Global Ag News for Sept 16.24

TOP HEADLINES

India Slashes Wheat Stockpile Limits for Traders and Processors

The Indian government cut the limit on wheat stockpiles maintained by traders and big retailers by 33% to 2,000 tons to prevent hoarding, the food ministry said in a statement Friday.

• It also reduced the limit for wheat processors
• The order is applicable for the current financial year

 

FUTURES & WEATHER

Wheat prices overnight are down 6 1/4 in SRW, down 7 1/4 in HRW, down 8 1/4 in HRS; Corn is down 1 3/4; Soybeans down 1/4; Soymeal up $1.00; Soyoil down 0.02.

Markets finished last week with wheat prices up 19 3/4 in SRW, up 16 3/4 in HRW, up 20 1/2 in HRS; Corn is up 4 1/4; Soybeans down 12; Soymeal down $1.10; Soyoil down 1.57.

For the month to date wheat prices are up 37 in SRW, up 27 1/2 in HRW, up 26 3/4 in HRS; Corn is up 10 1/2; Soybeans up 6; Soymeal up $10.90; Soyoil down 3.10.

Year-To-Date nearby futures are down 6.3% in SRW, down 7.7% in HRW, down 13.3% in HRS; Corn is down 12.7%; Soybeans down 22.2%; Soymeal down 17.3%; Soyoil down 17.3%.

China and Malaysian markets are closed for holiday.

There were changes in registrations (-29 Corn, 2 Soybeans, -71 Soyoil). Registration total: 220 SRW Wheat contracts; 2 Oats; 180 Corn; 232 Soybeans; 382 Soyoil; 200 Soymeal; 5 HRW Wheat.

Preliminary changes in futures Open Interest as of September 13 were: SRW Wheat down 1,112 contracts, HRW Wheat up 1,110, Corn up 22,280, Soybeans up 5,449, Soymeal up 3,389, Soyoil up 7,865.

 

Northern Plains: A front brought a thin line of heavier rain in the eastern Dakotas on Friday with more scattered showers on Saturday, but many areas stayed dry over the weekend. Temperatures were largely hot as well. A system will develop in the region on Tuesday and widespread showers and thunderstorms are going to be likely as the storm spins through the region or just north in the Canadian Prairies through Thursday, possibly producing some areas of heavy rain that could interrupt the last bits of the wheat harvest, but could also reduce drought and favor immature corn and soybeans in the east.

 

Central/Southern Plains: A few showers moved through this weekend, but most areas stayed dry. A system to the north will send a front into the region on Wednesday, but it will be stalled out in the region through the end of the weekend. It could produce some areas of showers. A low-pressure center is likely to develop along it this weekend and produce more widespread precipitation, which may help with winter wheat establishment and any immature crops. But for those just starting to harvest or watching their crops mature, it could cause some delays.

 

Midwest: Some showers developed across western areas this weekend, but many areas stayed dry or saw light rain only. Some isolated showers will be possible both west and east, but many areas are going to stay dry. A front in the west will likely move east with showers later this weekend, with some heavier rain potentially for the northwest. A system may form along that front early next week with some additional showers across more of the region. Overall rainfall potential is pretty light for most areas outside of the northwest, where it could be heavy. Temperatures remain warm, helping crops to dry down and mature where rain is lower in coverage and intensity. Increasing dryness and drought has not been favorable for the winter wheat crop that is just starting to be planted.

 

Delta: Rain from the remnants of Francine remained in the region through the weekend, amounting to some heavy amounts and delays and potential quality issues for mature soybeans and cotton. Drought has likely been reduced in many areas. Any improvements on the Mississippi River have been limited and will be brief without significant precipitation farther upstream, especially in the Ohio Valley. Some showers continue Monday and possibly Tuesday, but then dry up for the rest of the week. The next chance for rain comes with a weak front moving through early next week.

