Global Ag News for June 4.24

TOP HEADLINES

China’s Cofco Said to Weigh Sale of Last Chicago Grain Terminal

• Move would come after the trader offloaded Milwaukee facility
• Trading arm of China’s top food company is moving from Chicago

Cofco International Ltd., the trading arm of China’s largest food company, is exploring options including a sale for its Chicago grain terminal, according to people familiar with the matter.

The facility is the last of its kind still operating in the city that’s home to the Chicago Board of Trade, where benchmarks for wheat, corn and soybeans trade. The terminal in the southern part of the city is older and not as efficient as in the days Chicago was a major grain port, said the people, who asked not to be named because the information is private.

Any deal to sell the Chicago terminal would come after Cofco offloaded its Milwaukee facility in the neighboring state of Wisconsin last year. It would also follow the company’s decision to relocate from downtown Chicago to the suburbs due to high costs and persistent crime.

A spokesman for Cofco declined to comment.

Chicago once was one of the world’s top grain ports, with the Windy City serving as a delivery point for farms in the Midwest. But with more storage built both on farms and in importing nations, Cofco’s elevator is the only large terminal that’s still operating in the city.

Cofco entered the US market by acquiring Dutch grains trader Nidera BV, which owned the elevator. The facility is still a delivery point for commodities traded on the CBOT, owned by CME Group Inc.

 

FUTURES & WEATHER

Wheat prices overnight are up 1 1/4 in SRW, down 1 3/4 in HRW, down 1 3/4 in HRS; Corn is down 1 1/4; Soybeans up 1/2; Soymeal down $1.10; Soyoil down 0.05.

For the week and month so far wheat prices are down 1 in SRW, down 6 1/4 in HRW, down 5 1/4 in HRS; Corn is down 3 1/2; Soybeans down 18; Soymeal down $5.50; Soyoil down 1.32.

Year-To-Date nearby futures are up 7.9% in SRW, up 9.4% in HRW, up 1.5% in HRS; Corn is down 6.0%; Soybeans down 8.2%; Soymeal down 6.9%; Soyoil down 7.6%.

Chinese Ag futures (JUL 24) Soybeans up 1 yuan; Soymeal down 9; Soyoil down 120; Palm oil down 168; Corn down 3 — Malaysian Palm is down 170.  Malaysian palm oil prices overnight were down 170 ringgit (-4.17%) at 3906.

There were no changes in registrations. Registration total: 1,479 SRW Wheat contracts; 39 Oats; 747 Corn; 469 Soybeans; 2,589 Soyoil; 15 Soymeal; 0 HRW Wheat.

Preliminary changes in futures Open Interest as of June 3 were: SRW Wheat up 607 contracts, HRW Wheat down 2,440, Corn up 24,353, Soybeans up 6,652, Soymeal down 1,837, Soyoil up 2,125.

 

Northern Plains: Isolated to scattered showers Tuesday. Mostly dry Wednesday-Thursday. Isolated showers south Friday. Temperatures near to above normal through Friday. Outlook: Isolated showers south Saturday-Sunday. Scattered showers Monday-Tuesday. Mostly dry Wednesday. Temperatures above normal west and near to below normal east Saturday-Wednesday.

Central/Southern Plains: Isolated to scattered showers Tuesday, southeast Wednesday. Isolated showers Thursday-Friday. Temperatures near to above normal through Friday. Outlook: Isolated to scattered showers Saturday-Wednesday. Temperatures near to above normal Saturday, near to below normal Sunday-Wednesday.

Midwest: West: Isolated to scattered showers Tuesday. Mostly dry Wednesday-Thursday. Isolated showers Friday. Temperatures near above normal through Wednesday, near normal Thursday-Friday. East: Isolated to scattered showers through Wednesday, northeast Thursday-Friday. Temperatures above normal through Wednesday, near normal Thursday-Friday. Outlook: Isolated to scattered showers Saturday-Sunday. Mostly dry Monday. Isolated to scattered showers Tuesday-Wednesday. Temperatures near to below normal Saturday-Wednesday.

Brazil: Rio Grande do Sul and Parana:  Mostly dry Tuesday-Friday. Temperatures above normal north and below normal south Tuesday, above normal Wednesday-Friday. Mato Grosso, MGDS and southern Goias:  Dry through Friday. Temperatures above normal through Friday.

