Global Ag News for Jan 31.22
TODAY – EXPORT INSPECTIONS
Wheat prices overnight are up 8 in SRW, up 11 in HRW, up 9 in HRS; Corn is up 4 1/4; Soybeans up 20 3/4; Soymeal up $0.57; Soyoil up 0.92.
For the week so far wheat prices are up 7 1/2 in SRW, up 8 1/4 in HRW, up 11 1/4 in HRS; Corn is up 4 1/4; Soybeans up 20 1/2; Soymeal up $0.65; Soyoil up 0.80. For the month to date wheat prices are up 23 1/2 in SRW, up 11 3/4 in HRW, down 52 3/4 in HRS; Corn is up 47; Soybeans up 151 1/2; Soymeal up $17.80; Soyoil up 9.66.
China markets are closed until Feb 7th. Malaysian palm oil prices overnight were down 36 ringgit (-0.64%) at 5592.
There were changes in registrations (-6 Soyoil). Registration total: 1,900 SRW Wheat contracts; 21 Oats; 50 Corn; 316 Soybeans; 137 Soyoil; 0 Soymeal; 92 HRW Wheat.
Preliminary changes in futures Open Interest as of January 28 were: SRW Wheat up 11 contracts, HRW Wheat up 240, Corn up 10,256, Soybeans up 9,119, Soymeal up 2,719, Soyoil up 5,974.
Brazil Grains & Oilseeds Forecast: Rio Grande do Sul and Parana Forecast: Scattered showers north through Saturday. Mostly dry Sunday. Isolated showers Monday. Mostly dry Tuesday. Temperatures near to below normal through Sunday, near normal Monday-Tuesday. Mato Grosso, MGDS and southern Goias Forecast: Scattered showers through Tuesday. Temperatures near normal through Tuesday.
Argentina Grains & Oilseeds Forecast: Cordoba, Santa Fe, Northern Buenos Aires Forecast: Mostly dry through Saturday. Isolated showers Sunday. Mostly dry Monday-Tuesday. Temperatures near to below normal through Tuesday. La Pampa, Southern Buenos Aires Forecast: Mostly dry through Saturday. Isolated showers Sunday. Mostly dry Monday-Tuesday. Temperatures near to below normal through Tuesday.
The player sheet for Jan. 28 had funds: net buyers of 5,500 contracts of SRW wheat, buyers of 19,000 corn, buyers of 12,500 soybeans, buyers of 4,000 soymeal, and buyers of 6,000 soyoil.
- WHEAT PURCHASE: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), bought 420,000 tonnes of wheat in an international tender. The purchase included 60,000 tonnes of Ukrainian, 60,000 tonnes of Russian and 60,000 tonnes of Romanian-origin wheat for shipment March 5-15, and 120,000 tonnes of Ukrainian, 60,000 tonnes of Romanian and 60,000 tonnes of Russian-origin wheat for shipment March 16-26, GASC said.
- SOYBEAN SALES: The U.S. Department of Agriculture confirmed private sales of 264,000 tonnes of new-crop U.S. soybeans to China, as well as 251,500 tonnes of old-crop soybeans to unknown destinations and another 141,514 tonnes to Mexico.
- FEED BARLEY, SOYMEAL PURCHASE: Iranian state-owned animal feed importer SLAL purchased around 60,000 tonnes of animal feed barley and 60,000 tonnes of soymeal in an international tender
- SOYMEAL PURCHASE: South Korean importers Feed Leaders Committee (FLC) and Feed Buyers Group (FBG) jointly bought about 60,000 tonnes of soymeal expected to be sourced from South America in a private deal without issuing an international tender
- FEED WHEAT PURCHASE: An importer group in the Philippines bought around 50,000 tonnes of animal feed wheat to be sourced from Australia in an international tender
- WHEAT PURCHASE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought 22,410 tonnes of food-quality wheat from Australia in a regular tender that closed late on Friday.
- SUNFLOWER OIL PURCHASE: Turkey’s state grain board TMO provisionally bought about 6,000 tonnes of crude sunflower oil in an international tender to purchase and import the same volume, traders said.
- RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 46,344 tonnes of rice to be mainly sourced from China with some from Thailand
- 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
- BARLEY TENDER UPDATE: Jordan’s state grains buyer reissued an international tender to purchase 120,000 tonnes of animal feed barley after postponing the tender on Wednesday
Brazil 2021/22 Soybean Harvest 11.3% Done by Jan. 28: Safras
(Bloomberg) — Brazilian producers have harvested 11.3% of the 2021/22 soybean crop by Jan. 28, consulting firm Safras & Mercados said in an emailed report.
Harvest pace is advance compared with same period a year ago, when only 1.4% of the 2020/21 crop was reaped.
Mato Grosso 2021-22 Soy Harvest Ahead of Previous Years: IMEA
Harvest is 31.82% done as of Jan. 28, IMEA says in a report.
