CHICAGO, Oct 20 (Reuters) – Frustrated wheat traders who
say the Chicago Board of Trade soft red winter wheat contract
is no longer an effective hedging tool appear to be testing the
waters in a new market — the Minneapolis Grain Exchange.
Open interest in the MGE’s long-dormant, cash-settled Soft
Red Winter Wheat Index (SRWI) futures has exploded over the
last three weeks — jumping from zero on Sept. 25 to 1,258
contracts as of Oct. 16.
DES MOINES, Iowa (Reuters) – Agribusiness leaders are stepping up investment and technology to tackle world hunger and climate problems tied to agriculture, but they see no quick solution to hunger, which kills 25,000 people a day around the world.
“I’m not much of magic bullet guy and I really do believe in a multiplicity of approaches,” Mark Cackler, who overseas rural poverty and agriculture programs for The World Bank, said in an interview at the World Food Prize forum on Friday.
DES MOINES, Iowa, Oct 15 (Reuters) – The U.S. Agriculture Department hopes to secure 10 percent of the funding for the new U.S. global hunger and food security initiative to put into agricultural research, USDA chief Tom Vilsack said on Thursday.
Congress has not yet finalized appropriations for the plan for fiscal 2010 but is discussing a range of $1 billion to $1.2 billion to be spent on agricultural development, Vilsack said in an interview.
"Our view is initially 10 percent of that ought to be considered for research," Vilsack told Reuters on the sidelines of the World Food Prize forum, noting the U.S. government continues to discuss how to implement the plan.
The Obama administration has said agricultural development will play a big role in its foreign policy.
The administration wants to spend as much as $3.5 billion over three years to help small farmers in poor countries grow more crops to reduce hunger and improve local economies.
The USDA will use its expertise in agricultural research and training to help with the project, Vilsack said.
The State Department, which is leading the initiative, has not yet determined how it will allocate the funding once Congress appropriates it, he said.
Decisions about the research projects will be made in concert with developing countries trying to raise small farmers’ yields, he said.
"It is not a top-down, heavy-handed approach. It is not, ‘Here’s our food, be grateful.’ It is, ‘We want to help, but we need to know from you what help you need,’" Vilsack said. (Editing by Steve Orlofsky)
DES MOINES, Iowa (Reuters) – The fight to end hunger is being hurt by environmentalists who insist that genetically modified crops cannot be used in Africa, Bill Gates, the billionaire founder of software giant Microsoft, said on Thursday.
Gates said GMO crops, fertilizer and chemicals are important tools — although not the only tools — to help small farms in Africa boost production.
DES MOINES (Reuters) – The long-term goal for the biofuels industry will be to use nonfood sources for raw materials rather than grains, but to reach that goal industry must build on and not abandon current technology, biofuels giant Archer Daniels Midland said on Wednesday.
“My belief is agriculture can contribute to both — both higher food production and these other elements of the food chain that contribute to other ingredients in our daily life including fuels,” ADM Chairman and Chief Executive Officer Patricia Woertz told reporters at the World Food Prize forum.
DES MOINES, Iowa, Oct 13 (Reuters) – Researchers and others
who seek to alleviate hunger by boosting farmers’ productivity
will gather this week in the heart of the U.S Corn Belt to
focus on the political risks when people don’t have enough to
Last year, fears of food shortages gripped grain markets,
sending wheat and rice prices soaring to record highs and
sparking hoarding and riots.
At this time of year there is generally a bearish sentiment in Chicago grain markets due to the onset of the U.S. harvest, a world bellwether for supply. That is particularly true this autumn as evidence mounts that U.S. farmers will harvest not only their largest soybean crop in history, as the government is currently forecasting, but perhaps a record-large corn crop as well. USDA’s next crop estimates will be issued on Friday. ”It’s going to be a biggie — the big dominant feature. Where do you want to place your bets heading into those numbers?” said Dan Basse, president of AgResource, a Chicago-based ag markets consultant. Last month, the U.S. Department of Agriculture forecast a 2009 U.S. corn crop at 12.954 billion bushels, with an average yield of 161.9 bushels per acre, and soybean production at 3.245 billion bushels, yielding 42.3 bpa. The record for the U.S. corn crop is 13.074 billion bushels in 2007, and for soybeans, the 3.197 billion bushels reaped in 2006. Two closely watched research firms updated their forecasts last week, with brokerage FC Stone of Des Moines, Iowa, and consultant Informa Economics in Memphis both expecting USDA to boost its crop estimates this Friday. ”With the private survey guys all showing higher corn and bean production, you’ve got a negative yield psychology all week going into the report,” said Dan Cekander, a grains market analyst at brokerage Newedge USA in Chicago. That sentiment hit CBOT markets hard on Friday, especially soybeans, which fell below $9 a bushel to a 6-1/2-month low. Sobering U.S. jobs data issued by the U.S. Labor Department on Friday added to bearish sentiment and worries about a recovery in the economy. Employers cut 236,000 jobs in September, far more than the 180,000 that had been expected. MOTHER NATURE NOT HELPING It is an adage at the Chicago Board of Trade that “big crops get bigger” once the late stages of maturity are reached and corn kernels and soybean pods make a final “fill.” But if there is anything injecting