Global Ag News for Aug 26.24

TOP HEADLINES

Canada Labor Board Orders Rail Employees Back to Work

• No ability to refuse the minister’s directions, CIRB says
• Workers’ union will appeal decision to the Federal Court

An independent tribunal in Canada has ordered workers at the country’s two largest railways to get back on the job and to engage in binding arbitration to resolve a dispute that has snarled North American supply chains.

The Canada Industrial Relations Board agreed on Saturday to Labor Minister Steven MacKinnon’s request for arbitration as well as an extension of the workers’ expired contracts and for the railways to resume operations “forthwith.”

“The board has concluded that, in this case, it has no discretion or ability to refuse to implement, in whole or in part, the minister’s directions or modify their terms,” the CIRB said in its decision, signed on behalf of Chairwoman Ginette Brazeau. The decision was unanimous.

MacKinnon had argued that a return to work was needed because Canadians’ livelihoods, safety and communities were at stake. “I expect that railway companies and employees will resume operations at the earliest opportunity,” he said on X.

Canadian National Railway Co. and Canadian Pacific Kansas City Ltd. shut down operations Aug. 22 after talks with the Teamsters Canada Rail Conference failed. Following MacKinnon’s request to the board, CN trains started rolling again early Friday, but CPKC workers went on strike. A strike notice was issued to CN by the Teamsters for 10 a.m. on Aug. 26.

The Teamsters union, which represents nearly 10,000 workers at the two railways, said in an emailed statement that it will “lawfully comply” with the decision. However, it will appeal the ruling to the Federal Court.

“This decision by the CIRB sets a dangerous precedent,” union President Paul Boucher said. “The rights of Canadian workers have been significantly diminished today.”

CN said in a news release that it’s “satisfied that this order effectively ends the unpredictability that has been negatively impacting supply chains for months.”

CPKC said in an emailed statement that it has ended its lockout. Employees are expected to resume their duties at 12:01 a.m. New York time on Monday. “We are working with customers on a balanced return to normal operations,” the railway said.

The tribunal directed parties to attend a meeting on Aug. 29 about the implementation of the arbitration process.

 

FUTURES & WEATHER

Wheat prices overnight are down 2 3/4 in SRW, down 4 1/4 in HRW, down 6 in HRS; Corn is down 4 3/4; Soybeans down 8 1/4; Soymeal down $2.70; Soyoil down 0.02.

Markets finished last week with wheat prices down 27 in SRW, down 25 3/4 in HRW, down 37 1/4 in HRS; Corn is down 14; Soybeans down 11 1/4; Soymeal down $8.70; Soyoil up 1.28.

For the month to date wheat prices are down 26 3/4 in SRW, down 35 in HRW, down 34 3/4 in HRS; Corn is down 13 1/2; Soybeans down 57 3/4; Soymeal down $13.90; Soyoil down 1.96.

Year-To-Date nearby futures are down 20.5% in SRW, down 19.7% in HRW, down 25.0% in HRS; Corn is down 23.0%; Soybeans down 26.9%; Soymeal down 21.2%; Soyoil down 13.4%.

Chinese Ag futures (NOV 24) Soybeans up 6 yuan; Soymeal down 9; Soyoil up 60; Palm oil up 146; Corn up 11 — Malaysian Palm is up 54.

Malaysian palm oil prices overnight were up 54 ringgit (+1.40%) at 3921.

There were changes in registrations (-24 Soyoil). Registration total: 424 SRW Wheat contracts; 6 Oats; 15 Corn; 10 Soybeans; 415 Soyoil; 0 Soymeal; 0 HRW Wheat.

Preliminary changes in futures Open Interest as of August 23 were: SRW Wheat down 10,105 contracts, HRW Wheat down 1,237, Corn down 23,766, Soybeans down 1,637, Soymeal down 639, Soyoil down 6,827.

