Global Ag News for Feb 6.24

TOP HEADLINES

Brazil Soy Output, Exports Seen Lower Due to Dryness: Abiove

Brazil soybean production in 2024 seen at 156.1m tons, down 2.6% from previous estimate in December, industry group Abiove said by email.

• Dry weather led to lower yields and production, although farmers planted a bigger area, the group said
• The group cuts its estimate for the nation’s soybean exports by 1.2% to 98.1m t
  • Brazil exports in 2023 expect to reach 101.86m t
• Domestic crush estimate kept at 54.5m t, compares with 53.7m t in 2023
• Forecast for soybean ending stocks in 2024 cut 39% from previous estimate to 5.7m t
• Soymeal export forecast reduced 0.5% to 21.6m t for this year
• Soyoil export estimate kept at 1.45m for this year
• Soyoil domestic consumption estimate raised 1.1%, to 9.55m t, due to higher biodiesel mix in diesel

FUTURES & WEATHER

Wheat prices overnight are up 1/2 in SRW, down 1/4 in HRW, up 1 in HRS; Corn is up 1; Soybeans up 1/2; Soymeal down $2.70; Soyoil up 0.56.

For the week so far wheat prices are down 9 in SRW, down 11 1/4 in HRW, down 7 3/4 in HRS; Corn is up 1; Soybeans up 8 1/4; Soymeal up $1.60; Soyoil up 1.16.

For the month to date wheat prices are down 4 1/2 in SRW, down 8 1/4 in HRW, down 1/4 in HRS; Corn is down 4 1/2; Soybeans down 25 1/2; Soymeal down $9.90; Soyoil down 0.13.

Year-To-Date nearby futures are down 5.9% in SRW, down 4.4% in HRW, down 4.4% in HRS; Corn is down 5.8%; Soybeans down 7.5%; Soymeal down 7.2%; Soyoil down 4.1%.

Chinese Ag futures (MAY 24) Soybeans up 32 yuan; Soymeal down 6; Soyoil down 2; Palm oil up 56; Corn up 14 — Malaysian Palm is up 39.  Malaysian palm oil prices overnight were up 39 ringgit (+1.03%) at 3841.

There were changes in registrations (-20 SRW Wheat). Registration total: 772 SRW Wheat contracts; 0 Oats; 6 Corn; 495 Soybeans; 125 Soyoil; 1 Soymeal; 104 HRW Wheat.

Preliminary changes in futures Open Interest as of February 5 were: SRW Wheat up 7,187 contracts, HRW Wheat up 985, Corn up 3,497, Soybeans up 13,330, Soymeal up 16,194, Soyoil up 3,882.

Brazil: Scattered showers fell across much of the central states and southern states saw some isolated showers as well. Scattered showers should continue across the central all week. Southern areas may have to wait until this weekend for more widespread showers to move in, but they could be significant when they do. Rain showers are expected to be of normal intensity across the central, allowing for a normal pace of field work in most areas. A dry spell last week allowed for good progress of both harvest and planting last week.

Argentina: Surprisingly decent showers went through western areas over the weekend, but most areas of the country remained dry with temperatures up around or over 100F again. Some isolated showers may occur over southern areas early this week with a front getting into the region by Wednesday. That front should finally bring good showers to much of the country later this week and weekend while temperatures will fall back to normal as well. The potentially good rainfall is needed to turn around crop conditions after more than two weeks of dry conditions and a week of 100-degree heat.

Europe: It was again dry and warm across southern growing areas while soil moisture falls for vegetative wheat in Spain and Italy. A storm system will move through southern areas later this week with more impulses through the weekend which will be helpful for reversing the dryness trend. Temperatures will continue to be warm with no threat of an arctic freeze.

Australia: The remnants of Tropical Cyclone Kirrily moved through the outback this weekend and will bring showers through New South Wales on Monday, being favorable for dry areas that continue to have deficits. Drier weather elsewhere in the country is unfavorable for cotton and sorghum that are mostly filling.

Northern Plains: Scattered showers moved through over the weekend. Another storm system will move through Wednesday and Thursday with a mix of rain and snow, but the snow that falls could be hefty across the north. Recent and forecast precipitation will help to ease some of the recent dryness in the region.

Central/Southern Plains: A system moved through with areas of heavy precipitation over the weekend. Significant snow fell in the far northwest near the mountains. A system will move through on Wednesday and Thursday with scattered showers and another will move through southern areas this weekend that could have a mix of heavy rain and snow. Long-term deficits remain in some areas but continue to have an active pattern that is helping to gradually erase them.

Midwest: The region largely missed a storm system this weekend, but southwestern Missouri did get in on a band of moderate to heavy rain. It continues to be very warm and snow continues to melt, boosting soil moisture in a lot of areas. A system will go through Thursday with scattered showers and another will move across southern areas Sunday and Monday. The latter storm could bring a mix of heavy rain and snow to some areas. Temperatures behind that system will decrease, but still stay seasonable.

Delta: A system brought more heavy rain through the region this weekend. Soil moisture is much improved and drought continues to decrease in the region. Water levels along the Mississippi River and local rivers are also much higher, increasing transportation. Scattered showers will move through late week with another storm that could bring heavy precipitation on Sunday.

