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U.S. Farm Income Will Drop for Third Year in Commodity Slump

Posted on 10 February 2016 by VRS  |  Email |Print

The U.S. Department of Agriculture forecast that farmers will face a drop in profit for the third straight year as persistent surpluses depress crop and livestock prices. Farm net income will be $54.8 billion in 2016, the USDA said Tuesday in a report on its website, 2.8 percent less than the $56.4 billion estimated for 2015.
The hard times follow an era of record profit that peaked at $123.3 billion in 2013, when rising global demand combined with a domestic drought that crimped supplies of corn and cattle, while a virus devastated hog herds. Direct government farm-program payments are forecast to rise 31 percent to $13.9 billion in 2016 with the 2014 Farm Bill’s price-loss and risk coverage accounting for almost two-thirds of the total………………………………………..Full Article: Source

A contrarian view on soft commodities

Posted on 05 February 2016 by VRS  |  Email |Print

The agricultural sector has been in negative territory for five years, putting specific food and food input companies at attractive valuations, according to Baring. Oil aside, other commodities such as food inputs have also fallen out of favour. The cumulative one-, three- and five year returns for the agriculture sector have all been double-digit negative.
But James Govan, manager of the Baring Asset Management’s Global Agriculture Fund believes opportunities this year are emerging in the agricultural value chain, particularly in the health and wellness niche, driven by the demand for healthier food………………………………………..Full Article: Source

Egypt to launch agricultural commodities bourse by year-end

Posted on 02 February 2016 by VRS  |  Email |Print

Egypt plans to launch an agricultural-focused commodities trading exchange, the first of its kind in the Middle East, by the end of 2016, Supplies Minister Khaled Hanafi said. Speaking at a press conference announcing the completion of a feasibility study on the new bourse, Hanafi said its launch would protect small farmers from volatile price swings and help to connect their output to supply chains.
“Egypt is the biggest importer of grains, and it will benefit from this, turning this from a point of weakness into a strength as Egypt becomes a point of exchange for the whole region,” said Hanafi………………………………………..Full Article: Source

Will El Nino’s sister hold sway in 2016?

Posted on 29 January 2016 by VRS  |  Email |Print

The El Nino weather phenomenon wreaked havoc worldwide last year. Its counterpart, La Nina, could cause more trouble in 2016.
The term El Nino, Spanish for “the boy,” was coined by Peruvian fishermen to refer to a warm ocean current that typically arrives around Christmas time. This warmth affects weather around the globe. Last year, it was blamed for droughts in Thailand and Indonesia, among other extreme conditions………………………………………..Full Article: Source

Hedge funds cut bearish ag bets for first time in 2016

Posted on 26 January 2016 by VRS  |  Email |Print

Hedge funds turned less downbeat in bets on agricultural commodities for the first time since before Christmas – but wheat largely missed out on the move, raising ideas of the potential for some price support.
Managed money, a proxy for speculators, cut its net short position in futures and options in the top 13 US-traded agricultural commodities, from soybeans to cocoa, by 87,632 contracts in the week to last Tuesday, analysis of data from the Commodity Futures Trading Commission regulator shows………………………………………..Full Article: Source

Is 2016 the Year for Sweet Commodities?

Posted on 19 January 2016 by VRS  |  Email |Print

2015 was a disaster for commodity markets as the S&P GSCI, an index that tracks commodities, fell 32%. The 2016 outlook for commodity markets is not much better, except for cocoa and sugar, two commodities that yielded positive returns in 2015. In fact, cocoa was the best performing commodity last year with prices up 10%.
The increase in price is partly linked to the surge in chocolate consumption in India and China. According to Euromonitor International, chocolate demand in India has been growing 17% a year since 2010, faster than any other country in the world. In China, demand has been rising nearly 9% per year over the same period………………………………………..Full Article: Source

How Commodities and Regions Perform During the El Niño Effect

Posted on 15 January 2016 by VRS  |  Email |Print

Financial markets are notoriously fickle and events ranging from geopolitical crises to weather patterns can impact them dramatically. Right now, the El Niño weather phenomenon is in effect and is estimated to stick around until around the second quarter of this year, and it’s already having an impact on certain market sectors and commodities.
Some effects of El Niño can be predicted in advance, such as California receiving precipitation after its long drought spell and Southeast Asia seeing just the opposite with less rainfall. The severity of the current El Niño effect is one of the strongest on record and many scientists have attributed the wave of intensifying weather to changing global climates. Whatever the cause, the effect it’s having on the global economy is significant………………………………………..Full Article: Source

