Global Ag News for June 30.23

TOP HEADLINES

Global Grain Harvest Seen 2m Tons Lower on Dry Weather: IGC

Global grain production in the 2023-24 season is now seen at 2.292b tons, below a May estimate for 2.294b tons, the International Grains Council said in a report.

• That’s based on “overly dry” conditions in producing countries, including parts of the US
• Stockpile forecast cut to 577m tons from 580m tons

WHEAT:

• Production outlook raised to 786m tons from 783m tons
• Still, stockpile estimate falls to 264m tons from 271m tons amid increased consumption

CORN:

• Production forecast lowered to 1.211b tons from 1.217b tons
• Stockpiles raised to 276m tons from 272m tons

FUTURES & WEATHER

Wheat prices overnight are up 5 1/4 in SRW, up 8 in HRW, up 9 in HRS; Corn is up 6; Soybeans up 17 3/4; Soymeal up $2.90; Soyoil up 1.13.

For the week so far wheat prices are down 73 3/4 in SRW, down 53 3/4 in HRW, down 39 1/4 in HRS; Corn is down 53 1/2; Soybeans down 26 1/2; Soymeal down $14.90; Soyoil up 1.14.

For the month to date wheat prices are up 64 3/4 in SRW, up 22 3/4 in HRW, up 52 in HRS; Corn is up 12 3/4; Soybeans up 137; Soymeal up $18.40; Soyoil up 9.95.

Year-To-Date nearby futures are down 16.8% in SRW, down 8.3% in HRW, down 14.0% in HRS; Corn is down 13.5%; Soybeans down 0.6%; Soymeal down 14.9%; Soyoil down 2.9%.

Chinese Ag futures (SEP 23) Soybeans up 2 yuan; Soymeal up 26; Soyoil up 84; Palm oil up 78; Corn up 17 — Malaysian palm oil prices overnight were up 43 ringgit (+1.15%) at 3798.

There were changes in registrations (400 Oats). Registration total: 2,389 SRW Wheat contracts; 402 Oats; 0 Corn; 0 Soybeans; 1,036 Soyoil; 0 Soymeal; 97 HRW Wheat.

Preliminary changes in futures Open Interest as of June 29 were: SRW Wheat down 5,367 contracts, HRW Wheat down 5,198, Corn down 4,336, Soybeans down 7,767, Soymeal down 5,396, Soyoil down 4,632.

Northern Plains: A few disturbances will continue to bring scattered showers through the Northern Plains through next week. Temperatures will be milder through next week as well. Overall, the outlook is favorable for developing crops and forages.

Central/Southern Plains: Heat across the Southern Plains will get squashed by a cold front that makes it through this weekend. Several disturbances will move through the north until then with scattered showers and thunderstorms and potential for heavy rainfall. The front will stall across the south where it may be active next week while a front will go through northern areas with more showers next week as well. Sporadic rainfall will leave some areas drier with stress continuing over those in drought.

Midwest: The southern end of the Midwest will continue to be active with scattered showers through the weekend. Not all areas will be hit, but some areas have a chance for heavy rain and severe weather. Hot temperatures have moved into Missouri and southern Illinois and will be around through Saturday before a front pushes south through the area and brings in some milder temperatures. Temperatures will rise farther north next week but a cold front will move through with more showers and mild temperatures again. The front may settle over the southern end of the region later next week where showers would continue.

Delta: Heat building into the Delta the next few days could be stressful for some of the drier areas. A cold front coming through this weekend will stall in the region and bring needed showers into much of next week, as well as milder temperatures.

Canadian Prairies: Some disturbances moving through the Canadian Prairies will help bring at least some areas of showers through Friday. The showers do not look overly widespread and many areas are going to be missed. Any drier areas may show significant stress in developing crops, especially in southern Alberta, where temperatures continue to be higher. A system will move through Saturday and Sunday, but the extent of any precipitation into next week is likely to be lighter outside of the low track, currently expected from central Alberta to northern Saskatchewan. Isolated showers may follow behind the system next week, though chances are lower.

The player sheet for 6/29 had funds: net sellers of 1,500 contracts of SRW wheat, sellers of 9,500 corn, sellers of 5,000 soybeans, buyers of 1,500 soymeal, and  sellers of 1,000 soyoil.

