Global Ag News for Feb 22.24

TOP HEADLINES

Brazil meatpackers complain about delays to issue health certificates

The Brazilian Animal Protein Association (ABPA) complained on Wednesday that companies are facing delays in the issuance of international health certificates, a situation that can disrupt exports and meat supplies.

Issuance of such certificates has been delayed since the end of January, when federal auditors started to demand a restructuring of their career and better work conditions, ABPA said in a statement.

“The mobilization immediately puts live cargo at risk and compromises the import and export of genetic material, which are highly sensitive to transit time,” said ABPA, which represents companies including JBS JBSS3.SA and BRF BRFS3.SA. “In the short term, the delay in production lines could impact product supply.”

ABPA urged the government to find a negotiated solution with the auditors.

Anffa, the union group that represents federal auditors, did not have an immediate comment related to ABPA’s concerns.

FUTURES & WEATHER

Wheat prices overnight are up 1 in SRW, up 2 1/2 in HRW, up 4 1/2 in HRS; Corn is down 3/4; Soybeans up 1 1/4; Soymeal up $0.20; Soyoil down 0.04.

For the week so far wheat prices are up 20 in SRW, up 15 1/2 in HRW, up 10 1/2 in HRS; Corn is down 6; Soybeans down 10; Soymeal down $2.00; Soyoil down 0.70.

For the month to date wheat prices are down 26 1/4 in SRW, down 43 1/4 in HRW, down 32 in HRS; Corn is down 35; Soybeans down 66 1/2; Soymeal down $27.20; Soyoil down 1.16.

Year-To-Date nearby futures are down 7.1% in SRW, down 9.4% in HRW, down 8.4% in HRS; Corn is down 12.9%; Soybeans down 10.2%; Soymeal down 11.3%; Soyoil down 6.4%.

Chinese Ag futures (MAY 24) Soybeans up 5 yuan; Soymeal down 29; Soyoil down 8; Palm oil down 10; Corn up 22 — Malaysian Palm is down 24.  Malaysian palm oil prices overnight were down 24 ringgit (-0.62%) at 3839.

There were changes in registrations (-22 Soybeans, -25 HRW Wheat). Registration total: 772 SRW Wheat contracts; 0 Oats; 6 Corn; 219 Soybeans; 125 Soyoil; 1 Soymeal; 56 HRW Wheat.

Preliminary changes in futures Open Interest as of February 21 were: SRW Wheat down 1,066 contracts, HRW Wheat down 5,539, Corn up 5,372, Soybeans down 10,234, Soymeal down 4,079, Soyoil down 8,644.

Brazil: Wet season showers in central Brazil have been heavy recently. Southern areas have seen only isolated amounts. The heavy rain is preferred as most of the safrinha corn planting has been completed and the region is short of subsoil moisture. Southern areas could use more rainfall, however. Scattered showers continue in central states through this weekend before becoming isolated. A front coming north from Argentina will bring heavier showers this weekend into next week for southern areas.

Argentina: A front moving through on Thursday should bring some needed showers and another Sunday into Monday should do something similar. A more active pattern is forecast into early March, favorable for reproductive to filling corn and soybeans.

Europe: A large storm system will move through starting on Wednesday with widespread impacts throughout the continent in several waves going into next week. In addition to widespread precipitation, temperatures will drop across the western half of the continent, but only back to normal.

Australia: Eastern areas will see potential for showers this week. Southwestern areas will watch for the potential of tropical remnants to move through this weekend. Soil moisture is low in many areas well ahead of the harvest and subsequent wheat planting and will need much more rain to fall over the next couple of months.

Northern Plains: It should be mostly warm and dry through the weekend. A larger storm system is likely to move through early next week with widespread precipitation possible, including some snow. Temperatures will dip only briefly before becoming above-normal again later next week.

Central/Southern Plains: A system will move through Wednesday night and early Thursday with some limited showers. Otherwise it should be dry through the weekend. A larger system will move through early next week with potential for widespread precipitation, including potential for some snow, and a brief drop in temperatures before they rise a day or two later.

Midwest: Well above-normal temperatures this week will mean that a system that comes through Wednesday night and especially Thursday will spread rain across the southern half of the region. A smaller clipper system may bring showers to eastern areas this weekend. A larger storm will move through Tuesday and Wednesday of next week, with widespread precipitation including thunderstorms and snow. A drop in temperatures will only be brief as they rise again a day or two later.

Delta: A system will move through on Thursday with scattered rain showers and a larger storm will move through next Wednesday, likely with more showers. The region continues to see the building of soil moisture ahead of spring planting.

