Global Ag News for Sept 5.24

TOP HEADLINES

Low water on Mississippi River impacts barges, grain exports ahead of harvest

Low water conditions have led to several barges running aground along a key stretch of the lower Mississippi River, the U.S. Coast Guard told Reuters on Wednesday, just as the busiest U.S. grain export season gets underway.

Low water levels are slowing export-bound barge shipments of grain and oilseeds from the Midwest farm belt for a third straight year, making U.S. exports less competitive in a world market awash in supplies – just as farmers are set to harvest a record soy and large corn crop and as prices hover near four-year lows.

The U.S. Coast Guard said in an email it has received reports and responded to several groundings over the last week along the Greenville-Vicksburg sections of the lower Mississippi River.

American Commercial Barge Line warned that customers should expect one to two day delays for river shipments “due to reduced navigable space in certain areas,” the company said on its website.

Sandbars are already starting to show on the Mississippi River at the Memphis, Tennessee, river gauge, according to barge sources. Last October, this stretch of the river fell to an all-time low of -12.04 feet, according to the National Oceanic and Atmospheric Administration’s National Water Prediction Service.

The water level at Memphis is lower than it was last year: It is forecast to drop to -7.5 feet by Sept. 18, NOAA data shows.

Towing and draft restrictions have been rolled out, which are limiting how many barges can move and how much volume can be loaded onto them, said Mike Steenhoek, executive director of the Soy Transportation Coalition. If conditions worsen, the Coast Guard said it may implement further vessel and tow restrictions.

Barge rates are soaring – making it more expensive for overseas buyers to source U.S. grain. Rates for barges coming from the St. Louis, Missouri, area were 65% higher in late August than the three-year average, according to Steenhoek and USDA data.

Such low river levels come despite heavy rains during this year’s growing season, which resulted in flooding and excessively wet fields across wide swaths of the northwestern Midwest.

But now, abnormal dryness and drought conditions are intensifying across the southern Plains and Tennessee and Lower Mississippi Valleys, creating a rapidly developing flash drought situation, according to the U.S. Drought Monitor.

“The secret of our success on the global market has always been lower transportation costs,” Steenhoek said. “This further diminishes our competitive position.”

FUTURES & WEATHER

Wheat prices overnight are down 5 3/4 in SRW, down 3 1/4 in HRW, up 1/2 in HRS; Corn is down 1 1/4; Soybeans down 6; Soymeal down $7.00; Soyoil up 0.52.

For the week so far wheat prices are up 23 1/2 in SRW, up 24 1/2 in HRW, up 23 1/2 in HRS; Corn is up 10 1/2; Soybeans up 15 1/2; Soymeal up $9.20; Soyoil down 1.34.

For the month to date wheat prices are up 23 1/2 in SRW, up 24 1/2 in HRW, up 23 1/2 in HRS; Corn is up 10 1/2; Soybeans up 15 1/2; Soymeal up $9.30; Soyoil down 1.33.

Year-To-Date nearby futures are down 10.2% in SRW, down 8.6% in HRW, down 16.9% in HRS; Corn is down 17.5%; Soybeans down 22.2%; Soymeal down 16.1%; Soyoil down 13.4%.

Chinese Ag futures (NOV 24) Soybeans up 23 yuan; Soymeal up 20; Soyoil down 28; Palm oil down 60; Corn up 7 — Malaysian Palm is up 33.

Malaysian palm oil prices overnight were up 33 ringgit (+0.85%) at 3919.

There were changes in registrations (88 SRW Wheat, 151 Corn, -41 Soyoil). Registration total: 220 SRW Wheat contracts; 6 Oats; 235 Corn; 230 Soybeans; 353 Soyoil; 100 Soymeal; 0 HRW Wheat.

Preliminary changes in futures Open Interest as of September 4 were: SRW Wheat down 10,207 contracts, HRW Wheat down 3,636, Corn down 2,036, Soybeans down 2,369, Soymeal down 2,808, Soyoil down 1,384.

