Global Ag News for Feb 10.22

 TODAY – EXPORT SALES

US CPI day. Wheat prices overnight are up 5 3/4 in SRW, up 4 1/2 in HRW, up 6 3/4 in HRS; Corn is down 3/4; Soybeans up 7 3/4; Soymeal up $0.41; Soyoil up 0.31.

For the week so far wheat prices are up 27 1/2 in SRW, up 31 3/4 in HRW, up 47 1/2 in HRS; Corn is up 23 1/4; Soybeans up 49; Soymeal up $2.30; Soyoil down 0.94. For the month to date wheat prices are up 29 1/2 in SRW, up 37 in HRW, up 54 in HRS; Corn is up 20 3/4; Soybeans up 112; Soymeal up $47.80; Soyoil down 0.35.

Chinese Ag futures (MAY 22) Soybeans up 33 yuan ; Soymeal up 67; Soyoil up 88; Palm oil up 166; Corn up 6 — Malaysian palm oil prices overnight were down 59 ringgit (-1.05%) at 5535.

There were no changes in registrations. Registration total: 1,900 SRW Wheat contracts; 17 Oats; 50 Corn; 146 Soybeans; 137 Soyoil; 0 Soymeal; 92 HRW Wheat.

Preliminary changes in futures Open Interest as of February 9 were: SRW Wheat up 6,654 contracts, HRW Wheat down 320, Corn down 1,480, Soybeans up 20,599, Soymeal up 1,660, Soyoil down 255.

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

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

The player sheet for Feb. 9 had funds: net buyers of 4,000 contracts of  SRW wheat, buyers of 15,000 corn, buyers of 12,000 soybeans, buyers of 3,500 soymeal, and  buyers of 3,500 soyoil.

TENDERS

• SOYBEAN SALE: The U.S. Department of Agriculture on Wednesday reported private sales of 240,000 tonnes of U.S. soybeans to China. The sales were for shipment in the 2022/23 season.
• CORN SALE: South Korea’s Major Feedmill Group purchased around 68,000 tonnes of animal feed corn in an international tender which closed on Wednesday
• FEED WHEAT SALE: South Korea’s Feed Leaders Committee Wednesday purchased about 65,000 tonnes of animal feed wheat in a private deal without issuing an international tender
• CORN OFFERS REJECTED: The Korea Feed Association is believed to have rejected all offers and made no purchase in a tender on Wednesday to buy up to 68,000 tonnes of corn
• ANIMAL FEED BARLEY TENDER: Jordan’s state grains buyer has issued a new international tender to purchase 120,000 tonnes of animal feed barley
• FEED WHEAT, BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries said it will seek 80,000 tonnes of feed wheat and 100,000 tonnes of feed barley to be loaded by May 31 and arrive in Japan by July 28, via a simultaneous buy and sell auction that will be held on Feb. 16.
• SOYMEAL, BARLEY TENDER: Iranian state-owned animal feed importer SLAL has issued international tenders to purchase up to 60,000 tonnes of animal feed barley and 60,000 tonnes of soymeal
• CORN TENDER: Taiwan’s MFIG purchasing group bought about 65,000 tonnes of animal feed corn to expected to be sourced from Argentina in an international tender which closed on Thursday

PENDING TENDERS

• WHEAT, SOYMEAL TENDER: An importer group in the Philippines is tendering to purchase animal feed wheat and soymeal with total tonnage sought unclear. The deadline for submission of price offers in the tender is Feb. 11.
• WHEAT TENDER: Bangladesh’s state grains buyer has issued an international tender to purchase 50,000 tonnes of milling wheat. The deadline for submission of price offers is Feb. 14.
• MILLING WHEAT TENDER: A Syrian state grains agency has issued an international tender to purchase and import 200,000 tonnes of milling wheat

Planalytics Lowers Argentine Soy Crop Forecast to 2.77 Tons/Ha

Outlook for this year’s crop yield is down from previous forecast of 2.85 tons/hectare, according to data issued by Planalytics on Wednesday.

• The Argentine national yield has steadily fallen since the first forecast was issued in mid-December, and the latest data saw declines across three major growing regions
• Yield in key provinces versus previous Planalytics forecast (in tons/hectare):
  • Buenos Aires 2.68 vs 2.72
  • Santa Fe 3.03 vs 3.15
  • Cordoba 3.05 vs 3.16

Planalytics Lowers Brazil Soy Forecast to 3.29 Tons/Hectare

Outlook for this year’s soybean crop yield is down from previous forecast of 3.39 tons/hectare, according to data issued by Planalytics on Wednesday.

