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Global Market report

California Dairy report

Market report - eGGs

flour faCts

proDuCe Market upDate

seneCa Crop report

Cheese & butter

Market upDate

Market News

Click on the link below to view updates:

oil Market WatCh

aluMinuM foil Market

upDate

http://www.grassland.com/Market%20Report.html

Egg Market Week of January 13, 2014

Retail demand fairly good. Supplies adequate. Market steady.

The regional egg markets are as follows:

Northeast Midwest Southeast South Central

Lg 1.27 1.19 1.27 1.27

Md 1.15 1.10 1.18 1.17

Source: Esbenshade, Inc.

The opinions expressed here are an interpretation of the current commodity markets. They are not

recommendations or future guarantees of performance in specific commodity markets. Trinidad

Benham is not responsible for any damage or losses as a result of this information. August 1, 2013

The opinions expressed here are an interpretation of the current commodity markets. They are not recommendations or future guarantees of performance in specific commodity markets. Trinidad

Benham is not responsible for any damage or losses as a result of this information. January 7, 2014

December 2013 Aluminum Foil Market Update

A Historical Review

The New Year is a good time to review the market and prices from a longer-term perspective. The chart above left shows

the yearly average LME cash price going back six years. Prior to the economic crisis, commodity prices (aluminum as

well) were high on strong global economics with synchronized growth in all major regions. The crisis put an abrupt end

to that and commodity prices were severely depressed in 2009. As growth slowly returned, prices recovered during the

following two years. The Manufacturing Indices chart (above right) depicts the strong manufacturing activity in the US

and China with Europe very volatile during that time. However, by January 2012, economic growth had slowed in all

regions, with Europe and China in contraction mode (below 50). 2012 was a story of the halves with the 1H’12 average

price about 5¢ higher than the 2H’12. A similar pattern continued into 2013 with the 1H’13 average price about 7¢

higher than the 2H’13. Monthly average pricing with the 2H’13 has been fairly stable and today’s LME cash price sits

within that range.

Other Factors Impact the Price

It would be logical to question why the price is depressed despite the rising Manufacturing Indices, particularly in the US

and Europe (chart above right). It can be partially explained by the lack of investor interest in the price. Investors crave

markets where there is price volatility, therefore aluminum’s relatively stable price for many months has caused them to

exit the market. Another factor is currency. With the recent tapering decision by the Fed, most expect the US Dollar to

strengthen further. A strong Dollar typically has an inverse relationship with the aluminum price as it makes aluminum

more expensive in terms of other currencies deterring buyers and encouraging sellers. Last is energy, as the brent crude

oil price around $107/barrel is well below the highs seen in 2013 around $118/barrel.

2014 - Questions Remain

Markets tend to look toward the future for direction. At present, the markets are concerned about the future economics of

the US and China primarily. Will the Fed tapering slow economic growth too much? Will Chinese growth stall as recent

indicators are eroding and remain barely in expansion mode? The economic outlook will be critical to future prices.

MidWest Premium Update: New LME warehousing rules to limit delays in off-take of metal do not take effect until

April’14. Again this month, the MidWest premium increased, rising by over 1¢. The rise reflects the current difficulty in

sourcing physical metal from LME warehouses. Time will tell whether the new rules will improve this situation.

42.5

45.0

47.5

50.0

52.5

55.0

57.5

60.0

62.5

Jan-

10

Apr-

10

Jul-1

0

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11

Apr-

11

Jul-1

1

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-11

Jan-

12

Apr-

12

Jul-1

2

Oct

-12

Jan-

13

Apr-

13

Jul-1

3

Oct

-13

Manufacturing Indices

US (ISM)

Eurozone (Markit)

China (Markit)

$1.17

$0.76

$0.99

$1.09

$0.92

$0.83

$0.80

$0.70

$0.75

$0.80

$0.85

$0.90

$0.95

$1.00

$1.05

$1.10

$1.15

$1.20

2008 2009 2010 2011 2012 2013 2014

Average LME by Year

Cash prices sharply higher this week Delray Beach, FL -- Blocks, barrels and butter each registered double-digit price increases this week; with barrels leading the way, up 24 cents, to join blocks above the two-dollar benchmark.

Cheese prices have only been above two bucks one other time in Jan; back in 2008 when blocks and barrels were at or above $2 for five days. During 2008, cheese prices repeatedly broached two bucks: in late Feb; again from mid-May thru mid-Jun and finally in Jul.

Exports and domestic demand have teamed up to drive prices higher. During the most-recent-three months (Sep thru Nov), cheese exports were up 45% and domestic usage was up 2.5%. Other (than American) cheese demand was strong enough to pull milk away from the American vat. Other cheese disappearance was up 7.3% during the three months; plus 37% on the export side of the ledger and up 5.6% domestically. American cheese disappearance was flat: Exports up 73%; domestic use, down 2%.

How long can cheese prices stay at these levels? At least a month and probably longer. Exporters are fully booked (and hedged) thru 1Q14 and some exporters tell me they are booked well into 2Q14.

Butter and nonfat dry milk prices continue to garner support from the export market.

While the headlines focused on the “polar vortex”, heavy snows caused as much disruption in the dairy business. Fortunately, both are relatively short-term phenomena and already pretty much in the history books.

Below zero temperatures sent daily production per cow down 7% to 12%, according to milk producers, but most told me they expected their cows to recover quickly; probably by the end of this week.

Meanwhile, heavy snowfall in areas ill-equipped to deal with snow sidelined trucks moving milk from the farm to the plant and from the plant to end user. Here too, recovery is well underway.

