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Global Ag News for July 5.23

TOP HEADLINES

Mexico says corn production will rise in 2023 amid U.S. trade tensions

Mexico’s corn production is estimated at about 28.5 million metric tons this year, its agriculture ministry said Tuesday, as the Latin American country defends its plan to limit the use of genetically-modified corn.

The production, which represents both white and yellow corn, marks growth of more than 2 million metric tons, the ministry said in a statement.

White corn, which is often used to make the country’s food staple tortillas, is expected to see a production of 24.9 million metric tons, while yellow corn’s output could reach 3.61 million metric tons this year, according to official data.

The government attributed the increase to its free fertilizer program for small-scale farmers.

Mexico is currently embroiled in a dispute with trading partners the United States and Canada over its policies to limit the use of genetically-modified (GM) corn.

Mexico imports about $5 billion worth of U.S. corn annually, the majority of which is GM yellow corn commonly used for livestock feed.

A government decree, however, calls for a gradual substitution of GM corn and a ban on its use in tortillas or dough.

The U.S. and Canada have requested trade dispute settlement consultations with Mexico under the U.S.-Mexico-Canada Agreement (USMCA), arguing that Mexico’s plan is not based in science.

Mexico said it would counter the arguments and that the ban will not affect trade with the United States.

North America at Night

FUTURES & WEATHER

Grains markets remain closed for July 4th and will open at 8:30AM Chicago time.

For the week and month so far wheat prices are down 9 1/4 in SRW, down 3 1/2 in HRW, down 7 3/4 in HRS; Corn is down 1 1/4; Soybeans up 10 1/2; Soymeal down $1.30; Soyoil up 1.22.

Year-To-Date nearby futures are down 20.6% in SRW, down 10.1% in HRW, down 13.2% in HRS; Corn is down 17.9%; Soybeans up 2.8%; Soymeal down 12.5%; Soyoil up 5.0%.

Chinese Ag futures (SEP 23) Soybeans up 64 yuan; Soymeal up 10; Soyoil down 10; Palm oil down 54; Corn up 36 — Malaysian Palm is down 22.

Malaysian palm oil prices overnight were down 22 ringgit (-0.57%) at 3861.

There were changes in registrations (-45 SRW Wheat, 121 Corn, -109 Soyoil). Registration total: 2,344 SRW Wheat contracts; 402 Oats; 121 Corn; 0 Soybeans; 927 Soyoil; 0 Soymeal; 97 HRW Wheat.

Preliminary changes in futures Open Interest as of July 3 were: SRW Wheat up 5,879 contracts, HRW Wheat up 935, Corn up 14,737, Soybeans up 13,947, Soymeal up 819, Soyoil down 1,842.

Northern Plains: Mostly dry Wednesday-Thursday. Isolated to scattered showers Friday. Temperatures below normal through Friday. Outlook: Isolated to scattered showers Saturday-Monday. Mostly dry Tuesday-Wednesday. Temperatures near to below normal Saturday-Wednesday.

Central/Southern Plains: Isolated to scattered showers through Friday. Temperatures near to below normal through Friday. Outlook: Isolated to scattered showers Saturday-Wednesday. Temperatures near to below normal north and above normal south Saturday-Wednesday.

Western Midwest: Isolated to scattered showers Wednesday. Mostly dry Thursday-Friday. Temperatures near normal Wednesday, near to below normal Thursday-Friday.

Eastern Midwest: Isolated to scattered showers through Friday. Temperatures near to above normal through Thursday, near to below normal Friday. Outlook: Isolated to scattered showers Saturday-Wednesday. Temperatures near to below normal Saturday-Wednesday.

Delta: Isolated to scattered showers through Friday. Temperatures near normal through Friday. Outlook: Mostly dry Saturday. Isolated to scattered showers Sunday-Wednesday. Temperatures near to above normal Saturday-Wednesday.

The player sheet for 7/3 had funds: net sellers of 2,500 contracts of SRW wheat, buyers of 500 corn, sellers of 8,500 soybeans, buyers of 500 soymeal, and  buyers of 5,000 soyoil.

