Global Ag News for Feb 15.24

TOP HEADLINES

Russia’s Agriculture Ministry proposes extending ban on rapeseed exports until Aug 31, 2024 – draft resolution

Russia’s Agriculture Ministry has proposed extending the ban on exporting rapeseed from March 1 to August 31, 2024, and the government has posted the corresponding draft resolution on the website for drafting regulatory legal acts.

The proposal concerns rapeseed under the Eurasian Economic Union (EAEU) Foreign Economic Activity Commodity Nomenclature (FEACN) codes 1205 10 900 0 and 1205 90 000 9.

The ban will not apply to exporting rapeseed through the Zabaikalsk checkpoint. The measure remains in effect.

Russia implemented restrictions on exporting rapeseed for the first time from April 1, 2022 to August 31, 2022, and in September 2022, it extended the restrictions until February 28, 2023, then until August 31, 2023, and February 29, 2024.

Federal State Statistics Service (Ross tat) data indicate that Russia’s harvest of winter rapeseed totaled 1.4 million tonnes in 2023 versus 1.6 million tonnes in 2022, and spring rapeseed totaled 2.8 million tonnes against 2.9 million tonnes, respectively.

FUTURES & WEATHER

Wheat prices overnight are down 3 1/2 in SRW, down 4 1/2 in HRW, down 1 1/2 in HRS; Corn is down 1 1/4; Soybeans down 2 1/4; Soymeal up $0.10; Soyoil down 0.49.

For the week so far wheat prices are down 19 3/4 in SRW, down 20 in HRW, down 20 3/4 in HRS; Corn is down 5 1/2; Soybeans down 16; Soymeal down $3.90; Soyoil down 1.31.

For the month to date wheat prices are down 25 3/4 in SRW, down 40 3/4 in HRW, down 31 1/4 in HRS; Corn is down 25 1/4; Soybeans down 58 3/4; Soymeal down $27.50; Soyoil down 0.10.

Year-To-Date nearby futures are down 7.4% in SRW, down 9.2% in HRW, down 8.6% in HRS; Corn is down 10.2%; Soybeans down 9.7%; Soymeal down 11.0%; Soyoil down 4.2%.

Malaysian palm oil prices overnight were down 72 ringgit (-1.82%) at 3876. China markets remain closed for Holiday.

There were no changes in registrations. Registration total: 772 SRW Wheat contracts; 0 Oats; 6 Corn; 468 Soybeans; 125 Soyoil; 1 Soymeal; 84 HRW Wheat.

Preliminary changes in futures Open Interest as of February 14 were: SRW Wheat up 2,984 contracts, HRW Wheat down 3,423, Corn down 8,044, Soybeans up 10,855, Soymeal up 1,204, Soyoil down 3,277.

Brazil: Scattered showers across central Brazil have become isolated. A front moving north from Argentina will bring heavier rain to southern and eastern areas. The south has been too dry for several weeks and needs the rain. By the weekend, showers are forecast to be widespread and heavy for much of the country, beneficial for everything but fieldwork as soybeans are still being harvest and safrinha corn is still being planted. Southern areas will not be wet for long as it gets unfavorably dry again next week.

Argentina: Heavy rain returned to the region and put an end to the hot and dry conditions that caused corn and soybeans to suffer from mid-January. Soil moisture has increased and crop conditions have stabilized. Another system is forecast to move into the country this weekend.

Europe: The main storm track will be farther north for most of this week, though some showers may go through Spain on Thursday and southeastern areas and Italy this weekend. While crops are vulnerable to winterkill with no significant snow cover, there are no risks of arctic freeze. Temperatures are favored to be above normal through this weekend and early next week.

Australia: Some isolated showers went through Queensland over the weekend, but many areas stayed dry. Eastern areas will catch some showers moving through this week, but most of these will be isolated. Heat across the west and southeast could be detrimental for cotton and sorghum, but more so across the west as any chances for precipitation will be limited into next week.

Northern Plains: Several small systems will move through over the next couple of weeks. They may not bring much precipitation, though some streaks of heavier snow will be possible. Cooler air will arrive after Wednesday and could persist into the weekend.

Central/Southern Plains: A clipper will move off to the north on Wednesday and could bring some showers to northern areas. Another will move through the region on Thursday and Friday. But that one may be able to tap into more moisture and bring a few more streaks of showers, which may include some moderate snow. Clippers are likely to move through the area next week as well. Temperatures could cool down at times between systems the rest of this week but are trending towards above normal next week.

