TOP HEADLINES
Xi and Lula elevate China-Brazil ties in state visit
- Leaders hail relations as ‘Community with a Shared Future’
- Lula and Xi sign nearly 40 accords for economic cooperation
- Brasilia visit follows G20 and APEC summits in Rio and Lima
- Xi fills diplomatic vacuum between Biden and Trump presidencies
China’s President Xi Jinping and his Brazilian peer Luiz Inacio Lula da Silva on Wednesday upgraded the status of diplomatic relations and struck agreements on infrastructure, energy and agribusiness, tightening links between two of the world’s largest developing economies.
The state visit in Brasilia capped a regional tour by Xi that showcased Beijing’s growing diplomatic clout during a tricky government transition in Washington.
Xi and Lula both said the China-Brazil relationship had become a “Community with a Shared Future for a More Just World and Sustainable Planet,” expanding a key slogan from the Chinese leader in their joint declaration at the presidential residence.
They also agreed to find “synergies” between the Chinese Belt and Road Initiative and Brazilian development programs, after Lula declined last year to formally include Brazil in China’s global infrastructure investment strategy.
The countries struck nearly 40 cooperation agreements in economic sectors from farming and solar power to communications and nuclear energy, strengthening ties between the two nations with more than $150 billion of bilateral trade, Lula said.
“China-Brazil relations are now at their best moment ever,” said Xi, adding that China was ready to make the nations “golden partners.”
Xi has used the term “Community with a Shared Future” to formalize what Beijing sees as a positive and wide-ranging bilateral relationship with a country sharing geopolitical and economic interests, such as Vietnam.
“This designation is reserved for partners China considers truly special and irreplaceable,” said Sunny Cheung, associate fellow for China studies with the Jamestown Foundation. “For Beijing, it underscores Brazil’s strategic importance, both as a leading voice in the Global South and as a critical partner in ensuring China’s long-term economic and food security.”
Brazil’s Agriculture Ministry cheered the potential for $450 million in new exports to China as new trade accords opened its market for Brazilian sorghum, fresh grapes, sesame and fishmeal.
Brazilian meat packer BRF BRFS3.SA, the world’s largest chicken exporter, in parallel announced a deal to acquire a processed foods factory in China’s Henan province for $43 million, along with plans to invest $36 million in expanding the plant.
Although Brazil-China trade relations have been growing for decades, their diplomatic relations faltered under Lula’s right-wing predecessor, Jair Bolsonaro, who echoed anti-China rhetoric from former U.S. President Donald Trump, an ideological ally.
During Lula and Xi’s meeting on Wednesday, China’s low Earth orbit satellite company SpaceSail, which aims to challenge Elon Musk’s Starlink, signed an agreement with Brazil’s state telecom Telebras TELB4.SA to enter the Brazilian market.
Brazilian state bank BNDES said it had arranged for a 5 billion yuan ($690 million) loan from China Development Bank – the first such operation denominated in the Chinese currency.
FUTURES & WEATHER
Wheat prices overnight are up 4 1/4 in SRW, up 3 1/2 in HRW, up 3 1/2 in HRS; Corn is up 2; Soybeans up 6 1/2; Soymeal up $0.50; Soyoil up 0.41.
For the week so far wheat prices are up 22 1/2 in SRW, up 24 in HRW, up 19 1/2 in HRS; Corn is up 6 3/4; Soybeans down 1 1/2; Soymeal up $1.00; Soyoil down 1.73.
For the month to date wheat prices are down 13 3/4 in SRW, down 6 3/4 in HRW, down 17 1/2 in HRS; Corn is up 16; Soybeans up 2 1/2; Soymeal down $9.50; Soyoil down 1.30.
Year-To-Date nearby futures are down 11.4% in SRW, down 12.0% in HRW, down 17.7% in HRS; Corn is down 8.4%; Soybeans down 22.9%; Soymeal down 24.7%; Soyoil down 8.8%.
Chinese Ag futures (JAN 25) Soybeans down 2 yuan; Soymeal down 4; Soyoil down 86; Palm oil down 252; Corn down 3 — Malaysian Palm is down 43.
