Corn News
Ahead of the soon to be released USDA supply and demand report, McHenry, Illinois based analysts Allendale Inc. expect the Ag Department to lower its production and new crop ending stocks estimates for corn.
Allendale sees 2009/10 corn stocks at 1.015 billion bushels and production at 11.935 billion bushels because of delayed planting. Allendale also sees the USDA cutting the average yield estimate by 2 bushels per acre. In May, the USDA put corn production at 12.090 billion bushels and new crop stocks at 1.145 billion bushels. Allendale pegs old crop corn ending stocks at 1.610 billion bushels, up 10 million from May.
Allendale expects USDA to leave the soybean production guess unchanged from May at 3.195 billion bushels, but sees old crop stocks at 99 million bushels due to strong demand; the USDA's May 2008/09 ending stocks estimate was 130 million bushels. Also, Allendale sees 2009/10 soybean stocks at 243 million bushels, compared to 230 million in May's update.
2009 U.S. wheat production is projected at 1.993 billion bushels, compared to May's estimate of 2.026 billion. Winter wheat is placed at 1.492 billion bushels, with hard red at 864 million, soft red at 417 million and white winter at 211 million. In May, the USDA had wheat production at a total of 2.026 billion bushels, with the winter crop at 1.502 billion, hard red at 871 million, soft red at 422 million and white at 208 million.
The USDA will also be issuing updated world supply and demand figures. The reports are due out Wednesday, June 10 at 7:30 AM Central.
Corn News
Showing posts with label Demand. Show all posts
Showing posts with label Demand. Show all posts
Thursday, June 4, 2009
Thursday, January 8, 2009
Monsanto More than Doubles Profits in Fiscal-first Quarter
The fiscal-first quarter for Monsanto Co. (MON) couldn't have been much more profitable, as the biotechnology company more than doubled profits.
Most of that was driven by glyphosate-based weed killer "Roundup" sold in Latin America, along with overall corn seed sales.
Another factor in the solid profits was the pricing strategy implemented by Monsanto, as they increased corn seed prices by between 15% to 20% while looking to increase prices this year by up to 25%, said the company.
For Monsanto and other companies, the question becomes whether the price increases will be able to hold, as their original increases came before commodities got hit hard. If commodities don't come back fairly quickly, it'll be hard to maintain those increases in a soft market.
If that doesn't happen soon, management of costs will be a significant factor in Monsanto's profits going, as they may have to cut their projected price increases if farmers aren't able or willing to pay Monsanto's wanted price.
Another concern in the sector is the very real possibility of a worldwide seed pricing war, which according to Monsanto CEO Hugh Grant, they won't participate in, and will hold their projected pricing to maintain their margins.
The thought there is competitors will be forced to revert to increasing prices even if they gain some temporary market share, as it'll cut significantly into profits. That seems to be a risky strategy, but at the same time it's also risky for competitors over the long haul.
For the fiscal first quarter ending November 30, net income surged from $256 million last year to $556 million this year. Sales grew to $2.65 billion for a record first quarter, an increase of 29 percent.
The company also increased its guidance to a range of $4.40 to $4.50 from $4.20 to $4.40 on an ongoing basis.
Going forward, Monsanto is continuing on with its strategy of introducing its SmartStax corn seed, which include eight genetic changes, and developed to take the place of triple-stack corn seeds.
The drought-tolerant corn of Monsanto is also near the end of its research and development stage, and is awaiting approval from the U.S. Food and Drug Administration. Assuming approval from the USDA and targeted nations, seed is scheduled to be marketed in 2012.
Even with the great news of Monsanto's performance, the key going ahead is whether they can maintain their aggressive pricing without losing significant market share. Increased supply into the market and competitors' responding by lowering prices could put downward pressure on profits for the company.
Still, to perform like they have under these economic conditions is quite an accomplishment. Long term they seem to be a solid company to invest in.
Most of that was driven by glyphosate-based weed killer "Roundup" sold in Latin America, along with overall corn seed sales.
Another factor in the solid profits was the pricing strategy implemented by Monsanto, as they increased corn seed prices by between 15% to 20% while looking to increase prices this year by up to 25%, said the company.
For Monsanto and other companies, the question becomes whether the price increases will be able to hold, as their original increases came before commodities got hit hard. If commodities don't come back fairly quickly, it'll be hard to maintain those increases in a soft market.
If that doesn't happen soon, management of costs will be a significant factor in Monsanto's profits going, as they may have to cut their projected price increases if farmers aren't able or willing to pay Monsanto's wanted price.
Another concern in the sector is the very real possibility of a worldwide seed pricing war, which according to Monsanto CEO Hugh Grant, they won't participate in, and will hold their projected pricing to maintain their margins.
The thought there is competitors will be forced to revert to increasing prices even if they gain some temporary market share, as it'll cut significantly into profits. That seems to be a risky strategy, but at the same time it's also risky for competitors over the long haul.
For the fiscal first quarter ending November 30, net income surged from $256 million last year to $556 million this year. Sales grew to $2.65 billion for a record first quarter, an increase of 29 percent.
