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USA -For the week March corn was 7 cents higher, January soybeans gained 4 ¼ cents, January soybean meal fell $4.50 per short ton, January soybean oil surged 123 points, March Soft Red Winter wheat was up 9 ¼ cents, March Hard Red Winter wheat gained 13 cents, March Hard Red Spring wheat tacked on 3 cents and January canola was up $34.50. The first full week of trading in December can be enlightening and Gulke Group president Jerry Gulke says this year is no exception, especially after the 2024 election. Last year the corn and soybean markets topped on Jan. 2 but at much higher levels than the current prices. He says a lot of negative news is already known today that was not known a year ago. The bulk of that news may already be priced in, including large ending stocks, plus election results and possible tariffs. Gulke believes most of the bearish news from the last three years is also priced in just looking at a weekly corn continuation chart from 2022 through 2024. “Price action on a three-year corn chart is daunting to say the least, but the next move in prices is likely to be established the end of 2024 and during the first quarter of 2025,” he says. Until corn prices can exceed and sustain a close above last fall highs of $4.35, he says a bull market may only be on farmer’s Christmas wish list.
U.S. prices may rise next year for avocados, strawberries and other fresh produce, and consumers could face shortages, if president-elect Donald Trump follows through on plans to slap tariffs on goods from Mexico and Canada, agricultural economists and industry executives say. Mexico and Canada are by far the top two suppliers of farm products to the United States, with imports of agricultural goods valued at nearly US$86 billion last year, according to U.S. Department of Agriculture and U.S. Customs data. Duties on their food shipments could cause jarring financial and operational ripple effects on U.S. supplies and highlight how reliant the nation has become on its neighbours for feeding its population, economists said. Trump said last week he would sign an executive order on his first day in office in January that would impose a 25 per cent tariff on all products coming into the United States from Canada and Mexico to curb the flow of illegal drugs and migrants into the U.S.
Winter wheat crops have deteriorated in Russia but are improving in the United States and the European Union. An estimated 37.2 per cent of Russia’s crop is rated in poor condition versus four per cent last year and the five-year average of 7.3 per cent. U.S. winter wheat drought expected to worsen -Prairie Wheat Weekly: Wheat, durum tack on modest increases .It is the worst rating in decades, according to SovEcon analyst Andrey Sizov. This year’s crop has a higher risk of winterkill because the plants are in a weakened state and higher odds of below-trend yields. “This is more or less in line with our expectations,” he said in an email. SovEcon is forecasting 81.6 million tonnes of Russian wheat production in 2025, which is below the local Russian analysts’ consensus of 84 to 86 million tonnes. “It seems that now the market is starting to think that our pessimistic estimate looks more reasonable,” said Sizov. SovEcon issued a special note for its clients a week ago stating that the wheat market will bottom out shortly and that there could be “substantially higher prices” within the next one to two months. Sizov believes that prediction is still relevant. “We published a similar note on Aug. 22. The market bottomed out two days later and December CBOT wheat rallied a dollar after that,” he said.
Australia
Wheat and barley: Global prices dropped as Russia’s export volume outweighs other countries and sets the price bar for another year. Internal pressures enhance its selling force in the market, and the recent use of unprecedented missiles against Ukraine did not spook the wheat market. Australian feed barley holds surprisingly well for such a large crop in 2024.
Canola: Volatile canola prices were experienced as profit-taking took over the market after hefty gains during the first half of November. The drop in prices is likely to be short-lived as market fundamentals have not changed, and different governments altered export and import duties to protect their markets from further rallies.
Dairy: There has been a shift in direction in China’s milk supply growth trajectory. With local farmgate milk prices near 10-year lows, this has triggered herd reductions and farm exits. RaboResearch estimates milk production to be down by more than 5% YOY in the second half of 2024.
Beef: Cattle prices continue to hold amid record production volumes and record exports. Some widespread rain in late October should continue to support producer demand, and lower global beef volumes may see some upside in global prices, but RaboResearch believes price movement will be minimal for the remainder of the year.
Sheepmeat: Finished lamb prices continue to hold as it appears that production volumes are declining. There has been a larger than average number of lambs sold through saleyards as restockers this year, but we are yet to be convinced that these are the numbers that would cause prices to fall when they hit the market.
Cotton: Cotton declined in early November before clawing back most losses. Mixed US export data partially explains the price volatility. Australian cash prices were spared some of the losses amid a falling Australian dollar.
Wool: Wool prices continue to rise with almost all microns recording positive month-on-month price movements. The market will be closely assessing how Chinese wool demand will be impacted by US trade policies.
Consumer foods: The Australian Bureau of Statistics’ monthly release of the consumer price index showed food and beverage inflation steady at 3.3% YOY in October. There is some relief for consumers, with the dairy aisle posting 1.8% deflation for the month as a lift in promotions and discounting flows through to checkouts.
Farm inputs: Urea prices declined month-on-month due to weak demand. Meanwhile, potash prices found support in some regions amid the suggestion that the US will impose a tariff on Canadian exports.
Interest rates and FX: RaboResearch has revised the 12-month Australian dollar forecast down to 0.6400 following Donald Trump’s election in the US, and three of Australia’s big four banks shifted their RBA cash rate forecast to match our prediction of a May cut.
Energy and freight: A ceasefire deal struck between Israel and Lebanon has reduced risk premia in energy markets, while bulk freight rates continue to move lower.
World Farming Agriculture and Commodity news - Short update -2nd December 2024
China’s sow herd totaled 40.73 million head at the end of October, according to the ag ministry, down 3.2% from year-ago. Through the first 10 months of the year, China’s hog slaughter fell 2.6% from the same period last year to 264.21 million head.
China has lifted trade restrictions on two Australian meat processing facilities, allowing the full resumption of red meat exports to the country, the Australian government said. Beijing has now removed restrictions from all 10 Australian meat processors it banned between 2020 and 2022. China is the second largest market for Australian beef and veal after the United States.
The European Commission officially sets up today the European Board on Agriculture and Food (EBAF), thus taking up on one of the recommendations of the final report of the Strategic Dialogue on the Future of Agriculture. Chaired by Commissioner for Food and Agriculture, Christophe Hansen, the European Board on Agriculture and Food aims at sustaining a new culture of dialogue, trust and multistakeholder participation, among the actors of the food supply chain and civil society, as well as with the Commission.
Ashock third-quarter contraction has dealt a blow to President Cyril Ramaphosa’s ambitious growth plans, with the potential to undermine the government of national unity (GNU) and drive frustrated job seekers toward radical opposition parties. The economy shrank by 0.3% in the three months to end-September, following a 28% collapse in agricultural output, and comes against a revised 0.3% expansion in the quarter before. None of the nine economists surveyed by Bloomberg were expecting the contraction. Excluding agriculture, the economy would have expanded – but all of 0.4%.
The weather is largely to blame: drought has slashed yields of mielies, soya beans, wheat and sunflowers, while adverse weather hit fruits and vegetables. Adding to the drag, Transnet’s rail and port operations faltered, hobbled by mismanagement, theft, underinvestment and outdated equipment. “It is probably too early to be unduly gloomy at this stage, but another one or two quarters like this and the GNU will really be in trouble,” says Azar Jammine, the chief economist of Econometrix. “There are some warning signs if you look at the weakness of transport and communications. While we may have ended load-shedding, we have not seen an end to the logistical bottlenecks.”
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