2024-02-22 11:34

CHICAGO, Feb 22 (Reuters) - Illinois farmer Dan Henebry regrets not selling more of his corn crop last summer, when the Midwest needed rain and prices were high. He is not alone. Farmers across the United States are kicking themselves for putting off corn sales after fields dried up in May and June, fueling expectations for higher prices and smaller harvests. Instead, prices tanked as rains saved the crop. The size and speed of the price collapse stung farmers and left their storage bins stuffed with record amounts of corn. The steepest market downturn in a decade in 2023 has extended into 2024, hurting the U.S. rural economy. Two years of high prices and tight crop supplies spurred by unfavorable global weather and disruption from the Ukraine war have been quickly reversed. Record-large harvests in the United States and Brazil, increased competition for U.S. grain exports, and limited domestic demand led to hefty amounts of corn locked away in storage, pushing U.S. corn prices to their lowest level since November 2020 on Wednesday. Corn is the world's most traded commodity crop and often sets the tone for other crops. Soybeans, too, plummeted to their lowest prices in more than three years in February. Ten farmers, economists and market analysts said U.S. growers miscalculated when they held on to corn rather than booking sales. The "store and ignore" strategy of waiting for higher prices has not paid off, leaving some farmers cutting back purchases of pricey equipment and planting less corn. The interviews also demonstrate the tricky decisions farmers face when determining when to sell in the face of potential crop losses. Corn futures prices that approached $6.30 a bushel in June have since tumbled to $4.10, after U.S. farmers ultimately produced record crop yields. "I wish I sold a lot more," Henebry said. U.S. growers held a whopping 7.83 billion bushels of corn in storage bins on their farms as of Dec. 1, the most ever for that date and up 16% from a nine-year low in December 2022, U.S. government data show. Globally, leftover inventories are projected to reach a five-year high by September after accounting for all the corn used to feed livestock, make biofuels and other purposes. Henebry said he still has about 40% of his 2023 harvest in storage, including 30,000 bushels on his farm in central Illinois. He is paying 3 to 4 cents per bushel a month to keep another 30,000 bushels at a local grain elevator. In a normal year, he would not have any still stored there, he said. Before prices plunged last summer, Henebry said he sold some corn for $5.50 to $5.70 per bushel and then for as much as $6.21 per bushel delivered to the grain elevator. He held off on further sales because he was counting on poor weather to reduce production and boost prices. Prices tumbled, though, and Henebry said he sold corn in December for $4.60 per bushel. He wishes he would have unloaded even more at that price. Prices will come under renewed pressure as farmers do sell the grain they have in storage, analysts said. "Any sort of little rally, there's going to be a lot of corn sold," said Henebry. 'I'LL JUST GIVE UP' Fred Huddlestun, a farmer in Yale, Illinois, said he still had his entire 2023 corn harvest in storage last month: about 39,000 bushels at an elevator and 25,000 bushels at home. Prices never reached targets he set to make sales last year, even as he lowered them. Huddlestun could have earned roughly $360,000 if he had struck deals to sell 64,000 bushels just after Easter; $382,000 around Father's Day in June; and $307,000 on Halloween, based on Chicago Board of Trade corn futures that represented last autumn's crop. At current prices, his grain is worth about $263,000. Futures and cash prices often differ by a few cents. "I kept thinking the market would go up," Huddlestun said. "I'll just give up eventually and start selling if nothing happens." Huddlestun said he should have sold around $5.50 a bushel. Though all operations are different, breakeven prices for corn growers in central Illinois were about $5.27 a bushel in 2023, including costs for land and other expenses, according to University of Illinois estimates. Farmers have the space to squirrel away crops after increasing their storage capacity by 24% over the last two decades to 13.6 billion bushels. Storing grain gives farmers more control over when and how they sell, to avoid prices that are typically low at harvest time and to best take advantage of spikes in futures. At grain elevators and other commercial handlers, off-farm storage capacity has increased by 40% to 11.9 billion bushels over the past 20 years, according to U.S. government data. High interest rates make storage more costly because farmers' crops are tied up in bins rather than sold to reduce debt, economists said. In southern Illinois, the second biggest corn-producing state, farmers could actually lose up to $160 an acre growing corn this year, based on corn prices and the cost of production, University of Illinois economists said in a January report. Two years ago, profits reached about $340 an acre. Such expected losses are rippling through rural America. Net farm income in 2024 is projected to suffer the largest year-to-year dollar decrease , opens new tab in history, the American Farm Bureau Federation, an industry group, said in a report this month. Deere & Co (DE.N) , opens new tab, the world's largest farm equipment maker, expects sales of large agricultural equipment to decline 20% this year, due to lower commodity prices and high interest rates. 'PLENTY OF CORN' In Wamego, Kansas, Glenn Brunkow, a fifth-generation crop and livestock farmer, plans to delay upgrades to machinery and may try to repair equipment himself, rather than paying a dealership. "We're tightening expenses as much as we can," he said. "We're trying to limp through putting off some expansion with the livestock, just trying to limp by." Early forecasts show U.S. farmers are likely to cut back on corn planting and favor soybeans in 2024. They may struggle to turn a profit with either crop. Brunkow said he plans to forgo corn planting entirely and grow some sorghum, which requires less fertilizer and has less expensive seeds than corn. Sorghum can be used to make ethanol, feed livestock or be exported to China to make baiju liquor. Years ago, Brunkow gave up on growing sorghum because it produces lower yields and is difficult to dry at harvest time. Now, "the economics just are better," he said. "You're going to lose less money." Analysts do not expect a major bump in demand to draw down corn stockpiles. U.S. exports of agricultural and related products fell 10% by value in 2023 to a three-year low, as plentiful supplies from Brazil and elsewhere challenged U.S. export sales. Demand from the U.S. meat industry, which feeds corn to livestock, is limited as pig farmers face lackluster pork demand while cattle ranchers slashed their herds due to drought in the Great Plains. Biofuel demand, which typically accounts for about one-third of U.S. corn production, also worries Rod Weinzierl, executive director of the Illinois Corn Growers Association, as Americans buy more electric vehicles. "This year every fork in the road has been bearish," said Matt Wiegand, commodity broker for risk management firm FuturesOne in Nebraska. https://www.reuters.com/markets/commodities/us-farmers-face-harsh-economics-with-record-corn-supplies-silos-2024-02-22/

