Global Ag News for Jan 8.24

TOP HEADLINES

Union suspends planned strike at Viterra grain operations in Saskatchewan

The union representing more than 400 workers at Viterra’s facilities in the Canadian province of Saskatchewan suspended plans for a strike on Friday to allow for a vote on the Rotterdam-based grain handler’s latest contract offer.

The Grain and General Services Union said in the period leading up to the vote, employees will work to rule, meaning they will not take on tasks beyond their contractual and legal obligations.

Viterra is one of Canada’s largest handlers of wheat, canola and other crops. The company is owned by commodity giant Glencore GLEN.L, the investment arm of the Canada Pension Plan and British Columbia Investment Management Corp.

Saskatchewan is Canada’s biggest grain-growing province.

Viterra said in a statement that it is offering a four-year contract, with pay increases of 4.5% in the first year, 3.75% in the second year and 2.5% in each of the final two years.

The worker vote will happen in the coming days and ballots will be counted on Jan. 19, the union said.

FUTURES & WEATHER

Wheat prices overnight are down 9 1/4 in SRW, down 5 3/4 in HRW, down 2 1/2 in HRS; Corn is unchanged; Soybeans down 2 1/2; Soymeal up $1.00; Soyoil down 0.16.

Markets finished last week with wheat prices down 21 1/4 in SRW, down 19 3/4 in HRW, down 14 in HRS; Corn is down 10 1/2; Soybeans down 44 1/4; Soymeal down $15.60; Soyoil down 0.71.

Year-To-Date nearby futures are down 3.4% in SRW, down 3.1% in HRW, down 1.9% in HRS; Corn is down 2.2%; Soybeans down 3.2%; Soymeal down 4.5%; Soyoil down 1.4%.

Chinese Ag futures (MAY 24) Soybeans down 31 yuan; Soymeal down 52; Soyoil up 2; Palm oil up 28; Corn down 12 — Malaysian Palm is up 11. Malaysian palm oil prices overnight were up 11 ringgit (+0.30%) at 3693.

There were changes in registrations (-22 Soybeans, -18 HRW Wheat). Registration total: 1,295 SRW Wheat contracts; 0 Oats; 6 Corn; 717 Soybeans; 147 Soyoil; 100 Soymeal; 273 HRW Wheat.

Preliminary changes in futures Open Interest as of January 5 were: SRW Wheat down 1,891 contracts, HRW Wheat up 263, Corn up 18,623, Soybeans up 2,744, Soymeal up 7,903, Soyoil up 6,511.

Brazil: Widespread heavy rain has fell over central Brazil this weekend, continuing the trend of heavy rainfall for the region over the past week. Scattered showers will continue in this area all week long, though the coverage and intensity are forecast to lessen later in the week. Those showers will still be in the region, however. Across the south, it was dry over the weekend but a front coming up from Argentina should set off waves of showers in the region this week, favorable for filling soybeans and developing other crops. Some of the areas like Mato Grosso do Sul and Sao Paulo that were dry last week will see much better rainfall this week.

Argentina: Widespread scattered showers developed over the country this weekend as a front slowly slid northward. The widespread rainfall continues to favor developing corn and soybeans. The front will be somewhat stalled over northern areas through Thursday where heavy rain is forecast. Otherwise, scattered showers will continue to move through the country going into next week.

Australia: A storm system brought widespread moderate to heavy showers and thunderstorms to eastern areas over the weekend. A front will linger and continue to bring showers to northeastern areas this week while the rest of the country will be drier. Western areas continue to deal with significant drought, but eastern areas of the country have seen some improvement in recent weeks.

Northern Plains: It was quiet for most of the weekend with just some light snows in some areas. A large system will miss off to the south early this week but another moving through midweek will bring in a blast of arctic air. Forecasts continue the harsh cold for about a week before starting to moderate it late next week and weekend. It still looks to be cold and below-normal, however, leading to issues for livestock and needing increased feed.

Central/Southern Plains: A storm system left on Friday, but brought widespread snow to much of the region. A monster storm system will develop early on Monday and bring potential blizzard conditions to some areas and heavy snow from the Panhandles northeast into eastern Nebraska and northwest Missouri. Yet another large storm is forecast to close out the week and could have similarly large impacts. It will also bring in a blast of arctic air that will cause a need for increase feed for livestock and could cause damage to any uncovered wheat. The exact intensity of the cold is still being determined but could last for a week, though it may be hard to get into Texas.

Midwest: A storm system scraped through the region Friday into Saturday, and brought pockets of moderate snow across the south. A much larger storm will go barreling through the region Monday through Wednesday with widespread impacts including heavy rain and snow and potential blizzard conditions. Another large storm will follow a similar path for the end of the week, which could hit the same areas again, and/or hit new ones with risks for more heavy snow and blizzard conditions Thursday night through Saturday. That system will bring a blast of arctic air into the region.

Delta: A storm brought scattered showers through the region over the weekend, being heavy in some spots and reducing drought. Two large systems will bring similarly heavy precipitation through the region this week, favorable for further reducing drought and building up water levels in the Mississippi River system.

