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Global Ag News for Oct 11th

TODAY – EXPORT INSPECTIONS, CROP PROGRESS

Wheat prices overnight are up 4 3/4 in SRW, up 3 3/4 in HRW, up 1/2 in HRS; Corn is up 1; Soybeans up 2; Soymeal up $0.09; Soyoil up 0.17.

Markets finished last week with wheat prices down 18 in SRW, down 15 in HRW, up 16 3/4 in HRS; Corn is down 8 3/4; Soybeans up 12 1/4; Soymeal down $0.35; Soyoil up 2.96. For the month to date wheat prices are up 13 1/4 in SRW, up 9 1/2 in HRW, up 34 1/2 in HRS; Corn is down 5 1/4; Soybeans down 11; Soymeal down $9.10; Soyoil up 2.99.

Chinese Ag futures (JAN 22) Soybeans up 40 yuan ; Soymeal down 17; Soyoil up 72; Palm oil up 150; Corn up 34 — Malasyian Palm is down 13. Malaysian palm oil prices overnight were down 13 ringgit (-0.26%) at 4953.

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

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

Midwest corn, soybean and winter wheat forecasts: West: Isolated showers north Friday-Saturday. Isolated to scattered showers Sunday-Monday. Mostly dry Tuesday. Temperatures above to well above normal through Tuesday. East: Scattered showers Friday. Isolated showers Saturday. Mostly dry Saturday-Sunday. Scattered showers Monday-Tuesday. Temperatures above to well above normal through Tuesday. 6 to 10 day outlook: Isolated to scattered showers Wednesday-Saturday. Mostly dry Sunday. Temperatures above to well above normal Wednesday-Thursday, near to above normal Friday-Sunday.

The player sheet for Oct. 8 had funds: net sellers of 5,000 contracts of  SRW wheat, sellers of 2,000 corn, sellers of 3,000 soybeans, sellers of 1,000 soymeal, and  sellers of 1,000 soyoil.

There were changes in registrations (-29 Soyoil). Registration total: 1,180 SRW Wheat contracts; 2 Oats; 17 Corn; 1 Soybeans; 336 Soyoil; 1 Soymeal; 1,273 HRW Wheat.

Preliminary changes in futures Open Interest as of October 7 were: SRW Wheat up 4,288 contracts, HRW Wheat up 1,718, Corn up 1,818, Soybeans up 3,637, Soymeal up 3,883, Soyoil up 9,037.

TENDERS

  • FEED WHEAT SALE: An importer group in the Philippines is believed to have bought around 56,000 tonnes of Australian-origin animal feed wheat in a tender for up to 224,000 tonnes which closed on Thursday
  • WHEAT SALE: Japan’s Ministry of Agriculture bought 130,963 tonnes of food-quality wheat from the United States, Canada and Australia in a regular tender.

PENDING TENDERS

  • WHEAT TENDER: A United Nations agency has issued an international tender to purchase about 200,000 tonnes of milling wheat on behalf of the Ethiopian government
  • WHEAT TENDER: A government agency in Pakistan has issued an international tender to purchase and import 90,000 tonnes of wheat, keeping up a trend of strong import demand after more than 1.1 million tonnes bought in past weeks
  • FEED WHEAT, BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said on Wednesday it will seek 80,000 tonnes of feed wheat and 100,000 tonnes of feed barley to be loaded by Jan. 31, 2022 and arrive in Japan by Feb. 24. Both to be sought via a simultaneous buy and sell (SBS) auction that will be held on Oct. 13.
  • WHEAT TENDER: Jordan’s state grain buyer has issued an international tender to buy 120,000 tonnes of milling wheat sourced from optional origins
  • CORN TENDER: TMO has issued an international tender to purchase a total of 325,000 tonnes of animal feed corn
  • WHEAT TENDER: The Ethiopian government has issued a new international tender to buy about 300,000 tonnes of milling wheat

TODAY – EXPORT INSPECTIONS, CROP PROGRESS

Fertilizer Index Hits Record, Threatening Higher Food Prices (1)

  • Surge of North American nutrient gauge surpasses 2008 peak
  • Rising prices threaten farmers and exacerbate food inflation

A gauge of North American fertilizer prices soared to a record high, driving up costs for farmers and threatening to worsen food inflation.

