Australia northern feeder cattle: Market stand off

Spanish Market: Agriculture
02/02/23

The Australian northern cattle feeder price decreased to 390A¢/kg this week from 395A¢/kg the week prior, as feedlots hold firm on low grid prices and feeder steer supply remains low as producers look to capitalise on a good season's pasture growth to get steers to the top end of feedlot intake weights.

Feedlot pricing and transactions covered a spread of 370-420A¢/kg this week with most transactions between 380-400A¢/kg. Rain in western and northern Queensland is still slowing any cattle movements in those regions forcing feedlots to pay a premium for immediate delivery feeder steers at saleyards.

Many feedlots are looking at tightening top intake weights as producers look to sell cattle as close to top weight specification as possible, as price reductions on feeder steers take a toll. Some feedlots would allow steers up to 500kg but many have been forced to drop top weights to 480kg and introduce heavy deductions for out of spec cattle delivered because mobs of cattle are coming in with average weighbridge weight of 495kg/ head. The delivery of heavier cattle is leading some feedlots to cut duration on feed to 100-105 days to combat cattle blowing processor specifications.

An influx of cattle is expected to hit the market in March and April possibly leading to further price falls, particularly as buyers are being more selective across the industry. Low rainfall will increase cattle supply, but small systems of rain are enough to disrupt cattle movements or deter producers from selling.

As United States (US) cattle herd numbers have hit lows not seen since 1962, leading to an expected decline in beef production into 2023. Australia will look to capitalise on a less competitive beef export market, alhtough this could take months to flow through to domestic meat and cattle prices. Australia's processor capacity is a major discussion point in the market, as processors increase staffing numbers and continue long term training. A housing shortage in rural communities near processors is also creating challenges for both employers and workers, as interest rate rises have yet to impact rural suburban real estate.

Angus feeder steer prices decreased marginally to 431A¢/kg this week from 434A¢/kg last week, as many feedlots remain quiet and the market continues to experience an oversupply of cattle. Supply of Angus feeder steers is expected to decrease in March, which could see prices firm. Feedlots are still reluctant to hold excess Angus cattle on feed as meat sales remain volatile.

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16/05/24

Sinking crop values weigh on US farmer profits in 2024

Houston, 16 May (Argus) — The cycle of above-average profits that has defined the US agricultural economy in recent seasons is fraying this year as crop prices slacken against elevated expenses. The domestic agricultural sector is forecast to endure a 24pc drop in net cash income this season — the sharpest year-over-year decline in the last decade — underpinned by a 6pc slump in crop sales revenue and modest growth in projected expenses, according to the US Department of Agriculture's (USDA) latest industry income statement. This retraction, which kicked off in 2023, forced many growers in key agricultural districts this season to augment non-real estate loans, slow debt repayment and restructure existing loans to meet liquidity requirements thanks in part to sliding global grain and oilseed prices. Lenders within the seventh and 10th Federal Reserve districts, which represent farmers across major growing regions, reported stronger loan demand and tightened working capital during the first quarter — signaling deteriorating farm finances. Working capital is measured as the difference between the value of assets that can be easily converted to cash and debt due within the next 12 months. Lower working capital valuation signals the ability to pay down debt could be challenged. Domestic agricultural working capital this year is estimated 17pc lower from 2023 and 6pc lower than the five-year average, according to USDA data. "Conditions in the US farm economy have tightened alongside lower prices for many key products and higher financing costs," the Federal Reserve Bank of Kansas City reported in its quarterly Ag Credit Survey . "Many lenders highlighted growing concerns about deterioration in working capital as a result of low prices, particularly for crop producers." US row-crop growers are expected to endure another season of price deterioration as global markets adjust to supply shocks stemming from the ongoing war in Ukraine that rattled wheat values and key input prices for corn and soybeans. Domestic corn, soybean and wheat farm cash prices are projected to slump for a second consecutive season by 5pc, 11pc and 15pc, respectively, according to the latest projections from the USDA's World Agricultural Supply and Demand (WASDE) report. Corn growers, specifically, face losses this season amid a 4.6mn-acre cut in planted area from last season in tandem with sinking crop values. Margins are estimated -$65.75/acre, based on the latest new-crop contract close and early-season production volume estimates, after benefiting from peak earnings at $242.33/acre in 2022. Corn is a fertilizer-intensive crop, and changes in farmer profitability can erode input prices. Urea, the most widely traded fertilizer globally, is strongly tied to front-month corn futures and domestic barge prices have sunk to levels last seen in January 2021, tracking lower front-month corn futures since the start of the 2023-24 fertilizer season. Fertilizer expenses account for nearly 40pc of annual operating costs for domestic corn growers on a per-acre basis, with seed costs comprising an average 25pc, according to Argus analysis of USDA data. Plant nutrition expenses, though, surged in 2022 and remained above average in 2023 — reflecting historically elevated fertilizer prices during the same period. The USDA forecasts a 15pc dip in fertilizer costs in 2024 for corn growers, providing some reprieve compared with the last two years despite higher seed and various overhead expenses. "Factors like the rising costs of seeds, fertilizers and other inputs as well as more strict environmental regulations, specifically on water usage, have added to the financial and administrative burden for farmers," said Donnie Taylor, Agricultural Retailers Association senior vice-president of membership and corporate relations. By Connor Hyde Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

