Global Ag News for Oct 23.23

TOP HEADLINES

Argentina Farmers Begin Shift to Soy From Corn Amid Drought

In a key sliver of the Argentine Pampas known as “zona nucleo,” farmers are changing their plans for an early-corn crop to plant soybeans instead on 200,000 hectares (494,000 acres), the Rosario Board of Trade said in a report.

• NOTE: Most soy is planted in November/December, so there’s time to wait for rains to moisten fields for seeding
• The shift to soy in zona nucleo could increase as some farmers with plans to sow 510,000 ha of late-corn may end up turning to the oilseed

FUTURES & WEATHER

Wheat prices overnight are down 1 1/4 in SRW, down 1 1/2 in HRW, up 4 3/4 in HRS; Corn is unchanged; Soybeans down 9 3/4; Soymeal down $4.00; Soyoil up 0.31.

Markets finished last week with wheat prices up 7 1/2 in SRW, down 1/4 in HRW, up 6 3/4 in HRS; Corn is up 5 1/2; Soybeans up 5; Soymeal up $29.70; Soyoil down 2.20.

For the month to date wheat prices are up 43 1/4 in SRW, up 4 3/4 in HRW, up 26 1/4 in HRS; Corn is up 18 3/4; Soybeans up 16; Soymeal up $38.70; Soyoil down 2.13.

Year-To-Date nearby futures are down 26.2% in SRW, down 24.7% in HRW, down 21.7% in HRS; Corn is down 27.0%; Soybeans down 14.9%; Soymeal down 12.2%; Soyoil down 15.8%.

Chinese Ag futures (JAN 24) Soybeans down 21 yuan; Soymeal down 16; Soyoil down 66; Palm oil down 54; Corn up 2 — Malaysian Palm is down 19. Malaysian palm oil prices overnight were down 19 ringgit (-0.50%) at 3752.

There were changes in registrations (-147 Soymeal). Registration total: 3,005 SRW Wheat contracts; 735 Oats; 4 Corn; 220 Soybeans; 67 Soyoil; 155 Soymeal; 400 HRW Wheat.

Preliminary changes in futures Open Interest as of October 20 were: SRW Wheat down 5,643 contracts, HRW Wheat down 437, Corn down 7,208, Soybeans down 14,833, Soymeal up 2,234, Soyoil up 3,602.

Northern Plains: Isolated to scattered showers Monday-Friday. Snow possible. Temperatures near to above normal Monday-Tuesday, near to below normal north to above normal south Wednesday, near to well below normal Thursday-Friday. Outlook: Isolated to scattered showers Saturday-Monday. Mostly dry Tuesday. Isolated showers Wednesday. Temperatures below to well below normal Saturday-Wednesday.

Central/Southern Plains: Isolated to scattered showers Monday-Friday. Heavy rain possible. Temperatures above to well above normal Monday-Thursday, near to below normal north to above normal south Friday. Outlook: Isolated to scattered showers Saturday-Tuesday. Mostly dry Wednesday. Temperatures near to below normal north to above normal south Saturday-Sunday, near to well below normal Monday-Wednesday.

Brazil: Brazil weekend weather was very warm to hot in the west and north with scattered showers producing light amounts of rain. Brazil rainfall will be frequent and abundant from southern Minas Gerais through Sao Paulo to Parana and Santa Catarina into Paraguay Wednesday into the weekend and impacting a few neighboring areas in Mato Grosso do Sul, Goias and northern Rio Grande do Sul. Brazil’s center west crop areas are unlikely to get enough rain to counter evaporation through Wednesday morning and only 30% of the region will get enough rain to see a net boost in topsoil moisture from Wednesday afternoon through next week.

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

The player sheet had funds net sellers of 3,000 contracts of SRW Wheat; sellers of 7,500 corn, sellers of 5,000 soybeans, sellers of 1,000 Soymeal, and; net buyers of 1,500 lots of Soyoil.

TENDERS

• CHINA SOY IMPORTS: China’s soybean imports from Brazil rose in September by 23% from a year earlier, data showed on Friday, after a huge crop produced by the South American nation this year continued to reach the world’s top buyer. China imported 6.88 million metric tons of the oilseed from Brazil last month, according to the General Administration of Customs, the highest for September in three years.
• WHEAT TENDER: The Taiwan Flour Millers’ Association has issued an international tender to purchase an estimated 52,000 metric tons of grade 1 milling wheat to be sourced from the United States

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, traders said. Of the total, 900 tons should be sourced from Vietnam and the rest from the United States. The deadline for submissions of price offers in the tender was Oct. 12.
• WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 metric tons of milling wheat.

TODAY

Brazil farmers plant 29.84% of 2023/24 soybean area -consultancy

Brazilian farmers planted 29.84% of the total expected area of the 2023/24 soybean harvest, below the 37.60% planted at this time last year, consultancy Patria Agronegocios said on Friday.

