Global Ag News for Sept 6.24

TOP HEADLINES

US Sees Farm Income Falling Less Than Expected to $140 Billion

• New USDA forecast is big improvement from February estimate
• Farm earnings had been seen posting biggest slump since 2006

US farmers are poised to see a smaller-than-expected drop in income this year, down only 4.4% from 2023 even as prices of corn and soybeans — America’s two biggest crops — have plummeted.

Growers are expected to see overall earnings of $140 billion, not including adjustments for inflation, according to the latest forecast from the US Department of Agriculture. The outlook is much rosier than the net farm income drop of 26% to $116.1 billion estimated by the agency in February.

The decline comes on the heels the highest US farm income ever in recent years. If the new estimate is realized, it will be 15% above the 20-year average of $121.5 billion, though 28% below the 2022 record in inflation-adjusted dollars, the USDA said on Thursday.

 

FUTURES & WEATHER

Wheat prices overnight are down 3/4 in SRW, down 1 1/4 in HRW, down 3/4 in HRS; Corn is up 1/2; Soybeans down 2; Soymeal down $0.10; Soyoil down 0.06.

For the week so far wheat prices are up 22 1/2 in SRW, up 22 1/4 in HRW, up 24 1/2 in HRS; Corn is up 10 1/4; Soybeans up 21 1/2; Soymeal up $13.40; Soyoil down 0.90.

For the month to date wheat prices are up 22 1/2 in SRW, up 20 3/4 in HRW, up 24 1/2 in HRS; Corn is up 10 1/4; Soybeans up 21 1/2; Soymeal up $13.40; Soyoil down 0.90.

Year-To-Date nearby futures are down 10.7% in SRW, down 9.5% in HRW, down 18.2% in HRS; Corn is down 17.2%; Soybeans down 22.1%; Soymeal down 17.0%; Soyoil down 11.5%.

Chinese Ag futures (NOV 24) Soybeans up 11 yuan; Soymeal up 25; Soyoil up 12; Palm oil up 82; Corn down 12 — Malaysian Palm is down 16.

Malaysian palm oil prices overnight were down 16 ringgit (-0.41%) at 3901.

There were changes in registrations (-4 Oats, 100 Soyoil). Registration total: 220 SRW Wheat contracts; 2 Oats; 235 Corn; 230 Soybeans; 453 Soyoil; 100 Soymeal; 0 HRW Wheat.

Preliminary changes in futures Open Interest as of September 5 were: SRW Wheat down 5,386 contracts, HRW Wheat down 5,094, Corn down 8,078, Soybeans down 58, Soymeal down 5,969, Soyoil up 1,830.

Northern Plains: Mostly dry Friday-Monday. Temperatures above normal west and below normal east Friday-Saturday, near to well above normal Sunday, above to well above normal Monday. Outlook: Mostly dry Tuesday-Wednesday. Isolated showers Thursday-Saturday. Temperatures above to well above normal Tuesday-Saturday.

Central/Southern Plains: Isolated showers Thursday-Friday. Mostly dry Saturday-Monday. Temperatures near to below normal through Sunday, above normal north and below normal south Monday. Outlook: Mostly dry Tuesday-Wednesday. Isolated showers Thursday-Saturday. Temperatures near to above normal north and below normal south Tuesday, near to above normal Wednesday-Thursday, above to well above normal Friday-Saturday.

Midwest: West: Isolated showers Friday. Mostly dry Saturday-Monday. Temperatures below normal Friday-Sunday, near to below normal Monday. East: Isolated showers Friday. Mostly dry Saturday-Monday. Temperatures near normal Friday, below normal Saturday-Sunday, near to below normal Monday. Outlook: Mostly dry Tuesday-Saturday. Temperatures near to above normal Tuesday, above normal Wednesday-Saturday.

The player sheet for Sept. 5 had funds: net sellers of 2,500 contracts of SRW wheat, sellers of 2,500 corn, sellers of 500 soybeans, and buyers of 3,000 soyoil.

