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Global Ag News for Oct 24.24

TOP HEADLINES

EU Assessing Tariff Hikes on More Russian Agricultural Goods

  • Fertilizers could also be hit, say people familiar with talks
  • EU also looking into sanctioning more Russian oil tankers

The European Union is debating whether to hike tariffs on more Russian agricultural and food products, as well as fertilizers, according to people familiar with the matter.

Several member states eager to limit Moscow’s revenues have been urging the bloc to impose sweeping levies on agricultural and fish imports from Russia and Belarus into the EU, on top of the higher duties on grain products set earlier this year.

Others have urged caution, asking to assess the impact of any measures on European imports and food prices first, said the people, who spoke on condition of anonymity to discuss private matters.

Trade measures don’t always require the backing of all member states, unlike sanctions. Any move on fertilizers would likely be welcomed by Europe’s crop nutrient industry, which has been lobbying for more protections.

Still, the timing of any new tariffs is unclear given the legal and political hurdles, one of the people said.

Russia is the world’s biggest exporter of fertilizers with 18% market share. While the industry is not sanctioned, it was forced to cut exports on the back of the Russian invasion of Ukraine in 2022 due to logistics and payments issues. The export has recovered since then and this year is expected to reach the record level of 2021, according to the Russian Association of Fertilizer Producers.

Separately, work is ongoing on a new sanctions package, according to the people. But a broad set of measures may have to wait until after Hungary’s rotating presidency of the EU, with Budapest blocking most actions relating to Russia. Poland takes over the presidency in the new year.

Several governments asked the bloc’s executive arm this week to consider a narrower set of restrictions in the meantime, such as listing more sanction-busting vessels transporting Russian oil and making use of the EU’s new regime to designate disinformation actors, said the people.

 

FUTURES & WEATHER

Wheat prices overnight are up 1/2 in SRW, up 1/4 in HRW, up 2 1/4 in HRS; Corn is up 2 1/2; Soybeans up 6 3/4; Soymeal down $0.50; Soyoil up 0.97.

For the week so far wheat prices are up 6 in SRW, up 4 1/2 in HRW, up 1/4 in HRS; Corn is up 15 1/2; Soybeans up 27 1/2; Soymeal down $0.60; Soyoil up 2.21.

For the month to date wheat prices are down 5 in SRW, up 1 3/4 in HRW, down 4 in HRS; Corn is down 3 1/4; Soybeans down 63 1/2; Soymeal down $27.10; Soyoil up 1.05.

Year-To-Date nearby futures are down 7.8% in SRW, down 8.8% in HRW, down 14.8% in HRS; Corn is down 10.8%; Soybeans down 22.4%; Soymeal down 18.4%; Soyoil down 8.0%.

Chinese Ag futures (JAN 25) Soybeans up 27 yuan; Soymeal down 4; Soyoil up 24; Palm oil up 64; Corn up 30 — Malaysian Palm is up 116.

Malaysian palm oil prices overnight were up 116 ringgit (+2.59%) at 4602.

There were changes in registrations (-70 Soymeal). Registration total: 220 SRW Wheat contracts; 0 Oats; 126 Corn; 232 Soybeans; 369 Soyoil; 76 Soymeal; 5 HRW Wheat.

Preliminary changes in futures Open Interest as of October 23 were: SRW Wheat down 4,183 contracts, HRW Wheat up 1,054, Corn up 19,894, Soybeans down 5,164, Soymeal down 19, Soyoil down 1,199.

 

Brazil: Wet season showers continue in central Brazil, being favorable for further soybean planting and establishment. Producers have not been able to cover the gap from late planting of soybeans yet and they only have about a week left before the window closes. Rainfall has been good farther south as well, with much better progress on planting occurring there. 

Argentina: An overall wetter pattern lately has reduced drought and brought moisture for filling wheat and corn establishment. There is still drought out there though. Another system that moved in Tuesday with good rain continues on Wednesday, which should be beneficial to the country as well. The pattern will get drier afterward, for about a week or maybe later. Based on the recent rainfall, a shorter dry stretch will not be all that harmful, but if it lasts longer than forecast, issues may start to arise again. Soybean planting will start in November and the dry stretch will not be favorable early on. More rainfall will be needed to continue reducing drought. 

Northern Plains: A front brought limited showers through on Tuesday, otherwise dry conditions continue as drought keeps building. There is some potential for showers to develop with pulses of energy moving through next week, though models disagree on that potential. Some windy conditions at times could increase the fire risk again this week as well. 

Central/Southern Plains: Despite some showers earlier this week, soil moisture continues to be quite low with widespread drought. Harvest conditions have been very good though. A system will move into the region next week with a much better chance for pulses of showers to move through the region that could be more substantial. Models are working out that potential, however. 

