in 2013 are also misplaced, Sherrick said. While farm income is set to fall 20% to 30% this year, the level remains well above the mean, he notes.

Indeed, the Agriculture Departmentforecast 2014 net farm income of $95.8 billion, down 26.6% from the 2013 estimate of $130.5 billion, but still $8 billion higher than the previous 10-year average.

Corn, soybean prices have surged

Meanwhile, commodity prices have regained some of the ground lost in late 2013 as corn and soybean prices sank under the weight of a large U.S. crop. On a most-active basis, corn futures are up around 18.5% since the beginning of the year, reclaiming the $5 a bushel level, while soybeans have risen more than 13% over the same period to trade around $14.65 a bushel.

LAND 12.17-0.11-0.90% 

Pittman said that with the rebound in commodity prices, much of the softness seen in farmland prices late in 2013 and early 2014 has evaporated, with some record sales recorded in some counties in eastern Iowa and in Illinois.

Pittman emphasizes, however, that the occasional record-breaking sale shouldn’t be taken as representative of the overall market. As other observers have noted, individual parcels of land can often bring extraordinary prices if caught in a bidding war between two competing farmers eager to grab neighboring or nearby land that likely won’t come back on the market for decades.

So where are prices headed? Pittman said he thinks the direction is clearly up, but he’s not anticipating the gangbuster gains of the past decade or so. Such a scenario would raise the threat of a bubble.

Instead, he contends that solid global demand, driven in part by emerging economies, and a steady reduction in crop-producing acres around the world should allow prices to continue to appreciate at a pace of around 5% to 6% a year.

Pittman is correct when he calls the Farmland REIT rare. Last year, Gladstone Land Corp. LAND -0.90% became the first publicly traded farmland REIT. Graceland is down nearly 20% since the beginning of the year. See Amy Hoak: Investing in farm, single-family home REITs.

Farmland made its debut alongside two other offerings Friday. There was no dented enthusiasm for shares of restaurant-chain Zoe’s Kitchen Inc. ZOES +2.77%, which zoomed up 65% from its initial offering price of $15 a share to close at $24.72. Enable Midstream Partners LP ENBL -0.35%  rose 11% from its offering price to settle at $22.20.

Farmland, whose current holdings are concentrated largely in the Corn Belt, is looking to use the proceeds to expand its farmland holdings in the Delta region; the Southeast, including North Carolina and South Carolina; and the Western Plains.

more...
No comment yet.
Scooped by Stéphane Bisaillon
Scoop.it!

Farm Commodities | Corn Wheat Soybeans Heating Oil | Big Pat's Blog SETTLEMENTS-2014 JULY 24 THURSDAY

SETTLEMENTS-2014 JULY 24 THURSDAY
market-prices supply/demand with relative strength trading
trend line: joins highs with highs, lows with lows=direction 
trading-movement+activity+length of hilo price range+force 
targets-price projections (up) or (dn) in direction trend line
Corn-  
net position/last tues, big users-less short, funds-less long
trend line-DN+open interest-UP+supply-UP
trading-flat+trade off+accelerating+@trend line as support
targets, 406-377-328-290            momentum=bearish
Wheat- 
net position/last tues, big users-more short, funds-more short
trend line-DN+open interest-UP+supply-UP
trading-dn/flat+spiked+accelerating+above 519 support
targets, 570-541-519-497            momentum=less bearish
Soybeans
net position/last tues, big users-long, funds-less long
trend line-DN+open interest-UP+supply-UP
trading-dn/snaking+spiked+accelerating+@double resistance
targets, 1170-1142-1097-1061    momentum=mixed             
Cdlr- 
net position/last tues, big users-more short, funds-long
trend line-DN+open interest-DN
trading-flat+net selling+acceleration+move dn signal
targets 9309-9287-9250-9220     momentum=bearish
Heating oil-
net position/last tues, users-same short, funds-less long         
trend line-DN+open interest-DN
trading-flat+net selling+decelerating+break out-no confirmation
targets 288-280-267                    momentum=bearish
more...
No comment yet.
Scooped by Stéphane Bisaillon
Scoop.it!

FPCCQ : Le Quotidien du Vendredi 25 juillet 2014

Vendredi 25 juillet 2014

 

 

La bourse a connu une journée calme et mixte à Chicago. Le maïs et le blé ont clôturé en hausse; les contrats à terme du soya de l’ancienne récolte ont fait des gains tandis que ceux de la nouvelle récolte ont chuté. Les prévisions météos demeurent favorables pour le Midwest.

 

L’Europe a haussé ses estimations pour la production de maïs à 70,8 millions de tonnes (MT), soit 8,4 % de plus que l’an passé, ainsi que pour l’orge à 55,9 MT, en baisse de 5,9 % par rapport à 2013. La prévision de la production de blé tendre est inchangée à 137,5 MT, soit une hausse de 1,9 % par rapport à l’année dernière. Après un démarrage ralenti par les précipitations, le battage du blé tendre s’est accéléré en France avec le temps qui est devenu plus sec, atteignant 44 %. La qualité des céréales demeure toutefois incertaine.

 

Dans l’hémisphère sud, l’attention est déjà tournée vers le soya de l’an prochain, qui sera semé à l’automne. Safras et Mercado estime que les producteurs brésiliens devraient de nouveau privilégier l’oléagineux aux dépens du maïs en raison du rapport des prix. La superficie du soya pourrait augmenter de 4 %. En considérant des rendements favorables, cela donnerait un nouveau record de production de plus de 94 MT comparativement à 88,6 MT en 2014. C’est intéressant de noter que la chute des prix ne semble pas décourager les intentions d’ensemencements au Brésil.

 

Nouveau format du rapport "Le Quotidien": Le nouveau site Internet de la Fédération est maintenant en ligne.

more...
No comment yet.
Scooped by Stéphane Bisaillon
Scoop.it!

U.S. grain farmers resort to giant storage bags to avoid cheap sales

(Reuters) - As U.S. farmers turn in record grain crops this autumn, many will have a powerful new tool - giant sausage-shaped storage bags - to help them avoid the lowest prices in years and gain more control over trade with giants such as Cargill Inc.


Demand has surged this summer for the white polyethylene bags the length of a football field and the equipment required to fill them, according to manufacturers and wholesalers.


They allow farmers to store millions of bushels of corn and soybeans at a fraction the cost of conventional silos and far more efficiently than leaving grain in the open air.


The bags, which are about 300-foot (91-m) long and 10 feet in diameter, are common on the Argentine Pampas but until recently a rare sight in the U.S. Midwest, where the expansion of big elevators and 50-foot high silos has generally kept pace with ever-expanding crops.

 
But with many bins still overflowing with last year's crop in the world's top grain grower, farmers are snapping up these systems as a practical necessity ahead of bumper harvests, and as a safeguard against another winter of railroad delays.


They may also be a sign that farmers will not be rushed into dumping their harvests quickly. Prices for corn to be harvested in autumn have tumbled as much as 18 percent so far this year, leaving growers hoping for a rebound.


"This year, with the Canadian and the U.S. markets both demanding product, we're running overtime and trying to keep up with orders," said Jerry Sechler, vice-president of sales at Loftness Specialized Equipment Inc, a Hector, Minnesota-based privately-owned firm that introduced bagging machines into the United States in 2008 after studying operations inArgentina.


The systems also represent the latest front in an ongoing power struggle in the rural heartland between farmers, who want more say in how and when their crops are sold, and merchants such as Archer Daniels Midland and Bunge Ltd, who control the main arteries of trade.


ADM and Bunge have cited the expansion of on- and off-farm grain storage capacity for their slumping agribusiness margins in recent quarters as it is forcing them to pay up for grain to keep exports flowing and processing plants running.


"Within the last year, that fact has had a negative impact on overall margins in the grain chain. I think it will take another good crop for that to reverse," Bunge CEO Soren Schroder told Reuters.




MORE TO STORE


Years of high prices on record production helped by fencerow-to-fencerow plantings and historic gains in yield have given farmers healthy profits that they can spend on storage to see them through rough times, like this year.


