Ags and Softs - commo PDF

Preview

Summary

Download Ags and Softs - commo PDF

Description

AGS and SOFTS Agricultural or Softs Cargill, Archer Daniels Midland, Bunge, Glencore, Louis Dreyfus, Sucden, Noble, Olam Renewable resource. Seasonality according to crop cycle Production determined by planting, weather, pests. World population should reach 9.5 billion by 2050 => 1 billion more tonnes of grain demand Land and water availability Yields and GM crops CORN : not to be confused with the corn we eat (on the cob, canned, etc.). Corn is maize and is used mainly as a feed for livestock and to produce corn flour, corn starch, corn oil, and corn syrup. Largest cereal crop. Production : 1030 million MT USA 360 millions MT (largest exporter at 49 million or about 20%; previously 50-75%) China 215 millionMT Brazil 95 million MT (2nd at 34 million) EU-27 62 million MT Agentina 40 million MT (3rd largest exporter at 29 million) Ukraine 28 million MT (4th exporter at 20 million) Mexico 25 million MT India 25 million MT Russia 16 million MT Consumption : Mexico is the largest import (16.5 millions MT) , mainly from US USA 318 millions China 240 millions EU 75 millions (2nd largest importer at 16) Brazil 62 millions Mexico 42 millions India 26 millions Egypt 16 million Japan 15 millions (almost no local production) American production controls world prices but Argentina and Brazil have a later planting date, so they can balance American production decisions a few weeks later which moderates the market. Price factors : Planting acreage Weather Diet (seven pounds of corn for one pound of beef) Ethanol Stocks are very low and being rebuilt China no longer an exporter

1

AGS and SOFTS

2

Ethanol : 30% of total US corn goes to ethanol production (14.billion gallons …or 350 million barrels). Requirements for 10% (soon 15%) ethanol in gasoline blending. Result is that US now exports only 33% of world corn vs 64% in 2007 Total ethanol use is 5.5 billion bushels per year as per the law! Futures : Chicago Board of Trade (CME) sous le symbole « C » 65% of market US Cents/bushel 3.49 usd/bushel or about 140 USD/Mt Bushel = 56 lbs = 25 kg Dalian Commodity Exchange 30% Tokyo Grain Exchange, etc.

Wheat: grown for about 12 000 year. Categories: Season: Winter or Spring US Winter planted Sep-Dec , harvested July Hard or Soft: Hard has high protein, soft has high starch Color: red, white, or amber Winter wheat is typically soft. Spring is typically hard. Principally a human food: flour for bread, pasta, noodles Fermentation for alchohol 15-20% is used as animal feed where corn expensive/unavailable The demand for wheat is seemingly unlimited, especially with diet changes and pop growth. Production (740 million MT) EU 152 million tonnes Chine 130 million Inde 98 USA 47 Russia 83 Canada 27 million Australia 22 million Pakistan 25 million Ukraine 27 million Consumption : 740 million EU 129 million China 117 million Inde 100 Russia 44 USA 31 Pakistan 25 Egypt 20

Exports (164 million MT) 29 million (21%) 26 million (14%) 33 million 21 million (15%) 18 million (10%) 16 million (7%)

AGS and SOFTS Turkey Iran

3 18 18

Futures : US cents/bushel 170 USD/Mt or about 4.2 cts/bushel Bushel = 60 lb = 27 kg CBOT (CME) 65% Zhengzhou Commodity Exchange 18% Kansas City BOT 17% Rice: (rough rice): unpolished rice with outer husk still on 480 million tonnes per year Principal food source for half the world’s population Thousands of varieties throughout the world Requires large amounts of water. Typically two harvests per year The world’s first futures market was the Osaka-Dojima Rice market founded in 1697. China and India produce over half of world production (Asia 90%) China, India, Indonesia, and Bangladesh produce 67% of rice Thailand (9), Vietnam(6.3) and India (12) account for almost two-thirds of exports Top Producers China India Indonesia Bangladesh Viet Nam Thailand Philippines Myanmar Brazil Japan US

144 million 108 37 33 28 20 11 12.6 8.0 7.6 75.6

Major consumers China India Indonesia Bangladesh Viet Nam Philippines Myanmar Thailand Japan

142 98 38 35 22 13 11 11 8.5

Importers China Nigeria EU Saudi Indonesia Philippine Ivory Coast Malaysia

Very sensitive to water (irrigation and rainfall).

