Global Ag News for Feb 22.22

TODAY

Wheat prices overnight are up 22 3/4 in SRW, up 25 1/4 in HRW, up 15 1/2 in HRS; Corn is up 12 1/2; Soybeans up 23 3/4; Soymeal up $0.40; Soyoil up 1.89.

For the week so far wheat prices are up 25 1/2 in SRW, up 28 3/4 in HRW, up 18 1/2 in HRS; Corn is up 14 1/2; Soybeans up 26; Soymeal up $0.45; Soyoil up 1.93. For the month to date wheat prices are up 60 1/2 in SRW, up 81 in HRW, up 74 in HRS; Corn is up 40 3/4; Soybeans up 132; Soymeal up $32.70; Soyoil up 4.69.

Year-To-Date nearby futures are up 7% in SRW, up 8% in HRW, down -1% in HRS; Corn is up 13%; Soybeans up 23%; Soymeal up 10%; Soyoil up 24%.

Chinese Ag futures (MAY 22) Soybeans down 1 yuan ; Soymeal up 57; Soyoil up 94; Palm oil up 194; Corn up 1 — Malaysian palm oil prices overnight were up 165 ringgit (+2.91%) at 5840.

There were changes in registrations (-7 Oats, -78 Soybeans). Registration total: 1,900 SRW Wheat contracts; 10 Oats; 28 Corn; 68 Soybeans; 137 Soyoil; 0 Soymeal; 92 HRW Wheat.

Preliminary changes in futures Open Interest as of February 18 were: SRW Wheat down 10,325 contracts, HRW Wheat down 3,489, Corn down 14,287, Soybeans down 5,491, Soymeal down 5,383, Soyoil down 4,262.

Brazil Grains & Oilseeds Forecast: Rio Grande do Sul and Parana Forecast: Isolated showers through Tuesday. Temperatures near normal Friday-Saturday, above normal Sunday-Tuesday. Mato Grosso, MGDS and southern Goias Forecast: Scattered showers through Tuesday. Temperatures near normal through Tuesday.

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

The player sheet for Feb. 18 had funds: net sellers of 0 contracts of  SRW wheat, buyers of 5,000 corn, sellers of 3,000 soybeans, sellers of 1,000 soymeal, and  buyers of 2,000 soyoil.

TENDERS

• SOYBEAN SALE: Exporters sold 198,000 tonnes of soybeans for delivery to unknown destinations – 66,000 tonnes for the 2021/2022 marketing year and 132,000 tonnes for the 2022/2023 marketing year, the U.S. Department of Agriculture said.
• CORN, BARLEY, SOYMEAL SALE: Iranian state-owned animal feed importer SLAL purchased animal feed corn, feed barley and soymeal in an international tender
• WHEAT SALE: The Taiwan Flour Millers’ Association purchased an estimated 54,920 tonnes of milling wheat to be sourced from the United States in a tender
• BARLEY TENDER: Turkey’s state grain board TMO has started buying animal feed barley in an international tender on Tuesday with about 75,000 tonnes initially bough

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: Taiwan’s MFIG purchasing group has issued an international tender to buy up to 65,000 tonnes of animal feed corn which can be sourced from the United States, Brazil, Argentina or South Africa
• 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

Analyst Survey of U.S. 2022-23 Corn, Soybeans, Wheat and Cotton

The USDA is scheduled to announce its estimates at the annual outlook conference held Feb. 24-25

Argentina grains inspectors to hold 24-hour strike on Monday

Argentina’s grains inspectors will launch a 24-hour nationwide strike next Monday over unmet demands for bonus payments, the URGARA union said on Friday.

The union’s Secretary General Pablo Palacio said that there had been no offers made by the industry after months of meetings over demands for a 2021 bonus payment.

“If they do not make an offer worth listening to, the protests will spread since the situation is unsustainable,” Palacio said in the statement.

The union represents grain inspectors, technical workers who analyze the grain that is stored in stockpiles and loaded onto ships. The strike could impact grain shipments.

