Global Ag News for Dec 12.23
Argentina temporarily suspends grains export register
Argentina on Monday temporarily suspended its grains export register – a move that comes one day before new President Javier Milei is set to announce a series of economic measures.
Milei was on Sunday inaugurated as president of Argentina, one of the world’s leading grains exporters.
Gustavo Idigoras, head of the grains chamber, said the chamber had received an official communication on Monday afternoon about the suspension, which came into effect at 5 p.m. (2000 GMT) and will remain in force “until further notice”.
Various Argentine governments have in the past suspended the grains register only to reopen it days after announcing economic measures.
Milei’s economic announcements are expected to include far-reaching fiscal changes and cuts to social spending. Markets are also speculating on a possible devaluation of the local peso.
FUTURES & WEATHER
Wheat prices overnight are up 5 in SRW, up 5 1/2 in HRW, up 2 1/2 in HRS; Corn is up 2; Soybeans up 4 1/4; Soymeal up $2.50; Soyoil up 0.16.
For the week so far wheat prices are down 17 1/4 in SRW, down 23 1/4 in HRW, down 15 1/4 in HRS; Corn is down 2; Soybeans up 33 1/2; Soymeal up $11.30; Soyoil up 1.05.
For the month to date wheat prices are up 15 1/2 in SRW, down 5 1/4 in HRW, down 15 1/4 in HRS; Corn is up 1; Soybeans down 2 1/2; Soymeal down $8.10; Soyoil down 0.83.
Year-To-Date nearby futures are down 25.3% in SRW, down 29.4% in HRW, down 24.1% in HRS; Corn is down 32.3%; Soybeans down 11.8%; Soymeal down 10.0%; Soyoil down 19.3%.
Chinese Ag futures (JAN 24) Soybeans up 23 yuan; Soymeal up 22; Soyoil up 10; Palm oil up 40; Corn down 22 — Malaysian Palm is down 6. Malaysian palm oil prices overnight were down 6 ringgit (-0.16%) at 3735.
There were changes in registrations (-67 SRW Wheat, -18 HRW Wheat). Registration total: 2,637 SRW Wheat contracts; 218 Oats; 660 Corn; 596 Soybeans; 62 Soyoil; 0 Soymeal; 318 HRW Wheat.
Preliminary changes in futures Open Interest as of December 11 were: SRW Wheat down 6,305 contracts, HRW Wheat up 102, Corn up 709, Soybeans up 5,548, Soymeal down 6,987, Soyoil down 4,039.
Brazil: Wet season showers in Brazil continue this week, but become isolated by Thursday and continue to be so into next week. Below-normal coverage and amounts will stoke fears about soybean losses again, but heavier rain is forecast to come back in by the end of next week. Southern Brazil is seeing somewhat of a break from the heavy rain of the last few months with limited showers this week. Another front will bring showers back through this weekend and although fronts will move through on a regular occasion, they are less likely to produce excessive rain like we saw in previous months. If this remains true, a slow release of water could start bringing conditions away from excessive wetness.
Argentina: Isolated showers moved through southern areas this weekend while most of the country was dry. Several systems are lining up to move through the country over the next week, bringing widespread showers to most areas that could be heavy in some spots. Conditions continue to be very favorable for the remaining planting and early development of corn and soybeans.
Australia: A storm system developed over South Australia over the weekend that will create some rainfall over the east this week, somewhat favorable for developing cotton and sorghum. Western areas continue to have dryness and drought concerns.
Northern Plains: A system brought some decent snow to North Dakota late last week, but not cold air. Above-normal temperatures will continue this week, especially late week and weekend. It will also be largely dry this week, with some light snow for western areas on Monday but that is probably it.
Central/Southern Plains: Limited showers moved through over the weekend. A system will move into the region on Wednesday with scattered showers for much of the region. The system will be a slow-mover, not getting east of the region until the weekend. Precipitation may be heavy in some areas and just cold enough for some snow in the southwest.
Midwest: A system went through the region over the weekend with streaks of moderate showers and some light snow across the northwest. The region will be largely dry this week with increasing temperatures in the second half of the week. Models disagree about temperatures over the weekend, but are more likely to continue to be very warm by December standards.
