TOP HEADLINES
US generated more renewable credits in December, EPA says
The United States generated more renewable blending credits in December versus the prior month, data from the Environmental Protection Agency showed on Wednesday.
About 1.30 billion ethanol (D6) blending credits were generated in December, compared with about 1.19 billion in November, the data showed.
Credits generated from biodiesel (D4) blending rose to about 899 million in December from 732 million the month prior, the data showed.
The credits are used by oil refiners and importers to show compliance with EPA-mandated renewable blending quotas for petroleum-based fuels. They are generated with every gallon of biofuel produced.
FUTURES & WEATHER
Wheat prices overnight are down 5 3/4 in SRW, down 7 1/4 in HRW, down 4 1/4 in HRS; Corn is down 3 1/4; Soybeans down 13 1/2; Soymeal down $4.90; Soyoil down 0.39.
For the week so far wheat prices are up 10 1/2 in SRW, down 1 1/2 in HRW, down 1 in HRS; Corn is up 5; Soybeans up 4; Soymeal down $1.30; Soyoil up 0.30.
For the month to date wheat prices are down 10 1/4 in SRW, down 9 in HRW, down 12 1/2 in HRS; Corn is up 17; Soybeans up 18 3/4; Soymeal down $19.80; Soyoil up 5.52.
Chinese Ag futures (MAY 25) Soybeans up 21 yuan; Soymeal up 7; Soyoil down 68; Palm oil down 174; Corn up 10 — Malaysian Palm is down 69.
Malaysian palm oil prices overnight were down 69 ringgit (-1.58%) at 4298.
There were changes in registrations (-3 Corn, -4 Soymeal). Registration total: 20 SRW Wheat contracts; 72 Oats; 3 Corn; 262 Soybeans; 1,116 Soyoil; 1,462 Soymeal; 105 HRW Wheat.
Preliminary changes in futures Open Interest as of January 15 were: SRW Wheat down 2,688 contracts, HRW Wheat up 695, Corn up 11,187, Soybeans up 10,992, Soymeal up 2,613, Soyoil down 2,171.
Brazil: Widespread wet season showers continue in central and northern Brazil, favorable for filling soybeans, but hampering the very early harvest. The main harvest period does not start for another week, so the rain is overall favorable, but becoming less so. If rainfall continues to be heavy for the end of January and into February, it may have more of an impact on harvesting soybeans and planting safrinha corn. Showers across the south have been much less frequent, which has been a problem for filling soybeans in Mato Grosso do Sul and Parana and pollinating to filling corn in Rio Grande do Sul. A front moving through this weekend is looking to bring more widespread precipitation, but could be followed by another period of dryness.
Argentina: Soil moisture is falling in many areas of Argentina with very little showers and temperatures well above normal in the 90s and 100s, leading to declining crop conditions. We should see a burst of showers moving through later in the week and weekend, but any heavy amounts may be limited. Models disagree on the amount of precipitation that is expected to fall, but dry conditions are expected to follow well into next week, especially across critical central production areas.
Northern Plains: A front moves through on Friday, bringing scattered light snow and a burst of very cold air for a few days. While some moderation will be possible for the second half of next week, more cold air is likely to flow in next weekend.
Central/Southern Plains: A front and system will move through Friday and Saturday, bringing limited showers, but also another burst of very cold air. Exposed wheat areas may see some winter kill from this burst of cold that should last well into next week. A system may form early next week in the cold air, bringing potential widespread wintry prospects across the south.
Midwest: Temperatures will rise the next few days, especially in the northwest. But a system moving through this weekend should bring through a burst of showers as a mix of rain and snow and will be followed by a burst of extremely cold air through most of next week. The cold will keep lake-effect snow going for several days as well.
Lower Mississippi: Water levels remain above the low-water mark in most of the Mississippi and Ohio River systems, making for mostly easy transportation. Northern areas of the Mississippi Basin are getting drier though, and could use some precipitation to keep water levels up. A system moving through this weekend could help that somewhat, though the forecast is drier for most of the region through next week.
Europe: Drier conditions continue in Europe, with only limited showers moving through the northeast and west at various points over the next couple of weeks. The drier conditions would be more favored across the northwest, but more rain is needed in Spain as well as some other dry areas in the southeast. There are no risks of significant cold for the next couple of weeks.
