Global Ag News for Dec 15.23

TOP HEADLINES

El Niño Nears Historic Intensity With Threat of Weather Havoc

• Warming across the Pacific may be in the top five since 1950
• Worst impacts more likely but not guaranteed as El Niño peaks

El Niño is threatening to become one of the most intense events of its type in history as the weather pattern approaches its peak strength in the coming weeks.

The phenomenon is driven by warming waters across the equatorial Pacific, and the odds of rising ocean temperatures have gone up — amplifying El Niño’s influence over global weather patterns. There’s now a 54% chance water temperatures will reach 2 C (3.6F) above normal across the key region, according to the US Climate Prediction Center. Those odds were calculated at 35% just a month ago.

Such warming would make this El Niño “historically strong” and among the top five most intense ones since 1950, the center said. The agency forecasts a 75% chance that this event will persist as late as May before the Pacific starts returning to its neutral state.

A washed out road after torrential rainfall and flash floods in Kenya on Nov. 22.

El Niño plays havoc on weather around the world, fueling storms across the southern US as well as drought and wildfires in Australia. It has been blamed for bad coffee harvests in Vietnam and cocoa woes in Africa. It’s already hurting soybean crops in the central part of Brazil.

The weather pattern has already put 2023 on track to be one of the hottest years on record, with the Arctic reaching record highs.

A persistent El Niño could bring more storms and colder weather to the US South from December through February along with milder conditions across the northern states and parts of Canada. Still, forecaster Michelle L’Heureux said such circumstances aren’t guaranteed, as the relatively mild winter across the northern US is also being reinforced by climate change and trends that tend to bring warm conditions.

“A strong event increases the likelihood of the impacts, but doesn’t ensure them,” L’Heureux said by telephone.

FUTURES & WEATHER

Wheat prices overnight are up 1/2 in SRW, up 1 1/4 in HRW, up 7 1/4 in HRS; Corn is unchanged; Soybeans up 3/4; Soymeal up $0.10; Soyoil up 0.11.

For the week so far wheat prices are down 15 1/2 in SRW, down 21 1/4 in HRW, down 4 in HRS; Corn is down 5; Soybeans up 13 1/4; Soymeal up $0.70; Soyoil down 0.26.

For the month to date wheat prices are up 17 1/4 in SRW, down 5 1/4 in HRW, down 5 in HRS; Corn is down 3 1/4; Soybeans down 29 1/2; Soymeal down $18.30; Soyoil down 2.23.

Year-To-Date nearby futures are down 22.2% in SRW, down 28.0% in HRW, down 22.7% in HRS; Corn is down 29.2%; Soybeans down 13.2%; Soymeal down 15.5%; Soyoil down 22.1%.

Chinese Ag futures (JAN 24) Soybeans up 15 yuan; Soymeal down 6; Soyoil up 2; Palm oil up 20; Corn down 1 — Malaysian Palm is up 11.  Malaysian palm oil prices overnight were up 11 ringgit (+0.30%) at 3699.

There were changes in registrations (-89 SRW Wheat, -59 Oats, -108 Corn, 85 Soyoil). Registration total: 2,346 SRW Wheat contracts; 159 Oats; 325 Corn; 596 Soybeans; 147 Soyoil; 0 Soymeal; 318 HRW Wheat.

Preliminary changes in futures Open Interest as of December 14 were: SRW Wheat down 1,161 contracts, HRW Wheat up 27, Corn down 113, Soybeans down 711, Soymeal down 1,128, Soyoil down 3,840.

Brazil: Wet season showers in Brazil have become very isolated and are forecast to be that way through early next week. That means that temperatures will also be very high, creating another round of stressful conditions for soybeans that are moving toward setting pods. Heavier rain is forecast to come back in during the middle of next week and continue through January, a more favorable set of conditions if the damage over the next week can be limited. Southern Brazil is seeing somewhat of a break from the heavy rain of the last few months with limited showers through the weekend. Another front will bring showers back early next week, but the amounts are not forecast to be all that heavy. If true, this would be a more favorable outlook for developing corn and soybeans.

Argentina: Several systems are bringing widespread moderate to heavy showers through the country through early next week. The weather for next week looks drier, but conditions continue to be very favorable for the remaining planting and early development of corn and soybeans.

