Global Ag News for May 24.24

TOP HEADLINES

Bayer CEO Calls Roundup Claims a Risk to World Food Security

• Bayer must now spend more on lawsuits than R&D, CEO says
• Lawsuits are ‘existential’ issue for firm, CEO Anderson says

Bayer AG Chief Executive Officer Bill Anderson said the onslaught of “frivolous” lawsuits against the chemical conglomerate over its widely used weedkiller Roundup threatens the US farmer and global food security.

“Glyphosate is an essential part of modern farming,” Anderson said in a speech in Chicago on Thursday, referring to Roundup’s key ingredient.

The legal woes, which have led Bayer to set aside $16 billion to resolve the suits, are an “existential” issue for the company and its ability to innovate for farmers, the CEO said. That puts at risk the progress that will be needed to feed 2 billion more people by mid-century with less water and land, Anderson said.

Bayer inherited the roundup lawsuits through its 2018 purchase of agriculture behemoth Monsanto for $63 billion. The company is considering whether to use a controversial legal maneuver, dubbed the Texas Two-Step bankruptcy, in an attempt to settle tens of thousands of US lawsuits claiming Roundup causes cancer, people familiar with the company’s thinking told Bloomberg in March.

Bayer has vigorously defended its claim that glyphosate and glyphosate-based formulations are safe.

FUTURES & WEATHER

Wheat prices overnight are up 1 1/2 in SRW, up 8 1/4 in HRW, up 5 1/4 in HRS; Corn is up 2; Soybeans up 1 3/4; Soymeal up $1.90; Soyoil up 0.08.

For the week so far wheat prices are up 48 1/4 in SRW, up 57 1/4 in HRW, up 37 3/4 in HRS; Corn is up 13 1/2; Soybeans up 13; Soymeal up $9.90; Soyoil unchanged.

For the month to date wheat prices are up 96 1/4 in SRW, up 83 3/4 in HRW, up 45 in HRS; Corn is up 19 1/4; Soybeans up 78; Soymeal up $26.70; Soyoil up 2.26.

Year-To-Date nearby futures are up 11.4% in SRW, up 12.0% in HRW, up 3.6% in HRS; Corn is down 1.1%; Soybeans down 4.1%; Soymeal down 1.9%; Soyoil down 5.4%.

Chinese Ag futures (JUL 24) Soybeans up 8 yuan; Soymeal up 11; Soyoil unchanged; Palm oil up 20; Corn down 5 — Malaysian Palm is down 8.  Malaysian palm oil prices overnight were down 8 ringgit (-0.21%) at 3886.

Markets finished last week with wheat prices up 48 1/4 in SRW, up 57 1/4 in HRW, up 37 3/4 in HRS; Corn is up 13 1/2; Soybeans up 13; Soymeal up $9.90; Soyoil unchanged.

There were no changes in registrations. Registration total: 1,479 SRW Wheat contracts; 39 Oats; 747 Corn; 469 Soybeans; 2,589 Soyoil; 85 Soymeal; 0 HRW Wheat. Preliminary changes in futures Open Interest as of May 23 were: SRW Wheat up 3,271 contracts, HRW Wheat up 6,816, Corn up 2,428, Soybeans up 5,941, Soymeal up 4,694, Soyoil up 3,797.

 

Northern Plains: A couple more storm systems will move through the region through Monday. Some heavy rain may develop. Cooler temperatures will stay in place through Monday, and may cause some snow to mix in early Friday across North Dakota. Cold may also produce some limited frosts that will not help with germinating crops.

Central/Southern Plains: A front across the south and more systems moving through will keep the region active through Sunday, causing severe weather and areas of heavy rain over portions of the region. Southwestern areas that continue to deal with drought are not forecast to see a lot of heavy rain, though thunderstorms that move through could bless limited areas with heavier amounts. Temperatures will fluctuate with fronts moving through, but in general will be cooler across the northwest and warmer across the south. Temperatures will be milder next week. A system moving into the region in the middle of next week could make for some more active weather going into the weekend.

Midwest: Additional systems will move through Friday into Saturday, with another Sunday through possibly Tuesday. Only limited areas are going to be lucky enough to be dry, an unusual statement as we head into summer. Additional planting windows will continue to be short, though producers have been taking advantage of their limited opportunities. After a few dry days next week, another system may come through late next week and weekend.

Delta: A front settled in the northern portions of the region for the next few days will be active with thunderstorms, causing heavy rain and severe weather potential. Additional storm systems may go through this weekend and early next week that could get more of the region active as well.

Canadian Prairies: The storm track is farther south, but showers will still sneak into the boundaries of the region across the east on Friday and across the south this weekend into next week. A larger storm system is likely to move through in the middle of next week with more scattered showers. Any rain will continue to make planting progress slower, but also help to ease drought conditions.

Brazil: A front in southern Brazil continues with more bouts of heavy rain that will make flooding conditions worse again. That front will shift northward for Friday and the weekend, where showers will get into southern safrinha corn growing areas, favorable for any crop it rains on.

