Global Ag News for Mar 6.24

TOP HEADLINES

Norway Reduces Salmon Farm Capacity to Limit Impact on Wild Fish

Norway will cut production from salmon pens in two areas along its coast to reduce the impact of lice on wild populations of the pink-fleshed fish. Capacity will be lowered by 6% from Karmoy to Sotra and Nordhordland to Stadt, both on the west coast around Bergen, the government said in a statement on Wednesday. Production can be raised by as much as 6% in six other areas, while there won’t be any changes in five regions.

Norway’s salmon farming industry makes up more than half of global supply, benefiting from favorable conditions along its fjords and coastline that are difficult to replicate elsewhere. The industry has grown so big that wild salmon and trout also suffer from the lice, which thrive in the enclosed pens. To limit that impact, the government makes changes to the capacity of fish farms along its coast every other year.

Areas where lice pose a particular threat to wild fish are ordered to cut capacity, while those regions where the parasite is well controlled can increase how much they can farm.

In areas where output can be increased, 1% will be offered to farmers at a fixed price of 170,000 kroner ($16,100) per metric ton, while the rest will be sold by an auction of new permits. The decision can potentially add about 21,000 tons in those areas where lice are under control, the government said.

FUTURES & WEATHER

Wheat prices overnight are down 7 1/4 in SRW, down 9 1/2 in HRW, down 7 1/4 in HRS; Corn is up 1/4; Soybeans up 1/2; Soymeal down $2.20; Soyoil up 0.45.

For the week so far wheat prices are down 14 in SRW, down 4 3/4 in HRW, up 4 1/2 in HRS; Corn is up 1 3/4; Soybeans down 1 3/4; Soymeal down $4.60; Soyoil up 0.33.

For the month to date wheat prices are down 32 1/2 in SRW, down 27 1/2 in HRW, down 10 3/4 in HRS; Corn is down 3; Soybeans up 8 3/4; Soymeal down $1.50; Soyoil up 0.28.

Year-To-Date nearby futures are down 13.1% in SRW, down 7.9% in HRW, down 10.4% in HRS; Corn is down 12.4%; Soybeans down 11.8%; Soymeal down 14.2%; Soyoil down 7.0%.

Chinese Ag futures (MAY 24) Soybeans up 40 yuan; Soymeal up 5; Soyoil up 66; Palm oil up 108; Corn up 7 — Malaysian Palm is up 95. Malaysian palm oil prices overnight were up 95 ringgit (+2.38%) at 4081.

There were changes in registrations (-84 Soybeans). Registration total: 640 SRW Wheat contracts; 0 Oats; 116 Corn; 703 Soybeans; 646 Soyoil; 1 Soymeal; 0 HRW Wheat.

Preliminary changes in futures Open Interest as of March 5 were: SRW Wheat up 13,517 contracts, HRW Wheat down 331, Corn up 443, Soybeans up 12,028, Soymeal down 1,546, Soyoil up 9,257.

Brazil: Wet season showers in central Brazil continue to be widely scattered through this week, favorable for emerging safrinha corn. A front in southern Brazil will be active for much of this week as well as it bends around the region, favoring an increase in soil moisture for immature long-season crops and for the newly planted safrinha corn. A small area around Mato Grosso do Sul is in between the favorable areas of rainfall and could be too dry for the new crop.

Argentina: A front brought some heavy rain to northern areas over the weekend, while it was more isolated over southern areas. Northern areas will continue to see showers with the front stuck in the area through Thursday. Another front will move in southern areas on Wednesday with more waves of showers moving northward through the weekend. The rainfall should be favorable for most areas, but is also scattered enough that it may miss some key areas across the south that could use some more rain. The overall pattern is a favorable for reproductive to filling corn and soybeans, however.

Europe: The main low continues to reload and bring more systems into western Europe into the Mediterranean into next week. A stronger cold front will plow south across eastern areas later this week with a significant threat of cold air for next week if a system moving eastward through the continent phases up with it. That could pose a threat to some winter wheat that has awakened early, but likely wouldn’t last long or be too intense.

Black Sea: Drier conditions are likely most of this week, but a front coming down from the north and a system moving through the Mediterranean may produce some needed precipitation, including snowfall in the region Sunday into Tuesday. That may include some cold air, but models are keeping anything intense farther north and east. Any drop in temperatures should not have a dramatic effect on wheat that is still awakening from dormancy for the most part.

