Global Ag News for July 25.24

TOP HEADLINES

Canada wheat production up due to unexpectedly high record vegetation density levels

2024/25 CANADA WHEAT PRODUCTION: 33.8 [32.9–34.8] MILLION TONS, UP 1% FROM LAST UPDATE

Unexpected record high crop vegetation densities (NDVI) in the major wheat producing region of Saskatchewan raises 2024/25 Canada wheat production by 1% to 33.8 [32.9-34.8] million tons. Yield estimates are unchanged in Manitoba/Alberta where NDVI’s are near the long-term median, indicating satisfactory crop conditions. Over the past two weeks, dry weather continued with rainfall deficits (up to 25 mm) prevailed over the Western prairies, accompanied by slighter warmer than average weather (1-6 °C above normal). According to LSEG’s latest weather forecast, widespread warm weather will prevail over the crop producing regions of the Canadian prairies throughout the next 10-days, particularly southern Alberta (5-10 mm deficits) where there are currently record low soil moisture levels. Southern Saskatchewan and southwestern Manitoba will likely remain drier than normal (~20 mm deficits).

 

FUTURES & WEATHER

Wheat prices overnight are down 2 in SRW, down 4 in HRW, down 1 1/4 in HRS; Corn is up 1; Soybeans down 1 1/2; Soymeal up $0.20; Soyoil down 0.24.

For the week so far wheat prices are up 2 1/4 in SRW, down 6 1/2 in HRW, down 1/4 in HRS; Corn is up 14 1/4; Soybeans up 26 1/2; Soymeal up $13.30; Soyoil down 0.11.

For the month to date wheat prices are down 28 1/2 in SRW, down 22 3/4 in HRW, down 3 1/2 in HRS; Corn is down 1 3/4; Soybeans down 41 1/2; Soymeal down $14.70; Soyoil up 0.07.

Year-To-Date nearby futures are down 13.2% in SRW, down 12.2% in HRW, down 15.8% in HRS; Corn is down 14.1%; Soybeans down 14.3%; Soymeal down 10.7%; Soyoil down 4.2%.

Chinese Ag futures (SEP 24) Soybeans down 31 yuan; Soymeal down 18; Soyoil down 78; Palm oil down 122; Corn down 28 — Malaysian Palm is down 7.

Malaysian palm oil prices overnight were down 7 ringgit (-0.18%) at 3918.

Markets finished last week with wheat prices up 9 3/4 in SRW, up 3/4 in HRW, up 9 in HRS; Corn is up 14; Soybeans up 19 1/2; Soymeal up $9.30; Soyoil down 0.47.

There were no changes in registrations. Registration total: 424 SRW Wheat contracts; 6 Oats; 50 Corn; 44 Soybeans; 1,182 Soyoil; 0 Soymeal; 0 HRW Wheat.

Preliminary changes in futures Open Interest as of July 24 were: SRW Wheat down 5,722 contracts, HRW Wheat up 3,332, Corn up 4,661, Soybeans up 1,935, Soymeal down 2,066, Soyoil up 1,796.

 

Northern Plains: Heat in Montana is spreading eastward this week, though will become less intense as the week wears on. A cold front will move into the region on Friday and be slow to move out until early next week. Models produce precipitation along the front, but nothing overly heavy or widespread. Another front could produce some showers mid next week with another late next week. Though fronts are coming through, temperatures are still forecast to be above normal next week while shower potential is low. Some issues with dryness and heat will be possible for wheat especially, but also for corn and soybeans. The warmth is somewhat needed for corn and soybeans that had a cool and late start to planting and early development, but they could use some more rain to go along with it.

Central/Southern Plains: Scattered showers and thunderstorms have been moving through the region over the last week, hitting some areas with moderate to heavy rain and completely missing others. But conditions are becoming drier. Some isolated showers are possible the rest of the week, but nothing organized is forecast. A front moving in this weekend and early next week could provide more consistent showers to northern areas, though models are focusing efforts to the north and east. Mild temperatures continue most of this week, gradually moderating closer to or above normal by the weekend and are forecast to be hot next week. The situation is fairly positive for most areas of the region currently, but the turn to hotter and drier could start to have an impact on reproductive to filling corn and soybeans.

Midwest: A front moving through the region will produce limited showers Wednesday and possibly Thursday. Though somewhat active, most areas have seen light or no rain this week while only small areas have seen moderate to heavy amounts. Temperatures will gradually rise this weekend ahead of the next front that will move through with more showers early next week. Another front moves through a few days later with potential for more mid-late next week. Models are producing scattered showers and potential for severe weather with both fronts, but showers are widely scattered and some areas are bound to be missed. Most areas are in good shape at the moment, but the pockets of the region missed by the incoming rain could lead to dryness concerns for reproductive to filling corn and soybeans, especially with temperatures increasing next week.

Delta: Scattered showers will continue to move through as an upper-level low slowly moves through this weekend. With the flow shifting to the south this weekend and fronts moving across the north next week, showers may continue but will probably be limited. Most areas have and will see good rain, though southern areas might have issues with localized flooding if they get hit by multiple thunderstorms over the next few days.

