Global Ag News for July 9.24

TOP HEADLINES

France Sees Wheat Crop Plunging to 4-Year Low on Heavy Rains

• The dip in Europe’s biggest producer may restrain exports
• This spring was fourth wettest season on record in France

France’s soft-wheat harvest is seen slumping to levels near those last seen in 2020, as excessive rain in Europe’s biggest agricultural producer hurt crop outlook.

Wheat production is set to drop 15.4% this year to 29.7 million tons, according to data from the Agriculture Ministry. That remains 14.2% below the 5-year average.

“In twenty years, only two other harvests have not exceeded 30 million tons,” according to the report. The estimate, likely to change as harvest progresses, places 2024 production near 29.2 million tons in 2020.

Forecasts for the crop had already been slashed over the past months because of ceaseless rains and a lack of sunshine since planting season in the fall, along with mild temperatures favoring diseases. Soft-wheat planted areas dropped 10.8% to 4.2 million hectares compared to 2023.

The dip in output could restrain exports from the country, which often hawks wheat across North Africa and the Middle East. And it comes as bad weather has also battered crops in other major exporters like Russia, with the US government forecasting global stockpiles to hit a nine-year low. Wheat futures in Paris jumped as much as 0.7% on Tuesday, before paring some gains

This spring was the fourth wettest on record in France, with rainfall up 45% more than the 10-year average between 1991-2020, according to Meteo France. This resulted in floods and landslides across the country, including in agricultural areas. June also saw rainfall up 20%.

Excess rain — especially close to the start of harvest in July — can also hurt the quality of grain and make crops more susceptible to fungal diseases. Some of the damage is visible already.

Only 58% of France’s soft-wheat crop was rated in good or very good condition as of July 1, well below last year’s level of 81%, according to FranceAgriMer data.

Other highlights from the report:

• Winter barley production down 17.5% to 8 million tons from 9.7 million in 2023
• Spring barley output seen rising to 3.3 million tons from 2.6 million
• Durum wheat output seen stable, up 0.3% to 1.3 million tons
• As of July 1, area under corn revised upwards to 1.6 million hectares, up 22% from 2023

 

 

FUTURES & WEATHER

Wheat prices overnight are down 1/4 in SRW, up 3/4 in HRW, down 3/4 in HRS; Corn is down 1/2; Soybeans down 7 1/4; Soymeal down $1.20; Soyoil down 0.90.

For the week so far wheat prices are down 18 1/2 in SRW, down 19 1/4 in HRW, down 15 3/4 in HRS; Corn is down 17 1/4; Soybeans down 36 3/4; Soymeal down $11.90; Soyoil down 1.21.

For the month to date wheat prices are down 3 1/4 in SRW, down 8 1/4 in HRW, up 3 3/4 in HRS; Corn is down 13 1/2; Soybeans down 11 3/4; Soymeal down $15.30; Soyoil up 3.57.

Year-To-Date nearby futures are down 11.9% in SRW, down 10.7% in HRW, down 14.2% in HRS; Corn is down 16.0%; Soybeans down 9.2%; Soymeal down 1.7%; Soyoil up 1.6%.

Chinese Ag futures (SEP 24) Soybeans down 33 yuan; Soymeal down 66; Soyoil down 116; Palm oil down 104; Corn down 21 — Malaysian Palm is down 92.

Malaysian palm oil prices overnight were down 92 ringgit (-2.28%) at 3950.

 

There were changes in registrations (-1 Oats, -143 Corn, -225 Soyoil). Registration total: 524 SRW Wheat contracts; 7 Oats; 365 Corn; 20 Soybeans; 2,323 Soyoil; 0 Soymeal; 0 HRW Wheat.

Preliminary changes in futures Open Interest as of July 8 were: SRW Wheat up 4,477 contracts, HRW Wheat down 1,546, Corn up 18,706, Soybeans up 2,648, Soymeal up 2,986, Soyoil down 4,218.

 

Northern Plains: Sporadic showers impacted the Dakotas over the weekend. Southeastern South Dakota, that had massive flooding in June has so far escaped the heavy rain, but other areas have seen it instead. Eastern areas will continue to see daily chances for showers early this week with showers waning later in the week with the return of high pressure. Temperatures will be near or below normal through the middle of the week with warmer temperatures returning later in the week.