5.0 2.0 1.8 1.6 1.3 1.2 1.2 1.1

AGS and SOFTS

4

Futures : CBOT(CME) 360 USD/Mt 11.3/hundredweight (CWT) 1 CWT = 51 kg Futures trading is almost non-existent because there is a tiny international market. Most rice is consumed where it is produced. Additionally, there are too many grades. Soy Beans: 330 million tonnes per year US is the largest producer with 107 million tonnes, 1/3 of world supply A third of US production goes to animal feed (cows,hogs, chickens, fish) Soybeans are good source of non-meat protein Used in milks, ice creams, cheeses, soap, cosmetics, plastics, inks Increasing use for Bio-diesel (US, Brazil, Argentina) US(120 million), Brazil (108)Argentina (57), China (14), India (10) and Paraguay (9.2) produce nearly 90% of world soy beans. Exporters: Brazil USA Argentina Paraguay Canada

65 million 61 million 8 million 6 million 6 million

41% 37% 8.5% 5.7%

Importers : China EU Mexico Japan

97 million 14 million 4.3 3.3

60% 13% 4%

Price Factors : Susceptibility to an air-borne fungus (Rust) Easily exchanged for corn in planting decisions Exchanges: US cents/bushel on CME (1000 cents/bushel) 400 USD/Mt Dalian Comm. Exchange : slightly over half of world volume CBOT: just under 50% Tokyo Grain Exchange Cotton : cultivated for past 6000 years Used mainly to make cloth Graded according to Staple : fiber length

AGS and SOFTS

5

Grade : color, brightness, purity Character : strength and uniformity Measured in bales (about 480 pounds or 225 kg) Largest producers are China, India and US: about 60% US is largest exporter at 40% of world trade Production : 120 million bales India 30 million China 25 million USA 21 million Pakistan 9 million Brazil 7.8 Exports about 41 millionbales USA 14.5 million India 4.6 million Australia 4.1 million Brazil 3.8 million Consumption China India Pakistan Turkey Bangladesh Vietnam

39 million 24 million 10.6 million 6.8 million 7.2 million 6.1

Imports 5.3 million 1.6 million 2.4 million 3.4 million 7.3 million 6.5

PRICE Factors: Cotton is very susceptible to drought Competition from synthetic fibers Competition from other crops as an economic alternative GM cotton has been a major factor in supply. India went from importing 0.5 Million MT in 2001 to being the second largest exporter in 2006 and a net exporter of 1.0 million in 2011 Futures Markets: 82 cts/lb Zhengzhou Commodity Exchange: nearly 90% of volume ICE (NYBOT): SUGAR : Glucide produced from either cane or sugar beet Exists in Europe only since 14th century when it was prices at 1 oz gold/30lbs sugar That works about to about 58 $/lb vs 24 cents/lb today

AGS and SOFTS

6

Cane: tropical (India, Brazil, China, Australia) Beet: temperate (Europe, US) 80% of all sugar is from sugar cane.

Production : 171 million tonnes per year Cane : 16 month harvest cycle Brazil : 40 million tonnes (23% of production and 48% of exports) India: 28 million tonnes (18% of production but tiny importer) China : 10.5 million tonnes (10% of production and net importer) Thailand 11 million tonnes Pakistan 6.5 Beet : seasonal EU : USA : Russia:

20 millions tonnes (net importer of 3.2 million) 8 millions tonnes (net importer of about 3.1 million) 6.4 million tonnes (net importer of about 1.7 million)

Consumption : exports/imports = 56 million tonnes per year of world sugar trade India 27 million Mt UE 18.8 million China 16 million Brazil 11.0 million USA 11.3 million Indonesia 6.7 Russia 6 million Exporters : 54 million MT Brazil 30 million or about 48% of world market Thailand 8.6 million or about 17% Australia 4 million or about 7% Guatemala 2.2 Eu 2.5 Mexico 1.6 Importers: China Indonesia USA EU UAE Bangladesh

4.2 4.6 3.4 2.0 2.6 2.9

Sugar is first and foremost a foodstuff. Sugar is highly linked to ethanol (as a motor fuel) USA : 52 billion litres per year (by 2015 as much ethanol as Saudi crude)

AGS and SOFTS

7

This is corn based sugars Brazil : about half of sugar production goes to ethanol Sugar is highly protected though US just eliminated corn ethanol subsidy and import duty Futures: US cents/lb 14 cts/lb or about 310USD/MT in Europe ICE: nearly 90% of market ; 80% of deliveries are from Brazilian cane sugar!!! Euronext: 6% Cocoa : Cocoa is grown almost exclusively within 10 degrees of the Equator Production is highly concentrated in West Africa Ivory Coast, Ghana, Nigeria, Cameroon: 66% Trees are moderately sized (about 12 meters) They take five years to reach maturity and produce at peak for only ten years One pod has about 35 beans. One pound of chocolate requires 400 beans Each tree makes about 2 kg of beans per year (about 2000 beans or 5 lbs chocolate) Two-thirds of cocoa goes to chocolate, one-third to cocoa powder Production : 4.7 million tonnes per year Côte d’Ivoire : 2.0 million Ghana 0.95 million Indonésie 0.29 million Nigeria 0.25 million Cameroun 0.24 million Brazil 0.18 Ecuador 0.27

