Organic farming: Going against the grains

images (9) Harn Soper understands why the vast majority of Iowa farmers focus on producing grain for biofuels and livestock feed.

“It’s hard to walk away from a model that lets you grow corn and soybeans in the summer, harvest in the fall and head for Florida in winter,” Soper quipped.

Soper, 63, has returned to his native Iowa after a three-decade career in the music business in California. He’s midway through the three-year process of converting most of his family’s 100-year-old, 1,000-acre farm to production of organic corn and vegetables, grass-fed cattle and chickens raised outside of confinements.

“Iowa has never been a huge vegetable producer,” said Neil Hamilton, director of the Agricultural Law Center at Drake University. “He is changing the scale of sustainable agriculture.”

Weather, labor, higher costs and other barriers have kept organic farming tiny. About 1,000 of Iowa’s 92,000 farm operations are organic.

The search for markets can be the toughest hurdle. Soper is rebuilding the former McNally’s Bakery, in a 107-year-old building in Emmetsburg’s square, into a combination restaurant, bakery and organic foods store to sell the produce from his “New Shoots” farm.

The produce from a 100-acre vegetable plot can’t all be sold in Emmetsburg or at farmers markets. Soper is knocking on doors at Iowa State University and office buildings in Des Moines, looking for buyers for the potatoes, squash, garlic and other vegetables that will be washed and packaged on his farm.

“In regular agriculture, all you do is drive the truck to the elevator and unload,” Soper said. “With organics, you have to hit the road. I understand why everybody doesn’t want to do it.”

Soper wants to do it. He was imbued with the “sustainable ethic” while living in California. The native Iowan grew up in Muscatine and Sioux City and received a master’s degree at the University of Iowa before heading west.

His cousins ran the farm until 2007, when he was asked to run it.

Funding for his plan came from a surprising place. Early in the last decade, the Soper family sold about 40 acres, at about $18,000 per acre, for the Wild Rose Casino near Emmetsburg.

“It’s ironic that proceeds from a sale for a casino now will fund an organic and sustainable farm venture,” Soper said.

Organic and sustainable agriculture isn’t new in Iowa. But ventures such as Soper’s, aimed at vegetable production and with its own built-in market, are rare.

Iowa’s unforgiving winters and erratic rainfall patterns have been long considered antithetical to vegetable production bigger than backyard gardens. Most producers have sold at the multitude of farmers markets that have popped up around the state in the last decade.

“This will be one of the larger types of organic operations that I’ve heard of in Iowa, particularly vegetable production on that scale,” said Iowa Secretary of Agriculture Bill Northey.

Organics are a small but growing niche in America’s food chain. The latest figure from organic trade associations show that in 2009, organics made up 3.7 percent of total U.S. food sales.

Organics are slowly moving up past the farmers markets. More than half of organics now are sold in mainstream supermarkets. Wal-Mart last year announced a new initiative to put organics in its retail grocery outlets.

Corporate agriculture is coming to terms with small-scale agriculture. Deere & Co. Chairman Samuel Allen said in an interview last summer that the implement giant was willing, even eager, to manufacture and market its midget-sized equipment to smaller producers.

At the same time, the “buy fresh, buy local” movement has gained momentum, as critics decry the health and environmental costs of industrial agriculture.

“We pour nitrogen on fields to grow corn like pumping steroids into a prizefighter,” Soper said.

“The concept that Iowa agriculture feeds the world is false,” he said. “We produce grains for livestock feed for countries that can afford it. Some of those countries use our grain to feed livestock to sell for export to pay off their World Bank loans, rather than feed their own people.”

Critics of the organic and sustainable agriculture movement have fired back.

Last summer Republicans attacked the fresh food movement in the first round of U.S. Department of Agriculture appropriations hearings.

Iowa farmer Tim Burrack of Arlington took to the floor at the USDA’s annual review last winter in Washington to criticize U.S. Secretary of Agriculture Tom Vilsack’s “know your farmer, know your food” grants to small farmers.

“The USDA has shifted on me,” said Burrack. The promotion of small-scale agriculture will drive up food costs because larger farms are more efficient, he said.

Northey, a fourth-generation farmer, withstood the attacks on big-scale agriculture by Democrat Francis Thicke, an organic dairy farmer, to win re-election by a 2-to-1 margin.

