Some commodity prices were under pressure Tuesday after a report from the International Monetary Fund revealed it slashed global economic growth for the year from 3.5 percent to 3.3 percent.
Gold for December delivery dropped $10.70 an ounce to settle at $1,765. December silver was down 3.2 cents an ounce to $33.985. January platinum fell $3.50 to settle at $1,695.30 an ounce.
Unsurprisingly, the IMF confirmed the leading economies of the world are at risk of recession, although the reality is we've really never emerged from latest recession, and there has been no recovery.
Those commodities moving up on the day included energy, palladium and wheat. Soybeans fell a penny to $15.50 a bushel. Palladium climbed to $658.20, up $1.25 an ounce.
Concerns over supply because of a slowdown in production in the North Sea and rising tensions in the Middle East were behind the rise in energy prices. Recent fires at a refinery in the U.S and another in Russia has also added price support in some energy segments.
Benchmark crude oil futures climbed $3.06, or 3.4 percent, to settle at $92.39 a barrel in New York. That is the highest level in over a week. Brent crude closed at $114.50, jumping $2.68, or 2.4 percent.
Heating oil increased by 5.89 cents to $3.2032 a gallon, and wholesale gasoline was up 6.56 cents to $2.9587 a gallon. Natural gas was up by 6.4 cents to $3.467 per 1,000 cubic feet.
The Dow Jones Industrial Average plunged 110 points to close at 13,473, a loss of 0.8 percent. The S&P 500 Index dropped to 1,441, losing 14 points or just under 1 percent.
The ICE dollar index climbed to 80.023, up from Monday's 79.595.
Showing posts with label Soybean Prices. Show all posts
Showing posts with label Soybean Prices. Show all posts
Tuesday, October 9, 2012
Tuesday, July 24, 2012
Commodity Prices and QE3
Debate is raging over whether another round of quantitative easing will in fact help boost the price of commodities.
Bears look at it from the point of view of demand alone, while bulls look at it from a more holistic view.
While demand is obviously a major factor in commodity prices, the U.S. dollar is just as important, and also can determine the demand because commodities are bought with U.S. dollars being used as the medium of exchange.
So if the U.S. dollar is strong, the demand for commodities can go down because of the high cost of acquiring them. That is what has been happening as it has strengthened against a number of currencies as the sovereign debt crisis in Europe continues to push down the price of competitive currencies.
If the Federal Reserve eases, that is sure to put downward pressure on the dollar and commodity prices in general will start to rise again.
There are other factors involved, but the strength of the U.S. dollar is among the top elements that impact most commodities.
Gold and silver will especially respond strongly if there is more easing, as they are also considered alternative currencies or safety against inflation, along with many industrial uses in regard to silver.
Over the short term it's any one's guess as to the price movement of commodities, but over the long haul there is no doubt commodities will, for the most part, continue on their upward price run.
Some commodities, for example grains, are already outside the impact of whether or not more easing will come, as other factors like the ongoing drought in America, and now parts of Europe and Australia, are aiding in pushing grain prices like corn and soybeans to record highs.
Bears look at it from the point of view of demand alone, while bulls look at it from a more holistic view.
While demand is obviously a major factor in commodity prices, the U.S. dollar is just as important, and also can determine the demand because commodities are bought with U.S. dollars being used as the medium of exchange.
So if the U.S. dollar is strong, the demand for commodities can go down because of the high cost of acquiring them. That is what has been happening as it has strengthened against a number of currencies as the sovereign debt crisis in Europe continues to push down the price of competitive currencies.
If the Federal Reserve eases, that is sure to put downward pressure on the dollar and commodity prices in general will start to rise again.
There are other factors involved, but the strength of the U.S. dollar is among the top elements that impact most commodities.
Gold and silver will especially respond strongly if there is more easing, as they are also considered alternative currencies or safety against inflation, along with many industrial uses in regard to silver.
Over the short term it's any one's guess as to the price movement of commodities, but over the long haul there is no doubt commodities will, for the most part, continue on their upward price run.
Some commodities, for example grains, are already outside the impact of whether or not more easing will come, as other factors like the ongoing drought in America, and now parts of Europe and Australia, are aiding in pushing grain prices like corn and soybeans to record highs.
