World Perspectives

Recent China Analysis

farm-inputs

Exporting Water

The latest mantra from development specialists is concern about the future availability of water. It is an old topic but a durable one given the preciousness of the resource. Since 70 percent of the withdrawals of freshwater around the world are for agriculture, and 60 percent more food must be...

feed-grains soy-oilseeds wheat

European Market Analysis

Regional News  The biggest trends in the EU/Black Sea wheat markets this week are the fact that the Russian crop continues to grow while EU crop forecasts are being continually lowered. Russian wheat yields are defying their typical pattern of decreasing as harvest progresses. This year, e...

feed-grains soy-oilseeds

Mercosur Regional Analysis

Corn Argentina’s corn harvest is coming to an end, per the Buenos Aires Grain Exchange. The yield averaged 8.1 MT/ha and total production came in at 50 MMT. This is the first time that corn production exceeded soybeans in Argentina. This year’s harvest progress was also very quick,...

feed-grains soy-oilseeds wheat

Market Commentary: Weaker into the Weekend

The CBOT was sharply weaker heading into the weekend with many contracts posting new contract lows. September corn, December soymeal, and the first five listed HRW and MGEX wheat contracts all posted fresh contract lows. Soybeans, while far from contract lows, still posted a strongly bearish cl...

The Global Future

Politicians can make a mess of things, but policymakers typically seek to solve problems. Politicians proclaim a new cold war between China and the U.S.; policymakers see it as a dysfunctional historical period that must be led back to equilibrium.    The Chinese are happy with their...

feed-grains soy-oilseeds wheat

Market Commentary: Setting Records

Records are being set in lots of places and not in a good way if you are a bull. There will be record wheat in Canada and India and projected record corn and soybean crops next season in Brazil. Farmers not selling now to clean out bins are ignoring the fact that seasonal lows may not yet be hi...

feed-grains soy-oilseeds wheat

Market Commentary: Spread Trade Creates Consolidation

The CBOT featured spread trade on Wednesday with corn and wheat gaining on soybeans. Traders were revering old bull soybean/wheat and soybean/corn spreads, which kept soybean values under pressure. Trading volumes were low and spreading/position evening was the theme of the day.  The Wall...

feed-grains soy-oilseeds wheat

China In-Country Analysis

Livestock Ministry of Agriculture Data Shows Hog Recovery on Track According to the latest market surveys from China’s Ministry of Agriculture and Rural Affairs (MARA), through this past June the country’s sow and live hog inventories are recovering at a steady pace. At the halfway...

feed-grains soy-oilseeds wheat

Market Commentary: Commodity Collapse

The CBOT was sharply weaker for the second trading day in August. Continued excellent or improving spring crop conditions and private firm forecasts of record corn and soybean yields sparked widespread selling. Corn dipped to new contract lows – as did HRW wheat – while SRW wheat an...

Phase One Collateral Damage; Conditional Income Subsidies

Phase One Collateral Damage UC-Davis researchers Robert Feenstra and Chang Hong analyzed (NBER Working Paper No. 27383) the impact of the Phase One agreement on China’s agricultural imports and find that some U.S. allies should be very upset. Holding China’s imports roughly static,...

What is the Exit Strategy for Ad Hoc Farm Payments?

The 2018 farm bill was signed into law in December of that year and implementing rules were rolled out through 2019. The major crop programs, like ARC and PLC for example, saw participation elections and signups in the fall of 2019 and CRP general sign up began in December 2019. These and other...

feed-grains

Malt Prices Rising

The malting barley sector was thrown two curve balls this year: the shutdown of the hospitality sector by COVID-19, and China imposing punitive tariffs on its typical supplier, Australia. However, neither development explains the recent uptick in prices given that sales typically occur in the l...

feed-grains soy-oilseeds wheat

Mercosur Regional Analysis

Wheat Weather conditions are still working against the 2020/21 wheat crop. Planting activity, mostly focused in the South of Buenos Aires, is moving slowly (1.8 percent weakly progress) due to excess soil moisture. Almost 95 percent of the expected area (6.5 Mha) is planted, but farmers are hav...

feed-grains soy-oilseeds wheat

Market Commentary

July finished with a fizzle at the CBOT, with buy wheat/sell corn spreads pressuring the feed grain while soybeans firmed on expectations of continued export sales next week. The only real action was in soyoil and livestock futures, with the former jumping higher and breaking technical resistan...

feed-grains soy-oilseeds wheat

Market Commentary

Markets are being whipsawed as concerns about the economy apply downward pressure as seen in the last overnight session and then buoyed somewhat this morning by the Export Sales report. Let’s start with the economy. It suffered a huge contraction due to COVID-19. Everyone knew that before...

soy-oilseeds

Oilseed Highlights: U.S. Soy Export Sales; COVID-19 on Soy Ship; Argentine DETs on Soy

Soy Export Sales Highlight As expected, the week ending 23 July was a very good one for exporters of U.S. soybeans and a so-so week for exporters of U.S. soymeal. However, the current week has not been as good. Net soybean export sales last week totaled 257,800 MT for 2019/20 shipment and 3,344...

