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Corn prices slowing wheat exports, expert tells Montana grain growers

Drought-induced high corn prices have increased wheat demand but decreased U.S. exports with wheat prices currently uncompetitive in the world market, an expert told hundreds of Montana grain growers Wednesday in Great Falls, the hub of state’s top wheat growing region.

“Really the story of wheat this year is about corn,” said Mike Wong, senior vice president and merchandising manager for Columbia Grain Inc. in Portland, a leading world grain exporter.
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Are Soybean Yields Headed for a New Record? (Darrel Good)

Are Soybean Yields Headed for a New Record? (Darrel Good) | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it
USDA is forecasting a new record average yield for soybeans this year, but whether the crop will live up to expectations all depends on the weather.

By Scott Irwin and Darrel Good, University of Illinois

There has been much discussion this summer about the prospects for what can only be described as spectacularly high U.S. corn yields. While not receiving quite as much attention, the USDA is currently forecasting a new record yield (45.2 bushels) of soybeans in 2014, exceeding the 2009 record of 44 bushels by a large margin. Like corn, high soybean yield expectations this year are based on generally favorable growing conditions to date and on the high percentage of the crop rated in good or excellent condition. 

The USDA's Crop Progress report of July 21 estimated that 73 percent of the crop in the 18 major producing states was in either good or excellent condition as of July 20. That is the largest percentage in those two categories for that week since 1994, when 83 percent of the crop was rated in good or excellent condition, the third largest since the report was initiated in 1986, and 14 points above the average for 1986 through 2013. The purpose of the today's article is to specifically identify the summer weather conditions that contribute to high U.S. soybean yields and compare weather conditions to date in 2014 with those previous very favorable conditions. We follow the same procedures that we used in our previous analysis of corn yield prospects.


Figure 1 shows the annual average U.S. average soybean yield for the period 1960 through 2013, with a linear trend fit to that yield data. U.S. soybean yields have increased by an average of 0.39 bushels per year since 1960 and a linear trend explains nearly 88 percent of the annual variation in the average yield. Given the trend yield estimates found in Figure 1, we want to identify the five years from 1960 through 2013 when the U.S. average yield had the largest positive deviation from the calculated trend yield. The deviation from trend can be calculated in terms of bushels or percentages. The five years since 1960 with the largest positive difference between actual and trend yield in bushels were 1992, 1994, 2004, 2005, and 2006. The five years with the largest percentage deviation included 1961 and 1979, but not 2004 and 2006. As a result, we include all seven years in the analysis, as indicated in Figure 1. Interestingly, three years are included in the high yielding years for soybeans that were not included for corn , and three years were included in the corn analysis that are not included for soybeans. The numerical deviations from trend yield for soybeans are summarized in Table 1. Yields in those seven years were 2.3 to 5.7 bushels above the calculated trend, with an average difference of 3.0 bushels. Yields were 6.1 to 15.9 percent above trend, with an average difference of 8.8 percent.



Next, we identify the summer weather conditions in each of those seven years that likely contributed to the very large U.S. average soybean yields relative to trend. U.S. growing season weather conditions for each of those years for the entire soybean producing region are difficult to summarize. Following the procedure used for corn, we use precipitation and average temperature for each of the months of June, July, and August in the states of Illinois, Indiana, and Iowa as an indication of growing season weather for the entire production region (Table 2). The shortcomings of examining weather conditions for only a portion of the production area are recognized. Still, these states account for about 30 percent of the soybean harvested acreage.


The data in Table 2 paint an interesting picture of growing season weather in these three states in years of high soybean yields. First, extreme monthly precipitation amounts did not occur frequently. The highest monthly precipitation was 8.7 inches in Indiana in July 1992 and the lowest amount was 1.7 inches in Illinois in June 1992. Comparing the average precipitation for all three states for the seven high-yielding years to the average for the entire 54-year period we find that June was slightly drier than average and July and August were slightly wetter than average.

Temperature observations are even more interesting. In the high-yielding years, average temperatures for several months in some states were above the 1960-2013 average (marked in bold). Temperatures were above the long-term average in June 1994 in all three states, above the long term average in all three months in all three states in 2005, and above average in June in Iowa and in July and August in all three states in 2006. The coolest summer of the seven years for all three states was 1992 followed closely by 2004. For the seven high-yielding years, temperatures averaged 0.3 degree below the long-term average in June, 1.1 degrees below in July, and 1.4 degrees below in August. The year with the highest positive yield deviation from trend was 1994. That year was characterized by a warmer than average June, a cooler than average July, and a much cooler than average August. In addition, monthly rainfall totals were not extreme.

It is, of course, interesting to compare the summer weather conditions most conducive to high soybean yields to those associated with high corn yields. Not surprisingly, the patterns share some striking similarities--cooler and wetter than average during July and August is important for high corn and soybean yields. There are also some differences that should be noted. First, moderately below average precipitation in June is beneficial for soybean yields. Second, high soybean yields do not require as large of reductions in July and August temperatures as corn, about one degree below average for soybeans and two degrees below average for corn.

Finally, we can compare what we know about the 2014 growing season so far with the growing season in previous high yielding years. Preliminary weather data for June 2014 in Illinois, Indiana, and Iowa are compared to the average June weather in those states in the seven previous years of very high soybean yields (Table 3). June precipitation was well above both the 7-year average and the long-term average in all three states. This was particularly notable in Iowa, which received over nine inches of precipitation, about twice its average for the month. The three-state average precipitation in June 2014 was double the average in those seven high-yielding years. Excessive June precipitation extended beyond Iowa to include Minnesota, Nebraska, and Wisconsin. As noted above, the largest positive deviations from trend yield have been associated with moderately below-average June precipitation, so the excessive levels received in these states this year may well have reduced yield potential. Average temperatures in June were not excessive, but were above the long-term average as well as the average in the previous seven years of very high soybean yields. Like corn, the 2014 growing season did not start off in June with as uniformly optimal conditions as the seven growing seasons that produced the highest soybean yields relative to trend yield since 1960.


Implications


Expectations of a U.S. average soybean yield above trend value in 2014 seem justified by current crop condition ratings. A yield above trend by as much as the average (3.0 bushels) of the previous seven highest yielding years relative to trend since 1960 would be 46.6 bushels per acre. However, June weather conditions in those high yielding years tended to be moderately dry and cool, while June 2014 in was wet and warm. This was particularly true for Iowa, which received over twice its long-term average precipitation in June. Weather conditions so far in July have been mixed. Temperatures in major growing areas were below average early in the month, moved to above average this week, but are forecast to retreat again next week. Average July temperatures are expected to be about 2.5 degrees below average. Rainfall in the first three weeks of July was slightly above to slightly below average for most areas, but was well below average in some key northern states. History suggests that cool, moist conditions are needed in August for the U.S. average yield to be equivalent to that of the other high yielding years examined in this article.

