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Brazil allows Monsanto to collect soybean royalties again

The Court of Justice of the State of Mato Grosso in Brazil has ruled that Monsanto can resume collecting royalties for its Roundup Ready soybeans in the State of Mato Grosso.
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Monsanto Breaks Below 200-Day Moving Average - Notable for MON

Monsanto Breaks Below 200-Day Moving Average - Notable for MON | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |

In trading on Thursday, shares of Monsanto Co. (Symbol: MON) crossed below their 200 day moving average of $113.67, changing hands as low as $113.23 per share. Monsanto Co. shares are currently trading off about 0.5% on the day. The chart below shows the one year performance of MON shares, versus its 200 day moving average:

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Looking at the chart above, MON's low point in its 52 week range is $94.00 per share, with $128.79 as the 52 week high point - that compares with a last trade of $113.80.

According to the ETF Finder at ETF Channel, MON makes up 229.30% of the WisdomTree Total Dividend Fund ETF (Symbol: DTD) which is trading lower by about 1.2% on the day Thursday.

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Second Cargill Beef Processing Facility Closes Its Doors

Second Cargill Beef Processing Facility Closes Its Doors | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |

Workers at the Cargill Slaughterhouse in Milwaukee, Wisconsin will walk out the doors one final time. The company announced Wednesday it’s closing the plant effective Friday. Six hundred workers will lose their jobs. Workers at the Cargill Slaughterhouse in Milwaukee, Wisconsin will walk out.

The reason is evident. There are not enough cattle coming to the plant after years of drought in the big cattle producing states. This is the second Cargill Beef Processing Plant to close. Last year, the company closed a larger plant in Plainview, Texas where 2,000 workers were let go with that closing. There’s no indication this problem will change any time too soon.

It's estimated the U. S. Cattle Herd is the lowest it's been since 1951 and beef processing plants are being hit hard.

"The closure like Milwaukee is never an easy decision. It’s regrettable and unfortunate. It’s a sad day when we have to announce these things," sand Cargill Director of Communications Mike Martin.

Cargill has shut down two beef processing plants in just over one year. The first was Plainview, Texas. Now it's Milwaukee, Wisconsin.

"The reality is there are simply not enough animals in that region," said Martin.

Cargill Director of Communications, Mike Martin says there are other factors contributing to why the plant in Plainview closed. There were fewer feeder cattle sent to the plant from Mexico.

Another problem was News coverage of lean, finely textured beef, sometimes called "pink slime". It led to shrinking consumer demand for the beef product which impacted business at the Plainview plant.

"That particular product was something Cargill produced in Plainview, Texas. When the furry of activity took place in 2012, the demand for that product dropped by 80-percent that was an important revenue stream," said Martin.

But ultimately, the biggest problem for both plants is still the tighter cattle herds.

"It's really the cattle supply in that region versus processing capacity. We had to make a decision to close the facility," said Martin.

For now, it's about playing the waiting game until the herds are all restored.

"Expanding the herd is going to see two to three years. We are optimistic that's going to happen," said Martin.

Martin says the closure of the Wisconsin Plant is permanent. But a portion of the facility, where ground beef is made, remains open. It employs 200 people. Martin says the ground beef production is huge for the company and he doesn’t see it closing.

The 600 employees who were let go will get paid for 60 more days.

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Comparaison des programmes de sécurité du revenu au Québec, en Ontario et aux États-Unis

Comparaison des programmes de sécurité du revenu au Québec, en Ontario et aux États-Unis | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |
Aux États-Unis


Farm Bill

Aux États-Unis, la loi fédérale qui définit ses politiques agricoles est ce qu’on appelle communément le Farm Bill. Une nouvelle version de cette loi est entrée en vigueur en 2014, valable pour les cinq prochaines années. Bien que de nombreux programmes soient sous l’égide du Farm Bill, il existe deux programmes principaux de sécurité du revenu, le Agricultural Risk Coverage et le Price Loss Coverage.


Programme Price Loss Coverage

Le Price Loss Coverage (PLC) ressemble un peu à l’ASRA québécoise. Le programme verse une compensation lorsque le prix moyen du marché est inférieur au prix de référence. Les prix de référence sont les suivants :


Prix de référence




















Le paiement se base sur 85 % des superficies du producteur et son rendement individuel. Les compensations se calculent pour chaque produit, et non globalement pour la ferme.


Programme Agricultural Risk Coverage

Le Agricultural Risk Coverage (ARC) est offert sous deux formes : individuelle ou collective.

  • ARC collectif (par zone ou comté)

 Le programme verse une compensation lorsque le revenu réel de la zone est inférieur au revenu garanti de cette même zone.

 Le revenu garanti équivaut à 86 % de la moyenne olympique du prix moyen de marché multipliée par celle du rendement de la zone. Le paiement se base sur 85 %  des superficies du producteur. Les compensations se calculent pour chaque produit, et non globalement pour la ferme.


  • ARC individuel

Le programme verse une compensation lorsque le revenu de la ferme est inférieur au revenu garanti de la ferme.

Le revenu garanti individuel équivaut à 86 % de la moyenne olympique du prix garanti du programme multipliée par celle du rendement individuel. Le paiement se base sur 65 % des superficies du producteur. Les compensations se basent sur le revenu global de la ferme, en considérant toutes les cultures.


Choix qui s’offrent au producteur américain

Le producteur a deux choix :

  1. PLC + ARC collectif :   le producteur doit répartir ses superficies entre les deux programmes.
  2. ARC individuel : toutes les superficies, de toutes les cultures, sont soumises au programme.

Ce choix est définitif, pour toute la durée du Farm Bill.

Le producteur qui choisit le PLC peut également participer au Supplemental Coverage Option, un programme d’assurance lui permettant de couvrir une portion de sa franchise, basé sur le rendement ou le revenu, tous deux collectifs.

Notons au passage que ces programmes peuvent être soumis à des plafonds, par individu ou par ferme, ou même à des montants maximaux de compensation unitaire.


Intervention des programmes américains en 2014

Dans une entrevue accordée à Brownfield le 15 juillet dernier, Pat Westhoff, directeur du Food and Agricultural Policy Research Institute de l’Université du Missouri, soutenait que la moyenne des prix du maïs risque de descendre sous le prix de référence du Farm Bill de 3,70 $US/bu. Dans cette hypothèse, les producteurs qui ont choisi le PLC recevraient un paiement. Quant à ceux qui ont opté pour l’ARC, ils pourraient recevoir un paiement même si les prix sont plus élevés que 3,70 $US/bu.

L’Université d’Illinois a en effet publié une analyse des revenus probables des producteurs en 2014. Pour ce faire, elle a utilisé deux hypothèses quant au rendement (12,4 t/ha et 13,8 t/ha) et trois hypothèses dans la fourchette de prix de l’USDA présentée dans sa dernière estimation d’offre et de demande mondiales (3,65 $/bu à 4,35 $/bu, soit un équivalent canadien de 154 $/t à 184 $/t). Pour six scénarios de prix/rendement, on estime que le programme ARC collectif verserait des compensations dans quatre de ceux-ci et que les compensations varieraient de 25 $/ha à 190 $/ha. Le programme PLC verserait des compensations d’environ 15 $/ha seulement lorsque le prix moyen de marché est de 3,65 $/bu.


