Global Ag News for Feb 1.24

TOP HEADLINES

 

FUTURES & WEATHER

Wheat prices overnight are down 7 in SRW, down 6 3/4 in HRW, down 3 in HRS; Corn is down 4; Soybeans down 9 3/4; Soymeal down $2.00; Soyoil down 0.30.

For the week so far wheat prices are down 12 in SRW, down 9 1/2 in HRW, down 14 1/4 in HRS; Corn is down 2; Soybeans up 3 1/4; Soymeal up $17.30; Soyoil down 1.21.

Year-To-Date nearby futures are down 6.3% in SRW, down 4.2% in HRW, down 4.7% in HRS; Corn is down 5.7%; Soybeans down 6.3%; Soymeal down 5.1%; Soyoil down 4.4%.

Chinese Ag futures (MAY 24) Soybeans up 7 yuan; Soymeal up 34; Soyoil down 20; Palm oil down 82; Corn up 11 — Malaysian Palm is down 44.  Malaysian palm oil prices overnight were down 44 ringgit (-1.15%) at 3798.

There were no changes in registrations. Registration total: 849 SRW Wheat contracts; 0 Oats; 6 Corn; 495 Soybeans; 125 Soyoil; 1 Soymeal; 214 HRW Wheat.

Preliminary changes in futures Open Interest as of January 31 were: SRW Wheat up 3,770 contracts, HRW Wheat up 1,995, Corn up 11,466, Soybeans down 7,163, Soymeal down 4,066, Soyoil down 1,176.

Brazil: Scattered rain showers are expanding southward for the next several days, getting as far south as Parana by the weekend. The recent break in the rain could be helping with fieldwork, the progress of which has slowed down in recent weeks a bit. Northern areas could be seeing a bit too much rain, which may slow fieldwork progress a bit in some areas. The pace of harvest and planting is still on a near-average pace at this point in the season.

Argentina: It continues to be hot and dry through the weekend, threatening to reduce crop conditions and could quickly turn these good ratings around. Temperatures could eclipse the 100-degree mark on several days across the west and south especially. Soil moisture is declining and is not good for the portion of the crop in reproductive and filling stages, which is sizable for both. Models are indicating better chances for precipitation in the country sometime next week, but disagree on the timing.

Australia: The remnants of Tropical Cyclone Kirrily may still bring showers in Queensland through the weekend and possibly longer. Though some flooding has not be favorable, the rain could help to add to soil moisture for cotton and sorghum, as well as build subsoil moisture for winter wheat later this year. Other areas of the country remain unfavorably dry for the next week.

Northern Plains: Scattered showers are forecast to return this weekend, with snow west and rain east. Additional precipitation is expected by the middle of next week, likely as a mix of rain and snow as well. The precipitation should help with some of the recent dryness in the region. Temperatures will continue to run above normal through next week.

Central/Southern Plains: A system will move through Friday through the weekend with areas of heavy rain and potential snow in Colorado and western Nebraska. Another round of good precipitation would be helpful for dormant wheat.

Midwest: Warm temperatures and rain have eaten away at a lot of the snowpack over the last week. The warmth will continue this week and next. Some flooding will be possible where the combination of snowmelt and rainfall has been the most intense, especially in Illinois. A storm system will likely go around the region this weekend but may clip some western areas with rain. Otherwise, the region will wait until later next week for the next significant chance for precipitation.

Delta: Heavy rain over the last week has improved soil moisture and water levels along the Mississippi River and local rivers, increasing transportation and reducing drought effects. The region will see another system moving through with heavy rain this weekend.

The player sheet for Jan. 31 had funds: net sellers of 4,500 contracts of SRW wheat, sellers of 500 corn, sellers of 500 soybeans, and buyers of 2,000 soymeal.

TENDERS

  • SOYMEAL PURCHASE: Iranian state-owned animal feed importer SLAL is believed to have purchased about 200,000 metric tons of soymeal expected to be sourced from Argentina and Brazil in international tenders.
  • RICE PURCHASE: Indonesian state purchasing agency BULOG is believed to have purchased about 500,000 metric tons of rice in a tender seeking the same volume after price offers were submitted on Monday.

PENDING TENDERS

  • WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 metric tons of milling wheat
  • WHEAT TENDER: The Taiwan Flour Millers’ Association issued an international tender to purchase an estimated 89,650 metric tons of grade 1 milling wheat to be sourced from the United States
  • DURUM WHEAT TENDER TO SELL: Turkey’s state grain board TMO issued an international tender to sell and export 150,000 metric tons of durum wheat.
  • WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy up to 120,000 metric tons of milling wheat, which can be sourced from optional origins.

