Your new post is loading...
Your new post is loading...
Aug 22, 2014 - Pro Farmer tour
Pro Farmer tour sees C yield 169.3, 1.9 bu above USDA. S 45.35, almost same as USDA, maybe a bit price friendly?
Aug 22, 2014 - Pro Farmer tour
Pro Farmer tour sees C yield 169.3, 1.9 bu above USDA. S 45.35, almost same as USDA, maybe a bit price friendly?
HDC Forest Location Manager
Buyers of US soft red winter wheat were urged to "pay close attention" to the quality requirements after findings of a "variable" quality crop, including the highest levels of vomitoxin in at least nine years.
Wheat futures in Chicago rose the most in two weeks on speculation that a global grain surplus will be smaller than forecast, after Canada reported a drop in output and rains delayed the U.S. harvest.
Canada, the world’s second-largest exporter, will harvest 26 percent less this year, the government reported yesterday. As much as 6 inches (15 centimeters) of rain forecast in the northern U.S. and parts of Canada through the weekend may cause minor crop losses and delay harvesting, Commodity Weather Group said in an emailed report. The U.S. is the biggest exporter.
“Farmers have been chomping at the bit to get rolling,” Eugene Graner, president of Heartland Investor Services Inc. in Bismarck, North Dakota, said in a telephone interview. “We’re having some issues with a lot of rains. It’s going to be that way all week.”
Wheat futures for December delivery rose 2 percent to $5.665 a bushel at 11:22 a.m. on the Chicago Board of Trade, heading for the biggest gain since Aug. 6. Prices earlier touched $5.6775, the highest since Aug. 15. Futures tumbled 14 percent in the 12 months through yesterday as global production was forecast to climb. Spring-wheat futures on the Minneapolis Grain Exchange gained as much as 2.5 percent to $6.385 a bushel, the highest since Aug. 8.
World wheat production may rise to a record 716.09 million metric tons in the 2014-2015 marketing year, the U.S. Department of Agriculture said Aug. 12.
Canadian production will drop to 27.7 million tons from a record 37.5 million in 2013, Statistics Canada said yesterday. Analysts in a Bloomberg survey expected 29.1 million. As of Aug. 17, farmers had collected 17 percent of the U.S. spring-wheat crop, less than the five-year average of 33 percent for that date, the USDA said. Quality concerns also loom for the crop in Europe after heavy rains.
Soybean futures for November delivery rose 0.4 percent to $10.4225 a bushel on the CBOT. Corn futures for delivery in December increased 0.7 percent to $3.715 a bushel.
CHINA - Looking at the size of the breakdown of the inventory for June, 2014, the information from the Chinese Ministry of Agriculture indicates a 428.18 million on-farm inventory and a 45.94 million sow herd. writes Ron Lane, Senior Consultant for Genesus China.
The 428.18 million on farm inventory is up 0.2 per cent from last month and down 4.8 per cent from June, 2013.
The sow herd is down 1.0 per cent from last month and is down 8.2 per cent from one year ago (June, 2013). Again in June, another 464,000 sows plus another 470,000 sows in May along with the 1.05 million sows from April were eliminated during the past three months. The current sow inventory is the lowest level in four years.
It is expected that there will be more sows lost in July. (July, 2014 report has just been released- farm inventory (429.46 million is up 0.3 per cent from June and down 5.4 per cent from July, 2013.
The sow herd is down 1.2 per cent from last month (now at 45.39 million sows) and is down 9.1 per cent from one year ago (July, 2013). Another 550,000 sows went to market in July, 2014. The 9.1 per cent loss in sow numbers is about 4.1 million sows-maybe about two-thirds (2/3s) of the total number of sows in the USA-number two in the world for sow numbers.
Hog production capacity has significantly been adjusted with the main cause being the loss of farm households. Despite the recent recovery of the market price for live pigs, several farm households are still in financial difficulty.
MOA states that since the peak high of November 2013, the on farm inventory has dropped 8.1 per cent or about 35.5 million pigs… more than Canada’s total production for one year. Factors such as disease, cold weather and/or home consumption (mainly backyard farms) for Spring Festival, have all affected the total on farm inventory. Recently, the low prices have been sending sows to market as small farmers are lowering the sow herd size or are totally quitting the business.
