Global Ag News for Dec 29.23

TOP HEADLINES

Argentina raises domestic biofuel prices

Argentina on Thursday raised the prices of biodiesel and bioethanol for their mandatory blending with gasoil used in the domestic market, according to two resolutions published in the government’s official gazette.

The energy secretariat hiked minimum biodiesel prices around 34% to 923,590 pesos ($1,143.84) per metric ton.

It also raised minimums for sugar cane-based bioethanol 34% to 465.84 pesos per liter and corn-based bioethanol by 28% to 463.91 per liter.

“The payment period for biodiesel may not exceed, in any case, seven calendar days as from the date of the corresponding invoice,” the first resolution stated, while the second resolution said the payment period for bioethanol may not exceed 30 calendar days from the date of invoice.

Both resolutions are effective immediately.

FUTURES & WEATHER

Wheat prices overnight are up 1/2 in SRW, up 2 1/4 in HRW, up 2 in HRS; Corn is down 1/2; Soybeans down 1; Soymeal down $1.50; Soyoil up 0.04.

For the week so far wheat prices are up 15 3/4 in SRW, up 23 in HRW, up 13 1/4 in HRS; Corn is up 3/4; Soybeans up 4 3/4; Soymeal down $1.90; Soyoil down 1.00.

For the month to date wheat prices are up 34 in SRW, up 3 in HRW, down 2 in HRS; Corn is down 9; Soybeans down 51 1/4; Soymeal down $25.00; Soyoil down 4.03.

Year-To-Date nearby futures are down 20.2% in SRW, down 27.3% in HRW, down 22.5% in HRS; Corn is down 30.2%; Soybeans down 14.1%; Soymeal down 18.5%; Soyoil down 25.6%.

Chinese Ag futures (MAY 24) Soybeans up 12 yuan; Soymeal down 18; Soyoil down 84; Palm oil down 90; Corn up 1 — Malaysian Palm is up 5. Malaysian palm oil prices overnight were up 5 ringgit (+0.13%) at 3744.

There were changes in registrations (-61 SRW Wheat, 260 Soybeans). Registration total: 1,295 SRW Wheat contracts; 159 Oats; 6 Corn; 707 Soybeans; 147 Soyoil; 0 Soymeal; 291 HRW Wheat.

Preliminary changes in futures Open Interest as of December 28 were: SRW Wheat down 3,782 contracts, HRW Wheat up 2,700, Corn up 2,846, Soybeans down 5,873, Soymeal down 9,158, Soyoil down 1,739.

Brazil: Isolated showers late this week will become more widespread by this weekend and into the new year, helping to turn around conditions for pod-setting soybeans in central Brazil. The next chance for widespread rainfall in southern areas will return on Friday and some isolated areas of heavy rain are possible. However, the heavier rain will not be as negative of a factor for developing corn and soybeans given the period of dry weather that occurred through the first half of this week. Showers will become more isolated across southern areas next week with the bulk of precipitation shifting farther north into central Brazil.

Argentina: Showers have been frequent lately, keeping soils moist. Moderate to heavy rain showers will develop in northern Argentina today, but some of the heaviest showers will miss the main growing areas. Throughout this weekend, showers will become more isolated and mainly impact western areas. More isolated showers are forecast through early next week, but any substantial rainfall will be hit or miss. Temperatures will be near to below normal this weekend into early next week which should help reduce crop stress for areas that miss most of the precipitation over the next seven days.

Australia: Dryness across the west is concerning for cotton and sorghum, but not so much in the southeast. Scattered showers will develop across the southwest this weekend but by early next week, showers will become limited across the west. Northeastern areas will continue to see steady chances for rain through New Year’s Day which is favorable for developing crops.

Northern Plains: Temperatures will continue to be above normal through New Year’s day. High pressure will keep conditions mostly dry across the region through this weekend and into early next week, but a few stray snow showers may develop at times as weak systems pass by to the north and east of the region. No widespread, heavy precipitation is forecast through early next week.

Central/Southern Plains: In the wake of the strong low pressure system that impacted the region earlier this week, mostly dry conditions will return today and persist into this weekend. Temperatures will remain slightly below normal for the Southern Plains and near to above normal for the Central Plains. By New Year’s Day, scattered rain showers may develop across eastern Texas.

Midwest: Temperatures will remain above normal through New Year’s Day with some of the warmest temperature anomalies expected across northern areas. Rain and snow showers will linger in eastern areas through the end of the week as a system slowly advances east. Another round of light snow showers is possible this weekend as a system from Canada digs south. Through early next week, mostly dry conditions will return with high pressure developing.

