Global Ag News for Mar 7.24

TOP HEADLINES

Mexico Waiting US Proof That GMO Corn is Safe for People: Rtrs

Mexico is waiting for the US to prove that imported genetically-modified corn is safe for Mexicans, Reuters reported Wednesday citing Deputy Agriculture Secretary Victor Suarez.

• In a written submission to a USMCA panel, Mexico said science proves GMO corn and the herbicide glyphosate are harmful to human health, Reuters reported
• Mexico said its decree to ban GMO corn for human consumption is within its right
• The submission was dated January 2024 but was shared publicly on Tuesday, Reuters reported Wednesday
• Suarez said the US must show GMO corn is not harming Mexico’s population
• A spokesman for the US Department of Agriculture said Mexico’s approach to biotechnology runs counter to decades worth of evidence demonstrating its safety: Reuters

FUTURES & WEATHER

Wheat prices overnight are up 3 1/2 in SRW, up 5 3/4 in HRW, up 7 in HRS; Corn is up 3 3/4; Soybeans up 7 1/4; Soymeal up $2.50; Soyoil up 0.23.

For the week so far wheat prices are down 23 1/4 in SRW, down 2 1/2 in HRW, up 8 1/2 in HRS; Corn is up 7 3/4; Soybeans up 4 1/4; Soymeal up $0.60; Soyoil up 0.39.

For the month to date wheat prices are down 41 3/4 in SRW, down 25 1/4 in HRW, down 6 3/4 in HRS; Corn is up 3; Soybeans up 14 3/4; Soymeal up $3.70; Soyoil up 0.34.

Year-To-Date nearby futures are down 17.0% in SRW, down 10.2% in HRW, down 9.1% in HRS; Corn is down 10.7%; Soybeans down 11.8%; Soymeal down 13.2%; Soyoil down 6.4%.

Chinese Ag futures (MAY 24) Soybeans up 36 yuan; Soymeal down 3; Soyoil up 28; Palm oil up 82; Corn up 10 — Malaysian Palm is down 10. Malaysian palm oil prices overnight were down 10 ringgit (-0.25%) at 4071.

There were changes in registrations (-55 Corn, -110 Soybeans, -10 Soyoil, -1 Soymeal). Registration total: 640 SRW Wheat contracts; 0 Oats; 61 Corn; 593 Soybeans; 636 Soyoil; 0 Soymeal; 0 HRW Wheat.

Preliminary changes in futures Open Interest as of March 6 were: SRW Wheat up 5,127 contracts, HRW Wheat up 2,389, Corn up 10,243, Soybeans up 9,833, Soymeal up 6,333, Soyoil down 240.

Brazil: Wet season showers in central Brazil continue to be widely scattered into next week, favorable for emerging safrinha corn. A front in southern Brazil will continue to be active the next few days as well as it bends around the region, favoring an increase in soil moisture for immature long-season crops and for the newly planted safrinha corn.

Argentina: A front brought some heavy rain to northern areas over the weekend, while it was more isolated over southern areas. Northern areas will continue to see showers with the front stuck in the area through Thursday. Another front will move in southern areas on Wednesday with more waves of showers moving northward through the weekend. The rainfall should be favorable for most areas, but is also scattered enough that it may miss some key areas across the south that could use some more rain. The overall pattern is a favorable for reproductive to filling corn and soybeans, however.

Europe: The main low continues to reload and bring more systems into western Europe going into next week. Models have backed off on the threat for colder air moving into eastern areas for next week, though a drop from the significant warmth is still likely. Still, conditions are mostly favorable as wheat continues to exit dormancy in many areas. France continues to be too wet though.

Black Sea: A front coming down from the north will bring in some colder air this weekend and next week, but models are keeping anything intense farther north and east. Any drop in temperatures should not have a dramatic effect on wheat that is still awakening from dormancy for the most part. Instead, a system will move through next week that should spread more meaningful moisture for the crop that is already in good condition.

Australia: A system will move through western areas with some showers on Friday, but most areas are going to stay dry. Above-normal temperatures in the east will be reducing soil moisture in most places, which is a concern for the coming winter wheat crop that begins to be planted in about six weeks. The reduction of El Nino and eventual turn to La Nina should favor the winter wheat crop later this year, however.

