Global Ag News for May 16.22
TODAY – CROP SURVEY: U.S. April Soybean Crush Seen at 173.4M Bushels
Wheat prices overnight are up 50 1/4 in SRW, up 47 1/4 in HRW, up 42 in HRS; Corn is up 15 3/4; Soybeans up 12; Soymeal up $0.38; Soyoil up 0.36.
Markets finished last week with wheat prices up 135 in SRW, up 165 in HRW, up 160 1/4 in HRS; Corn is up 25; Soybeans up 73 1/4; Soymeal up $1.03; Soyoil up 4.41.
For the month to date wheat prices are up 172 in SRW, up 223 1/2 in HRW, up 201 in HRS; Corn is down 16 1/2; Soybeans down 26 1/4; Soymeal down $19.20; Soyoil down 0.03.
Year-To-Date nearby futures are up 59% in SRW, up 66% in HRW, up 39% in HRS; Corn is up 34%; Soybeans up 25%; Soymeal up 0%; Soyoil up 49%.
Chinese Ag futures (SEP 22) Soybeans up 26 yuan; Soymeal up 89; Soyoil up 130; Palm oil up 24; Corn up 2
Malaysian markets are closed for holiday.
There were changes in registrations (-11 SRW Wheat, 60 Corn, -20 Soymeal). Registration total: 1,036 SRW Wheat contracts; 25 Oats; 60 Corn; 0 Soybeans; 98 Soyoil; 30 Soymeal; 151 HRW Wheat.
Preliminary changes in futures Open Interest as of May 13 were: SRW Wheat up 2,124 contracts, HRW Wheat up 311, Corn up 11,616, Soybeans up 4,130, Soymeal down 615, Soyoil up 2,056.
Northern Plains Forecast: A disturbance will move through the region with isolated to scattered showers early in the week, but a stronger system will move through with more widespread and heavier showers Thursday and Friday, potentially being cold enough for accumulating snow in some areas. Well below normal temperatures will then be in place going into next week.
Central/Southern Plains Forecast: Periods of isolated to scattered showers through Friday. Temperatures above to well above normal through Thursday, below normal northwest and above normal southeast Friday. 6-to-10-day outlook: Mostly dry Saturday. Isolated showers Sunday-Wednesday. Temperatures near to below normal Saturday-Tuesday, near to above normal Wednesday
Western Midwest Forecast: Mostly dry Monday. Isolated to scattered showers Tuesday-Friday. Temperatures near to above normal through Wednesday, above normal Thursday, below normal northwest and above normal southeast Friday.
Eastern Midwest Forecast: Scattered showers leaving east Monday. Mostly dry Tuesday. Isolated to scattered showers Wednesday-Friday. Temperatures near to above normal through Wednesday, above normal Thursday-Friday. 6-to-10-day outlook: Mostly dry Saturday. Isolated to scattered showers Sunday-Wednesday. Temperatures below normal west and above normal east Saturday, near to below normal Sunday-Wednesday.
Canadian Prairies Forecast: Isolated showers Monday-Wednesday. Temperatures near to above normal west and near to below normal east Monday-Tuesday, near to below normal Wednesday. Scattered showers Thursday-Friday. Some snow in Manitoba. Temperatures below to well below normal Thursday-Friday. 6-10 Day Outlook: Mostly dry Saturday-Sunday. Isolated showers Monday-Wednesday. Temperatures below to well below normal Saturday-Sunday, near to below normal Monday-Wednesday.
Brazil Grains & Oilseeds Forecast: Rio Grande do Sul and Parana: Mostly dry Monday. Isolated showers Tuesday-Thursday. Mostly dry Friday. Temperatures below to well below normal through Friday. Mato Grosso, MGDS and southern Goias: Isolated showers north Monday-Tuesday. Mostly dry Tuesday-Friday. Temperatures near to below normal south and above normal north Monday, below to well below normal south and near to above normal north Tuesday, below to well below normal Wednesday-Friday.
Argentina Grains & Oilseeds Forecast: Cordoba, Santa Fe, Northern Buenos Aires: Isolated showers east Monday. Mostly dry Tuesday-Friday. Temperatures below normal through Friday. La Pampa, Southern Buenos Aires: Isolated showers east Monday. Mostly dry Tuesday-Friday. Temperatures below normal through Friday.
The player sheet for 5/13 had funds: net sellers of 1,000 contracts of SRW wheat, sellers of 8,000 corn, sellers of 12,000 soybeans, buyers of 7,500 soymeal, and buyers of 3,500 soyoil.
- WHEAT SALE: 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 Friday
- CORN SALE: The U.S. Department of Agriculture confirmed private sales of 132,000 tonnes of U.S. soybeans to China for shipment in the 2021/22 marketing year.
