Global Ag News for Oct 18.23

TOP HEADLINES

Arkansas orders Chinese-owned seed producer Syngenta to sell US farmland

Arkansas ordered Syngenta to sell 160 acres (65 hectares) of farmland in the U.S. state within two years on Tuesday because the company is Chinese-owned, drawing a sharp rebuke from the global seeds producer.

U.S. farm groups and lawmakers are increasingly scrutinizing foreign land ownership due to concerns about national security.

“This is about where your loyalties lie,” Arkansas Governor Sarah Huckabee Sanders said at a news conference.

Syngenta said it was disappointed and called the decision “a shortsighted action” that will hurt Arkansas farmers. The company owns about 1,500 acres (610 hectares) of U.S. agricultural land for research, development and regulatory trials on products used by U.S. farmers, spokesman Saswato Das said.

“Our people in Arkansas are Americans led by Americans who care deeply about serving Arkansas farmers,” Das said. The company has owned the site in Craighead County for 35 years, he added.

The order is Arkansas’ first enforcement action under a state law passed this year that prohibits certain foreign parties from acquiring or holding land. China is among the prohibited parties because it is subject to U.S. arms export controls known as the International Traffic in Arms Regulations (ITAR), Arkansas Attorney General Tim Griffin said.

A rival of U.S. company Corteva CTVA.N and German firms BASF and Bayer DE, Swiss agrichemicals and seeds group Syngenta was bought for $43 billion by ChemChina in 2017 and folded into Sinochem Holdings Corp in 2021. ChemChina is a “state-owned enterprise” in China, Griffin said.

Syngenta is now pursuing an initial public offering in Shanghai.

If Syngenta fails to sell its land, owned by subsidiary Northrup King Seed Co, Griffin can “force them to get out of our state” with legal action, Huckabee Sanders said. The state also fined Syngenta $280,000 for failure to report foreign ownership in a timely manner.

In a form filed with the U.S. Department of Agriculture about the property last year, Syngenta said: “Ultimately, the foreign person that holds indirectly a significant interest in the person owning the land is from China,” according to a copy of the document posted by Griffin’s office.

But no one from China has ever directed Syngenta executives to buy, lease or otherwise engage in U.S. land acquisitions, Das said. Since Syngenta had Chinese ownership, the company has purchased an additional 200 agricultural acres (80 hectares), he said.

“All Syngenta land holdings have been examined by the U.S. government, through two administrations, as Syngenta was transitioning to ChemChina ownership,” Das said.

Foreign persons held an interest in approximately 40 million acres (16.2 million hectares) of U.S. agricultural land as of Dec. 31, 2021, the USDA said. That was 3.1% of all privately held agricultural land and 1.8% of all land. China had less than 1% of foreign-held land, while Canadian investors had 31%.

FUTURES & WEATHER

Wheat prices overnight are up 4 3/4 in SRW, up 3 1/2 in HRW, up 4 3/4 in HRS; Corn is up 2 1/4; Soybeans up 7 1/2; Soymeal up $4.90; Soyoil up 0.39.

For the week so far wheat prices are down 4 1/4 in SRW, up 1 1/4 in HRW, up 10 1/2 in HRS; Corn is down 2; Soybeans up 24; Soymeal up $14.70; Soyoil up 1.36.

For the month to date wheat prices are up 33 3/4 in SRW, up 6 1/2 in HRW, up 23 1/4 in HRS; Corn is up 14 1/2; Soybeans up 29 1/4; Soymeal up $23.50; Soyoil down 0.09.

Year-To-Date nearby futures are down 27.3% in SRW, down 24.5% in HRW, down 22.0% in HRS; Corn is down 27.6%; Soybeans down 14.2%; Soymeal down 15.4%; Soyoil down 12.6%.

Chinese Ag futures (JAN 24) Soybeans down 63 yuan; Soymeal up 30; Soyoil up 50; Palm oil up 42; Corn down 16 — Malaysian Palm is up 37. Malaysian palm oil prices overnight were up 37 ringgit (+0.98%) at 3821.

There were changes in registrations (-50 Soymeal, -2 HRW Wheat). Registration total: 3,005 SRW Wheat contracts; 735 Oats; 4 Corn; 220 Soybeans; 67 Soyoil; 375 Soymeal; 400 HRW Wheat.

Preliminary changes in futures Open Interest as of October 17 were: SRW Wheat up 3,179 contracts, HRW Wheat up 2,070, Corn up 3,850, Soybeans up 12,489, Soymeal up 7,393, Soyoil up 1,927.

