Global Ag News for Oct 23.24

TOP HEADLINES

UK Warns of Grain Threat After Russia Steps Up Black Sea Attacks

• British intelligence detect increase in Russian risk appetite
• UK, Germany to sign defense pact to cooperate on drones, arms

An increase in Russian attacks on Ukrainian port infrastructure in recent weeks threatens food shipments to destinations from Gaza to southern Africa, the UK warned.

British intelligence has detected a “noticeable increase in Russian risk appetite,” leading to at least four merchant ships being damaged during attacks on Black Sea ports between Oct. 5 and Oct. 14, Prime Minister Keir Starmer’s office said late on Tuesday in a statement. That’s delayed a cargo of vegetable oil for the World Food Programme in Gaza, as well as hitting grain and corn shipments to Egypt and southern Africa, it said.

Ukraine is a key global supplier of grain, meaning Russia’s strikes — which coincide with harvest season — pose a threat not just to its neighbor’s agriculture-reliant economy, but also to world food security. The UK, which alongside Norway is leading efforts to protect a maritime corridor in the Black Sea, described the affected shipments as “collateral damage” in Russian President Vladimir Putin’s campaign against Ukraine. The conflict between the two nations, sparked by Russia’s invasion in 2022, is approaching the 1,000-day mark.

As Britain seeks to bolster defense in the face of the threat from Russia and others, it’s also due Wednesday to sign a defense pact with Germany, aimed at increasing cooperation on new deep-strike weapons, armored vehicles and torpedoes. Earlier Tuesday, the government also said it’s increasing support to Ukraine by loaning the country £2.3 billion ($3 billion) to purchase military equipment, paid for by profits generated by frozen Russian assets as part of a wider $50 billion package from the Group of Seven nations and European Union.

Russia has been targeting Kyiv’s export infrastructure since the 2022 invasion, with strikes on its ports in the Black Sea and on the Danube. Shipments have remained resilient despite considerable damage and a very dangerous working environment, as traders found new routes to export. After the latest uptick in Russian attacks, the cost of getting war insurance cover for cargo vessels is rising.

 

FUTURES & WEATHER

Wheat prices overnight are down 5 1/4 in SRW, down 5 1/2 in HRW, down 3 3/4 in HRS; Corn is down 1/4; Soybeans down 2 1/2; Soymeal down $1.50; Soyoil up 0.08.

For the week so far wheat prices are down 2 in SRW, up 1/4 in HRW, down 3 3/4 in HRS; Corn is up 11 1/2; Soybeans up 15 1/4; Soymeal up $0.60; Soyoil up 1.95.

For the month to date wheat prices are down 13 1/4 in SRW, down 2 3/4 in HRW, down 9 in HRS; Corn is down 8 1/2; Soybeans down 77 1/4; Soymeal down $25.40; Soyoil up 0.46.

Year-To-Date nearby futures are down 9.1% in SRW, down 9.5% in HRW, down 15.3% in HRS; Corn is down 11.7%; Soybeans down 23.6%; Soymeal down 18.1%; Soyoil down 8.5%.

Chinese Ag futures (JAN 25) Soybeans up 20 yuan; Soymeal up 17; Soyoil up 142; Palm oil up 218; Corn up 31 — Malaysian Palm is up 100.

Malaysian palm oil prices overnight were up 100 ringgit (+2.28%) at 4486.

There were no changes in registrations. Registration total: 220 SRW Wheat contracts; 0 Oats; 126 Corn; 232 Soybeans; 369 Soyoil; 146 Soymeal; 5 HRW Wheat.

Preliminary changes in futures Open Interest as of October 22 were: SRW Wheat up 4,414 contracts, HRW Wheat up 6,085, Corn up 24,814, Soybeans down 2,631, Soymeal down 318, Soyoil up 6,576.

 

Brazil: Wet season showers continue in central Brazil, being favorable for further soybean planting and establishment. Producers have not been able to cover the gap from late planting of soybeans yet and they only have about 10 days left before the window closes. Rainfall has been good farther south as well, with much better progress on planting occurring there. 

Argentina: An overall wetter pattern lately has reduced drought and brought moisture for filling wheat and corn establishment. There is still drought out there though. Another system is bringing widespread rainfall through Wednesday that should also be beneficial. The pattern will get drier afterward, for about a week or maybe later. Based on the recent rainfall, a shorter dry stretch will not be all that harmful, but if it lasts longer than forecast, issues may start to arise again. Soybean planting will start in November and the dry stretch will not be favorable early on. More rainfall will be needed to continue reducing drought. 

Northern Plains: There is some potential for showers to develop with pulses of energy moving through next week, though models disagree on that potential. Some windy conditions at times could increase the fire risk again this week as well. 

