Sep. 22, 2014, 2:58 PM
- Commodity prices as measured by the Total Return Bloomberg Commodities Index reaches new five-year lows, hit by a strengthening dollar, the prospect of a record grain harvest in the U.S. and concerns over weakening economic growth in China.
- The index has dropped more than 12% since the end of June amid falling prices for commodities such as crude oil, soybeans and gold.
- Even industrial metals, one of this year’s best performers in commodities, have started to come under pressure; nickel has dropped 10% since the end of June, copper prices are at three-month lows, and iron ore trades below $80/ton for the first time since 2009.
- ETFs: USO, AGQ, OIL, DBA, CORN, USLV, UCO, ZSL, UGL, SCO, DGP, GLL, JJC, RJA, JJG, UGLD, BNO, WEAT, DZZ, DTO, SOYB, DBO, DSLV, DGL, CRUD, DBS, DAG, DGZ, JJA, DGLD, USL, GRU, DBE, UWTI, JJN, DNO, DWTI, RJN, USV, RGRA, AGA, UBG, AGF, CPER, SZO, BAR, FUD, USAG, OLO, UAG, WEET, DIRT, JJE, BARS, TAGS, NINI, CUPM, ONG, RGRE, ADZ, OLEM, UBN
Jun. 27, 2014, 3:32 PM
Apr. 29, 2014, 7:15 PM
- U.S. government forecasters predict a more than 65% chance for an El Niño weather phenomenon by the end of the year, a development that threatens to drive up prices for food and other staples.
- El Niño has a reputation for triggering sharp run-ups for prices in markets as diverse as nickel, coffee and soybeans, and commodities investors, traders and analysts are bracing for impact at a time when global supplies of many raw materials already are stretched.
- Global food prices - which at the start of 2014 were expected to be largely flat this year - could easily climb 15% to record highs in as a little as three months after an El Niño occurs, says World Bank economist James Baffes.
- But Société Générale analysts say it is miners, not farmers, who have the most to worry about; since 1991, nickel prices rose the most (13.9%) during El Niño years among commodities the bank tracks.
- ETFs: DBA, CORN, DBC, JO, JJC, RJA, JJG, WEAT, SOYB, DJP, SGG, DBB, COW, NIB, GSG, RJI, CAFE, BAL, GCC, DAG, USCI, JJA, GRU, CHOC, CANE, JJN, RGRA, AGA, JJT, RGRC, CPER, AGF, GSP, BOM, RJZ, JJU, GSC, LSC, FUD, DJCI, USAG, BOS, SGAR, JJM, DEE, BDD, UCI, LD, WEET, UAG, DYY, DIRT, BCM, CMD, DDP, NINI, JJS, CTNN, TAGS, UBC, CUPM, FOIL, UCD, ADZ, RGRI, LEDD, UBM, CMDT, BDG, SBV, USMI, DPU, LSTK, CSCB, GRWN, HEVY, CSCR
Apr. 11, 2014, 6:06 PM
- China’s rejection of genetically modified corn is becoming a big problem for exporters: In the first full tally of the impact, a U.S. grain industry group says the rejected shipments have totaled ~1.45M metric tons, far more than the 545K tons China has reported and the 900K tons that has circulated in news media.
- The rejected shipments have cost grain companies $427M from lost sales and reduced prices for China-bound shipments that must be resold elsewhere, and has affected the price of corn and soybeans, resulting in hundreds of millions of dollars in losses for farmers.
- Big seed companies such as Syngenta (SYT), Monsanto (MON) and DuPont (DD) generally are aligned with traders such as Cargill and ADM in the desire to grow and sell as much grain as possible, but now the two groups are debating who should bear the costs for the rejected shipments.
- ETFs: DBA, CORN, RJA, SOYB, DAG, JJA, RGRA, AGA, AGF, USAG, FUD, UAG, DIRT, TAGS, ADZ
Jan. 10, 2014, 5:08 AM
- The U.S. Department of Agriculture is expected to lift its estimate today for the 2013 corn harvest (CORN) to 14.05B bushels from a prediction in December of 13.99B bushels.
- That would make last year's output the largest in U.S. history, surpassing the crop of 13.1B bushels in 2009.
- If confirmed, the estimates are likely to add pressure to corn prices, which hit a 3 1/2 year low of $4.08 a bushel yesterday before closing at $4.12. That was still down 1.2%, with the decline also due to falling exports. Corn has dropped 2.4% this year after plummeting 40% in 2013.
- Wheat prices suffered as well yesterday from poor overseas sales, hitting a two-year low of $5.785 a bushel before recovering a bit to close -0.8% at $5.8425.
- ETFs: DBA, RJA, WEAT, DAG, JJA, AGA, RGRA, AGF, FUD, USAG, DIRT, UAG, WEET, TAGS, ADZ
Oct. 5, 2013, 8:25 AM
- The U.S. government shutdown and the resulting lack of official statistics are prompting traders to shun agricultural commodities due to concerns about the vacuum of information and fears of a data dump that will hit markets hard when the shutdown ends.
