• Bloomberg reported that money managers’ wagers on the Chicago grain markets are the most bearish since 2006 as the outlook for more abundant supplies and lacklustre demand weigh on prices. According to US Commodity Futures Trade Commission data, hedge funds’ combined net short positions in corn, wheat and soybean futures traded on the Chicago Board of Trade expanded for an 8th straight week as of 20 February.

• According to Bloomberg also, shares of top fertiliser companies have been rising on expectations that tight supplies and strong farmer demand for crop nutrients will spur a rebound on profitability this year. Companies are now touting brighter outlook as lower agricultural inflation could free up spending on fertiliser and China’s restriction on exports could squeeze global supplies. Nutrien Ltd, which is one of the largest potash manufacturers in the world, expects South-East Asia to be its single largest contributor of potash demand growth in 2024F, with about 2mil tonnes of shipments.

• According to a Reuters poll, raw sugar prices are expected to post an annual gain of nearly 20% in 2024F as the global market shifts into a deficit in the upcoming season. Sugar is set to close the year at 24.5 US cents/pound, 19% above the levels at the end of last year. Output in centre-south Brazil is expected to remain strong despite a modest drop in the cane crop, with mills favouring production of the sweetener over biofuel ethanol. However, a drop in production is envisaged in India. The poll’s estimate is for a global sugar surplus of 500,000 tonnes in 2023/2024F, which will flip into a deficit of 700,000 tonnes in 2024F/2025F.

• Business Times of Singapore reported that rates of parboiled rice exported from India climbed to fresh record highs a few weeks ago on limited supplies and a slight improvement in demand while Vietnam prices slipped as stocks built up. India’s 5% broken parboiled variety was quoted at record US$546/tonne to US$554/tonne a fortnight ago, up from US$542/tonne to US$550/tonne in the previous week. An Indian trader said that although prices have risen, buyers do not have many options as Indian rice is still cheaper than other places.

• Reuters reported that Ukrainian farmers are reviewing their planting plans for 2024F after low corn prices led to steep losses last year. However, their ability to switch to soybeans is limited by scarce funding. Farmers in the southern regions of Ukraine have started spring sowing with barley but still have time to decide whether to sow corn, which have been causing losses of more than US$50/tonne for producers. Ukraine’s farm ministry said that the areas sown for corn could decrease 9% this year but others expect a smaller decline. The International Grains Council said that the YoY decline would just be 1.4%.

Source: AmInvest Research - 4 Mar 2024