PRO for us
Con for Mallee-
Canola crushers look to import crop
Wednesday, 01/11/2006
The canola crop has now all but failed this season in New South Wales.
Canola crushers are currently looking at importing canola from Western Australia or Canada to meet the state's domestic demand.
Pete MacSmith from Macsmith Milling in the state's central west says the local figures are not good.
"The latest estimates are putting the NSW crop at somewhere between 25 and 35,000 tonnes," he said.
"There's been a few reasonable crops up in the north.
"There will be very little harvested in the central west until we get down to the irrigation areas.
"Twenty-five to 35,000 tonnes is obviously a long way below the NSW average which is 400 odd thousand tonnes and even well below last year's crop which suffered due to a late start but had a great finish of 250 to 280,000 tonnes."
Con-
Farmers chase wheat windfall, but it may be too late
By John Schmeltzer, Tribune staff reporter. Tribune wire services contributed to this report
Published November 1, 2006
Hoping to cash in on wheat prices that have risen more than 35 percent in the last year, farmers are planting more wheat than anticipated by the U.S. Department of Agriculture--which could make any price windfall short-lived.
Droughts and smaller plantings last winter and this past summer have created a global shortage that could send world inventories down 43 percent by June to the lowest level since 1982, according to the USDA. Some countries are in worse shape than others, with Australia estimating its wheat crop could fall by as much as 60 percent because of drought conditions in some growing areas.
The shortage has pushed prices paid to farmers to a 10-year high: $4.65 per bushel from $3.43 a year ago. And it has pinched foodmakers and other heavy users, though not severely.
Despite the spike in prices, many food manufacturers say they have been able to withstand the run-up and are now anticipating that prices will begin falling as it becomes clearer how much winter wheat is planted.
"The increase we are seeing now is primarily in wheat, but that will obviously have a spillover effect into other grains as well," said James Dollive, chief financial officer of Kraft Foods Inc., during a recent conference call with investors.
Dollive, however, said that even if the price of wheat were to continue to rise over the next two months it "will not be a factor for us for the balance of the year."
Sara Lee Corp. said its commodity prices rose $150 million during fiscal 2006 and that it was only able to recapture $100 million of that increase.
Both General Mills Inc. and Kellogg Co. say the rising wheat prices could affect their earnings. Kellogg said rising commodity prices, including grain, fuel and packaging, could cut earnings by as much as 11 cents per share.
But, despite those concerns, prices already are falling.
Wheat fell 3.6 percent Tuesday, the most in five months, on speculation that U.S. farmers will increase the acreage planted with the grain this year to cash in on higher prices.
The seeding of the U.S. winter-wheat crop was 91 percent complete as of Sunday, the Department of Agriculture said Monday. The winter wheat crop, which accounted for 72 percent of total production last year, was rated 60 percent good to excellent, up from 57 percent a week earlier.
The report "is not helpful" to prices, said William Bayer, a vice president of PTI Securities, a Chicago-based broker. "Take a look at hard and soft wheat, and you can see they're upping the acreage given the price of the underlying commodity."
Wheat futures for December delivery fell 18 cents, to $4.83 a bushel, on the Chicago Board of Trade, the biggest decline since May 31 and the lowest close since Oct. 6. Prices have fallen 13 percent since reaching $5.57, a 10-year high, on Oct. 17.
A futures contract is an obligation to buy or sell a commodity at a set price for delivery by a specific date.
Already some mutual funds and hedge funds have begun selling their wheat holdings in an effort to capture gains before prices fall more.
"You've got momentum to the downside, and there's not enough bullish news to stop it," Bayer said. "Once funds start liquidating their long positions, it becomes a rolling stone."
Con for Mallee-
Canola crushers look to import crop
Wednesday, 01/11/2006
The canola crop has now all but failed this season in New South Wales.
Canola crushers are currently looking at importing canola from Western Australia or Canada to meet the state's domestic demand.
Pete MacSmith from Macsmith Milling in the state's central west says the local figures are not good.
"The latest estimates are putting the NSW crop at somewhere between 25 and 35,000 tonnes," he said.
"There's been a few reasonable crops up in the north.
"There will be very little harvested in the central west until we get down to the irrigation areas.
"Twenty-five to 35,000 tonnes is obviously a long way below the NSW average which is 400 odd thousand tonnes and even well below last year's crop which suffered due to a late start but had a great finish of 250 to 280,000 tonnes."
Con-
Farmers chase wheat windfall, but it may be too late
By John Schmeltzer, Tribune staff reporter. Tribune wire services contributed to this report
Published November 1, 2006
Hoping to cash in on wheat prices that have risen more than 35 percent in the last year, farmers are planting more wheat than anticipated by the U.S. Department of Agriculture--which could make any price windfall short-lived.
Droughts and smaller plantings last winter and this past summer have created a global shortage that could send world inventories down 43 percent by June to the lowest level since 1982, according to the USDA. Some countries are in worse shape than others, with Australia estimating its wheat crop could fall by as much as 60 percent because of drought conditions in some growing areas.
The shortage has pushed prices paid to farmers to a 10-year high: $4.65 per bushel from $3.43 a year ago. And it has pinched foodmakers and other heavy users, though not severely.
Despite the spike in prices, many food manufacturers say they have been able to withstand the run-up and are now anticipating that prices will begin falling as it becomes clearer how much winter wheat is planted.
"The increase we are seeing now is primarily in wheat, but that will obviously have a spillover effect into other grains as well," said James Dollive, chief financial officer of Kraft Foods Inc., during a recent conference call with investors.
Dollive, however, said that even if the price of wheat were to continue to rise over the next two months it "will not be a factor for us for the balance of the year."
Sara Lee Corp. said its commodity prices rose $150 million during fiscal 2006 and that it was only able to recapture $100 million of that increase.
Both General Mills Inc. and Kellogg Co. say the rising wheat prices could affect their earnings. Kellogg said rising commodity prices, including grain, fuel and packaging, could cut earnings by as much as 11 cents per share.
But, despite those concerns, prices already are falling.
Wheat fell 3.6 percent Tuesday, the most in five months, on speculation that U.S. farmers will increase the acreage planted with the grain this year to cash in on higher prices.
The seeding of the U.S. winter-wheat crop was 91 percent complete as of Sunday, the Department of Agriculture said Monday. The winter wheat crop, which accounted for 72 percent of total production last year, was rated 60 percent good to excellent, up from 57 percent a week earlier.
The report "is not helpful" to prices, said William Bayer, a vice president of PTI Securities, a Chicago-based broker. "Take a look at hard and soft wheat, and you can see they're upping the acreage given the price of the underlying commodity."
Wheat futures for December delivery fell 18 cents, to $4.83 a bushel, on the Chicago Board of Trade, the biggest decline since May 31 and the lowest close since Oct. 6. Prices have fallen 13 percent since reaching $5.57, a 10-year high, on Oct. 17.
A futures contract is an obligation to buy or sell a commodity at a set price for delivery by a specific date.
Already some mutual funds and hedge funds have begun selling their wheat holdings in an effort to capture gains before prices fall more.
"You've got momentum to the downside, and there's not enough bullish news to stop it," Bayer said. "Once funds start liquidating their long positions, it becomes a rolling stone."