Global Ag News for May 6.24

TOP HEADLINES

Canada toughens import requirements on US breeding cattle over bird flu concerns

The Canadian Food Inspection Agency (CFIA) has toughened import requirements on U.S. breeding cattle over the H5N1 bird flu virus, the agency said in a statement on Friday.

The first confirmed case of Highly Pathogenic Avian Influenza (HPAI) in a dairy herd on March 25 and the second human case in two years on April 1 have heightened concerns in the U.S. about the spread of the virus to animals and people.

The CFIA has enhanced import requirements on dairy cattle from the U.S. from April 29, the statement said.

Import measures for cattle from the U.S. will now include negative HPAI test results for lactating dairy cattle, testing of milk at the retail level to look for viral fragments of HPAI, and voluntary testing of cows that are not presenting with clinical signs of the virus, the CFIA said.

Since 2022, bird flu in the United States has infected over 90 million chickens, more than 9,000 wild birds and 34 dairy herds, as well as one person in Texas who came in close contact with infected cattle and another person after exposure to poultry.

FUTURES & WEATHER

Wheat prices overnight are down 9 in SRW, down 18 1/2 in HRW, down 13 1/2 in HRS; Corn is down 2; Soybeans down 4 3/4; Soymeal down $2.30; Soyoil up 0.42.

Markets finished last week with wheat prices up 5 in SRW, down 18 3/4 in HRW, down 6 3/4 in HRS; Corn is up 9; Soybeans up 28 1/4; Soymeal up $15.60; Soyoil down 0.88.

For the month to date wheat prices are up 10 1/4 in SRW, down 3 1/2 in HRW, down 3 1/4 in HRS; Corn is up 11 1/2; Soybeans up 47 1/4; Soymeal up $18.00; Soyoil up 0.46.

Year-To-Date nearby futures are down 3.5% in SRW, up 2.8% in HRW, down 2.1% in HRS; Corn is down 5.1%; Soybeans down 7.5%; Soymeal down 5.1%; Soyoil down 11.3%.

Chinese Ag futures (JUL 24) Soybeans up 18 yuan; Soymeal up 94; Soyoil up 56; Palm oil up 6; Corn up 14 — Malaysian Palm is up 19. Malaysian palm oil prices overnight were up 19 ringgit (+0.49%) at 3863.

There were changes in registrations (-98 Soybeans, -4 Soyoil). Registration total: 1,438 SRW Wheat contracts; 0 Oats; 450 Corn; 491 Soybeans; 2,558 Soyoil; 226 Soymeal; 0 HRW Wheat.

Preliminary changes in futures Open Interest as of May 3 were: SRW Wheat up 1,049 contracts, HRW Wheat up 977, Corn down 5,878, Soybeans up 2,629, Soymeal down 1,245, Soyoil down 1,713.

Northern Plains: Some showers went through this weekend, mostly far west and southeast. But a system moving into the region should bring widespread rainfall to most of the region this week, including some heavy amounts for the driest areas in eastern Montana. Showers will stick around through at least Wednesday and possibly into Thursday, keeping any fieldwork slow. Additional fronts will follow afterward, but contain few showers as planting windows will open back up again. Temperatures will waffle around as these fronts come and go.

Central/Southern Plains: Widespread showers went through the region over the weekend, including in southwestern Kansas that has been desperate for rain. A storm system entering the region on Monday will bring scattered showers and thunderstorms, along with a significant risk of severe weather. The showers may pass over those areas in the southwest that are still dry though. A system this coming weekend may provide some showers to this area, though. Recent heavy rain in a lot of areas has slowed planting progress down a bit, and the active weather this week should also do that. Storm systems after this coming weekend are still going to move through the region, but they are more likely to bring lower precipitation amounts, which may open up planting windows a little more.

Midwest: A system moved through over the weekend and another moved across southern areas Sunday which continues on Monday. Some of these areas near and south of the Ohio River had been drier and the rain is not all that bad. But recent rainfall has been too heavy in a lot of areas, slowing down or halting planting. This week stays active with a strong front moving through late Monday and Tuesday, another system for Wednesday and Thursday, and potential for another this weekend that may contain widespread showers as well. The midweek system will bring some colder air into the region, but frosts are not expected. Temperatures will likely waffle a bit through next week as the pattern remains active with systems. However, these systems are less likely to contain widespread heavy rain.

Delta: Scattered showers went through over the weekend, but were not as heavy as feared. A couple of fronts will move through this week with more chances for widespread showers and thunderstorms and potential for severe weather. Another will go through this weekend. The active weather will ensure good soil moisture for the next week, but may be too wet in some areas for much planting.

