Global Ag News For Mar 23.22

TODAY

Wheat prices overnight are up 20 1/4 in SRW, up 15 3/4 in HRW, up 15 1/4 in HRS; Corn is up 4 1/4; Soybeans up 14 3/4; Soymeal up $0.51; Soyoil up 0.87.

For the week so far wheat prices are up 74 3/4 in SRW, up 61 3/4 in HRW, up 50 3/4 in HRS; Corn is up 15 1/2; Soybeans up 43 1/4; Soymeal up $0.49; Soyoil up 3.12. For the month to date wheat prices are up 204 1/2 in SRW, up 179 1/4 in HRW, up 117 in HRS; Corn is up 66 1/2; Soybeans up 74 1/2; Soymeal up $35.60; Soyoil up 2.91.

Year-To-Date nearby futures are up 48% in SRW, up 41% in HRW, up 13% in HRS; Corn is up 28%; Soybeans up 29%; Soymeal up 17%; Soyoil up 34%.

Chinese Ag futures (MAY 22) Soybeans down 30 yuan; Soymeal up 24; Soyoil down 76; Palm oil up 258; Corn up 3 — Malaysian palm oil prices overnight were up 228 ringgit (+3.82%) at 6195.

There were no changes in registrations. Registration total: 2,185 SRW Wheat contracts; 1 Oats; 15 Corn; 247 Soybeans; 98 Soyoil; 0 Soymeal; 154 HRW Wheat.

Preliminary changes in futures Open Interest as of March 22 were: SRW Wheat up 1,791 contracts, HRW Wheat up 943, Corn up 4,260, Soybeans up 2,624, Soymeal up 2,265, Soyoil up 1,450.

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

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

Western Midwest Forecast: Scattered showers through Wednesday. Mostly dry Thursday. Isolated showers north Friday. Mostly dry Saturday. Temperatures above normal Tuesday, near to above normal Wednesday, near to below normal Thursday, near to above normal Friday, near to below normal Saturday.

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

 Brazil Grains & Oilseeds Forecast: Rio Grande do Sul and Parana Forecast: Isolated to scattered showers Wednesday-Friday. Mostly dry Saturday. Temperatures near normal Tuesday-Wednesday, near to above normal Thursday, near to below normal Friday-Saturday. Mato Grosso, MGDS and southern Goias Forecast: Isolated showers through Saturday. Temperatures near to above normal through Saturday.

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

The player sheet for 3/22 had funds: net sellers of 0 contracts of  SRW wheat, sellers of 0 corn, sellers of 3,000 soybeans, sellers of 4,000 soymeal, and  buyers of 2,500 soyoil.

TENDERS

• SOYOIL SALE: Egypt’s state grains buyer said on Tuesday it had bought 80,000 tonnes of soyoil in an international tender for arrival May 5-25, making its biggest and priciest oils purchase in months.
• SOYBEAN SALE: The U.S. Department of Agriculture confirmed private sales of 240,000 tonnes of U.S. soybeans for shipment to unknown destinations in the 2021/22 marketing year.
• CORN TENDERS: Turkey’s state grain board TMO issued two tenders seeking a total 500,000 tonnes of animal feed corn in a combination of imports and supplies already in Turkey
• WHEAT TENDER UPDATE: Iraq’s state grains buyer has extended the deadline for the validity of price offers in a tender to buy a nominal 50,000 tonnes of hard milling wheat
• WHEAT TENDER: Bangladesh’s state grains buyer has issued another international tender to purchase 50,000 tonnes of milling wheat

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
• SOYOIL TENDER: Iran’s state purchasing agency GTC has issued an international tender to purchase about 30,000 tonnes of soyoil
• WHEAT TENDERS: Turkey’s state grain board TMO has issued international tenders to purchase a total 455,000 tonnes of milling wheat
• 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 has issued an international tender to buy 120,000 tonnes of milling wheat sourced from optional origins
• BARLEY TENDER: A buyer in Qatar has issued a tender to buy an estimated 105,000 tonnes of animal feed barley

AGP Soybean-Meal Export Hub To Be Expanded Following Accident

Farm cooperative Ag Processing’s board has approved a “major expansion and upgrade” of its U.S. West Coast export facilities that handle almost 20% of the country’s soybean meal exports, the closely held company said in a news release.

