Latest news with #WASDE
Fibre2Fashion
13-05-2025
- Business
- Fibre2Fashion
Global cotton production projected at 117.8 mn bales in 2024-25: WASDE
For 2024–25, the United States Department of Agriculture (USDA) has projected a decrease in global cotton production by 3.08 million bales, bringing the total to 117.81 million bales (each weighing 480 pounds), according to its May 2025 World Supply and Demand Estimates (WASDE) report. Global cotton production for 2025–26 is expected to increase by nearly 1.5 per cent from 2024–25, as higher beginning stocks offset the decline in production. Global consumption is projected to rise by 1.2 per cent to 118.08 million bales, as increases in Bangladesh, India, Turkiye, and Vietnam (collectively a 1.40 million bale increase) more than offset a 500,000-bale decline in China, with smaller changes elsewhere. Global trade is expected to rise by over 5 per cent to 44.83 million bales, as both the United States and Brazil are projected to increase exports by over 1 million bales each. Ending stocks are essentially unchanged from 2024–25 at 78.38 million bales. USDA projects global cotton production to decline by 3.08 million bales to 117.81 million bales in 2024â€'25 but rise by 1.5 per cent in 2025â€'26. Consumption and trade are expected to grow, with US and Brazil increasing exports. US cotton production is projected to rise slightly, with higher exports and ending stocks. The 2025â€'26 US season-average price is forecast at 62 cents per pound. In the 2024–25 world balance sheet, production, consumption, and trade have been revised upward from the April forecasts, with beginning stocks virtually unchanged and ending stocks revised downward. Due to excellent early harvest yields, Australia's projected crop has been raised by 200,000 bales, accounting for much of the increase in production. Consumption and imports have each been raised by 300,000 bales for both Pakistan and Vietnam, while imports by China have been reduced by 500,000 bales. As a result, ending stocks have been reduced by over 450,000 bales to 78.40 million, for an ending stocks-to-use ratio of 67.1 per cent. The forecast for the current season for US cotton shows a small increase in production, higher exports, higher beginning and ending stocks, and unchanged consumption compared to 2024–25. Planted area is expected to be 9.87 million acres based on the March 31 Prospective Plantings report. With recent precipitation in the Southwest, abandonment is projected to be lower than average, resulting in a US harvested area of 8.37 million acres, higher than the 7.81 million acres harvested in 2024–25. The national average yield for 2025–26 in the US is projected at 832 pounds per harvested acre, below last year's 886 pounds, based on regionally weighted five-year averages. Production is projected to be 14.50 million bales, slightly above the 14.41 million bales produced in 2024–25. Exports are projected to rebound to 12.50 million bales, up from 11.10 million, due to larger beginning stocks and higher global import demand. Ending stocks are forecast to be 400,000 bales higher at 5.20 million, resulting in an ending stocks-to-use ratio of 36.6 per cent. The projected season-average price for 2025–26 is 62 cents per pound. The 2024–25 balance sheet for US cotton reflects a 200,000-bale increase in projected exports to 11.10 million and a crop of 14.41 million bales based on NASS's final estimate of 2024–25 US cotton production. As a result, ending stocks for 2024–25 are reduced to 4.80 million bales. The projected 2024–25 season-average price remains unchanged at 63 cents per pound. Fibre2Fashion News Desk (KUL)
Globe and Mail
24-04-2025
- Business
- Globe and Mail
Can Grain and Oilseed Prices Higher?