El Nino is likely to push farm commodities higher in 2016

Posted on 08 January 2016 by VRS  |  Email |Print

It might have been a treat for New Yorkers to stroll around in shorts as they basked in unseasonably balmy temperatures over the Christmas season, but the winter warmth felt across large parts of the U.S. and Europe spelled further gloom for commodities.
Along with the downturn in China, El Nino was a key theme in commodities in 2015, and its effects can only be accurately calculated in 2016. While little reprieve can be seen for oil and gas prices, crop shortages in 2015 could lend some support to the value of agricultural commodities. Warm weather in the Northern Hemisphere in December sapped demand for heating, sending crude oil prices to fresh six-year lows………………………………………..Full Article: Source

After El Niño, commodity markets brace for La Niña

Posted on 06 January 2016 by VRS  |  Email |Print

The strongest El Niño in almost two decades that caused droughts in Asia and was linked to storms in the UK could be followed by the opposite weather phenomenon. Australia’s Bureau of Meteorology said the chances of a La Niña event in the second half of 2016 were equal to those of conditions returning to neutral.
Farmers, miners and commodities traders will be keeping a close watch on sea temperature patterns linked to La Niña, which tends to bring rainfall to Southeast Asia and Australia and dryness to the US Midwest. Significant La Niñas tend to be linked to increased levels of volatility on agricultural markets, according to CME Group………………………………………..Full Article: Source

Why 2015’s Best Commodity Could Turn Into This Year’s Nightmare

Posted on 06 January 2016 by VRS  |  Email |Print

Last year’s best-performing commodity is poised to become the market’s worst nightmare. After the longest rally in London cocoa futures since at least 1989, farmers from Ivory Coast to Peru are preparing to revive supplies in the 2016-17 season that starts in October, creating a surplus that Rabobank International says will be the largest in six years.
With demand slowing, the bank is most bearish about prices for the chocolate ingredient this year among the dozen agricultural commodities it tracks. Prices surged 60 percent during a four-year rally through 2015, forcing candy makers from Hershey Co. to Lindt & Spruengli AG to charge more for their products………………………………………..Full Article: Source

Hedge funds bet on further ag price falls - after ‘destructive’ 2015

Posted on 06 January 2016 by VRS  |  Email |Print

Hedge funds bet on further declines in ags in 2016, even after a year termed by the Bcom as the “most destructive crash in a generation” for commodities as a whole, helped by 19% losses for grain and livestock bulls.
Managed money, a proxy for speculators, undertook a hefty selldown in the top 13 US-traded agricultural commodities in the week to December 29, to return to a net short position which has been unusual by historical standards, analysis of regulatory data overnight reveals………………………………………..Full Article: Source

Agri commodities go through the wringer

Posted on 28 December 2015 by VRS  |  Email |Print

The year 2015 was hard to forget for commodities. While major metals suffered their worst falls since 2008, agri commodities witnessed mixed fortunes. It was a good year for some agri-commodities, not so for others. But one thing in common for both the gainers and losers was they witnessed similar volatility.
Most agri commodities futures contracts on the National Commodity and Derivatives Exchange (NCDEX) witnessed wild swings. Either they moved up sharply initially in the first half of the year and then fell back strongly thereafter or vice-versa. Here, we take stock of the performance of the most actively traded agri commodities in the domestic exchange………………………………………..Full Article: Source

El Nino Batters Pacific Rim Agriculture

Posted on 28 December 2015 by VRS  |  Email |Print

While the climate phenomenon called El Niño has brought near-ideal growing conditions for many farmers throughout North America and South America in 2015, it has wreaked havoc on the agriculture of other countries around the Pacific Rim. From dry cattle pastures in Australia to struggling coffee farms in Vietnam, El Niño has struck several nations in the Asia-Pacific region hard this year, the Wall Street Journal reported.
The world has been experiencing the effects of the most impactful El Niño since the 1990s, meteorologists said. El Niño is associated with an increase in ocean temperatures, which can lead to droughts in some areas and floods in others. Such changes in weather can have major consequences for agriculture either way………………………………………..Full Article: Source

