Global Ag News for June 20.24

TOP HEADLINES

Biofuel, not China, to drive Brazil soy area advance – Abiove

Demand for biofuels has become increasingly important to maintain the growth of soybean plantings in Brazil at a time when China, the largest global importer of the oilseed, tries to reduce dependence on foreign supplies, Andre Nassar, head of Brazilian soybean crushers lobby Abiove, said on Wednesday.

“I don’t see the soybean area growing 1 million hectares annually (in Brazil) as happened in recent years to meet Chinese demand,” Nassar told journalists on the sidelines of an industry event.

Area growth is more likely to be linked with biofuels demand, he noted, adding China is expected to keep imports at 100 million tons per year from all origins.

China is the destination of most of raw soybeans produced in Brazil. The United States is also a large supplier to China, and competes directly with Brazil, the world’s largest exporter.

Even though Brazilian farmers’ margins are not currently so good because of a fall in global soy prices, Brazil should see some growth in planted area in the new 2024/2025 harvest, whose planting begins in mid-September, Nassar said.

The country’s production potential is high, Nassar added. This season, a drought in the center west and floods in the south of the nation spoiled part of this year’s soybean crop.

Nassar believes if Brazil gets favorable weather in the new season, total soybean output could reach an unprecedented 170 million tons, compared with the around 152 million tons Abiove says the country reaped this year.

 

FUTURES & WEATHER

Wheat prices overnight are down 5 1/4 in SRW, down 4 3/4 in HRW, down 4 3/4 in HRS; Corn is down 1 3/4; Soybeans down 1 1/4; Soymeal down $2.30; Soyoil up 0.27.

For the week so far wheat prices are down 34 3/4 in SRW, down 31 1/4 in HRW, down 30 1/2 in HRS; Corn is down 4 1/4; Soybeans down 19; Soymeal down $10.50; Soyoil up 0.73.

For the month to date wheat prices are down 105 3/4 in SRW, down 118 1/4 in HRW, down 114 1/4 in HRS; Corn is down 1; Soybeans down 53 3/4; Soymeal down $16.50; Soyoil down 1.35.

Year-To-Date nearby futures are down 8.2% in SRW, down 7.0% in HRW, down 13.4% in HRS; Corn is down 4.8%; Soybeans down 9.3%; Soymeal down 5.7%; Soyoil down 6.6%.

Chinese Ag futures (SEP 24) Soybeans up 7 yuan; Soymeal unchanged; Soyoil up 18; Palm oil up 36; Corn up 2 — Malaysian Palm is up 41. Malaysian palm oil prices overnight were up 41 ringgit (+1.05%) at 3961.

There were changes in registrations (-66 Soybeans). Registration total: 1,479 SRW Wheat contracts; 39 Oats; 747 Corn; 339 Soybeans; 2,589 Soyoil; 0 Soymeal; 0 HRW Wheat.

Preliminary changes in futures Open Interest as of June 18 were: SRW Wheat up 4,113 contracts, HRW Wheat up 1,620, Corn down 7,960, Soybeans down 1,880, Soymeal up 9,445, Soyoil down 1,835.

 

Northern Plains: Isolated to scattered showers through Saturday. Temperatures below normal Thursday, near normal Friday-Saturday. Outlook: Isolated to scattered showers Sunday-Tuesday. Mostly dry Wednesday-Thursday. Temperatures near normal Sunday-Thursday.

Central/Southern Plains: Isolated to scattered showers through Saturday. Temperatures below normal northwest and above normal southeast Thursday, near to above normal Friday-Saturday. Outlook: Isolated to scattered showers Sunday-Thursday. Temperatures near to above normal Sunday-Thursday.

Midwest: West: Isolated to scattered showers through Saturday, especially north. Temperatures near normal north and well above normal south Thursday, above to well above normal Friday-Saturday. East: Isolated to scattered showers through Saturday, mostly northwest. Temperatures above to well above normal through Saturday. Outlook: Isolated to scattered showers Sunday-Wednesday. Mostly dry Thursday. Temperatures above to well above normal Sunday, near to above normal Monday-Thursday.

Brazil: Scattered showers through Friday, mostly south. Mostly dry Saturday. Temperatures above to well above normal through Saturday. Mato Grosso, MGDS and southern Goias:  Dry through Saturday. Temperatures above to well above normal through Saturday.

