Global Ag News for May 8.24

TOP HEADLINES

Worst Drought in Four Decades Cuts Zimbabwean Corn Crop by 72%

• Final estimate by government sees corn crop at 634,699 tons
• Zimbabwe consumes more than 2 million tons of corn annually

Corn output in Zimbabwe will drop by almost three-quarters this year as the nation experiences its worst drought in four decades, according to the government.

Output of the staple grain in the 2023-24 season that ends May 31 is estimated at 634,699 tons, down 72% from last year, according to a final crop assessment seen by Bloomberg and confirmed by the Agriculture Ministry. That compares with a previous forecast of 868,237 tons.

“Statistically, the season had the latest and driest start to a summer season in 40 years,” the government said in its Second Round of Crops, Livestock and Fisheries Assessment report.

The El Niño weather phenomenon has triggered a dry spell in southern Africa that’s slashed South Africa’s corn crop by at least a fifth and led countries including Malawi, Zambia and Zimbabwe to declare states of national disaster because of crop failures. Zimbabwean grain millers plan to import at least 1.4 million tons of corn by July to address the shortfall.

FUTURES & WEATHER

Wheat prices overnight are down 3 in SRW, down 6 in HRW, down 4 in HRS; Corn is down 1 1/4; Soybeans down 1 1/4; Soymeal up $2.30; Soyoil down 0.52.

For the week so far wheat prices are up 17 1/4 in SRW, up 7 1/2 in HRW, up 1/2 in HRS; Corn is up 5 1/2; Soybeans up 30 1/4; Soymeal up $13.30; Soyoil up 0.90.

For the month to date wheat prices are up 36 1/2 in SRW, up 22 3/4 in HRW, up 10 3/4 in HRS; Corn is up 19; Soybeans up 82 1/4; Soymeal up $33.60; Soyoil up 0.97.

Year-To-Date nearby futures are down 0.5% in SRW, up 4.9% in HRW, down 2.1% in HRS; Corn is down 4.1%; Soybeans down 4.7%; Soymeal down 2.2%; Soyoil down 8.3%.

Chinese Ag futures (JUL 24) Soybeans up 15 yuan; Soymeal up 31; Soyoil up 14; Palm oil up 26; Corn up 15 — Malaysian Palm is down 54.  Malaysian palm oil prices overnight were down 54 ringgit (-1.37%) at 3876.

There were changes in registrations (31 Soyoil). Registration total: 1,479 SRW Wheat contracts; 9 Oats; 450 Corn; 469 Soybeans; 2,589 Soyoil; 226 Soymeal; 0 HRW Wheat.

Preliminary changes in futures Open Interest as of May 7 were: SRW Wheat up 2,293 contracts, HRW Wheat up 851, Corn up 5,871, Soybeans down 3,678, Soymeal down 5,296, Soyoil down 2,266.

Northern Plains: A system is settled in the region and is bringing rainfall to most of the region through Wednesday, including some heavy amounts for the driest areas in eastern Montana. The rain will keep any fieldwork slow. Additional fronts will follow afterward through next week, but contain few showers as planting windows will open back up again. Temperatures will waffle around as these fronts come and go.

Central/Southern Plains: Some isolated showers will pop up for the rest of the week, but many areas will remain dry, which will help open up some planting windows. Wheat conditions in the southwest still are not great, even after some decent rainfall over the weekend. But the southern storm track may be more active starting this weekend that continues through next week, which may promote some better rainfall chances there.

Midwest: Recent rainfall has been too heavy in a lot of areas, slowing down or halting planting. This week stays active with a strong front moving through Tuesday with a line of showers and thunderstorms that may turn severe over eastern areas. Another system goes through for Wednesday and Thursday that may have severe weather as well. It will also bring some colder air into the region, but frosts are not expected. Temperatures will likely waffle a bit through next week as the pattern remains active with fronts and systems. However, these systems are less likely to contain widespread heavy rain as they come from the northwest.

