Global Ag News for Sept 12.23

TOP HEADLINES

Argentina’s domestic soybean sales soar after federal currency boost

Soybean sales in Argentina totaled almost one million metric tons in the last seven days, the Buenos Aires grains exchange (BdeC) said on Monday, as farmers take advantage of a federal price-boosting initiative.

The figure is well above the nearly 240,000 tons of soybeans sold over the last week of August across the South American country, which is one of the world’s largest exporters of processed soy oil and meal.

The high figure follows last week’s federal government decision to open a loophole in its capital control to allow grains exporters to freely use a quarter of their foreign currency income to buy soybeans.

The move, which comes after a historic drought halved harvests last season, aims to encourage more exports to bring in much needed dollars to the South American nation.

“Since the export increase program was announced, negotiated soybean quantities have reached 951,211 tons,” the exchange said in a report.

Domestic soybean prices have risen by more than 25,000 pesos ($71) to reach more than 155,000 pesos ($443) per ton since the program’s launch, according to the exchange.

Argentina’s 2022/23 soybean harvest was down 53% from the previous year at just 20 million tons, according to the Rosario Stock Exchange (BCR), due to the impacts from the drought.

Last week, the BCR estimated some 7 million tons of the 2022/23 harvest have yet to be sold.

FUTURES & WEATHER

Wheat prices overnight are down 4 3/4 in SRW, down 4 1/4 in HRW, up 2 1/4 in HRS; Corn is down 1 3/4; Soybeans down 5 1/2; Soymeal down $0.70; Soyoil down 0.35.

For the week so far wheat prices are down 14 3/4 in SRW, down 12 1/2 in HRW, down 1 3/4 in HRS; Corn is up 1; Soybeans up 1 3/4; Soymeal up $2.40; Soyoil down 0.28.

For the month to date wheat prices are down 22 1/4 in SRW, down 7 3/4 in HRW, up 2 1/4 in HRS; Corn is up 5 3/4; Soybeans down 5 1/4; Soymeal up $0.20; Soyoil down 2.36.

Year-To-Date nearby futures are down 29.6% in SRW, down 19.1% in HRW, down 20.8% in HRS; Corn is down 30.5%; Soybeans down 11.0%; Soymeal down 13.9%; Soyoil down 1.0%.

Chinese Ag futures (NOV 23) Soybeans up 21 yuan; Soymeal down 14; Soyoil down 42; Palm oil down 122; Corn down 11 — Malaysian Palm is down 25.

Malaysian palm oil prices overnight were down 25 ringgit (-0.67%) at 3688.

There were changes in registrations (15 HRW Wheat). Registration total: 3,005 SRW Wheat contracts; 741 Oats; 0 Corn; 0 Soybeans; 67 Soyoil; 85 Soymeal; 402 HRW Wheat.

Preliminary changes in futures Open Interest as of September 11 were: SRW Wheat up 2,856 contracts, HRW Wheat up 1,874, Corn up 3,647, Soybeans up 889, Soymeal up 55, Soyoil down 1,425.

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

Central/Southern Plains: Scattered showers through Friday. Temperatures near to below normal Tuesday-Friday. Outlook: Scattered showers Saturday. Mostly dry Sunday-Wednesday. Temperatures near to below normal Saturday-Sunday, near to above normal Monday-Wednesday.

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

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

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

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

The player sheet for Sept. 11 had funds: net sellers of 5,000 contracts of SRW wheat, buyers of 1,000 corn, sellers of 4,000 soybeans, buyers of 2,000 soymeal, and  buyers of 500 soyoil.

