Global Ag News for Apr 27.22

TODAY – Canada to Plant 25M Acres of Wheat, 20.9M of Canola: StatsCan

Wheat prices overnight are down 4 3/4 in SRW, down 4 in HRW, down 3 in HRS; Corn is up 1/4; Soybeans up 14 1/4; Soymeal up $0.07; Soyoil up 1.82.

For the week so far wheat prices are up 15 in SRW, up 11 in HRW, up 22 1/4 in HRS; Corn is up 12 3/4; Soybeans down 2; Soymeal down $1.44; Soyoil up 3.75.  For the month to date wheat prices are up 88 1/4 in SRW, up 130 3/4 in HRW, up 108 1/4 in HRS; Corn is up 68 3/4; Soybeans up 88; Soymeal down $21.70; Soyoil up 15.62.

Year-To-Date nearby futures are up 40% in SRW, up 44% in HRW, up 20% in HRS; Corn is up 35%; Soybeans up 30%; Soymeal up 8%; Soyoil up 54%.

Chinese Ag futures (SEP 22) Soybeans down 14 yuan; Soymeal up 23; Soyoil up 274; Palm oil up 408; Corn down 3 — Malaysian palm oil prices overnight were up 601 ringgit (+9.39%) at 7001.

There were no changes in registrations. Registration total: 2,185 SRW Wheat contracts; 1 Oats; 0 Corn; 0 Soybeans; 98 Soyoil; 0 Soymeal; 154 HRW Wheat.

Preliminary changes in futures Open Interest as of April 26 were: SRW Wheat down 1,616 contracts, HRW Wheat up 241, Corn down 20,982, Soybeans down 11,420, Soymeal down 7,651, Soyoil down 122.

Northern Plains Forecast: Isolated showers through Thursday. Scattered showers Friday-Saturday. Temperatures below to well below normal Wednesday, near to below normal Thursday-Friday, below normal Saturday. 6-to-10-day outlook: Scattered showers Sunday-Wednesday. Mostly dry Thursday. Temperatures below normal Sunday-Thursday.

Central/Southern Plains Forecast: Isolated to scattered showers Wednesday-Saturday. Temperatures near to above normal Wednesday-Saturday. 6-to-10-day outlook: Isolated to scattered showers Sunday-Wednesday. Mostly dry Thursday. Temperatures near to below normal north and above normal south Sunday-Thursday.

Western Midwest Forecast: Mostly dry Wednesday. Isolated to scattered showers Thursday-Saturday. Temperatures near to below normal Wednesday-Friday, near to above normal Saturday.

Eastern Midwest Forecast: Mostly dry Wednesday. Isolated showers Thursday-Friday. Scattered showers Saturday. Temperatures below to well below normal through Thursday, near to below normal Friday-Saturday. 6-to-10-day outlook: Scattered showers Sunday-Wednesday. Mostly dry Thursday. Temperatures near to below normal north and near to above normal south Sunday-Thursday.

Canadian Prairies Forecast:  Isolated to scattered showers west Wednesday. Mostly dry Thursday. Temperatures below to well below normal Wednesday, near to below normal Thursday. Scattered showers Friday-Saturday. Temperatures near to below normal Friday-Saturday. 6-10 Day Outlook: Scattered showers Sunday-Thursday. Temperatures near to below normal Sunday-Thursday.

 Brazil Grains & Oilseeds Forecast: Rio Grande do Sul and Parana: Scattered showers through Saturday, mostly south. Temperatures above normal through Saturday. Mato Grosso, MGDS and southern Goias: Mostly dry through Saturday. Temperatures above normal through Saturday.

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

The player sheet for 4/26 had funds: net buyers of 10,000 contracts of  SRW wheat, buyers of 2,000 corn, buyers of 2,000 soybeans, sellers of 5,000 soymeal, and  buyers of 5,000 soyoil.

