Global Ag News for Nov 22.23

TOP HEADLINES

Argentina farmers stall soy sales with eye on newly-elected Milei, traders say

Argentine grains traders said on Tuesday that the country’s farmers were holding back soy sales and would likely keep doing so ahead of the mid-December inauguration of President-elect Javier Milei, who has pledged to cut taxes and weaken the peso.

The South American country is normally the world’s top exporter of processed soy and in the top three for corn, though its most recent harvest was battered by the worst drought in decades, already leaving a domestic shortage of supply.

Milei, a libertarian economist who wants to dollarize the economy, eliminate the central bank and dramatically reduce the role of the state, was elected president on Sunday, defeating Peronist economy chief Sergio Massa.

He has said he will eliminate the current tax on grains and meat exports, something farmers have long asked for, and rapidly undo capital controls that keep the exchange rate artificially strong, a move which would lead to a sharp peso devaluation.

There does, however, remain uncertainty about how and when Milei will be able to implement his plans.

“We’re likely to go through a cycle where producers show great caution when making decisions,” Ariel Tejera, head of the market analysis department at grain brokerage Grassi SA, in the farming city of Rosario, told Reuters.

“We will probably continue like this until the new government implements its plans,” said Grassi, who explained that unknowns regarding the exchange rate were key.

The official exchange rate is now at 356 pesos per dollar, while in parallel markets dollars trade at over 1,000 pesos. That hurts grains exporters who have to bring most of their overseas sales back to Argentina at the official rate.

“The prospect of devaluation and hopes for tax cuts are in play,” said Guillermo Moulia, an independent grain trader from Rosario. “Things aren’t moving too much now as producers prefer to hold onto their grains.”

On Tuesday, the government temporarily extended an exchange rate benefit for exporters, giving them a better rate than the official one, though only on half their sales.

However, the head of investigations for the Rosario grains broker Enrique Zeni & CIA, Eugenio Irazuegui, said that the official measure was not having much effect.

“So far, purchase offers from factories and exports are very limited,” he said. “It is likely that, only with a reduction in the exchange gap and less (or no) intervention in the markets, sales will come back to normal levels for the time of year.”

FUTURES & WEATHER

Wheat prices overnight are up 4 3/4 in SRW, up 3 3/4 in HRW, up 1 1/2 in HRS; Corn is down 3/4; Soybeans down 11 1/2; Soymeal down $2.90; Soyoil down 0.27.

For the week so far wheat prices are up 11 3/4 in SRW, up 1 3/4 in HRW, up 3 in HRS; Corn is up 3; Soybeans up 25 3/4; Soymeal up $2.70; Soyoil up 1.95.

For the month to date wheat prices are up 2 1/4 in SRW, down 12 in HRW, up 6 1/4 in HRS; Corn is down 4 3/4; Soybeans up 55 1/4; Soymeal up $21.10; Soyoil up 2.33.

Year-To-Date nearby futures are down 29.4% in SRW, down 30.2% in HRW, down 23.6% in HRS; Corn is down 30.8%; Soybeans down 10.1%; Soymeal down 4.4%; Soyoil down 15.2%.

Chinese Ag futures (JAN 24) Soybeans down 16 yuan; Soymeal up 17; Soyoil down 30; Palm oil down 4; Corn down 25 — Malaysian Palm is up 39. Malaysian palm oil prices overnight were up 39 ringgit (+0.99%) at 3992.

There were changes in registrations (-26 Oats). Registration total: 2,950 SRW Wheat contracts; 522 Oats; 4 Corn; 596 Soybeans; 62 Soyoil; 0 Soymeal; 400 HRW Wheat.

Preliminary changes in futures Open Interest as of November 21 were: SRW Wheat up 2,634 contracts, HRW Wheat down 1,578, Corn down 7,798, Soybeans up 4,962, Soymeal down 510, Soyoil down 816.

Brazil: Heavy rain, more typical of the wet season showers in central Brazil, will continue all week long. Deficits are large here and will take more than a week’s worth of normal rainfall to turn around, but will be beneficial for developing soybeans. Showers do look to become more isolated for next week. Another round of heavier rain will move back into southern Brazil for Wednesday and Thursday, with potential for more this weekend. Any breaks from the wet pattern are looking to be short across the south, unfavorable for developing corn and soybeans.

Argentina: A front will move through Tuesday and Wednesday with scattered showers but then be drier again until next week. Though the dryness is not welcome, soil conditions are more favorable than they were earlier season or in previous years, a good turn around in conditions. As long as the drier weather does not last too long, the overall favorable conditions continue. Rain is forecast to move back through early-to-mid next week.