La Nina outlook offers boost to Australian agriculture

16/05/24

La Nina outlook offers boost to Australian agriculture

Sydney, 16 May (Argus) — The outlook for Australia's crop and beef production is turning more positive in 2024-25, with the country's Bureau of Meteorology (BoM) updating its climate forecast towards a La Nina weather trend forming at the end of this year. BoM updated its El Nino-Southern Oscillation (Enso) outlook to a La Nina Watch alert on 14 May, with indicators suggesting this phase developing in late 2024. Approximately half of all watch alerts have followed with the projected Enso event occurring. Crop production and grazing conditions will likely benefit from increased rainfall should the weather trend eventuate. La Nina is associated with higher than average winter-spring rainfall from the northwest to southeast of Australia. Grain yields and production in Australia's eastern cropping regions typically increase with a La Nina. Australia experienced record production during La Nina events that occurred during 2020-23. Winter crop production peaked at 69mn t and 63mn t in the 2022-23 and 2021-22 fiscal year respectively, according to Australian Bureau of Agricultural and Resource Economics (Abares) data. The La Nina Watch alert comes as the US Department of Agriculture projected Australia's wheat production to increase by 3mn t from a year earlier to 29mn t in the 2024-25 marketing year, according to data released in its World Agricultural Supply and Demand Estimates on 10 May. Coarse grain production is also projected to rise by 4pc to 14.87mn t. But Enso weather events have limited impact on southwest Western Australia (WA). A potential La Nina is unlikely to aid WA cropping zones currently experiencing very low soil moisture levels . Increased rainfall from a La Nina developing in late 2024 may not coincide with the growing season of east Australia's wheat crops, which are typically sown during April-June and harvested in November–January. Too much rain around the harvest can damage crops and degrade quality. Floods in late 2022 damaged harvests in New South Wales, resulting in Abares at the time downgrading the state's production projections by 2mn t. Increased rainfall in east Australia will boost pasture availability for cattle producers. Increased capacity of feed may encourage producers to increase herd sizes, potentially supporting future slaughter and beef production. But the agriculture industry may be wary of the BoM's latest outlook. BoM was widely criticised after last year's El Nino declaration in September, which promoted some producers to pre-emptively destock at low prices in fear of dry conditions that did not occur. By Edward Dunlop Australia winter-spring rainfall during La Nina years (deciles) Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Australia’s live cattle exports slip back in April

16/05/24

Australia’s live cattle exports slip back in April

Sydney, 16 May (Argus) — Australian cattle exports fell in April from a month earlier as demand from Indonesia waned, Department of Agriculture Fisheries and Forestry (DAFF) data show. Live cattle exports fell by 20pc to 60,521 head in April, as Indonesian demand dropped by 16pc but still made up 86pc of the monthly total. Indonesian imports rose , likely in preparation for the end of Islamic fasting month Ramadan celebrations in early April. Total exports may have also been affected by the continued wet season in northern Australia, supporting domestic prices and motivating producers to retain stock. The fall was partially offset by increased exports to Vietnam that rose by 37pc in April from March and comprised a 14pc share of shipments. January-April exports were 20pc higher than the same period of 2023. Australia as at 3 May has used 16pc of the total quota of 672,669 head of live male cattle under the Indonesia-Australia Comprehensive Economic Partnership Agreement, according to DAFF. By Edward Dunlop Australia live cattle exports (head) Apr '24 Mar '24 Apr '23 Apr '22 Apr '21 Jan-Apr '24 Jan-Apr '23 Jan-Apr '22 Jan-Apr '21 Indonesia 51,941 62,041 26,926 35,936 39,659 129,381 97,170 102,860 138,384 Vietnam 8,290 6,041 9,580 4,688 3,713 32,037 20,721 7,730 44,367 China 0 3,500 7,160 1,609 7,061 32,306 27,003 41,439 34,600 Malaysia 290 0 0 59 1,893 1,490 1,749 879 6,667 Israel 0 501 9,252 1,596 0 2,728 19,798 13,041 11,909 Total 60,521 75,704 55,611 45,288 59,396 209,592 175,299 171,482 250,100 Source: DAFF Totals include all destinations not just those listed Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Brazil sets planting calendar for 2024-25 soybean crop