2024-02-22 11:29

HOLIC, Slovakia, Feb 22 (Reuters) - Farmers from the Czech Republic, Slovakia and other central European countries protested along Czech borders on Thursday, blocking some crossings as they demanded less bureaucracy and changes to EU policy. Farmers across Europe have been stepping up protests this year, including in Poland, France, Germany, Spain and Italy, complaining of low prices and high costs, cheap imports and constraints from the EU's Green Deal climate change initiative. Farmers blocked the Hodonin-Holic crossing on the Czech-Slovak border as hundreds of tractors, many draped with Czech or Slovak flags, filled the highway. Hungarian farmers were also seen among the crowds gathered. Czech and Polish farmers also partially blocked a crossing in the northeast corner of the Czech Republic, where dozens of tractors were parked along the road, Czech news agency CTK reported. Other Czech border points, including into Germany, were set to see protests. The Czech Agrarian Chamber said 3,000 tractors were taking part in protests just in the Czech Republic. "The fact that today farmers are protesting throughout the European Union is clear evidence that it is essential to address the redefinition of the terms of the EU's Common Agricultural Policy (CAP)," the Chamber said in a joint statement with other countries' main farmer organisations. "The primary task of agriculture must remain to ensure food security, producing quality and safe food, while maintaining the economic viability of farmers." Slovak farmers also drove tractors through the Slovak capital Bratislava. The protests at the borders on Thursday were initiated by Czech Agrarian Chamber that had called on others in central Europe to join. FARMERS SAY THEY FACE UNFAIR COMPETITION Amid protests elsewhere in Europe, Kyiv call on the European Commission to take robust action after demonstrating Polish farmers blockaded the border on Tuesday and opened railway carriages to let grain spill out. Central Europe's farmers are angry over what they call unfair competition from abroad, particularly Ukraine, after an EU decision in 2022 to waive duties on Ukrainian food imports. "We call on the European Commission to change the current set-up of trade cooperation with Ukraine and to prepare a proposal for change in line with the above proposals and the priority protection of its own farmers," the Czech Agrarian Chamber's statement with others said. Farmers have said markets are facing distortions and low purchase prices coming from surpluses amid cheap imports. They also are unhappy with growing paperwork that they face. "We are not protesting against the European Union, we are protesting against unfair decisions of the European Commission," Andrej Gajdos, a vice-chairman of the Slovak Agriculture and Food Chamber (SPPK), told protesters gathered at the Czech-Slovak border. "We are farmers, we want to work in the field... we don't want to fill out paperwork and sit at the computer." https://www.reuters.com/world/europe/czech-slovak-farmers-block-borders-protest-2024-02-22/

