Global Ag News for Apr 12.23

TOP HEADLINES

UN Says Ukraine Crop Shipments to Resume After Latest Setback

• Halt due to lack of agreement on operational priorities: UN
• Vessel inspections are expected to resume on Wednesday

The Black Sea grain corridor ground to a halt on Tuesday after no ship inspections were conducted under the safe-passage deal that allows Ukraine to export its crops from three key ports, although activity is now expected to resume on Wednesday.

The Joint Coordination Centre in Istanbul didn’t conduct inspections as the parties involved “needed more time to reach an agreement on operational priorities,” the United Nations said in a statement. Inspections are expected to restart tomorrow after “intensive discussions,” it said.

The JCC hosts teams from Ukraine, Russia, Turkey and the United Nations that mutually check all ships headed to and from the three ports covered by the Black Sea grain agreement.

The deal has significantly boosted crop flows from the war-torn country since it was agreed in July, but the speed of inspections has been a bottleneck, with only a handful of ships usually cleared daily.

“We urge all involved to meet their responsibilities to ensure that vessels continue to move smoothly and safely in the interest of global food security,” said Stephane Dujarric, spokesman for the UN secretary-general.

Ukraine also recently faced a backlash from eastern European Union nations over grain shipments there. It pledged to suspend exports of key crops to Poland until next season, while cargoes bound for third countries are still permitted.

The Black Sea pact was extended in mid-March. Russia has threatened to withdraw next month unless progress is made to remove obstacles for its own exports, although it remains the world’s top wheat shipper.

Lineups posted by the United Nations show two inbound and four outbound vessels were cleared Monday. No cleared ships were listed on Tuesday.

FUTURES & WEATHER

Wheat prices overnight are up 5 3/4 in SRW, up 9 1/4 in HRW, up 7 3/4 in HRS; Corn is up 2; Soybeans down 2; Soymeal up $0.06; Soyoil down 0.62.

For the week so far wheat prices are up 4 1/4 in SRW, up 13 1/4 in HRW, down 2 in HRS; Corn is up 10; Soybeans up 2 3/4; Soymeal up $0.60; Soyoil down 0.34.

For the month to date wheat prices are down 12 1/2 in SRW, down 2 1/2 in HRW, down 25 3/4 in HRS; Corn is down 6 1/4; Soybeans down 10 1/4; Soymeal down $5.70; Soyoil down 1.23.

Year-To-Date nearby futures are down 14.2% in SRW, down 1.2% in HRW, down 7.3% in HRS; Corn is down 3.6%; Soybeans down 1.6%; Soymeal down 4.2%; Soyoil down 15.0%.

Chinese Ag futures (JUL 23) Soybeans down 20 yuan; Soymeal down 12; Soyoil up 46; Palm oil up 54; Corn down 9 — Malaysian palm oil prices overnight were down 113 ringgit (-2.91%) at 3775.

There were changes in registrations (-74 SRW Wheat, -29 Soybeans). Registration total: 2,463 SRW Wheat contracts; 23 Oats; 22 Corn; 26 Soybeans; 613 Soyoil; 1 Soymeal; 1 HRW Wheat.

Preliminary changes in futures Open Interest as of April 11 were: SRW Wheat up 7,606 contracts, HRW Wheat down 1,524, Corn up 2,502, Soybeans down 162, Soymeal down 1,380, Soyoil up 1,299.

Northern Plains Forecast: Isolated to scattered showers Wednesday-Saturday. Temperatures near to well above normal Wednesday, near to below normal Thursday, below normal Friday-Saturday. Outlook: Mostly dry Sunday-Monday. Isolated showers Tuesday-Thursday. Temperatures below normal Sunday, near to below normal Monday-Thursday.

Central/Southern Plains Forecast: Mostly dry Wednesday. Isolated showers west Thursday. Isolated to scattered showers Friday-Saturday. Temperatures above to well above normal through Thursday, near to below normal northwest and well above normal southeast Friday-Saturday. Outlook: Mostly dry Sunday-Tuesday. Isolated showers Wednesday-Thursday. Temperatures near to below normal Sunday, near to above normal Monday-Thursday.

Western Midwest Forecast: Mostly dry through Thursday. Scattered showers Friday-Saturday. Temperatures above to well above normal through Friday, near to above normal Saturday.

Eastern Midwest Forecast: Mostly dry through Friday. Scattered showers Saturday. Temperatures above to well above normal through Saturday. Outlook: Scattered showers east Sunday-Monday. Mostly dry Tuesday-Wednesday. Scattered showers Thursday. Temperatures near to below normal Sunday-Tuesday, near to above normal Wednesday-Thursday.

US Delta Forecast: Scattered showers south Wednesday-Thursday. Mostly dry Friday. Scattered showers Saturday. Temperatures near normal through Thursday, above normal Friday-Saturday. Outlook: Mostly dry Sunday-Thursday. Temperatures near to below normal Sunday-Monday, near to above normal Tuesday-Thursday.