On- and off-farm storage capacity jumped 20 percent in the decade to Dec. 1, 2013, according to the U.S. Department of Agriculture, with some of the biggest gains of more 30 percent in North and South Dakota, as farmers switched to corn, which yields about twice as many bushels per acre than the area's traditional wheat crop.


Firms such as CTB, a subsidiary of Warren Buffett's Berkshire Hathaway Inc, make the traditional metal storage silos that can be seen across the U.S. grain belt.


Now, in the Dakotas and elsewhere in the northern U.S. Plains, where winter's rail problems had already stranded a large share of last year's crop, bagging equipment suppliers are scrambling to keep up with demand.


"There are people that would have never bagged three years ago that are now almost forced to consider it because the elevators just can't take any grain with the railroad not getting their job done," said Craig Fisher, a farmer in Richardton, North Dakota and owner of Antelope Farm Supplies, which sells bags and bagging equipment.


His sales of bagging machines have exploded in just the past week after a patchy start to the season due to adverse weather which had kept production prospects clouded.


"Everything I've got is spoken for now and I've had to reorder. We had some come in today and those are already sold."


Fisher is now expecting a 25 percent jump in bagging equipment sales this year, after a similar jump in 2013, based on inquiries from customers. He has also sold two semi-truck loads of the plastic bags this summer and is awaiting a third 96-bag truck in about a week.




LOCK IT AWAY, THROW AWAY THE KEY


Bagging keeps grain in better condition and for longer than the standard U.S. practice of piling surplus on the ground and covering it with tarps. The white outside reflects the sun's heat while the inner layer is black, acting as a barrier to sunlight and helping maintain a lower than ambient temperature inside.


The cost of storage in a single-use bag is around 5 to 7 cents per bushel, plus charges for loading and unloading equipment, which together can come to anywhere between $60,000 and $160,000.


GrainLogix, the system made by Loftness, can stuff 30,000 bushels an hour -- nearly filling a whole bag of the kind made by companies like Up North Plastics which can store up to 34,000 bushels of grain.


By comparison, permanent storage costs $1.50 to $2.00 per bushel to build, or several hundreds of thousands of dollars, with waiting lists for installation often months long.


With the harvest slated to begin in a matter of weeks, the white sausages could lead farmers into a post-harvest stand-off with the grains merchants and push food costs higher.


John Brink, who grows corn on about 1,000 acres (400 hectares) near Centralia, Ill., said he expected to store most of his crop until prices rise and thought other farmers would do the same.


"We'll lock it away," he said. "We'll slam the door shut and throw away the key for a while."

more...
No comment yet.
Scooped by Stéphane Bisaillon
Scoop.it!

Canada : Existing programs won’t work: flooded farmers

The president of Keystone Agricultural Producers says he’s disappointed the federal government isn’t going to bail out flooded Manitoba farmers.


Doug Chorney said comments from agriculture minister Gerry Ritz at the close of a meeting with his provincial counterparts in Winnipeg last week left him with little hope that money is coming through AgriRecovery or other programs.


Ritz told reporters July 18 that farmers are well served by existing programs. He said changes made since the 2011 flood have improved crop insurance coverage.


“So it’s much more bankable and predictable and stable than waiting for an ad hoc payment under something like AgriRecovery,” he said.


Chorney said that wasn’t what he wanted to hear. He has estimated farmers in his province will lose $1 billion because of the flood, and he noted the situation for some Sask-atchewan farmers is also dire.


He said multiple years of flooding have made existing programs less effective.


“If the insurance program starts to break down because of all the years of difficulty, those programs aren’t working, and I’m hearing that loud and clear,” he said.


AgriRecovery is intended to pay for extraordinary costs that producers face because of a natural disaster. However, it is considered a framework rather than a core business risk management program and requires a province to ask for an assessment.


A joint assessment with the federal government would then take place, followed by a decision on whether to proceed with an AgriRecovery program.


Flooding in 2011 did result in a $448 million AgriRecovery program for Saskatchewan and Manitoba.


Mike Lesiuk, Manitoba’s acting assistant deputy minister of agriculture policy, said the province is assessing how the existing programs are meeting immediate needs this time around.


“There were enhancements made to AgriInsurance to address impacts to unseeded land and forages since the 2011 flood,” he said in an email. 


“We will continue to work with industry to assess the conditions and monitor progress on crop and livestock feed needs to determine the appropriate response for recovery. At this time there is no AgriRecovery program.”


Saskatchewan does not intend to trigger an assessment of its flooded acres.


“There will be costs that won’t be covered from some of the worst affected,” said Saskatchewan agriculture minister Lyle Stewart. “But I think the worst of the shock will be taken up by existing programs.”


He said farmers make a “business choice” when they don’t participate in crop insurance and other risk management programs.


Stewart estimated two to three million acres were affected in Saskatchewan. 


In Manitoba, 950,000 acres were unseeded and another 2.5 million acres were flooded.


Chorney said it shouldn’t take long to assess the situation.


“There’s people talking about dissolving their farm corporations and telling their families that the farm will not be able to sustain the next generation and they should start seeking employment elsewhere because there’s not going to be anything left for them,” he said. 


“We’re way past the point of deciding if there’s a problem. I’m concerned that governments don’t appreciate that.”


He said the criteria for triggering AgriRecovery has changed since 2011, and it’s not supposed to cover recurring events or insurable losses.


“It’s no accident they made these changes so they can avoid ad hoc programming, but it does also say in the rules that any extraordinary event that has a big regional impact,” he said. 


“We are meeting those tests.”


Chorney said he hopes Ritz will change his mind when Manitoba officials gather all the information and present it to him.


Ritz did say the federal government is prepared to work on flood mitigation measures.


Saskatchewan premier Brad Wall has said flood costs, not including payments to farmers, will top the $360 million spent in 2011. Manitoba premier Greg Selinger pegged his province’s costs at more than $200 million and still rising.


Meanwhile, agriculture ministers also discussed the grain transportation backlog and the Temporary Foreign Worker Program (TFWP) during their meeting in Winnipeg.


Stewart said the railways appear to be meeting the 11,000 cars per week goal, but even so there will be a carryover at harvest of 20 to 22 million tonnes.


“With a normal or slightly bigger than normal crop, we’re kind of back where we were last fall, except that we should have the legislation in place,” he said.


His counterparts supported the efforts being taken to move grain, he added.


The ministers agreed that proposed changes to the TFWP would hinder the food processing sector’s ability to find enough employees. They agreed to monitor the impact of changes and make sure the sector’s needs are met.


“I think it’s good ammunition for minister Ritz for the cabinet table and the caucus table in Ottawa to have the endorsement of every single agriculture minister in the country to continue with the Temporary Foreign Worker Program as it exists,” Stewart said.

more...
No comment yet.
Scooped by Stéphane Bisaillon
Scoop.it!

China urged to back corn at centre of trade furore

The US Grains Council called on Beijing to approve a Syngenta genetically modified corn trait after China raised its barriers against the seed, at the centre of a trade storm, demanding "impossible" import certification.

Tom Sleight, chief executive of the council, which promotes US grain exports, said it was "time for China to look at and approve this trait", known as MIR 162, and is included in Syngenta's Viptera brand seed.

Although MIR 162 has been approved in "all importing countries, including the European Union, for quite some time", and was cleared by the US four years ago, Beijing authorities have stalled over a decision on the trait, which is claimed to offer resistance against insect pests such as earworm caterpillars.

This has led to Chinese authorities rejecting a series of cargos of imported corn, and the distillers' grains (DDGs) feed ingredient derived from the grain, for fear of containing MIR 162.

The curbs escalated this week with a demand by Chinese import inspection authority, AQSIQ, for certificates assuring that US cargos of distillers' grains are free of MIR 162 – a request the council has termed impossible to meet.

'Basically embargoed'

"China is asking for something that cannot be done. This certificate they're asking for does not exist," Mr Sleight said.

"The lack of approval of MIR 162 is becoming an undue impediment on trade."

Indeed, China's move is seen by many observers as representing, in effect, a ban on imports of US distillers' grains, a high protein feed ingredient, often used as an alternative to soymeal.

"I don't expect to see the APHIS [trade inspection] arm of the US Department of Agriculture certifying shipments of any product, especially with a 0% tolerance," Brian Henry at Benson Quinn Commodities said.

