Global Ag News for Mar 8.24

TOP HEADLINES

Global Food Prices Fell in February on Grain and Vegetable Oils

Global food prices fell slightly in February as the declining cost of grains and vegetable oils offset rising sugar costs, according to an index of food-commodity prices created by the United Nations’ Food and Agriculture Organization.

• The index fell 0.7% in February
• Grain prices fell 5% on corn crop expectations and strong Russian wheat exports; vegetable oil prices also declined
• Sugar prices gained on production concerns
• Meat and dairy prices also rose

FUTURES & WEATHER

Wheat prices overnight are up 5 in SRW, up 1 1/2 in HRW, up 3 in HRS; Corn is down 1 1/4; Soybeans up 2 1/4; Soymeal up $0.20; Soyoil down 0.15.

For the week so far wheat prices are down 24 1/4 in SRW, up 11 3/4 in HRW, up 14 in HRS; Corn is up 12; Soybeans up 17 1/4; Soymeal up $2.30; Soyoil up 1.04.

For the month to date wheat prices are down 42 3/4 in SRW, down 11 in HRW, down 1 1/4 in HRS; Corn is up 7 1/4; Soybeans up 27 3/4; Soymeal up $5.40; Soyoil up 0.99.

Year-To-Date nearby futures are down 17.1% in SRW, down 7.4% in HRW, down 9.1% in HRS; Corn is down 9.7%; Soybeans down 10.6%; Soymeal down 13.4%; Soyoil down 4.5%.

Chinese Ag futures (MAY 24) Soybeans up 37 yuan; Soymeal up 54; Soyoil up 82; Palm oil up 62; Corn down 6 — Malaysian Palm is up 23. Malaysian palm oil prices overnight were up 23 ringgit (+0.56%) at 4094.

There were changes in registrations (11 Soybeans, 75 Soyoil, 100 Soymeal). Registration total: 640 SRW Wheat contracts; 0 Oats; 61 Corn; 604 Soybeans; 711 Soyoil; 100 Soymeal; 0 HRW Wheat.

Preliminary changes in futures Open Interest as of March 7 were: SRW Wheat down 5,881 contracts, HRW Wheat up 2,865, Corn down 875, Soybeans up 6,552, Soymeal down 755, Soyoil down 685.

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 day or two as well as it bends around the region. Another wave of showers will move north into southern states this weekend, favoring an increase in soil moisture for immature long-season crops and for the newly planted safrinha corn.

Argentina: Several fronts will bring waves of showers through the country going through next week, being particularly heavy across the north next week. 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 will slowly spread into and through most of Europe going into next week, bringing widespread areas of showers. 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 through the middle of next week. Above-normal temperatures in the east will be reducing soil moisture in most places, which is a concern for the coming winter wheat and canola crops that begin to be planted in about six weeks. The reduction of El Nino and eventual turn to La Nina should favor the winter crops later this year, however.

Northern Plains: Some cooler air will remain around the next couple of days before rising again this weekend. Some light snow continues in the south on Thursday, but will be overall drier until the middle of next week with another system moving in.

Central/Southern Plains: A system developing in the region will bring widespread showers and thunderstorms through Friday. That will also include some pockets of snow, mostly in the High Plains. Another system will move through in the middle to end of next week with more widespread showers as well. Both will help add to soil moisture for helping to fight any outstanding wildfires and 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. 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 and another is forecast for the end of next week. All three systems should help with building moisture, especially in the Ohio Valley. 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 system brings more rainfall through the region over the next couple of days and another does so later next 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. 7 had funds: net buyers of 500 contracts of SRW wheat, buyers of 6,000 corn, buyers of 5,000 soybeans, buyers of 1,500 soymeal, and buyers of 3,500 soyoil.

TENDERS

• WHEAT TENDER CANCELED: Egypt’s state grains buyer the General Authority for Supply Commodities (GASC) said on Thursday it had canceled an international tender for wheat that had a deadline for offers of March 7. GASC did not give a reason for the cancellation.
• WHEAT SALE CANCELED: The U.S. Department of Agriculture (USDA) reported that exporters canceled the sale of 130,000 metric tons of soft red winter wheat to China for delivery in the 2023/24 marketing year.
• CORN SALE: South Korea’s Major Feedmill Group (MFG) purchased an estimated 66,000 metric tons of animal feed corn in a private deal on Wednesday without issuing an international tender
• 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.
• CORN SALE: Algerian state agency ONAB is believed to have bought an unknown volume of animal feed corn in an international tender, which closed on Wednesday.

