HEADLINES TODAY
Wheat prices overnight are up 1 in SRW, up 1 1/2 in HRW, up 8 1/4 in HRS; Corn is down 1/2; Soybeans down 8; Soymeal down $0.18; Soyoil down 1.00.
For the week so far wheat prices are down 64 3/4 in SRW, down 66 3/4 in HRW, down 56 3/4 in HRS; Corn is down 21 3/4; Soybeans down 35 1/2; Soymeal up $0.05; Soyoil down 3.39.
For the month to date wheat prices are down 72 1/4 in SRW, down 88 in HRW, down 68 in HRS; Corn is down 25; Soybeans down 116 1/2; Soymeal down $6.00; Soyoil down 8.75.
Year-To-Date nearby futures are up 4% in SRW, up 8% in HRW, down -9% in HRS; Corn is up 24%; Soybeans up 25%; Soymeal up 21%; Soyoil up 7%.
Chinese Ag futures (SEP 22) Soybeans up 64 yuan; Soymeal up 35; Soyoil down 2; Palm oil down 8; Corn up 13 — Malaysian palm oil prices overnight were down 189 ringgit (-5.03%) at 3572.
There were changes in registrations (55 Soybeans, -100 Soyoil, ). Registration total: 2,653 SRW Wheat contracts; 0 Oats; 0 Corn; 55 Soybeans; 219 Soyoil; 34 Soymeal; 79 HRW Wheat.
Preliminary changes in futures Open Interest as of July 13 were: SRW Wheat up 2,630 contracts, HRW Wheat up 1,222, Corn down 9,310, Soybeans down 2,757, Soymeal up 2,001, Soyoil up 2,019.
Northern Plains Forecast: Isolated showers Thursday-Saturday. Mostly dry Sunday. Temperatures above normal Thursday-Sunday. Outlook: Isolated showers Monday. Mostly dry Tuesday-Wednesday. Isolated showers Thursday-Friday. Temperatures above normal Monday-Wednesday, near to above normal Thursday-Friday.
Central/Southern Plains Forecast: Mostly dry Thursday-Friday. Isolated showers Saturday-Sunday. Temperatures above normal south and near normal north Wednesday, near to above normal Thursday, above normal Friday-Sunday. Outlook: Mostly dry Monday-Tuesday. Isolated showers Wednesday-Friday. Temperatures above normal Monday-Friday.
Western Midwest Forecast: Mostly dry Thursday. Isolated showers Friday-Sunday. Temperatures near to above normal Thursday, above normal Friday-Sunday.
Eastern Midwest Forecast: Mostly dry Thursday. Isolated showers Friday-Sunday. Temperatures near normal through Friday, near to above normal Saturday-Sunday. Outlook: Isolated showers Monday-Wednesday. Mostly dry Thursday. Isolated shower Friday. Temperatures above normal Monday-Thursday, near normal Friday.
The player sheet for 7/13 had funds: unchanged in SRW wheat, buyers of 6,500 corn, sellers of 4,500 soybeans, buyers of 5,000 soymeal, and sellers of 3,000 soyoil.
TENDERS
- CORN PURCHASE: The Korea Feed Association (KFA) purchased about 68,000 tonnes of animal feed corn expected to be sourced from South America in an international tender for up to 136,000 tonnes
- WHEAT PURCHASE: Jordan’s state grains buyer purchased about 60,000 tonnes of hard milling wheat to be sourced from optional origins in a tender
- WHEAT PURCHASE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought 130,900 tonnes of food-quality wheat from the United States, Canada and Australia in regular tenders that closed on Thursday.
- 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
- FEED WHEAT AND CORN TENDER: Leading South Korean feedmaker Nonghyup Feed Inc. (NOFI) has issued an international tender to purchase up to 138,000 tonnes of animal feed corn and 65,000 tonnes of feed wheat
- CANCELLED FEED WHEAT, BARLEY TENDER: 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. The ministry had sought 70,000 tonnes of feed wheat and 40,000 tonnes of feed barley to be loaded by October 31 and arrive in Japan by December 22.
PENDING TENDERS
- 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.
- 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.
DOE: US Ethanol Stocks Rise 0.5% to 23.606M Bbl
According to the US Department of Energy’s weekly petroleum report.
