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Global Ag News for Oct 28th

TODAY – EXPORT SALES

Wheat prices overnight are down 2 1/4 in SRW, down 3 1/4 in HRW, up 4 1/2 in HRS; Corn is down 1 1/4; Soybeans up 2 1/4; Soymeal down $0.03; Soyoil down 0.22.

For the week so far wheat prices are up 1 1/4 in SRW, up 5 1/2 in HRW, up 13 1/2 in HRS; Corn is up 17 3/4; Soybeans up 21; Soymeal up $0.32; Soyoil down 0.89.For the month to date wheat prices are up 32 in SRW, up 47 3/4 in HRW, up 114 in HRS; Corn is up 19 1/4; Soybeans down 13 1/2; Soymeal up $1.90; Soyoil up 2.51.

Chinese Ag futures (JAN 22) Soybeans down 7 yuan ; Soymeal up 8; Soyoil down 176; Palm oil down 192; Corn down 21 — Malasyian Palm is down 33. Malaysian palm oil prices overnight were down 33 ringgit (-0.66%) at 4933 on lingering concerns that high prices will prompt buyers to shun the tropical oil in favor of rival vegetable oils.

There were no changes in registrations. Registration total: 1,180 SRW Wheat contracts; 2 Oats; 17 Corn; 1 Soybeans; 233 Soyoil; 1 Soymeal; 108 HRW Wheat.

Preliminary changes in futures Open Interest as of October 27 were: SRW Wheat up 116 contracts, HRW Wheat up 1,027, Corn up 17,614, Soybeans down 23,019, Soymeal up 312, Soyoil down 593.

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

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

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

The player sheet for Oct. 27 had funds: net buyers of 4,000 contracts of  SRW wheat, buyers of 12,500 corn, buyers of 3,000 soybeans, buyers of 2,500 soymeal, and  sellers of 1,750 soyoil.

TENDERS

  • WHEAT PURCHASE: Egypt’s General Authority for Supply Commodities (GASC) said it bought 360,000 tonnes of wheat in an international tender. The purchase included 180,000 tonnes of Russian, 120,000 tonnes of Ukrainian and 60,000 of Romanian origin wheat, GASC said. The wheat was sought for shipment between Dec. 1-10.
  • WHEAT TENDER PASSED: Jordan’s state grain buyer made no purchase in an international tender for 120,000 tonnes of wheat which closed on Wednesday.

PENDING TENDERS

  • WHEAT TENDER: Saudi Arabia’s main state wheat buying agency, the Saudi Grains Organization (SAGO) on Thursday issued an international tender to purchase about 655,000 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 issued a new international tender to buy about 400,000 tonnes of milling wheat

GRAIN EXPORT SURVEY: Corn, Soy, Wheat Sales Before USDA Report

Estimate ranges are based on a Bloomberg survey of six analysts; the USDA is scheduled to release its export sales report on Thursday for week ending Oct. 21.

  • Corn est. range 800k – 1,300k tons, with avg of 1,055k
  • Soybean est. range 1,000k – 2,000k tons, with avg of 1,455k

DOE: U.S. Ethanol Stocks Fall 0.8% to 19.925M Bbl

According to the U.S. Department of Energy’s weekly petroleum report.

  • Analysts were expecting 20.341 mln bbl
  • Plant production at 1.106m b/d, compared to survey avg of 1.097m

 Gas Suppliers Tell French Corn Farmers to Leave Crop in Field

French corn farmers are being told to leave crops unharvested in the latest sign of how soaring energy prices are heightening the risk of global food inflation.

The grain typically needs to be dried down after it’s collected to ensure the proper moisture content, a task that’s becoming increasingly costly as natural gas prices skyrocket. Harvests in the country, one of Europe’s largest growers, are in full swing, with a third already collected.

Now, farmers are being told to prepare for gas shortages, to use less of the fuel and even postpone their grain collection if possible, corn growers group AGPM said Wednesday in a statement. But harvesting too late can deteriorate the quality of the crop and reduce farmer incomes, which are already being hit by the “explosion” in drying costs, the group said.

Runaway energy prices have already driven up fertilizer costs, a risk for future grain harvests, while vegetable greenhouses in the neighboring Netherlands have cut back on lighting to cut expenses.

Egypt Reverses Course and Buys Wheat Two Weeks After Balking

  • Country books 360,000 tons in tender, the most this season
  • That follows a cancellation two weeks earlier on high prices

Just two weeks after Egypt shunned a wheat tender due to high prices, the country made its biggest purchase of the season — at nearly the same costs.

The move by Egypt’s state-run buyer is the latest sign that major wheat importers are willing to stock up to ensure food security, even as prices soar across global suppliers. Pakistan also canceled a recent wheat tender, but issued a fresh one days later, with results still awaited.