Northern Plains: Isolated showers Wednesday. Mostly dry Thursday-Saturday. Temperatures above normal through Saturday. Outlook: Mostly dry Sunday. Isolated to scattered showers Monday-Thursday. Temperatures above normal Sunday-Monday, near to above normal Tuesday, below normal west and near to above normal east Wednesday, near to below normal Thursday

Central/Southern Plains: Isolated showers northeast Wednesday. Mostly dry Thursday-Saturday. Temperatures above normal Wednesday-Saturday. Outlook: Isolated showers Sunday-Monday. Scattered showers Tuesday-Thursday. Temperatures above to well above normal Sunday-Wednesday, near to above normal Thursday.

Western Midwest: Isolated showers Wednesday-Thursday. Isolated showers far north Friday. Mostly dry Saturday. Temperatures near to above normal Wednesday-Saturday.

Eastern Midwest: Scattered showers Wednesday-Saturday. Temperatures near to above normal Wednesday-Saturday. Outlook: Mostly dry Sunday. Isolated to scattered showers Monday-Thursday. Temperatures near to above normal Sunday-Monday, above normal Tuesday-Thursday.

Brazil: Rio Grande do Sul and Parana:  Scattered showers through Friday. Mostly dry Saturday. Temperatures near to below normal Wednesday-Thursday, near to above normal Friday-Saturday. Mato Grosso, MGDS and southern Goias:  Isolated showers through Saturday. Temperatures above normal through Saturday.

Argentina: Cordoba, Santa Fe, Northern Buenos Aires:  Isolated showers Wednesday. Mostly dry Thursday-Saturday. Temperatures near to below normal through Thursday, near to above normal Friday, above normal Saturday. La Pampa, Southern Buenos Aires:  Isolated showers Wednesday. Mostly dry Thursday-Friday. Isolated showers Saturday. Temperatures near to below normal through Thursday, near to above normal Friday, above normal Saturday.

The player sheet for Oct. 17 had funds: net sellers of 2,000 contracts of SRW wheat, sellers of 1,000 corn, sellers of 4,000 soybeans, buyers of 3,500 soymeal, and  sellers of 2,000 soyoil.

TENDERS

• CORN PURCHASE: South Korean animal feed maker Nonghyup Feed Inc. (NOFI) bought about 65,000 metric tons of corn in a tender
• CORN TENDER: Taiwan’s MFIG purchasing group issued an international tender to buy up to 65,000 metric tons of animal feed corn, which can be sourced from the United States, Brazil, Argentina or South Africa
• WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy a total of 89,873 metric tons of food-quality wheat from the United States and Canada in a regular tender that will close on Oct. 19.

PENDING TENDERS

• 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.
• WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 metric tons of milling wheat

TODAY

ETHANOL: US Weekly Production Survey Before EIA Report

Output and stockpile projections for the week ending Oct. 13 are based on seven analyst estimates compiled by Bloomberg.

• Production seen higher than last week at 1.024m b/d
• Stockpile avg est. 21.561m bbl vs 21.526m a week ago

Brazil’s Abiove projects record 164.7 mln tons of soy production in 2023/24

A group representing large soybean traders and processors on Tuesday forecast Brazil will produce a record 164.7 million metric tons of the oilseed in the 2023/24 cycle, 7 million tons more than in the previous harvest.

In its first statement on the new crop, Abiove said Brazil, the world’s biggest soy supplier, would crush 54 million tons domestically and export 100 million tons of the oilseed in 2024.

Brazil Soymeal Exports Seen Reaching 2.05 Million Tns In October Versus 1.945 Million Tns Forecast In Previous Week – Anec

BRAZIL SOY EXPORTS SEEN REACHING 6.44 MILLION TNS IN OCTOBER VERSUS 6.828 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC

BRAZIL SOYMEAL EXPORTS SEEN REACHING 2.05 MILLION TNS IN OCTOBER VERSUS 1.945 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC

HARVEST BEGINS TO STEP UP IN SOUTHERN BR, BUT RAINS CONCERN GROWERS

Brazilian agents focused on crop activities and monitoring the weather in the first fortnight of October. The harvest began to step up in the major wheat-producing states (Rio Grande do Sul and Paraná), but rains are still concerning growers.

Official estimates released by Conab (Brazil’s National Company for Food Supply) in the first half of the month pointed to lower productivity and output in Brazil. The crop currently being harvested is forecast to total 10.46 million tons, 3.3% lower than that estimated in September and 0.9% below the record set last season. The area allocated to wheat crops in Brazil is estimated to be 12.1% larger than that last season, at 3.46 million hectares, however, crops’ productivity is forecast at 3.02 tons/hectare, 3.6% lower than that estimated in September and 11.6% below that from 2022 (3.42 tons/hectare), according to Conab.

As for imports, Conab kept estimates stable, at five million tons (between August/23 and July/24). Wheat availability in Brazil is expected to be 2.2% lower than that reported in September, estimated at 16.2 million tons between Aug/23 and Jul/24, 2.6% higher than that last season.