• The expansion will enable the company to load multiple ships, up to and including Panamax-sized vessels; operations are expected to begin in 2025: statement
• The move also comes as U.S. soybean meal production is expected to outpace historical increases in domestic usage due to a surge in demand for soy oil by energy companies looking to use it to make renewable diesel

EU Soft-Wheat Exports Fall 2.1% in Season Through March 20

Soft-wheat shipments during the season that began July 1 totaled 19.6m tons as of March 20, versus 20m tons in a similar period a year earlier, the European Commission said Tuesday 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 (2.95m tons), China (2.04m tons) and Egypt (1.95m tons)
• EU barley exports at 5.71m tons, versus 5.74m tons a year earlier
• EU corn imports at 11.9m tons, steady with a year earlier

China’s agricultural product wholesale price index edges up

The wholesale prices of China’s agricultural products went up Wednesday, according to the Ministry of Agriculture and Rural Affairs.

The latest China agricultural product wholesale price index came in at 134.01, up 0.07 points from Tuesday.

By 2 p.m. Wednesday, the average wholesale price of pork, China’s staple meat, went up 0.9 percent to 18.16 yuan (2.86 U.S. dollars) per kg, and that of eggs was up 1.5 percent to 9.37 yuan per kg.

The average wholesale price of 28 key types of vegetables tracked by the government went up 0.7 percent, coming in at 5.76 yuan per kg, while that of six key types of fruits edged up 0.6 percent to 6.8 yuan per kg.

The wholesale price index is compiled on the basis of data collected from around 200 agricultural wholesale markets and is updated daily based on the weighted average of price indices for goods including vegetables, fruits, aquatic products, livestock products, cereals and edible vegetable oil.

Ukraine 2022 spring crop sowing area could be halved – minister

Ukraine’s spring crop sowing area may more than halve this year from 2021 levels to some 7 million hectares, its Agriculture Minister Roman Leshchenko said on Tuesday, versus 15 million hectares expected before the Russian invasion.

Ukraine is a major global agriculture producer and exporter, and the hostilities may sharply reduce the 2022 harvest and exports in the forthcoming 2022/23 season.

Its spring crop sowing forecast covers grains such as barley and corn, as well as other crops such as sugar beet, sunflowers and soybeans.

“The adjusted plan currently stands at 7 million hectares. We have actually corrected (the initial plan) by half. There will be less corn,” Leshchenko told Reuters.

“We have large stocks of corn, and how to export it later is a very difficult question.”

He said farmers could sow up to 3.3 million hectares of corn this year versus 5.4 million hectares in 2021.

Leshchenko said the ministry had urged farmers to sow more spring wheat, buckwheat, oats, millet and spring barley. He gave no forecast for the sown area of those specific crops, but said overly dry weather could affect the sowing.

“Today, the issue of food security is at the forefront,” the minister said.

Ukraine sowed only 176,000 hectares of spring wheat last year as the country is a traditional grower of winter wheat.

Leshchenko said farmers sowed a total of 6.5 million hectares of winter wheat for the 2022 harvest, but the harvested area could be only around 4 million hectares due to war in many Ukrainian regions.

He declined to forecast the 2022 grain harvest, because “the situation has not fully stabilized”, he said.

“The territory of hostilities is constantly moving, and we hope that there will be some changes in the situation in terms of achieving peace, and we will be able to plant at least late crops those areas that are now in the war zone.”

