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Agrimoney LIVE as it happens - day one conference diary

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19:45 Fuel for thought

There is some talk on the sidelines as the day draws to a close about China's ethanol trade statistics – and the country's move increasingly into net exporterdom.

The country shipped 13,540 cubic metres of ethanol last month - up nearly 12-fold year on year, customs data showed.

Meanwhile, imports shrank to 23 cubic metres, from 53,142 cubic metres in April last year.

The direction of the trade dynamics is not a surprise, even if its extent is eyebrow-raising.

China has removed a preferential tax rate for US and Brazilian ethanol cargos, reverting to a normal rate of 30%, while reintroducing a 13% tax rebate on its own exports, besides introducing various corn processor subsidies.

The shift has indeed come amid a drive to encourage corn use, and cut down the country's huge inventories of the grain.

However, the data is posing a few questions, such as how far can exports keep rising? China is seen as having limited corn ethanol manufacturing capacity. (A figure of 7m-8m tonnes was mentioned.)

And how big really is the appetite for ethanol of Saudi Arabia, the top destination for Chinese ethanol exports last month, at 8,967 cubic metres?

Furthermore, what is happening to the distillers' grains produced by China's ethanol plants? If they leak into Vietnam, that could represent another barrier to the US regaining its dominance in that market – let alone in China itself.

18:15 When less costs more

US investors have got used to paying more for lower-quality wheat.

That is, relatively ample supplies of hard red winter wheat have seen Kansas City futures often trade at a discount of late to Chicago soft red winter wheat, despite the latter having a lower premium.

But it seems the same has been happening occasionally in Europe too – and for quite a different reason.

The CME Group's European wheat contract has slightly lower specifications than its longer-established Euronext rival, eg having a bushel weight specification of 74 kilogrammes per hectolitre.

The Euronext (ie Matif) equivalent is 76 kilogrammes per hectolitre.

However, the CME contract has sometimes gained a premium thanks to the fact that it is deliverable in inland France, rather than in the ports of Rouen and Dunkirk (as is the Euronext contract), says CME Group's Lisa Kallal.

Depending on where the demand is, the strictures of wheat being deliverable only at the two French ports can be a disadvantage, necessitating a discount to account for extra transport costs.

CME wheat was behaving itself on Tuesday, in closing at E169.00 a tonne for December, a discount of E2.25 a tonne to its Matif peer.

But that discount was down E0.75 a tonne over the session.

14.30 'Spend more on tech'

More money needs to be spend on developing artificial intelligence in agriculture, said Arnaud Petit, director commodities and trade at farmer co-operative body Copa-Cogeca.

Speaking at a session at Agrimoney LIVE he said farmers already had technology which could tell them how much fertiliser to apply or where to apply pesticides, but that they needed something which connected all of these and provided interlinked advice.

He also talked of big losses in winter grains in northern Europe (Scandinavia) – maybe 20%. Copa Cogeca will produce quarterly estimates in a few weeks' time.

13.55 'Fake' beef strides ahead

Synthetic proteins are a bigger threat to the meat industry than the growing popularity of vegan diets.

According to Marc Sadler from the World Bank, the main issue with synthetic proteins has been their texture.

"This has always been the issue with meat substitutes, as 60-70% of the experience of eating is to do with texture.

"Some companies are breaking through - in their blind tastings it has been impossible to tell the difference between real and synthetic meat."


Weather outlook

Lots of interesting snippets from Kyle Tapley, of MDA Weather Services.

On El Nino, it looks like if one does develop this year, it will be a weak one, and will "probably come too late to have a big impact on northern hemisphere growing conditions", he says.

That is not necessarily a positive for northern hemisphere farmers, given that El Nino gives a 4.2% boost to US corn yields, compared with trend, and a 3.3% lift to soybean yields, on MDA estimates. (It is La Nina which is the danger to the Corn Belt.)

Indeed, the US looks set this summer for "widespread above-normal temperatures that could lead to heat stress", with dryness looking an issue for the southern Plains and southern Midwest.

…but not that much of an issue. MDA sees the US corn yield coming in at a very respectable 170.8 bushels per acres this year, and the soybean yield at 49.0 bushels per acre.

Where Mr Tapley sees a bigger threat is to the Black Sea, where dry conditions in the summer may "stress corn and sunflowers", but likely come too late to affect wheat potential.

In Europe too, "dry weather this summer in Spain, Romania, and Bulgaria may stress corn and sunflowers", with – importantly – France, the bloc's most important corn grower, being mentioned in dispatches too.

11: 37am 'Scary sugar short'

Agricultural commodities are a boon for momentum traders, says Fiona Boal, director, commodities at Fulcrum Asset Management.

This is because of the lag between markets signalling a supply imbalance, and producers' being able to respond by raising or lowering output.

"It needs time for higher prices to work back to production," or for lower prices to turn the supply taps down, Ms Boal says.

"This makes agricultural markets are particularly well suited to momentum strategies."

The "scary" shorting for instance, in sugar, prices of which have tumbled on expectations of a potential return to a production surplus ahead, has produced "positive" results, she says.

11.06am India, Africa trump China

Is China really such a big, and positive, theme for commodities and agriculture?

Many observers seem to think so. But Erik Norland, senior economist at CME Group, takes a more jaundiced view.

"A further slowdown in the Chinese economist will likely negatively impact commodity prices, including iron ore, of which China consumers two thirds of the world supply," he says.

"This in turn could put downward pressure on the economics of commodity-producing nations like Australia."

In ags, the zeitgeist is "no longer going to be about China.

"India looks very interesting. And Africa is going to huge population growth."


The conference has not kicked off proper, and already Agrimoney LIVE has a (minor) scoop – that one of the major speakers used to be a motorbiking fiend, and indeed rode a Honda around the UK in 1981, reaching Land's End.

He (it is a he, and not a UK national) still has a moped.

Which speaker? Guesses (and other comments) to


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