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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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Deere rates good growing weather as its top threat

Deere rates good growing weather as its top threat | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |

Deere & Co rated good crop-growing weather as the biggest threat to its prospects as the farm machinery giant highlighted the threat posed by weaker crop prices – for which it cut forecasts to levels well below official estimates.

Tony Huegel, the John Deere-maker's director of investor relations, said that the "biggest downside risk" to the group's forecasts, which factor in a 40% slump in earnings, "would be that we have incredibly positive weather again".

It was weather Mr Huegel termed as "above normal" this year which, in boosting supplies, had undermined crop prices, and farmers' enthusiasm for splashing out on new machinery.

Farmers' cash receipts are "the best indicator of sales" in Canada and the US, with takings from crops - "which have come down quite a bit recently" - a signal to the market for the big machines used particularly by arable growers.

Corn sowings

Even a return to "normal" weather - and a return to trend yields – would be sufficient to see "a drawdown in US corn carryover" at the end of 2014-15, Mr Huegel said.

"Demand would outpace production," he told investors.

The estimate assumes demand staying at this year's levels, and US corn sowings remaining at this year's levels of some 91m acres.

In fact, "as you are probably aware, most analysts now expect US corn farmers to reduce acreage somewhat next year.

"So if you assume smaller acreage, [a] trend yield would be very supportive of both corn prices and would likely boost cash receipts.

Third time lucky?

The comments - which follow an outline estimate from the US Congressional Budget Office that US corn sowings will fall some 900,000 acres to 90.0m acres - came as Deere discussed quarterly results which received a somewhat cool response, sending shares in the group down 0.9% to $86.99.

While Deere reports a smaller-than-expected profits drop for the August-to-October period, its forecast of earnings of about $1.9bn for the year which started this month was well below Wall Street expectations of a $2.2bn result.

However, Mr Huegel cautioned over expectations of the downturn lasting into 2016, with steep sales declines typically lasting for only two successive years.

"In fact there's only really one period if you look back from 1965 forward where we saw three sequential years of lower sales," he said.

"And even in that scenario… one of those years I think was less than 1% down."

Crop price downgrades

The bank also cut its forecast for crop prices in 2014-15, in some cases to levels below those the US Department of Agriculture - significantly so in the case of soybeans, which it saw averaging $9.25 a bushel over the season, down $1.00 a bushel from its previous forecast, in August.

The USDA sees farmgate prices averaging $9.00-11.00 a bushel, while spot soybean futures closed at $10.47 a bushel in Chicago on Thursday.

For corn, Deere cut its price estimate by $0.65 to $3.45 a bushel, just $0.05 below the USDA forecast at the midpoint of the range.

However, the estimate for cotton prices of 65 cents a pound was above the range of $56-64 cents a pound forecast by the USDA.

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Farm debt ratio in Canada could create an agricultural ‘bust Will history repeat itself, with a sell-off fuelled by farm debt?

Are we heading into another bust in agriculture, as happened in the late 1920s and in the 1980s? This is the fear of some farmers, and of some agricultural economists too.

George Brinkman, professor emeritus at the University of Guelph, believes Canadian farmers are seriously over-leveraged and that there simply is not enough farm income to pay off the debt farmers have accumulated.

“Farmers in Canada are overcapitalized, and they are much more vulnerable than U.S. farmers to rising interest rates, low commodity prices, poor production, and falling land values,” Brinkman says. “If prices enter a down cycle or interest rates go up, Canadian farmers will be squeezed.”

Canadian farm debt has increased greatly over the past few years. Statistics Canada data shows Canadian farm debt had climbed to $77.98 billion by the end of 2013, an increase of more than $12 billion since 2010.

Canada isn’t alone in this trend. Farm debt in Australia is up by 75 per cent over the past decade and is currently estimated at more than A$70 billion. Even more alarming is that 70 per cent of Aussie debt is held by just 12 per cent of its farms.

American farmers have also increased borrowing, although not nearly to the same extent as Canadian farmers. Total U.S. farm debt grew by roughly five per cent a year from 2003 to 2009, a pace that is very similar to the rate at which debt increased during the boom years of the 1970s.

Brinkman provides a startling comparison of Canadian U.S. farm debt. A few years ago, he calculated the ratio of farm debt to income in Canada and found that in 1972, that ratio was two to one. In other words, it took $2 of debt to produce $1 of income. By 2007, that ratio had jumped to 23 to one.

In 2007 in the U.S., however, their debt-to-income ratio was only 2.9 to one.

Numbers like these remind me of the huge government debts that many countries have accumulated, and how the ratio of government debt to GDP has gone up in recent years, putting countries and their economies at risk.

I wanted to know how the ratio of farm debt to total agricultural income compares to the ratio of sovereign debt to a country’s GDP. It turns out that statistics are readily available.

In Canada, total government debt as a percentage of GDP in 2013 was 86.30 per cent. The U.S. public debt/GDP was 71.80 per cent (CIA World Fact Book numbers).

Taking the $77.979 billion that Canadian farmers owed in 2013 and dividing it by $53.890 billion (the total cash receipts which Statistic Canada reported Canadian farmers received that year) we get a ratio of 144.7 per cent.

Only the debt/GDP ratios of Japan (226.10), Zimbabwe (202.40), and Greece (175.00) were higher in 2013.

The reality is, Canadian farmers’ ratio of debt to economic production is higher than some of the world’s worst economic basket cases, including Italy, Iceland and Portugal.

By the way, the U.S. ratio of farm debt to total farm receipts is much lower at 69.4 per cent, which puts their debt-to-income ratio lower than their public debt/GDP ratio, and less than half of the corresponding Canadian farm ratio.

Without question, comparing Canadian farm debt against sovereign debt is like comparing apples to oranges. It has little direct economic significance.

As a visual of just how huge the farm debt is in Canada, however, it is eye opening.

Land value bubble

In Australia, Canada, and the U.S., land purchases have been a driver of rising farm debt, but Brinkman warns these land prices may be a bubble, and in time we may see that bubble burst.

In Australia, 44 per cent of new debt in 2012 was for land purchase. The average price of farmland has jumped from A$279/ha in 2004 to A$470/ha in 2014.

In Canada, the overall average increase in the price of land likely has less significance due to the vast differences in agriculture, crops, type of farms and land quality across this country. However, according to the 2013 FCC Farmland Values report, the average increase in farmland value in 2011 was 14.8 per cent, followed by increases of 19.5 per cent in 2012 and 22.1 per cent in 2013.

Likewise, although the U.S. also has differences between states and types of farms, the USDA estimates the average increase of land values from 2012 to 2013 at 13 per cent.

If you compare 2013 U.S. farmland values to 2003 values, land has increased by 240 per cent. The real estate debt load of U.S. farmers is now estimated at US$182 billion.

We have reached a point, especially in Canada, where it seems there is no land price that is too high. After all, when land values are rising faster than inflation and interest, borrowing to buy land can be justified through important financial ratios like debt to asset and equity to asset.

So given that interest rates are low, and that cash flow positions are good due to years of high prices, there are strong motivations to borrow to buy land.

Unfortunately, farmland values now far exceed productive value, and we may be seeing many farmers ignore the risk of interest rate increases or declining revenues, and continue to borrow to purchase land based on the belief that the trends of the last few years are likely to continue.

You have to wonder how speculative these land purchases really are.

Risk of the bubble bursting

While in the 1980s the crash in agriculture was precipitated by high interest rates, Brinkman feels the next crash could be caused by high farm debt.

Brinkman is not the only one warning of a potential agricultural bust. In February, 2014 the Wall Street Journal was already reporting falling farm property values in the U.S. Corn Belt.

Michael Duffy, agricultural economist at Iowa State University has projected land prices could fall from 20 to 25 per cent over the next few years if corn prices fall.

In a conversation with Bloomberg News in December 2013, Gary Ash, CEO of 1st Farm Credit Services predicted that a drop in corn prices could result in land prices dropping by up to 30 per cent.

Jason Henderson and Nathan Kauffman of the Federal Reserve Bank of Kansas City have written a number of research papers warning of a drop in commodity prices which may result in some farms not being able to service the debt they have accumulated. Some of their analysis and research is available online, including the paper “Farm Investment and Leverage Cycles: Will This Time Be Different?”

Unfortunately, the fall in commodity prices is no longer just a vague fear. We are experiencing those declining prices right now, so every farmer must take a close look at their debt and make sure it can be serviced at current and worst-case commodity prices.

There is a saying in banking: “Most bad loans are made during good times.” Without question we have enjoyed a run of good prices and for most producers, we have experienced good yields as well. Time will tell if those good times have enticed farmers into too much debt.

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Cotton 'best bet' among crops, and soybeans worst

Cotton looks the best bet among crop futures, and soybeans the worst, Societe Generale said, slashing its forecast for prices of the fibre by up to $1.12 a bushel to levels well below the futures curve.

Cotton, futures in which last week hit a five-year low for a spot contract of 57.84 cents a pound, is "undervalued", the bank said – despite unveiling a bigger forecast for supplies than the US Department of Agriculture, whose estimates set world benchmarks.

