Tereos slows sugar output as TotalEnergies halts fuel supplies

PARIS (Reuters) – France’s largest sugar maker Tereos had to slow output slightly at some factories after TotalEnergies said ongoing strikes at its refineries would prevent it from supplying diesel fuel until the end of the week, a spokesperson said on Thursday.

Strikes over wage demands have disrupted the French oil giant’s products refining and delivery for the third day on Thursday, threatening supplies at a time of deepening energy instability.

“TotalEnergies has warned us yesterday that we would not be supplied this week,” a Tereos spokesperson said in answer to a Reuters question.

“We found substitution supplies to last until at least the end of the week but there have been some adjustments made in production rates,” she added. She did specify how much production had slowed, and said the slowdown did not affect all sites.

Tereos provides farmers with fuel for the trucks that bring sugar beets from the fields to the factory where they are processed into sugar and ethanol.

Cristal Union, France’s second-largest sugar maker, was not facing disruption to lorry fuel supplies, the group told Reuters.

This comes just as French sugar producers are trying to speed up production ahead of possible energy restrictions or shortages this winter if Russia cuts off gas supplies.

Sugar production is among the most energy-intensive industries. French factories, which usually run between mid-September to late January or early February, are highly reliant on gas to transform their sugar beets into the sweetener.

(Reporting by Sybille de La Hamaide; Editing by David Gregorio)

U.S. farmers urge Washington to challenge Mexico’s looming ban on GM corn

By Cassandra Garrison

MEXICO CITY (Reuters) – Farmers in the United States are urging their government to challenge a looming Mexican ban on genetically modified (GM) corn under a regional free trade agreement, warning of billions of dollars of economic damage to both countries.

A late 2020 decree by Mexico President Andres Manuel Lopez Obrador would phase out GM corn and the herbicide glyphosate by 2024. Supporters of the ban say GM seeds can contaminate Mexico’s age-old native varieties, and point to research showing adverse effects of glyphosate.

Mexico prides itself as the birthplace of modern corn but it imports about 17 million tonnes of U.S. corn a year and is on track to import even more this year, experts said.

Some in Mexico’s government, including Agriculture Minister Victor Villalobos, have signaled that yellow corn imports for livestock feed will not be disrupted. U.S. farmers remain wary since no official document states that, according to a U.S. agriculture official familiar with recent meetings with Mexican officials.

Also, Lopez Obrador this month said firmly: “We do not accept GMO corn.”

Corn for human consumption, including white corn used in food products like tortillas, accounts for between 18% and 20% of Mexico’s total U.S. corn imports. There are still questions about whether such GM imports will be eliminated by 2024.

Mexico’s health regulator COFEPRIS has not authorized new strains of glyphosate-resistant GM corn seeds for import since 2018. The National Corn Growers Association, representing U.S. farmers, wants the U.S. Trade Representative (USTR) to launch a dispute settlement proceeding under the USMCA trade pact, which includes Canada and Mexico.

Angus R. Kelly, the association’s director of public policy, trade and biotechnology, said it objects to the “precedent-setting nature of the decrees” and to Mexico rejecting biotech crop traits “without any scientific basis.”

Washington could potentially raise a dispute under the agriculture chapter of the USMCA stipulating cooperation between members on an individual government’s regulation of imports, according to Raul Urteaga, a former Mexican government official and founder of consulting group Global Agrotrade Advisors.

A dispute settlement can apply under some USMCA chapters when a country considers one member government has nullified or impaired a benefit that was in place when the pact was signed.

Mexico’s agriculture ministry and the U.S. embassy in Mexico declined to comment. The USTR and the USDA did not respond to requests for comment.

Biotechnology Innovation Organization (BIO), representing biotech companies including Bayer, said it “supported the (U.S.) administration taking enforcement action on Mexico’s treatment of agricultural biotechnology” if dialogue fails.

Federico Zerboni, Argentina-based president of agriculture chamber MAIZALL which sent a delegation to Mexico in August, said denial of new GM seeds made it seem like Mexico’s regulator favors a “very old and unfeasible production system to feed the world.”

COFEPRIS, in a statement to Reuters said its decisions were based on “scientific evidence and risk assessments.”

In 2020, Bayer agreed to pay billions of dollars to settle lawsuits by people who claimed they were harmed by its weedkiller.

A March report by the U.S. consulting firm World Perspectives Inc projected that Mexico’s ban could cost the country $4.4 billion over 10 years for corn imports, push the price of tortillas up 42% by the second year and cause major risks to food security.

    The United States could see a $16.5 billion drop in economic output over 10 years, the report found. It did not differentiate between white and yellow corn.

(Reporting by Cassandra Garrison, additional reporting by Tom Polansek in Chicago and Andrea Shalal in Washington; Editing by David Gregorio)

Droughts, Ukraine war push global grain stocks toward worrying decade low

By Tom Polansek

CHICAGO (Reuters) – The world is heading toward the tightest grain inventories in years despite the resumption of exports from Ukraine, as the shipments are too few and harvests from other major crop producers are smaller than initially expected, according to grain supply and crop forecast data.

Poor weather in key agricultural regions from the United States to France and China is shrinking grain harvests and cutting inventories, heightening the risk of famine in some of the world’s poorest nations.

Importers, food manufacturers and livestock producers had hoped crop availability would improve after war-torn Ukraine resumed shipments from Black Sea ports this summer and U.S. farmers planted large crops. But the United States, the world’s top corn producer, is now expected to harvest its smallest corn crop in three years. Drought also punished European harvests and is threatening South America’s upcoming planting season.

By the end of the 2022/23 crop year, the world’s buffer stocks of corn will be enough for just 80 days’ worth of consumption, down 28% from five years ago and the lowest level since 2010/11, according to figures compiled for Reuters by the International Grains Council, an intergovernmental organization.

That would be fewer days of corn stocks than the world had in 2012, when the last global food crisis spurred riots.

Policymakers are worried.

The World Bank has earmarked $30 billion to help offset food shortages worsened by war, and U.S. President Joe Biden last week announced nearly $3 billion in additional funding to combat global food insecurity.

Half a million Somali children face hunger in the worst famine anywhere this century, according to the United Nations, as a severe drought grips the Horn of Africa.

