Market Commentary: CBOT Pauses and Drifts Lower; NOPA Crush Disappoints; Energies Rally as Inflation Eases
The CBOT started out firm again in the overnight session but quickly turned lower once the day session started. The reason seemed to be “sell the fact” trade after the recent weather market rise in prices with traders seeming to think grain and oilseed supplies may be a bit better t...
Transatlantic Glue
China understandably responded harshly to the Biden Administration’s sharp increase in tariffs on EV’s and components. However, there is not much that Beijing can do about it except retaliate. The EU already shared Washington’s angst about China undermining Western industries...
Brazil Leans into Meat
Over the past decade, Brazilian corn production has grown faster than its output of animal protein, but that may be changing. Brazil’s corn production this year could be down almost 10 percent from a year ago, and USDA’s latest forecast has 2024/25 output down 7.2 percent from 2022/...
Black Sea Regional Analysis
Russian Grain Markets: 6–10 May 2024 This year’s spring weather in Russia is abnormal; last week frost was registered across European Russia ranging from Smolensk all the way to Volga Valley. Some nighttime temperatures were as low as minus 12 degrees Celsius which is catastrophic f...
FOB Prices and Freight Rate App (Updated 15 May)
Ocean Freight Comments - 10 May 2024 By Matt Herrington Dry-bulk freight markets were higher this week as the May-Day holiday period has ended and charters are looking to fill needs. China’s expanded iron ore purchases have supported Capesize vessel markets and the Panamax market is follo...
Interactive Ocean Freight Rates (Updated 15 May)
Ocean Freight Comments - 10 May 2024 By Matt Herrington Dry-bulk freight markets were higher this week as the May-Day holiday period has ended and charters are looking to fill needs. China’s expanded iron ore purchases have supported Capesize vessel markets and the Panamax market is follo...
Market Commentary: Soyoil Sinks as Cooking Oil Escapes Tariffs; Grains Fall on Crop Progress
The CBOT pushed higher overnight with corn notching a new four-month high and wheat futures extending their rally, but that strength quickly faded during the day session. One of the biggest drivers for the day’s declines was the failure of used cooking oil to be included in the Biden Admi...
Tariffs: UCO No, Phosphate Yes
The Biden Administration just announced higher Section 301 tariffs on a host of imports from China, after the statutory four-year review of those duties imposed by the Trump Administration. The new tariffs did not include the rumored increase for used cooking oil (UCO) that roiled soybean futur...
Tariff Man’s Competitor; Europe Correctly Fears Trump
Tariff Man’s Competitor Former President Donald Trump prided himself on his use of tariffs, which candidate Biden criticized but now President Biden fully embraces. In fact, he is proclaiming his own new tariffs on $18 billion worth of Chinese goods and calling them “historic.&rdquo...
Atmanirbhar Bharat Abhiyan
U.S. agriculture representatives returning from a trade mission to India are all excited about their prospects for boosting sales to the world’s most populous country. They are likely suffering from what the great psychologist and behavioral economist Daniel Kahneman called focusing illus...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Saudi Arabia’s Modern Mills Company is now trading its shares on the Saudi Exchange. Thirty percent of its shares were offered to public, retail, and institutional investors and the IPO was vastly oversubscr...
Market Commentary: Wheat Still Leads CBOT Rally; Frost/Freeze Threatens Russian Wheat Crop
In what has become a common refrain this year, wheat futures were again the upside leader in Monday’s CBOT trade as markets are increasingly concerned about Northern Hemisphere weather. Monday’s trade was seemingly primarily focused on the dryness and recent frost/freeze events in c...
WPI Crop Progress and Conditions App (Updated 13 May)
Update for 1 April 2024: Last year, users pointed out differences between the 5-year averages reported in this app and what USDA estimates in its weekly report. The difference exists because WPI calculates average based on the last 5 years of observations for the current week. In cases where ob...
More Details, More Conflicts on Farm Bill
The slow roll of the details of the farm bill continues. On Friday, House Agriculture Committee Chairman Glenn Thompson (R-Pennsylvania) released a title-by-title review of the House farm bill draft. This comes after both the House and Senate agriculture committees released broad outlines of th...
Psychobiotic Nonsense; SPS/TBT and Poultry
Psychobiotic Nonsense One component of a book called The Psychobiotic Revolution is scientifically reasonable – that the human gut biome contains trillions of beneficial microbes. And that disturbing that biome can have adverse effects on physical and mental health. One more reasonable th...
Milking Future Demand
U.S. and Mexican dairy industry representatives met and renewed their commitment to “collaborate and advocate for mutually beneficial dairy policies. This was a policy initiative begun back in 2016. At first glance, the effort seems surprising given that Mexico exports more than three tim...
European Market Analysis
Regional News Frosts in Russia’s central, southern, and Volga regions have halted spring planting efforts, which will likely contribute to lower yield potential this year. Russia has completed spring seeding on 16.9 Mha, or 30.2 percent of the planned area, so far. Some of these are...
Mercosur Regional Analysis
Wheat Brazil’s state of Rio Grande do Sul is experiencing the worst climatic catastrophe in the last 80 years, with intense rains causing major floods. There are many dead, injured, and evacuated individuals. Rio Grande do Sul represents approximately 50 percent of the country's wheat pro...