2024-02-22 11:27

Feb 22 (Reuters) - U.S. liquefied natural gas (LNG) company Cheniere Energy (LNG.N) , opens new tab posted a 38.5% fall in its full-year LNG revenue on Thursday, hurt by a fall in natgas prices. Average U.S. natural gas prices fell nearly 40% in 2023, dragged by record production, ample inventories in storage and relatively mild weather conditions, pressuring prices for LNG firms such as Cheniere. The company said LNG volumes loaded for the reported year rose to 2,299 trillion British thermal unit (TBtu), compared with 2,295 TBtu last year. It reported LNG revenues of $19.56 billion for the full year ended Dec. 31, compared with $31.8 billion in 2022. https://www.reuters.com/business/energy/cheniere-energys-annual-lng-revenue-falls-lower-natgas-prices-2024-02-22/

2024-02-22 11:19

JAKARTA, Feb 22 (Reuters) - Indonesia was struck by a tornado of a scale previously unrecorded in the country that injured at least 33 people and damaged buildings, government officials said. After the violent wind swept the town of Sumedang in West Java province on Wednesday, a climatologist at government research body BRIN Erma Yulihastin, said the agency would "reconstruct and investigate the tornado". In a post on social media app X, formerly known as Twitter, she said it was similar to the kind of violent winds that often occur in the northern hemisphere. Until now, only smaller tornadoes, known as "angin puting beliung" have been recorded in Indonesia. Indonesia's disaster mitigation agency said the injured people suffered slight injuries. In a video seen by Reuters, the winds, pirouetting in the sky, sucked roofs of a factory. In another video broadcast by news channel Kompas TV, trees shook violently in the town's main street. A third video showed the front panel of a convenience store collapsing and residents screaming. Kay Tiara, a Sumedang resident, told Reuters she had felt panic as the winds approached. "My father was sitting in our terrace and suddenly he saw plastic just flying and twisting. Not long after that, the strong wind came near my house," Kay said. "The roof of my house immediately flew away. My family and I took cover inside my house," she added. https://www.reuters.com/world/asia-pacific/indonesia-investigates-after-first-large-scale-tornado-strikes-2024-02-22/

2024-02-22 11:12

MUMBAI, Feb 22 (Reuters) - The Indian rupee rose on Thursday to a more than five month closing high, aided by an uptick in its Asian peers and on the back of dollar inflows into the domestic share and bond markets. The rupee settled at 82.84 to the U.S. dollar, its highest closing level since Sept. 4 after having logged its biggest single-session gain in nearly two months. Throughout the day, the rupee traded in a range of 82.84 and 82.95, after closing at 82.97 in the previous session. It rose to a three-week high during the day. The brief outages on various London Stock Exchange Group (LSEG) news and currency trading platforms globally did not have a material impact on the rupee, traders said. "Overall, there is a higher potential for the rupee to rise above 82.80, given the robust foreign inflows. But the RBI's (central bank) firm grip on the currency could limit any further upside," said Amit Pabari, managing director at FX advisory firm CR Forex. "The stability of the rupee is also aiding confidence among investors for a favourable carry set up." Asian currencies were mostly higher, while the dollar index extended its decline from Wednesday to hit a three-week low. The dollar struggled despite a further decline in the odds of a Federal Reserve rate cut in March or May after the minutes of the central bank's last policy meeting indicated it needs to be sure that inflationary risks receded before cutting rates. Meanwhile, the dollar/rupee forward premiums dipped, with the one-year implied yield falling to the lowest in two months. Traders said the RBI's upcoming $5 billion swap maturity was probably leading to a receiving interest, pushing forward premiums lower. The central bank's sell dollars/buy rupees swap matures on March 11. (This story has been corrected to say that rupee ended at a more than five-month closing high, in the headline and paragraph 1) https://www.reuters.com/markets/currencies/rupee-over-5-month-closing-high-tracking-asian-peers-foreign-fund-inflows-2024-02-22/