Australia: Many areas saw some needed rainfall over the weekend, but will be drier with more of the rain falling over the Outback this week. We will be watching a system over western areas with some shower potential late this week, but that is about it. Above-normal temperatures will be reducing soil moisture in most places this week, which is a concern for the coming winter wheat crop that begins to be planted in about six weeks. The reduction of El Nino and eventual turn to La Nina should favor the winter wheat crop later this year, however.

Northern Plains: Some cooler air will remain around the next couple of days before rising again by this weekend. In the cooler air, more showers will be possible through Thursday, mostly as some light snow.

Central/Southern Plains: A system will move through Wednesday night through Friday with widespread scattered showers. That may include some pockets of snow, mostly in the High Plains, but will help add to soil moisture for helping to fight any outstanding wildfires. It will also help to replace soil moisture losses due to higher winds and temperatures that have sapped it from the topsoil recently.

Midwest: A cold front continues to move across the region Tuesday into Wednesday with scattered showers and thunderstorms. Though temperatures will decrease behind the front, they will still be above normal. Another storm system will move through Thursday through the weekend with more widespread precipitation and chances for snow in some areas. Both systems should help with topsoil moisture. Temperatures still remain warm going into mid-March and may coax some early planting across the south in the next couple of weeks if the forecast is benign.

Delta: Above-normal temperatures continue through mid-March while a couple of systems bring more rainfall through the region this week. The combination of good soil moisture and warm temperatures may coax some early planting in the region over the next couple of weeks.

The player sheet for Mar. 5 had funds: net sellers of 6,000 contracts of SRW wheat, sellers of 3,000 corn, sellers of 2,500 soybeans, sellers of 2,000 soymeal, and sellers of 1,000 soyoil.

TENDERS

• WHEAT PURCHASE: Algeria’s state grains agency OAIC is believed to have purchased between 870,000 to 900,000 metric tons of milling wheat in an international tender on Tuesday
• CORN PURCHASE: Chinese importers are believed to have purchased at least 65,000 metric tons of animal feed corn from Ukraine in deals on Monday
• WHEAT PURCHASE: Jordan’s state grains buyer purchased about 60,000 metric tons of hard milling wheat in an international tender on Tuesday
• FEED WHEAT PURCHASE: South Korean importer groups the Feed Leaders Committee (FLC) and Korea Feed Association (KFA) jointly purchased about 60,000 metric tons of animal feed wheat from optional origins in a private deal on Tuesday without international tenders being issued
• FEED WHEAT PURCHASE: 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.
• WHEAT AND BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries said on Wednesday it would seek 60,000 metric tons of feed wheat and 20,000 tons of feed barley to be loaded by June 30 and arrive in Japan by Aug. 29, via a simultaneous buy and sell auction that will be held on March 13.

PENDING TENDERS

• CORN TENDER: Leading South Korean feedmaker Nonghyup Feed Inc (NOFI) issued an international tender to purchase up to 138,000 metric tons of animal feed corn to be sourced optionally from the U.S., South America or South Africa
• BARLEY TENDER: Jordan’s state grains buyer has 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 metric tons of milling wheat
• CORN, BARLEY AND SOYMEAL TENDER: Iranian state-owned animal feed importer SLAL issued international tenders to purchase up to 180,000 tonnes of animal feed corn, 120,000 tons of feed barley and 120,000 tons of soymeal
• SUGAR TENDER: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), is seeking 50,000 tonnes of raw cane sugar of any origin in an international tender, it said in a statement. The deadline for offers is March 9, with arrival set for April 15-30 and/or May 1-15.

 

 

TODAY

 

ETHANOL: US Weekly Production Survey Before EIA Report

Output and stockpile projections for the week ending March 1 are based on seven analyst estimates compiled by Bloomberg.

• Production seen lower than last week at 1.071m b/d
• Stockpile avg est. 26.132m bbl vs 26.022m a week ago
• Would be the highest since March of last year

Brazil Farmers To Reap 79.97 Million Tns Of Second Corn In 2023/2024 Crop -21.9% From Previous Year – Patria

• BRAZIL 2023/2024 SOYBEAN CROP SEEN AT 143.18 MILLION TNS, -7.4% FROM PREVIOUS YEAR – PATRIA AGRONEGOCIOS
• BRAZIL 2023/2024 TOTAL CORN CROP SEEN AT 110.29 MILLION TNS, -16.4% FROM PREVIOUS YEAR – PATRIA AGRONEGOCIOS
• BRAZIL FARMERS TO REAP 79.97 MILLION TNS OF SECOND CORN IN 2023/2024 CROP. -21.9% FROM PREVIOUS YEAR – PATRIA

Argentina farmlands to see drier autumn as El Nino fades, says grains exchange

Rainfall in Argentina is set to become less frequent as the El Nino weather phenomenon subsides, giving way to a drier autumn and the possibility of a La Nina climate pattern, the Buenos Aires Grains Exchange said on Tuesday.