USDA elevated it’s dairy price forecasts for 2014 as reported in the just-released World Agricultural Supply & Demand estimates. The mid-point of the USDA NASS prices (and the change from last month) look like this: Cheese, $1.800 (+7.00); butter, $1.570 (+1.50); nonfat dry milk, $1.835 (+9.00); whey, $0.565 (Unchanged); Class III, $18.20 (+75 cents) and Class IV, $20.25 (+90 cents).

It is very unusual, but this time my forecast looks a lot like USDA’s: Cheese, $1.84; whey, $0.57; Class III, $18.66; butter, $1.68; nonfat dry milk, $1.80 and Class IV, $20.39.

USA dairy product exports during Nov were 30% greater than one year ago and 27% higher during the most-recent-three months, Sep thru Nov.

Nov shipments YoY were significantly higher across all product categories: Nonfat dry milk/skim milk powder, at 45,527 MT, up 54%; cheese, at 28,424 MT, up 54%; whey products, at 39,14 MT, up 7.7% and butter, at 7,676 MT, more than triple one year ago. A MT (metric ton) equals 2,204.6 lbs.

Vol. 22, No. 02

Trends, analyses & forecasts by Jerry Dryer

Copyright 2014 by Dairy & Food Market Analyst Inc. All rights reserved. Quotation with credit permitted. Reproduction and/or redistribution prohibited by USA & international law.

10 Jan 2014

Current Cash Prices At-A-Glance...

Cash Cheese Block....................$220.00 (+15.75) Barrel...................$216.00 (+24.00) Cash Butter AA……..................$167.50 (+10.50) Cash Nonfat Dry Milk Extra Grade............$208.00 (-1.00) Grade A…………....$207.00 (+0.25) FMMO Class I Base Price Jan...........................$21.48 (+1.11) CA Class 1 (Jan) Northern..……..........$22.84 (+1.11) Southern..………..…$23.11 (+1.11) Class II Price Dec...........................$21.66 (+0.90) Class III Price Dec...........................$18.95 (+0.62) California 4b Dec...........................$18.03 (+0.73) Class IV Price Dec……....................$21.54 (+1.02) California 4a Dec...........................$21.16 (+0.53)

* * * * * * * * * * * * * * (Numbers in parentheses are changes from previous week/month.)

Serving the Dairy Business for 22 Years

of 3 10 Jan 2014

Nothing in this report shall be deemed to constitute an offer or solicitation for an offer for the purchase or sale of any commodity or security. Dairy & Food Market Analyst Inc. uses sources that it believes to be reliable, but it cannot warrant the accuracy of any of the data or forecasts included in this report. Copyright 2014 by Dairy & Food Market Analyst Inc. All rights reserved. Quotation with credit permitted. Reproduction or redistribution prohibited by international law. Individual, group and corporate subscription rates are available. Contact Jerry Dryer at (561) 445.1074 or [email protected].

Jan thru Nov exports have accounted for 15.6% of the milk solids produced in the USA vs 13.4% for the same period one year ago. USA exports have been lifted by three forces; two of which are here to stay:

(1) Worldwide growth in the size of the middle class is driving demand for better diets; (2) USA manufacturers have demonstrated their commitment to the export market by making the right products and (3) Reduced milk supplies, most notably, in New Zealand, China and Russia.

Higher milk prices and a return to more normal weather patterns will go a long way toward fixing the supply situation, but the other two drivers of USA export remain firmly in place. The purchasing power of consumers around the world will continue to grow as wages increase and more households gain a second bread winner. This translates in demand for better diets and in the eyes of most, dairy is clearly part of a better diet.

Kudos to USA dairy manufacturers; it took a while, but now...products are being made to higher international and ingredient (i.e., infant formula) specifications and new products are being produced: milk protein concentrate, skim milk powder, whole milk powder, UHT shelf-stable

liquid milk, butteroil and infant formula (See stories on page 3). The US Dairy Export Council and yours truly have been talking about this happening for almost 20 years. Watching it unfold has been a delight and there is a lot more on the horizon.

Tom Suber and his team at the US Dairy Export Council have, over the years, moved mountains. Thank you, ladies and gentlemen, for a job very well done.

Speaking of the future. Chinese imports of whole milk powder are forecast to increase another 25% this year; skim milk imports, another 15%, according to a recently released analysis by USDA. This increase would put skim milk powder purchases at about 230,000 MT or 507 million lbs.

Jan thru Nov, the USA shipped 47,297 MT of skim milk powder to China to capture 23.6% of the market vs 18,222 MT and 11.6% of the market during Jan thru Nov 2012.

Whole milk powder imports are forecast to hit 650,000 MT. New Zealand/Fonterra has more than a 90% share, but additional plant capacity here and in the EU may start to chip away at this share number.

The GDT price index (all products/all delivery months) was down 0.8% at this week’s trading session; however, a more detailed analysis found that most prices were firm or higher.

DairyAmerica skim milk powder prices were as much as 3.3% higher and almost all contracts were higher for the

Block Barrels Butter Nonfat Whey

01/04/14 1.9579 1.9666 1.5698 2.0029 0.5975

1 Year Ago 1.7471 1.7130 1.5344 1.5780 0.6477

52-Week Low 1.5899 1.5903 1.3666 1.4918 0.5592

52-Week High 1.9133 1.8990 1.7226 1.9785 0.6560

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$1.0000

$1.2000

$1.4000

$1.6000

$1.8000

$2.0000

$2.2000

AMS/NASS Price Analysis

Equivalent Prices, computed pursuant to 7 CFR, Section 1000.54

‐

5,000

10,000

15,000

20,000

25,000

30,000

Jan Mar May July Sept Nov

Metric Tons

Cheese exports

2010 2011 2012 2013

of 3 10 Jan 2014

Prices and changes in ¢/lb. Numbers in parentheses are changes from previous week. Changes reflect revised prices from previous week.

