Global Ag News for May 30.24

TOP HEADLINES

Australian Beef Exports to China Can Resume Immediately: ABC

Five major Australian beef exporters suspended from exporting meat to China can now resume, Agriculture Minister Murray Watt told Australian Broadcasting Corporation.

Suspensions have been lifted by China with immediate effect

FUTURES & WEATHER

Wheat prices overnight are down 11 1/2 in SRW, down 9 1/4 in HRW, down 4 1/2 in HRS; Corn is down 1/4; Soybeans up 3/4; Soymeal up $3.20; Soyoil down 0.69.

For the week so far wheat prices are down 16 in SRW, down 10 3/4 in HRW, down 5 1/4 in HRS; Corn is down 9 3/4; Soybeans down 33 1/4; Soymeal down $14.20; Soyoil up 0.23.

For the month to date wheat prices are up 78 in SRW, up 75 1/4 in HRW, up 43 1/4 in HRS; Corn is up 8 1/4; Soybeans up 52 1/4; Soymeal up $20.40; Soyoil up 2.18.

Year-To-Date nearby futures are up 8.5% in SRW, up 10.7% in HRW, up 3.3% in HRS; Corn is down 3.4%; Soybeans down 6.1%; Soymeal down 3.5%; Soyoil down 5.6%.

Chinese Ag futures (JUL 24) Soybeans up 15 yuan; Soymeal down 17; Soyoil unchanged; Palm oil down 18; Corn down 7 — Malaysian Palm is down 46. Malaysian palm oil prices overnight were down 46 ringgit (-1.14%) at 3988.

There were no changes in registrations. Registration total: 1,479 SRW Wheat contracts; 39 Oats; 747 Corn; 469 Soybeans; 2,589 Soyoil; 85 Soymeal; 0 HRW Wheat.

Preliminary changes in futures Open Interest as of May 29 were: SRW Wheat up 3,258 contracts, HRW Wheat up 3,673, Corn up 15,348, Soybeans up 4,902, Soymeal up 5,831, Soyoil up 4,705.

Northern Plains: A system will move through Wednesday and Thursday with isolated showers continuing afterward into next week with a couple more systems moving through as well. Any heavy amounts are likely to be very isolated, with more light to moderate rainfall across the region, which should leave enough holes for produces to continue planting while giving new seedlings some rainfall to continue growing.

Central/Southern Plains: A front moved into the region on Wednesday and will slowly pivot around the area through the weekend and even lasting into next week. Every day should feature precipitation somewhere in the region through at least June 3, which is a good prospect for getting some precipitation into drier parts of the region but could cause storm damage or flooding in some others.

Midwest: A system will approach the west on Thursday with showers and thunderstorms that will continue to spread eastward through the weekend. A couple of other systems will move through next week with scattered showers as well. Short breaks between storm systems and rainfall have made it difficult for those yet to plant to finish up and flooding has been an issue in many areas, especially in the southwest. The recurrence of widespread rainfall by late this week will continue the threat for late planting and some flooded areas may not be replanted.

Delta: A front remains in the south and may activate and produce some showers through Thursday. Additional fronts and systems will be close by starting Friday and lasting through next week, which gives at least northern areas more chances for rain. Southern areas may find that as well. Although some flooding potential is possible, the rain is overall favorable for developing crops.

Canadian Prairies: Another system will slowly move through the region through Friday and the storm track will try to move farther north again for this weekend and next week, which brings more opportunity for rain through the region. Temperatures should fluctuate between systems, but overall do not look particularly cold, which should limit potential for frosts, though some cooler temperatures may slide through eastern portions of the region later next week.

Brazil: Dry weather continues through next week, which will help flooded areas in the south to recover a bit, though that will take a lot of time.

Argentina: A front will move through this weekend with only limited showers. Dryness in recent weeks is also unfavorable for winter wheat, which could use some rain for establishment.

The player sheet for 5/29 had funds: net sellers of 4,000 contracts of SRW wheat, sellers of 10,000 corn, sellers of 5,000 soybeans, sellers of 3,000 soymeal, and buyers of 3,000 soyoil.

TENDERS

• CORN SALE: The Korea Feed Association’s (KFA) Busan section in South Korea purchased an estimated 66,000 metric tons of animal feed corn expected to be sourced from either South America or South Africa in a private deal late on Tuesday.
• 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.

PENDING TENDERS

• WHEAT TENDER: The Taiwan Flour Millers’ Association issued an international tender to purchase an estimated 96,850 metric tons of grade 1 milling wheat to be sourced from the United States.
• WHEAT TENDER: South Korea’s Major Feedmill Group (MFG) has issued an international tender to purchase up to 132,000 metric tons of animal feed wheat

 

 

TODAY

ETHANOL: US Weekly Production Survey Before EIA Report

Output and stockpile projections for the week ending May 24 are based on seven analyst estimates compiled by Bloomberg.

