Explore Special Offers & White Papers from AFS

Global Ag News for Oct 20th

 TODAY – WEEKLY EIA Weekly Petroleum Status Report

Wheat prices overnight are up 5 in SRW, up 1 1/2 in HRW, up 3 3/4 in HRS; Corn is up 3; Soybeans up 9 1/4; Soymeal up $0.15; Soyoil up 1.11.

For the week so far wheat prices are up 7 in SRW, up 6 in HRW, up 9 1/4 in HRS; Corn is up 7 1/2; Soybeans up 19 1/2; Soymeal up $0.75; Soyoil up 2.21. For the month to date wheat prices are up 15 1/2 in SRW, up 18 in HRW, up 65 1/2 in HRS; Corn is down 3 1/2; Soybeans down 18 3/4; Soymeal down $4.60; Soyoil up 4.81.

Chinese Ag futures (JAN 22) Soybeans down 34 yuan ; Soymeal up 29; Soyoil up 48; Palm oil up 28; Corn up 7 — Malasyian Palm is up 122. Malaysian palm oil prices overnight were up 122 ringgit (+2.47%) at 5066 extending its rise with concerns over supply shortages in No. 2 grower Malaysia and high petroleum prices.

Preliminary changes in futures Open Interest as of October 19 were: SRW Wheat up 320 contracts, HRW Wheat up 969, Corn up 1,441, Soybeans down 10,392, Soymeal up 1,189, Soyoil up 877.

There were no changes in registrations. Registration total: 1,180 SRW Wheat contracts; 2 Oats; 17 Corn; 1 Soybeans; 233 Soyoil; 1 Soymeal; 1,273 HRW Wheat.

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

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

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

The player sheet for Oct. 19 had funds: net sellers of 500 contracts of  SRW wheat, sellers of 1,000 corn, sellers of 4,500 soybeans, buyers of 5,000 soymeal, and  buyers of 1,500 soyoil.

TENDERS

  • WHEAT TENDER: Japan’s Ministry of Agriculture is seeking to buy a total of 81,318 tonnes of food-quality wheat from the United States and Canada in a regular tender that will close on Oct. 21.

PENDING TENDERS

  • WHEAT TENDER: A United Nations agency issued an international tender to purchase about 200,000 tonnes of milling wheat on behalf of the Ethiopian government
  • SOYOIL, SUNOIL TENDER: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), said on Sunday it was seeking soyoil and sunflower oil in an international purchasing tender for arrival Dec. 5-25.
  • WHEAT TENDER: Jordan’s state grains buyer issued an international tender to purchase 120,000 tonnes of wheat
  • WHEAT TENDER: The Ethiopian government issued an international tender to buy about 300,000 tonnes of milling wheat
  • WHEAT TENDER: An Ethiopian government agency has issued a new international tender to buy about 400,000 tonnes of milling wheat

ETHANOL: U.S. Weekly Production Survey Before EIA Report

Output and stockpile projections for the week ending Oct. 15 are based on nine analyst estimates compiled by Bloomberg.

  • Production seen higher than last week at 1.042m b/d
    • Would be the third consecutive w/w increase in production
  • Stockpile avg est. 19.974m bbl vs 19.847m a week ago

LIVESTOCK SURVEY: U.S. Cattle on Feed Herd Seen Down 0.6% Y/y

Oct. 1 herd seen falling y/y to 11.65m head, according to a Bloomberg survey of nine analysts.

  • That would be the fourth straight month that the feedlot herd declined y/y
  • September placements seen up 1.4% y/y
  • Marketings seen falling 2.5% y/y

Wheat to Stay Above $7 Through 2022 On Tight Supplies: Rabobank

Chicago wheat futures will probably trade between $7.25 and $7.40 per bushel through the second quarter of 2022 on low global stockpiles, Rabobank said in a report Wednesday.

  • Dwindling stocks of wheat, particularly in exporting nations, are on track to decline over the next nine months
  • This is driven by high use of wheat in animal feed as a substitute for corn as well as downgraded wheat quality in the EU
  • Meanwhile, there’s been steady growth in food consumption
  • While prices will drop after 2Q 2022 as new crop supply becomes available, they’re set to remain above $7 for the rest of the year given the stock rebuilding required

AUSTRALIA

  • Bank expects local prices to stay resilient through 2021 despite harvest pressure as global demand is strong
  • Australia will harvest 52.9m tons of winter grains, oilseeds and pulses for 2021-22, down 5% y/y but still 25% above five-year average
  • Total grain exports to increase 5% y/y to include 24.5m tons of wheat, 7.8m tons of barley, 4.3m tons of canola
  • Australia’s canola production to hit a new record high of 5.2m tons, up 14% y/y
  • Wheat production expected at 31.9m tons, down 4%
  • Barley output seen at 11.7m tons, down 10%

Fertilizer Shortage Unlikely in Brazil for 2021-22 Crop: Group

While there’s no shortage of crop nutrients for the 2021-22 season, plantings next year face geopolitical risks, says Ricardo Tortorella, executive director at Anda, a group representing fertilizer companies including Mosaic Inc. and Yara International in Brazil.