Argentina: Cordoba, Santa Fe, Northern Buenos Aires:  Mostly dry through Friday. Temperatures below normal Tuesday, near to above normal Wednesday, above to well above normal Thursday-Friday. La Pampa, Southern Buenos Aires:  Mostly dry through Friday. Temperatures below normal Tuesday, near to above normal Wednesday, above to well above normal Thursday-Friday.

The player sheet for 6/3 had funds: net sellers of 5,500 contracts of SRW wheat, sellers of 9,000 corn, sellers of 9,750 soybeans, sellers of 3,000 soymeal, and sellers of 5,500 soyoil.

 

TENDERS

• CORN SALE: The U.S. Department of Agriculture confirmed private sales of 110,000 metric tons of U.S. corn for shipment to Spain in the 2023/24 marketing year.
• CORN SALE: The Korea Feed Association (KFA) in South Korea purchased an estimated 50,000 to 65,000 metric tons of animal feed corn expected to be sourced from either the United States or South America in a private deal
• FEED WHEAT SALE: Leading South Korean animal feed group Nonghyup Feed Inc purchased around 60,000 metric tons of animal feed wheat in a private deal on Friday without issuing an international tender
• WHEAT TENDER: Egypt’s state grains buyer the General Authority for Supply Commodities (GASC) is seeking wheat in an international tender.
• WHEAT TENDER: Algeria’s state grains agency OAIC issued an international tender to buy soft milling wheat to be sourced from optional origins.

PENDING TENDERS

• WHEAT TENDER: Jordan’s state grain buyer has issued an international tender to buy up to 120,000 metric tons of milling wheat sourced from optional origins.
• WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy a total of 103,767 metric tons of food-quality wheat from the United States, Canada and Australia in a regular tender that will close late on Thursday.
• CORN TENDER: Leading South Korean feedmaker Nonghyup Feed Inc (NOFI) has issued an international tender to purchase up to 138,000 metric tons of animal feed corn

 

 

 

TODAY

US Inspected 1.374m Tons of Corn for Export, 349k of Soybeans

In week ending May 30, according to the USDA’s weekly inspections report.

• Soybeans: 349k tons vs 222k the previous wk, 222k a yr ago
• Corn: 1,374k tons vs 1,130k the previous wk, 1,207k a yr ago
• Wheat: 416k tons vs 399k the previous wk, 304k a yr ago

 

US Corn, Soybean, Wheat Inspections by Country: May 30

Following is a summary of USDA inspections for week ending May 30 of corn, soybeans and wheat for export, from the Grain Inspection, Packers and Stockyards Administration, known as GIPSA.

• Soybeans for Mexico-bound shipments made up 70k tons of the 349k total inspected
• Mexico was the top destination for corn inspections, Philippines led in wheat

 

US Soybean Crushings at 178M Bushels in April: USDA

USDA releases monthly oilseed report on website.

• Crushing 4.9% lower than same period last year
• Crude oil production 6.2% lower than same period last year
• Crude and once-refined oil stocks down 9% y/y

 

US Corn Used for Ethanol at 416.9M Bu in April

The following is a summary of US corn consumption for fuel and other products, according to the USDA.

• Corn for ethanol was 0.7% higher than in April 2023
• DDGS production rose to 1.756m tons

 

StoneX cuts forecast for Brazil’s 2024 second corn crop by 3.9%

Brazil’s second corn crop is expected to hit 93.5 million metric tons in the 2023/24 season, consultancy StoneX said on Monday, lowering its forecast by 3.9% from its previous estimate in May.

The South American nation’s second corn crop represents about 75% of the national production each year and is planted after soybeans are harvested from the same fields.

StoneX said the dry weather prompted it to cut its outlook for key production states Mato Grosso do Sul, Goias, Parana and Sao Paulo, adding that in several cases yields had fallen to below 5 tons per hectare (2.47 acres).

StoneX now expects overall yields for the second corn crop at 5.42 tons per hectare, down from 5.67 tons in May.

Its forecast for Brazil’s total corn crop is now at 121.75 million tons, down from the 125.6 million tons in May, driven mainly by the expected drop in second corn output.

