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Global Ag News for Jan 26.23

TOP HEADLINES

India to Sell 3 Mln Tons of Wheat in Open Market to Cool Prices

State-run Food Corp. of India will release 3m tons of wheat in the open market during the next two months to cushion consumers from rising grain and flour prices, according to a statement by the food ministry.

  • A panel of ministers, headed by Home Minister Amit Shah, approved the sale on Wednesday: statement
  • Wheat from the state reserves will be offered to flour millers and bulk buyers via an electronic auction process for a maximum quantity of 3,000 tons per buyer per auction
  • The grain will also be sold to state governments
  • Food Corp. will also offer wheat to state-run companies, cooperatives, National Cooperative Consumers’ Federation of India Ltd. and National Agricultural Cooperative Marketing Federation of India Ltd. without auction at 23.5 rupees a kilogram
  • The buyers will be required to convert wheat into flour and sell to consumers at a maximum retail price of 29.5 rupees per kg

FUTURES & WEATHER

Wheat prices overnight are up 2 1/4 in SRW, up 6 in HRW, up 2 1/2 in HRS; Corn is up 2; Soybeans up 5 3/4; Soymeal up $0.19; Soyoil up 0.32.

For the week so far wheat prices are up 2 in SRW, up 1 1/4 in HRW, down 3/4 in HRS; Corn is up 1/2; Soybeans up 1 3/4; Soymeal up $0.37; Soyoil down 1.11.

For the month to date wheat prices are down 48 1/2 in SRW, down 38 3/4 in HRW, down 26 3/4 in HRS; Corn is down 1 3/4; Soybeans down 15 3/4; Soymeal down $3.60; Soyoil down 3.21.

Year-To-Date nearby futures are down 6.1% in SRW, down 4.4% in HRW, down 2.8% in HRS; Corn is down 0.3%; Soybeans down 0.7%; Soymeal down 2.3%; Soyoil down 4.6%.. Malaysian palm oil prices overnight were up 18 ringgit (+0.48%) at 3771.

China markets remain closed for Holiday.

There were changes in registrations (-22 Soybeans). Registration total: 2,783 SRW Wheat contracts; 0 Oats; 154 Corn; 1,017 Soybeans; 479 Soyoil; 62 Soymeal; 192 HRW Wheat.

Preliminary changes in futures Open Interest as of January 25 were: SRW Wheat down 2,923 contracts, HRW Wheat up 3,439, Corn up 919, Soybeans up 1,359, Soymeal down 2,717, Soyoil up 7,736.

Brazil Grains & Oilseeds Forecast: Dryness is taking a hold of southern Brazil yet again until another front moves through this weekend. Models disagree, but could linger that front in the region next week, which would be helpful for filling corn and soybeans. Widespread precipitation elsewhere continues to favor later-planted soybeans, but is delaying harvest a little. If the wetness continues too long, it may push back the safrinha (second-crop) corn planting schedule, which would not be an ideal scenario for the crop.

Argentina Grains & Oilseeds Forecast: A couple of fronts will move through Argentina during the next several days, which will bring through more precipitation for developing soybeans and corn, adding to good totals from last week. Early planted corn which is filling will only be stabilized by the showers. Should amounts disappoint, the region would likely have to wait until the middle of next week for the next chance of rain. If the forecasts hold, stabilization of the corn and soybean crops are likely, but a stark turnaround may not occur.

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

Central/Southern Plains Forecast: Isolated showers north through Saturday. Isolated showers Sunday. Temperatures near to below normal Thursday, near to above normal Friday, below normal northwest and above normal southeast Saturday-Sunday. Outlook: Isolated to scattered showers Monday-Wednesday. Mostly dry Thursday-Friday. Temperatures near to well below normal Monday-Wednesday, below to well below normal Thursday-Friday.

Western Midwest Forecast: Mostly dry Thursday. Scattered showers Friday-Sunday. Temperatures near to above normal through Friday, below normal north and above normal south Saturday, near to well below normal Sunday.

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

The player sheet for Jan. 25 had funds: net buyers of 3,500 contracts of SRW wheat, sellers of 4,000 corn, buyers of 5,000 soybeans, buyers of 3,000 soymeal, and  sellers of 1,500 soyoil.

