Global Ag News for May 20.24

TOP HEADLINES

Cofco to Send Argentine Shipment of Deforestation-Free Soy to EU

Cofco completed loading of its first cargo of certified deforestation-free Argentine soy meal on Thursday, according to a statement.

• 18,000 metric tons of meal were loaded onto the MV Dublin Eagle at the company’s Timbues port terminal on the Parana River
• “This is the first fully traceable and segregated shipment of deforestation-free soy products for Cofco International”
• The trader helped source the shipment using Argentina’s Visec certification platform, which has made the country “well-placed to supply Europe with EUDR-compliant soybeans”

FUTURES & WEATHER

Wheat prices overnight are up 15 1/4 in SRW, up 15 1/4 in HRW, up 11 3/4 in HRS; Corn is up 1 3/4; Soybeans up 5; Soymeal down $0.80; Soyoil up 0.16.

Markets finished last week with wheat prices down 20 1/2 in SRW, down 23 in HRW, down 15 in HRS; Corn is down 18 1/4; Soybeans up 13 1/2; Soymeal up $1.50; Soyoil up 0.28.

For the month to date wheat prices are up 63 1/4 in SRW, up 41 3/4 in HRW, up 19 in HRS; Corn is up 7 1/2; Soybeans up 70; Soymeal up $16.10; Soyoil up 2.42.

Year-To-Date nearby futures are up 6.1% in SRW, up 5.5% in HRW, down 0.0% in HRS; Corn is down 3.6%; Soybeans down 4.7%; Soymeal down 4.7%; Soyoil down 5.0%.

Chinese Ag futures (JUL 24) Soybeans up 16 yuan; Soymeal up 7; Soyoil up 112; Palm oil up 110; Corn down 9 — Malaysian Palm is up 32. Malaysian palm oil prices overnight were up 32 ringgit (+0.82%) at 3924.

There were no changes in registrations. 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 17 were: SRW Wheat up 344 contracts, HRW Wheat down 844, Corn down 2,520, Soybeans up 25,132, Soymeal up 37, Soyoil down 532.

Northern Plains: Scattered showers went through over the weekend and several storm systems will move through over the course of the next week, making for areas of heavy rain. The active weather will make it difficult for planting, and cooler temperatures in place will stay that way into next week as well. Some frosts will not help with germinating crops either.

Central/Southern Plains: Scattered showers went through over the weekend with some severe storms on Sunday that may have damaged wheat. Multiple systems will go through the region over the next week with heavy rain both north and east. Southwestern areas that continue to deal with drought are not forecast to see a lot of heavy rain, though thunderstorms that move through could bless some areas with heavier amounts. Temperatures will fluctuate with fronts moving through, but in general will be cooler across the northwest in Nebraska and warmer across the south.

Midwest: Isolated showers went through over the weekend with some areas of dryness being favorable for getting some planting done. Two systems will make that more difficult early this week as they rip through the region with areas of heavy rain. That may induce some flooding in the northwest. The front to the second system will settle somewhere near the Ohio River and stay active for the rest of the week. Additional systems will move through the region this weekend and especially early next week that leave planting windows short or closed for another week.

Delta: It was drier over the weekend with increasing temperatures, which probably helped get some more planting done in the region. The main storm track will be to the north this week, but a front will settle in the northern portions of the region mid to late week as thunderstorms move through with some heavy rain potential. Additional storm systems may go through this weekend and early next week that could get the region more active as well.

Canadian Prairies: Scattered showers and thunderstorms went through the region over the weekend, but it was notably drier through much of Saskatchewan and Alberta outside of the far north and south. A system that has wrapped up in the region will continue to develop precipitation in the region through Tuesday but could linger some showers through Wednesday. The storm track favors to track farther south after that, but could sneak in some showers to southeastern areas Thursday and Friday and across the far south this weekend. Any rain will continue to make planting progress slower, but also help to ease drought conditions as well.

Brazil: A front kept showers going over southern Brazil over the weekend but moved north of flooded Rio Grande do Sul. Another front moves back into southern Brazil on Tuesday and especially on Wednesday with more bouts of heavy rain that will make flooding conditions worse again. That front will shift northward for Friday and the weekend, where showers may get into southern safrinha corn growing areas, favorable for any crop it rains on. That front may reload there early next week with some showers as well.

