Global Ag News for Oct 13.23
El Niño Looks to Progress Into Next Spring
An El Niño climate system is now expected to continue into next spring, says the Climate Prediction Center in a release today. The arm of the National Weather Service says that there’s an 80% chance that El Niño will be active in some way through next March, with a 61% chance it’ll be active in April. However, in both cases, weak systems are expected to be at play, while the odds for a stronger system altering average ocean temperatures are far smaller–with the agency forecasting an only 6% chance of a strong El Niño in March. A weaker El Niño event can mean colder temperatures in most of the continental US, while a stronger event could push temperatures to warmer than normal, says Jim Roemer of Best Weather in a note.
FUTURES & WEATHER
Wheat prices overnight are up 5 1/4 in SRW, up 5 1/2 in HRW, up 5 1/4 in HRS; Corn is down 1/2; Soybeans up 5 3/4; Soymeal up $4.40; Soyoil up 1.05.
For the week so far wheat prices are up 8 1/2 in SRW, up 6 3/4 in HRW, up 8 1/4 in HRS; Corn is up 3 1/4; Soybeans up 29 3/4; Soymeal up $25.20; Soyoil down 0.93.
For the month to date wheat prices are up 35 1/4 in SRW, up 16 3/4 in HRW, up 19 1/2 in HRS; Corn is up 18 3/4; Soybeans up 20 3/4; Soymeal up $16.10; Soyoil down 1.41.
Year-To-Date nearby futures are down 27.2% in SRW, down 23.4% in HRW, down 22.4% in HRS; Corn is down 27.0%; Soybeans down 14.7%; Soymeal down 19.0%; Soyoil down 14.6%.
Chinese Ag futures (JAN 24) Soybeans up 9 yuan; Soymeal up 54; Soyoil up 142; Palm oil up 112; Corn down 2 — Malaysian Palm is up 95. Malaysian palm oil prices overnight were up 95 ringgit (+2.61%) at 3733.
There were changes in registrations (-33 Soymeal). Registration total: 3,005 SRW Wheat contracts; 735 Oats; 4 Corn; 220 Soybeans; 67 Soyoil; 430 Soymeal; 402 HRW Wheat.
Preliminary changes in futures Open Interest as of October 12 were: SRW Wheat up 6,133 contracts, HRW Wheat down 642, Corn down 6,992, Soybeans up 5,214, Soymeal up 9,993, Soyoil up 7,495.
Northern Plains: A system will pass by to the south, but is close enough to produce precipitation in the region through Friday, which may be heavy in parts of Wyoming and South Dakota. It is not out of the question for some snow to mix in over Wyoming or southwestern South Dakota as well. Strong winds will also be a concern. Another system will move through in the middle of next week with more showers.
Central/Southern Plains: A potent system will cross the region with widespread showers and thunderstorms and strong winds through Friday. Some accumulating snow may be possible in the northwest as well. Areas of heavy rain will be possible for Nebraska, which would delay harvest. Light rain elsewhere will favor winter wheat establishment where it occurs, though strong winds would not be favorable, drying out soils. Cold temperatures that follow the system could produce frosts as far south as the Texas Panhandle going into next week. Another system will cross the region in the middle of next week, which may bring some showers.
Midwest: A system will spread showers across the region through the weekend. Areas of heavy rain will be possible, which will help with the ongoing drought, but interrupt harvest. Winds will also be strong behind the system, particularly for the west. Another system will move through mid-late next week with potential for scattered showers.
Brazil: Wet season showers continue in central Brazil, though coverage and amounts of rainfall continue to be below-normal. A front is bringing heavy rain to southern areas Thursday. Heavy rain and flooding have caused concerns with winter wheat quality and harvest and corn and soybean planting, though the pace for planting has been near normal. While it is drier than normal in central Brazil, showers are still passing through and southern areas have more than enough soil moisture for early establishment.
Argentina: A front moved through with showers this week, but they were light and scattered, not nearly enough for filling wheat or corn establishment. Soils continue to be very dry and are in need of more rain. Showers may try to develop in spots this weekend and next week with a couple of weak disturbances moving through, but widespread rain is not forecast. Cold temperatures this weekend and early next week may produce localized frosts in some southern areas, unfavorable for filing wheat and emergent corn.
The player sheet for Oct. 12 had funds: net buyers of 5,500 contracts of SRW wheat, buyers of 6,000 corn, buyers of 14,500 soybeans, buyers of 7,500 soymeal, and buyers of 6,000 soyoil.