2024-02-22 11:03

A look at the day ahead in U.S. and global markets from Mike Dolan Chip giant Nvidia's uncanny ability to beat even a sky-high bar of earnings expectations and its claim of a "tipping point" in generative artificial intelligence has catapulted stocks in Japan, Europe to record highs and Wall St looks set to follow. Shares in the AI darling (NVDA.O) , opens new tab soared 12% premarket after it forecast a threefold surge in quarterly revenue that handily beat estimates and sent chip stocks surging around the planet. Nvidia said it expects an eye-popping first-quarter revenue growth of 233%, way ahead of even Wall Street's lofty expectations of 208% growth, and after it raked in some $22 billion of revenue in the quarter just passed. After more than trebling over the past year, the latest stock surge is set to load back another $130 billion in market value onto the $1.7 trillion behemoth and likely reclaim its ranking as America's third most valuable company later on Thursday. "Accelerated computing and generative AI have hit the tipping point," Nvidia chief executive Jensen Huang was reported as saying after results were released after the bell on Wednesday and he added the firm can barely keep up with demand. Unsurprisingly, the boom has lifted Nasdaq futures 2% before today's open and after a dour session on Wednesday S&P500 are up over 1% too. But records went off like a Christmas tree around the world through the night as the AI chip frenzy was enough to send Japan's Nikkei (.N225) , opens new tab leaping to new all-time highs at last - finally surpassing previous peaks set at the height of Japan's property bubble in 1990. Even Europe's STOXX 600 (.STOXX) , opens new tab soared almost 1% to hit a new record - beating previous highs set in January 2022 - with its regional chipmakers leading the charge too. Germany's DAX (.GDAXI) , opens new tab, France's (.FCHI) , opens new tab and Amsterdam's (.AEX) , opens new tab all scaled new peaks. And China's tentative stock market recovery (.CSI300) , opens new tab continued for a fourth consecutive session post-holidays despite ongoing angst about the state of the economy there. The AI buzz around the world and rocketing stock values stand in contrast to the darker mood in interest rate markets - where the Federal Reserve and other central banks appear to be stalling on interest rate cuts in the first half of this year. The bulk of Fed policymakers were concerned about the risks of cutting interest rates too soon, with broad uncertainty about how long borrowing costs should remain at their current level, according to the minutes of the Fed's Jan. 30-31 meeting released late on Wednesday. Even though the Fed minutes did indicate that discussions about a slowing of its balance sheet rundown would start as soon as next month, bond markets were under the cosh. Hit also by poor demand at Wednesday's 20-year bond auction and year-on-year crude oil price gains at their highest since October, Treasury yields nudged higher on Thursday. Full-year Fed rate cut expectations have now been scaled back to less than 90 basis points, with futures markets not fully pricing the first quarter-point cut until July. Despite that, the dollar index (.DXY) , opens new tab fell back to the lowest level in almost three weeks - with the euro leading the way higher after surprisingly upbeat early February business activity readings for the euro zone. The downturn in euro zone business activity eased this month as the dominant services sector broke a six-month streak of contraction, offsetting a deterioration in manufacturing, HCOB's composite S&P Global PMI survey showed. The index rose to 48.9 this month from January's 47.9, ahead of expectations in a Reuters poll for 48.5. Even though that marked its ninth month below the 50 level separating growth from contraction, the services PMI jumped to 50.0, far exceeding forecasts. U.S. equivalent survey readings and weekly jobless claims numbers are due out later alongside a packed diary of senior Fed speakers and another heavy corporate earnings schedule. Key diary items that may provide direction to U.S. markets later on Thursday: * U.S. flash Feb business surveys from S&P Global, weekly jobless claims, Jan existing home sales. Canada Dec retail sales * Federal Reserve Vice Chair Philip Jefferson, Fed Board Governor Lisa Cook, Fed Board Governor Christopher Waller, Philadelphia Fed President Patrick Harker, Minneapolis Fed chief Neel Kashkari all speak * U.S. corp earnings: Intuit, Booking, Coterra Energy, PG&E, Moderna, Edison, Insulet, Ameren, EOG, Live Nation Entertainment, VICI Properties, Copart, Pioneer Natural Resources, Newmont, Dominion Energy, LKQ, Quanta Services, Builders FirstSource, Iron Mountain, Teleflex, Pool, Keurig Dr Pepper, Entergy * Informal European Union finance ministers meeting in Brussels * U.S. Treasury auctions 30-year inflation-protected bonds, 4-week bills https://www.reuters.com/markets/us/global-markets-view-usa-2024-02-22/