Global Ag News for Sept 26.24

TOP HEADLINES

Bunge’s Rescue of Huge Soy Supplier Rests With Argentine Court

• Provincial judges are expected to rule on Vicentin bankruptcy
• Decision on case has significance for global soy trading

A top court in Argentina is set to decide whether crop giants Bunge Global SA and Viterra Inc. will be allowed to take over a company that was once the crown jewel of the country’s massive soybean-processing industry.

The ruling on Vicentin SAIC is expected as soon as this month and has broad significance for global soy trading, since Argentina is the largest supplier of processed meal and oil. A go-ahead for a plan to rescue Vicentin, which filed for bankruptcy protection nearly five years ago, would further solidify Bunge-Viterra’s share of world soy-crush capacity. Meanwhile, a rejection would throw open an opportunity for competing proposals.

Vicentin was a rare success story in crisis-strewn Argentina, built up over decades by the Vicentin family dynasty that took on the might of commodity trading houses like Cargill Inc. and Louis Dreyfus Co. That all unraveled in 2019 as the company defaulted on some $1.5 billion of debt and entered bankruptcy proceedings — upending the crop-dealing industry in South America’s oldest grains exporter.

Vicentin family directors sought to keep the company alive, winning creditor approval for a rescue featuring a takeover of its assets led by Bunge and Glencore-backed Viterra, which are completing a merger. After years of legal wrangling between Vicentin and hostile creditors, the fate of the company now lies with the supreme court of Santa Fe, the province which contains Rosario — a riverside hub for shipping much of the world’s soy — and Avellaneda, the small town where Vicentin was founded nearly a century ago.

 

FUTURES & WEATHER

Wheat prices overnight are up 2 1/4 in SRW, up 2 3/4 in HRW, up 3 1/4 in HRS; Corn is down 1/2; Soybeans up 3 1/2; Soymeal up $1.10; Soyoil up 0.35.

For the week so far wheat prices are up 20 1/2 in SRW, up 17 in HRW, up 10 in HRS; Corn is up 12 1/4; Soybeans up 42 1/4; Soymeal up $9.80; Soyoil up 2.71.

For the month to date wheat prices are up 40 in SRW, up 18 1/2 in HRW, up 19 3/4 in HRS; Corn is up 13 3/4; Soybeans up 56 3/4; Soymeal up $16.30; Soyoil up 2.49.

Year-To-Date nearby futures are down 6.2% in SRW, down 9.5% in HRW, down 14.6% in HRS; Corn is down 12.1%; Soybeans down 18.5%; Soymeal down 15.3%; Soyoil down 7.8%.

Chinese Ag futures (NOV 24) Soybeans up 1 yuan; Soymeal up 5; Soyoil up 72; Palm oil up 128; Corn down 13 — Malaysian Palm is up 109.

Malaysian palm oil prices overnight were up 109 ringgit (+2.70%) at 4152.

There were no changes in registrations. Registration total: 220 SRW Wheat contracts; 0 Oats; 126 Corn; 232 Soybeans; 352 Soyoil; 126 Soymeal; 5 HRW Wheat.

Preliminary changes in futures Open Interest as of September 25 were: SRW Wheat up 2,959 contracts, HRW Wheat up 572, Corn down 6,428, Soybeans down 580, Soymeal down 3,954, Soyoil down 8,012.

 

Northern Plains: The region should be dry through the weekend, favorable for maturing crops. Some areas that are further behind would like to see some rain, however. A front will move Sunday and Monday, but may not bring much in the way of showers. Temperatures are forecast to be quite warm through next week, with a brief hiccup of milder air moving through behind that system.

Central/Southern Plains: An upper-level low has moved into the region and will get stuck in the east. Models have it far enough east now where precipitation largely doesn’t occur, even with the low pulling the remnants of Hurricane Helene westward toward the region later this week and weekend. Some may still occur, however. Otherwise, the lack of rainfall is a bit of a concern for winter wheat establishment. Though temperatures will be mild in most areas due to the upper low, they should be rising as the low moves east this weekend.