TENDERS

• SOYBEAN SALES: The U.S. Department of Agriculture confirmed private sales of 126,000 metric tons of U.S. soybeans to China and another 189,700 tons to undisclosed destinations, all for delivery in the 2024/25 marketing year that began Sept. 1.
• RICE TENDER UPDATE: Indonesian state purchasing agency Bulog started buying rice in an international tender which closed this week with an estimated 165,900 metric tons bought so far expected to be sourced from Vietnam, Myanmar and Pakistan
• WHEAT PURCHASE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 87,660 metric tons of food-quality wheat from the United States and Canada in a regular tender that closed on Thursday.
• FEED WHEAT PURCHASE: An importer group in Thailand is believed to have purchased an estimated 146,000 metric tons of animal feed wheat to be sourced from optional origins in a tender which closed on Wednesday.
• CORN PURCHASE: South Korea’s Feed Leaders Committee (FLC) purchased between 66,000 to 68,000 metric tons of animal feed corn expected to be sourced from the U.S. in a private late deal on Thursday

 

PENDING TENDERS

• CORN TENDER: Algerian state agency ONAB issued an international tender to purchase up to 120,000 metric tons of animal feed corn sourced from Argentina or Brazil only.
• VEGETABLE OILS TENDER: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), said it was seeking 30,000 metric tons of imported soybean oil and 10,000 tons of imported sunflower oil in an international purchasing tender for arrival Nov. 20-Dec. 5 and/or Dec. 10-25. GASC said traders should submit bids for at least 5,000 tons for payment at sight on C&F basis with funding from the International Islamic Trade Finance Corporation. The deadline for offers is Sept. 10.
• FEED WHEAT AND BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said it will seek 65,000 metric tons of feed wheat and 25,000 tons of feed barley to be loaded by Dec. 31 and arrive in Japan by Feb. 27 via a simultaneous buy and sell (SBS) auction to be held on Sept. 11.
• WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy up to 120,000 metric tons of milling wheat, which can be sourced from optional origins.

 

 

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 Friday for week ending Aug. 29.

• Corn est. range 600k – 1,400k tons, with avg of 1,156k
• Soybean est. range 700k – 1,800k tons, with avg of 1,388k

 

DOE: US Ethanol Stocks Fall 0.9% to 23.354M Bbl

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

• Analysts were expecting 23.678 mln bbl
• Plant production at 1.061m b/d, compared to survey avg of 1.072m

 

Argentine Corn Production Estimate Sept. 5: Exchange

The Buenos Aires Grain Exchange releases weekly report on website.

• 2023-24 corn production estimate maintained at 46.5m tons
• Corn harvesting 100% complete

 

Brazil August Agriculture, Mining Exports by Volume: MDIC

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

• Corn exports fell 35% in August from a year ago
• Beef exports rose 17% y/y
• Coffee exports rose 5% y/y
• Iron ore exports down 8% y/y

 

Argentina Soy-Crush Workers Reach Pay Deal, Ending Strike Threat

Argentina’s two main soy-crush worker unions reached a wage agreement with agricultural traders, according to a joint statement.

• NOTE: A government-mandated mediation period between companies and unions was scheduled to end Sept. 9
  • From Aug. 9: Argentina Soy-Crush Workers Extend Strike to Fourth Day
• Union leaders negotiated a 26% raise after already negotiating 76% earlier in the year: statement
  • New basic monthly wage is 1.56m pesos

 

Core Argentine farmland will likely see dry weather following recent storms

Argentina’s main breadbasket will likely face dry weather over the next week after rain storms last weekend brought relief to some farmland, the Buenos Aires Grains Exchange said on Thursday.

Due to months of insufficient rainfall over western and northern areas of the country’s main agricultural area, the exchange said in a report it expects impacts to the wheat crop as well as difficulties with early corn planting.

Argentina is a global grains supplier, exporting large quantities of processed soybeans, corn and wheat, with sales providing much-needed foreign currency to pay down debts and finance imports.

According to the exchange’s weekly weather report, a large part of the southern cone is expected to see scarce precipitation of less than 10 millimeters (0.39 inch), with some areas likely to receive more moderate rainfall.

