Global Ag News for Aug 8.23

TOP HEADLINES

Brazil Tops Argentina in Soy Meal for First Time Since 1998

Brazil’s exports of soy meal this year through July were 13.3m metric tons vs. Argentina’s 10.9m, the first time Brazil has surpassed Argentina in a quarter of a century, the Rosario Board of Trade said in a report.

• NOTE: Processors in Argentina — normally the world’s biggest exporters of soy meal — are short on supplies after a brutal drought, even though they’re importing beans from neighbors, mainly Brazil and Paraguay, at record rates
• Through Aug. 2, Argentine farmers had traded 4.4m metric tons of corn under a forex program: Rosario
  • Exporters, who have a corn quota of 26m tons, have so far locked in 16m tons of shipments

FUTURES & WEATHER

Wheat prices overnight are down 9 1/4 in SRW, down 4 in HRW, down 3 in HRS; Corn is down 3 1/2; Soybeans down 10 3/4; Soymeal down $0.60; Soyoil down 0.96.

For the week so far wheat prices are up 12 in SRW, up 5 3/4 in HRW, down 3 1/4 in HRS; Corn is down 4 3/4; Soybeans down 44 1/4; Soymeal down $7.10; Soyoil down 2.68.

For the month to date wheat prices are down 17 1/2 in SRW, down 51 1/4 in HRW, down 34 1/2 in HRS; Corn is down 20 3/4; Soybeans down 40 1/2; Soymeal down $4.90; Soyoil down 1.10.

Year-To-Date nearby futures are down 18.6% in SRW, down 14.2% in HRW, down 12.8% in HRS; Corn is down 29.4%; Soybeans down 7.8%; Soymeal down 5.7%; Soyoil up 4.2%.

Chinese Ag futures (SEP 23) Soybeans up 7 yuan; Soymeal up 2; Soyoil down 138; Palm oil down 162; Corn up 15 — Malaysian palm oil prices overnight were down 83 ringgit (-2.20%) at 3689.

There were no changes in registrations. Registration total: 1,398 SRW Wheat contracts; 448 Oats; 0 Corn; 11 Soybeans; 71 Soyoil; 0 Soymeal; 147 HRW Wheat.

Preliminary changes in futures Open Interest as of August 7 were: SRW Wheat up 1,078 contracts, HRW Wheat down 5,313, Corn down 16,617, Soybeans down 10,820, Soymeal down 2,645, Soyoil down 3,377.

Northern Plains: The pattern remains active and cool for the region for the next two weeks. Precipitation may not be as widespread or heavy as it was over the weekend, but multiple chances of precipitation along with mild temperatures in the next two weeks is a favorable forecast.

Central/Southern Plains: A system passed by to the north this weekend but brought widespread rain to most of the Central and Southern Plains outside of Texas, where heat continued as well. The front to the system has set up around Oklahoma and will be active for most of the week. Systems will pass by off to the north all week long, with chances for precipitation continuing there as well as cooler temperatures. It will continue to be hot and fairly dry in Texas into next week; otherwise, the forecast is favorable for filling corn and soybeans in the region.

Midwest: Several systems will move through over the next two weeks with more favorable rainfall. Temperatures will be variable but generally near to below normal throughout the period as well, favorable for filling corn and soybeans.

Delta: The front from the weekend has stalled and will be a focal point for shower development for most of the week, while systems moving through the Corn Belt could provide additional precipitation for northern areas as well. Dry areas in the south will remain hotter and drier, unfavorable for soybeans and cotton there.

The player sheet for Aug. 7 had funds: net buyers of 9,000 contracts of SRW wheat, sellers of 2,000 corn, buyers of 12,500 soybeans, sellers of 3,000 soymeal, and  sellers of 9,000 soyoil.

