Global Ag News for Dec 18.23

TOP HEADLINES

US November Soy Crush Beats Estimates, Down From October: NOPA

Processing of 189.038 million bushels tops average trader estimate of 186.23 million bushels, according to National Oilseed Processors Association data released Friday by Thomson Reuters.

• That’s an all-time high for November but slightly below October’s record-large crush of 189.774 million bushels
• Year-ago level was 179.184 million bushels
• Soybean oil stocks stood at 1.214 billion pounds at the end of November, above expectations for 1.116 billion pounds
  • Compares with year-ago level of 1.630 billion pounds

FUTURES & WEATHER

Wheat prices overnight are down 5 1/4 in SRW, down 9 1/2 in HRW, down 6 3/4 in HRS; Corn is down 1 1/2; Soybeans down 4 1/2; Soymeal up $0.80; Soyoil down 0.13.

Markets finished last week with wheat prices up 14 1/2 in SRW, up 1 in HRW, up 12 1/4 in HRS; Corn is unchanged; Soybeans down 26 1/4; Soymeal down $7.20; Soyoil down 1.04.

or the month to date wheat prices are up 26 in SRW, down 9 3/4 in HRW, down 5 1/2 in HRS; Corn is down 1 1/4; Soybeans down 35 1/4; Soymeal down $16.80; Soyoil down 2.03.

Year-To-Date nearby futures are down 21.2% in SRW, down 28.7% in HRW, down 22.9% in HRS; Corn is down 29.0%; Soybeans down 13.7%; Soymeal down 14.9%; Soyoil down 21.8%.

Chinese Ag futures (MAY 24) Soybeans down 7 yuan; Soymeal down 38; Soyoil down 48; Palm oil down 46; Corn down 42 — Malaysian Palm is up 33.  Malaysian palm oil prices overnight were up 33 ringgit (+0.89%) at 3725.

There were changes in registrations (-197 SRW Wheat, -314 Corn). Registration total: 2,149 SRW Wheat contracts; 159 Oats; 11 Corn; 596 Soybeans; 147 Soyoil; 0 Soymeal; 318 HRW Wheat.

Preliminary changes in futures Open Interest as of December 15 were: SRW Wheat down 3,022 contracts, HRW Wheat down 573, Corn up 8,825, Soybeans up 2,674, Soymeal down 2,800, Soyoil up 3,589.

South America: Returning rainfall to Brazil this week and timely rain for that country and Argentina as well as Paraguay and Uruguay over the next two weeks should translate into a favorable environment for summer crop development.

Northern Plains: Forecast show light amounts of moisture through the next ten days to two weeks. Many areas will stay dry or only receive traces of moisture.

Central/Southern Plains & Midwest: Rain and some snow will return to the central and southern U.S. Plains Thursday into next Sunday with moisture totals of 1.00 to 3.00 inches from eastern Texas into the Delta and 0.30 to 1.00 inch with a few amounts to 1.50 inches in the Great Lakes region and upper Mississippi River Basin

The player sheet for Dec. 15 had funds: net buyers of 4,500 contracts of SRW wheat, buyers of 500 corn, buyers of 500 soybeans, buyers of 1,000 soymeal, and  buyers of 1,500 soyoil.

TENDERS

• SOYBEAN SALES: The U.S. Department of Agriculture confirmed private sales of 447,500 metric tons of U.S. soybeans to unknown destinations and another 134,000 tons of soybeans to China, all for delivery in the 2023/24 marketing year that began Sept. 1. The announcement was the USDA’s eighth soybean sales confirmation in as many business days.
• WHEAT TENDER CANCELED: Bangladesh’s state grains buyer canceled and withdrew an international tender to purchase and import 50,000 metric tons of wheat which was due to close on Dec. 27
• WHEAT PURCHASE: Saudi Arabia bought 1,353,000 metric tons of wheat in a tender, the General Food Security Authority (GFSA) said on Monday.
• CORN AND SOYMEAL PURCHASE: Algerian state agency ONAB is believed to have bought at least 30,000 metric tons of animal feed corn to be sourced from Argentina and at least 35,000 tons of soymeal from optional origins international tenders this week.
• CORN PURCHASE: South Korea’s Major Feedmill Group (MFG) purchased some 68,000 metric tons of animal feed corn to be sourced from optional origins in an international tender for up to 140,000 tons.
• FEED WHEAT PURCHASE: South Korea’s Major Feedmill Group (MFG) purchased about 60,000 metric tons of feed wheat in a private deal without issuing an international tender.

