Global Ag News for July 8.24

TOP HEADLINES

China’s SinoGrain and Sanhe Hopefull Start Probes Into Toxic Tankers for Liquid Edibles

China Grain Reserves, also known as SinoGrain Group, and Sanhe Hopefull Grain & Oil Group have launched investigations after a media exposé claimed that the firms use tankers contaminated with coal-derived chemicals to transport liquid edibles such as syrup and soybean oil.

SinoGrain has instructed its subsidiaries to conduct inspections since July 2 to check if transport complies with food safety regulations, the state-owned company announced on Weibo recently. Any transport units found in violation will be blacklisted and major issues will be proactively reported to regulatory authorities, SinoGrain added.

Beijing News reported on July 2 that a long-term investigation has revealed that many general-purpose tankers carry both edible liquids and chemical liquids such as coal-derived oil. The probe busted the two above-mentioned companies. To cut costs, the tankers are not cleaned between shipments so edible oils are contaminated with toxic chemicals, the report added.

It is still unclear whether the commodities were sold to consumers and the resulting impact as authorities are conducting further investigations.

Coal-derived oil is a chemical product containing heavy metals and chemical substances such as benzene and using chemical tankers for edible oils will inevitably result in residual contamination, China Central Television reported, citing Dr. Liu Shaowei, a food safety expert.

 

FUTURES & WEATHER

Wheat prices overnight are down 9 3/4 in SRW, down 13 in HRW, down 8 in HRS; Corn is down 5 3/4; Soybeans down 17 1/2; Soymeal down $5.80; Soyoil down 0.50.

Markets finished last week with wheat prices up 7 1/2 in SRW, up 1/2 in HRW, up 13 1/2 in HRS; Corn is down 1 3/4; Soybeans up 9; Soymeal down $8.40; Soyoil up 4.37.

For the month to date wheat prices are up 7 1/4 in SRW, down 1/4 in HRW, up 12 1/4 in HRS; Corn is down 2 1/2; Soybeans up 8 1/4; Soymeal down $8.80; Soyoil up 4.38.

Year-To-Date nearby futures are down 8.9% in SRW, down 7.9% in HRW, down 14.2% in HRS; Corn is down 13.6%; Soybeans down 9.1%; Soymeal down 0.2%; Soyoil up 3.7%.

Chinese Ag futures (SEP 24) Soybeans down 16 yuan; Soymeal up 5; Soyoil down 54; Palm oil down 76; Corn down 7 — Malaysian Palm is down 25.

Malaysian markets are closed for Holiday.

 

There were changes in registrations (-37 SRW Wheat, -11 Oats, -28 Soyoil). Registration total: 524 SRW Wheat contracts; 8 Oats; 508 Corn; 20 Soybeans; 2,548 Soyoil; 0 Soymeal; 0 HRW Wheat.

Preliminary changes in futures Open Interest as of July 5 were: SRW Wheat up 1,030 contracts, HRW Wheat up 1,123, Corn up 4,564, Soybeans up 8,078, Soymeal up 4,405, Soyoil down 1,176.

 

Midwest: U.S. Plains and Midwest rainfall is expected to be limited during the next ten days except for the remnants of Tropical Storm Beryl that will move through the eastern Midwest producing 1.00 to 3.00 inches during mid-week. Mild to cool weather is expected in the central and eastern U.S. early to mid-week this week with some warming late in the week. Net drying will occur despite some shower activity periodically in the next two weeks. Temperatures will be cooler than usual early this week in both the Great Plains and western Corn and Soybean Belt and closer to normal next week

Plains: U.S. Central Plains rainfall will be minimal for the next ten days. Showers are likely in Oklahoma and northern Texas mostly early this week and then drier. Nebraska and Colorado rainfall should also be restricted for a while. Recent rain has bolstered soil moisture for summer crop development, but it also delayed some winter crop harvesting

 

The player sheet for 7/5 had funds: net buyers of 6,000 contracts of SRW wheat, buyers of 6,000 corn, buyers of 4,500 soybeans, buyers of 3,000 soymeal, and buyers of 5,000 soyoil.

 

TENDERS

• SOFT AND DURUM WHEAT PURCHASES: Tunisia’s state grains agency is believed to have purchased about 100,000 metric tons of soft wheat and about 50,000 tons of durum in an international tender for the same volume on Thursday.
• WHEAT PURCHASE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 129,660 metric tons of food-quality wheat from the United States, Canada and Australia in a regular tender that closed on Wednesday.

