November 2015

TRADED COMMODITIES

Light Crude Oil

Coffee

OTHER COMMODITIES

OTHER NEWS

TRADED COMMODITIES

Light Crude Oil

Nearby Futures WSJ

November 20, 2015 (WSJ.com) by Georgi Kantchev

Oil Prices Fall in Volatile Trade

Analysts say investor sentiment toward crude oil remains weak amid ample crude supply

U.S. oil prices fell in volatile trade Friday as ample global supplies of crude continued to pressure the market.

Prices swung between gains and losses in early trading with investors awaiting the latest oil rig count out of the U.S. later Friday.

The December contract for light, sweet crude on the New York Mercantile Exchange, which expires Friday, fell 1% to $40.12 a barrel; it earlier declined as low as $39.88. The more active January contract was little changed at $41.71.

Brent, the global benchmark, fell 0.2% to $44.14 a barrel on ICE Futures Europe.

Underscoring the volatility in the oil market, both benchmarks are up for the week, by about 1.5%, after dipping to multi-month lows below $40 a barrel earlier in the week.

Analysts at FXTM said that investor sentiment toward crude oil remains weak and this week's relief rally may offer an opportunity for bearish investors to send prices back below $40 a barrel.

Earlier this week, the U.S. Energy Information Administration said domestic crude-oil inventories rose by 252,000 barrels last week, less than expected by the market. However, U.S. oil inventories are near levels not seen for this time of year in at least the last 80 years.

Meanwhile, other major producers such as the members of the Organization of the Petroleum Exporting Countries and Russia have continued to pump crude at a high pace in a bid to defend and win market share. The market is also expecting the return of Iranian exports to the global oil market following the lifting of international sanctions against Tehran.

"Additional oil could reach the market from Iran in the course of the first quarter of 2016, thereby swelling the oversupply," analysts at Commerzbank CRZBY 1.43 % said in a note to clients. "We regard a quantity of 500,000 barrels a day as realistic, though this should already be priced in and thus pose no additional burden on prices."

Investors are expecting the latest U.S. oil rig count due later in the day by Baker Hughes Inc. BHI -1.10 % The number of rigs drilling for oil in the U.S., which is viewed as a rough proxy for activity in the oil industry, has fallen sharply since oil prices started falling last year. But last week the rig count rose for the first time in 11 weeks, by two rigs to 574, highlighting the resilience of the U.S. shale industry despite the continuing price rout.

Nymex reformulated gasoline blendstock-the benchmark gasoline contract-fell 0.4% to $1.28 a gallon. ICE gasoil changed hands at $422.50 a metric ton, down $4.50 from the previous settlement

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Coffee

Nearby Futures WSJ

November 23, 2105 (ICO.org) October 2015 Coffee Market Report

Volatility returns to the coffee market as prices stay low

ICO October 2015 Coffee Market Report

Despite a slight jump in coffee prices at the beginning of October, these gains were short-lived as global commodity markets turned lower. Total exports for coffee year 2014/15 dropped for the first time in five years, but still reached the relatively high level of 110.7 million bags. Looking ahead to the coming year, however, several major producing countries are facing potential production setbacks, putting a lot of pressure on the 2016/17 Brazilian crop.

Coffee prices started the month brightly as rains expected in Brazil failed to materialise, and concerns over the flowering for the 2016/17 crop grew. The daily price of the ICO composite indicator jumped from 114.80 cents/lb at the beginning of the month to a high of 125.08 on 14 October. However, as the Brazilian real again weakened against the US dollar and rains started to appear, the market reversed lower, dropping to a low of 113.48 cents. The monthly average settled on 118.43 cents, 4.7% higher than September, but the negative market trend observed over the last year still seems to prevail.

Furthermore, it is notable that coffee prices have recently followed a similar trajectory to global commodity prices, as shown below by the Standard & Poor GSCI commodity index. Much of this broader downward trend over the last year has been driven by concerns over slowing economic growth in China and the increasing likelihood of a US interest rate rise. It is important therefore to bear in mind that the fundamentals in supply and demand are not the only factors affecting the coffee market.