Midwest: A front brought widespread showers and some areas of heavy rain the last several days. An upper-level low stalling to the southwest will bring the remnant low to eventual Hurricane Helene up into the southern end of the region Friday, with areas of heavy rain near the Ohio River that will turn into lighter showers going through the weekend. A front should push the lows out early next week and could have some showers of its own. Harvest could be impacted by rain, though winter wheat areas would like to see the increased moisture. And the water moving into the Ohio Valley should help to reduce the drought there.

Delta: An upper-level low is stalling out in the region and will pull up eventual Hurricane Helene into the U.S. on Thursday and Friday. The remnant low of the hurricane is forecast to wrap back to the west on Friday, bringing potential heavy rain to northern areas before turning into lighter showers for the weekend. The pair of lows will be pushed eastward early next week. Any more bouts of heavy rain could further degrade quality of soybeans and cotton in the region awaiting harvest, but would aid water levels on the Mississippi River, especially with the rain moving into the Ohio Valley.

Southeast: A front is moving into the region Wednesday with scattered showers and eventual Hurricane Helene is forecast to move, making landfall in the Big Bend area of Florida late on Thursday. Though it should quickly dissipate from hurricane status as it moves northward, the remnant low and another upper-level low will spin around just off to the west for several days afterward, which could keep showers in the region into next week before getting pushed eastward. Heavy rain would likely degrade the remaining crop in the field and North Carolina is especially vulnerable as it has been pummeled with heavy rainfall lately and would not benefit from any more.

Canadian Prairies: A couple of disturbances and low-pressure systems will move through this week and next, but potential for significant rainfall is low. Heavy rain from last week probably caused delays to the remaining harvest, however.

Brazil: A front has stalled over the far south where areas of heavy rain have occurred this week. Showers will finally move northward later in the week but dissipate as they do so. The recent rainfall has been good for increasing soil moisture for spring planting, but some areas are still very dry. Spotty wet season showers will start in central Brazil, and Mato Grosso specifically, by the weekend. However, with how hot and dry it has been over the last several months, producers will likely wait longer to start planting when the showers become more consistent later in October. If they have to wait too long, it could cause significant issues for the coming safrinha corn and cotton crops.

Argentina: Drought across the west and north has delayed corn planting and been damaging to developing to reproductive winter wheat. A front stalled in northern areas this week, but showers have been very limited to small sections in the northeast. The front moves northward on Thursday, but most areas will stay dry. The next significant system would not come until early next week, but rainfall is currently forecast to remain spotty as it moves through.

Europe: A system is moving east with very few showers now after dumping a lot of rain in the west. It is quickly followed by a stronger system now moving into the west. That will bring more widespread rainfall and strong winds for the next couple of days, as well as a burst of cooler air. Another system will be possible early next week, spreading more rain through the ontinent. The heaviest rains are forecast for France, Germany, and the UK. Rainfall would help to maintain or improve soil moisture, but could delay winter wheat planting where heavy.

Black Sea: Western areas have adequate soil moisture, but the majority of eastern Ukraine and western Russia have endured heat and drought for several months, creating very poor conditions for winter wheat planting and establishment. A front will move into western areas Wednesday with another over the weekend, but they may not produce much precipitation and fizzle out before reaching eastern areas. Above-normal temperatures and dry conditions continue to be unfavorable for wheat, which has a limited time before frosts and freezes start to become more likely in October.

Australia: It had been overall dry lately, unfavorable for vegetative to reproductive wheat and canola. But a system is spreading rainfall over eastern areas the next two days, which is needed. The system will bring through some cold air though and could cause frosts across the southeast, where crops are less developed but still vulnerable. Another system will pass through western areas with showers Thursday and Friday. The front to that system may or may not bring much precipitation to eastern areas this weekend.

 

The player sheet for Sept. 25 had funds: net buyers of 3,500 contracts of SRW wheat, buyers of 6,000 corn, buyers of 7,500 soybeans, buyers of 1,500 soymeal, and buyers of 6,500 soyoil.

