Global Ag News for Feb 5.24

TOP HEADLINES

Ukraine Corn Plantings Set to Dip in 2024 as Crop Uncompetitive

Ukrainian farmers are expected to plant less corn this year, as the crop isn’t competitive, according to Ukrainian Deputy Agriculture Minister Taras Vysotskyi.

• The area of oilseed crops is likely to grow
• The agriculture ministry is surveying agribusinesses about intended plantings and will release further details later, Vysotskyi told Bloomberg

FUTURES & WEATHER

Wheat prices overnight are down 6 in SRW, down 6 1/2 in HRW, down 4 1/2 in HRS; Corn is down 2 1/2; Soybeans down 3/4; Soymeal down $0.70; Soyoil up 0.16.

Markets finished last week with wheat prices up 1/4 in SRW, up 1/4 in HRW, up 2 in HRS; Corn is unchanged; Soybeans down 6 1/2; Soymeal up $1.80; Soyoil down 0.66.

For the month to date wheat prices are down 1 1/2 in SRW, down 3 1/2 in HRW, up 3 in HRS; Corn is down 8; Soybeans down 34 1/2; Soymeal down $12.20; Soyoil down 1.13.

Year-To-Date nearby futures are down 5.5% in SRW, down 3.7% in HRW, down 3.9% in HRS; Corn is down 6.6%; Soybeans down 8.2%; Soymeal down 7.7%; Soyoil down 6.2%.

Chinese Ag futures (MAY 24) Soybeans down 15 yuan; Soymeal down 10; Soyoil down 48; Palm oil down 36; Corn down 12 — Malaysian Palm is up 38.  Malaysian palm oil prices overnight were up 38 ringgit (+1.01%) at 3802.

There were changes in registrations (-57 SRW Wheat). Registration total: 792 SRW Wheat contracts; 0 Oats; 6 Corn; 495 Soybeans; 125 Soyoil; 1 Soymeal; 104 HRW Wheat.

Preliminary changes in futures Open Interest as of February 2 were: SRW Wheat down 5,877 contracts, HRW Wheat up 2,137, Corn up 6,655, Soybeans up 3,579, Soymeal up 2,615, Soyoil up 3,098.

Brazil: Scattered showers fell across much of the central states and southern states saw some isolated showers as well. Scattered showers should continue across the central all week. Southern areas may have to wait until this weekend for more widespread showers to move in, but they could be significant when they do. Rain showers are expected to be of normal intensity across the central, allowing for a normal pace of field work in most areas. A dry spell last week allowed for good progress of both harvest and planting last week.

Argentina: Surprisingly decent showers went through western areas over the weekend, but most areas of the country remained dry with temperatures up around or over 100F again. Some isolated showers may occur over southern areas early this week with a front getting into the region by Wednesday. That front should finally bring good showers to much of the country later this week and weekend while temperatures will fall back to normal as well. The potentially good rainfall is needed to turn around crop conditions after more than two weeks of dry conditions and a week of 100-degree heat.

Europe: It was again dry and warm across southern growing areas while soil moisture falls for vegetative wheat in Spain and Italy. A storm system will move through southern areas later this week with more impulses through the weekend which will be helpful for reversing the dryness trend. Temperatures will continue to be warm with no threat of an arctic freeze.

Australia: The remnants of Tropical Cyclone Kirrily moved through the outback this weekend and will bring showers through New South Wales on Monday, being favorable for dry areas that continue to have deficits. Drier weather elsewhere in the country is unfavorable for cotton and sorghum that are mostly filling.

Northern Plains: Scattered showers moved through over the weekend. Another storm system will move through Wednesday and Thursday with a mix of rain and snow, but the snow that falls could be hefty across the north. Recent and forecast precipitation will help to ease some of the recent dryness in the region.

Central/Southern Plains: A system moved through with areas of heavy precipitation over the weekend. Significant snow fell in the far northwest near the mountains. A system will move through on Wednesday and Thursday with scattered showers and another will move through southern areas this weekend that could have a mix of heavy rain and snow. Long-term deficits remain in some areas but continue to have an active pattern that is helping to gradually erase them.

Midwest: The region largely missed a storm system this weekend, but southwestern Missouri did get in on a band of moderate to heavy rain. It continues to be very warm and snow continues to melt, boosting soil moisture in a lot of areas. A system will go through Thursday with scattered showers and another will move across southern areas Sunday and Monday. The latter storm could bring a mix of heavy rain and snow to some areas. Temperatures behind that system will decrease, but still stay seasonable.