According to SocGen, world supplies will end 2014-15 at a record 110.7m bales, some 3.3m bales more than the USDA foresees, lifted by a more generous estimate for US supplies.

Stocks in the US will end the season at 6.10m bales, the bank said, in a forecast 1.0m bales above the USDA figure, reflecting a weaker forecast for shipments from the world's top cotton exporting country.

"Demand for US exports is seemingly waning, as export inspections are steadily trending lower as the crop year continues," SocGen analyst Chris Narayanan said.

'Tremendous rout'

However, while cutting its forecasts for cotton prices by 6 cents a pound, the bank's estimates remained well above the futures curve, projecting a return in values to 69 cents a pound during the April-to-June quarter next year.

July futures were trading on Wednesday at 60.93 cents a pound, down 0.3% on the day.

The forecast reflected in part an expectation that "smaller Asian countries are expected to help pick up the slack" left in global imports from weakening demand from China, which has changed its farm subsidy rules and acted to reduce the appeal of purchases from abroad.

"Our higher-than-consensus US GDP outlook adds additional support, as consumers there are expected to increase spending," Mr Narayanan said.

"As demand for products builds… we expect cotton prices to begin rising.

"We expect buyers to step in after the tremendous rout in prices seen this year," which saw futures peak in March at 97.35 cents a pound.

'Another downtrend'

For soybeans, however, the bank said it was "bearish" in prices further ahead - cutting its forecast for average futures values in the July-to-September quarter next year by $1.12 to $9.49 a bushel.

That compares with the price of $10.23 ¼ a bushel at which November 2015 futures were trading on Wednesday.

The bank said that, near term, futures faced the challenge of a fall-off in export demand for soymeal, which has been a big prop for the whole grains complex.

"We note that after a quick start to exports for the 2014-15 soymeal marketing year, the pace of sales has slowed while the pace of inspections has levelled off," Mr Narayanan said.

"This suggests that the aggressive buying of meal is waning as new soybean supplies enter the pipeline."

Further ahead, the bank forecast "varied" yields in South America, factoring in the potential for an El Nino which would likely lead to dry conditions in northern Brazil, and wetter than average weather in southern Brazil down to central Argentina.

"If South American production does come in as expected, we expect prices to enter another downtrend in the second half of 2015 as replenishment of global soybean supplies are more than complete."

Brazilian sowings prospects

On grains, the bank revealed somewhat neutral forecasts prices, albeit a little below the futures curve on wheat, for which the bank acknowledge it had overestimated losses to this year's US hard red winter wheat crop, which has plagued by dryness during the growing season and rains during harvest.

For corn, the bank forecast prices spending most of next year at $4.00 a bushel or above, and indeed holding these levels out to 2019.

Sowings of Brazil's safrinha corn crop, sown early in 2015 on land vacated by the soybean harvest, may exceed expectations, given the recovery in futures from five-year lows in late September.

"With the July 2015 forward hovering near $4.00 a bushel, most [Brazilian] farmers can expect to breakeven or make a small profit," Mr Narayanan said.

"If this dynamic continues, the reduction of [safrinha] acreage may not be as dramatic as currently expected."

Demand, acres…

However, demand for corn is being underpinned by strong US ethanol production, which has begun 2014-15 rising by a rate of 4.5%.

Meanwhile, the US freeze, and forecasts for a chilly winter, will increase demand from the livestock sector, with cattle typically requiring more feed in cold weather.

A cold winter would prompt "greater feed demand, that should be seen in the January 2015 US Grain Stocks report".

Furthermore, corn sowings this year may prove to have been lower than believed, given the persistent gap in estimates between the National Agricultural Statistics Service and the Farm Service Agency – both parts of the US Department of Agriculture.

The spread between the two sets of estimates is "usually much narrower by this time of year", with the five-year average at 2.8m acres for corn compared with the current gap of more than 5m acres.

"This suggests that acreage estimates could see a downward revision," in the USDA's final official numbers.

'Increasingly bullish'

On sugar, Societe Generale stuck by forecasts for prices to recover above 18 cents a pound by the July-to-September quarter next year, as a global production shortfall of 2.36m tonnes in 2014-15 starts being felt.

"We are increasingly bullish later in 2015 when the elusive deficit finally begins to manifest itself."

On coffee, the forecast for futures was kept at 180-185 cents a pound out to the end of next year, below the futures curve, with the threat to Brazilian production from this year's drought seen as priced in.

"We continue to see enough risk premium to account for the next Brazilian harvest until it begins and more tangible information is gained."

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Despite Moderation, Hog Profit Outlook's Cheery For 2015

Despite Moderation, Hog Profit Outlook's Cheery For 2015 | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |

The hog market has been a good place to be in the last year. Live hog prices in the last few months have trended almost $20 a head higher than the same period in 2013. So, what's the outlook heading into winter?

Feed supplies remain low, and that's likely to be the case through the next year, likely underpinning profits for the hog sector through that time. And, with consumer demand continuing strong, there's not a lot of incentive for the market to slide sharply lower, though some moderation from recent skyrocketing prices is likely in the next few months, says one economist.

"Wholesale pork prices reached their highs in July and have now had three months of moderation. Retail prices tend to lag wholesale prices by three to six months, but the official October estimate of retail prices shows some consumer relief as prices fell 7¢ per pound, the first sign of lower prices in nearly a year. Retail pork prices should continue to moderate somewhat through 2015 as pork supplies increase," says Purdue University Extension livestock economist Chris Hurt. "Consumers have not complained much about retail pork prices, which averaged $4.14 a pound in October according to USDA's estimate of the average grocery store price of pork. The reason is because beef prices were at $6.24 a pound, making pork look like a bargain at $2.10 a pound lower than beef."

The key to sustaining overall higher prices despite a moderation from the market's spike earlier in the year is in how the industry handles something that was behind a lot of panic-induced market action earlier this year and late last year: PEDv. The porcine epidemic diarrhea virus caused major knee-jerk reactions in both how the herd was handled and how the market reacted late last year and through the first half of 2014. Now that the disease is seemingly under control, a sigh of relief has washed through the market. However, supply levels resulting from major culls stemming from the disease will continue to pace the industry moving forward.

"Looking back on the year, it seems clear that the old adage of buy the rumor, and sell the fact may be the best way to characterize this year's price pattern. The 'rumor' that PED might greatly reduce pork supplies was an important factor in the elevated prices. But the 'fact' that PED was not a major disruptor of supplies has now allowed prices to return to more realistic levels," Hurt says. "What do 'more realistic' hog prices mean for the remainder of this year and 2015? PED is still having an impact and is still killing some baby pigs. However, markets are treating PED as something that can be managed unlike last spring and summer when the 'rumor' mill was creating grave uncertainty for pork supplies. Pork supplies are expected to be down 1% in December-January-February, and then increase by 3% in the spring and 5% in the summer."

So, despite continued tight supplies and persistent strong consumer demand, profits will be lower in 2015, Hurt says. That shouldn't be too much of a surprise, though, considering the year saw record profits. With supplies expected to remain on the low side, watch feed costs in the next year. Though they'll likely stay low, they'll be part of an overall equation that will yield profits possibly as much as $20 a head lower than 2014 in general.

"The most profitable year on record will be 2014, with estimated profits near $55 per head. Those will remain strong for the first three quarters in 2015, averaging around $44 per head, before tailing off to around $10 per head in the final quarter. Profits for the entire year of 2015 are still expected to be $36 per head which would be the third-highest profit year of the last 26 years dating back to 1990," Hurt says. "High hog prices and lower costs are the keys to current profitability. Estimated annual costs of production have dropped from a high of $67 per live hundredweight in the drought year of 2012 to $56.50 for this calendar year and to $52 anticipated for 2015. Notably, corn prices declined sharply in the fall of 2013, but meal prices did not decline overall until the fall of 2014. So, 2015 will be the first calendar year when both corn prices and meal prices have moderated, dropping feed costs to five-year lows."

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Jour de «grand dérangement» : le Port et l'Hôtel de Ville de Montréal ciblés

Jour de «grand dérangement» : le Port et l'Hôtel de Ville de Montréal ciblés | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |
National : (Cogeco Nouvelles) - Participant èa ce qu'ils appellent le «grand dérangement», afin de dénoncer le projet de loi 3 sur la réforme des régimes de retraite, des pompiers de Montréal ont entre autres bloqué les principaux accès du Port alors que d'autres syndiqués ont ralenti l'entrée au travail d'employés de l'Hôtel de ville.
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Canada lifts wheat, durum price forecasts

Canada cautioned over the quality of domestic durum and common wheat crops as it raised its price forecasts again, seeing growers likely to receive higher values for the 2014 harvest than for last year's.

Agriculture and Agri-Food Canada nudged higher to Can$200-230 per tonne, from Can$190-220 per tonne, its forecast for average Canadian farmgate wheat prices this year, as measured by values of top grade Canadian western red spring wheat with 13.5% protein in the top growing province of Saskatchewan.