“There’s room for everybody in agriculture,” said Northey. “We can have more vegetable production in Iowa. But I don’t see millions of acres converted from corn and soybeans to vegetables.”

Cost is an issue. Northey said the recent economic squeeze has slowed what had been sharp increases in sales of organic produce.

“Some folks just aren’t willing to pay extra for organic vegetables,” said Northey.

Another issue for vegetable production will be labor. The 600-horsepower tractors, eight-head combines and 24-row planters that make massive corn and soybean production so efficient are relatively useless in vegetable production that still is largely done by hand.

Soper said he will need up to a dozen seasonal workers in vegetable production. Such workers tend to be migrants, whose nomadic lifestyles and cultural and language differences can increase passions over immigration.

“Labor is a problem,” said Northey, who notes that even big production agriculture suffers from labor shortages in Iowa.

Soper said he is aware of programs that offer voluntary labor for vegetable production but is reluctant to use them.

“A farming model built on free labor isn’t a good model,” Soper said.

Evening markets: wheat crop upgrade sees grains miss rally

images (6)

Evening markets: wheat crop upgrade sees grains miss rally

It might not have looked that way in Chicago, but Wednesday was an upbeat day for risk assets, many commodities included.

With minutes of a Federal Reserve meeting showing broad agreement for measures to ease monetary policy, and Slovakia deemed set in the end to get to the "right" answer on the eurozone bail-out fund, sharesgained. Wall Street stocks stood 1.7% higher in late deals.

The Vix volatility index, the so-called "gauge of fear", fell below 30 for the first time since August, and the safe haven of the dollar fell 0.9%, so further improving the appeal to foreign buyers of dollar-denominated assets such as raw materials.

‘Chartists’ attention’

Copper rallied 3.3%, boosted by signs of Chinese buying too, and many soft commodities ended sporting a plus sign, led by coffee, which added 2.7% to 229.45 cents a pound in New York for December delivery.

Investors appeared in tune with a warning from the International Coffee Organisation on Tuesday that scope for price falls was "limited".

Softs traders Jurgens Bauer noted that the bean has been "receiving attention from some excellent chartists and respected fundamental traders, several of those had called for the last rally". Positive attention, that is.

Meanwhile, raw sugar for March added 0.3% to 25.93 cents a pound, after trading in both positive and negative territory, as investors awaited further direction, which may come from India, the second-ranked producer.

"The Indian Food Ministry is reported to have announced that it will decide early next month on the quantities it will authorise for exports during the current season which began this month," Nick Penney at Sucden Financial said.

The ministry has pegged domestic sugar output above 26m tonnes, consumption at 22m-23m tonnes, and current stocks at 6m tonnes.

Wasde reaction

However, the biggest action of the day was seen in Chicago, where investors digested the latest monthly Wasde report from the US Department of Agriculture, which – to a large part – strayed from the line of recent briefings in being generally a little tame.

"In comparison to recent history, this was a relatively non-eventful USDA report," Rabobank said.

The estimate for the US corn yield, which had been the focus in the run-up to the briefing, was left unchanged at 148.1 bushels per acre, thesoybean yield only downgraded a touch, to 41.5 bushels per acre.

And while there were some rejigs in the smallprint, US end 2011-12 stocks forecasts ended up more or less where the market had expected – a little more generous in corn, a little less in soybeans.

Bearish, bearish, bearish

The downbeat karma in Chicago was injected by wheat, and ahike of 7.8m tonnes to 202.4m tonnes in the USDA’s estimate for world stocks of the grain, the highest for 10 years, reflecting lower expectations for livestock feeding and upgrades to Australian and Kazakh crops.

That was a "bearish result", according to Rabobank.

Darrell Holaday said: "The real bearish news for wheat was in the world numbers."

Benson Quinn Commodities said: "The report pertaining to wheat was decidedly bearish."

RJ O’Brien said: "Wheat saw the most fundamentally negative revisions this morning."

‘Wheat is in trouble’

Chicago trader Matthew Pierce added his dime’s worth too.

He said: "Wheat is in trouble. There is technical support but funds are short with an appetite to add to those shorts on the rally.

"There is nothing supportive for wheat from the fundamental side, so continue to fade any Chicago wheat rally over corn."