Australia: A storm system developed brought limited showers to eastern areas over the last few days and continues for another day or two as well, somewhat favorable for developing cotton and sorghum. Another system will scrape through southern areas Sunday into early next week, but may perk up some showers across the northeast as a front settles in and a disturbance moves in from the east. Western areas continue to have dryness and drought concerns.

Northern Plains: Above-normal temperatures will continue for the next couple of weeks, sometimes being well above normal. It will also be largely dry, though some snow will be possible across the east Friday.

Central/Southern Plains: A system continues to produce scattered showers in the region through Friday night. Precipitation may be heavy in some areas and just cold enough for some snow in the southwest. That should help with remaining areas of drought across Texas and Oklahoma, with potential for reduction in Kansas as well.

Midwest: A system will move through Friday through the weekend with scattered showers, but mostly in the form of rain outside of the far north. Otherwise, warm and dry conditions are expected through the end of next week.

Delta: A system will likely bring showers through on Saturday. Water levels on the Mississippi River have been rising from last week’s precipitation and more this weekend could help them from falling too much next week.

The player sheet for Dec. 14 had funds: net buyers of 3,000 contracts of SRW wheat, buyers of 2,000 soybeans, buyers of 500 soymeal, and  sellers of 1,500 soyoil.

TENDERS

• SOYBEAN SALES: The U.S. Department of Agriculture reported that exporters sold 400,000 metric tons of U.S. soybeans to “unknown destinations” for delivery in the 2023/24 marketing year that began Sept. 1.
• WHEAT PURCHASE: South Korea’s Major Feedmill Group (MFG) has purchased about 60,000 metric tons of animal feed wheat in a private deal without issuing an international tender.
• RICE TENDER: Egypt’s state grains buyer the General Authority for Supply Commodities (GASC) set a tender on Thursday 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 is Dec. 21 and they should be accompanied by three samples, of two kilograms each, GASC said.
• WHEAT TENDER: Saudi Arabia’s state wheat buying agency GFSA on Thursday said it has issued an international tender to purchase 715,000 metric tons of milling wheat.
• FOOD WHEAT PURCHASE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 102,493 metric tons of food-quality wheat from the United States and Canada in a regular tender that closed on Thursday.

PENDING TENDERS

• NON-GMO SOYBEAN TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued international tenders to purchase around 20,000 metric tons of food-quality soybeans free of genetically modified organisms (GMOs)
• CORN TENDER: South Korea’s Major Feedmill Group (MFG) has issued an international tender to purchase up to 140,000 metric tons of animal feed corn to be sourced from optional origins
• CORN, SOYMEAL TENDERS: Algerian state agency ONAB issued new international tenders to purchase up to 200,000 metric tons of animal feed corn and 70,000 tons of soymeal
• FOOD WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is looking to buy a total of 102,493 metric tons of food-quality wheat from the United States and Canada in a regular tender that will close on Dec. 14.
• SUGAR TENDER: Egypt’s General Authority for Supply Commodities (GASC) announced on Tuesday a tender to import 50,000 metric tons of raw sugar from any origin on behalf of the Egyptian Sugar & Integrated Industries Company (ESIIC). Deadline for offers is Dec. 16.
• WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 metric tons of milling wheat
• MILLING WHEAT TENDER: Jordan’s state grain buyer has issued an international tender to buy up to 120,000 metric tons of milling wheat that can be sourced from optional origins
• FEED BARLEY TENDER: Jordan’s state grains buyer has issued a new international tender to purchase up to 120,000 metric tons of animal feed barley
• MILLING WHEAT TENDER: Bangladesh’s state grains buyer issued another international tender to purchase 50,000 metric tons of milling wheat.
• WHEAT TENDER: A government agency in Pakistan issued an international tender to purchase and import 110,000 metric tons of wheat.

TODAY

US Export Sales of Soybeans, Corn and Wheat by Country

• Top buyer of soybeans: China with 718k tons
• Top buyer of corn: Mexico with 670k tons
• Top buyer of wheat: China with 1.12m tons
• Figures are for total old and new crop sales, and in thousands of metric tons

US Export Sales of Pork and Beef by Country

The following shows US export sales of pork and beef product by biggest net buyers for week ending Dec. 7, according to data on the USDA’s website.

• Mexico bought 20k tons of the 41.1k tons of pork sold in the week
• Japan led in beef purchases

CROP SURVEY: US November Soybean Crush Seen at 186.2M Bushels

Projections are based on a survey of seven analysts conducted by Bloomberg News on Dec. 13-14.