- Analysts were expecting 23.618 mln bbl
- Plant production at 1.005m b/d, compared to survey avg of 1.044m
Paraguay 1H 2022 Exports Fall 6.8% Y/y to $4.93B on Soy, Power
Paraguay’s tradable goods exports decreased 6.8% y/y to $4.93b in the first half of 2022 after a drought cut soybean and hydropower production, the central bank said in a report.
- Soy exports plunged 42.4% to $956m, while power exports decreased 14% to $710m
- Soy shipments by volume fell 51.3% to 1.82m metric tons
- Argentina bought almost 1.31m metric tons, less than half what it purchased in 1H21
- Shipments to Brazil fell 18.4% to 373,600 metric tons
- Exports of soy oil, pellets increased almost 21% to $720m
- Beef exports fell 2% to 194,500 metric tons, but rose 14.6% by value to $950m
- Chile was the top buyer by volume with a market share of 36%, followed by Russia with 17.7%
- Paraguay swung to a trade deficit of $256.2m from a $1.26b surplus in 1H21
Brazil Soy 2021/22 Sales Reach 76.7% as of July 8: Datagro
Sales remain below the 91.2% record for the 2019/20 crop and compares with 80.2% seen at the same period last year and 78.8% average for the last 5 days, according to consulting firm Datagro.
- There was a monthly increase of 6.8 percentage points, above the 5.9 seen last month and the average of 5.5 for the period
- Considering the forecast for the 2021/22 crop of 126.18m tons, 96.77m tons were traded until the analyzed date
- Volume was 111.3m tons in the same period last year
IKAR Raises Russia 2022 Wheat Crop Estimate to 90.5m Tons
The revised estimate follows a recent crop tour and was increased from a previous outlook for 88.7m tons, IKAR director general Dmitry Rylko says by email.
- Country has potential to export 44m tons of wheat, up from 42m tons
- Total grains production may reach 138.5m tons
Argentina farm groups hold 24-hour strike; grains transport unaffected
Argentina’s main farm associations launched a 24-hour grain and livestock trading halt on Wednesday in protest against the government, criticizing high tax rates, currency controls and a scarcity of diesel that has hit farmers during harvest season.
The protest was not, however, stopping transport of grains to ports at Rosario, one of the world’s largest grains export hubs, nor was it affecting grains shipments. Argentina is the world’s No. 1 exporter of processed soy and No. 2 for corn.
“We suffer from the lack of fuel and the impossibility of buying supplies due to restrictions on dollars,” said Carlos Achetoni, president of the Argentine Agrarian Federation, one of the entities that called the strike.
“This is combined with tax pressure and lack of financing.”
There have been weeks of protests in Argentina by truckers due to high fuel prices and scarcity linked to global energy concerns, which has at times hit grains transport. The corn harvest is advanced and the soybean harvest has just finished.
However, there was no obvious impact on Wednesday on grains trucking, with some 4,013 trucks entering the ports of Rosario, Agroentregas data showed, compared with 4,073 a day earlier.
Amid a wider economic crisis in the South American country, farmers complain that tax pressures are too high and worry that the government will try to hike export tariffs further to raise much-needed foreign reserves.
Farmers will hold assemblies and demonstrations around the country on Wednesday, including a central event in the province of Entre Rios.
Cabinet Chief Juan Manzur told reporters on Wednesday that the government encouraged “dialogue” to find solutions with the farm sector. “We do not agree with this strike,” he said.
China 2022 summer wheat output rises 1% from last year – stats bureau
China’s wheat for the summer harvest rose slightly from the previous year, the country’s statistics bureau said on Thursday, following concerns after heavy autumn rains delayed planting for the winter harvest.
Summer wheat crop output in the world’s top grower of the grain rose 1.0% to 135.76 million tonnes in 2022, the National Statistics Bureau said, while wheat planting acreage this summer increased 0.2% from last year.
Overall summer grain output also rose 1.0% from the previous year to 147.39 million tonnes, and summer planting acreage saw yearly gains of 0.3%.
Beijing has refocused on grain security, a top policy priority that has become increasingly prominent, since the COVID-19 pandemic began in early 2020. Its prominence was heightened after the start of the war in grain-producing powerhouse Ukraine in late February.