Malaysian palm oil prices overnight were down 43 ringgit (-0.89%) at 4772.
There were no changes in registrations. Registration total: 0 SRW Wheat contracts; 0 Oats; 114 Corn; 455 Soybeans; 369 Soyoil; 76 Soymeal; 5 HRW Wheat.
Preliminary changes in futures Open Interest as of November 20 were: SRW Wheat down 10,893 contracts, HRW Wheat down 2,608, Corn up 1,713, Soybeans up 2,914, Soymeal up 1,473, Soyoil down 5,911.
Brazil: Wet season showers continue in central Brazil, though they are forecast to weaken and become more isolated over the weekend. That should be brief as the showers fill back in later next week, and mostly favorable conditions continue for soybean establishment and growth. Southern areas have seen scattered showers the last couple of days that continue through Thursday. More rain is forecast to move in during the middle of next week that should keep conditions mostly favorable as well.
Argentina: Though some isolated showers may move through over the next couple of days, most areas will remain dry. Another system moves through this weekend into early next week with widespread rainfall being forecast again. Some patches are starting to dry out, and if the system misses these same areas, there could be some poor growing conditions. But overall, 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: Snow and breezy winds linger on Wednesday. Another system will move through over the weekend and could produce some beneficial precipitation in spots as well. Drought is intense in much of the region, though some areas are getting some help while others fall further behind.
Central/Southern Plains: A system will likely miss to the north this weekend, but a couple more are possible next week, keeping the region active but eventually bringing some cold air in as well. Recent precipitation has been able to reduce drought significantly over the last few weeks, favorable for winter wheat that is starting to go dormant and should get more of a push next week.
Midwest: Scattered showers went through with a powerful storm earlier this week. A secondary low will form over Michigan on Wednesday, keeping showers around through the end of the week, including some bursts of snow. The pattern stays active going into December, so drought areas will get more chances for rain next week and colder air should move in at that time as well, helping to cool soil temperatures for fall fertilizer application in more areas.
The player sheet for Nov. 20 had funds: net buyers of 3,000 contracts of SRW wheat, buyers of 9,500 corn, buyers of 2,000 soybeans, buyers of 2,000 soymeal, and sellers of 5,000 soyoil.
TENDERS
- SOYBEAN SALES: The U.S. Department of Agriculture confirmed private sales of 202,000 tons of U.S. soybeans to China and another 226,200 metric tons to unknown destinations, all for delivery in the 2024/25 marketing year.
- 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
- CORN PURCHASE: Algerian state agency ONAB is believed to have bought an unknown volume of animal feed corn to be sourced from Argentina or Brazil in an international tender for up to 240,000 tons which closed on Tuesday
- WHEAT PURCHASE: The Taiwan Flour Millers’ Association purchased an estimated 80,000 metric tons of milling wheat to be sourced from the U.S. in a tender on Thursday
- DURUM WHEAT PURCHASE: Algeria’s state grains agency OAIC is believed to have purchased a small additional volume of durum wheat in negotiations in an international tender which continued on Wednesday.
- CORN PURCHASE: South Korean feedmaker Nonghyup Feed Inc. (NOFI) purchased up to 66,000 metric tons of animal feed corn in a private deal on Wednesday without an international tender being issued
- NO PURCHASE IN BARLEY TENDER: Jordan’s state grain buyer is believed to have made no purchase in an international tender for 120,000 metric tons of animal feed barley which closed on Wednesday.
PENDING TENDERS
- BARLEY TENDER: Jordan’s state grains buyer has issued an international tender to purchase up to 120,000 metric tons of animal feed barley. A new announcement had been expected after Jordan made no purchase in its previous tender for 120,000 tons of barley, which closed on Wednesday.
- BARLEY TENDER: Iranian state-owned animal feed importer SLAL issued an international tender to purchase at least 120,000 metric tons of animal feed barley
- RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 40,000 metric tons of rice to be sourced from the United States
- WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tons of milling wheat.
