Global Ag News for Nov 27.24

TOP HEADLINES

US Farmers Depend on Canada for Potash Needs

Though the US is import dependent on all fertilizers, a 25% tariff would be acutely felt by the potash trade. Other crop nutrients from Canada — nitrogen and phosphate — play a minor role, mitigating the effect. US farmers looking to 2025, where crop budgets are near breakeven, could see potash pricing increase about $80 a short ton to cover the levy. Alternatives to Canadian potash are few. The US imports about 90% of its potash from Canada, with the rest from Russia. Sanctions on Belarus prohibit US trade with the world’s second-largest exporter.

A tariff is paid by the importing entity to US Customs and Border Protection. Congress can set tariffs, though in the past few decades, presidents have also done so, particularly in cases of national security and economic emergencies.

 

FUTURES & WEATHER

Wheat prices overnight are down 5 in SRW, down 4 in HRW, down 2 3/4 in HRS; Corn is up 1/4; Soybeans up 5 1/2; Soymeal up $0.50; Soyoil down 0.26.

For the week so far wheat prices are down 10 3/4 in SRW, down 10 1/2 in HRW, down 3 in HRS; Corn is down 6 1/2; Soybeans up 5 3/4; Soymeal up $0.50; Soyoil up 0.68.

For the month to date wheat prices are down 37 1/4 in SRW, down 28 1/4 in HRW, down 29 1/2 in HRS; Corn is up 2 1/4; Soybeans down 5 1/2; Soymeal down $9.40; Soyoil down 2.62.

Year-To-Date nearby futures are down 14.0% in SRW, down 14.8% in HRW, down 19.8% in HRS; Corn is down 10.8%; Soybeans down 23.5%; Soymeal down 25.3%; Soyoil down 11.4%.

Chinese Ag futures (JAN 25) Soybeans up 4 yuan; Soymeal up 5; Soyoil up 12; Palm oil up 44; Corn down 10 — Malaysian Palm is up 63.

Malaysian palm oil prices overnight were up 63 ringgit (+1.33%) at 4798.

There were no changes in registrations. Registration total: 0 SRW Wheat contracts; 0 Oats; 114 Corn; 422 Soybeans; 369 Soyoil; 76 Soymeal; 5 HRW Wheat.

Preliminary changes in futures Open Interest as of November 26 were: SRW Wheat down 1,843 contracts, HRW Wheat down 3,164, Corn down 35,911, Soybeans down 3,846, Soymeal down 10,263, Soyoil down 9,498.

 

Brazil: Scattered showers became isolated over central Brazil over the weekend, focusing farther to the north. A front moving into Argentina will get into southern areas midweek, and enhance showers over central Brazil by the end of the week. Several more fronts coming from Argentina should keep the country active through next week with mostly good growing conditions.

Argentina: A front moved into the country on Sunday and through Monday has produced some heavier rainfall across central and northern areas of the country. That should continue through Wednesday before the front makes its way into Brazil. However, additional showers will move through for the rest of the week and another system and front move through Sunday and Monday with more scattered showers. Precipitation is forecast to be heavier over northern areas and some areas in the central and south will need more rainfall. The threat of heat and dryness due to the building La Nina may be a threat later in the season as well.

Northern Plains: Several disturbances will bring down colder air from the Canadian Prairies and occasional snow showers throughout this week and likely next week as well. Temperatures will be very cold and some records may be broken. Temperatures may moderate by the middle of next week, though that is uncertain.

Central/Southern Plains: A system will develop in southern Colorado Tuesday night and move through on Wednesday with some areas of showers. Another burst of colder air will move through behind it. Several more bursts of colder air may move in over the weekend into next week and may produce occasional light showers. The colder air will help to push more wheat into dormancy, mostly in good condition. Temperatures may moderate by the middle of next week, but that is uncertain.

