Global Ag News for Jan 18 22

 TODAY – EXPORT INSPECTIONS, NOPA CRUSH

Wheat prices overnight are up 8 in SRW, up 7 3/4 in HRW, up 7 1/2 in HRS; Corn is down 4 1/2; Soybeans down 12 3/4; Soymeal down $0.83; Soyoil down 0.36.

Markets finished last week with wheat prices down 12 1/2 in SRW, down 24 3/4 in HRW, down 28 1/4 in HRS; Corn is down 8; Soybeans down 28; Soymeal down $1.94; Soyoil up 0.06.

For the month to date wheat prices are down 21 1/4 in SRW, down 48 3/4 in HRW, down 96 1/4 in HRS; Corn is down 1 1/2; Soybeans up 17 3/4; Soymeal down $1.80; Soyoil up 1.57.

Chinese Ag futures (MAY 22) Soybeans up 39 yuan ; Soymeal down 12; Soyoil up 72; Palm oil up 150; Corn down 2 — Malasyian Palm is up 67.  Malaysian palm oil prices overnight were up 67 ringgit (+1.31%) at 5190.

There were no changes in registrations. Registration total: 1,900 SRW Wheat contracts; 25 Oats; 50 Corn; 371 Soybeans; 143 Soyoil; 0 Soymeal; 92 HRW Wheat.

Preliminary changes in futures Open Interest as of January 14 were: SRW Wheat up 729 contracts, HRW Wheat down 458, Corn down 3,644, Soybeans up 954, Soymeal up 2,142, Soyoil up 1,412.

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

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

The player sheet for Jan. 14 had funds: net sellers of 4,000 contracts of  SRW wheat, buyers of 6,500 corn, sellers of 4,000 soybeans, sellers of 2,000 soymeal, and  sellers of 0 soyoil.

TENDERS

• WHEAT SALE: Algeria’s state grains agency OAIC purchased around 600,000 tonnes of milling wheat on Friday in an international tender in which French wheat was reportedly overlooked again
• CORN SALE: South Korea’s Major Feedmill Group (MFG) purchased about 198,000 tonnes of corn in an international tender which closed on Friday
• FEED WHEAT SALE: South Korea’s Major Feedmill Group (MFG) purchased about 50,000 tonnes of animal feed wheat from optional origins but expected to be sourced from Australia
• CORN SALE: South Korea’s Feed Leaders Committee (FLC) purchased about 65,000 tonnes of animal feed corn to be sourced from optional origins in a private deal on Friday without an international tender being issued
• CORN, SOYMEAL SALES: The U.S. Department of Agriculture (USDA) confirmed private sales of 100,422 tonnes of U.S. corn to Mexico for shipment in the 2021/22 marketing year. The agency also confirmed sales of 100,000 tonnes of soymeal to Spain for shipment in the 2022/23 season.
• WHEAT TENDER: The Taiwan Flour Millers’ Association has issued an international tender to purchase 49,395 tonnes of grade 1 milling wheat to be sourced from the United States

PENDING TENDERS

• RICE TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of rice with import using land transport by railway
• RICE TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of rice
• 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
• WHEAT TENDER: Turkey’s state grain board TMO has issued an international tender to purchase about 335,000 tonnes of milling wheat
• FEED WHEAT, BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said on Wednesday that it will seek 80,000 tonnes of feed wheat and 100,000 tonnes of feed barley to be loaded by Feb. 15 and arrive in Japan by March 17, via a simultaneous buy and sell (SBS) auction that will be held on Jan. 19.
• BARLEY TENDER: Turkey’s state grain board TMO has issued an international tender to purchase 345,000 tonnes of animal feed barley

China December Imports

• corn imports 1.33M tons, -39.9%
  • YTD corn imports rose 152.2% y/y to 28.35m tons
• wheat imports 940,000 tons, +6.9% y/y
  • YTD wheat imports rose 16.6% y/y to 9.77m tons
• edible palm oil imports 440,000 tons, -28.9% y/y
  • YTD edible palm oil imports fell 0.1% y/y to 4.65m tons
• pork imports 170,000 tons, -62% y/y
  • YTD pork imports fell 15.5% y/y to 3.71m tons
• beef imports 210,000 tons, -1.4% y/y
  • YTD beef imports rose 10.1% y/y to 2.33m tons

CROP SURVEY: U.S. December Soybean Crush Seen at 184.5M Bushels

Projections are based on a survey of eight analysts conducted by Bloomberg News on Jan. 13-14.

• Soybean crush seen 0.7% higher vs December of last year, and an increase of 2.8% vs a month ago
• Oil stocks at the end of last month seen at 1.872b lbs vs 1.699b a year earlier
• The National Oilseed Processors Association is scheduled to release its monthly report on Jan. 18.