"We do not believe the USDA grain inspection service will comply," said Richard Feltes at RJ O'Brien.

At Iowa-based broker Market 1, Mike Mawdsley said that US certification, "isn't going to happen, thus Chinese authorities have basically embargoed our DDGs".

Syngenta comments

A halt to US distillers' grains exports on this route would be a significant threat, given that China had become the top buyer, overtaking Mexico in 2012, and accounting for 46% of America's foreign shipments last year.

The US-based National Grain and Feed Association in April estimated at $2.9bn the loss in2013-14 to the US corn industry from the MIR 162 trade curbs, estimated to have depressed prices of the grain by $0.11 a bushel.

The National Grain and Feed Association urged Syngenta to mothball seed containing the disputed trait until it had been approved by China.

Michael Mack, the Syngenta chief executive, said earlier this week that the group did not have approval "in hand and I wouldn't want to say any more about when we might have it in hand".

He said that "the delays coming out of China are such that people just aren't really understanding right now even what the process is".

However, there was "no technical question right now waiting from the Chinese" about the trait.

Market impact

Mr Mack said that Syngenta sales of Viptera were "principally unchanged" despite the furore, but acknowledged that they might have fared better if Chinese approval had been gained.

"Did it have an impact on our sales? I suspect it had an impact on our sales growth, yes, I do," he told investors.

"But it certainly has not had an impact that a number of people had feared when this thing came into the forefront in January."

more...
No comment yet.
Scooped by Stéphane Bisaillon
Scoop.it!

Livestock slaughter: Pork production up 3%

Commercial red meat production for the United States totaled 3.82 billion pounds in June, down 1 percent from the 3.85 billion pounds produced in June 2013.

Pork production totaled 1.73 billion pounds, up 3 percent from the previous year. Hog slaughter totaled 8.10 million head, down 1 percent from June 2013. The average live weight was up 11 pounds from the previous year, at 285 pounds

Beef production, at 2.07 billion pounds, was 4 percent below the previous year. Cattle slaughter totaled 2.61 million head, down 5 percent from June 2013. The average live weight was up 7 pounds from the previous year, at 1,307 pounds.

Veal production totaled 7.6 million pounds, 10 percent below June a year ago. Calf slaughter totaled 45,300 head, down 21 percent from June 2013. The average live weight was up 35 pounds from last year, at 285 pounds.

January to June 2014 commercial red meat production was 23.5 billion pounds, down 3 percent from 2013. Accumulated beef production was down 5 percent from last year, veal was down 10 percent, pork was down slightly from last year, and lamb and mutton production was up 2 percent.

more...
No comment yet.
Scooped by Stéphane Bisaillon
Scoop.it!

Les facteurs à surveiller sur les marchés de l'engrais, deuxième partie

Les facteurs à surveiller sur les marchés de l'engrais, deuxième partie

par Trish Henderson



Dans le dernier numéro de FAC Express, Trish Henderson s'est penchée sur certains changements qui se sont opérés récemment sur le marché canadien de l'engrais. Cette semaine, nous portons notre attention sur les signaux du marché.

Selon Bill Wilford, directeur, commercialisation de l'engrais, à Cargill AgHorizons Canada, les producteurs agricoles devraient surveiller certains signaux dans le marché actuel qui est en pleine évolution, en particulier à l'échelle internationale.

« Les prix des céréales sont un bon indicateur des prix de l'engrais, explique M. Wilford. L'azote est l'intrant d'engrais le plus utilisé en Amérique du Nord, et la culture du maïs est l'activité qui consomme le plus d'engrais azoté en Amérique du Nord. »

« Comme les prix du maïs sont élevés, la superficie cultivée de maïs est grande et la demande d'azote est vigoureuse. Il en va de même du phosphate, dont la tendance est peut-être plus étroitement liée à celle du soja. La potasse suit les tendances de ces deux cultures. »

Précédemment, les prix de l'urée suivaient le cours du gaz naturel. Toutefois, l'essor de l'industrie nord-américaine du gaz de schiste et la faiblesse des prix du gaz naturel qui en découle ont modifié ce rapport.

« Aujourd'hui, le pétrole brut est un autre produit de base à surveiller dans la mesure où les prix de l'éthanol suivent ceux du brut, souligne M. Wilford. Les prix accrus du brut rendent la production d'éthanol plus économique, ce qui influe sur les prix du maïs et, par conséquent, sur ceux de l'azote. Ce n'est pas un indicateur aussi fiable que les prix des céréales et des oléagineux, mais on peut certainement en tenir compte. »

La conjoncture économique et politique mondiale présente aussi des signaux importants qui influent sur les marchés de l'engrais.

Les importations d'engrais de l'Inde représentent un cinquième des échanges mondiaux d'engrais. De ce fait, l'économie indienne et les subventions gouvernementales à l'agriculture qui sont consenties dans ce pays influencent l'offre et la demande mondiales. Par ailleurs, la capacité de production de phosphate au Moyen-Orient et dans les pays d'Afrique du Nord ne cesse d'augmenter, de sorte que les exportations de cette région continueront de croître.

« Les événements politiques et économiques qui se produisent dans le monde peuvent avoir une incidence marquée sur les prix de l'engrais, indique M. Wilford. Par exemple, on surveille de près la situation en Ukraine et en Russie. »

« Malgré la présence d'importants producteurs d'engrais ici même, au Canada, il est important de garder à l'esprit que notre production nationale est exportée, ajoute-t-il. En effet, plus de 25 % de la production canadienne d'azote prend le chemin des États-Unis. »

Dans l'industrie agricole, M. Wilford souligne que l'engrais représente pas moins de 17 à 22 % du coût de la production de cultures. Il constate que certains producteurs canadiens achètent de l'engrais à longueur d'année pour atténuer le risque de prix lié à cet intrant important.

« C'est une bonne stratégie, dit-il. Les marchés sont volatils et il est impossible de se protéger contre les fluctuations des prix de l'engrais. Le fait d'en détenir un stock à la ferme est le seul moyen de bloquer les prix de l'engrais. »

Les producteurs doivent aussi comprendre le rapport entre les coûts de l'engrais et les prix de vente de leurs produits.

« La compréhension de votre coût de production vous aidera à gérer votre risque lié à la production de cultures », mentionne M. Wilford, qui ajoute que bon nombre de producteurs savent combien de boisseaux de canola ils doivent vendre pour payer leur engrais.

Il soutient aussi que pour couvrir leur coût de production, les agriculteurs doivent vendre leurs cultures à l'avance, au moment où ils achètent leur engrais, parce que c'est le reste de leur production qui assure leur subsistance.

« Au moment de l'achat d'intrants, vendez une partie de votre récolte pour couvrir ces coûts et vous protéger contre les fluctuations du marché », conseille-t-il.

Il est aussi recommandé de prévoir vos besoins d'engrais avant la saison de croissance et de passer des commandes à votre détaillant d'intrants de culture.

À long terme, M. Wilford prévoit que l'évolution des pratiques de fertilisation influencera le marché. En particulier, il prévoit un essor rapide des produits d'engrais de marque comme les engrais à libération lente d'azote et les oligo-éléments utilisés à la ferme.

« Les produits de marque qui augmentent la productivité des fermes pourraient remplacer certains engrais de base dans l'avenir, dit-il. Si cela se produisait, de nouvelles méthodes d'épandage devraient être mises au point, et le mode de commercialisation de l'engrais changerait probablement. »

Graphique reproduit avec l'autorisation de Cargill

Il s'agit d'un mélange ordinaire d'engrais 120-20-0-15 pour le canola. Le prix à terme du canola de novembre 2014 est de 10,16 $ le boisseau. Le graphique illustre les prix du même mélange d'engrais à la même période au cours des années précédentes, ainsi que le prix du canola en novembre.

more...
No comment yet.
Scooped by Stéphane Bisaillon
Scoop.it!

U.S. Nitrogen Fertilizer Market Soon to Reach Point of Saturation

U.S. Nitrogen Fertilizer Market Soon to Reach Point of Saturation | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it

The U.S. could become self-sufficient in urea supplies as soon as 2017, Rabobank analysts forecast in a new report released this week, bringing the U.S. nitrogen fertilizer market to a point of saturation as announced capacities are expected to come online in the next few years.