Black Sea: Wheat went dormant in good condition in the west, but poor condition in the east, particularly in southwestern Russia. Scattered showers have been more prevalent since crops went dormant, but not enough to provide adequate snow cover or boost soil moisture in a significant way just yet. Systems will continue to provide periodic, but mostly light showers through the end of January. Amounts do not look heavy though, and a lot of rain and snow are needed before wheat breaks dormancy this spring. There are no risks of significant cold for the next couple of weeks that would be a large concern for winter kill on exposed wheat.
Australia: Scattered showers have been going through eastern areas recently, offering some help for developing cotton and sorghum. Dry areas in the west and south are not getting as lucky with only limited showers and declining soil moisture in these areas.
The player sheet for Jan. 15 had funds: buyers of 9,000 corn, sellers of 500 soybeans, buyers of 1,000 soymeal, and sellers of 1,000 soyoil.
TENDERS
- CORN SALE: Taiwan’s MFIG purchasing group bought about 65,000 metric tons of animal feed corn expected to be sourced from the United States in an international tender on Wednesday
- WHEAT PURCHASE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 132,888 metric tons of food-quality wheat from the U.S., Canada and Australia in a regular tender that closed on Thursday.
- WHEAT TENDER: Jordan’s state grain buyer has issued an international tender to buy up to 120,000 metric tons of milling wheat which can be sourced from optional origins.
- FAILED BARLEY TENDER: 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
- BARLEY TENDER: Jordan’s state grains buyer has issued an international tender to purchase up to 120,000 metric tons of animal feed barley. A new announcement had been expected by traders after Jordan made no purchased in its previous tender for 120,000 tons of barley on Wednesday.
- RICE TENDERS: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 metric tons of rice, with price offers that were due by Jan. 1, traders said. It also issued another tender for 50,000 metric tons of rice, with price offers that were due by Jan. 9.
TODAY
GRAIN EXPORT SURVEY: Corn, Soy, Wheat Sales Before USDA Report
Estimate ranges are based on a Bloomberg survey of three analysts; the USDA is scheduled to release its export sales report on Thursday for week ending Jan. 9.
- Corn est. range 500k – 1,000k tons, with avg of 800k
- Soybean est. range 300k – 900k tons, with avg of 575k
DOE: US Ethanol Stocks Rise 3.6% to 25.008M Bbl
According to the US Department of Energy’s weekly petroleum report.
- Analysts were expecting 24.656 mln bbl
- Plant production at 1.095m b/d, compared to survey avg of 1.095m
NOPA December US soy crush soars to record 206.604 million bushels
The monthly U.S. soybean crush jumped to the highest on record in December as several new processing plants have come online in recent months, according to National Oilseed Processors Association (NOPA) data released on Wednesday.
NOPA members, which account for at least 95% of U.S.-processed soybeans, crushed 206.604 million bushels of the oilseed last month, up 6.9% from the 193.185 million bushels crushed in November and up 5.8% from the December 2023 crush of 195.328 million bushels.
Last month’s crush was above the average estimate of 205.498 million bushels in a Reuters poll of eight analysts. Estimates ranged from 202.000 million to 209.500 million bushels, with a median of 205.500 million bushels.
The December crush also eclipsed the previous record monthly crush of 199.943 million bushels in October. Data from two recently opened processing plants in Kansas and North Dakota was included in Wednesday’s report, according to NOPA.
U.S. soy processing capacity has swelled over recent years as crushers built new plants and expanded existing ones to supply biofuels makers with vegetable oil feedstock.
NOPA members crushed 2.215 billion bushels in 2024, up 4.4% from the prior year.
Soyoil stocks among NOPA members as of Dec. 31 rose to 1.236 billion pounds, up 14.0% from 1.084 billion pounds at the end of November and the largest since July.
Analysts, on average, had expected stocks to rise to 1.253 billion pounds, according to estimates from five analysts.
Soyoil stocks estimates ranged from 1.178 billion to 1.298 billion lbs, with a median of 1.250 billion lbs.
Argentina Soy Crop Potential Curbed Because of Drought: Rosario
A drought in Argentina means soybean plants won’t reach their production potential, the Rosario Board of Trade said in a monthly report.
- Analysts refrained from updating their soy forecast of 53m to 53.5m metric tons, but said the harvest would no doubt come in lower
- Hot and dry conditions “have been so severe in the last 30 days that we rule out a normal scenario of average yields that would produce a 53m/53.5m-ton crop”
- Rosario cut its corn forecast on the drought
- Corn harvest is expected to be 48m tons, down from 50m to 51m last month
India’s palm oil imports to hit 5-year low in Jan on negative margins, sources say
India’s palm oil imports are set to plunge to a near five-year low in January, hit by negative refining margins as the tropical oil’s premium over rivals drives buyers to more competitively priced soyoil, government and industry officials told Reuters.
