|Day's Range||376.75 - 389.50|
Corn and soybean futures erased earlier losses to trade in positive territory Friday after the Agriculture Department updated figures on production and stocks. The government estimated the 2019 U.S. corn crop at 13.692 billion bushels, up 31 million bushels from its previous figure, reflecting a higher yield that more than offset a reduction in harvested acres. Ending stocks for the 2019-20 marketing year were reduced by 18 million bushels to 1.892 billion, reflecting heavier consumption. Soybean production was pegged at 3.56 billion bushels, up 8 million bushels on a higher average yield. The estimate of soybean ending stocks was unchanged at 475 million bushels. Corn for March delivery was up 2 cents, or 0.4%, at $3.8525 a bushel, while March soybean futures rose 1.25 cents, or 0.1%, to $9.4475 a bushel.
China has suspended its plan to implement a nationwide gasoline blend containing 10% ethanol this year, three sources briefed on the matter said, following a sharp decline in the country's corn stocks and limited production capacity of the biofuel. China was expected to increase imports of U.S. ethanol after the recent announcement of Phase 1 of a trade agreement. Beijing announced in September 2017 that the national gasoline supply would contain 10% ethanol from 2020, part of a broad reform of its corn industry that at the time was suffering from a massive surplus.
Questions are being raised over how China will meet a target of spending billions of dollars more on agricultural goods after the world’s second largest economy said it will not increase its annual low-tariff import quotas for corn, wheat and rice.
China will not increase its annual low-tariff import quotas for corn, wheat and rice to accommodate stepped-up purchases of farm goods from the United States, senior agriculture official Han Jun said on Tuesday, according to local media group Caixin. The move could make it harder for Beijing to meet import commitments in a Phase 1 trade deal due to be signed next week. U.S. President Donald Trump said last month the agreement would likely double China's $24 billion in pre-trade war purchases to $40-$50 billion annually.
(Bloomberg) -- The trade war, wild weather and angry farmers all generated major headlines in 2019 on corn and soybeans. But thinly traded niche commodities posted the most impressive gains for the year.Rice, vegetable oils and lumber all posted price increases of at least 25%. The reason: Crazy climate conditions were magnified in smaller markets where there’s often less certainty over the supply cushion. Lower trading volumes can also make for exaggerated price moves.Here are some of the little markets that saw large gains:Rice and OatsExcessively wet field conditions hampered U.S. planting and harvesting of rice, soybeans, corn and spring wheat. While crop concerns helped spark annual gains for all those markets, rice’s 28% surge was outsized.As concerns mounted over U.S. supplies, Brazil’s rice output was also hampered. That means there are fewer options for countries that typically source supplies in the western hemisphere.“We have one of the smallest rice crops on record in the western hemisphere,” said Milo Hamilton, president of Austin, Texas-based Firstgrain, a rice-trading advisory company. “The domestic price in Brazil is shooting through the roof.”Oats are on pace to post a fourth straight yearly gain, the longest streak since 2007. The climb was propelled in part by rising demand for oat milk, according to Scott Shiels, grain procurement manager at Grain Millers Canada in Yorkton, Saskatchewan.It’s hard to tell if the gains will last, since relatively better prices may entice farmers to plant more in 2020.“Rice has outperformed soybeans and corn, so that will create some acreage next year and probably some lower prices,” said Jack Scoville, vice president at Chicago brokerage Price Futures Group.Vegetable OilsPrices for cooking oils saw a big boost. The move comes amid the spread of African swine fever in Asia, which is killing off tens of millions of hogs. With a shrinking hog herd, Chinese soybean processors are crushing less to make livestock feed, thereby also reducing supplies of soy oil. The palm-oil market has also been helped by supply concerns and expectations for robust biofuel demand.Soybean oil traded in Chicago is up 27% in 2019, heading for the largest increase since 2010. Palm oil traded in Malaysia jumped about 47%.LumberLumber prices had a bit of a roller-coaster ride in 2019. First, Chicago futures fell as much as 15% to this year’s low of $286.10 per 1,000 board feet in late May. The wet spring caused U.S. housing starts to tumble, while producers in Canada’s British Columbia were struggling to manage supplies.Tides turned when lumber companies finally curbed production, while U.S. housing starts rebounded. Prices are now on pace for an annual gain of 27%.The rally is expected to continue in 2020. The Canadian curtailments will keep supplies tight in North America, said Kevin Mason, managing director of ERA Forest Products Research.“It’s going to be definitely a much stronger market,” Mason said.To contact the reporters on this story: Michael Hirtzer in Chicago at email@example.com;Ashley Robinson in Winnipeg (Non BLP Loc) at firstname.lastname@example.orgTo contact the editors responsible for this story: James Attwood at email@example.com, Millie Munshi, Reg GaleFor more articles like this, please visit us at bloomberg.com©2020 Bloomberg L.P.
