G.O.O.D

Source: FT.com

Corn prices on Tuesday fell to the lowest level this year after the US Department of Agriculture revealed that farmers were able to boost the country’s corn crop in spite of the damage wreaked earlier in the season by the worst flooding in 15 years.

The USDA forecast the 2008-09 season would see the second largest corn crop on record, triggering further selling of agriculture commodities futures. Corn prices for September delivery dropped about 1 per cent to $4.84¼ a bushel, the lowest since January.

The sharp fall in prices for corn – down 36.5 per cent from a record high of $7.65 in June during the peak of the flooding – and also for wheat and soyabean, are likely to alleviate concerns about global food inflation.

Nevertheless, food prices are still 44 per cent higher than a year ago and almost double the level of 2006, according to the UN’s Food and Agriculture Organisation.

“Nearly ideal growing season weather across much of the Corn Belt since late June has supported crop development and increased yield prospects,” the USDA said in its August report, which is closely watched as it provides the first forecast for the corn and soyabean’s autumn harvest.

Via: Bloomberg.com

Corn topped $7 a bushel for the first time, while soybeans and wheat rallied, as Midwest rains and flooding damaged the U.S. crop, threatening to reduce supplies at a time of record demand.

More than 4 million acres of corn were left to be planted as of June 1, before Midwest fields received up to 12 inches (30 centimeters) of rain in the past week, government data show. Some fields in Iowa, the biggest corn-growing state, may receive 6 inches of rain in the next 24 hours, said Mike Tannura, a meteorologist for T-Storm Weather in Chicago.

“It’s clearly a panic situation,” said Gary Rhea, president of Risk Management Partners in Des Moines, Iowa. “The problem is the market just doesn’t know the extent of the acreage and yield losses from the rains.”

The U.S. Department of Agriculture cut its corn-crop forecast yesterday to 11.735 billion bushels, down 10 percent from last year’s record. Before next year’s harvest, inventories will plunge to a 13-year low. The price of corn, used mostly to make livestock feed and ethanol, jumped 78 percent in the past year and touched records in each of the past five sessions.

Corn futures for July delivery rose 30 cents, or 4.5 percent, to a record $7.0325 a bushel on the Chicago Board of Trade. The 30-cent gain was the maximum permitted by the exchange.

From: NYTimes.com

In a year when global harvests need to be excellent to ease the threat of pervasive food shortages, evidence is mounting that they will be average at best. Some farmers are starting to fear disaster.

Randy Kron, a farmer in Griffin, Ind., on land that was a cornfield, then a soybean field, but that is now flooded.

American corn and soybean farmers are suffering from too much rain, while Australian wheat farmers have been plagued by drought.

“The planting has gotten off to a poor start,” said Bill Nelson, a Wachovia grains analyst. “The anxiety level is increasing.”

Randy Kron, whose family has been farming in the southwestern corner of Indiana for 135 years, should have corn more than a foot tall by now. But all spring it has seemed as if there were a faucet in the sky. The rain is regular, remorseless.

Some of Mr. Kron’s fields are too soggy to plant. Some of the corn he managed to get in has drowned, forcing him to replant. The seeds that survived are barely two inches high.

At a moment when the country’s corn should be flourishing, one plant in 10 has not even emerged from the ground, the Agriculture Department said Monday. Because corn planted late is more sensitive to heat damage in high summer, every day’s delay practically guarantees a lower yield at harvest.

“This is pushing my nerves to the limit,” Mr. Kron said one recent morning, the sky as dark as the unplanted earth.

Last winter, as the full scope of the global food crisis became clear, commodity prices doubled or tripled, provoking grumbling in America, riots in two dozen countries and the specter of greatly increased malnutrition.

From tristateobserver.com

Larry Matlack, President of the American Agriculture Movement (AAM), has raised concerns over the issue of U.S. grain reserves after it was announced that the sale of 18.37 million bushels of wheat from USDA’s Commodity Credit Corporation (CCC) Bill Emerson Humanitarian Trust.

“According to the May 1, 2008 CCC inventory report there are o­nly 24.1 million bushels of wheat in inventory, so after this sale there will be o­nly 2.7 million bushels of wheat left the entire CCC inventory,” warned Matlack. “Our concern is not that we are using the remainder of our strategic grain reserves for humanitarian relief. AAM fully supports the action and all humanitarian food relief. Our concern is that the U.S. has nothing else in our emergency food pantry. There is no cheese, no butter, no dry milk powder, no grains or anything else left in reserve. The o­nly thing left in the entire CCC inventory will be 2.7 million bushels of wheat which is about enough wheat to make ½ of a loaf of bread for each of the 300 million people in America.”

The CCC is a federal government-owned and operated entity that was created to stabilize, support, and protect farm income and prices. CCC is also supposed to maintain balanced and adequate supplies of agricultural commodities and aids in their orderly distribution.

“This lack of emergency preparedness is the fault of the 1996 farm bill which eliminated the government’s grain reserves as well as the Farmer Owned Reserve (FOR),” explained Matlack. “We had hoped to reinstate the FOR and a Strategic Energy Grain Reserve in the new farm bill, but the politics of food defeated our efforts. As farmers it is our calling and purpose in life to feed our families, our communities, our nation and a good part of the world, but we need better planning and coordination if we are to meet that purpose. AAM pledges to continue our work for better farm policy which includes an FOR and a Strategic Energy Grain Reserve.”

