Global Ag News for Dec 23.24

TOP HEADLINES

US Wins Mexico Trade Dispute Over Genetically Engineered Corn

The US won a trade dispute with Mexico over genetically engineered (GE) corn after a USMCA panel ruled in favor of America’s claim that Mexico’s ban on GE corn violated the US-Mexico-Canada Agreement (USMCA).

  • Dispute arose in Feb. 2023 after Mexico put an immediate ban on using GE corn in dough and tortillas and instructed its agencies to gradually eliminate GE corn for other food uses and in animal feed
  • Panel ruled in favor of all seven US legal claims, the US Trade Representative Office said
  • Mexico has 45 days to comply with the USMCA panel’s findings

FUTURES & WEATHER

Wheat prices overnight are up 4 1/2 in SRW, up 4 3/4 in HRW, up 6 in HRS; Corn is up 1 1/2; Soybeans up 1 3/4; Soymeal up $1.50; Soyoil up 0.48.

Markets finished last week with wheat prices down 12 1/2 in SRW, down 9 3/4 in HRW, down 3 3/4 in HRS; Corn is up 2 3/4; Soybeans down 5; Soymeal up $10.30; Soyoil down 1.72.

For the month to date wheat prices are down 10 1/2 in SRW, up 8 3/4 in HRW, up 4 1/2 in HRS; Corn is up 14 3/4; Soybeans down 15; Soymeal up $6.10; Soyoil down 1.71.

Year-To-Date nearby futures are down 14.4% in SRW, down 14.4% in HRW, down 17.6% in HRS; Corn is down 5.0%; Soybeans down 24.5%; Soymeal down 23.3%; Soyoil down 16.6%.

Chinese Ag futures (MAY 25) Soybeans up 41 yuan; Soymeal up 27; Soyoil up 58; Palm oil down 68; Corn up 9 — Malaysian Palm is up 109.

Malaysian palm oil prices overnight were up 109 ringgit (+2.46%) at 4542.

There were changes in registrations (-23 Corn). Registration total: 20 SRW Wheat contracts; 72 Oats; 72 Corn; 205 Soybeans; 879 Soyoil; 1,665 Soymeal; 105 HRW Wheat.

Preliminary changes in futures Open Interest as of December 20 were: SRW Wheat up 64 contracts, HRW Wheat up 2,501, Corn down 305, Soybeans down 11,520, Soymeal down 8,816, Soyoil down 8,273.

 

Brazil: Rio Grande do Sul and Parana:  Mostly dry Monday-Tuesday. Temperatures near to below normal Monday, near normal Tuesday. Mato Grosso, MGDS and southern Goias:  Scattered showers through Tuesday. Temperatures near normal through Tuesday.  

Argentina: Cordoba, Santa Fe, Northern Buenos Aires:  Isolated showers Monday. Mostly dry Tuesday. Temperatures near to below normal through Tuesday. La Pampa, Southern Buenos Aires:  Isolated showers Monday. Mostly dry Tuesday. Temperatures near to below normal through Tuesday.

Northern Plains: Mostly dry Monday-Tuesday. Temperatures above to well above normal through Tuesday. Outlook: Mostly dry Wednesday. Isolated showers Thursday-Sunday. Temperatures well above normal Wednesday-Sunday.

Central/Southern Plains: Isolated to scattered showers Monday-Tuesday. Temperatures above to well above normal through Tuesday. Outlook: Isolated to scattered showers Wednesday-Saturday. Mostly dry Sunday. Temperatures well above normal Wednesday-Sunday.  

Midwest: West: Isolated to scattered showers through Tuesday. Temperatures above to well above normal through Tuesday. East: Isolated to scattered showers Monday-Tuesday. Temperatures near to above normal Monday, above to well above normal Tuesday. Outlook: Isolated to scattered showers Wednesday-Sunday. Temperatures above to well above normal Wednesday-Sunday.

 

The player sheet for Dec. 20 had funds: net sellers of 1,000 contracts of SRW wheat, buyers of 13,000 corn, sellers of 12,500 soybeans, buyers of 7,500 soymeal, and sellers of 3,500 soyoil.

