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News Flash: October 16, 2014


Corn, Soybean Prices Fall, Despite USDA Raising Outlooks

U.S. corn and soybean prices tumbled last Friday, after government forecasters predicted harvests will be even larger than the record levels previously expected. The closely watched monthly crop report from USDA said domestic farmers will harvest a record 14.475 billion bushels of corn for the current 2014-15 crop year, up from last month’s forecast of 14.395 billion—although the increase was less than what analysts had anticipated. The USDA also stated that corn yields would reach an all-time high of 174.2 bushels an acre, topping last month’s estimate of 171.7 bushels an acre. Soybean prices also slid, after the government estimated soybean production at 3.927 billion bushels on yields of 47.1 bushels an acre, both records. Analysts had expected the USDA to boost its forecast for soybean output to 3.977 billion bushels on yields of 47.6 bushels an acre. Though soybean yields missed expectations, some said the sheer size of the crop was still impressive. Wall Street Journal

NGFA joins in urging Obama to raise ag biotech market access

The National Grain and Feed Association (NGFA) has joined 12 other national agricultural producer, biotech, seed and grain handling, processing and export organizations in urging President Obama to make market access for U.S. crops and advancing the U.S.-China relationship on agricultural biotechnology and trade “beyond the status quo” as a “top priority” during the Asia Pacific Economic Cooperation Leaders Summit in China, which will be held next month. In a letter written under the auspices of the U.S. Biotech Crops Alliance, the groups stressed the “incredible importance” of the Chinese export market for U.S. grains and oilseeds to the viability of the U.S. agricultural economy. Ag Professional



Oct. 10 WASDE: Soybean Production Jumps to Record 3.927 Billion Bushels

U.S. oilseed production for 2014/15 is projected at 116.3 million tons, up 0.1 million from last month. Soybean production is forecast at a record 3,927 million bushels, up 14 million with improved yields more than offsetting reduced harvested area. The soybean yield is projected at 47.1 bushels per acre, up 0.5 bushels from September. Harvested area is reduced 0.7 million acres to 83.4 million. Soybean supplies for 2014/15 are projected 24 million bushels below last month with lower beginning stocks from the Grain Stocks report more than offsetting increased production. Canola, sunflower, and cottonseed production are forecast lower this month. AgWeb

American Soybean Association welcomes EPA registration of Enlist Duo herbicide

The farmer members of the American Soybean Association (ASA) welcome yesterday’s decision by the Environmental Protection Agency (EPA) to register Dow’s Enlist Duo herbicide for use with Enlist Duo soybeans. The new low-volatility Enlist Duo herbicide will be utilized with Enlist soybeans, when commercialized, to control resistant and difficult to manage weeds. ASA also called upon foreign markets where U.S. soybeans are exported to quickly review and approve these new biotech events so that they can be commercialized here in the United States without jeopardizing export markets and U.S. farmers can realize their benefit. SeedQuest



Yield increase leads U.S. sunflower production higher

U.S. sunflower production is expected higher this year, thanks to a significant bump in the average yield compared to 2013. Last Friday’s USDA crop progress report pegged total American sunflower output for this year at 1.11 million tonnes, a 21 increase from last year’s crop of just over 922,000 tonnes. Sunflower planted area for this year, at 1.57 million acres, is down 8 from the June estimate and down fractionally from last year. However, U.S. sunflower growers are still expected to harvest 1.51 million acres, down 7 from June but up 2 from the 2013 acreage. In contrast, the October yield forecast, at 1,626 lbs/acre, is 248 lbs higher than last year’s yield. SeedQuest

Sunflower Outlook Cut by Oil World on Ukraine, Russia

World sunflower-seed production is predicted to slide 4.7 % in 2014-15, more than forecast last month after the outlook for Russia and Ukraine was cut, crimping crushing for oil and meal, according to Oil World data. Farmers around the globe may collect 40.6 million metric tons compared with 42.6 million tons in 2013-14, the oilseed researcher wrote in a weekly report. The outlook was cut from 41.4 million tons in September. Reduced supply is pushing up sunflower-seed oil prices relative to soybean and palm oils, according to Oil World. Sunflower-seed oil for delivery in Western Europe rose 2.3 % in the week through October 9, while crude palm oil prices fell 1.8 %, the researcher reported. Bloomberg



U.S. Weekly Outlook – How many acres of corn are needed in 2015?

