Global Ag News for July 24.24

TOP HEADLINES

China aims to control dairy, beef output as weak sales hit prices

China plans to implement measures to help dairy and beef producers limit production to prevent prices from falling further, an agriculture official said on Wednesday, adding to existing rules on pork producers as meat consumption declines.

The prices of pork, beef, dairy and poultry are falling in the world’s largest meat consumer as shoppers, grappling with a slowing economy, scale back on purchases.

This downturn in demand follows an increase in production by the livestock industry, especially pig farmers.

“The prices of beef and raw milk in the first half of the year fell by 12.1% and 12.5%, respectively, and beef cattle and dairy cow breeders are making losses,” Wang Lejun, the agriculture ministry’s Chief Animal Husbandry Officer told reporters on Wednesday.

“For beef and dairy cows, we want to guide farms to optimize and adjust the herd structure, moderately eliminate old and low-yielding cows, and better match production development with market demand” he said.

Wang said the livestock market was well supplied, leading to low prices.

In the first half of the year, overall production of pork, beef, mutton and poultry increased by 0.6% year-on-year, egg production rose by 2.7% and milk production increased by 3.4%, he added.

Beijing in March issued regulations to reduce the breeding sow population after an aggressive expansion by farms in the past two years triggered an oversupply of pork that led to companies booking heavy losses.

In June, it released regulations to control beef cattle production.

While the reduction in the size of the pig herd has helped prices to recover, beef and dairy prices are expected to remain low in the second half of the year, Wang said. The number of sows in June stood at 40.38 million head, with hog herds decreasing by 6.4% year-on-year, he added.

China’s meat imports in the first half of 2024 has plunged 13.4% from a year ago, with pork and poultry imports taking the biggest hit.

FUTURES & WEATHER

Wheat prices overnight are down 3 in SRW, down 5 1/4 in HRW, down 5 1/4 in HRS; Corn is down 1 1/4; Soybeans down 7 1/2; Soymeal down $1.70; Soyoil down 0.52.

For the week so far wheat prices are down 3 in SRW, down 8 1/2 in HRW, up 1/2 in HRS; Corn is up 11 1/4; Soybeans up 32; Soymeal up $9.90; Soyoil up 0.64.

For the month to date wheat prices are down 33 3/4 in SRW, down 24 3/4 in HRW, down 2 3/4 in HRS; Corn is down 4 3/4; Soybeans down 36; Soymeal down $18.10; Soyoil up 0.82.

Year-To-Date nearby futures are down 14.1% in SRW, down 12.5% in HRW, down 15.7% in HRS; Corn is down 15.0%; Soybeans down 14.0%; Soymeal down 11.4%; Soyoil down 3.3%.

Chinese Ag futures (SEP 24) Soybeans up 10 yuan; Soymeal down 4; Soyoil down 30; Palm oil down 100; Corn down 20 — Malaysian Palm is down 41.

Malaysian palm oil prices overnight were down 41 ringgit (-1.03%) at 3928.

 

There were no changes in registrations. Registration total: 424 SRW Wheat contracts; 6 Oats; 50 Corn; 44 Soybeans; 1,182 Soyoil; 0 Soymeal; 0 HRW Wheat.

Preliminary changes in futures Open Interest as of July 23 were: SRW Wheat up 693 contracts, HRW Wheat down 265, Corn up 9,463, Soybeans down 2,466, Soymeal down 3,978, Soyoil up 1,415.

 

Northern Plains: Isolated showers continue on Tuesday followed by a few dry days. Heat in Montana will spread eastward this week, though will become less intense as the week wears on. A cold front will move into the region on Friday and be slow to move out until early next week. Models produce precipitation along the front, but nothing overly heavy. Another front could produce some showers a day or two later. Some issues with dryness and heat will be possible for wheat especially, but also for corn and soybeans in some areas as well. The warmth is somewhat needed for corn and soybeans that had a cool and late start to planting and early development, but they could use some more rain as well.