- WHEAT PURCHASE: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), said it bought 470,000 metric tons of wheat in an international tender. The purchase included 300,000 tons of Russian wheat, 120,000 tons of Romanian wheat and 50,000 tons of Bulgarian wheat, it said. Traders said the lowest free-on-board offer presented at the tender was $259 per ton for 50,000 tons of Bulgarian wheat.
- SOYBEAN SALES: The U.S. Department of Agriculture (USDA) confirmed private sales of 295,000 metric tons of U.S. soybeans for delivery to unknown destinations in the 2023/24 marketing year that began Sept. 1.
- CORN SALES: The USDA also confirmed private sales of 124,545 metric tons of U.S. corn to Guatemala for 2023/24 delivery.
- CORN PURCHASE: The Korea Feed Association (KFA) purchased an estimated 65,000 metric tons of animal feed corn to be sourced from optional origins in an international tender
- CORN TENDER PASSED: Algerian state agency ONAB is believed to have made no purchase in a tender on Wednesday for up to 120,000 metric tons of corn to be sourced only from Argentina or Brazil
- WHEAT PURCHASE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 90,640 metric tons of food-quality wheat from the United States, Canada and Australia in a regular tender that closed on Thursday.
- WHEAT TENDER: Tunisia’s state grains agency issued an international tender to purchase about 75,000 metric tons of durum wheat
- WHEAT TENDER UPDATE: The lowest offer in an international tender from Bangladesh’s state grains buyer to purchase and import 50,000 metric tons of wheat which closed on Wednesday was assessed at $298.19 a metric ton liner out.
- RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 50,100 metric tons of rice largely from the United States.
US Ethanol Stocks Fall 1.6% to 21.526M Bbl
According to the US Department of Energy’s weekly petroleum report.
- Analysts were expecting 21.812 mln bbl
- Plant production at 1.004m b/d, compared to survey avg of 1.014m
Argentina Drought Jeopardizes Corn Planting Plans: Exchange
Persistent dryness is hindering planting of the early corn crop and could lead Argentina’s overall 2023-24 corn acreage to shrink from the current estimate of 7.3m hectares (18m acres), the Buenos Aires Grain Exchange said in a weekly report.
- The dryness led bourse analysts to cut their wheat production estimate 1.8% to 16.2m metric tons
- 42% of wheat acreage is in a poor-to-very-poor condition vs 32% last week
- Frosts this week have also hurt wheat, but the damage hasn’t been estimated yet
Argentine Corn, Wheat Crop Estimates Oct. 12: Exchange
The Buenos Aires Grain Exchange releases weekly report on website.
- 2023-24 corn planted area est. held at 7.3m ha, with 19% completed
- 2023-24 wheat production est. reduced to 16.2m tons
India Sept. Vegetable Oil Imports Fall to 1.55m Tons: SEA
India’s vegetable oil imports fell to 1.55m tons in September from 1.87m tons in August, according to the Solvent Extractors’ Association of India.
- Palm oil imports fell to 834,797 tons from 1.13m tons in August
- Soybean oil imports rose to 358,557 tons from 357,890 tons in August
- Sunflower oil imports fell to 300,732 tons from 365,870 tons in August
China September Imports: Customs
General Administration of Customs says on website.
- Soybean imports in Sept. 7.154m Tons
- Soybean imports YTD rose 14.4% y/y to 77.799m tons
- Edible vegetable oil imports in Sept. 916,000 tons
- Edible vegetable oil imports YTD rose 93.9% y/y to 7.145m tons
- Meat (including offal) imports in Sept. 595,000 tons
- Meat (including offal) imports YTD rose 5.6% y/y to 5.707m tons
- Fertilizer exports in Sept. 3.767m tons
- Fertilizer exports YTD rose 31.6% y/y to 22.668m tons
Paraguay Soy Planting at 60% as Farmers Wait for More Rain
Paraguay’s farmers have seeded about 60% of the roughly 3 million hectares they are expected to plant for next year’s first soy harvest amid uneven rainfall across the main growing regions, said Hugo Pastore, executive director of grain and oilseed export group Capeco.
- “If we get good rain we will be able to plant what is left very quickly. If it doesn’t rain, planting will be extended” into November, Pastore said in a telephone interview
- Rainfall in southern, southeastern departments has been reasonable; more needed in the center-north
- Paraguay still has several hundred thousand metric tons of soybeans to export from more than 9 million metric tons harvested in 2023
- Argentina displaced Brazilian and Russian buyers this year after its soy output was crimped by drought
- NOTE: Argentina, home to a large soy crushing industry, purchased about 94% of the 5.2 million metric tons of soy Paraguay exported in Jan-Sept, according to central bank data.