TENDERS

• CORN SALES: The U.S. Department of Agriculture (USDA) confirmed private sales of 251,460 metric tons of U.S. corn to Mexico for delivery in the 2023/24 marketing year that begins Sept. 1.
• SOYBEAN SALES: The USDA also confirmed private sales of 132,000 metric tons of U.S. soybeans to China for delivery in the 2023/24 marketing year that begins Sept. 1.
• WHEAT TENDER: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), is seeking wheat in an international tender for shipment Sept. 15-30 and/or Oct. 1-15, 2023. GASC said the deadline for submitting offers was Aug. 8.
• VEGETABLE OILS TENDER: Egypt’s GASC is seeking refined sunflower oil in one-litre bottles in an international tender. It is seeking at least 5,000 metric tons of oils, free of customs, on behalf of the Holding Company for Food Industries, for delivery during October and/or November and/or December. Deadline for submitting offers is Aug. 17.

 PENDING TENDERS

• WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 metric tons of milling wheat, European traders said. The deadline for submission of price offers is Aug. 13, they said.
• WHEAT TENDER: A Syrian state grains agency has issued an international tender to purchase and import 200,000 metric tons of soft milling wheat

 TODAY

USDA CROP PROGRESS: Corn Conditions 57% G/E, Soybeans 54%

Highlights from the report:

• Corn 57% G/E vs 55% last week, and 58% a year ago
• Corn dented 8% vs 6% a year ago
• Corn dough 47% vs 29% last week, and 42% a year ago
• Corn silking 93% vs 84% last week, and 89% a year ago
• Soybeans 54% G/E vs 52% last week, and 59% a year ago
• Soybeans blooming 90% G/E vs 83% last week, and 88% a year ago
• Spring wheat 41% G/E vs 42% last week, and 64% a year ago
• Spring wheat harvest 11% G/E vs 2% last week, and 8% a year ago
• Winter wheat harvest 87% vs 80% last week, and 85% a year ago
• Cotton 41% G/E vs 41% last week, and 31% a year ago
• Sorghum 57% G/E vs 55% last week, and 29% a year ago

US Inspected 377k Tons of Corn for Export, 282k of Soybean

In week ending Aug. 3, according to the USDA’s weekly inspections report.

• Wheat: 275k tons vs 585k the previous wk, 636k a yr ago
• Corn: 377k tons vs 538k the previous wk, 556k a yr ago
• Soybeans: 282k tons vs 334k the previous wk, 871k a yr ago

US Corn, Soybean, Wheat Inspections by Country: Aug. 3

Following is a summary of USDA inspections for week ending Aug. 3 of corn, soybeans and wheat for export, from the Grain Inspection, Packers and Stockyards Administration, known as GIPSA.

• Soybeans for Indonesia-bound shipments made up 81k tons of the 282k total inspected
• Mexico was the top destination for corn inspections, and also led in wheat

China July Agricultural Imports: Customs

• Soybean Import 9.731m Tons
  • Soybean imports YTD rose 15% y/y to 62.303m tons
• Edible vegetable oil imports in July 778,000 tons
  • Edible vegetable oil imports YTD rose 119% y/y to 5.274m tons
• Rubber imports in July 633,000 tons
  • Rubber imports YTD rose 16.7% y/y to 4.639m tons
• Meat (including offal) imports in July 679,000 tons
  • Meat (including offal) imports YTD rose 9.5% y/y to 4.485m tons
• Fertilizer exports in July 2.78m tons
  • Fertilizer exports YTD rose 36.6% y/y to 15.497m tons

China July soybean imports climb on feed demand, Brazil supplies

• China imported 9.73 mln metric tons in July, up 23.5% yr-on-yr
• China’s Jan-July soybean arrivals up 15% at 62.3 mln metric tons
• Higher arrivals from Brazil, improved demand drive purchases

China’s July soybean imports jumped by almost one-quarter from a year ago, official data showed, boosted by improved demand in the world’s biggest buyer, especially for use in animal feed, and by higher arrivals from Brazil.

China imported 9.73 million metric tons of soybeans in July, up 23.5% from a year ago, customs data showed on Tuesday. Arrivals for the first seven months of the year came to 62.3 million metric tons, up 15% from a year earlier. CNC-SOY-IMP

The increase was driven by higher demand for soymeal, a protein-rich animal feed ingredient made from soybeans, and for cooking oil, analysts said.

Chinese hog farmers delayed the slaughter of pigs due to low pork prices, which in turn increased demand for animal feed, said Wang Mingwei, a Hangzhou-based analyst at Dayue Futures.