The Green Markets North America Fertilizer Price Index rose 7.9% to $996.32 per short ton, soaring past its 2008 peak to set a new benchmark since the index began in January 2002.

The fertilizer market has been hit hard this year due to extreme weather, plant shutdowns, sanctions and rising energy costs in Europe and China, pushing prices past levels that traders and farmers hadn’t seen since the global financial crisis.

Brazil 2021/22 Soybean Planting 9.8% Done by Oct. 8: Safras

Brazilian producers planted 9.8% of the expected area for 2021/22 soybean crop by Oct. 8, consulting firm Safras & Mercado said in a statement.

  • Planting is ahead compared to the previous crop, when 2.3% of the expected area was sown, but is behind the 5-year average of 9.1%
    • Seeding evolved well with last week’s rains, Safra said
  • In Mato Grosso state, planting is 21% done, above the 14.2% average
  • In Parana state, planting is 19% done, below the 25.2% average for the period

SOYBEAN/CEPEA: Rainfall favors sowing in BR; prices drop

Recent rains and forecasts for more rains have favored soybean sowing in important regions in Brazil. In the South, activities have been halted by high moisture this week. In southeastern and central-western Brazil, rainfall has been irregular, but sowing is advancing anyway. In the region of Matopiba, moisture has been higher, allowing soybean sowing to begin. In general, activities are more advanced than that in the same period last year.

In Paraná, according to Deral/Seab, 16% of the area estimated for the state had been sown until October 4, 8% up from that in the same period last year. In Mato Grosso, according to Imea, 6.6% of the soybean area had been sown until October 1st, 1.7% ahead of that in the same period of 2020. Conab (Brazil’s Company for Food Supply) estimates that 6.2% of the state area had been sown until early this week. Still according to Conab, 6.9% of the area has been sown in Mato Grosso do Sul, 4.4% in Santa Catarina, and 1% in Goiás. In São Paulo, 10% of the soybean area had been sown until October 2, according to Conab.

CORN/CEPEA: Prices resume fading in the interior of BR; dollar underpins values at ports

Influenced by low liquidity – largely because of the lack of purchasers in the market – and better weather conditions for the summer crop, corn prices resumed dropping in most of the regions surveyed by Cepea in the last days. On the other hand, at the ports of Santos (SP) and Paranaguá (PR), values are on the rise, boosted by the dollar appreciation against the Real.

With better weather conditions, agents have become more optimistic about the 2021/22 season. For the summer crop, Conab (Brazil’s National Company for Food Supply) estimates the corn area in Brazil to be 1.6% larger than the previous. The output may total 28.32 million tons, 14.5% up from that in 2020/21.

For the second and third crops, estimates point to higher production too. The second crop (2021/22 season) is forecast at 86.31 million tons, 42.2% higher than that in the current season. The third crop may increase by 8.6%, to 1.66 million tons.

Farmers have been heartened by the return of rains, despite the interruption of activities in some regions, majorly in Paraná, where sowing has reached 75% of the estimated area, according to data from Seab/Deral released on Oct. 4.

In Rio Grande do Sul, farmers are monitoring the incidence of leafhopper in corn crops – this plague sharply reduced production last season. Until yesterday, corn sowing had reached 62% of the state area, according to data from Emater/RS. In Santa Catarina and in São Paulo, activities were at 66.9% and at 10%, respectively, on Oct. 2, according to Conab.

USDA FAS Cuts Estimates for Brazil Corn Harvest, Exports

Brazil’s corn production in the 2020-21 season, which began in March, is now seen at 85m tons, the USDA’s Foreign Agricultural Service says in a report on its website.

  • That’s below the USDA’s official estimate of 86m tons
    • NOTE: USDA will issue its next world crop supply, demand estimates on Tuesday
  • Outlook for exports cut to 19m tons, below USDA official estimate of 22m tons

Brazil soymeal exports soar as drought disrupts Argentina export route

In a statement sent to Reuters on Friday, Brazil’s Paranagua port authority said exporters shipped 419,314 tonnes of soymeal last month, a 35% rise from August and almost 33% up from the same month a year ago.