Midwest: A system that moved through on Monday brought scattered showers as well as lower temperatures. Another system will move through southern areas Wednesday into early Thursday with a mix of rain and snow. Cold, arctic air flowing in behind it will produce some occasional light snow across the region, and heavier snow east of the Great Lakes. Cold air will have a tendency to continue flowing in next week as well, keeping the lake-effect going.

Delta: Water levels on the Mississippi River are still above the low mark due to recent heavy rain across the Plains and Midwest, but are slowly falling. More rain is needed in the Ohio Valley to maintain or make long-lasting improvements. A storm that moves through on Wednesday is forecast to bring through some moderate precipitation in just the right areas and should help with the river levels for a bit. But the pattern will be much drier afterward with cold air descending through the country.

Europe: Showers decreased over the weekend, but a system is moving through Monday and Tuesday with another to follow mid-late week that could stick around the southeast through the weekend. Additional fronts are forecast to move through next week with more precipitation as well. Precipitation is helping southeastern areas that have been much drier while keeping soil moisture very high across the rest of the continent. Wheat is going dormant from north to south in mostly good condition, though some wet spots are not all that favorable.

Black Sea: A couple of waves of showers moved through recently, helping to build some soil moisture as wheat continues to go dormant in mostly poor condition, especially in the east. The region will hope for good precipitation over the winter to get a good start when the crop comes out of dormancy in the spring.

Australia: Another system is moving through the east over the next few days with areas of heavy rain. The rain is unfavorable for fieldwork and winter harvest, but good or cotton and sorghum planting and establishment. Soil moisture is improving in many areas, though the pattern looks a little drier next week.

 

The player sheet for Nov. 26 had funds: net buyers of 1,000 contracts of SRW wheat, sellers of 9,500 corn, buyers of 500 soybeans, sellers of 3,500 soymeal, and buyers of 5,000 soyoil.

TENDERS

• CORN PURCHASE: Leading South Korean animal feed maker Nonghyup Feed Inc. (NOFI) bought an estimated 133,000 metric tons of animal feed corn in an international tender
• CORN PURCHASE: South Korea’s Feed Leaders Committee (FLC) purchased around 65,000 metric tons of animal feed corn in a private deal without issuing an international tender
• WHEAT PURCHASE: Algeria’s state grains agency OAIC is believed to have bought milling wheat in an international tender that sought shipment to two ports only
• WHEAT PURCHASE: A group of South Korean flour mills bought an estimated 50,000 metric tons of wheat to be sourced from the United States in a tender
• 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
• CORN 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
• CORN AND SOYMEAL PURCHASE: Algerian state agency ONAB is believed to have bought an unknown volume of animal feed corn to be sourced from Argentina or Brazil in an international tender for up to 240,000 metric tons on Tuesday. Some traders at least one corn consignment of up to 40,000 tons was bought. It is also believed one consignment of at least 30,000 tons of soymeal was bought in the tender, which sought up to 70,000 tons from optional origins.
• WHEAT, DURUM TENDER: Tunisia’s state grains agency issued an international tender to purchase about 100,000 metric tons of soft milling wheat and around 100,000 tons of durum wheat
• RICE TENDER: Bangladesh’s state grains buyer issued another international tender to purchase 50,000 metric tons of rice. 

PENDING TENDERS

• RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 40,000 metric tons of rice to be sourced from the United States
• BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase up to 120,000 metric tons of animal feed barley.
• BARLEY EXPORT TENDER: Turkey’s state grain board TMO issued an international tender to sell and export about 150,000 metric tons of animal feed barley.

 

 

 

TODAY

ETHANOL: US Weekly Production Survey Before EIA Report

Output and stockpile projections for the week ending Nov. 22 are based on six analyst estimates compiled by Bloomberg.

