Global Ag News For June 30.22

HEADLINES TODAY

Wheat prices overnight are up 1 3/4 in SRW, up 6 3/4 in HRW, down 2 1/2 in HRS; Corn is down 5; Soybeans down 5 1/2; Soymeal down $0.28; Soyoil down 0.13.

For the week so far wheat prices are up 1 in SRW, up 7 1/4 in HRW, down 37 1/4 in HRS; Corn is down 22; Soybeans up 51 1/2; Soymeal up $1.46; Soyoil up 2.23. For the month to date wheat prices are down 165 3/4 in SRW, down 174 in HRW, down 221 1/2 in HRS; Corn is down 62 3/4; Soybeans down 36 3/4; Soymeal up $2.20; Soyoil down 7.87.

Year-to-Date nearby futures are up 19% in SRW, up 24% in HRW, up 3% in HRS; Corn is up 29%; Soybeans up 26%; Soymeal up 13%; Soyoil up 29%.

Chinese Ag futures (SEP 22) Soybeans down 6 yuan; Soymeal up 14; Soyoil down 48; Palm oil down 58; Corn down 19 — Malaysian palm oil prices overnight were up 17 ringgit (+0.35%) at 4920.

There were changes in registrations (1,658 SRW Wheat). Registration total: 2,668 SRW Wheat contracts; 0 Oats; 0 Corn; 0 Soybeans; 98 Soyoil; 0 Soymeal; 66 HRW Wheat.

Preliminary changes in futures Open Interest as of June 29 were: SRW Wheat up 48 contracts, HRW Wheat down 2,952, Corn down 33,993, Soybeans down 12,365, Soymeal down 1,923, Soyoil down 3,720.

Northern Plains Forecast: Milder temperatures will be in place across the Northern Plains for most of the next week, with a brief heat burst on Wednesday. A front will be around the region through Thursday and likely remain stalled near the area through the weekend and into next week, producing scattered showers. Showers will be streaky again, but at least remain in the area. Showers and mild temperatures should keep soil moisture favorable for most of the region while favoring crop growth as well.

Central/Southern Plains Forecast: There’s a potential tropical system to move into Texas on Thursday. Even if it does not get classified as a tropical storm, heavy rain will be possible in eastern Texas and possibly into southeastern Oklahoma as well. Showers may also occur across the north this weekend as a system passes by to the north. Any showers and cooler temperatures would be beneficial for growth for corn and soybeans, but have some negative effect on wheat harvest. Heat starts to build back in next week reversing those aspects.

Midwest Forecast: A front moved into the northern areas of the Midwest on Tuesday and will waffle around through early next week, producing occasional showers. Temperatures may come up above normal south of the front, but nothing extreme is forecast. Showers that occur will be streaky, hitting some areas and missing more. Heat and a lack of rainfall have developed pockets of dryness and flash drought conditions that may worsen with time going through July.

Canadian Prairies Forecast:  Western areas of the Canadian Prairies have seen increases in soil moisture that have been very favorable while eastern areas remain too wet. A system moving through on Wednesday into Thursday will bring more showers through the region. And the potential for more systems over the weekend and next week will keep the region active. Conditions will continue to be mixed for a while, favoring the west over the east, including with temperatures.

Black Sea Forecast: An upper-level low brought showers to the Black Sea region over the last several days, but has moved south into Turkey and showers are becoming much more isolated. Heat is increasing in Ukraine and will spread to Russia next week, causing more concerns for corn and sunflowers. The weather will be more favorable for wheat harvest, however.

Europe Forecast: A heatwave over eastern Europe will continue into next week, turning what used to be good conditions for spring crops into concerns with declining soil moisture. However, winter wheat and other winter grains should have overall more favorable conditions as harvest starts up. The heat is forecast to break around the middle of next week. Showers across the west are making for opposite conditions, though long-term dryness is still a concern. Farther south, Spain and Italy remain too hot and dry for summer crops nearing reproduction.

The player sheet for 6/29 had funds: net sellers of 1,500 contracts of  SRW wheat, unchanged corn, sellers of 8,500 soybeans, buyers of 4,000 soymeal, and  buyers of 1,500 soyoil

