2024-11-05 11:30

NAPERVILLE, Illinois, Nov 4 (Reuters) - U.S. Crop Watch producers have all but wrapped up their 2024 corn and soybean harvests, which progressed quickly amid persistent dry weather, and overall yields wound up a bit better than average. However, producers are keeping the recent dry conditions on their radars heading into 2025, especially after grain and oilseed prices hit four-year-lows earlier this year. Low commodity prices call for big crop yields when it comes to producers’ bottom lines, and favorable weather plays a large role. However, producers have become more confident with their ability to hit the bigger yields, especially in corn, and this could impact the U.S. acreage mix in 2025. RATINGS NOT RECORD Crop Watch producers throughout the season rated weekly yield potential on a 1-to-5 scale where 3 is around farm average yield, 4 is solidly above average and 5 is record or close to it. Scores are finalized after harvest. The U.S. Department of Agriculture projects record domestic corn and soybean yields in 2024. However, average 2024 Crop Watch yields were not the highest ever seen in the project’s seven-year history, and this could suggest a couple of things. First, the impact of Iowa cannot be overstated. Both Iowa Crop Watch corn fields scored 5s, but the actual yields were notably above previous highs. The only other Crop Watch corn field to score a 4 or better was Indiana, which fell slightly short of its record. All other corn fields, except drought-hit Ohio, finished with mostly near-average yields. Pending the outcome of North Dakota’s harvest this week, average 2024 Crop Watch corn yield finishes at 3.3, the lowest since the 11-field format began in 2021. That signals a modestly above-average result that at first sight might clash with USDA’s 183.8 bushel-per-acre forecast. But it supports the idea that national trend yield, despite doubts, may have climbed into the low 180s with a much greater potential should widespread, favorable weather span an entire growing season. The impact of the I-states this year also shows up in soybeans. The 11-field average Crop Watch soybean yield finishes at 3.64 for 2024. That is above 2023, identical to 2022 but below 2021. However, the average 2024 Crop Watch soybean yield across Iowa, Illinois and Indiana is higher than in the previous three years. LOOKING TO 2025 Low prices are at the forefront of the Crop Watch producers’ minds, especially with 2025 production costs expected to be similar to those of 2024. Producers report that some input costs have come down, but fertilizer is still relatively expensive. At last estimate, U.S. corn and soybean production costs for 2024 were slightly lower than in 2023 but still elevated compared with four-plus years ago, when crop prices were similarly low. USDA in June projected 2025 corn and soybean production costs up fractionally from 2024, though a fresh forecast is due on Nov. 14. While profitability potential is low across the board, at least seven of the 11 Crop Watch producers said they are currently favoring corn over soybeans for 2025 due to factors including yield advantage, crop insurance levels and current prices. CBOT December 2025 corn futures on Monday settled at $4.40-3/4 per bushel, and November 2025 soybeans finished at $10.35-1/4. That compares with averages for the 2024 contracts of $5.14 and $12.77 during October and November of 2023. Producers in both Kansas and North Dakota said wheat is attractive for 2025, partly due to tight global supplies. Corn and soybeans are not enticing for either, though the North Dakota producer is likely to cut corn acres because of high input costs and interest rates, and that is despite corn looking better on paper than soybeans. A handful of Crop Watchers mentioned weather and dryness as a top concern heading into 2025. Drought covered 75% of the U.S. Midwest last week, by far the largest portion for late October since Drought Monitor records began in 2000. Geopolitics were a bit lower on the list of Crop Watchers’ worries, but some of them noted the hope for lower interest rates as a positive. The ability to produce big yields, especially for corn, was producers’ most common source of optimism for next year, and that could pay off if commodity prices stay low. Karen Braun is a market analyst for Reuters. Views expressed above are her own. Sign up here. https://www.reuters.com/markets/commodities/crop-watch-low-prices-weather-headline-producers-concerns-2025-2024-11-05/

