Global Ag News For June 7.22

HEADLINES TODAY

Wheat prices overnight are down 9 3/4 in SRW, down 11 in HRW, down 3 in HRS; Corn is down 6 1/2; Soybeans down 1 1/2; Soymeal down $0.10; Soyoil up 0.09.

For the week so far wheat prices are up 45 3/4 in SRW, up 41 1/4 in HRW, up 37 1/4 in HRS; Corn is up 9 1/4; Soybeans up 5 1/4; Soymeal down $0.01; Soyoil up 0.63. For the month to date wheat prices are down 4 1/4 in SRW, down 6 1/2 in HRW, down 20 in HRS; Corn is down 17 1/2; Soybeans up 22 1/2; Soymeal down $10.70; Soyoil up 2.90.

Year-To-Date nearby futures are up 41% in SRW, up 45% in HRW, up 25% in HRS; Corn is up 24%; Soybeans up 28%; Soymeal down -2%; Soyoil up 45%.

Chinese Ag futures (SEP 22) Soybeans down 34 yuan; Soymeal down 37; Soyoil up 44; Palm oil up 36; Corn down 7 — Malaysian Palm is up 38. Malaysian palm oil prices overnight were up 38 ringgit (+0.59%) at 6491.

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 6 were: SRW Wheat up 1,319 contracts, HRW Wheat down 1,294, Corn up 1,114, Soybeans up 2,446, Soymeal up 1,874, Soyoil up 8,848.

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

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

Western Midwest Forecast: Scattered showers through Friday. Temperatures near to below normal through Friday.

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

Canadian Prairies Forecast:  Scattered showers southwest through Wednesday. Temperatures near to below normal through Wednesday. Isolated showers Thursday-Friday. Temperatures near to above normal Thursday-Friday. Outlook: Isolated to scattered showers Saturday-Wednesday. Temperatures near to above normal Saturday-Monday, near to below normal Tuesday-Wednesday.

Brazil Grains & Oilseeds Forecast: Rio Grande do Sul and Parana: Scattered showers Tuesday. Mostly dry Wednesday-Friday. Temperatures near to above normal through Thursday, near to below normal Friday. Mato Grosso, MGDS and southern Goias: Mostly dry Tuesday. Isolated to scattered showers south Wednesday-Friday. Temperatures near to above normal through Friday.

Argentina Grains & Oilseeds Forecast: Cordoba, Santa Fe, Northern Buenos Aires: Mostly dry through Friday. Temperatures near to below normal through Thursday, below to well below normal Friday. La Pampa, Southern Buenos Aires: Mostly dry through Friday. Temperatures near to below normal through Thursday, below to well below normal Friday.

The player sheet for 6/6 had funds: net buyers of 18,500 contracts of  SRW wheat, buyers of 13,000 corn, buyers of 500 soybeans, sellers of 1,000 soymeal, and  sellers of 2,000 soyoil.

TENDERS

  • VEGETABLE OIL TENDER: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), said on Sunday it was seeking vegetable oils in an international purchasing tender for arrival August 5-25. The deadline for offers is June 8.
  • WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy a total of 169,250 tonnes of food-quality wheat from the United States, Canada and Australia in regular tenders that will close on Thursday.
  • BARLEY TENDER: Jordan’s state grains buyer has issued a new international tender to purchase 120,000 tonnes of animal feed barley, European traders said on Monday.

PENDING TENDERS

  • 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.

US Inspected 1.435m Tons of Corn for Export, 350k of Soybean

Zelenskiy says 75 mln tonnes of grain could be stuck in Ukraine by autumn

Ukrainian President Volodymyr Zelenskiy said on Monday there could be as much as 75 million tonnes of grain stuck in Ukraine by this autumn and that Kyiv wanted anti-ship weapons that could secure the safe passage of its exports.

Ukraine, Zelenskiy told a briefing in Kyiv, has been discussing with Britain and Turkey the idea of a third country’s navy guaranteeing the passage of Ukrainian grain exports through the Russia-dominated Black Sea.

The strongest guarantee of their safe passage though would be Ukrainian weaponry, he told reporters.

