The sixth straight quarterly drop by wheat is the longest losing streak in a minimum of 50 years, as global supply far exceeds demand, continuing to put downward pressure on wheat prices.
According to USDA data, global wheat stockpiles have increased by 10 percent to reach 186.6 million tons during 2009-2010. Oveall production could reach as high as 663.7 tons, only behind last year's 682.3 million tons.
With many other countries focusing on increasing their own domestic wheat supplies, imports have plunged to 121.1 million tons from the 141.2 million tons at the same time last year.
As of mid-September, only 10.5 million metric tons of wheat, or 386 bushels was ordered by foreign buyers, a huge decrease of 36 percent from a year ago.
Wheat supply and prices - Wheat prices going down
Thursday, October 1, 2009
Saturday, August 15, 2009
Wheat Futures Prices Near Term
Wheat Futures Prices
Wheat futures in the U.S. should continue to go nowhere for some time ahead unless something extraordinary happens where huge losses come about, which could probably only happen in Australia.
Production estimates for wheat continue to increase while demand decreases, cutting back significantly on wheat exports.
The USDA estimated 2009 U.S. wheat production was raised to 2.184 billion bushels from its July estimate of 2.112 billion, while the global wheat crop increased to 659.3 million tons from 656.5 million tons last month. The USDA's estimate for global ending stocks -- or what is left over after supply and demand are accounted for - also increased.
Wheat prices have plunged over the past year as global supplies have increased, and there is little sign of anything changing.
The continuing bearish information strengthened "the prevailing tone of the wheat market - one adrift in search of a persuasive fundamental storyline and dependant upon direction from other commodities," J.P. Morgan analyst Lewis Hagedorn said. "Absent a large decline in Australian production or demonstration of increasing global demand for protein wheat, prices appear likely to continue a gradual downward slide."
CBOT wheat will probably continue to experience new contract lows, although losses will be limited during the medium term by possible strength in CBOT corn and soybeans. Wheat prices should generally remain rangebound during the next couple of months.
Projections are it's possible September wheat could drop as low as $4.50 or December wheat to touch $4.75. The top end of the contracts' ranges should be about $5.25 for September, assuming a rally in beans and corn comes about.
A lot of negative things would have to happen across the world in order for any type of rally to happen, along with El Niño drying up Australian wheat fields, a continuing wheat disaster in Argentina, and an ongoing rain shortage in the Black Sea Region
But even with all of that happening, there's no surety, as the other places in the world have shored up their domestic wheat production, which is the real mitigating factor in the overall scheme of things.
At best there would be a mild recovery of wheat prices assuming all the above happens, but that doesn't guarantee the U.S. would be getting that business.
Wheat Futures Prices
Wheat futures in the U.S. should continue to go nowhere for some time ahead unless something extraordinary happens where huge losses come about, which could probably only happen in Australia.
Production estimates for wheat continue to increase while demand decreases, cutting back significantly on wheat exports.
The USDA estimated 2009 U.S. wheat production was raised to 2.184 billion bushels from its July estimate of 2.112 billion, while the global wheat crop increased to 659.3 million tons from 656.5 million tons last month. The USDA's estimate for global ending stocks -- or what is left over after supply and demand are accounted for - also increased.
Wheat prices have plunged over the past year as global supplies have increased, and there is little sign of anything changing.
The continuing bearish information strengthened "the prevailing tone of the wheat market - one adrift in search of a persuasive fundamental storyline and dependant upon direction from other commodities," J.P. Morgan analyst Lewis Hagedorn said. "Absent a large decline in Australian production or demonstration of increasing global demand for protein wheat, prices appear likely to continue a gradual downward slide."
CBOT wheat will probably continue to experience new contract lows, although losses will be limited during the medium term by possible strength in CBOT corn and soybeans. Wheat prices should generally remain rangebound during the next couple of months.
Projections are it's possible September wheat could drop as low as $4.50 or December wheat to touch $4.75. The top end of the contracts' ranges should be about $5.25 for September, assuming a rally in beans and corn comes about.
A lot of negative things would have to happen across the world in order for any type of rally to happen, along with El Niño drying up Australian wheat fields, a continuing wheat disaster in Argentina, and an ongoing rain shortage in the Black Sea Region
But even with all of that happening, there's no surety, as the other places in the world have shored up their domestic wheat production, which is the real mitigating factor in the overall scheme of things.
At best there would be a mild recovery of wheat prices assuming all the above happens, but that doesn't guarantee the U.S. would be getting that business.
Wheat Futures Prices
Monday, August 10, 2009
Wheat Exports in Slow Start
Exports of U.S. wheat promise to be down significantly for 2009-2010, according to the USDA, as projections are for about 925 million bushels of wheat to export during that time period, where the marketing year began on June 1.
Assuming this is accurate, which it seems it's close, that would be 90 million less bushels of wheat exported this year over last, and a huge 339 million less than the 2007-2008 year.
At this pace it'll be the third worst year of wheat exports in 25 years.
Wheat export inspections for the first 9.6 weeks show that they're at 130.7 million bushels; almost 100 million bushels under last year at this time. The weekly average wheat inspection has been at an anemic 13.7 million bushels.
This is even far below the USDA export projection of 925 million bushels, as the average needed to reach that is 18.7 million bushels for the rest of the year, which will be difficult to attain.
While some say this isn't a good comparison over the very quick rate of wheat exports last year, it still is far behind what would be needed to reach projections. As fo the end of July, the USDA said outstanding export sales of wheat stood at 148 million bushels, while last year it was at 276 million bushels.
The USDA’s weekly U.S. Export Sales report breaks down exports and export sales by where the wheat is headed and by class of wheat. Through July 30, export commitments compared to those of last year plunged by 60 percent for hard red winter wheat, 63 percent for soft red winter wheat, and 26 percent for hard red spring wheat. Export commitments were 17 percent larger for white wheat and 15 percent larger for durum wheat. Commitments for all classes of wheat were down by a huge 46 percent.
Among its largest wheat trading partners, commitments have dropped significantly; 27 percent to the Philippines, 45 percent to Japan, 48 percent to Mexico, and 87 percent to Egypt. Egypt buys only soft red winter wheat from the U.S.
Exports of wheat globally are down this year because a number of countries have significantly increased wheat production domestically, so diminishing the amount of wheat needed for its citizenry outside the countries.
Much of the recent low wheat prices has been attributed primarily to the decline in export demand for soft red winter wheat, which doesn't look to change this year.
As far as wheat inventories globally, they are expected to grow by 8 percent this year, which equals 512 million bushels. Of that, China will account for 80 percent of the wheat inventory increase.
Assuming this is accurate, which it seems it's close, that would be 90 million less bushels of wheat exported this year over last, and a huge 339 million less than the 2007-2008 year.
At this pace it'll be the third worst year of wheat exports in 25 years.
Wheat export inspections for the first 9.6 weeks show that they're at 130.7 million bushels; almost 100 million bushels under last year at this time. The weekly average wheat inspection has been at an anemic 13.7 million bushels.
This is even far below the USDA export projection of 925 million bushels, as the average needed to reach that is 18.7 million bushels for the rest of the year, which will be difficult to attain.
While some say this isn't a good comparison over the very quick rate of wheat exports last year, it still is far behind what would be needed to reach projections. As fo the end of July, the USDA said outstanding export sales of wheat stood at 148 million bushels, while last year it was at 276 million bushels.
The USDA’s weekly U.S. Export Sales report breaks down exports and export sales by where the wheat is headed and by class of wheat. Through July 30, export commitments compared to those of last year plunged by 60 percent for hard red winter wheat, 63 percent for soft red winter wheat, and 26 percent for hard red spring wheat. Export commitments were 17 percent larger for white wheat and 15 percent larger for durum wheat. Commitments for all classes of wheat were down by a huge 46 percent.
Among its largest wheat trading partners, commitments have dropped significantly; 27 percent to the Philippines, 45 percent to Japan, 48 percent to Mexico, and 87 percent to Egypt. Egypt buys only soft red winter wheat from the U.S.
Exports of wheat globally are down this year because a number of countries have significantly increased wheat production domestically, so diminishing the amount of wheat needed for its citizenry outside the countries.
Much of the recent low wheat prices has been attributed primarily to the decline in export demand for soft red winter wheat, which doesn't look to change this year.
As far as wheat inventories globally, they are expected to grow by 8 percent this year, which equals 512 million bushels. Of that, China will account for 80 percent of the wheat inventory increase.
Monday, August 3, 2009
Global Demand for Wheat Down
Wheat Market
Wheat futures continue their downward slide as they are down a whopping 33 percent from the same time last year, and the overall market looks to continue to be bearish, as international demand continues to slide.
“The wheat market is in a slumber,” Stuart Richardson, Australian commodity management spokesman for the Melbourne- based company, said today. “Flour mills around the world have generally entered the new season with greater stocks in their supply line than the year before.
“There is plenty of wheat available competing for limited demand, so the fundamental market picture is bearish,” Richardson added, which updated estimated wheat prices for Australian farmers. “Production risk is diminishing in the northern hemisphere, with the winter wheat harvests almost complete in the U.S. and well advanced in the European Union and Black Sea region.”
For the second month in a row wheat futures have fallen, and wheat speculators and hedge fund managers are increasing their short positions in the golden grain, believing they haven't yet reached their lows.
Wheat Market
Wheat futures continue their downward slide as they are down a whopping 33 percent from the same time last year, and the overall market looks to continue to be bearish, as international demand continues to slide.
“The wheat market is in a slumber,” Stuart Richardson, Australian commodity management spokesman for the Melbourne- based company, said today. “Flour mills around the world have generally entered the new season with greater stocks in their supply line than the year before.
“There is plenty of wheat available competing for limited demand, so the fundamental market picture is bearish,” Richardson added, which updated estimated wheat prices for Australian farmers. “Production risk is diminishing in the northern hemisphere, with the winter wheat harvests almost complete in the U.S. and well advanced in the European Union and Black Sea region.”
For the second month in a row wheat futures have fallen, and wheat speculators and hedge fund managers are increasing their short positions in the golden grain, believing they haven't yet reached their lows.
Wheat Market
Tuesday, July 28, 2009
Funding of Perennial Wheat Study
Perennial Wheat Research
While the idea of developing a perennial wheat strain is a great one, the thought of using taxpayers money to do it is outrageous.