Delta: A system brought more heavy rain through the region this weekend. Soil moisture is much improved and drought continues to decrease in the region. Water levels along the Mississippi River and local rivers are also much higher, increasing transportation. Scattered showers will move through late week with another storm that could bring heavy precipitation on Sunday.

The player sheet for Feb. 2 had funds: net sellers of 1,000 contracts of SRW wheat, sellers of 4,000 corn, sellers of 6,500 soybeans, sellers of 2,500 soymeal, and sellers of 3,500 soyoil.

TENDERS

• WHEAT SALE: The Taiwan Flour Millers’ Association purchased an estimated 89,650 metric tons of milling wheat to be sourced from the United States in an international tender.

PENDING TENDERS

• 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

SOYBEAN/CEPEA: With supply above the demand, prices drop

Despite weather problems in several regions in Brazil and the lower production compared to that estimated previously, the current supply still prevails over the demand, reinforcing price decreases in the domestic market.

The production is not as limited as indicated by some agents, there is a low volume already traded in advance and losses in Brazilian crops may be counterbalanced by the production increase in Argentina and in Paraguay. As for the demand, the Chinese interest in the national product continues low. As a result, export premiums remain low, pressing down quotes in Brazil.

From January 25 to February 1st, the ESALQ/BM&FBovespa Index (Paranaguá) moved down 2.2%, closing at BRL 118.09 per 60-kg bag on Feb. 1st. The CEPEA/ESALQ Index (Paraná) decreased 3.9% in the same comparison, to close at BRL 111.44 per 60-kg bag. On the average of the regions surveyed by Cepea, soybean prices dropped 4.2% in the over-the-counter market (paid to farmers) and 3.1% in the wholesale market (deals between processors). Dollar quotes downed 0.1% from January 25 to January 1st, at BRL 4.915 on Feb 1st.

BYPRODUCTS – Due to consecutive soybean price drops, quotations of byproducts are also moving down. The demand for soybean meal is low, since purchasers have not been willing to buy new batches in the spot market. As for the soybean oil, although quotations are decreasing, the industry claims to have difficulties to trade because of the gap between prices from sellers and buyers.

On the average of the regions surveyed by Cepea, soymeal prices decreased 1.9% in the last seven days. The Brazilian value of soy oil dropped 1.4%, at 4.791,20 BRL per ton (in São Paulo city with 12% ICMS) on February 1st.

CROPS – According to data from Conab, the soybean harvest reached 8.6% of the area in Brazil up to January 27, more than the 5.2% harvested a year ago.

CORN/CEPEA: Demand is low; Index decreases 10% in January

Despite summer crop harvest advances, the pace of corn trades has not increased this week, and prices continue to move down in most regions surveyed by Cepea. Purchasers continue refrained from closing deals, expecting more price drops. Moreover, decreases for international values and the exchange rate also press down quotations in Brazil, by reducing the export parity. Producers, in turn, are focused on crop activities.

The ESALQ/BM&FBovespa Index (Campinas, SP) downed 9.9% in January. Specifically over the last seven days (from January 25 to February 1), the decrease was 1.3%, closing at BRL 61.45 per 60-kilo bag on Feb. 1st. On the average of the regions surveyed by Cepea, corn values dropped 1.3% in the wholesale market (deals between processors) and 2.1% in the over-the-counter market (paid to farmers) over the last seven days.

In the Southern area in Brazil, the harvest has been advancing and pressing quotations down. In the Southeast, the supply is high, despite the smaller summer crop. In the Central-West, remaining stocks from the 2022/23 season allow producers to increase the availability in the spot market.

Brazil Farmers Harvest 16.22% Of 2023/2024 Soybean Area Versus 9.36% At This Time Last Year – Patria Agronegocios

BRAZIL FARMERS HARVEST 16.22% OF 2023/2024 SOYBEAN AREA VERSUS 9.36% AT THIS TIME LAST YEAR – PATRIA AGRONEGOCIOS

Brazil 2023/24 Soybean Harvest 15.7% Done as of Feb. 2: Safras

This compares with 9% in the previous week, consulting firm Safras&Mercado says in an emailed report.

