Global Ag News for Jan 13.2025

TOP HEADLINES

Biden administration to release clean fuel tax credit model that limits ethanol producers’ credit access, sources say

The Biden administration is expected to release by next week a climate model for clean fuel tax credits that will not include climate-smart agricultural practices, three sources familiar with the matter told Reuters.

The exclusion of the practices would make it harder for ethanol producers to access clean fuel energy credits and represents a reversal from the last update of the climate model. U.S. Treasury is expected to issue a notice for proposed rulemaking on the broader program on Friday, leaving further decisions on the plan to incoming President-elect Donald Trump’s administration.

 

FUTURES & WEATHER

Wheat prices overnight are up 7 1/4 in SRW, up 6 1/4 in HRW, up 5 1/4 in HRS; Corn is up 3 3/4; Soybeans up 9 1/2; Soymeal up $4.80; Soyoil up 0.08.

Markets finished last week with wheat prices down 2 1/2 in SRW, up 4 3/4 in HRW, down 2 3/4 in HRS; Corn is up 16 1/2; Soybeans up 37; Soymeal down $4.20; Soyoil up 5.32.

For the month to date wheat prices are down 13 1/2 in SRW, down 1 1/4 in HRW, down 6 1/4 in HRS; Corn is up 15 3/4; Soybeans up 24 1/4; Soymeal down $13.80; Soyoil up 5.30.

Chinese Ag futures (MAY 25) Soybeans up 28 yuan; Soymeal up 67; Soyoil up 166; Palm oil up 208; Corn up 8 — Malaysian Palm is up 113.

Malaysian palm oil prices overnight were up 113 ringgit (+2.57%) at 4504.

There were no changes in registrations. Registration total: 20 SRW Wheat contracts; 72 Oats; 6 Corn; 262 Soybeans; 1,116 Soyoil; 1,466 Soymeal; 105 HRW Wheat.

Preliminary changes in futures Open Interest as of January 10 were: SRW Wheat up 3,050 contracts, HRW Wheat down 153, Corn up 72,270, Soybeans up 4,114, Soymeal up 2,975, Soyoil up 4,101.

 

Brazil: Widespread wet season showers continue in central and northern Brazil, favorable for filling soybeans, but hampering the very early harvest. The main harvest period does not start for at least another week, so the rain is overall favorable. However, if rainfall continues to be heavy for the end of January and into February, it may have more of an impact on harvesting soybeans and planting safrinha corn. Showers across the south have been much less frequent, which has been a problem for filling soybeans in Mato Grosso do Sul and Parana and pollinating to filling corn in Rio Grande do Sul. A couple of fronts moving through this weekend are looking to bring more widespread precipitation.

Argentina: Soil moisture is falling in many areas of Argentina with very little showers and temperatures well above normal in the 90s and 100s, leading to declining crop conditions. We may see a burst or two of showers moving through later in the week and weekend, but any heavy amounts may be limited. Models disagree on the amount of precipitation that is expected to fall.

Northern Plains: Some light snow moved through over the weekend, but was heavier in parts of Montana. Light snow continues for Monday but it should be drier and warmer for most of the week until another front moves through on Friday. Scattered light snow will occur behind the front over the weekend, but very cold air will move in as well, lasting well into next week.

Central/Southern Plains: A few light showers moved through over the weekend, but most areas were dry. A front and system will move through Friday and Saturday, bringing scattered showers, but also another burst of very cold air. Exposed wheat areas may see some winter kill from this burst of cold that should last well into next week.

Midwest: A system moved through on Friday and another moved through over the weekend, producing widespread showers, but not a lot of actual precipitation. Lake-effect snow lasts through Tuesday and a system will move through with light snow on Tuesday as well. Temperatures will rise this week, especially in the northwest. But a system moving through this weekend should bring through a burst of more showers as a mix of rain and snow and will be followed by a burst of extremely cold air through most of next week.

Lower Mississippi: Water levels remain above the low-water mark in most of the Mississippi and Ohio River systems, making for mostly easy transportation. Northern areas of the Mississippi Basin are getting drier though, and could use some precipitation to keep water levels up. A system moving through this weekend could help that out some.

Europe: Scattered showers continued south into the Mediterranean over the weekend and drier conditions are setting up for most of this week, with only limited showers moving through the northeast and west at various points over the next couple of weeks. The drier conditions would be more favored across the northwest, but more rain is needed in Spain as well as some other dry areas in the southeast. There are no risks of significant cold for the next couple of weeks.