Argentina: Cold and dry conditions over the weekend largely continue this week, though northeastern areas will see some showers with a front midweek. The cold will likely produce more frosts, unfavorable for winter wheat planting. But drier weather will increase harvest.

Europe: A system continued to produce scattered showers over western areas but also some central areas over the weekend. The wetter weather is unfavorable for wheat development that needs some sun and drier conditions. The system phases out, but the showers will likely continue mid to late week. Smaller systems moving through the continent afterward should bring more gaps to the areas that are too wet while keeping showers in play for areas that are not, a much more favorable outlook than the continent has seen in a while if true.

Black Sea: It was dry over the weekend, but temperatures rose and frosts are no longer a threat. Despite the more favorable temperatures, it continues to be very dry in the region and models are cutting back on the precipitation forecast for a couple of fronts moving through.

Australia: It was dry over the weekend and should be dry for most areas this weekend as well. A few systems may move into the country next week as Pacific Ocean temperatures continue to trend toward a favorable La Nina scenario over the next several weeks.

The player sheet for 5/17 had funds: net sellers of 7,000 contracts of SRW wheat, sellers of 7,000 corn, sellers of 4,500 soybeans, buyers of 1,000 soymeal, and buyers of 3,000 soyoil.

TENDERS

• FAILED CORN TENDER: The Korea Feed Association (KFA) is believed to have rejected all offers and made no purchase in a tender to buy up to 69,000 metric tons of animal feed corn sourced from South America or South Africa only, European traders said. Prices offered were regarded as too high, traders said.

PENDING TENDERS

• 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.
• 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.
• Basis bids for corn and soybeans were unchanged across the U.S. Midwest on Friday, spot checks of processing sites and grain elevators indicated, and cash grain movement was subdued as producers continued to work on planting both crops.
• Basis bids for hard red winter (HRW) wheat were unchanged at elevators in the southern U.S. Plains on Friday and cash markets were subdued as K.C. July HRW wheat futures KWN24 continued to backpedal from multi-month highs set earlier this week, cooling farmer selling.
  • Protein premiums for HRW wheat shipped by rail to or through Kansas City fell by 10 cents a bushel on Friday for “ordinary” wheat with less than 11.0% protein. Premiums for other grades were unchanged.
  • Benchmark K.C. July hard red winter wheat declined on Friday for a fourth straight session, ending down 11-1/2 cents at $6.61-3/4 per bushel.
• Spot basis offers for soymeal were steady to firmer in the U.S. Midwest and at the U.S. Gulf on Friday, supported by snug supplies of the feed ingredient due to a reduced crushing pace and seasonal downtime at crushing facilities, dealers said.
  • Crush margins for soy processors have come under pressure in recent weeks, encouraging the slowdown.

 

 

TODAY

Russia’s 2024/25 wheat exports may reach 46.9 mln tons, says Rusgrain Union

Russia’s wheat exports in the 2024/25 season could amount to 46.9 million metric tons, according to a consensus forecast by the Russian Union of Grain Exporters.

The Rusgrain union decided to publish weekly consensus forecasts “in connection with recent natural disasters that significantly affect the volume of production of grain and other basic agricultural crops” until the situation normalises. This is the first such forecast.

The agriculture ministry estimated wheat exports for the 2022/23 season at 47 million tons. The 2024 grain harvest in Russia – the world’s biggest exporter of wheat – suffered from a prolonged return of frost in May, which affected the central and part of the southern regions of the country. As of May 16, eight regions had introduced a state of emergency due to the destruction of crops. Overall grain exports from Russia in the next season, which starts on July 1, are estimated at 59.1 million tons, according to the union’s forecast.

The consensus forecast for the grain harvest in 2024 is 134.5 million tons, of which 86.8 million tons are wheat.

Eduard Zernin, head of the Rusgrain union, said about 20 companies – members of the union and its partners – took part in the survey.

Russia’s agriculture ministry has estimated the area replanted due to the May frost to date at 900,000 hectares.

The state weather forecaster still predicts unfavourable weather conditions in a number of regions. In addition to frost, dry weather is affecting the harvest in the south of the country. The ministry has not changed its grain crop forecast of 132 million tons and still estimates record grain exports this season. Before the weather anomalies, the ministry estimated exports at about 70 million tons.