 

Southeast: Francine’s remnants have been bringing some areas of heavy rain over the weekend, helping to reduce drought but also causing delays to harvest and potential quality issues for all crops. The remnants will continue some showers early this week, but a tropical low developing off the coast of the Carolinas will produce some heavy rain in the east. Its remnants may stick around the region into the weekend with continued showers.

 

Canadian Prairies: Some showers fell over the weekend, but most areas stayed dry. A system will develop in the Northern Plains on Wednesday, which will move north into the region by Wednesday and stick around through Thursday. Widespread showers are forecast and some areas will see heavy rain. Another system will likely move through this weekend with scattered showers and a stronger system and front may move through during the middle of next week. That could be followed by a significant burst of cooler air, though models disagree on that. Recent and continued rain will disrupt the harvest and drop quality for some wheat and canola that remains out in the fields. The rain will help with the ongoing drought, however.

 

Brazil: A front brought some heavier rain to Parana over the weekend, with lighter amounts in southern Brazil that end on Monday. Another burst of showers may move through Parana on Wednesday. A front moving up from Argentina will likely produce more showers later this week and weekend. But central Brazil continues to be extremely dry, in some of the worst drought to start off a season in portions of the region since corn and soybean growing has become popular. Wet season rainfall may be on track to start at the end of the month, but producers are going to have to wait for consistent rains to begin planting, which may be pushed back deeper into October. If that happens, that will put a crunch on the safrinha corn and cotton crops that will start to be planted in January and February.

 

Argentina: It was dry again over the weekend, a common theme for the start of corn planting, which has been significantly delayed already. A front will move through on Thursday and could make for some significant rainfall, but mostly for areas in the east with better soil moisture. Western areas are still very dry. More fronts are in line to move through this weekend and again next week, but the rainfall will need to be better for the western half of the country’s growing areas soon or further delays to corn planting will be likely and developing wheat will continue to suffer.

 

Europe: Scattered showers continued over the eastern half of the continent over the weekend with a system stalling there. The system will drift southwest into the Mediterranean early this week, continuing showers there in needed areas as winter wheat planting starts up. A new system may form in the west on Friday and continue with widespread showers moving eastward into next week. Rainfall would help to maintain or improve soil moisture, but could delay winter wheat planting if heavy.

 

Black Sea: Far western areas have seen meaningful rain over the last week while eastern Ukraine and western Russia in particular have been very dry as well as hot. A small system will be meandering in the Black Sea this week, but it will likely stay hot and dry in the region. We may see a big change to the pattern next week, but that is far out. Drought and heat are not making for very good conditions for winter wheat establishment, which has a very limited amount of time before frosts and freezes start to be a regular occurrence in October or early November.

 

Australia: Some showers scraped through far southeastern Australia over the weekend, but most areas stayed unfavorably dry. The state of Victoria is the only area likely to see rain this week and chances there are low as well. Additional rainfall is going to be needed with more of the crop reaching reproduction.

The player sheet for Sept. 13 had funds: net buyers of 8,000 contracts of SRW wheat, buyers of 9,000 corn, buyers of 4,500 soybeans, sellers of 1,500 soymeal, and sellers of 3,500 soyoil.

TENDERS

• SOYBEAN SALE: The U.S. Department of Agriculture confirmed private sales of 100,000 metric tons of U.S. soybeans for shipment to China in the 2024/25 marketing year. 

PENDING TENDERS

• CORN, BARLEY TENDER: Algerian state agency ONAB issued an international tender to purchase about 160,000 metric tons of corn and 35,000 tons of animal feed barley.
• RICE TENDER: Indonesian state purchasing agency Bulog issued an international tender to buy about 450,000 metric tons of rice

 

 

 

TODAY

CROP SURVEY: US August Soybean Crush Seen at 173.1M Bushels

Projections are based on a survey of seven analysts conducted by Bloomberg News on Sept. 12-13.