 

Northern Plains: A front will move through Wednesday and bring some limited showers, but also a burst of cooler air that will last in the Dakotas through the weekend. Warmer temperatures in the west will eventually spread across the region next week and it could get very hot next week. The heat could cause an increase in drought.

 

Central/Southern Plains: A front settled down into Texas over the holiday weekend and brought widespread rainfall there as well as eliminating extensive heat. Showers will continue in Texas the next couple of days. Another front will pass through Thursday and Friday. It will bring some limited showers but also a burst of cooler air that will last through the weekend. Temperatures should gradually rise next week and could be hot in the north. Some drier areas in the region will not get needed rainfall, but much of the crop is now maturing and the lack of rainfall is not causing much of an issue with the later stages of filling corn or soybeans. Soils would enjoy some more rainfall prior to winter wheat planting, and the increased heat will not be favorable either.

 

Midwest: Scattered showers occurred over the weekend, but some areas missed out on the rainfall and have been too dry at the end of the growing season for filling corn and soybeans. For the crop that is further along, the conditions have been pushing the crop toward maturity. For those further behind, the lack of rainfall will cause a drop in yields. Temperatures will not be stressful at least for the next week. A front will move through Thursday and Friday with scattered showers that are not forecast to be widespread or heavy. But it will bring in another burst of cooler air. Lows may drop below 40 degrees in some areas this weekend, but frosts are not forecast to occur in any significant way. Temperatures will gradually rise next week and could get hot again by the end of the week.

 

Delta: A stalled front will be in the area this week, but precipitation is forecast to be more prevalent near the Gulf than for the rest of the region. Another front will move through Friday and Saturday and could bring some additional showers and another burst of cool air. Soil moisture is still low despite recent rainfall, however.

 

Canadian Prairies: Recent warm and dry conditions have been favorable for the continued wheat and canola harvest. A front will sweep through the region on Wednesday with some showers and a burst of cool air. The cooler temperatures will not last long with temperatures rising this weekend and getting hot next week.

 

Brazil: Much of the country is extremely dry to start off planting season. A front brought limited showers to Rio Grande do Sul over the weekend, where soil moisture is better. Another front will move in with showers for Wednesday and Thursday for southern Brazil. In some areas, the rain will be beneficial, in others it will be too light. Rain is not forecast to make it into central Brazil which would need some rain prior to the wet season rains for planting to begin on time later this month.

 

Argentina: The country is very dry for developing wheat and too dry for corn planting in most areas. A front brought scattered showers to Buenos Aires over the weekend, but not much to anywhere else. Another front will move through the north on Wednesday with some showers there. A quick burst of cool air will move through as well but warm up over the weekend into next week. Another front will do something similar in the middle of next week, with rainfall only for northern areas, unfavorable for wheat or corn.

 

Europe: A front brought scattered showers into western Europe over the weekend and the system responsible remains in these areas for much of the week. The rainfall will not be good for any remaining wheat harvest or drydown for corn. Eastern areas are very warm and largely dry this week, fine for summer crops, but not for thinking about early planting for winter crops. The system will move eastward next week and may be more generous to eastern areas. That should also bring some cooler air into the west, possibly very cold.

 

Black Sea: A weak system in the Black Sea has brought very limited showers to the far south over the last week and continues the rest of this week as well. It is largely too late for filling corn and sunflowers, which have gone through extensive drought this year, and is not good for the start of winter wheat planting either.

 

Australia: Several systems moving through the Southern Ocean this week and next will skirt some showers through southern areas but will not bring much rain to New South Wales or Queensland, where some drier soils are. Heat in these areas will instead be an issue with the lower soil moisture.