At the mid-point of the range, growers would receive Can$10 a tonne more than they did for their 2013 crop.

The upgrade reflected in part expectations of a weaker Canadian dollar, but also concerns over the supply of higher grade wheat, thanks to unduly wet conditions.

The quality of the wheat crop in western Canada, responsible for some 90% of domestic supplies, "is significantly lower than last for year all classes and significantly lower than the past five-year average except for Canada Prairie spring wheat," of which major growing areas enjoyed "more favourable weather", AAFC said.

'Significantly lower quality'

For durum, AAFC hiked its farmgate price forecast to Can$305-335 a tonne, from Can$255-285 a tonne, as measured spot values of Canadian western amber durum in Saskatchewan, again highlighting quality concerns.

That implies a jump of at least 3%, and potentially 52%, in prices.

"The average grade quality of the Canadian durum crop is significantly lower than that of 2013-14, and from the past five-year average," the ministry said.

Indeed, on prices, AAFC underlined that the "largest price increases are expected for high grade durum because of a limited supply", noting that values "have already increased significantly since the end of July".

In July, AAFC was forecasting an average Canadian durum price of Can$215-245 a tonne for 2014-15.

World downgrades

The ministry - which restated an estimate of domestic durum output tumbling 27% to 4.76m tonnes this year, undermined by lower sowings and yields - also flagged the setbacks to durum harvests in other major countries.

The estimate for global output was cut by 400,000 tonnes to a 13-year low of 33.3m tonnes.

Global inventories were seen ending 2014-15 at a 15-year low of 4.3m tonnes, 400,000 tonnes less than forecast last month.

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Machinery Costs per Acre Jump 68% in 10 Years

Machinery Costs per Acre Jump 68% in 10 Years | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |

Total machinery investment doubled from 2004 to 2013, but machinery expense per acre rose somewhat less, by 68% (which translates into 5.9% annually), according to data from Kansas.

While running about $50 per acre in 2003, machinery expense is now more than $80 per acre, according to Kansas Farm Management Association data analyzed by David Widmar, ag economist at Purdue University. Over the decade, the average machinery investment per acre grew at an annual rate of 8.2%.

“While reasons producers update their equipment can vary from increasing efficiency to managing taxable income, it’s important to understand how these changes can impact the underlying cost of production,” Widmar says.

Looking at the data another way reveals a different story. Machinery costs as a percentage of farm production was relatively lower cost from 2007-13 than 2004-06. In this recent period, machinery expenses have totaled 20% of the value of farm production, Widmar notes.

Machinery depreciation has increased sharply over the past decade. Illinois Farm Business Farm Management Association data show that depreciation expenses more than tripled—from $21 per acre in 2004/05 to $70 per acre by 2013.

Putting depreciation in context, from 2004-08, depreciation accounted for 4% to 6% of revenue. From 2009-12, depreciation jumped to 7% of farm revenue and 9% by 2013. “While total depreciation expense was increasing in absolute terms it also has increased in relative terms and accounts for a larger slice of total farm revenue,” Widmar says. Keep in mind, he says, that if farm revenues decline, the percentage of revenue claimed by this fixed asset will increase substantially.

Equally important is that while from a farm finance perspective asset turnover by machinery increases, the opposite has been occurring, Widmar notes. Initially showing an improvement since 2008 due to dramatic increases in commodity prices and relatively small increases in machinery investment, the ratio now is falling, the Kansas data show. “While the turnover isn’t as low as in 2004, the recent trend has been for more assets relative to production,” Widmar says. “If the value of production falls and machinery investment holds constant, the ratio will continue to fall.”

Asset turnover is calculated by dividing the value of farm production by the value of machinery assets.

Widmar says that as farm revenues decline on the crop side, the strategies used to purchase and maintain equipment lines will likely need to adjust. Some of these metrics, such as depreciation expense, will be easier to adjust because producers will cut back on capital purchases. Others, such as the machinery investment, will be far more difficult to adjust to the lower commodity price environment, he notes

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Wheat Rises Amid Frost-Damage Concerns for U.S., Black Sea Crops

Wheat advanced to the highest level in more than a week amid concerns that freezing weather will damage winter grain in the Black Sea region and may have affected crops in the U.S., the world’s biggest exporter.

Snow cover in the former Soviet Union is forecast to stay limited in the next two weeks, leaving winter wheat vulnerable to cold snaps, MDA Weather Services wrote yesterday. U.S. winter-wheat crop conditions deteriorated in the Nov. 23 week, a government report showed. Temperatures in the upper U.S. Midwest fell below minus 20 degrees Celsius (minus 4 degrees Fahrenheit) last week, based on data from World Ag Weather.

“Wheat prices continue to show a certain strength in a context of sustained export activity and concerns about crop conditions in the U.S. and Russia, confronted with a cold wave,” Paris-based farm adviser Agritel wrote. “Crop development in the Black Sea region is seen as insufficient to serenely face winter.”

Wheat for March delivery advanced 0.9 percent to $5.625 a bushel on the Chicago Board of Trade before a pause in trading at 7:45 a.m. after earlier touching $5.655, the highest since Nov. 17. Prices are up 5.6 percent in November, heading for a second monthly gain. Milling wheat for January delivery rose 1.2 percent in Paris to 182.75 euros ($228.20) a metric ton.

About 58 percent of the U.S. crop was in good or excellent condition as of Nov. 23, down from 60 percent a week earlier and 62 percent a year ago, according to the Department of Agriculture. The U.S. was the top shipper in 2013-2014, USDA data show.

Soybeans for delivery in January fell 0.2 percent to $10.485 a bushel. Corn for March delivery advanced 0.5 percent to $3.8925 a bushel. 

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November 25 Mid-Day Grains Commentary: Alexandra Lively - YouTube

November 25 Grains Commentary: Alexandra Lively
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Shorting Chickens Becomes Hot Trade After Prices Surge

Shorting Chickens Becomes Hot Trade After Prices Surge | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |

With no futures market to speculate on chicken-price movements, they’re turning to the equity market, borrowing record amounts of shares of two U.S. poultry producers that they in turn sell in anticipation of declines. The percentage of outstanding shares of Pilgrim’s Pride Corp. (PPC), the second-biggest U.S. chicken producer, that were sold short by investors has soared more than six-fold since Sept. 30, while the ratio for Sanderson Farms Inc. (SAFM) has almost doubled. 

The success, or failure, of the trade comes down largely on whether the eight-month surge in chicken, which has fattened producers’ profit margins, is over or not. Prices for the whole bird have been soaring to a record, partly the result of rising beef costs that prompted consumers to turn to poultry as a cheaper protein substitute. Chicken output will expand to a record next year as lower grain prices help producers hold down costs, the U.S. Department of Agriculture estimates. 

“The main issue for the lower prices is going to be because of the additional supply,” Altin Kalo, a livestock analyst with Steiner Consulting Group in Manchester, New Hampshire, said in a telephone interview Nov. 24. “It’s a little bit of a guess as to how big and how explosive the growth is going to be. It’s happened many times in the past where production starts to ramp up a lot faster than people expect.” 

Sold Short 

Almost 12 percent of outstanding stock in Pilgrim’s Pride was sold short on Nov. 24, up from less than 2 percent at the end of September. The company, a unit of JBS SA, is the biggest U.S. chicken producer after Tyson Foods Inc., which also sells pork and beef. Cameron Bruett, a spokesman for JBS USA, declined to comment. 

Bearish bets against Sanderson Farms reached 36 percent this week, almost double what they were two months earlier. 

While other agricultural products, including cattle, hogs, cotton and soybeans, trade on Chicagoexchanges, chicken isn’t quoted on any U.S. bourse, making it hard to bet on the direction of prices. 

Shares of Greeley, Colorado-based Pilgrim’s surged 94 percent this year partly as poultry prices rose. Laurel, Mississippi-based Sanderson, the fourth-biggest chicken producer, is up 20 percent. Sanderson Farms Chief Financial Officer Mike Cockrell declined to comment. 

‘Peak’ Conditions 

With higher chicken prices and lower feed costs, the industry has been “operating under the most advantageous conditions possible,” Francesco Pellegrino, a New York-based analyst for Sidoti & Co LLC, who recommends buying Sanderson Farms shares, said in a telephone interview yesterday. He doesn’t cover Pilgrim’s Pride. Short interest has risen because investors are questioning how much longer “peak” conditions can persist, he said. 

Whole chickens sold by farmers in Georgia, the biggest producing state, rose 9.4 percent this year to an all-time high of $1.14 a pound, which has held through much of November. A retail gauge of composite wholesale-chicken prices has climbed 24 percent this year to average 90.404 cents a pound in October, USDA data show. 

Chicken production will climb 3 percent next year to an all-time high of 39.206 billion pounds, the USDA forecasts. That’s at least 65 percent higher than estimated beef or pork output. A USDA index of chicken-feed costs was 24 percent lower in September than a year earlier as American farmers collect record corn and soybean crops. 

