Global Ag News for May 2.22

TODAY – China and Malaysia markets were closed for holiday

Wheat prices overnight are down 5 3/4 in SRW, down 8 3/4 in HRW, down 3/4 in HRS; Corn is down 9; Soybeans down 17 3/4; Soymeal down $0.56; Soyoil down 1.20.

Year-To-Date nearby futures are up 34% in SRW, up 35% in HRW, up 18% in HRS; Corn is up 37%; Soybeans up 27%; Soymeal up 7%; Soyoil up 52%.

Markets finished last week with wheat prices down 22 1/2 in SRW, down 56 in HRW, down 12 1/4 in HRS; Corn is up 6 1/2; Soybeans down 8 1/4; Soymeal down $1.89; Soyoil up 2.90.

There were changes in registrations (37 Oats). Registration total: 2,185 SRW Wheat contracts; 38 Oats; 0 Corn; 0 Soybeans; 98 Soyoil; 0 Soymeal; 154 HRW Wheat.

Preliminary changes in futures Open Interest as of April 29 were: SRW Wheat up 932 contracts, HRW Wheat down 782, Corn up 1,211, Soybeans down 3,057, Soymeal down 4,640, Soyoil down 7,971.

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

Central/Southern Plains Forecast: Isolated to scattered showers through Thursday. Mostly dry Friday. Temperatures below normal north and above normal south though Wednesday, near to below normal Thursday, near normal Friday. 6-to-10-day outlook: Mostly dry Saturday. Isolated showers Sunday-Wednesday. Temperatures above normal Saturday-Sunday, near to above normal Monday, below normal northwest and above normal southeast Tuesday, near to below normal Wednesday.

Western Midwest Forecast: Scattered showers south Monday. Mostly dry Tuesday. Scattered showers Wednesday-Friday, mostly south. Temperatures near to below normal through Friday.

Eastern Midwest Forecast: Mostly dry Monday. Scattered showers Tuesday. Temperatures near to below normal northwest and above normal southeast Monday-Tuesday, near to below normal Wednesday-Friday. 6-to-10-day outlook: Mostly dry Wednesday. Isolated to scattered showers Thursday-Sunday. Temperatures near to below normal Saturday, near to above normal Sunday, above normal Monday-Wednesday.

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

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

The player sheet for 4/29 had funds: net sellers of 9,000 contracts of  SRW wheat, buyers of 1,500 corn, sellers of 1,500 soybeans, buyers of 1,000 soymeal, and  sellers of 3,500 soyoil.

TENDERS

  • WHEAT SALE: Turkey’s state grain board TMO has bought about 270,000 tonnes of wheat in an international import tender that closed on Friday
  • WHEAT SALE: Turkey’s state grain board TMO on Friday provisionally purchased an estimated 210,000 tonnes of wheat in a tender seeking supplies already in warehouses in Turkey

PENDING TENDERS

  • WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of milling wheat
  • FEED BARLEY TENDER: Jordan’s state grains buyer has issued a new international tender to purchase 120,000 tonnes of animal feed barley

Malaysia’s April 1-30 Palm Oil Exports 1,112,578 Tons: Amspec

Shipments fall 13.9% m/m from 1,291,852 tons exported during March 1-31, according to AmSpec Agri on Saturday.

Edible Oil Reserves in India ‘Comfortable’ Despite Indonesia Ban

Edible oil stockpiles in top importer India are “comfortable” despite Indonesia’s export ban as the South Asian nation has sufficient reserves to meet demand during a lean period.

The world’s second-most populous nation, which relies on imports for 60% of its cooking oil needs, has an inventory of 2.1 million tons, while another 1.2 million tons will arrive in May, the food ministry said in a statement on Sunday. Local consumption generally drops in the summer months of May and June as demand for fried food declines.

There are concerns that Indonesia’s palm oil export ban, one of the most drastic cases of food protectionism since the war erupted in Ukraine, could hurt the availability of edible oils in India, further increase prices and add to inflation that surged more than anticipated to near 7% in March.

The surprise move by Indonesia, the world’s biggest producer of palm oil, adds to the impact of Russia’s invasion of Ukraine, which plunged the global edible oil market into disarray. The two Black Sea nations ship about 80% of sunflower oil cargoes. With food costs surging to all-time highs, governments are taking steps to secure their own supplies as global prices of palm and soybean oils recently hit record highs on supply jitters.

The Indian government is keeping a close watch on vegetable oil prices so that it could take “appropriate measures” to keep prices stable, the statement said. It is holding regular talks with major industry associations to discuss the possibility of further reductions in local edible oil prices, it said, adding that special teams have been conducting surprise checks to prevent hoarding.

Palm oil accounts for about 62% of India’s edible oils imports, bought mostly from Indonesia and Malaysia. The share of soybean oil, which mainly comes from Argentina and Brazil, is about 22%, while sunflower oil, imported from Ukraine and Russia, is around 15%.

