The document discusses recent developments in global grain and feed markets over November-December 2012. It notes that while wheat prices rose sharply due to tight supplies, updated USDA crop estimates projected larger crops and higher stocks, lowering prices. Supplies from major exporters like Russia, Ukraine, and Argentina are expected to decline this season. Macroeconomic uncertainties like the Eurozone crisis and slowing Chinese growth may also impact markets. The outlook for 2013 crops and prices remains uncertain depending on winter weather conditions.
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.
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.
World prices of cereals, as measured on the benchmark Chicago futures market – were getting incredibly cheap during June – maize edging towards three and wheat to four-year lows under pressure from excessive stocks, uncertain forward demand for feed and expected large world crops. But the picture has changed radically in the last few weeks as those optimistic world wheat crop estimates have started to slide on unexpected weather problems – first in Canada, then Europe itself and latterly in the former Soviet Union, where coarse grain output could take an even bigger hit from droughts and heat-waves.
Weather for northern hemisphere winter-sown wheat and barley crops has remained mostly favourable in recent weeks and harvests prospects currently look promising. As expected, world wheat area has not dropped much in response to low prices and current estimates suggest output within 10m tonnes or so of last year’s bumper 680m tonnes. EU wheat production is actually expected to increase by 5m or 6m tonnes, creating a larger surplus over domestic and export demand – even with an extra 2m tonnes going to the new outlets in ethanol fuel plants.
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.
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.
World prices of cereals, as measured on the benchmark Chicago futures market – were getting incredibly cheap during June – maize edging towards three and wheat to four-year lows under pressure from excessive stocks, uncertain forward demand for feed and expected large world crops. But the picture has changed radically in the last few weeks as those optimistic world wheat crop estimates have started to slide on unexpected weather problems – first in Canada, then Europe itself and latterly in the former Soviet Union, where coarse grain output could take an even bigger hit from droughts and heat-waves.
Weather for northern hemisphere winter-sown wheat and barley crops has remained mostly favourable in recent weeks and harvests prospects currently look promising. As expected, world wheat area has not dropped much in response to low prices and current estimates suggest output within 10m tonnes or so of last year’s bumper 680m tonnes. EU wheat production is actually expected to increase by 5m or 6m tonnes, creating a larger surplus over domestic and export demand – even with an extra 2m tonnes going to the new outlets in ethanol fuel plants.
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?)
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.
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.
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.
Constantly rising wheat crop estimates, record large global stocks of cereals in total and mostly ‘yield-friendly’ weather in the Northern hemisphere have continued to erode grain prices over the past month, resulting in US wheat trading near 10-year lows.
JUST two months on from our last review, the mood in cereal markets has shifted markedly from bear to bull – for the short term at least. The over-riding influence has been events in the former Soviet Union, where the risk of political upheaval turning to military conflict cast a shadow over grain exports from this important supplying region.
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.
As we use Return on Investment it is also about time to discuss Return on Time. Time is a differentiator factor and is subject to analysis.
The presentation uses a light-based metaphor: Time Scattering
Do we revert to type and show behaviors characteristic of clay? Do we need to develop organizational structures in emulation of clay? The presentation offers some insights on these questions
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?)
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.
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.
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.
Constantly rising wheat crop estimates, record large global stocks of cereals in total and mostly ‘yield-friendly’ weather in the Northern hemisphere have continued to erode grain prices over the past month, resulting in US wheat trading near 10-year lows.
JUST two months on from our last review, the mood in cereal markets has shifted markedly from bear to bull – for the short term at least. The over-riding influence has been events in the former Soviet Union, where the risk of political upheaval turning to military conflict cast a shadow over grain exports from this important supplying region.
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.
As we use Return on Investment it is also about time to discuss Return on Time. Time is a differentiator factor and is subject to analysis.
The presentation uses a light-based metaphor: Time Scattering
Do we revert to type and show behaviors characteristic of clay? Do we need to develop organizational structures in emulation of clay? The presentation offers some insights on these questions
There is a commonality of three simple rules in various sectors. The three simple rules affect singing sand, flying birds, marketing, sales, IT, Change and other sectors. Three simple rules that create emergent structures and behaviors
The disruptive rippling effect of technologyAli Anani, PhD
The presentation highlights by example the effect of disruptive technologies on businesses and works. The presentation shows there is a new balance emerging between more is less and more is more. The presentation anticipates the emergence of disruptive Blue Ocean Strategy and the rationale behind this thinking.