 

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

 

TENDERS

• WHEAT PURCHASE: The Taiwan Flour Millers’ Association purchased an estimated 101,700 metric tons of milling wheat to be sourced from the United States in a tender
• FEED WHEAT PURCHASE: South Korean animal feed maker Nonghyup Feed Inc. (NOFI) purchased about 65,000 metric tons of animal feed wheat in an international tender
• FEED WHEAT PURCHASE: An importer group in Thailand is believed to have purchased an estimated 146,000 metric tons of animal feed wheat to be sourced from optional origins in a tender which closed on Wednesday
• 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 only.
• 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. GASC said traders should submit bids for at least 5,000 tons for payment at sight on C&F basis with funding from the International Islamic Trade Finance Corporation. 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.

 PENDING TENDERS

• WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy a total of 87,660 metric tons of food-quality wheat from the United States and Canada in a regular tender that will close late on Sept. 5.
• RICE TENDER UPDATE: The lowest price offered in an international tender from Indonesian state purchasing agency Bulog to buy up to 350,000 metric tons of rice was estimated at $545 a ton cost and freight (c&f) for rice expected to be sourced from Myanmar.
• WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy up to 120,000 metric tons of milling wheat, which can be sourced from optional origins.

 

 

TODAY

ETHANOL: US Weekly Production Survey Before EIA Report

Output and stockpile projections for the week ending Aug. 30 are based on five analyst estimates compiled by Bloomberg.

• Production seen slightly higher than last week at 1.072m b/d
• Stockpile avg est. 23.678m bbl vs 23.572m a week ago

 

StoneX Trims US Corn Output, Raises Soy View From Last Month

US corn production is estimated at 15.127 billion bushels, down from an estimate last month for 15.207 billion, according to a Wednesday outlook from brokerage firm StoneX.

• US corn yield is raised to 182.9 bu/acre, up from 182.3 a month ago: StoneX
  • Moves comes after the US Department of Agriculture on Aug. 12 cut its estimate for American corn acreage by 1 million acres
• StoneX estimates US soybean production at 4.575 billion bushels with a yield of 53 bu/acre
  • Each is above StoneX’s estimate last month for 4.483 and yield of 52.6
• NOTE: USDA releases updated crop-production forecasts Sept. 12

 

Brazil’s soybean area set to expand at slowest pace in 18 years, AgRural says

The area planted with soybeans in Brazil will grow in 2024/25 at its slowest pace in almost two decades, agribusiness consultancy AgRural said on Wednesday, forecasting a modest 0.9% expansion when compared with the previous season.

Farmers in the South American country, the world’s largest soybean producer and exporter, are set to start sowing their 2024/25 crop this month, although bad weather is seen delaying some work in the fields.

AgRural expects Brazil’s soybean area to reach 46.4 million hectares (114.7 million acres) in 2024/25, which – based on figures provided by national crop agency Conab – would mark the worst year-on-year performance since 2006/07, when there was a drop from 2005/06.

“Prices are not encouraging a greater area increase,” AgRural analyst Daniele Siqueira told Reuters, as benchmark soybean futures in Chicago <SV1> hover around four-year lows on expectations of a bumper U.S. crop.

Siqueira noted the figures were still preliminary as dry weather in the main producing areas should hold off an early start to planting in September. AgRural will review its estimate in the second half of the month.

The consultancy believes that Brazil’s soybean production could reach 168 million metric tons in 2024/25, up 14% on a yearly basis, as adverse weather last season affected output in major grain-producing states such as Mato Grosso and Parana.

A second consultancy, Patria AgroNegocios, also forecast on Wednesday Brazil’s soybean area will reach 46.45 million hectares in the new season, but it sees a slightly higher percentage increase as its estimate for 2023/24 sat at 45.69 million hectares.

The 1.66% growth projected by Patria would be driven by Brazil’s north and northeast regions, while in southern and southeastern states – where most of the local grain output is concentrated – the expansion would be limited.

Patria sees Brazil’s soybean output potentially reaching 166.72 million tons in 2024/25, up 15.5% from the previous season.

 

Improved Crush Margins in China Seen Spurring Soybean Demand

An improvement in Chinese soybean crushing margins is signaling increased demand for the oilseed just as farmers in the US prepare to reap a record crop.