Researchers at Michigan State University are recipients of the $1 million in federal grants (taxpayers money) to work on developing a perennial wheat strain.
There's the potential to generate huge savings for farmers if wheat didn't have to be replanted every season. The fuel and labor cost declines would be magnificent.
According to lead researcher Sieg Snapp, a perennial wheat strain would help reduce erosion problems and keep moisture in the soil longer.
Again, the idea is a great one, it should be done with private money and entrepreneurs, not taxpayer money.
Perennial Wheat Research
While the idea of developing a perennial wheat strain is a great one, the thought of using taxpayers money to do it is outrageous.
Researchers at Michigan State University are recipients of the $1 million in federal grants (taxpayers money) to work on developing a perennial wheat strain.
There's the potential to generate huge savings for farmers if wheat didn't have to be replanted every season. The fuel and labor cost declines would be magnificent.
According to lead researcher Sieg Snapp, a perennial wheat strain would help reduce erosion problems and keep moisture in the soil longer.
Again, the idea is a great one, it should be done with private money and entrepreneurs, not taxpayer money.
Perennial Wheat Research
Montana Winter Wheat Harvest Starts
Montana Winter Wheat Harvest
Reports are the winter wheat harvest in Montana has started, according to the Montana Crop Weather Report issued Monday at the Montana Field Office of the National Agricultural Statistics Service.
Approximately 4 percent of the state's winter wheat harvest is complete, in contrast to 2 percent during the same time period last year. This is far behind the five-year winter wheat harvest average in Montana, which usually stands at 25 percent at this time.
So far farmers are rating the Montana winter wheat crop at 41 percent good and only 36 percent fair.
Close to 30 percent of the Montana spring wheat crop is turning according to the report, in comparison to 46 percent last years at the same time. That is faring a little better, with farmers rating the spring wheat crop at 47 percent good, while 31 percent is rated as fair.
The conditons of range and pasture feed are down about five percent from last year, with 39 percent being rated as good, a decline from 44 percent last year during the same period.
Dry conditions have causes pastures to dry up.
Montana Winter Wheat Harvest
Reports are the winter wheat harvest in Montana has started, according to the Montana Crop Weather Report issued Monday at the Montana Field Office of the National Agricultural Statistics Service.
Approximately 4 percent of the state's winter wheat harvest is complete, in contrast to 2 percent during the same time period last year. This is far behind the five-year winter wheat harvest average in Montana, which usually stands at 25 percent at this time.
So far farmers are rating the Montana winter wheat crop at 41 percent good and only 36 percent fair.
Close to 30 percent of the Montana spring wheat crop is turning according to the report, in comparison to 46 percent last years at the same time. That is faring a little better, with farmers rating the spring wheat crop at 47 percent good, while 31 percent is rated as fair.
The conditons of range and pasture feed are down about five percent from last year, with 39 percent being rated as good, a decline from 44 percent last year during the same period.
Dry conditions have causes pastures to dry up.
Montana Winter Wheat Harvest
Wednesday, July 22, 2009
CBOT Owner Resists Wheat Restrictions
Wheat Markets
The attempt by the government to regulate and interfere with the wheat market could be another disaster in the making, as the completely foolish, misguided and clueless Democrats continue their assault on free markets.
According to Charles Carey, vice chairman of CBOT owner CME Group Inc., government restrictions on trading "are more likely to be harmful to the functioning of our markets than helpful," and he's absolutely right.
The idea that we should have some type of perfection in place so no one ever gets hurt is outrageous, socialist and fascist to the core. Short term fluctations in wheat prices will never last, and that's the illusory problem the goofy Democrats think needs to be solved.
Unbelievably, federal regulators are "seriously considering" restrictions in the wheat futures market being urged by lawmakers concerned over speculation they say has artificially inflated prices, supposedly interfering risk management by farmers and grain processors.
After a wasted year and time, a faux investigation by the investigative panel of the Senate Homeland Security and Governmental Affairs Committee found that the disconnect between the wheat futures and cash markets can mean higher prices for consumers. They say this with a straight face when corn prices and lack of planting of wheat does more to jack up the prices because of other government interference through subsidies from taxpayers dollars.
A number of senators have called on the Commodity Futures Trading Commission to restrict the volume of index trading in the wheat futures market on the Chicago Board of Trade, a completely ridiculous idea.
Foolishly, CFTC Chairman Gary Gensler told the Senate subcommittee at a recent hearing that the agency "is seriously considering this recommendation ... (and) will continue to closely monitor the performance of the wheat futures contract."
Democrat Panel chairman Carl Levin, ignorantly said such a review "is badly needed." Several other members of the committee, representing farm states, voiced concern about the impact of market problems on wheat producers in those states.
Again, to me much of this is to hide the real culprit in wheat prices, federal subsidies of corn for the failing corn-based ethanol industry, which is pushing up prices because of less acreage used for wheat because of the artifical price increases created by the U.S. government.
But an official of the company that operates the Chicago Board of Trade, where wheat futures are traded, opposed such constraints and disputed the Senate probe's findings, as mentiond above from Charles Carey's accurate comments.
The idea of attempting to manipulate the market by the U.S. government and Democrats will fail, as the utopian idea of reducing risk is completely foolish and always fails, and the wheat and commodities markets overall will suffer.
Commodity indexes include futures contracts for delivery in different months. Commodity index traders sell financial instruments whose values rise and fall along with the value of the index on which they are located.
Commodity index traders acquire wheat futures to help offset their risk from selling the instruments to third parties. That pumps billions of dollars into the market and lifts demand and prices for wheat futures, the faulty results of the Senate investigation found.
Other related to the risk factors are also whining about the alleged discrepencies, as one person representing the American Bakers Association and the Sara Lee Corp said at the hearing, "Bakers cannot escape the impact. Today's volatility represents millions of dollars daily in undue financial risk."
What this disingenous bureaucrat doesn't say is this has always been the case, and the those that manage this risk factor are the ones who win. In the stimulous and spirit of bailing out company after company, those that can't compete are attempting to make it look like something unusual is happening, when in fact it has been the practice and way of doing business for a long time.
The one who knows about this the best is Charles Carey, vice chairman of CBOT owner CME Group Inc., and he concludes that the findings of the Senate report "are based on faulty economic analysis and a misunderstanding of basic market economics."
Just look at what the Democrats and Obama are doing to destroy America with its socialist and fascist policies, and you can easily understand how this group of politicians are among the most inexperienced and naive in American history; in both foreign and domestic policy, and they need to just shut up and let the free market work things out, which it always has done.
Wheat Markets
The attempt by the government to regulate and interfere with the wheat market could be another disaster in the making, as the completely foolish, misguided and clueless Democrats continue their assault on free markets.
According to Charles Carey, vice chairman of CBOT owner CME Group Inc., government restrictions on trading "are more likely to be harmful to the functioning of our markets than helpful," and he's absolutely right.
The idea that we should have some type of perfection in place so no one ever gets hurt is outrageous, socialist and fascist to the core. Short term fluctations in wheat prices will never last, and that's the illusory problem the goofy Democrats think needs to be solved.
Unbelievably, federal regulators are "seriously considering" restrictions in the wheat futures market being urged by lawmakers concerned over speculation they say has artificially inflated prices, supposedly interfering risk management by farmers and grain processors.
After a wasted year and time, a faux investigation by the investigative panel of the Senate Homeland Security and Governmental Affairs Committee found that the disconnect between the wheat futures and cash markets can mean higher prices for consumers. They say this with a straight face when corn prices and lack of planting of wheat does more to jack up the prices because of other government interference through subsidies from taxpayers dollars.
A number of senators have called on the Commodity Futures Trading Commission to restrict the volume of index trading in the wheat futures market on the Chicago Board of Trade, a completely ridiculous idea.
Foolishly, CFTC Chairman Gary Gensler told the Senate subcommittee at a recent hearing that the agency "is seriously considering this recommendation ... (and) will continue to closely monitor the performance of the wheat futures contract."
Democrat Panel chairman Carl Levin, ignorantly said such a review "is badly needed." Several other members of the committee, representing farm states, voiced concern about the impact of market problems on wheat producers in those states.
Again, to me much of this is to hide the real culprit in wheat prices, federal subsidies of corn for the failing corn-based ethanol industry, which is pushing up prices because of less acreage used for wheat because of the artifical price increases created by the U.S. government.
But an official of the company that operates the Chicago Board of Trade, where wheat futures are traded, opposed such constraints and disputed the Senate probe's findings, as mentiond above from Charles Carey's accurate comments.
The idea of attempting to manipulate the market by the U.S. government and Democrats will fail, as the utopian idea of reducing risk is completely foolish and always fails, and the wheat and commodities markets overall will suffer.
Commodity indexes include futures contracts for delivery in different months. Commodity index traders sell financial instruments whose values rise and fall along with the value of the index on which they are located.
Commodity index traders acquire wheat futures to help offset their risk from selling the instruments to third parties. That pumps billions of dollars into the market and lifts demand and prices for wheat futures, the faulty results of the Senate investigation found.
Other related to the risk factors are also whining about the alleged discrepencies, as one person representing the American Bakers Association and the Sara Lee Corp said at the hearing, "Bakers cannot escape the impact. Today's volatility represents millions of dollars daily in undue financial risk."
What this disingenous bureaucrat doesn't say is this has always been the case, and the those that manage this risk factor are the ones who win. In the stimulous and spirit of bailing out company after company, those that can't compete are attempting to make it look like something unusual is happening, when in fact it has been the practice and way of doing business for a long time.
The one who knows about this the best is Charles Carey, vice chairman of CBOT owner CME Group Inc., and he concludes that the findings of the Senate report "are based on faulty economic analysis and a misunderstanding of basic market economics."
Just look at what the Democrats and Obama are doing to destroy America with its socialist and fascist policies, and you can easily understand how this group of politicians are among the most inexperienced and naive in American history; in both foreign and domestic policy, and they need to just shut up and let the free market work things out, which it always has done.
Wheat Markets
Friday, July 17, 2009
Commercial Biotech Modified Wheat
Biotech Modified Wheat
There can be no doubt that whether opposition to modified wheat like it or not, there will be commercialization sometime in the near future, as the alternative could never be acceptable.
Growing demand for wheat products and other foodstuffs will continue for some time, as emerging markets and growing middle classes increase their food consumption.
