World Farming Agriculture Commodity news - Weekly Updated - Exclusive and very popular -
The outlook points to a grain and oilseed farming sector that is projected to remain financially stable through the end of the current 2023/24 crop year. Although borrowing for capital expenditures remains subdued, the demand for operating lines of credit will register its largest uptick since 2013. Just as growers’ financial needs are on the rise, lenders’ collateral requirements and lending standards are tightening. While this is a logical response as banks seek to manage risk, among commercial banks, periods of retrenchment have seemingly translated into permanent, downward step changes in sector participation. The 2024/25 season will see further deterioration in the farm sector, begging the question of which banks will stick with the sector, particularly its small to midsize operators, as times get lean.
The oil market is headed into a troubled year in 2025, and crude prices may fall "much, much" lower, according to Tom Kloza, global head of energy analysis at Oil Price Information Service. The oil analyst said crude prices would experience more downward pressure in 2025 despite concerns that conflict in the Middle East could escalate and send prices higher. Traders shouldn't bet on supply disruptions in the Middle East, and the world is already so oversupplied with oil that prices are bound to drop, he said in an interview with CNBC on Wednesday. The US produced more oil than any other country in history in 2023, according to data from the Energy Information Administration. The production boom will likely last until at least 2026, Goldman Sachs previously estimated, pointing to factors like increased drilling efficiency.
Brazilian chicken meat exports totalled 485 thousand tons in September, according to the Brazilian Animal Protein Association (ABPA). At 397.1 thousand tons, export volume rose 22.1% over the same time last year. It is the second best monthly performance in the history of the sector – the highest in the series occurred in March 2023, with 514.6 thousand tons. September also recorded the second-highest monthly revenue ever obtained by Brazilian chicken meat exports, with US$953.8 million, a balance 32.6% higher than the ninth month of 2023, with US$719.3 million. The highest monthly balance in history also occurred in March 2023, with US$980.5 million. Between January and September, chicken meat exports increased 0.6%, with 3.917 million tons in the first nine months of this year, against 3.892 million in the same period of 2023. The accumulated revenue between January and September of this year reached US$ 7.273 billion, a number 4% lower than that obtained in the previous year, with US$ 7.578 billion.
Russia's agriculture ministry asked exporters at a closed-door meeting on Friday not to sell wheat by tender to international buyers below a minimum price, two sources with direct knowledge of the matter told Reuters. The recommendation introduces a de-facto price floor of $250 per metric ton on a free-on-board basis for wheat from Russia, the world's biggest exporter of the grain.The floor is set to curb exports that were flowing at high volumes in recent weeks as Russia fights domestic inflation, which is running at about 9%. Russia's Grain Exporters Union said in a statement after the meeting the ministry also told exporters to engage in direct deals with buyers without third parties, as well as not to provide Russian grain to foreign firms that won international tenders below the new price floor. "The harmful practice of recent months, caused by the vigorous activity and dumping by some 'new' exporters, must be eradicated," the union said. "Russian grain should be supplied to consumers only by Russian exporters," it added.
Earlier this week, Japan's weather bureau said that there were no signs of El Niño or La Niña phenomena at this moment, but characteristics of La Niña were approaching. La Niña usually brings less rain and worsening drought conditions which also has the potential to affect agriculture globally.
World Farming Agriculture and Commodity news - Short update - 7th October 2024
US beef exports were below year-ago levels in August while lamb exports trended higher, posting the largest volume since January, according to data released by USDA and compiled by the US Meat Export Federation (USMEF). Beef exports totalled 102,682 mt in August, down 6% from a year ago and the lowest since January. Export value fell 4% to $845.9 million. Through the first eight months of the year, beef exports were 3% below last year at 856,834 mt, but were 4% higher in value at just under $7 billion. “Beef demand in our major Asian markets seemed to lose a bit of momentum in August, but exports held up well to Mexico, Taiwan and the Middle East,” said USMEF president and CEO Dan Halstrom. “The headwinds in Asia remain formidable, but we are encouraged by the region’s ongoing tourism rebound." "The late-September removal of Colombia’s restrictions on US beef is also a positive development," he added. "While this came too late to impact the August results, it will help bolster fourth-quarter demand in Latin America."
The 2024/25 EU cereal production is estimated at 260.9 million tonnes, around 7% below the 5-year average, which represents the lowest production in the last decade. This is caused by unfavourable weather conditions affecting yields and, in part, by a reduction in cultivated area due to, among other things, excessive rain disrupting planting. The most affected crops are soft wheat and maize, while oats, barley and durum wheat production increases. The EU oilseed production in 2024/25 is expected at 29.7 million tonnes (-8% year-on-year), due to a reduction of rapeseed area and adverse weather conditions affecting sunflower. This is a significant revision from the spring short-term outlook report. By contrast, soya bean production is expected to increase by 8% year-on-year (13% above the 5-year average), reflecting an increase of soya bean cultivated area (+11% year-on-year). The EU consumption of vegetable oils keeps following a declining trend (14% below the 5-year average) as use of palm oil continues its downward trend, leading to reduced imports while exports remain stable. The 2024/25 EU sugar production will increase by up to 1 million tonnes compared to last year. This increase is driven by an increase in area, in turn driven by record high sugar prices potentially prompting farmers to switch from other arable crops. Consumption of sugar is expected to remain stable, thus leading to reduced imports.
EU milk supply is forecast to increase marginally in 2025. Assuming normal weather conditions, the continuous decline in the dairy herd (-0.7%) is expected to be counterbalanced by increasing milk yields (+1%). EU cheese production could further increase in 2025, and exports of EU cheese could benefit from competitive prices. However, the recovery of consumer demand for dairy products in general remains cautious and mixed among different dairy commodities. Indeed, the price of butter increased significantly in 2024, driven by tight supply and stable demand.
Continued structural adjustment drives a decline in EU beef production by an expected 1% in 2025. EU per capita beef consumption dropped by 1.7% in 2024 to 9.6 kg.Overall, EU pigmeat production is expected to slightly decrease by 0.5% in 2024, and 0.2% in 2025. African swine fever outbreaks remain a risk for production. For 2025, EU per capita consumption is expected to stabilize at 30.9 kg while less competitive EU pigmeat prices make exports to the global market a real challenge.By contrast, the EU poultry sector is witnessing rather good market prospects in 2024, with a 4% growth in production and a 3% increase in exports. This upward trend is expected to continue in 2025, and EU per capita consumption of poultry to reach 25.2 kg.Updated balance sheets for the marketing year 2023/24 are included in the latest short-term outlook report and are also available in the agri-food data portal.
Commodities October 13