Friday, July 20, 2012
September Corn Soars to Record High
As scorching temperatures and little rain continue to plague the Midwest, the price of corn continues to soar to record levels, closing Friday at $8.245 a bushel, gaining 16.75 cents from the record close on Thursday.
Soybeans also continue their record price climb, with August soybeans jumping 23.75 cents to settle at $17.575 a bushel.
The growing reality that it's too late for much of the corn crop is starting to hit the markets, as even if corn fields in many areas were deluged with rain, it wouldn't do anything to boost the yields, as the time has past for that to happen, with the pollination period being the critical factor for corn yields.
According to the Department of Agriculture, dry conditions with triple-digit heat will continue to linger into next week, weakening the propositions for corn, and further threatening the soybean crop, which while pollinating later than corn, is facing a crucial test.
Soybeans also continue their record price climb, with August soybeans jumping 23.75 cents to settle at $17.575 a bushel.
The growing reality that it's too late for much of the corn crop is starting to hit the markets, as even if corn fields in many areas were deluged with rain, it wouldn't do anything to boost the yields, as the time has past for that to happen, with the pollination period being the critical factor for corn yields.
According to the Department of Agriculture, dry conditions with triple-digit heat will continue to linger into next week, weakening the propositions for corn, and further threatening the soybean crop, which while pollinating later than corn, is facing a crucial test.
Monday, November 1, 2010
BHP (NYSE:BHP) Will Wait to Raise Bid for Potash (NYSE:POT)
Although there are many guesses as to how high BHP (NYSE:BHP) will raise its bid for Potash Corp. (NYSE:POT), one thing all agree on, is they are in no hurry to do it before they pass through regulatory hurdles, and in light of no competitor emerging to challenge them for the fertilizer giant.
UBS (NYSE:UBS) has offered one of the higher price scenarios, saying they may bid as high as $165 a share to gain the company. That would be surprising if they went that high, as BHP shareholders have reportedly said they don't want the bid to go any higher than 10 percent.
That is actually good news for BHP, as there has been pressure on them to expand through acquisition, but it's good to see shareholders not willing to grow at any expense.
Yet UBS analyst Olivia Ker wrote in a note, “BHP may be prepared to pay up to this higher limit given the strength in fertilizer prices as well as an approximate 30 percent re-rating of other names in the agricultural space since the bid was announced.”
That seems like a weak argument based on the fact a major reason for the 30 percent re-rating in the industry is from the bid of BHP for Potash. There is also of course the increased price of corn and soybeans, which most believe will leave farmers with more capital, which they could spend on more fertilizer.
Nothing can or will go forward until the decision by Canada in a couple of days whether they'll allow the deal to proceed.
UBS (NYSE:UBS) has offered one of the higher price scenarios, saying they may bid as high as $165 a share to gain the company. That would be surprising if they went that high, as BHP shareholders have reportedly said they don't want the bid to go any higher than 10 percent.
That is actually good news for BHP, as there has been pressure on them to expand through acquisition, but it's good to see shareholders not willing to grow at any expense.
Yet UBS analyst Olivia Ker wrote in a note, “BHP may be prepared to pay up to this higher limit given the strength in fertilizer prices as well as an approximate 30 percent re-rating of other names in the agricultural space since the bid was announced.”
That seems like a weak argument based on the fact a major reason for the 30 percent re-rating in the industry is from the bid of BHP for Potash. There is also of course the increased price of corn and soybeans, which most believe will leave farmers with more capital, which they could spend on more fertilizer.
Nothing can or will go forward until the decision by Canada in a couple of days whether they'll allow the deal to proceed.
Tuesday, October 26, 2010
Should BHP (NYSE:BHP) Raise its Potash (NYSE:POT) Bid?
A lot has been made of the rise in price of corn and soybeans and its affect on the bid by BHP (NYSE:BHP) for Potash Corp. (NYSE:POT), but in truth short-term fluctuations in price have little to do with valuations of a company, and if BHP raises its bid as a growing number of people believe, it shouldn't and probably won't be based on temporary crop prices.
BHP CEO Marius Kloppers has made it clear if the deal doesn't add value to shareholders, he will back away from it.
