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Commodities Briefing - Category | Agriculture more

Cotton’s Status as 2015 Commodity Survivor Is Under Threat

Posted on 25 August 2015 by VRS  |  Email |Print

Cotton’s status as one of the only two raw materials with gains this year in the Bloomberg Commodity Index is under threat after the fiber fell on Monday by the most in two years. On ICE Futures U.S. in New York, cotton for December delivery dropped 4.3 percent to close at 64.05 cents a pound at 2:26 p.m., the largest decline for a most-active contract since Aug. 21, 2013.
The only other market in the Bloomberg index of 22 raw materials that’s still higher this year is gasoline. On Aug. 12, cotton surged 4.6 percent, the most in three years, after the U.S. government unexpectedly reduced its forecast for domestic production………………………………………..Full Article: Source

Going Against the Grain: Risks and Opportunities in Agricultural Commodities

Posted on 20 August 2015 by VRS  |  Email |Print

With this year’s market momentum largely being driven by growth sectors such as health care and technology, smart investors are looking for ways to diversify away some of the risks associated with those high flying areas should the market pull back. Prices of agricultural commodities have been sliding thus far in 2015 due to a variety of factors, among them the strong dollar, weak demand in China, and most importantly, excess supplies due to major innovations in crop yields.
However, history suggests that commodity prices do not go down forever, so playing a rebound in these prices seems like a good way to add a non-correlated asset to one’s portfolio. Positions with low or even negative statistical correlation, like commodities, can act as a hedge for a portfolio and help smooth out the recent volatility that we have seen in the stock market………………………………………..Full Article: Source

Investing in Africa’s agriculture is the next best thing

Posted on 14 August 2015 by VRS  |  Email |Print

Investors are being encouraged to look at adding agriculture into their portfolios as we witness significant declines in oil and commodity export returns. Over 60 per cent of the world’s arable land is situated on the African continent, which makes for a very compelling Africa Agricultural investment case, says Craig Chambers, Old Mutual Investment Group’s Director of Strategic Projects.
At a media briefing in Johannesburg the investment group discussed the emergence of the agricultural sector as a viable asset class in a continent where 65 per cent of Africa’s labour force is in agriculture and constitutes 35 per cent of South Africa’s gross domestic product (GDP)………………………………………..Full Article: Source

Agricultural commodities feel the bite of weaker demand

Posted on 13 August 2015 by VRS  |  Email |Print

A traders sound the death knell of the commodities supercycle, grains prices, which rallied on increased demand from emerging markets and periods of bad weather, also look to be heading for a period of weakness. Along with oil and metals, agricultural commodities rode the great bull run in raw materials from the early 2000s. On top of new demand from developing countries, biofuel mandates also contributed to supply shortages.
However, as growth slows in China and other emerging economies, agricultural and rural economies are facing a “reset downward” says Professor David Kohl, a US agricultural economist formerly of Virginia Tech………………………………………..Full Article: Source

Agricultural commodities sink after USDA report

Posted on 13 August 2015 by VRS  |  Email |Print

A bearish U.S. Department of Agriculture report sent corn, wheat, and soybean futures sliding on Wednesday after it revealed harvests came in above expectations. The USDA forecast the 2015-16 soybean harvest at 3.916 billion bushels based on an average yield of 46.9 bushels per acre. Both figures were above the government’s previous forecasts and topped the high end of the range of market estimates.
Corn and soybean futures fell sharply after the report was released, with Chicago Board of Trade new-crop November soybean futures sliding 5.8 percent to its lowest since mid-June. December corn sagged 5.6 percent………………………………………..Full Article: Source

El Niño Tests How Soft Commodities Weather the Storm

Posted on 07 August 2015 by VRS  |  Email |Print

Investors in soft commodities are used to being slaves to the weather’s twists and turns. With prices now in a depression and the El Niño weather pattern looming, the forecast looks more unsettled than normal.
The possibility that the Federal Reserve will raise interest rates later this year, coupled with a strong U.S. dollar as a result, have weighed on prices of commodities already under pressure thanks to slowing growth in the key Chinese market. Soft commodities haven’t been spared, with sugar trading around six-year lows, dairy at 13-year lows and palm oil down around 13% so far this year………………………………………..Full Article: Source

Bloodied hedge funds return to ag selling with a vengeance

Posted on 04 August 2015 by VRS  |  Email |Print

Hedge funds, having been bloodied by buying grains as the market tumbled, followed up with widespread selling in ags, turning more bearish on soft commodities and livestock as well as the likes of corn and wheat.
Managed money, a proxy for speculators, slashed its net long position in futures and options in the top 13 US-traded agricultural commodities, from cotton to cattle, by nearly 135,000 contracts in the week to last Tuesday, according to data from the Commodity Futures Trading Commission regulator………………………………………..Full Article: Source

Is Now the Time to Invest in Agriculture?