• Soybean crush seen 7.2% higher vs August of last year, and a decline of 5.4% vs a month ago
• Oil stocks at the end of last month seen at 1.362b lbs vs 1.25b a year earlier

 

NOPA Aug US soybean crush seen at 171.325 million bushels

The monthly U.S. soybean crush likely fell by more than 6% in August as processors idled plants for seasonal maintenance and repairs ahead of the 2024 harvest, analysts said ahead of a National Oilseed Processors Association (NOPA) report due on Monday.

NOPA members, who handle about 95% of all U.S. processed soybeans, were estimated to have crushed 171.325 million bushels last month, according to the average of estimates from nine analysts surveyed by Reuters.

If realized, it would be down 6.3% from the July crush of 182.881 million bushels but up 6.1% from the 161.453 million bushels in August 2023. It would also be the largest August crush on record, besting the prior mark of 168.085 million bushels set in 2019.

August is normally among the lightest crush months on the calendar because many processors idle facilities ahead of the fall harvest.

The average estimate implies a daily crush rate in August of 5.527 million bushels a day, which would be the slowest since last September.

Processors are anticipating having an ample supply of beans to crush in the coming months after the U.S. Department of Agriculture only slightly trimmed its forecast for a bumper 2024 U.S. soybean harvest.

Crush estimates for August ranged from 162.000 million to 178.000 million bushels, with a median of 173.000 million bushels.

The NOPA report is scheduled for release at 11 a.m. CDT (1600 GMT) on Monday.

Soyoil stocks held by NOPA members as of Aug. 31 were estimated at 1.356 billion lbs, based on estimates from seven analysts. If the estimate is realized, it would be down 9.5% from 1.499 billion lbs at the end of July and the smallest end-of-month supply since November. But it would be up 8.5% from the 1.250 billion lbs of oil held by NOPA members at the end of August last year. Oil stocks estimates ranged from 1.245 billion to 1.444 billion lbs, with a median of 1.350 billion lbs.

 

Russia/U.S. wheat exports surged in August while disappointing harvests reduced EU wheat supplies

Excessive rainfall in the west and persistent droughts in the Southeast reduced EU-27 wheat output to 125 million metric tons (MMT) according to LSEG agriculture research (vs 124 MMT by USDA), down 10 MMT from the previous year. The production losses lowered wheat supplies in the major EU exporting countries, including France, Romania and Bulgaria. Ukraine wheat supplies were also suppressed by the depleted stocks and less favorable production. Meanwhile, international buyers increased their purchases to take advantage of the 4-year low prices and to secure their wheat supply. Mounting concerns on EU and Black Sea supplies and strong demand have largely increased global wheat prices since late August. On the other hand, high production in the U.S., Canada, Australia and Argentina partially offset losses in the EU and Black Sea, capping wheat price increases.

In Russia, wheat supplies remain above the 5-year average but are below last year amid lower production. Due to less competition from EU-27, lower export tax and affordable prices, Russian exports reached a record high in August at 5.15 MMT according to LSEG trade flows, up 62% from July. The fast export pace persisted in September with 2.23 MMT of exports reported for the first 13 days. Total September exports may exceed 5.0 MMT again. Following the analysis of Russian wheat supply and demand, we maintained 2024/25 Russia wheat exports at 46.81 MMT, down 5 MMT from last season.

In Ukraine, Customs data showed that the country exported 18.4 MMT of wheat in 2023/24 (July/June). Starting from July 2024, Ukraine has exported 4.68 MMT of wheat as of September 13, compared to 2.50 MMT for last year’s same period, as reported by the Ministry of Agrarian Policy and Food of Ukraine. LSEG trade flows also tracked higher exports than those in the previous season. We increased 2024/25 Ukraine wheat exports to 14.6 MMT.

U.S. exports surged to 2.52 MMT in August, a 37% increase from the previous month. Outstanding sales for wheat totaled 4.62 MMT as of September 12, compared to 3.72 MMT for the year before. Sales primarily went to Mexico, Philippines, South Korea, Japan, Taiwan, EU-27 and other South American and Asian countries. We maintained 2024/25 U.S. wheat exports at 23.52 MMT, an approximately 4 MMT increase from the previous season.