The challenge for Kloppers is he's under increased pressure to grow the company, and there simply aren't that many companies that can affect the bottom line in a way to satisfy shareholders.
So he can't pay too much for the company, but he also can't be perceived as too stingy if he does in fact lose the bid. Two prior attempts by Kloppers to make deals have failed, and he will be perceived as someone who can't get the job done or is attempting to make the wrong deals.
In the case of the recent failure to merge iron ore operations with Rio Tinto (NYSE:RIO) that was the case, so he now has to walk a fine line.
The failure of the Rio deal did have a positive effect on BHP, as it added over $5 billion to the company war chest for the Potash deal.
One caveat to the statement made about the short-term price of crops is if it is indeed considered a short term event. If it is, Potash will have to make the case for a higher bid price, if not, BHP will have to justify their price if it is thought crop prices will continue to hold or go up.
BHP CEO Marius Kloppers has made it clear if the deal doesn't add value to shareholders, he will back away from it.
The challenge for Kloppers is he's under increased pressure to grow the company, and there simply aren't that many companies that can affect the bottom line in a way to satisfy shareholders.
So he can't pay too much for the company, but he also can't be perceived as too stingy if he does in fact lose the bid. Two prior attempts by Kloppers to make deals have failed, and he will be perceived as someone who can't get the job done or is attempting to make the wrong deals.
In the case of the recent failure to merge iron ore operations with Rio Tinto (NYSE:RIO) that was the case, so he now has to walk a fine line.
The failure of the Rio deal did have a positive effect on BHP, as it added over $5 billion to the company war chest for the Potash deal.
One caveat to the statement made about the short-term price of crops is if it is indeed considered a short term event. If it is, Potash will have to make the case for a higher bid price, if not, BHP will have to justify their price if it is thought crop prices will continue to hold or go up.
Wednesday, October 20, 2010
Citigroup (NYSE:C) Likes What they See in Mosaic (NYSE:MOS)
Citigroup (NYSE:C) sees a lot of potential in Mosaic Company (NYSE:MOS), as they raised their rating on them from "Hold" to "Buy," while also pushing up the price target from $64 to $78.
The overall agriculture sector's strength was a major part of the impetus behind Citigroup's move, but they also feel Mosaic will benefit strongly from the BHP Billiton (NYSE:BHP) bid for Potash Corp. (NYSE:POT), especially if they end up increasing their bid for the fertilizer company.
Strong corn and soybean prices have changed the agriculture outlook for the next year or so, with expectations farmers will spend more money on their crops to improve yields because of potentially higher margins.
Mosaic is trading at $67.51, gaining $3.14, or 4.88 percent as of 12:57 PM EDT.
The overall agriculture sector's strength was a major part of the impetus behind Citigroup's move, but they also feel Mosaic will benefit strongly from the BHP Billiton (NYSE:BHP) bid for Potash Corp. (NYSE:POT), especially if they end up increasing their bid for the fertilizer company.
Strong corn and soybean prices have changed the agriculture outlook for the next year or so, with expectations farmers will spend more money on their crops to improve yields because of potentially higher margins.
Mosaic is trading at $67.51, gaining $3.14, or 4.88 percent as of 12:57 PM EDT.
Monday, October 18, 2010
When will Potash, (NYSE:POT), CF Industries (NYSE:CF), Mosaic (NYSE:MOS), Agrium (NYSE:AGU) and Intrepid Potash (NYSE:IPI) Cool Off?
The agriculture sector was hit with two major catalyst in the a similar period of time, giving companies like Potash Corp. of Saskatchewan (NYSE:POT), CF Industries (NYSE:CF), Mosaic (NYSE:MOS), Agrium (NYSE:AGU) and Intrepid Potash (NYSE:IPI) a big boost in share price.
It began when BHP (NYSE:BHP) made their $130 a share bid for Potash Corp. Then the confirmation came that corn and soybean yields would be far below prior estimates.
With the industry propped up from BHP's bid and assumptions some consolidation may start to happen, along with corn and soybean prices soaring, share prices of these companies and others connected to agriculture rose significantly.
Prices for all the companies mentioned above have soared since August.
