Global Ag News for May 28.24

TOP HEADLINES

Cold Argentina weather seen slowing leafhopper outbreak in corn crop

Cold temperatures across much of Argentina’s farming heartland over the weekend will help slow a severe leafhopper insect outbreak that has damaged the country’s corn crop, the Rosario grains exchange said on Monday.

Argentina is the world’s third-largest corn exporter, but the current crop has suffered from an explosion in the leafhopper population. The insects spread disease and eat sap, stunting a plant’s growth and turning leaves yellow.

The leafhopper outbreak has resulted in the Rosario exchange cutting its forecast for the current corn harvest by 20% since the beginning of the season to 47.5 million metric tons.

“Low temperatures spread not only in the center of the country but also to the north,” the exchange said in a report. “In these areas, temperatures below 4 degrees Celsius (39.2 degrees Fahrenheit) were recorded, with frost in several places.”

The leafhoppers, whose population had surged due to a dearth of freezes during the previous corn cycle, do not tolerate temperatures below 4 C.

“Below-zero temperatures and frost help reduce the presence of this pest,” the exchange said.

As of Thursday, farmers had harvested 28.2% of the corn planted area for the 2023/24 marketing year, according to the Buenos Aires grains exchange.

FUTURES & WEATHER

Wheat prices overnight are up 9 3/4 in SRW, up 13 1/4 in HRW, up 9 3/4 in HRS; Corn is up 2 1/4; Soybeans down 4 1/4; Soymeal down $1.30; Soyoil up 0.41.

Markets finished last week with wheat prices up 18 1/4 in SRW, up 37 3/4 in HRW, up 23 1/4 in HRS; Corn is up 6 1/2; Soybeans down 4 1/4; Soymeal up $11.10; Soyoil down 0.96.

For the month to date wheat prices are up 102 3/4 in SRW, up 99 1/4 in HRW, up 58 1/4 in HRS; Corn is up 20 1/4; Soybeans up 80 3/4; Soymeal up $33.30; Soyoil up 2.35.

Year-To-Date nearby futures are up 12.6% in SRW, up 14.4% in HRW, up 5.4% in HRS; Corn is down 0.9%; Soybeans down 3.8%; Soymeal down 0.2%; Soyoil down 5.2%.

Chinese Ag futures (JUL 24) Soybeans down 10 yuan; Soymeal down 10; Soyoil up 98; Palm oil up 116; Corn down 2 — Malaysian Palm is up 92. Malaysian palm oil prices overnight were up 92 ringgit (+2.38%) at 3962.

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 24 were: SRW Wheat up 2,918 contracts, HRW Wheat up 7,207, Corn down 1,363, Soybeans up 7,867, Soymeal up 8,962, Soyoil up 8,617.

Brazil: Brazil rainfall during the weekend was greatest in the south from southern Minas Gerais, Sao Paulo and Mato Grosso do Sul to Parana. Temperatures were cool in the south and warm in the north. Brazil rainfall in the next week to ten days will occur mostly along the Atlantic coast leaving interior crop areas dry or mostly dry.

Argentina: Argentina weather during the weekend was mostly dry. Weekend freezes were widespread with many hard freezes from southern Santiago del Estero and to Buenos Aires and La Pampa. Argentina weather will continue to include limited rainfall for a while, although some rain is expected in far southern and eastern most crop areas and temperatures will continue a little cooler than usual.

US: U.S. holiday weekend rain was abundant in the central Midwest and heavy in the Tennessee River Basin and areas northeast to southeastern Missouri. A favorable mix of rain and sunshine is expected in the eastern U.S. Midwest, Delta and Tennessee River Basin. Net drying may impact the southeastern states through the coming ten days, despite some showers. U.S. temperatures will be cooler than usual this week in the Plains and Midwest.

The player sheet for 5/24 had funds: net buyers of 500 contracts of SRW wheat, buyers of 1,000 corn, buyers of 2,500 soybeans, and buyers of 3,500 soymeal..

TENDERS

  • CORN PURCHASE: Leading South Korean animal feed maker Nonghyup Feed Inc. (NOFI) bought an estimated 137,000 metric tons of animal feed corn in an international tender on Friday, European traders said. Traders said rising wheat prices due to concerns of weather damage in top exporter Russia have generated demand for cheaper corn. South Korea’s Major Feedmill Group (MFG) purchased 271,000 tons of corn on Thursday.
  • WHEAT TENDER: The Taiwan Flour Millers’ Association issued an international tender to purchase an estimated 96,850 metric tons of grade 1 milling wheat to be sourced from the United States.
  • CORN PURCHASE: South Korea’s Feed Leaders Committee (FLC) purchased around 65,000 metric tons of animal feed corn expected to be sourced from South America or South Africa in a private deal on Friday without issuing an international tender.