(Bloomberg) -- China approved a new strain of genetically modified soybeans developed by a U.S. company, a move that could bolster looming trade talks.The variety approved for import is an insect-resistant soybean from Dow AgroSciences LLC, according to a list published by China’s agriculture ministry on Monday. The nation also approved a new type of GMO papaya and renewed permits for 10 crop varieties, including corn and canola.China and the U.S. are gearing up to sign the first phase of a trade deal, with the South China Morning Post reporting Chinese Vice Premier Liu He is set to lead a delegation to Washington on Jan. 4. The countries agreed to speed up the approval process for imports of GMO crops as part of efforts to boost bilateral trade.“The news helps confirm China’s opening of its market to U.S. GMO products and dropping additional non-tariff barriers,”said John Payne, senior futures and options broker at Daniels Trading in Chicago.GMO crops have been a source of tension with the U.S. arguing China’s stance isn’t based on science and has been used as a non-tariff barrier. In 2013, China rejected several cargoes of corn and distillers dried grain from the U.S. due to the presence of a GMO variety that took the Asia nation almost five years to approve, said Darin Friedrichs, a senior analyst at INTL FCStone in China.The papaya strain, which is resistant to some viruses, has been genetically altered by U.S. research institutes. Import permits for 10 strains, developed by companies including BASF SE, Dupont Pioneer and Bayer AG’s Monsanto unit, have been renewed. These varieties, including one strain of corn, four of soy and four of canola, will be permitted for imports until December 2022.China purchases more than 60% of globally traded soybeans, mainly from Brazil and the U.S., and is also the largest importer of canola, especially from Canada. The oilseeds are processed into protein-rich meals to meet demand for livestock feed. The Asian country is the second-largest corn consumer.“All things point to fantastic Chinese demand in the future which should buoy the commodity complex,” Payne of Daniels Trading said.Soybean futures for March delivery rose 1.2% to close $9.525 a bushel on the Chicago Board of Trade on the bullish outlook for a trade deal. That marked the contract’s highest settlement since Oct. 24.To contact Bloomberg News staff for this story: Niu Shuping in Beijing at firstname.lastname@example.org;Isis Almeida in Chicago at email@example.comTo contact the editors responsible for this story: Millie Munshi at firstname.lastname@example.org, Patrick McKiernanFor more articles like this, please visit us at bloomberg.com©2020 Bloomberg L.P.