A lot of U.S. farmers have been positive about renewed efforts by biotech crop leader Monsanto Co to genetically modified wheat, but convincing world markets to embrace genetic alteration of the key food crop remains a big challenge to overcome.
Monsanto added fuel to a debate over biotech wheat on Tuesday when it announced it was buying WestBred LLC, a wheat germplasm specialist as a platform to develop higher-yielding biotech wheat that would be more tolerant of drought and require less nitrogen.
Along with Monsanto, rival seed technology companies such as Syngenta AG, BASF and Dow AgroSciences, a unit of Dow Chemical Co, are pouring resources into wheat development. Some companies are focusing on transgenic alterations using DNA from other species and some are manipulating genes already found in wheat.
Currently there is no biotech wheat grown on a commercial-scale anywhere in the world due to opposition from consumers and food industry players.
Most notably, Japan, one of the world's largest importers of wheat and a leading critic of past efforts to introduce genetically altered wheat, remains a steadfast opponent. Many European countries also continue to resist genetically modified crops.
Japan, which imports around 5.5 million tons of wheat each year, including about 3 million tons from the United States, is starting to acknowledge that there might be a valid argument for biotech wheat. But much work remains to be done before full acceptance, Tracy said.
U.S. Wheat is still laboring to get Japan and other countries to establish regulatory systems and tolerance levels that would allow for continued imports if biotech wheat is commercialized, he said.
Some U.S. farm groups also remain cautious of biotech wheat. They say conventional breeding can bring many of the same benefits without negative market consequences.
These critics also say biotech wheat work is aimed more at improving profits at corporations such as Monsanto than at helping farmers.
Quite a few consumer and environmental groups have concerns over introducing genes from other species into wheat could make it harmful for humans, and say it would be difficult to keep biotech wheat segregated from conventional wheat seed and products.
Monsanto, a global leader in biotech corn and soybeans, backed away from commercializing a herbicide-tolerant wheat five years ago as foreign buyers threatened boycotts.
Opponents say a biotech wheat introduction could still deal a significant blow to U.S. markets, recalling how U.S. corn lost European buyers when genetically modified corn was brought to the market.
But biotech wheat supporters say the global wheat crop needs a technological boost. They note that over the last few years, farmers have reduced wheat acreage in favor of more-profitable, easier-to-grow crops such as corn and soybeans.
They also point to fears mount about global food shortages and a rapid rise in world population. Just last year, shortages drove wheat prices to record highs, and prices remain historically high this year despite ample supplies.
Those factors have prompted corporations and researchers in the United States and Australia to increase development efforts in wheat.
Some farmer groups support commercialization of biotech varieties, saying they will have several years to address buyer fears before any biotech wheat is commercialized.
Either way, biotech modified wheat should go commercial in about 5 years if not sooner, as global conditions will force it upon us.
Biotech Modified Wheat
There can be no doubt that whether opposition to modified wheat like it or not, there will be commercialization sometime in the near future, as the alternative could never be acceptable.
Growing demand for wheat products and other foodstuffs will continue for some time, as emerging markets and growing middle classes increase their food consumption.
A lot of U.S. farmers have been positive about renewed efforts by biotech crop leader Monsanto Co to genetically modified wheat, but convincing world markets to embrace genetic alteration of the key food crop remains a big challenge to overcome.
Monsanto added fuel to a debate over biotech wheat on Tuesday when it announced it was buying WestBred LLC, a wheat germplasm specialist as a platform to develop higher-yielding biotech wheat that would be more tolerant of drought and require less nitrogen.
Along with Monsanto, rival seed technology companies such as Syngenta AG, BASF and Dow AgroSciences, a unit of Dow Chemical Co, are pouring resources into wheat development. Some companies are focusing on transgenic alterations using DNA from other species and some are manipulating genes already found in wheat.
Currently there is no biotech wheat grown on a commercial-scale anywhere in the world due to opposition from consumers and food industry players.
Most notably, Japan, one of the world's largest importers of wheat and a leading critic of past efforts to introduce genetically altered wheat, remains a steadfast opponent. Many European countries also continue to resist genetically modified crops.
Japan, which imports around 5.5 million tons of wheat each year, including about 3 million tons from the United States, is starting to acknowledge that there might be a valid argument for biotech wheat. But much work remains to be done before full acceptance, Tracy said.
U.S. Wheat is still laboring to get Japan and other countries to establish regulatory systems and tolerance levels that would allow for continued imports if biotech wheat is commercialized, he said.
Some U.S. farm groups also remain cautious of biotech wheat. They say conventional breeding can bring many of the same benefits without negative market consequences.
These critics also say biotech wheat work is aimed more at improving profits at corporations such as Monsanto than at helping farmers.
Quite a few consumer and environmental groups have concerns over introducing genes from other species into wheat could make it harmful for humans, and say it would be difficult to keep biotech wheat segregated from conventional wheat seed and products.
Monsanto, a global leader in biotech corn and soybeans, backed away from commercializing a herbicide-tolerant wheat five years ago as foreign buyers threatened boycotts.
Opponents say a biotech wheat introduction could still deal a significant blow to U.S. markets, recalling how U.S. corn lost European buyers when genetically modified corn was brought to the market.
But biotech wheat supporters say the global wheat crop needs a technological boost. They note that over the last few years, farmers have reduced wheat acreage in favor of more-profitable, easier-to-grow crops such as corn and soybeans.
They also point to fears mount about global food shortages and a rapid rise in world population. Just last year, shortages drove wheat prices to record highs, and prices remain historically high this year despite ample supplies.
Those factors have prompted corporations and researchers in the United States and Australia to increase development efforts in wheat.
Some farmer groups support commercialization of biotech varieties, saying they will have several years to address buyer fears before any biotech wheat is commercialized.
Either way, biotech modified wheat should go commercial in about 5 years if not sooner, as global conditions will force it upon us.
Biotech Modified Wheat
Wednesday, July 15, 2009
Monsanto Looking to wheat
Monsanto Looking to wheat to drive share prices up
Looking for more ways to increase their share price, Monsanto is looking to wheat as a significant means of doing that, and recent aquisition of WestBred LLC is the first significant step in that direction, although it could take a decade before the investment pays off.
Knowing it needs a way to expand market share in wheat, Monsanto a Monsanto analyst, citing expectations that the company's $45 million acquisition of WestBred LLC won't add to earnings until 2016, and will add less than a dime a share by 2025.
Privately held WestBred, with offices in Montana, specializes in wheat germplasm, the genetic material of a seed.
Monsanto said about the investment that it will strengthen the future growth of Monsanto's seeds and traits platform; and allow farmers to benefit from the company's experience in drought-, disease- and pest-tolerance innovations.
This action by Monsanto, the world's biggest provider of seeds, signifies the company's re-entry to the wheat market, but will only increase earnings several years down the road at best.
Assuming Monsanto has a 20 percent share of the certified seed market by 2025, estimates are wheat could only add between 7 cents and 9 cents a share to earnings a share by 2025.
"Clearly, Monsanto needs to find ways to drive significant market share gains, wheat platform should not be accretive to earnings until 2016 or later."
Managing expectations, Monsanto is calling the acquisition a long-term investment that won't add to earnings until the middle or latter part of the next decade.
Monsanto Looking to wheat to drive share prices up
Looking for more ways to increase their share price, Monsanto is looking to wheat as a significant means of doing that, and recent aquisition of WestBred LLC is the first significant step in that direction, although it could take a decade before the investment pays off.
Knowing it needs a way to expand market share in wheat, Monsanto a Monsanto analyst, citing expectations that the company's $45 million acquisition of WestBred LLC won't add to earnings until 2016, and will add less than a dime a share by 2025.
Privately held WestBred, with offices in Montana, specializes in wheat germplasm, the genetic material of a seed.
Monsanto said about the investment that it will strengthen the future growth of Monsanto's seeds and traits platform; and allow farmers to benefit from the company's experience in drought-, disease- and pest-tolerance innovations.
This action by Monsanto, the world's biggest provider of seeds, signifies the company's re-entry to the wheat market, but will only increase earnings several years down the road at best.
Assuming Monsanto has a 20 percent share of the certified seed market by 2025, estimates are wheat could only add between 7 cents and 9 cents a share to earnings a share by 2025.
"Clearly, Monsanto needs to find ways to drive significant market share gains, wheat platform should not be accretive to earnings until 2016 or later."
Managing expectations, Monsanto is calling the acquisition a long-term investment that won't add to earnings until the middle or latter part of the next decade.
Monsanto Looking to wheat to drive share prices up
Wednesday, July 8, 2009
India's Wheat Exports Limited by High Domestic Prices
India wheat exports down in fiscal year
In the midst of high local prices, projections are it will limit India's wheat and wheat product exports in the fiscal year ending March 2010, although the country has eased an earlier ban on exports this month to allow limited shipments.
On July 3, the federal government allowed three state-run firms - MMTC, STC and PEC - to export 300,000 tons each of wheat by March 31, 2010. In addition, private companies were allowed to export another 650,000 tons in wheat products, also by the same date.
But that is unlikely to lead to a surge exports.
"International prices are around $195 to $198/ton and Indian wheat costs around $232/ton," said Veena Sharma, secretary of Roller Flour Millers Federation (RFMF) of India.
She said exports are feasible only if international prices rise in the coming months.
"Unless there is a government subsidy of $30-$40/ton, (wheat exports are) not feasible," said Ajay Goyal, president of Maharashtra Roller Flour Millers Association (MRFMA).
However, the formal government order allowing the exports made it clear that "no subsidy will be given" to exporters.
India's federal government had imposed a ban on exports of wheat and wheat products in December 2007 to help curb inflation.
Since then, domestic wheat stocks have reached comfortable levels following two bumper crops and on carryover stocks from previous imports.
Even if some exports take place now, those could mainly be to neighboring countries, traders said.
"We may have to look to export to countries like Bangladesh, Nepal, Bhutan and Maldives to save on freight costs," said a state-run trading firm official, who did not want to be identified.
However, industry officials ruled out the possibility of wheat exports to Pakistan because there is no supply shortage there.
Meanwhile, state procurement of wheat has been on the rise following higher support prices.
Farmers sold more wheat to government agencies, rather than to private companies, as the state-fixed price of 10,800 rupees ($223)/ton was attractive, and relatively higher than even global prices, traders said.