WITH most of 2012’s adverse supply developments now factored into prices, world grain and feed markets are now starting to fix their sights more firmly on 2013/14 crop prospects. A recovery is certainly needed in 2013 cereal output. Latest estimates show world production this season is dropping by about 75m tonnes or just over 4% but consumption by only 37m tonnes or 2%, the balance coming off stocks.
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
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.
Agricultural trade has been an important contributor in Bangladesh to improved food security and price stability. For example, private sector imports have assured a price ceiling at import parity levels in the aftermath of major floods in 1998 and 2004. As the global price crisis has shown, however, the positive experiences with private trade might not completely eliminate the role of public food stocks. While Bangladesh is a net agricultural importer, it has also been successful in exporting cereals and high-value products such as shrimp and fish. This success has partly been due to preferential trade agreements. However, further investments are needed to assure that Bangladesh can adhere to increasing quality and safety standards and to prepare for a more liberalized international trade environment, once the Doha trade negotiations are finalized.
Forecasting prices even one year ahead can be a hazardous business. That applies especially to markets so dominated by that most unpredictable element of weather and, increasingly these days; the sometimes even more capricious influence of global economic trends – trade and GDP growth, currency volatility, the price of crude oil, etc.
NNFCC market review feedstocks issue seven october 2012NNFCC
Welcome to the October 2012 issue of our market review for biomass feedstocks. As the UK’s crop harvest draws to a close, it is not only remarkable for being two weeks later than normal and for producing the lowest yields seen since the 1980s but it could also play its part in causing a major shift in EU biofuel policy.
For 2016/17 (July to June), Post/New total Mexican wheat production is forecast to increase to 3.9 million metric tons (MMT). This increase of approximately 3.7 percent assumes favourable weather conditions and normal yields in the key wheat areas of Northwest Mexico (Baja California and Sonora) for the 2015/16 autumn/winter crop cycle.
The long-awaited Panama Canal expansion opened earlier this Summer with a ceremonial ship passing through the waterway. Based on extensive research including more than 100 studies on the economic feasibility, market demand, environmental impact and other technical engineering aspects, the Panama Canal expansion involved the construction of a ‘Third Set of Locks’ that will now allow larger ships to pass through the famous canal.
Family-owned Catalyst, formerly Pharm-Tech, custom formulates and manufactures feed and nutritional supplements for customers in the livestock, poultry, pet, wildlife and aquaculture industries. It operates five production plants, three in Idaho and two in Iowa. Its range of over 100 products includes digestive aids, mineral supplements and most recently Certified Organic blends and finished feeds.
Wholegrain Ingredient Producers EDME, based in England, has pioneered an innovative new category of ingredients. Michael Carr, Sales and Marketing Director of natural ingredient producer at EDME says, “We’ve identified a growing interest in sprouted foods and have developed a brand new product category to help bakers and food manufacturers meet that interest and demand.” Sprouted grains meet the demand for new wholegrain ingredients that are nutritious, soft and tender, as well as being more palatable and digestible.
Last month, we outlined the new regulations that grain processors needed to be aware of. This included the new NFPA 652 and OSHA initiatives. This month we delve into the array of options available to control combustible dust. Grain processors need to be aware of the strengths and weaknesses of each before choosing the smartest approach.
Operating in 140 countries and boasting 90 service stations worldwide, Bühler has been at the vanguard of industrial process technologies and solutions for over 150 years. Contributing significantly to feeding the world’s ever-growing population, Bühler manufactures equipment for processing of maize, wheat, chocolate, rice, pasta and breakfast cereals globally. In fact, 65 percent of wheat milled around the globe is processed on Bühler grain mills and around 30 percent of global rice production is processed using Bühler equipment.
A consolidation of highly respected British brands E R & F Turner, Christy & Norris and Miracle Mills, Christy Turner Ltd is renowned for quality British engineering and innovation in the milling industry. With flaking mills operational around the globe, the leading UK engineering firm talks us through their top tips for increasing the longevity and performance of your flaking rolls.
On the 26 October this year, Milling and Grain magazine attended OCRIM’s 6th technical conference “Wheat, Flour and…” at its headquarters located in Cremona, home to violin extraordinaire Antonio Stradivari and arguably one of Northern Italy’s most picturesque historical cities. The annual event was aimed at clients, local residents, and friends in the worlds of industry, academia and politics.
