Global Ag News for Dec 10.24

TOP HEADLINES

Fastmarkets, ICE Launch Used Cooking Oil Contract for US Gulf

Futures contract for used cooking oil, or UCO, will be underpinned by Fastmarkets’ physical price assessments of the feedstock at the US Gulf Coast, Fastmarkets and ICE said Monday in a joint statement.

• Contract is designed for feedstock suppliers, refiners, traders, biodiesel producers and financial institutions
• “Liquidity in ICE’s biofuel complex has been growing rapidly over the last few years,” Jeff Barbuto, global head of oil markets at ICE, said in the statement
• Rival exchange CME Group is also launching a UCO contract

 

FUTURES & WEATHER

Wheat prices overnight are down 2 1/4 in SRW, down 2 3/4 in HRW, down 2 1/2 in HRS; Corn is down 1/4; Soybeans up 2; Soymeal up $1.60; Soyoil down 0.71.

For the week so far wheat prices are down 3/4 in SRW, up 2 1/4 in HRW, up 4 1/4 in HRS; Corn is up 1 1/2; Soybeans down 1 3/4; Soymeal up $3.80; Soyoil down 0.89.

For the month to date wheat prices are up 8 1/2 in SRW, up 15 1/4 in HRW, up 9 in HRS; Corn is up 8 1/2; Soybeans up 2 1/2; Soymeal down $0.70; Soyoil up 0.26.

Year-To-Date nearby futures are down 13.8% in SRW, down 15.5% in HRW, down 19.5% in HRS; Corn is down 8.0%; Soybeans down 23.3%; Soymeal down 25.5%; Soyoil down 11.7%.

Chinese Ag futures (JAN 25) Soybeans down 1 yuan; Soymeal up 16; Soyoil up 42; Palm oil down 48; Corn up 17 — Malaysian Palm is down 165.

Malaysian palm oil prices overnight were down 165 ringgit (-3.22%) at 4955.

There were changes in registrations (200 Soymeal). Registration total: 20 SRW Wheat contracts; 72 Oats; 3 Corn; 356 Soybeans; 369 Soyoil; 1,291 Soymeal; 105 HRW Wheat.

Preliminary changes in futures Open Interest as of December 9 were: SRW Wheat down 3,264 contracts, HRW Wheat down 968, Corn up 7,416, Soybeans down 9,064, Soymeal down 3,380, Soyoil down 3,186.

 

Brazil: Rio Grande do Sul and Parana:  Mostly dry Tuesday-Thursday. Scattered showers Friday. Temperatures below normal Tuesday, near normal Wednesday-Friday. Mato Grosso, MGDS and southern Goias:  Scattered showers Tuesday-Friday. Temperatures near to above normal through Wednesday, near normal Thursday-Friday.

Argentina: Cordoba, Santa Fe, Northern Buenos Aires:  Isolated showers through Thursday. Mostly dry Friday. Temperatures near normal Tuesday-Friday. La Pampa, Southern Buenos Aires: Isolated showers through Thursday. Mostly dry Friday. Temperatures near normal Tuesday-Friday.

Central/Southern Plains: Isolated snow north Tuesday-Wednesday. Mostly dry Thursday. Scattered showers east Friday. Temperatures near to below normal Tuesday-Thursday, near to above normal Friday. Outlook: Isolated to scattered showers Saturday-Wednesday. Temperatures above normal Saturday-Tuesday, near to above normal Wednesday.

Midwest: West: Isolated showers through Thursday. Scattered showers south Friday. Temperatures near normal Tuesday, below to well below normal Wednesday-Thursday, near normal Friday. East: Isolated showers Tuesday. Scattered snow/lake-effect snow Wednesday-Thursday. Mostly dry Friday. Temperatures above normal Tuesday, below normal Wednesday-Friday. Outlook: Isolated to scattered showers Saturday-Tuesday. Mostly dry Wednesday. Temperatures above normal Saturday-Wednesday.

 

The player sheet for Dec. 9 had funds: net buyers of 1,000 contracts of SRW wheat, buyers of 5,000 corn, buyers of 2,000 soybeans, and sellers of 2,000 soyoil.

TENDERS

• CORN SALES: Importers in Spain have booked purchases totaling about 400,000 to 500,000 metric tons of corn from the United States, likely for shipment in the first quarter of the new year
• FAILED CORN TENDER: Algerian state agency ONAB is believed to have made no purchase in a tender which closed on Thursday for up to 240,000 metric tons of corn to be sourced only from Argentina or Brazil.
• DELAYED WHEAT SHIPMENT: The first shipment from Egypt’s purchase of 430,000 metric tons of Russian wheat began loading on Saturday, following a nearly three-month delay, three sources with direct knowledge of the matter told Reuters. The shipment, consisting of 63,000 tons, is expected to depart the port this week to arrive in Egypt before the end of the year, the sources said.

