Soybeans climb on not a lot really, Christmas bonuses eyed
It's raining, its pouring, we're making millions, this market is going to go much higher yet, I can't believe my luck etc.
Corn climbs to new highs but hey lets push it MUCH more
"It was up again, whoopie!! I can't believe that we can push it much higher but, hey lets give it a go," said Bill Nelson Mandela.
"My missus wants a villa in Acapulco, and my mistress is very demanding" said Mike Zulu.
Wheat review: ends higher for absolutely no reason whatsover
"It's incredible, there was no reason for it to go up but it did," said Greg Wiggler
The European Union is a little bit annoyed that the Yanks are pissing all over us once again.
"I've always liked the sound of my own voice," said Peter Power, a spokesman for EU Trade Commissioner Peter Mandelson.
We've handed the Yanks a massive loophole and they're milking it for all they're worth.
NO WE HAVEN'T SAY U.S.
It's just a coincidence that you are stupid enough to let us increase our exports from about 7,000 tonnes in 2005 to about 1 million tonnes in 2007.
Brussels now has up until March 13, 2009 to piss around and prevaricate whilst the Yanks mercilessly continue to tear the arse out of the job, laughing all the way to the bank.
After that Brussels will have a bit of a moan, the Yanks will say, ha ha, well we aren't going to eat your stinking French cheese then, Brussels will say sorry, then we'll all carry on like before.
Corn futures are expected to open steady to 1 higher; soybeans 3 to 6 lower; wheat 8 to 9 lower. Some traders took profits ahead of the weekend, but old-crop corn futures held small gains. It will be drier in the next week, but some showers are still expected.
This report comes from the highly informative University of Illinois Extension website. They've done a tour of the entire Cornbelt and this is what they are reporting. Is it just me or does this not read anywhere near as bad as the Dow Jones's of this world are reporting?
Certainly in the time I've been doing this blog it is noticeable that very often the big media news services regularly churn out the same stuff, in the same order, quoting the same old handful of sources. Given that we are now hearing the opinions of Goldman Sachs, Morgan Stanley etc questioned in relation to their pontifications on crude oil, could it not just be possible that the same old sources are "talking their own book" when it comes to the grains markets as well??
On with the review of conditions state-by-state:
ILLINOIS: Surplus moisture covers 61% of the state, and only 1% is in the short category. 88% of the corn has emerged, probably meaning 12% has yet to be planted. 82% is fair to good. Only 45% of the soybeans have emerged, probably meaning the other 55% are still in the bag, and 86% of the crop that is up is listed fair to good. Heavy rains have impeded planting progress, but warmer temperatures have helped the crop that is growing.
INDIANA: 99% of the soil moisture is evenly split between adequate and surplus, With severe flooding in central and southern parts of the state with half of the counties rated as flood disaster areas. 94% of the corn has been planted, and 83% has emerged with 77% in fair to good condition. 73% of the soybeans have been planted, and 80% of the emerged crop is rated fair to good.
IOWA: Three-quarters of Iowa has surplus moisture with the balance listed as adequate. 89% of the corn has emerged with only 2% left to plant, however 81% is rated only fair to good. 86% of the beans are in the ground, with 63% emerged and 83% of those are only fair to good condition. USDA reports severe weather has flooded cropland, pasture, and hay, delaying hay harvest and causing a shortage of feed for cattle. Fences have also been washed out, creating problems using pastures.
KANSAS: 90% of the state has adequate to surplus moisture, but is not as wet as states to the east. Subsoil moisture is listed 66% adequate. Wheat is ripening on par with 2007 with 81% reported free of insects and 50% free of disease. Forage, sorghum, and other crops are generally in good condition with farmers reporting plenty of pasture and water.
MICHIGAN: Farming weather prevailed over Michigan with 5 days suitable for fieldwork, and two-thirds of the state reporting adequate moisture in both the topsoil and subsoil. 85% of the barley and 83% of the oats are in fair to good condition. USDA reports, “Warm temperatures and rain this week advanced crop development as well as boosted farmer’s spirits.” Corn and soybean planted is all but complete, crops have emerged, and corn is being side-dressed.
MINNESOTA: Soil moisture is 68% adequate and 31% surplus, but “Crop conditions were rated mostly good to excellent in spite of heavy rains and strong storms that occurred during the week.” Corn and soybean crops were described as continuing to emerge rapidly with the help of average temperatures. Wheat, oat, and barley crops were progressing, but substantially behind recent years in their stage of development.
MISSOURI: Soil moisture is 96% adequate to surplus and about evenly split. That caused crop reporters to say fieldwork was at a near standstill for another week, due to flooded areas and continued heavy rains. Spring tillage remains 22% incomplete, and the rains have delayed corn, soybean, and sorghum planting.
NEBRASKA: 60% to 70% of the topsoil and subsoil has adequate moisture, and most of the rest is rated as surplus, indicating few days suitable for fieldwork in the past week. 95% of the corn crop has emerged and 83% is in fair to good condition. 59% of the beans have emerged and 88% are in fair to good condition. Ratings for planting, emergence, and quality are all behind recent years. 79% of the wheat and 86% of the oats are in fair to good condition. USDA reports, “Strong winds damaged farmsteads and over turned pivots, combined with hail and heavy rains across parts of Nebraska. The storms caused flooding and damage to crops as well as roads.”
NORTH DAKOTA: While 72% of the soil has adequate moisture, 20% is actually short, and nearly 60% of the subsoil is short of moisture. Spring wheat development was about on par with last year, and durum wheat was ahead of recent years. Barley, oat, canola, and sunflower crops were also generally keeping pace with 2007 and the 5 year average. And USDA reports showers in the southeastern part of the state last week were “welcomed.”
OHIO: 57% of the state has surplus moisture with the balance reporting adequate supplies. 92% of the corn and 58% of the beans have emerged, with 75% of the corn and 81% of the beans listed as fair to good condition. 69% of the oats and 76% of the winter wheat were rated in good to excellent condition. Southern Ohio received 3-6 inches of rain, leaving flooded fields that will require replanting.
SOUTH DAKOTA: Heavy precipitation halted fieldwork, leaving one-third of the state with surplus soil moisture and the rest with adequate amounts, but also with reports of flooding and hail damage. Subsoil moisture is in good shape. However crops are significantly delayed in their development compared to last year and the five year average. That includes winter wheat, barley, oats, and spring wheat. Corn planting is 95% complete, and the emerged corn is about half the size of the five year average at this time. While the recent rains delayed fieldwork, the rain was needed for soil recharge.
FWi -- By the eve of the 2008/2009 fertiliser season, which officially started on 1 June, prices had been issued for some time and brisk business had already been completed.
Farmers and retailers are so well acquainted by the various factors in the global fertiliser market contributing to todays extraordinary prices, that cost is not so much an issue as volume.
By issuing prices for June, July and August cash delivery, manufacturers have managed to offer at least some kind of early delivery rebate structure and have avoided the kind of mad panic buying which has characterised June in some previous years. All retail customers have been given an allocation of product and are reported to be managing well. The prices are £325/t, £330 and £335 for the three months respectively.