• Production seen higher than last week at 1.031m b/d
• Stockpile avg est. 24.052m bbl vs 24.212m a week ago
• Would be the lowest since December

 

Brazil Flood-Driven Soy Losses Seen at ~5M Tons: Morgan Stanley

Estimated global soy surplus from 2023-24 harvest “at risk” as recent floods in southern Brazil eroded crop yields and damaged supplies in storage, Morgan Stanley analyst Julia Rizzo said in a report.

• Brazil soybean supplies seen at 145 million tons, down from 150 million before the floods
  • Stored soybean losses seen at ~2 million tons, with harvest losses at ~3 million tons
• Tighter supplies should help sustain soybean futures above $12 per bushel
• Domestic freight rates have risen due to a strain in truck capacity as well as a recent increase in the pace of sales by farmers
• Crop producers including SLC and Adecoagro stand to benefit from higher soybean prices
• Train operator Rumo seen gaining from higher freight rates

 

Bleak summer weather outlooks slightly lower U.S. soybean production

2024/25 U.S. SOYBEAN PRODUCTION: 119 [113–125] MILLION TONS, DOWN <1% FROM LAST UPDATE

2024/25 U.S. soybean production is slightly (<1%) lowered to 119 [113–125] million tons, reflecting less than favorable summer weather outlooks across the central Soy Belt, despite recent progress in planting and improved soil moisture compared to recent weeks. Our current outlook puts planted area at 86.9 million acres, up 3.9% from last season, which is 0.4 million acres above the USDA’s March estimate of 86.5 million acres in its Prospective Plantings report (28 March). The next USDA survey-based estimate of acreage will be released in the 28 June Acreage report. A recently released Reuters Poll of Analysts (06 May) placed U.S. soybean production and yield at 4.44 [4.16–4.55] billion bushels and 51.9 [50.6–53.0] bushels per acre, respectively, slightly above our current median estimates, 4.37 billion bushels and 51.1 bushels per acre, respectively.

After acute conditions kept plantings slow by early May (and at times into the first few days of mid-May), relatively mild and moderate weather throughout most of the Midwest and Plains through last week allowed for a meaningful catch up in the core Soy Belt states. The latest Crop Progress report of the season (28 May) estimated national-level sowings at 68%, a whopping 16% jump from last week, now ahead of the five-year average of 63%, though still well behind last year’s 78%. Most key producing regions of the central/eastern Soy Belt, including the “I” states (i.e. Illinois, Iowa and Indiana), have seen a huge catch-up over the past two weeks, with virtually all crop regions now on or ahead of schedule. Unlike corn, soybean planting was never significantly delayed this season, despite consistently lagging behind last year’s near record pace.

The next 15 days should feature mix conditions for most major production areas of the Soy Belt, with widespread warmth and dryness to follow during the second/third week of the month after some lingering wet conditions wrap up early June. A recently released June outlook from Refinitiv Weather Research suggests the warmth will continue through the end of June, with few precipitation extremes. Beyond June, updated June-August weather outlooks with the latest soil moisture data point to a potential drought/unfavorable hot and dry pattern during the crop’s prime growth period, especially across the “I” states, calling for close attention.

 

EU Agrees to Hike Tariffs on Russian Grain Imports From July

The European Union agreed to hike tariffs on imports of Russian grain to curb the Kremlin’s revenues and prevent those shipments from destabilizing the region’s farm sector.

The tariffs, which also apply to Belarusian grain, will be in place from July 1, EU trade chief Valdis Dombrovskis said on X. EU ministers also made the decision to tackle illegal Russian exports of stolen Ukraine grain into EU markets, he said.

“The regulation increases duties on cereals, oilseeds and derived products from Russia and Belarus to a point that will in practice halt imports of these products,” the EU said in a statement on Thursday.

Russia exported 4.2 million tons of grain and oilseeds to the bloc last year, but that amount is a small portion of the EU’s overall imports.

 

China Turns to Exporting Livestock Feed on Weak Domestic Demand

• Local soybean meal prices are hovering around three-year lows
• Heavy rains in South America could underpin soybean imports

China is sending record quantities of soybean meal abroad, as a shrinking number of pigs and weak demand for pork force processors to export their surplus animal feed.

The unusual sales are yet another sign of how China’s stuttering economy is curbing domestic consumption and upending trade flows. The nation dominates global agricultural markets as an importer, with a lot of activity centered around feeding its enormous hog herd and putting enough pork on the table for hundreds of millions of households.