 PENDING TENDERS

• WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy a total of 112,889 metric tons of food-quality wheat from the U.S., Canada and Australia in a regular tender that will close late on Thursday.
• RICE TENDERS: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 metric tons of rice
• NON-GMO SOYBEAN TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued international tenders to purchase a total of 70,000 metric tons of food-quality soybeans free of genetically modified organisms
• MILLING WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy up to 120,000 metric tons of milling wheat sourced from optional origins.
• BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase up to 120,000 metric tons of animal feed barley.

 

 

 

 

TODAY

US Inspected 1.05m Tons of Corn for Export, 1.622m of Soybeans

In week ending Dec. 5, according to the USDA’s weekly inspections report.

• Soybeans: 1,622k tons vs 2,110k the previous wk, 1,000k a yr ago
• Wheat: 227k tons vs 299k the previous wk, 294k a yr ago
• Corn: 1,050k tons vs 949k the previous wk, 725k a yr ago

 

US Corn, Soybean, Wheat Inspections by Country: Dec. 5

Following is a summary of USDA inspections for week ending Dec. 5 of corn, soybeans and wheat for export, from the Grain Inspection, Packers and Stockyards Administration, known as GIPSA.

• Soybeans for China-bound shipments made up 847k tons of the 1.62m total inspected
• Mexico was the top destination for corn inspections, Indonesia led in wheat

 

China November Imports

General Administration of Customs says on website.

• Soybean Imports 7.154m Tons
  • Soybean imports YTD rose 9.4% y/y to 97.09m tons
• Edible vegetable oil imports in Nov. 498,000 tons
  • Edible vegetable oil imports YTD fell 28% y/y to 6.461m tons
• Meat (including offal) imports in Nov. 581,000 tons
  • Meat (including offal) imports YTD fell 11.2% y/y to 6.055m tons
• Fertilizer exports in Nov. 3.373m tons
  • Fertilizer exports YTD rose 0.4% y/y to 29.274m tons

 

China’s Nov. Soybean Imports Fall to Lowest Since 2018

China’s soybean imports in November fell to their lowest monthly level since 2018, when China had imposed hefty tariffs on US shipments.

• Soybean shipments to the world’s top importer came in at 7.15 million tons in November, customs data showed, as crushers were cautious with purchases during US export season over trade war worries
• Slowing purchases over trade policy uncertainty underline deep worries in China’s crushing sector, which is already scarred by trade tensions during Donald Trump’s first term

 

China Makes Small Cut to Corn Production Forecast for 2024/25

China has lowered its forecast for corn output this season, after extreme weather disrupted production in the northeast of the country, the major growing region.

• Corn production in the 2024/25 year through September will be 293.84 million tons, about 1% lower from a prediction in November, according to monthly China Agricultural Supply and Demand Estimates released on Tuesday
• Higher-than-normal rainfall during harvest in parts of the northeast, and unusually warm temperatures in early November, have made it more difficult to store corn, the agriculture ministry said in the report
• China’s 2024/25 soybean output was forecast at 20.65 million tons, up slightly from last month’s estimate of 20.54 million tons
• A forecast for Chinese imports of edible oils in 2024/25 was revised down to 7.73 million tons from 8.43 million tons, due to higher international palm oil prices

 

Brazil 2024/25 Soy Planting at 95% as of Dec. 5: Agrural

Compares with 91% a week earlier and 91% a year before, according to an emailed report from consulting firm AgRural.

• With sowing almost complete and expectations of good productivity across the country, last week’s highlight was the rains that reached drier areas of Parana, Mato Grosso do Sul and Rio Grande do Sul, according to AgRural
• Summer corn planting reached 95% of the estimated area for the Center-South of Brazil, compared to 94% in the previous week and 95% from a year ago

 

Brazil’s C-S Winter Corn Crop Sales 77.7% Completed: Safras

Sales of the winter corn crop in Brazil’s Center-South region compares with 71.2% a year earlier and a five-year average of 74.9%, according to a report from Safras & Mercado consulting firm.

 

Sales of the 2024 second corn crop reach 77.7% in the Center-South of Brazil, says Safras

Sales of the 2024 second corn crop in the Center-South of Brazil reached 77.7% of the expected production of 85.891 million tons, according to a survey by Safras & Mercado. In December of last year, the volume traded for the 2023 second corn crop was a little slower, reaching 71.2% of the harvested production of 99.098 million tons of corn. The average sales for the period over the last five years is 74.9%.

The commercialization of second-crop corn reaches 68.2% in Paraná, 86.3% in São Paulo, 76% in Mato Grosso do Sul, 72.5% in Goiás/Federal District, 64.3% in Minas Gerais and 82.7% in Mato Grosso.

In Matopiba, the commercialization of the second crop reached 81.4% of the expected production of 7.049 million tons. In December of last year, the volume traded for the 2023 second crop was slower, reaching 76.2% of the harvested production of 7.571 million tons of corn.