Market saturation, increasing fixed and variable costs for production, however, make further capacity additions in the short term unlikely.

Related: Weekly Fertilizer Review

"Lower natural gas costs meant U.S. fertilizer producers were able to realize their dream of converting low cost inputs into higher priced outputs," Rabobank analyst Suzanne Pera explains. "As a result, the U.S. is set to move away from being a net importer of urea and is en route to self-sufficiency, which is set to have sizeable impact on global urea markets."





There are production cost challenges, however, as the recent abundance of cheap natural gas may be offset by LNG exports as the U.S. takes its first steps towards exporting part of its shale gas reserves to other regions, such as Europe.

Disappointing returns on investments in shale exploration could also led to a decrease in supply and put upward price pressure on natural gas prices in the short to medium term, Rabobank says. The same applies to domestic demand: the long, cold winter of 2013-2014 also caused natural gas prices to peak.

Increasing construction costs are another challenge, and are resultant of rising costs for engineering, procurement and construction contracts, the report finds. Similarly, attracting investment to secure plant financing is under pressure as a result of increased capacity supply outweighing demand globally, which is putting pressure on nitrogen fertilizer prices.

Related: Changes Ahead for Global Urea Market

Nitrogen fertilizer capacity that is due to come online will first feed into domestic demand. If U.S. demand for granular urea imports begins to fade, producers will be forced to look for other destination markets, like Europe.

Further capacity expansions in nitrogen fertilizers in the longer term in the U.S. cannot be ruled out; even when U.S. oversupply in the medium term continues to put pressure on nitrogen fertilizer prices, producers there can still incur lower fertilizer prices and make a return on invested capacities.

more...
No comment yet.
Scooped by Stéphane Bisaillon
Scoop.it!

U.S. July Cattle Supply Falls to Lowest Since ’73 in Price Rally

The U.S. cattle inventory as of July 1 fell to the lowest for the date since records began in 1973, U.S. government data showed after futures in Chicago settled at a record high, signaling higher beef costs.Supplies at 95 million head fell 2.9 percent from July 2012, the Department of Agriculture said today in a report. The mid-year data wasn’t issued last year because of a partial government shutdown. The herd on Jan. 1 was the smallest since 1951.Cattle futures headed for the sixth straight annual gain, the longest rally since at least 1965, as ranchers struggled to recover from years of drought. Wholesale beef is at a record high, and retail costs for boneless sirloin steak climbed to an all-time highs in June, USDA data show. In June, Sonic Corp., the Oklahoma City based hamburger chain, cited meat as one of its “significant cost pressures.”“We’re in for tighter supplies into next year,” John Nalivka, the president of Sterling Marketing Inc. in Vale, Oregon, said in a telephone interview. “These higher prices have added to the risk across the supply chain.”A third of Texas, the largest cattle-producing state, was rated in severe to extreme drought as of July 22, marking the fourth straight year it has been that dry or worse for this time of year, U.S. Drought Monitor data show.Futures RallyBefore the USDA announcement, cattle futures for October delivery rose 1.1 percent to close at $1.598 a pound on Chicago Mercantile Exchange. The record settlement matched the all-time high intraday price yesterday. The price climbed for the seventh straight session, the longest rally since May 1. The commodity has gained 19 percent this year.In June, boneless sirloin steak rose 1.3 percent to $7.689 a pound. Ground beef has climbed 12 percent this year to $3.88 a pound.“We may see some weakness from where we’re at today on some of these beef prices, but they’ll still be at a high level for the rest of the year,” Nalivka said.Feeder-cattle futures for August settlement rose 0.4 percent to $2.1825 a pound today. The price climbed for the seventh straight session, the longest rally since June 10. The commodity has jumped 30 percent this year.In June, placements of cattle into feedlots dropped 6.2 percent to 1.46 million head from a year earlier, the USDA said today. Analysts in a Bloomberg survey expected a 3.8 percent decline.Producers are beginning to hold back heifers to rebuild herds amid the high cattle prices, Nalivka said.Feedlot operators typically buy year-old cattle that weigh about 500 pounds (227 kilograms) to 800 pounds, called feeders. The animals are fattened on corn until they weigh about 1,300 pounds, when they are sold to meatpackers.Corn futures in Chicago yesterday touched a four-year low and have dropped 22 percent in the past 12 months.To contact the reporter on this story: Megan Durisin in Chicago at mdurisin1@bloomberg.net
more...
No comment yet.
Scooped by Stéphane Bisaillon
Scoop.it!

New China feed grain rule unworkable: U.S. export group

New China feed grain rule unworkable: U.S. export group | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it

(Reuters) - The biggest U.S. grain export association called on China on Thursday to rescind its latest restriction of a GMO corn strain, saying the new demand was unworkable.

Trade sources said China issued the new requirement affecting distiller's dried grains (DDG), a popular livestock feed that is a by-product of corn ethanol manufacturing.

Traders say China is demanding certification that DDG imports do not contain the MIR 162 GMO strain. Grain traders say the U.S. government does not issue zero tolerance certification.

"China is asking for something that cannot be done. This certificate that they're asking for does not exist," said Tom Sleight, president and chief executive officer of the U.S. Grains Council.

Sleight said China had also made the new requirements effective immediately, causing serious disruptions.

All DDG shipments departing from July 24 that do not meet the certification requirement will be rejected, the North American Export Grain Association told members in a note on Thursday, traders said.

"It's time for China to look at and approve this trait," Sleight said."Lack of approval of MIR 162 is becoming an undue impediment on trade."

Sleight said the strain has been approved in the United States since 2010 and is approved in all other importing countries but China, including the European Union, which has strict GMO rules.

China stopped issuing import permits for U.S. DDG shipments in June over concerns about the MIR 162 GMO strain, which is not approved by the agriculture ministry.

The United States exported 2.31 million tonnes of DDGs to China from January to May with total U.S. exports in the period at a record 4.996 million tonnes, according to U.S. Department of Agriculture data.

Chicago Board of Trade corn futures fell to new contract lows early on talk that China, the biggest buyer of U.S. DDGs, was seeking the certification, but later trimmed losses to end just slightly down from Wednesday's close.

DDG cash prices fell $5 to $15 a ton, or as much as 8 percent, on prospects for weak export demand going forward, traders said.

The U.S. Grains Council also would have to "discontinue its role as the agent for U.S. ethanol companies in submitting registration dossiers" to China's Ministry of Agriculture because of the new requirement and China's new regulations on registering U.S. ethanol plants that intend to export DDGs, the council said in a letter to members seen by Reuters.

The MIR 162 GMO strain in corn was developed by Syngenta AG.

"It's a de facto embargo in terms of U.S. DDG trade into China," said Dan Basse, president of consultancy AgResource Co. "USDA is not in a position to be issuing GMO certificates in general. So it's not going to happen."

more...
No comment yet.
Scooped by Stéphane Bisaillon
Scoop.it!

Soybeans Decline on Prospects for Ample U.S. Supply

Soybeans and corn fell in Chicago, extending weekly losses, on signs that supplies from the next U.S. harvest will be ample as crops in the Midwest are developing in good condition. Wheat was little changed.

Yields in Iowa, historically the biggest U.S. producer of both crops, may rise to records this season as cool temperatures boosted plant development, according to estimates from Doane Advisory Services, which toured fields this week. Seventy-two percent of soybeans and 76 percent of corn in the main U.S. growing areas were in good or excellent condition as of July 20, according to the U.S. Department of Agriculture.

“The weather continues to be only just the slightest bit less than absolutely perfect all across the Midwest as the corn pollinates and as the beans set pods,” economist Dennis Gartman wrote in his daily Gartman Letter. “We are witnessing truly record and truly gargantuan crops.”

Soybeans for November delivery fell 0.8 percent to $10.7575 a bushel by 6:59 a.m. on the Chicago Board of Trade and are down 0.9 percent this week. Prices rose to $11.0725 yesterday, the highest for a most-active contract since July 17, after USDA data showed U.S. exports surged in the week ended July 17. Futures also had gained on concern that temperatures were too cool, slowing plant maturity.

