Global Ag News for Mar 19.24

TOP HEADLINES

EU to impose tariffs on Russian grain imports, FT reports

The European Union is preparing to levy tariffs on grain imports from Russia and Belarus to placate farmers and some member states, the Financial Times reported on Tuesday citing people familiar with the plans.

The European Commission is in coming days expected to impose a duty of 95 euros ($103.26) per tonne on cereals from Russia and Belarus, FT said, adding that tariffs of 50% would also be placed on oil seeds and derived products.

The reported move comes as farmers across the European Union call for changes to restrictions placed on them by the bloc’s Green Deal plan to tackle climate change, and for the re-imposition of customs duties on imports of agricultural products from Ukraine that were waived after Russia’s invasion in 2022.

Farmers from neighboring Poland, Hungary and Slovakia, all of which are members of the EU, say the move undercut their prices. Ukraine is not part of the 27-member EU.

Like much of Europe, Poland has also been gripped by protests in recent weeks as farmers demonstrate against EU environmental regulations.

Polish Prime Minister Donald Tusk has also called for an EU ban on imports of Russian and Belarusian agricultural products.

FUTURES & WEATHER

Wheat prices overnight are down 3 1/2 in SRW, down 1 in HRW, down 1/4 in HRS; Corn is unchanged; Soybeans down 1 1/2; Soymeal up $1.20; Soyoil down 0.36.

For the week so far wheat prices are up 11 in SRW, up 6 1/2 in HRW, up 4 in HRS; Corn is down 3/4; Soybeans down 12; Soymeal down $1.60; Soyoil down 1.08.

For the month to date wheat prices are down 37 in SRW, down 14 1/2 in HRW, down 8 1/2 in HRS; Corn is up 6 1/2; Soybeans up 45 1/2; Soymeal up $3.90; Soyoil up 3.13.

Year-To-Date nearby futures are down 14.1% in SRW, down 10.8% in HRW, down 10.1% in HRS; Corn is down 7.5%; Soybeans down 8.3%; Soymeal down 13.7%; Soyoil up 1.0%.

Chinese Ag futures (MAY 24) Soybeans down 21 yuan; Soymeal down 9; Soyoil down 26; Palm oil down 16; Corn down 28 — Malaysian Palm is down 35. Malaysian palm oil prices overnight were down 35 ringgit (-0.83%) at 4201.

There were changes in registrations (-2 SRW Wheat, -5 Soymeal). Registration total: 438 SRW Wheat contracts; 0 Oats; 37 Corn; 521 Soybeans; 711 Soyoil; 26 Soymeal; 0 HRW Wheat.

Preliminary changes in futures Open Interest as of March 18 were: SRW Wheat down 1,591 contracts, HRW Wheat up 578, Corn up 20,032, Soybeans down 2,262, Soymeal up 3,847, Soyoil up 5,732.

Brazil: A front moved into southern Brazil with scattered showers this weekend, as well as some areas of heavy rain. That front keeps much of the country active this week but another that moves through Thursday and Friday will move up into central states. That should leave some good rain for safrinha corn that has had very little over the last week, but the drier conditions behind the front in the south will not be favorable. The current forecast though is to bring those showers back down south next week, if that materializes, it would be better for corn.

Argentina: A moved north out of Argentina with scattered showers this weekend, but a couple of disturbances will move through this week that should bring more showers through the country. A stronger front will move through on Wednesday. It may have widespread heavy showers with it, but conditions will dry out behind it through the weekend. More disturbances moving through next week should keep the overall good conditions going, however.

Europe: Scattered showers went through over the weekend, primarily across the north. An upper-level low will approach Spain this week, but stay offshore, bringing in limited showers. This could move eastward this weekend as another system dives down through the continent and next week looks pretty active as well. In other words, precipitation will be pretty widespread through the end of the month, favorable for winter wheat in most areas, but still too wet in France most likely.

Black Sea: An upper-low brought showers to western Russia over the weekend and another one is moving into Ukraine early this week, getting into the Black Sea by the end of the week, keeping some showers going into the weekend. A front should sweep through the region next week with potential for more widespread and heavier showers. Soil moisture and wheat conditions are both in good shape as the crop continues to green up early.

