Rabobank: Supply Slide Saves Grounded Demand

Agricultural commodities were heavily impacted by trade wars, African swine fever, and erratic weather in 2019. According to the RaboResearch report "Outlook 2020: Supply Slide Saves Grounded Demand," many of these factors will remain key for agri commodity prices in 2020.

In 2019, agri commodity markets were impacted by several unprecedented incidents and uncommonly severe conditions. China's hog herd declined significantly, as a result of African swine fever (ASF). This drastically weakened demand for feed and, combined with the US-China trade war, resulted in a significant slowdown in the global soybean trade.

Meanwhile, record US corn- and soybean-planting delays drove corn prices from three-year lows to six-year highs within a few weeks. Then, improved...

Corn Futures Tumble, After US Makes Surprise Yield Upgrade

Corn futures tumbled, after the US unexpectedly raised its yield forecast for this year’s crop, but soybean prices gained, with the estimate for output of the oilseed cut by more than investors had expected.

Chicago corn futures for December, which had stood a little lower ahead of the US Department of Agriculture’s Wasde crop briefing, extended those losses sharply afterwards, chalking up a 3.7% loss at one stage.

The contract, one hour after the report, stood at $3.81 ½ a bushel, a drop of 3.2% on the day.

The declines reflected a surprise upgrade in the Wasde to the USDA’s forecast for the domestic corn yield this year, by 0.2 bushels per acre to 168.4 bushels per acre, while lowering expectations for consumption of the grain...

USDA Forecasts U.S. Corn and Soybean Production Down from 2018

The Crop Production report issued today by USDA’s National Agricultural Statistics Service (NASS) forecasted soybean and corn production down from 2018. Soybean production is down 19 percent from 2018, forecast at 3.68 billion bushels; corn growers are expected to decrease their production 4 percent from last year, forecast at 13.9 billion bushels.

Area for soybean harvest is forecast at 75.9 million acres with planted area for the nation estimated at 76.7 million acres, down 4 percent from the June estimate, and down 14 percent from last year. Soybean yields are expected to average 48.5 bushels per acre, down 3.1 bushels from last year. If realized, the forecasted yield will be a record high in...

REPORTER: Planting Season Gets Off to a Slow Start

United States-Colombia Trade Promotion Agreement Pays Dividends to American Farmers and Exporters

The United States-Colombia Trade Promotion Agreement (CTPA) entered into force on May 15, 2012, laying the foundation for a surge in U.S. agricultural exports. Since 2012, U.S. agricultural exports to Colombia nearly tripled from $1.1 billion to $2.9 billion in 2018. Despite its geographic proximity to major U.S. competitors Brazil and Argentina, Colombia, the third-largest economy in South America, purchases half of its agricultural imports from the United States. Preferential access from CTPA and a strong Colombian economy have allowed the United States to increase its market share from 19 percent prior to CTPA, to 50 percent in 2018. Changing demographics, a growing middle-class, and consumer trends toward more modern retail outlets is expected to keep demand strong into the future for high-quality U.S. agricultural exports.

Colombian Macro-economic Trends and Changing Demographics

In addition to CPTA, political stability and a dynamic economy have contributed to Colombia becoming the United States’ 12th-largest destination for agricultural exports, up from...

Perdue Responds to UGA Study on USMCA

The University of Georgia recently published a study claiming the new United States–Mexico–Canada Agreement would cost some Georgia vegetable and fruit growers revenue and jobs. The sensational assertions are flat wrong. As a proud UGA alumnus, I’m here to tell you USMCA is good for Georgia’s farmers and all American agriculture.

Chapter by chapter, verse by verse, USMCA improves virtually every component of NAFTA and Georgia’s agriculture industry stands to gain significantly. It’s important to note we didn’t get all the improvements we wanted for seasonal fruits and vegetables. While we were hopeful we could make progress in the renewed NAFTA, USMCA isn’t a step backward. The UGA study assumed we lost ground, but the facts are it wasn’t ground we had to begin with. Since the inception of NAFTA more than 20 years ago, agricultural trade between our three countries has...

Grain Futures Soar on Delayed Plantings

In the latest Crop Progress report, planting progress continues at a slower than expected pace—causing concern for traders and seeing corn futures up 12 to 13 cents per bushel Tuesday morning.

The USDA reported corn plantings at 30 percent completion as of Sunday, May 12. That’s less than half of what the normal 5-year average rate is at this point in the season. It’s also only a 7 percent increase from the previous week.

Rain and cool weather in the major production areas has hindered planting activities so far this season.

Emergence is also lower than expected, currently at 10 percent. Last year at this time...

Planting Progress Lags for Corn and Soybeans

In the latest Crop Progress report, the USDA shows corn plantings across the 18 primary production states is currently just 23 percent complete, which is half the normal progress made by this time over the last 5 years.

Planting progress is well-below expectations for this point in the season, having been hindered by rains throughout the Midwest where much of the crop is produced. Every state surveyed has reported lower progress rates than their respective 5-year averages.

Corn emergence is currently at 6 percent, also less than half the average rate. Seven of the 18 production states have yet to report any emerging corn.

Meanwhile, 6 percent of soybeans have been planted so far this season—also...

Cargill Strengthens China Commitment with $112m New Investment in Jilin

Cargill announced today that it will invest US$112 million to expand the capacity of its corn processing facility in Songyuan of Jilin province. This is part of its joint initiative with Songyuan government to build the Sino-US Cargill Biotech Industrial Park, featuring the Cargill Food Safety and Technology Center. Cargill will continue to invest in the park in the coming years. The move is expected to help boost local economy and strengthens local corn processing industry.

“Cargill has made significant investments in Songyuan, which is welcomed by us,” said Mr. Wang Zilian, mayor of Songyuan Municipal Government. “I believe the new investment and projects will help boost the prosperity of local farmers and also benefit the growth of local corn processing industry.”

The park, which occupies 3.71 million square meters, is designed to facilitate both corn processing and trading, with a processing capability of up to two million tons per year by...

Study Finds 11 Percent of the Price of Corn is Derived from Red Meat Exports

The U.S. Meat Export Federation (USMEF) has received the results of an updated study aimed at quantifying the value delivered to U.S. corn producers through exports of red meat. The original 2016 study, as well as the 2018 follow-up, were conducted by World Perspectives, Inc. (WPI), a leading agricultural consulting firm.

The original study, titled The Intersection of U.S. Meat Exports and Domestic Corn Use, concluded that in 2015 exports of U.S. red meat accounted for 11.7 million tons of combined corn and Dried Distillers Grains with Solubles (DDGS) use. In its update, WPI concluded that 2018 beef and pork exports will use a combined total of 14.9 million tons of corn and DDGS, which equates to an additional 459.7 million bushels of corn produced – an increase of 29 percent over the 2015 projections.

Other highlights from the updated study...