Global Ag News for Sept 10.24

TOP HEADLINES

Consumers Unwilling to Pay Up for Sustainable Food, JBS Says

Consumers are unwilling to pay a premium for food that is produced under higher environmental standards, posing a challenge for producers, according to the top executive at the world’s largest meat company.

“We can’t assume that the consumer will pay that bill,” JBS SA Chief Executive Officer Gilberto Tomazoni said during the Global Business Forum for the G-20 group. “We need to increase productivity to lower the cost of food and make it more accessible.”

Food producers have been under mounting pressure to reduce their contribution to climate change by reducing deforestation and lowering the use of synthetic nitrogen fertilizers. Agriculture accounts for more than one-fifth of global carbon emissions, according to the Intergovernmental Panel on Climate Change.

The food industry will need as much as $350 billion a year until 2030 to fund the adoption of more sustainable practices, and a system needs to be created to make sure farmers are paid for their “environmental services,” Tomazoni said.

 

FUTURES & WEATHER

Wheat prices overnight are down 1/2 in SRW, up 1/4 in HRW, down 1/2 in HRS; Corn is down 1 1/2; Soybeans down 12; Soymeal down $3.70; Soyoil down 0.26.

For the week so far wheat prices are up 1 1/4 in SRW, down 1 1/4 in HRW, down 7 1/2 in HRS; Corn is down 1/4; Soybeans up 1; Soymeal down $3.00; Soyoil up 0.60.

For the month to date wheat prices are up 16 1/2 in SRW, up 10 3/4 in HRW, up 5 3/4 in HRS; Corn is up 4 3/4; Soybeans up 6; Soymeal up $8.30; Soyoil down 1.79.

Year-To-Date nearby futures are down 11.5% in SRW, down 10.5% in HRW, down 20.0% in HRS; Corn is down 18.5%; Soybeans down 22.7%; Soymeal down 18.4%; Soyoil down 13.0%.

Chinese Ag futures (NOV 24) Soybeans down 7 yuan; Soymeal down 25; Soyoil up 44; Palm oil up 34; Corn down 23 — Malaysian Palm is down 12.

Malaysian palm oil prices overnight were down 12 ringgit (-0.31%) at 3883.

There were changes in registrations (5 HRW Wheat). Registration total: 220 SRW Wheat contracts; 2 Oats; 235 Corn; 230 Soybeans; 453 Soyoil; 100 Soymeal; 5 HRW Wheat.

Preliminary changes in futures Open Interest as of September 9 were: SRW Wheat down 1,592 contracts, HRW Wheat down 1,815, Corn up 5,694, Soybeans down 6,639, Soymeal down 4,507, Soyoil down 125.

 

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

 

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

 

Midwest:  West: Mostly dry through Thursday. Scattered showers south Friday. Temperatures near to above normal Tuesday, above normal Wednesday-Friday. East: Mostly dry through Thursday. Scattered showers south Friday. Temperatures near to above normal Tuesday, above normal Wednesday-Friday. Outlook: Isolated to scattered showers Saturday-Wednesday. Temperatures above normal Saturday-Wednesday.

 

The player sheet for Sept. 9 had funds: net buyers of 1,000 contracts of SRW wheat, buyers of 4,000 corn, buyers of 6,500 soybeans, buyers of 1,000 soymeal, and buyers of 4,000 soyoil.

 

TENDERS

• SOYBEAN SALE: Exporters sold 132,000 metric tons of U.S. soybeans to China for 2024/25 delivery, the U.S. Department of Agriculture said.
• RUSSIAN WHEAT EXPORT PRICES: Russian wheat export prices were little changed last week amid weak demand as unfavourable weather conditions force analysts to lower their crop forecasts.
• UKRAINE WHEAT EXPORT FORECAST: Analyst APK-Inform increased Ukraine’s 2024/25 July-June wheat export forecast to 13.8 million metric tons from the previous 13.4 million tons, the consultancy said.

