Could US soy industry benefit from Brazilian tax changes?
Those gains for soy and corn were supported by Brazilian tax changes, said the UK analysts and other commentators.
The new measures limit the ability of Brazilian commodity exporters and processors to use tax credits, thereby hampering their competitive edge in international markets. The change in tax rules could make Brazilian corn less attractive, potentially shifting export demand back to the US. Similarly, the measures could result in a 4% reduction in prices paid to Brazil’s soybean farmers, weakening the appeal of Brazilian soybeans in favor of US beans.
In a report by Reuters last week, Arlan Suderman, chief economist at StoneX, mentioned that Brazilian soybean processors and biofuel producers will incur higher tax costs and lower margins. Suderman indicated that this revenue loss is set to move some crush and biofuel operations to Argentina and the US, although he said the extent of this shift remains uncertain.
Wheat prices
Turning to other crops, and wheat futures for July-24 were trading 2.6% lower in Chicago, setting course for what would be a ninth successive negative session, noted CRM Agri’s review, released yesterday.
In London, feed wheat for November-24 dipped by 1.9% to fall below £205/t (US$261/t) for the first time in five weeks. In Paris, losses were limited by softness in the euro because of political uncertainty posed by far-right success in EU Parliament elections. A weaker euro boosts the competitiveness of eurozone exports, such as wheat, according to the UK analysts.
Turkish wheat import curbs
Price pressure on wheat was enhanced by Turkey’s announcement on Friday that it would halt wheat imports for four months, until mid-October, to support domestic prices for its farmers, continued the CRM Agri report. The USDA had forecast that Turkey, as the world’s fifth-largest wheat buyer, would import 10.5 million tons of wheat in 2024/25.
Declines in wheat prices partly reflect increased expectations for rains to stabilize dryness-tested Black Sea crops, added the CRM Agri team. Romania and western Ukraine are poised for rainfall this week, with southern Russia also forecast for precipitation, although temperatures will remain warmer than usual. However, the grain and oilseed market specialists believe that, in many areas, the rainfall will arrive too late to promote grain fill and repair yields.
Uncertainties remain around rapeseed output
Whilst uncertainties continue regarding the EU’s rapeseed production due to adverse weather and acreage shift, the Canadian canola crop is progressing well, reads a market outlook from AHDB.
“A crop report from Saskatchewan, the largest producing province of canola in Canada, shows planting progress is now at 94%, up from 77% the previous week. Albeit this falls below the five-year average of 97% due to crop damage caused by frost and hail.”
EU grain crop forecasts
Meanwhile, in the EU, Coceral, in its third forecast for the 2024 crop, projects the total grain crop in the EU-27+UK at 296 m tons. This marks a slight increase from the previous forecast of 295.5 m tons and a rise from the 292.8 m tons harvested in 2023. Wheat production is expected to reach 134.5 m tons compared to 134.1 m tons in the March forecast, but down from 139.9 m tons last year. Record rainfall late last year significantly impacted winter cereal sowing in northwestern Europe, particularly in France, Germany, the UK, the Baltics, and Poland. However, Spain’s output is set to rise compared to 2023.
The EU-27+UK barley production for 2024 is now forecast at 59.9 m tons, a decrease from 61.2 m tons in the previous forecast but an increase from the 54.4 m tons harvested in 2023. Denmark, Finland, and Spain are expected to have better barley crops than in 2023.
The preliminary forecast for the EU-27+UK corn crop is now 64.8 m tons, up from 64.3 m tons in the March forecast and an increase from the 63.8 m tons harvested in 2023. The EU-27+UK rapeseed crop is projected at 19.4 m tons, a decline from last year’s 21.4 m tons.
GB animal feed production data
AHDB also reports on the latest GB animal feed production data, which shows year-on-year rises in feed for poultry and dairy cows, reflecting delays in turning cattle out for grazing after winter.