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Canada Grain drain — are carryover projections off the mark?

Canada will carryover more grain than usual when the crop year ends July 31, but analysts say it may be less than some people think.
That mountain of Western grain created from a record harvest last fall, combined with poor rail service until spring, is being whittled away. In its July Outlook for Principle Crops Agriculture and Agri-Food Canada (AAFC) forecasts 21.6 million tonnes of principle crops will be carried over, more than double last year’s 9.5 million tonnes.
That’s big, but it’s two million tonnes or 8.5 per cent lower than its March estimate, probably because the railways started moving a lot more grain in March. That’s when the federal government ordered them to pick up the pace, but also when weather conditions started to improve.
Anecdotal reports say Manitoba farmers have little grain left in their bins, leading to speculation carryover stocks will be lower than earlier forecasts suggested.
“We could be surprised on the smaller commodities, but not likely on the wheat and canola,” Bruce Burnett, CWB’s weather and crop specialist said in an interview July 23.
“We’ve started to move more grain, but there’s still a pretty large pile.”
AAFC is forecasting 8.9 million million tonnes of wheat, excluding durum and three million tonnes of canola will be carried into the 2014-15 crop year. That’s down six and 10 per cent from its March forecast.
“A lot of grain is moving now,” said Wade Sobkowich, executive director of the Western Grain Elevator Association. “Thunder Bay is humming and Vancouver and Prince Rupert are operating at historic levels.”
Statistics Canada’s reported July 24 grain deliveries between January and June 2014 are up 27 per cent compared to the same period a year ago. But the big difference between the two years started this March. January and February 2014 deliveries were almost 7.6 and 12 per cent lower than in 2013, but 2014 March, April, May and June deliveries were 34, 68, 52 and 53 per cent higher than in 2013.
Grain shipping is expected to remain brisk even after the new crop, said Mike Jubinville, president of Pro Farmer Canada. Harvest in many parts of the West will be delayed, which means more elevator space for old crop deliveries and more time for farmers to deliver.
“Manitoba and Alberta are drained of grain, but there is still a surplus in Saskatchewan,” he said.
Burnett agrees there’s still a lot of grain in Saskatchewan partly because it’s the biggest grain-producing province. But there’s another factor. When the government ordered the railways to collectively move a million tonnes of grain a week or face fines of $100,000 a day, the railways focused on loading at elevators with the quickest turn around, he said. Most of those points were in Alberta for West Coast movement and Manitoba for Thunder Bay. But there are also regional pockets of surplus grain, such as in northern Alberta and durum in southern Saskatchewan, Burnett said.
A lot of southern Manitoba farmers, frustrated by the wide basis (difference between elevator and futures prices), shipped their grain to the United States. Even more would have gone had their been more trucks available, Jubinville said. Some grain went out in producer cars from shortline railways.
Statistic Canada data shows Canadian wheat and durum exports to the U.S. as of June 30, 2014) at 3.3 million tonnes , up 47 per cent from the same period a year ago.
Mark Hemmes, president of Quorum Corporation, the firm hired by the federal government to monitor Western grain transportation estimates that could work out to five million tonnes for the crop year.
That would leave a Western Canadian all-grain carryover of 15 million tonnes — close to double the average 7.9 million tonnes, but well under earlier forecasts of 23 million tonnes or more.
Whether Manitoba farmers continue to export wheat south or go back to dealing with local elevators will depend on local versus American prices. During the first year of the open market for wheat starting Aug. 1, 2012 the two markets arbitraged, Jubinville said. But this crop year the delay in shipping forced Canadian elevators to widen their basis to discourage deliveries to a plugged elevators.
Even with extra trucking costs many Manitoba farmers earned more shipping south.
As for carryover projections, Jubinville said they could continue to shrink.
“I think canola exports could be the biggest in history at nine million tonnes, despite the slow start,” he said.
“I suspect the carryover could be 2.2 million to 2.5 million tonnes versus the three million projected by Agriculture Canada.”
The narrowing canola basis for both new and old crop supports the idea that canola supplies are tightening, he added. In some parts of Manitoba and Alberta the canola basis is positive.
While the wheat basis has improved, it’s still generally wider than usual, but it varies — a sign that some areas still have a lot of wheat around, Jubinville said. For example, the basis at Fannystelle, Man. July 22 was $32 under the futures, compared to $51 under at a point in Saskatchewan.
Earlier this year market analysts were predicting the grain backlog to persist well into the new crop year based on a huge carryover and an average yielding crop this year.
But AAFC has revised its 2014-15 carryover forecast too. In March it predicted the carryover of all crops would total 20.1 million tonnes as of July 31, 2015. But its July report dropped the number almost in half to 12.3 — just 2.4 million tonnes over the 2013 carryover. That forecast assumes average yields this fall.

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Study says neonics are widespread in Iowa waters

A class of insecticides popular with corn and soybean farmers in the U.S. Midwest but feared as a factor in the decline of U.S. honey bee colonies and other crop pollinators, has been found to be widespread through rivers and streams in Iowa, according to a government study released on Thursday.

The study, released by the U.S. Department of the Interior, U.S. Geological Survey, marks the first broad-scale investigation of multiple neonicotinoid insecticides in waterways in the Midwestern U.S., and is one of the first conducted within the entire United States, according to the government scientists.

In the report, 79 water samples from across Iowa, the top U.S. corn-producing state, were collected during the 2013 growing season. Researchers said the use of neonicotinoid insecticides has grown in recent years, and they found them to be both "mobile and persistent" with "a strong pulse of neonicotinoids associated with crop planting" in streams.

The researchers said the broad use of the neonicotinoids, "needs to be closely examined in relation to environmental impacts."

Similar studies by the USGS have found many other types of common agricultural chemicals in stream samples in Iowa, but researchers said there was a "substantially greater neonicotinoid detection frequency" observed in this study compared to historical detections of other insecticides.

Neonicotinoids, also known as neonics, are sold by agrichemical companies to boost yields of staple crops, but are also used widely on annual and perennial plants in lawns and gardens. Neonics, chemically similar to nicotine, are commonly applied to the seeds before they are planted.

As use of the neonics has grown, some scientists have linked the insecticides to large losses in honey bee colonies that are considered critical for the production of many U.S. crops. Honey bees pollinate plants that produce about a quarter of U.S. consumer foods, according to the U.S. government.

Many agrichemical companies, including Bayer, whose neonic products are top sellers around the world, say there are a mix of factors killing off the bees and that neonics are important tools for boosting crop production.

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Mosaic to halt muriate of potash output in New Mexico

U.S. fertilizer producer Mosaic Co said on Wednesday that it would permanently halt production of muriate of potash at its Carlsbad, New Mexico mine due to the quality of ore and age of the facility.