I concluded my Q1 Barchart analysis of the grain and oilseed futures markets with the following: As the grain and oilseed sector heads into Q2, the 2025 crop year begins with the planting season. The weather across the fertile plains in the U.S. and other growing regions will determine the path of least resistance of prices over the coming months during the planting and critical growing seasons. I favor the upside in grain and oilseed prices because of the current low price levels. However, another year of bumper crops that satisfy worldwide requirements could send prices lower. Meanwhile, low prices tend to cure those low prices in commodity markets. Risk-reward dynamics favor the upside for prices after the bearish price action since the 2022 highs. The current risk-off action caused by tariffs could impact grain and oilseed, and all agricultural commodity prices over the coming days, weeks, and months. Corn, soybean, and CBOT wheat futures have increased since March 31, 2025, but they are not running away on the upside. The April WASDE was not bearish I contacted Jake Hanley at the Teucrium family of agricultural commodity ETF products for his opinion about the USDA's April 10 World Agricultural Supply and Demand Estimates Report. Jake told me: Grains overall have been holding up relatively well amid the chaos in outside markets. We've seen this movie before. The Teucrium Agricultural Fund Index is 8 for 8, outperforming the S&P 500 in every stock market correction going back to 2012. There is not necessarily a bullish story in grain markets, but rather at current levels most of the bearish news appears to be priced in. It's a good reminder that sometimes to outperform simply means to lose less. As it relates to the WASDE, the trade of the day goes to corn. The market has been waiting for the USDA to revise exports higher and today we got what we were waiting for. 100 million bushel increase to exports when combined with some other adjustments brought '24-'25 US ending stock projections down to 1.465 billion bushels. The U.S. corn stocks-to-use ratio now sits at 9.6%—a psychologically significant level that reinforces a bullish setup. Although expectations for a record corn crop this upcoming season remain high, the market is working off a much tighter beginning stocks number than anticipated just six months ago. Globally, the corn balance sheet also tightened. Ending stocks came in at 287.7 million metric tons, just below the average analyst estimate of 288 million. The global stocks-to-use ratio now stands near 23%, down from 25% last year and below the 26% range held since the pandemic. This signals a fundamentally bullish shift toward tighter global supplies. It was a rather friendly report for soybeans too. US ending stocks came in below the average analyst guess and at 375 million bushels are 7 million bushels lower compared to the March WASDE. US farmers are expected to reduce the number of soybean acres planted this year by 3.7 million acres. Plugging in the USDA's earliest forecast from the February Ag Outlook forum and plugging planted acres (83.5 million) and beginning stocks (375 million bushels) we're staring at a potential stocks/use for the '25-'26 crop of 6%. That assumes a record yield! For reference the last time we saw a stocks/use below 7% soybean futures were trading north of $12 per bushel. However, the global balance sheet presents a stiff headwind. The global stocks/use ratio is around 30%. It's likely that we would need to see the global stocks/use below 28% to even give beans a chance at taking on $12. The 2024/25 U.S. wheat outlook shows larger supplies, slightly reduced domestic use, lower exports, and higher ending stocks. Imports are raised by 10 million bushels to 150 million—the highest since 2017/18. Domestic use is trimmed 2 million bushels on reduced seed use, and exports are cut by 15 million to 820 million. Ending stocks rise to 846 million bushels, slightly above the average analyst estimate of 826 million. The domestic stocks-to-use ratio climbs to 42.9%, the highest in three years— the U.S. has plenty of wheat. Globally, the balance sheet continues its tightening trend. Ending stocks were reported at 260.7 million metric tons, just above the 260.4 million average trade guess. That puts the global stocks-to-use ratio around 32%, above the key 30% psychological level but still trending lower for the fourth time in five years—a long-term bullish signal, though not yet likely to ignite significant buying interest near-term. Grain and oilseed prices have moved mostly higher since the end of March. The full text of the April WASDE report is available through this link. Corn rallies CBOT corn for May delivery settled at $4.5725 per bushel on March 31, 2025. The daily chart shows the 3.23% gain to $4.7200 on April 23. U.S. and global corn stocks declined in the April WASDE report, supporting the coarse grain's price. Soybeans edge higher Nearby May CBOT soybean futures closed at $10.1475 per bushel on March 31, 2025. The daily soybean futures chart for May delivery shows a marginal 2.51% gain to $10.4025 per bushel on April 23. U.S. soybean inventories fell in the April WASDE report, while global stocks increased slightly. Wheat is slightly lower but has made higher lows CBOT soft red winter wheat futures settled at the $5.37 per bushel level on March 31, 2025. The daily CBOT May wheat futures chart shows the marginal 1.63% decline to $5.2825 per bushel on April 23. According to the April WASDE Report, U.S. wheat stocks increased, while global supplies are 3% below the previous year and at the lowest level since 2015/2016. The outlook for the 2025 crop year Corn, soybean, and wheat futures have made higher lows and higher highs since March, and have moved into short-term bullish trends, which is no surprise in April 2025. The prices are low, compared to the levels reached in 2022, when CBOT wheat rose to a record high, and corn and beans rallied to the highest prices since 2012. The grain and oilseed markets are in the heart of the planting season in mid-April. The weather conditions over the 2025 growing season will determine the crops and the path of least resistance of prices. The growing worldwide population means that each year's supplies must rise to keep pace with the increasing demand. Meanwhile, U.S. tariffs are trade barriers that will create a surplus in some regions and potential shortages in others, impacting prices. The bottom line is that the weather and tariffs can potentially move the soybean, corn, and wheat prices over the coming months. The current price levels could limit the downside potential, while the upside could become explosive if any surprises impact supplies. The most direct routes for risk positions in the grain and oilseed markets are the futures and futures options on the CME's CBOT division. The Teucrium family of agricultural ETFs offers CORN, SOYB, and WEAT ETFs that track the price of three actively traded futures contracts, excluding the nearby contracts to minimize roll risks. The Teucrium products tend to underperform the nearby futures on the upside, as most speculative activity occurs in the front-month futures. The ETFs often outperform on the downside for the same reason. As the grain and oilseed markets move from the planting to the growing season, we will better understand the 2025 crop levels that will determine the path of least resistance of prices.
