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Army Rejects Plea to Boost Water for Mississippi Barges

Army Rejects Plea to Boost Water for Mississippi Barges | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |
The U.S. Army Corps of Engineers rejected shippers’ requests to increase the flow from a major Mississippi River tributary, which a barge company said is needed to keep open the nation’s busiest waterway.
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Bourse: le spectre de la Fed refait surface

Bourse: le spectre de la Fed refait surface | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |

"Le dollar canadien est plombé par le pétrole et l’anticipation d’une hausse des taux aux États-Unis."

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Hedge funds still gloomy on ags, despite deep cut to wheat shorts

Hedge funds' dramatic turn less gloomy view on wheat price prospects has not been reflected in their thinking on ags overall, with corn and soybeans bearing the brunt of fresh bearish positioning.

Managed money, a proxy for speculators, lifted its net short position in futures and options in the top 13 US-traded agricultural commodities, from corn to sugar, by 32,354 contracts in the week to last Tuesday, analysis of data from the Commodity Futures Trading Commission regulator shows.

The increase took the net short – the extent to which short holdings, which profit when values fall, exceed long bets, which benefit when prices gain – to 98,548 lots, below the record 142,612 contracts hit last month but a historically large figure nonetheless.

And it defied a steep cut in speculators' bearish positioning on wheat, encouraged by weather scares in the US, where excess rain is testing the condition of southern winter wheat crops, and in Canada and Russia, where dryness concerns have grown.

'Still held large short positions'

In both Chicago-traded soft red winter wheat futures and options and Kansas City hard red winter wheat, hedge funds swung more bullish in positioning by the largest amount in 19 months, since October 2013.

However, hedge funds retain a historically sizeable bearish position in wheat nonetheless, particularly in the Chicago contract, in which they held a net short of 72,999 lots.

"Friday's positions report showed that investors still held large short positions, as of last Tuesday," said Tobin Gorey at Commonwealth Bank of Australia.

'Continue to worry'

While investors are likely to have covered some further short holdings since Tuesday, the extent of the negative positioning could spur some further short-closing, and upward pressure on prices, given further weather worries.

"Weather forecasters contin.

"The trade will consequently continue to worry about wheat availability – and so sell only reluctantly – despite inventories being comfortable."

Still, at Minneapolis-based broker Benson Quinn Commodities Brian Henry said that at a weak finish for futures on Thursday "hinted at the idea that the funds were done covering shorts for now".

'Near-record high'

Despite the less bearish thinking on wheat, hedge funds extended their net short position on grains overall, including the soy complex, by more than 28,000 lots to a record 280,736 contracts, with large pile-ups of short positions in corn and soybeans.

In corn, the managed money net short rose to its highest since November 2013, also encouraged by the benign Corn Belt weather, which is expected to see the US crop given a strong condition score on its first official rating, released on Tuesday.

"Expectations are for a near-record high [rating]," Benson Quinn Commodities said.

Downbeat on softs

In the latest week, hedge funds also turned more negative on soft commodities, led by a return to extending their net short in New York-traded raw sugar futures and options.

Expectations for a shortfall in world production of the sweetener in 2014-15 have continued to decrease, largely thanks to increased ideas of Indian production.

They also cut their net long in New York-traded cotton, despite some concerns over the southern US wetness slowing plantings, and a decent US export pace.

"We are seeing a continuation of the fluctuation in the hedge fund position, which has been swinging back and forth since October between net short and net long," said John Robinson, expert on cotton marketing at Texas A&M University.   

'Special times'

However, speculators for a fourth successive week rebuild their net long in Chicago livestock futures, encouraged by a seasonal boost to demand from Monday's Memorial Day holiday in the US, viewed as the start of the barbecue season.

Noting a rise in beef prices of some 15% year on year, Paragon Economics and Steiner Consulting said that "we think retail promotions certainly have been key going into Memorial Day. 

"Retailers understand that consumers are willing to pay for high priced, high quality beef during special times of year. The start of the summer grilling season is one of those times."

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Speculators' net longs in grains and oilseeds, May 19, (change on week)

Speculators' net longs in grains and oilseeds, May 19, (change on week)

Chicago soyoil: 27,756, (-13,244)

Kansas wheat: -1,207, (+9,155)

Chicago soymeal: -9,275, (+2,232)

Chicago wheat: -72,999, (+31,690)

Chicago soybeans: -90,271, (-39,820)

Chicago corn: -134,740, (-18,160)

Sources:, CFTC

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Thank Bigger Pig Herds for Making That Memorial Day BBQ Cheaper

Thank Bigger Pig Herds for Making That Memorial Day BBQ Cheaper | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |

As Memorial Day kicks off the U.S. grilling season, Americans are finding another reason to throw a barbecue party: cheaper pork.

After a virus killed millions of piglets last year, farmers expanded herds and took advantage of lower grain prices to fatten animals. That drove hog prices 33 percent lower in the past 12 months. Hedge funds are now betting the slump won’t last as the lure of lower-cost meat stimulates demand.

Memorial Day is the most popular holiday for U.S. grillers after Independence Day on July 4, according to the Hearth, Patio & Barbecue Association. Adding to the excuses to celebrate, it’s not just bacon and pork chops that have got cheaper. An index of seven party staples that includes ice cream and potato chips is at the lowest level since October, according to retail prices compiled by Bloomberg. More than two-thirds of Americans own an outdoor grill, a survey by Weber-Stephen Products LLC showed.

“People are taking out their grills for Memorial Day,” said Jessica Sampson, an agricultural economist at the Livestock Marketing Information Center in Lakewood, Colorado. “We have a lot more pork on the market, and that’s pushed prices down, and those lower prices are definitely incentivizing consumers to purchase more.”

Pork Chops

Retail pork-chop prices fell 8.6 percent from a record reached in October, while bacon dropped 15 percent from its peak in June. The Livestock Marketing Information Center’s demand index climbed about 17 percent in the first quarter from a year earlier, Sampson said.

As grillers welcome cheaper pork now, money managers are betting that costs will climb again as demand strengthens. The net-long position in lean hogs expanded 4.7 percent to 29,605 futures and options contracts in the week ended May 19, U.S. Commodity Futures Trading Commission data show. It was the sixth straight gain and the longest advance since August 2013.

Hog futures on the Chicago Mercantile Exchange jumped 32 percent since reaching a five-year low in February. Prices slid 0.2 percent last week to 83.725 cents a pound.

Pricey Ribs

Demand may taper off once the grilling season is over, said Donald Selkin, who helps manage about $3 billion as chief market strategist at National Securities Corp. in New York. Not all pork cuts are cheap, with wholesale rib prices reaching a record on May 19.

The glut of pork supply will also keep prices in check. The U.S. hog slaughter climbed almost 6 percent so far this year from 2014, and animals weigh about 9 pounds more on average than they did two years ago, government data show. Global production of the meat will rise to 110.9 million metric tons in 2015, from 110.5 million last year, the U.S. Department of Agriculture forecast in April.

“I would be careful about holding long positions in hogs,” Selkin said in a May 21 phone interview. “Supplies are going to increase a lot.”