• Soybean crush seen 3.9% higher vs November of last year, and a decline of 1.9% vs a month ago
• Oil stocks at the end of last month seen at 1.116b lbs vs 1.63b a year earlier

Argentine Soy, Corn, Wheat Estimates Dec. 14: Exchange

The Buenos Aires Grain Exchange releases weekly report on website.

• 2023-24 corn and soybean planting estimates both unchanged
• Corn planting advanced to 49% complete from 40% in the previous week
• Soybean planting advanced to 60% complete from 52%

Argentina farm groups say oppose grains tax hikes; analyzing measures

Argentine farm associations met with the new government on Thursday to analyze planned tax hikes that would affect exports of corn and wheat, several of the agricultural groups announced, with most adding that the measure would hurt local producers.

The Argentine Rural Confederations (CRA) said on X, formerly Twitter, that it had met the government but “flatly rejected” a plan that would raise levies to 15%. Wheat and corn exports are currently taxed at 12%. Soybeans are already taxed at 33%.

“We express clearly our rejection of the taxes, since among other negative aspects, they mean a death blow to regional economies,” CRA said.

“However, honoring consensus as a tool of democratic construction, we will participate in the technical and political dialogue groups that will analyze the measures.”

Argentina’s new government of libertarian President Javier Milei is looking raise export taxes to 15% on some grains, Reuters reported on Wednesday, as it seeks funds to help dig out of the country’s worst economic crisis in two decades.

The South American country is a top exporter of processed soyoil and meal, the No. 3 for corn and an important wheat producer. The government is battling to replenish net foreign currency reserves analysts estimate at $10 billion in the red.

CONINAGRO, another major local farm association, said in a post on X that it had met with the government to analyze the measures, sharing a quote saying tax hikes would badly hurt producers and adding it had given feedback on the measures.

Argentina reopens grains export registry after temporary pause

Argentina’s government has reopened its grain export registry, according to a government statement on Thursday, which is needed to allow companies from the key agricultural supplier to ship major crops like processed soybeans and corn.

The move follows a sharp devaluation of the local peso currency, along with other economic measures announced by the new government of President Javier Milei. The registry was closed on Monday.

The registry is where exporting companies legally inform the Argentine government of deals, which is required before exports can depart Argentina.

Exports from Argentina’s vast farm sector are the main source of foreign exchange for the economy, which is mired in a prolonged economic crisis.

Argentina’s new government led by libertarian President Javier Milei will seek to raise export taxes to 15% on some grains, though that would not impact tariffs on soy, an industry source told Reuters on Wednesday.

Milei’s government on Tuesday unveiled an economic plan aimed at preventing hyperinflation in the South American country, even though near-term price inflation is expected to keep rising.

India Nov. Vegetable Oil Imports Rise to 1.16m Tons: SEA

India’s vegetable oil imports rose to 1.16m tons in November from 1.03m tons in October, according to the Solvent Extractors’ Association of India.

• Palm oil imports rose to 863,492 tons from 695,076 tons in October
• Soybean oil imports rose to 149,894 tons from 135,325 tons in October
• Sunflower oil imports fell to 128,707 tons from 153,780 tons in October

Indonesia to Set Dec. 16-31 CPO Reference Price $767.51/Ton

The trade ministry to set crude palm oil reference price for December 16-31 period at $767.51 per ton, Farid Amir, director for export of agriculture and forestry products at the ministry, says in a text message.

The reference price will lower CPO export tax for the period to $18/ton from $33/ton and the additional levy to $75/ton from $85/ton

Ukraine’s Grain Exports Drop 23% Y/y in Season to Dec. 15

Ukraine’s grain exports stood at about 15.3 million tons in the period from July 1 through Dec. 15, down 23% from same period last year, data released by Agriculture Ministry showed.

• Total includes:
  • 6.5 million tons of wheat, down 13% y/y
  • 933,000 tons of barley, 39% y/y
  • more than 7.7 million tons of corn, down 29% y/y

China corn breeders ready for doubling of GMO planting in 2024 -sources

Chinese corn breeders are preparing for the planting of more than double the amount of genetically modified corn next year than in 2023, three industry sources said, with Beijing expected to tightly control for a second year the rollout of GMOs.

