Global Ag News for Mar 1.24

TOP HEADLINES

China lowers national target for normal retention of breeding sows

China’s agriculture ministry said on Friday it had adjusted the national target for normal retention of breeding sows to 39 million from 41 million.

It also adjusted the lower limit for normal fluctuations in the stock of breeding sows to 92% from 95% of the normal retention level, the Ministry of Agriculture and Rural Affairs said in a statement.

FUTURES & WEATHER

Wheat prices overnight are down 1 3/4 in SRW, down 2 3/4 in HRW, up 1/4 in HRS; Corn is up 1/4; Soybeans up 6 1/4; Soymeal up $1.60; Soyoil up 0.21.

For the week so far wheat prices are up 5 1/2 in SRW, up 19 in HRW, up 12 1/2 in HRS; Corn is up 16 1/4; Soybeans up 5 1/4; Soymeal up $2.80; Soyoil up 0.82.

Year-To-Date nearby futures are down 8.0% in SRW, down 6.2% in HRW, down 9.0% in HRS; Corn is down 11.6%; Soybeans down 11.8%; Soymeal down 13.1%; Soyoil down 5.7%.

Chinese Ag futures (MAY 24) Soybeans up 16 yuan; Soymeal up 28; Soyoil up 68; Palm oil up 76; Corn up 8 — Malaysian Palm is down 4. Malaysian palm oil prices overnight were down 4 ringgit (-0.10%) at 3966.

There were changes in registrations (10 Oats, -77 Soybeans). Registration total: 573 SRW Wheat contracts; 10 Oats; 6 Corn; 842 Soybeans; 396 Soyoil; 1 Soymeal; 56 HRW Wheat.

Preliminary changes in futures Open Interest as of February 29 were: SRW Wheat up 4,782 contracts, HRW Wheat up 4,926, Corn up 4,219, Soybeans down 450, Soymeal up 10,889, Soyoil up 4,944.

Brazil: Wet season showers in central Brazil will be isolated for the rest of this week, but they will fill back in this weekend into early next week. Southern areas will continue to see showers on Thursday as a front waffles around the region. Showers are forecast to be more sporadic and shifting next week, but fairly widespread, which should help with the long-season crops in the south and the safrinha corn in the central.

Argentina: Scattered showers fell across the north on Wednesday as a front waffled around the region. Some heavy rain has fallen there recently. A smaller disturbance will bring limited showers to southern and central Argentina Thursday, but a wave of widespread showers will move through with a front this weekend. Throughout next week, central and southern areas will see isolated showers, but likely nothing heavy or widespread. Showers are not perfect, but as long as they keep coming with enough frequency, crop conditions should remain stable with overall good ratings. Some spots may be missed, however, and see conditions fall.

Europe: A large low has moved into the Mediterranean and will continue to provide showers there for the next couple of days. More systems will move through western Europe into the Mediterranean this weekend and next week, which would be beneficial for Spain and Italy, but be too wet in France and the UK. Temperatures continue to be much warmer than normal across the eastern half of the continent, promoting early awakening from dormancy and growth.

Black Sea: Conditions over the winter have been mostly favorable with frequent enough precipitation events to leave most areas with good soil moisture as wheat begins to awaken from dormancy early due to warmer temperatures. Drier conditions are expected into early next week. A system may develop in the middle of next week with scattered showers. Some colder air may follow that system, which will be watched for anything significant. Snow cover is not in place over much of the region, leaving it vulnerable to any shots of cold air.

Australia: Showers should pop up in variable fashion across much of the country starting Friday. Western areas may see some passes from storm systems this weekend that would be beneficial for building soil moisture; however, conditions may turn dry next week as showers stay east. Soil moisture is low in many areas well ahead of the harvest and subsequent wheat planting and will need much more rain to fall over the next couple of months.

Northern Plains: A massive drop in temperatures kept the region cold on Wednesday, but will quickly rebound to be above normal again on Thursday. Another strong system will move through over the weekend with potential for more snow and strong winds as well as another drop in temperatures. The forecast for the first half of next week is quieter and cooler, but we could see another storm system late in the week.

Central/Southern Plains: Though cold on Wednesday, temperatures will rebound across the north on Thursday and the south on Friday, with the region pushing high temperature records in some places again this weekend. A small system will move across the south with some showers on Thursday with another strong storm possible Sunday and Monday. Thursday’s system will have light precipitation with it and the late-weekend system could produce strong winds and another drop in temperatures. Strong winds have caused expanded wildfires in the region and that could be replicated over the weekend.

