Global Ag News for Mar 10.22

TODAY – EXPORT SALES

Wheat prices overnight are down 18 in SRW, up 6 1/2 in HRW, up 17 1/2 in HRS; Corn is up 8 1/4; Soybeans up 18; Soymeal up $0.55; Soyoil up 1.07.

For the week so far wheat prices are down 17 1/2 in SRW, down 90 1/2 in HRW, down 40 in HRS; Corn is down 12 3/4; Soybeans up 29 1/4; Soymeal up $2.00; Soyoil up 2.42. For the month to date wheat prices are up 249 1/2 in SRW, up 168 in HRW, up 107 1/2 in HRS; Corn is up 50 1/2; Soybeans up 53; Soymeal up $33.90; Soyoil up 2.70.

Year-To-Date nearby futures are up 56% in SRW, up 38% in HRW, up 15% in HRS; Corn is up 26%; Soybeans up 28%; Soymeal up 23%; Soyoil up 42%.

Chinese Ag futures (MAY 22) Soybeans down 32 yuan; Soymeal down 63; Soyoil down 146; Palm oil up 136; Corn down 14 Malaysian palm oil prices overnight were down 113 ringgit (-1.60%) at 6961.

There were changes in registrations (1 Oats, -1 HRW Wheat). Registration total: 2,185 SRW Wheat contracts; 1 Oats; 17 Corn; 66 Soybeans; 98 Soyoil; 0 Soymeal; 167 HRW Wheat.. Registration total: 2,185 SRW Wheat contracts; 1 Oats; 17 Corn; 66 Soybeans; 98 Soyoil; 0 Soymeal; 167 HRW Wheat.

Preliminary changes in futures Open Interest as of March 9 were: SRW Wheat up 156 contracts, HRW Wheat down 3,712, Corn down 3,168, Soybeans down 30, Soymeal down 2,343, Soyoil down 735.

Northern Plains Forecast: Isolated showers Wednesday. Mostly dry Thursday-Saturday. Isolated showers Sunday. Temperatures well below normal through Friday, near to below normal Saturday, near to above normal Sunday. 6 to 10 day outlook: Mostly dry Monday-Friday. Temperatures near to above normal Monday-Friday.

Central/Southern Plains Forecast: Scattered showers through Friday. Mostly dry Saturday-Sunday. Temperatures below to well below normal through Saturday, near to below normal Sunday. 6 to 10 day outlook: Mostly dry Monday-Wednesday. Isolated showers Thursday-Friday. Temperatures near to above normal Monday-Friday.

Western Midwest Forecast: Scattered showers Wednesday night-Friday, mostly south. Mostly dry Saturday-Sunday. Temperatures below normal Wednesday, well below normal Thursday-Saturday, near to above normal Sunday.

Eastern Midwest Forecast: Scattered showers southeast Wednesday. Scattered showers Thursday-Saturday. Mostly dry Sunday. Temperatures near to below normal through Friday, well below normal Saturday, near to below normal Sunday. 6 to 10 day outlook: Isolated showers Monday. Mostly dry Tuesday-Wednesday. Scattered showers Thursday-Friday. Temperatures above normal Monday-Friday.

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

Argentina Grains & Oilseeds Forecast: Cordoba, Santa Fe, Northern Buenos Aires Forecast: Mostly dry through Sunday. Temperatures near to below normal Wednesday, below normal Thursday-Sunday. La Pampa, Southern Buenos Aires Forecast: Mostly dry through Sunday. Temperatures near to below normal Wednesday, below normal Thursday-Sunday.

The player sheet for 3/9 had funds: net sellers of 16,000 contracts of  SRW wheat, sellers of 20,000 corn, sellers of 10,000 soybeans, buyers of 2,000 soymeal, and  sellers of 4,000 soyoil.