 

PENDING TENDERS

• CORN TENDER: Algerian state agency ONAB issued an international tender to purchase up to 120,000 metric tons of animal feed corn sourced from Argentina or Brazil
• VEGETABLE OILS TENDER: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), said it was seeking 30,000 metric tons of imported soybean oil and 10,000 tons of imported sunflower oil in an international purchasing tender for arrival Nov. 20-Dec. 5 and/or Dec. 10-25. The deadline for offers is Sept. 10.
• FEED WHEAT AND BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said it will seek 65,000 metric tons of feed wheat and 25,000 tons of feed barley to be loaded by Dec. 31 and arrive in Japan by Feb. 27 via a simultaneous buy and sell (SBS) auction to be held on Sept. 11.
• WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy up to 120,000 metric tons of milling wheat that can be sourced from optional origins.

 

 

 

USDA CROP PROGRESS: Corn Conditions 64% G/E, Soybeans 65%

Highlights from the report:

• Corn 64% G/E vs 65% last week, and 52% a year ago
• Soybeans 65% G/E vs 65% last week, and 52% a year ago
• Winter wheat planted 6% vs 2% last week, and 5% a year ago
• Corn harvest 5% vs 4% a year ago
• Spring wheat harvest 85% G/E vs 70% last week, and 83% a year ago
• Cotton 40% G/E vs 44% last week, and 29% a year ago
• Cotton harvested 8% vs 7% a year ago
• Sorghum 48% G/E vs 50% last week, and 44% a year ago

 

US Inspected 836k Tons of Corn for Export, 354k of Soybeans

In week ending Sept. 5, according to the USDA’s weekly inspections report.

• Soybeans: 354k tons vs 502k the previous wk, 374k a yr ago
• Corn: 836k tons vs 966k the previous wk, 636k a yr ago
• Wheat: 587k tons vs 603k the previous wk, 407k a yr ago

 

Ikar Lowers 2024 Russia Wheat Crop Outlook to 82.2M Tons

The outlook was cut by 1.6m tons from prior forecast due to “very adverse weather in Volga, Urals, and Siberia,” IKAR General Director Dmitry Rylko said by email.

• Corn production outlook cut by 1.1m tons to 12m tons, the lowest since 2018
• Total grain production outlook cut by 3.5m tons to 125m tons
• Wheat export potential cut by 0.5m tons to 44m tons; total grain export potential cut by 2m tons to 53m tons
• Sunseed crop seen at 15.45m tons, compared to 17.3m tons in 2023, although there “remain many risks and uncertainties for the oilseed crops”

 

Brazil’s first corn planting 15% done, soy not started, AgRural says

Brazilian farmers in the country’s key center-south region had planted 15% of the expected area for the 2024/25 first corn crop as of last Thursday, consultancy AgRural said on Monday, up from 8% a week earlier but short of the previous season’s 17%.

Brazil plants corn all year round and the first crop usually represents about 20% of national output, while the second crop – which is planted later, after soybeans are harvested on the same fields – accounts for some 75%.

According to AgRural, Brazil’s soybean planting for the 2024/25 season has not yet started due to low soil moisture and dry and hot weather.

“With little rain on the radar and very high temperatures, planting equipment tends to remain in the sheds until more consistent signs of rain appear,” the consultancy said in a statement.

Last week, AgRural said it expected the area planted with soybeans in Brazil to grow at its slowest pace in almost two decades in the 2024/25 season.

Brazil is the world’s largest soybean producer and exporter.

 

Cresud Says South America Crop Acreage to Expand by at Least 8%

Crop acreage in the fiscal year that began in July will jump to more than 300,000 hectares (~740,000 acres) in South America, Buenos Aires-based Cresud’s CEO Alejandro Elsztain said during an earnings call.

• 277,000 hectares were planted in the fiscal year that ended June 30
• Cresud’s New York shares climbed 1.1% on Monday

 

China Aug. Soybean Imports 12.144m Tons: Customs

General Administration of Customs says on website.