Joordens Zaden in Kessel, The Netherlands is an international specialist in the development and production of seed for green manure crops, forage crops and forage grasses. The seeds comply with the high quality requirements of ISTA and are strictly checked every week by external quality controllers from the Dutch General Inspection Service (NAK).
A leading miller since the company was founded in 1919, over the years Grand Moulins in Paris has been able to diversify its activities and innovate to maximize customer satisfaction.
With over a century of experience in the design, quality and installation of grain storage systems, Bentall Rowlands Storage Systems Limited is a leading UK manufacturer in complete storage and processing equipment for the agricultural and industrial markets.
Many in the milling and grain sector may be unaware that there is a significant new revenue stream available to progressive and forward-thinking mills. It focuses on the use of energy, and how by turning the power down for a relatively short period each year in line with National Grid’s and EirGrid’s requirements, companies can enjoy considerable and long-term financial rewards.
Calysta, the company developing and introducing a new protein source based on single-cell organisms - a bacterium called methylococcus – and destined for inclusion in fishfeeds, has built a ‘market introduction facility’ in Teesside, England, with production beginning in this last quarter of 2016.
Changes in flour quality are and will continue to be a problem for the bakery industry. Large amounts of grain are processed by the milling industry and many resources used to secure the flour produced have a consistent quality.
The Bakery Innovation Center (BIC) at the Bühler headquarters is now five years old. As a center for vocational training and further education for bakers and millers, it is very popular.
When China discovered that they were losing a significant amount of harvested crop through poor storage, it was decided that something at a national level had to be done about it; that’s what is happening there today
As we know, Turkey is a developing country. What we might not know is that it accounts for over 20 percent of world’s flour trade in exports. Now supported by Konya Borsa, a new local market trading board, it is well positioned to accelerate both the means and ease of the county’s business operations for all customers, both domestic and international.
2. GLOBAL
GRAIN & FEED MARKETS
Every issue GFMT’s market analyst John Buckley reviews
world trading conditions which are impacting the full range of
commodities used in food and feed production. His observations
will influence your decision-making.
Grain and feed
markets are also
Supplies less tight than
being restrained
expected?
by ‘macro’ factors
T
HE past two months have been a data from the US Department of Agriculture’s
- the ongoing Euro- roller coaster ride for the grain and monthly US and global grain and oilseed crop
feed raw material markets. In Europe, updates, consumers finally had some better news
zone crisis, joined wheat prices rose sharply as this year’s in November. USDA came out with bigger than
smaller crop continued to disappear too fast for expected US maize and soyabean crop estimates,
now by constant comfort into export channels as Russian and raising rather than lowering its seasonal ending
Ukrainian supplies dwindled and the Arab world stock forecasts for both commodities (soya quite
talk of the US stocked up. Prices also responded to unhelpful substantially). It also made only minor cuts in
harvest weather threatening Australian and world wheat output and – with a significant cut
economy tumbling Argentine crop yields and quality, by dry in its consumption forecast – was actually able
weather plaguing the barely sown US hard red to raise ending stocks for this grain.
off the ‘fiscal winter crop and far too much rain holding up In response, US markets for wheat, maize
planting of next year’s French and UK crops. and soyabeans all fell to multi-month lows
clifff’ in the New Amid the perception of ever tightening world while forward futures months for the latter two
wheat output and stocks, frisky US futures markets continued to display big discounts. All this
Year. Along with markets helped pull European milling wheat was at odds with some bullish views on forward
futures to their highest prices since February last prices from some of the big banks at last month’s
China’s prospects year. With its own set of unusually poor quality Global Grain Conference, especially for maize.
problems, the London feed wheat contract went ‘Stale’ bulls may still argue that the USDA is
for slower growth, one better still and traded its highest prices ever. too optimistic on some of its crop forecasts
Despite being braced for further unwelcome – chiefly those for South American maize and
this continues to
encourage fears of
global economic
recession turning
into depression.
30 | november - december 2012 Grain &feed millinG technoloGy
4. FEATURE
turning into depression. None of this is
encouraging for the food, feed and their
upstream and downstream partners from
the point of view of a healthy trading
environment. But it may at least help
keep costs anchored (not least by keeping
speculators reined in).
So where might the grain and feed
markets go in 2013? Will Chicago maize
be trading in the latter part of the year, as
futures markets suggest, 16% cheaper than
now, in the low $6’s per bu or less, soyabeans
20% lower at $11/bu as US crops revive by
perhaps 100m and 10m tonnes respectively?