Delta: A couple of fronts will move through this week with more chances for widespread showers and thunderstorms and potential for severe weather. Another will go through early next week as the pattern remains active across the country. The active weather will ensure good soil moisture for the next week, but may be too wet in some areas for planting. The region continues to see good planting progress in the face of the wetter conditions, however.

Canadian Prairies: A system moved into the region on Monday and is bringing areas of heavy and widespread rainfall through Wednesday to most of the region outside of northwestern Alberta which will be drier. Heavy rain is falling in eastern Alberta and western Saskatchewan, which is still under significant drought and could use it. The rain will produce significant planting delays, shortening the windows for this year’s crop. The good news is that this may be the last system with widespread heavy rain, as the storm track will be more from the northwest for a while. The rain should be more favorable than detrimental.

Brazil: Recent heavy rain over Rio Grande do Sul has produced catastrophic flooding over the last week. The front responsible for the incredible rain has moved south, but will shift back north again on Wednesday and likely waffle around the state yet again into next week. Flooding, mudslides and crop damage are all putting a damper on what was a pretty good crop season and making for massive delays in winter wheat planting. Safrinha corn in the central will continue to be very dry and hot as well. Southern growing areas may catch some of the rain from the front later next week.

Argentina: A front shifted back south into the region over the weekend, but much of the heavy rain has been east into Uruguay. A system will shove the front back north into Paraguay and Brazil on Wednesday. Colder and drier conditions will follow that. That may be able to increase corn and soybean harvest, but may mean widespread frosts for any immature crops. The drier pattern lasts through at least next week.

The player sheet for 5/7 had funds: net sellers of 2,500 contracts of SRW wheat, sellers of 1,000 corn, sellers of 2,000 soybeans, sellers of 2,000 soymeal, and buyers of 2,000 soyoil.

TENDERS

• CORN PURCHASE: A South Korean animal feed producer purchased an estimated 68,000 metric tons of animal feed corn to be sourced from South America in an international tender.
• WHEAT TENDER PASSED: Jordan’s state grain buyer is believed to have made no purchase in an international tender to buy 120,000 tons of milling wheat.
• WHEAT TENDER: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), is seeking wheat in an international tender. The deadline for offers is May 8. Offers should be submitted on a free-on-board (FOB) basis for shipment between June 7-17 and/or June 18-28. Suppliers were asked to submit offers for payment via 270-day letters of credit.
• VEGETABLE OILS TENDER: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), said it was seeking vegetable oils in an international purchasing tender for arrival June 10-25 and/or June 26- July 10. GASC said traders should submit bids for payment via 180-day letters of credit. The deadline for offers is May 9.
• WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) sought to buy a total of 114,077 tons of food-quality wheat from the United States, Canada and Australia in a regular tender that will close late on May 9.
• CORN TENDER: Taiwan’s MFIG purchasing group bought about 65,000 metric tons of animal feed corn expected to be sourced from Brazil in an international tender on Wednesday

 

 

TODAY

ETHANOL: US Weekly Production Survey Before EIA Report

Output and stockpile projections for the week ending May 3 are based on seven analyst estimates compiled by Bloomberg.

• Production seen slightly higher than last week at 988k b/d
• Stockpile avg est. 25.311m bbl vs 25.488m a week ago
• Would be the fifth consecutive w/w decline

Argentina’s oilseed union to join strike protesting proposed labor reforms

Argentina’s oilseed union SOEA announced on Tuesday it will join a national strike planned for Thursday alongside other unions who are set to protest proposed labor reforms backed by libertarian President Javier Milei.

Crop tour projects Oklahoma winter wheat crop at 89.161 million bushels

A group of Oklahoma crop experts on Tuesday projected Oklahoma’s 2024 winter wheat harvest at 89.161 million bushels, with an average yield of 33.68 bushels per acre, following an annual tour of the state, said Mike Schulte, executive director of the Oklahoma Wheat Commission.

