Maize getting cheaper across the Ocean

| Foreign Markets |

The latest news from Chicago exchange is that maize is the cheapest in the last three years. At the end of October, the price fell below the technical support level at 177 USD per tonne.

A new low

The drop in prices results from this year’s plentiful crops of maize in the USA. The Department of Agriculture has published information that this year sweetcorn was sown on 95.3 million acres, which are expected to bring 13.99 billion bushels during autumn harvest. The figure is 2% higher than the previous estimation of 13.8 billion bushels. Therefore, this season might bring record crops. The previous record, from 2009, was 13.1 billion bushels.

Maize getting cheaper across the OceanThe end of trouble with syrup?

A popular sweetener in the food manufacturing sector, glucose-fructose syrup, is produced from maize. The syrup was popularized in the USA in the 1970′, mainly by corporations manufacturing sweet carbonated beverages. However, the consumption of the syrup has fallen by 16% in the last 5 years, while sugar consumption rose by 0,7%. Such trend followed a campaign against obesity, which is linked to consumption of fructose, and a fall in sugar prices. This year’s harvest might help out syrup manufacturers. However, potential consumers also have the option to buy equally cheap sucrose, thus they are likely to try and negotiate prices down.

Good news for breeders

The forecast plentiful harvest will mean that the price of corn used as fodder will also decrease. Consequently, the cost of breeding cows and pigs is set to fall, bringing cheaper meat and making it more available and affordable. A similar situation concerns dairy manufacturers, who will benefit from using cheaper maize fodder for dairy cows.

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Corn on the rise

| Foreign Markets |

The increasing popularity of sweetcorn in Poland has brought about a growth of the acreage of farmland where the plant is cultivated. This year, the area on which sweetcorn is cultivated reached 600,000 hectares, or 13% more than in the previous year.

Plentiful harvest, stable purchasing prices and demand from fodder, alcohol and biofuel production industries encourage more and more agricultural producers to invest in corn. According to expert forecast, this year 2.5 million tonnes of the resource will be used for forage manufacturing (compared to 2.2 million tonnes in 2012), while other sectors will consume c. 670,000 tonnes (420,000 tonnes in 2012).

 

The record-breaking popularity of sweetcorn in Poland is a part of a global trend. International Grains Council expects 943 million tonnes of the crop to be harvested globally in 2013/2014 season, which means 9% more than in 2012. The total EU corn harvest is estimated at 64 million tonnes. The figure is 11% higher than in 2012. The growth stems from improvements in planning and good weather conditions.

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Plants in focus

| Prospects & Investment |

German scientists are developing an innovative device which will monitor the growth of plants based on observation of the processes happening during the cultivation.

 

Innovation from Magdeburg

The invention created by scientists working at Fraunhofer Institute in Magdeburg is meant to assist farmers in controlling the cultivation of various plants, in particular sweetcorn and grapes grown on large plantations. Observation of cultivated organisms will be made not only via aerial photos, but also by looking inside the plants.

The mechanism

German scientists have applied hyperspectral imaging to taking the measurements. The technology has been used in forensic science, medical emergency care and meteorology. Thanks to the possibility of gathering and processing information about particular plants, the device is capable of providing precise information concerning their chemical makeup. Raw data is forwarded to the lab, where it is processed and interpreted.

 

Potential benefits

The device will suggest to the farmers which nutrients the plant requires in a given climate and soil. This will make it easier to take decisions concerning the profitability of sowing various crops in particular places. Thanks to hyperspectral imaging, it will also be possible to detect diseases in plants, which initiate immunological mechanisms right after the infection, but the reaction remains invisible to the naked eye for some time.

Future of farming depends on modernization

Following the interest of EU authorities, the invention of Magdeburg scientists is likely to influence the daily work of European farmers in the foreseeable future. The possibility of “cooperating” with cultivated crops is a huge leap forward in the pursuit of modernization of EU agriculture and making it more competitive.