Globe and Mail
16-04-2025
- Business
- Globe and Mail
Corn Market Planting Season Outlook: What Traders and Hedgers Need to Know
Trading in the corn market in April is shaping up to be busy, with the latest United States Department of Agriculture (USDA) World Agriculture Supply Demand Estimates (WASDE) report, the recent Commitment of Traders (COT) report, planting season trends, and trade policy shifts all in play. For traders and hedgers, these factors offer clues on positioning themselves. This article breaks down the key points and ends with actionable steps to make sense of the market through the planting season. USDA WASDE Report: Supplies Are Getting Tight The April WASDE report boosted corn. The main driver was exports, with the USDA raising its forecast by 100 million bushels to 2.55 billion, up 11% from last year and the highest in four years. Global ending stocks also dropped to 287.65 million metric tons, the lowest since 2014/15. On the flip side, the report cut feed use by 25 million bushels, which hints at weaker demand from livestock. Exports are strong, but if domestic use keeps softening, it could limit how high prices go. Key Corn Data from April 2025 WASDE Report Notes: US ending stocks were cut by ~5% from the prior estimate, driven by a 100-million-bushel increase in export projections. Global corn carryout tightened by 0.4% from the March report, reflecting supply constraints. Reducing feed use suggests softer domestic livestock demand, which could influence future price dynamics. Commitment of Traders (COT) Report: Funds Are Hesitant The recent COT report showed hedge funds holding a net long position in corn futures, which was smaller than earlier this year. They seemed cautious, likely because of tariff talks. Commercial hedgers, like producers and end-users, were net short, which is normal as farmers lock in traditional planting season high prices. After the WASDE report, the May futures hit a six-week high, suggesting that funds started adding longs again. The smaller fund position shows the market was nervous before the WASDE, but the report's numbers likely sparked some buying that could keep prices moving up if the data stays supportive. Source: CME Group Exchange The COT report shows the producers are net short (more short positions than long). An interesting picture, though: last year, corn was trading lower at about $4.70 (yellow line), and the producers only had 502K short positions. This year, corn rallied to $5.05, and the producers were aggressively selling futures as their short positions rocketed to about 1.2 million. Source: CME Group Exchange The Managed Money funds were aggressively net long (yellow line) at the beginning of the year but have reduced that position to almost neutral as of the recent COT report. Planting Season: Weather and Timing Matter From April to the peak of planting in May and June, corn prices often swing based on how planting goes and what the weather does. The USDA's March Prospective Plantings report looks early at 2025 corn acres, but the June Acreage report will nail down the actual numbers and can move markets. If planting goes smoothly, prices tend to dip as supply looks good. If planting is delayed or the weather turns bad, prices can jump. Right now, planting is off to a slow start. The USDA's April Crop Progress report showed little seeding done in the Corn Belt, and dry conditions in the Plains could make it tough to establish crops. NOAA's April 21–27 forecast calls for warmer weather, which might speed things up but could also stress crops if rain doesn't come. Source: Moore Research Center, Inc. (MRCI) Using seasonal patterns gives traders a solid edge by highlighting historical price trends in the corn market based on decades of historical data. MRCI's detailed 15-year charts show when prices typically rise or fall, like dips during planting or spikes during pollination, helping traders time their entries and exits. For example, if MRCI data flags a bullish July pattern and the 2025 planting delays persist, traders can lean into long positions more confidently. These patterns aren't guaranteed, but seasonal patterns let traders make sharper decisions by blending history with current market signals. Trade Policy and Global Factors: The Wildcards Trade policy is a big question mark. The 90-day tariff pause from President Trump has calmed things down for now, but any changes could mess with exports. A stronger dollar might also make US corn less competitive, though demand is holding up, with weekly export sales needing to hit 11.3 million bushels to match USDA estimates. Globally, Brazil's corn crop is a concern. Forecasters are discussing dry weather during pollination, which could cut yields and tighten global supplies even more. This, along with the WASDE numbers, keeps the market on edge but with room for prices to climb. What Traders and Hedgers May Consider: The following are only ideas and are not meant to be buy or sell recommendations. All trades require due diligence on the trader's part. For Traders: Play the WASDE Strength: The WASDE's lower stocks and export bump make old-crop May futures look solid between $4.60 and $4.85. Buy if prices dip to $4.60, aiming for $4.75–$4.85, but use stop-loss orders in case tariffs shake things up. Keep an Eye on Funds: Check upcoming COT reports for