Midwest: A quick burst of cold air arrived on Wednesday but temperatures will start rebounding in the west on Thursday, and the east on Friday, pushing record highs again over the weekend. Another storm system is forecast to move through the region Sunday and Monday with similar effects to the storm during the middle of this week. Widespread showers, some snow, strong winds, and severe weather will all be possible. Another round of widespread precipitation is possible by the end of next week or next weekend as another system arrives from the West.

Delta: A cold front provided some isolated showers on Wednesday to southern areas and more showers will follow behind it on Thursday night into Friday. Another system will move through with more showers early next week, which could be heavier. Soil moisture continues to be much improved ahead of spring planting.

The player sheet for Feb. 29 had funds: net buyers of 500 contracts of SRW wheat, buyers of 500 corn, buyers of 3,000 soybeans, and buyers of 1,000 soymeal.

TENDERS

• WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is looking to buy a total of 78,974 metric tons of food-quality wheat from the U.S. and Canada in a regular tender that will close on March 1.
• NO PURCHASE IN CORN TENDER: Algerian state agency ONAB is believed to have made no purchase in a tender for 80,000 metric tons of corn to be sourced only from Argentina or Brazil.
• RICE IMPORT COMMITMENTS: Indonesia’s food procurement company Bulog has secured commitments of 1.2 million metric tons of rice for imports, its chief executive Bayu Krisnamurthi said.

PENDING TENDERS

• RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 88,800 metric tons of rice to be sourced from the United States and China
• WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 metric tons of milling wheat
• CORN TENDER: Taiwan’s MFIG purchasing group 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.
• MILLING WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy up to 120,000 metric tons of milling wheat sourced from optional origins.

TODAY

US Export Sales of Soybeans, Corn and Wheat by Country

The following shows US export sales of soybeans, corn and wheat by biggest net buyers for week ending Feb. 22, according to data on the USDA’s website.

• Top buyer of soybeans: China with 155k tons
• Top buyer of corn: Japan with 492k tons
• Top buyer of wheat: Japan with 89k 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 Feb. 22, according to data on the USDA’s website.

• Mexico bought 14.5k tons of the 32.4k tons of pork sold in the week
• Japan led in beef purchases

Buenos Aires exchange holds grains estimates as rains bring relief to crops

The Buenos Aires grains exchange on Thursday left its forecasts unchanged for the 2023/24 corn and soybean harvest, halting a series of cuts in its estimates as recent rains provided relief to crops. The grains exchange kept at 52.5 million metric tons its forecast for the soybean harvest, while corn estimates remained at 56.5 million tons. Some 72.2% of the country’s soy crops benefited from “adequate/optimal” conditions, up 5.4 percentage points from the previous report by the exchange.

Agricultural powerhouse Argentina is one of world’s largest exporters of processed soybeans, as well as a major corn and wheat supplier.  The first corn crops planted were hurt by a heat wave that ran from January and through the beginning of February, but corn planted after the heat wave benefited from the rains.

EU Trims 2023 Wheat Production Forecast; Boosts Corn

The 2023 wheat harvest is now seen at 125.6m tons, slightly down from a January forecast for 125.9m tons, the European Commission said in a report.

• Wheat import forecast boosted by 0.5m tons to 17.5m tons
• Corn crop raised to 62.3m tons from 61.4m tons
  • Corn import forecast reduced by 1.5m tons to 17.5m tons
• Barley estimate little changed

Russia Monthly Wheat Exports Could Hit Record in Feb.: SovEcon

Russia’s monthly wheat exports could hit a record in February due to more competitive prices, according to SovEcon.

• Sees exports at 3.8m tons, compared with 3m tons a year earlier and 2.6m tons on average
• Doesn’t expect Russian traders to be aggressive sellers “amid low competition and interventions from the Ministry of Agriculture.”
• Sees wheat exports for 2023-24 season at 48.6m tons. By comparison, USDA estimates 51m tons
• “We believe that the market could be too optimistic about total 23/24 shipments and doesn’t properly price in existing bottlenecks.”

Rains Help Argentina Soy, Corn After Heat-Wave Damage: Bourse

Recent rains are bolstering moisture levels for plants, the Buenos Aires Grain Exchange said in a weekly report.

• 73% of soy plants have favorable-to-optimal moisture readings, up from 67% last week
• Harvest of early corn crop has begun
• Production forecasts unchanged at 52.5m metric tons for soy and 56.5m tons for corn
• NOTE: The Rosario Board of Trade last week cut its estimates following a heat wave in the last two weeks of January and first week of February

Soybean oil use for U.S. biofuels production rose to 1,141 million lbs in December -EIA

Soybean oil used to produce biofuels in the United States rose to 1,141 million lbs used in December.