Demand Outlook 

Gains for demand will keep the “supply increases from crushing prices,” Heather Jones, a Richmond, Virginia-based analyst for BB&T Capital Markets, said in a telephone interview Nov. 24. Consumers “are going to see lower chicken prices, but nothing substantial,” she said. 

Per-capita chicken consumption will rise to 85.3 pounds in 2015 from 83.4 pounds this year, the USDA estimates. The gain comes as the measure for beef is expected to decline 4.4 percent to 52.2 pounds. The smallest U.S. cattle herd since 1951 sent wholesale beef to a record in July, and the price is up 28 percent this year. 

“In 2014, we have actually seen a demand shift from beef to chicken,” Donnie Smith, chief executive officer of Springdale, Arkansas-based Tyson, said during an investor presentation Nov. 19. The shift, combined with increased demand from younger consumers, gives “us a lot of confidence that we’re going to be chasing good demand particularly in chicken, and obviously pork as well, into the future,” he said. 

Meat Inflation 

While investors have benefited from anticipating profit-margin declines after peaks in past cycles, “these levels may be sustainable over the short-term,” Sidoti’s Pellegrino said. Demand for chicken will be helped by tight supplies of other meats for the next several years, he said. 

U.S. meat prices will increase as much as 4.5 percent in 2015, the government estimates. The gains will be lead by beef, veal and pork, forecast to climb as much as 5.5 percent, the most of any food group. Poultry inflation is estimated between 2.5 percent and 3.5 percent. 

The USDA expects wholesale-chicken prices could drop to as low as 99 cents a pound by the third quarter next year, from an average $1.052 in 2014. 

Sanderson is the fourth-most shorted stock on the Nasdaq Composite Index, which has an average short interest of 2.8 percent, according to data compiled by Bloomberg and Markit, a London-based provider of financial information. 

Producers have placed more chickens on feed than a year ago in every week since August, according to USDA data tracking the 19 largest-producing states. Prices for soybean meal, used in poultry feed, are down 10 percent this year. Futures in Chicago are heading for a second straight annual loss, the longest slide since 1998. 

“In this business, we say cheap feed makes cheap meat,” Thomas Elam, the president of FarmEcon LLC in Carmel, Indiana, said in a telephone interview Nov. 21. “It’s just a matter of how long it’s going to take.”

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export ideas divide firm soy from weak wheat

Chicago grain traders say that the second session of the week reverses a strong trend on the third.

But it was a weak iteration of the Turnaround Tuesday theme which greeted them this time, with the best that could be said for corn and wheat futures that they at least managed to slow their declines, compared with Monday's.

Soybeans did manage to stage some rebound, standing up 0.4% at $10.37 ½ a bushel in Chicago for January delivery as of 09:10 UK time (03:10 Chicago time).

'Elevated domestic basis'

As ever, it had one eye on the performance of soymeal, which for December added 0.9% to $378.40 a short ton, this time rebuilding a little of its premium over the January contract, up 0.8% at $365.40 a short ton – a somewhat bullish sign, in implying more of a scramble for near-term supplies.

Analysts, often keen to try to pop the balloon of any inflated ag commodity price, have actually been rather reluctant to foresee a return of soymeal futures to earth, given the support to values from strong US demand and logistical hiccups, neither of which look like easing off soon, especially amid colder weather. 

"Soymeal continues to draw support from elevated domestic basis and a record US export sales book," Richard Feltes at Chicago-based RJ O'Brien said.

Prices on the Dalian exchange in China, the top soybean importing country, were not so helpful, with soymeal for May settling down 0.5% at 2,859 yuan a tonne.

'Rapid pace'

Still, soybeans also gained support from continued talk over strong US exports, of which the latest evidence came on Monday with a figure showing exports of 2.78m tonnes last week.

That took the total shipped so far in 2014-15 to 19.41m tonnes, up from 16.00m tonnes a year ago (for 2013-14).

"The US has been booking soybean exports at a rapid pace," said Tobin Gorey at Commonwealth Bank of Australia.

One broker said that US soybean exports, as measured by cargo inspections, are now "about 41.5% of the total export demand estimate" as reported in the US Department of Agriculture's latest Wasde report, which details forecasts for a range of ag commodity supply and demand numbers, domestic and international.

"This compares to last year's pace of 40.5%. 

"Last year the final export number ended up being 197 million bushels above the November 2013 Wasde estimate," the broker said, attributing it in part to the fact that "China's buy programme did not turn off until May".

Chinese retreat ahead?

Indeed, soybean futures might have been faring better were it not for concerns that Chinese purchasing could end sooner this year, once supplies become available again in earnest in the spring from the South American harvest.

"Observers are now guessing what proportion of the bookings will be realised given a large amount are in a window when South American producers will have plenty of beans available," CBA's Tobin Gorey said.  

The US broker flagged the impact last year of "shadow banking", a process in which commodities were used by borrowers as a financing tool, and one which may be so prevalent this time.

"From what we have heard the Chinese government has been cracking down on shadow banking and the grains are no longer plagued by these transactions," the broker said.

Separately, Benson Quinn Commodities noted that the boost to sentiment from Friday's cut to Chinese interest rates, on ideas that this would support demand, had given way "to concern that China stimulus is not enough to offset bad debt on bank balance sheets".

Argentine stand-off to end?

Another unusual factor which has been supporting soybean prices could break too, in the hold-off from selling by Argentine farmers using crops as a dollar-denominated hedge against a falling peso and strong domestic inflation.

"They stored a record 62% of their total soybean use from last year and are projected to store 70%+ this year," the broker said.

"This story, however can only go on for so long when we are talking about perishable commodities. 

"The normal distribution from Argentina will eventually resume and potentially flood the market with enough beans to significantly affect price action."

Declining condition

Nonetheless, soybeans were faring better than wheat, which dropped 0.6% to $5.46 ¼ a bushel in Chicago for March delivery – signally falling below its 100-day moving average.

And this despite USDA data overnight showing that cold conditions last week appear indeed to have wrought some damage to US winter wheat seedlings, with the proportion rated "good" or "excellent" down 2 points to 58%.

That is hardly disastrous, certainly. But it is down 4 points year on year.

And the data showed a widespread condition decline, with no states showing an improvement in the crop, and Nebraska seeing a drop of 9 points in the good or excellent rating, albeit to a still creditable 69%.

In Washington state, the rating fell 5 points to 23%.

Cold weather

And further cold weather could be the story of the US winter, if El Nino arrives as some meteorologists foresee, although it would at least by accompanied by rains to boost soil moisture levels in the US Plains.

"Longer term the influence of El Nino conditions, evidenced by warmer than normal sea surface temperatures along the equator in the Pacific Ocean, is expected to bring above-normal levels of precipitation and below-normal temperatures," Mark Welch at Texas A&M University said in a wheat report.

Still, there is some idea of fears easing over Russian winter wheat, which has been tested by a lack of moisture, and developed poorly.

"Weather forecasters continue to expect temperatures low temperatures in the Russia, but the coldest temperatures and limited snow protection do not coincide all that much," CBA's Tobin Gorey said, with snow offering seedlings a blanket against real cold.

Saudi purchase

And the result of the Saudi Arabia wheat tender, which ended up in purchases of 345,000 tonnes of wheat at cut prices, and apparently not from the US, continues to get comment.

"The fact that merchants appear to be offering wheat below replacement cost signals the amount of global wheat that some feel needs to be moved," said Brian Henry at Benson Quinn Commodities.

This is a particularly concerning signal for US wheat, which is seen as priced out of the market for all but routine destinations.

The wheat Saudi Arabia ordered "may be sourced out of a couple of originations, but it looks like Germany was the odds on favourite to do the bulk of the business," Mr Henry noted.

'Aggressive offer'

Corn, meanwhile, repeated its trick of trading between wheat and soybeans, down 0.2% at $3.79 ½ a bushel for March delivery.

The USDA data out overnight actually showed US harvest overtaking the typical pace, at 94% complete, compared with a typical 92%.

That means that "about 770m bushels are still in the field in the area impacted by the US storm, with about half of that in Michigan, Ohio, and Wisconsin," Dr Welch noted.

There is less concern over US corn exports than wheat.

"Ukraine continues to have an aggressive offer," Mr Henry said, but added that "I doubt their offer is very deep on shipments after the first of the year".

Cotton gains

In New York, cotton for March added 0.5% to 59.10 cents a pound, continuing to be pulled towards that 59-60 cents-a-pound level, and helped into some recovery by the slowish pace of the US harvest.

US farmers have 77% of their cotton in the barn, compared with a typical 83%, reflecting a poor pace in the southern Plains.

In both Oklahoma and Texas, growers have harvested less than 60% of their cotton.

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Flooded Mine Bolsters BHP’s Plan for Potash, CEO Says

Flooded Mine Bolsters BHP’s Plan for Potash, CEO Says | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |

The flooding of a mine owned by the world’s biggest potash producer is confirmation for BHP Billiton Ltd. (BHP)’s Chief Executive Officer Andrew Mackenzie of the wisdom of his company’s planned move into the industry. 