(Bloomberg) -- In the agriculture world, news of the partial U.S.-China trade deal has sparked a lot of buzz about soybeans. It turns out, wheat could actually end up being a bigger surprise winner.Speculation is mounting that China will work to fill its wheat-buying quota as part of the detente, a pledge it failed to stick to in the past. While the allotment, set by the World Trade Organization, could be filled by supplies from any country, it still means additional global demand at a time the market is tighter.Purchases of soybeans, meanwhile, are likely to be hampered by a deadly pig disease that’s reducing demand. The oilseed is crushed to make cooking oil and meal, a key ingredient in hog feed.“The potential that China could secure an additional 5 to 6 million tons of world wheat annually is underpinning Chicago Board of Trade wheat,” Chicago-based consultant AgResource Co. said in a report Thursday.Wheat traders expect China will soon release the quota, according to AgResource, and prices are already reacting. On Friday, futures for March delivery rose as much as 2.2% to $5.61 a bushel in Chicago, the highest for a most-active contract since August 2018. Prices settled at $5.5625. Futures traded in Paris reached the highest since June.If Chinese purchases were to reach the quota mark of 9.6-million metric tons, that would represent a big jump in demand. In the six years through 2017, buying has averaged less than 50% of the allotment.“Momentum traders continue to push wheat prices higher, with fundamental support from hopes that the Phase-One trade deal with China will require it to keep the commitments it made to join the World Trade Organization, increasing imports of wheat by 5 to 6 million metric tons per year,” Arlan Suderman, chief commodities economist at INTL FCStone, said. “We don’t know that to be the case, but such is being rumored -- providing support for the rally in wheat.”China will likely fill its quota with the cheapest wheat in the market. While that’s usually grain from the Black Sea, U.S. supplies have been getting more competitive and international buyers have recently turned to American shipments.In the week ended Dec. 19, American exporters sold 715,000 tons of U.S. wheat. That follows the previous week’s sales of 868,600 tons, which was the most in six years, according to USDA figures, excluding skewed data released after the federal government shutdown earlier this year.Relatively tighter corn supplies in South America and wheat in top shipper Russia have made American grain more competitively priced. Heavy rain in Europe is also making it harder for growers there to plant, with Consultants Strategie Grains expecting the crop to drop by 3.6% in the European Union. In western Australia, wheat yields have been disappointing due to hot and dry weather.China hasn’t purchased significant volumes of American supply since October. But, underscoring U.S. wheat’s competitiveness in world markets, other top Asian importers including Indonesia, Japan, Philippines and Taiwan have snatched up supplies in recent weeks, according to USDA data.While some traders remained skeptical China would import much U.S. wheat, Shanghai JC Intelligence Co., the Asian nation’s most clued-in agricultural consultant and researcher, recently estimated purchases of Americans supplies could reach 5 million tons as part of an effort to buy $40 billion in agricultural products from the U.S. under the partial trade deal. Such buying would vault China to be the biggest importer of U.S. wheat.Corn could also benefit if China moves to fill grain quotas, but to a smaller degree. At 7.2 million tons, the allotment is not only smaller, but the Asian nation has historically done a better job of filling it, meaning it wouldn’t represent a very big increase in demand.“The impact on corn values is far less,” AgResource said.(Updates with analyst comment in seventh paragraph, JCI estimate in 12th.)To contact the reporters on this story: Isis Almeida in Chicago at email@example.com;Michael Hirtzer in Chicago at firstname.lastname@example.orgTo contact the editors responsible for this story: Tina Davis at email@example.com, Millie Munshi, Patrick McKiernanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- There was nothing typical about this year’s grain season in the U.S. Midwest, with one exception: The size of the corn crop.Wild weather delayed plantings by the most on record, a strong dollar hurt exports, the trade war with China hit demand for the corn-ethanol industry and early snow meant some growers couldn’t even finish harvesting. Despite it all, the crop proved resilient.“We ended up getting more planted than we thought,” said Heath Barnes, chief executive officer of Mercer Landmark, a farm cooperative in west-central Ohio. “We planted into terrible field conditions, and we thought yields would probably not be that great. It ended up being not bad.”Farmers planted 89.9 million acres of corn this year, way more than the market had expected after a spring deluge sparked the record delays. The big number sent prices lower and angered farmers, who thought the figure must have been overstated. Growers were so upset that the U.S. Department of Agriculture was forced to pull all its staff from a crop tour after a government employee was threatened. After all that, samples gathered by scouts on the tour vindicated the agency’s yield forecasts.Production is only projected to be about 5% lower than a year earlier even as floods left record amounts of land idle, with producers, especially in the Eastern Corn Belt, unable to get seeds in the wet and soggy ground.The number of unplanted acres showed how troublesome the season had been, but it was also a signal for farmers that could get back in the fields to plant more corn, said Seth Meyer, an associate director at the University of Missouri and former chairman of the USDA’s World Agricultural Outlook Board.