Global Ag News for Feb 14.24

TOP HEADLINES

Solar Use on US Farms Jumps 30% in Five Years as Wind Slows

Solar is in on the American farm, while the uptake for wind power is slowing.

Photovoltaic installations increased 30% on farms in the latest US Census of Agriculture released Tuesday. Some 116,758 farms had solar panels in 2022, compared with 90,142 in 2017. Wind turbine installation, meanwhile, grew by only 2.7% during the same period, to 14,511 farms.

The slight increase for wind follows a 56% jump in the previous census, which covered the five years to 2017.

Renewable energy helps farms become more sustainable, but it can be costly to install. Both solar and wind are getting a boost thanks to incentives from President Joe Biden’s Inflation Reduction Act, and the patchy energy grids in the American heartland present ample opportunities for growth.

Demand for renewables has also provided underlying support for farmland values, as owners seek to make money from the shift to clean energy.

Among other data in the long-awaited census, the amount of methane digesters, which are used by dairies and other livestock operations to capture the greenhouse gas, actually decreased to 680 farms in 2022 from 686 five years earlier.  In addition, the report shows that farmers, on average, are getting older while the size of their operations continues to increase.

FUTURES & WEATHER

Wheat prices overnight are down 11 in SRW, down 10 1/2 in HRW, down 8 1/2 in HRS; Corn is down 2 1/2; Soybeans down 7; Soymeal down $2.00; Soyoil down 0.02.

For the week so far wheat prices are down 12 3/4 in SRW, down 18 3/4 in HRW, down 19 in HRS; Corn is down 1/2; Soybeans down 6 3/4; Soymeal down $3.60; Soyoil down 0.30.

For the month to date wheat prices are down 19 1/4 in SRW, down 38 1/2 in HRW, down 29 in HRS; Corn is down 20; Soybeans down 48; Soymeal down $27.00; Soyoil up 1.19.

Year-To-Date nearby futures are down 6.8% in SRW, down 9.3% in HRW, down 8.1% in HRS; Corn is down 9.1%; Soybeans down 9.0%; Soymeal down 11.2%; Soyoil down 1.9%.

Malaysian palm oil prices overnight were up 47 ringgit (+1.20%) at 3948. China markets remain closed for Holiday.

There were changes in registrations (-20 HRW Wheat). Registration total: 772 SRW Wheat contracts; 0 Oats; 6 Corn; 468 Soybeans; 125 Soyoil; 1 Soymeal; 84 HRW Wheat.

Preliminary changes in futures Open Interest as of February 13 were: SRW Wheat down 5,262 contracts, HRW Wheat down 82, Corn up 28,127, Soybeans down 2,935, Soymeal up 4,365, Soyoil up 1,619.

Brazil: Scattered showers across central Brazil have become isolated. A front moving north from Argentina will bring heavier rain to southern and eastern areas. The south has been too dry for several weeks and needs the rain. By the weekend, showers are forecast to be widespread and heavy for much of the country, beneficial for everything but fieldwork as soybeans are still being harvest and safrinha corn is still being planted. Southern areas will not be wet for long as it gets unfavorably dry again next week.

Argentina: Heavy rain returned to the region and put an end to the hot and dry conditions that caused corn and soybeans to suffer from mid-January. Soil moisture has increased and crop conditions have stabilized. Another system is forecast to move into the country this weekend.

Europe: Scattered showers went through most of the continent over the weekend, including southern areas that have been that had been dry. The main storm track will be farther north for most of this week, though some showers may go through Spain on Thursday and southeastern areas and Italy this weekend. While crops are vulnerable to winterkill with no significant snow cover, there are no risks of arctic freeze.

Australia: Some isolated showers went through Queensland over the weekend, but many areas stayed dry. Eastern areas will catch some showers moving through this week, but most of these will be isolated. Heat across the west and southeast could be detrimental for cotton and sorghum.

Northern Plains: Several small systems will move through over the next couple of weeks. They may not bring much precipitation, though some streaks of heavier snow will be possible. But they will also have a tendency to bring down some cooler air starting on Wednesday.

Central/Southern Plains: A clipper will move off to the north on Wednesday and could bring some showers to northern areas. Another will move through the region on Thursday and Friday. But that one may be able to tap into more moisture and bring a few more streaks of showers, which may include some moderate snow. Clippers are likely to move through the area next week as well. Temperatures could vary wildly between these systems.