Central/Southern Plains: An upper-level low brought showers through the region over the last couple of days, being heavy in some spots, but not consistent enough to significantly build soil moisture, reduce drought, or disrupt the remaining harvest for very many areas. A system will move into the region next week with a much better chance for pulses of showers to move through the region that could be more substantial. 

Midwest: A front across the north could bring a few showers in Tuesday and Wednesday, and another small system will move through on Thursday and Friday with a few showers as well. Though some showers will fall, it should not be heavy enough to build soil moisture, reduce drought, or disrupt harvest for too many areas. 

Delta: Water levels on the Mississippi River continue to be low, causing restrictions on transportation. With very little precipitation forecast in the basin for the next week and questionable precipitation potential next week, restrictions could last a long time. 

Europe: Showers continued in the northwest and Italy over the weekend, unfavorably wet in some areas. Rain continues in Italy the next few days and another system will move into western areas with more unneeded showers late this week. Eastern areas have been able to recover from a wet period a couple of weeks ago and some areas would like to see rain there for winter wheat establishment. 

Black Sea: A system brought some showers to eastern Ukraine and western Russia over the last week. However, rainfall deficits are large and the window for winter wheat has essentially closed with frosts and freezes becoming more likely from now on. Overall drier conditions are in the forecast for the next two weeks with larger drops in temperatures. The region will hope for good precipitation over the winter to make up for the lost time this fall.

Australia: A front will move through eastern areas Wednesday and Thursday, but with very little precipitation forecast. The same goes with another system this weekend. Some areas are doing well while others are too dry, creating mixed conditions for filling wheat and canola.

 

The player sheet for Oct. 22 had funds: net buyers of 3,000 contracts of SRW wheat, buyers of 13,000 corn, buyers of 7,500 soybeans, sellers of 500 soymeal, and buyers of 6,000 soyoil.

TENDERS

• CORN SALE: Exporters sold 359,500 metric tons of U.S. corn to Mexico for delivery in the 2024-25 marketing year, the U.S. Department of Agriculture said. It was the latest in a string of U.S. export sales announced in USDA’s daily reporting system.
• US SOY EXPORTS: U.S. soybean export premiums are at their highest in 14 months, as grain merchants race to ship out a record-large U.S. harvest ahead of the U.S. presidential election and fears of renewed trade tensions with top importer China, traders and analysts said.
• WHEAT PURCHASE: Tunisia’s state grains agency is believed to have purchased about 125,000 metric tons of soft wheat in an international tender
• NO PURCHASE IN WHEAT TENDER: Jordan’s state grain buyer is believed to have made no purchase in an international tender to buy 120,000 metric tons of milling wheat
• WHEAT TENDER UPDATE: The lowest offer in an international tender from Bangladesh’s state grains buyer to purchase and import 50,000 metric tons of wheat was assessed at $301.38 a metric ton liner out.
• RICE TENDER UPDATE: Indonesian state purchasing agency Bulog has told traders that Indian supplies can be offered in its new international tender to buy 340,000 metric tons of rice and the offer deadline is postponed. 

PENDING TENDERS

• WHEAT TENDER: Jordan’s state grain buyer has issued an international tender to buy up to 120,000 metric tons of milling wheat which can be sourced from optional origins
• CORN, BARLEY TENDER: Algerian state agency ONAB has issued international tenders to purchase up to 240,000 metric tons of animal feed corn and 35,000 metric tons of feed barley
• CORN, BARLEY TENDERS: Iranian state-owned animal feed importer SLAL issued international tenders to purchase up to 120,000 metric tons of animal feed corn and 120,000 tons of feed barley
• BARLEY TENDER: Jordan’s state grains buyer has issued an international tender to purchase up to 120,000 metric tons of animal feed barley.
• RICE TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 metric tons of rice.

 

 

 

TODAY

ETHANOL: US Weekly Production Survey Before EIA Report

Output and stockpile projections for the week ending Oct. 18 are based on eight analyst estimates compiled by Bloomberg.

• Production seen higher than last week at 1.055m b/d
• Stockpile avg est. 22.397m bbl vs 22.275m a week ago

 

LIVESTOCK SURVEY: US Cattle on Feed Placements Seen Down 4.1%

September placements onto feedlots seen falling y/y to 2.11m head, according to a Bloomberg survey of 11 analysts.

