Global Ag News for Jan 19.24

TOP HEADLINES

India Plans to Push WTO to Ease Subsidy Rules on Grain Purchase

• WTO ministerial conference to be held between Feb. 26-29
• New Delhi won’t discuss other issues before sorting grain plan

India will continue to push the World trade Organization to ease subsidy rules for its public grain-procurement program at next month’s ministerial meeting, an official said.

The world’s most-populous nation procures grains including wheat and rice from farmers at predetermined prices, and then subsidizes it through the public distribution system to feed the poor. Buying food grains at predetermined prices is considered a subsidy for farmers under WTO rules, and trade distortion by developed countries.

A looming global food crisis has brought a new urgency to this decade-old debate. Prime Minister Narendra Modi’s government will make a case for quickly resolving the subsidy issue unconditionally and before all others, the official told reporters in New Delhi on the condition of anonymity as the matter isn’t public.

Developed countries have demanded a discussion on export curbs placed by India along with the domestic support it offers to farmers. India has curbed the export of wheat, rice, sugar and onions in a bid to cool domestic food prices ahead of an election this year, raising concerns over food security.

FUTURES & WEATHER

Wheat prices overnight are up 2 in SRW, up 3 in HRW, up 7 1/2 in HRS; Corn is up 1/2; Soybeans up 6 1/4; Soymeal up $2.70; Soyoil up 0.12.

For the week so far wheat prices are down 8 1/2 in SRW, down 7 in HRW, down 4 in HRS; Corn is down 2 1/2; Soybeans down 4 1/2; Soymeal up $1.90; Soyoil down 0.51.

For the month to date wheat prices are down 40 1/2 in SRW, down 33 3/4 in HRW, down 28 in HRS; Corn is down 26 3/4; Soybeans down 78 1/4; Soymeal down $22.10; Soyoil down 0.44.

Year-To-Date nearby futures are down 6.4% in SRW, down 5.3% in HRW, down 3.9% in HRS; Corn is down 5.7%; Soybeans down 5.7%; Soymeal down 5.7%; Soyoil down 0.2%.

Chinese Ag futures (MAY 24) Soybeans up 6 yuan; Soymeal up 18; Soyoil up 92; Palm oil up 120; Corn up 6 — Malaysian Palm is up 44.  Malaysian palm oil prices overnight were up 44 ringgit (+1.13%) at 3939.

There were changes in registrations (-33 Soybeans). Registration total: 849 SRW Wheat contracts; 0 Oats; 6 Corn; 617 Soybeans; 125 Soyoil; 1 Soymeal; 214 HRW Wheat.

Preliminary changes in futures Open Interest as of January 4 were: SRW Wheat down 2,944 contracts, HRW Wheat down 1,313, Corn up 12,696, Soybeans up 2,512, Soymeal up 2,472, Soyoil up 6,787.

Brazil: Showers in central Brazil have had low coverage this week. Heavier rain across the south has been favorable for some of the drier areas, including Sao Paulo and Parana. A slow-moving front will bring widespread showers to southern areas through Friday and boost showers for central areas this weekend that continues through next week. Overall, the weather situation is improved or improving for much of the country and even the drier stretch in central Brazil is not overly concerning for filling soybeans. Soil moisture is not adequate for safrinha corn, however, and more consistent showers will be important for planting, which should start up shortly.

Argentina: Recent precipitation has been heavy, bringing good soil moisture to most of the country. Drier conditions are looking likely for at least the next two weeks. Corn and soybean conditions are likely to fall toward the end of the month.

Australia: Scattered showers in the northeast continue along a stalled front for the next couple of days. These areas will also be watching the development of a tropical cyclone that is headed its way for sometime next week.

Northern Plains: A clipper moving through will bring another burst of arctic air for the next couple of days, but should be replaced by mild air starting Sunday. Harsh cold has had a detrimental effect on livestock and for those that care for them. The clipper is bringing a band of mostly light snow, and mostly to southern and western areas.

Central/Southern Plains: Another burst of energy will bring another round of harsh cold for Friday and Saturday. The snow from the system is most likely to be light in Nebraska. Much of the winter wheat crop is covered by recent snow, but large parts of Oklahoma and all of Texas have been uncovered and have more susceptible to winterkill. The warmer air will start to move in on Sunday and produce areas of showers for next week, primarily in the southeast. That should be mostly rain and will help to melt the snowpack.

Midwest: A clipper will come through with a band of light to moderate snow on Thursday and Friday, followed by another arctic blast. The cold will not last all that long as warm air moves back in by Monday. Some areas have been exposed to the arctic cold and thus susceptible to winterkill on winter wheat. The warmer air will also bring in several rounds of precipitation next week. The front end of it could be cold enough for some areas of snow across the north Monday into Tuesday.