To that end, China relies on vast amounts of soybeans from South America and the US, which are crushed into meal for livestock and oil for cooking. But cash-strapped shoppers aren’t spending like they used to, and farmers have reduced their herds because prices are too low.

That’s left local soymeal prices hovering around three-year lows. Exports, meanwhile, climbed to almost 600,000 tons in the first four months of 2024, which is nearly five times the level of the previous year. Destinations include nearby Japan but also far-flung countries like the UK.

Still, China’s emergence will only put a little dent in demand for soymeal from the top South American exporters. Both Argentina and Brazil shipped more than 20 million tons last year.

As such, whether Chinese exports can stay at current levels depends heavily on both soymeal prices and soybean supplies in those countries, as well as the impact of fewer pigs in China.

The nation’s soybean imports typically climb in the middle of the year. In addition, Chinese crushers will be looking at the affects of heavy rains on the South American crop, as well as rising tensions with the US, as reasons to keep purchases elevated and create a buffer in case supplies dwindle later in the year.

 

Chinese Ownership of U.S. Farmland Low, Says Study

Concerns about China aggressively buying U.S. farmland have been overstated, according to a new report from Cornell University. Assistant professor Wendong Zhang reviewed over 40,000 foreign investments through 2020 and determined that China and other countries deemed as an “adversary” own just 1% of the roughly 40 million acres of foreign-owned farmland. “There is definitely grounds for more scrutiny and more concern,” says Zhang. “The share of foreign-owned land has increased significantly over the last 20 years, but still the overall share is fairly low.” According to USDA data, foreign individuals and entities reported holding an interest in over 43.4 million acres of U.S. agricultural land as of December 31, 2022. This is 3.4% of all privately held U.S. agricultural land and nearly 2% of all land in the United States, according to the USDA.

 

Ukraine may start 2024 grain, oilseed harvest in a week, analyst says

The Ukrainian winter crop harvest for 2024, including rapeseed, may start in a week in southern regions, analyst ASAP Agri said on Thursday.

The consultancy cited Ukrainian scientists as saying that this year’s harvesting campaign could start two weeks earlier than usual. Ukraine traditionally starts its grain harvesting in the second half of June.

 

Monsoon Arrives in India’s Kerala Two Days Earlier Than Normal

The southwest monsoon, which waters almost half of India’s farmland, reached the country’s southern coast in Kerala on Thursday, according to the India Meteorological Department.

• The monsoon has also advanced into most parts of the country’s northeastern region
• The department had predicted that the June-September rainy season will start on May 31
  • NOTE: The monsoon typically reaches the southern state on June 1
• NOTE: Monsoon Onset Likely Over India’s Kerala in Next 24 Hours: IMD

 

Bunge Agrees to Buy Stake in Brazil Soybean Terminal

A consortium including Bunge Global SA has agreed to buy railway operator Rumo SA’s stake in a grain terminal at Brazil’s largest port, a move set to expand the US agribusiness giant’s footprint in the world’s largest soybean supplier.

Under the deal terms, Bunge and Zen-Noh Grain Corp. will pay 600 million reais ($115 million) for Rumo’s 50% interest in Terminal XXXIX at the port of Santos, Brazil’s largest, Rumo said in a filing. The remaining stake in the facility is owned by local soybean trader Caramuru Alimentos SA.

An outsized presence in Brazil has fueled Bunge’s profits over the past few years as the company benefited from a rapid increase in the South American nation’s soybean and corn supplies. The transaction with Rumo, which is still pending approval, will give Bunge and Zen—Noh “increased logistical flexibility in an important export corridor,” Bunge said in an emailed statement.

Terminal XXXIX has the capacity to store 135,000 metric tons of grain and plans to almost double that amount, according to its latest financial report.

Rumo’s move comes amid a focus on financial discipline and will allow the company to focus on ongoing growth projects, Rumo said in a statement.

 

Brazil Fertilizers Stable to Firm as Soybean Demand Persists

Fertilizer prices in Brazil were steady for potash and higher for urea, ammonium sulfate and phosphates in an active buying period, with sellers focused primarily on potash and phosphates for soybean demand. Nitrogen increases were fueled by firming international prices in late May.

 

Fertilizer Prices Mixed as Market Shifts to Seasonally Slower 2Q

Prices for ammonia were down at Tampa and in the US Midwest as spring demand slows. New Orleans urea was also lower, while urea prices continued to climb in several international markets. Global nitrogen and phosphate imports are sluggish, while potash imports are surging in year-to-date trade.

 

 

 

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