Global Ag News for Aug 7.24

TOP HEADLINES

China has not resumed buying chicken from Brazil, say government officials

China has not resumed buying chicken products from Brazil after an outbreak of Newcastle disease was detected last month, two agriculture ministry officials told Reuters on Tuesday.

Speaking on the sidelines of an industry event, they said talks are still talking place with Chinese authorities even after the government controlled the outbreak, which local authorities said was an isolated case in the country’s southernmost state of Rio Grande do Sul.

The officials avoided predicting when sales could resume.

China is Brazil’s most important trade partner, and the Latin American country is the world largest chicken exporter.

Roberto Perosa, foreign relations and commerce secretary at the Brazilian agriculture ministry, said China might contact Brazil regarding the end of the embargo in coming days, potentially next week.

Carlos Goulart, Brazil’s secretary for agricultural defense, said he was relieved Brazil was able to declare on Tuesday the end of “a health emergency period” in Rio Grande do Sul, which could help matters after one case of Newcastle was confirmed, but quickly controlled, at a local *commercial farm* in the town of Anta Gorda.

 

FUTURES & WEATHER

Wheat prices overnight are up 5 1/2 in SRW, up 5 1/4 in HRW, up 4 1/2 in HRS; Corn is down 2 1/2; Soybeans down 9 3/4; Soymeal down $3.90; Soyoil down 0.03.

For the week so far wheat prices are up 9 1/2 in SRW, up 7 in HRW, up 2 in HRS; Corn is down 1/2; Soybeans down 10 1/4; Soymeal down $1.90; Soyoil down 0.90.

For the month to date wheat prices are up 21 1/2 in SRW, up 17 3/4 in HRW, up 15 1/2 in HRS; Corn is up 3; Soybeans down 5 1/2; Soymeal up $7.00; Soyoil down 2.39.

Year-To-Date nearby futures are down 12.7% in SRW, down 11.7% in HRW, down 17.5% in HRS; Corn is down 18.2%; Soybeans down 21.1%; Soymeal down 11.0%; Soyoil down 14.6%.

Chinese Ag futures (SEP 24) Soybeans up 1 yuan; Soymeal down 41; Soyoil down 86; Palm oil down 114; Corn down 12 — Malaysian Palm is down 9.

Malaysian palm oil prices overnight were down 9 ringgit (-0.24%) at 3696.

 

There were changes in registrations (-2 Corn, -3 Soybeans). Registration total: 424 SRW Wheat contracts; 6 Oats; 15 Corn; 10 Soybeans; 1,166 Soyoil; 0 Soymeal; 0 HRW Wheat.

Preliminary changes in futures Open Interest as of August 6 were: SRW Wheat down 3,719 contracts, HRW Wheat up 3,295, Corn down 5,119, Soybeans down 1,009, Soymeal down 3,384, Soyoil down 543.

 

August Deliveries

• Soybeans
  • 8/6: 0
  • Total:  123
• Soybean Oil
  • 8/6: 115
  • Total: 1,334
• Soybean Meal
  • Total: 0

 

Northern Plains: A system will send another front into the region Tuesday and Wednesday with scattered showers, and cooler air settling into the region going into next week. More showers are possible this weekend and next week, though models disagree on the coverage and timing. The rainfall is likely too late for the wheat crop, but could be beneficial for corn and soybeans if it is not too heavy and does not cause flooding.

Central/Southern Plains: A front will continue to sag south into the region Tuesday with some milder temperatures across the north. Another front will move into the region with a reinforcing shot of cooler air for late this week and weekend. The front may not get into the Southern Plains, however. More rain will be possible this weekend and next week, but models disagree on the coverage, timing, and intensity of precipitation. Any rainfall would certainly be helpful for filling corn and soybeans across northern zones. After a cooler weekend across the north, temperatures should rise again next week.

Midwest: A front continues to push through most of the region the next couple of days with milder air and another front will push through late this week and weekend with another burst of cooler air. Models do not produce much precipitation, but have some patches of showers that will miss more areas than they hit. Dryness would not be favorable for filling corn and soybeans, but the forecast reduction in temperatures may offset some of the stress.

Delta: Dry conditions are expected all this week despite a front moving into northern areas early this week and another to move in late week. Temperatures are likely to stay above normal, but the confidence of heat lasting into next week is low. Either way, the lack of rainfall will cause soil moisture to continue to fall and some areas are getting dry, unfavorable for filling soybeans and cotton.

Canadian Prairies: A system will continue to push eastward through Wednesday and could leave behind an upper-level low into the weekend. Widespread showers have occurred and will continue this week and temperatures will be much cooler than the last few weeks. Even so, the better weather conditions are too late for much of the wheat and canola crops in the region that are on their way to maturity. In fact, the rain could lead to quality issues in some areas while delaying the early portions of harvest.