Blinken says reports Russia is ‘pilfering’ Ukrainian grain for profit are credible

U.S. Secretary of State Antony Blinken said on Monday there are “credible reports” that Russia is “pilfering” Ukraine’s grain exports to sell for profit.

Speaking during a virtual roundtable with philanthropies, non-governmental organizations and private sector entities, Blinken said the alleged theft was part of broader Russian actions during its war in Ukraine that have hit Ukraine’s ability to export its wheat crop and worsened a global food security crisis.

“There are credible reports, as we saw in one of our leading newspapers today, that Russia is pilfering Ukraine’s grain exports… to sell for its own profit,” Blinken said, an apparent reference to a New York Times story that said Washington last month warned 14 countries, mostly in Africa, that Russia was trying to ship stolen Ukrainian grain to buyers overseas.

Ukraine has accused Russia of shipping Ukrainian grain to countries including Turkey and Syria.

Kazakhstan hopes to harvest 13 mln tonnes of wheat this year

Kazakhstan expects to harvest between 13.0 million and 13.5 million tonnes of wheat this year, Agriculture Minister Yerbol Karashukeyev said on Tuesday.

In total, the Central Asian nation plans to harvest 18 million to 19 million tonnes of grains, he told a government meeting.

EU Raises 2022 Soft-Wheat Crop Outlook, Cuts Corn and Barley

The EU’s soft-wheat production is now seen at 130.4m tons, versus a previous estimate for 130.1m tons, according to a European Commission report posted late last week.

  • Export outlook lowered to 38m tons, from 40m tons
    • Change is based on expectations for Ukraine’s harvest and exports
  • Barley crop estimate cut to 52.3m tons, from 53.5m tons
  • Corn crop estimate cut to 72.5m tons, from 73.4m tons
  • Rapeseed crop estimate cut to 18.1m tons, from 18.3m tons

Brazil C-S Winter Corn Harvest at 3% as of June 2: AgRural

Compares with 1.2% a week earlier and 0.2% a year before, according to an emailed report from consultancy firm AgRural.

  • Works would be at a more advanced stage if not for excessive moisture in grains in Mato Grosso and Parana
  • AgRural to release new output estimate in 1st half of June

Bumper Wheat Crop Looming in Australia Set to Ease Tight Market

  • Wheat output likely to be more than 20% above 10-year average
  • High prices and good growing conditions spur farmers to plant

Australia, one of the world’s largest wheat exporters, is forecast to produce another huge harvest this season as favorable conditions encourage growers to ramp up planting of winter crops to near-record levels.

Wheat production is estimated at 30.3 million tons in 2022-23, or 22% above the 10-year average, according to government forecaster Abares. That would be the fourth largest on record and compares with an all-time high of 36.3 million tons in 2021-22, which Abares estimated in March. The canola crop is seen at 5.6 million tons, the second largest after 6.4 million tons the previous year.

High prices and supportive seasonal conditions are prompting more sowing of wheat and canola, with planted area for wheat rising 1% and for canola expanding 12% to a record, Abares said. The increase comes at the expense of barley in most states, and chickpeas in Queensland and North South Wales.

The outlook is more downbeat than some other forecasts, with Rabobank estimating wheat and canola crops at 32.5 million and 5.8 million tons — figures it said were “conservative” because it was so early in the season.

Still, the prospect of more supply from Australia will be welcome news for global importers, after wheat prices hit a record following Russia’s invasion of Ukraine. The conflict has slashed exports of wheat and corn from the Black Sea — an area which normally accounts for over 25% of global wheat shipments — and driven up costs for vital farming inputs, such as fertilizer and diesel.

Adverse weather has hit production in other major growing regions, and global wheat stockpiles are forecast to drop to a six-year low in the coming season, the US Department of Agriculture said last month.

Ukraine’s River Ports Become Main Source of Agriculture Exports

Ukraine exported 798,800 tons of agricultural commodities via its river ports in May, the Cabinet said on its website, citing Agriculture Ministry data.