Midwest: A small disturbance moved through on Tuesday with a few showers and a front is scraping across the north on Wednesday with a few more. A small system will move through on Thursday and Friday with a scattered showers and small pockets of heavier rain potential. Though some showers will fall, it should not be heavy enough to build soil moisture, reduce drought, or disrupt harvest for too many areas. A storm system moving in next week could bring some waves of showers to the region that could be more meaningful, particularly across the western half. 

Europe: It continues to be unfavorably wet in some areas in the northwest and Italy. Another system will move into western areas with more unneeded showers for Friday into the weekend, though Spain will benefit from the rain that may continue there into next week. Eastern areas have been able to recover from a wet period a couple of weeks ago and some areas would like to see rain there for winter wheat establishment. 

Black Sea: Rainfall deficits are very large and the window for winter wheat establishment has essentially closed with frosts and freezes becoming more likely from now on. Overall drier conditions are in the forecast for the next two weeks with several fronts moving through with very limited showers and larger drops in temperatures. The region will hope for good precipitation over the winter to make up for the lost time this fall. 

Australia: A front will move through eastern areas Wednesday and Thursday, but with very little precipitation forecast. The same goes with another system this weekend where showers may be relegated to the Pacific Coast. Some areas are doing well while others are too dry, creating mixed conditions for filling wheat and canola.

 

The player sheet for Oct. 23 had funds: net buyers of 500 contracts of SRW wheat, buyers of 9,000 corn, buyers of 5,000 soybeans, and sellers of 3,000 soymeal.

TENDERS

  • SOYBEAN, CORN SALES: Exporters sold 130,000 metric tons of U.S. soybeans to China; 259,000 metric tons of U.S. soybeans to unknown buyers; and 100,000 metric tons of U.S. corn to unknown buyers for 2024-25 delivery, the U.S. Department of Agriculture said via its daily reporting system.
  • WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy up to 120,000 metric tons of milling wheat that can be sourced from optional origins.
  • WHEAT TENDER: Bangladesh’s state grains buyer issued another international tender to purchase 50,000 metric tons of milling wheat.
  • RICE TENDER: The state purchasing agency in Mauritius issued an international tender to buy 4,000 metric tons of long grain white rice sourced from optional origins.
  • NO PURCHASE IN BARLEY TENDER: Jordan’s state grain buyer is believed to have made no purchase in an international tender for 120,000 metric tons of animal feed barley.

 PENDING TENDERS

  • CORN, BARLEY TENDER: Algerian state agency ONAB issued international tenders to purchase up to 240,000 metric tons of animal feed corn and 35,000 metric tons of feed barley
  • CORN, BARLEY TENDERS: Iranian state-owned animal feed importer SLAL issued international tenders to purchase up to 120,000 metric tons of animal feed corn and 120,000 tons of feed barley
  • RICE TENDER UPDATE: Indonesian state purchasing agency Bulog told traders that Indian supplies can be offered in its new international tender to buy 340,000 metric tons of rice and the offer deadline is postponed.
  • RICE TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 metric tons of rice.

 

 

Global currency on a map

 

 

TODAY

GRAIN EXPORT SURVEY: Corn, Soy, Wheat Sales Before USDA Report

Estimate ranges are based on a Bloomberg survey of six analysts; the USDA is scheduled to release its export sales report on Thursday for week ending Oct. 17.

  • Corn est. range 2,500k – 4,000k tons, with avg of 3,130k
  • Soybean est. range 1,400k – 2,400k tons, with avg of 1,785k

 

DOE: US Ethanol Stocks Fall 0.2% to 22.223M Bbl

According to the US Department of Energy’s weekly petroleum report.

  • Analysts were expecting 22.397 mln bbl
  • Plant production at 1.081m b/d, compared to survey avg of 1.055m

 

USDA attache sees Brazil 2024/25 soy crop at 161 million metric tons

Following are selected highlights from a report issued on Wednesday by the U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service post in Brasilia:

“Post increased its estimate for soybean production in 2024/25 to 161 million metric tons (MMT), from the previous estimate of 160 MMT. Another record export is expected in 2024/25 with Post forecasting 102 MMT, exceeding the estimate for the previous season of 99 MMT. For 2024/25, Post revised the forecast for soybean crush up to 55.5 MMT, a 2.5 percent increase compared with the 2023/2024 estimate.”

 

Argentina rains ‘turn game around’ for grains after drought, exchange says

Strong rains this week in Argentina have given a huge boost to the farming sector after a tough period of drought, “turning the game around” for corn and wheat farmers who had been facing deep losses, the Rosario grains exchange said on Wednesday.