Market Commentary: Wheat Leads WASDE-Defying CBOT Rally
The CBOT was higher heading into Friday’s May WASDE report from the USDA with weather and production concerns in various parts of the globe driving futures into the green. The WASDE didn’t really support an outlook for higher trade/prices, but the CBOT rallied anyway after the repor...
CFTC COT Report Analysis
The surprise in this week’s CFTC report is that – through Tuesday’s data reporting deadline - funds were more aggressive covering grain/oilseed shorts than expected. The headline number is that funds bought back over 111,000 contracts and are now only short about 30,000 contra...
Oilseed Highlights: Not Much Ado About Something
The Market After hitting a new contract low yesterday, the trade took July soyoil up nearly 2 cents today and closed out the week with a 3.1 percent rise to 44.44 cents/pound. July soybeans added 4 cents or 0.32 percent for the week, and July soymeal lost 0.08 percent to close out the week at 3...
Tax Debate Coming in 2025 Despite Election Outcome
The 2024 election is now less than six months away. Most of the attention is being paid to various “horse race” issues such as polling, fundraising, endorsements, etc. Of course, the underlying interest is based on what the policy agenda will be starting in 2025, which as of this po...
Market Commentary: Weather and Old versus New Crop
The trade continued to position ahead of tomorrow’s May USDA WASDE report. Some took profits as they backed out of positions but, overall, there was lower volume. The exception being soyoil where a new July contract low was printed. Adverse South American crop weather supports old crop v...
Livestock Roundup: Strong Performance for Broilers in Q1
2024 is starting off to be a stronger year for broilers, and gaining momentum as the year progresses. Production through Q1 is 99 percent of last year in pounds (15.130 billion) and head slaughtered (2.323 million). But with softening feed prices and increased parts prices, margins are positive...
Grossly Modified Opinion; BRICS Grain Exchange
Grossly Modified Opinion While the European Parliament’s plan for regulating New Genomic Traits (NGT’s) provides a lighter regulatory treatment for NTG-1 products, its associated labeling requirements will be exploited by the anti-GMO crowd. U.S. regulatory agencies are planning to...
Market Commentary: Grains, Oilseeds Contract on More Pre-WASDE Positioning
Grain futures continue to retreat from their recent rally highs with traders unwilling to overextend risks heading into Friday’s WASDE report. The WASDE should be supportive old crop futures from cuts to the Brazilian and Argentine crops, but new crop futures could see pressure from expec...
Flimsy Arguments; Bien SUR Pesticides
Flimsy Arguments Certain Americans are taking sides with Hamas in Gaza, arguing that it is Israel to blame. In a similar fashion, progressive groups focused on agriculture are calling on Washington to cease its bullying of Mexico on GMO corn. They defend Mexico City for pursuing “food sov...
Meeting with the Cotton Hopeful
Although many small developing countries produce cotton, about five countries produce most of the fiber. China and India alone account for nearly half the global output of cotton. Four small African countries (Benin, Burkina Faso, Chad, and Mali) formed the Cotton-4 or C-4 consortium many years...
Black Sea Regional Analysis
Russian Grain Markets: 29 April–3 May 2024 Last week Russia celebrated International Labor Day, and on May 9 will celebrate WWII Victory Day, resulting in a long 10-day holiday for many Russian families, including grain traders. This traditionally slows down trade, however, logistics cont...
Market Commentary: Traders Pause CBOT Rally While Eyeing WASDE
The grain market fundamentals didn’t change much from Monday to Tuesday, but traders largely suspended their short-covering or long-positioning efforts as they looked ahead to the May WASDE. The report will be issued this Friday and will include USDA’s first projections for MY 2024/...
Beef Supply Overview
The March data for beef exports at 256.108 million pounds showed a drop in volume of 10.4 percent from March 2023, but posted the highest volume of Q1. Export value was down 0.3 percent, or effectively flat, from 2023, but was the highest in nine months. For Q1 2024, volume was 311,865 MT, down...
Remake Agriculture for the Climate; Counter-Notifying India; Plurilateral Path
Remake Agriculture for the Climate The World Bank has issued a report on achieving net zero emissions in the agrifood system (Recipe for a Livable Planet) that cites the sector for being a big emitter, but also one that can achieve reductions at a relatively low-cost. It makes the usual recomme...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Egypt has received 1,000,000 MT of local wheat since the harvest began on 13 April. The government’s target is to receive 3.5 MMT from the 2024 harvest. Egypt may become a market for South African maize expo...
Market Commentary: Bulls Are Running Again
Bulls remain firmly in charge of CBOT ag trade with weather concerns seemingly around the world prompting short covering and fresh long buying. Wheat and soybeans were the upside leaders at the CBOT once again as these two commodities hold the most bullish weather implications. Corn was largely...
Having Cake and Eat it Too; Philippine Opportunity
Having Cake and Eat it Too The U.S. is a major food exporter and its sales to India are relatively small and steady due to the border measures it encounters. By contrast, India demands the right to high border measures due to it being a poor country with food insecurity, despite the fact it exp...
Geographic Food Price Differences
Eastern European countries were upset a few years ago when it was discovered that food marketers were retailing lower quality foods in their region of Europe versus countries in the west. Price was not discussed but that differentiation would have followed willingness to pay and the fact that m...