En Ontario

Programme de gestion des risques

Le programme ontarien ressemble beaucoup à l’ASRA québécoise. Le programme verse une compensation lorsque le prix du marché d’une culture est inférieur au prix de soutien. Le prix de soutien est basé sur le coût de production moyen de l’industrie. Le paiement se base sur 40 % des superficies du producteur et son rendement individuel. Le producteur doit payer une prime d’assurance pour adhérer au programme.



Prix indicatif
























Pour l’instant, le financement gouvernemental annuel est de 100 M$, ce qui limite les compensations versées. Le taux de compensation est déterminé selon le niveau d’intervention dans les cinq secteurs admissibles au programme.


Qu’en est-il au Québec?

À compter de 2014, les productions assurées par le programme ASRA ne sont plus admissibles au programme Agri-Québec. Étant donné l’absence de compensation des dernières années dans certaines productions, l’arrimage cumulé fait en sorte que les revenus stabilisés de celles-ci sont diminués, et peuvent même atteindre des niveaux très bas. Ceci laisse peu d’espoir à des compensations, même avec des prix de marché en baisse. Les producteurs qui adhèrent au programme Agri-stabilité pourraient recevoir des compensations, selon leurs données individuelles et l’ampleur de la baisse des prix ou des rendements.



Revenu stabilisé avant arrimage*


Revenu stabilisé après arrimage*























                      *Prévision FPCCQ




Résumé des différents niveaux d’intervention

Au final, voici un résumé des différents niveaux d’intervention pour les programmes dont les compensations se calculent pour chaque produit (et non globalement pour la ferme) :
































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Frank Backx Aug 1, 2014 -A.M. Grain Comment

Frank Backx Aug 1, 2014 -A.M. Grain Comment | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |

Aug 1, 2014 -A.M. Comment


Dec C 3.65 -1 Nov S 10.72 -10 Sep W 5.35 +5. Argentina defaulting on bonds sending most mkts into tailspin. Non threatening weather. CD -21, 91.43, helping basis at least. Click below for latest drought monitor map






Frank Backx
HDC Forest Location Manager 
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Farm Commodities | Corn Wheat Soybeans Heating Oil | Big Pat's Blog SETTLEMENTS-2014 JULY 31 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
net position/last tues, big users-less short, funds-less long
trend line-lower high+last open interest-lower high+supply-up
trading-dn+net selling+acceleration+@328+t-line as support
targets, 406-377-328-290            momentum=less bearish
net position/last tues, big users-less short, funds-more short
trend line-lower highs+last open interest-up@high+supply-up
trading-up+net buying+acceleration+@trend resistance
targets, 570-541-519-497            momentum=less bearish
net position/last tues, big users-more long, funds-less long
trend line-flat highs+last open interest-lower high+supply-up
trading-dn+balance+deceleration+pause in move
targets, 1057-1107-1142-1172     momentum=less bullish             
net position/last tues, big users-more short, funds-less long
trend line-dn/lower highs+last open interest-lower high
trading-dn+in balance+deceleration+pause@9140 as support
targets 9244-9205-9140-9088     momentum==less bearish
Heating oil-
net position/last tues, users-less short, funds-less long         
trend line-higher lows+last open interest-up/less-higher low
trading-dn+balanced buying+constant+near 286 as support
targets 304-300-292-286              momentum=less bullish
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Cargill, citing shrinking cattle herd, to shut Wisconsin beef plant

Reuters — Cargill Inc, one of the nation’s largest beef processors, said on Wednesday it plans to close its Milwaukee, Wisconsin, beef-processing plant on Friday, because the size of the U.S. herd has fallen to its smallest in 63 years.

The ground beef production side of the plant, which employs about 200 people, will remain open, the company said.

Early last year, Cargill year shuttered its Plainview, Texas, beef plant, which processed about 4,500 head per day, because of the scarcity of cattle and overcapacity in beef processing in the Texas Panhandle.

Fewer cattle are available after several years of drought have hurt crops, forcing ranchers to trim their herds.

“Closing our Milwaukee beef plant is taking place only after we conducted an 18-month-long analysis of the region’s cattle supply and examined all other possible options,” said John Keating, president of Cargill Beef, based in Wichita, Kansas.

“The harsh reality is that the U.S. beef cattle herd is at its lowest level since 1951, with any significant herd expansion being years away,” he said.

The Milwaukee facility has an estimated daily slaughter capacity of 1,300 to 1,400 cattle, consisting primarily of cows.

Closing the plant would represent roughly 6 per cent of the total U.S. annual cow slaughter capacity of about 7.1 million head, said John Nalivka, president of Sterling Marketing Inc of Vale, Oregon.

Cows that would be sent to the Milwaukee plant will likely be absorbed by some of Cargill’s nearby competitors, he said.

Cargill’s 600 employees affected by the shutdown will be offered positions at other company locations in the region.

There are no plans to reopen the plant, Cargill spokesman Mike Martin told Reuters via e-mail.

“The challenge is that there are so few animals, not that there are surplus animals that will be available to others. There may a small volume of animals that others benefit from Cargill not processing,” said Martin.

The company operates six other U.S. beef processing plants in California, Texas, Kansas, Colorado, Nebraska and Pennsylvania.

“If they were only killing cows, the impact on the larger cattle and beef markets would probably be pretty low,” said Missouri-based Doane Advisory Services economist Dan Vaught. By the same token, the closure could be mildly bearish for cow prices in the area, he said.

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quality concerns extend wheat price rebound

Just as month ends, by repute, often prove weak for grain markets, month beginnings are supposed to bring in fresh cash.

And corn, at least, managed to hold its ground in early deals on Friday, and wheat made early headway.

As to whether resilience can last, there is one other calendar factor that may help futures hold onto positive territory until the weekend, with Fridays, and the prospect of two days without trading, often bringing some profit-taking, especially when weather and every change in the forecast carries weight.

Benson Quinn Commodities said that "there's a chance the trade wants to cover a few shorts ahead of the weekend.

"Investors may be leery of adding to short positions in the off chance next week's US rains to not materialise as advertised."

Midwest weather is proving a little less benign, with MDA noting that "dryness will continue to build in south west areas through early next week", although "some improvement is still expected later next week".

'High-risk crop report'

Not that there is much of an expectation of a sustained rally in prices, for corn and soybeans especially.

RJ O'Brien highlighted "no change in our long-term bearish outlook" for prices, of $3.25 a bushel for Chicago corn futures, and $9.50 a bushel for soybeans, once harvests are in the bag and risk premium further reduced.

However, the prospect of the US Department of Agriculture's Wasde report on August 12 gives another cause for sellers to hold fire, given that it often comes in with lower US harvest estimates than expected.

"Row crop markets may be reluctant to push dramatically lower until after the historically high-risk August crop report—especially given the trade's tendency in each of the last three years to overestimate corn and soybean production prior to the crop report," Richard Feltes at RJ O'Brien.

'Buyers can find value'

Demand is giving bulls some cause for hope too, with some decent weekly US export sales data on Thursday for grains.