PENDING TENDERS

  • CORN TENDER: South Korea’s Korea Feed Association (KFA) has issued an international tender to purchase up to 138,000 metric tons of animal feed corn to be sourced from South America or South Africa only
  • WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy up to 120,000 metric tons of milling wheat which can be sourced from optional origins.

 

Map of North & South America

 

TODAY

Brazil 2023/24 soybean crop view cut on sharp drop in average yields – Datagro

Brazilian soybean production will total 147.57 million metric tons in the 2023/2024 season, smaller than a previously forecast 147.96 million tons, according to a new estimate by agribusiness consultancy Datagro on Friday.

The consultancy cited a 10.8% drop in national yields for the reduction of its soybean production projection.

 

Brazil’s 2023/24 Total Corn Output Seen At 118.4 Million Tns – AgRural

  • BRAZIL’S CENTER-SOUTH 2024 SECOND CORN HARVEST HITS 2% OF PLANTED AREA AS OF LAST THURSDAY VS 0.8% A YEAR AGO
  • BRAZIL’S 2023/24 TOTAL CORN OUTPUT SEEN AT 118.4 MILLION TNS

 

Brazil’s 2023/24 Corn Output Seen At 123.31 Million Tns – Safras

  • BRAZIL’S TOTAL 2023/24 CORN OUTPUT SEEN AT 123.31 MILLION TNS VERSUS 126.13 MILLION TNS IN PREVIOUS FORECAST
  • BRAZIL’S 2024 SECOND CORN CROP SEEN AT 83.64 MILLION TNS VERSUS 86.63 MILLION TNS IN PREVIOUS FORECAST
  • BRAZIL’S CENTER-SOUTH 2023/24 FIRST CORN CROP SEEN AT 25.59 MILLION TNS, STABLE FROM PREVIOUS FORECAST

 

Brazil harvests ‘safrinha’ corn but spot trades linger – Cepea

Spot trades with Brazil’s second corn have lagged as harvesting begins and market participants weigh the real impact of a drought on the outlook for the crop, according to an analysis by Cepea, the University of Sao Paulo’s agriculture think-tank.

An estimated 0.4% of Brazil’s second corn has been harvested, Cepea said on Friday, citing data from national crop agency Conab.

Second corn represents 70%-80% of Brazil’s overall production in a given season and is mainly exported in the second half, competing with U.S. corn on global markets.

“For now, buyers have just been following the market and prioritizing the use of stocks,” Cepea said. “Many are waiting the advance of the harvest to lower corn prices so that they can acquire new batches.”

Two agribusiness consultancies on Friday cut output estimates for Brazil’s second corn due to drought. National second corn production will total between 83.6 million metric tons and 90.5 million metric tons, the forecasters say.

According to Cepea, the ESALQ/BM&FBovespa indicator showed a 1.6% rise for internal corn prices in the week ending May 23, to 59.77 reais ($11.55) per 60-kilogram bag in the Campinas region, partly driven by a strengthening of the dollar.

However, the average price of corn negotiated at the Port of Paranagua fell 0.4% in the period, Cepea data showed. Brazilian corn shipments have lagged as traders prioritize soybean shipments.

This week, Cepea said soybean prices rose domestically driven by Chicago, higher export premiums and at the exchange rate. This boosted trading values ​​at ports of Santos and Paranagua, Brazil’s main soybean export hubs, it added.

Corn exports, on the other hand, were limited to 162,290 tons in the first 12 working days of May, against 384,880 tons in May 2023, Cepea said, citing official trade data.

 

SOYBEAN/CEPEA: Prices move up and return to the highest levels in the year

Soybean prices moved up in the domestic market this week, boosted by the international valuation, the export premiums increases and also by the dollar. As a result, the values at the port of Santos (SP) and Paranaguá (PR), main export ports for soybean in Brazil, returned to the highest levels of this year.

The ESALQ/BM&FBovespa Index (Paranaguá) upped 3.9% from May 16-23, closing at BRL 140.20 per 60-kg bag on May 23, the highest level since January 2 this year. At the port of Santos, the increase was 2% in the same period, to BRL 140.18 per 60-kg bag on Thursday, the highest since January 4. The CEPEA/ESALQ Index (Paraná) increased 3.8%, to close at BRL 134.86 per 60-kg bag, the highest value since Jan 2.