Delta: Any snow may protect winter wheat from arctic temperatures that will move in Friday through the weekend. Exposed areas are at risk of winterkill. Recent heavy storms of the last couple of weeks have significantly boosted water levels on the Mississippi River, which should increase transportation for at least a little while. More rain that flows in next week will also be a benefit, and melt any snow cover.

The player sheet for Jan. 18 had funds: net buyers of 1,500 contracts of SRW wheat, buyers of 1,500 corn, buyers of 2,000 soybeans, buyers of 1,000 soymeal, and sellers of 500 soyoil.

TENDERS

• SOYMEAL SALE: South Korean importers the Major Feedmill Group (MFG) and Korea Feed Association (KFA) purchased around 120,000 metric tons of soymeal expected to be sourced from South America in deals on Thursday
• SUNFLOWER OIL SALE: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), on Thursday said it bought 47,500 metric tons of sunflower oil in a tender.
• WHEAT SALE: The Lebanese government is believed to have purchased about 72,000 metric tons of milling wheat in a tender this week all expected to be sourced from Ukraine
• WHEAT SALE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 87,641 metric tons of food-quality wheat from the United States and Canada in a regular tender that closed on Thursday.
• RICE TENDER: Indonesian state purchasing agency BULOG has issued an international tender to buy 500,000 metric tons of rice
• WHEAT TENDER: Bangladesh’s state grains buyer has issued an international tender to purchase 50,000 metric tons of milling wheat.
• 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.

PENDING TENDERS

• CORN TENDER: South Korea’s Major Feedmill Group (MFG) issued an international tender to purchase up to 70,000 metric tons of animal feed corn to be sourced from optional origins,
• CORN, BARLEY TENDERS: Algerian state agency ONAB issued international tenders to purchase around 160,000 metric tons of animal feed corn and 30,000 metric tons of feed barley.

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 Jan. 11.

• Corn est. range 500k – 1,200k tons, with avg of 747k
• Soybean est. range 250k – 900k tons, with avg of 528k

DOE: US Ethanol Stocks Rise 5.4% to 25.695M Bbl

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

• Analysts were expecting 24.577 mln bbl
• Plant production at 1.054m b/d, compared to survey avg of 1.054m

Argentine Soy, Corn, Wheat Estimates Jan. 18: Exchange

The Buenos Aires Grain Exchange releases weekly report on website.

• 2023-24 corn and soybean planting estimates both unchanged
• Corn planting advanced to 93% complete from 85% in the previous week
• Wheat production est. maintained at 15.1m tons, with 98% of harvest complete

Agroconsult Sees China Importing Slightly Less Soy in 2023/24

China’s global soy imports in 2023/2024 crop season are seen at 100.6M tons, from 100.9M tons purchased in previous year, according to Agroconsult estimates presented on Thursday.

• Lower profitability in Chinese swine farming is curbing demand for soybeans: CEO André Pessôa
• Delayed farm selling in Brazil and forecast of a bountiful soy crop in Argentina also allow Chinese buyers to postpone deals
  • Brazilian farmers sold roughly 30% of expected soy production, from average 50% in previous years
• Expected rains in January and February in Brazil central areas could add losses to farmers if excessive, reducing country’s soy exports even more: CEO
  • Agroconsult sees Brazil soy exports bellow 95M tons in 2024, from 101M tons last year

Brazil 2023/2024 Soy Crop Seen at 153.8M T: Agroconsult

Brazil is expected to harvest a soy crop in 2023/2024 season 3.7% lower than 159.7M tons in last crop year, according to estimates presented by Agroconsult firm in a press conference Thursday at the beginning of Rally da Safra expedition to soy and corn fields in Brazil.

• Last estimate, in the first fortnight of December, was 158.8M tons: Agroconsult
  • First forecast for 2023/24 soy crop was 169.1M tons, in September
  • Country to harvest 15.3M tons less considering first Agroconsult projection, mainly from Mato Grosso
• Soy planted area to reach 45.7M hectares, 2.9% higher than previous year
  • Soy yields to fall 6.5% from last crop season, to 56.1 begs per hectare: Agroconsult
  • Less than 1M hectares are new areas planted with soybean: CEO André Pessôa
• High intensity El Nino, with dryness and higher temperatures in central areas of the country and plenty rains in the south led to losses in the fields
• 2.9M hectares had to be sow again with soy, 6.4% of total planted area with soy
  • In Mato Grosso, many soy producers decided to not plant soy again and increased planted area with cotton

EU 2024-25 Soft-Wheat Output Forecast Cut: Strategie Grains

EU 2024-25 soft-wheat production is now seen at 122.7m tons, down from prior estimates, analysis firm Strategie Grains said in its second forecast for the next season.

