Global Ag News for July 14.23

TOP HEADLINES

Western Australia’s Grain Outlook Strong Unless Spring Is Dry

Australia’s key growing state of Western Australia has the potential to produce 18 million tons of grain from the next harvest unless the spring is dry, according to the Grain Industry Association of Western Australia.

While the estimate is about 30% lower than the bumper previous harvest of 26 million tons, production in the state has only ever exceeded 18 million tons three times in history – in 2016, 2021 and 2022, the association said.

The northern and eastern fringes of the grain belt are experiencing a very dry season, the group said. While areas further west and south are in good shape, rain in June has only been enough to sustain crop growth. Without substantial rain in the back half of July and through to August, crops will fade quickly.

Wheat is back up to around 55% of total area, or 4.73 million hectares. Western Australia accounts for about 40% of the country’s wheat production, according to the Department of Primary Industries and Regional Development.

FUTURES & WEATHER

Wheat prices overnight are up 11 1/2 in SRW, up 9 3/4 in HRW, up 8 in HRS; Corn is up 7; Soybeans up 3 1/2; Soymeal down $0.80; Soyoil up 0.29.

For the week so far wheat prices are down 5 1/2 in SRW, down 9 1/2 in HRW, up 18 1/4 in HRS; Corn is up 7 1/2; Soybeans up 46; Soymeal up $10.90; Soyoil up 2.68.

For the month to date wheat prices are up 1/4 in SRW, up 15 3/4 in HRW, up 52 3/4 in HRS; Corn is up 12 3/4; Soybeans up 30; Soymeal up $1.80; Soyoil up 2.59.

Year-To-Date nearby futures are down 20.8% in SRW, down 9.1% in HRW, down 10.6% in HRS; Corn is down 12.5%; Soybeans down 0.1%; Soymeal down 9.9%; Soyoil up 9.2%.

Chinese Ag futures (SEP 23) Soybeans up 24 yuan; Soymeal up 27; Soyoil up 96; Palm oil up 84; Corn up 1 — Malaysian palm oil prices overnight were up 15 ringgit (+0.39%) at 3880.

There were no changes in registrations. Registration total: 1,398 SRW Wheat contracts; 448 Oats; 22 Corn; 0 Soybeans; 224 Soyoil; 0 Soymeal; 147 HRW Wheat.

Preliminary changes in futures Open Interest as of July 13 were: SRW Wheat up 3,292 contracts, HRW Wheat up 2,076, Corn up 16,860, Soybeans up 10,918, Soymeal up 4,268, Soyoil up 6,521.

Northern Plains: A trough will exit these regions this weekend, keeping chances for rain across the area through Sunday. By next week, another trough will enter from the west, creating additional chances for scattered rain into the middle of next week. Near- to below-normal temperatures are expected to reduce stress on developing crops, but overall, below-normal precipitation is expected through next week.

Central/Southern Plains: More rainfall is expected through the weekend and early next week as systems from the west will ride along the expanding ridge across the southern U.S. Though the areas receiving rainfall are somewhat disorganized, the frequency is very good for this time of year. Temperatures are also mild for most areas, but will be above normal across Texas through the middle of next week. Conditions are mostly favorable for much of the region despite the continued drought, though the scattered rain may disrupt those finishing up their wheat harvest.

Midwest: Additional fronts will drop out of Canada through this weekend with potential for more periodic showers while temperatures stay mild. Showers and storms will continue into the middle of next week as a trough from the Canadian Prairies moves across the region. Rain is coming at enough of a frequency to maintain or boost soil moisture in some areas, though there are plenty that are also seeing disappointment and low soil moisture, creating mixed conditions for developing corn and soybeans. Those with wheat yet to harvest will have to dodge showers.

Delta: Systems will develop along frontal boundaries into this weekend, offering daily chances for showers and thunderstorms. More showers and storms are expected throughout the first half of next week as systems work east out of the Rockies. Any rainfall will benefit crops entering their reproductive stages, but for those who miss the more measurable rainfall, yield potential may decrease.