Corn for December delivery dropped 0.8 percent to $3.665 a bushel. Prices are set to decline 3.2 percent this week, a fifth straight weekly decrease.

Iowa corn yields may be 190 bushels an acre, up from 165 bushels last year and a prior record of 182 bushels set in 2009, according to St. Louis-based Doane. Soybean yields were pegged at a record 53 bushels an acre. The company evaluated fields in Iowa, Illinois, Minnesota and Nebraska this week, and will tour the eastern Midwest beginning July 27, before releasing a national crop forecast Aug. 1.

Crop Forecasts

The USDA is set to update its weekly crop progress report July 28. The agency, which will release its first field-based crop forecasts on Aug. 12, estimated this month that U.S. farmers would harvest a record soybean crop at 3.8 billion bushels, while corn output at 13.86 billion bushels will be the second-highest ever.

Wheat for September delivery was unchanged at $5.2875 a bushel in Chicago, set to decline 0.7 percent this week. In Paris, milling wheat for November delivery fell 0.4 percent to 180.25 euros ($242.38) a metric ton on Euronext. 

more...
No comment yet.
Scooped by Stéphane Bisaillon
Scoop.it!

Media accused of overblowing bee crisis

Is it possible to have a pollinator crisis when bee colony numbers are increasing?

According to reports in various media outlets, the answer is yes.

For example, on July 23 the Globe and Mail published an online article with the headline: Why is Canada’s bee population in rapid decline?

The story was based on a Canadian Association of Professional Apiculturists (CAPA) report issued the same day, looking at the percentage of bee colonies that died or were unproductive following this winter.

CAPA said Ontario beekeepers lost 58 percent of their colonies, much higher than the 25 percent losses across Canada.

The Globe piece said neonicotinoids, a class of insecticides applied to corn, soybean and canola seeds, were likely responsible for the severe bees losses in 2014 and in previous years.

The headline and the sombre tone of the article were curious because Canada’s bees are doing much better than they were in the late 2000s.

CAPA data shows that Canada’s honeybee population has steadily increased since 2009.

Canadian beekeepers had 611,972 colonies in the fall of 2009 and 677,824 bee colonies in the fall of 2013, an increase of 10.7 percent.

In Ontario, hive numbers were 81,200 in the autumn of 2009 and 100,000 last fall.

“I hate to say it, but I don’t know if the media has done a good job of trying to contact the people who know what the numbers really are,” said Rod Scarlett, executive director of the Canadian Honey Council.

“The Ontario Beekeepers’ Association (OBA) has done a remarkably good job of (sharing) their problems and their numbers. I think the media is focused on that Ontario mentality and thinking what happens there happens in the rest of Canada.”

The OBA has blamed neonicotinoids for killing millions of bees in the province and has led a highly effective campaign against the seed treatments.

However, Scarlett said there isn’t a bee population crisis and most honey producers are doing a better job of minimizing winter losses.

“There are regional variances but we seem to be managing bees and honey production quite well,” he said.

Canadian bees were worse off in the late 2000s when varroa mites plagued honey producers, he added.

CAPA’s data on winter losses indicates that Scarlett is correct.

Thirty to 35 percent of Canadian bee colonies failed to survive the winter from 2006 to 2009, while losses were only15 to 28 percent between 2010 and 2014.

Medhat Nasr, CAPA president and the provincial apiculturist in Alberta, said many Canadian beekeepers have adopted best management practices to cope with the pests and diseases that compromise hive health.

“The bee hive numbers, it is growing slowly,” he said.

“It is a positive story, and it shows a lot of work has been done to help the industry.”

Yet numerous publications and broadcasters have produced pieces with grim outlooks, implying all bees in Canada could be dead by next week.

Stephen Strauss, Canadian Science Writers’ Association president, said journalists often look at one report or one data set when they write a story, and they don’t consider historical or broader sources of data.

He is concerned by the absence of statistical analysis within journalism.

“I get really (angry) that journalism schools don’t require people to (take) a statistics course,” he said.

“Statistics are kind of fundamental to being a human being in the time we live in.”

Another issue is the media’s urgency to tweet the story three seconds before the competition when a study or report is released.

Strauss said sometimes there is also a reluctance to tell the other side of the story. In this instance, journalists have focused on seed treatments and the need to ban neonicotinoids to save bees while ignoring the consequences of a neonicotinoid ban.

“What it means is there are more insects and they eat more (crops),” he said.

“Is that the trade off? Is that what you’re willing to deal with? If I was a farmer, I’d be pissed off at this because I don’t see that argument ever put forward. The notion is that is … the farmer’s problem.”

more...
No comment yet.
Scooped by Stéphane Bisaillon
Scoop.it!

Libre-échange Canada-UE: Berlin rejetterait l'accord | Canada

Libre-échange Canada-UE: Berlin rejetterait l'accord | Canada | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it

L'Allemagne serait sur le point de rejeter l'accord de libre-échange conclu entre le Canada et l'Union européenne (UE) l'an dernier, a révélé samedi un quotidien allemand.

Selon le journal Sueddeutsche Zeitung, Berlin s'opposerait aux clauses concernant la protection juridique qui serait offerte aux entreprises.

Ces dispositions s'apparentent grandement au controversé chapitre 11 de l'Accord de libre-échange nord-américain (ALÉNA), qui est vertement critiqué ici comme ailleurs.

En vertu de ces règles, une entreprise peut poursuivre un État si celui-ci adopte une législation qui est nuisible à la poursuite de ses activités.

Le porte-parole adjoint de l'opposition en matière de commerce international et député fédéral de Rimouski-Neigette-Témiscouata-Les Basques, Guy Caron, rappelle que le Nouveau Parti démocratique (NPD) partage les craintes apparemment exprimées par l'Allemagne.

«Au niveau de ce qu'on a vécu dans l'ALÉNA, certaines de ces critiques ont été confirmées, a-t-il expliqué en entrevue à La Presse Canadienne. Ces dispositions donnent beaucoup de pouvoir aux entreprises pour empêcher des gouvernements de légiférer pour le bien public.»

Depuis l'entrée en vigueur de l'ALÉNA, en 1994, des entreprises étrangères se sont d'ailleurs prévalues de ce droit d'intenter des recours judiciaires contre les différents ordres de gouvernement au Canada.

La protection de l'environnement, du système de santé publique ou de la culture pourrait être menacée par ce type de poursuite, craignent les opposants aux accords de libre-échange.

Samedi, le gouvernement conservateur n'a pas voulu faire grand bruit des rumeurs voulant que l'Allemagne rejette l'accord de libre-échange entre le Canada et l'Union européenne dans sa forme actuelle.

Dans une déclaration écrite, Shannon Gutoskie, porte-parole du ministre du Commerce international Ed Fast, a rappelé que des dispositions visant à protéger les investisseurs font partie de la politique commerciale du Canada et de l'Europe depuis de nombreuses années.

Lors des négociations de l'accord de principe en 2012, le négociateur en chef du Québec, Pierre Marc Johnson, avait également fait valoir qu'il était inconcevable d'établir un accord libre-échange avec l'Europe sans des mesures visant à protéger les investisseurs.

Ce type de dispositions existe dans pas moins de 300 accords commerciaux conclus à travers le monde depuis une quinzaine d'années, avait-il spécifié.

Le texte de l'accord continue d'être peaufiné, a ajouté Mme Gutoskie, en mentionnant que les négociations se poursuivent et que d'excellents progrès ont été réalisés.

Guy Caron émet toutefois des doutes sur le travail qu'il reste réellement à effectuer. «Contrairement à ce que laisse entendre le gouvernement canadien, c'est beaucoup plus que des détails techniques ou de traduction qui sont à régler, croit-il. Il existe, au niveau des pays membres de l'Union européenne, certains problèmes beaucoup plus profonds.»

Le NPD demande d'ailleurs au gouvernement conservateur de lever le voile sur l'accord de principe signé en octobre à la suite de quatre ans de négociations. En rendant le texte public, les citoyens et les parlementaires pourront saisir tant la portée de l'entente que les réserves exprimées par certains partenaires, estime M. Caron.