Consumption is estimated by Conab to total 12.64 million tons, 2% higher than that estimated for the previous crop (Aug/22 – Jul/23). Exports estimates were kept at 2.6 million tons. Thus, by July/24, ending stocks would total 958.9 thousand tons, lower than that previously estimated but 29.5% higher than that last season.

BRAZILIAN CROPS – According to data from Conab, by October 7th, the wheat harvest had ended in Mato Grosso do Sul, Goiás and Bahia States. In Minas Gerais, 99.6% had been harvested; in São Paulo, 75%; in Paraná, 69%; in Santa Catarina, 6%; and in Rio Grande do Sul, 3%.

Cepea surveys show that wheat prices faded in the wholesale market in the first week of October but reacted in the second week. Between October 6-13, the prices paid to wheat farmers (over-the-counter market) dropped 3.5% in Rio Grande do Sul and 0.39% in Santa Catarina, but rose 0.37% in Paraná. On the other hand, in the wholesale market (deals between processors), values increased 6.14% in São Paulo, 2.52% in PR and 1.85% in Rio Grande do Sul, but remained stable in Santa Catarina.

India Sept. Oilmeals Exports Fall to 330,568 Tons

India’s oilmeals exports fell to 330,568 tons in September from 354,205 tons in August, according to the Solvent Extractors’ Association of India.

• Rapeseed meal exports fell to 189,213 tons from 261,165 tons in August
• Soymeal exports rose to 105,535 tons from 60,494 tons in August
• Castorseed meal exports rose to 35,306 tons from 30,386 tons in August

EU 2023/24 soybean imports 3.16 mln T by Oct 15, rapeseed 1.23 mln T

European Union soybean imports so far in the 2023/24 season that started in July had reached 3.16 million metric tons by Oct. 15, compared with 3.29 million a year earlier, data published by the European Commission showed on Tuesday.

EU rapeseed imports in the same period totalled 1.23 million tons, against 1.98 million a year earlier.

Soymeal imports totalled 4.43 million tons against 4.57 million a year ago, while palm oil imports stood at 1.02 million tons versus 1.08 million a year earlier.

EU Soft-Wheat Exports Fall 22% in Season Through Oct. 15

The European Union’s soft-wheat exports in the season that began July 1 reached 8.81m tons as of Oct. 15, compared with 11.3m tons in a similar period a year earlier, the European Commission said on its website.

• Leading destinations include Morocco (1.53m tons), Nigeria (969k tons) and Algeria (783k tons)
• Barley exports are at 2.31m tons, down 10% y/y
• Corn imports are at 5.07m tons, down 40% y/y

Russia Wheat Crop Trimmed 200K Tons But Remains High: SovEcon

Russia’s 2023 wheat harvest is now seen at 91.4m tons versus an earlier estimate of 91.6m tons, research firm SovEcon says in a note.

• That’s due to deteriorating crop prospects in Urals and Siberia, key spring-wheat regions
• Part of the area is expected to remain uncollected because of slow harvest progress
• “Despite a slight reduction in the Russian wheat crop estimate, wheat supply will remain high, continuing to exert pressure on global prices,” according to the note.

Ukraine’s Astarta Completes Winter Crop Planting

Astarta finished planting winter crops for the 2024 harvest season, according to a statement on its website.

• The company planted winter wheat across 49,000 hectares, rapeseed across 12,000 hectares
• Astarta continues autumn harvesting: 83,000 tons of sunflower seeds, 169,000 tons of soybeans gathered so far

China Says Grain Output May Hit Record High on Rainfall in North

China’s Grain production this year may hit a record high based on preliminary estimates, Sheng Laiyun, deputy chief of the National Bureau of Statistics, said at a briefing in Beijing.

“The situation of our autumn grain production is relatively good, the area is expanding, and the rain in the northern region is increasing, which is generally beneficial to the production of summer grain,” Sheng said on Wednesday. “We now have a preliminary estimate that this year’s grain production may hit a record high, and the livestock industry is growing steadily, so the overall supply of agricultural products is sufficient. It has laid a very good foundation for the sustained and stable recovery of the economy.”

The country has been impacted by heavy rains this year, including from typhoons, which have disrupted people’s daily activities. Sheng’s comments indicate that the weather situation has been positive for crops.

Sheng was speaking after China announced that gross domestic product increased 4.9% in the July-September period from a year prior, better than economist estimates.

Robust Margins Drive Record U.S. Corn Consumption for Ethanol – Refinitiv Commodities Research

2023/24  U.S. CORN CONSUMPTION FOR ETHANOL: 5304.6 MILLION BUSHELS

Ethanol margins continue to soar, reaching an unprecedented level of $1.19 per gallon on average in the key ethanol production regions, particularly the Corn Belt. This highlights the exceptional profitability within the ethanol industry for the ongoing year, with predictions indicating a sustained upward trajectory. Anticipated lower corn prices compared to historical highs in recent years further bolster this trend.