Argentina accumulated exports during December-August totaled 6.37 MMT. Total exports for the 2023/24 season were maintained at 8.11 MMT.

Australia wheat exports stayed at a low level due to low stocks in August. The 2023/24 market year may end with 19.26 MMT of wheat exports, slightly below USDA’s September projection of 20 MMT. Moving ahead, wheat exports in the 2024/25 market year starting from October will increase to 24.48 MMT due to higher production prospects this year.

Customs data showed that Canada exported 25.01 MMT of wheat in 2023/24 (August/July). We forecast Canadian wheat exports in the new season (2024/25) will remain strong at 25.17 MMT based on production outlook of 34.22 MMT by LSEG agriculture research.

China wheat imports plummeted in July and August from the peaks during February-May. Especially the imports from France, the U.S. and Canada have dropped to the minimal levels. Little U.S. wheat sales to China have recently been reported. Australian wheat remains preferred by Chinese buyers.

 

Mato Grosso registers soybean planting only in a few irrigated areas, says Imea

Mato Grosso registered soybean planting for the 2024/25 crop in only a few irrigated areas this week, as it deals with dry and hot weather, like much of the country, said the superintendent of the Mato Grosso Institute of Agricultural Economics (Imea), Cleiton Gauer, on Friday.

“We did not disclose (planting data), we did not see large areas or large reports of sowing in the state. Very early, only (planting) in irrigated areas, and even then a very small portion,” Gauer told Reuters.

At the same time last year, planting in the country’s largest soybean-producing state was less than 1% of the projected area, according to Imea data collected by Reuters.

“We are waiting to see how things develop in the coming weeks,” Gauer added.

Soil moisture in Mato Grosso and Paraná, two of the three largest soybean-producing states in Brazil, is at its lowest level in 30 years, which does not provide favorable conditions for planting the oilseed, according to an assessment by EarthDaily Agro.

Weather conditions in Mato Grosso are only expected to improve from September 25th, with the arrival of some rain, according to projections, the remote sensing company using satellite images reported the day before.

Brazilian soybean farmers are cautious about starting sowing due to dry weather, the Center for Advanced Studies in Applied Economics (Cepea) said in an analysis on Friday.

But Cepea highlighted that the Center for Weather Forecasting and Climate Studies (Cptec) predicts rain in the coming days in parts of the South, Southeast and Central-West states of the country, which could create conditions to begin work in some areas.

Experts have recommended caution until the rains become more widespread, starting in October, especially in the Center-West.

The timing of sowing could affect the weather window for the second crop, whether corn or cotton. But analysts say a small portion of soybeans are planted in September, and only see problems if there is a longer delay in October.

 

Strong winds fan dozens of fires in Russia’s Rostov region, governor says

Strong winds fanned fires sparked by downed power lines and carelessness in multiple settlements across Russia’s southern Rostov region, Governor Vasily Golubev reported on Sunday.

Since the start of the day, authorities recorded more than 50 fires, with 30 remaining active. Several blazes spread to residential areas, causing limited evacuations.

More than 2,000 firefighters and nearly 300 pieces of equipment were engaged in efforts to bring the blazes under control.

The Rostov region, a key agricultural area, contributed more than 11% of Russia’s total grain harvest last year. However, the region faced early spring frosts and subsequent drought in 2024, leading to an anticipated 30% decline in this year’s harvest compared to 2023.

 

NOAA Increases Odds for La Niña Emergence

The NOAA’s Climate Prediction Center now gives a 71% chance for La Niña to emerge this winter–between September and November. The climate system is expected to persist through March of 2025, although it may soon disappear after that. “The continuation of negative subsurface temperatures and enhanced low-level easterly wind anomalies supports the formation of a weak La Niña,” says the Climate Prediction Center in a notice. “A weaker La Niña implies that it would be less likely to result in conventional winter impacts.” A weaker system may lessen the bouts of extreme cold that hit crop-growing areas over the winter, although ample moisture will likely support crops planted next spring.