Puisque l'aval des dix provinces canadiennes et des 28 pays membres de l'Union européenne est nécessaire pour que l'accord de libre-échange entre en vigueur, un vote défavorable de l'Allemagne mettrait le projet en péril.

Une nouvelle ronde de négociations pourrait toutefois être lancée.

L'entrée en vigueur de l'accord de libre-échange entre le Canada et l'UE représenterait des retombées économiques de 2,2 milliards par année et la création de 16 000 emplois au Québec, selon le gouvernement québécois.

Toujours selon le quotidien Sueddeutsche Zeitung, des diplomates allemands à Bruxelles auraient également affirmé que si l'accord de libre-échange avec le Canada était rejeté, celui avec les États-Unis subirait vraisemblablement le même sort.

more...
No comment yet.
Scooped by Stéphane Bisaillon
Scoop.it!

Arkansas Farm Bureau Daily Commodity Report 07/25/2014

Arkansas Farm Bureau Daily Commodity Report 07/25/2014 | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it
Soybean Comment

Soybean prices closed mixed today with the nearby contract posting modest gains and the new crop contracts seeing some profit taking. Continued strong export demand is supporting the nearby contract, while looming record production is pressuring new crop prices. November soybeans made a run at $11, but failed to hold gains. Look for prices to move lower in the coming weeks as large supplies weigh on the market.




Wheat Comment

Wheat prices followed corn higher today. While large supplies and weak demand limit the market from a fundamental standpoint, wheat does have technical support as the market is severely oversold.



Corn Comment

Corn prices closed with modest gains today. The new crop contracts looks to be trying to consolidate between $3.60 and $3.80. Strong demand in recent weeks has slowed losses as it appears the lower prices have spurred additional demand. The market will need to see demand remain firm as reports from crop tours this week point toward record yield and supplies this year.

more...
No comment yet.
Scooped by Stéphane Bisaillon
Scoop.it!

Oilseed Profits Might Best Corn in Next 10 Years

Oilseeds and coarse grains are seeing a price correction in 2014/15, but a new 10-year global forecast says oilseed profitability will best that of corn and other coarse grains moving forward.

"Relative profitability of coarse grains versus oilseeds is expected to favor allocation of land towards oilseeds and lead to a 26% increase in production by 2023 when combined with yield gains," notes the report published by the Organization for Economic Cooperation and Development (OECD) and the Food and Agriculture Organization (FAO) of the United Nations.

After the current price reduction plays out, oilseed prices are expected to increase beginning in 2017 onward. The exception will be the year 2023 because of larger production generated by coarse grain prices in the two preceding years.


A 38% increase in oilseed prices is expected by 2023 compared to 2005 levels, the report says. Strong food and fuel demand for vegetable oil will drive prices higher in the intermediate term, as will solid demand for protein meal once meat production strengthens.

Yet one factor remains unchanged in the outlook: the location where most oilseed production will occur.

"With 91% of global exports in 2023, the Americas will continue to be the oilseeds breadbasket of the world," the report notes. Meanwhile, China will solidify its position as the leading oilseeds importer, though its share of world oilseed crush will stabilize at 25%.

Coarse Grains Face Modest Growth


Prices for coarse grains are expected to be under considerable pressure in 2014/15 because of anticipated ample production in the U.S., the Russian Federation and Argentina. Representative Gulf prices are projected to be $4.95/bu. in 2014, the report says. That’s 32% lower than the 2010-12 period and more in line with historical trends.

Recovery and stabilization of prices is expected during the second half of the forecast period, with a Gulf price of $5.71/bu. by 2023. That would be a 15% increase from the 2014/15 forecast.

World production will grow 17% through 2023. Yields will increase at 0.8% per year, a slower rate than in the past, and cropland is expected to expand only moderately. Large export volumes are expected because of the U.S. stocks buildup.

Driving most of the growth in feed use of coarse grains will be China, the U.S. and Brazil. In China, for example, coarse grain imports are expected to soar as the government concentrates self-sufficiency efforts on wheat and rice. Growth in meat imports will happen at a rate of between 4% and 9%, but "this will not prevent coarse grains imports to follow a similar pattern with a 4% annual increase between 2014 and 2023, in order to satisfy demand."

Ethanol exports are expected to increase considerably, the report suggests. The share of U.S. corn used for ethanol will increase to 44% by 2023, and total world use of coarse grains for biofuels is expected to represent 12.2% of production.

more...
No comment yet.
Scooped by Stéphane Bisaillon
Scoop.it!

Kevin Van Trump : Can soybean demand keep grain prices afloat?

Soybean traders now have to consider the fact we not only have the largest number of acres ever planted in the U.S. (soon to be reported at 85 million plus), but at the same time we have the best condition rating for the crop we've seen in the past 20 years.

Yes, we are still seeing good Chinese demand for soy, both old and new. In fact, year-to-date soy imports into China are up by almost 25%. Unfortunately, the market isn't really focused on demand. Instead its all about supply right now. With 85 million acres in the ground here at home, demand bulls simply seem to be rearranging the chairs on the Titanic.  In other words, no one really seems to care about the export sales data; the ship still seems to be going down regardless of current demand! Nearby support still looks to be $10.65 vs. the NOV14 contract, but I'm worried if the bears knock on the door a few more times (and the page is officially turned on the old-crop story) we could quickly see prices tumble towards the $10.06 area.

I suspect with Chinese demand staying strong, some definite uncertainties remaining in Argentina and the entire month of August still ahead of our U.S. crop, the trade may take a bit slower approach to reducing price-risk.  Producers should continue to keep hedges in place. Any rally back towards the $11.00 to $11.30 range must be viewed as an opportunity to reduce longer-term risk.

more...
No comment yet.
Scooped by Stéphane Bisaillon
Scoop.it!

Canola edges higher, awaits forecast from CWB crop tour

Canola futures rallied toward the end of trade Friday and closed slightly higher, but over the week they were down slightly.

November canola closed at $442.50 per tonne, up $1.80 per tonne on the day.

November was down 80 cents per tonne on the week, but the close was more than $13 higher than on Tuesday when it set a life of contract low of $429.10.

By staying above $440 per tonne, the contract is staying above the psychologically important level of $10 per bushel.

Some crop watchers think the average canola yield could be lower than average this year.

After thunder storms Thursday dumped rain in various places in Western Canada and caused some hail and property damage, large parts of central and northern Alberta and Saskatchewan were getting more gentle rain on Friday and it was mostly welcome.

We’ll get a better picture of production next week when the CWB holds a prairie crop tour that will measure yield potential over three routes through the Prairies.

We will have reporters on all three tours who will tweet regular updates and write daily stories for Producer.com. The wrap up is on Thursday July 31 in Regina when the average Prairie yield potential will be announced.

Canadian farmer grain deliveries in June totalled 4.65 million tonnes, shattering the previous record of 4.11 million tonnes set in 2010 and the 10-year average of 3.41 mln

U.S. crop markets rallied a little on Friday on bargain buying and short covering.

August soybeans were slightly higher today while November fell about a penny per bushel.

Over the week, new crop November soybeans fell 1.75 cents.

The market appears to have accounted for the expectation of record soybean yields and support is coming from larger than expected weekly soybean export sales.

Reuters polled 20 analysts about their forecasts for U.S. yields

The average soybean yield in the poll was 45.55 bu. per acre, up slightly from USDA’s forecast of 45.2 bu. and the previous record of 44 bu., set in 2009.

The average of the forecasts for corn was about 170.5 bushels per acre.

That is about five bushels more than the USDA’s forecast of 165.3 bu. per acre.

The previous record yield of 164.7 was set in 2009.

Some parts of the Midwest were getting a little dry but rain on Thursday in western parts were just what the doctor ordered.

Still, December corn rose 2.25 cents today on bargain buying, but over the week it fell 6.75 cents or 1.8 percent.

Wheat saw a bargain buying rally today with the Minneapolis spring wheat December contract rising 7.75 cents, but over the week it was down five cents.

Chicago soft wheat did a little better, climbing 3.5 cents over the week.

Rain is falling in western Europe as farmers try to harvest their wheat and canola and that is causing quality problems. The extent of the damage is not yet clear. More rain was expected this weekend.

more...
No comment yet.
Scooped by Stéphane Bisaillon
Scoop.it!

