Agriculture Commodity Markets & Trends

Transcription

1 Agriculture Commodity Markets & Trends

2 Agenda Short History of Agriculture Commodities US & World Supply and Demand Commodity Prices Continuous Charts What is Contango and Backwardation Barge, Truck and Rail movements Alternative Storage possibilities Importance of US flows to Mexico Price outlook 2

3 Short History of Wheat, Corn, Rice and Beans Wheat Is a grass grown on more land area than any other food crop. World production in reached 753 mio tons. Production has grown due higher yields in past years. Used mostly for Bread, Pasta, Cuscus but also used as a Feed Grain. Main producers: EU , China 130, India 96, Russian Federation 81.0 USA 47.3, Canada 26.5, Pakistan, 26.2, Australia 22.5, Ukraine 25.5, Turkey 18.0 Argentina 17.5 Main exporters: EU-28.5, Russian Federation 32.5, USA 26.5, Canada 20.5, Australia 18.5 Ukraine 16.5 and Argentina 11.5 Main importing countries: Egypt 11.8, Indonesia 8.5, Algeria 8.2, EU 6.5, Brazil 6.2, Japan 5.8, Republic of Korea 5.0, Morocco, 5.0, Philippines 5.0, Turkey 5.0, Bangladesh, 4.7, Mexico 4.6, Nigeria 4.4, Thailand 3.6, Saudi Arabia, China 3.5 and US 3.4 (from Canada). Corn History of corn began around BC in southern Mexico with a domestic wild form of Maize. Main usage is for Feed, Starch, Corn Flour used in Tortillas or Arepas, Corn oil for human consumption and Ethanol.. US production is roughly used as follows: Ethanol 37% Food, Seed and Industrial 48% (of which 10% food+seed) Exports 15% 85% of US market is domestically and only 15% depend on export mainly to neighboring Mexico, 7.5 mio tons, Japan 7.2 mio, Colombia 3.4, South Kora 3.1, Taiwan 2.0, Peru 1.8, Saudi Arabia 1.6, Dominica Republic 0.5, Morocco 0.5 and Guatemala 0.5. Main producers: US 360.3, China 215.0, Brazil 95.0, EU 60.0, Argentina 42.0, Ukraine 27.5, India 25.0 Mexico 26.0 and Russian Federation 47.7 Main exporters: US 47.6, Brazil 34.0, Argentina 28.5, Ukraine 22.0 Russian Federation

4 Rice Rice as a Cereal Grain is most widely consumed as a staple food for a large part of the world, especially in Asia. Rice can be grown in a wide areas and practically anywhere but does need lots of rainfall and very labor-intensive. Reason why most of the production if seen in Asia and certain parts of Africa. Rice is a seed of grass and is the third highest worldwide production after sugarcane and maize. History of it goes as far back as 2,500 BC beginning in China and surrounding areas as well as India and Sri Lanka. Main Rice producers: China mio tons, India 110, Indonesia 37.0, Bangladesh 33.5, Vietnam 28.45, Thailand 20.4, Myanmar 12.5, Philippines 11.2, Brazil 8.0, Japan 7.7, US Exporters: India 11.8 mio tons, Thailand 10.0, Vietnam 6.0, Pakistan 4.1, US 3.5, Myanmar 1.5, and Cambodia 1.0 Imports: China 5.0, Nigeria 2.1, Philippines 1.8, Saudi Arabia 1.4 and Senegal 1.0. Soybean History of Soybean goes as far back as eleventh century BC in China. Main usage has been to process for Oil and Protein for the animal feed industry. Smaller amount is being used for soy milks flour and Tofu. Main producers: USA 120.5mio tons, Brazil 107, Argentina 57.0, China 14.0 and Paraguay 9.40 Exporters: USA 61.2, Brazil 64.0, Argentina 8.0 and Paraguay 5.5 Imports: China 95.0, EU 14.5, Japan 3.3 and Mexico 4.3, EU 1.8, Mexico 0.8, Japan 0.69 and Colombia

