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FAO Food Price Index down marginally in November

December 16th, 2017

» The FAO Food Price Index* (FFPI) averaged 175.8 points in November 2017, down fractionally (0.5 percent) from October but still almost 4 points (2.3 percent) above the corresponding period last year. A sharp rise in sugar and vegetable oil quotations was largely offset by a fall in dairy values while international prices of cereals and meat products remained relatively muted.

» The FAO Cereal Price Index averaged 153.1 points in November, nearly unchanged from October but up almost 12 points (8.3 percent) from November 2016. The Index has remained largely steady since August, generally reflecting an overall balanced supply and demand situation especially with regard to wheat and maize markets. In November, international rice prices rose by 1.1 percent, amid stronger buying interest and currency movements.

» The FAO Vegetable Oil Price Index averaged 172.2 points in November, up 2.1 points (or 1.2 percent) from October and marking a 9-month high. The rise mainly reflects higher quotations for soy, rapeseed and sunflower oils. Soy oil quotations increased, as weather uncertainties continued to affect crops in South America and also because below-average oil content was reported for the United States’ recently harvested crop. International prices of sunflower and rapeseed oils rose, underpinned by, respectively, subdued availabilities and firm demand. Lower palm oil values, mainly following a hike in Indian import duties and higher than anticipated closing stock levels in Malaysia, prevented the index from rising further. Firm mineral oil values also lent support to vegetable oils prices.

» The FAO Dairy Price Index averaged 204.2 points in November, down 10.6 points (4.9 percent) from October, representing the second consecutive month of a sharp decline. However, the index is still 9.6 percent higher than November 2016. International price quotations for butter, cheese and whole milk powder (WMP) all fell, as rising milk output in all the major producing countries contributed to reducing concerns about the availability of supplies. Skim milk powder (SMP) prices slid to a near 18-month low, on continued uncertainty over the intervention stocks held by the European Union.

» The FAO Meat Price Index* averaged 173.2 points in November, almost unchanged from its slightly revised October value. International price quotations for pigmeat weakened for the third consecutive month, on account of slow import demand and large export availabilities. Similarly, ovine meat quotations slid downward, for the second successive month, largely due to continued increase in meat supplies in Oceania. By contrast, bovine meat prices rose for the third month in a row, supported by limited spot supplies from Oceania. Prices in poultry meat markets remained stable.

» The FAO Sugar Price Index averaged 212.7 points in November, up 9.2 points (4.5 percent) from October but still as much as 26 percent below the corresponding month last year. International sugar prices rose in November, mostly supported by a drop in exports from Brazil and concerns over firmer oil prices encouraging greater switch of cane crush to produce ethanol than sugar.

* Unlike for other commodity groups, most prices utilized in the calculation of the FAO Meat Price Index are not available when the FAO Food Price Index is computed and published; therefore, the value of the Meat Price Index for the most recent months is derived from a mixture of projected and observed prices. This can, at times, require significant revisions in the final value of the FAO Meat Price Index which could in turn influence the value of the FAO Food Price Index.

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FAO Food Price Index edges down in October

November 11th, 2017
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» The FAO Food Price Index* (FFPI) averaged 176.4 points in October 2017, down 2.2 points (1.3 percent) from September. Although at this level the FFPI was up 4 points (2.5 percent) from its value in October 2016, it remained 27 percent below its all-time high (in nominal terms) of 240 points registered in February 2011. With the exception of cereals, all the other indices used in the calculation of the FFPI fell in October.

» The FAO Cereal Price Index averaged 152.8 points in October, up a notch from September and 10.5 points (7.4 percent) higher than the same month last year. Among the major cereals, wheat quotations were generally lower, pressured by large exportable supplies from the Back Region and increased competition among exporters. Maize prices increased slightly in the US, although those from South America were weighed down by large supplies. Rice prices strengthened in October, amid seasonally tight Japonica and fragrant supplies, with additional support for Japonica prices stemming from a series of tenders in the Far East.

