Global Ag News for Mar 14.24

TOP HEADLINES

Australia’s Canola Crop Seen Boosted by Deluge in Western State

• Area of barley and wheat planted in Western Australia may fall
• Livestock farmers could benefit as rains revitalize pastures

Heavy rains in Western Australia, the country’s top grain producing state, should allow farmers to plant more canola, although the increase could come at the expense of crops like barley and wheat.

At the beginning of March, the Grains Industry of Western Australia had expected canola plantings to fall as much as 25% from last year. But the recent deluge is now expected to cap the drop at 12% as farmers make the most of the wet conditions to plant weeks earlier than usual, which will help raise yields.

“By having some moisture, it means they’ve got options,” said Michael Lammond, who writes the GIWA’s crop reports. “Now they can plant canola with the confidence that they’ll get a reasonable yield.”

FUTURES & WEATHER

Wheat prices overnight are down 6 in SRW, down 5 in HRW, down 3 1/2 in HRS; Corn is up 1/4; Soybeans up 6 1/2; Soymeal up $1.40; Soyoil up 0.41.

For the week so far wheat prices are up 1/2 in SRW, down 6 1/4 in HRW, down 2 3/4 in HRS; Corn is up 1 3/4; Soybeans up 19 1/4; Soymeal down $3.60; Soyoil up 2.81.

For the month to date wheat prices are down 38 in SRW, down 4 3/4 in HRW, up 1 in HRS; Corn is up 12; Soybeans up 62 1/2; Soymeal up $8.60; Soyoil up 3.77.

Year-To-Date nearby futures are down 15.2% in SRW, down 4.4% in HRW, down 5.1% in HRS; Corn is down 9.6%; Soybeans down 8.5%; Soymeal down 14.2%; Soyoil up 0.4%.

Chinese Ag futures (MAY 24) Soybeans up 28 yuan; Soymeal up 13; Soyoil up 98; Palm oil up 192; Corn down 6 — Malaysian Palm is up 93.  Malaysian palm oil prices overnight were up 93 ringgit (+2.22%) at 4288.

There were changes in registrations (-2 SRW Wheat, -88 Soybeans, -68 Soymeal). Registration total: 449 SRW Wheat contracts; 0 Oats; 61 Corn; 554 Soybeans; 711 Soyoil; 76 Soymeal; 0 HRW Wheat.

Preliminary changes in futures Open Interest as of March 13 were: SRW Wheat up 3,101 contracts, HRW Wheat up 1,353, Corn up 15,305, Soybeans up 8,859, Soymeal down 70, Soyoil up 8,723.

Brazil: Scattered showers will be limited to central and especially northern Brazil for the rest of this week, unfavorable for safrinha corn as it will be drier across the south. A front moving north out of Argentina this weekend will bring in more widespread and beneficial showers to a good portion of the country next week, however.

Argentina: A front has been stuck in the middle of the country and produced scattered showers that continue through Thursday, favorable for filling corn and soybeans. The front will move into northern areas this weekend where it will probably remain active into next week. Another front will push it northward in the middle of next week. Some areas will get too much rain and others not enough, but is widespread enough to be beneficial for both corn and soybeans.

Europe: A low-pressure system continues in southeastern Europe with scattered showers through Thursday. Other systems will scrape through northern areas later this week and weekend. Another system may go through southern areas next week with meaningful rain. Good rain has fallen across the south recently, favoring early-developing winter wheat. France remains too wet and could use some drier conditions, but that is not on the table right now. Temperatures continue to be mild to warm and wheat should continue to develop early.

Black Sea: A system will move through the region with isolated to scattered showers over the next couple of days. Though it is not all that widespread, soil moisture in the region is favorable. Temperatures will be rising later this week and most of the crop is in favorable condition.

Australia: Southeastern areas should see some showers later this week, but will be light. More significant showers are possible across many areas next week with a system nearby. That may impact the early harvest of cotton and sorghum. Soil moisture remains low ahead of the winter wheat and canola planting period, which starts in mid-April. The demise of El Nino and eventual turn to La Nina should favor the winter crops later this year, however.

Northern Plains: A system will scrape southern areas of the region Wednesday and Thursday. A clipper system will move through on Friday and Saturday with more showers and a quick burst of cold air. The cold will not stick around for very long, but additional systems moving through next week should reinforce that cold air.

Central/Southern Plains: A stronger storm system will build in the region on Wednesday with scattered showers through Friday. But an upper-level low-pressure center could keep showers in the southern end of the region going into next week, a benefit to wheat if it does. A cold front will slide through the region over the weekend and bring a burst of colder air through. It won’t last long, but another system should move through later next week with another burst of cold air and scattered showers.

