Global Ag News for May 22.24

TOP HEADLINES

Australian Farm Under Quarantine as Bird Flu Case Investigated

Victoria state is investigating an incident of avian influenza at a poultry farm, which has been pre-emptively placed under quarantine, according to a statement from Australia’s agriculture department.

• Laboratory testing is still being completed, but preliminary results indicate that it’s not the same strain as the one being reported overseas, including in the US and Antarctica
• Further investigations are being carried out to determine the type of virus, including whether it’s a high pathogenicity avian influenza virus
• Australian has enacted its emergency response plans to support the Victorian government

FUTURES & WEATHER

Wheat prices overnight are up 12 in SRW, up 12 1/2 in HRW, up 8 3/4 in HRS; Corn is up 3; Soybeans up 4 1/4; Soymeal up $0.40; Soyoil up 0.45.

For the week so far wheat prices are up 58 1/4 in SRW, up 52 1/4 in HRW, up 36 in HRS; Corn is up 8 1/2; Soybeans up 11 1/4; Soymeal up $4.30; Soyoil up 0.78.

For the month to date wheat prices are up 106 1/4 in SRW, up 78 3/4 in HRW, up 43 1/4 in HRS; Corn is up 14 1/4; Soybeans up 77 1/2; Soymeal up $20.80; Soyoil up 3.25.

Year-To-Date nearby futures are up 13.9% in SRW, up 11.9% in HRW, up 3.7% in HRS; Corn is down 1.9%; Soybeans down 4.2%; Soymeal down 3.3%; Soyoil down 3.7%.

Chinese Ag futures (JUL 24) Soybeans down 5 yuan; Soymeal down 7; Soyoil down 6; Palm oil down 52; Corn up 15 — Malaysian Palm is down 53. Malaysian palm oil prices overnight were down 53 ringgit (-1.35%) at 3868.

There were no changes in registrations. Registration total: 1,479 SRW Wheat contracts; 39 Oats; 747 Corn; 469 Soybeans; 2,589 Soyoil; 85 Soymeal; 0 HRW Wheat. Preliminary changes in futures Open Interest as of May 21 were: SRW Wheat up 5,359 contracts, HRW Wheat up 2,808, Corn up 1,438, Soybeans down 8,564, Soymeal up 961, Soyoil up 426.

 

Northern Plains: Several storm systems will move through over the course of the next week, making for areas of heavy rain. Cooler temperatures in place will stay that way into next week and could cause some snow to mix in at times. Some frosts will not help with germinating crops either.

Central/Southern Plains: Multiple systems will go through the region over the next week with heavy rain both north and east. Southwestern areas that continue to deal with drought are not forecast to see a lot of heavy rain, though thunderstorms that move through could bless limited areas with heavier amounts. Temperatures will fluctuate with fronts moving through, but in general will be cooler across the northwest in Nebraska and warmer across the south.

Midwest: A large system moving through on Tuesday and Wednesday is bringing rounds of heavy rain and severe storms. That may induce flooding in the northwest. The front to the system will settle somewhere near the Ohio River and stay active for the rest of the week. Additional systems will move through the region this weekend and especially early next week that will keep further planting windows short.

Delta: The main storm track will be to the north this week, but a front will settle in the northern portions of the region mid to late week as thunderstorms move through with some heavy rain potential. Additional storm systems may go through this weekend and early next week that could get more of the region active as well.

Canadian Prairies: A system that has wrapped up in the region will continue to develop precipitation in the region Tuesday but could linger some showers through Wednesday. The storm track is farther south but could sneak in some showers to southeastern areas Friday and across the south this weekend. Any rain will continue to make planting progress slower, but also help to ease drought conditions.

Brazil: Another front moves back into southern Brazil on Tuesday and especially on Wednesday with more bouts of heavy rain that will make flooding conditions worse again. That front makes a shift northward for Friday and the weekend, where showers may get into southern safrinha corn growing areas, favorable for any crop it rains on. That front may reload there over the weekend into early next week with some beneficial showers as well.

