WASDE Wheat
Wheat: USDA’s March estimate is that U.S. ending stocks are increased 673 million bushels and are 18 percent higher than last year. The season-average U.S. farm price is reduced $0.05 per bushel to $7.15. The global wheat ending stocks are lowered 0.6 million tons to 258.8 million,...
WASDE Wheat
USDA reduced the 2023/24 season-average U.S. farm price of wheat by $0.10 lower to $7.20 per bushel. The global wheat outlook for 2023/24 is for larger ending stocks compared with last month. Global supplies are raised 3.6 million tons to 1,056.5 million. Increased stocks for Russia, Ukraine, a...
Market Commentary: Corn Posts Bullish Reversal; Wheat, Hogs Follow Through on Reversals
Grains were once again the upside leader at the CBOT on Wednesday with wheat following through on Tuesday’s reversal in KCBT futures and the large gains in the CBOT market. On Wednesday, however, the corn market joined in on the rally and the March contract posted a bullish reversal on it...
WASDE Wheat
Wheat: USDA’s outlook for 2023/24 is for higher U.S. ending stocks by 14 million bushels to 684 million. The projected 2023/24 season-average U.S. farm price is lowered $0.10 per bushel to $7.20. The global wheat outlook for 2023/24 is for larger ending stocks, raised 0.6 million, to tons...
Coercion Beholder; Down Under’s Demands
Coercion Beholder U.S. Supreme Court Justice Potter Stewart famously said in a 1964 case that he could not define hard core pornography “But I know it when I see it.” The G-7 called for an end to boycotts of purchasing Japanese farm products, calling it a form of coercion. Meanwhile...
Market Commentary: End of Week Reshuffle
The only certainty of the past week is that soymeal is going stratospheric. But corn, soybeans, and wheat took a breather today. For the week: December corn gained 0.456 percent December soymeal rose 8.69 percent November soybeans gained 1.71 percent December soyoil lost 1.82...
WASDE Wheat
USDA increased U.S. wheat ending stocks by 55 million bushels to 670 million, up 15 percent from last year. The season-average farm price is reduced $0.20 per bushel to $7.30 on higher projected stocks for the remainder of the marketing year. The global wheat outlook for 2023/24 is for lower st...
WASDE Wheat
USDA made no changes in total U.S. wheat for 2023/24. Global supplies are projected to decline 7.2 million tons to 1,054.5 million, primarily on lower production for Australia, Canada, Argentina, and the EU, which is only partly offset by an increase for Ukraine. World ending stocks are r...
WASDE Wheat
Wheat: USDA increased their July estimate for 2023/24 U.S. ending stocks to 592 million bushels, 30 million higher than last month. Winter wheat production is forecast to be higher on larger harvested area and increased yields. The projected season-average farm price is forecast at $7.50 per bu...
Market Commentary: More Rains Wash Away Weather Premium
Over the past three weeks, one has been unable to discuss ag commodity futures without a detailed discussion of U.S. weather patterns, and that remained true on Wednesday. The CBOT was sharply lower as rains fell across the U.S. Plains and Eastern Corn Belt and offered broad coverage and meanin...
WASDE Wheat
USDA’s projection for U.S wheat in the current 2023/24 season is total U.S. wheat production of 1,665 million bushels. This is a production level that is similar to the prior 2022/23 season's production of 1,650 and similar to the 2021/22 level of 1,646 million bushels. U.S. ending...
WASDE Wheat
USDA’s estimate for 2023/24 U.S. wheat is reduced stocks. All wheat production is projected at 1,659 million bushels, up modestly from last year on increased harvested area. However, the harvest-to-plant ratio is down from last year with above-average abandonment in Texas, Okl...
Volatile Wheat Suppliers
The FAS attache in Canberra expects Australia’s wheat production to fall by 25 percent in 2023/24. This follows three years of record sized crops. Lower prices and drier conditions are the cause. Of the six major wheat exporters, Australia has the highest variation in its production and e...
Australian Barley Rebound
Australia announced that an agreement had been reached with China that will end the latter’s punitive tariffs on barley from Down Under. For its part, China said it is willing to work with Australia to normalize relations. In May 2020, China imposed tariffs of 80.5 percent on Australian b...
WASDE Wheat
WHEAT: The 2022/23 U.S. wheat outlook is unchanged from last month. The season-average farm price forecast also remains unchanged at $9.00 per bushel. Global ending stocks are lowered 2.1 million tons to 267.2 million, as smaller stocks for China more than offset increases for Argen...