In November, soyoil used in biodiesel production was 1,062 million lbs. Soybean oil remains the largest U.S. biodiesel feedstock.

India 2023-24 Wheat Output Seen Rising to 112M Tons: Ministry

Wheat production in India, the world’s second-biggest grower, may increase from last year’s 110.6 million tons, the agriculture ministry said in a statement Wednesday.

• NOTE: India Sees 114M Tons of Wheat Output in 2023-24: Food Secretary
• NOTE: India to Buy as Much as 32M Tons of Wheat From Farmers: Ministry
• India’s monsoon-sown rice production is estimated at 111.46 million tons, up from 110.51 million tons a year earlier, according to second advance estimates by the ministry
  • Output of rice grown during winter months may total 12.36 million tons in 2023-24
• Output of monsoon-sown corn is seen at 22.72 million tons; winter-sown corn production expected at 9.75 million tons
• Rapeseed output is expected at 12.7 million tons, almost the same as a year ago
• Cotton output is estimated at 32.3 million bales of 170kg each
• Sugar cane production is seen at 446.43 million tons

Paraguay Wraps Up First Soy Harvest That Could Yield 9.5M Tons

Paraguay’s farmers have almost completed the first soy harvest of 2024 that could yield around 9.5 million metric tons of the oilseed, said Hugo Pastore, executive director of grain and oilseed export group Capeco.

• “We are going to finish with a good harvest,” Pastore said in a telephone interview
  • Farmers could plant as much as 600,000 hectares and 850,000 hectares of the second soy and corn crops, respectively
  • Lack of rain in some farming areas has complicated second crop plantings
• Low water in the Paraguay and Parana rivers will lead to shipping delays
  • Parana River is still navigable though not all ports are working
• Paraguay’s soy sector—including farmers, exporters and crushing mills—is seeking a meeting with the European commissioner for the environment Virginijus Sinkevičius during his visit in March
  • NOTE: Sinkevičius will lead a mission to Paraguay, Bolivia and Ecuador to discuss the European Union Deforestation Regulation and other deforestation issues
  • Paraguay has good land use data on a national level, but needs time to comply with EU requirements that each field have geolocation data

China Urges More Stockpiling of Domestic Corn to Bolster Prices

China has called for increased stockpiling of domestic corn supplies in state reserves, a move that’s likely to bolster internal prices and potentially make imports more attractive.

Corn futures in China hit the lowest level in more than three years in January, before staging a recovery after purchases by state stockpiler Sinograin. Still, ample supplies and sluggish demand from the loss-making livestock industry have continued to weigh on prices.

Now the National Development and Reform Commission has urged Sinograin to step up purchases to ensure the stability of the grains market, according to a statement published on the stockpiler’s official WeChat account Thursday. This comes as farmers prepare to plant the new crop.

“Sinograin is expanding the scale of stockpiling, while auctions of imported corn are also suspended, offering support to the market,” Holly Futures, a China-based futures broker, said in a note on Friday.

Corn futures on the Dalian Commodity Exchange are up about 6% from their January lows. As domestic prices increased, international prices fell, making foreign supplies more attractive to traders in the largest importer. Talk of increased Chinese demand for corn from Ukraine and the US has supported Chicago futures, which are holding four days of gains.

“Demand has generally increased as prices fell,” said Ole Houe, chief executive of IKON Commodities in Australia. “The Chinese demand is very encouraging because they’ve been quite timid, particularly in buying from the US.”

In the Chinese market, while more state stockpiling could lift prices, bearish fundamentals are likely to cap gains. Consumption of the feed grain is under pressure as pig farmers suffer losses and the country’s sow herd declines.

French Soft Wheat, Winter Barley Conditions Trail 2023: AgriMer

About 68% of France’s soft-wheat crop was rated in good or very good condition as of Feb. 26, versus 95% this time last year, FranceAgriMer data showed on Friday.

• Winter barley rated good or very good was at 70%, versus 93% last year
• Spring barley was 27% planted, versus 90% at this time last year

Ukraine Starts Sowing Spring Grains in Southern Regions

Farmers in Ukraine’s southern regions have planted 22,300 hectares with spring barley and wheat, Agriculture Ministry says by email.

11,400 hectares of barley and 800 hectares of wheat were sown in Odesa, Kherson, Mykolayiv and Vinnytsya regions

Ukraine Shipped 5.2M Tons of Agricultural Goods Last Month

Ukraine exported 8m metric tons of cargo via bigger Odesa ports in February, including 5.2m tons of agricultural goods, Infrastructure Minister Oleksandr Kubrakov says on social media platform X.