- RICE TENDER: Bangladesh’s state grains buyer issued another international tender to purchase 50,000 metric tons of rice.
TODAY
GRAIN EXPORT SURVEY: Corn, Soy, Wheat Sales Before USDA Report
Estimate ranges are based on a Bloomberg survey of four analysts; the USDA is scheduled to release its export sales report on Thursday for week ending Nov. 14.
- Corn est. range 1,300k – 2,200k tons, with avg of 1,544k
- Soybean est. range 1,000k – 1,900k tons, with avg of 1,331k
DOE: US Ethanol Stocks Rise 2.4% to 22.563M Bbl
According to the US Department of Energy’s weekly petroleum report.
- Analysts were expecting 22.206 mln bbl
- Plant production at 1.11m b/d, compared to survey avg of 1.1m
China’s October soy imports from US climb for seventh month
China’s soybean imports from the U.S. more than doubled in October from a year earlier, marking a seventh month of growth, as buyers accelerated shipments fearing a rise in trade tensions if Donald Trump were to return to the White House.
Trump won the U.S. presidential election the following month in a comeback that is likely to reignite trade tensions between Washington and Beijing.
According to traders and analysts, tariff threats in Trump’s campaign speeches have led some Chinese importers to shun U.S. shipments starting in January.
China, the world’s largest soybean buyer, imported 541,434 metric tons of soybeans from the United States last month, up from 228,253 tons a year ago, according to the General Administration of Customs data on Wednesday.
However, the bulk of China’s imports for October came from Brazil, with 8.09 million metric tons imported overall. CNC-SOY-IMP
Arrivals from the U.S have been surging since April, and China is on track for a record soybean import this year due to a rush to stockpile U.S beans. As of the January-October period, total soybean imports stood at 89.94 million tons.
Arrivals from Argentina for the month surged to 1.36 million tons from 1,077 tons a year earlier.
Imports from larger producer Brazil in October rose 15% to 5.53 million tons from last year.
Total shipments from Brazil over January-October rose 13.6% year-on-year to 67.8 million tons. Arrivals from the U.S. fell 13% to 15.1 million metric tons.
China’s soybean imports are expected to drop to 98.8 million metric tons for the year ending September 2025, down from 109.4 million tons the previous year, According to an executive from China National Cereals, Oils and Foodstuffs Corporation.
Brazil wins approval from China to export sorghum, other farm and fish products
Brazil’s government received permission from China to export locally-grown sorghum, fresh grapes, sesame as well as fish products to Chinese buyers, the Latin American country’s agriculture ministry announced in a statement on Wednesday.
The announcement was part of several deals signed during Chinese President Xi Jinping’s state visit to Brasilia, where he held talks with President Luiz Inacio Lula da Silva.
Argentina Moves to Deepen Soy Waterway to Ship Bigger Cargoes
- Government published terms of tender to dredge Parana River
- Ships have run aground in recent years due to low water levels
Argentina published the terms of a long-awaited tender for contractors to dredge its waterway that ships billions of dollars of crops a year to global markets.
The international tender for a 30-year license includes a key provision to deepen the navigation channel in the Parana River, which will allow exporters to load bigger cargoes at the port complex that circles the city of Rosario. Dredgers have until the end of January to submit bids, the government of President Javier Milei announced late Tuesday.
Argentina is the world’s largest supplier of soy meal for livestock feed and soy oil for food and biofuel. But ships frequently run aground as they sail between Rosario and the estuary that leads to the Atlantic Ocean due to low water levels — as shallow as 36 feet in key areas — that have been exacerbated by historic droughts in recent years. That forces Argentina to charter more vessels or top up cargoes at sea ports.
A cargo ship travels on the Parana River during low water levels in Rosario, Argentina, on Wednesday, June 23, 2021.
Charterers and exporters have for years lobbied for a deeper channel as part of a broader push by Argentina’s crop industry to reverse a decline in competitiveness against Brazil and the US.