» The FAO Vegetable Oil Price Index averaged 170 points in October, down 1.8 points (or 1.1 percent) compared to the previous month and close to the level recorded one year ago. The index’ retreat was primarily driven by palm and soy oils. Palm oil values weakened on higher than anticipated inventory levels in Malaysia and the expectation of production gains in Southeast Asia, while soyoil prices eased on good soybean harvest progress in the United States and forecasts of ample global availabilities in 2017/18. Lower sunflower oil quotations, facilitated by large export availabilities in the Black Sea region, also weighed on the index.

» The FAO Dairy Price Index averaged 214.8 points in October, down 9.4 points (4.2 percent) from September and marking the first drop since May 2017. At that level, the index was 32 points (17.5 percent) above its value in October 2016, but 22 percent below its peak reached in February 2014. International quotations for butter, skim milk powder (SMP) and whole milk powder (WMP) eased in October, while those of cheese remained more stable. Butter and WMP prices fell as importers held back on purchases, awaiting arrival of new supplies from Oceania. Low demand and ample intervention stocks in the EU hastened the decline of SMP prices. A balanced cheese market contributed to more stable cheese quotations.

» The FAO Meat Price Index* averaged 172.7 points in October, down 1.6 points (0.9 percent) from September and continuing a trend of moderate declines that began in July this year. International prices of pig and ovine meat declined in October, while those of bovine meat increased and of poultry were stable. Intense competition among exporters and sluggish import demand have been behind the declines in pigmeat prices observed in recent months. However, bovine meat prices rose for the third consecutive month due to limited spot offers from Oceania. A seasonal increase in ovine meat supplies in Oceania pushed down ovine prices, while poultry meat markets remained well balanced.

» The FAO Sugar Price Index averaged nearly 203 points in October, down 1.4 points (0.7 percent) from September and as much as 112 points, or 36 percent, below the corresponding month last year. Sugar prices fell in October as the potential for higher supplies in 2017/18 was further reinforced with prospects for a larger beet crop in the EU and bigger output in the Russian Federation. Weaker Brazilian Real, increasing the potential for larger export sales from Brazil, also weighed on international prices, especially in view of a significant slowdown in purchases by China because of higher import tariffs.

* Unlike for other commodity groups, most prices utilized in the calculation of the FAO Meat Price Index are not available when the FAO Food Price Index is computed and published; therefore, the value of the Meat Price Index for the most recent months is derived from a mixture of projected and observed prices. This can, at times, require significant revisions in the final value of the FAO Meat Price Index which could in turn influence the value of the FAO Food Price Index.

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FAO Food Price Index mildly up in September

October 7th, 2017
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» The FAO Food Price Index* (FFPI) averaged 178.4 points in September 2017, up 1.4 points (0.8 percent) from August and 7.4 points (4.3 percent) above September 2016. Firmer prices in the vegetable oil and dairy sectors were behind the small month-on-month rise in the value of the FFPI.

» The FAO Cereal Price Index averaged 152.2 points in September, down 1.6 points (1.0 percent) from August. While the Index declined for the second consecutive month, it remained 8 percent above the corresponding month last year. Maize prices fell in September, reacting to ample supplies in South America and harvest pressure in the northern hemisphere. Wheat values were also weaker, with continued upgrading of this year’s harvest in the Russian Federation a major factor. By contrast, seasonally tight availabilities of fragrant rice and firm demand for higher quality Indica supplies kept international rice prices firm over the month.

» The FAO Vegetable Oil Price Index averaged 171.9 points in September, compared to 164.4 in August – rising for the second consecutive month and marking a 7-month high. The gain was primarily driven by palm oil, prices of which strengthened amid lower than anticipated production in Southeast Asia and firm import demand fuelled by low inventory levels in main importing countries. International soy oil prices also rose, mainly reflecting concerns about a slow start in plantings in South America, though the price increases were capped by larger than expected harvest estimates in the United States. Continued firmness in rapeseed and sunflower oil values also contributed to the rise in the index.