  • “There’s no fertilizer scarcity nowadays,” Tortorella says in an email
    • Overall, deliveries have been done according to contracts, though some exceptions may occur due to logistical bottlenecks
  • Risks to global fertilizer supplies next year include economic sanctions to Belarus, a key potash exporter, and high energy costs in China, a nitrogen and phosphorus supplier
    • “We are making for a record crop and, if no geopolitical risks occur, we’ll have another year of record production in 2022-23”
    • NOTE: Brazil’s largest corn crop is planted in Jan.-March

Argentina Has ‘Very High Expectations’ for Crop Harvest

Argentina’s Agriculture Secretary Jorge Solmi has “very high expectations” for this year’s crop season, he said during a visit to Tucuman province.

  • “The harvest will start in the north of the country and arrive in southeast Buenos Aires between December and January, as the wheat’s maturation process advances,” Solmi said, according to a statement from the ministry
  • The secretary also showed support for President Alberto Fernandez decision of talking “face to face” with wheat farmers across the country

EU Soft-Wheat Exports Rose 36% in Season Through Oct. 17

Soft-wheat shipments during the season that began July 1 reached 8.67m tons as of Oct. 17, vs 6.38m tons in a similar period a year earlier, the European Commission said Tuesday on its website.

  • NOTE: Data 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 were Algeria (1.21m tons), Egypt (939k tons) and South Korea (823k tons)
  • EU barley exports totaled 2.74m tons, compared with 2.48m tons a year earlier
    • China is the top market at 636k tons
  • EU corn imports reached 3.92m tons, against 4.96m tons a year earlier

EU 2021/22 soybean imports at 3.62 mln T by Oct. 17, rapeseed 1.31 mln T

European Union soybean imports in the 2021/22 season that started in July had reached 3.62 million tonnes by Oct. 17, data published by the European Commission showed on Tuesday.

  • That compared with 4.26 million tonnes by the same week in the previous 2020/21 season, the data showed.
  • EU rapeseed imports in 2021/22 reached 1.31 million tonnes, compared with 2.05 million tonnes a year earlier.
  • Soymeal imports 2021/22 totalled 4.38 million tonnes against 5.53 million a year ago, while palm oil imports stood at 1.66 million tonnes versus 2.00 million tonnes.
  • The Commission said that the data for France in the report was only complete until July 2021.
  • Since Jan. 1, the European Commission’s data has covered the EU’s 27 countries only, whereas previous figures up to Dec. 31 covered both the EU-27 and Britain.

Ukraine Sets Target for 2021-22 Wheat Exports at 25.3m tons

Ukraine agreed with grain traders to set the target for maximum wheat exports for the 2021-22 season, according to a statement on the Agriculture Ministry’s website.

  • Target compares with 17.5m tons last season
    • NOTE: The target is not a strict cap, and exports can exceed the figure if the government sees no threat to the country’s food security
  • The USDA estimates Ukraine’s wheat exports at 23.5m tons for the 2021-22 season

USDA attache sees Brazil 2021/22 soy crop at 145 million T

Following are selected highlights from a report issued by the U.S. Department of Agriculture’s Foreign Agricultural Service post in Brasilia:

“Post increased its forecast for soybean planted area to 40.5 million hectares for 2021/22, up from 39 million hectares in 2020/21. Brazil continues to expand its area because of high domestic soybean prices. Post forecasts a record harvest at 145 million metric tons (MMT), with planting starting earlier this year. For 2020/21, Post maintained the production estimate of 137 MMT. Soybean exports in 2021/22 are forecast at 92 MMT, up from 2020/21 exports estimated at 85.3 MMT. With ample supplies, Post revised imports downward, now forecast at 400,000 metric tons (MT) for 2021/22. For 2021/22, Post revised the soybean processing forecast up to 47.5 MMT based on available supply. The crush estimate for 2020/21 is unchanged at 46.5 MMT, constrained by high domestic oil prices.”

China’s Sept soy imports from Brazil fall 18% y/y on flat demand

China’s soybean imports from Brazil fell 18% in September from a year earlier, customs data showed on Wednesday, as poor crush margins limited demand.

The world’s top buyer of soybeans brought in 5.936 million tonnes of the oilseed from Brazil last month, down from 7.25 million in the corresponding period a year earlier, data from the General Administration of Customs showed.