Argentina is a key global food exporter, and output in the current 2023/24 season has benefited from higher-than-usual rainfall drive by El Nino.

But El Nino is in its “dissipation stage,” which will “give way to the development of a new state of the climate system,” the grains exchange said in its monthly climate report.

Abundant rains last month boosted many soybean and corn lots currently in development stages. Their harvest begins in April, while the planting of wheat, one of the first crops in Argentina’s 2024/25, kicks off in May.

El Nino’s benefits, however, could be followed by the weather pattern’s counterpart, La Nina, which can bring cooler and drier conditions, the exchange said.

Unlike El Nino, La Nina decreases precipitation. In the 2022/23 season, Argentina suffered the worst drought in official records under La Nina conditions.

The exchange currently forecasts Argentina’s 2023/24 soybean crop production at 52.5 million metric tons, with the corn crop seen at 56.5 million tons.

EU Soft-Wheat Exports Fell 2% Y/y in Season Through Feb. 28

The European Union’s soft-wheat exports in the season that began July 1 were at 21m tons by the end of February, compared with 21.9m tons a year earlier, the European Commission said on its website.

• NOTE: Data is until Feb. 28 due to a technical issue; Data for Ireland missing from June 2023 and import data for Bulgaria available until Jan. 2024
• Leading destinations include Morocco with 3.1m tons, Nigeria at 2.0m tons, Algeria with 2.0m tons
• Barley exports were at 3.8m tons, down 13% y/y
• Corn imports were at 12m tons, down 40% y/y

Southeast Asia’s palm production seen below expectation, says analyst Mistry

Malaysian palm oil is expected to trade between 3,900-4,500 ringgit ($824-950.77) per metric ton from now until June, as supplies are likely to tighten in the second quarter, industry analyst Dorab Mistry said on Wednesday.

“Palm production in Southeast Asia is not coming up to expectation,” Mistry, the director of Indian consumer goods company Godrej International, said at a price outlook conference in Kuala Lumpur.

On Wednesday, the benchmark was trading at 4,046 ringgit ($855.75) per ton. In November, Mistry had forecast palm oil to trade between 3,700 and 4,500 ringgit per ton until June. On Wednesday, he reiterated that 2024 palm oil output is likely to fall by 1 million metric tons in the world’s biggest producer Indonesia, and remain stagnant in second-biggest producer Malaysia.

Global vegetable oil demand from the food and energy sectors is expected to rise by 6 million metric tons in 2023/24, but supplies are projected to increase by only 3.1 million metric tons, he said. The El Niño hot and dry weather phenomenon in 2023 turned out to be a lot milder than expected and hardly made an impact in the palm-producing areas, he said. In the past, the El Niño has squeezed palm oil yields in the main producers, Indonesia and Malaysia.

Sunflower oil supplies from top producers Russia and Ukraine are not affected by the ongoing war between the two countries and are shipped at lower prices because of currency depreciation against the U.S. dollar, he added.

Palm Oil May Rally to 4,500 Ringgit on Supply Squeeze: Mistry

Palm oil may climb as high as 4,500 ringgit ($951) a ton in coming months on tightening supply, with production looking “a bit anemic,” according to veteran trader Dorab Mistry, who added that North American weather could be a bullish spark.

• Benchmark prices in Kuala Lumpur are forecast to trade between 3,900 and 4,500 ringgit from now until June, Mistry, a director at Godrej International Ltd., said in slides prepared for an industry conference in Kuala Lumpur on Wednesday
  • NOTE: Mistry’s latest forecast compares with his January prediction of prices trading between 3,600 and 4,200 ringgit in 1H 2024
  • NOTE: Palm oil hit a six-month high of 4,050 ringgit in Kuala Lumpur Wednesday
• Price trajectory will depend on palm production as well as weather in North America in April-July, which will affect supply of rival soy
• April-June will be tightest months for palm oil supply
• “Planting weather in North America holds the key to the price outlook from May onwards” he said. “Any weather problem in North America will light a deadly fuse”
• Mistry reiterates forecast for palm oil output in top grower Indonesia to be lower by at least 1m tons in 2024 from a year earlier; Malaysian output seen unchanged
• India’s vegetable oil imports in 2023-24 seen at 16.02m tons vs 16.54m tons a year earlier
  • Consumption and demand are healthy but Indian farmers are holding large stocks of 2023 oilseeds, which will hurt imports
  • Palm oil imports seen easing to 9.5m tons from 9.79m tons; soybean oil purchases expected to be 3.5m tons vs 3.68m tons; sunflower oil imports likely unchanged at 3m tons
• World vegetable oil supply in 2023-24 seen rising by 3.1m tons vs an increase in demand of 6m tons

 

Indonesia’s 2024 palm oil exports seen down at 29.5 mln T, says palm oil association

Indonesia’s 2024 palm oil exports are seen at 29.5 million metric tons, down from 30.25 million tons last year, the Indonesia Palm Oil Association (GAPKI) said at an industry conference on Wednesday.