Economic Recovery and Quit the Race; Grain Monopolization

Economic Recovery and Quit the Race A Nikkei survey of 145 Japanese company CEO’s found that a majority believe it will take at least two years to economically recover from the coronavirus. Basically, 38 percent said it will take two years and 17.8 percent said it will take even longer th...

feed-grains soy-oilseeds wheat

The Pandemic, the Economy and Demand

The Federal Reserve Bank’s July meeting ended yesterday. No one expects the Fed to change its stance on record low interest rates or to ease up on its buying of government bonds and mortgage-backed securities as a means of pumping money into the economy. The minutes of this week’s F...

Currency Manipulation; Phase One Intentions; India Recognizing Ag Policy Constraints

Currency Manipulation Goldman Sachs is warning that the U.S. dollar’s dominance as the global reserve currency is at risk. Threats include inflation, political uncertainty and debt/slow economic growth related to the coronavirus. The U.S. dollar has fallen over 10 percent in value since t...

feed-grains

Sorghum’s Ups and Downs

The U.S. sorghum crop is the world's largest and this year's output is suffering from overly dry conditions. USDA's crop condition rating is 53 percent good/excellent, 10 points below the five-year average of 63 percent and could signal a smaller harvest.    Sorghum is a useful c...

feed-grains soy-oilseeds wheat

Market Commentary

The CBOT opened lower with continued pressure from excellent corn/soybean conditions ratings and increased chatter about above-trendline or record yields this year. Wheat futures were higher in range-bound trade as buy wheat/sell corn spread trading dominated the day. The lack of new daily expo...

feed-grains soy-oilseeds wheat

China In-Country Analysis

Livestock U.S. Beef Exports Continue on Record Run When 2020 finally comes to an end, it will likely be remembered as the year when U.S. beef and beef products firmly reestablished their presence in the China market. In May, a total of 1,670.6 MT left U.S. ports for the Middle Kingdom with a to...

feed-grains soy-oilseeds wheat

Ag Review - July 2020

WPI's monthly publication features a review of the past month's market and policy developments. This issue covers such topics as the recovery in cattle prices, a new strategy in the corn market, a surge in the Chinese Dalian exchange, the role of soymeal in aquaculture, the importance of China...

feed-grains soy-oilseeds wheat

Market Commentary

The CBOT opened lower overnight as USDA’s surprise increase in the good/excellent ratings for corn and soybeans pressured the market. Wheat followed corn lower, pressured by spillover selling as well as its own good harvest statistics. The increase in crop conditions ratings seemed to spa...

Notable Viewpoints; CPC GMO’s

Notable Viewpoints A Bloomberg session today on saving global trade brought some interesting viewpoints from former trade officials as well as China topic experts.  Beijing found Donald Trump difficult to figure out until they concluded that he is just transactional and it was simply a mat...

feed-grains soy-oilseeds wheat

Market Commentary

The CBOT opened on a weaker note with corn, soybeans and wheat trading lower Sunday night and into Monday morning. Monday’s opening bell, however, saw corn and wheat traded higher while selling pressure accelerated in wheat. The day featured mostly low-volume trade with corn ending slight...

livestock

Beef Growth and Decline

Beef is expensive to produce, emits the most greenhouse gases, is highly cultural in some places and has a highly evolving demand structure. Over the past decade, consumption of beef in otherwise relatively large consuming Russia has declined the most of any of the top 20 countries. Note that t...

Nail on the Head; Roll Your Own; Filipino Fraud; Hot Air Bus

Nail on the Head Democratic Senators Elizabeth Warren (Massachusetts) and Cory Booker (New Jersey) teamed up on a report excoriating the meat industry over worker conditions and the coronavirus. Keep in mind that as a vegetarian, Mr. Booker is naturally disinclined towards meat packing and Ms...

feed-grains soy-oilseeds wheat

Mercosur Regional Analysis

Wheat Argentina’s wheat area received some rain last week (15-50 mm) but precipitation was isolated to the southern agricultural area. The effect is that planting will be slightly delayed as soil moistures in the area were already high.   In the meantime, Cordoba and Santa Fe, a...

feed-grains soy-oilseeds wheat

Market Commentary

The CBOT traded a mixed day to close the week with higher wheat futures the only pronounced development. Rising cash wheat values in Russia (up $1-5/MT depending on the region) helped Paris milling wheat move €2.25/MT higher over night and that supported CBOT wheat as well. Wheat/corn bull...

