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Non-GMO and Organic Market Update for October 26, 2016

Posted on Apr 28, 2017 in Non-GMO vs GMO

Around the Markets

Organic Corn trading activity is picking up for contracts with delivery in November and December. Prices have dipped to $7.25-$7.75 range on the farm, for new crop corn, and $1 higher at elevators.  Prices are trading under pressure as space is becoming an issue, since there does not appear to be enough farm storage to handle the current harvest.  The carry for corn remains near $0.25 per quarter. Non-gmo yellow #2 CIF remained steady at $0.10 premium over conventional for new crop delivery. While the harvest for conventional corn is approximately 60% complete, the organic harvest is just getting underway.

Corn board futures prices remain near the upper end of a 3-month range. Per the most recent commitment of trader’s report released for the date October 18, 2016, managed money significantly reduced short position in futures and options by 42K contracts which is slightly more than 13%.  Managed money also increase long positions by approximately 19K contracts. Managed money that is short futures and options outnumber managed money that is long by approximately, 70K contracts down from 131K contracts, last week which has reduced the chance of a significant short squeeze.

Mid-west organic soy bean prices are experiencing moderate activity for November and December delivery. Prices have drifted to the $17.25-17.75 range, with a carry for the first quarter of approximately 25 cents per bushel. The prospect of a huge harvest has weighed on non-gmo prices. Non-GMO soybean CIF for November and December delivery are trading $0.20 –  $0.30 above cash prices for new crop. Approximately 76% of conventional soybeans have been harvested, flat year over year, just as the organic harvest is poised to begin.

Despite the specter of robust bean yields, bean oil futures prices have broken out on a weekly basis closing above resistance near a downward sloping trend line. The next level of target resistance is seen near the January 2014 lows at 36.60 cents per pound, and then the June 2014 highs near 41.05.

In the News

USDA Offers $17M Funding to Support Organic Agriculture

The United States Department of Agriculture is increasing funds to support the organic agriculture sector. The Department is offering $17.6 million in funding for research and outreach activities to support organic agriculture the agency announced Friday. The USDA has invested nearly $261 million in research to improve the productivity and success of organic agriculture (Power Bulk Solids).

Whole Foods Seen As ‘organic traitors’; Profits Plummet

Whole Foods same-store sales have fallen every quarter for the past year, with another 2.1% decline expected for this quarter, per analysts. It appears that the beginning of the decline in profits for Whole Foods came when Walmart entered the market in 2014, introducing a store-brand organics line priced 25% lower than its other organic products (Sign of the Times – SOTT.net).

US and Mexico Look to Collaborate on Organic Enforcement

The USDA, AMS division, announced that it plans to form a Joint Organic Compliance Committee (JOCC) in support of a potential organic equivalency arrangement between the U.S. and Mexico. This committee would work to increase transparency, and strengthen enforcement controls. (Specialty Food Association).

Dannon Responds to Farmers Criticizing GMO Labeling Decision

Dannon issue a press release responding to farmer criticism of its April pledge to adhere to non-GMO agricultural practices. In the statement, Dannon called the criticism of this pledge “divisive and misinformed.” In their October 17th letter farmers from the National Corn Growers Association, National Milk Producers Federation, and American Sugarbeet Growers Association, amongst other groups, indicated that Dannon’s pledge represents a “major step backward in truly sustainable food production,” (Organic Authority).

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Non-GMO and Organic Market Update for October 19, 2016

Posted on Apr 28, 2017 in Non-GMO vs GMO

Around the Markets

Organic Corn trading activity remains light as traders await the harvest.  Organic farmers generally plant later than conventional farmers in an effort to avoid cross pollination, which leads to a later harvest. Organic corn prices have stabilized near the $7.50-$7.75 range on the farm, for new crop corn that is delivered in November or December.  Old crop prices have tumbled, and are trading at a discount to new crop, as those who are long corn, scramble to empty bins ahead of the new crop harvest.  The carry for corn is approximately $0.25 per quarter. Non-gmo yellow #2 CIF remained steady at $0.10 premium over conventional for new crop deliver. The most recent yield report from the USDA shows a slight dip in bushels per acre.

Corn board futures prices remain at the upper end of a 3-month range. According to the most recent commitment of trader’s report released for the date October 11, 2016, managed money significantly reducedshort position in futures and options by 36K contracts which is slightly more than 10%.  Managed money that is short futures and options outnumber managed money that is long by approximately 131K contracts.

Mid-west organic soy bean prices are experiencing light activity for November and December delivery. Prices have drifted to the $17.50-17.75 range, with a carry for the first quarter of approximately 25 cents per bushel. Non-GMO soybean CIF are trading $0.75 –  $1.00 above cash prices for new crop. Positioning in the conventional market shows that hedge funds reduced both long position and short positions in futures and options.  Last week the USDA increased its forecast for soybean yields to another record high of 51.4 bushels per acre, up from 50.6 bushels per acre in September.

Despite the specter of robust bean yields, bean oil futures prices are poised to break out on a weekly basis testing resistance near a downward sloping trend line. A close above the 35.50 level would likely lead to a test of the June 2014 highs near 41.05.