Ukraine harvested a record 84 million tonnes of grain in 2021 and initially expected to ship abroad 65 million tonnes of grain, including 25.3 million tonnes of wheat and 40 million tonnes of corn.

Ukrainian agriculture consultancy APK-Inform this weekend said the export of wheat would not exceed 18.3 million tonnes this season and only 200,000 tonnes of the commodity could be sold from March to June.

Ukraine has already suspended exports of rye, oats, millet, buckwheat, salt, sugar, meat and livestock in the face of the invasion, and introduced licences for wheat, corn and sunflower oil exports.

Leshchenko said the government was considering lifting the requirement for export licences for corn and sunoil, as its stocks are sufficient.

President Volodymyr Zelenskiy told the Italian parliament on Tuesday that Russia’s attack on Ukraine risked causing famine in countries around the world.

Paris Rapeseed Futures Top 1,000 Euros/Ton for First Time

Rapeseed futures on the Euronext exchange rise as much as 2.6% to EU1,020/ton.

• That’s an all-time high for the most-active contract and the first time trading above EU1,000

IHS Markit trims its 2022 U.S. corn acres outlook, raises soybeans

Private analytics firm IHS Markit Agribusiness on Tuesday trimmed its U.S. corn plantings outlook for 2022 compared with its late January projection and raised its soybean plantings view, according to portions of an IHS client note seen by Reuters.

• The firm projected U.S. 2022 corn plantings at 91.419 million acres, down from a Jan. 26 forecast of 91.489 million acres, and below the 93.357 million acres that the U.S. Department of Agriculture (USDA) said farmers planted in 2021.
• IHS forecast 2022 soybean plantings at 88.580 million acres, up from its Jan. 26 figure of 87.805 million acres and above the USDA’s estimate of 2021 soybean plantings of 87.195 million.
• IHS projected all U.S. wheat plantings at 47.467 million acres, up from the 46.703 million acres planted in 2021, according to the USDA.
• IHS kept its U.S. winter wheat plantings estimate unchanged at 34.397 million acres, in line with the latest USDA forecast and up from the 33.648 million acres that U.S. farmers planted for 2021.
• Spring wheat plantings (excluding durum) for 2022 were seen by IHS at 11.320 million acres, down from the 12.010 million projected in late January and down from 11.420 million acres seeded in 2021.
• IHS left its 2022 durum wheat plantings forecast unchanged 1.750 million acres, above the 1.635 million acres planted in 2021.
• IHS projected U.S. 2022 plantings of Upland cotton at 11.607 million acres, up from its late January outlook for 11.702 million acres and up from the 11.093 million acres USDA said farmers planted in 2021.
• Pima cotton plantings were projected by IHS at 132,000 acres, unchanged from its prior forecast and up from the 126,500 acres USDA said were planted last year.

Argentina has sold 18.8 mln tonnes of 21/22 corn -Agriculture Ministry

Argentina producers have sold 18.8 million tonnes of corn for the 2021/22 season, the Ministry of Agriculture said on Tuesday.

According to the ministry, the country recorded 1.3 million tonnes of corn sold between March 9 and 16, two times the volume registered in the same period a year ago, boosted by the conflict between Russia and Ukraine that has cut the global supply of the grain.

Argentina is the second-largest world exporter of corn and its farmers are beginning to harvest the 2021/22 cereal, which the Buenos Aires Cereal Exchange (BdeC) estimates at 51 million tonnes.

At the end of last year, the Argentine government set a limit on corn exports for the 2021/22 cycle of 41.6 million tonnes to try to control high domestic food prices.

Regarding 2021/22 soybeans, Argentine farmers have sold 10.8 million tonnes of the oilseed, whose harvest will begin in the coming weeks, according to the government. On the same date last season, the sales volume had been 12.4 million tonnes.

The BdeC estimated soybean production for the current campaign at 42 million tonnes.

Foreign exchange from agricultural exports is essential for Argentina’s battered economy, which is only now beginning to grow after more than two years of stagnation that was aggravated by the effects of the pandemic.