Platform Analysis; Ideological War

Platform Analysis A draft of the Democrats’ Party Platform for this year’s election repeats past policy promises for agriculture, most of which are either meaningless or hold the risk of unintended consequences.  Small is Better: As in the past, the Party pledges “to bett...

feed-grains soy-oilseeds wheat

Market Commentary

If not for good export sales, futures prices would be pressured even lower. Cheap prices are encouraging some of China’s purchases. Moreover, a weakening dollar is helping. Some commercial buyers in China are paying upwards of $371/MT for domestic corn, the most heavily traded Dalian cont...

Theater of the Absurd

Robinhood: Proving that it is easy to give away other peoples’ money, the United Nations Development Program is proposing the payment of a temporary basic income to 2.7 billion people living in 132 countries at the cost of $199 billion per month.  Stating the Obvious: Proving that to...

soy-oilseeds

Oilseed Highlights: Soy Export Sales; Soybean Sales to China Amid Tension; Malaysia Palm

U.S. Soy Export Sales Highlights Today’s USDA export sales report showed exporters had great success selling U.S. soybeans for export in the week ending 16 July. However, sales of soymeal and soyoil were not that good. Net soybean export sales last week totaled 365,200 MT for shipment in...

feed-grains soy-oilseeds

Mid-Summer Issues and Observations

Grain and soy futures prices have been relatively quiet and range-bound lately with the exception of soyoil. Soyoil futures were trading slightly lower yesterday, but this follows six straight higher closes in pursuit of palm oil amid the buoyant outlook for edible oil. The spot August soyoil c...

feed-grains soy-oilseeds wheat

Market Commentary

The closure of the Chinese consulate in Houston, Texas over IP theft issues (along with suspected document destruction overnight at the facility) pressured soybeans in early trade. Corn benefited from unwinding of prior long soybeans/short corn spreads and additional export sales announcements...

farm-inputs

Exporting Water

The latest mantra from development specialists is concern about the future availability of water. It is an old topic but a durable one given the preciousness of the resource. Since 70 percent of the withdrawals of freshwater around the world are for agriculture, and 60 percent more food must be...

feed-grains soy-oilseeds wheat

European Market Analysis

Regional News  The biggest trends in the EU/Black Sea wheat markets this week are the fact that the Russian crop continues to grow while EU crop forecasts are being continually lowered. Russian wheat yields are defying their typical pattern of decreasing as harvest progresses. This year, e...

feed-grains soy-oilseeds

Mercosur Regional Analysis

Corn Argentina’s corn harvest is coming to an end, per the Buenos Aires Grain Exchange. The yield averaged 8.1 MT/ha and total production came in at 50 MMT. This is the first time that corn production exceeded soybeans in Argentina. This year’s harvest progress was also very quick,...

feed-grains soy-oilseeds wheat

Market Commentary: Weaker into the Weekend

The CBOT was sharply weaker heading into the weekend with many contracts posting new contract lows. September corn, December soymeal, and the first five listed HRW and MGEX wheat contracts all posted fresh contract lows. Soybeans, while far from contract lows, still posted a strongly bearish cl...

The Global Future

Politicians can make a mess of things, but policymakers typically seek to solve problems. Politicians proclaim a new cold war between China and the U.S.; policymakers see it as a dysfunctional historical period that must be led back to equilibrium.    The Chinese are happy with their...

feed-grains soy-oilseeds wheat

Market Commentary: Setting Records

Records are being set in lots of places and not in a good way if you are a bull. There will be record wheat in Canada and India and projected record corn and soybean crops next season in Brazil. Farmers not selling now to clean out bins are ignoring the fact that seasonal lows may not yet be hi...

feed-grains soy-oilseeds wheat

Market Commentary: Spread Trade Creates Consolidation

The CBOT featured spread trade on Wednesday with corn and wheat gaining on soybeans. Traders were revering old bull soybean/wheat and soybean/corn spreads, which kept soybean values under pressure. Trading volumes were low and spreading/position evening was the theme of the day.  The Wall...

feed-grains soy-oilseeds wheat

China In-Country Analysis

Livestock Ministry of Agriculture Data Shows Hog Recovery on Track According to the latest market surveys from China’s Ministry of Agriculture and Rural Affairs (MARA), through this past June the country’s sow and live hog inventories are recovering at a steady pace. At the halfway...

feed-grains soy-oilseeds wheat

Market Commentary: Commodity Collapse

The CBOT was sharply weaker for the second trading day in August. Continued excellent or improving spring crop conditions and private firm forecasts of record corn and soybean yields sparked widespread selling. Corn dipped to new contract lows – as did HRW wheat – while SRW wheat an...

