Global Ag News for Oct 1.24

TOP HEADLINES

Rail Grain Exports to Mexico to Resume After Halt, BNSF Says

BNSF Railway Co. will allow new grain shipments to Mexico after a shortage of capacity and a backlog of loaded trains prompted rail operators to halt the issuance of permits.

Authorizations of grain shuttles to Mexico will be issued again starting Oct. 1, with distribution based on the “fluidity of the pipeline,” BNSF said in an emailed statement.

The move is a much-needed relief to US crop exporters as farmers move forward with a bumper harvest. Rail grain transportation to Mexico — the largest destination for US corn exports — has been constrained by bottlenecks on Mexican railroad Ferromex, which interchanges with lines operated by BNSF and Union Pacific Railroad Co.

The development also comes as US dockworkers could begin a strike Tuesday that threatens to disrupt US grains exports, upending shipments to China and other key destinations.

BNSF stopped issuing any permits for shuttle trains destined to Mexico on Aug. 21, with Union Pacific taking a similar step on Sept. 18.  Union Pacific didn’t immediately respond to a request for comment.

 

FUTURES & WEATHER

Wheat prices overnight are down 1/2 in SRW, up 1/4 in HRW, up 1 1/2 in HRS; Corn is down 1 1/4; Soybeans down 8 1/2; Soymeal down $0.10; Soyoil down 0.65.

For the week so far wheat prices are up 3 1/4 in SRW, up 7 1/4 in HRW, up 15 in HRS; Corn is up 5 1/4; Soybeans down 17 1/4; Soymeal down $2.70; Soyoil up 0.30.

For the month to date wheat prices are down 1/2 in SRW, up 18 3/4 in HRW, up 22 3/4 in HRS; Corn is up 22 1/2; Soybeans down 8 1/2; Soymeal up $28.50; Soyoil down 0.65.

Year-To-Date nearby futures are down 7.1% in SRW, down 9.0% in HRW, down 13.9% in HRS; Corn is down 10.2%; Soybeans down 18.9%; Soymeal down 11.1%; Soyoil down 9.1%.

Malaysian palm oil prices overnight were up 14 ringgit (+0.35%) at 4009.

China markets are closed for holiday.

There were no changes in registrations. Registration total: 220 SRW Wheat contracts; 0 Oats; 126 Corn; 232 Soybeans; 352 Soyoil; 126 Soymeal; 5 HRW Wheat.

Preliminary changes in futures Open Interest as of September 30 were: SRW Wheat up 1,530 contracts, HRW Wheat down 1,081, Corn up 10,146, Soybeans down 6,170, Soymeal up 6,288, Soyoil up 2,631.

 

Brazil: Rio Grande do Sul and Parana:  Scattered showers Tuesday-Thursday. Mostly dry Friday. Temperatures above normal Tuesday, near to above normal Wednesday, near to below normal Thursday, near normal Friday. Mato Grosso, MGDS and southern Goias:  Isolated showers through Friday. Temperatures above normal through Friday. 

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

Northern Plains: Mostly dry through Friday. Temperatures near to above normal through Friday. Outlook: Mostly dry Saturday-Wednesday. Temperatures above normal Saturday-Wednesday. 

Central/Southern Plains: Mostly dry through Friday. Temperatures near to above normal Tuesday, above normal Wednesday-Friday. Outlook: Mostly dry Saturday-Wednesday. Temperatures above normal Saturday-Wednesday. 

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

 

The player sheet for Sept. 30 had funds: net buyers of 3,000 contracts of SRW wheat, buyers of 18,500 corn, buyers of 1,500 soybeans, buyers of 2,000 soymeal, and buyers of 4,000 soyoil.

TENDERS

• SOYBEAN SALE: The U.S. Department of Agriculture confirmed private sales of 116,000 metric tons of U.S. soybeans to China for shipment in the 2024/25 marketing year.

