Global Ag News for Oct 11.24

TOP HEADLINES

Drought blocks shipping in another grains corridor in northern Brazil

Brazilian port terminal group Amport said on Thursday that grains transport through the Tapajos waterway has come to a halt as a severe drought hit northern Brazil and lowered the river’s water levels.

WHY IT’S IMPORTANT

Tapajos, which links Brazil’s central and north regions, is a key corridor to transport grains from agricultural heartlands in states, including Mato Grosso, Brazil’s top soy producer, to ports in the Amazon region.

KEY QUOTES

Amport, which represents firms such as Cargill and Louis Dreyfus, told Reuters that navigation of barge convoys carrying grains in the Tapajos has been halted since last Friday, and is expected to resume in November if forecast rains come.

“Companies are waiting for the river to rise by at least 20 centimeters (7.9 inches) to navigate safely,” Amport said in a statement.

ADDITIONAL CONTEXT

The drought had already halted shipping of grains through the Madeira river, another important grains corridor, in September.

The head of local grains traders lobby Anec, Sergio Mendes, said on Thursday that these logistical issues did not impact export volumes, since the firms had been already prepared for the scenario by shipping some grains to ports in southern Brazil.

FUTURES & WEATHER

Wheat prices overnight are up 2 1/4 in SRW, up 2 1/2 in HRW, up 1/2 in HRS; Corn is up 1 1/2; Soybeans up 4 1/2; Soymeal up $1.40; Soyoil up 0.15.

For the week so far wheat prices are up 16 1/4 in SRW, up 15 1/2 in HRW, up 12 1/4 in HRS; Corn is down 4 3/4; Soybeans down 18 1/2; Soymeal down $13.00; Soyoil down 0.07.

For the month to date wheat prices are up 22 in SRW, up 29 3/4 in HRW, up 29 in HRS; Corn is down 4 3/4; Soybeans down 37 3/4; Soymeal down $24.10; Soyoil up 0.60.

Year-To-Date nearby futures are down 3.5% in SRW, down 4.4% in HRW, down 10.1% in HRS; Corn is down 10.9%; Soybeans down 21.2%; Soymeal down 17.4%; Soyoil down 8.3%.

Chinese Ag futures (JAN 25) Soybeans down 4 yuan; Soymeal down 21; Soyoil up 72; Palm oil up 120; Corn down 3 — Malaysian Palm is up 117.

Malaysian palm oil prices overnight were up 117 ringgit (+2.76%) at 4350.

 

There were changes in registrations (50 Soymeal). Registration total: 220 SRW Wheat contracts; 0 Oats; 126 Corn; 232 Soybeans; 402 Soyoil; 176 Soymeal; 5 HRW Wheat.

Preliminary changes in futures Open Interest as of October 10 were: SRW Wheat down 1,941 contracts, HRW Wheat up 3,025, Corn up 13,690, Soybeans up 2,889, Soymeal down 5,861, Soyoil up 1,183.

 

Northern Plains: Mostly warm and dry weather is forecast through most of next week, though a quick burst of cooler air will move through early next week. Conditions continue to be favorable for maturing corn and soybeans as well as harvest. A system could move through late next week and weekend and models are trying to figure out if it will bring a burst of cooler air or significant precipitation.

Central/Southern Plains: Warm and almost completely dry conditions continue through most of next week, though a brief burst of colder air will move through early next week that could have a few isolated showers with it. Overall conditions are favorable for corn and soybean harvest, but poor for winter wheat establishment and they need rain. A system could move into the region late next week or weekend and models are trying to figure out if it will bring a burst of cooler and or significant precipitation.

Midwest: A front will move through this weekend, bringing showers to the Great Lakes into early next week, as well as a burst of colder air that could linger for a few days before the warmth returns, especially in the east. Conditions are mostly favorable for harvest, but not for winter wheat establishment in some areas that missed out on Helene’s rainfall two weeks ago.

Brazil: The late start to significant rain in central Brazil has caused a slow start to soybean planting, but the wet season truly starts today as a front moves in from the south. Though the front will leave this weekend, the showers are forecast to continue next week and thus starts the wet season rainfall that the region has been waiting for. This comes about two weeks late. If producers can’t make up the deficit in the next couple of weeks, the safrinha corn crop that will be planted in February may be planted late, which would expose it to more of the dry season in 2025. Southern Brazil has had much better weather for corn and soybean planting as well as for filling wheat.

Argentina: A system brought showers over northern areas earlier this week, which also included some of the driest areas in Cordoba. However, the drought continues and more rain is needed. Several chances will occur for the next couple of weeks. Another front will move through southern areas Friday, a system moves through early next week, and another comes through late next week. Showers are expected to come in streaks but producers need this to be heavy, soaking rain to reduce the drought and increase corn planting. Soybean planting doesn’t begin until November, but there could be issues with that as well if drought is not significantly reduced over the next couple of weeks.

