Global Ag News for Mar 15.24

TOP HEADLINES

US switches method to estimate China’s soy imports after data gap

The U.S. Department of Agriculture has started using global exporters’ data to estimate China’s soybean imports because a wide gap emerged between shipping figures from producing nations and Chinese customs data, a USDA official told Reuters.

The change in methodology comes at a sensitive time for U.S.-China relations and as China is trying to improve its food security plans to rely less on imports. China is the world’s biggest soybean importer and tracking its demand is important for world commodity prices.

Chinese customs data that USDA historically used to estimate imports had previously aligned with export data from producers like the U.S. and Brazil, said Joanna Hitchner, who oversees soybean supply and demand estimates for USDA’s World Agricultural Outlook Board. But the numbers began deviating in 2023, and the USDA this month increased its estimate for China’s 2022-2023 imports by 3.6% from February to reflect exporters’ data, she said.

“We prefer to use China customs data but will continue to monitor this gap in trade to see whether we can go back to using their reported import data,” Hitchner said in an interview this week.

Market analysts have long questioned Chinese data. Some said Beijing may have sought to under-report soybean imports to boost its food security campaign. Hitchner said she did not know why Chinese import data and exporters’ data diverged. China’s General Administration of Customs could not be reached for comment.

Last week, it revised soybean import volumes for January-February 2023 to 14.3 million tons, versus an initial published figure of 16.17 million tons. China is known to revise retrospective import figures, but such a big downward adjustment is unusual.

Shipping data from soy exporters and China’s import data “particularly deviated even more when they started making downward revisions to their import numbers,” Hitchner said.

The USDA this month also increased its estimates for China’s soybean crush from 2020-2021 to 2022-2023, following a years-long review of in-country estimates and supply data.

“We don’t take changing our methodology lightly,” Hitchner said. “This is a very thought-out move for the crush.”

FUTURES & WEATHER

Wheat prices overnight are up 2 in SRW, up 1/4 in HRW, up 1 3/4 in HRS; Corn is down 1/4; Soybeans down 4 1/4; Soymeal down $0.10; Soyoil down 0.47.

For the week so far wheat prices are down 3 1/2 in SRW, down 13 3/4 in HRW, down 5 3/4 in HRS; Corn is down 6 1/4; Soybeans up 7; Soymeal down $4.10; Soyoil up 1.75.

For the month to date wheat prices are down 42 in SRW, down 12 1/4 in HRW, down 2 in HRS; Corn is up 4; Soybeans up 50 1/4; Soymeal up $8.10; Soyoil up 2.71.

Year-To-Date nearby futures are down 14.9% in SRW, down 10.4% in HRW, down 9.2% in HRS; Corn is down 8.0%; Soybeans down 7.9%; Soymeal down 12.6%; Soyoil up 0.2%.

Chinese Ag futures (MAY 24) Soybeans up 36 yuan; Soymeal up 39; Soyoil up 36; Palm oil up 104; Corn up 3 — Malaysian Palm is down 2.  Malaysian palm oil prices overnight were down 2 ringgit (-0.05%) at 4293.

There were changes in registrations (-9 SRW Wheat, -33 Soybeans). Registration total: 440 SRW Wheat contracts; 0 Oats; 61 Corn; 521 Soybeans; 711 Soyoil; 76 Soymeal; 0 HRW Wheat.

Preliminary changes in futures Open Interest as of March 14 were: SRW Wheat up 7,896 contracts, HRW Wheat up 1,207, Corn up 1,083, Soybeans up 7,143, Soymeal up 1,056, Soyoil up 4,308.

Brazil: Scattered showers have been limited to central and especially northern Brazil this week, unfavorable for safrinha corn as it has been 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 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: Systems will scrape through northern areas going into next week with scattered showers. Another system may go through southern areas later 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. Another system will move into western areas early next week with some showers as well. Though the rain is not all that widespread, soil moisture in the region is favorable. Above-normal temperatures will continue through next week and the crop is currently in good condition.

Australia: Southeastern areas are seeing some showers through the weekend, but they 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 to the south may bring a few showers through 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 continues to bring 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 system will continue to bring scattered showers and thunderstorms through on 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 with scattered showers and thunderstorms into the weekend and a stronger cold front will move through this weekend with 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 3/14 had funds: net sellers of 5,000 contracts of SRW wheat, sellers of 5,000 corn, sellers of 1,500 soybeans, buyers of 1,000 soymeal, and sellers of 1,500 soyoil.

