Global Ag News for Sept 20.24

TOP HEADLINES

Argentine farmers abandon some wheat fields, hope for rain

Argentine farmers have begun abandoning some wheat fields due to an extended lack of rainfall in certain parts of its agricultural heartland, the Buenos Aires grains exchange said in a weekly report on Thursday.

Argentina is a key world supplier of wheat and its farmers have sown some 6.3 million hectares of wheat this season, according to the exchange, but prolonged dry weather in the north and west of the agricultural area is taking its toll.

“The first losses have been reported due to abandoned lots and increased pest outbreaks linked to the poor water conditions,” the exchange said.

In the eastern agricultural area, however, it noted that some 80% of wheat is enjoying normal to excellent conditions, though rain will be needed to maintain these.

Argentina’s wheat harvest begins in November. The exchange has previously warned that more rain will be needed as spring in the Southern Hemisphere is approaching fast.

The exchange added that corn farmers were beginning to sow their fields, with 7.1% of the 6.3 million hectares expected this season now planted. Argentina is the world’s third-largest corn exporter.

 

FUTURES & WEATHER

Wheat prices overnight are up 4 3/4 in SRW, up 4 in HRW, up 2 1/2 in HRS; Corn is unchanged; Soybeans up 2 1/2; Soymeal up $1.90; Soyoil down 0.05.

For the week so far wheat prices are down 24 in SRW, down 30 1/4 in HRW, down 24 1/2 in HRS; Corn is down 6; Soybeans up 12; Soymeal up $1.50; Soyoil up 2.04.

For the month to date wheat prices are up 18 3/4 in SRW, up 3 1/4 in HRW, up 9 3/4 in HRS; Corn is up 4 3/4; Soybeans up 16 3/4; Soymeal up $10.50; Soyoil down 1.13.

Year-To-Date nearby futures are down 9.1% in SRW, down 11.3% in HRW, down 15.5% in HRS; Corn is down 13.6%; Soybeans down 21.3%; Soymeal down 16.4%; Soyoil down 12.6%.

Chinese Ag futures (NOV 24) Soybeans down 19 yuan; Soymeal down 38; Soyoil up 34; Palm oil up 90; Corn down 18 — Malaysian Palm is up 72.

Malaysian palm oil prices overnight were up 72 ringgit (+1.86%) at 3948.

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 19 were: SRW Wheat up 3,730 contracts, HRW Wheat up 1,514, Corn up 6,863, Soybeans up 6,268, Soymeal up 6,526, Soyoil up 1,408.

 

Northern Plains: Some limited showers continued Thursday. Another system may bring a few showers this weekend, but it should be drier through next week. Temperatures will be milder behind the system this weekend, but that is forecast to be short-lived with temperatures rising again next week.

 

Central/Southern Plains: A system to the north brought a front into the region, but it will be stalled out through the end of the week, producing some areas of showers. A low-pressure center is likely to develop along it this weekend and produce more widespread and heavier precipitation, which may help with winter wheat establishment and any immature crops. But for those watching their crops mature or beginning harvest, it could cause some delays.

 

Midwest: A front in the Plains will move into western areas on Thursday and Friday with scattered showers. A system will form along that front with more widespread showers this weekend into next week. Some areas of heavy rain will be possible, most likely in the west. Temperatures remain warm, helping crops to dry down and mature where rain is lower in coverage and intensity. Increasing dryness and drought has not been favorable for the winter wheat crop that is just starting to be planted and could use the rain.

 

Delta: Heavy rain last week has caused harvest delays and potential quality issues for mature soybeans and cotton. Drought has likely been reduced in many areas, though. Any improvements on the Mississippi River have been limited and will be brief without significant precipitation farther upstream, especially in the Ohio Valley. The next significant chance for rain comes with a weak front moving through early next week. The rainfall farther north may help river levels. We will watch for a potential tropical storm to move into the Gulf of Mexico later next week.

 

Southeast: Recent heavy rain has helped to reduce drought, but is also causing delays to harvest and potential quality issues for all crops. Some showers continue in the east the next couple of days, though it will be quieter for most of the region into next week. We will watch for a potential tropical storm to move into the Gulf of Mexico later next week.