Malaysia’s Jan. 1-15 Palm Oil Exports 492,883 Tons: Amspec

Malaysia’a palm oil shipments fell 32.1% month-on-month to 492,883 tons in the Jan. 1-15 period, from 725,600 tons exported during Dec. 1-15, according to AmSpec Agri on Saturday.

U.S. CROP EXPORTS: Corn to Mexico, Soybean Meal to Spain

The U.S. Department of Agriculture says Friday on its website.

• Private exporters reported sales of 100,422 tons of U.S. corn to Mexico for the 2021-22 marketing year
• Also reported were sales of 100,000 tons of soybean meal to Spain for 2022-23

Brazil 2021/22 Corn Output Forecast Cut to 115.6m tons: Safras

Brazilian producers are now expected to harvest 115.6m tons of corn in the 2021/22 season, agricultural consultancy Safras & Mercados said in report, citing drought issues in Southern states.

• Volume is below the 116.08m tons estimated in Dec., but still higher than the 90.77m tons produced in 2020/21
• Corn planting area in 2021/22 is now seen at 21.26m hectare,  up from 21.05m hectare forecast in Dec. and 21.1m hectare sown in 2020/21
• Average productivity of corn crops is expected to rise to 5,438 kilos per hectare from 4,300 kilos per hectare in 2020/21

Brazil Soybean Harvest 1.2% Done as of Jan. 13: AgRural

Compares with 0.4% in previous year and a five-year average of 1.1%, consulting firm AgRural says in an emailed report.

• Summer corn harvest in Brazil’s Center-South region is 6% complete, up from 3% a year earlier
• Winter corn seeding still less than 1% complete in the Center-South, with most works in Parana and Mato Grosso states

Oilseed Meal Exports From India Rise 4.7% M/m in December: Group

Oilseed meal exports climbed to 170,338 tons in December, from 162,660 tons a month earlier, the Solvent Extractors’ Association of India said in an emailed statement Monday.

• NOTE: Exports totaled 516,006 tons in December 2020
• Soybean meal exports 43,260 tons in December vs 42,951 tons in November
• Rice bran extract sales 56,846 tons vs 48,232 tons
• Castor seed meal exports 57,252 tons vs 28,876 tons
• Rapeseed meal shipments 12,980 tons vs 42,383 tons

India’s Winter Crop Area Rises 1.2% to 66.46 Million Hectares

The area under winter-sown crops, such as wheat, rapeseed and pulses, climbed to 66.46 million hectares (164 million acres) as of Jan. 14, from 65.64 million a year earlier, according to the farm ministry.

Wheat area fell about 1.3% to about 33.65 million hectares, while land under rice cultivation dropped 19% to 1.98 million hectares from a year earlier, the ministry said in a statement on Friday.

CORN/CEPEA: Estimates indicate supply reduction; prices continue to move up

New projections for the Brazilian corn production were released this week, indicating losses in the 2021/22 summer crop. In this scenario, producers remain limiting the supply in all regions surveyed by Cepea. Therefore, purchasers have been returning to trades in the spot market, aiming to replenish inventories. However, they have found difficulties to close new deals, which has been pushing up quotes since early January.

Between January 6 and 13, on the average of the regions surveyed by Cepea, the prices paid to corn farmers (over-the-counter market) moved up 3.5%; in the wholesale market (deals between processors), values rose by 2.8%. In Rio Grande do Sul, because of the lack of rains, prices are at around 100 BRL/bag.

In Campinas (SP), base for the BM&FBovespa Index for corn, prices have been upping for nine days in a row, closing at BRL 96.5 (USD 17.48)/60-kilo bag on January 13, for an increase of 3.5% compared to Jan. 6.

This month, Conab indicated a decrease in the first corn crop in relation to the initial forecast, due to the dry and hot weather in the Southern Brazil. However, Conab continues to project a higher 2021/22 production than the previous.

The productivity in the summer crop is likely to total 5,49 kilos per hectare, 3.4% less than in 2021. The area is expected to increase 3.8% compared to the previous. As a result, production may amount 24.78 million tons, 0.3% up in relation to 2020/21, but a decrease of almost 5 million tons compared to estimates released in December, which indicated 29 million tons.

However, for the second and third crops, Conab says that the production may recover, due to the area increase. As a result, the total corn production in 2022 is forecast at 112.9 million tons in Brazil, being 86.26 million tons in the second crop and 1.85 million tons in the third, +30%, +42% and 17%, respectively, compared to previous seasons.

Conab also indicates an increase of the domestic consumption, estimated now at 76.75 million tons. Exports, in turn, are likely to surpass 20 million in 2020/21, at 36.68 million tons in 2021/22. Imports were revised down to 1.3 million tons, which can still change, due to the need to import to supply the domestic market in the first semester.

