One of Europe's oldest and most recognized trading companies for pulses and birdseeds has been purchased by Canadian company, Alliance Grain Traders Inc, or AGTI. 

Announcement of acquiring A. Poortman (London) Ltd. Group, an international importer, distributor and stockist of pulses, was made by AGTI earlier this week. The C$13.5 million deal includes a processing plant for dry edible beans and pulses located in Tianjin, China and trading and sales offices in Europe. AGTI has also committed a further C$2 million for expansion of the Chinese bean processing facility. Poortmans' balance sheet also includes net working capital of approximately C$8 million. 

AGTI says the business was acquired from Andrew Jacobs, the managing director of Poortmans and Trinidad Benham Corporation, a leading U.S. packaged foods company. Jacobs will remain with the company in a management role. 

Murad Al-Katib, AGTI president and CEO, notes the purchase of Poortman helps with AGTI's continued expansion into the global dry edible bean industry. 

"Among other things, it gives us a processing presence in China, one of the world's most important dry bean exporting regions,"  he says in a news release. "Poortmans has an established presence with many of the leading European canners and packagers as well as pulses and birdseed ingredient users. This acquisition enhances our distribution platform in Europe and our sourcing ability for beans, lentils, chickpeas and birdseeds from origins all over the world." 

Al-Katib says that Poortman has excellent supplier and customer relationships with numerous leading food companies and many customers who regularly buy the products that AGTI produces.

Chalk up a win for Ontario vegetable producers, who've convinced the Canadian International Trade Tribunal that Canada has been a chronic dumping ground for sweet bell peppers from the Netherlands.

Last week the tribunal announced it would uphold a complaint from the Ontario Greenhouse Vegetable Growers that farmers in the Netherlands repeatedly sold bell peppers into the Canadian market dirt cheap. 

That action, said Ontario farmers, caused injury, and they wanted it stopped. 

So earlier this year, producers asked the Canadian Border Services Agency to investigate how sweet bell pepper imports from Holland were being priced. In September, the agency said greenhouse-grown peppers originating or exported from the Netherlands were being dumped, and that the practice that had gone on for years. 

The agency's verdict led to last week's decision by the tribunal. 

OGVG chair Len Roozen said his organization is pleased with the results. 

"The finding of injury to Canadian growers, and the resulting duty imposition, restores a level playing field for our growers (who) want to compete on the basis of fair trading practices," he says. "This case demonstrates that we are prepared to defend ourselves if necessary." 

The public spanking has long-term implications for the Dutch, as sweet bell peppers from the Netherlands will be subject to a duty here for five years. 

For its part, Canada has a lot to lose when dumping occurs. According to the growers' association, farmers have made "substantial investments" in greenhouse technology to meet market demand for Canadian grown vegetables, including sweet bell peppers. 

And over time, the sector has become among the biggest in North America, producing more than 1,800 acres of greenhouse tomatoes, cucumbers and peppers.

The Canadian Food Inspection Agency can now fine those who mistreat and improperly transport livestock up to $10,000. 

The first increase in over 10 years, this more than doubles the previous maximum penalty of $4,000 on those who violate the Health of Animals Act. 

Soon after Agriculture Minister Gerry Ritz announced the amendments last week, agriculture agencies across the country threw their support behind the crackdown. 

The Chicken and Turkey Farmers of Canada believe the increased fines for those who mistreat and improperly transport livestock, combined with the augmented enforcement of regulations, will help to ensure that animals are given safe and humane transport. 

"The ultimate goal of all partners in animal agriculture - from breeder, to farmer, to inspector and processor - is to ensure that farm animals are treated humanely at every step and are healthy and free of injury upon arrival at the plant," says Mark Davies, TFC Chair. 

The Dairy Farmers of Canada says the heightened regulations and higher fines are another tool to prevent mistreatment or improper transport of livestock animals. It complements its 2009 publication, Code of Practice for the Care and Handling of Dairy Cattle. 

Jacques Laforge, president of DFC, says the code -- the first of its kind in the livestock industry -- delivers a clearly established set of good practices that are based on sound science. 

"Dairy farmers across Canada use the code of practice as part of their day-to-day operations to ensure that they are delivering the proper care and treatment of dairy cattle on-farm, including in the preparation and loading of cattle for transport." 

Dave Solverson, chair of the Canadian Cattlemen's Association's animal care committee, says consumers need to know that the vast majority of animals in transit, and in every day of their lives, are safe and in excellent health. 

"Recent research in the west and in Ontario shows that over 99.9 per cent of cattle arrive at their destinations without incident and we are working on improving this number," Solverson says. 

CCA is doing further research on transport, renewing the beef code of practice through the National Farm Animal Care Council and the CCA's financial commitment and work to expanding the certified livestock transporter course through an AgriFlexibility project. 

