Global Ag News for Feb 16.24

TOP HEADLINES

France Reaches Deal on Ample Grain Flow on Seine During Olympics

A million tons of grains shipped along the Seine River are set to reach their destination this summer — despite a brief halt for the Paris Olympic Games.

Organizers reached a deal with grains producers to curb the amount of time the river will close to traffic in Paris due to the Olympics, Agriculture Minister Marc Fesneau told reporters Thursday. It will now be shut for 6.5 days leading up to the start of the Games on July 26, instead of 10 days originally planned.

The Seine, which cuts through the heart of the French capital, is one of Europe’s most iconic rivers and is expected to play a large role in the Games, including the opening ceremonies and swimming events. But France is also Europe’s biggest grains producer, with a powerful agricultural lobby.

While hosting the Olympics is very important for France, it “cannot delay the periods of harvest,” said Jean-Francois Loiseau, president of industry group Intercereales. “Water transportation is also very important for decarbonizing, so we need to remain coherent in that sense.”

More than one million tons of grains are transported on the Seine during the summer season, or about 20-25 vessels a day, according to Loiseau. Vessels carry cargoes to local regions and also to international markets through ports such as Rouen in the north of France.

Tensions have been high as French producers of grains and other products have joined other farmers across Europe to block roads and protest against mostly environmental measures that they say are pushing them out of business.

In another big test for organizers, swimming and triathlon events are also set to be held in the Seine, despite previous failed attempts for races canceled because of water pollution.

FUTURES & WEATHER

Wheat prices overnight are down 5 1/2 in SRW, down 6 3/4 in HRW, down 3/4 in HRS; Corn is unchanged; Soybeans up 3; Soymeal up $1.20; Soyoil down 0.02.

For the week so far wheat prices are down 37 1/2 in SRW, down 36 1/4 in HRW, down 25 in HRS; Corn is down 11 3/4; Soybeans down 21; Soymeal down $5.90; Soyoil down 1.23.

For the month to date wheat prices are down 43 1/2 in SRW, down 57 in HRW, down 40 in HRS; Corn is down 28 3/4; Soybeans down 63 3/4; Soymeal down $29.50; Soyoil down 0.02.

Year-To-Date nearby futures are down 10.6% in SRW, down 11.3% in HRW, down 9.2% in HRS; Corn is down 11.3%; Soybeans down 9.9%; Soymeal down 11.7%; Soyoil down 3.8%.

Malaysian palm oil prices overnight were down 20 ringgit (-0.52%) at 3855. China markets reopen on the 18th.

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 15 were: SRW Wheat down 2,270 contracts, HRW Wheat down 1,389, Corn down 9,361, Soybeans up 12,939, Soymeal up 411, Soyoil down 122.

Brazil: Scattered showers across central Brazil remain 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 and early next week, showers are forecast to be widespread and heavy for central areas, 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, but showers will remain isolated. Better chances for scattered showers may return by the middle to end of next week as a few disturbances pass by to the south.

Europe: The main storm track will be farther north for the rest 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: Eastern areas will have daily chances for isolated to scattered showers into next week. 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: A band of moderate to heavy snow fell across South Dakota Wednesday, providing up to eight inches of snow across east-central South Dakota. Several small systems will continue to move through the region over the next couple of weeks. They may not bring much widespread precipitation, though some streaks of heavier snow will be possible. Cooler air will stick around through Friday but warmer temperatures will return this weekend and next week.

Central/Southern Plains: A clipper system provided some showers to northern areas on Wednesday. Another will move through the region later 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 provided a band of snow to southern Minnesota on Wednesday and will continue working through the eastern half of the region on Thursday, bringing more scattered showers but also some colder air. Another will follow quickly for Friday that may have some streaks of heavier precipitation for southern areas. Several more clippers will move through next week and temperatures are beginning to show a trend towards above normal.

Delta: Heavy rain went through the region earlier this week, 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. Warmer temperatures will also return next week after a quick shot of cooler air this weekend.

The player sheet for Feb. 15 had funds: net sellers of 8,500 contracts of SRW wheat, sellers of 4,500 corn, sellers of 3,500 soybeans, sellers of 3,000 soymeal, and sellers of 1,000 soyoil.

TENDERS

  • WHEAT SALE: Egypt’s state grains buyer, the General Authority for Supply Commodities, said on Thursday it had bought 180,000 metric tons of wheat in a tender. The purchase comprised 120,000 tons of Ukrainian wheat and 60,000 tons of Romanian wheat, it said.
  • CORN SALE: South Korea’s Major Feedmill Group (MFG) has purchased an estimated 68,000 metric tonnes of animal feed corn to be sourced optionally from South America or South Africa in an international tender on Thursday
  • CORN SALE: Algerian state agency ONAB is believed to have bought corn at around $230 per metric ton, cost and freight (c&f) included, in an international tender.
  • WHEAT SALE: 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.

PENDING TENDERS

  • 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
  • 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
  • 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.
  • WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 metric tons of milling wheat.