 

India Imposes Import Duties on Crude Edible Oils: Notification

India has changed import taxes on some crude and refined edible oils, according to a notification by the finance ministry.

• After the changes, effective duty on crude varieties of palm, soybean and sunflower oils will increase from Saturday to 27.5% from the current rate of 5.5%, according to B.V. Mehta, executive director of the Solvent Extractors’ Association of India
• The import tax on refined grades of those vegetable oils will rise to 35.75% from 13.75%, he said
  • NOTE: The South Asian nation is the world’s biggest buyer of vegetable oils
• India also imposed an export duty of 20% on onions, according to the notification issued on Friday
  • The government removes the floor price of $550 a ton for onion exports, according to a separate notification

 

Argentina to Expand Soy Planting 9.8% Y/y: Buenos Aires Exchange

Farmers are forecast to plant 19m hectares (47m acres) of soybeans in the 2024-25 season, the most since 2015-16 and 9.8% more than last season, the Buenos Aires Grain Exchange said in a report.

• Farmers will plant more soy mainly because of fears over leafhoppers that attack corn
• NOTE: Argentina Set for Biggest Expansion in Soy Acreage in 15 Years
• NOTE: Argentine soy planting is mainly done Nov.-Jan.

 

CORN/CEPEA: Sellers are away from trades; prices rise 5% this month

Producers are away from closing trades in the spot market and for future delivery, since they are focused on the warm and dry weather and on firm demand in both the international and domestic markets. As a result, purchasers claim to have difficulties to replenish inventories, and corn prices are moving up – the upward trend has been verified for the fourth week in a row.

The ESALQ/BM&FBovespa Index (Campinas, SP) moved up 2.6% between September 5 and 12, closing at BRL 63.50 per 60-kilo bag on Sept. 12, the highest nominal value since January this year. In the accumulated of September (up to Sept. 12), the increase is 4.8%.

On the average of the regions surveyed by Cepea, corn values rose 1.7% in the over-the-counter market (paid to farmers) and 2.1% in the wholesale market (deals between processors) in the same period.

Not even the reports released by Conab and by the USDA indicating high production in Brazil and in the world were enough to limit price rises in the domestic market. Producers expect new increases, based on the impacts of the weather on summer crops and on the possible delay of the 2024/24 second season.

Conab released a report about the 2023/24 season this week, indicating that the Brazilian production is likely to amount 115.72 million tons, 0.06% up than that projected in the month before, but decreasing 12% compared to the 2022/23 crop.

The domestic availability (initial stocks + production + imports) is estimated by Conab at 125.29 million tons. As the domestic consumption is estimated at 84.24 million tons, the domestic surplus is calculated at 41 million tons in the 2023/24 season. From this amount, 36 million tons are forecast to be shipped. In case international sales hit this amount, only 5 million tons would remain by late January/25, roughly 30% smaller than the crop before.

In global terms, for the 2024/25 season, the USDA estimates production of 1.21 billion tons, 0.5% smaller than the 2023/24 crop, due to the low volume especially from Ukraine and Russia. The consumption is estimated at 1.21 billion tons, reducing stocks to 308.34 million tons.

In the first five producing days of September, Brazil shipped 1.55 million tons of corn, with a daily pace at 311.6 thousand tons. In case this pace continues up to the end of the month, Brazilian exports are likely to surpass 6 million tons. Anec indicates that shipments may reach 6.47 million tons in September.

In Paranaguá (PR) and Santos (SP), quotations remained between BR 64.00 and BRL 66.00/bag this week, sustained by the increase of 0.7% of dollar values against Real, at BRL 5.62 yesterday.

CROPS – According to Conab, the 2023/24 second crop harvesting in Brazil reached 99.7% of the area until Sept. 8. Only Mato Grosso do Sul needs to finish activities.

