Global Ag News for Oct 17.24

TOP HEADLINES

EU Countries Sign Off on 12-Month Delay to Deforestation Law

EU member states backed a 12-month delay to the bloc’s deforestation regulation, giving businesses and other countries more time to prepare for the rules that will affect imports of key commodities.

• Ambassadors from the 27 EU member states approved the delay at a meeting in Brussels on Wednesday
• NOTE: The European Parliament still needs to sign off on the postponement next month

FUTURES & WEATHER

Wheat prices overnight are down 2 in SRW, down 1 1/2 in HRW, up 2 in HRS; Corn is down 2 1/4; Soybeans down 8 1/2; Soymeal down $0.80; Soyoil up 0.05.

For the week so far wheat prices are down 13 1/2 in SRW, down 13 3/4 in HRW, down 18 1/2 in HRS; Corn is down 12 1/4; Soybeans down 31 3/4; Soymeal down $2.00; Soyoil down 1.57.

For the month to date wheat prices are down 1 in SRW, up 3 1/2 in HRW, up 1 in HRS; Corn is down 22 1/4; Soybeans down 85 1/2; Soymeal down $28.70; Soyoil down 1.58.

Year-To-Date nearby futures are down 6.8% in SRW, down 8.0% in HRW, down 13.6% in HRS; Corn is down 14.4%; Soybeans down 24.7%; Soymeal down 18.9%; Soyoil down 12.7%.

Chinese Ag futures (JAN 25) Soybeans up 10 yuan; Soymeal down 5; Soyoil up 34; Palm oil up 42; Corn down 6 — Malaysian Palm is down 40.

Malaysian palm oil prices overnight were down 40 ringgit (-0.92%) at 4295.

There were changes in registrations (-33 Soyoil, -50 Soymeal). Registration total: 220 SRW Wheat contracts; 0 Oats; 126 Corn; 232 Soybeans; 369 Soyoil; 176 Soymeal; 5 HRW Wheat.

Preliminary changes in futures Open Interest as of October 16 were: SRW Wheat down 2,875 contracts, HRW Wheat up 2,537, Corn up 25,913, Soybeans up 15,512, Soymeal up 9,519, Soyoil up 1,744.

 

Northern Plains: A front will move in on Thursday with isolated showers that could last into Saturday. Another pulse of isolated showers is possible early next week. Temperatures should generally be near or above normal into next week, with some potential for cold moving in by the middle of next week. Conditions are still good for harvest, though breezy winds at times could be a concern for wildfires in the dry conditions.

 

Central/Southern Plains: Though a burst of chilly air continues early Wednesday, warmth returns Wednesday night with increasing winds that could be a concern for wildfires. A front and system will move in on Friday and finally bring some showers into the region, which could last through Monday. Winter wheat and livestock producers would welcome the rain and models have some spotty areas of 1-2 inches being possible, especially closer to the mountains. 

Midwest: Cold air will move out from west to east later over the next couple of days. Another front will move into western areas on Friday or Saturday, but is forecast to produce very little rainfall, and fizzle out before getting eastward. We could see a burst of isolated showers moving through the region early next week, though. Conditions for harvest are still generally favorable, though areas that plant winter wheat would like to see more rain. 

Brazil: Wet season showers continue in central Brazil. The late start has caused soybean planting to be behind significantly. We will have to see if producers can make up the gap in soybean planting or if there will be a significant portion of the crop that is planted late. They have about two weeks. If it is late, the safrinha corn crop will be planted late as well, exposing more of it to the dry season in 2025. Southern Brazil has had much better weather for corn and soybean planting as well as for the remaining filling wheat. 

Argentina: The weather pattern is more active across Argentina. Another burst moves through Wednesday and Thursday with good coverage, bringing needed rain for corn planting and drought-stricken wheat. More rain is needed, but the forecast is a favorable one for now with another potential widespread rain event for early-to-mid next week. Soybean planting doesn’t begin until November, but there could be issues with that if drought is not significantly reduced over the next couple of weeks. 

Europe: Another big storm is sending more impulses into Europe this week with batches of rain that are forecast to be heavier across the west and very dry in the east. Rainfall in the northwest has been a hindrance to corn harvest and wheat planting. Rainfall elsewhere has been more beneficial for winter wheat planting and establishment and the drier conditions in the east will allow some areas to recover from the wetness. 

Black Sea: Isolated showers may continue in eastern Ukraine and western Russia into the weekend with a system that has stalled out over the Black Sea. However, the drought situation continues to be very bad across the east despite the incoming rain. With colder air moving into the region, frosts are starting to become more common and closing the window on the potential for good root establishment before winter. The region will hope for good precipitation over the winter to make up for the lost time this fall. 