Midwest: A clipper will move through Wednesday and Thursday and bring more scattered showers but also some colder air. Another will follow quickly for Friday that may have some streaks of heavier precipitation as well. Bands of moderate to heavy snow will be a threat with both. Several more clippers will move through next week and temperatures could vary significantly from day to day as systems come and go.

Delta: Heavy rain went through the region over recent days, which continues to ease drought conditions and flooding has been more significant recently. Another system will come through on Friday and Saturday with more potential for rain.

The player sheet for Feb. 13 had funds: net sellers of 500 contracts of SRW wheat, buyers of 1,000 corn, sellers of 2,500 soybeans, sellers of 2,500 soymeal, and buyers of 1,500 soyoil.

TENDERS

• CORN SALE: South Korea’s Major Feedmill Group (MFG) purchased an estimated 68,000 metric tons of animal feed corn in a private deal last week without issuing an international tender
• CORN SALE: The Korea Feed Association (KFA) in South Korea purchased about 68,000 metric tons of animal feed corn expected to be sourced from South America or South Africa in a private deal on Feb. 8 without issuing an international tender
• FEED WHEAT SALE: South Korea’s Major Feedmill Group (MFG) purchased about 60,000 metric tons of animal feed wheat in a private deal on Tuesday without issuing an international tender
• SOYMEAL SALE: South Korean import group the Feed Leaders Committee (FLC) purchased up to 60,000 metric tons of soymeal to be sourced optionally from the United States, China, Brazil or Argentina on Tuesday
• MILLING WHEAT SALE: Jordan’s state grains buyer purchased about 60,000 metric tons of hard milling wheat to be sourced from optional origins in an international tender on Tuesday
• CORN SALE: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), on Tuesday said it had bought 120,000 metric tons of Ukrainian yellow corn in an international tender.
• CORN, SOYMEAL TENDER: Algerian state agency ONAB has issued international tenders to purchase up to 160,000 metric tons of animal feed corn and 35,000 tons of soymeal.
• MILLING WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is looking to buy a total of 115,035 metric tons of food-quality wheat from the United States, Canada and Australia in a regular tender that will close on Feb. 15.

PENDING TENDERS

• BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase up to 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 88,800 metric tons of rice to be sourced from the United States and China.
• WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 metric tons of milling wheat.

 

 

TODAY

 

ETHANOL: US Weekly Production Survey Before EIA Report

Output and stockpile projections for the week ending Feb. 9 are based on seven analyst estimates compiled by Bloomberg.

• Production seen higher than last week at 1.05m b/d
• Would be the third straight weekly increase after falling to the lowest since Feb. 2021
• Stockpile avg est. 25.146m bbl vs 24.779m a week ago

CROP SURVEY: US 2024-25 Corn Area Seen Falling to 91.6M Acres

US farmers seen planting 3m acres less of corn this year vs last year, according to the avg in a Bloomberg survey of as many as 21 analysts.

• Soybean planting seen rising by 3.1m acres from last year’s crop to 86.7m acres
• Wheat planting seen down by 2.1m acres to 47.5m acres
• Cotton seen up by 0.4m acres to 10.7m acres
• Analysts see US ending stocks increasing for all four commodities
• Click here for a table with all survey results
• NOTE: Analysts were asked to provide their own estimates on crops as opposed to predicting USDA’s estimates; survey conducted Feb. 9-13
• NOTE: USDA is scheduled to release its initial 2024-25 estimates at the annual Outlook Forum on Thursday

NOPA January US soybean crush seen at 189.928 million bushels

The U.S. soybean crush slowed in January from the prior month’s record as frigid weather disrupted operations at several processing plants, analysts said ahead of a National Oilseed Processors Association (NOPA) report due on Thursday.

NOPA members, who handle about 95% of all soybeans processed in the United States, were estimated to have crushed 189.928 million bushels last month, according to the average of estimates from nine analysts.

If the estimate is realized, it would be down 2.8% from the record-large monthly crush of 195.328 million bushels set in December but up 6.1% from the 179.007 million bushels processed in January 2023.

It would also be the largest January crush ever, topping the previous mark of 184.654 million bushels set in the first month of 2021, and the second-largest crush for any month on record. But the estimate suggested that the average processing pace slowed to 6.127 million bushels a day last month, down from a record 6.301 million bushels a day processed in November and December.

A harsh mid-January cold snap disrupted truck and rail transportation and slowed operations at several crush plants, analysts said. One large crush facility in Indiana was also down for nearly a week due to a damaged natural gas pipeline.