Looking at the group indicators, the three Arabica groups of Colombian Milds, Other Milds and Brazilian Naturals performed slightly better than Robustas, resulting in a widening in the arbitrage on the New York and London futures markets of 12.8%. Other Milds continue to trade at a premium to Colombians as monthly production levels in Colombia carry on increasing. Monthly price volatility in October was similar to last month, at 7.6%.

Total exports at the end of coffee year 2014/15 came to 110.7 million bags, 3.1% less than last year. This is the first year-on-year decrease in export volumes for five years. Shipments of both Arabicas and Robustas were lower, by 1.9% and 4.9% respectively, although an increase of 11.6% was recorded in the Colombian Milds group.

In terms of the major origins, exports from Brazil finished on 36.3 million bags, 1.8% more than 2013/14 and the largest volume from Brazil on record. Vietnam, on the other hand, saw severely restricted exports, down by 19.2% to an estimated 20 million bags. The ongoing recovery in Colombia resulted in an increase of 13.3% to 12.3 million bags, while Indonesia increased to an estimated 7.3 million bags and Honduras to 5 million bags. Our production estimate for 2014/15 has been revised slightly to 143.3 million bags, down 2.3% compared to last year. This revision is mostly due to an increase in production by Colombia, which is now estimated at 13.3 million bags. Looking ahead, however, a lack of rain resulting from El Ni�o could reduce production next year, with bad weather also potentially affecting production in Indonesia and Vietnam.

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Corn

Nearby Futures WSJ

Corn Production Raised 99 Million Bushels

November 10, 2015 (WASDE)

Total U.S. corn use for 2015/16 is projected 100 million bushels lower with exports lowered 50 million bushels. U.S. corn export sales and shipments lag well behind last year at this time and U.S. supplies remain uncompetitive in many foreign markets as corn from Brazil continues to undercut U.S. offerings. U.S. corn ending stocks for 2015/16 are projected 199 million bushels higher at 1,760 million. End-of-year stocks are projected 29 million bushels higher than those reported for 2014/15. The 2015/16 season-average corn price received by producers is projected 15 cents lower on both ends this month to $3.35 to $3.95 per bushel.

This month's sharp rise in 2015/16 global coarse grain supplies is driven mostly by downward revisions to China corn feeding for 2013/14 through 2015/16. China corn beginning stocks are raised 18.8 million tons for 2015/16 reflecting the impact of lower estimated feed use for the preceding marketing years. Partly offsetting the increase in China is a 7.0-million-ton reduction for 2015/16 Brazil corn beginning stocks. Brazil corn feeding is raised for 2006/07 through 2011/12. (Balance sheet revisions for China and Brazil with a comparison to the October estimates and projections will be available at http://www.usda.gov/oce/commodity/wasde/historical.htm following today's WASDE release.)

Global coarse grain production for 2015/16 is raised 2.3 million tons with the largest increase for U.S. corn. Corn production is also increased for Argentina and Brazil, but lowered for Ukraine, South Africa, India, and EU. Global sorghum production is lowered slightly with a reduction for Mexico more than offsetting the U.S. increase. Higher EU barley production is mostly offset by a reduction for Russia. EU oats and rye production are each raised slightly, but India millet is lowered.

Global 2015/16 coarse grain consumption is lowered 10.0 million tons mostly reflecting reductions in China corn and sorghum feeding. Corn consumption is also lowered for EU with reductions in food, seed, and industrial (FSI) use and feed and residual use, with the latter driven by higher expected wheat feeding. China FSI use is raised on prospects for more corn processing. Global coarse grain trade for 2015/16 is lowered with corn and sorghum exports both reduced. Corn exports are lowered for Ukraine and India, but raised for Argentina. Brazil corn exports are raised for 2014/15, also affecting U.S. 2015/16 marketing year export prospects.

Global coarse grain ending stocks for 2015/16 are raised 24.3 million tons with nearly all of the increase for China corn. More than half of the world's 2015/16 corn ending stocks are expected to be held in China. Corn ending stocks outside China are projected 0.3 million tons higher this month. Higher U.S. and EU corn ending stocks are offset by reductions for Brazil and Indonesia.