Midwest: A clipper will move through Wednesday and Thursday and bring more scattered showers but also some colder air. Another will follow quickly for Friday that may have some streaks of heavier precipitation as well. Bands of moderate to heavy snow will be a threat with both. Several more clippers will move through next week, but temperatures are beginning to show a trend towards above normal.

Delta: Heavy rain went through the region over recent days, which continues to ease drought conditions and flooding has been more significant recently. Another system will come through on Friday and Saturday with more potential for rain. By early next week, a system will break off from the atmospheric river in the West and provide light showers to the area.

The player sheet for Feb. 14 had funds: net sellers of 6,000 contracts of SRW wheat, sellers of 4,500 corn, sellers of 6,500 soybeans, sellers of 1,000 soymeal, and sellers of 3,000 soyoil.

TENDERS

• MILLING WHEAT PURCHASE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 115,035 metric tons of food-quality wheat from the United States, Canada and Australia in a regular tender that closed on Thursday.
• WHEAT TENDER: Egypt’s state grains buyer the General Authority for Supply Commodities (GASC) is seeking wheat in an international tender. The deadline for offers is Feb. 15.
• WHEAT TENDER: Jordan’s state grain buyer has issued an international tender to buy up to 120,000 metric tons of milling wheat sourced from optional origins
• BARLEY SALE: Jordan’s state grain buyer has purchased about 60,000 metric tons of animal feed barley to be sourced from optional origins in an international tender which closed on Wednesday
• FEED WHEAT, BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said that it will seek 60,000 metric tons of feed wheat and 20,000 tons of feed barley to be loaded by Feb. 28 and arrive in Japan by March 21, via a simultaneous buy and sell (SBS) auction, which will be held on Feb. 21.

PENDING TENDERS

• CORN, SOYMEAL TENDER: Algerian state agency ONAB has issued international tenders to purchase up to 160,000 metric tons of animal feed corn and 35,000 tons of soymeal
• RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 88,800 metric tons of rice to be sourced from the United States and China
• WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 metric tons of milling wheat.

 

 

TODAY

 

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

Estimate ranges are based on a Bloomberg survey of four analysts; the USDA is scheduled to release its export sales report on Thursday for week ending Feb. 8.

• Corn est. range 500k – 1,500k tons, with avg of 1,217k
• Soybean est. range 300k – 825k tons, with avg of 563k

DOE: US Ethanol Stocks Rise 4.2% to 25.81M Bbl

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

• Analysts were expecting 25.146 mln bbl
• Plant production at 1.083m b/d, compared to survey avg of 1.05m

CROP SURVEY: US January Soybean Crush Seen at 189.7M Bushels

Projections are based on a survey of seven analysts conducted by Bloomberg News on Feb. 13-14.

• Soybean crush seen 6% higher vs January of last year, and a decline of 2.9% vs a month ago
• Oil stocks at the end of last month seen at 1.401b lbs vs 1.829b a year earlier

French 2023-24 Soft-Wheat Stocks Seen 37% Higher Y/y: Agrimer

French soft-wheat stockpiles at the close of the 2023-24 season are now expected to be 3.5m tons, up from a January estimate of 3.44m tons, crops office FranceAgriMer said in a report on Wednesday.

• That’s still the highest since at least the 2018-19 season
• Country’s soft-wheat exports seen at 16.7m tons, little changed from January estimate

BARLEY

• Export estimate cut to 6.05m tons from 6.06m tons
• Stockpiles forecast steady at 2.11m tons

CORN

• Stockpiles forecast raised to 2.37m tons from 2.18m tons

Argentina soybean production up again despite declining vegetation density – Refinitiv Commodities Research

2023/24 ARGENTINA SOYBEAN PRODUCTION: 51.9 [48.2–53.6] MILLION TONS, UP 1% FROM LAST UPDATE

Favorable late January/early February weather and good growing conditions during the crop’s prime developmental period once again increase 2023/24 Argentina soybean production by 1% to 51.9 [48.2–53.6] million tons, despite earlier than expected declines in overall vegetation density across the Pampas. Our current estimate puts planted area at 16.9 million hectares, slightly below 17.3 and 17.4 million hectares reported by Bolsa de Cereales in Buenos Aires and Bolsa de Comercio in Rosario, respectively. In February’s WASDE (08 February), USDA placed Argentina soybean production at 50 million tons, unchanged from its previous update. Bolsa de Cereales in Buenos Aires and Bolsa de Comercio in Rosario currently forecast production at 52.5 and 52 million tons, respectively.

