Global Ag News for Mar 8.22

TODAY

Wheat prices overnight are down 1 3/4 in SRW, down 39 1/4 in HRW, down 32 1/2 in HRS; Corn is down 7 1/2; Soybeans up 19 1/4; Soymeal up $0.48; Soyoil up 0.43.

For the week so far wheat prices are up 83 1/4 in SRW, down 2 1/4 in HRW, up 18 in HRS; Corn is down 10 3/4; Soybeans up 17 3/4; Soymeal up $0.31; Soyoil up 1.85. For the month to date wheat prices are up 358 1/4 in SRW, up 259 1/4 in HRW, up 171 in HRS; Corn is up 52 1/2; Soybeans up 42; Soymeal up $17.20; Soyoil up 2.13.

Year-To-Date nearby futures are up 69% in SRW, up 54% in HRW, up 21% in HRS; Corn is up 24%; Soybeans up 28%; Soymeal up 13%; Soyoil up 39%.

Chinese Ag futures (MAY 22) Soybeans down 49 yuan; Soymeal up 75; Soyoil down 154; Palm oil down 152; Corn down 25 Malaysian palm oil prices overnight were down 210 ringgit (-3.17%) at 6416.

There were changes in registrations (-2 Soybeans, -2 HRW Wheat). Registration total: 2,185 SRW Wheat contracts; 0 Oats; 17 Corn; 66 Soybeans; 98 Soyoil; 0 Soymeal; 168 HRW Wheat.

Preliminary changes in futures Open Interest as of March 7 were: SRW Wheat up 917 contracts, HRW Wheat down 2,589, Corn down 1,920, Soybeans up 1,212, Soymeal down 4,512, Soyoil down 6,284.

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

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

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

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

Western Midwest Corn, Soybean and Winter Wheat Forecast: Showers waning early Monday. Mostly dry Tuesday. Scattered showers Wednesday-Friday. Temperatures below normal through Wednesday, well below normal Thursday-Friday.

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

The player sheet for 3/7 had funds: net buyers of 14,000 contracts of  SRW wheat, sellers of 2,500 corn, buyers of 1,000 soybeans, sellers of 2,000 soymeal, and  buyers of 4,000 soyoil.

TENDERS

• SOYBEAN SALE: The U.S. Department of Agriculture confirmed private sales of 66,000 tonnes of U.S. soybeans to China for shipment in the 2021/22 marketing year and 66,000 tonnes for 2022/23.
• 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
• WHEAT TENDER: Algeria’s state grains agency OAIC has issued an international tender to buy soft milling wheat to be sourced from optional origins
• WHEAT, BARLEY TENDER: Tunisia’s state grains agency has issued an international tender to purchase an estimated 125,000 tonnes of soft wheat and 100,000 tonnes of animal feed barley
• FAILED SOYMEAL TENDER: South Korea’s largest feedmaker Nonghyup Feed Inc (NOFI) is believed to have rejected all offers and made no purchase in a tender for 60,000 tonnes of soymeal which closed on Monday
• SOYOIL TENDER: Iran’s state purchasing agency GTC has issued an international tender to purchase about 30,000 tonnes of soyoil

PENDING TENDERS

• WHEAT TENDER: Leading South Korean feed maker Nonghyup Feed Inc. (NOFI) has issued an international tender to purchase up to 130,000 tonnes of animal feed wheat with the Black Sea region among areas excluded as a supply origin
• BARLEY-SOYMEAL-CORN TENDER: Iranian state-owned animal feed importer SLAL issued international tenders to purchase up to 60,000 tonnes of barley and 60,000 tonnes of soymeal, and 60,000 tonnes of feed corn
• RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 72,200 tonnes of rice to be sourced from the United States and Vietnam
• WHEAT TENDER: Iraq’s trade ministry has requested funds to cover the importation of two million tonnes of wheat to provide a strategic reserve, trade ministry spokesman Mohamed Hanoun said in remarks carried by state media. Iraq will accept offers from international companies for wheat from March 6.
• WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy 120,000 tonnes of milling wheat which can be sourced from optional origins
• BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase 120,000 tonnes of animal feed barley
• WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of milling wheat

U.S. Inspected 1.582m Tons of Corn for Export, 766k of Soybean

Brazil Soybean Output Est. Cut to 122.8M MT vs 128.5M: AgRural

• Estimate cut due to drought in Brazil’s Southern region and in the south of Mato Grosso state, consulting firm AgRural says in an emailed report.
  • Excess rainfall also leading to lower yields in Mato Grosso and Minas Gerais states
  • Output forecast based on an estimated area of 40.6m ha and average yield of 50.4 bags per ha, the lowest since the 2015/16 crop
  • Soybean harvest 55% done as of March 3, vs 44% a week earlier and 35% a year earlier
• Seeding of Brazil’s 2022 winter corn 81% completed in the Center-South, vs 64% a week earlier and 54% a year earlier
  • Summer corn harvest 45% done in the Center-South, vs 35% a year before

Some Russian Traders Are Buying Wheat After Pause: SovEcon

“Russian Black Sea terminals are operating, but shipowners are still not ready to send their vessels in the region,” consultant SovEcon says by email.