For corn, "weekly export sales were marginal on old crop and pretty good for new, which indicates the traditional buyers can find value near the current levels", Brian Henry at Benson Quinn Commodities said.

Certainly, investors remained reluctant to send the December contract quite back to levels reached last week, with CHS Hedging noting that "support seems to be within pennies of contract lows".

Corn for December delivery was flat at $3.67 a bushel as of 09:10 UK time (03:10 Chicago time), reducing a touch its spread to new crop November soybeans, which fell 0.8% to $10.73 a bushel.

Many investors have forecast that the November soybean: December corn ratio, currently at a heady 2.92:1, will retreat assuming US weather stays benign for soybeans' sensitive pod-setting period this month, having already appeared ideal for corn's vulnerable pollination phase.

Tender results

Wheat remains more of a wild card, in being freed from downward pressure from the US winter crop harvest, which is nearly over, and with some concerns over supplies of quality wheat after drought in the southern Plains, and harvest-time rains in the EU.

There has been particular comment over the result, on Wednesday, of the latest tender By Gasc, the Egyptian grain authority, including over a lowball offer of US supplies, and the price paid for orders from Russia.

"The Egyptian tender showed US is competitive, only out on the freight rate," Gleadell, the UK grain merchant, said.

"And the fact that Gasc paid $2 a tonne more for Russian wheat, over a time when Chicago futures had retraced $2 a tonne, reflects the continued tightness of quality wheat."

Furthermore, only 2 cargoes of wheat were offered from Romania - a favoured origin for Gasc, but which has seen its crop hurt by rains – "and off the pace, leaving officials in Cairo crossing everything possible that no disruption to Black Sea exports occur as a result of the increased US and EU sanctions placed on Russia", Gleadell said.

'One of the few bullish items'

Mr Feltes, while downbeat on corn and soybean price prospects, said that "demand for US hard red winter wheat" – as traded in Kansas City, and higher protein than the soft red winter wheat traded in Chicago - "could rise further as EU quality deteriorates".

Citigroup's Sterling Smith, while also downbeat over the row crops, flagged wheat "quality concerns", and said that the spread between Kansas City and Chicago wheat "is one of the few potentially bullish items in the grain space".

The area around $0.90 a bushel "is showing itself to be solid support" for the spread.

In fact, the spread held at more than $0.95 on Friday, with Kansas City hard red winter wheat for September up 0.6% at $6.29 ¾ a bushel, while its Chicago peer gained 0.8% to $5.34 ¼ a bushel (with both contract rising 4 cents a bushel).

More fraying

In New York, cotton, however, remained out of favour 0.5% to 62.58 cents a pound for December delivery, continuing to feel pressure despite some decent US weekly export sales for new crop.

"The weather is still good" in the US, the top exporter, "and the Chinese stocks are still enormous", Mr Smith said, saying prices appeared to be targeting 60.00 cents a pound.

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Grain storage space a problem in parts of SD

ABERDEEN, S.D. (AP) — Rail congestion and large bounties of crops have some worried about grain storage space as South Dakota's harvest gets underway.

Rail cars are in short supply in the northern Plains, and many officials and farmers blame that on increased crude oil and freight shipments from North Dakota's booming oil patch. That means the bins at many grain elevators already are full, and there isn't space to hold this year's large crop.

"Typically, we wouldn't go to ground storage until two to three weeks into harvest," Jeremey Frost, grain merchandiser for CHS Midwest Cooperative in Pierre, told the American News ( ). "Now, two to three days into winter wheat, we're putting wheat on the ground."

This year's large crop after a good growing season isn't helping matters, he said.

"Those who have brought in wheat are seeing yields well above averages at 50, 60, 70 or even over 80 bushels per acre," he said. "We've not heard of anything less than 55. We're used to seeing 40-bushel wheat."

One thing in the elevators' favor is that low market prices mean many farmers aren't anxious to sell. Some like Slade Roseland, of Seneca, plan to store grain in large bags in the field until they're ready to sell.

"We use the grain bags quite a bit, whenever we have storage issues," he said. "It's 24 miles from our farm to the elevator, so we bag crops in field and haul it in later. It's a very efficient process."

However, once farmers do decide to sell this year's grain and whatever they have stored from last year, it could spell trouble.

"One of the big concerns, going into fall harvest, is all of the grain that is still on the farm," saidTom Bright, grain marketing specialist for South Dakota Wheat Growers. "We know customers don't like the prices, but we don't know what (grain from last year) will be coming to us.

"There is the possibility of a double hit — the push of old crop in August and September followed by a big harvest."


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FPCCQ : Le Quotidien du Jeudi 31 juillet 2014

Jeudi 31 juillet 2014

Les marchés ont été mixtes et calmes aujourd’hui, le maïs poursuivant sa baisse sur la bourse de Chicago. Pourtant, les ventes hebdomadaires américaines de grains à l'exportation ont dépassé les attentes. Les ventes de blé ont totalisé 801 000 tonnes, celles de maïs ont été de 174 000 tonnes pour l’ancienne récolte et 1,1 million de tonnes (MT) pour la nouvelle récolte, tandis que les ventes de soya ont totalisé 187 000 tonnes et 1,27 MT. Mais on a affaire à un marché météo, toute l’attention étant portée sur l’excellent état des récoltes dans le Midwest et les prévisions météos pour les prochains jours montrant des précipitations. Par ailleurs, les problèmes de qualité se confirment en France où une bonne partie du blé déclasse en raison des fortes pluies des dernières semaines. Cela met encore plus de pression sur le prix du maïs puisque l’Europe va avoir des millions de tonnes de blé fourrager pour l’alimentation animale, ce qui va réduire leurs importations de maïs au cours de l’année.


Le Conseil international du grain a augmenté leurs prévisions des productions mondiales de maïs (969 MT, soit +6 MT), de blé (702 MT, soit +3MT) et de soya (304 MT, soit +4MT) en raison des bonnes perspectives de récoltes aux États-Unis, en Russie et en Ukraine. Les exportations de grains ukrainiens ont atteint 2 MT en juillet, comparativement à 840 000 tonnes en juin. Le battage des récoltes avance rapidement et ne semble pas être perturbé par la guerre civile qui fait rage dans certaines régions.


L’Argentine est en défaut  de paiement vis-à-vis de ses créanciers. Pour le moment, personne ne panique - les marchés prennent la chose calmement, croyant (ou espérant) qu’une solution sera trouvée prochainement. Il faut dire que l’Argentine fait faillite régulièrement, la dernière fois remontant à 13 ans… Il faudra suivre de près l’impact que pourrait avoir cette situation sur les exportations de grains argentins.

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South Africa corn exports to hit 20-year high

South Africa is poised for its strongest corn exports in 20 years, boosted by a bumper harvest and the competitiveness afforded by a sliding currency in a market already notable for its ample supplies.

South Africa will in the year starting in May ship 3.50m tonnes of corn, the US Department of Agriculture bureau in Pretoria said, a jump of 70% year on year.

The figure, 1.2m tonnes above the USDA's official estimate, will lift the country to sixth among world exporters, and reflects in part the best harvest in 33 years.

