Global Ag News for Oct 11.23

TOP HEADLINES

Low water levels again hamper Rhine river shipping in Germany

Low water levels after dry weather have stopped cargo vessels from sailing fully loaded on the Rhine river in Germany, with surcharges added to the usual freight rates, shipping experts said on Wednesday.

Low water is hampering shipping on most of the river south of Duisburg and Cologne, including the chokepoint of Kaub. German inland navigation agency WSA said Kaub is at its lowest water level this year, at 85cm.

Dry weather and shallow water hindered shipping for several weeks in July. After recovering in August and September, Rhine water levels have again fallen in recent days.

Shallow water means vessel operators can impose surcharges on freight rates to compensate for vessels not sailing fully loaded, increasing costs for cargo owners.

“With the current water levels, no normal freight ship can sail the middle section of the Rhine fully loaded,” said WSA spokesperson Florian Krekel. “The maximum loading of the ships is currently between 40 and 70 percent, depending on the type of the vessel.”

The Rhine is an important shipping route for commodities including grains, chemicals, minerals, ores, coal and oil products.

German inland waterways shipping consortium DTG said it currently does not fear supply bottlenecks despite the disruptions.

“The chemical and construction industries – usually large customers of inland shipping – are currently massively depressed,” said DTG board member Roberto Spranzi, speaking about Germany’s weakening economy.

“The stores of coal-fired power stations are still well filled.”

German companies faced supply bottlenecks and production problems in summer 2022 after a drought and heat wave led to unusually low water levels on the Rhine.

FUTURES & WEATHER

Wheat prices overnight are down 1 in SRW, down 3/4 in HRW, unchanged in HRS; Corn is up 1 3/4; Soybeans unchanged; Soymeal up $1.20; Soyoil up 0.04.

For the week so far wheat prices are down 10 3/4 in SRW, down 3 1/4 in HRW, up 3 in HRS; Corn is down 4 3/4; Soybeans up 5 1/2; Soymeal up $6.50; Soyoil down 2.10.

For the month to date wheat prices are up 16 in SRW, up 6 3/4 in HRW, up 14 1/4 in HRS; Corn is up 10 1/2; Soybeans down 3 1/2; Soymeal down $2.50; Soyoil down 2.56.

Year-To-Date nearby futures are down 29.6% in SRW, down 24.5% in HRW, down 22.9% in HRS; Corn is down 28.2%; Soybeans down 16.3%; Soymeal down 21.1%; Soyoil down 15.4%.

Chinese Ag futures (JAN 24) Soybeans down 36 yuan; Soymeal down 31; Soyoil down 28; Palm oil up 14; Corn down 16 — Malaysian Palm is down 13. Malaysian palm oil prices overnight were down 13 ringgit (-0.36%) at 3552.

There were changes in registrations (-10 Soymeal). Registration total: 3,005 SRW Wheat contracts; 735 Oats; 4 Corn; 220 Soybeans; 67 Soyoil; 463 Soymeal; 402 HRW Wheat.

Preliminary changes in futures Open Interest as of October 10 were: SRW Wheat up 3,020 contracts, HRW Wheat up 545, Corn up 6,388, Soybeans up 3,248, Soymeal down 5,085, Soyoil up 5,019.

Northern Plains: Frosty morning temperatures are going to be common going forward now. A system will pass by to the south mid-late week but will still be close enough to produce precipitation in the region, which may be heavy in South Dakota. It is not out of the question for some snow to mix in over Wyoming or maybe southwestern South Dakota as well. Strong winds may also be a concern. Another system will move through in the middle of next week with more showers.

Central/Southern Plains: A potent system will cross the region with widespread showers and thunderstorms and strong winds Wednesday through Friday. Some accumulating snow may be possible in the northwest as well. Areas of heavy rain will be possible for Nebraska, which would delay harvest. Light rain elsewhere will favor winter wheat establishment where it occurs, though strong winds would not be favorable, drying out soils.

Midwest: Minor frosts continue to be possible for yet another morning. Some showers may develop during the day early this week in the cold air. A system will move into the Plains on Wednesday and spread showers across the region through the weekend. Areas of heavy rain will be possible, which will help with the ongoing drought, but could interrupt harvest. Winds may also be strong behind the system.

Brazil: Wet season showers continue in central Brazil, though they may be isolated at times. A front brought heavy rain to southern areas over the weekend, though not as bad as feared last week. Another front will bring chances for heavy rain to southern areas again Wednesday and Thursday. Heavy rain and flooding have caused concerns with winter wheat quality and harvest and corn and soybean planting, though the pace for planting has been near normal. While it is drier than normal in central Brazil, showers are still passing through and southern areas have more than enough soil moisture for early establishment.

Argentina: A front will move through Tuesday and Wednesday with showers, but it is forecast to be light and scattered, not nearly enough for filling wheat or corn establishment. Soils continue to be very dry and are in need of more rain. Showers may try to develop in spots this weekend and next week with a couple of weak disturbances moving through, but widespread rain is not forecast.

