MORE good news this month for feed raw material consumers’ costs: The world supply outlook for maize seems to be getting looser by the month, pushing prices down to yet more historical (33-month) lows as we go to press. Not only has the US crop turned out even bigger than expected in our last review; the second largest consumer of maize, China, now appears to be using considerably less than estimated earlier. Top outlet for maize, the USA might also need less than expected as we move into 2014 after proposals to roll back targets for renewable fuel use.
Grain prices have steadied in recent weeks after their long drop amid further signs that 2015/16 supplies will be ‘less loose’ than this season’s - if not exactly ‘tight’ by historical comparison.
FUNDAMENTALS have tipped further in favour of the grain and feed consumer since our April review as an ever loosening new crop supply outlook promises an extended period of cost restraint. Until recently, the popular view among analysts had been for an inevitable decline in crop yields from last year’s above normal levels and, in several key supplier countries, some cutback in sowings in response to this season’s grain surpluses and low prices. But it was also assumed the massive stocks carried over from the current season of plenty would cushion the forward market against the crop decline – so no reason for any drastic price increases.
MORE good news this month for feed raw material consumers’ costs: The world supply outlook for maize seems to be getting looser by the month, pushing prices down to yet more historical (33-month) lows as we go to press. Not only has the US crop turned out even bigger than expected in our last review; the second largest consumer of maize, China, now appears to be using considerably less than estimated earlier. Top outlet for maize, the USA might also need less than expected as we move into 2014 after proposals to roll back targets for renewable fuel use.
Grain prices have steadied in recent weeks after their long drop amid further signs that 2015/16 supplies will be ‘less loose’ than this season’s - if not exactly ‘tight’ by historical comparison.
FUNDAMENTALS have tipped further in favour of the grain and feed consumer since our April review as an ever loosening new crop supply outlook promises an extended period of cost restraint. Until recently, the popular view among analysts had been for an inevitable decline in crop yields from last year’s above normal levels and, in several key supplier countries, some cutback in sowings in response to this season’s grain surpluses and low prices. But it was also assumed the massive stocks carried over from the current season of plenty would cushion the forward market against the crop decline – so no reason for any drastic price increases.
Grain & feed markets have been volatile in the past month, futures prices initially rising sharply on ‘outside’ buying, then dropping back again under the weight of more bearish supply news - with the notable exception of soya.
As “enlightened” as such statement by what Stanford University calls “the most influential English speaking philosopher of the 19th century” is, one could easily make an argument that when it comes to commodity market analysis the statement seems to be as useful as a bicycle to a fish.
IT has been a mostly bearish period since our last review – thanks to some new record crop and stocks estimates for wheat and soyabeans and the chill economic wind blowing from China. The latter especially has unsettled global market sentiment, casting a shadow over the forward outlook for commodity demand – especially in the feed and bio-fuel sectors (depressing crude oil prices to new lows). It also seems to have outweighed, for now at least, the likelihood that US and CIS – possibly also South American maize supply has been over-rated – although, even if it is, there is probably still more than enough of the leading feed grain to meet all perceived demand, as discussed in more detail below. The overall impact of these events as we go to press has been to push prices to new five-year lows for US and EU wheat, 6½- year lows for soyabeans and to dampen ideas of a sustained recovery in the feed grain sector (maize prices have at least managed to stay above last September’s five-year lows but for how long?)
GLOBAL wheat markets have spent most of 2015 to date in retreat from a steep run-up in prices in the final weeks of last year. Many readers may be aware that the main element in that upturn was the decision by fourth largest exporter Russia to curb the too-rapid flow of its once-plentiful milling wheat onto world markets at a time when doubts were rising about the size of its next harvest. As the rouble nosedived with the collapse in value of Russia’s crude oil exports and Western sanctions – keeping Russian exports cheap - there did seem a real risk, as the year turned, that too much of its wheat would be snapped up by foreign buyers, leaving its domestic market short and at risk of escalating costs for that most basic staple, bread. Russia is also thought to need more wheat and other cereals for animal feed this seaso as it tries to boost domestic livestock output to replace embargoed meat imports from Europe and the USA.
CROP farmers anxiously watching prices fall to ever less remunerative levels have had further unwelcome news over the past couple of months from yet higher cereal and oilseed crop estimates across the Northern Hemisphere.
CONCERNS about the long-term impact of a weather-challenged autumn sowing campaign in the former Soviet ‘Black Sea’ countries have dominated market sentiment since our last review, keeping wheat prices off the rock-bottom levels that might have been demanded by this season’s huge surplus crop.
In the ever-changing agriculture markets, risk management requires timely, accurate and independent assessment of global crop production.
This is what Lanworth delivers.