The large sell off of sows for the past 11 months will cause a shortage of market pigs by the end of this year and thus a large increase in market pig and pork prices. This could have a large effect on the Consumer Price Index-something the national government does not like to see happen.
Releasing national government frozen pork stock reserves will only soften the price increase over a short period of time. Low market pig numbers means higher prices and higher CPI.
The Consumer Price Index (CPI) continues to be quite interesting for the national government.
Previously, when the pork prices were gaining, this rapid increase in pork, gained the attention of the national government as it greatly affects the CPI. The CPI is made up of about 30 per cent food found in the consumers’ basket. Pork is estimated to be about 1/3 of the food portion of the basket or in other words, about 10 per cent of CPI as a whole. CPI increased to 102.30 Index Points in June (2.3 per cent) down by 0.2 per cent from May (102.50 index points in May and 101.80 Index Points in April).
For the first six months of 2014, the CPI has averaged 2.3 per cent. The price of pork in China fell 7.2 per cent, contributing to a decline in the April CPI. As the prices increased in May, the CPI increased by 0.7 per cent.
Currently, the pork prices are keeping the CPI lower, but a substantial increase, likely towards the end of this year, will cause national government concern. As a measure, when pig prices increase, CPI should increase.
Profit margins are still showing losses from last month (still substantial losses). Recently, the farrow to finish farm was losing 177 RMB/ market pig ($ 28.80 USD/market pig) for an average for the month of June On 28 May, the farrow to finish farm was losing 84 to 90 RMB/head ($13.67 to $14.64 USD/market pig) and on 11 April, a farrow to finish operation was losing 357 RMB/head ($ 58.09 US/ market pig).
Some analysts calculate that the loss for some newer, more financially leveraged farms is even higher. Compared to 15 January, it was reported that profits for a farrow to finish operation was 49.06 RMB/market pig ($ 7.98 USD/market pig).
The group also revealed a 31% drop to 232,000 tonnes in volumes from its farming operations, which stretch from Australia to the former Soviet Union, but failed to comment on the decline.
Costa Rica, where plantations are recovering from coffee rust, forecast a 4.5% rise to 1.56m bags in its production in 2014-15.
Aug 22, 2014 -A.M. Comment
The Canadian dollar traded at an almost four-month low after a government report showed the inflation rate slowed for the first time in five months in July.
The currency has weakened this week versus its U.S. counterpart amid speculation the Federal Reserve is moving closer to increasing interest rates next year than the Bank of Canada. The consumer price index rose 2.1 percent in July from a year ago following June’s 2.4 percent pace, Statistics Canada said today. Economists surveyed by Bloomberg News forecast a 2.2 percent pace, according to the median of 20 responses.
“Initially we had a weakening in the Canadian dollar as everyone’s eyes went to CPI, which was softer than expected, so that provides some more leeway for the Bank of Canada to maintain its neutral tone,” said Camilla Sutton, head of currency strategy at Bank of Nova Scotia, by telephone from Toronto.
The loonie, as the Canadian dollar is known for the image of the aquatic bird on the C$1 coin, fell less than 0.1 percent to C$1.0945 per U.S. dollar, at 9:09 a.m. in Toronto. The currency weakened to as low as C$1.0980, approaching the low of C1.0986 reached on Aug. 6, the least since May.
Bank of Canada Governor Stephen Poloz, who has kept the central bank’s benchmark rate on overnight loans between commercial banks unchanged at 1 percent since taking the post last year, has been saying that quickening inflation in recent months was caused by one-time gains in energy and import prices, not changes in economic fundamentals, hinting it’s not a concern for policy makers. Canada’s inflation rate had been accelerating since touching a 2014 low of 1.1 percent in February.Rate Speculation
Canadian retail sales rose 1.1 percent in June, a gain that exceeded all economist forecasts, a separate report showed. Sales increased to C$42.6 billion ($38.9 billion), Statistics Canada said. Economists forecast a 0.3 percent gain.