 

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Ups and downs of sweet corn

| Foreign Markets |

The consequences of this year's weather conditions will be felt by sweet corn producers in Poland and other countries. However, the variations in yield will be mainly dependent on the geographical location of the farm. The situation in the South of Poland is fundamentally different from that in Zachodniopomorskie or Pomorskie voivodeships.

Poorer harvest in Poland…

According to Polish Association of Cereal Manufacturers (PZPRZ), about 4-4.5 million tonnes of sweet corn were harvested last year. This year's harvest is forecast to be smaller by 1 million tonnes. The fall has resulted from unfavorable weather conditions, with a very long winter this year. The issue concerns mainly the centrally-located regions (Mazowieckie, Łódzkie, Lubelskie, Świętokrzyskie voivodeships), but farmers in the South of Poland have fewer reasons to worry, as the vegetation period is longer there, which influences the volume of the yield favorably.

Ups and downs of sweet corn/fot. photopin.com…but not shortage of corn in EU.

German experts estimate that in the whole EU (including Croatia), as many as 67 million tonnes of sweetcorn will be harvested, that is 8 million tonnes more than in the previous year. Forecast of a record-high harvest refer to Romania, where almost 11 million tonnes will be picked, or nearly double as much as in the previous year. Similar growth is expected in Hungary, where the harvest is to reach 8.3 million tonnes (as compared to 4.7 m in 2012). A drop is forecast in France and Italy, owing to poor weather conditions. Yield is forecast at 14.8 million tonnes (2012 – 15.6 m) and 8 million tonnes (2012 – 8.2 m) respectively.

Prices are falling

The influence of weather conditions on crop efficiency and the length of the vegetation period has also made an impact on the purchase prices of sweetcorn: c. 830 PLN/ton in the North and c. 710 PLN/ton in the North. The average purchase price quoted on MATIF Exchange is less than 720 PLN/ton, while at the same time in 2012, the average purchase price of corn was over 1000 PLN/ton. In the EU, in July the average purchase price per ton was c. 210 EUR (in 2012: c. 270 EUR/t), and globally – 290 USD/t.

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The future of fertilizers market

| Foreign Markets |

The key to success in the fertilizers business is vigilant monitoring of local and global market trends. We have recently heard some information from various parts of the world that are bound to have a major influence on the prices of fertilizes in 2013/2014 season.

On the one hand, news from the Far East will certainly shape the situation in the business. It has been announced that exports of urea manufactured in China reached 7.2 million tonnes in the period from July 2012 to February 2013. In the previous “export window”, this figure reached only 3 million tonnes. This factor ought to be taken into consideration, especially that the next export window will be closed this summer. Another important element of the pricing situation is the lowering of Chinese exports duties, which will fall to 2% as of June 1st 2013. This rate will be in place until November 1st 2013, when the duties will rise to 77%.

The second key factor is the news about increasing output capacities in Algeria, Egypt and Russia. Those markets function in close proximity to EU, which means that developments in such countries always have an impact on the open European market.

The future of fertilizers market/fot. photopin.comCurrent situation in Ukraine is the third issue worth looking into. Wheat harvest is expected to reach a record high in 2013. US Department of Agriculture forecasts the Ukrainian wheat crops to reach 22.6 million tonnes, which is considerably more than 15.8 million tonnes in 2012. The harvest might be the highest in 20 years! What is more, there were no major losses after winter season, and the acreage of sowing increased by 20%. Undoubtedly, this will fuel growth of wheat exports. UkrAgroConsult, a company specializing in analysis of the Ukrainian market, forecasts a harvest of 20.23 million tonnes, whereas ProAgro – 19.89 million tonnes.

Consequently, we should also look into the sweetcorn production capacity in Ukraine. The Ukrainian manufacturers of corn have recently invested in premium imported seeds, which are a hybrid quality. Such positive news from our Easter neighbor will surely help Ukraine’s position on the international agricultural market, especially when it comes to the exportation of sweetcorn.

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