Global Ag News for Dec 28.23

TOP HEADLINES

Russian govt allows for possible seed import restrictions through 2025

The Russian government has allowed for possible import restrictions on certain types of agricultural crop seeds from unfriendly countries through 2025.

The possibility is envisaged by a government resolution signed on December 23, 2023, and published on the official website of legal information, the government said in a statement.

This applies to potato, wheat, rye, barley, corn, soybean, rapeseed, sunflower and sugar beet seeds.

Earlier, such restrictions were possible through 2024.

The Agriculture Ministry has drafted a list of seeds subject to import restrictions, and the government approved it in June 2023.

As reported, the government proposed limiting the import quotas to 16,000 potato seeds, 600 tonnes of malting barley seeds, 5,000 tonnes of corn seeds, including 600 tonnes of waxy corn seeds. 2,000 tonnes of rapeseed (hybrids), 7,000 tonnes of sunflower seeds (hybrids), and 2,000 tonnes of sugar beet seeds (hybrids) between January 23 and December 31, 2024. There is a zero-level quota for wheat, rye, and soybeans.

The ministry said the measure would accelerate the substitution of imports in such a major sector of agriculture as seeds. “Decisions will be based on the harvest, the seed pool, and the assessment of domestic market needs for the seeds of each crop. The amount of imported seeds will be flexibly regulated and the quotas will be progressively limited within the next three years, as domestic production increases,” it said.

FUTURES & WEATHER

Wheat prices overnight are up 3/4 in SRW, up 3/4 in HRW, up 1 1/2 in HRS; Corn is down 1 1/2; Soybeans down 3 1/4; Soymeal down $0.70; Soyoil up 0.05.

For the week so far wheat prices are up 7 1/2 in SRW, up 12 3/4 in HRW, up 9 in HRS; Corn is up 2; Soybeans up 11; Soymeal up $2.00; Soyoil down 0.31.

For the month to date wheat prices are up 25 3/4 in SRW, down 7 1/4 in HRW, down 6 1/4 in HRS; Corn is down 7 3/4; Soybeans down 45; Soymeal down $21.10; Soyoil down 3.34.

Year-To-Date nearby futures are down 21.2% in SRW, down 28.4% in HRW, down 23.0% in HRS; Corn is down 30.0%; Soybeans down 13.5%; Soymeal down 16.8%; Soyoil down 24.5%.

Chinese Ag futures (MAY 24) Soybeans up 38 yuan; Soymeal up 11; Soyoil down 6; Palm oil down 10; Corn up 9 — Malaysian Palm is down 30.  Malaysian palm oil prices overnight were down 30 ringgit (-0.80%) at 3740.

There were changes in registrations (-22 Soybeans, -10 HRW Wheat). Registration total: 1,356 SRW Wheat contracts; 159 Oats; 6 Corn; 447 Soybeans; 147 Soyoil; 0 Soymeal; 291 HRW Wheat.

Preliminary changes in futures Open Interest as of December 27 were: SRW Wheat down 1,018 contracts, HRW Wheat up 2,685, Corn up 8,368, Soybeans down 11,239, Soymeal down 3,842, Soyoil up 3,899.

Brazil: Showers will be a bit more isolated across central Brazil through the end of the week before becoming more widespread by this weekend and into the new year, helping to turn around conditions for pod-setting soybeans. The next chance for widespread rainfall in southern areas will be late this week into this coming weekend. With generally drier conditions across these southern areas over the past few weeks, the heavier rain will not be as negative of a factor for developing corn and soybeans.

Argentina: Showers have been frequent lately, keeping soils moist and in some cases, a bit too wet. More showers return to central and northern areas later Wednesday and Thursday. By late this weekend, more isolated showers are possible. Overall conditions are very favorable for developing corn and soybeans with periodic breaks in precipitation.

Europe: An active pattern continues through this weekend for northern areas as systems pour in from the eastern Atlantic. Showers will shift farther south by late this weekend and into New Year’s Day. Spain will be mostly dry through the end of this week but they are in need of more moisture for vegetative wheat. Italy is also forecast to be drier. Both areas will see better chances for scattered showers by early next week.

Australia: Dryness across the west is concerning for cotton and sorghum, but not so much in the southeast. Isolated showers are possible across the west through the end of this week before better chances for more widespread showers return to southwestern areas this weekend. Northeastern areas will continue to see steady chances for rain through New Year’s Day which is favorable for developing crops.

Northern Plains: Above-normal temperatures continue to be forecast through the end of the year but recent snowfall in some areas may lead to near-normal or below normal temperatures. A weakening low pressure system will continue to exit the area Wednesday with drier conditions returning this weekend and into New Year’s Day.

Central/Southern Plains: Light snow showers will taper off Wednesday as a low pressure system exits the area with drier conditions returning by the end of this week and into this weekend. Mostly dry conditions will persist into New Year’s Day but temperatures will remain slightly below normal for the Southern Plains.

