Argentina’s stockpile of old crop is the big wildcard in the soybean market, says Mark Gold, owner of Top Third Ag Marketing.
“One of my very good friends is probably one of the greatest traders in the world and he believes we are going to see Argentina release a lot of beans come June/July/August,†he said during an interview at the 2015 Commodity Classic conference.
“If it looks like we have a big crop of our own there is no telling what the low is in the bean market.â€
Chip Nellinger, futures market specialist with Blue Reef Agri-Marketing, said Argentinean farmers are hording soybeans due to rampant inflation in their country.
The government doesn’t like that because soybeans provide a major source of tax revenue.
“It has kind of been a cat and mouse thing,†he said.
There is some speculation that the government may impose penalties or policies that will encourage farmers to sell their soybeans.
He agreed with Gold that would put downward pressure on soybeans prices, especially if it hit the market when U.S. farmers are harvesting what Nellinger expects could be a massive 90 million acre upcoming soybean crop.
Both analysts think farmers should price some soybeans today given the potential for prices to drop as low as $8 per bushel by fall.
Nellinger said if soybean prices fall canola will follow.
Here is Pratt’s story from day one of the Commodity Classic: Grain market analyst expects price rally
TRADE PROMOTION AUTHORITY
Eight former U.S. secretaries of agriculture have signed an open letter encouraging U.S. Congress to reinstate Trade Promotion Authority (TPA).
TPA allows U.S. trade negotiators to fast-track trade agreements. It means the U.S. Congress would only be allowed to vote in favour or against trade agreements rather than being allowed to amend them and send them back to the negotiating team.
Current secretary of agriculture Tom Vilsack said TPA would be a helpful tool in negotiating agreements like the Trans Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Partnership (TTIP).
The American Soybean Association is confident the TPA will be reinstated despite opposition from the far left and far right in Congress.
GM LABELLING
Vilsack said consumers have a right to know if the food they buy in grocery stores contains genetically modified ingredients.
However, he doesn’t believe companies should be forced to put that information on labels because of the connotation that GM crops are somehow a health risk.
Instead, Vilsack is proposing that the information be contained in barcodes and concerned consumers can use their smart phones to scan the barcode to see if it contains GM ingredients.
WTO OBLIGATIONS
A number of developing countries are not meeting World Trade Organization obligations to disclose how much they are subsidizing their grain growers, said U.S. Wheat Associates.
USW has conducted its own study, which has unveiled that countries like India, China, Brazil and Turkey are exceeding their allowable aggregate measure of support by a wide margin. China has exceeded its AMS by over $100 billion in the past two years.
USW president Alan Tracy said the U.S. and the European Union are no longer the big subsidy culprits. It is the developing countries that are distorting trade and should be taken to task.
GRAIN STORAGE
U.S. farmers have increased grain storage by 18 percent over the past decade.
That includes an additional 57 million tonnes of on-farm storage and 60 million tonnes of off-farm storage.
Tracy said that has given growers the ability to exercise patience and wait for grain prices to improve before selling their grain into the system.
CROSS-BORDER WHEAT TRADE
USW continues to be annoyed that Canadian wheat can flow south of the border but U.S. wheat is faced with numerous challenges when growers try to send their crop north.
Tracy said it is akin to Canadian livestock farmer concerns with U.S. Country of Origin Labeling.
HIGH OLEIC SOYBEANS
The United Soybean Board expects growers to plant 250,000 acres of high oleic soybeans in 2015.
Widespread commercial introduction of the trait has been delayed by a lack of approval from China and the European Union.
Despite the delays, the USB still expects growers will be planting 18 million acres of high oleic soybeans by 2023, making it the fourth biggest crop in the U.S. behind corn, conventional soybeans and wheat.
ROUNDUP READY 2 XTEND SOYBEANS
Monsanto plans to launch its Roundup Ready 2 Xtend soybeans in the U.S. and Canada in 2016.
The crop, which can be sprayed with Roundup and Dicamba herbicides, has full regulatory approval in the U.S. and Canada but is awaiting approval in the key export markets of China and the European Union.
