Global Ag News for Apr 24.24

TOP HEADLINES

Resolution on trade dispute over corn expected by September, Mexico official says

A resolution on the trade dispute panel over Mexico’s limiting of genetically modified corn imports is expected by September, Mexican Economy Minister Raquel Buenrostro said on Tuesday.

The U.S. requested the panel under a trilateral treaty also involving Canada. Mexico is currently waiting to hear the United States’ response to Mexico’s arguments in favor of the curbs, Buenrostro told journalists.

FUTURES & WEATHER

Wheat prices overnight are down 5 1/2 in SRW, down 4 in HRW, down 3 1/4 in HRS; Corn is down 1; Soybeans down 2 1/4; Soymeal up $0.30; Soyoil down 0.25.

For the week so far wheat prices are up 30 1/2 in SRW, up 27 1/4 in HRW, up 16 1/2 in HRS; Corn is up 8 1/2; Soybeans up 14; Soymeal up $3.20; Soyoil up 0.69.

For the month to date wheat prices are up 21 1/2 in SRW, up 30 1/2 in HRW, up 16 in HRS; Corn is down 3; Soybeans down 25 1/2; Soymeal up $5.40; Soyoil down 2.85.

Year-To-Date nearby futures are down 7.8% in SRW, down 5.4% in HRW, down 8.3% in HRS; Corn is down 6.3%; Soybeans down 9.9%; Soymeal down 10.4%; Soyoil down 5.9%.

Chinese Ag futures (JUL 24) Soybeans down 3 yuan; Soymeal up 17; Soyoil up 54; Palm oil up 58; Corn up 3 — Malaysian Palm is down 23. Malaysian palm oil prices overnight were down 23 ringgit (-0.58%) at 3948.

There were no changes in registrations. Registration total: 438 SRW Wheat contracts; 0 Oats; 10 Corn; 499 Soybeans; 710 Soyoil; 26 Soymeal; 0 HRW Wheat.

Preliminary changes in futures Open Interest as of April 23 were: SRW Wheat down 13,559 contracts, HRW Wheat up 2,496, Corn down 14,523, Soybeans down 21,628, Soymeal down 7,089, Soyoil down 12,174.

US Plains & Midwest: On the Plains, mostly dry weather accompanies near- or below-normal temperatures. Dryness continues to adversely affect winter wheat across portions of the central and southern Plains. In the Corn Belt, scattered showers stretch from Michigan to Missouri. Pockets of wetness continue to impede fieldwork in parts of the eastern Corn Belt.

A pair of storm systems are set to emerge from the western U.S. Over a 4- to 5-day period, both systems will cross the central Plains before reaching the Great Lakes States. Five-day precipitation totals should reach 1 to 3 inches or more across large sections of the Plains, Midwest, and mid-South, with locally severe thunderstorms accompanying the rain. However, significant rain will bypass a few areas, including key winter wheat production areas of the central and southern High Plains. Areas near the Gulf Coast and the southern Atlantic Coast should also receive little or no rain. Although the Eastern freeze threat will largely subside, chilly conditions will linger for several days from the Midwest into the Northeast. The NWS 6- to 10-day outlook for April 28 – May 2 calls for the likelihood of near- or above-normal temperatures and precipitation across most of the U.S.

Canadian Prairies: An active pattern this week and next will bring rounds of showers through the region, but nothing overly heavy or widespread is forecast, which causes delays to planting without providing much for soil moisture. Eastern areas have done better recently, though, and soil moisture there may be more favorable than for most of Alberta.

Argentina: Areas of heavier rain will affect harvest and make it difficult going into May as well as lead to quality issues for a fairly good looking crop. Soil moisture for the coming winter wheat crop is very favorable, however.

Europe: Cool and wet conditions will continue for most of this week. Frosts have been common across northern growing areas where wheat is less developed, but has likely slowed down early planting of summer crops. Areas in the northwest like France and the UK continue to be too wet while Spain and areas in the south could use more rain. They are getting some better rainfall in the more active pattern and Spain will get in on it this weekend and next week as well.

Black Sea: The storm track has favored systems moving through western and central Ukraine at the expense of eastern Ukraine and most of southwestern Russia recently. That pattern continues for the next week or two as well. Hotter and drier conditions in the east have been unfavorable for wheat that is developing quickly after a warm and wet winter. Crop conditions for winter grains are no doubt falling in the region while planting progress is likely quicker than normal.

The player sheet for 4/23 had funds: net buyers of 5,000 contracts of SRW wheat, buyers of 1,500 corn, buyers of 2,000 soybeans, buyers of 500 soymeal, and buyers of 1,500 soyoil.

TENDERS

• 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.
• SOYMEAL PURCHASE: Iranian state-owned animal feed importer SLAL is believed to have purchased about 60,000 metric tons of soymeal expected to be sourced from Argentina or Brazil in an international tender last week
• WHEAT TENDER: Algeria’s state grains agency OAIC issued an international tender to purchase a nominal 50,000 metric tons of durum wheat
• CORN AND SOYMEAL TENDER: Algerian state agency ONAB issued international tenders to purchase up to 120,000 metric tons of animal feed corn and 70,000 tons of soymeal
• WHEAT TENDER: The Taiwan Flour Millers’ Association issued an international tender to purchase an estimated 106,675 metric tons of grade 1 milling wheat to be sourced from the United States.

PENDING TENDERS

• FEED BARLEY PURCHASE: Jordan’s state grains buyer issued an international tender to purchase up to 120,000 metric tons of animal feed barley.

 

 

TODAY

ETHANOL: US Weekly Production Survey Before EIA Report

Output and stockpile projections for the week ending April 19 are based on five analyst estimates compiled by Bloomberg.