Will Latin America grow 30/35m tonnes
soyabeans and, to a lesser extent Australian fully reflect the possibility of more normal more soyabeans than it did this year and will
and Argentine wheat output. US maize weather, high prices and consequent Russia produce 30m tonnes more wheat as
production might also be reduced again expanded sowings bringing major crop its officials recently suggested? Or will the
when producers, in their opinion wood pallets are areas and yeartransporting itself (maize weather again of pallet, theynastyalso considered
USDA does its final acreage count rebounds next for - in the US finished product is enic type spring some are surprises
not food-safe expected to be lower and a no brainer. The plastic pallets we recom- by many record high costs across are
in January (generally in a preparation environment. soyabeans), in Russia and Ukraine leading to new to be the safest, as therethe no
– but Bringing a wood pallet into a bakery could mend barley) and to a lesser extent, board? Nobodyedges or stage knows no risk of
who knows, after the upsets in its (wheat and are manufactured from the highest nails, sharp at this splinters and and
November disaster as wood chip could easily go quality food grade virgin or recycled materi- loose of these crops are seen up and
spell report? There is also little doubt Western and Central Europe (all grains). until some component parts breaking free under
that the ratio of maize stocks – the health, legal and als and comply with EU safety legislations. manual lifting conditions can doubtlessinjury
unnoticed in product to consumption Details of some of these possible scenarios running toward harvest, we and causing
is still economiclow levels that could be immense. discussed in bags,relevant sectionswith an open to more price volatility into first half
at risky consequences could easily are For flour the a plastic pallet below. expect operatives.
The same price explosion if the the finished flow-through top deck will offer the best grip
trigger another goes for transporting past USDA has also helped underline our 2013.
year’s long list of weather in wood pallets can easily but in the last issue that grain where mould, A worthwhile investment
product. Metal nails problems repeats argument has no internal cavities demand
into 2013. themselves loose and burst a bag of flour dust and other contaminants anything so
work
which longer a whole pallet load.
cannot be guaranteed to grow at can collect,
like it can of easily years, or even remain
Main commodity Although hygiene and food safety are
However,could spoilterm bears might It only the pace be recentcleaned by hand or with an key priorities for food processors and
reasonably aclaim for ward futuresbag unsalable. automated system.
takes tiny tear to make a flour don’t stable, when costs constantly rise to record
Using plastic pallets in food preparation
developments since our last
manufacturers, cost will always remain a
Plastic pallets are not only the most hygi- major factor in any purchasing decision.
or near record
levels. That isreview
why the world
this season is
Wheat – exports will cut EU
expec ted to stocks
use over 20m
tonnes each Amid fairly brisk demand from a number
l e s s w h e a t of Middle Eastern and Nor th African
a n d m a i z e countries, EU wheat exporters have been
after decades making the most of reduced competition
o f m o s t l y from the former Soviet ‘Black Sea’ countries
relentless and consequent higher prices on the world
growth. market this autumn. For the season to
G r ain and date, EU export licenses are now running
feed markets significantly ahead of last year’s pace, despite
are also being the current crop turning out 5.5m tonnes
restrained smaller than in 2011 (around 132m tonnes).
b y ‘ m a c r o ’ Even with a predicted 4m tonne drop in
factors - the domestic consumption, EU ending stocks
ongoing Euro- next Jun 30 will be wafer thin at a forecast
zo n e c r i s i s , 9m tonnes compared with 12/19m in recent
j o i n e d n o w years.
by cons t a nt Wheat prices peaked early in November
t a l k of t h e when Ukraine announced it would curb sales
US economy for shipment after November with Russia,
tumbling of f the other cheapest seller, expected to follow
the ‘fiscal clifff ’ soon afterwards. Ukraine’s move hardly
in the New justified the market reaction (which didn’t
Ye a r. A lo ng last long) as the trade knew this supplier
with China’s had already committed all or more than its
prospects for supposed 5/5.5m tonne export surplus. Since
slower growth, then, various officials have tried to put an
this continues acceptable spin on the export halt, aware
to encourage that it is not only at odds with World Trade
fears of global Organisation edicts but has not gone down
economic well with Ukraine’s top customer, Egypt.
