Global Ag News for Sept 18.24

TOP HEADLINES

India’s edible oil demand to rise despite hefty import duty hike

India’s edible oil consumption is set to grow at a pace of 2%-3% as cooking oils remain affordable despite an import duty hike, a leading importer told Reuters on Wednesday.

New Delhi on Friday raised the basic import tax on crude and refined edible oils by 20 percentage points to help protect farmers reeling from lower oilseed prices.

“As we enter the peak festival season, demand will remain strong. Despite the duty hike, edible oil prices are affordable,” said Sanjeev Asthana, chief executive officer at Patanjali Foods Ltd

“Edible oils’ demand could grow by 2%-3% in the 2024-2025 marketing year starting from Nov. 1 because of rising population and prosperity,” he said.

India is the world’s largest importer and meets 70% of its vegetable oil demand through foreign sourcing. It buys palm oil from Indonesia, Malaysia and Thailand, while soyoil and sunoil come from Argentina, Brazil, Russia and Ukraine.

The country’s palm oil imports in 2024-25 could be between 9-10 million metric tons compared to around 9 million tons this year as tropical oil is likely to regain the market share it lost to rival sunflower oil due to a higher premium, he said.

“We witnessed an unusual surge in sunflower oil imports this year due to attractive prices. Next year, sunflower oil imports may return to the normal range of 3 million tons,” he said.

India’s sunoil imports in the current year are expected to surge to record 3.6 million tons from year-ago 3 million tons. Russia and Ukraine’s abundant sunoil supplies brought prices down and made it competitive against rival oils.  Soyoil imports would remain largely steady next year, around this year’s level of 3 million tons, Asthana said.

India’s soybean crop in 2024 could rise to 11 million tons from approximately 10 million tons last year, if the weather remains favourable over the next few weeks, he said.

 

FUTURES & WEATHER

Wheat prices overnight are up 2 1/4 in SRW, up 2 in HRW, up 1 1/2 in HRS; Corn is up 1 3/4; Soybeans up 12 1/4; Soymeal up $4.20; Soyoil up 0.48.

For the week so far wheat prices are down 16 3/4 in SRW, down 18 in HRW, down 13 in HRS; Corn is up 1; Soybeans up 12; Soymeal up $2.80; Soyoil up 1.43.

For the month to date wheat prices are up 26 1/2 in SRW, up 16 3/4 in HRW, up 22 in HRS; Corn is up 13 1/4; Soybeans up 18 1/4; Soymeal up $12.70; Soyoil down 1.65.

Year-To-Date nearby futures are down 8.0% in SRW, down 9.3% in HRW, down 14.0% in HRS; Corn is down 12.1%; Soybeans down 21.3%; Soymeal down 16.5%; Soyoil down 14.3%.

Chinese Ag futures (NOV 24) Soybeans down 70 yuan; Soymeal up 64; Soyoil up 80; Palm oil up 30; Corn down 12 — Malaysian Palm is up 106.

Malaysian palm oil prices overnight were up 106 ringgit (+2.81%) at 3872.

There were changes in registrations (-2 Oats). Registration total: 220 SRW Wheat contracts; 0 Oats; 126 Corn; 232 Soybeans; 382 Soyoil; 200 Soymeal; 5 HRW Wheat.

Preliminary changes in futures Open Interest as of September 17 were: SRW Wheat down 382 contracts, HRW Wheat up 420, Corn up 8,211, Soybeans up 9,021, Soymeal up 5,776, Soyoil up 491.

 

Northern Plains: A system is developing over the region Tuesday and Wednesday, bringing more widespread rainfall to the region and potential for heavy rain to Montana. Another system may bring a few showers this weekend, but it should be drier for about a week before the next system moves through. Temperatures will be quite warm the next several days, but milder behind the system this weekend.

 

Central/Southern Plains: A system to the north will send a front into the region Tuesday night and Wednesday, but it will be stalled out in the region through the end of the weekend. It could produce some areas of showers. A low-pressure center is likely to develop along it this weekend and produce more widespread precipitation, which may help with winter wheat establishment and any immature crops. But for those just starting to harvest or watching their crops mature, it could cause some delays.

 

Midwest: Some isolated showers will be possible both west and east the next couple of days, but many areas are going to stay dry. A front in the west will likely move east with showers for western areas on Thursday. A system may form along that front with some additional showers across more of the region this weekend into next week. Overall rainfall potential is pretty light for most areas outside of the northwest, where it could be heavy. Temperatures remain warm, helping crops to dry down and mature where rain is lower in coverage and intensity. Increasing dryness and drought has not been favorable for the winter wheat crop that is just starting to be planted.