“These sorts of factors, combined with continued economic growth and demand for potash all conspire, if you like, to bring toward us the time when a new mine is required,” Mackenzie said in an interview in Sydney. “We have the lowest cost mine that would be useful to bring into the market at that stage.” 

According to Mackenzie, no major new mines have begun production since the 1970s and the halt of operations at Uralkali’s Solikamsk-2 mine, which accounts for 3 percent of world supply, is a sign of the vulnerability of supply -- just as the need to feed a booming global population spurs demand. 

BHP is looking to build its Jansen project in Canada’s Saskatchewan province sometime in the next decade, though Mackenzie is cautious about giving an exact timeline. Spending of $3.8 billion has been approved so far on Jansen, including mine and service shafts, and Citigroup Inc. (C) forecasts the whole project may cost $16 billion. 

“We do know we have to wait for the market to come towards us, but once those shafts are complete, we are only three to four years -- at most -- from first potash,” Mackenzie said yesterday in the interview. 

Half the World 

Proceeding with Jansen without a partner probably would be “misguided,” Evy Hambro, manager of BlackRock Inc.’s $6 billion World Mining Fund, said last year after Russia’s Uralkali quit a marketing venture controlling almost half of world exports. Sanford C. Bernstein & Co. forecast in July that it didn’t see the industry’s existing capacity overhang fully cleared before 2027 “at the earliest.” 

Demand for potash, a crop nutrient that improves drought resistance and strengthens roots, is seen being supported by the need to raise global crop production from limited agricultural land. About 80 percent of growth in crop output will come from more intensive farming, according to the Food and Agriculture Organization of the United Nations

“As people seek better living standards, without deforestation, that brings you back to food, and brings you back to fertilizers,” Mackenzie said. “We’ve chosen the fertilizer that is essentially a mining play, and where we think we can add value in the long run.” 

New Mines 

OAO EuroChem, a Russian fertilizer maker building $7.4 billion of potash projects, is seeking to start shipments from new mines by 2019. New potash mines will be needed from about 2020 to meet rising demand, as existing sites reach the limit of shaft and ventilation capacity, BHP said last month. 

“It’s something they aren’t going to get a return on for some time,” Mark Taylor, a Sydney-based analyst at Morningstar Inc., said today by phone. “But it’s worthwhile to spend the dollars and keep a foot in the game.” 

Efforts to bring in a partner to help develop the project are being complicated because BHP hasn’t yet committed to any firm schedule for developing Jansen, Mackenzie said. 

“That’s quite a lot of uncertainty for a lot of people who might invest,” Mackenzie said. “The partner universe is much smaller because there are some who would want to see that timeline set out.” 

BHP doesn’t plan to revisit the $40 billion hostile bid for Potash Corp. of Saskatchewan Inc. in 2010 that was blocked by the Canadian government, according to Mackenzie. Acquisitions probably cannot compete with returns the producer can capture from internal options. “Therefore, I’m not interested,” he said. 

Broken Cartels 

The end of cooperation on a joint marketing venture between Uralkali and Belarus may also support BHP’s ambitions to enter the potash sector, and help make demand more predictable. “Previously, there were cartels,” Mackenzie said. “They have been broken, or weakened to the point that now we are moving to a free market.” 

Output disruption caused by flooding at Uralkali’s Solikamsk-2 mine, about 1,600 kilometers (1,000 miles) east of Moscow, could restore Potash Corp. as the world’s largest producer. A sinkhole as wide as 40 meters (130 feet) was found near mine the flooded mine. 

Farmers have skipped applications of potash to their land in the past amid efforts to cuts costs, according to Green Markets data. Potash users can chose to halt the application of the nutrient to their land for a year or more before yield declines. 

“Buyers can go on strike, and they can allow their nitrogen to potassium ratios to rise. But as they are rising, their fertility is falling and at some point they need to correct,” Mackenzie said. “If a cartel is no longer functioning, there isn’t the same game playing that needs to be done by the consumers either.”

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Chinese Potash Buyers Seen Resisting Uralkali’s 10% Price Rise

Potash buyers in China are resisting efforts by OAO Uralkali to lift annual 2015 contract prices by about 10 percent, after the Russian company halted a mine amid water inflows. 

“They wish to pay a 5 percent increase or even lower,” Wei Chengguang, president of China Potassium Salts Industrial Association, said yesterday by telephone from Shanghai, citing the traders. “The 10 percent rise asked by suppliers will hurt Chinese traders because domestic potash is cheaper with new supplies coming on stream. They are in contact but haven’t made any progress.” 

Uralkali, the world’s biggest potash miner, halted operations and evacuated workers last week at the Solikamsk-2 mine in Russia because of rising water inflows, jeopardizing 3 percent of global supply. Meanwhile, inventories held at Chinese ports are rising as a slowing economy hurts consumption of potash, a potassium-based compound that strengthens plant roots and protects against drought. 

Uralkali asked for $340 a metric ton in its initial talks with Chinese buyers in October, from $305 this year, said Li Feng, a Shandong-based analyst with chemical consultancy SCI International. The latest survey of Chinese users shows they are prepared to pay $325 to $330, Li said. 

“I don’t think the flood would pose any immediate risks for China to change their stance in the negotiations,” he said, “New supplies from mines in China and overseas have increased significantly in the past year.” 

Laos Mine 

A first shipment of 18,000 tons of potassium chlorate from closely held Sichuan Kaiyuan Group’s mine in Laos arrived in China, the association’s Wei said, adding that “Chinese overseas investment on potash is still accelerating.” 

Sinofert Holdings Co. (297), the Hong Kong-traded unit of Sinochem Group, is leading Chinese buyers in bi-annual price talks with overseas suppliers. Yang Hongwei, a vice president with Sinofert, declined to comment on the potash talks. Uralkali press service declined to comment. 

Potash stored at Chinese ports may climb to as much as 1.6 million tons this year, compared with estimated imports of 6 million tons, Wei said. Chinese producers hold inventories of 2 million to 3 million tons, compared with annual output of about 7 million tons, he said. 

Chinese potash is sold at about 2,000 yuan ($325) to domestic users, or 100 yuan lower than imports, Wei said.

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Meat Market: How One Ohio Butcher Moves 400 Turduckens by Mail

Meat Market: How One Ohio Butcher Moves 400 Turduckens by Mail | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |

Last year, Danny Catullo stopped advertising his butcher shop’s mail-order turduckens online three weeks before Christmas. He was afraid he couldn’t keep up with demand for the holiday delicacy, which his Poland (Ohio)-based Catullo Prime Meats creates by cutting out the breastbones of turkeys and filling the cavity with a duck, a boneless chicken, and apple sausage stuffing.

Catullo, 31, is forecasting sales of 400 turduckens from the lead-up to Thanksgiving through the days before Christmas. Call it 1,200 birds, maybe 6,000 pounds of fowl. While that’s nothing for mail-order meat purveyors such as Allen Brothers or Omaha Steaks, which can run through 1 million pounds of dry ice during a single holiday season, it’s a lot for Catullo.

The third-generation butcher shop must balance its mainstay brick-and-mortar business with growing online sales. Catullo expects to double his staff to 40 workers by the end of the holiday season. He’ll be burning the candle at both ends to keep up. “There are going to be nights that I’m here until midnight, making turducken and jamming to Adele,” he says.

The first Catullo to run a meat counter was Danny’s grandfather, Daniel, who learned his trade during a stint as a butcher in the U.S. Army during the Korean War. Danny bought the shop from his father and uncle in 2007, taking over a business that was still run very much like a traditional butcher shop. Like other young owners of old companies, he saw an opportunity to build the business online by sprucing up the company’s website and experimenting with online sales.

Catullo’s first idea was to undercut big-city butchers on the high-end steaks that the shop is known for in the Youngstown, Ohio, area. That proved a tougher sell than such Rust Belt delicacies as pumpkin-style brats and paprika Slanina—a Hungarian pork treatment that resembles bacon. Also popular: turduckens.

The mash-up fowl has a long culinary history. “Take a plump quail, seasoned with truffles, and made tender by having been put into champagne,” instructs the author of a French recipe printed in an Australian newspaper in 1891. “You put it carefully inside a young Bresse chicken, then sew up the opening, and put dabs of butter all over the chicken. Again, you put the chicken inside a fine Berri turkey, and roast the turkey very carefully before a bright fire. What will be the result!”

What indeed? In the U.S., the turducken was an invention of Cajun cuisine. Online specialty foods retailer Goldbely says the turducken was invented in 1984 by a Maurice (La.)-based butcher called Herbert’s Specialty Meats. Football fans may associate the bird(s) with retired NFL commentator John Madden, who liked to talk turducken on Thanksgiving broadcasts. In any case, Catullo sold 13 turduckens in 2010, his first year online. Orders increased the next year after Pepto Bismol (PG) aired a television commercial about “nature’s majestic beast.

That left Catullo to solve the problem of getting stuffed birds out the door. Catullo sets aside a chunk of the previous year’s holiday sales to cover the next year’s upfront costs, which include staff and shipping materials. He won $5,000 in a contest sponsored by FedEx (FDX) and used the money to experiment with cold shipping. The average turducken weighs 15 pounds and goes out with eight pounds of dry ice. Catullo has shipped meats as far as Alaska and Hawaii.