Cure for High Prices
Good moisture has enabled Australia to produce a record sized wheat crop. Due to proximity, Australia largely serves Asian markets and its wheat sales to China are up 158 percent. These sales have occured despite Chinese restrictions on many other Australian farm products. Trade ministers from...
WASDE Wheat
WHEAT: USDA reduced 2022/23 ending stocks slightly as larger domestic use more than offsets higher beginning stocks. The season-average farm price is unchanged at $9.10 per bushel. The 2022/23 global outlook is for increased supplies, exports, consumption, and stocks. Wo...
ANZ Split; Labor Key to PA
Anz Split The Australia-New Zealand relationship is very tight, with both nations freely trading with one another and generally sharing positions on foreign policy. However, China has created a bit of an ANZ split. Australian Foreign Minister Penny Wong visited China on the 50th anniversary of...
WASDE Wheat
U.S. domestic wheat data is unchanged from last month. The global wheat supplies are lowered 2.1 million tons to 1,056.9 million on reduced production for Argentina and Canada that is only partly offset by higher Australia production. ...
Market Commentary: CBOT Selloff Intensifies; Aussie Wheat Crop Gets Bigger
Monday offered little reprieve from the CBOT’s recent trends with the selloffs in soyoil and wheat intensifying. Funds were net sellers in both markets, but for different reasons. In soyoil, the EPA’s latest renewable fuel volume mandates are, at least for now, perceived as bearish...
Livestock Round Up: Cattle Prices Continue Bullish
Live cattle negotiated prices in the south hit $155/cwt this week, while in the north they reached $157, and still some sellers held out for more. Negotiated dressed prices averaged $245/cwt. Slaughter last week was down due to the Thanksgiving holiday but was still higher than the...
WASDE Wheat
WHEAT: USDA made a light increase in U.S. 2022/2023 wheat production to 1,783 million bushels, up 2 million from last month. Reductions in winter wheat and Durum are more than offset by an increase in Other Spring Wheat. The all-wheat yield is 47.5 bushels per acre, up 0.2 bus...
WASDE Wheat
USDA’s June 2022 estimate is for slightly lower ending stocks of global wheat. Projected 2022/23 world ending stocks are lowered 0.2 million tons to 266.9 million, a six-year low. Supplies are decreased by 1.7 million tons to 1,052.8 million as lower India production mor...
Down Under Limits
Major wheat exporters have a tremendous opportunity if they can take their advantage. India was thought to be in the catbird seat. Production was going to be up 1.6 percent but the exportabe surplus would be up 200 percent, until it wasn’t. Dry heat shrunk the crop and now there are expor...
WASDE Wheat
WHEAT: USDA’s outlook for 2022/23 is for higher U.S. wheat prices. U.S. 2022/23 wheat supplies are projected down 3 percent, as lower beginning stocks more than offset a larger harvest. All wheat production for 2022/23 is projected at 1,729 million bushels, up 83 million from...
Reprieve on Emissions Data; IPEF Launch; GMO Wheat
Reprieve on Emissions Data At the request of U.S. farm groups, the Securities and Exchange Commission (SEC) has extended the deadline for public comments on its proposed rule, “The Enhancement and Standardization of Climate Related Disclosures for Investors.” The Commission wants pu...
China Tensions and Trade
Using trade as a bullying tool did not start and end with Donald Trump. Most recently, Russia’s Vladimir Putin limited food exports to so-called “friendly” countries. Starting in 2020 when Australia called for an investigation into COVID’s origin, Beijing began an effort...
WASDE Wheat
WHEAT: In the April 2022 WASDE, USDA reduced U.S. exports by 15 million bushels, to 785 million, as the U.S. remains uncompetitive to most markets. Projected 2021/22 ending stocks are raised 25 million bushels to 678 million but are still 20 percent lower than last year. The projected sea...
Market Commentary: Definitively Lower
The market opened lower for grains and oilseeds and for most contracts that was the consistent direction of the day. The bearish tone of yesterday’s WASDE coupled with significant rain relief coming for South America prompted a shedding of the weather premium that had been building. ...
Market Commentary: The Mysteries of WASDE
USDA seems to never cease disappointing some traders’ expectations. USDA characterized its December WASDE report as containing “minor” changes, and that is an apt description. This report involved a few tweaks, but nothing that reflected all of the jockeying in the market ahea...