The South American country is the world’s top exporter of processed soybean oil and meal and the no. 2 exporter of corn.

MARS Sees Morocco, Algeria Wheat Yield Well Below Avg on Drought

Wheat yields in Morocco are estimated to fall 33% below the five-year average and those in Algeria could fall 41% as drought grips much of the Maghreb region, the EU’s Monitoring Agricultural Resources unit said in a report.

• Moroccan grains output could be further comprised if rains fail to arrive in the coming weeks
  • Satellites show delayed crop development and below-average biomass in most of the main grains region
• The start to Algeria’s growing season — November and December — was among the driest since the 1970s in most agricultural areas
  • Substantial rain needed to avoid “very negative season”
• Tunisia wheat yields seen 1.6% below average, crops in fair condition overall

Drought in Southern Europe May Hamper Yields This Season: MARS

Southern and southwest Mediterranean areas of Europe are facing drought due to “persistent” rain deficits, the EU’s Monitoring Agricultural Resources Unit says Monday in a report.

• Drier-than-usual conditions are likely to continue there for the coming months, potentially hampering yields
• Southern Portugal, Spain and France and northwest Italy are most seriously affected
  • In some parts of these regions, rainfall since Oct. 1 is among the lowest in records spanning to 1989
• Overall, winter crops and grasslands in the bulk of Europe remains in good condition
• Other areas including western France, the U.K., eastern Romania and southwest Ukraine have also lacked rains, but crops haven’t been harmed yet

Russian Wheat Exports Decline 24% Y/y So Far This Season: Agency

Russian wheat shipments for the 2021-22 season totaled 25.2m tons as of Feb. 17, down 24% from a year earlier, the Federal Center of Quality and Safety Assurance for Grain and Grain Products said on its website, citing inspections before exports.

• That means wheat exports totaled about 900k tons in the week to Feb. 17, compared with 400k tons in the previous week
• Exports of all grains are at 36.1m tons so far this season
  • Barley exports declined 34% y/y
  • Corn exports rose 24% y/y
• NOTE: Data are preliminary and include exports to the Eurasian Economic Union, which is a customs union of countries that includes Russia

Brazil 2021-22 Soy Harvest 33% Done as of Feb. 17: AgRural

Compares with 24% a week earlier and 15% a year before, according to data compiled by consulting firm AgRural.

• Dry and warm weather puts pressure on farms in the Southern region, while excess rainfall in Mato Gross and Minas Gerais states hurts the quality of the grains
  • AgRural to release a new 2021/22 soy output estimate in coming days
• Center-south’s 2nd corn planting was 53% complete as of Feb. 17, compared to 24% a year earlier
  • 2021/22 summer corn harvest is 29% complete in the Center-South vs 22% a year before

Paraguay Soy Crushers Plead for Duty-Free Imports to Stay Open

• Regional drought curbs local supplies for meal, oil exporters
• Trade group wants soy imports for first time to avoid closuresBy Ken Parks

Paraguay’s oilseed processors are lobbying the government to allow duty-free soybean imports for the first time in order to keep their mills running as a drought slashes local production.

Industry group Cappro, whose members include Archer-Daniels-Midland Co. and Cargill Inc., proposed in January to waive import duties on soy for processing in Paraguay, which would make it economically viable to buy from other South American producers such as Argentina and Brazil. The government and Cappro are scheduled to discuss the matter on Tuesday, according to the group’s general manager, Sandra Noguera. Deputy Industry Minister Ramiro Samaniego said a decision hasn’t been made yet.

Paraguay’s soy crushers shipped 1.9 million tons of soy meal and 562,000 tons of soy oil in 2021, a 3% share of global exports worth a combined $1.4 billion. Meal is used in livestock feed; oil is for cooking and biofuels. Plants would have to stop operations from June until the next harvest in the first quarter of 2023 if they can’t import beans, Cappro said in an emailed response to questions.