 

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

 

TENDERS

• WHEAT TENDER: Egypt’s state grains buyer, the General Authority for Supply Commodities, announced a massive tender for 3.8 million metric tons of wheat to cover imports between October 2024 and April 2025, its largest ever, according to traders.
• WHEAT TENDER: Algeria’s state grains agency OAIC issued an international tender to buy soft milling wheat to be sourced from optional origins
• WHEAT TENDER PASSED: Jordan’s state grain buyer is believed to have made no purchase in an international tender to buy 120,000 metric tons of milling wheat which closed on Tuesday.
• WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy a total of 83,445 metric tons of food-quality wheat from the United States, Canada and Australia in a regular tender that will close on Aug. 8.

PENDING TENDERS

• WHEAT TENDER: Jordan’s state grain buyer has issued an international tender to buy up to 120,000 metric tons of milling wheat which can be sourced from optional origins
• BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase up to 120,000 metric tons of animal feed barley.
• VEGETABLE OILS TENDER: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), said it was seeking vegetable oils in an international tender for arrival Oct. 15-31 and/or Nov. 1-15. GASC is seeking 30,000 metric tons of soyoil and 10,000 metric tons of sunflower oil. GASC said traders should submit bids for payment at sight using funding from the International Islamic Trade Finance Corporation. The deadline for offers is Aug. 7.

 

 

TODAY

ETHANOL: US Weekly Production Survey Before EIA Report

Output and stockpile projections for the week ending Aug. 2 are based on seven analyst estimates compiled by Bloomberg.

• Production seen lower than last week at 1.091m b/d
• Stockpile avg est. 24.054m bbl vs 23.973m a week ago

 

Brazil July Agriculture Exports by Volume: MDIC

• Cotton exports rose 130% in July from a year ago
• Coffee exports rose 44% y/y
• Soybean exports rose 16% y/y

 

China July Trade: Customs

General Administration of Customs says on website.

• Soybean Imports 9.853m Tons
  • Soybean imports YTD fell 1.3% y/y to 58.333m tons
• Edible vegetable oil imports in July 645,000 tons
  • Edible vegetable oil imports YTD fell 21% y/y to 4.13m tons
• Meat (including offal) imports in July 540,000 tons
  • Meat (including offal) imports YTD fell 14.5% y/y to 3.835m tons
• Fertilizer exports in July 3.072m tons
  • Fertilizer exports YTD rose 1.3% y/y to 15.678m tons

 

SovEcon Cuts Ukraine Corn Production Forecast 7.2% to 25.6M Tons

SovEcon cut its estimate for Ukrainian corn production in the season that started July 1. to 25.6m tons from 27.6m tons a month ago, it said in an emailed statement.

• Estimate was lowered due to hot and dry weather during July limiting yield potential: Managing Director Andrey Sizov
  • “Further decreases in the forecast cannot be ruled out due to the continued lack of precipitation”
• Wheat production estimate was also cut, now seen at 19.7m tons, down from 20.4m tons a month ago
  • Crop yields currently seen at 4.2 tons per hectare, down from 4.4 t/h a year ago

 

Ukraine Exported 42M Tons of Grain Via Black Sea Since September

Ukraine has exported 62 million tons in cargo shipments through a corridor in the Black Sea since last September, Deputy Infrastructure Minister Serhiy Derkach says in post on Facebook. Total includes 42 million tons of grains

 

EU Soft-Wheat Exports Fall 39% Y/y in Week to August 4

The EU’s soft-wheat exports in the season that began July 1 totaled 2.18 million tons as of August 4, compared with 3.57m tons by the same time a year earlier, the European Commission said on its website.

• Leading destinations included Nigeria with 288k tons, Egypt with 257k tons, and Morocco with 200k tons,
• Barley exports were 868k tons, down 31% y/y
• Corn imports totaled 2.11m tons, up 30% y/y
• NOTE: Export data for France is incomplete from the beginning of 2024

 

EU Total Grain Production Seen Lower Than USDA Estimate: FAS

Total grain production in the European Union is seen at 267 million tons for the 2024-25 marking year, the USDA’s Foreign Agricultural Service said in a report.

• That’s 8.3 million tons below the USDA’s official forecast
  • The smaller harvest y/y is due to lower planted areas and lower yields impacting all grains except barley and oats
• Exports are also seen lower at 41.8m tons, compared with USDA’s 45.8m tons
• Reduction in the wheat crop is driven by lower output in France, Germany, Hungary, Poland and Romania due to extreme weather
  • Wheat production is forecast at 127.5m tons
  • Exports seen at 31.6m tons
• Corn production is seen at 59.8m tons due to adverse weather factors in key-stages of plant development
  • That’s down from both a year earlier and the official forecast

 

China July soybean imports rise 2.9% on-year, customs data show

China’s soybean imports rose 2.9% in July from a year earlier, spurred by lower prices and fears of heightened trade tensions between Beijing and the U.S. if Donald Trump returns as president.