TENDERS

• CORN PURCHASE: South Korea’s Major Feedmill Group (MFG) purchased an estimated 68,000 metric tons of animal feed corn expected to be sourced from South America or South Africa in a private deal on Thursday without issuing an international tender.
• CORN PURCHASE: Leading South Korean animal feed maker Nonghyup Feed Inc. (NOFI) has bought an estimated 68,000 metric tons of animal feed corn in an international tender for up to 138,000 tonnes on Thursday.
• CORN TENDER: The Korea Feed Association (KFA) has issued an international tender to purchase up to 69,000 metric tons of animal feed corn to be sourced from optional origins
• CORN TENDER: South Korea’s Major Feedmill Group (MFG) has issued an international tender to purchase up to 70,000 metric tonnes of animal feed corn to be sourced from optional origins

PENDING TENDERS

• RICE TENDER: The state purchasing agency in Mauritius has issued an international tender to buy 6,000 metric tons of long grain white rice sourced from optional origins.
• SOYMEAL TENDER: Iranian state-owned animal feed importer SLAL has issued an international tender to purchase up to 120,000 metric tons of soymeal to be sourced from Brazil or Argentina.

TODAY

US Sold 244K Tons of Soybeans Last Week; 264K of Corn: USDA

USDA releases net export sales report on website for week ending June 22.

• Soybean sales fell to 244k tons vs 626k in previous week
• All wheat sales rose to 155k tons vs 124k in previous week
• Corn sales rose to 264k tons vs 83k in previous week

US Export Sales of Soybeans, Corn and Wheat by Country

The following shows US export sales of soybeans, corn and wheat by biggest net buyers for week ending June 22, according to data on the USDA’s website.

• Mexico was the top buyer of soybeans in the week with 107k tons
• Mexico was the top buyer of corn and Japan led in wheat

Argentine Soy, Corn, Wheat Estimates June 29: Exchange

The Buenos Aires Grain Exchange releases weekly report on website.

• 2022-23 soybean and corn production estimates maintained
• 2023-24 wheat planting area est. lowered by 100,000 ha to 6.0m ha

Argentina Concludes Soy Harvest With Yields 45% Less Than Normal

Farmers have now collected all of Argentina’s soybeans, with plants yielding 45% less than the average of the previous five seasons after a brutal drought, according to a Buenos Aires Grain Exchange weekly report.

• Final production estimate kept at 21m metric tons
• NOTE: Argentina’s Epic Drought Sends Economic Crisis to New Extremes
• With the window closing for wheat planting in the center-west but many farms still too parched for fieldwork, the exchange cuts the area estimate another 1.6% to 6m hectares (14.8m acres)

Brazil to buy 500,000 tons of corn as it rebuilds food stocks

Brazil’s government is set to buy 500,000 metric tons of corn as it looks to start rebuilding public food stocks, fulfilling one of President Luiz Inacio Lula da Silva’s campaign pledges, the head of food agency Conab said on Thursday.

Confab President Edegar Pretto told reporters the initial move would cost public coffers about 350 million reais ($72 million), and said the government may return to the market by the end of the year for additional purchases.

The Lula administration sees shoring up government food stocks as a way of easing prices when supplies are low or of helping farmers when they are selling below the legally required minimum.

Brazil’s public food stocks reached all-time highs between 2009 and 2010, during Lula’s first stint in office, when they totaled more than 4 million metric tons.

The government policy of buying food for storage, however, was later abandoned and public stocks are now practically non-existent.

“By the end of the year we might make another round of purchases of corn or another product. We are closely watching prices,” Pretto said.

Farmers are grappling with low corn prices as Brazil harvests a bumper crop.

Agriculture Minister Carlos Favaro made the announcement alongside Pretto and defended the plans to resume stocking up on products such as corn, rice and beans as public policy rather than market intervention.

He said the plan would not incur financial losses as the government would be able to buy low and sell high, and said having food in storage would help alleviate inflationary pressures if prices spike.

“The government is working to support farmers and make sure citizens do not buy expensive food,” Favaro said.

Ukraine 2023 Grain, Oilseed Harvest Seen 6.4% Lower Y/y: UGA

This year’s grain and oilseed harvest is now seen at 69.1m tons, according to slides from the Ukrainian Grain Association ahead of a presentation in Kyiv.

• NOTE: The outlook is about 4m tons higher than the group’s forecast in March
• Amount compares with 73.8m tons in the prior year and 106.4m tons in 2021, before the war
• Total includes:
  • Wheat crop at 17.9m tons, down 12% y/y
  • Barley crop at 4.4m tons, down 25% y/y
  • Corn crop at 24.2m tons, down 11% y/y
  • Sunflower crop at 12.7m tons, up 14% y/y
• Exports in the 2023-24 season seen at 44.8m tons, versus 58.5m tons in the prior season

Lavrov Says He Sees No Arguments to Extend Black Sea Grain Deal

“I don’t see what argument those who would like to continue” the Black Sea grain deal have, because it has become “commercial in terms of Ukrainian grain,” Russia’s Foreign Minister Sergei Lavrov told reporters at online briefing.

