Corn & Seed/Oil Commodities

[mikey]

GMO corn to be shipped out of Negros


By Carla Gomez
Inquirer Visayas
First Posted 23:30:00 04/08/2009

Filed Under: Regional authorities, Genetic engineering, Agriculture, Food


BACOLOD CITY – Bounty Agro Ventures, the consignee of the genetically modified (GM) corn shipment, agreed to ship it out of Negros Occidental, Gov. Isidro Zayco said on Tuesday.

However, National Federation of Hog Farmers president Albert Lim warned that Negros Occidental would face a shortage in corn for processing into animal feeds if the seized corn was shipped out.

The provincial government on Saturday seized the yellow corn shipment, worth P18.978 million, found to be genetically modified and kept at the consignee’s warehouse at the Bacolod Real Estate Development Corp. (Bredco) port in Bacolod City.

Zayco said Dante Samonte, Bounty Agro Ventures feed milling operations chief for Visayas and Mindanao who represented the company in a dialog with provincial officials, agreed to ship the 15,746 bags of corn out to comply with a ban on the entry of GMO plants and animals into Negros Occidental.

“I think they agree that the corn they shipped in has GMO because they were the ones who offered to ship it out,” Zayco said.

Samonte, who maintained that the company did not know that the corn shipment was genetically modified, said they would ship the corn out on Monday, probably to Cebu or Iloilo.

He said Negros has a corn shortage so Bounty Agro Ventures had to get its corn requirement for chicken feed from different sources.

He said the company promised that the shipment of GMO corn would not happen again.

Lim said Bounty Agro Ventures would have difficulty replacing the GMO corn that it would be shipping out.

Lim said he learned from company owners that they would slowly pull out their operations from the province if they could not get sufficient corn for their feeds.

If this occurred, Lim warned that the province would have a shortage of poultry.

“We want the corn to stay but the governor said there is a law and we have to follow the law. How sure can we be that processed feeds coming into the province do not use GMO corn?” Lim said

[mikey]

Philippine poultry raisers to turn to Asean for corn
[10 April 2009] Some Philippine poultry producers are looking at Asean countries as possible corn sources under the Asean Free Trade Area (AFTA). United Broiler Raisers Association Chairman Gregorio San Diego said that under the AFTA, corn imports from member nations are levied a 30% tariff, which is lower than the 35% tariff duty on corn imported under the minimum access volume (MAV) scheme under the World Trade Organisation. Mr San Diego said they are exploring the possibility because importing under the AFTA not only means lower tariff, but they would no longer need to ask the government's permission to bring in the corn. With the AFTA scheduled to go into full steam in 2010, he added that tariffs for corn could fall even further making corn trading between and among Asean nations cheaper.

[mikey]

Pest hoppers threaten Philippine corn
[14 April 2009] The Philippine corn industry is facing a pest infestation that could lead to lower corn production, a report by Bloomberg said. Citing Roger Navarro, President of the Philippine Maize Federation Inc (Philmaize), the report said that plant hoppers from Indonesia have spread to corn growing areas in Mindanao, which contributes a fifth of the country's total corn production. Mr Navarro said that while it is too early to see how much damage the pest has wrought, “in some areas crops have died and in others the weight of the corn has dropped.” While lower corn production may help support domestic prices during lean periods, “if the pest spreads when demand for feeds was still strong, that would have caused a spike in corn prices,” added Mr Navarro.

[mikey]

6 May 2009] Filipino feed millers plan to issue a tender to buy 45,000 tonnes of soybean meal for June shipments. Traders said the tender will open next week. The price of Indian soybean meal including cost and freight to South East Asia being quoted at USD 500/tonne, while the price of South American soybean meal is expected to be lower at USD 470/tonne.

[mikey]

Weekly Outlook: Lots of Uncertainty in Crop Markets
US - The USDA’s June projections confirmed prospects for extremely small year-ending US stocks of soybeans, writes Darrel Good, Extension Economist at the University of Illinois.



Those stocks are projected at 110 million bushels, or 3.6 per cent of projected annual consumption. In addition, the Census Bureau estimate of soybean exports for April that were released last week shows exports continuing above the pace reported by USDA.