Global cotton glut bad news for bulls

Posted on 14 December 2015 by VRS  |  Email |Print

There’s enough cotton sitting in global warehouses to make more than 127 billion T-shirts, or 17 for each person on the planet. That’s bad news for investors betting prices will rise.
World inventories at the end of this season will be the second-largest ever, just slightly less than last year’s record, according to a US Department of Agriculture forecast last week. That’s a signal supplies will remain ample even after the agency cut its outlook for production. Hedge funds raised their bullish cotton bets to the highest in more than a year, only to face the first weekly price drop since early November………………………………………..Full Article: Source

Global warming a threat to commodities such as cocoa and coffee, businesses warn

Posted on 10 December 2015 by VRS  |  Email |Print

Common commodities such as cocoa and coffee are under threat from global warming, businesses have warned as they backed a strong climate deal at international talks in Paris. Barry Parkin, global sustainability director at Mars, said the company sourced much of its supply chain of products, from cocoa to sugar, mint and vanilla, from smallholder farmers who are threatened by rising temperatures.
He said: “We’re a food company, based on agriculture, and when you look at agriculture, we buy from the equivalent of about a million farmers, and most of those farmers, large numbers of them, are smallholder family farmers in the developing world, who are often subsistence farming, and they are the most vulnerable.”……………………………………….Full Article: Source

Merricks Capital says El Nino to create soft commodities buying opportunity

Posted on 03 December 2015 by VRS  |  Email |Print

The year has been a brutal one for commodity traders of all shapes and sizes with everything from copper to soybeans on the receiving end of a savage sell-off. The Thomson Reuters commodities index is down 20 per cent this year driven by oil and copper but a range of soft commodities have also contributed to the fall. The price of soybeans, for instance, has fallen 13 per cent this year, trading at a six-year low.
Both smart and dumb money is betting on further falls. Speculative short positions in soft commodities are at record levels while money in passive soft commodity funds further drains away as investors reallocate to better opportunities………………………………………..Full Article: Source

Currency swings cloud agriculture price drop

Posted on 03 December 2015 by VRS  |  Email |Print

“Way down among Brazilians, coffee beans grow by the billions . . . They’ve got an awful lot of coffee in Brazil,” sang Frank Sinatra in The Coffee Song . At first glance, this may seem to be the case for the South American country, with the arabica bean’s price plunging 30 per cent this year and its coffee exports at a record.
But this year’s coffee bear market has been heavily influenced by currency volatility rather than actual supply, say traders and analysts. “Foreign exchange has been a huge factor,” says Kona Haque, head of research at commodity traders ED&F Man………………………………………..Full Article: Source

Global action needed to protect agriculture sector from climate change

Posted on 30 November 2015 by VRS  |  Email |Print

On the final day of the National Consultation on Crop Loss Estimation, Relief and Compensation, NGO Centre for Science and Environment (CSE) called for global action to develop safety nets to shield farmers from the consequences of extreme weather events.
The negotiators at the climate talks, starting shortly in Paris, need to be mindful of the impact of changing climate on agriculture, and the devastating consequences it has on farmers as well as the food security prospects of the world,” said CSE’s Deputy Director General Chandra Bhushan who is leading a delegation of CSE specialists and Indian media to Paris……………………………………….Full Article: Source

Agriculture left out of emissions review

Posted on 25 November 2015 by VRS  |  Email |Print

The Emissions Trading Scheme is up for review, but the government has controversially left agriculture out of the discussion document. Opposition parties argued the sector must be included because it was responsible for about half of New Zealand’s greenhouse gas emissions.
Passed into law by the former Labour-led government, the Emissions Trading Scheme is the government’s primary tool to try to reduce climate-damaging emissions. The original ETS had agriculture entering the scheme in 2013, but when National took power, it pushed that out to 2015, then legislated to keep it out of the scheme indefinitely………………………………………..Full Article: Source

Hedge funds near-eliminate their net long in ags

Posted on 24 November 2015 by VRS  |  Email |Print

Hedge funds all but wiped out their net long position in derivatives in the main agricultural commodities, led by selldowns in coffee, and in wheat, in which unexpectedly bearish positioning could set the scene for a price bounce.
Managed money, a proxy for speculators, cut its net long position in futures and options in the top 13 US-traded agricultural commodities, from corn to cotton, by a little over 59,000 contracts in the week to last Tuesday, analysis of data from the Commodity Futures Trading Commission regulator shows………………………………………..Full Article: Source

