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Posts Tagged ‘markets’

MarketView June 6, 2013

Statistics Canada released the Farm Product Price Index for March 2013 yesterday:

What is the Farm Product Price Index (FPPI)? Here is the explanation provided by Stats Canada:
The Farm Product Price Index (FPPI) measures the changes in prices that farmers receive for the agriculture commodities they produce and sell. Commodities are priced at point of first transaction, where the fees deducted before a producer is paid are excluded, but bonuses and premiums that can be attributed to specific commodities are included.
The price index has separate crop and livestock indexes, a variety of commodity-group indexes such as cereals, oilseeds, specialty crops, cattle and hogs and an overall index – all available monthly and annually for the provinces and for Canada.
The FPPI is an important indicator of the economic activity in the agriculture sector. Agriculture economists and analysts interested in the health of the agriculture sector, deflating agricultural commodity prices and policy development, use the series.
The information provided by FPPI is useful to producers, producer groups, commodity analysts from the private sector such as grain companies and meat processors, international exporters, the banking sector and government agencies responsible for agriculture policies. The index compares, in percentage terms, current farm prices to prices in the time base period, 2007=100.

Statistics Canada reported the March 2013 FPPI as follows:
The Farm Product Price Index (FPPI) rose 2.4% in March compared with March 2012, as an increase in the crops index more than offset the decrease in the overall livestock and animal products index.
The FPPI, driven mainly by rising crop prices, has observed year-over-year increases since August 2010. Double digit increases were recorded up to January 2012; since that time, the rate of growth in the FPPI has slowed.
The crops index rose 6.8% in March compared with March 2012, largely as a result of the higher oilseeds index (+11.8%), which continued a growth trend that started in September 2010.
Declines in the hogs index (-10.5%) and the cattle and calves index (-4.4%) were responsible for the decrease in the livestock and animal products index.
The FPPI was 128.9 for March 2013 compared to 125.9 in March 2012. This means compared to the base period of 2007 that overall prices were 28.9 % better in March 2013.
The crops FPPI was 133.6 and the livestock and animal products FPPI was 124.3 in March 2013 compared to 125.1 and 127.3, respectively in March 2012.
Check the full report at http://www.statcan.gc.ca/daily-quotidien/130605/dq130605b-eng.htm

Disclaimer: This commentary is provided for information only and is not intended as advice

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MarketView – June 4, 2013

US Crop progress report:
Corn planting was in line with the expectations at 91% complete which is up 5% from last week and last year at this time planting was completed.
Soybean planting was on the lower end of expectations at 57% complete but up 13% from last week. Last year it was 93% completed and the 10 year average is 79%.
Spring wheat planting is 80% complete

US Crop Conditions
Corn was rated at 63% good/excellent which compares to 72% last year and 69% on 10 year average.
Winter wheat was rated at 32% good/excellent which compares to 52% last year and 47% on 10 year average.

Crop Prices:
Old Crop Corn closed yesterday at $6.5575 and New Crop Corn at $5.60
Old Crop Soybeans closed yesterday at $15.3250 and New Crop Soybeans at $13.2550
Wheat closed at $7.0875
Hamilton Soybean Meal was $574 to $583 per tonne
Corn, Soybeans and Wheat were all lower in the overnight market as of 6 am this morning, 3 cents, 10 cents, and 8 cents per bushel, respectively.

In the News:
The Andersons, Inc. and Lansing Trade Group announced yesterday they had entered into an agreement to acquire Thompsons Limited, a grain and food-grade bean handler and agronomy input provider, headquartered in Blenheim, Ontario, and operating through 12 locations across the province and in Minnesota. The acquisition is subject to certain customary closing conditions and is expected to close at the beginning of the third quarter. Further information at http://www.farms.com/news/thompsons-to-be-acquired-by-anderson-s-lansing-63259.aspx . Check out http://www.andersonsinc.com and http://www.thompsonslimited.com for information on the companies involved.

Crop Graph:
To get your local soybean spot price, simply add your local basis
• i.e. new crop future $13.2550 + local basis of -$0.39 = $12.87/bu or $472.83/tonne

soybean futures

Disclaimer: This commentary is provided for information only and is not intended as advice

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The following three Excel based margin calculators are now available as free downloads at http://www.omafra.gov.on.ca/english/busdev/directfarmmkt/index.html   which allow producers to compare and calculate their margins for selling directly to consumers:

  • The Performance Analysis by Marketing Channel spreadsheet allows users to calculate or compare

margins across six distinct market channels:

  • Roadside stand
  • On-farm market
  • Pick your own/U-pick
  • Farmers’ market
  • Community Supported Agriculture
  • Online store/delivery service
  • The On-Farm Processing Recipe Based Costing Tool allows users  to analyze the impact of changes in recipe, ingredient costs or packaging size on product margin for value added products such as baked goods, preserves etc.
  • The Cost of Meat Processing Tool allows users to calculate the cost of meat processing per meat product by summarizing the costs of animal transport, slaughter, further processing into cuts transport cost for meat pickup.