caution to all the bears in the grain markets at the moment, it is the weather. That factor will remain in play as a possible brake on CBOT price weakness the coming week. The Midwest harvest is already running a couple of weeks behind given crop immaturity. But recent rains and forecasts are not likely to to give farmers a bigger harvest window in the coming week. ”It’s pretty much a supply watch,” Basse said. “When will Mother Nature allow for a combine to roll freely and for the cash markets to be resupplied?” Most traders expect export announcements to be limited, notably for soybeans with top buyer China on vacation until late in the week. China markets reopen on Oct. 9,following National Day holidays. WHEAT STRUGGLESWheat continues to struggle with large U.S. and global stocks and slid to new life-of-contract lows on Friday. But the biggest shake-up in wheat came in the spreads, the price differences between futures of various contract months. These differentials jumped and fell violently — and expensively — for speculators as the grain industry, the CBOT and its regulator the Commodity Futures Trading Commission traded ideas back and forth about the best way to improve the hedging performance of the troubled CBOT wheat market. The trigger to the violent moves were competing proposals on the timing of when to adjust storage fees for wheat at CBOT- approved grain elevators. Some shell-shocked spread traders were threatening to file lawsuits by the end of the week. For the week, the CBOT December wheat fell nearly 2 percent to $4.41-1/4. Benchmark November soybeans fell 4 percent to $8.85 a bushel. December corn was near unchanged at $3.33-1/2.PHOTO: Soybean field near Ames, Iowa, taken Sept. 26 by Christine Stebbins. High pod counts have many expecting a huge U.S. harvest.
U.S. grain markets look to be headed for another week of sideways moves with a lower bias as world grain buyers watch harvest progress of a likely record large American soybean crop and second-largest corn crop. So barring any unusual harvest-time surprises, grain traders will be taking their cue from U.S. weather forecasts. ”Outside of that there isn’t much,” Randy Mittelstaedt, an analyst with R.J. O’Brien, said. “We’re just keeping within ranges until there is more clarity. The new production report next month will help.” The U.S. Department of Agriculture will update U.S. crop yield estimates, production and supply-demand outlooks Oct. 9. USDA already forecast record corn yields and record soybean output in its monthly report issued on Sept. 11. But meeting those lofty targets is still a question of weather over the next few weeks as crops finish maturing and combines roll. Delayed planting this year put crops behind from the start, and crop-watchers are not yet ready to bless the bin-busting forecasts on concerns about a possible sudden “killing” frost that could cut off final growth of corn and soybeans. ”The latest National Agricultural Statistics Service Crop Progress report released Sept. 21 showed that 60 percent of the U.S. soybean crop was still vulnerable to freeze damage and only 21 percent of the corn crop was mature,” Mike Woolverton, a Kansas State University economist, said in his weekly newsletter on Friday. “The greatest lags are in the states most likely to experience frost.” So frost fears will remain a daily factor. But for some traders the main weather story is shifting focus to harvest conditions, with rain clouds threatening speedy progress. Rains, especially in the far southern edge of the Midwestern Corn Belt where crops are the ripest, have stalled an aggressive early start to harvesting. Further north the crops are still behind. A balmy September has helped speed up maturation, but crops are still lagging. For the coming week, agricultural meteorologist Mike Palmerino at DTN Meteorlogix, said on Friday that the first half looks dry, but storms may move in by the weekend. ”I’ll be looking to see if there is rain causing harvest delays, which I think is going to be important for the basis levels,” Anne Frick, an oilseed analyst with Prudential Bache Commodities said, referring to cash market bids by processors and exporters struggling with a 32-year low in U.S. soy stocks. “The question now is getting the crop into usage channels,” Frick said. “Rainfall is the key factor to watch for (this) week.” U.S. cash markets — always volatile before the harvest replenishes stockpiles — reacted violently to harvest delays on Friday, as cash basis bids shot up as much as 55 cents at key Midwest soybean processing plants. The corn market, which has nothing like the current supply tightness in soybeans, is still on a hair-trigger due to fears of a killing frost and weather delays or damage at harvest. Last week, corn looked set for a test of contract lows near $3 a bushel as price charts appeared weak. But prices shot up on Tuesday with a frost threat and that nervousness remains. Also in the spotlight this week will be USDA’s quarterly grain stocks report and annual small-grains summary on Wednesday, which will include USDA’s 2009 wheat harvest data. On average, analysts expect the Sept. 1 stocks report to show bigger corn and wheat supplies than a year go amid a slowdown in demand while soy stocks remain extremely tight. ”Typically the stocks report isn’t a big mover or shaker,” said Don Roose, an analyst with U.S. Commodities in West Des Moines, Iowa. “More important is going to be that October report because we usually have an adjustment on acres for corn and beans.” Last week, the benchmark CBOT November soybean contract <SX9> fell 1.5 percent to $9.26 a bushel. December CBOT corn <CZ9> ended 5 percent higher at $3.34 while December CBOT wheat <WZ9> fell 1.5 percent to $4.49-3/4.Photo: Northern Illinois soybean field taken Sept. 19 by Christine Stebbins