“That’s how we ended up with that acreage that folks were really shocked with,” he said in an interview at the National Grain and Feed Association’s Country Elevator Conference in Indianapolis earlier this month. Farmers “need to get real comfortable with” the production estimates now from the USDA, he said.March corn futures fell almost 5% this year to trade near $3.88 a bushel on Thursday.Still, many farmers don’t believe the agency’s numbers and are holding back on selling. They’re expecting supplies to end up tighter than forecast, which would help prices recover.Iowa grower Ben Riensche is still holding 90% of his corn harvest, protesting prices he says don’t accurately reflect farmer struggles. So far, he’s been proven right, with Chicago futures up 11% since a September low.“We are going to have an explosive upside at some point,” he said. “I bet you an ice cream cone that we will be $4.20 a bushel by Valentine’s Day.”Winter WeatherEarly winter weather also added to speculation that the harvest will end up smaller. Many bushels got left in the ground in northern states like North Dakota because of snow. Those crops could end up with yield losses between 20% and 40% when gathered next year.Unharvested acres could tighten supplies after a stronger dollar helped send American exports down by more than 50% this season. Meanwhile, the trade war between Washington and Beijing had cut demand for the ethanol industry, where lower margins during the summer prompted many plants to shut down.“With the bushels up north, I don’t think the market could handle it right now, so it’s kind of a blessing in disguise that some of that is postponed until later,” said Dustin Loseke, who manages an elevator in Waverly, Illinois, for U.S. grain handler Scoular Co.The government offered a $28 billion bailout for farmers hurt by President Donald Trump’s trade wars. So far, that’s helped growers have enough cash flow to keep their corn in the bins. A recent partial trade deal with China could also benefit them if it helps boost ethanol exports and increases the amount of corn China brings in under quotas set by the World Trade Organization, a promise the Asian nation has never fulfilled. For now, market reaction remains muted.“Farmers are just upset, irritated,“ said Joe Sanderson, CEO of the third-largest U.S. chicken producer Sanderson Farms. “They had a bad planting, and then they had perfect pollination and perfect rain. So they made more than they thought they were going to make.”“They’ve had a bad time with this crop, and they don’t want to sell it,“ he said.(Updates prices in eighth paragraph)\--With assistance from Michael Hirtzer and Dominic Carey.To contact the reporter on this story: Isis Almeida in Chicago at firstname.lastname@example.orgTo contact the editors responsible for this story: Tina Davis at email@example.com, Millie Munshi, Patrick McKiernanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Corn futures in the March contract is trading higher for the 3rd consecutive session up another $0.06 at 3.86 a bushel or 1.51% hitting a 5 week high breaking out to the upside in my opinion.
U.S. Senator Chuck Grassley said on Tuesday he has been assured by the White House that 2020 biofuel blending mandates will be finalized in accordance with a September agreement between the administration and biofuel and corn producers. The Iowa Republican's comment reflects the intense pressure on President Donald Trump to appease anger over his biofuel policy in the U.S. Farm Belt, a crucial political constituency in next year's election that has often clashed with his allies in the oil industry. Grassley said in a call with reporters on Tuesday morning that he had been assured about the biofuel mandates in a recent conversation with Office of Management and Budget Acting Director Russell Vought, and had also held recent conversations on the issue with Trump's economic adviser, Larry Kudlow.
U.S. Environmental Protection Agency Administrator Andrew Wheeler told a biofuels company on Thursday that the agency is working to address industry concerns over biofuel blending rules that have sparked outrage across the Farm Belt, according to a source familiar with the matter. Biofuel producers and representatives of corn farmers are unhappy with the EPA's expanded use of waivers exempting oil refineries from their annual ethanol blending requirements. The EPA plans to send the proposed 2020 blending mandates to the White House's Office of Management and Budget for approval by the end of the week, according to two sources familiar with the matter.
Russian President Vladimir Putin on Thursday bestowed the country's top state honour on two pilots who safely landed a plane carrying more than 230 people in a corn field after a bird strike. At a ceremony in the Kremlin, Putin handed pilot Damir Yusupov and co-pilot Georgy Murzin the Hero of Russia awards, praising the crew's courage and professionalism. "They were able to land the plane literally in an empty field and saved dozens of lives," Putin said.