Market Commentary: Omicron Correction
It was a risk off day as investors shook off earlier Omicron concerns and bought back part of what they’d given up in the past few days. With indications that this version of the virus is not deadlier, that it may even follow the evolutionary trend of viruses getting weaker over time, and...
Market Commentary: COVID Tanks Markets (again)
“… [covid’s] always on my mind, [covid’s] always on my mind.” With apologies to Willie Nelson, that was the tune markets were singing Tuesday. After a brief pause yesterday, crude oil, stocks, currencies, and commodities all continued Friday’s risk-off and l...
Aussie Wheat Importance
Although Australia produces less than 5 percent of global wheat output, it is typically the world’s fourth largest exporter. Due to its tendency toward drought, production can be variable but still correlates over time to global wheat ending stocks. The Australian Bureau of Agricultural a...
Market Commentary: Weak Energies Weigh on Soy Complex; Wheat Ignores Bearish Technicals
Continued declines in energy markets pressured the CBOT on Friday and reduced fund buying interest. Soyoil futures fell lower and to near trading range support on weaker energy markets and pulled soybeans lower as well. Wheat futures were higher as traders pointed to strong demand as reason to...
WASDE Wheat
The November WASDE projected U.S. wheat ending stocks at 583 million bushels for the 2021/22 season. That estimate is up 3 million from the October forecast. The projected 2021/22 season-average U.S. farm price is raised $0.20 per bushel to $6.90. Global wheat ending stocks are down 1.4 million...
Beef: Where East Meets West
Beef demand in East Asia is on a long-term trend upward. Fulfilling this demand has required increased imports, primarily from Australia, Brazil, and the U.S. It has also resulted in a drawdown in the regions surplus stocks. Complicating the supply situation has been drought in Australia, an at...
Market Commentary: CBOT Correction Continues; Cash Wheat Strong Despite Futures’ Decline
The CBOT ended the week on a down note with corn, wheat, and the soy complex all posting losses for the day. Corn and wheat attempted to rally early in the day, but that effort was met with stiff selling pressure and more cash selling from farmers. Harvest activity has increased across the east...
Beer Pressures
Global supply chain issues are pressuring many industries, but beer makers face a complex set of issues. Prices have risen for malt barley, aluminum, labor, and transportation. Already elevated malt prices started rising more in mid-summer when the impact of North American drought conditions be...
Mercosur Regional Analysis
Wheat Despite drought in Argentina that came during the early phases of the wheat crop, rains appeared during the critical yield-defining periods and boosted yield potential. Consequently, the Buenos Aires Grain Exchange increased its crop estimate from 19.2 to 19.8 MMT for MY 2021/22. Almost...
Market Commentary: CBOT Rallies to End Strong Week; Hogs Rally while Cattle Fall
Corn and wheat futures were higher again on Friday, but volume was waning as funds slowed their buying pace. The soy complex saw continued but mild strength as exports remain a headwind for soybeans and meal. This week’s market action saw surprising strength due to demand-side factors (no...
Notable TFP Changes
U.S. Secretary for Agriculture Tom Vilsack and EU Agriculture Commissioner Janusz Wojciechowski will be on the stage together next week at the Forum for the Future of Agriculture & Farm Europe. Mr. Vilsack has taken the position that increasing productivity is the pathway to sustainability...
European Market Analysis
Regional News The EU Commission reported that the favorable weather conditions across most of Europe “allowed farmers to make good progress” harvesting 2021 summer crops and planting 2022 winter crops. The Commission increased its forecast of summer crop yields, with the 2021...
AM Outlook - Trends Intact
GOOD MORNING, Prices opened close to home, higher for soy with some light profit-taking in wheat. All markets are higher heading into the close led by wheat. Minneapolis wheat trades into contract highs, and oats have traded into all-time record highs. Matif wheat made n...
Double Exposure; New Old Era
Double Exposure In a concept paper yesterday at the WTO, the U.S. outlined its lessons from the pandemic in terms of a more resilient planet. Notably missing from the report was any mention of the TRIPS agreement hindering vaccinations against disease. The reason for its absence is the mounting...
Ag Negotiator; Curious Quad
Ag Negotiator President Joe Biden announced his intent to nominate Elaine Trevino to be the U.S. Chief Agricultural Trade Negotiator. Trevino is President of the Almond Board Alliance of California. Her prior experience includes serving as Deputy Secretary and Assistant Secretary at the Califor...