The player sheet for Feb. 21 had funds: net sellers of 1,000 contracts of SRW wheat, sellers of 7,000 corn, sellers of 8,000 soybeans, sellers of 4,000 soymeal, and sellers of 2,500 soyoil.

TENDERS

  • FEED WHEAT PURCHASE: Japan will import 3,140 metric tons of feed-quality wheat for livestock use via a simultaneous buy and sell (SBS) auction that closed late on Wednesday, the Ministry of Agriculture, Forestry and Fisheries (MAFF) said.
  • WHEAT PURCHASE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 115,921 metric tons of food-quality wheat from the U.S., Canada and Australia in a regular tender that closed on Thursday.
  • MILLING WHEAT TENDER: Jordan’s state grain buyer has issued an international tender to buy up to 120,000 metric tons of milling wheat which can be sourced from optional origins.
  • BARLEY TENDER: Jordan’s state grains buyer has issued an international tender to purchase up to 120,000 metric tons of animal feed barley.

PENDING TENDERS

  • RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 88,800 metric tons of rice to be sourced from the United States and China.
  • FEED GRAIN TENDERS: Iranian state-owned animal feed importer SLAL issued international tenders to purchase up to 120,000 tonnes of animal feed corn, 120,000 tons of feed barley and 120,000 tons of soymeal
  • VEGETABLE OILS TENDER: Egyptian state grains buyer, the General Authority for Supply Commodities (GASC), said it was seeking vegetable oils in an international tender for arrival March 25-April 15 and/or April 16-30. The deadline for offers is Feb. 22.
  • WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 metric tons of milling wheat.

 

cargo ships on waterways

 

TODAY

 

ETHANOL: US Weekly Production Survey Before EIA Report

Output and stockpile projections for the week ending Feb. 16 are based on seven analyst estimates compiled by Bloomberg.

  • Production seen lower than last week at 1.079m b/d
  • Stockpile avg est. 25.982m bbl vs 25.81m a week ago
    • Would be the highest since March of last year

Argentina Soy Forecast Cut by 5% to 49.5m Tons: Rosario

A prolonged heat wave on Argentina’s Pampas crop belt a few weeks ago has “ended the possibility of a bumper soybean season,” the Rosario Board of Trade said in its monthly estimates report.

  • The February forecast was cut from January’s 52m metric tons as yield potential dropped and some fields were ruined altogether
  • Rains that fell in the second week of February stopped soy plants from deteriorating even further
  • The corn forecast was also cut by 3.4% m/m to 57m tons

Expected rains in Argentina seen helping soy, corn crops, grains exchange says

Expected rainfall over the next few days in Argentina’s Pampas region will likely boost the 2023/24 soybean and corn crops, though the precipitation is seen falling largely in the north of the country’s main farmland, according to a report on Wednesday.

The climate report from the Buenos Aires grains exchange (BdeC) pointed to “moderate to abundant” rains of around 25 to 100 millimeters (1-4 inches) expected over the northern Pampas region as well as northern parts of Argentina’s Mesopotamia region, around the provinces of Misiones and Corrientes.

Along southern areas of the country’s top-producing farmland, moderate to scarce rainfall is forecast, the BdeC report said, but it was unlikely to exceed 25 millimeters.

Agricultural powerhouse Argentina is one of world’s largest exporters of processed soybeans, as well as a major corn and wheat supplier. Precipitation during the southern hemisphere’s summer is key to the crops’ development.

Heavy rains in early February were credited with staunching damage to the current soybean and corn crops after a period of dry and hot weather in January had threatened the expected bumper crops of both grains.

The 2023/24 cycle is expected to yield 52.5 million metric tons of soybeans and 56.5 million tons of corn, according to BdeC estimates, with harvesting set to kick off from April.

Brazil soybean production slightly down despite rapid harvest pace – Refinitiv Commodities Research

2023/24 BRAZIL SOYBEAN PRODUCTION: 149.6 [143.5–155.8] MILLION TONS, DOWN <1% FROM LAST UPDATE

2023/24 Brazil soybean production is fractionally lowered to 149.6 [143.5–155.8] million tons despite a rapid harvest progress early in the season, with less than favorable weather conditions ahead potentially hindering late season developments. Our current median estimate is 6.4 million tons below the USDA’s World Agricultural Outlook Board (WAOB)’s 156 million  tons, which assumes soybean sowings at 45.9 million hectares and national level yield of 3.40 tons per hectare (tph) (vs. LSEG Ag Research’s 46 million hectares and 3.25 tph, respectively). Brazil’s agriculture state agency (CONAB) has recently pegged soy production and area at 149.4 million tons and 45.1 million hectares, respectively. Both USDA and CONAB have revised downward their Brazil production estimates compared to last month, directionally in line with what we have been calling for since the beginning of the season.