TENDERS

  • SOY SALES: The U.S. Department of Agriculture reported sales of 132,000 tonnes of U.S. new-crop soybeans to China and another 133,000 tonnes to unknown destinations, including 78,000 tonnes of old-crop soybeans and 55,000 tonnes of new-crop soy.
  • MILLING WHEAT TENDERS: Turkey’s state grain board TMO issued two import tenders to buy a total of around 480,000 tonnes of milling wheat
  • WHEAT SALE: Algeria’s state grains agency OAIC is believed to have purchased between 230,000 to 250,000 tonnes of durum wheat in a tender which closed on Tuesday, European traders said on Wednesday. Mexico expected to be a main origin. More details are possible later.
  • BARLEY TENDER CANCELED: Jordan’s state grain buyer made no purchase in an international tender for 120,000 tonnes of animal feed barley

PENDING TENDERS

  • WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of milling wheat
  • MILLING WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy 120,000 tonnes of milling wheat which can be sourced from optional origins
  • VEGOILS TENDER: Egypt’s state grains buyer said it was seeking vegetable oils for arrival June 10-30 and/or July 1-20 in an international purchasing tender
  • SUNOIL TENDER: Turkey’s state grain board TMO issued an international tender to purchase and import about 18,000 tonnes of crude sunflower oil

Canada to Plant 25M Acres of Wheat, 20.9M of Canola: StatsCan

Canadian farmers anticipate a 7.2% increase in wheat acres from last year, according to Statistics Canada’s principal crop areas report.

  • Analysts were expecting 24.1m acres, according to the avg in a Bloomberg survey, with a range of 23m-24.5m acres
  • Canola planting to decline by 7% to 20.9m acres
  • Survey avg was for 21.9m acres, range 20.8m-22.6m

Ukraine Farms to Face Overflowing Silos Even as Harvest Shrinks

  • Growers may have to leave some corn in fields as storage fills
  • Crops from last harvest backlogged on farms as war hit exports

As Ukrainian farmers press ahead with fieldwork during the war, they’ll soon be grappling with a fresh problem: where to stash the next harvests.

Russia’s invasion began during a peak period for Ukraine’s corn exports, which has left a hefty volume of grain stuck on farms as ports closed. While some crops are still trickling out by rail and road, it will take at least 10 months to clear the current crop surplus, Kyiv-based analyst UkrAgroConsult said in a note.

Added to the hurdles, as much as 5% of the country’s grain elevators have suffered damage from the war and another 15% can’t be accessed, UkrAgroConsult estimates. That could leave farmers running short of storage space by autumn, even with harvests expected to shrink by about half versus last year.

There should be enough room for the first-collected crops, such as wheat, while others reaped later like corn could face a storage crunch unless seaborne trade resumes. The International Grains Council estimates that Ukraine’s grain stockpiles ahead of the next harvests will be quadruple the norm.

EU 2021/22 soybean imports at 11.47 mln T by April 24, rapeseed 4.29 mln T

European Union soybean imports in the 2021/22 season that started in July had reached 11.47 million tonnes by April 24, compared with 12.15 million tonnes by the same week in 2020/21, data published by the European Commission on Tuesday showed.

EU rapeseed imports so far in 2021/22 had reached 4.29 million tonnes, compared with 5.52 million tonnes a year earlier.

Soymeal imports so far in 2021/22 were at 13.32 million tonnes against 14.13 million a year ago, while palm oil imports stood at 4.02 million tonnes versus 4.42 million.

EU sunflower oil imports, most of which usually come from Ukraine, were at 1.62 million tonnes, against 1.49 million a year ago, the data showed.

Vegetable oil markets have been highly volatile this year as tight global supplies have been excerbated by the war in Ukraine, which has disrupted sunflower oil shipments.

Vegetable oil supplies could come under further strain as top palm oil producer Indonesia prepares to ban exports of a type of palm oil in a bid to rein in domestic prices.

EU Soft-Wheat, Barley Yield Outlooks Trimmed on Dryness: MARS

EU soft-wheat yields for the 2022 crop are now estimated at 5.95 tons/hectare, down from a March outlook for 6.02 tons/hectare, the EU’s Monitoring Agricultural Resources unit says in a report.

