Global Ag News for July 1.24

TOP HEADLINES

India records 11% below normal rainfall in June, weather department says

India received 11% less rainfall than normal in June as all regions except the south received below-average rains after the monsoon lost momentum in mid-June, weather department data showed on Monday.

The central, north-western and north-eastern regions received 14%, 33%, and 13% below average rainfall, respectively, in June, data compiled by the India Meteorological Department (IMD) showed.

The southern region received 14% above average rainfall, it showed.

 

FUTURES & WEATHER

Wheat prices overnight are up 3/4 in SRW, down 1 3/4 in HRW, up 2 1/4 in HRS; Corn is down 1 1/4; Soybeans down 1/4; Soymeal down $2.50; Soyoil up 0.86.

Markets finished last week with wheat prices up 3 in SRW, down 3 in HRW, up 2 1/2 in HRS; Corn is down 32 1/2; Soybeans down 27 1/4; Soymeal down $14.30; Soyoil up 0.81.

Markets finished last month with wheat prices down 126 SRW, down 137 in HRW, down 136 3/4 in HRS; Corn is down 46 1/4; Soybeans down 80 1/2; Soymeal down $23.90; Soyoil down 2.27.

Year-To-Date nearby futures are down 11.5% in SRW, down 8.1% in HRW, down 15.3% in HRS; Corn is down 15.2%; Soybeans down 10.3%; Soymeal down 6.5%; Soyoil down 7.6%.

Chinese Ag futures (SEP 24) Soybeans up 4 yuan; Soymeal down 12; Soyoil up 50; Palm oil up 124; Corn down 19 — Malaysian Palm is up 74.

Malaysian palm oil prices overnight were up 74 ringgit (+1.89%) at 3990.

There were no changes in registrations. Registration total: 1,479 SRW Wheat contracts; 39 Oats; 747 Corn; 130 Soybeans; 2,589 Soyoil; 0 Soymeal; 0 HRW Wheat.

Preliminary changes in futures Open Interest as of June 28 were: SRW Wheat up 3,108 contracts, HRW Wheat up 2,819, Corn down 1,191, Soybeans up 21,689, Soymeal up 228, Soyoil up 4,582.

 

Northern Plains: Isolated showers went through over the weekend. A stronger system will bring more scattered showers through Monday and impulses will cross the region every couple of days going through early next week. The frequent passage of storm systems could bring heavier rain through areas in the southeast that continue to be too wet. Temperatures will be near or below normal for the next two weeks, keeping growth slow.

Central/Southern Plains: Scattered showers and thunderstorms, but heavy rain moved through much of Kansas and northern Oklahoma over the weekend, favorable for developing corn and soybeans, but not the wheat harvest. Drought areas have been receiving a little more consistent rainfall lately, which should help those areas. But some across the south have seen less recently, where drought may start to develop soon. An active pattern over the next two weeks will favor multiple fronts stalling in the region, bringing bursts of cooler air behind them and plenty of rain, which should be favorable for developing crops in most areas. Southern areas may catch some rains at times as well. They’ll be hot though as fronts largely stall around Kansas or Oklahoma.

Midwest: A system moved through the region over the weekend with scattered, but inconsistent rainfall. Some areas that were expecting some rain were left dry. Flooded areas in the northwest got a needed break from the rain, but several more fronts and systems moving through the region over the next two weeks should bring plenty of opportunities for widespread moderate to heavy rainfall. Models are favoring the western half of the region with the heaviest amounts, which include those flooded areas. Eastern areas are still forecast to see chances for needed rainfall through next week, but not as much as farther west. Eastern areas are also forecast to be hotter more frequently than those in the west, which may cause some issues if the rain does not materialize.

Delta: Isolated to scattered showers went through over the weekend but temperatures increased, causing stress for areas that did not see much rainfall. Fronts will largely stay off to the north this week while temperatures remain mostly above normal. There is a better chance for a shower-producing front moving through this weekend into early next week, which may stall out for a few days as well. That would certainly be beneficial if it occurs.

Canadian Prairies: Isolated showers moved through over the weekend, but many areas remained dry. Cold air moved in and some spotty frosts may have been possible on Saturday morning. Cooler than normal temperatures will stick around the region for the next week or longer, but there is not significant chance for frost. Instead, multiple systems will move through, spreading showers throughout the region. Showers are more likely to be scattered with limited chances for heavy rain. But areas that may get hit multiple times could see some flooding. That would be exacerbated in areas across the north and east that have had issues with heavy rain in recent weeks.

