The Living Force
Watch "Brennan Turner With An Agriculture Market Update", an archived episode of Futures originally aired 10/28/2019 on the TD Ameritrade Network.
In the economy of Russia, the region stands out as the most important agricultural region of the country (7 % of the gross output of agriculture of Russia, 1-St place in Russia). Krasnodar region — leader in terms of gross harvest of grain (10% of Russia's total) and sugar beet (17,3 %), one of the leading manufacturers of seeds of sunflower (15 %) and grape wines (37 %).
The story of the weather’s impact on the 2019 growing season and crop production in the United States is not a mystery. Early excessive rain and the resultant flooding caused delays and put fields under water throughout much of the planting season, leaving farmers playing catch-up.
“The whole season was shifted,” said AccuWeather Founder and CEO Dr. Joel N. Myers. “For most places, planting started late because of the floods and the excessive rain, and because it was late, at the end the yields were reduced because it was a shorter season. Of course, when you have to wait longer to harvest, you’re running into snow and into freezing temperatures that will kill any further growth.”
Even the government had to push its deadlines. The U.S. Department of Agriculture’s (USDA) last Crop Progress report was scheduled to be issued Nov. 25, but the report noted “due to delays in harvest progress, the weekly National Crop Progress report will be extended. The National Agricultural Statistics Service (NASS) will evaluate harvest progress for all crops each week to determine how long to continue the report.”
“It’s kind of been a domino effect the whole year,” Krista Swanson, an Oneida, Illinois, farmer, told AccuWeather. “It started out with excessive moisture in the spring that kind of pushed us back and now we’re trying to harvest in mid-November in the snow. It’s just been a challenge all around ... It seems like this year just keeps throwing curveballs at us with the weather.”
AccuWeather’s predicted production for soybeans was 4.001 billion bushels on May 30; its final estimate on Dec. 2 is 3.572 billion bushels, a decrease of 10.7 percent.
The USDA’s predicted soybean production was 4.150 billion bushels on May 10; its most recent estimate on Nov. 8 was 3.550 billion bushels, a decrease of 14.4 percent.
Corn production was 14.420 billion bushels in 2018; 2019 could be the lowest since 2015 (13.601 billion bushels) or 2012 (10.755 billion bushels), depending on the final total. Soybean production was 4.543 billion bushels in 2018; 2019 could be the lowest since 2013 (3.357 billion bushels). The NASS Annual Crop Production Summary for 2019 will be issued Jan. 10, 2020.
The latest USDA Crop Progress report shows the 2019 corn harvest in 18 key corn-producing states is still behind the five-year average from 2014-2018 of 98 percent, with just 89 percent harvested so far. The 2019 soybean harvest is almost complete, with 96 percent harvested in 18 key soybean-producing states compared to the national five-year average of 99 percent.
AccuWeather meteorologists are forecasting mostly dry and milder weather the rest of the week across the northern Plains and Upper Midwest. Snowcovered fields have delayed the harvest in some areas. Areas from Michigan through Wisconsin, Minnesota and the Dakotas are behind normal for the corn harvest. However, this weather pattern should favor harvest efforts, according to AccuWeather meteorologists. It will turn colder again early next week with light to moderate snowfall of 2 to 4 inches over the northwestern corner of the Midwest corn and soybean belt.
“This has been the most challenging year in my farming career of about 30 years,” Billie Danner, a farmer in West Liberty, Iowa, told AccuWeather.
https://www.zerohedge.com/s3/files/inline-images/ELpZiz2VAAI3_oG_0_0.jpg?itok=eD6CDaMVWith wholesale pork prices more than doubling in 2019 due to a deadly epidemic of African swine fever, a handful of Chinese pork peddlers are bringing home the bacon ham over fist, according to Bloomberg.
China's top hog-hawker of late is Muyuan Foodstuff chairman Qin Yinglin, whose net worth has more than quadrupled this year to $8.6 billion thanks to his 60% stake in the company - making him the fastest growing individual on the Bloomberg Billionaires Index. Forbes has pegged Qin's net worth at $16.6 billion. He holds the shares directly and with his wife through Muyuan Industrial Group.
After graduating from Henan Agricultural University with a degree in animal husbandry, Qin launched a hog breeding company with just 22 pigs - and now slaughters roughly 5 million per year as one of China's premiere meat mavens.
Muyuan's profit soard 260% in Q3 vs. the same period in 2018, due to the deaths of millions of pigs (some at the hands of criminal meat schemers) which caused the country's pig herd to collapse 41% YoY, sending prices skyrocketing.
As this is a major crisis in the pork industry in China, intensive research is also being done to find ways to combat it. Here is new approach which is being trialed.In order to avoid swine fever, for which there is no approved vaccine but doesn't affect human health, Muyuan has been sterilizing animal feed with heat, filtering the air inside of their facilities, and disinfecting trucks, Qin told the South China Morning Post in March.
