Global Ag News for Apr 19.24

TOP HEADLINES

Dry, Hot Summer Threatens Grain Crop in Top Australian State

• Soil is extremely dry in Western Australia, group says
• Overall crop area is still seen as similar to last year

A lingering dry, hot summer is increasing concerns for grain farmers in Australia’s top producing state as they begin planting the next crop, according to the Grain Industry Association of Western Australia.

Growers are taking a cautious approach as the soil is extremely dry, the association said in a monthly report Friday. Farmers are still expected to plant 8.6 million hectares of crops, including 4.96 million hectares of wheat. Sown crop area was just under 8.5 million hectares in 2023.

“There is nothing positive on the horizon and this is playing on growers’ minds,” the group said, noting that long-term weather forecasts are not particularly reliable at this time of the year.

Other crop area estimates:

• Barley: 1.46 million hectares
• Canola: 1.57 million hectares
• Oats: 265,000 hectares
• Lupins: 300,000 hectares
• Pulses: 40,000 hectares

FUTURES & WEATHER

Wheat prices overnight are up 6 1/4 in SRW, up 1/4 in HRW, up 5 1/2 in HRS; Corn is up 3 3/4; Soybeans up 3 1/2; Soymeal up $1.80; Soyoil down 0.17.

For the week so far wheat prices are down 11 1/2 in SRW, down 11 1/2 in HRW, down 1 1/2 in HRS; Corn is down 7 1/4; Soybeans down 34 1/4; Soymeal down $4.90; Soyoil down 1.96.

For the month to date wheat prices are down 16 1/2 in SRW, down 4 1/4 in HRW, down 4 1/2 in HRS; Corn is down 14 1/2; Soybeans down 52 3/4; Soymeal down $1.80; Soyoil down 3.99.

Year-To-Date nearby futures are down 13.6% in SRW, down 10.0% in HRW, down 11.0% in HRS; Corn is down 8.5%; Soybeans down 12.0%; Soymeal down 11.9%; Soyoil down 8.1%.

Chinese Ag futures (JUL 24) Soybeans down 16 yuan; Soymeal up 24; Soyoil down 20; Palm oil down 18; Corn down 1 — Malaysian Palm is down 61. Malaysian palm oil prices overnight were down 61 ringgit (-1.53%) at 3923.

There were changes in registrations (-27 Corn). Registration total: 438 SRW Wheat contracts; 0 Oats; 10 Corn; 499 Soybeans; 710 Soyoil; 26 Soymeal; 0 HRW Wheat.

Preliminary changes in futures Open Interest as of April 18 were: SRW Wheat up 2,289 contracts, HRW Wheat down 1,071, Corn up 6,823, Soybeans down 12,195, Soymeal down 1,395, Soyoil up 8,695.

Northern Plains: A storm brought widespread heavy rain to the Dakotas this week that will help to build some soil moisture in dry areas. Cold air is filling in behind the system through the weekend before temperatures rise back up above normal again next week. That comes after another small disturbance moves through with showers on Monday. Despite some areas of heavier rain recently, large-scale delays to early planting are not expected.

Central/Southern Plains: A strong storm system brought widespread showers and thunderstorms through the region early this week, though the driest areas in the southwest did not get much out of this storm. The harsher cold front to the system will move through with scattered showers over the next few days and temperatures will drop significantly into the weekend and could produce frost damage for winter wheat. The pattern stays active next week with a small disturbance and a few showers early in the week, followed by a much more widespread precipitation event later next week and weekend that could get some better rainfall into southwestern areas.

Midwest: A storm system brought areas of heavy rain this week, especially to western drought areas. The main cold front will go sweeping through the region on Thursday and cold air will fill in behind it going into next week. A small system may move through early next week with some showers and another burst of cooler air before temperatures start to rise later next week. Despite some heavier rain, planting is likely to continue at a normal pace.

