Global Ag News for Jan 24.24

TOP HEADLINES

US Corn Harvest Seen as Second-Biggest Ever in Survey

Corn growers are seen planting 92.8 million acres of the grain this year, marking the second-largest US crop on record, a Farm Futures survey finds.

• Corn seedings seen down 1.8 million acres, or 1.9%, from last year’s record harvest
  • Higher corn supplies would require more consumption to prevent falling prices, according to Jacqueline Holland, an analyst at Farm Futures
• US soybean plantings this year are expected to be 85 million acres, up 1.6% from 2023
  • Would be 4th-largest soybean harvest
  • Usage is rising faster than production, so 2024-25 soybean balance will remain at historically tight levels: Holland
• Winter wheat in 2024 is seen at 37.3 million acres, higher than USDA’s estimate this month of 34.4 million acres
  • More acres are expected in Kansas, Illinois, Oklahoma and Missouri
• Spring wheat is expected to be 9.1 million acres, down 19% from 2023, while durum wheat is seen unchanged at 1.7 million acres
• Total 2024 wheat of 48 million acres would be down 3% from last year
  • The larger winter wheat crop will keep downward pressure on prices: Holland
• NOTE: The survey of 825 farmers was taken from Dec. 18 to Jan. 2

FUTURES & WEATHER

Wheat prices overnight are up 5 3/4 in SRW, up 4 3/4 in HRW, up 1 3/4 in HRS; Corn is up 2 1/4; Soybeans up 1 1/2; Soymeal up $3.30; Soyoil down 0.05.

For the week so far wheat prices are up 8 1/2 in SRW, up 13 in HRW, up 3 in HRS; Corn is up 3 1/2; Soybeans up 31 1/4; Soymeal up $8.00; Soyoil up 1.48.

For the month to date wheat prices are down 25 3/4 in SRW, down 19 3/4 in HRW, down 22 3/4 in HRS; Corn is down 22 1/2; Soybeans down 57; Soymeal down $21.60; Soyoil down 0.02.

Year-To-Date nearby futures are down 4.2% in SRW, down 3.3% in HRW, down 3.5% in HRS; Corn is down 4.7%; Soybeans down 3.8%; Soymeal down 5.6%; Soyoil up 1.1%.

Chinese Ag futures (MAY 24) Soybeans up 30 yuan; Soymeal up 20; Soyoil up 48; Palm oil up 2; Corn up 15 — Malaysian Palm is up 46. Malaysian palm oil prices overnight were up 46 ringgit (+1.17%) at 3994.

There were changes in registrations (-31 Soybeans). Registration total: 849 SRW Wheat contracts; 0 Oats; 6 Corn; 586 Soybeans; 125 Soyoil; 1 Soymeal; 214 HRW Wheat.

Preliminary changes in futures Open Interest as of January 23 were: SRW Wheat down 564 contracts, HRW Wheat up 3,843, Corn up 10,385, Soybeans up 7,279, Soymeal up 4,037, Soyoil up 5,155.

Brazil: Showers in central Brazil had low coverage last week but will continue to be more widespread and consistent through the end of this week. This week’s showers have potential to improve conditions for soybeans that are still maturing, but with harvest already underway for early planted beans the rainfall could be a setback to harvest progress. More consistent showers will also benefit soil moisture for safrinha corn planting which should start up shortly. Far southern areas will be drier through the rest of this week, if not longer, which will be a concern for some areas that have missed out on the beneficial rains from previous weeks.

Argentina: Conditions started to trend drier last week and there will not be much of a relief in dry conditions this week, as any notable precipitation will stay off to the west and south of the main growing areas. Corn and soybean conditions are likely to fall toward the end of the month as soil moisture may begin to deplete this week.

Australia: Recent rains in the east have been favorable for developing cotton and sorghum. The northeast will be watching Tropical Cyclone Seven make landfall in eastern Queensland by the second half of this week. Heavy rainfall may accompany the tropical cyclone and lead to areas of flooding. Meanwhile, southern parts of Australia will see scattered showers for the mid-week before turning dry again by the end of the week.

Northern Plains: A few light snow showers tagged northern areas on Monday but mostly dry conditions are expected for the rest of the week. Above normal temperatures will also continue through the end of the week which should help lessen the harsh conditions for livestock.

Central/Southern Plains: Warmer air started moving into the area on Monday and periods of showers are likely throughout the rest of this week, primarily in the southeast. Heavy rain is possible in eastern Texas, which could help improve the drought in that area. This week’s precipitation should be favorable for increasing soil moisture for areas with dormant wheat.

Midwest: Warmer air returned on Monday and areas of freezing rain fell across eastern areas. More wintry precipitation and rainfall are expected through the rest of this week, but coverage of showers will diminish Thursday and Friday. Freezing rain may continue through Tuesday and parts of Illinois and Indiana could see at least 0.10-0.20 inch of ice. Above to well above normal temperatures are expected through this weekend and northern areas could see temperatures rise up to 20 degrees Fahrenheit above normal.