El Nino Heating Up Commodity ETF Impacts

Posted on 19 November 2015 by VRS  |  Email |Print

Record high temperatures in October may be a prelude to a strengthening El Nino weather pattern, potentially leading to opportunities in the commodities space and related exchange traded products. Last month was the hottest October since records have been kept in the past 136 years and the eighth record-breaking month so far this year, reports Tom Randall for Bloomberg.
This week, the El Nino phenomenon started setting records as well, with some of the highest weekly temperatures ever recorded across the equatorial Pacific. Even if November and December show unusually cool temperatures, which observers highly doubt, the past few months have been so sizzling that 2015 will go down as the hottest year on record………………………………………Full Article: Source

Agricultural Giants Look to Join Forces

Posted on 06 November 2015 by VRS  |  Email |Print

Some of the world’s largest agricultural companies are looking to combine with one another as three years of shriveling crop prices have pressured profits, in what would be the industry’s first big shake-up in at least a decade.
Syngenta AG is discussing with DuPont Co. a potential combination with DuPont’s agriculture division, according to people familiar with the matter. DuPont is also separately discussing a potential alternative agriculture deal with Dow Chemical Co., which is exploring a sale of its seed and pesticide unit, another person familiar with the matter said………………………………………..Full Article: Source

El Niño is drying up gains for this major currency

Posted on 05 November 2015 by VRS  |  Email |Print

El Niño is wreaking havoc in the currency market. Since the week began, the New Zealand dollar has shed 3.1% of its value against the dollar—reversing more than half of its monthly gain for October, when it was the best-performing currency among its G-10 peers.
Analysts have attributed its declines to the weather phenomenon, which could drastically reduce crop yields. This is a major problem for an economy that is dependent on agricultural exports—and many believe it will further weaken the kiwi. “It’s definitely a material risk in our view,” said Adam Cole, head of G-10 FX Strategy at RBC Capital Markets………………………………………..Full Article: Source

Africa should invest in agriculture

Posted on 03 November 2015 by VRS  |  Email |Print

About 65 per cent of the African population lives in rural areas and relies on agriculture as the prime source of income; this is according to John Magnay, head of agriculture finance at Opportunities International.
Opportunity International is a non-governmental organisation working to end global poverty by creating/sustaining 20 million jobs by 2020. The head of agriculture finance called for improved investment in the sector as a step towards ending poverty, creating household disposable incomes and jobs in the region………………………………………..Full Article: Source

Hedge funds turn bearish on wheat at fastest pace on record

Posted on 27 October 2015 by VRS  |  Email |Print

Hedge funds sold wheat at the fastest rate on record as forecasts for rain eased concerns over autumn-sown crops in the former Soviet Union and US, but speculators maintained their faith in a sugar rally. Managed money, a proxy for speculators, cut its net long position in futures and options in the top 13 US-traded agricultural commodities, from corn to cattle, by nearly 77,000 contracts in the week to last Tuesday, analysis of data from the Commodity Futures Trading Commission regulator shows.
The cut in the net long - the extent to which long bets, which profit when values rise, exceed short holdings, which benefit when prices fall – was the first in a month………………………………………..Full Article: Source

The El Niño Effect: What It Means for Commodities (Video)

Posted on 23 October 2015 by VRS  |  Email |Print

El Niño’s effects are just beginning in much of the world — for the most part, it hasn’t really reached North America — and yet it’s already shaping up potentially as one of the three strongest El Niño patterns since record-keeping began in 1950. Bloomberg’s Brian Sullivan and Marvin Perez have more on “Bloomberg Markets.”.………………………………………Full Article: Source

No to ‘Climate Smart Agriculture’, yes to agroecology

Posted on 22 October 2015 by VRS  |  Email |Print

Climate Smart Agriculture sounds like a great idea, write hundreds of civil society organisations worldwide. But in truth it’s a PR front for international agribusiness to promote corporate agriculture, pesticides and fertilisers at COP21, with a heavy dose of greenwash. Countries must resist the siren calls - and give their support to true agroecology that sustains soil, life and climate.
We, the undersigned, belong to civil society organizations including social movements, peasants / farmers organizations and faith-based organizations from around the world………………………………………..Full Article: Source