The arrival of cargoes, after delays due to a late soybean harvest in Brazil and tightened customs inspections in China, contributed to the rise in July imports.

Crush margins in China have been positive since mid-June, with crushers in the key processing hub of Rizhao making 277.67 yuan ($38.51) for each tonne of soybean processed.

China’s hog inventories rose 1.1% year-on-year to 435.17 million in the first half of the year, data from China’s agriculture ministry showed, although hog farmers have been losing money due to oversupply and weak demand.

Brazil C-S Winter Corn Harvest 64% Done as of Aug. 3: AgRural

Compares with 55% a week earlier and 80% last year, according to an emailed report from AgRural consulting firm.

• Winter corn estimate raised to 105.6m mt from 102.9m mt in june, AgRural says
• Full corn crop now seen at 135.4m mt

SovEcon Raises Russia Wheat-Export Forecast 900k Tons to Record

Russian wheat exports in the 2023-24 season are now seen at 48.1m tons, up from a prior projection for 47.2m tons, research firm SovEcon says in an emailed note.

• That would be an all-time high, amid an increasing harvest outlook and record sales at the start of the season
  • Ukraine’s smaller harvest versus last year is also aiding Russian sales
• Estimates assume no serious issues for Russian exports, although SovEcon “cannot completely rule out such problems” or the possibility of additional export restrictions by Russian officials
• Barley and corn export estimates lowered to 4.6m tons and 4.4m tons, respectively

Ukraine’s Agri Exports Fall to Lowest Level Since July 2022: UAC

Ukraine shipped about 3.39m tons of agricultural products in July after Russia exited an agreement that allowed Kyiv to ship by sea, according to analyst UkrAgroConsult.

• The figure is 31% lower than June and the lowest monthly volume since July 2022.
• Land transport share in total exports rose to 26%
  • “Demand for grain transportation by trucks to the East of Germany and Northern Italy will likely to increase in September. However, this is still insufficient compared to a rapid increase in grain supply and mounting grain stocks”
• Queue to unload wagons at the river port of Izmail has reached 26 days; over 100 vessels are waiting to pass through Sulina canal as of Aug. 3

WHEAT/CEPEA: Quotations fade in Brazil and abroad

Cepea, August 7 – Wheat prices are fading abroad and in Brazil. In the international market, despite the price rises observed on Friday, 4th (due to the stronger conflicts between Russia and Ukraine), in general, values have been pressed down by the harvesting in the United States, rains in wheat-producing regions in that country and the high volume exported by Russia.

In Brazil, besides the influence of the scenario abroad, quotations are fading because of the current high domestic supply, weak demand from mills – which are closing deals sporadically – and expectations for a good harvest this year. Besides, wheat sowing is ending in Brazil.

Cepea surveys show that, between July 28 and August 4, the prices paid to wheat farmers dropped 2.13% in Paraná and 0.98% in Santa Catarina but rose 0.25% in Rio Grande do Sul. In the wholesale market (deals between processors), values decreased 2.79% in PR, 2.28% in São Paulo, 1.46% in RS and 0.8% in SC. In the same period, the US dollar increased 2.9% against the Real, closing at BRL 4.869 on August 4th.

CROPS – According to data from Conab, 99.7% of the national wheat crop had been sown by July 29th. In Santa Catarina, activities have reached 93% of the state area. As for the harvesting, it is advancing in Goiás (70%) and Minas Gerais (13%), which, altogether, account for 2.3% of the national wheat supply. According to Emater, in Rio Grande do Sul, 99% of the state crop had been sown by August 3rd.

INTERNATIONAL TRADES – In July, Brazil imported 418.54 thousand tons of wheat, 31.8% more than that imported in June but 16.2% less than that from July/22. Last month, 41% of the total imported came from Russia; 25.94%, from Argentina; 18.9%, from the United States; 6.45%, from Uruguay; 3.89%, from Paraguay; and 3.82%, from Canada.

As for exports, Brazil shipped 1.27 ton of wheat in July, less than that exported in June (132.18 tons) and lower than that from July/22 (805.12). In 12 months (Aug/22 – Jul/23), Brazil exported 2.7 million tons – 2.09 million tons in 2023.