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Orange Juice

Nearby Futures WSJ

November 18, 2015 (TheLedger.com) by Kevin Bouffard

OJ Sales Improve, But Demand Still Weak

WINTER HAVEN - A dark cloud looms behind the recent improvement in U.S. retail orange juice sales.

OJ sales at major U.S. retail outlets declined just 2.6 percent in the four-week period ending Oct. 31 compared to a similar period one year earlier, according to the most recent sales report from the Florida Department of Citrus. Consumers purchased 35.9 million OJ gallons in the recent period, compared to 36.9 million gallons a year ago.

The average retail price for all 100 percent OJ products increased less than 1 percent to $6.51 per gallon in October.

The report marked the sixth consecutive month to see improved numbers in OJ sales, although sales continued to decline. But the rate of decline has slowed by two-thirds from the 8.7 percent decline in the April sales period.

Florida citrus growers are not positioned to take advantage of improving OJ sales because the U.S. Department of Agriculture projects the 2015-16 orange crop will be the lowest in 51 years at 74 million boxes.

"Even if there is some stability on the demand side (sales), the supply isn't there to support higher consumption," said Tom Spreen, emeritus professor of agricultural economics at the University of Florida and an authority on citrus economics.

Spreen and Allen Morris, an economist and vice president of sales and marketing at Wm. G. Roe & Sons Inc., a Winter Haven grower with juice and packinghouse operations, agreed OJ importers would benefit the most from the improving sales picture because they would provide the increased juice supplies.

"They (importers) would benefit, but it would not necessarily be detrimental to Florida growers," Spreen said.

That's because rising OJ sales would raise demand among Florida juice processors on the current season's orange crop, thus pushing up farm prices. Juice processors buy 95 percent of the annual orange crop.

But Morris and Spreen were not ready to say the U.S. orange juice market has turned the corner despite the six-month improvement trend.

"The orange juice market is a complete disaster," Morris said. "In my opinion, the problem is not greening but the lack of a market."

U.S. retail orange juice sales have declined for 13 of the last 14 Florida citrus seasons, finishing 2014-15 down 6.7 percent in gallon sales volume and off 3 percent in total sales revenue to $3.2 billion, according to the Citrus Department. U.S. consumers are buying 45 percent less OJ than they did in 2000-01, when the streak of sales decline began.

"We have not given the consumer a compelling reason to drink orange juice since 2002," Morris said.

Without a return to growth in the OJ sales market, processors won't have an incentive to pay more for the 2015-16 crop or in future seasons, he added.

The compelling message to drink more OJ must come from the Citrus Department, the state agency charged with promoting Florida citrus products, Morris said. Orange juice is the department's major marketing focus, accounting for more than half its annual budget.

The department is the only Florida citrus organization capable of expanding the OJ market because it advertises orange juice as a generic product not tied to a specific brand, he said. Advertising by the major brands, such as Tropicana and Minute Maid, works mainly on increasing that brand's share of the market, not on expanding the entire OJ market.

But the Citrus Department is financed primarily through a state tax growers pay on their harvest, and Morris acknowledged it would be difficult to get growers' support for a bigger marketing program if importers get most of the benefit, at least in the short run.

But that's short-sighted, he said.

"Would you rather have Brazil (the source of most OJ imports) have 50 percent of the OJ market with fruit prices at $2.50, or would you rather have Brazil at 10 percent of the market with fruit prices at $1.50?" Morris asked. "If the OJ market keeps falling, Florida processors have no reason to sign up Florida growers to long-term (purchase) contracts."

Morris compared the current greening environment to the 1980s, when Florida growers were devastated by a string of freezes that killed millions of trees.

Brazil indeed supplied about 50 percent of the U.S. orange juice market as Florida citrus growers rebuilt, Morris said. But retail sales declined only 13 percent during the decade because the Citrus Department had a compelling OJ message based on the products health benefits.

"What we want is a strong, growing market," he said. "Marketing efforts grow demand, and that increases farm prices for Florida growers."