(He turned more upbeat on southern Plains sowings of hard red winter wheat too.

"The better-than-expected weekly precipitation in Kansas, Oklahoma and Texas offers a window to plant with improving conditions. The forecast turns dry again but this is a start.")

Rice on top

Whatever, it looked like investors heeded his advice, selling heavily in Chicago wheat to send the December lot 5.2% lower to $6.26 ¾ a bushel, giving back more than half the gains of the last session.

Indeed, it was enough to lose wheat its recently regained premium over corn too. December corn lost 0.7% to $6.40 ¾ a bushel in Chicago.

Soybeans, graced with the below-forecast US stocks estimate, added 0.1% to $12.39 ½ a bushel.

Even so, it was rough rice, which started strongest in Chicago, which finished best too, up 2.4% to $16.355 a hundredweight, even though the USDA lifted its estimate for output in flooded Thailand by 500,000 tonnes, citing expectations of "bumper" crops on higher ground.

The support was a USDA cut of 4.0m hundredweight, to 186.9m hundredweight, in the US crop, making it the smallest in 13 years.–1307.html?

GRAINS-Wheat & corn futures steady in cautious Asia trade

download (10) SYDNEY, Sept 9 (Reuters) – U.S. wheat futures steadied in early Asian trade on Friday, though remained under pressure from news that big new supplies of the grain were to be offered from India.

Trade was also watchful, after three days of falls and with no big surprises from U.S. President Barack Obama’s announcement of a $447 billion jobs package to help boost the U.S. economy.

Wheat for December delivery were barely changed at $7.38-1/2 per bushel, having slid almost 2 percent in U.S. trade but holding above immediate support around $7.31.

Corn for December delivery inched 0.3 percent higher to $7.36-1/4 a bushel while November soybeans edged 1-1/4 cents lower to $14.17 a bushel.


* Hot and dry August weather in the U.S. Midwest caused soybean crop ratings to deteriorate and should prompt the U.S. Department of Agriculture to trim its forecast of the size of the soy crop by about 0.8 percent, analysts said.

* More than 500 protesting port workers stormed the EGT grain terminal at the Port of Longview, Washington, on Thursday and damaged railcars and other property, Longview Police Chief Jim Duscha said.

* Much of Argentina’s wheat belt is getting dry, with frosts hampering the healthy development of 2011/12 crops in some northern areas, the Buenos Aires Grains Exchange said. 

* The hottest summer in over half a century is shrinking the U.S. corn crop, which will cut the nation’s corn stocks to their smallest in 15 years next summer and boost already high global food prices, analysts said.

* India will allow unrestricted exports of two million tonnes each of wheat and common rice, as bulging stocks offer political room for overseas sales which could depress global rice prices but make little dent in wheat supplies.

* The European Union this week granted export licences for 415,000 tonnes of soft wheat, the biggest award since the start of the 2011/2012 season on July 1, official data showed.


* The euro fell to a two-month low against the dollar on Thursday after the European Central Bank signaled a pause in its interest-rate tightening cycle that began just five months ago.

* U.S. stocks closed sharply lower on Thursday after Federal Reserve Chairman Ben Bernanke gave no indications of new stimulus measures to boost the flagging economy.

* Crude oil futures fell in choppy trading on Thursday, following Wall Street lower after the U.S. Federal Reserve Chief gave a speech that lacked new steps to spur economic growth, and as the dollar rose sharply.

Grains prices at 2343 GMT Contract Last Change Pct chg Two-day chg MA 30 RSI CBOT wheat 738.25 0.25 +0.03% -1.76% 749.22 38 CBOT corn 735.75 1.75 +0.24% -1.64% 726.88 45 CBOT soy 1416.75 -1.50 -0.11% -0.28% 1381.35 49 CBOT rice $17.79 -$0.05 -0.25% -2.01% $17.29 59 WTI crude $88.49 -$0.56 -0.63% -0.95% $85.83 55 Currencies

Euro/dlr $1.390 $0.002 +0.16% -1.35%

USD/AUD 1.060 0.002 +0.21% -0.57%

Most active contracts Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight RSI 14, exponential

(Reporting by Mark Bendeich)

Evening markets: US harvest, India exports weigh on grains

download Consumers had the rub of the cloth in grain markets on Thursday, although with a key US report due next week, traders were reluctant to mark down prices too far.

