Cornwill – Newlyn http://newlyn.info/ Tue, 11 Jan 2022 22:25:10 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 https://newlyn.info/wp-content/uploads/2021/06/cropped-icon-32x32.png Cornwill – Newlyn http://newlyn.info/ 32 32 Navigating the Ever-Changing Value of American Farms https://newlyn.info/navigating-the-ever-changing-value-of-american-farms/ Tue, 11 Jan 2022 22:25:10 +0000 https://newlyn.info/navigating-the-ever-changing-value-of-american-farms/

Jim Knuth of Farm Credit Services of America recently spoke at Land Expo 2022 about the changing land value landscape in America and how farmers who use the land can make the most of it. He covered three topics – land values, interest rates and grain production.

The value of the land

For the first time since 2014, there has been a movement in land values. This year marks the biggest one-year trend in benchmark history, Knuth says. He says it makes sense to look at land value numbers and expect them to stabilize soon.

“Do I think this trend will continue until 2022?” said Knuth. “I don’t know, but unlikely. Some of the tailwinds are not as strong going forward. Why did all this happen? The stars are all aligned. We’ve had interest rates pushed to the bottom by the pandemic and much higher grain product prices with all the influx of government money.

Knuth says we also have the answer to what would happen if a significant amount of land came on the market – it would be taken up by willing buyers, because it’s not hard to come by. Buyers have collateral and capital and the ability to absorb market supply. But Knuth says there’s a reason this economic trend won’t last.

“The real question, as we look at the market today, is how it will continue to balance the long-term nature of the land asset with some of the short-term,” Knuth says. “How long will these margins last? How long will all of this last? I think that’s the key to moving forward.

Interest rate

2021 has been a dynamic year for interest rates, says Knuth. The three factors that determine interest rates and monetary policy are inflation, unemployment and consumer spending. Agriculture does not intervene much in monetary policy, despite the impact of monetary policy on agriculture.

What can the Federal Reserve do? It can increase short-term or variable interest rates. Knuth predicts that will come in what he calls modest 25-point increases in March and repeat three or four times this year.

“That means we’re going to be at 4%, maybe 4.25%,” Knuth says. “Then it’s going to reduce its bond-buying activity. In other words, it’s going to take demand or liquidity out of the market. It’s already doing that. have already seen in our 10-year cash benchmark.

However, says Knuth, a rise in interest rates does not mean high interest rates, as the industry is emerging from a year of historically low interest rates.

Another option available to the Federal Reserve is to keep interest rates the same, but extend the duration from 20 to 30 years.

“Right away you see this and you’re like, ‘Wow, this savings is double the interest rate,'” Knuth says. “That’s the point that a lot of people don’t understand. Generally, it is the term or amortization of your debt that has the greatest impact on payment, cash flow relief and restructuring.

Knuth says the best bet is to both raise short-term interest rates and extend the term to create a third option.

“Do you know what the price of maize will be in two, three or five years? asks Knuth. “No, neither do I. The goal is to take as much payback time as possible. Take advantage of all the flexibility you can get, because when times get tough, you might need it. But when things are going well, understand what you’ve done and repay that debt ahead of time. It’s a bit like having your cake and eating it too.

Grain production in agriculture

According to Knuth, corn and soybeans are not supply-driven commodities like some of their agricultural counterparts, but demand-driven. The United States used to produce over 2.2 billion bushels of corn, but now produces less than 1.5 billion. Knuth says the corn demand boom came from China, and now we see less demand from them and therefore less corn production.

After a historic spike in demand, Knuth says growers should consider their planting and sales momentum for 2022 and 2023.

“2022 is shaping up to be another profitable year,” says Knuth. “Our prices are good, but our only caution is to prepare for margin compression. I would prepare for margin compression because everything is more expensive. Fertilizers are obvious, but it’s also fuel, seeds , cash rents and machinery.

Risk management and marketing decisions are going to be very important this year, and Knuth says he expects volatility in the markets. However, he said volatility doesn’t always mean bad things; it can bring opportunities if you are ready for them.

food for thought

Knuth says there are several important lessons learned from the last time we saw this type of economic cycle that we need to bring into 2022.

“This party is also going to end,” Knuth said. “I think the key is what insights, insights, and realities can we take from the last upward economic cycle that we can apply to today?”

The first lesson concerns the cost structure. During up cycles, it can seem like farmers can afford every new machine and still break even. Thinking about capital expenditures and expansion, thinking ‘What will this do to your costs?’ can help set up a good cost structure.

“Remember, the goal of every grain farmer is to have a high-revenue, low-cost operation,” says Knuth.

Working capital is balance sheet risk management. Working capital is the first wall of defense in absorbing risk, says Knuth. If you have cash, you have the flexibility and ability to cover your own borrowings. Any business is difficult to operate without working capital.

When considering financial decisions, consider all of your assets.

“We’ve seen a lot of farmers thinking about their operation in pieces,” says Knuth. “That thought is actually wrong. This can really lead to poor decision making.

Knuth says it’s important to look at farmland per acre, or machinery equipment costs per acre, and look at your operation holistically.

At the same time, trying to understand your financial situation can be difficult. Knuth also recommends looking at your operation after capital expenditures. Thinking about what the operation will look like once the decision is made – how it will affect your cost structure or working capital, the financing it requires – can be a huge asset in deciding if it is worth it.