Spreen agreed.

"The demand side is what's going to support higher prices for growers," he said.

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Wheat

Nearby Futures WSJ

November 10, 2015 WASDE

Wheat Exports Lowest since 1971

Projected U.S. exports for 2015/16 are lowered 50 million bushels to 800 million, and ending stocks are raised by an equal amount to 911 million. Exports would be the lowest since 1971/72; ending stocks are the highest since 2009/10. Wheat exports are lowered on a very slow pace to date and continued lack of U.S. price competitiveness. The projected range for the 2015/16 U.S. season-average farm price is narrowed 5 cents on both the high and low ends to $4.80 to $5.20 per bushel.

Global wheat supplies for 2015/16 are lowered 0.2 million tons on decreased beginning stocks partially offset by a small production increase. A 2.0-million-ton increase for EU production is partially offset by a 1.0-million-ton reduction for Australia and a 0.5-million-ton decrease for Russia. The EU and Russia changes stem from harvest reports to date. The Australia change reflects very hot and dry October conditions affecting grain fill and lowering yield potential. The global wheat crop is now projected at 733.0 million tons, a third consecutive record.

Foreign wheat exports for 2015/16 are raised 1.2 million tons led by a 1.0-million-ton increase for Canada on pace to date. Exports are also raised 0.5 million tons each for Brazil and EU on increased supplies of feed wheat and a larger crop, respectively. Australia exports are lowered 1.0 million tons on a smaller crop. Total world exports are down 0.2 million tons due to a 1.4-million-ton reduction for the United States. Several mostly offsetting changes are made to importing countries. Total world usage is up 1.0 million tons, led by China. Ending stocks are lowered 1.2 million tons to 227.3 million, but remain record large

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OTHER COMMODITIES

Dairy Products

� Brian Gould, Agricultural and Applied Economics, UW Madison

MADISON, WI November 13, 2015 (REPORT 45)

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Butter Highlights

� Brian Gould, Agricultural and Applied Economics, UW Madison

MADISON, WI November 13, 2015 (REPORT 45)

BUTTER HIGHLIGHTS:

In the Northeast, butter makers are finishing production and delivery for the Thanksgiving holiday. Butter output is active and demand is steady. However, some retailers expect to boost buyer interest with a notable growth in promotional ads. In the Central region, butter production is steady to slightly tighter. Orders from retailers and food service remain strong. In the West, butter output is steady. Demand is still good to slightly lower as the Thanksgiving holiday gets closer and retail orders are filled. Bulk butter prices range from flat to 5 cents over the market in the Northeast, 4 cents under to 7 cents over in the Central region and 4 cents under to 3 cents over in the West. Friday at the CME Group, Grade AA butter closed at $2.8850 for no change compared to the last week's close.

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Cheese Highlights

� Brian Gould, Agricultural and Applied Economics, UW Madison

MADISON, WI November 13, 2015 (REPORT 45)

CHEESE HIGHLIGHTS:

U.S. cheese production is fairly steady. Most manufacturers are receiving adequate supplies of milk for their processing needs and are running near full production. Domestic demand is solid with many cheese makers seeing more natural cheese varieties leave their facilities without going into inventory. Food service and pizza demand is robust. Processors mention inventories are a little long for barrel cheese but a little tighter for blocks. Market activity is moderate to good for domestically produced foreign type cheeses. Demand for imported varieties is steady. In CME Group trading Friday, barrels closed at $1.4675, down $.1825 from last Friday and 40# blocks closed at $1.6200, down $.0800 from last Friday.

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Polypropylene

November 13, 2015 (Chicago, IL) The Plastics Exchange

Commodity resin trading remained busy; relatively high volumes of resin changed hands and prices were generally firmer. While Polyethylene transactions continue to outnumber Polypropylene, im-proved PP availability made for a better balance. Polyethylene contracts will be steady in Nov and producers will instead pursue their $.05/lb price increase in Dec. Polypropylene contracts should see an increase between $.01-.03/lb depending on producers' ability to expand margins. While inquiries from international traders continue to stream in, the strong US dollar is complicating high volume ex-port sales through the secondary market.