PENDING TENDERS

• WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 metric tons of milling wheat, European traders said. The deadline for submission of price offers was Feb. 22, they said.
• 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.
• 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.
• 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.

 

 

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 Feb. 29, according to data on the USDA’s website.

• Top buyer of soybeans: China with 269k tons
• Top buyer of corn: Japan with 499k tons
• Top buyer of wheat: Philippines with 107k tons

Argentina grain exchange says 80% of soy fields growing well

Eight in 10 hectares (19.8 to 24.71 acres) of Argentine soybean fields are in “normal to excellent” condition, the Buenos Aires grains exchange said on Thursday, thanks to recent rainfall over northern parts of the South American country.

Argentina is one of the world’s two main exporters of soybean oil and soybean meal, along with Brazil, and the exchange believes this season’s crop will hit 52.5 million metric tons – the highest figure in five years.  Meanwhile 72% of soybean lots have “adequate to optimal” levels of soil moisture, it added.

Farmers have already begun harvesting corn but work in the fields will intensify in April. The 2023/24 season is expected to generate a record 56.5 million tons.

A state weather institute had on Wednesday forecast heavy rains across Argentina’s agricultural heartlands between Friday and Saturday, which would favor many corn and soy lots which are still in development stages.

 

Brazil mills boost sugar capacity, ‘leave’ ethanol to corn processors

Brazil cane mills will boost their sugar production capacity as much as 10% in the new season from April to take advantage of relatively high sugar prices and as increasing supplies of corn make the grain a cheap feedstock for ethanol output.

Brazil is the world’s largest sugar producer. It accounted for nearly 50% of global sugar trade last year as unfavorable weather due to the El Nino climate pattern reduced output and exports from competitors India and Thailand.

Sugar prices have dipped from a 12-year peak hit in November, but are still historically high. Brazilian mills are rushing to complete expansions or new plants to boost their sugar production capacity, analysts said.

“Every mill that can do it (boost sugar capacity), is doing it,” said Julio Maria Borges, a director and partner at JOB Economia e Planejamento, an advisory firm.

“The difference on financial returns between sugar and ethanol is just too big.”

Sugar prices are currently 60% higher than Brazilian ethanol prices, broker and supply chain services provider Czarnikow said in a report this week. It is the widest price gap in 15 years. Among some of the largest sugar investments are Jalles Machado’sJALL3.SA 170 million reais ($34.19 million) plant in Minas Gerais state, Cerradinho Bionergia’s 289 million reais factory in Mato Grosso do Sul and Coruripe’s 200 million reais new sugar production line also in Minas Gerais.

France’s Tereos, which has seven plants in Brazil, plans to allocate 70% of its sugarcane for sugar production, and 30% to ethanol. That is a boost from the already high level of 67% last season. Many other mills are making smaller adjustments, optimizing sugar installations. Cane allocation towards sugar production – and away from ethanol production – across Brazil last year was the largest in 12 years at 49%. Most analysts expect it to be a record in the new season.

Argentina plans $550 mln investment to build grains port in key agricultural region

Argentina’s government on Thursday announced it would invest around $550 million to build a new port in the Rosario area, a major agricultural hub which moves more than 80% of the South American nation’s agricultural and agro-industrial exports.

Argentina is one of the world’s top grains exporters and the banks of the Parana River are dotted with ports to ship out farm products.

“We’re announcing an investment for the construction of a new agro-industrial port in Timbues, on the Parana River,” – some 50 km north of the city of Rosario – presidential spokesman Manuel Adorni said in his morning press conference.

“The investment will be around $550 million. Construction will begin this month,” he said, without giving more detail.

The bioeconomy secretariat, under the agricultural ministry, told Reuters it did not have additional information. Meanwhile, the CIARA-CEC chamber of grains exporters and processors did not immediately respond to a Reuters request for comment.

Argentina is one of the world’s top two exporters of soybean oil and meal, and No. 3 in corn exports. Along the string of ports in Rosario, companies such as Bunge, Cargill and Louis Dreyfus have grain loading and unloading terminals.