Depending on if investors believe commodity prices are driving the move or the bid by BHP is the key factor, will determine how they are played. More than likely it's a combination of both. And depending on whether or not BHP is given the okay to take over Potash will decide how much of a factor that played in the sector.
At minimum if they are rejected, will see some pull back in the stocks. If they go forward, they could continue their upward climb for some time.
Another element is how much this will affect the price offered by BHP. They may have to push it up to somewhere in-between the existing share price of Potash and the $130 bid.
It began when BHP (NYSE:BHP) made their $130 a share bid for Potash Corp. Then the confirmation came that corn and soybean yields would be far below prior estimates.
With the industry propped up from BHP's bid and assumptions some consolidation may start to happen, along with corn and soybean prices soaring, share prices of these companies and others connected to agriculture rose significantly.
Prices for all the companies mentioned above have soared since August.
Depending on if investors believe commodity prices are driving the move or the bid by BHP is the key factor, will determine how they are played. More than likely it's a combination of both. And depending on whether or not BHP is given the okay to take over Potash will decide how much of a factor that played in the sector.
At minimum if they are rejected, will see some pull back in the stocks. If they go forward, they could continue their upward climb for some time.
Another element is how much this will affect the price offered by BHP. They may have to push it up to somewhere in-between the existing share price of Potash and the $130 bid.
Thursday, October 14, 2010
Monsanto (NYSE:MON), DuPont (NYSE:DD), Dow (NYSE:DOW) Receive Coverage from Credit Agricole (OTC:CRARY)
The soaring price of major grains corn, soybeans and wheat has a number of agriculturally related stock generating interest, as they soar in price, including firms like Monsanto (NYSE:MON), DuPont (NYSE:DD) and Dow Chemical(NYSE:DOW), which have had coverage initiated on them by Credit Agricole (OTC:CRARY).
Lower estimated crop yields in the sector are the reasons behind the surge in prices.
Monsanto and its nemesis DuPont were both started off with "Outperform," while Dow Chemical received an "Underperform" rating from Credit Agricole.
Dow Chemical closed the trading session on Wednesday at $29.82, rising a penny, or 0.03 percent. Credit Agricole has a price target of $88 on them.
Dupont finished at $46.88, gaining $0.59, or 1.27 percent. A price target of 54 has been placed on the company.
Monsanto performed the best of the three Wednesday, reaching $54.69, a gain of $2.44, or 4.67 percent. They have a price target of $60 a share.
Lower estimated crop yields in the sector are the reasons behind the surge in prices.
Monsanto and its nemesis DuPont were both started off with "Outperform," while Dow Chemical received an "Underperform" rating from Credit Agricole.
Dow Chemical closed the trading session on Wednesday at $29.82, rising a penny, or 0.03 percent. Credit Agricole has a price target of $88 on them.
Dupont finished at $46.88, gaining $0.59, or 1.27 percent. A price target of 54 has been placed on the company.
Monsanto performed the best of the three Wednesday, reaching $54.69, a gain of $2.44, or 4.67 percent. They have a price target of $60 a share.
Wednesday, October 13, 2010
BHP (NYSE:BHP) Saying Goodbye to $130 Potash (NYSE:POT) Bid?
Now that an unexpected factor offers support to Potash Corp. (NYSE:POT), BHP (NYSE:BHP) may have to rethink their bid of $130 a share for the company as rising grain prices have changed the game since that time.
Interesting that the market is now driving the value of Potash and other fertilizer and agricultural companies.
The good news for BHP, if they view it that way, is the added value of Potash, if they are approved for and win the company, is they will inherit a company whose intrinsic value is higher for a reason, and not because Potash executives pointed to a mythical period down the road when it would happen.
Now you've got the debt issue on the plate for BHP as well. But the higher value of Potash should help ease that, even it it's different from the original intent of the company.
Another major change from the higher price of grains is the attitude of Potash shareholders, who seemed poised to accept the deal, but now probably will consider $130 a share far too little.
Of course things change quickly in the volatile agriculture sector as far as prices go. The trend for corn, and by extension, soybeans and wheat, has been going up for months, and the lower corn and soybean yields should support that trend for awhile.