Midwest: A bigger system will affect the region on Wednesday and Thursday and be followed by a clipper this weekend with more limited showers and a burst of colder air. The cold will only last a couple of days, but another system moving through later next week should bring more showers and another burst of cold air that could linger longer.

Delta: A system will move through later this week with scattered showers and thunderstorms. A stronger cold front will move through this weekend with more showers and a drop in temperatures. Soil moisture continues to be in good shape prior to spring planting. Soil temperatures are supportive of planting, but colder temperatures moving in behind that stronger front this weekend and another later next week should reduce early activity.

The player sheet for 3/13 had funds: net sellers of 2,000 contracts of SRW wheat, sellers of 500 corn, sellers of 1,000 soybeans, sellers of 2,500 soymeal, and buyers of 3,500 soyoil.

TENDERS

• WHEAT PURCHASE: An importer group in Thailand is believed to have purchased about 120,000 metric tons of animal feed wheat sourced from optional origins in an international tender.
• WHEAT PURCHASE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 114,305 metric tons of food-quality wheat from the U.S., Canada and Australia in a regular tender that closed on Thursday.
• WHEAT EXPORTS: Russia is flooding the global market with cheap wheat as the world’s No. 1 supplier draws down inventories ahead of an expected bumper harvest.
• U.S. EXPORT SALES ESTIMATES: The U.S. Department of Agriculture is slated to issue its weekly export sales report at 7:30 a.m. CDT (1230 GMT) on Thursday.

PENDING TENDERS

• WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 metric tons of milling wheat
• FEED WHEAT, BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries said it would seek 60,000 metric tons of feed wheat and 20,000 tons of feed barley to be loaded by June 30 and arrive in Japan by Aug. 29, via a simultaneous buy and sell auction that would be held on March 13.
• WHEAT TENDER: The Taiwan Flour Millers’ Association issued an international tender to purchase an estimated 56,400 metric tons of grade 1 milling wheat to be sourced from the United States

 

 

TODAY

 

GRAIN EXPORT SURVEY: Corn, Soy, Wheat Sales Before USDA Report

Estimate ranges are based on a Bloomberg survey of six analysts; the USDA is scheduled to release its export sales report on Thursday for week ending March 7.

• Corn est. range 800k – 1,400k tons, with avg of 1,015k
• Soybean est. range 250k – 800k tons, with avg of 510k

DOE: US Ethanol Stocks Fall 1.0% to 25.782M Bbl

According to the US Department of Energy’s weekly petroleum report.

• Analysts were expecting 26.316 mln bbl
• Plant production at 1.024m b/d, compared to survey avg of 1.058m

NOPA February US soybean crush seen at 178.058 million bushels

The daily U.S. soybean crush rate rebounded in February from a weather-slowed pace the prior month, and reached a record high for the second month of the year, analysts said ahead of a National Oilseed Processors Association (NOPA) report due on Friday.

NOPA members, who handle about 95% of all soybeans processed in the United States, were estimated to have crushed 178.058 million bushels last month, according to the average of estimates from 10 analysts.

If the estimate is realized, it would be down 4.2% from the January crush of 185.780 million bushels but up 7.6% from the 165.414 million bushels processed in February 2023. It would also be the largest February crush on record, topping the previous high of 166.288 million bushels set in 2020.

The February crush estimate suggested that the average processing pace accelerated to 6.140 million bushels a day last month, up from a four-month low of 5.993 million bushels a day in January, when frigid winter weather disrupted operations at some plants. Estimates for the February crush ranged from 170.150 million to 185.480 million bushels, with a median of 177.850 million bushels.

The NOPA report is scheduled for release at 11 a.m. CDT (1600 GMT) on Friday.

Soyoil supplies held by NOPA members as of Feb. 29 were forecast at 1.591 billion lbs, based on estimates from seven analysts. If realized, it would be up 5.6% from the 1.507 billion lbs held by NOPA members at the end of January but down 12.1% from the 1.809 billion lbs in stocks at the end of February last year. They would also be the largest end-of-month stocks since June. Soyoil stocks estimates ranged from 1.467 billion to 1.725 billion lbs, with a median of 1.590 billion lbs.

Argentina’s 2023/24 soy prospects get boost from February rains

Argentina’s Rosario grains exchange bumped up its forecast for the country’s 2023/24 soy production by 500,000 metric tons on Wednesday, reflecting the positive impact from February’s ample rainfall. Argentina is one of the world’s top two exporters of soybean oil and meal, along with neighboring Brazil. In its monthly grains report, the exchange forecast soy production this season at 50 million tons, compared to the 49.5 million tons previously projected.

