Global Ag News for Aug 29.24

TOP HEADLINES

Relief Is on Its Way for Southern Africa After a Record Drought

• Regional body predicts increased chance of normal rainfall
• Change expected because of transition from El Niño to La Niña

Relief may soon be on the way for southern African nations battling the fallout from a record El Niño-induced drought this year, with better rainfall predicted.

There’s an increased probability of normal to above normal rainfall from October to March for the central part of the region, which covers Botswana, central Mozambique, Zambia and Zimbabwe, the Southern Africa Regional Climate Outlook Forum said Wednesday at a presentation in the Zimbabwean capital, Harare.

The change is expected to be brought about by “a transition from the El Niño to the La Niña” weather pattern, Rebecca Manzou, director of the Zimbabwe Meteorological Services Department, said at the event.

 

 

FUTURES & WEATHER

Wheat prices overnight are down 4 in SRW, down 1 1/2 in HRW, up 2 3/4 in HRS; Corn is up 1/2; Soybeans up 9 3/4; Soymeal up $2.10; Soyoil up 0.57.

For the week so far wheat prices are up 9 1/2 in SRW, up 19 1/4 in HRW, up 14 1/4 in HRS; Corn is up 1/4; Soybeans up 13 3/4; Soymeal up $5.90; Soyoil up 0.91.

For the month to date wheat prices are down 14 1/2 in SRW, down 11 1/2 in HRW, down 14 1/2 in HRS; Corn is down 8 1/2; Soybeans down 35 3/4; Soymeal down $5.30; Soyoil down 1.03.

Year-To-Date nearby futures are down 18.9% in SRW, down 15.7% in HRW, down 23.0% in HRS; Corn is down 22.4%; Soybeans down 25.1%; Soymeal down 19.2%; Soyoil down 11.5%.

Chinese Ag futures (NOV 24) Soybeans down 15 yuan; Soymeal down 8; Soyoil up 4; Palm oil down 44; Corn down 7 — Malaysian Palm is up 22.

Malaysian palm oil prices overnight were up 22 ringgit (+0.56%) at 3942.

There were no changes in registrations. Registration total: 424 SRW Wheat contracts; 6 Oats; 15 Corn; 10 Soybeans; 415 Soyoil; 0 Soymeal; 0 HRW Wheat.

Preliminary changes in futures Open Interest as of August 28 were: SRW Wheat down 4,142 contracts, HRW Wheat down 2,526, Corn down 59,663, Soybeans up 3,984, Soymeal down 4,391, Soyoil up 3,195.

 

Northern Plains: Recent showers and severe storms may have caused quality problems and delays for the wheat harvest. Another front pushes through Wednesday and Thursday with scattered showers, but it should be drier behind it through much of next week before another front moves through late week. Temperatures will go on a sort of roller coaster ride over the next couple of weeks.

 

Central/Southern Plains: Isolated showers continue to move through the region, but the heat is taking its toll on many areas that have been drier lately. A stronger front will come sweeping through the region Thursday and Friday with scattered showers, settling down into the south for the weekend where showers may continue. Temperatures behind the front will be much more comfortable for livestock and filling crops. Those across the north that do not see rainfall from the front could be drier through next week and that may take the top off of some yields without much rain in the forecast until maybe late next week with another front moving through. Soil moisture improvements would be preferred before winter wheat planting starts next month.

 

Midwest: Temperatures continued to be hot in much of the region on Tuesday. Thunderstorms developed over a wider area than maybe was forecast, which was good news for some in the north and west. Drier conditions continued in the drier sections of the south and east, though. A weak front will continue to produce some showers Wednesday for those drier areas. Another front pushes through Thursday into Saturday. That will bring more sweeping cooler temperatures through the region along with needed showers. Cooler and drier conditions will follow it through most of next week.

 

Delta: Warm and dry conditions have been an unfavorable combination for filling cotton and soybeans. Some isolated showers may develop ahead of a cold front that will go through the region Friday and Saturday. The front will get stuck across the south this weekend, where it may produce showers into next week. Models are mixed on that prospect. Milder temperatures follow behind the front, though they will still be warm and stressful for filling crops where showers do not occur.