TODAY

CROP SURVEY: US Soybean Crush and Corn for Ethanol

The following is from a Bloomberg survey of seven anlaysts.

  • Soybean crush seen at 206.5m bu in Dec., a 10.2% rise from a year ago
  • Crude and once-refined soybean-oil reserves at end of December seen at 1.778b lbs, down from 2.306b
  • Corn used in ethanol production seen up 11.4% y/y to 474.4
  • The USDA is scheduled to release its December Fats and Oils report along with the Grain Crushings report on Feb. 1 at 3pm

DOE: US Ethanol Stocks Fall 6.0% to 24.27M Bbl

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

  • Analysts were expecting 25.448 mln bbl
  • Plant production at 0.991m b/d, compared to survey avg of 0.964m

LIVESTOCK: US Cattle Herd Shrinks to Smallest Since 1951

The US Jan. 1 herd fell 1.9% from the same time a year ago, according to the USDA’s semi-annual cattle inventory report.

  • Analysts in a Bloomberg survey were expecting a 1.9% decline
  • Number of cows and heifers that have calved fell by 2% y/y
    • Beef cows down 2.5% y/y and milk cows fell by 0.4% y/y
  • Heifers 500+ pounds fell by 1.5% y/y
  • Last year’s calf crop fell by 2.5% y/y

Argentina Shipping Still Disrupted on Crop Waterway After Crash

Navigation remains interrupted on the Parana River as efforts continue to free a ship lodged against a bridge, the Nabsa shipping agency said in a note to clients.

  • The ship, bulk carrier En May, was sailing to the Bunge-and-AGD-operated T6 port, upstream from Rosario, to load corn when it crashed on Jan. 28 into a support column of the Zarate-Brazo Largo bridge

Soybean oil use for U.S. biofuels production remains unchanged at 1,062 million lbs in November -EIA

Soybean oil used to produce biofuels in the United States remains unchanged at 1,062 million lbs used in November.

Cheap Brazilian Soybeans Spark Surprise US Purchases

  • US rarely imports Brazilian soybeans at this time of year
  • Brazil’s crop is turning out bigger than thought after drought

Brazilian soybeans are so cheap that they’ve attracted rare US purchases.

Three cargoes of the oilseed — used to make cooking oil and animal feed — were sold to American chicken producer Perdue Farms, according to people familiar with the deal. The spot sale surprised traders as the shipment is set to arrive at a time when the US, also a major producer, has just finished harvesting its own crop.

The purchases — if indeed delivered to the US — will represent the first imports of Brazilian soybeans at this time of year since 2019. The US has only imported Brazilian cargoes during January or February on three occasions — 2019, 2009 and 2004. Perdue declined to comment.

It also signals Brazil’s crop is turning out better than first thought after a drought hit the South American nation during the growing season. Output is now expected to be the second-largest on record.

As a result, Brazilian soybeans are trading at a discount of more than $1 per bushel to futures traded in Chicago, according to data from Commodity3. Soybeans loaded in the US Gulf are fetching a premium of 53 cents.

The cargoes are expected to be delivered to the US East Coast next month, said the people, who asked not to be named because the information is private. They will be loaded at Santarem, Barcarena and Itacoatiara ports in the Amazon region, one person said.

While buyers in this part of America typically rely on shipments from Brazil when inventories get tighter through summer months, winter imports are highly unusual as silos tend to be full from the American harvest.

Argentina farm regions set for heat wave, then scattered rains: grains exchange

Argentina’s farm regions are set for a heat wave over the next week, followed by rains that will douse the northern, western and southern regions, but largely miss the center-east zone, the Buenos Aires grains exchange said on Wednesday.

“The outlook will start with winds from the tropics, raising the temperature to above normal in most of the agricultural area,” the exchange said in its weather report covering the first week of February.

“Towards the end of the outlook, a storm front will produce moderate to abundant rains over the north, west and south of the farming area, but without reaching much of the center and east.”

Argentina, one of the world’s top exporters of processed soy, the No. 3 for corn, and an important wheat supplier, is recovering from a drought-hit campaign last year, with better rains so far this season helping push up harvest forecasts.

However, the grains exchanges have warned that recent boosts to their production forecasts for corn and soy could be reversed without good rainfall in the weeks ahead.