 

Globe currency

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 Feb. 8, according to data on the USDA’s website.

  • Top buyer of soybeans: China with 414k tons
  • Top buyer of corn: Mexico with 421k tons
  • Top buyer of wheat: Philippines with 118k tons

NOPA January US soybean crush drops to 185.780 million bushels

The January U.S. soybean crush dropped by more than expected from a record high the previous month, although it was still the largest crush on record for the first month of the year, according to National Oilseed Processors Association (NOPA) data released on Thursday.

NOPA members, which account for around 95% of soybeans crushed in the United States, processed 185.780 million bushels of soybeans last month, down 4.9% from a record 195.328 million bushels crushed in December but up 3.8% from the January 2023 crush of 179.007 million bushels. It was the largest January crush on record, topping the prior high mark of 184.654 million bushels in 2021.

The average daily crush rate fell to 5.993 million bushels in January, slowing from a record 6.301 million bushels a day in November and December and the slowest in four months, NOPA data showed.

U.S. crushers have expanded capacity to meet rising demand for vegetable oils for making renewable fuels, but a severe mid-January cold snap disrupted truck and rail transportation and slowed operations at several plants, analysts said.

One large facility in Indiana was also down for nearly a week due to a damaged natural gas pipeline.

NOPA’s January crush fell below the average trade estimate of 189.928 million bushels in a Reuters survey of nine analysts. Estimates ranged from 184.5 million to 196.015 million bushels, with a median of 190.0 million bushels.

Soyoil stocks among NOPA members as of Jan. 31 rose to 1.507 billion lbs, up 10.8% from the 1.360 billion lbs on hand at the end of December and the largest end-of-month supply since July. Analysts, on average, had expected stocks to rise to 1.409 billion lbs, according to estimates from seven analysts. Soyoil stocks estimates ranged from 1.284 billion to 1.500 billion lbs, with a median of 1.400 billion lbs.

World 2023-24 Grain Output Estimate Raised on Corn Supplies: IGC

The estimate for total grains production in the 2023-24 season was raised slightly amid a bigger output forecast for corn, the International Grains Council said in a report.

  • Total grains output now seen at 2.31b tons, up 3m tons from last month’s estimate
  • Corn production outlook raised by 4m tons to 1.23b tons
  • World grain stockpile estimate at the end of the season was trimmed by 1m tons to 589m tons
  • Estimate for wheat inventories was slightly lowered to 265m tons

2024-25 OUTLOOK

  • Says wheat stockpiles are expected to be slightly tighter than expected last month, with inventories seen at an eight-year low
  • Corn area is seen a bit higher y/y, while the barley area is expected to be smaller than average and little changed y/y

Argentina Rains Help Soy, Corn Plants After Heat Wave: Exchange

Rains have improved the condition of soybean and corn plants on Argentina’s Pampas crop belt after a bout of high temperatures and dryness, the Buenos Aires Grain Exchange said in a weekly report.

  • “Rains across the entire growing area have put the breaks on crop deterioration”
  • Both the first and second soy crops are benefitting from renewed soil moisture

Argentine Soybean, Corn Estimates Feb. 15: Exchange

The Buenos Aires Grain Exchange releases weekly report on website.

  • 2023-24 corn and soybean planting estimates unchanged from last week’s report
  • Corn planting reached full completion

EU 2024-25 Soft-Wheat Output Forecast Steady: Strategie Grains

EU 2024-25 soft-wheat production is now seen at 122.6m tons, little changed from a January estimate, analysis firm Strategie Grains said in its second forecast for the next season.

  • Barley estimate cut slightly, while corn estimate was raised
  • “Excessive autumn rains, having already hampered plantings, are still causing concern in terms of the impact on yield potentials” for Europe wheat
  • Sees high wheat stocks for the end of 2023/24 due to slow EU exports, competition from Russian origin wheat, and imports of Ukrainian wheat

Ukraine 2024 grain, oilseed crop may fall 15-20%, says UCAB business association

The combined Ukrainian grain and oilseed harvest may fall 15% to 20% in 2024 because of A smaller sowing area, the Kyiv-based UCAB business association said on Thursday.

Ukraine is a major global grain and oilseeds producer but its harvests have decreased since Russia invaded and occupied significant swathes of territory. The war, now in its 24th month and with no end in sight, has driven up global grain prices and disrupted supplies, especially to poorer countries.

“Depending on the planted areas and yields, we can expect the gross harvest of grains and oilseeds to decrease by 15-20%,” UCAB said on Facebook.

“The volume of planted areas will become clearer after the start of the spring sowing season. However, it is already known that 4.8 million hectares of winter crops were planted in autumn, which is 6% less than last year,” it noted.

The Ukrainian government has said the 2023 grain and oilseed crops could total around 81 million metric tons.

Farm minister Mykola Solsky told Reuters this month Ukraine expected its 2024 spring sowing area to be the same as last year, though it could see a slight decrease in the worst case scenario. Later, the farm ministry issued a survey, which showed that the overall 2024 spring sowing area could fall by 500,000 hectares or 3.7% compared to the previous year. The ministry said farmers could reduce the area sown to corn by 9% but will boost sowing areas of rapeseed, sugar beet and soybeans.