Prices of wheat harvested in China also rose to their highest levels on record last month despite stable demand, pushed up by surging farming costs, tight stocks and concerns that heavy rains last year would lead to a smaller crop.
The agriculture ministry, however, said its winter wheat crop improved more than expected. (Full Story)
Nevertheless, China has shored up financial support for wheat planting. It has allocated 5 billion yuan ($743.47 million) in total from its central finance system to stabilise winter wheat output this crop year as part of measures to strengthen food security in the world’s most populous country. (Full Story)
It also offered 10 billion yuan in subsidies to support grain cultivation and production, alleviate the impact of rising costs and to encourage cultivation of the grain.
China Harvests Over 30% of Early Rice in Southern Areas:Official
China has harvested more than 30% of early rice in southern provinces, Pan Wenbo, director of the planting management department at the agriculture ministry, says at a briefing.
- Planting of late rice is expected to finish by early August
- Summer corn and soybean seeding have completed
- Grains that will be collected in autumn are doing well for a bumper harvest
- The ministry will guide farmers in preventing losses from natural disasters
China’s Heatwave Turns Deadly as Industrial Power Cuts Begin
- Summer temperatures in some regions exceed 42 degrees Celsius
- Extreme weather has also hit regions from Europe to the US
Scorching temperatures across China have turned deadly, with hospitals reporting patients dying of heat stroke, as officials begin curtailing power to factories to ensure sufficient supply for air-conditioners.
The heatwave that’s affected 900 million people over the past month is intensifying, with 76 weather stations reporting record high temperatures on Wednesday that exceeded 42 degrees Celsius (108 Fahrenheit) in some places. Polyester and textile factories in Zhejiang province began receiving power rationing notices this week, according to the South China Morning Post.
China is not alone in facing extreme weather this summer, as climate change pushes the boundaries of what forecasters are used to planning for. Europe has been hit by droughts, which have significantly lowered levels of the river Rhine — a key conduit for shipping commodities including coal and oil. Texas has also had to ask residents to conserve power to avoid blackouts.
It’s a sharp turn for China’s grid after heavy rain and pandemic lockdowns meant a cooler and slower start to the typical summer power demand season. Combined with record coal mining output, that’s kept inventories of the vital power plant fuel at relatively high levels, making it unlikely that there will be a repeat of the widespread power shortages the country faced last year.
Still, China will need to rely heavily on demand response measures such as temporarily cutting use at factories to keep grids balanced when temperatures peak throughout the summer, the state-owned Economic Daily said in a commentary.
Some temporary relief may be coming, with record temperatures in China’s eastern and southern coastal regions expected to ease from July 16 to July 18, Chen Tao, chief weather forecaster for the China Meteorological Administration, said on its official WeChat account.
Ukraine Grain Exports Down 40% Y/y in Season Through July 13
Grain exports during the season that began July 1 totaled 556k tons as of July 13, versus 926k tons in a similar period a year earlier, Ukraine’s agriculture ministry says on its website.
- Corn exports at 403k tons, versus 488k tons last year
- Wheat exports at 113k tons, versus 248k tons last year
- Barley exports at 37k tons, versus 180k tons last year
German Grain Exports May Be Constrained by Coal Revival: DRV
Many inland vessels in Germany are being used to transport coal to power plants, tying up vessel capacity and limiting availability to ship grain, Guido Seedler, grain-market analyst at agricultural cooperatives group DRV, says Thursday in a report.
- More barges are also being used in southeast Europe to transport grain from Ukraine via the Danube, and Germany is short of truck and train drivers
- Outlook for Germany’s 2022 wheat harvest trimmed to 22.5m tons, versus June estimate of 22.7m tons
- Barley crop raised to 10.7m tons, from 10.5m tons
- Corn crop cut to 4.1m tons, from 4.2m tons
- Heat wave expected in coming days may hamper production
- Rapeseed crop little changed at 3.8m tons
EU Corn Wilting in Heat; Russia Wheat ‘Huge Variable’: Strategie
Corn production prospects in the EU are “not especially good” due to recurring water shortages and hot weather, agricultural advisory firm Strategie Grains says in a note.
