World Grain - September 2012 - 15

A ﬂour art museum story | No. 6

newsreview
Glencore earnings decline 8% in first half of 2012
BAAR, SWITZERLAND — Glencore International reported on Aug. 21 an 8% drop in earnings for the ﬁrst half of 2012, due to falling prices and global economic weakness. Glencore said its net proﬁt from JanuaryJune of this year was $2.275 billion, a drop from the $2.474 billion reported for the ﬁrst half of 2011. Revenues of $108 billion were up 17% from the $92 billion reported for the same period last year. “Financial markets were relatively optimistic entering 2012, following the sovereign debt-related challenges experienced during H2 (second half) 2011. This optimism generally faded as the half progressed and, with it, expectations for economic growth and commodity prices,” said Chief Executive Ofﬁcer Ivan Glasenberg. “Concerns over how precisely the European situation would and could be resolved have continued to erode global risk appetite. For the world’s two most important economies, the U.S. and China, 2012 is essentially a year of political transition. Each of these factors extends into H2 2012 and is likely to hinder the gradual process of underlying economic recovery following the 2008 ﬁnancial crisis.” Glencore announced on March 19 that it will acquire Viterra Inc., subject to regulatory and shareholder approvals. Viterra’s shareholders voted to approve the acquisition on May 29. Substantially all regulatory approvals have now been received, including competition and foreign investment clearances in Canada and Australia. The only outstanding approval remaining is MOFCOM, China. A decline in average prices for many key commodities was mostly offset in the ﬁrst half of the year by strong sales of metals, minerals and agriculture, Glencore said. Grain prices were directionless and range bound in H1 2012 and, for most of the period, were below the price levels of H2 2011 and well below price levels of H1 2011. Oilseed prices, having reached a low early in the year, subsequently increased as Argentine production fell short of expectations due to an extended drought for the second year in the past three. At the end of H1 2012, a drought in the U.S., FSU and Eastern/Southern Europe began to impact both grain and oilseed production forecasts and increase prices. Subsequently, with continuing dry and hot weather, particularly in the U.S., it has become apparent that production shortfalls will be severe and supply/ demand will consequently be extremely tight, Glencore said. H2 2012 is therefore likely to be a considerably higher priced and more volatile environment than H1 2012. The E.U. biodiesel business continues to be very challenging with new capacity coming on stream in 2012 despite poor margins. Imports of soy-based biodiesel from South America have eroded E.U. biodiesel demand as has an effective reduction of the E.U. biodiesel use mandate.

Cake in honour of the moon.
Everywhere in the world, ﬂour is more than just a nutritional staple. Sweet baked goods have a special place in all cultures. For example, in China alongside everyday baked goods there are special items made only for certain occasions and holidays. One of these is the mid-autumn festival, also called the Harvest Moon Festival, celebrated each year on the 15th day of the 8th lunar month on a night with a full moon. It is one of the year’s most important festivities, and is celebrated with family and close friends. People give each other little round "moon cakes", with sweet or savoury ﬁlling, made round to look like the full moon and decorated with wishes for harmony, happiness, or long life on the top. www.ﬂour-art-museum.de www.muehlenchemie.de
For more information, see Page 118.

Canadian wheat output up 7% from 2011
OTTAWA, ONTARIO, CANADA — Production of all wheat in Canada was forecast up 7% from 2011, while canola outturn was expected up 9% and record high, Statistics Canada said Aug. 22 in its Estimate of Production of Principal Field Crops report. Based on data collected from July 25 to Aug. 1, Statistics Canada forecast higher production of all crops in 2012 except oats, which was down just slightly from 2011. Summer fallow acreage was down 63% at 4,605,000 acres. “Overall, weather conditions in the west this year have been closer to normal, following two years of excess moisture conditions in parts of Manitoba and Saskatchewan,” Statistics Canada said. Total Canadian wheat production was forecast at 27,012,900 tonnes, up 7% from 25,261,400 tonnes in 2011, including spring wheat at 19,058,400 tonnes, up 6% from 18,031,300 tonnes, durum at 4,272,800 tonnes, up 2% from 4,172,100 tonnes, and winter wheat at 3,681,700 tonnes, up 20% from 3,058,000 tonnes a year ago. “The increase is anticipated despite a decline in average yield from 42.1 bushels per acre in 2011 to 41.5 bushels per acre in 2012,” Statistics Canada said of the wheat crop in the three Prairie provinces. “The decline in yield would be offset by an 11.4% increase in harvested area to slightly under 22 million acres.” Statistics Canada forecast 2012 canola production at a record 15,409,500 tonnes, up 9% from 14,164,500 tonnes in 2011, which was the previous record. Corn production was forecast at 11,703,100 tonnes, up 9% from 10,688,700 tonnes in 2011. Soybean outturn was forecast at 4,405,300 tonnes, up 4% from 4,246,300 tonnes last year. Fall rye production in 2012 was forecast at 312,300 tonnes, up 60% from 194,700 tonnes last year.

www.World-Grain.com / World Grain / September 2012

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World Grain - September 2012

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