The bureau estimated output at 14.6m tonnes, a rise of 16.9% year on year, comprising 13.9m tonnes of production from commercial farmers, and a harvest from subsistence growers of 700,000 tonnes.

Crops were supported by unusually strong rains, beginning in February.

On Wednesday, South Africa's official Crop Estimates Committee pegged the commercial harvest, which is in its final stages, at 13.94m tonnes, an upgrade of 50,000 tonnes on its previous estimate.

'Increased price competitiveness'

However, the bureau also highlighted the boost to South Africa's export hopes from a drop in the rand, down 20% against the dollar from the start of 2013, undermined by labour unrest in its important mining sector.

South Africa is enjoying "increased corn price competitiveness in the world market, due to a weakening rand-dollar exchange rate".

Furthermore, the country, has seen a particular decrease in domestic prices, down 50% in the past six months, compare with a drop of some 16% in Chicago futures.

The decline reflects the return of South Africa to ample local supplies after a period early in 2014 when the extent of exports of last year's crop depleted domestic inventories, sending prices to levels which incentivised imports.

South Africa imports some 80,000 tonnes of Ukrainian corn to underpin its supplies until the latest harvest.

Prices for the rest of 2015 look like staying "close to export parity", the bureau said, implying further weakness with prices for shipping, facing strong world competition, at a little over half those for import, which include an allowance for transport costs.

Outlook for 2015

The bureau forecast a retreat in South Africa's corn production next year, to 13.0m tonnes, reflecting a return to average yields, albeit with sowings expected to remain at 3.2m hectares.

The estimate comprises 12.3m tonnes of commercial production, and 700,000 tonnes grown by subsistence farmers.

That harvest will support corn exports of 2.5m tonnes in the year beginning in May 2015, the bureau said.

South Africa's domestic needs are being swollen by increased population and economic growth, with demand for corn for feed rising by 2% a year, and for feed by 3%.

Its major export markets last season were Japan, at 596,000 tonnes, Zimbabwe at 287,000 tonnes and Botswana at 210,000 tonnes.

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Maire Tecnimont to build $1.6 billion U.S. fertilizer plant

Italy's Maire Tecnimont said on Monday it had signed a memorandum of understanding with Pakistan's Fatima Group Principals and Midwest Fertilizer Corporation to build a nitrogen fertilizer complex in the United States.

Under the contract that is yet to be finalised, Maire Tecnimont would oversee engineering, procurement and building of the fertilizer complex in Indiana. The project is expected to worth around $1.6 billion, Maire Tecnimont said.

Its shares were up 4.1 percent at 2.13 euros by 0711 GMT, outperforming a 0.2 percent fall in Milan's All-Share index.

Maire Tecnimont would book the project in its backlog after the signing of the deal, currently expected by September. The work is expected to be completed in the fourth quarter of 2017.

Chief Executive Pierroberto Folgiero said the United States was witnessing growing investments flows in downstream industries and a very stable market environment.

Fatima Group, an investor and operator of several industrial projects in fertilizers, textiles, mining and energy, has already secured $1.26 billion of tax-exempt financing under the United States Midwest Disaster Relief Program.

Midwest Fertilizer Corporation is part of the Fatima group and will develop the Indiana fertilizer project as a special purpose vehicle. New investors are expected to join later.

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CNH Industrial Second Quarter Revenues Of $8.9 Billion, Net Income Of $358 Million

CNH Industrial Second Quarter Revenues Of $8.9 Billion, Net Income Of $358 Million
Thu July 31, 2014 9:32 AM|PR Newswire  | About: CNHI

BASILDON, United Kingdom, July 31, 2014 /PRNewswire/ --


  • Second quarter revenues totaled $8.9 billion ($8.8 billion in Q2 2013). Net sales of Industrial Activities at $8.6 billion ($8.5 billion in Q2 2013).
  • Operating profit of Industrial Activities for the quarter was $678 million, down 1.2% compared to Q2 2013, with operating margin at 7.9% (down 0.1 p.p.).
  • Net income was $358 million in Q2 2014, or $0.26 per share. Net income before restructuring and other exceptional items was $382 million, or $0.28 per share, up $14 million compared to Q2 2013.
  • Net industrial debt was $3.7 billion at June 30, 2014 ($4.0 billion at March 31, 2014). Available liquidity totaled $7.7 billion ($8.1 billion at March 31, 2014), after the issuance of a July 2019 $500 million bond.
  • Full year guidance confirmed.
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United States Drought Monitor > July 29, 2014

United States Drought Monitor > July 29, 2014 | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |

Spotty showers were heaviest in the East, where rain benefited pastures and summer crops. Meanwhile, mostly dry weather prevailed in the Midwest, except for a few bands of locally heavy showers. Despite a July drying trend, most Midwestern crops continued to thrive due to near- to below-normal temperatures and abundant soil moisture reserves. On July 27, USDA rated three-quarters of the U.S. corn and 71% of the soybeans in good to excellent condition—the highest such ratings this late in the season since 2004. Farther west, hot weather on the Plains yielded to sharply cooler conditions. In addition, rain overspread the central and southern High Plains late in the drought-monitoring period. The spell of hot weather hastened winter wheat maturation on the northern Plains and promoted rapid crop development throughout the nation’s mid-section. However, the Plains’ high temperatures also stressed some summer crops, especially in areas dependent upon rain or with lingering subsoil moisture deficits. Elsewhere, heat also arrived across the Southwest during a temporary break in the monsoon circulation, while cooler weather and beneficial showers overspread the Northwest. In particular, Northwestern showers aided containment efforts for a rash of lightning-sparked wildfires. However, the weather pattern reversed during the second half of the drought-monitoring period, with heat returning to the Northwest and a monsoon surge delivering heavy rain to parts of the Southwest.

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Twin Corn Ears Expand U.S. Yields With Bin-Busting Crop

Twin Corn Ears Expand U.S. Yields With Bin-Busting Crop | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |

The second ear of corn emerging on stalks across Pat Solon’s 1,600-acre farm in Illinois is the latest sign that the U.S. crop this year will be a bin-buster.

“It’s the healthiest crop I’ve ever grown,” Solon, 50, said from his farm in Streator, Illinois. Two months before the harvest, stalks exceed 10 feet (3 meters), with deep roots and ample soil moisture. “It’s been a great growing season.”

This year’s bumper corn crop is so unusual, Solon predicts he’ll yield 250 bushels an acre, 24 percent more than the average over the past decade. Iowa, the biggest corn-growing state, probably will produce as much as 2.8 billion bushels, topping the all-time high from 2009, Agriculture Secretary Bill Northey said. U.S. production will set a new record of 14.5 billion bushels in 2014, AgResource Co. estimates.

Two years after the worst U.S. drought in a century cut output and sent prices to the highest ever, rain and milder weather of the past two months are creating ideal growing conditions. That’s caused prices to tumble and costs to fall for buyers including Tyson Foods Inc. (TSN), while it has reduced returns for growers to a four-decade low, a threat to the 12-year jump in farmland values.

“I don’t know how much better the crop can get,” Paul Christopher, the chief international strategist at Wells Fargo Advisors LLC, which manages $1.3 trillion, said by telephone from St. Louis yesterday. “We will have a supply surplus this year. The price trend is lower for the next six to 12 months.”