- Likely to fall victim to the shutdown is the USDA's monthly Wasde crop production report, set for Oct. 11, which affects prices of grains and other agricultural commodities around the world.
- Analysts say concerns over a delay could lead to additional short-covering as speculative shorts look to take risk off the table; once the USDA resumes operations, a torrent of backlogged data could trigger a highly volatile reaction.
- ETFs: MOO, CROP, PAGG, VEGI, JJG, GRU, CORN, WEAT, SOYB, COW, UBC, JJA, RJA, AGF, DBA, FUD, UAG, DAG, AGA, ADZ, JJS, TAGS, USAG, RGRA.
Sep. 30, 2013, 3:49 PM
- Corn (CORN -2.4%) and Soybeans (SOYB -3.2%) tumble - with corn hitting a 3-year low - after the USDA reports estimated corn stocks of 824M bushels, off 17% from a year ago, but far higher than trade estimates for 687M. Bean stocks are estimated at 141M bushels, also off 17% from a year ago, but 13% above estimates. Stocks still remain low, but these are old crop numbers, and forecasters are looking forward to a big crop this fall.
- Wheat (WEAT -2.7%) stocks of 1.85B bushels were slightly below expectations.
- Lower-than-expected feed usage and export demand were behind the big corn number - high prices had pig farmers substituting corn for wheat.
- Relevant grain ETFs: JJA, RJA, AGF, DBA, FUD, UAG, DAG, AGA, ADZ, JJS, TAGS, USAG, RGRA, JJG, GRU.
Aug. 12, 2013, 12:26 PM
- The grain pits party after the USDA lowers its corn production estimate to 13.76B bushels - still a whopper of a number, but off from 13.95B in July. Ending stocks are cut to 1.837B bushels.
- Bean production is cut to 3.255B bushels from 3.42B as acres planted are cut 500K and yield is lowered to 1.9 bushels/acre.
- No change is made to the wheat production estimate, but 25M bushels of extra exports cuts ending stocks by the same amount.
- December corn erases a sizable early loss, now up $0.15 to $4.69/bushel. CORN +1.5%.
- SOYB +3.4%, WEAT +0.3%.
- Grain ETFs: JJG +1.8%, GRU +2.5%.
- Other related: JJA, RJA, AGF, DBA, FUD, UAG, DAG, AGA, ADZ, JJS, TAGS, USAG, RGRA.
May 15, 2013, 11:38 AM
Agricultural commodity prices (DBA) could fall a big 13% over the next year, says Goldman, predicting bumper crops across the globe. With weak demand and a record South American harvest (CORN, SOYB, WEAT) already in the books, it would require a major weather shock in the U.S. to keep prices near current levels. Earlier: Deere tumbles as poor weather slows U.S. planting progress.| May 15, 2013, 11:38 AM
Apr. 25, 2013, 3:19 PM
The flow of key farm products (DBA) to the world from North and South America, highlighted by congestion at Brazilian ports and limited selling of crops by U.S. farmers, will keep global grain supplies tight despite expectations for big harvests later this year, Bunge (BG +6.5%) says after its Q1 report showed a 16% jump in agribusiness sales to $10.77B.| Apr. 25, 2013, 3:19 PM
Apr. 8, 2013, 10:22 AM
Feb. 14, 2013, 10:28 AM
Agricultural commodities continue an underreported slide, with J.C. Parets noting corn is down for the 10th consecutive session. Earlier this week, the USDA estimated farm income in 2013 will be the highest in 40 years thanks to high prices. A weak harvest has little impact thanks to the use of crop-insurance programs. DBA -5.2%, CORN -4.4% YTD.| Feb. 14, 2013, 10:28 AM | 2 Comments
Jan. 11, 2013, 12:13 PM
The inaugural midday release of the USDA's January crop report doesn't disappoint, with corn reversing early losses and now sharply green as Dec. 1 stocks come in at 8.03B bushels vs. expectations of 8.21B. Ending stocks are estimated at a slim 602M bushels vs. expectations of 667M. Beans are down after production came in higher than expected. Wheat jumps on lower-than-anticipated planted acres.| Jan. 11, 2013, 12:13 PM
Jan. 3, 2013, 9:19 AM
Dec. 21, 2012, 11:59 AM
Brazil’s government go-ahead for Petrobras (PBR -3.6%) to raise its gasoline prices in early 2013 likely will raise demand for domestically produced sugar-based ethanol, but effects also could reach U.S. shores. Ethanol output in the U.S. is expected fall ~10% next year, and a robust export market could give Brazilian mills even more incentive to produce ethanol instead of sugar.| Dec. 21, 2012, 11:59 AM | 4 Comments
Dec. 4, 2012, 5:57 PMPhosphorus: The finite supply of it is why Jeremy Grantham predicts a grim future for much of the world's population. As production of the critical ingredient for fertilizer drops, so will crop yields, which will threaten the ability to feed the world's population. Grantham thinks the finite supply of fertilizer and limits of crop yields already are starting to affect food prices. | Dec. 4, 2012, 5:57 PM | 6 Comments
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