Latest government data showed local wheat purchases by government agencies have already touched a record 25.06 million tons since purchases started in April, and more was trickling into state granaries.
In its annual budget announcement Monday, the government said it would step up subsidized sale of grains to poor consumers in the coming months.
With the chance of wheat exports looking slim, industry officials were more hopeful about exports of wheat products such as flour and semolina.
"Although there is not so much of demand for wheat products in the global market now, there could be some demand coming from the Middle East," said A N Gupta, chairman of Wheat Products Promotion Society of India.
He said demand for value-added wheat products from India is likely to be much more than the demand for the grain itself in global markets.
India wheat exports down in fiscal year
In the midst of high local prices, projections are it will limit India's wheat and wheat product exports in the fiscal year ending March 2010, although the country has eased an earlier ban on exports this month to allow limited shipments.
On July 3, the federal government allowed three state-run firms - MMTC, STC and PEC - to export 300,000 tons each of wheat by March 31, 2010. In addition, private companies were allowed to export another 650,000 tons in wheat products, also by the same date.
But that is unlikely to lead to a surge exports.
"International prices are around $195 to $198/ton and Indian wheat costs around $232/ton," said Veena Sharma, secretary of Roller Flour Millers Federation (RFMF) of India.
She said exports are feasible only if international prices rise in the coming months.
"Unless there is a government subsidy of $30-$40/ton, (wheat exports are) not feasible," said Ajay Goyal, president of Maharashtra Roller Flour Millers Association (MRFMA).
However, the formal government order allowing the exports made it clear that "no subsidy will be given" to exporters.
India's federal government had imposed a ban on exports of wheat and wheat products in December 2007 to help curb inflation.
Since then, domestic wheat stocks have reached comfortable levels following two bumper crops and on carryover stocks from previous imports.
Even if some exports take place now, those could mainly be to neighboring countries, traders said.
"We may have to look to export to countries like Bangladesh, Nepal, Bhutan and Maldives to save on freight costs," said a state-run trading firm official, who did not want to be identified.
However, industry officials ruled out the possibility of wheat exports to Pakistan because there is no supply shortage there.
Meanwhile, state procurement of wheat has been on the rise following higher support prices.
Farmers sold more wheat to government agencies, rather than to private companies, as the state-fixed price of 10,800 rupees ($223)/ton was attractive, and relatively higher than even global prices, traders said.
Latest government data showed local wheat purchases by government agencies have already touched a record 25.06 million tons since purchases started in April, and more was trickling into state granaries.
In its annual budget announcement Monday, the government said it would step up subsidized sale of grains to poor consumers in the coming months.
With the chance of wheat exports looking slim, industry officials were more hopeful about exports of wheat products such as flour and semolina.
"Although there is not so much of demand for wheat products in the global market now, there could be some demand coming from the Middle East," said A N Gupta, chairman of Wheat Products Promotion Society of India.
He said demand for value-added wheat products from India is likely to be much more than the demand for the grain itself in global markets.
India wheat exports down in fiscal year
Friday, June 5, 2009
Wheat | Durum Wheat Prices Rising Slower than Spring Wheat
Wheat Prices
Durum wheat hasn't followed the trend of its spring wheat counterpart, as it lages behind the higher prices spring wheat have brought so far this year.
Though some local cash durum prices have risen slightly they have not risen at the same level as spring wheat.
“Unfortunately durum hasn't enjoyed the same price increases as hard red spring wheat,” Olson said. “In fact, durum cash prices around the state are less than hard red spring wheat prices in some cases.”
Local cash bids for durum are anywhere from $6.75 to $7.25, which is just slightly higher than a couple weeks ago.
One of the major reasons spring wheat prices have appreciated so much recently is because planting is so far behind the usual pace. And although durum planting is also behind the normal pace, it is not as far behind as spring wheat.
In North Dakota, 69 percent of the durum crop has been planted compared to an average of 77 percent - just eight percentage points behind. Spring wheat in North Dakota, on the other hand, is 79 percent complete versus an average of 95 percent - a difference of 16 percent.
In one week, durum planting progress jumped by over 40 percent due to the good planting conditions the week of May 18-24.
In Montana, about 70 percent of the durum crop has been planted. That compares to an 84 percent average.
Olson pointed out that emergence for durum is also behind due to cooler than normal conditions this spring, but the recent warmer temperatures should help promote emergence and crop development.
The U.S. desert southwest durum crop is getting ripe and harvest is expected to begin soon.
“Right now about half the crop is mature,” Olson said. “There doesn't appear to be any major issues with that crop and we're expecting to see both good quality and good yields.”
To the north, Canadian producers are also experiencing a late planting season, but they have other concerns as well.
“In Canada there's actually some concerns that it's getting too dry in some of the major durum producing regions, so that obviously could impact planted acres and production,” Olson said.
In Europe, the only production concern is that wet weather and poor crop conditions have cut the estimate for durum production in italy from 147 million bushels to 127 million. North Africa has seen “near perfect growing conditions” so their production will be well above last year's levels, according to Olson.
U.S. durum exports lately haven't been overly supportive for prices either.
Wheat Prices
Durum wheat hasn't followed the trend of its spring wheat counterpart, as it lages behind the higher prices spring wheat have brought so far this year.
Though some local cash durum prices have risen slightly they have not risen at the same level as spring wheat.
“Unfortunately durum hasn't enjoyed the same price increases as hard red spring wheat,” Olson said. “In fact, durum cash prices around the state are less than hard red spring wheat prices in some cases.”
Local cash bids for durum are anywhere from $6.75 to $7.25, which is just slightly higher than a couple weeks ago.
One of the major reasons spring wheat prices have appreciated so much recently is because planting is so far behind the usual pace. And although durum planting is also behind the normal pace, it is not as far behind as spring wheat.
In North Dakota, 69 percent of the durum crop has been planted compared to an average of 77 percent - just eight percentage points behind. Spring wheat in North Dakota, on the other hand, is 79 percent complete versus an average of 95 percent - a difference of 16 percent.
In one week, durum planting progress jumped by over 40 percent due to the good planting conditions the week of May 18-24.
In Montana, about 70 percent of the durum crop has been planted. That compares to an 84 percent average.
Olson pointed out that emergence for durum is also behind due to cooler than normal conditions this spring, but the recent warmer temperatures should help promote emergence and crop development.
The U.S. desert southwest durum crop is getting ripe and harvest is expected to begin soon.
“Right now about half the crop is mature,” Olson said. “There doesn't appear to be any major issues with that crop and we're expecting to see both good quality and good yields.”
To the north, Canadian producers are also experiencing a late planting season, but they have other concerns as well.
“In Canada there's actually some concerns that it's getting too dry in some of the major durum producing regions, so that obviously could impact planted acres and production,” Olson said.
In Europe, the only production concern is that wet weather and poor crop conditions have cut the estimate for durum production in italy from 147 million bushels to 127 million. North Africa has seen “near perfect growing conditions” so their production will be well above last year's levels, according to Olson.
U.S. durum exports lately haven't been overly supportive for prices either.
Wheat Prices
Thursday, June 4, 2009
Wheat News | Wheat Inventories in India to Remain Huge
Wheat
Wheat inventories in India are likely to remain large given the expectation of another bumper crop this year and limited export opportunities, said the Food and Agriculture Organization (FAO) of the United Nation in its latest report.
Inventory in India, another major producer and stockholder, is forecast to remain unchanged at a five-year high of 17.8 million tonnes. But another bumper year for wheat in 2010 may increase the inventory further, said the report. The forecast assumes significance as the country has not opened wheat for exports despite excessive supplies in the domestic market.
Since, the United Progressive Alliance government has been formed without any alliance pressure and most importantly, the inflation remains under control, trade sources estimate the government may allow wheat exports in near future primarily because of global trade deficit.
FAO’s first forecast for wheat trade in 2009-10 stands at 114 million tonnes, down as much as 8 per cent, or 10 million tonnes from the estimated 2008-09 record volume.
Wheat export was suspended in May 2007 to control inflation that shot up over 13 per cent. The government also suspended futures trading in wheat due to the fear of price rise on traders’ speculation.
Meanwhile, FAO has estimated India’s wheat production to decline marginally by one per cent to 77.6 million tonnes in 2009 on favourable climatic condition throughout the season.
The specialised agency of the United Nations, which leads international efforts to defeat hunger, has forecast global wheat output to decline by 4 per cent to 655.8 million tonnes in 2009 compared with 684.6 million tonnes in the previous year.
The agency estimates total course grains’ output to remain rangebound at 37.8 million tonnes this calendar year compared with 38 million tonnes in the last year.
But, the global coarse grains production is likely to decline by 4 per cent at 1,098.5 million tonnes this year compared with 1,142.3 million tonnes in the previous year.
The 2008 paddy season has just been completed with the harvesting of secondary crops in Asia. Boosted by excellent results of these crops, global paddy production is now estimated at 689 million tonnes, equivalent to 460 million tonnes of milled rice, well above earlier expectations and 4.3 per cent more than in 2007.
But the sector’s attention is now turning to the 2009 season, which is already well advanced in all but the critically important south-eastern Asian region, where farmers are awaiting the imminent arrival of the monsoon rains to plant their crops.
Preliminary information on plantings and crop development over the 2009 season has been favourable. As a result and assuming a normal rainfall pattern in Asia in the coming months, world production in 2009 could gain a further 1 per cent and reach 696 million tonnes (465 million tonnes, milled equivalent), FAO said.
The relatively moderate increase expected in 2009 reflects less attractive prospects for producer returns. However, in spite of financial constraints, many governments have maintained their support to the sector through input subsidies, investment programmes and direct price incentives, which, barring any major setback, is likely to sustain production growth.
Trade sources estimate India’s rice output to remain rangebound at 147 million tons in 2009 provided monsoon arrives in time and distributed evenly.
Wheat
Wheat inventories in India are likely to remain large given the expectation of another bumper crop this year and limited export opportunities, said the Food and Agriculture Organization (FAO) of the United Nation in its latest report.
Inventory in India, another major producer and stockholder, is forecast to remain unchanged at a five-year high of 17.8 million tonnes. But another bumper year for wheat in 2010 may increase the inventory further, said the report. The forecast assumes significance as the country has not opened wheat for exports despite excessive supplies in the domestic market.
