Global Ag News for Jan 10.24

TOP HEADLINES

Argentina rains and mild temperatures to benefit soy, corn

Argentina’s 2023/24 soybean and corn crops will see a boost in January due to rains and moderate temperatures for the Southern Hemisphere summer, the Buenos Aires Grains Exchange said in its monthly weather report on Tuesday.

Argentina is one of the world’s top exporters of soybean oil and meal, and the third-largest exporter of corn. In recent months, its planting areas have soaked up ample rainfall caused by the climate phenomenon known as El Nino, which brings increased precipitation to the country.

Recent storms – which left more than a dozen people dead in December – were a boost for the soy and corn crops, which the Rosario grains exchange sees at 50 million metric tons and 56 million metric tons, respectively.

The Buenos Aires exchange has not updated its projections since September when it estimated the soy crop at 50 million tons and the corn crop at 55 million tons.

In January, “rainfall will likely continue to replenish soil moisture reserves, and temperatures will remain moderate with a low risk of intense heat, which will improve harvest projections,” the Buenos Aires exchange said in its report.

Rains should begin to taper off at the end of the summer, in March, while temperatures are expected to increase, the exchange said.

Argentine farmers are currently wrapping up soy and corn planting and nearing the end of the 2023/24 wheat harvest, which the exchange sees at 15.1 million tons.

FUTURES & WEATHER

Wheat prices overnight are down 2 in SRW, down 4 1/4 in HRW, down 1/4 in HRS; Corn is down 1 1/2; Soybeans down 5 3/4; Soymeal down $1.10; Soyoil down 0.13.

For the week so far wheat prices are down 8 in SRW, down 5 1/4 in HRW, down 6 3/4 in HRS; Corn is down 3; Soybeans down 13 1/2; Soymeal down $2.90; Soyoil up 0.69.

Year-To-Date nearby futures are down 3.2% in SRW, down 3.0% in HRW, down 2.5% in HRS; Corn is down 2.9%; Soybeans down 4.0%; Soymeal down 5.2%; Soyoil up 0.6%.

Chinese Ag futures (MAY 24) Soybeans down 13 yuan; Soymeal down 2; Soyoil up 120; Palm oil up 162; Corn down 9 — Malaysian Palm is up 27.

Malaysian palm oil prices overnight were up 27 ringgit (+0.72%) at 3759.

There were changes in registrations (-44 Soybeans). Registration total: 1,295 SRW Wheat contracts; 0 Oats; 6 Corn; 661 Soybeans; 147 Soyoil; 100 Soymeal; 262 HRW Wheat.

Preliminary changes in futures Open Interest as of January 9 were: SRW Wheat down 3,908 contracts, HRW Wheat up 226, Corn up 16,948, Soybeans up 4,435, Soymeal up 1,634, Soyoil up 2,573.

Brazil: Scattered showers will continue in central Brazil all week long, though the coverage and intensity are forecast to lessen later in the week and weekend from east to west. Those showers will still be in the region next week, however. Across the south, a front coming up from Argentina should set off waves of showers in the region this week, favorable for filling soybeans and developing other crops. Some of the areas like Mato Grosso do Sul and Sao Paulo that were dry last week will see much better rainfall this week.

Argentina: Widespread scattered showers fell over Argentina this weekend and continues in the north through Thursday as a front slowly slides northward. The widespread rainfall continues to favor developing corn and soybeans. The front will then clear out, but additional waves of showers are forecast across the country through next week, which maintains the overall favorable conditions.

Australia: A storm system brought widespread moderate to heavy showers and thunderstorms to eastern areas over the weekend. A front will linger and continue to bring showers to northeastern areas this week while the rest of the country will be drier. Western areas continue to deal with significant drought, but eastern areas of the country have seen some improvement in recent weeks.

Northern Plains: A large system missed off to the south but clipped southeast South Dakota with some heavy snow. A weak storm moving through Tuesday and Wednesday will bring lighter snow, but a blast of arctic air will follow for Thursday and continue through next week, moderating next weekend, though there is some discrepancy in the forecast around the middle of next week where temperatures may not be so harsh for a day as a clipper-type system moves through.

Central/Southern Plains: A monster storm system is leaving on Tuesday, but continues with snow across eastern areas through midday. The storm brought heavy snow and strong winds to create blizzard conditions in some areas. The winds will stay elevated through the afternoon. Another major winter storm will develop on Thursday, and though the precipitation will be widespread and the track will be similar, the impacts from this storm are forecast to be less than the first one. Only some limited areas of moderate to heavy snow are forecast into Friday, but could again come with stronger winds and the storm will bring in extremely cold, arctic air going into next week. Models differ on the details of the cold and how long it will last, but is likely to stick around through next week to some degree. A third system may form Sunday into Monday with more wintry impacts for the region.

