Global Ag News for June 10.22

HEADLINES TODAY

Wheat prices overnight are down 4 1/2 in SRW, down 3 1/2 in HRW, up 3 in HRS; Corn is down 5; Soybeans down 12 3/4; Soymeal down $0.15; Soyoil down 0.82.

For the week so far wheat prices are up 26 3/4 in SRW, up 30 3/4 in HRW, up 35 1/4 in HRS; Corn is up 24; Soybeans up 47 3/4; Soymeal up $0.94; Soyoil up 0.52. For the month to date wheat prices are down 20 3/4 in SRW, down 15 1/4 in HRW, down 20 1/2 in HRS; Corn is up 1/4; Soybeans up 60; Soymeal down $1.50; Soyoil up 2.48.

Year-to-Date nearby futures are up 38% in SRW, up 44% in HRW, up 25% in HRS; Corn is up 30%; Soybeans up 33%; Soymeal up 4%; Soyoil up 46%.

Chinese Ag futures (SEP 22) Soybeans down 56 yuan; Soymeal up 30; Soyoil down 100; Palm oil down 264; Corn down 17 — Malaysian palm oil prices overnight were down 285 ringgit (-4.59%) at 5925.

There were no changes in registrations. Registration total: 1,010 SRW Wheat contracts; 0 Oats; 0 Corn; 0 Soybeans; 98 Soyoil; 0 Soymeal; 139 HRW Wheat.

Preliminary changes in futures Open Interest as of June 9 were: SRW Wheat down 1,049 contracts, HRW Wheat up 1,535, Corn down 4,421, Soybeans up 9,110, Soymeal down 2,866, Soyoil down 2,680.

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

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

Western Midwest Forecast: Isolated to scattered showers through Monday. Temperatures near to below normal through Saturday, above normal Sunday-Monday.

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

Canadian Prairies Forecast:  Showers will spread across the region through the weekend but be more isolated. A stronger system will move through the region early to mid-next week with scattered showers across the region. Amounts may be heavy across the region, which would be good for the southwest, but not for the east as planting continues to be slow in wet soils.

 Black Sea Region Forecast: Showers may get into western areas over the weekend, but most of Russia will be dry until next week. There are pockets of the region that are a bit on the drier side, especially in Russia, which could stress crops a bit, but overall the region is in good shape for now.

The player sheet for 6/9 had funds: net sellers of 3,500 contracts of  SRW wheat, buyers of 4,500 corn, sellers of 10,500 soybeans, buyers of 4,000 soymeal, and  sellers of 3,000 soyoil.

TENDERS

  • SOYBEAN SALES: The U.S. Department of Agriculture confirmed private sales of 143,000 tonnes of U.S. soybeans to unknown destinations, including 500 tonnes for delivery in the 2021/22 marketing year that began Sept. 1, 2021, and the remaining 142,500 tonnes for 2022/23 delivery.
  • WHEAT PURCHASE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 146,990 tonnes of food-quality wheat from the United States and Canada in regular tenders that closed on Thursday. The ministry also tendered 22,260 tonnes of Standard White wheat from Australia on Tuesday, but no deals were done for the supply, a ministry official said.

PENDING TENDERS

  • 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: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said it will seek 70,000 tonnes of feed wheat and 40,000 tonnes of feed barley via a simultaneous buy and sell (SBS) auction that will be held on June 15.
  • BARLEY TENDER: Jordan’s state grains buyer has issued a new international tender to purchase 120,000 tonnes of animal feed barley

Fertilizer producer Nutrien to boost potash output amid global shortage

Nutrien Ltd, the world’s largest fertilizer producer, said on Thursday it will increase its Canadian potash production by 20% to an annual 18 million tonnes by 2025, helping to address tight supplies that have contributed to a global food shortage.

Potash prices have soared since the West imposed sanctions against Russia for Moscow’s invasion of Ukraine, crimping an already tight fertilizer market.

Russia and Belarus, which also faces sanctions, are the world’s second- and third-largest producers of the crop nutrient, while Canada is the No. 1 producer.

“The world needs these volumes in order to feed people well,” said Ken Seitz, Nutrien’s interim chief executive, at a meeting with investors.

Seitz said it will take at least several years to replenish global crop supplies and for Russian and Belarussian potash trading volumes to return to normal levels.

Nutrien’s expansion falls well short of fully replacing the eastern European production. The world is short 10 million tonnes from that region and Nutrien’s extra output of 3 million tonnes annually by 2025 should be quickly absorbed, said RBC Capital Markets analyst Andrew Wong.

The potash ramp-up will use Nutrien’s existing mines in the province of Saskatchewan.

Wong estimated the expansion’s cost at $300 million to $900 million.

The company said it was advancing previously announced boosts of its nitrogen fertilizer capacity to add 500,000 tonnes annually by the end of 2025, and is considering further expansion.

Nutrien also said it plans to repurchase an additional $2 billion worth of shares.

Nutrien’s shares rose 3.3% in Toronto.

Switzerland Makes Rare US Wheat Buy as World Awaits EU Crops

  • European wheat prospects are dimming due to dry weather
  • Italy also has ramped up purchases of American grains

The Swiss are turning to American wheat for the first time in more than a decade as buyers there get nervous about supplies with crops in Europe still a few weeks away from harvest.

Switzerland’s purchase last week of 50,000 metric tons of wheat marks the country’s first such purchase since 2011, according to US Department of Agriculture data. The Swiss typically rely on countries like nearby Germany and France for imports.