House-Senate Ag Leader Talks on Farm Bill This Week; SNAP Will be an Issue
Both the House and Senate Agriculture Committees have released broad outlines that will underpin the two panels’ drafts of the farm bill. Reports from Capitol Hill are that the two committee chairs, Senator Debbie Stabenow (D-Michigan) and Representative Glenn Thompson (R-Pennsylvania) wi...
European Market Analysis
Regional News Algeria purchased 200 KMT of hard wheat – rumored to originate in France – at $249-250/MT C&F. Turkey issued an international tender for the sale of 100 KMT of durum wheat to be exported – not imported – from the country. The winning bid cam...
Mercosur Regional Analysis
Corn Currently, Argentine farmers have harvested 22 percent of the corn area, with a weekly progress of only 2.3 percent. While soybean harvesting takes precedence and progresses much faster, farmers are only now able to enter some fields after the rains of the past few weeks. The Buenos Aires...
Market Commentary: CBOT Gains Continue on Weather Market, Risk-On Mentality
The CBOT followed the higher trend it established earlier this week with still more bullish news emerging to close the week. First off, the weather remains challenging for the U.S., South America, and Europe and, secondly, Russia’s 2024 wheat crop and exports saw another downward revision...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
Oilseed Highlights: South America/SAF Driving Developments
The Market For the week, the July soybean contract added 37.75 cents (3.2 percent) in value. November soybeans closed out Friday’s trading at $12.01/bushel, the highest close in over a month above the 100-day moving average for the first time this year. July soymeal moved $27.5 (7.9 perce...
Circling the Corral; Un-deglobalizing
Circling the Corral Florida now bans the marketing of cultivated meat. Florida Governor Ron DeSantis said lab-grown meat was a threat to the state’s beef cattle industry, the ninth largest in the country. The National Cattlemen’s Beef Association has limited its demands to just have...
Anti-Meat Slow Roll
As the implications of California’s Proposition 12 and Massachusetts’ Question 3 play out in the marketplace, yet another animal welfare ballot initiative will be put to voters in Denver this November. It reads, Should the voters of the City and County of Denver adopt an ordin...
Market Commentary: Mostly Higher on Weather
After days of flat to faltering closes, corn and soybeans have now rebounded the past two days, and today wheat joined the rally. In two days, July corn has gained 13 cents and July soybeans are up 36 cents. USDA’s Export Sales report showed old crop washouts and lower actual expor...
Livestock Roundup: Ground Beef Clear of HPAI
Live cattle and feeder cattle futures rallied today after feeling the pressure of news and speculation about HPAI. As WPI reported previously, USDA announced on Tuesday it would be testing ground beef in states where dairy cattle herds had tested positive for the H5N1 strain of bird flu. The sa...
Market Commentary: CBOT Remains Choppy, Volatile as Weather Drives Markets
The CBOT saw another day of mixed trade with livestock futures pushing sharply lower as demand fears resurface while wheat futures drew back for a third straight day amid more forecasts of showers for previously dry production regions. The soy complex recovered a bit from Tuesday’s sellof...
Food is First Victim; Energy Confusion
Food is First Victim Food comprises just 6 percent of all U.S. exports, but it is the first to receive retaliation in trade disputes. The latest example is Israel’s war with Hamas, though it is American food brands that are taking it on the chin. KFC has had to close 100 outlets in Malays...
Egyptian Food Inflation
Bread is a critical basic food in Egypt and Russia has been a prime supplier. But Russian wheat prices have been rising, and now two shiploads of the commodity are delayed departing for Egypt. President Abdel Fattah al-Sisi has a tight grip over the military and the government, but war on the b...
Black Sea Regional Analysis
Russian Grain Markets: 22–26 April 2024 Russian analysts are beginning to worry that this season’s grain production in Russia may drop from almost 145 MMT in 2023 to 135 MMT because of the drought in Southern Federal District – the wheat belt of Russia. Russian Ministry of Agr...
Market Commentary: Biodiesel Report Sinks Soyoil, Soy Complex; Wheat Falls on Forecast Rains
First notice day for May futures yielded heavy deliveries against the soyoil contract and, to a lesser extent, soybeans and soymeal. CBOT wheat also saw deliveries, but the grain markets survived the event relatively unscathed. Most of the day’s action was in the soy complex as weaker-tha...
Updated GREET Model and Treasury Guidance Released
The Treasury Department released its guidance on an updated Greenhouse Gases, Regulated Emissions and Energy Use in Transportation (GREET) model for sustainable aviation fuel (SAF) today. SAF would be eligible for a tax credit known as 40B for the section of the Inflation Reduction Act that cre...
Policy Shorts
Fertilizer Supplies: The U.S. Department of Commerce is recommending reduced tariffs on fertilizer imported from Russia, but increased duties on supplies from Morocco. U.S. farmers have been asking for relaxing supply constraints from Russia. The U.S. imports about 20 percent of its fertilizer...
Olive Oil Gets Tighter
Olive oil is a niche product, comprising just under one percent of total global vegetable oil production. It is also higher priced, and only becoming more so as production drops. Europe produces around 62 percent of global olive oil and supplies half the world trade. Production is primarily in...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Egypt reports it has received 900,000 MT of local wheat since the harvest began on 13 April. The government’s target is to receive 3.5 MMT from the 2024 harvest. Egypt’s Suez Canal Economic Zone has re...