Argentina’s 2023/24 soybean and corn harvests are set to kick off next month. The Rosario Stock Exchange estimates the harvests will bring in 49.5 million metric tons of soybeans and 57 million tons of corn.

SLC Sees La Nina As Positive For Company, Brazilian Cerrado

SLC Agrícola sees the return of La Niña during the second half of the year as favorable for Brazilian cerrado crops, Company’s CEO Aurélio Pavinato said during a conference call.

• Lack of rain in southern Brazil and Argentina associated with La Niña could lead to crop failures and high prices next season: Pavinato
  • Trend is for rains to be within normal limits and beneficial to crops in the central and northeastern portion of Brazil, where SLC farms are located: Pavinato
• Drop in commodity prices and margins for rural producers brings more opportunities for area expansion for the company in 2024: Pavinato
• The company still sees the possibility of reducing soybean productivity in the current harvest if the forecast for normal weather in March is not confirmed

French Wheat Conditions Hold Steady in Latest Week: AgriMer

Some 68% of France’s soft-wheat crop was rated in good or very good condition as of March 4, unchanged from the previous week but still well below last year’s level, FranceAgriMer data showed on Friday.

• Winter barley rated good or very good was at 69%, down slightly from the previous week
• Spring barley was 28% planted, up slightly on the week and compared with 96% at this time last year

FAO-AMIS Raises Global Corn Stockpile Estimates, Cuts Wheat

World corn stockpiles in the 2023-24 season are now seen at 317.2m tons, up from a February estimate of 315.2m tons, according to a report published Thursday.

• Corn production estimates were also raised
• Wheat stockpile forecasts were cut to 318.9m tons from 319.7m tons
• Soybean stocks seen at 48.7m tons, down from 49.0m tons
• Rice stockpiles were little changed at 198.7m tons

World 2024 Wheat Production Seen Rising 1% Y/y to 797m Tons: FAO

That would still hold below the all-time high harvest in 2022, the UN’s Food and Agriculture Organization says in a report.

• The US crop could reach 51.5m tons, topping last year, as strong rains recently help output rebound from two years of drought
• EU production is seen falling “slightly” to 133m tons after heavy precipitation hampered sowing in France and Germany
• Russia’s winter-wheat crop could post a “small increase” amid generally favorable weather
• Meanwhile, plantings in Ukraine likely fell further due to the war

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

Barge shipments down the Mississippi river declined to 429k tons in the week ending March 2 from 643k tons the previous week, according to the USDA’s weekly grain transportation report.

• Barge shipments of corn fell 38% from the previous week
• Soybean shipments down 33% w/w
• St. Louis barge rates were $10.69 per short ton, a decline of $0.44 from the previous week

Brazilian Farmers File for Bankruptcy at a ‘Concerning’ Pace

• Growers filing for bankruptcy protection rose sixfold in 2023
• High rates, lower prices are hurting the soy, corn shipper

Farmers in agriculture powerhouse Brazil are filing for bankruptcy protection at a “concerning” pace as high interest rates and falling prices squeeze profits, according to a credit data provider.

The number of growers faced with the prospect of going bust in the world’s largest exporter of everything from corn to soybeans and coffee surged sixfold to 127 last year, Serasa Experian said in a statement. That’s up from just 20 a year earlier. Bankruptcy filings accelerated at the end of 2023.

“When we compare the amount of requests for financial recovery to the millions of people that work in agribusiness, that number seems small,” said Marcelo Pimenta, head of agribusiness at Serasa Experian. “But the speed at which these filings have been growing quarter after quarter is concerning.”

The findings shine a light on a widening problem in Brazil. Bumper crops have been met with falling international prices, hurting profits for growers just as the cost of capital increased due to high interest rates. A gauge of agriculture prices tracked by Bloomberg declined almost 16% last year, the biggest drop in a decade.

Still, dry weather resulted in crop failure in some regions, challenging liquidity for those growers. Soybean farmers accounted for the biggest number of recovery process filings, followed by those with pasture land and coffee.

A group of 44, that includes growers leasing land, was responsible for the most filings. Big producers also weren’t immune, with 35 going under. Mato Grosso and Goiás were the states with the biggest issues, according to Serasa.

 

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