• Soybean imports YTD rose 2.8% y/y to 70.478m tons
• Edible vegetable oil imports in Aug. 634,000 tons
  • Edible vegetable oil imports YTD fell 23.0% y/y to 4.764m tons
• Meat (including offal) imports in Aug. 565,000 tons
  • Meat (including offal) imports YTD fell 13.9% y/y to 4.4m tons
• Fertilizer exports in Aug. 4.036m tons
  • Fertilizer exports YTD rose 4.4% y/y to 19.713m tons

 

China’s Soy Imports Surge to Record on Cheap Brazilian Beans

• Inbound shipments of oilseed at 12.14 million tons in August
• Nation’s stockpiles have swelled to highest level since 2021

China’s soybean imports rose to a record last month after the nation snapped up cheaper supplies from Brazil, exacerbating a surplus.

Inbound shipments were at 12.14 million tons in August, 23% higher than the previous month, according to customs data released on Tuesday. That’s added to inventories which are already at the highest level in about three years, following weaker demand from the nation’s massive livestock sector.

China is the world’s top importer of soybeans, with the oilseed typically crushed into cooking oil and animal feed, particularly for pigs. The nation’s swelling stockpiles are likely to curb appetite for US beans later this year.

China’s soybean imports were at about 70.48 million tons over the first eight months of 2024, 2.8% higher than the same period last year. Domestic stockpiles of soymeal — used as animal feed — have also swelled significantly, and are currently near the highest level since early 2016.

The most-active soymeal futures contract on the Dalian Commodity Exchange fell almost 2% on Tuesday, and prices are about 8% lower this year.

 

Malaysian Palm Oil Stockpiles Hit Six-Month High on Weak Exports

• Reserves climbed 7.3% to 1.88 million tons in August: MPOB
• Exports slumped 9.7% from a month ago, output increased 2.9%

Palm oil inventories in Malaysia rose to their highest level since February as exports from the world’s second-biggest grower dropped and production advanced.

Swelling reserves in the Southeast Asian nation could add further pressure on benchmark prices, which have fallen in six out of seven sessions and slumped almost 12% since a high in April.

Stockpiles jumped 7.3% from a month earlier to 1.88 million tons in August, according to data released by the Malaysian Palm Oil Board. That was the highest level in six months and above the median estimate in a Bloomberg survey published last week.

Malaysian exports declined 9.7% to 1.53 million tons, against the survey estimate of 1.5 million tons. Crude palm oil production rose 2.9% to 1.89 million tons, the highest since October.

 

Canada Wheat Stocks on July 31 Fell 18.5% From Year Ago

Stocks of Canadian wheat as of July 31 fell to 4.58m tons vs 5.63m in the same period last year, according to Statistics Canada.

• Durum wheat rose to 0.58m tons vs. 0.57m
• Canola rose to 3.09m tons vs 1.85m in the same period last year

 

WHEAT/CEPEA: Imports are increasing in 2024, despite high prices

In spite of the fact that prices of wheat to import are at high levels, acquisitions are increasing this year. This scenario is related to the low availability, especially of the high-quality cereal.

Data from Secex indicate that the volume of wheat imported by Brazil in 2024 (from January to August) totaled 4.556 million tons, the biggest amount for the period since 2020 and 9% above that registered in the entire year of 2023 (4.18 million tons).

In 12 months (from September/23 to August/24), imports totaled 5.97 million tons, the biggest volume for the period since August/22.

In August/24 alone, imports totaled 545.46 thousand tons, almost the double of the volume purchased in August/23 (277.99 thousand tons).

Based on data from Conab (Brazil’s National Company for Food Supply), between September 2 and 6, the import parity price for the wheat from Argentina delivered to Paraná state was at USD 276.32/ton. Considering the average of the US dollar in that period, at BRL 5.6107, the wheat imported was sold at BRL 1,550.34/ton, while for the Brazilian wheat traded in Paraná, the average was at BRL 1,490.30/ton, according to data from Cepea. In Rio Grande do Sul, the price of the product from Argentina closed at USD 258.93/ton, which accounts for BRL 1,452.79/ton – against BRL 1,374.38/ton on the average of the state calculated by Cepea.

CROPS – The weather continues affecting crops in Paraná, but it is relatively favorable in other areas in the South. In general, the harvesting continues to advance in Brazil, reaching 11.6% of the area in Brazil up to last week, according to data from Conab.