China’s Soybean Imports From U.S. and Brazil Shrank in February

China’s soybean imports from the U.S. declined 41% in February from a month earlier to 3.71m tons, according to Chinese customs data.

• That’s 30% lower than the same month last year
• Imports from Brazil fell 42% on month to 1.29m tons in February; compares with just 33,450 tons a year ago, customs data show
• NOTE: China Jan.-Feb. Soybean Imports 13.94m Tons: Customs

CORN

• China imported 968,173 tons of U.S. corn in February, +1% y/y
• Shipments from Ukraine were 914,150 tons, +12% y/y
• NOTE: China Feb. Corn Imports 1.93M Tons, +8.4% Y/y

Brazil Corn Exports Seen Reaching 110,000 T In March – Anec

• BRAZIL SOYBEAN EXPORTS SEEN REACHING 12.9 MILLION TNS IN MARCH VERSUS 12.9 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC
• BRAZIL SOYMEAL EXPORTS SEEN REACHING 1.845 MILLION TNS IN MARCH VERSUS 2.011 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC
• BRAZIL CORN EXPORTS SEEN REACHING 110,000 TNS IN MARCH VERSUS 55,000 TNS FORECAST IN PREVIOUS WEEK – ANEC
• BRAZIL WHEAT EXPORTS SEEN REACHING 522,164 TNS IN MARCH VERSUS 501,730 TNS FORECAST IN PREVIOUS WEEK – ANEC

Hungary Walks Back Talk of Outright Ban on Grain Exports

• Government is still allowing exports while enough local supply
• Authorities have option to step in if needed, ministry says

Hungary said it’s still allowing grain exports while there’s sufficient local supplies, after earlier this month announcing restrictions to protect the domestic food market.

The country is among a number of nations that signaled food protectionist measures in the wake of Russia’s invasion of Ukraine. But rather than instituting an outright export ban as the agriculture minister indicated in early March, Hungary ultimately approved an order giving the state preemptive rights to buy grains destined for export.

Authorities haven’t exercised that option so far, the Agriculture Ministry said.

“We’re allowing grain exports in full as long as it doesn’t endanger domestic supplies,” it said in response to questions. “If we assess that we need to protect supplies, the state will exercise its preemptive purchase option.”

Governments including Argentina, Turkey, Serbia and Egypt have moved to protect local food supplies as the war in Ukraine disrupts grain flows out of the crucial Black Sea region, boosting prices. That’s bad news for food importers, especially countries in regions like North Africa that rely on overseas supplies to subsidize bread.

Read More: Food Security Panics Governments as Ukraine War Blocks Supplies

Hungarian Prime Minister Viktor Orban, who’s facing elections next month, has instituted a price cap on some staple food items to help blunt the pain to consumers caused by surging prices.

Brazil grain exporters face trouble as port tax collectors protest

Agricultural exporters in Brazil are facing a hard time getting paid for their shipments due to a protest by tax collectors at Latin America’s busiest port, the National Association of Grain Exporters (Anec) told Reuters on Tuesday.

The protest is delaying the issuance of phytosanitary certificates, an inspection document used for plant products, which is required for exporters to receive payments, Anec’s director Sergio Mendes said. Inspections can only happen once tax collectors have cleared the shipments.

The setback comes as Brazil reaches a seasonal peak for soybean shipments. The Santos port in Sao Paulo, where the protest is taking place, accounts for about 30% of the country’s soybean exports and half of its corn and soy meal exports.

“A 65,000-tonne soybean shipment is currently worth $42 million, and if the exporters do not get the phytosanitary certificate, they will not get that revenue as well,” Mendes said.

Major global grain traders are among Anec’s associates, including Archer Daniels Midland Co, Cargill Inc and Louis Dreyfus Company

Brazilian tax collectors have initiated a work-to-rule effort – which legally allows workers to meet only the minimum job requirements – last year as they campaign for higher wages.