• Production seen unchanged from the previous week at 983k b/d
• Stockpile avg est. 25.756m bbl vs 26.08m a week ago

PORK AND BROILER PRODUCTION FUELING U.S. FEED AND RESIDUAL CORN USE – LSEG Commodities Research & Forecast

2023/24  U.S. CORN CONSUMPTION FOR FEED AND RESIDUAL USE: 5,764.9 MILLION BUSHELS, UNCHANGED  FROM LAST UPDATE

In the Livestock, Dairy, and Poultry Outlook for April 2024, pork and broiler production are offsetting the decline in annual beef production. Pork production is estimated to increase by 180 million pounds due to adjustments in quarterly forecasts, alongside a rise in average 2024 hog prices by more than $4 per hundredweight. Besides, strong February pork exports have led to an addition of 210 million pounds to the 2024 export forecast, with an expected increase of almost 8 percent compared to the previous year. Broiler production in 2024 is adjusted upward, while broiler exports are adjusted downward based on recent data, and egg production is adjusted downward due to losses from avian influenza, leading to adjustments in egg prices and exports for 2024.

In 2024, shifts in the timing of cattle slaughter, alongside higher expected fed cattle weights, have led to a 130 million pound increase in the beef production forecast to 26.455 billion pounds, although still down 2 percent from the previous year. Fed cattle prices have risen approximately up to 5 percent from last year. The dairy sector has adjusted its milk production forecast downward to 226.3 billion pounds due to a slower anticipated milk yield per cow. Changes in dairy product price forecasts vary, with some increases and decreases noted.

The abundant corn supplies and the sluggish U.S. corn exports have enhanced the availability of animal feed, facilitating stockpiling and fostering growth across the broader agricultural sector. Thus, the USDA has raised the Grain Consuming Animal Unit (GCAU) to 100.6, reaching the highest level in the past three seasons. In addition, the LSEG’s price-to-feed ratio calculation has surged to its highest point in the last five seasons, attributed to the comparatively low corn prices in contrast to those of cattle and hogs. As a result, LSEG estimates the 2023/24 Feed & Residual Corn Use at 5,764.95 million bushels, exceeding the USDA’s increased April estimate of 5,700 million bushels.

EU-27 corn production prospects sustained amid mixed weather patterns – LSEG Commodities Research & Forecast

2024/25 EU-27 CORN PRODUCTION: 61.9 [58.8-65.1] MILLION TONS, UNCHANGED FROM LAST UPDATE

2024/25 EU-27 corn production remains stable at 61.9 [58.8-65.1] million tons, amid recent and upcoming weather conditions. The last two weeks featured mixed weather pattern across Europe. Starting with warm and dry weather across Western and Central Europe, with temperatures 2-5°C above normal, it rapidly turned into cold front last week. Poland, Germany, France, and Hungary faced cooler temperatures (2-5°C below normal) and modest precipitation.

According to the latest weather forecasts, warm temperatures will return across Central and Eastern Europe next week, which will be favorable for ongoing plantings. Precipitation wise, rather dry weather will prevail in those regions, increasing drought risk in Romania, Bulgaria, and Hungary where soil moistures are now at 6-year lows. On the other hand, cooler and wetter front will occur across Spain and southern France, which may potentially slow down the completion of spring sowings. We will monitor upcoming weather and satellite imagery and update our insight accordingly.

Brazil feed production to rise 2.4% in 2024, says industry group

Brazil is expected to produce 88.3 million metric tons of animal feed in 2024, industry group Sindiracoes projected on Tuesday, up 2.4% from last year but slightly below the 89 million tons previously expected.

The fresh estimate, Sindiracoes said, takes into account expectations for favorable performances in Brazil’s poultry and pork sectors, which should be buoyed by strong exports this year, as well as a drop in local grain output.

Corn is used to produce around 60% of animal feed in Brazil, while soymeal is used to make about 21%, Sindiracoes figures show. The South American country is a major global supplier of both grains and meat.

Corn and soybean output is set to decline in Brazil this year due to adverse weather in key growing areas, but Sindiracoes said it believes grain supply will be enough to meet domestic needs and export demand.

Brazil produced 86.2 million tons of animal feed in 2023, Sindiracoes said, up 1% from the previous year but also below an estimate in December of some 87 million tons.

Indonesia Sees B35 Biofuel Use on Track to Reach 2024 Target

Indonesia’s biodiesel consumption is on track to reach target this year as it used 3.57 million kilo liters (KL) as of April 22, according to Edi Wibowo, director for bioenergy at the energy and mineral resources ministry

• 1Q biodiesel consumption rose about 4% to 2.86m KL from 2.75m KL in 1Q 2023, Wibowo says in text messages
• Govt set max distribution quota at 13.4m KL for B35 biodiesel mandate in 2024
• NOTE: The B35 program mandated 35% of palm-based biodiesel to be mixed in gasoil sold in domestic market

Bunge Deal for Viterra Raises Competition Red Flags, Canada Says

Canada’s antitrust watchdog raised concerns about Bunge Ltd.’s proposed acquisition of Viterra Inc., saying it will have “substantial anti-competitive effects” on the country’s agricultural markets.

The Competition Bureau raised a red flag over Bunge’s 25% stake in G3 Global Holdings, a joint venture with a Saudi firm that operates grain facilities in Canada and is a major competitor to Viterra. If the deal is allowed to go through, Bunge will have an incentive to “influence G3’s economic behavior to the detriment of competition,” the agency said in a report to Canada’s transport minister.

Any decision to approve or reject the deal lies with the Canadian government, not the competition bureau.

Bunge struck the $8.2 billion deal for Glencore Plc-backed Viterra last June. If completed, it would unite the company with the most oilseed-crushing facilities in Western Canada with the largest operator of primary grain elevators.

 

 

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