TENDERS

  • CORN PURCHASE: South Korean animal feed maker Nonghyup Feed Inc bought an estimated 136,000 metric tons of animal feed corn from optional origins in an international tender on Monday for up to 138,000 metric tons.
  • CORN PURCHASE: The Korea Feed Association Busan section in South Korea purchased about 66,000 metric tons of animal feed corn on Saturday in a private deal.
  • WHEAT PURCHASE: Algeria’s state grains agency OAIC is believed to have purchased durum wheat in an international tender which closed on Tuesday
  • FAILED CORN TENDER: South Korea’s Major Feedmill Group is believed to have rejected all offers and made no purchase in an international tender to buy up to 140,000 metric tons of animal feed corn.
  • 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.

PENDING TENDERS

  • RICE TENDER: The state purchasing agency in Mauritius has issued an international tender to buy 6,000 metric tons of long grain white rice sourced from optional origins.

 TODAY

USDA CROP PROGRESS: Corn Conditions 51% G/E, Soybeans 50%

Highlights from the report:

  • Corn 51% G/E vs 50% last week, and 64% a year ago
  • Corn silking 8% vs 4% last week, and 7% a year ago
  • Soybeans 50% G/E vs 51% last week, and 63% a year ago
  • Soybeans blooming 24% G/E vs 10% last week, and 15% a year ago
  • Spring wheat 48% G/E vs 50% last week, and 66% a year ago
  • Winter wheat harvest 37% vs 24% last week, and 52% a year ago
  • Winter wheat 40% G/E vs 40% last week, and 31% a year ago
  • Cotton 48% G/E vs 49% last week, and 36% a year ago
  • Sorghum 55% G/E vs 57% last week, and 42% a year ago
  • Sorghum planted 92% vs 85% last week, and 96% a year ago

US Inspected 643k Tons of Corn for Export, 250k of Soybean

US Corn, Soybean, Wheat Inspections by Country: June 29

  • Soybeans for Indonesia-bound shipments made up 72k tons of the 250k total inspected
  • Japan was the top destination for corn inspections, Brazil led in wheat

US Soybean Crushings at 189M Bushels in May: USDA

USDA releases monthly oilseed report on website.

  • Crushing 4.6% higher than same period last year
  • Crude oil production 3.2% higher than same period last year
  • Crude and once-refined oil stocks up 0.1% y/y

US Corn Used for Ethanol at 437.5M Bu in May

The following is a summary of US corn consumption for fuel and other products, according to the USDA.

  • Corn for ethanol was 2% lower than in May 2022
  • DDGS production fell to 1.702m tons

WHEAT/CEPEA: Harvest starts in Brazil; area reduces in Argentina

While the wheat sowing continues to advance, the harvest has started in some areas in Brazil. In Argentina, the most important origin of the product imported by Brazil, the area has been reduced again, being lower than what was verified last season.

Conab indicates that 68.8% of wheat crops in Brazil had been planted up to June 24, 5.1 percentage points up in relation to the same period in 2022. Activities are advancing in Paraná (83%), Rio Grande do Sul (50%) and in Santa Catarina (27%). Moreover, the harvest has started in Goiás (25% of the area).

In Paraná, Seab/Deral says that sowing activities of the new crop had totaled 91% of the area until June 26. The production is likely to reach 4.56 million tons, 30% up compared to the previous. As for Rio Grande do Sul, according to Emater, sowing activities reached 65% of the area up to June 29, 5 p.p. more than in the same period last year, but downing 10 p.p. compared to the average over the last five years.

Concerning Argentina, Bolsa de Cereales reduced the area estimate by 100 thousand hectares this season, to 6 million hectares, due to the dry weather. Sowing activities had totaled 71.9% of the area until June 29, advancing 13.8 p.p. in one week.

In the United States, the USDA indicates that 24% of winter crops had been harvested up to June 25, below the 39% registered in the same period of 2022. The Russian consulting company SovEcon reduced the Ukrainian crop to 17.9 million tons (it had been previously estimated at 18.5 million tons)

PRICES – Cepea surveys show that, between June 23-30, the prices paid to wheat farmers upped 0.23% in Rio Grande do Sul and 0.39% in Santa Catarina, but downed 0.19% in Paraná. In the wholesale market (deals between processors), values dropped 1% in PR, 1.11% in São Paulo. However, quotations increased 1.41% in SC and 1.33% in RS. In the same period, the US dollar increased 0.25%, closing at BRL 4.793 on June 30.

