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

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

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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