 PENDING TENDERS

• WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy up to 120,000 metric tons of milling wheat which can be sourced from optional origins.
• BARLEY TENDER: Jordan’s state grains buyer has issued an international tender to purchase up to 120,000 metric tons of animal feed barley with an Oct. 2 deadline.
• WHEAT TENDER: A group of importers in Thailand has issued an international tender to purchase an estimated 180,000 metric tons of animal feed wheat

 

 

 

TODAY

US Inspected 1.14m Tons of Corn for Export, 676k of Soybeans

In week ending Sept. 26, according to the USDA’s weekly inspections report.

• Soybeans: 676k tons vs 499k the previous wk, 678k a yr ago
• Wheat: 537k tons vs 723k the previous wk, 429k a yr ago
• Corn: 1,140k tons vs 1,150k the previous wk, 670k a yr ago

 

US Corn, Soybean, Wheat Inspections by Country: Sept. 26

Following is a summary of USDA inspections for week ending Sept. 26 of corn, soybeans and wheat for export, from the Grain Inspection, Packers and Stockyards Administration, known as GIPSA.

• Soybeans for China-bound shipments made up 200k tons of the 676k total inspected
• Mexico was the top destination for corn inspections, Philippines led in wheat

 

Brazil’s soybean planting hits 2% of expected area, AgRural says

Brazil’s soybean planting for the 2024/25 season as of last Thursday reached 2% of the total expected area, agribusiness consultancy AgRural said on Monday, up from 0.9% the week before but still below last year’s 5.2%.

Parana state has been leading the way after some welcome rains in the second half of September, but hot weather and the lack of rainfall have been hampering work in the fields in other states, AgRural said in a statement.

 

Brazil C-S Summer Corn Planting at 31.4% as of Sept. 27: Safras

That compares with 36.6% a year earlier, and a five-year average of 31.3%, according to a report from consulting firm Safras & Mercado.

• Planting is 68.9% done in Rio Grande do Sul state, 50.3% in Santa Catarina and 30.8% in Parana
• In Sao Paulo, Mato Grosso do Sul, Goias/Distrito Federal, Minas Gerais and Mato Grosso planting hasn’t yet begun

 

Russia 2024 Wheat Crop Down 11% Y/Y, Corn 24% Lower: EU’s MARS

Russia’s wheat crop is forecast at 82.9 million tons this year due to weather extremes, the European Union’s Monitoring Agricultural Resources unit said Monday in a report.

• Compares with 93.6m tons in 2023
• Wheat forecast this year similar to its July estimate
  • “Hot, dry, and overly wet conditions made an end to several years of (near-)record-high yields of winter cereals and grain maize in Russia”
• Country’s corn crop is seen at 13.8m tons, down 24% y/y
  • Report cut yield estimate to 5.42ton/ha from 6.23 in July
  • “Colder-than-usual temperatures in May unfavourably slowed down initial development of grain maize,” while heat waves during summer also hit yields

 

Ukraine Wheat Exports Running Ahead of Last Year: UkrAgroConsult

Ukraine’s pace of wheat exports in the first three months of the new season are ahead of the previous two years, “mainly due to the stable operation of the sea corridor,” UkrAgroConsult analyst Maxym Kharchenko writes in a note.

• Still, shipments in Aug.-Sept. 2024 lag average pace of last 5 years due to lower carryover and export potential
  • Top wheat importers in July-Sept. were Spain, Indonesia, Vietnam, Egypt, Thailand: Kharchenko
• Ukraine already shipped about a third of its wheat export potential
• If current pace of exports continues, shipments may stop in March-April 2025
  • Farmers prefer to delay sales at the moment, but may increase them if prices rise in winter 2024/25
• About 20% of the winter wheat area forecast was sown as of Sept. 23, but pace of plantings is not high enough to hit the target of 5,187k ha.

 

WHEAT/CEPEA: Harvesting advances and demand is low; prices move down

As the 2024/25 harvesting advances in Brazil, more wheat batches have been offered in the spot market. As for the demand, players surveyed by Cepea indicate that some mills reduced processing activities due to high stocks and the low liquidity in the flour market. In this scenario, wheat prices are moving down in the domestic market.