2024-11-05 11:29

At least 89 people still missing, court authorities say Police seek DNA samples to identify bodies Spain's PM earmarks $11.6 bln for flood victims Government has deployed nearly 15,000 police and military PAIPORTA/MADRID, Nov 5 (Reuters) - At least 89 people remain missing after deadly floods in eastern Spain, the regional judicial authorities in Valencia said on Tuesday, and Prime Minister Pedro Sanchez said he was earmarking 10.6 billion euros ($11.6 billion) to help victims. The number includes only those who have been reported missing by family members that have also provided personal information and biological samples to allow for their identification, the Superior Court of Justice of Valencia Region said in a statement. It added that there could be more cases of people who have disappeared whose details have not yet been registered. More than 200 people were confirmed to have died after heavy rains last week caused waterways to overflow, creating flash floods that surged through suburbs south of the city of Valencia, sweeping away cars and bridges and flooding properties and underground car parks. "There are still missing persons to be located, homes and businesses destroyed, buried under the mud and many people suffering severe shortages," Sanchez said in a press conference in Madrid earlier on Tuesday. "We have to keep working." At least 217 people died in Valencia, Castile-La Mancha and Andalusia, but only 133 have been identified so far. The court said coroners had performed 195 autopsies and that 62 bodies were still pending identification. Spain's national guard on Tuesday asked relatives of people missing to provide DNA samples to identify bodies. A research vessel from the national scientific body CSIC will reach Valencia on Nov. 9 to help in the search efforts, the Science Ministry said on Tuesday. The vessel has technology to obtain detailed images of the seafloor and explore hard-to-reach areas, it said. There have been suggestions that some of the missing people could have been swept down rivers and out to sea. The aid will include 838 million euros in direct cash to small businesses and freelance workers affected by the disaster and 5 billion euros of state-guaranteed loans. The national government will finance 100% of the clean-up costs incurred by local governments and half of the repairs to infrastructure, Sanchez said. More than 100,000 cars were damaged by the floods, Sonia Luque, coordinator of the Network of Road Assistance Companies (REAC), said, while damages to businesses in towns hit by floods could rise to over 10 billion euros. 'IT'S A TSUNAMI' Hector, a police inspector speaking in Paiporta, one of the worst-hit neighbourhoods, said he had experienced plenty of flooding in nearby Alicante but nothing like this. "This isn't a flash flood - it's a tsunami," Hector, who declined to give his last name, said. In the face of criticism and anger at the slow response to the disaster, Sanchez said the government had deployed nearly 15,000 police and military to help clear flood-affected areas, along with hundreds of forestry officials, forensic scientists, customs agents and heavy machinery to clear roads and rubble. Defending the government's response, Sanchez said he had not called a state of emergency, which would have given Madrid control of the crisis, because it would have been less efficient. He said personnel had been ready to be deployed from the first minute but had required the approval of the regional government run by the conservative People's Party. Valencia's regional leader Carlos Mazon said on Monday the delay in warning people was caused by the Hydrographic Confederation of Jucar (CHJ), which measures the flow of rivers and ravines for the state, cancelling a planned alert three times. The CHJ fired back that it does not issue flood risk alerts, which are the responsibility of Spain's regional governments. ($1 = 0.9175 euros) Sign up here. https://www.reuters.com/world/europe/spain-deploys-14898-police-officers-troops-areas-hit-by-flash-floods-2024-11-05/

2024-11-05 11:25

ADM to amend financial statements after fresh accounting errors CEO Juan Luciano under pressure after corrections in March Luciano warns 2025 could be "equally challenging year" CHICAGO, Nov 5 (Reuters) - Archer-Daniels-Midland (ADM.N) , opens new tab shares ended down 6% on Tuesday after the global grains merchant cut its 2024 profit outlook and said it would amend previous financial statements due to the discovery of fresh accounting irregularities. The drop wiped away about $1.6 billion of market value off one of the world's biggest crop traders as shares dove to the lowest since January 2021. The accounting woes are likely to heap more pressure on ADM's leadership team headed by CEO Juan Luciano after the company was forced to correct six years of financial data in March. An internal investigation found sales between ADM's nutrition business and other core units were not recorded properly. "2024 has been a difficult year," Luciano said in an internal memo to staff that Reuters reviewed. "We must take all action now to get ourselves ready for what may be an equally challenging year in 2025." ADM will amend its fiscal year 2023 annual report and results for the first and second quarters of this year following discussions with the U.S. Securities and Exchange Commission, according to a statement. The company said it does not expect any material impact on its consolidated results. An SEC spokesperson declined to comment. The latest accounting errors rattled investor confidence in the 122-year-old agribusiness, which has seen profits decline and margins erode as prices for staple crops like corn and soybeans have slid to near four-year lows. "If 'not material' turns out to be 'material', then it certainly would be harder and might put more pressure on the board to consider a leadership change," said Seth Goldstein, equity analyst with Morningstar. ADM under Luciano has invested heavily in its nutrition business over recent years in a strategy aimed at bolstering its legacy grain trading and processing businesses and shielding earnings from commodities market volatility. Profits from the smaller nutrition segment, however, have not lived up to expectations. "Investor faith in the strategy is greatly shaken and there are concerns that greater capital may have to be deployed to get the legacy businesses back to prior relative performance standards," said analyst Heather Jones, founder of Heather Jones Research LLC. ADM's accounting irregularities have sparked several government investigations and led to the departure of CFO Vikram Luthar in September. The company postponed its earnings call, which was scheduled for Tuesday, and now expects to hold a webcast after it has filed the amended statements. "Investors will undoubtedly be disappointed that this accounting overhang has returned," CFRA analyst Arun Sundaram said. CFRA cut its 12-month ADM share price target by $10 to $56 after lowering its earnings-per-share outlooks for 2024 and 2025. The restated filings, which ADM said would be released as soon as "reasonably practicable", will include some newly identified errors concerning intersegment sales for all three of its main units. Per SEC guidelines, ADM has until around Nov. 12 to report its results, but can file for an extension, analysts said. ADM cut its 2024 adjusted earnings forecast to $4.50 to $5 per share, from $5.25 to $6.25 it had estimated earlier, due to government policy uncertainty, slow market demand and "internal operational challenges." The company reported adjusted profit per share of $1.09 for the third quarter ended Sept. 30 in a preliminary filing that the company said was subject to change. Analysts expected $1.25, according to data compiled by LSEG. ADM's operating profit from its Ag Services and Oilseeds segment, its largest by revenue, slumped 43% from a year earlier. The company also paid $96 million in partial settlement claims in the quarter tied to safety incidents at its Decatur East and West facilities. Sign up here. https://www.reuters.com/business/retail-consumer/grains-merchant-adm-slides-additional-accounting-errors-annual-profit-forecast-2024-11-05/

