Global Ag News for Sept 23.24

TOP HEADLINES

USDA Farm Debt Looms as Repayments Fall

US farms’ debt is poised to reach a record in 2024, according to the USDA. Significant increases in real estate debt have boosted the total, while other debt remains roughly steady. Strong repayments look less likely in the coming year as cheaper crops drive down revenue. Fixed interest rates for farms have risen roughly 400 bps since 2022, according to the Kansas City Fed, making higher costs likely as loans roll over. Though long-duration (greater than three years) real estate loans peaked near 80% in 2021, according to Farmer Mac, this leaves many to expire in 2025.

Rising land values create a stubborn cost problem, affecting multiyear mortgage payments and raising rents for those who don’t own. Liquidity is already falling in late 2024, and the pace of repayments is declining.

 

FUTURES & WEATHER

Wheat prices overnight are up 7 in SRW, up 7 1/2 in HRW, up 7 in HRS; Corn is up 4; Soybeans up 11 1/4; Soymeal up $3.50; Soyoil up 0.42.

Markets finished last week with wheat prices down 3 in SRW, down 9 in HRW, down 4 3/4 in HRS; Corn is down 5; Soybeans up 18 3/4; Soymeal down $1.10; Soyoil up 2.67.

For the month to date wheat prices are up 24 in SRW, up 6 1/4 in HRW, up 14 1/2 in HRS; Corn is up 4 3/4; Soybeans up 24 1/4; Soymeal up $9.70; Soyoil down 0.23.

Year-To-Date nearby futures are down 8.4% in SRW, down 11.0% in HRW, down 15.0% in HRS; Corn is down 13.9%; Soybeans down 20.9%; Soymeal down 16.8%; Soyoil down 11.0%.

Chinese Ag futures (NOV 24) Soybeans down 28 yuan; Soymeal down 13; Soyoil up 20; Palm oil up 58; Corn down 30 — Malaysian Palm is up 30.

Malaysian palm oil prices overnight were up 30 ringgit (+0.76%) at 3977.

There were no changes in registrations. Registration total: 220 SRW Wheat contracts; 0 Oats; 126 Corn; 232 Soybeans; 353 Soyoil; 126 Soymeal; 5 HRW Wheat.

Preliminary changes in futures Open Interest as of September 20 were: SRW Wheat up 73 contracts, HRW Wheat up 4,082, Corn up 15,310, Soybeans up 6,005, Soymeal up 2,095, Soyoil down 2,353.

 

Northern Plains: Some showers moved across northern areas with a front this weekend, but most areas stayed dry. A few showers may move through Monday, but most areas will stay dry through the weekend, favorable for maturing crops. Some areas that are further behind would like to see some rain, however. After being milder this weekend, temperatures will be warmer this week.

Central/Southern Plains: A stalled front, a system forming along it produced areas of heavy rain from the northern Texas Panhandle into southeast Kansas with more limited showers elsewhere. An upper-level low will move into the region Tuesday and will get stuck, producing periods of showers, possibly into next week. The low will interact with a hurricane later this week and the forecast could be erratic. Temperatures will be more mild with the upper low moving in.

Midwest: A front brought widespread showers and some areas of heavy rain this weekend. A low-pressure center developing on it will move through early this week with scattered showers then the region should go dry. However, an upper-level low stalling to the southwest will bring a hurricane up into the Southeast and it could get farther north into the region this weekend or next week and another front will likely move through with showers later next week. Harvest could be impacted by rain, though winter wheat areas would like to see the rain. 

Delta: Most areas were dry over the weekend. But a system moving along a front into the region could bring some scattered showers early on this week. An upper-level low will stall out in the region and pull up a hurricane later this week, which may bring in periods of heavy rain to the region. Any more bouts of heavy rain could further degrade quality of soybeans and cotton in the region, but would aid water levels on the Mississippi River. 

Southest: It was drier over the weekend. A front will move into the region later this week and a hurricane is forecast to move north into the region late this week as well. Though it should quickly dissipate from hurricane status as it moves into the region, the remnant low and another upper-level low will spin around just off to the west for several days afterward, which could keep showers in the region well into next week. Heavy rain would likely degrade the remaining crop out in the region and North Carolina has been pummeled with heavy rainfall late and would not benefit from any more. 

