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Sharp Grain, Soybean Selling on Better Weather
Grain and soybean futures fell sharply Thursday as traders raced out of bets that weather troubles would affect this year's harvest.
Most actively traded contracts for major crops fell over 4%, erasing much of a recent weather-related rally. A benevolent turn in forecasts overnight on Thursday, with longer-term models showing more rain and cooler temperatures, intensified the selling that began after the U.S. Department of Agriculture released what was widely perceived as a negative report for prices on Wednesday.
Hedge funds and other money managers helped spur the selling, said Charlie Sernatinger, head of grain trading at ED&F Man Capital. Corn futures in particular were "crashing and burning all session long," he said.
In Dicamba, Monsanto Sees Familiar Growing Pains -- Market Talk
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16:10 ET - Complaints of crop damage linked to Monsanto's (MON) roll-out of genetically engineered crops resistant to the herbicide dicamba are similar to the company's 1996 introduction of Roundup Ready crops, says Chief Technology Officer Robert Fraley. Increased dicamba use has drawn complaints of damage to nearby crops this summer. Roundup, made from the chemical glyphosate, was similarly blamed in the 1990s for damaging crops in neighboring fields due to improper spraying, until farmers figured out how it worked and how to avoid misfires, Fraley says: "In almost every technology, in that first year, there's kinks that you need to work out." (email@example.com; @jacobbunge)
U.S. Farmers Have a Lot to Gain From China's Flagging Production
A string of agricultural overhauls has set up China to import more grains and other commodities, with significant consequences for global markets.
Over the past three years, China has abolished guaranteed minimum prices for cotton, soybeans, corn and sugar, causing domestic production of those staples to drop. Grain production fell in 2016 for the first time in 13 years, and production of sugar and cotton has fallen by more than a quarter in the past three years.
STORIES OF INTEREST:
As Profit Rises, Cargill Pays Down Debt -- Market Talk
09:55 ET - As Cargill books its biggest full-year profit in eight years, the agriculture giant is using some of the proceeds to pay down debt, after spending $4B over the last two years on new businesses ranging from salmon feed to a new Chinese port. Cargill doesn't typically detail its borrowing, but says in its fiscal 4Q report that it repurchased about $2.1B in long-term debt, which should reduce the company's future interest expense. That could also free up Cargill to help finance future deals, since it doesn't have a publicly traded stock to use as currency for M&A. (firstname.lastname@example.org; @jacobbunge)
Monsanto Fears Weedkiller Blamed Unfairly -- Market Talk
16:08 ET - The herbicide dicamba is catching heat as crop damage complaints pop up across southern US farm states, but Monsanto (MON)--which this year broadly launched soybean and cotton seeds engineered to survive the spray--says farmers and crop scientists may be fingering the wrong culprit in some cases. Weather, disease and environmental conditions can produce symptoms similar to the cupped leaves that are a telltale sign of dicamba damage, says Monsanto CTO Robert Fraley. One tobacco field in North Carolina suspected to have dicamba damage wound up suffering from a calcium deficiency, he says. (email@example.com; @jacobbunge)
Scofflaw Farmers Adding to Crop Damage, Monsanto Says -- Market Talk
16:01 ET - Monsanto (MON) says a range of factors likely at play as a potent herbicide is blamed for growing crop damage across southern US farm states. Farmers themselves are one, says Monsanto Chief Technology Officer Robert Fraley: While it's illegal for farmers to spray older generic versions of the herbicide dicamba onto new soybean and cotton plants engineered to withstand the spray, some farmers seem to be doing it anyway, rather than use a newer version of the spray less likely to drift. "We know the vast majority of farmers are doing the right thing, but it's clear a few bad actors can make the situation worse for everyone," Fraley says. (firstname.lastname@example.org; @jacobbunge)
Livestock Futures Trade Sideways on Price Consolidation
Livestock futures were mixed as traders consolidated recent gains.
Higher-than-expected cattle sales in the cash trade sparked a rally in the futures market on Wednesday. An uptick in prices, first at an online auction and then in follow-up sales, sent futures to the top of their daily trading band.
Cash-market trade was quiet on Thursday, however, with some sales of $1.20 a pound live in Iowa and $1.90 a pound dressed in Nebraska. That left futures traders reluctant to take prices too far from the prior day's close.
(END) Dow Jones Newswires
July 13, 2017 17:35 ET (21:35 GMT)