For the first 8 months of the marketing year, the Census Bureau reports soybean exports of 1.058 billion bushels, 34 million above the cumulative total of export inspections reported by USDA. Assuming that margin persists, as it did last year and in 3 of the past 4 years, exports need to average 10.2 million bushels per week during the final 11.5 weeks of the year to reach the USDA projection of 1.25 billion bushels. Inspections averaged 10.4 million for the three weeks ended 11 May.

On the domestic side, the National Oilseed Processors Association reported a crush of 142.2 million bushels during May. That level of crush is about 5 million larger than anticipated. The Census Bureau will release official crush statistics for May on 25 June, but it now appears that the crush for the year is on pace to exceed the USDA projection of 1.65 billion bushels. It is unlikely, however, that year ending stocks can be reduced much below the current USDA projection.

Even with the pace of consumption remaining relatively large, soybean prices declined sharply in the past few trading sessions. After reaching a high of first over $12.90, July futures declined to the $12.20 area in on 15 June. Basis levels also weakened in many areas last week. After reaching about $.15 over July futures two weeks ago, the average spot cash price in central Illinois was $.02 under July futures on 12 June. Recent price and basis behavior suggests that sufficient rationing of old crop soybeans has occurred. Such rationing, however, is not yet apparent in publicly available data.

Corn prices came under similar pressure in recent trading sessions. July 2009 and December 2009 futures declined about $.40 from the high reached early last week. Basis levels, however, remained generally firm, with the average cash bid in central Illinois at about $.15 under July futures on 12 June. Prospects continue for adequate year ending stocks of corn, but the USDA reduced the projection of stocks at the end of the 2009-10 marketing year by 55 million bushels. Those stocks are projected at 1.09 billion bushels, or 8.7 per cent of projected use. Compared to the May projection, USDA lowered the anticipated US average yield for the 2009 crop by 2 bushels, to 153.4 bushels. Partially offsetting that decline was a reduction of 100 million bushels in the projection of feed and residual use of corn during the year ahead.

The very recent decline in corn and soybean prices appears to be in sympathy with a stronger US dollar, some moderation in energy prices following the recent rally, and a weaker stock market. In addition, the market seems to be more comfortable with production prospects for the 2009 corn and soybean crops. Some much needed rainfall in the western corn belt has offset ongoing concerns about the late planted crops in the east. In addition, the coming warm up in the western corn belt is generally viewed as positive for crop development.

The potential size of the 2009 corn and soybean crops is far farm clear at this time. The most important part of the growing season is still to come. While the short term outlook for warmer weather is viewed as positive, an extended warm, dry period into July, as hinted to by some, would not be favorable. There is also lingering uncertainty about the magnitude of planted acreage of corn and soybeans. The USDA’s 30 June Acreage report will shed further light on that issue.

All of the ingredients for volatile corn and soybean prices appear to be in place. These include tight stocks; fluctuating financial, currency, and energy markets; and large production uncertainty. Some uncertainty will be reduced over the next two months with the release of the USDA’s 1 June Acreage and Grain Stocks reports on June 30 and the unfolding of growing season weather. Fluctuations in the so called outside markets, however, could continue for an extended period. Further shocks could be provided by developments in bio-energy and climate change policy.

Marketing the 2009 corn and soybean crops will be challenging, but opportunities to sell at more attractive prices will likely be available periodically over the next 12 months.

[mikey]

Philippines to scrap zero tariff on feed wheat 22 Jun 2009
A government panel In Philippine capital Manila has recommended restoring a 7% tariff on feed wheat imports to protect local corn farmers, a senior official said.
Related.
The government had cut the import tariff on feed wheat to zero for six months starting January to aid feed millers hit by high local corn prices.
 
"The prevailing sentiment is to develop and protect Philippine agriculture," said Thomas Aquino, trade undersecretary and co-chairman of the technical committee on tariff issues.
 
The local feed industry has imported more than 1.1 million tonnes of feed wheat this year, scheduled for delivery until August, as it recovers from higher raw material costs and animal disease last year.
 
That compares to just 112,000 tonnes in all of 2008 when surging prices turned off buyers.
 
The government scrapped the 7% import duty on feed wheat and 3% tariff on food wheat purchases for six months from January to keep bread prices low and aid millers. The zero tariff expired on June 21.
 