Thousands of miles away in the United States, South Dakota corn grower Mark Gross expects to harvest as few as 20 bushels per acre on some fields this autumn, down more than 80% from the local average last year, after drought and fierce winds ravaged his land.

Gross said the weather remained too dry in the spring and then two derecho windstorms brought destructive 100-mile-per-hour (160 kph) gusts across fields in Hutchinson County and southeastern parts of the state.

“It’s lining up to be like 2012,” Gross said. “No one wants to admit it, but it’s true.”

Tight grain supplies reflect the impact of climate change on crop production as well as growing global demand for livestock that feed on corn, eating away at stockpiles. Inventories of all harvested grain on hand globally will reach an eight-year low at the end of this crop year, the International Grains Council said on Thursday.

More poor weather could further reduce global inventories, particularly if the current dry weather in South America continues into the main planting season, as the crop cycle shifts to the southern hemisphere.

Crop forecasts in Argentina, the world’s No. 3 corn exporter, are already being scaled back due to dry weather.

Graphic: World corn supply slumps to 12-year-low https://graphics.reuters.com/GRAINS-FORECAST/jnvwemqoovw/chart.png

‘VERY LITTLE WATER’

In the Mayenne region in northwestern France, the European Union’s top grain-producing country, farmer Dominique Defay, said some corn plants have few ears and he is bracing for a crop 35% below his average.

He had been hoping for at least 135 bushels per acre, near the low-end of his five-year average. He may get only about 90 bushels after France suffered its worst recorded drought since 1958.

“These are crops that have had very little water,” Defay said.

On average less than 1 cm of rain fell across France in July. River tributaries dried up as successive heatwaves and wildfires devastated the countryside.

EU production is expected to hit a 15-year low, a decline that will push the bloc to increase 2022/23 imports from Ukraine by about 30% from the previous year to 10.4 million tonnes, consultancy Strategie Grains said.

Bigger European import demand means less for places like the drought-stricken Horn of Africa.

Ukraine’s exports of corn and wheat have risen since a U.N.-brokered deal with Russia allowed shipments to restart from ports that had been blockaded since the war started. But it remains to be seen how much Ukraine can export, especially if the war drags on.

“It’s sort of a false hope that Ukraine is going to bridge the current gap in supply and demand,” said Gary Blumenthal, head of Washington-based agricultural consultancy World Perspectives.

Ukraine is expected to harvest 25 to 27 million tonnes of corn in 2022, down from 42.1 million tonnes in 2021, following Russia’s invasion, according to official estimates.

Sanctions related to the war mean Russia has also struggled to export what is expected to be a record-large wheat crop.

Shipments of wheat and other agricultural products from Ukraine have been a fraction of pre-war levels, said Kevin Hack, a global vice president for ingredients supplier Univar Solutions.

“The supply that’s coming from that area can be cut off at a moment’s notice,” he said.

SOUTH AMERICAN HOPES

Farmers in China meanwhile, have grappled with dryness, threatening crops, while India has limited rice exports due to poor weather.

Agricultural lender Rabobank said the next U.S. wheat crop is also at risk and will be planted in dust this autumn unless rains fall. That is “a recipe for another tough crop production year and strong support for prices,” Rabobank said.

A ratio that factors in U.S. wheat inventories compared to usage and that reflects stockpile levels is expected to drop to a nine-year low in 2022/23, according to Reuters calculations of government data. The same ratio is also predicted to hit a nine-year low for U.S. soybeans.

“We end up, on the balance sheets, finding that it will be another year where global consumption exceeds global production,” said Dan Basse, president of consultancy AgResource.

Importers are setting their sights on South America, where Brazilian farmers are expected to produce record corn and soybean crops in 2023, according to analysts and the government. Farmers hope for better weather for soy plantings that are under way, after dryness spoiled part of last season’s harvest.

In Argentina, though, the Rosario Grains Exchange predicts plantings that just began for the 2022/2023 corn crop will fall 7% from last season to 8 million hectares (20 million acres) due to a familiar problem – drought.

    The Argentine government has also capped export of the crop, which will be planted in coming weeks, at an initial 10 million tonnes, compared to 36 million tonnes in the 2021/22 corn season.

    “If this were a race, farmers are starting in last position with trouble in their engine,” Cristian Russo, the exchange’s head agronomist, told Reuters. “The situation is extremely complex, the most complex season we’ve had this century so far.”

(Reporting by Tom Polansek in Chicago, Gus Trompiz in Paris, P.J. Huffstutter in Bloomington, Illinois, and Maximilian Heath in Buenos Aires. Additional reporting by Karl Plume in Chicago, editing by Caroline Stauffer and Ross Colvin)

Inflation, spending cuts undermine Biden’s hunger policy

By Christopher Walljasper

CHICAGO (Reuters) – Grace Melt made her first visit to the Nourishing Hope food pantry on Chicago’s North Side in August. Throughout the COVID-19 pandemic, she used food stamps issued by the federal government to buy groceries while out of work for a knee injury.

But this summer, the food stamps couldn’t keep up with the grocery store’s rising prices, sending her in search of a food donation for the first time.

“It’s definitely not enough. It never lasts ’til the end of the month,” she said of the food stamp benefits. “And now they’ve increased prices… So now you have to resort to coming here to a food pantry, to fill in.”

Rising hunger is a problem for U.S. President Joe Biden as he gears up to host the first White House Conference on Hunger, Nutrition and Health in more than 50 years and pledges to eliminate hunger in the United States by 2030. Voters may punish his Democratic Party for inflation in November’s mid-term elections in a year the economy has been top of mind for voters, according to a Reuters/Ipsos poll.

The Biden administration increased funding for food stamps nearly a year ago, but at the same time has purchased about half as much food as the Trump administration did in 2020, for food banks, schools and indigenous reservations, according to data obtained from a U.S. Agriculture Department(USDA) source.

Escalating food prices are eroding the reach of food stamps, which average around $231 per person per month in 2022, according to USDA data, sending more people to food banks, that are in turn receiving less food from the government.