- Compares to 4.71% last year, 5-year average 20.98%
- Average yields are similar to last year
- The west and mid-north regions are the most advanced, above 40% done
- Producers are taking advantage of the good planting window to plant their second crops, according to IMEA
- Planting of second corn crop, known as the Safrinha, is 23.7% done and cotton is 69.7% planted
South America Soy Output Seen 20M-25M Lower on Weather: Gavilon
South America could lose 20m to 25m tons of its soybean harvest potential due to recent adverse weather, Thiago Eisele Milani, head of soybean trading at Gavilon, said Friday at the Paris Grain Day conference. Dry spell encompassed parts of Brazil, Argentina, Paraguay and Uruguay.
EPA Delays Deadlines for Oil Refineries to Meet Biofuel Quotas
The EPA on Friday finalized plans to give refineries more time to prove they have fulfilled 2020, 2021 and 2022 biofuel-blending requirements.
- In a final rule published online, the agency also said small refineries will have until the next quarterly reporting deadline after the 2021 blending quotas are established to fulfill them
- NOTE: Quarterly reporting deadlines under the Renewable Fuel Standard are March 31, Jun 1, Sept. 1 and Dec. 1
- For all refineries and fuel importers, the deadlines for reporting compliance with 2022 targets that have not yet been finalized will be the next quarterly deadline after either the effective date of the 2023 standards or the 2021 compliance reporting deadline, whichever is later
- Biofuel advocates argued against the move
U.S. CBP to Seize Palm Oil Linked to Sime Darby Plantation
The U.S. Customs and Border Protection will seize at all U.S. ports of entry palm oil and merchandise containing palm oil traceable to Malaysian firm Sime Darby Plantation Berhad, including the firm’s subsidiaries and joint ventures, due to determination the company used forced labor.
The Department of Homeland Security announces the enforcement action in a statement.
Argentina 2021 soy crushing volume at 5-year peak – exchange
Argentina’s soybean crushing volume recorded its highest level in five years in 2021, reaching 42.4 million tonnes, the Rosario grains exchange said on Friday.
The South American country is the world’s largest exporter of processed soy meal and oil, as well as the No. 2 producer of corn.
The exchange said the amount of soybean processing in the calendar 2021 was up 17.7% from 2020, when activity was hit by the impact of the COVID-19 pandemic. It was, however, lower than the 44.5 million tonnes in 2016.
CORN/CEPEA: Valuations prevail, but in corn-consuming regions, prices drop
Cepea, December 28 – Corn prices are still rising in most Brazilian regions surveyed by Cepea. Despite the progress of the summer crop harvesting, concerns about lower productivity are underpinning values in some areas. Purchasers are buying lower volumes, constraining valuations or even pressing down quotations in typical corn-consuming regions.
Among the major summer crop producing regions (Rio Grande do Sul, Santa Catarina, Paraná, São Paulo and Minas Gerais), values have dropped only in MG and in SP. In southern Brazil, although prices have not increased as much as that in previous weeks, valuations prevailed in the last seven days.
In southeastern BR, Cepea collaborators have reported that good weather conditions during crops development are cheering farmers up about a possible high productivity. Thus, the harvesting has begun in some regions, such as São Carlos (SP) and the Triângulo Mineiro. According to data from Cepea, corn prices dropped 0.6% ad 1.8% in the respective areas in the last seven days.
In Campinas (SP), the ESALQ/BM&FBovespa Index for corn dropped by 0.8% in the last seven days, to BRL 97.37 (USD 17.94)/60-kilo bag on Thursday, Ja. 27th – lower demand pressed down values. However, in January, this Index has increased by almost 8%.
On the other hand, in southern Brazil, bad weather conditions since early December have been pushing up corn prices, which have already surpassed BRL 100/bag in some regions. In these areas, purchasers are concerned about supply in the coming months, since productivity assessment will depend on the assessment of the damages caused by the weather. Between Jan. 20 and 27, corn prices rose by 0.7% in the wholesale market of Ijuí (RS), 1.4% in Chapecó (SC) and 1.9% in Western Paraná.
On the average of the regions surveyed by Cepea, the prices paid to corn farmers (over-the-counter market) rose by 1.2%; in the wholesale market (deals between processors), values increased by 0.6%.
In the coming weeks, as the harvesting of the summer crop of grains advances and soybean supply increases, many sellers may prioritize sales and delivery of soybean. Besides, freight costs may rise, due to higher demand to deliver other products, which may underpin corn prices at high levels.
SOYBEAN/CEPEA: Demand is higher than supply, and prices set records in BR
Cepea, January 28 – Brazilian processors and international purchasers have been more interested in buying the national soybean this week. However, deals were constrained by low supply – with the slow flow of the new crop into the market and uncertainties related to yield, farmers have been cautious about selling large batches. This week, farmers have even prioritized corn sales rather than soybean sales, aiming to make room in warehouses to receive the new crop of soybean.
Thus, the export premiums in Brazil as well as the domestic prices for soybean set new nominal records. At the port of Paranaguá (PR), the premium for shipment in March/22 had bidding prices at 85 cents of dollar per bushel and asking prices at 98 cents of dollar/bushel – considering the March contract traded in January, this is the highest nominal value in the series of Cepea, which began in June/2004.
