Global Ag News for May 27.22

HEADLINES TODAY

Wheat prices overnight are up 11 1/4 in SRW, up 5 1/2 in HRW, up 11 1/2 in HRS; Corn is up 3 1/4; Soybeans up 4; Soymeal up $0.07; Soyoil down 0.25.

For the week so far wheat prices are down 24 in SRW, down 24 3/4 in HRW, up 20 1/4 in HRS; Corn is down 13 1/4; Soybeans up 23 1/2; Soymeal down $0.19; Soyoil down 0.72. For the month to date wheat prices are up 98 3/4 in SRW, up 128 1/4 in HRW, up 137 3/4 in HRS; Corn is down 45; Soybeans up 45 3/4; Soymeal down $3.40; Soyoil down 3.91.

Year-To-Date nearby futures are up 49% in SRW, up 53% in HRW, up 32% in HRS; Corn is up 29%; Soybeans up 30%; Soymeal up 4%; Soyoil up 42%.

Chinese Ag futures (SEP 22) Soybeans down 8 yuan; Soymeal up 92; Soyoil up 166; Palm oil up 330; Corn up 7 –Malaysian palm oil prices overnight were down 176 ringgit (-2.69%) at 6357.

There were no changes in registrations. Registration total: 1,010 SRW Wheat contracts; 23 Oats; 0 Corn; 0 Soybeans; 98 Soyoil; 0 Soymeal; 139 HRW Wheat.

Preliminary changes in futures Open Interest as of May 26 were: SRW Wheat up 2,790 contracts, HRW Wheat up 648, Corn up 129, Soybeans up 9,561, Soymeal up 3,693, Soyoil up 2,428.

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

Central/Southern Plains Forecast: Mostly dry Friday. Isolated showers north Saturday-Monday. Temperatures near normal Friday, above normal Saturday-Monday. Outlook: Scattered showers Tuesday-Saturday. Temperatures near to below normal northwest and above normal southeast Tuesday-Wednesday, near to below normal Thursday-Saturday.

Western Midwest Forecast: Mostly dry Friday. Isolated to scattered showers north Saturday-Monday. Temperatures near to below normal Friday, near to above normal Saturday, above normal Sunday-Monday.

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

The player sheet for 5/26 had funds: net sellers of 3,500 contracts of  SRW wheat, sellers of 25,000 corn, sellers of 17,500 soybeans, buyers of 3,000 soymeal, and  buyers of 5,000 soyoil.

TENDERS

  • WHEAT PURCHASE: Spot basis offers for soymeal were mostly steady to firmer in the U.S. Midwest and Gulf export terminal on Thursday, supported by tight feed-ingredient supplies caused by recent downtime at various soy processing plants and shortages of trucks and rail cars, ingredient dealers said.
  • CORN PURCHASE: Turkish Grain Board bought 325,000 tons of feed corn in a tender that closed Thursday.

PENDING TENDERS

  • 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. Offers were to be submitted by May 19.
  • WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of milling wheat.

USDA Raises 2022 Agriculture Exports Est. on Soybeans, Corn

The USDA raises fiscal year 2022 exports est. by $7.5b from its February est. to $191b, according to the Outlook for U.S. Agricultural Trade report released on Thursday.

  • Increases were led by soybeans, corn and cotton
  • Soybean export volume revised up by 2.4m tons, and value lifted by $1b to $32.3b
  • Corn raised by 2m tons in volume terms, and by $2.2b in dollar terms
  • Agricultural imports raised by $8b to $180.5b, this lowers the balance to $10.5b vs $11b in February
  • The US leading export destination remains China at $36b, unchanged from the February est.

Putin says Russia ready to help solve food crisis if West lifts sanctions – Kremlin

Russian President Vladimir Putin told Italy’s Prime Minister Mario Draghi by phone on Thursday that Russia was ready to significantly contribute to solving the international food crisis but only if the West lifts sanctions, the Kremlin said.