Rains last weekend provided between 40 to 50 millimeters of precipitation in eastern and southern parts of the core farmland, providing a needed boost to corn planting, which begins this month.

Farmers are expected to plant 6.3 million hectares with corn this 2024/25 season, which would be a 17% drop from the previous season, the exchange said in a separate report on Thursday.

Corn producers had been hoping for a rebound after crops during the 2023/24 campaign were hit hard by a historic outbreak of the crop-destroying leafhopper pest, which contributed to some 10 million metric tons in losses.

The 2023/24 harvest wrapped up at a total 46.5 million tons, the exchange said.

 

Global Food Prices Fell Slightly in August as Sugar, Grains Drop

Global food prices fell in August as declining costs of sugar, grains and meat offset increases in the costs of vegetable oils and dairy products, according to an index of food-commodity prices from the United Nations’ Food and Agriculture Organization.

• The latest data marked a second month of declines
• The FAO sugar index declines 4.7% to its lowest level since since October 2022 on improved production outlook in India and Thailand and lower crude oil prices
• Grain prices fell 0.5% from July, while meat prices declined 0.7%
• Vegetable oil and dairy both increased

 

World 2024 Wheat Production Forecast Raised to 791.4m Tons: FAO

World wheat production in 2024 is now seen at 791.4 million tons, up nearly 3m tons on the previous season, the UN’s Food and Agriculture Organization says in a report.

• NOTE: That compares to a July forecast of 789.1m tons
• It comes from better-than-expected results in the US and smaller upward revisions for China and Argentina
• Downward revisions have been made to EU and Russian wheat production
• Ending stock is seen at 314.5m tons
• Rice
  • World rice production in 2024/25 forecast to reach 536.9m tons
  • That would be a record high level of production
  • The increase comes mostly due to an upward revision to historical output figures for Bangladesh
  • Ending stockpiles are seen at 204.8m tons
• Coarse grains
  • Forecast cut by 7m tons from July’s estimate, mainly due to hot and dry weather in the European Union, Mexico and Ukraine, which diminished yield prospects

 

French Wheat Harvest, Yields Seen Plunging as Troubles Deepen

• Lobby group warns of ‘structural’ damage to the industry
• Farmers may lose €3 billion amid rising energy bills, salaries

France’s soft-wheat harvest is seen plunging to the lowest in 40 years, and the nation’s farm lobby is warning of “structural” damage to yields.

Production will be 25.98 million tons, a 26% decline from last year, said Eric Thirouin, president of AGPB. Yields slumped 17% to 6.2 tons per hectare during the same period, continuing the slide that started in 2015.

“This trend suggests for us farmers a much deeper and structural fall that we have been experiencing for years and which does not spell out its name: that of a real destruction of French agriculture,” Thirouin said. “This is my first cry of alarm.”

Farmers are set to lose €3 billion ($3.3 billion) in earnings compared with last year as the plummeting production coincides with rising energy bills and salaries, he said.

Grain exports from the European Union’s top agricultural producer are seen dropping to the lowest since 2001-2002. Ceaseless rains, a lack of sunshine and low temperatures favoring diseases curtailed yields and affected the quality of crops in most growing regions.

Weather extremes hit grains this season across the continent.

Earlier this year, farmers led street demonstrations highlighting rising costs, cheap imports and stringent French and EU regulations such as the bloc’s Green Deal. Exports also are being crimped by competition from Russia and Ukraine, Thirouin said.

“We have more and more regulations, restrictions and bans that have been raining down on all of us farmers continuously for more than 20 years and which, as a result, weaken our means of production,” he said.

The French government made a series of concessions and announced more than €2.2 billion in assistance to get the farmers to end their protests.

Farmers’ groups are holding talks with the government to press for urgent financial support and to help ease restrictions, Thirouin said. Those negotiations have been difficult given the country’s ongoing political crisis.

Asked if farmers may return to street protests, he said: “When you are ready to throw in the towel, you are ready for anything and everything.”

 

French Corn Conditions Hold Steady in Week to Sept. 2: AgriMer

Some 79% of French corn was in good or very good condition as of Sept. 2, steady with the prior week, according to data from FranceAgriMer.