“The rains from February onwards put a floor on yields, improved the filling conditions of early soybeans,” the exchange said, adding in the case of late-sown soybeans the rainfall had a major positive impact.

Because heavy rains continued in the first half of March, soybean production could face difficulties if the weather trend continues, a specialist said on Tuesday.

The exchange held its 2023/24 corn forecast steady at 57 million tons, but warned of the impact of the corn stunt disease caused by Spiroplasma bacteria in late corn lots in the agricultural provinces of Cordoba and Santa Fe.

“What is setting off all the alarms in the central region … is the extent and damage being observed by Spiroplasma in late corn,” the exchange said in its report.

While the disease is typical in northern parts of Argentina, the report added the pest that spreads Spiroplasma has surged in population due to dry and hot conditions, an increase in the area planted with late corn, and the staggered way in which it has been planted. Argentina is the world’s third largest corn exporter.

Brazil 2023/24 Soy Crop Estimate Cut to 152.2m Tons: Agroconsult

Brazil should harvest 152.2 million tons of soybeans in 2023/24 crop, 4.7% below the 2022/23, according to estimates presented this Wednesday by Agroconsult.

• In January, consultancy expected 153.8 million tons of soybeans
• Brazil replanted a record area of ​​2.905 million hectares of soybeans, 6.4% of the cultivated area, according to Agroconsult president André Pessôa
  • In Mato Grosso, the largest producing state, average productivity will be 18% lower than in the last harvest
  • Rio Grande do Sul state should have 44% higher productivity in the harvest, according to Agroconsult
• Brazil is expected to export 93.5 million tons of soybeans in 2024, 7.4% below 2023
  • Country has sold around 40% of soy from 2023/24 so far
• By September, soybean prices should be around US$12/bushel, with a global oversupply of 14.6 million tons, according to Pessôa
• In 2024/25 Brazil should reduce soybean area for the first time since 2006, but productivity should guarantee greater production than in 2023/24
• Corn production estimate in 2023/24 is 123.4 million tons, 11.9% less than in 2022/23
  • Exports in 2023/24 should reach 41.2 million tons, a drop of 24.2% in the harvest

Brazil’s 2024 ethanol exports seen strong, helped by corn ethanol, Argus says

Brazil has the potential to maintain exports of ethanol at strong levels in 2024, after last year posting the highest volumes since 2020 due to an increase in corn ethanol supply, an Argus Media specialist said on Wednesday.

Brazil’s total ethanol shipments stand at 2.558 billion liters last year, up 2.5% from 2022, the best performance since 2020 when it had exported 2.7 billion liters, according to trade figures compiled by Argus Media, which specializes in pricing and consulting services.

“The volume should remain strong (in 2024), between 2.1 billion and 2.5 billion liters,” Amance Boutin, fuel analyst at Argus Media, said, noting corn ethanol production has been growing in the country, driven by an increase in capacity.

His assessment comes despite market expectations of a lower supply of sugarcane ethanol in Brazil’s Center-South region next season, which begins in April, due to a smaller harvest and with mills heading a larger part of sugarcane to produce sugar.

“We’re going to have that guarantee, corn ethanol is managing to have a vocation for being exported,” he said, adding an improvement in the country’s logistics has facilitated the product exports.

Brazil’s ethanol exports in February totaled 159.1 million liters, the highest in eight years for the month, with increasing domestic supply and growing demand from Saudi Arabia and India, Argus said.

South Korea is the main destination for Brazilian ethanol, accounting for 30% of the total volume shipped from the South American nation last month, followed by India and Saudi Arabia, with 23% and 18%, respectively.

Agrimer Boosts France Soft-Wheat 2023-24 Stockpile Estimate

French soft-wheat stockpiles at the close of the 2023-24 season are now expected to be 3.74m tons, up from a February estimate of 3.5m tons, crops office FranceAgriMer said in a report on Wednesday.

• That remains the highest since at least the 2018-19 season
• Country’s soft-wheat exports seen at 16.5m tons, down slightly from February estimate

BARLEY

• Stockpiles estimate cut to 1.75m from 2.11m tons

CORN

• Stockpiles forecast raised to 2.44m tons from 2.35m tons

China Canceled French Wheat Cargoes After Exiting US Purchases

China has canceled previously planned soft-wheat shipments from France, Adele Dridi, FranceAgriMer’s head of economic studies for grains, said in a press briefing.

