Global Ag News for May 13.24

TOP HEADLINES

Argentina Scraps Export Quotas for Corn, Wheat: La Nacion

The administration of President Javier Milei scrapped quota systems implemented by the previous leftist government, La Nacion reported citing a resolution in the federal register.

Farm leaders celebrated the decision: La Nacion

FUTURES & WEATHER

Wheat prices overnight are unchanged in SRW, down 2 1/4 in HRW, down 1 1/4 in HRS; Corn is down 2; Soybeans down 3 1/2; Soymeal down $3.90; Soyoil up 0.43.

Markets finished last week with wheat prices up 14 3/4 in SRW, down 4 1/4 in HRW, down 6 3/4 in HRS; Corn is down 1 1/4; Soybeans down 33 1/4; Soymeal down $19.60; Soyoil up 1.03.

For the month to date wheat prices are up 60 1/4 in SRW, up 35 3/4 in HRW, up 14 1/2 in HRS; Corn is up 21; Soybeans up 52 1/2; Soymeal up $16.10; Soyoil up 1.83.

Year-To-Date nearby futures are up 3.2% in SRW, up 8.6% in HRW, down 2.1% in HRS; Corn is down 3.3%; Soybeans down 6.8%; Soymeal down 4.9%; Soyoil down 8.4%.

Chinese Ag futures (JUL 24) Soybeans down 37 yuan; Soymeal up 6; Soyoil up 52; Palm oil up 46; Corn up 5 — Malaysian Palm is up 63. Malaysian palm oil prices overnight were up 63 ringgit (+1.65%) at 3872.

There were changes in registrations (8 Oats, 42 Corn). Registration total: 1,479 SRW Wheat contracts; 26 Oats; 837 Corn; 469 Soybeans; 2,589 Soyoil; 226 Soymeal; 0 HRW Wheat.

Preliminary changes in futures Open Interest as of May 10 were: SRW Wheat up 9,491 contracts, HRW Wheat up 3,580, Corn up 23,977, Soybeans up 13,359, Soymeal down 1,108, Soyoil up 3,371.

Northern Plains: Some isolated showers moved across the region over the weekend, but most areas stayed dry. Several systems will move through over the next week. Some areas of heavy rain are forecast, but others will see little or none. Planting windows should be open for most areas, but others may find some difficulty, especially those that saw heavy rain last week. Temperatures will waffle around as well, but trend cooler than normal starting this weekend.

Central/Southern Plains: Scattered showers went through the region over the weekend, including some needed rain in portions of southwestern Kansas other dry/drought areas. The system responsible continues across the east on Monday. Several more systems will move through the region this week and weekend. Chances are better away from the southwest, but there is potential for at least some.

Midwest: A couple of rounds of scattered showers went through over the weekend, although rainfall was overall pretty light in most areas. Planters likely rolled with authority. A system will move across the region with more widespread precipitation Monday and Tuesday, hitting wetter areas with more rain. Several more systems are waiting in the pipeline to move through the region. While each may not bring a ton of rainfall, the potential for thunderstorms and heavier rain has increased from last week, which may keep planting slower than normal in some areas. For those with seed in the ground, the consistent rains should be favorable.

Delta: Scattered showers went through southern areas over the weekend and several systems going through this week and next are likely to move through with widespread showers and thunderstorms as well. The rain is keeping soils moist for newly-planted crops, but making it a bit more difficult for those that haven’t. However, the region has seen good planting progress in the face of the wetter conditions so far this spring.

Canadian Prairies: Isolated showers moved into the region over the weekend, but most areas were favorably dry, allowing wet soils to drain and planters to roll. The storm track is busy through the region, though the path from the northwest will mean more isolated to scattered showers and less widespread heavy rain. Still, it may be enough to produce delays should some areas get hit multiple times. Temperatures will start to trend below normal starting Friday and likely going through next week.

Brazil: A front moved back into southern Brazil last week and produced more heavy rain over northern Rio Grande do Sul, exacerbating flooding. That front continues with rainfall there Monday, but shifts a touch farther north into the southern portions of safrinha corn territory with some showers for Tuesday. Another front reloads over Rio Grande do Sul with heavy rain on Thursday and Friday, with that front shifting north again for the weekend. Central Brazil continues to be hot and dry though, and crop conditions continue to fall there.

Argentina: Cold and dry conditions over the country continue through next week, though far northern areas will catch some rain at times. Overall, the potential for increases in harvest progress continue, though the colder conditions have been producing frosts, which isn’t exactly welcome for late-developing crops or newly-planted winter wheat.