Sizzling Heat Seen Abating in Parts of India: Weather Office

Maximum temperatures are expected to fall by 3 degrees to 4 degrees Celsius in northwest India in the next 24 hours and no significant change expected thereafter, according to the India Meteorological Department.

  • Maximum temperatures will likely fall by 2 degrees to 3 degrees Celsius in central parts after 24 hours, and in the eastern region, Gujarat and Maharashtra during next two days
  • Temperature climbed to 47.1 degrees Celsius at Bikaner in Rajasthan on May 1, the highest for the country on Sunday

Higher-Ethanol Gasoline Gets U.S. Waiver for More Summer Sales

The U.S. Environmental Protection Agency on Friday issued an emergency waiver that will allow wider sales of E15 this summer, fulfilling a plan President Joe Biden earlier this month cast as a way to ease gasoline prices.

  • The waiver temporarily exempts E15 gasoline containing 15% ethanol from fuel volatility restrictions that effectively block sales of the fuel blend from June 1 to Sept. 15 throughout much of the country
    • Analysts say shift could allow motorists buying E15 at the roughly 2,300 stations offering it to get a 5% to 10% discount
  • Temporary move is in the public interest and needed “to address extreme and unusual fuel supply circumstances caused by the war in Ukraine,” EPA says in its waiver
    • Absent the switch, EPA says, summertime use of E10 would increase as retailers stop selling E15, boosting demand for petroleum-based gasoline “at the very time that the agency has identified a fuel supply issue due to the war in Ukraine”
  • NOTE: Conventional E10 gasoline has a waiver from fuel volatility limits that has not been extended to E15, but under the Clean Air Act, EPA can waive requirements to address shortages

 Ukraine says Russia stole ‘several hundred thousand tonnes’ of grain – Reuters News

Russian forces have stolen “several hundred thousand tonnes” of grain in the areas of Ukraine they occupy, Ukraine’s deputy agriculture minister said on Saturday.

Speaking to Ukrainian national TV, Taras Vysotskiy expressed concern that most of what he said was 1.5 million tonnes of grain stored in occupied territory could also be stolen by Russian forces.

Ukraine’s foreign ministry accused Russia on Thursday of stealing grain in territory it has occupied, an act it said increased the threat to global food security.

Agriculture minister Mykola Solskyi said grain theft had increased in the last two weeks.

“I personally hear this from many silo owners in the occupied territory. This is outright robbery. And this is happening everywhere in occupied territory,” the ministry quoted Solskyi as saying.

He said such a situation could create food problems in areas that are currently not controlled.

“There will soon be a wheat harvest in the south. But farmers in this situation may well say: ‘Here are the keys to the tractor – go collect it yourself, if you want’,” Solskyi said.

The Kremlin denied Ukraine’s allegations, saying it did not know where the information was coming from.

The agriculture ministry said on Friday that six regions in Ukraine had completed their early spring grain sowing despite the Russian invasion.

Ukraine is divided into 24 regions, but there are no plans to sow grain in Luhansk in the east due to heavy fighting there.

The ministry gave no 2022 grain harvest forecast, while analysts see output at 41.4 million tonnes this year compared with 86 million tonnes in 2021.

The consultancy APK-Inform said 2022/23 grain exports could total 33.2 million tonnes versus 45.5 million expected for the 2021/22 season that ends in June.

Ukraine has exported 763,000 T of grain so far in April, ministry says – Reuters News

Ukraine’s grain exports have reached 45.709 million tonnes so far in the 2021/22 July-June season, the agriculture ministry said on Friday as it resumed publishing grain export data.

The ministry said the volume included 763,000 tonnes exported in April but gave no comparative figures. Senior agriculture officials said this month that Ukraine exported up 300,000 tonnes of grain in March.

Ukraine exported up to 6 million tonnes of grain a month before Russia invaded the country.

“We have already agreed with Poland, Lithuania, Germany, Bulgaria, Romania and in parallel we are actively negotiating the use of port infrastructure of these countries for the export of Ukrainian products,” Ukrainian Prime Minister Denys Shmygal told a televised government meeting.

The ministry said the 2021/22 export volumes included 18.5 million tonnes of wheat, 21.1 million tonnes of corn and 5.7 million tonnes of barley.

April’s exports included 115,000 tonnes of wheat, 622,000 tonnes of corn and 25,000 tonnes of barley.

The ministry did not clarify how grain was delivered.

Ukraine, a major agricultural producer, used to export most of its goods through seaports but has been forced by Russia’s invasion to export by train via its western border or via its small Danube river ports.