  • That remains above the five-year average
  • Most of western, northern and north-central Europe have had generally favorable weather for winter-crops so far
    • However, there is unfavorable dryness in Hungary, Romania, Slovenia and Croatia
  • Barley yield outlook trimmed to 4.97 tons/hectare, from 5.02 tons/hectare
  • Rapeseed yield outlook trimmed to 3.19 tons/hectare, from 3.22 tons/hectare
  • Estimates for corn, sunflower and sugar beet yields left unchanged
  • In north Africa, recent rains in Morocco and Algeria came too late for winter-crops to recover from drought that earlier gripped the region

Indonesia Says Cooking Oil Export Ban Won’t Violate WTO Rules

Indonesia, the world’s largest palm oil producer, says temporary export ban on refined bleached deodorized palm olein will not break WTO’s trade rules as the country seeks to secure supply for domestic market.

  • Govt reiterates that the temporary ban, that will come into force on April 28 is limited to RBD palm olein, Airlangga Hartarto, coordinating minister for economic affairs, says in a briefing on late Tuesday
    • Indonesia will keep the ban until price of local cooking oil reaches 14,000 rupiah/liter
    • NOTE: Indonesia’s Export Ban Excludes Crude Palm Oil, RBD Palm Oil (1)
  • Trade Ministry is expected to issue a regulation on export halt on Tuesday
  • Govt will monitor the supply chain of cooking oil thoroughly, while producers are expected to buy palm’s fresh fruit bunches from farmers at decent price
  • A periodical evaluation will be conducted to asses supply of cooking oil at local market

Commodity Prices to Stay Elevated Through 2024, World Bank Says

  • Largest commodity shock since the 1970s, bank says in outlook
  • Energy prices could rise over 50% in 2022 before easing

Food and energy price surges worsened by the Ukraine war could last through the end of 2024 due to disruptions in trade and production, the World Bank Group said Tuesday.

Increase in energy prices, which has reached the largest since the 1973 oil crisis, is expected to pass 50% in 2022 before easing in 2023 and 2024, the group said in its Commodity Markets Outlook. Prices for agriculture and metals are projected to increase almost 20% in 2022 before moderating at elevated levels in the following years.

“Overall, this amounts to the largest commodity shock we’ve experienced since the 1970s,” Indermit Gill, the World Bank’s vice president for Equitable Growth, Finance, and Institutions, said in a statement. “As was the case then, the shock is being aggravated by a surge in restrictions in trade of food, fuel and fertilizers.”

The war could result in longer-lasting inflation and delay clean-energy transition as countries seek alternative trade routes and ramp up production of commodities, according to the report. The sharp rise in energy prices and, by extension, fertilizer costs could lead to food shortages and stall the progress in reducing global poverty.

The bank forecasts wheat prices will jump more than 40%, reaching an all-time high in nominal terms this year, putting pressure on developing economies that rely on imports, especially from Russia and Ukraine. Brent crude oil is expected to average $100 a barrel in 2022, highest level since 2013, with prices for coal and natural-gas in Europe at all-time highs. Natural gas in Europe will more than double this year from 2021.

“This will have lasting knock-on effects,” said John Baffes, senior economist in the World Bank’s Prospects Group. High prices will “weigh on food production and quality, affecting food availability, rural incomes, and the livelihoods of the poor.”

Argentina, Australia Wheat Exports Seen Falling in 2022-23: FAS

Argentina’s wheat exports could fall to 12.6m tons in the coming 2022-23 season, the USDA’s Foreign Agricultural Service said in a report.

  • That’s down from its estimate for 15.2m tons in the current year
  • Local production expected to drop as farmers weigh high wheat prices against rising expenses for inputs like fertilizer
  • In Australia, wheat exports could fall to 22m tons in 2022-23, versus 27.5m tons this season
    • Production is expected to retreat from last year’s “huge” harvest, as costs for fertilizer, chemicals and diesel have surged
  • NOTE: The countries rank among the world’s top wheat shippers

Argentine grains farmers see mostly flat sales for corn, soy dips

Argentina’s farmers are on track for relatively flat corn sales in the current cycle while the soybean harvest dips, according to official data released on Tuesday, with both crops providing crucial export revenues for the country’s battered economy.

