Global Ag News for July 15.24

TOP HEADLINES

Pakistan Halts Flour Exports as Millers Go On Strike

Pakistan’s government halted exports of flour milled with imported wheat as millers went on strike to protest the imposition of a new tax on their product.

The import of wheat shall also remain prohibited across all categories, the commerce ministry said in notifications on Friday.

Prime Minister Shehbaz Sharif’s government is facing criticism for hiking taxes and energy prices to secure a loan deal with the International Monetary Fund. Inflation quickened in June for the first time in six months as energy costs inched up.

In March, permission for flour exports was given exclusively to millers who imported wheat for the purpose of selling them overseas.

The current year’s output of wheat will be 2.3 million tons less than the target of 32 million tons, according to the national food security ministry. Still, that figure is expected to be 5.4% higher than last year’s.

 

FUTURES & WEATHER

Wheat prices overnight are down 12 3/4 in SRW, down 11 1/4 in HRW, down 6 1/4 in HRS; Corn is down 4 3/4; Soybeans down 14 3/4; Soymeal down $1.90; Soyoil down 0.91.

Markets finished last week with wheat prices down 32 1/2 in SRW, down 20 3/4 in HRW, down 26 1/4 in HRS; Corn is up 2 1/4; Soybeans down 49; Soymeal down $9.20; Soyoil down 3.58.

For the month to date wheat prices are down 35 1/2 in SRW, down 29 3/4 in HRW, down 21 3/4 in HRS; Corn is down 10 3/4; Soybeans down 53 1/2; Soymeal down $23.30; Soyoil up 0.89.

Year-To-Date nearby futures are down 14.3% in SRW, down 13.3% in HRW, down 18.3% in HRS; Corn is down 16.0%; Soybeans down 15.8%; Soymeal down 13.0%; Soyoil down 4.4%.

Chinese Ag futures (SEP 24) Soybeans down 52 yuan; Soymeal down 66; Soyoil down 44; Palm oil down 46; Corn down 19 — Malaysian Palm is down 25.

Malaysian palm oil prices overnight were down 25 ringgit (-0.64%) at 3890.

There were changes in registrations (-50 Corn, 32 Soybeans, -36 Soyoil, 40 Soymeal). Registration total: 524 SRW Wheat contracts; 7 Oats; 238 Corn; 187 Soybeans; 1,519 Soyoil; 40 Soymeal; 0 HRW Wheat.

Preliminary changes in futures Open Interest as of July 12 were: SRW Wheat up 2,397 contracts, HRW Wheat down 993, Corn down 5,305, Soybeans up 10,129, Soymeal up 1,163, Soyoil up 5,373.

 

Midwest: U.S. Midwest weather will trend cooler this week. High temperatures will eventually fall to the 70s and 80s with lows dropping from the 60s and 70s Monday down to the 50s and lower 60s Friday and Saturday. Scattered showers and thunderstorms are expected through most of the next ten days supporting summer crops favorably especially with the cooler weather coming.  Seasonable temperatures and additional sporadic showers and thunderstorms are expected as the end of the month approaches.

Canadian Prairies: Western Canada Prairies crops may be facing some moisture trouble again and the return of more serious drought after a highly favorable spring season. Soil assessments Friday clearly showed the loss of topsoil moisture and an increase in crop stress. Cooling has occurred and will continue for a little while this week, but another heatwave is coming and rainfall for AT LEAST the next ten days will be minimal leading to increasing crop stress and the return of more serious drought conditions in the west.

 

The player sheet for 7/12 had funds: net sellers of 7,000 contracts of SRW wheat, buyers of 7,500 corn, sellers of 3,000 soybeans, sellers of 1,500 soymeal, and sellers of 3,500 soyoil.

TENDERS

• WHEAT PURCHASE: South Korea’s Feed Leaders Committee (FLC) purchased around 65,000 metric tons of animal feed wheat in a private deal without issuing an international tender
• NO PURCHASE IN CORN TENDER: South Korea’s Major Feedmill Group (MFG) is believed to have rejected all offers and made no purchase in an international tender to buy up to 140,000 metric tons of animal feed corn.
• SOYBEAN IMPORTS: China’s soybean imports in June rose 10.7% from a year earlier, a Reuters’ calculation of customs data showed, as buyers stocked up on cheaper Brazilian beans ahead of the North American export season in the fourth quarter.