Northern Plains: A cold front will sag south through the region on Wednesday, bringing snow to western areas and a sharp drop in temperatures below normal. A reinforcing shot of colder air is possible this weekend into next week.

Central/Southern Plains: A system brought scattered showers to mostly eastern sections of the region over the last few days. Those showers largely missed drier western wheat areas, unfavorable for wheat there. Another system may bring showers to Texas Thursday and a cold front dropping south could bring highland snow and a burst of much colder air into the weekend. A system may form along that front and push eastward over the weekend. Drier areas in the southwest may pick up some precipitation out of this, mostly in the form of snow, but otherwise helpful.

Midwest: A system continues to bring widespread rain through the region on Tuesday, easing drought in some areas, but delaying the remaining harvest and fieldwork. A stronger cold front will move through later this week with a burst of colder air. More showers may move through this weekend but are forecast to be light.

The player sheet for Nov. 21 had funds: net buyers of 5,000 contracts of SRW wheat, buyers of 500 corn, buyers of 2,500 soybeans, sellers of 2,000 soymeal, and  buyers of 2,500 soyoil.

TENDERS

• CORN PURCHASE: South Korea’s Major Feedmill Group (MFG) purchased an estimated 68,000 metric tons of animal feed corn in a private deal without issuing an international tender
• SOYMEAL PURCHASE: The Korea Feed Association (KFA) purchased around 68,000 metric tons of soymeal in a deal on Tuesday
• WHEAT PURCHASE: Jordan’s state grains buyer purchased about 60,000 metric tons of hard milling wheat to be sourced from optional origins in an international tender on Tuesday seeking up to 120,000 tons
• WHEAT PURCHASE: Taiwan’s MFIG purchasing group bought about 65,000 metric tons of animal feed corn expected to be sourced from the United States in an international tender on Wednesday
• WHEAT TENDER PASSED: A group of South Korean flour mills is believed to have rejected all offers and made no purchase in a tender on Tuesday to buy 51,200 metric tons of wheat sourced from Australia
• WHEAT TENDER UPDATE: Algeria’s state grains agency OAIC started buying milling wheat in an international tender which closed on Tuesday
• FEED BARLEY PURCHASE: Algerian state agency OAIC is believed to have purchased animal feed barley in an international tender which closed on Tuesday
• WHEAT AND BARLEY TENDER: Tunisia’s state grains agency issued an international tender to purchase about 100,000 metric tons of soft milling wheat and around 75,000 tons of animal feed barley.
• BARLEY TENDER: Jordan’s state grains buyer has issued a new international tender to purchase up to 120,000 metric tons of animal feed barley
• CORN TENDER: Leading South Korean feedmaker Nonghyup Feed Inc. (NOFI) has issued an international tender to purchase up to 138,000 metric tons of animal feed corn to be sourced from optional origins

PENDING TENDERS

• CORN, SOYMEAL TENDERS: Iranian state-owned animal feed importer SLAL issued international tenders to purchase up to 180,000 metric tons of animal feed corn and 120,000 tons of soymeal
• SUGAR TENDER: Egypt’s General Authority for Supply Commodities announced a tender to import 50,000 tonnes of raw sugar and/or 50,000 tonnes of refined white sugar, all from any origin, on behalf of the Egyptian Sugar & Integrated Industries Company. The deadline for offers is Nov. 25.
• NON-GMO SOYBEAN TENDERS: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued international tenders to purchase around 50,000 metric tons of food-quality soybeans free of genetically-modified organisms (GMOs)

TODAY

ETHANOL: US Weekly Production Survey Before EIA Report

Output and stockpile projections for the week ending Nov. 17 are based on six analyst estimates compiled by Bloomberg.

• Production seen higher than last week at 1.053m b/d
• Stockpile avg est. 21.104m bbl vs 20.954m a week ago

Brazil Soy Exports Seen Reaching 4.996 Million Tns In November Versus 5.106 Million Tns Forecast In Previous Week – Anec

• BRAZIL SOY EXPORTS SEEN REACHING 4.996 MILLION TNS IN NOVEMBER VERSUS 5.106 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC
• BRAZIL SOYMEAL EXPORTS SEEN REACHING 2.217 MILLION TNS IN NOVEMBER VERSUS 2.406 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC
• BRAZIL CORN EXPORTS SEEN REACHING 7.958 MILLION TNS IN NOVEMBER VERSUS 8.323 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC

EU Soft-Wheat Exports Fall 19% Y/y in Season Through Nov. 19

The European Union’s soft-wheat exports in the season that began July 1 fell to 11.6m tons as of Nov. 19, compared with 14.3m tons in a similar period a year earlier, the European Commission said on its website.