Australia: Scattered showers went through southeastern areas over the weekend, but were pretty isolated in the areas hit. A front will sweep through most areas this week, but models have backed off on the amount of precipitation and most areas are still dry. That is fine for cotton and sorghum that are maturing and seeing some early harvest activity, but not good for building soil moisture ahead of winter wheat and canola planting, which usually starts up 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 clipper brought through a burst of cold air over the weekend. A brief warm shot will move through early this week, but another round of cold air will push into the region midweek that will likely last through most of next week as well. In the colder air, several systems will move through with scattered showers, mostly as snow. Some of these bursts could be heavier, especially with a storm system this weekend that could bring blizzard conditions.

Central/Southern Plains: Scattered showers continued across southern areas over the weekend as a front got stuck in Texas and an upper-level low spun over the Four Corners area. The low will have some influence early this week with some isolated showers, but will bring some more widespread showers through on Wednesday and Thursday as it finally moves east. The pattern gets very active afterward, but the storm track will be over the northern end of the region, keeping most areas drier. Nebraska and eastern areas stand better chances at scattered showers and thunderstorms out of this, but the current forecast is not favorable for wheat areas. A burst of arctic air may flow down through the region next week behind a particularly large storm, which could be damaging for some wheat.

Midwest: A clipper brought a burst of colder air into the region this weekend and made some lake-effect snow as well. That continues Monday. Another clipper will move through the Great Lakes Tuesday and Wednesday. More lake-effect showers will move through but most areas will stay drier. However, the colder temperatures will come through the region again. That sets up another clipper to move through Thursday and Friday with a burst of snow. But the big story will be a major spring storm system that will have multiple effects this weekend including heavy snow, freezing rain, strong winds, and severe storm potential.

Delta: Scattered showers and thunderstorms moved through southern areas over the weekend, helping to maintain overall good soil moisture in much of the region. Several additional storm systems will move through the region this week and next, which should do the same.

The player sheet for 3/18 had funds: net buyers of 5,500 contracts of SRW wheat, sellers of 1,000 corn, buyers of 3,500 soybeans, sellers of 2,000 soymeal, and sellers of 2,500 soyoil.

TENDERS

• MILLING WHEAT PURCHASE: Algeria’s state grains agency OAIC has started buying milling wheat in an international tender on Monday for shipment to two ports only
• FEED WHEAT PURCHASE: South Korea’s Major Feedmill Group (MFG) purchased about 125,000 metric tons of animal feed wheat in private deals on Friday without issuing an international tender
• FEED WHEAT PURCHASE: Leading South Korean animal feed group Nonghyup Feed Inc. (NOFI) purchased around 60,000 to 65,000 metric tons of animal feed wheat in a private deal on Friday without issuing an international tender.
• RICE TENDER: Indonesian state purchasing agency Bulog has issued an international tender to buy 300,000 metric tons of rice.

PENDING TENDERS

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

 

 

TODAY

US Inspected 1.239m Tons of Corn for Export, 686k of Soybeans

In week ending March 14, according to the USDA’s weekly inspections report.

• Wheat: 302k tons vs 467k the previous wk, 375k a yr ago
• Soybeans: 686k tons vs 785k the previous wk, 720k a yr ago
• Corn: 1,239k tons vs 1,166k the previous wk, 1,225k a yr ago

US Corn, Soybean, Wheat Inspections by Country: March 14

Following is a summary of USDA inspections for week ending March 14 of corn, soybeans and wheat for export, from the Grain Inspection, Packers and Stockyards Administration, known as GIPSA.

• Soybeans for China-bound shipments made up 551k tons of the 686k total inspected
• Mexico was the top destination for corn inspections, and also led in wheat

Kansas, Oklahoma, Texas Winter Wheat Crop Conditions: USDA

The USDA posts winter wheat conditions data on website for week ending March 17.

• Kansas good/excellent rating upgraded to 55% from 53%
• Oklahoma rating lowered to 61% from 65%
• Texas raised to 46% from 44%

Brazil Soybean Harvest 63% Done as of March 14: AgRural

Compares with 55% a week earlier and 62% a year before, according to an emailed report from consulting firm AgRural.

• Summer corn harvest 68% done in Brazil’s Center-South region as of March 14, compared with 57% a week earlier and 51% a year before
• Winter corn seeding is at 97%, compare with 93% a week earlier and 91% a year before

Brazil Winter Corn Planting 93.1% Done as of March 15: Safras

Compares with 85.8% last year and a five-year average of 82.4%, according to an emailed statement from consulting firm Safras & Mercado.

