Global Ag News for May 6.22

TODAY – U.S. Barge Shipments of Grain Fell 12% Last Week

Wheat prices overnight are down 9 in SRW, down 12 1/4 in HRW, down 4 3/4 in HRS; Corn is down 9 1/4; Soybeans down 14 1/4; Soymeal down $0.11; Soyoil down 1.60.

For the week so far wheat prices are up 37 in SRW, up 55 1/4 in HRW, up 41 in HRS; Corn is down 24 1/2; Soybeans down 52 1/2; Soymeal down $1.50; Soyoil down 3.83. For the month to date wheat prices are up 41 3/4 in SRW, up 59 in HRW, up 39 in HRS; Corn is down 25 1/4; Soybeans down 52; Soymeal down $13.50; Soyoil down 3.93.

Year-To-Date nearby futures are up 42% in SRW, up 45% in HRW, up 23% in HRS; Corn is up 34%; Soybeans up 25%; Soymeal up 4%; Soyoil up 54%.

Chinese Ag futures (SEP 22) Soybeans up 40 yuan; Soymeal up 3; Soyoil down 126; Palm oil down 196; Corn down 21 — Malaysian palm oil prices overnight were down 340 ringgit (-5.04%) at 6412.

There were changes in registrations (-48 SRW Wheat, -4 Oats). Registration total: 1,382 SRW Wheat contracts; 25 Oats; 0 Corn; 0 Soybeans; 98 Soyoil; 0 Soymeal; 154 HRW Wheat.

Preliminary changes in futures Open Interest as of May 5 were: SRW Wheat down 291 contracts, HRW Wheat down 214, Corn up 2,759, Soybeans up 1,945, Soymeal up 424, Soyoil up 748.

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

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

Western Midwest Forecast: Scattered showers Friday, mostly south. Mostly dry Saturday. Scattered showers Sunday. Isolated to scattered showers north and mostly dry to isolated showers south Monday. Temperatures near to below normal Friday, near normal Saturday, near to above normal Sunday, above normal Monday.

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

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

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

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

The player sheet for 5/5 had funds: net buyers of 13,000 contracts of  SRW wheat, buyers of 1,000 corn, buyers of 2,500 soybeans, buyers of 1,000 soymeal, and  sellers of 2,500 soyoil.

TENDERS

  • WHEAT AND BARLEY PURCHASE: Tunisia’s state grains agency is believed to have purchased about 100,000 tonnes of soft wheat and 75,000 tonnes of animal feed barley in an international tender which closed on Thursday
  • FEED BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase 120,000 tonnes of animal feed barley
  • CORN TENDER: South Korea’s Major Feedmill Group (MFG) has issued an international tender to purchase up to 140,000 tonnes of animal feed corn

India Says It Doesn’t See Case for Controls on Wheat Exports

India doesn’t see a case for controls on wheat exports, the Ministry of Consumer Affairs, Food and Public Distribution said in a statement Thursday.

Prime Minister Narendra Modi’s government is facilitating market access for export of wheat. Egypt and Turkey have approved imports of Indian wheat and European countries like Italy and Netherlands are also looking for imports from India, according to the statement.

Bloomberg News on Wednesday had reported India is considering restricting wheat exports as severe heat waves have damaged crops, exacerbating tight global supplies after the war in Ukraine sent food inflation soaring.

While a delegation from the Agricultural and Processed Food Products Export Development would be visiting “a number of countries to explore new markets,” the government added it is constantly monitoring the situation.

Ukraine Spring-Crop Plantings Reach 5.7M Hectares: Club

Ukrainian farmers seeded about 5.7m hectares of spring crops as of May 2, according to a webinar Thursday from the Ukrainian Agribusiness Club, citing government data.

