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Oil futures rallied, while gold and silver soared to new records on rising geopolitical tensions. It all seemed to serve as a positive backdrop for agricultural commodities, with wheat, corn, soybeans, cattle and hogs all gaining ground Monday in the first trading session of a holiday-shortened week.
Nearby WTI and Brent crude futures both ended with gains of 2.6% on Monday as the U.S. moved to enforce a blockade on Venezuelan tankers. Crude slumped last week, testing a nearly five year low on fears of a glut. Meanwhile, recent hopes for a Russia-Ukraine peace deal have evaporated. That served to lift crude, which sank last week partly on the prospect of more Russian barrels adding to global supply, and may also be a positive factor for wheat on renewed concerns about transportation in the Black Sea.
Russia intensified its attacks at Ukraine’s Odesa ports in the Black Sea, including Pivdennyi, the country’s largest, according to Bloomberg. A shipping terminal belonging to oilseed firm Allseeds was attacked over the weekend, and the facility was damaged, according to a spokesperson for Vice Prime Minister Oleksiy Kuleba. The company confirmed that its terminal came under bombardment on Dec. 20 and at least one person was killed. Meanwhile, Russia said a drone attack by Ukraine damaged infrastructure and vessels at the Black Sea port of Taman, which handles products including grains, fertilizers and oil.
Also, SovEcon estimated Russia’s wheat exports in the month of December at 3.9 million tons, down from 4.8 million tons last month, but up half a million tons compared to last December.
Wheat was lifted, in part, by apparent short covering, with March SRW up 5 3/4 cents to $5.15 1/2,, March HRW up 6 cents to $5.21 1/4, and March spring wheat futures adding 2 cents to $5.80.
‘Mass confusion’ surrounds SNAP reform
Confusion surrounds Health Secretary Robert Kennedy’s plan to reform the food-stamp program, which is set to take effect Jan. 1, reports Politico.
“It’s just a classic government operation where they’ve thrown this out there, and well-meaning though they may be, it’s caused mass confusion, and it’s making some retailers question whether they’re going to stay with the program or not,” Joe Lackey, president of the Indiana Grocery and Convenience Store Association, told the news outlet.
Eighteen states have put restrictions on using food aid to buy soda and other processed foods, prompted by Kennedy’s Make America Healthy Again agenda. But the bans vary widely from state to state, and the lack of detailed guidance has left local officials, retailers and participants in the nation’s largest anti-hunger initiative struggling to determine which foods are still allowed, the report said. USDA, which runs the Supplemental Nutrition Assistance Program and oversees state plans hasn’t yet offered definitive enforcement guidelines and hasn’t provided a timeline on when it will do so, according to Politico, with some states already announcing implementation delays.
China takes aim at dairy as trade war with EU heats up
China is set to slap provisional duties of up to 42.7% on dairy products imported from the European Union, according to Reuters, the latest in a series of measures against EU exports viewed widely as retaliation for Brussels’ decision to put levies on imports of electric vehicles.
The duties, which take effect Tuesday, will range from 21.9% to 42.7%, the report said, though most companies will pay just under 30%. The targets include unsweetened milk and cream and fresh and processed cheeses, including French Roquefort and Camembert.
Instacart ends controversial price test
Instacart on Monday said it would end its testing of a program that allowed online retailers to charge shoppers different prices for the same products that drew criticism from consumer advocates and lawmakers.
We’ve listened carefully to feedback from our customers. And we understand that the tests we ran with a small number of retail partners that resulted in different prices for the same item at the same store missed the mark for some customers,” Instacart said in a Monday statement. “At a time when families are working exceptionally hard to stretch every grocery dollar, those tests raised concerns, leaving some people questioning the prices they see on Instacart. That’s not okay – especially for a company built on trust, transparency, and affordability.”
A Consumer Reports and Groundwork Collaborative investigation found that some grocery prices differed by as much as 23% per item from one Instacart customer to the next. The report drew a swift reaction, noted Grocery Dive, including the introduction of a Senate bill that would prevent companies from using personal consumer data to set prices and an investigation by the ranking member of the House Agriculture Committee into the company’s pricing practices.
Instacart disputed the Consumer Reports article and denied that the program amounted to “dynamic pricing,” in which sellers use consumer data to make price adjustments. “Even though these tests were not dynamic pricing or surveillance pricing – and were never based on supply or demand, personal data, demographics, or individual shopping behavior – we’ve listened carefully to the feedback from our customers, and we understand these tests fell short of their expectations,” Instacart said.