Global Ag News for May 17.24

TOP HEADLINES

Green Fuels Boom Spurs CME to Consider New Futures to Rival ICE

• Exchange is considering new soyoil, ethanol and RINs contracts
• New futures would compete with contracts already traded on ICE

CME Group Inc., looking for ways to profit from the US green fuels boom, is considering new futures contracts that would put it in more direct competition with Intercontinental Exchange Inc., according to people familiar with the matter.

The US’s largest derivatives exchange is in talks with traders about potential contracts for biofuel credits and a type of soyoil that’s used in renewable diesel, said the people, who asked not to be named citing private discussions. The bourse is also considering restarting its physically delivered ethanol contract, the people said.

The market for renewable fuels is hot in the US, with President Joe Biden’s decarbonization plan offering huge subsidies to green energy. That’s boosting demand for biofuels and the agriculture products used to make things like renewable diesel and sustainable aviation fuel.

The new products would pit CME against ICE, which already has contracts for credits tracking US biofuel-blending mandates, known as RINs, and recently introduced basis futures for refined, bleached, and deodorize soybean oil, the type used to make renewable diesel. So far, CME has focused on its grain and oilseed contracts, while ICE dominates in soft commodities including sugar and coffee.

No final decision has been made on the contracts and the CME could still decide against the products, the people said. The Chicago-based bourse declined to comment.

 

 

FUTURES & WEATHER

Wheat prices overnight are up 9 in SRW, up 11 1/4 in HRW, up 7 1/2 in HRS; Corn is up 2 3/4; Soybeans up 10 3/4; Soymeal up $3.70; Soyoil up 0.32.

For the week so far wheat prices are up 8 3/4 in SRW, up 11 1/4 in HRW, up 8 1/4 in HRS; Corn is down 10; Soybeans up 8; Soymeal down $0.50; Soyoil up 0.42.

For the month to date wheat prices are up 69 in SRW, up 49 1/4 in HRW, up 24 in HRS; Corn is up 13; Soybeans up 64; Soymeal up $19.50; Soyoil up 1.83.

Year-To-Date nearby futures are up 7.0% in SRW, up 6.6% in HRW, up 0.7% in HRS; Corn is down 2.4%; Soybeans down 5.1%; Soymeal down 3.8%; Soyoil down 6.2%.

Chinese Ag futures (JUL 24) Soybeans up 15 yuan; Soymeal up 9; Soyoil up 64; Palm oil up 44; Corn unchanged — Malaysian Palm is up 95. Malaysian palm oil prices overnight were up 95 ringgit (+2.50%) at 3899.

There were changes in registrations (-4 Corn). Registration total: 1,479 SRW Wheat contracts; 39 Oats; 883 Corn; 469 Soybeans; 2,589 Soyoil; 85 Soymeal; 0 HRW Wheat. Preliminary changes in futures Open Interest as of May 16 were: SRW Wheat down 2,113 contracts, HRW Wheat down 1,141, Corn up 14,394, Soybeans up 3,247, Soymeal down 1,693, Soyoil down 5,741.

 

Northern Plains: 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 and continue to be cool through next week.

Central/Southern Plains: Several systems will move through the region through next week. Chances for rain are better away from the southwest, but there is potential for at least some there. The scattered and sporadic nature to the showers with these systems should lead to further planting windows being open, though some areas getting hit multiple times may find some difficulty.

Midwest: The region will be in the crosshairs of several storm systems through next week that will bring scattered showers and thunderstorms. While each system may not bring a ton of rainfall on its own, when added together we should see pockets of heavy rain that would keep planting slower than normal in some areas. For those with seed in the ground, the consistent rains should be favorable, however.

Delta: Recent heavy rain has kept soils moist for newly-planted crops, but made it 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. A couple of disturbances will still go through the region through Saturday, but models are starting to back off on precipitation chances in the region for next week. Some may still occur, however, especially north.

Canadian Prairies: The storm track is busy through the region through next week, 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, or where showers linger. Temperatures will trend below normal starting Friday and likely continue through next week. That may mean some limited areas of snow this weekend.

Brazil: Another front reloads over Rio Grande do Sul with heavy rain on Thursday and Friday, exacerbating the flooding there. The front will shift north again into southern safrinha growing areas for the weekend where it may bring some relieving rain. Central Brazil continues to be hot and dry though, and crop conditions continue to fall there. Another front will do the same in the middle of next week, but this one may get showers into more of the safrinha corn areas late next week. Those chances are low, but not zero, and any rainfall would be helpful for the filling crop.