Ukrainian President Volodymyr Zelenskiy said on Thursday Ukraine and Bulgaria had reached an agreement on transporting Ukrainian grain via the Bulgarian port of Varna. (Full Story)

Agriculture and transport officials have said Ukraine aims to boost export capacity at Danube river ports, which would allow grain to be shipped to Romanian Black Sea ports.

A cargo carrying more than 71,000 tonnes of Ukrainian corn finished loading in the Romanian Black Sea port of Constanta on Thursday, the first since Russia invaded Ukraine on Feb. 24, port operator Comvex’s manager said

USDA attaché projects Canada grain output rebound in 2022/23

Following are selected highlights from a report issued by the U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) post in Ottawa:

“In marketing year (MY) 2022/23, production of grains is forecast to increase 30 percent year-over-year on an increase in area planted to spring wheat, durum, and oats, and on the assumption of improved soil moisture conditions resulting in higher yields. However, dry conditions persist in Alberta and Western Saskatchewan and many farmers are behind in their planting schedule, due to unfavorable planting conditions. FAS/Ottawa’s total production forecast may need to be adjusted in the absence of significant spring rain in major wheat-growing areas in the prairies. The MY 2021/22 wheat ending stocks-to-use ratio is forecast to reach an 83-year low. Corn import volumes from the United States are up nearly 330 percent marketing year-to-date (August 2021 to February 2022) due to reduced domestic supplies of feed caused by drought.”

U.K. Lets Food Makers Replace Sunflower Oil in Supply Crunch

  • Manufacturers can use alternatives such as coconut and soy oil
  • Ukraine’s sunflower oil exports were cut off by Russia’s warBy Áine Quinn

U.K. food manufacturers can substitute sunflower oil with alternative vegetable oils to ease a supply shortage due to the Ukraine war, the country’s food regulator said.

Companies are scrabbling for edible oils used in everything from food to soap and cosmetics, after Ukraine’s sunflower-oil market — the world’s largest — was cut off by Russia’s invasion. Meanwhile Indonesia, which ships about a third of the world’s edible oil cargoes, just banned palm oil exports.

The U.K. Food Standards Agency is now allowing companies to use fully refined palm, coconut, and soybean oil in the place of sunflower oil, but producers are expected to provide accurate labeling as soon as possible. It has already done the same for rapeseed oil.

France is allowing companies to apply for permission to change recipes without changing labeling for up to 6 months. Companies advertising their products as palm- or GM-free would have to change labeling if that is no longer the case, the ministry said in a statement on Friday.

CORN/CEPEA: With agents focused on the national and the American crops, liquidity decreases

Focused on the development of the second crop in Brazil and aware of the bad weather conditions in the United States – which have not been favoring sowing –, the agents in the Brazilian corn sector have not been closing deals in the national spot market, constraining liquidity. Some purchasers reported to have corn stocked, and sellers are still considering cash flow needs and the necessity of room in warehouses.

Amid the current unfavorable weather conditions in the USA, the American corn output is estimated by the USDA at 383.94 million tons, and if weather gets colder moisture and productivity decreases, the demand for the Brazilian corn may grow.

It is important to consider that other corn suppliers, such as Ukraine and Argentina, are facing some issues in the current season too. In Ukraine, besides the halt in the shipments from the Black Sea, sowing, forecast to occur in April/May, may not happen as initially expected because of the issues related to the transportation of inputs.

In Argentina, the Buenos Aires Stock Exchange (Bolsa de Cereales) estimates the harvest to be 3.5 million tons lower in the current season, at 49 million tons. By Thursday, April 28, 24.6% of the crops in Argentina had been harvested.

In Brazil, sowing of the second crop has ended, and crops development is considered satisfactory in most regions. However, the farmers in some areas in central-western Brazil have been in alert, since is has not rained in more than two weeks. On the other hand, in Paraná, a hailstorm earlier this week damaged some crops. Still, in general, the estimates for the Brazilian 2021/22 corn season are positive.

On Thursday, 28, Seab/Deral estimated the harvest in Paraná to set a record, at 16 million tons, 100 thousand tons more than the volume forecast is the previous report and three-fold the output from 2020/21, when only 5.7 million tons of corn were harvested. The Brazilian output in the second 2021/22 crop continues estimated at 88.53 million tons by Conab, a record. As for the summer crop, by April 23, almost 66% of the national crop had been harvested, according to Conab.

PRICES – Between April 20 and 28, the ESALQ/BM&FBovespa Index for corn (Campinas, SP) rose by 0.6%, to BRL 88.38 (USD 17.90) per 60-kilo bag on Thursday, 28. On the average of the regions surveyed by Cepea, corn prices increased by 2.7% in the over-the-counter market (paid to farmers) and by 2% in the wholesale market (deals between processors).

SOYBEAN/CEPEA: Firm demand and high parity boost prices in BR

The demand from Brazilian processors and importers for the national soybean has been higher this week, pushing up prices in Brazil, despite international devaluations. The US dollar appreciation against the Real helped to underpin domestic quotations too.

