Archived Posts

News Flash: September 25, 2014

INDUSTRY

U.S. weekly outlook – Monitoring corn and soybean consumption

The corn and soybean markets appear to be expecting the USDA’s already very large U.S. production forecasts to be increased in the October 10 Crop Production report, said University of Illinois agricultural economist Darrel Good. “Larger crop expectations stem from expectations for higher yield forecasts, with some disagreement about the prospects for changes in acreage estimates. The implication of large crops for the magnitude of year-ending stocks obviously depends on the consumption response,” he noted. SeedQuest

World production of 10 major oilseeds is forecast to climb

World production of 10 major oilseeds is forecast to climb 4.3 % in 2014-15 to a record, with the outlook for soybeans raised on increased estimates for the U.S. and Brazil, Oil World said. Oilseed output may rise to 519.7 million metric tons from 498.2 million tons in 2013-14, the researcher wrote. The outlook was raised by 3.7 million tons from a previous forecast, Oil World said. Soybean futures have slumped 29 % in Chicago in the past 12 months, the worst performance on the Bloomberg Commodity Index, amid expectations for record production in the U.S. Bloomberg

Oil Clogging U.S. Railways Seen Limiting Exports of Grain

Shipping companies could miss out on exports from the record U.S. grain harvest because the shale-oil boom is clogging up rail lines to ports. While the U.S. will reap the most crops ever, fourth-quarter export cargoes will be 15 % lower than last year. Rates for Panamaxes, the most commonly used vessels for grains, averaged $7,574 a day this year, headed for the lowest level since at least 1999.The U.S. shale-oil boom means energy shipments are dominating rail networks at the expense of grains. The Association of American Railroads says crude moved by rail almost doubled last year. The bottlenecks may persist because the Energy Department is predicting the most oil output in 45 years in 2015. “If you’re an owner, you’re banking on a bumper season of exports,” Erik Nikolai Stavseth, an analyst at Arctic Securities ASA in Oslo, whose recommendations on ship owners returned 22 % in the past year. “The fact you see a situation where grains don’t come to the port: that’s a negative surprise for the shipping market.” Fourth-quarter freight swaps that traders use to bet on future rates fell 17 % to about $9,215 a day this month, below the $11,000 that Platou estimates they need to break even. The largest publicly traded Panamax owner is Tianjin, China-based China Cosco, which has 69 in its fleet, Clarkson Plc data show. The company ships the most cargoes from the Gulf of Mexico, according to vessel-tracking data compiled by Bloomberg. While Panamaxes are getting fewer U.S. grain cargoes, demand is rising for tankers exporting diesel, gasoline and other fuels. Bloomberg

 

SOYBEAN

Discovering genes that control oil and protein in soybeans

To understand the genes affecting soybean seed composition, University of Minnesota researchers have been analyzing and identifying soybean genes. The research has been funded by the Minnesota Soybean Research and Promotion Council. “Some of our more basic research is looking at genes that are involved in the ‘regulation’ of protein and oil in soybeans,” said Jim Orf, soybean breeder at the University of Minnesota. “There are a number of biochemical pathways that are involved in producing both the protein and the oil. We’ve identified six potential genes that may be involved in this regulation in one form or another,” he continued. “Our goals have been to look at genes to see if we can increase the amount of that particular chemical or reduce the amount a chemical produced by the genes so that we can determine how it effects the composition of the soybean seed” Farm & Ranch Guide

Soybeans Fall to Four-Year Low as Weather Buoys Outlook

Soybean futures fell to a four-year low as favorable weather aids farmers in gathering a crop forecast at the largest ever in the U.S., the world’s top grower. Corn and wheat declined. Warm, dry Midwest conditions in the next five days should help maturing crops and harvesting. The Department of Agriculture estimates soybean output this year will rise 19 % to 3.913 billion bushels from 2013. Farmers collected 3 % of the oilseeds as of Sept. 21, down from an average of 8 % in the prior five years, according to the USDA. “The very favorable weather outlook over the next five to seven days is pushing the idea that we’ll see some meaningful harvest progress between now and next week,” Greg Grow, the director of agribusiness for Archer Financial Services Inc. in Chicago, said in an interview. “The demand is coming at these prices, but the supply is looming extremely large.” Soybean futures for November delivery dropped 1.5 % to close at $9.2275 a bushel at 1:15 p.m. on the Chicago Board of Trade. Earlier, the price touched $9.2225, the lowest since July 7, 2010. Trading was 33 % above the 100-day average for this time, data compiled by Bloomberg show. The USDA today reported net export sales of 2.57 million metric tons of soybeans in the week ended Sept. 18, up from 1.47 million a week earlier. Corn and wheat also rose. Wheat futures for December delivery slumped 1.3 % to $4.74. The price touched $4.6625, the lowest since June 30, 2010. Today, the International Grains Council raised its outlook for world production in 2014-15 by 0.6 % to a record 717 million tons on gains in Europe and Ukraine. Corn futures for December delivery fell 1.1 % to $3.26 a bushel. On Sept. 23, the grain touched $3.2475, the lowest since June 29, 2010. This year, soybeans have tumbled 29 %, and corn has slumped 23 %. Bloomberg

 

PALM

Palm Oil Imports by India Seen Surging to Record as Prices Slump

Palm oil shipments by India, the world’s biggest buyer, will climb to a record this year as tumbling prices and zero-tax on exports from Malaysia make the oil attractive to refiners. Inbound shipments may increase to 9 million metric tons in the year ending October 31, more than the 8 million tons estimated in July. Bloomberg

 

BIOFUEL

Plant variants point the way to improved biofuel production

Manufacturing biofuels from food crop by-products such as straw could be made quicker and cheaper thanks to the work of scientists in the UK and France. Researchers funded by the Biotechnology and Biological Sciences Research Council (BBSRC) have discovered variant straw plants whose cell walls are more easily broken down to make biofuels, but which are not significantly smaller or weaker than regular plants. The discovery could help ease pressure on global food security as biofuels from non-food crops become easier and cheaper to make. SeedQuest