Argentina is a major international grains producer and exporter, but the commodity market has been disrupted by Russia’s invasion of Ukraine, both of which are key global suppliers.

Some 22.6 million tonnes of corn from the current 2021/22 harvesting season have been sold so far, the agriculture ministry said on Tuesday, noting that 880,000 tonnes were traded in the week through April 20.

The weekly volume rose when compared to the same period last year, when 703,000 tonnes were sold, as Russia’s war has spurred new uncertainty over available supplies.

The overall volume of Argentine corn sold so far is about the same as during the same period last year. The 2021/22 corn crop is seen reaching 49 million tonnes, according to the Buenos Aires grains exchange (BdeC), while the previous cycle totaled 52.5 million tonnes.

Through last week, Argentina’s farmers have harvested about 23% of the planted area for 2021/22, according to the BdeC.

Late last year, the government set a corn export limit of 41.6 million tonnes during the current season, in an attempt to rein in high domestic food prices.

Meanwhile, about 13.6 million tonnes of soybeans have been sold so far, the official data showed, down from 15.5 million tonnes at the same time last year. The 2021/22 harvest for soybeans is still in its early stages, and the BdeC expects production of the oilseed to reach 42 million tonnes this season.

France gives leeway on food labels as firms switch from sunflower oil

France will give food companies up to six months to change product labels to reflect recipe changes if they replace sunflower oil, supplies of which have been strained by the war in top exporter Ukraine, the economy ministry said on Tuesday.

Ukraine usually accounts for about half of global exports of sunflower oil, one of the world’s most consumed edible oils, and Russia’s two-month-old invasion of its neighbour has stalled Ukrainian shipments.

As the food industry moves to replace sunflower with alternatives like rapeseed, soybean or palm oil, companies can request a temporary waiver on French labelling rules, the ministry’s consumer protection and anti-fraud authority said.

Food makers would nonetheless have to provide a basic indication of an ingredient change on packaging within two months, before providing a fully updated ingredient list within six months, the DGCCRF body said.

Recipe changes that imply an allergy risk, or that compromise a product claim such as being organic or free from palm oil, would not benefit from the labelling grace period, it added.

Sunflower oil is widely used in preparing potato fries and crisps, as well as in other food products like margarine and biscuits.

It is also sold in bottles as cooking oil and a rush by households to secure supply has led to empty store shelves in France and other European countries, with some supermarket chains restricting purchases per shopper.

Brazil Soy Exports Seen Reaching 12.09 Million Tns In April Versus 11.98 Million Tns Forecast In Previous Week – Anec

BRAZIL SOY EXPORTS SEEN REACHING 12.09 MILLION TNS IN APRIL VERSUS 11.98 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC

BRAZIL CORN EXPORTS SEEN REACHING 850,000 TNS IN APRIL VERSUS 850,000 TNS FORECAST IN PREVIOUS WEEK – ANEC

BRAZIL WHEAT EXPORTS SEEN REACHING 156,218 TNS IN APRIL VERSUS 155,168 TNS FORECAST IN PREVIOUS WEEK – ANEC

Fertilizer Buyers Pull Back, Delay Purchases as High Prices Bite

U.S. fertilizer prices were mixed as cold, wet weather delays fieldwork and farmers pull back on expensive inputs. India re-entered the market with a small urea tender, but a larger one is expected soon. Chinese urea supply is thin, suggesting limited tons from the marginal producer when the export ban is lifted in 2Q.

Chinese Exports Won’t Spoil the Urea Party Yet

China’s summer return to the urea market is unlikely to add significant supply length. Domestic urea inventory is 26% below average and China banned urea exports officially through May to address the shortage. We believe Chinese urea from domestic production is being used on farms, not building excess export supply. Domestic production is running slightly above last year but port inventory was steady in 1Q at an average 126,000 metric tons. Already low domestic supplies suggest the government could extend its official urea export ban from May to the end of 2Q to rebuild supplies. Still, a nearly $500/mt spread between China and the global market will incentivize the marginal producer to export, but with low volumes at firm prices.