The move by the country that prizes its braided zopf bread highlights the anxiety over supplies, as Russia’s war with Ukraine disrupts supplies and puts vulnerable countries at risk of food shortages. Adding to that is the dry weather that’s hampering the outlook for European Union grains. US winter wheat also is smaller than expected due to drought.

Other European countries also have looked to the US for grains since Russia invaded Ukraine in late February. Italy has booked more than 70,000 metric tons of American corn, far exceeding its last sizable buy of about 28,000 tons in 2011, USDA records show.

China Cuts Edible Oil Import Estimate on Stronger Global Prices

China trims its edible oil import estimate by 13% to 7.43m tons in 2021-22 due to rising prices of palm and soybean oils in the global market, according to the China Agricultural Supply & Demand Estimates (CASDE).

  • NOTE: The country earlier estimated to import 8.53m tons
  • Cotton purchase forecast reduced by 100,000 tons to 2m tons in 2021-22 on ample domestic supply and weak demand
  • Plantings of spring corn and soybeans have almost been completed; weather in northeastern China is favorable for crop growth
  • Heavy rains in Guangxi and Guangdong provinces have caused some floods, but the impact on sugar cane have been limited so far

Argentina Wheat Planting Shrinks on Dryness: Exchanges

Planting forecast falls by 2.4% to 6.2m hectares (15.3m acres) from 6.35m in May, the Rosario Board of Trade says in its monthly estimates report

  • “La Nina is still active”
  • 80% of the Pampas crop belt is considered dry or very dry
  • The last time farms were this dry in June was 2009
  • NOTE: When topsoil is too dry, farmers can’t get seeds in the ground
  • Farmers need rain before the planting window shuts in late-June/early-July, but weather forecasts aren’t promising
  • Wheat production could reach 18.5m metric tons if weather conditions improve as plants grow
    • NOTE: Last year’s wheat output was a record 23m tons, according to Rosario
  • Rosario’s estimate for the soy crop that farmers are finishing harvesting climbs by 2.4% to 42.2m tons from 41.2m last month
  • The Buenos Aires Grain Exchange also trimmed its wheat area forecast again on Thursday in a weekly report
    • It dropped another 1.5% to 6.4m ha from 6.5m last week
    • Continued dryness would force analysts to keep cutting the estimate

Malaysia May Palm Stockpiles -7.4% M/m to 1.52M Tons: MPOB

Palm oil stockpiles in Malaysia, the world’s second-largest producer, fell 7.4% to 1.52 million tons in May from a month earlier, Malaysian Palm Oil Board says in statement today.

  • Palm oil exports +26.7% m/m to 1.36m tons
  • Crude palm oil production -0.1% m/m to 1.46m tons

French Wheat, Corn Conditions Decline in Week to June 6: AgriMer

The share of France’s soft-wheat crop rated in good or very good condition fell to 66% as of June 6 from 67% the prior week, according to FranceAgriMer data.

  • NOTE: Heat and dryness during May hampered grain crops
  • Rains have recently improved, although some farms also faced damage from hail during storms in early June, according to wheat growers group AGPB

 Indonesia Max. Palm Oil Export Tax $288/Ton at CPO Above $1500/T

Indonesia, the world’s largest palm oil producer, has revised its rule on export tax to support a stable price of CPO and its domestic market supply of cooking oil, according to a decree issued by the finance ministry on its website.

  • The maximum export tax is set at $288/ton for when CPO price exceeds $1,500/ton: ministry
  • The rule, signed on Thursday, takes effect on June 10
  • Revision also aimed at strengthening govt’s fiscal capacity in anticipating price changes in the global market

Indonesia eases export rules further to ‘flush out’ palm oil stocks

  • Exports allowed for non-members with $200/T fee -minister
  • Firms can ship 5 times domestic sales volume during ‘transition’
  • Farmers struggling while refiners’ inventory high
  • July exports could hit near 2.5 mln T if ‘it goes well’ -GAPKI

Indonesia is further easing rules to allow more companies to export palm oil, an official said on Friday, aiming to ease bottlenecks and swelling inventories caused by an export ban and regulatory changes implemented to maintain domestic supply.

The world’s top palm oil exporter allowed palm shipments to resume from May 23 following a three-week ban designed to boost cooking oil stocks and keeping runaway prices in check amid growing domestic discontent.

But exports have been slow to restart, with confusion over procedural issues and new requirements for firms to join a government bulk cooking oil distribution programme, where a portion of their product goes to the domestic market before export permits can be granted.

Companies that have not joined the programme, however, will still be allowed to ship palm oil, providing they pay a $200 per tonne charge on top of the export tax and levy, senior minister Luhut Pandjaitan said on Friday. (Full Story)

Luhut said the latest concession was to “flush out” and reduce high palm oil inventories that have prevented refiners from buying more palm fruits from farmers, part of its new “acceleration programme”.

Indonesia aims to export at least 1 million tonnes of palm oil products by July 31 under the scheme.

Nitrogen Prices Take a Breather as Gas, Demand Fall With Season

Nitrogen’s price decline is poised to extend into 3Q due to lower input costs, soft demand and new Middle East capacity. Still, 15% of global ammonia trade remains offline because of the Russia-Ukraine war. Winter heating season — and higher natural gas demand — could support firmer nitrogen prices.

U.S. Grain Movement by Rail Up 6.2% Week Ended June 1: USDA

U.S. Barge Shipments of Grain Fell 38% Last Week: USDA

Shipments along the Mississippi, Illinois, Ohio and Arkansas rivers declined in the week ending June 4 from the previous week, according to the USDA’s weekly grain transportation report.

  • Barge shipments of corn fell 41% from the previous week
  • Soybean shipments down 29% w/w

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