Archived Posts

News Flash: September 18, 2014

INDUSTRY

Ag bracing for railroad delays as record harvest looms

A few months after fields were harvested in 2013, the Corn Belt experienced a brutal winter. Competing demands between coal, oil, grain and other commodities for space on the country’s clogged rail network left companies such as Canadian Pacific Railway and BNSF Railway struggling to move rail cars around the region. Shippers across the region, accustomed to timely arrivals of hopper cars — saw deliveries last winter fall behind, with rail car backlogs swelling to more than three months at their peak. As a result, purchases  were delayed due to lack of storage space in elevators, leaving farmers to hold onto crops longer than expected. The cost to ship grain by rail soared, and farmers received less money for their products. As farmers prepare for this year’s harvest, agriculture shippers have dramatically lowered their expectations for the railroads. Farmers, ethanol and other producers in the Corn Belt fear that residual delays plaguing the freight system will worsen as farmers harvest record corn and soybean crops this fall. Shippers in the state are preparing for another winter of rail challenges, and many have taken steps to minimize disruptions by adding more storage to hold grains and oilseeds and transporting more commodities by truck. Sioux Falls Argus Leader (SD)

USDA Approves New Modified Corn, Soybean Seeds

The USDA has approved the use of genetically modified corn and soybean seeds that are resistant to a popular weed killer. However, farmers won’t be able to take full advantage of the seeds until the Environmental Protection Agency issues a second ruling allowing the use of Enlist, a new version of the 2,4-D weed killer that’s been around for decades. The EPA has said it will rule this fall on Dow AgroSciences’ application to market the chemical. The agriculture industry has been anxiously awaiting the green light, as many weeds have become resistant to glyphosate, an herbicide commonly used on corn and soybeans. Herbicide-resistant seeds introduced in the 1990s allowed farmers to spray fields after their plants emerged, killing the weeds but leaving crops unharmed. The USDA has said that if both the seeds and herbicide are approved, the use of 2,4-D could increase by an estimated 200 percent to 600 percent by the year 2020.While the USDA only oversees the safety of the plants, the EPA oversees the safety of the herbicide for human and environmental health. The agency already has found the chemical safe for the public and agricultural workers. The department yesterday advised that it had decided to approve the seeds in an online posting. Dow says the new version has been re-engineered to solve potential problems, like drift before and after the herbicide hits the plant. Associated Press

 

SOYBEAN

Larger soybean supplies lead to lower prices

The USDA increased the size of the 2014 U.S. soybean crop in their Sept. 11 Crop Production report. Soybean production is now forecast at a record 3.91 billion bushels, with a record average yield of 46.6 bushels per acre. Large crops offer bargain prices for end users and poorer prices for soybean producers 9.85, January at $9.92, March at $9.975, May at $10.04, July at $10.10 and August 2015 at $10.11 per bushel. Before the Crop Production report was released, the average trade guess was 3.882 billion bushels – 31 million bushels less than in the actual report. In the September World Agricultural Supply and Demand Estimates report, the 2014 soybean carryout was forecast at 475 million bushels – up 45 million bushels from the August projection. Crushings were increased to 1.77 billion bushels – up 15 million bushels from the August report, and exports were increased to 1.7 billion bushels – an increase of 25 million bushels. Demand has not kept up with an increasing supply, though. The USDA now forecasts an average farm gate soybean price of $9-$11 per bushel. The market has kept a close eye on the potential of frost in mid-September that could damage northern soybeans. As of Sept. 7, 12 percent of the soybean crop was dropping leaves, compared with the five-year average of 17 percent. The soybean crop was rated 72 percent good to excellent, 22 percent fair and 6 percent poor to very poor. U.S. farmers have raised a high quality and good yielding soybean crop in 2014 and all that remains is harvesting, storing or selling it. Farm & Ranch Guide

 

CORN

Corn eases for 2nd day on supply pressure, dollar strength

US corn lost more ground on Thursday to hover near a contract low. Soybeans rose for a second consecutive session as bargain buying by end-users and threat of frost damage underpinned the market. US processors and elevators are preparing to be overwhelmed with a massive surge of both corn and soybeans after fields dry out. The soybean market is finding some support from the threat of frost damage, although expectations of a record crop capped gains. Officials from the USDA and China’s quality watchdog failed in talks last week to settle a dispute over testing for genetically modified content in corn by-product distiller’s dried grains (DDGs), two industry sources said. Chinese imports of US soybeans could plunge by as much as a quarter in the crop year that began this month after processing margins in the country fell to their lowest level in two years, industry sources reported. Reuters

 

PALM

Malaysia hopes to double palm oil production by 2020

Malaysia hopes to double its palm oil production by 2020 without having to dedicate more land to palm plants, according to a Malaysian minister. This objective was part of Malaysia’s economic transformation program, which aimed at achieving high income status, comparable to Western countries. Kalanithi Nesaretnam of the Malaysian Palm Oil Board believes there is a demand for significantly increased production of palm oil. “In 2013 the demand overtook the supply. Currently there are seven billion people in the world and we believe that by 2030 there will be nine billion so there is a place for all vegetable oils to increase the production so that we can keep up with the demand.” Food Navigator

Palm prices must ease to cope with bumper edible oil supplies

Palm oil prices should ease towards 1,900 ringgit ($594) over the next few weeks in order to stay competitive and recapture market share from rival vegetable oils, leading analyst Dorab Mistry said on Monday, as prospects of bigger supplies loom. Reuters

CANOLA

Oilseed rape set for lowest area in four years

The UK winter oilseed rape area is set for a significant drop this season amid falling prices, enforced rotational changes and pest attack. After a record high in autumn 2012 of 756,000ha, the area dropped about 6% after a difficult growing season and late cereal harvest for 2013. That trend may continue, with experts predicting the 2014 crop could shrink by between 5-15%, taking plantings below 700,000ha for the first time since 2010 Farmers Weekly (UK)