Brazil sees higher grains, oilseeds output
Brazil's 2019-20 grains and oilseeds crop is expected to reach a record of 246.4mn metric tonnes (t), 1.8pc higher than the prior cycle, with soybeans pushing up the forecast despite unfavorable weather at the start of planting.
The estimate released today by Brazil's agricultural statistics agency (Conab) is also higher than 245.8mn t estimated last month. This was the second Conab report on the 2019-20 cycle.
Total planted area was estimated at 64.1mn ha, a 1.4pc increase year on year.
Soybean sowing is poised to reach 36.7mn ha in 2019-20, or 2.3pc more on the 2018-19 acreage, Conab said. The harvest is forecast at a record of nearly 121mn t versus 120.4mn expected last month and 115mn t in the prior season.
Conab did not give a reason for the month on month estimate increase. A lack of rainfall in September and early October hampered the oilseed planting pace in states such as Parana, where the crop quality is worse in comparison to this time last year.
The output forecast for corn remained at 98.4mn t, a 1.7pc decrease from the 2018-19 production. Of this total, almost 71mn t is composed only by winter corn — the so-called "safrinha" is the main corn harvest in Brazil and takes place after the soybean harvest.
The quality of summer corn crops in the southern states of Rio Grande do Sul and Parana is good, according to Conab.
The agency also forecast cotton lint production at 2.7mn t, nearly unchanged from last month and the 2018-19 estimate.
The estimate for Brazilian soybean exports was kept at 72mn t, from 70mn t in the prior season, while corn shipments could reach 34mn t, down from a 39mn t record in 2018-19 and flat to the October estimate. Brazil is the global top exporter of the oilseed and the second-largest exporter of the cereal.
Cotton lint exports reached a record of 2mn t, up from 1.8mn last month and up from around 1.4mn in 2018-19.
By José Roberto Gomes
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New US rule may let some shippers swap railroads
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Milei's bid to open Argentina's economy passes
Milei's bid to open Argentina's economy passes
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Australia's 2024-25 wheat, barley exports to fall: USDA
Australia's 2024-25 wheat, barley exports to fall: USDA
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Yara first-quarter gas consumption higher on year
Yara first-quarter gas consumption higher on year
London, 29 April (Argus) — Europe's largest fertiliser producer Yara's European gas consumption in the first quarter was up by 26pc on the year, but remained far lower than in the second half of last year. Norway-based Yara's gas consumption across Europe in January-March totalled 29.2 trillion Btu, well above the 23.1 trillion Btu a year earlier, but drastically down from 37.5 trillion Btu in the fourth quarter last year, the company's latest quarterly report shows. Yara did not report its European ammonia production for the first quarter, but the company's global output totalled 1.74mn t, up from 1.38mn t a year earlier. Yara's first-quarter European gas consumption fell from the preceding three months, despite its average European gas costs falling to $11.70/mn Btu from $13/mn Btu. The firm's European gas costs have declined sharply since peaking at $34.50/mn Btu in the third-quarter 2022, when European wholesale prices hit all-time highs ( see price graph ). Yara's quarterly spending on European gas supplies fell to $343mn in January-March, the lowest since at least summer 2021 when the company began reporting this data, and around one third the $1.08bn peak in April-June 2022. Yara's European gas consumption also fell despite a 37pc annual increase in total fertiliser deliveries in Europe . Lower curtailments, improved production economics and "volume catch-up" had supported output, Yara said. But while European deliveries improved on the year, they remained "below normal" — particularly for nitrates — and Yara sourced a larger share of its European deliveries from its global plants, the company's chief financial officer Thor Giaever said. Yara had hinted earlier this year its ammonia assets might run at 90pc or more of capacity as the company expected to boost production this year . But one explanation for the lower gas demand compared to the previous quarter is Yara may be maximising production at more efficient plants like Sluiskil in the Netherlands and Brunsbuttel in Germany, while ramping down less efficient plants, allowing the company to maintain or increase production while consuming less gas. Yara last year curtailed 19pc of its European ammonia capacity , turning towards greater imports of ammonia to replace the lower production. And that remains key to Yara's business plans , which the company said last week focused on "further strengthening operational resilience and flexibility". Argus assessed European ammonia production prices based on the TTF front-month price at roughly a $100/t discount to northwest European import prices in its last weekly assessment on 25 April, suggesting a still-significant financial incentive to produce ammonia domestically. The European fertiliser market remains under pressure by large volumes from Russia, meaning Europe has swapped an energy dependency on Russia for a food dependency, chief executive Svein Tore Holsether said, echoing previous statements . Comparing global assets Yara consumed 54.4 trillion Btu of gas globally in January-March, down from a multi-year high of 61.9 trillion Btu in October-December ( see consumption graph ). European consumption accounted for roughly 54pc of Yara's global gas demand in January-March, well down from 61pc in the previous quarter. And Yara spent $485mn on gas worldwide in January-March, 71pc for European supply, a lower proportion than at any other point since 2021. Yara's global average gas cost was $8.90/mn Btu in January-March, 24pc below its reported European cost. That discount has been a significant driver for Yara and others to increase production abroad rather than in Europe over the past two years. Yara forecasts its European gas costs at $9.70/mn Btu and $10.50/mn Btu in the second and third quarters of this year, respectively, holding well above its global average gas costs of $7.70/mn Btu and $8.40/mn Btu during those same periods. Globally, the firm aims to produce 8.6mn t of ammonia in 2025, significantly up from 7.8mn t in 2023, it said. By Brendan A'Hearn Yara European vs global gas costs $/MMBtu Yara European vs global gas consumption million MMBtu Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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