Delta: Heavy rain has led to areas of water-logged soils and flooding recently, which will slow planting down for a while. A long and drawn-out system will bring through a few more rounds of showers through the weekend that will keep soils wet, but probably won’t be enough to make it worse. The region may or may not get more of a break next week if a small storm system stays north as currently forecast, but a system could impact the region later next week or weekend as well.

Brazil: A front continues to move north through the country this week and showers are getting more isolated as the week wears on. They will continue over the north, but central states are drying out. Heavier rain over the south this week has been helpful for safrinha corn, but not harvest of full-season crops. The consistent wet season showers are winding down now and fronts coming north from Argentina will become the main source of precipitation going forward. That does not bode well for safrinha corn in central Brazil that still has below-normal subsoil moisture and will run out quickly in May as more of the crop goes through pollination and fill. The chances for southern areas to get some needed rain in the future is higher and a front is forecast to move in early next week with showers.

Argentina: Drier weather for most of this week was needed to drain soils from previous heavy rain. Another system will go through with showers this weekend, however, and may continue an active trend across northern areas that are trying to harvest corn and soybeans. Drier weather would actually be more favorable for the next few weeks as harvest continues to increase. Soil moisture for the coming winter wheat crop is very favorable, however.

The player sheet for 4/18 had funds: net buyers of 500 contracts of SRW wheat, sellers of 2,500 corn, buyers of 5,000 soybeans, sellers of 1,000 soymeal, and sellers of 3,500 soyoil.

TENDERS

• SOYBEAN CAKE AND SOYMEAL SALE: Exporters sold 138,000 metric tons of U.S. soybean cake and soymeal to the Philippines for 2023/24 delivery, the U.S. Department of Agriculture said Thursday.
• WHEAT PURCHASE: A group of South Korean flour mills on Thursday bought an estimated 50,000 metric tons of milling wheat to be sourced from the United States
• FOOD WHEAT PURCHASE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 94,612 metric tons of food-quality wheat from the United States and Canada in a regular tender that closed on Thursday.
• DURUM WHEAT PURCHASE: Tunisia’s state grains agency is believed to have purchased about 25,000 metric tons of durum wheat in an international tender on Thursday
• FEED BARLEY PURCHASE: Jordan’s state grains buyer has issued an international tender to purchase up to 120,000 metric tons of animal feed barley
• FEED WHEAT PURCHASE: An importer group in the Philippines is believed to have bought around 50,000 metric tons of animal feed wheat expected to be sourced from Australia on Wednesday
• NO PURCHASE IN CORN TENDER: South Korea’s Korea Feed Association (KFA) is believed to have rejected all offers and made no purchase in an international tender on Thursday to buy up to 69,000 metric tons of animal feed corn sourced from South America or South Africa only
• RICE PRICE OFFER: The lowest price offered in an international tender from Indonesian state purchasing agency Bulog to buy about 300,000 metric tons of rice was estimated at $588.00 per ton cost and freight (c&f) for rice expected to be sourced from Vietnam.

PENDING TENDERS

• SOYMEAL TENDER: Iranian state-owned animal feed importer SLAL issued an international tender to purchase up to 120,000 metric tonnes of soymeal
• RICE TENDER DELAYED: The deadline for price submissions in the international tender from Indonesian state purchasing agency Bulog to buy 300,000 metric tons of rice was delayed to April 17.
• MILLING WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy up to 120,000 metric tons of milling wheat that can be sourced from optional origins.

 

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 April 11, according to data on the USDA’s website.

• Top buyer of soybeans: Unknown Buyers with 314k tons
• Top buyer of corn: Colombia with 274k tons
• Top buyer of wheat: Mexico with 83k 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 April 11, according to data on the USDA’s website.

• Mexico bought 8.5k tons of the 21.8k tons of pork sold in the week
• South Korea led in beef purchases

Argentina Soy Harvest Heavily Delayed by Rains: Grain Exchange

Rains are delaying fieldwork, with the soy harvest just 14% complete, trailing the historic average at this stage of the season by 22 percentage points, according to the Buenos Aires Grain Exchange.