Lower palm oil imports by the world’s biggest buyer of vegetable oils could weigh on benchmark Malaysian palm oil prices, but support U.S. soyoil futures.
“About 110,000 metric tons of palm oil was cleared in the first half of January, which is a pretty small amount compared to the usual monthly imports,” said a government official, who sought anonymity as he was not allowed to speak to media.
The thin lineup of vessels carrying palm oil at key ports such as Kandla, Haldia, and Krishnapatnam over the next two weeks suggests imports could drop to about 370,000 metric tons in January, said a leading Indian palm oil buyer.
India imported an average of more than 750,000 tons of palm oil every month in the marketing year that ended in Oct. 2024, says trade body the Solvent Extractors’ Association of India, which is set to publish its January import data by mid-February.
India imported 782,983 tons of palm oil in January 2024.
“Everyone in the industry has been cutting down palm oil purchases due to negative refining margins,” the Indian buyer said.
Two vegetable oil brokers and a shipping company that compiles data on vessels lined up to unload at ports estimated that imports could range between 340,000 tons and 370,000 tons.
In the second half of January, more palm oil is expected to be unloaded at west coast ports than in the first half, but total monthly imports are still unlikely to exceed 370,000 tons, said an official with a Mumbai-based shipping company.
This would be the lowest since March 2020, when New Delhi’s unofficial curbs on imports from Malaysia reduced shipments.
Refiners are incurring losses of more than $30 a ton in palm oil refining for January shipments, and the oil is available at even lower prices for February and March shipments, said Rajesh Patel, managing partner at GGN Research, an edible oil trader.
Crude palm oil (CPO) is now being offered in India at about $1,155 a ton, including cost, insurance and freight (CIF) for January delivery, while February and March shipments were offered at $1,140 and $1,100, dealers said.
Soyoil, which traditionally commands a premium over palm oil, is now offered at a discount to palm, said Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil brokerage.
“Buyers are moving to soyoil from palm oil,” Bajoria added. “This trend is likely to continue unless palm oil corrects and becomes available at a discount.”
India buys palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine.
Russia’s Jan. Wheat Exports to Drop to 1.8m-2.2m Tons: SovEcon
Russia’s January wheat exports are expected to fall to 1.8m-2.2m tons from 3.6m tons a year earlier amid lower inventories, according to SovEcon.
- Shipments in the first two weeks of the month totaled 0.9m tons, compared with 1.4m tons a year earlier
- It expects exports for the 2024-25 season to reach 43.7m tons, lower than the USDA’s estimate of 46m tons
- “Given the already exported volumes and the quotas, the current estimates by the US Department of Agriculture appear unrealistic,” it said, adding that low inventories will limit exports and support prices later in the season
- SovEcon forecasts Russian wheat stockpiles at the end of the season to be at 10m tons vs 20.2m tons a year earlier
- That includes 6.3m ton of market inventories and 3.7m tons kept in the state intervention fund
- Stockpiles were at 18.7m tons as of Dec. 1 vs 24.8m tons a year earlier: SovEcon
UKRAINE EXPORTS
- SovEcon sees Ukraine’s January wheat exports reaching 0.8m tons vs 1.6m tons a year earlier
Malaysia’s Crude Palm Oil Export Tax Will Be at 10% in February
The gazetted price for crude palm oil has been set at 4,817.70 ringgit a ton, which incurs the maximum export tax of 10%, according to a circular from the customs department posted on the Malaysian Palm Oil Board’s website.
- NOTE: Export duty structure starts at 3% when FOB prices for CPO are in the 2,250-2,400 ringgit per ton range
- Maximum tax rate is 10% when prices are above 4,050 ringgit per ton
Biden Issues Rule to Boost Biofuel Prospects for US Farmers
- Guidelines help gauge emissions tied to climate-smart farming
- Rules aim to make growers compete better in biofuels market
The Biden administration unveiled a rule aimed at giving farmers more opportunities to profit from rapidly developing markets like green jet fuel and renewable diesel.
The move announced Wednesday sets a framework for quantifying, verifying and reporting greenhouse gases linked with “climate smart” farming methods to grow crops for making biofuels. Agriculture Secretary Tom Vilsack said the rule gives growers of corn, soybeans and sorghum the potential for at least $1 more per bushel on such practices.
The last-minute push before President-elect Donald Trump takes power next week is part of Vilsack’s goal of reversing a four-decade trend of shrinking farms and cropland as policies benefiting the big producers crowd out smaller growers. The US has lost almost 545,000 farms and about 155 million acres of cropland since the 1980s, according to Vilsack.
