World Farming Agriculture Commodity news - Weekly Updated - Exclusive and very popular -
The S&P GSCI Agriculture Index has increased 2% in April, despite US dollar strength (+0.8%). For softs, the monstrous rallies in arabica (+20.4%), robusta (+23.5%), and London cocoa (+18.4%) offset losses in sugar (-14.2%). ICE Robusta rallied as recent and forecast dry weather in Vietnam raised additional concerns on top of already low stocks and the Red Sea crisis. The ICE Arabica rally seems to be largely driven by robusta’s improvement and exacerbated by fund buying. Cocoa had another impressive month amid stable Q1 grind data. For grains and oilseeds, CBOT Wheat rallied 7.3% as Russian attacks on the port of Odessa and weather concerns in Europe pushed prices higher. Corn (+0.7%) saw US acreage cuts and Argentine leafhopper disease, while soybeans witnessed a 2.3% decline amid rising US acreage. CBOT Soy Oil weakened on the back of concerns about vegetable oil demand and strong US crush, which encouraged heavy short sales.
The food and drink services industry can be broadly defined as the process of preparing, presenting, and serving food and drink to customers. It incorporates many different sectors, including quick service and causal dining restaurants, full service restaurants, cafes and coffee shops, bars, clubs, nightclubs, catering services, canteens, and more. Additionally, these individual sectors are subject to different trends, one example that is relevant to all of them is the rise of digitization and the online market. However, trend topics can also be more specific, for example, the demand for ethically sourced coffee in cafes and coffeeshops. New trends will continue to transform the outlook of this industry, the most notable of which being the coronavirus pandemic which is predicted to change food and drink services for years to come.
The European Commission cut its forecast for the 2024 European Union wheat crop to a four-year low amid a projected bigger decline in planted area than previously expected. The commission now forecasts EU wheat production at 120.2 MMT, down 600,000 MT from its initial outlook. That would be the smallest wheat crop since 2020. Despite the lower output, the commission raised its 2024-25 wheat ending stocks forecast by 500,000 MT to 20.4 MMT, due to an increase in expected imports. It left the 2024-25 EU wheat export forecast at 31 MMT, which would be unchanged from its outlook for this year.
Grains end mixed Friday but higher for the week led by wheat. Darren Frye, Water Street Solutions, says the wheat market has been rallying on U.S. and global weather and crop concerns.
Frye says a lot will depend on the weather and there is rain the forecast for the Western and Southern Plains. "If we get that we could see Kansas City wheat down harder than Chicago, but the strength really came from the fact that we haven't had the rain yet," he says.
If those rains are disappointing and crop ratings for winter wheat drop again on the Monday USDA Crop Progress Report the market may need to take the next leg higher.
The move in wheat has also been technical so are the funds about done covering their short position or will they continue to buy?
All three classes of wheat are above their 100 day moving averages and Fyre says, "Yeah I would think that the speculators are a little bit nervous considering how far we moved off the bottom but as of last week they hadn't covered a whole lot. The funds have made a lot of money in wheat, they've been short a long time and so I wouldn't expect them to bale quickly."
Corn has been moving higher with wheat but is just on the top end of its sideways trading range. Frye doesn't think corn can take out those chart areas and keep moving higher even if wheat keeps climbing. "I think it's going to take USDA to recognize a different size crop in Brazil and Argentina. I think the market needs to see that. In addition, I think we're going to need some planting delays and it's way too early for that."
Soybeans have also consolidated under the highs set back on the day of the USDA Prospective Plantings Report and may not be able to retest those areas with the weak export pace. "We also need to get bean oil on board which is hanging out at its lows. We also need to see Conab and USDA estimates come together on Brazil. Without direction that market will continue to drift and see fund selling with the funds still short," he says.
Live and feeder cattle futures made new highs for the move on Friday helped by stronger cash. "The cash came along on Thursday and scored a big reversal and saw follow through Friday," he says. Can cattle continue to move higher? Frye says technically the market is looking strong but it is end of the month so he is watching for some profit taking as a result.
World Farming Agriculture and Commodity news - Short update - 3rd Week APRIL 2024
About one in five samples of commercial milk in the US tested positive for traces of avian influenza in a national survey, with a greater proportion coming from areas with infected herds, Reuters reported, citing the US Food and Drug Administration (FDA) on Friday.
There is no evidence that the milk poses a danger or that a live virus is present, the regulator has said.
The FDA said late Thursday that additional testing is required to determine whether the intact pathogen is still present and if it remains infectious.
The agency said earlier this week that if the milk is heated to a specific temperature, it remains safe for human consumption as the process kills harmful bacteria and viruses.
Eight states in the US have confirmed cases of avian influenza in dairy cattle, according to the US Department of Agriculture.
Only one person - a Texas farm worker - has been one confirmed to have bird flu. The patient's only symptom was eye inflammation, according to the state's health department.
The world will be awash in soybeans in 2024-25, and that could be an anchor on canola prices, say analysts.
The International Grains Council is forecasting 75.4 million tonnes of global soybean carryout, excluding China.
That would be 13 per cent more than last year and 31 per cent above the previous five-year average.
“In the absence of any weather events, these heavy stocks are likely to keep pressure on soybean prices,” Helen Plant, senior analyst with the United Kingdom’s Agricultural and Horticulture Development Board, said in a recent grain market report.
“The extent of the impact on (canola) prices will depend on prospects for the 2024-25 (canola) crops.”
Canola/rapeseed planting is expected to be down 3.1 per cent in Canada and 3.6 per cent in the European Union, two regions that accounted for 44 per cent of global production of the crop last year.
Rich Nelson, chief strategist with Allendale Inc., agrees with the premise that global soybean stocks are on the rise unless there is some adverse weather event.
“It’s certainly part of why we’re seeing a lower price environment,” he said.
However, prices are probably not low enough, considering how heavy global stocks could be. The stocks outlook calls for a November futures prices of US$10.80 per bushel, but the price was about $1 higher than that as of April 24.
“I would caution, though, that’s kind of normal,” said Nelson.
“That’s what we do in spring and summer until we figure out what type of supplies we do have.”
It’s probably a rational approach for the market to take, considering there are valid weather concerns for the U.S. crop.
If the world transitions from an El Nino to a La Nina weather event, it could be dry in the western corn belt and western Plains in June-July-August and hot in the May-June-July period.
Commodities April 28
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