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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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Non-GMO and Organic Market Update for October 4, 2016

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

Around the Markets

Price action has stalled, but momentum is poised to accelerate as the harvest arrives. Rains could continue to delay the season, as the National Ocean Atmospheric Administration is forecasting wetter-than-normal weather throughout the Farm Belt. Imports have slowed ahead of new-crop, allowing feed organic corn prices to stabilize near the $7.50 – $7.75 per bushel range on the farm, while remaining $1 higher at elevators. Non-GMO yellow #2 CIF remained steady at $0.10 premium over conventional. Corn harvest should pick up in the Midwest towards the middle of October.

Corn futures prices are testing the top end of a 2-month range, potentially making the market ripe for a short squeeze. According to the most recent Commitment of Trader’s report released for the date September 27th, 2016, managed money is short 347,000 corn contracts, compared to 170,000 long. In the latest week, managed money added 7,000 contracts to their short position in futures and options, while reducing long position in futures and options by the same volume.

Midwest organic soybean prices are experiencing light activity ahead of harvest, and few contracts have been locked up. It appears that predicting yields on beans is less precise than predicting yields on corn, keeping buyers and sellers on the sideline until the soybean yields become clear. This could take until the beginning of November. Positioning in the conventional market shows that hedge funds reduced long positions, and added to short positions by approximately 16,000 contracts. Prices have drifted to the $17.50 – $17.75 per bushel range. Non-GMO soybean CIF are trading $0.75 – $1.25 above cash prices.

In the News

Report Identifies Greatest Research Needs for Organic Farmers

The 2015 National Organic Research Agenda has been published by the Organic Farming Research Foundation—the report details the organic farming practices most in need of new research and strategies. Based on responses from over 1,000 operations, 33% of respondents labeled “weed, disease, pest management” as their “top priority” for new research. “Soil health” ranked next-highest, with 27% of those surveyed indicating the desire for advancement of research and techniques; the third-ranked module was general “farming practices”. Furthermore, the report indicated a lack of reliable, available resources for organic farming support—aside from the insight of other organic farmers. By a wide margin, other organic farmers were the primary source of “highly useful” information.

The report broke down some of the demographics of the selected organic farming operations, as well. The most commonly grown crop was vegetables (55% of respondents), while 41% of the operations indicated organically raising some sort of livestock, and another 28% stated they produced value-added products. Forty-six percent of farmers said they had transitioned to organic farming from conventional practices, while 48% said they had initiated their operations as organic at inception.

Nationally, 2.2% of participants indicated having an organic shipment rejected due to GMO contamination—a significantly low rate, though it highlights the presence of co-existence issues. (OFRF).

Lawsuit Against Seed Technology Firm Gains Steam

A lawsuit filed against a prominent seed technology firm has been granted class action status. Farmers initially sued the seed maker two years ago, after shipments of an unapproved variety of GMO U.S.-origin corn were rejected at Chinese ports. Growers indicated that they suffered losses when the dispute led to a temporary halt in Chinese purchases of U.S. corn.

The granting of class action status will make it easier and less expensive to move forward with the case. The firm has said it might appeal the court’s ruling, which may drag on proceedings. (Reuters).

USDA Commits Funding to Local and Community Food Projects

The U.S. Secretary of Agriculture announced that the government would fund $56 million in grants to strengthen “local and regional food systems”. To date, the government has offered around $1 billion in over 40,000 similar projects. Approximately $21 million of the newly committed funding will go to organic research. Concurrent to those grants, the USDA also indicated it would extend $48 million to the Specialty Crop Research Initiative in 2017. (USDA).

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Non-GMO and Organic Market Update for September 27, 2016

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

Around the Markets

New crop corn prices have converged with old crop prices, as traders await the acceleration of the harvest, after heavy rains in the Farm Belt slowed initial collection from the fields. End users appear to be holding long organic positions, and are unwilling to further contract ahead of a likely robust supply. Imports continue to enter the U.S. at a steady pace, allowing organic corn prices to slip slightly, to the $7.50-$7.75 per bushel range on the farm, and $1 higher at elevators. Non-GMO Yellow #2 CIF remained steady at a $0.10 premium over conventional.

CBOT corn board prices dipped back into the middle of a tight range, as hedge fund traders added to short positions in futures and options, according to the latest Commitment of Trader’s report, released for the date ending September 20th, 2016. Managed money increased short positions by 16,900 contracts, while adding 2,200 contracts to long positions.

Midwest organic soybean prices are experiencing light activity ahead of harvest. As opposed to corn, bean contracts are typically transacted at harvest, as predicting yields on beans is less precise than predicting yields on corn. Prices have drifted to the $17.50-17.75 per bushel range. Non-GMO soybean CIF are trading $0.75-$1.25 above cash prices. Bean oil prices are beginning to catch a small bid, as crushing capacity increases in India. Market sources reveal that the government might be providing some incentive to hold vegetable oils for domestic supply, which should reduce exports to the United States.

In the News

OTA Study Quantifies Millennial Organic Buyers

A new survey from the Organic Trade Association (OTA) breaks down the buying power of U.S. families from different age generations—segregating the market into Millennials, Generation X, and Baby Boomers. Millennial families were classified as parents 18-34 years of age with at least one child under 18: that market segment contributes 52% of organic market purchases. Generation X made up 35%, and Baby Boomers 14%. The number of families “never buying” organic was seen at 18%, down from 30% in 2009.

Perhaps most notably, 77% of Millennials considered themselves “well informed” about organic products. One often voiced concern from the production side of the industry is the lack of thorough understanding of specialty food label implications. Perception is usually what counts, though, and the OTA survey results capture a strong theme amongst the younger generation, and its growing sensitivity to food labels. (OTA).

Non-GMO Milk Label Raises Ire from All Sides

Last week, a major U.S. West Coast dairy operation became one of the first of its kind, as it converted all of its conventional milk products to non-GMO varieties; the label already has an organic arm. Organic and conventional growers, as well as scientists, reproofed the announcement: they cited that non-GMO labeling often misleads uninformed consumers, a now-familiar complaint. Organic farmers often state that non-GMO labeling leads consumers into thinking non-GMO products are produced under the same criteria as organics. A reputable 2014 scientific analysis also showed that, over 30 years of GMO-fed livestock studies, there was no statistically significant evidence for changes in the nutritional content of meat or milk. (SF Chronicle).

Chinese, Global Consumers Surveyed on Food Preferences

Another survey was released last week, focusing on global attitudes towards organic products. Readers took an interest in the results from Chinese participants. Conducted by Nielsen, the Global Health and Ingredient-Sentiment survey showed that 70% of Chinese respondents follow a diet that prohibits or limits consumption of some type of ingredient; that figure is above the global average of 64%. Furthermore, 65% of respondents desired more all natural foods, 55% wished to see more organic, and 52% wanted more GMO-free products. The results also showed 82% of those surveyed would pay more for products absent unwanted ingredients, which was above the global average for that question, of 68%.

The survey was conducted worldwide, and results can be seen for other countries and regions, as well. (Nielsen).

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