Argentina: Cold and dry conditions continue this week, though northeastern areas will see some showers with a front midweek. The cold will likely produce more frosts, unfavorable for winter wheat planting and establishment. But drier weather will increase the remaining corn and soybean harvest.

Black Sea: It was dry over the weekend, but temperatures rose and frosts are no longer a threat. Despite the more favorable temperatures, it continues to be very dry in the region and models are cutting back on the precipitation forecast for a couple of fronts moving through. Dryness is becoming critical for wheat that started off in good shape this spring. Summer crops are also dealing with dwindling soil moisture that is unfavorable.

 

The player sheet for 5/21 had funds: net buyers of 3,500 contracts of SRW wheat, sellers of 3,500 corn, buyers of 4,500 soybeans, sellers of 2,500 soymeal, and sellers of 1,500 soyoil.

TENDERS

• CORN SALE: The U.S. Department of Agriculture reported private exporters sold 113,050 metric tons of U.S. corn to Mexico and 110,000 metric tons to Spain.
• SOYBEAN SALE: Chinese importers are believed to have purchased at least two shipments of soybeans from the United States in the past few days, grain traders in Europe and the U.S. told Reuters. The precise volume was unclear, though one European trader said two consignments were bought on Monday for July shipment from the U.S. Pacific Northwest coast, with the buyer believed to be a Chinese state organization purchasing for reserves.
• SOYMEAL PURCHASE: The Korea Feed Association (KFA) in South Korea purchased up to 60,000 metric tons of soymeal to be sourced from optional origins in a private deal on Monday without issuing an international tender
• SOFT MILLING WHEAT TENDER: Tunisia’s state grains agency issued an international tender to purchase an estimated 100,000 metric tons of soft milling wheat.
• NO PURCHASE IN WHEAT TENDER: Jordan’s state grain buyer is believed to have made no purchase in an international tender to buy 120,000 metric tons of milling wheat which closed on Tuesday

PENDING TENDERS

• DURUM EXPORT TENDER: Turkey’s state grain board TMO has issued an international tender to sell and export 75,000 metric tons of durum wheat.
• WHEAT TENDER: Jordan’s state grain buyer has issued an international tender to buy up to 120,000 metric tons of milling wheat which can be sourced from optional origins

 

 

TODAY

ETHANOL: US Weekly Production Survey Before EIA Report

Output and stockpile projections for the week ending May 17 are based on eight analyst estimates compiled by Bloomberg.

• Production seen higher than last week at 1.017m b/d
  • Would be the highest in six weeks
• Stockpile avg est. 24.399m bbl vs 24.489m a week ago
• The EIA in Washington is scheduled to release the report at 10:30am Wednesday

 

China buys US soybeans as Brazilian prices firm

Chinese importers are believed to have purchased at least two shipments of soybeans from the United States in the past few days, grain traders in Europe and the U.S. told Reuters on Tuesday. The precise volume was unclear.

One European trader said two shipments each of about 65,000 metric tons were bought for July shipment. A second European trader said two consignments were bought on Monday, also for July shipment from the U.S. Pacific Northwest coast, with the buyer believed to be a Chinese state organization purchasing for reserves.

The pace of China’s buying of U.S. soybeans has slumped this year, as the world’s top soybean purchaser has increasingly turned to cheaper supplies from South America. The U.S. Department of Agriculture also has not reported any U.S. soybean sales to China for the 2024-2025 marketing year, according to agency data.

Traditionally, Brazil ships most of its soybean crop from March to June. But floods in key producing state Rio Grande do Sul Rio have disrupted this season’s harvest, cut the state’s soy production estimates and led to extensive livestock losses.

And over the past three weeks, export premium prices for Brazilian yellow soybeans have turned higher, prompting buyers to scout for deals elsewhere.