Canadian Prairies: Showers continued over the weekend, but another system moving into the region on Monday will bring heavy and widespread rainfall to most of the region outside of northwestern Alberta which will be drier. Heavy rain will fall in eastern Alberta and western Saskatchewan, which is still under significant drought and could use the rain. The rain will produce significant planting delays, however, shortening the windows for this year’s crop. The good news is that this may be the last system with widespread heavy rain, as the storm track will be more from the northwest for a while. The coming rain should be more favorable than detrimental.

Brazil: More heavy rain fell over Rio Grande do Sul over the weekend, adding to the catastrophic flooding that has taken place in the state over the last week. The front responsible for the incredible rain has moved south, but will shift back north again on Wednesday and likely waffle around the state yet again into next week. Flooding, mudslides and crop damage are all putting a damper on what was a pretty good crop season and making for massive delays in winter wheat planting. Safrinha corn in the central will continue to be very dry and hot as well. Southern growing areas may catch some of the rain from the front across RGDS.

Argentina: A front shifted back south into the region over the weekend, but much of the heavy rain has been east into Uruguay. A system will shove the front back north into Paraguay and Brazil by Wednesday. Colder and drier conditions will follow that. That may be able to increase corn and soybean harvest, but may mean widespread frosts for any immature crops.

The player sheet for 5/3 had funds: net buyers of 7,500 contracts of SRW wheat, buyers of 4,000 corn, buyers of 6,500 soybeans, buyers of 4,000 soymeal, and sellers of 1,000 soyoil.

TENDERS

• SOYBEAN SALE: The U.S. Department of Agriculture confirmed private sales of 122,000 metric tons of U.S. soybeans for shipment to unknown destinations in the 2023/24 marketing year.
• CORN PURCHASE: Algerian state agency ONAB is believed to have bought an unknown volume of animal feed corn in a tender for up to 160,000 metric tons which closed last week but no purchase was reported of 70,000 tons of soymeal also sought
• WHEAT PURCHASE UPDATE: Algeria’s state grains agency OAIC is believed to have so far purchased between 240,000 and 300,000 metric tons of milling wheat in an international tender which closed on Thursday.

PENDING TENDERS

• RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 116,900 metric tonnes of rice
• WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy up to 120,000 metric tons of milling wheat that can be sourced from optional origins

 

 

TODAY

Brazil soy output at top farm state to drop sharply amid torrential rains

Expectations for soy production in one of Brazil’s biggest farm states is deteriorating quickly after heavy rains disrupted harvesting with about a quarter of production left to reap from fields in Rio Grande do Sul.

Leandro da Silva, who manages a grains unit at farm cooperative Cotrisal in the town of Sarandi, said on Friday the impact of the downpours, which left entire cities under water and flooded grain fields in lower areas, could slash production in the state to between 19 million metric tons and 20 million metric tons.

Brazil rains disrupt meat processing in key southern state – industry group

Heavy rains and flooding in Brazil’s southernmost state of Rio Grande do Sul have reduced or paralyzed chicken and pork slaughtering at multiple meatpacking facilities, according to industry groups on Friday.

Global meat companies including JBS SA JBSS3.SA and BRF SA JBSS3.SA operate in the region, where entire towns have submerged and roads were totally or partially blocked by the unprecedented downpours.

Some 12 chicken processors were affected, Jose Santos, head of a local poultry lobby, said.

Five pork processors have been impacted by lack of animals for slaughtering and dwindling animal feed stocks, said Rogerio Kerber, head of a lobby group representing producers, referring to disruptions in the heavily hit Taquari river valley.

Rio Grande do Sul is one of Brazil’s largest chicken and pork producers and exporters.

CORN/CEPEA: Producers focus on crops and purchasers limit trades

Sellers have been focused on the development of the second corn crop and on the harvest of the summer crop, showing little interest to close deals. Purchasers, in turn, have been limiting trades due to the good volume of remaining stocks from the 2022/23 season, the good pace of the summer crop harvest and the fact that second corn crops have been developing well.

In this scenario, from April 25 to May 2, the ESALQ/BM&FBovespa Index (Campinas, SP) moved down 0.8%, closing at BRL 57.56 per 60-kilo bag on May 2. Comparing monthly averages, prices in April were 5.9% lower than in March/24 and 13.6% smaller than in April/23, in real terms (IGP-DI March/24).