Midwest: A storm system is barreling through the region Tuesday and Wednesday with widespread impacts including heavy rain and snow and potential blizzard conditions. Another large storm will follow a similar path for Thursday night through Saturday night, which could hit the same areas again with another round of heavy snow and strong winds for blizzard conditions. That system will bring a blast of arctic air into the region that should last through next week.

Delta: A storm brought heavy rain through the region on Monday and lingers showers in the area for Tuesday. Another large storm will follow a similar track with similar impacts Friday, but will be followed by a burst of arctic air. That could set the stage for a major winter storm for Sunday and Monday that would bring ice and snow to at least northern areas if not most of the region. The heavy precipitation with these storms is favorable for further reducing drought and building up water levels in the Mississippi River system.

The player sheet for Jan. 9 had funds: net buyers of 4,500 contracts of SRW wheat, buyers of 2,000 corn, buyers of 1,000 soybeans, and  buyers of 2,500 soyoil.

TENDERS

• WHEAT PURCHASE: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), said it bought 420,000 metric tons of Russian and Ukrainian wheat in an international tender for shipment between Feb. 29 and March 11. The lowest free-on-board offer presented at the tender was $261 per ton for 60,000 tons of Ukrainian wheat, traders said.
• CORN PURCHASE: South Korean animal feed maker Nonghyup Feed Inc. (NOFI) purchased about 135,000 tons of animal feed corn in two consignments in an international tender on Tuesday
• CORN PURCHASE: The Korea Feed Association (KFA) in South Korea purchased about 65,000 tons of animal feed corn expected to be sourced from South America or South Africa in a private deal on Tuesday without issuing an international tender
• SOYMEAL PURCHASE: South Korean animal feed maker Nonghyup Feed Inc. (NOFI) purchased between 45,000 tons and 60,000 tons of soymeal to be sourced from South America
• WHEAT TENDER PASSED: Jordan’s state grain buyer is believed to have made no purchase in an international tender to buy 120,000 tons of milling wheat which closed on Tuesday
• WHEAT TENDER: Tunisia’s state grains agency issued an international tender to purchase about 50,000 tons of durum wheat and 50,000 tons of animal feed barley
• CORN TENDER: Algerian state agency ONAB issued an international tender to purchase up to 120,000 tons of animal feed corn
• FEED BARLEY TENDER: Algeria’s state grains agency ONAB issued an international tender to buy 30,000 tons of animal feed barley to be sourced from optional origins.
• WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is looking to buy a total of 89,260 tons of food-quality wheat from the United States and Canada in a regular tender that will close on Jan. 11.

PENDING TENDERS

• WHEAT AND BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said on Wednesday that it will seek 60,000 metric tons of feed wheat and 20,000 tons of feed barley to be loaded by Feb. 14 and arrive in Japan by March 14, via a simultaneous buy and sell (SBS) auction that will be held on Jan. 17.
• WHEAT TENDER: Algeria’s state grains agency OAIC issued an international tender to purchase a nominal 50,000 tons of durum wheat.
• CORN TENDER: Taiwan’s MFIG purchasing group issued an international tender to buy up to 65,000 tons of animal feed corn, which can be sourced from the United States, Brazil, Argentina or South Africa.

TODAY

ETHANOL: US Weekly Production Survey Before EIA Report

Output and stockpile projections for the week ending Jan. 5 are based on five analyst estimates compiled by Bloomberg.

• Production seen slightly lower than last week at 1.048m b/d
• Stockpile avg est. 23.898m bbl vs 23.579m a week ago
• The EIA in Washington is scheduled to release the report at 10:30am Wednesday

Brazil Soy Exports Seen Reaching 1.30 Million Tns In January – Anec

• BRAZIL SOY EXPORTS SEEN REACHING 1.30 MILLION TNS IN JANUARY VERSUS 0.94 MILLION TNS IN SAME MONTH A YEAR AGO
• BRAZIL CORN EXPORTS SEEN REACHING 3.73 MILLION TNS IN JANUARY VERSUS 4.86 MILLION TNS IN SAME MONTH A YEAR AGO
• BRAZIL WHEAT EXPORTS SEEN REACHING 605,483 TNS IN JANUARY VERSUS 651,163 TNS IN SAME MONTH A YEAR AGO
• BRAZIL SOYMEAL EXPORTS SEEN REACHING 2.03 MILLION TNS IN JANUARY VERSUS 1.43 MILLION TNS IN SAME MONTH A YEAR AGO

Largest Brazil farm coop gets new soy sooner as heat shortens cycle

– Coamo, Brazil’s largest farm cooperative, will receive large volumes of soy by end-January as local growers anticipate speeding up the harvesting cycle due to unusually hot weather, Airton Galinari, head of the business, said on a podcast on Tuesday.

The last time Coamo reported large incoming soy volumes for January was in 2018/2019, five cycles ago, when the firm got almost 20% of all the soy that Coamo received in that season in the first month of the year, Galinari said on the official Coamo podcast.

