Global Ag News for Sept 19.23

TOP HEADLINES

Australia’s Bureau of Meteorology Makes EL Niño Declaration

An El Niño and a positive Indian Ocean Dipole are underway, according to Australia’s Bureau of Meteorology.

• Climate models indicate El Niño is likely to persist until at least the end of February, the bureau said in its Climate Driver Update
• El Niño typically leads to reduced spring and early summer rainfall for eastern Australia, and warmer days for the southern two-thirds of the country
• A positive IOD typically leads to reduced spring rainfall for central and south-east Australia
• All models predict this positive IOD will persist to at least the end of spring

FUTURES & WEATHER

Wheat prices overnight are down 6 1/2 in SRW, down 9 1/4 in HRW, down 6 1/2 in HRS; Corn is down 3; Soybeans down 5 1/2; Soymeal down $0.60; Soyoil down 0.20.

For the week so far wheat prices are down 19 1/2 in SRW, down 20 3/4 in HRW, down 18 in HRS; Corn is down 7 3/4; Soybeans down 29; Soymeal down $4.80; Soyoil down 1.32.

For the month to date wheat prices are down 17 1/4 in SRW, down 1 1/2 in HRW, up 4 1/4 in HRS; Corn is down 10 3/4; Soybeans down 57 1/2; Soymeal down $16.70; Soyoil down 1.74.

Year-To-Date nearby futures are down 26.2% in SRW, down 18.3% in HRW, down 17.9% in HRS; Corn is down 31.0%; Soybeans down 13.7%; Soymeal down 18.4%; Soyoil down 2.6%.

Chinese Ag futures (NOV 23) Soybeans up 22 yuan; Soymeal down 64; Soyoil down 96; Palm oil down 68; Corn down 20 — Malaysian Palm is down 2.

Malaysian palm oil prices overnight were down 2 ringgit (-0.05%) at 3747.

There were no changes in registrations. Registration total: 3,005 SRW Wheat contracts; 741 Oats; 4 Corn; 220 Soybeans; 67 Soyoil; 75 Soymeal; 402 HRW Wheat.

Preliminary changes in futures Open Interest as of September 18 were: SRW Wheat up 2,974 contracts, HRW Wheat up 604, Corn up 16,226, Soybeans up 2,834, Soymeal down 3,278, Soyoil down 4,298.

Northern Plains: Mostly dry Tuesday. Scattered showers Wednesday-Friday. Temperatures near to above normal through Friday. Outlook: Scattered showers Saturday-Sunday. Mostly dry Monday-Wednesday. Temperatures near to above normal Saturday-Wednesday.

Central/Southern Plains: Isolated showers through Wednesday. Scattered showers Thursday-Friday. Temperatures near to above normal through Friday. Outlook: Isolated to scattered showers Saturday-Sunday. Mostly dry Monday-Wednesday. Temperatures near to above normal Saturday-Wednesday. Pacific Northwest Highlights… Mostly dry. Temperatures above normal.

Western Midwest: Isolated showers through Thursday. Scattered showers Friday. Temperatures above normal through Friday.

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

Delta: Mostly dry through Wednesday. Isolated showers Thursday-Friday. Temperatures near normal Tuesday, above normal Wednesday-Friday. Outlook: Isolated showers Saturday-Sunday. Mostly dry Monday-Wednesday. Temperatures above normal Saturday-Wednesday.

Brazil: Rio Grande do Sul and Parana:  Isolated to scattered showers through Friday, mostly south. Temperatures above to well above normal through Friday. Mato Grosso, MGDS and southern Goias:  Isolated showers through Wednesday. Mostly dry Thursday-Friday. Temperatures near to above normal through Friday. Brazil Coffee/Citrus/Cane… Isolated showers. Temperatures near to above normal. Coffee/Citrus/Cane Forecast…. Isolated showers through Tuesday. Mostly dry Wednesday-Friday. Temperatures above normal through Friday.

Argentina: Cordoba, Santa Fe, Northern Buenos Aires:  Mostly dry through Thursday. Scattered showers Friday. Temperatures near to above normal through Wednesday, above normal Thursday-Friday. La Pampa, Southern Buenos Aires:  Mostly dry through Thursday. Scattered showers Friday. Temperatures near to above normal through Friday.

The player sheet for Sept. 18 had funds: net sellers of 6,000 contracts of SRW wheat, sellers of 5,000 corn, sellers of 10,000 soybeans, sellers of 3,500 soymeal, and  sellers of 4,000 soyoil.