The Minnesota-based company said in a regulatory filing that it plans to continue producing a premium potash product at Carlsbad, called K-Mag. Mosaic also said it would continue to produce muriate of potash - the global commodity form of the crop nutrient - at its larger mines in the western Canadian province of Saskatchewan.

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Texas wheat producer : Weekly Market Report

Texas wheat producer : Weekly Market Report | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it
Weekly RecapUS Wheat futures traded mixed last week with the KCBT September contract gaining three cents for the week. On Tuesday, the contract fell to its lowest level since early February on technical selling and spillover weakness from corn. Throughout the rest of the week the futures rotated between positive and negative closings mostly due to technical selling, bargain buying, rising global supplies and strong export competition from the Black Sea Region. Downward pressure in the market continued on Monday as the September contract fell another three cents. On Monday afternoon, September 2014 HRW wheat futures closed at $6.25.
 September 2014 HRWW - 7/28/14Around the World
Last week the International Wheat Genome Sequencing Consortium (IWGSC) announced that they are approaching a milestone in man’s ability to improve wheat by fully sequencing its genome. A group of scientists, breeders and growers reported that they have completed more than half of the genome project and the entire sequence is on the horizon.

Domestic:
Last week the annual wheat crop survey, organized by the Wheat Quality Council, projected the 2014 HRS wheat crop would produce 48.6 bushels per acres. The spring wheat estimate is the highest in the history of the Wheat Quality Council dating back to 1992.

Many US farmers are reluctant to sell in the down market. Farmers without adequate storage facilities are using giant polyethylene storage bags that are 300 feet in length and 10 feet in diameter. Reports are that demand for these bags has surged this summer. The lack of selling has led basis higher.

Europe:
The European Union and Ecuador finalized a trade deal last Thursday. The EU will extend their current preferential export tariffs to Ecuador, which are due to expire in December, until the new trade deal takes effect in the second half of 2016.

Despite tensions between Germany and the United States over spying accusations, Foreign Minister Frank Walter Steinmeier wants to restart the Transatlantic Free-Trade (TTIP) agreement talks.

European Markets are now focused on rain in Germany and France during the past two weeks that could possibly lower wheat quality. In France, reports are that Hagberg Falling Number (FN) values of a significant percentage of the French wheat crop will be in the 140-160 seconds this year due to untimely rains.

Asia:
China had a record grain harvest this summer, but experts are concerned about the growing threat of water scarcity and soil degradation. This marks the eleventh consecutive year of increased grain output. However, the country continues to struggle to feed its 1.3 billion people, and water and soil resources are in jeopardy. Heavy use of chemical fertilizer for decades, has decimated soil fertility and raised food safety risks. China's arable land, which accounts for less than 10 percent of the world's total, consumes over one third of the world's chemical fertilizer.

Black Sea Region:
Black Sea countries like Russia, the Ukraine and Kazakhstan have managed to capture a large percentage to the North African market because of a freight advantage. For example, Egypt’s top grain importing port of Damietta is located less than 1,200 nautical miles from the Ukrainian port of Odessa, compared to more than 10,500 nautical miles from Portland, Oregon and 6,700 miles from New Orleans.

Russia has harvested 35.6 MMT of grain, most of which is wheat from a reported 22 percent of its total area. The average yield this year is reported to be 3.47 tons per hectare, up from 2.88 tons per hectare last year.Closer to HomeAccording to the National Agricultural Statistics Service, scattered showers occurred in South Texas and the Lower Valley, stretching across the Coastal Bend and into the Blacklands. The majority of the state averaged no more than half an inch in rainfall, though North East Texas and the Upper Coast received up to two inches in some areas. Other areas of Texas experienced hot and dry temperatures with minimal moisture.

Small Grains: Winter wheat harvest for this season reached completion statewide. Wheat fields were currently being worked for the early planting season in the Northern High Plains and the Cross-Timbers.
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dry US outlook sends soybeans back over $11

Have investors overdone the selling in grains and oilseeds?

To be sure, there are few thinking futures are away to the races.

But there is an idea that prices have done enough for now on the downside to price in expectations of large world production, with Australia& New Zealand Bank the latest to caution against uber-bearishness.

And soybean futures did managed to extend their recovery quite convincingly, closing up 2.2% at $11.07 ¾ a bushel for November delivery.

'Expecting good demand'

That was the first close starting with an $11 in two weeks, and took the contract back above its 20-day moving average for the first time this month.

It was fostered, in fundamentals, both by supply and demand ideas.

On demand, the US announced yet another sale to China, of 486,000 tonnes for 2014-15, although 66,000 tonnes are of optional origin, meaning they could end up being bought from, say, Brazil.

Still, with weekly actual exports firm too, at 112,345 tonnes last week, up from 97,160 tonnes the week before, it was definitely advantage bulls on this score.

"Analysts are expecting good demand for US soybeans after the large break in prices," Fintec Group noted.

'The driving force'

On supply, the forecast for dryness in parts of the Midwest changed a little, turning wetter in in the middle of the week for Nebraska and Kansas – but at the expense of Iowa and Illinois, so offering no net gain.

"The dryness in the western production areas is really the driving force in the market today," Darrell Holaday at Country Futures said.

Citigroup's Sterling Smith said that "there is some slight nervousness about dry weather being seen across the western Corn Belt, and the forecasts are leaning drier over the next 10 days.

"If this dryness and warmer bias continue on into the middle of August, this will be an issue."

Soybeans, unlike corn, have yet in earnest to get through their vulnerable developmental phase, pod-setting, making dry weather a particular concern.

And at a time when hedge funds already have a large net short in the oilseed, the biggest since 2006, making the market vulnerable to profit-taking.

'Demand has seen an uptick'

Corn itself rose 1.3% to $3.76 ¾ a bushel for December delivery, ending above its 10-day moving average for the first time this month, helped also by the dry weather.

"There is some dryness beginning to creep into the south western production areas," Mr Smith said, adding that "demand has seen an uptick as prices have slumped nearly 30% since posting highs in early May".

That said, export sales, at 805,365 tonnes, were OK but not fantastic, down from 941,977 tonnes the previous week.

Wheat drops

It was wheat which let bulls down, falling 0.6% to $5.34 ¾ a bushel in Chicago for September delivery.

Sure, there was much comment about worries in eastern Australia, from the likes of Allendale, which said that "Australian wheat producers are becoming concerned about dryness and the development of El Nino.

"Producers in New South Wales and Queensland are already dealing with sporadic showers and low subsoil moisture."

However, conditions in the south have been near-optimal, allowing National Australia Bank to forecast a harvest above that of the official Abares crop bureau.

Furthermore, US exports were soft last week, at 395,963 tonnes, down from 527,633 tonnes the week before.

