Global Ag News for Sept 5.23
Government Launches New “Soybean Dollar”: Argentina Today
In Argentina, the Government officially introduced a new version of the “soybean dollar” on Tuesday. This measure, which will be in force during September, will allow exporters to keep 25% of the foreign currency received from their sales abroad, instead of having to fully sell them in the official exchange market, allowing them to get a higher exchange rate than the current one. The Association of Automobile Manufacturers (Adefa) publishes vehicle sales, production and exports data for August.
Internationally, the dollar is sitting close to a six-month high as Treasury yields push higher and traders consider whether US interest rates may stay higher for longer. European stocks fell as a fresh set of downbeat data in the euro area and China underscored the relative resilience of the US economy. A currency index of emerging markets is down 0.91%.
FUTURES & WEATHER
Wheat prices overnight are up 6 in SRW, up 5 3/4 in HRW, up 4 1/4 in HRS; Corn is up 2; Soybeans up 12 1/4; Soymeal up $3.90; Soyoil down 0.40.
For the week so far wheat prices are up 9 3/4 in SRW, up 7 1/2 in HRW, up 6 3/4 in HRS; Corn is up 6 1/2; Soybeans up 8; Soymeal up $1.90; Soyoil down 0.88.
For the month to date wheat prices are up 3 1/4 in SRW, up 3 in HRW, down 1/4 in HRS; Corn is up 9 3/4; Soybeans up 8 1/2; Soymeal down $2.60; Soyoil down 0.10.
Year-To-Date nearby futures are down 27.7% in SRW, down 18.5% in HRW, down 21.7% in HRS; Corn is down 30.5%; Soybeans down 11.2%; Soymeal down 15.1%; Soyoil up 2.6%.
Chinese Ag futures (NOV 23) Soybeans up 65 yuan; Soymeal up 42; Soyoil up 46; Palm oil up 4; Corn up 5 — Malaysian Palm is down 19. Malaysian palm oil prices overnight were down 19 ringgit (-0.49%) at 3882.
There were changes in registrations (90 SRW Wheat). Registration total: 3,005 SRW Wheat contracts; 741 Oats; 0 Corn; 0 Soybeans; 67 Soyoil; 85 Soymeal; 312 HRW Wheat.
Preliminary changes in futures Open Interest as of September 5 were: SRW Wheat up 6,647 contracts, HRW Wheat up 1,957, Corn up 8,056, Soybeans up 2,205, Soymeal down 950, Soyoil down 2,530.
Northern Plains: Mostly dry Wednesday. Isolated showers Thursday-Friday. Scattered showers Saturday. Temperatures near to below normal Wednesday, near normal Thursday-Saturday. Outlook: Scattered showers Sunday. Mostly dry Monday-Tuesday. Isolated showers Wednesday-Thursday. Temperatures near to below normal Sunday-Tuesday, near to above normal Wednesday-Thursday.
Central/Southern Plains: Mostly dry Wednesday. Isolated showers Thursday-Saturday. Temperatures near to below normal north and well above normal south Wednesday, near to above normal north and well above normal south Thursday-Saturday. Outlook: Isolated to scattered showers Sunday-Thursday. Temperatures near to above normal north and well above normal south Sunday, near to below normal north and well above normal south Monday-Tuesday, near to below normal Wednesday-Thursday.
Western Midwest: Mostly dry Wednesday-Saturday. Temperatures near to above normal Wednesday-Saturday.
Eastern Midwest: Isolated to scattered showers through Friday. Mostly dry Saturday. Temperatures above to well above normal Wednesday, near to above normal Thursday-Saturday. Outlook: Isolated to scattered showers Sunday-Tuesday. Mostly dry Wednesday-Thursday. Temperatures near to above normal Sunday-Monday, near to below normal Tuesday-Thursday.
The player sheet for Sept. 5 had funds: net buyers of 1,500 contracts of SRW wheat, buyers of 3,000 corn, buyers of 2,500 soybeans, sellers of 1,000 soymeal, and sellers of 1,500 soyoil.
- SOYBEAN SALES: The U.S. Department of Agriculture confirmed private sales of 251,000 metric tons of U.S. soybeans to unknown destinations for delivery in the 2023/24 marketing year that began Sept. 1.
- FAILED WHEAT PURCHASE TALKS: Egypt’s state grains buyer GASC is believed to have no purchase in direct talks with trading houses on Monday about buying wheat without issuing an international tender, traders said.