5 World Production Wheat India 96 mio, Russia 77.5K, Ukraine 26.5, US 47.3, Australia 23.5 Canada 26.5 and Argentina 17.5 Corn US mio tons, China 215, Brazil 95, Argentina 40, Ukraine 28, Mexico25, India 25, Canada 13.9, Russia 16.5 and South Africa

6 World Production Rice Asia being biggest market China 145 mio tons, India 108, Indonesia 37, Brazil 8 mio and US only 5.92 Soybean Mayor production in US and South America with latter having grown in past years.(brazil 107, Argentina 57, Paraguay 9.4, Bolivia 3.0). 6

7 Situation of US planted area in Grains US Planted Acres in Agriculture Commodities Commodity June 30/17 previous Year ago Diff./ last year Percentage Corn (3.12) -3.32% Sorghum (0.70) % Soybeans % All Wheat (5.14) % Winter Wheat (3.66) % HRW (2.70) % SRW (0.97) % WW % Durum (0.49) % Other Spring (0.71) -6.08% PS: Lowest all wheat planted area on record since 1919! 7

8 US Acres planted / harvested Wheat Corn 8

9 Spring and Durum Acres Other Spring Wheat Durum 9

10 US Production Wheat Corn 10

11 US Acres planted / harvested Rice Soybean 11

12 US Production Rice Soybean 12

13 Commodity Prices 13

14 Commitments of Traders Report (CFTC) 14

15 Carry versus Inverted Market - Carry futures Market Cost of carrying the grain (storage + Interest) reflected in price. Nearby price is cheapest compared the deferred months. Jan Mch May July Sep Dec Inverted futures Market Nearby prices are at a premium the deferred. More demand / squeeze from prompt shipment. Ample supply or new crop on deferred positions. Jan Mch May July Sep Dec

16 Movements by Barge, Truck and Rail, Container, Ocean-Freight 16

17 Cheap Storage Alternative Silo Bag loading and field storage Silo Bag loading operation 17

18 Barge and Rail Network 18

19 NAFTA with Mexico Agricultural imports to Mexico depend heavily on US commodities Total Imports from US Corn Sorghum Wheat DDGS Rice Beans Soybean Meal Veg-Oil

20 Overall Trade Stats with US Biggest Trade Partners with US US Agriculture Exports to Mexico 20

21 Continuous Chicago Wheat Chart 21

22 Continuous Corn Chart 22

23 Continuous Soybean Chart 23

24 Continuous Rice Chart 24

25 Baltic Dry Index 25

26 Price Outlook in Agriculture Commodities Strong US Dollar has had a negative impact on Commodity prices in the past years but things are changing. US lost ground against the major currencies in value since the April this year. Increased overall yields due more use of fertilizer and improvement in seeds as been another bearish factor. Increased South American participation in Soybeans and Corn and Wheat from the Black Sea region have helped to increase World Production whereas demand remained stagnant. Weather has been rough in Southern Europe (extremely hot temperature) and similar situation in Northern US impacting mainly the Spring Wheat. Farmers shift crops less Wheat more Oilseeds (Beans) + Corn. (This especially from South America. We are at historically low prices but longer term trend in Wheat looks as though has been broken to the upside. Rice has recuperated quite a bit from lows a trend has been friendly. Corn + Beans remain bearish. Expected Price Range in coming 6-8months Wheat WH Consider lows are in present prices and $ drawing last Fibonacci from recent highs. Corn CH Should get some South American Weather $ impact sooner or later. Lows consider are in present price levels. Beans SH Might see some more US harvest pressure. $ Then possible South American Weather impact like on Corn. Rice RRH Short term over-bought but all depends on $ New Crop Asia. Demand keeps rising. 26

27 For any further information and in case you would like a copy of the presentation please let me know by . Christoph Bigler Trading Grains Director Bunge Mexico Christoph.Bigler@Bunge.com =