  • 75% of overall wheat shipments, 50% of soybeans, 57% of barley and 59% of sunflowers were exported via river ports
  • Ukraine exported 709,600 tons of agricultural commodities including grains and oilseeds via railway the same month
  • 53% of corn was exported via railway
  • NOTE: Ukraine boosted its exports of agricultural commodities including grains, oilseeds and refined products to more than 1.7m tons in May, up 80% from the previous month

China Harvests Half of Wheat Crop With Favorable Weather Ahead

  • Nation gathered 55% of winter wheat as of Monday: ministry
  • Domestic grain crop is government focus amid global food woes

China’s farmers are making progress on government orders to bolster food security by ensuring this season’s wheat harvest goes smoothly.

The country gathered 55% of its winter wheat crop as of June 6, passing the 50% mark two days earlier than last year, the Ministry of Agriculture and Rural Affairs said in a statement late Monday.

Premier Li Keqiang last month stressed the importance of reaping crops, telling a pre-harvest work meeting that local authorities will be held accountable for obstacles amid fears activity could be disrupted by Covid mobility curbs.

See also: China Goes All Out to Harvest Wheat to Blunt Inflation Threat

The agriculture ministry said wheat harvests in Sichuan and Hubei provinces are almost done, and are nearly 80% complete in Henan. In northern provinces including Shaanxi and Shandong, activity is nearing its peak. Weather in the north will be favorable for crop filling, reaping and drying, China’s National Meteorological Center said Monday.

Food security — including domestic production — has become a major focus for Beijing as global shortages push up prices for agricultural commodities and fuel inflation. Russia’s invasion of Ukraine and bouts of extreme weather have ruptured crop supplies and spurred a wave of food protectionism.

While the major uncertainty in global wheat supply is how much grain will eventually be shipped from Ukraine, a decent harvest in China will at least alleviate another risk. Wheat prices have swung since hitting a record in March, with Chicago futures rebounding Monday from their worst week in two months.

India’s May palm oil imports surge to 7-month high despite Indonesia ban: Report

India’s palm oil exports in May were its highest in seven months and up 15% on April as the country overcame curbs on Indonesian exports by sourcing more of the commodity from Malaysia, Thailand and Papua New Guinea, five industry officials said.

Higher purchases by India, the world’s biggest importer of vegetable oil, could support Malaysian palm oil prices, which are trading near a record high.

India imported 660,000 tonnes of palm oil in May, up from 572,508 tonnes in April, according to the average estimate from five dealers.

Indian imports from Indonesia fell in May, but refiners managed to buy more from Malaysia, Thailand and Papua New Guinea, said Sandeep Bajoria, chief executive of Sunvin Group, a vegetable oil brokerage and consultancy.

Indonesia, the world’s biggest producer and exporter of palm oil, on April 28 halted exports of the product to control soaring prices at home. Jakarta allowed exports to resume from May 23 but put in place policies to safeguard domestic supplies.

The Solvent Extractors’ Association of India, a trade body based in Mumbai, is likely to publish May’s import figure in mid-June.

India’s soyoil imports in May rose to 352,614 tonnes from 315,853 tonnes in April, said a senior government official, who declined to be named.

The country’s soyoil imports could rise sharply in coming months, because New Delhi has allowed duty free imports of 2 million tonnes of the commodity, said a Mumbai-based dealer with a global trading firm.

Sunflower oil imports jumped to 123,970 tonnes in May from 67,788 tonnes a month earlier, the government official said.

India buys soyoil mainly from Argentina and Brazil and sunflower oil from Ukraine and Russia.

Fertilizer Prices Weaken as US Planting Wraps and Market Resets

US urea, phosphate and potash prices face extended downward pressure as spring planting winds down after a delayed start due to inclement weather. The season’s late start shortened the application window for ammonia and pressured dry fertilizer volume. Ammonia fill offers could come out below $1,000 per short ton.

Cornbelt Ammonia to Drop as Season Trails Off: Weekly Wrap

Urea’s relative value portends a steep drop in ammonia prices in the traditional summer reset. Prompt anhydrous Corn Belt offers at $1,355 per short ton (st) have held steady despite urea’s 36% drop from its March peak of $935/st. On a nutrient basis, ammonia is trading at a record premium to urea. Should the products return to an average spread, ammonia would trade at $950/st in the Corn Belt, down $400/st from prompt. A wet, cold spring delayed planting and pushed farmers to other nitrogen products like urea and urea-ammonium-nitrate.

