Even though South Africa, Australia and Argentina haven't harvested their wheat yet, current wheat harvests around the world have already broken a global record.
Over the last three years worldwide consumption has been 22.9, 22.7, and 22.7 billion bushels. So far this year 23.3 billion bushels have been harvested.
If consumption is similar to the past years, we'll see ending stocks increase by about 900 million bushels.
Projections for wheat use in 2008-2009 are at close to 24.1 billion bushels. After South Africa, Australia and Argentina harvest their wheat, supply is expected to come in at around 25 billion bushels.
With farmers belatedly planting more wheat because of past performance, it has caused this surge of supply. Now with prices falling because of so much product, wheat production costs are higher than what wheat prices can bring.
Many wheat farmers need to understand that when a great year just ends, it probably is a signal that the next year will end up just like this one, as the obvious knee jerk reaction of planting more acres will happen, which will drive down prices.
Those investing in wheat also need to take this into account.
Wednesday, November 26, 2008
Friday, November 21, 2008
U.S. Could Land Some Wheat Export Business from Brazil
There are some things that would have to be overcome in order for Brazil to import some U.S. wheat this year; something that has become rare since the agreement between several South American countries to sell grain between countries with no duty attached to the deals.
While Argentina usually supplies the bulk of wheat to Brazil, this year their production has fallen drastically from last year's 16 million tons to only 10.1 million this year. Of that, last year 10.5 million tons were exported to Brazil, and this year projections are for only 5.8 million tons to be available.
The major disruptions causing the lackluster production for Argentina has been dry weather and less acreage planted in wheat.
A key factor the attractiveness of exporting to Brazil for the U.S. is if Brazil drops its import tax. The U.S. is able to send a high quality wheat with low freight charges, giving them an advantage over its competitors.
If that doesn't happen, U.S. wheat exports don't look too good.
With India making over 2 million extra tons of wheat available for export in their region, and Russia winning North Africa and Middle East contracts, it makes it harder for the U.S. to compete, as there's an abundance of wheat available because of the record crop this year.
The USDA is once again expected to drop its wheat export estimates over the next several months.
While Argentina usually supplies the bulk of wheat to Brazil, this year their production has fallen drastically from last year's 16 million tons to only 10.1 million this year. Of that, last year 10.5 million tons were exported to Brazil, and this year projections are for only 5.8 million tons to be available.
The major disruptions causing the lackluster production for Argentina has been dry weather and less acreage planted in wheat.
A key factor the attractiveness of exporting to Brazil for the U.S. is if Brazil drops its import tax. The U.S. is able to send a high quality wheat with low freight charges, giving them an advantage over its competitors.
If that doesn't happen, U.S. wheat exports don't look too good.
With India making over 2 million extra tons of wheat available for export in their region, and Russia winning North Africa and Middle East contracts, it makes it harder for the U.S. to compete, as there's an abundance of wheat available because of the record crop this year.
The USDA is once again expected to drop its wheat export estimates over the next several months.
Friday, November 14, 2008
Proteome Systems Renamed Tyrian Diagnostics
Completes Transition to Biomarker Discovery and Diagnostic Test Development Company
SYDNEY, Australia, Nov 14, 2008 (BUSINESS WIRE) -- Proteome Systems Ltd (ASX:PXL) (TDX Pending) announced today that shareholders have voted in favour of an official name change to Tyrian Diagnostics Limited. The Company's ASX code will change to "TDX" on November 19, 2008. "Over the past few years, the management team has focused on leveraging the Company's core strengths in the validation and development of biomarkers and diagnostic tests. The divestiture of the technology platform and an exit from the therapeutic business enabled the allocation of the appropriate resources to achieve corporate growth. This fundamental shift in strategy has prompted the name change, and we are pleased to have the support of our shareholders," said Jenny Harry, BSc, PhD, Chief Executive Officer.
Tyrian Diagnostics will host a conference call to provide an update on the Company's current programs and corporate development strategy. The call in the U.S. will take place on Monday, November 17, 2008 at 5:00pm EST, 2:00pm PST. Therefore, the call in Sydney will take place on Tuesday, November 18, 2008 at 9:00 am. Participants may join the call by dialling (877) 407-9210 in the U.S./Canada. Non-U.S. participants may access the call by dialling (201) 689-8049. Those interested in hearing management's discussion may also access a live webcast of the conference call on Tyrian's website at www.tyriandx.com.
