Christine's Feed
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.

Nov 16, 2009
via Commodity Corner

Weather, dollar likely to keep grains in recent ranges at harvest


If this week in Chicago Board of Trade grains is anything like the last couple, traders can expect plenty of volatility — lots of sound and fury — but with prices likely to stay in recent ranges.    ”This really isn’t a trending kind of market,” said senior analyst Anne Frick with Prudential Bache Commodities.    Mother Nature and the dollar have had the biggest impact on grain prices this autumn. That looks set to continue. Analysts say those two uncertain and thus supportive price factors, countered by rising supplies of harvested grain, will tend to restrain “spikes” either way. Day-to-day moves on the other hand, are still seen as being more dictated by buy/sell trigger points on price charts and by speculative money flows.     Despite a steady to lower close in CBOT corn and soybeans on Friday, both closed higher on the week as did wheat. So some bullish technical indicators remain in place, analysts said. Fundamentals — huge U.S. harvests now under way — should be weighing on corn and beans. But U.S. farmers are struggling to wrap up the harvest. A soggy October has put them about four weeks behind on corn and, traders say, sowed seeds of doubt in the markets’ mind about final crop yields and quality.     Farmers finally saw some ideal harvest weather in November — warm, sunny days that allowed them to work all day and night to harvest and dry rain-soaked crops. But their luck may be running out. Rains are now forecast to return to the U.S. Corn Belt by Tuesday or Wednesday.     That is especially bad news for corn, as only about half the projected 13-billion bushel crop is expected to be off the field by Sunday, traders said. By contrast, they estimate soy harvest will be reported 90 percent complete when weekly crop progress updates are issued by the U.S. Department of Agriculture on Monday afternoon.    ARGENTINA DRYNESS STRIKES A NERVE ”No doubt for corn: weather is at the top of the list. And weather in South America for beans,” analyst Brian Basting with brokerage Advance Trading said, referring to concerns starting to surface about dryness in Argentina’s fields.     The world’s No. 3 soy producer is in the midst of planting its next soybean crop. Although it is too early in the season to get excited about the dryness and potential threat to yields, traders are hyper-sensitive to conditions in Argentina after a drought last season drastically reduced that important crop. The No. 1 concern now, traders noted, is in Cordoba, a top soy region in central Argentina.    Underscoring the current range-bound market mentality in grains, however, traders said any rallies in Chicago soybeans would likely be met by South American sales to price their new crop. That action was already detected on Friday.    ”Once beans got above $10 in the March contract, we saw hedge sales out of South America,” said one CBOT floor broker with commercial grain clients.    Also, USDA on Nov. 11, repeated its rosy outlook for South America’s coming soy crops. It boosted the estimate of Brazil’s crop by 1 million tonnes to a record 63 million and raised its Argentine soy estimate 500,000 tonnes to 53 million. The U.S. crop this year equates to 90.3 million tonnes.     Aside from weather-related harvest news, the U.S. dollar will also remain a major influence on commodity prices. Generally, the two move inversely. A weak dollar lowers the price of U.S. grain exports for overseas buyers and attracts investorswho buy commodities as a hedge against inflation.In recent months on days when the U.S. dollar was weak, corn futures rose 72 percent of the time, David Hightower of the Hightower Report told a CME grains panel last week.    Traders are also keeping a close eye on December corn options, which expire on Friday. Large open interest in the December $4 options is expected to act like a price magnet.  Photo: Northern Illinois corn field  taken Nov. 8 by Christine Stebbins

    • 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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