Future Industry Impacts; Minimum Wage and Farm Labor
Future Industry Impacts The push toward shorter supply chains and plant-based food products will have perverse impacts on the food marketing industry. For example, eating local runs directly counter to the use of geographic indicators, which seeks to protect and promote the sale of food in non-...
Value versus Value-added in Grapes
The EU is the largest maker of wine, followed by the U.S., whereas China may be the largest producer of table grapes but its production of wine in any quantity is a relative recent phenomenon. Meanwhile, the EU’s wine production has been dropping. India is the second largest producer of g...
Consolidation’s Diminishing Returns
While countries like Brazil and Ukraine are trying to consolidate farmland in order to gain efficiencies, Australia has always had some of the largest farms in the world. However, consolidation reached a peak in 2010 and the consolidation curve has flattened or even slightly declined. Lik...
WASDE Wheat
USDA’s outlook for the new 2021/22 U.S. wheat crop is for higher production. All wheat yield is 50.7 bushels per acre, up 0.7 bushels from last month. Feed and residual use is raised 10 million bushels to 180 million on the higher supplies as wheat is expected to be priced competitively w...
Update on Cyber Attack on Meat
This morning we posted an alert on the cyber-attack on JBS IT infrastructure in North America and Australia. The attack happened over the weekend and the company reported the incident to the White House and USDA. The U.S. government is operating under the assumption that this was similar to the...
Cyber Security: New Commodity Market Risk?
Just three weeks after the Colonial Pipeline that supplies about 45 percent of the gasoline to the U.S. East Coast was hit by cyber hackers, the largest meat packer in the world was hit by a cyber-attack over the weekend. Coincidence? Or have hackers gained an appreciation for the chaos that ca...
AM Outlook - Soy Complex Gains on Grains
NOTE: Technical Perspectives from WPI will not be published on May 28, 2021. Good morning - Prices traded higher overnight led by soyoil, which stabilized bean trade. Soybean bull spreads are working again, finding support after Monday's selloff. Morning trends feature beans gai...
Uncertain Values
British farmers are upset that their government may give access to the UK market to beef from Australia. They argue that they are not competitive against their Aussie peers. The relative competitiveness is difficult to understand based on public data. Based on dated numbers from the FAO, Brazil...
Reliability versus Value in Beef
Argentina’s restriction on beef exports to control domestic inflation and political upheaval could raise issues over reliability as a supplier. However, Russia has proven that wheat importing countries care more about value (quality and price) than they do about reliability of specific su...
WASDE Wheat
WHEAT: The initial outlook for 2021/22 U.S. wheat is for smaller supplies, higher domestic use, lower exports, and reduced stocks. Supplies are projected down 3 percent from 2020/21 on lower carry-in stocks offsetting higher production and imports. All wheat production is proj...
Livestock Round Up: Bullish Beef Outlook
It’s a month and a half until Memorial Day weekend, the official kick off of seasonal beef demand. The Choice cutout was $276.62/cwt today, up from a $272/cwt average last week, which was up about $20/cwt from the week prior. Part of that rally is demand, and part is supply. March beef pr...
WASDE Wheat
U.S. wheat outlook is for lower supplies, reduced domestic use, unchanged exports, and higher ending stocks. Feed and residual use is lowered 25 million bushels to 100 million. Exports are unchanged. Projected 2020/21 ending stocks are raised to 852 million bushels but are sti...
Self-Punishment; Easy Solution; Back to the Flame
Self-Punishment China has made its punitive 200 percent tariff on Australian wines permanent for the next five years. The tariff is not import protection for nascent Chinese winemakers but political punishment imposed on Canberra. However, it is concurrently punishment imposed on Chinese consum...
Risk of Precaution; Challenging Poor Governance
Risk of Precaution Several European countries stopped vaccinations with AstraZeneca’s product out of an abundance of caution that it was causing blood clots in some recipients. The EU’s medicines regulator now says there is little risk (EMA data shows a 0.0006% rate of blood clots f...
More to Burn, Less Trade
As the border carbon tax idea picks up steam it leads to all kinds of possibilities for expanding use of border measures to extract policy changes. One target being discussed is the treatment of women, but they could be expanded to policy measures that distort trade, such as labor laws, tax pol...