• “However, in recent days, a few Russian traders started to buy wheat in Russian ports after a pause”
• SovEcon estimates Russian wheat exports in the 2021-22 season at 33.5m tons, down 0.8m tons from prior forecast
• Military action in the Black Sea will hamper exports in March and April, with shipments seen at 1m tons per month
  • Most of that will be shipped by land
• Sales could pick up in May and June to ~2m tons per month, SovEcon says

Iraq to create strategic wheat reserve by importing 3 mln tons -minister

Iraq will allocate $100 million to urgently purchase wheat and create a strategic reserve by importing 3 million tons of the grain, the commerce minister said in a statement on Monday.

“The ministry has a plan to achieve food security for citizens and to address the global rise in food prices due to the recent crisis between Russia and Ukraine,” the statement quoted minister Alaa al-Jubouri as saying.

Rain then dry spell positive for Argentine crops, harvest: weather expert

More rains expected in coming days will help Argentina’s corn and soy crops in their late development stages, an agricultural meteorologist told Reuters on Monday, adding that drier weather later in the month could also support the start of the harvest.

Argentina, which has seen its 2021/22 corn and soy crops hit hard by drought early in the year, has seen recent rains put a line under those losses, key for the world’s no. 1 exporter of processed soy which relies on grain export dollars.

German Heinzenknecht, a weather expert at the Applied Climatology Consultancy (CAA), said farming regions would see more rainfall in the coming week after some 20-30 millimeters in the agricultural heartland over the weekend.

“The first fortnight will be good to help complete crop development,” he said. “The second, if it is as expected, would be quite favorable for the start of the harvest. If that pattern of rainfall happens, it would be excellent.”

Heinzenknecht said that while recent rains came too late to avoid losses for 2021/22 soybeans, they could give boost to late planted batches of corn.

The Buenos Aires grains exchange estimates the soybean harvest at 42 million tonnes and the corn crop at 51 million tonnes, after having cut their forecasts by 2 million tonnes and 5 million tonnes respectively due to the drought.

The Rosario exchange is more pessimistic, pegging soy production at 40.5 million tonnes and corn at 48 million tonnes.

Heinzenknecht, who previously cautioned about excess water creating an issue for farmers harvesting crops, now downplayed that risk. “Growers are now waiting to prepare their machines to go in to do the harvest,” he said.

The Argentine soybean harvest usually begins in the last weeks of March, when the austral autumn begins. Corn threshing has already started, earlier than normal due to the drought, and is around 5% complete.

WHEAT/CEPEA: Prices skyrocket abroad; in BR, values do not rise as much

Agents in the international market of wheat have been concerned about the effects of the Russia-Ukraine war on the wheat exports from these countries. Activities have been halted at the ports in Ukraine since the beginning of the conflict, and next crop’s sowing in that country may be hampered or even not happen.

Thus, wheat quotations at stock exchanges in the United States continue on the rise, hitting record levels. In Argentina, prices have increased sharply too. Thus, values in Brazil are expected to increase in the coming weeks. So far, the number of domestic deals has been constrained by uncertainties related to future trends.

In the United States, future prices have increased so high that they hit the roof everyday last week. At CME Group, the March/22 contract for the Soft Red Winter wheat rose by a staggering 59.5% between Feb. 25 and Mar. 4, from USD 8.43/bushel to USD 13.4800/bushel (USD 495.31/ton), a record. This year, prices have increased by 74.9%. At the Kansas Stock Exchange, the Mar/22 future for Hard Winter wheat rose by 35.4% in the last seven days, from USD 8.8675/bushel to USD 12.0075/bushel (USD 441.20/ton), the highest level since February 2008. This year, prices have increased by 49.8%.

In Argentina, FOB prices rose by a staggering 18.1% at the port of Buenos Aires between Feb. 25 – Mar. 4, to USD 425.00/ton on Friday, 4, also a record, according to data from the Ministry of Agroindustry in Argentina.

In Brazil, prices have not increased that much yet, due to low liquidity in the domestic market, however, quotations are expected to increase soon and valuations, to be passed on to by-products. As the major wheat supplier to Brazil is Argentina, so far, there is no evidence of supply issues.

On the other hand, the dollar depreciation against the Real may not be enough to press down the export parity and offset the effects of higher international prices. The American currency dropped by 1.28% compared to the Real between Feb. 25 – Mar. 4, to BRL 5.079 on Friday (4).