Knuth’s final lesson is that agriculture will continue to have a dividing line. The difference he sees isn’t in the way you fertilize, the crops you grow, or the color of the machines you use.

“Producers who increase their business and their finances are rewarded. They keep breaking up,” Knuth says. “What they do is quite simple. They spend as much time in their office as they do in their store and fields, and they spend as much time running their business as they do operating the tractor and the combine harvester.

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Special Market Update – January 11, 2022 https://newlyn.info/special-market-update-january-11-2022/ Tue, 11 Jan 2022 21:56:48 +0000 https://newlyn.info/special-market-update-january-11-2022/

Cereal Market Commentary

Tuesday, January 11, 2022

by Rhett Montgomery, Associate Dealer, The Andersons

But

March old crop corn ended up 1.25c today, closing at $6.01, while December new crop corn closed at $5.5750, up $6.01. half a cent.

The trade continued its choppy action ahead of the USDA WASDE report released tomorrow at 12:00 p.m. EST. The recent trade is indicative of the differing opinions on tomorrow’s report in trading, as well as the importance of this report in terms of setting an overall tone for the market. The big numbers to watch on corn will of course be the national yield estimate, but perhaps more important will be how the USDA compensates for any yield increases/decreases with demand adjustments. It could be argued that the USDA is low on its ethanol consumption, but perhaps a bit high on its export forecast. The current carry is 1.493 billion, a move above 1.5 billion would be bearish and would likely mean a corn price in the low to mid $5 range would be fair. When assessing the potential impact of the postponement on prices, it should be recalled that the trade assumed a potential postponement of less than 1 billion bushels last year to push prices to $7.70 and above. Either way, we’re looking at a little more corn supply in the mix this year. The market will also be watching for any reduction in the South American corn crop, this recent weather warning may be a little early to have a big impact on Brazilian production as the second crop has yet to be planted and is the more important of the two. Conab reduced Brazil’s estimate for today’s -4 MMT to around 113 MMT due to the drought, but it should be noted that this is still a 26 MMT increase year over year. another, and currently of a record.

In technicals, the market tested the $6.00 mark on forward month futures for the 4and straight day today, and regardless of a close of $5.9975 yesterday, managed to close above that mark today at $6.01. The market is clearly unwilling to price corn below $6 today given tomorrow’s report and is ready to wait and see where the balance sheet goes. On a bullish report tomorrow, the upside targets to keep in mind will be the $6.18 mark hit on the 28thand from December, and beyond, the bulls will target $6.30 to $6.40. $6.4050 is the March CH22 corn contract high. Downside support for a bearish report will first be seen at $6.00, below a move back into the $5.80-$5.90 range, and beyond that the bears will be looking at the 100 and 200 day moving averages at $5.64 – $5.60 respectively.


Soy

March old crop soybeans closed at $13.8650, up 1.75c. New crop November beans were down half a cent at $13.00.

Today has been a relatively calm day for beans, especially compared to the past few weeks which have seen large ranges as well as a sharp rise in prices, with March beans up over $1.50 since inception. December due to weather concerns in South America. Conab-Brazil cut its soybean estimate today by a few million metric tons, but it still sits at a record estimate. The harvest in Brazil is just starting to start for soybeans. Trade estimates in tomorrow’s USDA report call for a slight reduction in yield, but there are enough demand concerns that the average carryover assumption is 8 million bushels higher. Exports are obviously the primary concern, with the USDA well behind last year’s pace and the pace set by the USDA while entering a period seasonally dominated by South America. While tomorrow’s report will certainly carry some weight, the most important development to watch may be the rains in South America going forward, if tomorrow’s report is fairly neutral I would expect trade quickly back into the weather market as it has been for the past 3-4 weeks.

Technically, the market managed to close above $14 for the first time since June 2021, but couldn’t hold that and quickly fell back to the 13.80-13.90 area. $. Any continued rally from here will target $14, consecutive closes above this mark would make a run to contract highs of $14.35-50 the next target. Support on the downside would be at $13.35 and below the $13 mark where the bears will look for any potential selling fueled by tomorrow’s report.

Andersons Special Market Report

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Corn traders juggle knives in the coming year | Harvests https://newlyn.info/corn-traders-juggle-knives-in-the-coming-year-harvests/ Fri, 07 Jan 2022 14:00:00 +0000 https://newlyn.info/corn-traders-juggle-knives-in-the-coming-year-harvests/






Photo by Cornell Fruehauf from Pixabay.


At the end of the year, corn farmers have a lot of balls to watch out for in the air, or perhaps knives. Nathanael Thompson, associate professor of agricultural economics at Purdue University, gave three tips to corn growers:

1. Understand and use the basics;

2. Do not keep your harvest too long in reserve; and

3. Understand delivery costs and pre-harvest marketing opportunities.

In general, Thompson said he recommends growers keep a smaller portion of their corn in an uncovered warehouse in 2022.

According to James Mintert, director of the Center for Commercial Agriculture at Purdue University, while export numbers will be critical for corn and soybeans for 2022, corn export numbers look slightly better.

Part of the reason, according to Naomi Blohm, senior marketing advisor at Total Farm Marketing, is that corn production is declining in China, due to too much rain in the past two years. Global corn stocks are at their lowest since 2016. Blohm and Mintert believe they’re actually tighter than the US Department of Agriculture estimates. About 60% of these global stocks are in China, which may be inferior and of inferior quality to what has been reported. “China will expand its feed imports around the world” in part to downplay the notice of its increased purchases, Blohm said.