 

Northern Plains: Scattered showers moved through over the weekend, but many areas stayed favorably dry for the continued harvest. Scattered showers will stay in the region through Thursday before a system finally pushes out of the region. Loss of quality and delays to harvest will be possible for wheat.

Central/Southern Plains: Heat spread through the region over the weekend. Some limited showers did as well, but many areas stayed dry. Limited showers will continue to be possible until a front comes through late in the week. The front should also bring in some cooler temperatures. Models disagree if the front will clear the region or get stuck over the south and continue to produce showers into next week.

Midwest: Temperatures increased over the weekend, becoming hot in some spots, which continues through a good portion of this week. Some showers developed around Missouri, but that was about it. Another front will sneak into the region this week. It may take out some of the extreme heat in some spots, but also be the focus for at least some showers. The potential for widespread rainfall is low until another front pushes through Thursday and Friday. That will bring more sweeping cooler temperatures through the region along with the needed showers.

Delta: Temperatures rose over the weekend while it stayed dry, an unfavorable combination for filling cotton and soybeans. The hot and dry conditions are likely to last much of the week, until a front moves through Friday through the weekend. This should bring widespread showers and could linger into next week. Models are mixed about that prospect. Cooler temperatures will also filter into the region, much more favorable conditions for filling crops.

Canadian Prairies: Scattered showers went through over the weekend, creating some strings of heavy rainfall and some severe storms. It should be drier Monday, but another front and system will move through Tuesday through Thursday with scattered showers and potential strong winds that could be damaging to mature wheat, canola, and other crops waiting to be harvested.

Brazil: Scattered showers fell over southern Brazil, getting into Mato Grosso do Sul and Sao Paulo, but no further north. Extremely dry conditions exist farther north and they would enjoy some rain before the wet seasons rains come in about a month. Southern areas also saw very cold temperatures move into the region, creating some areas of frosts that could have been damaging to wheat. Cold air remains for the next couple of nights before becoming warm again. It should be dry for much of the week as well. Another front will come through Friday through the weekend. It may not bring much precipitation, but it could drop temperatures again. Models are mixed on how cold the front could be.

Argentina: A few isolated showers fell this weekend, but most areas stayed unfavorably dry. Cold air settled in and produced widespread frosts and freezes, which may have been damaging to wheat, or at least slowed down its development. The cold will stick around the next couple of days and another burst of cool air may come through late this week behind another front. The front is forecast to be dry again, but the prospect of the cold air is disputed in the models. The country remains very dry ahead of spring corn planting, which should start up next month.

Europe: A front moved into western areas over the weekend, bringing scattered showers, but is drying out as it moves eastward. Temperatures continue to be very warm for most areas and will rise in western areas over the course of the week as well. Another front may move in with limited showers late this week, but it likely stays hot and dry through next week, a poor combination in most areas for filling corn. Areas near the Mediterranean may see some isolated showers.

Black Sea: It continued to be hot and dry over the weekend. A small system is in the Black Sea, which may bring a few spotty showers to southern areas. Otherwise, it will be hot and dry for the week, likely through next week as well. Drought continues to expand and damage filling corn and sunflowers.

Australia: Scattered showers moved through most areas outside of Queensland over the weekend, continuing to support good growing conditions for winter wheat and canola. Several systems moving through the Southern Ocean this week will produce some showers across the south, but will not penetrate farther north where it has been drier lately. Temperatures will continue to be very warm except near the coast, which will cause quicker development of winter crops.

The player sheet for Aug. 23 had funds: net sellers of 2,500 contracts of SRW wheat, sellers of 3,500 corn, sellers of 5,000 soybeans, and buyers of 2,500 soyoil.