The planted area was also below the average of the last five years, Patria said.

US Cattle on Feed Rose to 11.58M Head on Oct. 1

The feedlot herd rose 0.6% from a year ago, according to the USDA’s monthly report. Analysts were expecting a drop of 0.3%

• Placements onto feedlots up 6.1% to 2.206m head
• Cattle marketed from feedlots declined 10.6% to 1.663m head

Louis Dreyfus to Build $500M Soy-Crush Plant in Ohio: Group

Louis Dreyfus Co. will build plant in Wyandot County in northern Ohio, according to a Regional Growth Partnership statement Friday.

• Plant to create 100 new jobs in state with “integrated crushing, edible oil refining, and lecithin production and packaging capabilities”
• Louis Dreyfus didn’t immediately reply to a request for comment

Ukraine’s Grain Harvest Rises 35% From Last Year: Ministry

Grain harvest was 39.2 million tons as of Oct. 20 for the season that started July 1, Ukrainian Agriculture Ministry says in a statement on website.

• As in previous weeks, the jump came largely from a bumper corn harvest, which is already 9.3m tons vs 2.7m tons for the same period last year
• Total also includes:
  • 22.3m tons of wheat, up 15% y/y
  • 5.9m tons of barley, up 4.7% y/y
• Other harvest figures:
  • Sunflower seeds at 10.2m tons, vs 7m tons by the same date last year
  • Soybeans at 4.2m tons, more than double a year ago
  • Sugar beets almost 6m tons vs 4.2m tons a year ago

Ukraine’s Grain Exports Fall 30% Y/y in Period Through Oct. 20

Ukraine exported 8m tons of grain from the start of the season on July 1 through Oct. 20, versus 11.5m tons a year earlier, the Agriculture Ministry said on its website.

Total includes:

• Wheat exports of 4.1m tons, down 6.7% y/y
• Barley exports of 656k tons, down 31%
• Corn exports of 3.2m tons, down 49%

China hog farming losses to worsen, grain acreage up, say officials

China’s pig production is still growing, a farm ministry official said on Monday, with a higher than normal number of breeding sows set to maintain downward pressure on prices.

China had 42.4 million sows at the end of September, unchanged from the previous month, and 3.4% higher than the normal level, Chen Guanghua, head of the animal husbandry and veterinary bureau at the Ministry of Agriculture and Rural Affairs told a press briefing.

Production efficiency of sows is also improving, with each sow breeding 0.5 more pigs every year than the previous year, Chen said.

Farmers in the world’s top pork market have lost money for most of this year due to low prices and high feed costs.

Chen added that while pig prices may rebound in the fourth quarter, the peak consumption season, “there is no basis for a sharp rise”.

Farmers have increasingly raised pigs to heavier weights, which will add to supply in November, said Chen.

The number of medium and large pigs in large-scale pig farms increased 6.3% last month compared with a year ago, which will be slaughtered in coming months.

Supply could increase after the Chinese New Year, which is in February, added Chen, when there could be both a decline in consumption in the off-season as well as an increase in the number of pigs slaughtered.

“The level of pig losses may even be greater than that of the same period this year,” he said, urging farmers to adjust their production.

SOYBEAN/CEPEA: High demand for soybean meal worldwide raises prices in both the USA and BR

The prices for soybean meal have increased high in both the United States and Brazil this week, influenced by the higher world demand. Estimates released by the USDA on October 12th pointed a record world consumption of the by-product in the 2023/24 season, forecast at 252.9 million tons, of which 69.72 million tons are estimated to be traded internationally.

Thus, at the Chicago Mercantile Exchange (CME Group), the Dec/23 contract for soybean meal rose a staggering 7.7% between Oct. 12-19, to USD 423.00 per short-ton (USD 466.27/ton) on Thursday, 19.

Besides the valuations in the US, the export premiums for the by-product increased in Brazil too. At the port of Paranaguá (PR), there were asks at USD 50.00/short-ton this week – last week, the highest ask was USD 32.00/short-ton. Based on the first contract, the export premiums for soybean meal have reached, this week, the same levels from January/23 (when supply is usually low). Still at the port of Paranaguá, the FOB price for soybean meal was calculated at USD 508.60/ton, the highest since July.

In Brazil, on the average of the regions surveyed by Cepea, soybean meal prices rose 3.3% over the past eight days.

SOYBEAN – Soybean prices have increased in Brazil this week, due to the higher demand from national processors, which are aware of the higher demand for meal. Besides, the demand from abroad has been high too; however, for delivery from November onwards because of the low number of quotas for immediate shipment.

According to Secex (Foreign Trade Secretariat), Brazil has exported 2.35 million tons of soybean this month. The daily average of shipments is at 261.48 thousand tons, 31% higher than that from Oct/22.