BYPRODUCTS – The demand both in domestic and international markets is high. The recente strike in Argentina (the biggest global exporter of soybean meal and soybean oil) directed importers to Brazil and United States, boosting prices of these products in the domestic market.

CROPS – According to Conab, Brazil had harvested 97% of the 2023/24 area up to May 20 – only the states of Maranhão and Rio Grande do Sul are still harvesting, but activities are close to the end.

 

CORN/CEPEA: Harvest begins to gain pace in some regions, but prices keep firm

The harvest of the second crop of corn is gaining pace in some regions, especially in Mato Grosso do Sul and Mato Grosso. Even thus, producers keep limiting the supply in the spot market, focused on the possible impacts of the warm and dry weather on the production.

Sellers indicate that if the next official estimates show decrease in the Brazilian harvest, buyers may boost the demand, since the stocks can reduce. At the moment, purchasers have their eyes on the market, prioritizing the consumption of stocks. Many of them are betting on corn devaluations with the advance of harvesting activities.

PRICES – Corn prices kept firm for the third week in a row. From May 16-23, the ESALQ/BM&FBovespa Index (Campinas, SP) moved up 1.6%, closing at BRL 59.77 per 60-kilo bag on May 23. On the average of the regions surveyed by Cepea, corn values increased 0.3% in the wholesale market (deals between processors) and 0.9% in the over-the-counter market (paid to farmers) over the last seven days.

CROPS – Conab says that, up to May 19, the harvest of the second crop reached 0.4% of the total; in the same period 2023, activities were at 0.2%. As for the summer crop, harvest hit 72.4% of the total, according to a report released on May 19.

EXPORTS – Brazilian corn exports remain moving at a slow pace, once the priority has been the shipments of soybean. In 12 days working days of this month, exports totaled only 162.29 thousand tons, below the 384.88 thousand tons verified in May/23, according to Secex data.

 

WHEAT/CEPEA: Concerns about the global supply boost prices

Wheat prices moved up sharply in this late May. In the international market, players are focused on the unfavorable weather – droughts and frosts – in important producing regions of Russia, the highest exporter of wheat in the world. This scenario brings concerns about the global supply of the cereal.

International increases boosted wheat values in Brazil. Producers kept firm especially for high-quality product (PH>78), betting on higher quotations. It is important to remember that in this offseason period, stocks are low.

According to data from Cepea, between May 17 and 24, the prices paid to wheat farmers (over-the-counter market) increased 4.9% in Paraná, 2.5% in Santa Catarina and 1.3% in Rio Grande do Sul. In the wholesale market (deals between processors), values upped 5.3% in Paraná, 4% in Rio Grande do Sul, 1.1% in São Paulo and 1% in Santa Catarina. Dollar quotations increased 1.4% against Real, at BRL 5.173 on May 24.

BYPRODUCTS – Due to prices rises for wheat grains, wheat mills increased quotations of byproducts. From May 17-24, values of wheat bran in bags rose 0.34% and prices of the product in bulk moved up 0.56%.

EXPORTS – According to data from Secex, Brazil imported 403.1 thousand tons of wheat up to the third week of May, 42.2% up compared to that in May/23 (283.52 thousand tons). Exports totaled 55 thousand tons in the partial of this month, against 68.2 thousand tons in the same month of 2023.

 

Brazil C-S Winter Corn Harvest 2% Done as of May 23: AgRural

Compares with 0.4% a week earlier and 0.8% a year before, according to an emailed report from consulting firm AgRural.

  • Mato Grosso and Parana lead the works among Center-South states
  • Total 2023/24 Brazil corn output is seen at 118.4m tons, according to AgRural

 

Russia Not Planning to Revise 2024 Grain Harvest Forecast: IFX

Russian Agriculture Ministry isn’t yet planning to revise forecasts for grain harvest and exports this year, Minister Oksana Lut says, according to Interfax.

 

IKAR Lowers 2024 Russia Wheat Crop Outlook to 81.5M Tons

The outlook was cut from a prior forecast of 83.5m tons, IKAR general director Dmitry Rylko says by email.

  • There were bigger frost losses than expected across regions including Volgograd, and some areas are suffering from lack of rains

 

EU Crops Forecast Above 5-year Average Despite Bad Weather: MARS

European Union yield forecasts were slightly revised downward, but remain above the 5-year average, the EU’s Monitoring Agricultural Resources unit says Monday in a report.