CME Futures Settling Prices (with changes from previous week)

fourth consecutive trading session. Prices were between $4,400 and $4,600 per MT.

Fonterra only offered medium-heat SMP. Prices were mixed, but all months settled above $5,000. Arla’s prices were down from the prior session, but hovered around $4,600.

DairyAmerica and Fonterra butter prices settled at or above $4,000.

Danone (Dannon, in the USA) canceled its supply contract and launched legal proceedings against Fonterra following failed commercial discussions about Danone’s loss of sales following the precautionary recall of whey protein concentrate by the NZ-based cooperative last Aug. Danone is seeking $300 million in damages for “anticipated business losses” and unspecified compensation for brand and reputational damages. Intermountain Brands, West Valley City, UT, and China’s Yasheng Group have formed a 50/50 joint venture, Angel Star Nutrition, to make (in Utah) and market (in China and other countries) infant formula and “growing-up” milk. White Wave, recently spun off of Dean Foods, and China’s Mengniu Dairy are creating a joint venture to manufacture and market “nutritious” products in China. Saputo’s offer to purchase Warrnambool Cheese & Butter (WCB), set to expire today, was extended until 22 Jan. Saputo said it is now the largest shareholder with “a relevant interest of 21.392%.” Meanwhile, WCB reported a doubling of first half earnings (to $60 million) because of strong Chinese demand for milk powders and a weaker Australian dollar. DAIRY DATA Calendar thru 24 Jan 2014:

AMS National Dairy Products Sales Report, Wed, Jan 15; ERS Livestock, Dairy & Poultry Outlook, Thu, Jan 16; Federal Holiday, Mon, Jan 20; GlobalDairyTrade auction, Tue, Jan 21; NASS Cold Storage, Wed, Jan 22; AMS National Dairy Products Sales Report & Advanced Prices & Pricing, Thu, Jan 23; NASS Livestock Slaughter, Thu, Jan 23 and NASS Milk Production, Thu, Jan 23.

Kind regards,

Jerry [email protected]

CME Cash Chge From CME Wkly Chge From NASS Wkly Chge From

Settlement Last Wk Ave Last Wk Ave Last Wk

01/10/14 01/03/14 01/10/14 01/03/14 01/04/14

BLOCKS $2.2000 $0.1575 $2.1520 $0.1376 $1.9579 $0.0457

BARRELS $2.1600 $0.2400 $2.0980 $0.2155 $1.9666 $0.0676

BUTTER $1.6750 $0.1050 $1.6480 $0.1067 $1.5698 ($0.0032)

NFDM Ex Gr $2.0800 ($0.0100) $2.0880 ($0.0020) *** ***

NFDM Gr A $2.0700 $0.0025 $2.0790 $0.0096 *** ***

NFDM NASS *** *** *** *** $2.0029 $0.0242

Whey NASS *** *** *** *** $0.5975 $0.0255

CWAP NFDM *** *** *** *** $1.9664 $0.0228

WEEKLY CASH PRICES & CHANGES

PRELIMINARY

Week ending01/10/14 Settle Chge O/I Settle Chge O/I Settle Chge O/I

Jan-14 20.50 0.44 4,239 2.018 0.038 1,170 60.000 1.500 270Feb-14 20.21 0.53 4,129 1.985 0.049 1,017 60.700 1.025 273Mar-14 19.22 0.15 3,283 1.880 0.014 953 60.650 (0.275) 318

Apr-14 18.70 0.15 2,556 1.820 0.014 844 61.275 0.525 236May-14 18.53 0.35 2,375 1.808 0.023 769 60.025 0.775 221Jun-14 18.40 0.44 2,137 1.795 0.030 721 60.200 1.450 269

Jul-14 18.19 0.47 1,232 1.773 0.039 383 58.000 0.250 130Aug-14 18.09 0.44 1,149 1.766 0.025 411 58.000 0.500 108Sep-14 18.00 0.40 1,130 1.768 0.032 445 57.000 0.000 109

Oct-14 17.90 0.28 912 1.757 0.017 359 57.000 0.750 79Nov-14 17.85 0.26 928 1.751 0.017 360 57.000 0.000 115Dec-14 17.68 0.22 853 1.755 0.028 324 56.300 0.300 77

Jan-15 17.34 0.14 62 1.800 0.000 0 43.525 0.000 0Feb-15 17.19 0.77 11 1.830 0.000 0 42.025 0.000 0Mar-15 16.62 0.55 0 1.830 0.000 0 42.025 0.000 0

Apr-15 16.50 0.80 0 1.830 0.000 0 42.000 0.000 0May-15 16.50 0.90 0 1.830 0.000 0 42.000 0.000 0Jun-15 16.50 1.15 0 1.800 0.000 0 42.000 0.000 0

Jul-15 15.26 0.00 0 1.894 0.000 0 42.000 0.000 0Aug-15 15.21 0.00 0 1.899 0.000 0 42.000 0.000 0Sep-15 15.50 0.34 0 1.904 0.000 0 42.000 0.000 0

Ttl O/I 24,996 7,756 2,205

O/I Prior Wk 23,030 7,500 2,143

Class III Milk Cheese Dry Whey

Weekly Market Highlights

Wheat futures prices declined through much of the three weeks since our last communication.

Basis premium prices are sharply higher, more than offsetting the decline in wheat futures, and leading to

higher flour prices for most flour grades.

Transportation issues are the cause of much of the basis increase; sluggish rail performance has turned to

abysmal rail performance in part due to nasty winter weather conditions across most of the Northern U.S.

