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Global Ag News for Oct 4th

TODAY – EXPORT INSPECTIONS, CROP PROGRESS

Wheat prices overnight are down 2 1/4 in SRW, down 5 1/2 in HRW, down 1 1/2 in HRS; Corn is down 3; Soybeans down 9 3/4; Soymeal down $0.03; Soyoil down 0.62.

Markets finished last week with wheat prices up 31 in SRW, up 33 1/4 in HRW, up 6 in HRS; Corn is down 3/4; Soybeans down 50 3/4; Soymeal down $1.34; Soyoil up 0.09. For the month to date wheat prices are up 27 1/2 in SRW, up 22 1/4 in HRW, up 15 in HRS; Corn is up 1 3/4; Soybeans down 19 1/4; Soymeal down $2.10; Soyoil down 0.50.

Malaysian palm oil prices overnight were up 65 ringgit (+1.44%) at 4570. China markets are closed for the Golden Week holiday.

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

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

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

The player sheet for Oct. 1 had funds: net buyers of 20,000 contracts of  SRW wheat, buyers of 4,000 corn, buyers of 4,000 soybeans, sellers of 1,000 soymeal, and  sellers of 0 soyoil.

There were no changes in registrations. Registration total: 1,180 SRW Wheat contracts; 2 Oats; 17 Corn; 1 Soybeans; 365 Soyoil; 1 Soymeal; 1,273 HRW Wheat.

Preliminary changes in futures Open Interest as of October 1 were: SRW Wheat up 9,450 contracts, HRW Wheat up 3,007, Corn up 5,520, Soybeans up 7,720, Soymeal up 8,090, Soyoil up 1,237.

TENDERS

  • WHEAT SALE: A government agency in Pakistan is believed to have bought some 550,000 tonnes of wheat from optional origins in an international tender to purchase and import 640,000 tonnes which closed this week
  • WHEAT, BARLEY SALE: Tunisia’s state grains agency is thought to have purchased 100,000 tonnes of soft wheat and 50,000 tonnes of animal feed barley in an international tender on Friday.

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
  • Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), said on Saturday it was seeking 30,000 tonnes of soyoil and 10,000 tonnes of sunflower oil in an international purchasing tender for arrival Nov. 25 – Dec. 20

U.S. Soybean Crushings at 168M Bushels in August: USDA

USDA releases monthly oilseed report on website.

  • Crushing 3.7% lower than same period last year
  • Crude oil production 1.1% lower than same period last year
  • Crude and once-refined oil stocks up 12.3% y/y

U.S. Corn Used for Ethanol at 417.3M Bu in August

  • Corn for ethanol was 1.5% higher than in August 2020
  • DDGS production rose to 1.827m tons

Brazil September Agriculture, Mining Exports by Volume: MDIC

  • Soybean exports rose 13% in September from a year ago, down 26% from August
  • Beef exports rose 31% y/y

Strategie Grains raises EU rapeseed crop estimate to 17.0 mln T

Strategie Grains has increased its monthly forecast for this year’s European Union rapeseed harvest to 17.03 million tonnes from 16.93 million, the consultancy said in an oilseed report.

The latest estimate would be 2.5% above 2020’s output of 16.61 million tonnes, it said.

Ukraine Wheat Exports Up 4.4% Y/Y in Period Since July: Ministry

Ukraine’s wheat exports for the current marketing year topped 8.9m tons as of Oct. 1, according to data published on Agriculture Ministry’s website.

  • NOTE: Marketing year starts July 1
  • Corn exports more than doubled from same period last year, reaching 1.4m tons
  • Total grain exports rose 18.2% y/y

Ukraine Raises 2021 Grain Output Estimate to Record 80.3M Tons

Ukraine’s grain harvest may reach a record 80.3m tons this year, according to Agriculture Ministry’s estimate as of Oct. 1 obtained by Bloomberg News.

  • That’s up by 24% from previous year.
  • Total is expected to include:
    • 37.1m tons of corn; up 22.5% y/y.
    • 9.4m tons of barley; up 23.1% y/y.
    • NOTE: Ukraine’s farmers have already completed wheat harvesting with more than 33m tons reaped.
  • Total grain exports may exceed 61.4m tons, also an absolute record, including:
    • 24.5m tons of wheat, up 47% y/y.
    • 30.9m tons of corn, up 34% y/y.

Russian grain export in current agricultural year down 22.4% – Ministry – ITAR-TASS World News

Russian grain export in the agricultural year of 2021-2022 (from July 1, 2021 to June 30, 2022) lost 22.4% and totaled 9.9 mln tonnes as of September 23, the Russian Ministry of Agriculture says on Monday.

Export of wheat stood at 8.4 mln tonnes over the season (down 19.2% against the like period in the season of 2020-2021), barley – 1.3 mln tonnes (down 32.9%), and corn – 0.1 mln tonnes (-62.2%).

The Russian Ministry of Agriculture earlier estimated the export potential of grain in this season at 51 mln tonnes.

Russia Plans Wheat-Export Quota Next Year to Safeguard Supply

  • The size of the quota will depend on domestic wheat demand
  • It will also be defined by the size of the 2021 exports: union

Russia plans to set wheat export limits as part of grains quotas from mid-February to help keep domestic flour and bread prices in check, underscoring worries about tightening global supplies.

As part of the quota, there’ll be a specific limit for wheat shipments, Eduard Zernin, head of the Russian Union of Grain Exporters, said by email following a meeting between the union and the Agriculture Ministry. The figure will be defined based on this year’s exports and next year’s domestic demand, he said. The ministry declined to comment.

The plan highlights how governments are still worried about securing enough grain to feed people and keep a lid on food inflation. Benchmark wheat futures have rallied back toward an eight-year high in Chicago, driven by smaller-than-expected American reserves and Russian planting headaches just as import demand rises. Russia is vying with the European Union to be the world’s top wheat exporter this season.