Posted on 31 July 2015 by VRS  |  Email |Print

Do today’s agricultural equity opportunities offer a parallel to the bull market of 2010? During the last significant El Niño cycle in 2010, Chicago corn futures rallied 78%.
We are currently living in an exciting time for the agricultural equity market that has yet to be widely recognised by investors. In particular, we do not believe the market has adequately discounted the potential impact of El Niño – a band of warm air that comes off the ocean, which can cause tropical storms – on agricultural commodity prices and what it could mean for upstream producers………………………………………..Full Article: Source

Funds flow into agriculture as El Nino threatens crops

Posted on 28 July 2015 by VRS  |  Email |Print

Funds are flowing back into agricultural commodities for the first time since 2012 as investors look to capitalize on cheap prices, bullish demand and the threat of crop damage from an El Nino weather pattern. Figures from ETF Securities, one of the largest issuers of exchange traded products, show a small net inflow so far this year after an outflow of nearly 20 percent in 2014.
Across the sector, indices and ETFs saw a net inflow of $400 million in April and a further $400 million in May, according to data from Barclays. This compares to a net outflow of $2.4 billion in the last quarter of 2014………………………………………..Full Article: Source

Agricultural Commodities in the Spotlight

Posted on 20 July 2015 by VRS  |  Email |Print

Over the past month, prices of agricultural commodities including corn, soybeans, and wheat have spiked in response to poor growing conditions in North America and Europe. While the fundamental story may play out over the long term, this highlights the pronounced impact of weather conditions on the agricultural complex.
The Bloomberg Agriculture Subindex gained about 14% in the trailing one-month period through July 15. Longer-term performance, however, has been very uninspiring, as the index has posted annualized losses of more than 13% over the past three years. For those looking at potential investments in the category, there are some offsetting forces at play that are worth considering. The bullish thesis is based on a growing global population and a finite amount of arable land for farming. ……………………………………….Full Article: Source

Could youth interest in agriculture boost Africa’s economy?

Posted on 14 July 2015 by VRS  |  Email |Print

The African Development Bank’s new leader Akinwumi Adesina promoted agricultural reform when he was the Minister of Agriculture in Nigeria. Esther Ngumbi explains how garnering more youth interest in agriculture could help the continent’s economic development.
The African Development Bank, Africa’s biggest lending institution, recently elected a new leader: Akinwumi Adesina. The former Minister of Agriculture in Nigeria, Adesina led an agricultural transformation in his country. Among Adesina’s revolutionary acts was the launch of a program to develop 750,000 young entrepreneurs—Nagropreneurs—in agriculture………………………………………..Full Article: Source

Global agri-commodities’ price plunges to six-year low in June

Posted on 10 July 2015 by VRS  |  Email |Print

Global agri commodities’ prices declined to nearly six-year low in June 2015 due to bumper output of all products in value chain. Forecast for yet another year of better-than-expected production this year despite continuing apprehension over El Niño pulled commodities’ prices down.
Data compiled by the Food and Agricultural Organisation (FAO) of the United Nations, showed prices of global agri commodities fell by 0.9% in June. Weighed in terms of index known as FAO’s Food Price Index (FPI), prices of agri commodities stood at 165.1 points, a decline of 21% from a year ago and at its lowest level since September 2009………………………………………..Full Article: Source

El Niño: Crop yields and commodity ETF strategies

Posted on 08 July 2015 by VRS  |  Email |Print

Heavy rains in the US midwest delayed the harvest and pushed wheat prices higher in June. With rising certainty that a significant El Niño weather event will occur this year, what can we expect for agricultural commodity prices? El Niño forms when temperatures in the central and eastern Pacific Ocean rise above normal levels, disrupting atmospheric circulation worldwide and often causing extreme weather events.
According to the Australian Bureau of Meteorology, sea surface temperatures are at levels unseen since 1997 when droughts in Australia and flooding in the United States led to billions of dollars of damage. While meteorologist are uncertain as to the strength of the weather event this year, it usually has most impact in the second half of the year so will be monitored with caution………………………………………..Full Article: Source

