Morning Commentary

Dec corn up ½ at $3.6525

Nov beans down 2 ¾ at $8.5225

The DOW is down

USD is stronger

Crude oil up $.06 at $72.18

Good morning,

Corn traders are eager to see today’s USDA quarterly stocks estimate. The big question mark once again is “feed and residual”. Bulls argue the recent feed and residual numbers are tough to swallow in light of the increasing animal numbers. Keep in mind, cattle, hogs and broiler numbers have all been higher the past three quarters while feed and residual estimates lower, this has left many bulls scratching their head. Also worth considering is the fact we have seen extremely large late-inning adjustments by the USDA in each of the past three years.

Soybean traders are wanting to see if the USDA makes any adjustment to last year’s crop. Most inside the trade see demand as somewhat known with only perhaps a couple of small adjustments. If there’s any particular surprise, it would most likely come as an adjustment to last years crop.

Brazil, the world’s No. 1 soy exporter, is expected to import around 1 million tonnes of the oilseed in coming months from its largest global competitor, the United States, as local supplies dwindle, according to Sao Paulo-based grain trader Agribrasil. It would be the first time that the South American nation, an agricultural powerhouse, needs to import large volumes of soybeans from the United States – a result of massive exports by Brazilian soy producers to China in recent months after the Asian nation slapped a 25 percent import tariff on U.S. beans. (Source: UkrAgro)

Imports of fresh seafood into the U.S. currently make up more than 80% of our consumption and now aquaculture accounts for more than 50% of that number. Traditionally these fish farms consist of open-ocean cages that corral fish in suspended pens or simple fish ponds. Unfortunately, these operations are stuck dealing with waste flow as well as pathogens and parasites that can infect the fish. Local governments are becoming more impatient with fish affluents showing up in local waterways along with veterinary medicines used to keep disease away. As consumer trends shift to a clean, safe, traceable food supply as well as to being sustainable, the door opens to innovations from indoor fish farming. Making indoors more viable than outdoors is the use of a recirculating aquaculture system or RAS. It operates much like an aquarium at home and will isolate the fish from the environment and remove most of the waste from the water using RAS. I’m told that currently indoor RAS farms makeup only a tiny fraction of the global market and are considerably smaller than an impressive new $500 million project by Norway-based firm, Nordic Aquafarms . The firm plans to set up shop in Maine, with one of the world’s largest aquaculture tanks. In terms of production, Blue Ridge Aquaculture—the world’s largest RAS tilapia farm, located in Virginia—produces less than 10 percent of the quantity of fish Nordic expects to produce in Maine. I’m told recirculating technology has existed in some form since the 1970s, but has evolved enough in recent years that the Monterey Bay Aquarium’s Seafood Watch now ranks RAS-farmed fish as one of the most sustainable seafood choices available. Indoor fish farming is not without its environmental issues though as water supplies will be crucial in the success based on local capacity, even with RAS’s recycling more than 90% of the tank water. I like the opportunities indoor farming presents as guys are looking for alternative revenue sources. Something to consider. (Source:Scientific America, Wiki)


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