Brazil: Cold air moved in behind a front this weekend, causing frosts across the south. Despite the cold, there was not a likely affect on either winter wheat planting or maturing safrinha corn. A front will move into the south late this week and may stall in some areas going into next week. If it sticks around the same areas, some flooding may be possible, which would not be good for crops or transportation, which has had flood issues over the last two months.

Argentina: Rainfall deficits continue to build up and soil moisture is low for winter wheat establishment. A front brought a burst of colder temperatures this weekend that produced frosts across a wide area. While it will not damage vegetative winter wheat, it was not helpful. Another front moves through later this week, but showers are forecast to develop over the far north for only a couple of days while the primary wheat areas remain dry and get another burst of cold air.

Europe: Over the weekend, pockets of heavy rain moved through France and Germany where it was not welcome, but also in adjacent areas from northern Spain to Poland, where it was. The system responsible will continue through much of Europe the next couple of days, but several more systems and fronts will move through this week and next, bringing unwanted rain to wet areas in France and Germany, but beneficial showers elsewhere. The southeast will be much drier after a system moves through early this week. This area has been much hotter recently and has had issues with wildfires and drought as well. The pattern is not favorable for turning this around at all.

Black Sea: It was unfavorably dry over the weekend while temperatures increased. A couple of fronts will move into western Ukraine this week, but the prospect for showers farther east is poor until the weekend, when some isolated showers may be possible. Dryness and drought continue to expand in most areas and even those that have seen rain recently still have large rainfall deficits this season. Hot temperatures this week will only exacerbate the stress on developing summer crops.

Australia: A system brought needed rainfall to eastern areas over the weekend. Despite drier conditions for most of this week, most areas are in good shape for vegetative winter wheat. A system may develop some showers across the east this weekend while the next front gets into the west early next week.

The player sheet for 6/28 had funds: net sellers of 2,500 contracts of SRW wheat, sellers of 22,500 corn, sellers of 3,500 soybeans, sellers of 3,000 soymeal, and buyers of 1,500 soyoil.

PENDING TENDERS

• WHEAT TENDER: Saudi Arabia’s main state wheat buying agency, the General Food Security Authority (GFSA), on Monday purchased around 235,000 metric tons of hard wheat in an international tender, the agency said. The purchase was considerably below the 595,000 tons sought in the tender.
• WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy 120,000 tonnes of milling wheat which can be sourced from optional origins.
• FEED BARLEY TENDER: Jordan’s state grain buyer was believed to have made no purchase in an international tender for 120,000 metric tons of animal feed barley which closed on Wednesday.

 

 

 

TODAY

USDA May soy crush estimated at 193.850 million bushels, analysts say

The U.S. soybean crush likely rebounded in May to 5.816 million short tons, or 193.850 million bushels, analysts surveyed by Reuters estimated ahead of a monthly U.S. Department of Agriculture report due on Monday.

If the average of nine estimates is realized, it would be up 9.1% from the seven-month low of 177.7 million bushels crushed in April, and up 2.4% from the May 2023 crush of 189.3 million bushels.

Crush estimates ranged from 192.5 million to 196.0 million bushels, with a median of 193.1 million bushels.

The USDA is scheduled to release its monthly fats and oils report at 2 p.m. CDT (1900 GMT) on Monday, July 1.

U.S. soyoil stocks as of May 31 were estimated at 2.214 billion pounds based on the average of estimates from six analysts.

The oil stocks estimate, if realized, would reflect a 4.2% drawdown from 2.311 billion pounds at the end of April and a 7.2% drop from May 31, 2023 oil stocks totaling 2.386 billion pounds.

Estimates ranged from 2.150 billion to 2.280 billion pounds, with a median of 2.202 billion pounds.

The National Oilseed Processors Association reported that its members, which account for about 95% of soybeans processed in the United States, crushed 183.625 million bushels in May, while end-of-month oil stocks fell to 1.724 billion pounds.

 

Argentina Farmers Priced 51% Less Soy in June vs. May: Rosario

Soybean farmers sold and set prices with exporters-crushers for an average of 87,000 metric tons a day in June, the Rosario Board of Trade said in a weekly report.