Europe: Another system is moving into western areas on Sunday and could settle in there for awhile, keeping wetter conditions going for the UK and France. The system pushes over the weekend with plenty of widespread rain. It may turn a bit drier in western Europe for a bit, which would be helpful after this week’s heavier rain.

Black Sea: Scattered showers ended up falling in far southwestern Russia over the weekend, helping to ease the building drought there. A system in the Black Sea will keep showers there and in southeastern Ukraine for much of the week, a helpful sign for the drier soils there. Colder temperatures have meant frost in central Russia, and have been close in eastern Ukraine and southern Russia as well, which may have produced some limited damage. The cooler air continues in the region this week, but will rise this weekend.

Australia: Scattered showers went through New South Wales this weekend, which will help with winter wheat and canola establishment. Dry conditions are in place for most areas this week, though. While planting conditions have been pretty smooth, establishment weather hasn’t been all that great outside of New South Wales. The hope for better soil moisture will grow as El Nino fades and La Nina takes over in the next couple of months.

The player sheet for 5/10 had funds: net buyers of 11,000 contracts of SRW wheat, buyers of 13,500 corn, buyers of 7,000 soybeans, sellers of 1,500 soymeal, and buyers of 6,000 soyoil.

TENDERS

• CORN PURCHASE: South Korea’s Major Feedmill Group (MFG) purchased an estimated 132,000 metric tons of animal feed corn in a private deal on Friday without issuing an international tender.
• CORN PURCHASE: Leading South Korean feedmaker Nonghyup Feed Inc. (NOFI) purchased around 68,000 metric tons of animal feed corn in a private deal on Friday without an international tender being issued.

PENDING TENDERS

• WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy up to 120,000 metric tons of milling wheat which can be sourced from optional origins.
• FEED WHEAT AND BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said it will seek 65,000 metric tons of feed wheat and 25,000 tons of feed barley to be loaded by Aug. 31 and arrive in Japan by Oct. 31, via a simultaneous buy and sell (SBS) auction that will be held on May 15.

 

TODAY

Brazil Floods to Reduce Brazil Soybean Crop By 3m Tons: StoneX

Brazil soy crop estimate was preliminarily reduced to 147.8m tons from 150.8m tons previously as Rio Grande do Sul soy forecast was reduced by 3m tons due to massive floods, StoneX said in a statement.

• Rio Grande do Sul soy crop estimate now at 20.05m tons
  • New cuts on outlooks may be made by June as more rains are expected in May
• Corn harvest was almost finished in the state, with losses in warehouses to be calculated

Historic Floods Threaten Brazil Soybean Supplies as Losses Mount

The catastrophic floods that have submerged the southern part of Brazil for a week are threatening to trim supplies of key agricultural commodities, including soybeans, as the damage they’re causing to crops and agricultural infrastructure becomes more evident.

Roughly 1 million metric tons of soybeans may have been lost in Rio Grande do Sul state, one of Brazil’s largest suppliers of the oilseed used in everything from biofuel to chicken feed, according to a report by the US Department of Agriculture on Friday. Brokerage firm StoneX Group Inc. said the impact could be three times bigger. Crop giants including Bunge Global SA and Cargill Inc., as well as some meat producers, have been forced to suspend some operations.

Biofuel makers are struggling to move their products due to roadblocks, meaning they will soon be forced to reduce production, according to Jose Fabiano, a director at brokerage firm Agrinvest Commodities in Brazil. Rains are expected to persist, with as much as 8 inches expected for Rio Grande do Sul state over the next two weeks, according to the National Oceanic Atmospheric Administration.

Here are some examples of how the industry has been disrupted:

• Bunge has suspended operations at its Rio Grande soybean-crushing plant as a precautionary measure amid forecasts for more rains and floods over the next few days. Activities at Bunge’s terminal at the port of Rio Grande have also been halted, and will remain so until a safe return is possible.
• Cargill has resumed soybean crushing at its Cachoeira do Sul facility after two days of interruptions over the weekend. Still, some activities — such as biodiesel production — remain halted as flood-blocked roads have constrained shipments out of the facility.
• Brazil soybean processor Bianchini SA says its facility in Canoas, Rio Grande do Sul state, has been flooded, putting at risk almost 100,000 metric tons of oilseed in storage, corporate director Gustavo Bianchini said in a phone interview. The company has also fully suspended production of soybean oil and meal at the plant, which typically processes 2,400 metric tons of oilseed a day.
• At least two chicken and pork facilities are still seeing operations halted, with others facing partial interruptions, according to industry group ABPA.