TENDERS

• WHEAT SALES CANCELLED, POSTPONED: Chinese wheat importers have cancelled or postponed about one million metric tons of Australian wheat cargoes, trade sources with direct knowledge of the deals said.
• CORN SALE: Exporters sold 100,000 metric tons of U.S. corn to Mexico for 2023/2024 delivery, the U.S. Department of Agriculture said.
• WHEAT, BARLEY PURCHASES: Japan’s Ministry of Agriculture, Forestry and Fisheries bought 114,305 metric tons of food-quality wheat from the U.S., Canada and Australia in a regular tender. The ministry also said Japan will import 380 metric tons of feed-quality barley for livestock use via a simultaneous buy-and-sell auction.
• RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 100,800 metric tonnes of rice mainly to be sourced from the United States and China.

PENDING TENDERS

• WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 metric tons of milling wheat.
• 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

 

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 March 7, according to data on the USDA’s website.

• Top buyer of soybeans: China with 256k tons
• Top buyer of corn: Japan with 346k tons
• Top buyer of wheat: Mexico with 169k 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 March 7, according to data on the USDA’s website.

• Mexico bought 11.1k tons of the 24.9k tons of pork sold in the week
• Taiwan led in beef purchases

Strategie Grains Cuts EU Soft-Wheat and Barley Crop Estimates

EU soft-wheat production in the 2024-25 season is now seen at 121.6m tons, down 1m tons from last month’s estimate, due to excessive rain, analysis firm Strategie Grains said in a report.

• “Many concerns exist around potential harvest levels,” and yield outlooks are “far from spectacular”
  • Soft-wheat supply and demand seen returning to equilibrium in 2024-25
• European grain prices may have already bottomed out, despite competition from Black Sea supplies
• The barley-production estimate was cut to 51.8m tons from 53.1m tons
  • Spring planting in France delayed by rain, and the “balance sheet is becoming increasingly fragile”
• Corn balance sheet still expected to be in equilibrium; imports are lower than originally expected due to restrictions on Ukrainian imports to the EU

Brazil eyes soy, corn exports via Chancay port, Peruvian minister says

Brazil is interested in exporting soy, corn and other products through Peru’s Chancay port, Peruvian Economy Minister Jose Arista said on Thursday, according to state news agency Andina.

Brazilian Planning Minister Simone Tebet visited the port, still under construction, earlier this week and spoke with Arista about the possibility of using it as an export route, Andina reported.

Brazil’s planning ministry and agriculture ministry did not immediately respond to requests for comment.

The port terminal, costing an initial $1.3 billion, is 70% completed, Andina reported. Majority owner Cosco Shipping Ports has said the port is set to open at the end of this year.

The port will open with four docks but could expand to up to 15, Andina said.

IGC Sees Grain Stocks Slightly Higher at End of 2024-25 Season

Global grain stocks are expected to edge slightly higher next season, as farmers potentially harvest a record crop, according to the first estimate from a major forecaster.

Stocks are expected to increase to 601 million tons at the end of the 2024-25 season, according to the International Grains Council, as gains in production offset smaller carry-in stocks. That’s up from the 599 million tons expected at the end of this season.

Wheat prices hit the lowest in more than three years last week, as ample supplies have pushed down prices. Top exporter Russia is expected to harvest its third bumper harvest in a row, while good weather is benefiting crops in the US.

Total grains output in 2024-25 is expected to be 2.33 billion tons, 1% higher than the IGC’s estimates for the 2023-24 season. Consumption is also seen higher, led by gains in feed uptake.

Separately, Strategie Grains earlier forecast that the world wheat market will remain “relatively fragile” in 2024/25, with rising stocks in North America, but falling stocks in Europe and Russia.

USDA attaché lowers Argentina 2023/24 soy crop estimate to 49.5 million T

Following are selected highlights from a report released on Wednesday by the U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service post in Buenos Aires:

“Post lowers marketing year (MY) 2023/2024 (soybean) production to 49.5 million metric tons (MMT), still nearly double last year’s crop, based on a stretch of dry and hot weather in the major production areas despite previous ideal rains following planting. Argentina’s soy crush was up 12 percent in January 2024 despite low stocks due to the disastrous crop the previous year. Sunflower production in MY2023/2024 is revised down to 3.5 MMT on lower planted area and yields.”

Soil moisture for Argentina’s soybean crop improves after rains

The percentage of Argentine soybean plantings with optimal-to-excellent soil moisture grew to 77% in the last week, boosted by recent rains, the Buenos Aires Grains Exchange said on Thursday. Argentina is one of the world’s top exporters of processed soybeans, and the exchange estimates the 2023/24 harvest at 52.5 million metric tons.