That means if BHP continues to pursue Potash, those prices will remain in place during the time of negotiations and due diligence. It looks like BHP will no longer come close to the $130 price if they want to land Potash.
Interesting that the market is now driving the value of Potash and other fertilizer and agricultural companies.
The good news for BHP, if they view it that way, is the added value of Potash, if they are approved for and win the company, is they will inherit a company whose intrinsic value is higher for a reason, and not because Potash executives pointed to a mythical period down the road when it would happen.
Now you've got the debt issue on the plate for BHP as well. But the higher value of Potash should help ease that, even it it's different from the original intent of the company.
Another major change from the higher price of grains is the attitude of Potash shareholders, who seemed poised to accept the deal, but now probably will consider $130 a share far too little.
Of course things change quickly in the volatile agriculture sector as far as prices go. The trend for corn, and by extension, soybeans and wheat, has been going up for months, and the lower corn and soybean yields should support that trend for awhile.
That means if BHP continues to pursue Potash, those prices will remain in place during the time of negotiations and due diligence. It looks like BHP will no longer come close to the $130 price if they want to land Potash.
Wednesday, July 21, 2010
Soybeans Futures Rise on Worsening Condition
Soybeans in the United States in good or excellent condition dropped from 72 percent at the end of June 13 to 67 percent at the end of July 18, pushing prices up 5.5 cents today, to $9.785 a bushel, a 0.6 percent gain.
Prices for oilseed have continued to rise since government data revealed soybean reserves in the U.S. dropped to their lowest levels in six years as of June 1.
In July, soybeans are up 8.4 percent, which if it continues on, will be the first positive territory they've enjoyed since April.
It's interesting to hear conflicting viewpoints as to the condition of soybeans and corn, as it has dry weather which has driven up prices recently, although some say it was too much rain earlier in the season which is the cause of the lower condition issue.
Prices for oilseed have continued to rise since government data revealed soybean reserves in the U.S. dropped to their lowest levels in six years as of June 1.
In July, soybeans are up 8.4 percent, which if it continues on, will be the first positive territory they've enjoyed since April.
It's interesting to hear conflicting viewpoints as to the condition of soybeans and corn, as it has dry weather which has driven up prices recently, although some say it was too much rain earlier in the season which is the cause of the lower condition issue.
Monday, July 19, 2010
Soybeans Follow Other Grains Down on Improved Weather
There was no doubt corn, wheat and soybeans were going to plunge if wetter and cooler weather was going to arrive in time, and now that it has, the major agricultural products plunged in price today, with soybeans right behind corn in how deeply they dropped.
Of the major three, wheat future dropped the least, as other factors outside the United States, like the Russian drought, continues to play a role there.
Soybean futures for November delivery had a decline of 13 cent to $9.72 a bushel, or a 1.3 percent drop.
Corn for December delivery dropped 3.3 percent, or 13.25 cents, to settle at $3.94 a bushel.
Of the major three, wheat future dropped the least, as other factors outside the United States, like the Russian drought, continues to play a role there.
Soybean futures for November delivery had a decline of 13 cent to $9.72 a bushel, or a 1.3 percent drop.
Corn for December delivery dropped 3.3 percent, or 13.25 cents, to settle at $3.94 a bushel.
Thursday, July 15, 2010
Russian Drought Drives Wheat Prices Higher
Major crops like corn and soybeans are up to high price levels today from heat concerns in the Midwest, and wheat has joined the grains, as a drought in Russia has pushed wheat prices to their highest levels in 7 months.
According to the Grain Producers' Union in Russia, the grain harvest will drop by a minimum of 20 percent from 2009, to 77 million metric tons.
Wheat futures have surged about 16 percent so far in July, as concerns over corn has traders believing wheat may have to be used to feed livestock, driving up the demand.
That and a declining U.S. dollar has also made the grain look good to investors.
Wheat futures for September delivery rose 29 cents, or 5.2 percent, to $5.88 a bushel at a little after 10:00 AM CDT on the Chicago Board of Trade, after going as high as $5.985, the highest price for a most-active contract since Nov. 23.
If the weather improves in the Midwest or Russia, the price of the grains will plunge quickly. It's also yet to be seen whether the actual damage from the weather will have the dramatic impact expected on all these crops, as global supply has been high for several years, especially with wheat.
