Global Ag News for Nov 16.23

TOP HEADLINES

High water closes parts of Rhine river in south Germany to shipping

Parts of the river Rhine in Germany have been closed to shipping because of a rise in water levels following recent heavy rain, German authorities said on Thursday.

Rhine river shipping has been stopped around Maxau in south Germany, the German inland waterways navigation agency WSA said.

High water means vessels do not have enough space to sail under bridges, preventing vessels reaching Switzerland.

Central and northern sections of the river are open to shipping.

Water levels are forecast to fall, allowing shipping to resume later on Thursday or on Friday, said the water level forecasting service of the Rheinland-Pfalz state government.

The Rhine is an important shipping route for commodities including minerals, coal and oil products such as heating oil, grains and animal feed.

The river has repeatedly suffered from low water levels because of unusually dry summers in recent years.

FUTURES & WEATHER

Wheat prices overnight are down 4 1/2 in SRW, down 2 1/4 in HRW, down 3/4 in HRS; Corn is down 3/4; Soybeans down 8 3/4; Soymeal down $4.60; Soyoil down 0.35.

For the week so far wheat prices are down 13 3/4 in SRW, down 1 in HRW, up 5 1/2 in HRS; Corn is up 11 1/2; Soybeans up 34 3/4; Soymeal up $16.00; Soyoil up 1.55.

For the month to date wheat prices are down 1 3/4 in SRW, up 4 3/4 in HRW, up 18 3/4 in HRS; Corn is down 5 1/4; Soybeans up 65 3/4; Soymeal up $29.40; Soyoil up 1.24.

Year-To-Date nearby futures are down 29.6% in SRW, down 27.8% in HRW, down 21.6% in HRS; Corn is down 30.3%; Soybeans down 9.0%; Soymeal down 2.1%; Soyoil down 17.4%.

Chinese Ag futures (JAN 24) Soybeans up 28 yuan; Soymeal unchanged; Soyoil up 30; Palm oil up 30; Corn up 7 — Malaysian Palm is down 19.  Malaysian palm oil prices overnight were down 19 ringgit (-0.48%) at 3959.

There were changes in registrations (-13 Oats). Registration total: 2,950 SRW Wheat contracts; 594 Oats; 4 Corn; 671 Soybeans; 62 Soyoil; 0 Soymeal; 400 HRW Wheat.

Preliminary changes in futures Open Interest as of November 15 were: SRW Wheat up 923 contracts, HRW Wheat up 1,808, Corn down 1,537, Soybeans up 7,566, Soymeal up 6,495, Soyoil down 6,455.

Brazil: Heavy rain continues over southern areas while central areas have been very dry with temperatures near or above 100 F. The same pattern continues the next few days, which is unfavorable for most areas. Dryness and heat in the Central will continue to overly stress developing soybeans and cause a need for replanting while wetness across the south will cause flooding and associated issues for developing corn and soybeans. The pattern will start to change this weekend as a system in the south shifts into central states. This will cause more typical wet season showers in central Brazil, though they may not be long-lasting. Heavy rain is still forecast to occur at times in the south.

Argentina: Scattered showers will move through the country over the next couple of weeks, bringing decent rainfall to much of the country’s growing areas. The country is still recovering from drought and northwestern growing areas still have larger deficits, but most of the country has seen a positive turnaround in growing conditions in recent weeks.

Australia: Showers will continue sporadically the next few days, with most areas seeing little or none. Wheat and canola harvest should find mostly good conditions. Showers may increase across the East this weekend into next week, which would be helpful for cotton and sorghum planting and early development, but dry soils are still a large concern for these crops.

Northern Plains: Warmer and drier conditions continue for most of the week, favoring the remaining harvest and fieldwork. A system is likely to track to the south this weekend, but could spread precipitation into the region, which may be a wintry mix in some areas. Cooler temperatures will follow it next week.

Central/Southern Plains: Most areas will stay dry even though a cold front will drop into the region later this week. A system is likely to move out of the Southwest and into the region this weekend, which should bring scattered showers to much of the region, helping winter wheat.

Midwest: Warm temperatures and dry conditions should lead to good conditions for the remaining harvest and fieldwork for the next couple of days. A front moving through Friday could bring rain to eastern areas while bringing a brief shot of some cooler air as well. But a system moving through early next week would be more likely to spread precipitation across the region and temperatures are forecast to fall more significantly thereafter.

The player sheet for Nov. 15 had funds: net sellers of 5,000 contracts of SRW wheat, sellers of 4,000 corn, sellers of 2,500 soybeans, sellers of 3,000 soymeal, and  buyers of 1,000 soyoil.