Much of the Pampas experienced a continuation of warm and wet conditions over the past 15 days, though its intensity has slightly diminished compared to recent weeks. Some torrential downpours took place in central/eastern Buenos Aires (up to 120 mm in total, 70 mm above normal), causing localized flood/water logging problems, though not reported to be serious. Cooler/drier weather is expected to return to these areas later this week, helping crops going through the prime growth/blooming period (e.g. flowering, early/mid reproductive stages) before the pod fill. Vegetation densities derived from satellite imagery continue to indicate near or above historical median levels in most key producing provinces, albeit recent declines over the last couple of weeks. This is likely due to early season sowing delays that took place past November. The earlier than expected declines in vegetation density might imply a leftward growth curve shift, but should not impact the crop’s yield potential too much as the overall soil moisture conditions remain healthy in virtually all major production regions. The latest ENSO outlook by our LSEG Weather Research team indicates that key forecast indicators increasingly support a weak El Niño state during March-May, much of Argentina’s harvest season. Largely moderate conditions are likely in most crop areas of the main Pampas as a result, which should bode well for harvest activities.

Palm Oil Prices Seen at 3,700-3,950 Rgt/Ton in February: MPOC

Palm oil prices are expected to remain resilient and trade above 3,700 ringgit/ton in February due to weaker production and smaller stockpiles this month, according to the Malaysian Palm Oil Council.

• There will be fewer harvesting days as February is a shorter month and it coincides with the Lunar New Year celebration, while Malaysia’s domestic palm oil consumption is expected to remain robust ahead of Ramadan, MPOC said in a Thursday statement
  • Palm oil stockpiles are forecast to drop below the 2 million ton psychological level this month
• NOTE: Malaysian inventories shrank by the most in 10 months in January to 2.02 million tons, while production fell to a nine-month low
• Still, weak global demand for vegetable oils will keep prices capped at around 3,950 ringgit, MPOC said
• “In the near term, palm oil has lost its price competitiveness due to weak soft oil prices,” it said, with palm oil this week trading at a premium to soybean, sunflower and rapeseed oils in Europe
  • This unfavorable price spread could prompt global traders to fulfill their vegetable oil demand with these alternative oils
• NOTE: Futures in Kuala Lumpur were trading -0.4% at 3,934 ringgit on Thursday

Russia lacks sufficient capacities for acceptance and shipping of grain, modern grain elevators – AgMin

Amid conditions of high harvests, Russia lacks grain receiving and shipment capacities, as well as modern elevators, while overall capacities are in surplus territory and designed to store more than 166 million tonnes of grain, Olga Polozyukova, deputy director of the department for regulation of agricultural markets at the Agriculture Ministry said at the “Elevators of Russia – 2024” business conference in Moscow on Wednesday.

“The main weaknesses in the current realities are probably insufficient grain receiving and shipping capacities, as well as elevators that do not have sufficient railroad infrastructure. They are also now in a weak position,” she said.

“This is an important topic for remote regions,” she said. “For example, for Siberia the only method of delivery to the main ports of Russia is by rail. And elevators, which do not have the capacity to ship by shipping routes, are forced to form 10-15 railcars at their location, then transport them to public railways, and form common shipments there. These processes lengthen the delivery time to end consumers and export terminals, and increase the cost of delivery,” Polozyukova said.

“Thus, the main need now is for modern elevators capable of carrying out shipment routes and fully equipped with their own infrastructure,” she said. “Market participants are now realizing this trend, and in recent years we have seen a unified logistics from field to terminal being built. Market participants are now building not just elevators with railroad shipments, but also replenishing their own rolling stock. And some participants can even afford to build terminals as well,” Polozyukova said.

According to her, there are various measures of state support for the development of the grain storage industry. In particular, the export project provides for preferential investment loans for the construction of access railroads to receive and form full shipment routes.

At the same time, Polozyukova said that the current grain storage capacity in Russia is more than 166 million tons. The main sites are located in the Central, Southern, Volga and Siberian federal districts, “which is logical and due to the high rates of harvest in these regions,” she said. “If we look at the figures and taking into account gross production and consumption in each region and the necessary reserves to ensure domestic consumption, the capacity surplus is estimated at more than 23% of what is needed,” the deputy director of the department added.

