Archived Posts

News Flash: November 21, 2014

INDUSTRY

El Niño’s effect on harvest means edible oil imports must grow by half

India’s import bill for edible oils this year is expected to increase by 50% due to sizeable shortfall in its own oil seeds production as a result of El Niño. Typically, El Niño conditions lead to either a delay in the arrival of monsoons or deficient rainfall in the beginning of the June-September kharif harvest season. The major three kharif oil seeds of sunflower, groundnut and soybean will witness a fall in production by 35%, 31% and 1% respectively. To date, India has imported more than half of its domestic edible oil requirements. Food Navigator Asia

 

Oilseeds and pulses climb on strong US soya market

Oilseed rape and pulse markets have continued to improve over the past week, with average rapeseed values reaching £249/t ex-farm – their highest level since late June. Cold US weather, alongside a record soybean crush in October, had sent markets higher, said a report by HGCA. “Demand remains firmer than anticipated, despite rising soya bean and soymeal prices. US soybean exports have been strong, but with production 18% higher than last year, a slight increase in crushings is perhaps not such a surprise” Farmers Weekly (UK)

 

CORN

Corn Rises on Increased Exports, Ethanol Production; Wheat Gains

Corn futures rose for the first time in a week on signs of increasing demand for shipments from the U.S., the world’s top exporter. Corn, used to make livestock feed and a gasoline additive, dropped 5.7 percent in the previous four sessions. Export sales in the week ended Nov. 13 jumped 80 percent to 908,689 metric tons from a week earlier, and the number of chicks placed on feed last week rose 1.7 percent from a year earlier, according to USDA data. Production of ethanol rose to the second-highest ever, government figures showed yesterday. On the Chicago Board of Trade, corn futures for delivery in March rose 2.7 percent to close at $3.8625 a bushel. Earlier, the price touched $3.7525, the lowest for a most-active contract since Nov. 11. Soybean futures for January delivery advanced 1.6 percent to $10.205 a bushel, the biggest increase since Nov. 11. Delays persisted in shipping supplies to processors. U.S. freight-train speeds last week were the slowest since 2009 for the period, while carloads of grain in the week ended Nov. 15 fell 3.9 percent from a year earlier, according to data from the Association of American Railroads. While soybean output is forecast to rise to a record 3.958 billion bushels, inventories left from last year’s crop were the lowest since 1973, the USDA said this month. Bloomberg

 

BIOFUEL

Ethanol Credits for 2014 Rise to 3-Month High on Biofuel

Certificates that track how much ethanol is used in U.S. gasoline jumped to the highest since August as rail congestion and export demand helped lift prices for the biofuel. Corn-based ethanol Renewable Identification Numbers rose 13 percent to 53.5 cents, the highest level since Aug. 7, data compiled by Bloomberg show. Ethanol rose to a premium over gasoline yesterday, compared with an average discount of about 66 cents during the past year. The surge in the credits comes as congestion along the nation’s railroads, used to transport ethanol from producers in the Midwest to the East, West and Gulf coasts, has helped push ethanol prices higher. A year-long delay by the Environmental Protection Agency in releasing final 2014 consumption targets for refiners has added to demand for credits. Rail congestion, export demand, speculation that cheaper gasoline prices will pull more drivers to the road and boost consumption, as well as a delay by President Barack Obama’s administration in releasing final consumption targets are all working to push RINs higher, said Jerrod Kitt, an analyst at Linn Group in Chicago. Denatured ethanol for December delivery fell 0.5 cent to $2.062 a gallon on the Chicago Board of Trade. Gasoline for December delivery advanced 1.69 cents, or 0.8 percent, to $2.0432 a gallon on the New York Mercantile Exchange. The contract covers reformulated gasoline, made to be blended with ethanol before delivery to filling stations.Prices for the motor fuel have tumbled 27 percent this year, compared with a 7.9 percent gain for ethanol. Ethanol traded at a 1.88-cent premium to gasoline today, from 4.07 cents yesterday. RINs are certificates attached to each gallon of biofuel. Once refiners blend ethanol into petroleum, they can keep the RIN to submit to the EPA to show compliance with the law, or trade it to another party. Based on ethanol’s premium to gasoline, a refiner may decide to purchase a RIN to satisfy its renewable fuel obligations instead of blending the physical gallon, Kitt said. Meanwhile, Nov. 15 marked a year since the EPA proposed reducing the amount of ethanol in gasoline from targets laid out in a 2007 energy law, known as the Renewable Fuels Standard. Bloomberg

 

SOYBEAN

Soybeans Extend Weekly Loss as Rain Aids Crop in South America

Soybeans slipped, headed for a third weekly drop, on expectations wet weather in South America will help boost crops being planted. Corn declined, as well. Rain in Brazil will increase in coming days and become widespread early next week, covering 90 percent of corn and soybeans. The rain will ease much of the dryness across southern Goias, Minas Gerais, Sao Paulo and Parana in Brazil, the forecaster said. Soybeans for January delivery fell 0.1 percent to $10.1925 a bushel on the Chicago Board of Trade by 5:18 a.m. Prices are 0.3 percent lower this week, and a third straight weekly loss would be the longest such run since the period to Sept. 26. “Forecasters are predicting that South American rainfall will leave all but a few minor areas with ideal moisture conditions for planting and establishment,” Commonwealth Bank of Australia wrote in an e-mailed note today. Output in Brazil, the second-biggest producer, may climb 8.4 percent to 94 million tons, the U.S. Department of Agriculture predicts. The area planted in Argentina may total 20.1 million hectares in 2014-2015, 2 percent more than the previous season, the Agriculture Ministry said yesterday. Farmers in Parana, Brazil’s second-biggest soybean growing state, are finalizing soybean planting after the pace picked up following rain last month, Michael Cordonnier, the president of Soybean & Corn Advisor Inc., wrote in an online comment. Corn for March delivery fell 0.4 percent to $3.8475 a bushel, heading for a weekly loss. Bloomberg

 

CANOLA

Soybeans Extend Weekly Loss as Rain Aids Crop in South America

The Canola Council of Canada (CCC) commends the Government’s very successful trade mission to China to increase agricultural trade ties. The mission included participation in the Canada-China Business Forum, where Prime Minister Stephen Harper and Agriculture Minister Gerry Ritz witnessed the signing of an agreement to sell $1 billion of Canadian canola oil to China. “This engagement with China at the highest political levels is very important to increasing export opportunities for Canadian canola,” says Patti Miller, President of the CCC. “China is one of our most important customers and this agreement ensures that they will continue to be a very promising and consistent market” Seedquest