It is not likely that wheat movement in the country will improve now before March or April. High basis levels

could be with us a least that long.

The USDA will report World Agricultural Supply and Demand estimates tomorrow. The market may react to

the new information in the short term, but it is not expected to change the overall market trend.

Facts on Flour Hard Spring Wheat

This wheat contains the highest protein content of all the wheat classes averaging between 13.5-14.5

percent. It has superior milling and baking properties and is used to produce bread products requiring strong

gluten, including hearth breads and rolls, variety breads, bagels and thin pizza crust. It is often blended with

lower protein flours to improve their bread making qualities. The four-state region of North Dakota,

Montana, Minnesota and South Dakota grows approximately ninety percent of the Hard Red Spring Wheat in

the United States.

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Bu

sh

el P

ric

e

Futures & Basis Markets

KC Future

Spring 15% Basis (from MarketFax No.1Northern Spring)

Mpls Future

Winter 13% Basis (from MarketFax No.1 hardwinter)

Flour pricing consists of a combination of Wheat futures prices and Basis Premium prices per bushel. Information contained on this chart closely resembles Gold Medal All Trumps, Mpls. Future + 15% Basis, and Harvest King, KC Future + 13% Basis. This chart does not reflect changes in millfeed values.

This Chart is meant to indicate Market Direction Only.

JANUARY 9, 2014

Global Market Report NOVEMBER 14, 2013

Skipjack Tuna Over the past few weeks the Western Pacific region has been reporting good catching. Japanese fishing boats are currently reporting a catch volume of 35-40 MT/boat per day. The meantime, Taiwanese and Korean fishing boats reporting

15-20 MT/boat per day. The operation of the Spanish and French fishing boats in Indian Ocean also recovered to 25-30 MT/day per boat. Raw material price has gone down from $2350/MT at its peak in April to $1900 by July-Sept. Due to improved catching and poor demand, raw material pricing has further dropped to the current level of $1700-1750 for early December deliveries. According to reports, Taiwan/Korean vessel days with PNA nations have been

used up and if they wish to further operate in the seas they have to pay $7000

per boat per day to PNA so operational cost will be very much high and boats are returning to port for rest. Also Eastern pacific fish closure (total fish closure means boats cannot sail out to catch) will start soon from November 18th till January 18th so demand from this region is expected to increase. Raw material prices: Bangkok $1700

Philippines $1750 Ecuador $1900

Outlook: Soft

Yellowfin Tuna The ratio of skipjack vs yellowfin has changed to 85:15 in the western Pacific and 75:25 in Indian Ocean. Raw material price $2450-2500 in Bangkok

Outlook: Stable

Tongol Tuna Vietnam’s local catch finishing up earlier than usual this season. Landing is reportedly much lower than the last season. Thailand season is over now. Price $1600/MT. limited availability

Outlook: Stable

Albacore:

Pacific ocean is in its lowest season now with basically no catch. Next season will

not be until March/April. Japan reports low volumes in cold storages. Landing in

Indian Ocean region is also poor. According to reports some trading companies

who concluded volume for national brand are now facing with difficulty to supply

due to poor catching. Traders/suppliers have not been offering for few weeks

already. Raw material is traded in Bangkok at $2500 levels and people foresee

Mitsui Foods, Inc. 35 Maple Street Norwood, NJ 07648

Phone:

1-800-777-2322

Fax: 201-750-0150

We’re on the Web! www.mitsuifoods.com Contact:

Johns P. Thampan [email protected]

PRICE TRENDS: Albacore -Stable

Tongol – Stable Skipjack-soft Yellowfin- Stable Pineapple- Firm

Mushroom- Soft Mandarins: Soft Artichokes: Soft

http://www.mitsuifoods.com/index.asp

http://www.mitsuifoods.com/

reduction of supply in the coming months and price may start to bounce

back up

Outlook: Stable

Mushrooms: Since 2012, Import from China has drastically reduced due to continued rejection by FDA for pesticide issues. Meanwhile raw material supply in China has reduced drastically since the beginning of 2013 season. According to Chinese agricultural department data, the planting area for mushrooms has reduced more than 1/3. Corp season in the Northern area is winding up now as weather becomes colder.

Fresh market consumption has increased. Very few offers are being made from China to the US market. Small volumes are available from brine pack. Demand in the US has dropped further. The US market has been focusing mainly on product from Holland.

Outlook: Soft

Pineapple:- It has been already 1.5 months since the winter crop began in Thailand but the raw material supply is still much less than of normal season. Now the fruit price

is 6.2-6.5 BHT/kg and packers facing with challenges to fulfill pending orders concluded since early part of 2013. Chins has been actively looking for sliced pineapple from Thailand but unable to find due to the current shortage. Winter peak may not begin until end November/1st week December. For next summer crop, with pineapple cycle, Fruit supply is forecasted to be less than this year (2013) about 10% due to farmers switching to grow other profitable items. Total tonnage Thailand now is around 6000 MT/day compare to

9000-10,000 per day at same period last year.

Outlook: firm

Tropical Fruit Salad Papaya season is Oct-Dec and will slow down from Jan-April. Guava considers

being a very small crop and harvest period is every other two consecutive months. Since papaya and guava supply consider small compare to the demand of domestic consumption. Therefore, the price is extremely volatile which induces mainly by the domestic consumption/market. The growing area of papaya and guava does go up and down as much as pineapple since it is a tree that can yield fruits for quite a long time and that it has enough domestic consumption to support. Therefore, sometimes the factories have to fight

aggressively against the domestic fresh market. raw material price is around 7.50 baht +/- per kg.