WASDE Wheat
Wheat: USDA’s March estimate is that U.S. ending stocks are increased 673 million bushels and are 18 percent higher than last year. The season-average U.S. farm price is reduced $0.05 per bushel to $7.15. The global wheat ending stocks are lowered 0.6 million tons to 258.8 million,...
WASDE Wheat
USDA reduced the 2023/24 season-average U.S. farm price of wheat by $0.10 lower to $7.20 per bushel. The global wheat outlook for 2023/24 is for larger ending stocks compared with last month. Global supplies are raised 3.6 million tons to 1,056.5 million. Increased stocks for Russia, Ukraine, a...
Market Commentary: Corn Posts Bullish Reversal; Wheat, Hogs Follow Through on Reversals
Grains were once again the upside leader at the CBOT on Wednesday with wheat following through on Tuesday’s reversal in KCBT futures and the large gains in the CBOT market. On Wednesday, however, the corn market joined in on the rally and the March contract posted a bullish reversal on it...
WASDE Wheat
Wheat: USDA’s outlook for 2023/24 is for higher U.S. ending stocks by 14 million bushels to 684 million. The projected 2023/24 season-average U.S. farm price is lowered $0.10 per bushel to $7.20. The global wheat outlook for 2023/24 is for larger ending stocks, raised 0.6 million, to tons...
Coercion Beholder; Down Under’s Demands
Coercion Beholder U.S. Supreme Court Justice Potter Stewart famously said in a 1964 case that he could not define hard core pornography “But I know it when I see it.” The G-7 called for an end to boycotts of purchasing Japanese farm products, calling it a form of coercion. Meanwhile...
Market Commentary: End of Week Reshuffle
The only certainty of the past week is that soymeal is going stratospheric. But corn, soybeans, and wheat took a breather today. For the week: December corn gained 0.456 percent December soymeal rose 8.69 percent November soybeans gained 1.71 percent December soyoil lost 1.82...
WASDE Wheat
USDA increased U.S. wheat ending stocks by 55 million bushels to 670 million, up 15 percent from last year. The season-average farm price is reduced $0.20 per bushel to $7.30 on higher projected stocks for the remainder of the marketing year. The global wheat outlook for 2023/24 is for lower st...
WASDE Wheat
USDA made no changes in total U.S. wheat for 2023/24. Global supplies are projected to decline 7.2 million tons to 1,054.5 million, primarily on lower production for Australia, Canada, Argentina, and the EU, which is only partly offset by an increase for Ukraine. World ending stocks are r...
WASDE Wheat
Wheat: USDA increased their July estimate for 2023/24 U.S. ending stocks to 592 million bushels, 30 million higher than last month. Winter wheat production is forecast to be higher on larger harvested area and increased yields. The projected season-average farm price is forecast at $7.50 per bu...
Market Commentary: More Rains Wash Away Weather Premium
Over the past three weeks, one has been unable to discuss ag commodity futures without a detailed discussion of U.S. weather patterns, and that remained true on Wednesday. The CBOT was sharply lower as rains fell across the U.S. Plains and Eastern Corn Belt and offered broad coverage and meanin...
WASDE Wheat
USDA’s projection for U.S wheat in the current 2023/24 season is total U.S. wheat production of 1,665 million bushels. This is a production level that is similar to the prior 2022/23 season's production of 1,650 and similar to the 2021/22 level of 1,646 million bushels. U.S. ending...
WASDE Wheat
USDA’s estimate for 2023/24 U.S. wheat is reduced stocks. All wheat production is projected at 1,659 million bushels, up modestly from last year on increased harvested area. However, the harvest-to-plant ratio is down from last year with above-average abandonment in Texas, Okl...
Volatile Wheat Suppliers
The FAS attache in Canberra expects Australia’s wheat production to fall by 25 percent in 2023/24. This follows three years of record sized crops. Lower prices and drier conditions are the cause. Of the six major wheat exporters, Australia has the highest variation in its production and e...
Australian Barley Rebound
Australia announced that an agreement had been reached with China that will end the latter’s punitive tariffs on barley from Down Under. For its part, China said it is willing to work with Australia to normalize relations. In May 2020, China imposed tariffs of 80.5 percent on Australian b...
WASDE Wheat
WHEAT: The 2022/23 U.S. wheat outlook is unchanged from last month. The season-average farm price forecast also remains unchanged at $9.00 per bushel. Global ending stocks are lowered 2.1 million tons to 267.2 million, as smaller stocks for China more than offset increases for Argen...