The labor action has just recently started affecting the grain industry, Mendes said, adding that he sent a letter to Economy Minister Paulo Guedes asking for solutions.

Brazil’s Economy Ministry did not immediately respond to a request for comment, while the federal revenue service declined to comment.

Mauro Silva, head of tax collectors’ union Unafisco, said the workers will keep protesting.

“If our problem does not get solved by the end of April, the work-to-rule effort might be kept in place until a new administration takes office,” Silva said.

Brazil will hold general elections in October. Far-right President Jair Bolsonaro is expected to run for re-election, but he currently trails former leftist President Luiz Inacio Lula da Silva in opinion polls. The winner will take office in January 2023.

Brazil tax cut for ethanol, sugar, soy oil imports to have little impact -analysts

Brazil’s recently announced tax cut for ethanol, sugar and soy oil imports should have little impact on trade deals in the short term and was driven more by politics than business, analysts said on Tuesday.

The move came as the government tries to tame double-digit annual inflation, with import tariffs for ethanol and six food products – ground coffee, margarine, cheese, pasta, sugar and soy oil – being zeroed until the end of 2022. (Full Story)

President Jair Bolsonaro said that cutting taxes on ethanol imports to zero from 18% should lower gasoline prices at the pump by up to 0.20 real ($0.0406) per liter – local laws require the biofuel to be blended into gasoline. Analysts, however, saw the move as having little impact for now.

Even with no taxes levied on it, imported ethanol would enter Brazil with prices 8% to 10% higher than local ones, which are set to further decline beginning in April, when sugarcane crushing begins in Brazil.

“We are on the cusp of the new sugarcane crop, when the prices will drop, so we expect the arbitrage window to remain closed even with zero tax,” Datagro’s analyst Plinio Nastari said.

“Brazilian ethanol tends to get more competitive in the coming weeks with producer prices falling, and that should be passed on to consumers,” he added.

Nastari also said that lower taxes on sugar imports should have no practical effect, as Brazil – the world’s No. 1 exporter – has the lowest sugar cost around the globe.

The move is also unlikely to draw soy oil imports, according to Safras & Mercado’s analyst Luiz Fernando Roque.

Dry conditions may lower EU-27 + UK wheat production

Our production outlook for 2022/23 EU-27 + UK wheat remains unchanged at 163.0 [159.7-166.3] million tons.

A split temperature pattern was observed across Europe over the past two weeks. North-west Europe experienced slightly above normal warmth whilst south-east regions saw below normal temperatures with the coldest temperatures noted in Balkans. Overall conditions were fair with no extreme temperatures that would have negatively affected winter crops. Dryness is in place and most of the continent saw rain deficits, except UK, Ireland, Portugal, Spain and south-west France which received above normal precipitation, making up for the long-term dryness there.

Upcoming days will bring mild weather with near or above normal temperatures across most of continent. Below normal cold is expected later this week and early next week in the north Europe with minus temperatures predicted in north-west countries. Very dry conditions are expected across Europe in the upcoming week. Precipitation surpluses are likely to be observed only in Norway and Iberian Peninsula. Precipitation and soil moisture patterns will be closely monitored as winter crops are heading towards exit from dormancy stage in coming weeks and dry conditions may lower yield potentials.

China Faces Worst Crop Conditions Ever Due to Climate Change

The country’s agriculture minister said last year’s record-breaking floods have created “big difficulties” with food production

More extreme weather caused by rising global temperatures — compounded by geopolitical turmoil and the pandemic — is hindering China’s effort to ensure food supplies for its 1.4 billion population.

President Xi Jinping has made food security a priority for the world’s second-biggest economy, an effort to meet the soaring demand that’s pushed imports of corn, soybeans and wheat to record levels, making Beijing increasingly vulnerable to trade tensions and supply shocks. At the same time, climate change-induced disasters have caused widespread crop damage and shrunk the amount of arable land, making it harder to boost local production.