Signally wheat, in Paris dropped 0.8% to E178.25 a tonne despite lingering concerns over the French crop, although drier weather in the country is expected to improve harvest progress this week.

'A little less bearish'

Among soft commodities, cotton hitched a ride with the row crops, adding 0.8% to 65.88 cents a pound in New York for December delivery, recovering from a contract closing low in the last session.

In fact, "cotton is attempting to end a string of 12 consecutive weekly declines, its worst week to week swoon in 55 years", Mr Smith noted.

And it may get some help from the extent of selling that hedge funds have already managed, besides a more promising shape to the future curve, according to John Robinson, head of cotton marketing at Texas A&M University.

"After maintaining a months long inversion of old crop over new crop futures, the December continues to trade below the March, May, and July 2015 contracts," he said. 

"While the forward spreads don't cover the cost of storing cotton, at least it is a move back towards normal economic relationships. 

"And that move suggests things might be a little less bearish for the future."

'Flowers could be aborted'

Arabica coffee added 1.1% to 181.10 cents a pound in New York for September delivery, amid continued concerns over the impact of rains on drought-hit Brazilian plantations, unfortunately, not at the ideal, or usual, time.

"The longed-for rainfall in Brazil has now become so extensive that harvesting keeps being disrupted," Commerzbank said.

"What is more, there are fears that it could result in the pollination for the 2015 crop beginning too early."

At Price Futures, Jack Scoville noted rain in Brazil over the weekend, which will encourage further early flowering, ahead of the 2015 harvest. 

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US cattle squeeze drives futures to record high

Cattle futures set fresh record highs as Tyson Foods, following up data showing the smallest US herd on record, underlined the US supply squeeze, which it forecast would worsen in its next financial year.

The US meat giant, unveiling a 4.4% rise to $260m in earnings for the April-to-June quarter, forecast a drop of 4-5% in supplies of fed cattle in the US in its next financial year, which starts in October.

The figure compares with a forecast of 3-4% decline during its current financial year, and implies that beef prices, which have hit a succession of record highs thanks to tight cattle supplies and resilient demand, will remain elevated.

"If you look at the environment, you got to believe the beef prices… you're going to have a similar environment next year as this year," Donnie Smith, the Tyson Foods chief executive, told investors.

Herd shrinks

The comments follow official data late on Friday highlighting the extent of decline in the US cattle herd, and its impact on supplies of fattened animals.

The US Department of Agriculture pegged the US herd of cattle and calves at 95.0m head as of July 1, the lowest since it in 1973 began recording data at this time of year.

The figure was down 2.9% on the figure for July 1 2012, the latest comparable figure, and included a 2.5% drop in inventory of beef cows and a 2.1% drop in heifers, future breeding stock.

"This number implies that the herd rebuilding process will take significantly longer than many expect and the beef industry will have to contend with tight feeder cattle supplies through 2016," a report from Paragon Economics and Steiner Consulting said.

Commerzbank said: "The problem was caused years ago by drought in key cattle-rearing areas, with high feed costs reducing the profitability of cattle breeding.

"Once stocks have been reduced, it takes a very long time to build them back up again."

Feedlot dynamics

A separate USDA briefing, on US cattle in feedlots, also highlighted the beef squeeze, with the number of animals on feed down 2.4% year on year at 10.1m, head as of the start of the month.

Cattle placements on feedlots tumbled 6.2% to 1.46m head last month, despite the boost to margins from lower grain prices and record beef prices – if not the elevated price of feeder cattle, that is, animals ready for fattening.

The decline in placements of larger cattle, of more than 700 pounds, was particularly steep, tumbling 14%, contrasting with a 13% rise in take-ins of animals below 600 pounds, which will need more fattening before sale.

The high number of lighter animals thus implies a particular squeeze in shorter-term supplies of live cattle, that is, animals ready for slaughter.

"In addition to placing fewer cattle on feed, feedlots also have been placing increasingly lighter cattle," Paragon Economics and Steiner Consulting said.

"[That] effectively stretches the marketing window and further limits the number of cattle that we should expect to come to market in the October-to-December quarter."

Record highs

Live cattle futures for August touched a record high for a spot contract of 160.25 cents a pound in early deals in Chicago, before easing to stand at 158.925 cents a pound in late deals, down 0.1%.

"Front month live cattle futures are showing signs that market is a little tired up here," said Jerry Stowell at Country Futures.

Feeder cattle futures for August hit a record for a spot lot of 220.975 cents a pound before easing back to 219.90 cents a pound, up 0.8% on the day.

On beef prices, the wholesale value, the so-called cut-out, of choice beef rose $1.39 per hundredweight from Friday to a record $258.77 per hundredweight.

Lower grade select beef was $1.71 higher at $256.04 per hundredweight.

Hog outlook

Tyson Foods added that hog supplies would recover in its 2015 fiscal year, by 2%, after the drop of some 5% in the current year, a reflection of the outbreak of porcine epidemic diahorrea virus (PEDv).

"It looks like to us that more hogs are going to be coming to the market in the fall," Mr Smith said.

"With grain prices coming down you're likely to see a little bit of finished hog expansion, perhaps in the latter part of our 2015 year."

While Tyson Foods' earnings in its latest quarter equated to $0.75 per share, some 3 cents below market expectations, the group raised its estimate for sales in the year to the end of September by $1bn to $38bn, ahead of Wall Street expectations of a $36.9bn result.

For the 2015 financial year, the group forecast sales of $42bn, including the integration of Hillshire Brands.

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Libye: deux réservoirs de carburant en feu menacent la capitale

Libye: deux réservoirs de carburant en feu menacent la capitale | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) | Scoop.it

Le porte-parole de la Compagnie nationale libyenne de pétrole a indiqué lundi à l'AFP que l'incendie qui ravageait deux immenses réservoirs de carburant à Tripoli était désormais «hors de contrôle», en raison des combats à proximité, appelant la communauté internationale à l'aide.

«Les pompiers ont quitté le site définitivement. La situation est désormais hors de contrôle», a déclaré Mohamed al-Hrari, appelant à une aide internationale.

M. al-Hrari a précisé que des pays comme l'Italie et la Grèce étaient prêts à envoyer des avions de lutte contre les incendies, mais ont posé comme condition l'arrêt de combats entre milices rivales.

«Nous avons essayé d'entrer en contact avec les deux camps pour les convaincre de cesser les combats, en vain», a-t-il déploré.

Le gouvernement a confirmé de son côté que l'incendie était hors de son contrôle, appelant «les citoyens habitant dans un rayon de 3 kilomètres du lieu (de l'incendie) à quitter leurs maisons immédiatement».

Un premier incendie a été déclenché dimanche soir par l'explosion d'une roquette sur un réservoir contenant plus de 6 millions de litres de carburant. Lundi, un deuxième réservoir a pris feu.

