Global Ag News for Oct 4.22

HEADLINES

Dutch to cull around 102,000 chickens to contain bird flu

The Netherlands is to cull around 102,000 chickens on a farm in the northern city of Kiel-Windeweer after the detection of a highly infectious strain of bird flu, the government said on Tuesday.

Fifteen cases of the highly lethal form of avian flu have been reported in the Netherlands in the past month, following dozens of cases earlier in the year.

France has also seen a resurgence in cases after experiencing its worst-ever bird flu wave earlier this year.

FUTURES & WEATHER

Wheat prices overnight are up 4 1/4 in SRW, up 9 in HRW, up 9 in HRS; Corn is up 2; Soybeans up 5 1/2; Soymeal up $0.24; Soyoil up 0.50.

For the week so far wheat prices are down 6 3/4 in SRW, up 4 1/2 in HRW, up 2 1/4 in HRS; Corn is up 4 1/4; Soybeans up 14 1/4; Soymeal up $0.42; Soyoil up 2.21.

For the month to date wheat prices are down 5 1/4 in SRW, up 6 1/4 in HRW, up 7 in HRS; Corn is up 5 1/4; Soybeans up 14 3/4; Soymeal up $4.70; Soyoil up 2.28.

Year-To-Date nearby futures are up 19% in SRW, up 24% in HRW, up 0% in HRS; Corn is up 15%; Soybeans up 4%; Soymeal down -1%; Soyoil up 19%. Malaysian palm oil prices overnight were up 199 ringgit (+5.81%) at 3625.

China’s markets remain closed for the week for holiday.

There were no changes in registrations. Registration total: 3,084 SRW Wheat contracts; 0 Oats; 0 Corn; 5 Soybeans; 46 Soyoil; 222 Soymeal; 40 HRW Wheat.

Preliminary changes in futures Open Interest as of October 3 were: SRW Wheat down 360 contracts, HRW Wheat up 339, Corn up 200, Soybeans down 8,276, Soymeal down 1,812, Soyoil up 319.

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

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

Western Midwest Forecast: Isolated showers through Wednesday. Mostly dry Thursday-Friday. Temperatures above normal through Wednesday, near to below normal Thursday, below normal Friday.

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

Brazil Grains & Oilseeds Forecast: Recent showers have continued to provide good soil moisture for Brazil as planting increases. The daily wet season showers in central Brazil have started up, and another front is forecast to bring showers through the region later this week. Both bode well for continued corn and soybean planting and establishment.

Argentina Grains & Oilseeds Forecast: Dryness continues to create unfavorable conditions for developing wheat and corn planting in Argentina. Scattered showers will move through with a cold front Tuesday and Wednesday, but amounts are expected to be scattered and mostly light. The country is in desperate need of rain, but heavier amounts are not on the horizon.

The player sheet for Oct. 3 had funds: net sellers of 2,000 contracts of SRW wheat, buyers of 1,500 corn, sellers of 4,000 soybeans, buyers of 2,500 soymeal, and  buyers of 4,500 soyoil.

TENDERS

• SOYBEAN SALE: The U.S. Department of Agriculture confirmed private sales of 110,000 tonnes of U.S. soybeans for shipment to unknown destinations in the 2022/23 marketing year.
• BARLEY TENDER: Turkey’s state grain board TMO has issued an international tender to purchase and import a total of 495,000 tonnes of animal feed barley, European traders said. The deadline for submission of price offers in the tender is Oct. 11, they said.
• VEGOIL TENDER: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), said on Saturday it was seeking vegetable oils in an international purchasing tender for arrival Nov. 25-Dec. 10. The deadline for offers is Oct. 4.

PENDING TENDERS

• WHEAT TENDER: Jordan’s trade ministry is seeking 120,000 tonnes of wheat shipped in March and April in an international tender closing Sept. 27, a government source said.
• WHEAT TENDER: The World Food Programme, a United Nations agency, has issued an international tender to purchase about 100,000 tonnes of milling wheat, European traders said. The deadline for submission of price offers in the tender is Sept. 28 with an award expected on Sept. 30.
• WHEAT TENDER: Jordan is seeking 120,000 tonnes of wheat in an international purchasing tender with a deadline for offers on Oct. 4, a government source told Reuters.
• BARLEY TENDER: Jordan is seeking 120,000 tonnes of barley in an international purchasing tender with a deadline for offers on Oct. 5, a government source told Reuters.
• WHEAT TENDER: Iraq’s state grains buyer has issued tenders to buy a nominal 50,000 tonnes of milling wheat, European traders said. The deadline for submission of price offers in the tenders is Oct. 10. The wheat can be sourced from optional origins but Russian wheat cannot be offered, they said.