Now is the time to buy propane; it 
may help avert a crisis later

The dog days of summer may be upon us, but Nebraska and Iowa agriculture officials and energy suppliers say there’s no better time to buy propane.

Since demand is lowest during the warmest months of the year, customers are best off either stocking up now or contracting low rates to stave off a potential spike when harvest starts and the weather cools off.

Last year’s brutal winter prompted high demand and record prices for the gas used by rural homeowners for heat and by farmers for drying grain.

Propane prices last winter rose to nearly $5 per gallon, more than three times their normal level. Iowa Agriculture Secretary Bill Northey doesn’t expect prices that high but said it’s important to be prepared.

“I would really doubt that a situation like that would hit us again, but there is just no way to know for sure,” he said.

Prices ultimately will depend on how cold it gets this winter, how long it stays cold and how much propane agriculture producers will need to dry grain after harvest.

“I think the propane situation really caught people off guard last year,” said Deb Grooms, executive director of the Iowa Propane Gas Association. “We had experienced some not-so-cold winters in the previous years, and people had the attitude that they didn’t want to buy propane if they wouldn’t need it.”

An analyst with the Nebraska Energy Office is planning to ask Nebraska suppliers what they are advising about propane supplies. The Nebraska Department of Agriculture is working with that office to monitor the situation, a spokesperson said.

Meanwhile, Dan Chudomelka, vice president of the Nebraska Propane Gas Association and a dealer with Great Plains Service in Ashland, said he’s been advising customers to fill their tanks far ahead of the fall season.

“In general, I’ve been telling my people to try to get everyone full before grain-drying season starts,” Chudomelka said. “That way, their tanks are full before Nov. 1 and we get a head start.”

Keith Volker, energy division manager at Midwest Farmers Cooperative in Elmwood, said it’s too early to tell how much propane agriculture producers will use this year, but filling customers’ tanks during the warmest months has two primary benefits: customers generally pay the least for propane in the summer, and pipeline operators allocate more propane to suppliers in peak-demand periods if they supply more during low-demand periods.

“The more we use in summertime, the more we can buy in winter when times are tight,” Volker said.

Data from the Nebraska Energy Office shows propane supplies in the state have been mostly stable on a year-over-year comparison, but monthly sales from September 2013 through January 2014 were significantly higher than the year-ago periods.

Iowa has a particular concern about supply.

The state historically received about 20 percent of its propane from a 1,900-mile pipeline that stretches from Canada across Iowa and into Illinois. The pipeline owners have modified it to carry petroleum products, effectively shutting off that method of propane delivery to Iowa. As a result, state residents are increasingly reliant on propane from Conway, Kansas, which costs more.

“From what I have seen with their storage numbers, they don’t have as large a supply on hand as they normally do,” Northey said. Inadequate supply could mean a situation like last year when propane prices ballooned from $1.40 to near $5 per gallon.

About 8 percent of Nebraska households rely on propane for warmth, compared with 15 percent of Iowa households. Propane also is used to run large grain dryers to remove excess moisture from corn and soybeans at harvest time.

A slow-maturing crop, or even a larger-than-average crop, could increase the amount of propane needed for drying and put extra stress on the supply, Northey said. Crop projections indicate a record harvest for both corn and soybeans.

more...
No comment yet.
Scooped by Stéphane Bisaillon
Scoop.it!

Economic outlook: What to watch in fertilizer markets, Part 2

Economic outlook: What to watch in fertilizer markets, Part 2

by Trish Henderson



In last week's FCC Express, Trish Henderson looked at recent changes in the Canadian fertilizer market. This week, we turn our attention to market signals.

Bill Wilford, fertilizer marketing manager with Cargill AgHorizons Canada, says there are some signals farmers should watch in this changing market, especially on the global front.

"Grain prices are a good indicator of fertilizer prices," Wilford says. "Nitrogen is the number one fertilizer input in North America, and corn is the number one user of nitrogen in North America."

"High corn prices mean high corn acres and strong demand for nitrogen. Phosphate is similar, perhaps following soybeans more closely. Potash tracks both commodities."

In the past, urea prices tracked natural gas prices. However, the expansion of the North American shale gas industry and resulting low natural gas prices have changed this relationship.

"Today, crude oil is another commodity to watch because ethanol prices follow crude," Wilford says. "Higher crude prices make ethanol production more economical, which affects corn prices and thus nitrogen prices. It's not as strong an indicator as grain and oilseed prices, but it's certainly something to consider."

Global economics and politics also provide key signals for fertilizer markets.

India imports one-fifth of total world fertilizer trade, so the Indian economy and government farm subsidies there influence world supply and demand. Meanwhile, phosphate production capacity in Middle East and North African countries is growing, poised to further increase exports from this region.

"Political and economic events around the world can have a big effect on fertilizer prices," Wilford says. "For example, the Ukraine-Russia situation is being watched closely."

"Even with major fertilizer producers right here in Canada, it's important to remember that our domestic production is exported to other countries," he adds. "Over 25 per cent of Canadian nitrogen production is exported into the United States."

At the farm level, Wilford recognizes that fertilizer makes up 17 to 22 per cent of the cost of growing a crop. He's witnessing Canadian growers buying fertilizer twelve months of the year to mitigate price risk for this major input.

"It's great to see this," he says. "Markets are volatile and fertilizer can't be hedged. Owning the product and having it on your farm is the only way to secure fertilizer prices."

The next step for producers is to understand the relationship between fertilizer costs and selling prices for their commodities.

"Understanding your cost of production will help you manage your risk of growing a crop," Wilford says, pointing out that many growers know how many bushels of canola they need to sell to pay for their fertilizer.

Wilford says farmers need to forward sell their crops as they buy fertilizer, to cover cost of production, since the rest of their production is now their bread and butter.

"As you buy crop inputs, sell some crop to cover those costs and protect yourself from swings in the market," he advises.

Planning fertilizer needs in advance of the growing season and booking product with your crop input retailer is also recommended.

Looking long term, Wilford expects changing fertilizer practices will affect the market of the future. In particular, he foresees a surge in branded fertilizer products such as slow-release nitrogen and micronutrients being applied on the farm.

"Branded products that can increase farm productivity could replace some commodity fertilizers in the future," he says. "If this happens, new application methods would be required, and the way fertilizer is marketed would likely change."

Chart courtesy of Cargill

This is a standard fertilizer blend of 120-20-0-15 for canola. The futures price for November 2014 canola is $10.16 per bushel. Other years show the same blend, the fertilizer prices at the time for that year and the November canola price.

more...
No comment yet.
Scooped by Stéphane Bisaillon
Scoop.it!

Alumbaugh: Everyone is responsible

It’s a tragedy, really. We produce the safest, most abundant food supply in the world, but the Economic Research Service (ERS) estimates that in 2010, 31 percent of food available for consumption at the retail and consumer levels in the United States went uneaten. That percentage represents about 133 billion pounds of food. There are a variety of reasons this unacceptable number exists. It includes food that is not consumed due to moisture loss or cooking shrinkage as well as food loss from mold, pests or inadequate climate control. It also includes food waste, which is edible food discarded by retailers due to color or appearance and plate waste thrown away by consumers. While ERS researchers have estimated the amount of food loss that occurs in U.S. grocery stores, restaurants, and homes, the waste portion of this loss has not been calculated because of data limitations. “Some loss is inevitable because food is inherently perishable, and spoiled or deteriorated food must be discarded to ensure the safety and wholesomeness of the food supply,” write Jean Buzby and Hodan Wells, with the USDA Economic Research Service. “Legal liability and strict food safety rules can inhibit the recovery of uneaten food from homes, restaurants, and other eating establishments to be redistributed to hungry people. Costs to reduce food loss or to safely collect, store, and transport wholesome, uneaten food to food banks can also be prohibitive.” Obviously, 133 billion pounds of food loss is a ridiculous number. As food producers, you need to be engaged in this conversation. We need to be looking for workable solutions, because too many people who need food aren’t getting it. In June 2013, the U.S. Food Waste Challenge was launched, calling on U.S. producer groups, processors, manufacturers, retailers, local municipalities, and government agencies to reduce food loss and waste; to recover wholesome food for human consumption; and to recycle discards to other uses including animal feed, composting, and energy generation. The goal of the Challenge is to lead a fundamental shift in how Americans think about and manage food and food waste. In my opinion, it’s our responsibility to not only produce food, but to ensure it gets in the hands of those who need it. What better way can we show consumers we care? - See more at: http://www.porknetwork.com/blogs/Alumbaugh-Everyone-is-Responsible-268133782.html#sthash.iSjawzhY.dpuf

more...
No comment yet.
Scooped by Stéphane Bisaillon
Scoop.it!

