Global Ag News for Aug 10.22

HEADLINES TODAY

Wheat prices overnight are up 10 1/4 in SRW, up 8 1/4 in HRW, up 7 1/2 in HRS; Corn is up 2 3/4; Soybeans up 8 3/4; Soymeal up $0.44; Soyoil down 0.25.

For the week so far wheat prices are up 11 in SRW, up 8 1/4 in HRW, up 7 1/2 in HRS; Corn is up 3 1/2; Soybeans up 21 1/2; Soymeal up $0.71; Soyoil up 0.16. For the month to date wheat prices are down 16 1/4 in SRW, down 15 in HRW, down 4 1/2 in HRS; Corn is down 3 1/4; Soybeans down 31; Soymeal down $3.90; Soyoil down 1.29.

Year-To-Date nearby futures are up 2% in SRW, up 7% in HRW, down -9% in HRS; Corn is up 4%; Soybeans up 27%; Soymeal up 25%; Soyoil up 24%.

Chinese Ag futures (SEP 22) Soybeans down 1 yuan; Soymeal up 30; Soyoil up 72; Palm oil up 10; Corn up 24 — Malaysian palm oil prices overnight were down 14 ringgit (-0.34%) at 4105.

There were no changes in registrations. Registration total: 2,653 SRW Wheat contracts; 0 Oats; 0 Corn; 0 Soybeans; 149 Soyoil; 0 Soymeal; 1 HRW Wheat.

Preliminary changes in futures Open Interest as of August 9 were: SRW Wheat up 3,207 contracts, HRW Wheat up 1,235, Corn down 2,594, Soybeans up 2,742, Soymeal up 2,146, Soyoil up 3,374.

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

Central/Southern Plains Forecast: Scattered showers south Wednesday. Mostly dry Thursday-Saturday. Temperatures near to above normal Wednesday-Saturday. Outlook: Mostly dry Sunday-Monday. Isolated showers Tuesday-Thursday. Temperatures near to above normal Sunday-Wednesday, near to below normal Thursday.

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

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

The player sheet for Aug. 9 had funds: net buyers of 1,000 contracts of  SRW wheat, buyers of 8,000 corn, buyers of 13,000 soybeans, buyers of 3,500 soymeal, and no changes in soyoil.

TENDERS

  • CORN SALE: The U.S. Department of Agriculture confirmed private sales of 133,000 tonnes of U.S. corn to China for delivery in the 2022/23 marketing year that begins on Sept. 1.
  • WHEAT TENDER: Iranian state agency Government Trading Corporation (GTC) issued an international tender to purchase about 60,000 tonnes of milling wheat
  • WHEAT TENDER: Importers in the Philippines are tendering to purchase a total of around 120,000 tonnes of wheat and about 120,000 tonnes of animal feed barley
  • WHEAT SALE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought 82,955 tonnes of food-quality wheat from the United States and Canada in regular tenders that closed on Wednesday.
  • WHEAT TENDER PASSED: Jordan’s state grain buyer is believed to have made no purchase in an international tender to buy 120,000 tonnes of milling wheat which closed on Tuesday

PENDING TENDERS

  • BARLEY TENDER Jordan’s state grains buyer issued an international tender to purchase 120,000 tonnes of animal feed barley

ETHANOL: US Weekly Production Survey Before EIA Report

Output and stockpile projections for the week ending Aug. 5 are based on six analyst estimates compiled by Bloomberg.

  • Production seen lower than last week at 1.035m b/d
  • Stockpile avg est. 23.512m bbl vs 23.394m a week ago

EU Soft-Wheat Exports Rise 1.5% Y/y, But Data Is Incomplete

EU soft-wheat exports during the season that began July 1 are at 2.49m tons, compared with 2.45m tons in a similar period a year earlier, the European Commission said Tuesday on its website.

  • NOTE: Figures are as of Aug. 5, but the data may be incomplete, the commission said
  • Top destinations are Morocco (639k tons), Algeria (435k tons) and Pakistan (207k tons)
  • EU barley exports at 948k tons, compared with 1.8m tons a year earlier
  • EU corn imports at 1.99m tons, compared with 1.37m tons a year earlier

Brazil Soy Exports Seen Reaching Up To 5.667 Million Tns In August – Anec

  • BRAZIL SOY EXPORTS SEEN REACHING UP TO 5.667 MILLION TNS IN AUGUST VERSUS 5.101 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC
  • BRAZIL SOYMEAL EXPORTS SEEN REACHING 1.991 MILLION TNS IN AUGUST VERSUS 1.639 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC
  • BRAZIL CORN EXPORTS SEEN REACHING UP TO 7.882 MILLION TNS IN AUGUST VERSUS 6.221 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC

CROP SURVEY: Brazil 2021-22 Corn Output Seen at 116.6M Tons

Brazil corn production seen about 1m tons higher than the previous est., according to the avg in a Bloomberg survey of eight analysts. Conab, the Brazilian national supply company, is scheduled to release its latest estimates on Aug. 11 at 9am local time

  • The range of estimates varied from 114.6m tons to 121.6m tons
  • Conab raised its est. by 440,000 tons in July
  • Soybean production seen 1.45m tons higher at 125.5m

Two More Crop Vessels Expected to Head Toward Ukraine Ports

Two more vessels have been authorized to head to Ukrainian ports, pending inspections Wednesday, according to a statement from the Joint Coordination Centre that oversees the grain corridor.