India Jan. Oilmeals Exports Fall to 477,580 Tons

India’s oilmeals exports fell to 477,580 tons in January from 532,729 tons in December, according to the Solvent Extractors’ Association of India.

  • Rapeseed meal exports fell to 71,472 tons from 216,942 tons in December
  • Soymeal exports rose to 375,360 tons from 273,394 tons in December
  • Castorseed meal exports fell to 30,748 tons from 42,393 tons in December

French Soft Wheat and Barley in Worse Shape Than 2023: AgriMer

Some 68% of France’s soft-wheat crop was rated in good or very good condition as of Feb. 12, versus 93% this time last year, FranceAgriMer data showed on Friday.

  • Winter barley rated good or very good was at 71%, versus 92% last year
  • Spring barley was 20% planted, versus 54% at this time last year

Brazil’S 2024 Farming Shift: From Corn To Diverse Crops

In 2024, Brazil’s farmers are pivoting from corn to a variety of crops for the second planting season.

The National Supply Company (Conab) forecasts a 7.5% reduction in corn cultivation area, dropping to 15.879 million hectares from 17.179 million hectares in 2023.

This shift responds to low corn prices, delayed soybean planting, and expected April rainfall decreases.

Farmers are now eyeing alternatives like sorghum, sesame, cotton, wheat, sunflower, and rice.

Sorghum, in particular, is gaining favor for its climatic resilience and wider planting window, according to Stefan Podsclan from Agrifatto.

Vlamir Brandalizze, a market analyst, points out cotton and other crops as profitable options that fit better into the current planting schedule.

Sorghum stands out in central Brazil for its drought tolerance and role in animal feed, mirroring corn’s utility. Conab observes sorghum growth in Mato Grosso, and expects Bahia and Piauí growth due to diversification and corn decline.

Sesame cultivation is rising, especially in Canarana, Mato Grosso, driven by market demand and the crop’s strong root system.

Meanwhile, cotton ‘s planting area is to grow by 12.8% to 1.877 million hectares, driven by shifts from soy for stable prices and profitability.

Wheat, mainly grown in the South, is less favored this season due to its profitability and planting window challenges compared to corn. Sunflower and rice rise as potential corn alternatives, with sunflower, noted for pricing and rice for increased cultivation area. Brazilian farmers diversify crops strategically, adapting to weather and economic uncertainties for sustainable agricultural growth and risk mitigation.

US Farmers on Edge With Green Jet Fuel Tax Credit Detail Looming

The Biden administration is being urged by US lawmakers to ensure American farmers working to cut climate-change pollution are able to take advantage of tax credits for the production of lower-emitting jet fuel.

  • At issue is an update of the Energy Department’s emissions-measuring method known as GREET, a model for calculating greenhouse-gas emissions
    • The corn-ethanol industry is worried the model could be revised in a way that hurts their ability to claim lucrative subsidies
  • Democratic Senators Amy Klobuchar and Tammy Duckworth, Republican Senator John Thune and 40 other members of Congress wrote on Thursday asking for the administration to act by March 1
  • The update should: properly credit practices like regenerative farming and carbon capture; ensure valuations of indirect land-use changes recognize contributions of US agriculture; and reward modern practices like precision agriculture that lead to higher per-acre yields: lawmakers

US Miss. River Grain Shipments Fall, Barge Rates Increase: USDA

Barge shipments down the Mississippi river declined to 584k tons in the week ending Feb. 10 from 598k tons the previous week, according to the USDA’s weekly grain transportation report.

  • Barge shipments of corn rose 40.1% from the previous week
  • Soybean shipments down 17% w/w
  • St. Louis barge rates were $14.60 per short ton, an increase of $0.52 from the previous week

Australia Set for Another Cyclone Hit After Storm Forms in North

  • Tropical Cyclone Lincoln to make landfall as Category 1 system
  • Storm to cross between Northern Territory, Queensland border

Australia will be struck by a third tropical cyclone in around two months after a system formed off the country’s north on Friday, with the storm expected to cross the coast in a sparsely populated area.

Tropical Cyclone Lincoln is expected to make landfall between the Northern Territory and Queensland border and Port McArthur later Friday, according to a notice from the Bureau of Meteorology. It’s forecast to cross as a Category 1 storm, the weakest in the agency’s classification system.

Cyclone Jasper brought heavy rain and flooding to Queensland’s far north after crossing the coast in December, swamping sugar crops and inundating homes. Kirrily hit the state more than a month later in a more populated area, but the damage wasn’t as vast, despite making landfall as a Category 3 storm.

As Lincoln moves inland, the system is expected to weaken and begin moving west across central Northern Territory over the weekend and then over northern Western Australia, bringing heavy rain, according to the bureau. There is a moderate risk it could reform into a cyclone on Thursday, the agency said.

 

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