 

Canadian Prairies: Widespread showers and areas of heavy rain have occurred. Another system will move through Friday and Saturday with scattered showers. Recent and continued rain will disrupt the remaining harvest and drop quality for some wheat and canola. The rain will help with the ongoing drought, however.

 

Brazil: Recent rainfall has been favorable for southern states, allowing spring planting to increase. A front moving up from Argentina will likely produce more showers through the weekend, and more will be possible with another front later next week. But central Brazil continues to be extremely dry, in some of the worst drought to start off a season in decades. Wet season rainfall may be on track to start on time at the end of next week with spotty showers in Mato Grosso, but producers are going to have to wait for consistent rains to begin planting, which may be pushed back deeper into October. In the increasing likelihood of that occurring, it would put a crunch on the safrinha corn and cotton crops that will start to be planted in January and February.

 

Argentina: Dry weather has been a common theme for the start of corn planting, which has been significantly delayed already. A front will move through on Thursday and could make for some significant rainfall, but mostly for areas in the east with better soil moisture. Western areas are still very dry. More fronts are in line to move through this weekend and again next week, but the rainfall will need to be better for the western half of the country’s growing areas soon or further delays to corn planting will be likely and developing wheat will continue to suffer.

 

The player sheet for Sept. 19 had funds: net sellers of 3,000 contracts of SRW wheat, sellers of 10,000 corn, sellers of 500 soybeans, buyers of 1,000 soymeal, and buyers of 4,000 soyoil.

TENDERS

• WHEAT SALE: Tunisia’s state grains agency is thought to have purchased about 125,000 metric tons of soft wheat and 100,000 tons of durum wheat in an international tender on Thursday.
• WHEAT SALE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 123,012 metric tons of food-quality wheat from the United States, Canada and Australia in a regular tender that closed on Thursday.
• FAILED BARLEY TENDER: Jordan’s state grain buyer is believed to have made no purchase in an international tender of animal feed barley on Thursday.

 

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.

 

 

 

TODAY

US Sold 1.76M Tons of Soybeans Last Week; 847K of Corn: USDA

USDA releases net export sales report on website for week ending Sept. 12.

• Soybean sales rose to 1,757k tons vs 1,474k in previous week
• All wheat sales fell to 258k tons vs 475k in previous week
• Corn sales rose to 847k tons vs 667k in previous week

 

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 Sept. 12, according to data on the USDA’s website.

• Top buyer of soybeans: China with 974k tons
• Top buyer of corn: Mexico with 281k tons
• Top buyer of wheat: Mexico with 60k tons

 

Argentine Corn Production Estimate Sept. 19: Exchange 

The Buenos Aires Grain Exchange releases weekly report on website.

• 2024-25 corn planting area unchanged at 6.3m ha
• Corn planting 7.1% complete

 

India palm oil output to triple in 6 years as farmers plant more, says Agrovet exec

India’s palm oil production is likely to triple in six years as the area under oil palm plantations increases and as plantations become mature for harvesting, a senior industry official said on Friday.

The world’s biggest edible oil importer relies on Indonesia, Malaysia and Thailand for palm oil supplies. An increase in production will help India slash edible oil imports that account for nearly two-thirds of its total consumption.

India’s palm oil production is likely to jump to 1.2 to 1.5 million metric tons by 2030-31 from the current 400,000 tons, as farmers have been expanding the area, said Sougata Niyogi, chief executive officer of the oil palm plantation division at India’s biggest palm oil producer, Godrej Agrovet Ltd.

Oil palm trees start yielding fruit 3-4 years after planting, with yields increasing significantly at around 6 years.

The oil palm area has been rising at a rapid pace since New Delhi started providing incentives to farmers from 2021 to curb vegetable oil imports, which cost it $15 billion in the last fiscal year.

The area under oil palm cultivation increased to 375,000 hectares (926,600 acres) by last year, and an additional 80,000 to 100,000 hectares is likely to be added this year, Niyogi told Reuters on the sidelines of the Globoil India conference.

“Government policies are helping farmers expand their planting areas. The new plantations should be ready for harvest by 2030-31, and that’s when we’ll see a big jump in production,” he said.

India currently imports around 16 million tons of vegetable oils per annum, including 9 to 10 million tons of palm oil, mainly from Indonesia, Malaysia and Thailand.

Godrej Agrovet expects its palm oil production to double to 250,000 tons by 2030-31, Niyogi said.