As for the summer crop, 29% of the area had been planted up to Sept. 9 in Paraná, an advance of 11 percentage points in one week, but still with a delay of 13 p.p. compared to that observed in the last season – data from Seab/Deral.

 

SOYBEAN/CEPEA: Possible high global supply presses down quotations

The upward trend for soybean prices was interrupted in the United States and in Brazil, due to expectations of the higher world supply. The 2024/25 crop is about to begin in the Northern Hemisphere; however, it is necessary to wait for the planting, the development and the harvesting in South America. There are concerns with the dry weather in Brazil, but rain forecasts in some areas of the country in the coming weeks are leading producers to begin planting the new season.

According to data released by the USDA on September 12, the global 2024/25 soybean supply is estimated at the record of 429.2 million tons, 8.73% more than in 2023/24. The production in the US is forecast at the record of 124.8 million tons, 10% higher than the crop before. The increase is linked to favorable weather conditions for crops, which can register the highest productivity in history, 3.57 tons per hectare.

Moreover, due to the record soy consumption in the US in the 2023/24 season (finished in August), of 65.55 million tons, the exportable surplus reduced. According to the USDA, US shipments totaled 46.26 million tons, the smallest amount since 2019/20.

Still, ending stocks were at 9.25 million tons in August, 28.7% more than in the 2022/23 crop. Stocks can increase even more in the 2024/25 season, forecast at 14.96 million tons, upping 61.7%. As a result, future contracts for the soybean complex dropped.

 

Rains lift Australian farm confidence, Rabobank survey shows

Improved rainfall across much of Australia has lifted farmers’ confidence in the future of the agricultural economy from low levels three months ago, a quarterly survey by Rabobank published on Monday showed.

Australia is one of the world’s biggest agricultural exports. Farm confidence plunged earlier in the year as unusually low rainfall in many regions threatened crop yields and pastures.

However, widespread rain has improved the crop outlook, and strong export demand has helped raise livestock prices.

“The patchy start to this year’s season has been corrected in many farming regions, especially in Western Australia where seasonal conditions looked dire last quarter but have really turned around,” said Rabobank executive Marcel van Doremaele.

“Livestock producers are more optimistic after improvements in cattle and sheep prices, and there are also positive signals for dairy production,” he said.

“Grain and cotton farmers, though, face more bearish conditions with global drivers putting downward pressure on prices.”

Rabobank’s survey of around 1,000 farmers found that 23% expected the agricultural economy to improve in the coming year, up from 15% three months ago. Twenty-seven percent of respondents expected conditions to worsen, down from 36%, while 47% thought the situation would remain stable.

Drought remained the main worry for farmers but fewer were concerned than three months ago, and fear of rising input costs also lessened.

 

China Nitrogen Fertilizer Price Drops 11%

Nitrogen fertilizer, represented by China granular urea, fell 11% to $283 per metric ton in the week ended Sept. 13, according to Green Markets data compiled by Bloomberg Intelligence.

• China granular urea dropped 11% during the last month and was down 19.1% during the last 3 months
• Major Urea nitrogen benchmark prices were mixed
• Shares of Shandong Hualu Hengsheng Chemical Co., Holitech Technology Co. and Luxi Chemical Group Co. 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 increased 1.7% during the last week and was up 1.5% during the last month
• The price of corn, a driver of fertilizer purchases, increased 0.7% during the last week and was up 3% during the last month

 

US Beef Production Up 14.5% This Week, Pork Rises: USDA

US federally inspected beef production rises to 527m pounds for the week ending Sept. 14 from 461m in the previous week, according to USDA estimates published on the agency’s website.

• Cattle slaughter up 14.4% from a week ago to 620m head
• Pork production up 10.5% from a week ago, hog slaughter rises 10.5%
• For the year, beef production is 1.1% below last year’s level at this time, and pork is 1.7% above

 

 

 

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