» The FAO Dairy Price Index averaged 224.2 points in September, up 4.5 points (2.1 percent) from the previous month. At this level, the index was 27.4 percent higher than the corresponding period last year, but still 18.6 percent below its peak reached in February 2014. The increase in September reflects continued supply constraints in Australia, New Zealand and the European Union, with growth in the United States remaining timid. Butter and cheese remain the dairy products in highest demand, especially in Asia. Meanwhile, international prices of Skimmed Milk Powder (SMP) and Whole Milk Powder (WMP) fell due to limited buying interests.

» The FAO Meat Price Index* averaged 173.2 points in September, unchanged from August but up 9.5 points (5.8 percent) compared to the same period last year. In September, a rise in the international prices of ovine meat countered a decline in pig meat quotations, while those of bovine and poultry meat remained largely unchanged. In the case of ovine meat, prices rose, buoyed by strong import demand, especially from the Middle East and South East Asia, coupled with continued overall supply constraints in Oceania. By contrast, pigmeat prices fell slightly, responding to improved supplies from Brazil. Poultry and bovine meat markets remained well supplied, keeping prices stable.

» The FAO Sugar Price Index averaged 204.2 points in September, nearly unchanged from August but as much as 101 points (33 percent) below the same period last year.  The rapid decline in sugar quotations since the beginning of this year reflects a continuing oversupply situation prevailing in world markets, in parallel with the slow-down in demand.

* Unlike for other commodity groups, most prices utilized in the calculation of the FAO Meat Price Index are not available when the FAO Food Price Index is computed and published; therefore, the value of the Meat Price Index for the most recent months is derived from a mixture of projected and observed prices. This can, at times, require significant revisions in the final value of the FAO Meat Price Index which could in turn influence the value of the FAO Food Price Index.

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Uncommon Cacao vs. global commodity markets

September 23rd, 2017
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A new report from the farmer financier highlights imbalances that disproportionately hurt farmers and create disincentives among manufacturers and retailers to push for change

To understand the impact that volatile commodity markets have on the “little guy,” just look at the Ivory Coast. The West African country is the world’s largest producer of cacao?—?the fruit that chocolate is made from. To help farmers stabilize income, the government sets a minimum price for purchasers: last year it was $1.88 a kilogram of cacao beans. But the markets had a different idea.

Higher-than-expected yields drove down futures prices for cleaned, roasted cacao beans on the London and New York markets. In turn, the Ivory Coast’s government slashed the guaranteed price to farmers by 36%?—?a decision that affects cacao farmers worldwide because the price is set every year in West Africa where 60% of the world’s cocoa is produced.

Here’s where Uncommon Cacao comes in. The Berkeley, Calif., social enterprise provides logistics and financial services to smallholder cacao farmers, connecting them with premium chocolate makers. It started in Belize in 2010 with a vision of making cacao trading more equitable for local farmers and has grown to a network of 2,600 farmers in five Latin American and Caribbean countries. Now it is looking to effect a systems change across the entire cocoa market through something the market currently lacks: farmer pricing transparency.

In its latest transparency report, Uncommon Cacao details the prices received by farmers in its network, where producers earned $1.30 a kilogram above the 2016 West Africa FarmGate price and 30 cents a kilogram above the average commodity price.

The report exposes several other issues in the cocoa value chain that affect farmers. One is the importance of cacao processing to farmer income. In Haiti, for instance, Uncommon Cacao partners with PISA, a cacao processor and farmer network that works with half of all farmers (and 70% of women farmers) in Uncommon Cacao’s network. Last year, the farmers received slightly below the West African FarmGate price for their crops?—?a legacy of Haiti’s notoriously opaque cacao market, where large export companies historically have bought “dried, unfermented, low quality cacao from smallholder farmers at prices below the commodity mark,” the report says.

Since PISA opened its own central processing plant, producers have seen earnings almost quadruple. What’s more, the report notes, they are “incentivized to protect their trees from the environmentally degrading charcoal market.” (An article by agricultural data company Gro Intelligence says that farming accounts for only 6.6% of the cocoa value chain; processing accounts for an additional 7.6% of the value.)