Price averages in June were the lowest since 2020. In Rio Grande do Sul, for instance, the average was BRL 1,260.57 per ton, dropping 2.6% compared to May/23 and 41.3% in relation to June/22, in real terms (IGP-DI). It is the lowest monthly average since February/20, in real terms.

FIRM DEMAND BOOSTS SOY OIL PRICES

Soy oil prices moved up significantly in both international and domestic markets in late June. Increases were attributed to expectations of firm demand from the biodiesel sector. Indonesia, a major palm oil exporter in global terms, has indicated a possible increase in the mandatory blend of biodiesel into diesel oil, which can change from 35% to 40%. It is worth mentioning that the government from Indonesia had already changed the mixture in February, from 30% to 35%.

In case this scenario is confirmed, the availability of palm oil from Indonesia to export may shrink. As a consequence, the global demand for soybean oil is likely to increase – these by-products are direct competitors.

As for supply, Argentina (the biggest world exporter of soy oil) may offer to the global market only 3.75 million tons of the soybean by-product this season, the lowest volume in 22 years, according to the USDA. The lowest supply, in turn, is related to the soybean crop failure, because of unfavorable weather conditions.

As a result, players expect a higher world demand for the by-product from the US and from Brazil. This can increase the dispute among domestic and international consumers, since the USDA estimates the local demands in both countries to hit records in the 2022/23 season.

In addition to international increases, prices in Brazil have been influenced by the fact that the industry in the South is indicating a possible biodiesel production increase, in order to meet the higher blend to diesel oil.

Russian grain exports in 2023/24 may slip from record-high 2022/23 – lobby group

Russia may export at least 55 million tonnes of grain in the 2023/24 marketing season, slightly less than the estimated record-breaking 57 million tonnes in the just finished 2022/23 season, Arkady Zlochevsky, head of Russia’s Grain Union, said on Monday.

He estimated the 2023 harvest at no less than 130 million tonnes, compared to 157.7 million tonnes in 2022, highlighting at a press conference improved weather conditions for the new crop in several regions of the country, especially in Siberia.

Zlochevsky also pointed at bulky grain inventories as a precursor to high exports.

“We expect to export no less than 55 million tonnes next season,” he said.

Data from Russian state statistics service Rosstat show grain stocks as of May 2023 were 61.5% higher than last year’s level, while that of wheat is 69.4% higher.

Russia’s agriculture ministry in May forecast grain exports between 50 million tonnes and 55 million tonnes for the 2023/24 season.

Exports for the 2022/23 season that ended last week were a record high, Zlochevsky said.

The previous record-high for Russian grain exports was in the 2017/18 season, when they reached 54.8 million tonnes.

“By all means, the record is beaten, a new record has already taken place,” he said.

The largest importers of Russian grain in the just-ended marketing season were Egypt with 11.92 million tonnes and Turkey with 10.25 million tonnes and Algeria was for the first time in the top three with 3.26 million tonnes of grain.

Ukraine grain exports at 276,000 T so far for 2023/24 -ministry

Ukraine’s grain exports for the new 2023/24 season stood at 276,000 metric tons as of July 5, Agriculture Ministry data showed on Wednesday.

The volume included 191,000 tons of corn, 65,000 tons of wheat and 20,000 tons of barley.

The ministry did not give an exact comparison for the same date a year ago but said that Ukraine had exported 163,000 tons of grain as of July 6, 2022.

Exports for the entire 2022/23 season were almost 49 million tons, exceeding the previous season’s 48.4 million tons.

Most of the volume was shipped abroad from deep Black Sea ports under the deal brokered by the United Nations and Turkey last July to tackle a global food crisis worsened by Russia’s invasion of Ukraine and a blockade of Ukrainian ports.

A major grain grower and exporter, Ukraine’s grain output dropped to about 53 million tons in clean weight in the 2022 calendar year, down from a record 86 million tons in 2021.