The birds don’t debone themselves, so Catullo brings on extra meat cutters for the holidays, who slice, stuff, freeze, and pack the poultry. To avoid having all the orders due on the day before Thanksgiving or Christmas, he offers discounts to customers who sign up for early delivery. He also eats some shipping costs to keep online prices in line with the $70 he charges in the brick-and-mortar store. (More frugal—or less hungry—shoppers can buy “chiduckeys,” which is a turkey breast stuffed into a half a duck stuffed into a chicken; once you start making hybrid fowl, it’s hard to stop.)

Space limitations may be the biggest challenge. Catullo doesn’t have a warehouse to store frozen birds, so most of its turduckens are made in late-night prep sessions and then frozen to be shipped within days. Last year, the late-night crew ran out of bread it needed to make stuffing for turduckens. The local grocery stores were closed, so they knocked on the door of a nearby coffee house that was getting ready for the next day’s business. “We were like, ‘Dude, can we have some bread?’” Catullo says. “We sent over some bacon to thank him.”

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U.S. ethanol production hits record high on profit margins

CHICAGO (Reuters) — U.S. ethanol makers produced a record amount of the biofuel last week, government data showed on Wednesday, as plentiful corn supplies and high ethanol prices resulted in the best profit margins in about six months, traders said.

Ethanol production rose more than one percent to an average of 982,000 barrels per day in the week ending Nov. 21, the U.S. Energy Information Administration said. That is the largest weekly total since EIA started tracking the data in 2010.

Stocks of the grain-based biofuel decreased by 263,000 barrels to 17.07 million barrels, the smallest in about a month.

The record production came as the U.S. Environmental Protection Agency last week delayed a decision until next year on targets for biofuel use in the nation’s gasoline supply.

The EPA announcement likely had little impact on ethanol production, said Jerrod Kitt, a biofuels analyst with the Linn Group, a Chicago brokerage. “It’s purely seasonal, plus margins,” he said.

Many ethanol plants perform annual maintenance before the autumn corn harvest, allowing them to run near-capacity when supplies of the grain are cheapest and most plentiful. Ethanol makers are earning as much as US$2 per bushel of corn on the ethanol they make — the best profits since last summer, Kitt said.

Ethanol futures eased about one cent to $2.04 per gallon in thin volume at the Chicago Board of Trade, with prices hovering near a 2 ½ month high reached on Tuesday. 

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First Shipment of Brazilian Pork Heads for US

BRAZIL - The first shipment of Brazilian pork bound for the United States left port last week.

The shipment was 25 tons of a specific cut, which left the port of Itapoá in Santa Catarina on 20 November, according to the agriculture ministry.

The Minister of Agriculture, Livestock and Supply, Neri Geller, has discussed with the chairman of the Central Cooperative in Aurora, Mario Lanznaster, whether there is an opportunity to export also bone-in products, especially ribs, rib and loin, despite the stringent requirements health and the country is a major producer of pork.

He said: "They are modest volumes in terms of international trade, but the company's goal is to enter and gradually consolidate the US market, the demand for quality is recognised worldwide."

The US is the largest exporter of pork in the world and the third largest manufacturer of the product.

Negotiations between Brazil and the United States over the shipment lasted about two years, in which US missions visited Brazil to verify the quality and safety of Brazilian pork.

Currently two product plants are authorised for export by the two countries - Aurora Chapecó and BRF at Herval do Oeste, both in the state of Santa Catarina.

According to Minister Geller, this first shipment demonstrates the credibility of the Brazilian market in relation to the North American expectations.

He said: "The completion of the negotiations and implementation of export were the culmination of the strategies adopted by the Ministry of Agriculture in order to prove the origin of Brazilian pork and open markets for the purchase of the product."

He stressed that the monitoring of swine-origin products has been continuous to ensure the reliability for foreign markets, saying: "The beginning of this export market gives credibility too to the Brazilian Federal Inspection Service. In addition, the opening of new markets reflects the favourable conditions in Brazil to meet domestic demand too."

In 2013, Brazil produced 3.52 million tons of pork; this year's production has already reached 3.55 million tons. Last year, pork exports totalled US$1.35 billion and amounted to approximately 513,000 tons. By October 2014, the country had already achieved exports of 410,000 tons valued at US$1.33 billion.

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China's Jiangsu Province reports foot-and-mouth disease outbreak - Xinhua |

BEIJING, Nov. 26 (Xinhua) -- Four pigs had tested positive for foot-and-mouth disease in Yancheng City in east China's Jiangsu Province, according to the agriculture ministry.

Animals showing signs of the disease were first found on a farm in Dongtai township on Nov. 18. It was confirmed Tuesday by the National Foot-and-Mouth Disease Reference Laboratory that the animals had the O-type strain of the disease, the ministry said in a press release.

After authorities were alerted to the outbreak, the affected zone was sealed off and 31 pigs in the same herd were culled and incinerated.

The ministry said that at the current time, the outbreak was under control.

Foot-and-mouth disease is highly contagious and sometimes fatal that can affect cloven-hoofed animals including cattle, pigs, sheep and goats. 

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Potash producers slide as Agrium downgraded, but Stifel sees hope

Potash producers slide as Agrium downgraded, but Stifel sees hope • 12:11 PM

Carl Surran, SA News Editor

  • Potash producers Agrium (AGU -2.6%), Potash Corp. (POT -0.3%), Mosaic (MOS -0.2%), CF Industries (CF -1.3%) and Intrepid Potash (IPI -1.1%) continue to give back the gains that followed Uralkali’s mine suspension, and BofA Merrill's downgrade of AGU hasn't helped.
  • While BofA remains positive on earnings from nitrogen, it believes potash is oversupplied and global demand growth could regress from 2014's ~11% pace.
  • But Stifel analysts are not throwing in the towel on the potash producers, citing potash supply constraints from declining North American producer inventories as well as the potential for the permanent closure of the Russian mine offsetting the negative impact of potentially lower North American planted corn acreage.
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Thanksgiving’s 46 Million Turkeys Get Costlier

Thanksgiving’s 46 Million Turkeys Get Costlier | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |

Recent history suggests Americans will eat 46 million turkeys during Thanksgiving, give or take a few birds.

The problem is that supplies are dropping. While that doesn’t mean stores will run out of turkeys before you buy one, costs are climbing. U.S. grocers are currently paying the highest prices ever at the wholesale level.

Farmers produced 4.239 billion pounds (1.47 million metric tons) in the nine months through September, down 3.3 percent from a year earlier, government data show. Wholesale prices tracked by researcher Urner Barry have jumped 16 percent from a year earlier to a record $1.24 a pound in the week ended Nov. 10, signaling higher costs for supermarkets that usually sell turkey at a discount to spur more holiday business.

More than 20 percent of annual turkey consumption occurs on Thanksgiving, which will be celebrated this year on Nov. 27, the National Turkey Federation estimates. The industry is still recovering from the record-high cost of feed grain during a 2012 drought, which forced reductions in cattle, hog and poultry output and sent meat prices surging. Feed accounts for about two-thirds of the cost of raising turkeys.

“There were quite a bit of cutbacks over the last two years,” fueling higher prices that were “desperately needed to cover the actual cost of the product,” said Kerry Doughty, the chief executive officer of Butterball LLC. The Garner, North Carolina-based company said it supplies one of every four birds sold in the U.S. during Thanksgiving and Christmas.

Last year, the cost of feeding 10 people a traditional Thanksgiving meal of turkey, rolls, cranberries and nine other items was $49.04, on average, the lowest since 2010, according to the American Farm Bureau Federation. The group is scheduled to update its estimate for this year on Nov. 20.

Fewer Birds


As of Sept. 30, 297.2 million pounds of whole turkeys were in frozen storage, the lowest for the date since 2011, and inventories of all frozen turkey meat touched 484.5 million pounds, a four-year low, USDA data show.


Tighter supplies are pushing up meat prices more than any other food group in the U.S. Pork chops and ground beef climbed to record highs in September, after a deadly pig virus killed millions of animals and the cattle herd started the year at the smallest since 1951, government data show.

Those price increases are leaking into the poultry market as consumers switch to cheaper alternatives to beef and pork, said Alex Melton, an economist with the USDA Economic Research Service in Washington. Wholesale prices for 8-pound to 16-pound turkeys will average $1.12 to $1.16 a pound in the current quarter, the highest among records going back to 1993, the USDA estimates.

Grocery Bill


Higher wholesale prices may not mean a bigger bill for consumers. Grocers probably will sell birds “well below” costs to lure shoppers, said Jennifer Bartashus, a Bloomberg Intelligence analyst. Retail whole frozen turkey averaged $1.584 a pound in September, the lowest for that time of year since 2010, according to the Bureau of Labor Statistics.


“They’re generally loss-leading items,” Bartashus said. “The low turkey price is the enticement to get people into their store.”