  • That compares with about 8m hectares at the same time last year, and is up from about 3.6m hectares a week earlier
  • NOTE: Last season, about 16.9m hectares of spring crops were planted in total
  • Winter-wheat, barley and rapeseed crops are mostly in good condition, says Roman Slaston, CEO of the club

Surging Diesel Price Weighs on Grain Shipments

Highs seen in diesel-fuel prices are a headwind for rail shipments of grains, the USDA says. This week, the US-average price for diesel fuel hit roughly $5.51 a gallon, an all-time record. “In the Midwest–locus of the key grain-producing States–the diesel price rose to $5.329 per gallon, 34.2 cents per gallon and 224.4 cents above the same time last year,” the USDA says in its weekly Grain Transportation Report. “A surge in diesel prices directly impacts transportation costs.” The USDA says that the latest data for grain shipments via rail are down 9% from the same time last year. Grain futures on the CBOT rise, led by wheat.

Russian Ports Load Wheat For Iran, Tunisia, Turkey, Egypt

Ports also loaded corn for Israel, Turkey and Egypt in the week to May 4, according to data from Logistic OS.

  • Russia is still exporting grain to some of its biggest customers, even as shipping costs soar
  • Wheat was also loaded for Mozambique, Malawi and Kenya in the past week from the key ports of Novorossiysk and Kavkaz
  • The pace of wheat exports in the first half of April was in line with March

Argentine Soybean, Corn Estimates May 5: Exchange

The Buenos Aires Grain Exchange releases weekly report on website.

  • 2021-22 Production estimates maintained for both corn and soybean crops
  • Soybean harvest advances to 55% complete from 47%

Less Wheat Seen in Key Argentine Zone on Fertilizer Woes: Bourse

Argentina’s breadbasket of central-southern Buenos Aires and La Pampa provinces will see planting for the 2022-23 season fall 2% y/y to 1.61m hectares (3.97m acres), the Bahia Blanca Grain Exchange said in a report.

  • NOTE: The zone produces about a quarter of Argentina’s wheat
  • Farmers will shift to barley, whose planted area is expected to expand 3% y/y to 782,000 ha
  • Barley requires less fertilizing and is also harvested earlier, facilitating double-cropping: report
    • NOTE: Farmers in the zone are expected to tap high sunflower oil prices by expanding sun seed planting later in the year
  • Wheat planting in the region 4% complete; barley 8%

Saskatchewan Crop Planting Delayed Amid Cool, Stormy Weather

Province’s agriculture ministry says 1% of the crop was seeded as of May 2, compared with five-year average of 5%, according to a report.

  • “Cool temperatures and early spring snowstorms have delayed seeding for many producers”
  • Little precipitation was reported in the past week, which will allow fields to dry up enough for seeding to start
  • Topsoil moisture for cropland, hay and pasture is still less than ideal for seed germination and growth
  • Warm days with minimal wind are needed with good rain to improve pasture conditions and allow enough forage growth to support cattle
  • There have been reports of winterkill on winter wheat, fall rye and other fall seeded crops

Palm Oil Stockpiles in Malaysia Seen Climbing to Five-Month High

  • Inventories rose 12.9% in April from month earlier: survey
  • Indonesia’s ban on exports is shifting demand to Malaysia

Palm oil inventories in Malaysia probably jumped to the highest level in five months in April as production in the world’s second-largest supplier picked up pace and exports slumped.

Stockpiles climbed 12.9% from a month earlier to 1.66 million tons, according to the median of eight estimates in a Bloomberg survey of analysts, traders and plantation executives. That’s the first monthly increase since October.

Production of crude palm oil increased 5% to 1.48 million tons, also the highest in five months, while exports from the Southeast Asian nation tumbled 13% to 1.10 million tons, the survey showed.

Despite the rising stockpiles, palm oil prices are expected to stay supported by Indonesia’s ban on exports of crude palm oil and cooking oil, which will shift demand to neighboring Malaysia. Benchmark futures soared to a record close of 7,104 ringgit ($1,634) a ton last Friday, before tumbling Thursday when the market reopened after a three-day holiday. Prices are up about 44% this year.

