Global Ag News for July 13.23

TOP HEADLINES

European Grain Harvest Outlook Cut on Mixed Rainfall: Strategie

This year’s European grain harvest is now seen at 268m tons, 5.2m tons below the prior estimate, analysis firm Strategie Grains said in a report.

• NOTE: That follows a 5.4m-ton cut in June
• With wheat and barley harvests underway, initial yields in southeast Europe are “disappointing” after excess spring moisture
• Spring-barley crops suffered from overly dry conditions in the north
• Corn-growing conditions are also “precarious,” with crops in need of significant rain in July
• EU should still have ample wheat supply, partly because of lower exports, but stockpiles could fall below the prior season if production estimates decline further

FUTURES & WEATHER

Wheat prices overnight are up 1/2 in SRW, up 1 3/4 in HRW, up 5 1/4 in HRS; Corn is up 1 1/4; Soybeans up 17 1/4; Soymeal up $3.70; Soyoil up 0.86.

For the week so far wheat prices are down 21 1/4 in SRW, down 20 1/4 in HRW, up 4 3/4 in HRS; Corn is down 10 3/4; Soybeans up 23; Soymeal up $6.90; Soyoil up 1.36.

For the month to date wheat prices are down 17 3/4 in SRW, up 4 3/4 in HRW, up 41 3/4 in HRS; Corn is down 9 3/4; Soybeans up 1 3/4; Soymeal down $3.20; Soyoil up 1.25.

Year-To-Date nearby futures are down 22.4% in SRW, down 9.4% in HRW, down 10.6% in HRS; Corn is down 18.2%; Soybeans down 1.4%; Soymeal down 11.9%; Soyoil up 7.6%.

Chinese Ag futures (SEP 23) Soybeans down 26 yuan; Soymeal down 8; Soyoil down 72; Palm oil down 58; Corn down 1 — Malaysian palm oil prices overnight were down 61 ringgit (-1.55%) at 3865.

There were changes in registrations (-57 SRW Wheat, -22 Corn). Registration total: 1,398 SRW Wheat contracts; 448 Oats; 22 Corn; 0 Soybeans; 224 Soyoil; 0 Soymeal; 147 HRW Wheat.

Preliminary changes in futures Open Interest as of July 12 were: SRW Wheat up 1,941 contracts, HRW Wheat up 5,156, Corn up 22,186, Soybeans up 12,555, Soymeal up 2,230, Soyoil down 480.

Northern Plains: Fronts will continue to move across these areas into this weekend and this will bring more scattered precipitation, but not all areas will likely see rain. Near- to below-normal temperatures are expected to reduce stress on developing crops.

Central/Southern Plains: Eastern Nebraska received scattered rain last night from a thunderstorm complex. Additional rainfall looks likely across the Central Plains into this weekend, which will help some drought-stricken areas. Less rainfall is expected across Texas and combined with the heat that is expected through the end of the week, some areas could see soil moisture deplete. Near- to below-normal temperatures are expected across the Central Plains over the next five days. Conditions are mostly favorable for much of the region despite the continued drought, though rain may disrupt those finishing wheat harvest.

Midwest: Additional fronts will drop out of Canada into this weekend with the potential for more showers while temperatures stay mild. Rain is coming at enough of a frequency to maintain or boost soil moisture in some areas, though there are plenty that are also seeing disappointment and low soil moisture, creating mixed conditions for developing corn and soybeans.

Delta: Systems will develop along frontal boundaries throughout the rest of this week and into the weekend, offering daily chances for showers and thunderstorms. Some pockets of heavy rain are possible across Illinois and Missouri over the next five days. The widespread rainfall will continue to benefit crop growth, but areas that receive heavy rain may need to watch for flooding.

The player sheet for 7/12 had funds: net sellers of 9,000 contracts of SRW wheat, sellers of 10,500 corn, sellers of 10,000 soybeans, sellers of 4,000 soymeal, and  sellers of 1,000 soyoil.

TENDERS

• SOYMEAL SALE: The U.S. Department of Agriculture confirmed private sales of 105,000 metric tons of soybean cake and meal for shipment to unknown destinations in the 2023/24 marketing year.
• BARLEY SALE: Leading South Korean animal feed maker Nonghyup Feed Inc. (NOFI) purchased about 20,000 metric tons of optional-origin animal feed barley in an international tender which closed on Tuesday.
• WHEAT PURCHASE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 123,770 metric tons of food-quality wheat from the United States, Canada and Australia in a regular tender.
• FAILED WHEAT, BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said it received no offers for feed-quality wheat or barley in a simultaneous buy and sell (SBS) auction that closed late on Wednesday.

