Global Ag News for May 4.22

TODAY

Wheat prices overnight are up 9 in SRW, up 10 1/2 in HRW, up 6 1/4 in HRS; Corn is up 2; Soybeans up 2 1/2; Soymeal up $0.09; Soyoil up 0.42.

For the week so far wheat prices are down 1 1/4 in SRW, down 2 1/2 in HRW, down 4 1/4 in HRS; Corn is down 18 1/2; Soybeans down 51 3/4; Soymeal down $0.75; Soyoil down 3.48. For the month to date wheat prices are down 1 1/4 in SRW, down 2 1/2 in HRW, down 4 1/4 in HRS; Corn is down 18 1/2; Soybeans down 51 3/4; Soymeal down $7.50; Soyoil down 3.48.

Year-To-Date nearby futures are up 34% in SRW, up 35% in HRW, up 17% in HRS; Corn is up 35%; Soybeans up 25%; Soymeal up 6%; Soyoil up 50%.

China and Malaysia’s markets are closed for holiday.

There were changes in registrations (-636 SRW Wheat, 5 Oats). Registration total: 1,549 SRW Wheat contracts; 43 Oats; 0 Corn; 0 Soybeans; 98 Soyoil; 0 Soymeal; 154 HRW Wheat.

Preliminary changes in futures Open Interest as of May 3 were: SRW Wheat down 1,937 contracts, HRW Wheat up 162, Corn up 5,453, Soybeans up 921, Soymeal down 423, Soyoil up 573.

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

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

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

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

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

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

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

The player sheet for 5/3 had funds: net sellers of 3,500 contracts of  SRW wheat, sellers of 12,000 corn, sellers of 7,500 soybeans, sellers of 3,500 soymeal, and  buyers of 1,000 soyoil.

TENDERS

• WHEAT SALE: A group of South Korean flour mills bought around 50,000 tonnes of milling wheat to be sourced from the United States in an international tender on Wednesday

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 issued an international tender to purchase 120,000 tonnes of animal feed barley

Brazil Farmers Seen Expanding as Grain Prices Offset Fertilizer

• Farmers in top-grower Mato Grosso may sow 2.9% more acres
• Prices in 2023 are getting stronger relative to 2022

Soybean farmers in Brazil’s top-growing state are expected to plant more acres next season in a potential boost to global supply, a sharp turnaround after skyrocketing fertilizer prices sparked fears of a retreat.

Farmers in Mato Grosso may plant 2.9% more acres in 2022-2023, according to the first official estimate from Instituto Mato-Grossense de Economia Agropecuária. A market survey from Agrinvest Commodities and Fundação MT shows 40% of farmers in the region may increase by 5% or more.

A rally in future prices and export premiums in Brazil have encouraged farmers to expand. The implications will be felt across much of the world: Larger planting areas in South America may ease supply concerns following poor weather on the continent as well as supply interruptions in the Black Sea.

Until recently, limited fertilizer supplies stoked fears that producers wouldn’t be willing to invest to expand their planted area. But prices have since fallen, at least temporarily, and grain premiums for the next crop are elevated, boosting confidence. Soybean futures for July 2023 were $1.66 a bushel below July 2022 on Monday, from $2.765 on March 8.

While there are still questions about the national area increase, the survey from a major growing area signals more optimism.

Still, it remains unclear how much fertilizer will be applied. Because it’s still historically expensive, there is a growing consensus that farmers will apply less of it, raising the question of the effect on margins.

EU Soft-Wheat Exports Fall 4.4% in Season Through May 1

Soft-wheat shipments during the season that began July 1 totaled 22m tons as of May 1, versus 23m tons in a similar period a year earlier, the European Commission said Tuesday on its website.

• NOTE: Figures for the prior season include trade for the U.K. until Dec. 31, 2020, when the country departed the EU customs union
• Top soft-wheat destinations are Algeria (3.24m tons), Egypt (2.36m tons) and China (2.09m tons)
• EU barley exports at 6.44m tons, versus 6.75m tons a year earlier
• EU corn imports at 13.4m tons, versus 13m tons a year earlier

Ukraine grain exports fall in Apr to 923,000 T – APK-Inform

Ukraine’s grain exports fall to around 923,000 tonnes in April from 2.8 million tonnes in the same month in 2021 due to the Russian invasion, analyst APK-Inform said on Wednesday.

The consultancy said in a report the country’s exports included 768,486 tonnes of corn and 127,130 tonnes of wheat. Ukraine also exported 151,529 tonnes of sunflower oil and 169,681 tonnes of oilseeds, mostly sunseed.

Ukraine’s Spring Grain, Oilseed Areas May Fall 24%: Ministry

Ukraine spring grains and oil seeds planting areas may decline to 11.45m hectares this year, a drop of 3.5m-4m hectares from 2021, Ukrainian Grain Association says in statement, citing Agriculture Ministry’s data.