Market Commentary: Wheat Pulls Back from Weather Rally; Soymeal Leads Soy Complex
The CBOT saw mixed trade to start the week with wheat futures (except the MGEX market) pulling back amid profit taking and a general feeling of a correction after their recent rally. The soy complex, on the other hand, saw a strong rally in soymeal as the plight of the Argentine crop is bolster...
Carbon Wars; Teeing up Taiwan
Carbon Wars The EU is moving forward with its plans for a Carbon Border Adjustment Mechanism (CBAM), and with its EU Deforestation Regulation. Despite claims to handling domestic and imported products equally as required under the WTO’s national treatment obligation, there will be plenty...
Farm Bill Behind the Scenes Negotiations
On 15 April WPI reported: House Agriculture Committee Chairman Glenn Thompson (R-Pennsylvania) has stated that he will move a farm bill draft out of committee in May; the Ranking Minority Member, David Scott (D-Georgia) has indicated that he’ll work with Thompson to have a bipartisan time...
Eat less, Toot Less
Plants such as beans, lentils and chickpeas are the nutritional rage. They are plant derived foods with higher protein content and thus their production and consumption should be on the rise. But alas, the USDA data is not comporting with that nutritional advice. Over the past four years,...
Mercosur Regional Analysis
Corn Argentina’s corn harvest only advanced by 2 percentage points last week as the rains show no mercy, making it difficult for farmers to enter the fields. Moreover, the focus of those who can enter fields remains on soybeans, which are typically harvested as soon as possible and take p...
European Market Analysis
Regional News ProZerno forecasts Russia’s 2024 total grain production will hit 135-136 MMT, down from 144.9 MMT in 2023. Wheat production is forecast to fall from 92.8 to 88 MMT this year, with barley production down from 21.1 to 18 MMT. Russia’s corn production should fall fr...
Market Commentary: Weather Worries Nearing a Ceiling
Large supplies and a strong dollar took their toll this week on corn and soybeans, but they still managed to outperform. Weather worries pushed wheat higher for a seventh straight session, and pork finally took a fall. There was high volume trading in corn today but without any strong fee...
Oilseed Highlights: Up, Despite Grey Clouds
The Market Brazil has been winning the soybean export war, and imported biodiesel feedstock threatens domestic crush margins, but Chicago trading this week appeared to shake off such concerns. July soybeans traded lower for the past three trading sessions but larger gains achieved at the beginn...
Q1 GDP Comes in Low, Interest Rate Expected to Stay High
The Q1 2024 GDP was 1.6 percent, well below the pre-report consensus expectation of 2.4 percent, and down from 3.1 percent in Q1 2023 and 3.4 percent in Q4 2023. That rate was the slowest in almost two years, dating back to Q2 2022. Recall that in the 2 February Ag Perspectives report on...
U.S. Consumer Spending, Financial Health Supports 2024 Economic Outlook
As WPI readers likely well know by now, U.S. gross domestic product (GDP) grew at an inflation- and seasonally-adjusted 1.6 percent rate in Q1 2024, which missed economist’s 2.4 percent expectations. The data sent shockwaves through U.S. financial markets with U.S. stocks and bonds openin...
Market Commentary: Wheat Extends Weather Rally; Corn, Soybeans Steady While Eyeing Weather
Wheat remains the star of the ag commodity space this week with the rally continuing on challenging weather prospects for the U.S. HRW region, Europe, and the Black Sea. Until a few weeks ago, there were few doubts about the 2024 crop being able to supply the expected demand, but now reduced yi...
Most Apparent Solution; Future is Biotech
Most Apparent Solution The EU’s organic sector wants the bloc’s officials to take more action to ensure they achieve the target of 25 percent of agricultural output being organic by 2030. Specifically, they want a campaign to increase consumer demand for organic food so that organic...
Livestock Roundup: HPAI Developments
Yesterday, the Animal and Plant Health Inspection Service (APHIS) issued a federal order requiring testing and reporting of highly pathogenic avian influenza (HPAI) for the interstate movement of lactating dairy cattle. Specific guidance will be issued at some point today, and the order will go...
Market Commentary: Some Reversals, Some Not
Corn, soybeans and soyoil all closed lower after trading up the previous three sessions. July soymeal made it a fourth trading session higher, and wheat remains on a tear with a fifth trading session closing higher. The mood around wheat sees supply concerns developing in North America and in t...
Forecast Cow-Calf Profits Near Record, Robust Heifer Retention Expected
Cow-calf producer margins are discussed less frequently in these pages than their downstream counterparts of feedlot and beef packer margins, but this doesn’t mean they are less important to understanding the beef industry’s current state and outlook. Additionally, discussion of thi...
Reigniting a Transatlantic Deal; Indian Powerhouse; “Barons” is Bombastic
Reigniting a Transatlantic Deal Former Italian prime minister Enrico Letta is something of a policy rock star after authoring a report on the future strategy for the EU. Most of the 146-page report focuses on strengthening the EU’s internal Single Market but, buried at the end of th...
Black Sea Regional Analysis
Russian Grain Markets: 15–19 April 2024 International sanctions and reverse measures Russia adopted towards “unfriendly” countries may leave Russia without proper genetics for this spring’s planting campaign. While small grains are available due to long term domestic see...
Market Commentary: CBOT Pauses and Drifts Lower; NOPA Crush Disappoints; Energies Rally as Inflation Eases
The CBOT started out firm again in the overnight session but quickly turned lower once the day session started. The reason seemed to be “sell the fact” trade after the recent weather market rise in prices with traders seeming to think grain and oilseed supplies may be a bit better t...