2024-11-05 11:22

COPENHAGEN, Nov 5 (Reuters) - The offshore wind industry has solutions that would address Swedish defence concerns, CEO of renewable energy group Orsted (ORSTED.CO) , opens new tab said on Tuesday after Sweden rejected applications to build 13 offshore wind farms in the Baltic Sea. Swedish defence minister Pal Jonson said on Monday that building wind farms in the Baltic Sea would pose defence risks, by making it harder to detect and shoot down missiles. As Europe turns to renewable sources to diversify energy supplies away from Russian oil and gas, concerns have also risen about how to secure critical maritime infrastructure. "We fully understand the valid concerns from the armed forces and the Swedish government," Orsted CEO Mads Nipper told journalists. The company has already collaborated with the military in other Baltic Sea countries Germany, Poland and Denmark when establishing offshore wind farms, he said. "We are quite convinced that we could find solutions to serve the needs of both the armed forces and also the government," Nipper said. "We will of course offer all the experiences and learnings that we have from collaborating with the military elsewhere." Sign up here. https://www.reuters.com/business/energy/swedish-defence-concerns-over-baltic-sea-wind-farms-can-be-addressed-says-orsted-2024-11-05/

2024-11-05 11:17

Oil demand growth in 2024 likely to be around 500,000 bpd, says Tornqvist Says Chinese refiners focus on domestic needs, limit imports High costs hinder viability of exporting Saudi green hydrogen ABU DHABI, Nov 5 (Reuters) - The chairman and co-founder of Gunvor, one of the world's largest oil traders, said on Tuesday there is little growth in oil demand and the industry is probably over-investing somewhat. Oil demand growth this year will likely be around 500,000 barrels per day (bpd), Torbjorn Tornqvist told journalists on the sidelines of an industry event in Abu Dhabi. That would be down from growth of around 2 million bpd over the 2022-23 post-pandemic period, according to the International Energy Agency , opens new tab. Demand growth next year will likely be between 500,000 and 1 million bpd, some of which will be liquefied petroleum gas (LPG) and other oil products and not necessarily crude, said Tornqvist, who is also Gunvor's chief executive. Chinese refiners are less encouraged to produce for export and more focused on domestic needs now, he said, adding "we won't see much increase in crude oil import from China next year, if any". Tornqvist said "no one" was worried about a lack of any type of hydrocarbons today, adding that the market responded well after the shocks of Russia's full-scale invasion of Ukraine. Tornqvist said OPEC+ had made the right decision on Sunday to delay an oil output increase by some of its members and that the market received it well. "If they would have produced that oil, it wouldn't have gone to consumption, it would have gone to storage somewhere. And today we have a cushion... two, three years ago we talked about scarcity of oil and gas - I mean no one talks about that now," he said. "But again, if prices go down too much, exploration stops - it can go very fast the other way. So it's just: where is the sweet spot? And I think we are more or less there now." On alternative energy sources, Tornqvist said the price of producing and then exporting blue and green hydrogen was too high. Blue hydrogen is made from natural gas, with the resulting emissions captured, while green hydrogen is produced using renewable power. Tornqvist also said the economics of NEOM Green Hydrogen Company's Saudi Arabian green hydrogen project "just doesn't work" once it is exported. Saudi Arabia has among the cheapest solar production costs in the world. But "the conversion processes to bring it to Europe, or elsewhere, out of the Saudi desert, it just doesn't work," he said. "It's just too expensive, no one will pay the price for that." Sign up here. https://www.reuters.com/business/energy/gunvor-boss-sees-little-oil-demand-growth-2024-11-05/