Argentine crops could keep losing yield until March due to drought – exchange

Argentina’s 2021/22 soybean and corn crops could see yields continue to decline in the weeks ahead with abundant rains only expected to arrive in mid-March to relieve a lengthy period of dry weather, the Buenos Aires grains exchange said on Monday.

Argentina is the world’s top exporter of soybean oil and meal, and the second largest for corn, but has seen harvest forecasts slashed after drought since late last year, impacted by the La Nina climate phenomenon for a second straight year.

“Given the double episode of ‘La Nina’ we’re going through, the return of the rains could be delayed until mid-March, causing significant yield losses,” the exchange said in a monthly weather report.

The grains exchange’s current harvest forecast is 42 million tonnes for soybeans and 51 million tonnes for corn, already cut sharply from previous forecasts.

The country’s core agricultural area “will see a partial return of rainfall, meaning large pockets where there is a water deficit will persist” in the coming weeks, the report said.

The grains exchange added it expects the climatic system will gradually normalize with the start of the southern hemisphere autumn at the end of March, although “it is very likely that the polar winds will return with force, reducing the entry of humidity” and producing frosts from May.

Russian Grain Exporters May See Short-Term Fall in Demand: Union

“In the short term, for 1-2 months, we could face problems selling grain for export,” due to escalating geopolitical risks, Eduard Zernin, head of the Russian Union of Grain Exporters, said.

• Zermin doesn’t see current situation to prevent obligations being fulfilled
• “Grain-buying countries have minimal loyalty, they are diversifying their supply from different sources”
• Any interruption in Russian grain shipments due to the West imposing sanctions “would be a problem, not so much for Russia as for other countries, both in terms of physical prices and availability”
• Lower demand for Russian grain exports would result in reduced domestic prices which would be good for local market

China sells 97% of wheat on offer at reserves auction – trade centre

China sold 508,089 tonnes of wheat or 96.64% of the total offer at an auction of state reserves held Feb. 16, the National Grain Trade Center said on its website on Monday.

The average price of the wheat sold was 2,689 yuan ($425.13) per tonne.

SOYBEAN/CEPEA: Harvesting steps up in BR, but liquidity is low

Cepea, February 18 – Lower rainfall in soybean-producing regions in Brazil has favored the progress of the harvesting this week. Still, liquidity has been lower, since sellers left the market and some purchasers have built stocks, aware of the scenario abroad – China, the number one destination for the Brazilian soybean, has signaled lower processing, which may result in cancelations of contracts and lower imports from Brazil. Agents believe that the Chinese demand for soybean may be redirected to the United States.

In this context, the gap between asking and bidding prices widened, constraining sales in the spot market. Agents consulted by Cepea reported that liquidity in the 2021/22 has been lower than that in the two previous seasons, which is common when prices are high.

Imea has confirmed this scenario – according to the Institute, by Feb. 7, 55.23% of the 2021/22 soybean crop from Mato Grosso had been sold, less than the 71.76% traded in the same period last season and below the 60% on the average of the last five years. On the other hand, the harvesting pace has been faster: 60.47% of the soybean crops in MT have been harvested, more than the 22.26% from the same period last season and higher than the average of the last five years (48%).

Farmers from São Paulo, Paraná and Minas Gerais reported that the volume sold in the current season has not even reached 40% of the expected output. This is due to the high number of contracts closed last season at lower prices than that observed later in the national spot market.

The harvesting of soybean crops has stepped up this week in southeastern, central-western and some areas in southern Brazil. The farmers from the region of Matopiba (which includes the states of MA, TO, PI and BA) have begun activities too. According to Conab, 25% of soybean crops had been harvested in Brazil by Feb. 12. Among the states, 60.1% of crops had been harvested in Mato Grosso, 15% in Goiás, 19% in Mato Grosso do Sul, 16% in Minas Gerais and in São Paulo, 15% in Paraná, 13% in Santa Catarina, 20% in Tocantins, 10% in Maranhão and 6% in Bahia.