PENDING TENDERS

• WHEAT TENDER: Jordan’s state grain buyer has issued an international tender to buy 120,000 metric tons of milling wheat that can be sourced from optional origins
• FEED WHEAT AND BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said it will seek 65,000 metric tons of feed wheat and 25,000 tons of feed barley, to be loaded by Oct. 31 and arrive in Japan by Dec. 19, via a simultaneous buy and sell (SBS) auction that will be held on July 10.

 

 

TODAY

US Export Sales of Soybeans, Corn and Wheat by Country

The following shows US export sales of soybeans, corn and wheat by biggest net buyers for week ending June 27, according to data on the USDA’s website.

• Top buyer of soybeans: Unknown Buyers with 115k tons
• Top buyer of corn: Mexico with 309k tons
• Top buyer of wheat: Mexico with 155k tons

 

US Export Sales of Pork and Beef by Country

The following shows US export sales of pork and beef product by biggest net buyers for week ending June 27, according to data on the USDA’s website.

• Mexico bought 34.6k tons of the 59.5k tons of pork sold in the week
• Mexico led in pork purchases for the week, China bought 9.5k tons
• China led in beef purchases

 

Ukraine Harvests 1.62m Tons of Wheat as of July 5: Ministry

The grain was harvested from 482,200 hectares of land, the Agriculture Ministry says on its website. The 2024-25 season started on July 1.

• NOTE: Ukraine harvested 172,000 tons of wheat in the same period last year on 51,400 hectares, according to ministry data
• This year’s barley harvest so far at 1.56 million tons, rapeseed 285,900 tons
• Harvest progressed the most in Mykolayiv, Odesa, Dnipropetrovsk regions

 

Brazil’s 2024/25 Soybean Sales Reach 14.6% Of Expected Output – Safras

• BRAZIL’S 2023/24 SOYBEAN SALES REACH 71.8% OF EXPECTED OUTPUT VERSUS 66.1% A YEAR BEFORE
• BRAZIL’S 2024/25 SOYBEAN SALES REACH 14.6% OF EXPECTED OUTPUT VERSUS 11.1% A YEAR BEFORE

 

USDA attaché sees China 2024/25 soybean imports at 103 million T

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

“Soybean production for MY (marketing year) 24/25 is forecast at 19.6 million metric tons (MMT) based on planted area of 9.95 million hectares (Mha). The relatively low and declining soybean meal (SBM) prices since the beginning of MY 23/24 could encourage more SBM use in feed production. Post raised its forecast for MY 24/25 rapeseed production to 15.8 MMT based on a slight gain in acreage to 7.4 Mha and higher yield. … Soybean imports are forecast unchanged from Post’s previous report at 103 MMT in MY 24/25 and unchanged from Post’s estimate for MY 23/24. Stable imports for MY 24/25 are based on a slight increase in crushing demand from a modest increase in SBM consumption as lower prices allow feed mills to push up inclusion rates. Post contacts have shared their belief that strong harvests in Brazil and Argentina are expected to result once again in high carry-over in stocks at the start of MY 24/25.”

 

SOYBEAN/CEPEA: International demand and dollar keep prices high

Cepea, 5 – Soybean values moved up this week in Brazil, influenced by the firm international demand for the domestic product and price rises abroad. Moreover, some soybean growers were unwilling to close deals involving large amounts, expecting that the high exchange rate continues favoring exports and, as a consequence, boosts quotations in Brazil.

The ESALQ/BM&FBovespa Index (Paranaguá) rose 2.4% from June 27 to July 4, closing at BRL 142.63 per 60-kg bag on July 4. In June, the Index averaged BRL 138.92/bag, the highest of this year, in real terms (IGP-DI May) and 2.1% above that verified in May.

The CEPEA/ESALQ Index (Paraná) increased 2.7% between June 27 and July 4, to close at BRL 137.60 per 60-kg bag yesterday. The average in June was BRL 133.98/bag, also the highest of 2024, in real terms, and upping 2.4% in relation to May.

On the average of the regions surveyed by Cepea, soybean prices in the over-the-counter market (paid to farmers) moved up 1.6% from June 27 to July 4. In the wholesale market (deals between processors), quotations rose 2%.

BYPRODUCTS – On the average of the regions surveyed by Cepea, soymeal prices dropped 0.9% between June 27 and July 4. The soy oil quotations increased 5.1% in the same comparison, at BRL 5.918,03 per ton (in São Paulo city with 12% ICMS) on July 4.

EXPORTS – Soybean shipments totaled 13.95 million tons in June, a record for the period and 3.84% more than the volume sold in May/24 – data from Secex. In the first semester of 2024, Brazil exported 64.13 million tons, also a record, and 2.2% above that in the same period last year.

Soybean meal shipments totaled 2.09 million tons in June, 0.7% lower than in May/24, but with an increase of 4.2% compared to June/23. As for soy oil exports, they totaled 125.9 thousand tons, moving up 16.8% in relation to May/24.

