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Global Ag News for Oct 29th

Pilgrim’s Pride Projects Relief on Grain Costs

Wheat prices overnight are down 3 1/2 in SRW, down 6 1/4 in HRW, down 1/4 in HRS; Corn is up 1/4; Soybeans up 5 1/4; Soymeal up $0.18; Soyoil up 0.92.

For the week so far wheat prices are up 13 in SRW, up 9 3/4 in HRW, up 24 1/4 in HRS; Corn is up 25; Soybeans up 20 1/2; Soymeal up $0.53; Soyoil down 0.30. For the month to date wheat prices are up 43 1/2 in SRW, up 52 in HRW, up 124 3/4 in HRS; Corn is up 26 1/4; Soybeans down 14 1/4; Soymeal up $4.00; Soyoil up 3.10.

Chinese Ag futures (JAN 22) Soybeans up 57 yuan ; Soymeal down 4; Soyoil up 108; Palm oil up 160; Corn up 20 — Malasyian Palm is up 102. Malaysian palm oil prices overnight were up 102 ringgit (+2.07%) at 5031 headed for its biggest monthly gain since July on expectations that tight supplies that have spurred a global edible oil rally will persist in the coming months.

There were changes in registrations (-15 Corn, 1,317 Soybeans, ). Registration total: 1,180 SRW Wheat contracts; 2 Oats; 2 Corn; 1,318 Soybeans; 233 Soyoil; 1 Soymeal; 108 HRW Wheat.

Preliminary changes in futures Open Interest as of October 28 were: SRW Wheat down 98 contracts, HRW Wheat down 993, Corn up 12,152, Soybeans down 23,367, Soymeal up 122, Soyoil up 735.

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

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

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

The player sheet for Oct. 28 had funds: net buyers of 7,000 contracts of  SRW wheat, buyers of 5,500 corn, buyers of 3,000 soybeans, sellers of 0 soymeal, and  sellers of 3,000 soyoil.

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: Pakistan issued a new international tender to purchase around 90,000 tonnes of wheat after cancelling a previous tender seeking the same volume

PENDING TENDERS

  • 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

 TODAY

Biden Plan Pushes $1 Billion Biofuel Boost and ‘Green’ Jet Fuel

  • Proposal includes four-year extension of biodiesel tax break
  • Bill includes funding for USDA grants to expand biofuel pumps

President Joe Biden’s tax-and spending plan calls for a suite of measures aimed at boosting biofuels, including $1 billion in infrastructure investments and a tax credit to support growth of sustainable jet fuel.

The $1.75 trillion package also calls for a four-year extension of the biodiesel tax credit set to expire at the end of 2022, according to text of the draft legislation based on the White House plan.

Farmers and producers have long been wary of Biden’s stance on biofuels, particularly given the administration’s push to accelerate use of electric vehicles. The industry also is in the midst of a bitter clash with fossil fuel refiners over pending renewable fuel-blending rules expected to be unveiled this year. Advocates say wider biofuel use is crucial in the fight against global warming pollution.

The bill includes funding for the U.S. Department of Agriculture to distribute grants over 10 years to expand biofuel pump infrastructure, upgrade equipment and increase the use of fuel with higher blends of ethanol and biodiesel.

U.S. Export Sales of Soybeans, Corn and Wheat by Country

  • China bought 1.08m tons of the 1.18m tons of soybeans sold in the week
  • Mexico was the top buyer of corn and also led in wheat

Argentine Soy, Corn, Wheat Estimates Oct. 28: Exchange

The Buenos Aires Grain Exchange releases weekly report on website.

  • 2021-22 Wheat production est. raised to 19.8m tons from 19.2m tons
    • Harvest 6.7% complete
  • Soybean planting 4.6% complete

Tunisia Says Grain Stocks Sufficient Until Mid-February: Tap

Nation’s inventories cover the soft wheat, durum wheat and barley feed varieties, state news agency TAP reports, citing the country’s grains agency, Office des Cereales.

  • Tunisia is awaiting the delivery of 411k tons of durum wheat, 390k tons of soft wheat and 361k tons of barley feed
  • Agency expects prices of grains, especially durum wheat, to remain at their current high levels until the 2022 harvest: TAP
  • It is more concerned about ensuring supplies of durum wheat than soft wheat:
    • Agency is “adjusting” opportunities for its procurement program aimed to secure the country’s needs of durum wheat
    • Ensuring soft wheat will be “normal” since it is in “abundant” supply and prices are “relatively stable”
  • Tunisia 2021 grains harvest was 1.64m tons versus national needs of around 3m tons

Malaysia Sees Higher Palm Oil Output in 2022 as Workers Return

Malaysia will likely relax cross-border restrictions on foreign workers in the second half of 2022, a move that will ease the severe labor crunch in palm oil plantations that’s contributed to a global edible oil rally.

Crude palm oil output is expected to increase with improved production of fresh fruit bunches and a better oil extraction rate, the finance ministry said in a report released alongside the state budget Friday.

Palm, the most consumed edible oil, has been a leading driver of this year’s stunning rally in global vegetable oil markets. Malaysia’s production is set to drop to its weakest in five years as planters grapple with the worst-ever labor shortage in the second-biggest grower. A industry group representing 40% of palm plantations by area estimates that the low yields will last through March.