One factor in buyers’ favour was India’s return to wheat exports, with the country permitting 2m tonnes of shipments from its huge supplies. (Although it will be interesting to see what price the grain might be offered, given high prices the government has been paying.)

Another was a growing appreciation of the pressure from US harvest, giving supplies their seasonal fillip.

"The reality is that no matter what the size of the corn crop is in the US, this is the time of year when we are on the cusp of a the largest supply of the year," Darrell Holaday at Country Futures said.

"Commercial users are not interested in panicking at these price levels and price a large amount of corn out in front."

‘Flooding the pipeline’

Indeed, whatever continued dry weather might mean as a threat forsoybean yields, it is at least a held to growers getting what crops they have in.

"The lack of moisture across the central part of the US speeds up harvest which adds to the bearish momentum seen in basis," Matthew Pierce at PitGuru said.

"There is nothing to stop corn and soybeans from flooding the pipeline over the next week with no rain expected in major production states for the next 14-17 days."

Benson Quinn Commodities noted that conditions for the wheat harvest are good too.

"Expect small grains harvest to proceed nicely in the northern plains and Canadian prairies as weather forecast remain rather benign with few possibilities of showers and plenty of sunshine," the broker said.

‘Take risk off the table’

As an extra pressure to prices, what rain there will be looks set for the likes of Kansas, Ohio and Oklahoma, which have been pleading for precipitation ahead of winter wheat sowings.

"The weather does look wetter for the southern Plains and Mississippi Delta after September 15," US Commodities said.

Factor in a stronger dollar, after European Central Bank president Jean-Claude Trichet flagged threats to the eurozone economy, soft oil, and weaker Wall Street stocks, and it was barely a surprise that agricultural commodities found the going tough.

"The overall feeling heading into the end of the week is ‘take it [risk] off the table’," Mr Pierce said.

"Risk is a taboo word, so look for pressure to continue as technicals and weakening basis weigh on bulls. Bulls will win in the end but just not today or for the next few sessions."

Prices fall

Still, investors were reluctant to let prices fall too far ahead of the US Department of Agriculture’s Wasde crop report on Monday which, in potentially revising the US corn yield, is expected to be a particularly influential one.

"With all the talk of a sub-150-bushels-an-acre yield coming from the USDA…" Mr Pierce noted.

Corn closed lower, down 1.9% at $7.34 a bushel for December, but a little above its intraday low.

Ditto for wheat, which ended down 1.8% at $7.34 a bushel in Chicago for December delivery, and down 2.0% at $9.08 ¼ a bushel in Minneapolis, where the favourable spring wheat harvesting conditions stung hardest.

Soybeans nearly scrambled back to positive territory, given some support from dry weather, which is less than ideal for the crop, as well as unwinding of long corn, short soybean spreads. (Funds sold 13,000 corn lots on the day.) Chicago’s November soybean contract lost 0.2% to $14.18 ¼ a bushel.

‘Cash flow problems’

Among soft commodities, prices were broadly firmer again, continuing the hard softs, soft hards theme of Wednesday.

(The exception was cocoa, which tumbled 1.5% to $2,911 a tonne in New York for December delivery, sunk by growing confidence in supplies.)

New York raw sugar added 1.1% to 28.73 cents a pound for October, helped by continued fears for output from Brazil, the top producer and exporter of the sweetener.

"There is now a stark realisation in the market that more investment is needed in Brazil’s sugar sector if it is to continue to support global sugar demand," Abah Ofon at Standard Chartered said.

"We have been told that cash flow problems at several of Brazil’s mills have constrained some necessary upgrades.

"The sugar market must incentivise further output – via plantings and investments – to bolster still-anaemic global inventories."

Strong fibre

And cotton managed another upbeat close too, helped by continued concerns for storm damage to US crops, and flooding in Pakistan, besides chart points being crossed which have lured trade buyers into purchases.

"Sure fundamentals may have played a role as fears of damage to the crop condition due to weather, with heavy rains on top of the already drought stricken situation, along with a recent improvement in exports," Jurgens Bauer at PitGuru said.

"Supply concerns are growing. But protection among users may help fuel an already speculative sensitive situation, as Wednesday’s breakout on the upside will attest."–1258.html?