China urged to back corn at centre of trade furore

The US Grains Council called on Beijing to approve a Syngenta genetically modified corn trait after China raised its barriers against the seed, at the centre of a trade storm, demanding "impossible" import certification.Tom Sleight, chief executive of the council, which promotes US grain exports, said it was "time for China to look at and approve this trait", known as MIR 162, and is included in Syngenta's Viptera brand seed.Although MIR 162 has been approved in "all importing countries, including the European Union, for quite some time", and was cleared by the US four years ago, Beijing authorities have stalled over a decision on the trait, which is claimed to offer resistance against insect pests such as earworm caterpillars.This has led to Chinese authorities rejecting a series of cargos of imported corn, and the distillers' grains (DDGs) feed ingredient derived from the grain, for fear of containing MIR 162.The curbs escalated this week with a demand by Chinese import inspection authority, AQSIQ, for certificates assuring that US cargos of distillers' grains are free of MIR 162 – a request the council has termed impossible to meet.'Basically embargoed'"China is asking for something that cannot be done. This certificate they're asking for does not exist," Mr Sleight said."The lack of approval of MIR 162 is becoming an undue impediment on trade."Indeed, China's move is seen by many observers as representing, in effect, a ban on imports of US distillers' grains, a high protein feed ingredient, often used as an alternative to soymeal."I don't expect to see the APHIS [trade inspection] arm of the US Department of Agriculture certifying shipments of any product, especially with a 0% tolerance," Brian Henry at Benson Quinn Commodities said."We do not believe the USDA grain inspection service will comply," said Richard Feltes at RJ O'Brien.At Iowa-based broker Market 1, Mike Mawdsley said that US certification, "isn't going to happen, thus Chinese authorities have basically embargoed our DDGs".Syngenta commentsA halt to US distillers' grains exports on this route would be a significant threat, given that China had become the top buyer, overtaking Mexico in 2012, and accounting for 46% of America's foreign shipments last year.The US-based National Grain and Feed Association in April estimated at $2.9bn the loss in2013-14 to the US corn industry from the MIR 162 trade curbs, estimated to have depressed prices of the grain by $0.11 a bushel.The National Grain and Feed Association urged Syngenta to mothball seed containing the disputed trait until it had been approved by China.Michael Mack, the Syngenta chief executive, said earlier this week that the group did not have approval "in hand and I wouldn't want to say any more about when we might have it in hand".He said that "the delays coming out of China are such that people just aren't really understanding right now even what the process is".However, there was "no technical question right now waiting from the Chinese" about the trait.Market impactMr Mack said that Syngenta sales of Viptera were "principally unchanged" despite the furore, but acknowledged that they might have fared better if Chinese approval had been gained."Did it have an impact on our sales? I suspect it had an impact on our sales growth, yes, I do," he told investors."But it certainly has not had an impact that a number of people had feared when this thing came into the forefront in January."
more...
No comment yet.
Scooped by Stéphane Bisaillon
Scoop.it!

Canada Dollar Drops to Five-Week Low on Economic Concern

The Canadian dollar sank to a five-week low before reports next week that are forecast to show the nation’s economy is lagging behind that of the U.S., its biggest trading partner.

The currency dropped versus all of its 16 major peers. The Bank of Canada cut its growth forecast on July 16 and said the nation’s economy won’t reach full potential until mid-2016. Data due next week are projected to show U.S. employment and gross domestic product climbed.

“The economic numbers are likely to continue to be a drag on the Canadian dollar,” David Doyle, a strategist at Macquarie Capital Markets in Toronto, said in a phone interview. “We’re seeing quite a bit of momentum in the U.S. labor market.”

The loonie, as the Canadian dollar is known for the image of the aquatic bird on the C$1 coin, depreciated 0.6 percent to C$1.0814 per U.S. dollar, the weakest level since June 19, at 11:59 a.m. Toronto time. It reached C$1.0818, the weakest level since June 20, and has declined 0.8 percent on the week. One Canadian dollar purchases 92.47 U.S. cents.

Canadian government bonds rose for the first time in three days, with the yield on the benchmark 10-year security falling four basis points, or 0.04 percentage point, to 2.12 percent. The yield touched 2.11 percent on July 23, the lowest since June 2013, before increasing.

U.S. GDP expanded an annualized 3 percent from April through June, rebounding from a 2.9 percent contraction in the first quarter, economists in a Bloomberg survey forecast before a report due July 30. U.S. employers added 230,000 jobs in July, exceeding 200,000 for a sixth month, economists forecast in a separate survey before data due Aug. 1.

Canadian GDP

Canada’s economy grew 2.3 percent in May from a year earlier, economists estimated before the nation’s statistics agency issues the data on July 31. It increased 2.1 percent in each of the two previous month after reaching a 17-month high of 2.9 percent in October.

Canadian employment unexpectedly shrank in June, data showed on July 11. The nation lost 9,400 jobs, versus a forecast for a gain of 20,000, and the unemployment rate increased to 7.1 percent, from 7 percent in May. 

more...
No comment yet.
Scooped by Stéphane Bisaillon
Scoop.it!

U.S. spring wheat yield prospects best in 22 years – scouts - The Western Producer

By Mark Weinraub

FARGO, North Dakota, July 24 (Reuters) – The U.S. spring wheat crop might be developing behind schedule, but yield prospects are spectacular.

The 2014 U.S. hard red spring wheat crop is projected to yield 48.6 bushels per acre, scouts on an annual crop tour said Thursday, the tour’s highest forecast in at least 22 years.

The estimate was based on samples from 373 spring wheat fields assessed during the Wheat Quality Council’s three-day tour of North Dakota, the top spring wheat state, and adjacent areas in Minnesota and South Dakota. The figure exceeds the tour’s 2013 forecast of 44.9 bushels per acre and its five-year average of 44.7.

USDA estimates the North Dakota spring wheat yield at 46 bushels per acre. The government is scheduled to release updated forecasts on Aug. 12.

The tour projected an average durum wheat yield of 36.6 bushels per acre, based on samples of 17 fields. The durum figure was down from 41.7 last year and below the five-year tour average of 38.1.

The spring wheat yield estimate is the highest in Wheat Quality Council records dating to 1992. The figure surpasses the previous tour record of 47 set in 1992, according to the group’s website.

Scouts cautioned that the current crop was at least four to six weeks from harvest.

“A lot of things could happen between now and then, and most of them are not good. But if it just keeps going, we could have a tremendous crop,” said tour leader Ben Handcock, executive vice president of the Wheat Quality Council.

Much of the crop was developing later than usual due to planting delays in the spring, although growing conditions since then have been ideal.

The U.S. Department of Agriculture said 79 percent of North Dakota’s spring wheat had reached the heading phase by July 20, behind the five-year average of 83 percent.

“Some of that late, late stuff has a ways to go,” said Mark Weber, director of the Northern Crops Institute and a scout on the tour, adding, “A lot can happen.”

Potential threats include a hot and dry August that could limit grain fill and an early frost that could kill crops that have not reached maturity. Some late-planted wheat could get snowed on before it is harvested, Handcock said.

North Dakota is the largest U.S. producer of high-quality hard red spring wheat, which is used in bread and for blending, and durum wheat, which is used to make pasta.

Spring wheat prospects became more significant after drought in the southern Plains reduced this year’s harvest of hard red winter wheat, the largest U.S. wheat class, which is also used for bread.

The USDA projects 2014 production of hard red spring wheat at 520 million bu., up 30 million from 2013. The USDA sees U.S. all-wheat production at 1.992 billion bu.

more...