Winter weather in the US adds worries for cereals

The United States Department of Agriculture’s Crop Progress report, published last week, showed conditions deteriorated in Kansas, Oklahoma and Texas following freezing temperatures in April.

Winter extended unusually in the United States, there were more than 30 cm of snow in western Iowa, a major grain states in the country. When there is no snow, it’s rain preventing farmers from sowing. Having sowed only 5% of corn in may had not happened in the United States for nearly thirty years.

“We’ve been concerned by some extraordinarily cold morning temperatures,” said Todd Hultman, a grains analyst at DTN. “The USDA report just added confirmation that people are expecting damage from those conditions.”

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A record wheat production expected in 2013

After falling 5.74% between the 2011/12 and the 2012/13 season to 656 Mt according to the International Grain Council, the world wheat production should bounce back. In 2013/14, the harvested areas should be at their highest level in four years, while a rise in yields would stimulate the production by 4%.

These estimates are similar to those of the Food and Agriculture Organization of the United Nations (FAO), published earlier this month. In 2013, global wheat production (690 Mt according to FAO, +4.3%) should be driven by the European Union (138 Mt), where the acreage should increase thanks to high prices.

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Corn outlook – Forecast 2013 – USA and Brazil

In 2012, corn prices skyrocketed, demand remained high, making the 2012 crop the most valuable ever produced. What will happen next? Will the drought that impacted several countries and especially the United States continue in 2013?

USDA forecasts more corn in the US in 2013

The US corn production could reach 366.6 million tonnes 2013-2014, the U.S. Department of Agriculture believes. This is 53 million tons more than in 2012-2013. The USDA revised its long-term forecast model to include the 2012 drought in its 25-year average. Forecasters expect the area sown for all types of cereals to be 102.6 million hectares in 2013-2014, but to decline over the next three years for corn. Specifically for corn, the USDA expects 38.78 million hectares in 2013, and 36.3 million hectares in 2014 (vs. 39 million hectares in 2012).

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Sugar glut

Raw-sugar futures fell 19 percent to 18.95 cents a pound this year on ICE Futures U.S. in New York. Prices, which reached 36.08 cents in February 2011, the highest since 1980, may drop to 18 cents by the year-end.

While cereals are scarce this year and see their prices drastically rising, sugar is abundant which has been dragging its price down since last summer. Sugar price fall has even accelerated this past month, especially since production in Brazil could bring a big surplus next spring.

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US Drought: Corn, Wheat, Soybeans prices to go down

Corn, wheat and soybeans prices might have peaked after this summer drought in the US according to Macquarie Agricultural Funds Management, and it would take worsening weather elsewhere to push up futures.

Corn is still up 16 percent this year at $7.505 but has tumbled 12 percent from a record $8.49 a bushel on the Chicago Board of Trade and soybeans have jumped 34 percent to $16.24 but are now down 9.2 percent from a high of $17.89 a bushel.

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World food price crisis: 6% increase in July

According to FAO, global food prices have bounced back by 6% in July after several months of decline. This increase is mainly due to soaring prices for cereals and sugar: over 17% for cereals and 12% for sugar. The FAO food price index has rebounded significantly in July to 213 points vs. 201 in June.

The Rome-based institution said in a statement that the increase was mainly due to a jump in prices for cereals and sugar, and more moderate increases of oils and fats. International prices of meat and dairy products remained more or less unchanged. If this trend continues, the February 2011 peak of 238 points that started in July 2010 could be rapidly reached. It could be similar since in both cases, soaring grain prices were the original trigger.

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Corn Prices Soar as Midwest Bakes

Corn prices soared toward new highs on Monday amid growing fears that the drought scorching the U.S. Midwest will prove to be the harshest in decades. The hot, dry weather could cut the U.S. harvest this autumn by more than 1 billion bushels below the federal government’s forecast of two months ago, leaving domestic supplies relatively tight, analysts say.

Corn futures for July delivery jumped 4% to $7.7525 a bushel on the Chicago Board of Trade, extending gains to 29% in the past three weeks, as intense heat and a dearth of rainfall punish parts of big corn-growing states like Illinois, Indiana, Iowa and Ohio. Corn prices are just cents away from the nominal record $7.9975 a bushel reached in June 2011, when prices were rising because of worries about flood damage.

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Argentina’s soybean crop at risk

Some 700,000 hectares are under water in the southwestern province of Buenos Aires, the heart of the Argentine agricultural power, threatening the soybean crops and about 500,000 heads of livestock, local producers said yesterday.

Soybeans, of which Argentina is the third largest producer, was already hit by drought and production should decrease by 18.5% from about 49 million tonnes in 2011 to 41 this year, according to forecasts by Bolsa de Cereales, the Buenos Aires Grain Exchange.

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Europe Grains Wilt as England Has Hottest April in 352 Years

Dry weather in France and Germany and England’s hottest April in at least 352 years is threatening crops across the European Union, producer of a fifth of the world’s wheat.

About 20 percent of average rain fell in the U.K. in April after a dry March, further reducing soil moisture, the Home-Grown Cereals Authority, an industry group, said in an e-mailed report. European wheat and rapeseed crops are “in jeopardy” after an “incredibly dry” April, according to agricultural weather forecaster Martell Crop Projections.

Dry, warm weather in Europe may reduce global wheat stockpiles already expected to fall 7.6 percent in the year that ends on May 31, the biggest decline since 2007. Food prices reached a record in February, driving 44 million people into poverty, and wheat consumption may rise to an all-time high this year. The world “cannot afford” for Europe’s crop to be diminished, Abdolreza Abbassian, a senior economist at the United Nations’ Food and Agriculture Organization, said last month.

via Europe Grains Wilt as England Has Hottest April in 352 Years (2) – Bloomberg.com.