A replay of this call will be available for one month by dialling (877) 660-6853 in the U.S./Canada. For Non-U.S. participants dial (201) 612-7415. When prompted, enter Account Number #286 and Conference ID #303767. The webcast will also be available via the Company's website.
About Tyrian Diagnostics
Tyrian Diagnostics (ASX:TDX) is a diagnostics company with expertise in biomarker discovery and validation and diagnostic test development and a core focus on respiratory and infectious diseases. In addition, Tyrian can partner in alternative fields given its capabilities to work across the entire spectrum of diagnostic test development -- from identification and isolation of biomarkers, point-of-need test design, clinical development or field testing to final product. Tyrian's product pipeline includes: WheatRite(R) for measuring wheat quality, which is partnered with BayerCropSciences; and DiagnostIQ(TM) for active tuberculosis, in collaboration with Becton Dickinson and Company.
Additional information about Tyrian Diagnostics can be found at www.tyriandx.com
SOURCE: Proteome Systems Limited
Tyrian Diagnostics
Dr Jenny Harry, CEO, +61 2 8877 8947
Mobile: 0417 428 290
Copyright Business Wire 2008
SYDNEY, Australia, Nov 14, 2008 (BUSINESS WIRE) -- Proteome Systems Ltd (ASX:PXL) (TDX Pending) announced today that shareholders have voted in favour of an official name change to Tyrian Diagnostics Limited. The Company's ASX code will change to "TDX" on November 19, 2008. "Over the past few years, the management team has focused on leveraging the Company's core strengths in the validation and development of biomarkers and diagnostic tests. The divestiture of the technology platform and an exit from the therapeutic business enabled the allocation of the appropriate resources to achieve corporate growth. This fundamental shift in strategy has prompted the name change, and we are pleased to have the support of our shareholders," said Jenny Harry, BSc, PhD, Chief Executive Officer.
Tyrian Diagnostics will host a conference call to provide an update on the Company's current programs and corporate development strategy. The call in the U.S. will take place on Monday, November 17, 2008 at 5:00pm EST, 2:00pm PST. Therefore, the call in Sydney will take place on Tuesday, November 18, 2008 at 9:00 am. Participants may join the call by dialling (877) 407-9210 in the U.S./Canada. Non-U.S. participants may access the call by dialling (201) 689-8049. Those interested in hearing management's discussion may also access a live webcast of the conference call on Tyrian's website at www.tyriandx.com.
A replay of this call will be available for one month by dialling (877) 660-6853 in the U.S./Canada. For Non-U.S. participants dial (201) 612-7415. When prompted, enter Account Number #286 and Conference ID #303767. The webcast will also be available via the Company's website.
About Tyrian Diagnostics
Tyrian Diagnostics (ASX:TDX) is a diagnostics company with expertise in biomarker discovery and validation and diagnostic test development and a core focus on respiratory and infectious diseases. In addition, Tyrian can partner in alternative fields given its capabilities to work across the entire spectrum of diagnostic test development -- from identification and isolation of biomarkers, point-of-need test design, clinical development or field testing to final product. Tyrian's product pipeline includes: WheatRite(R) for measuring wheat quality, which is partnered with BayerCropSciences; and DiagnostIQ(TM) for active tuberculosis, in collaboration with Becton Dickinson and Company.
Additional information about Tyrian Diagnostics can be found at www.tyriandx.com
SOURCE: Proteome Systems Limited
Tyrian Diagnostics
Dr Jenny Harry, CEO, +61 2 8877 8947
Mobile: 0417 428 290
Copyright Business Wire 2008
Monday, November 10, 2008
Where is Wheat Price Per Bushel Going in 2009
Wheat ending stocks for 2008-2009 are slightly higher than trade estimates of 594 million-bushel-average, as well as the 601 million-bushel average the USDA projected for October.
The overall global wheat production has risen, while some individual countries fluctuate. Argentina for example announced its production fell by 1 million metric tons to 11 million, while India has had such a good wheat harvest this year they're making two million tons of available for export.
Wheat supplies will also put competitive pressure on corn because of the large supply this year.
Because of the huge supply, there won't be much happening with wheat that will surprise anyone.
As far as prices, soft red winter wheat has "the most downside room; some of better classes can hold in a bit more strongly."