Indian group NAFED has issued an international tender to purchase and import up to 100,000 tonnes of corn (maize), European traders said on Wednesday. The corn should be sourced from Ukraine, they said. NAFED, the National Agricultural Cooperative Marketing Federation of India, is seeking corn free of genetically-modified organisms (GMOs), they said.
Corn futures rose on Friday, headed for their first gain in seven sessions, after a monthly report from the U.S. Department of Agriculture revealed a lower estimate for domestic 2019/2020 corn production. The USDA said corn production is forecast at 13.661 billion bushels for the current marketing year, down 118 million from last month's estimate. The government agency also lowered its corn yield forecast by 1.4 bushels per acre to 167 bushels per acre. "The lowered corn yield did seem to put some support into intraday prices," said Sal Gilbertie, president and chief investment officer at Teucrium Trading. "The global balance sheet is still tightening versus last year in corn," he said. The most-active December corn contract rose 6 cents, or 1.6%, to trade at $3.81 1/4 a bushel in Chicago, headed for the first session gain since Oct. 30, according to FactSet data.
Grain merchant Archer Daniels Midland Co is waiving the fees it charges farmers to dry grain at three of its Midwestern corn processors as it seeks supplies to keep the plants running at optimum levels through a slow, wet harvest period, a spokeswoman said on Thursday. Farmers, who are weeks behind schedule in much of the U.S. corn belt due to rainy harvest conditions, have been reluctant to sell their grain at current price levels. Free drying offers them a significant break as tight supplies of propane needed to run grain driers have sent costs soaring this fall.
Months after historic floods ravaged the U.S. Midwest, farmers scrambling to harvest their crops face a new headache: finding fuel to dry their soaked grains. Normally, farmers use propane as fuel for grain dryers to reduce moisture levels in corn crops to ready for sale or to safely store the grain.
Excessive rains and an October snowstorm have stalled the harvest in the U.S. grain belt's northern tier, one more blow to farmers already struggling with the effects of planting delays and a trade war that has pressured commodity prices. The corn and soybean harvests are especially delayed in North Dakota and Minnesota - precisely the states suffering the most from the U.S.-China trade war due to their reliance on exporting to Asia through West Coast ports.
An ethanol production increase expected for Brazil, the world's second largest market for the biofuel, will not be enough to cope with rising demand and the country will continue importing fuel from the United States to cover the shortfall. According to analysts from S&P Global Platts, demand for ethanol in Brazil will increase around 2.5% per year in coming years, due to a new federal policy to boost use and to the price advantage over gasoline in the local market. "Even with new capacity coming from corn-based ethanol plants, that won't be enough to supply increasing demand," Beatriz Pupo, senior biofuels analyst for Platts, said on Wednesday.
Corn farmers, ethanol producers, refinery representatives, energy traders and state and local officials from the Midwest all blasted away at the Trump administration's proposed biofuels plan for next year during a public hearing on Wednesday hosted by the U.S. Environmental Protection Agency (EPA). The hearing in Ann Arbor, Michigan, marks the second public meeting on the topic in as many days, airing the grievances of the opposing oil and corn constituencies President Donald Trump has been working to win over ahead of next year's election. At issue is a proposal unveiled this month by Trump’s EPA that would increase the amount of corn-based ethanol some oil refineries must blend next year to make up for volumes the agency expects to waive under its Small Refinery Exemption program.
According to the National Confectioners Association, the US makes 35 million pounds of the treat, annually, generating $36 million in sales. Candy overall is a $35 billion industry in the US, projected to near $40 billion by 2023. In the US, candy corn is the most favored Halloween treat after chocolate.
Representatives of both the oil and corn industries are poised to sound off against the Trump administration's proposed biofuels plan for next year during a public hearing on Wednesday hosted by the U.S. Environmental Protection Agency. The hearing in Ann Arbor, Michigan, will mark the second public meeting on the topic in as many days, airing the grievances of two key political constituencies that President Donald Trump has been working hard to win over ahead of next year's election. At issue is a proposal unveiled this month by Trump’s Environmental Protection Agency that would increase the amount of corn-based ethanol some oil refineries must blend next year to make up for volumes the agency expects to waive under its Small Refinery Exemption program.