Black Sea: Wheat went dormant in good condition in the west, but poor condition in the east, particularly in southwestern Russia. Scattered showers have been more prevalent since crops went dormant. Systems will continue to provide periodic showers through the end of January, trying to build at least some moisture this winter. Amounts do not look heavy though, and a lot of rain and snow are needed before wheat breaks dormancy this spring. There are no risks of significant cold for the next couple of weeks that would be a large concern for winter kill on exposed wheat.

Australia: Scattered showers went through eastern areas over the weekend and continue for the next several days, with limited help for developing cotton and sorghum. Dry areas in the west and south are not getting as lucky with only limited showers and declining soil moisture in these areas.

 

The player sheet for Jan. 10 had funds: net buyers of 1,000 contracts of SRW wheat, buyers of 40,000 corn, buyers of 20,000 soybeans, buyers of 5,500 soymeal, and buyers of 11,500 soyoil.

TENDERS

  • CORN SALE: South Korea’s Major Feedmill Group (MFG) purchased an estimated 134,000 metric tons of animal feed corn in an international tender on Friday.
  • CORN SALE: The Incheon section of the Korea Feed Association (KFA) in South Korea is believed to have purchased about 65,000 metric tons of animal feed corn in a private deal on Thursday without issuing an international tender.

PENDING TENDERS

  • CORN TENDER: Taiwan’s MFIG purchasing group has issued an international tender to buy up to 65,000 metric tons of animal feed corn which can be sourced from the United States, Argentina, Brazil or South Africa
  • RICE TENDERS: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 metric tons of rice, with price offers due by Jan. 1, traders said. It also issued another tender for 50,000 metric tons of rice, with price offers due by Jan. 9
  • 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.
  • BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase up to 120,000 metric tons of animal feed barley.

 

earth in watercolor

 

TODAY

US Sold 289.1K Tons of Soybeans Last Week; 445K of Corn: USDA

USDA releases net export sales report on website for week ending Jan. 2.

  • Corn sales fell to 445k tons vs 777k in previous week
  • All wheat sales fell to 111k tons vs 141k in previous week
  • Soybean sales fell to 289k tons vs 485k in previous week

 

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 Jan. 2, according to data on the USDA’s website.

  • Mexico bought 24.5k tons of the 43.4k tons of pork sold in the week
  • Mexico led in beef purchases
  • The new marketing year for pork and beef began Jan. 1

 

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 Jan. 2, according to data on the USDA’s website.

  • Top buyer of soybeans: Netherlands with 205k tons
  • Top buyer of corn: Colombia with 177k tons
  • Top buyer of wheat: South Korea with 68k tons

 

CROP SURVEY: Brazil 2024-25 Soybean Output Seen at 168.8M Tons

Brazil soybean production est. seen 2.6m tons higher than the national forecast agency’s previous est. made in December, according to the avg in a Bloomberg survey of six analysts.

  • The range of estimates varied from 165m tons to 171.5m tons
  • Brazil’s corn crop seen 0.7m tons higher at 120.3m tons
  • Conab, the Brazilian national supply company, is scheduled to release its latest estimates on Jan. 14 at 9am local time

 

Patria trims Brazil 2024/2025 soy crop forecast on weather; Safras hikes estimate

Brazilian agribusiness consultancies shared contrasting views on Friday as they released fresh estimates for the country’s 2024/25 soybean crop, with Safras & Mercado hiking its forecast while Patria AgroNegocios trimmed its projection.

Both firms still forecast the world’s largest soybean producer and exporter to harvest a record crop this year, but Patria noted that adverse weather in some key states should keep production below the level of 170 million metric tons.

Patria pegged Brazil’s soybean output this season at 167.94 million tons, up from 147.74 million in the previous cycle – when farmers grappled with bad weather – but below the 170.41 million it had estimated in December.

The head of the consultancy firm, Matheus Pereira, said the lower forecast was related to a drop in “crop quality” in some large producing states, such as Mato Grosso do Sul, Parana and Rio Grande do Sul.

Meteorologists warned earlier this week that dry weather was limiting soybean development in southern Brazil at the same time as excessive rain was set to disrupt early harvest work in some central areas of the country.

Safras & Mercado acknowledged weather issues in the same states cited by Patria, noting they could lead to lower output, but indicated that a “very favorable scenario” in top grain-producing state Mato Grosso would help offset those losses.

“Yield potential in the state is excellent,” Safras said in a statement, forecasting Brazil’s output this season to hit 173.71 million tons, higher than its previous forecast of 171.78 million tons and up 14.1% on a year-on-year basis.