The player sheet for Jan. 5 had funds: net buyers of 1,500 contracts of SRW wheat, sellers of 4,500 corn, buyers of 4,500 soybeans, sellers of 3,000 soymeal, and  sellers of 1,500 soyoil.

TENDERS

• WHEAT SALE: South Korean flour mills bought an estimated 88,700 metric tons of milling wheat to be sourced from the United States in an international tender on Friday.
• WHEAT SALE: The Taiwan Flour Millers’ Association purchased an estimated 82,975 metric tons of milling wheat to be sourced from the United States in a tender on Friday.
• CORN TENDER: Taiwan’s MFIG purchasing group has issued an international tender to buy up to 65,000 metric tons of animal feed corn, which can be sourced from the United States, Brazil, Argentina or South Africa.
• 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

• 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.
• SOYMEAL TENDER: Iranian state-owned animal feed importer SLAL issued an international tender to purchase up to 200,000 metric tons of soymeal.

TODAY

US Export Sales of Soybeans, Corn and Wheat by Country

The following shows US export sales of soybeans, corn and wheat by biggest net buyers for week ending Dec. 28, according to data on the USDA’s website.

• Top buyer of soybeans: Spain with 137k tons
• Top buyer of corn: Mexico with 172k tons
• Top buyer of wheat: China with 66k tons

US Export Sales of Pork and Beef by Country

The following shows US export sales of pork and beef product by biggest net buyers for week ending Dec. 28, according to data on the USDA’s website.

• South Korea bought 14.4k tons of the 27.7k tons of pork sold in the week
• Japan led in beef purchases

Brazil Soybean Crop Estimate Cut to 151.4M MT by Safras

Estimate for the 2023/24 crop cut to 151.4 metric tons, compared to a prior estimate of 158.2m mt in December, according to an emailed report from Safras&Mercado consulting firm.

• New estimate would mean a 4.1% drop from Brazil’s output in the previous season
• Area estimated at 45.4m ha, compared to 44.7m ha in 2022/23
• Average yield this season seen at 3.354 kg/ha
• Irregular rainfall and high temperatures in some states are among the reasons that led to the change in estimates

Brazil December Agriculture Exports by Volume: MDIC

Following is a summary of key Brazilian agriculture and mining exports by volume, from the Brazilian Trade Ministry.

• Soybean exports nearly doubled from last year
• Cotton exports rose 100% y/y
• Iron ore exports up 24% y/y

Brazil’s soy exports forecast to rise in January despite possible shortages

Brazilian soy exports will reach at least 1.3 million metric tons in January, a sharp increase from the 940,000 tons exported in the same month last year, according to projections released on Friday by Anec, a grain exporters group.

Brazil starts planting its soybeans around September and normally harvests the crop in the first two months of the following year. Dry weather, however, delayed some planting last year and will affect the harvesting of the 2023/2024 crop.

Anec said in a statement that shipping schedules indicate soybean exports could be as high as 2.7 million tons in January. But the group factored in the possibility of smaller cargo loadings to arrive at the more conservative forecast of 1.3 million tons.

Luiz Roque, a soy analyst with Safras & Mercado, said more than 2 million tons of soy exports were registered for shipment in January, but he doubted the South American country would export all of that given a potential product shortage. He added, however, that higher carryover stocks should support shipments this month.

Anec confirmed that plentiful carryover stocks may bolster January shipments.

Data compiled by Abiove, the local oilseed crushers lobby, shows that Brazil began 2024 with 4.9 million tons of soybean carryover stocks, compared with 3.7 million tons at the start of last year. The rise occurred despite record exports of more than 101 million tons and record domestic processing driven by unprecedented soy production volumes in the 2022/2023 cycle.

Brazilian corn exports in January will reach 3.33 million tons, down from 4.86 million tons in the same month a year ago, Anec said. It noted that the drop in exports was expected because domestic buyers were offering higher prices – up to $1 per bag of corn – compared to exporters shipping through the southern Brazilian port of Rio Grande.

Paulo Molinari, a corn analyst at Safras & Mercado, said record exports of the cereal in 2023 will likely constrain export volumes this month.

He noted that domestic corn stocks were depleted and confirmed that local buyers were paying more than foreign customers, reducing the potential of Brazil’s corn exports this month.

Ukraine’s Grain Exports Drop 18% Y/y in Season to Jan. 8

Ukraine’s grain exports in the season that started July 1 total 19.4m tons, down 18% from a similar period last year, data released by agriculture ministry showed.

• Total includes:
  • 7.8m tons of wheat, including 208k tons so far in January; that’s down about 9% y/y
  • Almost 1.2m tons of barley, down 30% y/y
  • 10.3m tons of corn, down 22% y/y
• The Black Sea shipping corridor that Ukraine established in August has boosted the exports of agricultural products, Infrastructure Minister Oleksandr Kubrakov said on Facebook
  • “Almost 15 million tons of goods were exported through the Ukrainian corridor within 5 months,” Kubrakov said
  • That includes 10 million of agricultural products
  • 469 vessels have been processed for loading, 83 ships confirmed their readiness to enter the ports and export 2.4 million tons of cargo, according to minister

River Rhine in Germany reopens to shipping after high water recedes

The river Rhine in Germany has been reopened to shipping after being halted due to a rise in water levels following rain last week, German authorities said on Monday.