- Domestic balance sheet for the grain is “extremely tight”
- Livestock farmers favor feeding corn to their herds, given wheat’s expense
- Ukraine expected to continue shipping corn via land routes to EU amid the war, while the pace remains uncertain
- Outlooks for wheat and barley harvests also revised lower; EU wheat exports are in strong demand
- Pace of Russian wheat shipments remains “huge variable”
- “We are remaining cautious because of international sanctions, higher insurance costs for Black Sea shipping, and the sluggish pace of Russian exports so far in July”
- New ruble-based export tax positions Russian wheat more attractively, but makes it harder for traders to quote FOB prices
Malaysia Palm Oil Industry to Reduce Cooking Oil Prices: Bernama
Malaysia’s palm oil industry has agreed to reduce the prices of cooking oil in stages, based on the market price of crude palm oil, Bernama reported on Thursday, citing Communications and Multimedia Minister Annuar Musa.
- The price cuts will be implemented soon, said Annuar Musa who also chairs the national task force to combat inflation
- The decision was made after key players of the palm oil industry, including manufacturers, suppliers and packaging companies, met on July 12
Dry weather seen pushing down Argentina’s wheat harvest forecast
Argentina’s wheat harvest for the 2022/23 season is expected at 17.7 million tonnes, down from a previous estimate of 18.5 million tonnes, the Rosario Grains Exchange (BCR) said late on Wednesday.
The decrease comes due to a drop in the estimated planting area because of a drought in agricultural areas. The grains exchange also revised upwards its 2021/22 forecast for corn production.
Agricultural regions have suffered significant water shortage since the wheat planting season began in May. BCR now sees areas planted in wheat at 5.9 million hectares (14.6 million acres), down from 6.2 million hectares forecast in June.
Last week, the Buenos Aires Grains Exchange reduced its estimate of the sown wheat area for the fourth time since the new wheat season began, just two months ago. In May, the Buenos Aires exchange estimated a planted area of 6.6 million hectares, and now it expects 6.2 million hectares.
BCR also adjusted its 2021/22 corn crop estimate to 51 million tonnes from a previous estimate of 49.2 million tonnes. Farmers have hauled in 85% of the area sown with the grain.
Argentina Increases Corn Export Quota 20% to 36m Metric Tons
Argentina’s corn quota for the 2021-22 crop that’s being harvested has been increased to 36m metric tons from 30m, according to a statement sent to exporters by the country’s Agriculture Ministry.
The Ciara-Cec crop crushing and export group sent Bloomberg News the statement dated July 12
Summer Fill Programs Keep US Fertilizer Prices Sliding Lower
Several rounds of aggressive summer fill programs have nudged US fertilizer prices lower. Phosphate, ammonia and ammonium sulfate were priced significantly below the spot market in the traditional summer reset. The urea ammonium nitrate (UAN) fill program is expected in July, and prices could drop 16% from prompt levels.
NOLA Urea, Ammonia Rebound
Though New Orleans (NOLA) urea prices were up slightly from last week, and pushed some inland prices higher, news of lower volume in India’s latest tender is expected to drive prices down again in the near term. Stronger pricing for NOLA ammonia and idled production in Europe due to costly natural gas suggest a rise in Tampa ammonia for August. Ammonium sulfate prices continue to fall at NOLA and inland as additional fill programs are announced, with new aggressive offers confirmed in the Pacific Northwest and Western Canada at levels well below the spring business. In Brazil, low demand is pressuring potash and phosphate prices.
Nitrogen Prices May Drop as Demand Retracts: Wednesday Whisper
Nitrogen prices in Brazil appear to be falling ahead of Friday’s final assessments. Corn-price devaluation, partly supported by the USDA’s estimation of increased planting area for US corn, has compromised barters and halted urea bids for the 1Q23 corn winter season. Offer prices are down $50 a metric ton this week. Despite India’s urea-tender announcement on July 13, prices aren’t expected to rise given low demand. Prices for phosphate and potash, traded for soybean planting starting in September, appear to be falling as suppliers seek to release stagnant volume grounded at ports. Potash prices are down $20 a metric ton and phosphate $50 lower.
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.