Australia: A couple of fronts and systems moving through this week are spreading rain across much of the country, which will be useful for areas that get hit. Areas that get missed in the south would fall further behind.

 

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

 

TENDERS

• CORN SALE: The U.S. Department of Agriculture (USDA) confirmed private sales of 1,623,060 metric tons of U.S. corn to Mexico. Of the total, 1,043,940 tons was for shipment in the 2024/25 marketing year and 579,120 tons was for 2025/26.
• SOYBEAN SALE: The USDA confirmed private sales of 175,000 metric tons of U.S. soybeans for shipment to unknown destinations in the 2024/25 marketing year.
• CORN SALE: The USDA confirmed private sales of 332,000 metric tons of U.S. corn for shipment to unknown destinations in the 2024/25 marketing year.
• CORN SALE: South Korea’s Major Feedmill Group (MFG) purchased an estimated 131,000 metric tons of animal feed corn in an international tender on Wednesday.
• WHEAT SALE: The Taiwan Flour Millers’ Association purchased an estimated 78,200 metric tons of milling wheat to be sourced from the United States in a tender on Thursday
• CORN PURCHASE: South Korean feedmaker Nonghyup Feed Inc. (NOFI) purchased about 65,000 metric tons of animal feed corn in a private deal on Wednesday without an international tender being issued
• FAILED BARLEY TENDER: Jordan’s state grain buyer is believed to have made no purchase in an international tender to buy 120,000 metric tons of animal feed barley on Wednesday.
• WHEAT, BARLEY PURCHASE: Japan will import 700 metric tons of feed-quality wheat, and 220 tons of barley for livestock use, via a simultaneous buy and sell (SBS) auction, the Ministry of Agriculture, Forestry and Fisheries (MAFF) said. 

PENDING TENDERS

• 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
• CORN TENDER: Taiwan’s MFIG purchasing group has issued an international tender to buy up to 65,000 metric tons of animal feed corn, which can be sourced from Argentina, Brazil or South Africa
• WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 metric tons of milling wheat

 

 

 

 

TODAY

ETHANOL: US Weekly Production Survey Before EIA Report

Output and stockpile projections for the week ending Oct. 11 are based on six analyst estimates compiled by Bloomberg.

• Production seen higher than last week at 1.046m b/d
• Stockpile avg est. 22.331m bbl vs 22.154m a week ago

 

France Cuts Wheat Exports Outlook on Non-EU Sales Slump: AgriMer

Soft-wheat exports from France in the 2024-25 season are estimated at 10.025m tons, slightly down from a September estimate of 10.1m tons, crops office FranceAgriMer said in a report Wednesday.

• The drop comes largely from a 61% decline in sales outside the European Union
• Stockpiles projection cut to 2.5m tons from 2.75m tons in September

BARLEY:

• Stockpile estimate cut to 1.36m tons from 1.45m tons in September
• Export outlook slightly cut to 5.026m tons from 5.028m tons from September

CORN:

• Stockpiles seen at 2.42m tons, down from 2.6m tons in September
• Exports forecast raised to 4.69m tons from estimates of 4.53m tons in September

 

Rainfall forecast brings positive expectations; liquidity is low

Cepea, October 16, 2024 – Forecasts of rainfall in important soy producing areas in Brazil brought good expectations for players in mid-October, especially due to the limited pace of planting activities of the 2024/25 crop.

Liquidity, in turn, was low, and part of the demand was allocated to the soybean from the United States. The industry in Brazil was away from closing trades of large amounts, expecting that the possible improvement of weather conditions favors the planting of the new season, pressing quotations down.

The ESALQ/BM&FBovespa Index (Paranaguá) moved down 0.57% from September 30 to October 15, closing at BRL 140.35 per 60-kg bag on Oct. 15. The CEPEA/ESALQ Index (Paraná) dropped 0.23% in the same comparison, to close at BRL 138.70 per 60-kg bag.

CROPS – Conab indicates that soybean planting activities reached 5.1% in Brazil up to Oct. 6.

EXPORTS – Secex indicates that 6.1 million tons of soybeans were shipped in September, 24% less than in August, 4.5% down compared to September/23 and the smallest volume since January this year. Still, from January to September 2024, exports totaled 89.54 million tons, 2.6% more than in the same period last year and a record.

As for soybean meal shipments, the decrease from August to September was 15.22%, totaling 1.75 million tons. Concerning soy oil, exports amounted 81.16 thousand tons last month, downing 23.2% compared to August – data from Secex.