Export Demand

Even though there’s a glut in the global market, futures traded in Chicago will follow what’s happening in the U.S., said Will Sawyer, a vice president of animal-protein research for Rabobank International. Along with increases in domestic consumption, rising demand for exports to China will support prices, he said.

Part of the reason grillers might choose more pork chops this Memorial Day, celebrated on May 25, is because burgers are still relatively expensive. The cost of beef is more than three times as much as pork, compared with an average of 2.2 times in the past decade, according to USDA data compiled by Bloomberg.

“Americans have had very strong demand for pork, and that’s going to continue through the rest of the year,” Atlanta-based Sawyer said in a May 21 phone interview. “Because beef continues to be expensive, with no signs of coming down, consumers can look to pork.”

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Libre-échange: l'UPA veut protéger la gestion de l'offre

Libre-échange: l'UPA veut protéger la gestion de l'offre | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |

L'Union des producteurs agricoles (UPA), flanquée du ministre de l'Agriculture, Pierre Paradis, et des représentants de l'industrie agroalimentaire québécoise a encore une fois appelé Ottawa lundi à préserver intégralement le système canadien de gestion de l'offre.

Alors que les négociations en vue du Partenariat transpacifique arrivent dans le dernier droit, le monde agricole s'inquiète de voir de nouvelles brèches ouvertes dans le système de gestion de l'offre, surtout après avoir entendu le premier ministre Stephen Harper avertir que le Canada aurait à faire «des choix difficiles».

«Notre message au premier ministre Harper, c'est de ne pas céder sur aucun des piliers de la gestion de l'offre et de ne pas accorder d'accès supplémentaire au marché canadien», a déclaré le président de l'UPA, Marcel Groleau, précisant que d'autres pays, dont les États-Unis, n'accorderont pas d'accès supplémentaire à leurs marchés laitiers.

De son côté, le ministre Paradis a affirmé que ses homologues provinciaux étaient tout aussi inquiets, particulièrement dans les Maritimes et en Ontario où une part importante de la production agricole s'appuie sur le système de gestion de l'offre, comme au Québec.

«La déclaration du premier ministre du Canada a semé une inquiétude et le ministre de l'Agriculture fédéral (Gerry Ritz) se doit d'effectuer une mise au point», a indiqué M. Paradis qui a dit espérer une rencontre avec M. Ritz plus tard cette semaine.

Pierre Paradis n'a pas cherché à éviter le terrain politique, soulignant que la gestion de l'offre touche 20 pour cent de la production agricole du Canada, mais que cette proportion est davantage dans les horizons de 40 pour cent et plus dans les provinces à l'est du Manitoba.

«Quand vous vous déplacez vers l'Ouest canadien, on est plus dans la production de céréales et de boeuf. Est-ce que cela a le même poids politique? Si on fait la moyenne nationale, la réponse est non», a dit le ministre.

La gestion de l'offre - qui permet d'équilibrer l'offre et la demande dans les secteurs laitier et avicole (volaille et oeufs) - est contestée à chacune des négociations de commerce international par les autres pays.

L'inquiétude des producteurs agricoles, cette fois-ci, est exacerbée par le fait que le gouvernement Harper a ouvert une première brèche lors des négociations avec l'Union européenne, permettant l'importation de 17 700 tonnes de fromage additionnelles.

«Il y a une fracture dans le contrat social qui avait été négocié avec les producteurs», a affirmé Marcel Groleau, qui définit justement la gestion de l'offre comme un contrat social entre les producteurs, les consommateurs et le gouvernement dans le but de maintenir à la fois des prix raisonnables et un revenu adéquat pour les producteurs.

«On n'a pas le droit de se permettre une autre brèche. On a déjà été affaibli et on ne veut pas mourir à petit feu», a renchéri Pierre Paradis, pour qui l'ouverture du marché aux quantités additionnelles de fromage était déjà de trop.

L'ouverture de cette brèche a mené Ottawa à verser des compensations aux producteurs de fromage, ce qui démontre, selon l'UPA, que la seule autre option serait de subventionner l'agriculture.

«Le plan B, c'est l'intervention monétaire des gouvernements, a fait valoir Marcel Groleau. Ailleurs dans le monde, le plan B en agriculture, c'est ça. Ici on a un plan A, c'est la gestion de l'offre.»

Une part importante de l'argumentaire des producteurs repose sur le fait que les subventions gouvernementales à l'agriculture dans les autres pays, parfois très généreuses, créent une concurrence déloyale alors que, même sans subventions, il en coûte déjà plus cher de produire au Canada en raison des conditions climatiques.

Marcel Groleau estime qu'il est encore temps d'intervenir puisque les discussions n'arriveront pas au niveau ministériel avant le mois de juin.

«Les négociateurs (fédéraux), à ce moment-ci, n'ont pas de mandat d'accorder quelque ouverture que ce soit ou quelque accès que ce soit au Canada pour les produits sous gestion de l'offre. Alors ça va se décider dans le bureau de M. Harper éventuellement et c'est pour ça que le message s'adresse à lui», a dit le président de l'UPA.

Même si la question revient à chacune des négociations de commerce international, Marcel Groleau refuse de tenir pour acquis qu'Ottawa aura le réflexe de défendre le système de gestion de l'offre. «Ils sont supposés de le savoir, mais on n'est pas sûrs qu'ils s'en souviennent toujours...», a-t-il laissé tomber.

À Ottawa, la question a été soulevée aux Communes lundi et le ministre d'État à l'Agriculture, Maxime Bernier, a déclaré que son gouvernement allait «continuer à défendre les intérêts commerciaux de l'ensemble des secteurs industriels, y compris le secteur de l'agriculture, dans le cadre des négociations de cette entente de libre-échange».

M. Bernier a ajouté que «les actes passés de notre gouvernement sont de bon augure pour l'avenir, puisque nous avons signé des ententes de libre-échange avec l'Union européenne, avec la Corée du Sud, tout en préservant la gestion de l'offre et le domaine agricole».

Cependant, l'entente de libre-échange avec l'Union européenne à laquelle faisait référence le ministre Bernier est justement celle qui a permis l'augmentation des importations de fromage qui est à la source des inquiétudes du monde agricole.

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Russia Considers New Proposal for Curbs on Wheat Shipments

Russia Considers New Proposal for Curbs on Wheat Shipments | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |

Russia proposed new curbs on wheat shipments only 10 days after formally ending a previous levy, saying it needs to protect livestock farmers from rising feed costs.

The tax may apply from July 1, the start of the 2015-16 marketing season, if it’s approved by the Cabinet, Agriculture Ministry spokeswoman Yekaterina Popova said. It would be at least 1 ruble a metric ton and may be higher if contract prices rise above 11,000 rubles ($220) a ton.

Russian wheat prices should be limited to no more than that level in order to protect the country’s animal-breeding industry, Agriculture Minister Alexander Tkachev said May 15. Prices for next season’s crop rose 2.7 percent to $190 a ton in the week to May 18, according to data from Moscow-based grains carrier ZAO Rusagrotrans.

The proposed 11,000-ruble threshold is “a very low level to trigger a tax,” said Arkady Zlochevsky, president of the Russian Grain Union, a Moscow-based industry lobby group.