Northern Plains: Some cooler air will remain around the next couple of days before rising again this weekend. In the cooler air, more showers will be possible through Thursday, mostly as some light snow.

Central/Southern Plains: A system will move through Wednesday night through Friday with widespread scattered showers. That may include some pockets of snow, mostly in the High Plains, but will help add to soil moisture for helping to fight any outstanding wildfires. It will also help to replace soil moisture losses due to higher winds and temperatures that have sapped it from the topsoil recently, beneficial for wheat.

Midwest: A cold front brought scattered showers to the region the last couple of days and exits the east on Wednesday. Though temperatures have decreased behind the front, they are still be above normal. Another storm system will move through Thursday through the weekend with more widespread precipitation and chances for snow in some areas. Both systems should help with building moisture. Temperatures still remain warm going into mid-March and may coax some early planting across the south in the next couple of weeks if the forecast is benign. However, colder temperatures are forecast for the last 10 days or so of the month.

Delta: Above-normal temperatures continue through mid-March while a couple of systems bring more rainfall through the region this week. The combination of good soil moisture and warm temperatures may coax some early planting in the region over the next couple of weeks. However, a burst of colder air is likely to come in later this month, which could turn around ideas for early planting.

The player sheet for Mar. 6 had funds: net sellers of 7,000 contracts of SRW wheat, buyers of 1,000 corn, buyers of 2,000 soymeal, and buyers of 1,500 soyoil.

TENDERS

• WHEAT TENDER: Egypt’s state grains buyer the General Authority for Supply Commodities (GASC) is seeking wheat in an international tender. The deadline for offers is March 7.
• CORN SALE: Leading South Korean animal feed maker Nonghyup Feed Inc. (NOFI) bought an estimated 133,000 metric tons of animal feed corn in an international tender on Wednesday
• FEED BARLEY TENDER: Jordan’s state grains buyer has issued an international tender to purchase up to 120,000 metric tons of animal feed barley
• 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 will be held on March 13.
• MILLING WHEAT SALE UPDATE: Algeria’s state grains agency OAIC is believed to have purchased between 870,000 to 900,000 metric tons of milling wheat in an international tender on Tuesday.

PENDING TENDERS

• WHEAT TENDER: The Taiwan Flour Millers’ Association has issued an international tender to purchase an estimated 56,400 metric tons of grade 1 milling wheat to be sourced from the United States
• WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 metric tons of milling wheat
• CORN, BARLEY AND SOYMEAL TENDER: Iranian state-owned animal feed importer SLAL issued international tenders to purchase up to 180,000 tonnes of animal feed corn, 120,000 tons of feed barley and 120,000 tons of soymeal
• CORN AND BARLEY TENDER: Algerian state agency ONAB issued international tenders to purchase up to 120,000 metric tons of animal feed corn and 30,000 tons of feed barley
• SUGAR TENDER: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), is seeking 50,000 tonnes of raw cane sugar of any origin in an international tender, it said in a statement. The deadline for offers is March 9, with arrival set for April 15-30 and/or May 1-15.
• WHEAT TENDER: Turkey’s state grain board TMO issued an international tender to sell and export 150,000 metric tons of durum wheat.

 

 

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 Feb. 29.

• Corn est. range 800k – 1,400k tons, with avg of 1,050k
• Soybean est. range 180k – 600k tons, with avg of 338k

DOE: US Ethanol Stocks Rise 0.1% to 26.051M Bbl

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

• Analysts were expecting 26.132 mln bbl
• Plant production at 1.057m b/d, compared to survey avg of 1.071m

Brazil February Agriculture Exports by Volume: MDIC

Following is a summary of key Brazilian agriculture and mining exports by volume, from the Brazilian Trade Ministry.

• Soybean exports rose 32% y/y

Brazil 2024/25 wheat crop seen growing 14% yoy – StoneX

Brazil’s 2024/25 wheat crop is seen at 9.2 million tons, a 14% increase from the 8.1 million tons estimated for the previous year, consultancy firm StoneX said on Wednesday. It was the first estimate StoneX released for Brazil’s next wheat crop, which has yet been planted in the South American country’s main regions. StoneX attributed the expected growth on a higher yield despite a smaller planting area. Planting area is seen falling 11%, StoneX said, highlighting an expected drop in the southern region where most of the nation’s wheat production is concentrated.