He could not predict total volumes that will come in this month, but said Coamo is off to a strong start as farmers in Parana state, Brazil’s second-largest producer in the previous soy cycle, brought forward the harvest by between 10 to 15 days due to high temperatures.

“What we are seeing are long days, with sunlight intensity and high temperatures that shorten cycles,” he said.

With the early arrival of the Brazilian soy harvest, port premiums relative to Chicago “fell sharply,” said the Galinari, noting this is despite the expectation of a smaller crop in Brazil’s Center-West.

Soybean premiums at the port of Paranagua fell to 5 cents per bushel, compared to 80 cents at the end of last year, according Cepea/Esalq data.

But as Argentina and Brazil’s Rio Grande do Sul state should produce more soybeans this season than in the last, when a drought spoiled much of their crops, soybean prices have been contained.

“The buyer, knowing that there will be supplies, takes his foot off the gas and that brings down the premiums,” Galinari said.

According to the executive, with the shortening of the soy cycle, yields are being compromised though for now they are on average.

In the west of Parana, he said, yields are we around 55 to 65 60-kilogram bags per hectares.

Brazil’s Parana state facing falling soy yields as dry weather persists – Deral

Parana state, which will likely be Brazil’s third largest soybean producer in the 2023/2024 season, is facing the prospect of lower yields amid dry and hot weather in key areas, some of which are already being harvested.

According to state crop agency Deral on Tuesday, its newest soy crop evaluation shows 71% of fields in “good” condition compared with 86% last week. If rains don’t some soon enough, total state output could come in below a forecast 21.7 million metric tons, Deral said.

EU Soft-Wheat Exports Drop 11% Y/y in Season Through Jan. 7

The European Union’s soft-wheat exports in the season that began on July 1 were at 15.8m tons as of Jan. 7, compared with 17.8m tons a year earlier, the European Commission said on its website.

• NOTE: The report only includes export data for Italy up to Dec. 20
• Leading destinations include Morocco, at 2.25m tons; Nigeria at 1.54m tons; and Algeria, with 1.37m tons
• Barley exports were at 3.17m tons, up 3% y/y
• Corn imports were at 9.03m tons, down 43% y/y

Indonesia approved 53,012 hectares of palm oil replanting in 2023

Indonesia in 2023 approved the replanting of 53,012 hectares (130,995.5 acres) of palm oil trees on land owned by smallholder farmers under a subsidised programme, data from the country’s palm oil funding (BPDPKS) agency showed on Wednesday.

The size of the replanting increased from 30,759 hectares in 2022, but still fell below Indonesia’s annual target. BPDPKS is in charge of distributing subsidies for the replanting of palm oil trees.

Indonesia, the world’s top palm oil producer, set a target to replant 180,000 hectares of palm trees on smallholders’ land every year to boost output without clearing more forest.

Experts said Indonesia urgently needs to replant its palm oil trees as yields have been falling while demand for the vegetable oil rises, including for biodiesel.

The smallholders palm replanting scheme was launched in 2016 and initially targeted replacing around 2.5 million hectares of old trees by 2025. Yet only 326,308 hectares have been approved by the end of 2023, and only 205,524 hectares have actually been planted.

Malaysia December Palm Oil Inventory Fell 4.6% On Month On Lower Output

Malaysia’s palm oil inventory fell 4.6% in December from a month earlier as output declined faster than shrinking exports, official data Wednesday showed.

Palm oil stockpile totaled 2.29 million tons at December-end compared to 2.4 million tons in November, the Malaysian Palm Oil Board said in a statement. Production shrank 13.3% month-on-month to 1.55 million tons from 1.79 million tons.

Exports meanwhile contracted 5.1% to 1.33 million tons in December from 1.41 million tons in November.

The data is preliminary and may be revised later.

US Beef Output Slumps as Blizzard Conditions Close Meat Plants

Severe winter weather is curtailing America’s meat production, with two of the biggest beef packers idling Kansas slaughter plants as blizzard conditions swept through the region this week.

Cargill Inc.’s plant in Dodge City, Kansas, suffered a partial power outage, and 50 workers were temporarily stranded at the plant Monday due to a road closure. The plant will be reopened when power is restored and it’s deemed safe for workers. Tyson Foods Inc. also had a plant impacted in the state.

“We realize that some employees got stuck on the road outside the plant. We are working with local authorities and have hired tow truck drivers to assist them and other motorists,” Cargill said in a statement.

When meat plants close, protein prices can start surging if supplies run thin. Meanwhile, farmers may face lower prices for their livestock with demand for the animals disrupted.

The number of cattle slaughtered in the US fell to 94,000 on Tuesday, compared with 128,000 a year earlier, according to US Department of Agriculture data. It’s the lowest weekday total so far this year.

Tyson Foods canceled two shifts at its beef plant in Holcomb, Kansas, on Tuesday, the company said in a statement. Employees on Monday were offered hot meals and a place to seek shelter amid dangerous travel conditions.

 

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