Global Ag News for Feb 18.22

TODAY – COMMITMENTS OF TRADERS

Wheat prices overnight are down 3 3/4 in SRW, down 1 3/4 in HRW, up 3/4 in HRS; Corn is down 2 1/4; Soybeans up 5 1/4; Soymeal up $0.18; Soyoil down 0.18.

For the week so far wheat prices are down 2 3/4 in SRW, down 1 in HRW, up 1/2 in HRS; Corn is down 3 1/2; Soybeans up 15; Soymeal down $0.46; Soyoil up 1.05. For the month to date wheat prices are up 34 3/4 in SRW, up 41 3/4 in HRW, up 55 1/4 in HRS; Corn is up 22 1/2; Soybeans up 106; Soymeal up $32.30; Soyoil up 1.89.

Year-To-Date nearby futures are up 3% in SRW, up 3% in HRW, down -2% in HRS; Corn is up 9%; Soybeans up 20%; Soymeal up 10%; Soyoil up 18%.

Chinese Ag futures (MAY 22) Soybeans down 39 yuan; Soymeal up 65; Soyoil up 102; Palm oil up 210; Corn up 6 — Malaysian palm oil prices overnight were up 32 ringgit (+0.58%) at 5539.

There were changes in registrations (-22 Corn). Registration total: 1,900 SRW Wheat contracts; 17 Oats; 28 Corn; 146 Soybeans; 137 Soyoil; 0 Soymeal; 92 HRW Wheat.

Preliminary changes in futures Open Interest as of February 17 were: SRW Wheat down 3,485 contracts, HRW Wheat down 1,109, Corn down 2,192, Soybeans down 7,299, Soymeal up 1,406, Soyoil down 6,088.

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

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

The player sheet for Feb. 17 had funds: net buyers of 10,000 contracts of  SRW wheat, buyers of 1,000 corn, buyers of 1,500 soybeans, buyers of 500 soymeal, and  sellers of 1,750 soyoil.

TENDERS

• SOYBEAN PURCHASE: U.S. Exporters sold 120,000 tonnes of soybeans for delivery to unknown destinations during the 2021/2022 marketing year, the U.S. Department of Agriculture said.
• WHEAT PURCHASE: Algeria’s state grains agency OAIC purchased around 700,000 tonnes of optional-origin milling wheat in an international tender
• WHEAT PURCHASE: Egypt’s state grains buyer, the General Authority for Supply Commodities, bought 180,000 tonnes of Romanian wheat in an international tender for shipment April 1-10.
• WHEAT PURCHASE: Algeria’s state grains agency OAIC purchased at least 120,000 tonnes of optional-origin milling wheat in an international tender which closed on Wednesday
• WHEAT PURCHASE: Japan’s Ministry of Agriculture, Forestry and Fisheries bought a total of 54,692 tonnes of food-quality wheat from the United States in regular tenders.
• FEED WHEAT PURCHASE: An importer group in the Philippines bought around 45,000 tonnes of animal feed wheat from Australia in an international tender for the same volume which closed this week
• CORN, BARLEY, SOYMEAL PURCHASE: Iranian state-owned animal feed importer SLAL is believed to have purchased animal feed corn, feed barley and soymeal in an international tender which closed on Wednesday, European traders said on Friday. The volume bought was unclear but initial trader estimates were purchases of about 120,000 tonnes of feed barley, 120,000 tonnes of feed corn and 180,000 tonnes of soymeal.

PENDING TENDERS

• 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.
• WHEAT TENDER: The Taiwan Flour Millers’ Association has issued an international tender to purchase 54,920 tonnes of grade 1 milling wheat to be sourced from the United States
• BARLEY TENDER: Turkey’s state grain board TMO has issued an international tender to purchase an estimated 255,000 tonnes of animal feed barley
• BARLEY TENDER: Jordan’s state grains buyer has issued a new international tender to purchase 120,000 tonnes of animal feed barley
• WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy 120,000 tonnes of milling wheat sourced from optional origins
• SUNFLOWER OIL TENDER: Turkey’s state grain board TMO has issued an international tender to purchase and import about 6,000 tonnes of crude sunflower oil
• RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 72,200 tonnes of rice to be sourced from the United States and Vietnam

Argentine Soybean, Corn Estimates Feb. 17: Exchange

The Buenos Aires Grain Exchange releases weekly report on website.

2021-22 Production estimates maintained for both corn and soybean crops

• Corn harvest is 1.7% complete
• The following table compares most current data to previous week and last year’s crop:

Argentina Corn That Was Doing Best Now Threatened by Drought Too

Argentina’s late corn crop, which has avoided the worst of a Southern Cone drought, could suffer as water reserves tighten, the Buenos Aires Grain Exchange says in a weekly report.

