Global Ag News For June 3.22
Wheat prices overnight are up 6 1/2 in SRW, up 12 in HRW, up 11 in HRS; Corn is up 1/2; Soybeans down 6; Soymeal down $0.10; Soyoil down 0.14.
For the week so far wheat prices are down 92 3/4 in SRW, down 79 3/4 in HRW, down 94 1/4 in HRS; Corn is down 46 1/2; Soybeans down 9; Soymeal down $1.84; Soyoil up 1.73. For the month to date wheat prices are down 22 3/4 in SRW, down 10 in HRW, down 37 in HRS; Corn is down 22 3/4; Soybeans up 40; Soymeal down $0.90; Soyoil up 3.38.
Year-To-Date nearby futures are up 38% in SRW, up 44% in HRW, up 23% in HRS; Corn is up 23%; Soybeans up 30%; Soymeal up 1%; Soyoil up 44%.
Malaysian palm oil prices overnight were down 23 ringgit (-0.36%) at 6445.China markets are closed for Holiday (Dragon Boat Day).
There were changes in registrations (-23 Oats). 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 2 were: SRW Wheat down 1,699 contracts, HRW Wheat up 112, Corn up 1,721, Soybeans up 2,748, Soymeal up 2,682, Soyoil down 824.
Northern Plains Forecast: Isolated to scattered showers Friday-Monday. Temperatures near to below normal through Monday. Outlook: Isolated to scattered showers Tuesday-Saturday. Temperatures near to below normal Tuesday-Saturday.
Central/Southern Plains Forecast: Isolated to scattered showers through Monday. Temperatures near to below normal through Saturday, near to below normal north and above normal south Sunday-Monday. Outlook: Isolated to scattered showers Tuesday-Saturday. Temperatures near to below normal north and near to above normal south Tuesday-Saturday.
Western Midwest Forecast: Mostly dry Friday. Scattered showers Saturday-Monday. Temperatures near to below normal through Monday.
Eastern Midwest Forecast: Mostly dry Friday-Saturday. Scattered showers Sunday-Monday. Temperatures near to below normal through Monday. Outlook: Isolated to scattered showers Tuesday-Saturday. Temperatures near to below normal Tuesday-Saturday.
Brazil Grains & Oilseeds Forecast: Rio Grande do Sul and Parana: Scattered showers through Saturday. Temperatures near to above normal north and below normal south Friday, near to above normal 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: Mostly dry through Saturday. Temperatures near to below normal Friday-Saturday. La Pampa, Southern Buenos Aires: Mostly dry through Saturday. Temperatures near to below normal Friday-Saturday.
The player sheet for 6/2 had funds: net buyers of 7,000 contracts of SRW wheat, unchanged corn, buyers of 14,500 soybeans, buyers of 2,000 soymeal, and buyers of 9,500 soyoil.
- SOYBEAN SALE: The U.S. Department of Agriculture confirmed private sales of 352,000 tonnes of U.S. soybeans to Pakistan, including 55,000 tonnes of old-crop soy and 297,000 tonnes of new-crop supplies.
- WHEAT PURCHASE: Algeria’s state grains agency OAIC bought around 90,000 tonnes of milling wheat in an international tender this week that covered two small ports
- RICE TENDER: Egypt’s state grains buyer, the General Authority for Supply Commodities, was seeking at least 25,000 tonnes of white rice in a tender-practice on the account of the Holding Company for Food Industries. Offers were to be submitted by May 19.
- WHEAT TENDER UPDATE: Bangladesh’s state grains buyer received the lowest price offer of $464.55 a tonne CIF liner out in an international tender to import 50,000 tonnes of wheat, officials from the country’s grain purchasing agency said on Monday. Trading house Bagadiya Brothers submitted the lowest offer in the tender, which closed on Sunday, the Directorate General of Food added. No purchase had yet been reported and the offers were still being considered, the officials said.