Tang Renjian, the country’s agriculture minister, brought up the threat at a high-profile government meeting in Beijing this month. “China faces big difficulties in food production because of the unusual floods last autumn,” he told reporters. “Many faming experts and technicians told us that crop conditions this year could be the worst in history.”

More than 860 people died or went missing in natural disasters last year, which damaged almost 30 million acres of crops. Record-breaking rains in the central province of Henan in July alone damaged 2.1 million acres of farmland. The floods delayed planting on more than 18 million acres of land, about one-third of China’s total winter wheat acreage. The amount of first- and second-grade crops, where there are more than 2.7 million seedlings on every acre of land, fell by more than 20% this year compared with normal years.

Climate change hurts China’s pursuit of food security in two ways, according to Zhang Zhaoxin, a researcher with the agricultural ministry. More frequent extreme weather events are already lowering crop yields. Meanwhile, increasingly unpredictable seasons can undermine farmers’ confidence and potentially worsen the sector’s existing labor shortage.

Farmers in northern China are used to droughts, not floods, Zhang said. In many of the regions that were affected by torrential rain last year, farmers couldn’t harvest their corn because their machinery couldn’t handle the water. There wasn’t enough infrastructure such as pipes and systems to drain the field in time.

Those issues are set to get more serious as the planet warms. Seasonal droughts will reduce yields of China’s three major staple foods — rice, wheat and corn — by 8% by the end of the decade, according to World Resources Institute. In the longer term, climate change also means rising coastal waters along the long and low eastern coal could further stress the agricultural industry.

Egypt has strategic vegoil reserves enough for 6 months – official

Egypt has strategic vegetable oils reserves enough for 6 months, Ahmed Kamal, an aide for the supply minister, told Reuters on Tuesday.

Egypt’s state grains buyer GASC said on Tuesday it had bought 80,000 tonnes of soyoil in an international tender for arrival May 5-25

France lets some farms asphyxiate poultry flocks to stop bird flu

France has authorized some farmers to kill their poultry by asphyxia to stop a rapid spread of bird flu that has made it difficult for veterinary services to cope with massive culling, French Agriculture Minister Julien Denormandie said on Tuesday.

The practice, allowed only because of a rebound in outbreaks in the western part of the country that hosts about 25% of the country’s poultry flock, has come under fire from farm unions and animal welfare activists who say it is cruel and unacceptable.

“We prefer other solutions, but (stopping ventilation to cause asphyxiation) may be authorized in some cases when it is considered that it is the only solution to avoid situations where you have animals dying during several hours or several days,” Denormandie said in answer to a question.

After a wave of cases in the southwest of France led to the culling of about 4 million birds, France is trying to contain outbreaks that have spread rapidly over the past month in the Pays de la Loire region, a major poultry zone further up France’s Atlantic coast.

In just a few weeks, the virus also led to the culling of nearly five million poultry in Vendee and neighbouring departments, Denormandie said after a meeting with farm unions and local authorities.

A total of 975 outbreaks of highly pathogenic bird flu were found in poultry farms by March 22 since the first outbreak on a farm was discovered on Nov. 26 last year, farm ministry data shows.

Bird flu is often carried by migrating wild birds. The extremely aggressive and highly contagious H5N1 strain has been spreading quickly in Europe in recent months, prompting massive culls in several countries, notably Italy. (Full Story)

In France, poultry are most often culled by euthanasia, using special gas units that ensure animals do not suffer.

Deere Leads Gains in Machinery Stocks Since Start of Ukraine War

Deere shares jumped as much as 3.3% on Tuesday to touch a record high, extending a rally since the beginning of Russia’s Ukraine invasion last month. Analysts said the jump in the stock price reflected an expectation for higher demand for the company’s farm equipment as the geopolitical crisis disrupts supply chains.