- WHEAT PURCHASE: Egypt’s state grains buyer bought about a half a million metric tons of Russian wheat last week in a private deal, four traders told Reuters, succeeding in negotiating lower prices than those offered in the more traditional tenders. The General Authority for Supply Commodities (GASC) bought about 480,000 metric tons of Russian wheat from trading firm Solaris on Friday, at a price of about $270 a ton on a cost and freight basis (C&F), the traders said.
- WHEAT PURCHASE: South Korea’s Major Feedmill Group (MFG) purchased about 55,000 metric tons of animal feed wheat thought likely to be sourced from the Black Sea region in a private deal this week without issuing an international tender,
- CORN AND SOYMEAL TENDER: Iranian state-owned animal feed importer SLAL issued two international tenders to purchase up to 180,000 metric tons of animal feed corn and 120,000 tons of soymeal.
- RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 21,700 metric tonnes of rice all to be sourced from China.
- WHEAT TENDER: A Syrian state grains agency issued an international tender to purchase and import 200,000 metric tons of soft milling wheat.
USDA CROP PROGRESS: Corn Conditions 53% G/E, Soybeans 53%
Highlights from the report:
- Corn 53% G/E vs 56% last week, and 54% a year ago
- Corn dented 67% vs 51% last week, and 61% a year ago
- Corn dough 93% vs 88% last week, and 91% a year ago
- Corn mature 18% vs 9% last week, and 14% a year ago
- Soybeans 53% G/E vs 58% last week, and 57% a year ago
- Soybean drop leaves 16% vs 5% last week, and 9% a year ago
- Spring wheat harvest 74% G/E vs 54% last week, and 68% a year ago
- Winter wheat planted 1% vs 3% a year ago
- Cotton 31% G/E vs 33% last week, and 35% a year ago
- Sorghum 44% G/E vs 45% last week, and 21% a year ago
US Inspected 481k Tons of Corn for Export, 379k of Soybean
In week ending Aug. 31, according to the USDA’s weekly inspections report.
- Corn: 481k tons vs 600k the previous wk, 543k a yr ago
- Soybeans: 379k tons vs 326k the previous wk, 500k a yr ago
- Wheat: 300k tons vs 390k the previous wk, 539k a yr ago
Russia Attacked Ukraine’s Izmail With Drones at Night
Russian drones damaged grain elevators and agriculture firms operating near the Danube port of Izmail, Odesa regional governor Oleh Kiper says on Telegram.
- The area near Izmail port was under Russian drone attack for almost three hours
- One worker of an agriculture company died of wounds in a hospital
- Ukrainian Air Defense says on Telegram that 15 out of 25 Russian drones and all 8 missiles were shot down in the overnight attack at Ukraine
- All missiles targeting Kyiv were intercepted, municipal military administration says on Telegram
Palm Oil Seen Climbing More Than 10% on Poor Output: Oil World
Palm oil prices could rise by at least $100 a ton in the next four to six months amid poor production growth, according to Thomas Mielke, executive director of Hamburg-based Oil World.
- At around $900 a ton, prices are currently undervalued, he said in slides prepared for delivery in Kuching, Malaysia late Tuesday
- Palm oil production has lost its growth dynamics, which will raise dependence on soybeans, sunseed and rapeseed
- Global output is likely to rise by only 1.2m tons in the year ending September 2024, the smallest annual growth in four years
- Indonesian output is seen increasing by 0.7m tons and Malaysian production by 0.2m tons
- Global exports may rise by 0.5m tons; global production deficit and smaller stockpiles likely to spur higher prices
- El Niño may cause dryness until December or early 2024
- There has been an “alarming decline in average yields” for palm oil due to lack of replanting, a slowdown in new plantings, a shortage of workers, as well as sustainability and certification schemes
- Palm’s annual output growth seen slowing to 1.8m tons or less in the 10 years to 2030, from an average 2.9m tons in decade to 2020
- The growth in soybean plantings has been much bigger than palm’s in the past 20 years, especially in the most recent three years
- Global production growth of sunflower and rapeseed oils seen slowing to 0.7-1.0m tons in 2023-24 from 4.6m tons a year earlier
Poland Repeats Will Keep Ban on Ukraine Grain After Sept. 15
Poland will keep its embargo on Ukraine grain after the EU’s import ban ends on Sept. 15, Agriculture Minister Robert Telus tells reporters in Balkow.
- Some countries are also considering maintaining ban, Telus says, without naming them
- Supports keeping transit of Ukraine grains through EU countries and counts on EU subsidies for transit
EU Soft-Wheat Exports Fall 32% in Season Through Sept. 3
The European Union’s soft-wheat exports in the season that began July 1 reached 5.03m tons as of September 3, compared with 7.39m tons in a similar period a year earlier, the European Commission said on its website.