Canadian Prairies: A system moved through the region this weekend with widespread showers. A couple of little disturbances will move through this week and weekend, but potential for significant rainfall is lower. Heavy rain from last week probably caused delays to the remaining harvest, however. 

Brazil: A front brought scattered showers to southern states this weekend and another will stall over the far south early this week. Showers will finally move northward later in the week. The recent rainfall has been good for increasing soil moisture for spring planting, but some areas are still very dry. The front moving northward will start to produce showers for central Brazil and Mato Grosso especially by the weekend, kicking off the start of the wet season. However, with how hot and dry it has been over the last several months, producers will likely wait longer to start planting when the showers become more consistent later in October. If they have to wait too long, it could cause significant issues for the coming safrinha corn and cotton crops. 

Argentina: A front moved into the country over the weekend, but showers were largely relegated to eastern Buenos Aires, an area that has good soil moisture. Drought farther west and north has delayed corn planting and been damaging to developing to reproductive winter wheat. That front will get stuck in northern areas, where showers may continue in the northeast, but most areas stay dry. The next significant system would not come until early next week. 

Europe: A system developed across the west this weekend with scattered showers. The system works east with variable showers early this week but will be followed by a stronger system later this week. That will bring more widespread rainfall, strong winds, and a burst of cooler air by the end of the week. Another system will be possible this weekend into next week. Rainfall would help to maintain or improve soil moisture, but could delay winter wheat planting where heavy. 

Black Sea: Western areas have adequate soil moisture, but the majority of eastern Ukraine and western Russia have endured heat and drought for several months, poor conditions for winter wheat planting and establishment. A front will move into western areas late this week, but may not produce much precipitation and fizzle out before reaching eastern areas. Above-normal temperatures and dry conditions continue to be unfavorable for wheat, which continues to have a limited time before frosts and freezes start to become more likely in October. 

Australia: It continued to be dry over the weekend, unfavorable for vegetative to reproductive wheat and canola. A system will try to spread rainfall over eastern areas this week, which is needed. The system will bring through some cold air though and could cause frosts across the southeast, where crops are less developed but still vulnerable.

 

The player sheet for Sept. 20 had funds: net buyers of 1,500 contracts of SRW wheat, sellers of 1,000 corn, buyers of 2,000 soybeans, sellers of 3,000 soymeal, and buyers of 3,000 soyoil.

TENDERS

• SOYBEAN SALE: The U.S. Department of Agriculture confirmed private sales of 121,000 metric tons of U.S. soybeans for shipment to China in the 2024/25 marketing year.
• 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 the United States, Brazil or South Africa.

 PENDING TENDERS

• CORN TENDER: Algerian state agency ONAB issued an international tender to purchase up to 80,000 metric tons of animal feed corn sourced from Argentina or Brazil only. The deadline for submission of price offers was Sept. 18.
• RICE TENDER: Indonesian state purchasing agency Bulog issued an international tender to buy about 450,000 metric tons of rice.
• BARLEY TENDER: Iranian state-owned animal feed importer SLAL has issued an international tender to buy at least 120,000 metric tons of animal feed barley
• BARLEY TENDER: Jordan’s state grains buyer has issued an international tender to purchase up to 120,000 metric tons of animal feed barley

 

 

 

 

TODAY

US Cattle on Feed Rose to 11.2M Head on Sept. 1

The feedlot herd rose 0.6% from a year ago, according to the USDA’s monthly report. Analysts were expecting a rise of 0.6%

• Placements onto feedlots down 1.4% y/y to 1.975m head
• Cattle marketed from feedlots declined 3.6% to 1.818m head

 

Brazil 2024/25 Soy Planting 0.5% Done as of Sept. 20: Safras

Compares with 1.6% last year and a five-year average of 1.5%, according to an emailed statement from consulting firm Safras & Mercado.