PENDING TENDERS

• CORN TENDER: South Korea’s Major Feedmill Group (MFG) has issued an international tender to purchase up to 140,000 metric tons of animal feed corn to be sourced from optional origin
• RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp has issued an international tender to purchase an estimated 43,000 metric tons of rice. The deadline for submissions of price offers in the tender is July 10.
• WHEAT TENDER: Algeria’s state grains agency OAIC has issued an international tender to buy a nominal 50,000 metric tons of soft milling wheat for shipment to two ports only.

TODAY

DOE: US Ethanol Stocks Rise 1.8% to 22.658M Bbl

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

• Analysts were expecting 22.445 mln bbl
• Plant production at 1.032m b/d, compared to survey avg of 1.055m

China June Agricultural Imports: Customs

• Soybean Imports in June 10.27m Tons
  • Soybean imports YTD rose 13.6% y/y to 52.575m tons
• Edible vegetable oil imports in June 761,000 tons
  • Edible vegetable oil imports YTD rose 139% y/y to 4.496m tons
• Meat (including offal) imports in June 665,000 tons
  • Meat (including offal) imports YTD rose 10.2% y/y to 3.807m tons
• Fertilizer exports in June 2.83m tons
  • Fertilizer exports YTD rose 35.1% y/y to 12.718m tons

Argentina’s Wheat Area Cut Even as Rains Improve Crop Conditions

Wheat plantings in Argentina will cover an area of 5.4 million hectares, 200,000 hectares less than estimated in June, with production now seen at 15.6 million tons, according to the Rosario Board of Trade.

• Recent rains boost planting in areas of La Pampa and Buenos Aires and improve crop conditions
  • Almost 80% of the wheat crop has been planted
  • Planted wheat area still expected to be lowest in eight years because of lack of rain earlier
• Corn production seen at 32 million tons, 40% less than earlier expectations
  • 40% of the corn still to be harvested, with progress slow because of high moisture
• Soybean production estimate cut yet again to 20 million tons from 20.5 million tons seen in June

China June soy imports up 25% on year after big purchases from Brazil

China imported 10.27 million metric tons of soybeans in June, up 24.5% from a year earlier, customs data showed on Thursday, as large purchases of cheap Brazilian beans reached the market.

The imports by the world’s top soybean buyer were significantly lower than the record 12.02 million tons in May, when delayed cargoes from the prior month pushed up the number. The imports were still relatively high, though, and in line with expectations.

Large recent arrivals have as well pushed shipments for the first six months of the year to 52.58 million metric tons, up 13.6% year-on-year, the General Administration of Customs data showed. CNC-SOY-IMP

The surge comes after buyers in the world’s top soybean consumer bought up cheap supplies from Brazil, which produced a record crop this year.

Buyers had expected rising demand from farmers this year after China reopened after abandoning its strict anti-COVID measures. Hog farmers have lost money since the start of the year, however.

Another 10 million to 11 million metric tons of soybeans are expected to arrive this month, traders said, but demand may slow in the second half of the year if hog herds start to shrink and less soymeal is needed, said Darin Friedrichs, co-founder of Shanghai-based Sitonia Consulting.

Soybeans are crushed into protein-rich meal to feed China’s livestock herds and make oil for cooking.

“Hog farmers have basically been losing money for over six months now. It’s hard to see how that continues indefinitely,” Friedrichs said.

BRIEF-Brazil soy exports seen reaching 10.45 mln tns in July – Anec

• BRAZIL SOY EXPORTS SEEN REACHING 10.45 MILLION TNS IN JULY VERSUS 7.00 MILLION TNS IN SAME MONTH A YEAR AGO- ANEC
• BRAZIL CORN EXPORTS SEEN REACHING 6.91 MILLION TNS IN JULY VERSUS 5.63 TNS IN SAME MONTH A YEAR AGO- ANEC
• BRAZIL SOYMEAL EXPORTS SEEN REACHING 2.5 MILLION TNS IN JULY VERSUS 2.07 MILLION TNS IN SAME MONTH A YEAR AGO- ANEC

Cool weather across the Southern Prairies bodes well for Canada rapeseed yield – Refinitiv Commodities Research

2023/24 CANADA RAPESEED PRODUCTION 18.8 [17.5–20.1] MILLION TONS, UP 3% FROM LAST UPDATE

2023/24 Canada rapeseed production is increased by 3% to 18.8 [17.5–20.2] million tons, thanks to recent coolness over the Southern Prairies despite a warming trend and dry weather prospects through mid-July across Saskatchewan/Manitoba. Our current estimate puts planted area at 8.59 million hectares, slightly (<1%) down from last season’s 8.66 million hectares, which is below the StatCan’s latest estimate of 8.94 million hectares. Our production estimate is below the USDA’s latest World Agricultural outlook (WAOB) estimate of 20.3 million tons. Vegetation densities derived from satellite imagery are near or above historical median levels in Alberta/ Saskatchewan/Manitoba. However, poor soil moisture levels in Alberta warrant concern. We will continue to closely monitor crop conditions via satellite imagery as the season progresses.