Midwest: Temperatures will remain above normal through this weekend. Rain and snow showers will linger in eastern areas through Thursday. Another round of light snow showers is possible this weekend as a system passes by to the north in Canada. By New Year’s Day, mostly dry conditions are expected as high pressure returns.

Delta: Recent widespread rainfall helped increase soil moisture for much of the region and water levels on the Mississippi River are also forecast to increase later this week. Some rain and snow showers will linger across Missouri Wednesday and Thursday but high pressure returns later this week and this weekend, leading to drier conditions. A few scattered rain showers will return across southern areas by New Year’s Day.

The player sheet for Dec. 27 had funds: net sellers of 4,000 contracts of SRW wheat, sellers of 2,500 corn, sellers of 2,000 soybeans, sellers of 1,000 soymeal, and  buyers of 1,000 soyoil.

TENDERS

• SUNFLOWER OIL PURCHASE: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), said it bought 35,000 metric tons of sunflower oil in an international tender. The purchase comprised 17,000 tons for arrival Feb. 14-29, as well as 18,000 tons for March 1-15 arrival, GASC said.
• WHEAT TENDER: Egypt’s state grains buyer GASC said it is seeking wheat in an international purchasing tender. The deadline for offers is Dec. 28.
• WHEAT TENDER: Jordan’s state grains buyer issued an international tender to buy up to 120,000 metric tons of milling wheat sourced from optional origins.
• NO PURCHASE IN WHEAT TENDER: Jordan’s state grain buyer is believed to have made no purchase in an international tender to buy up to 120,000 metric tons of milling wheat which closed on Tuesday.
• NO OFFERS IN WHEAT TENDER: No price offers were believed to have been submitted in an international tender from Pakistan on Wednesday to purchase 110,000 metric tons of wheat

PENDING TENDERS

• WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 metric tons of milling wheat.
• RICE TENDER: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), set a tender to import natural white wholly milled short-grain Indian rice, it said in a statement. GASC, on behalf of Egypt’s Holding Company for Food Industries, sought arrival of the rice from Feb. 1-19 and/or Feb. 20-March 10. The deadline for offers was Dec. 21 and they should be accompanied by three samples, of two kilograms each, GASC said.

TODAY

ETHANOL: US Weekly Production Survey Before EIA Report

Output and stockpile projections for the week ending Dec. 22 are based on five analyst estimates compiled by Bloomberg.

• Production seen lower than last week at 1.062m b/d
• Stockpile avg est. 22.923m bbl vs 22.906m a week ago

 

Ukraine’s Grain Exports Drop 23% Y/y in Season to Dec. 27

Ukraine’s grain exports in the marketing year that started July 1 stand at 17.5m tons, down 23% from a similar period last year, data released by Agriculture Ministry showed.

Total includes:

• 7.26m tons of wheat, down 13% y/y
• 991k tons of barley, down 39% y/y
• 9.1m tons of corn, down 27% y/y

SovEcon Cuts Russia Wheat Export Estimate on Weaker Shipments

Russian wheat exports in the 2023-24 season are now seen at 48.6 million tons, versus a prior estimate of 48.8m tons, research firm SovEcon says in an emailed note.

• The cut was driven by modest shipments last month, with November exports seen at 3.5m tons versus 4.3m tons a year ago
• Further drops in exports may come from increased freight rates “amid difficulties with ship passage through the Suez Canal and the Red Sea”
• Competition may also emerge from new Australian harvest in the coming months

Brazil Soy Exports Seen Reaching 3.48 Million Tns In December Versus 3.50 Million Tns Forecast In Previous Week – Anec

• BRAZIL SOY EXPORTS SEEN REACHING 3.48 MILLION TNS IN DECEMBER VERSUS 3.50 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC
• BRAZIL CORN EXPORTS SEEN REACHING 6.96 MILLION TNS IN DECEMBER VERSUS 7.17 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC
• BRAZIL WHEAT EXPORTS SEEN REACHING 512,343 TNS IN DECEMBER VERSUS 290,026 TNS FORECAST IN PREVIOUS WEEK – ANEC
• BRAZIL SOYMEAL EXPORTS SEEN REACHING 2.05 MILLION TNS IN DECEMBER VERSUS 2.08 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC

Continued first crop sowing delays and dismal second crop outlooks lower Brazil corn production – Refinitiv Commodities Research

2023/24 BRAZIL CORN PRODUCTION: 118.0 [106.3–127.9] MILLION TONS, DOWN <1% FROM LAST UPDATE

2023/24 Brazil corn production is further decreased (<1%) to 118.0 [106.3–127.9] million tons, reflecting continued first crop planting delays amid unfavorable weather conditions, coupled with dismal second crop outlooks due to soybean season delays. Our current median estimate is 11 million tons below the USDA’s World Agricultural Outlook Board (WAOB)’s 129 million tons, which assumes total corn sowings at 22.9 million hectares and national level yield of 5.63 tons per hectare (tph) (vs. LSEG Ag Research’s 21.6 million hectares and 5.45 tph, respectively). Brazil’s agriculture state agency (CONAB) has lately pegged corn production and area at 118.5 million tons and 21.1 million hectares, respectively.