Funds’ swing bullish on ags raises fears of price ‘headwinds’

Posted on 08 July 2015 by VRS  |  Email |Print

US regulators confirmed that hedge funds indeed swung bullish in agricultural commodities by the most on record – but the extent of the shift provoked concerns over the ammunition left for spurring further price rises.
The Commodity Futures Trading Commission confirmed data which showed that managed money in the week to last Tuesday turned from a net short of 27,560 short-sold contracts in futures and options in the top 13 US-traded ags to a net-long of 342,857 held contracts………………………………………..Full Article: Source

How To Invest When El Niño Comes Around

Posted on 07 July 2015 by VRS  |  Email |Print

This year, El Niño is forecast to upend weather patterns across the world and wreak havoc farmers, especially in regions where access to irrigation is limited. The weather phenomenon is expected to cut down on rainfall in Australian and Southern Asia and create unusually wet weather in parts of South America.
The extreme weather conditions have pushed investors to take a closer look into agriculture investments as the difficult growing conditions could lead to price spikes. Prices of wheat have seen a bump over the past two weeks after worries that El Niño would dry out wheat-producing regions. In Australia, where 14 percent of the world’s wheat exports are grown, dryer than expected weather is forecast to significantly cut down on crop yields………………………………………..Full Article: Source

Officials spike data showing huge turn bullish by funds on ags

Posted on 07 July 2015 by VRS  |  Email |Print

Regulators cautioned investors over data which showed hedge funds making, by far, their biggest swing positive in positioning in agricultural commodities on record, saying the statistics were based on “incomplete” information. Sources including Rabobank said that the Commodity Futures Trading Commission, the US regulator, had revealed that managed money, a proxy for speculators, slashed its negative positioning in futures and options in the top 13 US-traded agricultural commodities in the week to June 30 at the fastest on record.
The data would show hedge funds turning net long - meaning that long positions, which profit when values rise, exceed short holdings, which benefit when values fall - for the first time in nearly three months………………………………………..Full Article: Source

Global slump in agri commodities to persist: report

Posted on 02 July 2015 by VRS  |  Email |Print

A major factor driving lower food prices globally is lower oil prices that is pushing down energy and fertilizer costs, the report said, adding, this will remove incentives for production of bio-fuels. Better crop yields and a slower growth in global demand will lead to a gradual decline in real prices of major crops over the next decade, said the Agricultural Outlook 2015-2024 released on Wednesday.
However, crop prices are likely to remain at levels above those in the early 2000s, observed the report released by the Organisation for Economic Cooperation and Development (OECD) and UN’s Food and Agriculture Organization (FAO)………………………………………..Full Article: Source

El Niño set to disrupt key commodities in 2015

Posted on 30 June 2015 by VRS  |  Email |Print

El Niño 2015 is underway and set to hit wheat, coffee and sugar cane production leading to volatile prices, warns a Rabobank report. With buffer stocks for these commodities at ‘comfortable levels’, some of the impact of a particularly strong El Niño would be buffered - but not completely shielded from fundamental and speculative influences. This also held for soy oil and palm oil, the report said.
While ‘meaningful’ climate disruptions had yet to be observed, Rabobank warned that key drivers of the phenomenon – such as a rise in sea surface temperatures – would intensify from September to November. The National Oceanic and Atmospheric Administration(NOAA) has predicted a strong event for 2015………………………………………..Full Article: Source

Latin America: The loss of El Dorado

Posted on 29 June 2015 by VRS  |  Email |Print

After the commodity boom, the region needs a new formula for growth. It was wonderful while it lasted. For much of this century Latin America saw robust economic growth, a big fall in poverty and a swelling of the middle classes. Now the good times are over. Emerging markets everywhere are subsiding like a cooling soufflé. But Latin America has gone stone cold. The IMF expects growth of just 0.9% in 2015, which would be the fifth successive year of deceleration.
Many economists are talking of a new normal of growth of only 2% or so a year—less than half the region’s pace during the boom. What has gone wrong? The short answer is that the great commodity supercycle triggered by the industrialisation of China is over. Rising exports of minerals, soya beans and fuels lifted many South American economies. Without that fillip the region has converged downwards to the 2.4% long-term growth rate of Mexico, which is not a big commodity exporter………………………………………..Full Article: Source