In the October 10 World Agricultural Supply and Demand Estimates (WASDE) report, the USDA projected that stocks of old-crop corn at the start of the 2015-16 marketing year will be at a 10-year high of 2.081 billion bushels even with record large consumption of 13.655 billion bushels. “Based on the pattern of USDA yield forecasts in previous years when the U.S. average yield was well above trend value, as is the case this year, many expect that the final yield estimate this year will exceed the October forecast of 174.2 bushels,” said Darrel Good, a University of Illinois agricultural economist. “If the final 2014 production estimate is larger than the current forecast and consumption is near the current forecast, year-ending stocks may be near 2.2 billion bushels. The large 2014 crop and the buildup in stocks are expected to result in a 2014-15 marketing-year average farm price in the low- to mid- $3 level, well below the cost of production for most producers,” he said. SeedQuest



Malaysia Seeking to Boost Palm Oil

Malaysia’s extension of tax-free exports of crude palm oil until the year-end is intended to support prices and curb the buildup of reserves. Futures lost 18 % this year amid a global glut in edible oil supplies, hurting producers’ profits in Malaysia and Indonesia, the two largest suppliers. The Malaysian government initially waived the export tax for September and October after prices dropped to a five-year low, and Indonesia’s tariff was also set to zero for this month, boosting competition. While some Malaysian growers welcomed the extension, the decision was criticized by a refiners’ group. Malaysia Prime Minister Najib Razak announced the additional two months for tax-free shipments in the budget address shortly before the end of trade in Kuala Lumpur. Futures on the Bursa Malaysia Derivatives, the global benchmark, fell 0.3 % to 2,175 ringgit ($667) a metric ton at the midday break in Kuala Lumpur. Prime Minister Najib Razak announced the additional two months for tax-free shipments in the budget address shortly before the end of trade in Kuala Lumpur on Oct. 10. Prices lost 0.4 % that day. “We want the government to stick to the CPO tax-duty structure as it is,” said Mohammad Jaaffar Ahmad, chief executive officer of the Palm Oil Refiners Association of Malaysia. “The export numbers will go up, but the composition is more CPO than processed palm oil. At the end of the day, we’ll end up being a CPO exporter rather than a processed palm oil exporter.” Surging Stockpiles. Stockpiles in Malaysia climbed 1.8 % to 2.09 million tons in September, the highest level since March 2013, according to data from the country’s palm board. Exports surged 13 % to 1.63 million tons last month. The oil is used in foods, cosmetics and biofuels. Indonesia’s tax on crude palm exports may remain at zero as prices are still low, Bayu Krisnamurthi, deputy trade minister, told reporters in Jakarta on Oct. 10. The country sets the monthly tariff according to a formula based on average prices in Jakarta, Rotterdam and Kuala Lumpur. Crude shipments attract no tax if the average rate is $750 or less over a four-week period. Palm slumped this year amid forecasts for a bumper global crop of soybeans, which can be crushed to yield an alternative oil. U.S. farmers will harvest a record 3.927 billion bushels this year, compared with 3.913 billion estimated in September and last year’s 3.358 billion, the U.S. Department of Agriculture said Oct. 10. Worldwide inventories before the start of the 2015 Northern Hemisphere harvests will rise to a record. Soybeans in Chicago dropped 28 % this year to $9.2725 a bushel, while soybean oil lost 17 % to 32.63 cents a pound. Palm oil’s discount to soybean oil was at $52.42 a ton today compared with an average of about $244 a ton last year, according to data compiled by Bloomberg. Bloomberg