Delta: A front brought widespread showers and thunderstorms through the region over the weekend. Hail also moved through some areas. It will be dry for most of the week, but a system will likely bring showers through this weekend. Rainfall in the Tennessee Valley over the weekend are forecast to improve water levels on the Mississippi River throughout the week.
The player sheet for Dec. 11 had funds: net sellers of 7,000 contracts of SRW wheat, sellers of 3,500 corn, sellers of 5,500 soybeans, buyers of 3,500 soymeal, and buyers of 3,000 soyoil.
- SOYBEAN SALES: The U.S. Department of Agriculture reported on Monday that exporters sold 132,000 metric tons of U.S. soybeans to “unknown destination”, for delivery in the 2023/24 marketing year that began Sept. 1.
- SOYMEAL PURCHASE: Algerian state agency ONAB is believed to have bought an unknown volume of animal feed corn expected to be sourced from Argentina and soymeal sourced from optional origins international tenders which closed on Thursday
- SOFT WHEAT, DURUM AND FEED BARLEY TENDER: Tunisia’s state grains agency has issued an international tender to purchase about 100,000 metric tons of soft milling wheat, around 75,000 tons of durum wheat and 50,000 tons of animal feed barley
- MILLING WHEAT TENDER: Bangladesh’s state grains buyer issued another international tender to purchase 50,000 metric tons of milling wheat.
- SOFT MILLING WHEAT TENDER: Algeria’s state grains agency OAIC has issued an international tender to buy soft milling wheat to be sourced from optional origins.
- WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is looking to buy a total of 102,493 metric tons of food-quality wheat from the United States and Canada in a regular tender that will close on Thursday.
- NON-GMO SOYBEAN TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued international tenders to purchase around 20,000 metric tons of food-quality soybeans free of genetically modified organisms (GMOs)
- MILLING WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 metric tons of milling wheat
- WHEAT TENDER: Bangladesh’s state grains buyer issued another international tender to purchase 50,000 metric tons of milling wheat.
- WHEAT TENDER: A government agency in Pakistan issued an international tender to purchase and import 110,000 metric tons of wheat.
US Inspected 712k Tons of Corn for Export, 984k of Soybeans
In week ending Dec. 7, according to the USDA’s weekly inspections report.
- Corn: 712k tons vs 1,176k the previous wk, 517k a yr ago
- Wheat: 282k tons vs 188k the previous wk, 219k a yr ago
US Corn, Soybean, Wheat Inspections by Country: Dec. 7
Following is a summary of USDA inspections for week ending Dec. 7 of corn, soybeans and wheat for export, from the Grain Inspection, Packers and Stockyards Administration, known as GIPSA.
- Soybeans for China-bound shipments made up 504k tons of the 984k total inspected
- Mexico was the top destination for corn inspections, Japan led in wheat
Brazil 2023/24 Soy Planting 91% Done as of Dec. 7: AgRural
Compares with 85% a week earlier and 95% a year before, according to an emailed report from consulting firm AgRural.
- Little rain and heat have made planting and crop development difficult in Brazil’s North and Northeast regions
- Summer corn seeding is 95% complete in Brazil’s Center South region vs 91% a week earlier and 96% a year before
Russia Government Bans Durum Wheat Exports Until May 31
Export ban takes effect immediately and is aimed at maintaining stable prices for durum wheat products on domestic market, government says in statement.
Durum wheat may be exported to Armenia, Belarus, Kyrgyzstan and Kazakhstan within the quotas set by the government
Kansas Winter Wheat Rating Slips to 39% Good/Excellent: USDA
Winter wheat conditions in the top-producing US state fell by a percentage point to 39% rated good or excellent in the week ending Dec. 10, according to data on USDA’s website.
- ‘Very poor’ category was down by a percentage point, while ‘Good’ category also fell by a point
- NOTE: In last week’s report, the good/excellent rating rose by 8 points to 40%
Malaysian Palm Oil Stockpiles Post Surprise Drop on Lower Output
- Inventories down from four-year high in first fall since April
- Drop in production was bigger than the decline in exports
Malaysian palm oil stockpiles unexpectedly dropped last month, the first decline since April, as production in the world’s second-largest grower fell faster than exports.