Prime Minister Dmitry Medvedev on May 15 ended the previous tax a month-and-a-half earlier than planned after the country’s inflation slowed, easing concern over soaring bread costs. Speculation that more wheat would enter the market after the tax was removed contributed to lower prices, helping to send contracts on the Chicago Board of Trade to an almost five-year low earlier this month.

Economic Crisis

The tax imposed on Feb. 1 was designed to rein in food prices after the ruble collapsed last year and the economy buckled under plunging oil prices and international sanctions over the conflict in Ukraine. It followed export duties in 2004 to limit shipments, a jump in the rates in 2008 to brake inflation and an outright ban in 2010, when drought caused crop failure, and again called into question the country’s reliability as a grains supplier.

Tkachev said May 15 that Russia might re-introduce measures to contain prices should they increase again in the domestic market. Export curbs would seek to ensure a balance between the needs of grain producers and livestock farmers, he said.

Every wheat shipment from Feb. 1 had incurred a tax of 15 percent, plus 7.50 euros ($8.23) a ton, causing monthly exports to fall by more than half. Originally the tax was intended to run through July 1.

The new tax may be set at an insignificant level if the ruble maintains its current level to the U.S. dollar, Vladimir Petrichenko, director general of Moscow-based market researcher ProZerno, said by phone Monday.

Currency Risk

“If the ruble gets cheaper, the tax would complicate matters for wheat exporters,” he said. “They would be exposed to that risk.”

Russia’s currency traded little changed at 50.1157 to the dollar in Moscow on Monday.

The ministry’s proposal, which was approved by the Economy Ministry, envisages a formula that divides a contract price in two and subtracts 5,500 rubles from the result, according to Popova. The remainder would be the tax, she said. The proposed formula differs from one put forward by the ministry earlier, as reported on May 7 by the Vedomosti newspaper.

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Monsanto's move on Syngenta could mean move away from glyphosate

Monsanto's move on Syngenta could mean move away from glyphosate | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |
  • Monsanto's (NYSE:MON) efforts to try to take over Syngenta (NYSE:SYT) could spark a selloff or de-emphasis of its glyphosate product line that last year brought in ~$5B, or a third of total MON's revenues, industry sources tell Reuters.
  • The key ingredient in MON's popular Roundup herbicide is glyphosate, the world's most widely used weed-killing agent, but its heavy use has led to high levels of weed resistance, and rivals have been developing alternative herbicide options.
  • A move away from glyphosate would make sense for MON, a Piper Jaffray analyst says, since "as resistance continues to grow with glyphosate, the value of that product is likely going to decline."
  • Executive VP for global strategy Kerry Preete told investors earlier this week that in addition to selling off SYT's seeds and traits business to make the acquisition work, MON is open to selling "certain overlapping crop protection chemical assets that exist."
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Canada-Japon: les négociations commerciales piétinent

Canada-Japon: les négociations commerciales piétinent | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |

Le Japon, un des pays avec lesquels le gouvernement Harper souhaite signer un accord commercial en priorité, ne serait plus intéressé à conclure une entente avec le Canada, a appris La Presse Canadienne, ce qui fait piétiner les négociations entre les deux pays.

Dans une note interne, le ministère des Affaires étrangères, du Commerce et du Développement reconnaît que les négociations n'ont pas progressé comme prévu depuis le début des discussions, en mars 2012.

La note indique que le Japon est plus intéressé par des discussions multilatérales au sein du Partenariat Trans-Pacifique (PTP), un traité de libre-échange impliquant 12 pays, dont plusieurs de ses voisins, le Canada, le Mexique, les États-Unis et l'Australie.

Tokyo traîne les pieds pour déterminer une date pour la huitième ronde des discussions bilatérales avec le Canada, poursuit la note préparatoire à une réunion de fonctionnaires du ministère.

Le ministre du Commerce international, Ed Fast, avait dit à la Chambre des communes, il y a deux semaines, que le Canada et le Japon tentaient d'établir une date pour amorcer les prochaines négociations.

En mars 2014, le premier ministre, Stephen Harper, annonçait un accord de libre-échange avec la Corée du Sud, le présentant comme une percée en Asie et affirmant que le Japon serait l'une de ses cibles principales pour les ententes à venir.

Une étude conjointe démontre qu'un partenariat de libre-échange avec le Japon ferait bonifier de 3,8 milliards de dollars par année l'économie du Canada, avait indiqué le gouvernement.

Alors que certains analystes se sont montrés très optimistes sur les occasions qu'apporterait un tel accord, la note interne se fait plus réticente: l'enthousiasme du Japon face au Partenariat Trans-Pacifique fait de l'ombre aux négociations bilatérales avec le Canada, y lit-on.

«Bien que des progrès aient été faits au chapitre des négociations de l'accord de partenariat économique Canada-Japon (APECJ) lors des sept rondes complétées, le texte de l'APECJ demeure moins développé que prévu après trois ans de négociations.»

Le Japon aurait refusé deux fois que le Canada reçoive la huitième ronde de discussions au début 2015 et préférerait qu'elle ait lieu après la prochaine rencontre ministérielle du PTP.

«Les principaux négociateurs se sont rencontrés à Tokyo les 9 et 10 avril pour discuter de comment faire avancer les choses, mais le Japon refuse de déterminer une date pour la prochaine ronde, tant qu'il n'aura pas plus de détails sur l'échéancier et les résultats du PTP.»

Stephen Harper devrait croiser le premier ministre japonais, Shinzo Abe, le mois prochain au sommet du G7 en Allemagne. Les conservateurs voient le potentiel du marché du Japon pour les produits de l'énergie, particulièrement depuis que le projet d'oléoduc Keystone XL, qui transporterait le pétrole des sables bitumineux de l'Alberta jusqu'aux raffineries du golfe du Mexique, est bloqué.

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Just in time for harvest, July wheat prices have experienced a strong rally since the first of May. Prices have rallied from contract lows near $4.60 to a high of $5.30 as weather was forecast to hurt the wheat crop. Forecast of a late frost combined with wet weather in major growing areas had the market worried about supplies and helped prices rally 32 cents in one day. However, demand remains weak and stagnant for U.S. wheat and is preventing further gains in the market. As the weather scare fades, look for the market to turn its focus back to the weak U.S. balance sheet and wheat prices to quickly fall back below $5.

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On May 18, the World Trade Organization (WTO) ruled U.S. country of origin labeling (COOL) noncompliant. This was U.S. final appeal of the WTO’s ruling from the trade dispute filed by Canada and Mexico in 2008. After the initial ruling against COOL, the U.S. Department of Agriculture revised the regulation in 2013. However, that revision also was found to be noncompliant in 2014, and this most recent ruling upheld the 2014 decision. The U.S. now has to either modify or repeal the program.

The World Trade Organization’s Dispute Settlement Body will hold a special meeting May 29 to adopt the Appellate Body’s decision faulting U.S. COOL requirements. After that meeting, Canada and Mexico will be able to request permission to retaliate against the U.S. based on their losses because of the labeling rules.

