NORTON: Genetically modified foods in the market’s eye

CRESTWOOD, Ky. - A couple of stories surrounding genetically modified foods and ingredients have received the market’s attention recently. First, the U.S. Congress passed legislation that would mandate a standard labeling requirement for all states (removing any state-level legislation already in place, such as Vermont). In this legislation, three options for disclosing the presence of GMO ingredients are viable: text stating the presence of those ingredients, a symbol, or a digital QR code. The second big genetically modified story came out of Oregon, where U.S. Department of Agriculture officials discovered a field with an unapproved wheat plant from Monsanto being grown. This has led to an investigation, but also the suspension of exports to some Asian countries that rely on U.S. wheat from the Pacific Northwest.
Wheat
Wheat markets have hit new lows yet again. The continuation of good harvest progress and commencement of spring harvest of a good crop is keeping pressure on the markets. Additionally, corn prices have marched to their lowest level since 2014. Winter wheat harvest is nearly complete in the U.S., with 89 percent of the crop complete, compared to 83 percent two weeks ago. And spring wheat harvest has also begun, with just 10 percent complete, compared to 9 percent for the five-year average. U.S. spring wheat conditions were unchanged by USDA from two weeks ago with 68 percent rated good to excellent.
Durum
Durum prices have been low for a long time, yet the market pushed down even lower last week. Large supplies, pressure from wheat continuing to new lows and good growing conditions have all kept pressure on the market. The North Dakota durum crop is progressing on schedule, and conditions of the durum crop were unchanged from two weeks ago, with 87 percent rated good to excellent.
Canola
The canola market saw some modest strength, but support was not coming from the Canadian outlook, as good growing conditions continue to raise production expectations. Global factors are the main driver of higher prices, as weather issues in Europe have reduced rapeseed forecasts to what would be the lowest level since 2012 (the European Union Commission lowered its estimate to 20.5 million metric tons from 20.8 million metric tons, previously) and Chinese output is expected to be down. But, prices fell last crop.
In the U.S., the soybean crop expectation continues to grow, with FCStone projecting 2016 production at 4.054 billion bushels and a 48.8-bushel-per-acre yield.
USDA continues to show a good crop with weekly conditions reported at 72 percent good to excellent, up from 71 percent two weeks ago. This rating is just below the record yield year of 2014. Soybean oil prices in Chicago ticked below 30 cents per pound for December futures before ticking higher. This is the December 2016 contract’s lowest point since January. In Malaysia, palm oil markets have been a little more exciting, with a return of demand supporting prices.
Peas and lentils
A recent review of prices for growers of peas and lentils for the 2015 to ’16 growing season provides some insight into recent trends. Green pea prices for growers dipped seven percent from the three-year average of $338.67 (Canadian) per metric ton, compared to $362.56 (Canadian), while large yellow pea values were actually higher by 32 percent at $426.40 (Canadian) per metric ton compared to $323.58 (Canadian) for the three-year average.
Lentil varieties were firmer across the board. Canadian No. 2 red lentils were 35 percent above the three-year average, for example. The strength in lentils is no surprise, given demand growth in North America and globally.
Mustard
Mustard prices for growers in 2015 to ’16 jumped 21 percent above the three-year average at $49.65 (Canadian) per hundredweight, compared to $41.01 (Canadian).
Barley
Barley harvest is getting started in the U.S. USDA showed farmers have already completed 11 percent of the harvest, with significant progress in North Dakota and Minnesota. Crop conditions are down modestly at 72 percent good to excellent compared to two weeks ago at 73 percent good to excellent, but ahead of 68 percent last year.