El Nino chances increasing
SYDNEY, Australia (Reuters) — Recent warming of the Pacific Ocean may signal an El Nino weather event, the Australian Bureau of Meteorology said.
Climate models indicate the central tropical Pacific Ocean is likely to continue to warm, with El Nino thresholds to be reached or exceeded by mid-year, the weather bureau said.
“There is about a 50 percent chance of El Nino developing in the coming months, which is twice the normal likelihood,” the bureau said.
Should an El Nino occur, the system would likely bring below-average winter and spring rainfall over eastern Australia and above-average daytime temperatures over the southern half of Australia.
Such climatic conditions would prove a blow for Australian wheat production, which is reliant on rains in winter and spring. An El Nino during Canada’s summers normally brings warmer, drier weather.
Australia’s wheat production is expected to total 24.39 million tonnes in the 2015-16 season starting July 1, Australia’s chief commodity forecaster said this month, up three percent from this year’s 23.61 million tonnes.
Another season of poor wheat production from Australian east coast farmers will also extend problems for GrainCorp Ltd. , the country’s largest bulk grain handler.
GrainCorp said in February its 2015 full-year earnings are expected to hit a five-year low as drought along the east coast curbs grain production.
Kraft, Mondelez charged with price manipulation
WASHINGTON, D.C. (Reuters) — The U.S. Commodity Futures Trading Commission last week charged Kraft Foods Group Inc. and Mondelez Global LLC, respectively, with manipulation and attempted manipulation of cash wheat and wheat futures prices.
The regulator said it was seeking a permanent injunction from future violations by the two companies, as well as disgorgement and civil monetary penalties.
EU strikes deal on biofuel
BRUSSELS, Belgium (Reuters) — The European Union reached a tentative deal last week on a seven percent limit on how much crop-based biofuel can be used in the transport sector, EU sources said.
The agreement on a legal text, thrashed out by representatives of the European Commission, the European Parliament and member states follows years of argument on traditional biofuels, which were once seen as better for the environment than fossil fuels, but are now considered less so.
The compromise deal should mark almost the final stage in establishing a new piece of EU law, although it still needs official endorsement.
The environment committee of the European Parliament is expected to vote on it on April 14 and then a plenary session of the Parliament will have to endorse it, parliamentary sources said. Current legislation requires EU member states to ensure that renewable sources account for at least 10 percent of energy in transport by 2020.
But research has shown that biofuels can drive up food prices by using crops normally used for food. As well, using farmland to produce biofuels adds pressure to create more farmland through deforestation, which can increased greenhouse gas emissions.
Russia restocking program sets high price
MOSCOW, Russia (Reuters) — Russia’s agriculture ministry has set high wheat prices for its restocking program in the 2015-16 marketing year, which starts July 1, raising the possibility that the government will not have to extend a tax on wheat exports.
The ministry, which has 1.7 million tonnes of grains in state stocks, buys grain on the domestic market every year in what is known as grain interventions.
It said last week that it would offer 9,700 roubles (US$166) per tonne for third-class wheat in the European part of the country starting from July 1.
At the end of last week, domestic prices for third-class wheat were down 350 roubles at 9,950 roubles per tonne in that region, according to the SovEcon agriculture consultancy.
The market price for wheat has been declining in recent weeks and is expected to fall further as the new harvest hits the market in late June or early July.