On the average of the regions surveyed by Cepea, corn values dropped 1% in the wholesale market (deals between processors) and 0.3% in the over-the-counter market (paid to farmers) over the last seven days.

Sowing activities in the United States are moving in a better pace compared to the average of the last crops, resulting in good expectations for the production. For the time being, the 2023/24 production in the US is forecast at 389.69 million tons by the USDA. In Argentina, the output is also expected to be good. This scenario, in turn, may limit exports from Brazil.

EXPORTS – In 20 days working days of April, shipments totaled only 62.84 thousand tons, below the 470 thousand tons verified in April/23 – data from Secex. Prices at the Paranaguá port (PR) upped only 0.2% between April 25 and May 2, influenced by the dollar valuation.

CROPS – Despite the good development of the second crop so far, the low volume of rainfall and high temperatures in the south of Mato Grosso, Paraná and São Paulo have started to concern players.

As for the summer crop, the harvest has been interrupted in Rio Grande do Sul this week, due to the excess of rains and floods in several areas in the state. In other areas in Brazil, activities continue to move at a good pace. The harvest had totaled 59.8% of the area until April 28, upping 3.1 percentage points in one week – Conab data.

SOYBEAN/CEPEA: Rains in the South concern players; demand for soybean meal increases

The excess of rainfall in Rio Grande do Sul (second biggest soybean producer in Brazil) has been concerning agents. In Argentina (major global exporter of soybean meal), rumors of a possible strike in the country concern purchasers of the byproduct in the world. In this scenario, the demand (both domestic and international) for the Brazilian soy meal has increased, boosting liquidity and prices.

Therefore, export premiums have increased and continue positive. It is worth noting that, in this period of the year, it is common for premiums to operate at negative levels, due to the season period in South America.

On the average of the regions surveyed by Cepea in Brazil, soymeal prices rose 1.3% from April 25 to May 2. Comparing averages in March and in April, the increase is 0.3%.

As for the soy oil, values decreased 3.5% between April 25 and May 2, at BRL 4,929.48 per ton (in São Paulo city with 12% ICMS) on May 2. Concerning monthly averages, on the other hand, quotations rose 1.1% from March to April, influenced by the increase of export premiums in Brazil.

SOYBEANS – Prices moved up in Brazil this week, boosted by increases of soybean meal quotations. Moreover, the significant volume of rains in Rio Grande do Sul has been affecting crop activities, bringing concerns about the quality.

The ESALQ/BM&FBovespa Index (Paranaguá) upped 1.4% from April 25 to May 2, closing at BRL 129.95 per 60-kg bag on May 2. The CEPEA/ESALQ Index (Paraná) increased only 0.1%, to close at BRL125.14 per 60-kg bag. In April, the Indexes averaged BRL 129.79/bag (Pranaguá) and BRL 122.66/bag (Paraná), moving up 4% and 4.6% against March, respectively. The averages in April are the highest of this year, in real terms (IGP-DI March/24).

CROPS – Data from Conab indicate that 90.5% of the 2023/24 area had been harvested. The delay is more significant in the South.

US Pork Production Up 1.3% This Week, Beef Rises: USDA

US federally inspected pork production rises to 520m pounds for the week ending May 4 from 513m in the previous week, according to USDA estimates published on the agency’s website.

• Hog slaughter up 1.1% from a week ago to 2.406m head
• Beef production up 1% from a week ago, cattle slaughter rises 1%
• For the year, beef production is 2.3% below last year’s level at this time, and pork is 0.1% above

U.S. Gulf UAN Nitrogen Fertilizer Price Drops 5.56%

Nitrogen fertilizer, represented by Urea Ammonium Nitrate (UAN) on the U.S. Gulf at NOLA, fell 5.56% to $255 per short ton in the week ended May 3, according to Green Markets data compiled by Bloomberg Intelligence.

• UAN U.S. Gulf NOLA dropped 7.27% during the last month and was up 7.37% during the last 3 months
• All major UAN nitrogen benchmark prices fell while UAN U.S. Gulf NOLA fell the most during the last week
• Shares of Nutrien Ltd. were up, while CF Industries Holdings Inc. and CVR Partners LP were down in the latest week
• Major Ammonia nitrogen benchmark prices were mixed
• Major Urea nitrogen benchmark prices were mixed
• Natural gas, which drives producer costs, has increased 11% during the last week and was up 3.5% during the last month
• The price of corn, a driver of fertilizer purchases, increased 1.8% during the last week and was up 2.9% during the last month

 

 

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