Global Ag News for June 24.24

TOP HEADLINES

Fire Halts Operations at Key Brazil Sugar and Grains Terminal

A fire that broke on Thursday night temporarily suspended operations at the Tiplam terminal, located in Brazil’s largest port of Santos, operator VLI says in emailed note.

• Fire was quickly contained without any injuries or significant structural damage: VLI
• Operations at the site were halted so that technicians can carry out repairs and investigate causes
• Operations at piers 2 and 3 have been suspended until at least June 27, according to shipping agency Williams Brazil

FUTURES & WEATHER

Wheat prices overnight are up 2 3/4 in SRW, up 1/2 in HRW, up 1 3/4 in HRS; Corn is down 1/4; Soybeans up 4; Soymeal down $0.30; Soyoil unchanged.

Markets finished last week with wheat prices down 50 in SRW, down 48 3/4 in HRW, down 47 in HRS; Corn is down 17 1/4; Soybeans down 25 3/4; Soymeal down $12.30; Soyoil up 0.40.

For the month to date wheat prices are down 121 in SRW, down 135 3/4 in HRW, down 130 3/4 in HRS; Corn is down 14; Soybeans down 60 1/2; Soymeal down $18.30; Soyoil down 1.68.

Year-To-Date nearby futures are down 10.5% in SRW, down 9.2% in HRW, down 15.2% in HRS; Corn is down 7.5%; Soybeans down 9.6%; Soymeal down 5.7%; Soyoil down 8.0%.

Chinese Ag futures (SEP 24) Soybeans up 64 yuan; Soymeal up 3; Soyoil down 20; Palm oil down 46; Corn up 19 — Malaysian Palm is unchanged.  Malaysian palm oil prices overnight were unchanged ringgit () at 3900.

There were changes in registrations (-11 Soybeans). Registration total: 1,479 SRW Wheat contracts; 39 Oats; 747 Corn; 218 Soybeans; 2,589 Soyoil; 0 Soymeal; 0 HRW Wheat.

Preliminary changes in futures Open Interest as of June 21 were: SRW Wheat down 10,822 contracts, HRW Wheat down 1,975, Corn down 18,584, Soybeans down 24,041, Soymeal down 3,874, Soyoil down 2,312.

 

Northern Plains: Scattered showers went through over the weekend and heavy rain was flooding southeastern South Dakota. A couple of systems will bring scattered showers through the region this week, but heavy flooding rain is not in the forecast. Heat has developed into the region on Sunday and temperatures will waffle around as systems come and go.

Central/Southern Plains: Heavy rain went through a patch of Nebraska over the weekend, but showers were spotty and most places stayed dry. Temperatures rose and will remain hot for the next few days, especially south. A front will move through with chances for thunderstorms Tuesday and Wednesday and another will move through Friday through the weekend with more and come cooler air, especially north. The active storm track is favoring northern and western areas with rain while southeastern areas are getting drier after flooding rains in May and early June. The heat will be stressful to crops when it exists, but those across the north are seeing better precipitation and mostly good conditions fro developing corn and soybeans.

Midwest: Heavy rain continued across the northwest over the weekend, causing flooding along the Minnesota-Iowa through southern Wisconsin. Flood damage is likely widespread in this area. Even those areas that did not receive flooding rains this weekend to the north of this zone have seen a lot of rain in recent weeks, which has caused ponding and flooding of its own. Several more storm systems will move through the region going into next week, providing some better shower chances for those in the east that have been very hot and dry for the last week or two. The rain should help with flash drought conditions that are developing there, but amounts are not forecast to be very heavy outside of the Upper Midwest, more like light to moderate rainfall. But if rain can continue with this sort of frequency, that would also be beneficial even if lighter. The pattern stays active well into July, a favorable look to the forecast, or at least not a terrible outlook.

Delta: It was quiet over the weekend with increasing heat. A front will move through on Wednesday and Thursday with widespread showers and thunderstorms forecast and some milder temperatures, a break the region needs. But the break from the heat is brief, with temperatures rising again to end the week. Models are forecasting occasional fronts to drift into the region going into July, but not with heavy precipitation, which may be stressful with the higher temperatures.

Canadian Prairies: Scattered showers went through over the weekend and multiple systems that will move through over the next couple of weeks will continue that trend. Rainfall amounts do not look overly heavy for too many areas, though thunderstorms could produce some patchy areas of it. Overall, good soil moisture is likely to be maintained, though eastern areas could still use some drier conditions as soggy soils are more widespread there. Temperatures will be variable, but trend cooler late this week and weekend. Some limited frost will be possible, but unlikely to be widespread.