The Consumer Price Index (CPI) for food at home climbed to 13.5% year-over-year in August, the largest 12-month increase since 1979, according to the Bureau of Labor Statistics. Food prices have been near record highs globally since Russia’s invasion of major grains producer Ukraine.

Hunger rates this summer also rose to levels not seen since early in the pandemic when lockdowns threw supply chains into chaos.

“This is a problem that started to get better in 2021 and then rapidly got worse,” said Vince Hall, Chief Government Relations Officer for Feeding America, the nation’s largest network of food banks. “Most of America’s food banks are seeing the lines grow with each passing week.”

Some advocates argued for spending more on food stamps or cash distribution, which give people more choice than food handouts and also benefit local businesses. A Trump administration food box program was criticized as inefficient and ended by the Biden administration, which also put cash in families’ pockets through expanded child tax credit payments until they expired last December.

Food insufficiency for families with children climbed to 16.21% by July 11, when nearly 1 in 6 families reported sometimes or often not having enough to eat, according to the U.S. Census Bureau’s Household Pulse Survey, the highest since December 2020. Hunger among children had fallen to a pandemic-low of 9.49% in August 2021, due in part to the child tax credit payments, according to the U.S. Census Bureau.

‘WE JUST MAKE DO’

Hunger eased in 2021 after both the Trump and Biden administrations distributed pandemic-benefit payments for families to purchase groceries, delivered billions of pounds of emergency food boxes and sent out monthly child tax credit payments. [L1N2QG1LZ]

But as pandemic restrictions eased, so did the appetite for congress and some states to fund hunger prevention efforts.

In fiscal year 2020, the U.S. Department of Agriculture spent $8.38 billion on nearly 4.29 billion pounds of food bound for food pantries, schools and indigenous reservations. But food spending dropped steadily by nearly 42% from 2020 to 2022, poised to reach $3.49 billion, the lowest since 2018. The agency bought just 2.43 billion pounds of food in the last year, according to the data acquired by Reuters.

The USDA endeavored to offset the fall in outright food purchases with additional Supplemental Nutrition Assistance (SNAP) benefits, also known as food stamps, adding nearly $31 billion from 2020 to 2022. But that additional aid has been limited by higher food costs, states letting emergency pandemic declarations expire and strict criteria on who qualifies.

James Carvelli, who works in construction, said the Nourishing Hope food pantry keeps him fed when work is slow. He doesn’t qualify for food stamps, and has noticed when the pantry runs low on some items.

“We just make do – They’ve got what they got, and I appreciate it,” he said.

The USDA recently announced it will purchase an additional $943 million in food through 2024, using Commodity Credit Corporation funds, normally set aside for loans and payments to U.S. farmers to offset disasters or low commodity prices. The added funds still leave the USDA poised to spend less on food in the coming years than in 2020 and 2021, despite ongoing need.

Asked to comment, the Agriculture Department pointed to a drastic cut in pandemic funding authorized by Congress that limited the agency’s spending power for food banks and schools, many of which have canceled summer meal programs.

Hall, of Feeding America, lamented the cutting of some additional food assistance measures from the $430 billion Inflation Reduction Act signed into law in August, including investment in child nutrition and a permanent summer EBT program, a benefit designed to fill the gap when school meals are not available.

“There were things in earlier versions of this bill… that were extraordinarily important priorities for fighting hunger, that unfortunately were not in the final version,” he said.

SLIM PICKINGS

This year, the USDA is on track to buy just over half the food it purchased during the height of the pandemic, while donations from grocery stores and food distributors have waned as businesses tighten supply chains and minimize waste.

The Greater Chicago Food Depository, one of the nation’s largest distributors of food to local food pantries, expects this year to get just over a third of the food it received from the USDA during the 2021 fiscal year (July 2020 to June 2021).

While food supplies shrink, inflation is pushing more Americans toward food pantries for the first time. Chicago-area food pantries saw an 18% increase in visitors in July, versus a year earlier, according to the Greater Chicago Food Depository.

In October of 2021, the USDA increased food stamp allotments by updating the Thrifty Food Plan, the agency’s measure of a basket of household grocery items. Food stamp benefits for fiscal year 2022 are on track to reach $114.9 billion, down slightly from 2021 but 36.87% more than in 2020. Food stamps made up less than 2% of U.S. government spending in 2022, according to U.S. Treasury data.

But 18 states that have ended emergency declarations have seen a reduction in SNAP monthly allocation per person, effectively forgoing the additional food stamp funding, according to a Reuters analysis of USDA data.

In August 2022, the agency announced a cost-of-living adjustment beginning Oct. 1, increasing maximum monthly SNAP allotments for a family of four from $835 to $939 a month.

But many who visit food pantries still work or are on social security, disqualifying them from food stamps, like Michael Sukowski, a retired college administration employee whose SNAP benefits were cut due to a monthly pension he receives from the state.

“Social security and a small pension of $153 a month. It doesn’t go very far,” he said. “Half of that goes to paying my rent. Then there’s utilities.”

Nourishing Hope food pantry, which has seen a 40% increase in visitors this year, and other food pantries are now purchasing more food at higher costs. That’s led to inconsistent supplies of staples such as bread, meat and cheese.

“The pickings were slim, so to speak. But I’m grateful I got some stuff,” said Melt as she packed her food items into a pushcart, preparing for a bus ride home.

“Sometimes you have to come to a place like this. Sometimes you have nothing,” she said.

(Reporting by Christopher Walljasper; Editing by Caroline Stauffer and Claudia Parsons)

Ukraine ports have shipped around 4.7 million tonnes of food under grain deal – ministry

KYIV (Reuters) – A total of 211 ships with 4.7 million tonnes of agricultural products on board have left Ukraine so far under a deal brokered by the United Nations and Turkey to unblock Ukrainian sea ports, the Ukrainian infrastructure ministry said on Saturday.

The ministry said eight ships with 131,300 tonnes of agricultural products are due to leave Ukrainian Black Sea ports on Saturday.

Ukraine’s grain exports slumped after Russia invaded the country on Feb. 24 and blockaded its Black Sea ports, driving up global food prices and prompting fears of shortages in Africa and the Middle East.

Ukraine, a global major grain producer and exporter, shipped up to 6 million tonnes of grain per month before the war.