The exchange said in a report that between 30 and 90 millimeters of rain fell in the last 24 hours in much of the agricultural core region of Argentina, the world’s third largest corn exporter and a key global supplier of wheat.

That had totally changed the outlook for the crops.

“We were losing 3-0 against the drought. With the rains last week we were 3-2, and with what is happening now we would be winning 4-3,” Cristian Russo, head of agricultural estimates at the Rosario exchange, said in the report.

For 2024/25 wheat, the recent rains have arrived at a “crucial” time in the last weeks of yield development, the exchange said. At the start of the month it cut its harvest estimate for the cereal to 19.5 million metric tons due to lack of rain. The wheat harvest begins in November.

In the case of 2024/25 season corn, the rain will allow farmers to resume delayed planting, it added, while soy planting would be able to get going “with greater intensity in the coming weeks” now that conditions had improved.

Argentina is the world’s top exporter of processed soy oil and meal, products that are a key driver for the economy.

The Rosario exchange forecasts a corn harvest of 51-52 million tons in the 2024/25 cycle and a soybean production of between 52-53 million tons. Corn sowing started in September and soy planting recently in the second half of October.

 

Brazil soybean production slightly up despite delays in early season planting

2024/25 Brazil: 167.9 [158.2–176.1] MILLION TONS, UP 1% FROM LAST UPDATE

2024/25 Brazil soybean production is increased by 1% to 167.9 [158.2–176.1] million tons, as mixed weather conditions continue to improve the overall soil moisture conditions in the Central-West and the South, despite continued early season planting delays that might undermine yield potential if dragged on. Our current median estimate is 1.1 million tons below the USDA’s World Agricultural Outlook Board (WAOB)’s 169 million tons (released on 11 October), which assumes total soy sowings at 47.3 million hectares and national level yield of 3.57 tons per hectare (tph) (vs. LSEG Agriculture Research’s 46.4 million hectares and 3.62 tph, respectively). Brazil’s agriculture state agency (CONAB) has lately pegged its total soybean production and area at 166 million tons and 47.3 million hectares, respectively (released on 15 October).

The past two weeks largely featured a split precipitation pattern across the Brazil’s core agricultural regions. Most major soybean producing areas of the Central-West (e.g. Mato Grosso, Mato Grosso do Sul and Goiás), the Southeast (e.g. Minas Gerais), the Northeast (e.g. Bahia and Maranhão), and the northern half of the South (Paraná in particular) received widespread rainfall totaling 90 mm with surpluses up to 40 mm, while the southern half of the South only picked up occasional scattered showers. This mixed precipitation pattern was especially beneficial to the crops in the South, where two of the top three soy producers are located (i.e. Paraná and Rio Grande do Sul), as it helped replenish soil moisture reserves in Paraná while partially alleviating the excessive moisture pressure in Rio Grande do Sul. On the other hand, temperatures remained above normal during the period, aggravating already poor soil moisture conditions in some key crop areas.

espite relatively favorable weather conditions in recent weeks, sowing delays are significant at the national level, warranting attention. As of 20 October, Brazil’s soybeans were only 17.6% planted nationally according to the latest CONAB’s crop progress report (released on 21 October), behind last year’s pace of 28.4%. The most severe delays are ongoing in some of the top producing regions, including Mato Grosso (-30.4%) and Goiás (-11%), both of which are still suffering from lack of moisture despite recent beneficial rains. Our latest short-term forecast (EC/GFS) indicates that cooler and wetter conditions (compared to recent weeks) are expected to prevail across the core crop areas of the Central-West through the end of the month while dry conditions should remain in place in the South, suggesting a continuation of the overall favorable weather pattern.

 

USDA attaché projects Australia 2024/25 wheat crop at 28.5 million metric tons

Following are selected highlights from a report issued on Wednesday by the U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service post in Canberra:

“Australian winter crops have had very challenging seasonal conditions for MY 2024/25, including low soil moisture at planting, below-average rainfall, and frost damage. Despite these difficulties, wheat production is expected to be above-average, while barley is forecast slightly below-average. The sorghum summer crop is off to an excellent start across all growing regions. … Wheat production is forecast at 28.5 million metric tons (MMT), 1.9 MMT below the previous 10-year average. Barley production is forecast at 11.0 MMT, around 300,000 metric tons (MT) below the previous 10-year average. Wheat exports in MY 2024/25 are forecast to reach 20.0 MMT, exceeding the 10-year average of 19.2 MMT. Barley exports are forecast at 5.0 MMT for MY 2024/25, significantly below the previous 10-year average of 6.4 MMT, following strong demand from China in MY 2023/24 after China removed tariffs on Australian barley in August 2023.”