Two years ago, there was a shortage of sprouts, which India imports to produce seedlings, but now enough sprouts are available to accelerate oil palm planting, he said.

 

Key Vegetable Oil Prices Seen Surging in 1H of 2025: Mielke

The average FOB price of RBD palm olein in Malaysia is expected to rise to $1,100 per ton in the first half of 2025 from $894 a year earlier, according to Thomas Mielke, executive director of Hamburg-based Oil World.

• Argentina soybean oil’s avg FOB price is seen jumping to $1,130 per ton in 1H from $890 a year ago, he said at the Globoil conference in Mumbai on Friday
• Avg FOB price of sunflower oil from the Black Sea region may touch $1,220 during the period, up from $810
• Sunflower and rapeseed oils are likely to tighten in 2024-25, building price premiums over soybean oil and palm oil, Mielke said
• Indian vegetable oil demand seen at 16.8m tons in the year starting in October, against 16.3m tons a year earlier
  • Palm oil imports are expected to rise to 9.8m tons from 9.44m tons year ago
  • Inbound soybean oil shipments seen at 4m tons vs 3.2m tons
  • Likely sunflower oil purchases 2.85m tons vs 3.55m tons
• World sunflower oil exports seen falling to 13.91m tons in 2024-25 from 16.02m tons a year earlier
• Detrimental weather conditions have taken their toll on sunseed crops in the Black Sea region
  • Global production is likely to drop by at least 3.5m tons in 2024-25
• Supplies of sunflower seed and rapeseed, including canola, are forecast to decline by 10m-11m tons in 2024-25
• Palm oil has lost its growth dynamics, Mielke said
  • Annual output growth is likely to slow to 1.5m tons or less in the 10 years to 2030, from an avg rise of 2.9m tons in the decade to 2020
• World soymeal output is set to rise by 13m-14m tons in 2024-25

 

Palm Oil May Climb to 4,500 Ringgit on Biofuel Boom, Mistry Says

• Production of tropical oil under pressure due to older trees
• Strong US biodiesel demand seen supporting soybean oil prices

Palm oil will begin a new bull phase early next year on the back of strong demand from biofuel makers and healthy purchases by India and China, according to veteran trader Dorab Mistry.

Crop-based fuels have become the fastest growing segment of global vegetable oil demand, Mistry, director at Godrej International Ltd., said at the Globoil conference in Mumbai on Friday. Subsidies given to the sector have also increased, he said.

The tropical oil is expected to trade between $3,700 ringgit ($884) and 4,500 ringgit a ton between now and June 2025, Mistry said. Purchases for the Chinese New Year and Ramadan in the January-March quarter will also be bullish for the market, he said.

Mistry’s comments could support benchmark palm oil futures, which have slipped about 10% from a peak in early April, and have been volatile due to a seasonal weakness in demand and high production.

Benchmark palm oil futures in Kuala Lumpur were at 3,931 ringgit in the afternoon session on Friday. Prices have been trading below 4,500 ringgit since the middle of 2022.

The outlook for soybean oil is bright as the commodity “will continue to benefit from brisk US biodiesel demand,” Mistry said.

 

Bloomberg Retracts Story on US Soybean Sales After Data Revised

Bloomberg has retracted a story published on Sept. 16 about a sale of 88,400 metric tons of US soybeans to Argentina after the US Department of Agriculture revised its weekly data.

 

IGC Cuts EU Grains Output Forecast; Holds Global Stocks Outlook

Grains production in the EU is now seen at 263.7m tons in the 2024-25 season, down from an August estimate of 267.5m tons, the International Grains Council said Thursday.

• NOTE: Different parts of Europe have been hit by adverse weather, including heat, drought and excessive rainfall
• Still, the IGC kept its estimates for global grains production and stockpiles unchanged, it said in a report
  • Production estimates were raised for the US, Ukraine, Australia and Argentina
• It trimmed its outlook for world corn stockpiles by 1m tons to 276m tons, with production figures also lowered slightly
• World wheat stockpiles estimate was slightly raised to 267m tons
• Rice output and inventory outlooks were unchanged

 

 Dry Weather Dims Outlook for Western Australia’s Wheat Crop

• Industry group trims production forecast to 9.3 million tons
• Lower Australian output could exacerbate tight global supply

A lack of spring rain across Western Australia is expected to crimp wheat production in the nation’s top growing state, according to an industry report, which will likely compound tight global supply.