Chinese crush margin — a gauge of profitability for processing soybeans into meal for animal feed and oil for consumption — has been negative since June, but has recovered to levels not seen in over two months, according to data from Shanghai JC Intelligence Co.

Better margins could translate into more imports of the oilseed as the US is getting ready to harvest its biggest soy crop ever.

So far, Chinese import demand from the US has been sluggish, with the Asian country having turned to Brazil for much of its needs. The US sold 2.89 million metric tons of soybeans to China for delivery in the 2024-25 season. That’s the lowest in 18 years outside the 2018-2019 period affected by a trade war, and down 47% from a year ago.

But a recent drop in futures — to a four-year low in August due to an expected record crop in the US — is helping margins to improve in China.

There are signs China’s hog herd is expanding, and — following reduced soy production in Brazil — the country is expected to secure an additional 675 million or more bushels of US soy through the end of the year, said Ben Buckner, chief grains analyst for AgResource Co.

Soy futures remained firm Wednesday in Chicago after the US Department of Agriculture showed crop conditions dropped below the average estimate of analysts surveyed by Bloomberg. The results came as another heat wave is expected to hit the western grain belt over the next two weeks.

 

Drought dominates Ukrainian winter grain sowing fields, forecasters say

Ukrainian farmers have started sowing winter grain crops for the 2025 harvest, but the availability of moisture in the soil in most regions of Ukraine is extremely low, state weather forecasters said on Wednesday.

In recent years, Ukraine has often experienced a lack of soil moisture during autumn sowing, but farmers are hoping that a wet and mild winter and favourable weather in the spring will allow for a good harvest.

“Drought continued and intensified in the fields intended for sowing next year’s winter crop,” forecasters said in a report.

“After the July heatwave, in August, amid a severe precipitation deficit and high temperatures, soil and atmospheric drought intensified in the southern, central and eastern regions, spreading to about 60-70% of the area, including the western regions,” they noted.

Ukrainian agriculture ministry said this week that farmers had started winter grain sowing for the 2025 harvest, seeding the first 27,700 hectares of winter wheat.

Winter wheat generally accounts for 95% of overall Ukrainian wheat output each year.

Ukraine has completed the 2024 wheat harvest, threshing 21.8 million tons of the commodity, compared with more than 22 million tons in 2023.

 

Ukraine 2025 winter wheat area could rise above 5 mln hectares, source says

Ukrainian farmers could increase the winter wheat sowing area for the 2025 harvest to more than 5 million hectares, from 4.7 million hectares in 2024, to compensate for a decline in the winter rapeseed area, an industry source said on Thursday.

The source said the area under rapeseed could fall by 500,000 hectares because of continuing drought across most of the country.

Record high temperatures and a lack of rain almost throughout Ukraine in recent months have created unfavourable conditions for sowing winter crops, particularly rapeseed.

State weather forecasters said on Wednesday that the moisture in the soil is extremely low in most regions of Ukraine.

“We are already late compared to last year and have sown 200,000 fewer hectares of rapeseed,” the source said.

“If the drought continues, the area under winter rapeseed could shrink by 500,000 hectares, but if the rains come, the decline will be around 250,000 hectares.”

The farm ministry data showed that farmers had sown 446,000 hectares of winter rapeseed as of Sept. 2, down from 655,000 hectares sown at the same date in 2023.

 

Indonesia Plans to Set Palm Oil Export Levy as Percentage

Government plans to lower export levy on palm oil and set the rate as a percentage, according to Eddy Abdurrachman, president director of Indonesia’s oil palm plantation fund management agency.