Transatlantic Glue
China understandably responded harshly to the Biden Administration’s sharp increase in tariffs on EV’s and components. However, there is not much that Beijing can do about it except retaliate. The EU already shared Washington’s angst about China undermining Western industries...
Brazil Leans into Meat
Over the past decade, Brazilian corn production has grown faster than its output of animal protein, but that may be changing. Brazil’s corn production this year could be down almost 10 percent from a year ago, and USDA’s latest forecast has 2024/25 output down 7.2 percent from 2022/...
Black Sea Regional Analysis
Russian Grain Markets: 6–10 May 2024 This year’s spring weather in Russia is abnormal; last week frost was registered across European Russia ranging from Smolensk all the way to Volga Valley. Some nighttime temperatures were as low as minus 12 degrees Celsius which is catastrophic f...
FOB Prices and Freight Rate App (Updated 15 May)
Ocean Freight Comments - 10 May 2024 By Matt Herrington Dry-bulk freight markets were higher this week as the May-Day holiday period has ended and charters are looking to fill needs. China’s expanded iron ore purchases have supported Capesize vessel markets and the Panamax market is follo...
Interactive Ocean Freight Rates (Updated 15 May)
Ocean Freight Comments - 10 May 2024 By Matt Herrington Dry-bulk freight markets were higher this week as the May-Day holiday period has ended and charters are looking to fill needs. China’s expanded iron ore purchases have supported Capesize vessel markets and the Panamax market is follo...
Market Commentary: Soyoil Sinks as Cooking Oil Escapes Tariffs; Grains Fall on Crop Progress
The CBOT pushed higher overnight with corn notching a new four-month high and wheat futures extending their rally, but that strength quickly faded during the day session. One of the biggest drivers for the day’s declines was the failure of used cooking oil to be included in the Biden Admi...
Tariffs: UCO No, Phosphate Yes
The Biden Administration just announced higher Section 301 tariffs on a host of imports from China, after the statutory four-year review of those duties imposed by the Trump Administration. The new tariffs did not include the rumored increase for used cooking oil (UCO) that roiled soybean futur...
Tariff Man’s Competitor; Europe Correctly Fears Trump
Tariff Man’s Competitor Former President Donald Trump prided himself on his use of tariffs, which candidate Biden criticized but now President Biden fully embraces. In fact, he is proclaiming his own new tariffs on $18 billion worth of Chinese goods and calling them “historic.&rdquo...
Atmanirbhar Bharat Abhiyan
U.S. agriculture representatives returning from a trade mission to India are all excited about their prospects for boosting sales to the world’s most populous country. They are likely suffering from what the great psychologist and behavioral economist Daniel Kahneman called focusing illus...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Saudi Arabia’s Modern Mills Company is now trading its shares on the Saudi Exchange. Thirty percent of its shares were offered to public, retail, and institutional investors and the IPO was vastly oversubscr...
Market Commentary: Wheat Still Leads CBOT Rally; Frost/Freeze Threatens Russian Wheat Crop
In what has become a common refrain this year, wheat futures were again the upside leader in Monday’s CBOT trade as markets are increasingly concerned about Northern Hemisphere weather. Monday’s trade was seemingly primarily focused on the dryness and recent frost/freeze events in c...
WPI Crop Progress and Conditions App (Updated 13 May)
Update for 1 April 2024: Last year, users pointed out differences between the 5-year averages reported in this app and what USDA estimates in its weekly report. The difference exists because WPI calculates average based on the last 5 years of observations for the current week. In cases where ob...
More Details, More Conflicts on Farm Bill
The slow roll of the details of the farm bill continues. On Friday, House Agriculture Committee Chairman Glenn Thompson (R-Pennsylvania) released a title-by-title review of the House farm bill draft. This comes after both the House and Senate agriculture committees released broad outlines of th...
Psychobiotic Nonsense; SPS/TBT and Poultry
Psychobiotic Nonsense One component of a book called The Psychobiotic Revolution is scientifically reasonable – that the human gut biome contains trillions of beneficial microbes. And that disturbing that biome can have adverse effects on physical and mental health. One more reasonable th...
Milking Future Demand
U.S. and Mexican dairy industry representatives met and renewed their commitment to “collaborate and advocate for mutually beneficial dairy policies. This was a policy initiative begun back in 2016. At first glance, the effort seems surprising given that Mexico exports more than three tim...
European Market Analysis
Regional News Frosts in Russia’s central, southern, and Volga regions have halted spring planting efforts, which will likely contribute to lower yield potential this year. Russia has completed spring seeding on 16.9 Mha, or 30.2 percent of the planned area, so far. Some of these are...
Mercosur Regional Analysis
Wheat Brazil’s state of Rio Grande do Sul is experiencing the worst climatic catastrophe in the last 80 years, with intense rains causing major floods. There are many dead, injured, and evacuated individuals. Rio Grande do Sul represents approximately 50 percent of the country's wheat pro...
Market Commentary: Wheat Leads WASDE-Defying CBOT Rally
The CBOT was higher heading into Friday’s May WASDE report from the USDA with weather and production concerns in various parts of the globe driving futures into the green. The WASDE didn’t really support an outlook for higher trade/prices, but the CBOT rallied anyway after the repor...