 

Southeast: Some isolated showers may develop this week, but likely it stays dry until a front moves through this weekend, which may linger in the region through next week. The front should bring temperatures down a couple of degrees, but the potential rainfall will be much more beneficial for filling crops here. Models are mixed on the precipitation prospects for next week and could disappoint.

 

Canadian Prairies: A strong front and system will move across the region through Thursday with scattered showers and potential strong winds that could be damaging to mature wheat, canola, and other crops waiting to be harvested. Conditions trend drier for the weekend into early next week while temperatures will be on the rise again. Another front will move through in the middle of next week with potential showers and some elevated winds as well.

 

The player sheet for Aug. 28 had funds: net buyers of 3,000 contracts of SRW wheat, sellers of 3,000 corn, buyers of 4,000 soybeans, sellers of 3,000 soymeal, and buyers of 4,000 soyoil.

 

TENDERS

• CORN SALES: The U.S. Department of Agriculture (USDA) confirmed private sales of 165,735 metric tons of U.S. corn to Mexico and another 100,000 tons to Colombia, all for delivery in the 2024-25 marketing year that begins Sept. 1.
• SOYBEAN SALE: The USDA also confirmed private sales of 264,000 metric tons of U.S. soybeans to China for delivery in the 2024-25 marketing year that begins Sept. 1.
• NO PURCHASE IN 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 Wednesday.

PENDING TENDERS

• CORN, BARLEY TENDERS: Algerian state agency ONAB has issued international tenders to purchase up to 120,000 metric tons of animal feed corn and 35,000 tons of feed barley.
• RICE TENDER: Indonesian state purchasing agency Bulog issued an international tender to buy about 350,000 metric tons of rice.

 

 

TODAY

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

Estimate ranges are based on a Bloomberg survey of six analysts; the USDA is scheduled to release its export sales report on Thursday for week ending Aug. 22.

• Corn est. range 700k – 1,400k tons, with avg of 1,030k
• Soybean est. range 1,400k – 2,550k tons, with avg of 1,790k

 

DOE: US Ethanol Stocks Mostly Unchanged at 23.572M Bbl

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

• Analysts were expecting 23.557 mln bbl
• Plant production at 1.071m b/d, compared to survey avg of 1.091m

 

Canada 2024 Wheat Crop Est. 34.4M Tons, Canola 19.5M: StatsCan

Wheat production seen 4.3% higher vs last year’s crop, according to estimates released Wednesday by Statistics Canada on its website.

• In a Bloomberg survey, analysts were expecting 33.8m tons of wheat production
• Durum wheat production seen rising 47.3% y/y to 6m tons; survey avg 5.6m tons
• Canola production seen rising 1.6% y/y to 19.5m tons; survey avg 19.1m tons

 

Germany’s Grain Harvest Set to Fall 9% Y/y on Bad Weather

Germany’s farmers produced an estimated 34.5 million tons of grains this year, a decline of over 9%, due to unfavorable weather, according to the government’s preliminary harvest report.

• The forecast is well below farmer group DBV’s projection of 39.3m tons
• Crop balance sheet includes:
  • Wheat at 18.5m tons, of which the winter harvest came in at 18m tons, 15% lower than last year
  • Rapeseed down 14% at 3.6m tons
  • Cultivation of potatoes and fruit also suffered
• Last year’s wet autumn, a record warm spring with late frosts, flooding in many places and a wet summer with numerous severe storms impacted the harvest, the Agriculture Ministry said

 

French Non-EU Wheat Sales Seen Falling to Two-Decade Low: Argus

France’s soft-wheat exports outside the European Union in the 2024-25 season are seen dropping 60% to 4.1m tons, the lowest since 2001-02, according to Maxence Devillers, an analyst at Argus Media.