To further attempt to inject some structured confidence into the market, smaller volumes have been tentatively offered through to the end of the year at £339, £342, £345 and £348 for September, October, November and December respectively.
Given that GrowHow has no control over its energy costs, or indeed over global pricing, this strategy includes a degree of risk. Compare the situation in France where ammonium nitrate costs are published only for the month of June. Only time will tell whether this truly represents a reflection of loyalty to merchant and farm customers, or an uncanny insight into future energy pricing.
Potash prices through the roof
While one could argue the modest changes in gas pricing could be absorbed by the manufacturer from time to time, the basic costs of P, K and S are something they can do nothing whatsoever about.
Therefore, compound prices have been published only for June and July and production of some higher PK analyses has been suspended by some suppliers. Potash prices are through the roof with a price of $1,000/t forecast for the second part of the year.
This will particularly affect the aftercut silage market where potash is so important from the agronomic point of view. Usually on a par in price with straight AN, aftercut blends of N and K are now as much as Â£345/t depending on analysis. This is a market where careful attention to unit prices of nutrients pays off, as there are many analyses to choose from. A less saturated blend will be cheaper per tonne, but may not necessarily be the best value.
The UK fuel crisis has worsened today following Wayne Rooney's last minute decision to fly his raggle-taggle chavvy gypsy family out to Italy to witness his lavish wedding.
Rooney was estranged from the bulk of his beer-swilling boob-flashing toothless brood following their media-hungry attacks on his pointless fiancee. However, recent talks with close family members resulted in 14 Boeing 747's being hired to fly out the Rooney clan to Portofino in a last minute reconciliation.
While millions of Britains queued by the pumps for a the last few remaining drops of petrol priced at £1.30 per litre, tankers were diverted to Heathrow to fuel the jets.
Meanwhile the Ministry of Panicking has warned motorists not to panic, sparking widespread panicking.
Corn is up again this morning with the July contact rising as much as 13 cents, or 1.8 percent, to $7.22 a bushel in after-hours trading on the Chicago Board of Trade and stood at $7.13 3/4 at 10:09 a.m. BST. This is within sight of the fresh all-time high set during last night's session of $7.25 1/2.
There aren't really any fresh developments for corn, its simply rain, flooding, yield loss fears etc. The market may see a technical correction later today, ahead of the weekend, as it appears to have been heavily overbought, an analyst warned. Corn's 14-day relative strength index, a gauge of momentum, has held above 70 since June 10, signaling prices may decline.
July soybeans are up 3 3/4c at the moment also supported by the weather. Again it will be interesting to see if there is a sell-off and some profit-taking ahead of the weekend this afternoon depending on what the latest weather forecasts have got to say.
Whilst there doesn't seem to be tremendous amount of warmth in the weekend forecasts at the moment, there does at least seem to be ideas of an end to deluges of rain, what rains are likely to be around are cited to be scattered and light.
Wheat is lower this morning with the July contract 7c easier at $8.44/bushel. Reports are coming in that yields are consistently better than normal as the U.S. winter-crop harvest progresses in states from Texas to Kansas.
It will also be interesting tonight if there is a pre-weekend sell-off in corn, as wheat is clearly the weak leg of the trio at the moment. As one analyst said last night "If this corn ever stabilizes or works its way down, then this wheat could go a lot faster to the downside."
(Farm Press) -- Mid-South farmers are finding for the second straight year that just because Chicago wheat futures are at record highs doesn't mean prices at their local grain elevators will be at those levels.
Growers in Arkansas and Missouri are reporting cash offers from $1.50 to $2.50 per bushel below Chicago soft red winter wheat futures as they begin to deliver new crop wheat to their local elevators. Last year's harvest basis widened to about $1 per bushel in the Mid-South.
Couple those low prices with the absence of a wheat marketing loan because of delays in passing the new farm bill and wheat growers are experiencing a bitter end to what began as a growing season full of promise. (Chicago wheat futures briefly rose above $12 per bushel at one point in March.)
Noting that farmers in southeast Missouri were just beginning their wheat harvest, Rep. Jo Ann Emerson, R-Mo., asked Agriculture Secretary Ed Schafer to expedite the writing of the regulations for the wheat marketing loan authorized in the 2008 farm bill. Rep. Marion Berry, D-Ark., also signed a letter sent by Emerson to Schafer.
"Wheat farmers are starting their harvests as soon as tomorrow in southern Missouri, and they face a unique set of circumstances," Emerson said in the letter dated June 5.
"Due to the delay in finalizing a new farm bill, these producers and their crops are essentially unprotected at a time of extraordinary negative basis."
With the anticipated size of this year's wheat crop and the rising cost of farm inputs, many farmers will be forced to make sales as their wheat leaves the farm, Emerson noted. "Even at a time of rising retail food prices, American farmers clearly need the support of the Marketing Assistance Loan Program to help offset the tremendous risks they face."
One farmer from Keo in central Arkansas said the basis at his local elevator had widened to $2.50 a bushel. The increase in the basis dropped the cash price of the wheat to about $5 per bushel when he delivered the wheat on June 4.
"They said it's because of problems at the Gulf (of Mexico)," he said. "I don't know what the explanation is but I know a lot of growers will be disappointed when they begin trucking wheat to the elevator."
Lyndale Foods, a Sale-based company which specialises in the manufacturing and sale of various sweet and savoury bakery products, was put into administration last week, local media report.
The group owns three businesses, Hampsons, Peter Hunt's and Sayers, which together supply products to retailers, food services and wholesalers nationwide, as well as to the group’s own retail network of over 200 stores spread out across the North West of England.
The group also operates three factories, one each in Bolton (Hampsons), Liverpool (Sayers) and Kearsley (Peter Hunt's). The Hampsons and Sayers plants manufacture breads, savouries, sanwiches, cakes and pastries for sale in the group's outlets, whilst the Peter Hunt's factory supplies various retailers with savoury pies and pastries.
Both the Hampsons and Sayers businesses have been acquired by buyout management teams but administrators are still looking for a buyer for Peter Hunt's. “We are in negotiations with a couple of parties,” Dermot Power, administrator with BDO Stoy Hayward, said. "It went out to market a few weeks ago and, although buyers have looked at it, they may have been waiting for our appointment.”
The buyouts secured the jobs of 230 workers at Hampsons’s Bolton bakery but Sayers’s Liverpool factory and around 40 Hampsons stores will close with a combined loss of 450 jobs.
An additional 180 jobs are under threat at the Peter Hunt's Kearsley bakery, near Bolton. The factory was closed on Wednesday and it was unclear when it would re-open.
The difficulties which the group had been experiencing for a few years were made worse by a recent surge in raw material and oil prices, Sayers chairman Mr Birnie was reported as saying. “The situation was simply unsustainable and we have had to act now in order to protect the long term futures and job security for the remaining 1,500 employees around the North-west."
For the week ended June 5th:
The USDA's weekly export sales report is released at 13.30BST today, this is what traders are expecting:
Corn futures are expected to open steady to 2 higher; soybeans 15 to 20 lower; wheat 14 to 17 lower. Corn prices are still firm but soybeans and wheat slipped from extreme highs on technical selling. Expect a great deal of price volatility as drier weather enters the Corn Belt.