Argentina corn production up again on favorable February weather outlooks – Refinitiv Commodities Research

2023/24 ARGENTINA CORN PRODUCTION: 57.1 [52.8–61.6] MILLION TONS, UP <1% FROM LAST UPDATE

2023/24 Argentina corn production is once again increased (<1%) to 57.1 [52.8–61.6] million tons, reflecting now much higher vegetation density levels throughout the main Pampas compared to recent weeks and overall favorable February weather outlooks during the second half of the crop’s prime growth period. Our current estimate puts planted area at 8.2 million hectares, slightly below 8.6 million hectares reported by Bolsa de Comercio in Rosario, but well above the Bolsa de Cereales in Buenos Aires’ 7.1 million hectares. In January’s WASDE (12 January), USDA placed Argentina corn production at 55 million tons, unchanged from its previous update. Bolsa de Cereales in Buenos Aires and Bolsa de Comercio in Rosario currently forecast production at 56.5 and 59 million tons, respectively.

Argentina’s main Pampas region benefited greatly from long awaited rains during November and December, after an extreme drought period that lasted more than 4 months since June. January featured a return to dryness in most major production areas (except southern Córdoba and some areas of Entre Ríos and Buenos Aires), but the current overall healthy soil moisture conditions should provide a decent buffer against the recent pattern. Temperatures have remained consistently below average since the beginning of the season, which has been enormously helpful to crops amid volatile precipitation patterns, and the cool weather is expected to continue (after a brief period of warmth this week) at least for the short term, keeping yield expectations afloat.

Vegetation densities derived from satellite imagery remain well above historical median levels across almost all key producing provinces in the Pampas, reflecting improved soil moisture thanks to recent widespread rains amid cool weather. They are hovering around record high levels in Buenos Aires and Santa Fe, two of the country’s top three corn producing regions, hinting overall better-than-expected national level outputs despite early season delays. The latest February outlook by our LSEG Weather Research team suggests that overall cool and wet conditions are likely to continue throughout the main crop areas of the Argentine Pampas with little risks. Early planted corn is now slowly entering reproductive stages of development, while later planted corn pollination is in full swing at the moment.

Top Vegoil Buyer India Aims to Become Self-Reliant in Oilseeds

The south Asian nation, which imports about 60% of its edible oil needs, targets to become self-reliant in production of oilseeds, Finance Minister Nirmala Sitharaman said in her interim budget speech in parliament.

  • The program will cover research on high-yielding varieties of crops such as mustard, peanuts, sesame, soybean and sunflower seeds, widespread adoption of modern farming techniques, market linkages, procurement, value additions and crop insurance, she said Thursday
    • Note: Top Buyer India Extends Low Edible Oil Import Duty to Cap Prices
  • The government will also launch a comprehensive program to help dairy farmers boost milk productivity per animal
    • Note: India is the world’s biggest milk producer and consumer
  • India plans to enhance aquaculture productivity to 5 tons per hectares, from 3 tons at present
  • Aims to double exports to 1 trillion rupees ($12 billion) and generate employment opportunities for 5.5 million people in the near future
  • Sitharaman retained existing import duties on all products
  • India will launch a new program for bio-manufacturing, including production of bio-agri inputs
  • The government will promote private and public investment in post-harvest activities, including modern storage, supply-chain infrastructure, primary and secondary processing facilities, and marketing

India Predicts Warmer-Than-Normal February in Risk to Wheat Crop

  • Any crop loss may prompt India to keep export curbs for longer
  • Rain is likely to be above-normal in some areas of the country

India forecast warmer-than-usual temperatures across large swathes of the country in February, potentially hurting wheat crops and raising the risk of export restrictions continuing for longer.

Minimum temperatures are expected to be above normal over most parts of the country, said Mrutyunjay Mohapatra, director general of the India Meteorological Department. Maximum temperatures are also likely to be more than average in some areas of northwestern, central and northeastern regions, he said.

While prolonged cold weather during January has been favorable for the wheat crop, any sudden rise in temperatures during the crucial grain-filling stage could hurt yields. That may force the government to continue its restrictions on the shipment of the staple even after the end of national elections in the first half of this year.

The administration of Prime Minister Narendra Modi has curbed exports of wheat, rice and sugar following weaker domestic production as it wants to keep food prices under check before polls. Still, retail inflation hit a four-month high in December due to more expensive farm commodities. Food inflation, accounting for about half of the consumer price basket, climbed to almost 10% last month.

Traders were hoping that the government may lift some restrictions after the elections, but any setback to the wheat crop could dash that optimism. India is the world’s second-biggest producer of wheat, which is normally harvested in March and April.

