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Global Ag News for July 13.22

HEADLINES TODAY

Wheat prices overnight are up 4 in SRW, up 4 1/2 in HRW, up 5 1/4 in HRS; Corn is up 1 1/2; Soybeans down 5 1/4; Soymeal up $0.03; Soyoil down 0.59.

For the week so far wheat prices are down 73 1/4 in SRW, down 73 1/2 in HRW, down 67 3/4 in HRS; Corn is down 35 1/2; Soybeans down 58 3/4; Soymeal down $1.37; Soyoil down 3.16.

For the month to date wheat prices are down 65 3/4 in SRW, down 79 1/2 in HRW, down 66 in HRS; Corn is down 31 3/4; Soybeans down 120 1/4; Soymeal down $16.70; Soyoil down 7.13.

Year-To-Date nearby futures are up 4% in SRW, up 9% in HRW, down -9% in HRS; Corn is up 25%; Soybeans up 23%; Soymeal up 17%; Soyoil up 9%.

Chinese Ag futures (SEP 22) Soybeans down 51 yuan; Soymeal down 80; Soyoil down 402; Palm oil down 450; Corn down 35 — Malaysian palm oil prices overnight were down 327 ringgit (-7.94%) at 3789.

There were changes in registrations (34 Soymeal, 13 HRW Wheat). Registration total: 2,653 SRW Wheat contracts; 0 Oats; 0 Corn; 0 Soybeans; 319 Soyoil; 34 Soymeal; 79 HRW Wheat.

Preliminary changes in futures Open Interest as of July 12 were: SRW Wheat up 2,429 contracts, HRW Wheat down 508, Corn up 5,487, Soybeans down 6,232, Soymeal down 5,800, Soyoil up 970.

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

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

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

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

The player sheet for 7/12 had funds: net sellers of 16,000 contracts of  SRW wheat, sellers of 31,000 corn, sellers of 25,000 soybeans, sellers of 5,500 soymeal, and  sellers of 11,500 soyoil.

TENDERS

  • FEED CORN PURCHASE: South Korea’s Major Feedmill Group (MFG) purchased an estimated 68,000 tonnes of animal feed corn to be supplied from optional origins in a private deal without an international tender being issued, European traders said. It was thought to be sourced either from South America or South Africa.
  • WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy 130,900 tonnes of food-quality wheat from the United States, Canada and Australia in regular tenders that will close on July 14.
  • WHEAT PURCHASE: The Taiwan Flour Millers’ Association purchased an estimated 44,725 tonnes of milling wheat to be sourced from the United States in a tender which closed on Wednesday

PENDING TENDERS

  • CORN TENDER: The Korea Feed Association (KFA) has issued an international tender to purchase up to 136,000 tonnes of animal feed corn to be sourced from optional origins
  • WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of milling wheat
  • VEGETABLE OIL TENDER: Egypt’s state grains buyer said on Monday it was seeking at least 3,000 tonnes of soyoil and 1,000 tonnes of sunflower oil in a local production tender for arrival Aug. 10-30. Deadline for offers is on July 6.
  • WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy 120,000 tonnes of hard milling wheat
  • FEED WHEAT, FEED BARLEY TENDER: Japan is seeking 70,000 tonnes of feed wheat and 40,000 tonnes of feed barley to be loaded by Oct. 31 and arrive in Japan by Dec. 22 via a simultaneous buy and sell auction on July 13, the country’s agriculture minister said.
  • FEED BARLEY TENDER: Jordan’s state grains buyer issued a new international tender to purchase 120,000 tonnes of animal feed barley
  • WHEAT TENDER: The Trading Corporation of Pakistan (TCP)issued a new international tender to purchase and import 300,000 tonnes of wheat
  • WHEAT TENDER: Jordan’s ministry of trade issued a tender to buy 120,000 tonnes of wheat, the state news agency reported.