The CFIA retains the ability to increase fines by up to 50 per cent of the maximum fine for repeat offenders. It now has the ability to look into the past five years - instead of three years - of an offender's history. This means that if an offender commits a second very serious violation within five years, the CFIA can impose a fine of up to $15,000, instead of the previous maximum of $6,000. 

To read the amended regulation go to: http://www.gazette.gc.ca/rp-pr/p2/2010/2010-10-27/html/sor-dors215-eng.html.

There will be a strong global demand for Canadian canola in the coming year. 

That's according to Thomas Mielke, the executive director of the well known vegetable oil publication, Oil World. 

"I expect that there will be a new debate between food and fuel in 2011 because of the likelihood of appreciating prices," he says. "(That's) due to insufficient production on one hand and further considerable growth in requirements from the expanding biodiesel industry driven by (government) mandates." 

In fact, Mielke believes some of those biodiesel mandates in the European Union may have to be readjusted if production cannot be sufficiently raised. Demand for all types of edible oil (soybean, palm and canola) continues to rise in countries such as China and India. 

"The trend is clear. Demand is strong and producers worldwide have difficulties in satisfying consumption. Stocks will continue to decline. The stocks-usage ratio will be comparatively small at only 10 per cent. This is critically small. There is no cushion for any surprises, which makes the market, I believe, quite volatile," Mielke says. 

All of this is good news for Canadian canola producers, who have seen prices rise steadily since harvest. As for marketing, Mielke recommends not waiting. 

"I would start selling already at the current very attractive prices," he says. "I see the possibility of prices moving up a little for Canadian canola early in 2011."  

The outlook is much brighter for Canadian canola now than it was a year ago. Farmers were surprised when China imposed a zero tolerance level for the canola disease blackleg on imported seed in November 2009. 

"Because blackleg is fairly common across western Canada, even though it is at low levels, we could not meet a zero tolerance," says Joanne Buth, president of the Canola Council of Canada. "We could have been shut out of that market completely." 

There could have been serious consequences because China purchased 2.8 million metric tonnes of Canadian canola seed during the 2008-2009 crop year, making it our No. 1 customer. Another one million metric tonnes was bought between August and November 2009. 

The Canadian government and the Canola Council spent a lot of time negotiating with their Chinese counterparts to find a compromise. Eventually, Canadian canola seed was allowed into four crushing facilities located on the Chinese coast -- far away from domestic rapeseed crops. 

Buth estimates these plants processed about 1.2 million metric tonnes, pushing 2009-2010 exports to approximately 2.2 million tonnes. 

"We've also added another crusher, so now we have access to five and we could be looking at a couple more," she says. 

Buth also remains optimistic about reaching the Council's Growing Great 2015 goal. It calls for 15 million metric tonnes of sustained production within the next five years. 

"We're seeing the new varieties have a tremendous ability to compensate (for poor weather) and we're seeing increased yields with the hybrids. I think things are looking really promising for 2015," she says. 

Canadian farmers grew 12.6 million tonnes of canola in 2008 and 12.4 million tonnes last year. While the final numbers are not in yet for 2010, the estimates are in the 11 million tonne range due to excessive rain and flooded land in the prime canola growing regions of northeast and east central Saskatchewan.   

With a picture perfect growing season behind them, producers in Canada's largest potato growing province are optimistic the strong harvest will fetch top dollar. 

At one point in the season, the industry was staring at a bumper crop. Weather conditions during planting and the heat of the summer were as close as it ever comes to perfect. However, a dry August revised those projections down to "above average."

Good weather during the first two weeks of October allowed producers to get the bulk of the crop in the warehouse by the end of the month. Unlike the last two years, when wet weather during harvest forced growers to leave significant acreage in the field, Brian Beaton, potato specialist with the Department of Agriculture, says losses due to wet weather should be minimal. 

Beaton says good growing conditions have resulted in a good looking crop going into storage. He adds "the colour looks really good and that was a concern for the past couple of years."  

Boyd Rose, chair of the P.E.I. Potato Board, is also optimistic about how the crop looks, and is hoping that will translate into good prices. He notes many parts of Europe had low yields due to weather. Idaho, which produced a record crop in 2009, was also down. 

Rose says the elements are all in place for Island producers to get a good price. 

"If we don't make money on this year's crop, I don't know when we are ever going to do it," he says.

So far, he says the signs have been encouraging. Despite the strong Canadian dollar, exports were up 35 per cent at the end of October compared to the previous year. The chair says sales were up in both the United States and Europe and "the exporters I have been talking to say they are getting more inquiries." Rose says Canadian shipments were on par with last season in October. 