recession At risk of having to re-source some of its
Grain &feed millinG technoloGy november - december 2012 | 19
32 | november - december 2012 Grain &feed millinG technoloGy
5. some bullish aspec ts to
this. One is that over 55m
tonnes of these are within
China’s strategic reser ve,
so theoretically ‘off-market’
and unable to inf luence THE GLOBAL LEADER
prices much (some western INVALVES FOR
obser vers also doubt that DRY BULK SOLIDS
China holds any thing like
this much wheat). Another
22m tonnes is held in India,
much of it poorly stored and
of dubious quality. Even so,
what’s left in other supplying
and impor ting countries’
stocks should be enough to
Ukrainian wheat elsewhere, Egypt initially see this market through the season without
took Ukraine off its list of approved suppliers price mayhem.
at one point but re-instated it after a pledged The main uncertainties hanging over the
to honour all contracts – even if that meant wheat market, which could drive prices
paying to find the wheat elsewhere. higher, are the uncertain outcomes for some
CARBON OR STAINLESS
Combined wheat production within the of the big exporters’ 2013 crops. Australia’s
former Soviet bloc is expected to drop from may be under 20m versus the expected
last year’s 115m tonnes to 72.5m. Exports
from the main three suppliers are expected
21m tonnes and is experiencing some quality
problems too from difficult harvest weather. UNIQUE FLOW DESIGN
to fall from 37.6m to 23m. However, the
implications are less severe than in past
year’s of crop shortfall, partly because the
Argentina’s crop is probably over-rated by
1/1.5m mn tonnes and much of its usually
good export quality breadwheat has been
DUST TIGHT
region’s carry-over stocks started out 5m
tonnes higher than last year’s and, even more
downgraded by rain-delayed har vests.
The USA’s hard red winter wheat crop is
CLEAN IN PLACE
importantly, because world wheat import meanwhile suffering from prolonged drought.
trade is also seen down this season by 14m Wheat, of course, is a tough crop with
tonnes. remarkable powers of recuperation. Within
World wheat export competition hasn’t the US itself, drought seems to be a recurring
gone away this season because of the Black theme in recent winters – yet the crop
Sea shortfall, or the accompanying declines usually seems to come through bigger and
of about 4m tonnes each expected in better quality than the pessimists fear. That
Australian and Argentine exports. Australian said, this year is undoubtedly much worse
expor t availability of at least 19m tonnes than normal, official surveys putting crop
will still be huge by historical comparison condition ratings at their lowest level ever.
while extra supplies are seen coming from Given that HRW is the largest component
Canada’s bumper crop (which will allow 2m of the top exporter’s foreign sales, this could
tonnes more expor ts than last year) and emerge as a bullish factor going into 2013.
India (exports up from last year’s 1.7m to On the other hand, the USA’s soft red winter
7m tonnes!) The biggest exporter of all, the crop is doing much better while it could also
USA, is also expected to raise shipments make up for some of the hard winter wheat
by 2.5m to 30.5m tonnes and still finish the losses by sowing more spring wheat.
season with a comfortable 19m tonnes of
stocks – enough to expand foreign sales
Europe is another problem area with
France and the UK both well behind on DUST TIGHT
further still if need be. So far, the US is failing
to meet its own export targets, undercut
their autumn sowings. This could result
in lower than expected planted areas and WEAR COMPENSATING SEALS
by Canada, Australia, Argentina, Europe,
some residual Black Sea sales and India’s
crops. However, Germany’s crop is in better
condition while it’s also possible that the ADJUSTABLE NYLON ROLLERS
emergence as a serious competitor. These
disappointing exports have been a constant
drag on the US futures markets and along
east European countries that helped pull
down this year’s crop after droughts and
heatwaves, could get better weather and
STAINLESS MATERIAL CONTACT
with the looser USDA supply figures and a crops next year.
3.6m tonne reduction in estimates of world At this stage, it remains possible that 2013
feed wheat use, have helped drive Chicago will bring a bigger world wheat crop but
futures prices down to four-month lows in
mid-November, a reversal that eventually
it will be many months before a reliable
picture shapes up. In the meantime, wheat
VORTEXVALVESEUROPE.COM
helped to knock EU wheat prices off their will remain exposed to a tight maize market
peaks too. and the broader need to rebuild depleted +44 (0) 870-770-9861
While an estimated 174m tonnes of wheat feedgrain stocks – a situation that cannot be VORTEX.EU@VORTEXVALVES.COM
carryover stocks for 2012/13 is hardly tight remedied before the next US maize harvest
relative to consumption needs, there are arrives in third quarter 2013.