West Des Moines, Iowa-based Hy-Vee Inc., with 235 stores in eight Midwestern states, is giving away one frozen turkey of 10 pounds to 14 pounds to all customers who purchase a ham through Thanksgiving, said Tara Deering-Hansen, a spokeswoman. The same promotion has been in place for six years.

Meijer Inc., with 213 supermarkets in Michigan, Illinois, Ohio, Indiana and Kentucky, is offering discounts of 50 percent on all turkeys if customers spend $20 at their stores, which sold 700,000 turkeys last November. With the promotion, frozen Meijer-brand turkeys fetch 54 cents a pound, down from 66 cents a year earlier for a 12-pounder, the Grand Rapids, Michigan- based company said.

Traditional Meal


“A Thanksgiving meal really isn’t complete without the turkey,” said Matthew Craig, director of Meijer’s meat and seafood department.


Of more than 210 million turkeys consumed in the U.S. during 2012, 46 million were eaten on Thanksgiving, 22 million at Christmas and 19 million during Easter, the National Turkey Federation said, based on the most recent data available.

Many stores arrange purchases of holiday birds months in advance, when wholesale prices were lower, said Thomas Elam, president of Farm EconLLC in Carmel, Indiana.

Butterball expects a 3 percent increase in sales for November and December to about 20 million birds, weighing 16 pounds each on average, CEO Doughty said. With “absolutely outstanding” growth and health of turkeys this year, total poundage for fresh birds will be up 12 percent to 15 percent, he said. Last year, the company faced “limited availability” before Thanksgiving amid a decline in weight gains.

Output Rebound


Output will rebound next year as the cost of feed declines, Butterball’s Doughty said. Production fell after a drought in 2012 sent corn to a record $8.49 a bushel. Since July, corn traded below $4 until yesterday, touching a five-year low last month. An index of turkey-feed cost in September was 17 percent less than the same month in 2013, USDA data show. Once they hatch, turkeys typically reach slaughter weight after four or five months of eating mostly grain or soybean meal, according to the USDA.


“The turkey industry is just starting to expand right now,” said Russell Whitman, vice president of the Toms River, New Jersey-based Urner Barry’s poultry division.

Production next year will climb 3.2 percent to 5.925 billion pounds, the most since 2008, the USDA estimates. Turkey eggs in incubators at the start of October were up 5 percent from a year earlier, and hatchings of the young birds in September rose 9 percent, the data show.

“The low-priced feed is just coming in now,” said Corinne Alexander, an agricultural economist at Purdue University in West Lafayette, Indiana. “By next year, we’ll be looking at lower turkey prices.”

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China launches 2014/15 corn stockpiling scheme, prices unchanged

China launches 2014/15 corn stockpiling scheme, prices unchanged | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |

China will begin to buy corn from farmers this week under an annual intervention program, a government body said, offering the same prices as last year as it seeks to shore up the domestic market and boost rural incomes.

Beijing will pay 2,220-2,260 yuan ($362-$368) a ton to farmers in its northeastern provinces during the stockpile scheme, which will run until the end of April 2015, the State Administration of Grain said in a statement.

Under the program, now in its seventh year, the government is expected by analysts to stockpile about 40 million tonnes of corn in 2014/15, down from 60 million last year.

Industry sources have pointed to China's bulging state corn stocks as the reason for closer monitoring that has led to shipments of cheap U.S. corn being turned away on the grounds it contains a genetically modified strain not permitted for import.

Supported by stockpiling, domestic corn prices in China <0#DCC:> <0#ASCORN-CN> are more than 20 percent higher than global prices.

Chicago Board of Trade corn was little changed on Tuesday at $375 per bushel. Corn has fallen about 11 percent this year because of a bumper U.S harvest, on top of a decline of nearly 40 percent last year.[GRA/]

Besides China Grain Reserves Corp (Sinograin), two other state-owned firms will join the stockpiling scheme, the grain body said. COFCO will purchase an initial 5 million tonnes of corn, while China Textile Group will buy 1 million tonnes.

Beijing will also offer subsidies for the construction of temporary storage facilities, it said.

China is facing a big shortage in grain storage after bumper harvests over the past 10 years, said a senior official with the country's top planning body, the National Development and Reform Commission (NDRC).

Existing warehouses are able to hold 250 million tonnes of grain but 40 percent of the facilities are outdated or need to be rebuilt, said Gen Shuhai, a department director at NDRC.

"There is serious shortage of storage space particularly in the northeast, where a large volume of grain has been stored in the open air," Gen told a news conference on Wednesday carried on an official website (

Gen said Beijing would encourage state-owned firms to join the stockpiling scheme to make use of their storage facilities while pushing local governments to boost reserves. The government plans to add 50 million tonnes of storage capacity in 2014 and 2015.

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Deere 2015 Outlook Misses Estimates as Tractor Sales Fall

Deere 2015 Outlook Misses Estimates as Tractor Sales Fall | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |

Deere & Co. (DE), the world’s largest farm-equipment maker, forecast lower-than-expected earnings for fiscal 2015 as a slump in crop prices means farmers are buying fewer of the company’s most profitable machines.

Net income will be about $1.9 billion in the year through October 2015, Moline, Illinois-based Deere said today in a statement. That missed the $2.19 billion average of 20 analysts’ estimates compiled by Bloomberg. The shares fell as much as 3.3 percent.

“The slowdown has been most pronounced in the sale of large farm machinery,” Chairman and Chief Executive Officer Samuel R. Allen said in the statement.

Until recently, North American farmers were buying bigger and more sophisticated machines, buoyed by surging corn and soybean prices. Deere’s 8R series of tractors, for example, can cost more than $300,000 each and come with more than 300 horsepower, air-conditioned cabs and satellite-guided steering. Corn has now dropped more than 50 percent and soybeans more than 40 percent from records set in 2012.

The large farm-machinery slump “is an indicator of a sharp recession in the farm economy that could last several years after a bubble cycle,” Larry De Maria, a New York-based analyst for William Blair & Co. who recommends selling the shares, said in an interview today.

Combine Slump

U.S. farm profit will fall an estimated 14 percent this year from last year’s record, the Department of Agriculture said in August. That’s not just affecting tractors: Industrywide combine sales in the U.S. through October tumbled 21 percent, according to the Association of Equipment Manufacturers. Agco Corp. (AGCO), the third-largest agricultural-equipment maker, cut its full-year profit forecast in October.

Deere has already cut production and laid off hundreds of workers this year. It said today that its equipment sales will fall about 15 percent in fiscal 2015.

It’s not all gloom for Deere. Its construction segment is doing better as the U.S. economy improves. Sales of smaller equipment to livestock farmers, who are benefiting from lower feed costs and higher meat prices, are also helping it offset some of the decline in large farm-machinery sales, the company said.

Net income for Deere’s fiscal fourth quarter through Oct. 31 was higher than expected. Profit fell to $649.2 million, or $1.83 a share, from $806.8 million, or $2.11, a year earlier, Deere said. The average analyst estimate was $1.57 a share. Sales dropped to $8.97 billion from $9.45 billion.

Deere’s shares were down 3.2 percent at $84.96 at 9:36 a.m. in New York. CNH Industrial NV, a Deere competitor, dropped as much as 4.7 percent, while Agco declined 2.7 percent. 

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Deere warns of accelerating ag machinery market decline

Deere & Co warned of an accelerating decline in the global farm equipment market as the agricultural machinery giant cautioned of a 40% tumble in earnings over the next year, a bigger drop than Wall Street had expected.

The maker of John Deere machinery unveiled results for the August-to-October period, the fourth quarter of its financial year which, while down 10.6% at $3.16bn, exceeded market forecasts.

The results were equivalent to $1.83 per share, ahead of the $1.57 per share that analysts had pencilled in.

Samuel Allen, the Deere & Co chairman and chief executive, said the company had achieved a "solid performance in spite of weaker conditions in the global farm sector", for which profits are being undermined by lower crop prices.

Sales drop

However, the group cautioned of a deepening decline in the ag machinery market, expecting the group's own sales in the sector to fall by 20% in the year to October 2015.

Deere reported a drop of 9% in sales in the year to the end of last month, and 13% in the August-to-October period.

While revenues in Deere's smaller construction and forestry business will rise by some 5%, the group's overall sales will fall some 15% in the newly-started financial year, and earnings drop to about $1.9bn.

That result, which would be the weakest in five years, compares with a Wall Street forecast of earnings of $2.20bn, with revenues seen dropping by some 9%.

'Continued pullback'

Mr Allen, flagging the prospect of a "significant decline in sales", highlighted a "continued pullback in the global agricultural sector".

"The slowdown has been most pronounced in the sale of large farm machinery, including many of our most profitable models," he said.

Larger equipment tends to be purchased by arable farmers, which are suffering from the slide in crop values, with smaller machinery more popular with livestock farmers for which weaker grain prices are actually supporting profitability, in lowering feed costs.

By region, Deere was most downbeat over North America, seeing industry-wide sales in the region falling 25-30% this year, reflecting "lower commodity prices and falling farm incomes".

For the European Union, the drop in industry sales is expected at a more modest 10%, despite "potential pressure" on the region's important dairy sector, with South American expected to see a similar decline.