TODAY

TENDERS

• SOYMEAL SALES: The U.S. Department of Agriculture confirmed private sales of 185,000 metric tons of U.S. soybean cake and soymeal to the Philippines for delivery in the 2023/24 marketing year.
• SOYMEAL TENDER: Iranian state-owned animal feed importer SLAL issued a tender to purchase up to 120,000 metric tons of soymeal from Brazil, Argentina or India. The deadline for submission of price offers is Sept. 13
• CORN TENDER: Iranian state-owned animal feed importer SLAL issued a tender to purchase up to 180,000 metric tons of animal feed corn from Brazil, Europe, the Black Sea region, Russia or Ukraine. The deadline for submission of price offers is Sept. 13
• WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy a total of 118,490 metric tons of food-quality wheat from the United States, Canada and Australia in a regular tender that will close on Thursday.
• WHEAT TENDER: Leading South Korean feedmaker Nonghyup Feed Inc. (NOFI) has issued an international tender to purchase up to 130,000 metric tons of animal feed wheat.

PENDING TENDERS

• WHEAT TENDER: A Syrian state grains agency issued an international tender to purchase and import 200,000 metric tons of soft milling wheat.
• RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 21,700 metric tonnes of rice all to be sourced from China.
• FEED WHEAT AND BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said it will seek 60,000 metric tons of feed wheat and 20,000 tons of feed barley to be loaded by Dec. 31, and arrive in Japan by Feb. 29, via an auction to be held on Sept. 13.

USDA CROP PROGRESS: Corn Conditions 52% G/E, Soybeans 52%

Highlights from the report:

• Corn harvest 5% vs 5% a year ago
• Corn 52% G/E vs 53% last week, and 53% a year ago
• Corn dented 82% vs 67% last week, and 75% a year ago
• Corn dough 97% vs 93% last week, and 95% a year ago
• Corn mature 34% vs 18% last week, and 24% a year ago
• Soybeans 52% G/E vs 53% last week, and 56% a year ago
• Soybean drop leaves 31% vs 16% last week, and 20% a year ago
• Spring wheat harvest 87% G/E vs 74% last week, and 83% a year ago
• Winter wheat planted 7% vs 1% last week, and 9% a year ago
• Cotton 29% G/E vs 31% last week, and 33% a year ago
• Cotton harvested 8% vs 8% a year ago
• Sorghum 44% G/E vs 44% last week, and 20% a year ago

US Inspected 624k Tons of Corn for Export, 310k of Soybeans

In week ending Sept. 7, according to the USDA’s weekly inspections report.

• Corn: 624k tons vs 483k the previous wk, 474k a yr ago
• Soybeans: 310k tons vs 407k the previous wk, 342k a yr ago
• Wheat: 406k tons vs 318k the previous wk, 758k a yr ago

US Corn, Soybean, Wheat Inspections by Country: Sept. 7

Following is a summary of USDA inspections for week ending Sept. 7 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 125k tons of the 310k total inspected
• China was the top destination for corn inspections, Japan led in wheat

China Boosts Outlook for Soy Imports on Feed Demand: CASDE

China raised estimates for 2023/24 soybean imports to 97.25m tons, up 3.03m tons from a forecast last month, on robust demand from the livestock sector, according to a report from the agriculture ministry.

• The volume of soybean crushed in the 2023/24 year seen at 97.78m tons, up 2.78m tons from the previous forecast, China Agricultural Supply & Demand Estimates show
  • Increase mainly due to expectation that pig farming margins will gradually improve
• Soybean imports for 2022/23 estimated at 99.86m tons, up 4.66m tons from the previous forecast
• Edible oils production estimate in 2023/24 raised to 30.25m tons, up from 29.7m tons, on higher volume of imported soybeans crushed
• Estimate of corn for animal feed in 2023/24 raised to 191m tons
• Corn production estimate in 2023/24 increased to 284.94m tons on higher planting acreage, following a recent survey
• Overall weather conditions in corn production areas in the northern and northeastern regions were good during August, with typhoon rains improving soil moisture levels and helping growth
• NOTE: Ministry said in its report released in August that heavy rains had flooded some low-lying corn fields

Brazil farmers harvest 93% of 2023 second corn crop -AgRural

Brazilian farmers had harvested 93% of the area planted for their second corn crop in the center-south region by Sep. 07, consultancy AgRural said on Monday, up 5 percentage points from the previous week.