Grains futures sold off heavily late at the end of a volatile overnight eCBOT session. July wheat finished close to session lows 15c easier at $8.54/bushel, having set session highs at the opening 14c higher at $8.83/bushel.
July soybeans closed the overnight session 10c lower at $15.06 1/2c, having been as much as 20 1/4c higher early on. New crop months closed generally 24-25c easier.
Corn remains the strongest leg with July closing 1 1/4c firmer at $7.04 1/2c, although well off session highs of $7.21 3/4c.
(AP) -- Embattled mortgage lender Thornburg Mortgage is reporting a $3.31 billion loss for the first quarter, and says loan delinquencies are likely to continue to increase "modestly" for the rest of the year.
Before paying preferred dividends, Santa Fe, N.M.-based Thornburg Mortgage Inc. lost $3.31 billion, or $20.64 per share, for the quarter ended March 31, compared with profit of $75 million, or 62 cents per share, a year ago.
Thornburg specializes in larger mortgages, known as "jumbo loans," which total more than $417,000. The company says the value of securities it owns dropped drastically during the quarter amid a slowing economy and continued housing slump.
It appears that the current NASA Pheonix space mission has found evidence of oil on Mars!
"Drilling will begin straight away, we are very excited about this new find, Mars has massive untapped demand," enthused a Goldman Sach's analyst.
"We forecast that demand will outstrip supply very quickly pushing Martian prices to over $500/barrel in the next few months," he went on.
"With the potential upcoming war between The Klingons and The Mysterons keeping tensions in outer space high, there's really only one way for this market to go," said an official from Morgan Stanley.
The CFTC say that they will launch trading in a new Martian oil contract as early Monday 16th June, called "Captain Scarlet No1 Sweet."
Analytical report Strategie Grains has raised its forecast for the 2008-09 European Union cereal harvest Thursday to 291.3 million tons, a 14% rise on the year.
This is up 2.2 million tons from Strategie Grains' May forecast, with higher output projected for corn, soft wheat and barley crops.
However, Strategie Grains warned the outlook still depends greatly on weather in the coming weeks.
E.U. soft wheat output was revised up 700,000 tons to 129 million; barley output up 690,000 tons to 61.8 million; and corn production up 800,000 tons to 58.4 million.
Times Online -- Argos today provided fresh evidence that the consumer slowdown has spread to every corner of the high street as it reported first quarter like-for-like sales had fallen flat and its executives spoke of their increased pessimism for the year ahead.
Shoppers are tightening their purse strings on even the cheapest outlays for their homes, after the failure of the usual spring house moving season. The downturn in sales of Argos homewares will affect profits in the division.
Asked if the group's outlook had changed since the last trading update two months ago, Richard Aston, finance director of Home Retail Group, parent company of Argos, said: "We are still concerned for the consumer outlook. If we are saying anything is different, perhaps we have a more pessimistic outlook view of 2009 than when we did our three-year review at the start of the year."
Home Retail was the worst perfomer in the FTSE 100 this morning as its shares slipped 9.5% per cent to 203p in early trading, wiping £186 million from its market value.
Mr Aston said his change of sentiment, which was "an intuitive feeling", was based on the changing view in the City about the direction for interest rates over the past few weeks.
"I think 2009 will be a little worse. We can't be concise - I think that is a general view. The current view is that we are trading in a difficult environment."
Well, who'd have thought it? Chicago wheat up limit, London wheat up £8. The threat of seeing my arse in Burtons window appears to drawing nearer! But, as Chris Tarrant would say, we don't want to give you that (not just yet anyway).
Now I might be wrong here (again), but I kind of suspect that if you were a US farmer ringing up your local elevator to sell him some wheat today, I don't somehow seeing him offering you 60c/bushel more for it than yesterday. Neither do I imagine that the physical market in the UK has moved up eight quid in 24 hours either.
If you are a US farmer then your winter wheat harvest is probably underway. Yields in many places are said to be 20-30% up on last year. Total output is forecast to be 20% up on last year. Elevators are full of the stuff. Exports are sluggish (who'd want to buy just before this huge crop comes onto the market?). And the spring wheat crop is doing well (crop conditions jumped 6% good/excellent this week to 63%).
US wheat prices are now rising, they say, because of the clear & undoubted problems with corn. Wheat is being seen as more of a feed commodity now in the US as corn threatens to hit $8/bushel. I can buy into that opinion to a degree. However US cattle & hog numbers are falling because the price of feed is so high.
Global increases in wheat production are well publicised, with sharp increases all over Europe, Russia and the former Soviet Union, China etc. Search this blog for these stories if you desire. Australia is still a bit of a wild card as planting isn't yet completed there. It seems that early talk of 26-27MMT may well have been optimistic, but certainly at this stage a very substantial increase on last season's 13MMT seems highly likely.
Basis (the difference between futures price and physical price) has plunged in the US this past week as futures have risen contrary to supply & demand fundamentals.
At home we've had some pretty good crop weather during the last few months, conducive to achieving a wheat crop around 4MMT higher than in 2007. From personal experience June has so far been very slow, with compounders reporting similar. Feed demand at the moment just isn't there. I doubt that things will be any different today just because the futures market is through the roof.
Times Online -- Last-ditch talks to avert a strike by 641 tanker drivers who supply one in 10 UK petrol stations have begun at a secret location.
Despite pleas from Downing Sreet for motorists to stay calm and refrain from panic buying, industry experts believe the move will backfire and that in the next 48 hours before Friday’s 6am deadline for strike action, motorists in parts of the country will rush to the pumps.
There is particular concern that motorists with almost full tanks could exacerbate problems by topping up with 10 or 15 extra litres instead of buying normally.
It was this pattern of buying which caused a run on petrol supplies in Scotland, when strike action hit Grangemouth oil refinery at the end of April.
One option might be to introduce a minimum sale of £30 to £40 at forecourts to deter panic buyers - but such a move is unlikely unless a strike is called and there is a nationwide run at the pumps.
At present, however, ministers are not keen to introduce emergency powers to ration fuel and are hoping a deal will be reached to call off action.
However, there is concern in Whitehall that if the strike goes ahead, other fuel protesters, militant hauliers and farmers, might join in pickets of refineries and distribution depots which could affect fuel supplies to other retail outlets.
Times Online -- The future of Barratt Developments, Britain's second-largest housebuilder, hung in the balance Wednesday as its chief executive was forced to reassure the City about its financial position after a collapse in its share price.
Mark Clare, the chief executive, confirmed that Barratt was trading within its banking covenants, but he admitted that talks with its four main lenders were taking place as the company grapples with net debt of £1.7 billion while its market value hovers at about £250 million.
Indeed, Barratt's market value plunged as low as £186 million in late afternoon trading as panic selling set in, sending the shares down 38p to 53p amid fears that the company was working on an emergency funding package just as it calculates what provisions it will be forced to make on its land holdings in time for a financial year ending on June 30.