Argentina Grains & Oilseeds Forecast: Cordoba, Santa Fe, Northern Buenos Aires:  Isolated showers Wednesday. Mostly dry Thursday-Saturday. Temperatures above normal Tuesday, near to below normal Wednesday, below normal Thursday-Saturday. La Pampa, Southern Buenos Aires:  Mostly dry Wednesday-Friday. Isolated showers Saturday. Temperatures near to below normal Wednesday, below normal Thursday-Saturday.

Brazil Grains & Oilseeds Forecast: Rio Grande do Sul and Parana:  Isolated showers south Wednesday. Scattered showers Thursday, north Friday-Saturday. Temperatures near to above normal through Thursday, near to below normal Friday-Saturday. Mato Grosso, MGDS and southern Goias:  Isolated to scattered showers through Saturday. Temperatures near normal through Saturday.

The player sheet for 4/11 had funds: net sellers of 4,000 contracts of SRW wheat, sellers of 2,000 corn, sellers of 5,000 soybeans, buyers of 4,500 soymeal, and  buyers of 1,500 soyoil.

TENDERS

• WHEAT PURCHASE: Jordan’s state grains buyer purchased about 60,000 tonnes of hard milling wheat to be sourced from optional origins in an international tender which closed on Tuesday
• WHEAT PURCHASE: A group of South Korean flour mills bought around 45,000 tonnes of milling wheat to be sourced from the United States in an international tender on Wednesday
• CORN PURCHASE: Taiwan’s MFIG purchasing group bought about 65,000 tonnes of animal feed corn to expected to be sourced from Argentina in an international tender on Wednesday
• FEED WHEAT TENDER: Leading South Korean feedmaker Nonghyup Feed Inc (NOFI) has issued an international tender to purchase up to 65,000 tonnes of animal feed wheat
• BARLEY TENDER: Jordan’s state grains buyer has issued a new international tender to purchase up to 120,000 tonnes of animal feed barley
• WHEAT TENDER: The Taiwan Flour Millers’ Association has issued an international tender to purchase an estimated 52,850 tonnes of grade 1 milling wheat to be sourced from the United States
• WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy a total of 78,548 tonnes of food-quality wheat from the United States and Canada in a regular tender that will close on Thursday.
• DURUM TENDER: Algeria’s state grains agency OAIC has issued an international tender to purchase a nominal 50,000 tonnes of durum wheat.
• FAILED SOYMEAL TENDER: Leading South Korean animal feed maker Nonghyup Feed Inc. (NOFI) is believed to have rejected all offers and made no purchase in a tender to purchase up to 60,000 tonnes of soymeal on Tuesday.

PENDING TENDERS

• CORN TENDER: Algerian state agency ONAB issued an international tender to purchase up to 70,000 tonnes of animal feed corn to be sourced from Argentina or Brazil
• RICE TENDER: South Korea’s Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 121,800 tonnes of rice.
• FEED WHEAT, BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said on Wednesday that it will seek 60,000 tonnes of feed wheat and 20,000 tonnes of feed barley to be loaded by July 31 and arrive in Japan by Sept. 28, via a simultaneous buy and sell (SBS) auction that will be held on April 12.

TODAY

ETHANOL: US Weekly Production Survey Before EIA Report

Output and stockpile projections for the week ending April 7 are based on seven analyst estimates compiled by Bloomberg.

• Production seen lower than last week at 999k b/d
• Stockpile avg est. 25.098m bbl vs 25.136m a week ago

Brazil April soymeal exports to jump as demand shifts from Argentina – Anec

Grain exporters group Anec on Tuesday raised its projection for Brazilian soymeal exports to 2.09 million tonnes in April, reflecting a shift in demand to Brazil from Argentina, where a drought has curtailed supplies and soybean crushing this season.

Last week, Anec estimated soymeal exports at 1.86 million tonnes for April. Brazil exported 1.82 million tonnes in April 2022, Anec data show.

The country is also forecast to export 14.38 million tonnes of soybeans in April, up from last week’s estimate of 13.74 million tonnes, Anec said.

If the expectation is confirmed, April’s soybean exports will surpass the 11.36 million tonnes shipped in the same month last year, as Brazil is harvesting a record 2022/2023 crop.

For corn, Brazil is expected to sell around 207,000 tonnes this month to customers abroad, down from about 942,000 tonnes in April 2022, Anec said.

Brazil Corn-Planted Area Seen Rising 1% in 2023-24: USDA Attache

Corn-planted area seen at 22.8m ha in the season starting March 2024 through February 2025, up 1.3% from the current season, the USDA’s FAS attache unit says in a report on its website.

• Crop may reach a fresh record at 133m tons in 23-24, up 6.4% y/y
• Rising demand from international and domestic markets will encourage farmers to keep investing to raise production
• 2023-24 exports seen increasing 8% y/y to 54m tons
  • Estimate for 2022-23 shipments raised to 50m tons from 47m tons
• In 2022-23, corn production estimate was slightly cut to 125m tons from 125.5m tons previously due to planting delays, which raises the risk of losses on adverse weather

UN Says Ukraine Crop Shipments to Resume After Latest Setback

• Halt due to lack of agreement on operational priorities: UN
• Vessel inspections are expected to resume on Wednesday

The Black Sea grain corridor ground to a halt on Tuesday after no ship inspections were conducted under the safe-passage deal that allows Ukraine to export its crops from three key ports, although activity is now expected to resume on Wednesday.