• 89% of the late crop is in fair-to-excellent condition
• NOTE: Farmers planted more late corn this season as a hedge against the drought, with 53% of plantings categorized as “late”
• NOTE: Moderate-to-heavy rains are seen for Argentina’s key “zona nucleo” growing area over the next week, according to maps in a separate exchange weather report
• The entire zona nucleo will get at 10-25mm in the Feb. 17-23 period (0.4-1 inch), with many farms receiving 25-75mm

Louis Dreyfus Says Indiana Plant Open for Soybean Deliveries

Louis Dreyfus Company soybean plant in Claypool, Indiana, has reopened for deliveries after the facility caught fire Feb. 15, a company representative confirmed in an email to Bloomberg.

World’s Soybean Appetite to Shrink for First Time in Decade

• IGC sees consumption falling 1.1% lower in current season
• Drought has gripped South American producers this year

As commodity prices charge higher, at least one market is showing there are limits to demand.

Soybean consumption will edge 1.1% lower in the current season, the first drop in a decade, the London-based International Grains Council forecast Thursday. Drought has gripped soybean heavyweights in South America, shrinking crop prospects and propelling prices 19% higher this year. That’s curbing reserves and will herald “some demand rationing,” IGC said.

IGC said consumption of soybeans — used in livestock feed, cooking oil and biodiesel — would fall in Brazil and Argentina, while increasing in the U.S.

Shortages have gripped raw materials from crops to metals and energy, with the head of commodities research at Goldman Sachs Group Inc. dubbing it a “molecule crisis.” Strong energy demand has outpaced supply, metals stockpiles are shrinking and adverse weather has capped crop output. That’s pushed the Bloomberg Commodity Spot Index to an all-time high.

Grains consumption is still expected to rise this season, drawing down stockpiles for a fifth year, IGC said.

IGC Slashes World Soy Reserves Outlook 17% on South America

World soybean stockpiles in the 2021-22 season are now seen at 43m tons, down from a January estimate for 52m tons, the London-based International Grains Council said Thursday in a report.

• Estimate for production falls to 353m tons, down 15m tons, on “dwindling yield potential in South America”
• Amid smaller supply, consumption will fall for the first time in a decade
  • Tighter inventory and high prices to ration some demand
• Global grain inventory cut to 596m tons, from 601m tons seen in January
  • That would mark a fifth successive annual drawdown
  • Corn inventory est. cut to 281m tons, from 287m tons
  • Wheat reserves est. rises to 278m tons, from 276m tons

FOR 2022-23 SEASON:

• Global soybean acreage seen rising 2% y/y
• Corn and barley acreage seen about flat y/y
  • “With high input costs complicating calculations about the relative profitability of spring crops, forecasts will be kept under close review in the months ahead”
• World wheat production and consumption expected to be a record high
  • Stockpiles could edge higher y/y, but will remain tight in key exporters

India makes record U.S. soyoil purchases as drought parches South America

• Traders sign deals to import 100,000 T of U.S. soyoil
• Drought hits soy crop in key suppliers Argentina, Brazil
• Indonesia’s export limits make palm oil expensive
• Russia-Ukraine tension makes sunoil supply uncertain
• India buys 30,000 T soyoil from Black Sea region

Indian traders have contracted to import a record 100,000 tonnes of soyoil from the United States because of limited supplies from drought-hit South America, at a time when prices of rival palm oil are scaling record highs, three dealers told Reuters.

The higher purchases from the United States are expected to support U.S. soy oil prices, which have climbed nearly 20% this year to close to their highest in a decade, fuelling worries about food inflation.

The world’s biggest edible oil importer traditionally buys soyoil from Argentina and Brazil, but lower bean output in these two leading exporters of the commodity forced New Delhi to turn to the United States, they said.

“Indian buyers have bought U.S soyoil vessels. Prices were attractive and supplies were not enough in South America,” said the India head of a global trading firm, who sought anonymity because of the company’s policy.

“Buying of another two vessels in the short term is possible.”

India usually gets two-thirds of its soyoil needs from Argentina, and the rest from Brazil.

But last season’s reduced soybean output has tightened soyoil reserves in Argentina, forcing Indian buyers to shop around for alternatives, such as sunoil from the Black Sea region.

“Sunflower oil is cheaper than palm and soyoil, but some buyers are sceptical about deliveries because of geopolitical tension (in Russia),” said Sandeep Bajoria, chief executive of Sunvin Group, a vegetable oil brokerage and consultancy firm.

Crude palm oil (CPO) is being offered at about $1,575 a tonne, including cost, insurance and freight (CIF), in India for March shipments, compared with $1,620 for crude soybean oil and $1,515 for crude sunflower oil, traders said.

