TOP HEADLINES
Storms hit Australia’s wheat harvest
Heavy rain sweeping through southeastern Australia has damaged wheat crops, potentially shrinking production by more than 100,000 tons and turning up to 1 million tons of milling wheat into lower-quality feed grain, analysts said.
Australia is one of the world’s largest wheat exporters and is more than halfway through this year’s harvest.
Baking heat and low rainfall earlier in the year cut forecast production to 25-28 million metric tons from about 40 million tons last year, but high quality was expected.
November has turned wetter, and in 24 hours between Tuesday and Wednesday more than 200 millimetres (7.9 inches) of rain fell in parts of New South Wales, and more than 80 millimetres in parts of Victoria, Australia’s weather bureau said.
The bureau said a severe weather warning remained in place for rain and damaging winds in parts of the southeast, where the harvest is in full swing.
Heavy rain stops large machinery from operating and crops left in fields can grow fungus or sprout.
“Farmers are parked up. You can’t harvest a paddock with sodden ground,” said Andrew Whitelaw at consultants Episode 3, adding that 50,000 to 130,000 tons of wheat could be lost and half a million tons downgraded to lower quality.
Ole Houe at IKON Commodities said as much as 100,000 tons could disappear and 1 million tons may be degraded from milling to feed wheat.
Rod Baker at Australian Crop Forecasters said that he was more optimistic, but that up to 50,000 tons could be lost and 500,000 tons shunted to feed quality.
All the analysts cautioned that estimates could change and depended on weather in the coming days.
“It’s really hard to quantify until we start getting harvest results in,” Baker said.
Although it hurts wheat, rain should boost Australian summer crops such as cotton and sorghum, analysts said.
“Before this rainfall, farmers in northern New South Wales and Queensland were really scratching their heads about whether to put in sorghum,” said Vitor Pistoia at Rabobank. “Now they have more confidence.”
FUTURES & WEATHER
Wheat prices overnight are up 1 in SRW, up 3 3/4 in HRW, up 1/2 in HRS; Corn is down 1; Soybeans down 3 1/2; Soymeal down $2.50; Soyoil down 0.41.
For the week so far wheat prices are down 4 1/4 in SRW, up 10 in HRW, down 3/4 in HRS; Corn is down 10; Soybeans up 12 1/4; Soymeal down $6.10; Soyoil up 2.24.
For the month to date wheat prices are down 12 1/4 in SRW, down 19 3/4 in HRW, down 14 3/4 in HRS; Corn is down 21; Soybeans up 31 1/2; Soymeal up $10.00; Soyoil up 1.70.
Year-To-Date nearby futures are down 31.3% in SRW, down 30.4% in HRW, down 26.7% in HRS; Corn is down 33.7%; Soybeans down 11.6%; Soymeal down 6.5%; Soyoil down 17.0%.
Chinese Ag futures (JAN 24) Soybeans up 17 yuan; Soymeal up 11; Soyoil up 2; Palm oil down 78; Corn down 7 — Malaysian Palm is down 25. Malaysian palm oil prices overnight were down 25 ringgit (-0.64%) at 3872.
There were changes in registrations (-43 HRW Wheat). Registration total: 2,950 SRW Wheat contracts; 522 Oats; 4 Corn; 596 Soybeans; 62 Soyoil; 0 Soymeal; 357 HRW Wheat.
Preliminary changes in futures Open Interest as of November 28 were: SRW Wheat down 16,388 contracts, HRW Wheat down 4,849, Corn down 51,592, Soybeans down 369, Soymeal down 7,837, Soyoil down 7,862.
Brazil: Scattered showers continue in central Brazil, but at a reduced coverage and intensity thanks to El Nino. Forecasts have these showers picking up again this weekend as a front moves into the region, beneficial for soybean development. Southern Brazil continues to see too much rain for developing corn and soybeans, especially in Parana. But the southern state of Rio Grande do Sul did see a break over the weekend and precipitation looks more limited here for the week. Any break would be beneficial to help soils drain. A front moving through this weekend could bring some heavier rain, though.
Argentina: A drier stretch continued over the weekend with little or no rainfall for the last week. However, a front will go through with scattered showers Tuesday and Wednesday and another follows closely behind it for Thursday and Friday, bringing good rainfall to much of the country’s growing regions. Additional showers may continue in some areas over the weekend and next week as well. Overall, conditions are mostly favorable for corn and soybean planting and development.
