French soft wheat areas to fall to a low in 2024: Argus

Spanish Market: Agriculture
20/12/23

Planted areas for French soft wheat are expected to fall to their lowest this side of the millennium, after two months of heavy rain undermined crop conditions.

Argus estimates the planted acreage for France's next soft wheat crop at 4.238mn hectares (42,380km²), based on results from its annual survey of French crop planting. Argus collected feedback from more than 1,200 farmers across France during the week of 7-14 December.

The figures include an estimated 54,500ha of late planting that farmers are due to sow in the coming days, and overall represent a drop of 530,000ha compared with the current marketing year's crop.

A similar scenario occurred ahead of the 2020-21 marketing year, when heavy rainfall in the autumn of 2019 resulted in 4.27mn ha of soft wheat being planted for the 2020 harvest — a year-on-year fall of 731,000ha.

Argus' latest survey found that all regions in France are expecting a year-on-year drop in planted areas for soft wheat. The areas with the highest rainfall over the past two months are largely expecting the largest drop in planted areas. The region of Nouvelle-Aquitaine suffered the greatest impact, with 445mm of cumulative rainfall over the past two months cutting areas by an estimated 29pc.

Other regions recorded 208-355mm of rainfall from 15 October to 14 December.

In addition to Nouvelle-Aquitaine, other areas in the west and south of France — Pays de la Loire, Occitan and Provence Alpes-Cote d'Azur — are expected to see planted areas fall by 20-26pc on the year.

The northern regions of Normandy, Hauts-de-France, Ile-de-France, Centre-Val de Loire and Brittany, which also suffered heavy rainfall, can expect planted areas to be cut back by around 10pc on the year.

Only the east of the country is expected to see cuts to planted acreages of 5pc and below compared with a year earlier.

As for crop conditions, crops are faring best in northeast France, where wheat was sown in early October and was able to establish itself before rain set in.

Rapeseed

Argus estimates France's planted rapeseed areas at 1.341mn ha, slightly below 1.35mn ha last season.

The rapeseed crop has generally fared much better than winter wheat. But crop conditions are worth monitoring, given a particularly low yield in 2020, when a dry spring followed wet weather in the autumn.