A year ago Barratt's shares were at almost £11, valuing the company at nearly £3.8 billion. Mr Clare criticised short-sellers for triggering the sharp sell-off in Barratt shares Wednesday.
Corn futures are expected to open 8 to 12 higher; soybeans 15 to 20 higher; wheat 7 to 10 higher. With more heavy rain expected to push across the Corn Belt in the next two days grain and oilseed prices are called sharply higher. Additional flooding is expected in many areas.
DTNAg -- As I've driven across three states in the past four days, I've seen a lot of yield threats in corn fields, and now it looks like USDA has taken notice, too. The average yield projection used in Tuesday's World Agriculture Supply and Demand tables was dropped 5 bushels per acre to 148.9 bpa.
That's still more than the average yield in 2005, so one has to wonder how seriously those government economists have taken the severe, widespread flooding throughout the Corn Belt and especially in the biggest corn-producing states. The last time we remember a spring like this was 1993, and even then, the flooding was relatively localized at the rivers, not like the ubiquitous mud and ponds noted across the Corn Belt right now. Recall that average yield in 1993 was 100.7 bpa (after 131.5 bpa in 1992 and just before 138.6 bpa in 1994).
So this may be only the beginning of projected yield drops throughout the summer, not to mention the entire question of how much acreage has been lost to flooding or soybeans. The big question is genetics -- how well will today's superior seed technology protect against yield loss? Keep in mind that most seed is selected for drought-tolerance, not amphibious aptitude. Here is my non-exhaustive list of things that are going wrong with corn production:
- Weeds. I've seen a lot of weedy fields in Iowa, Nebraska, and Kansas. It's tough to even get out in the fields, let alone time applications between storms.
- Disease. Michael Cordonnier points out that "standing water and saturated soil are perfect conditions for root diseases and seedling blights."
- Plant population. Many seeds may have been washed out or simply never germinated.
- Nutrients. Some fields are already starting to look a little less verdant than one would expect so early in the season. As the crop matures and requires even more nitrogen, it's going to be a real problem that so much fertilizer has already leached out of the soil.
- Root systems. This is a longer-term concern that we won't see evidenced for quite some time, but Cordonnier also claims, "The corn crop is going to be very shallow rooted, which could be a big problem for the crop if weather would eventually turn dry."
Anything else you can think of that will limit U.S. corn production to even less than USDA's estimated 11.7 billion bushels?
Pick from these:
1. It was hot & stuffy
2. The speeches were boring and went on far too long
3. The food was barely edible
4. Didn't get to meet any of the people I intended to
5. Binned it early
6. Might not bother next year
7. It's a bloody expensive do isn't it
8. I was sat next to an idiot
9. Woke up with a raging hangover, with my arms round a Phillipino lady-boy, and a kebab stuck to the side of my face
10. All of the above
The only fertiliser manufacturer now left in the UK has been urged to beef up its communications with farmers or risk accusations of taking advantage of its position.
NFU president Peter Kendall said at yesterday's Cereals 08 event in Lincolnshire that the first year with just one manufacturer - GrowHow - had been characterised by "appallingly poor communication" from the whole sector.
"The NFU is challenging the fertiliser industry to get on the front foot when it comes to communications with farmers, and to give a clear indication of why they have reorganised their channels of supply," he said.
"The appallingly poor communication from fertiliser manufacturers has led to real concern among farmers that they could take advantage of being a single supplier."
Mr Kendall warned that the NFU was "energetically" monitoring fertiliser prices throughout Europe to ensure the competitiveness of UK agriculture.
"If prices get out of kilter with our competitors, then we will make representation to the appropriate parties regarding the market position," he said.
Mr Kendall also took the opportunity to urge the Government to make up its mind - the right way - on set-aside policy.
"We have the absurd situation of having the Prime Minister and Chancellor calling meetings over concerns about food availability while at the same time DEFRA is prevaricating over whether to mandate farmers to take more land out of production in the form of environmental set-aside," he said.
"Surely it is time to unleash that productive capacity: We already have a plethora of agri-environmental schemes, cross compliance and regulation overkill.
"Extra production is necessary to meet food demand, and to deliver a plentiful supply of feed into the livestock sector. It is time to let farmers farm."
Mr Kendall also warned of the threat of 30% of pesticides being removed from the market by new EU regulations, with dramatic effects on crop protection and food production.
"We are putting a serious resource into fighting this threat, the severity of which cannot be underestimated," he said.
Public Ledger -- The EU livestock sector faces huge problems – potentially even a collapse in output – if the EU does not urgently review its policy of zero tolerance for imports of non-authorised genetically modified (GM) products.
This was the warning issued today by Chantal Fauth, Secretary-General of the EU grain traders' association Coceral, at today's International Grains Council conference in London.
Ms Fauth claimed that the EU's intransigent attitude not only to the cultivation of GM crops, but also to commercialisation of any GM product which has yet to be approved at EU level, was running the risk of massive damage to traders and their customers alike. "There will be serious consequences for the livestock sector if EU policy is not radically changed," Ms Fauth warned.
She noted that the EU continued to have a big deficit in protein crops, importing around 16m tonnes of soyabeans and 24m tonnes of soyameal each year, together with significant quantities of maize by-products such as corn gluten feed (CGF) and distillers' dried grains (DDG).
But while the EU remained reluctant to embrace GM crops, biotechnology had taken off in a big way in major grain and oilseed supplier countries like the US, Canada and Argentina.
Ms Fauth pointed out that in 2007, 73% of the US maize crop was GM , as was 70% of the Argentinian crop. In the case of soya, the proportions were 91% in the US, 98% in Argentina and 57% in Brazil.
However, there was a large and growing problem with "asynchronous approvals" of new transgenic varieties, Ms Fauth commented. She noted that it typically took twice as long to approve new biotech strains in the EU than in the US.
This meant that products which were being widely grown in North and South America were unavailable to EU importers because they had not completed the authorisation process in the EU, and because of the high costs of ensuring strict segregation of authorised and non-authorised strains.
A problem of this type with the GM maize variety Herculex had led to a collapse in EU imports of CGF and DDG in 2007, contributing to a massive increase in feed costs for livestock producers.
Ms Fauth said it was vital that the EU rapidly implemented a code of practice being drawn by the Codex Alimentarius, which would set out rules for authorising the low-level importation of GM products which had already been safety-assessed in another country.
ARASCO (Arabian Agricultural Services Company) have said it will expand its manufacturing capacity of compound feed to 4 million metric tons per year; a step that would make ARASCO among the 10 largest animal feed producers in the world.
Engineer Abdullah Alrubaian, ARASCO's Chairman of the Board (pictured), said: 'This significant expansion comes in response to the recent decision by the Saudi Government to reform the subsidy system to encourage the animal feed industry and lessen dependence on barley. The government expects the private sector to support the reform by increasing production capacity and it is fitting that ARASCO is the first to respond given its deep expertise in this industry and status as the largest feed miller in the region.'