The global wheat market will continue to be bearish, even as drought conditions pressure certain countries like the Phillipines, Argentina and most recently China. Even with that pressure, the price for wheat per bushel in 2009 shouldn't be affected too much, and it shouldn't be counted on to push up wheat prices a bushel anytime soon.
There will be plenty of wheat for sale, and that will keep wheat prices per barrel down, as the huge wheat surplus this year, especially in the European Union and Black Sea region being major contributing factors. There has also been a huge wheat crop in Canada this year to add to the overall wheat picture.
Considering India wheat being so prolific this year as well, and you see how wheat prices per barrel in 2009 will struggle to rise, even when you take into account quality wheat. In these types of economic downturns, survival is more important than the protein content of wheat, and being able to afford the cost of food in general, and wheat in particular is the guiding factor behind where prices of wheat per barrel will lead to.
It's hard to tell how much wheat will be planted in 2009 as well, with fertilizer costs playing a big factor in the decision of whether to plant, and if wheat is planted, how much fertilizer can be used for the wheat and still be cost effective. Fertilizer prices have gone down some, but low wheat prices per barrel make it difficult to top dress wheat with nitrogen fertilizer and still be profitable in a meaningful way for those putting their wheat up for sale.
The most recent projections for wheat exports from the USDA stand at 210 million bushels, an extraordinary third less than 2008. And as of January 1, wheat sales have plunged by close to 40 percent, with only 158 million bushels sold in the U.S.
While there is some opportunity for wheat exports and wheat prices per barrel to rise in 2009, it will depend mostly on weather conditions for the U.S. wheat crop, along with the number of acres planted after a fairly poor year. The high protein sector may offer some opportunity for U.S. farmers, but wheat quality from other countries, and the above-mentioned factors will determine the price per bushel of wheat in 2009. There's no way of knowing at this time where all this will head, as weather is the key factor, and that of course has yet to be played out. Other countries have suffered quality wheat production, which could help wheat prices per bushel rise, but that will highly depend on the quality of wheat produced in the U.S., which again, will be determined by the weather conditions in the spring months of 2009.
The overall global wheat production has risen, while some individual countries fluctuate. Argentina for example announced its production fell by 1 million metric tons to 11 million, while India has had such a good wheat harvest this year they're making two million tons of available for export.
Wheat supplies will also put competitive pressure on corn because of the large supply this year.
Because of the huge supply, there won't be much happening with wheat that will surprise anyone.
As far as prices, soft red winter wheat has "the most downside room; some of better classes can hold in a bit more strongly."
The global wheat market will continue to be bearish, even as drought conditions pressure certain countries like the Phillipines, Argentina and most recently China. Even with that pressure, the price for wheat per bushel in 2009 shouldn't be affected too much, and it shouldn't be counted on to push up wheat prices a bushel anytime soon.
There will be plenty of wheat for sale, and that will keep wheat prices per barrel down, as the huge wheat surplus this year, especially in the European Union and Black Sea region being major contributing factors. There has also been a huge wheat crop in Canada this year to add to the overall wheat picture.
Considering India wheat being so prolific this year as well, and you see how wheat prices per barrel in 2009 will struggle to rise, even when you take into account quality wheat. In these types of economic downturns, survival is more important than the protein content of wheat, and being able to afford the cost of food in general, and wheat in particular is the guiding factor behind where prices of wheat per barrel will lead to.
It's hard to tell how much wheat will be planted in 2009 as well, with fertilizer costs playing a big factor in the decision of whether to plant, and if wheat is planted, how much fertilizer can be used for the wheat and still be cost effective. Fertilizer prices have gone down some, but low wheat prices per barrel make it difficult to top dress wheat with nitrogen fertilizer and still be profitable in a meaningful way for those putting their wheat up for sale.
The most recent projections for wheat exports from the USDA stand at 210 million bushels, an extraordinary third less than 2008. And as of January 1, wheat sales have plunged by close to 40 percent, with only 158 million bushels sold in the U.S.
While there is some opportunity for wheat exports and wheat prices per barrel to rise in 2009, it will depend mostly on weather conditions for the U.S. wheat crop, along with the number of acres planted after a fairly poor year. The high protein sector may offer some opportunity for U.S. farmers, but wheat quality from other countries, and the above-mentioned factors will determine the price per bushel of wheat in 2009. There's no way of knowing at this time where all this will head, as weather is the key factor, and that of course has yet to be played out. Other countries have suffered quality wheat production, which could help wheat prices per bushel rise, but that will highly depend on the quality of wheat produced in the U.S., which again, will be determined by the weather conditions in the spring months of 2009.
