Global Ag News for Oct 31.23

TOP HEADLINES

Louis Dreyfus Company Acquires Grains & Oilseeds Warehouse in La Pampa Province, Argentina

On Oct 25, Louis Dreyfus Company (LDC) announced the acquisition of a grains and oilseeds warehouse in Trilí, La Pampa province, Argentina. The Group’s second elevator in the province and eleventh in the country, Trilí will be ready to receive and condition grains from December 2023, following the completion of improvement works.

With a static capacity of 1,600 tons in silos and an additional storage capacity of 40,000 tons in silo bags, the new plant will be able to handle significant volumes of different grains and oilseeds throughout the year. The site’s connection to the Domingo Faustino Sarmiento railway line will facilitate the shipment of local production to LDC’s agro-industrial complex in General Lagos, Santa Fe, and its deep-water port complex in Bahía Blanca, Buenos Aires.

“The acquisition of this elevator represents a strategic investment to further reinforce LDC’s origination activities in the country, supporting logistics from farm to port thanks to its rail connectivity and complementarity with LDC’s existing warehouses in La Pampa and Buenos Aires provinces,” said Daniel Giuliano, LDC’s Warehouse Manager for South & West Latin America. “LDC’s increased presence in the province will also allow us to give local producers access to our entire portfolio of integrated solutions, including logistical and financial facilities, as well as a range of seed varieties, fertilizers and crop protection products commercialized under LDC’s Macro Seed, Macro Fertil and Macro Protect brands.”

“The new facility will support LDC’s sustainable business roadmap, enabling the direct origination of grains and oilseeds from producers in the region, and guaranteeing 100% traceability to farm for the products sourced,” added Maria Victoria Capalbo, Regional Grains & Oilseeds Sustainability Manager.

Once operational, Trilí warehouse is expected to directly employ a dozen people and generate additional indirect jobs in nearby communities, as a result of the facility’s reactivation and the increased movement of customers and transporters in the area.

FUTURES & WEATHER

Wheat prices overnight are down 4 1/2 in SRW, down 4 1/2 in HRW, down 1 3/4 in HRS; Corn is up 3/4; Soybeans down 1; Soymeal up $1.70; Soyoil down 0.26.

For the week so far wheat prices are down 14 in SRW, down 2 1/2 in HRW, down 3 3/4 in HRS; Corn is down 1 3/4; Soybeans down 13 1/4; Soymeal down $14.20; Soyoil down 0.14.

For the month to date wheat prices are up 20 in SRW, down 23 1/4 in HRW, up 6 3/4 in HRS; Corn is up 2 1/4; Soybeans up 11 3/4; Soymeal up $47.00; Soyoil down 3.70.

Year-To-Date nearby futures are down 29.1% in SRW, down 27.9% in HRW, down 23.7% in HRS; Corn is down 29.4%; Soybeans down 15.7%; Soymeal down 10.5%; Soyoil down 18.3%.

Chinese Ag futures (JAN 24) Soybeans down 41 yuan; Soymeal down 40; Soyoil down 70; Palm oil down 138; Corn up 6 — Malaysian Palm is down 53. Malaysian palm oil prices overnight were down 53 ringgit (-1.42%) at 3684.

There were changes in registrations (378 Soybeans, -2 Soymeal). Registration total: 3,005 SRW Wheat contracts; 735 Oats; 4 Corn; 598 Soybeans; 62 Soyoil; 55 Soymeal; 400 HRW Wheat.

Preliminary changes in futures Open Interest as of October 30 were: SRW Wheat up 3,249 contracts, HRW Wheat up 2,355, Corn up 1,684, Soybeans down 44,679, Soymeal down 4,677, Soyoil up 1,778.

Brazil: Rio Grande do Sul and Parana:  Isolated to scattered showers through Friday. Temperatures near to above normal through Thursday, near to below normal Friday. Mato Grosso, MGDS and southern Goias:  Isolated to scattered showers through Friday. Temperatures near to above normal through Friday.

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

Northern Plains: Mostly dry Tuesday-Wednesday. Light mixed precipitation Thursday-Friday. Temperatures below to well below normal through Thursday, near to below normal Friday. Outlook: Isolated mixed precipitation Saturday-Wednesday. Temperatures near to below normal Saturday, near to above normal Sunday-Tuesday, near to below normal Wednesday.