In general, sellers have been more interested in trading soybean, aiming to pay expenses, however, some farmers continue away from the market, expecting values to rise in the coming months. The export parity points to prices higher than that currently observed in the national spot market.

Between April 20 and 28, the CEPEA/ESALQ Index Paraná rose by a staggering 5.3%, closing at BRL 192.44 (USD 38.97) per 60-kilo bag on Thursday, 28. On the average of the regions surveyed by Cepea, prices increased by 5.3% in the over-the-counter market (paid to farmers) and by 4.9% in the wholesale market (deals between processors).

In the same period, the ESALQ/BM&FBovespa – Paranaguá (PR) rose by 5.5% to BRL 196.88 (USD 39.87) per 60-kilo bag on Thursday. At the port of Paranaguá (PR), the export parity price for soybean is at BRL 201.03/bag for shipment in May/22; at BRL 201.16/bag for June/22; at BRL 203.82/bag for July/22 and at BRL 207.82/bag for August/22.

For the soybean to be delivered in 2023 through Paranaguá (PR), parity is calculated at BRL 186.27/bag for March/23; at BRL 186.25/bag for April/23 and at BRL 189.24/bag for May/23 – this calculation was based on the future dollar traded at B3 (São Paulo Stock Exchange) on April 28. Although these prices have been higher than the averages in the last five years, they are lower than that in Brazilian spot market in March and in April of 2022, which is constraining the interest of sellers in closing new deals.

CROPS – According to Conab (Brazil’s National Company for Food Supply), 90.8% of the soybean crops sown in Brazil had been harvested by April 23, less than the 91.8% from the same period last season.

In Paraná, the harvest is expected to total 11.8 million tons, according to Deral/Seab, more than 9 million tons less than that initially forecast (a loss of BRL 25 billion, considering the current price levels).

Govt approves import of 0.55-mt GM soymeal to help poultry industry

The government has approved the import of around 0.55 million tone (mt) of genetically-modified (GM) soymeal, a key ingredient in poultry feed.

According to a note by the Department of Consumer Affairs, shipments of soymeal have to be imported before September 30, 2022.

In August 2021, as an exception due to domestic supply constraint, the government had allowed import of 1.2 mt of GM soymeal to help the poultry industry tide over higher feed prices. But only around 0.6 mt could be imported due to time constraints. Soymeal is mostly imported from Argentina.

The poultry industry had asked the government to allow last year’s balance of 0.6 mt of soybean meal this year. Ricky Thaper, treasurer, Poultry Federation of India, said imports would help cut prices, helping in reducing feed cost.

Earlier in the week, Soybean Processor Association of India (SOPA) said that import of soymeal would be ‘counter-productive’ and would pull down domestic price of soyabean.

“India has sufficient stock of soymeal and import would adversely impact crushing of soyabean crop which is expected to begin from October,2022 after the harvest of kharif crop,” DN Pathak, executive secretary, SOPA, had told FE.

The lower domestic prices are expected to hit farmers the most, Pathak said. Currently soybean prices, are ruling at around Rs 6,800 a quintal against a minimum support price (MSP) of Rs 3,950 a quintal.

Pathak of SOPA said that the poultry industry’s annual estimated demand of 9 mt is on the higher side. The processors body had estimated the annual demand of soymeal for the poultry industry is at 5-6 mt.

In a communication to Atul Chaturvedi, secretary, ministry of animal husbandry, SOPA has stated that at the end of the current season that ends in September 2022, the country will have a carry-forward stock of 2 mt of uncrushed soybean before new kharif crops arrives.

“There is no justification for import of soybean meal as domestic higher prices of soybean and soybean meal is a reality,” the communication by SOPA has stated.

Out of the total production of soybean in the country, 81% is used as soymeal while 18% is extracted as oil and the rest is considered processing losses. Currently the domestic prices of soymeal is around Rs 68,000 a tonne, while imported prices at present is around Rs 58,000 a tonne, which includes 16% import duties.

The ministry of agriculture has estimated the country’s soybean production in the 2021-22 crop year (July-June) at 13.12 mt, while according to SOPA’s estimate the output is around 11.88 mt. Maharashtra, Madhya Pradesh and Rajasthan contribute more than 90% of India’s soybean production.

China’s Agro Ministry Approves Bioceres HB4 Soy for Import

China’s Agriculture Ministry has approved the HB4 strain of soy developed by Bioceres Crop Solutions, according to a document posted on its website.

  • The document allows the import and commercialization of HB4 soybeans and soy derivatives
  • NOTE: The approval was granted to INDEAR Instituto de Agrobiotecnologia Rosario, a unit of Bioceres

U.S. Beef Production Falls 1.4% This Week, Pork Rises

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