TENDERS

• CORN SALE: The U.S. Department of Agriculture confirmed private sales of 100,000 tonnes of U.S. corn to Colombia for shipment in the 2021/22 marketing year.
• SOYOIL SALE: The USDA confirmed private sales of 20,000 tonnes of U.S. soybean oil to unknown destinations for shipment in the 2021/22 marketing year.
• WHEAT SALE: Algeria’s state grains agency OAIC purchased around 600,000 to 700,000 tonnes of optional-origin milling wheat in an international tender late on Wednesday
• FEED WHEAT, BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said it would seek 80,000 tonnes of feed wheat and 100,000 tonnes of feed barley to be loaded by June 30 and to arrive in Japan by Aug. 25. It said it would seek the grain via a simultaneous buy and sell (SBS) auction that will be held on March 16.
• FAILED WHEAT TENDER: Jordan’s state grain buyer the trade ministry is believed to have made no purchase and canceled an international tender to buy 120,000 tonnes of milling wheat which closed on Wednesday

PENDING TENDERS

• FEED GRAIN TENDER: Iranian state-owned animal feed importer SLAL has issued an international tender to purchase up to 60,000 tonnes of animal feed barley, 60,000 tonnes of feed corn and 60,000 tonnes of soymeal
• WHEAT TENDER: Iranian state agency the Government Trading Corporation (GTC) has issued an international tender to purchase about 60,000 tonnes of milling wheat with the United States among regions permitted as possible origins
• SOYOIL TENDER: Iran’s GTC has issued an international tender to purchase about 30,000 tonnes of soyoil
• WHEAT TENDER: The Taiwan Flour Millers’ Association has issued an international tender to purchase 50,000 tonnes of grade 1 milling wheat to be sourced from the United States
• BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase 120,000 tonnes of animal feed barley
• WHEAT TENDER: Jordan’s state grain buyer has issued an international tender to buy 120,000 tonnes of milling wheat which can be sourced from optional origins
• WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of milling wheat

Ukraine War Ripples Across Global Crop Outlook: WASDE Takeaways

• Ukraine impact: Wheat exports for grain-shipping giants Russia and Ukraine were cut as trade out of the key region stalled with no idea of when normal activity might resume. That meant more wheat left on the bottom line as USDA boosts its outlook for global stocks.
• Corn: Disruptions to corn sales from Ukraine were formally recognized as the forecast for the war-torn nation’s shipments were slashed. That raised questions over who will fill the gap, since much of Ukraine’s corn typically heads to buyers like China and the EU.
• Soybeans: USDA made another aggressive reduction to production, but crop sizes were still bigger than analysts expected. Drought in South America has hurt crops and lifted demand for U.S. beans, reflected in a boost to the export outlook that many analysts have said is overdue.
• Edible oils: Food-versus-fuel tensions are set to flare further as Russia’s invasion of Ukraine hurt trade of sunflowerseed oil from the Black Sea region. U.S. soybean oil exports were raised in response at a time when the commodity is trading at all-time highs amid a global squeeze on vegetable oils coveted both for cooking and biofuels.
• Food inflation: With food costs at record highs, this month’s report provided no signs of relief for food processors as export disruptions, higher commodity costs and reduced crop outlooks set up a recipe for even costlier grocery bills worldwide.

USDA Soybean Estimates Still Dominated by South America Weather

The U.S. Department of Agriculture soybean estimates are still being dominated by weather in South America.

Output for Brazil, the No.1 grower, was lowered to 127 million tons, down from the previous estimate of 134 million and a far cry from the initial forecast for a record 144 million. Argentina production was cut by 1.5 million to 43.5 million tons. The USDA trimmed Brazil shipments by 5 million tons to 85.5 million.

The lower exports for South America are partly offset by higher U.S. shipments.

U.S. soybean exports were lifted 40 million bushels amid drought in South America. USDA also cut its outlook for how much soy oil would be used for “green” diesel after futures prices recently soared to a record high.

Russia’s invasion of Ukraine has sent already elevated edible oil prices into the stratosphere as global vegetable oil supplies tighten even more at a time when fuel producers and food processors are clashing over access to the dual-use commodity.

USDA raised its estimate of soybean oil exports in response to reduced global sunflower-seed oil trade. The Black Sea accounts for the bulk of the world’s sunflower oil shipments.

Fewer soybeans are being crushed into meal and oil, according to the USDA, which cut its global estimate by 5 million tons. The main factors there are a slower than-expected pace for China and lower South American supplies. Sunflower seed crush is reduced another 2.2 million tons, mainly due to Ukraine.