Australia: Scattered showers continue over eastern areas this week, helping to ease extremely dry conditions in a lot of this part of the country. It is too late for wheat and canola, which is delaying harvest and could cause quality issues instead, but will help developing cotton and sorghum. Western areas continue to be too dry with little precipitation forecast for the next week.
Northern Plains: It will largely be dry this week as clippers pass off to the north and any stronger storms will pass by to the south. One of these clippers may make it through the region with some light showers early next week. Temperatures will be warmer compared to normal for the next couple of weeks.
Central/Southern Plains: Temperatures dropped over the snow that fell this weekend, but temperatures moderating this week will go above normal this weekend, so the snow will not last long. The melting snow should build at least a little soil moisture for wheat. Additional storm systems will pass through the region late this week, weekend, and possibly next week, favoring the elimination of drought and building of soil moisture.
Midwest: Colder air pushed into the region this weekend, creating lake-effect snow through Wednesday, but temperatures will then moderate and go above normal this coming weekend. Scattered showers will move through with a system late this week and with another this weekend into early next week, but mostly as rain, though some snow may mix in for a few areas. The precipitation will help to build soil moisture and ease drought that remains.
The player sheet for Nov. 28 had funds: net buyers of 4,500 contracts of SRW wheat, sellers of 1,000 corn, buyers of 4,500 soybeans, sellers of 4,000 soymeal, and buyers of 4,500 soyoil.
TENDERS
- SOYBEAN SALES: The U.S. Department of Agriculture on Tuesday confirmed private sales of 123,300 metric tons of U.S. soybeans to unknown destinations for delivery in the 2023/24 marketing year that began Sept. 1.
- CORN PURCHASE: Leading South Korean animal feed maker Nonghyup Feed Inc (NOFI) bought an estimated 132,000 metric tons of animal feed corn in an international tender for up to 138,000 tons on Tuesday
- CORN PURCHASE: South Korea’s Major Feedmill Group (MFG) has purchased an estimated 68,000 metric tons of animal feed corn in a private deal on Tuesday without issuing an international tender
- CORN PURCHASE: The Korea Feed Association (KFA) Incheon section purchased an estimated 65,000 metric tons of animal feed corn in an international tender which closed on Wednesday
- NO PURCHASE IN CORN TENDER: The Korea Feed Association (KFA) is believed to have rejected all offers and made no purchase in an international tender on Tuesday to buy up to 69,000 metric tons of animal feed corn
- NO PURCHASE IN WHEAT TENDER: Jordan’s state grain buyer is believed to have made no purchase in an international tender to buy 120,000 metric tons of milling wheat which closed on Tuesday
- MILLING WHEAT PURCHASE: A group of South Korean flour mills bought an estimated 95,000 metric tons of milling wheat to be sourced from the United States and Canada in an international tender on Tuesday
- WHEAT TENDER: The Taiwan Flour Millers’ Association has issued an international tender to purchase up to 109,325 metric tons of grade 1 milling wheat to be sourced from the United States.
PENDING TENDERS
- SUGAR TENDER: Egypt’s General Authority for Supply Commodities announced a tender to import 50,000 tonnes of raw sugar and/or 50,000 tonnes of refined white sugar, all from any origin, on behalf of the Egyptian Sugar & Integrated Industries Company. The deadline for offers was Nov. 25.
- NON-GMO SOYBEAN RE-ISSUE: South Korea’s state-backed Agro-Fisheries & Food Trade Corp. has cancelled an international tender to purchase around 50,000 metric tons of food-quality soybeans free of genetically-modified organisms (GMOs) which closed on Nov. 27 and issued a new tender for the same volume
- FEED BARLEY TENDER: Jordan’s state grain buyer issued an international tender to purchase up to 120,000 metric tons of animal feed barley
- NON-GMO SOYBEAN TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued international tenders to purchase around 20,000 metric tons of food-quality soybeans free of genetically-modified organisms (GMOs)
- MILLING WHEAT TENDER: Bangladesh’s state grains buyer has issued an international tender to purchase 50,000 metric tons of milling wheat.
- WHEAT TENDER: A government agency in Pakistan has issued an international tender to purchase and import 110,000 metric tons of wheat.
TODAY
ETHANOL: US Weekly Production Survey Before EIA Report
Output and stockpile projections for the week ending Nov. 24 are based on seven analyst estimates compiled by Bloomberg.
- Production seen higher than last week at 1.031m b/d
- Stockpile avg est. 21.575m bbl vs 21.652m a week ago
Brazil Has Already Gone Through Worst Moment of El Nino: MB Agro
The rapid weakening of the El Nino climate phenomenon should be noted and Brazilian agricultural harvests “have everything to be relatively good,” MB Agro consultancy partner Alexandre Mendonça de Barros said during an event in Sao Paulo.