“With the abrupt move by Indonesia to ban palm oil exports, robust demand is expected out of Malaysia in May,” said Paramalingam Supramaniam, director at Selangor-based broker Pelindung Bestari. “We are already witnessing less palm olein availability in May and assuming the ban is prolonged, the tightness will remain even until June.”

Meanwhile, stockpile levels in top importer India are “precarious,” which may prompt purchases from Malaysia, Paramalingam said. Investors are also keeping watch on dry conditions in some U.S. crop-growing areas, which may push up prices of palm’s closest rival soybean oil, he said.

More details from the survey:

  • Stockpile estimates were between 1.52 million tons and 1.75 million tons, while production ranged from 1.40 million to 1.55 million
  • Export forecasts were from 990,000 tons to 1.14 million tons
  • Imports seen little changed at 80,000 tons from 84,871 tons in March
  • Local consumption ranged from 250,000 tons to 320,000 tons.

Malaysia Ramps Up Effort to Regain Palm Oil Market Share in EU

Malaysia will take advantage of the political tension in Europe and ongoing shortage of global edible oils to regain market share in the region, according to Plantation Industries and Commodities Minister Zuraida Kamaruddin.

  • “The Black Sea tension will benefit Malaysian palm oil exports as many European countries with high dependency on sunflower oil have now shifted their demand to palm oil,” she said in a Friday statement
    • It’s a timely opportunity for palm oil to regain its confidence from European buyers given the publicity the commodity received in the past, she added
  • Global vegetable oil prices will likely remain high in 1H because of Indonesia’s ban on crude and refined palm oil
  • Minister has instructed government agencies such as the Malaysian Palm Oil Council and Malaysian Palm Oil Board to undertake “aggressive efforts” for the country’s palm oil to fill gaps in the global market

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

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.

Adverse weather and 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.

The world will need to increase production and ability to ship outside of the Black Sea area to make sure people have enough to eat, Will said on an earnings call Thursday. The marginal ton cost will remain very high for nitrogen.

“To us it’s a 2023 issue when these potential shortages can materialize,” Will said.

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.

The company expects Russian fertilizer producers to continue to export, but at reduced rates, executives said on the call.

Highlights from crop chemical and seed maker Corteva Inc.’s earnings:

  • Corteva expects more than 70% of Ukraine’s spring crop will be planted, company executives said on a quarterly call Thursday.
  • The company sees demand for seeds and crop chemicals to remain strong into 2023.
  • The company currently doesn’t see any switching between corn and soy plantings.
  • Brazil is seeing strong incentives to plant more soybean acres.

French Soft-Wheat Ratings Edge Lower Amid Drier Weather: AgriMer

The share of France’s soft-wheat crop rated in good or very good condition was 89% as of May 2, slightly below the prior week, according to the latest FranceAgriMer data.

  • Corn was 84% planted, versus 60% the prior week
  • Compares to 87% at this time last year

Russian Imports Sit Below Pre-War Levels

Russian fertilizer cargoes sailing to Brazil averaged 81,000 metric tons a week in April, about 9% below 2022 average pre-war levels of 89,000 tons. In the four weeks following Russia’s Feb. 24 invasion of Ukraine, Russian cargoes averaged 146,000 tons a week, as the anticipation of sanctions likely encouraged earlier delivery of contracted shipments.

New inflow is expected to slow this week, with three, as opposed to last week’s 10, Russian vessels (about 75,000 tons of fertilizer) en route to Brazil. Supply risk still looms for the rest of 2022.

Spain Books Most U.S. Sorghum in Three Years, USDA Report Shows

Spain booked about 86,900 metric tons of U.S. sorghum last week, the most since February 2019, according to the U.S. Department of Agriculture’s weekly export sales report.