Prices on the benchmark grain and feed ingredient markets had been eroding further since our last review, several reaching new five and a to six-year lows. But the latest descent was much more gradual than in recent months and by mid-March, market leaders wheat, maize and soyabeans had all begun to show signs of bottoming out. The leading Chicago wheat futures
Back in late 2014, I was tasked with designing a European crop tour for Thomson Reuters. We wanted to get into the fields and talk with industry participants in key grain regions, and then translate that information into actionable insight for the market.
Grain & feed markets have been volatile in the past month, futures prices initially rising sharply on ‘outside’ buying, then dropping back again under the weight of more bearish supply news - with the notable exception of soya.
As “enlightened” as such statement by what Stanford University calls “the most influential English speaking philosopher of the 19th century” is, one could easily make an argument that when it comes to commodity market analysis the statement seems to be as useful as a bicycle to a fish.
IT has been a mostly bearish period since our last review – thanks to some new record crop and stocks estimates for wheat and soyabeans and the chill economic wind blowing from China. The latter especially has unsettled global market sentiment, casting a shadow over the forward outlook for commodity demand – especially in the feed and bio-fuel sectors (depressing crude oil prices to new lows). It also seems to have outweighed, for now at least, the likelihood that US and CIS – possibly also South American maize supply has been over-rated – although, even if it is, there is probably still more than enough of the leading feed grain to meet all perceived demand, as discussed in more detail below. The overall impact of these events as we go to press has been to push prices to new five-year lows for US and EU wheat, 6½- year lows for soyabeans and to dampen ideas of a sustained recovery in the feed grain sector (maize prices have at least managed to stay above last September’s five-year lows but for how long?)
GLOBAL wheat markets have spent most of 2015 to date in retreat from a steep run-up in prices in the final weeks of last year. Many readers may be aware that the main element in that upturn was the decision by fourth largest exporter Russia to curb the too-rapid flow of its once-plentiful milling wheat onto world markets at a time when doubts were rising about the size of its next harvest. As the rouble nosedived with the collapse in value of Russia’s crude oil exports and Western sanctions – keeping Russian exports cheap - there did seem a real risk, as the year turned, that too much of its wheat would be snapped up by foreign buyers, leaving its domestic market short and at risk of escalating costs for that most basic staple, bread. Russia is also thought to need more wheat and other cereals for animal feed this seaso as it tries to boost domestic livestock output to replace embargoed meat imports from Europe and the USA.
CROP farmers anxiously watching prices fall to ever less remunerative levels have had further unwelcome news over the past couple of months from yet higher cereal and oilseed crop estimates across the Northern Hemisphere.
CONCERNS about the long-term impact of a weather-challenged autumn sowing campaign in the former Soviet ‘Black Sea’ countries have dominated market sentiment since our last review, keeping wheat prices off the rock-bottom levels that might have been demanded by this season’s huge surplus crop.
In the ever-changing agriculture markets, risk management requires timely, accurate and independent assessment of global crop production.
This is what Lanworth delivers.
Prices on the benchmark grain and feed ingredient markets had been eroding further since our last review, several reaching new five and a to six-year lows. But the latest descent was much more gradual than in recent months and by mid-March, market leaders wheat, maize and soyabeans had all begun to show signs of bottoming out. The leading Chicago wheat futures
Back in late 2014, I was tasked with designing a European crop tour for Thomson Reuters. We wanted to get into the fields and talk with industry participants in key grain regions, and then translate that information into actionable insight for the market.
We partnered up with MN West Central SBDC and the ND Small Business Administration to talk about how crafters, artists, and makers can harness the power of social to grow their businesses.
Dr. Steve Meyer - Market Outlook for 2013 and BeyondJohn Blue
Market Outlook for 2013 and Beyond - Dr. Steve Meyer, President of Paragon Economics, from the 2013 Minnesota Pork Congress, January 16-17, Minneapolis, MN, USA.
More presentations at http://www.swinecast.com/2013-minnesota-pork-congress
Market Outlook - Dr. Steve Meyer, livestock and agricultural economist, Paragon Economics, Inc. , from the 2012 Minnesota Pork Congress, January 18-19, Minneapolis, MN, USA.
Dr. Steve Meyer - Show Me the Money: Economic OutlookJohn Blue
Show Me the Money: Economic Outlook - Dr. Steve Meyer, President of Paragon Economics, from the 2013 Iowa Pork Congress, January 23-24, Des Moines, IA, USA.
More presentations at http://www.swinecast.com/2013-iowa-pork-congress
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Dr. Steve Meyer - Riding the Roller Coaster: Economic OutlookJohn Blue
Riding the Roller Coaster: Economic Outlook - Steve Meyer, livestock and agricultural economist, Paragon Economics, Inc., from the 2012 Iowa Pork Congress, January 24 - 26, Des Moines, IA, USA.
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