In the nation’s main growing region, “nine out of every 10 hectares are in normal-to-excellent crop condition,” according to the exchange. It added that 69% of the late-planted soy crop had adequate moisture conditions while it was in a key development stage. However, a specialist noted earlier this week that if the intense rains keep up, the soy harvest could be delayed with some output lost.

The grains exchange also said that the 2023/24 corn crop was seeing an increase in the presence of maize leafhoppers, an insect which carries the harmful spiroplasma disease.

“An increase in the presence of leafhoppers in plots with late-planted corn is reported, with significant damage in the center of Santa Fe (province), the northern part of the northern growing region and west of Entre Rios (province), areas that in previous years had not been affected,” the exchange said.

The exchange held its estimate for the corn harvest at 56.5 million tons, but said it was evaluating damages caused by the pest.

India Feb. Oilmeals Exports Rise to 515,704 Tons

India’s oilmeals exports rose to 515,704 tons in February from 477,580 tons in January, according to the Solvent Extractors’ Association of India.

• Rapeseed meal exports rose to 144,372 tons from 71,472 tons in January
• Soymeal exports fell to 347,905 tons from 375,360 tons in January
• Castorseed meal exports fell to 22,402 tons from 30,748 tons in January

Indonesia Palm Oil Exports Fall, Coal Shipments Rise M/M in Feb.

Indonesia’s exports of crude palm oil and its derivatives fell to 1.42m tons in February from 2.06m tons in January, according to data from the nation’s statistics office on Friday.

EU’s Forest Rules Start to Reshape Palm Oil Trade, Report Shows

• Farmers ship hard-to-verify commodity outside the EU: 3Keel
• The diversions risk stalling progress on curbing deforestation

Europe’s incoming forest-protection rules are shaking up trade in palm oil, threatening to stall the fight against deforestation and risking high prices for European consumers, sustainability consultancy 3Keel Ltd. said.

The European Union is introducing rules to stop products that destroy forests from being sold in shops and supermarkets. The largest companies have until the end of the year to comply with the regulation, which covers commodities from palm oil to cocoa and coffee.

But suppliers of palm oil have already started to divert the commodity that can’t be fully traced to regions outside the EU, according to 3Keel. If the diversion becomes a long-term trend, it will cause suppliers to de-prioritize their traceability efforts, the Oxford, England-based company said in a report Thursday.

“The segregated supply chain could also cause knock-on price increases for goods supplied to the EU, if the cost of having to separate out compliant volumes is passed on to the customer,” report co-author Sian Allen said.

Critics say the new rules especially punish smaller farmers. Those types of farmers are most likely to be disadvantaged and left out of EU supply chains, given the challenges in tracing palm back to individual plantations, 3Keel said. That includes farmers that apply responsible growing practices.

The report, prepared by 3Keel for the Palm Oil Transparency Coalition, is based on a survey and follow-up conversations with 20 globally significant palm-oil importers and traders.

There have been calls for the EU to delay the deforestation regulation, which is due to kick in at the end of December. The bloc has deferred categorizing supplier countries by their risk status until a later date, but the rest of the rules – including the due diligence requirements — are on track, Virginijus Sinkevicius, the EU’s environment commissioner, said Wednesday.

China Wheat Market Remains Soft on Ample Supply and Weak Demand

• Asian nation canceled record number of US shipments recently
• Authorities have stepped up corn stockpiling to boost market

China’s wheat market is beset by adequate supplies and soft domestic demand, which could curb purchases and present more headwinds for global grain prices in the coming months.

The Asian nation was forced to boost purchases of overseas wheat last year after heavy rains damaged domestic grain, but a better crop in 2024 should lead to a reduction of imports. China is also grappling with a persistently weak economy, which has forced consumers to tighten their spending.

“The new wheat crop this season is in good condition,” said Zhang Zhidong, a senior analyst with Guolian Futures. “With the new harvest kicking in around June, traders and end-users usually clear their old inventories between April-May, so the spot market is under pressure.”

China recently canceled a record number of US wheat shipments, which sparked a sharp decline in Chicago futures before prices recovered. The Asian nation is also stepping up stockpiling of domestic corn to support the local market, which is suffering from poor demand including from the livestock industry.

A surge in corn and wheat imports last year prompted a rare rebuke from state-run Economic Daily, which warned it could hurt the local market. Incoming corn cargoes surged 32% to just below a record reached in 2021.