TENDERS

  • CORN SALES: The U.S. Department of Agriculture on Friday confirmed private sales of 150,000 metric tons of U.S. corn to Colombia for delivery during the 2024/25 marketing year.
  • CORN PURCHASE: The Korea Feed Association (KFA) in South Korea is believed to have purchased about 67,000 metric tons of animal feed corn in a private deal on Thursday without issuing an international tender
  • CHINA BOOKS U.S. SOYBEANS: China’s Sinograin has bought nearly 500,000 metric tons of U.S. soybeans this week for shipment in March and April, paying more for U.S. supplies for state reserves rather than buying cheaper Brazilian beans, two U.S. traders familiar with the deals said. China is the world’s top soy buyer and a crucial market for both U.S. and Brazilian farmers, who supply the bulk of China’s imports.
  • NO PURCHASE IN CORN TENDER: South Korea’s Korea Feed Association (KFA) is believed to have rejected all offers and made no purchase in a tender on Friday to buy up to 69,000 metric tons of animal feed corn sourced from the United States, South America or South Africa only.
  • RUSSIAN WHEAT SHIPMENT TO EGYPT: A second shipment of 54,000 metric tons of Russian wheat out of the 430,000 that Egypt bought in September left the port of Novorossiysk on Friday, sources and LSEG shipping data showed. 

PENDING TENDERS

  • FEED BARLEY TENDER: Jordan’s state grains buyer has issued an international tender to purchase up to 120,000 metric tons of animal feed barley.
  • RICE TENDER: Bangladesh’s state grains buyer has issued an international tender to purchase 50,000 metric tons of rice.

 

 

Hands Across The World

 

TODAY

US Cattle on Feed Fell to 11.98M Head on Dec. 1

The feedlot herd fell 0.3% from a year ago, according to the USDA’s monthly report. Analysts were expecting a drop of 0.1%

  • Placements onto feedlots down 3.7% y/y to 1.796m head
  • Cattle marketed from feedlots declined 1.5% to 1.725m head

 

SOYBEAN/CEPEA: Favorable weather reinforces perspective of higher supply; prices move down

Soybean prices dropped this week, pressed by the favorable weather conditions for crops, which has been reinforcing expectations of a record global production. Moreover, the demand continues low, both by crushing companies and importers.

Most consumers have already stopped purchases in 2024. Producers does not show interest to trade, focused on crop activities and also on the exchange rate volatility, which may increase revenue, in Real, next year. In this context, liquidity is low.

On the average of the regions by Cepea, soybean prices dropped 1.6% from Dec. 12-19 in the over-the-counter market (paid to farmers) and 2.4% in the wholesale market (deals between processors).

The ESALQ/BM&FBovespa Index (Paranaguá) decreased 3.8% from December 12-19, closing at BRL 137.46 per 60-kg bag yesterday, the lowest value since Sept. 19 this year. The CEPEA/ESALQ Index (Paraná) dropped 2.7% in the same comparison, to close at BRL 135.66 per 60-kg bag on Dec. 19.

CROPS – Conab indicates that 96.8% of the 2024/25 area (of 47.37 million hectares) had been planted in Brazil up to Dec.15, against 94.6% registered a year ago.

 

CORN/CEPEA: Price gap between purchasers and sellers limits trades

As it is typically observed for the end-of-the-year period, corn trades have been moving at a slow pace in the Brazilian market, limited by the price gap between purchasers and sellers. In this context, decreases prevail in consumer regions, while values are firm in the supplier areas.

Purchasers are cautious, mainly due to the high dollar level, prioritizing the consumption of inventories. Sellers, in turn, are focused on the summer crop activities, with no need to make cash flow at this moment.

The ESALQ/BM&FBovespa Index (Campinas, SP) moved down 1.1% between December 12 and 19, closing at BRL 72.45 per 60-kilo bag on Dec. 19. On the average of the regions surveyed by Cepea, in the same comparison, corn values rose 0.3% in the over-the-counter market (paid to farmers) and 0.2% in the wholesale market (deals between processors).