Argentine grains exchange puts leafhopper damage to corn crop at $2 billion

Damages to Argentina’s corn fields stemming from a severe leafhopper insect outbreak have already caused $2.045 billion in losses, with export losses seen at $1.6 billion, the Rosario grains exchange (BCR) said on Friday.

In a report, the BCR added that shipments of the key grain are now expected to total 31.5 million metric tons during the current 2023/24 harvesting season.

That level of corn exports would come in significantly below the annual average over the past five seasons of some 35 million metric tons, according to the BCR.

Earlier this week, the exchange cut its corn harvest forecast to 47.5 million tons due to the outbreak, down nearly a fifth compared with its initial production estimate of 59 million metric tons at the start of the season.

As of Wednesday, just under a quarter of the current season’s crop had been harvested.

Argentina is the world’s No. 3 corn exporter, with revenue from grains sales constituting a major source of hard currency for central bank coffers used to pay down debt and finance imports.

Corn yields have been increasingly hit by explosive growth of leafhoppers, whose appetite for plant sap weakens corn plantings while stunting growth and yellowing leaves. The insects also spread plant diseases.

The leafhopper population has surged during the current corn cycle due to a dearth of freezes during the previous one, according to experts, while minimum temperatures have steadily crept up in recent years.

SOYBEAN/CEPEA: Supply decrease in RS concerns agents; soy and soybean meal exports hit records

Cepea, 10 – Before floods caused destruction in Rio Grande do Sul, players surveyed by Cepea expected that the higher soy production in the state could counterbalance (even in parts) the output reduction in areas in the Central-West and in the Southeast, which faced dry weather in the 2023/24 crop.

Now, since many crops in Rio Grande do Sul have been affected by weather conditions, both production and exports of soybean are likely to drop, limiting the availability in Brazil.

These uncertainties have been boosting soybean trades in the domestic spot market. Purchasers in Brazil are willing to build stocks and, as the international demand for soybean and byproducts is firm, Cepea has been observing a competition between purchasers in Brazil and in the world.

The ESALQ/BM&FBovespa Index (Paranaguá) rose 3.2% from May 2-9, closing at BRL 134.08 per 60-kg bag on May 9. The CEPEA/ESALQ Index (Paraná) upped 3.3%, to close at BRL 129.29 per 60-kg bag. Both Indexes returned to the highest levels since the first ten days of January this year.

On the average of the regions surveyed by Cepea, soybean prices increased 3.5% in the over-the-counter market (paid to farmers) and 4.3% in the wholesale market (deals between processors). On the average of the regions surveyed by Cepea in Brazil, soymeal prices moved up 6.1% between May 2 and 9.

As for the soy oil, values remained practically stable from May 2-9, at BRL 4,928.13 per ton (in São Paulo city with 12% ICMS) on May 9.

ANP (National Agency of Petroleum, Natural Gas and Biofuels) informed a temporary change (for 30 days) in the mandatory blend of biodiesel to diesel of 2% for Rio Grande do Sul, lower than the 14% for the rest of the country. RS is the major biodiesel producer in Brazil.

EXPORTS – Brazil exported 36.79 million tons of soybean from January to April 2024, a record for the period and 10% more than that verified in the same period last year, according to Secex. In April alone, shipments totaled 14.69 million tons, the highest volume since May last year, 16.4% above that verified in March/24 and 2.5% higher than in April/23.

Although the volume exported is higher this year, the average price, in Reais, is the lowest since 2020, averaging BRL 135.62 per 60-kilo bag in the partial of this year. It is worth mentioning that the dollar valuation against Real in April interrupted the downward trend last month and limited the decrease in the partial of the year.

Soybean meal shipments also hit a record in the four first months of 2024, totaling 7.43 million tons, moving up 21.5% against the same period last year – data from Secex. In April, Brazil exported 2.3 million tons, a record for the month and the highest amount since August/23.

As for soybean oil, in April, Brazil exported the highest quantity since August/23, of 139.5 thousand tons, 11.5% more than in March/24. However, in the partial of this year, shipments totaled 336.21 thousand tons, 58.3% less compared to that in the same period of 2023 – data from Secex.

CORN/CEPEA: Sellers are away from trades; prices are firm

Corn prices are firm in this early May in the Brazilian market. Purchasers who are operating in the spot market try to buy new batches at lower prices, based on the possible supply increase, due to the second crop harvest in Mato Grosso and in Goiás (which may start this month), and to the consequent need of sellers to open room in warehouses.