The central bank remained neutral last month on whether the next interest-rate move will be up or down. It has kept borrowing costs unchanged since 2010 to support the economy. Policy makers’ monetary-policy report cut the forecasts they made in April for Canada’s growth this year to 2.2 percent from 2.3 percent.
The Canadian dollar slumped in March to C$1.1279, the weakest level since July 2009, after Poloz said he couldn’t rule out a rate cut to head off the risk that low inflation would slip into deflation. It rebounded as consumer prices increased, reaching C
Corn futures rose in Chicago on speculation that yields will be in line with government estimates in the U.S., the world’s biggest grower.
Yields in eastern Iowa and southern Minnesota have fallen from 2013, preliminary samples taken today on the Pro Farmer Midwest Crop Tour show. National yields probably won’t top 170 bushels an acre, within market expectations, Societe Generale analyst Christopher Narayanan said yesterday on the tour. The U.S. Department of Agriculture estimated yields at 167.4 on Aug. 12.
“The big question I think is whether or not the crop is appreciably bigger than the USDA forecast last week,” Bryce Knorr, a Chicago-based senior grain market analyst for Farm Futures magazine, said in a telephone interview. “The dry area of eastern Iowa hasn’t picked up any rain out of this week’s storms. We really have just gotten stuck in a consolidation pattern.”
Corn futures for December delivery rose 0.3 percent to $3.685 a bushel at 11:34 a.m. on the Chicago Board of Trade. Trading was 24 percent above the 100-day average for this time of day, data compiled by Bloomberg show.
Soybean futures for November delivery rose 0.5 percent to $10.4275 a bushel.
Wheat futures for December delivery climbed 1.2 percent to $5.565 a bushel.
* China stepping up checks on U.S. sorghum cargoes -traders
* Could slash imports of the corn-substitute
* Has already rejected more than 1 mln T of U.S. corn
By Niu Shuping and Dominique Patton
BEIJING, Aug 21 (Reuters) - Chinese authorities are stepping up checks on U.S. cargoes of sorghum, traders said, potentially curbing shipments from the world's largest exporter of the corn-substitute.
Four traders with direct knowledge of the matter said the country's quarantine office last month asked local authorities to tighten checks of sorghum and barley, looking for impurities such as pesticide residues and heavy metals.
A quarantine bureau spokesman declined to make immediate comment.
The move comes after China has already rejected more than 1 million tonnes of U.S. corn due to the presence of genetically modified strain that has not been approved by Beijing.
Chinese feed mills have increasingly been turning to U.S. sorghum as a cheap substitute for domestic corn <0#DCC:>, which has seen prices inflated as Beijing supports the country's rural population.
"There are worries in the market, which should reduce imports of sorghum in later months," said Zhang Yan, an analyst at Shanghai JC Intelligence Co. Ltd (JCI).
JCI cut its forecast for sorghum imports to 1.6 million tonnes for the 2014/15 marketing year, down from 3.9 million tonnes predicted earlier.
China is the world's largest importer of U.S. sorghum, with its feed mills buying almost all their sorghum from the country.
"Shipments already booked or on the way to China may have no problem, but bookings after the notice may face trouble," said another industry source, who declined to be named as he is not authorised to speak with media.
"Some of the major buyers have already been informed of strict checks," said the source.
Sorghum is traditionally used to make alcohol in China but use in animal feed surged last year as the industry sought to diversify ingredient supplies and replace expensive domestic corn.
Some big buyers contacted by Reuters said they were adopting a 'wait-and-see' approach to any further sorghum purchases.
"It is still unclear if quarantine authorities are testing every shipment. They could really make things go crazy as they did for DDGS," said a trader with a large buyer in south China.
China has stopped issuing import permits and demands certification that imported distillers' grains (DDGs), a by-product of corn-based ethanol, do not contain the MIR 162 GMO strain.
Another large buyer in the southern province of Guangdong said it had stopped placing new orders but declined to say why.
China's quarantine authority has also asked ports to step up screening of alfalfa imports this month after cargoes of hay from three U.S. suppliers were found to contain unapproved GMO varieties, according to a notice on a government website.