India: Disappointing rains may increase prices of key commodities by 6-20% in July

Posted on 29 June 2015 by VRS  |  Email |Print

The monsoon’s flying start has depressed the prices of key commodities to such an extent that analysts and market watchers believe that if the rains, as the government’s weather bureau forecasts, turn out to be a damp squib in July these products could bounce back by as much as 6-20 per cent.
IMD has forecast rainfall in June-September period to be 12 per cent below normal because of the El Nino phenomenon, while private forecaster Skymet is sticking to its prediction of a normal monsoon, or 102 per cent of long period average. However, rainfall in June through Thursday has been 28 per cent above normal, pushing down the prices of many foods………………………………………..Full Article: Source

India: Agri commodities decline on higher acreage, favourable monsoon

Posted on 29 June 2015 by VRS  |  Email |Print

Prices of agri commodities declined by upto 14% so far this month on prospects of bumper output this kharif season following better than forecast monsoon rainfalls and higher acreage. While soybean price fell by 14% to trade at Rs 3444 a quintal in Indore mandi, chana slumped by 13% to Rs 4162 a quintal in New Delhi market. Jeera prices in Unjha (Gujarat) slipped by 11% to Rs 16035 a quintal. Others commodities also followed suit.
As per latest sowing data released by the Ministry of Agriculture, total area sown till June 26 stood at 16.56 million hectares, up by a staggering 23% from the same time last year. Kharif crop sowing picked up during last week following spread of rainfalls. While pulses sowing moved up by 80%, cereals and oilseeds sowing rose by 15% and 427% respectively………………………………………..Full Article: Source

Sugar Exports From India Seen Doubling as Bumper Crop Looms

Posted on 26 June 2015 by VRS  |  Email |Print

Sugar exports from India may double as farmers prepare to harvest the third-biggest crop ever, extending the country’s surplus for a sixth year. Shipments will be 2 million metric tons in the 12 months starting Oct. 1, according to the median of six estimates from refiners, brokers and analysts compiled by Bloomberg. That compares with 700,000 tons to 800,000 tons this year, the Indian Sugar Mills Association says.
Production will be 27.25 million tons from a record 28.4 million tons this year, estimates from eight survey participants show. The glut in the world’s second-largest producer threatens to extend a 35 percent slump in New York futures in the past year. The decline in prices to the lowest since 2009 has forced the government to subsidize exports and waive interest on bank loans to processors. Stockpiles of 10 million tons will add to supplies and exceed demand of 25.5 million tons, the mills say. That may force producers to ship as much as possible………………………………………..Full Article: Source

Hedge funds return to extending bearish ag bets

Posted on 23 June 2015 by VRS  |  Email |Print

Hedge funds returned to extending their bearish bets on agricultural commodities, led by corn, in which wet Midwest weather is supporting US yield prospects, and sugar, helping drive prices to a six-year low.
Managed money, a proxy for speculators, raised by more than 81,000 contracts its net short position in futures and options in the main 13 US-traded agricultural commodities in the week to last Tuesday, according to data from the Commodity Futures Trading Commission (CFTC) regulator………………………………………..Full Article: Source

How El Niño affects commodity prices (Video)

Posted on 22 June 2015 by VRS  |  Email |Print

Cocoa, coffee and minerals are especially vulnerable to the weather pattern first named by Peruvian fishermen. The Economist explains how El Niño affects.…………………………………………Full Article: Source

Australia cuts farm commodity forecasts due to El Niño

Posted on 18 June 2015 by VRS  |  Email |Print

Australia on Tuesday slashed forecast production levels for wheat, cotton and other agricultural commodities in fiscal 2015/16 as an El Niño weather phenomenon grips the country and dries out farmland. Meteorologists warn the current El Niño, the second in five years in Australia, will persist until the end of the year.
“We should see an end to this El Niño by December, January at the latest,” Andrew Watkins, manager of climate prediction services for the Australian Bureau of Meteorology. In the year ending July 1, 2016, cotton production in Australia is forecast to reach only 520,000 tonnes down from a March forecast of 559,500 tonnes, according to the latest quarterly update from the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES)………………………………………..Full Article: Source

