Global Ag News for Nov 10.23
French Wheat Vessel Bound for New York After Small US Harvest
A ship carrying more than 35,000 metric tons of French wheat is headed to New York as US imports of the grain surge following a shortfall in the domestic harvest.
The vessel Amis Dolphin was destined for Albany, New York, where Ardent Mills has a facility along the Hudson River than can produce 2.4 million pounds of flour daily. The vessel sailed from the French port of Rouen with Viterra as the shipper, according to a ship lineup seen by Bloomberg.
Ardent Mills didn’t immediately reply to requests for comment Thursday.
The company earlier this year brought in rare wheat cargoes from Poland to its flour factory in Florida. That’s after drought hit wheat yields in the US breadbasket. Meanwhile, the US Department of Agriculture in a monthly report Thursday hiked its estimate for US wheat imports to 145 million bushels, or 3.95 million tons — the most in six years.
While more imports are arriving in the US, weekly exports of wheat recently hit the lowest levels ever.
FUTURES & WEATHER
Wheat prices overnight are down 2 1/2 in SRW, down 2 1/4 in HRW, down 3 3/4 in HRS; Corn is up 1/2; Soybeans down 3 1/2; Soymeal down $2.50; Soyoil up 0.13.
For the week so far wheat prices are up 5 3/4 in SRW, up 1 1/2 in HRW, up 9 3/4 in HRS; Corn is down 8 3/4; Soybeans down 11 3/4; Soymeal up $1.50; Soyoil up 1.22.
For the month to date wheat prices are up 22 in SRW, up 15 3/4 in HRW, up 21 1/2 in HRS; Corn is down 10 1/2; Soybeans up 29 1/2; Soymeal up $15.70; Soyoil down 0.95.
Year-To-Date nearby futures are down 27.0% in SRW, down 27.4% in HRW, down 22.2% in HRS; Corn is down 31.0%; Soybeans down 12.7%; Soymeal down 6.3%; Soyoil down 20.7%.
Chinese Ag futures (JAN 24) Soybeans down 22 yuan; Soymeal down 60; Soyoil down 10; Palm oil up 50; Corn down 22 — Malaysian Palm is up 60. Malaysian palm oil prices overnight were up 60 ringgit (+1.60%) at 3803.
There were changes in registrations (-3 Soybeans). Registration total: 2,950 SRW Wheat contracts; 607 Oats; 4 Corn; 704 Soybeans; 62 Soyoil; 0 Soymeal; 400 HRW Wheat.
Preliminary changes in futures Open Interest as of November 9 were: SRW Wheat down 9,048 contracts, HRW Wheat down 3,332, Corn up 7,030, Soybeans down 1,205, Soymeal up 2,017, Soyoil up 2,043.
Brazil: Heavy rain is moving back into southern areas again after a short dry stretch, which will exacerbate flooding and wetness issues for the remaining wheat harvest as well as corn and soybean planting and development. Central areas are drier. Occasional showers through next week will be well below-normal in coverage and intensity, with yet more concerns for the soybean crop where planting is slow. Dryness is also necessitating replanting in some areas that have been missed by recent rain as well. This may lead to issues with the safrinha crop in early 2024.
Argentina: A system brought showers earlier this week, while another system will move through Friday through the weekend and more systems are lining up for next week as well. Rainfall should be beneficial for most areas as the weather situation continues to take a positive turn for corn and soybeans. The more active pattern may slow down maturing and harvest of winter wheat, however.
Northern Plains: Light mixed precipitation will continue to bring difficulties in accomplishing the remaining fieldwork over the next few days. Warmer and drier conditions are expected for the weekend and most of next week, which should create more favorable conditions.
Central/Southern Plains: A front moved through the northern half of the region Wednesday but was dry. A disturbance developing along it Thursday will bring showers to southern areas which should be helpful for winter wheat where they hit. There is a chance that showers redevelop over Texas early next week, but will be more likely later next week or weekend. Temperatures will briefly fall after the front goes through, but rise well above normal again next week, making moisture important for root development before wheat goes dormant for winter.
Midwest: Heavy mixed precipitation went through Michigan and nearby areas on Wednesday, which will keep fieldwork slow. A few cooler days are on tap but temperatures will be rising this weekend and be well-above normal next week while precipitation will largely be absent. A system may bring showers later next week, but will probably hold off until the weekend, providing a window for those with fieldwork yet to do.