The estimates were based on field assessments conducted by Oklahoma State University Extension educators as well as private crop consultants and area agronomists, said Schulte.

Brazil floods hit food silos, disrupt routes to major grains port

Heavy flooding in southern Brazil has hit food storage facilities in lower areas while hampering the shipping of grains to port, jeopardizing the nation’s exports and wreaking havoc to the economy of Rio Grande do Sul state, a large soy, rice, wheat and meat producer.

Anec, an association representing global grain exporters, said on Tuesday access to the port of Rio Grande had been disrupted as a local rail line stopped operating. The group, which represents firms like Cargill and Bunge BG.N, also cited road blockades forcing grain trucks to travel an extra 400 kilometers (248.55 miles) through alternative routes to reach the port, increasing freight costs.

The unprecedented climate event, which left entire towns under water and destroyed critical infrastructure in the capital and rural areas, also killed livestock and caught farmers in the final stages of the corn and soy harvests, clouding the outlook for national grain production in 2023/2024.

The escalating crisis also led competing meatpackers to join forces to circumvent logistical hurdles brought about by the heavy downpours, which disrupted water and electricity services to 1.4 million people, the state’s Civil Defense agency said.

According to a local meat lobby, the meat companies began sharing resources to speed up delivery of feed and water supplies to chicken and hog farms, where an unspecified number of animals have perished due to the devastating floods.

Paulo Pires, president of Rio Grande do Sul farm lobby Fecoagro, said it was too early to know how much grain production had been lost due to the flooding that hit silos around river areas.

“They are large silos, so it is significant, but it is really difficult to quantify this,” Pires said by telephone.

Gedeao Pereira, president of agriculture lobby Farsul, confirmed isolated cases of food silos being hit but floods, but said they could dry in time and hence losses would be minimized. Pereira said he is more concerned with crops like soy which farmers have yet to harvest in Rio Grande do Sul, especially in center and southern areas.

Earlier on Tuesday, the state’s port authority said Rio Grande was “operating normally” as its terminals had not been affected by the rise in the level of the Laguna dos Patos lagoon.

At around 8 a.m. the current was ebbing in the access channel Rio Grande port, allowing water to flow at a speed of about three knots, the equivalent of 5.55 kilometers per hour, the authority noted. The tide table indicated a level of 90 cm above normal.

Cargonave, a shipping agency, confirmed slower grain arrivals at Rio Grande port, which last year had exported 10.4 million tons of soybeans and 3.6 million tons of soymeal.

Brazil Floods Lift Grain Shipment Costs to Rio Grande Port

Rains and floods are disrupting roads and railways used to transport grains to southern Brazil’s Rio Grande port. industry group Anec says in emailed messages

• Grains trucks forced to travel as much as 400 kilometers (248.6 miles) more on alternative roads to reach the port: Anec
  • That’s creating additional costs to freight, group says
  • A railway to the port isn’t operating due to floods: Anec
  • Grains and products shipments haven’t been delayed so far, though expected rains could postpone exports: Anec
• Rio Grande port is still operating normally, according to port authority Portos RS
  • Chicken and pork stored at port are still being exported via containers
  • Interruptions at port aren’t being ruled out given that more rains are expected in the next days, says port authority’s Cristiano Klinger
  • Water level at port is 90 cm above normal

Brazil’s BRF Says All Five Plants In Rio Grande Do Sul Were Operating

• BRAZIL’S BRF SAYS ALL FIVE PLANTS IN RIO GRANDE DO SUL WERE OPERATING AS OF TUESDAY AFTER RAINS DISRUPTED MEAT PRODUCTION IN THE STATE
• BRF CONFIRMS DEATH OF LIVESTOCK OF PARTNER FARMERS DUE TO HEAVY FLOODING IN SOUTHERN BRAZIL, BUT HAS YET TO QUANTIFY LOSSES
• BRF SAYS ONE OUT OF FOUR FEED FACTORIES IT OWNS REMAINS OFFLINE IN RIO GRANDE DO SUL STATE AFTER HEAVY RAINS

Canada March 31 Wheat Stocks Fell to 11.76M Tons: StatsCan

Statistics Canada in Ottawa releases principal field crops report for stocks as of March 31.