Argentina: Cordoba, Santa Fe, Northern Buenos Aires: Isolated to scattered showers through Saturday. Temperatures near to above normal Thursday, above normal Friday-Saturday. La Pampa, Southern Buenos Aires:  Isolated to scattered showers through Saturday. Temperatures Thursday, above normal Friday-Saturday.

 

The player sheet for 6/18 had funds: net sellers of 4,000 contracts of SRW wheat, buyers of 10,000 corn, sellers of 7,000 soybeans, buyers of 3,000 soymeal, and buyers of 3,000 soyoil.

TENDERS

  • SOYMEAL PURCHASE: The Korea Feed Association (KFA) in South Korea purchased about 60,000 metric tons of soymeal in a private deal without issuing an international tender.
  • SOYMEAL SALE: South Korean importer group the Feed Leaders Committee (FLC) purchased an estimated 60,000 metric tons of soymeal from optional origins in an international tender on Tuesday
  • WHEAT PURCHASE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 84,667 metric tons of food-quality wheat from the United States, Canada and Australia in a regular tender that closed late Wednesday.
  • FEED WHEAT TENDER: A group of importers in Thailand has issued an international tender to purchase around 60,000 metric tons of animal feed wheat.
  • MILLING WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries is seeking to buy a total of 84,667 metric tons of food-quality wheat from the United States, Canada and Australia in a regular tender that will close on June 19.

 

Earth

 

TODAY

China May soy imports from US soar; Brazil arrivals drop for first time this year

China’s soybean imports from the U.S. accelerated in May with a 156% surge from a year earlier, data showed on Thursday, while supplies from Brazil shrank for the first time this year amid flooding disruption in the South American country.

The world’s biggest soybean buyer imported 1.27 million metric tons of the oilseed from the U.S. last month, compared with 494,103 tons in the same month a year earlier, showed data from the General Administration of Customs.

That was still far less than imports from Brazil at 8.8 million tons, which made up the majority of the 10.22 million tons of soybeans China imported in May. CNC-SOY-IMP

Sales of U.S. soybeans to China has been sluggish this year as traders take advantage of cheaper and plentiful Brazilian soybeans.

Still, May arrivals from Brazil dropped 19% from a year earlier.

Brazil’s soy harvest season that started around March is almost finished, that country’s national crop agency said last week. The agency slightly lowered Brazil’s soy production forecast after unprecedented rain in the southern part of the country damaged some of the crop.

For January-May, shipments from Brazil totalled 24.71 million tons, up 23% compared with the same period last year.

Total arrivals from the U.S. in the first five months of the year came to 10.85 million tons, down 34% on the prior year, the data showed.

China imported 212,492 tons of soybeans from Argentina in the five-month period, though the data showed no arrivals in May.

 

BRIEF-Brazil 2024 Domestic Soybean Crush View Kept At 54.5 Million Tns – Abiove

  • Brazil: Mars
  • “Field abandonment continues to be observed in several parts of the country. For Ukraine as a whole, there is a decrease in the area of winter cereals compared to last year”

 

India May Oilmeals Exports Fall to 302,280 Tons

India’s oilmeals exports fell to 302,280 tons in May from 465,156 tons in April, according to the Solvent Extractors’ Association of India.

  • Rapeseed meal exports fell to 133,263 tons from 230,810 tons in April
  • Soymeal exports fell to 144,706 tons from 199,803 tons in April
  • Castorseed meal exports fell to 23,000 tons from 34,387 tons in April

 

Ukraine 2024 crop rapeseed export prices seen rising, producers say

Export prices for Ukrainian rapeseed of 2024 harvest will rise to at least 500 euros ($536.50) per metric ton CPT by October from the current 425 euros, Ukraine’s largest agribusiness group Agrarian Council said late on Tuesday.

Ukraine is a major grower of rapeseed and traditionally exports a lion share of the harvest mostly to European consumers.

“In the longer term, the price should turn upwards. We can expect prices to return to at least 500 euros per ton in October and November,” the council said in a statement.

“For farmers who did not manage to lock in current prices, it may make sense to hold back sales until September-October to sell the rapeseed at a better price later,” it said.

Ukraine has already started harvesting the 2024 crop, which the Сouncil estimates could be up to 4.2 million ton, of which up to 600,000 tons could be processed domestically.

The agriculture ministry sees the 2024 rapeseed crop at around 4 million tons, while analyst APK-Inform expects the output at 4.3 million tons.

Ukraine harvested around 4.7 million tons of rapeseed in 2023 and the 2023/24 exports total 3.7 million tons, APK-Inform said.