The US dollar quotations dropped 0.3% comparing June 27 and July 4, at BRL 5.484 on July 4. However, from May to June, values rose 5%.

 

CORN/CEPEA: Harvest and international price drops press down values in Brazil

Cepea, 5 – The downward trend for corn prices was reinforced this week. The supply increase in the spot market, because of the good pace of the second crop harvesting, and price drops abroad pressed down quotations. Moreover, consumers in Brazil are unwilling to close deals involving large amounts. Thus, they have been receiving the product traded before, expecting new decreases.

Although sellers are more flexible regarding prices, some of them still expect increases, based on the smaller production in this season and on unfavorable weather conditions (floods in Rio Grande do Sul and the dry weather in the Southeast and in some areas of the Central-West) during the development of the crops.

From June 27 to July 4, the ESALQ/BM&FBovespa Index (Campinas, SP) dropped 2.5%, closing at BRL 56.12 per 60-kilo bag on July 4. On the average of the regions surveyed by Cepea, corn values decreased 1.1% in the wholesale market (deals between processors) and 0.2% in the over-the-counter market (paid to farmers) between June 27 and July 4.

At the port of Paranaguá (PR), quotations rose 0.3% between June 27 and July 4. In Santos (SP), prices dropped 0.9% in the same comparison. US dollar values rose in the middle of this week, but moved down 0.3% over the last seven days, closing at BRL 5.484 on July 4.

According to data from Secex, from February to June 2024, corn exports amounted only 3.47 million tons, lower than the 5.5 million tons shipped in the same period of 2023. There are roughly 30 million tons left to reach 33.5 million tons projected by Conab to be exported up to January/25.

Corn shipments totaled only 850.89 thousand tons of corn in June, below the 1.034 million tons registered in June/23 – data from Secex. Anec estimates that corn exports are likely to total from 2.49 to 4.3 million tons in July.

HARVEST – Conab indicated that the harvesting of the first and second crops hit 93.6% and 47.9%, respectively, of the total until June 30, moving up 2 percentage points and 19.9 p.p., in the same order.

Concerning the summer crop, only Maranhão, Piauí, Bahia and Rio Grande do Sul need to finish the harvesting. As for the second crop, activities are stepping up in Mato Grosso, where 62.4% of the area had been harvested until June 28 (data from Imea).

 

Iraq procures 5.9 mln tons of local wheat, official tells Reuters

Iraq has procured 5.9 million tons of local wheat in the current harvest that started in April, an official told Reuters on Saturday.

Haider Nouri, director general of Iraq’s grain board, told Reuters that Iraq expects to purchase 6.3 million tons of wheat by the end of the harvest season.

 

US Weekly Beef and Pork Production Estimates: USDA

US federally inspected beef production falls to 436m pounds for the week ending July 6 from 516m in the previous week, according to USDA estimates published on the agency’s website.

• Cattle slaughter down 15.1% from a week ago to 517m head
• Pork production down 16% from a week ago, hog slaughter falls 15.5%
• For the year, beef production is 1.6% below last year’s level at this time, and pork is 1.2% above

 

US Crops in Drought Area for Week Ending July 2: USDA

The following shows the percent of US agricultural production within an area that experienced drought for the week ending July 2, according to the USDA’s weekly drought report.

• Corn area experiencing moderate to intense drought rose to 7% vs 6% in the previous week
• Soybean area in drought increased by 2 percentage points to 9%

 

Extreme Weather Poses Risks for Chinese Crops, Power Over Summer

• Wheat, soybean, rice harvests threatened by droughts, flooding
• Temperatures forecast to be 1C to 2C above normal this month

Another exceptionally hot summer, accompanied by drought, flooding and typhoons, is risking Chinese crop harvests and lifting power demand as climate change creates more extreme weather.

In the latest developments, more than 5,000 people were evacuated and rice fields were saturated following a dike breach in Hunan province late on Friday. Authorities have issued flooding alerts in Shandong and Sichuan for this week, and warned that several major waterways – including the Yangtze and Yellow Rivers – are at risk of overflowing.

Temperatures were above-normal in June and will exceed average levels by even more this month, the National Climate Centre said in a briefing late last week. Different parts of the country are being simultaneously hit by floods, droughts and tropical storms, threatening to spur food inflation if output of wheat, soybeans, rice and corn is affected.

China will see more extreme weather events in the coming years due to the impact of climate change, Yuan Jiashuang, deputy director at the climate centre, said at the briefing. The China Meteorological Administration has begun a new round of zoning of agricultural resources, the first time they’ve done this in 40 years, to help the sector adapt, she said.

 

 

 

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