Hedge funds slash bearish ag bets at quickest rate in 15 months

Posted on 16 June 2015 by VRS  |  Email |Print

Hedge funds cut their bearish bets on ag commodities at the fastest rate in 15 months as mounting weather fears prompted a revival in prices – although there are doubts of the more positive positioning holding.
Managed money, a proxy for speculators, slashed by nearly 130,000 contracts its net short position in futures and options in the main 13 US-traded agricultural commodities in the week to last Tuesday, according to data from the Commodity Futures Trading Commission (CFTC) regulator………………………………………..Full Article: Source

Here’s what India can learn from Chinese agriculture

Posted on 10 June 2015 by VRS  |  Email |Print

According to one of his ministers, Prime Minister Narendra Modi wants India to have a China-like dominance in manufacturing. China’s success in manufacturing holds several lessons for India but China’s performance in agriculture is no less remarkable. Over the past few decades, rapid agricultural growth has allowed the Chinese growth engine to pick up pace without stoking inflation.
Chinese agriculture has fared better than Indian agriculture on most counts over the past few decades. Both India and China are among the world’s top three producers of important crops such as rice, wheat, cotton and maize, but China produces much more from each hectare of land than India does………………………………………..Full Article: Source

Can El Nino Boost Agricultural ETFs?

Posted on 09 June 2015 by VRS  |  Email |Print

El Niño, a warm-water phenomenon that blows up off the Pacific coast of South America, often has a great impact on agricultural prices. El Nino causes weather disruptions in many regions around the world, including drought in some and flooding in others due to abnormal warming of the Pacific Ocean.
The world has stepped into an El Niño cycle this year after a long pause of about five years and might end up seeing an upturn in the commodity investing markets, especially agriculture. Experts pointed out that this year, El Nino is not only strong; it is likely to be relatively long-standing too. In countries like India, this adverse climate will likely persist through the rainy season, which is all important for agricultural production………………………………………..Full Article: Source

Hedge funds cut bearish ag bets at fastest pace in 3 months

Posted on 09 June 2015 by VRS  |  Email |Print

Hedge funds turned less bearish on ags at the fastest pace in three months, although it was driven by short-covering in just one commodity, soyoil, and left the net short at a historically high level.
Managed money, a proxy for speculators, cut by more than 60,000 contracts its net long position in futures and options in the main 13 US-traded agricultural commodities in the week to last Tuesday, according to data from the Commodity Futures Trading Commission (CFTC) regulator………………………………………..Full Article: Source

Food commodity prices fall in May to near six-year low: FAO

Posted on 05 June 2015 by VRS  |  Email |Print

The world’s major food commodity prices fell again in May to the lowest level in nearly six years amid a favourable outlook for this year’s harvests, the Food and Agriculture Organisation said Thursday. The FAO food price index averaged 166.8 points in May, down 1.4 percent from April and as much as 20.7 percent from a year earlier, the Rome-based UN agency said in a statement.
It marked the lowest level since September 2009 in the trade-weighted index that tracks prices on international markets of five major food commodity groups: cereals, meat, dairy products, vegetable oils and sugar………………………………………..Full Article: Source

Commodities: Ag Can Make You Gag

Posted on 04 June 2015 by VRS  |  Email |Print

There are certain stories in this business I refer to as “rubber chickens,” after the vaudeville adage that a comedian could always get a laugh with a rubber chicken. One of my favorites is dumping all over the idea that there are things out there called “commodities” that will protect you, the reader/consumer/trader/investor/voter/taxpayer, against the ravages of the inflation your non-elected central bank is trying to push higher.
Let’s take agricultural commodities. The Bloomberg agricultural total return index, which is composed of futures contracts on coffee, corn, cotton, soybeans, soybean oil, sugar and wheat, has lost 28.39% on a trailing one-year basis. This decline has not been confined to a single commodity, but rather has been distributed across all index components………………………………………..Full Article: Source