• The national yield has steadily fallen since the first forecast was issued in mid-December, and the latest data saw declines across all of Brazil’s major growing regions
• Yield in key states versus previous Planalytics forecast two weeks earlier (in tons/hectare):
  • Mato Grosso 3.49 vs 3.56
  • Parana 3.05 vs 3.12
  • Rio Grande do Sul 2.58 vs 2.89
  • Goias 3.63 vs 3.70

2021/22 ARGENTINA SOYBEAN PRODUCTION: 41.9 [38.4–45.0] MILLION TONS, DOWN 3% FROM LAST UPDATE

2021/22 Argentina soybean production is lowered by 3% to 41.9 [38.4–45.0] million tons, as dryness returns to the northern Pampas where crop conditions have been deteriorating. Our current estimate puts planted area at 16.3 million hectares, in line with the Bolsa de Cereales in Buenos Aires’ latest national-level projection, but slightly above 16.2 million hectares reported by Bolsa de Comercio in Rosario. In January’s WASDE (12 January), USDA placed Argentina soybean production at 46.5 million tons, down from its previous estimate of 49.5 million tons. Bolsa de Cereales in Buenos Aires and Bolsa de Comercio in Rosario currently forecast production at 42 and 40 million tons, respectively.

Much of the Pampas experienced a continuation of cool and wet conditions last week, though its intensity has greatly diminished. The torrential downpours that took place in northern Buenos Aires and Entre Ríos (as well as some areas of eastern Córdoba and southern Santa Fe) during late January have caused localized flood/water logging problems and largely left negative impacts on crop development. Dry weather is expected to return this week and remain dominant for the rest of February, warranting attention as crops go through the prime growth/blooming period (e.g. flowering, early reproductive stages) before the pod fill. The split soil moisture pattern (poorer in the north and healthier in the south) will likely continue to be the theme throughout the late developmental stages.

Reflecting this, vegetation densities derived from satellite imagery continue to coincide with the dry north-wet south pattern. They remain far below historical median levels across nearly all major production regions in the northern Pampas (except in Tucumán) and at record low levels in Salta and Santiago del Estero, reflecting the drought concerns despite recent beneficial rainfall. On the other hand, the density levels remain above historical medians in most of the southern counterpart, including key producers such as Buenos Aires and Córdoba, showing a startling contrast. The latest ENSO outlook by the Refinitiv’s Weather Research team (02 February) indicates that key forecast indicators increasingly support a neutral negative state during March-May, much of Argentina’s harvest season. Largely moderate conditions are likely in most crop areas of the main Pampas as a result, which should bode well for harvest activities.

2021/22 PARAGUAY SOYBEAN PRODUCTION: 8.34 [7.65–8.72] MILLION TONS, DOWN 5% FROM LAST UPDATE

Record low vegetation density levels throughout key producing areas of the southeastern Oriental Region slash 2021/22 Paraguay soybean production by 5% to 8.34 [7.65–8.72] million tons, despite recent beneficial rains. Our median production estimate is below the USDA World Agricultural Outlook Board (WAOB)’s 8.5 million tons, which assumes national level area and yield at 3.2 million hectares and 2.66 tons per hectare (tph), respectively (vs. Refinitiv Ag Research’s 3.36 million hectares and 2.48 tph, respectively).

Malaysia Jan. Palm Oil Exports to India -41.1% M/m: Details

Malaysia’s palm oil exports to India fell 41.1% to 0.23 million tons in Jan. from a month earlier, the Malaysian Palm Oil Board posted on its website.

• Exports to India -41.1% m/m to 225,402 tons, +57.4% y/y
• Exports to China -48.9% m/m to 75,115 tons, -33.9% y/y
• Exports to EU -26.8% m/m to 120,992 tons, +24.3% y/y

Malaysia Feb. 1-10 Palm Oil Exports -4.98% M/m: Intertek

Malaysia’s palm oil exports fell 4.98% m/m during Feb. 1-10, according to Intertek Testing Services.

Malaysia Jan. Palm Stockpiles -3.9% M/m to 1.55M Tons: MPOB

Palm oil stockpiles in Malaysia, the world’s second-largest producer, fell 3.9% to 1.55 million tons in January from a month earlier, Malaysian Palm Oil Board says in statement today.

• Palm oil exports -18.7% m/m to 1.16m tons
• Imports -31.3% m/m to 70,596 tons
• Crude palm oil production -13.5% m/m to 1.25m tons

South Dakota Soybean Processors Plans to Build Plant in State

South Dakota Soybean Processors LLC plans to build a crush plant near Mitchell, South Dakota, amid increasing demand for vegetable oils, the company says in a Wednesday statement.