"Some companies are very much in difficulty because they are unable to reproduce their hog herd," according to Fitch analyst Li Chen, "But some companies are seeing great profitability."
Other pork profiteers include WH Group - the world's largest pork producer, as well as pig breeder and animal-feed company New Hope Group - whose Chairman, Liu Yonghao, has seen his net worth balloon to $11 billion - nearly double what it was at the end of 2018.
"Swine fever brings both benefit and harm," Qin told SCMP. "We need to ride this violent hurricane out and turn it into a superb opportunity for our development."
As we noted in July, the rise in pork comes as prices for other meats - particularly chicken and duck - have risen substantially, as consumers turn to alternate proteins.
China is the world's top producer and consumer of pork. So when 50% of its pig herd was wiped out in 2019 from African Swine Fever (ASF), it caused pork prices in the back half of the year to hyperinflate. The immediate response by the government was to consolidate pig farms and release pork from its strategic reserves. Other measures included sourcing pork from South American countries, like Brazil and Argentina, along with reestablishing trade with the US in the last several weeks.
Now the Chinese government is working to limit the spread of ASF through a high-voltage electricity experiment installed in pig barns, reported South China Morning Post (SCMP).
The new device will be installed at a medium-sized hog farm in Chengdu, in one of China's top pig producing regions.
The goal of the test is to see whether an electric field around a barn can limit the transmission of deadly viruses.
Professor Liu Binjiang, a government scientist in northeastern China, is responsible for the "electro culture" program that has already been a huge success for increasing crop yields and reducing plant viruses.
Binjiang and his team are creating a static electric field of 50 kilovolts around a barn that holds thousands of pigs.
He believes the high-voltage discharges will break down chemicals, reduce biological aerosol by 50-90%, kill germs, and stop the spread of viruses that are transmitted through the air.
Binjiang claims that high-voltage electricity was used to create an electric field around a barn in the Hubei province, one of the hardest-hit ASF areas; he claims that none of the pigs died from the virus."The air quality [for the pigs] should improve when the device is powered up," Binjiang said. "Electricity is one of the many ways to improve living conditions for farm animals. We have a long to-do list."
"It had been deployed to enhance animal welfare and prevent airborne diseases such as foot and mouth, but the lack of African swine fever cases was a surprise. It led the team to hypothesize that the electric field had caused a change in the environment that prevented the virus thriving," SCMP noted.
Electrifying pig farms to create force fields that scrub the air of deadly viruses could be the next big breakthrough China needs to restrict the spread of ASF.
In a related vein, the Chinese Ag Ministry announced that China’s pig population in November grew by 2% from the previous month, the first increase in over a year since the country stated culling animals to slow the spread of African Swine Fever. . It’s related because, if the current 72% tariff on U.S. pork exports to China were removed, it’s estimated that U.S. pork exports would double, in addition to reducing America’s trade deficit with China by 6%. 
Many countries used to have strategic grain reserves, which were set up after the war, but many have decided against it. The US stopped in 2008 with their strategic grain reserves:China produces and consumes two-thirds of the world’s pork.
The government keeps reserves of live pigs and frozen pork to guarantee adequate supplies. Details of the frozen pork reserve are secret but industry analysts estimate its size at up to 3 to 5 million metric tons.
Industry analysts say the reserve probably is too small to have an impact on supplies in the market. The last release announced by the government was 9,600 tons in January.
Norway has also gotten rid of their grain reserves and converted the grain silos into accomodation:Once upon a time, it was popular to say that the U.S. government only had enough wheat stored up to provide everyone in America with half a loaf of bread. But that is not true anymore. Recently, I discovered that the U.S. does not have any strategic grain reserves left at all. Zero. Nada. Zilch. As you will see below, the USDA liquidated the remaining reserves back in 2008. So if a major food crisis hit this country, our government would have nothing to give us. Of course the federal government could always go out and try to buy or seize food to feed the population during a major emergency, but that wouldn’t actually increase the total amount of food that was available. Instead, it would just give the government more power over who gets it.
The U.S. strategic grain reserve was initially created during the days of the Great Depression. Back then, the wisdom of storing up food for hard times was self-evident. Unfortunately, over time interest in this program faded, and at this point there is no strategic grain reserve in the United States at all. The following comes from the Los Angeles Times…
The modern concept of a strategic grain reserve was first proposed in the 1930s by Wall Street legend Benjamin Graham. Graham’s idea hinged on the clever management of buffer stocks of grain to tame our daily bread’s tendencies toward boom and bust. When grain prices rose above a threshold, supplies could be increased by bringing reserves to the market — which, in turn, would dampen prices. And when the price of grain went into free-fall and farmers edged toward bankruptcy, the need to fill the depleted reserve would increase the demand for corn and wheat, which would prop up the price of grain.