German Grain Crop Trimmed Slightly, But Rain Aids Farms: DRV

Germany’s 2023 grain harvest is now seen at 41.9m tons, agricultural cooperatives group DRV said in a report.

• That’s down from a June forecast for 42m tons
• Latest 2023 output estimates include:
  • Wheat at 21.8m tons, slightly lower m/m
  • Corn at 3.72m tons and barley at 10.8m tons, both little changed
• Recent rains have improved crop conditions, says DRV grain-market analyst Guido Seedler
• However, showers arrived too late in some areas and the current heat wave remains a watchpoint
• Rapeseed crop estimate kept steady at 4.1m tons

India Considers Banning Most Rice Exports on Inflation Fears

• Top shipper plans to stop overseas sale of non-Basmati rice
• Move may push global prices even higher amid El Niño threat

India, the world’s biggest rice shipper, is considering banning exports of most varieties, a move that may send already lofty global prices higher as the disruptive El Niño weather pattern returns.

The government is discussing a plan to ban exports of all non-Basmati rice, according to people familiar with the matter. That’s because of rising domestic prices and authorities want to avoid the risk of more inflation, said the people, who asked not to be identified as the information is not public.

If implemented, a ban would affect about 80% of India’s rice exports. Such a move may lower domestic prices, but it risks sending global costs even higher. Rice is a staple for about half of the world’s population, with Asia consuming about 90% of global supply. Benchmark prices have already soared to a two-year high on fears that the return of El Niño will damage crops.

India accounts for about 40% of the global rice trade and has sought to tighten exports of some varieties. Last year, the South Asian nation banned broken rice exports and imposed a 20% duty on shipments of white and brown rice after Russia’s invasion of Ukraine sent prices of food staples like wheat and corn soaring. The country has also restricted wheat and sugar exports.

Representatives for the food, trade and finance ministries didn’t respond to emails or text messages seeking comment. India supplies rice to more than 100 countries, with Benin, China, Senegal, Cote d’Ivoire and Togo among its biggest customers.

Importers such as Indonesia, China and the Philippines have been aggressively stockpiling rice this year. El Niño conditions have developed in the tropical Pacific for the first time in seven years, according to the World Meteorological Organization, threatening to bring drought to many rice-growing regions. A potential ban by India will add to worries over supply.

India’s plan comes after its consumer price inflation quickened in June mainly due to higher food prices. Bloomberg Economics expects inflation to rebound further after the latest surge in tomato prices, a key ingredient in Indian cuisine, and an increase in the government’s support price for monsoon-sown crops. Barclays Bank Plc and Yes Bank have raised their inflation forecasts.

Retail rice prices in Delhi have climbed about 15% this year while the average nationwide price has gained 8%, according to data from the food ministry. Persistent high food costs could hurt popular sentiment ahead of several state polls later this year and national election in 2024.

World’s Top Fertilizer Maker to Sell New Carbon-Hungry Soy in US

• Nutrien will distribute ZeaKal’s genetically-modified seeds
• Plants produce soybeans that have higher nutritional value

The world’s largest fertilizer company has agreed to distribute a new soybean variety that promises to soak up more carbon while yielding more of the vegetable oil and protein needed to meet demand for green diesel, chicken feed and veggie burgers.

Nutrien Ltd. will sell the genetically-modified seeds produced by San Diego-based startup ZeaKal Inc., the companies said in a joint statement Wednesday. US farmers will be the first to get the offering, just in time for the 2024 season. Terms weren’t disclosed.

The move comes as seed makers including Corteva Inc. are developing new crop varieties to meet rising demand for the renewable diesel and alternative proteins industries. Genetic modifications to increase soybean yields over the years have come at the cost of nutritional value, according to ZeaKal.

The collaboration with Nutrien is ZeaKal’s latest step to bring to market its PhotoSeed trait technology, which allows plants to sustain photosynthesis for longer.

“PhotoSeed tricks the plant into thinking it is hungrier for longer so it eats more carbon,” ZeaKal Chief Executive Officer Han Chen said in response to Bloomberg questions.

The seeds initially will be available to some farmers who supply grain to the soy-processing unit of Perdue Farms Inc.. The chicken producer last year agreed to buy PhotoSeed soybeans as part of a multiyear agreement to raise more “sustainable poultry.”

 

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