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Commodities Briefing - Category | Agriculture more

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

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

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