Grain &feed millinG technoloGy november - december 2012 | 33
6. story is real in terms of human development large quantities. One of the
indicators, the performance has been a cause unique features of this tech- Table 2:
for concern. India is way down in the Human nology is to fortify processed Size Size
Development Index and very high in Global food products with micro- Growth
Category (Million (Million
KEY FACTORS IN THE
Hunger Index. As per National Family Health
Survey, 42.5 percent of children under the
nutrients.
As extrusion process is
Rupee) US$)
(%)
MONTHS AHEAD
age of five are underweight and 69.5 percent a high temperature short
anaemic. Pervasive malnutrition and under- time process, it can retain Packaged Milk 11000 220 7
• Winter weather reported‘Black Sea’the country.
nutrition is for the across (CIS), the micronutrients efficiently.
European and North American crops is seen
Serious calorie and protein deficiency Some of the most promis- Biscuits 6500 130 17
• Updated estimates of areas. The risk that the
especially in rural sown areas for N ing products that can allevi- Edible Oil 6100 122 13
Hemisphere winter wheat towards nutrition
country may rapidly move ate both micronutrient and
Tea 3700 74 8
• What shareiswill wheat take in feed
insecurity real. macronutrient malnutrition
consumption theplace profile ofin thepopulation
Given in age of maize the EU, are, textured protein prod- Savory Snacks * 2100 42 19
the (31 percent below theimport 15, and 53 per-
USA & in Far Eastern age of markets? ucts, lentil analogue, recon-
Confectionery 2100 42 12
• Where will Australian &of 25 representing the
cent below the age Argentine crops stituted rice, snack products
settle volume – andthe implications are serious.
future of India), quality - wise? etc. All these products can Vegetable Oil 1950 39 7
Malnutrition exerts long-term adverse effect be efficiently fortified with
Milk Food Drinks (MI Ds) 1450 29 2
Maize prices restrained
on human health, labour productivity and
general wellbeing. It is recognised that per-
various micronutrients.
Ghee (Clarified Butter) 1300 26 17
Maize prices have been fairly ‘range-bound’resist-
petual under-nutrition results in low A variety of Salt 1300 26 13
duringance last infections andrestrained by the
the to two months, increased morbidity. applications
bearish USDA data and a welter of negative One further advantage of Baby Foods 1100 22 1
Versatile processing
economic news with its possible implications this technology is to reduce 1000 million (Indian Rupee) = 20 million US$
for meat Extrusion technologyand, notof the most
and energy demand is one least, the cooking time of the proc-
by unusually poor foreign demand for US with
versatile food processing techniques essed products. This has an Source – AC Nielsen retail audit, All India (Urban + Rural), MAT Dec
grain.wide range of and many inOne of the most
The USDA applications. the trade economic advantage while 2006
are still expecting some sort of US export
important applications of extrusion technol- using these processed prod-
revival in the New Year, however, as intense
ogy is to produce healthy and nutritious ucts in the feeding programmes. This technol- and nutrition security in India include: micro-
Latin American and other competition starts Also,
alternates /analogues to some staples. ogy can be used to manufacture a number nutrient fortification of basic commodities;
to fade.
extrusion technology can help in utilising low of processed and value added food products manufacturing reconstituted rice; production
Keycost raw materials as well as underutilised
changes to the supply//demand in large volumes. Some of the products and of textured soy proteins in large volumes;
data this month manufacture US crop going
grains to include the these analogues in applications which have relevance to food manufacturing high protein snacks.
u p 50 0 , 0 0 0 4.3m lower than last year’s. Many in the
t o n n e s o n trade contest the USDA’s EU demand
IAOM Correspondence Course highe r y ield figures, including the forecast of just 5.5m
estimates tonnes of maize imports against NAI, Iseason’s
N last NDIA
in Flour Milling HE
1
(+0.3bpa), 7.1m. The popular range is 8-10m with one
C
IAOM’s Correspondence Course in Flour Milling has been helping to educate
GLOBAL MILLING
Russia’s crop leading analyst as high as 11.5m. This would
CONFERENCE
millers for over 60 years. This recently revised edition contains a
comprehensive curriculum beginning with basic milling and grain cleaning. It
up by a similar make the EU second only to Japan (15m) in
then delves into the gradual reduction system, different types of grains, a mount bu t the global import stakes – a development st
storage and packaging, air usage, mechanics, management, and much the EU harvest viewed on the US markets – which tend to
more. 7-
This 8-unit course is for the miller who wants to expand his or her
9F
– as 013
revised down set the world maize price trendebruarya2bullish
knowledge of the industry in a formalized manner. Milling by 1m tonnes factor going forward.