According to the Grain Producers' Union in Russia, the grain harvest will drop by a minimum of 20 percent from 2009, to 77 million metric tons.
Wheat futures have surged about 16 percent so far in July, as concerns over corn has traders believing wheat may have to be used to feed livestock, driving up the demand.
That and a declining U.S. dollar has also made the grain look good to investors.
Wheat futures for September delivery rose 29 cents, or 5.2 percent, to $5.88 a bushel at a little after 10:00 AM CDT on the Chicago Board of Trade, after going as high as $5.985, the highest price for a most-active contract since Nov. 23.
If the weather improves in the Midwest or Russia, the price of the grains will plunge quickly. It's also yet to be seen whether the actual damage from the weather will have the dramatic impact expected on all these crops, as global supply has been high for several years, especially with wheat.
Corn, Soybean Prices Soar on Weather Concerns
Prices for soybeans increased to their highest price levels since the early part of May, while corn soared to its highest level in six months on forecasts of continue hot, dry weather in parts of the U.S. over the next month and a half. That could cause some major damage to crops if the weather projections hold up.
Corn futures for December delivery increased 7.75 cents, or 2 percent, to $4.04 a bushel at 10:17 AM CDT on the Chicago Board of Trade, after rising to $4.10, the highest price since January 12.
Soybean futures for November delivery exploded by 15.75 cents, or 1.6 percent, to $9.7775 a bushel in Chicago after going as high as $9.855, the highest price level since May 5.
Analysts say rain will have to come soon to prevent significant damage to both crops, which together account for close $80 billion in value, both of which the U.S. leads the world in production and exports.
The western and eastern parts of the Midwest are being hit the hardest by the weather.
Corn futures for December delivery increased 7.75 cents, or 2 percent, to $4.04 a bushel at 10:17 AM CDT on the Chicago Board of Trade, after rising to $4.10, the highest price since January 12.
Soybean futures for November delivery exploded by 15.75 cents, or 1.6 percent, to $9.7775 a bushel in Chicago after going as high as $9.855, the highest price level since May 5.
Analysts say rain will have to come soon to prevent significant damage to both crops, which together account for close $80 billion in value, both of which the U.S. leads the world in production and exports.
The western and eastern parts of the Midwest are being hit the hardest by the weather.
Friday, April 9, 2010
Soybeans Up on Weak Dollar
Soybean Inventory
In a move that is based solely on the weakening U.S. dollar, soybeans increased for the third time in four days, as U.S. exports become more appealing with the fall of the greenback.
Unless something extraordinary happens with the weather or geopolitically, this could be the last big upswing for soybeans for some time, as they have fallen 9.2 percent over the last year, and nothing in the fundamentals has changed to make that any different in the next year.
The global inventories continue to increase as well, with the latest figures showing as of September 30 they should reach 62.96 million metric tons, up from the March soybean inventory levels forecast of 60.67 million metric tons for September.
Of course the one wild card is how weak the U.S. dollar will become, as the Greece debt crisis has it going back and forth, depending on whether investors seek safety in gold, yen or the dollar.
Increasingly the haven of choice has been gold, even when the U.S. dollar increases. While that won't help soybeans, in the seasons when the U.S. dollar does go down, it does.
In a move that is based solely on the weakening U.S. dollar, soybeans increased for the third time in four days, as U.S. exports become more appealing with the fall of the greenback.
Unless something extraordinary happens with the weather or geopolitically, this could be the last big upswing for soybeans for some time, as they have fallen 9.2 percent over the last year, and nothing in the fundamentals has changed to make that any different in the next year.
The global inventories continue to increase as well, with the latest figures showing as of September 30 they should reach 62.96 million metric tons, up from the March soybean inventory levels forecast of 60.67 million metric tons for September.
Of course the one wild card is how weak the U.S. dollar will become, as the Greece debt crisis has it going back and forth, depending on whether investors seek safety in gold, yen or the dollar.
Increasingly the haven of choice has been gold, even when the U.S. dollar increases. While that won't help soybeans, in the seasons when the U.S. dollar does go down, it does.
