Global Ag News for Dec 2.24

TOP HEADLINES

Argentina Seeks Its First Wheat Shipments to China in Decades

  • Wheat output in Argentina’s breadbasket region set to jump 18%
  • Trump tariff threats raise hopes for export opportunities

Argentina wheat traders are seeking to close their first significant sales to China since the 1990s, according to the head of the country’s top crop-exporting group.

China is making overtures for wheat purchases after it authorized Argentine shipments earlier this year, said Gustavo Idigoras, president of Ciara-Cec, whose members include the major agricultural trading houses. China also recently authorized purchases of Argentine corn, though no cargoes have yet sailed.

The move comes as Argentina, one of the world’s top wheat suppliers, is on track for a bumper harvest. At the same time, tariff threats from US President-elect Donald Trump are raising hopes among South American traders for greater export opportunities.

Growers in and around the southern half of Buenos Aires province, who will harvest their golden wheat fields in the coming weeks, are forecast to produce 3.9 million metric tons, 18% more than a year ago when plants endured a drought. That’s according to a tour of farmland this week organized by the Bahia Blanca Grain Exchange.

A wheat field, on the left, in Buenos Aires province on Nov. 28.

The province, home to Argentina’s prime wheat region, will contribute to a broader production rebound after a La Nina climate system that threatened to parch fields again largely dissipated — helping libertarian President Javier Milei’s plan to kick-start an ailing economy.

Sporadic rains over the last few months fell just in time to keep plants in good condition, spurring improved yields, said Gabriel Abregos, an estimates analyst at the Bahia Blanca bourse. The US Department of Agriculture expects a national Argentine wheat crop of 17.5 million tons, up from 15.9 million last season.

China’s potential as a market for Argentine wheat may increase if Trump’s vow to slap tariffs on imports sparks a full-on trade war with retaliatory levies imposed by Beijing.

“Brazil took advantage of Trump’s first trade war, boosting its endeavor to be an agricultural force,” Idigoras said in an interview. “We need to know what a second trade war would look like — long, short, multi-destination, multi-product? — to see who could seize the opportunity this time around.”

However, Milei still needs to fulfill a promise to cut Argentina’s long-standing tariffs on its own crop exports.

Idigoras said exporters are lobbying the government to reduce the levies — which range from 12% to 33%, denting the country’s global competitiveness — for next season. But since Milei needs the revenue to reach ambitious budget goals, it isn’t clear if the efforts will succeed.

 

FUTURES & WEATHER

Wheat prices overnight are down 4 1/4 in SRW, down 2 3/4 in HRW, down 2 1/4 in HRS; Corn is down 2; Soybeans down 1; Soymeal up $1.00; Soyoil down 0.16.

Markets finished last week with wheat prices down 19 1/2 in SRW, down 27 1/4 in HRW, down 12 in HRS; Corn is down 4 3/4; Soybeans up 3 1/2; Soymeal up $1.60; Soyoil down 0.50.

For the month to date wheat prices are down 4 1/4 in SRW, down 2 3/4 in HRW, down 2 1/4 in HRS; Corn is down 2; Soybeans down 1; Soymeal up $1.00; Soyoil down 0.16.

Year-To-Date nearby futures are down 14.9% in SRW, down 18.9% in HRW, down 20.9% in HRS; Corn is down 10.6%; Soybeans down 23.7%; Soymeal down 25.3%; Soyoil down 13.5%.

Chinese Ag futures (JAN 25) Soybeans down 3 yuan; Soymeal down 16; Soyoil down 8; Palm oil up 146; Corn down 17 — Malaysian Palm is down 65.

Malaysian palm oil prices overnight were down 65 ringgit (-1.29%) at 4955.

There were changes in registrations (115 Soymeal). Registration total: 0 SRW Wheat contracts; 0 Oats; 114 Corn; 422 Soybeans; 369 Soyoil; 891 Soymeal; 105 HRW Wheat.

Preliminary changes in futures Open Interest as of November 29 were: SRW Wheat up 3,367 contracts, HRW Wheat up 3,210, Corn down 1,220, Soybeans up 1,024, Soymeal down 4,523, Soyoil down 1,752.

 

Northern Plains: Some light snow moved through over the weekend, but arctic cold temperatures have frozen the ground. Without a serious and long-lasting warmup, precipitation that falls will be counted on to build snowpack for spring and not have much impact on the current drought situation. Temperatures will waffle around quite a bit this week and next, but generally be too cold to raise soil temperatures enough. Several waves of lighter showers will move through, mostly as snow. The best chance for moderate precipitation will occur on Sunday.