PENDING TENDERS

• 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), European traders said. The deadline for submissions of price offers was Dec. 5. The agency has a separate international tender for 50,000 metric tons of soybeans in shipping containers that also closed on Dec. 5.
• WHEAT TENDER: Saudi Arabia’s state wheat buying agency GFSA issued an international tender to purchase 715,000 metric tons of milling wheat
• SUGAR TENDER: Egypt’s General Authority for Supply Commodities (GASC) announced a tender to import 50,000 metric tons of raw sugar from any origin on behalf of the Egyptian Sugar & Integrated Industries Company (ESIIC). Deadline for offers is Dec. 16.
• WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 metric tons of milling wheat
• WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy up to 120,000 metric tons of milling wheat that can be sourced from optional origins
• FEED BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase up to 120,000 metric tons of animal feed barley
• RICE TENDER: Egypt’s state grains buyer the General Authority for Supply Commodities (GASC) set a tender to import natural white wholly milled short-grain Indian rice, it said in a statement. GASC, on behalf of Egypt’s Holding Company For Food Industries, sought arrival of the rice from Feb. 1-19 and/or Feb. 20-March 10. The deadline for offers is Dec. 21 and they should be accompanied by three samples, of two kilograms each, GASC said.
• WHEAT TENDER: A government agency in Pakistan issued an international tender to purchase and import 110,000 metric tons of wheat.

TODAY

NOPA November US soy crush tops most estimates at 189.038 million bu

The U.S. soybean crush in November topped most trade estimates and rose to the second-highest level for any month, following a record-large crush in October, according to National Oilseed Processors Association (NOPA) data released on Friday.

NOPA members, which account for around 95% of soybeans crushed in the United States, processed 189.038 million bushels of soybeans last month, compared with 189.774 million bushels processed in October and a November 2022 crush of 179.184 million bushels.

NOPA said its November crush report included data from two facilities that weren’t previously included in a region that includes the Dakotas, Minnesota and Montana. Also, one crushing plant from another NOPA region, spanning Indiana, Kentucky, Ohio, Michigan and Pennsylvania, was no longer reporting data.

Demand for vegetable oil to produce biofuel has triggered a massive expansion of domestic crushing capacity, with numerous new or upgraded processing plants slated to open over the next several years. Archer-Daniels-Midland Co and oil major Marathon Petroleum Corp opened a new plant in North Dakota last month capable of processing 150,000 bushels of soybeans a day.

NOPA’s November crush fell above the average trade estimate of 185.980 million bushels in a Reuters survey of 10 analysts. Estimates ranged from 183.5 million to 190.4 million bushels, with a median of 185.360 million bushels.

Soyoil stocks among NOPA members as of Nov. 30 rose for the first time in seven months, reaching 1.214 billion lbs, above the average trade estimate and the highest end-of-month oil supply since August.

NOPA members’ oil supplies were up 10.4% from the 1.099 billion lbs on hand at the end of October, which marked a near nine-year low, but down 25.6% from stocks totaling 1.630 billion lbs at the end of November last year.

Analysts, on average, had expected stocks to rise to 1.138 billion lbs, according to estimates gathered from seven analysts.

Brazil 2023/24 Corn Output Estimate Cut to 129.2M MT: Safras

Compares with previous estimate of 135.7m metric tons in September and 140.9m t in the 2022/23 season, according to a report from consulting firm Safras & Mercado.