PRICES – The dollar depreciation against the Real increased pressure on Brazilian soybean quotations. The American currency dropped by 1.1% between Feb. 10 and 17, to BRL 5.169 on Feb. 17. On Wednesday, 16, the US dollar closed at the lowest level since July 29, 2021, at BRL 5.128.

Between Feb. 10 and 17, the ESALQ/BM&FBovespa Index Paranaguá dropped by 1.6%, to BRL 195.11 (USD 37.75) per 60-kilo bag on Thursday, 17. The CEPEA/ESALQ Index Paraná for soybean decreased by 0.7%, to BRL 192 (USD 37.14)/60-kilo bag on Feb. 17. On the average of the regions surveyed by Cepea, prices dropped by 0.8% in the over-the-counter market (paid to farmers) and by 1.4% in the wholesale market (deals between processors).

On the other hand, domestic devaluations were limited by increases in the export premiums, which were boosted by the news about a fire at the largest soybean processing plant in the USA. This fact raised speculations about a possible reallocation of the demand for soybean by-products to Brazil.

CORN/CEPEA: Purchasers leave the spot market, and prices drop in most regions

Cepea, February 18 – Corn prices have faded in the Brazilian market this week, largely influenced by the disinterest of purchasers. In general, agents are waiting for a better-defined price scenario for the mid-term, which is expected to happen as the harvesting of the summer crop advances. Productivity estimates and the development of the second crop are supposed to influence quotations too.

So far, supply is expected to be lower in the Brazilian spot market in the short-term, due to low ending stocks and the failure of the first crop, which is already limiting devaluations. It is important to highlight that the current corn prices have been near the levels from the second semester of 2021, when unfavorable weather led farmers to reduce supply.

However, it is important to mention that the return of rains to southern Brazil and the progress of the corn harvesting in the central-western region have heartened farmers, who seem more optimistic about the outputs from the second and third crops. This scenario increased pressure on the future contracts for the second semester traded at B3.

On the other hand, in the spot market, the ESALQ/BM&FBovespa Index (Campinas, SP) dropped by 0.6% between Feb. 10 and 17, to BRL 96.51 (USD 18.67) per 60-kilo bag on Thursday, 17. On the average of the regions surveyed by Cepea, the prices paid to corn farmers (over-the-counter market) decreased by 0.9%; in the wholesale market (deals between processors), values decreased by 0.4%.

PORTS – Despite the valuations abroad, the low interest for the Brazilian corn (usual at this time of the year) is pressing down the quotations at ports, which have resumed being much lower than that in the interior of the country.

CROPS – This week, rainfall has been lower in central-western Brazil; in the southern and southeastern regions, rains have not been enough. In Paraná, 26% of the first crop of corn had been harvested by Feb. 14, according to Seab/Deral. As for the second crop, 29% have been sown in the state, against 8% in the 2020/21 season.

In Rio Grande do Sul, 54% of corn crops had been harvested by Feb.17, according to data from Emater/RS – productivity has been much lower than that initially forecast, by 53%, so far.

In Mato Grosso, sowing is in progress despite rainfall. According to data from Imea, 57.09% of corn crops have been sown in the state. In Mato Grosso do Sul, 13.2% of crops have been sown, according to Famasul. In São Paulo, Minas Gerais and Goiás, 11%, 9% and 10% of corn crops had been sown by Feb. 11, according to Conab. The national average is at 35.1%.

WHEAT/CEPEA: Farmers focus on the summer crop; volume exported is high

Cepea, February 21 – As wheat farmers are currently focused on the summer crop, and agents from mills seem to have stocks – at least until March –, wheat sales have been sporadic in the Brazilian spot market. On the other hand, exports have been high this month.

According to Secex, until the end of the second week of February, Brazil had exported 221.59 thousand tons of wheat, 82.6% more than the volume shipped in February last year (121.33 thousand tons).

As for wheat imports, Brazil has imported 214.04 thousand tons of the cereal this month, against 449.90 thousand tons in Feb/21, a reduction of 52.4%. Import values are at USD 280.7/ton FOB, on average, 12.8% higher than that in the same period last year (USD 248.8/ton).