StoneX also has cut Brazil’s 2023/2024 soy crop, which has been nearly totally harvested, by 1.2% to 149 million tons, mostly due to losses after floods in Rio Grande do Sul state.

 

China’s Hog Farmers See Profits Surge But Demand Still a Problem

• Rise in pig prices doesn’t mean the pork cycle has turned
• Fewer smallholders has put industry on a better footing

China’s hog farmers may have turned a corner after a surge in profits last month, but a sustained improvement in the industry’s fortunes could still prove elusive.

Pig prices have climbed to their highest level since the end of 2022, driven by a decline in production. The constraints on supply, plus a drop in feed costs, have fueled a similar jump in margins. Further seasonal gains in the price of China’s favorite meat are likely in the second half of the year, according to the agricultural ministry.

But what’s missing from the equation is a durable increase in demand. It’s a common theme across China’s commodities markets, as the economy has struggled to recover from the pandemic amid a protracted crisis in the property market.

The rise in pig prices doesn’t guarantee a prolonged shift back to profitability for farmers, according to Justin Sherrard, global strategist for animal protein at Rabobank. “These are early signals that the turn in the pork cycle is coming, but until we see sustained signals of stronger demand, China is not quite there yet,” he said.

 

Brazil’s 2024 second-corn harvest hits 4.7%, says AgRural

Brazil’s second-corn harvest for the 2024 cycle had reached 4.7% of the planted area in the key center-south region as of Thursday, agribusiness consultancy AgRural said on Monday, up 2.7 percentage points from the previous week.

The figure was above the 1.4% recorded at the same time a year earlier.

Brazil’s second corn crop, which represents about 75% of the national production each year, is planted after soybeans are harvested on the same fields.

“The work continues to be driven by Mato Grosso, where yields surprise positively, and by Parana, which has losses caused by the heat and irregular rainfall,” AgRural said.

AgRural estimates Brazil’s total 2023/24 corn production at 118.4 million metric tons, below a previous forecast due to drought in some areas.

According to AgRural analyst Daniele Siqueira, the fast pace of harvesting was not expected to have a big impact on corn exports in June, especially because Brazil’s corn is currently less competitive than the product from the U.S. and Argentina.

A bigger than anticipated second corn crop in top grower Mato Grosso, however, could boost Brazilian corn shipments as June advances, Siqueira said.

In Parana, there are still plenty of soybeans to be exported before corn enters the export flow, Siqueira said.

A smaller overall corn crop in Brazil will likely drive a 40% fall in exports in the current season compared to the record of the previous cycle, when the country exported 54.6 million tons.

 

India’s May palm oil imports reach 4-month high on price drop-dealers

India’s palm oil imports rose by 12.4% in May from the previous month to reach the highest level in four months as the recent correction in prices led to higher purchases, five dealers told Reuters.

Higher palm oil purchases by India, the world’s biggest importer of vegetable oils, could support the benchmark Malaysian palm oil futures FCPOc3 that fell to their lowest level in more than three months in May.

Palm oil imports in May jumped to 769,000 metric tons, the highest since January, according to estimates from dealers.

Palm oil imports jumped last month as higher margins prompted traders to increase refined palm oil purchases, rising to 214,000 tons from 124,228 tons the previous month, said Rajesh Patel, managing partner at edible oil trader and broker GGN Research.

Crude palm oil’s (CPO) imports are offered at about $948 a metric ton, including cost, insurance and freight (CIF), in India for July delivery, while soyoil and sunflower oil are offered around $1,028 and $1,035 a ton, respectively, dealers said.

Two months ago, CPO was commanding a premium over the rival oils.

Palm oil imports would remain robust even in June and around 750,000 tons is likely to land in the country, said Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil brokerage.

 

Malaysian Palm Oil Reserves Seen Advancing on Strong Production

• Stockpiles rise 2.3% to 1.78 million tons in May, survey shows
• Supplies set to climb in months ahead as exports ease: analyst

Palm oil stockpiles in Malaysia probably increased as production in the world’s second-largest grower surged the most in a year and countered a jump in shipments.

Inventories in May rose 2.3% from a month earlier to 1.78 million tons, according to a median forecast of 12 plantation executives, traders, and analysts surveyed by Bloomberg. That would be the second monthly increase in reserves following a surprise rise a month ago, and more than 5% higher than May 2023.