2024-11-05 11:11

A look at the day ahead in U.S. and global markets from Mike Dolan Even with the uncertainty of what most pollsters see as a dead heat in the White House race, world markets are in a upbeat mood as Americans cast their ballots on Tuesday and await the result. One reason for the relative calm is that bookmaker odds on a Republican "clean sweep" of the presidency and both houses of Congress have lengthened compared with last week, with gridlock now the best guess whoever wins the Presidency. That takes some of the edge off fiscal policy worries, even if trade tariff calculations remain in the mix as the president can pursue them independently. Another prosaic reason is stock markets tend to rally once the anxiety of the waiting passes. And then there is also the small matter of a second Federal Reserve interest rate cut of the year on Thursday that's likely to follow either way too. Albeit in more edgier pandemic times, the VIX "fear index" index (.VIX) , opens new tab of U.S. stock volatility was some 15 points higher than it is now on the eve of the last tight election in 2020 - and it fell more than 10 points within a week of the contested results. At less than 22 on Tuesday, the VIX is almost half its highest close during the yen-related blowout this August and December VIX futures are four points lower. The real volatility this time around is bond markets, where the Treasury MOVE index (.MOVE) , opens new tab is more than twice what it was in 2020 - and at its highest for a year. That said, Treasury yields held steady into the vote at 4.3% and Wall Street stock index futures were steady to firmer too. Many of the recently buoyant "Trump trades" backing a win for the Republican candidate - betting on a higher dollar (.DXY) , opens new tab and Bitcoin and weaker Mexican peso and Chinese yuan - remained on the back foot as prediction markets on the outcome are now basically 50-50. But these did steady somewhat after Monday's recoil. While some of the results will start to stream in overnight, it could take days for the result to be clear given the reliance on the handful of swing states that will likely decide the outcome. Perhaps the most important battleground, Pennsylvania, did not have a clear winner in 2020 for four days after election day as officials sifted through a backlog of mail ballots. The state is among only a few that do not permit election workers to process mail ballots until 7 a.m. ET on election day - which means it could take days before the outcome is known. CHINA BOOST World stocks were mostly higher, with Chinese mainland (.CSI300) , opens new tab and Hong Kong (.HSI) , opens new tab benchmarks outperforming after news that the country's services activity expanded at the fastest pace in three months in October - an early signs that Beijing's big stimulus push may be improving confidence. With the standing committee of China's top legislature meeting this week too, Chinese Premier Li Qiang said he was confident China would meet this year's growth target and the government had the requisite fiscal and monetary tools for that. The Australian dollar edged higher after Australia's central bank held the line on interest rates at a 12-year high of 4.35% on Tuesday, as expected, and cautioned policy would need to stay restrictive for some time yet. Japan's Nikkei (.N225) , opens new tab gained more than 1% after its return from Monday's holiday as the yen held steady and the corporate earnings season impressed. Helped by this week's higher oil price , Britain's (.FTSE) , opens new tab was higher too - but British government bonds remained on edge after last week's government budget and the weakest demand of the year at Tuesday's 10-year gilt auction. In corporate news, Boeing (BA.N) , opens new tab shares rose 2% ahead of the bell after U.S. West Coast factory workers accepted a new contract offer late on Monday, ending a bitter seven-week strike that halted most jet production and deepened a financial crisis at the troubled planemaker. In Europe, Vestas (VWS.CO) , opens new tab, the world's largest maker of wind turbines, was a negative surprise and its shares slid more than 10% on a lower-than-expected third-quarter operating profit and disappointing outlook. British fund manager Schroders (SDR.L) , opens new tab also dropped 10% after it reported net outflows of client funds of 2.3 billion pounds ($3 billion) for the quarter ended Sept. 30. Key developments that should provide more direction to U.S. markets later on Tuesday: * U.S. Presidential and Congressional Elections * US October service sector surveys from ISM and S&P Global; Canada September trade balance * US corporate earnings: Super Micro Computers, Marathon, Dupont De Nemours, Archer-Daniels-Midland, Emerson, Microchip Technology, Jack Henry, Devon Energy, Assurant, International Flavors and Fragrances, Yum! Brands, Gartner, Progressive, Cummins, STERIS, Henry Schein, Targa etc * US Treasury auctions $42 billion of 10-year notes * European Central Bank President Christine Lagarde and ECB board member Isabel Schnabel both speak, ECB Vice President Luis De Guindos attends European Union finance ministers meeting * Bank of Canada and Bank of Japan publish meeting minutes Sign up here. https://www.reuters.com/markets/us/global-markets-view-usa-pix-2024-11-05/