Estimates for the January crush ranged from 184.5 million to 196.015 million bushels, with a median of 190.0 million bushels.

The NOPA report is scheduled for release at 11 a.m. CST (1700 GMT) on Thursday.

Soyoil supplies held by NOPA members as of Jan. 31 were forecast at 1.409 billion lbs, based on estimates from seven analysts. If realized, it would be up 3.6% from the 1.360 billion lbs held by NOPA members at the end of December and the largest end-of-month stocks since July. Soyoil stocks estimates ranged from 1.284 billion to 1.500 billion lbs, with a median of 1.400 billion lbs.

EU Soft-Wheat Exports Drop 8% Y/y in Season Through Feb. 2

The European Union’s soft-wheat exports in the season that began July 1 were at 18.6m tons as of Feb. 2, compared with 20.2m tons a year earlier, the European Commission said on its website.

• NOTE: Data is until Feb. 2 due to technical issue
• Leading destinations include Morocco with 2.67m tons, Nigeria at 1.77m tons, Algeria with 1.61m tons
• Barley exports were at 3.48m tons, down 4% y/y
• Corn imports were at 10.6m tons, down 43% y/y

Ukraine to Plant More Barley and Wheat, Ministry Survey Shows

Ukrainian grain producers are set to plant more wheat, barley, soybean and rapeseed this spring, Agriculture Ministry says, citing a survey it conducted among farmers.

• Soybean planting is seen increasing 21% from previous year
• Spring barley planting is seen rising 7%, helped by additional export destinations
• Wheat plantings are seen rising by 2%
• Spring rapeseed areas are set to increase 24%
• Corn areas will probably drop by 9%
• Most farmers are still undecided about sunflower areas
• Total spring planting area may fall by 3.7%, or 500K hectares

Ukraine’s 2024 corn area seen down 9% y/y – survey

Farmers in Ukraine, a major global corn grower and exporter, are expected to reduce the area sown with corn by 9% year-on-year in 2024, a survey compiled by the country’s agriculture ministry showed on Tuesday.

The survey, released to Reuters before its official publication by the ministry, said the overall spring sowing area could fall by about 500,000 hectares this year, or by 3.7%.

The survey showed the fall in corn area could be partly offset by an increase in the area sown with sugar beet, rapeseed and soybeans.

“70% of respondents said they plan to increase the area under soybeans. As for sugar beet, 60% of those who planted the crop last season are going to expand the area slightly, by 17% in Ukraine as a whole,” the survey said.

Producers are still considering the area to sow with sunflowers.

Ukraine has harvested 28.15 million metric tons of corn from the 2023 crop, but about 2 million tons remain in an unharvested 320,000 hectares in several Ukrainian regions.

Agriculture minister Mykola Solsky told Reuters last week the ministry expected the 2024 spring sowing area would be the same as last year, though it could see a slight decrease in the worst case scenario.

Ukraine is a major global grain and oilseeds producer but its harvests have decreased since Russia invaded and occupied significant swathes of territory. The war, now in its 24th month and with no end in sight, has driven up global grain prices and disrupted supplies, especially to poorer countries.

Ukrainian farmers sowed a total of 12.75 million hectares of spring crops for the 2023 harvest, including 5.7 million hectares of various grains.

Ukraine on track to export all 2023 grain, says Britain

Ukraine is on track to export all grain from its 2023 harvest despite Russian attacks on Ukrainian ports and infrastructure, according to Britain’s foreign office, but the United Nations warns that the Black Sea export situation remains fragile.

Ukraine harvested about 80 million tons of grain and oilseeds in 2023, including an exportable surplus of about 50 million tons in the 2023/24 July-June season, the country’s government has said.

Ukrainian grain exports reached 25.2 million metric tons as of Feb. 9, analyst APK-Inform said last week. Ukraine’s agriculture ministry did not provide export data as its website was hacked last month and is now unavailable.

British government officials said that if Ukraine continues to ship 6 million tonnes a month by land and sea it would be on track to export all of its 2023-24 harvest by May.

“Despite repeated Russian attacks on Ukrainian ports and infrastructure, Ukraine has succeeded in pushing back much of the Russian navy from Crimea, securing a globally important export route in the Black Sea,” British Foreign Secretary David Cameron said in a statement to Reuters.