Les réservoirs se trouvent sur la route de l'aéroport de Tripoli, théâtre depuis le 13 juillet de violents combats entre milices rivales.

Ils contiennent au total plus de 90 millions de litres de carburant, en plus d'un réservoir de gaz ménager, selon la Compagnie nationale de pétrole.

Les pompiers tentaient depuis dimanche soir de venir à bout du feu avec des moyens limités. Mais les combats à proximité les ont contraints à quitter les lieux à plusieurs reprises.

Lundi en milieu de journée, des roquettes continuaient à s'abattre près du site, selon un photographe de l'AFP sur place.

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Tyson sells Brazil, Mexico poultry arms to JBS

US-based Tyson Foods acknowledged defeat in efforts to conquer Latin America's poultry market, the backyard of rival JBS, as it sold to its competitor operations in the region representing, by staff levels, most of its foreign operation.

Tyson Foods, which is cementing its position in its home US market through the $8.55bn purchase of Hillshire Brands, said it had agreed to sell its Brazilian and Mexican operations to JBS for $575m in cash.

"In the short term, we'll use the sale proceeds to pay down debt associated with our acquisition of Hillshire Brands," Donnie Smith, the Tyson Foods chief executive, said.

Tyson beat Pilgrim's Pride, the US chicken group controlled by JBS, to win the Hillshire takeover.

'Lack of scale'

However, Mr Smith acknowledged that the businesses in Brazil, where Tyson is marketed as the brand that "o mundo todo aprova", meaning "the whole world approves", and in Mexico, where it has been for 20 years, had fallen short of matching Tyson's strength in its domestic market.

"Although these are good businesses with great team members, we haven't had the necessary scale to gain leading share positions in these markets," he said.

The businesses sold employ more than 10,000 staff, leave Tyson's international poultry business comprising Chinese and Indian operations employing a combined 5,000 people.

"Longer term, we remain committed to our international business and will continue to explore opportunities to expand our international presence," Mr Smith said.

Appeal of chicken

For JBS, meanwhile, the acquisition offers an opportunity to extend the reach into poultry for a group whose growth into the world's largest meatpacker was built around beef.

Indeed, the deal comes only two weeks after JBS paid R$246.0m ($111m) to purchase Brazilian poultry assets from Céu Azul Alimentos.

JBS said that it had paid $175m for Tyson's Brazilian business, which will lift its sales by about $350m, with $400m paid for the Mexican division.

The Mexican unit, Tyson de México, will be folded into Pilgrim's Pride, which already has some operations in the country, and expected a boost of $650m to its revenues from the deal.

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Frank Backx July 28, 2014 -A.M. Grain Comment

July 28, 2014 -A.M. Comment

 

Dec C 3.74 +2 Nov S 10.94 +11 Sep W 5.34 -4. June in Midwest was among the wettest, July is among the coolest. Does that mean record yields? CD unch, 93.25

 

 

 

 

Sincerely,


HDC Forest Location Manager 
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DuPont Second Quarter Earnings Wither With Lower Corn Seed Volumes

Summary
  • Sales and earnings decreased from the prior year.
  • The decrease in earnings and sales were in-line with what the company announced in late June.
  • On the bright side, the company decided to increase the dividend by 4.4%.

The last time I wrote about E.I. du Pont de Nemours and Company (NYSE:DD) I stated:

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"Due to the slightly bullish technicals, no increase to the dividend this quarter, and overall market craziness, I will pull the trigger here right now but only on a small batch." Since that article was published the stock is down 4.2% while the S&P 500 (NYSPY) is up 5.32% in the same timeframe. DuPont is a diversified technology company operating in the segments of Agriculture, Electronics & Communications, Industrial Biosciences, Nutrition & Health, Performance Chemicals, Performance Coatings, Performance Materials, Safety & Protection, and Pharmaceuticals.

The company reported earnings before the market opened on 22Jul14 and on the surface the results were not that great with the company reporting earnings of $1.17 per share (in-line with estimates) on revenue of $9.71 billion (missing estimates by $80 million). The stock dropped 0.9% the day it reported earnings and what I'd like to do at this time is delve into the weeds and pick out some highlights from different portions of the report to see if the stock is worth buying at the present time.

Segment Revenue


Income Statement
At first glance, I notice that the Agriculture quarterly revenue was flat, but if you remember, during the quarter the company told us that revenue was going to be impacted this quarter. Impacted it was indeed as the results were 18% less than they were last quarter. The agriculture business was responsible for 37% of the company's total revenue in the first quarter (a 6% drop from the prior quarter in terms of accountability). The agriculture segment improves the quantity, quality, and safety of the global food supply through manufacturing insecticides, fungicides, herbicides, and plant food. On the whole, the company's revenue stream decreased 1% from last year and 4% from last quarter. This is the second consecutive quarter in which revenues have dropped, and is grounds for me to put this guy in the penalty box.

From an income statement perspective, other income increased by 157% and brought total sales up by 200 basis points, turning total sales into a positive number. Other operating charges decreased by 12% from last year and interest expenses decreased by 18%, helping continuing operations income before taxes to a 5% increase from last year. After tax income from continuing operations had a 4% increase from last year but when taking into consideration the non-GAAP items we see a 9% drop in operating earnings. After the drop in operating earnings we see a 9% drop in earnings per share as there was no effect from a share buyback.

Balance Sheet


On the liability side of things, short-term borrowings and capital lease obligations increased 24%, and income taxes increased 120%, but other accrued liabilities decreased 12% and kept current liabilities flat. On the positive side, total liabilities decreased by 1%.
The cash and cash equivalents increased by 10% from last quarter, marketable securities increased by 158%, account receivables increased 11%, and deferred income taxes increased 12%. However, there was a negative effect on the current asset side of the equation as prepaid expenses decreased 25% and assets held for sale dropped 100%. But these negative effects didn't hurt the current assets as they increased 2% in aggregate. All total assets increased 1% from last quarter.

Conclusion

The company saw earnings decrease by 9% thanks in part to the 1% reduction in revenues while the share price was down 3.56% between earnings calls. I definitely hate that both revenue and earnings were down on a yearly basis. The results were horrible to me, and other investors seem to think so too as the stock dropped 0.9% after reporting while the S&P500 increased in value by 0.5%. The earnings per share drop from last year were in-line with the company's guidance back in late June. If we were to try and find a bright side to this earnings report you can say that volume in crop protection, nutrition and health, and most industrial business grew, but then again, all that was offset by the impact of portfolio changes, and lower corn seed volumes. Another bright side is that the company announced it would raise its dividend by 4.4% to $0.47 per share. I believe this earnings report earns a D at best.

Disclaimer: This article is meant to serve as a journal for myself as to the rationale of why I bought/sold this stock when I look back on it in the future. These are only my personal opinions and you should do your own homework. Only you are responsible for what you trade and happy investing!