 

Acreage shifts from corn to boost 2024/25 Argentina soybean area despite weather woes

2024/25 Argentina: 50.7 [44.5–56.1] MILLION TONS

2024/25 Argentina soybean production is provisionally set at 50.7 [44.5–56.1] million tons, up 5.4% from last season’s 48.1 million tons. Much of the increase in production is attributed to higher planted area, which is preliminarily projected at 17.9 million hectares, up 11.3% from the LSEG Agriculture Research’s final 2023/24 season area estimate of 16.1 million hectares. Our current planted area outlook is above 17.7 million hectares reported by Bolsa de Comercio in Rosario, but well below the Bolsa de Cereales in Buenos Aires’ 19.0 million hectares. Meanwhile, harvested area is estimated at 17.2 million hectares, slightly above the USDA’s latest projection of 16.9 million hectares. Some acreage shifts from corn to soybeans are expected, as the current economic/political climate and weather conditions are deemed to be in the latter’s favor.

Argentina’s soybean area has been slowly expanding over the past two years, amid steady contraction of corn acreage. This trend is expected to continue this season, despite a severe early season dryness across the key producing areas of its top three growing provinces – southeastern Córdoba, northern Buenos Aires and southern Santa Fe, which collectively account for over 60% (province-wise) of the country’s total soy production. The core crop areas of these key provinces have barely received any rain over the past 30 days (less than 20 mm in total, with deficits between 30-80 mm), and near 6-year low soil moisture levels there (unlike the rest of the main Pampas region that has been benefitted greatly from recent rains) are discouraging both corn and soy farmers from immediate sowing. Unlike soybean farmers, however, corn farmers have little choice but to commit heavily to early corn, or switch to soybeans, amid worries over the possible re-emergence of the leafhoppers which led to late season crop damage early this year – as most of the corn impacted last season was later planted corn (sown in November/December). With such dire sowing conditions, early corn farmers’ best option may be to pivot to soybeans (rather than commit to later corn planting) which do not need to be planted until late October/early November. As such, early corn is expected to lose its share considerably, partly forcing soybean area to expand. While both corn and soybean prices remain below last year’s levels (despite recent small rallies), hurting profitability potential for both crops, export tax policies are largely in soybean farmers’ favor as well – with now 15% levies on corn, up 3% from 12% for the past 4 years – as levies on soy remain unchanged. Sizable acreage shifts from corn to soybeans are inevitable as there is less financial incentive present and more risks involved for Argentine farmers to commit to corn over soybeans.

One important variable for acreage estimation is planting progress. First crop soybean planting typically starts during late October (vs. early corn’s late September kick-offs), and soy in general has a narrower planting window compared to corn in Argentina. The current La Niña event is forecast to last through the end of the year and may not completely dissipate by early next year (according to the LSEG Weather Research team’s latest long-term December-February ENSO analysis). La Niña conditions are most frequently associated with hot and dry weather in the main Pampas region. Argentina’s very worst harvests occurred during La Niña events historically, warranting attention. Yield and percent harvested can still vary greatly in response to forward weather, but under normal conditions should reach 2.94 tons per hectare and 96% harvested, respectively. Persistent dryness coupled with hot temperatures could lower production to 44.5 million tons. On the other hand, production could rise to 56.1 million tons, assuming ideal growing conditions without extreme weather occurrences.

 

China’s grain barn reaps bumper harvest of soybean

Soybean harvesting in China’s major soybean producing area of Heihe in Heilongjiang Province is near completion, poised for a bumper harvest, according to the city’s agricultural authority on Wednesday.

The harvesting has been completed in more than 90 percent of Heihe’s 1.38 million hectares of soybean planting area, which was 10 percent faster than that of last year, said Su Hui, deputy director of the city’s agriculture and rural affairs department.

He said that the soybean production this year has been orderly. In harvested areas, growers and the local authorities have started to carry out soil conservation and preparation for achieving high yield next year.

“Heihe’s soybean output this year is poised to increase, compared to that of last year, which should partly be attributed to high-quality soybean varieties and improved planting technology,” said Jia Hongchang, a researcher with the Heihe branch of the Heilongjiang Academy of Agricultural Sciences.

Heilongjiang, China’s major grain barn, is the country’s largest soybean-producing province. Heihe alone produces about one-seventh of the country’s soybean output. The city’s soybean output in 2023 amounted to 2.6 billion kg.

Jia said that the province has accelerated the construction of the soybean seed breeding bases for developing high-quality seeds. Heihe’s plantation areas have realized a 100-percent coverage rate of high-quality soybean seeds.

With the faster pace of harvesting, big grain purchasers are moving up their stock.

“These days, our purchase volume has risen sharply to reach more than 300 tonnes a day at the highest. All of our 80 sets of automatic soybean oil pressing machines have powered on for processing soybeans,” said Chen Liang, chairman of Heilongjiang Xuda Cereals, Oils and Foods Co., Ltd.

 

 

 

 

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