It is important to highlight that agents from the wheat market are watching out for a possible conflict in the Black Sea region between Russia and Ukraine, two important wheat producing and exporting countries.

BRAZILIAN MARKET – Wheat prices are following opposite trends between the regions surveyed by Cepea in Brazil. Valuations have been influenced by the tensions between Russia and Ukraine and consequent price rises abroad, while price drops result from the dollar depreciation against the Real, which tends to favor imports from Argentina.

Data from Cepea show that, between February 11 and 18, the prices paid to wheat farmers rose by 0.55% in Paraná (PR) and by 0.39% in Rio Grande do Sul (RS) but decreased by 0.43% in Santa Catarina (SC). In the wholesale market (deals between processors), quotations increased by 0.63% in SC and by 0.21 in PR but dropped by 1.02% in RS and by 0.21% in São Paulo. The US dollar dropped by 1.67% in the last seven days, to BRL 5.138 on Friday, 18.

Based on data from Conab (Brazil’s National Company for Food Supply), between Feb. 7 and 11, the import parity price for the wheat from Argentina delivered to Paraná State was USD 313.12/ton. Considering the average of the US dollar in that period, at BRL 5.2481, the wheat imported was sold at BRL 1,643.29/ton, while for the Brazilian wheat traded in Paraná, the average was higher, at BRL 1,709.04/ton, according to data from Cepea. In Rio Grande do Sul, the import parity for the product from Argentina would be of USD 293.56/ton (BRL 1,540.61/ton), against BRL 1,613.64/ton on the average of the state surveyed by Cepea.

Edible-Oil Mills in India to Cut Rates to Help Cool Down Prices

• Vegetable oil prices surge 12%-34% in New Delhi in a year
• The move ahead of Holi in March to help consumers, group saysBy Pratik Parija

Refiners of edible oil in India, one of the world’s biggest consumers and importers, will cut retail prices for a third time in four months to cushion consumers from a surge in domestic rates.

Mills will reduce prices by 3 rupees (4 cents) to 5 rupees per kilogram immediately, according to the Solvent Extractors’ Association of India. The move assumes significance as the country celebrates Holi, a Hindu festival of colors, in March, when consumption of cooking oils generally surge.

Global prices of vegetable oils, used for everything from frying potato chips to making jalebis to cooking chicken tikka masala, have more than doubled in two years on supply constraints. The South Asian nation is the world’s biggest buyer of palm, soybean and sunflower oils.

Prices of vegetable oils, extracted mainly from rapeseed, sunflower, soybeans and oil palm, have increased between 12% and 34% from a year earlier in New Delhi. Rapeseed oil in the national capital has climbed to 201 rupees per kilogram from 150 rupees last year, according to official data.

Malaysia, India Discuss MOU on Workers for Palm Oil: Bernama

Malaysia discussed a memorandum of understanding with India for the supply of workers to the palm oil sector, Bernama reported, citing an interview with the Plantation Industries and Commodities Minister.

• Minister Zuraida Kamaruddin discussed making long-term arrangements for labor supply with India’s Minister of State for External Affairs V. Muraleedharan after arriving in the country Sunday for a four-day visit
• Malaysia will increase its palm oil output this year with the intake of more foreign workers following a labor shortage due to the pandemic
• Malaysia is planning to bring in 32,000 more foreign workers, which will include people from India, Bangladesh and Indonesia
• NOTE: Malaysia is the world’s second-biggest palm oil producer, India is the top importer

Malaysia Feb. 1-20 Palm Oil Exports to EU 259,347 Tons: SGS

• EU imported 259,347 tons; +98.5% m/m
• India imported 100,390 tons; -31.2% m/m
• China imported 55,800 tons; +47.1% m/m

China Says Will Boost Agricultural Development This Year

China will boost overall development of rural areas, according to guidelines by the Communist Party and State Council.