Between Oct. 11-19, the ESALQ/BM&FBovespa soybean Index (Paranaguá) and the CEPEA/ESALQ Index (Paraná) rose 3.3% and 3.1%, respectively, to BRL 145.80 per 60-kg bag (USD 28.88)/bag and BRL 138.61 (USD 27.45)/bag on Thursday, 19 On the average of the regions surveyed by Cepea, prices increased 3.5% in the over-the-counter market (paid to farmers) and 1.6% in the wholesale market (deals between processors).

CROPS – Soybean valuations are also linked to the current irregular weather in Brazil. In southern and southeastern Brazil, growers have reported excessive moisture in some areas, which halts the progress of crop activities. On the other hand, in the central-western region, farmers are concerned about the high temperatures and low rainfall.

According to a report from Conab (Brazil’s National Company for Food Supply), 19% of the national soybean crop had been sown in Brazil by Oct. 14th, less than the 21.5% sown a year ago.

CORN/CEPEA: Sales are low, and domestic prices resume weakening

Corn sales have been low in Brazil, majorly because purchasers have been cautious, not buying high volumes of the cereal. Although the international demand has been high, purchasers are aware of the high Brazilian output and low amount traded so far, which may lead growers to raise supply in the coming weeks.

On the other hand, some sellers – who have no need for cash flow and/or to make room in warehouses right now – still believe prices will rise and, thus, are unwilling to lowers asks. In this context, values are following opposite directions between the regions surveyed by Cepea.

While in some regions in São Paulo and Paraná States prices are firm, since growers are prioritizing sales at ports, in Mato Grosso and Mato Grosso do Sul, values are fading, pressed down by higher supply.

After having surpassed BRL 60.00 per 60-kg bag in the first fortnight of October, the ESALQ/BM&FBovespa Index (Campinas, SP) has resumed dropping this week, influenced by the cautiousness of purchasers and higher supply from central-western Brazil. Thus, the Index closed at BRL 58.53 (USD 11.59)/bag on Thursday, 19, 3% lower than that on October 11th.

Between Oct. 11-19, on the average of the regions surveyed by Cepea, corn prices increased 0.2% in the wholesale market (deals between processors) and 1.2% in the over-the-counter market (paid to farmers).

PORTS – Liquidity has been high at Brazilian ports, and exporters are prioritizing purchases for delivery in November and in December.

Despite the dollar depreciation, international valuations underpinned prices at Brazilian ports. Between Oct. 11-19, the average at the port of Paranaguá (PR) remained stable, and at the port of Santos (SP), it rose 0.9%. The American currency decreased 0.1%, to BRL 5.049 on Thursday.

CROPS – Although rains have been high in southern Brazil, growers are managing to go on with the crop activities for the summer crop. By Oct. 14th, 30.4% of the national crop had been sown, similar to that in the same period last year (30.9%), according to Conab.

U.S. Gulf Urea Nitrogen Fertilizer Price Drops 4.52%

Nitrogen fertilizer, represented by U.S. granular urea sold at NOLA, fell 4.52% to $359 per short ton in the week ended Oct. 20, according to Green Markets data compiled by Bloomberg Intelligence.

• Click here for BI’s Agricultural Chemicals Dashboard.
• U.S. Gulf NOLA urea dropped 10% during the last month and was up 11.3% during the last 3 months
• Major Urea nitrogen benchmark prices were mixed
• Shares of CF Industries Holdings Inc., Yara International ASA and Nutrien Ltd. were down in the latest week
• Major UAN nitrogen benchmark prices were mixed
• Major Ammonia nitrogen benchmark prices were unchanged
• Natural gas, which drives producer costs, has decreased 10% during the last week and was down 0.8% during the last month
• The price of corn, a driver of fertilizer purchases, increased 1.7% during the last week and was up 4% during the last month

China’s sow herd at 42.4 million at end-Sept -agriculture ministry

China had 42.4 million sows at the end of September, an official at the Ministry of Agriculture and Rural Affairs told reporters on Monday, little changed from the prior month.

The ministry had previously announced a herd of 42.41 million sows at the end of August, a large number that is pressuring prices with excess production in the world’s top pork market.

US Beef Production Up 3.5% This Week, Pork Rises: USDA

US federally inspected beef production rises to 528m pounds for the week ending Oct. 21 from 510m in the previous week, according to USDA estimates published on the agency’s website.

• Cattle slaughter up 3.4% from a week ago to 638m head
• Pork production up 0.4% from a week ago, hog slaughter rises 0%
• For the year, beef production is 5.3% below last year’s level at this time, and pork is 0.2% above

US Egg Production Rose 3% in September From Year Ago: USDA

The US produced 9.16b eggs in September vs 8.9b in the same period a year ago, according to a report from the USDA.

• Output of table eggs rose 3.4% y/y to 7.88b
• Hatching eggs up 0.5% to 1.28b

 

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