During September, the consumption of corn for ethanol surged to 512.8 thousand bushels, a significant increase from the 421.2 thousand bushels consumed in August. This marked a notable improvement from the 466.8 thousand bushels recorded a year ago and 375.8 thousand bushels in September 2021. As of October 6, corn consumption for ethanol has already reached 614 thousand bushels, indicating the strongest start to a season.

Drawing insights from the market indicators, Refinitiv Agriculture Research has revised its projection for the 2023/24 U.S. corn consumption for ethanol to 5,304.6 million bushels. This figure represents an increase of 4.6 million bushels above the USDA’s October estimate, emphasizing the robust outlook for ethanol consumption.

In parallel to global developments, on October 16, climate ministers from the E.U. nations united in endorsing the bloc’s position for this year’s U.N. COP28 climate summit. This unified stance underpins a global initiative to phase out CO2-emitting fossil fuels gradually. By championing this cause, the European Union, encompassing 27 countries, demonstrates its proactive approach and forward-thinking stance in the annual United Nations climate negotiations. The negotiations involve nearly 200 nations collaboratively addressing the pressing challenges of global warming.

LIVESTOCK SURVEY: US Cattle on Feed Placements Seen Up 1.2%

September placements onto feedlots seen rising y/y to 2.1m head, according to a Bloomberg survey of ten analysts.

A rise in placements would follow two consecutive months of y/y declines

• Estimates range from -4.1% to +4.8% y/y change
• Feedlot herd as of Oct. 1 seen falling by 0.3% y/y to 11.48m head
• Marketings seen falling 9.6% y/y

China Approves GM Corn and Soy Seed Varieties in Crop Boost

• Move supports Xi Jinping’s push for food self-sufficiency
• New seeds could raise farm production and curb imports

China has approved dozens of genetically modified corn and soybean seed varieties for planting, in a breakthrough move that could eventually boost production and reduce dependence on foreign supplies.

The country is the world’s top importer of soybeans and corn. Large-scale marketing of GM crops would support the government’s drive for food self-sufficiency and security, a top priority for President Xi Jinping.

A national committee set up by the agriculture ministry has approved 37 GM corn seed and 14 soybean seed varieties, after a preliminary review, the ministry said on Tuesday.

The approved list, including four corn varieties developed by China National Seed Group, a unit of Syngenta Group, and five soybean varieties from Beijing Dabeinong Technology Group, is available for public review until Nov. 15.

Actual planted areas for these seed varieties, after final approval, should be in accordance with relevant government arrangements, according to the notice on the website of the Ministry of Agriculture and Rural Affairs.

USDA to move up wheat, corn, soy acreage adjustments to August crop report

The U.S. Department of Agriculture (USDA) will permanently include updated acreage estimates for wheat as well as corn, soybeans and several other crops in its monthly U.S. crop production reports every August, earlier than in past years, an official with the agency’s statistical arm said on Tuesday.

The USDA will update acreage data for corn and soybeans again in its September reports, and update canola and sunflower acreage in October.

The data should give farmers, traders and other market participants a better gauge of harvest potential earlier in the growing season for staple crops used for food, animal feed and biofuel.

The government revises its estimates of planted and harvested acreage based on data from surveys, satellites, and information from USDA’s Farm Service Agency and Risk Management Agency. The USDA said it has adjusted the timing of these updates in recent years to provide results sooner.

“Based on what we are seeing with the data, we believe we can provide some meaningful (acreage) updates in August,” Lance Honig with the USDA’s National Agricultural Statistics Service said in an online USDA data meeting on Tuesday.

Before 2021, the USDA normally released its acreage updates for corn, soybeans, sorghum and sugarbeets each October. The USDA moved those adjustments to September starting in 2021, and this past summer, the USDA moved up its wheat acreage revisions to August.

USDA delays weekly export sales reporting upgrades until spring 2024

The U.S. Department of Agriculture continues to work on upgrades to its export sales reporting system but will not roll out its new portal before the spring of 2024, an official with the USDA’s Foreign Agricultural Service said on Tuesday.

Exporters are required to report sales of U.S. agricultural commodities to the USDA, which reports weekly export sales each Thursday. The reports are closely watched by grain and livestock traders.

The USDA is still refining its new system as it collaborates with exporters following a failed roll-out in August 2022 that sent traders scrambling and delayed export sales reports for three weeks.

“We don’t expect anything to go live until spring of 2024 at the earliest,” Paul Trupo, an acting deputy administrator with the Foreign Agricultural Service, said at a USDA data meeting.

The government is modernizing its export sales reporting system to comply with new IT protocols and enhance security features, but once the updates are complete, “exporters and users should find the new system as close to identical as possible to the current system,” Trupo said.

 

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