Dr. Abdulmalik Alhusseini, ARASCO's Executive President, elaborated on the expansion plans, stating: 'The expansion will take place in two phases. The first phase is already under implementation and aims at increasing the production capacity from 1.6 to 3 million tons per year and should be completed by the end of the first quarter of 2009 without any hindrance to existing production. Our team has recently completed the plans for the second phase which will be implemented in 2009 to increase capacity to 4 million tons per year making ARASCO one of the top 10 feed millers worldwide.'
He continued: 'Furthermore, an important advantage is that ARASCO will expand its existing facilities in Dammam and Al-Kharj rather than build new facilities. This will reduce the required investment and cut the project period to less than a year.'
BUENOS AIRES, Argentina (AP) -- Argentina's Supreme Court agreed Tuesday to hear case brought by a rural governor who represents thousands of striking farmers who want new taxes on grain exports to be struck down.
San Luis state Governor Alberto Rodriguez Saa says the March 11 hike in export taxes is unconstitutional because it does not fairly redistribute the extra revenue to provinces where most of the grains are grown.
A majority of the additional tax income stays in central government coffers, he says - a potential violation of Argentina's federal tax law, which redistributes tax revenue among the nation's 23 provinces based on population and need.
The tax hikes, which increased levies on soy, wheat, corn and sunflower seeds by more than 10 percentage points to nearly 50 percent, have sparked a three-month standoff between president Cristina Fernandez and thousands of farmers who suspended exports on and off for 90 days in protest.
Fernandez has refused to repeal the tax increases, and Justice Minister Anibal Fernandez told reporters Tuesday that she considers the «case closed.
Saa's suit asks the Supreme Court to repeal the tax increase and require the central government to pay San Luis province the share of additional tax income it would have received had profits been lawfully distributed.
Saa ran against Fernandez for president last October, when she won nearly 45 percent of the vote, while Saa placed fourth with 7.7 percent.
The case seeks to make the Supreme Court the newest mediator in a conflict that has crippled the nation's rural economy, caused scattered food shortages and raised the specter of a recession.
A national ombudsman has also intervened, calling on the government to negotiate with Argentine farm leaders. Government officials refused to attend meetings this week, saying the ombudsman has no authority over tax issues.
Thousands of angry farmers threatened to resume a fourth round of strikes on Friday if progress is not made.
Fernandez on Monday announced plans to use 60 percent of the government's additional grain tax revenue to finance the construction of new hospitals, and 40 percent to build rural roads and housing for the poor. The cash - an expected US$1.5 billion a year based on current grain prices - would be stored in a special fund, a statement from the president's office said Tuesday.
Fernandez said the money would be administered by municipalities and provinces, rather than the central government, but gave no specific details.
Corn continues to run higher, backed by a reduced yield forecast from the USDA and a lower ending stocks figure. Heavy Midwest rains overnight have not damped bull's enthusiasm and corn is around 12c higher this morning adding to gains last night of around 16c.
Estimated U.S. inventories of 673 million bushels for the end of the 2008-09 season, down 53 percent from a year earlier, would represent 5.4 percent of expected annual consumption, or 20 days of use. That's down from 40 days estimated this year and the lowest since 1996 when reserves were projected to last 18 days.
Rainfall across the Midwest was as much as four times normal during the past 60 days, National Weather Service data showed. Midwest fields had as much as 12 inches (30 centimeters) of rain in the past week, it showed. Some areas may get another five inches in the next four days, increasing flooding and reducing the soil's nitrogen content, which may limit plant growth.
Soybeans are around 18c higher this morning amidst concerns that all this crop simply isn't going to get planted.
Wheat is around 6-7c firmer, "just because", dragged higher by corn & beans despite a global record output outlook.
Traders Call CBOT Corn Up 3-5c; Soy Up 5-10c; Wheat Up 4-6c
08-09 US ending stocks for wheat, whilst up on May's estimate, were still slightly below expectations. 08-09 world wheat ending stocks were increased 8.1MMt to 132.1MMT. The EU-27 wheat crop was pegged unchanged at 140MMT, the Chinese wheat crop was increased 5MMt to 114MMT. Canadian & Argentinean wheat production both saw drops of 0.5MMT each.
08-09 ending stocks for corn and soybeans were below expectations and are being called "friendly".
08-09 Brazilian soybean production was pegged at 64MMT and Argentinean production at 48MMT, up 3MMT and 1MMt on 07-08 respectively.
08-09 US corn yields were cut "aggressively" from 153.9bu/acre to 148.9bu/acre, dropping estimated production from 12.125 billion bushels to 11.735 billion.
The USDA today estimated 2008-09 US carryover stocks as:
Wheat 487m bu., vs avg est of 496m and it's May est of 483m
Corn 673m bu., (736m, 763m)
Soybeans 175m bu., (180m, 185m)
The figure is slightly higher than the average of analysts' estimate of 1.813 billion bushels, and up from the USDA's May estimate of 1.778 billion.
Oil World -- 2008/09 world rapeseed production is estimated at 52.4 mln t, up from the 48.1 mln t produced one year earlier.
In the EU-27 18.1 (18.17) mln t are expected, in Canada 9.4 (8.8) mln t, in Ukraine 2.4 (1.1) mln t, in China 11.3 (10.4) mln t, in India 6.4 (5.4) mln t, and in Australia 1.6 (1.1) mln t.
Worldwide use is expected to increase to 52.2 (50.5) mln t including a crush of 49.4 (48.0) mln t. This should lead to slightly higher ending stocks of 4.2 (4.0) mln t and to a stocks-to-use ratio of 8.0 (7.9)%.
Global rapeseed meal output is forecast to increase to 29.2 (28.3) mln t and exports to 3.7 (3.5) mln t. Rapeseed oil production may reach 19.8 (19.1) mln t, exports 2.3 (2.1) mln t and use 19.7 (19.1) mln t so that ending stocks are estimated at 1.2 (1.2) mln t and the stocks-to-use ratio at 6.3 (6.1)%.
Corn crop ratings dropped as expected on the weekly crop ratings after the close Monday.
eCBOT finished with corn and wheat around 2-4c higher, and beans 3-4c lower in a quiet session ahead of today's USDA S&D report.
Very early calls are for corn futures are expected to open steady to 2 higher; soybeans steady to 5 lower; wheat 2 to 5 higher.
However, all that could of course change depending on what numbers the USDA come out with at 13:30 BST.
Paris based milling wheat has opened EUR0.50 to EUR2.50 lower this morning, following last night's late sell-off in Chicago. Traders are looking to book some profits ahead of this afternoon's USDA supply & demand report after prices has risen EUR10-12 since recent lows set at the beginning of the month.
July London feed wheat is, strangely, £1.50 firmer, with just 11 lots traded, a technical blip I'm sure and will likely traded lower than last night's close as the session wears on. No other positions have traded at 10.30am BST.
August rapeseed is EUR4 lower at EUR447.50 and August corn down EUR0.25.
Up until now Asian consumers have largely been insulated from the soaring cost of oil by government subsidies. However many Asian countries are finding it increasingly difficult, if not impossible, to continue to absorb these costs with crude rising to unprecidented levels.
Something has to give.