• EU 2024-25 barley and corn estimates were slightly raised
• Adverse weather conditions are expected to impact soft wheat planting area
  • Situation needs to be monitored with rains forecast for late January
• The soft wheat balance sheet for 2024-25 “shows a position of market equilibrium”
  • “The smaller projected harvest in 2024 compared with 2023 should be counterbalanced by fewer exports and lower animal sector demand.”

US CPC says El Niño Forecast To Persist Through March-April-May

U.S. NATIONAL WEATHER SERVICE’S CLIMATE PREDICTION CENTER (CPC):

• SAYS EL NIÑO IS FORECAST TO PERSIST THROUGH MARCH-APRIL-MAY WITH A TRANSITION TO ENSO-NEUTRAL CONDITIONS LATER IN THE SPRING AND SUMMER
• SAYS THE FEBRUARY-MARCH-APRIL (FMA) 2024 TEMPERATURE OUTLOOK FAVORS ABOVE-NORMAL TEMPERATURES ACROSS THE PACIFIC NORTHWEST, NORTHERN TO CENTRAL CALIFORNIA, PARTS OF THE GREAT BASIN, NORTHERN ROCKIES, NORTHERN GREAT PLAINS, GREAT LAKES, AND NORTHEAST
• SAYS BELOW-NORMAL TEMPERATURE PROBABILITIES ARE SLIGHTLY ELEVATED ACROSS SOUTHEASTERN NEW MEXICO AND WESTERN TO CENTRAL TEXAS
• SAYS FMA 2024 PRECIPITATION OUTLOOK DEPICTS ELEVATED PROBABILITIES FOR ABOVE-NORMAL PRECIPITATION FOR SOUTHERN CALIFORNIA, THE DESERT SOUTHWEST, THE CENTRAL TO SOUTHERN PLAINS, THE SOUTHEAST, AND MUCH OF THE EAST COAST

Ethanol Output Idled on Disruptions in US Natural Gas Supply 1)

• Ethanol stockpiles hit record high for second week of January
• Bitter cold weather is roiling US energy supply chains

As US energy producers contend with a bitter cold snap, some makers of ethanol are cutting output or idling operations completely due to disruptions in natural gas supplies needed to run the biofuel plants, according to the Renewable Fuels Association.

“In some cases, natural gas suppliers have claimed force majeure and are failing to honor fixed contracts, leaving ethanol facilities with no choice but to throttle down or idle,” RFA President Geoff Cooper said.

The RFA, which represents America’s corn-based ethanol industry, is urging federal and state regulators to “closely monitor the activities of suppliers who are failing to deliver contracted quantities of natural gas to downstream customers and reallocating that supply elsewhere,” Cooper said, adding that the situation has improved in the past 24 hours.

The US winter is a time ethanol inventories are typically built up ahead of the busy summer travel season. Stockpiles last week climbed to the highest seasonal level ever, based on records going back to 2011. The surge came even as production of ethanol, blended into gasoline, fell slightly, according to US government data.

China Is Buying Up US Farmland, But Just How Much Isn’t Clear

• Better data could help identify US security risks, GAO says
• Foreign stakes in US cropland increased from 2016 to 2021

America is seeing more and more of its most fertile land snapped up by China and other foreign buyers, yet problems with how the US tracks such data means it’s difficult to know just how much.

Foreign ownership and investment in US farmland, pastures and forests jumped to about 40 million acres in 2021, up 40% from 2016, according to Department of Agriculture data. But an analysis conducted by the US Government Accountability Office — a non-partisan watchdog that reports to Congress — found mistakes in the data, including the largest land holding linked with China being counted twice. Other challenges include the USDA’s reliance on foreigners self-reporting their activity.

Outside ownership of US cropland is drawing attention from Washington as concern rises about possible threats to food supply chains and other national security risks. Lawmakers have called for a crackdown on sales of farmland to China and other nations.

“Without improving its internal processes, USDA cannot report reliable information to Congress or the public about where and how much US agricultural land is held by foreign persons,” the report said.

The GAO made six recommendations, including that the USDA share more timely and complete data with the Committee on Foreign Investment in the US, an interagency panel led by the Treasury Department that reviews foreign business deals.

US Miss. River Grain Shipments Rise, Barge Rates Increase: USDA

Barge shipments down the Mississippi river increased to 698k tons in the week ending Jan. 13 from 390k tons the previous week, according to the USDA’s weekly grain transportation report.

• Barge shipments of corn rose 28.7% from the previous week
• Soybean shipments up 161.9% w/w
• St. Louis barge rates were $13.09 per short ton, an increase of $0.08 from the previous week

 

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