 

The player sheet for Oct. 10 had funds: net buyers of 2,000 contracts of SRW wheat, sellers of 3,000 corn, buyers of 2,500 soybeans, sellers of 3,500 soymeal, and buyers of 3,500 soyoil.

TENDERS

• BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase up to 120,000 metric tons of animal feed barley.
• SOYMEAL PURCHASE: South Korean import group the Feed Leaders Committee (FLC) purchased up to 60,000 metric tons of soymeal to be sourced from South America or optionally from the United States or China.
• WHEAT PURCHASE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought 115,050 metric tons of food-quality wheat from the United States, Canada and Australia in a regular tender.
• WHEAT OUTPUT: Harsh weather is reducing wheat production in major exporting countries, cutting inventories that have already been projected to hit nine-year lows while fuelling a sudden surge in prices.
• CORN IMPORTS: Turkey will allow imports of 1 million metric tons of corn at a tariff rate of 5% until the end of the year, the trade ministry said.
• NO MAJOR PURCHASES IN CORN, BARLEY TENDERS: Iranian state-owned animal feed importer SLAL is believed to have made no major purchases in tenders that closed on Tuesday for 120,000 metric tons of animal feed corn and 120,000 tons of feed barley, European traders said.

 PENDING TENDERS

• SOYMEAL TENDER: Leading South Korean animal feed maker Nonghyup Feed Inc. (NOFI) has issued an international tender to purchase up to 60,000 metric tons of soymeal sourced optionally from South America, the United States or China
• WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy up to 120,000 metric tons of milling wheat sourced from optional origins.
• WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 metric tons of milling wheat.

 

 

 

TODAY

US Sold 1.26M Tons of Soybeans Last Week; 1.22M of Corn: USDA

USDA releases net export sales report on website for week ending Oct. 3.

• Soybean sales fell to 1,256k tons vs 1,445k in the previous week
• Corn sales fell to 1,222k tons vs 1,684k in the previous week
• All wheat sales fell to 439k tons vs 444k in the previous week

 

US Export Sales of Soybeans, Corn and Wheat by Country

The following table shows US export sales of soybeans, corn and wheat by biggest net buyers for week ending Oct. 3, according to data on the USDA’s website.

• Top buyer of soybeans: China with 583k tons
• Top buyer of corn: Unknown Buyers with 371k tons
• Top buyer of wheat: Mexico with 101k 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 Oct. 3, according to data on the USDA’s website.

• Mexico bought 27.2k tons of the 50.7k tons of pork sold in the week
• China led in beef purchases

 

Argentina Dryness Slows Corn Planting on Farms: Grain Exchange

Planting of the early corn crop in Argentina is progressing slowly after dryness left farms too dry to embed seeds, the Buenos Aires Grain Exchange said in a weekly estimates report.

• In the Entre Rios province, farmers who haven’t been able to get corn in the ground will shift to soybeans
• In other regions, spotty rains are helping wheat and corn crops, though rains haven’t been enough to halt a deterioration of wheat plants
  • In several areas, wheat needs more rain to maintain yield potential

 

Argentine Corn Production Estimate Oct. 10: Exchange (Table)

The Buenos Aires Grain Exchange releases weekly report on website.

• 2024-25 corn planting area unchanged at 6.3m ha
• Corn planting advances to 18.6% complete from 13.7%

 

Argentine farmers halt corn planting on parched western farmlands

Argentine farmers have halted their corn planting in western parts of Argentina’s agricultural heartland due to dry soil after weeks of poor rainfall, the Buenos Aires grains exchange said on Thursday.

The South American nation is the world’s third-largest corn exporter, and the exchange predicts farmers will this season plant some 6.3 million hectares of corn and produce a 47 million metric ton harvest.

“Western Buenos Aires province has very heterogeneous water conditions,” the exchange said in a weekly report. “As of now, planting has stopped pending fresh rainfall.”

Farmers have sown 18.5% of the planned corn area, it added. Farmers meanwhile have finished planting this season’s wheat crop, although just 51% of the fields have adequate to optimal water conditions, the exchange said.

The exchange predicts that this season will yield a 18.6 million ton wheat output. Farmers are set to start harvesting their fields in November.