  • Spain also was fourth-biggest buyer of U.S. corn for the week
    • Deals come as Russia’s invasion of Ukraine disrupted shipments and drought shrank harvests
  • NOTE: The U.S. Grains Council has been working to strengthen ties between American sorghum farmers and Spain
  • Spain previously has used the U.S. grain for feeding its hogs

FAO Cuts Outlook for Global 2022 Wheat Harvest on U.S. Drought

Global 2022 wheat production is now seen at 782m tons, below an April estimate for 784m tons, the UN’s Food and Agriculture Organization said Friday in a report.

  • That’s mostly because of persistent drought in the U.S., which is curbing winter-wheat yields
  • Outlook for Ukraine unchanged at “below-average level” because of the war
    • Conflict is likely to reduce the harvested area by 20% or more
  • Russia has largely favorable crop outlook because of good weather
  • Small production increases expected in India and Pakistan

FOR 2021-22 SEASON:

  • World grain stockpiles outlook raised to 856m tons, up 5.2m tons from April estimate
    • That’s mainly due to adjustments for India wheat inventories based on official estimates
    • Corn is also building up in Ukraine because of its suspended exports
  • Grains trade outlook raised to 473m tons, up 3.7m tons from April, on strong China corn demand
    • Wheat outlook also raised on better-than-expected Russian exports, with continued shipments in April mainly to Egypt, Iran and Turkey, despite freight and financial difficulties
  • Ukraine’s efforts to ship grain via railway to EU borders also spurred a 0.5m-ton increase to its corn export estimate

AMIS Boosts 2021-22 Wheat Trade Outlook on Better Russia Sales

Global wheat trade in the 2021-22 season is now seen at 191m tons, up from an April estimate for 189.8m tons, the Agricultural Market Information System said Thursday in a report.

  • That’s due to higher than expected shipments from Russia and strong global demand
    • Latest estimate is also slightly higher than the prior season’s 189.2m tons
  • Stockpiles estimate raised to 304.3m tons, from 295.6m tons, due to adjustments for India
  • Corn trade outlook lifted to 179.4m tons, from 177.8m tons, on better sales from Argentina and robust China purchases
    • Stockpiles cut to 302.9m tons, from 306.3m tons
  • Soybean trade outlook cut to 155.7m tons, from 157.1m tons, on smaller Brazil and Paraguay shipments
    • Stockpile estimate left unchanged
  • “Due to the tightness in global stocks and the uncertainty caused by the conflict in Ukraine, price volatility is likely to remain high this year,” the report said
  • “Of increasing concern are export restrictions, which further exacerbate price volatility and jeopardize global supplies”

Data May Signal Lower Pricing Into Week’s End

Phosphate prices in Brazil dropped after 25,000 metric tons of Chinese supply were negotiated at $1,150/mt cost and freight (CFR), $100/mt below last week’s low offers. The high offer remained at $1,300/mt since export restrictions limit access to Chinese volume, widening the lower end of the range. Potash prices have weakened as small distributors and retailers offer flexible pricing to get rid of inventory, whereas larger producers keep prices high to account for persistent supply disruptions. Urea prices are $760-$900/mt CFR, a drop in the low from $815/mt CFR, reflecting anticipation for low demand and high supply, while awaiting the finalized terms of India’s tender.

U.S. Grain Movement by Rail Fell 1.7% Week Ended April 27

Dry weather to boost Argentina soybean harvest in coming days: BA grains exchange

Most of Argentina’s farming areas will have little to no rainfall over the next seven days, the Buenos Aires Grains Exchange (BdeC) said on Thursday, which will help speed up the harvest of the 2021/22 soybean crop that has a production estimate of 42 million tonnes.

Argentina is the world’s leading exporter of soybean oil and meal, and the South American country’s producers are currently in the process of harvesting the oilseed.

“Most of the Argentine farming areas, a large part of the Paraguayan farming area and the Uruguayan farming area will see little to no rainfall (less than 10 millimeters), with pockets of moderate rainfall,” the BdeC said in its weekly weather report.

Dry conditions favor the work of combine harvesters in fields where the cereal is to be harvested.

