Global Ag News for Aug 16.24

TOP HEADLINES

IGC Cuts Outlook for Global Grain Stockpiles in 2024-25 Season

World grain stockpiles at the end of the 2024-25 season are now seen at 581m tons, down from a July estimate of 586m tons, the International Grains Council said in a report.

• Estimate for total grain production was lowered slightly to 2.32b tons
  • EU crops accounted for a large portion of that downgrade
  • EU wheat output is seen 3.9m tons lower that July’s forecast
  • EU corn production is seen lower than previously expected too
  • Forecasts for Ukraine’s corn harvest was cut from 27.2m tons to 26m tons
• Global soybean production is seen at record high of 419m tons; stockpile estimate was raised
• World wheat stockpiles are seen at 266m tons, down from 269m tons previously
• Corn and rice stockpile outlooks were little changed

 

FUTURES & WEATHER

Wheat prices overnight are up 2 1/4 in SRW, up 3/4 in HRW, up 1 1/2 in HRS; Corn is down 2 3/4; Soybeans down 6; Soymeal down $2.00; Soyoil down 0.43.

For the week so far wheat prices are down 13 1/4 in SRW, down 17 1/4 in HRW, down 5 in HRS; Corn is down 3/4; Soybeans down 40 1/4; Soymeal down $4.70; Soyoil down 3.03.

For the month to date wheat prices are up 1/2 in SRW, down 12 1/4 in HRW, up 2 1/2 in HRS; Corn is down 5 1/2; Soybeans down 60; Soymeal down $10.00; Soyoil down 4.24.

Year-To-Date nearby futures are down 15.5% in SRW, down 16.2% in HRW, down 19.0% in HRS; Corn is down 20.9%; Soybeans down 27.0%; Soymeal down 20.5%; Soyoil down 18.1%.

Chinese Ag futures (NOV 24) Soybeans down 20 yuan; Soymeal up 9; Soyoil up 32; Palm oil up 60; Corn down 1 — Malaysian Palm is down 2.

Malaysian palm oil prices overnight were down 2 ringgit (-0.05%) at 3752.

 

There were no changes in registrations. Registration total: 424 SRW Wheat contracts; 6 Oats; 15 Corn; 10 Soybeans; 856 Soyoil; 1 Soymeal; 0 HRW Wheat.

Preliminary changes in futures Open Interest as of August 15 were: SRW Wheat up 1,749 contracts, HRW Wheat down 2,106, Corn down 13,368, Soybeans up 2,686, Soymeal up 3,097, Soyoil up 2,521.

 

Northern Plains: A few systems and disturbances will be moving into the region over the next week, providing occasional periods of showers and thunderstorms. Temperatures should generally be rising into next week, though models disagree on that somewhat. The rain may continue to interrupt wheat harvest and reduce quality if it becomes heavy, but most areas should see light or moderate amounts.

Central/Southern Plains: Scattered showers and areas of moderate to heavy rain have moved through the northern half of the region this week. Though it will likely be drier after Friday, isolated showers will be possible through next week. Conditions are currently favorable for filling corn and soybeans. A ridge should bring higher temperatures northward this weekend and into next week, though models disagree on that. If the heat returns, there could be some significant stress developing in the region with the lower coverage of precipitation again.

Midwest: A system is bringing scattered showers and thunderstorms throughout the region over the next several days, leaving eastward this weekend. Temperatures remain mild and are forecast to largely stay that way through next week. Though it gets drier next week again, conditions are largely favorable for filling corn and soybeans.

Delta: A system moving through the Corn Belt the next few days may bring some showers through, but most areas should continue to stay dry. There is a better chance with a front moving through this weekend and some isolated showers may linger into next week. Temperatures are rising out ahead of the front but will fall a bit behind it. Still, it is largely hot and dry in much of the region, unfavorable for filling cotton and soybeans.

Canadian Prairies: A few disturbances will move through the region with scattered showers going through next week. Overall heavy rain is not forecast, though some areas could see a few downpours from thunderstorms. The rainfall will be unlikely to be helpful as wheat and canola are maturing and could cause a reduction in quality and delays to harvest in some areas.