Canadian Prairies: An upper-level ridge has been reluctant to move out of the region and brought heat over the last couple of weeks, especially to Alberta. The ridge will get pushed eastward later this week as a trough moves into British Columbia, bringing better chances for rain to northern Alberta but only sporadic showers farther south and east through the weekend. Dryness is becoming more of a concern with the continued heat and lack of consistent rainfall, unfavorable for wheat and canola in their critical reproductive stages of growth. The heat will likely take a couple of days break this weekend but the region will be on the edge of the ridge next week, which could lead to building heat again, but also the potential for more periods of showers. Models do not have much in the forecast, however.

Europe: A system continues through eastern areas of Europe Wednesday, bringing needed showers to that area. The southeast has been dealing with frequent hot and dry conditions but some rain and a reprieve from the heat is welcome. Another front moves into western areas Friday through this weekend with more unneeded showers for France and Germany, which are too wet in many areas. A couple of disturbances next week could bring more showers through. Spain and Italy will be much drier and could negatively affect crops there as well. Temperatures are more moderate but southeastern areas continue to deal with heat stress when showers do not occur.

Black Sea: A system brought scattered light showers through early this week, not enough to impact the drought for many areas. Another system moving through eastern Europe will catch western areas with showers the next couple of days. But as it moves through the Black Sea this weekend, will probably leave eastern Ukraine and southwestern Russia unfavorably dry. Though not as consistently hot as the last few weeks, near to above normal temperatures will still be stressful for developing corn and sunflowers and damage is being done.

The player sheet for 7/24 had funds: net buyers of 3,000 contracts of SRW wheat, buyers of 5,500 corn, buyers of 2,500 soybeans, buyers of 1,500 soymeal, and sellers of 3,500 soyoil.

 

TENDERS

• WHEAT TENDER: Jordan’s state grain buyer has issued an international tender to buy 120,000 metric tons of milling wheat which can be sourced from optional origins.
• BARLEY TENDER: Jordan’s state grains buyer has issued an international tender to purchase up to 120,000 metric tons of animal feed barley
• NO PURCHASE IN BARLEY TENDER: Jordan’s state grain buyer is believed to have made no purchase in an international tender for 120,000 metric tons of animal feed barley which closed on Wednesday.
• NO PURCHASE IN CORN TENDER: A group of importers in the Philippines is believed to have made no purchase in an international tender for up to 240,000 metric tons of animal feed corn which closed on Wednesday.

PENDING TENDERS

• RICE TENDER: Indonesian state purchasing agency Bulog issued an international tender to buy about 320,000 metric tons of rice.

 

 

 

TODAY

GRAIN EXPORT SURVEY: Corn, Soy, Wheat Sales Before USDA Report

Estimate ranges are based on a Bloomberg survey of six analysts; the USDA is scheduled to release its export sales report on Thursday for week ending July 18.

• Corn est. range 475k – 1,200k tons, with avg of 793k
• Soybean est. range 300k – 1,300k tons, with avg of 930k

 

DOE: US Ethanol Stocks Rise 2.4% to 23.723M Bbl

According to the US Department of Energy’s weekly petroleum report.

• Analysts were expecting 23.481 mln bbl
• Plant production at 1.095m b/d, compared to survey avg of 1.09m

 

CROP TOUR: North Dakota Wheat Seen Above Average After Rain

Hard red spring wheat yield potential was significantly higher than last year in the northwestern part of North Dakota, according to scouts on the second day of the Wheat Quality Council’s three-day crop tour.

• Fields were thick with green plants of a largely uniform height and minimal pressure from crop disease or insects
  • That’s after timely spring planting and ample rains during May and June
• Yield potential averaged about 56 bushels per acre after eight stops in Ward, Mountrail and Burke counties
  • That’s up from 41 bushels per acre on the same route last year
• Typically, some fields would be below-average, while this year is more consistently good, according to crop scout Brian Walker, the director of the National Wheat Foundation
  • “For this point in time on day two, I don’t recall ever seeing anything below 40 bushels per acre,” he said
• NOTE: The crop tour will make full estimates from the second day later Wednesday with final tour results due Thursday

 

CROP TOUR: North Dakota Spring Wheat Yield Up 18% From Year Ago

North Dakota’s hard red spring wheat yields averaged 53.7 bushels per acre on the second day of the Wheat Quality Council’s annual crop tour.