 

Delta: Heavy rain over the last week have caused harvest delays and potential quality issues for mature soybeans and cotton. Drought has likely been reduced in many areas, though. Any improvements on the Mississippi River have been limited and will be brief without significant precipitation farther upstream, especially in the Ohio Valley. The next significant chance for rain comes with a weak front moving through early next week.

 

Southeast: Francine’s remnants brought areas of heavy rain over the weekend, helping to reduce drought but also causing delays to harvest and potential quality issues for all crops. Another tropical low brought some heavy rain to the Carolinas Monday and continues with showers there the rest of the week, which may cause harvest delays and quality issues for crops there.

 

Canadian Prairies: A system will develop in the Northern Plains on Tuesday, which will move north into the region by Wednesday and stick around through Thursday. Widespread showers are forecast and some areas will see heavy rain. Another system will likely move through Friday and Saturday with scattered showers and a stronger system and front may move through during the middle of next week. Recent and continued rain will disrupt the remaining harvest and drop quality for some wheat and canola. The rain will help with the ongoing drought, however.

 

Brazil: A front brought some heavier rain to Parana over the weekend, with lighter amounts in southern Brazil that ended on Monday. Another burst of showers may move through Parana on Wednesday. A front moving up from Argentina will likely produce more showers later this week and weekend for southern Brazil, which is getting some needed rain as planting continues. But central Brazil continues to be extremely dry, in some of the worst drought to start off a season in decades. Wet season rainfall may be on track to start at the end of the month, but producers are going to have to wait for consistent rains to begin planting, which may be pushed back deeper into October. If that happens, that will put a crunch on the safrinha corn and cotton crops that will start to be planted in January and February.

 

Argentina: It was dry again over the weekend, a common theme for the start of corn planting, which has been significantly delayed already. A front will move through on Thursday and could make for some significant rainfall, but mostly for areas in the east with better soil moisture. Western areas are still very dry. More fronts are in line to move through this weekend and again next week, but the rainfall will need to be better for the western half of the country’s growing areas soon or further delays to corn planting will be likely and developing wheat will continue to suffer.

 

Europe: Scattered showers over the eastern half of the continent were heavy with a system stalling there. Heavy rain in some areas caused flooding, but most saw beneficial rainfall. The system will drift southwest into the Mediterranean early this week, continuing showers there in needed areas as winter wheat planting starts up. A new system may form in the west on Friday and continue with widespread showers moving eastward into next week. Rainfall would help to maintain or improve soil moisture, but could delay winter wheat planting if heavy.

 

Black Sea: Far western areas have seen meaningful rain over the last week while eastern Ukraine and western Russia in particular have been very dry as well as hot. A small system will be meandering in the Black Sea this week, but it will likely stay hot and dry in the region. Drought and heat are not making for very good conditions for winter wheat establishment, which has a very limited amount of time before frosts and freezes start to be a regular occurrence in October or early November.

 

Australia: Some showers scraped through far southeastern Australia over the weekend, but most areas stayed unfavorably dry. The state of Victoria is the only area likely to see rain this week and chances there are low as well. Additional rainfall is going to be needed with more of the crop reaching reproduction.

 

The player sheet for Sept. 17 had funds: net sellers of 500 contracts of SRW wheat, buyers of 3,500 corn, sellers of 3,500 soybeans, and buyers of 4,250 soyoil.

TENDERS

• WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy a total of 123,012 metric tons of food-quality wheat from the United States, Canada and Australia in a regular tender that will close late on Thursday.

 PENDING TENDERS

• CORN TENDERL Algerian state agency ONAB has issued an international tender to purchase up to 80,000 metric tons of animal feed corn sourced from Argentina or Brazil only. The new tender is believed to indicate that ONAB made no purchase or only a minor purchase in a tender for 120,000 tons of corn which closed last week, traders said.
• CORN, BARLEY TENDER: Algerian state agency ONAB issued an international tender to purchase about 160,000 metric tons of corn and 35,000 tons of animal feed barley.
• RICE TENDER: Indonesian state purchasing agency Bulog issued an international tender to buy about 450,000 metric tons of rice.

 

 

 

TODAY

ETHANOL: US Weekly Production Survey Before EIA Report

Output and stockpile projections for the week ending Sept. 13 are based on five analyst estimates compiled by Bloomberg.

• Production seen lower than last week at 1.052m b/d
• Stockpile avg est. 23.74m bbl vs 23.714m a week ago

 

LIVESTOCK SURVEY: US Cattle on Feed Placements Seen Down 1.9%

August placements onto feedlots seen falling y/y to 1.97m head, according to a Bloomberg survey of 11 analysts.

• Estimates range from -6.5% to +2.3% y/y change
• Feedlot herd as of Sept. 1 seen rising by 0.6% y/y to 11.19m head
• Marketings seen falling 3.4% y/y

 

Brazil Soy Output to Rise 13% to 166.3M Tons in 2024-25: Conab

Brazil’s soybean area to grow 3% in current crop season to 47.4 million hectares, yield to improve 9.6%, crop agency Conab says in a presentation.