Malaysia is raising retail gasoline prices by 40%, which means that the average man on the street will pay $3.30 a gallon for gasoline, compared to $2.30/gallon previously. All but absolutely necessary gasoline consumption will dry up. Economists estimate that the increase could raise inflation by 5% in Malaysia almost overnight.
In Indonesia fuel prices were increased last week by almost 30%, or $2.46/gallon. With millions of Indonesians living on $2/day you don't have to be Einstein to work out what that is going to do to demand.
In India, state-owned oil companies are losing more than $100 billion per year because gasoline is sold to every citizen about $2.00 per gallon under the average market price in the world. It is breaking the government's budgets and they announced this week that gasoline prices will be increased by 10%.
The eyes of the world are on the Chinese government which has had a lot of bad press recently. Reeling from the recent earthquake and with the Beijing Olympics round the corner, the government there are unlikely to further risk the wrath of the people by hiking up gasoline prices just yet.
However, Sinopec, China's main refiner, loses an estimated $430 on each ton of product it sells, according to published reports. And that's after they received a reported $1 billion compensation from the government LAST MONTH, which was more compensation than it received in the WHOLE of 2007.
If China are forced to follow suit, and who is to say they won't once the Olympics are out of the way, then we are looking at a reduction in world demand of unprecedented proportions.
As our chums across the pond say, go figure.
The Irish Times -- A programme which could see Irish farmers growing some of the 100,000 tonnes of milling wheat that is currently imported each year has got under way.
Ireland requires 250,000 tonnes of milling wheat annually and 100,000 tonnes of this is imported as the required quality is difficult to produce there.
Jim O'Mahony, programme manager for tillage crops and renewable energy at Teagasc, said the organisation had joined with farmers and millers to try to replace imports.
He said Ireland had been importing about 25,000 tonnes of Hard Red Spring Wheat from north America and up to 75,000 tonnes of quality milling wheat from the UK, France and Germany.
"We could be producing up to 150,000 tonnes of milling grade wheat but unfortunately only 75,000 tonnes approximately is being produced in recent years," he said.
"Close on 20 per cent of the winter wheat and 75 per cent of spring wheat sown for 2008 has the potential to go for milling, supplying in excess of the 150,000 tonnes required," he said.
He said the main problem facing growers was the required 10.5 per cent protein levels.
"It is not the weather even though in a bad, wet summer, it is difficult to get this level of protein," he said. "However, I believe that if we set our sights on growing milling quality grain, we can do it," he said.
He said that with the proper application of the correct rate of nitrogen at the right time during crop growth, quality milling wheat could be produced in most settings.
Teagasc has set up a pilot project with Odlums, the milling company, and some farmers to concentrate on growing wheat for milling. "We know the varieties we need and we have the technologies and I believe it is just a matter of applying ourselves to the task," he said. Large price increases on international wheat markets had prompted the initiative, he said.
International Herald Tribune -- The prices of wheat, soybeans and iron ore have surged in the last two years, but that is nothing next to the surging cost of shipping goods like these.
Since mid-2006, a confluence of powerful forces - from a shortage of ships to the seemingly unquenchable thirst by China for raw materials - has sent the global benchmark for shipping rates soaring 365 percent.
The meteoric, and at times volatile, course of shipping costs has grabbed the interest of Wall Street and focused attention on the tiny Baltic Exchange in London, where ship brokers set the price for ferrying goods each day. As the exchange's Baltic Dry Index of rates hovers near record highs, investment banks and hedge funds are entering the fast-growing market for financial instruments linked to the index.
The market for ships has heated up, too. For the first time, prices of vessels designed to carry dry goods like iron ore and grain have eclipsed those for some oil tankers. Some owners are converting tankers to dry-cargo ships. Others have begun trading slots in shipyards where new vessels are built. And prices of second-hand merchant vessels are leaping.
''It's absolutely out of the ordinary,'' said Nikos Nomikos, a professor of shipping risk management at Cass Business School in London and a former Baltic Exchange analyst. ''Five years ago, nobody would have predicted that the market would go up by that much.''
The booming economy of China has transformed the once sleepy exchange. Because most of the dry goods transported by sea are somehow linked to the steel industry, and China is the biggest producer of steel, the Baltic index has become a proxy for the state of the Chinese economy.
But China is not the only reason freight rates are soaring. As global demand for raw materials rises, many goods must be shipped further than in the past, keeping ships at sea longer. Recent strikes at ports and infrastructure problems have delayed loading. The credit squeeze and the reluctance of banks to lend will make it more difficult to raise the $350 billion needed to finance an estimated 10,000 ships on order.
Shipowners have ordered ships in record numbers. But many shipyards are already working at capacity. Some of the Chinese shipyards that have agreed to build vessels have not even been constructed. Most of the ships on order will not be delivered until 2010. The backlog is raising concern about a possible oversupply of ships in the future.
''There's no doubt that 2010 is a risk point,'' said John Luke, head of shipping at KPMG in London. ''The big question is, will China keep buying bulk?''
For some in the industry, the large order books are bringing back memories of the 1980s, when a recession and an oversupply in vessels kept thousands of ships in port.
''Shipping has a very bad record when it comes to boom and bust, and that's because shipowners always get too excited when there is a shortage of ships,'' said one broker.
Shipping rates may come down if growth in China slows, too many ships flood the market, or the United States economy sinks into a deeper downturn.
The FSA has written to organisations representing suppliers and importers of cooking oils to alert them to the presence in the UK of sunflower oil containing mineral oil. The oil originated in Ukraine. Since then the European Commission has imposed a temporary ban on all imports of sunflower oil from Ukraine.
The European Food Safety Authority (EFSA) has analysed samples of the affected oil and carried out a risk assessment. EFSA’s risk assessment concludes that: 'exposure to such oil, although undesirable would not be a public health concern'.
The FSA is continuing to investigate the presence of this oil in the UK and has established that sunflower oil blends, containing low quantities of the affected oil were sold by Netto Foodstores Ltd. Netto immediately removed all affected products from sale. However consumers may have bought some of these products before they were withdrawn. The affected products are:
- Netto Sunflower Oil, 1 litre
- Batch codes: LE8067, LE8134 and LE8140
Some products sold under the KTC brand are also affected. KTC products were sold nationally to smaller retailers and catering suppliers and have also been withdrawn. On the best available evidence these products do not pose a risk to consumers. The Agency is advising consumers that there is no need to stop using this sunflower oil.
DES MOINES, Iowa (AP)--A 250-mile stretch of the Mississippi River is expected to close later this week because of flooding, bringing barge traffic to a halt, the U.S. Army Corps of Engineers said Monday.
The corps plans to close locks and dams from Fulton, Ill. to Clarksville, Mo., possibly as early as Thursday, said Ron Fournier, a corps spokesman.
"We've told barge operators to get their tows off the river because we're closing it," Fournier said.
Fournier said the closure could last up to two weeks. The only lock and dam in that stretch of the river that won't be affected is at Keokuk, Iowa, because the gates are high enough that they shouldn't be affected, he said.
The closing will stop barges carrying everything from grain and coal to steel and fertilizer, industry officials said.