• That’s down from 10m tons on average over the last 5 years
• That is a loss of export revenue for France estimated at €1.4 billion ($1.6 billion)
• There is “lesser impact” on wheat sales within the bloc
• “As a result of excessive rainfall, from sowing to harvest, soft wheat production in France fell to 25.17m tons, down -27.3% from the average of the last 5 years”
• “The catastrophic harvest in France will have a negative impact mainly on the national wheat sector and on cereal exports to third countries”
• “Despite the historical weakness of this harvest, at its lowest level in 41 years, the supply of the domestic market and exports to the countries of the European Union can be preserved.”

 

Yellen Is Urged to Unveil Biofuel Tax Guidance by Sept. 1

US Treasury Secretary Janet Yellen is facing calls from the green diesel and jet fuel lobby to issue so-called 45Z clean fuel tax credit guidance, including safe harbors, within the next few days.

• Clean Fuels Alliance America is asking for the proposed rules and safe harbor guidance to be issued by Sept. 1 and a final rule-making by Nov. 1
  • NOTE: The 45Z credit is part of the Inflation Reduction Act and meant to encourage production of low-emitting fuels
• “US biodiesel, renewable diesel, and sustainable aviation fuel producers are facing difficulties finalizing feedstock contracts, securing capital flows, and meeting project deadlines without knowing the value of the credit. The need for policy certainty is urgent,” Clean Fuels wrote Wednesday in a letter to Yellen
• Treasury and IRS are working diligently to implement the IRA tax incentives, including the Clean Fuel Production Credit, in partnership with other federal agencies, a department spokesperson says in emailed statement
  • Treasury and IRS on May 31 issued guidance on the registration requirements for the credit and, as stated in that notice, plan to issue additional guidance on more aspects of 45Z: Treasury spokesperson
• Clean Fuels says guidance on 45Z needs to be issued well before the credit is set to take force on Jan. 1
  • The renewable fuels “marketplace is a complicated ecosystem that is tied in many cases to agricultural inputs and feedstock production, sales of fuel and futures, allocations to third-party marketers and other factors that will require many months of advance understanding of the new tax structure”: letter

 

California Climate Plan Draws Ire From Biofuel, Trucking Groups

California’s latest plan for its low-carbon program to slash emissions from tailpipes is getting push back from US lobbying groups for corn ethanol, truck stops and fuel marketers.

• “There is no environmental rationale for imposing companywide 20% caps on credits for biomass-based diesel produced from virgin soybean and canola oil,” NATSO and SIGMA write in letter to California regulators
• NATSO is a trade group for US travel centers and truck stops and SIGMA represents fuel marketers
• “Soy- and canola-based renewable diesel gallons will in all likelihood be displaced with petroleum or other higher CI feedstock gallons, rather than new advanced biofuels or other ‘zero emission’ fuel technologies that may be optimal but, at the present time, remain aspirational”: letter
• Renewable Fuels Association says California should allow “lower-cost, lower-carbon E15 fuel blend, containing 15% ethanol, as part of its efforts to enhance the state’s Low Carbon Fuel Standard”
• The ethanol group also argues that expanded feedstock tracking rules would be unnecessary, burdensome
• Ethanol group Growth Energy contends that California’s proposals would unfairly single out US biofuels “in a way that will make it hard for them to generate credits under the program”

 

Tampa Ammonia Market Strengthens Amid Softening Crop Prices

Declining grain prices are making fertilizers less affordable as summer fill programs end and costs reset for the fall. Tampa ammonia’s September settlement at $530 a metric ton reflects a 30% surge since June. India’s phosphate stocks are still tight, signaling a firm market through 2H.

 

Australia Set for Warmer-Than-Average Spring After August Record

Warmer-than-average days and nights are very likely across most of Australia during spring, which runs from September through November, according to the Bureau of Meteorology.

• Rainfall is expected to be above average for large parts of eastern Australia, while much of Western Australia is likely to see drier-than-average conditions
• The country is set to post its warmest August on record, which is tracking around 3C above average, said Lynette Bettio, a senior climatologist with the weather bureau
• Winter has been drier than usual in some agricultural regions of South Australia, Victoria and southern New South Wales

 

 

 

 

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