Rhine river shipping had been stopped around the western city of Koblenz on Friday. But water levels have fallen again to levels permitting ships to operate, the German inland waterways navigation agency said.

High water means vessels do not have enough space to sail under bridges and the blockage prevents vessels sailing to Switzerland.

Shipping on northern sections of the river had operated normally in the last week, despite a rise in water levels, including the important points of Duisburg and Cologne.

India’s agricultural exports to rise despite curbs on wheat, rice, sugar – minister – Reuters News

India’s agricultural exports will rise in fiscal 2023/24 from last year despite curbs on wheat, rice and sugar, the nation’s trade minister said on Monday, amid efforts to diversify shipments.

The world’s second-largest producer of wheat, rice and sugar, India restricted exports of these commodities last year in a bid to rein in rising domestic prices.

These restrictions are likely to cause a shortfall of about $4 billion to $5 billion this year, Reuters reported last month.

“We had agri exports in the aggregate of about $53 billion in 2022/23, and we expect the number to increase in the current year despite the restrictions placed on export of rice, wheat or sugar,” trade minister Piyush Goyal said in his address to a conference in New Delhi.

Data from state-run trade body APEDA showed that exports of meat and dairy, cereal preparations, and fruits and vegetables rose between April and November this year.

Brazil’s Petrobras to produce renewable aviation and diesel fuels

Brazil’s state-owned energy major Petrobras is to expand its Presidente Bernardes refinery in Cubatao, state of Sao Paulo, to produce renewable diesel and sustainable aviation fuel (SAF), Argus reported on January 3.

The expansion will use Honeywell’s hydroprocessed esters and fatty acids (HEFA) technology, to produce SAF and hydrated vegetable oil (HVO), a form of renewable diesel.

Soybean oil and animal fat will be used as raw materials for the biorefinery.

As part of Petrobras’ broader strategic plan, the company has allocated $1.5bn in capital for biorefining between 2023 and 2027.

Additionally, Petrobras is exploring the possibility of converting the Riograndense refinery in Rio Grande do Sul into a biorefinery.

In September, the company signed a memorandum of understanding (MoU) with MIC Capital Partners, an investment fund of Mubadala Capital from Abu Dhabi, to continue studies on future downstream projects, with a focus on biorefining.

Mubadala, through its subsidiary Acelen, operates the Mataripe refinery in Bahia and plans to invest BRL12bn ($2.46bn) to produce HVO and SAF from various feedstocks.

Other Brazilian companies, including fuel distributor Vibra Energia and bioenergy group Brasil Biofuels (BBF), are also entering the biorefining sector.

NOLA, Brazil Urea Firm on India Tender; Global Market Stays Flat

Global urea is under pressure as supplies build, though China has curbed exports through 1Q and India’s latest tender call in late December pushed New Orleans and Brazil prices slightly higher. Koch’s $3.6 billion acquisition of OCI’s Wever, Iowa, nitrogen plant represents a 58% premium to CF’s Waggaman purchase, reflecting higher prices for the upgraded fertilizers sold at Wever as the US nitrogen market consolidates.

US Phosphates Continue to Firm; NOLA Urea Rebounds

Phosphate prices continued to climb at New Orleans (NOLA) and inland, fueled by tight supply. NOLA phosphate barges were up $5-$10 a short ton (st), while Corn Belt prices jumped $10-$20 at many locations. New producer postings in the western US also saw monoammonium phosphate (MAP) prices jump $15/st from December. NOLA urea strengthened slightly in the wake of the latest Indian tender, though inland prices were generally flat in the Corn Belt and down in the northern US and eastern Canada. Potash prices were mostly stable at NOLA and inland as the industry awaits a winter fill program from producers.

Some 2.7 million metric tons (mt) were offered in India’s latest urea tender, but prices won’t be revealed until Jan. 8. India is in no hurry to book large volume, and prices could be down $80/mt from the last tender.

Urea Up 2% on India Tender Call; Phosphates, Potash Follow

A new India urea tender pushed nitrogen prices up 2% in Brazil, but further increases could be limited until details emerge on the prices and volume booked. Brazil urea firmed to $320-$335 a metric ton (mt), up from the prior $310-$330, but showed limited interest as participants returned from the holidays and awaited tender results. Potash strengthened to $295-$310/mt vs. the previous $285-$295 as suppliers seek better margins, but the market remains pressured by strong inventory. Monoammonium phosphate (MAP) increased slightly as key producers limit supplies.

As soybean planting ends and rains hit Mato Grosso, suppliers will now focus on the final nitrogen sales for the second corn crop. Attention may then shift to 2024-25 soybeans, and boost phosphate and potash demand by the second quarter.

 

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