Around the Markets
Midwest organic corn prices continue to consolidate, but mounting pressure from board prices should cap upside ahead of new crop harvest. Robust activity during the first half of the year has given way to light volume. Strong yields and a large carryover is likely to keep prices capped near $8. Food grade corn prices are moderating and are seen trading near $10.00 per bushel. Yields are expected to be huge, which is similar for conventional crops. Hedge fund traders appear to be lining up on the short side, according to the latest commitment of traders report released for the date ending August 16th, 2016. According to the CFTC, managed money added 28,000 contracts to short positions in futures and options, which comes on top of the 34,000 added in the week ending August 9th, 2016. Short positions for CBOT corn now outweigh longs, by a whopping 162,000 contracts.
Midwest organic soybeans were steady near $17.50-18.25 per bushel range. Beans are also forecast to experience record yields, but conventional prices have been buoyed, following news of large U.S. exports to China. Bean oil is seeing lots of activity, and remains supported after a recent run-up, as crushers continue to try to meet the demand for meal. Meal imports have also increased, as traders from South America attempt to take advantage of robust U.S. demand.
In the News
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USDA Loosens Guidelines on Meat Labeling
As of last Friday, the USDA will allow meat labels with the phrases “contains no GMO ingredients” and “derived from livestock fed on non-GMO feed”. Previously, the government only allowed the use of phrases “GMO” and “Genetically Modified Organism” if it was incorporated into a third-party title, such as “The Non-GMO Project”. (Bloomberg).
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New Study Highlights Opportunities, Shortcomings, of Global Organics
A new study, entitled Organic Agriculture in the 21st Century, examines the potential impact of organic farming over the next several decades, as the title suggests—and the potential for organic agriculture to feed the world’s forecasted population. The authors assert that organic farmland has the potential to provide for the anticipated 9+ billion global population in 2050; the paper mapped its research using over 500 different food production scenarios. Significant dietary changes will be needed, however. Another study, published in April, implied that only 15% of anticipated global food demand could be met with organic farming, when the world’s population begins to push 10 billion, given current dietary patterns; a shift to plant-based diets would be necessary for organic agriculture to provide an adequate amount of nutrients across the globe, the second paper showed. (Organic Authority).
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Non-GMO & Organic Firm Amongst Fastest-Growing Companies
Suja, a non-GMO and organic juice company, ranked 13th amongst Inc. Magazine’s 5,000 fastest-growing private companies. The list, published annually, requires firms to show significant revenue growth: San Diego-based Suja has seen its top-line grow by over 100x in the period 2012 through 2015. Suja also made Forbes’ list of Most Promising Companies in 2015, coming in at the 2nd spot; Coca Cola has a minority investment in the firm. (PRNewsire).
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Organic Wine Gets a Nod
A new study out of UCLA compares the taste of “eco-certified” wines, versus their conventional counterparts, and finds that critics actually give higher ratings to organic varieties. In blind taste tests of more than 74,000 organic wines ranging from 1998 to 2009 vintage, experts assigned better ratings to the organic varieties. Wine connoisseurs often dismiss organic wine as a peon of the available vintages, and wineries usually avoid indicating if varieties are grown organically. But the latest data suggest that growing wine without pesticides or herbicides, and avoiding adding sulfites (as a preservative), actually leads to better taste. (Washington Post).
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