Brazil: A front moved back into the region over the weekend, but the forecast for heavy rain has diminished. Some rain will get into southern safrinha corn areas, but the lack of heavy rain will allow harvest to continue. Another front will go through Friday and Saturday with more scattered showers but also a burst of colder air. Though some frosts will be possible, it will be unlikely to have an affect on either mature corn or germinating winter wheat. Heavy rain from last month and last week continue to limit wheat planting, however.

Argentina: Isolated showers went through the country over the weekend, but were light and spotty. Rainfall deficits continue to build up and soil moisture is low for winter wheat establishment. Some more isolated showers will go through this week and a front later this week will bring in a burst of colder temperatures that will produce some frosts for a couple of days.

Europe: A system brought scattered showers through most of Europe over the weekend. The system has moved into the Mediterranean, where showers will continue for Italy and the southeast for much of the week, favorable for increasing soil moisture for drought areas in the southeast. Another couple of systems will move through the continent later this week and weekend, but models have backed off on the heavy rainfall potential for France and Germany, which need an extended break from the rain.

Black Sea: A few showers went through over the weekend but most areas stayed unfavorably dry. A couple of fronts and systems will bring some limited showers through the region this week and next, but deficits continue to be large throughout most of the region and will have an adverse effect on developing corn and sunflowers. Temperatures will not be overly hot, but should trend more above normal by later this week.

Australia: Limited showers moved through over the weekend, but most areas stayed dry. Another system will move through western areas midweek and through eastern areas late this week and weekend. Widespread rainfall, though only light in some areas, should be favorable for wheat and canola establishment.

The player sheet for 6/21 had funds: net sellers of 4,000 contracts of SRW wheat, sellers of 5,000 corn, sellers of 3,000 soybeans, buyers of 3,500 soymeal, and sellers of 3,000 soyoil.

TENDERS

• CORN PURCHASE: South Korea’s Major Feedmill Group (MFG) purchased an estimated 132,000 metric tons of animal feed corn in a private deal without issuing an international tender.
• CORN PURCHASE: South Korea’s Feed Leaders Committee (FLC) purchased about 66,000 metric tons of corn expected to be sourced from South America or South Africa.
• CORN PURCHASE: The Korea Feed Association (KFA) Busan section in South Korea purchased around 66,000 metric tons of animal feed corn expected to be sourced from either South America or South Africa in a private deal late on Friday
• WHEAT PURCHASE: The Taiwan Flour Millers’ Association purchased an estimated 104,150 metric tons of milling wheat to be sourced from the United States in a tender.

PENDING TENDERS

• VEGETABLE OIL TENDER: Egyptian state grains buyer the General Authority for Supply Commodities (GASC) said on Saturday it was seeking vegetable oils in an international tender for arrival August 10 to 25 and/or August 26 to September 10.
• WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy up to 120,000 metric tons of milling wheat which can be sourced from optional origins.
• FEED BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase up to 120,000 metric tons of animal feed barley.

 

 

TODAY

US Sold 640.5K Tons of Soybeans Last Week; 605K of Corn: USDA

USDA releases net export sales report on website for week ending June 13.

• Corn sales fell to 605k tons vs 1,126k in previous week
• Soybean sales rose to 641k tons vs 380k in previous week
• All wheat sales rose to 579k tons vs 246k in previous week

 

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 June 13, according to data on the USDA’s website.

• Top buyer of soybeans: China with 214k tons
• Top buyer of corn: Japan with 371k tons
• Top buyer of wheat: South Korea with 119k 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 June 13, according to data on the USDA’s website.

• Mexico bought 7.4k tons of the 21.4k tons of pork sold in the week
• South Korea led in beef purchases

 

US Cattle on Feed Fell to 11.58M Head on June 1

The feedlot herd fell 0.1% from a year ago, according to the USDA’s monthly report. Analysts were expecting a drop of 0.9%

• Placements onto feedlots up 4.3% to 2.046m head
• Cattle marketed from feedlots increased 0.2% to 1.955m head

 

From Black Sea to US Midwest, extreme weather threatens crop output

• Hot, dry weather forecast for Russia, Ukraine in coming months
• Fears of flooding in U.S. Midwest after near-record temperatures
• Relief seen for China’s corn, soybean crops hit by heatwave
• India set for normal weather, Australia seen getting more rains

Forecast dryness in the Black Sea region’s breadbasket is likely to stunt sunflower and corn yields, while heavy rain in the United States after near-record temperatures threaten to take a toll on crops, hitting world supplies and pushing prices higher.