Due to advances of the harvest, producers in the Southern Brazil are concerned about the dry weather impacts on crops. In the Southeast and Central-West, on the other hand, the harvesting has not begun yet, and crops present a satisfactory development.

SOYBEAN/CEPEA: Demand for soybean meal increases; producers focus on crops

As soybean meal stocks are decreasing, purchasers need to buy new volumes in the spot market, increasing the competition for prompt delivery batches. This scenario has boosted domestic soybean meal quotes and export premiums.

On the average of regions surveyed by Cepea, soybean meal prices moved up 2.8% from January 6 to 13. As for premiums, at the port of Paranaguá (PR), there were sale offers at 23 USD per short ton on January 13, higher than the 1 USD/short ton registered on Jan. 6. The FOB price in Paranaguá was 494.27 USD/ton, for an increase of 6.1% comparing Jan. 6-13.

The Brazilian value of soy oil, in turn, dropped 2.2% over the last seven days, at 8,193.42 BRL per ton (in São Paulo city with 12% ICMS) on Jan. 13.

In Paraná, only 2% of the area had been harvested up until Jan. 13, and crops conditions are getting worse. On the other hand, producers from the Southeast and part of the Central-West in Brazil are optimistic with the soybean crop.

Conab released a report this week indicating that the 2021/22 production may total 140.49 million tons, only 1.6% below the 142.78 million tons forecast in December – Conab seems to not have considered estimates from state institutions yet indicating critical conditions. The USDA, in turn, reduced the projection for Brazil and South America more significantly. Now, the Brazilian crop is forecast at 139 million tons (-3.5% compared to the previous report).

As for soybean prices, the higher supply in the United States and the exchange rate decrease pressed down both futures and quotes in the Brazilian market. The CEPEA/ESALQ Index Paraná moved down 0.5% from January 6 to 13, closing at BRL 175.25 (USD 31.75)/bag on January 13. The ESALQ/BM&FBovespa Index Paranaguá decreased by 1.8%, at BRL 177.41 (USD 32.15)/bag.

China to Curb Purchases of U.S. Farm Goods, Fitch Solutions Says

• Brazil will be a winner as its share in China imports may rise
• Other key agribusiness themes include logistics, soaring costs

Relations between the U.S. and China are set to remain strained, which could prompt Beijing to continue diversifying its imports of agricultural goods and keep America’s share low, according to Fitch Solutions.

China may continue to limit soybean and other agricultural purchases from the U.S. as geopolitical tensions persist, the research company said in a note. Brazil will be a winner, with its share in the Chinese market poised to stay elevated and could rise further for some commodities such as meat and cotton.

Even though China has bought record amounts of U.S. farm goods in recent years — partly due to a trade deal signed in January 2020 and mainly because of a massive expansion in its hog herd — relations between the world’s two biggest economies have deteriorated. Tensions flared over Hong Kong, Taiwan, human rights, the origins of the Covid-19 pandemic and many other flashpoints.

Fitch Solutions highlighted other key agribusiness themes in 2022, including soaring input costs and strained supply chains. It said U.S.-China relationship poses a risk to logistics as escalating tensions could disrupt trade routes.

China favors Brazilian soybeans, but reduces U.S. soybean imports – Refinitiv Commodities Research

China soybean imports reached a six-month high in December, closing at 9.3 million tons. Among them, imports from the U.S. totaled 7.6 million tons. Imports from Brazil totaled 1.6 million tons, compared to 1.1 million tons for last December. In January, imports from the U.S. will decline to 5.6 million tons while imports from Brazil will increase to 1.8 million tons. Total imports in January are projected at 7.6 million tons, slightly below last year thanks to the increased imports from Brazil.

Since the current export season commenced in September in the U.S. and February in Brazil, China’s accumulated soybean imports from the U.S. (December-January) have declined by 30% from a year ago to 17.8 million tons. The figure is lower than the levels prior to the U.S.-China trade war. On the contrary, Accumulated Brazilian soybean imports (April-January) have exceeded the prior season and reached 54.1 million tons. Trade flows data indicate that imports from Brazil will remain well above last year’s same period during February-March due to sufficient supplies in Brazil. Apparently, China, as the top buyer of soybeans, favors Brazil soybeans.

In spite of recent drought concerns, Brazil is expected to harvest a record amount of soybeans in February (141.5 million tons by Refinitiv Agriculture Research. Competitions of Brazilian new crop soybeans will further reduce China’s appetite for the U.S. soybeans.

On the other hand, China’s hog stock has recovered to the levels prior to the outbreak of Africa Swine Fever, according to the Ministry of Agriculture and Rural Affairs (MARA). However, currently low pork prices and supply surplus will likely curb the growth of hog stock and subsequently affect feed demand and soybean imports. China’s soybean crush margins are currently near the long-term average. In addition, MARA announced a plan of increasing soybean production by 40% to 23 million tons by 2025. As a result, China soybean imports growth may be limited in 2022.