• Harvesting of the early corn crop is also delayed, the bourse said in its weekly report
• Late-planted corn continues to deteriorate because of a leafhopper plague

Argentine Soybean, Corn Estimates April 18: Exchange (Table)

The Buenos Aires Grain Exchange releases weekly report on website.

• Corn harvest 17.2% complete
• Soybean production est. unchanged at 51m tons

Argentina bug invasion knocks $1.3 billion off corn crop

A rare leafhopper insect plague in Argentina has knocked an estimated $1.3 billion off the expected 2023/24 corn crop, the director of economic studies at the Rosario grains exchange said on Thursday, after the body sharply cut it harvest outlook.

Argentina, the world’s No. 3 corn exporter, was headed for a potentially record crop until the outbreak of the pests, which spread a stunt disease that damages corn. That led the Rosario exchange last week to knock 6.5 million tons off its forecast.

“At the moment, the losses caused by the leafhopper are estimated at around $1.268 billion,” Julio Calzada, head of the Rosario exchange’s economic studies department, told Reuters. The body currently estimates a crop of 50.5 million tons.

The rival Buenos Aires grains exchange has already dropped its corn forecast to 49.5 million tons. The Rosario exchange is likely to cut its outlook further as the disease persists.

The leafhopper insect is a vector of the spiroplasma bacteria and other diseases that damage corn.

IGC cuts 2024/25 world corn production forecast

The International Grains Council (IGC) on Thursday cut its outlook for 2024/25 global corn production reflecting a lower forecast for the crop in the United States.

The inter-governmental body, in its monthly update, cut its global corn crop forecast by 7 million metric tons to 1.226 billion tons although the projection remains slightly above the prior session’s 1.223 billion tons.

The U.S. corn crop in 2024/25 was downwardly revised to 374 million tons, down from 382 million seen previously while China’s corn production was seen at 293 million, up from a previous projection of 291 million.

The IGC also trimmed its 2024/25 world wheat crop outlook by 1 million tons to 798 million tons although the projection was still above the prior season’s 789 million.

“The 2024/25 grains supply outlook is slightly tighter compared to last month’s initial projections,” the IGC said while noting the forecast total grains production of 2.32 billion tons would still be a record high.

The IGC maintained its forecast for global soybean production in 2024/25 at 413 million tons, up from the prior season’s 390 million.

China set for bumper harvests of grains and oilseeds, ministry says

China is set for another year of bumper harvest of grains and oilseeds, helped by expanded planting of winter wheat and rapeseed and healthy growth of seedlings, the country’s agriculture ministry said on Friday.

The world’s second-biggest corn grower reported a record corn crop of 288.8 million metric tons last year but continues to aim for larger output amid rising tensions with some trade partners, climate-related disasters and military conflicts.

China aims to boost grain production by 50 million metric tons by 2030, with a focus on soybeans and corn, although state media have reported production hitting a bottleneck.

Good prices and government subsidies have encouraged farmers to expand winter wheat and rapeseed planting, said Pan Wenbo, the ministry’s director-general of cultivation management. These crops are usually harvested around April to May.

“I went to the main producing areas of Hebei, Shandong, Henan and Anhui, indeed the wheat fields are healthy, robust… good seedlings lay the foundation for a good harvest,” Pan said at a press conference.

The area of winter rapeseed planting is expected to increase by more than 2 million mu (133,333 hectares), extending last year’s rise, he added.

The ministry said China’s consumption of agriculture products will continue to recover, with demand driven by a rebound in the tourism and restaurant sectors.

Demand momentum will extend as the economy bounces back more, said Lei Liugong, director of the agriculture ministry’s market and information department. However, demand from the manufacturing and wholesale sectors has not recovered to expected levels, Lei added.

China’s hogs, sow herd size on declining trend, ministry says

China’s hogs, sow and piglet herds are declining after government efforts to decrease production capacity, with prices expected to recover in the second quarter, the Ministry of Agriculture and Rural Affairs said on Friday.