TENDERS

• CORN SALE: The U.S. Department of Agriculture confirmed private sales of 124,000 metric tons of U.S. corn to Japan for shipment in the 2023/24 marketing year.
• WHEAT SALE: An importer group in the Philippines is believed to have bought around 40,000 metric tons of wheat expected to be sourced from Australia in an international tender which closed on Wednesday
• 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.
• FAILED CORN, SOYMEAL TENDERS: Iranian state-owned animal feed importer SLAL is believed to have made no purchases in tenders which closed on Tuesday for 180,000 metric tons of animal feed corn and 120,000 tons of soymeal.

PENDING TENDERS

• MILLING WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is looking to buy a total of 104,677 metric tons of food-quality wheat from the United States, Canada and Australia in a regular tender that will close on Nov. 16.
• Cash basis offers for soymeal were mostly steady to firmer in the U.S. Midwest on Wednesday, supported by tight supplies of the feed ingredient and brisk export demand, dealers said.

TODAY

DOE: US Ethanol Stocks Unchanged at 21M Bbl

According to the US Department of Energy’s weekly petroleum report.

• Analysts were expecting 21.353 mln bbl
• Plant production at 1.047m b/d, compared to survey avg of 1.056m

GRAIN EXPORT SURVEY: Corn, Soy, Wheat Sales Before USDA Report

Estimate ranges are based on a Bloomberg survey of five analysts; the USDA is scheduled to release its export sales report on Thursday for week ending Nov. 9.

• Corn est. range 900k – 1,700k tons, with avg of 1,203k
• Soybean est. range 2,900k – 4,500k tons, with avg of 3,431k

NOPA October US soybean crush hits record 189.774 million bushels

U.S. soybean processors crushed a record amount of soybeans in October, while end-of-month soyoil stocks fell to the lowest in almost nine years, according to National Oilseed Processors Association (NOPA) data released on Wednesday.

NOPA members, which account for around 95% of the U.S. soybean crush, processed 189.774 million bushels of soybeans last month, up 14.7% from the 165.456 million bushels processed in September and up 2.9% from the October 2022 crush of 184.464 million bushels.

It was the largest crush for any month on record, topping the previous all-time high of 186.438 million bushels crushed in December 2021.

Soaring demand for vegetable oil to produce biofuel like renewable diesel has triggered a massive expansion of domestic crushing capacity, with numerous new or upgraded processing plants slated to open over the next several years.

Archer-Daniels-Midland Co and oil major Marathon Petroleum Corp opened a new plant in North Dakota this week capable of processing 150,000 bushels of soybeans a day.

NOPA’s October crush topped the average trade estimate of 187.237 million bushels in a Reuters survey of nine analysts. Estimates ranged from 180.000 million to 193.235 million bushels, with a median of 187.400 million bushels.

Soyoil stocks among NOPA members as of Oct. 31 fell for a sixth straight month to 1.099 billion pounds, below the average trade estimate and the lowest end-of-month oil supply since December 2014.

NOPA members’ oil supplies were down 0.8% from the 1.108 billion pounds on hand at the end of September and down 28.1% from stocks totaling 1.528 at the end of October last year.

Analysts, on average, had expected stocks to rise to 1.188 billion pounds, according to estimates gathered from seven analysts. Estimates ranged from 1.080 billion to 1.300 billion pounds, with a median of 1.189 billion pounds.

First crop sowing delays and second crop cycle disruptions lower Brazil corn production – Refinitiv Commodities Research

2023/24 BRAZIL CORN PRODUCTION: 121.3 [110.8–131.2] MILLION TONS, DOWN 3% FROM LAST UPDATE

2023/24 Brazil corn production is decreased by 3% to 121.3 [110.8–131.2] million tons, reflecting adverse impacts from excessive moisture in key first crop areas of the Southeast/South, and potential second crop cycle disruptions caused by the current delays in soybean crop progress throughout the Central-West amid hot and dry weather. Our current median estimate is 7.7 million tons below the USDA’s World Agricultural Outlook Board (WAOB)’s 129 million tons, which assumes total corn sowings at 22.9 million hectares and national level yield of 5.63 tons per hectare (tph) (vs. Refinitiv Ag Research’s 21.6 million hectares and 5.61 tph, respectively). Brazil’s agriculture state agency (CONAB) has lately pegged corn production and area at 119.1 million tons and 21.1 million hectares, respectively.