Three Black Sea ports were reopened under a deal signed on July 22 by Moscow and Kyiv and the ministry has said these ports are able to load and send abroad 100-150 cargo ships per month.

(Reporting by Pavel Polityuk. Editing by Jane Merriman)

Ukraine 2022/23 sunoil output seen at 3.5 to 4.9 million T – analyst

KYIV (Reuters) – Ukraine’s sunflower oil output could total between 3.5 and 4.9 million tonnes in the 2022/23 season compared with 5 million tonnes in 2021/22, analyst APK-Inform said on Saturday.

The consultancy said in a report that sunoil exports could be between 3.0 and 4.6 million tonnes in 2022/23 depending on the sunflower seed harvest and the logistical situation.

(Reporting by Pavel Polityuk; Editing by David Clarke)

Analyst APK-Inform raises Ukraine’s 2022 grain crop forecast

KYIV (Reuters) – Ukraine’s 2022 grain harvest could total between 54.1 to 55.7 million tonnes compared with a record 86 million tonnes due to the Russian invasion which has reduced the harvested area, analyst APK-Inform said on Saturday.

The consultancy said in a report that the harvest could include 19 million tonnes of wheat, 30 million tonnes of corn and 5.5 million tonnes of barley.

It said a smaller harvest and logistical difficulties could cut 2022/23 July-June exports to between 22.6 and 38.8 million tonnes.

(Reporting by Pavel Polityuk; Editing by David Clarke)

Advisory: Story on U.S. ethanol plant emissions is withdrawn

(Reuters) – Reuters is withdrawing a Sept. 8 article that compared carbon emissions from U.S. ethanol plants and oil refineries because of its flawed interpretation of data on ethanol-plant pollution and fuel-production capacity. That led to inaccurate estimates of carbon emissions for individual ethanol plants named in the story.

STORY_NUMBER: L8N30E5AE

STORY_DATE: 08/09/2022

STORY_TIME: 1000 GMT

Ukraine starts 2022 corn harvest, ministry says

KYIV (Reuters) – Ukrainian farms have started the 2022 corn harvest, threshing 92,200 tonnes of the commodity from 0.5% of the sown area, the agriculture ministry said on Friday.

The ministry said in a statement that the corn yield stood at 4.41 tonnes per hectare.

The ministry has said Ukraine could harvest 25 to 27 million tonnes of corn this year versus 42.1 million tonnes in 2021 and the Russian invasion was the main reason for the decrease in the harvest.

Ukraine is a major global grain producer and exporter but is likely to register a significant drop in output this year, falling to about 50 million tonnes from a record 86 million tonnes in 2021 because of the invasion.

The ministry said farmers had harvested a total of 26.1 million tonnes of grain from 61% of the sown area in 2022 as of Sept. 23. and the average grain yield stood at 3.84 tonnes per hectare.

It said the country had completed its 2022 wheat harvest with output at 19.2 million tonnes in bunker weight and the yield at 4.1 tones per hectare.

Farms also harvested 5.5 million tonnes of the barley from 100% of the area and 250,700 tonnes of peas from 98% of the sown area.

(Reporting by Pavel Polityuk; Editing by Gareth Jones)

Nearly 1 million people face starvation in hunger hotspots – U.N. agencies

By Maytaal Angel

LONDON (Reuters) – Nearly one million people in Afghanistan, Ethiopia, South Sudan, Somalia, and Yemen are starving or will face starvation this year in the absence of aid, as the global food crisis worsens, United Nations agencies warned on Wednesday.

Local conflict and weather extremes remain the primary drivers of acute hunger, aggravated this year by economic instability linked to the ripple effects of the COVID-19 pandemic and the Russia-Ukraine war.

“The severe drought in the Horn of Africa has pushed people to the brink of starvation. Acute food insecurity is rising fast and spreading across the world. Without a massively scaled up humanitarian response, the situation will likely worsen in the coming months,” said the head of the U.N. Food and Agriculture Organisation (FAO).

Although global agricultural commodity prices have come off record highs in recent months, local food prices in several countries remain high and risk heading back up if a U.N.-brokered deal to boost Russian and Ukrainian grain and fertiliser shipments collapses.

Ukraine is the world’s fourth largest grain exporter, while Russia ranks third for grain and first for fertiliser exports.

According to the FAO’s quarterly ‘hunger hotspots’ report, co-authored by the U.N. World Food Programme (WFP), high prices for food, fuel and fertiliser have forced advanced economies to tighten monetary policy. This has increased the cost of credit for low-income countries, constraining their imports and forcing them to introduce austerity measures.

“These trends are expected to increase in coming months, with poverty and acute food insecurity rising further, as well as risks of civil unrest driven by increasing socio-economic grievances,” said the report.

(Reporting by Maytaal Angel; Editing by Peter Graff)

Around 3.7 million tonnes of food left Ukraine ports under grain deal – ministry

KYIV (Reuters) – A total of 165 ships with 3.7 million tonnes of agricultural products on board have left Ukraine under a deal brokered by the United Nations and Turkey to unblock Ukrainian sea ports, the Ukrainian infrastructure ministry said on Sunday.

The ministry said 10 ships with 169,300 tonnes of agricultural products are due to leave Ukrainian Black Sea ports on Sunday.

“At 10:00 a.m., 8 ships left the ports of Great Odesa, and 2 more are waiting for their turn and favourable conditions,” the ministry said in a statement.

Ukraine’s grain exports slumped after Russia invaded the country on Feb. 24 and blockaded its Black Sea ports, driving up global food prices and prompting fears of shortages in Africa and the Middle East.

Ukraine, a global major grain producer and exporter, shipped up to 6 million tonnes of grain per month before the war.

Three Black Sea ports were reopened under a deal signed on July 22 by Moscow and Kyiv and the ministry has said these ports are able to load and send abroad 100-150 cargo ships per month.

(Reporting by Pavel Polityuk; editing by David Evans)

Argentina corn planting stalled as ‘great drought’ fears rise

By Maximilian Heath

BUENOS AIRES (Reuters) – Argentina’s main farming zones are facing the driest conditions in around 30 years, agricultural and weather experts said, raising fears about a new “great drought” and stalling planting of corn in the world’s No. 3 exporter of the grain.