Delta: Several rounds of rain are likely throughout the rest of this week, melting the snow. Heavy rain is likely and some areas of flooding are possible in southern areas. Water levels along the Mississippi River will receive a boost and increase transportation for at least a little while. Temperatures will continue to be above normal throughout the rest of this week as well.

The player sheet for Jan. 23 had funds: net buyers of 500 contracts of SRW wheat, buyers of 500 corn, buyers of 4,000 soybeans, buyers of 3,500 soymeal, and buyers of 500 soyoil.

TENDERS

• CORN TENDER: Algerian state agency ONAB has issued an international tender to purchase up to 240,000 metric tons of animal feed corn.
• FOOD WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is looking to buy a total of 88,710 metric tons of food-quality wheat from the United States and Canada in a regular tender that will close on Thursday, Jan. 25.

PENDING TENDERS

• WHEAT TENDER: The Taiwan Flour Millers’ Association has issued an international tender to purchase an estimated 89,650 metric tons of grade 1 milling wheat to be sourced from the United States
• CORN TENDER: South Korean feedmaker Nonghyup Feed Inc (NOFI) has issued an international tender to buy up to 138,000 metric tons of animal feed corn
• 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
• 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
• 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.

 

TODAY

 

ETHANOL: US Weekly Production Survey Before EIA Report

Output and stockpile projections for the week ending Jan. 19 are based on eight analyst estimates compiled by Bloomberg.

• Production seen lower than last week at 952k b/d
• Would be the lowest since Jan. 2023
• Stockpile avg est. 25.558m bbl vs 25.695m a week ago

THE BEARISH CORN MARKET FAVORS THE U.S. FEED AND RESIDUAL CORN USE – Refinitiv Commodities Research

2023/24  U.S. CORN CONSUMPTION FOR FEED AND RESIDUAL USE: 5,764.9 MILLION BUSHELS, UNCHANGED  FROM LAST UPDATE

The 2023/24 U.S. Corn bumper crop has enhanced availability for animal feed, facilitating stockpiling and fostering growth across the broader agricultural sector. Thus, the USDA has raised the Grain Consuming Animal Unit (GCAU) to 100.7, reaching the highest level in the past three seasons. The LSEG’s price-to-feed ratio calculation has surged to its highest point in the last five seasons, attributed to the comparatively low corn prices in contrast to those of cattle and hogs. As a result, LSEG estimates the 2023/24 Feed & Residual Corn Use at 5,764.95 million bushels, exceeding the USDA’s increased January estimate of 5,675 million bushels.

In the January livestock, dairy, and poultry outlook from USDA-ERS, a notable highlight was the projected decrease in inflation rates for 2023 compared to 2022 across all mentioned items, based on the Consumer Price Index (CPI). The beef production forecast is adjusted upwards to 26.110 billion pounds, influenced by increased carcass weights and heightened fed cattle marketings.

In the dairy sector, projections indicate a decline in the average number of cows and annual milk per cow, leading to a reduced 2024 milk production forecast of 228.3 billion pounds. Based on recent reports, the pork and poultry sectors witness shifts in production and prices, with total commercial pork production in 2024 expected to reach around 28 billion pounds, accompanied by live equivalent hog prices averaging $57.75 per hundredweight.

Iraq’s 2024 Wheat Harvest to Exceed 6M Tons: Trade Ministry

Iraq is expected to harvest more than 6 million tons of wheat this year, a result of strong government support to farmers which contributed to expanding land under cultivation, the Trade Ministry said in a statement, citing the minister, Atheer Dawood.

• Iraq closed its local 2023 wheat harvest with output at 5.19m tons
• The trade minister met with the agriculture minister Tuesday and discussed storage capacity and cooperation for the next harvest season that starts in April
• The country’s annual consumption of wheat under the state-subsidized food program is roughly 4.5 million to 5 million tons.

EU Soft-Wheat Exports Drop 7.6% Y/y in Season Through Jan. 19

The European Union’s soft-wheat exports in the season that began on July 1 were at 17.4m tons as of Jan. 19, compared with 18.8m tons a year earlier, the European Commission said on its website.

• NOTE: The report only covers up to Jan. 19 due to a ‘technical issue’; data for Ireland are missing as of June 2023
• Leading destinations include Morocco with 2.42m tons, Nigeria at 1.74m tons, Algeria with 1.48m tons
• Barley exports were at 3.33m tons, little changed
• Corn imports were at 9.86m tons, down 42% y/y

MGEX Spring Wheat Stocks Down 5.3% From Year Ago: Jan. 21

Stocks of hard spring wheat stored in Minnesota and Wisconsin warehouses fell y/y to 15.473m bushels in the week ending Jan. 21, according to the Minneapolis Grain Exchange’s weekly report.