The player sheet for 7/13 had funds: net buyers of 3,500 contracts of SRW wheat, buyers of 10,000 corn, buyers of 15,000 soybeans, buyers of 5,000 soymeal, and  buyers of 5,000 soyoil.

TENDERS

• SOYBEAN PURCHASE: The U.S. Department of Agriculture confirmed private sales of 315,704 metric tons of U.S. soybeans for shipment to Mexico in the 2023/24 marketing year.
• CORN PURCHASE: South Korea’s Major Feedmill Group (MFG) has purchased an estimated 68,000 metric tons of animal feed corn expected to be sourced from South America in an international tender on Thursday.
• WHEAT PURCHASE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 123,770 metric tons of food-quality wheat from the United States, Canada and Australia in a regular tender.
• WHEAT PURCHASE: Algeria’s state grains agency OAIC is believed to have bought milling wheat in an international tender on Thursday which sought limited shipment to two ports only

PENDING TENDERS

• RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp has issued an international tender to purchase an estimated 43,000 metric tons of rice. The deadline for submissions of price offers in the tender is July 10.

TODAY

Brazil 2022-23 Corn Crop Seen at 127.8M Tons: Conab

Output est. raised from 125.7m tons, Brazil’s national supply co. says in its monthly report.

• Analysts in a Bloomberg survey were expecting 133.6m tons
• Yield seen higher at 5,767 kg/ha vs 5,675 kg/ha last month
• Area planted raised to 22.157m ha vs 22.152m ha last month
• Soybean production est. lowered to 154.6m tons vs 155.7m tons

Argentine Corn, Wheat Crop Estimates July 13: Exchange

The Buenos Aires Grain Exchange releases weekly report on website.

• 2022-23 corn production est. maintained at 34m tons, with 58% of the crop harvested
• 2023-24 wheat planting area est. unchanged at 6.0m ha
• The followingtable compares most current data to previous week and last year’s crop:

NOPA June US soybean crush seen at 170.568 million bushels

The U.S. soybean crush likely slowed in June as processing plants took downtime for seasonal maintenance and repairs, analysts said ahead of a monthly National Oilseed Processors Association (NOPA) report due on Monday.

NOPA members, which handle about 95% of all soybeans processed in the United States, were estimated to have crushed 170.568 million bushels last month, according to the average of estimates from eight analysts.

If realized, the June crush would be down 4.1% from the 177.915 million bushed processed in May but up 3.6% from the June 2022 crush of 164.677 million bushels. It would also be the largest June crush on record, eclipsing the previous high set in 2020.

The estimate implies a daily crush rate of 5.686 million bushels, down from 5.739 million bushels a day in May and the slowest daily rate since September, according to NOPA data.

More processors scheduled downtime in June for seasonal maintenance ahead of the 2023 U.S. soybean harvest. Some facilities were unable to restart production as scheduled due to lingering mechanical issues or other problems, further eroding the monthly crush volume, analysts said.

Estimates for the June 2023 crush ranged from 165.580 million to 172.763 million bushels, with a median of 171.400 million bushels.

The monthly NOPA report is scheduled for release at 11 a.m. CDT (1600 GMT) on Monday. NOPA issues crush data on the 15th of each month, or the next business day.

Soyoil supplies held by NOPA members as of June 30 were forecast at 1.816 billion pounds, based on estimates gathered from five analysts.

Soyoil stocks at the end of May totaled 1.872 billion pounds, while stocks at the end of June 2022 stood at 1.767 billion pounds.

Soyoil stocks estimates ranged from 1.750 billion to 1.916 billion pounds, with a median of 1.825 billion pounds.

Western Australia’s Grain Outlook Strong Unless Spring Is Dry

Australia’s key growing state of Western Australia has the potential to produce 18 million tons of grain from the next harvest unless the spring is dry, according to the Grain Industry Association of Western Australia.