Central/Southern Plains: Scattered showers and thunderstorms have been moving through the region over the last week, hitting some areas with moderate to heavy rain and completely missing others. An upper-level low pressure system responsible will continue showers Tuesday before moving east. Even with it gone, isolated showers may still form later this week. A front moving in this weekend and early next week could provide more, though models are focusing efforts to the north and east. Mild temperatures continue most of this week, gradually moderating closer to or above normal by the weekend and could be hot next week. The situation is fairly positive for most areas of the region currently, but the turn to hotter and drier could start to have an impact on reproductive to filling corn and soybeans.

Midwest: An upper-level low will be in the region producing areas of showers and thunderstorms through Wednesday or Thursday though most areas will see light or no rain while only small areas should see moderate to heavy amounts. Temperatures will gradually rise this weekend ahead of the next front that will move through with more showers early next week. Most areas are in good shape at the moment, but pockets of the region will be missed by the incoming rain and could lead to dryness concerns for reproductive to filling corn and soybeans, especially with temperatures increasing next week.

Delta: A front that settled across southern areas this weekend should continue to bring showers for most of this week. Northern areas will see pockets of showers move through this week also as an upper-level low slowly moves through. With the flow shifting to the south this weekend, showers probably continue over the weekend into next week. Most areas will see good rain, though southern areas might have issues with localized flooding if they get hit by multiple thunderstorms over the next few days.

Canadian Prairies: An upper-level ridge has been reluctant to move out of the region and brought heat over the last couple of weeks, especially to Alberta. Disturbances have tried to bring showers through, but with limited success. The ridge will get pushed eastward later this week as a trough moves into British Columbia, bringing better chances for rain to northern Alberta but only sporadic showers farther south and east through the weekend. Dryness is becoming more of a concern with the continued heat and lack of consistent rainfall, unfavorable for wheat and canola in their critical reproductive stages of growth. The heat will likely take a couple of days break this weekend but the region will be on the edge of the ridge next week, which could lead to building heat again, but also the potential for more periods of showers. Models do not have much in the forecast, however.

 

The player sheet for 7/23 had funds: net sellers of 1,500 contracts of SRW wheat, buyers of 7,500 corn, sellers of 5,500 soybeans, buyers of 2,000 soymeal, and buyers of 1,500 soyoil.

TENDERS

• CORN SALE: Exporters sold 200,000 metric tons of U.S. corn to unknown destinations for 2024/2025 delivery, the U.S. Department of Agriculture said.
• 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.

PENDING TENDERS

• WHEAT TENDER: Jordan’s state grain buyer has issued an international tender to buy 120,000 metric tons of milling wheat which can be sourced from optional origins
• CORN TENDER: An importer group in the Philippines issued an international tender to buy up to 240,000 metric tons of animal feed corn
• FEED BARLEY TENDER: Jordan’s state grains buyer has issued an international tender to purchase up to 120,000 metric tons of animal feed barley.
• RICE TENDER: Indonesian state purchasing agency Bulog issued an international tender to buy about 320,000 metric tons of rice.

 

 

TODAY

ETHANOL: US Weekly Production Survey Before EIA Report

Output and stockpile projections for the week ending July 19 are based on five analyst estimates compiled by Bloomberg.

• Production seen lower than last week at 1.09m b/d
• Stockpile avg est. 23.481m bbl vs 23.16m a week ago

 

CROP TOUR: North Dakota Wheat Yields Average on Fungus Pressure

Spring wheat yields in the top US growing state of North Dakota were roughly on par with last year as a fungal disease limited potential in many fields, according to scouts on the first day of the annual Wheat Quality Council’s three-day crop tour.

• While ample rainfall in much of the state helped wheat fields get established, the moisture also allowed fusarium head blight, more commonly known as scab, to thrive
• The fungal disease leaves heads of grain shriveled and could take bring down yields by 5% or more at harvest
• Overall, yield potential averaged 35.8 bushels per acre on one route after seven field stops in Cass, Steele, Griggs and Foster counties
• That compares with an average of 36.7 bushels per acre on the same route last year
• NOTE: The tour will release full estimates for the first day of scouting later Tuesday, with results from the entire tour due Thursday

 

EU Soft-Wheat Exports Fall 35% Y/y in Week to July 21

The EU’s soft-wheat exports in the season that began July 1 totaled 1.44 million tons as of July 21, compared with 2.21m tons by the same time a year earlier, the European Commission said on its website.

