Global Ag News for Oct 9.24

TOP HEADLINES

Scant rain in Argentina not to reverse problems facing wheat, exchange says

Recent rainfall over parts of Argentina’s core farmland has not been enough for farmers to erase losses to many wheat fields and move forward with this season’s corn planting, the Rosario grains exchange said on Tuesday.

The agricultural heartland of the South American nation, a major world grains supplier, received 2 to 10 millimeters of rain in the last 24 hours, the national weather service said.

“The rainfall recorded is not enough for much of the core region to reverse the critical situation,” the exchange said, warning that at least 25 to 30 millimeters of rain were needed to stop wheat losses and turn to corn plantings.

The Rosario exchange estimates that the 2024/25 season will produce 20.5 million metric tons of wheat, but last month it warned it would likely cut its harvest forecast due to the dry conditions over large swathes of planted wheat fields.

Two weeks ago, the Buenos Aires grains exchange said if there is no significant rainfall in the near future, it could cut its estimate for the this season’s corn planting area, which it pegs at 6.3 million hectares.

Argentine farmers began planting corn in September and are set to start harvesting wheat next month.

 

FUTURES & WEATHER

Wheat prices overnight are up 8 3/4 in SRW, up 9 1/2 in HRW, up 9 3/4 in HRS; Corn is up 2 1/4; Soybeans up 5 1/4; Soymeal up $1.90; Soyoil up 0.19.

For the week so far wheat prices are up 10 1/4 in SRW, up 11 3/4 in HRW, up 13 1/4 in HRS; Corn is down 2 3/4; Soybeans down 17; Soymeal down $5.60; Soyoil down 0.75.

For the month to date wheat prices are up 19 1/2 in SRW, up 29 1/2 in HRW, up 33 in HRS; Corn is down 1 3/4; Soybeans down 35 1/2; Soymeal down $16.70; Soyoil down 0.03.

Year-To-Date nearby futures are down 4.5% in SRW, down 5.0% in HRW, down 9.9% in HRS; Corn is down 10.5%; Soybeans down 21.1%; Soymeal down 16.2%; Soyoil down 9.3%.

Chinese Ag futures (NOV 24) Soybeans down 40 yuan; Soymeal down 10; Soyoil down 94; Palm oil down 162; Corn down 12 — Malaysian Palm is down 20.

Malaysian palm oil prices overnight were down 20 ringgit (-0.47%) at 4251.

There were no changes in registrations. Registration total: 220 SRW Wheat contracts; 0 Oats; 126 Corn; 232 Soybeans; 352 Soyoil; 126 Soymeal; 5 HRW Wheat.

Preliminary changes in futures Open Interest as of October 8 were: SRW Wheat up 1,448 contracts, HRW Wheat down 1,197, Corn up 12,601, Soybeans down 5,118, Soymeal up 1,151, Soyoil down 8,141.

 

Northern Plains: Continuous warm and mostly dry weather is forecast through next week, favorable for maturing corn and soybeans and harvest.

Central/Southern Plains: Warm and dry conditions continue through next week, being hot on occasion. That is favorable for corn and soybean harvest, but poor for winter wheat establishment. Rainfall two weeks ago has since dried up and the potential for precipitation is very low for the next couple of weeks, leading to poor wheat root establishment. 

Midwest: Largely warm and dry weather continues this week. A front will move through this weekend, bringing showers to the Great Lakes, but a burst of colder air that could linger for a few days, especially in the east. Conditions are mostly favorable for harvest, but not for winter wheat establishment in some areas that missed out on Helene’s rainfall two weeks ago. 

Brazil: The late start to significant rain in central Brazil has caused a slow start to soybean planting. Southern Brazil has had more opportunities to pick up good rainfall over recent weeks. A front is moving up from Argentina into southern Brazil with good rainfall, but this front will make it north into central Brazil that should finally have producers planting in earnest with the true start to the wet season rainfall. That will be about two weeks late, however, and puts a crunch on the safrinha corn and cotton crops when they get planted in early 2025. 

Argentina: Dryness continues to be a major issue for producers throughout most of Argentina. A system that moved in on Sunday is spreading showers over northern areas, but southern areas, and the state of Cordoba in particular, continue to miss out on the rainfall, with poor conditions for reproductive wheat and corn planting. Another front will move through southern areas late this week with streaks of showers into next week, but not the heavy soaking rain that the region needs. Soybean planting doesn’t begin until November, but there could be issues with that as well if rains don’t start picking up in the next couple of weeks. 

Europe: A system that brought rain into western areas this weekend continues to send energy through the continent and scattered showers over the course of the week. Rainfall in the northwest has been a hindrance to corn harvest and wheat planting, which continues there this week. Rainfall elsewhere has moistened soils for winter wheat planting and establishment. 