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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.

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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

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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.

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Corn Condition Slips 1% in USDA Crop Progress Report

U.S. corn slipped slightly to 75% good to excellent from 76% a week earlier and soybeans inched down two points to 71% in USDA's weekly crop progress and condition report, released Monday.

Rain subsided in Iowa, the top corn and soybean producer, which reported 5.8 days suitable for fieldwork. That state's corn improved to 78% good to excellent and soybeans stayed at 74%, although topsoil moisture declined to 87% adequate to surplus from 93% the week before. That was much better than the 48% adequate to surplus the year before.

Chicago corn and soybean futures closed higher on Monday on drier forecasts for the Midwest and China buying soybeans, however futures are still well below a year ago.

The weekly crop progress data showed corn silking at 78% and the dough stage at 17%, slightly better than the 75% and 16% averages. Iowa was at 85% and 14%, Illinois at 94% and 25%, and Nebraska at 85% and 23%.  

For soybeans, blooming was at 76% and 38% set pods, which were ahead of averages. In Iowa, 82% were blooming versus the 80% average and Illinois was at 83% versus the 72% average. In Iowa, 41% had set pods, Illinois 44% and Indiana at 51%, all ahead of the averages.

Winter wheat harvest at 83%
Winter wheat harvest advanced to 83% from the previous week's 75% and was ahead of the 80% average. Harvest was 97% done in Kansas, the largest wheat state and mostly hard red winter, versus the100% average. Nebraska wheat was 79% cut against the 83% average.

The soft red winter harvest advanced with Illinois at 100% versus the 98% average, Indiana at 98% versus 100% average, and Arkansas at 100% versus 100%.

Spring wheat was 93% headed, versus the 93% average. North Dakota, the top producer, was 91% to trail the 93% average. The overall crop was unchanged at 70% good to excellent.  North Dakota's crop was unchanged at 82% good to excellent.

Cotton bolls set at 49%, crop 54% good to excellent
Bolls were set on 49% of the cotton and 87% had squared versus the 51% and 89% averages. The crop was 54% good to excellent, up 2 points from a week ago.

Oats were 44% harvested, compared with the 35% average, and were unchanged at 64% good to excellent. Sorghum coloring was at 28% and heading at 47% versus the 28% and 43% averages. It was 60% good to excellent.

Rice was 42% headed, versus the 44% average and was unchanged at 71% good to excellent.

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Soybeans Rise Most in Nine Weeks on U.S. Weather Concerns

Soybean futures rose the most in nine weeks on concern that dry weather forecast into August will curtail yields in the U.S., the world’s biggest grower. Corn rose, while wheat fell.

Weekend rain was less than expected across parts of the Midwest, and drier weather in the next 10 days will expand crop stress to about 25 percent of the region, Commodity Weather Group LLC in Bethesda, Maryland, said in a report. Cool temperatures will help avert serious damage if precipitation expected late next week arrives, the company said.

“People want to see a widespread Midwest rain before pressing the soybean market” after this year’s price slump, Dan Cekander, the director of grain-market analysis at Newedge USA LLC inChicago, said in a telephone interview. “Soybean yields are determined by August rain.”

Soybean futures for November delivery rose 2.2 percent to close at $11.0775 a bushel at 1:15 p.m. on the Chicago Board of trade, the biggest gain for a most-active contract since May 21. The oilseed has climbed 5 percent from a 45-month low of $10.55 on July 23.

China bought 486,000 metric tons of U.S. soybeans for delivery after Sept. 1, the Department of Agriculture said today in a report. In the week ended July 17, U.S. exports more than tripled to 2.68 million tons from a year earlier, agency data show.

In the two weeks ended July 22, hedge funds and other large speculators bet on a price decline for the first time since December 2011, Commodity Futures Trading Commission data showed on July 25. The net-short position of 18,543 contracts was the biggest since October 2006.

Corn futures for December delivery rose 1.3 percent to $3.7675 a bushel, the biggest gain since June 19. On July 24, the price touched a four-year low of $3.6425.

Wheat futures for September delivery fell 0.6 percent to $5.3475 a bushel.

This year, wheat has dropped 12 percent, and corn has declined 11 percent.

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Outbreaks of diseases in Pacific Northwest crops

Vegetable and oilseed growers are advised to take extra precautions after outbreaks of three fungal diseases in Pacific Northwest crops were recently found, said plant pathologist Lindsey du Toit.

For preventative measures and related information about the outbreaks on vegetables and oilseeds, view the newly released reports on black leg, light leaf spot, and white leaf spot by plant pathologists Cindy Ocamb, Oregon State University, and du Toit, Washington State University.

While only five Washington counties have quarantines for black leg, the most serious of the three, du Toit said all growers across the region should only use certified seed that tests negative for black leg in the coming growing seasons.

Black leg can be a significant problem in fall- or spring-sown plantings of broccoli, brussels sprouts, cabbage, collard, kale, rutabaga, mustard, canola and rape. The Pacific Northwest has particularly favorable environmental conditions for this disease, du Toit said.

The most recent outbreaks of all three fungal diseases occurred in Oregon’s Willamette Valley in early spring 2014. In the 1970s, outbreaks that nearly devastated the brassica seed industry in the eastern United States were tied back to the Pacific Northwest.

Visit the Pacific Northwest Vegetable Extension Group website for more information about the diseases. See the Extension publication Production of Brassica Seed Crops in Washington State for more on why black leg and other crucifer diseases have raised concerns about the need for additional quarantines.

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Farm Commodities | Corn Wheat Soybeans Heating Oil | Big Pat's Blog SETTLEMENTS-2014 JULY 28 MONDAY

SETTLEMENTS-2014 JULY 28 MONDAY
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-up+net buying+deceleration+@277 as resistance
targets, 406-377-328-290            momentum=bearish
Wheat- 
net position/last tues, big users-less short, funds-more short
trend line-FLAT/NEW+open interest-FLAT+supply-UP
trading-up+consolidating+deceleration+@541 as resistance
targets, 570-541-519-497            momentum=neutral
Soybeans
net position/last tues, big users-more long, funds-less long
trend line-UP/NEW+open interest-DN+supply-UP
trading-up+covering+acceleration+away from t-line-overbot
targets, 1142-1172-1230-1288     momentum=bullish             
Cdlr- 
net position/last tues, big users-more short, funds-less long
trend line-DN+open interest-UP
trading-dn+net buying+deceleration+near bottom of move
targets 9309-9287-9250-9220     momentum=less bearish
Heating oil-
net position/last tues, users-less short, funds-less long         
trend line-FLAT+open interest-UP
trading-up+break out from bottom of move unconfirmed
targets 304-300-292-286              momentum=bearish
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Frank Backx July 28, 2014 - Grain Closing Commen

July 28, 2014 - Closing Comment

 

Dec C 3.77 +5 Nov S 11.07 +23 Sep W 5.35 -3. Strong C S on cold wet forecast. People and plants like the same weather. CD +8

 

 

 

Sincerely,

Frank Backx
HDC Forest Location Manager 
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FPCCQ : Le Quotidien du Lundi 28 juillet 2014

Lundi 28 juillet 2014

 

Le maïs et le soya ont bénéficié d’une correction haussière en ce début de semaine. Les modèles météo prévoient un temps un peu plus sec dans le Midwest pour les 2 prochaines semaines, ce qui pourrait freiner les rendements du soya. Par ailleurs, les exportateurs ont annoncé la vente de 420 000 tonnes de soya américain en 2014-15.