Meanwhile, palm oil output in the world’s biggest producer of the edible oil is expected to rise by 2.26% to 54.4 million tons, GAPKI official Fadhil Hasan said. Indonesia’s palm oil inventories by end of 2024 are estimated at 5.25 million tons

Indonesian Palm Oil Exports to Drop as Local Demand Rises: Gapki

Palm oil exports from top supplier Indonesia are likely to decline this year as domestic consumption increases, according to Mohamad Fadhil Hasan, head of the Foreign Affairs Division at the Indonesian Palm Oil Association, known as Gapki.

• Shipments are estimated at 29.50m tons in 2024 compared with 32.20m last year, while consumption is set to expand to 24.10m tons from 22.19m, he said at an industry conference in Kuala Lumpur
• Consumption for biodiesel is seen rising to 11.60m tons in 2024 from 10.62m a year earlier
• Mandatory biofuel blending may increase to B40 from B35 in 2H 2024
• Palm oil production will probably be 54.40m tons versus 53.20m in 2023, with ending stockpiles at 5.25m compared with 4.46m a year earlier
• El Niño’s impact on the country’s palm oil production turned out to be insignificant: the weather event only affected small areas, especially in the southern part of Sumatra and in Java
• Replanting of old oil palms has been below target; still, there’s hope for productivity to increase in the next 3-4 years
• Lower economic growth in some major palm oil importing countries will weigh on demand this year
• CPO prices forecast to average $900-$1,000/ton in 2024 vs $960 in 2023
• Prices will rise slightly in 1H, but may drop in 2H on higher seasonal output and if there is no change in the mandatory biofuel program

Palm Oil May Rise to 4,300 Ringgit in Next Three Months: Mielke

Palm oil futures could increase to 4,300 ringgit a ton in the next three months as production in top supplier Indonesia stagnates, according to Thomas Mielke, executive director of Hamburg-based Oil World.

• Prices will likely move in a range of 3,800 ringgit to 4,300 ringgit over that period, he told an industry conference in Kuala Lumpur
• NOTE: Futures traded at 4,041 ringgit by 12:10pm in Kuala Lumpur on Wednesday
• World exports of palm oil are likely to decline 2.5 million tons to 51 million tons in the year to September 2024, Mielke said
• Indonesian palm oil production will probably be about stagnant in 2024; Malaysian output will be near 18.6m tons this year
• Palm oil’s premium to soybean oil may only last another few weeks; it may lose that premium in April or early May as prices of soybean oil and sunflower oil appreciate
• Despite weather problems in Brazil, global soybean production will likely post a surplus of at least 13m tons in 2023-24
• Vegetable oil prices will be supported by a global production deficit

El Niño Has Minimal Impact on Malaysia’s Palm Oil Output: MPOB

Malaysia’s palm oil production will only see a minimal impact from El Niño, as there wasn’t a prolonged spell of dry weather last year, Mohamad Helmy Othman Basha, Chairman of the Malaysian Palm Oil Board, said on the sidelines of a conference in Kuala Lumpur.

• Output may increase slightly to around 18.7-18.8m tons this year from about 18.6m tons in 2023, said Mohamad Helmy, who is also Group Managing Director of Sime Darby Plantation Bhd., the world’s biggest palm oil planter by area
• Still, parts of Indonesia suffered a severe impact, including Kalimantan and Sumatra, which could weigh on this year’s output
• Replanting of aging trees and addressing labor shortages via automation and specialization are needed to improve stagnating yields
  • Automation in non-harvesting operations could start to be implemented within three years, although it will take longer for harvesting
• Malaysian yields are averaging at about 3.3 tons of crude palm oil per hectare
  • It is “not impossible” to get an additional 1 ton/ha; doing so within 7-10 years would be “quite an achievement”
• Palm oil that complies with the new EU deforestation regulations can “easily be satisfied” by major plantation companies, but the rules are problematic for smallholders

Ukraine’s Grain Exports Drop 9% Y/y So Far in the Season

Ukraine’s grain exports in the season that started July 1 now total nearly 30m tons, down 9% from the same period a year ago, Agriculture Ministry data shows.