- Markets expect a normal Argentine soy harvest for the 2023-24 season
- “It wouldn’t be surprising if Brazil and Russia participate more actively” as buyers of Paraguayan soy under that scenario, Pastore said
- Argentina’s decision to charge shipping on the Parana River a toll of $1.47 per ton will hit farm margins
- “This measure punishes Paraguay’s exports across all sectors,” Pastore said
Ukraine’s Grain Harvest Advances 31% from Last Year: Ministry
The grain harvest was 35.6 million tons as of Friday for the season that started July 1, Ukrainian Agriculture Ministry says in a statement on website.
- A jump for the second week in a row came largely from an bumper corn harvest, which is already 5.8m tons vs about 1m tons for the same period last year
- The volume of harvested wheat and barley remain the same as last week – 22.2m tons and 5.9m tons, respectively
- Sunflower seed harvest increases to 9m tons, which is double the same period a year ago
- Soybean harvest is so far 3.8m tons vs 1m tons a year ago
- Sugar beets harvest is 4.6m tons vs 2.6m tons year ago
Malaysia Says 2024 Palm Oil Output to Rise as Labor Issues Ease
Malaysia’s palm oil production is expected to increase next year as labor conditions return to pre-pandemic levels and on minimal impact from El Niño, according to finance ministry reports released with the 2024 spending plan.
- An increase in matured area, particularly in Peninsular Malaysia, and higher extraction rates from more frequent harvesting to support growth
- Crude palm oil price forecast to average 4,000 ringgit to 4,500 ringgit/ton, partly due to higher demand and lower output from other vegetable oils
- Other agriculture and livestock sectors are set to expand further on efforts to strengthen food security and modernize
- Rubber sector poised to gain on better labor supply and more tapping activities by smallholders after government initiatives to boost income
- Overall exports of agriculture goods forecast to rise by 1.7%
- Tax export duty collection from crude palm oil forecast at 772 million ringgit in 2024, compared with an estimated 719 million in 2023
- Collection from windfall profit levy from palm oil forecast at 1.02 billion ringgit in 2024, compared with an estimated 922 million in 2023
French Soft-Wheat, Winter-Barley Sowing Pace Trails ‘22: AgriMer
Some 17% of the French soft-wheat crop was planted as of Oct. 9, holding behind last year’s pace, according to weekly data from FranceAgriMer.
- That compares with 3% last week and 19% a year earlier
- The corn harvest pace also trails 2022
Indonesia Expects CPO Trading on ICDX to Start on Oct. 23
As many as 18 companies are ready to start trading CPO on the Indonesia Commodity and Derivatives Exchange, also known as ICDX, says Head of Bappebti Didid Noordiatmoko at the launch ceremony on Friday.
- Six rupiah-denominated contracts will be offered in three trading sessions from Mondays to Fridays
- They include sustainable CPO certified by RSPO and ISPO
- Contracts are for deliveries to Belawan and Dumai ports in Sumatra
- Govt is considering incentives for companies trading CPO at the exchange
- Next, Bappebti will focus on monitoring and regulating futures contracts of so-called strategic commodities including coffee, cocoa, rubber, and nickel
US Miss. River Grain Shipments Rise, Barge Rates Decline: USDA
Barge shipments down the Mississippi river increased to 386k tons in the week ending Oct. 7 from 377k tons the previous week, according to the USDA’s weekly grain transportation report.
- Barge shipments of corn fell 27% from the previous week
- Soybean shipments up 53.1% w/w
- St. Louis barge rates were $25.62 per short ton, a decline of $12.53 from the previous week
Top Ethanol Maker Says US States Should Embrace Carbon Pipelines
The world’s biggest maker of corn ethanol says US states that don’t embrace efforts to capture and store greenhouse gases risk being “left behind.”
Poet LLC said in a statement Thursday it remains committed to the technology even after a 1,300-mile pipeline project it’s backing to ship carbon dioxide across the Midwest suffered a major setback this week amid public resistance.
“States that are slow to adopt these technologies risk being left behind,” South Dakota-based Poet said in the statement.
Projects to trap emissions from ethanol factories are crucial for the industry to cash in on tax credits in President Biden’s landmark climate bill and have attracted big Wall Street investments. Yet efforts to build pipelines to ship the carbon dioxide are running aground in the face of opposition from a broad coalition of environmentalists, farmers and landowners.
The developer building the pipeline Poet is backing, Navigator CO2, withdrew its application Tuesday for a permit in Illinois, saying it needs to rethink the route for the project that would ship emissions from factories across five Midwest states. South Dakota regulators rejected Navigator’s request for a permit last month.
An even bigger carbon dioxide pipeline proposed by Iowa-based Summit Carbon Solutions was denied a permit by North Dakota in August. Summit is asking officials to reconsider the decision.
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.