• Production seen lower than last week at 1.102m b/d
• Stockpile avg est. 22.745m bbl vs 22.563m a week ago

 

Brazil corn exports seen reaching 5.10 million tns in November

• BRAZIL SOY EXPORTS SEEN REACHING 2.46 MILLION TNS IN NOVEMBER VERSUS 2.80 MILLION SEEN IN THE PREVIOUS WEEK- ANEC
• BRAZIL SOYMEAL EXPORTS SEEN REACHING 1.92 MILLION TNS IN NOVEMBER VERSUS 1.98 MILLION TNS SEEN IN THE PREVIOUS WEEK
• BRAZIL CORN EXPORTS SEEN REACHING 5.10 MILLION TNS IN NOVEMBER VERSUS 5.57 MILLION TNS SEEN IN THE PREVIOUS WEEK

 

Paraná now has 92% of its soybean harvest in “good” condition after drought in the northwest

The condition of soybean crops in Paraná in the 2024/25 harvest showed a drop in relation to the assessment of the previous week, after a drought affected crops in the northwest of the state, one of the largest producers of the oilseed in Brazil, the Department of Rural Economy (Deral) said on Tuesday.

Now 92% of Paraná’s soybean area is rated “good,” up from 99% last week after dry conditions in parts of the west and northwest recently. The state had been generally showing good progress after rains accelerated planting, which is now nearing completion.

The State still has 8% of areas in “average” condition, versus 1% in the previous week.

Farmers in Paraná, however, are expecting the rains to return in the coming days, according to climate projections, which should bring relief to areas with drier soil.

“In general, (the lack of rain in the west) is a warning, but it does not yet indicate significant damage to crops. The expected return of rain should bring normality back to the harvest,” said Deral soybean specialist Edmar Gervásio. He recalled that the high temperatures in recent days have made things worse, and could result in lower productivity in some areas.

The 2024/25 soybean harvest in Paraná, one of the three main oilseed-producing states in Brazil, is estimated at a record 22.4 million tons, according to Deral, which will release a new monthly estimate next Thursday. Deral also reported that 99% of the area planned for soybeans in the State has already been planted. The State already has 11% of crops in fruiting, 27% in flowering, 59% in vegetative development and 3% in germination.

 

Farmers bet more heavily on cotton in Brazil’s newest farming region

Farmers in Brazil’s most recent agricultural expansion region are planting more cotton and less corn in the new crop, after a successful previous season that saw Brazil surpass the United States to become the world’s largest exporter of the fiber.

Cotton growing continues to make inroads in the sprawling farms around Luis Eduardo Magalhaes in the western part of Bahia state, where the “cerrado” (savannah) climate predominates. The well-defined wet and dry periods have made the region a natural expansion place for cotton growing.

“We plan to plant 25% more cotton this year,” said Moises Schmidt, a partner at Agricola Schmidt, an agricultural group that cultivates around 35,000 hectares (86,490 acres) of farmland in Bahia, one of the states forming the new frontier known as Matopiba (Maranhao, Tocantins, Piaui and Bahia).

The movement in Bahia is a sign that Brazil will likely increase its share of the global cotton trade, the latest positive mark in a story that saw the country lead exports in soybeans and corn in recent years. Brazil is also the largest exporter of coffee and sugar.

Bahia is Brazil’s second largest cotton producing state, only behind grains king Mato Grosso. Large circular bales of cotton wrapped in colorful plastic covers can be seen piled up in farms and at storage areas of co-ops and cotton processors in the region, waiting to be shipped abroad.

Agricultural consultancy Veeries projects that Bahia cotton area will grow by 9.5% in the new crop that is being planted to a record 379,000 hectares (936,530 acres).

In the case of Agricola Schmidt, it is cutting soy area to give room for more cotton.

“China’s soy demand has kind of stabilized, it seems to have reached a peak, so cotton looks more attractive,” said Schmidt, referring to the country that over the last decade was the main driver of Brazil’s soy production jump. China buys around 70% of all soy exported by Brazil.

Veeries, however, sees soy area in the state little changed in the new crop. The one paying the price for cotton’s expansion is corn (first crop), which is seen falling 9.2% to 363,000 hectares (896,990 acres), the smallest area in six years.

“Considering expected profit margins, cotton will give better returns than soy, and much more than summer corn,” said Fabio Meneghin, lead analyst and partner at Veeries.