Thursday, April 1, 2010
Soybeans Plunge on Huge Stockpiles
Soybeans plunge in price
The news for soybeans was even worse than expected, as the Department of Agriculture reported far more soybeans stockpiled than most had thought there were.
Soybeans for May dropped 33 cents to end the session at $9.41 a bushel.
Amazingly, farmers are poised to plant even more acreage in soybeans next year, defying common sense, bringing the estimated total to a record 78.1 million acres.
Hopefully this isn't because the taxpayers are getting fleeced again by subsidies, otherwise why would farmers continue on as if they couldn't learn from lessons from the last two years?
The news for soybeans was even worse than expected, as the Department of Agriculture reported far more soybeans stockpiled than most had thought there were.
Soybeans for May dropped 33 cents to end the session at $9.41 a bushel.
Amazingly, farmers are poised to plant even more acreage in soybeans next year, defying common sense, bringing the estimated total to a record 78.1 million acres.
Hopefully this isn't because the taxpayers are getting fleeced again by subsidies, otherwise why would farmers continue on as if they couldn't learn from lessons from the last two years?
Friday, March 26, 2010
Soybeans Plunge on South American Production
Soybean Demand
Soybeans plunged to their lowest levels in two weeks as concerns over strong production in South America will cut back on demand for U.S. soybean exports.
On the Chicago Board of Trade soybean futures dropped 17l5 cents to $9.425 a bushel, the steepest fall in price since March 11.
Soybean exports in the U.S. are expected to drop quickly as the South American harvest is exported around the world.
Brazil and Argentina are the second and third largest soybean exporters, behind the No. 1 exporter - the United States.
The combination of their harvest will increase supply by about 35 percent, while global inventory will rise 44 percent. The USDA said this is the largest increase ever before the soybean harvest in the U.S. starts.
Soybean Demand
Soybeans plunged to their lowest levels in two weeks as concerns over strong production in South America will cut back on demand for U.S. soybean exports.
On the Chicago Board of Trade soybean futures dropped 17l5 cents to $9.425 a bushel, the steepest fall in price since March 11.
Soybean exports in the U.S. are expected to drop quickly as the South American harvest is exported around the world.
Brazil and Argentina are the second and third largest soybean exporters, behind the No. 1 exporter - the United States.
The combination of their harvest will increase supply by about 35 percent, while global inventory will rise 44 percent. The USDA said this is the largest increase ever before the soybean harvest in the U.S. starts.
Soybean Demand
Wednesday, March 24, 2010
Marc Faber: Food at 200 Year Low
Marc Faber on Food Commodity Prices
Recently Marc Faber was talking food commodities and stated as a whole they are at their lowest levels when measured by real time dollars.
Faber said: “Food commodities are at 200 year lows in real time dollars.”
The question for the majority of food commodities is whether the supply of food will increase at a rate the demand is through a growing population.
Right now it seems there is a huge supply because, in fact there is. But that supply has come from a number of countries increasing their domestic acreage to grow a variety of commodities, especially major ones like wheat, corn and soybeans.
Once this come to fruition, the question then will be answered as to how the price of food commodities will react in the years ahead.
Even droughts and other events which bring down crop production hasn't dented the larger agricultural commodities because of the enormous amount being planted.
Eventually all of this will come to a head, but for now it seems a lot of the major food commodities will have downward pressure on prices.
One other major factor is the cost of inputs, which have seemed to rise in price some lately, but that can be offset by genetically modified plants which largely reduce the needs of those inputs, depending on which particular crop you're talking about.
The bottom won't hit with food commodities as a whole in my opinion, but they will be hit on a crop by crop basis, even more so the further you move from the major foods we eat.
Marc Faber on Food Commodity Prices
Recently Marc Faber was talking food commodities and stated as a whole they are at their lowest levels when measured by real time dollars.
Faber said: “Food commodities are at 200 year lows in real time dollars.”
The question for the majority of food commodities is whether the supply of food will increase at a rate the demand is through a growing population.
Right now it seems there is a huge supply because, in fact there is. But that supply has come from a number of countries increasing their domestic acreage to grow a variety of commodities, especially major ones like wheat, corn and soybeans.
Once this come to fruition, the question then will be answered as to how the price of food commodities will react in the years ahead.