  • The Petrel S is expected to depart to Chornomorsk port and the Brave Commander will go to Pivdennyi port
  • In addition, the Riva Wind, Glory and Star Helena — which are loadedwith Ukrainian corn and sunflower meal — have been inspected and are cleared to sail, the center says
  • Mustafa Naciti, Sacura and Arizona will be inspected Wednesday

Manitoba Says Cooler, Dry Weather Extends Canola Flowering

Canola crop conditions are variable across Manitoba, with some in excellent shape and others in poor condition with thin stands, the Canadian province’s agriculture ministry says Tuesday in emailed weekly report.

  • Spring wheat crop rated mostly good to excellent, with some exceptions due to extreme moisture
  • 15% rated excellent in southwest vs 20% a week ago
  • 10% rated excellent in eastern region vs 5% a week ago
  • Soybean growth advancing quickly

Malaysian Palm Oil Reserves at Eight-Month High as Output Rises

Palm oil stockpiles in Malaysia climbed to the highest level in eight months, bolstered by increased production in the second-biggest grower.

Inventories rose 7.7% in July from the previous month to 1.77 million tons, according to official data from the Malaysian Palm Oil Board. That matches the median estimate in a Bloomberg survey and is the highest since November.

The rise is “mildly bearish” for palm oil prices, which traded 0.8% lower before the MPOB report, said Gnanasekar Thiagarajan, head of trading and hedging strategies at Kaleesuwari Intercontinental. Malaysian production is also rising, with output up 1.8% to 1.57 million tons, beating expectations for a drop.

A bright spot is exports, which surged almost 11% to 1.32 million tons even as rival supplier Indonesia boosted shipments. This indicates improving overseas demand, especially in top buyer India, amid a slump in benchmark prices to a one-year low. The survey predicted a modest 2% gain in exports.

The jump in shipments could pave the way to more “momentum buying” in the later months, said Paramalingam Supramaniam, a director at Selangor-based broker Pelindung Bestari Bhd. Exports may stay elevated in August, he added.

Traders are also assessing a cut in Indonesia’s export tax. The top producer has set crude palm oil export tax at $52 a ton for Aug. 9-15, lower than the $288 imposed in July. Sudden changes like this can complicate paperwork and cause loading delays, creating temporary supply tightness, analysts have said.

GrainCorp Sees Demand Nearly Everywhere Amid Black Sea Turmoil

  • Australian shipper sees broad-based appetite for grains
  • Black Sea exports to be disrupted for at least two years

A buoyant outlook for the Australian crop and broad-based global demand are boosting GrainCorp Ltd.’s export business as doubts linger over Black Sea shipments, said Chief Executive Officer Robert Spurway.

The major Australian exporter is seeing good demand for the country’s grain in nearly all markets around the world, and especially in Asia including Vietnam, Indonesia and “even up into Japan,” in a region where Australia has a greater competitive advantage because of its relative proximity, Spurway said.

Black Sea shipments would likely continue to be disrupted for the next two or three years at least, due to extensive damage to critical infrastructure wrought by Russia’s invasion of Ukraine, he said by phone on Wednesday. Repairs will take a number of years. Moscow’s military activity has also thwarted planting efforts in Ukraine, further disrupting production, he said.

The signing of an agreement for safe passage of Ukrainian grain through the Black Sea did not reflect the difficult commercial reality of getting vessels and cargoes insured, which is “very challenging, if not impossible,” he said. “It’s good to see grain flowing from that region, but we hold very firm views that that’s likely to be small amounts and somewhat disrupted for several years.”

GrainCorp shares surged as much as 10% on Wednesday, the most since February, after the company raised its earnings forecast.

The company cited strong supply chain performance and a probable third bumper crop in the upcoming season as key drivers behind the rosier outlook for earnings. GrainCorp has already exported 7.9 million tons year-to-date, and is “well on track” to land within the 8.5 to 9.5 million-ton range for export volumes flagged in the company’s half-year results in May, Spurway said.