WHEAT/CEPEA: Values oscillate a little in Brazil

Cepea, 14 – Wheat prices have been fluctuating slightly in the domestic market for circa four months. Not even the decrease of the supply from the previous crop and low inventories were able to boost quotations. In Rio Grande do Sul, for instance, the 2023 production was equivalent to half of that harvested in 2022 and, still, prices remain low.

According to data from Cepea, between February 2 and 9, the prices paid to wheat farmers (over-the-counter market) dropped 0.33% in Santa Catarina and 0.56% in Paraná, but remained stable in Rio Grande do Sul. In the wholesale market (deals between processors), values decreased 3.1% in Paraná, 0.94% in Rio Grande do Sul and 1.22% in São Paulo. In Santa Catarina, on the other hand, quotations rose 0.62%. In the same period, dollar quotes downed 0.2% against Real, closing at BRL 4.958 on Feb. 9.

Conab indicates that the area may total 3.48 million hectares, similar to that in the year before. As for productivity, it may increase 25.9% in Brazil in 2024, at 2.93 tons per hectare. As a result, production is expected to total 10.19 million tons, for a sharp increase of 26% in relation the season ended in 2023.

Conab also estimates imports at 5 million tons between August/24 and July/25, leading to the domestic availability at 15.6 million tons, against 15.01 million tons last season. The domestic consumption may hit the record of 12.64 million tons, while exports are forecast at 2 million tons.

US allows farmers to use existing supplies of dicamba weedkillers

The U.S. Environmental Protection Agency said on Wednesday that farmers can use some existing supplies of weedkillers based on the chemical dicamba, despite a federal court ruling last week that halted sprayings.

The decision is a win for farmers who planned to use dicamba products sold by Bayer BAYGn.DE, BASF BASFn.DE and Syngenta on genetically modified soybeans and cotton during the summer growing season, and for the agrichemical companies.

Environmental activists have objected to dicamba herbicides because they are known to drift away and damage other crops that are not resistant.

But farm groups had warned the court ruling, if fully enforced by the federal government, could financially hurt growers who will plant their next crops in the spring. The groups had said most growers had already determined which seeds and chemicals they will use and may struggle to shift away from dicamba herbicides or crops that tolerate the chemical.

“We are very appreciative of EPA’s decision to let us get through the 2024 growing season by using any product already in the delivery pipeline,” said Josh Gackle, president of the American Soybean Association and a North Dakota soybean farmer.

U.S. District Court Judge David Bury in Arizona last week vacated the EPA’s registrations of dicamba-based weedkillers from 2020, saying the agency violated procedures mandating public input. The ruling affected Bayer’s XtendiMax, BASF’s Engenia and Sygnenta’s Tavium, commonly used herbicides on U.S. farms.

Bayer soybeans that resist dicamba-based herbicide are the No. 2 most-planted soybeans in the United States, though not all are sprayed with the chemical. Bayer and Syngenta welcomed the EPA’s decision to let farmers use existing supplies. BASF did not immediately respond to a request for comment.

The EPA said on Wednesday it authorized the sale and distribution of dicamba products “that were already in the possession of growers or in the channels of trade and outside the control of pesticide companies” before the court ruling on Feb. 6.

The agency “received ample evidence that millions of gallons” of dicamba products meant to be sprayed on crops had already entered trade channels, according to a statement.

US trade chief looks for incremental reform at WTO meeting

U.S. Trade Representative Katherine Tai said on Wednesday that she is taking a “pragmatic” approach to the World Trade Organization’s next ministerial meeting, aiming for incremental but meaningful improvements that sustain the trade body’s reform momentum.

Tai told reporters ahead of the WTO’s 13th Ministerial Conference (MC13) in Abu Dhabi that she did not anticipate a massive reform agreement that addressed all of the institution’s shortcomings at once.

“We’re looking for success,” she said of the Feb. 26-29 conference. “The Athena coming out of the brain of MC13, it’s not going to happen. So why would we set ourselves up for that?”

Instead, she said that during conversations with MC13’s host, United Arab Emirates Trade Minister Thani Al Zeyoudi, a prominent word was “pragmatic. And frankly, I think that, in the context of the global economy right now, that pragmatism is what is going to save us.”

The WTO faces a large number of difficult issues among its 166 members, including reforming its hobbled dispute settlement system, cutting fishing subsidies, resolving disagreements over agriculture subsidies and deciding whether to extend a 25-year-old ban on duties on electronic commerce data transmissions.