It said farmers’ decision to reduce planted area is based on factors such as lower yields in the previous crop, a seed shortage, domestic prices rising less than expected and some competition with the second corn crop.

The consultancy firm expects the wheat crop yield in Brazil to grow 3.02 tons per hectare in the 2024/2025 crop, from 2.34 tons per hectare in the previous year, which was impacted by adverse climate conditions.

Brazil Soy Exports Seen Reaching 12.81 Million Tns In March Versus 14.44 Million Tns In Same Month A Year Ago- Anec

• BRAZIL SOY EXPORTS SEEN REACHING 12.81 MILLION TNS IN MARCH VERSUS 14.44 MILLION TNS IN SAME MONTH A YEAR AGO- ANEC
• BRAZIL SOYMEAL EXPORTS SEEN REACHING 2.11 MILLION TNS IN MARCH VERSUS 1.81 MILLION TNS IN SAME MONTH A YEAR AGO- ANEC
• BRAZIL CORN EXPORTS SEEN REACHING 146,783 TNS IN MARCH VERSUS 780,053 TNS IN SAME MONTH A YEAR AGO- ANEC
• BRAZIL WHEAT EXPORTS SEEN REACHING 613,973 TNS IN MARCH VERSUS 485,365 TNS IN SAME MONTH A YEAR AGO- ANEC

Brazil’s Top Grains Producer Cuts Soy Yield Outlook on Dryness

SLC Agricola, Brazil’s largest publicly traded farming company, has cut its soybean yield forecast by 6.4%, and now expects 3.432 tons of the grain per hectare, according to 4Q results released Wednesday.

• Estimate for soybean area in current season at 320,009 hectares (790,760 acres), 0.2% down from December forecast
• Company has so far harvested 60.1% of planted soy area
• High temperatures and below average rains damaged soy development, mainly in biggest producer Mato Grosso state: SLC
• Corn’s winter crop yield slightly reduced to 7.58 tons per hectare
• Planted area seen at 96,661 hectares, up 1% from previous estimate

China Jan-Feb soybean imports fall to 5-year low

Soybean imports for top oilseed buyer China fell to a five-year low for the first two months of the year, weighed down by poor crushing margins and fewer ship arrivals during the Lunar New Year holidays. Imports for January and February combined were at 13.04 million metric tons, down 8.8% from the same period a year ago, according to the General Administration of Customs. The imports are the lowest for the period since 2019, according to Reuters records.

China customs also reported revised soybean import volumes for January-February 2023 to 14.30 million tons, versus an initial published figure of 16.17 million tons. Imports for the first two months of this year were in line with analysts’ expectations of between 13 million and 14 million tons.

“Delayed shipments under poor crush margins, Chinese New Year holidays, and slow customs clearance are the reasons for the relatively low import figure,” said Rosa Wang, an analyst at consultancy JCI.

China combines import data for January and February into one release to smooth out the impact of the Lunar New Year holidays, which fall in either of the two months each year.

“Arrivals in January and February are low as Chinese feed millers reduced meal usage. From April onwards, feed millers will increase meal usage due to cheaper beans,” said a Singapore-based trader at an international company which supplies beans to China.

China’s soybean demand for livestock feed may be hit this year by new regulations to control the nation’s pig production capacity after an aggressive expansion of farms led to an oversupply of pigs and mounting losses. China lowered the national target for normal retention of breeding sows to 39 million from 41 million, in a move that analysts say could reduce the size of the world’s largest pig herd by at least 22 million. Meanwhile, soybean harvest in major producing countries Brazil and Argentina was well under way with expectations of plentiful supply. Analysts have been mostly downgrading Brazilian estimates in recent weeks but the country is still flush with beans after a record crop last season and has been exceeding U.S. sales to China.

Likely La Nina return ahead stokes farmer worries in Argentina

The high probability of a strong La Nina arriving by October has put grains farmers on alert in Argentina, where the climate phenomenon usually brings dry weather with lower rainfall, the Rosario grains exchange said on Wednesday.

Argentina is one of the world’s main grains exporters and dry conditions towards the end of the year would affect the development of part of the wheat crop and the planting of corn and soybeans in the next 2024/25 season.

