TOP HEADLINES
Canada wheat production outlook slightly lowered on expected dryness in Saskatchewan
2024/25 CANADA WHEAT PRODUCTION: 33.3 [32.9–34.8] MILLION TONS, DOWN <1% FROM LAST UPDATE
Lower yield amid recent and expected dryness during the critical heading stages for wheat in the major crop producing region of Saskatchewan fractionally lowers 2024/25 Canada wheat to 33.3 [32.9–34.8] million tons. Yield estimates remain unchanged in Manitoba and Alberta. Over the past two weeks, southern Saskatchewan was mostly dry, while southeastern Alberta/southern Manitoba received above average rainfall (5-30 mm above normal). According to LSEG’s latest weather forecast, widespread warm weather will prevail over the Canadian prairies. Notably, rainfall deficits in Saskatchewan/Alberta are expected to be up to 20mm below normal, warranting attention.
FUTURES & WEATHER
Wheat prices overnight are up 7 1/2 in SRW, up 9 1/2 in HRW, up 5 in HRS; Corn is up 3 1/4; Soybeans up 4 1/2; Soymeal up $0.50; Soyoil up 0.59.
For the week so far wheat prices are down 22 in SRW, down 25 1/2 in HRW, down 17 3/4 in HRS; Corn is down 13 1/2; Soybeans down 58 3/4; Soymeal down $15.60; Soyoil down 2.58.
For the month to date wheat prices are down 4 1/2 in SRW, down 11 1/4 in HRW, up 3 in HRS; Corn is down 10 1/4; Soybeans down 32 1/2; Soymeal down $18.60; Soyoil up 2.38.
Year-To-Date nearby futures are down 13.5% in SRW, down 10.7% in HRW, down 14.2% in HRS; Corn is down 14.4%; Soybeans down 11.8%; Soymeal down 2.2%; Soyoil down 3.3%.
Chinese Ag futures (SEP 24) Soybeans down 10 yuan; Soymeal down 17; Soyoil down 40; Palm oil up 6; Corn down 6 — Malaysian Palm is up 19.
Malaysian palm oil prices overnight were up 19 ringgit (+0.48%) at 3937.
There were changes in registrations (-736 Soyoil). Registration total: 524 SRW Wheat contracts; 7 Oats; 365 Corn; 20 Soybeans; 1,567 Soyoil; 0 Soymeal; 0 HRW Wheat.
Preliminary changes in futures Open Interest as of July 10 were: SRW Wheat down 2,398 contracts, HRW Wheat up 1,159, Corn up 18,720, Soybeans down 1,307, Soymeal up 1,174, Soyoil down 5,039.
Northern Plains: Isolated showers remain possible through the second half of this week, but some areas may stay completely dry. Through the weekend and into early next week, a few systems from Canada or the Northern Rockies could slide into the region. Temperatures are beginning to trend upward for the rest of this week with above normal temperatures persisting into early next week.
Central/Southern Plains: Some areas are experiencing flooding in the Southeast Plains after soaking rains from remnants of Hurricane Beryl. Showers will remain isolated across the Central Plains into early next week and some areas across Kansas could use more moisture. The heaviest precipitation over the next five days will favor coastal and southern Texas. Conditions trend warmer by this weekend, with temperatures remaining above normal across the Central Plains into the middle of next week. Temperatures will be more seasonal in Texas.
Midwest: Eastern areas saw pockets of heavy rain as remnants of Beryl moved through on Tuesday. The rain may be wanted for some areas that have had drought conditions lately. The western Midwest will see periods of showers into early next week, but some areas may stay mostly dry. Temperatures will start to trend above normal by late this week in western areas. By late this weekend into early next week, high temperatures will approach the upper 80s to low 90s for much of the region.
Delta: Remnants of Beryl left behind areas of flooding throughout the Central and Southern Delta early this week with some locations reporting 2-4 inches of rain since Monday. Pop-up, daytime showers and storms remain possible throughout the region into early next week, but some areas across northern Arkansas and southern Missouri are in need of drier conditions after the recent heavy rainfall. One more day of cooler temperatures is expected with warmer temperatures building across northern areas this weekend. Temperatures will likely remain above normal for northern and central areas into early next week.