TENDERS

• CORN PURCHASE: Taiwan’s MFIG purchasing group bought about 65,000 metric tons of animal feed corn which is expected to be sourced from Brazil in an international tender on Tuesday
• SOYBEAN PURCHASE: The U.S. Department of Agriculture confirmed private sales totaling 123,000 metric tons of U.S. soybeans to China for shipment in the 2023/24 marketing year.
• CORN TENDER: Leading South Korean feedmaker Nonghyup Feed Inc. (NOFI) has issued an international tender to purchase up to 138,000 metric tons of animal feed corn to be sourced from optional origins
• VEGETABLE OILS TENDER: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), said it was seeking vegetable oils in an international purchasing tender for arrival Dec. 15 – 31. GASC said traders should submit bids for payment at sight. The deadline for offers is Sept. 21.
• WHEAT, BARLEY TENDER: Algerian state grains agency OAIC has issued an international tender to purchase milling wheat, with shipment sought in different periods between mid-November and end-December for main supply origins.

PENDING TENDERS

• SOYMEAL TENDER: Leading South Korean animal feed maker Nonghyup Feed Inc. (NOFI) has issued an international tender to purchase up to 60,000 metric tons of soymeal
• 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.
• 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 was 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 was Sept. 13.
• CORN, BARLEY TENDER: Algerian state agency ONAB has issued international tenders to purchase up to 80,000 metric tons of animal feed corn and 30,000 metric tons of feed barley. The deadline for submission of price offers in the tenders was Sept. 14.
• WHEAT TENDER: The Taiwan Flour Millers’ Association has issued an international tender to purchase an estimated 93,125 metric tons of grade 1 milling wheat to be sourced from the United States. The deadline for submission of price offers is Sept. 22.

TODAY

US Inspected 642k Tons of Corn for Export, 393k of Soybeans

In week ending Sept. 14, according to the USDA’s weekly inspections report.

• Wheat: 367k tons vs 406k the previous wk, 838k a yr ago
• Soybeans: 393k tons vs 374k the previous wk, 521k a yr ago
• Corn: 642k tons vs 625k the previous wk, 549k a yr ago

US Corn, Soybean, Wheat Inspections by Country: Sept. 14

Following is a summary of USDA inspections for week ending Sept. 14 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 175k tons of the 393k total inspected
• Mexico was the top destination for corn inspections, and also led in wheat
• The following are in thousands of metric tons, only the top five countries are listed:

Brazil 2023/24 Soybean Planting 0.2% Complete: AgRural

Soybean planting is 0.2% complete as of Sept. 14, compared with 0.1% a year earlier, according to an emailed report from AgRural consulting firm.

• Work is still slow in Mato Grosso state, as farmers await for more rain
• 2023/24 summer corn planting in Brazil’s Center-South region is 21% complete, vs 17% a week earlier and 22% a year before
• Center-South winter corn harvest 97% done

BRAZIL CROP WEATHER: Coffee, Soybeans Threatened by Extreme Heat

Dryness and intense heat is expected to hit Brazil’s central and southeast areas this week, bringing concern for soybean crop development and risks of damage to coffee and citrus trees, Climatempo meteorologist Nadiara Pereira says in a Monday interview.

• High temperatures and long periods of dry weather could harm the flowering of coffee and citrus tees
  • That’s a concern because August rains aided flowering and, if those flowers die prematurely due to extreme weather, fruit development is compromised
• Extreme heat can harm soybeans seedlings in recently planted areas
• For sugar cane, there is an alert for the risk of fires
• Temperatures could surpass 42C (107.6F) in most of Southeast and Center-West of Brazil, Rural Clima meteorologist Marco Antonio dos Santos says in message
  • That’s unusual since this is officially the last week of Brazil’s winter
  • Weather to remain mostly dry for more than a week, with rains seen returning only after Sept. 27

EU Corn Yields Cut 3% Due to Drought in Romania, Bulgaria: MARS

“Persistent drought” in large parts of Romania and Bulgaria and floods in Greece are hitting corn yields, the European Union’s Monitoring Agricultural Resources unit said in a report.

• In Romania, “soil moisture content decreased to critically low levels in eastern and southern areas during the grain-filling period for maize and sunflowers”
• Rain surplus continued to affect parts of central and northern Europe

WHEAT/CEPEA: Rains in RS concern agents; prices drop steeply

Agents from the wheat market are watching out for the frequent rains in Rio Grande do Sul and the possible damages to crops – RS is the number one wheat-producing state in Brazil. According to Emater, the current high moisture in wheat crops in RS is raising the incidence of diseases, which may reduce the quality of the grains.