The Business Management Unit of the Agriculture Development Branch has worked with University of Guelph staff to develop this information resource.

This project was funded through Growing Forward, a federal-provincial-territorial initiative.

Contact: Carl Fletcher, Strategic Business Planning Program Lead, carl.fletcher@ontario.ca

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MarketView – May 30, 2013

Bank of Canada Keeps Overnight Rate at 1%
As anticipated the Bank of Canada kept the overnight rate at 1% where it has been since September 2012. The longest period of time since the 1950’s. The statement indicated that “considerable monetary policy stimulus currently in place will likely remain appropriate for a period of time, after which some modest withdrawal will likely be required.” Justification for keeping rates the same were a continued slack economy, slower Canadian household debt build up, and a muted outlook for inflation. The statement also noted that Canadian exports will continue to struggle due to competitive challenges with the strength of the Canadian dollar and tempered foreign demand, but that exports are expected to recover over time. The next scheduled date for announcing the overnight rate target is July 17, 2013. The next full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be released at the same time.

The graph below shows the yearly trend of the prime interest rates impacting Canadian consumers and businesses.

Prime Interest Rate

Disclaimer: This commentary is provided for information only and is not intended as advice

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MarketView for May 17

Global markets are trading higher this morning as investors expect healthy US consumer sentiment data to be released later this morning.

The Canadian dollar has been in retreat overnight following comments from the US central bank indicating that their monetary easing program could cease as early as this summer. Our dollar is currently trading at $.97

Crops:
Corn has some downward price momentum this morning as it is likely that this week will mark a US corn planting record, according to Agrimoney.com Soybeans are trading higher in the early session as yesterday’s USDA export showed that China purchased 79% of the US soybeans sold last week, confirming an increase in demand, and a growing belief that the push in corn plantings will have a negative impact on soybean production, according to a commodities analyst quoted in Bloomberg Financial.

Disclaimer: This commentary is provided for information only and is not intended as advice.

Jennifer Stevenson
Manager (A) Sustainable Livestock Production Unit
Ontario Ministry of Agriculture and Food
Ontario Ministry of Rural Affairs

Email: Jennifer.stevenson@ontario.ca

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MarketView-May 3

Global markets are trading slightly higher this morning. US unemployment for April drops to 7.5% (a 4 year low) and better than expected job growth while the European economy is headed for further slowdown and slower deficit cuts, according to Reuters

Crops:
Crops futures are trading modestly higher in the early session as investors express concerns that continued cold temperatures and snow forecasts across the US Midwest will put a dent into yields, according to Agrimoney.com. A 5% week-over-week gains in US export corn sales may also be a factor in this morning’s positive momentum.

Livestock:
Live cattle futures are showing some pull-back this morning after yesterday’s positive gains.

MarketView is prepared by Jennifer Stevenson, Ontario Ministry of Agriculture and Food and Ministry of Rural Affairs. Disclaimer: This commentary is provided for information only and is not intended as advice

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Global markets are largely unchanged overnight. Chinese manufacturing data for April came in weaker than expected, putting the commodities sector under pressure

Crops:
Crops are trading lower across the board, despite forecasts of snow over the next 3 days for the main planting region in the US. There was much debate in Twitter in #corn last night over whether current US Midwest weather conditions would affect US crop prices. The Hightower report speculated that yields would suffer, and are looking at December corn prices to show major support at $5.51 then move to $5.80 and $6.01. Kansas, Iowa and Illinois State Extension agree that the precipitation is adding much needed moisture to the subsoil, and are not immediately concerned that yields will be impacted.

Livestock:
According to Agriculture.com, hog prices increased yesterday to the highest level since August 2012 on speculation that demand – which is seeing higher than expected volumes now – will be driven to even higher levels this summer. The demand is reported to be led by China, where consumers have concerns on locally-raised pork.

MarketView is prepared by Jennifer Stevenson, Finance and Business Structures Program Lead, Ontario Ministry of Agriculture and Food

Disclaimer: This commentary is provided for information only and is not intended as advice.

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