Tag Archives: supply
Grain Futures Mixed Ahead Of USDA Supply Report
Aug 12, 2013 Investing.com Investing.com – U.S. grain futures were mixed to lower on Monday, as traders looked ahead to a closely-watched monthly U.S. supply and demand report due later in the session, which is expected to show record production prospects for U.S. corn and soybeans this season. Market players also continued to monitor weather conditions across grain-growing regions in the U.S. Midwest and in the Great Plains. On the Chicago Mercantile Exchange, corn futures for September delivery traded at USD4.6363 a bushel, down 0.4%. September corn futures hit a session low of USD4.6188 a bushel earlier in the day, the weakest level since October 4, 2010. The September corn contract settled down 1.65% at USD4.6560 a bushel on Friday as improving U.S. weather and crop prospects in the U.S. Midwest and Great Plains-region drove prices lower. Weather forecasting models continued to point to near-perfect temperatures across most parts of the U.S. Midwest during the next few days, easing concerns over potential U.S. crop damage. The USDA said nearly 64% of the U.S. corn crop was rated in ‘good’ to ‘excellent’ condition as of last week, significantly higher than the 23% recorded in the same week a year earlier. Nearly 11% of the corn crop was in ‘poor’ to ‘very poor’ condition, compared to 50% recorded in the same week a year earlier. Meanwhile, wheat for September delivery traded at USD6.3200 a bushel, down 0.2%. Prices of the grain hit a daily low of USD6.3063 a bushel earlier in the session, the weakest level since June 18, 2012. The September contract settled down 1.2% at USD6.3340 a bushel on Friday. The USDA said that nearly 87% of the winter-wheat crop was harvested as of last week, up from 81% a week earlier and above the five-year average of 86% for this time of year. Elsewhere on the CBOT, soybeans futures for September delivery traded at USD12.2775 a bushel, up 0.8%. The September contract settled down 0.75% at USD12.1840 a bushel on Friday. Prices of the oilseed remained supported amid indications of strong demand for U.S. supplies from China. China is the world’s largest soybean consumer, accounting for nearly 60% of global trade of the grain. Prices of the oilseed fell to USD11.8687 a bushel on August 5, the weakest level since January 31, 2012 amid improving U.S. weather and crop prospects in the U.S. Midwest and Great Plains-region. According to the U.S. Department of Agriculture, approximately 79% of the U.S. soy crop bloomed as of last week, up from 65% in the preceding week. The report also showed that nearly 64% of the soy crop was in ‘good’ to ‘excellent’ condition as of last week, significantly higher than the 29% recorded in the same week a year earlier. Corn is the biggest U.S. crop, followed by soybeans, government figures show. Wheat was fourth, behind hay. Continue reading
Risks to Global Food Supply and Impacts to Investors – Steve Yuzpe
By Sprott Group August 06 2013 “Control oil and you control nations; control food and you control the people.” Henry Kissinger Steve Yuzpe is the Chief Financial Officer for Sprott Resource Corp ., a publicly traded company that invests in the private equity side of the natural resource sector. Steve spoke about investing in agriculture at the Agora Symposium in Vancouver. He believes the world will one day be faced with localized food shortages and globally rising food prices that could create, in the worst-case scenario, civic upheaval in the most affected areas. According to Steve, there are several factors threatening the global supply of food. Climate change, he says, causes weather conditions to become more volatile, potentially having an enormous impact on our food supply and the productivity of existing farmland. Steve also believes that water issues are probably the least discussed factor when people talk about food scarcity. Agriculture and other uses are depleting non-refreshing, ancient fossil aquifers all over the world. When they run out, they are finished. The most intensely used ‘fossil water reserves’ will eventually disappear. In particular, the Ogallala Aquifer, which supplies about 30 percent of all groundwater used for irrigation in the U.S. is running out, he says. Lake Mead and the Colorado River are also examples of areas under water stress in the U.S. “Food insecurity and food inflation are a permanent part of our world going forward,” Steve told the crowd. “Ultimately, I believe that wars will be fought and governments toppled over the need for food and water.” “The term ‘peak water’ will become more commonly used over the coming years. By some estimates, at least 56% of the world population lives in ‘water vulnerable’ areas.” I followed up with Steve after the speech: What investment ideas in agriculture could pan out? “The areas where there may be opportunities in agriculture over the next five years include taking advantage of the growing consumer demand for healthy foods, and greater attention being paid to nutrition. Companies that provide food traceability and safety services, like the tags on the ears of animals being raised for meat production, are likely to benefit. As we tragically saw during the mad cow disease outbreak that culminated in a European ban on British beef in 1996, the ability to trace the source of food is essential to assuring a safe food supply.” Do soil degradation and erosion spell a definite decline in food production? Is this an inevitable side-effect of agriculture? Unsustainable agricultural practices are the single greatest contributor to the global increase in soil erosion rates. “Soil erosion is potentially a huge problem in the future and yet, it does not need to be problem.” Modern no-till techniques have evolved, in which an air drill sends the grains and fertilizers into the ground without disrupting the topsoil, Steve explains. “But this has only been applied to 10% of agricultural production so far — a shame for the farmland we continue to lose every year. Once the organic matter and moisture have left the soil, it takes a lot of time to build back up.” Could water rights be a good way to play the need for greater food production, and a possible shortage of water? “Investing in water is also interesting but, of course, water is a basic necessity for survival, which means that governments are unlikely to allow prices to rise too much. Right now, water is almost free, so it’s mispriced. If you want to invest in water rights, the best places to invest are in geographic areas where the local constituency can afford to pay market rates and there is rule of law. Otherwise, your investment is likely subject to a lot of political risk, as government control of prices and confiscation become more than just possibilities.” Steve Yuzpe has 15 years of experience with financial administration management in public and private corporations. Sprott Resource Corp .is a Canadian-based company, the primary purpose of which is to invest and operate natural resource projects. Through acquisitions, joint ventures and other investments, Sprott Resource Corp . seeks to provide its shareholders with exposure to the natural resource sector for the purposes of capital appreciation and real wealth preservation. Continue reading