Central/Southern Plains: Mostly dry Tuesday-Thursday. Isolated showers north Friday. Temperatures below to well below normal through Wednesday, near to below normal Thursday, near to above normal Friday. Outlook: Isolated showers Saturday-Wednesday. Temperatures near to above normal Saturday-Tuesday, near to below normal Wednesday.

Western Midwest: Isolated showers Monday night-Tuesday. Mostly dry Wednesday-Thursday. Isolated showers Friday. Temperatures below to well below normal through Thursday, near to above normal Friday.

Eastern Midwest: Isolated showers Tuesday. Mostly dry Wednesday-Thursday. Isolated showers north Friday. Temperatures below to well below normal through Thursday, near normal Friday. Outlook: Isolated to scattered showers Saturday-Wednesday. Temperatures near to above normal Saturday-Tuesday, near to below normal Wednesday.

The player sheet for Oct. 30 had funds: net sellers of 4,000 contracts of SRW wheat, sellers of 2,000 corn, sellers of 5,000 soybeans, sellers of 5,000 soymeal.

TENDERS

  • SOFT WHEAT AND BARLEY TENDER: Tunisia’s state grains agency issued an international tender to purchase 100,000 metric tons of soft milling wheat and 50,000 metric tons of animal feed barley.
  • WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy a total of 113,506 metric tons of food-quality wheat from the United States, Canada and Australia in a regular tender that will close on Thursday.

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
  • CORN TENDER: Iranian state-owned animal feed importer SLAL issued an international tender to purchase about 180,000 metric tons of animal feed corn.
  • WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 metric tons of milling wheat.

interconnected globe

TODAY

USDA CROP PROGRESS: Winter Wheat Crop 47% Good/Excellent

  • Winter wheat 47% G/E vs 28% a year ago
  • Winter wheat planted 84% vs 77% last week, and 86% a year ago
  • Winter wheat emerged 64% vs 53% last week, and 60% a year ago
  • Corn harvest 71% vs 59% last week, and 74% a year ago
  • Soybeans harvested 85% vs 76% last week, and 87% a year ago
  • Cotton 29% G/E vs 29% last week, and 30% a year ago
  • Cotton harvested 49% vs 41% last week, and 54% a year ago

US Inspected 532k Tons of Corn for Export, 1.89m of Soybeans

In week ending Oct. 26, according to the USDA’s weekly inspections report.

  • Soybeans: 1,890k tons vs 2,626k the previous wk, 2,586k a yr ago
  • Corn: 532k tons vs 449k the previous wk, 446k a yr ago
  • Wheat: 190k tons vs 169k the previous wk, 137k a yr ago

US Corn, Soybean, Wheat Inspections by Country: Oct. 26

Following is a summary of USDA inspections for week ending Oct. 26 of corn, soybeans and wheat for export, from the Grain Inspection, Packers and Stockyards Administration, known as GIPSA.

  • Soybeans for China-bound shipments made up 1.55m tons of the 1.89m total inspected
  • Mexico was the top destination for corn inspections, Philippines led in wheat

Brazil’s 2023/24 soybean planting hits 40%, says AgRural

Brazil’s 2023/24 soybean planting had reached as of last Thursday 40% of the expected area, agribusiness consultancy AgRural said on Monday, up 10 percentage points from the previous week.

Sowing continues to lag behind last year’s levels, when 46% of the areas had been planted at the same time, AgRural said in a statement.

Fieldwork lost steam in top grain producing state Mato Grosso as some areas there grapple with dry weather, affecting the overall sowing pace in Brazil even as other states registered some favorable showers, the consultancy added.

“The light and scattered rains forecast for Mato Grosso arrived and helped alleviate the heat, but volumes and distribution were still very irregular,” it said.

“In the driest and/or most delayed areas, the fear of needing to replant large soybean areas and sow part of the second 2024 corn crop out of the ideal window persists.”

AgRural also reported that farmers in center-south Brazil have planted 53% of the area expected for their first 2024 corn crop, up from 46% a week ago but below the 56% registered a year earlier.