The past two weeks featured largely favorable weather for most first crop corn producing regions in the South and the Southeast. Some of the key production areas of Paraná and Santa Catarina finally saw below average precipitation (20-50 mm below normal) alleviating excessive moisture risks in the region while the second largest first corn producer, Minas Gerais, received beneficial above average rain (up to 40 mm above normal) providing a much-needed relief to the dry soils. These recent favorable weather patterns have not well translated into sowing progress however, as currently plantings are still 10% delayed at the national level. To add insult to injury, the second crop corn outlooks continue to remain bleak owing to the soybean sowing delay earlier in the season, which will likely cause a significant growth curve shift and hence reduction in yield potential.

As of 23 December, Brazil’s first corn is 75.5% planted nationally according to the latest CONAB crop progress report (25 December), behind last year’s pace of 85.5% and the 4-year average of 85%. Soybean sowing pace has picked up greatly in recent weeks, but still only 96.8% of the crop planted so far, running behind schedule. Delays in soy crop progress could leave a significant portion of the second safrinha corn crop to be sown outside the ideal window (hence lowering yield), as the safrinha crop is planted after soybeans are harvested. The second corn accounts for more than 75% of Brazil’s total corn production, warranting close attention.

Brazil soybean production down again as insufficient rains continue across the Central-West

2023/24 BRAZIL SOYBEAN PRODUCTION: 151.1 [140.8–159.7] MILLION TONS, DOWN <1% FROM LAST UPDATE

2023/24 Brazil soybean production is further decreased (<1%) to 151.1 [140.8–159.7] million tons, reflecting continued lack of moisture across the Central-West and lingering sowing delays, despite recent improvements. Our current median estimate is 9.9 million tons below the USDA’s World Agricultural Outlook Board (WAOB)’s 161 million tons, which assumes soybean sowings at 45.6 million hectares and national level yield of 3.53 tons per hectare (tph) (vs. LSEG Ag Research’s 46 million hectares and 3.28 tph, respectively). Brazil’s agriculture state agency (CONAB) has lately pegged soy production and area at 160.2 million tons and 45.3 million hectares, respectively.

The past two weeks featured largely favorable weather for most major producing regions in the South and the Southeast. Some of the core crop areas of Paraná, Santa Catarina, and Rio Grande do Sul finally saw below average precipitation (10-50 mm below normal) alleviating excessive moisture risks in the region, while Goiás and Minas Gerais received beneficial above average rain (up to 40 mm above normal) providing a relief to the dry soils. These recent favorable weather patterns have well translated into sowing progress as well, as currently plantings are only slightly behind schedule (less than 1% delayed at the national level). The soil moisture conditions in some of the top producers in the Central-West, however, has barely improved, warranting close attention. Mato Grosso and Mato Grosso do Sul for example, which combined account for over 35% of the country’s total soy production, have not received any meaning above normal precipitation since late October. Lingering drought conditions in these top producing provinces will likely drag down the national level yield if the unfavorable weather pattern continues into early January, as the crop enters its critical growth period.

As of 23 December, Brazil’s soybeans are only 96.8% planted nationally according to the latest CONAB crop progress report (25 December), still behind last year’s pace of 97.6% and the 4-year average of 98% – although the improvements have been impressive lately. The whole crop area of the Central-West (Mato Grosso in particular) is still in urgent need of water supply, while the South (Paraná and Rio Grande do Sul in particular)’s excessive moisture risks have been somewhat alleviated thanks to recent beneficial dryness. The LSEG Weather Research team’s December-February outlook indicates slightly improved conditions during the prime growth period in terms of both temperature and precipitation, but even in the best case scenario the early season delays will likely cause at least some degree of growth curve shift, forcing crops to miss their ideal development windows and hence lowering yield, warranting attention.

PARAGUAY SOYBEAN PRODUCTION UP ON SUFFICIENT SOIL MOISTURE

2023/24 PARAGUAY SOYBEAN PRODUCTION: 10.2 [9.4–11.1] MILLION TONS, UP 1% FROM LAST UPDATE

2023/24 Paraguay soybean production is increased by 1% to 10.2 [9.4-11.1] million tons thanks to sufficient soil moisture in Alto Paraná, and Itapúa which account for approximately 25 and 19 percent of Paraguay soybean production, respectively. Our area estimate is fractionally below the USDA’s World Agricultural Outlook Board (WAOB)’s 3.55 thousand hectares, which projects national level production and yield at 10.0 million tons and 2.8 tons per hectare (tph), respectively (vs. LSEG Ag Research’s 2.93 tph). According to LSEG’s recent long-term weather forecast, warm and wet weather is expected across Paraguay during January, which should have offsetting effects. We will periodically update yield upon closely monitoring changes in temperatures, soil moisture levels, and satellite imagery.

 

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