The report raises another issue that affects farmer income: the unreliability of product certification. Because existing certifications don’t verify quality or flavor of the beans, the report says, it leaves farmers at the mercy of commodity pricing because all cocoa beans are treated the same.

Finally, Uncommon Cacao highlights imbalances that disproportionately hurt farmers and create disincentives among manufacturers and retailers to push for change. “Our entire supply chain is only 10% or less of the price of a chocolate bar,” the report states. (Gro Intelligence’s data reveals that almost 80% of cocoa’s market value is in manufacturing and retail.) “We need consumers to pay more and retailers to get on board with margin transparency.”

Source:  news.impactalpha.com

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Texas wheat industry begins recovery after Hurricane Harvey

September 11th, 2017
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With Hurricane Harvey gone and most of the damage assessed, the Texas wheat industry looks forward to repairing, rebuilding and getting back to work.

Hurricane Harvey dropped a record of 50 inches, or 127 centimeters, of rain.

Following the flooding from Hurricane Harvey, some Texas ports are still closed, rail embargos remain in effect and virtually no wheat was inspected for export last week at Texas grain export elevators.

“Even with the human and industrial costs of the storm, the supply chain is making good progress toward bringing the system fully back on line as soon as possible,” the U.S. Wheat Association (USW) said.

The U.S. Federal Grain Inspection Service (FGIS) reported regions of Louisiana and North and South Texas account for 46% of total U.S. wheat exports based on the 5-year average. Texas elevators near Galveston, Houston and Corpus Christi account for about 56% of total Gulf wheat export volume. Texas wheat exports are almost all hard red wheat (HRW), and most of the volume moves through elevators in the Galveston and Houston area, which took the brunt of the storm.

The Port of Houston, which is a 25-mile-long complex of 150-plus private and public industrial terminals along the 52-mile-long Houston Ship Channel, closed in preparation of the storm making landfall. The port officially began recovery operations on Sept. 1. Fourteen container vessels have been serviced by a crew of 120 at Barbours Cut and Bayport terminals and those containers handled 3,000 additional gate transactions.

The Corpus Christi area did not experience the full force of the hurricane, so rail and elevator service likely will come back on line there first. The Port of Corpus Christi, about 220 miles to the south, is ranked 17th in the waterborne movement of agricultural commodities, with a total movement of 2.5 million tonnes.

“Reports from the Port of Corpus Christi indicate that grain elevators are mostly operational,” said Darby Sullivan, communications director with the Texas Wheat Producers Board, Amarillo, Texas. “Last week’s closure was to ensure that ships were able to enter the port safely. This week, they estimated that the railroads are running at about 80% speed and capacity.”

The USW noted it has not been able to obtain much detail about elevator operations in the North Texas region, but Sullivan said flood recovery work is still needed at some of the elevators. One elevator manager from the Houston area told her they loaded and unloaded some rail cars, but did not expect to be fully operational until late this week. At this point, the status of rail bed repairs will have the most influence on when the interruption eases.

With the safety and well-being of its employees and their families as its top priority, the Union Pacific (UP) Railroad said on Sept. 2 it is making good progress repairing lines serving the North Texas elevators. Some lines have re-opened, and the UP said even crucial east-west lines blocked by flood damage may be repaired by Sept. 7. The railroad’s report on Sept. 6 confirmed its progress on repairs.

The BNSF Railroad also serves the Texas Gulf supply system. Its latest report to customers on Sept. 5 said, “with improving conditions and aggressive efforts by our BNSF crews, rail service on most BNSF subdivisions in the Houston area and throughout southeastern Texas has been restored.”

Although the railroad said it is experiencing ongoing challenges involving the primary rail line that provides access to locations southwest of Houston, including Corpus Christi and Brownsville, it is re-routing or diverting as much traffic as possible around this affected location as well as other areas that are currently blocked. BNSF access into the Houston complex from the north and west is largely clear, the railroad said, which is important for HRW wheat moving from western Texas, Oklahoma, Kansas, Colorado and southwestern Nebraska.