Work in the fields still lags behind the previous season, when at the same time farmers had already concluded the harvest, the consultancy said in a statement.

Brazil, Paraguay clash with Argentina over grains waterway tolls

Brazil, Paraguay, Bolivia and Uruguay have urged Argentina to stop applying tolls for ships and barges carrying grains and other exports, saying it restricts navigation on a key river channel.

The four countries issued a joint statement late on Sunday blasting as “unilateral and arbitrary” Argentina’s decision to seize a barge from Mercurio Group, a Paraguayan shipping company, to collect a toll, adding its actions could affect supply and prices.

The barge was released on Monday after paying the toll, a company spokesperson told local radio.

Argentine authorities say tolls on the Paraguay-Parana waterway, a key transport route to the sea for inland areas of Paraguay, Bolivia and south Brazil, are needed to maintain the 3,400 kilometer (2,110 mile) channel that ends at Buenos Aires.

Argentina’s energy minister is set to meet with Paraguay’s foreign minister later on Monday to address the matter.

Argentina, which saw its recent soy and corn harvests battered by drought, has imported over 7 million metric tons of soybeans in the first seven months of this year, 51% from Paraguay and 45% from Brazil, according to official data.

Paraguay recently announced it will go to the Mercosur trade bloc Permanent Review Court to resolve the dispute.

Brazil farmers harvest 93% of 2023 second corn crop as soy planting starts -AgRural

Brazilian farmers had harvested 93% of the area planted for their second corn crop in the center-south region by Sep. 07, consultancy AgRural said on Monday, adding that soybean planting has begun in some places.

The harvested area grew 5 percentage points from the previous week, however, work in the fields still lags behind the previous season, when at the same time farmers had already concluded the harvest, the consultancy said in a statement.

Planting for the first crop of the 2023/24 corn season reached 17% in the center-south region, in line with the figure reported this time last year, AgRural said.

Soybean planting for Brazil’s 2023/24 crop has begun in isolated areas of Mato Grosso and Parana states, it added, without providing the percentages because the process is still in very early stages.

The consultancy said the first figures should be released within a week or two.

AgRural also estimated a 3% annual increase in the soybean planted area, to 45.4 million hectares, amounting to a record 164 million metric tons.

Russia Raises 2023 Grain Harvest Estimate to 130M Tons, IFX Says

Russia’s agriculture ministry raised its 2023 grain harvest forecast to 130m tons from 123m tons, Interfax reported, citing comments from minister Dmitry Patrushev at the Eastern Economic Forum in Vladivostok.

Polish Government to Extend Ban on Ukraine Grain Imports

Poland will extend its ban on imports of grain from Ukraine after the current European Union restrictions expire on Friday, raising tensions with its war-torn eastern neighbor and Brussels.

The government in Warsaw will approve the decision on Tuesday, Agriculture Minister Robert Telus said in a radio interview. “We’re convinced that the EU is wavering and will allow for the extension” of the current restrictions “but if it doesn’t, then we’re going to act tough because it’s in the interest of Polish farmers.”

Earlier this week, Ukrainian Deputy Economy Minister Taras Kachka warned that Kyiv will file a complaint at the World Trade Organization if Poland introduces a unilateral ban on Ukrainian grain. The government in Warsaw will still allow for the transit of Ukraine grain through its territory to the ports on the Baltic Sea or to be sold elsewhere in the EU.

The decision comes little more than a month before a parliamentary election on Oct. 15. Farmers are an important constituency for the ruling Law & Justice party, which is fighting to stay in power for a third term. The glut of grain imports on the domestic market sparked protest earlier this year.