• Moves are part of planned revision to rules on palm oil exports, Abdurrachman said on Thursday
• Implementation of new palm oil levy structure will wait for revision to finance ministry’s rule
  • Govt may set palm oil export levy between 3% to 7.5% of reference price
  • CPO levy will be set at the highest while other derivative products will get lower rates
  • Currently, levy is set as a value depending on reference price range, and reviewed every month
• Agency is ready for implementation of B40 biodiesel blending mandate in Jan. 2025
  • B40 mandate may increase palm-biodiesel volume to 16m kiloliters from 13.4m kiloliters this year
• Agency to start raising replanting aid for smallholders in Sept.
  • Aid to increase to 60m rupiah per hectare

 

Canada wheat production slightly up as harvests continue ahead of schedule

2024/25 CANADA WHEAT PRODUCTION: 34.2 [32.9–35.7] MILLION TONS, UP 1% FROM LAST UPDATE

2024/25 Canada wheat production is slightly (1%) increased to 34.2 [32.9–35.7] million tons, as warmth and dryness continue to successfully promote early harvest activities in most key producing provinces. Our current median outlook is slightly below the StatCan’s 34.4 million tons projected in its Model-Based Principal Field Crop Estimates report (28 August). The USDA’s World Agricultural Outlook Board (WAOB) has pegged its estimate of Canada wheat production at 35 million tons early August (12 August). Harvest operations are active in all producing provinces, progressing largely ahead of schedule. Harvest is most advanced in Alberta, where 20.4% of the total grain and oilseed crop is now in the bin, well over the 5-year average of 12.1% and the 10-year average of 10.4%. Saskatchewan Agriculture and Forestry estimates that 25% of the total crop has been combined so far, also ahead of the 21% five-year and 19% ten-year averages. Barring any unexpected extreme weather, the harvest should accelerate into mid-September, as warm and dry conditions are likely to continue through next week and the following week.

 

U.S. corn production slightly up as crops begin to mature with harvest season around corner

2024/25 U.S. CORN PRODUCTION: 386 [379–394] MILLION TONS, UP <1% FROM LAST UPDATE

Continued stable weather conditions across the Plains/Upper Midwest and a mostly positive early September outlook throughout central Corn Belt slightly (<1%) increase 2024/25 U.S. corn production to 386 [379–394] million tons, as crops begin to mature with the harvest season immediately around the corner. In August’s WASDE (12 August), USDA projected U.S. corn production at 384.7 million tons, an uptick from its July estimate of 383.6, slightly below our current median outlook. The average of a Reuters poll of analysts’ own estimates (06 August) placed national-level yield at 181.9 bushels per acre (with a range of 180.5 to 183.9 bushels per acre) and production at 15.1 billion bushels (with a range of 14.9 to 15.3 billion bushels). Our current estimates put yield and planted area at 183.5 bushels per acre and 91.1 million acres, respectively, compared to the USDA’s latest forecasts of 183.1 bushels per acre and 90.7 million acres. The recently concluded (19-22 August) ProFarmer Crop Tour has found a strong potential for record high yields in Iowa and Illinois, better than expected yields in Indiana and Ohio, and sub-par crop conditions in Minnesota. These findings align well with our current position on state-level yields.

The latest Crop Progress report (03 September) set national-level estimates of corn dented at 60%, behind last year’s 62% but ahead of the 5-year average of 58%. Corn in maturity stage was estimated at 19%, well ahead of both last year’s 15% and the 13% five-year average. Crop condition scores continue to indicate overall much healthier corn conditions compared to the same time last year, with now 65% of the crop in the good-to-excellent (GEX) category (vs. last year’s 53%) and 12% in the poor-to-very poor (PVP) category (vs. last year’s 18%) at the national level. Vegetation densities from satellite imagery remain higher than initially anticipated, maintaining near record high levels throughout central Corn Belt, including the key “I” states (i.e. Illinois, Iowa and Indiana) despite lack of rains (e.g. Indiana), excessive moisture (e.g. Iowa) and delayed plantings (e.g. Illinois) earlier in the season. As the second week of September begins, most of key producing areas of central Corn Belt will likely continue to see dry weather, though temperatures could get relatively volatile compared to recent weeks. This should bode well for the harvest preparation and late season crop dry down.

 

 

 

 

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