The vast Pampas plains of the South American nation are hitting the start of the corn planting season after almost no rainfall in some four months. Forecasts predict more dry weather ahead with scarce showers.

Argentina is the world’s top exporter of processed soy oil and meal and an important producer of corn, wheat and barley.

“This is one of the most complex situations we have seen in recent decades. We have to say that it is the worst planting scenario for corn in the last 27 years,” Cristian Russo, chief agronomist at the Rosario grains exchange, told Reuters.

Russo added the exchange would likely cut its planting estimate for 2022/23 corn in its monthly report due next week. It currently predicts a planting area of 8.2 million hectares.

Germán Heinzenknecht, a meteorologist at the Applied Climatology Consultant, pointed to farming towns like Pergamino in Buenos Aires province, which had only 6 millimeters of rain in the southern winter from June-August, the lowest since 1933.

“It is serious. There are problems everywhere,” said Heinzenknecht, adding that risks were rising that the country could see a repeat of the “great drought” in 2008/09, which hammered crops. “A person who wants to plant now just cannot.”

In Argentina, late September usually heralds the start of a wetter spring season, but an expected third straight La Nina weather pattern is expected to limit precipitation.

Andrés Paterniti, crop analyst at the Buenos Aires grains exchange, the other main cereals body in the country, said there were “massive” delays to planting in core farming areas as well as the province of Cordoba.

“The current scenario is discouraging,” he said.

Heinzenknecht added that farmers needed a miracle.

“The only thing that can get us out of this is something disruptive, something that no one is seeing. It’s the only thing that can change the landscape, which is alarming,” he said.

(Reporting by Reporting by Maximilian Heath; Editing by Adam Jourdan and David Gregorio)

Biden, unions, rail executives struggle for deal as shutdown looms

By David Shepardson and Lisa Baertlein

DETROIT/LOS ANGELES (Reuters) -Biden administration officials hosted labor contract talks late on Wednesday to avert a potential rail shutdown that could disrupt cargo shipments and impede food and fuel supplies, but one small union rejected a deal and Amtrak canceled all long-distance passenger trips.

Railroads including Union Pacific, Berkshire Hathaway’s BNSF and Norfolk Southern have until a minute after midnight on Friday to reach deals with three holdout unions representing about 60,000 workers before a work stoppage affecting freight and Amtrak could begin.

Talks between labor unions and railroads, which started at 9 a.m, were still underway more than 12 hours later after 9 p.m. ET on Wednesday at the U.S. Labor Department’s headquarters in Washington.

The talks are being overseen by Labor Secretary Marty Walsh, with input from other U.S. officials. The parties ordered in Italian food for dinner Wednesday in order to continue discussions.

“Everybody is going to have to move a little in order to get a deal done,” Buttigieg told reporters on the sidelines of the Detroit auto show.

A union representing about 4,900 machinists, mechanics and maintenance personnel said on Wednesday its members voted to reject a tentative deal.

Rail workers have gone three years without a raise amid a contract dispute, while rail companies have recorded robust profits.

In the current talks, the industry has offered annual wage increases from 2020 to 2024, equal to a 24% compounded hike. Three of 12 unions, representing about half of the 115,000 workers affected by the negotiations, are asking for better working conditions.

Two of those 12 unions, representing more than 11,000 workers, have ratified deals, the National Carriers’ Conference Committee (NCCC), which is bargaining on behalf of railroads, said on Wednesday.

Unions are enjoying a surge of public and worker support in the wake of the pandemic, when “essential” employees risked COVID-19 exposure to keep goods moving and employers reaped hefty profits, labor and corporate experts say.

A shutdown could freeze almost 30% of U.S. cargo shipments by weight, stoke inflation, cost the U.S. economy as much as $2 billion per day and unleash a cascade of transportation woes affecting the U.S. energy, agriculture, manufacturing and retail sectors.

White House spokeswoman Karine Jean-Pierre told reporters aboard Air Force One that a shutdown of the freight rail system would be an “unacceptable outcome for our economy and the American people and all parties must work to avoid just that.”

HIGH STAKES FOR BIDEN

President Joe Biden’s administration has begun making contingency plans to ensure deliveries of critical goods in the event of a shutdown.

The stakes are high for Biden, who has vowed to rein in soaring consumer costs ahead of November elections that will determine whether his fellow Democrats maintain control of Congress.

“Unless they reach a breakthrough soon, rail workers will go on strike this Friday. If you don’t think that will have a negative impact on our economy … think again,” said U.S. Senator John Cornyn, a Republican and Biden critic.

Senator Bernie Sanders late on Wednesday objected to a Republican bid to unanimously approve legislation to prevent a rail strike, noting the profits the rail industry has made.

If agreements are not reached, employers could also lock out workers. Railroads and unions may agree to stay at the bargaining table, or the Democratic-led U.S. Congress could intervene by extending talks or establishing settlement terms.

House of Representatives Speaker Nancy Pelosi said it was not clear whether Congress would step in, noting that the main issue is a lack of sick leave for workers.

Amtrak, which uses tracks maintained by freight railways, said it would cancel all long-distance trips on Thursday and some additional state-supported trains.

Rail hubs in Chicago and Dallas were already clogged and suffering from equipment shortages before the contract showdown. Those bottlenecks are backing up cargo at U.S. seaports by as much as a month. And, once cargo gets to rail hubs in locations such as Chicago, Dallas, Kansas City and Memphis, Tennessee, it can sit another month or longer.

Package delivery company United Parcel Service, one of the largest U.S. rail customers, and U.S. seaports said they are working on contingency plans.

Meanwhile, factory owners are fretting about idling machinery while automakers worry that a shutdown could extend vehicle buyer wait times. Elsewhere, food and energy companies warn that additional service disruptions could create even sharper price hikes.

(Reporting by David Shepardson and Lisa Baertlein; Additional reporting by Jeff Mason aboard Air Force One; Joe White in Detroit; Chris Walljasper in Chicago and Abhijith Ganapavaram in Bengaluru; Editing by Will Dunham, Jonathan Oatis, Bill Berkrot and Michael Perry)

Ukraine military successes may widen winter sowing area- farm ministry

KYIV (Reuters) – The successes of the Ukrainian army, which has liberated a significant territory in the northeast and south of Ukraine, may improve the forecasts of the winter sowing area for the 2023 grain crop, a deputy agriculture minister said on Wednesday.