As weather continues mixed across the major corn producing areas, the past two weeks featured once again overall below average (10-50 mm) rainfall in Mato Grosso and Mato Grosso do Sul (i.e. the two key second corn and soybean crop regions), while great surpluses (80-180 mm) were received predominantly in Paraná, Santa Catarina, and Rio Grande do Sul (i.e. the top three first corn producers). Temperatures were 3-6 °C warmer than normal in the majority of the Central-West and Southeast, while the South remained near to slightly below normal. The current soil moisture levels are hovering around 6-year lows in the Central-West (where more than half of second corn is grown), while they are at least 6-year highs in the South (where many key first corn areas reside). Such an extreme contrast in weather conditions for an extended period of time during the crucial prime planting season is already undermining the overall yield potential, as this unfavorable uneven weather pattern is likely to continue at least through the end of the month. As of 11 November, Brazil’s first corn is 45.8% planted nationally according to the latest CONAB crop progress report (13 November), behind last year’s pace of 53.9% and the 4-year average of 56%. Soybean sowing delays are even more severe, with only 57.6% of the crop planted so far, behand last year’s 66% and the 70% four-year average, warranting close attention. Critically, further delays in soy crop progress could leave a significant portion of the second safrinha corn crop to be sown outside the ideal window (hence lowering yield) as the safrinha crop is planted after soybeans are harvested. The second corn accounts for more than 75% of Brazil’s total corn production. Flooding risks and excessive moisture concerns in key  first corn areas in the South are another item to watch moving forward.

Ukraine Starts Repairs on Railway Taking Cargoes to Odesa Ports

Ukrainian railroad operator Ukrzaliznytsia started repair works that “complicates cargo train movement” toward three ports on the Black Sea near Odesa, according to Valeriy Tkachov, deputy director of the commercial department at the company.

• “The situation is under control,” Tkachov said on Facebook, without providing an estimate for how long the works will last
• The number of cargo wagons moving toward Odesa ports rose 6.6% to 5,192 wagons during the week that ended Nov. 13, he said
• NOTE: Ukraine is exporting grain and other products from three ports near Odesa, along the corridor it created after Russia pulled out from an export deal brokered by the UN and Turkey

China’s Soybean Output Expected to Rise to Record: Radio

Nation’s soybean planting area expected to have risen by 2 million mu (133k ha) with output potentially hitting a new high this year, China National Radio reports, citing Agriculture Minister Tang Renjian.

• In 2022, China’s soybean planting area rose to 154 million mu, highest since 1958, with total output topping 20m tons for first time
• Nation to further expand soybean area next year with producer subsidies and insurance policies as incentives for farmers to hike output

Russia Grain Harvest Volumes Are 8% Below Last Year: IFX

Farmers in Russia had collected 140.6m tons of grain as of Nov. 1, 7.7% less than the same date last year, Interfax reported, citing Federal Statistics Service Rosstat.

• Grain crops harvested from 94% of sown area, roughly the same as last year
• 14.5m tons of sunflower were harvested, 28% more than last year
  • 79% of sunflower acreage has been harvested, compared with 63% last year
• Figures are in initially registered weight and exclude regions of Ukraine occupied by Moscow’s forces, Interfax reported

Argentina’s core farmland sees above average rainfall, more likely

Argentina’s agricultural core saw much higher than average rainfall during the first half of November and will likely see even more moisture in the coming days in a welcome boost for the sector, the Rosario grains exchange (BCR) said on Wednesday.

The rains coincide with the weather phenomena known as El Niño, which for Argentina means higher levels of precipitation over key farmland following a dry Southern Hemisphere winter.

Argentina is a major global grains exporter, especially for processed soybeans, corn and wheat.

“We’re beating the accumulated historical levels for November by a big margin,” said Cristian Russo, the BCR’s chief forecaster, in the report.

The stock exchange noted that since Tuesday the core area’s northwestern farmland got 15-40 millimeters (0.6-1.6 inches) of rain, with “significant and more generalized” precipitation expected, which should boost farm production.

Not only is Argentina’s grains output a key pillar of economic activity in the South American country, but it also represents a much-needed source of U.S. dollars for the cash-strapped central bank needed to finance exports and pay down debt.

In a separate weekly report issued Wednesday from the Buenos Aires Grains Exchange (BdeC), over the next week Buenos Aires province will likely see 10-50 millimeters (0.4-2.0 inches) of rain.

Other parts of Argentina’s fertile Pampas region are seen receiving more moderate moisture of up to 10 millimeters (0.4 inches), according to BdeC.

Recent rainfall over the last few weeks have provided a welcome boost to the start of soybean planting for the 2023/2024 harvesting season, while also helping areas planted with corn for the same cycle, though most corn plantings have yet to be sown.

BCR estimates that the 2023/2024 soybean crop will likely yield 50 million metric tones and the corn crop another 56 million tons.

