Agrimoney LIVE as it happens - day one conference diary
8.45am The conference has not kicked off proper, and already Agrimoney LIVE has a (minor) scoop – that one of the major speakers used to be a motorbiking fiend, and indeed rode a Honda around the UK in 1981, reaching Land's End.He (it is a he, and not a UK national) still has a moped.Which speaker? Guesses (and other comments) to
11.06am India, Africa trump ChinaIs China really such a big, and positive, theme for commodities and agriculture?Many observers seem to think so. But Erik Norland, senior economist at CME Group, takes a more jaundiced view."A further slowdown in the Chinese economist will likely negatively impact commodity prices, including iron ore, of which China consumers two thirds of the world supply," he says."This in turn could put downward pressure on the economics of commodity-producing nations like Australia."In ags, the zeitgeist is "no longer going to be about China."India looks very interesting. And Africa is going to huge population growth."
11: 37am 'Scary sugar short'Agricultural commodities are a boon for momentum traders, says Fiona Boal, director, commodities at Fulcrum Asset Management.This is because of the lag between markets signalling a supply imbalance, and producers' being able to respond by raising or lowering output."It needs time for higher prices to work back to production," or for lower prices to turn the supply taps down, Ms Boal says."This makes agricultural markets are particularly well suited to momentum strategies."The "scary" shorting for instance, in sugar, prices of which have tumbled on expectations of a potential return to a production surplus ahead, has produced "positive" results, she says.12:18 Weather outlookLots of interesting snippets from Kyle Tapley, of MDA Weather Services.On El Nino, it looks like if one does develop this year, it will be a weak one, and will "probably come too late to have a big impact on northern hemisphere growing conditions", he says.That is not necessarily a positive for northern hemisphere farmers, given that El Nino gives a 4.2% boost to US corn yields, compared with trend, and a 3.3% lift to soybean yields, on MDA estimates. (It is La Nina which is the danger to the Corn Belt.)Indeed, the US looks set this summer for "widespread above-normal temperatures that could lead to heat stress", with dryness looking an issue for the southern Plains and southern Midwest.…but not that much of an issue. MDA sees the US corn yield coming in at a very respectable 170.8 bushels per acres this year, and the soybean yield at 49.0 bushels per acre.Where Mr Tapley sees a bigger threat is to the Black Sea, where dry conditions in the summer may "stress corn and sunflowers", but likely come too late to affect wheat potential.In Europe too, "dry weather this summer in Spain, Romania, and Bulgaria may stress corn and sunflowers", with – importantly – France, the bloc's most important corn grower, being mentioned in dispatches too.13.55 'Fake' beef strides aheadSynthetic proteins are a bigger threat to the meat industry than the growing popularity of vegan diets.According to Marc Sadler from the World Bank, the main issue with synthetic proteins has been their texture."This has always been the issue with meat substitutes, as 60-70% of the experience of eating is to do with texture."Some companies are breaking through - in their blind tastings it has been impossible to tell the difference between real and synthetic meat."14.30 'Spend more on tech'More money needs to be spend on developing artificial intelligence in agriculture, said Arnaud Petit, director commodities and trade at farmer co-operative body Copa-Cogeca.Speaking at a session at Agrimoney LIVE he said farmers already had technology which could tell them how much fertiliser to apply or where to apply pesticides, but that they needed something which connected all of these and provided interlinked advice.He also talked of big losses in winter grains in northern Europe (Scandinavia) – maybe 20%. Copa Cogeca will produce quarterly estimates in a few weeks' time....MOREAgrimoney LIVE as it happens - day two conference diary09:00 What to make of Glencore approach to Bunge?For some reason, big news in ag always breaks when Agrimoney is having a conference.This time, it is Glencore's revelation that its part-owned ag division has made an "informal approach" to trading giant Bunge. (What made it informal? Were the Glencore suitors not wearing ties?)To one senior delegate at Agrimoney LIVE, this looks like the latest episode in the consolidation wave that started in seeds and chemicals, with the rash of tie-ups with DuPont-Dow, ChemChina-Syngenta, Bayer-Monsanto and BASF, um…And could it be a sign that the ag sector is on the up again?"It looks a sign that sector valuations are attractive, if there is all this consolidation going on," the delegate says, flagging the dent to profits in sector from the decline in crop prices.There is more on sector M&A scheduled in the Agrimoney LIVE programme. Stay tuned....