• Leading destinations included Nigeria with 201k tons, Egypt with 194k tons and Morocco with 159k tons
• Barley exports were 533k tons, down 42% y/y
• Corn imports totaled 1.42m tons, up 39% y/y
• NOTE: Export data for France is incomplete from the beginning of 2024

 

EU 2024/25 soybean imports 600,331 T by July 21, rapeseed 80,417 T

European Union soybean imports so far in the 2024/25 season that started in July had reached 600,331 metric tons by July 21, compared with 806,555 tons a year earlier, data published by the European Commission showed on Tuesday.

EU rapeseed imports in the same period totalled 80,417 tons, against 70,880 tons a year earlier.

 

Brazil soymeal exports seen reaching record high in July

Brazil’s soybean meal exports are estimated to reach 2.40 million metric tons in July, which would mean a monthly record high if the volume is confirmed by the end of the month, data from grains exporter association Anec showed on Tuesday.

Anec revised its July soymeal forecast up from the 2.23 million tons expected a week ago. Brazil, Latin America’s largest economy, has been among the main global exporters of soybean meal, alongside Argentina.

The last monthly high for Brazilian soybean meal exports was recorded in May 2023, when 2.27 million tons were shipped, according to Anec.

Anec said the climate favored the shipping of products through ports, while in the domestic market soymeal demand remained stable. The association noted final exports figures can vary reflecting changes in shipping schedules.

The total exports of 2.4 million tons, if confirmed at the end of July, would mean growth of around 11% compared to the same month a year earlier. The volume exported would also have increased by more than 400,000 tons compared to June.

Anec expects Brazil’s soybean exports to reach 10.43 million tons in July, slightly below the 10.71 million forecast last week, it said earlier on Tuesday.

Corn exports are seen reaching 4.56 million tons in July, up from 4.51 million projected the previous week. Still, that result would fall short of the 5.9 million tons shipped in the same period last year, when Brazil harvested a record corn crop.

 

SovEcon Cuts Russian Corn Production Estimate 8% on Dry Weather

SovEcon cut its estimate for Russian corn production to 13.4 million tons from 14.6 million tons in June, it said in an emailed statement.

• Estimate was lowered due to hot weather, which has caused significant damage to late crops, particularly in the south: Managing Director Andrey Sizov
• “Further reductions in the corn crop estimate cannot be ruled out”
• Barley production forecast was raised to 19.3m tons from 18.6m tons
• Wheat harvest expectation was little changed on the month before
• Overall grain crop forecast has been increased to 130.5m tons

 

Export duty on Russian wheat drops 13.5% as of July 24, barley and corn remain zero – Agriculture Ministry

The export duty on Russian wheat has dropped 13.5% to 1,540.4 rubles per tonne as of July 24 from 1,780.5 rubles per tonne during the previous duty period, the Agriculture Ministry said.

The duties on barley and corn remain zero.

Duty rates are based on indicative prices of $229.60 per tonne for wheat against $233.30 per tonne the previous duty period, $177.10 per tonne for barley versus $176.50 per tonne, and $188 per tonne for corn against $190.90 per tonne.

The duties are valid until July 30, inclusive.

 

India’s July edible oil imports to surge to record on robust palm buying, sources say

India bought a record amount of edible oils for July delivery, as refiners increased palm oil and soyoil purchases due to lucrative prices and ahead of an anticipated hike in import duties, industry and government sources told Reuters.

Higher palm oil purchases by the world’s biggest importer of vegetable oils will help to reduce inventories in top producer Indonesia and Malaysia and support benchmark prices.

Edible oil imports are set to jump to a record 1.92 million metric tons, up nearly 26% from a month ago, according to average estimates from the data shared by trade houses.

India on average has been importing 1.2 million tons of edible oil so far in the current marketing year which began November 2023.