Looking at the whole country, cotton area is seen growing 7.9% to 2.15 million hectares (5.31 million acres), according to consultancy Safras & Mercado, which projects production at 3.89 million tones of cotton lint, 5.6% more.

Veeries expects production to reach 4 million tons and sees potential exports of 3 million tons in the 2024/25 crop year (Sept-Aug), which would be a record for the country.

 

EU Soft-Wheat Exports Fall 30% Y/y in Season to Nov. 24

EU soft wheat exports in the season that started July 1 totaled 9.2m tons as of Nov. 24, compared with 13.1m tons a year earlier, the European Commission said on its website.

• Leading destinations included Nigeria with about 1.5m tons, the UK with 725k tons and Egypt with 692k tons
• Barley exports were 1.89m tons, down 38% y/y
• Corn imports totaled 7.94m tons, up 7% y/y
• NOTE: Click here for figures on oilseed trade
• NOTE: Export data for Italy are not complete for the last four weeks; data for France are not complete since the beginning of calendar year 2024; Bulgaria and Ireland data incomplete since the start of marketing year 2023-24

 

Turkey Reduces Customs Duty on Sunflower Seed Imports

Customs tax on sunflower seeds used to make oil was cut to 12% from 27%, according to decree published in official gazette.

• Customs tax on sunflower seeds that was implemented as 8% as part of tariff quotas was cut to zero
• Decision taken in light of global decline in production and rising prices, Trade Ministry says
• Local companies have problems accessing sunflower seeds, according to the ministry

 

South Africa Plans US Corn-Import Permits as Drought Cuts Crop

• Drought caused local output to drop to five-year low in 2024
• Expected La Nina weather could bring better 2025 harvest

South Africa will issue import permits for genetically engineered white and yellow corn from the US after a mid-summer drought that caused 22% drop in local production.

South Africa’s Department of Agriculture informed stakeholders on Nov. 19 that it had resolved “all GE corn events that caused asynchrony” with the US, allowing issuance of the permits, the US Department of Agriculture’s Foreign Agriculture Service said in a report.

South Africa could import about 800,000 tons of corn in the marketing year that runs from May 2024 to April 2025, the report said. This is after the country produced the smallest corn crop in five years in 2024.

A report from South Africa’s Crop Estimates Committee last month showed farmers will barely increase the land allocated to plant corn for next year’s crop. However, the expected La Nina weather phenomenon, which usually causes above-normal rainfall in the country and its neighbors, could make for a better harvest in 2025.

The Crop Estimates Committee will publish its final estimate for 2023-24 summer crops, which include corn, later on Wednesday.

 

Export duty on Russian wheat rises 12.3% to 3,020.3 rubles per tonne on Nov 27 from 2,689.7 rubles per tonne – Agriculture Ministry

The export duty on Russian wheat has risen 12.3% to 3,020.3 rubles per tonne in the week starting November 27 from 2,689.7 rubles per tonne during the previous duty period, the Agriculture Ministry said.

The rate of growth in duties has accelerated sharply from 4.7% the previous week.

The duty on barley has decreased to 1,166 rubles per tonne from 1,233.2 rubles per tonne the previous week, and the duty on corn has risen to 3,584.1 rubles per tonne from 3,065.5 rubles per tonne.

Duty rates are based on indicative prices of $223.50 per tonne for wheat against $222.80 per tonne in the previous period, $185.70 per tonne for barley versus $190.10 per tonne, and $220.30 per tonne against $216.80 per tonne

The duties are valid until December 3, inclusive.

 

Near Breakeven, US Farmers Get a Cost Layer on Tariff Threat

A 25% tariff on Canadian imports could lift Corn Belt potash prices relative to rest-of-world pricing. Though fertilizer is about one-third of cash operating costs, US corn farmers’ production costs may rise 1-2% if farmers maintain normal fertilizer-application rates. Mosaic, K+S and Nutrien are the largest publicly traded potash producers with assets in Canada.

 

 

 

 

 

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