• Works are 96.4% completed in Parana, 90.1% in Mato Grosso do Sul and 70.2% in Sao Paulo

WHEAT/CEPEA: Area is expected to fall, but productivity may result in higher supply in 2024

The 2023 season registered lower productivity in areas with wheat crops of the South region of Brazil (decrease of 35.9% compared to the previous year) – in Rio Grande do Sul state, the productivity dropped expressively 51%. This scenario reduced the global supply. Now, new estimates show that the area may decrease in 2024 season, due to inferior prices. Nevertheless, if productivity remains on the average, the supply may overtake that in the previous year.

According to data released by Conab, the area with wheat crops in Brazil is forecast to be 6% lower, at 3.26 million hectares. However, productivity may increase 26%, to 2.937 tons per hectare on the national average. Thus, the production is estimated at 9.587 million tons, 18.4% up from that in 2023.

Besides, Conab estimates imports to total 5.5 million tons between August/24 and July/25. Wheat consumption is forecast at 12.62 million tons, and exports, at 2 million tons. Wheat availability in Brazil is estimated at 15.48 million tons, against 15.04 million tons in the previous season.

Palm Oil May Pull Back to 3,800-4,000 Ringgit/Ton in April: MPOC

Palm oil prices are expected to trade between 3,800-4,000 ringgit in April as the market weighs a recovery in production and inventories in coming months, according to the Malaysian Palm Oil Council.

• A bullish price movement from current levels is unlikely due to the ample supply of soybeans from South America entering the global market from April, coupled with the gradual seasonal recovery of palm yields in Malaysia, MPOC said in a statement
  • Low season for palm output to end in March; strong prices in 1Q were mainly due to supply deficits
• Palm oil’s price premium over rivals soybean, rapeseed and sunflower oils has widened to around $40-$95 in March; a recovery in soft oil prices is anticipated in April to narrow this price spread
• Global palm oil output forecast to rise minimally by 0.1% in 2024, while output in soybean, rapeseed and sunflower oils projected to increase by 2.9%, 3.5%, and 3.9%, respectively
• NOTE: Benchmark prices trade at 4,225 ringgit on Tuesday; +13% YTD

China’s Premier Li Calls for Stabilizing Grain Output: Xinhua

Chinese Premier Li Qiang called for all regions and departments to increase policy support to stabilize grain production as well as supply of other important agricultural products, Xinhua News Agency reports citing his remarks at a meeting on March 18.

Chinese Vice Premier Liu Guozhong attended the meeting and urged efforts to do a good job in preparation for spring farming to lay a solid foundation for a bumper harvest this year

Indonesia Feb. Palm Oil Exports Fall 25.4% M/m: Intertek

Indonesia’s palm oil exports fell 25.4% m/m in February, according to Intertek Testing Services.

• Palm oil exports fell to 1.59m tons from 2.13m tons in January
• Crude palm oil shipments were 109,109 tons
• RBD palm olein shipments were 473,202 tons
• RBD palm oil shipments fell to 438,366 tons from 460,119 tons in January
• Palm oil sales to European Union fell to 416,461 tons from 424,137 tons in January
• Palm oil sales to India fell to 327,661 tons from 653,220 tons in January
• Palm oil sales to China fell to 200,395 tons from 292,483 tons in January

Pig Prices in China to Rise in 2Q on Falling Supplies: CCTV

The number of pigs slaughtered declined more than 10% in February from a month earlier, China Central Television reported, citing an official from the Ministry of Agriculture and Rural Affairs.

• Pig prices are stabilizing due to a drop in supplies, even as demand weakened after the Spring Festival break, Zhu Zengyong, an expert with the ministry, told CCTV
• Prices are expected to rise in the second quarter and be higher than a year earlier, Zhu said
• Hog herds at large farms were 1.1% lower at the end of February from a month earlier, suggesting weaker supplies in March and April
• The number of newborn piglets has also been falling since September

Baltic index hits over 3-month high on firm demand across vessel segments

The Baltic Exchange’s dry bulk sea freight hit a more than three-month high on Monday on robust demand across all vessel segments.

• The overall index, which factors in rates for capesize, panamax and supramax shipping vessels, gained 45 points, or 1.9%, to 2,419 points.
• The capesize index was up by 70 points, or 1.74%, at 4,089.
• Average daily earnings for capesize vessels, which typically transports 150,000-ton cargoes such as iron ore and coal, increased by $579 to $33,911.
• The panamax index gained 64 points, or 2.9%, to 2,298 points, rising for the fifteenth straight session.
• Average daily earnings for panamax vessels, which usually carry about 60,000-70,000 tons of coal or grain cargo, were up $579 at $20,685.
• Prices of iron ore futures rebounded after upbeat data in top consumer China renewed hopes for a pick-up in steel demand in coming weeks and as some traders liquidated their short positions.
• Among smaller vessels, the supramax index, was up by 12 points at 1,338 points.
• A Marshall Islands-flagged liquefied petroleum gas (LPG) tanker reported two explosions near the ship as it travelled off the coast of Yemen’s port city of Hodeidah, the third merchant vessel attack of the past 48 hours, British security firm Ambrey said on Friday.