- RICE TENDER: South Korea’s Agro-Fisheries & Food Trade Corp has issued an international tender to purchase an estimated 136,000 tonnes of rice
- WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy a total of 196,560 tonnes of food-quality wheat from the United States, Canada and Australia in regular tenders that will close on May 12.
- BARLEY TENDER: Jordan’s state grains buyer has issued a new international tender to purchase 120,000 tonnes of animal feed barley
- FEED WHEAT, BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said that it will seek 70,000 tonnes of feed wheat and 40,000 tonnes of feed barley to be loaded by Aug. 31 and arrive in Japan by Oct. 27, via a simultaneous buy and sell (SBS) auction that will be held on May 18.
- CORN TENDER: Taiwan’s MFIG purchasing group has issued an international tender to buy up to 65,000 tonnes of animal feed corn which can be sourced from the United States, Brazil, Argentina or South Africa
- RICE TENDER: Egypt’s state grains buyer the General Authority for Supply Commodities (GASC) is seeking at least 25,000 tonnes of white rice in a tender-practice on the account of the Holding Company for Food Industries. GASC set the arrival date for July 1-31 and Aug. 1-31. Offers should be submitted on May 19.
- WHEAT TENDER: Bangladesh’s state grains buyer has issued an international tender to purchase 50,000 tonnes of milling wheat
Egypt agrees to buy half a mln tonnes of Indian wheat -supply minister
Egypt’s government has agreed to buy half a million tonnes of wheat from India, Egyptian Supply Minister Aly Moselhy said on Sunday.
An Indian ban on wheat exports, announced by New Delhi on Saturday amid a scorching heat wave that has curtailed domestic production and driven up domestic prices, does not apply to deals reached between governments, Moselhy said earlier.
Brazil 2022 Soy Exports Est. Cut to 74.5m MT in 2022: Safras
Compares with prior estimate of 78m metric tons, and exports of 86.1m metric tons in 2021, according to a report from consultancy firm Safras & Mercado.
- Soy crushing seen at 47.9m mt in 2022, prior est. 47.5m mt
Heat Waves to Continue in Some Parts of India: Weather Office
Some isolated pockets of India’s Punjab, Haryana, Rajasthan and Uttar Pradesh states will continue to face heat waves on Monday, according to the India Meteorological Department.
- Heat waves are also seen in some parts of Maharashtra and Madhya Pradesh for two days through Tuesday, before abating
- Maximum temperatures are likely to fall by 2 to 4 degrees Celsius in many parts of northwestern and central India during next 2 days
- NOTE: The weather office defines a heat wave when maximum temperatures reach or exceed 45 degrees Celsius (113 degrees Fahrenheit)
- India recorded maximum temperature of 49 degrees Celsius at Banda in Uttar Pradesh on Sunday
- NOTE: Heat waves could hamper wheat harvesting in northern states
- The southwest monsoon is expected to reach Nicobar islands on Monday
- Rains seen in West Bengal, Odisha, Uttarakhand, Maharashtra and Karnataka for five days from Monday
- NOTE: Rain will spur sowing of summer-sown rice, oilseeds and pulses
India’s Monsoon Rains Seen Arriving Early, to Boost Crop Sowing
- Monsoon expected to be normal for fourth year running
- Annual rains are key for the farm sector, food prices
India’s annual monsoon, which waters more than half of the country’s fields, is seen hitting the mainland earlier this year, helping sowing of key crops like rice, corn and soybeans.
The southwest monsoon is likely to arrive in the southern state of Kerala on May 27, according to the India Meteorological Department. The June-September rainy season typically starts on June 1. The forecast has a margin of error of four days.
Timely monsoon rains are critical for India’s farm output and economic growth at a time when the country is battling soaring food prices. The war in Ukraine has further pushed up world food costs to a record. India’s farm sector is the main source of livelihood for about 60% of its population and accounts for 18% of the economy.
The monsoon is likely to be normal for a fourth year. The meteorological department forecast in April that annual rainfall during the four-month season would be 99% of the long-term average of 87 centimeters.
Last year’s monsoon rains were 99% of the long-term average, according to the weather department. It was 9% higher than normal in 2020 and 10% more than the average in 2019. Rains helped to boost India’s food grain production to a record in 2021-22.
Showers during the rainy season not only water fields directly, but fill reservoirs that help irrigate winter-sown crops. A good monsoon boosts crop output, while poor rains lead to drinking water shortages, lower harvests and higher imports of some commodities. India is the second-biggest grower of wheat, rice, sugar and cotton, and the largest buyer of palm, soybean and sunflower oils.