Around 1.45 million tons of edible oils have already been discharged at various ports, including 850,000 tons of palm oil, said a government official, who declined to be named as he was not authorised to speak to the media.

Palm oil imports in July are expected to jump 45% from a month ago to 1.14 million metric ton, the highest in 20 months, dealers said.

“Correction in palm oil prices in May and June made it cheaper than rival oils. During this period, the refining margin in India was also healthy, prompting refiners to place orders for July shipments,” said Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil brokerage.

Palm oil’s discount to soyoil widened to more than $100 per ton in May from less than $10 in April, dealers said.

“Expectations of a duty hike in the budget also prompted some buyers to increase purchases for July shipments,” Bajoria said.

Finance Minister Nirmala Sitharaman on Tuesday presented the budget for the 2024-25 financial year, although she didn’t make any changes to the duty structure on edible oils.

Soyoil imports in July are set to jump 45% from a month ago to 400,000 metric tons, the highest in 13 months, data showed.

Soyoil shipments originating from South America take more than six weeks, and some of the delayed shipments landed in July, which lifted soyoil imports, said Rajesh Patel, managing partner at edible oil trader and broker GGN Research.

Sunflower oil imports could fall to 380,000 tons in July, down 18% from the last month’s record shipments, data showed.

India buys palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine.

 

China says soybean self-sufficiency rate rose about 4 pctge pts in two years

China’s soybean self-sufficiency rate has increased by nearly 4 percentage points in two years, the agriculture ministry said on Wednesday during a press briefing.

 

China reports largest increase in summer harvest in 9 years

China reported its largest grain output increase in nine years this summer, driven by a bumper wheat harvest, an official said Wednesday.

Han Jun, Party chief of China’s Ministry of Agriculture and Rural Affairs, told a press conference that about 346 million mu (23 million hectares) of wheat were harvested this summer, up by 475,000 mu from last year’s high base.

The yield per mu of wheat rose by 10 kilograms, or 2.6 percent year on year, marking the biggest growth in the last five years, Han said.

Guaranteeing food security has been high on China’s agenda. An array of measures has been rolled out to improve grain output over the past years, including building more high-standard farmland and promoting agricultural technologies.

This year’s summer grain output totaled 149.78 million tonnes, hitting a new high. The full-year figure remained above 650 million tonnes for the ninth straight year in 2023.

In particular, more energy has been directed toward soybean production, resulting in its self-sufficiency ratio increasing by nearly 4 percentage points over the past two years, Han said, adding that there has been an abundant supply of a wide range of farm produce, including meat, fruit and tea.

With multiple grain-producing regions suffering from droughts or floods, Han stressed the need for prompt relief measures to mitigate the impact on autumn harvests, which account for three-quarters of the full-year output.

Many technicians and agricultural officials have been sent to villages to provide precise and targeted services for farmers, Han said.

 

Brazil Soy Exports Seen Reaching 10.43 Million Tns In July – Anec

• BRAZIL SOY EXPORTS SEEN REACHING 10.43 MILLION TNS IN JULY VERSUS 10.71 MILLION TNS ESTIMATED LAST WEEK
• BRAZIL SOYMEAL EXPORTS SEEN REACHING 2.40 MILLION TNS IN JULY VERSUS 2.23 MILLION TNS ESTIMATED LAST WEEK
• BRAZIL CORN EXPORTS SEEN REACHING 4.56 MILLION TNS IN JULY VERSUS 4.51 MILLION TNS ESTIMATED LAST WEEK

 

US Egg Production Fell 1.6% in June From Year Ago: USDA

The US produced 8.81b eggs in June vs 8.95b in the same period a year ago, according to a report from the USDA.

• Output of table eggs fell 1.5% y/y to 7.56b
• Hatching eggs down 2% to 1.25b

 

US Milk Production Fell 0.8% Y/y in June, USDA Says

Agency releases report on website.

• Output for the 24 major-producing states was 18b lbs, 141m less than in June of last year
• Milk per cow averaged 2,025 lbs, a 0.4% decline from last year
• Estimated output for all the US fell 1% y/y to 18.767b lbs

 

 

 

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