The player sheet for Oct. 10 had funds: net sellers of 4,000 contracts of SRW wheat, sellers of 2,500 corn, sellers of 2,000 soybeans, buyers of 1,000 soymeal, and  sellers of 3,000 soyoil.

TENDERS

• WHEAT PURCHASE: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), is believed to have bought 480,000 metric tons of Russian wheat in a private deal with Russia’s state grains trader United Grain Company (OZK), several traders told Reuters. The wheat is expected to be shipped in November and December, with traders estimating the price at about $265 a ton free-on-board (FOB) with payment in 270-day letters of credit.
• CORN PURCHASE: South Korean animal feed maker Nonghyup Feed Inc (NOFI) bought a total of around 138,000 metric tons of animal feed corn in an international tender for the same volume
• CORN TENDER: Algerian state agency ONAB issued an international tender to purchase around 120,000 metric tons of animal feed corn.
• WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy a total of 90,640 metric tons of food-quality wheat from the United States, Canada and Australia in a regular tender that will close on Oct. 12.
• WHEAT AND BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said on Wednesday it will seek 60,000 metric tons of feed wheat and 20,000 tons of feed barley to be loaded by Jan. 31, 2024, and arrive in Japan by March 14, via a simultaneous buy and sell (SBS) auction to be held on Oct. 18.
• CORN TENDER: The Korea Feed Association (KFA) has issued an international tender to purchase up to 69,000 metric tons of animal feed corn to be sourced from optional origins.
• CORN TENDER: South Korea’s Major Feedmill Group (MFG) has issued an international tender to purchase up to 140,000 metric tons of animal feed corn to be sourced from optional origins

PENDING TENDERS

• WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 metric tons of milling wheat.
• RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 50,100 metric tons of rice largely from the United States.

TODAY

USDA CROP PROGRESS: Corn Conditions 53% G/E, Soybeans 51%

Highlights from the report:

• Corn harvest 34% vs 23% last week, and 29% a year ago
• Corn 53% G/E vs 53% last week, and 54% a year ago
• Corn mature 89% vs 82% last week, and 85% a year ago
• Soybeans 51% G/E vs 52% last week, and 57% a year ago
• Soybean drop leaves 93% vs 86% last week, and 90% a year ago
• Soybeans harvested 43% vs 23% last week, and 41% a year ago
• Winter wheat planted 57% vs 40% last week, and 53% a year ago
• Winter wheat emerged 29% vs 15% last week, and 24% a year ago
• Cotton 32% G/E vs 30% last week, and 30% a year ago
• Cotton harvested 25% vs 18% last week, and 28% a year ago
• Sorghum 42% G/E vs 41% last week, and 22% a year ago

Brazil Corn Exports Seen Reaching 9.174 Million Tns In October Versus 6.173 Tns In Same Month A Year Ago- Anec

BRAZIL CORN EXPORTS SEEN REACHING 9.174 MILLION TNS IN OCTOBER VERSUS 6.173 TNS IN SAME MONTH A YEAR AGO- ANEC

Russian Wheat Exports Expected to Drop YoY in October: SovEcon

Russian wheat exports in October may total 3.9m-4.4m tons, down from 4.5m tons a year earlier, according to SovEcon Managing Director Andrey Sizov.

• Demand for wheat among Russian exporters is declining, Sizov says; this could be due to “the efforts of Russia’s ministry of agriculture to prevent wheat sales below the price floor of $270 per ton/FOB”
• 2023-24 exports still expected to hit record high at 48.6m tons

French Wheat Export Outlook Raised on Demand Outside EU: AgriMer

Soft-wheat exports from France are seen at 17.25m tons in the 2023-24 season, up from a September outlook for 17.16m tons, crops office FranceAgriMer said in a report on Wednesday.

• Outlook for non-EU sales raised to 9.8m tons, from 9.5m tons
• Stockpiles estimate cut to 2.77m tons, from 2.92m tons

BARLEY

• Export estimate cut to 6.45m tons, from 6.52m tons
• Stockpiles forecast raised to 1.66m tons, from 1.23m tons

CORN

• Stockpiles trimmed to 1.64m tons, from 1.65m tons
• That would be the lowest in at least seven seasons

Malaysia’s Palm Oil Stocks May Stay Above 2 Million Tons Until Year-End

0151 GMT – Malaysia’s palm oil stocks may stay above 2 million tons until year-end, RHB analysts Hoe Lee Leng and Syahril Hanafiah say in a note. Although palm oil demand may increase in coming months ahead of the festive season, but they think this could be offset by increased competition by rival oils and seasonally higher output. According to the Malaysian Palm Oil Board, the country’s end-September palm-oil stocks was at 2.31 million tons. They maintain their 2023 CPO prices estimate at MYR3,900/ton. The Bursa Malaysia Derivatives contract for December delivery was last at MYR3,564/ton.