Black Sea: It continues to be awfully dry in eastern Ukraine and southwestern Russia and it is too late for rain to do anything other than stabilize a poor crop. Conditions elsewhere in the region are better. Very little precipitation is forecast for the next week, hitting the better areas in the west and skipping over the poorer ones in the east. Temperatures will be increasing through the weekend and be stressful again in those drier areas next week.

 

The player sheet for Aug. 15 had funds: net sellers of 2,250 contracts of SRW wheat, sellers of 6,500 corn, buyers of 4,000 soymeal, and sellers of 4,000 soyoil.

 

TENDERS

• FEED WHEAT SALE: Importers in the Philippines are believed to have bought around 50,000 metric tons of animal feed wheat expected to be sourced from Australia on Wednesday
• DURUM WHEAT SALE: Algeria’s state grains agency OAIC is believed to have purchased about 500,000 metric tons of durum wheat in an international tender that closed on Wednesday
• BARLEY TENDER: Jordan’s state grains buyer has issued an international tender to purchase up to 120,000 metric tons of animal feed barley.
• WHEAT ACQUISITION UPDATE: Egypt’s state grains buyer has bought no wheat so far in informal talks with suppliers which started earlier this week after buying a small volume in a tender for 3.8 million metric tons.

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 that can be sourced from optional origins.

 

 

TODAY

US Export Sales of Soybeans, Corn and Wheat by Country

The following shows US export sales of soybeans, corn and wheat by biggest net buyers for week ending Aug. 8, according to data on the USDA’s website.

• Top buyer of soybeans: Unknown Buyers with 503k tons
• Top buyer of corn: Mexico with 286k tons
• Top buyer of wheat: Mexico with 126k tons

 

US Export Sales of Pork and Beef by Country

The following shows US export sales of pork and beef product by biggest net buyers for week ending Aug. 8, according to data on the USDA’s website.

• Japan bought 8.4k tons of the 21.2k tons of pork sold in the week
• South Korea led in beef purchases

 

NOPA July US soybean crush rises to 182.881 million bushels

The U.S. soybean crush rebounded in July to the highest ever for the seventh month of the year, while soyoil stocks dropped by more than expected to the lowest since December, according to National Oilseed Processors Association (NOPA) data released on Thursday.

NOPA members, which account for around 95% of soybeans processed in the United States, crushed 182.881 million bushels of the oilseed last month, up 4.1% from the 175.599 million bushels crushed in June. The crush also eclipsed the July record, set last year, of 173.303 million bushels by 5.5%.

The latest monthly crush was largely in line with the average trade estimate of 182.367 million bushels, based on a Reuters survey of 10 analysts. Estimates ranged from 178.500 million to 185.000 million bushels, with a median of 182.929 million bushels.

U.S. soy crushing capacity has swelled in recent years as processors built new facilities and expanded existing ones to capitalize on strong vegetable oil demand from the renewable fuels industry.

Processors are expecting ample crushing supplies this fall after the U.S. Department of Agriculture this week projected a record large 2024 U.S. soybean harvest.

Soyoil stocks among NOPA members as of July 31 fell to a seven-month low of 1.499 billion pounds, down from the 1.622 billion pounds on hand at the end of June and below year-ago stocks of 1.527 billion pounds.

Analysts, on average, had expected stocks to dip to 1.608 billion pounds, according to estimates from seven analysts.

Soyoil stocks estimates ranged from 1.520 billion to 1.700 billion pounds, with a median of 1.600 billion pounds.

 

Argentine Corn Production Estimate Aug. 15: Exchange

The Buenos Aires Grain Exchange releases weekly report on website.

• Corn production estimate maintained at 46.5m tons
• Corn harvesting advanced to 97.8% complete

 

Int’l Grains Council downgrades forecast for Russian grain exports this agricultural year by 1.2 mln tonnes to 52.2 mln

The International Grains Council (IGC) has downgraded its forecast for Russian grain exports this agricultural year (July 2024 – June 2025) by 1.2 million tonnes to 52.2 million in the August review.

The wheat export forecast was downgraded insignificantly, to 43.2 million tonnes from 43.3 million tonnes a month ago. The forecast for the closest rival, the European Union, was downgraded to 32.4 million tonnes from 33.3 million tonnes, respectively.

Last agricultural year (July 2023 – June 2024), the forecast for Russian grain exports stood at 68.5 million tonnes, including 56.1 million tonnes of wheat.