Chinese pork supply stabilizing?






5_corn-2655525.jpeg

Photo by Andrew Martin from Pixabay.


On the other hand, China officially claims to have reached a plateau with its pig population after years of battling African swine fever, and even claims a glut of pork. Agricultural news sources began reporting a slowdown in Chinese pork imports from August. On December 15, China’s finance ministry announced it would increase import tariffs on most pork products next year, saying the country had rapidly increased domestic production and reduced import requirements. This is important because when China rebuilt its herd of pigs, it not only reverted to previous levels, but took the opportunity to revamp its pork production industry, replacing low-quality traditional foods with high-quality grains. best quality.

New uncertainties introduced by the resurgence of the omicron variant of COVID-19 have raised new questions about whether lockdowns and travel restrictions will be necessary again. Farmers are paying close attention to recent Environmental Protection Agency action regarding ethanol blending levels.

Earlier this year, the EPA was issuing signals that it could reduce mandatory mixing levels below 2020 levels. It took recent bills in Congress to prevent the proposed actions. On December 14, the Renewable Fuels Association, which represents ethanol producers and refiners, thanked the Senses. Amy Klobuchar, D-MN, and Chuck Grassley, R-IA, for bipartisan legislation filed that day prohibiting the EPA from reducing the applicable minimum. volume of biofuels in transportation fuel once the obligations are finalized for a given year. About a third of the corn crop is turned into ethanol each year.

“This bill comes at a critical time,” said RFA President and CEO Geoff Cooper. “Just last week, the EPA proposed an unprecedented retroactive reduction in the renewable energy volume obligations for 2020 that were finalized more than two years ago. The RFS was created to provide long-term market certainty for ethanol producers and farmers in our country. Going back in time to reduce RFS volumes, long after they have been finalized, undermines the purpose and intent of the program and destabilizes the market. We thank Sens. Klobuchar, Grassley, Duckworth and Ernst for working together to ensure the integrity of the RFS and the EPA is held accountable.

The same legislation was introduced in the House of Representatives last month by Representatives Ashley Hinson, R-IA, Rodney Davis, R-IL, Angie Craig, D-MN and Ron Kind, D-WI.

Cooper noted that the EPA’s proposal to revise the 2020 RVO to take into account market anomalies related to COVID is not necessary, because the annual RVO already includes a self-correction mechanism that causes actual volume requirements to occur. renewable fuel levels adjust downward with reduced gasoline and diesel consumption.

Summertime E15 barrier action requested






3_corn-264520.jpeg

Photo by Vijaya Narasimha from Pixabay.


On December 9, six national farm and biofuel organizations wrote an open letter asking the EPA to pass new regulations requiring low volatility conventional gasoline blends during the summer. This would result in reduced exhaust and evaporative emissions during the summer ozone control season, the groups said, and improve air quality. In a letter to EPA Administrator Michael Regan, the Renewable Fuels Association, American Farm Bureau Federation, Growth Energy, National Corn Growers Association, National Farmers Union and National Sorghum Producers said reducing volatility gasoline of just 1 pound per square inch would give significant environmental benefits. Regarding air quality, the six organizations referenced and attached a new study using the EPA’s modeling tools, showing that a reduction in the vapor pressure of the conventional gasoline blend would be beneficial for air quality.

The USDA is now forecasting a modest recovery in ethanol consumption. Ethanol refining margins have remained near record levels, Mintert said. “Only a decline in the economy would slow down ethanol,” he added.

Blohm believes there is a tighter corn carryover than the USDA predicted. She thinks the demand for crushing will increase. “So many companies need to show carbon reductions,” she told the High Plains Journal, and noted that four new crushing plants will come online over the next two years.

“That’s not a pretty picture” if you haven’t locked in all of your input costs for the 2022 growing season, according to Blohm. About half of the producers had done so when she spoke to the High Plains Journal in mid-December. Michael Langemeier, a professor in Purdue’s agricultural economics department, said corn fertilizer costs are 80% higher than last year. And it’s not just the cost, but whether it will be available at all, due to supply chain constraints. Langemeier said that for the first time ever, fertilizer costs per bushel are higher than rental cash costs per bushel. He suggested reducing nitrogen fertilizers, saying a reduction could save substantial production costs with only a slight reduction in yield.

Langemeier believes that while corn will remain competitive with soybeans on above-average soil, he believes corn area will be reduced on the drier lands to the west.

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Vegetable and Fruit Giant Goodfarmer to Launch Vegetable Brand Jointly with Syngenta China MAP https://newlyn.info/vegetable-and-fruit-giant-goodfarmer-to-launch-vegetable-brand-jointly-with-syngenta-china-map/ Fri, 07 Jan 2022 13:14:29 +0000 https://newlyn.info/vegetable-and-fruit-giant-goodfarmer-to-launch-vegetable-brand-jointly-with-syngenta-china-map/

On January 5, Syngenta China and Shandong Goodfarmer International Trade Co., Ltd. signed an agreement to plant vegetables. The two companies will cooperate in planting vegetables, the construction of MAP center of the entire industrial chain, MAP next to the full traceability of quality control and other aspects.