• Works are 3% completed in Parana and 0.3% in Mato Grosso
• Planting has not begun in other states

 

Brazil 2024/25 Soybean Crop Seen At 171.78 Million Tns – Safras

Brazil:

• 22.3m tons of wheat vs 22.2m tons year ago
• 5.5m tons of barley vs 5.9m tons year ago
• 2.4m tons of corn, up from 182,500 tons a year earlier

Other crops:

• Rapeseed harvest declined to 3.4m tons vs 4m tons
• Farmers harvested 4.9m tons of sunflower seeds vs 2.4m tons
• Soybean harvest so far is 2.6m tons vs 1.3m tons
• Sugar-beet harvest is 1.7m tons vs 1.5m tons last year

 

CORN/CEPEA: Summer crop planting advances in Brazil

Planting activities of summer crop start gain pace in major producing areas in Brazil, even with the weather adversities last weeks. Regarding prices, some sellers are more flexible, due to the weak international demand. As a result, corn values decrease in consumer regions, while continue firm in other areas.

Up to Sept. 15, 12% of the area had been planted in Brazil, against 9.7% in the week before and 15% in the same period 2023, according to Conab. Planting activities are concentrated in the three states of the Southern Brazil.

In Paraná, data from Seab/Deral indicate that 46% of the summer crop area had been planted up to Sept. 16, above the 29% pointed last week, but below compared to that observer in 2023, of 58%.

In Rio Grande do Sul, 43% of the area had been planted up to Sept. 19, against 48% in the previous year – data from Emater/RS. In Santa Catarina, only 5% of the area had been planted up to Sept. 5, inferior to 23% verified in 2023, according to Conab.

PRICES – The progress of the summer crop, the low international demand and dollar devaluations reduced the interest of buyers in the domestic market. The ESALQ/BM&FBovespa Index (Campinas, SP) moved down 1.9% between September 12 and 19, closing at BRL 62.31 per 60-kilo bag on Sept. 19.

On the other hand, on the average of the regions surveyed by Cepea, corn values rose 1.2% in the over-the-counter market (paid to farmers) and 0.3% in the wholesale market (deals between processors) in the same period.

CONAB – Conab released a report about the 2024/25 season this week, indicating that the summer crop production is likely to amount 23.35 million tons, 1.7% up compared to the 2023/24 season.

For the second and the third crops, the productions may increase to 94 million tons and 2.4 million tons, 4% and 0,3% higher than that in the previous season. Thus, considering the three crops, total supply is expected at 119.78 million tons, for an increase of 3.6%.

Regarding the domestic consumption, Conab estimates 87 million tons, 3.3% up. Exports, in turn, may decrease 5.6%, to 34 million tons.

 

SOYBEAN/CEPEA: Low demand and decrease of dollar press down quotations in Brazil

The low international demand and dollar devaluation against Real pressed down soybean prices in Brazil this week. Moreover, most part of consumers does not show interest to purchase large amounts in the short-term. These players are focused on the harvest beginning in the United States, which has already taking importers to that country, reducing the dispute for the Brazilian product. In this scenario, the gap between prices from purchasers and sellers increased in domestic market, reaching more than BRL 5 per 60-kg bag in some regions.

From September 12-19, the ESALQ/BM&FBovespa Index (Paranaguá) dropped 2.4%, closing at BRL 137.54 per 60-kg bag on Sept. 19. The CEPEA/ESALQ Index (Paraná) downed 1.4% in the same comparison, to close at BRL 134.53 per 60-kg bag yesterday. On the average of the regions by Cepea, soybean prices decreased 0.5% from Sept. 12-19, both in the over-the-counter market (paid to farmers) and in the wholesale market (deals between processors). The dollar devaluated 3.4% in the same period, at BRL 5.427 on Sept.19.

On the other hand, the upward trend was limited by sellers’ retreat to trade the volume of remaining stocks from the 2023/24 season. These agents are focused on the forecasts indicating irregular rainfall in the next fortnight, which could delay the activities.

Conab’s first data indicate that the area cultivated with soybean in the 2024/25 season may increase 3%, totaling 47.4 million hectares. The expectation is that the productivity growth 9.6%, favored by the weather. As a result, production may reach 166.28 million tons, 12.8% higher than the data for the 2023/24 crop and a record.

