Global Ag News for Sept 7.23

TOP HEADLINES

Malaysia Set to Limit Retail Sales of Rice to 100Kg Per Person

Malaysia will limit rice purchases to 100kg per person from Friday, Paddy and Rice Regulatory Division Director-General Azman Mahmood said on Thursday.

Azman said the limit would continue until supply concerns ease

FUTURES & WEATHER

Wheat prices overnight are down 2 1/2 in SRW, down 5 in HRW, up 2 in HRS; Corn is down 1 1/4; Soybeans down 9 1/4; Soymeal down $2.90; Soyoil down 0.56.

For the week so far wheat prices are up 11 in SRW, up 21 3/4 in HRW, up 24 3/4 in HRS; Corn is up 3; Soybeans down 2 1/4; Soymeal down $3.30; Soyoil down 1.47.

For the month to date wheat prices are up 4 1/2 in SRW, up 17 1/4 in HRW, up 17 3/4 in HRS; Corn is up 6 1/4; Soybeans down 1 3/4; Soymeal down $7.70; Soyoil down 0.66.

Year-To-Date nearby futures are down 26.6% in SRW, down 15.9% in HRW, down 19.4% in HRS; Corn is down 30.5%; Soybeans down 10.5%; Soymeal down 14.9%; Soyoil up 1.9%.

Chinese Ag futures (NOV 23) Soybeans down 55 yuan; Soymeal up 26; Soyoil down 74; Palm oil down 96; Corn up 1 — Malaysian Palm is down 53. Malaysian palm oil prices overnight were down 53 ringgit (-1.37%) at 3828.

There were no changes in registrations. Registration total: 3,005 SRW Wheat contracts; 741 Oats; 0 Corn; 0 Soybeans; 67 Soyoil; 85 Soymeal; 312 HRW Wheat.

Preliminary changes in futures Open Interest as of September 6 were: SRW Wheat up 704 contracts, HRW Wheat up 2,492, Corn up 18,783, Soybeans up 3,763, Soymeal up 1,802, Soyoil up 4,426.

Northern Plains: A system moved through the Northern Plains with significant rainfall Monday and Tuesday along with a major drop in temperatures. Variable, though mild, temperatures and some sporadic showers will follow through the weekend, which may affect maturing corn and soybeans.

Central/Southern Plains: A front is moving through with more seasonable temperatures for the Central Plains. The Southern Plains will continue to be hot. The front will waffle in the region through the weekend, being pushed through early next week. Scattered showers will be possible, but most likely as the front moves next week. Some rain may be significant for filling corn and soybeans that can still take advantage, though that’s becoming less and less.

Midwest: A system will continue to move through the Midwest on Wednesday and Thursday, which may bring some areas of moderate rainfall. Temperatures behind the system are moderating to near normal, flushing out the heat from the weekend. Another front will move through this weekend into early next week, bringing another round of mild temperatures and the potential for rain. With crops maturing, the percentage that can take advantage of some of these late rains is dwindling. 

Delta: Rain fell in the Delta this weekend into early this week. A front will be in the region for the rest of the week and could bring rain at times. Another front will move through mid-late next week with scattered showers as well. Rain is coming too late to help with much of the soybean or cotton crop as they start to reach maturity. 

Brazil: A system brought heavy rain to southern and south-central Brazil over the long weekend, which may have caused some flooding damage to filling wheat and mature corn that has been awaiting harvest. The front may bring more showers to central Brazil on Wednesday. Another front will move through later this week and weekend, with the potential for heavy rain in southern areas. Flooding damage may outweigh the benefits of heavy rain at this juncture in the season, especially if the pattern remains active for the rest of September. Improved soil moisture over central areas is favorable once the daily wet season showers develop. 

Argentina: Widespread moderate to heavy rain fell across most of Argentina over the weekend, highly favorable for easing the drought and prepping soils before spring planting. Winter wheat will certainly benefit. Another front and system will move through Wednesday and Thursday, though showers will be better for northeastern areas than elsewhere. The pattern remains active through at least mid-September with multiple systems lining up. Conditions become much more favorable as planting season approaches.