Output is forecast at 9.3 million tons this season, the Grain Industry Association of Western Australia said in a monthly report on Friday, reducing its estimate by 7% from a month ago. Without further rain in the next two weeks, the slide in overall grain tonnage will continue, according to the group.

A reduction in wheat exports from Australia could add to concerns about global supply, which are the tightest in nine years. Grain futures in Chicago rose on Friday and are almost 9% higher since late August.

Earlier this month, the Australia Bureau of Agricultural and Resource Economics and Sciences estimated Australia was set to produce 31.8 million tons of wheat, 20% above the 10-year average and 23% higher than the year prior. The next report is due to come out in December.

There are still areas in the southern Western Australia that could recover grain yield potential if they get rain over the next two weeks, GIWA said. However, without it, the overall grain tonnage for the state could be closer to 15 million tons, rather than 17 million tons currently forecast.

Farmers in Western Australia typically start harvesting around November.

 

Coceral Cuts EU and UK 2024 Grain Forecast to 280.3m Tons

By Celia Bergin

The EU and UK 2024 grains harvest is now seen at 280.3m tons, Coceral said Friday in a report.

• That’s significantly below a June forecast for 296m tons and 2023’s output of 294.2m tons
• Rain and lack of sunshine impacted crop production in western Europe while hot and dry weather during pollination have affected spring crop yields in southeast Europe

 

 Indonesia Cuts Palm Oil Levy to Be Competitive and Boost Exports

• Government sets new rate as a percentage of reference price
• The move is likely to raise demand for Indonesia palm products

Indonesia reduced its export levy on palm oil in a bid to boost shipments of the tropical commodity.

The world’s biggest grower set the crude palm oil levy at 7.5% of the reference price, according to a decree posted on the finance ministry’s website. The new rule, effective from Sept. 21, will cut the duty to $63 per ton from $90 for September. The levy for processed palm products will be between 3% and 6%.

The changes will help the Southeast Asian nation become more competitive than neighboring Malaysia, the second-largest producer. That could add further pressure on benchmark palm oil futures, which have fallen more than 10% in Kuala Lumpur since a high in April.

Indonesia collects an export tax and an additional levy on palm exports. The levy, which is utilized to fund replanting programs and provide biodiesel subsidies, was previously being set every month in US dollars. The reference rate — a weighted average based on palm oil prices – is set every month by the trade ministry to calculate export duties.

 

U.S. generated fewer renewable blending credits in August, EPA says

The United States generated fewer renewable blending credits in August versus the month prior, data from the Environmental Protection Agency (EPA) showed on Thursday.

About 1.32 billion ethanol (D6) blending credits were generated last month, compared to about 1.33 billion in June, the data showed.

Credits generated from biodiesel (D4) blending fell to 639 million in August from 828 million in the prior month, according to the data.

 

LIVESTOCK: US Red Meat Production Fell 1.8% Y/y in August

Commercial beef and pork production fell to 4.59b pounds in Aug., according to the USDA’s monthly livestock slaughter report.

• Beef production down 3.2% y/y to 2.29b pounds
• Aug. cattle slaughter totaled 2.7m head, a 6.5% decline from a year ago
  • Avg live weight rose by 37 pounds from last year to 1,388 pounds
• Pork production down 0.3% y/y to 2.29b pounds
• Hog slaughter fell 2% y/y to 10,904m head
  • Avg live weight was 282 pounds vs 278 pounds a year ago

 

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

Barge shipments down the Mississippi river declined to 367k tons in the week ending Sept. 14 from 395k tons the previous week, according to the USDA’s weekly grain transportation report.

• Barge shipments of corn fell 13% from the previous week
• Soybean shipments up 13.6% w/w
• St. Louis barge rates were $32.36 per short ton, an increase of $0.68 from the previous week

 

US Corn Crops in Drought Area Rise to 26%, Soybeans 33%: USDA

The following shows the percent of US agricultural production within an area that experienced drought for the week ending Sept. 17, according to the USDA’s weekly drought report.

• Corn crops experiencing moderate to intense drought rose by 8 percentage points from the previous week to 26%
• Soybean crops jumped by 7 points to 33% in drought

 

 

 

 

 

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