PORTS – Brazilian exports totaled only 2.37 million tons of corn in the first ten days of December, with a daily pace at 237.12 thousand tons, 22% less than in December/23. Corn quotations rose 1.7% from Dec. 12-19 at the port of Paranaguá (PR) and remained stable in Santos (SP). Dollar quotations increased 1.4% against Real in the same comparison, closing at BRL 6.116 on December 19.

CROPS – Up to Dec. 15, the 2024/25 summer crop planting had reached 75% of the area in Brazil, moving up 2.8 percentage points in one week – data from Conab.

 

Mexico Disagrees w/ Corn Panel Ruling But Will Respect It: Govt

Mexico vowed to respect a USMCA panel ruling over genetically engineered corn, even if it does not agree with it, according to a joint statement from the agriculture and economy ministries.

  • Ruling considered a Mexico ban on energetically modified corn was not based in appropriate scientific evidence: statement
  • Mexico said the ban aimed to safeguard public health and protect indigenous groups
  • Mexico will respect the ruling as it considers the USMCA system to solve disputes is key to the trade treaty and has been fair in previous cases: statement

 

Indonesia to Set 2025 Biodiesel Allocation at 15.62M Kiloliters

Indonesia, the world’s biggest palm oil producer, to allocate 15.62 million kiloliters of palm-based biodiesel for blending with gasoil in 2025, says Eniya Listiani Dewi, director general for new and renewable energy at the Energy and Mineral Resources Ministry, via text messages.

  • Ministry is finalizing a decree on the biodiesel allocation for the B40 program next year
  • NOTE: Indonesia currently requires biodiesel to contain 35% palm oil, a policy known as B35
  • NOTE: Govt set max distribution quota at 13.4m kiloliters for the B35 program this year

 

Russia confirms 63% wheat export quota cut in 2024/25 season

Russia, the world’s largest wheat exporter, said on Friday the wheat export quota had been cut by 63% in the second half of the exporting season to 10.6 million metric tons, implying exports would be sharply reduced next year.

The official figure is broadly in line with the Russian quota of 11 million tons made public late last month by the Eurasian Economic Union (EEU), a trade association of Russia and four ex-Soviet countries.

The cut is part of measures to improve domestic supply and fight inflation, currently at 9.5%. Russia estimates this year’s wheat harvest at 83 million tons, down from 92.8 million in 2023. Last season’s quota was set at 29 million tons.

“The decision was made taking into account the projected balance of production and consumption of grain crops in the domestic market,” the government said in a statement.

With the new quota in place, IKAR consultancy sees Russian wheat exports at 43.5 million tons in the current season, down from 55.5 million tons in 2023/24 season.

Analysts said a minor adjustment of the final figure compared with the one the EEU announced in November was due to an accelerated pace of exports.

Russia has already exported 29 million tons of wheat in this season, according to analysts from Rusagrotrans, Russia’s flagship rail carrier of grain.

Analysts had anticipated the quota cut given the high rate of exports in recent months and a worse-than-expected harvest due to bad weather in most Russian wheat-producing regions.

Russia allows grain exports quota-free from July to February, the first

 

US Beef Production Up 1.4% This Week, Pork Rises: USDA

US federally inspected beef production rises to 535m pounds for the week ending Dec. 21 from 527m in the previous week, according to USDA estimates published on the agency’s website.

  • Cattle slaughter up 1.3% from a week ago to 617m head
  • Pork production up 1.1% from a week ago, hog slaughter rises 0.8%
  • For the year, beef production is 0.5% below last year’s level at this time, and pork is 1.2% above

 

US Egg Production Fell 3.6% in November From Year Ago: USDA

The US produced 8.92b eggs in November vs 9.25b in the same period a year ago, according to a report from the USDA.

  • Output of table eggs fell 3.9% y/y to 7.68b
  • Hatching eggs down 1.4% to 1.24b

 

 

 

 

 

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