 

Ukraine Grain Exports Increase 60% Y/y to Cross 13M Tons

Ukraine’s grain exports reached 13.3m tons in the season that started July 1, compared with 8.3m tons in the same period a year ago, the Agriculture Ministry says on its website.

  • Total exports include:
    • 7.3m tons of wheat, up 77% from the same period a year ago
    • 1.7m tons of barley
    • almost 4m tons of corn, up 17% compared to last year
  • Total grain exports in October alone so far have reached almost 3m tons
  • Ukraine’s grain and legumes harvest totaled 42.8m tons, as of mid October
  • Ukrainian farmers continue their winter planting campaign and have already sown 5.4m hectares, up from almost 5m hectares this time last year

 

Most Ukraine winter crop under risk due to poor development, forecasters say

Most of Ukraine’s winter crop is under threat as almost all seedlings are under-developed, analyst APK-Inform quoted on Thursday Ukraine’s state weather forecasters as saying.

A record long drought this summer and early autumn led many farmers to sow grain in dry soil and only recent rains have improved the situation.

“Agrometeorological conditions in Oct. 10-20 in Ukraine were generally favourable for the rooting and initial growth of winter crops, but due to the late emergence of seedlings, almost all crops are at risk due to poor development,” forecasters said in a report.

The forecasters said the weather conditions in autumn did not allow sowing to be carried out in optimal terms, and plants failed to develop normally and form well-developed roots in most of the central, southern and eastern regions.

Due to lack of precipitation and prolonged heatwaves, drought conditions continued in these areas from the end of June and almost to the beginning of October.

Ukraine’s agriculture ministry said this week farmers had sown 4.33 million hectares of winter grains for the 2025 harvest as of Oct. 21, or 83.5% of the expected area of 5.19 million hectares.

It said the area included 3.85 million hectares of winter wheat, or 85.9% of the projected area. Winter wheat generally accounts for 95% of overall Ukrainian wheat output each year.

Farmers also sowed 421,300 hectares of winter barley and 62,500 hectares of rye.

 

German Grain Harvest Lowest Since 2018 on Low Yields: DRV

Germany’s 2024 grains harvest is estimated at 39.1m tons, the smallest since 2018, agricultural cooperatives group DRV said in a report.

  • Drop is due to declining planting area and lower yields: Guido Seedler, DRV grain market expert
  • Corn production seen at a five year high, up 9% y/y
    • Many areas were planted with corn in spring after heavy rainfall hindered sowing in autumn 2023
    • Sufficient rains also benefited higher yields
  • Production estimates include:
    • Wheat at 18.6m tons
    • Barley at 10.7m tons
    • Corn at 4.9m tons

 

Malaysia Raises Palm Oil Export Tax for First Time Since 2021

Malaysia has raised the export tax for crude palm oil to 9.5% for November, the first increase in over three years, according to a circular from the customs department posted on the Malaysian Palm Oil Board’s website.

  • Last week, the circular showed a tax rate of 8% for November
  • The MPOB provided a link to the latest tax structure and confirmed it would take effect from Nov. 1, without elaborating on the change, in an emailed response to questions from Bloomberg News
    • The new circular includes four new tax brackets and a top rate of 10% when prices exceed 4,050 ringgit/ton
    • The previous maximum tax rate was 8%
  • NOTE: Tax has been kept at 8% since January 2021, following government exemption in July-December 2020

 

Argentina court deals setback to Bunge takeover of bankrupt soy firm Vicentin

An Argentine court has ruled that an agreement between soymeal giant Vicentin and its creditors is unconstitutional, a move that will hamper an attempted takeover of the bankrupt firm that has become stuck in an extended legal battle.

The decision by the Supreme Court of Santa Fe province, where Vicentin is based, means the company will have to negotiate a new agreement with creditors before a proposed takeover by U.S. grains trader Bunge, Glencore-backed oilseed crusher Viterra and local group ACA could move ahead.

Bunge and Viterra announced a mega merger deal last year. Vicentin, once Argentina’s biggest soy oil and meal exporter, is indebted to the state and international creditors after defaulting on debts of more than $1 billion in 2019.

The ruling, shared with Reuters on Wednesday but sent down by the court late on Tuesday, came in response to a complaint by a hostile creditor.

Vicentin did not respond to a request for comment. Bunge did not immediately respond to a request for comment.

Argentina is the world’s top exporter of soymeal and oil, and family-owned Vicentin was for decades the crown jewel in the country’s soy-processing sector. In 2020, the country’s then center-left government expressed interest in nationalizing Vicentin, but it backed off from the plan after blowback from Argentina’s business community.

 

 

 

 

 

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