• Leading destinations include Morocco, at 1.8m tons; Nigeria, 1.24m tons; and Algeria, with 937k tons
• Barley exports are at 2.75m tons, down 1% y/y
• Corn imports are at 6.56m tons, down 44% y/y
• NOTE: The report hasn’t included export data for Bulgaria since mid-September; Italy import and export figures for past two weeks are also incomplete

Ukraine could fail to meet future wheat demand if attacks continue, UN agency warns

The United Nations World Food Programme (WFP) warned on Tuesday that Ukraine’s wheat production may be unable to meet domestic and export demand in the years to come if Black Sea export routes remain blocked and attacks on food infrastructure continue.

WFP’s Ukraine director, Matthew Hollingworth, said a forthcoming report by the U.N. Human Rights Office (OHCHR) would show that since mid-July there have been 31 documented attacks on Ukraine’s grain production and export facilities.

He told the U.N. Security Council that “28 of these attacks were in Odesa oblast alone, which is home of the vital Black Sea and Danube River terminals essential for global trade.”

“If attacks on food infrastructure and the blockage of sea export routes continue, it will dramatically impact the agricultural production outlook over years to come, and may, in a worst-case scenario, lead to wheat production being unable to meet domestic and export demand,” Hollingworth said.

Russia’s U.N. Ambassador Vassily Nebenzia told the Security Council on Tuesday that Moscow targets military infrastructure, not civilian infrastructure.

The United Nations has blamed Russia’s February 2022 invasion of Ukraine for worsening a global food crisis. Ukraine and Russia are both major grain exporters. Russia also is a big supplier of fertilizer to the world.

Russia’s agriculture minister said last week that Moscow had begun free grain shipments totaling up to 200,000 tonnes to six African states, as promised by President Vladimir Putin in July.

Hollingworth said that before the war Ukraine made up 9% of global wheat exports, 15% of maize and 44% of sunflower oil.

U.N. officials are trying to revive the Black Sea grain deal, which Russia quit in July – a year after it was brokered by the United Nations and Turkey – complaining that its own food and fertilizer exports faced obstacles and that not enough Ukrainian grain was going to countries in need.

U.N. Secretary-General Antonio Guterres told Reuters earlier this month that it will be difficult to revive the Black Sea deal, under which nearly 33 million metric tons of Ukraine grain were exported.

Ukraine launched what it calls a temporary export corridor in August to allow agricultural exports as an alternative arrangement. More than 700,000 metric tons of grain have left Ukrainian ports via the new route.

Ukraine Says Slovak Truckers Are Blocking One Border Crossing

Members of Slovak truckers association began to block cargo traffic at Vysne Nemecke border crossing near Uzhgorod, Ukrainian State Border Guard Service says on website.

• Nearly 300 trucks have formed a line on the Slovak side of the border crossing
• Movement of personal vehicles and passenger buses is not obstructed

Poor weather raises alarm for Brazil’s soybean crop but record harvest still expected, says ADM exec

Adverse weather in Brazil has raised alarms for its 2023/2024 soybean crop, but a record harvest is still expected, an executive at grain trader and processor Archer-Daniels-Midland Co said on Tuesday.

“It really is a moment of alert,” said Luciano Souza, ADM’s Grains director for South America, in an interview. “The rains have come later and have been occurring irregularly.”

After ten days of high temperatures, much-expected rains in the central-north part of the country last weekend “didn’t come with the necessary depth or intensity,” said the executive.

“We look at the climate models, and the scenario persists: We will continue to receive a lot of rain in the south… and we have irregular rainfall in other regions,” he said.

The rainfall, or lack thereof, has delayed soy planting throughout Brazil.

Souza said the scenario is worrying, but a record harvest is still expected.

“Of course, we have to monitor developments over the next few days and weeks,” he cautioned.

While yields may fall, the planted area is set to increase in the 2023/24 harvest, Souza said, highlighting a particularly large harvest in Rio Grande do Sul state.

ADM will announce a detailed harvest forecast in coming weeks.

On Tuesday, the company also announced the launch of a program to support regenerative agriculture practices in the country.

The program will start by providing guidance and funding to grain producers farming on some 20,000 hectares of land in the states of Mato Grosso do Sul and Minas Gerais.

India Group Seeks Wider Tax Gap Between Refined, Crude Palm Oils

A group of Indian edible oil processors has asked the government to widen the import duty difference between refined and crude palm oils to 15% from 7.5% to help refiners increase utilization of their existing units.