Price Slump

Corn plunged 14 percent in July on the Chicago Board of Trade, the biggest monthly drop since September 2011, and touched a four-year low of $3.61 a bushel today in Chicago. The Bloomberg Spot Commodity Index of 22 raw materials fell 5 percent last month, while the MSCI All-Country World Index lost 1.3 percent. Bloomberg’s Treasury Bond Index slid 0.1 percent.

As recently as July 11, the U.S. Department of Agriculture was expecting output to fall 0.5 percent from last year’s record harvest to 13.86 billion bushels, as a 4 percent drop in planted acres eroded the benefit of record yields forecast at 165.3 bushels an acre.

Crop conditions are the best in a decade for this time of year, government data show, with 75 percent rated good or excellent as of July 27. The USDA probably will boost its production estimate in its monthly crop report on Aug. 12, said The Linn Group, a broker and adviser. The U.S. is the world’s largest grower and exporter.

“There will not be enough storage space for all the extra bushels this fall,” said Roy Huckabay, an executive vice president at The Linn Group in Chicago. The researcher predicted today that the crop would increase 4.3 percent to 14.518 billion bushels, with yields at 172.8 bushels an acre.

Weather Risk

A prolonged dry spell, damaging winds or early frost could hurt crops before the harvest, which usually doesn’t start in the Midwest until late September. Low prices also are encouraging more demand from livestock producers that reduced their herds after a 2012 drought cut output and sent futures to a record $8.49.

Tyson Foods, the largest U.S.-based meat producer, expects the hog supply to increase by about 2 percent next year, with herds expanding into 2016, Chief Executive Officer Donald J. Smith told analysts on a conference call July 28.

The company, based in Springdale, Arkansas, reported record third-quarter profit, aided by lower feed costs as grain prices fell. Tyson forecast rising meat production in 2015, with the chicken unit, the company’s biggest, seeing feed costs declining by $400 million.

Demand Increase

Global corn use will rise 1.8 percent to 966.3 million metric tons in the 12 months that start Oct. 1, after increasing 9.7 percent a year earlier, the USDA said July 11.

U.S. production of ethanol, made from corn, rose to 29.04 million barrels in May, up 6.8 percent from the same month in 2013 and the highest since December, U.S. Department of Energy data show.

Money managers have cut their bets on price gains in 10 of 11 weeks through July 22, and are the least bullish since February, U.S. Commodity Futures Trading Commission data show. Aakash Doshi, a vice president at Citigroup Inc. in New York, said in a July 28 report that corn futures will “flirt below” $3.50.

The bearish outlook is being fueled by signs of improving yields.

While most plants in the Midwest are designed to produce just one 6-inch ear with about 500 kernels, some are sprouting a second one.

‘Very Big’

“If you have a second ear, it means that first ears will be very big,” Iowa’s Northey, who farms 600 acres near Spirit Lake, said in a telephone interview from Des Moines. “We are going to have a lot of fields in Iowa in excess of 200 bushels an acre.”

Ears produced in Iowa probably will average 7.5 inches to 8 inches long, with 18 rows of 40 kernels each, or about 720 to 750 kernels, the most ever, said Todd Claussen, director of agronomy at Ames-based Farmers Cooperative Co., the largest member-owned grain elevator and farm-supply company in the state.

Some of the first ears on the Illinois farm that Solon’s great, great-grandfather bought in 1848 are already 9.5 inches, with some second ears around 8 inches. “Those second ears can add another 20 bushels to my yield,” Solon said.

Corn yields for fields sown with non-genetically modified seed are also headed for records in parts of Illinois, the biggest grower after Iowa.

Joe Zumwalt, 36, who grows corn on about 900 of his 1,600 acres near Warsaw, Illinois, said the second ears on his fields will help boost yields to 250 bushels an acre. Unlike most U.S. corn fields, his were grown with seeds that aren’t genetically modified.

“That second ear is important, but Mother Nature is the reason for big yields this year,” said Zumwalt, who will sell half his crop this year to Kirin Holdings Co. (2503) in Japan. “The big yields will make up for the low prices.” 

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FPCCQ : Le Quotidien du Vendredi 1 août 2014

Vendredi 1 août 2014

Le soya a fortement chuté en raison des prévisions météo favorables pour le Midwest annonçant des précipitations pour la semaine prochaine. Le blé, par contre, a réussi à faire des gains – la dégradation de la qualité du blé européen pourrait favoriser les exportations américaines. Le maïs s’est retrouvé pris entre le soya et le blé à la bourse de Chicago, a suivi le soya et clôturé de nouveau en baisse.

L’attention des marchés est présentement portée sur le blé. La qualité du blé français a été compromise par les fortes pluies en juillet, entraînant une baisse de l’indice de chute et du poids spécifique et déclassant une partie de la récolte en fourrager. Le battage est quand même en avance par rapport à l’an passé, atteignant 76 %. La pluie menace maintenant les récoltes en Allemagne. Or, ces 2 pays sont les principaux exportateurs de blé européen, ce qui pourrait favoriser les exportations de blé américain au cours des prochains mois. Cependant, il faut mettre un bémol. Le marché international du blé n’est pas en pénurie, loin de là. Malgré la baisse de la qualité, les pays européens sont en train de battre de très grandes récoltes de blé, les rendements étant très bons. Le contrat à terme du blé européen pour novembre s’est effondré ces derniers jours, atteignant son plus bas niveau en 4 ans à 167 euros/tonne (environ 244 $ CAD). Par ailleurs, la Russie et l’Ukraine sont en train de battre des récoltes abondantes et sont des exportateurs agressifs. Certes, la qualité du blé panifiable ukrainien est moindre que celle de l’Europe de l’ouest, surtout en ce qui concerne la teneur en protéine, mais le blé russe a une qualité acceptable. Et, malgré le conflit en Ukraine et les sanctions à l’encontre de la Russie, les exportations de grains de ces 2 pays se poursuivent à pleine capacité. De plus, le prix du blé ne pourra pas trop se dissocier de celui de maïs. Or, cet accroissement des tonnages de blés fourragers en Europe met encore plus de pression baissière sur le prix du maïs. Finalement, malgré les pluies diluviennes qui se sont abattues sur une partie des Prairies canadiennes et la perte de 1 ou 2 millions d’acres, les rendements s’annoncent très bons. Ils sont estimés à 43,1 bu/acre pour le blé de force de printemps, soit le 2ème niveau jamais atteint, et à 48,1 bu/acre pour le blé durum, soit très proche du record de l’an passé qui était de 48,4 bu/acre. Combinés aux inventaires considérables de l’ancienne récolte, le Canada aura beaucoup de blé à vendre, et la logistique devrait être au rendez-vous – le gouvernement fédéral vient d’étendre au 29 novembre la législation forçant le CN et le CP à transporter plus d’un million de tonnes de grains par semaine.

Le marché local est calme, la majorité des transactions se concentrant sur le maïs de l’ancienne récolte quoique l’on note aussi des ventes pour la récolte ainsi que pour 2015. Les bases du maïs pour livraison immédiate continuent de grimper, compensant en partie la dégringolade des contrats à terme : elles tournent autour de 1,30 $/bu pour des prix variant autour de 192-195 $/tonne FAB ferme. Pour la récolte, les prix vont de 182 à 195 $/tonne FAB ferme, ce qui donne une base moyenne de 1,10 $/bu. Il faut cependant noter que le marché ne semble pas être clairement défini pour 2014-15 vu l’incertitude entourant la production locale.