International prices and demand favored an increase in soymeal exports from Brazil, according to the Paranagua Export Corridor Terminals Association, cited in the statement.

In addition, shipment in Brazil of soymeal brought in from Paraguay has been a factor.

Russian Wheat-Export Tax to Rise to $58.70/Ton for Next Week

Russia’s wheat export customs duty will increase to $58.70/ton next week, from $$57.80, the Agriculture Ministry said Friday on its website.

USDA projects decrease in wheat harvest in Kazakhstan, Russia, Uzbekistan – AKIpress News Agency

The United States Department of Agriculture projects wheat harvest in Kazakhstan to decrease by 12% to 12.5 million tons in 2021-2022. The wheat yield in Kazakhstan will be 980 kg per hectare, instead of 1.18 tons per hectare last season. A decrease in the wheat harvest is also forecasted in Russia by 15% to 72.5 million tons and in Uzbekistan by 8% to 6 million tons. Ukraine will see the wheat harvest growth by 30%, up to 33 million tons.

Alberta Harvest Is Almost Three Weeks Ahead and 96% Done

Harvest in the western Canadian province is ahead of the five-year average of 65% complete for this time of year, Alberta government says Friday.

  • Spring wheat and barley are 98% complete, with 93% of canola and oats harvested, crop report says
    • Green crops from second growth in canola fields delayed harvest in some regions
    • Durum, peas and lentil harvests are largely complete
  • Dryland crop yield estimates are 37% below the five-year average
    • Estimated spring wheat yield is 31.6 bu/acre, with barley at 42.5 bu, canola at 28 bu and oats at 53.9 bu
  • Crop quality is above the five-year average except for malting barley and oats, which are below average
    • Around 93% of hard red spring wheat and 84% of durum are at top two grades
    • Nearly 90% of canola is No. 1 grade and 7% as No. 2
    • 28% of barley is eligible for malt, 58% is No. 1 feed grade; 59% of oats are at top two grades, which is below average

Ukraine Grain Crop Nears 50M Tons With 14% of Corn Area Threshed

Ukraine’s farmers have reaped 49.4m tons of grains with an average yield at 4.4t/ha, according to data on the Agriculture Ministry’s website.

  • Farmers harvested 14% of the planned corn area
  • Farmers also harvested:
  • 3.8m ha under sunflower, or 59% of the projected area

Malaysia’s October 1-10 Palm Oil Exports 500,381 Tons: AmSpec

Shipments drop 7.5% m/m from 540,915 tons exported during Sept. 1-10, according to AmSpec Agri on Monday.

Malaysia Sept. Palm Stockpiles -7% M/m to 1.75M Tons: MPOB

Palm oil stockpiles in Malaysia, the world’s second-largest producer, fell 7% to 1.75 million tons in September from a month earlier, Malaysian Palm Oil Board says in statement today.

  • Palm oil exports +36.8% m/m to 1.6m tons
  • Imports -18% m/m to 74,992 tons
  • Crude palm oil production -0.4% m/m to 1.7m tons
  • Exports to India +21.4% m/m to 373,371 tons, +49.4% y/y
  • Exports to China +70.5% m/m to 234,355 tons, -6.2% y/y
  • Exports to EU +24.8% m/m to 135,856 tons, -13.1% y/y

India Limits Inventories of Edible Vegetable Oils to Ease Prices

India has imposed limits on inventories of edible oils and oilseeds to ease soaring prices in the world’s biggest buyer of soybean, palm and sunflower oils.

The stock cap will be in place until March 31 next year and will be decided by the state governments, based on demand and available reserves, the Department of Food and Public Distribution said in a statement Sunday. Exporters and importers are exempt from the limits.

India Said to Ask Phosphate Fertilizer Firms to Absorb High Cost

India won’t increase subsidies on phosphorus-based fertilizers and has directed producers to refrain from raising prices, according to people with knowledge of the matter, threatening the firms’ margins as global costs of the raw material surge.

Chemicals and Fertilizers Minister Mansukh Mandaviya instructed the companies, the people said, asking not to be identified as the details aren’t public. A spokesperson of the fertilizer ministry declined to comment.