Mandarin Oranges: This year production in China began only during 1st week of November which is a late start compare to a normal year. Factories are not very optimistic about this year due to severe labor shortage. Canneries are unable to recruit enough

workers to arrange for production. The quality of the raw material in Hunan and Hubei provinces are very poor and output will be much lower than expected. With regards to pricing, originally suppliers expected pricing to be weak or similar to last crop due to carry over inventory situation and production forecasts.

However, now suppliers are moving up the offer prices due to labor shortage and raw material quality issues. Many suppliers indicate that they will suffer huge

losses if prices are same as last corp. This year, the total production days will be shorter due to late beginning of crop and early beginning of Chinese new year. Production has to be finished before January 15th latest. The average export quantity of mandarin oranges from China for the past 5 years was about 350,000 Mt per year. Due to the good pricing of 2010-2011 seasons and no carry over inventory, packers become so optimistic and produced about

440,000 MT during 2011-2012. The total production of 2012-2013 was reduced to 280,000 MT; however as per reports the industry still holds about 50,000 Mt of carry over (unsold) inventory from the last crop. US is the largest importer of mandarins from China. Last year the export to US was about 170,000 MT. Japan imports about 50-60,000 Mt and Europe about 50-60,000 Mt. The total export

from china last year was about 340,000 MT. A substantial drop in price happened during the past 18 months due to the over production in 2011-2012.

Spain reports some carryover stock of 3 kg and 11 oz mandarins. New crop will begin late November and expected to be good. However, packers are concerned due to low demand and severe competition from China. Forecast: Soft

Artichokes: Spain continues to sell out good volumes packed during this summer crop and anticipates enough to cover before beginning of the new pack season. Plantations areas are in similar size of last corp. winter pack volume will be dependent on

weather condition. Farmers forecast volumes similar to the last crop as long as weather cooperates. Chile and Peru are close to the finish of the season. Production volume is much lower than the last season. However, prices are lower as needed to be competitive with the softer market in Spain. Some packers say that they are completely sold out but some still have unsold stock.

Outlook:Soft

Olives: No major changes from last report. The harvest

volume for 2013 will be about 499,000 MT, about

8,000 MT less than he previous crop.

In some areas fruit has been affected by high temperatures in August

and fruits are too small for canning and may have to be shipped to

pressing plants. Manzanilla variety has been negatively affected by the

phenomenon called “Veceria” (irregular annual yield). Due to the poor

condition of the trees, the yield will be limited and irregular.

About 40% of the Gordal is of too small size not good for commercial

purpose. Hojiblanca variety appears to be of good quality and yield may

benefited from the autumn rains as it harvesting begins later. Cacerena

variety is positively affected by Veceria phenomenon and its output may

be compensated for the low yield of the previous year. Carrasquena

variety is reportedly in good shape and expects good yield and quality

Outlook: firm

Peaches: As reported earlier, the two major producing countries China and Greece had a very difficult year in terms of raw material situation. The extreme cold weather conditions (hail in Greece and Frost in china) caused reduction in crop by 30-50%

The Dangshan area in China finished their crop by end of August and reported a 30 % crop failure. The northern region has completed their crop during 1st half of September and reported 20% shortage. The average price of raw material was 20% higher than the last season. The domestic consumption is increasing drastically in China. The local market consumes about 70% of the crop. The local

market pays much higher price than the export market. Many packers give first priority to the domestic market. During 2012 season china processed about

600,000MT. The total production of this season is about 400-450,000 MT. During 2012 China exported about 132,000 MT of which US imported 44,000 MT, Japan 37,000MT, Russia bout 13,000 MT the remaining to Australia, Chile, Canada etc. There are about 4-5 peach varieties in China. Of which only 2 varieties are of good color and texture properties (#83 and #19). Suppliers are indicating that 2013 season's production has already been sold out and even if some small volumes available, those may not be of the right variety.

Outlook: Firm

Pears:

As reported earlier, this year has marked as a disastrous year for pears due to extreme low temperatures in the growing areas during the blossoming period. Due to frost conditions about 70% fruits withered and the total fruit output had dropped considerably. Generally only 10% the total output in China goes for canning industry. As the harvest continues and it was holiday season in China,

Canneries are currently receiving the secondary fruit for canning and the raw material price is about 1-1.2Rmb. Per kg. Chinese total export during 2012-2013 was about 50,000Mt. USA imported 21,000MT, Europe about 15,000, Thailand 5,300 Mt and Japan 2,600 MT. The industry reports no carryover stock in China from the last season. Currently the finished goods pricing is about 20-25% higher than the last season

Outlook: Firm

Apricots: No major changes from the last report. Spain reported a good production season for pulp but very little for canned due to soft texture issues. In China in the

beginning of the season, packers thought the harvest would be abundant, so they quoted with low prices. But in fact the supply was much less than expectation and price of raw material firmed up drastically. Some suppliers claim

that they suffer huge losses as they made commitments earlier predicating low

raw material prices. The total export from China to the US is not significant. Majority of Chinese production goes to Europe. Chinese canneries were focusing on 14-18 brix for light syrup pack in the past However, next season onwards they plan to increase the brix level to conform to USDA specs of 16-21 brix. This will result in some cost increase

Outlook: firm

Fruit Cocktail:

Major portion of fruit cocktail production is done between September and

March (during the availability of pears). Most packers produce during this

period based on firm commitments. There may be some year round

production but packers use the highest volume of ingredients namely

peaches and pears from frozen raw material. In the past the industry

used to use diced peaches and pears from canned raw material.

However, due to high cost of canning, they have moved to frozen raw

material. The main problem for using frozen raw material is the product

become very soft after further throwing and canning.

Due to the shortage of peaches and pears the present price of fruit

cocktail is 15-20% higher than the last season.