More from the briefing:

  • Normal to below-normal maximum temperatures are likely in most parts of the peninsular region and some areas of central and northeastern India.
  • Rain is expected to be above-average over the northwestern region, including parts of Uttar Pradesh, Haryana and Punjab, in February.
  • El Nino conditions are prevailing over the Pacific Ocean at present. The weather system may start to weaken after February.

Argentina Shipping Still Disrupted on Crop Waterway After Crash

Navigation remains interrupted on the Parana River as efforts continue to free a ship lodged against a bridge, the Nabsa shipping agency said in a note to clients.

The ship, bulk carrier En May, was sailing to the Bunge-and-AGD-operated T6 port, upstream from Rosario, to load corn when it crashed on Jan. 28 into a support column of the Zarate-Brazo Largo bridge

Brazil 2023/24 Cotton Output Seen At 3.33 Million Tns – Stonex

BRAZIL 2023/24 COTTON OUTPUT SEEN AT 3.33 MILLION TNS, UP 5.1% FROM PREVIOUS SEASON – STONEX

BRAZIL 2023/24 COTTON EXPORTS SEEN AT 2.5 MILLION TNS, UP 50.2% FROM PREVIOUS SEASON – STONEX

EU Delays Plans to Require Farmers to Leave More Land Fallow

  • The move comes amid wave of farmer protests over costs, rules
  • It’s the latest setback for the bloc’s green farming efforts

The European Union delayed plans that would require farmers to leave more of their land fallow to improve biodiversity, after a wave of protests over higher production costs and stringent regulations.

Changing the rules on fallow land have been one of the key points pushed by French farmers’ unions, whose members continue to block highways around Paris and other cities in France.

President Emmanuel Macron said on Tuesday that he would discuss the demands, including more EU flexibility on fallow land rules, with European Commission President Ursula von der Leyen on the sidelines of a summit of the bloc’s leaders this week. Farmers are planning to stage a protest near EU offices in Brussels during the meeting on Thursday.

The delay is the latest setback for the bloc’s efforts to green farming and the food sector. Plans to halve the use of pesticides collapsed late last year, while von der Leyen has been holding meetings with the agricultural sector to try and stave off growing discontent ahead of elections.

The proposed environmental measures have angered farmers faced with extreme weather events, as well as higher energy and input costs due to Russia’s invasion of Ukraine.

Instead of keeping 4% of land fallow, farmers growing nitrogen-fixing crops like lentils and peas on 7% of their land will be considered as meeting the requirement, the commission said in a press release.

Belgian Prime Minister Alexander De Croo said on the social media platform X, that it was an “important step” for farmers. “I am for another postponement. Fewer administrative burdens, often imposed by Europe.”

Thailand Expects 2024 Rice Exports to Fall 14.4% Y/y on El Nino

Thailand’s government forecasts rice exports at 7.5 million tons this year on expected lower output from the El Nino impact.

  • Rice output this year is expected to decline by 5.87% from last year, according to the Foreign Trade Department’s statement on Thursday
  • Intensifying competition from higher global supply this year will also put pressure on the shipments
  • Rice exports totaled 8.76m tons last year, exceeding target of 8m tons, worth $5.14b: statement
  • During Jan. 1-30, Thailand shipped 1.1m tons of rice, up 44% y/y

China says will raise subsidy for high-quality planting for 2024

China will raise the subsidy for high-quality planting for 2024, an official with the ministry of finance said on Thursday.

The country will continue to support its seed industry and develop the agricultural machinery and equipment sector, he said.

US October Biofuels Overview

Brazil Fertilizer Demand Remains in Seasonal Lull

Fertilizer demand remains low in Brazil due to seasonality and declining grain prices. The limited activity reported was focused on inland markets or forward negotiations for soy, which will see a shift in demand to phosphates and potash from nitrogen.

Nitrogen Climbs; Potash, Phosphates Fall

Urea prices were up in Brazil, climbing to $380-$390 a metric ton (mt) cost-and-freight (CFR) from last week’s $365-$370, even as most of the near-term demand in inland markets has reportedly already been covered. Ammonium sulfate firmed slightly in Brazil, to $175-$185/mt CFR from last week’s $175-$180, while potash dropped to $285-$290/mt CFR for the latest offers, down $10 at the top of the range. Monoammonium phosphate (MAP) prices slipped to $550-$560/mt CFR, down $5 from the prior week’s peak, with even softer prices reported at inland locations.

 

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