 

Ukraine’s Grain Harvest Reaches 31.9m Tons, Ahead of Last Year

Ukraine’s grain harvest totaled 31.9m tons as of Friday, the Agriculture Ministry said on its website.

That compares with 29.8m tons harvested by Sept. 22 last year

• The total includes:
  • 22.3m tons of wheat vs 22.2m tons year ago
  • 5.5m tons of barley vs 5.9m tons year ago
  • 2.4m tons of corn, up from 182,500 tons a year earlier
• Other crops:
  • Rapeseed harvest declined to 3.4m tons vs 4m tons
  • Farmers harvested 4.9m tons of sunflower seeds vs 2.4m tons
  • Soybean harvest so far is 2.6m tons vs 1.3m tons
  • Sugar-beet harvest is 1.7m tons vs 1.5m tons last year

 

Argentina Primes Tender to Dredge Soy Waterway: La Nacion

The government is getting specifications ready for an international tender to dredge the Parana River, Argentina’s waterway for soy exports, La Nacion reported citing comments by Economy Minister Luis Caputo at the Rosario Board of Trade.

• The tender could be ready to publish by year-end, with bids to be opened in May, and the contract to be awarded in 3Q25, according to Caputo: La Nacion
• Caputo said the tender could be for a 30-year contract: La Nacion
• NOTES:
  • Crop exporters hope the tender will include a key provision to deepen the shipping channel, so vessels can load bigger cargoes
  • A government agency took over responsibility for dredging the Parana in 2021 after the last contract expired, outsourcing the work to Jan de Nul, a Belgian company that has done the work since the 1990s

 

Xi Stresses Importance of Boosting Farmers’ Income, Xinhua Says

Chinese President Xi Jinping urges authorities to boost efforts to increase farmers’ income and increase efficiency of the agriculture sector, state-owned Xinhua News Agency reported on Saturday.

• China to have another bumper harvest of grain this year, which will support its economic recovery: Xi
• Sector managed to have increased summer grain output and stable rice production despite relatively severe natural disasters: Xi

 

China Braces for Heavy Rain Along Southern Coast, CCTV Reports

Heavy rain is expected to soak some of China’s southern coastal provinces from 2 p.m. local time on Sunday, China Central Television reported, citing the National Meteorological Center.

• Provinces include Fujian, Guangdong and Hainan
• Yellow storm alert was issued at 10 a.m. local time
  • Yellow is the third-highest warning in a four-tier system
• NOTE: Hainan and Guangdong were hit by Super Typhoon Yagi earlier this month, which led to widespread damage

 

US Pork Production Falls 1.9% This Week, Beef Down: USDA

US federally inspected pork production falls to 529m pounds for the week ending Sept. 21 from 539m in the previous week, according to USDA estimates published on the agency’s website.

• Hog slaughter down 2.3% from a week ago to 2.506m head
• Beef production down 1.3% from a week ago, cattle slaughter falls 1.6%
• For the year, beef production is 1% below last year’s level at this time, and pork is 1.6% above

 

US Fertilizer Prices Mixed as Grain Prices Pinch Affordability

Declining grain prices are making fertilizers less affordable as summer fill programs end and costs reset for autumn. India announced another urea tender during the week, following closely on the heels of its last tender, which revealed lower prices than a month ago. Phosphate affordability is deteriorating, touching levels not seen since 2008. (09/20/24)

 

New India Tender Pushes NOLA, International Urea Prices Higher

A new tender call from India late in the week spurred price increases at New Orleans (NOLA), Brazil, the Black Sea and the Middle East. NOLA barges moved to a high of $323 a short ton (st) after starting the week with trades in the $308-$318 range, while Brazil urea edged up to $360 a metric ton (mt) from $350 earlier in the week. Egypt urea was up $5-$7/mt from last week, with Black Sea levels firming to $300-$305/mt vs. $295-$300. Firming ammonia prices were also reported in Europe and the Middle East, with expectations that US prices may trend higher. Urea ammonium nitrate (UAN) in the Midwest saw a slight upward bump late in the week, with reports of new reference prices from CF, while potash prices in the US remained flat. The NOLA phosphate market was down $5/st from last week as fall buying slows.

 

 

 

 

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