Global Ag News for Nov 18.24

TOP HEADLINES

China’s New Export Tax Rebate Policy May Hit Palm Oil Demand

China’s exports of used cooking oil could fall sharply following the government’s decision to end tax relief for outbound shipments, a move that’s likely to reduce the country’s demand for palm oil.

The Asian nation is the largest known exporter of UCO, with the US and the European Union featuring among its top buyers. Any significant disruption to the trade flow could push up prices of raw materials to produce biofuels.

The price advantage for China’s used cooking oil shipments would weaken as the tax rebate gets canceled, Citic Securities said in a report on Monday. Exports should fall from elevated levels, it said.

Beijing said in a statement late Friday that it will scrap export tax rebates for several metals and used cooking oil, which attracted a levy of 13%, from Dec. 1. It will also lower the concession for some refined oils, and solar and battery products.

China’s shipments of used cooking oil to the US hit a record pace this year as American biofuel producers snapped up the feedstock, which offers greater margins in the current structure for US subsidies to produce biodiesel. China shipped 2.12 million tons of UCO in the first nine months of this year, more than the total volume it exported in the whole of 2023, according to customs data.

Used cooking oil competes with soybean oil. A group that represents the biggest US soybean processors said in May that Chinese UCO was undercutting American crops used for biofuels.

 

FUTURES & WEATHER

Wheat prices overnight are up 3 1/4 in SRW, up 2 3/4 in HRW, up 2 3/4 in HRS; Corn is down 1/2; Soybeans down 5 1/4; Soymeal up $0.80; Soyoil down 0.56.

Markets finished last week with wheat prices down 23 1/4 in SRW, down 18 in HRW, down 18 1/4 in HRS; Corn is down 8; Soybeans down 28 3/4; Soymeal down $5.50; Soyoil down 3.30.

For the month to date wheat prices are down 33 in SRW, down 28 in HRW, down 34 1/4 in HRS; Corn is up 8 3/4; Soybeans down 1 1/4; Soymeal down $9.70; Soyoil down 0.14.

Year-To-Date nearby futures are down 14.1% in SRW, down 15.2% in HRW, down 20.3% in HRS; Corn is down 10.0%; Soybeans down 23.2%; Soymeal down 24.8%; Soyoil down 6.4%.

Chinese Ag futures (JAN 25) Soybeans down 24 yuan; Soymeal down 30; Soyoil down 58; Palm oil up 6; Corn up 14 — Malaysian Palm is down 161.

Malaysian palm oil prices overnight were down 161 ringgit (-3.16%) at 4927.

There were changes in registrations (-55 Soybeans). Registration total: 0 SRW Wheat contracts; 0 Oats; 114 Corn; 521 Soybeans; 369 Soyoil; 76 Soymeal; 5 HRW Wheat.

Preliminary changes in futures Open Interest as of November 15 were: SRW Wheat down 709 contracts, HRW Wheat down 1,085, Corn up 4,722, Soybeans up 7,715, Soymeal down 894, Soyoil up 14,740.

Brazil: Wet season showers continue in central Brazil, being favorable for soybean establishment and growth. Southern areas will see a system move through with better coverage and amounts of rain through Thursday. Overall conditions are still mostly favorable in the country.

Argentina: A system moved through with scattered showers and thunderstorms this weekend, but missed a key area in the central that has been drier lately. Though some isolated showers may move through this week, most areas will remain dry. Another system moves through this weekend into early next week with widespread rainfall being forecast again. Though some areas are starting to dry out, the weather is still mostly favorable in the country. The threat of heat and dryness due to the building La Nina may be a threat later in the season as well.

Northern Plains: Some showers went through over the weekend in Montana and North Dakota, but most areas stayed dry over the weekend. A system will produce more widespread showers, including areas of snow and breezy winds through Wednesday. Another system will move through over the weekend and could produce some beneficial precipitation as well. Though drought is intense in much of the region, the coming pattern should help out somewhat.

Central/Southern Plains: A system developing in the Southern Plains will quickly move northeast into the Upper Midwest, spreading a zone of heavy rain and thunderstorms through a good portion of the region. Another system could go through over the weekend and next week, keeping the region active. Recent precipitation has been able to reduce drought significantly over the last few weeks, a tendency that continues this week.