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In the News

Organic Produce Sales Soar Double Digits in Second Quarter

Organic fruit and vegetable sales volumes surged in Q2 year over year according to the United Fresh Produce Association’s FreshFacts on Retail report. Organic produce sales increased 15% in dollar terms in Q2, eclipsing the 1-billion-dollar mark, as volumes also surged by 15%. (Capital Press)

Organic food Producers Claiming Food Organic Despite Not Meeting Standards

A survey by Australian Organic in 2014 found that 66% of consumers believe that a label on a food product guarantees that the item is organic. The ABC.net/au found products in shops that claimed the item was organic when they did not have an official organic certification logo. (ABC.net/au)

Cargill’s Food Empire Adapts to a Changing World

Consumer tastes are providing the backdrop for shifts in the corporate structure of food giant Cargill. The company is restructuring its portfolio as it responds to consumer concerns about food ingredients and animal care. Cargill is also promoting a western style healthy diet to developing world. (Wall Street Journal)

N.Y. Has 3rd Most Organic Farms in the United States

The state controller is reporting that New York has the 3rd largest number of certified organic farms in the United States. Farms that are certified in N.Y. have sold more than 220 million in products during the period covering 2008-2015. (Holsteinworld)

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Non-GMO and Organic Market Update for October 12, 2016

Posted on Apr 28, 2017 in Non-GMO vs GMO

Around the Markets

Imports of organic corn have slowed, which has helped subdued domestic trading activity, as investors await new crop for both the organic and non-GMO corn harvest. Rains could continue to delay the harvest, as the National Ocean Atmospheric Administration is forecasting wetter-than-normal weather throughout the Farm Belt. Organic corn prices have stabilized near the $7.50 – $7.75 per bushel range on the farm, and are $1 higher at elevators. Non-GMO yellow #2 CIF remained steady at $0.10 premium over conventional, but trade has seen old-crop delivered into conventional (flat premium), to make room for new-crop. Corn harvest should pick up in the Midwest towards the middle of October. According to the NASS Crop Progress report for the week ending October 2nd, 24% of corn has been harvested.

Corn board futures prices are forming a bull flag pattern, which represents a pause that occurs after edging higher, potentially preparing for a longer short squeeze. Traders examined the USDA’s report on yields today. Corn yields edged lower, as traders expected, while bean yields creeped higher, also in-line with expectations. According to the most recent Commitment of Trader’s report released for the period ending October 4th, managed money is short 343,500 corn contracts, a reduction of 3,500—compared to 180,000 long, which is a gain of 10,000 over the last week.

Midwest organic soybean prices are experiencing light activity ahead of harvest, which could take until the beginning of November. Positioning in the conventional market shows that hedge funds added to long positions, and reduced to short positions by approximately 4,000 contracts. Prices have drifted to the $17.50 – 17.75 per bushel range. Non-GMO soybean CIF are trading $0.75 – $1.00 above cash prices. According to the latest Crop Progress report, 36% of soybeans have been harvested.

In the News

Big Week for Majors Moving into Non-GMO

Both Cargill and Bunge announced new non-GMO certified food labels this week; the companies make up half of the “ABCD” acronym, which represents the four of the quintessential agriculture trading operations.

Cargill will market its first ever Non-GMO Project verified products for commercial sale. The food giant will offer cane sugar and erythritol sweeteners, as well as sunflower oil. The company has been producing and selling non-GMO products for several years, but this marks the first products to be certified by a third-party. Bunge, meanwhile, officially announced a new line of Non-GMO Project verified ancient grains—including millet, quinoa, and sorghum—at major industry events this month. Bunge’s newest non-GMO products are accompanied by a variety of organic soybean oil; Non-GMO Project has previously certified milled corn and rice ingredients from Bunge. (Business Wire; Reuters).

Private Equity Firm Bolsters SunOpta

A private equity firm, Oaktree Capital, has offered its support and guidnace to SunOpta, to the tune of $85 million. After takeover rumors last summer, the specialty foods firm is using the additional capital and guidance to “strengthen the company’s operations.” (PEHub).

Organic Seed Market to Expand at 14% CAGR

A consultancy has published a report looking at the organic seed market—both in the U.S. and abroad. The study forecasts a cumulative annual growth rate of 14% from 2016 to 2024. North American operations will dominate the market moving forward: they comprised 36% of market share in 2015. Asia Pacific will see a large growth rate, however, with a CAGR of 16% over the next eight years. Vegetable, fruit, and tree nut seeds are currently the dominant product varieties, and are expected to continue to grow quickly; thirty-one percent of the organic seed market volume was attributable to vegetables in 2015. The global market, this year, is valued at $1.6 billion.

It is important to note U.S. organic growers are required to use organic seeds only “when available”—there is a dearth of available seed, relative to demand from growers, and, as such, there is considerable room for expansion. (PR Rocket).

Brazil Approves Non-GMO Imports from U.S.

Northeastern Brazil pork and poultry producers have been under fire this year, as short corn supplies led to a 15% reduction in regional output. Recently, the Brazilian biosafety regulator, CTNBio, approved three new varieties of U.S. GMO corn for import, in an effort to alleviate tight market conditions. It is unclear whether Brazilian buyers will purchase more U.S. product, however, as many already sought relief, by contracting with neighboring Argentine sellers. (Reuters).

U.S. Natural and Organic Retail Food and Beverage—$69 Billion Value

According to a new research report, natural and organic food and beverage retail sales will hit $69 billion in the U.S. by the end of 2016—that figure represents a staunch 11% gain from year prior, and is part of a 7% CAGR from 2012 through 2016. Alternatively, generic food and beverage sales have remained flat over the past four years. The same natural and organic category is expected to expand by 70%, cumulatively, from 2016 to 2021. (PR Newswire).

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