The company also increased its guidance to a range of $4.40 to $4.50 from $4.20 to $4.40 on an ongoing basis.
Going forward, Monsanto is continuing on with its strategy of introducing its SmartStax corn seed, which include eight genetic changes, and developed to take the place of triple-stack corn seeds.
The drought-tolerant corn of Monsanto is also near the end of its research and development stage, and is awaiting approval from the U.S. Food and Drug Administration. Assuming approval from the USDA and targeted nations, seed is scheduled to be marketed in 2012.
Even with the great news of Monsanto's performance, the key going ahead is whether they can maintain their aggressive pricing without losing significant market share. Increased supply into the market and competitors' responding by lowering prices could put downward pressure on profits for the company.
Still, to perform like they have under these economic conditions is quite an accomplishment. Long term they seem to be a solid company to invest in.
Saturday, January 3, 2009
DJ CBOT Corn Review: Ends Higher On Crude; Unchanged On Week
CHICAGO, Jan 02, 2009 (Dow Jones Commodities News via Comtex) --
By Ian Berry
Of DOW JONES NEWSWIRES
Higher crude oil and short-covering pushed Chicago Board of Trade corn futures higher Friday, as the market extended its rally from Wednesday, traders said.
March corn ended up 5 1/4 cents to $4.12 1/4 per bushel, May corn ended up 5 cents to $4.22 3/4 and July corn ended up 5 cents to $4.33.
The market was a penny or two higher for most of the day and gained a few more cents before the close. It remains firmly above key support at $4 as well as its 50-day moving average at $3.85.
"The market has given a clear indication -- not just corn, but wheat and soybeans -- that the Dec. 5 lows were fairly major," said Joel Karlin, analyst for Western Milling.
Higher crude oil and U.S. stocks set a supportive tone, although there was little fundamental news to boost the market, traders and analysts said. Weekly export sales of 269,900 metric tons were weak, traders added.
Traders and analysts add that the rally from a low of $2.90 in the nearby contract in December has been in light volume, much of it around the holidays. Many expect the market will give back some of its gains once traders return and activity gets back to normal next week.
Karlin said following the Jan. 12 crop report, the market will have "a renewed focus on fundamentals" including prospects for planted acreage this year.
Weak demand across all sectors continues to limit corn's gains, analysts say, and corn's recent gains will only hinder any rebound in demand.
Funds bought an estimated 1,000 contracts. Although the market closed higher for the third straight day, the March contract ended unchanged on the week.
CBOT oats ended slightly higher. March oats ended up 2 cents to $2.12 per bushel, May oats ended up 2 cents to $2.21 1/4 and July oats ended up 2 cents to $2.30 3/4.
Ethanol futures were mixed. January ethanol ended flat at $1.620 per gallon and March ethanol ended up $0.005 to $1.654.
-By Ian Berry, Dow Jones Newswires; 312-341-5778; ian.berry@dowjones.com
(END) Dow Jones Newswires
01-02-09 1543ET
Copyright (c) 2009 Dow Jones & Company, Inc.
By Ian Berry
Of DOW JONES NEWSWIRES
Higher crude oil and short-covering pushed Chicago Board of Trade corn futures higher Friday, as the market extended its rally from Wednesday, traders said.
March corn ended up 5 1/4 cents to $4.12 1/4 per bushel, May corn ended up 5 cents to $4.22 3/4 and July corn ended up 5 cents to $4.33.
The market was a penny or two higher for most of the day and gained a few more cents before the close. It remains firmly above key support at $4 as well as its 50-day moving average at $3.85.
"The market has given a clear indication -- not just corn, but wheat and soybeans -- that the Dec. 5 lows were fairly major," said Joel Karlin, analyst for Western Milling.
Higher crude oil and U.S. stocks set a supportive tone, although there was little fundamental news to boost the market, traders and analysts said. Weekly export sales of 269,900 metric tons were weak, traders added.
Traders and analysts add that the rally from a low of $2.90 in the nearby contract in December has been in light volume, much of it around the holidays. Many expect the market will give back some of its gains once traders return and activity gets back to normal next week.
Karlin said following the Jan. 12 crop report, the market will have "a renewed focus on fundamentals" including prospects for planted acreage this year.
Weak demand across all sectors continues to limit corn's gains, analysts say, and corn's recent gains will only hinder any rebound in demand.
Funds bought an estimated 1,000 contracts. Although the market closed higher for the third straight day, the March contract ended unchanged on the week.
CBOT oats ended slightly higher. March oats ended up 2 cents to $2.12 per bushel, May oats ended up 2 cents to $2.21 1/4 and July oats ended up 2 cents to $2.30 3/4.
Ethanol futures were mixed. January ethanol ended flat at $1.620 per gallon and March ethanol ended up $0.005 to $1.654.
-By Ian Berry, Dow Jones Newswires; 312-341-5778; ian.berry@dowjones.com
(END) Dow Jones Newswires
01-02-09 1543ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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