Recovering Supplies Signal Crop-Crisis Relief: WASDE Takeaways

  • Inflation relief: Crop markets were tumbling before the monthly report and remained under pressure after it. Recovering world harvests and bigger grain and oilseed stockpiles are a signal the worst of the food crisis may be over. Analysts anticipated USDA would slightly cut world wheat supplies, but the agency raised them instead.
  • Ukraine uncertainty: USDA cut its outlook for Ukraine’s wheat harvest by 2 million tons due to a smaller harvested area as growers can’t collect all the fields they planted last autumn. That comes as high-level meetings were planned between officials in Turkey to get supplies moving out of Ukraine. The ongoing conflict will continue to cast a shadow over crop markets, even if farmers outside of Ukraine can increase harvests to offset those losses.
  • Cotton woes: The US cotton crop was cut even more than expected, although any bullishness in that estimate was offset by negative news earlier that China could cut imports of the fiber.
  • Less need for feed: Corn stockpiles in the US were bigger than expected, with USDA flagging reduced demand for feed. That’s coming as livestock operators have been scaling back cattle and hog herds because of the soaring costs to fatten up animals for slaughter.
  • Tough weather trade: Increased volatility due to the war, coupled with extremely high prices and inflation fears, mean the sleepy summer weather markets typical of the grains trade may be missing for awhile. That could mean more pain for farmers who believe hot weather is hampering their yields even as the market doesn’t fully account for that.

China’s Edible Oil Imports Slump to Lowest in Over Seven Years

China imported only 254,000 tons of edible oils in June, the smallest monthly total since February 2015, according to customs data compiled by Bloomberg.

  • Purchases tumbled more than 20% from the previous month, and plunged 75% from a year earlier
  • The country shipped in 8.25 million tons of soybeans last month, 23% less than a year ago

Ukraine says ships pass through Danube river mouth, sparking hopes on grain exports

Ukraine sparked hopes Tuesday for an increase in grain exports despite Russia’s blockade of Black Sea ports, noting that ships had started to pass through an important mouth of the Danube river.

“In the last four days, 16 ships have passed through the Bystre rivermouth,” Deputy Infrastructure Minister Yuriy Vaskov was quoted as a saying in a ministry statement. “We plan to maintain this pace.”

The ministry said the 16 vessels were now waiting to be loaded with Ukrainian grain for export to foreign markets, while more than 90 more vessels were awaiting their turn in Romania’s Sulina canal.

Only four ships could be received per day along the Sulina route, he said, while a rate of eight per day was needed. But Ukraine was negotiating with Romanian colleagues and European Commission representatives about increasing the rate of crossings, he added.

If such conditions were met, and with the opening of the Bystre, he said Ukraine expected this ship congestion would end within a week and that monthly exports of grain would increase by 500,000 tonnes.

Before Russia’s invasion, the ministry said, sea ports accounted for about 80 percent of Ukraine’s export of agricultural products, but food exports are now restricted to Danube ports, railways and roadways to the west.

Brazil Corn Exports Seen Reaching 6.253 mln T In July – Anec

  • BRAZIL SOY EXPORTS SEEN REACHING 7.956 MILLION TNS IN JULY VERSUS 6.536 MILLION MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC
  • BRAZIL SOYMEAL EXPORTS SEEN REACHING 2.173 MILLION TNS IN JULY VERSUS 1.926 MILLION MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC
  • BRAZIL CORN EXPORTS SEEN REACHING 6.253 MILLION TNS IN JULY VERSUS 5.381 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC

Brazil set to export corn to China before end of 2022, farmer group says

Brazil may start exporting corn to China before the end of this year, Cesario Ramalho, the head of institutional affairs at corn farmer group Abramilho, said on Tuesday.

Ramalho, speaking at a news conference, said the timeline was provided by Agriculture Ministry officials, who are in talks with China about the acceptance of certain types of transgenic corn cultivated in the South American country.

Brazilian and Chinese authorities concluded negotiations to update the protocol for exports of Brazilian corn to China, the ministry said in a statement to Reuters.

“The technical teams from both countries have been in talks with the aim of concluding the technical procedures that will allow the start of exports,” the ministry said, without elaborating.

In May, China’s customs authorities said they had finalized an agreement to allow imports of Brazilian corn, lining up an alternative to U.S. corn to replace imports from Ukraine.

But shipments have not begun, as talks are ongoing for China to approve certain types of transgenic corn that Brazilian farmers already plant with authorization from Brazilian biosecurity agency CTNBio, Ramalho told the briefing.

Brazil sells corn to countries like Iran, Japan, Mexico and the European Union, Ramalho said, and should continue to export corn to as many markets as possible to avoid dependence on only one buyer.

Ramalho estimates China buys about half of Brazil’s exported meat and some 80% of its soy exports each year.

Brazil’s Corn Ethanol Gains Share on Total Production: Unica

Corn ethanol production in Center-South jumped 33.3% through June to 962m liters, corresponding to 12.3% of total ethanol production, according to figures released Tuesday by the industry group Unica.