Central/Southern Plains: Hurricane Beryl made landfall between Corpus Christi and Houston, Texas, early Monday morning and is expected to quickly weaken but shift northeast early this week. A swath of intense rainfall is likely across eastern Texas and Oklahoma. Behind it, some isolated showers and below normal temperatures will linger as the trough across the Central U.S. slowly weakens this week. Conditions trend drier and warmer by this weekend.

Midwest: Scattered showers were seen across many areas this weekend as a system from southern Canada advanced east. Eastern areas of the region will need to watch for the remnants of Hurricane Beryl that may bring some heavy rain if it moves that far north. The rain may be wanted for some areas that have had drought conditions lately. Cooler air will persist through much of this week before temperatures increase by the weekend. Western areas will see some more appreciable breaks in rainfall later this week but another system from southern Canada could provide some scattered showers to the area late this weekend into early next week.

Delta: A relief from the recent heat came this weekend with a trough in the Central U.S. providing cooler temperatures. The remnants of Hurricane Beryl could provide a swath of heavy rainfall to central and southern areas early this week as the remnants combine with the trough. Some areas that are too dry could end up being too wet by the middle of this week. Temperatures will be seasonable this week with warmth building across northern areas by early next week.

Canadian Prairies: Scattered showers persist in eastern areas through the first half of the week with mostly dry conditions in western areas. Above to well above normal temperatures in western areas will expand east throughout the week with warm conditions likely persisting into early next week. Another round of rain may develop this weekend as a trough passes through the region. The drier and warmer combination is a good one for many areas that have adequate-to-surplus soil moisture and slower crop development.

Brazil: A front will linger across the south this week. Areas of heavy rain are forecast, which are not needed in the state of Rio Grande do Sul that is still recovering from flooding. Winter wheat planting and development are behind, and this will not help. Safrinha corn harvest continues in earnest across the country and is well ahead of schedule. Rain coming to southern areas will slow down what remains. Colder air moving in behind the front may cause some frosts, but that is not expected to cause any damage.

Argentina: Soil moisture across the country continues to be low for winter wheat establishment. High pressure will keep conditions dry throughout this week and possibly into early next week. Cold temperatures will continue through this week with widespread frosts also being unfavorable for wheat. Hard freezes that would cause damage are unlikely though.

The player sheet for 7/8 had funds: net sellers of 6,000 contracts of SRW wheat, sellers of 20,000 corn, sellers of 14,000 soybeans, sellers of 8,000 soymeal, and sellers of 4,000 soyoil.

TENDERS

• CORN SALE: The U.S. Department of Agriculture confirmed private sales of 135,636 metric tons of U.S. corn to undisclosed destinations, of which 50,800 tons is for delivery in the 2023/24 marketing year and that 84,836 tons is for delivery in the 2024/25 marketing year.
• WHEAT TENDER: Algeria’s state grains agency OAIC has issued an international tender to buy soft milling wheat for shipment to two ports only
• WHEAT TENDER: Jordan’s state grain buyer has issued an international tender to buy 120,000 metric tons of milling wheat that can be sourced from optional origins
• FEED 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

• FEED WHEAT AND BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said it will seek 65,000 metric tons of feed wheat and 25,000 tons of feed barley, to be loaded by Oct. 31 and arrive in Japan by Dec. 19, via a simultaneous buy and sell (SBS) auction that will be held on July 10.
• WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy a total of 107,330 metric tons of food-quality wheat from the United States, Canada and Australia, in a regular tender that will close on Thursday.

 

 

TODAY

US Inspected 1.024m Tons of Corn for Export, 273k of Soybeans

In week ending July 4, according to the USDA’s weekly inspections report.

• Corn: 1,024k tons vs 831k the previous wk, 376k a yr ago
• Soybeans: 273k tons vs 320k the previous wk, 301k a yr ago
• Wheat: 341k tons vs 335k the previous wk, 419k a yr ago

 

US Corn, Soybean, Wheat Inspections by Country: July 4

Following is a summary of USDA inspections for week ending July 4 of corn, soybeans and wheat for export, from the Grain Inspection, Packers and Stockyards Administration, known as GIPSA.