• For the entire duration of the deal, each month only a couple of ships under the World Food Programme have departed from the Ukrainian ports, while the number of commercial grain carriers is far higher, Lavrov says
• Exports of Russian fertilizer and foodstuffs won’t be affected if the grain deal is terminated
• NOTE: The pact, which the UN has said is about depressing global prices, is up for renewal July 17

Malaysia June Palm Oil Exports 1.092m Tons: AmSpec

Malaysia’s palm oil exports were 1.092m tons in June, according to AmSpec Agri.

Palm oil exports rose 0.63% m/m

• Total exports for June 2023: 1.086m tons
• Crude palm oil exports: 283,945 tons, 26.1% of total
• India & Subcontinent led all destinations for total exports: 287,600 tons

China’s sow herd declines 0.6% in May -agriculture ministry

China’s sow herd declined 0.6% in May compared to the prior month to 42.58 million, according to farm ministry data on Friday, as farmers reduced herds following months of losses.

China’s hog prices have stayed at low levels for much of this year, pressured by excess supply and weak consumption.

Prices fell to 14 yuan ($1.93) per kilogramme this week, as record high temperatures eroded demand already impacted by slowing economic growth.

Though farmers are reducing their breeding herds to some extent, the number of sows was still 1.6% higher than a year ago, according to the Ministry of Agriculture and Rural Affairs data.

The number of pigs slaughtered at big facilities that have capacity to slaughter more than 20,000 hogs a year was 11% higher in May than a year ago, it also showed, and up 9.9% for the first five months of this year.

French Corn Conditions Edge Higher as Temperatures Cool: AgriMer

The amount of France’s corn crop rated in good or very good condition improved by 1 percentage point in the week to June 26, according to data from FranceAgriMer.

• NOTE: Temperatures in parts of northern Europe are turning cooler, after weeks of hot weather
• Meanwhile, the winter-barley harvest is trailing last year’s pace

DROUGHT BRINGING EARLY SOYEAN DISEASES

Mandy Bish tells Brownfield charcoal rot is showing up early in Missouri because of the drought. She says fungicides aren’t an option to manage the disease and farmers should use the drought as a chance to learn.

“To see where we have those problems. With charcoal rot and other soil-borne diseases, this drought is really showing where there may be problems. When we have healthy looking soybeans, we may not know there’s a problem.”

Bish says another soybean disease, cercospora leaf blight, is also being confirmed earlier than normal, but fungicides are an option for disease management. The pathogen for the disease lives in infected soybean seeds and on plant residue, favoring warm temperatures and high humidity.

Hot Temperatures to Return to Europe in July Amid Drought Alert

• Areas of Northern Europe are under drought warning conditions
• Heat contributes to volatility in energy and commodity pricesBy Eamon Akil Farhat and Priscila Azevedo Rocha

Hot temperatures are set to return to northwest Europe in July, at a time when some parts of the continent are already under drought warning.

Thermometers are expected to rise to above-average levels in the UK, Germany and parts of France throughout July, according to meteorologists surveyed by Bloomberg. A wave of warm, dry weather will settle in after a few days of sparse rain and some wind in the first half of the month.

“Many areas of northern Europe — including the British Isles — are now in drought warning conditions with soil moisture deficits,” said Amy Hodgson, a meteorologist at forecaster Atmospheric G2. “Little significant relief in this is forecast through July with drier than normal conditions forecast for July as a whole, except for a wetter first week of the month across northern Europe.”

US Corn Crops in Drought Area Rise to 70%: USDA

The  following table shows the percent of US agricultural production within an area that experienced drought for the week ending June 27, according to the USDA’s weekly drought report.

• Corn crops experiencing moderate to intense drought rose by 6 percentage points from the previous week to 70%
• At this time last year, 23% of corn crops were in drought
• Soybean crops in drought also rose by 6 points, reaching 63%

US Miss. River Grain Shipments Fall, Barge Rates Increase: USDA

Barge shipments down the Mississippi river declined to 400k tons in the week ending June 24 from 489k tons the previous week, according to the USDA’s weekly grain transportation report.

• Barge shipments of corn fell 38% from the previous week
• Soybean shipments up 15% w/w
• St. Louis barge rates were $8.90 per short ton, an increase of $0.18 from the previous week

 

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