Since, the United Progressive Alliance government has been formed without any alliance pressure and most importantly, the inflation remains under control, trade sources estimate the government may allow wheat exports in near future primarily because of global trade deficit.
FAO’s first forecast for wheat trade in 2009-10 stands at 114 million tonnes, down as much as 8 per cent, or 10 million tonnes from the estimated 2008-09 record volume.
Wheat export was suspended in May 2007 to control inflation that shot up over 13 per cent. The government also suspended futures trading in wheat due to the fear of price rise on traders’ speculation.
Meanwhile, FAO has estimated India’s wheat production to decline marginally by one per cent to 77.6 million tonnes in 2009 on favourable climatic condition throughout the season.
The specialised agency of the United Nations, which leads international efforts to defeat hunger, has forecast global wheat output to decline by 4 per cent to 655.8 million tonnes in 2009 compared with 684.6 million tonnes in the previous year.
The agency estimates total course grains’ output to remain rangebound at 37.8 million tonnes this calendar year compared with 38 million tonnes in the last year.
But, the global coarse grains production is likely to decline by 4 per cent at 1,098.5 million tonnes this year compared with 1,142.3 million tonnes in the previous year.
The 2008 paddy season has just been completed with the harvesting of secondary crops in Asia. Boosted by excellent results of these crops, global paddy production is now estimated at 689 million tonnes, equivalent to 460 million tonnes of milled rice, well above earlier expectations and 4.3 per cent more than in 2007.
But the sector’s attention is now turning to the 2009 season, which is already well advanced in all but the critically important south-eastern Asian region, where farmers are awaiting the imminent arrival of the monsoon rains to plant their crops.
Preliminary information on plantings and crop development over the 2009 season has been favourable. As a result and assuming a normal rainfall pattern in Asia in the coming months, world production in 2009 could gain a further 1 per cent and reach 696 million tonnes (465 million tonnes, milled equivalent), FAO said.
The relatively moderate increase expected in 2009 reflects less attractive prospects for producer returns. However, in spite of financial constraints, many governments have maintained their support to the sector through input subsidies, investment programmes and direct price incentives, which, barring any major setback, is likely to sustain production growth.
Trade sources estimate India’s rice output to remain rangebound at 147 million tons in 2009 provided monsoon arrives in time and distributed evenly.
Wheat
Thursday, February 19, 2009
Stem Rust UG99 Savaging Kenya Wheat and is Spreading
Stem rust has returned with a vengeance 50 years after it was thought to eradicated, and now called UG99, it is decimating wheat in Kenya and going viral by spreading to other countries surrounding Africa.
The diseases came back in 1999, and skipped across the Red Sea to Yemen in 2006 and was discovered in Iran last year. Crop scientists say there is no defense at this time to stop its spread and are growing frustrated in their work on developing resistant strains. In about a year it can grow to huge levels under particular weather conditions.
After last year's food shortage caused partly from corn being diverted to ethanol and acreage used to grow other grains got taken up by corn, it resulted in food riots last year, the growing epidemic shows the vulnerability of the food supply in poorer countries.
Scientists were shocked in 1999 when it was discovered that wheat bred to resist stem rust fell to the fungus. That was the first sign something was wrong.
Researchers in South Africa and Minnesota recently found out why it was true. In the biological churning that constantly endows old pests with new genetic combinations, stem rust had acquired a scary power to break through the resistance that had guarded wheat for decades.
Close to eighty percent of Asian and African wheat varieties are now susceptible to the disease, and so is barley. Scientists dubbed the new threat Ug99 for its discovery in Uganda in 1999. But they say more than likely started in Kenya, where a lot more wheat is grown.
Almost a year ago the FAO confirmed that the fungus had spread to Iran and reported that "Afghanistan, India, Pakistan, Turkmenistan, Uzbekistan and Kazakhstan, all major wheat producers, are most threatened by the fungus and should be on high alert."
Contrary to regular rust infestations, which reduce but do not completely destroy yields, stem rust can eradicate a whole field.
Throughout the developing world, hundreds of millions of small-scale farmers are the most vulnerable.
Wheat experts from around the world have mobilized to fight the rust. Headquarters for the effort is the Kenya Agricultural Research Institute's station near the village of Njoro.
Norman Borlaug, who is credited with breeding the rust-resistant wheat that saved millions from hunger decades ago, was taken in 2005 by the Kenyans to look at the new stem rust damage and challenge.
Because the last stem rust outbreak was about 50 years ago, not many know the damage it could cause and so Borlaug recruited scientists from other wheat-producing countries and raised funds to underwrite their work. Foundations in the United States and Japan also got involved, as did the governments of Canada, India and the United States.
Researchers have been working stedfastly to find new resistant plants to UG99, but after numerous trials, plants have been losing the battle, as farmers around the world fear the right conditions will devastate their crops.
Most of the trials in the U.S. are being conducted in labs in Minnesota and Winnepeg, Canada in order to reduce effects if the virus escapes the labs somehow, as the brutally cold weather offers another layer of protecion if something goest wrong.
While there's a lot fo concern, at least scientists are working in ways that aren't going to cut corners, and are methodically taking the steps needed to fight the UG99 that will last.
The diseases came back in 1999, and skipped across the Red Sea to Yemen in 2006 and was discovered in Iran last year. Crop scientists say there is no defense at this time to stop its spread and are growing frustrated in their work on developing resistant strains. In about a year it can grow to huge levels under particular weather conditions.
After last year's food shortage caused partly from corn being diverted to ethanol and acreage used to grow other grains got taken up by corn, it resulted in food riots last year, the growing epidemic shows the vulnerability of the food supply in poorer countries.
Scientists were shocked in 1999 when it was discovered that wheat bred to resist stem rust fell to the fungus. That was the first sign something was wrong.
Researchers in South Africa and Minnesota recently found out why it was true. In the biological churning that constantly endows old pests with new genetic combinations, stem rust had acquired a scary power to break through the resistance that had guarded wheat for decades.
Close to eighty percent of Asian and African wheat varieties are now susceptible to the disease, and so is barley. Scientists dubbed the new threat Ug99 for its discovery in Uganda in 1999. But they say more than likely started in Kenya, where a lot more wheat is grown.
Almost a year ago the FAO confirmed that the fungus had spread to Iran and reported that "Afghanistan, India, Pakistan, Turkmenistan, Uzbekistan and Kazakhstan, all major wheat producers, are most threatened by the fungus and should be on high alert."
Contrary to regular rust infestations, which reduce but do not completely destroy yields, stem rust can eradicate a whole field.
Throughout the developing world, hundreds of millions of small-scale farmers are the most vulnerable.
Wheat experts from around the world have mobilized to fight the rust. Headquarters for the effort is the Kenya Agricultural Research Institute's station near the village of Njoro.
Norman Borlaug, who is credited with breeding the rust-resistant wheat that saved millions from hunger decades ago, was taken in 2005 by the Kenyans to look at the new stem rust damage and challenge.
Because the last stem rust outbreak was about 50 years ago, not many know the damage it could cause and so Borlaug recruited scientists from other wheat-producing countries and raised funds to underwrite their work. Foundations in the United States and Japan also got involved, as did the governments of Canada, India and the United States.
Researchers have been working stedfastly to find new resistant plants to UG99, but after numerous trials, plants have been losing the battle, as farmers around the world fear the right conditions will devastate their crops.
Most of the trials in the U.S. are being conducted in labs in Minnesota and Winnepeg, Canada in order to reduce effects if the virus escapes the labs somehow, as the brutally cold weather offers another layer of protecion if something goest wrong.
While there's a lot fo concern, at least scientists are working in ways that aren't going to cut corners, and are methodically taking the steps needed to fight the UG99 that will last.
Friday, February 6, 2009
Wheat | China Drought Threatens Crop
The wheat drought in China could end up being more of a worry than a reality as the country rolls out heavy irrigation efforts to save the wheat crop.
China's main wheat crop may yet emerge mostly unscathed from a dire drought as Beijing moves to fund last-minute irrigation, reviving crops that might otherwise have been left to die by farmers struggling with low prices and oversupply.
A domestic media outcry and public hand-wringing about the severity of the drought triggered some speculation that the world's biggest wheat producer might resort to imports, but experts say fears over the impact of the drought -- which officials have called the worst in half a century -- are misplaced and overblown.
On Thursday Beijing declared an emergency over the drought in parts of northern China that lie between Beijing and the Yangtze river, which have seen little snow or rain since November. Among the areas hardest hit is China's biggest wheat producing province, Henan, which grows a quarter of the crop.
The drought area covers almost half of China's winter wheat fields, but only a fraction have suffered real damage so far. Much potential damage could be prevented if farmers irrigate their fields in time, researchers said. The Agriculture Ministry said on Thursday half the affected fields had been irrigated.
"If all the measures are implemented, we will be able to keep losses to within 2.5 percent" of the total harvest, said Xiao Ziniu, an official at China Meteorological Administration.
A forecast for rain across much of the area this weekend should help, although too little is expected to end the drought.
Even so, President Hu Jintao has ordered "all-out efforts to combat the severe drought" and the government has mobilised millions of farmers to water their dry fields by offering subsidies and sending experts to help drought relief, which should minimise the impact on seedlings.
That could keep losses to less than 3 million tonnes, pulling overall production back from last year's record 112.5 million tonnes towards 2007 levels. That might prompt some sales from China's swollen granaries, but would be unlikely to spill over into calls for large imports from the international market.
While farmers are not yet in the clear -- the damage could get worse if crops are starved of water during their critical growing phase in March and April -- China also has a sizeable supply cushion should the damage spread.
Last year China exported only 126,000 tonnes before the government suspended exports, concerned about a spike in global prices that could have drained its stocks. To prevent a glut and pressure on farm incomes, the state bought up 43 million tonnes of wheat, adding extra reserves to existing stockpiles.
"Even in the worst-case scenario, the government, with 60 million tonnes of wheat stocks, has the ability to ensure supplies and control prices," said Ma Wenfeng, an analyst with Beijing Orient Agribusiness Consult Ltd.
Even so, the drought has stoked anxiety among analysts and traders over short-term supply, combined with a drought in Argentina, Indian export controls and Pakistan imports.
"In the current environment, with a lot of nervous investors who think commodities will rally later in the year, they're waiting for a good story for that to happen. News can really turn a market," said Brady Sidwell, an analyst at Rabobank.