By Maxence Devillers and Claudia Jackson

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03/01/25

Brasil busca leilão de hidrovias e terminais portuários

Sao Paulo, 3 January (Argus) — O governo federal planeja uma série de leilões de terminais portuários e hidrovias para 2025, totalizando R$8,5 bilhões. O Ministério de Portos e Aeroportos e a Agência Nacional de Transportes Aquaviários (Antaq) serão responsáveis pelos leilões, buscando parcerias público-privadas (PPPs) que aumentarão a eficiência e expandirão as opções de transporte do país. O Brasil espera realizar 21 leilões e uma concessão em 2025. Muitas áreas do país carecem de infraestrutura adequada para o transporte de grãos e fertilizantes e são altamente dependentes do transporte rodoviário para o fluxo de carga. Portos PAR14: O terminal do porto de Paranaguá, no Paraná, movimenta e armazena granéis vegetais sólidos, como soja, farelo de soja, açúcar, trigo e milho. O leilão está programado para o primeiro trimestre de 2025, com um investimento estimado de R$529,2 milhões e uma concessão de 35 anos. O terminal terá capacidade para movimentar 6,8 milhões de toneladas (t)/ano. PAR15: Esse outro terminal de Paranaguá se concentra na movimentação e armazenamento de granéis vegetais. O projeto prevê investimentos de R$293,2 milhões e terá capacidade para movimentar 4 milhões de t/ano. O período de concessão será de 35 anos e o leilão está programado para 21 de fevereiro. PAR25: Outro terminal em Paranaguá voltado para a movimentação e armazenamento de granéis vegetais. Com capacidade para movimentar 4,3 milhões de t/ano, espera-se que os investimentos cheguem a R$564,1 milhões. O terminal será concedido por 35 anos e o leilão está programado para o segundo trimestre. MCP01: Localizado no porto de Santana, no Amapá, movimenta granéis sólidos vegetais, especialmente madeira. O terminal foi objeto de um leilão realizado em 2018, mas nenhuma proposta foi apresentada e o projeto foi reavaliado. Um novo leilão está programado para o segundo trimestre, com investimentos esperados de R$84,6 milhões e um período de concessão de 25 anos. VDC29: Um terminal no porto de Vila do Conde, no Pará, com um investimento estimado de R$716 milhões. Terá capacidade para movimentar 7 milhões de t/ano, com foco na movimentação e armazenamento de granéis vegetais sólidos, especialmente soja e milho. O leilão está programado para o terceiro trimestre, com um prazo de concessão de 25 anos. POA26: No porto de Porto Alegre, no Rio Grande do Sul, será usado para movimentar e armazenar granéis sólidos vegetais e minerais. O período de concessão será de dez anos, com investimentos estimados em R$21,1 milhões. O leilão está programado para o terceiro trimestre. SSB01: O leilão desse terminal no porto de São Sebastião, em São Paulo, está programado para o quarto trimestre. O prazo da concessão será de 35 anos, com um investimento de R$544,8 milhões. Seu foco será a movimentação e o armazenamento de granéis sólidos vegetais e minerais, com uma capacidade estimada de 4,3 milhões de t/ano. IQI16: O terminal está localizado no porto do Itaqui, no Maranhão, com um leilão programado para o quarto trimestre. A área será dedicada ao armazenamento e movimentação de granéis minerais sólidos, especialmente fertilizantes. O período de concessão será de 25 anos, com um investimento estimado em R$63,9 milhões. Canal de acesso aos portos de Paranaguá e Antonina: O projeto de concessão da infraestrutura de acesso aquaviário aos portos do estado do Paraná é inédito no Brasil. O Capex é estimado em R$1,1 bilhão, com um prazo de concessão de 25 anos. O leilão está programado para o segundo trimestre. A concessão abrangerá as funções de administração portuária relacionadas à gestão da infraestrutura, expansão, manutenção e operação do canal de acesso aos portos do Paraná. Hidrovias Hidrovia do Rio Madeira: Importante para o transporte de grãos e combustíveis, tem uma extensão navegável de 1.075 km, ligando a cidade de Porto Velho, em Rondônia, a Itacoatiara, no Amazonas. A Hidrovia do Madeira movimentou mais de 10 milhões de t em 2023, mas pode movimentar mais de 25 milhões de t/ano, de acordo com a Antaq. Os termos do projeto de concessão ainda estão sendo desenvolvidos e o leilão está programado para o segundo trimestre, com um prazo de 10 a 20 anos. Hidrovia do Paraguai: A hidrovia é importante para o transporte de minério de ferro e soja. Tem 1.323 km de extensão e vai da cidade de Ponta Porã, em Mato Grosso do Sul, até a cidade de Cáceres, em Mato Grosso. A via movimentou mais de 7 milhões de t em 2023, com potencial para atingir mais de 25 milhões de t/ano, de acordo com a Antaq. A hidrovia também conecta o Brasil à Argentina, Uruguai e Paraguai. O modelo de leilão também está sendo desenvolvido e está programado para o quarto trimestre. O período de concessão seria de 10 a 20 anos. Por João Petrini Envie comentários e solicite mais informações em feedback@argusmedia.com Copyright © 2025. Argus Media group . Todos os direitos reservados.