TENDERS

  • WHEAT PURCHASE: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), said it bought 815,000 tonnes of wheat in an international purchasing tender.
  • WHEAT PURCHASE: The Taiwan Flour Millers’ Association purchased an estimated 40,000 tonnes of milling wheat to be sourced from the United States in a tender which closed on Wednesday
  • CORN PURCHASE: South Korea’s Major Feedmill Group (MFG) purchased an estimated 136,000 tonnes of animal feed corn all expected to be sourced from South America in an international tender which closed on Wednesday
  • CORN PURCHASE: Taiwan’s MFIG purchasing group bought about 55,000 tonnes of animal feed corn to be sourced from South Africa in an international tender which closed on Wednesday
  • SOYMEAL TENDER PASSED: South Korean animal feed maker Nonghyup Feed Inc (NOFI) is believed to have rejected all offers and made no purchase in a tender to buy up to 120,000 tonnes of soymeal which closed on Tuesday
  • BARLEY TENDER PASSED: Jordan’s state grain buyer is believed to have made no purchase in an international tender for 120,000 tonnes of animal feed barley which closed on Wednesday
  • 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
  • SUNFLOWER OIL TENDER: Turkey’s state grain board TMO issued an international tender to purchase about 18,000 tonnes of crude sunflower oil

PENDING TENDERS

  • WHEAT TENDER: A government agency in Pakistan issued an international tender to purchase and import 500,000 tonnes of milling wheat
  • WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of milling wheat
  • CORN TENDER: South Korean feedmaker Nonghyup Feed Inc (NOFI) has issued an international tender to purchase up to 138,000 tonnes of animal feed corn

Brazil 2021/2022 total corn crop seen at 116.10 million tns – Datagro

  • BRAZIL 2021/2022 TOTAL CORN CROP SEEN AT 116.10 MILLION TNS VERSUS 114.35 MILLION TNS IN PREVIOUS FORECAST – DATAGRO
  • BRAZIL 2021/2022 SECOND CORN CROP SEEN AT 91.25 MILLION TNS VERSUS 89.50 MILLION TNS IN PREVIOUS FORECAST – DATAGRO

SovEcon Raises Russia Wheat Export Estimate, Notes Vessel Risks

Russian wheat exports in the 2022-23 season are now estimated at a record 42.6m tons, up 0.3m tons from a prior estimate, consultant SovEcon says in an emailed note.

  • Shipments seen aided by a bumper crop and a likely decline in export taxes
    • Outlook also assumes Ukrainian port terminals remain shut in near-term due to the war
  • “Lack of freight could be the biggest hurdle for exports at the start of the season. Shipowners are still cautious about sending ships to the region amid the military operations and the risk of falling under sanctions. The same factor complicates payments for Russian grain”

Egypt Scoops Up Wheat Supplies with Supersized Tender-

Egypt booked the most wheat in a tender in at least a decade, taking advantage of a recent price slump to bolster stockpiles as Russia’s invasion of Ukraine disrupts global supplies.

The country’s state-run buyer bought 815,000 tons on Wednesday, the largest single purchase since at least 2012, data compiled by Bloomberg show. Other nations like Saudi Arabia and Algeria have also snapped up wheat in recent days. France was the largest supplier in Egypt’s tender, a change from before the war when sales early in the season tended to be dominated by Black Sea crops.

The purchases follow a recent slump across grain futures, as commodities were dragged down by the recessionary worries hanging over financial markets. Chicago wheat has retreated more than 30% from a record reached in the wake of Russia’s invasion of Ukraine.

Still, wheat trade has been heavily disrupted by the war and prices remain historically high, which is straining importers’ budgets. Egypt’s supply minister said it aims to cut back imports by eking out more subsidized bread from its grain.

Egypt’s tender was also unusual in that it sought wheat over a three-month span, rather than a few weeks like usual, stretching out the sales. The country ultimately booked supply for August, September and the first half of October, according to traders who asked not to be identified. Cargoes from the European Union — Romania, France and Bulgaria — accounted for the bulk at 640,000 tons, and Russia sold 175,000 tons.

Malaysia’s June 1-30 Palm Oil Exports 1,179,545 Tons: AmSpec

Shipments fell 13.4% m/m from 1,361,634 tons exported during May 1-31, according to AmSpec Agri on Thursday.

Brazil to harvest nearly 148 mln tonnes of soy next season, Reuters poll shows

Brazil could harvest nearly 148 million tonnes of soybeans in the coming season, 18.5% up on the current crop year, as farmers are expected to expand the planted area and yields should improve after dryness slashed output in the season that is now ending.

According to the findings of a Reuters poll on Wednesday, eight analysts predict the planted area in Brazil, the world’s biggest soy supplier, could grow by nearly 3% to 42.2 million hectares (104.2 million acres).

“Expectations of positive operating margins for the 2022/23 crop will lead to an increase in soy area,” said Rabobank’s Brazil analyst Marcela Marini. “This is in spite of the rise in the main farm input prices.” The new season starts in September.

Input prices have risen largely due to sanctions against Russia and Belarus, two key global fertilizer suppliers. Brazil imports about 85% of the fertilizers it uses and farmers are facing higher costs as a result.

Logistical bottlenecks amid COVID-19 restrictions in China also weigh on farmers, as these affect pesticide deliveries to countries like Brazil.