• Total wheat stocks fell by 15.4% y/y to 11.76m
• Durum wheat fell to 1.65m tons vs 2.16m
• Canola rose to 8.26m tons vs. 7.03m in the same period last year

Brazil’s prepares measure to allow import of 1 mln tonnes of rice after devastating rains

Brazilian government is preparing a temporary measure to authorize the national crop agency (Conab) to import 1 million tonnes of rice to avoid an impact on prices, since many crops in Rio Grande do Sul have been hit by deadly floods over recent days.

“Conab is going to look for rice in the international market,” said Agriculture Minister Carlos Favaro in an interview with journalists after a meeting in capital Brasilia.

Palm Oil Seen Rising Less Than Expected by Mistry on Soft Demand

Palm oil may climb as high as 4,300 ringgit ($906) a ton by the end of June, below earlier expectations, on continued “lukewarm demand,” according to veteran trader Dorab Mistry.

• Benchmark prices in Kuala Lumpur are forecast to trade between 3,700 and 4,300 ringgit from now until June, said Mistry, a director at Godrej International Ltd., in slides prepared for a conference in Dubai Wednesday
  • NOTE: Mistry’s latest forecast compares with his March prediction of prices between 3,900 and 4,500 ringgit from March until June; futures traded at 3,884 ringgit by 5:15pm Wednesday
  • NOTE: Palm Oil Swings With Focus on Adverse Weather and High Prices
• Reasons for softer demand include a stronger US dollar, a weak Chinese economy, pressure from sunseed and sunflower oil, and a continued shortage of the US currency in major markets like Pakistan, Bangladesh, Nigeria, Iran and Egypt
• “The trajectory of palm prices will depend on production” and weather during soybean planting in North America
  • May will be the tightest month for palm oil supply
• Palm oil production in Malaysia will likely be flat in 2024, while output will be 1 million tons lower in Indonesia
• Soybean oil futures in Chicago will continue to struggle as cheaper substitutes are used for biofuels
• Agricultural commodity futures may dip and surge but one cannot be bearish given a “capricious climate”
• World vegetable oil supply in 2023-24 is seen rising by 4.1m tons vs an increase in demand of 6m tons

China To Release 30,000 Metric Tons Of Frozen Pork From State Reserves On May 9

CHINA TO RELEASE 30,000 METRIC TONS OF FROZEN PORK FROM STATE RESERVES ON MAY 9

Worst Drought in Four Decades Cuts Zimbabwean Corn Crop by 72%

• Final estimate by government sees corn crop at 634,699 tons
• Zimbabwe consumes more than 2 million tons of corn annually

Corn output in Zimbabwe will drop by almost three-quarters this year as the nation experiences its worst drought in four decades, according to the government.

Output of the staple grain in the 2023-24 season that ends May 31 is estimated at 634,699 tons, down 72% from last year, according to a final crop assessment seen by Bloomberg and confirmed by the Agriculture Ministry. That compares with a previous forecast of 868,237 tons.

“Statistically, the season had the latest and driest start to a summer season in 40 years,” the government said in its Second Round of Crops, Livestock and Fisheries Assessment report.

The El Niño weather phenomenon has triggered a dry spell in southern Africa that’s slashed South Africa’s corn crop by at least a fifth and led countries including Malawi, Zambia and Zimbabwe to declare states of national disaster because of crop failures. Zimbabwean grain millers plan to import at least 1.4 million tons of corn by July to address the shortfall.

 

 

Interested in more futures markets?  Explore our Market Dashboards here.