Even droughts and other events which bring down crop production hasn't dented the larger agricultural commodities because of the enormous amount being planted.
Eventually all of this will come to a head, but for now it seems a lot of the major food commodities will have downward pressure on prices.
One other major factor is the cost of inputs, which have seemed to rise in price some lately, but that can be offset by genetically modified plants which largely reduce the needs of those inputs, depending on which particular crop you're talking about.
The bottom won't hit with food commodities as a whole in my opinion, but they will be hit on a crop by crop basis, even more so the further you move from the major foods we eat.
Marc Faber on Food Commodity Prices
Wednesday, March 17, 2010
Commodities: Grains Up on Weather
Grain Prices Up
With weather projected to have a negative impact on spring planting, grains responded by rising in price, with major crops wheat, corn and soybeans all increasing today.
Other factors helping grains jump up were the stock market rising and the dollar weakening again.
In the Midwest, it's expected to be wetter than it normally is, and in southern States like Texas, it's expected to be cooler; bringing doubt as to how the planting season will launch.
Floods are forecast for a number of Midwestern states, including Minnesota, Iowa and North Dakota.
This is all typical of this time of the year, and once acreage is detemined by the USDA, things always settle back down to market forces and usual grain pricing behavior follows.
Grain Prices Up
With weather projected to have a negative impact on spring planting, grains responded by rising in price, with major crops wheat, corn and soybeans all increasing today.
Other factors helping grains jump up were the stock market rising and the dollar weakening again.
In the Midwest, it's expected to be wetter than it normally is, and in southern States like Texas, it's expected to be cooler; bringing doubt as to how the planting season will launch.
Floods are forecast for a number of Midwestern states, including Minnesota, Iowa and North Dakota.
This is all typical of this time of the year, and once acreage is detemined by the USDA, things always settle back down to market forces and usual grain pricing behavior follows.
Grain Prices Up
Wednesday, March 10, 2010
Commodities: Soybean Futures Gain
Soybean Futures Rise
Soybean futures in the U.S. posted gains today after a weak open, as government estimates of soybean ending stocks in the U.S. were adjusted downward.
The other factor was an increase in crude oil prices, which had a upward effect on soybean futures prices as the day went on.
May soybeans at the Chicago Board of Trade hit a session high of $9.64-1/4 per bushel, increasing 16-3/4 cents or 1.8 percent. The market also pushed through major technical resistance, pushiing past the 20-day moving average of $9.55-1/2.
Soybean Futures Rise
Soybean futures in the U.S. posted gains today after a weak open, as government estimates of soybean ending stocks in the U.S. were adjusted downward.
The other factor was an increase in crude oil prices, which had a upward effect on soybean futures prices as the day went on.
May soybeans at the Chicago Board of Trade hit a session high of $9.64-1/4 per bushel, increasing 16-3/4 cents or 1.8 percent. The market also pushed through major technical resistance, pushiing past the 20-day moving average of $9.55-1/2.
Soybean Futures Rise
Wednesday, March 3, 2010
Commodities Rise on Weaker Dollar
Commodity Prices Rise as Dollar Drops
A number of commodity sector rose as the U.S. dollar weakened against major currencies.
Enjoying the increase were energy, metals and grains, with major crops like corn, soybeans and wheat increasing; something the grain market has been looking and hoping for for awhile.
Also rising in response to the collapsing dollar were gold, silver and copper, while on the energy side price also rose, even though they would normally have fallen on the news oil and gasoline pireced remained higher than expected for the previous week.
Oil gained $1.19 to finish the session at $80.87 on the New York Mercantile Exchange.
Commodity Prices Rise as Dollar Drops
A number of commodity sector rose as the U.S. dollar weakened against major currencies.
Enjoying the increase were energy, metals and grains, with major crops like corn, soybeans and wheat increasing; something the grain market has been looking and hoping for for awhile.
Also rising in response to the collapsing dollar were gold, silver and copper, while on the energy side price also rose, even though they would normally have fallen on the news oil and gasoline pireced remained higher than expected for the previous week.
Oil gained $1.19 to finish the session at $80.87 on the New York Mercantile Exchange.
Commodity Prices Rise as Dollar Drops
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