CLI terminal in Brazil projects 15% increase in grains, sugar shipments

Logistics company CLI, who operates one of the largest agricultural commodities export terminals in Brazil, projects to ship around 15% more grains and sugar in 2024 due to increased demand from commodities traders and mills.

According to the company’s director of operations, Luis Neves, sugar shipments will likely grow more than 1 million metric tons this year to up to 9.5 million tons, while grains loadings are estimated to increase 1 million tons to 6.5 million tons. Neves said that the company reported a monthly loading record in February at 1.3 million tons, with sugar making up 900,000 tons of that amount.

CLI is Brazil’s largest sugar export terminal, shipping around a third of the country’s total. It is controlled by Macquarie Asset Management and private equity firm IG4, with rail company Rumo RAIL3.SA holding a 20% stake.

Brazil exported a record amount of sugar in 2023 at around 31 million tons amid a bumper sugarcane crop. Most analysts expect around the same volume being shipped in 2024.  Neves said that basically all of CLI’s loading capacity for 2024 has already been booked by traders, mills and co-ops.

The country has struggled to ship all of its agricultural goods as it increases its share in several export markets, leading the rankings in soybeans, corn, sugar, coffee, cotton, orange juice, poultry, beef and tobacco. Vessels had to wait more than a month in some moments of last year to start loading.

CLI plans to invest 600 million reais ($119.51 million) to expand its terminal in the Santos port, with work expected to start in the first quarter of 2025.

Singapore Exchange to Disclose Trader Positions in Commodities

• Move comes as financial participants expand iron ore trading
• Rubber and freight contracts will also be part of the new push

Singapore Exchange Ltd. will start disclosing the position of traders in key commodity markets after investors boosted participation in its iron ore futures.

The bourse plans to start publishing the so-called commitment of traders report early in the third quarter, according to William Chin, head of commodities at SGX. Rubber and freight contracts will also be part of the push for transparency as the share of financial participants in the exchange continues to grow.

The move will align SGX with rival exchanges in the US, where the government mandates the disclosure of positions from participants including producers and money managers on a weekly basis. In Europe, bourses including the Intercontinental Exchange Inc. and the London Metal Exchange also publish the data for key energy, metals and agriculture futures contracts.

US South Braces for a Crop-Killing Freeze: Weather Watch

A crop-killing freeze is forecast for the US South from Arkansas to central North Carolina, the National Weather Service said.

Temperatures are forecast to drop below freezing — 32F (0C) — over a wide area and stay there in some cases for at least 24 hours, which is enough to damage or kill crops that have begun to sprout with the early onset of spring. Little Rock, Arkansas will drop to 31F overnight; Birmingham, Alabama should reach 29, and Atlanta at least 31.

The cold, which will sink temperatures 3F to 5F below normal from the Great Lakes to Gulf of Mexico Coast, and even colder in central Canada, will add about 8.5 to the heating degree days tally, meaning the chill will fire heating demand across the US, the Commodity Weather Group said.

While the calendar marks Tuesday as the first day of spring, in many areas warmer temperatures have already had plants greening out and flowers blooming, according to the National Phenology Network, which tracks such things. The green sprouts arrived record early across parts of the Midwest. This means the danger to crops should continue through the rest of March across the Great Plains and parts of the Midwest that are forecast to be colder than normal through April 1, Commodity Weather Group said.

This early onset of spring has been the trend for years, said Theresa Crimmins, director of the National Phenology Network.

“Many, many studies show clear trends toward warmer temps and earlier starts to springtime activity over the longer term,” she said. “The strength of the trend varies by location – we see the strongest trends for increasing temps and advancing springtime activity in northern latitudes, as well as in the Southwest.”

Crimmins added that winter is changing — and fast. “Winter is the fastest warming season — the months during which we are seeing the greatest increases in temperature,” she said. “This has the direct effect of advancing activity in plants and animals in the spring, and evidence of this abounds.”

It’s also having an impact on tourism seasons. Cherry blossom blooms, which are are a big tourist draw in Japan and the US, are starting earlier as climate change makes winters warmer.

 

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