Black Sea: A system brought meaningful rain to western and central Ukraine over the weekend, but the system responsible is only producing isolated light showers for eastern Ukraine and western Russia as it passes through Monday and Tuesday. Eastern areas have had a terrible go with hot and dry conditions for months. Systems from Europe have not been able to penetrate farther eastward with the rainfall just yet. There is some indication that rainfall will increase this weekend into next week, but that is starting to get awfully late for winter wheat establishment. Though temperatures have been quite warm, the risk of frost will increase throughout the rest of the month, with a cooler shot moving into Russia this weekend. The window for planting with potential for good growing conditions is quickly shutting down. 

Australia: Some isolated showers moved through eastern areas over the weekend, but most areas saw only light rainfall or none at all. Dryness has been an issue in parts of the growing regions this spring. Some pockets of rain will move through this week, but the prospect for moderate soaking rains is very low. Chances may be a little better next week.

 

The player sheet for Oct. 8 had funds: net buyers of 1,500 contracts of SRW wheat, sellers of 4,000 corn, buyers of 5,000 soybeans, sellers of 1,000 soymeal, and sellers of 6,500 soyoil.

TENDERS

• WHEAT PURCHASE: Algeria’s state grains agency OAIC purchased about 500,000 metric tons of milling wheat in an international tender that closed on Tuesday
• SOYBEAN SALES: The U.S. Department of Agriculture confirmed private sales of 166,000 metric tons of U.S. soybeans for delivery to China in the 2024/25 marketing year that began Sept. 1.
• WHEAT PURCHASE: A group of South Korean flour mills bought an estimated 26,000 metric tons of milling wheat to be sourced from the United States
• FEED BARLEY PURCHASE: Tunisia’s state grains agency is believed to have purchased about 125,000 metric tons of animal feed barley in an international tender on Tuesday
• WHEAT TENDER PASSED: Jordan’s state grain buyer is believed to have made no purchase in an international tender to buy 120,000 metric tons of milling wheat which closed on Tuesday
• WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy a total of 115,050 metric tons of food-quality wheat from the United States, Canada and Australia in a regular tender that will close late on Oct. 10.

 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. A new announcement had been expected by traders after Jordan made no purchase in its previous tender for 120,000 tons of wheat on Tuesday.
• CORN, BARLEY TENDER: Iranian state-owned animal feed importer SLAL issued international tenders to purchase up to 120,000 metric tons of animal feed corn and 120,000 tons of feed barley
• BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase up to 120,000 metric tons of animal feed barley.
• 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. 4 are based on seven analyst estimates compiled by Bloomberg.

• Production seen slightly higher than last week at 1.018m b/d
• Stockpile avg est. 23.288m bbl vs 23.459m a week ago

 

Russia Harvested Almost 85m Tons of Wheat, Minister Says: Tass

Russia has by now harvested 120m tons of grains, including almost 85m tons of wheat, Agriculture Minister Oksana Lut says Tuesday, according to Tass.

• Grain has been harvested from over 90% of areas
• Quality of grain of the new harvest is higher than last year’s crop

 

EU Soft Wheat Exports Fall 29% Y/y in Season to Oct. 6

EU soft wheat exports in the season that started July 1 totaled 6.35m tons as of Oct. 6, compared with 8.9m tons a year earlier, the European Commission said on its website.

• Leading destinations include Nigeria with about 937k tons, Egypt with 692k tons and Morocco with 489k tons
• Barley exports were 1.53m tons, down 36% y/y
• Corn imports totaled 5.43m tons, up 10% y/y
• NOTE: Export data for Italy are not complete for the last four weeks, according to the commission; export data for France aren’t complete since the beginning of calendar year 2024; export data for Bulgaria and Ireland aren’t complete since the start of marketing year 2023/24

 

Indonesia Aims to Expand Food Crop Planting Area to Cut Imports

Indonesia aims to expand food crop fields by 3 million hectares over the next five years to cut reliance on imports, says vice agriculture minister Sudaryono on Wednesday.

• Govt seeks new fields outside Java; will also use swamp land for rice planting
• New fields may switch between rice, soybean or corn, depending to local demand

 

Higher biodiesel mandates in Indonesia to curb palm oil supplies, analyst says

Implementation of higher biodiesel mandates in Indonesia, the world’s biggest palm oil producer, is likely to tighten supplies of the vegetable oil, a leading industry analyst said on Tuesday.

Indonesia currently has a mandatory 35% blend of palm oil-based fuel in biodiesel and is seeking to ramp up to biodiesel containing 40% palm oil to cut its energy imports.

The plan, if implemented, could see biodiesel consumption rise to 16 million kilolitres next year.

The move would involve the additional use of 1.5 to 1.7 million metric tons of palm oil, leading to lower export volumes, Oil World senior analyst David Mielke told a palm oil conference in Kuala Lumpur.