Central/Southern Plains: Though a few showers fell in the northeast this weekend, most areas were dry. A burst of showers will go through Texas on Wednesday, but dry conditions are likely most of this week. Temperatures will waffle around as clippers go by to the north and a larger system may go through Sunday into Monday that may or may not have widespread precipitation with it.

Midwest: Lake-effect snow was very heavy over the weekend and a small clipper brought a concentrated area of moderate snow to the south on Saturday. Another is moving through similar areas Sunday night and Monday. A larger clipper will move across the Canadian border and another burst of colder air will drop through behind it for the end of the week. Temperatures will bounce around more frequently as clippers move through the region this weekend and next week. One of those may be a bigger storm with more widespread precipitation early next week, though.

Lower Mississippi: Water levels on the Mississippi River are still above the low mark, but are still falling. Several clippers are moving through the region, but potential for heavy rain and snow is not in the forecast. There could be a significant system that moves through on Monday or Tuesday of next week, but models are uncertain about it. If it does not occur, a return to low water levels could lead to transportation issues.

Brazil: Scattered showers continue in central Brazil. Another front will move through southern areas with heavier rainfall early this week with another for the weekend. Overall, conditions are still largely favorable for developing corn and soybeans.

Argentina: A front brought scattered showers through over the weekend, which is exiting to the north on Monday. Some good rain fell in portions of the drier south, but not all. Another front moves through Thursday through Saturday with more scattered showers. Most areas have good growing conditions, but there are some areas in the south that are too dry. If the late-week front disappoints, it could be more concerning as the pattern will tend to be drier afterward.

Europe: Scattered showers continued in the southeast over the weekend, hitting some of the driest areas on the continent with good rainfall. Several fronts will move through the continent this week and next, allowing for quite a lot of precipitation for France, Germany, and the UK. Some of these areas are too wet as winter wheat continues to go dormant with patches that are too wet.

Black Sea: Precipitation had picked up in the east recently, helping to build some soil moisture as wheat continues to go dormant in mostly poor condition there. The region will hope for good precipitation over the winter to get a good start when the crop comes out of dormancy in the spring. Precipitation may pick up this weekend into next week and would be helpful if it does.

Australia: Scattered showers continued in the east over the weekend and another system will move through those same areas over the next few days. Another system may move through late in the week with more showers for the east as well. The rain is unfavorable for winter wheat and canola harvest, but good for cotton and sorghum development. Soil moisture is improving in many areas, though western areas are much drier.

 

The player sheet for Nov. 29 had funds: net sellers of 1,000 contracts of SRW wheat, buyers of 7,500 corn, sellers of 4,000 soybeans, sellers of 3,000 soymeal, and buyers of 4,500 soyoil.

TENDERS

  • SOYBEAN SALE: Exporters struck deals to sell 840,000 metric tons of U.S. soybeans and 151,700 metric tons of U.S. soybeans to unknown destinations for 2024-25 delivery, the U.S. Department of Agriculture said in a daily reporting system.
  • FEED BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase up to 120,000 metric tons of animal feed barley
  • DURUM EXPORT TENDER: Turkey’s state grain board TMO issued an international tender to sell and export 100,000 metric tons of durum wheat
  • NON-GMO SOYBEAN TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp. issued international tenders to purchase a total of 70,000 metric tons of food-quality soybeans free of genetically modified organisms
  • RICE PURCHASE: South Korea’s state-backed Agro-Fisheries & Food Trade Corp. purchased an estimated 60,000 metric tons of rice mainly to be sourced from Vietnam and Thailand in an international tender that closed earlier in November.
  • BARLEY SALE: Turkish state grain board TMO is believed to have provisionally sold an estimated 150,000 metric tons of barley in an export tender for the same volume.
  • NO PURCHASE IN WHEAT, VEGOIL DEAL: Egypt’s Mostakbal Misr Agency for Sustainable Development is believed to have made no purchases in its wheat and vegetable oil procurement inquiry, sources said.

 PENDING TENDERS

  • 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.
  • RICE TENDER: Bangladesh’s state grains buyer issued another international tender to purchase 50,000 metric tons of rice.

 

TODAY

 

US Sold 2.51M Tons of Soybeans Last Week; 1.13M of Corn: USDA

USDA releases net export sales report on website for week ending Nov. 21.

  • Soybean sales rose to 2,509k tons vs 1,861k in previous week
  • All wheat sales fell to 367k tons vs 550k in previous week
  • Corn sales fell to 1,130k tons vs 1,495k in previous week

 

US Export Sales of Soybeans, Corn and Wheat by Country

The following table shows US export sales of soybeans, corn and wheat by biggest net buyers for week ending Nov. 21, according to data on the USDA’s website.