Against this backdrop, AgResource’s Brazil unit said that it remained cautions in relation to its Brazilian soy crop projections for next year.

Still, AgResource estimates 144.82 million tonnes of production, meaning Brazil alone would account for most of South American’s soy output next year, estimated at 200 million tonnes by the United States Department of Agriculture (USDA).

AgRural consultancy analyst Daniele Siqueira said that higher input prices limit the expansion of the soy area, but do not prevent it.

She said the profitability of the crop will not be as high as that of the 2021/2022 crop, but producers will continue to enjoy healthy margins.

 Indonesia Mulls Raising Biodiesel Mandate to Cut Fuel Costs

  • Indonesia plan to raise biodiesel mandate to 35%, from 30%
  • Government needs to save fuel costs on high crude prices

Indonesia, the world’s biggest palm oil producer, is considering a plan to increase its biodiesel mandate to cut fuel import costs and absorb overflowing palm oil stockpiles.

The government plans to require local diesel to contain 35% palm oil content, from the current 30% mix, said Septian Hario Seto, a deputy for mining and investment at the Coordinating Ministry for Maritime and Investment Affairs. The plan is being discussed by related ministries, biodiesel producers and automakers, he added.

The plan would be put in place as soon as all parties have agreed, as the government seeks to reduce spending on fuel subsidies. “Gasoil prices are high now, so if we add more biodiesel, we could save more state budget,” he said in an interview on Wednesday.

The tropical oil is trading at an about $80 discount to gasoil, down from a whopping premium of $651 in March and an average premium of $386 in the past year, according to data compiled by Bloomberg. Slumping vegetable oil prices have reignited interest in biofuel as it’s become cheaper than diesel.

Reviving Exports

Indonesia’s decision to raise the biodiesel mandate may cushion the slump in palm oil costs and cut the nation’s fuel subsidy budget. The price of the tropical oil has sunk about 30% from its record-high close two months ago. The government seeks to revive exports following a temporary ban in April and May, nearly halving the maximum export levy and opening a faster route for companies to get shipment permits.

Southeast Asia’s largest economy imposed the 30% biodiesel mandate, known as B30, in 2020 also to reduce its fuel import and boost palm oil demand. The government is now preparing a road test for 40% palm-biodiesel mix in gasoil at the end of July. The so-called B40 plan was delayed from 2021 due to falling fuel costs and surging palm prices at the time.

Argentina Agrees 25% Hike in Cereals, Oilseeds Transport Rate

Argentina’s Transport Ministry agreed a 25% increase in the rate of transport services for cereals, oilseeds and derived products, byproducts, according to a Ministry statement.

  • Decision was made in a meeting with transport organizations, such as the Argentine Federation of Transporters
  • With the decision, the rate has been increased 46% during the first half of 2022

Argentine trucker protest slashes grains delivery, threatening exports and milling

A truck driver protest in Argentina is threatening to paralyze the country’s grains exports, slashing the number of freight vehicles carrying grains to the country’s main port on Wednesday.

The provincial Road Safety Agency said truck owner guilds protesting high diesel prices and shortages prevented the passage of loaded trucks on different roads in the province of Santa Fe, home to port city Rosario, the gateway for around 80% of Argentine agricultural exports.

On Wednesday, 889 grain trucks arrived at Rosario terminals on the Parana River, 76% fewer than from a year ago, the Rosario Grains Exchange said. More than 80% of grains bound for export are transported by trucks in Argentina.

“As of today, we are missing more than 400,000 tonnes (of merchandise), so we are close to running out of grains,” Gustavo Idigoras, the head of the grain exporters and crushers chamber in Buenos Aires, told Reuters.

Argentina is the world’s top exporter of processed soybean oil and meal, the no. 2 exporter of corn, as well as a major global supplier of wheat and beef.

Guillermo Wade, manager of the Chamber of Port and Maritime Activities in Rosario, said the protest isn’t allowing replenishments of grains for crushing and shipping.

Over the weekend, the country’s transport minister, Alexis Guerrera, said that the diesel shortage would be sorted out within 15 to 20 days thanks to the arrival of ships carrying fuel imports.

In Argentina, farm groups call for trade halt to protest government

Argentina’s major farm groups called for a trade strike in two weeks in a bid to pressure the government to do more as frustration over crippling shortages of diesel and fertilizers weighs on the country’s key agricultural sector.

The groups announced on Wednesday that the nationwide halt to farm exports will begin on July 13 and last 24 hours, according to sector officials and a statement from the Mesa de Enlace which includes the country’s four main rural associations.

Truck driver protests across the South American country have snarled traffic as anger mounts over diesel shortages and creeping prices for the motor fuel used by the farm sector just as the crucial corn crop makes it way to major ports.