Works are more advanced compared to the same period of last year, 7.8%, and also surpass average of last 5 years, of 10.4%

Argentina heat wave stirs caution over bumper soy, corn crops

A dry heat wave in Argentina has prompted warnings over growing conditions for grains and the need for rain if soy and corn crops are going to stay on track for bumper harvests.

The South American country, one of the world’s top processed soy exporters and number three for corn, is recovering from a drought-hit harvest last season with the El Nino weather pattern bringing better rains. Corn is expected to be a record harvest.

However, with crops at important growth stages, a period of hot dry weather, with temperatures nearing 40 degrees Celsius (104 degrees Fahrenheit), has seen crop and soil conditions deteriorate, with more days of hot and dry weather ahead.

“First class soybeans were doing very well until this week when the heat began and the lack of rain began to show itself in lower quality lots,” the Rosario grains exchange said in a report, adding this was happening in much of the core region.

“The prospect of a great campaign begins to fade and the first link that gives way is the low quality soils, where there is marked stress and loss of yield.”

It added that the hot weather had seen the area planted with soy that is categorized as in “very good to excellent” condition drop to 65% from 90%, with 10% of batches “fair and bad”. There are chances of showers from Saturday, but with the heat continuing.

The Buenos Aires grains exchange said that the high temperatures and lack of rain had led to a deterioration in water conditions, with water stress in some areas. However, it said around 90% of areas were still “normal/excellent”.

With some lots starting key growth stages, “precipitation will be necessary” for the defining period of performance, the exchange said regarding soy, while adding that in northern areas the final corn planting was being held up by the lack of rain.

China to Raise Wheat Purchasing Price and Boost Grain Yields

China will further increase the minimum purchasing price for wheat to encourage farmers to grow the staple grain and bolster food security in the world’s biggest importer.

The policy guidance for this year and potentially beyond, announced by China’s cabinet in its annual rural policy blueprint over the weekend, came after heavy rains damaged the domestic crop and reduced production last year.

The State Council also said in the so-called No. 1 document that China will focus on boosting yields on a large scale to increase grain production, while at the same time stabilizing planting acreage. This reinforces a policy priority that top officials set for soybean production earlier this year.

As well as being the top buyer of wheat, China is the biggest producer and consumer. The country is also by far and away the largest importer of soybeans for crushing into cooking oil and livestock feed, and the No. 1 corn buyer.

Other policy priorities in the document :

• Support cultivation of soybean varieties with high yield, oil ratio
• Increase consumption of fresh milk products
• Expand agricultural insurance for corn, wheat, rice and soybeans
• Cultivate barren land and saline-alkali land
• Study plan to ask major grain consumption regions to offer financial support to main production areas, to ensure output

Malaysian Palm Reserves Seen Falling the Most in Nine Months

• Inventories in January expected to drop to 2.09m tons: survey
• Output will likely remain low through April, TransGraph says

Palm oil inventories in Malaysia likely declined by the most in nine months in January as production in the world’s second-biggest grower continued to slide. Prices advanced.

Stockpiles fell almost 9% from a month earlier to 2.09 million tons, according to the median forecast of 11 plantation executives, traders and analysts surveyed by Bloomberg. That would be the biggest monthly drop since April and take inventories to the lowest level in six months.

Crude palm oil output slumped about 12% to 1.36 million tons, the lowest in nine months, the survey shows. Exports shrunk 7.5% to 1.23 million tons, the third straight monthly drop.

Heavy rains in several parts of Malaysia in January probably led to lower production and stockpiles, according to Nagaraj Meda, managing director of Hyderabad-based TransGraph Consulting. Output will remain low between February and April, keeping inventories tight in coming months, he said.

Futures in Kuala Lumpur climbed as much as 1.1% to 3,805 ringgit ($800) a ton on Monday, and are on track to snap a four-day decline. Prices briefly climbed above 4,000 ringgit on Jan. 26 due to lower production in Malaysia, but then succumbed to mounting concerns about deteriorating demand.

India’s January palm oil imports hit 3-month low as soyoil shipments rise -dealers

India’s palm oil imports fell to a three-month low in January, as refiners increased buying of rival soyoil due to negative refining margins for crude palm oil (CPO), five dealers told Reuters on Monday.