 

Brazil 2024/25 Soy Output Est. Raised to 173.71m Mt: Safras

Brazilian soybean production in 2024/25 is expected to total 173.71 million metric tons, an increase of 14.1% over the previous season, according to an estimate released by Safras & Mercado.

  • Previous estimate in September was 171.78 million tons
    • Revision takes into account climatic factors and its impact on yields, Safras & Mercado’s analyst and consultant Rafael Silveira said in the emailed report
  • Safras sees planted area at 47.47 million ha, which compares to 46.48 million ha in 2023/24
    • Average yield seen increasing to 3,678 kg/ha from 3,295 kg/ha
  • Brazilian corn production in 2024/25 is expected to total 135.743 million tons, according to a separate report from Safras
    • Total area seen at 21.243 million ha
    • Yield is expected to increase to 6,390 kg/ha from 5,980 kg/ha in 2023/24

 

China Dec. Soybean Imports 7.941m Tons: Customs

General Administration of Customs says on website.

  • Soybean imports YTD rose 6.5% y/y to 105.032m tons
  • Edible vegetable oil imports in Dec. 701,000 tons
    • Edible vegetable oil imports YTD fell 26.8% y/y to 7.162m tons
  • Meat (including offal) imports in Dec. 611,000 tons
    • Meat (including offal) imports YTD fell 9.7% y/y to 6.666m tons
  • Fertilizer exports in Dec. 2.861m tons
    • Fertilizer exports YTD rose 2% y/y to 32.133m tons

 

China soybean imports hit record in 2024 ahead of Trump inauguration

China imported the most soybeans on record in 2024 as buyers concerned about rising U.S.-China trade tensions rushed to secure U.S. suppliesahead of President-elect Donald Trump’s inauguration.

The world’s biggest buyer of the oilseed imported 105.03 million metric tons of soybeans in 2024, a 6.5% increase from a year ago, according to customs data released on Monday.

Record annual import volumes were driven by declining CBOT soybean prices in 2024, strong crushing margins, and buyers’ preparations due to trade war concerns, said Rosa Wang, analyst at Shanghai-based agro-consultancy JCI.

For December, arrivals dropped 0.2% to 7.94 million tons from the same month a year earlier, according to Reuters calculations of customs data.

That was less than analysts’ estimates of about 8.2 million tons and marked the smallest amount in four years.

“This could be due to the speed of customs clearance,” Wang said.

In the final months of 2024, China buyers imported larger-than-usual shipments of U.S. beans despite cheaper Brazilian alternatives to hedge against a potential trade war between Beijing and Washington under a Trump presidency.

Trump, who takes office on Jan. 20, has pledged tariffs of as much as 60% on Chinese goods, duties that analysts say would disrupt international trade and raise costs, and could prompt retaliation.

While it is unclear how China will respond to tariffs under the new U.S. administration, traders in China said they have prepared by diversifying suppliers as well as boosting stocks.

Even without a trade war, ample supply and weak crush margins are expected to dampen future import demand for U.S.soybeans, BMI Research said in a note.

“Although a Trump presidency could reignite U.S.-Mainland China trade tensions and potential Chinese tariffs on U.S soybean exports, we anticipate that the expected decline in Chinese demand will mitigate price impacts,” BMI Research said.

Crush margins in China’s main processing hub at Rizhao have been negative since November, and were last at a loss of 225.04 yuan ($30.69) per ton of soybean processed.

 

CORN/CEPEA: Prices move up in this early 2025

Corn prices have started this year in an upward trend, due to the firm demand and the fact that sellers are away from closing deals. Not even the beginning of the summer crop harvesting (soy and corn) has been enough to limit recent price rises.

Consumers expected that some producers would increase the supply due to the need to open room in warehouses, as the harvest advances. However, sellers are focused on purchasers’ needs, preferring to focus on crops activities. For the time being, producers do not need to open room in warehouses. As a result, the corn supply has been limited.

The ESALQ/BM&FBovespa Index (Campinas, SP) upped 1.9% between January 2 and 9, closing at BRL 74.32 per 60-kilo bag on Jan. 9. On the average of the regions surveyed by Cepea, in the same comparison, corn values rose 0.2% in the over-the-counter market (paid to farmers) and 0.8% in the wholesale market (deals between processors).

EXPORTS – According to data from Secex, Brazil shipped 4.26 million tons in December, 10% less than in November/24 and 30% smaller compared to that in Dec/23.

From February to December 2024, exports totaled 34.9 million tons, below the 49.77 million tons in the same period in 2023. Conab estimates that Brazil is likely to ship 36 million tons between February/24 and January/25, downing 34% compared to 2023/24.