Share reaction

However, despite the gloomy outlook, the better-than-expected earnings, and Deere's reputation for conservative forecasts, limited damage to its shares in pre-market dealing.

The stock, which closed at $87.79 in New York on Tuesday, stood down 2.9% at $85.25 in before-the-bell trading.

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Québec : Charles Sirois défend Pangea

L’homme d’affaires Charles Sirois estime être « une cible facile » et il déplore qu’on ne comprenne pas son modèle Pangea.
25 novembre 2014
par Yvon Laprade - Vie Rurale

« Pourtant, quand on me laisse la chance de l’expliquer, ce modèle, on dit : wow! », a-t-il confié mardi dans une entrevue à la Terre, après avoir parlé d’entrepreneuriat international devant le Conseil des relations internationales de Montréal (CORIM).

Selon lui, ce modèle qu’il a testé au Lac-Saint-Jean — la Banque Nationale demeure « un investisseur passif », nuance-t-il — est là pour rester.

« On a 7 sociétés opérantes agricoles (SOA), présentement au Québec, et on veut en développer au moins 12 autres en région, annonce-t-il. Il y en a une qui est en voie d’être créée dans Kamouraska ». « Avec nous, plaide-t-il, les terres trouvent preneurs. À Kamouraska, on vise des terres qui sont à vendre depuis 7 ans. »

Expansion hors Québec

Il souhaite en outre prendre de l’expansion en Ontario, avec 20 à 25 SOA, sur une période de cinq ans. Des coentreprises verront également le jour dans le nord-est des États-Unis, selon ses plans. « J’adore construire des entreprises, s’enthousiasme-t-il. Mais il y en a qui ont peur du monde financier. »

Relève agricole

Pascal Hudon, président de la Fédération de la relève agricole du Québec, a profité de l’occasion pour le questionner. Ce dernier lui a reproché de déstructurer les campagnes et d’asservir une génération en créant des coquilles vides. « Pour la relève agricole, votre modèle, c’est non! » a-t-il tonné. Charles Sirois lui a plutôt répondu qu’il aurait « beaucoup de mérite à comprendre ce qu'on fait ». « Je pense sincèrement qu’on va finir par être mieux compris, a-t-il dit. Au Lac-Saint-Jean, on sent de moins en moins d’hostilité à notre endroit de la part de l’UPA régionale. »

Il fait valoir que Pangea a dépensé 5 M $ là-bas et « on va continuer de le faire ». « Chose certaine, on commet une énorme erreur lorsqu’on tente de nous associer à un fonds spéculatif. Et nous n’avons aucun intérêt à payer trop cher pour acheter des terres. »

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In wake of China rejections, GMO seed makers limit U.S. launches

In wake of China rejections, GMO seed makers limit U.S. launches | Grain du Coteau : News ( corn maize ethanol DDG soybean soymeal wheat livestock beef pigs canadian dollar) |

(Reuters) - China’s barriers to imports of some U.S. genetically modified crops are disrupting seed companies' plans for new product launches and keeping at least one variety out of the U.S. market altogether.

Two of the world's biggest seed makers, Syngenta AG and DowAgroSciences, are responding with tightly controlled U.S. launches of new GMO seeds, telling farmers where they can plant new corn and soybean varieties and how can the use them. Bayer CropScience told Reuters it has decided to keep a new soybean variety on hold until it receives Chinese import approval.

Beijing is taking longer than in the past to approve new GMO crops, and Chinese ports in November 2013 began rejecting U.S. imports saying they were tainted with a GMO Syngenta corn variety, called Agrisure Viptera, approved in the United States, but not in China.

The developments constrain launches of new GMO seeds by raising concerns that harvests of unapproved varieties could be accidentally shipped to the world's fastest-growing corn market and denied entry there. It also casts doubt over the future of companies' heavy investments in research of crop technology.

The stakes are high. Grain traders Cargill Inc [CARG.UL] and Archer Daniels Midland Co, along with dozens of farmers, sued Syngenta for damages after Beijing rejected Viptera shipments, saying the seed maker misrepresented how long it would take to win Chinese approval. 

In the weeks since Cargill first sued on Sept. 12, Syngenta's stock has touched a three-year low. ADM in its lawsuit last week alleged the company did not follow through on plans for a controlled launch of Viptera corn. 

Syngenta says the complaints are unfounded.

Bayer, told by Beijing in September that the new soybean seed, LL55, had not been approved for imports, says it will keep on trying, seven years after the company first filed its request. In the meantime, it will withhold the new seed. China granted its last import approval for any GMO grain in June 2013.


"Our objective is to get the approval and the clearance from the Chinese authorities so that we can go into a full commercial launch as soon as possible," said Frank Terhorst, global head of seeds for the company.

It can take up to 10 years and $150 million to develop new GMO seeds and further delays in Chinese approvals will raise concerns about Bayer's future investment in new GMO products, Terhorst said.

The slowdown in Beijing's regulatory process comes amidst growing consumer sentiment against GMO food in China and concerns amongst some government officials about excessive dependence on U.S. food supplies.

China is a key market for the $12 billion U.S. agricultural seeds business and for global grain traders and accounted for nearly 60 percent of U.S. soybean exports and 12 percent of corn exports two years ago. Nearly 90 percent of corn in the United States is genetically engineered, according to the U.S. Department of Agriculture, as farmers embrace technology that helps kill weeds and fight pests. 

It is a common practice to mix different corn varieties in storage and during transportation, so a lack of approval for one GMO variety can put at risk of rejection large shipments that include approved GMO grains.

The controlled releases by Dow and Syngenta aim to bring new GMO seeds to the U.S. market while assuring U.S. farmers and exporters that the harvests will not be rejected by countries that have not approved the GMO grain. 

Dow AgroSciences this month said it will limit sales of its new genetically modified corn and soybeans next year while it waits for China's approval. Farmers who grow the new Enlist corn must maintain isolation areas around their fields, use the corn only as livestock feed, and submit to audits of their compliance. 

When Syngenta released its Agrisure Duracade corn this year, which is approved in the United States but not by China, it contracted grain handler Gavilon, owned by Japanese trading house Marubeni Corp, to oversee the launch. Gavilon assigned as many as six workers at its Omaha headquarters to keep Duracade out of markets where it had not been cleared, said Greg Konsor, general manager for grain operations. 

At harvest, growers have to fill out canary-yellow tracking agreements where they identify themselves, their trucking firms and the destinations for their Duracade corn. The bright color is meant to tell buyers the shipments require special attention.

Iowa farmer Gary Vetter said that after he planted 240 acres of Duracade last spring, he received calls and certified mail from Gavilon checking on his compliance with restrictions aimed to keep the grain out of unapproved markets.

"No matter what, they want to know where the corn goes," he said.

Controlled launches, however, are at best a temporary fix because they are costly, complicated and risk accidental contamination of other export grains, said Jim Sutter, chief executive of the U.S. Soybean Export Council.

"The long-term solution is to work with our partners in China and build confidence in the process in the way we want it to work," he said. "Easier said than done."

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Uralkali prepares to start repair work at damaged potash mine

* Says no discussion yet on when production to resume

* Sinkhole appeared at a nearby mine (Recasts after company clarification on production)

By Natalia Shurmina

BEREZNIKI, Russia, Nov 24 (Reuters) - Russia's Uralkali , the world's biggest potash producer, is preparing to start repair work at part of the damaged Solikamsk-2 mine, though it is unclear when output of the fertiliser will restart.

Production at the mine was halted last week after an inflow of water at the mine, which accounts for a fifth of the company's output and 3.5 percent of global capacity, and a huge sinkhole appeared at a nearby mine as a result.

The sinkhole, stretching 30 by 40 metres and found at an abandoned mine 3.5 km (2 miles) to the east, increased concern about the future of Solikamsk-2.

An inflow of water and the resulting sinkhole in 2006 forced another Uralkali operation to shut permanently.

The governor of the Perm region where Solikamsk-2 is located said the inflow of water at the mine had "practically stopped" and there was no danger to residents of the area from any possible expansion of the sinkhole.

"The possibility of starting work at half of the Solikamsk mine is being discussed," Chief Executive Dmitry Osipov told reporters in Berezniki in the Perm region.

Later, the company clarified that this referred to maintenance work, and said there had not been any discussion with authorities about restarting full or partial production at the mine.

It quoted Osipov as saying that the company was discussing the possibility of starting "the backfilling of areas which could be considered potentially hazardous".

Regional governor Viktor Basargin said: "Fortunately everything is unfolding under a different scenario to a week ago. There is practically no inflow."

"We can say today that it's possible to start work at the second mine, up to a level of about 50 percent," Basargin said.

Uralkali's Moscow-listed shares pared gains after the company said it was not considering restarting production, and closed up 3.8 percent.

Shares in Uralkali fell sharply last week after the water inflow forced the company to halt operations at Solikamsk-2. (Writing By Timothy Heritage and Vladimir Soldatkin; Editing by Jason Bush and Pravin Char)

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