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News Flash – March 13, 2014

INDUSTRY

Grain and Feed Industry Asks for FSMA Rule Comment Extensions

Now that the U.S. FDA will no longer be held to deadlines for FSMA rule comment periods, industry groups are asking for more time to submit their comments on certain regulations. Several trade associations have requested that FDA extend the comment deadlines by 90 days for its proposed rule on preventive controls for pet food and animal feed and draft methodological approach to identifying high-risk foods. Under this proposal, the animal food rules comment period would end June 30 and the high-risk food guidance on July 7. Some of the signatories also requested that FDA re-propose the animal food rule and offer a second comment period. The groups, including several oilseed processor groups, also requested that FDA extend the comment period for the proposed intentional adulteration rule to June 30. Food Safety News

 

PALM

Palm Oil Drops as Prices at 18-Month High Seen Cutting Demand

Palm oil declined the most in more than a week on concern that the highest price in almost 18 months may weaken demand for the tropical oil. The contract for May delivery retreated 1 percent to 2,872 ringgit ($875) a metric ton on Bursa Malaysia Derivatives, the biggest decline at close for futures since Feb. 27. Futures jumped to the highest level since September 2012 yesterday after data showed that output in Malaysia, the world’s second-biggest producer, dropped last month to the lowest since April 2012 as dry weather threatened to hurt crops. Exports from Malaysia fell 5 percent to 293,879 tons in the first 10 days of this month from the same period in February, surveyor Intertek said yesterday. “Prices are down mainly due to profit-taking especially after prices climbed sharply yesterday,” said Chee Tat Tan, an analyst with Phillip Futures Pte., by phone from Singapore. “Outlook still remains bullish because of production concerns.” Weather during the next two to three weeks will be crucial for palm oil areas in Malaysia and Indonesia and rain is required after a period of dryness, Maybank Kim Eng Securities Pte said in a report today. Prolonged dryness will impact yields in the last quarter of this year, it said. Soybean oil for delivery in May was little changed at 43.78 cents a pound on the Chicago Board of Trade, while soybeans slid 0.4 percent to $14.13 a bushel, extending losses of 2.7 percent yesterday. Refined palm oil for September delivery rose 1.6 percent to 6,518 yuan ($1,061) a ton on the Dalian Commodity Exchange. Soybean oil increased 0.8 percent to 7,220 yuan. Bloomberg

 

SOYBEAN

Soybean Futures Drop on USDA Forecast

Soybean futures dropped the most since late January on Monday after federal forecasters projected higher-than-expected U.S. supplies ahead of this year’s harvest. Corn prices also declined, hurt by estimates for greater global stockpiles of the grain. The USDA estimated that domestic soybean stockpiles would total 145 million bushels on Aug. 31, down from its forecast of 150 million last month. The government cut the figure because export demand for U.S. inventories has been strong, but analysts had expected a steeper cut, to about 141 million bushels. While exports remain strong, the amount of meal made from soybeans used to feed animals domestically may drop on expectations that the Porcine Epidemic Diarrhea virus, a disease that has killed thousands of piglets in 23 states, will shrink the size of the U.S. hog herd. That, in turn, will reduce the amount of soybean meal used as animal feed. Corn futures fell, hurt by the USDA’s forecast for higher global stockpiles of the grain than analysts had expected, and declining soybean prices. The government estimated world corn stockpiles for 2013-14 will total 158.47 million metric tons, up from 157.3 million last month, due in part to higher production by China. Wall Street Journal

 

WASDE: Soybean Exports Reach Record 1.53 Billion Bushels

U.S. soybean supply and use projections for 2013/14 include higher imports and exports, reduced crush, and reduced ending stocks compared with last month’s report. Soybean exports are raised 20 million bushels to a record 1.53 billion reflecting continued strong sales and shipments through February. Soybean crush is reduced 10 million bushels to 1.69 billion reflecting weaker-than-expected domestic soybean meal use through the first quarter of the marketing year. Soybean oil stocks are reduced on lower production and increased exports. Other soybean oil changes include reduced use for biodiesel and an offsetting increase for food, feed, and other industrial use. AgWeb

 

Soybeans, Copper Futures Drop on China Slowdown

Soybean futures fell sharply Monday following news of a slowdown in Chinese trade. The actively traded May contract for soybeans fell 39 cents, or 2.7 percent, to $14.19 a bushel Monday.

China is a major buyer of U.S. soybeans, and any hint of a slowdown there tends to push prices of the crop lower. China reported over the weekend that its exports slumped 18 percent last month, far more than economists were expecting. “China buys 69 percent of our soybean exports, so any little sniffle of economic problems in China translates into concerns about bean prices,” said Todd Hultman, a grain analyst with DTN in Omaha, NE. Corn futures also fell. May corn fell 11 cents, or 2.2 percent, to $4.78 a bushel. Associated Press

 

CANOLA

Giant lineup of farmers hoping to ship their canola crops

Saskatchewan farmers are desperate to ship their grain and oilseeds, something that was dramatically illustrated this week when a canola terminal got some train cars. Grain cars have been in short supply on the Prairies this year, but some companies have managed to secure of a number of them. This caused a massive traffic jam of trucks at the terminal. For Canadian farmers, the logistical problems have been a nightmare. One farmer said he’s only been able to sell about 10 per cent of his harvest so far, and that’s meant financial hardship. “The grain bins are full, but the bank account is empty,” farmer, Mark Kehrig said. “And I gather I’m not the only one in that boat.” Kehrig believes that he’s been getting by thanks to a line of credit and an understanding bank manager.Earlier this month, the Canadian government moved to force the railways to provide a minimum number of grain cars every week, with penalties if they don’t meet the requirements. CBC News Canada