The Propylene market saw very little action; bids and offers did not deviate far from the $.29/lb level where spot PGP last transacted in the previous week. November PGP contracts did find settlement with a penny gain to $.315/lb, which is exactly $.40/lb below the $.715/lb price of Nov 2014 - what a difference a year makes. The PGP forward curve has flattened considerably, PGP can currently be procured for any of the next 12 months within a penny of the prompt price.

Polypropylene trading was much better and prices edged a half-cent higher; while supplies are still spotty, liquidity has improved. November PP contracts will rise at least the penny increase seen for Nov PGP contracts, plus any additional production margin that can be garnered. Although spot and contract prices have been converging, there are no truly great deals to be had. Aside from typical small buyers, processors are mostly coming to the spot market to fill in gaps due to insufficient direct supply or delayed railcars. PP exports are primarily limited to the natural Mexican market as well as rough widespec shipping to the India and Asian regions.

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The King Nut Report

September 25, 2015 (Solon, OH) King Nut

ALMONDS - The Almond market is finally seeing the effects of high pricing on demand. Domestic and export sales are both down in comparison to last year. The drought in California continues to be the single biggest factor going forward.

CASHEWS - Demand for Cashews continues to be strong. Supply has been consistent, resulting in relatively stable pricing over the past several months.

PEANUTS - The Peanut market continues to be relatively stable. There has been some recent firming due to increased demand from China. The Chinese, Indian and South African crops were all short. The spot and near term market prices continue to move at a premium. The market will likely continue its stable course through the middle of winter.

PECANS - Pecans alternate between large and small crops. The remaining current crop continues to sell at a premium on the spot market. The harvest that will begin in the next few weeks will be a large crop but there are conflicting reports on how much the crop will produce. Pricing on Pecans has been firming for the past 10 months and there are no indications that the situation will change regardless of the actual size of the upcoming crop.

WALNUTS - Supply and demand for Walnuts are both tracking very close to last year. Walnuts remain plentiful and stable in price. Pricing is down significantly from the same time last year.

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OTHER NEWS

Hot Topics

November 20, 2015 (The Fiscal Times.com) by Beth Braverman

Cost of Thanksgiving Dinner Hits Record High

Getting together with friends and family for the holidays may be priceless, but putting food on the table costs money

The average cost of Thanksgiving dinner for 10 people exceeded $50 for the first time since the American Farm Bureau began tracking it in 1986. The total price of the feast increased 70 cents (or 1.4 percent) to $50.11 from 2014. The average cost of food for the celebration has remained around $49 since 2011.

The most expensive item on the list is a 16-pound turkey, which costs an average of $23.04 this year. That's up $1.39 from last year, or 6.42 percent, the largest percentage increase of all the grocery items.

The increase is largely due to production issues caused by a bird flu outbreak in the Midwest earlier this year. But turkey prices have been falling in the last week, the AFB said, as retailers aggressively market them for the holidays.

Fears that a pumpkin shortage from wet weather would affect Thanksgiving pies also appear to be overblown. A 30-ounce can of pumpkin pie mix increased 8 cents this year to $3.20.

Other item prices that went up this year included a 14-ounce package of cubed bread stuffing (up 7 cents), two nine-inch pie shells (up a nickel), and 3 pounds of sweet potatoes (up a penny).

The prices of milk and miscellaneous ingredients experienced the largest year-over-year price declines. The price of whole milk dropped 51 cents, or 13.6 percent, and the price of miscellaneous ingredients, declined 30 cents, or 8.6 percent.

Prices of a half-pint of whipping cream, 12 ounces of fresh cranberries, a tray of carrots and celery, and a pound of green peas collectively fell 17 cents.

While the price of Thanksgiving dinner remains relatively stable, the cost of traveling for the holiday is getting cheaper. Prices for the most popular Thanksgiving flights are down an average of 9 percent this year gas prices are at their lowest level in seven years.

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Contact Paul Normand | pnormand@haco.us.com

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