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Hausse moyenne octroyée de près de 1 000 $ l'hectare des terres en culture au Québec en 2013

Les transactions compilées en 2013 par La Financière agricole du Québec indiquent qu'en moyenne la valeur des terres en culture1 a augmenté de 8,8 %, alors que celle des terres agricoles2 a augmenté de 12 %.

La valeur unitaire moyenne des terres en culture est passée de 11 659 $/ha en 2012 à 12 687 $/ha en 2013. De même, les terres agricoles ont été en moyenne à 10 115 $/ha en 2013, soit en hausse de 1 084 $/ha par rapport à 2012.

Parmi les terres agricoles en 2013, la valeur des terres consacrées aux grandes cultures a connu une croissance plus élevée que la moyenne. À l'inverse, les transactions d'érablières ont connu une diminution du prix moyen à l'hectare. Quant aux terres utilisées pour la culture de petits fruits, l'accroissement de leur valeur a été similaire à celui observé en moyenne pour l'ensemble du Québec.

La Financière agricole rappelle que la valeur unitaire des terres diffère d'une région à l'autre, mais aussi au sein d'une même région. Plusieurs facteurs influencent les conditions d'offre et de demande. Ainsi, le prix à l'hectare peut résulter des caractéristiques liées à la terre elle-même, telles que la qualité des sols, la morphologie du terrain et la localisation. De plus, d'autres éléments peuvent être considérés, notamment l'usage et la disponibilité sur un territoire donné.

Le Bulletin Transac-Terre est un outil qui fournit une information sur l'ordre de grandeur et l'évolution générale de la valeur des terres transigées au Québec. Il est accessible sur le site Internet de La Financière agricole à l'adresse suivante :

En offrant des produits et des services de qualité en matière de financement, d'assurance et de protection du revenu, La Financière agricole du Québec favorise le développement et la stabilité de plus de 25 000 entreprises agricoles et forestières québécoises. De plus, elle place la relève agricole au cœur de ses priorités en lui offrant une aide financière directe et adaptée à sa réalité. Avec des valeurs assurées qui s'élèvent à 4,7 milliards de dollars et un portefeuille de garanties de prêts qui atteint 4,4 milliards de dollars, elle participe activement à l'essor économique du Québec et de ses régions.

1 Les TERRES EN CULTURE sont les superficies cultivables, sans bâtiment. Elles ne comprennent pas les pâturages, les vergers, les érablières et les boisés.

2 Les TERRES AGRICOLES regroupent, en plus des terres en culture, toutes les autres superficies agricoles. Pour les transactions de terres comportant des bâtiments, seule la valeur attribuable aux superficies est retenue, celle des bâtiments étant retranchée de la valeur totale de la transaction.

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Bunge upbeat on Chinese soy crush margin prospects

Bunge remained upbeat on prospects for China's soybean crushing margins, despite signalling some delay in their recovery, with the curbs on imports of US distillers' grains adding to reasons to expect a revival.

Soren Schroder, the Bunge chief executive, who in May forecast that the April-to-May period would be a "transition" quarter for Chinese soybean processing margins, acknowledged that they in fact "remain weak".

Indeed, the US-based group, one of the world's biggest oilseed processors, had seen "admittedly a very negative crush environment in the first half of the year", he said.

"Our crush volumes… were clearly down," he added.

'Improving situation'

However, "I think we are clearly in [an] improving situation", Mr Schroder said, with margin prospects boosted by recovering profitability among Chinese livestock producers at a time when soybean supplies have been swollen by a record quarter for imports in the April-to-June period.

"Underlying fundamental demand for proteins in China is strong. Livestock profitability is back in positive territory and offtake [prospects are] very strong."

Rabobank last week forecast a "strong" recovery in prices of pork, China's staple meat, from later in the July-to-September quarter, lifted by the arrival of the high season for demand at a time when herd numbers are low.

China's hog herd, by far the world's biggest, was 4.4% lower in May than a year before, with sow inventories down 7.5%, indicating weak potential for rebuilding the herd.

Prospects for China's pork producers "are turning positive" after a "very difficult" first half of 2014, the bank said.

'Positive element'

China's, effective, ban on imports of US distillers' grains (DDGs), through demanding that supplies be certified free of a genetically modified Syngenta corn variety, adds an extra support to margins.

DDGs, a byproduct of corn ethanol manufacture, offer an alternative to soymeal as a high protein feed ingredient.

"Clearly, the reduction in [Chinese] DDG imports, if that continues, will be to the benefit of soymeal [demand]," Mr Schroder told investors.

"So that will be a positive element as well" for crushing margins.

It now appeared that, for margins, the current July-to-September quarter would "be a transition, the fourth quarter should be good and, in all likelihood, we would have a good first quarter [2015] as well in China".

'Cheapest origin'

However, Mr Schroder - speaking after Bunge unveiled forecast-beating profits, sending its shares soaring – had some consolation for US soy processors, now facing growing competition for soymeal from domestic DDG supplies swollen by the lack of exports to China.

While the dynamic "will have most likely a negative impact on soymeal domestic consumption… on the other side, the US is the cheapest origin for soymeal exports in the world.

"We do expect a record October/March shipment programme out of the US."

The US sold 707,400 tonnes of soymeal for export last week for 2014-15, which starts in October for the feed ingredient, taking total commitments to 3.66m tonnes.

A year ago, the US had, for export, sold 1.45m tonnes of soymeal forward.

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China Cotton Output May Plunge as Government Ends Stockpiles

Cotton output in China, the world’s biggest user, may fall 24 percent next year as the government ends direct purchases from farmers, according to a state-affiliated researcher.

Policy makers have given no indications how they will sustain planting in central and eastern China as the new measures only cover northwest Xinjiang province, said Xi Jin, a manager at, a researcher owned by China National Cotton Reserves Corp. National output in 2015 will decline to about 5 million tons from estimated 6.6 million tons this year, he said.

Chinese officials are seeking to implement a trial program of direct subsidies to growers in Xinjiang, replacing state-funded stockpiling. No indication has been given that the measure will be extended to other inland provinces, Xi said. The commodity is an important tool for helping boost incomes in the area, known officially as Xinjiang Uighur Autonomous Region, which has China’s highest concentration of Uighur Muslims and boarders Central Asian nations, he said.

“If you are a cotton grower in inland China, you’d better think about planting grain or something else, because those subsidies are only for Xinjiang,” Xi said in an interview yesterday in Beijing.

Cotton for December delivery fell 0.2 percent to 62.76 cents a pound on ICE Futures U.S. at 1:18 p.m. in Beijing. The fiber is poised to extend its longest run of weekly losses in more than five decades on signs that global demand will trail output.

Central Decision

“While local officials may try to preserve cotton planting and win some subsidies, clearly the central government doesn’t see it’s necessary to extend the program beyond Xinjiang,” said Dong Shuangwei, head of DSW Consulting Ltd., a Beijing-based commodity investment advisory company.