“Brazilian export premiums are firming sharply as their export season goes past its peak, so U.S. soybeans are looking more attractive,” one European trader said. “This is opening a window for the U.S. but the Chinese are still buying in Brazil, though.”

China’s soybean imports from Brazil rose 11.7% in April from a year earlier, as fresh Brazilian beans continue to arrive at Chinese ports from flood-hit Brazil, Chinese customs data showed on Monday.

Meanwhile, Chinese soybean imports from the U.S. in the first four months of the year were down 40% from a year earlier.

 

Brazil Soy Exports Seen Reaching 13.83 Million Tns In May Versus 14.13 Million Tns Forecast In Previous Week

• Brazil:
  • So far it has been the driest May on record and Ukraine’s winter and spring grain crops rely on soil moisture deposited in April
  • Low temperatures in early May have helped retain some moisture in the soil
  • Winter crops are in good conditions. However, spring crops are not developed enough to get moisture from deeper layers of soil
  • The regions most impacted are Dnipropetrovsk, Kherson, Odesa, Kharkiv, Donetsk and Zaporizhzhia regions
  • NOTE: Ukraine plants all of its corn, sunflower, soybean in spring and also some wheat, barley and rapeseed

 

Brazil Flood-Led Soy Losses Seen at Up to 3 Million Tons: Cogo

The floods that have devastated southern Brazil are seen slashing soybean output by 2.5 million to 3 million metric tons, local consulting firm Cogo said in a report.

• Rio Grande do Sul state now seen producing roughly 20 million metric tons of the oilseed
• Summer corn crop estimate trimmed by 400,000 tons to 4.73 million tons

 

EU Soft Wheat Export Fall 8% Y/y in Season Through May 3

The European Union’s soft-wheat exports in the season that began July 1 were at 26.3m tons by May 3, compared with 28.6m tons a year earlier, the European Commission said on its website.

• Leading destinations include Morocco with 3.58m tons, Nigeria at 2.76m tons, Algeria with 2.47m tons
• Barley exports were at 5.1m tons, down 17% y/y
• Corn imports were at 15.7m tons, down 36% y/y
• NOTE: Click here for figures on oilseed trade
• NOTE: Data run until May 3 due to a technical issue, commission says
• Data for Ireland missing as of August 2023; import figures for Bulgaria available until Jan. 10, 2024, while similar figures for Hungary are available until Nov. 27, 2023

 

China boosts farmer protection with nationwide insurance for major grains

China’s Finance Ministry on Tuesday announced the nationwide implementation of full-cost insurance and planting income insurance policies for rice, wheat and corn, as part of a food security drive to encourage planting of staple grains.

The policy is aimed at improving the level of agricultural insurance protection, stabilizing farmers’ income, supporting the revitalization of rural areas and safeguarding food security, according to a notice released with the Agriculture Ministry and the State Administration of Financial Supervision.

The step up in farmer protection comes as the world’s largest agriculture producer and buyer, which commonly faces crop-damaging natural disasters, pursues food self-sufficiency and lower dependence on imports.

In April, China lost 379,500 hectares of crops to floods, droughts, sandstorms, earthquakes, forest fires, and freezing temperatures that caused direct economic losses of 14.81 billion yuan ($2.05 billion), the Emergency Management Ministry said last week.

The full cost insurance covers income losses from major natural disasters, pests and diseases, accidents, wild animal damage and other risks, while the planting income insurance covers losses caused by fluctuations in agricultural product prices and output.

In line with Beijing’s goal to consolidate the country’s fragmented and predominantly smallholder-owned farms, the policy, while including small and moderate-sized farmers, will focus on “the leading role” of agriculture business entities.

The policy permits village collectives to organize small farmers into taking out collective insurance policies and pay out benefits to their households.

The notice, which was released on Tuesday, will be backdated to apply from Jan. 1, 2024, and protects all farmers and organisations involved in agricultural production.

 

Indonesia April Palm Oil Exports Fall 0.008% M/m: Intertek

Indonesia’s palm oil exports fell 0.008% m/m in April, according to Intertek Testing Services.