• Will raise minimum purchase prices for rice and wheat; stabilize subsidy policies for corn, soybean and rice
• Reiterates target for grain output of above 650m tons this year to ensure food security
• Will ensure adequate supplies of fertilizers and stabilize prices

China Bans Poultry Imports From Canada Over Bird Flu Concerns

China bans direct and indirect imports of poultry from Canada after the country reported a H5N1 bird flu case at a turkey farm on Feb. 5, according to China Customs.

• The ban is effective from Monday
• Separately, Hong Kong’s Food and Environmental Hygiene Department says it has suspended poultry imports from Italy’s Prato Province and Nonsan-si in South Korea due to H5N1 avian influenza outbreaks

Softs Trader Sucden Moves Into Grains, Oilseeds Amid Hot Market

• Company will build out business from desks in Singapore, Paris
• Wheat, corn, soybean futures all hit multi-year highs in 2021By Archie Hunter and Megan Durisin

French soft commodity trading house Sucden is starting a grains and oilseeds division with plans to build out a trading team in Singapore and Paris, the company said Monday in a notice on its website.

The company, one of the world’s top sugar traders, has hired Wladimir Blanckaert, who formerly ran a similar business for Louis Dreyfus Co. and Englehart Commodities Trading Partners, to head up the division on an acting basis, the company said.

Sucden, which already has a base in grains through production facilities in Russia, is making the move at a time when grain and oilseed markets have surged worldwide, with adverse weather crimping global harvests and inputs like fertilizer soaring. The recent geopolitical tensions over Ukraine have added to the volatility, with the Black Sea region a heavyweight in global grain and sunflower oil exports.

Chicago wheat, corn and soybean futures all touched multi-year highs in 2021 and markets have posted further gains at the start of this year. That’s brought the Bloomberg Agriculture Spot Index near a record.

The move is also the latest addition to Sucden’s broadening portfolio, after it acquired U.S.-based Coffee Americas in 2014 and Holland’s Nedcoffee in 2015. It also owns multi-asset brokerage Sucden Financial, which is a ring-dealing member of the London Metal Exchange.

India Is Set to See a Normal Monsoon This Year, Skymet Predicts

• Preliminary prediction suggests robust start to rainy season
• Chances of another La Nina weather pattern ruled out this yearBy Atul Prakash

India’s monsoon, which irrigates more than half of the country’s farmland and is critical for economic growth, is likely to be normal this year, according to private forecaster Skymet Weather Services Pvt.

This could mark a fourth straight year of normal monsoon, and is important because the June-September rainy season delivers as much as 90% of India’s annual rainfall and could determine yields of key crops such as wheat, rice and sugarcane.

India is already feeling the strain of higher food prices at a time when global food inflation is at a decade high. A normal monsoon would help to boost crop output in the country where about 60% of the population is dependent on agriculture. Deficient rains could lead to lower yields, potentially higher imports of commodities like edible oils, and rising food costs.

The nation received 99% of the 50-year average rainfall of 880.6 millimeters in 2021, according to the India Meteorological Department, the official forecaster. A monsoon is considered normal when cumulative rains are between 96% and 104% of the long-term average. The IMD usually releases its forecast in April.

Monsoonal Conditions Seen Around North Australia This Week: BOM

Monsoonal conditions are expected to develop around northern Australia this week with multiple tropical lows forecast to form in waters off the coast, the Bureau of Meteorology said in a statement.

February and March are typically the most active months for tropical cyclone formation in the Australian region

Much of northern Australia is forecast to see average to above-average rainfall during the remainder of the wet season

U.S. Beef Production Up 0.9% This Week, Pork Down: USDA

U.S. federally inspected beef production rises to 559m pounds for the week ending Feb. 19 from 554m in the previous week, according to USDA estimates published on the agency’s website.

• Cattle slaughter up 0.6% from a week ago to 663m head
• Pork production down 0.5% from a week ago, hog slaughter falls 0.4%
• For the year, beef production is 0.5% below last year’s level at this time, and pork is 8.4% below