Archived Posts

News Flash: June 19, 2014

INDUSTRY

El Nino may impact oilseeds production this year

Imports of vegetable oil and oilseeds are likely to surge if the El Nino effect develops this year as forecast. El Nino led to deficient rainfall during the monsoon season and impacted production of oilseeds on all three occasions when it occurred over the past decade. Production of four major oilseeds including groundnut, soybean, sesame and castor – are susceptible to El Nino. Even minor variation in rainfall impacts the arability of these crops. With production likely to be impacted, oilmeal exports may also be effected. Economic Times

USDA sits tight with world crop balance sheet

The average corn and soybean price projections remain unchanged as the USDA made minor tweaks in the June supply-demand balance sheet. U.S. corn ending stocks for the 2014-2015 marketing year were left unchanged from last month’s report at 1.726 billion bushels and old-crop corn year-end stocks remained at 1.146 billion bushels. Projected corn production for 2014-2015 is unchanged at a record 13.935 million bushels. The projected U.S. corn yield remains at 165.3 bushels per acre as a slightly slower-than-normal mid-May planting progress is expected to be offset by very favorable early season crop and weather conditions. “U.S. crop conditions in the most recent crop progress report are the best in four years for the aggregated 18 reported states and better than any time since 2007 for the Corn Belt,” the USDA said in its world agricultural supply and demand estimates. The projected range for the 2014-2015 season-average farm price was unchanged at $3.85 to $4.55 per bushel and below this month’s lower projected 2013-2014 range of $4.45 to $4.65 per bushel. Global 2014-2015 coarse grain trade was mostly unchanged this month except for small increases in corn imports for Turkey. Global corn consumption was raised 1.8 million tons with increased feed use projected for Turkey, the

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European Union, Ukraine and Russia. Global corn ending stocks for 2014-2015 are projected 0.9 million tons higher with increases for Argentina, Brazil, Colombia, Egypt, India and Russia partly offset by reductions for China, Ukraine and South Africa. This month’s U.S. soybean supply and use projections for 2014-2015 include a small reduction in beginning and ending stocks. Lower beginning stocks reflect a higher crush projection for 2013-2014. Soybean crush for 2013-2014 was raised 5 million bushels to 1.7 billion, reflecting an increase in projected soybean meal exports. Soybean meal exports are projected at 11.5 million short tons, up 0.4 million from last month, reflecting stronger-than-expected shipments this spring. Soybean ending stocks for 2013-2014 are estimated at 125 million bushels, down 5 million from last month. Ending stocks for 2014-2015 also were reduced 5 million bushels to 325 million. The 2014-2015 season-average price for soybeans is projected at $9.75 to $11.75 per bushel, unchanged from last month. Soybean meal and soybean oil prices are projected at $355 to $395 per short ton and $37 to $41 per pound, respectively. Product price projections also are unchanged from last month. Global oilseed production for 2014-2015 is projected at 516 million tons, up 0.8 million from last month. Ending global soybean stocks for old crop were increased from 66.98 million tons last month to 67.17 million this month, while 2014-2015 soybean stocks were projected at 82.88 million compared to 82.23 million in the May estimate. Agri News

CORN

Corn Prices Come Off Lows

Corn prices got a respite from a recent slide as investors bet that the favorable weather that has led to the best crop conditions in four years will not continue. Plentiful rain during the planting season has the USDA forecasting the yield for the 2014-15 crop at 165.3 bushels an acre and production at 13.935 billion bushels, both records. Recently, three-fourths of the U.S. crop was in good or excellent condition, the best rating for this time of year since 2010. That has driven corn prices down 14% from the peak of $5.215 a bushel in late April. But traders believe the outlook could change with the weather. Wall Street Journal

PALM

Palm Imports by India Decline as Refiners Buy More Soybean Oil

Palm oil imports by India declined in May after refiners bought more soybean and sunflower oils amid record global supplies. Shipments of crude and refined palm oils slid 14 percent to 647,756 metric tons last month from a year earlier. That’s lower than the median estimate of 668,000 tons in a Bloomberg survey. Crude soybean oil imports more than tripled to 174,209 tons, while sunflower oil purchases more than doubled to 178,753 tons. Shrinking Indian demand for palm oil may expand stockpiles in Indonesia and Malaysia and pressure prices in Kuala Lumpur, which dropped 8.4 percent this year. Soybean oil’s premium over palm, the world’s most-used cooking oil, narrowed to average $91 a ton this year from $244 a ton in 2013, according to Bloomberg data. Farmers in the U.S. are expected to harvest 3.635 billion bushels of soybeans, the most ever, the Department of Agriculture estimates. World output of seven major oilseeds will be a record 487.5 million tons in the year to Sept. 30, according to the research group Oil World. Futures fell as much as 0.2 percent to 2,422 ringgit ($751) a ton on Bursa Malaysia Derivatives after the data was released before rebounding to 2,437 ringgit. Cooking oil stockpiles at ports and scheduled shipments advanced for the first time since January to 1.42 million tons on June 1 from 1.17 million tons a month earlier, data showed. Total imports, including for industrial use, increased 13 percent in May to 1.03 million tons, the association said. India’s total cooking oil imports were 6.2 million tons in the seven months ended May, unchanged from a year earlier, data showed. The country imports more than 50 percent of its demand, shipping palm oil from Indonesia and Malaysia, and soybean oil from the U.S., Brazil and Argentina. Bloomberg

SOYBEAN

Soybean Exports Rose Last 2 Months as China Buying Fell

Exports of soybeans from the world’s top shippers increased in the past two months even after buying slowed from China, the biggest importer, Oil World reports. Soybean shipments from Brazil, the U.S., Argentina and Paraguay totaled 22.25 million metric tons in April and May, 6.3 percent higher than the same period last year. Increasing demand from buyers including the European Union, Egypt, Turkey and Indonesia made up for a 4.8 percent drop in Chinese imports from the biggest suppliers during those two months. “Soybean crushings and net exports of the four major supplying countries — the U.S.A., Brazil, Argentina and Paraguay –- showed a spectacular increase so far this season…This was necessary to satisfy the unusually strong growth in world import requirements” the report said. On the Chicago Board of Trade, Soybean futures have declined 5 percent in the past year amid prospects for record global production. Chinese soybean imports may increase in June to as much as 7.5 million tons, “a near record” and up from 6.9 million tons at the same time last year. Exports of soybean oil from the top four shipping countries rose to 4.486 million tons from October through May, 5.2 percent higher than a year earlier, Oil World said. India’s purchases jumped 88 percent to 1.279 million tons, making it the world’s biggest importer. Bloomberg

CANOLA

Canola production doubles

The Australian Oilseeds Federation (AOF) has introduced a new model for examining canola production, with the rolling average of the last four years including forecast production for the 2014-15 season, which is more than double that of the previous four years. Executive manager of the AOF, Nick Goddard, said even when using longer term data, which has less drought years than the period from 2007 to 2011, the last four years represent a close to doubling of average production. Farm Weekly (Australia)

Margins set to tighten for oilseed rape growers

Oilseed rape margins are set to tighten with rapeseed prices dropping to near some growers’ cost of production, according to Chris Winney, head of consulting at crop consultants Niab. Rapeseed prices have fallen more than 30% during the past year while cost of production have increased, and growers have been left much less margin for error. “Growers will have to pay more attention to detail to get the most out of the crop but also take oilseed rape into account across the whole rotation to understand its benefits,” explains Mr Winney. Farmers Weekly (UK)