• Palm oil exports were unchanged at 1.845m tons
• Crude palm oil shipments fell to 116,039 tons from 191,419 tons in March
• RBD palm olein shipments fell to 690,501 tons from 742,387 tons in March
• RBD palm oil shipments rose to 435,940 tons from 323,052 tons in March
• Palm oil sales to European Union rose to 466,494 tons from 328,380 tons in March
• Palm oil sales to India fell to 476,310 tons from 642,054 tons in March
• Palm oil sales to China fell to 209,069 tons from 266,567 tons in March

 

LIVESTOCK SURVEY: US Cattle on Feed Placements Seen Down 5.4%

April placements onto feedlots seen falling y/y to 1.66m head, according to a Bloomberg survey of ten analysts.

• This would be the lowest placements for April since 2020
• Estimates range from -13.5% to +4.5% y/y change
• Feedlot herd as of May 1 seen falling by 0.8% y/y to 11.56m head
• Marketings seen rising 9.3% y/y
• The USDA is scheduled to release its cattle on feed report at 3pm ET on May 24

 

Active weather pattern to impact crops across North America this week – LSEG Commodities Research & Forecast

• Cold conditions with local frost will continue to hamper wheat/rapeseed plantings in Canda through this week before the weather improves afterward
• A strong cyclonic activity will pose a threat of local damage for the U.S. winter wheat and slowdown soybean/corn sowings again in the Midwest
• A warming trend should arrive in the next week along with drier conditions across crucial crop areas of North America

PAST WEATHER

Canada: The last week featured relatively cool and wet conditions across the Canadian Prairies. Temperatures were 1-2 °C cooler than normal on average and most crop areas recorded near-normal rainfall or slight surpluses. Considering widespread soil moisture deficits, conditions were favorable but precipitation totals were insufficient to significantly reduce downside risks.

U.S.: Warm and dry conditions prevailed across most of the Midwest and U.S. Plains during the last week. Temperatures were 4-8 °F above normal, while precipitation was 5-15 mm below the average. Soil moisture is at a healthy level in most of the Midwest after decent rains at the end of April/early May, while deficits exist locally in the main Hard Red Winter (HRW) wheat areas in Kansas.

FORECAST

CANADA:

Cool conditions will continue for the next 5-6 days before a warming trend arrives afterward. Temperatures will be 2-6 °C below normal across the Canadian prairies, with local frost events in southern Saskatchewan and Manitoba. At the same time, the areas of Alberta and Manitoba are likely to receive moderate precipitation, with the potential for excessive surpluses in SE Manitoba. From early next week, temperatures will grow to 1-4 °C above normal with the accompaniment of dry conditions.

Crop impact: Wheat/rapeseed plantings will continue to be hampered this week due to cool temperatures, but soils in some areas in Alberta and Manitoba should benefit from local rains. The arrival of a warm/dry pattern in the next week will support the acceleration of the planting pace.

UNITED STATES:

As a cool air mass approaches the Central/Northern U.S. from the Northwest, cyclonic activity will increase over the next 5 days across most of the spring and winter crop areas. The 5-day precipitation totals are likely to reach from 20-25 mm (~1 in) above normal in Central Plains and SW Midwest, to 50-80 mm (~2-3 in) across Northern Plains, NW and S Midwest, as well as the northern states of Southeast (see map below). It will be accompanied by a drop of temperatures to 2-6 °F below normal at the end of this week and early next week. From the mid-next week, a gradual warming trend should arrive, while the main precipitation activity will be pushed to the South and Northeast U.S.

Crop impact: Cool conditions and high precipitation activity will slow down corn/soybean plantings again through the next 7 days, which was able to pick up the pace last week after significant delays in early May. At the same time, strong precipitation/wind activity will pose a threat of local damage to winter wheat. The forecasts for early June give some optimism toward more favorable weather for planting progress and crop development.

 

 

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