If the U.S. fails to act, Canada would be allowed to implement tariffs of around $2 billion a year in “punitive damages.” Canada will likely target U.S. exports, including rice, beef, pork, wine, cherries, pasta, corn and other products. These tariffs could be in place as early as late summer if Congress and the administration fail to act.

On May 20, the House ag committee was scheduled to mark up a bill repealing U.S. country of origin labeling for beef, pork and poultry. It was expected to clear the panel, despite opposition from ranking member Rep. Collin Peterson (D-Minn.). House ag chairman Mike Conaway (R-Texas) is working with GOP House leadership to get the bill considered on the floor in early June. The outlook for the Senate is murky, as no similar bill has yet to be introduced. But Senate ag chairman Pat Roberts (R-Kan.) said that he will consider any solution, including repeal, that would allow the U.S. to be WTO-compliant.

Farm Bureau policy states, “We support Country of Origin Labeling (COOL) that conforms with COOL parameters and meets WTO requirements.”

American Farm Bureau Federation President Bob Stallman said, “The World Trade Organization dispute panel has ruled that U.S. country of origin labeling regulations for meats are not in compliance with previous WTO decisions. That means we need further effort to craft an acceptable COOL program.

“Farm Bureau will carefully review the decision and then determine recommended actions,” he continued. “We will work with Congress, the USDA and the office of the U.S. Trade Representative to reach the goal of an effective COOL program that conforms to international trade rules.”

By Matt King

Arkansas Farm Bureau

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Northern Freeze Spares Corn, Bean Crops

Northern Freeze Spares Corn, Bean Crops | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |

A late freeze on May 19 that swept over much of South Dakota and portions of Minnesota did little to discourage corn farmers or permanently damage newly emerged corn plants.

“There was frost damage on a fair number of acres throughout Minnesota,” said Jeff Coulter, corn agronomist with the University of Minnesota. “Some acres, probably 10% to 15%, were nipped by the frost.”

Being that the emergent corn plants are still so small, though, damage will be minimal.

“It’s more of a cosmetic thing,” said Coulter. “The frozen tissue will dry up and drop off, and new leaves will replace it. The good news is that the crops are so small it’s not that big of a deal. The plants will recover quickly.”

As of May 18, 97% of Minnesota’s corn was planted, compared to a five-year average of only 70%, according to USDA’s latest Crop Progress report. Planting in South Dakota was also way ahead of schedule, with 83% of the corn in the ground compared with the state’s five-year average of 66%.

In Minnesota, 72% of the corn had emerged, while 46 percent of South Dakota’s had emerged as of May 18.

“We are off to a good start in Minnesota. It was the earliest planting ever. We had incredibly early planting conditions,” said Coulter. “And we are still ahead of where we usually are in most years.”

Coulter expects as good or better yields in Minnesota this year than in any other state.

The May 19 freeze sent temperatures to a record low of 29°F in Pierz, South Dakota. Elsewhere in the state temperatures plunged to as low as 27°F, according to Dennis Todey, extension state climatologist with the University of South Dakota.

“Our spring has not been that cold,” Todey notes. “But we have had a couple of individual events that caused problems.”

Most of what damage has occurred has been to small grains, including winter wheat, but even that damage appears to be limited. “So far we are not hearing or seeing anything of a serious nature,” said Todey. “Corn is not far enough along, and beans have not emerged for it to even be a problem.”

Soybean planting is also well ahead of schedule in Minnesota and South Dakota.

In Minnesota, 79% of the soybean crop was planted as of May 18, compared with an average of 33%; and 42% of South Dakota’s beans were in the ground, compared with an average of 24%, according to USDA’s Crop Progress report.

Only 21%of Minnesota’s beans and 4% of South Dakota’s had emerged as of May 18.

“It could be a very good year for Minnesota corn farmers. I’m really optimistic,” said Coulter. “And a lot of farmers are really excited.”

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Soybean yield hikes possible despite lower prices

Soybean yield hikes possible despite lower prices | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |
BLOOMINGTON, Ill. — It’s called the Corn Belt for obvious reasons, but that doesn’t mean soybeans can’t play an even more important role in increasing farm profitability.

In recent years, there have been increased efforts to aggressively manage soybeans for higher yields, but there is concern that lower commodity prices won’t allow that option. 

Lance Tarochione, DeKalb and Asgrow technical agronomist in west-central Illinois, said in an Illinois Soybean Association-hosted webinar there are ways to shoot for high yields despite soybean prices back in the single digits. 

To grow high-yielding soybeans, growers should be willing to try new things and to treat their soybeans with the same management that they do corn.

“I think we’re a little bit corn centric in Illinois, and we tend to fertilize more for corn, spend more time with hybrid selection on corn than we do variety selection for soybeans. We brag more about our corn yields than we do our soybeans,” Tarochione said.

“Not everyone has the environment, patience or even the passion to grow 100-bushel soybeans today, but what we ought to be focused on is if you’re raising 50-bushel soybeans today, how do we get up to 55 or 60, not how do we get to 100.

“There’s a lot steps to go from 55 to 100. Baby steps, I guess — let’s get to 60 or 65 before we worry too much about 100. Yield contests are fun to see what we can do but don’t’ always reflect what is practical or profitable.”

Set Goals

A realistic goal for a farmer is to out-yield the five-year average by 10 percent or more or to exceed previous records many growers in Illinois hit in 2013 or 2014. 

Tarochione said key yield drivers are sunlight interceptions, nutrient uptake, stress mitigation and maximizing potential pod sites. 

“Sixty to 70 percent of the flowers on a soybean plant will never form a pod. And once that pod is formed, not every one of them is going to have four beans in it. There will be a lot of twos and threes,” he said. 

“Getting the most pods we can and then filling those pods is really the trick. If you get one more pod per plant, three beans per pod and a final stand of 120,000 plants that will give you an additional bushel per acre.”

High-Yield Tips

Tarochione identified the following keys to higher soybean yields: 

* Identify issues that have been encountered in past seasons and choose the right varieties to keep them from reappearing.

* Plant a full range of maturities. Later maturing varieties take advantage of moisture, but full-season beans usually perform better.

* Plant at the optimum time for your geography, not necessarily after corn is planted.

* Optimize fertility, gauging soil nutrient levels and applying nutrients as needed.

* Balance canopy development. Do not over-seed or canopies can become too thick.

* Minimize stress from insects, disease or lack of nutrients.

“Basically, if you can get the plants up, get a good stand, get a good canopy achieved by the second or third week of June, feed that crop through the season, get some good weather and do everything you can do to minimize stress from insects, diseases and nutrient deficiencies, that generally about the best you can do to try to achieve high soybean yields,” Tarochione said.

The options for improving profitability are increase yields, sell better and reduce costs. 

“What I like to look for is finding yield gains that don’t add significantly to cost while minimizing costs that do not sacrifice yield. I think there are a lot of producers this year that are trying to save their way to prosperity, and that’s very difficult to do,” Tarochione said.

“A lot of studies have shown that during times of low commodity prices producers that do the best job of maintaining profitability do it by achieving a lower breakeven price by producing more bushels rather than cutting production costs.”

Cost-Effective Boosts

His proven low-cost yield enhancers are:

* Plant earlier if you can and conditions allow.

