Christine's Feed
May 5, 2010

CME asks CFTC to clear 12 new ag swap contracts

CHICAGO, May 5 (Reuters) – The CME Group <CME.O>, the
world’s largest futures exchange, said Wednesday it submitted a
request to the Commodity Futures Trading Commission to provide
clearing services for 12 agricultural over-the-counter swap

The exchange-cleared swaps will include corn, wheat,
soybeans, soyoil, soymeal, live cattle and lean hogs.

May 3, 2010

U.S. farm managers buoyed by Baby Boom, land values

OMAHA, Nebraska (Reuters) – Jim Farrell doesn’t look like a typical tractor-driving farmer. But he doesn’t look like a Wall Street titan, either. Maybe he’s a little of both.

Relaxing in his suburban office nestled in the agricultural U.S. heartland, Farrell sketches his job as the single largest professional manager of farms in the United States.

Apr 29, 2010

Saudia Arabia eyes U.S. for ag investing, contracts

CHICAGO, April 29 (Reuters) – Saudi Arabian investors are
looking to expand their agricultural investments in the United
States to secure long-term food supply because of water
shortages in the desert kingdom, Saudi officials said on

Investments could range from buying crop land, obtaining
long-term land leases of 30 years or more, taking equity stakes
in major food companies or contracting directly with farmers to
grow crops, they said.

Apr 13, 2010

Cargill profits more than double; broad growth

CHICAGO (Reuters) – U.S. agribusiness and trading giant Cargill Inc <CARG.UL> said on Tuesday quarterly earnings more than doubled, with all five of its business segments posting improved results from a year ago.

Minneapolis-based Cargill reported earnings from continuing operations of $729 million for the third quarter that ended February 28. The company also realized a $169 million net gain from discontinued operations due to the sale of its Brazilian poultry and pork business.

Mar 25, 2010

Landlocked traders fight for flying fish

MINNEAPOLIS (Reuters) – A quiet street in an American city a thousand of miles from the nearest ocean is an unlikely battleground in the world’s fish trade.

But that is exactly what Brent Casper likes about it.

“People think you throw a line in the lake and pull up a walleye in Minnesota. But the majority of what we buy is being shopped for aggressively by all the countries of the world,” said Casper, who founded his trading company, The Fish Guys, here in 1993 to buy and sell wholesale seafood.

Mar 24, 2010

US farm credit standards seen tight in 2010

CHICAGO, March 24 (Reuters) – U.S. commercial banks are
keeping credit standards elevated for farmers wanting loans to
grow crops and raise livestock this year after loan repayment
worsened in 2009 and delinquency rates rose, the Kansas City
Federal Reserve said on Wednesday.

The government’s outlook for farm income to rebound in 2010
should improve farmers’ access to credit as the year
progresses, the Fed said. The exception will be big livestock
operations burdened with heavy debt after a disastrous 2009.

Mar 16, 2010

Bigger U.S. corn acreage seen this year

CHICAGO (Reuters) – U.S. farmers, encouraged by lower fertilizer costs, will plant more acres to corn this spring than a year ago, while soy seedings will remain around the same as in 2009, grain analysts told the Reuters Food and Agriculture Summit in Chicago on Tuesday.

U.S. 2010 corn plantings were projected at 89.3 million to 91 million acres and soybeans at 76.5 million to 78.7 million acres. Last year, U.S. farmers produced record corn and soybean crops based on planted acreage of 86.5 million corn acres and 77.5 million soy acres.

Mar 15, 2010

Corn quality has not hurt Cargill food products

CHICAGO (Reuters) – Low-quality corn from last year’s wet U.S. harvest has not affected Cargill’s food products and the quality of corn arriving this spring was not deteriorating compared with last autumn, the head of Cargill North American corn milling said on Monday.

“There were some quality issues but none of which has any impact whatsoever on our food products. So the food products we are producing are 100 percent safe,” Alan Willits said at the Reuters Food and Agriculture Summit in Chicago.

Feb 12, 2010

U.S. Plains farmland values firmed up at end-2009

CHICAGO, Feb 12 (Reuters) – Farmland values in the U.S.
central Plains rose 2 percent in the fourth quarter of 2009 as
crop prices climbed while ranchland values fell with livestock
markets, the Federal Reserve Bank of Kansas City said Friday.