funds adding longs, which could increase prices. If they start dumping positions, consider shorting to $4.50, using options to keep risk low. Watch Planting Progress: Follow Crop Progress reports for signs of delays or drought. If planting stalls or the weather worsens, go long July futures. Buy if prices dip to $4.60, aiming for $4.75–$4.85. Disregard if planting picks up without issues. Stay Nimble on Trade News: Use the tariff pause to build longs, but be ready to exit if policy shifts—Track Brazil's crop reports from CONAB for signs of trouble that could lift prices. For Hedgers: Lock in Old-Crop Sales: Producers should sell old-crop corn above $4.60 with futures or call options to take advantage of WASDE strength while guarding against tariff risks. Don't overcommit if prices rally further. Secure New-Crop Needs: End-users should grab new-crop contracts if planting lags, as tighter supplies could push the basis higher. Forward contracts can help lock in supply and sourcing from multiple regions and hedge against trade disruptions. Plan for Weather Risks: Producers need crop insurance and might want to use options for new-crop corn to cover price spikes from bad weather. Check NOAA forecasts and Crop Progress reports to time your moves. Diversify Markets: Producers should look at local buyers to reduce export risks if tariffs hit. End-users should line up contracts from different origins to keep supplies steady if global stocks get tighter. Assets to Participate in the Corn Market Traders can use the standard-size futures contract (ZC) or the mini-size (XN), and on February 24, 2025, the new micro-contract (MZC). Equity traders can trade the exchange-traded fund (ETF) named CORN. In Closing… The corn market in April 2025 is full of moving pieces—tighter supplies from the WASDE, cautious fund positions, early planting challenges, and trade policy risks. The steps above allow traders to participate in price moves and hedgers to plan to manage risks and secure supplies. Staying on top of reports and being ready to adjust will be the key to coming out ahead through the planting season.
Globe and Mail
03-04-2025
- Business
- Globe and Mail
Cattle and Hogs in Q1 2025- Where are they Heading in Q2?
In my on cattle and hog futures markets in Q4 2024 and last year, I concluded: The trend is always your best friend in markets, and it has been bullish in live and feeder cattle and lean hog futures since the April 2020 lows. As the animal protein markets move into 2025, prices remain on a bullish path. The peak grilling season begins in May and runs through September when the demand increases, and prices often reach seasonal highs. However, the potential for U.S. tariffs in 2025 could cause the most volatility in beef and pork prices. Live cattle futures settled 2024 at $1.9160 per pound, with the feeders settling at $2.63035 per pound. Lean hogs closed last year at 81.30 cents per pound. The beef and pork markets increased in Q1 2025 as the bullish trends since the 2020 lows continued to take prices higher. Live cattle rise by over 8% The nearby live cattle futures contract rose 8.46% to settle Q1 2025 at $2.0780 per pound. The quarterly continuous futures chart highlights that live cattle futures reached a new record high in Q1 2025 and closed at the record peak. Feeder cattle did slightly better Feeder cattle futures slightly outperformed the fat cattle, with an 8.91% Q1 2025 gain, closing on March 31 at $2.8645 per pound. The quarterly chart dating back to the early 1970s shows the feeders reached a new all-time high in Q1 2025 and closed near the peak. Lean hogs posted a nearly 8% gain Lean hog futures slightly underperformed the cattle futures but managed to gain 7.90% in Q1 2025, settling at 87.725 cents per pound on March 31, 2025. The quarterly chart illustrates the pattern of higher lows since the 2020 41.50 cents per pound pandemic-inspired bottom. The WASDE warns that prices are high The USDA's March World Agricultural Supply and Demand Estimates Report reflects high prices in cattle and hogs: Cattle price forecasts are lowered for the first half of 2025 based on recent prices. The second half is unchanged as demand for cattle is expected to remain strong. Hog price forecasts are lowered for the second and third quarters, based on recent prices and slightly weaker demand than previously expected. The full text of the March WASDE report is available through this link. Meanwhile, the USDA's Hogs and Pigs Report on March 31 told the markets that limited supplies could support prices. JP Morgan's analysis of the report is available through this link. The prospects for the 2025 peak grilling season beginning in late Q2 Beef prices are at all-time highs, and pork prices are making higher lows going into the 2025 peak grilling season, which runs from late May through early September. Meanwhile, the cattle and hog futures markets begin reflecting the increased demand as the BBQs come out of storage long before the Memorial Day weekend holiday, which marks the start of the peak animal protein demand season. The trend is always your best friend, so we should expect higher cattle and hog prices over the coming weeks and months. However, the risk of corrections will rise with prices. The bottom line is that those burgers, hot dogs, steaks, sausages, and ribs will cost more this year.