BUENOS AIRES (AP)--President Cristina Fernandez dug in her heels Monday over contentious grain export tax hikes, rebuffing farmers who are seeking talks to end a three-month standoff that has crippled Argentina's farm sector.
Fernandez also announced that revenue from the duties will fund social programs, including the construction of 30 new hospitals, housing for the poorand rural roads. It was the first time she has given details of her plans for the money.
"I ask that all Argentines commit themselves to the fight against poverty and the redistribution of wealth," Fernandez said. "It is impossible to redistribute wealth without touching extraordinary profits."
Fernandez spoke Monday just hours after her government refused to attend a meeting called by the national ombudsman with leaders of the four main rural groups, saying no mediators are needed.
Farmers claim they need the profits to reinvest in their lands to increase productivity.
During a news conference later Monday, Mario Llambias, head of the Argentine Rural Confederation, criticized Fernandez's determination to use farm profits to fund social programs.
"We agree with the destination of the funds," he said. "What we don't agree with is their origin."
Oilintel Houston, TX - The NYMEX oil complex lost some of its gains from last week as speculators, rather than pushing prices higher, seemed to take the day off while taking profits early. Crude oil jumped more than $16.00 with gasoline and heating oil up more than 35 and 42 cents per gallon respectively in the final two trading days of last week. The rally was attributed to Morgan Stanley's prediction of $150 per barrel crude oil by July 4, along with a statement by an Israeli official about the eventual destruction of Iran's nuclear program.
In addition, the trigger seemed to be when the European Central Bank suggested an interest rate increase was possible at its next meeting as a way to stem rising inflation. Today's pullback was expected after last week's late surge and may have been aided by news that Saudi Arabia is calling for a meeting between oil producers and consumers in hopes of addressing energy prices that they say are uncalled for with current supply and demand in balance. In fact Saudi Arabia knows full well they are not in balance at all. Supply far exceeds demand right now and this price is unjustifiable.
Our view for overnight trading suggests prices are likely to test today's low of $133.00 with a failure to do so bringing another move higher. However, a breach of today's low could, if some of the weaker speculators decide to liquidate additional positions, send crude oil to the $130.00 to $131.00 area before finding any real support.
After the close Monday the USDA said that the corn crop condition was down three points to 60% good/excellent. The crop was 89% emerged, up from 74% a week ago, but below the five year avg of 95%. Traders had expected a five-percentage-point drop in the good-to-excellent condition rating from the previous week. "It's probably a little better than people were thinking," said one analyst.
The first crop condition report of the season for soybeans pegged 57% of the crop in good/excellent condition. Planting prgress is put at 77%, up from last week's 69% but below the five year avg of 89% done. Beans are 56% emerged vs 74% on the five year avg. Traders had expected anywhere from 85%-87% of the U.S. soybean crop to be
Winter wheat good/excellent is unchanged at 47%. The harvest is seen at 9% done vs the five year avg of 10% complete. Significantly perhaps spring wheat good/excellent was up six points to 63%. "The weather conditions in the Northern Plains improved last week and that resulted in better spring wheat ratings," said an analyst. "It appears that there were some states that benefited from some moisture." In North Dakota, the good-to-excellent condition rating for spring wheat rose to 61%, up 10 percentage points from the preceding week.
Oilintel.com Houston, TX -- The July NYMEX crude, RBOB gasoline and heating oil contracts will open lower this morning after last week's breathtaking rallies on Thursday and Friday.
In fact today's drop in prices is really a retreat from Thursday and Friday's unbelievable move to the upside that has been attributed to a number of factors that have been used for quite some time. They include a weak dollar, geo-political concerns in Iran and Nigeria and soaring demand in growth areas China, India and the Middle East (all of which subsidize energy prices to their citizens). On Thursday and Friday July crude soared by $16.24, while July gasoline and heating oil contracts zoomed higher by 35.29 and 42.89 cents per gallon respectively, of course without one barrel of oil lost due to any of the above factors.
The main reason, in our opinion, for the sudden change in price direction was speculators swayed by Wall Street analysts from Morgan Stanley and Goldman Sachs and others claiming that $150.00 oil was possible by July 4, and an ill-timed statement from an Israeli official about the inevitability of an attack on Iranian nuclear facilities.
Our early view for today's trading session, since there is no fresh market moving news (or hype) at the moment is for a solid pullback attributed to some profit-taking and possibly some liquidation. Our problem is trying to define how far the pullback will go before the bulls decide to support prices in their quest for prices above $150 per barrel, or even $200 per barrel. We believe there is the potential for prices to easily fall by $3.00 to $5.00 before any support becomes evident.
However, there is no question the bulls could jump in much sooner and push for new record highs before today's session ends. It is a very jittery marketplace and the big investment banks know they can send a signal to the market at any time and everyone will jump on the train.
Here’s a look at the average daily volume of oil futures on the NYMEX expressed in terms of global consumption of oil. As the chart makes clear, the number of paper barrels traded every day on the NYMEX is now over three times the number of actual barrels consumed every day worldwide. On Friday, as oil surged to a record $139 a barrel, the volume on the NYMEX was over 5.2 times average daily consumption. Not that the recent price spike has anything to do with speculative money pooring in you understand, its all about fundamentals, supply and demand old boy.
Agriculture Minister Alexey Gordeyev said Russia planned to harvest 85 million metric tons of grain this year, some 3 million tons more than in 2007. The most significant increase is in the wheat harvest which is expected at 34-37 million tons, 7 million tons more than last year.
BERLIN (AFP)--An Organization for Economic Cooperation and Development agriculture official urged Monday that biofuel subsidies be scrapped, saying this was the quickest way to fight rising food prices.
"I call urgently for reduced support for biofuels," said OECD agriculture director Stefan Tangermannt.
"It is the only lever on which we can act rapidly," he added during an address to a farm forum in Berlin.
The OECD forecasts that food prices, in particular the cost of cereals, will remain high and that development of biofuels is responsible for around one-third of recent increases.
Corn futures are expected to open 14 to 18 higher; soybeans mostly 20 to 24 higher; wheat 13 to 20 higher. Heavy rains across the heart of the Corn Belt on the weekend drove prices sharply higher in overnight trade and the call is the same. Corn production estimates are dropping.
The Bank of England is facing further pressure to control rising inflation after it emerged that core factory gate prices surged to 5.9 per cent during May - the highest increase since 1991 and far above the expected 4.7 per cent.
Annual core output prices, which strip out food, beverages, tobacco and petroleum, rose to a 17-year high while on a month-by-month basis increased by 1.2 per cent, according to the Office for National Statistics (ONS).
Including fuel costs, factory gate prices surged 8.9 per cent in the year to May - the highest since comparable records began in 1986 - while input prices rose 27.9 per cent in the year to May, before fuel prices reached a new high of $139 a barrel last Friday.
All ten categories saw prices increase on the year led by a 28.5% surge in petroleum products on the back of record oil prices, which have reached as high as $139 per barrel last week. As manufacturers continue to pass on costs to consumers, inflation will rise above the BoE’s 3% threshold, where it currently sits. Inflation has become a growing global concern, which has many speculating that the MPC may raise rates at their next policy meeting.