Sales reach 69.9% in Bahia, 84.8% in Maranhão, 76.5% in Piauí and 85.1% in Tocantins.

 

Malaysia Nov. Palm Oil Stockpiles Fall to 1.836m Tons: MPOB

Malaysia’s palm oil stockpiles fell to 1.836m tons in November from revised 1.885m tons in October, according to Malaysian Palm Oil Board.

• Palm oil production was 1.621m tons
• Palm oil exports fell to 1.487m tons from revised 1.744m tons in October

 

Russia Grain Union Notified of New Egypt Grain Purchasing System

Russia’s union of grain exporters and producers has been informed of changes in Egypt’s procurement system for wheat and other agricultural goods, according to Eduard Zernin, the chairman of union’s board.

• The information comes as a new agency has assumed the role of importing wheat in Egypt
• Zernin confirmed that Russia’s agriculture ministry received a letter from Egypt stating that Mostakbal Misr is the only state agency with authority to organize international tenders and direct purchases of wheat and other foods
• Interfax had reported the news earlier
• “Now we can definitely talk about the end of the era of GASC, until recently the largest importer of wheat and other basic agricultural products, one of the main market makers of the global grain market,” he said
• Russian exporters are willing to share their experience with the new agency: Zernin
• READ: Dec. 6, Egypt’s Mostakbal Misr Assumes Task of Importing Wheat
• NOTE: Russia is a major supplier of wheat to Egypt
• NOTE: The USDA forecasts Egypt will import about 12.5 million tons in the 2024-25 season, and about half is typically booked by the government

 

Drought causes $80bn in soybean losses over a decade

Over the past decade, drought has inflicted $80 billion in soybean crop losses across the five states leading oilseed production in Brazil. Researcher José Renato Farias, from Embrapa Soja, who oversees the Agricultural Zoning for Climate Risk (ZARC), analyzed crop performance from the 2014/15 to 2023/24 harvests in Mato Grosso, Mato Grosso do Sul, Goiás, Rio Grande do Sul, and Paraná, which collectively account for 75% of the nation’s soybean output.

“It’s a significant financial hit directly impacting soybean producers,” Mr. Farias told Valor. “But the broader economic consequences are even greater since the soybean supply chain underpins the costs of other agricultural activities like poultry, pork, and egg production.”

Mr. Farias calculated the losses using an average price of $500 per tonne of soybeans. His analysis of the past ten harvests employed five-year moving averages of production—factoring in two years before and after each harvest—and projected losses for the 2023/24 planting area, which spans 45.8 million hectares across the five states.

According to his findings, drought led to a shortfall of approximately 160 million tonnes of soybeans— equivalent to more than one entire Brazilian soybean harvest. To put this in perspective, Brazil’s total soybean output in the 2023/24 harvest was 147.3 million tonnes.

Among the states most affected by drought, Rio Grande do Sul stands out, having lost nearly one out of every four harvests, while Paraná experienced losses of about one in every six.

Mr. Farias explained that drought impacts soybean development by depleting soil moisture and fostering diseases that degrade soil fertility. In periods of elevated temperatures, the combination of scant rainfall and intense solar radiation exacerbates crop damage.

He further emphasized that 95% of Brazil’s soybean cultivation relies on rainfed agriculture, with no irrigation systems in place. “Adequate rainfall must align with the plant’s requirements and be evenly distributed throughout its growth cycle, particularly during the reproductive phase,” Mr. Farias said.

The lack of rainfall and its uneven distribution were particularly detrimental to the 2021/2022 harvest of Paraná farmer Marcelo Teles. Mr. Teles, who cultivates 96.8 hectares of soybeans, highlighted that his region’s warm climate has made the past four harvests particularly challenging. “We’ve suffered the most in these last cycles,” he shared.

“The rainfall here used to be excellent, but in recent years, it has changed dramatically, leading to significant productivity losses,” says soybean producer Mr. Teles from Palotina, in western Paraná. Reflecting on the 2021/22 season, Mr. Teles calls it “the worst harvest of my life.” With rainfall far below average and scorching heat, the cycle was nothing short of “chaos.” Farmers in the region, who anticipated an average yield of 66.1 bags per hectare, managed only 2.6 bags per hectare—a devastating blow. Adding to the strain, Mr. Teles is still waiting for compensation from his rural insurance claim, which remains tied up in legal appeals.

To avoid falling into debt, he redirected income from other agricultural activities on his property, such as fish and poultry farming, to offset the losses incurred by the soybean crop. “We have financial commitments to meet and investments that had to be postponed,” he explains.

The drought’s impact extends beyond individual producers. Edmilson Zabott, president of the Palotina Rural Union, highlights the broader financial strain. “Our producers are severely de-capitalized, which has reduced investments in crops like soybeans,” Mr. Zabott told Valor. He emphasized the urgency of creating programs to renegotiate debts and extend payment deadlines to help producers recover.

 

 

 

 

 

 

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