DOE: U.S. Ethanol Stocks Fall 3.2% to 22.961M Bbl
Russia is ready to guarantee safety of vessels carrying grain from Ukraine – Interfax
Russia’s defense ministry said on Thursday that vessels carrying grain can leave Ukraine’s ports in the Black Sea via “humanitarian corridors” and Russia is ready to guarantee their safety, Interfax news agency said.
The defense ministry also said Russia would not use the humanitarian situation in Ukraine for the purposes of what Moscow calls its “special military operation” in Ukraine, Interfax added.
Argentina Soy Estimate Climbs 3.1% on Better Yields: Exchange
Argentina’s soybean harvest is now seen at 43.3m metric tons, up from 42m, thanks to better-than-expected yields, the Buenos Aires Grain Exchange says in a weekly report.
- Soy harvest 94% complete
- Wheat planting estimate falls by 1.5% to 6.5m hectares (16.1m acres) because of dryness
- Farmers are rushing to get wheat in the ground while there’s still soil moisture amid a forecast for more dryness
- A dry June would lead the bourse to cut the estimate further
Brazil Fertilizer Prices Dip as Farmers Pause, Yet Supply Shaky
A fertilizer-demand pullback is quickly spreading across Brazil, with farmers halting negotiations as they hope for further price drops. New price reductions could hit next season’s fertilizers in the coming days. Buyers suggest near-term supply is ample, yet 2H threats are limiting declines.
Brazil Prices Pressured to Promote Demand: Wednesday Whisper
Brazilian fertilizer prices appear to be falling ahead of Friday’s final price assessments as suppliers seek to attract buyers amid weak demand. Though potash has stabilized at port levels, phosphate slipped $20 a metric ton this week to $1,180, while nitrogen prices were down $30 and face further pressure. Despite price declines, especially in the interior, farmers are waiting for even better commercial conditions to place new orders, which might come as the planting season approaches.
Syngenta: Argentina Export Taxes Don’t Solve High Food Prices
Export taxes don’t work to decouple domestic prices from international ones because wheat accounts for just 10%-15% of the overall cost of bread or pasta, Antonio Aracre, CEO for Syngenta in southern Latin America, said at a conference in Buenos Aires.
- The problem in Argentina is very low wages in relation to food prices, so the solution is better wages and help for the poorest families via food subsidy cards
Morocco Suspends Import Tax on Oilseeds: Govt Spokesman
Morocco will suspend import tax on oilseeds from June 3, government spokesman says.
- Measure affects sunflower, soy and rapeseed
- Move aims to ease costs for consumers
- Mustapha Baitas, govt spokesman, speaks at news conference on Thursday
Egypt Discusses Exports to India in Exchange for Wheat Imports
Egypt is still in discussions with India to conclude the agreement to import 500k tons of wheat, Supply Minister Aly El-Moselhy says in interview with Bloomberg in Sharm El-Sheikh.
- The expected agreement may include a swap, importing wheat in exchange of exporting Egyptian products such as fertilizers, goods that India asked for, the minister said
- Indian ambassador in Cairo met Wednesday with the minister to discuss the swap agreement
- El-Moselhy also said Egypt didn’t state quantities of wheat import in new fiscal year that starts in July, waiting to see the indications of local wheat purchase
Palm Oil Stockpiles in Malaysia Seen Shrinking as Exports Soar
- May reserves fell 7.9% from a month earlier: Bloomberg survey
- Exports jumped 21% to 1.27 million tons, production eased 4.1%
Palm oil stockpiles in Malaysia probably fell in May as exports surged the most in eight months after rival Indonesia restricted shipments.
Inventories shrank 7.9% in May from a month earlier to 1.51 million tons, according to the median of 10 estimates in a Bloomberg survey of analysts, traders and plantation executives. That would be the biggest monthly decline since December. Stockpiles rose 12% in April.
Malaysian exports likely jumped 21% to 1.27 million tons, the biggest monthly increase since September. Production of crude palm oil might have slid 4.1% to 1.40 million tons, the lowest level since February.