• That’s up about 18% from the second day’s average of 45.7 bushels a year ago
  • Still, it’s below the US Department of Agriculture’s record-high projection of 56 bushels per acre for the state’s yield
  • Crop scouts sampled wheat in 99 hard red spring wheat fields
• Durum wheat yields were estimated at 45.6 bushels acre on 17 fields
  • That’s up from 40.5 bushels per acre last year
• NOTE: Crop tour will make final estimates from the three-day crop tour Thursday

 

Brazil corn season nearing end ahead of schedule amid rapid harvest progress

2023/24 Brazil: 120.1 [116.9–122.3] MILLION TONS, UP 1% FROM LAST UPDATE

Rapid second crop harvest progress amid favorable late season weather increases 2023/24 Brazil total corn production by 1% to 120.1 [116.9–122.3] million tons, as the whole season comes to a close earlier than schedule. Our current median estimate is now 1.9 million tons below the USDA’s World Agricultural Outlook Board (WAOB)’s 122 million tons, which assumes total corn sowings at 21.5 million hectares and national level yield of 5.67 tons per hectare (tph) (vs. LSEG Ag Research’s 21.6 million hectares and 5.55 tph, respectively). Brazil’s agriculture state agency (CONAB) has lately pegged corn production and area at 115.9 million tons and 20.9 million hectares, respectively. As of 21 July, Brazil’s first corn was 97.8% combined according to the latest CONAB crop progress report (22 July), largely in line with last year’s 98.6%. The second safrinha corn is 79.6% combined so far nationally, far ahead of last year’s 47.9%, thanks to favorable warm and dry weather over the past few weeks (with an exception of some areas in the South where wetness prevailed). Even drier weather is in the forecast through next week, which should help Brazilian farmers wrap up the season with little issues.

 

U.S. wheat production up on overwhelmingly positive spring crop conditions

2024/25 U.S. WHEAT PRODUCTION: 53.5 [51.6–55.8] MILLION TONS, UP 2% FROM LAST UPDATE

2024/25 U.S. total wheat production is increased by 2% to 53.5 [51.6–55.8] million tons, thanks to high spring crop condition scores and rapid winter crop harvest progress amid favorable cool weather. Our current median estimate puts national-level winter wheat yield at 51.8 bushels per acre (bpa), up 2.3% from last season and 6.1% above trend yield. This leads to total winter wheat production of 36.4 [35.7–37.5] million tons, up fractionally from previous update. Production of total spring wheat is pegged at 17.1 [15.9–18.3] million tons (with durum and other spring wheat at 2.2 and 14.9 million tons, respectively), up greatly from last update (+9.4%), reflecting 5-year high condition scores amid favorable growing season weather. A recently released Reuters Poll of Analysts (09 July) placed U.S. all wheat production at 1.91 [1.86–1.94] billion bushels, largely in line with our current median estimate, 1.96 billion bushels.

USDA’s latest Crop Progress report (22 July) continues to indicate overwhelmingly healthy spring wheat conditions, with 77% of the crop in the good-to-excellent (GEX) category (vs. 49% last year) and only 5% of the crop in the poor-to-very poor (PVP) category (vs. 16% last year). Vegetation densities derived from satellite imagery remain above historical median levels throughout most major producing areas of the spring wheat belt, suggesting a positive yield outlook. On the other hand, winter wheat harvest is in full swing across the Plains as well as the Upper Midwest and the West, even nearing the end ahead of schedule in many key areas including the top hard red winter (HRW) wheat producers such as Kansas, Oklahoma and Texas. At the national level, the harvest is 76% complete, well ahead of last year’s pace of 65%, and also ahead of the 72% five-year average. Continued mild weather through next week should help both spring and winter crops move through their respective stages with little issues.

 

Australian regulator sues 2 Chinese-owned commodity firms for futures market manipulation

Australia’s securities regulator said on Thursday it has sued two Chinese-state owned commodity-linked companies, alleging they manipulated the ASX24 market for Eastern Australia Wheat futures January 2023 (WMF3) contracts.

The Australian Securities & Investments Commission (ASIC) alleged that COFCO International Australia and COFCO Resources, units of Chinese-state owned food processing operation COFCO Corp, manipulated price of wheat contracts 34 times between Jan. 17, 2022 and March 3, 2022.

COFCO International Australia was not immediately available for comment.

ASIC alleged that COFCO placed orders for WMF3 contracts shortly before the close of the day session of the ASX24 to manipulate the closing price of the contract. This practice is commonly called ‘marking the close’.

This caused “price for WMF3 contracts to not reflect the forces of genuine supply and demand in an open, informed and efficient market,” anong others, the regulator said.

“We allege these companies engaged in a repeated pattern of manipulation to benefit themselves to the detriment of other participants in the market,” ASIC Chair Joe Longo said.

ASIC is now seeking declarations and pecuniary penalties against both COFCO International Australia and COFCO Resources, it said.

 

Bunge, Viterra $34 bln deal heading for conditional EU nod, source says

U.S. grains merchant Bunge and Glencore-backed Viterra’s $34 billion merger deal is heading towards conditional EU antitrust approval, a person with direct knowledge of the matter said on Wednesday.

The companies announced the deal to create one of the world’s largest agriculture trading firms a year ago to better compete with market leaders Archer-Daniels-Midland and Cargill.

Bunge and Viterra earlier this month offered to sell Viterra’s crush and refining plants for oilseeds in Hungary and Poland to allay EU competition concerns.

They will now tweak these offered remedies in return for the European Commission’s approval and following feedback from market participants, the person said.

The Commission, which is scheduled to decide on the deal by Aug. 1, and Bunge declined to comment.

The deal, which has been given a green light in Brazil, faces regulatory headwinds and farm groups’ concerns in Canada.

Bloomberg was the first to report about the imminent EU approval.

 

 

 

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