Rain dampens hopes for UK grains harvest

tải xuống (13) Rain has dampened optimism over the UK grains harvest, prompting farmers to harvest crops even consisting one-quarter of water, to avoid a late deterioration becoming evident in test results.

"Frequent and often heavy rain showers" slowed harvesting to less than half the typical pace in the last week, with Scottish farmers now behind average pace in reaping spring barley.

The slowdown came despite growers choosing to gather in crops at up to 25% moisture levels and protect returns boosted by prices at historically high levels.

"The majority of the grain harvested over the last week was harvested at high moistures in the gaps between showers," consultancy Adas, which undertook the harvest survey, said, noting that temperatures were two degrees Celsius below average too.

"As a result, 80-90% of the grain harvested has required at least some drying."

‘Quality starting to drop’

However, the spec of grain has deteriorated despite farmers’ efforts, with Adas flagging "signs that quality of any remaining milling wheat is starting to drop".

"Milling crops usually get priority at harvest, but where harvesting has been delayed there are reports of deteriorating in Hagberg falling number to below the acceptable standard."

The Hagberg falling number is one of the measures of a wheat sample’s suitability for making dough.

In spring barley, Adas edged its yield forecast lower to 5.0-5.3 tonnes per hectare, from 5.1-5.3 tonnes per hectare.

For oats, which had looked set for a bumper yield of up to 6.2 tonnes per hectare, matching a 2003 high, the estimate was cut back to 5.7 tonnes per hectare, in line with the long-term average.

However, Adas restated its optimism over winter-sown oilseed rape – the great majority of the UK crop – for which the yield estimate was lifted by 0.2 tonnes per hectare to 3.8-3.9 tonnes per hectare, on track to set a record by a distance despite the dry spring.

"Winter oilseed rape yields have been particularly good, with most crops exceeding expectations."

Adas vs ODA

The findings are comparable with those released on Wednesday by Offre & Demande Agricole, which forecast a rise of 10.5% in UK rapeseed production this year, implying an extra 230,000 tonnes or so.

For wheat, ODA estimated the yield falling 3.4%, implying a figure of about 7.5%, within the range of Adas forecasts, although the French-based consultancy, which is expanding in the UK, was more upbeat on barley yields.

For spring barley, "the grading percentage for malting is close to 90%," ODA added.

London wheat for November stood at £173.00 a tonne on Thursday morning, down 1.0% on the day but well above levels below £100 a tonne before the grains rally kicked off in late June last year–3548.html

U.S. grains tread water ahead of crop report, Fed speech

tải xuống

(Reuters) – U.S. grain and soybean futures edged lower in early Asian trading on Friday as traders took to the sidelines waiting for a key report on the state of U.S. crops following a crop tour and a key Federal Reserve speech on the U.S. economy.

Private firm Pro Farmer will release a national corn production estimate later on Friday and will also report on the condition of soybean crops, while fears are mounting that drought will impact on U.S. winter wheat plantings.

Traders were also reluctant to take positions ahead of a key speech by U.S. Federal Reserve chairman Ben Bernanke later on Friday.

The dollar rose as investors shied away from risky trades amid speculation that Bernanke will not hint at new plans to stimulate the U.S. economy at the annual central bankers meeting later on Friday at Jackson Hole, Wyoming.

The dollar’s rise pushed prices down across the commodities complex.

Chicago Board of Trade wheat for December delivery, the most active contract, fell 0.48 percent to $7.84 per bushel in early trade. U.S. wheat rose on Thursday led by a near 2 percent jump in Kansas City hard red winter milling wheat as drought posed a threat to seedings of the 2012 crop.

New crop corn for December delivery dropped 0.1 percent to $7.42- per bushel after rising 0.7 percent on Thursday as concerns about lower yields from the U.S. 2011/12 crop continued to weigh on the market.

New crop soybeans for November delivery dropped 0.10 percent to $13.91- per bushel. On Thursday, the contract closed slightly lower on profit-taking after the market hit a one-month high this week and on selling due to a firmer dollar.


* High temperatures baking the southern United States are amplifying the effects of the historic drought in the region and forecasts offer little hope for immediate relief as farmers prepare to plant the 2011/12 hard red winter crop.