The Fed’s tenth district is a leading U.S. producer of
cattle and wheat, corn and other top row crops. It stretches
across Colorado, Kansas, Nebraska, Oklahoma, Wyoming and parts
of New Mexico and Missouri. So land values, the main collateral
for most farm loans, are widely watched as an economic gauge.

Nov 22, 2009
via Commodity Corner

CBOT fund-led wheat rally another Wall Street hurdle for grain exporters?


                                                    The weakest U.S. dollar in 15 months along with ample American wheat supplies should be spurring strong U.S. wheat exports this season. But the United States, typically the world’s largest wheat exporter every year, is seeing exports of that grain down 30 percent from a year ago as many big overseas buyers source wheat from cheaper suppliers, namely Russia, France and Germany.  What’s more, nearby Chicago Board of Trade wheat futures prices have jumped nearly 25 percent since October 1, ignoring the weak exports, weak domestic cash basis and ample stocks of wheat on hand.The economics of wheat supply and demand don’t seem to be adding up. What gives? Some grain traders and analysts who study the CBOT wheat market think the latest price action in wheat may just be another symptom of the malaise grain traders have complained about with “convergence.” A chorus of protests by grain users like the National Grain and Feed Association for two years have blamed “Wall Street Index Funds” for buying grains — particularly, CBOT wheat — en masse and far beyond what is merited by basic grain market fundamentals. The price inflation has caused a persistent disconnect, they say, between CBOT wheat and real-world prices and essentially ruined CBOT as a reliable hedging market for grain firms because the inflated CBOT wheat futures prices no longer “converge” with cash markets in delivery periods. Now, some traders wonder if the same fund-driven demand for CBOT wheat contracts is pricing U.S. wheat out of the world export market at a time fundamentals should be letting it compete. Egypt’s main government wheat buyer, for example, has passed on U.S. wheat in its last six snap tenders. The most recent snub occurred this past week when it bought cheaper French, Russian and German supplies. Egypt has long been the single biggest buyer of U.S. soft red winter wheat, the CBOT par delivery grade. U.S. wheat shipped from the Gulf of Mexico this marketing season has been running roughly $25 to $35 per tonne higher than the wheat from the Black Sea region or France, exporters say. Freight is also more expensive. ”What worsened the situation in just in the last week or two is we’ve seen U.S. wheat futures escalate 60, 70, 80 cents despite a weak fundamental outlook, basically on fund buying,” said Mike Krueger, senior analyst for World Perspectives, who also runs a grain advisory service in Fargo, North Dakota. “Funds of all types, index and hedge funds whatever you want to call them, have simply been buying wheat and that drove markets sharply higher.”  Weekly trader commitments data issued on Friday afternoon from the Commodity Futures Trading Commission confirmed the trend.Index funds — funds which by their nature only hold a long position — were shown to be holding almost half (47 percent) of all the total long open interest in CBOT wheat as of Tuesday, Nov. 17. Managed funds — speculators which hold both long and short positions based on daily market trends — were also buyers, reducing their net short position in CBOT wheat by 10,300 contracts in the same period. But these big players remained net sellers in the wheat market as a group. So it all adds up to what? For starters, probably a more critical eye once again from the CFTC, which has been holding public hearings since the summer under its reform-minded chairman Gary Gensler seeking a solution to the convergence issue as a way to restore the CBOT’s role as a hedging market. Few are happy with the “convergence” solutions proposed so far by the CME, including the most recent one — still under consideration — of tinkering further with wheat storage fees at elevators. CME — dependent on volume to remain the dominant market for world wheat speculators — continues to try to please all players, from Wall Street to Main Street.  But it may be only a matter of time before U.S. wheat exporters as a group — all of whom are members of the influential NGFA — come to CFTC and blame Wall Street’s financial engineers for sabotaging the world’s top wheat exporter.

    • About Christine

      "As community editor for Thomson Reuters global on-line chatroom for grains traders and analysts, the Global Ags Forum, I lead chats on the latest factors driving grains and oilseeds markets worldwide, organize chat events with expert industry sources and promote the room to potential market players. Based in Chicago, I also report on U.S. cash and futures grains and oilseeds markets."
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