Hedge funds, again, lift bets on ag commodity price rises

Posted on 20 October 2015 by VRS  |  Email |Print

Agricultural commodities grew further in affections of hedge funds, who extended upbeat bets on sugar to a 15-month top, with hogs firmly in favour too, although sentiment cooled towards the main Chicago grains.
Managed money, a proxy for speculators, raised by more than 57,000 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

The World Bank Group’s 2013-15 Agriculture for Action Plan

Posted on 15 October 2015 by VRS  |  Email |Print

A look at the history of the World Bank’s approach and the crises that led up to the Agriculture for Development report. And a review and discussion of the Action Plan including examples of the challenges peasants face in the wake of World Bank Group projects.
Released in January 2013, the World Bank Group 2013-2015 Agricultural Action Plan provides a roadmap for the second phase of operationalizing the World Development Report 2008: Agriculture for Development. Ostensibly, the Plan is designed to improve rural livelihoods and support global food security by addressing climate change, rural gender inequality, market access and investment needs for agriculture………………………………………..Full Article: Source

Here’s How El Niño Could Affect Your Portfolio

Posted on 14 October 2015 by VRS  |  Email |Print

Earlier this year, forecasts for the El Niño weather phenomenon pushed many investors to enter the commodity space on expectations that food prices were going to rise. For those that did, recent reports from government officials that the weather pattern could be its most severe in almost 20 years have been good news.
Farmers are already warning about crop shortages and several agricultural products have seen sharp gains in response. Last week, the United Nations’ Food and Agriculture Organization reported that global food prices increased for the first time in more than a year, a sign that the agriculture space is already beginning to feel the pinch………………………………………..Full Article: Source

Commodities Prices Are Heating Up on El Niño

Posted on 13 October 2015 by VRS  |  Email |Print

The El Niño weather phenomenon is starting to push up prices for agricultural commodities as its impact spreads through key crop-growing regions in Asia and beyond. Government forecasters in the U.S. and Australia have in recent weeks warned that El Niño could be the severest in nearly two decades.
Late last week, the Japan Meteorological Agency said sea surface temperatures in the Pacific are “remarkably above normal” and warned that temperatures could even reach their highest level since 1950. In turn, farmers are warning of potential damage to their output. Sugar farmers in Brazil say heavy rain could reduce the sugar content of their cane, while farmers in Australia, Asia and parts of Africa say dry conditions could hit production of crops such as palm oil, wheat, cocoa and coffee………………………………………..Full Article: Source

India: Agri commodities: Sebi trains focus on curbing speculation

Posted on 12 October 2015 by VRS  |  Email |Print

In its expanded role as regulator of the commodities derivative market, Sebi is working on a robust mechanism to ensure fair price discovery of agri products and curb excessive speculative activities. The regulator has already sought help from the Ministry of Agriculture with regard to the physical market price data sources and for improving the methodology for determination of final settlement price.
Sebi’s focus is to ensure that derivatives trading is used as a hedging instrument by farmers and others in the commodities marketplace against seasonal and unforeseen price fluctuations rather than for creating speculative bubbles to make quick money, a senior official said. ……………………………………….Full Article: Source

How El Nino Could Rescue Global Growth and Commodities

Posted on 07 October 2015 by VRS  |  Email |Print

Weather forecasters are fairly confident that the world is experiencing the strongest El Niño phenomenon since 1997-1998, a climate pattern that features increased ocean temperatures and disruptive rainfall and drought events around the world. You’d expect anything that wreaks meteorological havoc to drive up food prices.
But surprisingly, it may also boost both inflation and gross domestic product — which if true would be great news for central bankers struggling to combat the twin threats of faltering growth and stagnating consumer prices. Quick Take on El Niño: Economists Paul Cashin, Kamiar Mohaddes and Mehdi Raissi published an International Monetary Fund paper earlier this year making just that case………………………………………..Full Article: Source

Rice Is Commodity Winner as Weather Cuts Crop in Southern U.S.