U.S. alfalfa imports have seen rapid growth in recent years to meet demand from China's fast expanding dairy herd.
McCain Foods a annoncé, plus tôt en août, la fermeture d'une usine de patates frites à l'Île-du-Prince-Édouard à la fin octobre, une décision qui entraînera la perte de 121 emplois.
Aug 22, 2014 - Closing Comment
Dec C 3.72 +3 Nov S 10.43 +5 Sep W 5.51 +5. For the week, new CSW -5-8-1. Hotter weather coming finally. CD +3, 91.33 -.41 for the week. Click link to see crude oil chart, down 13% in 2 months.
HDC Forest Location Manager
A smaller Canadian canola crop signals that the oilseed’s premium to U.S. soybeans is poised to widen, according to Wild Oats Grain Market Advisory.
Canola futures for November settlement yesterday settled at a premium near C$2.25 ($2.06) a metric ton above soybeans for the same delivery month. The spread may widen to C$10 as early as December, John Duvenaud, publisher of Wild Oats Grain Market Advisory in Winnipeg, Manitoba, said in an e-mail.
Production in Canada, the world’s largest canola grower, is set to drop 23 percent to 13.9 million tons, the government said yesterday. U.S. farmers will harvest a record 3.816 billion bushels of soybeans this year, the Department of Agriculture said Aug. 12. In 2014, canola futures slid 6.7 percent through yesterday on ICE Futures Canada, while soybeans traded in Chicago tumbled 20 percent.
“There’s just not enough supply now to maintain the level of exports we had along with the domestic crush” for canola, Duvenaud said on a conference call with reporters yesterday. “The domestic crush is not going to slow down, so the exports are going to have to slow down.”
Oilseed processors crush canola and soybeans to make cooking oil and animal feed.
The ripening corn and soybean fields stretch for miles in every direction from Dennis Wentworth’s farm in Downs, Illinois. As he marveled at his best-yielding crops ever, he wondered aloud where the heck he’ll put it all.
“Logistics are going to be a huge problem for everyone,” the 62-year-old grower said, adding that he has invested in boosting output rather than grain bins. When harvesting starts in a few weeks, Wentworth expects his 150-year-old family farm to produce 10 percent more than last year’s record. “There are going to be some big piles of grain on the ground this fall.”
From Ohio to Nebraska, thousands of field inspections this week during the Pro Farmer Midwest Crop Tour show corn output in the U.S., the world’s top producer, could be 1 percent more than a government estimate and soybeans 1.2 percent higher, according to a Bloomberg survey of crop scouts. Months of timely rains and mild weather created ideal growing conditions, leaving ears with more kernels than normal on 10-foot (3-meter) corn stalks and more seed pods on dark, green soy plants.
Prospects of bumper harvests sent Chicago futures tumbling into bear markets last month, two years after a drought eroded output and sparked the highest prices ever. Cheaper grain is bolstering profit for buyers including Tyson Foods Inc. and Archer-Daniels-Midland Co. (ADM), encouraging some cattle producers in the Great Plains to expand herds, and eroding income for farmers who say increased output will make up for some of the slump.
Corn grows in a field outside of Wyanet, Illinois. In Illinois, where the U.S.... Read More
Corn on the Chicago Board of Trade has tumbled 20 percent since the end of May, touching $3.72 a bushel today, and soybeans are down 30 percent to $10.44 a bushel. The Bloomberg Commodity Index slid 6.2 percent over the same period, while the MSCI All-Country World Index of equities rose 1.8 percent. The Bloomberg Treasury Index gained about 0.6 percent.
Samples in Illinois, Ohio, Indiana and Iowa -- representing 45 percent of forecast U.S. corn output and 41 percent of soybeans -- showed bigger yields than last year, according to inspections on the 22nd annual Pro Farmer crop tour, which ended yesterday. Corn production will be 14.178 billion bushels, compared with 14.032 billion estimated by U.S. Department of Agriculture, according to a survey of 13 tour participants. Soybean output was forecast at 3.861 billion bushels, compared with a USDA estimate of 3.816 billion.