Phase One Collateral Damage; Conditional Income Subsidies

Phase One Collateral Damage UC-Davis researchers Robert Feenstra and Chang Hong analyzed (NBER Working Paper No. 27383) the impact of the Phase One agreement on China’s agricultural imports and find that some U.S. allies should be very upset. Holding China’s imports roughly static,...

What is the Exit Strategy for Ad Hoc Farm Payments?

The 2018 farm bill was signed into law in December of that year and implementing rules were rolled out through 2019. The major crop programs, like ARC and PLC for example, saw participation elections and signups in the fall of 2019 and CRP general sign up began in December 2019. These and other...

feed-grains

Malt Prices Rising

The malting barley sector was thrown two curve balls this year: the shutdown of the hospitality sector by COVID-19, and China imposing punitive tariffs on its typical supplier, Australia. However, neither development explains the recent uptick in prices given that sales typically occur in the l...

feed-grains soy-oilseeds wheat

Mercosur Regional Analysis

Wheat Weather conditions are still working against the 2020/21 wheat crop. Planting activity, mostly focused in the South of Buenos Aires, is moving slowly (1.8 percent weakly progress) due to excess soil moisture. Almost 95 percent of the expected area (6.5 Mha) is planted, but farmers are hav...

feed-grains soy-oilseeds wheat

Market Commentary

July finished with a fizzle at the CBOT, with buy wheat/sell corn spreads pressuring the feed grain while soybeans firmed on expectations of continued export sales next week. The only real action was in soyoil and livestock futures, with the former jumping higher and breaking technical resistan...

feed-grains soy-oilseeds wheat

Market Commentary

Markets are being whipsawed as concerns about the economy apply downward pressure as seen in the last overnight session and then buoyed somewhat this morning by the Export Sales report. Let’s start with the economy. It suffered a huge contraction due to COVID-19. Everyone knew that before...

soy-oilseeds

Oilseed Highlights: U.S. Soy Export Sales; COVID-19 on Soy Ship; Argentine DETs on Soy

Soy Export Sales Highlight As expected, the week ending 23 July was a very good one for exporters of U.S. soybeans and a so-so week for exporters of U.S. soymeal. However, the current week has not been as good. Net soybean export sales last week totaled 257,800 MT for 2019/20 shipment and 3,344...

Economic Recovery and Quit the Race; Grain Monopolization

Economic Recovery and Quit the Race A Nikkei survey of 145 Japanese company CEO’s found that a majority believe it will take at least two years to economically recover from the coronavirus. Basically, 38 percent said it will take two years and 17.8 percent said it will take even longer th...

feed-grains soy-oilseeds wheat

The Pandemic, the Economy and Demand

The Federal Reserve Bank’s July meeting ended yesterday. No one expects the Fed to change its stance on record low interest rates or to ease up on its buying of government bonds and mortgage-backed securities as a means of pumping money into the economy. The minutes of this week’s F...

Currency Manipulation; Phase One Intentions; India Recognizing Ag Policy Constraints

Currency Manipulation Goldman Sachs is warning that the U.S. dollar’s dominance as the global reserve currency is at risk. Threats include inflation, political uncertainty and debt/slow economic growth related to the coronavirus. The U.S. dollar has fallen over 10 percent in value since t...

feed-grains

Sorghum’s Ups and Downs

The U.S. sorghum crop is the world's largest and this year's output is suffering from overly dry conditions. USDA's crop condition rating is 53 percent good/excellent, 10 points below the five-year average of 63 percent and could signal a smaller harvest.    Sorghum is a useful c...

feed-grains soy-oilseeds wheat

Market Commentary

The CBOT opened lower with continued pressure from excellent corn/soybean conditions ratings and increased chatter about above-trendline or record yields this year. Wheat futures were higher in range-bound trade as buy wheat/sell corn spread trading dominated the day. The lack of new daily expo...

