Global Ag News for Aug 1.24

TOP HEADLINES

Europe’s Scorching Hot Days Could Stretch Into Autumn

• Wildfire risks will continue, spreading into the UK in August
• Eastern Europe’s crop damage is set to get worse this month

Europe is set to continue seeing scorching heat waves in the coming months, potentially affecting everything from power grids to crops.

“The extreme heat that we have seen dominate southeast Europe through both June and July is set to continue through the rest of summer and probably continue into autumn,” said Olivia Birch, a meteorologist at Atmospheric G2. In northwestern Europe too, heat waves interspersed with some cooler, wetter weather are likely to continue into August, she added.

A tourist uses a fan to shield himself from the sun in Seville.

Overall, above average temperatures in Europe and elsewhere mean that July and August will likely continue to break global temperature records. The highest average temperature on Earth was recorded last month, according to data from the Copernicus Climate Change Service.

FUTURES & WEATHER

Wheat prices overnight are up 2 1/2 in SRW, up 1 in HRW, up 3 in HRS; Corn is down 1 1/4; Soybeans down 3 1/2; Soymeal up $0.50; Soyoil down 0.40.

For the week so far wheat prices are up 5 1/2 in SRW, up 2 1/2 in HRW, down 7 in HRS; Corn is down 11; Soybeans down 28 3/4; Soymeal down $8.90; Soyoil up 0.21.

Year-To-Date nearby futures are down 15.8% in SRW, down 14.6% in HRW, down 19.6% in HRS; Corn is down 18.9%; Soybeans down 20.5%; Soymeal down 8.2%; Soyoil down 9.5%.

Chinese Ag futures (SEP 24) Soybeans up 11 yuan; Soymeal down 7; Soyoil down 8; Palm oil down 24; Corn up 1 — Malaysian Palm is down 37.

Malaysian palm oil prices overnight were down 37 ringgit (-0.95%) at 3871.

There were no changes in registrations. Registration total: 424 SRW Wheat contracts; 6 Oats; 50 Corn; 44 Soybeans; 1,166 Soyoil; 0 Soymeal; 0 HRW Wheat.

Preliminary changes in futures Open Interest as of July 31 were: SRW Wheat up 2,035 contracts, HRW Wheat down 164, Corn down 3,754, Soybeans up 11,516, Soymeal up 1,355, Soyoil down 3,991.

August Deliveries

• Soybeans
  • 7/31: 41
  • Total:  85
• Soybean Oil
  • 7/31: 15
  • Total: 951

 

Northern Plains: Scattered showers continue with another front moving through Wednesday, though mostly in the Dakotas. Another front drops into the region over the weekend and will be pushed through early next week. Temperatures continue to be above normal for the next few days, creating stress for those that do not see much rainfall. Cooler conditions develop behind the front moving through next week, reducing the stress.

Central/Southern Plains: With a couple of fronts moving through this week, some showers have been moving through, but coverage has been quite low. That is likely to continue through the weekend. Despite the fronts, temperatures should continue to be hot and stressful, reducing soil moisture and crop health. A front will get pushed through much of the region next week, bringing a burst of mild air into the region to help reduce the stress. Showers and thunderstorms will develop along the front as well.

Midwest: A front will slowly move across the region through Friday, bringing scattered clusters of showers and thunderstorms, some of which may be severe. Despite the front, temperatures will continue to be hot. Though showers could limit the overall highs, overnight lows will continue to be mostly in the upper 60s and 70s. A cold front will drop into far northern areas this weekend with milder air and will be pushed through the region next week. Showers will occur along this front as well. Despite all the chances for showers, it will come in clusters and many areas are going to be missed. Those that are missed will see declining soil moisture and crop conditions.

Canadian Prairies: Despite some fronts moving through the region this week, showers have been very isolated and light, a trend that continues into the weekend. Temperatures are warmer, though potential for extreme heat is low with the fronts passing through. Soil moisture continues to decline and is becoming critical for wheat and canola in their critical stages of reproduction and fill. Milder air will move in behind a cold front this weekend and another burst of mild air moves across next week. The system that pushes that south early next week could bring a burst of better rainfall, but again should miss some areas.

The player sheet for 7/31 had funds: net buyers of 1,000 contracts of SRW wheat, sellers of 9,000 corn, buyers of 6,000 soybeans, sellers of 3,000 soymeal, and buyers of 2,500 soyoil.