Island growers planted 84,500 acres in 2010 -- a decrease of 500 acres from 2009. Rose says the contracts worked out with Cavendish Farms and the McCain Foods will see the processors contract more total volume than in 2009. 

"Analysis by the board shows we will have no difficulty in moving our entire crop and that there is no need to force anything into the market," the chair says. "We need good money for this crop to cover our 2010 production costs and help repay some of the substantial losses from last year."

The Canadian Crop Hail Association reports payouts in 2010 adding up to $155 million and 16,000 claims by Prairie producers. 

In 2009, payouts totalled $76 million and in 2008, payouts hit a record high of $341 million. 

In a news release, the association states that in 2010, just over $264 million was collected from producers in premiums. With $155 million in payouts, this is an industry-wide loss ratio of just under 59 per cent. The loss ratio in 2009 was approximately 29 per cent, while in 2008, more money was paid out than collected in premiums and the loss ratio was 118 per cent. 

In Alberta, farmers are receiving roughly $38 million in hail claim payouts on a total of over 2,500 losses. This is for the hail insurance claims over and above crop insurance endorsements. 

About $62 million was collected in premiums, so the loss ratio is around 61 per cent -- a reduction from the previous two years. In 2009, the loss ratio was 83 per cent on payments of $49 million. In 2008, the loss ratio was 147 per cent. 

Payments in 2010 are close to the ten year average in Alberta. However, the entire hail season -- from June to September -- was busy. 

Despite a significant drop in Saskatchewan seeded acreage due to excess moisture, the amount of hail insurance purchased by producers was down only slightly, the association states. While many regions of the province experienced record high rainfall during the growing season, hail claims and payouts were about average. 

The difference in 2010 is that the storms were lighter in severity with damage spread over a larger geographic area than usual. There were no particularly large storms, but hail adjusters faced logistical issues as they moved from one area to another and dealt with field access issues relating to all the rainfall. 

Preliminary data shows a total of roughly 11,600 claims and total payouts of nearly $103 million. This is a loss ratio of roughly 62 per cent. 

At roughly 2,200, the total number of claims in Manitoba is below the five-year average. Payouts are estimated at $14.8 million, which is approaching the average. Last year, payments were $12.2 million. 

The total premiums collected from producers are $37.6 million, generating a loss ratio of 39 per cent. The loss ratio in 2009 was less than 29 per cent. In 2008, it was 35 per cent, the association states.

Beef, pork and sheep producers in Nova Scotia are teaming up to save money and co-ordinate their efforts. 

Pork Nova Scotia, the Nova Scotia Cattle Producers and the Sheep Producers Association of Nova Scotia have come together to form a new organization called the Agri-Commodity Management Association. 

Brad McCallum, the 27-year-old executive director of the association, is an agrologist who comes to the job from a position at Agriculture and Agri-Food Canada. 

He says the Agri-Commodity Management Association isn't going to supplant the pork, beef and sheep producers' groups. Rather, it's going to provide professional services, help co-ordinate lobbying efforts, reduce overhead and produce research, background and briefing notes while looking for new opportunities for red meat producers. 

High on the list of services the association will offer is the administration of Agriculture and Agri-Food Canada's Advance Payments Program, which provides cash advances on the value of agriculture products. 

With over 800 members, the cattle producers' association far outnumbers the pork and sheep farmers. But McCallum says he's not worried that their interests will swamp those of the other groups. 

"The three producer groups will still continue to exist. We're working with their boards directly, providing services to them," McCallum says. "They will each continue to do their own lobbying efforts. Our job will be to provide them with background information to help them with those efforts and to see where they can work together on initiatives as a single group." 

McCallum says that serving farmers means they will have more time to go about the business of agricultural production, rather than spending volunteer time on administration. 

"The pork board has been without a general manager for two-and-a-half or three years," he says. "Now, there's an organization in place to provide background information and attend meetings on their behalf. Having someone there to take care of business for them means they can attend to their own businesses." 

Nova Scotia's Department of Agriculture is providing $300,000 in startup funding to the group, which expects to be self-sufficient within three years. 

McCallum hopes to also bring in funds by taking on contracts (like administering APP payments) from other commodity groups, or providing short-term services like event organization. 

"One of the biggest challenges is the reason I'm here," McCallum says, "working together and co-ordinating efforts. Returning profitability to the sector is not going to be easy, but it can be done."

A new project that will analyze and compile statistical information on 13 areas of pork production will help Quebec producers better understand and promote their industry, says the head of the province's hog producers' federation. 

"We need a tool like this," says Jean-Guy Vincent. "It will help us in our discussions with (government and farm financing agencies) and give transparency and credibility to our production practices." 

The Quebec Pork Producers Federation announced the year-long project last week. Two private firms will research and gather information on 13 sustainable development indicators involved with pork production. 