Prices of phosphoric acid and ammonia, used to make the soil nutrient, have soared in the world market due to tight supplies, putting pressure on Indian producers as they import a majority of their requirements. Some global ammonia makers have cut output or are seriously considering that option due to high natural gas prices.

The government raised the subsidy on the nutrient in June to 45.3 rupees ($0.60) per kilogram for monsoon-sown crops — from 14.89 rupees a year earlier — to shield farmers in the country where about 60% people depend on agriculture for their livelihood. Fertilizers in India are sold at a price that’s generally below the cost of production, with the government compensating the producers for the shortfall.

It’s a ‘Panic Situation’ After Tiny North American Oat Harvest (1)

  • The smallest harvest ever in the U.S. is expected to shrink supplies needed for everything from Cheerios to oat milk

A drought struck North America’s oat fields this season, and farmers are harvesting such a small crop that prices have risen to record highs, signaling inflation for breakfast staples like oatmeal and trendy alternative milk.

Severe hot and dry weather probably slashed oat production by nearly half to an 11-year low in Canada, the world’s biggest exporter. Similarly in the U.S., one of the world’s top consumers of the grain, the harvest will be the smallest ever. The result is all-time high costs that will likely filter down to consumers.

The situation for North American farmers was so dire in the summer that many cut their losses and harvested damaged plants to be sold as feed for animals. That means even less will be available for making popular foods like granola bars and Cheerios, the No. 1 cold cereal in the U.S.

While major food companies haven’t announced price increases related to oat products yet, the higher costs for the grain can only add to the food inflation that’s been rampant this year. Global food prices recently touched a decade high, according to a United Nations index, while oat futures on Friday climbed as much as 2.1% to reach an all-time high of $6.36 a bushel.

Russian Farmers Get Upper Hand From Fertilizer Price Freeze

  • Nation’s fertilizer producers extend lower prices to 2022
  • Manufacturers are benefiting from a fixed gas price, low costs

Russian fertilizer producers agreed to extend a price freeze to the country’s farmers, giving them an advantage over foreign competitors who face surging costs.

The largest Russian mineral fertilizer producers have maintained a freeze started in July to Dec. 31, as global prices rise, the Russian Association of Fertilizer Producers, representing the biggest producers, said in a statement on Friday.

Fertilizer prices have surged to the highest levels in more that a decade, with nitrogen nutrients rising due to the cost of natural gas, which is used in the manufacturing process. Plants across Europe have already curtailed production.

Russia, the world’s biggest natural gas producer, fixes prices of the fuel for domestic consumers including fertilizer makers, on an annual basis. As a result, Russian nutrient producing plants are paying about $70-$80 per cubic meter in contrast to European prices close to $1,000 by the end of September.

Russian Wheat Exports Decline 12% So Far This Season: Agency

Wheat shipments for the 2021-22 season amounted to 12.8m tons as of Oct. 7, the Federal Center of Quality and Safety Assurance for Grain and Grain Products said on its website, citing inspections before exports.

  • Wheat exports totaled about 600k tons in the week to Oct. 7, compared with about 1.1m tons a week earlier
  • Exports of all grains are at 14.8m tons so far this season
  • NOTE: Data are preliminary and include exports to the Eurasian Economic Union, which is a customs union of countries that includes Russia

China Bans Some Beef Imports From U.K., Citing Mad Cow Disease

China bans imports of U.K. beef from cattle under 30 months of age due to mad cow epidemic reported in the nation recently, according to a statement on the customs WeChat account Monday.

China bought 30,000 T of pork for state reserves -commerce ministry

China’s commerce ministry said on Monday it bought 30,000 tonnes of pork for state reserves on Oct. 10, the latest in a series of purchases.

Beijing is buying up pork to support prices of the country’s staple meat after they plunged this year, leading to heavy losses for farmers.

U.S. Beef Production Up 3% This Week, Pork Rises: USDA

U.S. federally inspected beef production rises to 544m pounds for the week ending Oct. 9 from 526m in the previous week, according to USDA estimates published on the agency’s website.

  • Cattle slaughter up 3.1% from a week ago to 657m head
  • Pork production up 3.7% from a week ago, hog slaughter rises 3.2%
  • For the year, beef production is 2.9% above last year’s level at this time, while pork is 2% below

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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