• As of May 2, farmers had planted spring grains and oil seeds across 4.7m hectares;
• That’s 60% of area planted as of May 6 last year
• Spring planting will be reduced because of Russian occupation and land mines

Russia Wheat Crop Seen Up 10% Y/y, Export Prospects ‘Vague’: UAC

Russia’s 2022 wheat harvest could rise to 83.5m tons, versus 76.1m tons last year, Kyiv-based analyst UkrAgroConsult says in a report.

• Nation’s total grains harvest seen at 130m tons, up 7% y/y
• Weather conditions in winter and spring have been favorable so far
• “Export prospects are still rather vague”
  • Wheat shipments currently forecast at 39m tons in 2022-23, versus 32m tons the prior year
• Sanctions complicate operations for Russian traders, via disruptions with payments, restrictions on Russian ships docking at certain locations and higher insurance rates
• “However, due to progressive food inflation, Russia can offer grain at very competitive prices. Lack of supply from Ukraine and high European prices are driving demand for grains of Russian origin, despite the associated risks”

Russia Confiscates 400,000 Tons of Ukraine’s Grain: Min

Russia’s troops have confiscated 400,000 tons of grains from areas in Ukraine that they have seized, Ukraine’s Agriculture Ministry says in a statement on its website citing Deputy Minister Taras Vysotskyi

• Ukraine’s government has confirmation that grains have been confiscated in four regions, including Luhansk, Donetsk, Kherson and Zaporizhzhia, that have been invaded by Russia
• Russia’s actions pose a threat of famine in occupied regions
• “These are not strategic provisions, it’s what is needed to ensure daily food security. In other words, food for Ukrainians that live there”
• Part of the volumes of grains seized by Russians were to be used for spring sowing

Ukraine Lacking About 16m Tons of Silo Space for 2022 Crops: APK

Ukraine’s grain and oilseed harvests this year are expected to total about 55.9m tons, local analyst APK Inform says on its website.

• At the same time, the country is expected to enter the next season with quadruple the normal level of stockpiled crops
  • Storage capacity has also been lost as some silos are in areas impacted by the war
• Storage deficit for the coming season is estimated at ~16.3m tons
• Weather conditions and the spring planting pace so far suggests that production could exceed that forecast, adding extra pressure

Canada to increase grain exports amid global food supply concerns

The Canadian government announced on Tuesday an investment to support the growth of the country’s grain exports, at a time when the demand for Canadian grain products is on the rise on the global markets.

“Canadian grain producers are a key link in global food security. Today’s investment will help industry organizations build new relationships in international markets so we can continue to feed a growing global population,” Minister of Agriculture and Agri-Food Marie-Claude Bibeau said in a news release.

With funds of up to nearly 4.4 million Canadian dollars (3.5 million U.S. dollars), the Canadian government is supporting the sector by helping three organizations to identify new opportunities for Canadian grain products, including Cereals Canada Inc., Canada Grains Council, and the Prairie Oat Growers Association, according to the news release.

As the demand for Canadian grain exports continues to increase, it is important to ensure new trade opportunities that help strengthen the value chain, the news release said.

Meanwhile, Canada’s federal, provincial and territorial ministers of agriculture met on Monday to speak about their ongoing concerns around global food supplies, food security and the supply of essential inputs, including fertilizers.

According to a readout of the meeting, the ministers discussed how to help maximize Canada’s contribution to global food supply, and agreed to work together to stabilize the supply chain wherever possible.

The Canadian grain industry generated a record 32.2 billion Canadian dollars (25.8 billion U.S. dollars) in farm cash receipts in 2021, with exports also setting a record by value at more than 24.5 billion Canadian dollars (19.6 billion U.S. dollars).

 

India’s Wheat Production Seen Falling to 105M Tons in 2021-22

Wheat output in India, the world’s second-biggest grower, may decline to 105m tons in 2021-22, according to the food ministry.

• The forecast compares with an earlier prediction of about 111m tons for the year, and 109.6m tons produced in 2020-21
• Wheat purchases by government agencies are seen at 19.5m tons, less than half of 43.3m tons a year earlier

 

Farmers in Argentina have sold 23.7 million T of 2021/22 corn, ministry says

Argentina’s farmers have sold 23.7 million tonnes of corn of the 2021/22 season so far, the Agriculture ministry said on Tuesday, noting that 1.1 million tonnes were traded in the week through April 27.

The pace of Argentine corn sales April 20-27 was slower than the same period in the previous campaign, when 1.9 million tonnes of the grain were sold.

Argentina is the world’s No. 2 corn exporter and its farmers had harvested 24.6% of the area sown with the 2021/22 cereal until last week, according to the Buenos Aires grains exchange (BdeC), which has estimated the country’s corn production at 49 million tonnes.

Foreign currency from agricultural exports is critical for Argentina’s battered economy. However at the end of last year, the Argentine government set a limit on 2021/22 corn exports of 41.6 million tonnes to try to control high domestic food prices.