Chinese wheat futures <0#CWS:> are up 5 percent since the market re-opened on Monday after a holiday week, but physical prices <0#ASWHEAT-CN> have remained stable at the price set by the government for its own purchases.
On the Chicago Board of Trade, front month wheat futures Wc1 jumped 3.6 percent on Thursday, although they are still down since the start of the month, as reports of the worsening crop began to circulate.
China is the world's top consumer and producer of wheat, and almost 95 percent comes from China's winter harvest.
For a graphic on world wheat producers click: here
"MAYBE DROUGHT IS GOOD NEWS"
Even though the wheat crop is likely to fall this year, the impact on farmers' incomes may be slight, or even positive.
Wang Shaozhong, a wheat researcher in Henan Academy of Agricultural Sciences, told Reuters that after five years of bumper harvests and a trend of migration from the countryside to the cities, many farmers had not irrigated their winter wheat because the cost was too high and the profit margin was too low.
"Grain prices are not attractive enough for them to expend too much effort watering the fields," said Wang.
Wang's colleagues at the Henan Academy of Agricultural Sciences have been dispatched to villages to ensure that wherever farmers have access to water, they irrigate their crops.
"We ask them to water all the wheat fields within 10 days. In some areas, local governments pay subsidies to farmers who irrigate fields," said another researcher with the Henan academy.
Watering dry crops means extra labour and fuel costs and those far from rivers would have to dig wells to get water.
In some areas it would cost 70-80 yuan ($11.70) to irrigate one mu, a Chinese land unit equivalent to one fifteenth of a hectare. That means farmers need to spend $2 to protect $1 worth of crops against potential damage from drought.
"If you water the fields, you may get 50 jin (25 kg) more wheat per mu, but with wheat prices at 0.8 yuan per jin, what does it matter as long as farmers can ensure they have enough to eat?
And after five good years, most farmers have grains in store and are not worried about food, he said.
"Or maybe the drought is good news for farmers because potentially tight grain supply would help push up grain prices. Cheap grain prices are hurting farmers."
At China's weekly wheat auctions on Wednesday, no bidders were interested in 914,212 tonnes of old stocks of imported wheat offered by the government. The government plans to auction a total of 1.73 million tonnes next week.
China's government is always wary of tensions in the countryside that could spark unrest, especially as the economic slowdown adds to the number of unemployed. But behind its rhetoric, the government has allocated a mere 400 million yuan ($60 million) to deal with the drought.
Much more help is likely to come from a state economic stimulus plan which, at 4 trillion yuan, is 10,000 times bigger and includes funds to upgrade agricultural infrastructure such as irrigation systems.
The wheat crop looks like it'll have a good chance to survive the drought in China as the irrigation efforts are starting to pay off.
China's main wheat crop may yet emerge mostly unscathed from a dire drought as Beijing moves to fund last-minute irrigation, reviving crops that might otherwise have been left to die by farmers struggling with low prices and oversupply.
A domestic media outcry and public hand-wringing about the severity of the drought triggered some speculation that the world's biggest wheat producer might resort to imports, but experts say fears over the impact of the drought -- which officials have called the worst in half a century -- are misplaced and overblown.
On Thursday Beijing declared an emergency over the drought in parts of northern China that lie between Beijing and the Yangtze river, which have seen little snow or rain since November. Among the areas hardest hit is China's biggest wheat producing province, Henan, which grows a quarter of the crop.
The drought area covers almost half of China's winter wheat fields, but only a fraction have suffered real damage so far. Much potential damage could be prevented if farmers irrigate their fields in time, researchers said. The Agriculture Ministry said on Thursday half the affected fields had been irrigated.
"If all the measures are implemented, we will be able to keep losses to within 2.5 percent" of the total harvest, said Xiao Ziniu, an official at China Meteorological Administration.
A forecast for rain across much of the area this weekend should help, although too little is expected to end the drought.
Even so, President Hu Jintao has ordered "all-out efforts to combat the severe drought" and the government has mobilised millions of farmers to water their dry fields by offering subsidies and sending experts to help drought relief, which should minimise the impact on seedlings.
That could keep losses to less than 3 million tonnes, pulling overall production back from last year's record 112.5 million tonnes towards 2007 levels. That might prompt some sales from China's swollen granaries, but would be unlikely to spill over into calls for large imports from the international market.
While farmers are not yet in the clear -- the damage could get worse if crops are starved of water during their critical growing phase in March and April -- China also has a sizeable supply cushion should the damage spread.
Last year China exported only 126,000 tonnes before the government suspended exports, concerned about a spike in global prices that could have drained its stocks. To prevent a glut and pressure on farm incomes, the state bought up 43 million tonnes of wheat, adding extra reserves to existing stockpiles.
"Even in the worst-case scenario, the government, with 60 million tonnes of wheat stocks, has the ability to ensure supplies and control prices," said Ma Wenfeng, an analyst with Beijing Orient Agribusiness Consult Ltd.
Even so, the drought has stoked anxiety among analysts and traders over short-term supply, combined with a drought in Argentina, Indian export controls and Pakistan imports.
"In the current environment, with a lot of nervous investors who think commodities will rally later in the year, they're waiting for a good story for that to happen. News can really turn a market," said Brady Sidwell, an analyst at Rabobank.
Chinese wheat futures <0#CWS:> are up 5 percent since the market re-opened on Monday after a holiday week, but physical prices <0#ASWHEAT-CN> have remained stable at the price set by the government for its own purchases.
On the Chicago Board of Trade, front month wheat futures Wc1 jumped 3.6 percent on Thursday, although they are still down since the start of the month, as reports of the worsening crop began to circulate.
China is the world's top consumer and producer of wheat, and almost 95 percent comes from China's winter harvest.
For a graphic on world wheat producers click: here
"MAYBE DROUGHT IS GOOD NEWS"
Even though the wheat crop is likely to fall this year, the impact on farmers' incomes may be slight, or even positive.
Wang Shaozhong, a wheat researcher in Henan Academy of Agricultural Sciences, told Reuters that after five years of bumper harvests and a trend of migration from the countryside to the cities, many farmers had not irrigated their winter wheat because the cost was too high and the profit margin was too low.
"Grain prices are not attractive enough for them to expend too much effort watering the fields," said Wang.
Wang's colleagues at the Henan Academy of Agricultural Sciences have been dispatched to villages to ensure that wherever farmers have access to water, they irrigate their crops.
"We ask them to water all the wheat fields within 10 days. In some areas, local governments pay subsidies to farmers who irrigate fields," said another researcher with the Henan academy.
Watering dry crops means extra labour and fuel costs and those far from rivers would have to dig wells to get water.
In some areas it would cost 70-80 yuan ($11.70) to irrigate one mu, a Chinese land unit equivalent to one fifteenth of a hectare. That means farmers need to spend $2 to protect $1 worth of crops against potential damage from drought.
"If you water the fields, you may get 50 jin (25 kg) more wheat per mu, but with wheat prices at 0.8 yuan per jin, what does it matter as long as farmers can ensure they have enough to eat?
And after five good years, most farmers have grains in store and are not worried about food, he said.
"Or maybe the drought is good news for farmers because potentially tight grain supply would help push up grain prices. Cheap grain prices are hurting farmers."
At China's weekly wheat auctions on Wednesday, no bidders were interested in 914,212 tonnes of old stocks of imported wheat offered by the government. The government plans to auction a total of 1.73 million tonnes next week.
China's government is always wary of tensions in the countryside that could spark unrest, especially as the economic slowdown adds to the number of unemployed. But behind its rhetoric, the government has allocated a mere 400 million yuan ($60 million) to deal with the drought.
Much more help is likely to come from a state economic stimulus plan which, at 4 trillion yuan, is 10,000 times bigger and includes funds to upgrade agricultural infrastructure such as irrigation systems.
The wheat crop looks like it'll have a good chance to survive the drought in China as the irrigation efforts are starting to pay off.
Sunday, January 25, 2009
Wheat: Argentina Wheat Market Crumbling
Although a number of crops are failing in Argentina, including corn and soy, wheat is also participating in the destructive drought that is crushing the entire agriculture sector of Argentina.
The commodity grain sector hasn't moved with the metals market, as demand for everything is down, even though people still need to eat, as well as their livestock.
This is particularly difficult for Argentina, who is one of the top exporters of grains in the world, and so depend on so much on it for the welfare of the country.
At this time things are so bad that farmers have given up trying to salvage their wheat crop, and instead are focusing on saving their cattle. Even if the cattle are saved, they will be difficult to breed because of the lack of food for them.
According to farmers in Argentina, wheat fields are as dried as they can be, with little hope of salvaging a wheat crop, as there is little to put in storage.
Unfortunately for everyone involved, the wheat planting, wheat yield and wheat harvest around the world has been huge, and so the drought in Argentina is hurting them without benefiting anyone else.
Even though farmers in the U.S. were hoping to get some of the trade usually done by Argentina with Brazil, it looks like it won't have much impact on wheat exports from the U.S., and so Argentines will be the ones to suffer.
So in spite of this, wheat futures aren't moving much because of this, although there was a slight move upward recently based on wheat news from the country. But it's not sustainable.
Weather predictions in the country are, as usual, contradictory, and so some say the drought will end with rain coming, and others say it won't amount to much. Either way, wheat farmers in Argentina, and its people, are in for a long struggle as grain prices continue to fall.
For Argentina, this is the worst year for drought and lack of rain since 1971, and even if there is a major change in the weather patterns, the wheat harvest will be way down, as wheat production grinds to a halt.
Along with the wheat crop, other crops suffering are corn and soy, with silos there to store the crops are in many cases empty or half full.
Even though soy is down, it is still on the positive side, and is projected to increase in production by 7 percent. The corn harvest will fall by about 27 percent, and wheat production will be hit the most from the poor growing season projected to plunge by 44 percent over the 2008-2009 harvesting season.
Grains are so scarce in the country, that the Argentine government is has even lowered the minimum weight requirements to slaughter cattle so the farmers can make some money off them before they are worthless or die.
It'll take some time to recover from this wheat disaster, as Argentina will suffer probably for a couple years or more trying to come back from this natural disaster.
In a normal year this would have boosted wheat prices tremendously, but the wheat harvest has been so plentiful globally, that it will easily absorb the losses without making a difference in wheat prices.
The commodity grain sector hasn't moved with the metals market, as demand for everything is down, even though people still need to eat, as well as their livestock.