TENDERS

• CORN SALE: The U.S. Department of Agriculture confirmed private sales of 180,000 tons of U.S. corn to Mexico in the 2024/25 marketing year.
• CORN SALE: Taiwan’s MFIG purchasing group bought about 65,000 metric tons of animal feed corn expected to be sourced from Brazil in an international tender on Sept. 25
• RICE SALE: Indonesian state purchasing agency Bulog is believed to have purchased an estimated 450,000 metric tons of rice in an international tender seeking the same volume which closed his week
• WHEAT SALE: Importer group TFMA in Thailand is believed to have purchased around 60,000 to 65,000 metric tons of animal feed wheat in a tender on Wednesday for up to 195,000 tons
• WHEAT PURCHASE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 112,580 metric tons of food-quality wheat from the United States, Canada and Australia in a regular tender on Thursday.
• CORN TENDER: Algerian state agency ONAB has issued an international tender to purchase around 240,000 metric tons of animal feed corn sourced from Argentina or Brazil only
• 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.
• FAILED BARLEY TENDER: Jordan’s state grain buyer is believed to have made no purchase in an international tender for 120,000 metric tons of animal feed barley which closed on Sept. 25.

 PENDING TENDERS

• CORN TENDER: South Korea’s Major Feedmill Group (MFG) has issued an international tender to purchase up to 70,000 metric tons of animal feed corn to be sourced from either South America or South Africa only

 

TODAY

GRAIN EXPORT SURVEY: Corn, Soy, Wheat Sales Before USDA Report

Estimate ranges are based on a Bloomberg survey of five analysts; the USDA is scheduled to release its export sales report on Thursday for week ending Sept. 19.

• Corn est. range 600k – 1,300k tons, with avg of 938k
• Soybean est. range 900k – 2,000k tons, with avg of 1,438k

 

DOE: US Ethanol Stocks Fall 1.1% to 23.524M Bbl

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

• Analysts were expecting 23.896 mln bbl
• Plant production at 0.994m b/d, compared to survey avg of 1.046m

 

Argentina 2025 Soy Harvest Seen at 52M Metric Tons, up 3% Y/Y

Argentina’s upcoming soy harvest production in 2025 is estimated to reach 52 million metric tons, up 3% annually, according to a presentation Wednesday by the Buenos Aires Grain Exchange.

• Corn harvest in 2025 seen at 47 million metric tons, down 5.1% y/y
• Upcoming wheat harvest projected at 18.6 million metric tons, up 23% y/y

 

Argentine farmers seen favoring soy over corn in 2024/25 season, exchange says

Argentine farmers are seen favoring soy over corn in the 2024/25 season on soybeans’ profitability and as fears of a stunt disease hitting corn persist, the Buenos Aires Grains Exchange said on Wednesday.

Soy output this season is seen inching up around 3% from the previous season to 52 million metric tons, according to estimates from the exchange, while corn production should slip around 5% to 47 million tons.

Argentina is the world’s leading exporter of soybean oil and flour, and the third-largest corn exporter.

“We should not be surprised (by the trend),” said Ramiro Costa, who heads economic studies for the exchange, in a presentation in Buenos Aires.

Soy and corn have the same planting period in Argentina, and therefore compete for the same growing area.

The exchange expects farmers to turn to soy “in the context of the leafhopper and an input-output relationship that is unfavorable for corn,” Costa said.

Last season, corn suffered serious losses due to a bacteria carried by the leafhopper pest, which stunts the crop. Leafhoppers have no impact on soybeans.

Meanwhile, the exchange bumped up its projection for this season’s wheat crop nearly 3% from a May estimate to 18.6 million tons. Argentina is a major exporter of wheat and its harvest kicks off in November.

 

Brazil drought dries river and stops shipping on key grains corridor

A widespread drought in Brazil has halted the transport of grains through the Madeira river, an important northern waterway linking key croplands with the country’s ports, regional port terminals association Amport said on Wednesday.

The Madeira river is a key corridor for shipping products from Rondonia state and parts of Mato Grosso state, Brazil’s top soy producer, to export terminals located in the country’s northern states.