 

China Corn Supported by Plunging Imports, Higher Demand: CASDE

China’s corn prices are seeing support from a continuing fall in foreign supplies and stronger domestic demand, the country’s agriculture ministry said

• Imported corn has continued to decline significantly, while consumption by feed and processing sectors has increased steadily, putting a floor under prices of China’s new corn crop
• Some warehouses in the northeastern region under the grains stockpiler Sinograin have started buying domestic crop for reserves, which has also bolstered prices, according to the monthly China Agricultural Supply and Demand Estimates released on Friday
• New Curbs on Grain Imports to Boost Local Prices
• Lower precipitation is expected in some areas along the Yangtze River in October, which might affect planting and growth of the rapeseed crop, the ministry said
• Estimates for production, imports and consumption of corn, soybeans, cotton, edible oils and sugar for 2024-2025 remained unchanged

 

Ukraine 2024/25 grain exports seen falling to 40 mln T due to smaller crop, official says

• Abnormal heatwaves cut Ukraine grain crop
• Grain exports seen falling due to smaller harvest
• War risks may affect Ukrainian exports

Ukraine’s 2024/25 grain exports are likely to decrease to around 40 million metric tons from almost 51 million tons in 2023/24 due to a smaller harvest, the first deputy agriculture minister Taras Vysotskiy said on Friday.

“The harvest (of 2024) due to difficult weather conditions is a bit smaller and there are no carryover stocks from previous periods and exports will be around 40 million tons,” Vysotskiy told national television.

Abnormal heatwaves dominated most Ukrainian regions this summer, sharply reducing the yield of corn and other late crops.

Farm minister Vitaliy Koval told Reuters last month that Ukraine, grain net-exporter, would keep its exports at a high level despite a smaller harvest and could ship abroad 16.2 million tons of wheat and 21.7 million tons of corn in the 2024/25 season.

Traders exported 18.4 million tons of wheat and 29.4 million tons of corn in 2023/24 also due to high stocks from previous seasons, when key Ukrainian seaports were blocked because of the Russian invasion.

Ukraine is a major global grain grower and before Russia’s invasion in 2022 the country exported about 6 million tons of grain alone per month via the Black Sea. About 85% of Ukrainian food exports now leaves Ukraine from its Black Sea ports.

“This is not a record volume (of 2024 grain harvest) and therefore we are confident that the existing infrastructure … will allow this average volume to be exported,” Vysotskiy said.

Ukraine has exported 11.7 million tons of grain so far the 2024/25 July-June season, up from about 7.42 million tons over the same period of the previous season, agriculture ministry data showed on Friday.

Traders shipped abroad 1.29 million tons of grain so far in October versus 667,000 tons over Oct. 1-11 last year.

Local producers however said that increased attacks by Russia on ships carrying agricultural products in the key Black Sea ports were complicating export logistics and affecting freight costs.

Insurance sources said on Thursday the war premiums had jumped around 30% this week to just over 1% of the value of the vessel from around 0.7% in early September, which would mean hundreds of thousands of dollars in extra costs.

Vessels calling at Ukraine were at “heightened risk of direct attack by Russian forces”, British maritime security company Ambrey said in a note. Russian ballistic missiles attacked the Odesa region again on Friday, becoming the fourth such attack since Sunday.

 

Russia Slightly Cuts 2024 Grain Crop Forecast: Interfax

Russia cut the 2024 grain harvest forecast to about 130m tons, including 83m tons of wheat, Deputy Prime Minister Dmitry Patrushev says, according to Interfax.

• NOTE: Previous official forecast was 132m tons of grain, including 84m tons of wheat

 

Russian grain exports may hit $17.5 bln by 2030 – AgMin

Russia’s grain exports may reach $17.5 billion by 2030, compared to $16.3 billion in 2023 and $11.4 billion in 2021, according to data presented by Russian Agriculture Minister Oksana Luth at a plenary session held on the sidelines of the Golden Autumn 2024 exhibition in Moscow on Thursday.

As reported, the Russian president has set the task of increasing 2021 agro-industrial exports 1.5-fold and raising output 25% by 2030.

Exports of fat and oil products may increase to $10 billion by 2030 versus $7.3 billion in 2021 and $8.5 billion in 2023; fish exports to $7.5 billion from $6.6 billion and $5.4 billion, respectively; exports of finished products to $15.8 billion versus $9.9 billion and $11.5 billion, and exports of meat and dairy products to $4.4 billion from $1.6 billion and $1.8 billion.

As reported, exports should grow overall to $55.2 billion by 2030 versus $43.5 billion in 2023.

Exports still lag behind last year in value terms due to falling global food prices, Luth said. “We are nevertheless trying to reduce this lag,” she said.

At the same time, exports are 6%-7% higher than last year in physical terms.  All state support measures for exports will be maintained as part of the Export of Agricultural Products federal project which lasts until 2030, she said.

 

India Sept. Vegetable Oil Imports Fall to 1.09m Tons: SEA

India’s vegetable oil imports fell to 1.09m tons in September from 1.56m tons in August, according to the Solvent Extractors’ Association of India.

• Palm oil imports fell to 527,314 tons from 797,482 tons in August
• Soybean oil imports fell to 384,382 tons from 454,639 tons in August
• Sunflower oil imports fell to 152,803 tons from 284,108 tons in August

 

French Corn Harvest Lags Behind 5-Year Average: FranceAgriMer

Some 6% of the corn crop was harvested as of Monday, slightly up from the previous week but still lagging well behind the five-year average of 40%, FranceAgriMer said on its website.