The boost comes from rising crude palm oil output, which is forecast to have surged 11.3% to 1.67 million tons, the biggest monthly increase since May 2023. Exports, meanwhile jumped 14% to 1.40 million tons, according to the survey. Official data will be released by the Malaysian Palm Oil Board on June 10.

“While production will be the most important figure, the market will be interested to confirm the high export estimates which already drove Malaysian prices higher last week,” said Nagaraj Meda, managing director of Hyderabad-based TransGraph Consulting. May exports were “very high” as demand shifted from Indonesia to Malaysia, but this may reverse in June, he said.

 

Argentina grains export revenue falls 37% in May

Argentina’s grain exporters brought in a total $2.612 billion in May, a 37% drop compared to the previous year, the CIARA-CEC chamber of oilseed producers and grains exporters said on Monday.

CIARA-CEC said revenue from the sector’s companies, which make up 48% of Argentine exports, rose 37% compared to April. In the January-May period, it added, they decreased 4% year-on-year.

May’s figures reflect “the new foreign-exchange regime for exports in place since December 2023, international prices, the impact of weather on the pace of corn and soybean harvests and the farmers’ terms of trade,” the chamber said.

“Grain exports and the oil industry continue with high levels of idle capacity, suffering from permanent negative margins,” the group added, noting that strikes by workers’ unions also affected the industry in the period.

Argentina is one of the world’s top two exporters of processed soy oil and meal, the No. 3 for corn, and a major producer of wheat.

 

WHEAT/CEPEA: Low domestic supply and international scenario keep prices firm

Wheat prices tend to be firm in Brazil in the second quarter of the year, sustained by lower stocks. In 2024, besides the lower domestic availability, values have also been influenced by the international scenario – 2024/25 global stocks tend to decrease for the third year in a row.

As a result, wheat prices in the wholesale market (deals between processors), considering major regions surveyed by Cepea, are the highest since the middle of 2023, in real terms (monthly prices were deflated by IGP-DI). As for quotations paid to wheat farmers (over-the-counter market), they advance, but at a lower intensity, which can be related to the low liquidity.

Purchasers claim to have difficulties to find high-quality product in the domestic market, due to the production decrease in 2023. On the other hand, imports are still firm. Mills in Brazil are focused on the possibility of productivity decrease in the United States and in Russia, which can sustain international prices.

According to data from Cepea, between May 24 and 31, the prices paid to wheat farmers (over-the-counter market) rose 0.71% in Paraná, 1.63% in Santa Catarina and remained stable in Rio Grande do Sul. In the wholesale market (deals between processors), values moved up 0.61% in Paraná, 0.42% in Rio Grande do Sul, 4.44% in São Paulo and 1.85% in Santa Catarina. Dollar quotations increased 1.62% against Real in the same period, at BRL 5.257 on May 31.

In May, the monthly average of wheat prices in Paraná was BRL 1,391.42 per ton, 9.8% more than in April/24, but downing 4% compared to May/23, in real terms. In Rio Grande do Sul, the average was BRL 1,282.65/ton, 7% up in one month, but for a decrease of 0.9% in one year. In São Paulo, prices averaged BRL 1.502.44/ton in May, +14.4% and +4% in the same comparisons.

In Paraná, data from Seab/Deral indicate that the wheat planting reached 59% of the area, projected at 1.12 million hectares. In Rio Grande do Sul, the significant amount of rainfall in May damaged the soil.

 

River Rhine in south Germany still closed to shipping after rain

Parts of the river Rhine in south Germany remained closed to cargo shipping on Tuesday after heavy rain in south Germany increased water levels, navigation authorities said.

Rhine river shipping has stopped around Maxau and Mannheim in south Germany, the German inland waterways navigation agency said. The river had been closed to freight shipping over the weekend after heavy rain caused extensive flooding in south Germany, stopping sailings to Switzerland.

High water means vessels do not have enough space to sail under bridges and the blockage prevents vessels sailing to Switzerland. Shipping on northern sections of the river is operating normally despite rising water levels including the important points of Duisburg, Cologne and Karlsruhe.

 

 

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