The ministry has said the crop could fall to 46 million tons of grain in 2023.

Russia rejects bank compromise as Black Sea grain expiry looms

  • Black Sea grain deal due to expire on July 17
  • Russia says there has been no progress on its demands
  • Rejects reported compromise aimed at saving deal
  • Collapse of deal could aggravate global food crisis

Russia on Tuesday restated a demand for its state agricultural bank to be reconnected to the global SWIFT payments system to avert the collapse of the Black Sea grain deal, and said it would not accept a reported compromise proposal.

With 13 days remaining until the expiry of the deal, which has allowed Ukraine to export grain from its Black Sea ports despite Russia’s invasion, Moscow said there had been no progress on any of its key demands, including the banking issue.

The Financial Times reported on Monday that the European Union was considering a proposal to allow Russia’s Rosselkhozbank to set up a subsidiary that could connect to SWIFT.

But Russian Foreign Ministry spokeswoman Maria Zakharova dismissed the idea as “deliberately unworkable”, saying it would take many months to set up such a unit and another three months to connect to SWIFT.

She also rejected a U.N. attempt to create an alternative payment channel between Rosselkhozbank and U.S. bank JP Morgan JPM.N.

“There is no real replacement for SWIFT, and cannot be,” Zakharova said in a statement.

Britain’s U.N. Ambassador Barbara Woodward said on Monday she was not confident the grain deal would be renewed.

“The U.N. is doing all it can and we will do all we can. We’ve already worked very closely with the City of London to enable a very complex payment system for grain in order to make it work and continue to get food on people’s tables,” she said.

Russia says the severing of the bank’s access to SWIFT is one of the obstacles facing its own exports of food and fertiliser, and that it cannot keep renewing the Black Sea deal unless those issues are addressed.

Argentina will increase wheat harvest by almost 50% in 2023/2024 MY

In 2023/2024 MY, the wheat production in Argentina may increase to 18-19 mln tonnes. If to compare the forecast figure with the one recorded in 2022/2023 MY, the harvest will increase by almost 50% from 12.6 mln tonnes.

In recent weeks, Argentine farmers have been actively working in the fields. They are sowing wheat in new fields. It will be ripened in December 2023 – January 2024. The Secretariat of Agriculture of Argentina reports that in 2023/2024 MY the grain will be sown on 6.1 mln ha. The analysts of the Buenos Aires Grain Exchange also revised the forecast for the planted areas, increasing it from 6 mln ha to 6.1 mln ha.

As of June 28, the sowing of the main grain crop in the country was completed by 71.9% of the plan. The sowing performance improved by 13.8% over the week. During the crop tour, experts from the Buenos Aires exchange also assessed the condition of the crops. Sixty-five percent of the crops are in satisfactory condition, twenty-eight percent of the crops are in excellent and good condition, and seven percent of the crops are in poor condition. The number of wheat crops in poor condition increased by three percent over the week, while the number in good and satisfactory condition decreased by 2% and 1%, respectively.

EU Soft-Wheat Exports Rose 12% in Season Through June 30

The European Union’s soft-wheat exports in the season that began July 1 reached 31.1m tons as of June 30, compared with 27.9m tons in a similar period a year earlier, the European Commission said on its website.

  • Leading destinations included Morocco (4.68 tons), Algeria (4.08m tons) and Nigeria (2.81m tons)
  • EU barley exports were at 6.4m tons, compared with 7.12m tons
  • Corn imports stood at 25.8m tons, against 16.4m tons
  • NOTE: Click here for figures on oilseed trade
  • NOTE: The 2023-24 season began July 1

Palm Oil Reserves in Malaysia Seen Rising to Four-Month High

  • Inventories grew 11% in June from a month earlier: survey
  • Exports may recover in July after sluggish May and June

Palm oil inventories in Malaysia likely expanded to the largest in four months as yields in the world’s second-biggest grower remained elevated and export demand stayed sluggish.

Stockpiles increased about 11% in June from a month earlier to 1.87 million tons, according to the median of 14 estimates in a Bloomberg survey of analysts, traders and plantation executives. That would put reserves at a level that is about 13% higher than the same period a year earlier.