 

TENDERS

• CORN SALES: The U.S. Department of Agriculture confirmed private sales of 104,572 metric tons of U.S. corn to undisclosed destinations for delivery in the 2024/25 marketing year that begins Sept. 1, 2024.
• CORN PURCHASE: Taiwan’s MFIG purchasing group bought about 65,000 metric tons of animal feed corn expected to be sourced from Brazil in an international tender on Wednesday
• WHEAT PURCHASE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 119,145 metric tons of food-quality wheat from the United States, Canada and Australia, in a regular tender which closed on Thursday.
• FEED BARLEY TENDER PASSED: Jordan’s state grain buyer is believed to have made no purchase in an international tender for 120,000 metric tons of animal feed barley which closed on Wednesday.

PENDING TENDERS

• RICE TENDER: Indonesian state purchasing agency Bulog issued an international tender to buy about 320,000 metric tons of rice.
• WHEAT TENDER: The Taiwan Flour Millers’ Association issued an international tender to purchase an estimated 105,650 metric tons of grade 1 milling wheat to be sourced from the United States.

 

 

TODAY

DOE: US Ethanol Stocks Rise 1.1% to 23.973M Bbl

According to the US Department of Energy’s weekly petroleum report.

• Analysts were expecting 23.764 mln bbl
• Plant production at 1.109m b/d, compared to survey avg of 1.086m

GRAIN EXPORT SURVEY: Corn, Soy, Wheat Sales Before USDA Report

Estimate ranges are based on a Bloomberg survey of five analysts; the USDA is scheduled to release its export sales report on Thursday for week ending July 25.

• Corn est. range 750k – 1,400k tons, with avg of 1,041k
• Soybean est. range 400k – 1,200k tons, with avg of 784k

 

USDA June soy crush estimated at 184.584 million bushels, analysts say

The U.S. soybean crush likely slowed in June to 5.538 million short tons, or 184.584 million bushels, analysts surveyed by Reuters estimated ahead of a monthly U.S. Department of Agriculture report due on Thursday.

If the average of eight estimates is realized, it would be down 3.8% from the 192.0 million bushels crushed in May but up 5.8% from the June 2023 crush of 174.5 million bushels.

Crush estimates ranged from 183.5 million to 186.4 million bushels, with a median of 184.3 million bushels.

The USDA is scheduled to release its monthly fats and oils report at 2 p.m. CDT (1900 GMT) on Thursday, Aug. 1.

U.S. soyoil stocks as of June 30 were estimated at 2.081 billion pounds based on the average of estimates from five analysts.

The oil stocks estimate, if realized, would reflect a 4.8% drawdown from 2.187 billion pounds at the end of May and a 5.5% drop from June 30, 2023, oil stocks totaling 2.203 billion pounds.

Analysts’ estimates ranged from 2.060 billion to 2.102 billion pounds, with a median of 2.075 billion pounds.

The National Oilseed Processors Association reported that its members, which account for about 95% of soybeans processed in the United States, crushed 175.599 million bushels in June, while end-of-month oil stocks fell to 1.622 billion pounds.

 

Brazil Soy Exports Seen Reaching 9.76 Million Tns In July Versus 10.43 Million Tns Forecast The Previous Week – Anec

• BRAZIL SOY EXPORTS SEEN REACHING 9.76 MILLION TNS IN JULY VERSUS 10.43 MILLION TNS FORECAST THE PREVIOUS WEEK – ANEC
• BRAZIL SOYMEAL EXPORTS SEEN REACHING 2.00 MILLION TNS IN JULY VERSUS 2.40 MILLION TNS FORECAST THE PREVIOUS WEEK – ANEC
• BRAZIL CORN EXPORTS SEEN REACHING 4.73 MILLION TNS IN JULY VERSUS 4.56 MILLION TNS FORECAST THE PREVIOUS WEEK – ANEC

 

Brazil’s Farm Machinery Revenue Estimated to Fall 25% This Year

Falling grain prices, continued high interest rates and crop losses have led to fewer purchases, Pedro Estevão Bastos de Oliveira, president of agriculture machinery chamber at industry group Abimaq, says in interview

• Sales fell 30% in the first half of 2024
• Sale of harvesting machines slumped 62%; tractors 29%
• June sales increased 12% from May, but still dropped 25% YoY

 

China to Stockpile More Wheat as Heavy Rains Force Local Sales

• Domestic prices have been stuck near three-year lows
• Imports have jumped but appetite is likely to dwindle

China is stepping up state purchases of wheat to support local prices, after heavy rains forced some farmers to unload their crop into a market already heaving with grain.