The world’s top soybean buyer imported 9.85 million metric tons in July, customs data showed on Wednesday, less than traders’ expectations that arrivals would reach 12 million-13 million tons.

That brought shipments for the first seven months of the year to 58.33 million tons, down 1.3% year-on-year, the General Administration of Customs data showed.

The slight decline in year-to-date imports came as the country is facing an oversupply of beans amid subdued animal feed demand.

The situation may curb China’s appetite during the fourth quarter, the peak marketing season for U.S beans.

Soybeans are crushed into protein-rich meal to feed China’s livestock herds and to make oil for cooking.

Crush margins in China have been negative since end of May, with crushers in the key processing hub of Rizhao losing more than 500 yuan ($69.59) for each ton of soybean processed.

Demand for pork and other protein has weakened as Chinese consumers tighten their belts amid a sputtering economic recovery, prompting breeders to reduce the size of their herds.

 

Recent rainfall increases Russian spring wheat production outlook

2024/25 RUSSIA WHEAT PRODUCTION: 82.1 [80.4-86.2] MILLION TONS, UP 1% FROM LAST UPDATE

Recent favorable weather conditions increase 2024/25 Russia wheat production to 82.1 [80.4-86.2] million metric tons (MMT), 56.2 MMT of winter wheat and 25.8 MMT of spring wheat.

Past two weeks featured moderate conditions across Russia, with normal temperatures in the European part and warm and wet conditions in Urals and Siberian Districts. NDVI values increased to above the long-time median in Ural and Siberian Districts, increasing yield potential of spring wheat to 2.04 t/ha. On the other hand, soil moisture level in the rest of the country is at their lowest level in 6 years.

According to the latest weather forecasts, colder temperatures will occur across the country with abundant rainfall in Volga, Urals, and Siberian Districts, ensuring good production prospects for spring wheat. Our current estimate does not include occupied Ukrainian Oblasts.

 

Brazil Frost Risk Threatens Wheat, Spares Coffee: Rural Clima

Wheat crops in southern Brazil could be harmed by cold weather that may bring frosts by the end of week, Rural Clima meteorologist Marco Antonio dos Santos says in message.

• Cold temperatures seen hitting southern states of Rio Grande do Sul, Santa Catarina and Paraná as of Aug. 10 and again on Aug. 13
• There is risk for frost affecting some wheat crops that have been sown a little earlier this year and are in the grain-filling stage
• No frost risk seen for coffee or sugar cane areas so far
• Second week of August to see predominantly low temperatures in Brazil’s Center-South

 

Argentina Soy-Crush Workers Strike Amid Wage Dispute

Workers at soy crushing plants across Argentina went on strike on Tuesday, according to a joint statement signed by the two main unions.

• Workers are striking after failing on Monday to agree to new compensation packages with crushers/trading houses
• The strike is being adhered to by SOEA — which represents workers at plants in San Lorenzo, a Parana River port district accounting for ~70% of Argentine soy shipments — and the Federation of Oilseed Industry Workers

 

Argentine soybean imports hit record high

Argentina has imported nearly $1bn worth of soybeans, a report by the Rosario Stock Exchange showed. This figure, equivalent to 2.2mn tonnes at a CIF cost of $980mn, marks a significant import volume for the country. Paraguay is the primary supplier, accounting for 95% of these imports.

The Rosario Stock Exchange highlighted that this volume represents 20% of the total milling capacity, setting a new historical high for this time of year.

This surge in imports is largely attributed to a severe drought in the previous campaign, which led to a 50% reduction in local soybean production. Despite this, between April and June, Argentina managed to export 13.2mn tonnes of soybeans, flour, and oil—the highest volume since 2020.

Dante Romano, a professor and researcher at the Center for Agribusiness and Food at Universidad Austral, attributed the increase in soybean imports not to reduced local sales but to heightened demand for milling.

According to the United States Department of Agriculture, conditions for corn and soybean production are becoming favourable, potentially enabling Argentina to ramp up its domestic production while reducing the need for exports.

 

Green Plains Says Pipeline Will Drive Green Jet Fuel Advantage

Green Plains Inc. expects to have a major advantage in the developing market for making green jet fuel from ethanol as its plants in Nebraska are poised to benefit from the planned Trailblazer carbon pipeline.