- Harvests may be smaller compared to the previous year, but nothing disastrous
- Soybean production could be between 148 million and 155 million tons versus 165 million in the previous year
- Reduction “is not absurd,” the scenario has improved given the challenging start of the harvest
- Concern about second harvest corn is greater, with a potential reduction of 15 million tons versus the previous year
- Resumption of agricultural production in Argentina avoids cost pressure on animal feed
- Cycle of high supply of Brazilian cattle is expected to continue next year
- Cycle in the US remains very tight in supply
Russia Wheat Harvest to Drop in 2024 on Lower Yields: SovEcon
Russia’s 2024 wheat harvest is forecast to drop to 89.8 million metric tons from 91.5 million tons this year, according to research firm SovEcon.
- The decline is because crop conditions are expected to worsen, lowering yields
- Farmers will be cutting costs as margins tighten, contributing to lower output
- However, larger growing areas and high carryover stocks will keep Russia a key exporter
- A harvest of 89.8m million tons would remain above the five-year average
MGEX Spring Wheat Stocks Down 1.1% From Year Ago: Nov. 26
Stocks of hard spring wheat stored in Minnesota and Wisconsin warehouses fell y/y to 20.474m bushels in the week ending Nov. 26, according to the Minneapolis Grain Exchange’s weekly report.
- Compared to the previous week, stockpiles rose by 196k bu
- Stockpiles in Duluth/Superior warehouses up 343k bu from the previous week
EU 2023/24 soybean imports 4.44 mln T by Nov 26, rapeseed 2.11 mln T
European Union soybean imports so far in the 2023/24 season that started in July had reached 4.44 million metric tons by Nov. 26, compared with 4.35 million tons a year earlier, data published by the European Commission showed on Tuesday.
EU rapeseed imports in the same period totalled 2.11 million tons, against 3.07 million tons a year earlier.
Soymeal imports totalled 5.96 million tons against 6.69 million tons a year earlier, while palm oil imports stood at 1.41 million tons versus 1.52 million tons a year earlier.
However, the Commission said import data for Italy has been missing since Nov. 10.
EU Soft-Wheat Exports Fall 18% Y/y in Season Through Nov. 26
The European Union’s soft-wheat exports in the season that began July 1 were 12m tons as of Nov. 26, compared with 14.7m tons in a similar period a year earlier, the European Commission said on its website.
- NOTE: The report hasn’t included export data for Bulgaria since mid-September nor Italy import and export figures since Nov. 10
- Leading destinations include Morocco, at 1.83m tons; Nigeria, 1.24m tons; and Egypt, with 972k tons
- Barley exports were at 2.77m tons, down 1% y/y
- Corn imports were at 7.09m tons, down 42% y/y
Morocco Targets 2.5M Tons of Wheat Imports in Jan.-April: ONICL
Importers will get a state subsidy for imports of up to 2.5m tons of soft wheat from January-April 2024, according to a statement from the state controlled grains regulator ONICL.
ONICL is renewing for four months a compensation system that covers the difference between the import price and ONICL’s reference price
India Allots $142 Billion for Free Grains to 800 Million People
- Beneficiaries to get 5 kilograms of free wheat or rice a month
- The program will be extended for five years from January
India’s cabinet on Wednesday approved a proposal to spend 11.8 trillion rupees ($142 billion) to extend a free food program for about 800 million beneficiaries for five years.
The new plan will come into effect from Jan. 1, Information and Broadcasting Minister Anurag Thakur told reporters at a briefing in New Delhi.
The development comes weeks after Prime Minister Narendra Modi vowed to extend the program in a bid to shield consumers from high food prices. The move ahead of polls in five key states this month and national elections next year, when Modi will seek a third five-year term, could provide some political mileage to the government.
Retail prices of rice have jumped 15% from a year earlier in Delhi, while wheat is about 7% costlier, according to data compiled by the food ministry.
Under the free food program, which started for the first time during the pandemic, about 800 million Indian citizens get 5 kilograms (11 pounds) of wheat or rice every month. The plan has been very popular and is widely credited for helping the ruling Bharatiya Janata Party win elections in some states last year.
The government has already restricted exports of wheat, rice and sugar to maintain local supplies of essential food items. To woo voters, the Modi administration has also increased subsidies on cooking gas and fertilizers. It’s considering some other support measures such as increased cash handouts to small farmers and cheaper home loans.
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