But Aquino said the panel recommended maintaining the zero tariff on food wheat imports until December to ensure prices of bread remain low.
 
The recommendations will be submitted for approval by economic managers and later to President Gloria Macapagal Arroyo when she returns from an overseas trip.
 
A group of feed millers is planning to appeal against the potential removal of the zero tariff on feed wheat imports.

[mikey]

29 June 2009] Philippine corn farmers are calling on the government to build the necessary infrastructure such as postharvest facilities to allow them to fully participate in corn trading. Philippine Maize Federation (Philmaize) President Roger Navarro said that while the government’s plan to trade in corn is laudable, farmers will have a hard time ensuring the quality of corn without the postharvest facilities such as silos and dryers. He said he hopes that the government will consider buying more corn from farmers during the main harvest season starting in August, and estimated the yield to be around three million tonnes. Mr Navarro also lauded the recommendation to scrap the duty-free importation of feed wheat, saying this will motivate local corn farmers to plant more and expand their crop area.

[mikey]

Philippines halts grain imports 
[6 July 2009] The Philippines has imported sufficient grains for use in livestock production for the whole year consisting of 1.1 tonnes of feed wheat and 565,000 tonnes of corn, according to the National Corn Board, a grouping of feedmillers, meat producers, corn planters and traders. It said the next order would be made for January, but feed wheat imports would decline next year due to increasing domestic corn production due to the government’s decision to hike support price and lower fertilizer price. Accroding to the board, shortfall of feed grains in the Philippines would be less than one million tonnes this year.

[mikey]

Weekly Outlook: USDA Projects Ample Crop Supplies
US - The USDA released its monthly report of US and world supply and demand projections for major crops on 10 July. The projections contained a number of changes from those of a month ago, but generally point to abundant crop supplies for the year ahead.



For soybeans, the USDA increased the projection of both the domestic crush and exports during the current year by 10 million bushels. Those increases were offset by an increase in the projection of imports and a smaller projection of residual use of soybeans. Year ending stocks are still projected at 110 million bushels.

The projection of 2008-09 marketing year soybean exports of 1.26 billion bushels could be exceeded. USDA estimates place cumulative marketing year exports through 2 July 2009 at 1.145 billion bushels. Those estimates suggest that weekly shipments through August need to average 13.4 million bushels per week to reach the new projection of 1.26 billion bushels for the year. However, Census Bureau estimates through May 2009 exceed USDA estimates by 35 million bushels. If that margin persists, weekly shipments need to average only 9.3 million per week. If all of the bushels which were sold but not yet shipped as of 2 July actually get exported, exports for the year could be as high as 1.3 billion bushels. Exports at that level point to an unreasonably small year ending inventory of 70 million bushels. The recent drop in old crop soybean prices suggests that the market is not concerned about old crop supplies, even with a late maturing crop. It now appears, however, that some additional rationing of old crop soybean supplies is needed or that the 2008 crop was actually larger than estimated.

For the 2009-10 marketing year, updated USDA projections reflect the larger soybean planted acreage figure released on June 30. With a yield of 42.6 bushels per acre, the 2009 harvest is expected to total 3.26 billion bushels. Stocks on 1 September 2010 are projected at 250 million bushels. The yield projection is slightly higher than our trend calculation of 42.2 bushels. The yield projection based on weather conditions through June and summer weather conditions that reflect an equal chance of the actual weather conditions of each of the last 49 years is also 42.2 bushels. The difference of 0.4 bushels is equal to 30 million bushels. The USDA projects the 2009-10 marketing year average farm price in a range of $8.30 to $10.30. The futures market currently reflects an average cash price for the upcoming year of just under $9.00.

For corn, the USDA lowered the projected domestic use during the current marketing year by 220 million bushels. Feed use and ethanol use projections each declined by 100 million bushels. The projection of 2008-09 marketing year corn exports was increased by 50 million bushels. Cumulative Census Bureau export estimates through May 2009 exceeded USDA projections by about 60 million bushels. Still, the export pace will have to accelerate to reach the projected total. Year ending stocks are now projected at 1.77 billion bushels.