* Control weeds earlier, before they exceed 4 inches tall.

* Narrow row spacing to something 20 inches or less — might not be “low cost” if this requires additional equipment. Weigh costs versus increase yield over acres and years.

* Plant the best genetics you can and plant at least five different varieties.

* Use fuller season varieties but have a range from mid to late season.

* Harvest as many acres as possible at or near 13 percent moisture.

* Lengthen your rotation — may not be “low cost” if you are not successful managing your corn on corn. 

Practices that add cost, but not yield are tillage — data shows no-till soybeans yield, as well as tilled — seeding rates in excess of 140,000 per acre, silver bullet products and practices without the support of a holistic systems approach to higher yield and additional fertility that is not a yield-limiting factor. 

“The timing, intensity and duration of weather events are really the 800-pound gorilla on the farm that is the single largest factor in your soybean yields,” Tarochione said.

“We can do everything right and Mother Nature can still throw us a curveball and what should have been 80-bushels beans has turned into 50-bushel beans and that really frustrates people. But the fact that they had the potential for 80-bushel beans is something we need to focus on.

“Weather is going to interact with all of our inputs and management decision for your soybean crop, but we still need to be doing the things right so that when we get lucky and have that perfect weather environment come along we can take advantage of it and achieve those high soybean yields.”

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ChemChina says not considering bids for Monsanto's herbicide business, Syngenta

May 22 State-owned China National Chemical Corp, better known as ChemChina, is not considering bidding for Monsanto's herbicide business or for Swiss crop chemicals maker Syngenta, a top ChemChina executive told Reuters on Friday.

"There have been some market speculations on this about ChemChina...but it's not us. We are not in contacts with (these) companies," said Robert Lu, ChemChina's VP in charge of overseas acquisitions.

Banking sources have previously told Reuters that ChemChina could be among the potential buyers for some of the assets that may be sold to overcome antitrust issues arising from Monsanto's planned acquisition of Syngenta.

ChemChina is currently in the middle of acquiring the 143-year-old Italian tyre maker Pirelli in a 7.3 billion-euro ($8 billion) deal. (Reporting by Aizhu Chen; Writing by Denny Thomas; Editing by Muralikumar Anantharaman)

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US flooding gives ag bulls the upper hand

Unfortunately for the southern US Plains, forecasts for supremely heavy rains over the long holiday weekend proved correct.

At least five people died in Texas and Oklahoma, and hundreds of homes were destroyed, as flash flooding caused by rains of up to 10 inches hit parts of the states.

Texas Governor Greg Abbott, who declared states of emergency in parts of the state said that homes that were "completely wiped off the map".

"This is the biggest flood this area of Texas has ever seen," Mr Abbott said, speaking of the area south of Austin.

"It is absolutely massive - the relentless tsunami-type power of this wave of water."

More rain on its way

The extent of the damage supported grain futures, a bit, in early deals.

Not just prices of wheat posted some gains, as a grain nearing harvest and so particularly vulnerable to wet weather, but row crops too.

"Excessive weekend rains across the central US, causing flooding in several wheat areas, and preventing summer grain planting progress, could give US ag futures a higher open for the Tuesday session," Terry Reilly at broker RJ O'Brien said earlier.

And the deluge has not ended, although the forecast for next week in the southern Plains has tended a little drier, MDA said.

"Showers should build across much of the [Plains] region Thursday through Saturday," the weather service said, saying that coverage will be "general" and with amounts that in some areas could hit 3 inches.

"Heavy rains in southern Oklahoma and Texas have resulted in widespread flooding, and more wetness is expected this week," the weather service added.

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Speculators' net longs in Chicago livestock, May 19, (change on week

Speculators' net longs in Chicago livestock, May 19, (change on week)

Live cattle: 93,359, (+7,583)

Lean hogs: 29,605, (+1,335)

Feeder cattle: 10,035, (+429)

Sources:, CFTC

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As ethanol boom fades, ADM sees bright future for corn in grocery aisle

As ethanol boom fades, ADM sees bright future for corn in grocery aisle | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |

May 22 The world's largest corn processor, Archer Daniels Midland Co, is shifting focus from its long-standing cash generator ethanol into developing new food ingredients as the biofuel boom that underpinned its financial success has cooled.

The shift could be one of the most transformative moves ever made by 113-year-old ADM, triggered by signs of strain in its legacy products. Demand for the gasoline additive ethanol is forecast to remain flat over the next decade while its other mainstay, high fructose corn syrup (HFCS), is beset by health concerns.

"Coming up with new products is really what keeps us up at night," said Chris Cuddy, president of corn processing.

Critics associate HFCS with obesity, and companies including Panera Bread Co and Kraft Foods Group Inc are cutting it from their goods.

ADM's corn business profit dropped 39 percent in the first quarter due to poor ethanol margins. Demand is flattening as government targets for ethanol use in gasoline have been reached and increasingly efficient vehicles consume less fuel. (

But its ingredients business, currently just a tiny revenue generator for the $31.6 billion company, posted a 17 percent profit jump in the same period.

It invested $3 billion in that business last summer with the purchase of natural flavorings company Wild Flavors, ADM's largest-ever acquisition.

Analysts say it is too early to tell if the strategy will be successful.

"They did deliver a higher return on invested capital in their business last year. Now, it's hard to tell if that's just low corn prices for the ethanol side or whether it's a combination of lower input cost plus better strategy, so it remains to be seen if those returns are sustainable," said JP Morgan analyst Ann Duignan.


ADM has three domestic corn wet mills with the flexibility to make more of what is in demand and profitable and less of what is not.

It grinds about 3 million bushels of corn a day worldwide and produces about 11 percent of U.S. ethanol, so even a tiny change can resonate in the commodity supply chain.

The mills break corn into the oil-rich germ, high-protein gluten, fiber and the versatile starch which can be processed further with enzymes, yeast or bacteria.

At ADM's Decatur, Illinois, plant, the world's largest, computer operators in a tiny, air conditioned control room tucked among towering grain tanks, can tweak output in a couple of key strokes.

"Every day we have to figure out new homes for that starch capacity," Cuddy said, holding up for scrutiny one of nine jars, each filled with a different corn byproduct.

He said ethanol and corn syrup currently account for over half of the starch but declined to elaborate.

Competitors like Cargill Inc and Bunge Ltd are also aiming for higher-margin businesses in corn and other crops. Cargill last August opened an expanded food and beverage ingredient research and development facility in Minnesota.


Today, half of ADM's research dollars go into finding ways to make food and drinks taste better. Some of its initial forays - such as Fibersol, an odorless, tasteless soluble fiber that helps dieters feel fuller - are slowly gaining traction among the food industry.

But it is still seeking the next killer application to transform the market, as ethanol or HFCS did. It hopes to find "Rare Sugar," the proposed name for "the holy grail of sweeteners" with all the taste and baking ability of sugar but without the calories.

ADM said is has increased research in low-calorie sweeteners since 2010 when it hired a sweetener development expert to lead the effort but would not provide details.

More niche products would help ADM deliver more consistent returns by reducing exposure to oil markets through reliance on a gasoline-blending component.