• Soybeans for Germany-bound shipments made up 110k tons of the 273k total inspected
• Mexico was the top destination for corn inspections, Japan led in wheat

 

Brazil C-S Winter Corn Harvest 63% Done as of July 4: AgRural

This compares with 49% a week earlier and 26% a year before, according to an emailed report from consulting firm AgRural. Mato Grosso and Parana states continue to lead the works

 

Brazil Center-South Winter Corn Sales 34% Completed: Safras

Compares with 34.1% in July 2023 and 43.1% in a five-year average, according to report from consulting firm Safras & Mercado.

• Consultancy firm estimates 83.6 million metric tons of corn this year, compared with 99.1 million tons in 2023
• Sales is at 42.4% of total winter corn expected crop for Mato Grosso state, 19.9% in Paraná, 39.6% in Mato Grosso do Sul, 9.8% in São Paulo, 29.3% in Goiás and Distrito Federal, 7.2% in Minas Gerais
• Winter corn sales in Matopiba region, which includes parts of Maranhão, Tocantins, Piauí and Bahia states, is at 30% of forecast output of 7.05 million tons, compared with 51.7% a year ago

 

Brazil corn sales in line with last year -consultancy

Brazilian farmers have so far sold 34% of the second corn crop they are expected to produce across the country’s south-central region this year, consultancy firm Safras & Mercado said on Monday, compared to 34.1% sold in the same period last year.

Safras said it sees the region’s second corn harvest to come in at 83.639 million tons this year, down from 99.098 million tons last season.

 

Brazil 2024-25 Soybean Crop Nearly 16% Sold as of July 5: StoneX

Advanced sales for the crop to be harvested in 2025 compare to less than 13% a year earlier, commodity brokerage firm StoneX said by email.

Brazil farmers have sold 4% of this year’s winter corn harvest, which is underway

 

Brazil Soy Profits Fueled by Weak Currency in Blow to US Farmers

• Brazilian real losses have offset decline in soybean prices
• Move has spurred farmer sales at world’s largest supplier

A selloff in Brazil’s currency over the past month is shielding farmers in the world’s top soybean exporter from this year’s price plunge, giving them an edge over US rivals.

The real has lost 11% against the dollar this year — spurred by worries about the nation’s budget gap. That in turn brings about that much more revenue for soybeans than in 2023. The decline in the real has encouraged farmers to boost sales, deepening a rout in benchmark prices that’s eroded revenue for American peers.

Because Brazil is the world’s largest crop exporter, the ups and downs of its currency play a key role in agricultural markets. A weaker real means farmers in the South American nation can better withstand lower commodity prices — which are typically denominated in dollars — than their US counterparts. That would typically encourage exports from the region, putting downward pressure on futures contracts traded in places such as Chicago and New York.

In a clear example of the real’s influence on trading, Brazilian farmers sold more than 4 million metric tons of soybeans in the five days ended July 5, the most for a similar period since October 2020, after the currency plunged to its weakest level in more than two years against the dollar, according to Victor Martins, a risk manager at brokerage firm Amius Ltd.

“This is bad news for US exporters,” Martins said in a phone interview. The currency boost may give Brazilian farmers a competitive advantage lasting well into the fourth quarter, shortening the period in which US suppliers typically have the upper hand, he added.

 

Ukraine Exported 29.3M Tons of Corn in 2023-24 Season: UGA

Ukraine’s corn exports reached 29.3m tons in 2023-24 marketing year that ended in June, the country’s grain association said in an emailed statement Tuesday.

• Corn production amounted to 29.6m tons
• Wheat exports totaled 18.4m tons, with production at about 22m tons
• Combined, Ukraine exported 57.5m tons of grains and oilseeds in 2023-24
  • That’s about steady with the prior season
• “Last season, the most crucial driver for Ukraine’s grain exports was an opening of Ukraine’s humanitarian corridor, which enabled maritime exports from deep-water Odesa seaports”

 

Russian wheat export prices continue to fall amid new crop supply

Russian wheat export prices continued to fall last week, supported by the arrival of the new crop on the market following an early start to the harvesting season.