• The low duty difference is a boon for Indonesian and Malaysian refiners, according to the Solvent Extractors Association of India
• The government should also increase import duties on edible oils, and scrap restrictions on futures trading: SEA
• NOTE: India’s October Palm Oil Imports Fall 17% from a Month Ago

Indonesia Should Limit Palm Oil Mix in Biofuels to 40%: GAPKI

The 40% limit is needed to ensure enough supplies for export and local markets, said Fadhil Hasan, head of foreign affairs at the Indonesian Palm Oil Association, also known as GAPKI.

• A cap is necessary for sufficient availability of the tropical oil even when production stagnates or declines in top growers, Hasan said at an industry conference in Jakarta on Wednesday
• Any move to boost the palm oil mix to 50% or more in biodiesel will be a problem for Indonesian exports
  • It may also create difficulties for developing countries, such as Pakistan and Bangladesh that rely on palm oil for their cooking oil needs
• The current moratorium on the issuance of permits to convert forest land for plantations has curbed expansion and slowed down production growth in Indonesia
• Accelerating the rate of replanting by smallholders will be one of the key measures to increase output; the current program has not met the target

Paraguay’s corn export volumes, earnings down in 10M 2023

The Central Bank of Paraguay (BCP) said in a report published on November 16 that the country had exported around 2.8mn tonnes of corn in the first 10 months of 2023, down from 3.2316mn tonnes in the same period of last year.

The report, which was cited by Mercopress, noted that export earnings from corn had amounted to $573.6mn in the January-October period of this year. In the same period of 2022, by contrast, corn exports generated $769.2mn.

The BCP report attributed the drop in export volumes and revenues to lower production and a drop in international corn prices.

In related news, Paraguay’s Agriculture and Livestock Minister Carlos Gimenez said on November 16 that the country was on track to resume exports of beef to the US market in mid-December.

“As of December 15, Paraguay will be able to send meat, but initially it will be for the industry,” he was quoted as saying by Mercopress. “From then on, we must seek and conquer the market with our quality because we know that Paraguayan meat not only has genetic quality, but its taste conquers markets, and that is what we must rely on.”

The re-opening of the US market to Paraguayan beef is “the key to the markets of the world,” Gimenez commented.

Corn Boom in Brazil Paves Way for Top Fuel Firm’s Ethanol Bet

• Vibra Energia aims to tap north Brazil’s corn ethanol growth
• CEO identifies strategy as part of push into renewable energyBy Gerson Freitas Jr. and Ezra Fieser

Brazil’s largest fuel distributor wants to bring corn ethanol to places where gasoline is still king.

Vibra Energia SA expects to benefit from a corn ethanol production boom in Latin America’s largest economy to expand sales of the biofuel in northern states, which are still heavily dependent on fossil fuels, according to Chief Executive Officer Ernesto Pousada Jr.

Brazilian ethanol has been primarily made from sugar cane for decades, and it’s mostly used near production areas in Brazil’s heavily populated southeast region. But production of corn — commonly used in the US to make ethanol — has rapidly expanded northward, triggering a wave of investments in new biofuel-producing facilities that use abundant supplies of the grain as feedstock.

“Ethanol, in our view, will grow toward north and northeast,” Pousada said last week in an interview in New York, adding that using corn as feedstock will make the biofuel competitive in areas where cane ethanol is too expensive to compete with gasoline. “Vibra will allow that to happen through its infrastructure logistics.”

River Rhine in south Germany re-opened to shipping as water levels fall

The river Rhine in south Germany was re-opened to shipping on Tuesday night after being closed after a rise in water levels following heavy rain, German authorities said on Wednesday.

Rhine river shipping had been stopped around Maxau in south Germany for a week because of high water after recent heavy rain. But water levels have fallen again to levels permitting ships to operate, a spokesperson for the German inland waterways navigation agency WSA said.

High water means vessels do not have enough space to sail under bridges and the blockage prevented vessels sailing to Switzerland.

Colder weather forecast in river catchment areas in south Germany means snow rather than rain is expected in coming days which would not immediately raise Rhine water levels again, the spokesperson said.

Shipping in central and northern sections of the river were not disrupted by high water and continued normally in the past week.

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

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

Beijing Dabeinong Says Unit’s Soybean Product Approved For Planting In Brazil

SAYS UNIT’S GENETICALLY MODIFIED HERBICIDE TOLERANT SOYBEAN PASSED SAFETY REVIEW AND APPROVED FOR PLANTING IN BRAZIL

 

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