Source: World Grain

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FAO Food Price Index up for the third month in a row

August 26th, 2017
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» The FAO Food Price Index* (FFPI) averaged 179.1 points in July 2017, up 3.9 points (2.3 percent) from June and the third successive month of increases. This latest rise put the Index nearly 16.6 points (10.2 percent) above last year’s level and at its highest since January 2015. A combination of supply constraints and currency movements provided support to prices of most cereals, sugar and dairy. Instead, meat values remained steady month-on-month, whereas the Vegetable Oil Index edged down.

» The FAO Cereal Price Index averaged 162.2 points in July, up almost 8 points (5.1 percent) from June and 14.1 points (9.5 percent) from July 2016. Cereal prices have risen consistently over the past three months, driven by stronger wheat prices and, to a lesser extent, also firmer rice quotations. Wheat values rose the most in July, as continued hot and dry weather deteriorated spring wheat conditions further in North America, fuelling quality concerns, particularly for higher protein wheat. Seasonal tightness also provided some support to rice quotations, although gains were capped by a slowdown in demand. Instead, maize values remained largely steady, as support provided by a more rapid pace of foreign purchases by China was outweighed by improved weather conditions in the United States.

» The FAO Vegetable Oil Price Index averaged 160.4 points in July, down 1.8 points (or 1.1 percent) from June and marking the lowest level since August 2016. The slide was driven by palm oil, the key commodity in the Index. International palm oil quotations continued to ease on good production prospects in Southeast Asia and weak global import demand, notwithstanding low inventory levels. On the other hand, world soy oil prices firmed, fuelled by concerns regarding soybean growing conditions in the United States, as unusually dry weather was reported from several producing regions. Rapeseed and sunflower oil values also strengthened, preventing the Index from falling more markedly.

» The FAO Dairy Price Index averaged 216.6 points in July, up 7.6 points (3.6 percent) from June and 74.3 points (52.2 percent) above its value in July 2016. Despite this latest increase, the Index is still 21 percent below its peak reached in February 2014. International prices of butter, cheese and Whole Milk Powder (WMP) increased, but those of Skimmed Milk Powder (SMP) declined.  Tighter export availabilities pushed butter prices to a new high in July, widening the spread between butter quotations and other dairy products further. While strong buying activity from Asian importers also underpinned cheese and WMP quotations, SMP prices were weighed down by slack demand and prospects of larger releases from the intervention stocks in the EU.

» The FAO Meat Price Index* averaged 175.1 points in July, virtually unchanged from June. At this level, the Index is 8.2 percent above July 2016 and 17.4 percent below its peak reached in August 2014. An increase in international prices for ovine meat in July was offset by downward price movements in bovine, pig and poultry sectors. In the case of bovine meat, prices fell due to weaker import demand in the United States because of increased domestic supplies. While global markets for pig and poultry meat remained well supplied, international prices could have declined further if not for strong consumer demand. Ovine meat prices rose for the fourth consecutive month, reflecting reduced export supplies from Oceania.

» The FAO Sugar Price Index averaged 207.5 points in July, up 10.2 points (5.2 percent) from June, but still 26 percent below its value a year earlier. July marked the first monthly increase in sugar prices since the beginning of the year. A strong appreciation of the Brazilian real was the main catalyst for July’s rebound in sugar quotations, although generally favourable weather aided the harvest in Brazil, the world’s largest supplier, as well as crop development in Thailand and India.

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FAO Food Price Index rebounds in May

June 17th, 2017
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» The FAO Food Price Index* (FFPI) averaged 172.6 points in May 2017, up 3.7 points (2.2 percent) from April and nearly 16 points (10 percent) higher than its May 2016 level.  The rebound in the value of the Index followed three months of consecutive declines. With the exception of sugar, all other commodity indices used in the calculation of the FFPI increased in May.