• That’s 51% less than the daily average of 177,000 tons in May
• Falling global soy markets are holding back pricing by farmers, who are expected to focus sales in the coming weeks on corn: Rosario
• NOTE: Farmers also sell and deliver soy without pricing contracts, but dollars from those export trades are generally only sold on Argentina’s FX market — boosting reserves at the central bank — when prices are set at a later date

 

Argentina soybean sales stall in June as currency gap widens, chamber head says

Argentine farmers’ soybean sales to commercial buyers stalled in June, the head of the country’s crushing and export chamber (CIARA-CEC) told Reuters, falling 45% from May’s sales as a weakening peso in informal exchange markets led farmers to hold onto their stocks of the oilseed.

The South American country is one of the world’s top soy suppliers and jostles with Brazil as the No. 1 exporter for processed soyoil and soy meal, which are used in vegetable oil and animal feed. June full-month soybean sales figures have not been previously reported.

Reduced commercial soybean supplies for processing indicate a likely drop-off in Argentina’s subsequent exports of soyoil and soymeal.

In an interview late on Thursday, CIARA-CEC president Gustavo Idigoras said soybean sales were around 3.8 million metric tons this month, down sharply from May when farmers sped up sales to earn cash to cover expenses for wheat planting.

Argentina is in a deep recession and has depleted central bank reserves and high inflation, making it desperate for foreign currency income from soy, its top export.

However, a weakening of the peso currency in popular, informal exchange markets has seen rates there diverge from the central-bank-controlled official rate. That means exporters who largely use the official rate to turn their dollars into pesos end up losing out, encouraging hoarding of soybean stocks.

“When the gap between the official dollar rate, (informal) dollars and the black-market dollar begins to grow, it decreases and almost paralyzes the grain-trading market in Argentina,” Idigoras told Reuters. “It’s just natural.”

There is now a gap of 45% between the value of the official peso at 912 per dollar, and the informal one, of about 1,320 pesos per dollar. That gap has widened from around 15%-20% in May.

 

Brazil’s flood-hit state to produce 55% more wheat, crop agency says

Brazil’s southernmost state of Rio Grande do Sul, battered by heavy rains earlier this year, is expected to reap 4.07 million metric tons of wheat this season, 55.27% more compared to the previous cycle, crop agency Emater said on Friday.

The agency estimated, however, that the area planted with wheat in Rio Grande do Sul will total 1.3 million hectares (3.2 million acres), a drop of 12.84% compared to the previous year.

If the projection is confirmed, Brazil’s stance in global wheat markets could change.

On one hand, Brazil could potentially reduce its overall wheat purchases in coming months, as it does not produce enough for domestic consumption. According to trade data compiled by wheat millers lobby Abitrigo, Brazil acquired 2.76 million tons of wheat from Argentina, the U.S. and Canada in the year through May.

On the other hand, more supplies could help it explore more opportunities abroad. Brazil exported 2.17 million tons through June, according to grains exporters lobby Anec.

Emater Director Claudinei Baldissera told a press conference that the projected planted area already takes into account the effects of unprecedented flooding last month, adding farmers reduced their wheat area due to price factors and issues related to rural insurance accessibility.

“Even if there had been no calamity, there were signs the wheat area would be reduced,” he said.

Baldissera added the climate disaster, which submerged entire cities, killed livestock and partly damaged crops like soy, also caused a loss of nutrients in the soil in many parts of the state, contributing to a reduction in wheat planting intentions.

According to Emater’s weekly report, climate risks and the economic frustration of the last harvest also led farmers to plant less wheat.

An expected 77% increase in wheat yields, however, should more than compensate a reduction of the wheat area, which lost some space to canola, Emater said.

 

SOYBEAN/CEPEA: Liquidity is low, but exchange rate increase sustains values in Brazil

There are only some players operating in the soybean market. While some consumers claim to have stocks in the mid-term, many producers are unwilling to trade large amounts – they are focused on the dollar valuation against Real, which tends to attract importers to Brazil. Another reason for players to be currently away from closing deals is the possible increase in the international demand for Brazilian products in the coming days – the crushing industry union in Argentina has announced to be on strike.