• The total includes:
• Almost 12m tons of wheat, including 163k tons so far in March
  • That’s about 4% higher y/y
• 1.6m tons of barley, down 22% y/y
• 16.1m tons of corn, down 16% y/y

Ukraine grain exports at 774,000 T so far in March, ministry says

Ukraine’s grain exports so far in March have totalled 774,000 metric tons against 641,000 tons in the same period a year earlier, agriculture ministry data showed on Wednesday.

Ukraine’s grain exports in the 2023/24 July-June marketing season have fallen to about 30.4 million tons from 32.9 million a year earlier, the ministry data showed. Exports included 12.1 million tons of wheat, 16.4 million tons of corn and 1.69 million tons of barley. Ukraine has traditionally exported around 95% of its grain via its deep-water Black Sea ports.

In February, Ukraine exported 5.8 million tons of various grains, 11.5% more than a year ago. The ministry gave no explanation for the increase. Ukrainian grain traders union UGA said that Ukrainian combined grain and oilseed exports totalled 6.2 million tons in February versus 5.4 million in January and 5.99 million in December. The Ukrainian government expects a harvest of 81.3 million tons of grain and oilseeds in 2023, with a 2023/24 exportable surplus of about 50 million tons.

Ukraine’s Kernel Acquires Bulk Carrier to Expand Export Options

Ukrainian grain and sunflower-oil producer Kernel bought a third bulk carrier to expand export options, the company said in its annual report.

• Kernel acquired the carrier, with capacity of 50k tons, in December
• It’s also completed the acquisition of rights to all 15k tons of storage capacity at the Reni sunflower-oil terminal on the Danube River
  • That access will allow exports in the event that Black Sea ports are blocked
• The company started exporting sunflower oil from its terminal in Chornomorsk in January

WTO Panel Sides Largely With EU in Malaysia Biofuels Case

Malaysia failed to prove several parts of its case, the WTO says in documents posted on website.

• Panel also found some deficiencies and one panelist dissented, agreeing with Malaysia
• Two separate cases were filed by Malaysia and Indonesia; on March 4, Indonesia asked that the panel suspend its work for two months
• The Asian countries account for most of the world’s output of palm oil and palm oil-based biofuel
• EU should conform to the extent that it hasn’t done so already

Putin Says Grain Exports May Reach 65M Tons in 2023/2024: IFX

Russian President Vladimir Putin said his nation may export 65m metric tons of grain in the 2023/2024 agricultural year, Interfax reports.

• Putin says at meeting with representatives of agriculture sector that Russia is ready to work with BRICS partners on proposal to create exchange indicators for grain
• NOTE: Russia exported 60m tons of grain in 2023-2023 season, according to Interfax

Trade estimates for Statistics Canada planting intentions report

Statistics Canada is scheduled to release estimates of Canadian crop planting intentions on Monday, March 11, using a farmer survey, at 7:30 a.m. CDT (1230 GMT).

US Agriculture Sentiment Rises in February: Purdue Univ.

The Purdue University/CME Group’s agricultural sentiment index increased to 111 points in Feb. from 106 in Jan., according to a survey of 400 agricultural producers.

• Current conditions component unchanged from Jan. at 103 points
• Future expectations up by 7 points

Paraguay Declares Emergency on Locusts in the Chaco Region

Paraguay has declared a phytosanitary emergency in the western Chaco region due to large numbers of locusts, plant health and seed agency Senave said in a statement.

Senave will monitor the situation and control the insects with chemicals if necessary

Rainfall in Much of Western Australia Below Average in Feb.: BOM

Rainfall was below average across much of Western Australia, South Australia, Victoria and Tasmania, and small areas of south-eastern Queensland, southern New South Wales and the Top End of the Northern Territory, the Bureau of Meteorology said in its drought statement.

• Areas with rainfall deficiencies extended further north in the Pilbara district in Western Australia but contracted in the Gascoyne and Central West districts
• Longer-term rainfall deficiencies of 10 to 15 months, are largely in Western Australia, with some small areas in north-eastern NSW and south-eastern Queensland
• Feb. soil moisture was very much below average for large areas of Western Australia and scattered areas in the Northern Territory and South Australia
• NOTE: The long-range forecast, released Feb. 29, indicates that for March to May, below-median rainfall is likely across much of northern and eastern Australia, and the far south-west of Western Australia

 

 

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