Production of crude palm oil declined about 1% to 1.50 million tons, the survey showed, after surging 27% in May. Exports were seen little changed at 1.08 million tons after falling for two straight months.

Futures in Kuala Lumpur were flat at 3,882 ringgit a ton by the midday break. Investors are keeping watch on any potential disruption to food crops as El Niño takes hold. The World Meteorological Organization says the onset of the event will “greatly increase” the chance of record-breaking temperatures.

Still, while other agricultural markets are talking about El Niño and the impact of drought, for palm oil it’s the “demand drought” that’s causing widespread concern, according to Paramalingam Supramaniam, a director at Selangor-based broker Pelindung Bestari.

“Import parities are negative in both China and India, and margins are super compressed in refining,” he said. “Unless demand picks up first, any rally will succumb to selling pressure.”

Malaysian stockpiles in June will have been driven up by output that’s still strong from a high base in May, said Sathia Varqa, senior analyst at Fast Markets Palm Oil Analytics. Still, exports should rise strongly in July after a lackluster performance in May and June, Varqa said.

German Grain Harvest Seen 3% Below Average Amid Drought: DBV

Germany’s grain harvest will be a below-average 40.9m tons this year due to drought in May and June, farming lobby DBV said in a statement.

  • That’s below the 2018-2022 average of 42.2m tons and 6% below last year’s harvest
  • The winter rapeseed area increased by 80,000 ha to 1.16m ha, near the five-year average

Czech 2023 grain harvest expected to drop 8% y/y -June estimate

The Czech Republic’s grain harvest should fall by 8% to 6.96 million tonnes in 2023, the Czech Statistics Bureau (CSU) said on Tuesday in its first crop estimate this season.

Last year, the grain harvest totalled 7.57 million tones.

India’s June palm oil, soyoil imports jump on lower prices-dealers

India’s June palm oil imports jumped 49% from the previous month to their highest in three months as buyers took advantage of a dip in prices to their lowest in 28 months to increase purchases, six dealers told Reuters.

A rebound in buying by the world’s biggest vegetable oil importer would support Malaysian palm oil futures FCPOc3 and help top producers Indonesia and Malaysia to trim inventories.

Palm oil imports by India rose to 655,000 metric tons in June, up from 439,173 metric tons in May, according to average estimates from the dealers.

May imports were the lowest since February 2021 as the tropical oil started trading at a premium to soyoil and sunflower oil over the past few months, prompting buyers to shift to the cheaper soft oils.

But lower imports in May and the price correction encouraged Indian buyers to increase purchases in June, said Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil brokerage and consultancy firm.

Price-sensitive Asian buyers typically rely on palm oil because of the low cost and quick shipping times.

The Solvent Extractors’ Association of India is likely to publish its June vegetable oil import data by mid-July.

India’s soyoil imports in June surged 35% from a month ago to 432,000 metric ton, according to the dealers.

Soyoil’s premium over palm oil had been negligible in the last few months, which is pushing buyers to increase purchases, said Rajesh Patel, managing partner at GGN Research, an edible oil trader and broker.

Sunflower oil imports in June plunged 36% from a month ago to 190,000 metric tons, dealers said.

India buys palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine.

EU soybean imports down 10% in 2022/23, rapeseed up 33%

European Union soybean imports in the 2022/23 season that ended on June 30 reached 13.02 million metric tons, down 10% from the 14.54 million tons imported in the 2021/22 season, European Commission data showed on Tuesday.

Brazil narrowly kept the lead as main soybean supplier into the EU despite a slump in volumes, with the United States gaining market shares in the bloc in 2022/23.

EU rapeseed imports in 2022/23 reached 7.35 million tons, up 33% from 5.52 million in 2021/22. Imports were boosted this season by a jump in cheap imports from Ukraine after the EU dropped its import tariffs and from Australia’s bumper crop.

Soymeal imports in 2022/23 totalled 15.77 million tons against 16.52 million the previous season.

Palm oil imports were down 19% at 3.99 million tons, against 4.92 million in 2021/22, as EU countries increasingly turned away from the vegetable oil accused of being linked to deforestation.