  • Top buyer of soybeans: China with 1.09m tons
  • Top buyer of corn: Mexico with 472k tons
  • Top buyer of wheat: Unknown Buyers with 95k 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 Nov. 21, according to data on the USDA’s website.

  • Mexico bought 11.3k tons of the 34.7k tons of pork sold in the week
  • South Korea led in beef purchases

 

CROP SURVEY: US Soybean Crush and Corn for Ethanol

The following is from a Bloomberg survey of six anlaysts.

  • Soybean crush seen at 210.6m bu in Oct., a 4.6% rise from a year ago
  • Crude and once-refined soybean-oil reserves at end of October seen at 1.508b lbs, up from 1.502b
  • Corn used in ethanol production seen unchanged y/y at 462.3m bu

 

Russia to Limit Wheat Export More Than Usual on Smaller Crop

Russia proposed a lower wheat-export quota than recent seasons, with a smaller harvest and strong global demand leaving it with less grain than usual to sell.

Russian customs officials approved a wheat-export quota of 11 million tons for the second half of the season from Feb. 15 to June 30, Interfax reported, citing the Economy Ministry. Still, the country’s wheat shipments had been expected to slow down after a breakneck pace at the start of the year, dimming the impact to the market.

The world’s top wheat exporter shipped out record volumes in the early months of the season, despite a smaller crop after its wheat harvest fell more than 10%. That leaves it less to export later in the season.

The quota for corn, barley and rye will be set at zero tons in that period, Interfax reported. In the last two seasons Russia didn’t limit sales of these grains separately.

Russia’s wheat supplies have helped keep a lid on global grain prices in recent seasons, even as its local market has seen big changes since Vladimir Putin’s full-scale invasion of Ukraine nearly three years ago.

Moscow has continued to try and tighten its grip on flows. Most recently the local union of grain exporters has called for foreign traders and intermediaries to be ousted from the country’s sales. It’s also set a wheat price guide in an effort to lift the market.

Export quotas were introduced to protect domestic food supplies and prevent inflation, but in the previous two seasons, Russia harvested record crops and officials set the quota at such high levels that did not restrict exports.

Analysts had expected officials to set a wheat-export quota of between 9-12 million tons, Interfax reported earlier this month.

 

CORN/CEPEA: Favorable weather reduces concerns; prices move down

More favorable weather conditions have influenced in an advance of sowing activities for both corn and soybean (summer crop) or even eliminated players’ concerns about the second crop being planted out of the desirable period in 2025. Moreover, the rainfall has been favoring the development of the summer crop (plants already implemented).

In this scenario, consumers who had already closed deals in previous weeks reduced the pace of trades, and the upward trend was interrupted in many regions.

The ESALQ/BM&FBovespa Index (Campinas, SP) downed 1.4% between November 21 and 28, closing at BRL 72.46 per 60-kilo bag on Nov. 28. On the average of the regions surveyed by Cepea, corn values upped 1.1% in the over-the-counter market (paid to farmers) but downed 0.3% in the wholesale market (deals between processors) from November 21-28.

PORTS – Brazilian shipments totaled 3.46 million tons of corn in the first 14 producing days of this month, accounting for 47% of the total volume exported in the same month last year – data from Secex. Anec estimates that exports may total 5.1 million tons in November, below the 7.4 million tons sold in November 2023.

CROPS – Up to November 24, the 2024/25 summer crop planting had reached 58.7% of the area in Brazil – data from Conab.

 

SOYBEAN/CEPEA: High dollar values may boost costs, but favor exporters

US dollar quotations at around BRL 6 tend to boost prices of imported inputs, such as fertilizers, and, consequently, increase soybean production costs, especially second crops. On the other hand, it favors the revenue in Real (Brazilian currency) obtained for exported goods and boosts the export parity.

As a result, regarding the summer crop, which has consolidated costs, high dollar quotations favor sellers. Soybean prices were indeed sustained by the US dollar at high levels this week, given that producers in Brazil are more optimistic with sales in 2025, despite the possible record crop.

The US dollar rose 2.9% against Real from November 21-28, at BRL 5.986 on Nov. 28. In the partial of this month (up to Nov. 28), dollar quotations averaged the record of BRL 5.7941, 3% more than in October and 18.3% above that in Nov/23.

However, this scenario discouraged trades in the spot market and term contracts. On one hand, soy producers are focused on crop activities, being away from closing deals. On the other, most consumers claim to have stocks.