The total fruit cocktail export from China during 2012 was about

59,000MT. (US 17,000MT, Europe 15,000MT and Canada 7,000MT)

Outlook: Firm

Coconut Products–

Thailand is having major shortage situation on coconut due to hot weather and damages caused by bugs. Thai packers are now collecting raw material from Indonesia. But the availability from Indonesia is also limited as their plantations

were also affected by weather and bug issues. Philippines, India and Srilanka are also reporting the same. The market price has already move up by 20-25% Thai canneries are now struggling to fulfill their pending commitments. Next season will start in April 2014 Outlook: Firm

Baby Corn- It is off season in Thailand now. Also as reported earlier, there weren’t much recovery in supply even during the last harvest season either. The standard 150-

180 count corn is still very limited. Most of the packers are fully occupied with pending orders and may not be in a position to offer till beginning of 2014. Outlook: firm/severe shortage

Peppers and Pimientos

Production in Spain has over now. Price of raw material was higher than the last

season due to high demand from fresh market. New crop price is about 10-15%

higher than last crop. Peru is now producing some small volumes. Their season begins in January/February. They anticipate normal production volume this year. Chile produces small volumes but price is higher than last crop season. Outlook: firm

Water chestnuts:

According to reports due to high labor cost and low profits, many farmers have

reduced their plantation area for water chestnuts and changed to other profitable agricultural products. The recent reports from the Farmers Association in the growing areas, the reduction in growing acreage is about 20-30% compare to the last season. Usually by early No Sowing for 2013-2014 started in July. However, according to reports due to high labor cost and low profits, many farmers have reduced their plantation area for water chestnuts and changed to other profitable agricultural products. The recent reports from the Farmers Association in the

growing areas, the reduction in growing acreage is about 20-30% compare to the last season. Usually by early November, canneries will start offering. This year due to severe labor shortage and increase in cost of production, many canneries are reluctant to make offers. The starting of the season is expected to be delayed.

During 2011-2012 seasons, china exported approx. 40,000 Mt of water

chestnuts. However, the export volume has dropped by 20% during 2012-2013 seasons. The main reasons for such reduction was due to farmers’ efforts to concentrate more on domestic market by leaving water chestnuts to grow into larger size and get more yield for domestic fresh/frozen market. Production of canned water chestnut (especially a10 size) was reduced due to labor shortage. Canneries could not find skilled workers for peeling at the right time also wages

were increased considerably. Price of finished products increased by 30% over the past 6 months and currently there are no stocks available in China until new season begins. Outlook: Firm

Pro News Market Update

“Produce from the Ground Up”

For the week of: January 12th, 2014

Kale White Bean Soup

INGREDIENTS 2 Tbs. EVOO 3 medium carrots diced 1 large yellow onion diced 2 medium cloves of garlic minced salt and pepper to taste 1 quart of organic vegetable broth 1 can of diced tomatoes (I prefer Eden Organic brand) 4 sprigs of fresh thyme 2 cups lightly packed, chopped kale 1 can of white beans rinsed and drained INSTRUCTIONS: Heat the oil, onion, garlic and carrots with bit of salt and pepper in a large soup pot over medium-high heat, stirring occasionally until they start to soften - about 5-10 minutes. Add the broth, tomatoes with their juice and thyme. Bring it to a boil, reduce the hear to medium, cover and simmer for 15 minutes. Stir in the beans and kale, add some salt and pepper and cook uncovered for about 10 minutes on medium heat. Remove the thyme sprigs before serving.

ASPARAGUS -- Continued tight availability and high prices. Peru continues to be the primary growing area; Mexico will start next week with very light production volume. AVOCADOES -- I read in the Produce News “The Hass Avocado Board has estimated that avocado consumption around the Super Bowl weekend (Feb. 1-2) will top 100 million pounds this year, representing a 30 percent increase over 2013.” Just a reminder; to begin thinking how you can capture your share of this annual avocado market surge. The market has firmed up, with the 60 ct size now reacting to the 48 ct market increase of one week ago. BROCOLLI -- Light supplies with improvement toward weekend. Supplies are lighter due to cooler weather and cooler mornings slowing the product growth. Demand is stronger industry wide. Quality remains excellent.

CARROTS -- Good availability on carrots out of California and Mexico, and Jumbo size are good as well. Quality is good as well CAULIFLOWER -- Lighter supplies but improving. Quality is good with white tight curds, medium head sizes and good green jacket leaves. CELERY --The celery market is steady. Production continues out of Yuma, Oxnard and Santa Maria. Supplies are expected to be good throughout the week although sizing is trending to the larger celery. The quality is reported to be good, with only slight bowing being reported. LETTUCE – The market is steady in spite of some rather cold growing conditions being reported in Yuma. Harold, our field man reports “ We have experienced some defects at the field level (burn, rib blight, and some disease pressure), but we are peeling down heads at the field level and being very selective in our harvesting as to not bring into defects into the facility. Our finished product retains are showing great results. “. With cooler temperatures in the forecast for next week, this market could be poised to go higher.