Early estimates of July exports suggest a possible sharp decline, analysts said.

The price of 12.5% protein Russian new crop wheat scheduled free-on-board (FOB) with delivery in August was $216 per metric ton at the end of last week, $10 lower than a week earlier, according to the IKAR consultancy.

Sovecon determined the price of wheat with a protein content of 12.5% for the nearest delivery at $221-224 per ton at the end of last week, down from $227-$229 per ton FOB.

IKAR head Dmitry Rylko linked the price drop to the approaching peak of the harvesting campaign and seasonal supply.

“The Russian domestic market is beginning to feel the pressure of the harvest,” Sovecon said in a weekly note.

“Southern farmers are selling actively despite a sharp decrease in CPT bids at the ports, likely reflecting a need to replenish working capital, which is uncommon for the wealthy southern producers.”

Last week Sovecon revised the new Russian wheat crop forecast up to 84.1 million tons from 80.7 million tons previously, with production numbers for all key regions adjusted higher.

As of June 28 Russian farmers had harvested 10.3 million tons of grain against 2.1 million tons a year earlier, from 2.4 million hectares, up from a previous 0.5 million hectares.

The average yield was 4.25 tons per hectare, up from 3.97 tons a hectare the year before.

The wheat harvest totaled 6.9 million tons, up from 0.2 million tons, from 1.47 million hectares, against 0.03 million hectares, with an average yield of 4.68 tons per hectare, versus 4.57 tons.

 

WHEAT/CEPEA: Dry weather concerns agents; trades move at a slow pace

The dry weather over the last weeks, especially in Paraná, São Paulo and Santa Catarina, has limited the advance of wheat planting activities and the development of crops. This scenario concerns players surveyed by Cepea, since it can reduce the productivity. At the same time, rains in most part of Southern Brazil last weekend may favor the situation.

In Paraná, areas in good conditions dropped from 69% in the week before to 67%, according to a report released by Seab/Deral on July 4. There had been no rainfall in 40 days in many areas of the state, and it is the worst crop beginning since 2011. In Rio Grande do Sul, planting activities hit 69% of the area up to July 4, according to Emater/RS. The current weather in RS has been favoring crops.

Players surveyed by Cepea say there is a gap between prices of purchasers and sellers. While sellers with high-quality product ask for higher values, players from mills try to purchase the product at lower quotations.

In general, prices continue relatively firm, sustained by the low availability of the wheat in this offseason period and by high dollar quotations and prices abroad.

According to data from Cepea, between June 28 and July 5, the prices paid to wheat farmers (over-the-counter market) rose 0.18% in Rio Grande do Sul and 0.13% in Paraná, but dropped 0.25% in Santa Catarina. In the wholesale market (deals between processors), quotations moved down 0.27% in São Paulo and 0.43% in Rio Grande do Sul, but upped 2.23% in Paraná and 1.38% in Santa Catarina. Dollar quotations decreased 2.17% against Real in the same period, at BRL 5.467 on July 5.

BYPRODUCTS – From June 28 to July 5, values of wheat bran in bags rose 1.76% and 1.27% for the product in bulk.

EXPORTS AND IMPORTS – Brazil imported 604.6 thousand tons of wheat in June, 8% less than in May, but moving up 90.2% in relation to June/23 – data from Secex. In the first semester of 2024, wheat imports totaled 3.37 million tons (the highest volume for the period since 2012), against 2.1 million tons in the same period last year.

Also according to Secex, exports totaled 25.87 thousand tons in June, the smallest volume in 2024 so far. In the first semester of this year, on the other hand, shipments reached the record of 2.48 million tons.

 

India’s Monsoon-Sown Rice Area Rises, Helped by Recovery in Rain

Farmers in the world’s biggest exporter of rice have planted the crop on about 6 million hectares (14.8 million acres) of land as of July 8, up 19% from a year earlier, according to the farm ministry.

The area allocated to oilseeds rose to 8.03 million hectares, a jump of 55% from a year earlier, the ministry said in a statement on Monday.

The country’s June-September monsoon rains have been 2% above normal as of Sunday, according to the India Meteorological Department. Monsoon crop sowing normally begins in late May and peaks in July, while harvesting starts in late September.

 

 

 

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