In 2007, the compound feed production for the EU-27 according to Fefac data, reached 149.8 million tonnes, which is 3.4% higher than the figure for 2006. This is the highest annual growth rate registered in almost 20 years.
The key factor that influenced the compound feed market was the dramatic price increase for all key feed materials, with two main consequences:
1) the high cereal prices encouraged farmers to put their cereals on the market rather than using them on the farm and
2) livestock producers facing a huge increase in feed costs - which they could not pass on to consumers of animal products - turned to use the most efficient feed, i.e. industrial compound feed.
This was in particular the case in the pig sector and, which explains the 3.6% increase in pig feed production for 2007 on an EU-basis. All EU-15 member states experienced growth in pig feed production, although on different scales (from +0.3 and +0.7% resp. for Denmark and Spain up to +8 and +11% for resp. Germany and Austria).
In poultry feed the market share of industrial compound feed vs. home mixing is much higher than in pig feed. This explains why the evolution of compound feed production is more closely related to the development of poultry meat an egg production.
In this sense, the increase in poultry feed production is largely influenced by the recovery of poultry consumption in countries such as France and Italy which were seriously affected by the Avian influenza crisis. These two countries with resp. +3.4 and +4.2% however recovered only half the tonnage they lost in 2006 compared to 2005. France is still by far the leading producing country for poultry feed.
The most significant increase is for cattle feed with +5.3%, but as for poultry, 2006 was a "bad year" for industrial cattle feed production. For some countries, this increase may be explained by the high feed material prices, which traditionally leads cattle farmers to preferably buy more compound feed rather than straight feedstuffs.
As in 2006 Ireland showed in 2007 the opposite of other countries with a -11% which follows a +16% in 2006 (vs. 2005). The disappointing results in 2007 may be explained to some extent by the impossibility to import corn gluten feed form the USA due to the zero tolerance policy in the EU regarding not approved GMO contents.
Total compound production in the EU is actual 1.5 million tonnes higher if the feeds produced in Luxembourg, Malta and Greece are added to total volume, and thus reached 151.3 million tonnes.
According to Fefac experts, the following factors are expected to influence the development of compound feed production in 2008:
· Feed material prices: as in 2007 prices of feed materials are expected to remain at a high level. EU livestock farmers, in particular pig producers, can no longer support a +50% production cost increase and need to pass it on to consumers, otherwise we must fear that a significant number of pig holdings will close in 2008.
· The reduction in pig production: in 2007 pig meat production reached the top of the cycle and the production in 2008 is expected to decrease, hence a likely reduction in the feed demand.
· The 2% increase in dairy quotas for 2008/09 should in principle result in a higher demand for feed and especially compound feed, as dairy farmers may not have had time to adapt and increase the number of animals; therefore the only solution for them to increase their production could well be to increase animal yields.
As a consequence the Fefac experts foresee for 2008 a +1% and +2% increase resp. For cattle and poultry feed and a reduction of pig feed by 1-2%, hence a total stagnation of compound feed production.
Reports are coming in that the Argy farmers strike has ended and exports will resume as early as today. I can only assume that they have been looking at prices increasing in the US and thinking "come on lads lets have a piece of the action. What's a 13 percent tax hike with soybeans pushing $15/bushel?" Either the overnight market hasn't heard this yet, or is simply choosing to ignore it. Who'd have thought that soybeans would be 30 cents up on the day the strike got lifted?
Links: Oligarch's R Us
And here: Show me the money
The boards of IAWS Group, plc ('IAWS') and Hiestand Holding AG ('Hiestand') have announce the creation of ARYZTA AG ('ARYZTA'), which they say will be the global leader in value added baked goods.
IAWS also announces that it has reached agreement with Lion Capital (“Lion”), subject only to anti-trust clearance, for the acquisition of Lion’s 32% stake in Hiestand in exchange for 12.7 million new shares in IAWS and €30 million in cash.
IAWS is an international lifestyle food and agri-nutrition company with operations in Europe and North America. The lifestyle food business focuses on niche high quality growth segments of the value added bakery and convenience food market. Origin Enterprises plc (“Origin”) which consists of the group’s agri-nutrition and ambient food businesses was successfully listed in 2007. IAWS is the majority shareholder in Origin and consolidates its results.
Hiestand, founded in 1967 in Switzerland, is a leading European value added bakery and convenience food company focusing on the high quality growth segment of the market. With its innovative products and services it holds strong market positions in Switzerland and Germany and has fast growing operations in Eastern Europe, Asia and Australia.
IAWS operates in North America, the UK, Ireland and France while Hiestand’s main operations are in Switzerland, Germany, Austria, Poland, Malaysia, Japan and Australia.
CAIRO (AP)--Thousands of demonstrators fought with police after a protest over flour rations in a town on Egypt's Mediterranean coast, a security official and state media said Sunday.
The state-owned daily Al-Ahram said some 8,000 protesters sealed off the main Cairo-Mediterranean highway for seven hours Saturday and burnt tires to stop traffic. Police fired tear gas and arrested dozens to disperse the crowd,
A security official said police were questioning 87 suspects.
The protesters were angered by the decision of authorities in Burullus to stop distributing subsidized flour directly to residents and instead deliver it exclusively to bakeries, the official said on condition of anonymity because he is not authorized to give statements.
Fishermen in Burullus prefer to bake a type of bread suited to long fishing voyages instead of buying the standard subsidized bread from bakeries.
There have also been accusations by the government that people are selling the subsidized flour on the black market for a profit, leading to shortages.
Like much of the rest of the world, Egypt has been wracked by rising food prices and stagnant wages, resulting in protests and demonstrations.
There has also been a shortage of the subsidized bread relied on by vast segments of this impoverished country of 76.5 million.
Some 10 people were reported killed since the beginning of the year after scuffles in bread lines.
British consumer confidence has hit a record low after big rises in the cost of living and falls in property values, new figures show.
According to a survey by the British Retail Consortium a third of Britons have major concerns about the economy.
The poll of more than 1,000 consumers found 60% thought job prospects were either bad or not as good compared with 50% last year.
More than half (57%) thought their personal finances would be bad or not as good over the coming 12 months compared with 46% six months ago.
On top of this three quarters believe now is not a good time to spend their money but hang on to it.
The BRC attributed the fall in confidence to increasing concern about job prospects, personal finances and spending power.
Continued weekend rains and more in the forecast sees corn set a new fresh all-time high. Corn for July delivery rose as much as 22.25 cents, or 3.2 percent, to $6.73 in after-hours electronic trading on the Chicago Board of Trade and stood at $6.695 at 08:45 a.m. London time. Corn gained 8.6 percent last week, the biggest weekly gain in 10 weeks. Soaring crude oil and a weak dollar also lent support.
The same factors, rain, oil, the dolar supports the rest of the sector as well this am. Soybeans for July delivery added traded as 32 cents higher $14.8895 at 08;45 a.m. London time.
At 08;45 a.m. CBOT July wheat traded 19.25 cents firmer at $8.3025.
Tonight's USDA crop condition and planting progress will be eagerly scrutinised as will tomorrow's S&D numbers.