• Compared to the previous week, stockpiles fell by 302k bu
• Stockpiles in Duluth/Superior warehouses down 3k bu from the previous week

China’s Soybean Output Hits Record 21 Million Tonnes in 2023

Soybean production in China reached a record 20.8 million tonnes in 2023, Xinhua News Agency reported Tuesday, citing data from the Ministry of Agriculture and Rural Affairs.

Planting area for soybeans expanded to 157 million mu (10.47 million hectares) in 2023, contributing to the increased yield, while overall oilseed crop planting surpassed 200 million mu, the report said.

Seed industry revitalization efforts also achieved positive results, with over 530,000 new germplasm resources collected, according to the report.

The development comes as China lifted 33.969 million people out of the poverty line last year, exceeding its target by 3.777 million, the newswire said, citing Deng Xiaogang, vice minister of agricultural and rural affairs.

China’s Revamped Animal Feed Formulas to Reduce Reliance on Imports

Authorities are working to revamp animal feed formulas with an aim to curb the use of soybean meal, a byproduct of soybean oil extraction.

The move is part of a broader effort by China to wean itself off imported soybeans.

The nation’s soybean imports jumped 11.4 percent last year to almost 100 million metric tons despite recent efforts to expand domestic production, Chen Bangxun, who oversees agricultural planning at the Ministry of Agriculture and Rural Affairs, said on Tuesday.

He told a news conference in Beijing that vast amounts of the protein-rich substances are being used to make animal feed. The practice has driven up demand for imported soybeans.

“It is scientifically and practically plausible to reduce soybean-meal consumption by resorting to substitutes,” Chen said.

He added that research has shown the current level of protein in the country’s animal feed is more than sufficient. Chen said the ministry last year initiated a three-year campaign to bolster the efficient use of soybean meal in the animal feed sector. Last year, soybean meal contributed to less than 13 percent of all raw materials, down 1.5 percentage points from 2022.

“The drop translates into 9 million tons of soybeans,” he said.

Chen noted that the formula’s change won’t affect nutrition, given that synthetic amino acids－the major nutrients that soybean meal provides－and more efficient processing techniques would be used to ensure protein levels.

Palm Oil Harvest in Malaysia Gets Boost From Foreign Worker Move

• More overseas labor means extra fruit likely to be gathered
• Decision seen bringing ‘significant relief’ to palm industry

Palm oil output in Malaysia, the No. 2 supplier, could rise 5% this year after the government allowed plantations to hire foreign workers, said Joseph Tek, chief executive of the Malaysian Palm Oil Association.

The admission of new workers potentially means that an additional 5.2 million tons of fresh fruit bunches can be harvested, the top growers’ group said in a statement. That translates into 1 million tons of crude palm oil, Tek said.

The extra tonnage would also generate revenue of close to 4 billion ringgit ($845 million), bringing “significant relief” to the industry, which is grappling with a substantial shortage of 40,000 workers, the group said. The news pressured benchmark palm oil futures in Kuala Lumpur trading.

The government has been trying to reduce reliance on cheap foreign labor across many industries including manufacturing, construction and plantations, and seeks to regulate admission processes to prevent any issues like forced labor, worker exploitation and human trafficking.

In March last year, the country temporarily suspended the application and approval process for foreign workers under a quota system in order to speed up the entry of workers already approved.

US oil refiners ask EPA to limit participation in renewable fuel credit market

U.S. oil refiners have asked President Joe Biden’s administration to reform the renewable fuel credit program by restricting who can participate, claiming the current trading environment allows market manipulation and raises fuel costs.

Coffeyville Resources Refining and Marketing and Wynnewood Refining Company, both subsidiaries of CVR Energy, said in a petition dated Dec. 28 that such an adjustment to the program could reduce the price of the renewable fuel credits, known as RINs, and would lower the cost of fuel for U.S. motorists.

The Environmental Protection Agency (EPA), which administers the U.S. Renewable Fuel Standard, did not immediately comment on the petition.

Under the RFS, oil refiners must blend billions of gallons of biofuels into the nation’s fuel mix or buy RINs from those that do. In the program’s initial conception, RINs were meant to be generated only by “obligated parties” – or refiners – that over-complied with their blending mandates, then transferred to other obligated parties for the purpose of compliance, the refiners said in the petition.

The EPA now allows any person to participate in the credit scheme, including entities such as fuel retailers participating in the market for profit, the refiners argued.

“This departure from the statutory text and purpose has led to gross market manipulation,” causing RIN prices to climb, disproportionately harming small oil refiners and raising fuel consumer fuel costs, the refiners said.

The refiners petitioned the EPA to initiate a new rulemaking to reform the program to ensure it complies with regulation. U.S. renewable fuel credits traded as low as 71 cents each on Tuesday, compared with a record $2.00 each in 2021, LSEG data showed.

 

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