CFTC COT Report Analysis
The surprise in this week’s CFTC report is that – through Tuesday’s data reporting deadline - funds were more aggressive covering grain/oilseed shorts than expected. The headline number is that funds bought back over 111,000 contracts and are now only short about 30,000 contra...
Oilseed Highlights: Not Much Ado About Something
The Market After hitting a new contract low yesterday, the trade took July soyoil up nearly 2 cents today and closed out the week with a 3.1 percent rise to 44.44 cents/pound. July soybeans added 4 cents or 0.32 percent for the week, and July soymeal lost 0.08 percent to close out the week at 3...
Tax Debate Coming in 2025 Despite Election Outcome
The 2024 election is now less than six months away. Most of the attention is being paid to various “horse race” issues such as polling, fundraising, endorsements, etc. Of course, the underlying interest is based on what the policy agenda will be starting in 2025, which as of this po...
Market Commentary: Weather and Old versus New Crop
The trade continued to position ahead of tomorrow’s May USDA WASDE report. Some took profits as they backed out of positions but, overall, there was lower volume. The exception being soyoil where a new July contract low was printed. Adverse South American crop weather supports old crop v...
Livestock Roundup: Strong Performance for Broilers in Q1
2024 is starting off to be a stronger year for broilers, and gaining momentum as the year progresses. Production through Q1 is 99 percent of last year in pounds (15.130 billion) and head slaughtered (2.323 million). But with softening feed prices and increased parts prices, margins are positive...
Grossly Modified Opinion; BRICS Grain Exchange
Grossly Modified Opinion While the European Parliament’s plan for regulating New Genomic Traits (NGT’s) provides a lighter regulatory treatment for NTG-1 products, its associated labeling requirements will be exploited by the anti-GMO crowd. U.S. regulatory agencies are planning to...
Market Commentary: Grains, Oilseeds Contract on More Pre-WASDE Positioning
Grain futures continue to retreat from their recent rally highs with traders unwilling to overextend risks heading into Friday’s WASDE report. The WASDE should be supportive old crop futures from cuts to the Brazilian and Argentine crops, but new crop futures could see pressure from expec...
Flimsy Arguments; Bien SUR Pesticides
Flimsy Arguments Certain Americans are taking sides with Hamas in Gaza, arguing that it is Israel to blame. In a similar fashion, progressive groups focused on agriculture are calling on Washington to cease its bullying of Mexico on GMO corn. They defend Mexico City for pursuing “food sov...
Meeting with the Cotton Hopeful
Although many small developing countries produce cotton, about five countries produce most of the fiber. China and India alone account for nearly half the global output of cotton. Four small African countries (Benin, Burkina Faso, Chad, and Mali) formed the Cotton-4 or C-4 consortium many years...
Black Sea Regional Analysis
Russian Grain Markets: 29 April–3 May 2024 Last week Russia celebrated International Labor Day, and on May 9 will celebrate WWII Victory Day, resulting in a long 10-day holiday for many Russian families, including grain traders. This traditionally slows down trade, however, logistics cont...
Market Commentary: Traders Pause CBOT Rally While Eyeing WASDE
The grain market fundamentals didn’t change much from Monday to Tuesday, but traders largely suspended their short-covering or long-positioning efforts as they looked ahead to the May WASDE. The report will be issued this Friday and will include USDA’s first projections for MY 2024/...
Beef Supply Overview
The March data for beef exports at 256.108 million pounds showed a drop in volume of 10.4 percent from March 2023, but posted the highest volume of Q1. Export value was down 0.3 percent, or effectively flat, from 2023, but was the highest in nine months. For Q1 2024, volume was 311,865 MT, down...
Remake Agriculture for the Climate; Counter-Notifying India; Plurilateral Path
Remake Agriculture for the Climate The World Bank has issued a report on achieving net zero emissions in the agrifood system (Recipe for a Livable Planet) that cites the sector for being a big emitter, but also one that can achieve reductions at a relatively low-cost. It makes the usual recomme...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Egypt has received 1,000,000 MT of local wheat since the harvest began on 13 April. The government’s target is to receive 3.5 MMT from the 2024 harvest. Egypt may become a market for South African maize expo...
Market Commentary: Bulls Are Running Again
Bulls remain firmly in charge of CBOT ag trade with weather concerns seemingly around the world prompting short covering and fresh long buying. Wheat and soybeans were the upside leaders at the CBOT once again as these two commodities hold the most bullish weather implications. Corn was largely...
Having Cake and Eat it Too; Philippine Opportunity
Having Cake and Eat it Too The U.S. is a major food exporter and its sales to India are relatively small and steady due to the border measures it encounters. By contrast, India demands the right to high border measures due to it being a poor country with food insecurity, despite the fact it exp...
Geographic Food Price Differences
Eastern European countries were upset a few years ago when it was discovered that food marketers were retailing lower quality foods in their region of Europe versus countries in the west. Price was not discussed but that differentiation would have followed willingness to pay and the fact that m...
House-Senate Ag Leader Talks on Farm Bill This Week; SNAP Will be an Issue
Both the House and Senate Agriculture Committees have released broad outlines that will underpin the two panels’ drafts of the farm bill. Reports from Capitol Hill are that the two committee chairs, Senator Debbie Stabenow (D-Michigan) and Representative Glenn Thompson (R-Pennsylvania) wi...