It is reported that Goodfarmer Group will vigorously develop its domestic vegetable distribution business on the basis of vegetable export. The company will launch a brand named “Baocai” with a commitment to create a safe and healthy premium vegetable brand. The brand will mainly include ginger, garlic, pumpkin, pepper, sweet corn, cauliflower, etc.

In this cooperation, the two companies will strengthen each other in many aspects:

Syngenta China MAP will place planting orders for certain varieties of vegetables according to Goodfarmer’s needs, such as Syngenta’s unique colorful cauliflower, Kuppra dominant sweet corn variety, special pumpkin varieties, etc. Colorful Cauliflower is selling well among Hema X members, and Pumpkin and Sweet Corn will be listed in February and March respectively.

The two sides will jointly establish a complete industrial chain center in the dominant vegetable production zone, and they initially determined that a whole garlic industrial chain center would be built in Juye County, Heze, Shandong Province. This will serve as a pilot project to gradually extend to other production areas.

They will also strengthen cooperation on the whole process of quality control and traceability of MAP beSide products. In terms of brand promotion in the terminal channels, the two sides will jointly invest to promote the Goodfarmer brand and the beSide MAP mark of approval and improve the value and quality of the products.

About this cooperation
Goodfarmer Group has already built distribution centers in 31 provincial capitals across the country so far, including more than 12,000 offline supermarket stores. They have basically established long-term and stable strategic partnerships with all domestic supermarkets and e-commerce customers, and now have become the main enterprise of the domestic fruit and vegetable distribution industry.

After the signing of this agreement, the two sides will cooperate in depth in all aspects of the entire industrial chain of vegetable distribution, including upstream and downstream, and further strengthen the level of cooperation in the future by continuously consolidating and expanding the scale of cooperation, so as to achieve mutual benefit and a win-win situation.

Source: Goodfarmer fruit

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Ukrainian corn prices expected to be supported by rising demand and costs https://newlyn.info/ukrainian-corn-prices-expected-to-be-supported-by-rising-demand-and-costs/ Wed, 05 Jan 2022 12:00:37 +0000 https://newlyn.info/ukrainian-corn-prices-expected-to-be-supported-by-rising-demand-and-costs/

Ukrainian corn prices are expected to be high throughout the first half of 2022 due to demand from major importers and a potential drop in production in South America.

Ukraine, one of the world’s largest corn producers, has seen firm prices in recent months at China’s request and harvest delays, despite bumper harvest expectations.

In MY 2021-22 (October-September), Ukraine is expected to produce 40 million tonnes of maize, nearly 10 million tonnes more than last year, according to S&P Global Platts Analytics, with an export potential 38% higher this year at 33 million. Mountain. However, some analysts have predicted a corn harvest of over 40 million tonnes. If the higher potential holds true and the additional volume is harvested, it may be a bearish factor in 2022.

The global maize balance also appears to be heavier than last year, putting pressure on the world maize market. The United States Department of Agriculture, or USDA, estimated the 2021-22 global corn production at 1.208 billion tonnes, up 8% from the previous year, with ending stocks rising 4% to 305, 5 million tonnes, according to its global agricultural supply in December. and Demand Estimates, or WASDE, report.

However, prices have remained firm in Ukraine following harvest delays, resulting in low availability at ports and decent demand from China.

Strong demand from China

China imported 3.3 million tonnes of corn from Ukraine from October to December, with around 700,000 tonnes of produce already for January, according to logistics companies and market sources.

China is expected to continue importing corn from Ukraine in the first half of 2022, sources say, with Ukraine’s total corn imports for the 2021-22 crop year likely to be 6 million to 7 million tonnes. “It seems that at present, China still likes the label of non-genetically modified corn. That’s why Ukraine is still doing pretty well, ”said Matt Ammerman, commodity risk manager, vice president Eastern Europe / Black Sea region at Stone X.

China’s pig herd recovering from African swine fever in 2018-19 – when up to 40% of the pig population was lost – as well as the ambition to become self-sufficient in pork production have maintained the imports of the country on the move. China’s maize demand for 2021-2022 has been estimated at 26 million tonnes by the USDA.

However, China’s maize production in MY 2021-22 increased to 272.55 million tonnes from 260.67 million tonnes in MY 2020-21, according to estimates by China’s agricultural supply and demand. This raised doubts about China’s corn import intentions. Platts Analytics estimates that China’s corn imports for 2021-22 will be 22 million tonnes.

At the same time, the pace of Ukraine’s exports has been the same as last year so far due to falling demand from other importers, harvest delays and tight logistics in the country. Exports from October to December amounted to 8.8 million tonnes, according to the agriculture ministry and market participants, the same level as last year.

Imports of maize by the EU – the main importer of maize from Ukraine – were held at the same level over the year at around 15 million tonnes by the USDA.

The EU imported 6.5 million tonnes of maize from July 1 to December 1. January 19, 2021, according to the European Commission, up from 8.2 million metric tonnes during the same period in 2020. This offers good opportunities for Ukrainian maize in the first half of 2022, although it will compete with the Brazil for the EU market.

Meanwhile, safrinha maize in Brazil, which accounts for most of the country’s exports, will not hit the market in significant quantities until July 2022.

Fierce competition unlikely in the first half of 2022

Ukraine will also compete with Argentina in the first half of 2022 for destinations in the Middle East in particular. Harvest is expected to start from mid-February to March in Argentina. “Argentina, on the other hand, is likely to be strong competition for Ukraine given the price advantage,” Ammerman said.