Egypt booked 360,000 tons in its tender on Wednesday, the most since March, at an average of $360.12 per ton including freight, according to Bloomberg calculations. That’s the highest in at least five years and similar to the offersEgypt received in its prior tender in mid-October that was ultimately canceled.

2021/22 ARGENTINA WHEAT PRODUCTION: 19.5 [17.8–21.1] MILLION TONS, DOWN <1% FROM LAST UPDATE

2021/22 Argentina wheat production is fractionally lowered to 19.5 [17.8–21.1] million tons on insufficient rainfall and continued lack of moisture (less than <30 mm in total over the past two weeks, with deficits between 10-40 mm) throughout the main Pampas. Short-term weather forecasts indicate improved rainfall prospects later this week and next week, which should help the crop move forward given it is already in the critical heading stage at the moment.

2021/22 U.S. CORN PRODUCTION: 386 [378–395] MILLION TONS, UP <1% FROM LAST UPDATE

Continued low-risk for meaningful yield or harvested acreage losses fractionally raises 2021/22 U.S. corn production to 15.2 [14.9–15.6] billion bushels, despite a looming cold front.

2022/23 U.S. WINTER WHEAT PRODUCTION: 37.9 [34.6–41.2] MILLION TONS, UNCHANGED FROM LAST UPDATE

Outlooks for 2022/23 U.S. winter wheat planted area and production are unchanged at 35.1 million acres and 37.9 [34.6–41.2] million tons, respectively. Plantings remain active in every producing state, with most of them still progressing at normal pace despite recent slowdown.

Ukraine 2021/22 grain exports up 17.5% so far in 2021/22

Ukraine has exported 18.2 million tonnes of grain so far in the 2021/22 July-June season, up 17.5% from 15.5 million tonnes at the same stage a year earlier, agriculture ministry data showed on Wednesday.

That included 11.7 million tonnes of wheat, 4.2 million tonnes of barley and 2 million tonnes of corn, the data showed.

Ukraine plans to thresh a record 80.3 million tonnes of grain in 2021, up from 65 million tonnes in 2020. Exports could jump to 61.5 million tonnes from 44.7 million tonnes in 2020/21.

The government has said that grain exports could include 24.5 million tonnes of wheat, 30.9 million tonnes of corn and 5.2 million tonnes of barley.

Ukraine’s exports last season included 23.1 million tonnes of corn, 16.6 million tonnes of wheat and 4.2 million tonnes of barley.

The ministry said farms had harvested 56.3 million tonnes of grain by Oct. 27 from 76.5% of the sown area, with an average yield of 4.62 tonnes per hectare.

Argentina soymeal exports at 5-year lows while Brazil exports remain strong

Brazil shipped 15.5 million tons of soybean meal in 2019/20 (March/April), the largest over the past five years. The strong exports continued in 2020/21. Accumulated exports during March-September totaled 9.9 million tons, the second largest volume since 2015. In spite of sluggish exports in August, fast export pace returned in September with 1.3 million tons of soymeal shipments. In October, 01.0 million tons of soymeal departed from Brazil as of 26 October. The latest line-up data (released on 27 October) indicates that 1.3 million tons of soymeal are scheduled to deliver in October, lower than last year, but well above the 5-year average for the month.

Refinitiv trade flows tracked 18.8 million tons of soybean meal exports in 2019/20 (May/April), down 11% from a year earlier. In 2020/21, Argentina soybean meal exports remained sluggish. Monthly exports since May have persistently been at or near 5-year lows. In September, 1.5 million tons of soymeal exports were tracked, close to last year’s same period. In October, only 1.1 million tons of shipments were observed as of 26 October. Accumulated exports during May-October totaled 8.8 million tons, down 10% from last year’s low level and near 30% below the 5-year average.

Vancouver Port Grain Stocks Surge as Heavy Rains Delay Shipments

Excessive rainfall in Vancouver during the first two weeks of October lifted port terminal grain stocks to near-capacity, Quorum Corp. data show Wednesday.

  • Vancouver port terminal stocks of grain rose to 97% of working capacity by the second week of October, grain transportation monitoring co. says in report
    • Backlog has since been cleared
    • High amounts of precipitation forecast this week may affect ability to load vessels
  • Western Canadian port terminal elevators were at 78% working capacity in week 11 of the 2021-22 crop year, up 5% y/y
  • Total amount of grain unloaded from rail cars at western ports 17% below four-week moving average; down 36% y/y
    • Down 37% year-to-date y/y

Brazilian Minister Says China Ban on Country’s Meat Is Strategic

The Chinese embargo on Brazilian meat could be a strategy to lower the price, Brazilian Agriculture Minister Tereza Cristina said in an interview with CNN Brasil.

  • Brazil can guarantee food quality, minister said
  • Brazil has already submitted information requested by China and ban should be lifted soon, even though china is taking too long to review it, minister said

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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