• Estimate cut due to climate issues, with El Nino hurting planting and development of summet crop
• Corn area estimated at 21.1m ha, a 5.4% drop from the 2022/23 season
• Corn yield seen at an average of 6,115 kg/ha, vs 6,190 kg/ha in September estimate and 6,309 kg/ha last season
• Estimate for summer crop in Brazil’s Center-South region cut to 26.4m t from 26.9m t in September

India Nov. Oilmeals Exports Rise to 317,870 Tons

India’s oilmeals exports rose to 317,870 tons in November from 289,931 tons in October, according to the Solvent Extractors’ Association of India.

• Rapeseed meal exports fell to 93,124 tons from 169,422 tons in October
• Soymeal exports rose to 183,429 tons from 87,060 tons in October
• Castorseed meal exports rose to 40,655 tons from 31,469 tons in October

CORN/CEPEA: Index is close to BRL 70/bag; pace of trades is still slow

Cepea, 15 – Sellers continue concerned with weather conditions and its possible impacts on the supply in the coming months. This scenario has been keeping the pace of trades slow in the Brazilian spot market.

Some consumers, in turn, need to replenish inventories, especially at the end of the year, at the same time that exports are moving at a good pace. Purchasers are focused on the summer crop, since the area reduced and it can shrink even more due to high temperatures in parts of the Southeast and to heavy rains in the South.

In this scenario, corn prices are moving up in most regions surveyed by Cepea, including at ports. The ESALQ/BM&FBovespa Index (Campinas, SP) rose 9% in the partial of December (up to Dec. 14). Not even the supply from the Central-West, which registered a record production in 2022/23, has limited price rises. From December 7-14, the Index upped 3.7%, closing at BRL 68.21 per 60-kilo bag on Dec. 14.

On the average of the regions surveyed by Cepea, between Dec. 7 and 14, corn values increased 5.2% in the wholesale market (deals between processors) and 2.3% in the over-the-counter market (paid to farmers).

So far, Conab projects the 2023/24 summer crop area to be 9% smaller compared to that in 2022/23, resulting in a production of 25.31 million tons, which would be 7.5% lower than the previous. The second season may also register lower production.

PORTS – Between December 7 and 14, price averages in Paranaguá (PR) and Santos (SP) upped 2.9% and 2.7%. Price rises were not higher because of decreases of international values and of dollar quotes.

As for shipments, Secex indicated on Dec. 11 that 2 million tons were exported in only six working days of December, which already accounts for 32% of the total amount sold in December 2022.

In case the current pace of 333 thousand tons per day continues, shipments may total more than 7 million tons in December, which is close to the range indicated by Anec (from 6.8 million to 7.49 million tons).

CROPS – While producers from the Southeast are delayed in crop activities because of high temperatures, in the South, the excess of rainfall in the first months of the sowing limited activities and reduced the productive potential of the crops. As a result, planting activities reached 65.9% of the area in Brazil up to Dec. 9, according to Conab – in the same period last year, the percentage was 76.6%.

SOYBEAN/CEPEA: Producers are away from trades; prices move up again

Cepea, 15 – Soybean prices are moving up again in the Brazilian market, influenced by concerns with the 2023/24 productivity, because of weather issues. Although recent rains in the Southeast and in the Central-West had favored crop activities, the soil moist is still below what is ideal for the soybean activity. This scenario pushed away producers from trades involving big amounts in the spot market. Moreover, the upward trend is also related to estimates indicating firm demand from China in the 2023/24 season.

SUPPLY AND DEMAND – The USDA released a report on December 8 indicating that Brazil may produce 161 million tons (2 million tons less than what was released in November), still a record.

Crop activities continue delayed in relation to the previous season. Conab indicates that sowing activities reached 89.9% of the area in Brazil until December 9, below the 95.9% verified a year ago.

Moreover, the USDA estimates that China imports 102 million tons of soybean, 2% higher than the projection of November and a record. Brazil may continue as the major global soybean supplier, shipping the record amount of 99.5 million tons in the 2023/24 crop (the USDA considers the crop-year in Brazil from October/23 to September/24). In the partial of this season (from October to December 8th this year), Brazil exported 11.9 million tons, 44.3% up compared to that in the last quarter of 2022, according to Secex.