This is particularly difficult for Argentina, who is one of the top exporters of grains in the world, and so depend on so much on it for the welfare of the country.
At this time things are so bad that farmers have given up trying to salvage their wheat crop, and instead are focusing on saving their cattle. Even if the cattle are saved, they will be difficult to breed because of the lack of food for them.
According to farmers in Argentina, wheat fields are as dried as they can be, with little hope of salvaging a wheat crop, as there is little to put in storage.
Unfortunately for everyone involved, the wheat planting, wheat yield and wheat harvest around the world has been huge, and so the drought in Argentina is hurting them without benefiting anyone else.
Even though farmers in the U.S. were hoping to get some of the trade usually done by Argentina with Brazil, it looks like it won't have much impact on wheat exports from the U.S., and so Argentines will be the ones to suffer.
So in spite of this, wheat futures aren't moving much because of this, although there was a slight move upward recently based on wheat news from the country. But it's not sustainable.
Weather predictions in the country are, as usual, contradictory, and so some say the drought will end with rain coming, and others say it won't amount to much. Either way, wheat farmers in Argentina, and its people, are in for a long struggle as grain prices continue to fall.
For Argentina, this is the worst year for drought and lack of rain since 1971, and even if there is a major change in the weather patterns, the wheat harvest will be way down, as wheat production grinds to a halt.
Along with the wheat crop, other crops suffering are corn and soy, with silos there to store the crops are in many cases empty or half full.
Even though soy is down, it is still on the positive side, and is projected to increase in production by 7 percent. The corn harvest will fall by about 27 percent, and wheat production will be hit the most from the poor growing season projected to plunge by 44 percent over the 2008-2009 harvesting season.
Grains are so scarce in the country, that the Argentine government is has even lowered the minimum weight requirements to slaughter cattle so the farmers can make some money off them before they are worthless or die.
It'll take some time to recover from this wheat disaster, as Argentina will suffer probably for a couple years or more trying to come back from this natural disaster.
In a normal year this would have boosted wheat prices tremendously, but the wheat harvest has been so plentiful globally, that it will easily absorb the losses without making a difference in wheat prices.
Friday, January 16, 2009
Wheat Prices Will Fall as Demand Dries Up
Some traders are looking for any tidbit of information to keep the wheat prices up, but I don't think they can hold for too long.
Much of the argument for wheat prices holding is the dry weather in a couple regions in South America.
But with prices higher now than the fundamentals warrant, it's hard to believe people seriously think losing a little bit of the global crop will really make much difference. There's so much wheat available that it would take something of epic proportions to keep prices up.
Even add in the possibility that the cold front in the U.S. may damage some wheat crop if there isn't any snow cover, and that still doesn't change the fact of the huge global supply available.
Most of what's been driving the prices up over the last couple months has been the re-entry of some funds into the market, along with the soybean rally. Over the last 6 weeks wheat futures have risen approximately 25 percent.
With demand so low, I don't see that being able to continue in any sustainable way in the months ahead.
The one unknown is when the U.S. dollar will start collapsing under the weight of the huge amounts of money being used to stimulate the U.S. economy. That would of course make exporting wheat much cheaper, and could increase sales.
The problem is there's no way of knowing how long that will take, so it can only be watched for, not counted on, as far as timing goes. When it does happen though, it will be a boon to commodity producers in the U.S.
Concerning demand, the USDA on Monday projected the ending stocks for U.S. wheat in 2008 - 2009 stand at 655 million bushels, an increase of 32 million from December's estimates. With nowhere to really send that wheat, as demand is so soft and wheat so plentiful, it will stay in storage until there's someone to sell it to.
Even that will continue to be a challenge as for the same time period, wheat consumption accroding to the USDA estimates, are being lowered.
Livestock markets have no interest at this time in buying either, as they're struggling as much as anyone else, with exports down and profits under pressure. Cost inputs and lower priced global wheat remains major factors in these decisions.
While there's nothing that can be done about it now, the real problem stems from last years' prices, where everything went right for U.S. wheat farmers, and supply was down globally. Farmers responded predictably by putting more wheat in the ground for this season, contributing in part to the current glut.
This wasn't too smart, as the chances of having two years in a row like that are almost nil, and they knew foreign farmers would respond the same at lower costs. Farmers, as well as anybody in business must learn if they missed it this time around, there's not much guarantee they hit it the next.
It's expected that spring wheat acreage planted this year will drop, especially if prices don't come back, which they are highly unlikely to do.
Much of the argument for wheat prices holding is the dry weather in a couple regions in South America.
But with prices higher now than the fundamentals warrant, it's hard to believe people seriously think losing a little bit of the global crop will really make much difference. There's so much wheat available that it would take something of epic proportions to keep prices up.
Even add in the possibility that the cold front in the U.S. may damage some wheat crop if there isn't any snow cover, and that still doesn't change the fact of the huge global supply available.
Most of what's been driving the prices up over the last couple months has been the re-entry of some funds into the market, along with the soybean rally. Over the last 6 weeks wheat futures have risen approximately 25 percent.
With demand so low, I don't see that being able to continue in any sustainable way in the months ahead.
The one unknown is when the U.S. dollar will start collapsing under the weight of the huge amounts of money being used to stimulate the U.S. economy. That would of course make exporting wheat much cheaper, and could increase sales.
The problem is there's no way of knowing how long that will take, so it can only be watched for, not counted on, as far as timing goes. When it does happen though, it will be a boon to commodity producers in the U.S.
Concerning demand, the USDA on Monday projected the ending stocks for U.S. wheat in 2008 - 2009 stand at 655 million bushels, an increase of 32 million from December's estimates. With nowhere to really send that wheat, as demand is so soft and wheat so plentiful, it will stay in storage until there's someone to sell it to.
Even that will continue to be a challenge as for the same time period, wheat consumption accroding to the USDA estimates, are being lowered.
Livestock markets have no interest at this time in buying either, as they're struggling as much as anyone else, with exports down and profits under pressure. Cost inputs and lower priced global wheat remains major factors in these decisions.
While there's nothing that can be done about it now, the real problem stems from last years' prices, where everything went right for U.S. wheat farmers, and supply was down globally. Farmers responded predictably by putting more wheat in the ground for this season, contributing in part to the current glut.
This wasn't too smart, as the chances of having two years in a row like that are almost nil, and they knew foreign farmers would respond the same at lower costs. Farmers, as well as anybody in business must learn if they missed it this time around, there's not much guarantee they hit it the next.
It's expected that spring wheat acreage planted this year will drop, especially if prices don't come back, which they are highly unlikely to do.
Wednesday, January 14, 2009
DJ US Wheat Review: Ends Up Amid Talk About Frigid Weather
CHICAGO, Jan 14, 2009 (Dow Jones Commodities News via Comtex) --
By Tom Polansek
Of DOW JONES NEWSWIRES
U.S. wheat futures settled higher Wednesday in choppy trading amid worries about the potential for plant damage from a deep freeze in the U.S.
Chicago Board of Trade March wheat futures gained 3 1/2 cents to $5.74 1/4 per bushel. Kansas City Board of Trade March wheat edged up 3 cents to $6.00, and Minneapolis Grain Exchange March wheat added 4 3/4 cents to $6.41 3/4.
The markets seemed to find support from fears that subzero temperatures are threatening winter wheat that does not have adequate snow cover, traders said. Soft red winter wheat in portions of southern Illinois appears to be most at risk for damage from winterkill, which reduces yields, they said.
Still, it's difficult to get too bulled up about the weather because the crop doesn't grow during the winter, an analyst said. Farmers can't determine the full extent of winterkill damage until plants break dormancy in spring.
"In reality, you're not going to get the market to bite off on that until you get into April," an analyst said about winterkill fears.
Trading was thin and choppy for much of the day session, so it's hard to read too much into the activity, a CBOT floor trader said. Commodity funds bought an estimated 1,000 contracts.
CBOT March wheat traded in a range of $5.62 to $5.80 in open outcry trading. CBOT March wheat has support at its 40-day moving average around $5.57 1/2, an analyst said.
The firm close marked the second consecutive day of gains for wheat following sharp losses Monday. CBOT wheat closed near limit down Monday amid spillover pressure from limit-down corn and soybeans.
Kansas City Board of Trade
KCBT wheat ended higher after trading both sides with the other markets. March wheat traded in a range of $5.89 1/2 to $6.07 1/2.
U.S. wheat continues to be uncompetitive on the world export market because prices are too high, traders said. The U.S. has faced tough competition lately from countries the Black Sea region, such as Russia.
Egypt's state-owned General Authority for Supply Commodities, or GASC, said Wednesday it is tendering to buy 55,000-60,000 tons of wheat for shipment Feb. 6-20 on a free-on-board basis. Egypt on Tuesday bought 60,000 tons of Russian wheat in a tender.
Minneapolis Grain Exchange
MGE wheat ended higher as the markets continued to recover from Monday's slide, a trader said. There was a lack of fresh news concerning spring wheat, traded at the MGE, he said.
"If you got some export sales, it's bullish," an analyst said. "Routine business to Japan doesn't count."
Japan said Tuesday it was seeking 157,000 tons of wheat, including 90,000 tons from the U.S., in a tender to be concluded Thursday. The tender shouldn't impact the markets because it is routine, traders said.
March wheat traded in a range of $6.33 to $6.48. That was within Tuesday's range, which spanned from $6.24 1/2 to $6.54 1/4.
-By Tom Polansek, Dow Jones Newswires; 312-341-5780; tom.polansek@dowjones.com
(END) Dow Jones Newswires
Copyright (c) 2009 Dow Jones & Company, Inc.
By Tom Polansek
Of DOW JONES NEWSWIRES
U.S. wheat futures settled higher Wednesday in choppy trading amid worries about the potential for plant damage from a deep freeze in the U.S.
Chicago Board of Trade March wheat futures gained 3 1/2 cents to $5.74 1/4 per bushel. Kansas City Board of Trade March wheat edged up 3 cents to $6.00, and Minneapolis Grain Exchange March wheat added 4 3/4 cents to $6.41 3/4.
The markets seemed to find support from fears that subzero temperatures are threatening winter wheat that does not have adequate snow cover, traders said. Soft red winter wheat in portions of southern Illinois appears to be most at risk for damage from winterkill, which reduces yields, they said.
