Global Ag News for May 5.22

TODAY – U.S. Corn Exports Down 21% Y/y in March, Soybeans Up 39%: Census

Wheat prices overnight are up 27 3/4 in SRW, up 27 3/4 in HRW, up 18 3/4 in HRS; Corn is up 3 1/4; Soybeans up 15; Soymeal up $0.31; Soyoil down 0.07.

For the week so far wheat prices are up 48 1/4 in SRW, up 45 1/4 in HRW, up 30 in HRS; Corn is down 16; Soybeans down 29 1/4; Soymeal down $1.10; Soyoil down 1.82. For the month to date wheat prices are up 48 1/2 in SRW, up 45 1/4 in HRW, up 30 in HRS; Corn is down 16; Soybeans down 29 1/4; Soymeal down $11.00; Soyoil down 1.82.

Year-To-Date nearby futures are up 38% in SRW, up 39% in HRW, up 19% in HRS; Corn is up 35%; Soybeans up 26%; Soymeal up 4%; Soyoil up 55%.

Chinese Ag futures (SEP 22) Soybeans down 41 yuan; Soymeal down 24; Soyoil down 156; Palm oil down 210; Corn down 3 — Malaysian palm oil prices overnight were down 348 ringgit (-4.90%) at 6756.

There were changes in registrations (-119 SRW Wheat, -14 Oats). Registration total: 1,430 SRW Wheat contracts; 29 Oats; 0 Corn; 0 Soybeans; 98 Soyoil; 0 Soymeal; 154 HRW Wheat.

Preliminary changes in futures Open Interest as of May 4 were: SRW Wheat down 663 contracts, HRW Wheat down 613, Corn down 2,204, Soybeans up 2,064, Soymeal down 2,428, Soyoil up 3,779.

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

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

Temperatures above normal Monday, below to near normal far northwest and above normal southeast Tuesday-Friday.

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

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

Canadian Prairies Forecast:  Isolated showers west and north Thursday. Isolated to scattered showers Friday. Temperatures above normal through Friday. Scattered showers Saturday-Sunday. Temperatures near to above normal Saturday, below normal west and above normal east Sunday. 6-10 Day Outlook: Scattered to isolated showers Monday-Tuesday. Isolated showers to mostly dry Wednesday. Isolated showers Thursday-Friday. Temperatures below normal west and above normal far southeast Monday, below normal Tuesday-Friday.

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

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

The player sheet for 5/4 had funds: net buyers of 13,500 contracts of  SRW wheat, buyers of 500 corn, buyers of 6,500 soybeans, sellers of 2,500 soymeal, and  buyers of 5,500 soyoil.

TENDERS

  • CORN PURCHASE: Taiwan’s MFIG purchasing group bought about 55,000 tonnes of animal feed corn to expected to be sourced from South Africa in an international tender which closed on Wednesday
  • WHEAT PURCHASE: 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
  • WHEAT AND BARLEY TENDER: Tunisia’s state grains agency issued an international tender to purchase an estimated 100,000 tonnes of soft wheat and 75,000 tonnes of animal feed barley

PENDING TENDERS

  • FEED BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase 120,000 tonnes of animal feed barley

Ukraine Soil Moisture ‘Satisfactory’ for Spring Crops: Research

Soil moisture level for this time of year is better than 2021, suggesting higher harvest yields, according to the Ukraine Grain Association, which cited satellite data obtained by Kyiv-based Institute of Agroecology and Environmental Management.

  • In general, soil moisture conditions for Ukraine’s spring crops are seen as “quite satisfactory,” the association said in a statement on their Telegram channel
  • “It gives us optimism regarding future level of harvest yields in all three natural and climate zones, if a trend from 2021 persists”
  • Winter wheat is maturing somewhat slower than last year, requiring farmers to inject more fertilizers

World’s Grain Reserves to Remain Depleted for Years, Says CF

It will take at least two to three years for farmers to replenish the world’s grain stockpiles.

That’s according to CF Industries Holdings Inc., the world’s largest nitrogen fertilizer company. The outlook is a positive one for the producer, which sees robust global demand for its product as the world restocks, according to an earnings release Wednesday.