36% (production reduced by civil war and export bans) 21% 6% 4% 6.2%

Consumption : 4.3 million growing by 3% a year for past 100years Europe 40% (Swiss and Germans eat about 8-9kg per person each year) Netherlands 0.525 14% Germany 0.370 9.8% USA 10.3% Ivory Coast 9.3% Malaysia 8.3% The cocoa market is highly inelastic, illiquid, concentrated and susceptible to political and geographical disruptions by virtue of the concentration in West Africa. 90% is grown on small, private farms. Cocoa is highly susceptible to disease (witches broom, black pod disease) Futures : 1914 USD/MT (vs 2200 last year so one of few markets doing well) ICE just over half of market Euronext : just under half

AGS and SOFTS

8

Palm Oil: Grown mainly +/- 10 degrees from Equator Yield per hectare is 10 times that of soybeans and 6 times rapeseed (colza) Most efficient oil crop in the world 50% of world’s edible oil market is palm oil Production is dominated by Indonesia (53%) and Malaysia (41%) Consumption: Chindia 30% and 37% of imports Principally used as a vegetable oil but more and more as a bio-fuel feedstock 75 % Cooking, margarine, baking fat, creamer 20% bio-diesel and oleo-chemicals Also used in industry: soap, cosmetics, detergents Production: 63 million tonnes Indonesia 36 million tonnes Malaysia 21 million Thailand 2.2 million Colombia 1.3 million Nigeria 0.98 million Consumption: Food India Indonesia China EU Malaysia Pakistan

9.8 million 9.0 million 4.8 million 6.4 million 3.6 million 3.1 million

53% 32% 3.5%

12% 16% 13% 11% 7.6

China, India, EU, and Pakistan account for 50% of imports (with basically 0 production) Half of EU imports go to biodisel!!! Futures: Bursa Malaysia: 2600 Rinngit/mt or USD/MT720USD/Mt also stable prices JADE (Singapore) : USD/Mt COFFEE: Two main grades: Producers: Brazil Vietnam Colombia Indonesia Ethiopia

Arabica 60% of world market Robusta 40% 2.2 million MT 1.3 million 0.81 million 0.56 million 0.26 million

Exports 1.9 million (31%) 1.0 million (24%) 0.52 million (8.2%) 0.44 million (7%) 0.25 million (4%)

AGS and SOFTS

Consumers EU USA Brazil Japan

9

2.7 million 1.4 million 1.2 million 0.4 million

Imports 2.65 million (46%) 1.39 million (24%) 0.4 million (7%)

Global trading market is about 6.3 million MT Largest consumers per capita are Germans, Brazilians, Americans, Japanese Futures: US cents/lb NYBOT (ICE Arabica): about 65% Euronext (Robusta): 33% Tokyo Grain Exchange Rapeseed oil: a vegetable oil also known as canola and colza Rubber: name comes from it’s use as an eraser (to rub out ) Being replaced by synthetic rubber in use and palm oil in planting acreage Livstock: one of the smallest markets by production, trade and volumes Feeder Cattle: stage after calf (600-800 lbs) then fatted up to 1200 lbs Live Cattle: cattle which are ready for slaughtr (1200 lb) 95% of the futures market is for Live Cattle Lean Hogs and Pork Bellies: 41% of all meat consumed worldwide is pork China produces and consumes 45% of world’s pork Slaugthered Hog: Ham 21% Loin 20% Pork Belly 14% (bacon) The major market is CME Lean Hogs. Pork bellies are highly illiquid. Price Factors for Agricultural Commodities: Weather: rain, cold, drought, heat, wind Substitution and diet changes. The richer you are, you more wheat and meat you eat. Anywhere from 4:1 to 50:1 Stocks: security Investors and speculators Elasticity of demand and supply

AGS and SOFTS Natural disasters Crises: concentration of some commodities (e.g cocoa n Ivory Coast) Facteurs de Prix pour les Agricoles : Méteo : pluie, froid, secheresse, chaleur, vent Substitution et changement de régime alimentaire : 4 :1 à 50 :1 grains :viandes en énergie Plus on est riche, plus on mange de la viande

10...