International Update – February 7, 2024
Daily Market Wire: Ongoing protests across the European Union prompted European Commission President Ursula von der Leyen to announce yesterday that the Commission is proposing to withdraw a plan aimed at halving pesticide use in the EU.
Von der Leyen characterized the plan as a symbol of polarization and stressed in the European Parliament that farmers deserved to have their voices heard.
Conab Brazil reports soybean planting as of February 3, 2023-24, and harvest is 14% complete (compared to 9% last year). Low rainfall in Mato Grosso has helped fieldwork progress, although later sown crops show lower yield potential than previous seasons.
In Rio Grande do Sul moisture is needed, while in Paraná, harvest is in progress amid low rainfall. First (full season) corn planting is 95% complete, with harvest at 14%. Yields have been below expectations in Minas Gerais, but dry weather has boosted progress in Rio Grande do Sul. The planting of the second (Safarinha) crop is 20% complete, with Mato Grosso showing good progress due to the dry conditions.
Brazil’s vegetable oil industry association, Abiove, has cut its 2023-24 soybean production forecast by 4.2 million metric tons from December, now estimating 156.1 million metric tons. 2024 (January/December) soybean exports are also down by 1.2 million metric tons to 98.1 million metric tons (compared to 101.9 million metric tons last year).
In other reports, Jordan’s state grain buyer purchased 60,000 metric tonnes of hard milling wheat from CHS in a tender at an estimated US$262.95/t (c&f) for shipment in the second half of April.
Japan’s MAFF is seeking 136,321 metric tons of milling wheat from the US, Canada and Australia in a tender that ends Thursday. Iran’s state feed importer, SLAL, is reportedly seeking 120,000 MT of feed barley from alternative origins and 120,000 MT of soy meal from Brazil or Argentina for March/April shipment.
WA wheat prices were seen as relatively stable in Australia’s local markets despite weakness in offshore futures and lower global FOB prices. Exporters’ buying increased at the end of the day as the AUD edged off its lows, with APW1 quinine at around A$410/t FIS and H1 at $425/t.
Feed barley prices improved and remained at $345-$350/t FIS for the Kwinana Port area. Canola (CAN) best bids are back at $660/t FIS, driving demand for GM canola at a $10/t discount.
The Reserve Bank of Australia (RBA) kept interest rates steady at 4.35%. In a statement after the meeting, the board acknowledged that inflation has eased but remains at a high level of 4.1%. While price inflation of goods had fallen faster than anticipated, inflation of services was gradually declining.
The Board cautioned about the high level of uncertainty regarding the Chinese economy, the conflicts in Ukraine and the Middle East and their potential impact on Australia’s economy, indicating that further increases in interest rates could not be ruled out.
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