The player sheet for Nov. 9 had funds: net sellers of 5,000 contracts of SRW wheat, sellers of 6,000 corn, sellers of 8,500 soybeans, sellers of 500 soymeal, and buyers of 500 soyoil.
- SOYBEAN SALES: The U.S. Department of Agriculture (USDA) confirmed private sales of 1,044,000 metric tons of U.S. soybeans to China and 662,500 tons to undisclosed destinations for shipment in the 2023/24 marketing year.
- SOYMEAL SALE: South Korea’s Major Feedmill Group (MFG) purchased an estimated 60,000 metric tons of soymeal in a deal on Thursday.
- MILLING WHEAT SALE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 108,890 metric tons of food-quality wheat from the United States, Canada and Australia, in a regular tender that closed on Thursday.
- RICE SALE: South Korea’s state-backed Agro-Fisheries & Food Trade Corp has so far purchased an estimated 97,060 metric tons of U.S. origin rice in an international tender for up to 177,000 tons which closed on Nov. 2.
- MILLING 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.
- FEED WHEAT, BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said that it will seek 60,000 metric tons of feed wheat and 20,000 tons of feed barley, to be loaded by Jan. 31 and arrive in Japan by Feb. 29, via a simultaneous buy and sell auction that will be held on Nov. 15.
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 Nov. 2, according to data on the USDA’s website.
- Top buyer of soybeans: China with 692k tons
- Top buyer of corn: Mexico with 525k tons
- Top buyer of wheat: South Korea with 140k tons
- Biggest cancellation: 452k tons of soybeans from Unknown Buyers
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 Nov. 2, according to data on the USDA’s website.
- China bought 13.1k tons of the 51.4k tons of pork sold in the week
- South Korea led in beef purchases
Argentine Soy, Corn, Wheat Estimates Nov. 9: Exchange
The Buenos Aires Grain Exchange releases weekly report on website.
- 2023-24 corn and soybean crop area estimates unchanged from the previous week
- 2023-24 soybean crop is 6.1% planted
Malaysia October palm oil inventories at four-year high
Malaysia’s palm oil stockpiles stood at a four-year high at the end of October despite more-than-expected exports, data from the Malaysian Palm Oil Board (MPOB) showed on Friday.
Inventories rose 5.84% from September to 2.45 million metric tons, the sixth consecutive month of increases at the world’s second-largest palm oil producer. The last time inventories jumped to this level was in September 2019.
Crude palm oil production climbed 5.89% to 1.94 million tons in October, while palm oil exports increased to 1.47 million tons, the data showed.
A Reuters survey had forecast inventories at 2.56 million, or growth of 10.82% on the month, and saw production at 1.88 million tons and exports at 1.29 million tons.
Stockpiles are expected to peak with end-October inventories, as production could decline in November due to seasonal rains hampering harvests, a Kuala Lumpur-based trader said.
“From November, end stocks may start to decline, and this could hold crude palm oil prices from dropping below 3,500 ringgit levels,” the trader said.
Palm oil demand is showing a notable improvement of between 100,000 to 170,000 tons compared to prior forecasts, Marcello Cultrera of Singapore-based Apricus said.
“This demand is supported by periodic improvements in crude palm oil import parities and destinations import margins, inline with increased domestic consumption.”
Ukraine raises grain deliveries to Black Sea ports – railways
The number of rail wagons heading to the ports of Ukraine’s Odesa region continued to rise over the past week thanks to the successful operation of the alternative Black Sea exports corridor, a senior railways official said late on Thursday.
Valeriy Tkachov, deputy director of the commercial department at Ukrainian Railways, said on Facebook that over the last week the number of grain wagons heading to Odesa ports increased by more than 26% to 5,341 from 4,227.
He said up to 970 wagons were unloaded at the ports’ silos every day.
A week earlier the number of wagons jumped by around 50%.
In August, Ukraine launched a “humanitarian corridor” for ships bound for African and Asian markets to try to circumvent a de facto blockade in the Black Sea after Russia quit a deal that had guaranteed Kyiv’s seaborne exports during the war.
Later, a senior agricultural official said the route – which runs along Ukraine’s southwest Black Sea coast, into Romanian territorial waters and onwards to Turkey – would also be used for grain shipments.
Deputy Prime Minister Oleksandr Kubrakov said on Thursday 91 vessels had exported 3.3 million metric tons of agricultural and metal products since the corridor started operating in August.
The UCAB agricultural business association said this month that Ukrainian grain agricultural exports rose by 15% to 4.8 million metric tons in October thanks to the new corridor.