According to data from Cepea, between August 30 and September 6, the prices paid to wheat farmers (over-the-counter market) moved down 0.14% in Rio Grande do Sul, but increased 1% in Santa Catarina and 1.9% in Paraná. In the wholesale market (deals between processors), quotations dropped 1.3% in Rio Grande do Sul and 1.4% in São Paulo, remained stable in Santa Catarina, and rose 0.12% in Paraná. Dollar quotations decreased 0.97% against Real in the same period, at BRL 5.595 on September 6.

BYPRODUCTS – From September 2-6, values of wheat bran in bags upped 5% and 2.85% for the product in bulk.

 

Norway’s Wealth Fund Boosts Bet on Brazil Top Biofuel Producer

Oslo-based Norges Bank Investment Management raised its stake in Brazilian sugar and biofuels producer Raizen SA and now owns 5.02% of non-voting shares, the company said in a filing.

• Before crossing above the 5% threshold, Norges Bank held shares equal to 4.99% of the total, the fund said in a correspondence sent to Raizen
• Raizen is Brazil’s top sugar company and the world’s largest maker of ethanol from sugar cane

 

Bunge Signals Viterra Deal Is Nearing With Offer to Swap Bonds

Bunge Global SA signaled its $8.2 billion acquisition of Viterra is inching closer, with the US agribusiness offering to replace debt previously issued by the Glencore Plc-backed firm.

The $1.95 billion debt-exchange offer comes after an initial delay to close the deal by August and is a sign the buyout is likely to be completed “over the coming months,” S&P Global Ratings said in a report. Regulatory approval is still pending in countries including Canada, where both companies have significant operations.

“We believe the announced transaction signals management’s increased confidence that the transaction will close sometime in the second half of 2024,” Chris Johnson, an analyst at S&P, said in the report.

Bunge, the ‘B’ in the ABCD storied quartet of agricultural commodity traders that have dominated crop markets for more than a century, agreed to acquire Viterra in June 2023. The deal is expected to create a $25 billion behemoth capable of competing with the industry’s elite: Cargill Inc. and Archer-Daniels-Midland Co., the ‘A’ and the ‘C.’ Louis Dreyfus Co. represents the ‘D.’

Bunge has recently allayed competition concerns in Europe, agreeing to divest Viterra’s entire oilseeds business in Hungary and Poland. There also are concerns in Canada, where the antitrust watchdog said the deal will have “substantial anti-competitive effects” on agricultural markets.

“We continue to believe the combined operations in Canada do not have significant geographic overlap suggesting material conditional divestitures may not be required,” S&P said, adding it had raised Bunge’s outlook to positive, the first step toward lifting the company’s ratings.

The improved outlook comes even as Viterra has seen income halve this year. The company made a profit of $70 million in the first six months of 2024, Bunge said in a regulatory filing on Monday. That’s a drop from $141 million a year earlier.

A downturn in the prices of everything from corn to soybeans has hit profits for all major crop traders. Viterra’s $600 million in notes due in 2031 gained 0.4% to 91 cents on the dollar.

 

Fertilizer Pricing Stable Even as Grain Prices Abate

Declining grain prices are making fertilizers less affordable as summer fill programs end and costs reset for autumn. India’s urea tender revealed lower prices than a month ago, with a two-month window to ship extending the softness into 4Q. Belarus potash exports have reached pre-sanctions level.

 

NOLA Urea Strengthens on India Tender

India’s latest urea tender saw 1.2 million metric tons (mt) offered at $340/mt cost-and-freight for the West Coast and $349.88 for the East Coast, down from the previous tender’s $350-$365. The high volume helped boost urea prices in New Orleans (NOLA) and Brazil, with NOLA trades at $308-$318 a short ton (st) from last week’s $303-$309, and Brazil offers jumping to $350-$360/mt from $340-$345. Ammonia prices increased $25/st in California, to $705/st delivered, with September phosphoric acid and ammonium polyphosphate prices also firming in the western US. Dry phosphate prices were slightly higher at NOLA and in Western Canada, yet lower in Brazil amid softer demand.

 

 

 

 

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