* Crop scouts on the western leg of Mid-West field tour reported on Thursday that late plantings had hurt production prospects for corn and soybeans in south-western Minnesota.

* Scouts in the east said corn yields in south-east and east-central Iowa were better than average but soy yield potential was variable.

* Egypt, the world’s largest wheat importer, has bought 300,000 tonnes of Russian and Romanian wheat for two shipments on October 21-31 and November 1-10 on a free on board basis, the main government wheat buyer said on Thursday.

* The International Grains Council (IGC) on Thursday raised its estimate of 2011/12 global wheat production by 3 million tonnes to 677 million tonnes.

* The IGC expected wheat stocks to be barely changed at 191 million tonnes at the end of the 2011/12 season versus 192 million a year earlier.

* The organization said a substantial recovery in Black Sea region supplies will result in a major shift back to this origin, especially for wheat.


* The dollar rose on Thursday and stocks slumped as investors shied away from risky trades amid speculation that Federal Reserve chief Ben Bernanke will not hint at new plans to stimulate the economy this week.

* U.S. light crude futures for October were lower early on Friday at around $84.93 per barrel as the dollar rose, reversing gains on Thursday when the market kept a close watch on powerful Hurricane Irene, which threatened U.S. east coast refineries. On Thursday the October contract rose 14 cents to $85.30 per barrel.

* U.S. stocks fell on Thursday as investors raised cash ahead of a critical speech from Fed Chairman Ben Bernanke, hoping he will give them a clearer picture of the Fed’s plans for the struggling economy. The Dow Jones industrial average .DJI dropped 170.89 points, or 1.51 percent, to 11,149.82.

Black Earth yields raise doubts over Russia grains

tải xuống (4)

Black Earth Farming heightened doubts over rosy expectations for Russia’s grain harvest by revealing "disappointing" yields, after dry weather which, for much of the season, "was tracking the drought conditions seen last year".

Shares in the farm operator, which has a landbank of 326,000 hectares, an area bigger than Luxembourg or most English counties, tumbled 8%.

Black Earth said that its yield of summer-harvested crops had fallen "below targets", recovering only some ground surrendered to last year’s drought.

For winter wheat, the company’s biggest crop, the yield has, with most of the area harvested, come in 19% higher year on year at 2.5 tonnes per hectare.

However, the figure was below the Russian average of 2.8 tonnes per hectare so far, besides falling short of the group’s pre-drought, 2009 result of 2.5 tonnes per hectare.

For spring wheat and spring barley too, Black Earth’s results from early harvest have come in below 2009 levels.

‘Virtually no rain’

"The results to date are of course disappointing," Richard Warbuton, the Black Earth chief executive, said.

Black Earth crop results, per hectare, in 2011, 2010 and (2009)

Winter wheat: 2.5 tonnes, 1.9 tonnes, (3.5 tonnes)

Spring wheat: 2.0 tonnes, 1.4 tonnes, (2.3 tonnes)

Spring barley: 2.1 tonnes, 1.4 tonnes, (3.0 tonnes)

Data after harvesting of 89% of winter wheat area, 17% of spring wheat area, and 66% of spring barley area

Mr Warburton, who took the helm in an unexpected reshuffle two months ago, attributed the results to dry weather in the region, with most of its crops receiving "virtually no rain from mid-may to late June, and in some regions, mid-July".

The group, which cut its estimate for winter wheat harvest by 3,000 hectares, said that "average cumulative rainfall was tracking the drought conditions seen last year up until the end of June", affecting a "sensitive" stage of barley and wheat development.

It also highlighted some company specific yield "constraints", in areas such as soil acidity and compaction and weed management, revealed by an agronomic audit.

‘Yields are declining’

The comments come amid mounting doubts over upbeat estimates for the Russian grain harvest which some analysts have forecast rebounding as high as 95m tonnes from last year’s drought-hit result of 61m tonnes.

SovEcon, the Moscow-based analysis group, on Wednesday trimmed its forecast for a second time in 10 days, this time to 87m-88m tonnes, from 87m-90m tonnes.

"As the harvesting campaign moves to the Urals and Siberia, the yields are declining and average yields may prove to be close to those in 2009," Andrey Sizov, the SovEcon managing director, told a conference in Moscow.