Viewpoint: Supply concerns drive RSO backwardation

31/12/24

Viewpoint: Supply concerns drive RSO backwardation

London, 31 December (Argus) — Strong export estimates for Australian and Ukrainian rapeseed and canola could offset lower projected levels from Canada, but EU crushers are wary about a supply shortfall for the rest of their 2024-25 crop year. The European Commission forecasts EU 27 rapeseed production at around 17mn t for 2024-25, down from average of 18.2mnt in the previous four crop years. With the EU 27 average rapeseed crush at around 25mn t, based on data from vegetable oil association Fediol, the bloc will need to find 7mn t of rapeseed and canola on the import market for its needs, which include RSO production for transformation into biodiesel. Australia, Ukraine to fill the gap? Australia, which typically delivers 50-70pc of its canola exports to the EU, is forecast to export 4.1mn t in 2024-25, according to the country's agriculture department Abares. Estimates for EU rapeseed imports from major exporter Ukraine vary. The USDA FAS Kyiv earlier this year forecast rapeseed exports from the war-torn country at around 3.6mn t in 2024/25 — a 22pc increase from 3mn t in 2023-24 partly due to expectations of decreased domestic crush levels. Argus estimates this slightly lower, at 3.4mn t — a 6pc increase from its 2023-24 export forecast of 3.22mn t — all of which is likely to make its way to EU countries. But canola production in Canada, one of the EU's key suppliers, is forecast by Statistics Canada at the lowest since 2021-22 at 17.8mn t, probably resulting in an export shortfall compared with previous years. Increased domestic crush levels and rising demand in non-EU countries such as China, Japan and Mexico, which "generally have a willingness to pay more for quality product" according to the USDA — referring to non-GMO treated canola — could reduce EU-bound flows in the coming months. Current- and new-crop RSO in steep backwardation The forward structure between rapeseed oil (RSO) fob Dutch mill current-crop 2024-25 contracts — comprising spot 5-40 days loading and February-March-April (FMA) and May-June-July (MJJ) RSO strips — and the August-September-October (ASO) new-crop contract for 2025 has moved into an unusually steep backwardation in recent months, driven by concerns about rapeseed availability before the start of the 2025-26 crop year. Argus' assessments for the ASO strip were at an average discount of around €80/t ($84/t) to FMA and MJJ contracts as of 13 December. This compares with a curve that saw current- versus new-crop contracts in contango through December 2022 and 2023. This means biodiesel producers will probably have to continue to work with thin margins. Although rapeseed oil methyl ester (RME) fob ARA range prices have followed RSO prices higher, comparatively larger gains on the feedstock outlay have pressured operations. The price spread between spot RME and RSO prices averaged $150/t in the first of half of December, compared with around $200/t in the same period of 2023. Looming agricultural trade barriers Global agricultural trade barriers that have either begun or are planned will be decisive drivers of global vegetable oil prices and trade flows in the new year. China said in September it would start an anti-dumping investigation into canola from Canada. Canola exports from Canada to China are usually between 2mn-4mnt. Indonesia plans to introduce a B40 biodiesel blending mandate in 2025 and has already introduced export permit requirements on palm oil residues, which has sent Malaysian palm oil futures to multi-year highs. In the US, president-elect Donald Trump's announcement about the imposition of 25pc tariffs on all US imports from Canada and Mexico has lead to volatility in the wider vegetable oil complex as well. By Madeleine Jenkins EU rapeseed imports by country of origin mn t Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: Crop-based feedstocks face an uphill battle