DOE: U.S. Ethanol Stocks Rise 1.4% to 25.271M Bbl

China allocates more than $250 mln to promote winter wheat production

China has allocated 1.6 billion yuan ($253 million) to strengthen field management for winter wheat, the country’s finance ministry said, in an effort to bolster security of food supply.

Part of the money will be used to stabilise output of winter wheat in five main production regions, including Hebei and Shandong provinces, where planting of the grain was delayed, the Ministry of Finance said in a statement on its website.

The central government will also allocate the money to about a dozen main production regions to prevent and control the impact off extreme weather on wheat.

China’s agriculture minister has said the country’s winter wheat crop condition is potentially the worst in history, after heavy rainfall delayed the planting of about a third of the normal wheat acreage, but added he was confident that a bumper summer grain harvest can be secured.

China to sell 295,596 tonnes of imported soybeans from reserves on March 14 – trade center

China will sell 295,596 tonnes of imported soybeans from its reserves at an auction on March 14, said the National Grain Trade Center in a notice on its website.

The move, aimed at alleviating tight supply of the oilseed in the world’s top soybean buyer, was flagged last month by the government.

Ships Start Moving Again Into Black Sea as Ukraine War Continues

• Shipping from the region had been suspended since war started
• Vessels had been loaded and were waiting authorization to sail

Russia appears to be letting some ships carrying grains exit the Azov Sea, the first signs of activity since shipping in the waterway linked to the Black Sea was suspended following the attack on Ukraine.

Around 30 vessels have been allowed to leave Russian ports and sail out of the waterway straddled by Russia and Ukraine, Interfax reported. Saban Buttanri, owner of Istanbul-based Agrolino Grains and Oilseeds, says he’s also aware of ships carrying sunflower oils, grains and feeds sailing out of the Azov Sea toward Turkey, including three of his vessels carrying sunflower oil.

Ships are leaving Russian ports and transiting the Black Sea on the way to Mediterranean ports

Russia Allowing Some Grain Cargoes to Move to Turkey: Trader

Russian government is allowing some Turkish vessels carrying sunflower oil, grains and feed grains to sail to Turkey, Saban Buttanri, owner of Istanbul-based Agrolino Grain and Oilseeds, says in interview.

• A total of 22 vessels were allowed to sail to Turkish ports in the Mediterranean Sea
• Of those, three ships carrying sunflower oil that belong to Agrolino have sailed from Kerch Strait to Mersin port in Turkey
• “We know that the Turkish president and Russian president had a conversation yesterday and we heard that Putin agreed to release these vessels that were waiting for weeks,” Buttanri says
• Traffic from Ukraine is still closed, according to Buttanri

Malaysia Feb. Palm Stockpiles -2.1% M/m to 1.52M Tons: MPOB

Palm oil stockpiles in Malaysia, the world’s second-largest producer, fell 2.1% to 1.52 million tons in February from a month earlier, Malaysian Palm Oil Board says in statement today.

• Palm oil exports -5.3% m/m to 1.1m tons
• Imports +112.2% m/m to 149,833 tons
• Crude palm oil production -9.3% m/m to 1.14m tons

Malaysia Feb. Palm Oil Exports to India -18.3% M/m

Malaysia’s palm oil exports to India fell 18.3% to 0.18 million tons in Feb. from a month earlier, the Malaysian Palm Oil Board posted on its website.

• Exports to India -18.3% m/m to 184,063 tons
• Exports to China +17.2% m/m to 88,033 tons
• Exports to EU -8.2% m/m to 111,083 tons, unchanged m/m

Malaysian Palm Report Surprises as Reserves More Than Estimated

• Stockpiles drop 2.1% to 1.52 million tons, MPOB figures show
• Shipments fall 5.3% in February, Production declines 9.3%

Palm oil inventories in Malaysia came in higher than predicted as exports unexpectedly fell and imports climbed, offsetting weaker production in the second-biggest grower.

Stockpiles dropped just 2.1% from a month earlier to 1.52 million tons in February, according to a report by the Malaysian Palm Oil Board after the midday break Thursday. That compared with a slump of 12.9% to a 14-month low of 1.35 million tons estimated in a Bloomberg survey.