TENDERS

  • WHEAT PURCHASE: Iraq bought 150,000 tonnes of wheat from Australia, the Trade Ministry said in a statement
  • SOYBEAN SALES: The U.S. Department of Agriculture (USDA) confirmed private sales of 130,000 tonnes of U.S. soybeans for delivery to unknown destinations during the 2022/23 marketing year that began Sept. 1, 2022.
  • CORN SALES: The USDA also confirmed private sales of 100,000 tonnes of U.S. corn to unknown destinations for 2022/23 delivery.
  • RAPESEED MEAL TENDER: South Korean animal feed maker Nonghyup Feed Inc. (NOFI) issued an international tender to purchase up to 40,000 tonnes of rapeseed meal sourced from India.
  • WHEAT TENDER: Leading South Korean feedmaker Nonghyup Feed Inc (NOFI) has issued an international tender to purchase up to 20,000 tonnes of animal feed wheat
  • WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy up to 120,000 tonnes of milling wheat which can be sourced from optional origins.
  • FEED WHEAT AND BARLEY TENDER UPDATE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said it received no offers for feed-quality wheat or barley in a simultaneous buy and sell (SBS) auction that closed late on Wednesday. The ministry had sought 70,000 tonnes of feed wheat and 40,000 tonnes of feed barley in the tender.

PENDING TENDERS

  • SOYBEAN TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued international tenders to purchase around 19,000 tonnes of food-quality soybeans free of genetically-modified organisms (GMOs).

Grain barge on river waterway

TODAY

GRAIN EXPORT SURVEY: Corn, Soy, Wheat Sales Before USDA Report

Estimate ranges are based on a Bloomberg survey of four analysts; the USDA is scheduled to release its export sales report on Thursday for week ending Jan. 19.

  • Corn est. range 700k – 1,400k tons, with avg of 983k
  • Soybean est. range 600k – 1,260k tons, with avg of 993k

Argentina soy sales lag previous year at 80.6% of harvest

Soybean sales from Argentina’s 2021/2022 harvest covered 80.6% of the 44 million tonne harvest as of last week, below the 82.6% sold from the previous season at the same time, data from its agricultural ministry showed Wednesday.

Between Jan. 12-18, producers sold 42,000 tonnes of soy, one of the lowest weekly volumes reported in recent months.

Producers have sold 76.3% of Argentina’s 2021/2022 59 million tonne corn harvest, the ministry said Tuesday, below the 78.5% sold from the previous season in the same period.

Producers have also sold 51.8% of Argentina’s 2022/2023 wheat campaign, which the government has projected at just 13.4 million tonnes due to drought.

Argentina corn production down again as vegetation density plummets in core areas – Refinitiv Commodities Research

2022/23 Argentina corn production is slashed by 6% to 45.3 [41.5–49.4] million tons reflecting record breaking low vegetation density levels in Entre Ríos and Santa Fe, despite recent beneficial rains throughout the Pampas. Our current estimate puts planted area at 7.65 million hectares, slightly above 7.3 million hectares reported by Bolsa de Comercio in Rosario and 7.1 million hectares by Bolsa de Cereales in Buenos Aires. In January’s WASDE (12 January), USDA placed Argentina corn production at 52 million tons, down from its previous estimate of 55 million tons. Bolsa de Cereales in Buenos Aires and Bolsa de Comercio in Rosario currently forecast production at 50 and 45 million tons, respectively.

The past two weeks featured widespread wet conditions across the Pampas, except for the areas to the far west of La Pampa/San Luis and some portions of eastern Buenos Aires, where average or below average precipitation was observed. There is a chance that some torrential downpours will take place in the northern half of the Pampas sometime early next week, though its intensity remains to be seen. Overall, Argentina’s main Pampas region continues to benefit from favorable rainfall patterns during December/January, after an extreme drought period that lasted more than 5 months since May. Approximately 50-180 mm of precipitation has accumulated over the past 60 days, providing a much needed relief to the dry soils, but the total amount was still mostly below normalPampas-wide, warranting attention. Northern Buenos Aires, western Córdoba and southern Santa Fe, in particular – where more than half of the country’s total corn is grown – received largely below average precipitation (up to 150 mm below normal) over the past two months, barely replenishing soil moisture there. These core crop areas are still in need of further water supply.

Vegetation densities derived from satellite imagery remain far below historical median levels across nearly all major production regions in the Pampas (except in San Luis), reflecting the ongoing dryness concerns despite recent beneficial rainfall. Santa Fe and Entre Ríos in particular, are having arguably the toughest growing season in history, supported by their record low vegetations density levels. The odds of a meaningful yield recovery in these two key regions appear to be slim to none, as the yield damage from early season delays will be felt soon with a potential growth curve shift causing crops to miss their ideal growing windows.