As a result, for the time being, prices continue practically stable in the spot market. The ESALQ/BM&FBovespa Index (Paranaguá) remained stable (+0.03%) from November 21-28, closing at BRL 142.43 per 60-kg bag yesterday. In November (until Nov. 28), the Index upped 1% against October, averaging BRL 143.28/bag, the highest since June this year, in real terms (IGP-DI October/24).

The CEPEA/ESALQ Index (Paraná) downed 0.3% in the same comparison, to close at BRL 140.46 per 60-kg bag on Nov. 28. The Index moved up 0.5% in the partial of this month, at BRL 140.46/bag, the highest monthly value of this year, in real terms.

On the average of the regions by Cepea, soybean prices decreased 0.3% from Nov. 21-28 in the over-the-counter market (paid to farmers) and 0.6% in the wholesale market (deals between processors).

BYPRODUCTS – On the average of the regions surveyed by Cepea, soymeal prices dropped 0.6% between November 21 and 28. The Brazilian value of soy oil moved down 4.5%, at 7,176.15 BRL per ton (in São Paulo city with 12% ICMS) on Nov. 28.

CROPS – Conab indicates that 83.3% of the area had been planted up to Nov. 24, higher than the 75% verified one year ago.

 

Malaysia Nov. Palm Oil Exports -9.26% M/m: Intertek

Following is a summary of Malaysia’s Nov. palm oil exports according to Intertek Testing Services.

  • Total exports for Nov. 2024: 1.474m tons
  • Crude palm oil exports: 287,680 tons, 19.5% of total
  • Africa led all destinations for total exports: 396,790 tons

 

Morocco Traders to Boost Russian Wheat Imports after Agreement

Morocco’s grain traders group FNCL signed an agreement with the Russian Union of Grain Exporters that is set to boost wheat imports, FNCL chief Omar Yacoubi tells Bloomberg by telephone.

  • Memorandum of understanding signed Friday is a first for the two countries and will boost exchange of information between Russian and Moroccan operators
  • MOU does not cover options to settle grain transactions
  • Agreement was signed during a visit to Morocco by Russian exporters led by Eduard Zernin

 

Indonesia Sets CPO Reference Price at $1,071.67/Ton for Dec.

The trade ministry sets higher crude palm oil reference price at $1,071.67 a ton for December from $961.97 in November, says Farid Amir, director for export of agriculture and forestry products at the ministry, in text message late Friday.

  • The reference price will raise CPO export tax for December to $178/ton
  • NOTE: Exporters must also pay additional CPO levy at 7.5% of the reference price

 

Ukraine introduces minimum export prices for major agricultural goods

Ukraine has introduced a new system for exporting key agrarian goods, including grains, which implies a ban on exporting consignments of goods at prices below those set by the agriculture ministry.

Ukraine is a global major grain and oilseeds grower and exporter and the new system became operational on December 1.

The government launched the plan to tackle price distortions linked to Russia’s invasion, which has seen an increase in domestic cash purchases of some agricultural products and their subsequent export at artificially low prices to avoid taxes.

In line with the new rules, minimum permissible export prices will be calculated on the basis of state customs service data, taking into account the terms of delivery for the previous month and using a 10% discount.

The farm ministry has already published the minimum prices at its website https://minagro.gov.ua/ and will refresh it on the 10th of each month.

The ministry also said that it has abolished the need for exporters to go through the vetting process and obtain licences to export food products.

The mechanism implied mandatory registration of an export company in a special agricultural register and, in the absence of such registration, the need to obtain a licence for each export operation.

 

NZ Institute Sees 50% Chance That La Niña Develops Over Summer

NZ’s National Institute for Water and Atmospheric Research comments in seasonal outlook for three months through February, published Monday in Wellington.

  • There is a 50% chance that La Niña develops by the end of February
  • Recent signals in both the ocean and the atmosphere point to the tropical Pacific transitioning to more distinct La Niña-like conditions over the course of December however there is still uncertainty as to whether conventional La Niña thresholds will be exceeded
  • Regardless of whether La Niña is formally declared over the forecast period, weather patterns broadly consistent with La Niña conditions are expected to become more established as the summer season unfolds
  • That includes normal or above-normal rainfall in the North Island, and above-average temperatures across the country

 

US Crops in Drought Area for Week Ending Nov. 26: USDA

The following table shows the percent of US agricultural production within an area that experienced drought for the week ending Nov. 26, according to the USDA’s weekly drought report.

  • Winter wheat experiencing moderate to intense drought fell to 28% last week from 40% in the previous week
  • This follows a nationwide trend of reduced drought conditions last week

 

 

 

 

 

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