Cameron described the export forecast as “great news” for Ukraine. It comes as Kyiv faces ammunition shortages and uncertainty over the future of U.S. military aid, which has been on hold for months due to Republican opposition, even as Russian forces begin to gain the upper hand on the battlefield.

Ukraine launched a shipping corridor hugging its western Black Sea coast near Romania and Bulgaria in August, a month after Russia quit a year-long landmark deal – brokered by the United Nations and Turkey – that had allowed the safe Black Sea export of nearly 33 million metric tons of Ukraine grain.

“Exports through the Ukrainian maritime corridor from the Odesa ports have been steadily increasing, which is good news not only for the Ukrainian economy but for global food security. The situation though remains fragile,” a U.N. spokesperson told Reuters.

Recent warmer weather keeps Russian wheat production outlook afloat – Refinitiv Commodities Research

2024/25 RUSSIA WHEAT PRODUCTION: 87.7 [85.9-92.1] MILLION TONS, UNCHANGED FROM LAST UPDATE

Recent warmer weather sustains 2024/25 Russia wheat winter production at 87.7 [85.9-92.1] million tons. Our current estimate does not include area of occupied Ukrainian Oblasts. According to Rosstat official data, Russia closed the 2023/2024 wheat production season with 92.8 million tons (mmt). The total wheat production number is split into 63.8 mmt of winter wheat and 29 mmt of spring wheat.

Since LSEG’s last update, widespread abnormal warmth was observed over the region with temperatures above average (5-12 °C) across the country and highest levels noted in the Southern and Siberian Districts. Warm temperatures contributed snow cover reduction across the Southern Districts, but a solid layer remains across the rest of the country. Precipitation surpluses were only observed in a few Oblasts in Volga, and Southern Districts up to 10-30 mm above normal.

According to the latest weather forecasts, a cool down is expected, and temperatures will reach normal levels. Over the next two weeks, no cold outbreaks are expected over the region and thanks to that no major impacts on crops are expected. The only concern remains at soil moisture front, since as of now there are no deficits in the region, but excessive moisture after thaw events over the last weeks might cause issues for the upcoming spring wheat plantings.

Export duty on Russian wheat rises 11.8% to 4,058.9 rubles/tonne as of February 14 – Agriculture Ministry

The export duty on Russian wheat has risen 11.8% to 4,058.9 rubles per tonne as of February 14 from 3,804.6 rubles per tonne during the previous duty period, the Agriculture Ministry said.

The duty on barley has declined markedly to 219.5 rubles per tonne from 827 rubles per tonne, while the duty on corn has risen sharply to 2,278.7 rubles per tonne from 1,339.8 rubles per tonne.

The duties are based on indicative prices of $251.10 per tonne for wheat against $251.10 per tonne the previous period, $178.30 per tonne for barley versus $190.90 per tonne, and $210.70 per tonne for corn against $199.10 per tonne.  The latest duties are valid until February 20, inclusive.

The Russian government on June 2, 2021, introduced a grain damper mechanism that stipulates floating duties on exports of wheat, corn, and barley, as well as returning the funds received from the duties in order to subsidize agricultural producers. The duties are calculated weekly on the basis of price indicators based on the value of export contracts registered on the Moscow Exchange (MOEX: MOEX).

The government on June 30, 2022, adopted a resolution to convert the duties into rubles as of July 2022. The duty totals 70% of the difference between the baseline price and the indicative price.

The Agriculture Ministry on June 1, 2023, hiked the baseline price for calculating the export duty on wheat, the so-called cut-off price, to 17,000 rubles per tonne from 15,000 rubles per tonne, and raised the baseline price on barley and corn to 15,875 rubles per tonne from 13,875 rubles per tonne.

Number of Farms in America Is Shrinking as Producers Get Older

• US farm count drops to 1.9 million in 2022, USDA says
• Surging costs add to the hurdles of growing enough food

The number of farms in America is shrinking as growers get older and producing crops gets a lot more expensive.

The US had 1.9 million farms in 2022, a 6.9% drop from five years ago and the lowest since at least 1992, according to data from the US Department of Agriculture’s Census of Agriculture released on Tuesday. The total acreage used in farms dropped about 2.2%.

The survey, conducted every five years, shows an increasingly challenging outlook for food production in the US as the population grows. The high cost of land and equipment has raised the bar of entry into agriculture, making it more expensive for the next generation to produce crops.

Meanwhile, the average age of producers continued to climb, reaching 58.1 years in 2022.

 

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