Ukraine Winter-Grain Sowing Reaches 249k Hectares: Ministry

Ukrainian farmers have planted 249,000 hectares of winter-grain — including 228,600 hectares of wheat — so far for the 2024 harvest, according to a statement from the agriculture ministry.

• Winter-rapeseed sowing stands at 905,900 hectares
• This compares with 141,000 hectares of winter-wheat and 841,000 hectares of rapeseed at a similar time a year earlier, the ministry’s website shows
• Barley sowing stands at 10,800 hectares, versus 7,100 hectares a year ago

 

Cresud Eyes Wider Argentina Crop Planting After Biblical Drought

Cresud plans to increase the acreage it plants with crops in Argentina’s 2023-24 season as El Nino portends better weather after what the company described as the worst drought in 100 years, executives said on an earnings call.

• Crop area would increase by 6%-7%, reaching a record, after last season’s 283,000 hectares (699,000 acres)
  • Plans to reduce the acreage it rents to other farmers to instead incorporate the land into its own planting portfolio
  • As El Nino stamps its mark, rains are slowly returning, which should mean “a more normal year of yields”
• Sees profit margins normalizing thanks to lower costs for inputs like fertilizer, even with the expectation for lower crop prices
• Optimism tempered by the uncertainty of Argentine politics, with an election this year that could bring big regulatory and economic changes
• Plans to keep purchasing farmland in Argentina if the right opportunities come along

WHEAT/CEPEA: Brazilian wheat output may set another record

Wheat prices are fading in Brazil, and liquidity is low. In general, domestic sales tend to increase only when the harvest is more advanced, since the output is once again forecast to set a record.

Data released by Conab last week estimated the Brazilian wheat output to set another record, forecast at 10.81 million tons 3.9% higher than that estimated in August and 2.5% (+263.1 thousand tons) up from the record set last season. The area allocated to wheat crops in Brazil is estimated to be 11.8% larger than that last season, at 3.45 million hectares. However, productivity is forecast at 3.13 tons/hectare, 8.3% lower than that from 2022 (3.42 tons/hectare).

As for imports, Conab has reduced estimates again, by 200 thousand tons compared to that previously estimated, to 5 million tons (between August 2023 and July 2024). The domestic availability of wheat is forecast to be high, at 16.55 million tons, 4.9% higher than that last season.

Consumption in Brazil is estimated at 12.64 million tons, 2% higher than that forecast for the previous season (Aug/22 – Jul/23). Exports estimates were kept at 2.6 million tons. Thus, ending stocks, in July/24, would total 1.31 million tons.

As for the current wheat prices in Brazil, they are still fading. Cepea surveys show that, between September 1-8, the prices paid to wheat farmers dropped a steep 6.22% in Paraná and 4.44% in Santa Catarina, but rose 2.13% in Rio Grande do Sul. In the wholesale market (deals between processors), values decreased 3.49% in PR, 1.87% in São Paulo, 0.93% in RS and 0.63% in SC. In the same period, the US dollar increased 0.95% against the Real, closing at BRL 4.985 on September 8th.

INTERNATIONAL TRADES – According to data from Secex (Foreign Trade Secretariat), Brazil imported 279.53 thousand tons of wheat in August, 33.2% less than that imported in July and 47.9% below the volume from Aug/22. Over the past 12 months, imports totaled 4.25 million tons. In August, 35.93% of the total imported came from Argentina; 34.26%, from Russia; 19.96%, from Uruguay; 5.82%, from Paraguay; and 4.03%, from the United States.

As for exports, last month, Brazil shipped 1.3 thousand tons of wheat, more than the volume exported in July (1.27 thousand tons) and up from that shipped in Aug/22 (871.96 tons). Over the past 12 months, Brazil exported 2.7 million tons of wheat, 2.09 million tons in 2023.

CROPS – According to Conab, by September 3rd, 11.7% of the national wheat output had been harvested.