Delta: Recent widespread rainfall helped increase soil moisture for much of the region and water levels on the Mississippi River and its tributaries rose slightly. Some rain and snow showers will linger across Missouri Thursday and Friday but high pressure returns this weekend, leading to drier conditions. Scattered rain showers will return across southern areas by New Year’s Day which should relieve some areas of drought.

The player sheet had funds net buyers of 4,000 contracts of SRW Wheat; sellers of 1,500 corn, sellers of 1,500 soybeans, sellers of 2,000 Soymeal, and; net sellers of 2,000 lots of Soyoil.

TENDERS

• WHEAT TENDER CANCELED: Egypt’s state grains buyer the General Authority for Supply Commodities (GASC) said it had canceled an international purchasing tender for wheat held on Thursday with no purchase made, confirming earlier reports from traders. GASC gave no reason or other details. Traders said they believed prices offered were regarded as too high.
• MILLING WHEAT PURCHASE: Bangladesh’s state grains buyer has purchased about 100,000 metric tons of milling wheat in two international tenders, which closed earlier in December, an official at Bangladesh’s food ministry said on Thursday. The official said Bangladesh planned no more tenders for wheat in the current financial year, which starts in July and ends in June.

PENDING TENDERS

• 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 was Dec. 21 and they should be accompanied by three samples, of two kilograms each, GASC said.
• WHEAT TENDER: Jordan’s state grains buyer issued an international tender to buy up to 120,000 metric tons of milling wheat sourced from optional origins.

TODAY

GRAIN EXPORT SURVEY: Corn, Soy, Wheat Sales Before USDA Report

Estimate ranges are based on a Bloomberg survey of four analysts; the USDA is scheduled to release its export sales report on Friday for week ending Dec. 21.

• Corn est. range 600k – 1,400k tons, with avg of 967k
• Soybean est. range 800k – 1,900k tons, with avg of 1,358k

DOE: US Ethanol Stocks Rise 2.7% to 23.517M Bbl

According to the US Department of Energy’s weekly petroleum report.

• Analysts were expecting 22.923 mln bbl
• Plant production at 1.107m b/d, compared to survey avg of 1.062m

Argentina Soy Plants Start Life With Good Water Levels: Bourse

More than 90% of soy plants have favorable-to-optimum water levels on fields, the Buenos Aires Grain Exchange said in a weekly report.

• Soy planting progress is 79%
• “Over the last 15 days the recovery in soil moisture has been notable,” the Rosario Board of Trade said in a separate report
  • Rosario analysts noted the possibility of more volatile weather after recent storms brought downpours, gales and hail, damaging some farms
  • “El Nino has improved the productive outlook for soy and corn, but we’re concerned about the violence of storms”
• Buenos Aires bourse said it’s too soon to measure damage to wheat plants from last week’s storms
  • Wheat forecast kept for now at 14.7m metric tons, harvest progress 71%

Argentine Soy, Corn, Wheat Estimates Dec. 28: Exchange

The Buenos Aires Grain Exchange releases weekly report on website.

• 2023-24 corn and soybean planting estimates both unchanged
• Corn planting advanced to 70% complete from 59% in the previous week
• Soybean planting advanced to 79% complete from 69%

CORN/CEPEA: Record production presses down values in 2023

Cepea, 28 – Corn prices started 2023 at firm levels, sustained by low ending stocks and concerns with the weather in the Southern area in Brazil, which had already been affecting the first crop. However, despite the delay of the second crop planting, weather conditions have favored the development of the plants, resulting in a record supply in the crop year. As a result, from April to June, values dropped steeply, but continued stable in the following quarter. From September onwards, due to the good pace of exports and the fact that players are concerned with the 2024 season, corn quotations increased, recovering a share of price drops.

According to data from Conab, the three crops in 2022/23 totaled 131.94 million tons, a record. Exports amounted 49 million tons from February to December, according to Secex. China was the major destination of the Brazilian product.

In the first semester (from December 29, 2022 to June 30, 2023), the ESALQ/BM&FBovespa Index (Campinas, SP) dropped 35.7%. The average of BRL 74.13 per 60-kilo bag in the first half of 2023 was 20% lower than that verified in the same period of 2022, in nominal terms. In the second semester (up to December 27), the Index rose 23%, averaging BRL 58.23/bag, 30% lower than that registered in the same period last year.

In global terms, the 2022/23 production was estimated by the USDA at 1.16 billion tons, downing 5% compared to the crop before. For Brazil, the USDA indicated an increase of 18% in the production.

As a result, Brazil became the biggest corn supplier to the international market in 2022/23, surpassing exports from the US: 53.29 million tons were shipped by Brazil, while 42.83 million tons were exported by the United States, according to the USDA.