However, corn harvest conditions in Argentina deteriorated due to dry and hot weather conditions and only 58% of crops were reported to be good to excellent as of December 30, according to Buenos Aires Grains Exchange, or BAGE.

Even though rains are expected in the coming weeks, Argentine maize production in MY 2021-22 could decline from current estimates of 57 million tonnes per BAGE and 54.5 million tonnes per BAGE. USDA. This should support the prices.

Increased cost of inputs

The higher cost of fertilizers around the world will increase the cost of producing corn, and potentially prices, sources said, although the impact may be small, they added.

In Ukraine, the cost of growing corn is likely to increase by around 30%, sources said, leading to some reduction in fertilizer use.

Farmers are expected to have a financial reserve this season, however, following high corn prices, said Elena Neroba, market analyst for grain trading company Maxigrain. This allowed farmers to finance the spring planting campaign with almost no reduction in fertilizer inputs, Neroba added.
Source: Platts

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Raw materials 2022: Ukrainian corn prices expected to be strong on demand, costs rising https://newlyn.info/raw-materials-2022-ukrainian-corn-prices-expected-to-be-strong-on-demand-costs-rising/ Tue, 04 Jan 2022 05:10:00 +0000 https://newlyn.info/raw-materials-2022-ukrainian-corn-prices-expected-to-be-strong-on-demand-costs-rising/ Strong points

Firm demand to support prices in the first half of 2022

Record Ukrainian maize harvest could turn bearish in first half of 2022

The increase in the cost of inputs is reflected in the prices; unlikely to interfere with planting

Ukrainian corn prices are expected to be high throughout the first half of 2022 due to demand from major importers and a potential drop in production in South America.

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Ukraine, one of the world’s largest corn producers, has seen firm prices in recent months at China’s request and harvest delays, despite bumper harvest expectations.

In MY 2021-22 (October-September), Ukraine is expected to produce 40 million tonnes of maize, nearly 10 million tonnes more than last year, according to S&P Global Platts Analytics, with an export potential 38% higher this year at 33 million. Mountain. However, some analysts have predicted a corn harvest of over 40 million tonnes. If the higher potential holds true and the additional volume is harvested, it may be a bearish factor in 2022.

The global maize balance also appears heavier than last year, putting pressure on the world maize market. The United States Department of Agriculture, or USDA, estimated the 2021-22 global corn production at 1.208 billion tonnes, up 8% from the previous year, with ending stocks rising 4% to 305, 5 million tonnes, according to its global agricultural supply in December. and Demand Estimates, or WASDE, report.

However, prices have remained firm in Ukraine following harvest delays, resulting in low availability at ports and decent demand from China.

Strong demand from China

China imported 3.3 million tonnes of corn from Ukraine from October to December, with around 700,000 tonnes of produce already for January, according to logistics companies and market sources.

China is expected to continue importing corn from Ukraine in the first half of 2022, sources say, with Ukraine’s total corn imports for the 2021-22 crop year likely to be 6 million to 7 million tonnes. “It seems that at present, China still likes the Non-Genetically Modified Corn label. This is why Ukraine is still in a pretty good position,” said Matt Ammerman, Commodity Risk Manager, Vice President of the Eastern Europe / Black Sea region at Stone X..

China’s pig herd recovering from African swine fever in 2018-2019 – when up to 40% of the pig population was lost – as well as the ambition to become self-sufficient in pig production have maintained the country’s imports. countries on the move. China’s maize demand for 2021-2022 has been estimated at 26 million tonnes by the USDA.

However, China’s maize production in MY 2021-22 increased to 272.55 million tonnes from 260.67 million tonnes in MY 2020-21, according to estimates by China’s agricultural supply and demand. This raised doubts about China’s corn import intentions. Platts Analytics estimates that China’s corn imports for 2021-22 will be 22 million tonnes.

At the same time, the pace of Ukraine’s exports has been the same as last year so far due to falling demand from other importers, harvest delays and tight logistics in the country. Exports from October to December amounted to 8.8 million tonnes, according to the agriculture ministry and market participants, the same level as last year.

Imports of maize by the EU – the main importer of maize from Ukraine – were held at the same level over the year at around 15 million tonnes by the USDA.

The EU imported 6.5 million tonnes of maize from July 1 to December 1. January 19, 2021, according to the European Commission, up from 8.2 million metric tonnes during the same period in 2020. This offers good opportunities for Ukrainian maize in the first half of 2022, although it will compete with the Brazil for the EU market.

Meanwhile, safrinha maize in Brazil, which accounts for most of the country’s exports, will not hit the market in significant quantities until July 2022.

Fierce competition unlikely in the first half of 2022

Ukraine will also compete with Argentina in the first half of 2022 for destinations in the Middle East in particular. Harvest is expected to start from mid-February to March in Argentina. “Argentina, on the other hand, is likely to be strong competition for Ukraine given the price advantage,” Ammerman said.

However, corn harvest conditions in Argentina deteriorated due to dry and hot weather conditions and only 58% of crops were reported to be good to excellent as of December 30, according to Buenos Aires Grains Exchange, or BAGE.

Even though rains are expected in the coming weeks, Argentine maize production in MY 2021-22 could decline from current estimates of 57 million tonnes per BAGE and 54.5 million tonnes per BAGE. USDA. This should support the prices.