Argentina: Cold and dry conditions continue into next week, though northeastern areas will see some showers with a front on Thursday. The cold is producing more frosts, unfavorable for winter wheat planting and establishment. Drier weather will increase the remaining corn and soybean harvest.

 

The player sheet for 5/23 had funds: net sellers of 2,000 contracts of SRW wheat, buyers of 4,000 corn, sellers of 4,000 soybeans, sellers of 1,000 soymeal, and sellers of 3,000 soyoil.

 

TENDERS

• CORN PURCHASE: South Korea’s Major Feedmill Group (MFG) has purchased an estimated 271,000 metric tons of animal feed corn expected to be sourced mainly from South America or South Africa in an international tender on Thursday

PENDING TENDERS

• CORN TENDER: Leading South Korean feedmaker Nonghyup Feed Inc. (NOFI) has issued an international tender to purchase up to 138,000 metric tons of animal feed corn
• WHEAT TENDER: The Taiwan Flour Millers’ Association has issued an international tender to purchase an estimated 96,850 metric tons of grade 1 milling wheat to be sourced from the United States
• WHEAT TENDER: Jordan’s state grain buyer has issued an international tender to buy up to 120,000 metric tons of milling wheat which can be sourced from optional origins.

 

 

 

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 May 16, according to data on the USDA’s website.

• Top buyer of soybeans: Unknown Buyers with 131k tons
• Top buyer of corn: Mexico with 636k tons
• Top buyer of wheat: Mexico with 129k tons

 

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 May 16, according to data on the USDA’s website.

• Mexico bought 10.3k tons of the 26.3k tons of pork sold in the week
• China led in beef purchases

 

Argentina Wheat Heartland Seen Yielding 41% More This Season Y/y

Argentina’s bread-basket of southern-central Buenos Aires and La Pampa provinces are forecast to produce 41% more in the 2024-25 wheat season than in 2023-24, the Bahia Blanca Grain Exchange, which covers the region, said in a presentation.

• Regional production is seen reaching 4.7m metric tons as acreage expands 7% y/y thanks to improved soil moisture vs. last year, and as the forecast for good weather puts yields on track to rise 11% y/y, said bourse analyst Gabriel Abregos
• Argentine wheat farmers are starting the season with a strong outlook, as there are good water reserves on fields, and prices of the grain are also rising while fertilizer costs are falling: Abregos
• NOTE: Argentine wheat is mainly planted in June/July and mainly harvested in Nov./Dec.

 

Argentine Soybean, Corn Estimates May 23: Exchange

The Buenos Aires Grain Exchange releases weekly report on website.

• Corn harvest at 28.2% complete vs 25.4% in the previous week
• Soybean harvest at 77.9% complete vs 63.7% in the previous week

 

Southern Brazil soy harvesting below historic levels amid rains, Emater says

The occurrence of rain was less frequent and accumulated rainfall was low in Rio Grande do Sul state, allowing farmers in many regions to resume harvesting soy, crop agency Emater said on Thursday.

Soy farmers in Brazil’s southernmost state, where rain and flooding have disrupted field work for weeks, have now harvested 91% of their soy area, up from 85% last Thursday and below the historical average of 97% for the period, Emater said in its weekly report.

 

Persistent Brazil rains, floods delay inspection of affected food silos

The inspection of food silos hit by floods in southern Brazil can only commence after waters recede, representatives of Brazil’s leading silo manufacturer Kepler Weber told Reuters on Thursday.

The deadly floods that began in late April hit silos and warehouses at the end of the soy, corn and rice harvesting season, meaning potentially full or nearly full bins in Rio Grande do Sul.

There is no official data on how many grain silos and warehouses were flooded in Brazil’s southernmost state, home to 26% of the nation’s food storage facilities, said Kepler Weber’s Fabiano Schneider, industrial and product director.

The impact of floods on food storage units could lead to steep losses for farmers and companies, affect exports and spur domestic inflation.

Some 10 Kepler Weber clients have requested a technical evaluation of their flooded silos, which require expert attention.

Stored grains in flooded silos can produce flammable gases that cause explosions, though no such incidents have been reported yet, Schneider said. In addition to explosions, gases produced by decomposing grains pose a direct risk to people, who can faint from inhaling them and eventually die, Kepler’s technicians said.

Unprecedented floods in southern Brazil submerged entire towns, killed livestock, compromised critical infrastructure, and disrupted grain harvesting.

At the silos, all electricity had to be shut off, compromising ventilation of stored grains and potentially increasing product and structural losses. A 4% rise in humidity levels, irrespective of the grain, creates “exponential” pressure inside the bins, risking their very structure, Kepler representatives said.

Rio Grande do Sul has 4,800 storage units, more than any other Brazilian state, Kepler said citing data from national crop agency Conab.

Kepler’s best-selling silo in Brazil, with a 21-meter (69-foot) diameter and about 20 meters of height, can store 6,000 metric tons of soybeans, its representatives said.