• No details available on volumes
• NOTE: March 11, China Has Never Canceled This Many Shipments of US Wheat
• China has recently been buying French grains to replace corn in storage with French barley, and also because Argentina is at the end of its season
• Purchases from France are just for substitution, not because of any increase in demand in China
• French soft-wheat exports to China at end of Feb. were at 1.816k tons, compared with 1.024k tons in previous year
• French barley exports to China at end of Feb at 2.428k tons compared with 1.269k tons in previous year
• France seeing recent demand for barley from Gulf Arab countries, with 50,000 tons already booked for Qatar in February, and a request from Saudi Arabia which should materialize soon
• Nothing more seen after that from Gulf

Chinese buyers cancel or postpone Australian wheat buys amid global oversupply

• Chinese buyers cancel/postpone wheat for Feb-April shipments
• Australian wheat cancellations come after similar hit to U.S.
• Global price declines to 3-1/2 year low prompting cancellations

Chinese wheat importers have cancelled or postponed about one million metric tons of Australian wheat imports, trade sources with direct knowledge of the deals said, as growing world stockpiles drag down prices.

The moves come after the U.S. government reported cancellation of more than 500,000 metric tons of U.S. wheat exports last week to China, the world’s No. 1 buyer, with international prices trading close three and a half year lows.

“Chinese buyers have cancelled some deals for Australian wheat, and they are also moving the shipping time from the first quarter to the second quarter, third quarter,” said one Singapore-based trader at an international trading company, which sells Australian wheat to Asia.

A second trader in Singapore said trading companies have vacated shipping slots across several Australian ports, which were booked for cargoes to be shipped to China. Both traders declined to be named because of the sensitivity of the matter.

One million metric tons of wheat would require about 15 Panamax-size vessels of 68,000 tons each to ship, and amounts to more than 4% of Australia’s expected total wheat exports of 23 million metric tons in 2023-24.

Core Argentine farmland expecting more rainfall, higher soil humidity

Argentina’s main agricultural area will likely receive more precipitation in the next few days, adding to already significant recent rainfall, according to a report from the Rosario grains exchange (BCR) released on Wednesday. The report said precipitation so far in March had already exceeded the average for the entire month.

Excessive rain could lead to soybean crop losses but likely benefit wheat planting, German Heinzenknecht, a meteorologist at the Applied Climatology Consulting Firm (CCA), said on Tuesday.

Argentina is a top global producer of processed soybeans, as well as other key grains crops including corn and wheat. Sales of these commodities represent a key source of revenue for the local economy, plus much-needed hard currency for central bank coffers.

In the BCR report analyst Florencia Poeta said average March rainfall over the South American country’s core farmland currently stands between 100-200 millimeters (3.9-4.7 inches).

“It’s expected that the rains continue through Thursday and Friday,” she added.

A storm front is forecast to move north, said Cindy Fernandez, a meteorologist at Argentina’s National Meteorological Service (SMN), bringing an expected 100-150 millimeters of rain to northern parts of the Santa Fe, Cordoba, Entre Rios and Corrientes provinces.

Later on Wednesday, the exchange will publish its monthly crop report, including its latest production forecasts. The BCR’s current 2023/24 soybean crop estimate stands at 49.5 million metric tons, and the 2023/24 corn crop at 57 million tons.

Brazil Eyes Farm Exports to India and Africa With EU Deal Stuck

• Agriculture Minister Carlos Favaro speaks in interview
• President Lula ordered business missions to expand markets

Brazil President Luiz Inacio Lula da Silva wants to expand agriculture exports to India and Africa, focusing more on new markets while trade talks between a South America trade bloc and the European Union languish.

Lula wants to send a trade mission with over 300 entrepreneurs to the world’s most populous country by about mid-year, Agriculture Minister Carlos Favaro said in an interview. The government is eyeing India’s growing appetite for goods including fruits, juices, coffee and black beans, he said.

Favaro said there are also opportunities to boost sales of meat and grains to Africa following Lula’s trip to Egypt and Ethiopia in February, when he met with leaders of the African Union, an association of the continent’s nations.

Indonesia Builds First Red Palm Cooking Oil Factory

The plant in North Sumatra has a capacity of 10 tons crude palm oil per day, President Joko Widodo says during the inauguration ceremony on Thursday.

• Plant can produce 7 tons of red palm oil, he says, without further detail.

IKAR Sees Russia 2024-25 Wheat Exports Near Record at 50M Tons

IKAR sees 2024-25 wheat harvest at 93m tons, Interfax reported, citing comments from director Dmitry Rylko at a conference in Moscow.

• Production may be higher; exports may be 50m tons, close to record
  • In November IKAR estimated Russia’s wheat crop at 92m tons
• Total grain harvest seen at 147m tons, second-highest on record after 2022

China to boost innovation in agriculture sector on food security concerns

China said on Wednesday it would speed up science and technology innovation in the agriculture sector, to help boost self-reliance in agricultural technology amid food security concerns.