Ukraine’s government expects a grain and oilseeds harvest of 79 million tons in 2023, with a 2023/24 exportable surplus of about 50 million tons.
Palm Oil Production in Colombia Poised to Climb for Fifth Year
- Country has a ‘very large potential’ to boost planted area
- Only tiny portion of oil palm land linked to deforestation
Palm oil output in Colombia, the top supplier outside of Asia, is set to rise for a fifth straight year to 2 million tons in 2024, provided there are no major weather disruptions, the country’s largest industry group said.
“The only caveat will be El Niño,” said Nicolás Pérez Marulanda, executive president of the National Federation of Oil Palm Growers known as Fedepalma. The event, seen peaking in November-January, brings lower-than-normal rain to some key palm-growing areas in the country, he said. Any significant reduction will curb output, with the impact on trees even seen two years later.
Production is likely to be about 1.9 million tons this year, from 1.77 million tons in 2022, Pérez said in an interview in Kuala Lumpur. Colombia is the fourth-largest producer, though it accounts for just 2.5% of global output, a contrast to powerhouses Indonesia and Malaysia, which supply more than 80%.
Still, the country has a “very large potential” to boost planted area of about 580,000 hectares, Pérez said, as the government has identified some 5 million hectares of land with high suitability for growing the crop without the need for deforestation. Expansion of that size would put it on a par with second-biggest grower Malaysia, which currently has 5.67 million hectares of planted area.
Increasing plantations without destroying rainforest is crucial for the ubiquitous oil, which has been hurt by allegations ranging from deforestation to open burning and forced labor. It’s a key element for new European Union rules that require proof that crops weren’t grown on deforested land. The bloc takes about half of Colombian palm exports, and uses it mostly for food products.
Less than 0.5% of land dedicated to palm in Colombia has been associated with deforestation, compared with much higher rates in Southeast Asia, Pérez said. That helps differentiate Colombian oil and give it an edge over other suppliers.
Colombia consumes 75% of its palm oil locally, with some 700,000 tons used for its B10 biodiesel mandate in the transport sector and the rest for products such as foods, personal care, household products and animal feedstock.
French Wheat, Barley Plantings Continue to Trail 2022: AgriMer
Some 67% of soft-wheat and 81% of winter-barley crops in France were planted as of Nov. 6, both holding behind last year’s pace and the five-year average, according to weekly data from FranceAgriMer.
Corn harvesting is nearly done
The share of winter-barley in good to very good condition fell to 91% versus 97% a week earlier
CPO FUTURES TO FLUCTUATE RM3,600-RM3,900 NEXT THREE MONTHS
Crude palm oil futures contract on Bursa Malaysia Derivatives (BMD) will fluctuate between RM3,600 and RM3,900 per tonne for the next three months and may rise to RM4,200 by March 2024 due to the tightening stock situation, particularly in Malaysia.
Indian Vegetable Oil Producers Association (IVPA) president Sudhakar Desai has forecast Malaysia’s palm oil production to rise to 18.85 million tonnes from last year’s 18.61 million tonnes, marking an increase of 240,000 tonnes, where as Indonesia’s production is expected to remain steady at 49.26 million tonnes.
“While Malaysia will witness a stock build-up of approximately 2.7 million tonnes, the market is anticipated to transition to tighter end stocks by April or May 2024,” he said at the Malaysian Palm Oil Board (MPOB) International Palm Oil Congress and Exhibition (PIPOC 2023) yesterday.
On another note, Desai also highlighted the huge surge in Indian vegetable oil imports reaching a record-breaking 16.9 million tonnes during the 2022/2023 oil year.
“This remarkable increase after two years of de-growth was attributed to the attractive low prices, which not only triggered substantial stock build-up in the pipeline but also stimulated a big bounce back in consumption.
“A normal consumption growth (is) to resume for the 2023/2024 oil year, at about 2.8 per cent with the total consumption reaching 25.20 million tonne,” he said.
Desai added that Indian imports are expected to be about 16.20 million for the oil year 2023/2024 and of this total, palm oil imports would reach nine million tonnes, while soft oil imports are projected to be around 7.12 million tonnes.
El Nino conditions to continue through Northern Hemisphere spring 2024 – US forecaster
El Nino weather conditions will continue through the Northern Hemisphere during April-June 2024 with a 62% chance, a U.S. government weather forecaster said on Thursday.
Interested in more futures markets? Explore our Market Dashboards here.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.