"Estimates of above 90m tonnes are overoptimistic."

Profits slip

Black Earth revealed its harvest results as it unveiled a 64% slide to $543,000 in earnings for the April-to-June quarter.

Revenues rose 26% to $8.14m, with higher prices making up for a 31% fall to 42,700 tonnes in crop sold. The remaining 65,000 tonnes of inventory, as of the end of June, has been "sold and moving out", Mr Warburton said.

Black Earth shares closed down 7.8% to SKr20.20 in Stockholm.–3520.html?

Grains close sharply higher

tải xuống (2) CHICAGO, Illinois (–With plenty of support from falling crop ratings, talk of an upcoming ‘heat’ dome and favorable outside markets, the CME Group grain and soybean markets closed sharply higher Tuesday.

The Dec. corn futures closed 9 cents higher at $7.43 1/2. The Nov. soybean contract settled 12 cents higher at $13.97 1/4. The Dec. wheat futures finished 18 1/2 cents higher at $7.84 1/2. The Dec. soyoil futures ended $0.03 higher at $56.21. The Dec. soymeal futures settled $5.80 per short ton higher at $375.50.

In the outside markets, the NYMEX crude oil is $1.27 per barrel higher, the dollar is lower and the Dow Jones Industrials are up 275 points.

The stock market has surged since the earthquake in Virginia.

Tim Hannagan, senior grain analyst, says the markets showed signs of giving up opening strength, but instead bounced back. "Well, the higher corn open gave way to a drop on the day’s high. Soybeans and wheat drooped off their highs as well. But, last night’s bullish crop condition reports and stronger outside markets pulled us back up. A more measurable correction won’t occur until we see that big down day in crude and stocks which always pops up," Hannagan says.

Meanwhile, responding to a price call request, Hannagan says higher price levels are foreseen. "Of course, we will see an 8 in front of corn and 14 beans. But, corn will wait for the Sept. USDA Report."

There is talk of a heat dome entering back into the Midwest during the Labor Day weekend, Hannagan says.

Regarding the wheat market, the Funds continue to sweat over the heat in the U.S. Southwest winter wheat states threatening planting season in September. "Trend following funds have gone from short 54 thousand contracts three weeks ago to 45 thousand this week. Should they continue to buy back the remaining 45 thousand contracts could pull wheat up to 8.75," Hannagan says.

It’s the last full week of trading for August. "Funds are fat with long profits and due to go to the bank as they always do. With this in mind, traders are cautious about getting too bullish."

Grains a better bet than soft commodities – BarCap

tải xuống (3) Futures in grains, supported by tight corn supplies, are a better bet than soft commodities, of which only cocoa looks set for price rises, Barclays Capital said, in a report forecasting a "bumpy ride" for raw materials.

The outlook for commodity investors "is more challenging than it has been some time", with volatility set to prove "considerably greater" as the market factors in heightened concerns for the world economy at a time of relatively tight raw material supplies, the investment bank said.

Investors should expect "greater dynamism" in spreads between contracts for near-term delivery and further-ahead lots, and "a broader range of performance both within and between commodity sectors".

However, corn looked set to emerge as one of the best performers, backed by summer downgrades to the US crop, the world’s biggest, which "will keep the market nervous and propel prices higher".

‘Decisive effect’

"We remain bullish on [corn] prices through the second half of 2011 and into early 2012," BarCap said, while adding that "a further contraction in US supply" will be needed to return futures to their record levels near $8 a bushel reached in June.

In fact, the bank highlighted that buyers would seek to substitute corn for lower-priced wheat – supporting "modest upside" for wheat prices despite relatively abundant world supplies.

"Substitution on the demand, especially for feed use, and supply sides, in terms of acreage allocation, will mean the trajectory of corn prices will have a decisive effect on how wheat prices trade."

Soybean future also looked set to rise, presenting a "firmer price profile" in the second half of the year than the first, boosted by official downgrades to the US crop, also the world’s biggest, and purchases by China, whose imports look set to revive now crushers margins’ are positive again.

"[China’s] structural reliance on imports in light of constrained land and spiralling consumption… have made imports a necessity rather than a choice," BarCap said.

Cocoa vs coffee

The upbeat forecasts for Chicago crops contrasted with the bank’s outlook for New York-traded soft commodities, many of which face battles against looser supplies.