Cure for High Prices
Good moisture has enabled Australia to produce a record sized wheat crop. Due to proximity, Australia largely serves Asian markets and its wheat sales to China are up 158 percent. These sales have occured despite Chinese restrictions on many other Australian farm products. Trade ministers from...
WASDE Wheat
WHEAT: USDA reduced 2022/23 ending stocks slightly as larger domestic use more than offsets higher beginning stocks. The season-average farm price is unchanged at $9.10 per bushel. The 2022/23 global outlook is for increased supplies, exports, consumption, and stocks. Wo...
ANZ Split; Labor Key to PA
Anz Split The Australia-New Zealand relationship is very tight, with both nations freely trading with one another and generally sharing positions on foreign policy. However, China has created a bit of an ANZ split. Australian Foreign Minister Penny Wong visited China on the 50th anniversary of...
WASDE Wheat
U.S. domestic wheat data is unchanged from last month. The global wheat supplies are lowered 2.1 million tons to 1,056.9 million on reduced production for Argentina and Canada that is only partly offset by higher Australia production. ...
Market Commentary: CBOT Selloff Intensifies; Aussie Wheat Crop Gets Bigger
Monday offered little reprieve from the CBOT’s recent trends with the selloffs in soyoil and wheat intensifying. Funds were net sellers in both markets, but for different reasons. In soyoil, the EPA’s latest renewable fuel volume mandates are, at least for now, perceived as bearish...
Livestock Round Up: Cattle Prices Continue Bullish
Live cattle negotiated prices in the south hit $155/cwt this week, while in the north they reached $157, and still some sellers held out for more. Negotiated dressed prices averaged $245/cwt. Slaughter last week was down due to the Thanksgiving holiday but was still higher than the...
WASDE Wheat
WHEAT: USDA made a light increase in U.S. 2022/2023 wheat production to 1,783 million bushels, up 2 million from last month. Reductions in winter wheat and Durum are more than offset by an increase in Other Spring Wheat. The all-wheat yield is 47.5 bushels per acre, up 0.2 bus...
WASDE Wheat
USDA’s June 2022 estimate is for slightly lower ending stocks of global wheat. Projected 2022/23 world ending stocks are lowered 0.2 million tons to 266.9 million, a six-year low. Supplies are decreased by 1.7 million tons to 1,052.8 million as lower India production mor...
Down Under Limits
Major wheat exporters have a tremendous opportunity if they can take their advantage. India was thought to be in the catbird seat. Production was going to be up 1.6 percent but the exportabe surplus would be up 200 percent, until it wasn’t. Dry heat shrunk the crop and now there are expor...
WASDE Wheat
WHEAT: USDA’s outlook for 2022/23 is for higher U.S. wheat prices. U.S. 2022/23 wheat supplies are projected down 3 percent, as lower beginning stocks more than offset a larger harvest. All wheat production for 2022/23 is projected at 1,729 million bushels, up 83 million from...
Reprieve on Emissions Data; IPEF Launch; GMO Wheat
Reprieve on Emissions Data At the request of U.S. farm groups, the Securities and Exchange Commission (SEC) has extended the deadline for public comments on its proposed rule, “The Enhancement and Standardization of Climate Related Disclosures for Investors.” The Commission wants pu...
China Tensions and Trade
Using trade as a bullying tool did not start and end with Donald Trump. Most recently, Russia’s Vladimir Putin limited food exports to so-called “friendly” countries. Starting in 2020 when Australia called for an investigation into COVID’s origin, Beijing began an effort...
WASDE Wheat
WHEAT: In the April 2022 WASDE, USDA reduced U.S. exports by 15 million bushels, to 785 million, as the U.S. remains uncompetitive to most markets. Projected 2021/22 ending stocks are raised 25 million bushels to 678 million but are still 20 percent lower than last year. The projected sea...
Market Commentary: Definitively Lower
The market opened lower for grains and oilseeds and for most contracts that was the consistent direction of the day. The bearish tone of yesterday’s WASDE coupled with significant rain relief coming for South America prompted a shedding of the weather premium that had been building. ...
Market Commentary: The Mysteries of WASDE
USDA seems to never cease disappointing some traders’ expectations. USDA characterized its December WASDE report as containing “minor” changes, and that is an apt description. This report involved a few tweaks, but nothing that reflected all of the jockeying in the market ahea...