Prices remained firm due to the dollar valuation. The US dollar quotations upped 1.6% comparing June 20 and 27, at BRL 5.502 on June 27. The ESALQ/BM&FBovespa Index (Paranaguá) moved up 0.3% from June 20-27, closing at BRL 139.32 per 60-kg bag on June 27. The CEPEA/ESALQ Index (Paraná) rose 0.02%, to close at BRL 133.94 per 60-kg bag. On the average of the regions surveyed by Cepea, soybean prices in the over-the-counter market (paid to farmers) and in the wholesale market (deals between processors) increased 0.2%.

Price rises in Brazil were limited by expectations of high stocks. Players surveyed by Cepea say there are batches from the previous season stocked. Data from the USDA indicate that initial stocks in the 2023/24 crop in Brazil were a record, at 36.81 million tons. This scenario pressed down export premiums in the country.

BYPRODUCTS – On the average of the regions surveyed by Cepea, soymeal prices moved down 1% between June 20 and 27. The soy oil quotation upped 1% in the same comparison, at BRL 5.630,96 per ton (in São Paulo city with 12% ICMS) on June 27.

 

CORN/CEPEA: Supply increases; prices move down

The second crop harvesting is moving at a faster pace this year, boosting the supply in many regions, such as Paraná and Mato Grosso. Therefore, some producers are more flexible to close new deals, but purchasers are limiting trades, preferring to receive corn that had been contracted before.

Due to this scenario and to the high global supply in the current season (because of higher output in the United States and in Argentina), corn quotations are moving down in most areas surveyed by Cepea. Not even the dollar valuation was enough to avoid decreases in the spot market. Still, US dollar values may boost the export parity and allow increases in the domestic market.

From June 20-27, the ESALQ/BM&FBovespa Index (Campinas, SP) downed 1%, closing at BRL 57.54 per 60-kilo bag on June 27. On the average of the regions surveyed by Cepea, corn values dropped 0.4% in the wholesale market (deals between processors) and 0.3% in the over-the-counter market (paid to farmers) between June 20 and 27.

At the port of Paranaguá (PR), quotations decreased 0.8% between June 20 and 27.

Exports have totaled only 636.9 thousand tons up to third week of June, accounting for 61.5% of the volume shipped in June/23 (data from Secex) and below that forecast by Anec for this month, of 1.06 million tons.

According to data from Conab, the harvesting of first and second crops hit 91.6% and 28% of the total, respectively, up to June 23, advancing 3.5 and 14.9 percentage points compared to the season before.

As for the second crop, there are only three states left to finish harvesting: Maranhão, Piauí, Bahia and Rio Grande do Sul.

 

SovEcon Cuts 2024-25 Russian Wheat Export Estimate to 46.1M Tons

Russia is seen exporting 46.1 million tons of soft wheat in the 2024-25 season, a cut from a previous forecast of 47.8 million tons, SovEcon Managing Director Andrey Sizov said by email.

• The cut comes on account of a smaller Russian wheat crop
  • Wheat exports in the current season, that ends June 30, are estimated at 52.2 m tons
• Total grain and pulse exports seen at 56m tons, down from 70.4 m tons the season before
• Estimates for the 2024/25 barley production are 18.6m tons vs 21.2m tons year before
  • Exports are expected to fall to 3.1m tons from 7m tons
• Corn production seen at 14.6m ton, down from 16.6m tons
  • Exports forecast to fall to 3.6m tons from 6.9m tons
• SovEcon believes that with a substantially smaller crop and rising food prices, there is a higher chance of additional export restrictions in the new season: Sizov

 

Argentina Farmers Priced 51% Less Soy in June vs. May: Rosario

Soybean farmers sold and set prices with exporters-crushers for an average of 87,000 metric tons a day in June, the Rosario Board of Trade said in a weekly report.

• That’s 51% less than the daily average of 177,000 tons in May
• Falling global soy markets are holding back pricing by farmers, who are expected to focus sales in the coming weeks on corn: Rosario
• NOTE: Farmers also sell and deliver soy without pricing contracts, but dollars from those export trades are generally only sold on Argentina’s FX market — boosting reserves at the central bank — when prices are set at a later date.

 

Egypt Expects Local Wheat Purchases at 3.6m Tons in 2024 Season

Egypt has purchased 3.55m tons of wheat from local farmers since season began in mid-April, according to the Supply Ministry.