• Facility will have capacity to process 35m bushels of soybeans annually or the equivalent of 1m tons of hi-oilseed crops
• Plant would also process other oilseed crops such as sunflowers and camelina
• Operations expected to begin in 2025
• Company also operates plants in Volga and near Miller, South Dakota

France Cuts Soft-Wheat Area Est., Sees Plantings Down 4.3% Y/y

French farmers likely planted 6.7m hectares of all winter-grain crops for the 2022 season, down from a December outlook for 6.8m hectares, the agriculture ministry said Thursday on its website.

• That would be down 2.5% y/y, and 0.6% below the five-year average
• Soft-wheat area seen at 4.75m hectares, down from December est. for 4.92m hectares
  • That would be 4.3% lower y/y
  • “This decline affects all regions,” the ministry said
• Barley area seen at 1.25m hectares, versus 1.23m hectares
  • That would be 4.6% higher y/y
• Durum-wheat area seen at 277k hectares, versus 279k hectares
• Rapeseed area seen at 1.16m hectares, versus 1.1m hectares
  • That would be 18% higher y/y

India Wheat Exports Set for Record With Rare Surge in Shipments

India is making a rare appearance near the ranks of the world’s wheat-trade heavyweights this season.

The country is expected to ship a record 7 million tons in the 2021-22 year, the U.S. Department of Agriculture forecast on Wednesday. That’s more than double the prior season and will rank the nation as the world’s ninth-largest shipper.

India is one of the world’s biggest producers of the grain, but typically sells little abroad. This season, surging prices across major shippers and export restrictions in Russia helped boost the appeal of its supply, with cargoes making inroads in nearby markets like Bangladesh.

“India’s export pace continues to be robust, and its prices are competitive in Asian markets,” USDA said in its monthly world supply and demand report.

Canada Drought to Ease in Parts of Prairies as Soil Recovers

“We’ve seen some decent recovery in moisture supply thanks to snow this winter,” David Streit, senior forecaster at Commodity Weather Group said Wednesday by phone.

• Snow cover is near normal in most parts of the Prairies except for southern Alberta
• Average precipitation is expected in most growing areas between March and May though below-average temperatures may delay the start of planting, Streit said
• There is a risk dry conditions will persist in southern Alberta due to below-average winter snowfall and precipitation
• “We’re not talking about a huge portion of the crop area but probably 10% to 15% of the crop area is going to struggle with crop establishment if this continues to play out,” Streit said

Cameroon Stops Flour Deliveries After Spike in Wheat Prices

• Nation’s wheat importers lost $26 million in past three months
• Import-reliant regions are contending with rise in crop prices

Cameroon’s main flour-milling body has suspended flour deliveries after suffering losses from surging wheat prices.

The Cameroon Association of Millers, which represents 70% of the market in the central African nation, took the decision because government measures to mitigate the impact of the price hike haven’t worked, Secretary General Alfred Momo Ebongue, said by telephone from the commercial hub, Douala.

Importers and flour companies there have lost 15 billion CFA ($26 million) in the past three months due to a continuous rise in raw materials, he said.

Japan weather bureau says 70% chance of La Nina ending during spring

Japan’s weather bureau said on Thursday the La Nina phenomenon was continuing and there was a 70% chance it would end during the Northern Hemisphere spring.

Last month, it had said there was an 80% chance that La Nina conditions would end in spring. (Full Story)

A La Nina weather event is characterised by unusually cold ocean temperatures in the equatorial Pacific Ocean region and is also linked with floods and drought.

Pesticide Prices Are Rising, Hindering Farmers With More Costs

Farmers are going to be paying more for herbicides and pesticides as they grapple with higher costs for fertilizer, seeds and fuel.

Agriculture chemical company FMC Corp. said it’s raising prices to counter what Chief Executive Officer Mark Douglas called “significant” increased costs for making and distributing crop protection products. The move follows similar efforts announced last week by U.S. rival, Corteva Inc.

“Quite frankly, there’s not a lot of choice here,” Douglas said Wednesday during FMC’s quarterly earnings call.

Costs for materials used by the agricultural industry have risen during the last several months, putting strain on producers and raising concern for further inflation when food prices are already near record highs.

FMC shares rose as much as 7.6% in New York trading on Wednesday, its biggest intraday increase in three months. Corteva rose as much as 2.1% to reach a new record high of $51.41.

New China tariff probe among options considered by Biden -U.S. Chamber

The Biden administration is considering a new China tariff probe if current talks fail to persuade Beijing to follow through on its promised purchases of U.S. goods, energy and services, officials from the largest U.S. business lobbying group said on Wednesday.

The administration is also considering other options, including working more closely with U.S. allies to present a united front to Beijing in demanding a level playing field for international firms, Myron Brilliant, the U.S. Chamber of Commerce’s head of international affairs, told reporters.

U.S. trade data on Tuesday revealed a massive shortfall in China’s commitment to increase U.S. purchases under former U.S. president Donald Trump’s “Phase 1” trade deal implemented two years ago.