“An analysis carried out with data from international organizations on the Pacific shows a clear trend: the 77% possibility of a ‘La Nina’ event for the month of October,” the exchange said in a report. “The information is worrying.”

Argentina, where the 2023/24 campaign is currently under way, has only recently emerged from a string of three straight years of La Nina, which hit particularly hard the 2022/23 harvest, halving production of key soy, corn and wheat crops. The exchange added that forecasts pointed to a strong version of the climate phenomenon.

“The level of cooling that is being projected has rarely been seen in the last 25 years,” it said, referring to an acceleration of equatorial trade winds associated with La Nina that cause a cooling of the Pacific at the Equator.

“To find a similar cooling we must go back to the end of 2007 and the beginning of 2008,” the exchange added. In the 2008/09 campaign, Argentina suffered a severe drought whose losses were similar to those seen last year.

Soy and corn in Argentina are currently in growth stages, having benefited from abundant rains as a result of the current El Nino phenomenon, the reverse of La Nina. The Rosario exchange estimates the 2023/24 soybean harvest at 49.5 million tons and the corn crop at 57 million tons.

Erratic Weather Lowers India’s Chance to Reap Record Wheat Crop

• Unseasonal rains, hailstorms damage crops in some key states
• Wheat crops may also face hotter-than-normal weather in March

Heavy rain and hail struck India’s wheat belt just before harvest, denting the chance for the country to reap a record crop.

The storms spanned the northwest last weekend, where most wheat is grown. About 150,000 hectares (370,658 acres) of wheat and rapeseed were hit in Punjab, said Jaswant Singh, director at the farm ministry in the state, known as the country’s food bowl. Damage in the region is still being assessed, he said.

In neighboring Haryana, farmer Anil Kalyan — who planted wheat on about 16 hectares — said some of his fields were flattened. It’s a setback for crops, which may also face hotter-than-average temperatures this month.

The farm ministry in February predicted a record harvest of 112 million tons this year, and farmers will begin collecting crops in April. A downturn may lower the chance India will lift shipment curbs, which have been in place since 2022 as the government seeks to ensure food security and contain prices.

Still, the affected area in Punjab only accounts for less than 0.5% of the country’s wheat and rapeseed plantings and officials expect some of the affected crops to recover. Gyanendra Singh, head of the state-run Indian Institute of Wheat and Barley Research, said some of the wheat bent by the bad weather will revive and the crop looks “very good” overall.

February Breaks Another Heat Record as Ocean Warms to New Levels

The world continues to smash through temperature records after a year of increased carbon-dioxide emissions from the energy sector.

February was the ninth consecutive month to register as the warmest on record, according to a report by Europe’s Earth observation agency Copernicus.

Since June, every month has set a new high for the global average temperature during that time of year. February’s temperature was 1.77C warmer than the estimated comparable average for the pre-industrial period.

Meanwhile, sea surface readings indicate the ocean hit an all-time heat record last month.

“The climate responds to the actual concentrations of greenhouse gases in the atmosphere,” said Carlo Buontempo, director of the Copernicus Climate Change Service, which is run on behalf of the European Commission. “Unless we manage to stabilize those, we will inevitably face new global temperature records and their consequences.”

Over the past 12 months, global temperatures were the highest ever documented, at 1.56C above the pre-industrial average. Last year global energy-related carbon dioxide emissions rose by 1.1% to a new high, according to the International Energy Agency.

Scientists have also raised concerns about heat rising in the ocean. The global average sea surface temperature for February was the highest for any month on record. The daily average reached 21.09C at the end of the month, according to Copernicus.

Argentina Court Paves Way for Viterra-Bunge Takeover of Vicentin

An appeals court in Santa Fe Province has overturned a judge’s decision rejecting a rescue plan drafted by bankrupt soy exporter Vicentin SAIC, according to the court’s Wednesday ruling.