Brazil Soybean Sales at Slower Pace Than Usual, Safras Says

Soybean farmers in Brazil have sold roughly 76% of this year’s crop and 14% of next year’s, consulting firm Safras & Mercado says in a note.

• Commercialization of this year’s crop, which has been fully harvested, compares with almost 80% from a year ago and a five-year average of roughly 84%
• New crop commercialization compares with 17% from a year ago and a five-year average of 24%
  • Estimate based on production projection of 163 million metric tons

IKAR Raises Russia 2023 Wheat Crop Estimate to 88m Tons: IFX

IKAR raised its Russian 2023 wheat crop estimate to 88m tons from 86.5m tons expected earlier, Interfax reported, citing Dmitry Rylko, director of the Moscow-based consultant.

• The wheat export outlook for 2023-24 season — which started in July — raised to 47.5m tons from 46m tons estimated earlier
• IKAR also raised its 2023 grain harvest forecast by 2.5m tons to 137m tons

Palm Oil May Climb to 4,000-4,300 Ringgit in Early 2024: Varqa

Crude palm oil may hover between 4,000 ringgit and 4,300 ringgit a ton in early 2024 as El Niño-induced dry weather could hit output, according to Sathia Varqa, senior analyst at Fastmarkets Palm Oil Analytics.

• Palm may face downward pressure in 3Q of 2023, and show a strong recovery in 4Q of this year and 1Q of 2024, Varqa said in a presentation
  • High stockpiles in China and India, along with its narrow discount to soybean oil, will put pressure on palm prices in the short term
  • NOTE: Palm oil closed 2.3% lower at 3,772 ringgit in Kuala Lumpur on Friday
• Indonesia’s palm oil production seen rising to 51m tons in 2024, from 50m tons a year earlier, he said in the presentation, prepared for an event by the Indian Vegetable Oil Producers’ Association in New Delhi on Sunday
• Malaysia’s palm output will likely fall to 17.5-18m tons in 2024, from 18.5-18.6m tons
  • Extreme dry conditions to impact yields
• But, high prices will not be sustainable as competitiveness and demand will suffer: Varqa

Indonesia’s H1 biodiesel consumption at 5.41 mln KL – agency

Indonesia’s consumption of palm oil-based biodiesel for the first six months of this year was 5.41 million kilolitres, data from palm oil fund agency BPDPKS showed on Tuesday.

Indonesia has allocated a 13.15 million kilolitres biodiesel quota for this year after it raised its mandatory palm oil blend in biodiesel in February from 30% to 35%, a programme better known as B35.

That mandatory B35 blend, however, is only now being fully implemented as some regions needed to upgrade their infrastructure to meet the new requirement for the higher blend.

The world’s biggest palm oil producer has pushed a wide use of the palm oil based fuel to reduce crude oil imports and shift to lower emission fuel.

Fertilizer Rallies for Seventh Week With India Set to Buy More

Nitrogen and phosphate rose in the US and Canada last week as producers reset summer prices and autumn prepay offers, while potash edged higher after the close of summer fill programs. India’s Aug. 9 tender could reveal an almost 50% price jump, supporting margins for producers including CF Industries, Nutrien and Yara.

Tight Supply, Stronger Global Markets Boost Fertilizers

Urea prices continued to move up at New Orleans (NOLA) and inland, with urea ammonium nitrate (UAN) and ammonium sulfate firming as well. NOLA urea moved to $375-$445 a short ton (st) vs. $355-$425 last week, and Corn Belt prices jumped $20-$25/st. NOLA UAN strengthened $5-$10/st following a $15-$25 hike in inland UAN prices from CF, the second increase in a week since UAN fill programs ended in mid-July. AdvanSix also announced another $10/st increase in Midwest ammonium sulfate prices after ending its fill program. Phosphates continued to climb at NOLA and inland on reports of tight supply, with NOLA barges jumping $15-$45/st vs. last week. Potash prices remained flat at NOLA and inland, though Nutrien announced a $30/st increase for 4Q shipments after closing its summer fill program.

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