The EU data, based on customs figures submitted by the bloc’s 27 member countries, could be revised in the coming weeks, the Commission said.

El Nino threshold not yet passed – Australia weather bureau

Australia’s weather bureau said the threshold to declare El Nino has not yet been crossed, despite the World Meteorological Organization announcing the weather pattern had emerged in the tropical Pacific for the first time in seven years.

El Nino, a warming of water surface temperatures in the eastern and central Pacific Ocean, is linked to extreme weather conditions, from tropical cyclones to heavy rainfall to severe droughts.

The World Meteorological Organization on Tuesday said the El Nino weather pattern had returned.

On Wednesday Australia’s Bureau of Meteorology (BOM) maintained its El Nino alert, which implies a 70% chance of it developing, but said conditions did not yet meet a full declaration.

“The set of indicators we have used haven’t passed the threshold just yet so we still haven’t declared (El Nino),” said Karl Braganza, the BOM’s National Manager of Climate Services.

El Nino is associated with drier weather in Australia’s east and southeast, which could hit wheat production in the world’s second-largest exporter of the grain.

Shallow Rhine waters still hampering shipping in Germany

Despite recent rain water levels on the Rhine in Germany remain too shallow along most of the river for cargo vessels to sail fully loaded, commodity traders said on Wednesday.

Rain in recent days has stabilised the river at low levels but has failed to make a substantial improvement, except in some southern areas, commodity traders said.

Dry weather in June meant the river became too shallow for vessels to sail fully loaded.

That prompted vessel operators to impose surcharges on freight rates to compensate for vessels sailing partly empty, increasing costs for cargo owners.

The Rhine is still too shallow for normal sailings at the chokepoint of Kaub and northern areas around Cologne and Duisburg. Some vessels, depending on type, can only sail 50% full in northern regions, traders said.

This means freight has to be divided among more vessels, further increasing costs for cargo owners. Water levels are higher in southern sections allowing for better vessel loadings.

More rain in river catchment areas is forecast this week which could help shipping, they said.

The Rhine is an important shipping route for commodities such as grains, minerals, ores, coal and oil products, including heating oil.

German companies faced supply bottlenecks and production problems in the summer of 2022 after a drought and heatwave led to unusually low water levels on the Rhine.

Cargill, LDC Likely to Sell Russian Assets to State Firms: Union

“Cargill and Louis Dreyfus are actively now offering their logistics infrastructure facilities to the market and most likely they will be bought out,” Arkady Zlochevsky, head of the Russian Grain Union, said at a press conference in Moscow. “I think that most likely our state-owned companies will buy them.”

  • Cargill and Louis Dreyfus Co. didn’t immediately respond to requests for comment
  • Zlochevsky says top exporter Grain Gates is “a project of VTB,” making it a state company
    • “This is a company recently created, a daughter company of Demetra Holding,” he said
  • Demetra declined to comment when contacted by Bloomberg News
    • NOTE: VTB Bank has a stake of about 45% in Demetra
  • NOTE: Grain Gates is one of Demetra’s partners for developing grain exports, Interfax reported in August, citing a Demetra spokesperson.
  • Zlochevsky says little of the recent reduction in the grain-export tax is ending up in the pockets of farmers
    • 1400-ruble saving “does not go into farmers’ pockets”
    • Out of a 1400-ruble saving, farmers get “a maximum of 500 rubles,” with the rest distributed among “exporters, logistics, the whole chain from manufacture to exports”

More Scorching Heat Seen Posing Risk to Farm Output In China

Heat waves are expected to continue in various regions of China this month, threatening farm production that is already in urgent need of relief from hot weather, according to the China Meteorological Administration.

  • The odds are high that the north and parts of the northwest are likely to get more drought and heat waves, Jia Xiaolong, deputy director at the National Climate Centre, a unit of the administration, said at a briefing Tuesday.
  • Parched conditions in some northern areas have delayed growth of corn and soybean crops, Zhang Hengde, deputy director at the National Meteorological Center, said at the same briefing
  • While some rain is seen in the northeast, the dry weather pattern in the north is expected to continue in the next 10 days, which will accelerate loss of soil moisture and further hurt corn and soybeans, according to a report from the administration published Monday.
  • More extreme weather such as heat waves and floods are expected in July and August, with temperatures in the Beijing-Tianjin-Hebei area rising as high as 41C (106F) this week, the two officials said. They advised against going out in excessive heat and said tourists can escape the heat in high altitudes like Qinghai and Tibet

Earth Keeps Breaking Temperature Records Due to Global Warming

On Monday, the global average temperature was the highest it’s ever been. It was even hotter on Tuesday.