Crushers stepped up purchases last year from top supplier Brazil as a fast recovering pig herd pushed up demand. But their buying has slowed in recent months, as falling hog prices hit margins. (Full Story)

China’s hog margins remain in negative territory, despite a pick-up in the past week.

Imports from the United States stood at 169,439 tonnes, down from 1.17 million tonnes a year earlier, after hurricane Ida hit shipments by forcing the closure of some grains terminals on the U.S. Gulf Coast.

The supply woes prompted Chinese buyers to turn to costly beans from Brazil.

The impact could last for weeks during the peak U.S. export season, pushing Chinese buyers to buy more Brazilian beans, traders said, although U.S. cargoes are expected to pick up from November.

October’s total soybean arrivals are expected to stay lower than last year, fanning concern over supply of soymeal in China, just as an unprecedented power crunch forced some crushing plants to shut or cut operations.

Inventories of soybean and soymeal in China have both fallen in the past week, says agriculture consultancy Myagric.com.

Crushers in Rizhao in the eastern province of Shandong now make 61 yuan ($9.54) for each tonne of soybeans processed, up from negative 650 yuan in June.

Indonesia plans to ‘hit the brakes’ on raw commodity exports -president

Indonesia is planning to “hit the brakes” on the export of all raw commodities in an effort to attract investment in onshore resource processing and create jobs, President Joko Widodo said on Tuesday.

  • Indonesia has banned a number of unprocessed ore exports including nickel, tin and copper in a bid to encourage downstream industries, including producing batteries for electric vehicles and aluminum industry, among others.
  • The government is currently conducting a study for the downstreaming of other commodities with a long-term goal of no longer selling just raw materials, the president, who is popularly known as Jokowi, said in an interview in the village of Bebatu on Borneo island.
  • A new policy would hopefully emerge next year, he said.
  • “We really want to hit the brakes on exporting raw materials because there is no value addition and it does not create jobs,” he said, adding that the policy would affect “all commodities.”
  • Stopping exports of unprocessed palm oil was being considered, he said, although he declined to provide an estimate of when such policy could be issued.
  • He said last week that Indonesia would no longer export the crude form of the vegetable oil in future in favor of refined products such as cosmetics, margarine and biodiesel.
  • Indonesia is the world’s biggest exporter of palm oil, thermal coal and tin. It is also major exporter of rubber and copper, among others.
    • Of 34 million tonnes of palm oil exports in 2020, 21% was in crude form.

China to Ensure Coal, Gas, Power Supply to Fertilizer Makers

China will sell first batch of potash fertilizer from state reserves Wednesday afternoon, Meng Wei, spokeswoman of the National Development and Reform Commission, says at a press conference.

NDRC will closely monitor fertilizer market and exports and imports situation

China agriculture ministry says impact of rain on grain output is ‘generally limited’

China’s autumn grain harvest was nearly 80% and the impact of recent continuous rain on output was “generally limited”, an agriculture ministry official told a news briefing on Wednesday.

U.S.-China Deal on Huawei CFO May Ease Canada’s Canola Woes

  • Move reduces friction between two nations, industry group says
  • China suspended shipments from big Canada shippers in 2019

The resolution of U.S. criminal charges against Huawei Technologies Co.’s chief financial officer is boosting optimism that China and Canada can resolve a trade spat over canola.

Canada is the world’s largest grower of canola, an oilseed used in everything from salads to deep-frying, but the commodity is stuck in the crosshairs of a dispute between the nation, China and the U.S. China suspended the licenses of two major Canadian shippers, Viterra and Richardson International, in 2019 in a move that was interpreted as retaliation over the arrest of Huawei CFO Meng Wanzhou in Vancouver.

Now that Meng has been released and two Canadians detained in China were allowed to return home, “hopefully that lowers the temperatures between the two countries,” said Jim Everson, president of the Winnipeg-based Canola Council of Canada.

Japan’s use of corn in animal feed drops in August

Japan’s usage of corn in animal feed fell to 46.9% in August, compared with 49.8% a year earlier, preliminary data from the Ministry of Agriculture, Forestry and Fisheries showed on Wednesday.

Russia cuts wheat exports 18% between July 1 and Oct 14 to 11 mln tonnes – AgMin – Interfax Russia & CIS Business and Financial Newswire

Russian wheat exports between July 1 and October 14 totaled 11.1 million tonnes, down 18% year-on-year, the Agriculture Ministry said, citing preliminary data from the Federal Customs Service (FCS).

Barley exports were down 34.9% to 1.5 million tonnes, while corn exports fell 56.5% to 200,000 tonnes.

Exports of grain crops as a whole totaled 13 million tonnes, down 21.3% year-on-year from 16.5 million tonnes.

These indicators do not include data on mutual trade with EAEU states in September and October.