South America Neighbors Slam Argentina River Tax On Paraguay

• South American countries ask Argentina to suspend transit fees
• Paraguay President takes hardline with Argentina on toll, debt

Argentina’s neighbors sharply criticized its tax against commercial boats traveling through the key Parana River, a rare rebuke from the country’s allies amid worsening relations with Paraguay.

Brazil, Uruguay and Bolivia joined Paraguay in decrying a “unilateral and arbitrary” tax that Argentina started charging this year as a violation of international law, according to a joint statement Sunday. It’s an unusual criticism in particular from Brazil and Bolivia, governments that tend to side with Argentina’s left-wing Peronist government on foreign policy.

Argentina’s Foreign Ministry noted that Energy Secretary Flavia Royon met with Paraguay Foreign Minister Ruben Ramirez Monday in the country’s capital, Asuncion, but declined to comment further. The Argentine government has justified the tax in the past to fund waterway dredging and maintenance.

Paraguay’s President Santiago Peña faces his first major foreign policy test less than a month after taking office amid an escalating dispute with Argentina. Shipments through the Parana River, which leads to the Atlantic Ocean, account for about 80% of Paraguay’s foreign trade, making affordable access an economic lifeline.

Peña said his government will fight the river tolls in court and cease backing Argentina at multilateral lenders due to about $150 million in arrears with the Yacyreta hydroelectric dam jointly owned by both countries.

“We aren’t going to provide our support at any multilateral organizations, and we are going to inform about these debts Argentina owes Paraguay,” Peña said at a press conference Sept. 8.

Argentina’s deepening economic crisis is spilling over into neighboring countries. Uruguay and Paraguay are losing consumer spending to Argentina as their citizens flood across the border to buy cheap consumer staples. Hard currency shortages have led the cash-strapped Alberto Fernandez administration to restrict imports from its regional trade partners.

The transit fee of $1.47 per metric ton is especially sensitive for landlocked Paraguay, which operates one of the world’s largest fleets of river barges. Argentina has started to aggressively collect, detaining a vessel carrying 30 million liters of fuel to Paraguay earlier this month.

”The seizure of Paraguayan barges with Paraguayan products is a tremendous problem,” Peña said.

France Increases Corn Crop Outlook, Cuts Soft-Wheat: Ministry

This year’s corn harvest is now seen at 11.5 million tons, above an August estimate of 11.2 million tons, the French agriculture ministry said in a report.

• Rains in late July and early August benefited yields
• Still, production remains 13% below the prior five-year average; crop last year was 10.9m tons
• Soft-wheat crop estimate cut to 35.1m tons from 35.6m; compares with 33.7m last year
• Barley left about steady at 12.2m tons
• Rapeseed trimmed slightly to 4.3m tons

India’s Winter Crop Yield May Be Hurt by Low Reservoir Levels

Monsoon season has been disappointing, with rains at 10% below normal so far from June 1 to Sept. 10 and a record 36% below average in August, Nomura analysts say in a note. Reduced rainfall is affecting reservoir levels, which are at 62% of the total live capacity as of Sept. 9, sharply below the average of 78% over the past five years, they say. Reservoir levels are lowest in the southern and eastern parts of the country, they note. Given the winter crop’s heavy reliance on irrigation, lower water levels could increase the heat sensitivity of crops such as wheat and reduce yields, they add.

Australia’s BOM: Positive IOD Likely; El Nino Alert Continues

Australian Bureau of Meteorology says that El Nino alert continues, with El Nino development likely during spring.

• The Indian Ocean Dipole index is +1.13 °C for week ending Sept. 10
  • This is its fourth week above the positive IOD threshold (+0.40 °C), with the recent high values (above +1.0 °C) indicating an event is very likely
  • A positive IOD typically decreases spring rainfall for central and south-east Australia and can increase the drying influence of El Nino
• A weakening Madden–Julian Oscillation pulse recently moved into the western Maritime Continent
  • Most models forecast this pulse to become indiscernible in the coming days

 

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