Global temperatures have smashed through records this week, underscoring the dangers of ever-increasing greenhouse gas emissions generated from burning fossil fuels.

The average worldwide temperature reached 17C (63F) on Monday, just above the previous record of 16.9C in August 2016, according to data from the National Centers for Environmental Prediction. The threshold only lasted a day. On Tuesday, the average temperature hit 17.2C.

The new highs illustrate the extremity of 2023’s summer in the northern hemisphere, and bring into focus the slow pace of global progress on curbing emissions.

Temperature Records May Be Broken With Onset of El Niño: WMO

El Niño conditions have developed in the tropical Pacific for the first time in seven years, setting the stage for a likely surge in global temperatures, according to the World Meteorological Organization.

There’s a 90% probability of El Niño continuing during the second half of 2023, the WMO said in a statement dated July 4

Event expected to be at least of moderate strength

“The onset of El Niño will greatly increase the likelihood of breaking temperature records and triggering more extreme heat in many parts of the world and in the ocean,” said WMO Secretary-General Petteri Taalas

Pricey and Required, India Needs More Potash

India’s potash deficit is growing as the world’s fourth-largest buyer of the crop nutrient is locked into a high-cost supply contract through September. Imports are below trend, and the country’s government will have to pay up at $422 a metric ton cost-and-freight (CFR). Even with the global market offering significantly lower prices, with China’s most recent purchase at $307/mt CFR, we believe it’s unlikely India can negotiate a lower price for 3Q trade. Still, farmers won’t be pinched as the government subsidizes fertilizers. India slashed its subsidy bill to 1.75 trillion rupees ($21.4 billion) for the 2023-24 fiscal year starting in April.

US Fertilizer Prices Slide as Summer Fill Programs Continue

US inland fertilizer prices are still being squeezed as farmers wrap up fieldwork, suppliers strive to empty bins and producers launch another round of summer fill programs. India’s potash imports are below trend, pressuring the nation to increase imports during 3Q plantings, despite its high-cost contract at $422 a metric ton cost-and-freight.

EU Set for Battle Over Relaxing GMO Crop Rules in Green Push

  • Proposal on new genomic technologies to be unveiled Wednesday
  • Europe is seeking more sustainable, resilient food systems

The European Union is set to propose softer rules on genetically modified crops in a plan backed by big agricultural companies and opposed by green activists and small farmers.

The measure, to be adopted under a broader package on biodiversity and food sectors, is aimed at making agri-food systems more sustainable and resilient, according to draft EU documents seen by Bloomberg News. Supporters such as Bayer AG say it’s needed to counter the effects of climate change, while detractors argue it will boost seed costs and hurt consumers.

The European Commission, the bloc’s regulatory arm, wants to relax rules on crops made with so-called new genomic technologies, or NGTs, which can improve tolerance to diseases, pests and environmental stresses. Current regulations aren’t keeping up with developments like gene editing, which the bloc had previously deemed subject to the same policies as all genetically-modified organisms.

“The Union risks being excluded to a significant extent from the technological development and economic, social and environmental benefits that these new technologies can potentially generate if its GMO framework is not adapted to NGTs,” the commission said in the draft law being proposed Wednesday. “In turn, this would lead to less strategic autonomy for the Union.”

The new measure comes at a time when governments and businesses across the region are increasingly balking at the costs associated with the bloc’s transition to a low-carbon economy. It follows a proposal on nature restoration that ran into Parliamentary opposition over concerns of its affect on food security and inflation. The assembly is due to hold a plenary vote on it next week.

Regulatory Rollback

The regulatory rollback on GMOs is intended for plants produced with targeted specific mutations or modifications from the same or closely-related species. It will not apply to crops inserted with foreign species.

 

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