• Some 6% of the French soft-wheat crop was planted as of Monday, lower than the five-year average
• 12% of the winter-barley crop was planted, compared with a five-year average of 16%
• Some 78% of French corn was in good or very good condition, slightly lower than the previous week; That compares with 83% a year earlier

 

Russian Attacks Spark Surge in War Insurance for Ukraine Grains

The cost of insuring vessels that transit Ukraine’s shipping corridor in the Black Sea jumped this week after Russia ramped up attacks on key ports.

Coverage has now surged to above 1% of the value of a ship, according to two people involved in the market, who asked not to be named because the information isn’t public. That’s up from around 0.75% last week. For a $50 million ship, that would be an increase of $125,000 per voyage.

While ships sailing to and from Odesa have faced a risk of being targeted ever since Ukraine launched its shipping corridor last year, in recent days Russian attacks have intensified. So far traffic is resilient, but continued attacks could make shipowners more wary of sailing through the corridor, which has successfully exported large volumes.

Wheat futures traded in Chicago have risen about 2.5% so far this week, as risks to Black Sea exports have added to concerns over the weather in key producers.

Russia hit three vessels with missiles within four days, according to Ukrainian officials. An attack on Wednesday killed at least eight people and damaged a container vessel with a humanitarian cargo ordered by the United Nations for Palestine, Agriculture Minister Vitaliy Koval said. Russia also hit two ships loaded with grain in attacks on Sunday and Monday.

Ukraine is a major grain exporter, with agricultural commodities earning vital revenues for Kyiv. Over the last three months, Russia delivered more than 60 attacks to cripple Ukraine’s export capacity, said Infrastructure Minister Oleksiy Kuleba. That included 300 port infrastructure targets, 177 vehicles and 22 commercial vessels, while 79 civilians were wounded, including port employees, and crews from logistic companies and vessels, he said.

To be sure, the coverage rates are still fluid given the number of attacks, two underwriters said. The rates also vary from one insurer to another. Vessels can often get cheaper rates than market ones thanks to no-claims discounts.

One broker said that, since the attacks, traders have shown more interest in insuring their cargoes, which are covered separately from the ships themselves.

“This morning there have been new requests from clients for war risk insurance in Ukraine, and these are the clients to whom we previously offered this coverage and were not interested in it,” Maksym Dubovoy, co-owner of Atria Insurance Brokers, said.

 

Malaysia Bourse Mulls Used Cooking Oil Futures on Biofuel Demand

• Exchange is sharing specifications with industry participants
• Used cooking oil is a key component in renewable fuels

Bursa Malaysia Bhd. — the main exchange for the global palm oil market — is considering launching a futures contract for used cooking oil as its demand as a biofuel feedstock grows.

The exchange has shared proposed specifications for the contract with industry participants in a document, according to people familiar with the matter. The futures will be cash-settled and priced against the FOB Straits assessment for used cooking oil by S&P Global Commodity Insights, a copy of the proposed guidelines seen by Bloomberg showed.

The bourse plans to offer the US dollar-denominated contract in lots of 25 metric tons, the document said.

A spokesperson for Bursa Malaysia said the specifications are intended for industry consultation and changes may still be made, with any contract launch subject to regulatory approval. S&P Global declined to comment.

Used cooking oil — a byproduct from restaurants and food manufacturers — serves as a raw material to produce renewable fuels, which are increasingly in demand as governments seek to curb emissions. Waste oil biofuels consumption rose by almost 40% between 2021 and 2023, according to a Transport & Environment lobby group estimate.

 

US Crops in Drought Area for Week Ending Oct. 8: USDA

The following table shows the percent of US agricultural production within an area that experienced drought for the week ending Oct. 8, according to the USDA’s weekly drought report.

• Corn crops experiencing moderate to intense drought jumped by 22 percentage points from the previous week to 49%
• Soybean crops rose by 17 points to 43% in drought

 

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

Barge shipments down the Mississippi river declined to 370k tons in the week ending Oct. 5 from 399k tons the previous week, according to the USDA’s weekly grain transportation report.

• Barge shipments of corn fell 6% from the previous week
• Soybean shipments down 8% w/w
• St. Louis barge rates were $31.20 per short ton, an increase of $1.28 from the previous week

 

Indonesia May Import 1.3M Dairy Cows for Free Meals Plan: Kompas

Indonesia may import 1.3 million dairy cows to support government free meals program which include milk, reports local news outlet Kompas, citing Vice Agriculture Minister Sudaryono.

• Govt suggests companies to import from countries with similar climate like Mexico and Brazil
• Ministry says 46 companies including cooperatives committed to support govt on the program

 

 

 

 

 

 

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