  • Corn ethanol share on total output was 8.3% a year ago
  • In the second half of June, corn-based ethanol production soared 51% y/y to 189m liters
  • Rising corn ethanol production has helped the industry to ensure ethanol supplies despite the slump on crush and sugar content in cane this season, Unica’s technical director Antonio de Padua Rodrigues says in a report
  • Mills reduced sugar supply by 1.2m tons so far this season to increase ethanol production, he said
  • Total ethanol sales (hydrous, anhydrous, domestic and exports) fell 1% through June to 2.46b liters

Palm Oil Imports by Top Buyer India Rises 15% M/m in June: Group

Inbound shipments climbed to 590,921 tons from 514,022 tons a month earlier, according to the Solvent Extractors’ Association of India.

  • Soybean oil imports fell to 230,992 tons from 373,043 tons in May
  • Total vegetable oil purchases, including non-edible oils, decreased to 991,650 tons vs 1.06m tons in May
  • India’s sunflower oil purchases 119,558 tons vs 118,482 tons a month earlier
  • Edible oil stockpiles at ports and in the pipeline were 2.26m tons on July 1, compared with 2.25m tons at the start of June

Heatwave in Southern China Strains Power Grid, Threatens Crops

  • Shanghai issues red alert as some regions see record heat
  • Hot weather comes at crucial time for China’s early rice

A blistering heatwave sweeping across southern China is threatening crops and adding strain to the local power grids, as the Asian nation becomes the latest region around the globe battling searing temperatures.

Shanghai, China’s financial hub, on Wednesday issued a red alert, the highest level heat warning, as the temperature was expected to reach 40 degrees Celsius (104 degrees Fahrenheit). Cities in Sichuan and economic powerhouses Jiangsu and Zhejiang also issued red alerts after temperatures in parts of the region hit records.

The heatwave is expected to last through the weekend, with temperatures reaching as high as 42 degrees Celsius, according to the national meteorological center.

Heatwaves are blasting regions from Europe to the US at the start of summer in the northern hemisphere, adding pressure to already-high energy prices. Texaspower use is breaking records, while Europe continues to bake after the third-warmest June on record.

Hot weather in China is coming at a crucial time for the nation’s early rice to fill and harvest. The heat may hurt rice yields and is negative for cotton growth as well, the country’s meteorological department said.

The heatwave will also likely boost power consumption further this summer as residents and businesses turn on air conditioning to keep cool. Electricity use has already hit a record across several Chinese provinces, including Shandong and Henan in the north and Zhejiang in the east.

Several provinces in China are preparing “orderly consumption” plans for times when power supplies are tight, BJX.com reported. The plans curb use at inefficient or high-consumption factories in order to make sure enough supply is available for residents and more important industries.

A prolonged surge in power demand could threaten to deplete stockpiles of coal, the main fuel used for electricity generation. Overseas prices of the fuel are near a record high, and higher Chinese demand could exacerbate a global supply crunch.

Manitoba Says Crops Advancing Rapidly Amid Warmer Weather

Crops advancing faster than agronomists expected across all parts of Manitoba, according to report from province’s agriculture ministry.

  • “Earlier-seeded spring wheat crops are fully flowered”: report
  • “Canola crops are extremely variable” due to water stress, seeding date and flea beetle pressure
  • Soybeans are growing rapidly with warmer weather
  • Widespread rainfall last week slowed spray operations and many farmers choosing to spray by air to reduce rutting on soft fields

COFCO International Gets $1.6b Sustainability-Linked Credit Line

The Geneva-based agricultural commodities trader refinanced a sustainability-linked revolving credit facility with 19 banks, taking its tally of sustainable loans to $2.3 billion, COFCO said Wednesday.

The deal consists of a one-year and a three-year tranche

The lenders are providing lower interest rates to COFCO Internationaldue to agreed sustainability targets relating to traceability and socio-environmental screening of the trader’s Brazilian soy supplies, it said

Brazil Will No Longer Cut Down Trees to Raise Cattle, Says Lula

The country will no longer cut down trees to raise cattle, plant sugarcane or soybeans or corn, former president Luiz Inácio Lula da Silva said at a public rally in Brasilia on Tuesday.

  • The pre-candidate said that the Amazon forest is a heritage of the Brazilian people, but that “if we don’t have the capacity to take care of it, because we don’t have money, we have to partner with other countries so that scientists from all over the world come to research so that we can take advantage of biodiversity”
  • Lula also defended a change in the focus of public banks
  • Banco do Brasil will resume lending to small properties: Lula

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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