Le blé, par contre, a été sous pression en raison de rapports faisant état d’une récolte abondante de blé en Russie - le battage y est complété à 36 %. Les prix du blé russe continuent de chuter alors que la firme Iktar a augmenté sa prévision de production de 1,2 million de tonnes (MT) à 57,5 MT, comparativement à la projection de l’USDA de 53 MT et une production de 52 MT en 2013. Depuis le 1er juillet, le début de la nouvelle saison, la Russie a exporté plus de 2 MT de grains, incluant 1,6 MT de blé. La situation en Ukraine et les sanctions des pays occidentaux à l’encontre de Moscou n’ont pas affecté ce secteur à date.

Grain Farmers of Ontario rapporte que l’Ontario est en train d’importer des tonnages limités de maïs américain. Cela est assez surprenant puisque, au même moment, le maïs ontarien est en train d’être exporté à partir du port de Hamilton. Cette situation inhabituelle serait due au fait que les producteurs ontariens restreignent la vente de leur maïs suite à la chute des contrats à terme. Les bases ontariennes se sont fortement redressées pour l’ancienne récolte. Avec les superficies du maïs en baisse, les bases de la nouvelle récolte pourraient atteindre la valeur d’importation au printemps, ou même plus vite si les rendements déçoivent.

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Soybeans Rise Most in Nine Weeks on U.S. Weather Concerns

Soybean futures rose the most in nine weeks on concern that dry weather forecast into August will curtail yields in the U.S., the world’s biggest grower. Corn climbed, while wheat fell.

Weekend rain was less than expected across parts of the Midwest, and drier weather in the next 10 days will expand crop stress to about 25 percent of the region, Commodity Weather Group LLC in Bethesda, Maryland, said in a report. Cool temperatures will help avert serious damage if precipitation forecast for late next week arrives, the forecaster said.

“People want to see a widespread Midwest rain before pressing the soybean market” after prices through July 25 fell 16 percent this year, Dan Cekander, the director of grain-market analysis at Newedge USA LLC in Chicago, said in a telephone interview. “Soybean yields are determined by August rain.”

Soybean futures for November delivery rose 2 percent to $11.05 a bushel at 12:11 p.m. on the Chicago Board of trade. A close at that price would mark the biggest gain for a most-active contract since May 21. The oilseed has climbed 4.8 percent from a 45-month low of $10.55 on July 23.

China bought 486,000 metric tons of U.S. soybeans for delivery after Sept. 1, the Department of Agriculture said today in a report. In the week ended July 17, U.S. exports more than tripled to 2.68 million tons from a year earlier, agency data show.

In the two weeks ended July 22, hedge funds and other large speculators bet on a price decline for the first time since December 2011, Commodity Futures Trading Commission data showed on July 25. The net-short position of 18,543 contracts was the biggest since October 2006.

Corn futures for December delivery rose 1 percent to $3.755 a bushel. On July 24, the price touched a four-year low of $3.6425.

Wheat futures for September delivery fell 0.5 percent to $5.355 a bushel.

Through July 25, corn dropped 12 percent this year, and wheat fell 11 percent. 

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Neonic insecticides widespread in Iowa waters

Reuters — A class of insecticides popular with corn and soybean farmers in the U.S. Midwest but feared as a factor in the decline of U.S. honey bee colonies and other crop pollinators, has been found to be widespread through rivers and streams in Iowa, according to a government study released on Thursday.

The study, released by the U.S. Department of the Interior, U.S. Geological Survey, marks the first broad-scale investigation of multiple neonicotinoid insecticides in waterways in the Midwestern U.S., and is one of the first conducted within the entire United States, according to the government scientists.

In the report, 79 water samples from across Iowa, the top U.S. corn-producing state, were collected during the 2013 growing season. Researchers said the use of neonicotinoid insecticides has grown in recent years, and they found them to be both “mobile and persistent” with “a strong pulse of neonicotinoids associated with crop planting” in streams.

The researchers said the broad use of the neonicotinoids, “needs to be closely examined in relation to environmental impacts.”

Similar studies by the USGS have found many other types of common agricultural chemicals in stream samples in Iowa, but researchers said there was a “substantially greater neonicotinoid detection frequency” observed in this study compared to historical detections of other insecticides.

Neonicotinoids, also known as neonics, are sold by agrichemical companies to boost yields of staple crops, but are also used widely on annual and perennial plants in lawns and gardens. Neonics, chemically similar to nicotine, are commonly applied to the seeds before they are planted.

As use of the neonics has grown, some scientists have linked the insecticides to large losses in honey bee colonies that are considered critical for the production of many U.S. crops. Honey bees pollinate plants that produce about a quarter of U.S. consumer foods, according to the U.S. government.

Many agrichemical companies, including Bayer, whose neonic products are top sellers around the world, say there are a mix of factors killing off the bees and that neonics are important tools for boosting crop production.

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Hedge funds 'close to exhausted' in selling wheat

The sustainability of hedge funds' selldown in wheat came into question as their continued turn bearish in agricultural commodity investments extended their net short in Chicago futures and options to a historically high level.

Managed money, a proxy for speculators, reduced its net long position in futures and options in the top 13 US-traded agricultural commodities, from cotton to cattle, by more than 80,000 contracts in the week to last Tuesday, according to data from the Commodity Futures Trading Commission regulator.

The selldown, the 11th in the last 12 weeks, took the net long – the extent to which long positions, which profit when prices rise, exceed short bets, which benefit when values fall – to a six-month low of 365,407 lots.

Australia & New Zealand Bank, which cuts CFTC data slightly differently from Agrimoney.com analysis, said speculators were "now positioned the shortest in agricultural markets as a whole in 12 months".

Even by the end of June, hedge funds had cut back their net long position in agricultural commodities to the equivalent of 10m tonnes, from 67m tonnes in mid-May, on ANZ calculations.

'Close to exhausted'

Indeed, the extent of the negative positioning raised questions over the appetite by hedge funds for placing more such bets, with ANZ analyst Paul Deane stressing the extent of selling in wheat that speculators have already done.