Ukrainian forces liberated most of the Kharkiv region and some areas in the south during successful counteroffensive actions in recent days.

Ukrainian farmers have already started winter sowing and the ministry says the sowing area could fall by 35% this year to around 4.7 million hectares due to the Russian invasion. Farms sow winter wheat, winter barley, rape and rye.

“Regarding the liberation of Ukrainian territories from occupation by the Armed Forces of Ukraine, we have reasonable optimism that this forecast of 4.7 million hectares will improve,” Markiyan Dmytrasevych said.

The ministry said on Tuesday farms in almost all regions had started sowing winter wheat for the 2023 harvest, seeding 141,000 hectares, or 3.5% of the expected area.

Minister Mykola Solsky told Reuters last month that the winter wheat area could fall to 3.8 million hectares from 4.6 million a year earlier due to the Russian invasion.

Farmers had already sown 7,100 hectares of winter barley, or 1.1% of the expected area, and 5,400 hectares of rye, the ministry said.

It said farmers had sown 841,000 hectares of winter rapeseed, 87% of the forecast.

Ukraine harvested 19 million tonnes of wheat this year compared with around 32.2 million tonnes in 2021. Hostilities in many regions and the occupation of large areas by Russia accounted for the decline.

(Reporting by Pavel Polityuk; Editing by Bernadette Baum)

Ukraine’s grain exports accelerate in Sept following grain deal -ministry

KYIV (Reuters) – The pace of grain exports from Ukraine has risen so far in September but volumes are still well below last season’s levels, agriculture ministry data showed on Wednesday.

Ukraine’s grain exports have slumped since the start of the war because its Black Sea ports, a key route for shipments, were shut, driving up global food prices and prompting fears of shortages in Africa and the Middle East.

Three Black Sea ports were unblocked at the end of July under a deal between Moscow and Kyiv that was brokered by the United Nations and Turkey.

The ministry’s data showed Ukraine exported 1.5 million tonnes of grain in the first 13 days of September, 34% less than the 2.3 million tonnes exported in the same period a year ago. The exports were 40% less in the first week of September.

The ministry gave no reason for the increase, but analysts say the reopened seaports have helped to boost the shipments from Ukraine.

Ukraine’s infrastructure ministry said on Wednesday 134 cargo vessels with 3.1 million tonnes of various agricultural goods on board left Ukrainian ports under the grain deal.

The agriculture ministry data showed that Ukraine’s grain exports totalled 5.8 million tonnes so far in the 2022/23 July-June season, versus 10.9 million tonnes in the same period in 2021/22.

The data showed that exports so far in the July 2022 to June 2023 season included 3.4 million tonnes of corn, 1.83 million tonnes of wheat and 525,000 tonnes of barley.

The government has said Ukraine could harvest at least 50 million tonnes of grain this year, compared with a record 86 million tonnes in 2021, because of the loss of land to Russian forces and lower grain yields.

(Reporting by Pavel Polityuk; Editing by Gareth Jones)

What Does The Global Energy Crisis Mean For Metal Prices?

The ripple effects are being felt throughout the world – firmly positioning the entire Commodities sector as one of the biggest and most lucrative money making opportunities of the current economic climate that we find ourselves in right now!

As Russia plays hardball with Europe’s gas supply, the continent is staring down a worrisome energy future – and it’s certainly not alone. Since the start of the year, sky-high Commodity prices across the Metals, Energies to Agricultural markets have triggered an unprecedented supply squeeze with economists warning “we haven’t seen the worst of it yet”.

Key Fundamentals for Commodity Markets

Once again, right now, the Commodities markets are being squeezed. This time from two directions – on one hand, demand is booming as economies recover from the coronavirus pandemic. On the other hand, sufficient supplies to meet this demand are being hampered by geopolitical factors.

While demand for energies has skyrocketed, investment in supply has been held back by the move to decarbonize economies. Natural gas prices have been pushed up by on-going geopolitical tensions – sending benchmarks on both sides of the Atlantic blasting through all-time record highs.

Natural Gas prices have soared to 12 times their average for this time of the year and we haven’t even entered the winter months yet. Meanwhile, disruptions to supply chains and labor shortages have exacerbated pressure on the balance between supply and demand.

In short, Natural Gas now rivals Oil as the fuel that shapes geopolitics. And there isn’t enough of it to go around. The worsening supply squeeze has already triggered a series of extraordinary ripple effects in the market.

So far this year, 50% of the world’s commodity production from Aluminium, Copper, Cobalt, Nickel, Lithium, Palladium, Platinum, Steel, Uranium and Zinc has already been forced offline due to the huge spike in prices.

Winter and Commodity Prices

Once the colder weather kicks in, this will enviably drive energy prices higher again, making it even more expensive to produce essential commodities the world needs to function and survive – leading to further global production cuts, mining and refinery closures and eye-watering shipping costs – ultimately opening the door to an even bigger squeeze in prices ahead.

In fact, the early signs already look promising.

This week, Silver, which is technically an industrial metal commonly used in solar panels, medical and electrical devices – posted its biggest one-day move since February 2021. Elsewhere Platinum, Palladium and Copper prices surged to multi-year highs. While Uranium prices skyrocketed above $50 a pound – surpassing the record high set in spring, when Russia invaded Ukraine.

Throughout this year, a long list of leading Wall Street banks from Goldman Sachs, JPMorgan to Bank of America have described commodities as their “preferred asset class over the next decade”. In recent days, that chorus has once again become louder with Wall Street’s biggest institutions, advising clients to pile back into commodities now – ready for the next big leg higher!

Gold Price Forecast Video for September 14, 2022

Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions:

U.S. railways to halt grain shipments ahead of potential shutdown -agriculture sources

By P.J. Huffstutter and Tom Polansek

CHICAGO (Reuters) – Some U.S. railroads will start halting crop shipments on Thursday, a day ahead of a potential work stoppage, an agricultural association and sources at two grain cooperatives said on Tuesday, threatening exports and feed deliveries for livestock.