European Market Analysis
Regional News Algeria purchased 200 KMT of hard wheat – rumored to originate in France – at $249-250/MT C&F. Turkey issued an international tender for the sale of 100 KMT of durum wheat to be exported – not imported – from the country. The winning bid cam...
Mercosur Regional Analysis
Corn Currently, Argentine farmers have harvested 22 percent of the corn area, with a weekly progress of only 2.3 percent. While soybean harvesting takes precedence and progresses much faster, farmers are only now able to enter some fields after the rains of the past few weeks. The Buenos Aires...
Market Commentary: CBOT Gains Continue on Weather Market, Risk-On Mentality
The CBOT followed the higher trend it established earlier this week with still more bullish news emerging to close the week. First off, the weather remains challenging for the U.S., South America, and Europe and, secondly, Russia’s 2024 wheat crop and exports saw another downward revision...
CFTC COT Report Analysis
The attached PDF offers graphical depiction and seasonal analysis of managed money and commercial traders' net position in key agricultural commodity markets. The data is, of course, taken from the CFTC's weekly Commitment of Traders report, using the futures only data. WPI recently completed a...
Oilseed Highlights: South America/SAF Driving Developments
The Market For the week, the July soybean contract added 37.75 cents (3.2 percent) in value. November soybeans closed out Friday’s trading at $12.01/bushel, the highest close in over a month above the 100-day moving average for the first time this year. July soymeal moved $27.5 (7.9 perce...
Circling the Corral; Un-deglobalizing
Circling the Corral Florida now bans the marketing of cultivated meat. Florida Governor Ron DeSantis said lab-grown meat was a threat to the state’s beef cattle industry, the ninth largest in the country. The National Cattlemen’s Beef Association has limited its demands to just have...
Anti-Meat Slow Roll
As the implications of California’s Proposition 12 and Massachusetts’ Question 3 play out in the marketplace, yet another animal welfare ballot initiative will be put to voters in Denver this November. It reads, Should the voters of the City and County of Denver adopt an ordin...
Market Commentary: Mostly Higher on Weather
After days of flat to faltering closes, corn and soybeans have now rebounded the past two days, and today wheat joined the rally. In two days, July corn has gained 13 cents and July soybeans are up 36 cents. USDA’s Export Sales report showed old crop washouts and lower actual expor...
Livestock Roundup: Ground Beef Clear of HPAI
Live cattle and feeder cattle futures rallied today after feeling the pressure of news and speculation about HPAI. As WPI reported previously, USDA announced on Tuesday it would be testing ground beef in states where dairy cattle herds had tested positive for the H5N1 strain of bird flu. The sa...
Market Commentary: CBOT Remains Choppy, Volatile as Weather Drives Markets
The CBOT saw another day of mixed trade with livestock futures pushing sharply lower as demand fears resurface while wheat futures drew back for a third straight day amid more forecasts of showers for previously dry production regions. The soy complex recovered a bit from Tuesday’s sellof...
Food is First Victim; Energy Confusion
Food is First Victim Food comprises just 6 percent of all U.S. exports, but it is the first to receive retaliation in trade disputes. The latest example is Israel’s war with Hamas, though it is American food brands that are taking it on the chin. KFC has had to close 100 outlets in Malays...
Egyptian Food Inflation
Bread is a critical basic food in Egypt and Russia has been a prime supplier. But Russian wheat prices have been rising, and now two shiploads of the commodity are delayed departing for Egypt. President Abdel Fattah al-Sisi has a tight grip over the military and the government, but war on the b...
Black Sea Regional Analysis
Russian Grain Markets: 22–26 April 2024 Russian analysts are beginning to worry that this season’s grain production in Russia may drop from almost 145 MMT in 2023 to 135 MMT because of the drought in Southern Federal District – the wheat belt of Russia. Russian Ministry of Agr...
Market Commentary: Biodiesel Report Sinks Soyoil, Soy Complex; Wheat Falls on Forecast Rains
First notice day for May futures yielded heavy deliveries against the soyoil contract and, to a lesser extent, soybeans and soymeal. CBOT wheat also saw deliveries, but the grain markets survived the event relatively unscathed. Most of the day’s action was in the soy complex as weaker-tha...
Updated GREET Model and Treasury Guidance Released
The Treasury Department released its guidance on an updated Greenhouse Gases, Regulated Emissions and Energy Use in Transportation (GREET) model for sustainable aviation fuel (SAF) today. SAF would be eligible for a tax credit known as 40B for the section of the Inflation Reduction Act that cre...
Policy Shorts
Fertilizer Supplies: The U.S. Department of Commerce is recommending reduced tariffs on fertilizer imported from Russia, but increased duties on supplies from Morocco. U.S. farmers have been asking for relaxing supply constraints from Russia. The U.S. imports about 20 percent of its fertilizer...
Olive Oil Gets Tighter
Olive oil is a niche product, comprising just under one percent of total global vegetable oil production. It is also higher priced, and only becoming more so as production drops. Europe produces around 62 percent of global olive oil and supplies half the world trade. Production is primarily in...
Middle East, Mediterranean and Africa Regional Analysis
Regional Updates MEDITERRANEAN/MIDDLE EAST/NORTH AFRICA/AFRICA – MEA REGION Egypt reports it has received 900,000 MT of local wheat since the harvest began on 13 April. The government’s target is to receive 3.5 MMT from the 2024 harvest. Egypt’s Suez Canal Economic Zone has re...