Corn quotations moved up 0.3% from January 2-9 at the port of Paranaguá (PR) and 3.8% in Santos (SP). Dollar quotations decreased 1.8% against Real in the same comparison, closing at BRL 6.053 on Jan. 9.

CROPS – Up to Jan. 5, the harvesting of the summer crop had reached 1.1% of the area in Brazil, according to data from Conab.

 

SOYBEAN/CEPEA: Harvesting starts in Brazil; prices drop

Producers are optimistic and have started to harvest the 2024/25 soy crop in many areas in Brazil – it is worth noting that the output may hit a record. As a result, prices decreased, but the downward trend was limited by indications of smaller supply in Argentina and uncertainties regarding the US dollar and the position of the new government in the United States towards import and export taxes. In general, Cepea researchers identified that the liquidity is higher in the spot market.

Players surveyed by Cepea say that first soy crops have been harvested in the north of Mato Grosso, in the west of Bahia and in the west of Paraná. Crops in Cerrado region have presented excellent productivity, since many areas are irrigated. However, the productivity is slightly lower than expected in the west of PR.

PRICES – The ESALQ/BM&FBovespa Index (Paranaguá) dropped 1.3% from December 30, 2024, to January 9, 2025, closing at BRL 137.53 per 60-kg bag yesterday. The CEPEA/ESALQ Index (Paraná) moved down 2.6% in the same comparison, to close at BRL 131.19 per 60-kg bag on Jan. 9.

On the average of the regions by Cepea, soybean prices decreased 4.2% from Dec. 30 to Jan. 9 in the over-the-counter market (paid to farmers) and 3.3% in the wholesale market (deals between processors).

BYPRODUCTS – On the average of the regions surveyed by Cepea, soymeal prices dropped 0.2% between Dec. 30 and Jan. 9. The Brazilian value of soy oil downed 1.2%, at 6,911.78 BRL per ton (in São Paulo city with 12% ICMS) on Jan. 9.

 

Ukraine 2025 Grain Harvest to reach 55-65M Tons: UkrAgroConsult

Ukraine’s 2025 grain harvest is expected to reach 55-65 million tons, country’s UkrAgroConsult lobby group chief Sergey Feofilov says on website.

  • That would by a slight increase from 54.3m tons last year
  • Oilseeds harvest will also exceed last year’s, at 24 million tons: UkrAgroConsult
  • Grain exports are seen around 40-50m tons
  • “The focus in trade will shift to North Africa, Asia and the Middle East, where demand for grains and oilseeds is growing, and Ukraine is able to respond to these challenges”: Feofilov

 

APK-Inform increases Ukraine 2024/25 grain crop and export forecasts

Analyst APK-Inform has increased its Ukraine 2024 grain harvest forecast to 53.62 million metric tons from its previous projection of 53.4 million tons, the consultancy said on Monday.

The consultancy also increased its Ukraine 2024/25 July-June grain export forecast to 37.79 million tons from 37.3 million tons, largely because of higher than expected corn exports.

 

Analyst cuts itrs 2024/25 Ukraine sunseed and sunoil output and export forecasts

Analyst APK-Inform has made a downward revision to its forecast for the Ukraine 2024/25 sunflower seed harvest to 13.55 million metric tons from 13.8 million tons, it said on Monday.

APK-Inform also cut its projection for Ukraine’s 2024/25 sunflower oil output to 5.83 million tons from 5.92 million tons and sunoil export outlook to 5.48 million tons from 5.55 million tons.

Ukraine is a major global sunoil producer and exporter.

 

Brazil’s ‘soy moratorium’ faces test as Supreme Court ruling looms

The Brazilian Supreme Court is ready to rule on a request challenging a state law that ends tax breaks for grain traders banning soy purchases from deforested areas of the Amazon rainforest after a cut-off date.

The legislation was passed by the country’s top soy-producing state Mato Grosso but was prevented by Justice Flavio Dino from going into effect on Jan. 1 until a final decision is made.

The top court will rule on the matter between Feb 14-21, according to a notice released on Friday.

The voluntary pact among major grain traders, known as soy moratorium, bans the purchase of soy from deforested areas of the Amazon rainforest after 2008. Though it is praised by conservationists, it has been under growing pressure.

On Friday, Mato Grosso farmer lobby Aprosoja-MT, which is not a party to the Supreme Court proceedings, said it would request admission as “amicus curiae” to offer information relevant for the case.

In December, the farmer group asked Brazil’s antitrust agency CADE to investigate soy moratorium signatories, claiming they behave as a “purchasing cartel to practice a collective boycott… against soy farmers.”