Increased cost of inputs

The higher cost of fertilizers around the world will increase the cost of producing corn, and potentially prices, sources said, although the impact may be limited, they added.

In Ukraine, the cost of growing corn is likely to increase by around 30%, sources say, leading to some reduction in fertilizer use.

Farmers are expected to have a financial reserve this season, however, following high corn prices, said Elena Neroba, market analyst for grain trading company Maxigrain. This allowed farmers to finance the spring planting campaign with almost no reduction in fertilizer inputs, Neroba added.

Explore this topic: Commodities 2022

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Gone with the old, make way for the new … year | Ag / Energy https://newlyn.info/gone-with-the-old-make-way-for-the-new-year-ag-energy/ Sun, 02 Jan 2022 11:30:00 +0000 https://newlyn.info/gone-with-the-old-make-way-for-the-new-year-ag-energy/

Happy New Year to market watchers. 2021 is in the books and it’s 2020 time too! Wait NO, 2022.

Take a deep breath because it’s time to start over. All the things you hoped to accomplish last year can be added to your new goals for the next 365 days. Reset and regroup because your optimism should be at an all time high to start a new year.

And what a year it’s been. Despite heightened volatility which made trading very delicate, equity and commodity markets ended the year with impressive growth. Oil jumped 60%, stocks nearly 30%, KC wheat 30%, corn 35%, soybeans 22%, cotton 48%, feeder cattle 26% and fat by almost 25%. These advances, while respectable, are not at the peak of the year either. With rising inflation, the continued compromises of COVID variants, and mounting geopolitical tensions, the next 12 months are expected to be more complex.

The three potential Fed rate hikes are anything but certain because they respond to economic and employment progress on time without being premature. The most unpredictable of the uncertainties on the horizon is the evolution of geopolitics between the United States and Russia, China and Iran. Take your pick from the most critical issues, but I think the ones that will emerge in a big way in Russia and China are border and sovereignty issues involving Ukraine and Taiwan, respectively. I foresee that the leaders of Russia and China will simultaneously insist on these conflicts to accentuate the political appetite of the executive but also of the legislative branches of the US government for conflict resolution.

With the Biden administration’s approval rating declining and unlikely to run for a second term, I expect this stalemate to worsen next year, allowing such conflicts to persist. How will these potential disruptions impact the broader market? Hard to say, but it can actually add a volatility premium to commodities, both agricultural and energy, if trade flows are affected.

With new leadership in Germany, it will also be interesting to see how the major EU economies react given the energy dependence on Russia and trade with China.

During the last week of trading, the wheat market peaked in overnight Sunday trading before selling the rest of the week. Russian troop movements off the Ukrainian border and the risk of precipitation in the United States, although accompanied by cold, played into the weakness. The US Wheat Belt is badly in need of precipitation, but I expect very little to materialize compared to the gap. This cold snap will permanently put wheat into dormancy with lows at or below freezing until at least mid-January. Snow cover protects winter wheat from freezing temperatures, but gives limited actual moisture.

Time will tell, but I think we haven’t seen the peaks in the wheat market yet. March KC futures fell below $ 8.00 on Friday, but managed to close above $ 8.01½.

Corn and soybean markets remained reasonably strong in light of last week’s surge. Friday’s action looked to be an indoor day on corn until the last segments of the session before dipping below Thursday. Soybeans closed with an interior day (higher lower and lower higher) on the chart, suggesting Monday’s move should follow in that direction. The drought in South America continued to add a weather bonus to the corn and bean charts.

Sales of corn in the United States this week were larger than expected, while soybeans were down and wheat was lower than expected. Forecasts show much needed precipitation in Brazil and Argentina over the 6-10 and 11-15 day outlook. This market should find support if the actual value is insufficient, but be careful with some sales before the next start. I expect the battle for acres in the US between corn and soybeans to start in mid-January or early February. China this week expanded approvals for GMO corn varieties for planting in the country. It’s no surprise that all of the approved varieties are from Chinese companies, but let’s also remember that Syngenta is now owned by a state-owned enterprise (SOE), so these approvals are likely to be the next one. While this may help increase or at least help stabilize Chinese production, I think the greater importance of this decision is that the import of GMO corn will be increasingly difficult to restrict through fair trade practices via the World Trade Organization (WTO).

This could be the start of China signaling to the world market that adequate supplies of corn are increasingly important as the country’s animal protein and ethanol sectors expand. Lately, there have been a lot of signals from China that American beef is all the rage. Recent figures have been weaker for China, likely reflecting the rebound in Brazilian beef exports after the August BSE case. However, I expect American beef to remain a top competitor in Asian markets next year as quality becomes more and more important. The cattle market was on fire this week, especially feeders which hit new highs recently on Friday, rebounding from the initial weakness. March feeders jumped 5% this week alone to close at just under $ 170. Like I said, I think this market has the potential to hit $ 180 on March, April, or May contracts, but it won’t happen without fluctuations.

As we all know, traders usually manage to sell the markets in March when the fattening producers herd cattle from wheat. open, but protect the drop. You never know when the next Black Swan event is going to hit us. If you are looking for downside protection while keeping the upside open, I encourage you to consider LRP, which I also offer through insurance, in addition to puts and hedges, this is a great way to protect against declines for less premium. This is basically a subsidized put option, but there are other differences as well, including the option to pay the premium after the coverage expires instead of upfront.