“In a situation where we don’t have enough oil, Indonesia increasing the mandate by 5% would make overall supply tight,” he told Reuters on the sidelines of the event.

“So for the consumer worldwide, it would be catastrophic because there would be even less oil available.”

B40 will boost Indonesia’s palm oil use for biodiesel to 13.9 million metric tons from the estimated 11 million tons needed this year, with B35, Indonesia’s biofuel producers association APROBI has estimated.

In recent years, global palm oil supplies have been affected by lower output in the world’s two biggest exporters, Indonesia and Malaysia, due to a pandemic-induced severe labour shortage, lower application of costly fertilisers, and persistent rainy weather conditions.

Palm oil production is expected to increase by 2.3 million metric tons in 2024/25 compared to the previous season, Mielke said, with the price of rival soybean oil expected to rise at a premium over palm oil at the latest by June next year.

Glenauk Economics managing director Julian McGill told the event palm oil will likely trade at around 4,000 ringgit ($933.49) per metric ton in 2025.

Malaysia’s benchmark crude palm oil futures are currently trading at a six-month high. Prices have traded at an average of 3,976.50 ringgit a ton so far this year. The country’s palm oil production is estimated to come in at 19.4 million tons in 2024, compared to 18.55 million tons in 2023, McGill said.

Output in Indonesia, meanwhile, was likely to be 1 million tons lower in 2024 compared to last year, he said. Indonesia’s production was estimated at 54.84 million tons in 2023, according to the Indonesian Palm Oil Association.

 

Brazil’s Inpasa begins operation at its largest corn-based ethanol plant 

Inpasa, Brazil’s largest corn ethanol producer, on Tuesday began operations at an expansion of its main biorefinery, which can now be considered among the world’s largest production unit for the cereal-based biofuel, according to the company. Reuters could not independently verify the claim.

WHY IT’S IMPORTANT

The announcement was made amid efforts by Brazil’s government to increase the footprint of biofuels in local markets, as President Luiz Inacio Lula da Silva signed a bill known as Fuel of the Future into law on Tuesday.

BY THE NUMBERS

The complete plant is designed to produce 2.1 billion liters of ethanol per year, after processing around 4.6 million tons of corn from the country’s second harvest. The volume represents around 10% of corn production in Mato Grosso, Brazil’s largest producer of the cereal.

Corn ethanol production has been growing in Brazil and is expected to reach around 20% of the country’s total ethanol output in the current cycle. The remaining output comes from sugar cane-based ethanol.

In all, investments of 4.1 billion reais ($741.72 million) have been directed to the plant, according to Inpasa.

 

Brazil’s Potencial to invest $109 million to turn biodiesel plant into world’s largest 

Brazil’s Grupo Potencial announced on Tuesday an investment of 600 million reais ($108.86 million) to increase biodiesel output at one of its plants, giving the facility the world’s largest production capacity for soy oil-based biofuel.

WHY IT’S IMPORTANT

The investment was announced amid efforts by Brazil’s government to increase the footprint of biofuels in local markets.

President Luiz Inacio Lula da Silva is slated to sign a bill known as Fuel of the Future into law on Tuesday to promote the gradual increase of biodiesel blend into diesel, among other actions.

BY THE NUMBERS

Grupo Potencial said the plant, located in Parana state, will increase its annual biodiesel production capacity to 1.62 billion liters (428 million gallons) from 900 million liters (238 million gallons).

The plant’s current capacity already makes it the largest unit in Brazil, according to Potencial. Expansion work is scheduled to begin in 2025, with completion scheduled for 2026.

The company believes the additional production will meet market demand as the new law is expected to increase the biodiesel blend with diesel to 25% by 2035, from the current 14%.

 

Singapore Sees Sustained Demand for Biofuels, LNG for Bunkering

Singapore sees continued demand for bunker fuels, especially biofuels and liquefied natural gas, according to Minister of State Amy Khor.

• Sales of biofuels and LNG in the first eight months of 2024 exceeded full-year total in 2023, Khor told the Singapore International Bunkering Conference and Exhibition on Wednesday
• Suppliers will be required to provide digital-bunkering services as a default from April 1 next year: Khor
• The Maritime & Port Authority of Singapore will reduce the frequency of checks on mass-flow meters from twice a year to once from April 2025, helping businesses save costs: Khor
• Singapore will also roll out AI applications to improve the accuracy and efficiency of ship certificate renewals for Singapore-flagged vessels
• Separately, the MPA and the Shandong Provincial Transport Department will sign the Singapore-Shandong Green and Digital Shipping Corridor agreement
• NOTE: Khor is a senior minister of state at the Ministry of Transport and the Ministry of Sustainability and the Environment

 

 

 

 

 

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