Demand for palm oil has climbed as Russia’s invasion of Ukraine disrupted supplies of sunflower oil, prompting buyers to seek alternatives. The move by top shipper Indonesia to ban palm oil exports on April 28 before replacing that three weeks later with a domestic sales quota also shifted demand for the cooking oil to neighboring Malaysia.
Data from cargo surveyor SGS Malaysia showed exports to Europe and Turkey jumped in May, with purchases from China and India also improving.
That, alongside lingering uncertainty over Malaysia’s labor shortage, and anticipation that the war would prolong disruptions to the world’s edible oil supply, may keep prices supported. Futures in Kuala Lumpur traded at 6,415 ringgit a ton by the midday break Friday, and have risen 37% this year.
More details from the survey:
- Stockpile estimates were between 1.44 million tons and 1.58 million tons, while production ranged from 1.33 million to 1.43 million
- Export forecasts were from 1.21 million tons to 1.40 million tons
- Imports might slump to around 50,000 tons from 76,395 tons in April
- Local consumption ranged from 240,000 tons to 350,000 tons.
Global Food Prices Stay Near Record as Ukraine War Upends Trade
- Record fertilizer, energy costs are keeping food prices high
- UN gauge of global food costs edged down 0.6% in May
Global food prices stayed near a record as Russia’s invasion of Ukraine disrupted trade, fueling hunger and worsening a cost-of-living crisis.
Russia’s invasion has sharply reduced exports from Ukraine, one of the world’s biggest grain and vegetable oil shippers. The blockade of key Black Sea ports has exacerbated supply-chain turmoil, sending prices soaring and prompting the United Nations to warn that food shortages may spur millions of people to migrate.
A UN gauge of global food costs fell 0.6% in May from the previous month. Vegetable oil prices declined 3.5%, partly due to the removal of Indonesia’s export ban on palm oil, the UN’s Food and Agriculture Organization said.
Farmers are facing record high energy and input costs, and the UN has said a lack of fertilizer could deepen the food crisis in 2023. Food prices were already high due to logistics snarl-ups and a rebound in demand after the pandemic. Food inflation is hitting the hardest in poor countries where groceries make up a large share of consumer budgets.
The UN food price index soared 13% in March, its fastest pace on record, immediately after Russia’s attack, before declining slightly in April as demand for vegetable oil fell and corn prices weakened.
Vegetable oil and grain prices have been whipsawed by protectionist measures as countries have sought to protect their own markets. Malaysia has banned chicken exports, while India has moved to curb wheat and sugar shipments.
CEPEA: AWARE OF THE POSSIBLE RECORD HARVEST, PURCHASERS LOWER DEMAND AND PRESS DOWN VALUES
Corn purchasers were not interested in closing deals in May, since the possibility of a record 2nd crop may press down values. Besides, purchasers reported to have stocks.
As for sellers, some agents were willing to reduce asking prices, either to take advantage of the still high price levels – before quotations drop as the harvesting advances – or to make room in warehouses to receive the new crop. Most of the corn from the second crop is expected to be traded through contracts and not sold in the spot market.
In this context, between April 29th and May 31st, the ESALQ/BM&FBovespa Index for corn (Campinas, SP) decreased by 2.3%, to BRL 86.25 (USD 18.15) per 60-kilo bag on May 31st. The average of the month closed at BRL 87.36, 1.59% higher than that in April.
PORTS – Brazilian corn farmers were focused on the export parity in May, as an alternative to negotiate the cereal and underpin quotations. With devaluations abroad and the dollar depreciation, corn prices dropped at ports in May. The American currency dropped by 4% between April 29th and May 31st, to BRL 4.75 on May 31st. Thus, corn values decreased by 2.6% at the port of Paranaguá (PR), to BRL 92.44/60-kilo bag on May 31st.
CROPS – In general, crops are developing well. In Mato Grosso, the only Brazilian state where the harvesting has begun, 1.2% of the crops had been harvested by May 20, according to Imea.