GrainCorp has previously flagged a challenging outlook in terms of labor amid a widespread shortage of workers. The company is in the process of recruiting 3,000 casual workers this year to help with its operations. “The labor market is very tight, but we’ve done a good job overcoming that,” he said.

French Soft Wheat Harvest Is Mostly Good Quality: Agencies

While France’s soft-wheat production is lower than last year, the crop is mainly of good quality, according to a joint press release from FranceAgriMer, Arvalis and Terres Inovia.

  • Protein levels are high to very high from crops in the south
  • Protein was more mixed for crops in the north, but generally satisfactory, averaging around 11%
  • Specific weights are variable, but generally as expected
  • Falling numbers also meet milling requirements for most of the crop
  • Durum wheat, winter barley and spring barley are also mainly of good quality
  • For rapeseed, average oil content forecast at about 44.5%, higher than the five-year average

Major Russian Agri Producer Steppe Reaps Record 2022 Wheat Crop

Steppe’s winter wheat harvest rose 13% y/y to about 1.1m tons, the biggest in its history, the producer said in a statement.

  • “All our wheat is of milling quality and meets export requirements,” CEO Andrey Neduzhko said in statement
  • Harvest of other crops have not yet been completed, spokesperson said by phone

Ukraine’s Grain Exports Fell 52% Y/y Since Season Began in July

Ukraine exported about 2.2m tons between July 1 and Aug. 10, the Agriculture Ministry said on its website.

Total includes:

  • 1.4m tons of corn, up 26% y/y
  • 562k tons of wheat, down 69%
  • 192k tons of barley, down 88%

Chinese scientists develop salt-tolerant soybean that may reduce reliance on imports

  • Team in Shandong say species can yield 4.5 tonnes per hectare – more than twice the average – in saline-alkali soil
  • They say that if China can grow more of the crop it could help to reduce deforestation in places like Brazil

Chinese scientists say they have created a salt-tolerant soybean species that could reduce the country’s dependence on imports from places like Brazil, where soy production is driving deforestation.

The team from the Shandong Academy of Agricultural Sciences in Jinan say their new soybean species can yield 4.5 tonnes per hectare – more than twice the average – in saline-alkali soil, the official Science and Technology Daily reported on July 28.

For the study, the scientists planted the soybean in places including the Xinjiang region and the Yellow River Delta, where soil salinity is a problem. They said most of the trial crops yielded far more than the average of 1.8 tonnes per hectare.

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In China, about 100 million hectares of land is estimated to be affected by salinisation and soil degradation, about a third of it in Xinjiang in the far west. But if soybean could be cultivated on this land, there is potential to produce 450 million tonnes a year – almost five times the amount China imported in 2021.

China imports more soybean than any other country, mostly in the form of animal feed and oil. Much of it comes from South America, where expansion of production to meet demand for the crop is driving farmers to cut down trees for land. In Brazil – which supplied 60 per cent of China’s soybean imports last year – more than 750,000 sq km of the Amazon rainforest has been cleared in the past three decades, according to one estimate.

According to the Shandong team, if China can grow more soybean, it could help to reduce deforestation in places like Brazil.

The new species – called Qihuang No 34 – was developed by Xu Ran, a researcher from the academy’s Crop Research Institute, the report said.

He started the research back in 1992, and recalled how in the early years of the project he had worked in the field from 4am during the hottest days in Shandong, to artificially pollinate the soybeans.

Xu’s persistence paid off, and the new species was approved in 2015 and has since been widely planted in China.

The team said it had shown tolerance for salinity and retained nutrition, with a protein content of 45 per cent and a fat content of 22 per cent, giving it advantages in food and oil production.

But its yield varies. “The output can vary according to the precipitation and soil conditions,” said Guan Rongxia, a researcher from the academy.

However, she said there was huge potential to increase production of the new species in places where salinity was an issue.

China has been cultivating soybean for more than 5,000 years, but today the crop is mainly grown in the country’s east and Inner Mongolia in the north – areas where arable land is also needed for corn and wheat.

Xinjiang has been identified as a promising place to grow soybean in previous Chinese studies.

“Long hours of sunshine, low relative humidity and large temperature differences between day and night make Xinjiang an ideal place to cultivate the crop,” according to Zhan Yong, a researcher with the Xinjiang Academy of Agricultural Reclamation Science. Zhan’s study found that soybean grown in the western region produced higher average yields than elsewhere in China, according to a paper in the peer-reviewed Chinese Bulletin of Botany in 2020.

China doubles down on domestic soybean push amid self-sufficiency drive

It comes as the Ministry of Agriculture and Rural Affairs is seeking to boost cultivation of soybean in China. “This year, with strong support from the soybean revitalisation programme and other policies, the domestic soybean planting area and production is expected to grow,” the ministry said in its “China Agricultural Outlook Report” released in April.