• Expects purchases to increase to 3.6m tons by mid-July: Supply Ministry statement
• Egypt has decided to end the local wheat purchasing season in mid-July
• Wheat stocks are sufficient for 6.6 months: statement

 

Malaysia Palm Output Estimate Cut on El Niño, Labor: USDA FAS

Malaysia’s palm oil production in the 2023-24 season, which ends in September, is seen at 18.8m tons, the USDA’s Foreign Agricultural Service said in a report posted late last week.

• That’s below the official USDA estimate for 19m tons
• Cites labor limitations and impact of hot and dry weather from El Niño
• Outlook for stockpiles cut to 1.83m tons, below official USDA outlook for 2.28m tons

 

US Weekly Beef and Pork Production Estimates: USDA

US federally inspected beef production falls to 516m pounds for the week ending June 29 from 526m in the previous week, according to USDA estimates published on the agency’s website.

• Cattle slaughter down 1.8% from a week ago to 609m head
• Pork production unchanged from a week ago, hog slaughter rises 0.1%
• For the year, beef production is 1.6% below last year’s level at this time, and pork is 1.1% above

 

U.S. Gulf UAN Nitrogen Fertilizer Price Drops 6.29%

Nitrogen fertilizer, represented by Urea Ammonium Nitrate (UAN) on the U.S. Gulf at NOLA, fell 6.29% to $209 per short ton in the week ended June 28, according to Green Markets data compiled by Bloomberg Intelligence.

• Click here for BI’s Agricultural Chemicals Dashboard.
• UAN U.S. Gulf NOLA dropped 13.1% during the last month and was down 24.2% during the last 3 months
• All major UAN nitrogen benchmark prices fell while UAN U.S. Gulf NOLA fell the most during the last week
• Shares of CVR Partners LP and CF Industries Holdings Inc. were up, while Nutrien Ltd. was down in the latest week
• Major Urea nitrogen benchmark prices were mixed
• Major Ammonia nitrogen benchmark prices were unchanged
• Natural gas, which drives producer costs, has decreased 7.4% during the last week and was down 8.4% during the last month
• The price of corn, a driver of fertilizer purchases, decreased 7.7% during the last week and was down 14% during the last month

 

VLI Studies Terminal Expansion at Brazil’s Largest Port

VLI has started studies for an expansion of its Tiplam terminal at Port of Santos in southeastern Brazil, Interim Chief Executive Officer Fabio Marchiori says on the sidelines of a conference in Sao Paulo.

• Nominal annual capacity of the port could rise to 20 million tons from current 15 million tons
  • Capacity increase could come from efficiency gains
• Expansion could start as soon as next year, depending on the company getting the necessary licenses
• Terminal currently handles soybeans, corn, sugar and fertilizer

 

China Warns of Severe Rainstorms After Northeastern River Floods

China warned of more rainstorms across the country, urging people to prepare for potential landslides as a prolonged bout of severe weather threatens travel and agriculture.

The country on Saturday issued a red alert for rainstorms, the most severe in its four-tier weather warning system, Xinhua News Agency reported. It cited the National Meteorological Center, which warned about possible geological disasters occurring in some rain-hit regions, including Anhui, Jiangsu, Hubei, Hunan, Jiangxi and Guizhou provinces.

Meanwhile, record flooding of the Wusuli River in northeastern China is putting pressure on farmers in the area known as the major granary of the country. Flooding upstream is the largest ever measured on the river, which forms part of the boundary between China and Russia, according to the Ministry of Water Resources.

The area has had accumulated rainfall about three times the average since June 20, the most for the period since 1961, the ministry said on its Wechat account. Light to moderate rain is expected to continue next week and various sections of the river will see more flooding, it said.

Heilongjiang province is China’s leading grain production area. In recent weeks, drought in China’s central provinces and floods in the northeastern and southern parts of the country have been dragging down its harvest outlook.

 

New Zealand Institute Watches for Emerging La Niña Later in 2024

NZ’s National Institute for Water and Atmospheric Research comments in seasonal outlook, published Monday in Wellington.

• “The models that are tracking closest to the observations suggest a La Niña of moderate intensity may develop later this year”
• See a 60-70% chance of La Niña conditions developing in September-November
• Next three months may be wetter due to La Nina-like tendencies, with a tropical moisture plume forming in mid-July
• Temperatures are likely to be near or above-average, and there may be fewer frosts and above-average soil temperatures

 

 

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