supervisors around the world order this course for their
employees, knowing that exposure to the material will enhance
to just 54.7m However, anchoring that sentiment
overall knowledge and performance. tonnes – somewhat, there has been plenty of
Millers, speak with your supervisors about enrolling in the
course. Supervisors, consider those employees whom you
would like to see grow in the company and encourage
India
11.5m below competition in in the global maize export
last year’s and markets recently, chiefly from Argentina,
them to enroll. The course is also appropriate for enriching
the experience of all seasoned employees in all sections the world’s second largest market
t h e l o w e s t Brazil, Ukraine and, to a lesser extent, India.
level for many Some of these origins have been regularly
of the plant.
years. Along undercutting the US prices by $20/$40 per
Safety, sustainability and food supply in milling
Unit Topics w i t h o t h e r tonne which explains why US sales are doing
Introduction to Milling and Wheat for the 21st Century
Wheat Cleaning minor changes, so badly. In fact the lion’s share of a 2.4m
Wheat Flour Milling that aggregatesmaterials -increase in supply maize trade this
• Raw tonne demand & world trends
Milling other Classes of Wheat, Non-flour Wheat Products, a world maize & food safety going to Brazilian expor ts
Flour and Milled Grain Product Additives
• Food season is seen
c r o p• Milling technology developments be surprising to
o f (+2m tonnes). It would not
Milling Other Grains
Storage, Handling, Packaging and Use of Grain-based 840m • tonnes see formulation down its fairly large stocks
Nutrition & Brazil whittle
Products - 6 8 0 , Environment & sustainability if the demand was
• 0 0 0 further to export more
Plant Management higher• than in security and the price right – so that US sales
Introduction to Mill Mechanics
Food there
OctoberStorage revival could come later than they think.
• but & transportation
Per Unit Units 1-8 still almost 41m Despite weeks of rain-delayed planting,
IAOM Member Price: $250 $1,800
Non-member Price: $325 $2,340 d o w n Find out more at:
f r o m the USDA kept its South American maize
+shipping & handling l a s t y e a r ’s . crop forecasts (harvest first quarter 2013)
Language Formats
All 8 Units are available in English
http://bit.ly/QpgZGW
The EU maize unchanged on the assumption there was
Units 1 and 2 are available in Spanish (Units 3-8 are in translation) consumption still time to get these crops in and achieve
Unit 3: Wheat Flour Milling is available in Arabic
forecast was normal yields. However, not all analysts
For more information or to order online visit:
International Association of Operative Millers also raised by accept USDA’s high crop figures, especially
www.iaom.info 1. 5m tonnes for Argentina,by Assocom
Jointly organised which could be over-rated
10100 W. 87th Street, Suite 306
Overland Park, KS 66212 USA
P: +1-913-338-3377 | F: +1-913-338-3553
and Grain & Feed Milling Technology magazine
bu t r emains by anything from 2m to 6m tonnes, all of
Grain &feed millinG technoloGy november - december 2012 | 23
34 | november - december 2012
GMC_90x132mm.indd 1
Grain &feed millinG technoloGy 16/10/2012 16
7. COMMODITIES
grain next year? This factor will continue
to dominate others influencing grain costs
right through to harvest in 3rd quarter
2013. At this stage it could be under or
over-reflected in weaker forward futures.
• Competition from L atin Amer ica ,
former Soviet countries and India has cut
demand for US maize. So has availability
of Australian & Indian feedwheat. But will
Argentina’s next crop fall shor t of the
record forecasts?
• How much corn will the EU use/import
in 2013 to meet its own feedgrain crop
shortfalls? - probably more than expected
by USDA
• Will US corn ethanol use revive after
dropping in 2012?
which would have to come off exports. Also, KEY FACTORS IN THE • Will China need more or less maize
these crops will likely be harvested later than imports next year and will suppliers like
normal in a year when tighter US supplies MONTHS AHEAD South America and Ukraine benefit more
need this seasonal supply top up on time. • Has the US 2012 maize crop gone from from this demand than the USA?
Overall, then, maize supplies are still fair under to over-rated? • Will global economic recession continue
from comfortable ahead of nine months of • Will farmers there sow a large area again to curb expansion in meat/consumption,
unknown growing weather. So again, this is and will weather favour normal yields – help cap feed grain demand & anchor grain
a market that could go either way. perhaps recovering 100m tonnes more and oilseed costs?