“In the next 10 years, China will expand the soybean cultivation space in saline-alkali land and promote corn-soybean composite planting technology to solve the problem of low self-sufficiency for soybeans.”

Malaysia end-July palm oil stocks rose 7.7% to 1.77 mln tonnes – MPOB

Malaysia’s end-July palm oil stocks rose 7.71% from the previous month to 1.77 million tonnes, data from industry regulator the Malaysian Palm Oil Board (MPOB) showed on Wednesday.

Crude palm oil production climbed 1.84% from June to 1.57 million tonnes, while palm oil exports grew 10.72% to 1.32 million tonnes, MPOB said.

Wheat production outlook in Europe further down amid continuous dryness – Refinitiv Commodities Research

2022/23 EU-27 + UK WHEAT PRODUCTION: 146.3 [140.5-152.2] million tons, down 2% from last update

Recent unfavorable weather cuts EU-27+UK wheat production outlook by 2% to 146.3 [140.5-152.2] million tons. Soft wheat is currently estimated at 138.6 million tons and durum wheat at 7.7 million tons. Yield prospects of soft and durum wheat were suppressed to 5.91 and 3.37 tons per hectare (ha), respectively.

Mostly hot and dry weather persisted across Europe over the past few weeks. Lower temperatures were only observed locally in Baltic countries and UK. Additional rainfall was noted in Alpine region and eastern E.U. Yet, most Europe has experienced weather-related stress in the past months that devastated wheat crops during grain fill, worsening yield prospects. Latest satellite imagery analysis shows poor conditions of crops across Europe. NDVI values are far below average in most main wheat producing countries. In France, Germany, UK, Romania, Italy, and Hungary crop vegetation densities dropped to the lowest in the past 15 years.

Latest weather forecast calls for a continuation of mainly hot and dry conditions in the upcoming days. It will allow farmers to complete the harvest of winter crops. Cooler temperatures across the continent and precipitation surpluses in Italy, Balkans, Scandinavia, and Poland are probable in 7 days. More rainfall in the upcoming weeks will help alleviate soil moisture deficits before next season plantings. We will closely monitor upcoming weather and update our insight accordingly.

Hot and dry weather conditions across Europe slash corn yield prospects – Refinitiv Commodities Research

2022/23 EU-27 CORN PRODUCTION: 66.1 [62.8-69.4] million tons, down 3% from last update

Hot and dry weather across Europe adversely impacts yield potential and cuts production outlook further down by 3% to 66.1 [62.8-69.4] million tons. National-level yield is currently placed at 7.26 tons per hectare (ha).

Past few weeks featured mostly hot and dry weather across Europe. Only Baltic countries and UK saw cooler temperatures. Rainfall surpluses were recorded locally in Alpine region and eastern E.U. Rest of the continent experienced heat waves with temperatures exceeding 3°C above average locally. Lack of precipitation has worsened conditions for corn crops being in grain fill stage of development, especially in southern and western Europe with already low soil moisture reserves. Satellite imagery analysis confirms poor conditions of crops across Europe. NDVI values are far below average in most main corn producing countries with record low levels of the past 15 years in France, Romania, Italy, Hungary, and Germany.

Additional rainfall and moderate temperatures would help drive yields up, but latest weather forecast calls for a continuation of mainly hot and dry conditions. In 7 days, cooler temperatures across the continent and precipitation surpluses in Italy, Balkans, Scandinavia, and Poland are probable. Long-term weather forecast for the second half of August predicts unfavorable conditions for corn with continuous warmth and dryness. If that weather-related stress materializes, corn yields may further decline.

Potash Prices Slip as Inventory Builds; Ammonia Seeks Direction

Potash prices again fell below Nutrien and Mosaic’s 3Q US fill offers last week. Brazilian potash imports are tracking 33% above last year’s level amid reports of full warehouses and muted farmer demand. Nearly 40% of European ammonia capacity has gone offline due to high natural gas prices, yet new global supply should offset the reduction.

Ammonia Margins Back in the Red as LNG Climbs

European nitrogen producers will likely stay offline due to renewed spikes in natural gas, their largest cost, which rose 54% in the UK in a month to $43 a million British thermal units on Aug 8. At that level, ammonia’s UK cash cost is about $1,466 a metric ton — $216 above western Europe’s selling price of $1,250 on a cost-and-freight (CFR) basis. We expect ammonia to trade at $1,000-$1,250 a ton CFR Europe in 2H. Supply concerns have eased since 1Q. Ma’aden’s Wa’ad Al Shamal plant is fully operational, adding 90,000 tons of monthly exports. North American production has been steady after last year’s weather-induced outages. East Asian demand softened in 1H amid high ammonia prices.

OCI, BASF, CF Industries and Yara are the largest publicly traded ammonia producers operating in Europe.

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