With farmers starting to harvest autumn crops that are shipped to meat and biofuels producers, the shipping disruptions could add to already high inflation. Farmers also plan to add fertilizer to fields after the harvest, and shipments of fertilizer are being delayed.

Max Fisher, chief economist at the National Grain and Feed Association, which represents most U.S. grain handlers, said rail customers reported at least one railway would stop taking grain shipments on Thursday morning.

Most major U.S. railways have already stopped accepting new shipments of ammonia fertilizer and other potentially hazardous materials, said Justin Louchheim, senior government affairs director at The Fertilizer Institute, an industry group.

Louchheim said fertilizer producers are now evaluating how much storage they have for ammonia that cannot move by rail, and whether some can move by truck.

The potential rail shutdown looms just six weeks before most Midwest farmers would begin applying fertilizer, said Josh Linville, fertilizer director at StoneX Group. About 40% of the U.S. fertilizer supply is on a rail car at some point before arriving on a farm, he said.

Railroads have until a minute after midnight on Friday to reach tentative deals with holdout unions representing about 60,000 workers.

Worries about service interruptions boosted prices for corn-based ethanol at several hubs and kept sellers out of the market, said Josh Pedrick, a managing editor for S&P Global Commodity Insights.

The Association of American Railways (AAR), which represents railroad companies, did not immediately respond to request for comment on grain transportation.

The work stoppage would be keenly felt in states like North Dakota, South Dakota, Minnesota and Nebraska, from which grain is hauled via rail to ports in the Pacific Northwest for export, said Thomas Lahey, domestic freight manager at grain merchandiser Columbia Grain International. Grain elevators in the upper Midwest move soybeans to the PNW mostly via BNSF Railway, Canadian Pacific Railway and Union Pacific, he said.

U.S. Class 1 railroads transported nearly 1.5 million carloads of grain in 2020, including 691,000 carloads of corn, 340,000 carloads of soybeans and 248,000 carloads of processed soybeans like soymeal and soyoil, AAR said.

ENOUGH ANIMAL FEED? 

U.S. chicken producers rely on about 27 million bushels of corn and 11 million bushels of soymeal every week to feed their birds, the National Chicken Council said. Much is moved by rail.

“Any disruption of service could negatively impact the welfare of the birds, and ultimately impact production at a time when Americans are already dealing with record food inflation,” council spokesman Tom Super said.

In North Carolina, a pork and poultry producer, local grain growers do not produce enough corn to feed all the farm animals, said Bob Ford, executive director of the North Carolina Poultry Federation.

“We’d be in trouble if they went on strike for very long,” Ford said. “We’d run out of corn.”

Wayne-Sanderson Farms, a Georgia-based chicken company owned by Cargill Inc and Continental Grain, is working with local corn producers to augment feed supplies if needed during rail disruptions, spokesman Frank Singleton said.

The beginning of corn harvesting in the southern United States, a main poultry region, “will relieve some of the pressure” on feed supplies, he said.

Some rail customers that feed livestock do not have enough soymeal, said Fisher, of the National Grain and Feed Association. In a worst case scenario, that could force some producers to cull animals.

Railroads also ship hexane, a chemical solvent that crushers use to extract oil from soybeans, said Mike Steenhoek, executive director of Soy Transportation Coalition.

“Any slowdown or stoppage of rail service – especially on the eve of harvest – would significantly impact farmers’ ability to meet customer demand – both domestically and internationally,” Steenhoek said.

(Reporting By P.J. Huffstutter and Tom Polansek in Chicago; Additional reporting by Karl Plume in Chicago, Rod Nickel in Winnipeg, Canada, and Stephanie Kelly in New York; Editing by David Gregorio)

EU crop monitor sees Ukraine maize crop down 24% on year

PARIS (Reuters) – Ukraine’s grain maize (corn) harvest is expected to fall 24% below last year and 5% below the five-year average to 32.0 million tonnes, the European Union’s crop monitoring unit MARS said on Monday in updated estimates for the war-torn country.

For sunflower, of which Ukraine is one of the world’s largest exporters, the harvest is expected to drop 15% from a year ago to 13.9 million tonnes, 2% below the five-year average.

“Russia’s war against Ukraine has seen a decrease in the area under grain maize and sunflowers. Consequently, our production forecasts for both crops is below the 5-year average, despite fair yield outlooks,” it said in a report.

Some 4% of the grain maize, 10% of the sunflowers, and 7% of soybean production is in areas currently subject to hostilities, MARS said.

For winter crops, for which the harvest is over, the share is at 22% of total soft wheat production, 20% for barley and 13% for rapeseed.

Analysts have been wrestling with how much grain Ukraine, usually one of the world’s biggest suppliers, will be able to harvest and export this year as war with Russia continues.

MARS’ estimates are based its own yield estimates and on area data from the Ukrainian farm ministry, apart from those in the war zones of Donetsk, Kherson, Luhansk and Zaporizhzhia, which are based on remote sensing, it said.

To access the full MARS report: https://publications.jrc.ec.europa.eu/repository/handle/JRC127974

(Reporting by Sybille de La Hamaide; Editing by Bernadette Baum)

Argentine soy farmers who hoard stock to face higher financing costs, central banks says

By Maximilian Heath

BUENOS AIRES (Reuters) – Argentine soy farmers who hold onto stock of more than 5% of their production will face an elevated financing cost above the normal benchmark rate, the South American country’s central bank said on Thursday, part of a wider push to encourage sales.

The central bank said soy farmers over a certain size who hoarded their stock would face a minimum financing rate “equivalent to 120% of the latest Monetary Policy rate.”

Argentina’s benchmark interest rate stands at 69.5%.

Thursday’s announcement aims “to make credit more expensive so that it is more convenient to sell (soybeans) than to take credit,” a source familiar with the matter explained.

The source added that now “the rate of any line of credit is going to be more expensive” for soybean producers, whose minimum rate would start at 83.4% under the new policy, the source said.

The move comes as part of an effort by authorities to replenish dwindling foreign currency reserves by pressuring soybean farmers to export more.