feed-grains soy-oilseeds wheat

China In-Country Analysis

Livestock U.S. Beef Exports Continue on Record Run When 2020 finally comes to an end, it will likely be remembered as the year when U.S. beef and beef products firmly reestablished their presence in the China market. In May, a total of 1,670.6 MT left U.S. ports for the Middle Kingdom with a to...

feed-grains soy-oilseeds wheat

Ag Review - July 2020

WPI's monthly publication features a review of the past month's market and policy developments. This issue covers such topics as the recovery in cattle prices, a new strategy in the corn market, a surge in the Chinese Dalian exchange, the role of soymeal in aquaculture, the importance of China...

feed-grains soy-oilseeds wheat

Market Commentary

The CBOT opened lower overnight as USDA’s surprise increase in the good/excellent ratings for corn and soybeans pressured the market. Wheat followed corn lower, pressured by spillover selling as well as its own good harvest statistics. The increase in crop conditions ratings seemed to spa...

Notable Viewpoints; CPC GMO’s

Notable Viewpoints A Bloomberg session today on saving global trade brought some interesting viewpoints from former trade officials as well as China topic experts.  Beijing found Donald Trump difficult to figure out until they concluded that he is just transactional and it was simply a mat...

feed-grains soy-oilseeds wheat

Market Commentary

The CBOT opened on a weaker note with corn, soybeans and wheat trading lower Sunday night and into Monday morning. Monday’s opening bell, however, saw corn and wheat traded higher while selling pressure accelerated in wheat. The day featured mostly low-volume trade with corn ending slight...

livestock

Beef Growth and Decline

Beef is expensive to produce, emits the most greenhouse gases, is highly cultural in some places and has a highly evolving demand structure. Over the past decade, consumption of beef in otherwise relatively large consuming Russia has declined the most of any of the top 20 countries. Note that t...

Nail on the Head; Roll Your Own; Filipino Fraud; Hot Air Bus

Nail on the Head Democratic Senators Elizabeth Warren (Massachusetts) and Cory Booker (New Jersey) teamed up on a report excoriating the meat industry over worker conditions and the coronavirus. Keep in mind that as a vegetarian, Mr. Booker is naturally disinclined towards meat packing and Ms...

feed-grains soy-oilseeds wheat

Mercosur Regional Analysis

Wheat Argentina’s wheat area received some rain last week (15-50 mm) but precipitation was isolated to the southern agricultural area. The effect is that planting will be slightly delayed as soil moistures in the area were already high.   In the meantime, Cordoba and Santa Fe, a...

feed-grains soy-oilseeds wheat

Market Commentary

The CBOT traded a mixed day to close the week with higher wheat futures the only pronounced development. Rising cash wheat values in Russia (up $1-5/MT depending on the region) helped Paris milling wheat move €2.25/MT higher over night and that supported CBOT wheat as well. Wheat/corn bull...

Platform Analysis; Ideological War

Platform Analysis A draft of the Democrats’ Party Platform for this year’s election repeats past policy promises for agriculture, most of which are either meaningless or hold the risk of unintended consequences.  Small is Better: As in the past, the Party pledges “to bett...

feed-grains soy-oilseeds wheat

Market Commentary

If not for good export sales, futures prices would be pressured even lower. Cheap prices are encouraging some of China’s purchases. Moreover, a weakening dollar is helping. Some commercial buyers in China are paying upwards of $371/MT for domestic corn, the most heavily traded Dalian cont...

Theater of the Absurd

Robinhood: Proving that it is easy to give away other peoples’ money, the United Nations Development Program is proposing the payment of a temporary basic income to 2.7 billion people living in 132 countries at the cost of $199 billion per month.  Stating the Obvious: Proving that to...

soy-oilseeds

Oilseed Highlights: Soy Export Sales; Soybean Sales to China Amid Tension; Malaysia Palm

U.S. Soy Export Sales Highlights Today’s USDA export sales report showed exporters had great success selling U.S. soybeans for export in the week ending 16 July. However, sales of soymeal and soyoil were not that good. Net soybean export sales last week totaled 365,200 MT for shipment in...

feed-grains soy-oilseeds

Mid-Summer Issues and Observations

Grain and soy futures prices have been relatively quiet and range-bound lately with the exception of soyoil. Soyoil futures were trading slightly lower yesterday, but this follows six straight higher closes in pursuit of palm oil amid the buoyant outlook for edible oil. The spot August soyoil c...

feed-grains soy-oilseeds wheat

Market Commentary

The closure of the Chinese consulate in Houston, Texas over IP theft issues (along with suspected document destruction overnight at the facility) pressured soybeans in early trade. Corn benefited from unwinding of prior long soybeans/short corn spreads and additional export sales announcements...

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