Putin said Russia stood ready to export grain and fertilizers in order to tackle the crisis.

He also told Draghi that Russia was ready to continue uninterrupted gas supplies to Italy.

Russia Could Export 40m Tons of Wheat Next Season: IFX

Russian wheat exports in the new agricultural year from July are estimated at a potential 39m-40m tons, Interfax reports, citing comments from Igor Pavensky, head of the analytical center at rail carrier Rusagrotrans, at a conference.

  • Wheat exports so far this season are reaching 32.5m-32.7m tons, despite high prices and wheat taxes
  • Increases wheat harvest estimate for this year to 86m tons from 84.7m tons, citing production levels in Southern, Central Russia and the Volga region
  • Russia will export 0.5m tons of corn in May, the biggest monthly volume this season: Pavensky
  • Still, sees corn exports for this season about 3.6m tons lower than last season

Saskatchewan Seeding Progress Trails Average Amid Snow, Rain

52% of the crop is seeded as of May 23, behind the five-year average of 78%, Saskatchewan’s agriculture ministry says Thursday in a report.

  • Seeding progress climbed from 33% week prior despite a storm that brought rain, snow
  • Rainfall in drier areas will help improve soil moisture
  • Cool weather has slowed development of many crops

USDA Allows US Farmers to Remove Land From Conservation Early

US farmers in the final year of their contracts in the Conservation Reserve Program (CRP) can terminate contracts early, the USDA said Thursday an a release.

  • Taking acres out of conservation would boost planted acres at a time when the world is short of food and feed supplies due to Russia’s invasion of Ukraine that stalled exports in the Black Sea
  • USDA is mailing letters to growers with expiring acres

US Opens Conservation Land for Farming Amid Food Supply Crunch

The US is allowing farmers to use some conservation lands for crops as global supplies get disrupted by the war in Ukraine.

Growers with only a year left in their contracts under the Conservation Reserve Program (CRP), which pays them to keep ground out of agricultural production, can apply to exit early and instead sow crops such as wheat, the US Department of Agriculture said Thursday in a release.

Some lawmakers such as Senator John Boozman of Arkansas were pushing for the move, which could help boost world grain supplies.

Russia’s invasion of Ukraine snarled crop shipments out of the Black Sea, sending crop prices soaring and contributing to the worst food inflation in four decades.

Russia Could Export 40m Tons of Wheat Next Season: IFX

Russian wheat exports in the new agricultural year from July are estimated at a potential 39m-40m tons, Interfax reports, citing comments from Igor Pavensky, head of the analytical center at rail carrier Rusagrotrans, at a conference.

  • Wheat exports so far this season are reaching 32.5m-32.7m tons, despite high prices and wheat taxes
  • Increases wheat harvest estimate for this year to 86m tons from 84.7m tons, citing production levels in Southern, Central Russia and the Volga region
  • Russia will export 0.5m tons of corn in May, the biggest monthly volume this season: Pavensky
    • Still, sees corn exports for this season about 3.6m tons lower than last season

Egypt Raises Moisture Allowance for Wheat Imports to 14%

The level of moisture allowed in wheat imports was increased to 14%, according to a document sent by the Industry Ministry to traders and seen by Bloomberg.

  • The change is effective as of May 26: traders
  • NOTE: The moisture level was increased from 13.5%

Coceral Raises EU 2022 Soft-Wheat Crop Estimate by 1.7m Tons

The region’s soft-wheat production is now seen at 143m tons, trade association Coceral said in a report.

  • Says timely rain in Spain has improved the outlook
  • Barley output seen at 60m tons, up from 59.2m tons estimated in March
  • Corn production seen at 66m tons, down from the previous outlook of 67.3m tons
  • The rapeseed crop is pegged at 19.5m tons, up slightly from the March projection
  • NOTE: The figures include U.K. production

Russia’s 2022/23 grain exports seen at 50 mln T – minister

Russia’s exportable grain surplus in the new July-June marketing season is expected to come in at 50 million tonnes, up from 37 million tonnes in the current season, the country’s agriculture minister Dmitry Patrushev told a conference on Friday.