LEAF LETTUCE / ROMAINE -- We have abundant of green leaf in Yuma this week. The overall quality remains great with this cold weather with no signs of blister and freeze damage. Shelf-life is performing well with no pinking or decay. The extended outlook on this commodity looks great. Supplies of romaine are strong. Due to consistent freeze at the field level, epidermal peel is littered throughout the fields industry wide. Our raw team is peeling down our romaine heads and as a result we are seeing little to no effects of the epidermal peel in our finished product. Due to us peeling down heads further than normal, our customers can expect to see a little more rib in our finished product. We are seeing minor mechanical damage but our finished product is performing very well in shelf life. We expect to have plenty of supply to meet demand throughout the Yuma season. We will continue to peel heads down throughout January to mitigate the epidermal peel from entering our facility. As is the case with iceberg, given the upcoming weather forecast is calling for continued freeze and very light rain, our raw and production teams will continue to work closely to ensure we meet your needs. PEPPERS/CUCUMBERS/SQUASH -- Peppers -- Demand exceeds supply as the result of the freeze that occurred in Florida this week. Prices are on the rise, for both Green and Red Peppers. Cucumbers -- With the previously reported freeze in Florida, as you can imagine this market is also adversely affected. POTATOES -- Market is tightening on count cartons. Pricing has increased slightly. Sheds do need to move consumer packs (10# & 5#) which typically involve the smaller potatoes. Most packers are currently running the smaller profile potatoes. Demand is light on the consumers so the sheds are having difficulty generating supplies of count cartons. ONIONS -- Idaho, Oregon, and Washington are all slightly higher on yellows due to an increase in demand. This is also due to the market historically being stronger the in early January so the market might go right back to where it was. Reds are mostly steady in all areas although some packers are higher. Medium reds are still generally short. White onions are steady on all sizes.

TOMATOES -- Rounds: The round tomato market remains unsettled this week as Florida continues to harvest above expected yields on fall plantings. Like last week, smaller fruit is more readily available and shippers are looking to move this product to keep inventory clean. Larger tomatoes are seeing an increase in volume as well as warm weather and low holiday demand have collaborated to yield a small price decrease. The main factor at play for most buyers is that of transportation during these punctuated holiday weeks. Cherry and Grape: Grape and cherry tomatoes continue to be plentiful in the Sunshine State. Though market pricing is still lower than historical averages, many shippers are now beginning to see an increase in demand that many thought was more than a week away. We expect pricing to remain stable at current market levels and quality to stay first-rate. Roma: Roma tomatoes in Florida are also in high supply this week. As Mexico finally begins to realize its full seasonal volume, demand has tapered off from Western buyers. This supply exceeds situation has lowered the market from last week by a couple of dollars. Going into next week, this market could slip even more until transportation steadies and demand increases.

APPLES & PEARS -- Demand and movement continuing to exceed supplies 113s & smaller, mostly lower grades, all varieties, due to schools returning to session. Packing schedules will get back to normal next week. Prices are increasing as export demand continues to outpace supply. Demand on small pears continues to exceed supplies, peaking on 90 & larger. Prices are mostly stable. STRAWBERRIES -- Freeze warnings are in effects in Florida with possible freezing conditions/ colder weather over the next couple of days in some of the growing regions. Florida strawberries will be very limited thru this week. This market will remain firm out of this area. Mexico shippers are still trying to cleaning up their supplies from rain last week, which will delayed transfer trucks to Yuma and McAllen. Currently, strawberries loading out of California will have the best quality and availability. California has been having some unseasonably nice weather which is helping bring on the spring crop. The strawberry’s market is slightly firming up out of California due the limited availability out of Mexico and Florida.

Lemons: The freeze in the Central Valley has now started to affect this districts lemon crop. This is not a larger crop, but will have an impact on overall supplies as we move in to the late winter through summer months. We already see the market beginning to firm up. Demand still remains very good on all sizes from all shippers. Oranges: California Freeze may be over, but damage has been done. Look for even tighter supplies on the smaller sizes, 113’s & 138’s and now moving into 88’s. Market has firmed up significantly. Limes: What a difference a week will make; lots of rain adversely affecting fruit quality, and the markets are on the rise. GRAPES -- New crop Chilean grapes are now available; the fruit is fresh and quality is excellent. Prices are beginning to ease for Flame seedless, while Sugarone (green seedless) remain firm at the highs. KIWI FRUIT -- Still have Chilean, even though California are now available, chiefly due to the flavor profile. Expect about one more week before we switch to California. MELONS -- Cantaloupe: Guatemala is transitioning to an area where there is less availability of fruit and Honduras has started with very limited production. Cantaloupe will get more limited at the end of the week. The next few weeks will continue with limited volume. Demand is low so the market is staying relatively steady. Honey Dews: Mexican fruit is available but very limited with only a few shippers currently harvesting. The market is very strong and continuing to rise. Import fruit is extremely limited on the west coast with little to no market fruit available. The east coast is limited on fruit as well. The next few weeks will continue with very limited availability. Watermelon: Prices continue to trend higher for watermelons, currently being harvested in Southern Mexico and Central America. With most all schools back in session, demand has been good.

Ron Orr

Executive Director Pro Mark [573] 680-1066 [email protected]

Market Watch . . . . . . .

Market Watch

January 10, 2014


• Positioning ahead of the USDA reports was key.

Soybean Oil

• Informa raised their 2013 US crop estimate 71 million bushels to 3,329 million. The yield was raised to 44 bushels per acre. Argentine production was lowered 2.0 MMT to 57.5 MMT.

• The BA Exchange reported Argentine planting at 91% complete. • Early yield estimates from Mato Grosso are very good. • FC Stone pegged Brazil’s crop at 90.2 MMT, up from 89.3.

CONAB’s estimate was 90.3 MMT, up from 90.0. • USDA’s WASDE report increased US production 31 million bushels

to 3.289 billion on higher yields and harvested area. The yield was raised 0.3 bushels per acre to 43.3. Global production was increased 1.9 million to 286.8 million tons.

Crop Updates

Expected Value Range $35.50 - $37.50 cash

Soybean Oil Market Pricing Trend

Value Ranges *

The information above reflects the current opinion of Stratas Foods but does not represent a guarantee of future market conditions. All final oil booking decisions should be made by the end customer and not Stratas Foods.