• Brazil’s soybean exports to grow 13% to 104.8m tons compared with 2023-24 season, soy crushing seen increasing 7.9% to 56.7m tons
• Corn output to rise 3.6% in 2024-25 from previous marketing year to 119.8m tons
  • Corn exports to drop 5.6% to 34m tons, while domestic consumption is seen 3.3% higher at 87m tons
• Brazil’s beef production expected to grow 7.4% in 2024 from last year to 10.2m tons; output in 2025 seen down 4.3% at 9.8m tons
  • Beef exports seen up 18% in 2024 at 3.6m tons; expected to grow 2.5% in 2025 to 3.7m tons
• Brazil’s chicken production to grow 2.1% in 2025 to 15.5m ton, exports to increase 1.9% to 5.2m ton
• Cotton crop to increase 1.1% in 2024-25 marketing year to 3.68m tons, exports seen 1.1% higher at 2.86m tons

 

Brazil Soy Exports Seen Reaching 5.83 Million Tns In September – Anec

• BRAZIL SOY EXPORTS SEEN REACHING 5.83 MILLION TNS IN SEPTEMBER VERSUS 5.51 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC
• BRAZIL SOYMEAL EXPORTS SEEN REACHING 2.02 MILLION TNS IN SEPTEMBER VERSUS 2.02 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC
• BRAZIL CORN EXPORTS SEEN REACHING 6.63 MILLION TNS IN SEPTEMBER VERSUS 6.47 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC

 

UN Expects Little Impact on Ukraine Exports After Missile Attack

An attack by a Russian missile on a ship carrying grain from Ukraine is not a “game changer” for the industry, Ben Parker, the officer-in-charge of the UN’s Black Sea Initiative’s support office, said during a webinar.

• NOTE: Russia hit a grain ship with a missile immediately after it left Ukrainian waters last week
• While Parker said this was probably the worst incident since Ukraine started its own export corridor, he said “the shipping industry has a pretty thick skin for risk and for incidents that do not cause loss of life and do not cause a total loss for the vessel”
• If the ship had been sunk or there had been casualties, that would have spooked the market, he said
• Separately, he said “we are observing now that the safety of navigation is impacted by widespread GPS interference”

 

Russia Harvests 102m Tons of Grain vs 119.8m Tons y/y: IFX

Russia had harvested 102m tons of grain by Sept. 18, Deputy Agricultural Minister Maxim Uvaidov says, according to Interfax.

• Crops have been harvested from almost 75% of the area.
• NOTE: On Sept. 11, Agricultural Minister Oksana Lut reiterated 2024 grain harvest forecast at 132m tons

 

SovEcon Revises Up 2024 Russian Wheat Forecast to 82.9m Tons

Consultant SovEcon revised up its Russia wheat crop forecast for the 2024 season to 82.9 million tons tons from a previous estimate of 82.5m tons, it said in an email.

• It reflects higher yields expected in the “Asian part of Russia”
• Siberia is expected to see a record 11.3m tons harvested, with Urals also seeing increased output
• This offsets a decline in the Central and Volga regions due to dry weather and extreme heat
• Dry weather is expected in most regions of Russia in the coming days, which should help with harvesting

 

Ukraine 2024 soybean crop could jump to 6 mln T, analyst APK-Inform says

Ukraine is likely to have a record high soybean harvest in 2024 despite poor weather, due to a large sowing area, analyst APK-Inform said on Tuesday.

The consultancy said the harvest could rise to up to 6 million metric tons, or 9% more than in 2023.

APK-Inform said the updated official data showed that 2.66 million hectares (6.57 million acres) were sown for soybeans in 2024, or 44% more than in 2023.

The consultancy said it estimated the sown area at 2.6 million hectares (6.42 million acres).

Ukraine traditionally exports most of its soybean harvest and Ukrainian grain traders union UGA said the country exported around 3 million tons of the commodity in the 2023/24 season from the harvest of 4.9 million tons.

 

Indonesia Aug. Palm Oil Exports Rise 17.78% M/m: Intertek

Indonesia’s palm oil exports rose 17.78% m/m in August versus -27.7% in July, according to Intertek Testing Services.

• Palm oil exports rose to 2.382m tons from 2.022m tons in July
• Crude palm oil shipments rose to 289,098 tons from 211,219 tons in July
• RBD palm olein shipments rose to 864,066 tons from 751,261 tons in July
• RBD palm oil shipments rose to 503,604 tons from 409,397 tons in July
• Palm oil sales to European Union fell to 347,320 tons from 365,092 tons in July
• Palm oil sales to India rose to 790,786 tons from 548,597 tons in July
• Palm oil sales to China rose to 431,680 tons from 411,755 tons in July

 

Brazil beef output to fall 4.3% next year after record in 2024, Conab says

Brazil’s beef production is expected to hit a record in 2024 on historic exports and firm domestic consumption, then drop 4.3% in 2025 with less cows available for slaughter while chicken and pork output rise, national crop agency Conab said on Tuesday.