PENDING TENDERS

• CORN TENDER: Taiwan’s MFIG purchasing group has issued an international tender to buy up to 65,000 metric tons of animal feed corn which can be sourced from the United States, Brazil, Argentina or South Africa
• WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy 120,000 metric tons of milling wheat that can be sourced from optional origins.
• BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase up to 120,000 metric tons of animal feed barley.

 

 

 

 

TODAY

Brazil soybean growers to plant 1.9% bigger area in 2024/25, says Safras

Brazil’s 2024/25 soybean crop, which farmers will begin to sow in September on an area whose size could exceed last season’s, could grow by 13% and reach 171.54 million metric tons, consultancy Safras & Mercado said on Friday.

Brazil’s soy planting is poised to increase in practically all producing states, but at a smaller pace in relation to previous harvests, according to Safras, which projects farmers will sow soy on 47.33 million hectares (116.9 million acres), an area1.9% larger than in 2023/24.

Farmers will not increase the soy area as much as in previous years because of smaller soy prices on global markets, Safras & Mercado analyst Luiz Roque said in one of the first reports regarding the outlook for the new soy season.

“In any case, as the oilseed is still a more profitable option than other crops in most states, once again farmers will choose to advance area,” he noted.

In the south of Brazil, after a season of losses in Rio Grande do Sul and Parana due to adverse weather conditions, farmers face the challenge of sowing a new crop amid the possibility of a new La Niña, Safras said.

In particular, Rio Grande do Sul’s farmers have faced financial difficulties after consecutive droughts and most recently flooding, which destroyed part of their 2023/24 soy at the tail end of the season.

In both Parana and Rio Grande do Sul states, according to Safras, the soy area would grow timidly to avoid climate risk.

 

SOYBEAN/CEPEA: Prices drop significantly in Brazil; liquidity is low

Soybean values moved down sharply in the domestic market this week. The decrease is related to favorable weather conditions in the Northern Hemisphere, to the large output in South America and to the weak Asian demand over the last days, a scenario that pressed down quotations in both domestic and international markets.

The USDA indicated that crops in good or excellent conditions accounted for 68% of the total up to July 7, higher than the 51% verified in the same period last year. It is worth noting that the 2023/24 global season is likely to hit the record of 395.91 million tons, also according to the USDA. The 2024/25 crop may also be a record, at 422.26 million tons.

Still, sellers are waiting for price rises, while purchasers bet on new decreases.

The ESALQ/BM&FBovespa Index (Paranaguá) moved down 5.4% from July 4-11, closing at BRL 134.96 per 60-kg bag on July 11. The CEPEA/ESALQ Index (Paraná) decreased 5.6% in the same comparison, to close at BRL 129.89 per 60-kg bag yesterday.

On the average of the regions surveyed by Cepea, soybean prices in the over-the-counter market (paid to farmers) dropped 4% from July 4-11. In the wholesale market (deals between processors), quotations also downed 4%.

BYPRODUCTS – On the average of the regions surveyed by Cepea, soymeal prices decreased 3.2% between July 4 and 11. Quotations followed drops observed for soybeans and were also influenced by estimates indicating higher processing activities to produce soybean oil, which can generate a surplus of soybean meal.

The soy oil quotations, on the other hand, upped 0.3% in the same comparison, at BRL 5.933,11 per ton (in São Paulo city with 12% ICMS) on July 11. The increase is linked to the higher demand, especially to produce biodiesel.

 

CORN/CEPEA: Supply increases in the Central-West and prices drop

Corn prices continue to move down in most regions surveyed by Cepea, especially in the Central-Western Brazil, where the second crop supply is higher, due to the progress of the harvesting. Moreover, estimates released this week indicating higher output also influenced price drops.

Despite decreases, purchasers are unwilling to close trades, expecting more significant price drops. Sellers, in turn, are operating in the domestic market.