China met less than 60% of its purchasing goal, failing to make good on its promise to increase U.S. purchases by $200 billion above 2017 levels during 2020 and 2021 – a two-year period disrupted by the COVID-19 pandemic and supply chain bottlenecks.

Brilliant said the Chamber supports the Biden administration’s talks with Chinese officials to hold them to the Phase 1 commitments.

“But should those talks not succeed in meeting the terms of the agreement, then I do think there are vehicles by which the administration can consider taking further action,” Brilliant said.

“The administration is considering a range of options, and we’re not endorsing any of these options at this time, that could include obviously a 301 action and issues like that.”

The Trump administration used Section 301 of the Trade Act of 1974, a statute aimed at combating trade partners’ unfair practices, to launch tariffs on hundreds of billions of dollars in Chinese imports in 2018 and 2019.

A new Section 301 probe could take a year before any new tariffs or other trade actions are recommended.

Brilliant said that based on his consultations with the administration, any actions would not involve tariffs in the short term.

“They recognize that the tariffs in place are putting pressure on American companies and therefore American workers, and they need to address that piece, despite the challenges presented by China’s lack of enforcement of the Phase 1 deal,”

John Murphy, who directs trade policy advocacy for the Chamber, said that pressure was mounting from industry for a more robust tariff exclusion process for Chinese goods than the limited version proposed by USTR.

A spokesperson for the U.S. Trade Representative’s office could not immediately be reached for comment. In announcing her China trade strategy last October, top U.S. trade negotiator Katherine Tai did not rule out new tariff actions.

Brilliant said that any actions that the Biden administration takes should be done in consultation with the business community and with U.S. allies.

“Any action against China that isn’t done in a multilateral way, isn’t worked out with Europe and with our friends in Asia, will not be as productive,” he said.

Agtech Startup Nabs Two Patents For Gene Edited Corn, Soy Seeds

Agtech startup Inari is a step closer to developing less expensive drought and weed-resistant seeds.

A growing planet has farmers continually pushing for higher yields, and farmers say the GMO crops made famous by Monsanto Co. have helped. But many consumers dislike that technique, and it’s expensive to bring to market. Gene editing, which changes genes directly, promises a more palatable, cheaper method of achieving yield-boosting plants.

The Cambridge, Massachusetts-based company received two U.S. patents for gene-edited corn and soybean seed traits with insect and weed protection that’s similar to traditional GMOs.

“It’s not only about feeding the world, but it’s about also better for the planet as well as better for the farmers,” Chief Executive Officer Ponsi Trivisvavet said in an interview.

Inari has 15 more patents pending for seed technology. The company said it’s the first to receive patents for gene editing traits that are similar to those in GMO crops. The seeds will have the same functionality as GMOs currently on the market, Trivisvavet said.

The company was founded in 2016 has additional sites in Indiana and Belgium.

U.S. confirms highly pathogenic bird flu at Indiana turkey farm

The U.S. Department of Agriculture on Wednesday reported an outbreak of highly pathogenic avian flu in an Indiana turkey flock, the nation’s first case in a commercial poultry operation since 2020.

Cases of the disease, known as bird flu, can hurt the U.S. farm sector because poultry are killed and trading partners can limit imports from infected areas. China said on Monday it banned imports of poultry from Spain and Moldova due to outbreaks.

Bird flu does not present an immediate public health concern, the USDA said.

About 29,000 turkeys at the farm in Dubois County, Indiana, in the south of the state, are being culled to contain the outbreak, which was confirmed after 100 birds recently died, state officials said.

Indiana said the strain of the virus was H5N1 and that it was the state’s first case of highly pathogenic bird flu in commercial poultry since 2016, when 400,000 birds were killed. The H5N1 strain has also been found in wild birds along the U.S. East Coast and caused a wave of outbreaks in poultry across Europe and Asia. (Full Story)

The outbreak in Indiana is significant because it indicates the strain has entered a migratory pathway for birds called the Mississippi Flyway, said Jim Sumner, president of the USA Poultry & Egg Export Council, an industry group. The pathway includes major poultry-producing states such as Mississippi and Alabama.

The H5N1 strain “has been wreaking havoc on Asia and Europe,” Sumner said. “We were hoping we could avoid this but it’s apparently in the flyways.”

Sumner said China will likely ban imports of poultry products from Indiana for 90 days, while Mexico will likely limit shipments temporarily from Dubois County only.

Indiana is the third biggest U.S. turkey producing state, No. 1 in duck production and No. 2 in table eggs and egg-laying chickens, according to the state.

Officials quarantined the infected farm and said birds from the flock will not enter the food system. They are testing birds in the surrounding area for the disease.