The volunteer scouts on the four-day crop tour drove more than 15,000 miles across seven Midwest states, the biggest growing region, taking random samples by counting the number of kernels on corn ears and pods on soybean plants. Editors of the Pro Farmer newsletter will issue final estimates of U.S. output today, partly based on this week’s measurements.Ideal Weather
In Illinois, where the USDA predicted that yields will be 188 bushels an acre on average, the tour estimated 197 bushels an acre, up 16 percent from the same areas surveyed last year. In Iowa, preliminary samples showed 1,107 soybean pods per 3 square feet, up 18 percent from last year.
The outlook has improved after months of ideal weather. Through Aug. 16, the majority of the Midwest was slightly dry to abnormally moist, according to a weekly Crop Moisture Index from the National Oceanic and Atmospheric Administration. Temperatures that have been cooler than normal will remain average or below average through the end of August, the agency forecasts.
The government already predicted record crops on Aug. 12 and a drop in exports that will boost reserves, with corn output rising 0.8 percent and soybean production gaining 16 percent. The USDA will update its forecasts on Sept. 11.Cutting Bets
Prices have plunged to the lowest since 2010, with soybean futures in Chicago dropping to $10.35 on Aug. 20 and corn slipping to $3.58 on Aug. 12. Money managers have cut their bets on a corn rally by 75 percent since early April, and they have had a net-short holding in soybeans for five straight weeks, U.S. Commodity Futures Trading Commission data show.
Surging crop supplies may exacerbate the squeeze on grain storage and shipping. BNSF Railway Co., owned by Warren Buffett’s Berkshire Hathaway Inc. (BRK/B), and Canadian Pacific Railway Ltd. struggled with “greater-than normal” demand from shippers of coal, oil and Midwest crops, the USDA said this month in a report.
Combined with inventories left from the 2013 harvest, production of all grains and oilseeds will boost 2014 supply to 26.97 billion bushels, USDA data show. That’s more than the 23.4 billion of storage on farms and grain-company silos as of Dec. 1, the government estimated in a Jan. 10 report.Roads, Trains
“I don’t know where it will all go this year,” said Richard Guse, a 54-year-old farmer from Waseca, Minnesota, who owns a 1 million-bushel grain elevator that he expanded in the past year by 275,000 bushels. “We need better roads and faster train shipping to keep the grain moving,” Guse said this week while inspecting fields as part of the Pro Farmer crop tour.
With the main harvest still weeks away, there is still time for crops to be damaged by weather, including an early frost. Parts of eastern and northwestern Iowa, the largest corn-growing areas, had less rain than normal over the past two weeks, QT Weather said in a report yesterday.
Not everyone is seeing better yields. Parts of Nebraska, Iowa and South Dakota had samplings that were less than last year. Ron Lampe’s 2,100 acres in Cumminstown, Iowa, were flooded by 20 inches of rain in late June, forcing him to replant more than 10 percent of his corn fields and damaging some of those that survived.More Rain
Prices already may reflect expectations for a national corn yield of 170 bushels an acre, which would be more than the 167.4 bushels estimated by the USDA earlier this month, said Christopher Narayanan, an analyst at Societe Generale SA in New York who participated in the crop tour.
“I haven’t seen anything or heard anything that might suggest it would be higher,” Narayanan said in an interview yesterday.
For now, there are few risks seen and many farmers are expecting bigger harvests.
More rain is expected through the weekend across the northwestern and eastern Midwest, increasing soil moisture to boost the final stages of soybean growth, Donald Keeney, a meteorologist at MDA Weather Services in Gaithersburg, Maryland, said in an Aug. 20 report. There are no risks yet of frost, Commodity Weather Group said. The weather service yesterday predicted national corn yields will reach 171.5 bushels an acre, 1 percent above a prior estimate.Best Crop Ever
Wentworth, the Illinois grower, said that instead of adding extra grain bins he is relying on forward-contracting to sell his anticipated avalanche of grain to six grain companies including Cargill Inc. and Andersons Inc. (ANDE) It will take about 538 semi-truck loads, each capable of hauling 80,000 pounds of corn and soybeans, to get his anticipated harvest to buyers. He’s been working to lease trucks and hire temporary drivers to help his two part-time employees keep his grain moving.