Lower purchases by the world’s biggest importer of vegetable oils could keep palm oil inventories elevated in top producers Indonesia and Malaysia and weigh on benchmark futures FCPOc3.

January palm oil imports fell 12% from the previous month to 787,000 metric tons, estimates from dealers showed. Crude palm oil imports fell 16% to 541,000 tons last month, they said.

Palm oil imports were down primarily because of a significant decrease in CPO buying, as refiners saw more negative margins compared to refined bleached deodorized (RBD) palmolein, said Rajesh Patel, managing partner at edible oil trader and broker GGN Research.

“Soya Oil imports increased as prices were highly competitive compared to palm products, and refining margins were in positive territory,” he said.

Soyoil imports in January jumped 24% from a month earlier to 190,000 tons, but were far below the monthly average imports of 306,000 tons seen in the last marketing year ended on Oct. 31, dealers estimated.

Imports of soyoil are expected to rise sharply in the coming months, as its premium over palm oil and sunflower oil has decreased, and the oil is now available at par with rival oils, said Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil brokerage.

Industry body Solvent Extractors’ Association of India (SEA) is likely to publish its data on January imports by mid-February.

Sunflower oil imports in January dropped 19% to 211,000 tons as the oil became expensive because of higher freight rates following Houthi attacks on Red Sea shipping, dealers said.

The lower palm oil and sunflower oil imports pulled down India’s total edible oil imports to 1.19 million tons, down 9.2% from a month earlier, dealers said.

India buys palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine.

 Ukraine Farm Exports From Odesa Seaports 14.3M Tons Since August

Ukraine’s agriculture exports from Odesa-region seaports have reached 14.3 million tons since August, when a new Black Sea shipping corridor was set up.

The war-torn nation is pressing ahead with the shipment of commodities, mostly grains, after Russia last summer pulled out of a safe-transit agreement brokered a year earlier by Turkey and the United Nations.

Total shipments via the corridor in the Black Sea patrolled by Ukraine’s troops topped 20 million tons, Ukraine’s Ministry for Restoration said on its Telegram channel, citing the Deputy Prime Minister Oleksandr Kubrakov.

Shipments in January alone were 6.3 million tons, almost on par with the pre-war level, with more than 100 vessels expected to approach the seaports to export another 3 million tons.

Several dozen firms are now using the passage, including large international traders, the ministry said in December.

Key Shipping Route Reopens on Argentina Soy Waterway After Crash

A bulk carrier that crashed into a bridge on Jan. 28 was dislodged on Friday, freeing up navigation on the key shipping channel into the Parana River, the Nabsa shipping agency said in a note to clients.

• NOTE: The Parana is Argentina’s waterway for exporting soy and crops from the “upriver” Rosario region
• The En May carrier was released from the bridge’s support column by tugboats at 11am local time and pulled into a lay berth
• The key Emilio Mitre-Parana de las Palmas shipping channel was re-opened at 12:30pm and navigation will normalize over the coming hours
• NOTE: Over the last few days, with the Mitre channel obstructed, ships could only sail through the Martin Garcia-Parana Guazu channel, which has a shallower draft

Indonesia Sees Peak Rice, Corn Harvest in March-April: Ministry

Indonesia expects harvest period for rice and corn to peak in March-April with production exceeding monthly demand, according to a statement from the agriculture ministry late Sunday.

• Rice production in March may reach 3.51m tons vs monthly demand at 2.5m tons
• Corn production may reach 1.95m ton in March vs demand 1.35m ton
• Govt prepares to buy farmers output to prevent price drop below floor price during harvest

Morocco Wheat Importers Offered Bonus to Help Boost Reserves

Morocco’s state grains agency ONICL is offering a 25 dirhams/ton ($2.5) bonus in order to boost national inventories by up to 1 million tons of soft wheat imports through end-April, according to a statement released on the authority’s website.

The bonus system covers imports of 300,000 tons during both February and March and 400,000 tons during April

US Beef Production Up 2.7% This Week, Pork Rises: USDA

US federally inspected beef production rises to 537m pounds for the week ending Feb. 3 from 523m in the previous week, according to USDA estimates published on the agency’s website.

• Cattle slaughter up 3.1% from a week ago to 637m head
• Pork production up 0.2% from a week ago, hog slaughter rises 0.1%
• For the year, beef production is 4.8% below last year’s level at this time, and pork is 1.4% below

 

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