The player sheet for Sept. 6 had funds: net buyers of 5,000 contracts of SRW wheat, sellers of 500 corn, buyers of 5,500 soybeans, buyers of 1,500 soymeal, and  sellers of 1,500 soyoil.

TENDERS

• WHEAT TENDER: A group of South Korean flour mills issued a tender to purchase around 95,000 metric tons of milling wheat to be sourced from the United States and Canada.
• FEED WHEAT AND BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said it will seek 60,000 metric tons of feed wheat and 20,000 tons of feed barley to be loaded by Dec. 31 and arrive in Japan by Feb. 29 via an auction to be held on Sept. 13.

PENDING TENDERS

• WHEAT TENDER: A Syrian state grains agency issued an international tender to purchase and import 200,000 metric tons of soft milling wheat.
• CORN AND SOYMEAL TENDER: Iranian state-owned animal feed importer SLAL issued two international tenders to purchase up to 180,000 metric tons of animal feed corn and 120,000 tons of soymeal.
• RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 21,700 metric tonnes of rice all to be sourced from China.

TODAY

China August Imports

General Administration of Customs says on website.

• Soybean Imports 9.362m Tons
  • Soybean imports YTD rose 17.9% y/y to 71.654m tons
• Edible vegetable oil imports in Aug. 955,000 tons
  • Edible vegetable oil imports YTD rose 114.4% y/y to 6.229m tons
• Meat (including offal) imports in Aug. 627,000 tons
  • Meat (including offal) imports YTD rose 7.5% y/y to 5.112m tons
• Fertilizer exports in Aug. 3.404m tons
  • Fertilizer exports YTD rose 34.1% y/y to 18.901m tons

ETHANOL: US Weekly Production Survey Before EIA Report

Output and stockpile projections for the week ending Sept. 1 are based on six analyst estimates compiled by Bloomberg.

• Production seen lower than last week at 997k b/d
• Would be the lowest since May
• Stockpile avg est. 21.468m bbl vs 21.609m a week ago

Brazil 2022-23 Corn Crop Seen at 131.9M Tons: Conab

Output est. raised from 130m tons, Brazil’s national supply co. says in its monthly report.

• Yield seen higher at 5,922 kg/ha vs 5,855 kg/ha last month
• Area planted raised to 22.267m ha vs 22.196m ha last month
• Soybean production seen little changed at 154.6m tons

Brazil soy exports seen reaching 7.32 mln tns in September – Anec

• BRAZIL SOY EXPORTS SEEN REACHING 7.32 MILLION TNS IN SEPTEMBER VERSUS 3.58 MILLION TNS IN SAME MONTH A YEAR AGO- ANEC
• BRAZIL CORN EXPORTS SEEN REACHING 9.67 MILLION TNS IN SEPTEMBER VERSUS 6.85 TNS IN SAME MONTH A YEAR AGO- ANEC
• BRAZIL SOYMEAL EXPORTS SEEN REACHING 2.07 MILLION TNS IN SEPTEMBER VERSUS 1.75 MILLION TNS IN SAME MONTH A YEAR AGO- ANEC

StoneX brokerage sees US 2023 corn yield at 175.0 bu/acre

Commodity brokerage StoneX SNEX.O on Wednesday lowered its estimate of the average U.S. 2023 corn yield to 175.0 bushels per acre (bpa) from 177.0 in its previous monthly report released on Aug. 2.

The firm lowered its corn production forecast to 15.102 billion bushels from 15.274 billion previously.

For soybeans, StoneX cut its forecast of the U.S. 2023 yield to 50.1 bpa from its Aug. 2 figure of 50.5. The firm forecast U.S. soybean production at 4.144 billion bushels, down from 4.173 billion previously.