15/05/24

Brazil sets planting calendar for 2024-25 soybean crop

Sao Paulo, 15 May (Argus) — Brazil's ministry of agriculture (Mapa) released the calendar for the sanitary void period and planting window of the 2024-25 soybean crop, beginning in September. The sanitary void is a minimum 90-day period when growing the oilseed is prohibited, a phytosanitary measure to limit the proliferation of the highly destructive Asian rust fungal disease. Brazilian producers also adopt a planting calendar as a complementary measure to control the disease. It aims to streamline fungicide applications and minimize the risks of Asian rust developing resistance to the chemical products. The country's agriculture ministry defines the calendar for each state according to expected weather conditions and suggestions made by regional agencies and governments. The sanitary void of Mato Grosso state — Brazil's largest soybean producer — is set from 8 June-6 September, with planting starting soon after and finishing by 7 January. Rio Grande do Sul will begin its sanitary void as of 3 July, with field works allowed as of 1 October and planting expected to end on 28 January. The state is currently Brazil's second-largest soybean producer for the 2023-24 season, but flooding in the past weeks may hamper production . The calendar for Parana state — the third largest soybean producer this season — varies for each region. The whole state is prohibited from growing soybeans from 22 June. Some areas can start sowing on 1 September, with activities ending by 19 January. By Nathalia Giannetti 2024-25 soybean crop calendar State Sanitary Void Planting calendar Acre 22 June - 20 September 2024 21 September 2024 - 8 January 2025 Alagoas 1 January - 1 April 2025 2 April - 10 July 2025 Amapa 1 December 2024 - 28 February 2025 1 March - 8 June 2025 Amazonas 10 June 2024 - 10 September 2024 11 September -21 December 2024 Bahia 26 June - 24 September 2024 25 September - 31 December 2024 Ceara 3 November 2024 - 31 January 2025 1 February - 31 May 2025 Distrito Federal 1 July - 30 September 2024 1 October 2024 - 8 January 2025 Goias 27 June - 24 September 2024 25 September - 2 January 2025 Maranhao Region I: 3 July - 30 September 2024 Region II: 3 August - 31 October 2024 Region III: 2 September - 30 November 2024 Region I: 1 October 2024 - 8 January 2025 Region II: 1 November 2024 - 8 February 2025 Region III: 1 December 2024 - 8 March 2025 Minas Gerais 1 July - 30 September 2024 1 October 2024 - 8 January 2025 Mato Grosso 8 June - 6 September 2024 7 September 2024 - 7 January 2025 Mato Grosso do Sul 15 June - 15 September 2024 16 September - 31 December 2024 Para Region I: 15 June - 15 September 2024 Region II: 1 August - 31 Ocotber 2024 Region III: 15 August - 15 November 2024 Region I: 16 September 2024 - 14 January 2025 Region II: 11 November 2024 - 28 February 2025 Region III: 16 November 2024 - 14 March 2025 Parana Region I: 21 June - 19 September 2024 Region II: 2 June - 31 August 2024 Region III: 22 June - 20 September 2024 Region I: 20 September 2024 - 18 January 2025 Region II: 1 September - 30 December 2024 Region III: 21 September 2024 - 19 January 2025 Piaui Region I: 1 September - 30 November 2024 Region II: 1 August - 31 October 2024 Region III: 1 July - 29 September 2024 Region I: 1 December 2024 - 20 March 2025 Region II: 1 November 2024 - 18 February 2025 Region III: 30 September 2024 - 27 January 2025 Rio de Janeiro 15 June - 28 September 2024 29 September 2024 - 6 January 2025 Rio Grande do Sul 3 July - 30 September 2024 1 October 2024 - 28 January 2025 Rondonia 10 June -10 September 2024 11 September 2024 - 9 January 2025 Roraima 19 December 2024 - 18 March 2025 19 March 2025 - 26 June 2025 Santa Catarina Region I: 4 July - 12 Obtober 2024 Regions II-IV: 4 July - 1 October 2024 Region I: 13 October 2024 - 10 February 2025 Regions II-III: 2 October 2024 - 30 January 2025 Region IV: 2 October 2024 - 10 January 2025 Sao Paulo Region I: 1 June - 31 August 2024 Region II: 12 June - 12 September 2024 Region III: 15 June - 15 September 2024 Region I: 1 September - 29 December 2024 Region II: 13 September 2024 - 10 January 2025 Region III: 16 September 2024 - 24 December 2024 Tocantins 1 July - 30 September 2024 1 October 2024 - 15 January 2025 Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Brazil ups 2023-24 crop forecast to 295.4mn t