Soy lobby group Abiove dismissed such a claim, saying the moratorium strengthens Brazilian agriculture.

Abiove said it defends the soy moratorium while “striving to balance the demands of both farmers and consumers, including updates to the current model to ensure its effectiveness.”

However, it conceded state lawmakers have pushed legislation “that significantly harm the signatories of the Soy Moratorium.”

Under Brazil’s forestry rules, Amazon landowners can clear up to 20% of their property. But while some farmers are still eligible to suppress vegetation, they feel constrained by the moratorium.

Last month, it emerged grain traders could loosen the moratorium by distinguishing between individual soy fields, letting growers sell to exporters from one part of a farm while planting soy on newly deforested areas nearby.

 

US to release clean fuel tax credit model that limits ethanol producers’ credit access, sources say

The U.S. is expected to release by next week a climate model for clean fuel tax credits that will sharply reduce the ability of ethanol producers to access subsidies for production of sustainable aviation fuel, three sources familiar with the matter told Reuters.

The exclusion of climate-smart agricultural practices, which the biofuel industry were hoping to rely on, represents a reversal from the last update of the climate model. U.S. Treasury is expected to issue a notice for proposed rulemaking on the broader program, known as 45Z, later on Friday, leaving further decisions on the plan to President-elect Donald Trump’s administration.

The updated climate model would also limit the pathways for credits for used cooking oil imports, two of the sources said. Both used cooking oil and ethanol can be used in production of SAF, which is made from non-petroleum feedstocks and has a smaller carbon footprint than traditional jet fuel.

President Joe Biden has planned to generate 3 billion gallons in production of sustainable SAF by 2030. Air travel contributes around 2.5% of global greenhouse gas emissions, making it a big target in the fight against climate change.

The Biden administration previously updated the climate model, called the GREET model, last year for a stopgap tax credit under the clean fuel program that expired on Jan 1.

The new update will likely anger ethanol producers who want access to the credits, as SAF production can be lucrative for companies that have access to subsidies but is expensive to make without credits.

Climate-friendly farming practices include not tilling the soil, planting cover crops and using higher-efficiency fertilizers.

As the Biden administration is leaving further decisions to Trump’s administration, industry investment plans will likely be delayed as well.

CBOT soyoil futures traded up more than 6% on Friday after Reuters reported on the recent developments around the short-term tax credit guidance and climate model. “Whatever he (Biden) has in mind, I think we are factoring it in today,” said Jack Scoville, vice president at the Price Futures Group.

 

U.S. Gulf UAN Nitrogen Fertilizer Price Rises 5.15%

Nitrogen fertilizer, represented by Urea Ammonium Nitrate (UAN) on the U.S. Gulf at NOLA, rose 5.15% to $255 per short ton in the week ended Jan. 10, according to Green Markets data compiled by Bloomberg Intelligence.

  • UAN U.S. Gulf NOLA rose 9.68% during the last month and was up 21.4% during the last 3 months
  • Major UAN nitrogen benchmark prices were mixed
  • Shares of CF Industries Holdings Inc. and Nutrien Ltd. were up, while CVR Partners LP was down in the latest week
  • Major Urea nitrogen benchmark prices were mixed
  • Major Ammonia nitrogen benchmark prices were unchanged
  • Natural gas, which drives producer costs, has increased 19% during the last week and was up 34% during the last month
  • The price of corn, a driver of fertilizer purchases, increased 3.9% during the last week and was up 4.3% during the last month

 

Ammonia, Urea Prices Firm as India Prepares for New Tender

Corn Belt reference prices for ammonia strengthened in the week of Jan. 6-10 for prompt and spring prepay offers after brisk year-end business, while urea prices jumped at New Orleans and inland amid firming international prices and expectations of another India tender call. Potash softened, however, with Nutrien launching a winter fill program on Jan. 10.

 

Brazil Fertilizer Prices Stable-to-Stronger Amid Seasonal Lull

Urea prices were up in Brazil this week as the industry awaits another India tender. Phosphates and ammonium sulfate prices were stable, while potash firmed slightly in Brazil as negotiations continue for 2025 supply amid favorable barter ratios.

 

US Beef Production Up 16.6% This Week, Pork Rises: USDA

US federally inspected beef production rises to 512m pounds for the week ending Jan. 11 from 439m in the previous week, according to USDA estimates published on the agency’s website.

  • Cattle slaughter up 16.4% from a week ago to 589m head
  • Pork production up 12.7% from a week ago, hog slaughter rises 12.6%
  • For the year, beef production is 17.6% below last year’s level at this time, and pork is 14.1% below

 

 

 

 

 

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