Soyoil was cheaper than palm and sunflower oil last month, but the sudden jump in soyoil demand has lifted prices by 16% in a month to the highest in 14 years, traders said.

Most French Wheat in Good Condition as Winter Nears End: AgriMer

As much as 95% of France’s soft-wheat crop rated in good or very good condition as of Feb. 14, steady on a week earlier, FranceAgriMer datashowed on Friday.

• NOTE: The report is the first of the year from the crops office, following a hiatus for winter
• Winter-grain crops emerge from dormancy as temperatures warm
• Rains are picking up in France, following a dry start to year, Meteo France said Thursday
• Spring barley was 27% planted, versus 16% at this time last year

Brazil’s JBS scraps plan to buy remaining shares in Pilgrim’s Pride

Brazilian meatpacker JBS SA JBSS3.SA said on Thursday it withdrew a proposal to acquire the remaining shares of its U.S.-based subsidiary Pilgrim’s Pride PPC.O.

The company said in a securities filing it was unable to come to an agreement with Pilgrim’s Pride regarding the terms of the proposed transaction.

In August, JBS, the world’s largest meatpacker, announced its plan to acquire the remaining shares of Pilgrim’s Pride, aiming to delist the company. At the time, JBS owned 80.21% of the firm.

Russian Wheat Export Tax to Fall to $91/Ton Next Week

Russia’s wheat export customs duty will fall to $91/ton next week, from $92.80, according to the Agriculture Ministry’s website.

• NOTE: The rates are set weekly and take effect three working days after publication
• NOTE: Russia started the floating tax from June 2, with a $28.10/ton levy

BPC Says Force Majeure Declared For Brazil Potash: Valor

Belarusian Potash Company (BPC), the commercial arm of the Belarusian potash producer Belaruskali, sent a statement to Brazilian customers on Wednesday saying it won’t be able to meet contracts due to sanctions imposed on the nation by Europe and the U.S., according to the Brazilian newspaper Valor Economico.

• “BPC is doing what’s possible to find a solution to the supply disruption,” BPC said in Valor report
• NOTE: JSC Belaruskali informed BPC that “force majeure conditions were forced upon it after it could not find alternatives to railing product to the Lithuanian port of Klaipeda,” according to a note from CRU Group

Brazil total corn crop seen at record 113.05 mln T -Reuters poll

The average of forecasts in a Reuters poll with 14 analysts on Thursday projected a record corn output of 113.05 million tonnes for Brazil this season, driven by a rise in planted area and sowing of the cereal within the ideal window.

However, analysts warn of potential revisions as the La Niña effect poses a threat for farmers’ second corn in certain center south states.

If the projection is confirmed, it would represent a nearly 30% rise in production from the last cycle, when Brazil’s corn was hit by drought and frosts.

 Bayer rolls out short corn variety tolerant of weather extremes

Global farm chemicals and seeds maker Bayer will launch a corn variety in the United States next year that it says will better tolerate heavy winds associated with climate change, estimating future sales in North America as high as 1 billion euros.

The corn, which grows one-third shorter than current varieties, will be planted by 150 U.S. farmers in a commercial trial in 2023, then released to the broader market the following year, the company said at a media presentation on Thursday.

Short-stature corn is the latest crop variety bred to withstand increasingly volatile weather associated with climate change, joining a growing list that includes drought and heat tolerant corn and soybeans.

Bayer said initial plantings will be from traditionally bred seeds. Biotech traits and gene edited varieties will be rolled out in 2027 or later in North America and other geographies including Latin America, Asia and possibly Europe, with global sales expected to peak in the 2030s.

Bayer reported corn seeds and traits sales of 4.97 billion euros in 2020.

Bayer says the crop will also be easier to farm because shorter plants will allow for simpler mid-season applications of fertilizer, pesticides and other farm chemicals. The shorter plants will also make the crop more resilient in windy conditions such as the derecho that leveled millions of corn acres in Iowa in 2020.

The new variety also has the potential to capture and sequester more carbon in agricultural soils, which could generate additional income via environmental credits for growers participating in carbon farming programs.

Bayer Sees Opportunity in China GMO Seed Market, Executive Says

Bayer AG sees “a lot of opportunity” in the genetically modified organism (GMO) corn market in China, says Bob Reiter, head of research and development at the company’s crop science division.

However, GMO products that were made in China are likely to be approved for the domestic market first, Reiter says at virtual news briefing Thursday.

U.S. Barge Shipments of Grain Fell 27% Last Week: USDA

Shipments along the Mississippi, Illinois, Ohio and Arkansas rivers declined in the week ending Feb. 12 from the previous week, according to the USDA’s weekly grain transportation report.

• Barge shipments of corn fell 32% from the previous week
• Soybean shipments down 23% w/w