Market Commentary: Omicron Correction
It was a risk off day as investors shook off earlier Omicron concerns and bought back part of what they’d given up in the past few days. With indications that this version of the virus is not deadlier, that it may even follow the evolutionary trend of viruses getting weaker over time, and...
Market Commentary: COVID Tanks Markets (again)
“… [covid’s] always on my mind, [covid’s] always on my mind.” With apologies to Willie Nelson, that was the tune markets were singing Tuesday. After a brief pause yesterday, crude oil, stocks, currencies, and commodities all continued Friday’s risk-off and l...
Aussie Wheat Importance
Although Australia produces less than 5 percent of global wheat output, it is typically the world’s fourth largest exporter. Due to its tendency toward drought, production can be variable but still correlates over time to global wheat ending stocks. The Australian Bureau of Agricultural a...
Market Commentary: Weak Energies Weigh on Soy Complex; Wheat Ignores Bearish Technicals
Continued declines in energy markets pressured the CBOT on Friday and reduced fund buying interest. Soyoil futures fell lower and to near trading range support on weaker energy markets and pulled soybeans lower as well. Wheat futures were higher as traders pointed to strong demand as reason to...
WASDE Wheat
The November WASDE projected U.S. wheat ending stocks at 583 million bushels for the 2021/22 season. That estimate is up 3 million from the October forecast. The projected 2021/22 season-average U.S. farm price is raised $0.20 per bushel to $6.90. Global wheat ending stocks are down 1.4 million...
Beef: Where East Meets West
Beef demand in East Asia is on a long-term trend upward. Fulfilling this demand has required increased imports, primarily from Australia, Brazil, and the U.S. It has also resulted in a drawdown in the regions surplus stocks. Complicating the supply situation has been drought in Australia, an at...
Market Commentary: CBOT Correction Continues; Cash Wheat Strong Despite Futures’ Decline
The CBOT ended the week on a down note with corn, wheat, and the soy complex all posting losses for the day. Corn and wheat attempted to rally early in the day, but that effort was met with stiff selling pressure and more cash selling from farmers. Harvest activity has increased across the east...
Beer Pressures
Global supply chain issues are pressuring many industries, but beer makers face a complex set of issues. Prices have risen for malt barley, aluminum, labor, and transportation. Already elevated malt prices started rising more in mid-summer when the impact of North American drought conditions be...
Mercosur Regional Analysis
Wheat Despite drought in Argentina that came during the early phases of the wheat crop, rains appeared during the critical yield-defining periods and boosted yield potential. Consequently, the Buenos Aires Grain Exchange increased its crop estimate from 19.2 to 19.8 MMT for MY 2021/22. Almost...
Market Commentary: CBOT Rallies to End Strong Week; Hogs Rally while Cattle Fall
Corn and wheat futures were higher again on Friday, but volume was waning as funds slowed their buying pace. The soy complex saw continued but mild strength as exports remain a headwind for soybeans and meal. This week’s market action saw surprising strength due to demand-side factors (no...
Notable TFP Changes
U.S. Secretary for Agriculture Tom Vilsack and EU Agriculture Commissioner Janusz Wojciechowski will be on the stage together next week at the Forum for the Future of Agriculture & Farm Europe. Mr. Vilsack has taken the position that increasing productivity is the pathway to sustainability...
European Market Analysis
Regional News The EU Commission reported that the favorable weather conditions across most of Europe “allowed farmers to make good progress” harvesting 2021 summer crops and planting 2022 winter crops. The Commission increased its forecast of summer crop yields, with the 2021...
AM Outlook - Trends Intact
GOOD MORNING, Prices opened close to home, higher for soy with some light profit-taking in wheat. All markets are higher heading into the close led by wheat. Minneapolis wheat trades into contract highs, and oats have traded into all-time record highs. Matif wheat made n...
Double Exposure; New Old Era
Double Exposure In a concept paper yesterday at the WTO, the U.S. outlined its lessons from the pandemic in terms of a more resilient planet. Notably missing from the report was any mention of the TRIPS agreement hindering vaccinations against disease. The reason for its absence is the mounting...
Ag Negotiator; Curious Quad
Ag Negotiator President Joe Biden announced his intent to nominate Elaine Trevino to be the U.S. Chief Agricultural Trade Negotiator. Trevino is President of the Almond Board Alliance of California. Her prior experience includes serving as Deputy Secretary and Assistant Secretary at the Califor...