WHEAT/CEPEA: Unfavorable weather concerns players; prices move up again in Brazil

Unfavorable weather conditions during the wheat harvest have been concerning producers regarding the quality of the crops. In Paraná and Rio Grande do Sul, some players surveyed by Cepea already indicate crop losses. In this scenario and because of the firm demand from wheat mills, prices have increased over the last days – it is worth noting that values had been in a downward trend for almost one year and, therefore, producers consider that current quotations are low.

Between October 20-27, the prices paid to wheat farmers (over-the-counter market) in Paraná rose 6.8% and 5.4% in Rio Grande do Sul. In the wholesale market (deals between processors), values increased 5.5% in RS, 1.3% in São Paulo, 2.1% in Paraná and 4.3% in Santa Catarina.

Emater/RS indicated on October 26 that the harvest reached 43% of the area, a weekly advance of 24 percentage points, despite unstable weather conditions. Emater also reports that, as activities advance, the average yield shrinks: in Santa Maria, the decrease may hit 25% and in Santa Rosa, 44%.

In Paraná, Seab/Deral says that the production is expected at 3.86 million tons, 300 thousand tons less than that reported a month ago, due to the productivity decrease. The regular volume of rainfall, the small number of sunny days and diseases affected some crops. Concerning the harvest, it is about to finish: there are 16% of the area left to be harvested.

In Santa Catarina, Conab indicated that, up to Oct. 21, the harvested area hit 14%. The excess of rains can affect the quality of the crops. In São Paulo and in Minas Gerais, activities are finished. According to Conab, 59.2% of the area had been harvested in Brazil.

BYPRODUCTS – Despite the higher demand this week, since purchasers are trying to replenish inventories before possible price rises, the pace of trades is slow, and prices remain firm. Concerning wheat bran, the demand is stable and values are also firm.

China snaps up Australian, French wheat as crop damage spurs buying spree

  • China has bought around 2 mln T of Australia new-crop wheat
  • Around 2.5 mln T of French wheat has been sold to China
  • Large imports of Australian wheat to tighten Asian supplies
  • Nearly 25 mln T or around 20% of China’s crop damaged by rains

China is set to import record volumes of wheat this year, trading sources say, with rain damage to its crop and worries over dry weather in exporting nations fuelling Beijing’s appetite to buy while prices are low.

Traders said China’s frantic buying is likely to support global prices, which have dropped more than a quarter this year – based on the Chicago futures benchmark Wv1 price – amid abundant supplies from top exporter Russia.

The world’s biggest wheat producer and consumer, China bought around two million metric tons of new-crop Australian wheat in October, for shipments starting in December, trading sources told Reuters. It has also booked about 2.5 million metric tons of French wheat since September, for December-March shipment, they said, noting these were unusually large volumes for this time of year.

Overall, China’s 2023 imports are likely to reach around 12 million tons, two Singapore-based traders said, topping 2022’s record 9.96 million tons, and the avid buying is expected to continue into 2024.

“China has had problems with crop quality this year and Australia, which is the main wheat supplier to China, is going to have a much smaller crop,” said one of the Singapore traders, who is at an international company which sells wheat to China.

“They are buying as much as they can and as early as possible. Supplies are going to eventually tighten, especially from Australia,” the trader said.

China has said its wheat crop shrank 0.9% this year to 134.5 million tons, the first decline in seven years despite expanded acreage, after heavy rain battered mature grain in the key central growing region just before the harvest.

Beijing has not provided a crop quality assessment.

However, according to estimates by the two Singapore traders and one dealer in Sydney, around 25 million tons or about 20% of China’s harvest this year was damaged by rains. Some of that rain-damaged wheat will only be fit for animal feed or for blending with higher quality imported wheat before being milled into flour.

China’s agriculture ministry did not immediately respond to a request for comment.

The world’s biggest hog producer, China’s Muyuan Foods has benefitted from the availability of rain damaged wheat. Muyuan told investors on Friday that purchases of germinated wheat, which occurs when mature plants get wet and can no longer be used for milling, contributed significantly to lowering production costs.

“Australia has the opportunity to fill the quality gap that China is currently suffering, particularly for high protein milling wheat,” said Stefan Meyer, a grains broker at StoneX in Sydney.

While wheat output in Australia, the world’s second largest exporter, is forecast to drop to 26 million metric tons, down from last season’s record 39.7 million tons, due to dryness from the El Nino weather pattern, the quality is better this year as dry weather results in higher protein content.