India: RBI asks banks to create awareness on hedging agri-commodities

Posted on 29 May 2015 by VRS  |  Email |Print

The Reserve Bank of India (RBI) on Thursday advised banks to create awareness among their borrowers for hedging agricultural commodity price risk. “Banks should encourage hedging by the agri-borrowers by creating awareness amongst them regarding the utility and benefits of hedging through agri-commodity derivatives,” RBI said in a notification to all banks. “This would help to develop strong risk management capabilities to manage agri-commodity price risk,” it added.
At the same time, said RBI, “banks must keep the sophistication, understanding, scale of operation and requirements of their agri-borrowers in mind while advising on the availability and use of these instruments.” To begin with, banks were asked to encourage large agricultural borrowers such as agricultural commodity processors, traders, millers and aggregators to hedge their commodity price risk…………………………………Full Article: Source

Hedge funds still gloomy on ags, despite deep cut to wheat shorts

Posted on 26 May 2015 by VRS  |  Email |Print

Hedge funds’ dramatic turn less gloomy view on wheat price prospects has not been reflected in their thinking on ags overall, with corn and soybeans bearing the brunt of fresh bearish positioning. Managed money, a proxy for speculators, lifted its net short position in futures and options in the top 13 US-traded agricultural commodities, from corn to sugar, by 32,354 contracts in the week to last Tuesday, analysis of data from the Commodity Futures Trading Commission regulator shows.
The increase took the net short – the extent to which short holdings, which profit when values fall, exceed long bets, which benefit when prices gain – to 98,548 lots, below the record 142,612 contracts hit last month but a historically large figure nonetheless………………………………………..Full Article: Source

AfDB invests N14 billion in African agriculture

Posted on 25 May 2015 by VRS  |  Email |Print

The African Development Bank, AfDB, said it has invested N14.78 billion (N2.91 trillion) in the agriculture sector of its Regional Member Countries (RMC) in 46 years to grow their economy. Chiji Ojukwu, the Director of Agriculture and Agro-Industry Department of the bank, stated this in a statement published on the bank’s official website.
In the statement, retrieved by the News Agency of Nigeria on Sunday in Lagos, the director said that between 1968 and 2014, the bank group approved 876 operations. These operations had commitments valued at approximately $14.78 billion that provide support to agriculture and rural development………………………………………..Full Article: Source

Hedge funds ‘may cover more shorts in wheat, but not sugar’

Posted on 19 May 2015 by VRS  |  Email |Print

Investors noted scope for further short-covering in wheat derivatives, after hedge funds eased back from a record bearish position, but raised doubts over the appetite for extending a large positive shift in raw sugar.
Managed money, a proxy for speculators, cut by more than 37,000 contracts its net short position in futures and options in the main 13 US-traded agricultural commodities in the week to last Tuesday, according to data from the Commodity Futures Trading Commission (CFTC) regulator………………………………………..Full Article: Source

The real El Niño risks an upset to commodities markets

Posted on 18 May 2015 by VRS  |  Email |Print

Commodity investors are in a twist about the weather. Warmer ocean temperatures last spring indicated an El Niño event was on the horizon, signaling buys, sells, and hedging positions in securities linked to products impacted by storms and droughts. Everything from sugar prices to coffee futures were retooled.
But the El Niño yawned, only to be officially declared this March. That year-long lag crimped the wide commodities market price swings on which traders profit. Now, as the El Niño is unleashed in earnest, producing weather extremes throughout the globe, investors are too timid to try and guess which way the wind is blowing — literally………………………………………..Full Article: Source

Commodity markets wary of false alarm as El Niño blows back

Posted on 14 May 2015 by VRS  |  Email |Print

After a five-year absence, El Niño is back. The last time the weather event emerged in 2009-10, droughts damaged crops in Southeast Asia and Australia sending agricultural commodity prices soaring. First observed in the 19th century by Peruvian fishermen, the recurring weather phenomenon is known to affect Australasia as well South America. Its climatic effects can reach as far as west Africa.
This week’s announcement by the Australian Bureau of Meteorology (BOM) of a “moderate to strong” El Niño emerging this year may lead to farmers and commodity investors adjusting their hedging and positions…………………………………….Full Article: Source

World Seen Saving $153 Billion on Food Bill After Costs Tumble

Posted on 08 May 2015 by VRS  |  Email |Print

Hefty supplies and cheaper shipping costs mean countries will pay less to import food than anytime in the past five years, the United Nations predicted. Food prices globally have fallen for most of the past year given an oversupply in everything from wheat to sugar and dairy, according to a report released Thursday by the UN’s Food & Agriculture Organization.
The group said the world food import bill may drop $153 billion, or 12 percent, to $1.13 trillion this year. While poorer countries, such as those in sub-Saharan Africa, will be able to get cheaper food in the international market, in some cases the benefit is diminished because their currencies have weakened relative to the dollar, the FAO said………………………………………..Full Article: Source