Future Industry Impacts; Minimum Wage and Farm Labor
Future Industry Impacts The push toward shorter supply chains and plant-based food products will have perverse impacts on the food marketing industry. For example, eating local runs directly counter to the use of geographic indicators, which seeks to protect and promote the sale of food in non-...
Value versus Value-added in Grapes
The EU is the largest maker of wine, followed by the U.S., whereas China may be the largest producer of table grapes but its production of wine in any quantity is a relative recent phenomenon. Meanwhile, the EU’s wine production has been dropping. India is the second largest producer of g...
Consolidation’s Diminishing Returns
While countries like Brazil and Ukraine are trying to consolidate farmland in order to gain efficiencies, Australia has always had some of the largest farms in the world. However, consolidation reached a peak in 2010 and the consolidation curve has flattened or even slightly declined. Lik...
WASDE Wheat
USDA’s outlook for the new 2021/22 U.S. wheat crop is for higher production. All wheat yield is 50.7 bushels per acre, up 0.7 bushels from last month. Feed and residual use is raised 10 million bushels to 180 million on the higher supplies as wheat is expected to be priced competitively w...
Update on Cyber Attack on Meat
This morning we posted an alert on the cyber-attack on JBS IT infrastructure in North America and Australia. The attack happened over the weekend and the company reported the incident to the White House and USDA. The U.S. government is operating under the assumption that this was similar to the...
Cyber Security: New Commodity Market Risk?
Just three weeks after the Colonial Pipeline that supplies about 45 percent of the gasoline to the U.S. East Coast was hit by cyber hackers, the largest meat packer in the world was hit by a cyber-attack over the weekend. Coincidence? Or have hackers gained an appreciation for the chaos that ca...
AM Outlook - Soy Complex Gains on Grains
NOTE: Technical Perspectives from WPI will not be published on May 28, 2021. Good morning - Prices traded higher overnight led by soyoil, which stabilized bean trade. Soybean bull spreads are working again, finding support after Monday's selloff. Morning trends feature beans gai...
Uncertain Values
British farmers are upset that their government may give access to the UK market to beef from Australia. They argue that they are not competitive against their Aussie peers. The relative competitiveness is difficult to understand based on public data. Based on dated numbers from the FAO, Brazil...
Reliability versus Value in Beef
Argentina’s restriction on beef exports to control domestic inflation and political upheaval could raise issues over reliability as a supplier. However, Russia has proven that wheat importing countries care more about value (quality and price) than they do about reliability of specific su...
WASDE Wheat
WHEAT: The initial outlook for 2021/22 U.S. wheat is for smaller supplies, higher domestic use, lower exports, and reduced stocks. Supplies are projected down 3 percent from 2020/21 on lower carry-in stocks offsetting higher production and imports. All wheat production is proj...
Livestock Round Up: Bullish Beef Outlook
It’s a month and a half until Memorial Day weekend, the official kick off of seasonal beef demand. The Choice cutout was $276.62/cwt today, up from a $272/cwt average last week, which was up about $20/cwt from the week prior. Part of that rally is demand, and part is supply. March beef pr...
WASDE Wheat
U.S. wheat outlook is for lower supplies, reduced domestic use, unchanged exports, and higher ending stocks. Feed and residual use is lowered 25 million bushels to 100 million. Exports are unchanged. Projected 2020/21 ending stocks are raised to 852 million bushels but are sti...
Self-Punishment; Easy Solution; Back to the Flame
Self-Punishment China has made its punitive 200 percent tariff on Australian wines permanent for the next five years. The tariff is not import protection for nascent Chinese winemakers but political punishment imposed on Canberra. However, it is concurrently punishment imposed on Chinese consum...
Risk of Precaution; Challenging Poor Governance
Risk of Precaution Several European countries stopped vaccinations with AstraZeneca’s product out of an abundance of caution that it was causing blood clots in some recipients. The EU’s medicines regulator now says there is little risk (EMA data shows a 0.0006% rate of blood clots f...
More to Burn, Less Trade
As the border carbon tax idea picks up steam it leads to all kinds of possibilities for expanding use of border measures to extract policy changes. One target being discussed is the treatment of women, but they could be expanded to policy measures that distort trade, such as labor laws, tax pol...