 

TENDERS

• SOYBEAN SALE: Exporters sold 120,000 metric tons of U.S. soybeans to unknown destinations for 2024/2025 delivery, the U.S. Department of Agriculture said.
• CORN PURCHASE: South Korea’s Major Feedmill Group (MFG) purchased an estimated 67,000 metric tons of animal feed corn expected to be sourced from South America in an international tender
• CORN PURCHASE: South Korean feedmaker Nonghyup Feed Inc. (NOFI) purchased up to 66,000 metric tons of animal feed corn in a private deal without an international tender being issued
• RICE TENDER: Indonesian state purchasing agency Bulog issued an international tender to buy about 350,000 metric tons of rice.

PENDING TENDERS

• CORN, SOYMEAL, BARLEY TENDERS: Algerian state agency ONAB issued international tenders to purchase up to 120,000 metric tons of animal feed corn, 40,000 tons of soymeal, and 35,000 tons of feed barley.
• 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.
• BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase up to 120,000 metric tons of animal feed barley.

 

 

 

TODAY

US Heads for Record Corn, Soybean Yields: Pro Farmer

The US average corn yield is seen at ~181 bushels per acre, Pro Farmer said following the annual crop tour that concluded Thursday. That’s below the USDA’s Aug. 12 forecast of ~183 bushels per acre, but if realized, would still be a record.

• Pro Farmer sees US corn production of ~15 billion bushels, similar to USDA forecast
• Soybean production estimated at ~4.7 billion bushels, with an average yield of ~55 bushels per acre
• That’s higher than USDA estimates of record soybean production of ~4.6 billion bushels, and yields of ~53 bushels per acre

 

Brazil Farmers Harvest 94.2% Of 2024 Second Corn Crop >From 82.8% In The Same Period A Year Earlier, Says Patria Agronegocios

BRAZIL FARMERS HARVEST 94.2% OF 2024 SECOND CORN CROP FROM 82.8% IN THE SAME PERIOD A YEAR EARLIER, SAYS PATRIA AGRONEGOCIOS

 

Brazil C-S Summer Corn Planting 4.2% Done as of Aug 22: Agrural

Compares with 7.5% a year earlier, according to an emailed report from consulting firm AgRural.

• Pace is slower than last year due to mid-August frosts, which made producers more cautious, Agrural says
• Planting work for the first corn crop of the 2024/25 season is almost entirely concentrated in Rio Grande do Sul state, as is common at this time of year
• AgRural estimates a 3.5% drop in the planted area with summer corn in the 2024/25 harvest in the Center-South
• Reduction is due to the low prices of the grain and the concern that the La Nina phenomenon will result in productivity losses

 

SOYBEAN/CEPEA: Increases of dollar and export premium boost prices in Brazil

Soybean prices rose in Brazil this week, influenced by the increase of the exchange rate, which attracted consumers to the domestic market and boosted export premiums. Moreover, price rises are also linked to the fact that some sellers are unwilling to close deals involving large amounts in the spot market.

From August 15-22, the US dollar upped 2% against Real, closing at BRL 5.589 on Aug. 22. The ESALQ/BM&FBovespa Index (Paranaguá) rose 1.7% from August 15-22, closing at BRL 131.16 per 60-kg bag on August 22. The CEPEA/ESALQ Index (Paraná) increased 2.1% in the same comparison, to close at BRL 127.06 per 60-kg bag yesterday.

On the average of the regions by Cepea, soybean prices in the over-the-counter market (paid to farmers) upped 1% from August 15-22. In the wholesale market (deals between processors), quotations rose 1.4%.

BYPRODUCTS – Quotations dropped this week. Shipments from Argentina are back to the normal pace, attracting importers to that country. At the same time, some consumers in Brazil claim to have stocks for the mid-term.

On the average of regions surveyed by Cepea, soybean meal prices moved down 1.6% from Aug. 15-22. Soy oil quotations decreased 0.8% between Aug. 15 and 22, at BRL 6,292.75 per ton (in São Paulo city with 12% ICMS) on August 22.