Graincorp Says Australian Crop Yields Strong as Harvest Builds

• CEO says farmers in NSW are ‘pretty positive’ about conditions
• Nation faced extremely dry conditions in September, October

Australian farmers are seeing strong grain yields after the start of the harvest of winter crops, according to the head of Graincorp Ltd., following some concerns over the impact of hotter and drier conditions.

The gathering of grains including wheat and barley is running about two weeks ahead of last year, Robert Spurway, the chief executive officer of east coast crop handler Graincorp, said in an interview. The company reported a decline in full year net income on Thursday, meeting analyst expectations.

“I was traveling in central New South Wales last week and the growers I spoke to seemed pretty positive about the conditions they were facing and the strength of the yields they were seeing,” he said. NSW is the second-biggest crop producing state, while Western Australia is the largest.

Australia’s government forecaster expects the nation’s wheat crop to be more than a third lower than last year, which was a record harvest, because of dry conditions and below-average rainfall. The country was baked over September and October, and is facing warmer weather into next year due to El Niño.

Grain yields are likely be higher than official estimates, according to Ole Houe, CEO at broker and adviser IKON Commodities, who added that the crop size could be better-than-expected. The Australian government forecast wheat output of 25.4 million tons in its last report released in September.

Wheat is a major winter crop in Australia with planting typically from April and the harvest starting in November. China recently has been the biggest buyer of the nation’s grain, while Indonesia and Vietnam have also been key markets.

Russian Grain Trader Demetra to Buy Ships for Its Own Fleet: IFX

Russian wheat exporter Demetra plans to buy about 10-15 vessels, Interfax cited CEO Alexey Gribanov as saying at a conference in Moscow on Tuesday.

• Demetra plans to form its own fleet, Interfax cited Gribanov as saying; this concerns ships under the Russian flag in the Caspian sea and in the Sea of Azov
• Says Demetra wants to ship 12m tons of grain this season
• Demetra’s assets include the Novorossiysk grain terminal and a 50% stake in Taman grain terminal complex: IFX
• The company also has an almost 50% stake in trader OZK and owns railway operator Rusagrotrans

Floods Threaten French Wheat, Barley Harvests in 2024: AgriMer

Floods and heavy rains threaten to impact 2024 soft wheat and winter barley harvests in northern France, said Benoit Pietrement, chairman of FranceAgriMer.

• “The water is not going away, sowing will not be possible, not right away, it will even take weeks for the soil humidity level to drop, very difficult for these autumn crops,” he said in a virtual press conference with the media
  • “We are very worried”
• French President Emmanuel Macron and other top officials are visiting the areas affected by continued rains since the middle of October in the north, and there will be more detailed surveys necessary to “trigger aid actions,” said Pietrement
• France has witnessed the highest ever level of rains over 26 consecutive days, with an average 215,4 mm from Oct. 18 until Nov. 12, according to weather service Meteo France

Delayed Purchases for Corn Pressure Prices in Brazil Urea Market

Urea prices in Brazil have fallen more than $30 a metric ton since India’s latest tender results in late October. Domestic demand for corn safrinha is delayed amid compromised affordability and production risks for farmers, while urea imports are down 4% year over year.

Nitrogen Down; Phosphates Steady

Urea prices in Brazil fell 4.7% to $350-$365 a metric ton on a cost-and-freight basis from last week’s $365-$380. Ammonium sulfate pricing was also lower, at $175-$195 a ton for the latest offers, down 5.1% from the prior week’s $185-$205. Monoammonium phosphate (MAP) prices remained stable at $560-$565 a ton, while potash in Brazil was unchanged as well at $320-$345, with Belarusian tons reflecting the bottom of the range.

China Limits Fertilizer Exports; Trade Thins After India Tender

The global nitrogen market was flat to weak after India’s latest urea tender secured 1.7 million metric tons, likely keeping it out of the market until late December or January. China is back in focus, with the government indicating exports from the nitrogen and phosphate swing supplier will be halted, a policy we believe could extend through 2Q.

Urea, Phosphates Pressured in Wednesday Whisper

Urea prices remained pressured in the US, with New Orleans (NOLA) barges falling to $330 a short ton for confirmed December business and bids/offers slipping to $324-$328 a ton FOB, down from last week’s $340-$350 range for November-December trades. With autumn application in high gear across the Midwest, phosphate prices started to slide at some inland locations. The latest monoammonium phosphate (MAP) prices in the Northeast slipped to $705 a ton from $725, while potash remained firm to higher in the Corn Belt, with the Cincinnati market quoted solidly at the $415 level at midweek.

 

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