• The rescue plan — featuring a severe debt restructuring and a takeover by Glencore-backed Viterra, Bunge, which Viterra is acquiring, and local cooperative ACA — had been rejected in September by a judge who instead opened the case up to other proposals
• Vicentin appealed
• There are still some legal hurdles to clear in order to proceed with the rescue plan and Viterra/Bunge-led takeover, according to an external press representative for Vicentin
• He added that hostile creditors could appeal Wednesday’s resolution

Ample Fertilizer Drives Shift in Chinese Agricultural Policy

The phosphate trade gets a supply boost with China implementing an exports-quota system for the crop nutrient and returning to the global market. Increasing domestic fertilizer inventories and record nitrogen operating rates in China eased government concerns over spring availability. Falling Chinese corn prices signal a domestic-policy achievement.

Mild Weather Allows US Farmers to Start Spring Fieldwork Early

US ammonia, urea and phosphate prices strengthened as warm weather prompted the onset of pre-planting applications, testing available supplies at many inland terminals. An early spring start gives farmers more time to consume inputs, supporting sales for producers like CF, Nutrien and Mosaic. China’s declining energy prices are increasing nitrogen profitability, sending urea production soaring.

Nitrogen, Phosphate Prices Up on Tight Supply

Nitrogen fertilizer prices continued to climb in the US and Canada, fueled by tight supply resulting from an early start to spring application and lost production capacity during January’s polar vortex. Corn Belt ammonia strengthened to $625-$650 a short ton (st) for limited tons vs. last week’s $575-$625, while urea prices at New Orleans (NOLA) jumped to $385-$400/st from $363-$398. Urea also moved higher at many inland terminals in the Midwest and northern US, along with urea ammonium nitrate and ammonium sulfate. Phosphate prices were strengthening as well at NOLA and inland as demand accelerates, while potash remained flat in early March.

Fertilizer’s Prices Increase in Brazil on US Early Purchases

Though fertilizer prices strengthened in Brazil amid US earlier purchases, falling commodity prices, seasonality and healthy inventories might hold off an uptrend. Domestically, potash sellers are testing higher margins after sales rose the past two weeks. Nitrogen is showing no traction as high seasonal demand is over. Phosphates supplies are tight, but low affordability and China’s return could pressure prices back down.

Increasing Prices Limit Demand in Brazil

Urea prices in Brazil inched up to $395-$400 a metric ton cost and freight from last week’s $394-$395/mt CFR, with bids reported around $370. Ammonium sulfate prices stabilized at $175-$180/mt CFR amid stalled demand. Though Brazil Monoammonium phosphate (MAP) prices firmed to $570-$580/mt CFR in a tight market, up from last week’s $560-$565, there’s only limited interest from buyers as affordability is at historical highs. Potash prices in Brazil increased to $295-$300/mt CFR from last week’s $290, but potash’s uptick halted negotiations as buyers show no interest at new prices.

Brazil fertilizer firm Unigel to halt factories, lay off workers

Unigel will halt two factories in Brazil that it leased from oil major Petrobras, the privately-owned nitrogen fertilizer company said on Wednesday, citing high natural gas prices. Unigel said it had invested around 600 million real ($122 million) starting in 2020 to operate the two leased facilities in Bahia and Sergipe states, which use gas as their main raw material.  The company directly employed about 600 people at the factories and will lay off 255, the statement said.

Unigel said when it entered the fertilizer sector in 2020, it believed the natural gas market would be opened up for competition. As gas prices remain high and the government tries to reduce Brazil’s dependence on fertilizer imports, Petrobras and Unigel agreed on Dec. 29 that the oil company would supply natural gas for the Bahia and Sergipe facilities. However, the arrangement came under scrutiny after Brazil’s federal audit court (TCU) found irregularities in the contract. Brazil, a farming powerhouse, has aimed at reducing its dependence on imported crop nutrients since a supply crisis caused by the war in Ukraine.

Overall, Brazil imports about 85% of its fertilizer consumption. Under a plan unveiled in 2022, Brazil plans to cut fertilizer imports to 45% by 2050 “even if the demand for fertilizers doubled during this period.”

Since President Luiz Inacio Lula da Silva took office, Petrobras has also reversed course on a prior decision to divest from fertilizer assets. In remarks on Monday, Vice-President Geraldo Alckmin said Brazil imports about 85% of its nitrogen fertilizer demand. The figure is 70% for phosphate fertilizers and 97% for potassium chloride. Unigel said it will carry out maintenance work in order to preserve the now halted assets, in addition to ensuring compliance with legal and socio-environmental commitments.

 

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