Russia’s 2022 Wheat Crop Seen Rising 9% Y/y, UkrAgroConsult Says

Russia may harvest 82.4m tons of wheat in 2022, up from 75.3m tons in the prior season, Kyiv-based researcher UkrAgroConsult said in its initial outlook for the coming year.

• That could bring exports to 38m tons, versus 32m tons
• “Government rhetoric makes it clear that grain-export control will become a regular practice (with minor adjustments to the regulatory mechanism itself), rather than a matter of maintaining domestic price stability during the pandemic”
• While that may slightly discourage farmers from crops like wheat, significant acreage cuts aren’t expected
  • The grain is a traditional crop in Russia, climate change is expanding its growing region and export prices remain high
• Wheat is in “exceptionally” good condition so far this winter

Indonesian Palm Oil Exporters to Report Shipment Plan in Advance

Indonesia will request exporters of crude palm oil, olein products and used-cooking oil to report their shipment plans in advance, as govt is closely monitoring domestic supply amid surging prices, according to Trade Minister Muhammad Lutfi on Tuesday.

• The policy, that will be implemented next week, is not meant to limit exports
• Govt wants to ensure supply of palm oil for domestic market to cool prices of cooking oil
• Govt will extend market intervention for cooking oil by setting a single retail price of 14,000 a liter for packaging of up to 25 liters, Coordinating Minister for Economic Affairs Airlangga Hartarto says in a separate statement
• The program that covers simple packaged and premium cooking oil will be available for 6 months starting Jan. 19
  • Govt will supply markets across the country with 250m liters of cheap packaged-cooking oil
• Govt to use 7.6t rupiah of funds collected from palm oil export levy by the Indonesia Oil Palm Plantations Fund Management Agency, or BPDPKS, for the program

Urea Price Volatility Extends as Market Looks Toward Spring

U.S. ammonia prices remain robust after a heavy fall-application season and the initial round of spring prepay offers, with international prices also staying strong amid reports of tight supply. U.S. urea prices were under pressure during a second week of high volatility, contributing to significant declines in inland terminal pricing as well.

Urea Prices Plunge, Ammonium Sulfate Firms in Friday Findings

U.S. urea prices remained extremely volatile on reports of surplus imports, with New Orleans (NOLA) pricing dropping to $575 a short ton (st) from $685/st by the end of the week, down from the previous week’s wide $615-$730/st range. The softer market also made its way to inland terminals in the Corn Belt and Plains states, where urea prices ranged broadly at $650-$750/st, down $100/st or more from last week. The phosphate market was under pressure as well, with diammonium phosphate (DAP) prices falling $15-$20/st at NOLA and $5-$15/st at inland warehouses. Though unchanged at NOLA, potash prices at inland terminals also crept lower, falling $5-$15/st from last week, depending on location. Ammonium sulfate prices were strong, however, rising $15-$35/st at NOLA and $25-$35/st in the Corn Belt and Plains states.

China’s Pork Output Rises 29% in 2021 as Hog Herd Builds: Bureau

China’s pork production jumped 29% y/y to 52.96m tons in 2021 as the number of live hogs increased, the statistics bureau said Monday.

• Nation’s hog herd expanded by 10.5% to 449m
• Breeding sows rose by 4%
• Total meat output including pork, beef, mutton and poultry climbed 16.3% y/y to 88.87m tons

Federated Co-op Partners With AGT Foods to Build Canola Plant

Federated Co-operative Limited agrees to build a C$360 million canola crush plant with AGT Food and Ingredients as part of joint venture, the company says Monday in a statement.

• The crush plant will supply about 50% of the feedstock required for a 15,000-barrel-per-day renewable diesel plant around Regina, Saskatchewan
• FCL to hold a 51% ownership stake in partnership with AGT

Ukraine Corn Exports Rise 11% Y/y Through December: UAC

Ukraine shipped 9.75m tons of corn in the first four months of the 2021-22 season, versus 8.8m tons during the same period a year earlier, data from UkrAgroConsult show.

• China is the top market at 2.97m tons, followed by Spain and Netherlands
• Wheat exports are up 28% y/y at 16m tons
• NOTE: Marketing year for corn begins in September, wheat begins in July

U.S. Pork Production Down 6.3% This Week, Beef Up: USDA

U.S. federally inspected pork production falls to 522m pounds for the week ending Jan. 15 from 557m in the previous week, according to USDA estimates published on the agency’s website.

• Hog slaughter falls 6.3% in the week to 2.407m head
• Beef production up 0.4% from a week ago to 522m pounds