Canadian Prairies: Warmer temperatures are helping canola and wheat grow, especially across western areas. Above to well above normal temperatures in western areas will persist into early next week, but temperatures will remain more seasonable farther east. Rounds of scattered showers may develop this weekend and early next week as pieces of energy from a system near Alaska break off and dip south. Hit and miss showers and warmer conditions are allowing some areas to dry out after the recent active weather pattern during the end of June.
Brazil: Rain showers have been persistent in southern areas this week. More moderate to heavy showers are forecast for southern Brazil into early next week, which are not needed in the state of Rio Grande do Sul that is still recovering from flooding. Winter wheat planting and development are behind and this will not help. Safrinha corn harvest is likely continuing across central areas with drier conditions persisting. Rain coming to southern areas will slow down what remains. While cooler air lingers in southern Brazil through this weekend, temperatures are not expected to get low enough to cause widespread frosts.
Argentina: Cold and dry conditions have plagued Argentina and soil moisture across the country continues to be low for winter wheat establishment. High pressure will keep conditions dry into early next week with only slight chances for isolated showers returning towards the middle of next week. Cold temperatures will continue into this weekend with widespread frosts also being unfavorable for wheat.
Europe: Wet conditions remain a concern across Germany and France as producers try to harvest wheat between showers. Several more systems and fronts will move through northwest Europe into early this weekend, bringing unwanted rain to wet areas in France and Germany, but beneficial showers elsewhere outside of the southeast. The southeast is much hotter and drier and has had issues with wildfires and drought as well. The pattern is not favorable for turning this around.
Black Sea: Isolated showers will continue across the region into early next week, but the main storm track will stay north of the region. Dryness and drought continue to expand in most areas and even those that have seen rain recently still have large rainfall deficits this season. Little relief in the hot temperatures will also lend to additional stress on the corn and sunflower crop.
The player sheet for 7/10 had funds: net sellers of 3,500 contracts of SRW wheat, sellers of 500 corn, sellers of 5,500 soybeans, sellers of 5,500 soymeal, and sellers of 3,000 soyoil.
TENDERS
- SOYBEAN SALE: Exporters sold 132,000 metric tons of U.S. soybeans to China for 2024/25 delivery, the U.S. Department of Agriculture said.
- WHEAT PURCHASE: A group of South Korean flour mills bought an estimated 90,000 metric tons of milling wheat from the United States and Canada in an international tender
- WHEAT, BARLEY PURCHASE: Japan will import 17,810 metric tons of feed-quality wheat and 220 tons of barley for livestock use, via a simultaneous buy and sell (SBS) auction, the Ministry of Agriculture, Forestry and Fisheries (MAFF) said.
- WHEAT PURCHASE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 107,330 metric tons of food-quality wheat from the United States, Canada and Australia, in a regular tender that closed on Thursday.
- WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy 120,000 metric tons of milling wheat that can be 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
- BARLEY TENDER: Jordan’s state grains buyer has issued an international tender to purchase up to 120,000 metric tons of animal feed barley. A new announcement had been expected after Jordan made no purchase in its previous tender for 120,000 tons of barley on Wednesday
PENDING TENDERS
- WHEAT TENDER: South Korea’s Major Feedmill Group (MFG) has issued an international tender to purchase up to 70,000 metric tons of animal feed wheat.
- CORN TENDER: South Korea’s Korea Feed Association (KFA) has issued an international tender to purchase up to 68,000 metric tons of animal feed corn expected to be sourced from South America or South Africa only
- WHEAT TENDER: South Korea’s Major Feedmill Group (MFG) has issued an international tender to purchase up to 70,000 metric tons of animal feed wheat
TODAY
DOE: US Ethanol Stocks Unchanged at 23.603M Bbl
According to the US Department of Energy’s weekly petroleum report.
- Analysts were expecting 23.604 mln bbl
- Plant production at 1.054m b/d, compared to survey avg of 1.049m
CROP SURVEY: Brazil 2023-24 Soybean Output Seen at 147.9M Tons
Brazil soybean production seen about half a million tons higher than the national forecast agency’s previous est., according to the avg in a Bloomberg survey of six analysts.