Exports fell 5.3% to 1.1 million tons, compared with an increase of 7.8% estimated in the survey. Shipments tumbled more than 18% to top buyer India and 8% to Europe, but rose 17% to China, MPOB data showed.

Production of crude palm oil fell 9.3% to 1.14 million tons, the weakest in a year and a steeper decline than the 4.8% drop forecast in the survey. Malaysian output, which fell for a fourth month, has plummeted more than 30% from a high of 1.73 million tons in October as farmers struggle with the country’s worst-ever labor crunch.

EU Soft-Wheat Exports Fall 1.6% in Season Through March 6

Soft-wheat shipments during the season that began July 1 came to 18.6m tons as of March 6, versus 18.9m tons in a similar period a year earlier, the European Commission said Wednesday on its website.

• NOTE: Figures for the prior season include trade for the U.K. until Dec. 31, 2020, when the country departed the EU customs union
• Top soft-wheat destinations are Algeria (2.84m tons), China (1.88m tons) and Egypt (1.7m tons)
• EU barley exports at 5.46m tons, versus 5.57m tons a year earlier
• EU corn imports at 11.5m tons, versus 11.4m tons a year earlier

CPO PRICES TO DECLINE IN SECOND HALF OF 2022 — DORAB MISTRY

Crude palm oil (CPO) futures on Bursa Malaysia Derivatives for the third month and September 2022 are expected to decline to RM5,000 per tonne and RM4,000 per tonne, respectively, as demand slows down and production picks up, according to Godrej International Trading & Investments Pte Ltd.

Its director Dorab Mistry said India, the largest consumer of Malaysian palm oil, is expected to reduce its imports by one million tonnes this year as the South Asian nation shifts to soybean oil.

European Fertilizer Output Cuts Risk for Food Prices

• Norway’s Yara reduces production from plants in Italy, France
• Hungarian Nitrogenmuvek halts output, Borealis considering it

European fertilizer makers, including Yara International ASAand Borealis AG, are cutting output because of surging natural gas prices, adding to the growing risks for global food inflation.

Russia’s invasion of Ukraine has roiled commodities markets and propelled natural gas — the feedstock of nitrogen fertilizers — to record levels. That’s forcing producers to curb ammonia output, pushing up farm input costs and adding to the risks of a worldwide food shock.

Yara is temporarily curtailing production at Ferrara in Italy and Le Havre in France, the Oslo-based company said on Wednesday. Output of ammonia and urea at its European facilities will be just 45% of capacity by the end of this week. The two plants produce 1 million tons of ammonia and 900,000 tons a year of urea between them.

Natural gas is used as a feedstock for nitrogen fertilizers, usually accounting for around 80% of a manufacturer’s costs. European gas futures are now about 10 times higher than a year ago. Global food prices jumped to a record last month, just as war started in the world’s breadbasket.

Yara shares fell 0.4% as of 2:32 p.m. in Oslo trading, after earlier dropping as much as 2.7%. The stock has declined 11% this year.

Borealis, another European fertilizer producer, is reducing its ammoniaproduction capacity because of surging gas prices. It’s also considering stopping output for “economical reasons.”

Hungarian producer Nitrogenmuvek Zrt is temporarily halting output of ammonia. “In a few days our fertilizer plants will also shut down, as we have limited ammonia storage capacity,” Zoltan Bige, chief strategy officer, said in an email.

Virtually every major crop in the world depends on inputs like potash and nitrogen, and without a steady stream, farmers will have a harder time growing everything from coffee to rice and soybeans. Russia is also a key supplier for fertilizers.

China’s Export Shift Could Provide Supply Relief

China may lift its fertilizer export ban in 2Q, providing supply and price relief to farmers. A turn toward energy protectionism led China to suspend urea and phosphate fertilizer exports from 3Q through May. We expect China to extend the ban through June to build domestic inventories. Still, China can’t replace the 7 million tons of urea exports lost if Russia halts shipments; China’s annual export capacity is only 4-6 million tons. The export ban has had little impact on China’s domestic urea prices, which have been supported by higher natural gas and coal costs.

China is the marginal producer for both phosphate and urea fertilizers, accounting for 10% of global urea exports and 30% of finished phosphate exports.