Ma Wenfeng, senior analyst at Beijing Orient Agribusiness Consultancy, said a lower share of China’s wheat harvest – about 20 million tons – was unsuitable for high-quality milling, although a portion of it can be used after cleaning.

Ma and others in China said attractive prices were a bigger driver of China’s imports.

“Price is the main reason – it’s really cheap,” said Rosa Wang, analyst at Shanghai JC Intelligence Co Ltd, adding that

China was probably looking at the mounting weather risks in top exporting countries and “making preparations” for next year.

Ukraine Seeks Meetings With Poland, EU on Border Crossings

Ukraine’s Infrastructure Ministry seeks talks with Poland’s Infrastructure Ministry, European Commission’s mobility directorate on border crossings between Ukraine and Poland, the ministry says on website.

  • “We received a message about the possible blocking of checkpoints by Polish carriers,” ministry says
  • Meeting with EU Commission’s directorate planned on Oct. 31
  • NOTE: Polish carriers threaten to block border crossings with Ukraine from November, citing excessive competition

Fire at Key Brazilian Port Is Worsening Crop Shipment Delays

  • Terminal at Paranagua port halted after conveyor belt fire
  • Incident adds to port congestion as Brazil ships bumper crops

Grain cargoes from a terminal at one of Brazil’s key ports were halted after a fire broke out over the weekend, adding to the shipping congestion that’s plagued the country over the past few weeks.

The fire erupted Saturday night on a conveyor belt belonging to CAP Terminal at Paranagua, Brazil’s second-largest port. The operator told Bloomberg it’s assessing damages and has paused operations.

Bunge Ltd. has temporarily suspended operations at its terminal next to CAP even though the facility was spared in the fire, the company said in an email. Exports haven’t been impacted and halted activities may resume after an assessment, Bunge added.

The disruption of shipments comes at a time when Brazilian ports are crowded, with the country in the midst of exporting bumper crops of soybeans, corn and sugar. Ships are waiting much longer than usual to load, especially after recent rains interrupted loadings.

Wait times at the nation’s two largest ports were already trending above previous years, according to shipping agency Alphamar Agencia Maritima. Vessels were waiting an average of 64 days to dock in Paranagua as of Oct. 26, compared with 11 days a year earlier. For Santos, Brazil’s biggest port, the wait time is averaging 19 days, versus three days in 2022.

About 400 meters (1,312 feet) of conveyor belt at CAP terminal were destroyed, according to preliminary information provided by the port authority to shipping agency Williams Brazil. Activities at a berth near the terminal were stopped during the weekend for safety concerns but have resumed, the port authority said.

The affected terminal was loading soybeans from Cargill Inc., shipping agency Cargonave Group said. Cargill confirmed the terminal was used by the company, adding its cargo was not heavily impacted and the shipment in progress at the time of the incident could be completed safely.

Malaysia Oct. Palm Oil Exports +6.6% M/m: Intertek

Following is a summary of Malaysia’s Oct. palm oil exports according to Intertek Testing Services.

  • Total exports for Oct. 2023: 1.385m tons
  • Crude palm oil exports: 360,005 tons, 26.0% of total
  • EU led all destinations for total exports: 341,715 tons

Nitrogen Steady Amid Worry Over Gas Supply

India, the world’s largest urea buyer, bought 1.65 million metric tons in its October tender, turning sentiment bearish as prices were below the previous tender. China is expected to participate, exporting 200,000-400,000 metric tons despite a 3Q surge that had government officials reconsidering an export ban. Chinese anthracite coal fell to 1,200 yuan/mt, down 13% from the 3Q high despite the pending winter heating season. Urea operating rates there averaged 80% in October, the highest this year, in response to rising margins. Egyptian nitrogen producers, 10% of the traded market, reportedly received a letter that their gas supply will be reduced on lower imports from Israel, supporting firmer prices.

Scramble for Inputs Keeps Nitrogen Markets Steady

The global nitrogen market was steady amid another urea tender from India and rising European natural gas prices. The US autumn fertilizer season is set to kick off as harvest nears completion and soil temperatures drop. Input scarcity is keeping nitrogen production rates low in Europe, while falling energy prices in China are sending the pace of output to new highs.

 

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