TODAY

USDA CROP PROGRESS: Corn Conditions 52% G/E, Soybeans 55%

Highlights from the report:

• Corn harvest 20% vs 12% last week, and 27% a year ago
• Corn 52% G/E vs 52% last week, and 59% a year ago
• Corn dented 96% vs 92% last week, and 100% a year ago
• Corn mature 75% vs 58% last week, and 86% a year ago
• Soybeans 55% G/E vs 55% last week, and 58% a year ago
• Soybean drop leaves 81% vs 63% last week, and 84% a year ago
• Soybeans harvested 22% vs 8% last week, and 31% a year ago
• Winter wheat planted 40% vs 31% last week, and 45% a year ago
• Winter wheat emerged 15% vs 9% last week, and 18% a year ago
• Cotton 31% G/E vs 31% last week, and 62% a year ago
• Cotton harvested 22% vs 15% last week, and 13% a year ago
• Sorghum 20% G/E vs 22% last week, and 56% a year ago

US Inspected 662k Tons of Corn for Export, 575k of Soybean

In week ending Sept. 29, according to the USDA’s weekly inspections report.

• Soybeans: 575k tons vs 291k the previous wk, 850k a yr ago
• Corn: 662k tons vs 550k the previous wk, 942k a yr ago
• Wheat: 668k tons vs 589k the previous wk, 616k a yr ago

US Corn, Soybean, Wheat Inspections by Country: Sept. 29

Following is a summary of USDA inspections for week ending Sept. 29 of corn, soybeans and wheat for export, from the Grain Inspection, Packers and Stockyards Administration, known as GIPSA.

• Soybeans for Germany-bound shipments made up 119k tons of the 575k total inspected
• China was the top destination for corn inspections, Philippines led in wheat

US Corn Used for Ethanol at 432.3M Bu in August

The following is a summary of US corn consumption for fuel and other products, according to the USDA.

• Corn for ethanol was 3.7% higher than in August 2021
• DDGS production rose to 1.868m tons

US Soybean Crushings at 175M Bushels in August: USDA

USDA releases monthly oilseed report on website.

• Crushing 4% higher than same period last year
• Crude oil production 5.1% higher than same period last year
• Crude and once-refined oil stocks down 3.7% y/y

Brazil September Agriculture Exports by Volume: MDIC

Following is a summary of key Brazilian agriculture and mining exports by volume, from the Brazilian Trade Ministry.

• Corn exports rose 138% in September from a year ago
• Soy meal exports rose 46% y/y

Brazil 2022/23 Soy Planting 4.5% Done as of Sept. 30: Safras

This compares with 4.0% a year ago and 3.1% in a 5-year average, according to a report from consulting firm Safras & Mercado.

• Brazilian soy producers are expected to cultivate 42.9m hectares in 2022/23, the largest area in history, growing 2.6% over the total planted last year, of 41.8m, Safras said
• The initial forecast is for a harvest of 151.5m tons, 20.3% higher than the 125.9m tons harvested this year

Ukraine Farmers Plant 26% of Winter-Grain Area So Far: Ministry

Ukrainian farmers planted 1.2m ha with winter grains as of Oct. 3, the Agriculture Ministry said on its website.

• That’s 26% of the projected area. The area so far includes:
  • 1.1m ha of wheat, or 27% of the planned area
  • 96,000 ha of barley, or 14% of the projected areas
• Winter rapeseed planting is complete, with 989k ha sown

Ukraine Grain-Corridor Exports Near 6M Tons, UN Data Show

Almost 6 million tons of grain and foodstuffs have been shipped from Ukraine’s Black Sea ports through an export corridor that opened in early August, according to the latest lineup posted by the United Nations.

• Of the total, approximately 727,569 tons were cleared to sail to their final destination after inspection at Istanbul in the week to Sept. 30
  • Compares with about 703,978 tons the prior week
• NOTE: Additional ships have been authorized to depart in recent days; final destinations of cargoes may change
• NOTE: The agreement that formed the corridor was signed in late July and is valid for an initial 120 days
• Some Ukrainian ports remain blocked by Russia’s invasion. The nation’s total grain exports for the 2022-23 season are running 40% below last year, government data show

Ukraine Grain-Storage Crunch Could Ease If Corridor Lasts: UAC

Ukraine’s 2022 grain and oilseed harvest is expected to total about 70m tons and the country currently has capacity to store 50m tons, taking into account silos destroyed or blocked by the war, Kyiv-based consultant UkrAgroConsult said in a note.

• As of late September, elevators were still carrying 15m tons of crops from the prior season
• The ongoing harvest is gradually aggravating the shortage of space
• However, rapid exports in the coming months could reduce the capacity strain if the Ukraine crop-shipment corridor is extended beyond November
• International partners have also supplied Ukraine with plastic bags for temporary grain storage

Argentina FX Devaluation Spurred Trade of 16.1m Tons of Soybeans

A four-week currency devaluation that expired on Sept. 30 spurred farmers to trade 16.1m metric tons of soybeans, according to the Buenos Aires Grain Exchange.