“Grain transportation in the Madeira is currently halted as river’s depth in critical points is around two meters (6.6 ft), making navigation commercially unfeasible,” Amport President Flavio Acatauassu told Reuters.

Some 34% of Brazilian soy exports in 2023, and almost 43% of corn exports were shipped through the so-called North Arc region, which includes ports located in northern Brazil, according to data from the national crop agency Conab.

Brazil is the world’s largest exporter of soy, and one of the largest corn exporters.

However, the shipping halt may not affect Brazilian exports as local farmers have already shipped most of the grains expected for 2024.

Local grains traders lobby Anec said on Wednesday that the lower capacity for transporting grains through northern ports has raised costs for the exporters, but added the companies had been already prepared.

“There should be no reduction in grain exports due to the drought in the northern region, as traders work with a very high level of precaution,” Anec’s General Director Sergio Mendes said.

 

Russia Winter Planting at 11-Year Low on Bad Weather: SovEcon

Consultant SovEcon said only 8.3 million hectares of winter grains have been sown in Russia as of late September, compared to 9.3 million hectares a year ago. This marks the lowest level since 2013, it said in an email.

• “The pace of grain planting lags behind average figures due to unfavorable weather in the main winter grain growing regions,” according to SovEcon experts.
• Over the last 30 days, less than 20% of the normal precipitation levels have fallen in the European part of Russia.
• The slow pace of in the Volga and Central regions “combined with unfavorable conditions for winter crop development, sets the stage for a potentially smaller crop next year”

 

Ukraine’s Winter Grain Sowing Slows From Last Year on Drought

Ukrainian farmers have so far planted winter grains across 944,500 hectares, down from 1.1m hectares by late September last year, according to the Agriculture Ministry’s data.

The total includes:

• Winter wheat sown across 878,800 hectares vs 1m hectares last year
• Winter barley sown on 45,000 hectares vs 74,000 hectares
• Winter rapeseed sowing slowed to 862,200 hectares from over 1m hectares last year
• Winter crops sowing is ongoing in all Ukrainian regions

 

India 2023-24 Food Grain Production Climbs to Record 332.3M Tons

India’s food grain production increased to a record 332.3 million tons from 329.7 million tons a year earlier, according to farm ministry statement.

• Rice output rose to all-time high of 137.83m tons
• Wheat production rose to record at 113.29m tons
• Pulses output at 24.25m tons
• Corn production at 37.67m tons
• Oilseeds output at 39.67m tons
• Sugar cane production at 453.16m tons
• Cotton output at 32.52m bales of 170 kg each

 

Russia expands Baltic ports as it eyes new grain markets

• New Baltic Sea ports seen reducing reliance on Black Sea routes
• Conflict with Ukraine raises risk of disruption of Black Sea shipments
• Russia looking to expand to new markets in Latin America, Africa
• Russia plans to boost agricultural exports by 50% by 2030

Russia, the world’s leading wheat exporter, is expanding its Baltic Sea ports as it aims to boost agricultural exports by 50% by 2030 while reducing dependence on traditional Black Sea routes, officials and executives said.

The country, which exported at least 72 million metric tons of grain in the 2023/24 season, is looking at new markets in Latin America and Africa to diversify from its traditional grain markets in North Africa and the Middle East.

It has relied on its Black Sea ports to handle booming agricultural exports for the past decades but the conflict with Ukraine has made the area risky for shipping with both sides regularly striking each other’s facilities and infrastructure.

“Last year with its record harvest showed that with the pace of loadings for exports, we do not have enough capacity,” Ksenia Bolomatova, deputy head of state-controlled agricultural conglomerate OZK, which owns several Black Sea terminals, told an industry gathering in Sochi in southern Russia.

In the last 18 months, Russia has launched two major ports, Vysotsky and Lugaport, in the Gulf of Finland, not far from St. Petersburg, President Vladimir Putin’s hometown.

