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If you want to look to the future of food production, its important to look at the trends in crop breeding technology, specifically at the countries with the most patent activity. According to research from Thomson Reuters and their “9 Billion Bowls” project, a research piece I encourage everyone to read in full-detail, China is making a bold push to be the world’s breadbasket of the future, perhaps within the next decade. As it stand now the U.S. and China alone represent 68% of all the patent documents associated with crop breeding around the world. From what I understand these two countries are larger than the closet competing country by at least a factor of five. However, it’s notable that while the U.S. has more patent applications over the past 5 years than China, the majority of the U.S. documents are coming from a small collection of private companies, while the Chinese applications are coming from a larger number of academic institutions. Once China’s private industry begins patenting, there is a high likelihood that they will pass the U.S. in the number of crop breeding patent applications produced. Based on the recent filing data, it’s clear that China has taken a a more aggressive interest in crop breeding and is using these innovations to position themselves not only to meet the needs of their own domestic population, but to potentially challenge the U.S. as the “Breadbasket of the World.” This is a terrific bit of research and there’s a lot more interesting data worth digesting. You can see form the information that the Thompson Reuters team has put a lot of time and research into this study and have certainly delivered a quality report. (Source: Thomson Reuters, 9 Billion Bowls)

Corn prices are slightly higher this morning on the heels of a small rebound in wheat and soybeans. There’s really no fresh news to report following the extend weekend, the weather in South America remains mostly benign, the Chinese continue to sit on a glut of corn as their reserve price remains in question, and the trade continues to believe the USDA will soon announce that they see more corn acres being planted here in the U.S. during 2016. From both a spec and technical perspective it seems really hard for me to imagine old-crop prices in the MAR16 contract moving beyond the $3.70 to $3.80 area based on the current circumstances and headlines. Sure I could argue that we will see more of a short-covering rally in the entire commodity sector if crude oil can continue to find its legs and move more aggressively north of $30 per barrel, but I suspect that’s only money sloshing around and does very little to change or alter the overall current bearish fundamentals that are still entrenched in this market. As for new-crop prices, I still argue that the DEC16 contract will continue to find extremely heavy resistance up between the $3.95 to $4.10 area. As a producer who is wanting to reduce more new-crop risk, I simply remain patient! Personally I’m targeting the late-March to early-May time period as our next bullish window of opportunity. A period of time where I suspect many of the current cards on the table are reshuffled and U.S. weather starts to more aggressively move to the forefront… Moral of the story, despite the possibilities of small nearby bounce on increased crude oil optimism and temporary commodity short-covering, I continue to keep hedges place fearing we could still see another round of lower prices within the next 30-days.

Spring Crop Revenue Insurance Guarantees: Remember these prices will update daily during the month of February as the price average is determined.

• Corn $3.87^6 (Avg. close of the DEC16 contract during Feb)
• Soybeans $8.85^4 (Avg. close of the NOV16 contract during Feb)

Soybeans bulls are hoping the trade can somehow gather enough momentum into a wave of bearish fundamentals to overcome the heavy resistance on the charts up between $8.90 and $9.10 per bushel. It’s hard for me to imagine this market breaking-out beyond these levels with the South American crop continuing to advance without any major widespread disruptions. The recent rainfall totals in Argentina have helped production in many key locations, while the Brazilian harvest continuing to advance with more reports circulating of better than expected yields. Traders will be eager this week to see how the Chinese crush margins respond now that we have moved past the week long Lunar New Year holiday. As for U.S. headlines, traders are patiently waiting to see what the USDA has to say late next week at their 2016 Ag Outlook Forum. Early thoughts remain +1 to +2 million more soybean acres being planted in 2016, with an average yield starting out somewhere between 46.5 and 47.5 bushels per acre….neither of which are considered bullish! As both a spec and a producer I clearly […]

Another week, another decline at the gas pump for much of the country. Gasoline prices fell 6.2 cents in the last week, according to GasBuddy.com live data. The national average stood $1.74/gallon yesterday, some -25.6 cents lower than last month and -44.4 cents below last year’s prices. No where in the country has the decline been as large as in the Midwest, where refiners have continued to churn out cheap winter gasoline. In just the last week, average prices in Indiana, Michigan and Ohio fell 14 cents per gallon, while some stations in these states fell over -30 cents per gallon. Over half the states in the country have seen gas prices decline over -20 cents in the last month, while the Great Lakes and West Coast sit atop the list: Indiana, Illinois, Ohio and Michigan saw declines of 41-43 cents, while California, Oregon and Washington saw declines of 36-37 cents. Nationwide, just 13.1% of gas stations are selling over $2 per gallon while over 25% now are selling under $1.50 per gallon. (Source: Gas Buddy) Gas Near $1.00 Per Gallon In Some Parts Of The U.S. – There are at least eight states where some stations are now selling gas for less than $1.25 a gallon, according to GasBuddy.com. The cheapest gas at the moment is at a 7-Eleven in Oklahoma City, which is selling a gallon of regular for $1.11. In fact, more than a dozen other stations in that city have gas for $1.14 or less. Extremely cheap gas can also be found in Texas, Missouri, Ohio, Indiana, Illinois Michigan and Kansas. Nationwide, the average price of a gallon of regular is down to $1.74, the cheapest it’s been since early January 2009. Read more at CNN Money