(WSJ) As El Niño reaches its peak this winter, investors are already bracing for its sister climate phenomenon, La Niña, to be next to upend weather patterns and potentially wreak havoc on the agricultural commodity market.

Government forecasters in Australia and Japan have in recent weeks said the current El Niño may already have peaked and will ease through the first half of 2016 as temperatures cool on the subsurface of the eastern Pacific Ocean.

By the start of December, this year’s El Niño—the strongest since 1997-1998—had caused sea surface temperatures to rise by more than 3.6 degrees Fahrenheit in places, and driven a rally in agricultural commodities such as palm oil, sugar and dairy. ...continue reading

(Bloomberg) The longest U.S. corn slump since the 1980s has turned into a bumper year for South Dakota’s $220 million pheasant-hunting industry, the nation’s biggest.

Low prices for the No. 1 crop in South Dakota have encouraged growers to leave more land fallow, which helps expand habitat for the speckled game birds that are the official symbol of the state. The Game, Fish & Parks department is forecasting the biggest wild flock in at least five years. At SoDak Sports in Aberdeen, sales of hunting licenses topped last year’s total with a month left in the season.

“We’ve been busy selling gear, lots of ammo, guns,” said SoDak Sports owner A.J. Hoffman, whose sale of hunter orange gear this season has put his store in the black. “People buy guns for their kids, their grandkids.” ...continue reading

Farmer pocketbooks take a hit when they collectively harvest record yields—and the ripple effect eventually lands on the equipment manufacturing floor and dealer lots. USDA projects net farm income in 2015 to be the lowest since 2006, with a drop of nearly 53% from the record high in 2013.

With a decline in manufacturing, more employee layoffs and surplus inventory on dealer lots, equipment companies are working in stride with the current environment. Rabobank analysts foresee equipment sales to be down through 2016 with stabilization likely in 2017, at the earliest. Although this economy is challenging, it presents opportunities for some in the machinery industry. ...continue reading

(WSJ) The strong dollar is stifling U.S. agricultural exports, worsening the strain on farmers already dealing with a collapse in prices and weaker demand.

Federal forecasters project that shipments of U.S. wheat will sink to a 44-year low this season, as buyers from Egypt to Indonesia seek less-costly alternatives. The Agriculture Department predicts corn exports will drop to the lowest in three years, while shipments of beef and pork are down around 10% to 15% by value this year. ...continue reading

(Murray Wise) To read the headlines, you might get the idea that farmland prices are teetering on a ledge, poised for a big fall. The common script is that weak commodity prices will pull land prices down with them. So why did 160 acres of farmland in Champaign County, Illinois, sell on Nov. 18 for $13,156 per acre?

At first, it's tempting to write it off as an outlier -- the sort of thing that happens when a couple of adjacent farmers really want the same field. But it isn't that simple, because in the same auction, another 160 acres went for $11,406 per acre, to an investor. Taken as a whole, including the lesser quality land, we sold 556 acres for $5.98 million that day. ...continue reading

(WSJ) The Environmental Protection Agency Monday issued final regulations that ease the annual requirements for ethanol in gasoline, a response to market restraints and other conditions that are preventing the Obama administration from meeting goals laid out in a 2007 law.

That law compelled refiners to blend an increasing amount of biofuels into the U.S. gasoline supply each year. While the 2007 law set out goals for ethanol use, the EPA was charged with mandating the quotas on a year-by-year basis. ...continue reading

(Bloomberg) Deere & Co., the world’s largest farm equipment manufacturer, forecast fiscal 2016 profit and posted fourth-quarter earnings that beat analysts’ estimates even as lower crop prices reduce the money that growers have to buy tractors and combines.

Net income for the year through October will be about $1.4 billion, the Moline, Illinois-based company said Wednesday in a statement. That was better than the $1.39 billion average of 18 estimates compiled by Bloomberg. Equipment sales will be down for a third year, falling about 7 percent, the company said. ...continue reading

(Agriculture.com) 2016 is looking to be the year of soybeans. Chris Hurt, Purdue University agricultural economist, is predicting corn acreage to be 1.5% to 2% lower and soybean acreage to be around 2% higher for the Midwest’s 2016 growing season. With Hurt’s soybean estimate hitting 84.8 million acres, a new record would be set for total U.S. soybean acreage.

Based on Indiana budgets projected for 2016, quality of land appears to have a $30 to $40 better return for soybeans. Indiana is currently the fifth largest corn-producing state in the U.S. With lenders watching their farm clients closely and some putting restrictions on how much they’ll loan for operating capital, this could have a big influence on 2016 planting decisions.  ...continue reading

(WSJ) As the farm-equipment industry sputters to the end of its worst sales year since 2009, Deere & Co. will soon provide clues to how much more pain is in store for the coming year.

Deere, the world’s largest seller of tractors and harvesting combines, plans to report its fiscal fourth-quarter results on Wednesday. The Illinois-based company is expected to offer a sales outlook that will set the tone for the farm-machinery industry in 2016. Many analysts see a big stepdown in Deere’s projection that would signal a prolonged slump for the sector.

“We know that 2016 is not going to be an up year. The question is to what extent will the decline continue,” said Mircea Dobre, an analyst in Robert W. Baird & Co. “There’s a lot to be cautious about when it comes to agriculture and Deere especially.” ...continue reading

Lower commodity prices are moderating farmland values through the midsection of the U.S., according to a new report from AgriBank, one of the largest banks within the national Farm Credit System.

The report provides an overview of farmland values across the 15-state AgriBank District, including differences by sector and by state. It also reports the latest data on cash rents and looks ahead to how cropland values may fare in the future. ...continue reading