Record low vegetation density in Entre Ríos/Santa Fe cuts Argentina soybean production – Refinitiv Commodities Research

2022/23 ARGENTINA SOYBEAN PRODUCTION: 42.5 [39.7–45.3] MILLION TONS, DOWN 8% FROM LAST UPDATE

2022/23 Argentina soybean production is slashed by 8% to 42.5 [39.7–45.3] million tons reflecting record breaking low vegetation density levels in Entre Ríos and Santa Fe, despite recent beneficial rains throughout the Pampas. Our current estimate puts planted area at 16.9 million hectares, slightly above 16 million hectares reported by Bolsa de Comercio in Rosario and 16.2 million hectares by Bolsa de Cereales in Buenos Aires. In January’s WASDE (12 January), USDA placed Argentina soy production at 45.5 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 41 and 37 million tons, respectively.

The past two weeks featured widespread wet conditions across the Pampas, except for the areas to the far west of La Pampa/San Luis and some portions of eastern Buenos Aires, where average or below average precipitation was observed. There is a chance that some torrential downpours will take place in the northern half of the Pampas sometime early next week, though its intensity remains to be seen. Overall, Argentina’s main Pampas region continues to benefit from favorable rainfall patterns during December/January, after an extreme drought period that lasted more than 5 months since May. Approximately 50-180 mm of precipitation has accumulated over the past 60 days, providing a much needed relief to the dry soils, but the total amount was still mostly below normal Pampas-wide, warranting attention. Northern Buenos Aires, western Córdoba and southern Santa Fe, in particular – where more than half of the country’s total soybeans are grown – received largely below average precipitation (up to 150 mm below normal) over the past two months, barely replenishing soil moisture there. These core crop areas are still in need of further water supply.

Vegetation densities derived from satellite imagery remain far below historical median levels across nearly all major production regions in the Pampas (except in San Luis), reflecting the ongoing dryness concerns despite recent beneficial rainfall. Santa Fe and Entre Ríos in particular, are having arguably the toughest growing season in history, supported by their record low vegetations density levels. The odds of a meaningful yield recovery in these two key regions appear to be slim to none, as the yield damage from early season delays will be felt soon with a potential growth curve shift causing crops to miss their ideal growing windows.

Canada Canola Processing Rose 17.3% Y/y in December: StatCan

Canola processing rose 17.3% in December from a year ago, according to Statistics Canada data released Wednesday on agency’s website.

  • Oil production totaled 346k tons, and meal output at 486k tons
  • Aug.-Dec. crushings up 5.6% from year ago to 4.016m tons

Malaysia’s Farm Sector Short of 63,000 Foreign Workers: Minister

Malaysia is still short of an estimated 63,000 foreign workers in its agri-commodities sector, especially in oil palm plantations, according to Plantations and Commodities Minister Fadillah Yusof.

  • Shortage of labor has hurt palm oil productivity and resulted in revenue losses of about 20 billion ringgit in 2022, Fadillah, who is also the country’s deputy prime minister, said Thursday in Putrajaya
  • Govt plans to simplify the process of hiring foreign workers, and will hold talks with source countries to hasten labor intake
  • EU’s new deforestation regulation is a trade barrier to stop palm oil from entering its market, he says
    • This is a “big challenge” that has to be faced pro-actively
    • Ministry to have detailed and strategic plan to ensure Malaysian agri-commodities have fair access to international markets

Kernel Says It Purchased Terminal at Ukraine’s Odesa Port

Kernel purchased a terminal at Sea Trade Port Yuzhny in southern Ukraine’s Odesa region on the Black Sea, according to a statement on its website.

  • OilExportTerminal is able to accept and separately store all types of vegetable oils, including sunflower, soybean, and rapeseed; the terminal can store 49,404 tons of products, according to statement
  • Terminal that Kernel is buying is at a port covered under the UN- and Turkey-brokered deal allowing food exports from Ukraine
    • Russia is blocking other Ukrainian ports after launching its invasion of Ukraine almost a year ago
  • “The new asset is strategically important for the company given that oil transshipment is not available at Mykolaiv terminals,” Kernel CEO Yevgen Osypov says, adding that in 2019-2022 marketing years, Mykolaiv accounted for about half of the total oil transshipment volumes in Ukraine
    • “We are using OilExportTerminal in Yuzhny to cover the temporary losses,” Osypov says

Ammonia Too Pricey for Farm Use as Nitrogen Complex Slumps

Nitrogen and potash prices remain under pressure in the US as buyers review producers’ recently released winter and spring pricing programs. New Orleans (NOLA) and inland-terminal prices for urea ammonium nitrate and potash continue to fall. Ammonia appears overvalued at NOLA, trading at a premium to other nitrogen products.

Fertilizer producer Mosaic sees stockpiles too high to restart Canadian mine yet

Fertilizer producer Mosaic Co MOS.N does not currently see the right market conditions to restart its idled Canadian potash mine, with high inventories in the key markets of the United States and Brazil and cold weather slowing train movement of the crop nutrient from Canada, Chief Executive Joc O’Rourke said on Wednesday.

Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

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