Sunday, November 9, 2008
Wheat Conference Tackles Wheat Stem Rust Ug99
Norman Borlaug
With concerns wheat stem rust Ug99 could decimate the grain around the world, the International Conference on Wheat Stem Rust Ug99 was held in New Delhi to look at the potential threat.
Dr. Norman Borlaug, who identified the potent danger in Ug99, talked to those attending via a video conference. He was one of the leaders in developing the Borlaug Global Rust Initiative (BGRI) in 2007. A number of universities, organizations and charities support BGRI, including the Bill and Melinda Gates Foundation.
The results of the conference were to formulate the Delhi Declaration, whose purpose was to generate global cooperation and a unified plan of action.
While there are a lot of recommendations and preparations made, the question is how all of them will be implemented.
Ug99 was first found in a Uganda nursery in 1999 and has spread to a number of countries.
Good article explaining Ug99 here.
Friday, November 7, 2008
ConAgra Mills and MGP Ingredients sign flour supply agreement
Nov 07, 2008 (Datamonitor via COMTEX) -- ConAgra Mills, a brand of ConAgra Foods, and MGP Ingredients have signed a new, long-term flour supply agreement.
In line with this, MGP Ingredients (MGPI) will source flour for its value-added wheat protein and starch ingredients exclusively from ConAgra Mills.
As part of the agreement, ConAgra Mills will take over wheat sourcing, production, risk management, quality control, logistics and transportation for the MGPI raw material. ConAgra Mills will provide flour to MGPI from select facilities in its US mill manufacturing network.
Tim Newkirk, president and CEO of MGPI, said: "We will focus on customers and our core business moving forward. Our strategy is to outsource part of the production in an effort to counter the effects of high input costs and volatile grain markets. Very simply put, wheat milling as a component of our overall ingredient solutions value chain is not a step in which MGPI can uniquely create value."
http://www.datamonitor.com
In line with this, MGP Ingredients (MGPI) will source flour for its value-added wheat protein and starch ingredients exclusively from ConAgra Mills.
As part of the agreement, ConAgra Mills will take over wheat sourcing, production, risk management, quality control, logistics and transportation for the MGPI raw material. ConAgra Mills will provide flour to MGPI from select facilities in its US mill manufacturing network.
Tim Newkirk, president and CEO of MGPI, said: "We will focus on customers and our core business moving forward. Our strategy is to outsource part of the production in an effort to counter the effects of high input costs and volatile grain markets. Very simply put, wheat milling as a component of our overall ingredient solutions value chain is not a step in which MGPI can uniquely create value."
http://www.datamonitor.com
Wednesday, November 5, 2008
Wheat Drops to Lowest Level in Three Weeks
The price of wheat in the U.S. fell to its lowest level in three weeks as traders aren't optimistic about the comming Department of Agriculture report on export sales data.
Expectations are the global crop will dampen the demand for American wheat, as production has increased in emerging countries.
Wheat that was inspected for export from the U.S. came in at about 13.2 million bushels for the week ending October 30, a drop of about 40 percent from the week ending October 23.
India is especially making an impact on exports this year, as it announced it will probably make about 2 million tons available on the export market. India could end up with a record wheat crop this year of 78.5 million tons.
Worldwide wheat production through June 30 is projected to leap by 12 percent to a record 683 million metric tons. That's the equivalent of about 25.1 billion bushels.
Wheat for December delivery dropped to $5.372 a bushel today on the Chicago Board of Trade.
Expectations are the global crop will dampen the demand for American wheat, as production has increased in emerging countries.
Wheat that was inspected for export from the U.S. came in at about 13.2 million bushels for the week ending October 30, a drop of about 40 percent from the week ending October 23.
India is especially making an impact on exports this year, as it announced it will probably make about 2 million tons available on the export market. India could end up with a record wheat crop this year of 78.5 million tons.
Worldwide wheat production through June 30 is projected to leap by 12 percent to a record 683 million metric tons. That's the equivalent of about 25.1 billion bushels.
Wheat for December delivery dropped to $5.372 a bushel today on the Chicago Board of Trade.
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