Hedge funds betting on more losses for crops as supplies swell

Posted on 28 April 2015 by VRS  |  Email |Print

With planting conditions improving across the U.S. Midwest, hedge funds are betting that harvests this year will compound a global crop surplus and worsen losses for corn, soybean and wheat prices.
Corn seeding is already ahead of last year’s pace, and recent rains that hampered sowing in some areas will give way to drier conditions this week, according to MDA Weather Services. In the Great Plains, winter-wheat conditions are better than they were in 2014. Record crops in Argentina and Brazil are adding to soybean supplies as U.S. farmers are forecast to plant the most acres ever next month………………………………………..Full Article: Source

Will outlook turn bright for Cotton in CY2015-16?

Posted on 22 April 2015 by VRS  |  Email |Print

At a time when Cotton farmers are committing suicides in India over the depressive price regime, reports suggest that outlook is likely to remain bleak in CY 2015/16. Prices, both international and domestic, are unlikely to see triggers for any upside. China’s new cotton policy has triggered the declining trend for international cotton prices and prices has been traversing the downward trajectory since April 2014. Cotton prices has been range-bound since November 2014 at $1.5/Kg.
The prices remain significantly lower over the previous corresponding period and were lower by 26% in February 2015 on YoY basis. India-based rating firm ICRA in its latest report has predicted that the cotton prices are expected to remain at similar levels in CY 2015/16 with downside bias…………………………………..Full Article: Source

Hedge funds record-bearish ag bets ‘may spur’ price support

Posted on 21 April 2015 by VRS  |  Email |Print

Hedge funds’ bearish betting on agricultural commodities soared to the highest on record, led by selling in grains – spurring ideas of price support for some contracts as speculators’ reassess such downbeat positioning. Managed money, a proxy for speculators, lifted its net short position in futures and options in the top 13 US-traded agricultural commodities, from corn to cattle, by more than 78,000 contracts in the week to last Tuesday, analysis of data from the Commodity Futures Trading Commission regulator shows.
The selling took the net short - the extent to which short holdings, which benefit when prices fall, exceed long bets, which profit when values rise – to more than 142,000 contracts, far exceeding the previous record of 102,126 lots set a month ago…………………………………..Full Article: Source

Food will get cheaper for Americans, and here’s why

Posted on 13 April 2015 by VRS  |  Email |Print

Good news for America’s eaters: Domestic food prices are getting cheaper. As a strong U.S. dollar and bountiful harvest expectations weigh on agricultural commodities, wheat futures have fallen 11 percent this year while live cattle futures are down 10 percent.
Meanwhile, soybeans are down 7 percent, corn is down 5 percent, and sugar futures have fallen by 12 percent—a sharp turnaround from just a couple of years ago, when a drought put severe pressure on crop yields. Overall, the S&P GSCI Agriculture index has suffered the worst first quarter since 1982, falling 7.6 percent………………………………………..Full Article: Source

Cotton, the other globally glutted commodity

Posted on 31 March 2015 by VRS  |  Email |Print

The price of a given commodity is falling, rapidly. A key market has way more of the stuff than it used to. Producers are panicking and trying to shift resources to avoid selling into the glut—not to mention the strong US dollar is making it harder for manufacturers around the world to import what they need.
That’s a scenario that has been playing out a lot recently, as a global economic slowdown (paywall) makes it harder for countries around the world absorb all the natural resources getting plucked and mined from the earth. One of the latest examples: cotton. And the key market stuffed to the brim with it? China………………………………………..Full Article: Source

Hedge funds reduce bearish stance on ags - a little

Posted on 31 March 2015 by VRS  |  Email |Print

Hedge funds reduced, a little, their bearish bets on agricultural commodities, but remained unusually downbeat on price prospects, particularly for the likes of sugar and arabica coffee. Managed money, a proxy for speculators, cut its net short position in futures and options in the top 13 US-traded agricultural commodities, from cotton to cattle, by nearly 24,000 contracts in the week to last Tuesday, according to data from the Commodity Futures Trading Commission regulator.
It was only the second week of 2015 in which hedge funds’ bets on rising crop prices had exceeded those on price falls. Nonetheless, hedge funds remained, overall, net short - meaning that short bets, which benefit when prices fall, exceeded long positions, which profit when values rise………………………………………..Full Article: Source