» The FAO Cereal Price Index averaged 148.1 points in May, up 2 points (1.4 percent) from April, but still 4.4 points (2.9 percent) below its value of May 2016. Weather developments and stronger trade activity underpinned wheat export prices, while strong demand for higher quality Indica rice drove up international rice prices for the sixth-successive month.  Large global availabilities prevented strong gains in maize export prices.

» The FAO Vegetable Oil Price Index averaged 168.7 points in May, posting a month-on-month increase of 7.6 points (or 4.7 percent) – after three months of consecutive declines. The May reversal in trend mainly reflects rising palm and soy oil prices. While palm oil quotations firmed on rising global import demand, which kept world inventories low, soy oil prices rose on expectations of continued robust consumption, in particular in the United States. In both markets, unusually strong demand outweighed the price-depressing effect of anticipated improvements in global supplies.

» The FAO Dairy Price Index averaged 193 points in May, up 9.5 points (5.1 percent) from April and as much as 51 percent from May 2016. In spite of the latest increase, the index is still 30 percent below its peak reached in February 2014. Quotations of all the dairy products that compose the index rose in May. In the case of butter, firm domestic demand in Europe and North America provided support to prices, while ample intervention stocks in the EU limited the increase in skim milk powder prices.

» The FAO Meat Price Index* averaged 171.7 points in May, up 2.5 points (1.5 percent) from April, continuing the trend of modest price increases observed since the beginning of the year. Quotations for pig, bovine and ovine meat all rose, while those for poultry meat were stable. Pig meat prices increased on firm demand, while bovine meat prices gained ground amid limited export availabilities from Oceania. Meanwhile, ovine meat prices rose for the third consecutive month, bolstered by constrained export supply.

» The FAO Sugar Price Index averaged 227.9 points in May, down 5.4 points (2.3 percent) from April and marking a 13-month low. Sugar prices were heavily affected by higher-than-expected sugar output in Brazil’s centre-south region, combined with the sudden slide in the Brazilian Real, which discouraged crush for ethanol in the domestic market in favour of relatively more lucrative sugar exports. Expectations of larger exports from Pakistan and China’s decision to impose high duties on imports beyond its WTO tariff-rate quota (TRQ) commitment exerted additional downward pressure on international sugar prices.

* Unlike for other commodity groups, most prices utilized in the calculation of the FAO Meat Price Index are not available when the FAO Food Price Index is computed and published; therefore, the value of the Meat Price Index for the most recent months is derived from a mixture of projected and observed prices. This can, at times, require significant revisions in the final value of the FAO Meat Price Index which could in turn influence the value of the FAO Food Price Index.

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Who is buying US wheat? Export markets

June 3rd, 2017
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U.S. wheat producers have had a productive trading relationship with several countries for many years.

However, changing supply and demand factors in the global wheat market are also demanding change in where the U.S. must promote its wheat.

Steve Wirsching, vice-president and director of the U.S. Wheat Associates (USW) West Coast office in Portland, said while prices for wheat may be down, “We are still selling wheat to our traditionally strong buyers that are willing to pay a premium to get the high quality that comes from U.S. hard red spring wheat (HRSW), hard red winter wheat (HRWW) and soft white wheat (SWW) wheat.”

Those markets include Japan, Taiwan, Korea and the Philippines that all import U.S. wheat from Pacific Northwest export elevators, and where U.S. wheat remains the market share leader.

Mexico is another strong market for U.S. wheat.

In fact, in the first 10 months of the marketing year 2016/17 through April 6, Mexico’s flour millers imported almost 3.1 million metric tons (113.89 million bushels) of U.S. wheat, more than any other country.

“That volume is up 39 percent over last year at the same time,” Wirsching said.

For all U.S. farmers, and particularly those in the Northern Plains and Pacific Northwest, quality buyers are “crucial,” he added. “Demand is growing in Southeast Asia and parts of Latin America.”

The U.S. has established markets in Southeast Asia, such as the Philippines, but countries, such as Indonesia, Malaysia, Vietnam, Thailand and Myanmar are experiencing a “big jump in population and disposable income. Given the additional buying power, people there are showing a preference for wheat foods over rice.”