The IGC also downgraded the forecast for this year’s grain harvest in Russia to 119.4 million tonnes, versus 121.7 million tonnes forecasted in July. The wheat harvest forecast is unchanged, 81.8 million tonnes.

The world grain harvest is forecasted at 2,314.9 million tonnes (2,320.9 million tonnes in the July forecast), including 799.1 million tonnes of wheat (801 million tonnes).

 

Germany to Reap Smallest Grain Harvest Since 2018, DRV Says

Germany will reap the smallest grain harvest since 2018 this year due to reduced acreage and lower yields, agricultural association Deutscher Raiffeisenverband (DRV) said in a statement.

• DRV expects the harvest to reach 39.1m tons, compared with an annual requirement of about 40m tons; the 2023 harvest was 42.6m tons
• Supply bottlenecks cannot be ruled out
• Rapeseed harvest expectations also lowered
• DRV now sees 3.6m tons of rapeseed, from 4.2m tons in 2023
  • Low yields stem from unstable weather, limitations on use of fertilizer
• Germany cannot rely on imports as harvests in other European countries also affected

 

Western Australia’s 2024 Grain Production Seen Higher After Rain

Development of grain crops in Western Australia has improved after prolonged rainfall and warm weather, according to a monthly report from an industry group, which raised its overall production estimate for 2024.

The state is expected to produce 17.4 million tons of grains this year, the Grain Industry Association of Western Australia said

That compares with a forecast of 16.3 million tons made by the association in its July report

For most regions, the crop yield potential is currently sitting around recent high averages

To achieve the forecast grain production, rainfall will need to be in the “decile 5 range” for the remainder of Aug. and Sept., as well as the heat holding off during critical grain fill periods

However, there are still areas of the Great Southern and Esperance that are well down on average annual rainfall

GIWA forecasts wheat output at 10 million tons, up from the estimate in the July report, but lower than a later projection of 10.5 million tons from an agronomist at the association who writes the crop reports

Other crop estimates from the August report:

• Barley: 4.27 million tons
• Canola: 2.12 million tons
• Oats: 535,000 tons

 

Ukraine completes 2024 wheat harvest at 21.7 mln tons, ministry says

Ukraine has completed the 2024 wheat harvest, threshing 21.7 million metric tons of wheat from about 4.8 million hectares, the agriculture ministry said on Friday.

Ukraine harvested 21.6 million tons of wheat in 2023.

 

Ukraine Grain Exports Climb to 5.5m Tons Since Start of Season

Ukraine has exported 5.5 million tons of grain and legumes in the season that started on July 1, the country’s Agrarian Ministry said on its website.

• That’s 68% higher than the year-earlier period
• Total includes:
  • 2.6 m tons of wheat; +96% y/y
  • 840k tons of barley; more then double y/y
  • 2m tons of corn; 31% higher y/y
• Ukrainian farmers have finished harvesting wheat and barley, gathering 28.5m tons of grain and more than 3.4m tons of oilseeds, according to Agrarian Ministry data
  • That’s little changed from last year’s volumes
• NOTE: Most Ukrainian agricultural exports go via Black Sea ports in southern Odesa region. However, one the country’s major trader plans to keep shipping large volumes via much more expensive river routes, considering Greater Odesa ports to be risky

 

Ukraine Grain Trader Says Too Risky to Rely on Black Sea Ports

• Nibulon plans to keep exporting big amounts via river routes
• A Louis Dreyfus facility in Odesa was hit by missile Wednesday

Ukraine’s crucial Black Sea grain ports are again shipping out hefty amounts, but one major trader plans to keep exporting large volumes via much more expensive river routes.

Despite river cargoes barely turning a profit for Nibulon SA, its chief executive officer says it’s important to have a ready-to-use alternative in case Russian attacks cripple Odesa’s deep-sea ports again. He also expects it to have the knock-on effect of discouraging Russian strikes on Black Sea terminals as it makes such attacks less debilitating to the export industry.

“The very fact that we have alternatives provides protection for Odesa ports,” Nibulon CEO Andriy Vadaturskyy said in an interview. That’s “because Russia will understand that its spending for missile strikes will not deliver the effect they look for and the shipments will not stop.”