“If we want to develop Argentina, it’s crucial to provide competitiveness,” Luis Zubizarreta, who heads a chamber for privately-run ports and is the local institutional affairs executive for Louis Dreyfus Co., said in a government-distributed statement. “We’re a country with a natural disadvantage because we’re far from markets, so we must have efficient logistics.”
Whoever wins the contract will be required to deepen the channel to 39 feet, which may require billions of investment and environmental permits. A government agency took over responsibility for dredging the Parana in 2021 after the last contract expired, outsourcing the job to Jan de Nul, a Belgian company that has done the work since the 1990s.
Guillermo Wade, head of port group CAPyM in Rosario who’s been involved in talks to draft the tender, said by phone that the deepening will be done gradually and eventually surpass 39 feet.
Dredgers that have expressed interest in bidding in a tender are Jan de Nul, China’s Shanghai Dredging Company, through local unit Servimagnus, Belgium’s DEME and publicly-traded Dutch company Boskalis.
Indonesia Sept. Palm Oil Exports Fall to 1.86m Tons: Gapki
Indonesia’s palm oil exports fell to 1.86m tons in September from 2.384m tons in August, according to Indonesian Palm Oil Association (Gapki).
- Palm oil output rose to 4.415m tons from revised 4.376m tons in August
- Crude palm oil production at 4.021m tons in September
- Palm oil stockpiles rise to 3.021m tons from 2.450m tons in August
- Palm oil domestic consumption fell to 1.989m tons from 2.060m tons in August
- Palm oil for biodiesel domestic consumption fell to 934,000 tons from 979,000 tons in August
- Below are January-September figures:
- Production fell 4.6% y/y to 38.9m tons
- Exports fell 12.4% y/y to 21.6m tons
- Domestic consumption rose 1.6% y/y to 17.6m tons
China Seeks to Boost Trade Growth to Strengthen Economy
China’s Ministry of Commerce issues measures targeting promoting stable growth in trade, while promising to monitor exports and imports conditions closely, help exporters stabilize orders, according to a statement.
- Will increase financing support for exporters and importers
- Will promote development of cross-border e-commerce
- Will expand exports of agricultural products
- Yuan to be kept basically stable at a reasonable and balanced level
- Will facilitate inbound business travels via expanding visa-free policies
November Storms Delay US Autumn Fertilizer Application
India’s urea tender revealed marginally lower prices, while Corn Belt reference prices for ammonia were steady on the cusp of fall application. Recent rainfall brought much-needed moisture to the Midwest, but back-to-back storms since late October have delayed the application of ammonia, phosphates and potash in many areas.
Urea, Phosphates Slip, Ammonium Sulfate Firms
New Orleans (NOLA) barge prices for urea and diammonium phosphate (DAP) were down marginally from last week on limited new business, with urea slipping $1 a short ton (st) and DAP falling $5/st. Sharper declines were reported at inland terminals, however, with the latest St. Louis, Mo., offers falling $5/st for urea and $20/st for DAP amid delays to fall application caused by wet weather. Ammonium sulfate reference prices in the Midwest and southern US were up from AdvanSix and Interoceanic (IOC), with AdvanSix on Nov. 19 announcing an immediate $25/st increase and IOC raising 1Q25 prices by $20-$35/st, depending on location.
Brazil Nitrogen Prices Weaken, Phosphates Steady on Low Demand
Urea prices slipped in Brazil amid a strong import lineup, with ammonium sulfate also under pressure and trading at a discount to urea. Phosphates were stable on limited demand in the country, with potash edging up as negotiations begin for next year’s volume amid favorable barter ratios.
Ample Supply Pressures Brazil Nitrogen Prices
Urea prices in Brazil widened to $330-$355 a metric ton (mt) cost-and-freight, down about 4.3% from last week’s $345-$350, with traders trying to hold to the higher end of the range and buyers attempting to place orders near the low amid reports of increased availability of imported tons. Reports of ample supply were also pressuring ammonium sulfate prices, which slipped to $145-$155/mt from last week’s $155-$162. Potash prices in Brazil firmed to $280-$285/mt from last week’s $270-$285, while monoammonium phosphate remained stable at $630-$635/mt in early-week business.
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