- The range of estimates varied from 145.9m tons to 149.7m tons
- Brazil’s corn crop seen 1.3m tons higher at 115.5m tons
- Conab, the Brazilian national supply company, is scheduled to release its latest estimates on July 11 at 9am local time
Ukraine Grain Exports Surge to More Than 1M Tons This Season
Ukraine exported 1.13 million tons of grain and legumes in the season that started July 1, the country’s Agriculture Ministry said on its website.
- That’s a 62% increase over the 698k tons it exported at the same time last year
- Total for the current season includes:
- 320k tons wheat, 51% higher y/y
- 134k tons barley, more than double the amount from a year ago
- 673k tons corn, 60% higher y/y
- NOTE: A year ago, exports were bogged down by slow inspections under the Black Sea grain-export initiative; Russia eventually pulled out of the deal in mid-July 2023
EU 2024 Cereal Production Seen Down 5% YoY: Copa-Cogeca
EU-27 cereal production in 2024 is projected at 257.3 million tons, down 4.7% on previous season, farm lobby Copa-Cogeca says in an emailed report.
- That places 2024 harvest below 5-year trim average
- “This already worrying forecast might very well worsen in the coming weeks and months, due to the complicated weather events and the impossibility of working in the fields, sowing was thus delayed in many areas making yields very sensitive to weather conditions in the coming weeks”
- Wheat production seen 6% lower, barley 9% lower
- Most northern and central/eastern member states including Poland and France saw production drop, which is not compensated by a “serious increase” in output in Spain
- Oilseed production expected to drop 1% to 31.9m tons
- Protein crops seen 13% higher at 3.9m tons
India June Vegetable Oil Imports Rise to 1.55m Tons: SEA
India’s vegetable oil imports rose to 1.55m tons in June from 1.53m tons in May, according to the Solvent Extractors’ Association of India.
- Palm oil imports rose to 786,134 tons from 763,300 tons in May
- Soybean oil imports fell to 275,700 tons from 324,016 tons in May
- Sunflower oil imports rose to 465,647 tons from 410,727 tons in May
China expected to receive record amount of South American soybeans in July/August
Huge amounts of soybeans are currently sailing from the South American countries to China and will arrive in July and August according to LSEG agriculture trade flows. The large imports are primarily contributed to the bumper soybean harvests in South America and affordable prices. LSEG agriculture research estimated Brazil harvests 150.1 million metric tons (MMT) of soybeans this year, the second highest in history, while Argentina soybean harvest reaches 49.8 MMT, a 4-year high. Total soybean production in the two countries approaches 200 MMT, 13 MMT above the previous season. On the other hand, current 3-year low exports prices boost soybean sales in South America.
LSEG trade flows tracked 9.83 MMT of soybean arrivals in China in June, a 10% increase from the previous month, primarily from Brazil (9.02 MMT). Moving ahead, LSEG trade flows projected a total of 13.25 MMT of soybean arrivals for July. If verified, it is the highest monthly imports in history. July arrivals will primarily come from South America (Brazil – 11.40 MMT; Argentina – 1.15 MMT; Uruguay – 0.48 MMT). Additional 12.52 MMT of soybeans were projected to arrive in China during August, including 11.05 MMT from Brazil, 0.90 MMT from Argentina and 0.56 MMT from Uruguay.
China soybean imports from the U.S. dropped to 0.52 MMT in June. July and August imports from the U.S. will continue to decline until the new crop soybeans come to the market in September.
Brazil Soy Exports Seen Reaching 10.29 Million Tns In July – Anec
Brazil: 118.1 [114.3–121.5] MILLION TONS, UP 1% FROM LAST UPDATE
Rapid second crop harvest progress amid favorable late season weather increases 2023/24 Brazil total corn production by 1% to 118.1 [114.3–121.5] million tons, despite heavy rainfall prospects in the South for next week. Our current median estimate is now 3.9 million tons below the USDA’s World Agricultural Outlook Board (WAOB)’s 122 million tons, which assumes total corn sowings at 21.5 million hectares and national level yield of 5.67 tons per hectare (tph) (vs. LSEG Ag Research’s 21.6 million hectares and 5.47 tph, respectively). Brazil’s agriculture state agency (CONAB) has lately pegged corn production and area at 114.1 million tons and 20.8 million hectares, respectively. As of 07 July, Brazil’s first corn was 95% combined according to the latest CONAB crop progress report (08 July), largely in line with last year’s 96%. The second safrinha corn is 61.1% combined so far nationally, far ahead of last year’s 29.3%, thanks to favorable warm and dry weather over the past few weeks. Much wetter weather is expected throughout the South and areas to the northwest next week, which could hinder the remaining harvest, warranting attention.