Still, it's difficult to get too bulled up about the weather because the crop doesn't grow during the winter, an analyst said. Farmers can't determine the full extent of winterkill damage until plants break dormancy in spring.
"In reality, you're not going to get the market to bite off on that until you get into April," an analyst said about winterkill fears.
Trading was thin and choppy for much of the day session, so it's hard to read too much into the activity, a CBOT floor trader said. Commodity funds bought an estimated 1,000 contracts.
CBOT March wheat traded in a range of $5.62 to $5.80 in open outcry trading. CBOT March wheat has support at its 40-day moving average around $5.57 1/2, an analyst said.
The firm close marked the second consecutive day of gains for wheat following sharp losses Monday. CBOT wheat closed near limit down Monday amid spillover pressure from limit-down corn and soybeans.
Kansas City Board of Trade
KCBT wheat ended higher after trading both sides with the other markets. March wheat traded in a range of $5.89 1/2 to $6.07 1/2.
U.S. wheat continues to be uncompetitive on the world export market because prices are too high, traders said. The U.S. has faced tough competition lately from countries the Black Sea region, such as Russia.
Egypt's state-owned General Authority for Supply Commodities, or GASC, said Wednesday it is tendering to buy 55,000-60,000 tons of wheat for shipment Feb. 6-20 on a free-on-board basis. Egypt on Tuesday bought 60,000 tons of Russian wheat in a tender.
Minneapolis Grain Exchange
MGE wheat ended higher as the markets continued to recover from Monday's slide, a trader said. There was a lack of fresh news concerning spring wheat, traded at the MGE, he said.
"If you got some export sales, it's bullish," an analyst said. "Routine business to Japan doesn't count."
Japan said Tuesday it was seeking 157,000 tons of wheat, including 90,000 tons from the U.S., in a tender to be concluded Thursday. The tender shouldn't impact the markets because it is routine, traders said.
March wheat traded in a range of $6.33 to $6.48. That was within Tuesday's range, which spanned from $6.24 1/2 to $6.54 1/4.
-By Tom Polansek, Dow Jones Newswires; 312-341-5780; tom.polansek@dowjones.com
(END) Dow Jones Newswires
Copyright (c) 2009 Dow Jones & Company, Inc.
Monday, January 12, 2009
Wheat Prices Fall to Exchange Limit on Rising Supply
While wheat didn't revise estimates near as much as corn, global projections still rose 0.7 percent to 148.4 million metric tons by the close of the marketing year on May 31, according to the USDA.
Estimates are there will be a surplus of U.S. wheat of 655 million bushels - an increase of 5.1 percent - by May 31. That will be over double the 306 million bushels available last year.
December wheat inventories in the U.S. increased by 26 percent to 1.422 billion bushels on December 1, a 26 percent increase over last year's 1.132 billon bushels.
Wheat futures for March delivery dropped 59.75 cents, or 9.5 percent, to $5.6975. Earlier in the session it dropped to its 60 cents limit.
From September to December, farmers planted 42.098 million acres, down from the 46.281 acres in 2007.
Estimates are there will be a surplus of U.S. wheat of 655 million bushels - an increase of 5.1 percent - by May 31. That will be over double the 306 million bushels available last year.
December wheat inventories in the U.S. increased by 26 percent to 1.422 billion bushels on December 1, a 26 percent increase over last year's 1.132 billon bushels.
Wheat futures for March delivery dropped 59.75 cents, or 9.5 percent, to $5.6975. Earlier in the session it dropped to its 60 cents limit.
From September to December, farmers planted 42.098 million acres, down from the 46.281 acres in 2007.
Saturday, January 10, 2009
Wheat Prices Slightly Up on Dry Weather, Investment Funds
Although wheat was able to post gains of about 1 percent, primarily on the dry weather pattern in South America, overall poor demand still weighs on upward movement, and should cause the grain to fall.
Another help for prices this week were some investment funds reentering the commodities market.
Global wheat supplies are abundant this year, and most are less expensive than American wheat, which should continue to put downward pressure on the price.
For the week, U.S. wheat exports plunged from the expected 300,000 to 400,000 tons, to only 41,800 tons.
Unless the number of acres planted for wheat goes down significantly, wheat prices could fall to lows as spring breaks in.
If weather continues to be dry in South America, it could help the prices hold for a little longer.
Another help for prices this week were some investment funds reentering the commodities market.
Global wheat supplies are abundant this year, and most are less expensive than American wheat, which should continue to put downward pressure on the price.
For the week, U.S. wheat exports plunged from the expected 300,000 to 400,000 tons, to only 41,800 tons.
Unless the number of acres planted for wheat goes down significantly, wheat prices could fall to lows as spring breaks in.
If weather continues to be dry in South America, it could help the prices hold for a little longer.
Monday, January 5, 2009
CBOT Limits Ag Receipts Held by Non-Grain Companies to Improve Performance of Hedging
In response to pressure over the last year, the CBOT has responded to requests from its regulator, the Commodity Futures Trading Commission, and will now limit the number of warehouse receipts and grain shipping certificates a non-grain company can hold.
This is especially targeted to soft red winter wheat contracts, to improve its hedging effectiveness, which has been dismal for some time. At the same time it'll help other grain contracts like corn, rice, wheat, oat, soybean, soymeal and soyoil.
Starting on February 17, the Chicago Board of Trade will enact the limits on the non-grain holding companies that hold grain shipping certificates or warehouse receipts, which will be given until May 31 to comply with the new rules.
Here are the parameters below:
Commodity - Limit
Corn shipping certificates - 600*
Soybean shipping certificates - 600*
Wheat shipping certificates - 600*
Soybean oil warehouse receipts - 540
Soybean meal shipping certificates - 720
Oat shipping certificates - 600
Rough rice warehouse receipts - 600
*Includes certificates for CBOT mini-contracts.
This is especially targeted to soft red winter wheat contracts, to improve its hedging effectiveness, which has been dismal for some time. At the same time it'll help other grain contracts like corn, rice, wheat, oat, soybean, soymeal and soyoil.
Starting on February 17, the Chicago Board of Trade will enact the limits on the non-grain holding companies that hold grain shipping certificates or warehouse receipts, which will be given until May 31 to comply with the new rules.
Here are the parameters below:
Commodity - Limit
Corn shipping certificates - 600*
Soybean shipping certificates - 600*
Wheat shipping certificates - 600*
Soybean oil warehouse receipts - 540
Soybean meal shipping certificates - 720
Oat shipping certificates - 600
Rough rice warehouse receipts - 600
*Includes certificates for CBOT mini-contracts.
Saturday, January 3, 2009
New Winter Wheat Ready For Production
ScienceDaily (Jan. 1, 2009) — Anton, a hard white winter wheat cultivar developed by Agricultural Research Service (ARS) and University of Nebraska (UN) scientists, is now available for production in the Northern Plains region as a source of high-quality flour for bread, noodles and other baked goods.
Anton is the product of 15 years of selective breeding and evaluation by scientists with ARS' Grain, Forage and Bioenergy Research Unit and UN's Nebraska Agricultural Experiment Station (NAES), both at Lincoln, Neb.
ARS plant geneticist Robert Graybosch collaborated with NAES small-grains breeder Stephen Baenziger and others to develop Anton as a wheat cultivar with reduced levels of the enzyme polyphenol oxidase (PPO). This enzyme is found in many plants, fruits and vegetables, and leads to biochemical reactions that cause browning. In wheat, low PPO levels correlate to improved end-use quality, especially color in noodles. White wheat flour also has a milder flavor than red wheat flour, such as in whole-grain breads.
Anton is the "top pick" of four generations of offspring plants derived from crosses between the commercial cultivar Platte and two wheat breeding lines, WA691213-27 and N86L177. During 2003-2004 evaluations at ARS' Northern Regional Performance Nursery in Nebraska, Anton's grain yields were similar to those of Nuplains and Nekota (two white winter wheats), but lower than yields of the red winter wheat Darrell.
During 2007 trials conducted by NAES, Anton averaged 50 bushels per acre compared to 57, 53 and 54 bushels for, respectively, Millennium, Jagalene and Wesley, Nebraska's top three winter wheats. In end-use trials, though, Anton scored higher on mixograph tests, which measure dough-gluten strength and resistance to breakdown when rolled with pins. Anton's lower PPO levels also meant noodles made from its flour sustained fewer color and brightness changes during a 24-hour evaluation period.
Anton grows to about 31 inches tall. It is somewhat resistant to stem and leaf rust diseases, moderately susceptible to stripe rust, and tolerates wheat soilborne mosaic virus.
UN's Foundation Seed Division is handling requests for seeds of Anton.
Anton is the product of 15 years of selective breeding and evaluation by scientists with ARS' Grain, Forage and Bioenergy Research Unit and UN's Nebraska Agricultural Experiment Station (NAES), both at Lincoln, Neb.
ARS plant geneticist Robert Graybosch collaborated with NAES small-grains breeder Stephen Baenziger and others to develop Anton as a wheat cultivar with reduced levels of the enzyme polyphenol oxidase (PPO). This enzyme is found in many plants, fruits and vegetables, and leads to biochemical reactions that cause browning. In wheat, low PPO levels correlate to improved end-use quality, especially color in noodles. White wheat flour also has a milder flavor than red wheat flour, such as in whole-grain breads.
Anton is the "top pick" of four generations of offspring plants derived from crosses between the commercial cultivar Platte and two wheat breeding lines, WA691213-27 and N86L177. During 2003-2004 evaluations at ARS' Northern Regional Performance Nursery in Nebraska, Anton's grain yields were similar to those of Nuplains and Nekota (two white winter wheats), but lower than yields of the red winter wheat Darrell.
During 2007 trials conducted by NAES, Anton averaged 50 bushels per acre compared to 57, 53 and 54 bushels for, respectively, Millennium, Jagalene and Wesley, Nebraska's top three winter wheats. In end-use trials, though, Anton scored higher on mixograph tests, which measure dough-gluten strength and resistance to breakdown when rolled with pins. Anton's lower PPO levels also meant noodles made from its flour sustained fewer color and brightness changes during a 24-hour evaluation period.
Anton grows to about 31 inches tall. It is somewhat resistant to stem and leaf rust diseases, moderately susceptible to stripe rust, and tolerates wheat soilborne mosaic virus.
UN's Foundation Seed Division is handling requests for seeds of Anton.
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