U.S. soybean production slightly down again amid another heatwave across central Soy Belt – Refinitiv Commodities Research

2023/24 U.S. SOYBEAN PRODUCTION: 113 [108–117] MILLION TONS, DOWN <1% FROM LAST UPDATE

2023/24 U.S. soybean production is fractionally (<1%) lowered to 113 [108–117] million tons, reflecting declining vegetation densities, adverse impacts from the recent/expected heat waves and lack of moisture throughout the Plains and Upper Midwest. In August’s WASDE (11 August), USDA placed U.S. soybean production at 114 million tons, down from its July estimate of 117, slightly above our median projection. The average of a Reuters poll of analysts’ own estimates (07 August) placed national-level yield at 50.9 bushels per acre (with a range of 49.3 to 51.6 bushels per acre) and production at 4.21 billion bushels (with a range of 4.10 to 4.27 billion bushels). Our current estimates put yield and planted area at 50.0 bushels per acre and 84.5 million acres, respectively. Our planted area estimate is down 3% from last season, which is now 1 million acres above the USDA’s latest estimate of 83.5 million acres.

The latest Crop Progress report (05 September) set national-level estimates of soybean setting pods at 95%, ahead of last year’s 94% and the 5-year average of 94%. Soy in the dropping leaves stage was estimated at 16%, largely in line with the five-year average at the national level. No growth curve shift is expected this season, unlike during the 2022/23 season when significant planting delays/slow crop progress coupled with unfavorable growing conditions had greatly hampered the overall crop development and eventually slashed the output. This also effectively lowers the chances of the crop being significantly affected by October freeze events, unlike the same time last year. Crop conditions continue to remain poor despite recent slight improvements, with now 53% of the crop in the good-to-excellent (GEX) category (vs. last year’s 57%). Vegetation density levels in key areas of the central Soy Belt have started to decline, warranting attention. We expect the national-level final yield to end up above last season’s 49.5 bushels per acre, but likely well below trend yield.

ETHANOL: US Weekly Production Survey Before EIA Report

Output and stockpile projections for the week ending Sept. 1 are based on six analyst estimates compiled by Bloomberg.

• Production seen lower than last week at 997k b/d
  • Would be the lowest since May
• Stockpile avg est. 21.468m bbl vs 21.609m a week ago

Brazil Exports Record Amount of Corn to China in August: MDIC

Brazil’s Trade Ministry updates its website with exports by country of destination for August.

• Corn shipments of 2.3m tons to China helped push Brazil total corn exports to a record 9.3m tons
  • This passes the previous record of 7.4m tons in Aug. 2022
• Soybean shipments to China rose 45% in August vs the same period last year
  • Jan.-Aug. shipments to China reached a record 56.7m tons

Russia to Work Out Grain Supply With Turkey, Qatar Soon: IFX

All agreements in principle on grain supplies to Turkey with the assistance of Qatar have been reached, Interfax reports, citing Russian Deputy Foreign Minister Alexander Grushko.

• In the near future, parties will start working out technical details on grain supply to Turkey
• NOTE: Russia has proposed an arrangement that would see 1 million tons of Russian grain supplied at a preferential price to Turkey, where it could be processed and shipped onto countries in need
• NOTE: Sept. 4, Putin, Erdogan Talks End Without Reviving Ukraine Grain Deal

Kernel Exported 92k T of Grain, 98k T of Sunflower Oil in Aug.

Kernel also exported 67k tons of sunflower meal in Aug., according to its preliminary update.

• Export volumes were undermined by the challenges the company faces, such as the inability to export goods through Ukrainian Black Sea ports and the ongoing Russian attacks on Ukrainian Danube port infrastructure, which have severely disrupted river export logistics
• Says strike on Sept. 6, targeting its assets in the Danube ports, didn’t cause significant damage, although the operational activity of such assets was disrupted
• Says strike on Sept. 3 in the Danube region resulted in the complete destruction of two flat storages with a combined storage capacity of 5 thousand tons, while another two flat storages with the same capacity suffered damage and temporarily cannot be used for grain accumulation

Russia Drones Hit Odesa Region Port Facilities Overnight: Kiper

Russian drones damaged port infrastructure, grain silo, and an administrative building in the south of Odesa region overnight, regional governor Oleh Kiper says on Telegram.