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

The player sheet for 5/16 had funds: net sellers of 2,000 contracts of SRW wheat, sellers of 4,000 corn, sellers of 1,000 soybeans, sellers of 2,500 soymeal, and buyers of 3,500 soyoil.

TENDERS

• MILLING WHEAT SALE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 121,516 metric tons of food-quality wheat from the United States, Canada and Australia in a regular tender.
• DURUM EXPORT TENDER: Turkey’s state grain board TMO has issued an international tender to sell and export 75,000 metric tons of durum wheat.

PENDING TENDERS

• CORN TENDER: South Korea’s Korea Feed Association (KFA) has issued an international tender to purchase up to 69,000 metric tons of animal feed corn from South America or South Africa
• MILLING WHEAT TENDER: Jordan’s state grain buyer has issued an international tender to buy up to 120,000 metric tons of milling wheat which can be sourced from optional origins.
• RICE TENDER: Indonesian state purchasing agency Bulog’s international tender to buy 300,000 metric tons of rice seeks arrival of the staple in Indonesia by July 31.

 

TODAY

US Export Sales of Soybeans, Corn and Wheat by Country (Table)

The following shows US export sales of soybeans, corn and wheat by biggest net buyers for week ending May 9, according to data on the USDA’s website.

• Top buyer of soybeans: Egypt with 90k tons
• Top buyer of corn: Mexico with 373k tons
• Top buyer of wheat: Philippines with 122k tons

 

Argentina Soy Forecast Trimmed 1% After Damage in North: Bourse

Argentine farmers are set to harvest 50.5m metric tons of soybeans, down from the previous estimate of 51m, the Buenos Aires Grain Exchange said in a weekly report.

• Damage from dryness and heat in northern provinces earlier in the year means yields there are coming in lower than expected
• Soy harvest progress is 64%

 

CROP TOUR: Kansas Wheat Yields Seen Above USDA’s Outlook

Wheat yields in top US producer Kansas are estimated at 46.5 bu/acre, above the USDA’s 38 bu outlook from last week, according to the final estimate Thursday from Wheat Quality Council crop tour.

• Estimate is above last year’s crop-tour forecast of 30 bu/acre
• Crop-tour estimate based on samples taken from 449 fields
• Tour forecasts Kansas wheat production of 290.4 million bushels, above USDA’s outlook for 267.9 million

 

Brazil soybean harvesting in flood-hit state reaches 85% of area – Emater

Soybean harvesting in flood-hit Rio Grande do Sul state reached 85% of the area planted with the oilseed, up from 78% last week, according to crop agency Emater on Thursday.

The harvesting of corn in Rio Grande do Sul advanced 2 percentage points to 88% of area from a week ago, Emater said.

 

Brazil grain harvest drags in flood-hit state, food silos compromised, Emater says

The harvesting of grains such as soy, corn and rice in Brazil’s flood-devastated Rio Grande do Sul advanced slowly in the last week as relentless rains and stubbornly high waters fail to subside, disrupting work.

According to state crop agency Emater on Thursday, soybean harvesting in the country’s second-largest producing state reached 85% of the area, up from 78% last week, even as weather conditions remained unfavorable and severely damaged crops.

“There was a sharp reduction in grain quality in comparison to the product obtained before the excess rain,” Emater said, referring to soybeans.

The agency predicted part of the soy area that remains to be harvested in Rio Grande do Sul could be “abandoned” because it would be uneconomical for farmers to reap their beans under the present conditions.

The deadly floods, which submerged entire towns and damaged critical infrastructure, led forecasts to cut the state’s soy production estimate between 1.78 million tons and 3 million tons in recent days.

In the town of Canoas, 100,000 tons of soybeans are at risk after a warehouse belonging to privately owned soy crusher Bianchini was flooded.

Emater noted that rice silos also were compromised after floods hit those structures, causing power outages and preventing the ventilation of grains. The agency also emphasized the impossibility to move produce from the affected storage units due to damaged roads.

To date, there is no precise estimate of the number of rice silos flooded by water, Emater said. Farmers have yet to harvest 14% of their rice fields in Rio Grande do Sul, it added.

