Posted on October, 25, 2018 at 10:55 am
KANSAS CITY, MISSOURI, U.S. — Prices for organic food-grade grain and soybeans in the August-September period declined from June-July, with wheat prices also down from a year ago but corn and soybeans above year-ago levels, according to Mercaris, the organic and non-GMO trading platform and market information company.
Further, in its 2018 Organic and Non-GMO Acreage Report, Mercaris said growth in organic corn and wheat acreage did not keep pace with growth in the number of organic farm operations certified by the U.S. Department of Agriculture. Soybean acreage, however, showed “robust” expansion in 2018. The USDA will not issue data on organic acreage in 2018.
Food-grain organic prices for hard red spring, hard red winter and soft red winter wheat all were down from June-July, April-May and a year ago.
“Organic hard red spring wheat prices increased slightly at the end of September, but not enough to bring an end to its generally bearish trend,” said Ryan Koory, senior economist at Mercaris.
Prices moved steadily lower since the end of the second quarter to $16.42 per bushel for the August-September period and were about $3 per bushel below the year-ago level.
“Current expectations are for significantly improved (spring wheat) yields this year,” Koory said. “However, Mercaris looks for harvested area to expand only 1% year over year.
“Organic hard red winter wheat prices have also taken on a bearish tone after a strong start to the third quarter. September saw the delivered price for organic hard red winter wheat decline to its lowest level since October 2017.”
Prices for organic food-grade soft red winter wheat averaged $9.66 per bushel in August-September, down 35¢ from June-July, down $1.26 from April-May and down 59¢ from a year ago.
Prices for organic food-grade durum were not quoted by Mercaris because trading was slow and volume was below the quotable level. Durum was quoted at $16.78 per bushel in July-August and at $9.71 per bushel a year ago.
While food-grade organic corn and soybean prices also declined from the prior two-month period, both were above year-ago levels.
“Organic corn prices pulled back below $11 per bushel in September, following an increase in contracting for new-crop corn supplies,” Koory said. “Despite the pullback, food-grade corn prices remain above year ago levels, with the majority of contracts for delivery over the next four months locked in above $10.25 per bushel.
“Mercaris has completed its 2018 Organic and Non-GMO Acreage forecast, which estimates organic producers increased harvested corn acres 2% year over year in 2018. Organic corn yield estimates are still preliminary, but current observations suggest that with gains in both acreage and yields, U.S. 2018 organic corn production is likely to expand 5% year over year.
“Organic soybeans remained close to $22 per bushel in September for the fourth month in a row. Throughout 2018 food-grade organic soybeans have carried a $1 to $2 per bushel premium over last year. Historically, we have observed food-grade organic soybeans gain about $2 per bushel over the last quarter of the year following an increase in contracting activity. Given the stability of food-grade soybean prices, and the persistence of the premium over last year’s values, Mercaris will be watching the next couple of months carefully for bullish price movement.
“Mercaris currently expects (organic soybean) production to increase about 15% year over year, which is notable, but not necessarily enough to push prices down if buyers follow historical patterns and start shopping for soybeans over the remainder of 2018.”
In its acreage report, Mercaris said there were 17,648 U.S. farms certified as compliant with USDA National Organic Program standards for organic row crop production, representing 460 new farms and up 3% from 2017. Mercaris estimated there will be 6.505 million harvested organic acres in 2018, up 121,000 acres, or 1.9%, from 6.384 million acres last year.
“Despite an apparent slowdown in organic acreage expansion, the report as a whole presents an overwhelmingly positive picture of the organic and non-GMO markets,” Mercaris said. “Despite the slower pace of growth over 2018, organic field crop producers have continued responding to expanded consumer demand in the United States. Although the growth in organic farmland was uneven across the United States, our research showed that organic producers are working to match the growing demand for organic livestock feed.”
The acreage report indicated that states along the East coast, through the Corn Belt and through the West had the largest gains in total certified organic operations, with 430 farms added in the three regions. The Mercaris acreage report looks at organic wheat, corn, soybean, alfalfa, dry bean, pea, lentil and small grain area, as well as non-GMO corn and soybean acreage.
The report showed California had the most certified organic area at 1,257,127 acres, followed by Montana at 437,105 acres, New York at 405,710 acres, Wisconsin at 325,752 acres, Colorado at 310,339 acres and Texas at 302,246 acres.
Mercaris is a comprehensive source of market data and online trading for feed-grade and food-grade organic and non-GMO commodities based in Silver Spring, Maryland, U.S. For more information visit www.mercaris.com.
Source: WORLD-GRAIN.COM