On Sunday, Economy Minister Sergio Massa set a preferential exchange rate for soybean producers, sending soybean exports surging earlier this week.

Argentina is the world’s top exporter of processed soy oil and soymeal and the No. 3 for raw soybeans, but farmers have been holding onto stock as a hedge against inflation and potential devaluation of the local peso currency.

(Reporting by Maximilian Heath; Writing by Adam Jourdan and Brendan O’Boyle; editing by Richard Pullin)

Explainer-Can Ukraine’s grain deal ease the global food crisis?

By Nigel Hunt and Jonathan Saul

LONDON (Reuters) -Russian President Vladimir Putin mooted on Wednesday reopening a U.N.-brokered deal for Ukrainian grain exports via the Black Sea saying that Moscow and the developing world had been “cheated”.

The agreement reached in July, creating a protected sea transit corridor, was designed to alleviate global food shortages, with Ukraine’s customers including some of the world’s poorest countries.

U.N. Secretary-General Antonio Guterres has said the deal would bring relief to developing countries “on the edge of bankruptcy and the most vulnerable people on the edge of famine”.

Nevertheless, the agreement from the outset was based on facilitating commercial shipments.

The early focus has also inevitably been on moving ships which had been stuck in Ukrainian ports for months, most of which were laden with corn and booked by developed countries such as Spain to be used for animal feed or biofuels.

The bulk of last year’s wheat crop in Ukraine, which is harvested earlier than corn, had already been shipped when Russian troops entered the country.

Developing countries such as Somalia and Eritrea rely heavily on imports of wheat from both Russia and Ukraine.

Here are some of the issues:

WHAT HAS BEEN EXPORTED?

The pact created a safe shipping channel for exports from three ports in Ukraine and the early focus was enabling ships that had been trapped in the war torn country since Russia’s invasion in February to leave.

So far, some 2.07 million tonnes of agricultural products have been shipped, predominately corn, but also volumes of soybeans, sunflower oil, sunflower meal and barley. Shipments of wheat have reached just over 500,000 tonnes.

This partly reflects the timing of Russia’s invasion as much of last year’s wheat crop had already been exported in February, as it is harvested several months before corn and so tends to be shipped earlier.

There is an estimated three million tonnes of grain in ports that needs to be moved first, which will probably take until around mid-September to clear.

For a full breakdown of the countries and quantities exported:

https://www.un.org/en/black-sea-grain-initiative/vessel-movements

Ukraine’s farming minister Mykola Solsky told Reuters last week that agricultural exports could rise to 6 million-6.5 million tonnes in October, double the volume seen in July.

However, there are still too few large ships coming in to keep the required pace of volume needed.

The exclusion of Mykolaiv, the country’s second-largest grain terminal according to 2021 shipment data, also makes such an export push challenging.

WILL IT ALLEVIATE THE FOOD CRISIS?

The sharp decline in shipments from Ukraine played a role in driving up global food prices at a time when world hunger is on the rise. The COVID-19 pandemic and climate shocks have also contributed to food price inflation.

Much larger volumes will need to be shipped through the corridor, however, to have a substantial impact on global supplies.

Ukraine has around 20 million tonnes of grain left over from last year’s crop piled up across the country, as well as this year’s wheat harvest, which is estimated at about a further 20 million tonnes.

The three ports involved in the deal – Odesa, Chornomorsk and Pivdennyi – have the combined capacity to ship around three million tonnes a month and some expect this level of exports could potentially be achieved in October.

It will, however, need a huge number of ships to transport such a large volume of grain and some shipowners may be wary to enter a war zone, particularly with the threat posed by mines and the high cost of insurance.

HAS IT DRIVEN DOWN GLOBAL WHEAT PRICES?

Prices of wheat on the Chicago Board of Trade rose sharply in the aftermath of Russia’s invasion of Ukraine but had already fallen back to pre-invasion levels by early July, weeks before the sea corridor was agreed.

Key factors driving down Chicago wheat prices include a record crop in major exporter Russia this year, a gloomy global economic outlook and a strong dollar.

The potential for more exports from Ukraine has, however, been cited by analysts as a bearish market factor even though only around 500,000 tonnes of wheat has so far been shipped through the corridor. Ukraine has exported around 18 million tonnes a year in recent seasons.

Prices for wheat-based food staples such as bread and noodles remain well above pre-invasion levels in many developing countries despite the decline in Chicago futures due to weak local currencies and higher energy prices which have raised costs such as transport and packaging.

WHAT ABOUT THE SEA MINES?

Russia and Ukraine accuse each other of planting the many naval mines that now float around the Black Sea. These pose a significant threat and were cited by one crew member on the first ship, the Sierra Leone-flagged Razoni, as the one thing he feared.

The mines have drifted far from Ukraine’s shores, with Romanian, Bulgarian and Turkish military diving teams defusing those that have ended up in their waters.

It could take months to clear them and there was not enough time to do so before the grains pact came into effect.

WHAT ABOUT INSURANCE?

The Istanbul based Joint Coordination Centre, which oversees the deal and is made up of Turkish, Russian, Ukrainian and U.N. officials, last month published long-awaited procedures on the shipping channel, which aims to alleviate concerns that insurers and shipowners have.

Insurers had previously said they were willing to provide cover if there were arrangements for international navy escorts and a clear strategy to deal with sea mines.

In one of the first steps following the July 22 agreement, Lloyd’s of London insurer Ascot and broker Marsh set up a marine cargo and war insurance for grain and food products moving out of Ukrainian Black Sea ports with $50 million cover for every voyage.

The cost of overall insurance for ships – which includes separate segments of cover – sailing into Ukrainian ports, however, is likely to remain steep.

WHAT ABOUT CREWS?

In September, Ukraine implemented a decree to allow its seafarers to leave the country despite wartime restrictions in a move aimed at freeing up vital manpower for both Ukrainian grain exports and the wider global shipping industry.

At the start of the conflict there were around 2,000 seafarers from all over the world stranded in Ukrainian ports and is estimated by the International Chamber of Shipping association to have fallen to some 420 mariners.

(Reporting by Nigel Hunt and Jonathan Saul, editing by Veronica Brown and David Evans)