Mixed weather conditions were depicted across Brazil’s major corn and soy producing areas during the first half of February. Over the past two weeks, temperatures throughout the country were mostly above average (between 2-5 °C above normal), except in the South and far Northeast where rather cool weather was prevalent. Abnormal dryness continued across the Central-West and the South (up to 40 mm below normal), while most of the upper Southeast regions received some above average precipitation. Overall the weather conditions were favorable for both first crop corn/soybean harvests and the second crop safrinha corn sowings, though poor soil moisture conditions remain a threat to late season crop development. Exacerbating soil moisture deficits for areas in grain fill (for first crop corn)/pod fill (for soybeans) and vegetative development (for second crop corn) should continue to be monitored closely.

As of 17 February, Brazil’s soybeans are 29.4% combined nationally according to the latest CONAB crop progress report (19 February), well ahead of last year’s  pace of 23% as well as the four-year average. This is impressive given severe delays that took place earlier in the season, and if the pace keeps up it will likely lower the second crop safrinha corn’s yield risks as second corn is planted after soybeans are harvested. Satellite imagery continues to show contrasting conditions across core soy areas, with near record low vegetation density in Mato Grosso and Paraná, the top two soy producing states of Brazil, but near to above historical median levels in most of the rest of the major crop regions. Moving forward, the Southeast and some areas of the Northeast will likely continue to receive overall above average rains, but the rest of the country is expected to remain warm and dry, which should help promote harvest while hindering late season crop growth.

3Tentos Soy Crush Soars; Biodiesel Seen Lifting Demand Further

Tentos Agroindustrial SA reported revenue at its industry business unit in 2023 reached 4.689 billion reais ($952 million), a 56% increase from a year earlier, according to an earnings release published on Tuesday.

  • Unit is responsible for soy crushing to produce meal and biodiesel
  • The company’s new Mato Grosso plant is now running at full capacity, COO João Marcelo Dumoncel said during an earnings call on Wednesday
  • Demand is set to climb further, with share of biodiesel blended into diesel for country’s fuel use expected to reach 14% in March, he says
    • That compares with 12% currently

Palm Oil Prices May Average 3,700-3900 Ringgit/Ton in 2024: Sime

Palm oil prices will likely average 3,700-3,900 ringgit a ton in 2024, according to Sime Darby Plantation Bhd., the world’s biggest planter by acreage.

  • Prices may still climb above 4,000 ringgit, with El Niño impacting plantations in Indonesia, reducing shipments from the top grower, COO Mohd Haris Mohd Arshad said after the company’s 4Q earnings
    • NOTE: Prices averaged 3,796 ringgit in 2023; benchmark futures in Kuala Lumpur were trading at 3,884 ringgit on Thursday
  • There are some challenges with Indonesian palm oil crops, although better Malaysian production can help mitigate the losses
    • Sime Darby now has a “full complement” of harvesters, which will help improve productivity and production, said Group Managing Director Mohamad Helmy Othman Basha
    • Sime looking to localize its workforce and focus on mechanization.
  • Besides labor availability, other factors affecting overall yields include replanting exercises, age profile of trees, weather
    • Performance of Sime Darby’s Malaysian upstream segment expected to recover close to pre-Covid levels in 2024
  • Some estates in Sabah and Sarawak still require rehabilitation; full recovery anticipated in 2025
  • Sime is going “full steam” into renewable energy business and wants to “expand aggressively” into solar
  • Co. also wants to grow its footprint in India and is already exporting a lot of palm products to the country

Nitrogen Weakening in Brazil Relies on Seasonal Lull

Nitrogen prices fell in Brazil as buying winds down for the second corn crop and the focus shifts to potash and phosphates for the 2024/25 soybean crop. Though potash affordability remains compelling, boosting competition among players, phosphate demand is facing pressure from falling commodity prices.

Brazil Nitrogen, Potash Fall; Phosphates Firm

Brazil urea was down $20 a metric ton (mt), or 5%, declining to $370-$380/mt cost-and-freight (CFR) from last week’s $390-$400. Ammonium sulfate was also slightly lower, to $175-$180/mt from last week’s high of $185. Monoammonium phosphate (MAP) prices in Brazil firmed to a flat $560/mt, up from last week’s $550-$560, as attempts by sellers to test new business at the $580 level have been unsuccessful. Potash slipped to $280-$290/mt, down $10 from last week’s high, with reports that formula deals are hard to find as buyers keep bidding at $260-$275 but no sellers are willing to commit at that level.

 

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