The end of government stockpiling has already cut plantings this year. Area sown to cotton fell 12.5 percent from a year ago to 4.2 million hectares, according to Xinjiang accounted almost half the nation’s official output of 6.8 million tons last year, according to the China Agricultural Yearbook published by the Ministry of Agriculture.

China’s imports will probably fall despite declining domestic production because the government is auctioning as much as 10 million tons of state reserves, Xi said. The country holds more than half the global cotton inventory, the U.S. Department of Agriculture estimated July 11. China sold 2.2 million tons from stockpiles in the marketing year started Sept. 1, said in a report July 28.

Textile Industry

Imports in the first half of this year fell 42 percent from a year ago to 1.4 million tons, China customs data show. Imports are mostly controlled by policy makers through quotas, Xi said.

China also said this month it would channel 20 billion yuan ($3.2 billion) to help Xinjiang develop its textile industry.

The National Development and Reform Commission, the nation’s top planner, first announced the temporary stockpiling program in March 2011, according to its website. Two calls today to Li Pumin, NDRC spokesman, weren’t answered.

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Not in the bin yet — cool weather continues in the U.S. Corn Belt

Not in the bin yet — cool weather continues in the U.S. Corn Belt | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |

Prospects of record corn and soybean depend on getting the crop off in good condition. A Purdue University corn specialist  is comparing this year to 2009, when maturity was delayed and harvesting was difficult.These maps from the U.S. Weather Service show the cooler-than-normal temperatures in the Midwest for the past 30 days, and the outlook for the next three months, which is for a continued below-normal pattern.

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CWB crop tour: Above average yields forecasted

REGINA — Barring any major yield-altering events between now and harvest, western Canadian yields for spring wheat and canola will be lower than last year’s bin busting numbers but better than average.

That was the main conclusion following a prairie-wide crop tour that began earlier this week and concluded today in Regina.

The four-day tour of Western Canada’s key grain producing regions estimated average spring wheat yields at 43 bushels per acre, canola at 34 and durum at 48.

“We’re not trying to produce a number that is the final end-all, be –all of the Canadian crop,” said CWB crop analyst and tour organizer Bruce Burnett.

“This is like a snapshot. We’re going around the Prairies. We’re taking a look, we’re taking stock. Two days from now there could be a massive freeze and everything could change just like that.

“But for here and for now, this is kind of what we’re looking at. The yields that we present are going to be an indication of what the potential is … (but things) are still a long ways from being in the bin.”

The crop tour was organized by CWB and examined potential crop yields in hundreds of crops along a route that covered thousands of kilometres in Manitoba, Saskatchewan and Alberta.

For logistical reasons, the only major grain growing area that was not included in the tour was the Peace River district in northwestern Alberta and northeastern British Columbia

Burnett said later-than-normal crop staging in many areas made it difficult to accurately estimate yields in some crops.

Crop staging for spring wheat is as much as one or two weeks behind in the eastern Prairies.

In much of Alberta, crop staging is only slightly behind normal.

Flooding has taken a significant chunk of farmland out of production in eastern Saskatchewan and western Manitoba.

Burnett estimated that unseeded acres and seeded acres lost to flooding will account for 3.5 to four million acres of lost production this year.

Excess moisture will also reduce yields in many areas.

In general, western Canadian crops show “solid” yield potential, though lower than 2013.

Warm, dry weather over the next few weeks will reduce the risk of frost damage and could result in slightly elevated protein levels compared to 2013.

Burnett’s figures were shared against a gloomy backdrop that suggested world markets are awash in grains and oilseeds.

Daniel Basse, market analyst president of the U.S.-based AgResource Company, said worldwide plantings of corn, soybeans and wheat hit a record level in 2014.

U.S. analysts are forecasting record production in the United States.

Russian wheat production, estimated by the U.S. Department of Agriculture at 53 million tonnes, could come in closer to 60 million tonnes, according to many analysts.

In China, corn production is also expanding rapidly, said analyst Quiang Li from JCIChina in Shanghai.

Overall, increased production in North America and expanding world stocks of coarse grains will continue to weigh heavily on wheat prices, barring a major production problem.

Demand for rail capacity from North America’s energy sector could also translate into high basis levels again this year, a prospect that won’t sit well with many western Canadian farmers who paid a huge price to move last year’s record breaking Canadian harvest.

In terms of price, one of the few bright spots for western Canadian producers is the potentially positive outlook for high-protein wheat.

Demand for high-protein wheat is likely to result in more visible protein premiums this year.

In China, demand for foreign oilseeds is likely to remain at current levels or increase, added Li.

Chinese production subsidies favour the production of corn at the expense of oilseed crops such as rapeseed and soy.

Subsidies supporting corn production in China are not likely to change within the next two to three years, Li said.

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Les croustilles de la colère : la Régie a autorisé à Yum Yum une baisse des prix de 9 %

L’affaire est loin d’être dans le sac pour les producteurs de pommes de terre qui approvisionnent Croustilles Yum Yum.
31 juillet 2014
par Yvon Laprade - Alimentation

La PME de 300 employés de Warwick, près de Victoriaville, vient en effet de convaincre la Régie des marchés agricoles que sa stabilité financière passe par une baisse des prix payés aux producteurs québécois.

Résultat : dans une décision rendue le 14 juillet et qui a été « très mal accueillie » par les producteurs, la Régie a autorisé à Yum Yum une baisse des prix de 9 % pour la récolte 2014 - 2015, et un gel des prix pour la récolte 2015 - 2016.

Les producteurs s’étaient dits prêts à accepter une diminution de 4 à 5 % pour la prochaine année, pour tenir compte des fluctuations du marché. Dans sa demande initiale, le fabricant de chips avait relevé la barre et exigeait plutôt une baisse des prix payés aux producteurs de l’ordre de 13 % au cours de la prochaine année.

La mission de la Régie

« Ça n’a aucun sens. Nous sommes en présence d’une entreprise québécoise qui n’a aucune espèce d’empathie envers ses fournisseurs, a martelé en entrevue à la Terre le directeur général de la Fédération des producteurs de pommes de terre du Québec, Clément Lalancette. Les contrats n’ont pas encore été signés et on ne connaît pas encore les volumes à livrer. Comme si cela ne suffisait pas, nous avons devant nous une Régie qui prend des décisions qui vont à l’encontre de sa mission qui est d’assurer une mise en marché ordonnée. » 

« Cette baisse consentie par la Régie risque en outre de déstructurer le marché de tout l’est du Canada, ajoute-t-il, et ça envoie un signal aux autres grands producteurs de croustilles qui seront à leur tour tentés de couper les prix. »

Il déplore, en outre, que la décision de la Régie crée un précédent dans le marché de la croustille au Québec en déterminant un prix pour les marques privées, et un prix pour la marque nationale.

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Potash price gains to stick despite corn's retreat

Intrepid Potash revealed a return to rising sales values for its potash, and forecast price increases would stick despite the tumble in grain markets, as the group unveiled a bigger-than-expected return to the black.

The US-based group unveiled earnings of $5.56m for the April-to-June period a figure which, while down 51% year on year, represented the first profits in three quarters.