The Joint Coordination Centre in Istanbul didn’t conduct inspections as the parties involved “needed more time to reach an agreement on operational priorities,” the United Nations said in a statement. Inspections are expected to restart tomorrow after “intensive discussions,” it said.

The JCC hosts teams from Ukraine, Russia, Turkey and the United Nations that mutually check all ships headed to and from the three ports covered by the Black Sea grain agreement.

The deal has significantly boosted crop flows from the war-torn country since it was agreed in July, but the speed of inspections has been a bottleneck, with only a handful of ships usually cleared daily.

“We urge all involved to meet their responsibilities to ensure that vessels continue to move smoothly and safely in the interest of global food security,” said Stephane Dujarric, spokesman for the UN secretary-general.

Ukraine also recently faced a backlash from eastern European Union nations over grain shipments there. It pledged to suspend exports of key crops to Poland until next season, while cargoes bound for third countries are still permitted.

The Black Sea pact was extended in mid-March. Russia has threatened to withdraw next month unless progress is made to remove obstacles for its own exports, although it remains the world’s top wheat shipper.

Lineups posted by the United Nations show two inbound and four outbound vessels were cleared Monday. No cleared ships were listed on Tuesday.

Indonesia Reviews Palm Oil Export Policy for Post-Ramadan Period

• Export ratio is being evaluated with no decision yet: official
• Government also studying how much palm oil is sold at home

Indonesia, the world’s biggest palm oil supplier, is reviewing its export policy as it seeks to regulate domestic supplies after the peak demand season of Ramadan, according to a senior government official.

Indonesia controls palm oil exports through a policy called the domestic market obligation, which requires companies to sell a portion of their supply at home before they receive an export permit. The government is evaluating the export ratio and the way it’s calculated for the post-Ramadan period, said Isy Karim, director general of domestic trade at the Ministry of Trade.

There’s no decision yet on whether to raise or cut it, he said in a text message on Wednesday. Another factor being considered is the volume of palm oil that producers sell at home. Exporters are currently required to set aside 450,000 tons a month to prepare for the festive season, while normal demand can be met with 300,000 tons. Even then, companies have fallen short of this target.

Any changes to Indonesia’s export policy will have major implications for the palm oil industry, given that the country is the world’s biggest shipper. Last April, the government temporarily banned exports to cool local prices, causing turmoil in global markets. Indonesia has tended to prioritize its home market over exports, seeking to ensure that palm oil supplies are sufficient for both domestic food and biofuel consumption before shipping the excess overseas.

The DMO currently allows export volumes that are six times what companies have sold at home. In deciding the new ratio, the government will take into account the realization of domestic targets, availability of cooking oil in the local market, and the fulfillment of export quotas, Karim said.

Argentina breaks 23-day streak of FX reserves losses as ‘soy dollar’ kicks in

Argentina’s central bank broke a 23-day streak of selling off dollar reserves on Tuesday, though only just, as a new “soy dollar” preferential exchange rate helped spur grains trading and bring in some more foreign currency.

Traders estimated that the bank ended the day with net purchases of around $2 million, after it sold $515 million so far this month, and more than $3 billion so far this year.

The slight net inflows come after the government re-launched a so-called soy dollar plan to give exporters a preferential exchange rate when converting dollar revenues back into pesos, a measure aimed at rebuilding depleted central bank reserves.

The scheme officially started on Monday, though only really began to impact trades on Tuesday after the government laid out some important technical details of the program.

Louis Dreyfus to expand Canada canola plant, latest to crush more oilseeds

Global crop trader Louis Dreyfus Corp LOUDR.UL on Tuesday said it will more than double the size of its Canadian canola crushing plant in Yorkton, Saskatchewan, the latest North American oilseed processor to expand.

A global drive to reduce greenhouse gas emissions has prompted refiners to start building facilities to produce less-polluting renewable diesel from canola, soybeans and other feedstocks.

Some of Louis Dreyfus’ Canadian competitors such as Richardson International, Cargill Inc and Viterra have already announced plans to expand canola crushing, raising questions about how much more of the yellow-flowering crop farmers can grow to supply the plants.

U.S. soybean crushing is also expanding fast.

Canola futures RSv1 soared to record highs last year after Russia invaded Ukraine, then the world’s biggest sunflower oil exporter, tightening vegetable oil supplies.

Canada is the world’s biggest producer and exporter of canola, a cousin of rapeseed that is mainly processed into vegetable oil for human consumption and meal for animal feed.

Louis Dreyfus in a statement said construction will begin this year and more than double the facility’s annual crush capacity to more than 2 million tonnes by the end of 2025. It did not say how much the expansion will cost.

The 14-year-old facility currently employs 120 people.

 

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