Urbanization and growing demand for western foods like pizza, hamburgers and bagels there are also a boost for farmers who produce HRSW.

Exports in the current marketing year of U.S. HRS are up 31 percent compared to last year, most of which flow from the Northern Plains to Pacific Northwest export elevators.

A similar change is taking place in Latin America.

“Consumers are purchasing less bread from small artisan bakers and significantly more in supermarkets and even big box stores like Wal-Mart and Costco,” Wirsching said.

Often the products are baked in the store from frozen dough or items that are partially baked at a central location and shipped to stores.

“Such products require flour from wheat with strong, high performing wheat like HRSW and HRW,” he added.

Total exports of HRW in the current market year are double last year’s total sales to date.

“Indonesia’s HRW imports are also double this year and Chile and Peru have also purchased more HRW this marketing year,” Wirsching added.

Increasingly, USW, which promotes U.S. milling wheat in overseas markets, is shifting its activities to these growing markets. That is mainly a response to the opportunities there but also to increasing competition from wheat produced in the Black Sea region, including Russia and Ukraine.

“With sufficient quality in their wheat, which is most similar to our HRWW and very low export prices, Russia has been dominating the large but price sensitive markets like Egypt and other Middle Eastern and North African countries,” Wirsching said.

“They also have a logistical advantage that makes their wheat even less expensive than U.S. wheat.”

He explained that at times over the past few years, Russian wheat export prices were offered as much as $50 per metric ton (36.74 bushels of wheat) cheaper than comparable U.S. wheat.

“That is a big change because we used to sell as much as 40 percent of our annual total exports to those markets,” Wirsching said.

USW funding comes from state wheat commissions, but USDA’s export market development budgets are finite.

“We have to protect our solid reputation for producing the highest quality wheat in the world,” Wirsching said. “So we have shifted money and people from those markets to support the opportunities in Asia and Latin America.”

While the total volume of exports has remained fairly-flat year-to-year, the total value that U.S. exports return to U.S. producers and the supply chain still far exceeds any other competing exporters.

USW publishes historical and current marketing year commercial export sales of U.S. wheat every Thursday online at http://www.uswheat.org/commercialSales.

Other reports at http://www.uswheat.org/reports include a monthly global supply and demand summary, weekly export prices, a weekly update of U.S. wheat harvest progress, and complete crop quality reports for all six U.S. wheat classes.

Source:  farmandranchguide.com

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The FAO Food Price at near two-year high in January

February 4th, 2017
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» The FAO Food Price Index* (FFPI) averaged 173.8 points in January 2017, up 3.7 points (2.1 percent) from the revised December value. At this level, the FFPI is at its highest value since February 2015 and as much as 24.5 points (16.4 percent) above its level in the corresponding period last year. The strong rebound in the January value of the FFPI was driven by a surge in international sugar quotations and sharp increases in export prices of cereals as well as vegetable oils. Meat and dairy markets remained more stable.

» The FAO Cereal Price Index averaged 147 points in January, 4.8 points (3.4 percent) above December and representing a six-month high. International prices of all major cereals strengthened in January. Wheat values rose mostly on concerns over unfavourable weather hampering 2017 crops and the reported reduction in winter wheat area in the United States. The firming of maize values largely reflected strong demand and uncertain crop prospects in South America. International rice prices also increased, amid expectations of a return of important buyers to the market, coupled with lower export availabilities in India as a result of ongoing state procurement.

» The FAO Vegetable Oil Price Index averaged 186.3 points in January, up 3.3 points (1.8 percent) from December and marking the third consecutive monthly increase. The rise continued to be driven by palm oil, the prices of which climbed to a 30-month high on persistent concerns over slow production recovery in Southeast Asia and low global inventory levels, amid strong import demand. While rapeseed oil prices also increased further, fuelled by a tight supply outlook for 2016/17, soy oil prices eased on expectations of ample global availabilities, notwithstanding recent downward revisions for soy crops in the US and Argentina.