According to a forecast by the Agriculture Ministry, grain exports in the current farming year (July 2021-June 2022) are expected to be 45-48 million tonnes. In the previous farming year, which ended on June 30, exports came to 49 million tonnes, including 38.4 million tonnes of wheat.

China customs says approves beef imports from Russia

China has allowed beef imports from Russia, the customs office said on Wednesday. The trade move, effective from Oct. 18, came after the two governments agreed on supply terms for Russian beef last month.

Malaysia’s Oct. 1-20 Palm Oil Exports 978,917 Tons: AmSpec

Shipments fall 7.8% m/m from a revised 1,061,771 tons exported during Sept. 1-20, according to AmSpec Agri on Wednesday.

Argentina Freezes Prices on Over 1,400 Goods Ahead of Elections

  • Government fixed prices on household goods until Jan. 7
  • Step comes after government failed to reach deal with companies

Argentina’s government is freezing prices on 1,432 household items in an effort to cool accelerating inflation ahead of November’s midterm election and the holiday season.

Prices will remain fixed until Jan. 7 on the products, a larger list than the roughly 900 items government officials had originally pitched to companies and supermarkets last week. Talks between the government and industry leaders on a price agreement fell through Tuesday after a few days of discussions.

It marks the latest chapter in Argentina’s tense relations with the private sector, following a failed nationalization of a soybean exporter, temporary export bans and a prohibition on firing workers. Interior Commerce Secretary Roberto Feletti offered up a blunt assessment in his statement Tuesday.

Inflation accelerated past expectations in September with consumer prices rising 3.5% from August, putting the annual figure at 53%. President Alberto Fernandez’s coalition faces a tough midterm election next month after it suffered a major defeat in a primary vote. Price controls are a common policy in Argentina that often prove futile.

Bayer Herbicide Plant in Louisiana Reopens After Ida Shutdown

Bayer AG’s main U.S. production facility for glyphosate is back online after being shut for about five weeks due to Hurricane Ida, company executives say Tuesday in an investor call.

  • Infrastructure surrounding the Louisiana plant was partially damaged during storm
    • Plant had limited access to electricity and water
  • Shutdown will have some affect on sales, but shouldn’t impact full-year guidance, president of Bayer’s crop science division Liam Condon says
  • Bayer doesn’t currently see any big shift from corn to soybean planting in the U.S.
    • Typically, as fertilizer prices rise, farmers can sell corn for higher profits: Condon

Rice Set to Climb as Fertilizer Rally Drives Up Farm Costs

  • ‘A ton of fertilizer is now more expensive than a ton of rice’
  • Many countries in Asia will also be hit with increasing costs

The massive rally in fertilizers is coming for rice, a staple food for half of the world’s population, with farmers in one of the top exporters bracing for exorbitant prices of crop nutrients in the coming planting season.

The cost of fertilizer in Thailand is on track to double from 2020, with prices now at 16,000 baht ($480) per ton compared with an average 10,000 baht last year, according to Pramote Charoensilp, president of the Thai Agriculturist Association, which represents rice farmers in the world’s third-biggest shipper.

Rice is a food staple in many countries in Asia and surging fertilizer prices because of a global energy crunch are set to raise costs for many farmers in the region. In some countries, that may lead to governments having to step in to boost farmer subsidies in order to ensure essential supplies.

Farm-to-Fork Plan Could Flip EU to Net Grain Importer: Coceral

The EU’s farm-to-fork plan could cut the bloc’s wheat production by about 15% by 2030 and corn by about 13%, Philippe Mitko, president of Coceral, says in a presentation at the GrainCom conference in Geneva.

  • NOTE: That’s mid-case scenario of findings from a Coceral study this year
  • Requirements to reduce fertilizer, pesticide use will cut yields
  • The plan’s goals include cutting mineral fertilizer use by 20% by 2030 and pesticides by 50%, according to Mitko
  • That could flip the EU into a net grains importer of about 18.4m tons, versus net exporter of about 17.6m tons currently: Mitko
  • The drops could pose a problem for regions like Africa, one of EU’s main markets, which has rising population and climate change adding challenges for local harvests: Mitko

Agri Blockchain Platform Covantis Plans U.S. Launch Next Year

Agriculture blockchain platform Covantis aims to launch operations in the U.S. and Canada early next year, Sorin Albeanu, head of commercial, says in interview at the GrainCom conference in Geneva.

  • That would include commodities such as corn, wheat, soy, canola and barley
  • NOTE: Covantis started operations in February with bulk soybean and corn exports from Brazil
  • More origins might be added later in 2022, with aims to take the platform global
  • Covantis is a joint venture of trading houses including Archer-Daniels-Midland, Bunge and Cargill

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.

Latest News & Market Commentary

Explore Special Offers & White Papers from Archer Financial Services

Get Started

Contact Us Today