Beijing has encouraged its pig enterprises, which raise half of the world’s pigs, to reduce hog capacity after a rapid expansion led to an oversupply and a multiyear slump in prices.

It has also lowered the national target for normal retention of breeding sows to 39 million from 41 million this year.

China’s sow herd stood at 39.92 million heads as of the end of March, down 7.3% from a year ago, the ministry said.

The decline in the number of pigs at large enterprises is an indication that slaughter volumes during the second quarter of the year will decrease, the ministry’s director of market and information technology Lei Liugong said at a news conference.

“The supply and demand relationship in the pig market will further improve in the second quarter, and pig breeders may turn a profit,” Lei Liugong said.

China’s pig herd size at the end of March was down 5.2% to 408.5 million heads, data from the National Bureau of Statistics showed on Tuesday.

“In the next step, the ministry will focus on stabilizing production capacity, stabilizing policies, preventing epidemics, and continue to stabilize pig production and supply,” Lei added.

Argentine farmers call for ‘urgent’ end to wheat export taxes

Argentina agricultural producers called on the government on Thursday to “urgently” eliminate a 12% tax on wheat exports, as they struggle with high production costs and low international prices.

Argentina is a major global exporter of wheat, but producers concerned about its low profitability are set to sow an area in the quickly approaching 2024/25 season smaller than the recent five-year average, the Buenos Aires grain exchange said on Wednesday.

Wheat planting in the South American grains powerhouse begins in the second half of May.

“We urge the authorities to urgently review these policies and work to implement measures that promote an environment conducive to the development of wheat production, where the elimination of export duties should come first,” agricultural group CRA said in a statement.

The Argentine Rural Confederations (CRA) is one of the four most important agricultural associations in Argentina.

Farming exports are the country’s main source of much-needed foreign exchange, and rural producers are an important political actor.

Libertarian Javier Milei took office in December on the back of a campaign in which he promised to deregulate the agricultural sector.

However, rather than eliminate taxes on grain exports, Milei presented a broad bill weeks into his administration that included an increase in the wheat export tax to 15%.

Congress’ lower house rejected the bill in February, after the proposed tax increase drew intense criticism, including from agricultural producers.

Panama Canal Conditions Show Improvement

The Panama Canal Authority says it’s pulling back on restrictions put in place in response to drought conditions seen last year–which will increase the amount of vessels through the canal. Starting May 16, the PCA will raise total daily transits by 4 to 31. In media reports, the PCA has been quoted as saying that pending adverse weather, the canal would reopen in full by 2025. The Panama Canal is a key passageway for commodities that travel over the ocean–including oil, natural gas, and grains. Freight issues with vessels traveling over the ocean are a factor that can lift commodity prices.

US generated fewer renewable blending credits in March, EPA says

The United States generated fewer renewable fuel blending credits in March versus the month prior, data from the Environmental Protection Agency showed on Thursday.

About 1.19 billion ethanol (D6) blending credits were generated last month, down from 1.21 billion in February, according to the data.

Biodiesel (D4) blending credits generated in March fell to about 648 million from about 743 million in the month prior, according to the data.

The credits are used by oil refiners and importers to show compliance with EPA-mandated ethanol blending quotas for petroleum-based fuels. They are generated with every gallon of biofuel produced.

US Crops in Drought Area for Week Ending April 16: USDA

The following shows the percent of US agricultural production within an area that experienced drought for the week ending April 16, according to the USDA’s weekly drought report.

• Winter wheat experiencing moderate to intense drought is at 24%, 26 percentage points below last year’s figure at this time
• Corn is 5 points below last year’s amount, while soybeans are 2 points above

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

Barge shipments down the Mississippi river increased to 500k tons in the week ending April 13 from 424k tons the previous week, according to the USDA’s weekly grain transportation report.

• Barge shipments of corn rose 1.3% from the previous week
• Soybean shipments down 4% w/w
• St. Louis barge rates were $8.66 per short ton, a decline of $0.44 from the previous week

 

 

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