SOYBEAN/CEPEA: Supply is higher than demand; annual price is the lowest since 2019

Cepea, 28 – Both Brazilian and global soybean supply hit a record in the 2022/23 season. In Brazil, despite the longer process of planting and difficulties during the harvest, productivity was significant, which was responsible for offsetting the smaller supply in the United States and Argentina and guaranteed a record 2022/23 supply, of 374.39 million tons, according to the USDA. As a result, soybean prices moved down in 2023.

Brazil harvested the record of 160 million tons of soy in 2022/23, for an increase of 22.6% compared to the season before. The US harvested 116.22 million tons, 4.3% down in the same comparison. In Argentina, La Niña was intense, causing a significant lack of water; therefore, the production totaled only 25 million tons, the smallest volume since 1999/2000.

Due to the high supply, 2023 has started with decreases for soybean export premiums in Brazil, which registered negative levels, a scenario that had not been observed since June/21, considering the first contract.

Between March and April, besides the higher domestic supply, producers were willing to trade because of the need to make cash flow. Thus, soybean prices were pressed down and export premiums were the lowest since 2004.

In the second semester, the Brazilian industry was willing to purchase soybean. This scenario boosted the competition between domestic and international purchasers, increasing quotations in the Brazilian market. Moreover, Brazilian soybean growers were refrained from sales involving big amounts, and some of them preferred to hold the product left from 2022/23, expecting higher values.

From September to October, prices resumed moving down, influenced by international price drops, which was linked to the 2023/24 crop in the US and to the high volume of product left from 2022/23 in Brazil. In the last two months of 2023, quotations were sustained by the firm demand and unfavorable weather conditions for the 2023/24 planting in Brazil.

From January to December 22, Brazil exported a record volume of soybean, of 100.76 million tons, 28% more than that registered in the entire year of 2022. Shipments to China (major destination for the national product) increased 32.8%, amounting 71.19 million tons up to November. Argentina was the second major destination, with 3.98 million tons sold by Brazil.

As for prices in the domestic market, the ESALQ/BM&FBovespa Index (Paranaguá) and the CEPEA/ESALQ Index (Paraná) registered the lowest annual averages since 2019, in real terms (IGP-DI Nov/23), at BRL 149.37 per 60-kg bag and BRL 142.12/bag, downing 17.2% and 19.6% between 2022 and 2023.

Turkish Production of Cereals, Other Crops Rise in 2023

Production of cereals and other crops in 2023 rose by 10.3% from the previous year, statistics office says in statement.

• Vegetable production increased by 0.6% while output of fruits, beverage and spices crops rose by 2.3%
• Cereal production rose 9.1% to about 42.2m tons
  • Wheat production rose 11.4% to 22m tons
  • Barley production rose 8.2% to 9.2m tons
  • Sugar beet production rose 22.1% to 23.5m tons

Zelenskiy says Black Sea corridor exports have reached 12 mln tonnes

President Volodymyr Zelenskiy said on Thursday that Ukraine’s alternative Black Sea export corridor — introduced after Russia withdrew from a U.N.-brokered deal to guarantee safe shipment of Ukrainian grain in July — had sent out 12 million tonnes of cargo so far.

He added in his nightly video address that the corridor had produced “particularly significant results for December, and this is felt at the level of our entire economy.”

China’s sow herd at 41.6 mln at end Nov, down 1.2% m/m

China had 41.6 million sows at the end of November, down 1.2% month-on-month and down 5.2% from previous year, the Ministry of Agriculture and Rural Affairs said on Thursday.

The number of pigs slaughtered in November rose 44.6% from a year ago to 32.8 million heads, the ministry said.

Farmers had in recent months ramped up slaughter of hogs as they grappled with low prices, high costs and increasing outbreak of African swine fever.

India Refiners Raise Price of Ethanol for Blending With Gasoline

State-owned refiners will pay more for procuring ethanol, extracted from C-heavy molasses, for blending with gasoline, according to the country’s oil ministry.

• To improve ethanol availability, government-controlled oil marketing companies will increase the price by 6.87 rupees (8 cents) a liter for ethanol made from C-heavy molasses, a byproduct of sugar making, it said in a post on X, formerly known as Twitter
• NOTE: The government had set the price of C-heavy molasses at 49.41 rupees a liter for ethanol supply year 2022-23

US Miss. River Grain Shipments Fall, Barge Rates Decline: USDA

Barge shipments down the Mississippi river declined to 509k tons in the week ending Dec. 23 from 657k tons the previous week, according to the USDA’s weekly grain transportation report.

• Barge shipments of corn fell 39% from the previous week
• Soybean shipments down 1% w/w
• St. Louis barge rates were $12.73 per short ton, a decline of $0.12 from the previous week

 

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