» The FAO Dairy Price Index averaged 193 points in January, unchanged from December.  Prices were little changed across the board, a marked departure from the trend recorded in the second half of 2016, when the Index jumped by 50 percent (May-December).  With peak seasonal production moving from the southern to the northern hemisphere and many major buyers having secured adequate supplies in earlier months, trade remained subdued.

» The FAO Meat Price Index* averaged 156.7 points in January, almost unchanged from its revised value for December.  A rise in quotations for bovine meat was counterbalanced by a fall for those of ovine meat and a small decrease for poultry and pig meat.  In Australia, herd rebuilding constrained supplies of bovine meat for export and caused prices to climb. In the case of ovine meat, Oceania export prices dropped for the third month in a row, reflecting the seasonal slaughter peak and an associated boost in supply. Pig and poultry meat quotations also recorded their third month of decline, with a market characterized by generally abundant world supplies and stable demand.

» The FAO Sugar Price Index averaged 288.5 points in January, up 26 points (9.9 percent) from December 2016. The sharp increase in international sugar prices in January was mainly underpinned by firmer expectations of a global sugar production shortfall in 2016/17. Less buoyant growth prospects for sugar output are mainly attributed to protracted supply tightness in some of the key sugar producing regions, specifically in Brazil, the world’s largest sugar producer and exporter, as well as in India, the world’s second largest producer, and Thailand.

* Unlike for other commodity groups, most prices utilized in the calculation of the FAO Meat Price Index are not available when the FAO Food Price Index is computed and published; therefore, the value of the Meat Price Index for the most recent months is derived from a mixture of projected and observed prices. This can, at times, require significant revisions in the final value of the FAO Meat Price Index which could in turn influence the value of the FAO Food Price Index.

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IGC lifts world wheat production forecast

January 21st, 2017
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The International Grains Council (IGC) on Jan. 19 raised its forecast for world wheat production in 2016-17 to 752 million tonnes, up from its late November forecast of 749 million tonnes and compared with the record outturn of 736 million tonnes in 2015-16.

The IGC forecast 2016-17 world wheat ending stocks at a record 235 million tonnes, unchanged from the previous projection issued in November and up 14 million tonnes from 221 million tonnes in 2015-16.

The IGC also raised its projection for total grains production to 2.094 billion tonnes, up from 2.084 billion tonnes in November, and up from 2.005 billion in 2015-16.

Total consumption was raised to 2.062 billion tonnes from 2.056 billion tonnes.

“Apart from barley, solid growth is expected for most grains, but with a particularly sharp increase in maize output,” the IGC noted in its report. “Led by strong gains in use for feed, but with food and industrial demand also rising, grains consumption is expected to exceed 2 billion tonnes for only the second time. However, a comparatively steeper increase in supplies will lead to a fourth successive year of stock building, including records for wheat and maize. Trade is seen declining slightly, mainly on the reduced need for imported feed supplies in China.”

The IGC forecast 2016-17 maize production at 1.045 billion tonnes, up from 1.042 billion tonnes in November and compared with 971 million tonnes in 2015-16. The consumption projection was raised to 1.028 billion tonnes from 1.026 billion tonnes in November.

Decreases in the United States and Argentina only partly offset by increases in other regions led the IGC to project a decrease in 2016-17 world soybean production, to 334 million tonnes, from 336 million in November. The consumption projection, meanwhile, was raised to 333 million tonnes from 332 million. The IGC said global trade is expected to hold at 137 million tonnes.

The 2016-17 world outturn for rice is expected to total 482 million tonnes, down from 485 million in November. The IGC said the decrease reflects diminished prospects in South Asia, notably in Sri Lanka.

The IGC Grains and Oilseeds Index (GOI) rose by nearly 4% to its highest level in five months, the IGC said.

“Market direction was shaped by multiple factors, with particular underpinning to wheat, maize and soybeans stemming from some weather-related crop worries in key exporters,” the IGC said. “Robust international demand provided additional support at times, especially to rowcrops, while technical features, activity by funds and currency movements were sometimes influential.”

Source: World Grain

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