Globe and Mail
28-03-2025
- Business
- Globe and Mail
Will Pigs Fly This Peak Season?
Lean hog futures prices rallied 19.60% in 2024, closing last year at the 81.30 cents per pound level on the nearby CME lean hog futures contract. In my early January quarterly Barchart article on the animal protein sector, I concluded: The trend is always your best friend in markets, and it has been bullish in live and feeder cattle and lean hog futures since the April 2020 lows. As the animal protein markets move into 2025, prices remain on a bullish path. The peak grilling season begins in May and runs through September when the demand increases, and prices often reach seasonal highs. However, the potential for U.S. tariffs in 2025 could cause the most volatility in beef and pork prices. Lean hogs were higher than the 2024 close on January 2, 2025, at 81.675 cents per pound. In late March, the price for May delivery was around 89.00 cents per pound, as the 2025 grilling season is on the horizon. The USDA lowered its hog price forecast in the March WASDE report The U.S. Department of Agriculture's March World Agricultural Supply and Demand Estimates Report (WASDE) told the live hog futures market: Pork production is lowered on a slower rate of slaughter in the first quarter, partially offset by heavier dressed weights. Pork exports are reduced on lower expected domestic supplies and increased global price competition. Hog price forecasts are lowered for the second and third quarters, based on recent prices and slightly weaker demand than previously expected. The report was bearish for pork prices. A bullish trend since early March Meanwhile, lean hog futures for May delivery have increased since early March. The daily May futures chart shows the 8.3% rise from the March 4 84.85 cents low to the most recent March 17 91.90 cents per pound high. At around the 89 cents level in late March, lean hog futures remain closer to the recent high. With the peak grilling season on the horizon, the forward curve over the coming months reflects the expectations for higher lean hog futures prices. The forward curve illustrates that lean hog prices peak in 2025 during the grilling season in July at around 97.50 cents per pound. The monthly chart shows resistance at $1 per pound The long-term monthly lean hog futures chart highlights that technical resistance is around the $1 per pound level. The July 2023 high was at $1.0075 per pound, the first resistance level. In April 2024, the hogs reached a $1.0965 per pound high. The monthly chart shows that annual price peaks tend to occur during the spring and summer months when pork demand reaches highs from the Memorial Day weekend in late May through the Labor Day weekend in early September. BBQs across the United States will be working overtime during the coming summer months, with ribs, sausages, and other pork products on the menu. Tariffs under the Trump administration is impacting commodity prices as the raw materials are global assets. The chart shows that China is, by far, the leading pork-producing country, followed by the E.U., U.S., Brazil, Russia, Canada, and Mexico. Tariffs could cause U.S. pork prices to rise over the coming weeks and months. Meanwhile, a Chinese multinational conglomerate paid $4.7 billion for Smithfield Foods, a leading U.S. pork producer and food processing company based in Smithfield, Virginia. The tariffs and push for ' Made-in-America ' products by American companies could change Smithfield's ownership dynamics over the coming months. After the Hong Kong-based Chinese company purchased Smithfield Foods, the company was a private enterprise. With punitive and reciprocal tariffs on the horizon, the Chinese WH Group spun off Smithfield Foods, which now trades on the NASDAQ under the symbol SFD. Time will tell if the Smithfield spinoff, tariffs, increased seasonal demand, or other factors cause pork prices to follow cattle higher over the coming months. Lean hogs reached a record high of $1.33425 per pound in 2014 and a lower high of $1.27325 in 2022, which stand as the long-term technical resistance levels. There are no pork ETF or ETN products- Futures are the only arena for pork price participation The only route for a risk position in the lean hog market is through the CME's futures and futures options contracts. No ETF or ETN products track the price action in the lean hog or any other pork futures. A lean hog futures contract contains 40,000 pounds. At 89.325 cents per pound, one contract is worth $35,730. The original margin is $1,870 per contract, translating to a 5.23% downpayment to control $35,730 of lean hog futures. The exchange requires variation margin payments if equity on a risk position falls below the $1,700 per contract level. Lean hogs are heading into the peak demand and peak price season over the coming weeks. As the forward curve shows, expectations are for higher prices. However, 2025 is no ordinary year, as trade barriers and other factors could cause increased volatility in pork prices. Time will tell if pig prices fly during the 2025 grilling season.