• One person was injured
• This was the fourth barrage of drone strikes against Ismail area over the past five days

Ukraine Starts Grain Exports Via Croatia Ports: Economy Minister

Ukrainian grain is already being exported via Croatian ports, Economy Minister Yulia Svyrydenko said on the cabinet’s website.

• Svyrydenko didn’t elaborate on volumes of grain being shipped via Croatia, described it as “niche direction”
• NOTE: Russia hit port infrastructure, grain silo in Ukraine’s south overnight

Russian attacks on Ukraine’s Danube ports to slow down grain exports-Romanian president

Russian attacks on Ukraine’s Danube river ports will slow down the export of grains and other routes need to be enhanced, Romanian President Klaus Iohannis said.

Since July, when Moscow abandoned a deal that lifted a de facto Russian blockade of Ukraine’s Black Sea ports, it has repeatedly struck Ukrainian river ports that lie across the Danube from Romania.

Romania’s Black Sea port of Constanta is Ukraine’s largest alternative export route, with grains arriving by road, rail or barge on the Danube. Ukraine is one of the world’s biggest grain exporters.

President Iohannis, speaking late on Wednesday at a summit of Three Seas Initiative countries in Bucharest, said: “Of course the attacks on Ukrainian ports on the Danube are a huge problem. Of course it will in a way slow down exports.”

“We will enhance the other routes, we accepted Ukrainian maritime transports through our Romanian territorial waters off the Black Sea, we will continue to enhance exports on the rail and on the road.”

Speaking at the same press conference, Croatian Prime Minister Andrej Plenkovic said his country had offered access to the Mediterranean through its ports and that its transport ministry was working with the European Commission and Ukraine.

Romania is one of five eastern EU countries alongside Bulgaria, Hungary, Poland and Slovakia that saw a surge of Ukrainian grain imports since the Russian invasion, which distorted local markets and prompted protests from farmers, leading the EU to approve temporary trade restrictions.

Speaking by video link at the summit, Ukraine’s President Volodymyr Zelenskiy urged the countries not to extend the ban.

“Ukraine is strongly against any further restrictions on the export of our grain,” he said.

“Farmers in different countries use Ukrainian feed for the benefit of their farms. Companies from different countries make money on transit. And this is a benefit for the entire European economy.”

The import ban expires on Sept. 15 and the five states have asked the European Commission to extend it.

Poland, Hungary, Slovakia Push for Ukraine Grain Ban Extension

• The three states warn of disruption to markets, people say
• Talks show 13 EU member counties don’t support an extension

Poland, Hungary and Slovakia are continuing to push for extending a ban on grain imports from Ukraine until the end of the year, warning of disruptions to their domestic markets, according to people familiar with the issue.

The three states along with Bulgaria and Romania only allow the transit of Ukrainian grain through their territory in an arrangement that expires on Sept. 15. Bulgaria, though voicing concerns, remained flexible at a meeting of ambassadors from European Union countries Wednesday, said the people who asked not to be named on confidential talks.

Another official said that Romania will not seek a unilateral ban. Bulgaria will insist on extending the ban for sunflower, unrefined oil and powdered milk, but not for wheat, Agriculture Minister Kiril Vatev said last month.

Finding a solution is becoming more urgent as the deadline nears. Janusz Wojciechowski, European commissioner for agriculture, wants the ban prolonged until year-end while also offering subsidies to Ukrainian companies to support the cost of Ukrainian grain transit through Europe. The European Commission, the bloc’s executive arm, has yet to take a decision on whether to support the ban extension.

Thirteen member states including France, Germany and Austria do not support the extension, the people said. Poland and Hungary also propose transferring financial support directly to Ukrainian exporters, which France disagrees with, they added.

Illinois Firm Invests $250 Million to Double Soy Crush

• Incobrasa will boost biodiesel, edible oil production
• Companies are flocking to Illinois, top soybean grower of US

Incobrasa Industries Ltd. is investing over $250 million to more than double its soybean crush capacity in Illinois.