Brazil, the world’s largest beef exporter, should see a reversal of the current cattle supply cycle next year, the agency said.

National beef production is set to reach 9.78 million metric tons next year, Conab said, after exceeding 10 million tons in 2024 for the first time ever, up some 7.5% from the previous year.  Nevertheless, the country’s beef exports are expected to rise 2.5% year-on-year in 2025 to 3.66 million tons. Conab also estimated Brazil’s chicken meat production would rise 2.1% next year to hit a record 15.5 million tons, while exports would likely increase 1.9% to 5.2 million tons.

The South American country, which is also the world’s top chicken exporter, should benefit from an “enormous competitive advantage” over countries that have registered bird flu cases, the agency noted.

Producers should also get a boost from a weaker Brazilian real BRBY, bumping up local-currency revenues when selling dollar-denominated meat in global markets, as well as from higher beef prices related to lower production.

“Chicken meat is a cheaper option. With soybean and corn prices under control, it tends to have even lower costs, resulting in more affordable prices,” said Conab expert Gabriel Rabello, referring to grains used to feed poultry.

Brazil’s pork production, meanwhile, is expected to rise 1.6% next year to a record 5.45 million tons, with exports climbing 3% to 1.27 million tons. Brazil is also one of the world’s largest pork suppliers.

 

La Nina, if it appears, will likely be brief, Australia’s weather bureau says

Conditions in the Pacific Ocean have become more La Nina-like in recent weeks, but if the weather pattern does form, it is likely to be weak and short-lived, Australia’s weather bureau said.

La Nina and its opposite, El Nino, are caused by the cooling and warming of sea surface temperatures off western South America.

Their development is of huge importance to global agriculture, with La Nina typically bringing more rain to Australia, Southeast Asia and India and less rain to cropping zones in the Americas, and El Nino bringing the opposite.

A U.S. government forecaster this month assigned a 71% chance to a La Nina forming between September to November and said it could persist into March. Several other national weather forecasters also believe a La Nina is likely.

Australia’s Bureau of Meteorology has been more cautious. Its in-house climate model suggests La Nina will not develop.

“While some atmospheric indicators such as pressure, cloud and trade wind patterns over the Pacific have been more La Nina-like over the past few weeks, it remains to be seen whether these conditions will be sustained,” the bureau said in a report circulated on Wednesday.

“It is possible a La Nina may develop in coming months but if so, it is forecast to be relatively weak (in terms of the strength of the sea surface temperature anomaly) and short-lived,” it said.

If a La Nina forms this year it would be the fourth since 2020, which is highly unusual given the weather pattern has historically occurred on average every three to seven years. Wet weather brought in part by La Nina led to record-breaking harvests in Australia between 2020 and 2023. The bureau said a sustained period of record and near-record high sea surface temperatures around the world was making forecasting less certain.

Climate patterns like the swing between La Nina and El Nino “may not necessarily behave or evolve as they have in the past,” it added.

 

Rio Tinto Turns to Farming in Quest to Curb Polluting Diesel

• Miner developing seed farms in Australia under biofuel trial
• Diesel accounts for about 12% of miner’s direct emissions

Rio Tinto Group., the world’s second-biggest miner, will develop seed farms in Australia under efforts to test the potential of biofuels to curb diesel consumption.

The company intends to acquire about 3,000 hectares (7,413 acres) of land near Townsville, in northern Queensland, and to examine the possible use of Pongamia seed oil as a feedstock to develop substitute fuels.

“While we continue to pursue electrification as the long-term solution for displacing the majority of our diesel use, the Pongamia seed pilot is an important parallel pathway,” Chief Decarbonization Officer Jonathon McCarthy said Wednesday in a statement.

Biofuels could provide an option for “applications that are challenging to electrify, including blasting and non-haul equipment,” he said.

Rio consumed 1.6 billion liters of diesel at its major operations last year and spent a total of $1.6 billion on the fuel, according to the producer. Diesel is used to power more than 700 haul trucks, 350 locomotives and about 800 other vehicles, accounting for around 12% of Rio’s Scope 1 and 2 emissions, the company said.

Reducing industrial pollution, including in mining, is seen as a significant challenge. Emissions from the global industry sector have increased faster than in any other segment since 2000, Systems Change Lab, a research organization, said in a report last year.

Rio is targeting a 50% reduction of operational emissions by 2030 on 2018 levels, and aims to hit net zero by mid-century.

 

 

 

 

 

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