Ministers from the WTO’s 166 member states are due to meet at a time of growing trade restrictions driven by national security interests and heightened geopolitical tensions, including from Russia’s invasion of Ukraine and U.S. curbs on exports of high-technology items to China. WTO ministers in 2022 agreed the body’s first reforms in years, clinching deals to ban fishery subsidies for over-fished stocks and creating a partial intellectual property waiver to allow developing countries to produce COVID-19 vaccines.

Asked during a briefing what would make a successful MC13, Tai responded: “It would be an MC13 that meaningfully builds on this reform program and an MC13 where people come away and they feel hopeful and determined, and smarter, about preparing for MC14.”

“It is incremental,” Tai added.

Crop Ratios Suggest Spring Nitrogen Use to Surge

US farmers looking to apply ammonia this spring will find it delivers the best boost to returns in three years, indicating increased 1H volumes for publicly traded producers like CF Industries, OCI and Nutrien. Combined with the season’s early start, ammonia prices in the region could stay higher for longer despite the global slide. The most profitable anhydrous rate for an Iowa corn farmer has risen 2% to 181 pounds an acre. US farmers directly apply around 3-4 million metric tons of ammonia annually. Volumes fluctuate with crop area, price ratios and weather; higher use generally correlates with increased crop yields.

Despite ammonia’s still pricey per ton tag, it’s the least expensive form of nitrogen in the US. An early spring can also support phosphate and potash sales volumes.

US Needs Imports for Just-in-Time Buyers

The US depends on imports of all fertilizers, tying prices and just-in-time spring supply to global markets. Fertilizer is more widely available this year; eastern European fertilizer exports have increased despite Western sanctions, and falling natural gas prices support nitrogen production economics. Still, the US International Trade Commission reaffirmed duties on US phosphate imports from Russia and Morocco in January, making the shipments more expensive and reducing the amount. Chinese exports remain restricted but could loosen in 2Q, likely too late for US spring applications.

The North American fertilizer market is highly consolidated. Nutrien and Mosaic supply most of the region’s fertilizer potash. Four companies, including Nutrien and CF Industries, own 70% of US nitrogen capacity.

US Spring Fertilizer Season Starts Early as Imports Rise Broadly

Ammonia prices in the US were stable to soft as warm weather prompted early spring applications. US fertilizer imports tracked above last year for all products, while phosphate affordability deteriorated to the worst in 10 years. Morocco’s phosphate trade with the US fell in 4Q even after duties on the African country’s imports were revised lower.

Urea Strengthens, Ammonia Slump Continues: Wednesday Whisper

Domestic and international ammonia prices remained under pressure ahead of the Tampa settlement for March. Terminals in Oklahoma and Kansas slipped to $500-$520 a short ton (st), down from a recent high of $540, while Northwest Europe pricing indicated a decline of $10 a metric ton (mt) amid reports of softer natural gas prices impacting ammonia production costs. New Orleans (NOLA) urea for February-March firmed to $355-$360/st vs. last week’s $345-$350, while NOLA phosphates saw a slight decline. A $25/st increase from Interoceanic pushed US ammonium sulfate list prices higher on Feb. 13, while potash remained flat to softer at NOLA and inland.

Top Corn Fertilizer Maker Sees Profit Plunge as Prices Tumble

• CF Industries expects better profits for US farmers this year
• US company forecasts strong fertilizer demand in North America

The world’s biggest producer of nitrogen fertilizer used for corn and other crops posted sharply lower quarterly profit and sales as prices tumbled.

CF Industries Holdings Inc.’s fourth-quarter sales dropped 40% from a year earlier to $1.57 billion, the company reported after the close of US markets on Wednesday. Net income plummeted to $1.44 a share from $4.35, and missed the average analyst estimate of $1.60.

Results have suffered as fertilizer prices dropped from record highs in 2022, when Russia’s invasion of Ukraine threw global supplies into disarray. CF is optimistic about this year, however, predicting better US agriculture profits as lower grain prices are offset by less costly farm inputs.

“Management expects nitrogen demand in North America for the spring 2024 application season to remain strong,” the company said in a statement.

The contract for spot Tampa anhydrous ammonia, the world benchmark, has fallen 44% in the last 12 months.

CF, based in Northbrook, Illinois, projects that 91 million acres of corn will be planted in the US this year. That’s below the average Bloomberg survey forecast of 91.6 million acres, which if realized would be 3 million acres less than last year.

The US Department of Agriculture is set to release its initial 2024-25 estimates at the agency’s annual Outlook Forum on Thursday.

 

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