Sinograin and its affiliates will buy more new crop wheat for their reserves, according to a WeChat post on Wednesday. The state stockpiler made a similar pledge at the start of the harvest in June, but prices have continued to hover near three-year lows on a combination of ample supply and poor demand.

The recent downpour in northern China, a major production hub for wheat, has worsened the glut as farmers and traders rush to sell rather than risk moisture damage to their crops in storage. At the same time, a weak economy is hampering consumption of flour for items like noodles and bread.

“This year has seen record production, weak demand, and a record pace of imports,” said Darin Friedrichs, co-founder of Sitonia Consulting Co. “State reserve purchases helped to stabilize prices after harvest, but prices have continued to be weak.”

China has reported another bumper wheat harvest of 138 million tons, 2.7% higher than last year. Meanwhile, imports in the first half jumped 16% to 9.3 million tons, although weak local prices are likely to curb China’s appetite for foreign shipments going forward.

 

NASS to Review Acreage Data

In preparation for the August Crop Production report, USDA’s National Agricultural Statistics Service (NASS) will review all available data, including survey data and the latest information from USDA’s Farm Service Agency and Risk Management Agency, for planted and harvested acreage for barley, corn, cotton, dry edible beans, oats, peanuts, rice, sorghum, soybeans, sugarbeets, Durum wheat, other spring wheat, and winter wheat. If the data review justifies any changes, NASS will publish updated planted and harvested acreage estimates in the Aug. 12, 2024, report.

NASS conducts planted and harvested acreage reviews based on administrative and survey information during the crop cycle each year as the data become sufficiently complete. Going forward, NASS will review available data for barley, corn, cotton, dry edible beans, oats, peanuts, rice, sorghum, soybeans, sugarbeets, Durum wheat, other spring wheat, and winter wheat in August; chickpeas, corn, cotton, dry edible peas, lentils, peanuts, rice, sorghum, soybeans, and sugarbeets in September; and canola, dry edible beans, and sunflowers in October.

 

Baltic index drops for ninth straight session on weaker vessel rates

The Baltic Exchange’s dry bulk sea freight index, which tracks rates for ships carrying dry bulk commodities, dipped for the ninth straight session on Wednesday as rates for all vessel segments weakened.

The overall index, which factors in rates for capesize, panamax and supramax shipping vessels, lost 54 points, or 3.1%, to 1,708, hitting its lowest level since May 1.

The capesize index fell 122 points, or 4.9%, to 2,377, slipping to a three-month low.

Average daily earnings for capesize vessels, which typically transport 150,000-ton cargoes, such as iron ore and coal, were down $1,017 at $19,712.

Dalian iron ore futures closed slightly lower after drifting in a narrow range, as market participants weighed weak economic data from top consumer China against hopes of further monetary stimulus following a key Politburo meeting. IRONORE/

The panamax index lost 33 points, or 1.9%, to 1,739, hitting a one-week low.

Average daily earnings for panamax vessels, which usually carry about 60,000-70,000 tons of coal or grain cargo, decreased $296 to $15,649.

Among smaller vessels, the supramax index was down 14 point, or 1%, to 1,363.

 

India’s Crops Set for Higher Rainfall Over Remainder of Monsoon

• IMD sees above average precipitation during August-September
• Weather bureau says La Niña to develop toward end of August

Rainfall over the remainder of India’s vital monsoon period is expected to be above the seasonal average, helping efforts by farmers to boost production of rice to soybeans.

The South Asian nation is forecast to receive more than 106% of the long-term average of 422.8 millimeters (16.65 inches) of precipitation during August and September, Mrutyunjay Mohapatra, director general of the India Meteorological Department, said at a briefing in New Delhi on Wednesday.

India’s monsoon runs from June to September and is critical for agricultural production and economic growth in the world’s most populous country, where hundreds of millions rely on farming for their livelihoods. The planting of crops from oilseeds to corn and pulses is currently underway.

A bumper harvest could boost India’s food supplies and potentially allow the government to ease restrictions on rice and sugar exports. Consistent rain is also needed during the monsoon to fill reservoirs, which help irrigate winter crops such as wheat and rapeseed.

Other key points from the briefing:

• Showers in July were 9% above average at 305.8 millimeters
• Rainfall was 14.3% below average in the northwestern region in July, 33% higher in central areas, and about 37% higher in the southern regions
• The eastern and northeastern states got 23% less rain last month
• Rain during August is forecast between 94% and 106% of the long-term average of 254.9 millimeters
• Normal- to above-normal showers likely over most parts of the country during August-September
• La Niña will develop toward the end of August, helping monsoon rains

 

 

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