Of course if there are no major national emergencies of any kind and life just continues on normally for decades to come, this will not be an issue.Following Graham’s theory, President Franklin D. Roosevelt created a grain reserve that helped rally the price of wheat and saved American farms during the Depression. In the inflationary 1970s, the USDA revamped FDR’s program into the Farmer-Owned Grain Reserve, which encouraged farmers to store grain in government facilities by offering low-cost and even no-interest loans and reimbursement to cover the storage costs. But over the next quarter of a century the dogma of deregulated global markets came to dominate American politics, and the 1996 Freedom to Farm Act abolished our national system of holding grain in reserve.
As for all that wheat held in storage, it became part of the Bill Emerson Humanitarian Trust, a food bank and global charity under the authority of the secretary of Agriculture. The stores were gradually depleted until 2008, when the USDA decided to convert all of what was left into its dollar equivalent. And so the grain that once stabilized prices for farmers, bakers and American consumers ended up as a number on a spreadsheet in the Department of Agriculture.
A month of rain in hours 4x in the last 30 days and record crop yields in Norther Africa from all the additional rainfall for the 3rd year in a row.
Almost daily the
This has been observed for quite some years. Here is an article from the BBC from 2009:CO2 Science site brings reports on the impact of climate change on the living world. Hat-tip: Die kalte Sonne here
Recently, CO2 Science brought up a paper in Nature Communications.
Using satellite images, Venter et al. 2018 found an eight percent increase in woody vegetation in sub-Saharan Africa over the last three decades, underscoring the global "greening trend".
According to Wikipedia, the Sahara covers a vast area of some 9.2 million square kilometers. Eight percent of that translates into more than 700,000 square kilometers. That's an area that's almost as big as Germany and France combined!(not quite true as France covers by itself 640000 km2) This is profound.
In other words, it's well over 10,000 Manhattans!
It could be that an increase in rainfall has caused this effect.
Farouk el-Baz, director of the Centre for Remote Sensing at Boston University, believes the Sahara is experiencing a shift from dryer to wetter conditions.
"It's not greening yet. But the desert expands and shrinks in relation to the amount of energy that is received by the Earth from the Sun, and this over many thousands of years," Mr el-Baz told the BBC World Service.
"The heating of the Earth would result in more evaporation of the oceans, in turn resulting in more rainfall."
But it might be hard to reconcile the view from satellites with the view from the ground.
While experts debate how global warming will affect the poorest continent, people are reacting in their own ways.
Droughts over the preceding decades have had the effect of driving nomadic people and rural farmers into the towns and cities. Such movement of people suggests weather patterns are becoming dryer and harsher.
The Intergovernmental Panel on Climate Change warned recently that rising global temperatures could cut West African agricultural production by up to 50% by the year 2020.
But satellite images from the last 15 years do seem to show a recovery of vegetation in the Southern Sahara, although the Sahel Belt, the semi-arid tropical savannah to the south of the desert, remains fragile.
The fragility of the Sahel may have been exacerbated by the cutting of trees, poor land management and subsequent erosion of soil.
With global use down 1.4 million tons, world ending stocks are raised 1.2 million tons to a record 289.5 million tons. China’s 2019/20 ending stocks are raised 1.8 million tons to 147.5 million and account for 51 percent of the global total.
I listened to the report and they said a few thingsCrop Production Annual Summary Featuring Matt Bennett
China Ethanol and Pork Woes
It was reported this week that China has suspended its plan to begin a nationwide blended gasoline policy that would contain 10% ethanol.  The main reason for this abrupt about face is that corn stocks in the country have declined considerably, in addition to less-than-ideal production. This is not only a negative for those companies who did built processing plants, but also Brazilian and American ethanol exporters who were hoping to ramp up shipments to the People’s Republic. Rumours from Beijing suggest that they want to ensure food security over cleaner gas (and a hope of a reduction in air pollution!).
The Chinese government also said this week that their sow herd grew by 2.2% in December over the previous month, a slow start to a rebuilding of the hog herd in the People’s Republic.  With the Lunar New Year celebrations taking place later this month, pork demand is nearing its annual high, which is probably why you saw Chinese pigs sent to slaughter in December increase by 14% month-over-month. Nonetheless, there’s still a “severe” shortage of fresh pork as the African Swine Fever virus remains imminent, especially with winter weather making washing and disinfecting more challenging.
Here's the summary of activity in fut+opt (disaggregated) in the week ended Jan 14 - split into 2 parts. Daily estimates of fund activity in futures only suggest the following from Jan 15-17: #Corn -11k #Soybeans -13k CBOT #wheat+5.5k Soymeal -1.5k Soyoil -9k11:09 PM · Jan 17, 2020
Chip Flory welcomes guest Clark Neighbors of BIS Commodities and Davis Michaelsen has the Friday Farm Fuel and Fertilizer Report. The AgriTalk podcast is sponsored by Syngenta.