  • The yield forecast for winter crops “further improved for Spain and Portugal, but was reduced for Italy and several countries of western Europe, as well as for Hungary, where the overall yield outlook remains positive”
  • Wet conditions in large areas in western Europe, as well as in Denmark, and northern Italy, “resulted in water logging, high pest pressure and/or delays to sowing, with potentially negative effects on crop yields”
  • “Abrupt cold spell in the second half of April severely impacted fruits and vineyards in several parts of Europe, but damage to annual crops is expected to have been limited”
  • In Russia, water deficit combined with cold spells “created unfavorable conditions for winter crops’ development, and caused delays to spring sowing”

 

Ukraine 2024 Grain, Oilseed Harvest Forecast Cut to 74.6M Tons

The outlook was cut from a prior forecast of 76.1m tons, according to the Ukrainian Grain Association.

  • Potential drop seen caused by a reduction in the sown area, unfavorable price conditions, relatively expensive export logistics and dry May period in east and south of the country, according to an UGA statement.
  • The harvest forecasts include:
    • 19.1m tons of wheat comparing to 22m tons in 2023
    • 4.6m tons of barley vs 5.8m tons in 2023
    • 25.5m tons of corn vs 29.6m tons last year
    • 13.7m tons of sunflower vs 14.2m tons last year
    • 5.5 m tons of soybean vs 4.9m last year
  • Potential exports of grain and oilseeds in the new season, which is due to start on July 1, 2024, may reach 43.5m tons — almost 10m tons less than in the current export season
  • NOTE: In 2023 the harvest amounted to 82.8 million tons of grain and oilseed crops

 

FGV Sees Palm Oil Prices Trading at 3,800-4,000 Rgt/Ton in 2024

Benchmark palm oil prices will likely trade between 3,800-4,000 ringgit ($810-$853) a ton this year, according to FGV Holdings Bhd., one of the world’s biggest growers.

Potential shift to La Niña in the latter part of the year could lead to production shortfalls, the company said in its 1Q report

 

US Cattle on Feed Fell to 11.55M Head on May 1

The feedlot herd fell 0.9% from a year ago, according to the USDA’s monthly report. Analysts were expecting a drop of 0.8%

  • Placements onto feedlots down 5.8% y/y to 1.656m head
  • Cattle marketed from feedlots increased 10.1% to 1.872m head

 

India still expects above average monsoon rains in a boost for agriculture

India is likely to receive above-average monsoon rains this year, the weather office said on Monday, retaining its April forecast and keeping alive the possibility of higher farm output and economic growth in Asia’s third-biggest economy.

This year’s monsoon rains are expected to be 106% of the long-term average, Mrutyunjay Mohapatra, director-general of the India Meteorological Department (IMD) told a virtual news conference.

The IMD defines average or normal rainfall as between 96% and 104% of a 50-year average of 87 cm (35 inches) for the four-month season beginning June.

The monsoon, critical for India’s nearly $3.5 trillion economy, delivers almost 70% of the rain needed to water crops and replenish reservoirs and aquifers.

Nearly half of India’s farmland, without any irrigation, depends on the June-September rains to grow a number of crops such as rice, corn, cotton, soybeans and sugar cane.

Plentiful rains could lift farm output and wider economic growth, helping to bring down food price inflation, which has remained above the central bank’s comfort level in recent months and prompted it to resist cutting lending rates.

 

US Beef Production Up 1.7% This Week, Pork Down: USDA

US federally inspected beef production rises to 516m pounds for the week ending May 25 from 507m in the previous week, according to USDA estimates published on the agency’s website.

  • Cattle slaughter up 1.5% from a week ago to 607m head
  • Pork production down 1.3% from a week ago, hog slaughter falls 1.2%
  • For the year, beef production is 2% below last year’s level at this time, and pork is 0.2% above

 

US Egg Production Fell 0.9% in April From Year Ago: USDA

The US produced 8.93b eggs in April vs 9.01b in the same period a year ago, according to a report from the USDA.

  • Output of table eggs fell 0.8% y/y to 7.68b
  • Hatching eggs down 1.1% to 1.26b

 

Brazil Rice Imports May Affect Next Season, Farmers Say

The federal government’s decision to import 1 million metric tons of rice could compromise the next harvest in 2024/25, Gedeão Pereira, head of the Agriculture Federation of Rio Grande do Sul state, told journalists on Monday.

  • Losses caused by massive floodings in recent weeks in the state are expected to exceed 3 billion reais; losses related to unharvested soybeans have not yet been accounted for due to continued rain, as well as damages to equipments and infrastructure, the federation’s chief economist, Antônio da Luz, said
    • At least 15,000 ha of soybeans have damaged grains, according to a survey of 540 producers in the state
  • 3 billion reais is the minimum requested by the federation in aid from the federal government
  • Federation requests debt renegotiation for 15 years, with a two-year grace period and an interest rate of 3% per year

 

 

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