Posted on 24 September 2015 by VRS  |  Email |Print

While adverse summer weather conditions in the U.S. have failed to give much of a boost to either corn or soybean prices, one crop is surging: rice. Rough rice traded in Chicago is up 22 per cent in the third quarter, the best performer among commodities futures tracked by Bloomberg.
Domestic output is estimated to fall 14 per cent in the crop year that began 1 August to 18.95 billion pounds, the U.S. Department of Agriculture said 11 September. The harvest in Arkansas, the largest growing state, is showing “dismal” yields, according to a USDA report last week. Texas had a record wet month in May and other southern growing states saw above-average temperatures in July………………………………………..Full Article: Source

Grain Prices to Weaken on Less Severe El Nino Weather, Olam Says

Posted on 17 September 2015 by VRS  |  Email |Print

Olam International Ltd., one of the world’s largest food commodities traders, expects grain and oilseed prices to weaken further because the El Nino weather phenomenon will be less harmful to harvests than feared. “We are bearish,” Olam Chief Executive Officer Sunny Verghese said in an interview in London on Tuesday. “El Nino will not be as severe” as many in the agricultural commodities market expect, he added.
Meteorologists from Australia to the U.S., who have predicted the current El Nino may become one of the strongest ever recorded, matching the 1997-98 event that ruined crops with droughts and floods. El Nino can affect weather worldwide — and hence, crops — by baking Asia, altering rainfall across South America and bringing cooler summers to North America………………………………………..Full Article: Source

Global food prices see sharpest fall since 2008

Posted on 16 September 2015 by VRS  |  Email |Print

Global food prices experienced their largest monthly decline in seven years throughout August. US-based Food and Agriculture Organisation (FAO)’s food price index shows prices were down 5.2 per cent to an index of 155.7. Prices have fallen 21.5 per cent since last August.
The organisation said ample supplies as well as falling energy prices and concerns about the Chinese economy and its potential effects drove the declines. “The decline affected all the commodities tracked by the index, except for meat, the prices of which remained generally steady,” an FAO spokesman said………………………………………..Full Article: Source

Hedge funds extend selldown on ags - despite sugar buyback

Posted on 15 September 2015 by VRS  |  Email |Print

Hedge funds extended to an eighth successive week their bearish positioning in the top US-traded agricultural commodities, led by a selldown in grains, which more than offset a more upbeat stance on sugar.
Managed money, a proxy for speculators, cut by more than 27,000 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

As Commodities Slump, Rubber Falls More

Posted on 09 September 2015 by VRS  |  Email |Print

Rubber has emerged as one of the worst performers amid the slump in global commodities in recent weeks, thanks to a continuing glut of the material, used in products from tires to condoms. While copper is down 15% in the last three months and West Texas Intermediate crude oil has slumped 23%, benchmark rubber futures traded in Tokyo have sunk 27% to ¥167.80 a kilogram, around their lowest level for six years.
Rubber’s lack of bounce highlights how as demand growth slows in key markets, the most vulnerable commodities are those whose producers have been unable to tame output over recent years………………………………………..Full Article: Source

Hedge funds extend bearish ag spree to longest in a year

Posted on 08 September 2015 by VRS  |  Email |Print

Hedge funds took their selldown in ags to the longest this year as they turned more bearish in particular on cotton and wheat, more than offsetting the impact of a short-covering wave 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 more than 31,000 contracts in the week to last Tuesday, according to data from the Commodity Futures Trading Commission regulator.
The decline in the net long - the extent to which long positions, which profit when values rise, exceed short bets, which benefit when prices fall – was the seventh weekly drop in succession, the longest negative streak on positioning in more than a year………………………………………..Full Article: Source

El Niño Sends Strong Signal as Pacific Temperatures Soar

Posted on 02 September 2015 by VRS  |  Email |Print

A strong El Niño has sent sea temperatures in parts of the Pacific Ocean to their highest level since the late 1990s, Australia’s government weather watchdog said Tuesday. The water in some areas is now within 0.9 degree Fahrenheit (0.5 degree Celsius) of the level seen during the El Niño of 1997-8, Australia’s Bureau of Meteorology said, with temperatures expected to peak later this year.
El Niños occur when winds in the equatorial Pacific slow or reverse direction, causing the water to warm over a vast area, which in turn can upend weather patterns around the world. The El Niño of the late ’90s brought severe drought to parts of Southeast Asia and heavy flooding to North America. This year’s hasn’t yet had such dramatic effects, and experts say the likely impact is still hard to predict………………………………………..Full Article: Source

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

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