- Leading destinations include Morocco (1.05m tons), Algeria (457k tons) and Nigeria (430k tons)
- Barley exports are at 1.45m tons, down 27% y/y
- Corn imports are at 2.69m tons, down 41% y/y
Russia Says 2023 Agricultural Exports Up Nearly 25% Y/Y: Tass
Russia’s agricultural exports so far in 2023 total $28b, almost a quarter more than the same period of 2022, Agriculture Minister Dmitry Patrushev said at a meeting in the State Duma, according to Tass.
- Says exports in 2023 could total over $42b; last year’s revenues from agri exports were $41.7b
- Russia has harvested 112m tons of grain as of Sept. 6, Interfax cites Patrushev as saying
Ukraine sees its 2024 winter wheat area rising to 4.3 mln ha – ministry data
Ukraine’s agriculture ministry said on Tuesday the country’s 2024 winter wheat area was likely to rise to 4.3 million hectares from around 4.1 million hectares in 2023.
- Farmers have already started the winter wheat sowing, seeding the first 42,500 hectares or 1% of the expected sowing area, the ministry said in a statement.
- Ukraine is a traditional grower of winter wheat which accounts for at least 95% of the overall wheat output.
- The ministry also said farmers could sow 683,900 hectares of winter barley and 1.19 million hectares of winter rape.
- Ukraine is a major grain producer but the collapse in July of an agreement which had allowed safe grain exports via its Black Sea ports has led to speculation that farmers might sow less wheat because of shrinking profit margins due to costlier export routes.
SovEcon Ups Russia 2023-24 Wheat-Export Estimate to 48.6m Tons
SovEcon raises Russia wheat-export forecast to a record 48.6m tons from 48.1m tons, citing “increases in the production estimate, high export pace, and record-breaking sales early in the season.”
- Volume of outstanding sales of Russian wheat at end of August was approx. 6m tons, compared to 2.5m tons a year earlier
- Total grain export estimate increased to 60.7m tons from 59.1m tons
- “Attempts by the Russian Ministry of Agriculture to regulate export prices haven’t significantly impacted this season’s export campaign yet. However, possible interventions might have a more pronounced effect in the future”
Ukraine Starts Sowing Winter-Wheat, Rapeseed for 2024 Harvest
Ukrainian farmers have planted 42,500 hectares of winter wheat and 654,900 hectares of winter rapeseed so far for the 2024 harvest, according to a statement from the agriculture ministry.
- This compares with 5,170 hectares of winter-wheat and 686,000 hectares of rapeseed at a similar time a year earlier, the ministry’s website shows
- Barley sowing stands at 1,200 hectares, versus 2,000 hectares a year ago
US Agriculture Sentiment Weakens in August: Purdue Univ.
The Purdue University/CME Group’s agricultural sentiment index fell to 115 points in Aug. from 123 in July, according to a survey of 400 agricultural producers.
- This comes after rising the previous two months
- Current conditions component declined by 13 points from July
- Future expectations down by 5 points
- “When asked about top concerns for their farming operations in the next 12 months, producers continue to point to higher input prices and rising interest rates as their top two concerns,” according to the report’s authors, James Mintert and Michael Langemeier
India’s Back for More Urea as Ammonia Price Hints at Higher 4Q
Nitrogen spreads portend higher 4Q pricing after ammonia rose to urea’s nutrient level. Ammonia prices firmed last week, with Tampa up 32% to $390 a metric ton on a cost-and-freight basis. India’s Rashtriya Chemicals & Fertilizers called a urea tender earlier than expected on Sept. 4.
Farmers Snap Up Urea, Sending Ammonia Prices Higher
Nitrogen price pressure intensified last week, with Tampa ammonia rising 32% to $390 a metric ton (mt) cost and freight (CFR). Tampa climbed to parity with rest-of-world pricing, correcting spreads to match urea’s unit value amid sporadic global natural gas outages. Farmers buy nitrogen on a unit basis, and urea in August held a 13-cent-a-unit premium to ammonia, 160% above normal spreads. A September tender from India should support urea prices into 4Q, after China’s Sino-Agri ceased new export contracts on Sept. 4. A firm urea market portends further strength in ammonia prices, which seasonally rise into 4Q, supporting our expectation of higher nutrient prices in autumn.
Nutrien, Yara and CF are the largest publicly listed nitrogen producers. China is a marginal urea producer; when it exports, prices fall.
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