Between Dec. 7 and 14, the ESALQ/BM&FBovespa Index (Paranaguá) and the CEPEA/ESALQ Index (Paraná) rose 1.6% and 2%, respectively, to BRL 147.64 per 60-kg bag and BRL 140.70/bag on Dec. 14. On the average of the regions surveyed by Cepea, soybean prices upped 0.5% in the over-the-counter market (paid to farmers) and 0.9% in the wholesale market (deals between processors).

BYPRODUCTS – Consumers of soybean oil were willing to purchase the product at the beginning of this week, in order to replenish inventories for the end of the year, which increased quotations. As for soybean meal, liquidity is lower. Most purchasers say they will close deals again only in late January/24.

Abroad, international soybean prices were sustained by weather issues in Brazil. However, the weak demand for the product from the United States limited significant increases.

India Has No Plan to Import Wheat From Russia: Food Secretary

The government will also refrain from cutting or scrapping import duty on wheat as of now, Food Secretary Sanjeev Chopra told reporters in New Delhi on Friday.

Russia is not interested in extending Black Sea grain deal – RIA

Russia has no interest in extending the Black Sea grain deal, the RIA news agency reported on Sunday, citing Russia’s agriculture minister Dmitry Patrushev.

He added that to a large extent this is a political decision, but Russia will continue to export its grain, as it has its buyers.

“Our grain export volumes, taking into account the winding down of the grain deal, have by no means fallen, they even slightly increased,” RIA quoted Patrushev as saying.

Russia withdrew in July from the deal which had allowed Ukraine to safely export grain from its Black Sea ports. Russia says it quit the deal because the arrangement was not delivering grain to the poorest countries, and because it still faces barriers to its own exports of grain and fertiliser.

Drought-hit Panama Canal to increase shipping slots to 24 – Reuters

The Panama Canal on Friday said it will increase the number of booking slots available in its Panamax and Neopanamax locks, after a severe drought caused one of the world’s main maritime trade routes to reduce ship crossings.

From mid-January, the canal authority said in an advisory, it will have 24 transit slots per day, compared to the 18 it had planned in a prior announcement. The additional slots will cover the regulars, supers and neopanamax vessel categories.

The authority said the changes were based on the current and expected levels of the artificial Gatun Lake, which provides the millions of liters (gallons) necessary to operate the waterway.

Applications for the new slots will begin in coming weeks to begin transit on Jan. 16, it said.

The authority warned, however, that due to the continuing water crisis it would for transit dates starting on Jan. 16, allow only one booking slot per customer per date, regardless of when the slot was booked – with some exceptions tied to auction and competition slots.

Slots are prioritized according to highest bid in auction processes, full containers, market and customer rankings.

The customer limit and prioritization of slots will continue until further notice, it added.

Panama’s drought, worsened by the El Nino weather phenomenon which warms the Pacific Ocean, has pushed up fees and traffic at the canal, forcing fuel tankers and grain shippers to take longer routes to avoid congestion.

An alternative route takes ships down South America’s entire Atlantic coast, crossing the Strait of Magellan at the continent’s icy southern tip and heading back up the Pacific coast tracks.

River Rhine in south Germany reopens to shipping after high water

The river Rhine in south Germany has been reopened to shipping after being closed last week after a rise in water levels following heavy rain and melting snow, German authorities said on Monday.

Rhine river shipping had been stopped around Maxau and Speyer in south Germany on Tuesday. But water levels have fallen again to levels permitting ships to operate, a spokesperson for the German inland waterways navigation agency WSA said.

High waters mean vessels do not have enough space to sail under bridges and the blockage prevented vessels sailing to Switzerland.

Shipping on northern sections of the river have operated normally in the last week, despite a rise in water levels, including the important points of Duisburg, Cologne and Mannheim.

The Rhine is an important shipping route for commodities including minerals, coal and oil products such as heating oil, grains and animal feed.

The Rhine has repeatedly suffered from low water levels because of unusually dry summers in recent years.