In 2008, ADM posted a record quarterly profit after oil roared to an all-time high but turned in its worst performance in five years two quarters later after oil plummeted.

Whether the strategy is working is unclear. Analysts say the corn unit's 46-percent profit surge last year was at least partly due to plentiful cheap grain.

Either way, Cuddy is confident.

"Our customers rely on us so we can't pull in and out of markets to huge degrees. But with the amount of flex we have, given our size, it doesn't take much to influence our bottom line."

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Monsanto’s royalties under fire

Monsanto’s royalties under fire | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |
By Fermín Koop(Herald Staff) - Farmers complain about inspections of the US firm to collect royalty payments
The national government decided to step into a long-term battle between farmers and Monsanto over royalties the United States company collects for genetically modified soybeans.
Through a decree set to be published soon, the government will ban grain handlers from collecting such royalties after the harvest on behalf of seed developers like Monsanto.
While they await for the government’s decree, farmers welcomed the upcoming amendments but remained cautious over the details. For their part, social and environmental organizations complained that the regulation changes won’t be done by law. Monsanto said many key issues of the decree still remain unclear.
Farmers have recently concluded their first growing season using Monsanto’s Intacta soy, developed for Argentina to combat insects and withstand glyphosate. The company offered farmers to pay the royalties when purchasing the seed, an option chosen by 70 percent of them, or when handing over the grain to be exported, an option now set to be eliminated by the decree.
Complaints of farmers, exporters and grain handlers have piled up due to a clause included by Monsanto in the grain purchase contracts, allowing it to inspect shipments and to analyze if grains contain their Intacta technology. If found, agricultural producers are forced to pay. The scheme has been described as illegal by farmers, who criticized the US company for exceeding its powers and taking a role that should be carried out by the state.
“Monsanto wants to impose a highly-illegal system. It has no authorization to inspect the shipments and to ask for third parties to collect money for supposed royalties,” Daniel Pelegrina, Argentine Rural Society (SRA) vice-president, told the Herald. “Producers are pressured by the company to sign complex contracts that they don’t actually understand. It’s all part of Monsanto’s methodology.”
About US$15 dollars per ton are charged to farmers if the technology is found. The inspection is carried out by exporters such as Cargill, Bunge, Dreyfus, Vicentín and ADM-Toepfer, acting in representation of Monsanto. Firms have agreed to do it in order to avoid having problems when handing over the grains, after the many cargo ships that have been stopped by Monsanto in Europe over the last few years in order to collect royalties.
“Monsanto started asking exporters to check the grains with an analysis kit provided by them. If the technology is detected, farmers have to pay for the whole content of the truck, even if only some of the grains has their patent,” Jorge Solmi, second vice-president of the FAA Small-Farmers Federation, told the Herald. “Monsanto’s rights end when they sell the seed. After that, it belongs to the farmer.”
Monsanto has more than 16,000 biotechnology patents and provides seeds that are planted in more than 150 million hectares around the world. Almost all the seeds of genetically modified soy in Argentina are sold by the US company, which account for 50 percent of the total grain production of the country. The company also sells glyphosate under the trade name Roundup, the world’s most widely used herbicide, which has been labelled as potentially carcinogenic by the World Health Organization (WHO).
Fernando Giannoni, Monsanto’s Corporate Affairs head, told the Herald that all farmers were aware of the business model behind the Intacta soy before it started to be sold in 2013. Not even a single complaint was filed against the company because of Intacta, Giannoni said, linking the claim with the Liaison Board, which gathers together the country’s top farm lobbies.
“The scheme was discussed with everybody. We have contracts signed with more than 10,000 farmers in which they have accepted our business model. Claims are politically motivated,” Giannoni said.
“The government’s intentions with the decree are positive but many key aspects of it still remain unclear. Business chambers weren’t asked before the amendments were announced. If they are not implemented properly, it will be something negative.”
A new record
The decree will change some articles of the Seed Law, approved in 1973 when agricultural biotechnology didn’t exist. Not only farmers will have to pay for royalties when purchasing the seed, but they will also be included in a record if they choose to keep part of the harvest for themselves to use it in the future, a common methodology authorized by law but not regulated. The record will try to fight illegal marketing of seeds, a long-term claim of Monsanto and other companies.
Repeated efforts to contact authorities from the Agriculture Ministry were unsuccessful.
At the same time, the government will create a trust fund to promote biotechnology in the country. The funds will come only from large farmers, excluding small- and medium-sized agricultural producers. Even though it remains unclear how the government will define each type of farmer. Estimations indicate that about 2,000 large farmers — who represent 80 percent of the soy production in the country — would have to pay.
“Small and medium-sized farmers are concerned about how the government will set the categories to establish who will end up paying. It has to be a flexible scheme with different terms for each region,” María Marta Di Paola, researcher at the Environment and Natural Resources Foundation (FARN), told the Herald.
“It’s surprising not only that the government decides to do this now, when claims have been going on for a long time, but also that it will be done through a decree and not a law.”
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Will the corn upside opportunity come later in the game?

Corn exports remain stronger than many inside the trade had anticipated, despite the strength in the U.S. dollar. Just keep in mind, we will still more than likely export about 5% less corn than we did last year. Corn used for ethanol is hanging in there but might have a tough time reaching the USDA's current marketing year goals. A lot will obviously depend on the industry's ability to export more ethanol and DDGs. I still believe corn used for feed is also a bit high and will need to be tapered back to account for the bird-flu complications. From my perspective, even though overall U.S. demand might be a touch overstated, I don't see "demand" being the major issue or concern weighing on the trade right now.

The bigger concern is that U.S. production could push towards 14.0 billion bushels and ending stocks over 2.0 billions bushels, especially if planted corn acres move closer to 90 million. The bears are arguing that based on the current soil moisture levels and longer-term forecast, the USDA's 166.8-bushel yield estimate may already be too conservative. In fact, if June moisture proves adequate, which as of right now looks to be the case, I suspect we see the USDA move the yield number higher. I personally think it's still too early to make a call on July weather and overall harvest conditions. If some of the forecasters are right on their longer-term projections, we might eventually hear more talk of potential late-season complications associated with too much rainfall and flooding.

As a producer I still want to keep hedges in place, because I'm worried that the early consensus amongst the trade is that we are off to a wonderful start and soil moisture levels throughout the corn belt are rapidly recharging. Many analyst are actually looking for 75% to 80% of the U.S. corn crop to be rated good to excellent by the USDA when we return on Tuesday. If you are wondering, the highest modern day initial rating of the U.S. corn crop was set back in 2007 when 78% was rated good/excellent. 

Bottom line: The crop looks as if its in great shape. I see no reason to stand in front of these bearish arguments, they are simply too tough to debate. The upside opportunity looks as if it will have to come later in the game. As we all know,"it's not how you start the race, but how finish." From a technical perspective there's still heavy resistance in the Dec15 contract between $3.90 and $3.95. On the downside, the bears are thinking new-crop prices may test the $3.40 area during the month of June. Stay patient!  

