Forecast for end of year milk price is optimistic
Milk prices will finish the year higher, which is good news for dairy farmers. Class III was $15.95 in August, $16.36 in September and may improve to about $17.80 for October. The higher Class III price is the result of both higher cheese and dry whey prices. On the CME barrel cheese averaged $1.53 per pound in September and has ranged from $1.75 to $1.81 in October. The 40-pound block cheddar price averaged $1.76 per pound in September and has ranged from $1.75 to $1.85 in October. Dry whey averaged $0.54 per pound in September and has increased steadily since to now $1.60. Stronger butter prices and much improved nonfat dry milk price will push the Class IV price which was $15.92 in August and $16.36 in September to $17 for October. Butter which averaged $1.78 per pound in September has ranged from $1.69 to $1.82 in October.
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Government programmes to increase yield, better seeds will aid production of pulses
There is no verified report that the country’s farmers are ceasing pulse cultivation. The production of pulses has increased through the years, from 8-15 million tonnes till 2006-07 to 16 million tonnes in 2015-16, 23.13 million tonnes in 2016-17, 25.23 million tonnes in 2017-18 and eventually, 25.58 million tonnes in 2020-21, due to the concerted efforts of research institutions and policy. With this rise in output, pulses’ imports dipped from their highest at 6.6 million tonnes in 2016-17 to 2.5 million tonnes in 2018-19. In 2019-20, India imported 2.6 million tonnes and is expected to import 2.5 million tonnes this year. However, domestic production is still unable to cater to the country’s needs, as it is far from the exponential growth in population. The demand for pulses by 2030 will be 32.64 million tonnes, with an annual required growth rate of 2.64 percent. Also, almost 80 percent of area under pulses is rainfed.
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EIA expects U.S. natural gas prices to stay high through the winter
In its October Short-Term Energy Outlook, the U.S. Energy Information Administration forecasts that natural gas spot prices at the U.S. benchmark Henry Hub will average $5.67 per million British thermal units (MMBtu) between October and March, the highest winter price since 2007–2008. The increase in Henry Hub prices in recent months and in the forecast reflect below-average storage levels heading into the winter heating season and strong demand for U.S. liquefied natural gas (LNG), even after relatively slow growth in U.S. natural gas production. EIA expects Henry Hub prices will decrease after the first quarter of 2022, as production growth outpaces growth in LNG exports, and will average $4.01/MMBtu for the year. U.S. exports of LNG are establishing a record high this year, a new record high anticipated for next year. EIA epects LNG exports to average 9.7 billion cubic feet per day (Bcf/d) this year (3.2 Bcf/d more than the 2020 record high of 6.5 Bcf/d) and to exceed annual pipeline exports of natural gas for the first time. The year-on-year increase in LNG exports coincides with slight growth in U.S. natural gas production. U.S. dry natural gas production is expected to average 92.6 Bcf/d this year, which is 1.1 Bcf/d more than in 2020 but 0.3 Bcf/d less than in 2019.
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China eyes coal price intervention to curb cost spikes
China pledged to reduce soaring coal prices as it ramps up production to relieve increasing pressure on the country’s economy — despite promising to reduce fossil fuel emissions. The world’s number two economy expanded slower than expected in the third quarter as an energy crisis began to bite, official data showed this week, with electricity shortages and production cuts dragging industrial output. It comes as Beijing — one of the world’s leading polluters — says it will reduce emissions and its reliance on the fossil fuel. The National Development and Reform Commission (NDRC) said Tuesday it was studying measures to intervene in coal prices, which have risen rapidly and hit record highs.
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London cocoa hits 3-week low; sugar, coffee rebound
London cocoa futures on ICE hit a three-week low on Wednesday on ongoing worries over surplus supplies, while sugar and coffee recovered amid improved sentiment in the wider financial markets. March London cocoa fell 0.7 percent to 1,779 pounds per tonne at 1134 GMT, having hit a three-week low of 1,772 pounds. Dealers said the British pound continues to be relatively firm, weighing on the market, while fundamentally, in terms of the weather, the outlook for the current crop remains good. But a rebound in demand in the current 2021/22 season may not be enough to prevent another global surplus, with only a small fall in production expected from the record level in 2020/21. December New York cocoa fell 0.7 percent to $2,540 a tonne, having touched a two-month low of $2,526 on Tuesday. March raw sugar edged up 0.1 percent to 18.89 cents per lb, having hit its weakest since late September on Tuesday at 18.82 cents. December arabica coffee rose 0.8 percent to $2.06 per lb. Nestle posted a forecast-beating third quarter on Wednesday, saying strong coffee sales helped boost overall revenue. The world’s largest food group said its Starbucks-branded products posted 15.5 percent growth in the first nine months. January robusta coffee rose 0.3 percent to $2,127 a tonne.