• Estimates range from -5.8% to -1% y/y change
• Feedlot herd as of Oct. 1 seen falling by 0.3% y/y to 11.57m head
• Marketings seen rising 1.7% y/y

 

Brazil Corn Exports Seen Reaching 6.24 Million Tns In October Versus 6.22 Million Tns Estimated In The Previous Week- Anec

• BRAZIL SOY EXPORTS SEEN REACHING 4.63 MILLION TNS IN OCTOBER VERSUS 4.34 MILLION ESTIMATED IN THE PREVIOUS WEEK- ANEC
• BRAZIL SOYMEAL EXPORTS SEEN REACHING 2.57 MILLION TNS IN OCTOBER VERSUS 2.47 MILLION TNS ESTIMATED IN THE PREVIOUS WEEK- ANEC
• BRAZIL CORN EXPORTS SEEN REACHING 6.24 MILLION TNS IN OCTOBER VERSUS 6.22 MILLION TNS ESTIMATED IN THE PREVIOUS WEEK- ANEC

 

EU Soft-Wheat Exports Fall 31% Y/y in Season to Oct. 20

EU soft wheat exports in the season that started July 1 totaled 7.02m tons as of Oct. 20, compared with 10.2m tons a year earlier, the European Commission said on its website.

• Leading destinations include Nigeria with about 1.14m tons, Egypt with 692k tons and Morocco with 522k tons
• Barley exports were 1.61m tons, down 40% y/y
• Corn imports totaled 6.07m tons, up 7% y/y
• NOTE: Export data for Italy are not complete for the last five weeks, according to the Commission; export data for France aren’t complete since the beginning of the 2024 calendar year; export data for Bulgaria and Ireland aren’t complete since the start of the 2023-24 season

 

Ukraine Winter Crop Sowing Tops 5M Hectares, Ahead of Last Year

Ukrainian farmers have so far planted winter crops across about 5.4m hectares, according to Agriculture Ministry data, up from almost 5m hectares this time last year.

• Total winter planting includes:
  • 3.8m hectares of winter wheat, compared with 3.46m hectares last year
  • 421k hectares of winter barley, up from 322k hectares last year
• Winter rapeseed was sown across 1m hectares, almost the same area as last year

 

Indonesia Sept. Palm Oil Exports Fall 24.8% M/m: Intertek

Indonesia’s palm oil exports fell 24.8% m/m in September, according to Intertek Testing Services.

• Palm oil exports fell to 1.79m tons from 2.382m tons in August
• Crude palm oil shipments fell to 108,392 tons from 289,098 tons in August
• RBD palm olein shipments fell to 671,348 tons from 864,066 tons in August
• RBD palm oil shipments fell to 357,438 tons from 503,604 tons in August
• Palm oil sales to European Union was 364,053 tons
• Palm oil sales to India fell to 358,583 tons from 790,786 tons in August
• Palm oil sales to China fell to 365,370 tons from 431,680 tons in August

 

Kazakhstan slashes grain exports 39.2% YoY in 8M 2024

Kazakhstan slashed grain exports 39.2% year-on-year to 3.13 million tonnes in January-August 2024, Deputy Trade and Integration Minister Kairat Torebayev said on Wednesday at a government meeting.

“Grain exports totaled 3.13 million tonnes in January-August this year, a drop of 39.2% year-on-year,” Torebayev said.

Torebayev has attributed the drop to the previous year’s low production volume, as well as increased competition on traditional export markets.

Key export markets, including Italy, Turkmenistan, Afghanistan, and Russia, have significantly reduced consumption of Kazakhstan’s grain. Torebayev attributed the decline to the dumping of export prices, which has led to a substitution of Kazakhstan’s wheat in major export markets in Central Asia.

As previously reported, Kazakhstan’s farmers threshed 16.6 million tonnes of grain in 2023, including wheat totaling 12.11 million tonnes, and the average grain yield was 9.7 c/ha. Farmers harvested 21.6 million tonnes of grain in 2022.

 

GrainCorp Workers in New South Wales to Undertake Work Stoppages

More than 200 grain handlers at sites owned by GrainCorp Ltd across the Australian state of New South Wales will protest low pay by instating work stoppages, potentially disrupting the flow of grain as harvest season gets underway.

• The workers plan to undertake random one hour-stoppages at grain handling sites throughout the state for a month beginning October 29, the Australian Workers’ Union, which represents the workers, said in a note
• “If GrainCorp management don’t come to the table with a decent offer AWU members at GrainCorp will be left with no alternative other than to stop work,” said AWU’s New South Wales Secretary Tony Callinan
• NOTE: GrainCorp operates the largest grain storage and handling network on Australia’s east coast
• NOTE: Grain handlers move and store wheat, canola, barley, oats and other grains

 

Brazil aims to lure foreign investment with green development platform, sources say

• Platform aims to initially attract $8 bln through six pilot projects
• Focus on energy, industry and mobility, nature-based solutions
• Platform was developed based on discussions held at the G20

Brazil is working to lure more foreign investment in sustainable development with a new platform, to be launched on Wednesday, highlighting $8 billion in promising private-sector projects and looking to triple that portfolio in a year.

