Archived Posts

News Flash: November 6, 2014

INDUSTRY

Pain in Trains Falls Mainly on Grain

The worst rail delays in more than a decade are impeding crop shipments in the Midwest, causing grain-storage facilities to fill up and sending prices for corn, soybean and soybean meal up sharply. Congestion on railroad networks, now threatening to extend into a second year in the U.S. Farm Belt, is forcing some buyers to purchase additional soybean meal, used mainly in animal feed, to ensure a steady supply, analysts said. That helped push futures prices up 11% in the past week. And soybeans and corn both jumped by around 7% as livestock and poultry operations in the eastern U.S. rushed to avoid feed shortages and speculators bid up the price of the commodities related to soy meal, analysts said. The delays have slowed business for grain companies in the upper Midwest that ship crops to customers who process them into feed and other products or export them overseas. Wall Street Journal

Grain farmers produced 27% less than in 2013 and face lower prices

Poor weather conditions have dramatically reduced Canada’s production of grains and oilseeds this year and resulted in a lower-quality crop. At the same time, prices for corn, and soybeans are much lower than last year, resulting in much lower projected earnings for farmers. Many farmers will be looking to sell their crop as feed because of the lower quality and that will hurt their income. Canola, and corn production is also on track to be substantially lower than last year, Statistics Canada estimated in early October. But soybean production could be up. Canadian Broadcasting Corporation News

 

PALM

What is palm oil’s economic impact in Europe?

The palm oil sector makes a clear contribution to the economies of producer countries – but it also contributes to the economy in importing markets, according to a new report. The Malaysian Palm Oil Council commissioned an assessment of the palm oil sector’s economic impact in Europe from Europe Economics, a consultancy specializing in the application of economics to business and policy issues. For the first time, it focused on palm oil’s impacts in importing countries, rather than its impacts for producers. Food Navigator

 

Palm Seen by Mistry Extending Bull Market as Reserves Shrink

Palm oil will probably climb more than 12 percent, extending a bull market, as inventories contract in Malaysia and Indian imports expand, according to Dorab Mistry, director of Godrej International Ltd. Futures “will comfortably exceed” 2,500 ringgit ($749) a metric ton after March as stockpiles in Malaysia decline through June, Mistry said. His earlier target of 2,300 ringgit by Dec. 10 will be exceeded because of the weakness of the Malaysian currency, he said in remarks prepared for a conference in China today. Bloomberg

 

SOYBEAN

Soybean Futures Rise on U.S. Export Demand, Rail Delays

Soybean futures rose for the second straight day as shipping delays persisted and export demand increased for supplies from the U.S. Corn prices advanced. In the week ended Oct. 30, U.S. soybean exports rose 28 percent to 1.61 million metric tons from a week earlier, government data showed today. Soybean futures for January delivery climbed 0.9 percent to close at $10.28 a bushel at 1:15 p.m. on the Chicago Board of Trade. Yesterday, the oilseed climbed by the same percentage. In October, the price jumped 15 percent, the most since July 2012. Soybean-meal futures for December delivery surged 4.4 percent to $391.70 per 2,000 pounds, the biggest gain for a most-active contract since Oct. 29. The commodity has surged 33 percent from an intraday price on Oct. 1 at $295.10, the lowest since Dec. 19, 2011. Today, canola futures in Canada rose to a 12-week high on increasing oilseed demand. Corn futures for December delivery rose 0.3 percent to $3.7125 a bushel. Earlier, the price fell as much as 1 percent. Bloomberg