“The weather forecast for the Black Sea region is a big red flag,” said Chris Hyde, a meteorologist at U.S.-based Maxar, with dryness and below-normal rains expected for July and August likely to crimp the region’s key corn and sunflower crops.

Record temperatures in major global growing regions have delayed planting and hurt developing crops as the impact of climate change intensifies, with vast swathes of farmland in Russia, China, India and the United States experiencing extremely hot conditions and below-normal rainfall.

Global wheat prices Wv1 jumped to a 10-month high in May after adverse weather trimmed yields for the maturing crop in Russia, the biggest exporter.

Hot weather in southern Russia will hit crops because of a lack of soil moisture, with lower precipitation and heat also expected in Urals, Western Siberia and Transbaikalia, Russia’s Hydrometeorological Centre said in a forecast.

Southern and eastern Ukraine have also seen hot and dry weather, with precipitation between May 1 and June 10 only 20-50% of normal, according to the state weather forecaster, with drought hindering development of winter and spring crops in parts of the Kharkiv and Donetsk regions.

“The month of May in Ukraine turned out to be one of the driest for the last 30 years,” state forecasters said. “In northern regions, in particular in Zhytomyr, hail resulted in damage of spring crops such as corn, soybeans and sunflower.”

In the United States, a top food exporter, intense heat has gripped parts of the east coast, while excessive rains in the key Midwest growing region and forecasts for more wet weather have raised fears of floods.

“In the Midwest, the focus is shifting from heat to too much rain, which could result in flooding on corn and soybean producing areas, especially in the Upper Midwest,” Hyde said.

CHINA, INDIA WEATHER SEEN IMPROVING

In Asia, ample rains are expected to alleviate severe dryness in parts of China, a top soybean buyer, while rains during India’s monsoon, running a fifth below normal, are likely to recover, boosting agriculture in the world’s biggest rice exporter and top edible oil importer.

“China’s corn and soybean producing north and east has been dry and a worry,” said Hyde. “But the weather is expected to be normal to slightly above normal precipitation in the July-September period, which will be beneficial for crops.”

In India, the monsoon is advancing after stalling for more than a week, a weather department official said.

“It has now gained much-needed momentum for its advance into the northern plains. In the next few weeks, we expect several spells of heavy rainfall that will erase the rainfall deficit. July is shaping up to be promising.”

The weather in Australia is expected to be normal, with some areas getting higher than average rains, boosting the wheat crop outlook, while mainly normal weather is also forecast in coming months in Argentina and Brazil.

 

SOYBEAN/CEPEA: High supply in South America presses down values in Brazil

The soy supply has been higher this week in the domestic spot market, a result of the closure of 2023/24 crop activities in Brazil and in Argentina. Therefore, part of soybean producers is willing to close deals involving higher volumes, also because they need to open room in warehouses for the second corn crop. Moreover, the international demand for the Brazilian soybean has been lower this week, influencing decreases of export premiums and domestic prices.

The ESALQ/BM&FBovespa Index (Paranaguá) decreased 1.1% from June 13-20, closing at BRL 138.93 per 60-kg bag on June 20. The CEPEA/ESALQ Index (Paraná) downed 1.6%, to close at BRL 133.91 per 60-kg bag. On the average of the regions surveyed by Cepea, soybean prices dropped 0.9% in the over-the-counter market (paid to farmers) and 0.6% in the wholesale market (deals between processors).

The dollar valuation against Real limited price drops in Brazil. The US dollar quotations rose 0.8% comparing June 13 and 20, at BRL 5.415 on June 20. On June 19, dollar values closed at BRL 5.448, the highest level since January 4, 2023.

BYPRODUCTS – Due to lower costs with the raw material, the industry profit margin has moved up over the last days, despite the decrease of byproducts quotations.

On the average of the regions surveyed by Cepea, soymeal prices moved down 0.2% between June 13 and 20. The soy oil quotation dropped 1.2% from June 13-20, at BRL 5.575,55 per ton (in São Paulo city with 12% ICMS) on June 20.

Abroad, weather conditions have been favorable for the 2024/25 planting activities in the United States. This scenario reinforces expectations of a good crop, pressing futures down and transferring decreases to the domestic market.