CF Industries, Mosaic and Nutrien are the largest publicly traded North American ammonia producers. The ammonia summer fill price normally reflects the lowest price for the fertilizer (July-June) year.

WHEAT/CEPEA: Russian exports drop values in the USA; in BR, prices rise, influenced by scenario in AR

The possible unblock of Ukraine ports by Russia and the consequent grains exports through the Black Sea are putting a lot of pressure on international wheat prices. On Friday, 3, devaluations became steeper, due to expectations for higher exports from Russia in the 2022/23 season – the Russian consultancy SovEcon estimates national exports at 42.3 million tons between July/22 and June/23, 1.3 million tons more than that previously estimated.

Thus, in the United State, the July/22 contract for the Soft Red Winter wheat traded at CME Group (Chicago) dropped by a steep 10.2% between May 27 and June 3, closing at USD 10.4000/bushel (USD 382.13/ton) on June 3. At the Kansas Stock Exchange, the July/22 contract for the Hard Winter wheat decreased by 9.2% in the same period, to USD 11.2100/bushel (USD 411.90/t).

Still, in Argentina, between May 27 and June 3, FOB prices at the port of Buenos Aires rose by 1.5%, to USD 482.00/ton on June 3. On May 31, wheat prices hit USD 487.00/ton in Argentina, the highest level since 2009, when Cepea began to compile these data.

In Argentina, Bolsa de Cereales estimates the national wheat area to shrink by 100 thousand hectares, due to the current low moisture. Thus, the wheat area would total 6.5 million hectares. As for the 2022/23 crop, 13.9% have been sown.

Despite the price drops in the United States, prices in Brazil followed the trend in Argentina. Cepea surveys show that, between May 27 and June 3, the prices paid to wheat farmers rose by 1.24% in Paraná and by 0.06% in Santa Catarina, but dropped by 0.92% in Rio Grande do Sul. In the wholesale market (deals between processors), values increased by 1.7% in Rio Grande do Sul, 1.29% in Paraná, 0.65% in Santa Catarina and 0.51% in São Paulo. The US dollar rose by 0.97%, to BRL 4.784 on June 3. Liquidity was low last week because of the current low supply and high prices.

Based on data from Conab (Brazil’s National Company for Food Supply), between May 23 and 27, the import parity price for the wheat from Argentina delivered to Paraná State was USD 473.76/ton. Considering the average of the US dollar in that period, at BRL 4.7962, the wheat imported was sold at BRL 2,272.22/ton, while for the Brazilian wheat traded in Paraná, the average was at BRL 2,121.06/ton, according to data from Cepea. In Rio Grande do Sul, the import parity for the product from Argentina would be of USD 445.12/ton (BRL 2,134.86/ton), against BRL 2,093.63/ton on the average of the state surveyed by Cepea.

CROPS – In Brazil, by May 28, 29.5% of the national wheat crop had been sown, according to Conab. Activities have ended in Goiás, Minas Gerais, Bahia and Mato Grosso do Sul. In São Paulo, 68% have been sown; in Paraná, 53%; in Santa Catarina, 0.3%; and in Rio Grande do Sul, 0.2%.

Kazakhstan to Extend Grain Export Quotas to Sept. 1: IFX

Kazakhstan plans to extend grain and flour export quotas until September 1, Agriculture Minister Yerbol Karashukeev says, according to Interfax.

  • NOTE: April 4, Kazakhstan decided to limit wheat exports to 1m tons for April 15-June 15
  • Kazakh Agriculture Ministry expects wheat harvest in 2022 at 13.5m tons, 15% higher than last year

Ethanol Makers in India Rally as Gasoline-Blending Aim Achieved

Stocks of Indian ethanol-producers, which is mostly comprised of sugar mills, rally after the nation achieved its initial aim of blending gasoline with 10% ethanol, and will push ahead with its goal of doubling the blend over the next three years.

  • Shree Renuka surges as much as 7%, most since June 1
  • Bajaj Hindusthan +5%, EID Parry +4.2%, Dhampur Sugar +5.2%, Balrampur Chini +3.1%

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