30/12/24

Viewpoint: Crop-based feedstocks face an uphill battle

Houston, 30 December (Argus) — US biofuel producers' demand for soybean and canola oil has waned recently, a trend that looks unlikely to reverse in the near term because of domestic policy changes that prioritize lower carbon intensity feedstocks. Expectations that a US renewable diesel boom would drive up demand for vegetable oil led agribusinesses to announce new soybean crush plants and expansions in 2022. Seven new soybean crush plants have come online since then, increasing US nameplate capacity by 10pc to 2.91bn bushels/yr, but new policies have diverged from crop-based feedstocks because of their higher carbon intensity. The California Air Resources Board (CARB) voted to adopt new low-carbon fuel standard (LCFS) targets on 6 November. CARB hiked the carbon-intensity reduction target of California's transportation fuels from 20pc to 30pc by 2030, in hopes of balancing the pool of oversupplied LCFS credits, which alone reduced incentives for crop-based fuels. But more critically, the new rules will impose tighter restrictions for crop-based feedstocks, capping a company's LCFS credit generation from vegetable oil-based biofuel at 20pc/yr, starting in 2028 for existing plants. Apart from that, CARB will require producers to track the point of origin of crop-based feedstocks, adding to costs. Soybean oil-based biofuel already fetches a lower LCFS credit value in California, and the additional traceability requirement could further deter biofuel producers. Soybean oil- and canola oil-based fuel made up approximately 20pc of the biodiesel and renewable diesel traded into California during the second quarter of 2024, according to CARB's most recent quarterly data. While soybean oil is the most used feedstock in US biodiesel production, used cooking oil (UCO) leads US renewable diesel production. Biofuels produced with lower carbon-intensity feedstocks like UCO, tallow and distillers corn oil receive generous LCFS credits compared to soybean oil and canola oil. That credit premium has led to a surge in UCO and tallow imports into the US , weighing on demand for soybean oil and leading to outcry from farm groups to restrict foreign feedstocks from qualifying for the Clean Fuel Production Credit (CFPC). More challenging is the expiration of the blenders tax credit (BTC) by the end of 2024, which offers $1/USG to biomass-based diesel regardless of the carbon intensity of their feedstocks. The CFPC, also known as the 45Z credit under the Inflation Reduction Act, will replace the BTC in 2025. Unlike the BTC, the CFPC will provide a tax credit based on how low the carbon intensity of the fuel is to a baseline level of 50kg of CO equivalent/mmBTU. This means crop-based diesel fuels will receive far less credit value starting next year than they received for years under the BTC. Some renewable diesel and biodiesel producers are set to idle production in January amid a lack of clarity on how the tax credit changes will impact fuel and feedstock demand. Biofuel and agriculture groups are also waiting final guidance for "climate-smart agricultural practices" and how that would factor into the final 45Z credit for vegetable oil-based biofuels. These climate-smart practices might include no-till farming, planting cover crops, efficient fertilizer use, and more. The US Department of Agriculture recently sent guidelines on climate-smart agricultural crops used as biofuel feedstocks to the White House for final review, giving the industry some hope that they will qualify for a bigger federal credit under 45Z. But how much crop feedstocks will be able to close the gap with waste feedstocks is unclear. US soybean oil futures fell to 39.52¢/lb as of 27 December, down by 17pc from the start of 2024, weighed down by the prospects of a large South American soybean crop and lackluster demand from the US biofuel industry. The US Department of Agriculture's December World Agricultural Supply and Demand Estimates report projected Brazil's 2024-25 soybean production at 169mn t, 10pc higher compared to the prior year. Argentina soybean production was forecast at 52mn t, up by 7.9pc from a year earlier. Soybean planting is ongoing in both regions, with Brazil at 98pc completion as of 22 December and Argentina at 85pc as of 26 December. Some relief from falling soybean oil future prices has come from increased US soybean oil exports, driven by palm oil prices hitting their highest level since 2022. US export commitments for soybean oil were at 526,630t as of 19 December, nearly surpassing the US Department of Agriculture's currently projected level for 2024-25 marketing year. Mexico is among the major buyers of US soybean oil, but if president-elect Donald Trump imposes 25pc tariffs on imports from Mexico , retaliatory action could affect soybean oil demand. Despite the support from soybean oil export sales, the vegetable oil industry will still need support from the US biofuel industry for prices to recover. And should palm oil prices fall, US soybean oil producers will not be able to rely as much on international markets, leaving them to lean more heavily on fighting for changes in US biofuels policy. By Jamuna Gautam Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: Brazil urea deals for corn delayed to 2025

27/12/24

Viewpoint: Brazil urea deals for corn delayed to 2025

Sao Paulo, 27 December (Argus) — Brazil is set to enter 2025 with a last-minute surge in demand for nitrogen-based fertilizers, as farmers continue to postpone purchases for the 2024-25 second corn crop. Around 10-15pc of all fertilizer needs have yet to be purchased for the corn crop, whose planting is expected to start by February in central-western Mato Grosso state. Brazilian farmers have been delaying agreements for inputs as they wait for lower fertilizer prices and higher grain prices. The most delayed fertilizer acquisition is urea, with buyers expecting further price drops before committing to volumes. Granular urea prices were at $359/metric tonnes (t) cfr Brazil by 19 December, $39/t above the same period in 2023. The overall pace of input purchases is in line with farmers' buying patterns for the 2023-24 corn crop and 2024-25 soybean crop, when growers also waited until the last minute to secure final volumes. Traditional 4Q buying surged delayed Brazilian buyers used to speed up the pace of fertilizer purchases in the fourth quarter to supply the second corn crop. This would give them time to receive the inputs in time for application, without last-minute logistic concerns. But unexpected changes in fertilizer price trends, combined with changes in the timing of the soybean crop, led farmers to change this buying pattern and wait as long as possible before concluding deals. Farmers' saw this last-minute buying strategy rewarded in early 2024 when urea prices were about $393/t cfr Brazil, below levels seen earlier in October 2023. And a delay in the 2024-25 soybean planting because of unfavorable weather conditions also contributed to postponed fertilizer acquisitions for corn, since the soybean harvest would likely be delayed and force farmers to plant corn outside the ideal period. Those factors are set to again push final urea purchases to January. Some volumes traded in November-December may discharge in ports in January, intensifying deliveries in the first months of the year. Brazil imported 7.6mn t of urea in January-November, 19pc above the same period in 2023. The latest lineup data from 26 December points to around 400,000t to be delivered at ports in December and 422,000t in January, according to maritime agency Unimar. Farmers focused on acquiring ammonium sulphate (amsul) volumes in the past three months, as prices carried a discount considering the nitrogen content compared with urea while also adding sulphur. There is plenty of available compacted/granular amsul, with Chinese producers eyeing Brazil as an outlet for the product. Imports of amsul totaled 5.1mn t in the first 11 months of the year, 18pc above the same period last year. A total of 596,000t and 1.2mn t were set to discharge in ports in December and January, respectively, according to Unimar's lineup data from 26 December. The trend is the same in the domestic market, with purchases advancing slowly. Some cooperatives and retailers bought volumes to guarantee availability when farmers decide to buy. Farmers are most advanced in theirs potash (MOP) acquisitions, as its lower-than-usual price has motivated farmers to buy the fertilizer for 2025-26 corn and soybeans. Market participants estimate that around 50pc of MOP needs in Mato Grosso for the 2025-26 soybean crop were purchased by early December. Demand has been high for the first quarter of 2025, leading to expectations of intense MOP deliveries at ports. This would mean a high flow in the inland market, competing with urea volumes handling in January-February. By Gisele Augusto Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: SE Asian IMO2 MRs to rise on EU policy