According to data from Cepea, between September 20 and 27, the prices paid to wheat farmers (over-the-counter market) dropped 0.15% in Santa Catarina, 1.8% in Paraná and 2.6% in Rio Grande do Sul. In the wholesale market (deals between processors), quotations decreased 0.61% in Paraná, 1.7% in São Paulo, 1.2% in Santa Catarina and 0.9% in Rio Grande do Sul. Dollar quotations moved down 1.49% against Real in the same period, at BRL 5.437 on September 27.

In September, the monthly average of wheat prices in Paraná was BRL 1,482.91 per ton, for a decrease of 3.6% against August/24, but rising 39.1% in relation to that in September/23, in real terms (IGP-DI). In Rio Grande do Sul, the average was BRL 1,365.13/ton, 4.5% down in one month and +18.6% in one year. In São Paulo, prices averaged BRL 1.530.81/ton, -3.9% and +38% in the same comparisons. As for Santa Catarina, the average was BRL 1,503.81/ton in September, downing 0.3% compared to August, but moving up 22.4% against that in the same month last year.

Based on data from Conab (Brazil’s National Company for Food Supply), between September 16 and 20, the import parity price for the wheat from Argentina delivered to Paraná state was at USD 275.99/ton. Considering the average of the US dollar in that period, at BRL 5.4784, the wheat imported was sold at BRL 1,511.96/ton, while for the Brazilian wheat traded in Paraná, the average was at BRL 1,482.91/ton, according to data from Cepea. In Rio Grande do Sul, the price of the product from Argentina closed at USD 258.57/ton, which accounts for BRL 1,416.52/ton – against BRL 1,365.13/ton on the average of the state calculated by Cepea.

The harvesting continues progressing in Paraná. According to data from Seab/Deral, 32% of the production (equivalent to 1.2 million tons) in the state was lost because of the dry weather during the winter and frosts in the period close to the harvest. In spite of that, players surveyed by Cepea say that grains present good quality.

BYPRODUCTS – Comparing the period from September 20-27 with the previous (Sept. 16-20), values of wheat bran in bags rose 0.68% and 0.15% for the product in bulk.

 

US renewable diesel production capacity posts largest monthly decline on record

U.S. renewable diesel production capacity declined in July by the most since the industry began its rapid expansion three years ago, data from the Energy Information Administration showed on Monday.

Capacity to produce biomass-based renewable diesel and other biofuels, excluding biodiesel and ethanol, fell by about 299 million gallons per year from June to about 4.60 billion gallons a year in July, the second time it has declined since the EIA began keeping records in 2021.

The EIA did not immediately respond to a request seeking more inputs on what the decline is based on.

Well-established oil refiners and startups have made large bets on renewable diesel in recent years as government mandated consumption targets and subsidies lowering costs of production have encouraged investments in supply growth. However, output from new plants is starting to outpace demand, leading to a glut in the market.

Vertex Energy, one of the newest entrants in the U.S. renewable diesel industry, filed for Chapter 11 bankruptcy protection last week, just months after it paused output of the biofuel, citing macroeconomic weakness.

Demand for vegetable oils as feedstock for renewable diesel production, which include canola oil, corn oil and soybean oil, fell more than 5.6% from June to 1.168 billion pounds in July, the EIA data showed. Demand for the same feedstocks from facilities producing biodiesel, which is blended into petroleum-based fuel to lower emissions, rose 5.6% from June to 866 million pounds in July, according to the data. Demand for waste oils, fats and greases, such as tallow and used cooking oil, rose to 1.43 billion pounds in July from 1.38 billion pounds in June, the data showed.

Those consumption levels indicate biofuel producers are running their plants below capacity, said Zander Capozzola, vice president of renewable fuels at AEGIS Hedging.

At current capacity, renewable diesel plants could burn through at least 3.162 billion pounds of feedstocks per month, while biodiesel producers would consume another 1.288 billion, if they were running at full capacity, Capozzola said.