* Value ranges represent good booking levels if the market dips into this range

Index fund rebalancing offered support.

Biodiesel prices broke sharply as the blender tax credit has ended.

Extremely cold weather added to river logistics issues.

Misc. Influences Impact

Key Factors Recent Trend

January 10, 2014

Bearish Bullish Neutral

• Weekly US export sales were strong at 943,400 tonnes old crop and 237,500 tonnes new crop. Soyoil sales were 23,100 metric tonnes. US export inspections were 56.446 million bushels vs. 43.738 million last week and 40.022 million last year with China the destination of choice.

• The Brazilian bean lineup has grown to over 1 MMT and continues to grow.

• The Argentine government will charge a “profit tax” on exports. • Today’s WASDE report showed crush 10 million bushels higher at

1.700 billion. Exports were raised 20 million bushels to 1.495 billion. Ending stocks were unchanged at 150 million bushels. Changes to soyoil were higher production due to higher crush and extraction rate, lower imports and higher exports. This caused ending stocks to increase from 1.69 billion pounds to 1.745 billion.

Flash Summary

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• Positioning ahead of the USDA reports was key.

Corn Oil

• Informa estimated the 2013 US crop at 14,162 million bushels, 173 million higher than the last USDA estimate. The yield was raised 0.5 bushels per acre to 161.6. 2013/14 World production was increased 3.8 MMT.

• The Argentine crop is 83% planted. The BA Exchange reported crop stress in south Cordoba and in west/central BA.

• FC Stone pegged Brazil’s crop at 72.4 MMT. CONAB left their estimate at 78 MMT.

• The USDA raised harvested acres by 436,000 but lowered the yield by 1.6 bushels per acre to 158.8. This lowered production by 27 million bushels.

Crop Updates


Corn Oil Market Pricing Trend

Value Ranges *





• Weekly US export sales were lower than expected at 154,500 metric tonnes of old crop and 20,300 metric tonnes of new crop. Export inspections were below guesses at 19.3 million bushels.

• Weekly US ethanol production was higher than last week and last year. Stocks were higher than last week but below last year. Margins remain positive.

• China rejected 601,000 tonnes of US corn/DDGs in 2013. China’s 2013/14 imports could fall from 7 MMT to 4.4 MMT due to rejections.

• The WASDE report increased feed and residual use by 100 million bushels based on the stocks estimate. Corn used in ethanol production was 50 million bushels higher but this was offset by a reduction in food, seed and industrial use. Ending stocks were lowered 161 million bushels to 1.6 billion.

Flash Summary


Chinese rejections of US corn and DDGs remain in the spotlight.

Monsanto reported corn seed sales down 7% while bean seed sales were 16% higher.

US DDGs in China are starting to pass thru customs, helping to stabilize values.

January 10, 2014

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• The record crop and poor logistics continue to weigh on the market.

Canola/Rapeseed Oil

• Cold temperatures in northwestern Indian growing areas over the last two weeks could lower rapeseed yields. Industry officials expected plantings of 6.97 million hectares vs. 6.5 million last year with production 7.7% higher.

• The Canola Council of Canada said that the crop could reach 26 million tonnes by 2025, more than 40% higher than this year’s record harvest. They are aiming for an average yield of 52 bushels per acre by 2025, up from the current 40. Acreage could increase from 20 million to 22 million.

Crop Updates


Canola Oil Market Pricing Trend

Value Ranges *





• Cumulative crush since August 1 is 2.82 MMT vs. 3.05 MMT at this time last year.

• November canola oil imports were 265 million pounds vs. 298 million last year. October and November imports totaled 563 million pounds vs. 495 million last year.

• The Canadian dollar hit a four year low on Tuesday, sparking buying interest.

• Expectations for farmers to increase their hedges going forward weighed on prices.

• The Canadian government expressed their support of the Canola Council’s new strategy to expand production.

Flash Summary


The downswing in CBOT soyoil is pushing canola prices lower.

The large South American soybean crop further pressured prices.

Short covering ahead of the USDA report offered support.

January 10, 2014

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• Positioning ahead of the MPOB report and the USDA reports was key.

Tropical Oils

• Indonesia’s Ag Ministry pegged 2014 palm oil production at 28 million tonnes, up from 24.4 million in 2013.

• 2014 Malaysian production is seen at a record 19.5 million, up slightly from 2013’s 19.4 million.

• MPOB reported December palm oil production declined 10.43% from 1,861,084 metric tons in November to 1,667,003 metric tons. MPOA reported a 10-12% reduction in palm oil production earlier this week

Crop Updates Palm and Coconut Oil Market Pricing Trends





Expectations for tighter stocks for Q1 continue to offer support.

Record South American production and the decline in crude oil prices fed the bears.

Higher production estimates for Indonesia pressured palm oil prices.

January 10, 2014

Flash Summary

• Palm oil is becoming less competitive compared with soyoil and canola oil. Palm oil’s discount to soy has narrowed to under $60 per tonne.

• Copra crush margins in the PI have improved but are not nearly as good as those in Indonesia.

• The Indian government raised it’s refined oil import duty from 7.5% to 10%. The duty on crude edible oils will remain unchanged at 2.5%. Indonesia may reduce their export taxes in order to maintain steady shipments to India. Malaysia may also consider reducing prices.

• MPOB’s monthly report showed imports up 65.38% to 24,574 metric tons. Exports were reported 1.36% lower at 1,507,554 metric tons. Domestic disappearance was 177,493 metric tons. Month end carryover stocks were 1,985,215 metric tons, up 0.33% from November.

• January 1-10 exports were 21.5% lower as reported by SGS and 22.4% lower from ITS.

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Palm Olein Coconut

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