If you are ready to trade in the commodities markets, call me at (580) 232-2272 or drop by my office to create your account and discuss risk management and marketing solutions to further your goals. Auto-trade accounts are also available. It’s never too late to start, and no operation is too small to have a risk management and marketing plan in place. Come see me every Thursday during sales at the Enid cattle market and let’s talk about the markets. I wish everyone a successful trading week.

Sidwell is a Certified Series 3 Commodity Futures Broker and Director of Sidwell Strategies. He can be reached at (580) 232-2272 or brady@sidwellstrategies.com. Trading in futures and options involves risk of loss and may not be suitable for all investors. See the full disclaimer at http://www.sidwellstrategies.com/disclaimer.

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Higher costs Break-even point of profitability https://newlyn.info/higher-costs-break-even-point-of-profitability/ Fri, 31 Dec 2021 18:58:00 +0000 https://newlyn.info/higher-costs-break-even-point-of-profitability/

DTN senior analyst Todd Hultman calculated a few numbers using USDA’s cost of production estimates, updated December 17, 2021. For 2022, the agency predicted that a farmer would spend 715.73 $ to grow an acre of corn. With a yield of 180 bushels per acre (bpf), that comes down to about $ 3.98 per bushel.

To approximate a cost scenario for 2022, Hultman doubled USDA’s estimates for fertilizer and chemical spending and increased the fuel budget by 25%, resulting in a cost per acre increase of 194, $ 40. This brings the total costs to produce an acre of corn to $ 904.10. At 180 bpa, that’s a breakeven point of $ 5.02 a bushel. If a farmer has an average of 200 bpy, the cost drops to $ 4.52 a bushel. The real costs for some farmers could be even higher.

It is important to remember that these are only averages and that every farm’s track record is different. USDA figures include a line for the opportunity cost of land or rental rate. Whether a farmer owns all of the land or how their land costs compare to the average USDA used in their calculations will make a big difference in the actual break-even point of an individual farm.

At the time of going to press, corn futures for December 2022 were trading near $ 5.46 a bushel. Although the estimated profit margin is narrower than in 2021, Hultman said corn will remain a viable option for many farmers.

“If they are near an ethanol plant, they can be more confident about the demand compared to competing with Brazil to try to sell soybeans to China,” he said. .

Katie Dehlinger can be reached at katie.dehlinger@dtn.com

Follow her on Twitter at @KatieD_DTN

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Record South American Soybean Harvest Could Be Price Driving Force | https://newlyn.info/record-south-american-soybean-harvest-could-be-price-driving-force/ Mon, 27 Dec 2021 21:30:00 +0000 https://newlyn.info/record-south-american-soybean-harvest-could-be-price-driving-force/

But

Corn closed the week at 14 and a quarter cents higher. Private exporters have not announced any export sales.

U.S. exports for the week ending Dec. 16 were 39.4 million bushels, little change from 36.1 million bushels the previous week and slightly above the same week’s exports of the last year by 30.3 million bushels. Exports for the week hit a 9-week high. Over the past four weeks, U.S. exports have averaged 34.4 million bushels per week, which is comparable to the average of 35.1 million bushels per week for the same period last year, but still significantly below the roughly 53 million bushels per week that corn will need on average until the end of August to meet the USDA’s export projection of 2.5 billion bushels. Cumulative export inspections of 445 million bushels are down 12% from 506 million last year, while the USDA currently estimates that 2021-2022 exports will be down 9% from last year. year round.

In the Energy Information Administration’s weekly report, weekly ethanol production for the week ending December 17 averaged 1,051,000 bushels per day compared to 1,087,000 the previous week and 976,000 bushels per day there. is one year old. Ethanol inventories fell to 20.7 million bushels from 20.9 million bushels last week and from 23.2 million bushels last year.

Strategy and Outlook: The corn market will need to bid on acres this spring to rebuild ending stocks to a more comfortable level. Tight base levels and a market on the verge of reversal are bullish fundamentals for the market.

Soy

Soybeans closed the week at 53.5 cents higher. Private exporters have not announced any export sales.

In the Weekly Export Inspections Report, soybean exports from the United States last week were 61.7 million bushels, but significantly lower than the same week’s exports last year of 105.0 million. of bushels. That translated into cumulative export inspections of 998 million bushels, falling from a low four-week deficit to last year’s 1.293 billion bushels of nearly 23%. Additionally, exports last week were at an 11-week low as soybean shipments continue to seasonally slow before the South American export program accelerates in February. Soybean exports will need to average 27.2 million bushels per week through the end of August in order to meet USDA export projections of 2.05 billion bushels compared to 23.7 million bushels l last year on average.

Strategy and Outlook: The market expects a record soybean crop in South America and this year’s production updates in South America will be a major driving force for prices throughout the winter. Weather conditions during the growing season in South America will be closely monitored.

Wheat

Chicago wheat closed 40 and a half cents higher, Kansas City wheat closed 51 and a half cents higher and Minneapolis wheat 12 and a half cents higher. Exporters have not announced any export sales.