14/05/24

Brazil ups 2023-24 crop forecast to 295.4mn t

Sao Paulo, 14 May (Argus) — Brazil's national supply company Conab increased its outlook for the 2023-24 grain and oilseed crops for the first time since the initial outlook in November, amid upward revisions in expected area for the season. Conab now expects 2023-24 output at 295.4mn metric tonnes (t), up from 294.1mn t a month ago. That is 7.6pc — or 24.4mn t — lower than the previous cycle's record of 319.8mn t because of the negative effects of the El Nino weather phenomenon over main producing states. The cycle is projected to yield 3,734 kg/hectare (ha), 8.3pc below the 4,072 kg/ha in 2022-23. That also compares with the 3,744 kg/ha forecast a month ago. Estimated sowed area expanded 590,100ha to 79.1mn ha this month, which is 578,000ha down from the prior season's acreage. Soybean output rises Brazil's 2023-24 soybean crop is now set to reach 147.7mn t, up by 1.2mn t from the 146.5mn t a month ago. That is a 4.5pc drop from the 2022-23 crop's record of 154.6mn t, but is still the second largest crop in the country's history. The monthly output increase follows a higher sowed area projection of 45.7mn ha, compared with 45.2mn ha in April. That is also a 3.8pc rise on the year. The expansion more than offset the downward revision in the outlook of Rio Grande do Sul state, which was recently hit by an unprecedented flood . But Conab said that further cuts may come in the following months, when farmers begin to count losses. Conab predicts average yields to total 3,229 kg/ha, down from 3,239 kg/ha estimated a month prior and 3,507 kg/ha in the prior cycle. Corn crop also up Conab expects Brazil to produce over 111.6mn t of corn in 2023-24, including the country's first, second and third crops. That is above the previous estimate of nearly 111mn t, but down by 15.4pc — or 20.3mn t — from 2022-23 record volumes. The forecast for the grain's planted area is at 20.6mn ha, approximately 236,100ha above the prior month's estimate. This represents a 7.4pc drop from the 22.3mn ha sowed in the prior cycle. Projected yields are at 5,414 kg/ha, down from March's estimate of 5,444 kg/ha and 8.6pc below the previous crop. Winter corn — also known as the second corn crop —accounted for most of the increase. The production forecast rose to 86.2mn t from 85.6mn t, below the 2022-23 crop's 102.4mn t record. Expected yields fell to 5,388 kg/ha from 5,427 kg/ha a month ago. That is also 9.5pc below the prior cycle's yields. Meanwhile, expected acreage was revised up from the prior month by 214,000ha to almost 16mn ha. The 2022-23 second corn crop was sowed in 17.2mn ha. The summer corn cycle — also known as the first crop — is set to reach 23.4mn t, up by 133,800t from a month prior. The estimate for acreage rose by around 22,100ha to approximately 4mn ha, while yields remain projected at 5,879 kg/ha. Brazil's 2022-23 first corn crop produced 27.4mn t, yielding 6,160 kg/ha in a sowed area of over 4.4mn ha. Wheat down, cotton lint up Conab now expects Brazil's 2024 wheat production to total 9.1mn t, down by 647,300t from a month earlier. The decrease follows a 223,000ha drop in the sowed area projection to 3.1mn ha. That is 11pc below the prior season. Estimated yields remained roughly stable in May at 2,942 kg/ha, up by 26pc from a year earlier. Brazil's 2023 wheat output totaled approximately 8.1mn t, with heavy rainfall volumes in the south dropping yields to 2,331 kg/ha and acreage reaching almost 3.5mn ha. The forecast for 2023-24 cotton lint production rose by 43,500t to 3.6mn t, which is 470,200t — or 14.8pc — above the prior season's output. That reflects favorable weather in Mato Grosso do Sul and Minas Gerais states. The yearly increase is driven by a higher expected acreage of 1.9mn ha, almost 17pc above the 2022-23 season and roughly stable from a month ago. Yields rose to 1,876 kg/ha from 1,860 kg/ha in April, which is 1.6pc below the prior season. Soybean exports slightly up Conab expects 2023-24 soybean exports to total 92.5mn t, up by 200,000ha from last month's projection driven by a higher expected production this month. That compares with almost 101.9mn t of soybeans exported in the 2022-23 season. Corn exports remains set to reach 31mn t, flat from April but a drop from the 54.6mn t shipped in the prior cycle. By Nathalia Giannetti Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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