For the 2009-10 marketing year, the projection of corn production was increased by 355 million bushels, reflecting the larger planted acreage estimate released on June 30. Stocks of US corn on 1 September 2010 are projected at 1.55 billion bushels, 468 million more than projected last month, but 220 million less than the projection of stocks at the beginning of the 2009-10 marketing year. The 2009-10 marketing year average farm price of corn is projected in a range of $3.35 to $4.15. The futures market currently reflects an average cash price near $3.25. The current price of corn likely reflects a higher average yield expectation than the 153.4 bushels projected by the USDA. Weather conditions through June and summer weather conditions that reflect equal chances of actual conditions in each of the last 49 years would point to an average yield near 155 bushels. Based on current weather forecasts and crop condition ratings, the market is likely trading an even higher yield expectation.

Changes in the projections for wheat point to larger year ending stocks. The US average yield projection was increased by 0.7 bushels. When applied to the larger acreage revealed on June 30, the yield forecast points to a crop of 2.112 billion bushels, 96 million larger than the June forecast. The marketing year export projection was increased by 25 million bushel and marketing year feed use was increased by 10 million. Still, year ending stocks are projected at an 8 year high of 706 million bushels.

If favorable crop weather continues, some further weakness in crop prices might be expected. The low price of wheat, along with a weak basis and large carry in the futures market, however, suggest retaining some ownership of the newly harvested soft red winter wheat crop. December 2009 corn futures are well below the price guarantee for crop revenue products which discourages additional new crop sales. November 2009 soybean futures are about $.30 above the crop revenue insurance price guarantee.

[mikey]

 Korea to grow corn in the Philippines
[24 July 2009] The South Korean province of South Jeolla has leased a plot of farmland in the Philippines for 25 years to grow 10,000 tonnes of corn a year and is hoping to buy more in its effort to cut costs. Jeonnam Feedstock Ltd, a firm set up by the province has leased about 94,000 hectares of land in the Mindoro Province in the Philippines to grow low-cost grain for feed production, said Lim Young-muk, an official of South Jeolla's provincial government. South Korea, the world’s third largest buyer of corn for food and feed, imported 7.5 million tonnes of corn for feed in 2008. Mr Lim said they plan to start sowing in September this year. 
 
 
 

[mikey]

Weekly Outlook: Corn Prices Looking For Direction
US - Corn prices have settled into a relatively narrow trading range, with December 2009 futures trading between $3.20 and $3.50 per bushel over the past three weeks.

 Chris Hurt
Extension Economist
Purdue University
 

The relatively low price level reflects the anticipation of a large harvest in 2009.

The USDA will release the first survey based corn yield projection on 12 August. That survey will also be used to update estimates of planted acreage of corn and acreage expected to be harvested for grain in 2009. The update of the acreage estimate is motivated by late planting in some states and the possibility that acreage deviated from June intentions. The consensus seems to be for at least a modest reduction in acreage compared to those intentions. Since acreage estimates for soybeans are also updated in August, the report will give some insight into the magnitude of unplanted acreage. Observation suggests that several thousand acres were not planted this spring, but this report will reveal if the total is large enough to alter production expectations of corn or soybeans.

The USDA will also update projections of corn consumption for the current and upcoming marketing years on 12 August. Recent information reveals a mixed bag for corn consumption during the current year. The USDA’s July Cattle on Feed report indicated that the inventory of cattle in feedlots with capacity of 1,000 head or more was 5.3 per cent smaller on 1 July 2009 than on 1 July 2008. The July Cattle report also confirmed some liquidation of both the beef cow and dairy cow inventories and a 2009 calf crop that is expected to be 1.4 per cent smaller than the 2008 calf crop. These smaller numbers all point to some weakness in feed demand for corn for the remainder of the current marketing year and into the 2009-10 marketing year.

US corn exports, on the other hand, have been relatively large in recent weeks. Export inspections for the week ended 23 July, for example, were reported at an unexpectedly large 52.234 million bushels. Census Bureau export estimates through May were about 50 million bushels larger than the cumulative export inspection estimate. If that margin has persisted, exports during the final 5.6 weeks of the 2008-09 marketing year need to average 36 million bushels per week to reach the USDA projection of 1.8 billion bushels.