The return to the black reflected in part efforts to cut costs, as Intrepid and other potash groups struggled against a market thrown into turmoil after Russia's Uralkali a year ago broke up the Belarusian Potash Company cartel, which controlled more than 40% of world trade.

The cartel's demise prompted a slump on potash prices, as buyers stood back, awaiting to see how far prices would fall.

However, Intrepid also noted a return to growth in prices it achieved for its potash, up 4% quarter on quarter to $363 per tonne, as demand swelled, although values remained well below the $443 a tonne it achieved in the same period of 2013.

Price outlook

"Potash demand in the second quarter remained strong and pricing improved in response to lower inventory levels in North America, particularly of granular sized product," Intrepid Potash said.

And customer demand has started "strong" in the July-too-September quarter too, raising the chances of price rises sticking despite the fall in corn prices to four-year lows, implying lower farmer returns.

"Intrepid does not expect potash pricing to fluctuate meaningfully during the second half of the year in response to current corn and soybean pricing as current potash pricing provides good value to the farmer," the group said.

Intrepid indeed highlighted the summer potash price rise, to $463 a tonne in the Midwest, by Canada's PotashCorp, as supporting "an outlook for stability in pricing into the fall season of 2014".

The comments also come two days after Urakali, nearly exactly a year after quitting the Belarusian Potash Company, said it may raise by 10% prices for a 2015 supply contract with China.

Prices agreed by China, as the top potash importer, tend to set the benchmark for other buyers.

Inventory drawdown

Intrepid reported sales of $110.9m for the April-to-June period, up 19.7% year on year, and ahead of market expectations of $91.0m.

Besides higher prices, the group also achieved above-forecast sales volumes of 235,000 tonnes.

Earnings, equivalent to $0.07 per share, beat forecasts of a $0.01-per-share result.

However, the stronger sales volumes, up 28% year on year, came with a hangover, in depleting inventories such that Intrepid lowered to 415,000-435,000 tonnes, from 420,000-440,000 tonnes, its forecast for volumes in the second half of 2014.

The group produced 411,000 tonnes of potash in the first half of the year – 67,000 tonnes behind sales.

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Bunge profits beat forecasts despite Brazil hurdle

Bunge overcame a reluctance by Brazilian farmers to sell corn at current prices to lift its profits far more than Wall Street had expected, boosted by the boost to processing margins from depressed crop values.

Shares in the US group  – with Archer Daniels Midland, Cargill and Louis Dreyfus one of the ABCD of agricultural trading giants – stood 7.0% higher at $78.81 in late deals in New York, adding more than $750m to its stockmarket value.

Bunge revealed a 147% rise to $272 in earnings for the April-to-June quarter, on revenues up 8.4% at $15.49bn.

The improvement lifted earnings per share to $1.76, above the $1.36-per-share result that analysts had forecast.

And it reflected the boost from strong harvests which, besides boosting volumes of crop to market and transport, weigh on prices, so supporting the profitability of processing operations.

'Meet or exceed targets'

Soren Schroder, the Bunge chief executive, said: "Strong global oilseed processing margins, driven by big crops and growing demand, led to significantly better results in agribusiness," by far the group's largest-earning unit.

And he forecast further prosperity for the agribusiness division, as "big northern hemisphere crops, combined with strong global livestock economics…. continue to drive demand and encourage trade".

For the group as a whole, "we expect the momentum of the second quarter to carry through for the remainder of the year," supported by agribusiness and the food & ingredients division, which achieved record results in the April-to-June period, helped by last year' acquisition of Mexican wheat miller Grupo Altex.

The agribusiness and food & ingredients division will "meet or exceed" their target for combined full year returns 1.5 points above cost of capital.

Brazil farmers delay sales

The strong performance in agribusiness, which achieved an 83% rise to $311m in its operating profits in the latest quarter, came despite a reluctance by Brazilian growers to sell corn at prices which have fallen to four-year lows in the country, as they have in Chicago.

The division's grain origination volumes fell year on year, "primarily due to Brazilian farmers postponing commercialisation of the safrinha corn crop as a result of the drop in market prices", Bunge said.

The safrinha corn crop, grown on fields vacated by the soybean harvest early in the calendar year, is the source of Brazilian exports of the grain, which appear to be running slower than a year ago.

The line-up of vessels waiting to load corn at Brazilian ports was last week - at 35 ships seeking 1.8m tonnes of the grain – well down on the 86 ships looking for 4.5m tonnes a year before, a drop seen as only partly down to infrastructural and logistical improvements.

However, the drop in prices below guaranteed levels is persuading many growers to try to hang on for government auctions rather than sell at prices which in major growing state Mato Grosso fell to R$10.00 per sack, equivalent to less than $2.10 per bushel, earlier this month.

The guaranteed minimum price is R$13.56 per sack – assuming the country's farm ministry succeeds in a quest for funds to support a state purchasing programme.

Sugar review

Bunge added that it expected a slowdown in farmer selling in South America as a whole in the second half of the year.

"While this would reduce utilisation in the region, it should provide additional export opportunities for the US and Europe," said Drew Burke, the group's finance director, adding that the trend will "also skew results more towards the fourth quarter".

The group added that its strategic review announced in October of its sugar business "is progressing", with the business for now being run on a free cash flow neutral basis "as we explore various alternatives".

The division reported an operating profit of $6m for the latest quarter, compared with a $3m loss a year before.

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Rabobank reports U.S. set to become urea self-sufficient

U.S. nitrogen fertilizer capacity has boomed in recent years as natural gas costs have decreased. According to a new report from Rabobank – A Shale Tale: The aftermath of the U.S. Nitrogen Fertilizer Boom - the U.S. nitrogen fertilizer market is now reaching 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 make further capacity additions in the short term unlikely. However, the recent rapid capacity expansion could see the U.S. become self-sufficient in urea—a key nitrogen fertilizer—as soon as 2017. In the long term, further increases in U.S. nitrogen fertilizer capacity should not be ruled out.

“Lower natural gas costs meant U.S. fertilizer producers were able to realize their dream of converting low cost inputs into higher priced outputs,” states Rabobank analyst, Suzanne Pera. “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.”

The U.S. nitrogen fertilizer industry faces production cost challenges. 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 lead to a decrease in supply and put upward price pressure on natural gas prices in the short to medium term. The same applies to domestic demand: the long, cold winter of 2013/14 also caused natural gas prices to peak. Increasing construction costs are another challenge, and are resultant of rising costs for engineering, procurement and construction (EPC) contracts. 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.

Nitrogen fertilizer capacity that is due to come online will first feed into domestic demand, meaning that the U.S. could potentially reach self-sufficiency in urea by 2017. If U.S. demand for granular urea imports begins to fade, producers will be forced to look for other destination markets such as 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.

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Frank Backx : July 31, 2014 -A.M. Grain Comment

July 31, 2014 -A.M. Comment


Dec C 3.70 -2 Nov S 10.82 +1 Sep W 5.25 -2. Zzzz. Good weather and large crops priced in at current levels? Aug weather looks to be a continuation of growing season so far-cool with enough rain. CD -15, 91.48






Frank Backx
HDC Forest Location Manager 
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