He did not provide an estimate for wheat. Russia is one of the world’s largest wheat exporters.

Russia may start building more vessels for grain exports – minister

Russia may start building more vessels for grain exports, the country’s agriculture minister Dmitry Patrushev told a conference on Friday.

Russia competes with the European Union and Ukraine to supply wheat to the Middle East and Africa.

It continues to export despite difficulties with logistics and payments caused by Western sanctions on Moscow over what Russia terms its “special military operation” in Ukraine.

Iran to Import 5M Tons of Wheat, Grain From Russia: YJC

Iran’s Oil Minister Javad Owji said agreement for wheat or grain imports was finalized during this week’s visit to Tehran by Russian Deputy Prime Minister Alexander Novak, the state-run Young Journalist’s Club reports, citing an interview.

  • No further details given
  • Owji: North-South trade corridor linking Russia to Indian Ocean will probably be operational in second half of current Iranian year, which ends in March 2023

Turkey Predicts 19.5m Tons of Wheat Production in 2022

Wheat production is expected to increase 11% from 2021 to 19.5m tons, according to the year’s first crop output estimate published by statistics office.

  • Maize production seen rising 3.7% to 7m tons
  • Barley production seen rising 48% to 8.5m tons
  • Sunflower output seen rising 5.6% to 2.6m tons
  • Sugar beet production seen rising 4.1% to 19m tons

Brazil Soy Association Asks for Fertilizer Price Investigation

High fertilizer prices in Brazil could lead to shortages and “abusive” price hikes must be investigated, according to the Aprosoja’s Mato Grosso president Fernando Cadore.

  • Cadore asked for congressmen within the Parliamentary Agricultural Front (FPA), the biggest lobby in Congress, to investigate “inexcusable increases”
  • According to Cadore, domestic prices of potash are 350% more expensive compared with last year
  • Aprosoja has asked FPA to talk to antitrust regulator CADE to ask companies about “abusive” hikes and operations similar to cartels
  • “These companies, in case of food shortages, should also be held responsible, since with the current prices of these inputs, agriculture may become impracticable in the country,” said Cadore
    • Fertilizer prices are trending lower in Brazil after reaching all-time highs

French Wheat Conditions Worsen on Dryness and Heat: AgriMer

The share of France’s soft-wheat crop rated in good or very good condition fell to 69% as of May 23, down from 73% the prior week, according to the latest FranceAgriMer data.

  • Corn was 99% planted, versus 98% the prior week
  • Compares to 98% at this time last year

 Fertilizer Prices Plunge Nearly 30% Giving Relief to Farmers

  • Ammonia has seen some demand destruction as buyers balk at record prices

Fertilizer prices that had hit records are now plunging as buyers reel from sticker shock.

The June spot price in Tampa, Florida for the nitrogen fertilizer ammonia settled at $1,000 per metric ton, a drop of 30% from May’s $1,425 per metric ton, according to Green Markets, a Bloomberg company.

Demand destruction is part of the decline. Places like Southeast Asia are seeing buyers unwilling to pay the record high prices that were posted in April and May, said Green Markets analyst Alexis Maxwell. It also reflects the declining cost of ammonia production as European natural gas prices fell in the second quarter, she said.

Even with the drop, however, prices are still 87% higher than a year ago, and supply chain issues continue to wreak havoc on global markets.

Wheat Price Surge Triggers Nationwide Strike by Burkina Bakers

Bakers in Burkina Faso closed in protest on Thursday after the government said it would not let them raise the price of baguettes in response to surging wheat prices.