The company broke ground on an expansion at its plant in Gilman that will boost biodiesel production, oil refining and bottling. The company also is building a crushing facility that will increase processing capacity to more than 83 million bushels a year, up from 43 million now.

Incobrasa is one of several companies, including Marquis Energy LLC and Bunge Ltd., to expand their footprints in Illinois, the leading soybean producer in the US. Production of soybean oil for renewable diesel is soaring after the US and Illinois offered subsidies to produce the green diesel.

Incobrasa’s biodiesel plant will double production to 150 million gallons a year and the refinery upgrade will boost capacity to 85 million pounds per month from the current 47 million pounds, the company said. The edible oil facility will produce 11 million bottles of cooking oil per month, up from current 7 million. Incobrasa is also building a 50-acre solar array to power the complex.

The company said the new plant is expected to start operating at end of 2025, slowly increasing capacity until the project concludes in 2030.

Mexico Could Modify GMO Corn Ban to Appease US, Canada: Linea

Mexico could modify the presidential decree that bans imports of genetically modified corn in order to appease the US and Canada and avoid the possibility of tariffs from a dispute settlement panel, Agriculture and Rural Development Minister Victor Villalobos told Bloomberg Linea.

Villalobos said he hopes a panel would not necessarily conclude that tariffs should be imposed on Mexican products: Linea

Brazil Nitrogen Prices Spike on News of Indian Urea Tender

Urea prices jumped $100 a metric ton in Brazil following news of an unexpected tender call in India on Sept. 4, with ammonium sulfate also firming. Potash prices stabilized in Brazil with buyers moving slowly, while phosphates declined slightly amid thin supply for soybean 2023-24 preparations.

Urea Prices Surge in Wake of Indian Tender

Urea prices in Brazil surged roughly 30% on Sept. 4, to $450-$455 a metric ton (mt) cost-and-freight (CFR) vs. last week’s $340-$355. The $100 increase was fueled by news of the latest India tender and doubts about the Chinese government granting export permits. The stronger urea market also bolstered ammonium sulfate higher, with prices climbing 27.5% to $215-$225/mt CFR from last week’s $170-$175, despite an over-supplied market. Mono-ammonium phosphate (MAP) prices in Brazil slipped to a flat $530/mt CFR vs. last week’s $530-$535, while potash remained at the previous $350-$360/mt CFR range with rumors of sanctioned product available at lower prices.

Major China Fertilizer Maker Curbs Exports as Local Prices Jump

• CNAMPGC Holding Co. will reduce shipments to secure supply
• Urea on Zhengzhou exchange up almost 40% since mid-June

A major Chinese fertilizer producer will reduce shipments as authorities urge companies to firm up supplies after prices jumped.

China’s CNAMPGC Holding Co. will trim exports to secure supplies and maintain fertilizer prices at stable levels, the top state-owned exporter of crop nutrients said in a statement over the weekend. Urea futures traded on the Zhengzhou Commodity Exchange have surged almost 40% since mid-June.

Demand for urea from the agriculture and industrial sectors has been strong, while rising exports — mainly to India — has also contributed to higher domestic prices, said Gavin Ju, an analyst with CRU based in Beijing.

Should more Chinese fertilizer companies implement similar restrictions on overseas shipments, that could raise costs for importers from Brazil to India that would need to seek alternative supplies. It also adds another element of volatility to global agriculture markets, which have grappled with extreme weather and other export curbs in 2023.

China’s measures could boost overall nutrient prices globally, reversing a retreat from record highs reached last year. The nation is the world’s biggest fertilizer producer and accounted for about 30% of global trade before the country implemented curbs in 2021.

China typically builds stockpiles from October to March to prepare for planting in spring, but the recent price jump has raised concerns for authorities. The China Agricultural Means of Production Association said in a statement over the weekend that companies should spare no effort in securing domestic fertilizer supplies to contribute to food security.

The association added that the government will take a series of measures to intervene and stabilize the market, and urea prices should ease to stable levels as new domestic production capacity starts in the fourth quarter.

China’s fertilizer exports reached over 15 million tons in the first seven months of 2023, up around 36% from a year ago, according to customs data.

 

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