HOST-FREE PERIOD – In addition to the high output in South America, some regions in Brazil are likely to start the 2024/25 planting earlier this crop. Embrapa indicated that the host-free period was readjusted, allowing the anticipated planting in many regions in Brazil.

 

CORN/CEPEA: Harvesting moves at a good pace, but trades are slow

Cepea, 21 – The harvesting of both first and second corn crops continue to advance at a faster pace compared to the year before, favored by the warm and dry weather in most producing regions. Despite the supply increase, the pace of trades continues slow in the spot market in Brazil.

According to data from Conab, the harvesting of first and second crop hit 88.1% and 13.1% of the total, respectively, up to June 16, advancing 1 and 7.8 percentage points compared to the season before.

As for the pace of trades, consumers are unwilling to close deals, waiting for price drops due to the progress of the harvest. Sellers, in turn, are away from trades in some regions, such as in São Paulo, since they are focused on the harvest and on the possible productivity decrease due to unfavorable weather conditions during the development of the crops.

From June 13-20, the ESALQ/BM&FBovespa Index (Campinas, SP) upped 1.1%, closing at BRL 58.15 per 60-kilo bag on June 20. On the average of the regions surveyed by Cepea, corn values moved down 0.6% in the wholesale market (deals between processors) and 0.5% in the over-the-counter market (paid to farmers) between June 6 and 13.

At the port of Paranaguá (PR), values decreased 0.8% between June 13 and 20. Dollar prices, in turn, rose 0.8% in the same period, closing at BRL 5.415 on June 20.

Brazil shipped 392.42 thousand tons of corn in 21 producing days of June, accounting for 38% of the volume exported in the same month last year. Still, Anec indicates that shipments may total 1.02 million tons in June.

The summer crop harvest is practically at the end. Activities still need to be finished in Maranahão, Piauí, Bahia, Minas Gerais and Rio Grande do Sul.

As for the second crop, activities are more advanced in Mato Grosso, hitting 21.73% of the area, according to Imea. In Paraná, data from Seab/Deral indicates that the harvest reached 29% of the total until June 17.

 

US Pork Production Up 1.7% This Week, Beef Rises: USDA

US federally inspected pork production rises to 522m pounds for the week ending June 22 from 513m in the previous week, according to USDA estimates published on the agency’s website.

• Hog slaughter up 1.6% from a week ago to 2.419m head
• Beef production up 0.7% from a week ago, cattle slaughter rises 0.8%
• For the year, beef production is 1.5% below last year’s level at this time, and pork is 0.9% above

 

El Niño Is Over, Now Watch Out for La Niña

The strongest El Niño in almost a decade is over and meteorologists are now on the alert for a La Niña that could herald a more severe hurricane season. Already the temperature in the eastern Pacific Ocean is below average and it’s likely to continue to cool.

During an El Niño, we get drier weather in the northern US and Canada and rains in the southeastern US, along the Gulf Coast and in South America, coupled with dry conditions in Australia and southeast Asia. Sure enough, Brazil has suffered terrible floods in recent months — and there is flooding right now in Chile. La Niña on the other hand tends to bring cold, wet weather to the US and Canada, dry weather in South America and rain in Australia and southeast Asia. It can often also mean a hurricane season that is bad news for Gulf Coast oil refiners, homeowners and insurers in Florida as well as global reinsurers and investors in Catastrophe bonds.

There’s a 65% chance of La Niña as soon as July-September and an 85% chance we’ll have one in the three months through January, according to NOAA. In the meantime though, the US should have a good planting season this year and the outlook for the soybean harvest is very strong. Agricultural commodities have been falling since late May. Wheat is down 8.6% in the past week, and corn has fallen 4.4%. A return of La Niña would lift palm oil yields and hurt soybean yields.

The end of El Niño is also helping to alleviate the dry conditions that reduced water levels in the Panama Canal that caused restrictions in traffic. Typically the Panama Canal handles 3% of global maritime trade and 46% of containers from northeast Asia to the eastern US. The cost of shipping a 40-foot container to New York from Shanghai is the highest since 2022, but traffic through the canal is starting to pick up, which should ease transport problems.

The chart shows surface temperatures dropping back toward normal. The data comes with a lag, so the most recent figure of 0.7 degrees centigrade above normal is from the three months through May. A level of more than 0.5 degrees is considered El Niño, while more than 0.5 degrees below normal is La Niña.

 

 

 

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