Green Jet Fuel Subsidy Plan Signals Lifeline for Ethanol Makers

• US Treasury chooses approach backed by ethanol industry
• How to measure greenhouse gases has been point of contention

The Biden administration unveiled a long-awaited sustainable aviation fuel plan that appears to provide a path for makers of corn ethanol and other crop-based biofuels to claim valuable tax credits.

The Treasury Department said its green jet fuel guidance will include a revised version of the Energy Department’s emissions-measuring method known as GREET, a model for calculating greenhouse gas emissions backed by ethanol makers. The corn-based biofuel industry, which is under pressure to slash its carbon pollution, has worried that without GREET it could be excluded from potentially lucrative subsidies.

US farmers and ethanol producers had been lobbying the government for months to back the GREET model as part of tax credits included in President Joe Biden’s landmark climate bill. While final details of how greenhouse gas emissions from producing sustainable aviation fuel will only be fully unveiled next year, the inclusion of the GREET model is seen by the ethanol industry as a step in the right direction.

Read more: Fate of US Corn Farmers Hinges on Future of Green Air Travel

“While there are important carbon modeling details that still need to be worked out, we are optimistic that today’s guidance could open the door to an enormous opportunity for America’s farmers, ethanol producers, and airlines,” Renewable Fuels Association President Geoff Cooper said in a statement.

The guidance also includes a carbon dioxide measuring approach pioneered by the United Nations’ aviation arm that environmentalists contend is more rigorous. The Inflation Reduction Act states that calculating emissions reductions from SAF production should be done by the UN tool or a similar methodology. Environmentalists say the question now is whether the update to GREET will be as stringent.

“We will have to wait until March to better understand whether the administration is going to hand out the tax credit based on sound science and consistent with congressional intent,” said Mark Brownstein, a senior vice president for the Environmental Defense Fund.

About a third of the US corn production is used to make ethanol, which is blended into gasoline. With electric vehicles becoming more widespread, sustainable aviation fuel is set to provide a lifeline to many ethanol producers.

“Key to this was the importance of the Treasury Department recognizing and appreciating the importance of the GREET platform,” said Agriculture Secretary Tom Vilsack. “This is a big, big deal for American agriculture and for farming.”

Beleaguered China Feed Giant to Sell Poultry Stake to Raise Cash

• Meat market suffers from slow recovery in consumer demand
• Sales will improve capital security and reduce debt pressure

New Hope Liuhe Co., China’s top animal feed maker and leading meat producer, is selling controlling stakes worth 4.2 billion yuan ($590 million) in two core operations to raise cash after heavy losses this year.

The company will sell 51% of its poultry business to state-owned China Animal Husbandry Group for 2.7 billion yuan, and 67% of its food processing unit to Hainan Shengchen Investment Co. for 1.5 billion yuan, according to filings to the Shenzhen exchange Friday. Hainan Shengchen is an investment platform under the parent company New Hope.

New Hope Liuhe, along with other meat producers, has been struggling to make a profit because of sluggish consumer demand as China’s recovery from the pandemic proves slower than expected. It posted a net loss of 874.9 million yuan in the third quarter, bringing losses this year to 3.86 billion yuan.

Other companies have also been looking to sell some China operations. Cargill Inc., the top agricultural commodities trader, agreed to sell its Cargill Protein China business to private equity firm DCP Capital, a spokesperson said in May. The deal was expected to close in 2023, subject to regulatory approval.

Tyson Foods Inc., the biggest US meat company, was exploring a potential sale of its China business, people with knowledge of the matter said in August. The process was at an early stage, they said.

US Beef Production Up 2.6% This Week, Pork Rises: USDA

US federally inspected beef production rises to 547m pounds for the week ending Dec. 16 from 533m in the previous week, according to USDA estimates published on the agency’s website.

• Cattle slaughter up 2.2% from a week ago to 649m head
• Pork production up 1.1% from a week ago, hog slaughter rises 0.6%
• For the year, beef production is 5% below last year’s level at this time, and pork is 0.6% above

 

Interested in more futures markets?  Explore our Market Dashboards here.