Market Commentary: Wheat Pulls Back from Weather Rally; Soymeal Leads Soy Complex
The CBOT saw mixed trade to start the week with wheat futures (except the MGEX market) pulling back amid profit taking and a general feeling of a correction after their recent rally. The soy complex, on the other hand, saw a strong rally in soymeal as the plight of the Argentine crop is bolster...
Carbon Wars; Teeing up Taiwan
Carbon Wars The EU is moving forward with its plans for a Carbon Border Adjustment Mechanism (CBAM), and with its EU Deforestation Regulation. Despite claims to handling domestic and imported products equally as required under the WTO’s national treatment obligation, there will be plenty...
Farm Bill Behind the Scenes Negotiations
On 15 April WPI reported: House Agriculture Committee Chairman Glenn Thompson (R-Pennsylvania) has stated that he will move a farm bill draft out of committee in May; the Ranking Minority Member, David Scott (D-Georgia) has indicated that he’ll work with Thompson to have a bipartisan time...
Eat less, Toot Less
Plants such as beans, lentils and chickpeas are the nutritional rage. They are plant derived foods with higher protein content and thus their production and consumption should be on the rise. But alas, the USDA data is not comporting with that nutritional advice. Over the past four years,...
Mercosur Regional Analysis
Corn Argentina’s corn harvest only advanced by 2 percentage points last week as the rains show no mercy, making it difficult for farmers to enter the fields. Moreover, the focus of those who can enter fields remains on soybeans, which are typically harvested as soon as possible and take p...
European Market Analysis
Regional News ProZerno forecasts Russia’s 2024 total grain production will hit 135-136 MMT, down from 144.9 MMT in 2023. Wheat production is forecast to fall from 92.8 to 88 MMT this year, with barley production down from 21.1 to 18 MMT. Russia’s corn production should fall fr...
Market Commentary: Weather Worries Nearing a Ceiling
Large supplies and a strong dollar took their toll this week on corn and soybeans, but they still managed to outperform. Weather worries pushed wheat higher for a seventh straight session, and pork finally took a fall. There was high volume trading in corn today but without any strong fee...
Oilseed Highlights: Up, Despite Grey Clouds
The Market Brazil has been winning the soybean export war, and imported biodiesel feedstock threatens domestic crush margins, but Chicago trading this week appeared to shake off such concerns. July soybeans traded lower for the past three trading sessions but larger gains achieved at the beginn...
Q1 GDP Comes in Low, Interest Rate Expected to Stay High
The Q1 2024 GDP was 1.6 percent, well below the pre-report consensus expectation of 2.4 percent, and down from 3.1 percent in Q1 2023 and 3.4 percent in Q4 2023. That rate was the slowest in almost two years, dating back to Q2 2022. Recall that in the 2 February Ag Perspectives report on...
U.S. Consumer Spending, Financial Health Supports 2024 Economic Outlook
As WPI readers likely well know by now, U.S. gross domestic product (GDP) grew at an inflation- and seasonally-adjusted 1.6 percent rate in Q1 2024, which missed economist’s 2.4 percent expectations. The data sent shockwaves through U.S. financial markets with U.S. stocks and bonds openin...
Market Commentary: Wheat Extends Weather Rally; Corn, Soybeans Steady While Eyeing Weather
Wheat remains the star of the ag commodity space this week with the rally continuing on challenging weather prospects for the U.S. HRW region, Europe, and the Black Sea. Until a few weeks ago, there were few doubts about the 2024 crop being able to supply the expected demand, but now reduced yi...
Most Apparent Solution; Future is Biotech
Most Apparent Solution The EU’s organic sector wants the bloc’s officials to take more action to ensure they achieve the target of 25 percent of agricultural output being organic by 2030. Specifically, they want a campaign to increase consumer demand for organic food so that organic...
Livestock Roundup: HPAI Developments
Yesterday, the Animal and Plant Health Inspection Service (APHIS) issued a federal order requiring testing and reporting of highly pathogenic avian influenza (HPAI) for the interstate movement of lactating dairy cattle. Specific guidance will be issued at some point today, and the order will go...
Market Commentary: Some Reversals, Some Not
Corn, soybeans and soyoil all closed lower after trading up the previous three sessions. July soymeal made it a fourth trading session higher, and wheat remains on a tear with a fifth trading session closing higher. The mood around wheat sees supply concerns developing in North America and in t...
Forecast Cow-Calf Profits Near Record, Robust Heifer Retention Expected
Cow-calf producer margins are discussed less frequently in these pages than their downstream counterparts of feedlot and beef packer margins, but this doesn’t mean they are less important to understanding the beef industry’s current state and outlook. Additionally, discussion of thi...
Reigniting a Transatlantic Deal; Indian Powerhouse; “Barons” is Bombastic
Reigniting a Transatlantic Deal Former Italian prime minister Enrico Letta is something of a policy rock star after authoring a report on the future strategy for the EU. Most of the 146-page report focuses on strengthening the EU’s internal Single Market but, buried at the end of th...
Black Sea Regional Analysis
Russian Grain Markets: 15–19 April 2024 International sanctions and reverse measures Russia adopted towards “unfriendly” countries may leave Russia without proper genetics for this spring’s planting campaign. While small grains are available due to long term domestic see...