In an effort to “save our bakeries” after authorities forcibly shuttered shops that raised prices, all establishments would close, the Federation des Patrones de Boulangeries, Patisseries et Confiseries du Burkina Faso said in a statement. Wheat prices in the land-locked West African country have soared in recent weeks to 525,000 CFA francs ($858) per ton from 350,000 CFA francs, it said, as supplies of the raw material have been disrupted by Russia’s war with Ukraine, a major exporter.

In April, the labor union warned that it would have to raise the price of French-style baguettes that are a staple in the francophone country to 200 francs from 150 francs. On May 23, it said the new price would come into effect on May 24, leading the industrial development ministry to suggest the increase was illegal, sparking the strike, news website Lefaso.net reported.

Non-union bakeries that stayed open on Thursday quickly ran out of bread, Radio Omega reported. The government on Thursday announced talks with bakery owners, transporters and customs officials to find a solution to the spike in prices of basic food stuffs.

U.S. Barge Shipments of Grain Fell 15% Last Week: USDA

U.S. Grain Movement by Rail Fell 5.6% Week Ended May 18: USDA

Much-Awaited Monsoon Yet to Reach India’s Southern Coast: IMD

India’s monsoon rains, which water more than half of the country’s farmland, are yet to reach the southern state of Kerala, according to the India Meteorological Department.

  • NOTE: The weather office had forecast that the monsoon will arrive on May 27; the prediction had a margin of error of 4 days
    • The monsoon’s normal start date in Kerala, the first entry point for the country, is June 1
  • Conditions are favorable for further advance of monsoon over some more parts of the Arabian Sea, entire Maldives and adjoining areas of Lakshadweep during next 24 hours: IMD
    • Advance of monsoon over Kerala is being continuously monitored
  • Rains are seen in parts of several states, including Kerala, West Bengal, Odisha, Uttar Pradesh, Maharashtra, Tamil Nadu, and Assam, for four days from Friday

ASIA CROP WEATHER: India’s Monsoon Yet to Hit Southern Coast

India’s monsoon rains, which water more than half of the country’s farmland, are yet to reach the southern state of Kerala, according to the India Meteorological Department.

  • NOTE: The weather office had forecast that the monsoon will arrive on May 27; the prediction had a margin of error of 4 days
    • The monsoon’s normal start date in Kerala, the first entry point for the country, is June 1
  • NOTE: Crops such as rice, sugar cane, soybeans and peanuts are grown during the four-month rainy season
  • Showers are seen in some areas of several states, including Kerala, West Bengal, Odisha, Uttar Pradesh, Maharashtra, Tamil Nadu, and Assam, for four days from Friday

CHINA

  • Precipitation in most of northern China will be close to or slightly lower than normal, and the continuous lack of rain will cause moisture content of wheat fields to decline, according to the National Meteorological Center
  • It’s necessary to prevent adverse effects of drought on wheat grain filling, center says
  • Rains in Inner Mongolia and other northeastern regions will boost the moisture content of farmland, which is beneficial for sowing and development of spring corn, soybeans and potatoes
    • However the distribution of moisture is uneven
  • Weather has been too wet in southern China, disrupting summer harvest; this could affect robust growth of rice crops and increase the risk of pests and diseases

MALAYSIA

  • Thunderstorms, heavy rain and strong winds are expected over parts of Sabah and Sarawak on Friday, according to a warning by the Malaysian Meteorological Department
  • Thunderstorms and showers seen over Pahang through Sunday
  • NOTE: Continuous heavy rains can cause floods and affect harvest and transport of palm fruits
  • NOTE: Sarawak, Sabah and Pahang are Malaysia’s key palm-growing states; the nation is the second-largest producer

AUSTRALIA

  • Rains in South Australia and Victoria should improve moisture for wheat, forecaster Maxar says
  • However, more rains will still likely be needed to end dryness in western South Australia
  • Lighter rains in northern New South Wales and Queensland should allow wetness there to ease a bit

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