While the estimate is about 30% lower than the bumper previous harvest of 26 million tons, production in the state has only ever exceeded 18 million tons three times in history – in 2016, 2021 and 2022, the association said.

The northern and eastern fringes of the grain belt are experiencing a very dry season, the group said. While areas further west and south are in good shape, rain in June has only been enough to sustain crop growth. Without substantial rain in the back half of July and through to August, crops will fade quickly.

Wheat is back up to around 55% of total area, or 4.73 million hectares. Western Australia accounts for about 40% of the country’s wheat production, according to the Department of Primary Industries and Regional Development.

Western Australia crop estimates for the 2023 season:

• Wheat 9.90m tons
• Barley 4.75m tons
• Canola 2.59mtons

Crop production in the 2022 season (from February report):

• Wheat 193m tons
• Barley 6.3m tons
• Canola 4.3m tons

India June Vegetable Oil Imports Rise to 1.31m Tons: SEA

India’s vegetable oil imports rose to 1.31m tons in June from 1.06m tons in May, according to the Solvent Extractors’ Association of India.

• Palm oil imports rose to 683,133 tons from 439,173 tons in May
• Soybean oil imports rose to 437,658 tons from 318,887 tons in May
• Sunflower oil imports fell to 190,785 tons from 295,206 tons in May

Saskatchewan crop report

Crops continued to progress this week with the warm temperatures across the province. Canola is beginning to pod and wheat is beginning to flower in many areas. Dry conditions are impacting parts of the province and many producers are hoping for rain immediately.

Very little rain was received this week. The most rain was in the Dinsmore area, with 14 mm. A large decrease in soil moisture accompanied the warm weather this past week. Crop land topsoil moisture is currently 21 per cent adequate, 55 per cent short and 24 per cent very short. Hay and pastureland topsoil moisture is currently 17 per cent adequate, 55 per cent short and 28 per cent very short.

Crops are either ahead or at normal stages of development for this time of year. Fall cereals are 31 per cent ahead and 66 per cent at normal stages of development. Spring cereals are 33 per cent ahead and 60 per cent at normal stages of development. Oilseeds are also 33 per cent ahead and 58 per cent at normal stages of development. Pulse crops are 28 per cent ahead and 67 per cent at normal stages of development.

Crops are generally in good to fair condition. Provincially, winter wheat and soybean crops are in the best condition, with 60 per cent of winter wheat in good condition and 67 per cent of soybean in good condition. Mustard and canary seed are the crops in the poorest condition. Thirty-five per cent of mustard and 21 per cent of canary seed is in very poor condition.

Americans Now Cutting Back on Food Purchases, Conagra CEO Says

The resilient American shopper is showing more signs of weakness.

Over the past year, many US consumers responded to surging inflation by trading down to cheaper options. But now they’re just going without, said Sean Connolly, chief executive officer of Conagra Brands Inc., during an earnings call. The behavioral shift began shortly after the Easter holiday in early April, he said.

“Importantly, where we see it, it is usually not a trade down to lower-priced alternatives within the category; rather, it’s an overall category slowdown,” he said. Connolly added that he expects the behavior is short term and that “people aren’t eating less.”

US Miss. River Grain Shipments Rise, Barge Rates Increase: USDA

Barge shipments down the Mississippi river increased to 511k tons in the week ending July 8 from 403k tons the previous week, according to the USDA’s weekly grain transportation report.

• Barge shipments of corn fell 18% from the previous week
• Soybean shipments up 102% w/w
• Louis bargerates were $10.76 per short ton, an increase of $1.06 from the previous week

Drought Eases in US Corn and Soybean Regions: USDA

The following  shows the percent of US agricultural production within an area that experienced drought for the week ending July 11, according to the USDA’s weekly drought report.

• Corn crops experiencing moderate to intense drought fell by 3 percentage points from the previous week to 64%
• This marks the second consecutive weekly decline after peaking at 70%
• Soybean crops in droughtalso declined by 3 points, falling to 57%

 

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