The continuation of the nation’s B20 biodiesel program for the transport sector, coupled with higher demand from India and China, will further support palm oil production, the finance ministry said. Malaysian palm oil futures have rallied about 70% in the past year after hitting a record high this month.

Fitch Solutions Raises Palm Oil Price Forecast on Tight Supply

Fitch Solutions increased its average palm oil price forecast for 2021 to 4,200 ringgit/ton from 3,800 ringgit as supplies remain “very tight.”

Morocco Govt. Approves Wheat Import Tax Suspension: Spokesman

Cabinet meeting on Thursday approved decrees suspending the import duty on durum and soft wheat, government spokesman Mustapha Baitas told reporters. He didn’t elaborate.

Flood Damage to Thai Rice May Reach $253m: Kasikorn Research

The damage to Thai rice from flooding in September and October may be as much as 8.4 billion baht ($253 million), according to a note from Kasikorn Research, a unit of Kasikornbank.

  • Storms and floods in many parts of the country during the harvest season may affect about 800,000 hectares of rice fields
  • Despite some flood damage, rice output for the whole year is expected to be about 30 million tons, up 1.9% from 2020
  • Average rice price in 2021 is forecast at 8,700-9,000 baht per ton, down as much as 23.3% y/y
  • Although losses may not be as high compared to the 2017 floods, it will exacerbate income problems for farmers, who are already hurt by the Covid-19 outbreak

French Wheat Planting Near 2020 Pace, Corn Harvest Lags: AgriMer

Soft-wheat planting in France was 61% complete as of Oct. 25, FranceAgriMer data showed on Friday.

  • Compares with 40% the prior week and 63% last year
  • Winter-barley planting was 78% complete
    • Compares with 59% the prior week and 77% last year
  • Durum-wheat planting was 7% complete
    • Compares with 1% the prior week and 12% last year
  • French corn crop was 54% harvested
    • Compares with 32% the prior week and 87% last year

France’s Rouen Grain Exports Fell 51% in Week to Oct. 27: Port

Grain shipments from France’s Rouen port totaled 116,398 tons in the week to Oct. 27, compared with 238,583 tons a week earlier, according to an emailed report.

  • Loadings by destination (in tons):
  • Malting barley
    • China 47,482
    • Portugal 3,602
  • Soft wheat
    • Mexico 42,713
    • Gabon 12,000
    • Gambia 7,450
    • U.K. 3,151

Pilgrim’s Pride Projects Relief on Grain Costs

Escalating prices for corn and soybeans have pressured profits for meat companies and helped drive prices higher, but chicken giant Pilgrim’s Pride suggests relief is on the way. Pilgrim’s CEO Fabio Sandri says in an investor presentation that US farmers are on track to harvest the largest corn crop since 2016, while Brazilian farmers are planting what is expected to be their own big crop and China is likely to dial down imports as its own supplies are replenished. The USDA projects US corn stockpiles to grow by 21% in the current crop year. “Global stocks are in a better position than they were,” Sandri says.

Malaysia Lifts Threshold Prices of Palm Oil Windfall Profit Levy

Threshold price for windfall profit levy on palm oil will be raised next year to 3,000 ringgit/ton in Peninsular Malaysia, from 2,500 ringgit/ton previously, Malaysia Finance Minister Zafrul Abdul Aziz says in his budget speech before parliament.

  • NOTE: Malaysia collected 900 million ringgit in windfall profit levies from crude palm oil in 2021, from 200 million ringgit in 2020, due to higher crude palm oil prices
  • Malaysia will also allocate 1.7 billion ringgit in subsidies and incentives for the farming and fishing industries
    • Includes 1.5 billion ringgit in subsidies for crop seeds, fertilizers, and rice production
  • Govt will allocate 120 million ringgit to enhance food security
  • Malaysia will allocate 2.5 billion ringgit in 2022 to support smallholders, including Felda settlers
  • To support palm oil industry, govt will allocate 35 million ringgit for replanting of oil palm trees by smallholders, and 20 million ringgit to fight against anti-palm oil campaigns

U.S. Crops in Drought Area for Week Ending Oct. 26: USDA

  • Winter wheat crops in areas of moderate to intense drought rose 2 percentage points from the previous week to 43%
    • NOTE: Winter wheat 80% planted as of last Sunday, 46% rated good/excellent by USDA
  • Corn and soybean crop areas both decreased drought exposure in the week

Flow of goods through Panama Canal hits record

The Panama Canal moved more than a half a billion tonnes of goods over the last year, the canal’s top official said on Thursday, marking a record high for the key global waterway as international trade picked up.

Ricaurte Vasquez, the Panama Canal Authority’s administrator, told reporters during a webcast news conference that 516.7 million tonnes of goods passed through the century-old waterway during the 2021 fiscal year, which ended in September.

Ferried on massive cargo ships through the 50 mile (80 km) trans-oceanic canal, the 2021 fiscal year haul amounts to about 3.5% of the world’s maritime trade, dominated by grains and petroleum products like crude oil and gasoline.

Vasquez explained that the new record was powered by larger ships carrying more containers, as well as sharp growth in the transport of Asia-bound liquefied natural gas, or LNG.

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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