Cory Ritter, who farms about 2,000 acres with his father near Blue Mound, Illinois, said they planted more corn this year and expects to harvest 250 bushels an acre, at least 15 percent more than he originally anticipated. Some fields may get as much as 280 bushels, with some plants sprouting second ears and kernels heavier and larger than last year, he said.
“My corn has not been under any weather stress for one day,” said Ritter, 33. “The seed popped out of the ground in four days and started growing right away. Cool temperatures helped during pollination, producing big ears, and rains have come at the perfect time all season. It’s my best crop ever
L’heure est loin d’être venue de créer un organisme d’État, comme une société d’aménagement et de développement agricole du Québec (SADAQ), afin d’encadrer la location et l’acquisition de terres agricoles au Québec, même si leur prix ne cesse d’augmenter.
“These guys are buying and selling around 600 million bushels of corn,” Matthews said.
Wheat production in Canada was forecast at 27,704,700 tonnes in 2014, down 26% from a record 37,529,600 tonnes in 2013, Statistics Canada said in its Production of Principal Field Crops report issued Aug. 21.
MOLINE, Ill., Aug. 22, 2014 /PRNewswire/ -- Deere & Company (DE) announced today that it will place approximately 460 employees who work in the company's Waterloo, Iowa operations on indefinite layoff in response to current market demand for its products. Deere said employees were informed today of the layoffs, which are effective October 20th. "Layoffs are never easy because we understand the significant impact this action has on our employees, their families, and the community," said Dave DeVault, factory manager. "We very carefully assess our workforce requirements to ensure we make the best possible decision to respond to various market conditions." When Deere announced third quarter earnings on August 13th, the company said it planned to reduce agricultural equipment production for the balance of the year.Deere has emphasized that the company must match the size of its manufacturing workforce with market demand to remain globally competitive. Deere had hired several hundred manufacturing employees in recent years to meet increased demand for products manufactured in its Midwest U.S. factories.
CNS Canada – Canada’s grain and oilseed production will be much smaller than the record crops of 2013-14, according to survey results Statistics Canada released Thursday — but a lack of reaction in futures markets was seen as a sign that the trade is already looking beyond the report.
“All of the numbers came in at the low end of trade expectations, which is bullish on the surface,” said Mike Jubinville, of ProFarmer Canada.
However, the immediate reaction in the futures market was subdued, with ICE Futures Canada canola contracts only up $1-$2 per tonne and U.S. wheat futures narrowly mixed.
“Wheat, durum, canola, barley, oats, peas, lentils… everything with the exception of flax looks bullish in this report,” said Jubinville.
“It should be friendly,” added Chuck Penner of LeftField Commodity Research on the smaller production numbers, but “everybody is more focussed on the (U.S.) soybean crop and what it will do.”
Penner expected the smaller Canadian crops would likely have more of an impact on basis levels than the futures going forward, with Canadian cash bids for wheat, canola, and oats likely showing some strength relative to their U.S. counterparts, and barley performing strongly relative to corn.
StatsCan pegged Canadian canola production for 2014-15 at 13.91 million tonnes, which compares with the record 17.96 million-tonne crop grown in 2013-14. The number was at the low end of trade estimates, but would be in line with historical averages and the crop grown in 2012-13.
The smaller canola production should see ending stocks tighten for 2014-15, and may also reduce the transportation issues over the upcoming season, said Jubinville.
All-wheat production (including durum) was pegged at 27.7 million tonnes by StatsCan, which was at the low end of trade guesses and nearly 10 million tonnes below the 37.53 million grown the previous year. Of that total, durum was estimated at 4.95 million tonnes, which compares with 6.51 million in 2013.
Oats were estimated at 2.64 million tonnes, from 3.89 million the previous year, while barley was pegged at 7.16 million tonnes, well below the 10.24 million harvested in 2013.