However, many producers are away from trades and those who are active are firm regarding prices. They have their eyes on weather impacts on crops in important producing areas. In Rio Grande do Sul, the excess of rains has been damaging crops, while in the Central-West and in the Southeast players are concerned about high temperatures and the dry weather.

From May 2-9, the ESALQ/BM&FBovespa Index (Campinas, SP) rose 1.1%, closing at BRL 58.19 per 60-kilo bag on May 9. On the average of the regions surveyed by Cepea, corn values moved up 0.8% in the wholesale market (deals between processors) and 2.4% in the over-the-counter market (paid to farmers) over the last seven days.

CROPS – As for the 2023/24 summer crop, Conab indicated that the harvest had reached 63.1% of the area in Brazil up to May 5, moving up 3.3 percentage points compared to April 28.

In Rio Grande do Sul, Emater indicates that activities reached 86% of the area. In Lajeado and Caxias do Sul, floods have caused significant losses. In Pelotas, despite the rains, corn crops are developing well.

Concerning the second crop, the development is satisfactory in Goiás and Mato Grosso. In São Paulo, Paraná, Minas Gerais and Mato Grosso do Sul, the warm and dry weather concerns players.

EXPORTS – In April, shipments totaled only 66.14 thousand tons, 86% below the volume verified in April/23 – data from Secex. Prices at the Paranaguá port (PR) increased 1.6% between May 2 and 9.

Russia’s 2024 harvest ample for food security, Interfax cites acting minister

Russia’s harvest in 2024 will be ample to maintain food security despite recent frosts, the Interfax news agency cited Dmitry Patrushev, acting agriculture minister nominated for the post pf deputy prime minister, as saying on Sunday.

Earlier, three of the country’s key grain-growing areas declared a state of emergency due to May frosts that caused damage to crops.

Russia keeps 2024 grain crop forecast unchanged despite weather, Interfax says

Russia’s agriculture ministry has not changed its grain crop forecast of 132 million metric tons in 2024 but may adjust it due to bad weather, the Interfax news agency quoted Oksana Lut, nominated for the post of agriculture minister, as saying on Sunday.

Earlier, three of the country’s key grain-growing areas declared a state of emergency due to May frosts that caused damage to crops.

SovEcon Lowers 2024 Russia Wheat Crop Forecast to 89.6M Tons

SovEcon, an agricultural markets research firm specializing in the Black Sea region, has revised its forecast for Russia’s wheat crop down by 3.4 million metric tons to 89.6m tons because of poor weather conditions, it says in a statement.

• The primary reason for the cut is the persistent dry conditions in southern Russia, which has received only 20-40% of its typical rainfall in recent months.
• NOTE: Southern Russia is responsible for approximately 40% of the nation’s total wheat production.
• There also has been a general decline in plant moisture availability in some parts of central Russia
• “Compounding these issues were unexpected late frosts on April 30 and May 1, which further compromised yields in parts of the central and southern regions,” SovEcon says
• These conditions were especially harmful to already vulnerable wheat crops in the south due to earlier droughts
• “The full extent of damage from this week’s frost is yet to be determined, but further reductions to the 2024 wheat crop forecast are possible,” Andrey Sizov, head of SovEcon said

Crop Shipper Hidrovias do Brasil Eyes Expansion in Amazon Region

Barge operator Hidrovias do Brasil plans to invest as much as 1.2 billion reais ($233 million) to nearly double capacity at its Barcarena grain terminal in Para state, CEO Fabio Schettino said in an earnings call.

• The plan, which is still pending a final decision, would boost the terminal’s capacity to 13 million metric tons a year
• Expansion would start in 2027

US Pork Production Falls 0.9% This Week, Beef Unchanged: USDA

US federally inspected pork production falls to 515m pounds for the week ending May 11 from 520m in the previous week, according to USDA estimates published on the agency’s website.

• Hog slaughter down 0.7% from a week ago to 2.39m head
• Beef production unchanged from a week ago, cattle slaughter unchanged at 622m head
• For the year, beef production is 2.1% below last year’s level at this time, and pork is 0.1% above

Fertilizer Markets in Price Downshift to Seasonally Slower 2Q

Prices for ammonia, urea, urea ammonium nitrate and phosphate continued to fall at many inland US locations this week as prompt demand slows and growers focus on spring planting. India’s fertilizer inventory has raced ahead of last year’s as elections continue and farmers seasonally pause consumption.

 

 

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