• Green Plains expects to start construction in the next few months to prepare its corn ethanol plants to capture carbon dioxide emissions
  • That should enable it to benefit in the early days of the US “clean” fuel tax credit set to take effect next year, CEO Todd Becker said
• NOTE: Becker has said he expects the Trailblazer project running in part through Nebraska to be the first of proposed US carbon dioxide pipelines to come online
  • The pipeline is intended to capture ethanol emissions and in turn make US corn-based ethanol more climate friendly and a desired ingredient for making sustainable aviation fuel
• Green Plains plans to have three Nebraska plants, representing 287 million gallons of production, along the pipeline, making the company one of the largest and earliest producers of low carbon-intensity ethanol in the US
• Co. expects to start capturing carbon via the Trailblazer pipeline in mid- or late 2025
• NOTE: Tallgrass Energy Partners seeks to convert its Trailblazer natural gas pipeline to a CO2 shipping service that allows it to capture, transport and permanently sequester over 10 million tons of CO2 per year from industries in Nebraska, Colorado, and Wyoming

 

US Lawmakers Says Herbicide Levies Could Hurt American Farmers

US lawmakers warn the Biden administration that levies on imports of the herbicide 2,4-D from China and India could restrict supplies and raise prices of the weed killer widely used by American farmers.

• “We are concerned that tariffs on 2,4-D imports could compromise reliable, affordable access to agricultural inputs,” a bipartisan group of federal lawmakers, including Republican Senator Chuck Grassley of Iowa and Democratic Representative Jimmy Panetta of California, wrote in an Aug. 5 letter to US Commerce Secretary Gina Raimondo
• The lawmakers say access to adequate 2,4-D supplies is crucial amid increased costs for farm inputs like fertilizers, as well as an expected decline this year in US farm income
• Corteva, the only US maker of the weed killer, declined to comment
• “Given that there is only one domestic source of 2,4-D, with limited capacity to meet domestic demand, American agricultural producers rely on imports to supplement their management plans”: letter
• NOTE: In April, the US Commerce Department announced anti-dumping duty and countervailing duty investigations of 2,4-D from China and India

 

US Agriculture Sentiment Rises in July: Purdue Univ.

The Purdue University/CME Group’s agricultural sentiment index increased to 113 points in July from 105 in June, according to a survey of 400 agricultural producers.

• Current conditions component improved by 10 points from June
• Future expectations up by 7 points

 

Weak La Niña remains expected during the September-November time frame

• Crop impacts trending towards a favorable scenario in many regions
• Forecast inputs drawing nearer for a higher confidence outlook

North America (wheat, corn, soybeans): Widespread warm and dry weather remains anticipated across most North American crop regions during September-November. This should be largely favorable for spring crop harvest and winter wheat plantings throughout, if verified.

South America (wheat, sugar, coffee, corn, soybeans): A mixed weather pattern is expected across South America during the September-November time frame. Warmth is expected in southern/eastern Brazil, Paraguay, Uruguay, and Argentina, while cooler weather could be limited to northwest Brazil. Brazil could experience an uptick in rainfall during the SON time frame, while Argentina and Uruguay are expected to be drier than normal. Wet weather in Brazil would favor sugarcane and coffee crops, while potentially hindering corn and soy plantings. Overlapping warm and dry weather in Argentina could be a concern during the SON time frame.

Europe/Black Sea (wheat, rapeseed, corn, sugar): Widespread warmth is expected across Europe and the Black Sea region during the September-November time frame. Wet weather remains expected across Western Europe, while most other regions are likely to receive much closer to normal precipitation during the SON time frame. The widespread warmth will act favorably for croplands throughout, keeping risks of frost/freeze damage low. Wet weather in Western Europe could pose increasing concerns for harvest activities and oversaturation.

Asia (wheat, palm oil, sugar, coffee):  Widespread wet weather is expected across India, most China croplands, and Indonesia/Malaysia. Warmth is expected in Northeast China as well as Indonesia/Malaysia, while conditions will be mixed/closer to normal elsewhere.  The wet weather in India should favor wheat prospects ahead of that season. Warm and wet weather in Southeast Asia should favor palm oil & sugar crops, though there is a pocket of dry weather expected in and around Thailand. Warmth in Northeast China would be favorable for corn harvest, though wet weather impact harvest progress if extreme.

Africa (cocoa, maize, coffee): Modest temperatures are expected in West Africa and South Africa during the September-November time frame, while Ethiopia could end up warmer than normal. Heavy precipitation is expected during this time frame in West Africa and Ethiopia, while South Africa may be slightly drier than normal. Wet weather could be unfavorable in West Africa, if extreme enough to disrupt cocoa harvest. On the other hand, wet weather in Ethiopia should favor coffee development. Generally normal conditions, barring slight dryness, should favor maize prospects in South Africa.

Australia (wheat/rapeseed): There is a high probability of wet weather in eastern Australia during September-November, while western Australia is forecast to be closer to normal during this period. Slightly warmer than normal conditions are expected across the continent. Overall, wet weather in the east should bode well for crop prospects.

 

 

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