Peas, at 3.56 million tonnes, were down slightly from the 3.85 million-tonne crop the previous year, while lentils were up slightly at 1.93 million tonnes, from 1.88 million.
Flaxseed was another of the few major crops to see increased production on the year, with StatsCan forecasting a 908,100-tonne crop. That compares with 712,300 tonnes in 2013-14.
– Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.
Table: A quick summary of Statistics Canada’s crop production estimates for 2014-15, in millions of tonnes, released Aug. 21, 2014. Pre-report estimates are included for comparison.StatsCanPre-reportFinal2014-15ideas2013-14Durum4.9535.000 – 6.0006.505All wheat27.70427.800 – 29.90037.530Oats2.6392.760 – 3.1003.888Barley7.1647.500 – 8.20010.237Flax0.9080.800 – 0.9000.712Canola13.90813.800 – 15.00017.960
Canadian wheat growers will probably reduce output by 26 percent this year and canola production will also fall, the government’s statistics agency said today.
Wheat production will drop to 27.7 million metric tons from a record 37.5 million in 2013, Statistics Canada said in a report from Ottawa. The average estimate of 10 analysts surveyed by Bloomberg News was 29.1 million. The canola harvest in Canada, the world’s largest grower, will fall 23 percent to 13.9 million tons. Analysts had forecast 14.8 million.
Growers on the prairies said excessive rains in late June were likely to limit harvests, after flooding prompted local governments in Saskatchewan and Manitoba to declare states of emergency. Canadian farmers see output at “more normal levels” in 2014 after record spring-wheat, durum and canola crops last year, Statistics Canada said.
“The report in general is below the trade’s estimates,” David Reimann, a market analyst at Cargill Ltd. in Winnipeg, Manitoba, said in a telephone interview. “It’s a bit supportive to the canola market.”
The report is “mildly bullish” for canola as there may not be enough supplies to maintain the current level of exports and domestic processing, John Duvenaud, the publisher of Wild Oats Grain Market Advisory, said today on a conference call.Limited Rallies
At the same time, any rally in canola prices may be limited by the “landslide” of soybeans expected from the U.S., Reimann said. Output will rise to an all-time high of 3.82 billion bushels this year, the U.S. Department of Agriculture said on Aug. 12.
Canada’s spring-wheat output will drop 27 percent to 20 million tons, while durum will fall 24 percent to 4.95 million tons. Soybean production is expected to increase to 5.9 million tons, surpassing the all-time high of 5.2 million tons a year earlier, the government agency said.
Statistics Canada said it interviewed about 12,850 farmers from July 23 to Aug. 4.
While planting in many parts of Western Canada was delayed this spring by cool weather and excess rain, warmer, drier conditions have helped fields recover, reports from Alberta, Manitoba and Saskatchewan show. More warm weather is needed as crops are 10 days to two weeks behind normal development in many areas in Saskatchewan, Canada’s largest producer of wheat and canola, the province said in an Aug. 14 report.
“The crops in general are average at best,” Wayne Palmer, a senior market analyst with Agri-Trend Marketing in Winnipeg, said in an e-mailed statement before the report. It’s “a total different story this year with crop production.”
Farmers collected record supplies of wheat and canola in 2013 amid higher average yields. Yields are expected to stay above average in 2014 even after the delayed planting and flooding in parts of the prairies, CWB said after a July tour.
Wheat futures on the Minneapolis Grain Exchange slid 2.6 percent this year through yesterday, and canola prices declined 5.7 percent on ICE Futures Canada in Winnipeg.
At Alexander Krupetskov’s one-window cheese store in central Moscow, sales of products from France have tripled in the past two weeks.
Shoppers are stocking up on foods set to become scarce after Russia banned a range of products from the European Union and the U.S. in retaliation for sanctions over Ukraine. The nation of 143 million has been one of the fastest-growing export markets for French cheesemakers as Moscovites acquire a taste for creamy brie, pungent camembert and spicy Roquefort.
“The very foundation of the shop has been cast into major doubt,” said Krupetskov, who has four weeks of inventory left.