The 13 indicators -- such as environmental, social and economical -- were identified over the past two years by a working group of representatives from 30 agriculture, environmental and municipal groups. 

The study will look at issues like the use of agro-environmental and farm-health practices in pork production, changes in phosphorus discharges, greenhouse gases and ammonia emissions, animal care practices, public perception of the pork industry and the level of involvement of pork producers in their community.

The study will also look at economic indicators like added value, net agricultural income (before depreciation), pork consumption, equity ratio and research and development allocations, as well as proportion of market-derived income and the economic spinoffs generated by pork production in Quebec. 

According to Vincent, the collection and analysis of information will let the province's pork producers measure their sustainable development.

Issues like the focus on end of the month position squaring, the lead up to this week's midterm elections in the United States and their federal reserve meeting earlier in the week – all combine for a strong past month for grain markets all around. 

Following are highlights of the past month, Sept. 30, to the time of writing this piece on Nov. 2: 

Corn
Based on today's close (Nov. 2), Chicago Board of Trade December corn futures have rallied 80 cents a bushel. Since gapping higher Oct. 11, prices have consolidated. 

A move through either the top or the bottom end of the consolidation range will set the next major market move. On Monday, Nov. 1, the contract tested the top end of the range, as bulls still have $6 a bushel as their next objective. 

Ahead of the Nov. 9 United States Department of Agriculture crop production and supply-demand report, private trade estimates forecast a small revision lower in U.S. corn production -- down into the 12.5 to 12.6 billion range. Though most, if not all, of the expected decline could be offset by lower demand in this report as exports are sluggish. 

Current market fundamentals seem to be priced into the market, leaving market bulls with little to rekindle the rally for now. Seasonal trends favour firmer prices following harvest, though, as off-the-combine selling pressure eases. End users will likely, in time, need to improve cash price levels to cover demand. 

However, more attention will be directed towards the need to ensure an increase in 2011 U.S. corn acreage, keeping traders watching soybean prices into the end of the year. Soybeans have more fundamental factors at work, with strong demand from China and the need for good production from South America and the possible impact of La Nina influencing weather. 

Soybeans
January bean futures have rallied $1.18 -- a quarter from the last trading day in September to Nov. 2.

Over the past number of trading sessions, the contract has flirted with its highest closing value since early September 2008. Next resistance from the monthly chart is the 2009 high of $12.91 quarter. 

I am a little wary of the MACD -- Moving Average Convergence Divergence -- indicator on the price chart starting to roll lower. However, we saw the same thing occur at the beginning of October, just before the Oct. 8 USDA report set the bull momentum afire. 

What's in store for the upcoming Nov. 9 USDA report? 

In making forecasts ahead of this report, there's little to go on with respect to soybeans, other than historical patterns to the U.S. production estimate, which slightly favour a decline. Anecdotal reports from harvest results are spotty at best. This report has the possibility of containing a bearish surprise, but we are going with the weight of history and looking for a slight yield decline of 0.1 bushels per acre. That's based on the mathematical expectation calculation of the yield change from October to November in years when the October crop estimate was below the September estimate. This results in a U.S. bean crop estimate of 3.403 billion bushels. USDA could be justified in raising its 2010-11 bean export and domestic crush estimates slightly, thus a reduction to USDA's bean carryover should result. 

Wheat
Minneapolis December wheat futures have rallied more than 40 cents from the last trading day in September to Nov. 2. On Monday, Nov. 1, the contract tested the top end of the entrenched three month trading range in the U.S., $7.80 to $7.90 per bushel region.

U.S. wheat futures have a sense of "overboughtedness," at least in my opinion. There continues to be concern about dry weather conditions across U.S. hard red winter wheat areas, but there is still time for conditions to improve and there are indications of showers in the long term forecast. This leaves demand -- which remains sluggish -- as the focal point for wheat prices. 

Worries about the U.S. crop seemed to be overshadowed for the moment by uncertainty around the U.S. congressional elections and the Federal Reserve meeting ending Wednesday. Market participants are watching to see what impact these events ultimately have on the U.S. dollar. 

Overall
I am wary of major political developments such as the ones of this week and their potential influence on global macro-economic issues in the immediate days ahead -- and ultimately the trickledown effect for the grain markets. 

The biggest near-term determinate of health of commodity markets may in fact be developments in stock and currency markets. As long as equity markets maintain stability and the U.S. government prints more money (weighing on the U.S. dollar), commodity markets will remain well supported. But the day the U.S. government pulls it's stimulus and equities break is the day that the commodity world may falter.

Mike Jubinville of Pro Farmer Canada offers information on commodity markets and marketing strategies. Call 204-654-4290 or visit www.pfcanada.com to find out more about his services.