Ukraine’s Grain Exports Drop 28% Y/y in Season to Oct. 11

Ukraine’s grain exports during the season that began July 1 stand at 7.42m tons, compared with 10.2m tons a year earlier, the country’s agriculture ministry said on its website.

Total includes:

• 3.76m tons of wheat, about steady y/y
• 640k tons of barley, down 27% y/y
• 2.9m tons of corn, down 48% y/y

Ukraine keeps 2024 winter wheat sowing forecast unchanged at 4.4 mln hectares- first deputy minister

Ukraine’s farm ministry is keeping the 2024 winter wheat sowing forecast unchanged at 4.4 million hectares, First Deputy Agriculture Minister Taras Vysotskiy said on Wednesday.

“We have not reviewed it yet. We will understand it in early November,” Vysotskiy told Reuters.

Ukrainian farmers had sown around 3.7 million hectares of winter crops as of Oct. 9, the agriculture ministry said. Ukraine is a traditional grower of winter wheat, which accounts for at least 95% of its overall wheat output.

Ukraine sows winter grains and oilseeds for 2024 harvest on 3.7 mln ha, 92% of planned area

Ukrainian farmers are planting winter grains and oilseeds, which have already been sown on 3.7 million hectares, compared to 2.992 million hectares the previous week, Ukrainian media reported, citing the Ministry of Agrarian Policy and Food.

The report says that 2.583 million hectares are currently sown with winter grains (764,700 ha the previous week), including wheat on 2.352 million ha (1.743 million ha the previous week), barley on 171,000 ha (109,000 ha), and rye on 60,000 ha (53,600 ha).

The Sumy region is leading in the sowing campaign, having achieved 97% of its forecast.

In all regions, the sowing of winter rapeseed is nearing completion. It occupies 1.111 million hectares, which is 91.7% of the plan.

The winter rapeseed sowing leaders are the Dnepropetrovsk and Odessa regions.

As reported, the majority of farmers do not plan to significantly change the area under winter crops this year compared to last season.

Ukraine Ships Crops, Metal to Europe and Asia Via New Corridor

Ukraine’s commodities are again heading directly to traditional buyers across Europe and Asia via its new shipping corridor in the Black Sea.

Three ships are en route to Spain and one each to the Netherlands, Egypt and Singapore, ship-tracking data compiled by Bloomberg shows. Ships that left Ukraine’s Black Sea ports have already arrived in Romania, Israel, Italy and Bulgaria with cargoes like grain and metals.

The trips show how Ukraine’s risky bet to go it alone in the Black Sea appears to be paying off, and could allow shipments to ramp up, securing much-needed revenues. Kyiv set up its own temporary route from ports in Greater Odesa after Russia exited a safe-corridor deal backed by the United Nations and Turkey in July.

Still, volumes so far are much smaller than under the grain export agreement, when China was the top destination for Kyiv’s exports, followed by Spain, Turkey and Italy. Ukraine’s Infrastructure Ministry declined to comment on the developments.

Mainstream shipowners remain wary. Risks — and insurance premiums — are very high. Russia has previously threatened to treat any ships sailing to Ukraine as potentially carrying weapons, and in August, opened fire on one to force it to stop for checks.

At least eight more ships are in or near ports in Greater Odesa and could depart with cargoes in the next few days, data shows.

Indonesia to launch crude palm oil futures exchange on Oct 13

Indonesia, the world’s biggest palm oil exporter, will launch its crude palm oil (CPO) futures exchange on Friday, but it will not make trading via the exchange mandatory, its chief regulator told Reuters on Wednesday.

Authorities in the Southeast Asian country had previously planned to make it mandatory for all CPO exports to go through the exchange, in order to drive global palm oil prices and create benchmarks similar to those in Kuala Lumpur and Rotterdam.

“This future exchange will hopefully create the CPO price reference for Indonesia, so we can have data and create better policies related to the industry,” Didid Noordiatmoko, head of the regulator BAPPEBTI, said in a phone interview.

The Indonesia Commodity and Derivatives Exchange (ICDX) has been appointed as the exchange, and transactions will be quoted in the rupiah currency, Didid said.

Indonesia’s Palm Oil Association and analysts were lukewarm on the introduction of the exchange.

Head of Indonesia’s Palm Oil Association (GAPKI) said that as long as it was not mandatory, the futures exchange would not be a problem. “However, it would be interesting, if it could be used for hedging,” Eddy Martono said.

Most Indonesian palm oil exporters currently conduct sales directly with buyers without going through an exchange, while auctions held by state trading company KPB Nusantara only offers physical palm oil and not futures contracts.

Although 12 companies have listed in the exchange, Didid said the exchange may not see any transactions immediately after the launch, adding that training will be conducted afterwards.

“Indonesia launching its CPO futures exchange may not have a significant importance at least for the near term time frame at first, the participation is going to be voluntary in contrast to the earlier talks of mandatory for exporters and secondly, the denomination will be in Indonesian rupiah and not in US Dollar,” Anilkumar Bagani, Research Head of Sunvin Group India said. 

 

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