French cheese exports to Russia climbed 29 percent to 49.5 million euros ($66 million) last year, beating a 4.4 percent increase in total exports to 3 billion euros. Brie shipments to Russia rose 37 percent, while sales of stronger-tasting Roquefort advanced 13 percent, Eurostat trade data show.
At the Rungis food market outside Paris, a 30-hour drive west of Moscow, Nicolas Medard, deputy director of Thomas Export, says 100,000 rounds of brie headed for Russia are stranded after the ban announced on Aug. 7, with no new destination for now.
“All these cases were for Russia,” Medard says, pulling a tin of Pere Toinou brie from one of 2,000 plastic-wrapped cardboard boxes. “We’ll lose about 120,000 euros.”
Cheeses imported from the European Union, including brie from the President Cheese brand.
Russia’s blacklisting of $9.5 billion of agricultural products and food from the U.S., the EU, Norway, Canada and Australia is likely to accelerate annual inflation to 8 percent in 2015, above a target of 4.5 percent, according to government officials.Specialty Store
Thomas Export may lose about 1.3 million euros in total sales due to Russia’s ban, around 4 percent of the company’s revenue, according to Medard. Sales to Ukraine are also in decline, he said.
In addition to Roquefort, Krupetskov displays French cheeses such as Fol Epi and Saint Agur. At the specialty store, which the cheesemonger says is the first of its kind in Moscow, French varieties accounted for 60 percent of the selection, with the remainder Swiss.
Swiss exporter Intercheese AG said last week it’s been contacted by Russian buyers looking for cheeses they can no longer get from the EU, such as mozzarella, Gouda and Edam.
The EU exported 257,000 tons of cheese to Russia last year, accounting for 33 percent of shipments outside the bloc and 2.6 percent of production. Cheese and curd shipments to Russia had a value of 985 million euros, with the Netherlands, Germany and Lithuania the biggest suppliers.
Dutch dairy producer FrieslandCampina said yesterday it halted production of cheese specifically for the Russian market. The company said it exported about 190 million euros of dairy products to Russia last year, and said the ban is adding to pressure on dairy markets.
While Germany and the Netherlands mostly sell bulk varieties such as yellow Edam to Russia, France and Italy ship higher-value specialty cheeses, said Bart Van Belleghem, managing director of the European Association of Dairy Trade, or Eucolait.
Export prices for French cheese were an average 4.30 euros per kilogram (2.2 pounds) last year, while Italy got 6.39 euros per kilogram, trade data published by Eurostat show. That compared with 3.36 euros a kilogram for Germany, the EU’s biggest cheese exporter.Price Pressure
France and Italy ranked eighth and ninth among EU cheese exporters to Russia last year, meaning “the effects will be felt less harshly than in, say, Lithuania,” Van Belleghem said by telephone from Brussels on Aug. 14. “It could result in some price pressure, but I expect it to be less than for Gouda-type cheeses.”
At Societe Fromagere de la Brie, a cheesemaker in Saint-Simeon in the Brie region southeast of Paris, director Philippe Bobin saw no direct impact on earnings. He was concerned that falling milk prices will hurt the farmers who supply his company, making it tempting to drop dairy for growing grain.
The company, one of the last two artisanal brie makers in the region, makes the traditional variety from raw milk as well as a pasteurized version for exports. Societe Fromagere de la Brie lifted sales 8 percent last year to about 10 million euros.Milk Prices
“The impact of the Russian embargo may be more violent and quicker than we think,” Bobin said. “As of this week, milk prices in the trade are starting to fall. We risk selling our cheeses at a lower price, but recompensed by the lower purchasing price of the raw material.”
The average milk price paid by 13 French dairies in August was 38.154 euro cents a liter, compared with an average base price of 38.021 euro cents in July for 19 dairies, according to data published online by milk producers.
Russia may have trouble finding a cheese supplier to replace Europe, Van Belleghem said. The country was 51 percent self-sufficient in cheese last year, while imports from the EU accounted for 29 percent of supply and Belarus supplied 12 percent, according to data from the European Commission.
“For milk powder and butter, I don’t expect any problems, there’s sufficient availability,” Van Belleghem said. “For cheese from Europe, there aren’t too many alternatives.”