Valero Says Green Diesel Project to Start Operating This Year

Valero Energy says its Diamond Green Diesel III project is now expected to begin operations in the fourth quarter of this calendar year as opposed to first quarter of 2023.

  • NOTE: Diamond Green Diesel is a joint venture between Valero and Darling Ingredients
  • Co. also says in earnings conference call that the carbon capture pipeline project from BlackRock and Navigators is on schedule and expected to start up in late 2024, with eight of Valero’s ethanol plants connected to the system, providing a lower carbon intensity ethanol product and leading to “higher product margins”
  • Co. says it expects low-carbon fuel policies to expand globally and drive demand for more climate-friendly fuels
  • Valero is studying other “low-carbon opportunities,” such as sustainable aviation fuel, renewable hydrogen and additional renewable naphtha in carbon sequestration projects

Brazil Gets Less Fertilizer Even as Bolsonaro Touts Russia Ships

  • Brazil president says Russian vessels en route with fertilizer
  • Volumes shipped in the past four weeks plunged: Green Markets

The world’s biggest soybean crop in Brazil is under threat with new data showing vital shipments of Russian fertilizer are slowing down.

The number of new cargoes leaving Russia is dropping even as Brazilian President Jair Bolsonaro touted Tuesday that over two dozen ships are en route. Sanctions and logistical disruptions due to the Ukraine war are causing the slowdown.

The shipments are critical because Brazilian soybeans go into everything from cooking oil to animal feed all around the world, and a shortfall of fertilizer could result in smaller supplies. Time is running out to get the right amounts needed for planting the South American nation’s mammoth crop in September. Rising soy prices could reverberate throughout world food supply chains and exacerbate inflation.

Brazil is so desperate for fertilizer that it’s a key factor in Bolsonaro’s agnostic stance toward Vladimir Putin’s war against Ukraine.

“We’ve adopted a balanced position on this conflict because we can’t survive without fertilizer,” Bolsonaro said Tuesday at an event in Brasilia.

Even with Bolsonaro’s armada on the way, data compiled by Bloomberg’s Green Markets shows plunging shipments. Line-up figures on Brazil’s ports schedule show new volumes of Russian fertilizer down 58% in the past four weeks compared with the prior period.

Both Russia and Belarus, which account for almost a third of Brazil’s fertilizer imports, are under sanctions from Western nations. No shipments from Belarus have been added to line up schedules since late February, while new volumes from Russia are falling, according to Marina Cavalcante, an analyst at Bloomberg’s Green Markets.

The declines “may represent a risk for fertilizer supplies in the second half of the year,” Cavalcante said in a telephone interview.

Brazil imports more than 85% of the fertilizer that it consumes.

Brazil’s JBS unveils electric truck rental unit for refrigerated cargo

JBS SA announced on Tuesday the creation of a business unit for renting electric trucks to distribute refrigerated cargo to retailers, helping the Brazilian meatpacker advance on its carbon emissions reduction plan and reducing logistics costs in the medium- and long-term.

No Carbon, the new company, is already operating, with a fleet of 31 electric urban cargo vehicles. Initially, they are being rented to transport companies that provide services to JBS, but the company hopes to expand operations in the future to other firms interested in emissions-free transportation.

The vehicles, produced by China’s JAC Motors, already are being used to distribute Friboi, Seara, and Swift products. They will replace part of the diesel-powered trucks currently used by the group’s logistics service providers.

The urban cargo vehicles are capable of carrying up to 4 tonnes of cargo and can travel up to 150 km (93 miles) per day, which makes them ideal for urban centers, Armando Volpe, No Carbon’s executive director, told Reuters.

The electric fleet is operating in some parts of the Brazilian states of Sao Paulo, Parana, Santa Catarina, and the country’s federal capital region, where recharge points are also available at JBS distribution centers.

In the future, Volpe says the company may expand the fleet and even open the leasing of vehicles to other market players with high demand for logistics services, such as retail and e-commerce chains.

The company calculates that each electric urban cargo vehicle will prevent 30 tonnes of equivalent carbon dioxide gas from entering the atmosphere per year.

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