 

CORN/CEPEA: Harvesting is practically over; prices move up

The harvesting of the second corn crop is practically finished in most producing areas in Brazil. Conab says that, up to August 18, 96.4% of the area in Brazil had been harvested – activities still need to be finished in Goiás, São Paulo, Minas Gerais, Mato Grosso do Sul and Paraná. In this scenario, producers reduced again the volume offered in the spot market, boosting values in many regions.

Price rises were not more significant because of the weak demand, since consumers in Brazil continue to purchase only a few batches. Increases were also limited by international price drops, which were influenced by good expectations of the supply in the United States.

The ESALQ/BM&FBovespa Index (Campinas, SP) upped 1.9% between August 15 and 22, closing at BRL 60.12 per 60-kilo bag on Aug. 22. On the average of the regions surveyed by Cepea, corn values rose 1.7% in the over-the-counter market (paid to farmers) and 1.3% in the wholesale market (deals between processors) in the same period.

PORTS – The pace of shipments have increased this month, but it continues below that registered in August 2023, according to Secex.

In the first 12 producing days of August, Brazilian exports totaled 3.22 million tons, accounting for 34% of the entire volume shipped in August/23 (9.36 million tons). The daily pace is 18% smaller than in August last year, and if this pace continues, Brazil is likely to ship only 4.31 million tons this month. Anec estimates that Brazilian exports may total 7 million tons in August.

At the ports of Paranaguá (PR) and Santos (SP), quotations moved up 1.1% and 3.2% from Aug. 15-22. The US dollar increased 2% in the same comparison, closing at BRL 5.589 on Aug. 22.

CROPS – In Paraná, the harvesting hit 98% of the total up to Aug. 20, according to data from Seab/Deral. In Mato Grosso do Sul, activities totaled 91% of the area by Aug. 16, Famasul says. The percentages already harvested in Goiás, São Paulo and Minas Gerais are at 96%, 75% and 81% until Aug. 18 – data from Conab.

 

Indonesia’s incoming leader hopes to implement 50% palm-based biodiesel in 2025

Indonesia president-elect Prabowo Subianto hopes to implement mandatory 50% palm oil-based biodiesel blending by early next year, which he said would cut fuel imports by $20 billion per year.

Indonesia said last week it planned to raise the blending to 40% in January 2025, from the present 35% concentration, in an effort to reduce fuel imports and lower emission from fossil fuels.

Prabowo takes over in October from incumbent Joko Widodo, whose administration has ordered the palm oil industry to prepare for B50, a 50% blend. Tests have already started on the higher blending preparation.

“We are at B35 now and we will accelerate to B40, B50,” Prabowo said late on Saturday.

“With B50, 50% biodiesel made of palm oil, once we reach B50, that God willing by end of this year or early next year, we will save $20 billion a year, we do not need to send this money overseas.”

The biodiesel industry may need to improve quality of its products to ensure the fuel will remain stable for higher mandatory blending, said Tatang Hernas Soerawidjaja, a biofuel expert at Bandung Institute of Technology.

 

US Cattle on Feed Rose to 11.1M Head on Aug. 1

The feedlot herd rose 0.3% from a year ago, according to the USDA’s monthly report. Analysts were expecting a rise of 0.1%

• Placements onto feedlots up 5.8% to 1.702m head
• Cattle marketed from feedlots increased 7.7% to 1.855m head

 

US Beef Production Up 1.4% This Week, Pork Down: USDA

US federally inspected beef production rises to 514m pounds for the week ending Aug. 24 from 507m in the previous week, according to USDA estimates published on the agency’s website.

• Cattle slaughter up 1% from a week ago to 608m head
• Pork production down 0.5% from a week ago, hog slaughter falls 0.4%
• For the year, beef production is 1.3% below last year’s level at this time, and pork is 1.5% above

 

US Egg Production Fell 2.4% in July From Year Ago: USDA

The US produced 9.06b eggs in July vs 9.28b in the same period a year ago, according to a report from the USDA.

• Output of table eggs fell 2.6% y/y to 7.76b
• Hatching eggs down 1.1% to 1.3b

 

 

 

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