Inventories shrank 1.1% from October to 2.42 million tons, the Malaysian Palm Oil Board said on Tuesday, retreating from a four-year high. That compared with the median estimate in a Bloomberg survey for a 1.2% gain.
Crude palm oil production declined by 7.7% to 1.79 million tons, the first monthly drop since June. Exports fell 5.5% to 1.4 million tons, lower than 1.52 million tons forecast in the survey.
The magnitude of the drop in exports was a surprise, given that cargo surveys pointed to an increase, said Sathia Varqa, a senior analyst at Fastmarkets Palm Oil Analytics. The decline in production was also more-than-expected and the data overall is neutral to bearish, he said.
Benchmark palm oil futures in Kuala Lumpur were down 0.5% at the midday break. Production is likely to continue to drop in the coming months as palm yields have peaked for the year. That may revive prices that have fallen 11% from a peak in July when output began climbing.
WHEAT/CEPEA: Despite estimates of lower production, prices continue to move down
Wheat prices continue decreasing in this early December, although new projections indicate smaller production and lower quality. The decrease is attributed to the slow pace of purchases of new batches, since wheat mills have been finishing activities of this year.
PRICES – According to data from Cepea, between December 1st and 8th, the prices paid to wheat farmers (over-the-counter market) decreased 2.7% in Paraná and 1.13% in Santa Catarina; on the other hand, values rose 0.54% in Rio Grande do Sul. In the wholesale market (deals between processors), prices dropped 0.78% in São Paulo, 2.07% in Paraná, 1.45% in Rio Grande do Sul and 0.38% in Santa Catarina.
PROJECTIONS – Conab indicates that production in Brazil may total 8.14 million tons in the 2023/24 season, 15.5% less than the November report and 22.8% smaller compared to the record in the crop before (10.55 million tons). This scenario is linked to the lower productivity, estimated at 2.35 tons per hectare, downing 15.6% compared to early November and 31.3% in relation to 2022 (3.42 tons per hectare). The area in Brazil advanced 12.3% against last season, to 3.46 million tons – Conab data.
Due to the lower production, Conab increased imports to 6 million tons from August 2023 to July 2024. Exports are now projected at 2 million tons in the same period.
The domestic availability dropped 5.6% compared to the previous report and is forecast at 14.88 million tons between August/23 and July/24, for a decrease of 5.7% in relation to the crop before.
The consumption continues estimated by Conab at 12.64 million tons, 2% more than the previous crop projection (from August/22 to July/23). Therefore, ending stocks may reduce to 240.8 thousand tons by July/24, 67.5% less than in the previous season (740.4 thousand tons).
France Soft-Wheat Plantings for 2024 Fall 5% Y/y: Ministry
French farmers planted 6.4m hectares of winter-grain crops for the 2024 harvest, according to estimates from the country’s Agriculture Ministry on Tuesday.
- That’s down 5.1% from 2023, and 3.5% below the five-year average
- Soft winter wheat area at 4.5m hectares; down 5.1% y/y and 4.7% of the five-year average
- Durum-wheat area at 205k hectares, down 10.5% y/y
- Barley area at 1.3m hectares, down 4% y/y
- Heavy rains since mid-October, have prevented planting and could lead to postponements of sowing in spring
- NOTE: The majority of French wheat plantings happen over winter
- Winter rapeseed area seen at 1.4m hectares, up 0.5% y/y
Ukraine Shipped 8.6M Tons of Cargo Via Sea Ports Since August 8
Ukrainian exports via Black Sea corridor, which includes the country’s Greater Odesa ports, reached 8.6 million tons, Ukrainian infrastructure minister Oleksandr Kubrakov said at press conference in Kyiv Tuesday.
- Around 70% of exports linked to agriculture and food stuff, according to Kubrakov
- Full operation of Greater Odesa ports may add 8% to Ukrainian GDP, according to ministry’s assessments
- Ministry foresees that December cargo volumes may reach 5m tons
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