Hedge funds raised by more than 8,000, to 54,519 contracts, in the net short on wheat - a marked reversal from the net long of 45,000 contracts two months ago.

"Supportive of prices stabilising is leveraged money selling being close to exhausted," Mr Deane said.

At Minneapolis-based broker, Benson Quinn Commodities, Brian Henry said: "Given a firmer stance on the Chicago chart, the size of their net short position in that market is supportive.

"I think the message is, don't add to a short position."

In fact, hedge funds' net short in Chicago wheat of 54,519 contracts is the 13th largest on records going back to 2006, with the record set earlier this year, at 73,088 lots.

Sour on sugar

Managed money is also notably bearish, from a historical perspective, in soybeans, with a net short position of 18,543 contracts, up more than 12,000 week on week, and the highest since October 2006.

The strength of soybean prices has been undermined by benign US weather which has supported expectations of a record harvest in the top producing country, as it has for corn too, in which speculators cut their net long position to a five-month low of 70,408 contracts.

However, New York-traded raw sugar saw the biggest sell-down in the latest week, by more than 25,000 contracts, taking the net long to a three-month low of 44,588 contracts.

The switch was down completely to a hike in short positions, amid some improvement in India's monsoon, and with Brazilian sugar output remaining firm for now, although the extent of the bets on falling prices has raised concerns about the appetite for more.

"Some operators question who will want to add to shorts at current prices," London broker Marex Spectron said.

'Might be a little less bearish'

Hedge funds also reduced their net long in cotton by more than 4,000 contracts to 3,618 lots, the lowest since December 12.

Again, the bearish turn was down nearly completely to fresh short positions, rather than liquidation of longs, with growing concerns over Chinese import demand, at a time when US production hopes remain high, despite some decline in crop ratings.

"The speculators are either liquidating and or going outright short," John Robinson, cotton marketing specialist at Texas A&M University, said, adding that the next set of CFTC data "will likely show more of this since we have been seeing declining prices with increasing open interest".

Open interest shows the level of extant contracts.

However, Dr Robinson was relatively upbeat over cotton price hopes, given the slump by benchmark December cotton futures (which fell last week to the lowest since 2009, on a nearest-but-one-contract basis) below March, May and July 2015 contracts.

"While the forward spreads don't cover the cost of storing cotton, at least it is a move back towards normal economic relationships.

"And that move suggests things might be a little less bearish for the future."

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U.S. spring wheat yield prospects best in 22 years

Fargo, North Dakota/Reuters — The 2014 U.S. hard red spring wheat crop was 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.

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 47.0 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 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 curtailed 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 bushels, up 30 million bushels from 2013. The USDA sees U.S. all-wheat production at 1.992 billion bushels.

MGEX spring wheat futures for September delivery settled down 1-1/4 cents at $6.19-3/4 a bushel on Thursday, down about 1.7 percent so far this week.

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

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demand ideas help grains to price gains

Grains started the week on the front foot, for a change, amid ideas that values may have fallen enough for now to account for huge US, and world, harvests.

It is not that the US crop picture has deteriorated, remaining pretty near ideal.

MDA said that weekend US Midwest rainfall was "near expectations", while in the outlook saying that "cool temperatures will support soybean growth and late corn pollination".

The centre of what concerns there remains the south west of the Midwest, where "moisture will decline".

Speculators' positions

However, there are a few factors to make investors think twice about extending short positions – one being the extent they have put in already.

Data late on Friday showed hedge funds cutting to 70,000 contracts their net long in Chicago corn futures and options, down from more than 260,000 lots in early May.

In Chicago wheat, they extended their net short close to 55,000 contracts, getting back close to the peak net short of 73,000 lots reached six months ago.

In soybeans, they lifted their net short above 18,000 contracts, the highest for the oilseed since 2006.

Extreme net short or net long positions raise questions over the appetite for speculators for raising such bets further.

'We have seen business pick-up'

Besides, there are growing signs of demand at these levels, with last week bringing a spate of announcements by the US of large export sales orders.

Friday, for instance, brought export sales of 269,084 tonnes of corn to Mexico, which bought 134,700 tonnes of soymeal too, plus 360,000 tonnes of soybeans sold to China.

"We have seen business pick-up at these price levels," Mike Mawdsley at broker Market 1 said, if cautioning that a rally may have trouble finding legs unless supported by revived production concerns too.

'Panic growing'

Still, those are growing in wheat, in terms of European Union production, and the increasing concerns over rain damage to crops in some countries such as Romania, a big supplier to Egypt, and France, the bloc's top producer and exporter of the grain.

Jean-Xavier Mullie, the chief executive of French grain co-operative Agora, wrote that "panic in the market is growing" over the extent of quality downgrades to the country's wheat from late rainfall.

One major concern is the Hagberg falling number, a key quality measure, which is below the typical 220 for most of the crop.

Major North African markets such as Morocco and Algeria demand a figure of at least 230.

"Most wheat in France is running between 180 and 200 falling numbers," CHS Hedging said.

Chart factors

Technical factors are also offering some deterrent to sellers, with grains widely deemed to have been oversold, and with many contract moving back above some of their moving averages.

December corn, for instance, touched its 10-day moving average, at $3.76 ¼ bushel, for only the second time this month before easing back to $3.75 ¾ a bushel as of 09:20 UK time (03:20 Chicago time), up 1.1% on the day.

November soybeans gapped higher – with its low so far today, of $10.90 ¼ a bushel, above the high of the last session of $10.87 ¼ a bushel – and the kind of factor to excite chartists, especially if the gap is not filled later in the day.

The contract, at the other end of today's trading range, came 0.25 cents from regaining $11.00 a bushel, before easing back to $10.96 a bushel, up 1.2% on the day.

Wheat lagged a bit, adding 0.4% to $5.40 a bushel in Chicago for September delivery, and by 0.4% to $6.33 ¾ a bushel in Kansas City for September.

But then, fundamentals are not going all its way, with analysis Ikar upgrading, again, its forecast for the Russian wheat harvest, this time by 1.2m tonnes to 57.5m tonnes.

'A little less bearish'

Among soft commodities, cotton got off to a decent start, adding 0.6% to 65.77 cents a pound in New York for December delivery – recovering from the contract low set in the last session.

Friday's low was also the lowest for cotton, on a nearest-but-one-contract basis, since October 2009, raising hopes for demand here too.

One reason for hope for cotton bulls is that the December contract is now comfortably below future lots, John Robinson, cotton marketing specialist at Texas A&M University, said.

"While the forward spreads don't cover the cost of storing cotton, at least it is a move back towards normal economic relationships," Dr Robinson said.

"And that move suggests things might be a little less bearish for the future."

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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.”

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