Four officials, who discussed the program anonymously before a launch event on the sidelines of the International Monetary Fund and World Bank meetings in Washington, called it a concrete example of Brazil’s agenda as this year’s G20 chair and host of the 2025 United Nations Climate Change Conference (COP).

With the new platform, Brazil’s government will select projects aligned with its sustainable development priorities and work to leverage foreign capital with the coordination of state development bank BNDES, which may also contribute funding.

Six pilot projects will be included at the launch, ranging from production of sustainable aviation fuel, fertilizers and green hydrogen to reforestation and mining of strategic minerals, according to the sources.

The program builds on efforts by President Luiz Inacio Lula da Silva to position Brazil as a favored destination for green investments. Other initiatives include measures to mitigate currency risks, issue green sovereign bonds and organize a domestic agenda around the “ecological transformation” of Latin America’s largest economy.

Foreign direct investment in Brazil declined in 2023, the first year of Lula’s current term, but rebounded 14% in the first eight months of this year to $51 billion.

The new program courting foreign investment will initially focus on accelerating initiatives in energy, industry and mobility, along with “nature-based solutions” for climate change such as reforestation, sources said.

“Once a project enters the platform, it receives a certification, a seal of quality and prioritization, which we believe will help mobilize international private capital — our main target — as well as multilateral banks, climate funds,” one source said.

“This is what we aim to work on between our G20 presidency and COP30 in Belem.”

A second source said that by the time Brazil hosts the UN climate summit next November, projects on the new platform are expected to represent a potential investment of $20 billion via debt and equity.

The BNDES will lead a new secretariat, backed by the UN’s Green Climate Fund, that selects projects and helps to match them with financing, sources said.

In designing the new platform, sources said Brazil drew on talks it has hosted with the Group of 20 major global economies regarding reform of multilateral banks and how countries can showcase their priority projects for foreign investment.

 

Court Ruling Sets Back Bunge’s Rescue of Argentina Soy Exporter

A ruling by a high court has set back a distressed takeover by Bunge Global SA of Vicentin SAIC, once the crown jewel of Argentina’s massive soybean-processing industry.

Five of the six judges in the supreme court of Santa Fe province — where family-run Vicentin filed for bankruptcy protection nearly five years ago after a $1.5 billion default — ruled on Tuesday to take on a complaint by a hostile creditor.

The justices will now need more time to analyze the hypothesis of the complaint: that a decision by a lower court to greenlight a Vicentin-brokered deal with a majority of its creditors for a severe restructuring was unconstitutional. That deal included a takeover led by Bunge Global SA and Viterra Inc.

Should the court end up agreeing with the hostile creditors, led by a unit of the Grassi brokerage firm, the bankruptcy protection would likely get pushed wide open into a so-called cramdown process where competing proposals could be lodged.

The development is a blow for Bunge, which is completing a global acquisition of Glencore-backed Viterra. Had the judges thrown out the complaint, the rescue plan it negotiated with Vicentin would have been all but sealed, bringing the byzantine case to a close.

At stake is the ownership of Renova SA, a venture between Viterra and Vicentin that runs the world’s biggest soy-crushing plant.

A spokesman for Vicentin said the court’s decision to take on the complaint would cause unnecessary delays to resolving the company’s future and that a cramdown isn’t a certainty.

The hostile creditor group, which has said it’s planning a bid for the company if the case does go to cramdown, said in a statement that the ruling “is a crucial step to avoid the validation of an illegal arrangement.”

 

Bankruptcy Filings by Brazil Farmers Tripled in Second Quarter

Brazilian farmers filed for bankruptcy protection in the second quarter at more than triple the number in the same period a year earlier, with soybeans accounting for the biggest share.

The total jumped to 121 from 34, according to credit data provider Serasa Experian. Soybean farmers were responsible for 53 filings.

“Rising interest rates, low commodity prices and higher production costs had a negative impact on those who were already financially compromised,” Marcelo Pimenta, the head of agribusiness at Serasa Experian, said in a statement. “Some commodity producers in some specific municipalities have found it difficult to balance the accounts, but this is not widespread in the sector.”

The states of Minas Gerais and Mato Grosso were hardest hit, with 31 and 28 fillings, respectively.

In the first quarter of 2024, 86 individual farmers filed for bankruptcy protection, bringing the first-half total to 207, or more than three times the total for the first six months of last year.

The number of agribusiness companies filing for bankruptcy protection also increased in the second quarter, to 94, or 71% more than the second quarter of last year, Serasa Experian said.

 

 

 

 

 

 

 

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