Based on data from Conab (Brazil’s National Company for Food Supply), between Feb. 21 – 25, the import parity price for the wheat from Argentina delivered to Paraná State was USD 312.92/ton. Considering the average of the US dollar in that period, at BRL 5.0858, the wheat imported was sold at BRL 1,591.47/ton, while for the Brazilian wheat traded in Paraná, the average was higher, at BRL 1,715.52/ton, according to data from Cepea. In Rio Grande do Sul, the import parity for the product from Argentina would be of USD 293.30/ton (BRL 1,491.64/ton), against BRL 1,591.10/ton on the average of the state surveyed by Cepea. Therefore, parity was much lower than the current price levels in Argentina, which is expected to influence new purchases and import costs.

In the Brazilian spot market, data from Cepea show that, between Feb. 25 – Mar. 4, the prices paid to wheat farmers rose by 5.77% in Rio Grande do Sul (RS), 5.21% in Paraná (PR) and 0.54% in Santa Catarina (SC). In the wholesale market (deals between processors), quotations increased by 4.84% in RS, 3.18% in São Paulo (SP), 2.96% in SC and 1.63% in PR.

Biofuel Production in Malaysia Seen at 1.2M Tons in 2022: Group

Output this year may climb from 1m tons in 2021, according to U. R. Unnithan, president of the Malaysian Biodiesel Association.

• Biodiesel exports are seen falling to about 250,000 tons in 2022 from 300,000 tons last year, he said at an industry conference in Kuala Lumpur on Tuesday
  • Local blending may rise to 950,000 tons from 700,000 tons
• There’s little room for discretionary blending because biofuel has become much more expensive than diesel; biodiesels may not have much traction without government mandates
  • Still, it’s difficult to sustain the blending program at prevailing prices even with government subsidies, he said
• Palm oil prices seen trading between 6,000 ringgit and 7,000 ringgit a ton in next 3 months
  • Prices may average 5,000-5500 ringgit this year
• Palm oil-gasoil spread may average $450-$500/ton in 2022
  • The spread was $238 a ton on Tuesday

Malaysia to Fully Implement B20 Biofuel Plan By Year-End: Group

Malaysia may only fully implement its B20 biodiesel plan in the transport sector by year-end as pandemic delayed upgrading of infrastructure, said Malaysian Biodiesel Association President U. R. Unnithan.

• There are still many uncertainties that can affect the higher biodiesel blend rollout, including the war in Ukraine, political uncertainties and fluctuating spread between palm oil and gas oil, Unnithan said in an interview on Tuesday
• At the moment B20 is only implemented in Sarawak and Labuan; the rest of the country’s transport sector is still using B10
• Domestic consumption of biodiesel may rise to around 800,000 tons from 700,000 tons last year as Covid restrictions ease and more people travel
• Escalation of the war in Ukraine and crude oil’s price response will be important in determining palm-gas oil spread
  • Higher crude oil prices will narrow the spread and make biodiesel a more feasible option
• It is unlikely that Indonesia will pull back B30 mandate for now; top grower may slow its implementation of B40

Malaysia Expects Palm Oil to Drop in 3Q as Production Climbs

Malaysia plans to ramp up palm oil output to 20m tons this year as foreign workers are set to arrive in May-June, Plantation Industries and Commodities Minister Zuraida Kamaruddin said at a briefing.

• NOTE: That’s a rise from about 18m tons last year, a five-year low
• Malaysia looks to reduce dependency on foreign labor in plantations
• Automation will increase in 3 to 5 years, which will help lower dependence on foreign labor by 40%
• Malaysia needs to be prepared to boost productivity and supply palm oil due to situation in Ukraine
• Malaysia is planning targeted subsidies for cooking oil
• Govt still discussing subsidy rationalization; cooking oil subsidises currently cover 720,00 tons
• Palm oil prices have likely peaked, MPOB Director-General Ahmad Parveez Ghulam Kadir said at the same briefing
• Prices to ease but remain above 5,000 ringgit a ton in next few months unless there are new developments in Russia-Ukraine conflict

Iowa reports highly pathogenic bird flu again this week

A highly pathogenic form of bird flu was reported in a commercial turkey flock in Iowa, making it the second reported outbreak in the top egg-producing state of the United States in less than a week.

The outbreak was confirmed in Buena Vista County on Monday by the Iowa Department of Agriculture and the United States Department of Agriculture’s (USDA) Animal and Plant Health Inspection Service (APHIS).

“The Iowa Department of Agriculture and USDA APHIS are working diligently with producers to trace back, control and eradicate this disease from our state,” Iowa Secretary of Agriculture Mike Naig said in a statement.

Last week, Iowa reported a case of bird flu in a backyard poultry flock in Pottawattamie County. Over the past month, highly lethal bird flu cases have been confirmed at commercial farms in Indiana, Kentucky and Delaware, triggering export restrictions for U.S. poultry products.

In 2015, Iowa was at the center of the biggest-ever U.S. outbreak of avian flu, which killed about 50 million birds.