A multitude of factors from adverse weather to global shipping disruptions have hurt crop supplies, forcing buyers to tap reserves. As a result, corn, wheat and soybean prices have soared to multiyear highs.

“Global grains stocks remain extremely low, an issue that has become amplified because of Russia’s invasion of Ukraine,” Chief Executive Officer Tony Will said in the release.

Other highlights from the earnings:

  • CF estimated 2022 U.S. corn plantings will be 91 to 93 million acres compared with USDA’s estimate of 89.5 million acres.
  • Production returns on all 2022 crops are forecast to be historically high despite high input costs.
  • Fertilizer trade flows to Brazil will be among the most affected by Russian export problems.
  • The company expects some exports of urea from China to restart in the second half of 2022.

Ukraine 2022 wheat crop will be close to last year’s 32 mln T

Ukraine’s 2022 wheat harvest is likely to be “close” to last year’s level of more than 32 million tonnes, APK-Inform agriculture consultancy quoted the National Academy of Agrarian Sciences of Ukraine as saying.

kraine sowed 6.5 million hectares of winter wheat for the 2022 harvest but agriculture officials have said some of the area could not be harvested due to the Russian invasion.

“Considering that in April, which is decisive in terms of the yield of winter crops, precipitation exceeded the average long-term norm, farmers will probably be able to get a significant harvest of winter wheat, which will be close to the previous, but not exceed it,” the academy said.

The government did not give its own 2022 wheat crop forecast.

La Niña Expected to Linger Over Summer

Forecasts are calling for the La Niña climate system to stay around in the Pacific over the summer, which is providing support for grain futures today. “This is a classic set up for a problematic summer in the Midwest, although it doesn’t guarantee such,” says Arlan Suderman of StoneX in a note. In its last update in April, the Climate Prediction Center forecast gave the current La Niña a nearly 60% chance of persisting through the summer.

India Plans to Cut Taxes on Edible Oils to Cool Surging Prices

  • Government may lower agri-infra cess on crude palm oil imports
  • Nation depends on imports for 60% of its vegetable oil needs

India is planning to cut taxes on some edible oils to cool the domestic market after the war in Ukraine and Indonesia’s ban on palm oil exports sent prices skyrocketing, according to people familiar with the matter.

India, the world’s top importer of vegetable oils, is looking to cut the agriculture infrastructure and development cess on crude palm oil imports from5%, the people said, asking not to be identified as the information is private. The new tax amount is still being deliberated, the people said.

The cess is levied over and above basic tax rates on certain items, and is used to finance agriculture infrastructure projects. The base import duty on crude palm oil has already been scrapped.

A finance ministry spokesperson didn’t immediately respond to calls and a text message seeking comment. The agriculture and food ministries also weren’t immediately available to comment.

India is especially vulnerable to soaring vegetable oil prices as it relies on imports for 60% of its needs. Prices, which have been rallying for the past two years, extended the surge after Russia’s invasion of Ukraine locked out exports of sunflower oil and Indonesia, the biggest shipper of edible oils, imposed a ban on palm oil exports to protect its domestic market.

India has tried to cool prices in the past, including by reducing import duties on palm, soybean oil and sunflower oil, and limiting inventories to prevent hoarding. Success has been muted because the measures stoked expectations of higher purchases, which further boosted international prices.

The government is now looking to cut import duties on crude varieties of canola oil, olive oil, rice bran oil and palm kernel oil to 5% from 35% to help boost domestic supply, the people said.

UAN at Record Price May Change U.S. Farmers’ Plans

Prolonged delays in the U.S. spring planting season will likely prompt farmers to alter nitrogen-fertilizer plans. The ammonia window closes once corn is planted, with U.S. farmers switching to urea or urea-ammonium-nitrate (UAN) in 2Q. UAN is trading at a record premium to urea of 28 cents a pound in the Corn Belt, 25 cents above normal. Spreads at that level typically correct within a few weeks, suggesting UAN prices could fall ahead of the main consumption period. U.S. farmers make nitrogen-purchasing decisions based on their crop mix, weather and relative nutrient prices. The U.S. is the largest global UAN region and consumes about 15 million of the market’s 26 million metric tons, primarily in 2Q.

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