There is “better opportunity” to move toward “a system that has high productivity and is also profitable, sustainable, healthy and resilient for all Americans, not just those who have the largest and most successful farms,” Vilsack, a former Democratic governor of Iowa, told reporters.
The US Department of Agriculture’s voluntary guidelines are meant to help slash greenhouse-gas emissions from farming and better enable growers to compete with counterparts in emerging agriculture powerhouses like Brazil in selling more climate friendly crops into low-emitting fuel markets like California.
The move follows the Treasury Department’s incomplete guidance released last week for a new clean fuel production tax credit, known as 45Z, under the Inflation Reduction Act, the signature climate change law of President Joe Biden and fellow Democrats.
Vilsack said he’s optimistic that the incoming Trump administration will retain the USDA rule. Representatives from Trump’s transition team didn’t immediately respond to a Bloomberg request for comment.
Treasury and clean transportation fuel programs should consider the USDA’s guidelines in proposing rules that recognize the carbon intensity benefits of climate-smart agriculture, which could be substantial, Vilsack said.
Fuels made with the least carbon intensive ingredients, or feedstocks, are the most highly valued in such systems that use government incentives to curb tailpipe emissions as part of the fight against catastrophic global warming.
As part of Wednesday’s announcement, the USDA is making its calculator for measuring carbon intensity, or CI, available for public study and peer review before it is fully developed. The tool will give farmers a better idea of how much they can reduce their CI scores by using climate-friendly and USDA-sanctioned practices — including methods such as reduced tilling or no till, cover cropping to restore soil health and the use of nitrification inhibitors.
Vilsack said preliminary CI calculations show that farmers under the USDA rule have the potential to get carbon intensity scores per bushel significantly lower, including down about 70% for corn grown in a part of Illinois and about 90% for sorghum in an area of Kansas.
The new guidance allows farmers to use climate-smart practices individually or in combination, unlike prior rules around the now expired “40B” tax credit for production of sustainable aviation fuel, which involved bundling specific practices. Such bundling proved impractical in certain regions.
The new guidelines also add sorghum to the list of crops, rather than only corn and soybeans as part of a test program last year. Sorghum is one of the world’s top five cereal crops and the US is the world’s largest producer of grain sorghum.
Argentine Farm Company Los Grobo Says It Defaults on Bank Debt
Los Grobo Agropecuaria, a unit of Grupo Los Grobo, is defaulting on capital and interest payments to banks after unsuccessful talks to refinance, it says in a regulatory filing.
- Missed payments include approximately $8.6m on Jan. 13 and another of about $4.1m
- It will also miss two peso payments on Jan. 15, including one for 4.76b ($4m)
- NOTE: Los Grobo and the group’s farm inputs unit, Agrofina, are both in financial stress after recently defaulting on debt known in Argentina as pagares bursatiles
Milei Government Accused of Skewing Auction to Upgrade Soy River
- Potential bidders want Parana River tender to be suspended
- Current dredger denies that it is favored by requirements
A long-awaited tender to upgrade a major waterway that ships crops worth tens of billions of dollars a year to global markets is coming under fierce criticism, including from two suitors that accuse Argentina’s government of favoring the current contractor.
President Javier Milei’s administration started a tender process in November for a 30-year contract to keep bulk carriers sailing up and down the Parana River. Dredging companies have been waiting to bid on a new contract after the last one expired in 2021. They have until Feb. 12 to apply.
DEME of Belgium Rohde Nielsen A/S from Denmark allege that the terms of the auction suit rival Jan de Nul NV to such an extent that it’s almost impossible for anyone else to compete. The bidding process is also being criticized by Argentine congressmen and shipping and port authorities.
Soy is loaded onto a ship along the Parana River at a processing facility in Rosario, Argentina, on March 26, 2024.
Milei’s office didn’t immediately respond to a request for comment, nor did a spokesman for the National Agency of Ports and Waterways.
Jan de Nul, also based in Belgium, declined to comment on the allegations through an outsourced PR representative, saying only that it is preparing a competitive bid and highlighting the work it has done since the 1990s dredging the Parana River to spur Argentine exports.
The international tender for a new 30-year license includes a key provision to deepen the Parana’s navigation channel by 3 feet (0.9 meters). While that extra depth would allow Argentina to send bigger cargoes of soy and corn from its export hub around the riverside city of Rosario, export and maritime groups want it dug even deeper in order to fully load Panamax ships with soy meal and allow passage of larger vessels.
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