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All the Loonie Bulls Disappeared in Just One Week - Here’s Why

All the Loonie Bulls Disappeared in Just One Week - Here’s Why | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |

The optimism that propelled Canada’s dollar over the last three months to the biggest rally among Group of 10 currencies seems to have taken about a week to disappear.

The currency weakened to the lowest in a month on Friday, capping the first weekly decline versus its U.S. counterpart since the five days ended April 10. The 2.2 percent slump was the biggest weekly drop since January.

The sudden reversal comes as a rebound in prices for crude oil, Canada’s largest export, slowed, and a report Friday showed consumer prices fell in April even as signs of inflation picked up in the U.S. Traders are downgrading expectations that Bank of Canada Governor Stephen Poloz will be able to maintain the optimism he’s adopted in recent weeks. The central bank’s next monetary policy meeting is Wednesday.

“What’s changed is you’re starting to see the data go the other way,” David Doyle, a strategist at Macquarie Capital Markets in Toronto, said Friday. “The action we’re seeing this week suggests it might be time to put back on positions that benefit from a weaker Canadian dollar.”

In the often upside-down logic of financial markets, speculators turning bullish on the currency for the first time in eight months, may be the signal prompting traders to do just that.

Futures data for the most recent week, released Friday, showed that hedge funds and large speculators went from betting on Canadian dollar losses to favoring gains. That suggests that so-called short positions were squeezed from the market during the recent rally, meaning there’s now space for the market to swing the other way, build out its bearish bets once more, and drive the currency lower again in the process.

Shorts Squeezed

The loonie, named for the image of the aquatic bird on the C$1 coin, fell to C$1.2583 to the greenback on Friday in Toronto. It reached C$1.19 percent on May 14, the strongest level since Jan. 15.

In January traders turned pessimistic on the loonie after the Bank of Canada cut its benchmark interest rate, calling the move insurance against crude oil’s almost 50 percent collapse. That prompted bets on another rate cut, which were erased after the bank’s April rate decision, where Poloz said there wasn’t any need to cut rates a second time this year.

Growth Forecasts

While the bank cut its forecast for first quarter growth to zero, the second quarter projection was increased to 1.8 percent, and the following quarter’s forecast to 2.8 percent.

That’s still more optimistic than the median among 24 economists, which see 1.6 percent growth this quarter and 2.1 percent the next, according to the latest Bloomberg survey, conducted between May 8 to May 13.

One of the economists saying the Bank of Canada may have to change its tone is Thomas Costerg of Standard Chartered Bank, who sees the economy contracting in the current quarter.

“The BoC seems to be optimistic about the outlook even with recent mixed data,” Costerg said by phone from New York. “Our view still differs.”

Non-commodity exports -- which the central bank is depending on to drive economic growth in a world of lower oil prices -- are still sluggish and the signs of recovery the Bank of Canada has highlighted are misleading, he said.

Costerg, who forecast the currency falling to C$1.30 by June, isn’t alone. Toronto-Dominion Bank sees the currency falling to a similar level by year end.

David Tulk, chief macro-strategist at Toronto-Dominion, cites the importance of a weak currency for boosting exports as a chief reason to keep the Bank of Canada cautious.

“You’ll still need a generally weak Canadian dollar and an accommodative central bank to allow manufacturing to reclaim the ground it lost since 2008,” Tulk said by phone from Toronto. “The Bank of Canada will err on the side of caution.”

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Is Monsanto Company Underpriced? (NYSE:MON) - Stock Markets Daily

Is Monsanto Company Underpriced? (NYSE:MON) - Stock Markets Daily | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |
We look at Monsanto Company (NYSE:MON) a company in the Basic Materials industry which lately stock market players have been interested in, to assess if it provides value for investors considering buying or selling it. Currently Monsanto Company is trading at $120.29 after moving up 0.24% in the previous day of trading. [Trend Analysis] MON isMore
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Ouest Canadien : Le gel et la neige contrarient les semis du printemps

Le gel et la neige contrarient les semis du printemps

par Richard  Kamchen

Une grande partie des Prairies a subi des épisodes de gel durant la longue fin de semaine de mai, et certaines régions ont même reçu de la neige.

« La région qui suscite le plus de préoccupations est le Sud des Prairies, et on craint particulièrement pour le canola », souligne Bruce Burnett, directeur des services météorologiques et d'analyse de marchés de la CWB (Commission canadienne du blé).

Des cultures comme le blé et les pois sont très résistantes, mais le canola est sensible aux températures fraîches. Toutefois, il reste du temps pour ressemer et les superficies de canola endommagées seront très probablement ensemencées à nouveau en canola, indique M. Burnett.

En Alberta, les conditions sont très sèches jusqu'ici, mais les parties sud de la province, en particulier la région de Lethbridge, ont reçu des pluies salutaires au cours de la dernière semaine. Toutefois, les quantités n'étaient que de cinq ou six millimètres dans la plupart des cas, mais certaines régions isolées ont reçu jusqu'à 12 millimètres.

Durant la semaine qui s'est terminée le 12 mai, les régions du Nord et de la rivière de la Paix ont reçu de la neige, mais les quantités n'ont été suffisantes que pour préserver les conditions d'humidité de surface.

Les précipitations reçues en Alberta et en Saskatchewan ont été négligeables par rapport à celles qui ont touché le Manitoba.

La province a reçu des averses de pluie et de neige au cours de la longue fin de semaine; le Centre et l'Est du Manitoba ont reçu certaines des quantités les plus abondantes, variant entre 35 et 50 millimètres.

La vallée de la rivière Rouge, le Centre-Sud du Manitoba et l'Est du Manitoba étaient les régions les plus sèches de la province avant ces précipitations.

Pam de Rocquigny du ministère de l'Agriculture du Manitoba souligne que des précipitations excessives sont tombées dans certaines parties du sud et du sud-ouest de la province au cours de la dernière semaine (jusqu'à 100 millimètres), ce qui a entraîné la formation de flaques d'eau stagnante dans les champs. Les dommages dépendront de l'état d'avancement des cultures et de la persistance de ces flaques.

« Dans les régions qui ont reçu des précipitations considérables, et dans celles où l'ensemencement était déjà effectué, des dommages aux cultures sont à prévoir, et il est probable que des cultures périssent dans les terres basses des champs où il y a eu accumulation d'eau », ajoute Mme de Rocquigny.

Des épisodes de gel ont été signalés au cours des dernières semaines, et le mercure est descendu jusqu'à -6 °C en fin de semaine dernière dans certaines régions.

Des cultures comme les céréales, le blé d'hiver et le maïs résistent assez bien au gel parce que leur point végétatif se situe sous la surface du sol, ce qui les protège du froid. Heureusement, peu de cultures sensibles au gel comme le canola, le lin, le soja et les pois comestibles avaient levé.

« Les producteurs n'ont pas encore semé ces types de cultures, ou, s'ils les ont semées, les conditions ont été si froides que la levée est très lente », mentionne Mme de Rocquigny.

Malgré toute cette pluie et cette neige, les semis ont continué de progresser à l'échelle de la province au cours de la dernière semaine. En date du 19 mai, ils étaient effectués à 72 % par rapport à 55 % la semaine précédente.