 

Ukraine exports 49.3 mln T grain so far 2023/24, ministry says

Ukraine’s grain exports in the 2023/24 July-June marketing season rose to 49.3 million metric tons by June 19 from 47.5 million tons a year earlier, agriculture ministry data showed on Wednesday.

The total volume included 2.3 million tons sent abroad since the start of June, compared with 2.2 million tons in the same period in 2023.

Overall exports included 18.1 million tons of wheat, 28.2 million tons of corn and about 2.5 million tons of barley.

The government said the country had harvested about 81 million tons of grain and oilseeds in 2023, with a 2023/24 exportable surplus of about 50 million tons.

The ministry has said that the 2024 combined grain and oilseed crop could fall to 77 million tons, including 56 million tons of grain.

 

Sovecon: Russia’s grain production seen at 127.4 mln t in 2024

Russian consultancy Sovecon said on Tuesday it estimated Russian grain production in 2024 at 127.4 million tonnes against 144.9 million tonnes a year earlier.

 

China’s sow herd drops to 39.96 mln head

China’s sow herd stood at 39.96 mln head at the end of May, down 6.2% year on year, state broadcaster CCTV reported on Wednesday.

China had 39.86 million sows at the end of April, data from the Ministry of Agriculture and Rural Affairs previously showed.

 

São Martinho Is Considering New Corn Ethanol Plant, says CFO

São Martinho is considering the possibility of investing in a new corn ethanol unit with a production capacity of 500,000 tons per year, said financial director Felipe Vicchiato during an earnings call.

  • Final decision on the investment should be made at the end of the year or at the beginning of 2025
  • Low corn price allows for a “reasonable” capital return for the project, Vicchiato said
    • Drop in the commodity price offsets negative impact of falling prices of DDG, a byproduct of corn ethanol
  • São Martinho is investing in debottlenecking sugar cane mills
  • Sugar mix will increase in the next season
    • The group’s largest plant, the São Martinho unit, can reach a sugar mix of 70%

 

Michigan will pay farmers to help investigate bird flu outbreaks

Michigan will offer dairy operations with bird flu up to $28,000 to work with federal and state government agencies to investigate how the virus got onto their operations, Michigan Department of Agriculture and Rural Development Director Tim Boring said on Tuesday.

Federal and state officials are researching several aspects of how bird flu spreads, including the possibility of respiratory spread among animals and prior infection of farm workers, in an attempt to curb further infection among animals and humans.

The virus has been reported in 102 dairy herds across 12 states since late March, according to the U.S. Department of Agriculture. Three dairy farm workers have also contracted the virus.

Michigan’s agriculture department will provide the grant money to up to 20 farms from its emergency response funds, Boring said. The goal is to help with losses associated with sick animals and to cover the costs of farmers and their staff working with scientists, he added.

“There are some real-time economic struggles these farms are facing,” Boring said.

The funded farmers would need to work with the state agriculture department and USDA’s Animal and Plant Health Inspection Service’s Veterinary Services (APHIS) to complete epidemiological investigations on their farms.

 

India’s monsoon advances, set to bring relief from heatwave

India’s monsoon is advancing after stalling for more than a week and rains are set to cover central parts of the country in the next few days, bringing relief from the heatwave in the grain-growing northern plains, two senior weather officials said.

Summer rains, critical for economic growth in Asia’s third-largest economy, usually begin in the south around June 1 before spreading nationwide by July 8, allowing farmers to plant crops such as rice, cotton, soybeans, and sugarcane.

“Monsoon is reviving. It was stuck after covering most of Maharashtra, but by the weekend, it will enter Madhya Pradesh,” an official of the India Meteorological Department (IMD) told Reuters.

“Western and southern regions will receive heavy rains from the next week. Central parts would also start getting rains,” added the official, who spoke on condition of anonymity because they were not authorised to speak to the media.

The monsoon arrived nearly two days ahead of schedule in the western state of Maharashtra, home to the commercial capital of Mumbai, but its progress in central and eastern states of the country stalled for nearly a week.

 

LIVESTOCK SURVEY: US Cattle on Feed Placements Seen Down 1.3%

May placements onto feedlots seen falling y/y to 1.94m head, according to a Bloomberg survey of ten analysts.

  • Estimates range from -5% to +2.4% y/y change
  • Feedlot herd as of June 1 seen falling by 0.9% y/y to 11.49m head
  • Marketings seen rising 0.2% y/y

 

 

 

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