It is generally expected that the August USDA reports will continue to point towards an ample supply of corn for the 2009-10 marketing year. The state by state yield projections, along with the marketing year average farm price projection, will have important implication for those who are evaluating the Average Crop Revenue Election (ACRE) program. Prospects for a 2009-10 average farm price well below the average for 2007-08 and 2008-09 increases the expectation that ACRE payments could be triggered at the state level in 2009-10, even if state average yields are relatively high. Prospects for a relatively low yield in any state will increase the likelihood that ACRE payments will be triggered. Prospects for a lower price will also increase expectations that farm level payments will be triggered, although prospects for farm level yields will have to be evaluated carefully. Unusually high average farm yields could offset the impact of a lower price.

If a large corn crop does materialize in 2009 and prices remain low through harvest, crop revenue insurance payments may also be triggered, particularly for those producers who experience lower yields. A combination of crop revenue insurance payments and ACRE payments could help offset the financial impact of lower average corn prices during the year ahead. For now, additional sales of 2009 crop corn are not appealing. December futures remain well below the crop revenue insurance guarantee. With the market generally expecting a very large 2009 harvest, additional downside price risk may be minimal for the time being.

[mikey]

6 August 2009] The US Grains Council (USGC) announced that exports of US distiller's dried grains with solubles (DDGS) will hit record levels in 2009. Last year, approximately 8,000 tonnes of US DDGS were imported by China. Cary Sifferath, USGC Director in China said the huge jump in imports would not be possible without the USGC members and programs, adding that sponsoring DDGS workshops in China and bringing teams to the United States to showcase the high quality of US DDGS helped in building a market for US DDGS in China. The council’s Beijing office estimated that 135,000 tonnes have been sold to China for August and September shipments.

[mikey]

The South Korean province of South Jeolla has leased a plot of farmland in the Philippines for 25 years to grow 10,000 tonnes of corn a year and is hoping to buy more in its effort to cut costs. Jeonnam Feedstock Ltd, a firm set up by the province has leased about 94,000 hectares of land in the Mindoro Province in the Philippines to grow low-cost grain for feed production, said Lim Young-muk, an official of South Jeolla's provincial government. South Korea, the world’s third largest buyer of corn for food and feed, imported 7.5 million tonnes of corn for feed in 2008. Mr Lim said they plan to start sowing in September this year.

[mikey]

AFBF: Report Bearish for Corn, Neutral for Soybeans
US - The Agriculture Department is forecasting a record US soybean crop and the second-largest corn crop ever. But thanks to tight global soybean supplies, soybean prices should be under less pressure than corn prices where the huge crop is giving a bearish tone to the market, according to Terry Francl, senior economist with the American Farm Bureau Federation.



USDA yesterday released its first forecast of the fall harvest based on field surveys, which makes it particularly significant for the market as producers begin to set their sights on harvesting and selling their crops, Francl said.

"The overall tenor of the report was bearish for corn and wheat and neutral to slightly supporting to the soybean market," Dr Francl said. "With regard to corn, the old adage ‘that big crops tend to get bigger’ is likely to prevail in the market, unless some unforeseen weather problems develop."

After a difficult spring planting season, growing conditions turned to anywhere from good to excellent.

"The most likely weather issue that might occur would be a freeze that could reduce yield prospects, given the late development of the corn and soybean crops," Dr Francl said. "However, it is at least a month, if not six weeks before that might become a probability."

Because of the huge corn crop, Dr Francl thinks corn prices will remain under pressure going into harvest. But a tight supply and demand balance for soybeans will provide some support to soybean prices, particularly for the next six months, before the South American crop is harvested and ready for export.

[mikey]

17 August 2009] The Philippine Maize Federation Inc is putting up a PHP 250 million (USD 5.23 million) large-scale postharvest facility in Isabela Province, and is calling for more to be established in other parts of the country to help local corn farmers cope with the zero duty on corn and reduced tariffs on commercial feeds beginning next year, a report from the Philippine Daily Inquirer said. The new facility will have a mechanical drying and bulk handling system that can process corn from as much as 30,000 hectares of farmland. The current yield per hectare is about 2.8-2.9 tonnes. Philmaize President Roger Navarro said that one way for the country to cope would be to export, but the local industry cannot do this because of lack of infrastructure. He said there are very few such facilities in the country, including two big ones in Bukidnon Province in Mindanao and another in Luzon, and the local corn industry needs to be more competitive.