Monsanto expects it will be planted on two million acres in North and South America by the end of the decade.
“One of my very good friends is probably one of the greatest traders in the world and he believes we are going to see Argentina release a lot of beans come June/July/August,†he said during an interview at the 2015 Commodity Classic conference.
“If it looks like we have a big crop of our own there is no telling what the low is in the bean market.â€
Chip Nellinger, futures market specialist with Blue Reef Agri-Marketing, said Argentinean farmers are hording soybeans due to rampant inflation in their country.
The government doesn’t like that because soybeans provide a major source of tax revenue.
“It has kind of been a cat and mouse thing,†he said.
There is some speculation that the government may impose penalties or policies that will encourage farmers to sell their soybeans.
He agreed with Gold that would put downward pressure on soybeans prices, especially if it hit the market when U.S. farmers are harvesting what Nellinger expects could be a massive 90 million acre upcoming soybean crop.
Both analysts think farmers should price some soybeans today given the potential for prices to drop as low as $8 per bushel by fall.
Nellinger said if soybean prices fall canola will follow.
Here is Pratt’s story from day one of the Commodity Classic: Grain market analyst expects price rally
TRADE PROMOTION AUTHORITY
Eight former U.S. secretaries of agriculture have signed an open letter encouraging U.S. Congress to reinstate Trade Promotion Authority (TPA).
TPA allows U.S. trade negotiators to fast-track trade agreements. It means the U.S. Congress would only be allowed to vote in favour or against trade agreements rather than being allowed to amend them and send them back to the negotiating team.
Current secretary of agriculture Tom Vilsack said TPA would be a helpful tool in negotiating agreements like the Trans Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Partnership (TTIP).
The American Soybean Association is confident the TPA will be reinstated despite opposition from the far left and far right in Congress.
GM LABELLING
Vilsack said consumers have a right to know if the food they buy in grocery stores contains genetically modified ingredients.
However, he doesn’t believe companies should be forced to put that information on labels because of the connotation that GM crops are somehow a health risk.
Instead, Vilsack is proposing that the information be contained in barcodes and concerned consumers can use their smart phones to scan the barcode to see if it contains GM ingredients.
WTO OBLIGATIONS
A number of developing countries are not meeting World Trade Organization obligations to disclose how much they are subsidizing their grain growers, said U.S. Wheat Associates.
USW has conducted its own study, which has unveiled that countries like India, China, Brazil and Turkey are exceeding their allowable aggregate measure of support by a wide margin. China has exceeded its AMS by over $100 billion in the past two years.
USW president Alan Tracy said the U.S. and the European Union are no longer the big subsidy culprits. It is the developing countries that are distorting trade and should be taken to task.
GRAIN STORAGE
U.S. farmers have increased grain storage by 18 percent over the past decade.
That includes an additional 57 million tonnes of on-farm storage and 60 million tonnes of off-farm storage.
Tracy said that has given growers the ability to exercise patience and wait for grain prices to improve before selling their grain into the system.
CROSS-BORDER WHEAT TRADE
USW continues to be annoyed that Canadian wheat can flow south of the border but U.S. wheat is faced with numerous challenges when growers try to send their crop north.
Tracy said it is akin to Canadian livestock farmer concerns with U.S. Country of Origin Labeling.
HIGH OLEIC SOYBEANS
The United Soybean Board expects growers to plant 250,000 acres of high oleic soybeans in 2015.
Widespread commercial introduction of the trait has been delayed by a lack of approval from China and the European Union.
Despite the delays, the USB still expects growers will be planting 18 million acres of high oleic soybeans by 2023, making it the fourth biggest crop in the U.S. behind corn, conventional soybeans and wheat.
ROUNDUP READY 2 XTEND SOYBEANS
Monsanto plans to launch its Roundup Ready 2 Xtend soybeans in the U.S. and Canada in 2016.
The crop, which can be sprayed with Roundup and Dicamba herbicides, has full regulatory approval in the U.S. and Canada but is awaiting approval in the key export markets of China and the European Union.
Monsanto expects it will be planted on two million acres in North and South America by the end of the decade.
Comment