Vysotsky shipped its first grain in April 2023, while Lugaport began operations in June this year and capacity is expected to reach 7 million tons by early 2025, according to its owner Novaport.

Dmitry Rylko from the IKAR agricultural consultancy said the two ports will be able to handle up to 15 million tons of agricultural exports, including grain, per year.

That would account for a quarter of Russia’s 60 million tons of grain exports forecast for the 2024/25 season.

Private firm Primorsky UPK is also planning a grain terminal at Primorsky port with capacity of up to 5 million tons.

 

Australia Wheat Crop Dealt Another Blow as Cold Snap Hits South

• Temperatures fell to -2C across almost 1.2m hectares of wheat
• Fall in supplies could add to concerns about global stockpiles

Severe frosts have threatened fields in Australia’s south and southeast that were expected to account for more than 10% of the major shipper’s wheat production, compounding concerns over dryness in western regions.

Temperatures this month reached negative 2C (28F) across almost 1.2 million hectares of wheat fields that were mostly located in New South Wales state, according to crop forecaster Digital Agricultural Services. Frost is particularly damaging for mature wheat crops that are in their final growth stage before harvest, which in Australia usually begins in November.

Satellite image of southeast Australia showing extent of -2C frost on Sept. 13 in green, overlain with crop areas.

The area was initially expected to produce 3.2 million tons of wheat, but that could be slashed by between 10% and 60%, according to the Melbourne-based company’s chief data scientist, Sam Atkinson. Quality was also likely to decrease, he said, cautioning that there was no way to be sure until harvest began. The towns of Temora, Wagga Wagga and Young were worst affected, he added.

Although Australia recently forecast this season’s wheat crop at 31.8 million tons, dry conditions in the country’s west — combined with the recent frosts — could cut output to less than 29 million tons, according to Atkinson. A reduction in wheat supplies from the nation could add to concerns about global stockpiles, which are expected to fall to the tightest in nine years.

 

Farm and Fuel Groups Urge Biden to Act on Possible Port Strikes

The US National Grain and Feed Association and 55 other trade groups pressed President Joe Biden to avert potential port disruptions along the East and Gulf Coasts, warning that labor strikes during harvest season would hurt the agriculture supply chain and broader economy.

• “The time has come for the US government to intervene and ensure port operations do not stop,” the organizations wrote in a Sept. 25 letter to Biden
• About 40% of US containerized agricultural exports move through East and Gulf Coast ports: letter
• White House spokesperson Robyn Patterson declined to comment on the letter, but said in an email that the Biden-Harris administration is “monitoring and assessing potential ways to address impacts to U.S. supply chains related to operations at our ports, if necessary”
• “We continue to encourage the parties to continue negotiating towards an agreement that benefits all sides and prevents any disruption”
• NOTE: Separately, growing concern about the ports comes as BNSF Railway and Union Pacific have stopped issuing permits for grain shuttle trains to Mexico due to congestion and train backlog

 

USDA Lowers 2025 US Food Inflation Estimate to 1.6% Y/y

USDA lowered its estimate for retail food inflation to 1.6% y/y from 2%, according to the September Food Price Outlook report on the agency’s website.

• The category with the biggest drop was fats/oils, which was lowered to 1.3% from 2.8%
• The biggest increase was the eggs category
• 2024 estimate lowered to 2.2% y/y from 2.3%

 

US Poultry Slaughter Fell 4.1% Y/y in August: USDA

Slaughter fell to 5.96 billion pounds, according to the USDA’s monthly poultry slaughter report released on the agency’s website.

• Chicken live weight fell 3.3% in August from year ago
• Chickens condemned post-mortem down 1.4% y/y
  • Condemned ante-mortem down 14.9% y/y

 

Surprise Urea Tender Jolts Fertilizers as Supply Crunch Hangs On

Declining grain prices are making fertilizers less affordable as summer fill programs end and costs reset for autumn. India announced another urea tender late last week, following closely on its last tender amid growing supply concerns, with higher prices expected. Mississippi River levels near record lows threaten to snarl the US harvest as fall begins.

 

 

 

 

 

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