GMO corn will be allowed on around 10 million mu, or about 670,000 hectares (1.66 million acres), in eight provinces next year, including the northeastern province of Liaoning for the first time, said one of the sources, who was briefed on a proposal discussed at a meeting held by the agriculture ministry last month.

The source declined to be identified because the plan is not public and could still change.

The other two sources, who are familiar with the situation, also said GMO seed developers and breeders are preparing for the planting of around 10 million mu. The mu is a Chinese area measurement equal to about 1/15 of a hectare.

“Everyone is waiting for certificates before they’re able to sell,” said one of the sources, adding the documents could be issued in a month.

Beijing permitted planting of about 4 million mu, or 270,000 hectares, of GMO corn this year in what it described as trials but has not yet issued any public guidance for 2024.

Despite the increase, the new amount would account for just 1.5% of the almost 44 million hectares expected to be sown with corn this spring.

“It’s growing, but in a very controlled, regulated fashion in terms of what you can sell and where you can sell it,” said the source, adding that no information was yet available on how the seed would be priced.

The Ministry of Agriculture and Rural Affairs did not respond to a fax seeking comment on the plan.

China is the world’s second-largest corn grower and has become the largest importer in recent years amid rising demand for feed for its huge herd of pigs and chickens.

Bird flu spreads in Europe with a delay after warm autumn

Bird flu is spreading fast in Europe but arrived later this year after a warm autumn delayed migration of wild birds, the main carriers of the virus that led to the death of millions of poultry in the past years, scientific agencies said on Thursday.

Although highly pathogenic avian influenza (HPAI), commonly called bird flu, is harmless in food, its spread is a concern for governments and the poultry industry due to the devastation it can cause to flocks and a risk of human transmission.

The virus usually strikes during autumn and winter and has been spreading in many European countries over the past weeks but with a delay compared with previous years.

A increase in outbreaks had previously been observed at the beginning of October, whereas this year the rise has only taken place from November, the European Food Safety Authority (EFSA), the European Centre for Disease Prevention and Control (ECDC), and the EU reference laboratory (EURL) said in a joint report.

“The later rise in HPAI virus detections in wild birds may be due to a later autumn migration of several wild waterbird species following a relatively warm autumn period,” they added.

The report notes that the severe bird flu virus was detected in wild birds and mammals in the Antarctic region for the first time.

Meanwhile, ECDC assessed that the risk of bird flu infection in Europe remains low for the general public. Despite indications of mammal-to-mammal transmission, no mammal-to-human transmission of the H5N1 virus in circulation in Europe has been observed, they added.

It was too early to predict whether a similarly high number of bird flu outbreaks as in the previous years or a reduction due to development of some level of immunity in previously affected wild bird species would be observed, they also said.

River Rhine in south Germany remains closed to shipping

Parts of the river Rhine in south Germany remained closed to shipping on Friday after heavy rain and melting snow increased water levels, but could reopen later this weekend, navigation authorities said.

Rhine river shipping remained stopped around Maxau and Speyer in south Germany, the German inland waterways navigation agency WSA said.

The southern sector of the Rhine around the chokepoint of Maxau was closed on Tuesday after rain and a sudden rise in temperatures melted snow in south Germany raised water levels.

Shipping on northern sections of the river is operating normally, despite a rise in water levels, including the important points of Duisburg, Cologne and Mannheim.

Water levels in southern regions are falling and it is possible that shipping could resume through Maxau on Sunday, said the water level forecasting service of said the Rheinland-Pfalz state government in south Germany.

High water means vessels do not have enough space to sail under bridges and the blockage at Maxau prevents vessels sailing to Switzerland.

The Rhine is a major shipping route for commodities including minerals, coal and oil products such as heating oil, grains and animal feed. The Rhine has repeatedly suffered from low water levels because of unusually dry summers in recent years.

US Miss. River Grain Shipments Fall, Barge Rates Decline: USDA

Barge shipments down the Mississippi river declined to 605k tons in the week ending Dec. 9 from 717k tons the previous week, according to the USDA’s weekly grain transportation report.

• Barge shipments of corn fell 18% from the previous week
• Soybean shipments down 5% w/w
• St. Louis barge rates were $13.05 per short ton, a decline of $0.68 from the previous week

 

Interested in more futures markets?  Explore our Market Dashboards here.