 

SOYBEAN/CEPEA: Strike in Argentina directs importers of byproducts to Brazil

Some sectors in Argentina (the biggest global exporter of soybean meal and soybean oil) are on a strike, which resulted in the fact that importers have been demanding byproducts from Brazil, the second largest supplier of these products in the world. As a result, domestic consumers have been competing with international players, boosting export premiums and prices in Brazil.

Soy oil values increased significantly (+4.3%) from May 9-16, at BRL 5,140.35 per ton (in São Paulo city with 12% ICMS) on May 16. As for soybean meal, on the average of the regions surveyed by Cepea in Brazil, prices upped 3.1% in the same comparison.

The ESALQ/BM&FBovespa Index (Paranaguá) upped 0.7% from May 9-16, closing at BRL 134.99 per 60-kg bag on May 16. The CEPEA/ESALQ Index (Paraná) increased 0.5%, to close at BRL 129.95 per 60-kg bag. On the average of the regions surveyed by Cepea, soybean prices rose 0.5% in the over-the-counter market (paid to farmers), but decreased only 0.1% in the wholesale market (deals between processors).

SUPPLY AND DEMAND – The USDA released a report in May 10 indicating that the global soybean output is likely to change from 396.9 million tons in 2023/24 to the new record of 422.2 million tons in the 2024/25 season.

Conab estimated that the production may total 147.68 million tons in the 2023/24 crop. It is worth mentioning that new adjustments may occur due to floods in Rio Grande do Sul. Brazil had harvested 95.6% of the 2023/24 area up to May 12.

 

CORN/CEPEA: Harvest starts in some regions; prices are firm

Weather conditions in the first fortnight of May favored the beginning of the second crop harvest, especially in Paraná, Mato Grosso and Goiás and in some areas of Minas Gerais and São Paulo.

Besides concerns and possible adjustments in the domestic supply, estimates continue to indicate a good crop in Brazil. Players surveyed by Cepea indeed say that the first areas harvested in Mato Grosso have presented good productivity.

Producers have their eyes on the crops and on the possible impacts of the weather on the production – floods have affected areas in Rio Grande do Sul, while the warm and dry weather concerns players in Paraná, São Paulo and in the south of Mato Grosso do Sul. Thus, there are only a few sellers willing to trade. In spite of the fact that most purchasers are away from closing deals, expecting a bigger volume, corn values rose this week.

From May 9-16, the ESALQ/BM&FBovespa Index (Campinas, SP) moved up 1.1%, closing at BRL 58.85 per 60-kilo bag on May 16. On the average of the regions surveyed by Cepea, corn values increased 0.3% in the wholesale market (deals between processors) and 0.7% in the over-the-counter market (paid to farmers) over the last seven days.

PROJECTIONS – Despite concerns about the weather, Conab increased its estimates for the area in the 2023/24 season. According to Conab, the total area may be 20.61 million hectares, against 20.38 million indicated in April. This is linked to the area increase in the Central-West and in some parts of North and Northeast.

Production is forecast at 111.63 million tons – Conab had estimated it at 110.96 million tons in April. Comparing 2022/23 and 2023/24 crops, however, the decrease is 15.4%.

The Brazilian consumption may total 83.98 million tons. Therefore, the domestic surplus, along with imports and initial stocks, would amount 37.2 million tons – 31 million tons are likely to be exported, resulting in ending stocks at 6.2 million tons by January/25, 12% smaller than in the previous season.

In global terms, the USDA indicates that the 2023/24 production may total 1.228 billion tons, while the consumption is estimated at 1.215 billion tons.

CROPS – Conab says that the harvest has started in some areas, but it did not reach 1% of the total. As for the summer crop, activities hit 68.1% of the total, according to a report released on May 13.

 

US Beef Production Falls 3.7% This Week, Pork Rises: USDA

US federally inspected beef production falls to 507m pounds for the week ending May 18 from 527m in the previous week, according to USDA estimates published on the agency’s website.

• Cattle slaughter down 3.9% from a week ago to 598m head
• Pork production up 0.9% from a week ago, hog slaughter rises 1.1%
• For the year, beef production is 2.1% below last year’s level at this time, and pork is 0.1% above

 

 

Interested in more futures markets?  Explore our Market Dashboards here.