India: Special commodity markets for perishable commodities proposed

Posted on 24 March 2015 by VRS  |  Email |Print

In order to develop the prospect of onion and other perishable commodities like vegetables in the domestic and international market, the ministry is proposing to set up special commodity markets with processing units for perishable vegetables.
These commodity markets will be developed through the state APMCs by providing special incentives and subsidies by ministry of agriculture. This discussion has taken placed between State of Maharashtra, Government of India and National Horticultural Research and Development Foundation (NHRDF) in the context of development of onion and garlic market………………………………………..Full Article: Source

Ag prices ‘may rebound’, after hedge funds turn most bearish ever

Posted on 24 March 2015 by VRS  |  Email |Print

Agricultural commodity futures may be poised for a wave of support from covering of short bets, after a selldown by hedge funds left them, by a distance, with their most bearish ever positioning. Managed money, a proxy for speculators, dropped long positions on agricultural commodities by more than 40,000 lots in the week to last Tuesday, while hiking short bets – which profit when prices fall - by some 110,000 contracts, regulatory data show.
The resulting swing net short in positioning by 151,826 contracts was the largest in nearly two years. And it drove the overall position into a net short – the extent to which short holdings exceed long ones - of 102,126 lots, by far the biggest on Commodity Futures Trading Commission data going back to 2006………………………………………..Full Article: Source

Hedge funds cut bullish bets on ags to second lowest on record

Posted on 17 March 2015 by VRS  |  Email |Print

Hedge funds cut their bets on rising agricultural commodity prices to the second lowest on record, thanks to more bearish takes on grains and soybeans, and a record net short position in sugar.
Managed money, a proxy for speculators, cut its net long position in futures and options in the top 13 US-traded agricultural commodities, from cotton to cattle, by nearly 84,000 contracts in the week to last Tuesday, according to data from the Commodity Futures Trading Commission regulator. The reduction took the overall net long to 49,700 contracts, the second lowest on data going back to 2006………………………………………..Full Article: Source

Sugar - A Sweet Commodity; A Sour Market

Posted on 17 March 2015 by VRS  |  Email |Print

Historically, sugar is one of the most volatile commodities that trades on futures exchanges. However, volatility in the sweet commodity has fallen to historically low levels and has remained there since 2013. Sugar has been in a bear market since it made highs of more than 36 cents per pound in 2011.
Last week the sugar price continued to weaken. There are many reasons for a falling sugar price including a strong U.S. dollar, a global surplus of sugar and a bear market in raw material prices that started in 2011. However, now sugar has fallen to a critical level and the prospects do not appear to be too sweet………………………………………..Full Article: Source

Commodities Decline Near ‘Exhaustion’ as Hackett Says Buy Rice

Posted on 16 March 2015 by VRS  |  Email |Print

The commodities fall is near “exhaustion” with wheat, rice and coffee set to rebound, according to Shawn Hackett, president of Hackett Financial Advisors in Florida. The Bloomberg Commodity Index of 22 raw materials closed on Friday at the lowest level since August 2002, capping an almost 30 percent decline in the past year.
Wheat dropped 25 percent in the past 12 months and rice fell 30 percent. Arabica coffee slipped 37 percent as Brazil’s weak real currency encouraged exports, adding to supplies. “For speculators wheat and rice are the two markets that are the ones to buy given that both have the lowest supplies relative to global demand,” Hackett said in an e-mailed report on Saturday………………………………………..Full Article: Source

Hedge funds cut bullish ag bets at fastest pace in 20 months

Posted on 10 March 2015 by VRS  |  Email |Print

Hedge fund optimism in agricultural commodity prices, as measured by positioning in derivatives, plunged at its fastest rate in 20 months, led by a surge in pessimism over values of wheat and sugar, in which bearish bets hit a record high.
Managed money, a proxy for speculators, slashed by nearly 130,000 contracts its net long position in futures and options in the main 13 US-traded agricultural commodities in the week to last Tuesday, according to data from the Commodity Futures Trading Commission (CFTC) regulator………………………………………..Full Article: Source

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