27/12/24

Viewpoint: SE Asian IMO2 MRs to rise on EU policy

London, 27 December (Argus) — Rates for specialised Medium Range (MR) tankers in southeast Asia will be driven up in 2025 by changes in EU policy on deforestation, higher biofuels blending mandates, and new mandates in the aviation sector, all of which will support exports of biodiesels, feedstocks and palm oil. Demand for specialised MRs in southeast Asia is ruled by exports of palm oil to Europe and the US Gulf coast. Palm oil does not usually need to travel on IMO2 ships and can be moved on IMO3 vessels. But it is often moved as a part-cargo of between 5,000-15,000t so is often picked up by IMO2 or IMO2/3 vessels, which are more suitable as they have a higher number of segregated tanks. Kpler data show around 6.3mn t of palm oil was exported from Indonesia and Malaysia to the US Gulf and Europe in the January-November 2024 period. Palm oil deliveries from southeast Asia have been trending lower since 2020 with the product becoming less popular in Europe because of deforestation issues. On 4 December, an agreement was reached between the European Council and the European Parliament to delay the application of the EU Deforestation Regulation (EUDR) by one year. This means larger companies will not be required to prove that their products, such as palm oil, did not contribute to deforestation until 30 December 2025. This has averted a potential rapid loss in palm oil exports to Europe in 2025 but there will probably be a substantial decline in exports later in the year as businesses prepare for the EUDR. In the short term, the decision to postpone the EUDR will probably boost cargo numbers heading to Europe as traders had been holding off for clear regulatory guidance. This will support freight rates for IMO2 MRs in the new year by pulling more IMO2/3s and IMO3s away from the market and by increasing the number of part cargoes available for IMO2s. Feedstock exports ramp up Indonesia and Malaysia also export many specialised products that require IMO2s, such as waste based feedstocks palm oil mill effluent (POME), palm fatty acid distillate (PFAD) and used cooking oil (UCO), as well as finished biodiesels like Ucome. Kpler puts exports of these products to Europe at around 2.8mn t in the first 11 months of 2024, with POME cargoes making up 42pc of all shipments or around 1.2mn t. POME was included in Annex IX Part A of the EU's renewable energy directive (RED), meaning member states can count it twice towards their renewable energy goals. Exports of feedstocks and biodiesels to Europe will probably rise in 2025 as blending mandates rise and because of a reduction in the carryover of emissions tickets in Germany and the Netherlands. Argus estimates European demand for biodiesel Pomeme to rise by around 36pc on the quarter in first three months of 2025 to around 3.5mn litres. Higher requirements for biofuels and feedstocks in Europe should push up demand for products like POME, PFAD, and UCO from Malaysia and Indonesia and support higher IMO2 demand in southeast Asia. But this could be tempered by an Indonesian ruling to include an export permit for POME and PFAD that requires participants to fulfil their cooking oil domestic market obligation. SAF mandates begin in Europe Exports of HVO and SAF from Singapore to Europe also make up part-cargo demand for IMO2 MRs. Argus forecasts European HVO demand will rise by 85pc on the quarter to 2,582mn l in the first three months of 2025. New 2pc SAF mandates in the EU and UK in 2025 will provide a sizable rise in SAF demand. This should spur a jump in cargoes loading from Singapore — driving up demand for part-cargo space on IMO2 MRs. By Leonard Fisher-Matthews Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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