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China will likely import a record 77 MMT of soybeans in 2015-16, according to the China National Grain and Oils Information Centre. This would be an increase of 5.5 percent from 2014-15 and is slightly below USDA’s estimate last week that the country would import 77.5 MMT of soybeans.

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wheat futures - wheat futures race towards long US weekend

There was an extra twist for agricultural commodity traders to consider on Friday, and that is the prospect of a long weekend in the US (and the UK for that matter).

Monday brings the US Memorial Day holiday, in remembrance of those who died while serving in the country's armed forces.

For ag investors, it has added significance in that it is seen as bringing the start of the summer grilling season, and with it demand for barbecue cuts, a trend already reflected in a spring revival in Chicago cattle and hog futures.

And the simple fact of there being an extra day without being able to trade is a factor for grain investors, given that the market has entered something of a weather market, when every change in the forecast can bring big price moves.

Dollar falls

That might be expected in wheat, given somewhat recovering prices of late, to bring some downward movement in futures, as investors take some profits on long positions, rather than risk a change in the weather forecast over the weekend eroding those gains.

But the twist this time is that hedge funds likely retain large net short positions in Chicago and Kansas City futures and options, given the huge extent they had even last week.

Might investors with shorts finally be tempted to throw in the towel, with July wheat futures in both exchanges given the extra positive technical signal of having closed the last session above their respective 100-day moving averages?

It was an extra help for bulls in early deals that the dollar eased 0.4% against a basket of currencies, amid expectations that recent weak US economic data imply that the Federal Reserve will not likely to start raising interest rates from record lows until sometime in the autumn, or later.

A weaker dollar improves the affordability of dollar-denominated exports, such as many agricultural commodities, for buyers in other currencies.

'Sell only reluctantly'

But of course the bulls' strongest card for now is the continuation of weather worries, largely, but not limited to, the US southern Plains, where harvest time is approaching with wet weather which will play havoc with mature-ish crops.

"Weather forecasters continue to expect more rain, and so few opportunities for saturated soils to dry, over the next week or so in US hard red winter wheat regions," said Tobin Gorey at Commonwealth Bank of Australia.

"The trade will consequently continue to worry about wheat availability – and so sell only reluctantly – despite inventories being comfortable."

He flagged the growing premium of Kansas City-traded hard red winter wheat, as grown in the southern Plains, to Chicago-traded soft red winter wheat, which at $0.35 a bushel as of last night is "double what it was in mid-April", although still below the $0.50 a bushel touched in early April.

At Futures International, Terry Reilly said that "frequent rain will impact the US Plains for next 10 days which will affect wheat quality and disease expansion".

'We aren't concerned'

Still, this is not the only weather concern which has warranted the reinjection of risk premium into prices, with worries about dryness in Canada and southern Russia alive too, although with some commentators urging caution about getting overexcited on these themes.

"The concerns about western Canada and southern Russia merit some attention, but are premature at this point," said Brian Henry at Benson Quinn Commodities. 

"Excluding western Saskatchewan and Alberta, conditions in the north look ideal for early development."

At RJ O'Brien, Richard Feltes said that "we aren't concerned about either area short term - Russia is coming off a wet April, while Saskatchewan soil moisture is only 22% short".

Indian purchase

Nonetheless, there were some other factors for grain investors to consider too, including talk of Indian wheat purchases, after the country's rain damaged harvest, and indicating potentially a fresh source of import demand.

"India has apparently bought 200,000-300,000 tonnes of Aussie wheat for May-July shipment," Benson Quinn's Brian Henry said.

"Having dealt with a wet harvest, India continues to show interest in securing global supplies."

Chicago wheat for July stood up 1.1% at $5.27 ½ a bushel as of 09:40 UK time (03:40 Chicago time), while Kansas City wheat for July was 1.0% higher at $5.63 ½ a bushel.

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China's shift to consumer-led growth drives jump in gasoline demand

China's shift to consumer-led growth drives jump in gasoline demand | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |

China's shift to consumer-led growth is accelerating demand for gasoline in the world's biggest energy user, with the fuel on track to challenge the dominance of diesel as an increasing number of middle class consumers buy bigger family cars.

Diesel production is still forecast to be some 14 percent higher than gasoline this year, but the gap is on course to halve in five years and then disappear in the next decade, according to calculations based on data from consultancy Wood Mackenzie.

The importance of diesel and gasoline varies globally, largely due to the usage in cars and industry. Most cars in China use gasoline, a similar picture to North America where almost 90 percent of private vehicles run on gasoline, while in Europe more than half of new cars are diesel powered. 

The relative change in the fortunes of diesel and gasoline in China will require billions of dollars to be invested in new refineries or conversions to meet the shift in demand. 

"The gap between these two fuels in terms of their volumes will be narrowed further, since gasoline will likely grow at a faster pace than diesel over the next five to 10 years," said Wood Mackenzie's principal China downstream consultant Fu Feng, highlighting a shift away from investment-led growth.

Chinese investment growth fell to the lowest in nearly 15 years, data in April showed.

A drop in investment in smokestack industries that policy makers are encouraging will impact diesel demand most as trucks, machinery and heavy equipment are all big users of the fuel. 

While slower economic growth is hitting overall car sales, gasoline demand has benefited from faster sales of sport utility vehicles with bigger engines that consume more fuel.

Retail sales of SUVs soared more than a third last year to 3.82 million, and have more than doubled since 2012, according to the China Passenger Car Association (CPCA).

China's gasoline demand is expected to grow by 8 percent in 2015, compared with growth of less than 1 percent for diesel, Wood Mackenzie's Feng said. 

For 2016 to 2020, annual demand growth for gasoline is seen at 5.5 percent, versus 1.7 percent for diesel, he said. 


Chinese refiners, which just four years ago were scrambling to crank up diesel output to ease shortages, had to change tack in 2014 by expanding gasoline output at the expense of diesel.

"I think the refiners were also surprised at how much better gasoline has performed compared to diesel in the last six months due in part to falling retail pump prices," said an industry source who tracks fuel flows. 

About 35 percent, or 3.6 million barrels per day (bpd), of the output of refineries in China is now diesel, down from 45 percent a few years ago, according to refining sources.

On the other hand, gasoline output is now 2.7 million bpd, or 26.3 percent of total output, up from 22.3 percent in 2012, separate data from Wood Mackenzie showed. 

The consulting firm said gasoline supplies will rise on average by about 160,000 bpd a year for the next five years, while diesel is forecast to increase 90,000 bpd, 

Over the next few years, there will likely be more emphasis on investments in refining geared towards processing more gasoline, said Kang Wu, Beijing-based vice chairman of FGE Asia. 

The energy consultancy estimates that diesel production in China is on track to drop to only 1.2 times gasoline output by 2020 from 1.4 times last year and 1.7 times in 2012.

China plans to invest in gasoline-producing residue fluid catalytic crackers with a capacity of 450,000 bpd in the next five years, Wood Mackenzie said.

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Some Key Trends in the World Corn Market

Some Key Trends in the World Corn Market | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |
This article is a companion to the March 13, 2015 farmdoc daily article. As with the article on soybeans, objective of this article is to examine strategic consumption and production trends that underlie the current U.S. and world corn market.
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