U.S. wheat exports may remain sluggish amid production losses for second consecutive year – Refinitiv Commodities Research

Production losses and resulting shortage of supplies maintained U.S. wheat exports at multiple-year low levels. In April, the U.S. shipped only 1.54 million tons of wheat as of 28 April. Total exports in April were estimated at 1.65 million tons. Accumulated U.S. wheat shipments during June-April total 18.87 million tons. Taken with USDA’s export sales data, 2021/22 U.S. wheat exports (June/May) will likely be about 21.4 million tons, down 21% from last season. More importantly, severe drought in central/southern plains this spring and reduced spring plantings in the north cut 2022/23 U.S. wheat production to near last year’s low levels, according to Refinitiv Agriculture research’s update in late April. The production losses for the second consecutive year indicate U.S. wheat exports in the upcoming season will likely maintain sluggish. Together with production losses in Ukraine caused by the Russia-Ukraine war, global wheat supplies for the upcoming season (2022/23) will continue to be challenging, though expected bumper harvest in Russia and recovery of Canada wheat production may offset some of the production losses in the U.S. and Ukraine.

In spite of the developing war, Russia wheat exports rebounded in April to 2.31 million tons, up 22% from a month earlier, but down 6% from the 5-year average for the month. Accumulated shipments during July-April totaled 26.4 million tons, down near 21% from last season’s same period. Considering current shipping pace and sanctions on Russia, 2021/22 Russia wheat exports are projected at 31.78 million tons, about six million tons below last season.

On the other hand, Australia and Argentina continue to export a record amount of wheat amid bumper harvests last season. Since October 2021, Australia has shipped 13.7 million tons of wheat, well above the same period for previous season, according to Refinitiv trade flows. Considering tight supplies in the North America and disruptions of Black sea exports, ABARES’s production estimate of 36.3 million tons indicate Australia wheat exports in 2021/22 could reach 28.5 million tons.  Trade flows also tracked 9.4 million tons of Argentina wheat shipments during December-April, up 88% from last year’s same period. Argentina wheat supply and demand analysis indicates that 2021/22 Argentina wheat exports may be around 13.84 million tons, up 3 million tons from last season.

Dry weather in France will cause irreversible damage to crops -Expert

Dry, hot weather in France in the coming 10 days after several months of little rainfall will cause irreversible damage to grain crops in the European Union’s largest grains producer, a technical institute said on Thursday, adding to worries about tight global supplies.

European wheat markets have rallied in recent days on concerns about dry weather in France and some other major producing countries at a time when the war in Ukraine has reduced grain supplies.

Between Jan. 1 and May 10 France will have received about 30% less than the average precipitation of the past 20 years, making the soil sensitive to further dry weather, Jean-Charles Deswarte, agronomist at crop institute Arvalis told Reuters.

“Weather Forecaster Meteo France is announcing no rain and hot temperatures for the next 10 days. Plants will clearly not be able to face that,” he said.

“There will likely be a fall in the number of ears, surely be a fall in the number of grains per ear and, depending on the weather in the following days, (there’ll) probably be a fall in the grains’ weight,” he added.

By 1600 GMT benchmark September on Euronext milling wheat futures was up 11.50 euros per tonne, or 3%, at a contract high of 399.00 euros ($419.35) a tonne.

The expected fall in yields would come as French farmers cut back on wheat sowings ahead of this year’s harvest, with the ministry last month estimating the fall at 3.9% on 2021 and 0.7% below the average of the past five years.

Some rainfall in March and April provided relief for the crops in some parts of France but dried up the soil, Deswarte said, citing reports from local experts.

“Worse is to come. Apart from deep soils and some irrigated crops, it is to be feared that the damage will be irreversible. Even if it rains afterwards the plants will not be able to catch up,” he said.

He said the regions south of Paris would be most hit. In the bread basket in northern France, where the soil is deeper and crop development at a later stage, partial damage could potentially be saved if there is rain in late May or June.

“The real question is how long this dry weather will last,” he said.

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