 

IGC Cuts Global Grain Stockpile Est.; Russia Wheat Crop Lowered

World grain stockpiles at the end of the 2024-25 season are now seen at 580m tons, down from an April estimate of 592 million tons, the International Grains Council said in a report. It lowered its Russian wheat crop outlook.

• The forecast for global ending stockpiles compares with a level of 588m tons for the 2023-24 season
  • The production estimate was lowered on smaller corn output in Argentina and sub-Saharan Africa and lower wheat production in Russia, Ukraine and the US
  • Russian wheat output now seen at 85.5m tons in 2024-25, down from a previous estimate of 90.4m tons
• Still, the global wheat stockpile estimate was little changed, as was rice
• Corn stockpiles estimate was lowered to 281m tons from 291m tons, and the production outlook was also cut
• Soybean stockpile projection was raised to 78m tons, from 75m tons

 

German Grain-Output Estimate Raised Slightly to 41.8m Tons: DRV

Germany’s 2024 grains harvest is estimated at 41.8m tons, up slightly from last month’s forecast, agricultural cooperatives group DRV said in a report.

• Estimates include:
  • Wheat at 20.3m tons
  • Barley at 11.2m tons
  • Corn at 4.5m tons
• NOTE: All of the above estimates were raised from the month before
• Says rain has damaged crops in some areas, though it shouldn’t be significant, and mild temperatures and persistent wind dried soil in some places

 

Conab Reports Lower Freight Rates In Brazil

Shipments of agricultural goods from Brazil are seeing declining transportation costs, due in large part to slower sales of soybeans and corn on the export market, says Brazilian agricultural agency Conab in a note. Also pushing prices lower is the large amount of freight suppliers operating in the country, this while fuel costs are stable, the agency says. While these situations are expected to stay in place in many areas going forward, some states like Mato Grosso and Mato Grosso do Sul could see a reversal of falling prices for freight in the coming months, says Thomé Guth of Conab. The agency adds that China was the biggest purchaser of Brazilian soybean exports in April, worth $4.29 billion

 

Potential Rail Strike Could Impact U.S. Ag Industry

Agriculture in the U.S. could feel the impact if Canadian rail workers move forward with a strike, says the USDA. In its weekly Grain Transportation Report, the USDA says Canada was the destination for $28.2 billion of agricultural exports in 2023, making it one of the top destinations for U.S. agricultural goods. “If an outage occurs, it would halt rail movements in Canada and could significantly impact U.S. agricultural trade, producers, and consumers,” says the USDA. Canada is the top destination for U.S. ethanol exports, and a major destination for products like soybean meal and rice. Canadian rail operators were set to begin striking on May 22, but have delayed that start due to government intervention.

 

Moscow Exchange Plans to Launch Soybean Futures in 2024: IFX

Moscow Exchange plans to start trading futures contracts on soybeans in 2H of 2024, Interfax reports, citing Evgeny Burtsev, head of exchange’s department.

Moscow Exchange is also working on futures on sunflower and sunflower oil

 

Argentina Officials Head to China to Tie Up Corn Export Deal: LN

Agriculture Undersecretary Fernando Vilella willl travel to China in the coming days to complete final customs steps needed to open the Chinese market to Argentine corn, La Nacion reported citing Vilella’s public comments at an event in Buenos Aires.

NOTE: Argentina said a year ago that it had agreed to phytosanitary requirements to export corn and sorghum to China

 

Atlantic Set to Spin Up as Many as 25 Storms This Year: NOAA

US forecasters predict 17 to 25 named storms during the six-month Atlantic hurricane season that starts June 1, with 8 to 13 becoming hurricanes and 4 to 7 major systems with winds of 111 mph or more, the National Oceanic and Atmospheric Administration said.

• Near-record warm waters in the Atlantic will fuel the systems, while La Nina conditions in the Pacific will limit storm-stopping wind shear across the Caribbean
• An average Atlantic season produces 14 named storms, which have winds of 39 mph (63 kilometers) or more

 

Drought Continues to Ease in US Corn and Soybean Regions: USDA

The followinge shows the percent of US agricultural production within an area that experienced drought for the week ending May 21, according to the USDA’s weekly drought report.

• Corn area experiencing moderate to intense drought fell to 10% vs 12% in the previous week
• Has dropped 14 percentage points since early April
• Soybean area in drought declined by 2 percentage points to 7%

 

US Miss. River Grain Shipments Rise, Barge Rates Decline: USDA

Barge shipments down the Mississippi river increased to 710k tons in the week ending May 18 from 490k tons the previous week, according to the USDA’s weekly grain transportation report.

• Barge shipments of corn rose 26% from the previous week
• Barge shipments of wheat fell 56% from the previous week
• Soybean shipments up 132.2% w/w
• St. Louis barge rates were $9.22 per short ton, a decline of $0.64 from the previous week

 

 

Interested in more futures markets?  Explore our Market Dashboards here.