 

Helene shuts poultry plants, twists cotton crops in southeastern US

Hurricane Helene shut at least two poultry plants in Georgia and North Carolina and twisted cotton crops in South Carolina in blows to U.S. food and fiber production, company and agriculture officials said on Monday.

More than 100 deaths across a half-dozen states have been attributed to the powerful storm that slammed into Florida’s Big Bend region late on Thursday before cutting a destructive path through Georgia and into the Carolinas.

Wayne-Sanderson Farms, the nation’s third largest poultry producer, closed a Moultrie, Georgia, processing plant due to a loss of electrical power from downed transmission lines, company spokesman Frank Singleton said.

The complex processes 1.3 million chickens weekly and its timeline for resuming operations depends on Georgia Power GPJA.N crews restoring power, Singleton said. The company is providing fuel deliveries to local farms that also lost power, he said.

In South Carolina, many poultry operations are running on backup generators, said Eva Moore, spokesperson for the South Carolina Department of Agriculture. The state’s cotton crops took a big hit, she added.

“Open bolls have been knocked around, and plants are twisted,” Moore said. “This will make for a complicated harvest and may affect the grades of the cotton.”

Concerns over potential crop damage in key growing areas boosted ICE cotton futures.

In North Carolina, Smithfield Foods, the world’s largest pork processor, said transportation for its hog production operations was strained but the company did not suffer material disruptions.

A chicken plant near Morganton, North Carolina, is down, said Bob Ford, executive director of the North Carolina Poultry Federation. Still, the poultry industry was generally lucky because feed mills are operating and floods largely did not affect farms, he said.

For live chickens around Morganton, “they’re just going to get fatter” until the processing plant reopens, possibly on Wednesday, Ford said.

 

Russia, Pakistan Barter Lentils for Rice Amid Payment Struggles

A Russian company will export chickpeas and lentils in exchange for tangerines and rice from Pakistan amid difficulties in cross-border payments due to Western sanctions, Tass news service reported.

Under an agreement signed at the Pakistan-Russia Trade and Investment Forum in Moscow on Tuesday, Russia’s Astarta-Agrotrading will supply 20,000 tons of chickpeas while Pakistan’s Meskay & Femtee Trading Company will deliver the same quantity of rice, according to state-run Tass.

The Russian side also plans to supply 15,000 tons of chickpeas and 10,000 tons of lentils in exchange for 15,000 tons of tangerines and 10,000 tons of potatoes from Pakistan.

Russia is trying to find alternative ways to pay for imports and receive money for exports amid mounting US pressure on banks in countries that trade with the heavily sanctioned nation. Russia may also begin barter trading schemes with China, Reuters reported in August.

 

India Records Best Rainy Season in Four Years in Boost to Crops

India recorded its best monsoon season since 2020, setting the stage for a bumper harvest of crops such as rice, soybeans and pulses.

Precipitation during the June-September period waters about half of the country’s farmland and is critical to agriculture because it also influences winter plantings. Rains were below average last year, prompting the government to prolong restrictions on rice, wheat and sugar exports.

The world’s second-biggest producer of wheat, rice and sugar received 934.8 millimeters of rain during the four-month season, compared with a normal of 868.6 millimeters, according to data published by the India Meteorological Department on Monday.

There are expectations that a rise in farm output will encourage the government to relax curbs on sugar and wheat. Indian farmers planted monsoon crops, including rice and pulses, in 110.4 million hectares (273 million acres) of land as of Sept. 23, up 1.5% from a year earlier, according to the farm ministry.

The country loosened limits on some varieties of rice shipments on Saturday. It lifted a ban on overseas sales of non-basmati white rice, and set a minimum export price of $490 per ton. On Friday, authorities also cut a tax on exports of parboiled rice to 10% from 20%.

• Rainfall in the central region was at 19% above normal
• The eastern and northeastern region got 14% below normal rains
• Cumulative seasonal rainfall data is compiled by the IMD

 

 

 

 

 

 

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