The country will expand efforts at developing “new productive forces” through science and tech innovation in agriculture, the ministry of agriculture and rural affairs said, citing a meeting chaired by minister Tang Renjian.

China will also “improve the mechanism for deep integration of sci-tech and agriculture industry,” and speed development of intelligent agriculture and farm product processing, the ministry said.

The announcement comes as the country pledges to achieve self-reliance in agriculture technology and improve food security amid geopolitical tensions, climate and demographic changes.

China has invested large sums of money in research for agriculture in recent years but has few large commercial companies that invest in long-term research and development to bring innovative solutions to market.

The ministry will also ensure the stability of soybean planting areas, guide adjustment of hog production capacity and take measures to regulate the market and prices of farm products, according to the ministry statement.

EIA Cuts Forecast for 2024 Renewal Diesel Demand, Boosts 2025 Outlook — OPIS

The Energy Information Administration in its March Short-Term Energy Outlook on Tuesday predicted a slight downturn in demand for renewable diesel this year, while predicting a slight uptick in demand for the biofuel in 2025.

The agency estimated U.S. renewable diesel demand this year will average 243,000 b/d, down 6,000 b/d from February, and set projected demand for the drop-in fuel in 2025 at an average of 307,000 b/d — up 3,000 b/d from the month prior. And it also decreased February’s projection that renewable diesel production this year will average from 226,000 b/d to 218,000 b/d and kept last month’s 2025 output forecast at 290,000 b/d. Renewable diesel imports this year will average 25,000 b/d, up 1,000 b/d from the February report, EIA said. It kept its projection for 2025 imports at 17,000 b/d.

The agency said it expects domestic biodiesel demand in 2024 will average 103,000 b/d, up 2,000 b/d from projections in the February STEO. EIA also kept its 2025 demand forecast at 80,000 b/d. The 2023 estimate of 125,000 b/d in the February STEO was boosted to 126,000 b/d. EIA also said it expects biodiesel production this year will average 100,000 b/d, up 1,000 b/d from what was projected in February, and it kept 2025 production at 87,000 b/d — level with the month prior.

In addition, the report boosted by 1,000 b/d projected U.S. ethanol demand this year at 936,000 b/d, while also setting the 2025 demand projection 1,000 b/d lower than last month at 938,000 b/d. EIA said it believes U.S. ethanol output this year will average 1.02 million b/d, level with February, and boosted the 2025 production estimate this month at 1.03 million b/d.

The agency cut by 1,000 b/d its supply and demand projection for “other biofuels” — a category that includes sustainable aviation fuel and renewable naphtha — to an average of 29,000 b/d this year. EIA expects supply and demand for each category to average 55,000 b/d next year, which is level with the February STEO.

EIA once again projected there will be no net imports of “other biofuels” in any of the forecast years.

The agency boosted the forecast for ethanol blended with gasoline this year at an average of 940,000 b/d. It said it expects ethanol blended with gasoline in 2025 will also average 940,000 b/d.

The report projected U.S. liquid fuel consumption this year will average 20.40 million b/d, up from the previous month’s 20.39 million b/d forecast. The report also expects U.S. liquid fuel consumption will average 20.59 million b/d in 2025.

EIA said it expects global liquid fuels consumption this year will average 102.43 million b/d on a monthly basis, up from 102.42 million b/d last month. This month’s report put 2024 U.S. gasoline consumption at an average of 8.95 million b/d, up from 8.92 million b/d in February. Gasoline demand next year, the agency said, will average 8.91 million b/d.

Fertilizer Prices Strengthen as Early Spring Drains Inventories

US nitrogen and phosphate prices climbed as warm weather prompted pre-planting applications, testing available supplies at many inland terminals. An early start to spring gives farmers more time to consume inputs, supporting sales for producers like CF Industries, Nutrien and Mosaic, though US potash pricing has yet to feel the bump.

Urea Prices Rise on Strong, Early Demand

US urea prices continued to gain on limited supply and strong, early demand. New Orleans (NOLA) urea jumped to $400-$417 a short ton (st) for prompt and March business, up from last week’s high of $400, with many inland terminals moving up $15-$20/st. Other nitrogen prices followed, with increases reported for urea ammonium nitrate and ammonium sulfate. Tight supply continued to limit ammonia availability, keeping terminal prices firm in the Corn Belt. Phosphate prices were also inching up at many inland warehouses, though NOLA diammonium phosphate (DAP) fell sharply, to $615/st from last week’s high of $690. Potash dropped slightly at NOLA, with inland prices remaining flat.

 

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