Ukraine is a key grain supplier, sending staples like wheat and corn around the world, most of which traditionally goes via the Black Sea. But since Moscow’s invasion — which initially blocked sea ports — traders have switched between sea, river, rail and road routes to maintain exports. That has helped to keep a lid on global prices and bring in vital income for Kyiv.

 

USDA Seeks Easier Rules For Crops to be Used in Green Fuels

• Push follows tax credit guidance impacting corn and soy
• USDA chief also warns on limiting foreign biofuel ingredients

The US Department of Agriculture is pushing for eased tax credit requirements regarding crops used as ingredients in the production of renewable fuels, according to Secretary Tom Vilsack.

Current guidance on a subsidy aimed at encouraging production of sustainable aviation fuel — which can be made from ingredients including corn-based ethanol and soybean oil — requires US farmers to adopt a bundling of practices that include the planting of cover crops during the off season and no-till farming. Producers say such demands are sometimes impractical.

The biofuels industry is awaiting guidance from the Treasury Department on the so-called 45Z clean fuel credit under President Joe Biden’s landmark climate legislation. The subsidy will take effect in January.

The USDA is working on a proposal with the aim of giving farmers flexibility to “choose from a menu of activities and actions” under the new rules, Vilsack said during an ethanol conference in Nebraska. Another goal is to make sure that crops potentially benefiting from the new subsidies are not restricted to corn and soybeans, which are dominant in the US farm belt, he added.

Producers of US ethanol and the corn used to make it are worried that if the US Treasury sticks to its current guidance for the upcoming credit, they won’t be able to participate meaningfully in the growing market for sustainable aviation fuel.

Vilsack on Thursday also warned against a push to prevent US biofuels made with foreign ingredients from reaping the benefits of the 45Z tax credit, saying it could hurt American trade.

“If every country does this, then there’s no trade,” he said. “If there’s no trade, then what do we do with the 20% to 30% of the crops we are currently selling overseas? What would that do to prices?”

 

French Soft-Wheat Harvest Almost Complete as of Aug. 12: AgriMer

Some 98% of France’s soft-wheat crop has been harvested, up from 88% the week before, according to data from FranceAgriMer.

• The durum-wheat harvest is now complete
• For corn, 76% of the crop was in good or very good condition
• Compares with 77% a week earlier and 84% a year earlier

 

Kazakhstan to Correct False Harvests That Echo Soviet-Era Deceit

• Regional officials overestimated some crops to win favor
• Deputy Prime Minister says accurate statistics are required

Regional officials, seeking to win favor with Kazakhstan’s leadership, overestimated the country’s grain harvest by as much as 3 million tons last year, according to the deputy prime minister.

In a throwback to Soviet-era misinformation, Kazakhstan’s grain crop was overstated by about 20%. The figures, including 2.1 million tons of wheat, were falsified by regional heads in a system that rewarded higher production, Deputy Prime Minister Serik Zhumangarin, who’s responsible for trade and agriculture, said in interview.

Serik Zhumangarin in his office in Astana.

Now the government wants to correct the figures, as they’re distorting the strengths and weaknesses of the Kazakh agricultural sector, as well as causing subsidies to be misallocated. The misleading numbers could also hinder the country’s drive to expand farm output, Zhumangarin said.

“To plan such things we need to understand whether we have correct statistics data or not,” he said. “We started a statistics amnesty.”

 

US Crops in Drought Area for Week Ending Aug. 13: USDA

The following table shows the percent of US agricultural production within an area that experienced drought for the week ending Aug. 13, according to the USDA’s weekly drought report.

• Corn crops experiencing moderate to intense drought edged up by a percentage point to 6%
• Soybean crops rose by 2 points to 7%
• Spring wheat rose by 3 points to 21%; while durum wheat rose by 11 points to 39% in drought

 

US Miss. River Grain Shipments Rise, Barge Rates Increase: USDA

Barge shipments down the Mississippi river increased to 791k tons in the week ending Aug. 10 from 622k tons the previous week, according to the USDA’s weekly grain transportation report.

• Barge shipments of corn rose 22.3% from the previous week
• Soybean shipments up 25.2% w/w
• St. Louis barge rates were $15.04 per short ton, an increase of $1.04 from the previous week

 

 

 

 

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