• New sales in the period accounted for 11.5m tons
• Farmers completed transactions on delayed-price contracts for another 4.6m tons
• NOTE: 16.1m tons is the equivalent of 37% of the entire 2022 harvest

Malaysia Sept. 1-30 Palm Oil Exports to China 266,545 Tons: SGS

Following is a table of Malaysia’s palm oil export figures, according to estimates by independent cargo surveyor SGS Malaysia Sdn.

• China imported 266,545 tons; +69.6% m/m
• EU imported 231,682 tons; -32.4% m/m
• India imported 180,300 tons; -14.5% m/m

Indonesia Plans to Extend Palm Oil Export Levy Waiver to Yearend

Govt sees no need to collect levies, which is mostly used to subsidize biodiesel, as palm oil prices are currently lower than that of gasoil, says Chief Economics Minister Airlangga Hartarto in Jakarta on Tuesday.

• Govt to keep monitoring implementation of Domestic Market Obligation policy for palm oil: Hartarto

India’s Sept palm oil imports jump to 1-yr high of 1.2 mln T-dealers

India’s imports of palm oil jumped in September to their highest in a year, boosted by strong demand for the tropical oil ahead of the festival season and a steep discount to rival oils, six dealers told Reuters on Tuesday.

Greater buying could help top producer Indonesia cut swelling inventories and support benchmark Malaysian palm oil prices, which have nearly halved from this year’s record highs.

The September imports jumped 21% from a month ago to 1.2 million tonnes, the highest since September last year, the average estimate from six dealers with trading firms showed.

“Palm oil was much cheaper than other edible oils,” said Rajesh Patel, managing partner at GGN Research. “It was natural for refiners to increase buying.”

Palm oil is nearly $300 cheaper than rival soyoil for September shipments as Indonesia was trying to reduce its stockpile, dealers said.

Even in October, India’s palm oil imports will stay robust, at about a million tonnes, as its steep discount persists and festivals fuel demand strong, a Mumbai-based dealer with a global trading firm said.

Crude palm oil is being offered at $855 a tonne, including cost, insurance and freight (CIF) in India for October shipments, versus $1,207 for crude soyoil, the dealers said.

The Solvent Extractors’ Association of India, a trade body based in Mumbai, is likely to publish its September import data in the middle of October.

Soyoil imports in September rose 10% from a month ago to 270,000 tonnes, while those of sunflower oil jumped 22% to 165,000 tonnes, the dealers said.

Sunflower oil imports were rising as its premium over rival soyoil has narrowed after supplies from top exporter Ukraine resumed since August through a U.N.-brokered corridor, said Sandeep Bajoria, chief executive of leading broker Sunvin Group.

India buys palm oil mainly from Indonesia, Malaysia and Thailand, while it imports soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine.

WHEAT/CEPEA: Rains reduce wheat harvesting and limit price drops in BR

Recent rains in southern Brazil and in São Paulo have hampered the harvesting of wheat crops. Thus, supply decreased, and the regional prices increased slightly in late September. Valuations were also linked to price rises abroad and the dollar appreciation against the Real.

Cepea surveys show that, between September 23 and 30, the prices paid to wheat farmers (over-the-counter market) rose by 0.2% in Paraná and by 1.42% in Rio Grande do Sul; on the other hand, in Santa Catarina, values dropped by a slight 0.22%. In the wholesale market (deals between processors), quotations increased by 0.52% in SC, 0.79% in PR and 1.31% in São Paulo, while in RS, quotations decreased by 1.03%.

The recent price rises constrained the monthly devaluation in September – the average price last month was the lowest since February. Between August and September, values decreased by 12% in PR, 10.1% in RS, 9.3% in SC and 11.3% in SP.

It is important to highlight that, according to data from Cepea, the monthly average price in RS in September was nearly 7 Reais/ton higher than that in PR. In RS, the remaining of the 2021/22 crop is being sold, while in PR, sales of the new crop have increased.

CROPS – Of the output expected in Brazil, 18.7% have been harvested, according to data from Conab, a weekly progress of 4.4 percentage points.

Vietnam Sees 2022 Farm Exports at $50B vs $48.6B Y/Y

This year’s farm exports seen reaching $50b after shipments grew 15.2% y/y to estimated $40.8b in Jan.-Sept., government website reports, citing agriculture deputy minister Phung Duc Tien during a briefing on Monday.