Regarding 2021/22 soybean crop, Argentine farmers have sold 14.1 million tonnes so far, according to government data, down from the 16.4 million tonnes traded by the same time last year.

The grains exchange expects production of the oilseed to reach 42 million tonnes this season. Argentine farmers have brought in 46.4% of total planted soybean area.

 

Punjab govt will purchase maize, bajra, other crops at MSP: CM Bhagwant Mann

Punjab chief minister Bhagwant Mann on Tuesday announced that his government will purchase maize, bajra, sunflower and moong crops at MSP, encouraging farmers to adopt less water consuming options as an alternative to paddy in the wake of fast-depleting groundwater.

Currently, farmers in the state are getting minimum support price (MSP) for only wheat and paddy crops and the government is also purchasing only these two crops. The other crops are being purchased by private traders.

“Our government will purchase maize, sunflower, moong and bajra crops at MSP and at the government’s own expenses. Even if we have to sell these crops to any country, we will not let farmers suffer,” said Mann while addressing a gathering of farmers of his native village Satoj in Sangrur.

Mann was in Satoj to promote direct seeding of rice (DSR) in the upcoming kharif season. Punjab Finance Minister Harpal Singh Cheema and MLA, Sunam, Aman Arora were also present on the occasion.

Under the DSR technique, the seeds are sown in the field directly rather than transplanting seedlings.

The state government has already announced to provide financial assistance of ₹ 1,500 per acre to each farmer if they adopt DSR technique, which results in less use of water in paddy cultivation.

‘Satoj must set example by using DSR’

Calling upon the farmers of Satoj, Mann said that they must set an example for the entire Punjab by sowing paddy on maximum area with DSR method.

Mann said that it is the need of the hour that our farmers must switch from traditional paddy transplantation to the advanced technology of DSR.

“Try it first and then you will tell your relatives about it. Only by going this way, we will be able to leave water for the next generation.

Otherwise, only the name of Punjab will remain. River water has been contaminated and ground water is depleting. We have to save Punjab’s water, drinking water, rivers’ water and groundwater,” said Mann.

The CM also assured the farmers that during the tenure of their government, they will be getting superior quality of fertilisers, and pesticides.

Edible oil prices could fall by up to 15% in June, says Adani Wilmar CEO

Edible oil prices, which have been soaring since February due to geopolitical tensions and the recent ban on exports by Indonesia, could decline by up to 15% by June. Speaking to FE, Angshu Mallick, chief executive officer and managing director at Adani Wilmar, said prices have peaked and should start to correct from next month onwards. Also, Indonesia should lift the ban on palm oil exports by May 10. “By the end of the June quarter, we should see a correction in edible oil prices. Prices should surely correct by 10-15%. We have seen the peak, and by June, we will see the market getting corrected,” he said.

Adani Wilmar took an average price hike of 30-35% in the edible oil segment during the quarter ended March 31. The cost of raw material consumed in the three months to March 2022 was up 40% year-on-year to Rs 13,666 crore. For the full year ended March, raw material costs were up 49% y-o-y to Rs 48,214 crore.

Mallick said while the Ukraine-Russia war was already a setback, Indonesia banning palm oil exports all of a sudden came as another blow. “We feel the peak is over. Now, it is a question of prices declining because there isn’t any bad news left to be accounted for,” he said.

According to Mallick, as Indonesia is a palm oil surplus country, it cannot afford to hold the stock for long and is also short on storage. “They can wait for 7-10 or 15 days, but they have to export because they do not have enough storage to keep the oil. I feel that by May 10, it should start exporting and prices should start looking downwards because there is no other reason left for higher prices,” he said.

India imports more than 55% of its edible oil consumption annually, either in crude or refined form. Out of India’s imports of 7.2 million tonne (MT) of palm oil annually from Indonesia and Malaysia in 2021-22, 5.4 MT was crude palm oil.

Temperatures Seen Rising in Northwestern and Central India: IMD

Maximum temperatures are expected to rise by 2 degrees to 3 degrees Celsius after 24 hours in India’s northwestern region, according to the India Meteorological Department.

• Temperatures are also likely to increase over central parts by 2 degrees to 3 degrees Celsius after two days
• Maximum temperatures may be 2 degrees to 4 degrees Celsius higher over western state of Maharashtra during next 3-4 days
• No significant change in max temperatures expected over the rest of the country during the next 5 days
• India did not record heat waves on Tuesday
• Rains seen in some areas of West Bengal, Odisha, Jharkhand, Bihar, Uttar Pradesh, Chhattisgarh, Andhra Pradesh, Telangana, Tamil Nadu, Karnataka, Kerala and northeastern states, including Assam, for five days from Wednesday

U.S. Agriculture Sentiment Rises in April: Purdue Univ.

The Purdue University/CME Group’s agricultural sentiment index increased to 121 points in April from 113 in March, according to a survey of 400 agricultural producers.

• Current conditions component improved by 7 points from March
• Future expectations up by 9 points