Despite this scenario, wheat prices are dropping steeply in Brazil, influenced by the progress of the national harvest and the consequent higher supply.

Cepea surveys show that, between September 8-15, the prices paid to wheat farmers dropped 4.5% in Santa Catarina, 3.41% in Paraná and 3% in Rio Grande do Sul. In the wholesale market (deals between processors), values decreased a steep 7.72% in São Paulo, 5.68% in PR, 4.23% in RS and 2.02% in SC. In the same period, the US dollar dropped 2.3% against the Real, closing at BRL 4.87 on September 15th.

ESTIMATES – Data released last week by the USDA indicated that the world output, consumption, ending stocks and international trades in the 2023/24 season are expected to be lower than in the previous season (2022/23).

The world output of wheat is estimated at 787.34 million tons, 0.8% lower than that estimated in August and 0.4% down compared to that in the previous season. Consumption is forecast at 795.85 million tons, a slight 0.03% lower than that in the 2022/23 season. Thus, ending stocks may total 258.61 million tons, 3.2% lower than that in the previous season and the lowest since 2015/16. As for international trades, the USDA estimates them at 209.79 million tons in 2023/24, 2.6% lower than in 22/23.

BRAZILIAN CROP – According to Conab (Brazil’s National Company for Food Supply), by September 10th, 17.9% of the national crop of wheat had been harvested.

Kazakhstan harvests 6.6 mln tons of grains as of Sept 19 – minister

Kazakhstan harvested 6.6 million metric ton of grains and pulses as of Sept. 19, down from 14.2 million tons at the same date last year, Agriculture Minister Aidarbek Saparov said on Tuesday.

The harvesting was slower this year, he said, and the yield has fallen to 0.95 tons per hectare from 1.22 tons last year.

Cargo ship loaded with grain has left Ukraine port, deputy p.m. says

A cargo ship which entered the Ukrainian Black Sea port of entered Chornomorsk last week has departed with 3,000 metric tons of grain, Deputy Prime Minister Oleksandr Kubrakov said on Tuesday, confirming a Reuters report.

“The vessel RESILIENT AFRICA, carrying 3,000 tons of wheat, has left the port of Chornomorsk and is heading towards the Bosphorus,” Kubrakov said on Facebook.

“This is the first of two vessels that entered Chornomorsk last week through a temporary corridor for civilian vessels established by the Ukrainian Navy.”

Malaysia Sees Domestic Rice Shortage to Resolve in a Month

Malaysia forecasts the shortage of rice in the domestic market will be resolved within a month due to government measures, according to Agriculture and Food Security Minister Mohamad Sabu.

• The ministry in September launched a program to boost stockpiles of locally produced white rice by 20% each month for a year, he told the Malaysian parliament on Monday
• Malaysia is working on negotiating with India to find a solution to the export ban
• Mohamad said he would meet with India’s Agriculture Minister soon
• Malaysia’s sole rice importer Bernas will be in talks with other rice producing countries such as Vietnam, Thailand and Cambodia

US Biofuel Credits Plunge on Oversupply

Renewable diesel and biodiesel blending credits, known as D4 RINs, plummeted to $1.19 per RIN, their lowest level since March 2021, according to data from Starfuels. RINs have fallen as favorable blending margins boosted credit supply.

Nitrogen Firms as India Tender Prices Revealed, Brazil to Buy

The global urea market found direction as India’s tender revealed prices above $400 a metric ton delivered. China may limit urea exports in 4Q, setting up a scramble for tons as India sources material and Brazil seeks supply. Ammonia and urea are balanced on a unit basis, limiting ammonia’s potential price gains through year-end.

Ammonia Catches Urea as Spreads Show Market Ceiling

As nitrogen price pressure intensified last week, India’s tender revealed a firm floor for urea of $400.50 a metric ton (mt) on a cost-and-freight (CFR) basis West Coast India. Yet a wide spread between that price and the next offer –$420/mt CFR– suggests few suppliers will be able to match the low. At that spread, India might not get the full 1.2-1.5 million mt it needs from the tender, suggesting the world’s largest buyer may be back for more. At current nitrogen prices, Middle East urea trades at a 12-cent per nitrogen unit premium to ammonia, 3 cents below average. With India and Brazil demand ahead, we expect nitrogen prices to remain firm though year-end.

Nutrien, Yara and CF are the largest publicly listed nitrogen producers. China is a marginal urea producer; when it exports, prices fall.

 

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