• Tien sees difficulties remain in last quarter due to decline in orders and purchasing power in overseas markets, saying ministry will focus on boosting new measures to reach the exports goal

Fertilizer Production Could Fall 250K Metric Tons: Mosaic

• Company saw ‘modest’ damage to facilities during Hurricane Ian
• Repairs are expected to take a week or two, company says

Mosaic Co. sees phosphate fertilizer production falling by as much as 250,000 metric tons in the wake of Hurricane Ian.

Flooding and winds “caused modest damage” to the company’s facilities and supporting infrastructure, according to a Monday statement. The company’s estimated fertilizer production drop will be roughly split between the third and fourth quarters of 2022. Repairs should be completed within one to two weeks.

The timing of shipments will also be impacted, the company said. Port and rail closures delayed late third-quarter shipments to October. The company expects phosphate sales volumes in the third quarter to total 1.6 million to 1.65 million tons. The company will likely see a revenue hit of between $140 million and $200 million, Alexis Maxwell, an analyst at Bloomberg Intelligence, said.

Mosaic owns more than half of the 15.9 million tons of production capacity for diammonium phosphate and monoammonium phosphate — commonly known as DAP and MAP — in the US, with the bulk of that in Florida, according to Bloomberg Intelligence data.

The company has resumed loading fertilizer in Tampa, Florida, after Hurricane Ian’s powerful winds and heavy rain interrupted operations, according to a person familiar with the matter.

The Basic Challenger has returned to Mosaic’s terminal in Gibsonton, Florida, after leaving before Hurricane Ian.

The ship Basic Challenger has returned to Mosaic’s terminal in Gibsonton, Florida, on the east side of Tampa Bay and is loading fertilizer, said the person, who asked not to be identified because the information isn’t public. The ship moved away from Tampa as the storm approached and is now back at the terminal, ship-tracking data show.

Ian’s shift to make landfall further south along Florida’s coast spared the Tampa Bay area — home to much of America’s production of phosphate fertilizer — from the worst of the storm surge.

Mexico Halts Bean, White Corn Exports in Bid to Tame Inflation

• Government agreed pact with firms including Walmart, Chedraui
• Nation to ease tariffs for imports, Finance Minister says

Mexico aims to cut the cost of 24 basic goods by curbing food exports and extending a pact with major companies in the latest attempt to tame soaring consumer prices.

The government wants to cut prices for the key goods by 8% from their average peak, through February 2023, Finance Minister Rogelio Ramirez de la O said Monday.

The government will pause exports of goods including white corn, beans and sardines, as well as scrap metal used for food cans, Ramirez said. It will also suspend requirements such as tariffs and other import barriers for firms that agreed to the deal, he said.

The companies involved in the pact include supermarkets Wal-Mart de Mexico SAB, Grupo Comercial Chedraui SA and Organizacion Soriana SAB, as well as food producers such as Gruma SAB de CV, Industrias Bachoco SA and Sigma Alimentos SA, Ramirez said.

Dough for corn tortillas is mixed at a facility in San Andres Cholula, Puebla state, Mexico, on Tuesday, May 18, 2021. In Mexico, higher corn prices have contributed to a price increase for tortillas.

“Unlike the US where inflation is caused by demand, in Mexico it’s due to supply,” Ramirez told reporters. “For that reason, the best response is to produce more food and cut regulatory and logistical costs.”

The consumer protection agency will have the power to sanction any price abuses, Ramirez said. A type of corn flour used to make tortillas should drop 3% under the plan, he said.

Measures like reducing paperwork and pausing tariffs should help companies become more efficient and reduce costs, but the pact “is unlikely to lead to a marked improvement regarding food inflation,” Bradesco strategist Rodolfo Ramos wrote in a note, adding that minimum wage increases and higher social spending could add pressure on inflation.

Latin America’s second-largest economy saw inflation soar to a 22-year high of 8.7% in August, even as some regional peers including Brazil have begun to see price increases slow. Argentina has sometimes tried to curb inflation by restricting exports of beef and other products, with limited success.

Read more: Export Ban on Popular Argentine Beef Cuts Extended for Two Years

President Andres Manuel Lopez Obrador has argued that the agreements can’t be considered price controls because companies will decide the prices themselves. He said Monday that soaring inflation may temper the size of minimum wage hikes going forward.

At the same time, the central bank raised its benchmark interest rate to a record 9.25% last week, citing a worsening inflation outlook.

Meatpacker JBS to close U.S. plant-based foods business Planterra

The North American arm of Brazilian meatpacker JBS SA JBSS3.SA is closing its U.S. plant-based foods business Planterra Foods after about two years, the company said on Monday.

JBS will focus on its plant-based operations in Brazil and Europe, said Nikki Richardson, spokesperson for JBS USA. Those operations “continue to gain market share and expand their respective customer bases,” she said.

Colorado-based Planterra sold plant-based food under the Ozo brand and in July said it was “the official plant-based protein” of the Chicago Cubs baseball team.