Argentina is the world’s second biggest corn exporter, the No. 1 exporter of processed soybean oil and meal, as well as a major wheat and beef supplier.

“Access to diesel and fertilizers is urgent to avoid a complete paralysis,” according a statement, which also called for fewer “damaging” state interventions, macroeconomic stability plus reduced government spending.

The government of leftist President Alberto Fernandez has recently taken some steps to boost domestic diesel supplies.

Earlier this month, the energy ministry announced higher required biodiesel content in diesel blends in a bid to address the shortage of the motor fuel.

Bulgarian Government Gives Up Plan to Buy Wheat for Reserve

Bulgaria’s government gives up plan to intervene on the grains market in a bid to build additional reserve, it says in an emailed statement.

  • The government expects “good new crop” of autumn cultures
  • Sees sufficient wheat reserve for the needs of the country

U.S. corn production up amid recovering vegetation densities from satellite imagery

2022/23 U.S. CORN PRODUCTION: 374 [361–389] MILLION TONS, UP 1% FROM LAST UPDATE

Despite continued dryness in the central/eastern Corn Belt and key producing areas of the Upper Midwest, higher-than-expected vegetation density levels and condition scores increase 2022/23 U.S. corn production by 1% to 14.7 [14.2–15.3] billion bushels. In June’s WASDE (10 June), USDA placed U.S. corn production at 367.3 million tons, below our median projection. Our current estimate puts planted area at 90.6 million acres, down 3% from last season, which is 1.1 million acres above the USDA March Prospective Plantings report figure of 89.5 million acres (31 March). A recently released Reuters Poll of Analysts (24 June) placed U.S. corn crop area at 89.9 [88.4–91.0] million acres. The next USDA survey-based estimate of acreage will be released tomorrow (30 June) in Acreage report.

Brazilian Nitrogen Prices Stay High as Planting Draws Nearer

Urea prices appear poised to remain high in Brazil, as natural gas prices surge in Europe and the supply chain prepares for demand in 2H. Potash and phosphate offer prices have stabilized, waiting for demand signals from farmers who plan to plant soybeans.

Supply Hurdles, Looming Demand Drive Prices: Wednesday Whisper

Urea prices appear to be under more upward pressure ahead of Friday’s final assessments in Brazil. Expectations are rising for demand from farmers in July ahead of planting corn, coffee and sugarcane crops in 2H. Sustained natural gas supply constraints in Europe are raising global costs and driving expectations for more increases in nitrogen. Some offers have risen $30-$50 a metric ton this week. Meanwhile, phosphate and potash prices, traded for soybean planting that starts in September, look to be stabilizing. Discounts seem increasingly likely to materialize next week, as suppliers seek to release stagnant volumes grounded at ports.

Corteva and BASF Collaborating on Push to Make New Soybean Trait

Corteva, BASF and MS Technologies sign agreement to collaborate on a new nematode resistant soybean trait for US and Canadian farmers.

  • Companies expect new trait to be brought to market in late 2020s, pending regulatory reviews and field testing: statement
  • Trait would be the first commercially available biotechnology trait developed to control nematodes: Linda Trolinder, senior vice president of BASF Seeds and Traits R&D, in statement

US Renewable-Fuel Credits Demonstrating Pricing Divergence

US renewable-fuel producers are contending with a divergence in price trends for two key incentive programs — the federal renewable identification number (RIN) program and California’s low carbon fuel standard. Corn-ethanol RIN credits continue to rise this year, yet LCFS credits are declining amid a surge of renewable-diesel supply into the state.

Corn-Ethanol RIN Credit Prices Still Higher

Renewable Identification Number (RIN) credit prices provide crucial incentive support for US biofuels suppliers, as well as a tool to drive obligated parties such as fuel refiners or importers to use lower-carbon fuel options. Changes in credit prices are crucial dynamics for the growth of the biofuel sector. Corn ethanol RIN credits have risen in 2022 and are up 28% year-to-date to the week ended June 24, climbing to $1.4 per 2022 credit. Biomass-based diesel (D4) RIN credits rose 18% YTD to $1.5.

Nutrien Agrees to Buy Retail Chain, Fertilizer Plant in Brazil

Nutrien Ltd. agrees to acquire Marca Agro Mercantil, an agriculture inputs retail chain with operations in 67 municipalities in Brazil’s Minas Gerais state.

  • “Marca Agro Mercantil provides us an important presence in Triangulo Mineiro, one of the main agricultural regions in a state where we already have operations, bringing synergies to our business,” Andre Dias, Nutrien’s president of Latin America, says Wednesday in emailed statement
    • Company has access to around 1,700 clients
    • Deal includes 26 commercial units and a fertilizer mixer plant in Minas Gerais
  • Terms weren’t disclosed
  • Acquisition is pending approval from Brazil’s antitrust regulator

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