Midwest: Some light showers moved into the region over the weekend, but most areas stayed dry. A system building in the Southern Plains will quickly move up into Minnesota on Tuesday with scattered showers. The low will weaken, but twirl around the region the rest of the week, continuing showers. Some areas of snow will accompany the rain as some colder air filters in later in the week. Areas currently covered in some form of drought will get some precipitation, but areas of heavy rain are likely to be limited to the west. The pattern stays active going into December though, so drought areas will get more chances coming up. Colder air may leak into the region next week behind a couple of systems moving through.

Delta: Water levels on the Mississippi River have risen due to recent heavy rain across the Plains and Midwest. More rain is needed in the Ohio Valley to maintain or make long-lasting improvements. A storm that moves through this week will be helpful and more systems are forecast for next week as well.

Europe: Showers started to move in over the weekend as several storm systems should keep the continent busy with widespread showers through the week. That will help southeastern areas that have been much drier while keeping soil moisture very high across the rest of the continent. Though the pattern quiets down next week, additional showers and systems are still expected. Wheat is going dormant from north to south in mostly good condition, though some wet spots are not all that favorable.

Black Sea: Some showers moved through western Russia this weekend, but rainfall deficits continue to be very large in most the eastern half of the region. The region will be more active this week with scattered showers moving through in a couple of waves, but wheat is going dormant and unable to use the rain in most areas. The region will hope for good precipitation over the winter to get a good start when the crop comes out of dormancy in the spring.

Australia: Scattered showers went through eastern areas over the weekend, unfavorable for fieldwork and winter harvest, but good for cotton and sorghum planting and establishment. The pattern is getting somewhat more active for the second half of November, which will be helpful in most areas.

 

The player sheet for Nov. 15 had funds: net buyers of 4,500 contracts of SRW wheat, buyers of 6,000 corn, buyers of 6,000 soybeans, buyers of 2,500 soymeal, and buyers of 5,500 soyoil.

TENDERS

  • CORN PURCHASE: South Korea’s Major Feedmill Group (MFG) purchased an estimated 134,000 metric tons of animal feed corn in an international tender with restricted participation on Friday.

 PENDING TENDERS

  • BARLEY TENDER: Iranian state-owned animal feed importer SLAL has issued an international tender to purchase at least 120,000 metric tons of animal feed barley
  • CORN TENDER: Algerian state agency ONAB is believed to have made no purchase in a tender which closed on Nov. 13 for up to 240,000 metric tons of animal feed corn sourced only from Argentina or Brazil
  • RICE TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tons of rice
  • 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
  • BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase up to 120,000 metric tons of animal feed barley.
  • WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tons of milling wheat.

 

Map of China and India

 

 

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 Nov. 7, according to data on the USDA’s website.

  • Top buyer of soybeans: China with 1.18m tons
  • Top buyer of corn: unknown buyers with 603k tons
  • Top buyer of wheat: South Korea with 89k 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 Nov. 7, according to data on the USDA’s website.

  • Mexico bought 9.6k tons of the 22.3k tons of pork sold in the week
  • Japan led in beef purchases

 

NOPA October US soybean crush hits record 199.959 million bushels

The U.S. soybean crush surged to an all-time monthly high in October, while soyoil stocks edged up slightly from a near-decade low the prior month, according to National Oilseed Processors Association (NOPA) data released on Friday.

NOPA members, which account for around 95% of soybeans processed in the United States, crushed 199.959 million bushels of the oilseed last month, eclipsing the previous record of 196.406 million bushels set in March 2024. It was up 12.8% from the 177.320 million bushels crushed in September and up 5.4% from the October 2023 crush of 189.774 million bushels.

The crush was above the average trade estimate of 196.843 million bushels, based on a Reuters survey of 10 analysts. Estimates ranged from 189.500 million to 205.183 million bushels, with a median of 197.425 million bushels.

U.S. crush capacity has swelled in recent years as processors built several new plants and expanded existing ones to meet surging vegetable oil demand from biofuels makers.

The October crush did not fully reflect that capacity growth as a large processing plant in Des Moines, Iowa, was idled for maintenance for a portion of the month, analysts said.