Soybean FOB price, for shipment in March/22, rose by 3.6% in the last seven days, to USD 537.35/ton on Thursday, 27, resulting in an export parity of BRL 186.25/60-kilo bag, based on the future dollar traded at B3 (São Paulo Stock Exchange) on January 27th.
The export parity is higher than prices in the national spot market. On Wednesday, 26, the ESALQ/BM&FBovespa Index Paranaguá set a nominal record in the series of Cepea, by closing at BRL 184.22 (USD 34.07)/60-kilo bag. However, on Jan. 27th, the average dropped to BRL 181.48/bag, still 1.2% up from that on the previous Thursday.
The CEPEA/ESALQ Index Paraná for soybean rose by 1.8% between January 20 and 27, to BRL 179.22 (USD 33.02)/60-kilo bag on Thursday, 27, the highest, in nominal terms, in the series of Cepea, which began in July/1997. On the average of the regions surveyed by Cepea, prices increased by 3% in the over-the-counter market (paid to farmers) and by 2.1% in the wholesale market (deals between processors). The dollar rose by a slight 0.3% in the last seven days, to BRL 5.427 on Jan. 27.
The upward trend of prices in Brazil is also linked to international valuations. The future contracts traded at CME Group were influenced by expectations for higher demand for the soybean from the United States, due to speculation about lower supply in South America.
CROPS – Recent rains hampered the soybean harvesting in the major producing regions in Brazil. Still, activities have advanced more than that in the same period last season.
According to Conab, 5.5% of the Brazilian soybean crop had been harvested until Jan. 22, more than the 0.9% from the same period last year. However, it is important to mention that cases of Asian soybean rust have been reported, concerning agents.
Russian Wheat-Export Tax to Fall to $93.90 a Ton Next Week
Russia’s wheat export customs duty will fall to $93.90/ton next week, from $95.80, according to the Agriculture Ministry’s website.
- NOTE: The rates are set weekly and take effect three working days after publication
- NOTE: Russia started the floating tax from June 2, with a $28.10/ton levy
Strategie Grains raises EU rapeseed crop estimate to 18.2 mln T
Strategie Grains has increased its monthly forecast for this year’s European Union rapeseed harvest to 18.2 million tonnes from 18.0 million, the consultancy said in an oilseed report.
The estimate would now be 7.4% above 2021’s output of 16.95 million tonnes, it said.
The upward revision mainly reflected an increased area estimate in some major producing countries, including France, Lithuania and Poland.
Urea’s Slump Portends Decline in U.S. Anhydrous Ammonia Pricing
Corn Belt urea and ammonia are trading at the widest spread since 2008, signaling a possible drop in ammonia prices in time for U.S. spring planting, assuming the urea slump continues. Ammonia and UAN prices remain robust after a heavy 4Q application season and the initial round of spring prepay offers. Tampa ammonia rose slightly to $1,135 a metric ton for February, despite urea’s per-unit decline.
Urea Price Drop Signals Spring Ammonia Correction: Weekly Wrap
Urea’s relative value portends a steep drop in ammonia prices ahead of spring demand. Spring anhydrous offers remain at $1,300-$1,350 a short ton in the Corn Belt despite urea’s 27% drop from December’s peak of $855 a ton. On a nutrient basis, ammonia is trading at the highest premium to urea since October 2008. Should the products return to an average spread, ammonia would trade at $900 a ton in the Corn Belt, down $450 from the prompt price. Large anhydrous applications in 4Q suggest corn farmers will switch to more economical urea in spring.
Indonesia Says CPO Auction Still Uses Mkt Price Amid Export Rule
Trade Minister Muhammad Lutfi says that the auction of crude palm oil managed by state-owned Kharisma Pemasaran Bersama Nusantara is still using market prices for bid/offer amid the implementation of domestic price obligation, he says in a statement Monday.
- Govt’s domestic price obligation policy, known as DPO, is being misunderstood by companies because buyers bid for CPO at a lower price which worries farmers
- NOTE: Govt requires exporters to allocate 20% of CPO and RBD palm olein shipments for local supply at 9,300 rupiah/kg and 10,300/kg, respectively
- The policy is aimed at ensuring supply of raw materials for local producers so that consumers can buy cooking oil at an affordable price
Malaysia’s Jan. 1-31 Palm Oil Exports 1,105,407 Tons: AmSpec
Shipments fall 25.9% from 1,491,985 tons exported during Dec. 1-31, according to AmSpec Agri on Monday.
U.S. Pork Production Rises 4.8% This Week, Beef Up: USDA
U.S. federally inspected pork production rises to 557m pounds for the week ending Jan. 29 from 531m in the previous week, according to USDA estimates published on the agency’s website.
- Hog slaughter rises 4.3% in the week to 2.546m head
- Beef production up 1% from a week ago to 541m pounds
- For the year, beef production is 7.1% below last year’s level at this time, and pork is 12.2% below
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