The player sheet for Feb. 5 had funds: net sellers of 4,000 contracts of SRW wheat, buyers of 500 corn, sellers of 2,500 soybeans, buyers of 2,000 soymeal, and buyers of 1,500 soyoil.

TENDERS

• CORN SALE: The U.S. Department of Agriculture confirmed private sales of 155,000 metric tons of U.S. corn to Mexico for shipment in the 2023/24 marketing year.
• SOYMEAL, BARLEY TENDERS: Iranian state-owned animal feed importer SLAL has issued international tenders to purchase at least 120,000 metric tons of animal feed barley and 120,000 tons of soymeal.

PENDING TENDERS

• WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is looking to buy a total of 136,321 metric tons of food-quality wheat from the United States, Canada, and Australia in a regular tender that will close on Thursday
• WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy up to 120,000 metric tons of milling wheat, which can be sourced from optional origins

TODAY

US Inspected 624k Tons of Corn for Export, 1.426m of Soybeans

In week ending Feb. 1, according to the USDA’s weekly inspections report.

• Soybeans: 1,426k tons vs 913k the previous wk, 1,915k a yr ago
• Corn: 624k tons vs 926k the previous wk, 494k a yr ago
• Wheat: 266k tons vs 284k the previous wk, 591k a yr ago

US Corn, Soybean, Wheat Inspections by Country: Feb. 1

Following is a summary of USDA inspections for week ending Feb. 1 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 957k tons of the 1.43m total inspected
• Mexico was the top destination for corn inspections, Indonesia led in wheat

Texas Winter Wheat Crop Upgraded to 46% Good/Excellent: USDA

The USDA posts Texas winter wheat conditions data on its website for week ending Feb. 4,

• Crop conditions rose by 4 percentage points from the previous week
• Crops rated poor or very poor declined to 20% from 26%
• Texas is the second-biggest producer of winter wheat in the US measured by area planted
• More states are scheduled to release data at the end of the month

Brazil 2023/24 Soy Harvest 16% Done as of Feb. 1: AgRural

Compares with 11% a week before and 9% a year earlier, consulting firm AgRural says in emailed report.

• Combination of hot weather and little rain in later areas, especially in Brazil’s South region, raised alarm for producers in Rio Grande do Sul, Santa Catarina and parts of Parana and Mato Grosso do Sul states
  • If these conditions persist, they could result in productivity losses
• Winter corn planting is 27% done in Brazil’s Center-South, compared with 11% a week before and also 11% a year earlier
  • Led by Mato Grosso, Parana and Sao Paulo states, pace is the fastest since 2013
• Summer corn harvest is 17% complete as of Feb. 1, compared with 12% a week earlier and 10% a year before

Brazil’s 2023/24 Soy Crop Sales Estimated At 31.9% Of Projected Production, Up From 29.1% In The Previous Month’s Report – Safras & Mercado

BRAZIL’S 2023/24 SOY CROP SALES ESTIMATED AT 31.9% OF PROJECTED PRODUCTION, UP FROM 29.1% IN THE PREVIOUS MONTH’S REPORT – SAFRAS & MERCADO

Brazil Soy Oil Consumption to Increase for Biodiesel: StoneX

Brazil is expected to see a 27.5% jump in the consumption of soy oil in 2024 from last year to produce biodiesel, StoneX says in a report.

• Consumption expected to be 7.4 million tons compared to 5.8 million tons in 2023
• Previous estimate was 7.3 million tons
  • Higher share of biodiesel blended with diesel to reach 14% starting in March, compared to 12% currently, likely to boost demand
• Brazil will crush 36.8 million tons of soybeans for biodiesel in 2024, up 27.8% from last year
• Biodiesel consumption estimates remain at 8.8 million cubic meters, 13.3% of total diesel consumption

WHEAT/CEPEA: Liquidity is low in BR; exports are moving at a good pace

Wheat trades continue to move at a slow pace in the domestic market, since players from wheat mills are unwilling to close deals, while producers are focused on soybean and corn crops. Despite that, shipments are moving at a good pace.

According to data from Secex, up to the fourth week of January, Brazil shipped 812.18 thousand tons of wheat, against 561.52 thousand tons in January last year. Imports totaled 520.64 thousand tons, higher than the 439.98 thousand tons in the first month of 2023.

According to data from Cepea, between January 26 and February 2, the prices paid to wheat farmers (over-the-counter market) were stable in Santa Catarina, but rose 0.27% in Paraná and 1.95% in Rio Grande do Sul. In the wholesale market (deals between processors), values moved up 0.51% in Paraná and 0.78% in Rio Grande do Sul. On the other hand, prices dropped 0.62% in Santa Catarina and 0.88% in São Paulo. In the same period, dollar quotes moved up 1.1% against Real, closing at BRL 4.967 on Feb. 2.

Based on data from Conab (Brazil’s National Company for Food Supply), between January 22 and 26, the import parity price for the wheat from Argentina delivered to Paraná state was at USD 250.69/ton. Considering the average of the US dollar in that period, at BRL 4.9345, the wheat imported was sold at BRL 1,237.02/ton, while for the Brazilian wheat traded in Paraná, the average was at BRL 1,243.78/ton, according to data from Cepea. In Rio Grande do Sul, the price of the product from Argentina closed at USD 234.42/ton, which accounts for BRL 1,156.74/ton – against BRL 1,199.61/ton on the average of the state calculated by Cepea.

 

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