Farmers could be discouraged from planting grains should too many imports weigh on domestic prices, said Cherry Zhang, an analyst with Shanghai JCI. Corn planting is expected to start in a couple months in top production regions.

Bill for Year-Round Ethanol Sales Stuck in Senate, Lawmaker Says

Legislation to allow year-round sales of gasoline with a higher blend of corn ethanol, known as E15, has hit a roadblock in the US Senate despite backing from agriculture and petroleum oil companies, says Senator Deb Fischer, the bill’s author.

• The measure faces a hurdle in getting consideration from the Senate Environment and Public Works Committee headed by Democratic Senator Tom Carper of Delaware, Fischer, a Nebraska Republican, said in a statement to Bloomberg
• Spokespeople for Carper didn’t immediately respond to a request for comment
• Fischer, who made similar comments at a meeting of the American Coalition for Ethanol in Washington this week, said the Biden administration “supports our sort of legislation solution”
• Fischer says she’s hopeful Carper, who is not running for reelection this year, will ultimately be open to the bill
• NOTE: Some independent refiners do not support E15 legislation and are pushing for broader changes to the nation’s renewable fuel mandate as part of any bill; Carper has shown himself sympathetic to the needs of independent refiners

US forecaster sees higher chance of La Nina conditions this summer

A U.S. government weather forecaster projects El Nino conditions will likely end by spring this year but saw a 62% chance that a weather pattern characterized by unusually cold temperatures in the Pacific Ocean, La Nina, will develop during June-August.

There is an 83% chance that a transition from El Nino to ENSO-neutral is likely to occur by April-June 2024, followed by a shift to La Nina, National Weather Service’s Climate Prediction Center (CPC) said in a monthly forecast on Thursday.

“Even though forecasts made through the spring season tend to be less reliable, there is a historical tendency for La Nina to follow strong El Nino events,” the CPC said.

The ongoing El Nino weather pattern will continue to fuel above-average temperatures across the globe, the World Meteorological Organization (WMO) said last week.

El Nino peaked in December and would go down as one of the five strongest in history, it said. Last year’s El Nino, which followed three La Nina years, saw hot and dry weather in Asia and heavier rains in parts of the Americas that boosted farm output prospects in Argentina and the southern U.S. Plains.

India, the world’s biggest rice supplier, restricted exports of the staple following a poor monsoon, while wheat output in No.2 exporter Australia took a hit. Palm oil plantations and rice farms in Southeast Asia received less than normal rains.

The high probability of a strong La Nina arriving this year has put grains farmers on alert in Argentina, where the climate phenomenon usually brings dry weather with lower rainfall.

“With the El Nino phenomenon expected to end this year, 2025 might not have such a rosy beginning, while it will likely also increase the rains which feed the Panama canal and potentially ease congestion,” shipbroker Allied said in a note.

El Niño Expected to Disperse This Spring — Market Talk

Odds that the current El Niño climate will change this spring are up to 83%, says the NOAA’s Climate Prediction Center in an update today. Climate is expected to transition between April and June to a neutral climate system, NOAA says. Additionally, the agency gives a 62% chance of a La Niña system developing by June to August. How the climate changes over spring into the summer is important to U.S. growers, with the planting season beginning for farmers in April. CBOT grains are mixed early in the trading session, with corn down 0.6%, soybeans up 0.4%, and wheat off 1.8%.

Two More Cyclones Likely to Hit Australia as Storms Strengthen

• Both are developing off of Australia’s northern coast
• A series of cyclones have struck the continent this year

Two storms developing off Australia’s northern coast are likely to become tropical cyclones over the weekend, the latest in a series that have struck the continent this year — damaging infrastructure and hurting crops.

A tropical low moving toward the Gulf of Carpentaria has a high chance of becoming a tropical cyclone by Saturday, according to the Bureau of Meteorology. It could strengthen to category two intensity and make landfall early next week, bringing damaging winds and heavy rain. Minor flooding along the southwestern Gulf of Carpentaria coast is also possible this weekend.

Meanwhile, a separate storm off the coast of northern Western Australia is likely to develop into a tropical cyclone on late Sunday or Monday. Some liquefied natural gas plants in northwest Australia have fully or partially closed port terminals through March 18 because of the storm, according to traders.

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

Barge shipments down the Mississippi river increased to 593k tons in the week ending March 9 from 429k tons the previous week, according to the USDA’s weekly grain transportation report.

• Barge shipments of corn rose 78.2% from the previous week
• Soybean shipments up 5.6% w/w
• St. Louis barge rates were $10.53 per short ton, a decline of $0.16 from the previous week

 

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