That compares with 80% a year earlier

 

Shriveling Mississippi River Threatens to Upend US Food Exports

• Barge rates are surging amid dry conditions in the central US
• Cargoes of crude oil and petroleum products are also at risk

Drought across the central US is shrinking the Mississippi River, sending barge rates soaring and threatening to roil shipments of everything from corn to gasoline.

Dry conditions across the Ohio River basin, which feeds the Mississippi, have worsened already low water levels at the larger river, said David Welch, a hydrologist with the Lower Mississippi River Forecast Center. The Mississippi, a critical conduit shuttling food, energy and steel supplies to global markets, usually sees lower levels at this time of year.

“It’s at low enough stages that the barge industry, and navigation industry, has to be sensitive how much draft, how much load, they can put on barges” to prevent ships vessels from running aground, Welch said.

Barge rates originating in an area between Minneapolis-St. Paul and St. Louis were $34.15 a ton for the week ended Aug. 27, a 19% jump from the previous week, according to the US Department of Agriculture. Rates from St. Louis were $24.62 a ton, up 17% from a week earlier.

The recent trend of lower water levels at the Mississippi is bad news for soy and grain producers in the US, according to Mike Steenhoek, the executive director of the Soy Transportation Coalition. Barge companies are already announcing limits on draft and how many vessels can be towed, he said.

While Mississippi River levels are still well above last year’s lows, the drought underscores how extreme weather is putting the world’s most vital waterways at risk. Over the past two years, dry conditions on the Mississippi have created traffic jams at the busiest times of the year to ship grain, forcing farmers to seek alternatives and putting upward pressure on already high global food prices. This year, low water levels on the Amazon in Brazil are also imperiling crop shipments there.

Along with recent railroad snags including a day-long Canada strike, “the retreating water levels on the Mississippi River are serving as an impediment to farmer profitability,” Steenhoek said. “This coincides with a projected large 2024 harvest.”

Shipments of crude oil and petroleum products like gasoline and diesel could also be affected, although crude transports via barges and tankers have dropped in the last decade as more pipelines are built. Last year, around 36,000 barrels of crude and petroleum products were transported between from the Midwest to the Gulf Coast. That’s significantly lower than the peak of 80,787 barrels in 2013.

The shriveled Mississippi imperils drinking water, too. When its levels are low, the river doesn’t have enough force to prevent salt water from the Gulf of Mexico from flowing upstream and contaminating supplies for towns in southeastern Louisiana. Last month, the Army Corps of Engineers said it would build an underwater sill, or barrier, to hold back salt water for a record third year in a row.

Welch said water levels will likely remain low or get worse because there is little rain in the forecast for the next few weeks.

Parts of West Virginia and Ohio along the Mississippi are in extreme drought, the US Drought Monitor said. A larger area encompassing parts of Indiana, Pennsylvania and Kentucky is abnormally dry. And drought is hitting the states along the lower Mississippi as well.

“This is kind of a seasonal dry period,” Welch said. “We are not seeing much to turn it around.”

 

China Halts Poultry Imports From Poland Over H5N1 Outbreak

China halts imports of poultry and related products from Poland, where an outbreak of the highly pathogenic H5N1 avian influenza has been reported, according to a statement by the General Administration of Customs.

The import ban is with immediate effect

 

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

Barge shipments down the Mississippi river declined to 481k tons in the week ending Aug. 31 from 580k tons the previous week, according to the USDA’s weekly grain transportation report.

• Barge shipments of corn fell 10% from the previous week
• Soybean shipments down 23% w/w
• St. Louis barge rates were $27.49 per short ton, an increase of $2.87 from the previous week

 

US Corn Crops in Drought Area Rise to 13%, Soybeans 19%: USDA

The following table shows the percent of US agricultural production within an area that experienced drought for the week ending Sept. 3, according to the USDA’s weekly drought report.

• Corn crops experiencing moderate to intense drought rose by 5 percentage points from the previous week to 13%
• Soybean crops jumped 7 points to 19% in drought

 

 

 

 

 

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