• February shipments mark monthly record since Russia’s invasion started
• 113 vessels are waiting now to be loaded with almost 3m tons of cargo in ports of Odesa, Chornomorsk and Pivdennyi

 

Ample Fertilizer Piles Push Chinese Agricultural Policy Shift

Global phosphate trade gets a supply boost, with China implementing a phosphate-exports quota system and returning to the global market. Increasing domestic fertilizer inventories and record operating rates in China eased government concerns for spring availability. Falling Chinese corn prices signal a domestic-policy achievement.

Rising China Phosphate Inventory Pushes Policy Shift

China’s 2024 phosphate-export quota — aimed at ensuring domestic stockpiles and ratable exports — may cool global prices on increased supply. China represents 30% of the global phosphate trade, and is the marginal producer and swing supplier. The 2024 export quota for phosphates is 6.5 million metric tons, and allows for 8% lower exports than last year. During the ban, which began in 3Q21 and was originally set to last through 2Q22, a spread of more than $500 a ton emerged between Chinese domestic prices and the export equivalent.

Chinese diammonium phosphate stock inventory, a leading indicator for exports, has been rising in 4Q despite export restrictions. 1H is the main Chinese consumption period. Wengfu Group is the largest phosphate producer in China. Nutrien and Mosaic are the biggest publicly traded peers.

White House Is Seen Missing Deadline Tied to Jet Fuel Tax Credit

• Administration had set March 1 deadline for carbon model
• Ethanol industry hopes to benefit from green jet fuel credits

The Biden administration is missing a self-imposed deadline for updating a government tool used to calculate greenhouse gases from the transportation and energy industries, forcing ethanol producers to wait longer to verify that they can qualify for sustainable aviation fuel tax credits.

Federal agencies teaming up to determine how emissions-reduction efforts are valued had previously set a deadline of March 1. The administration won’t meet that deadline, according to people familiar with the matter who asked not to be named because the information isn’t public.

An update to the US Energy Department’s so-called GREET model will determine if US corn ethanol and other raw materials used to make sustainable aviation fuel can qualify for the potentially profitable federal tax credits.

The biofuels and agriculture industries say any changes should take into account climate-friendly practices already happening on American farms, while environmentalists and others argue a more stringent approach is needed to fight climate change.

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

Barge shipments down the Mississippi river increased to 643k tons in the week ending Feb. 24 from 535k tons the previous week, according to the USDA’s weekly grain transportation report.

• Barge shipments of corn rose 5% from the previous week
• Soybean shipments up 38.4% w/w
• St. Louis barge rates were $11.13 per short ton, a decline of $1.84 from the previous week

Brazil health auditors continue to protest work conditions -statement

Anffa, a union group representing health auditors, said they would continue protesting work conditions pending a new round of talks with the government to negotiate better contract terms, according to a statement on Thursday.

The auditors’ labor action has been disrupting issuance of international health certificates, affecting Brazilian meat shipments, according to industry sources.

The protest began on Jan. 22 and new talks are likely to be held next week, Anffa said.

LDC sells Brazil corn processor for undisclosed sum, parties confirm

Louis Dreyfus has reached an agreement to sell a corn processing unit to Brazilian privately owned ingredients company Milhao Ingredientes, both companies said on Thursday. The deal was first reported by newspaper Valor Economico. The Goias-based buyer said the plant had been “on Milhão’s radar for a long time.”

The announcement comes in the same month that Milhao unveiled a deal with Brazilian farming conglomerate Amaggi, which acquired an undisclosed stake in the Goias-based agribusiness group. Milhao produces food ingredients primarily from non-GMO grains.

The unit acquired from LDC, based in the town of Rio Verde, Goias state, caters to the human and animal nutrition industries, and will enable the buyer to double its own production capacity, according to the statement.

“Our objective, with the signing of the agreement (with Dreyfus), is to increase our structure, but without giving up on the quality and excellence that have always guided Milhão’s trajectory,” said Leandro Carneiro, who founded the company together with his brother Luciano Carneiro.

The deal’s finalization hinges on regulatory approvals, the companies said.  Currently, Milhao has a production capacity of 280,000 metric tons per year. Next month, the company plans to open a non-transgenic corn oil plant in the town of Goianira, in Goias state. Neither LDC nor Milhao provided financial details of the transaction.

This month, LDC disclosed a deal to sell another corn processing unit located in Apucarana, Parana state, to Baxi Foods. LDC said the recent agreements to sell the corn processing units “will not impact the company’s other corn-related businesses.”

 

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