Cocoa, trading at $2,961 a tonne for New York’s spot September contract on Tuesday, looked to "edge up to" $3,000 a tonne by early 2012, backed by a production decline as weather in Ivory Coast and Ghana, the top producers, returns to "less than ideal" conditions, following a benign 2010-11.

"Further, while near-term supply risk from the Ivory Coast has eased, longer-term supply growth and structural issues remain a concern on ageing trees and low yields."

However, in coffee, a production surplus of 1m bags "should weigh on prices" in the fourth quarter of 2011 and in 2012.

"Production prospects in 2012-13 look favourable and are likely to pressure prices further as the market moves into a larger surplus," BarCap said.

‘Rosy production prospects’

Sugar futures, while supported for now by downgrades to Brazilian output, also look set to decline in the fourth quarter and into 2012, as supplies from India and Thailand come on line.

India, the second-ranked sugar provider, has "rosy production prospects", thanks to improved Monsoon rains and a expanded sowings encouraged by high prices.

And cotton futures will display "an increasing inability" to hold the 100 cents a pound level as the impacts of increasing world production, and growing competition from synthetic fibres, feed through.—barcap–3488.html

Russia grains optimism wanes, as German fears rise

tải xuống (3) The revived optimism over European and Black Sea grains production hit turbulence on Monday with trims to hopes for crops both in Germany and Russia.

SovEcon took a Russian crop of much above 90m tonnes off the agenda, after results showing a decline in yields as the harvest has headed north and east.

While yields are typically higher in south western areas, the fall this time has been marked. The harvest’s average yield dropped below 3 tonnes per hectare as of last Thursday, with roughly one-third of the crop in silos, from 3.3 tonnes per hectare a week before, official data show.

"As the harvesting area is some 4m hectares down from 2009, and average yields are expected to be in the region of two tonnes per hectare, the crop is likely to decline by around 8m tonnes from the 97 million tonnes reaped in 2009," Moscow-based SovEcon said.

The influential analysis group revised its harvest estimate to 87m-90m tonnes, from 87m-92m tonnes, bringing its forecast in line with the government forecast but below the 91m-91m tonnes expected by rival consultancy Ikar.

‘Delayed by rains’

Separately, in Germany, the European Union’s second-largest grains producer, the farm co-operatives association cut its estimate for production of all crops by 900,000 tonnes to 40.3m tonnes, highlighting weaker prospects for wheat and rapeseed harvests.

Hopes for wheat, for which an unusually dry spring has been dogged with a dismally wet harvest period, the output estimate was cut by 800,000 tonnes to 22.0m tonnes.

The figure compares with the 24.05m tonnes of wheat harvested last year. The US Department of Agriculture last week kept its estimate of this year’s output at 22.2m tonnes, while noting that harvest had been "delayed by persistent rains".

On Friday, a report from the UK grain arm of a major European commodities house noted that "it hasn’t stopped raining [in Germany] for several weeks and 80% of the crop in the north is still in the field".

Germany’s farm co-operatives association also cut its estimate for the domestic rapeseed crop by 300,000 tonnes to 4.0m tonnes, below the 4.3m-tonne-forecast from the USDA, which blamed the crop’s declining potential on a "poor start" in the autumn leaving it more susceptible to setbacks from a cold winter and dry spring.

Better week ahead?

The association’s downgrades came even as hopes grew of better German harvest weather, following the rain delays which have sparked concerns in particular about the quality of a wheat crop which is typically nearly all of milling quality.

"A break in rains forecast for Germany early-to-mid week should offer producers opportunity to advance harvest there," Jaime Nolan at FCStone’s Dublin office said.

Strategie Grains, the Paris-based analysis group, still expects 82% of the crop to be of milling quality despite the poor weather. Rains encourage sprouting, and the production of enzymes which beak down starch and gluten content.

This figure is up from 43% last year, when rain also dogged the harvest, if below earlier hopes.

Monday’s crop revisions follow a series of, generally positive, revisions for Black Sea and European grain crops over the last couple of months.

The USDA last week raised its estimate for the Russian wheat harvest by 3.0m tonnes to 56.0m tonnes, and of the EU one by 1.4m tonnes to 133.5m tonnes.–3477.html