Rapid winter crop harvests and positive spring crop conditions keep U.S. wheat yield afloat
2024/25 U.S. WHEAT PRODUCTION: 51.8 [49.5–53.6] MILLION TONS, UP <1% FROM LAST UPDATE
Updated weather/satellite imagery, spring crop condition scores and winter crop harvest progress slightly (<1%) increase 2024/25 U.S. total wheat production to 51.8 [49.5–53.6] million tons. Our current median estimate puts national-level winter wheat yield at 51.5 bushels per acre (bpa), up 1% from last season and 5.5% above trend yield. This leads to total winter wheat production of 36.1 [34.7–36.9] million tons, up fractionally from previous update. Production of total spring wheat is pegged at 15.7 [14.8–16.7] million tons (with durum and other spring wheat at 1.9 and 13.8 million tons, respectively), virtually unchanged from last update. A recently released Reuters Poll of Analysts (09 July) placed U.S. all wheat production at 1.91 [1.86–1.94] billion bushels, largely in line with our current median estimate, 1.90 billion bushels.
USDA’s latest Crop Progress report (08 July) continues to indicate overall healthy spring wheat conditions with 75% of the crop in the good-to-excellent (GEX) category (vs. 47% last year) and only 4% of the crop in the poor-to-very poor (PVP) category (vs. 16% last year). Vegetation densities derived from satellite imagery remain well above historical median levels throughout major producing areas of the spring wheat belt, suggesting a positive yield outlook. On the other hand, winter wheat harvest is in full swing across the Plains as well as the Upper Midwest and the West, even nearing the end ahead of schedule in many key areas including the top hard red winter (HRW) wheat producers such as Kansas, Oklahoma and Texas. At the national level, the harvest is 63% complete, a whopping 20% ahead of last year’s pace of 43%, and well ahead of the 52% five-year average. Some rains are expected late this week and next week across the Central Plains and the soft red winter (SRW) wheat belt, but should not hinder the remaining harvest too much.
Overvalued Peso Puts Brakes on Soybean Sales in Argentina
Sales of Argentine soybeans are running at their slowest in at least a decade, according to government data analyzed by Bloomberg News. Farmers on the Pampas growing belt sold 22.8 million metric tons through July 3, just 45% of the harvest. For years, farmers have shielded their balance sheets against Argentina’s volatile currency by selling just enough soy to cover bills and keeping back the rest, frustrating exporters and processors. This year, the trend has been exacerbated because the peso is overvalued.
Argentina names Sergio Iraeta new agriculture secretary
Argentina’s government named lawyer and agricultural producer Sergio Iraeta as the country’s new agriculture secretary on Monday following the resignation of Fernando Vilella.
Iraeta, who previously served under Vilella as the agricultural production and forestry undersecretary, will continue to work to “reduce the state’s bureaucratic structure and enhance the capabilities of agricultural producers,” the country’s economy ministry said in a statement.
Argentina is one of the world’s two largest exporters of soybean oil and soybean meal and a top global producer of corn and wheat. The libertarian government of President Javier Milei sees the sector as key to shoring up the country’s foreign reserves amid a severe economic crisis.
The government also renamed the agency formerly known as the Secretariat of Bioeconomy to the Secretariat of Agriculture, Livestock and Fisheries.
Fall Prepay Offers Push Ammonia Prices Higher
Ammonia fall prepay programs were launched on July 9 at $470-$490 a short ton in the Southern Plains, $500-$510 in the Corn Belt, and $515-$525 in the Northern Plains, up from June fill business at $330-$410 in the Midwest and recent prompt offers at $460-$470. Ammonia was firming, but ammonium-sulfate prices plunged in the Midwest with the launch of a summer fill program from AdvanSix at $305-$320/st out of regional terminals, well below the last prompt offers at $405-$435. Phosphates and potash were generally quiet, though China’s new supply contract for standard potash is down $34 a metric ton from last year, to $273/mt cost-and-freight from $307 in
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