AAM’s support for the FOR program, which allows the grain to be stored o­n farms, is a key component to a safe grain reserve in that the supplies will be decentralized in the event of some unforeseen calamity which might befall the large grain storage terminals.

A Strategic Energy Grain Reserve is as crucial for the nation’s domestic energy needs as the Strategic Petroleum Reserve. AAM also supports full funding for the replenishment and expansion of Bill Emerson Humanitarian Trust.

The May 1, 2008 CCC Inventory report may be reviewed here: http://www.fsa.usda.gov/Internet/FSA_File/wid2a.pdf.

From: Reuters

Chicago corn futures rose to an all-time high in Asia on Monday, as U.S. grains and oilseed futures markets extended their rally from late last week on crude oil’s surge to a record high above $139.

Corn and soybean prices were also boosted by worries about young U.S. crops, due to torrential rains in the country’s heartland.

The lead July 2008 corn futures contract rose as high as $6.72 per bushel, up more than 3 percent and a record for a spot contract. It closed on Friday at $6.50-3/4.

The new-crop July 2009 corn contract scaled an all-time peak of $7.20 per bushel, after U.S. corn futures soared to a record above $7 on Friday.

Worries about tight fundamentals, such as low stocks and high demand, was likely to continue feeding the rally in corn, market participants said.

For all of you Left Behind fans, if you were to pay attention to what Scripture says, those who are “left behind” are the righteous. In Noah’s day, those who were swept away, or taken, were the ungodly. But alas, many are called and few are chosen.

For as were the days of Noah, so will be the coming of the Son of Man. For as in those days before the flood they were eating and drinking, marrying and giving in marriage, until the day when Noah entered the ark, and they were unaware until the flood came and swept them all away, so will be the coming of the Son of Man. Then two men will be in the field; one will be taken and one left. Two women will be grinding at the mill; one will be taken and one left. Mat 24:37-41

guardian.co.uk

U.S. grains and oilseed futures markets caught fire on Friday, with corn notching an all-time high above $7 a bushel, caught in a frenzied broad-based commodity rally led by soaring crude oil, traders said.

Further boosting corn and soybean prices were worries about the young U.S. crops. Torrential rains pummeled the American heartland this week, increasing prospects for a yield drag on both.

“There are Noah’s Ark-like conditions in the Midwest through next week,” said Vic Lespinasse, analyst for grainanalyst.com.

Farmers were hoping for ideal growing conditions this year given the huge world demand for grains and oilseed for food and feedstocks to produce biofuels.
Also, the three-month-long conflict in Argentina between farmers and government officials over a soy export tax has paralyzed trade in one of the world’s largest soy exporters and increased demand for U.S. soybeans and soy products.

“The people curse him who holds back grain, but a blessing is on the head of him who sells it.” (Pro 11:26 )

From Bloomberg.com: Worldwide

Rice climbed to a record and corn traded near its highest ever on speculation the 3 percent annual increase in global demand for cereals will outstrip supply as governments curb exports to prevent protests.

Rice, the staple food for about 3 billion people, rose 2.4 percent in Chicago trading today after doubling in the past year. Soybeans advanced for the third day and wheat gained. Crop supply has been reduced by drought in countries including Canada and Australia and a U.S. freeze followed by excessive rain last year.

“A lot of what we’re seeing at the moment is not related to production, but the fact that a number of countries are implementing trade restrictions,” said Darren Cooper, a senior economist at the International Grains Council in London.

Technorati Tags: rice, corn, famine, economics, Commodities

From the Houston Chronicle

A BB&T Capital Markets analyst said Monday corn rationing may be necessary this year, following a U.S. Department of Agriculture report predicting farmers would plant far fewer acres of corn in 2008.

According to the March Prospective Plantings Report, farmers intend to plant about 86 million acres of corn this year, down 8 percent from 2007, when the amount of corn planted was the highest since World War II.

Analyst Heather L. Jones said in a note to investors if the USDA estimate proves accurate, the year may produce just 200 million bushels of corn. That, she said, wouldn’t be enough to meet demand, given current export and feed demand trends and higher ethanol demand. Both ethanol and animal feed are made with corn.

“That is an untenable inventory demand, in our opinion,” she said. “Consequently, we believe demand must be rationed or there needs to be a big supply response from other growing regions of the world.”

Technorati Tags: corn, famine, recession

Bloomberg.com: Worldwide

U.S. farmers will plant more soybean and wheat crops this year after prices reached records, while corn and cotton acres will drop, the U.S. Department of Agriculture said.

The government survey showed growers will seed 74.793 million acres with soybeans, up 18 percent from 63.631 million last year, the USDA said today in a report. Spring-wheat planting will jump 7.8 percent, as corn planting drops 8.1 percent and cotton acres fall 13 percent, the USDA said.

Increased soybean and wheat planting may help refill dwindling inventories, while declining corn output may squeeze supplies available for ethanol makers, including Archer Daniels Midland Co. Prices for most farm commodities reached records this year on booming demand for food, fuel and animal feed.

Technorati Tags: Wheat, Rice, Soy beans, Corn, Famine