On the average of the regions surveyed by Cepea, corn values decreased 1.3% in the wholesale market (deals between processors) and 2.4% in the over-the-counter market (paid to farmers) between July 4 and 11. Specifically in the Central-West, values dropped 5.6% in Dourados (Mato Grosso do Sul state) and 4.2% in Rio Verde (Goiás state), considering the wholesale market.

On the other hand, the ESALQ/BM&FBovespa Index (Campinas, SP) rose 0.7% from June 27 to July 4, closing at BRL 56.49 per 60-kilo bag on July 11.

PROJECTIONS – Conab indicates that the second crop may total 90 million tons, against 88.11 million tons forecast in June, but still 12% smaller compared to the previous crop. As for the first and the third crops, Conab estimates production at 23.44 and 2.4 million tons (-14% and +12% in relation to the season before).

Considering the three crops, the national corn output is projected at 115.85 million tons, 12.2% lower than that in the season before. Adding this volume to initial stocks (7 million tons) and to imports (2.5 million tons), the Brazilian availability would be at 125.42 million tons. The domestic demand is forecast by Conab at 84.25 million tons and exports, at 33.5 million tons. Thus, by late January 2025, ending stocks would reach 7.67 million tons, 8.5% more than in the crop before.

PORTS – At the port of Paranaguá (PR), quotations moved down 2.5% between July 4 and 11. In Santos (SP), prices dropped 2.1% in the same comparison. US dollar values decreased 0.7% over the last seven days, closing at BRL 5.444 on July 11.

SHIPMENTS – According to data from Secex, corn exports totaled 223.56 thousand tons in the first five working days of July, and the daily average is 80% smaller than that verified in June/23. Anec indicates that international sales are likely to amount 4 million tons in July.

HARVEST – Conab indicated that the harvesting of the first and second crops hit 95% and 61.1% of the total, respectively, until July 7, moving up 1.4 percentage point and 13.2 p.p., in the same order.

As for the second crop in Mato Grosso, 76.28% of the area had been harvested until July 5 (data from Imea). In Paraná, activities reached 66% – data from Seab/Deral.

 

Palm Oil Seen Averaging 3,850 to 4,000 Rinngit/Ton in 2024: MPOA

Benchmark palm oil futures on Bursa Malaysia are seen averaging 3,850 to 4,000 ringgit/ton this year, according to a statement from the Malaysian Palm Oil Association, citing an address by chief executive Joseph Tek.

• That compares to last year’s average of 3,800/ton
• Malaysia’s crude palm oil production reached 8.88m tons in 1H 2024, up about 10% y/y
  • However, reduced rainfall in 1H could weigh on upcoming production
• Labor shortages continue to hamper harvesting and crop recovery
• CPO production costs are rising; national average is currently 2,800 to 3,000 ringgit/ton

 

Malaysia secures $49 mln in palm oil trade deals with China

Malaysia has secured more than 230 million ringgit ($49.23 million) via four palm oil trade deals involving local firms and companies in China, the Malaysian plantations and commodities ministry said on Monday.

 

US Weekly Beef and Pork Production Estimates: USDA

US federally inspected beef production rises to 506m pounds for the week ending July 13 from 441m in the previous week, according to USDA estimates published on the agency’s website.

Cattle slaughter up 15.1% from a week ago to 601m head

Pork production up 16.6% from a week ago, hog slaughter rises 17.3%

For the year, beef production is 1.6% below last year’s level at this time, and pork is 1.2% above

NOLA, Inland Ammonium Sulfate Plunge for Fill Program

Ammonium sulfate prices plunged at New Orleans (NOLA) and in the Midwest with the announcement of a summer fill program from AdvanSix. Midwest terminals dropped to $305-$325 a short ton (st), down from the last prompt offers at $405-$435, while NOLA barges fell sharply to $255-$275 from the last confirmed spring business at $385-$390. NOLA and inland urea were flat from last week, with phosphate and potash also largely unchanged on very limited trading. Ammonia prices rose in the Midwest with the launch of fall prepay programs from producers, firming to $470-$490/st in the Southern Plains, $500-$510 in the Corn Belt and $515-$525 in the Northern Plains, up from recent prompt offers in the mid-$400s and earlier summer fill prices ranging from $330-$375 in the Southern Plains to $390-$410 in the Corn Belt and Northern Plains.

 

 

 

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