In Frederico Westphalen, corn silage silos were damaged by rain or suffered water infiltration, generating considerable losses, Emater said.

Rains and high air humidity over recent weeks have caused both quantitative and qualitative losses to corn, the agency said.

“Again, in the few harvest opportunities that emerged, soybeans were prioritized over corn,” Emater said. This resulted on an increase of just 2% of the corn area harvested from the previous week, to 88%.

 

Nutrien Sees US Corn Area at 87m Acres, Trailing USDA Forecast

Nutrien, the world’s largest maker of crop nutrients, sees the corn area planted for 2024 falling short of the US Department of Agriculture’s forecast for 90 million acres, Chief Executive Officer Ken Seitz said during the BMO Global Farm to Market conference in New York.

• “We expect to see some acreage shift from corn over to soybeans and cotton,” Seitz said
  • “We have a unique lens into the market because we’re working with growers, 600,000 of them”
• Fertilizer application rates are higher in North America and affordability is keeping farmers in “reasonably good shape,” but the smaller corn area will have implications for nitrogen demand: Seitz

 

Russia Says It Lost 830,000 Hectares of Sowing due to Frosts

Crops at 830,000 hectares, or about 1% of total Russian sowing area, are lost due to frosts, Agriculture Minister Oksana Lut says, according to government’s telegram channel.

• Deputy Prime Minister Dmitry Patrushev urged regions to swiftly organize reseeding of dead crops
• About 25m hectares have been sown with spring crops, which is almost half of forecasted area

 

Novorossiysk Grain Plant Loading Grain After Attack at City: IFX

Novorossiysk Grain Plant, one of the largest deep-water grain terminals in the Azov-Black Sea basin, continues to operate in a normal mode after drone attack at the city, Interfax reports, citing United Grain Company.

• Grain terminal infrastructure wasn’t affected by drones
• NOTE: Russian air defense shot down more that 10 drones over city of Novorossiysk last night

 

Ukraine Grain Exports Advance 0.5% Y/y in Season Since July 1

Ukrainian grain exports advanced slightly in the season that started on July 1, mostly due to an uptick in wheat, the Agriculture Ministry says on its website.

• The total reached 44.2m tons and includes:
  • 16.6m tons of wheat, up 10% y/y
  • 2.3m tons of barley, down 10.4% y/y
  • 24.8m tons of corn, down 4.6% y/y
• Exports of grains in May rose 38% y/y to 2,86m tons
• NOTE: Almost 87% of agrarian exports are being transported via the southern Black Sea ports of Greater Odesa, according to the data
• Ukrainian farmers have already planted 5.1 million hectares of grain and legumes
  • This makes more than 90% of the area, planned to be sown during current planting campaign, Ministry said on the website.
  • Last year the amount of the planted areas reached 4.7m hectares, which was 86% of plan

 

French Corn Plantings Accelerate But Still Lag Five-Year Average

French corn plantings were at 72% as of May 13, up from 54% the week before, according to FranceAgriMer data.

• That’s still below the five-year-average of 91% for this time of year
• Conditions of winter wheat plantings remain at 64%, unchanged from the week before and well below last year

 

Germany’s Winter-Wheat Plantings Drop 8.3% Y/y: Destatis

Germany’s winter-wheat area for the 2024 harvest fell 8.3% from a year earlier, according to the country’s statistics office Destatis.

• High rainfall, floods and excessive moisture on arable land impacted planting over autumn and winter
• The total area of winter wheat planted is estimated at 2.6 million hectares
• Area used for winter rapeseed fell 5.8% y/y
• The country will now plant 20% more summer grains
• Around 1.1 million hectares of land will now be used for crops such as spring barley, oats and corn

 

Drought Continues to Ease 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 May 14, according to the USDA’s weekly drought report.

• Corn area experiencing moderate to intense drought fell to 12% vs 14% in the previous week
• Has dropped 12 percentage points since early April
• Soybean area in drought declined by 2 percentage points to 9%
• Winter wheat fell by 3 points to 25% in drought

 

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

Barge shipments down the Mississippi river increased to 490k tons in the week ending May 11 from 421k tons the previous week, according to the USDA’s weekly grain transportation report.

• Barge shipments of corn rose 13.6% from the previous week
• Soybean shipments up 63.6% w/w
• St. Louis barge rates were $9.86 per short ton, an increase of $0.72 from the previous week

 

 

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