Grain &feed millinG technoloGy november - december 2012 | 35
8. under much better conditions than last year,
laying the foundations for bigger 2013 crops.
Among the top EU producers, rain has held
up and may limit sowings in France and the
UK but Germany is looking more promising
and maybe the East European countries,
who lost yield to drought and heat this year,
will get better weather next year. Largest
exporter Canada’s 2013 crop is larfgely spring
sown so an unknown quantity at this stage
but it would not be surprising to see farmers
there sow a big acreage again at these still
high prices.
World sunflower seed production under-
performed even more than rapeseed this
• Speculators’ enthusiasm to exploit any new record 268m in the full 2012/13 season. year, dropping 5.4m tonnes or 13% to just
maize crop weather problems Supplies could get another top up later in the 34.8m tonnes after disappointing crops in
Proteins/oilmeals - demand to mop up year if the US gets a return to normal yields Europe and the FSU countries.
extra soya? for its summer 2013 crop. Even on unchanged With little change in production of the other
US soyabean and meal prices fell to five- acreage, some analysts think could expand major oilmeals – groundnut, cottonseed etc
month lows in November after the USDA its next crop by as much as 10m tonnes, – it is clear that most of the increase in global
raised its US crop forecast by 3m to 80.9m back to the peak levels of 2009 and 2010, consumption will have to be fed by soya. It
tonnes. That was not only more than assuming weather does normalise. should also be noteds that carryover stocks of
expected but a remarkable shift from the In soya meal equivalent the increase in the alternative oilseeds will be unusually low at
view just two months ago, when USDA was 2012/13 supplies equals about 22m tonnes. the start of next season, especially for sunflowers
expecting the Midwest summer drought – However, USDA expects world crush to and rapeseed, the latter at a nine-year low. So
possibly the worst since the 1930s - to cut increase by only 4.5m, the rest of the extra even if these crops do rebound nextyear, supplies
the crop to just 72m tonnes (some traders beans going to food use and stocks. will probably not be so flush for yet another year.
even less). On paper, this suggests adequate beans Even so, if the optimistic soya crop predictions
The USDA also surprised the markets by to meet an expected increase of about 4m do materialise, that should be enough to hold
making no cuts were to its crop forecasts for tonnes in world soya meal demand spread costs down in the protein sector.
Latin America (harvested first quarter 2013) over China (+3.6m), Europe (+0.6m), Brazil
where Argentine sowing has been held up by
wet weather and parts of of Brazil have been
(+0.4m) offset by a near 2m drop in US
consumption. If the US futures markets
KEY FACTORS IN THE
getting too little rain. Many private trade are right, soya meal should be about 10% MONTHS AHEAD
estimates are lower than the USDA’s but not cheaper this time next year although, if the
all. The crops are still going in as we go to US crop does rebound, the drop will be a • South American crop weather and final
press and the weather could look up in time lot bigger than that. sowing, timing of their harvests
to keep sowing roughly on target. Argentina However, there are some mitigating bullish • The brisk pace of global soya demand
might even so a bit more than expected as factors in the current season’s supply and makes it vital that next year’s production
farmers giver up on corn planting which has price outlook for oilmeals, One is the poor forecasts do pan out
to be completed earlier. However, later than performance of other oilseed crops this year. • Key to demand is top importer China. Is
normal sowing could mean the crops arrive After two years of stagnating production, the soya meal use there slowing somewhat
a bit later than usual. world rapeseed crop is expected to drop as officials suggest are will it continue to
Two months ago, that would have made a by about 1.6m tonnes to a four year low of surprise to the upside?
lot more difference as US supplies looked in 59.3m, after disappointing yields in Europe, • Will EU/CIS rapeseed and sunflowerseed
serious danger of running out long before then the former Soviet Union and especially and Canadian canola crops perform better
end of its Sep/Aug marketing year. Now, with Canada, where the harvest has come in after a disappointing 2013, easing the onus
the larger US supplies, that looks less likely. about 2m tonnes under an earlier expected a bit on soya supplies?
If all goes well, world soyabean output record level. Current pointers suggest the • How much will the US plant in the spring?
should expand by about 28m tonnes to a FSU countries are sowing more winter rape What weather will crops get in 2013?
36 | november - december 2012 Grain &feed millinG technoloGy
9.
10. Milling Technology magazine.
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