In the Weekly Export Inspections Report, U.S. wheat exports fell to a four-week low at just 7.8 million bushels and were significantly lower than exports in the same week of last year of 14, 4 million bushels. Over the past 10 weeks, U.S. wheat exports have averaged 8.9 million bushels per week compared to 13.5 million per week in the same period last year, while cumulative inspections at the exports of 427 million bushels fell to a largest 20-week deficit to reach 519 million bushels last year. almost 18%. Cumulative exports remain the lowest on record in the 29 weeks of the marketing year going back almost 50 years. To meet USDA’s already low export forecast of 840 million bushels, wheat exports will need to average about 15.2 million bushels per week through the end of May, up from 17.6 million. bushels per week last year from now.

Strategy and outlook: December is the time when the new crop winter wheat goes dormant and the wheat will not come out of dormancy until March. Until then, the market will mainly focus on demand. This month, the wheat harvest begins in Australia and will compete with US wheat for demand. In addition, traders will closely monitor the moisture conditions of the winter wheat crop during the winter months. This year’s winter wheat crop is going dormant with one of the lowest good to excellent odds in 20 years.

Live and feeder cattle

Live cattle closed up $ 3.07 last week while feeder cattle closed up $ 2.10. The Cattle on Feed Monthly Report is slightly user-friendly compared to the pre-report estimates. The report showed slightly less cattle fed than expected at 99.6% last year versus estimates of 100%, placements were slightly above estimates at 103.6% versus 103.4% expected while marketings were friendly at 105.3% against estimates of 104.4%.

The spot trade in fed cattle was weak in the north, mostly $ 135 to $ 137 live and $ 216 to $ 218 dressed. It’s mostly $ 1 to $ 2 less than last week. The light trade in live animals also grew in the south at $ 135, or $ 1 to $ 3 less.

The Fed Cattle Exchange had 1,708 head offered for sale and 278 head sold at an average of $ 140. The latest USDA steer carcass weights have increased by one pound to 929 pounds, seven pounds more than a year ago and a new high for this year. Beef export sales recorded net sales of 12,000 metric tonnes for 2021 with reported exports of 17,900 metric tonnes.

Strategy and outlook: Producers should have window or close strategies to protect the downside, but allow upside potential as tight supplies in Q4 and Q1 2022 are expected to be bullish for stocks, but the economy is in trouble.

Lean pigs

Lean hogs closed the week up $ 2.60.

In the monthly cold storage report, the total supply of red meat to freezers was down 2% from the previous month and 4% from last year. The total number of pounds of beef in freezers was up four percent from the previous month, but down four percent from a year ago. Frozen pork supplies were down eight percent from the previous month and three percent from a year ago. Inventories of pork belly increased 117% from last month and 8% from last year.

The Hogs & Pigs quarterly report looks bullish relative to trade estimates. The report showed that all pigs and pigs were at 96% a year ago, lower than survey estimates of 97.2% and slightly down from September. Kept for breeding is well within the estimate of 100.1% while Kept for marketing was only 95.6%, well below the estimate of 96.9%.

The weekly weight of pigs in Iowa and southern Minnesota for the week ending Dec. 18 was down to 289.3 pounds from 290.8 pounds last week and 288.7 pounds last year. This week’s net pork sales of 28,800 metric tonnes reported for 2021 with exports of 32,000 metric tonnes.

Strategy and outlook: The pork market continues to suffer under the weight of weak fundamentals.

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Farming Simulator 22 Cereal Factory: Complete Guide – Production, Sale and More https://newlyn.info/farming-simulator-22-cereal-factory-complete-guide-production-sale-and-more/ Fri, 24 Dec 2021 13:48:07 +0000 https://newlyn.info/farming-simulator-22-cereal-factory-complete-guide-production-sale-and-more/ This facility is a great way to make solid money, but how do you build it or find it?

Breakfast is the most important meal of the day, and a staple is cereals. Farming Simulator 22 lets you capitalize on this, as grain factories are available in the game. But how do you find or buy them? And what do you need to perform them? We’ve got everything you need to know here!

Where to find or buy

Depending on the map you’re playing on, you might not need to build a Grain Factory to use one. Sometimes they appear on the map, so take a look at them before building one. If there is one, you can purchase it by going up to the key icon on the outside of the building facade.

Be aware, however, that if you buy the grain plant using this method, you cannot sell it later.

THE ENERGY PLANT: This is where the magic happens for cereals

The alternative to this is that you can buy a Grain Factory from the in-game store. To find the Grain Factory you go to the Build menu, then Production, then Factories. The grain plant is listed here for $ 110,000.

Production

So, now that you have your grain factory, you need to provide it with the right foods to get grain. The intake of oats, honey, raisins and corn will give the plant what it needs to produce grain.

Farming Simulator 22 Reisch Pack Mod 1
LOADING: You will need a lot of raw material to produce the grain the plant is capable of.

As for the input / output ratios and quantities, there is only one which concerns the cereal plant. For 30 liters of honey and raisins and for 60 liters of corn and oats, you get 60 liters of grain. This cycle will repeat every 20 minutes, or three times per hour. The grain factories cannot produce anything else.

Sell ​​grain

What happens to your cereal after you produce it depends on the setting you have configured at the factory. If you set it to storage, the grain will be stored until this capacity limit is reached.

If the mill is ready to sell, it will sell the grain on the open market at the highest price available. Be aware, however, that a 40% delivery charge will be deducted from all sales you make. Therefore, if you can, you have to manually sell your grain yourself.

Farming Simulator 22 tailor spinning 3
OFF IT GOES: You can sell your grain to any number of vendors to get real cash flow

The grain cannot be used in any other production, it is the end of the chain for it effectively.

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