In Paraná, 99% of the first crop of corn had been harvested by May 23, according to Seab/Deral. Agents were now monitoring the second crop, whose conditions were: 84% good, 14% average, and 2% bad. Production in PR is estimated at 16 million tons, a record for the state.
In Rio Grande do Sul, the harvesting of the first crop of corn was slow in May because of rains and the priority of working in soybean crops. According to Emater/RS, 90% of the state area had been harvested by May 26.
CEPEA: SOWING BEGINS IN RS; PRICES RISE IN BR IN MAY
Cepea, June 2nd, 2022 – Wheat sowing is in progress in Brazil. In May, activities took place in Paraná (PR) and began, late in the month, in Rio Grande do Sul (RS), the Brazilian state with the highest output in 2021.
In Paraná, 50% of the area estimated for the state has been sown, and the output is expected to be higher than that last year, despite the smaller area. According to Deral/Seab, by May 23rd, 53% of the area estimated for PR had been sown, and 99% of the crops were in good conditions. The area allocated to wheat crops in PR is expected to shrink by 4% compared to that last season because of the competition with corn; thus, the area with wheat crops is expected to total 1.17 million hectares. Still, the output in PR is forecast at 3.9 million tons, 21% higher.
In Brazil, data from Conab (Brazil’s National Company for Food Supply) show that, by May 21st, 27.5% of wheat crops had been sown. In Goiás, Minas Gerais, Bahia and Mato Grosso do Sul, activities are over; in São Paulo, 62% of the area has been sown, and in Paraná, 43%.
Despite the conditions of Brazilian wheat crop, the dollar depreciation against the Real and wheat price drops abroad, the domestic quotations increased in May. Data from Cepea show that, between May 2nd and 27th, the monthly averages were at record levels in the states in southern BR and in SP, considering the price series, which began in 2004. In PR, the average was at BRL 2,022.74/ton, and in SP, at BRL 2,006.29/ton.
CEPEA: HIGHER SUPPLY IN SOUTH AMERICA AND DOLLAR DEPRECIATION PRESS DOWN VALUES IN BR
Cepea, June 2nd, 2022 – The harvesting of the 2021/22 soybean crop is almost over in South America. Thus, supply has been higher than demand, resulting in price drops in Brazil. The dollar depreciation against the Real, which makes the Brazilian product more expensive to importers, put even more pressure on domestic quotations in May.
In Brazil, the harvesting of the 2021/22 soybean crop is ending. According to Conab, 98.1% of the national crop had been harvested by May 21. Activities are still going on in the states of Maranhão (89%), Santa Catarina (98%) and Rio Grande do Sul (90%).
In Argentina, the dry weather has been favoring crop activities in the 2021/22 season. On May 26, the Bolsa de Cereales released a report showing that 89.9% of the national crop had been harvested by May 24, and that the average productivity is higher than that initially forecast. Production is forecast at 42 million tons, according to the Bolsa de Cereales.
As for domestic trades, Brazilian consumers were cautious when buying soybean in May, aware of the low volume of the 2021/22 already sold and the possible supply increase in the short-term. Indeed, most cooperatives and cereal companies in central-western and southeastern BR reported the need of room in warehouses to receive the new crop of corn.
In Mato Grosso, 73.37% of the soybean crop has been sold, according to Imea, against 83.46% in the same period last season and 78.59% on the average of the last five years. In southern and southeastern BR, less than 60% have been traded, according to agents consulted by Cepea.
Thus, quotations dropped in Brazil in May. Between April 29th and May 31st, the CEPEA/ESALQ Index Paraná and the ESALQ/BM&FBovespa Index Paranaguá (PR) decreased by 3% and 2.6%, respectively, closing at BRL 185.47 (USD 39.04) per 60-kilo bag and at BRL 190.05 (USD 40.00) per 60-kilo bag on May 31st. The dollar dropped by a steep 4%, to BRL 4.75 on May 31st.
U.S. Grain Movement by Rail Fell 15.7% Week Ended May 25: USDA
U.S. Barge Shipments of Grain Rose 33% Last Week: USDA
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