Palm Oil Imports by Top Buyer India Hit Six-Month High in April
Purchases increased 6% from a month earlier to 572,508 tons in April, according to the Solvent Extractors’ Association of India.
- NOTE: The country imported 701,795 tons in April 2021
- Soybean oil imports dropped to 273,151 tons from 299,421 tons in March
- Total vegetable oil imports, including non-edible oil, dropped to 911,846 tons from 1.1m tons
- Edible oil stockpiles at ports and in the pipeline were 2.24m tons on May 1, up from 1.89m tons at the start of April
- India’s sunflower oil purchases sank to 54,426 tons in April from 212,484 tons a month earlier
- No shipments from Ukraine since March 27
- High prices of sunflower oil, lower global availability and strong local prices have reduced consumption in India
- This shortfall is partially being replaced by other edible oils, such as palm olein, soybean oil, groundnut oil and rice bran oil
- NOTE: India Demand May Shift to Domestic Edible Oils as Palm Oil Soars
- NOTE: India May Buy 65,000 Tons of Sunoil a Month From Russia: Bajoria
- It is expected that Indonesia may lift its export ban on edible oils before the end of May. However, the situation will turn ugly if Indonesia continues with the restriction as adequate supplies from other origins are not available
Malaysia May 1-15 Palm Oil Exports +20.55% M/m: Intertek
SOYBEAN/CEPEA: Dollar appreciation raises soybean prices in BR; liquidity increases too
The dollar appreciation against the Real attracted importers to Brazil, resulting in increases in export premiums, soybean valuations in the domestic market and higher liquidity. On the other hand, the stronger dollar makes the soybean from the United States less attractive to international purchasers, which pressed down future contracts at CME Group in the last days. The futures were also influenced by expectations for a higher world output in the coming season.
Between May 5 and 12, the American currency rose by 2.3%, to BRL 5.146 on Thursday, 12. In the same period, the CEPEA/ESALQ Index Paraná rose by 1.2%, closing at BRL 190.72 (USD 37.06) per 60-kilo bag on Thursday, 12. The ESALQ/BM&FBovespa – Paranaguá (PR) increased by 0.6% to BRL 194.58 (USD 37.81) per 60-kilo bag on Thursday, 12. On the average of the regions surveyed by Cepea, prices rose by 0.2% in both the over-the-counter market (paid to farmers) and the wholesale market (deals between processors).
ESTIMATES – Agents have been focused on the 2022/23 season in the Northern Hemisphere. According to the USDA, the world area allocated to soybean crops is estimated at 134.93 million hectares, 3.65% larger than that in the previous season and also a record area. The output is also expected to set a record, forecast at 394.69 million tons, 13% higher than that last season. World trades are predicted to increase by 9.3%, to 170.01 million tons, and soybean processing, by 4.2%, estimated at 326.76 million tons, both records.
In Brazil, the area allocated to soybean crops is estimated by the USDA to total 42 million hectares, also a record. The output is forecast at 149 million tons, 19.2% higher than that estimated for the 2021/22 season (125 million tons). Soybean processing between Oct/22 and Sept/23 is forecast to total 48.75 million tons, 2.63% higher than the 47.5 million tons estimated for the 2021/22 season.
The Brazilian consumption of soybean is expected to grow by 2.67%, from 50.74 million tons in the 2021/22 season to 52.1 million tons in 2022/23. Exports are expected to increase by 6.95% in the 2022/23 season, from 82.75 million tons in the current season to 88.5 million tons in the coming crop. Still, stocks are forecast at 30.51 million tons in the 2022/23 season, a staggering 42.84% up from the 21.35 million tons estimated for the current season.
Fertilizer Application Accelerates, But Delays Pressure Prices
US urea, phosphate and potash prices remain pressured due to the delayed spring season, which finally took off with improved weather allowing the start of heavy application. The late start may shorten the application window for ammonia. Corn Belt urea ammonium nitrate is at a record premium to urea as US farmers make 2Q application decisions.
Urea, Phosphate Prices Continue Retreat in Friday Findings
The global urea market stayed under pressure with the announcement of lower-priced offers in India’s latest tender. The lowest tender offers were reported at $716-$721 a metric ton (mt), down $29 from the high confirmed in the previous tender. The news pushed down Middle East urea values, while New Orleans (NOLA) barge prices dipped to $630-$645 a short ton (st) vs. the previous week’s $620-$670.
Favorable weather finally allowed a flurry of spring application across the US Midwest, but the slow start continued to weigh on phosphate and potash prices. NOLA and inland phosphate prices fell during the week, while NOLA potash prices dipped to $720-$810/st, vs. the prior week’s $775-$815. Corn Belt potash prices lost at least $10/st off the top end. Planting delays also sent Corn Belt ammonia prices lower.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.