But the October data did include a new NOPA member, South Dakota Soybean Processors, and its processing plant in Volga, South Dakota, NOPA said, adding that the group expects another two new members to be included in its report as soon as November or December.

Soyoil stocks among NOPA members as of Oct. 31 increased slightly to 1.069 billion pounds, from 1.066 billion pounds at the end of September, which was the tightest end-of-month supply since November 2014.  Analysts, on average, had expected stocks to rise to 1.090 billion pounds, according to estimates from seven analysts. Soyoil stocks estimates ranged from 999 million to 1.226 billion lbs, with a median of 1.100 billion lbs.

 

Indonesia Says Ready to Raise Biodiesel Mix to 40% in 2025

Govt ready to implement a mandatory 40% biodiesel blending program, known as the B40, next year, says Dida Gardera, deputy for food and agribusiness at the coordinating ministry of economic affairs.

  • Program may use about 16m kiloliters of palm-based biofuel
  • Program will need est. 37.5t rupiah in funding from the oil palm plantation fund management agency
  • Govt seeks to further increase blending rate to 50% or higher
  • Govt seeks to boost palm oil output, including by replanting old trees
  • Govt to regularly review export levy policy and weigh other options to fund the program
    • Regular review may be conducted every three to six months
    • NOTE: Indonesia cut palm oil export levy and change the rate to a percentage of its reference price in September
    • Govt to evaluate impact of export levy on local fresh fruit bunches prices, export competitiveness and financial performance of the oil palm plantation fund management agency, known as BPDPKS

 

Indonesia Oct. Palm Oil Exports Rise 26.1% M/m: Intertek

Indonesia’s palm oil exports rose 26.1% m/m in October, according to Intertek Testing Services.

  • Palm oil exports rose to 2.258m tons from 1.79m tons in September
  • Crude palm oil shipments rose to 292,085 tons from 108,392 tons in September
  • RBD palm olein shipments rose to 1.020m tons from 671,348 tons in September
  • RBD palm oil shipments rose to 403,768 tons from 357,438 tons in September
  • Palm oil sales to European Union fell to 334,292 tons from 364,053 tons in September
  • Palm oil sales to India rose to 793,198 tons from 358,583 tons in September
  • Palm oil sales to China fell to 325,727 tons from 365,370 tons in September

 

Thailand Mulls Law to Support Palm-Biodiesel Usage: Minister

Thailand is readying a draft bill to support biodiesel production using palm oil and help farmers when a subsidy program for the blended fuel ends in 2027, Energy Minister Pirapan Salirathavibhaga says.

  • The proposed legislation will be similar to the law overseeing sugarcane and sugar production and profit-sharing, Pirapan says in a statement Monday
    • Beneficiaries will include those using palm oil to produce biodiesel and also using the vegetable oil to develop other products
  • Higher palm oil price is among the reasons for retail diesel price to spike, while the government has been using the Oil Fuel Fund mechanisms to maintain diesel price at below 33 baht per liter: statement
  • NOTE: B7 is a blend of 7% palm biodiesel and 93% petroleum diesel, while B5 has 5% palm biodiesel
  • One-third of total Thai palm oil output is used to blend with diesel fuel for domestic use, while two-third is used for other purposes: statement

 

Russia Grain Harvest Volumes Running 12% Below Last Year: IFX

Farmers in Russia had collected 124.3m tons of grains as of Nov. 1, compared to 141m tons as of the same date last year, Interfax reported, citing Federal Statistics Service Rosstat.

  • Figures are in initially registered weight
  • Grain crops harvested from 95% of sown area, roughly the same as last year
  • 13.9m tons of sunflower harvested as of Nov. 1, compared to 14.6m a year ago
  • 35.5m tons of sugar beet harvested compared to 37.5m tons last year

 

US Beef Production Falls 2% This Week, Pork Rises: USDA

US federally inspected beef production falls to 526m pounds for the week ending Nov. 16 from 536m in the previous week, according to USDA estimates published on the agency’s website.

  • Cattle slaughter down 2.1% from a week ago to 606m head
  • Pork production up 1.3% from a week ago, hog slaughter rises 1.1%
  • For the year, beef production is 0.5% below last year’s level at this time, and pork is 1.4% above

 

 

 

 

 

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