Russia earlier this year said it plans to use quotas for the second part of each season going forward. The previous export quota — for 17.5 million tons of all grains — expired at the end of June, and the government has since been using a floating tax on overseas wheat sales.

The planned new quota was discussed between the union and the Agriculture Ministry on Sept. 30 and may become effective from Feb. 15, Kommersant reported earlier on Monday. The newspaper also said that the ministry expects wheat exports at about 31.5 million tons this season, including 14 million tons in January though June 2022.

Separately, Russia is considering subsidizing grain shipments from the main producing regions on Russia’s south to the regions of the central federal district that have suffered from poor harvests, Zernin said.

Russia may plant less winter wheat for 2022 than expected -analysts

  • Russia’s winter wheat sowing for 2022 crop is delayed y/y
  • Dry weather and export taxes among reasons
  • Russia winter wheat area seen down 0.5-1.2 mln ha y/y – analysts

Russia’s total winter wheat sowing area could fall by 0.7-1.2 million hectares from a year ago, Sovecon consultancy said. IKAR, another consultancy, currently sees the reduction at 0.5-1.0 million hectares from 17.8 million hectares sown a year ago.

Sovecon and IKAR expected the reduction of 0.5-1.0 million and 0.5 million hectares, respectively, in mid-September.

Winter wheat, sown in autumn for harvesting in summer, typically accounts for 70% of Russia’s crop, brings a higher yield than the spring planted crop and is less vulnerable to adverse weather.

Farmers had sown winter grains on 10.8 million hectares as of Sept 30, down from 12.3 million hectares at the same date a year ago, according to the agriculture ministry. There is no publicly available data just for winter wheat.

Preliminary data from Russian regions show that farmers would be able to sow about 19 million hectares of winter grains, the ministry told Reuters. The area totalled 19.3 million hectares last year.

Brazil Glyphosate Price Soars on China Energy Squeeze: Allier

Price of glyphosate imported from China has jumped about 2.5 times this year through September, due to the increase in raw material costs and restrictions in factories due to energy rationing, according to Flavio Hirata, partner at Sao Paulo-based consultant AllierBrasil.

  • Hurricane Ida in late August further aggravated the situation, forcing the temporary closing of Bayer’s glyphosate plant in Louisiana
  • At the moment, makers of the product in China are not even providing glyphosate prices for new contracts, which will only resume when factories are back in operation, says Hirata
  • “It is almost certain that prices will tend to increase in the short term”
  • Most of farmers in top agricultural state Mato Grosso already bought and received the glyphosate needed for this year’s soybean crop, which is being seeded now, says Wellington Andrade, executive director for state’s farm group Aprosoja
    • However, the concern remains over the second corn crop, which is planted by February, as part of the glyphosate needed is still missing, he said

CPO PRICE SET TO STAY AT CURRENT LEVELS UNTIL Q2 2022 — ANALYSTS – Bernama

The price of crude palm oil (CPO) is expected to stay at current levels until the early second quarter of 2022, said analysts.

On Sept 30, the CPO futures contract on Bursa Malaysia Derivatives closed at an all-time high, with the benchmark palm oil contract – December 2021 – jumping to RM4,595 a tonne.

CGS-CIMB Securities head of Malaysia research Ivy Ng sees the average CPO price at RM3,700 per tonne for 2021 and that it would stay at the RM2,800 per tonne level next year.

CPO producers face several key challenges in maintaining the commodity’s price in the coming year, she said. Reversing the declining CPO yields could be the main challenge for producers due to labour shortage, adverse weather, ageing estates, diseases, as well as the adverse impact of climate change such as La Nina.

Malaysia’s Palm Oil Stockpiles to Edge Lower on Sturdy Exports

  • Inventories likely dropped 0.5% m/m in September, survey shows
  • Prices have rallied due to booming demand and supply concerns

Palm oil stockpiles in Malaysia probably eased from a one-year high, as a strong recovery in exports countered a small rise in production.

Inventories fell 0.5% in September from the previous month to 1.866 million tons, according to the median of 12 estimates in a Bloomberg survey of analysts, traders and plantation executives. The holdings hit 1.875 million tons in August, the highest since June 2020, data compiled by Bloomberg show.

The slight drop in inventories is bullish for prices, which have already rallied to a record, due to booming demand and concern about tight vegetable oil supplies. Palm oil exports from Malaysia have jumped, especially to top importers such as India and China, while there’s concern production will fall short of expectations despite September being a peak output season.

Malaysia’s palm oil exports probably jumped 38% to 1.61 million tons in September, the highest level this year, according to the survey. Productionlikely gained just 2.5% to 1.75 million tons. The Malaysian Palm Oil Board will release official stockpiles, production and export data on Oct. 11.

More details on the survey:

  • Stockpile estimates range from 1.69 million to 1.97 million tons
  • Production range from 1.67 million to 1.80 million tons
  • Exports range from 1.51 million to 1.70 million tons
  • Domestic consumption ranges from 200,000 tons to 300,000 tons

SOYBEAN/CEPEA: International demand is redirect to Brazil, and domestic prices rise

It is expected that the progress of the harvesting will press down values, scenario currently observed in the United States. On the other hand, in Brazil, lower inventories in the offseason are underpinning soybean prices. This year, besides this seasonal factor, the USA have had logistic issues – caused by storms and hurricanes – and less purchasers interested in their product, majorly from China. Thus, the international demand for soybean has been redirected to Brazil, which still has stocks to meet demands from abroad. This scenario added to the US dollar appreciation against the Real, helps to push up prices in the Brazilian market.

In this context, the demand from China for the Brazilian product increased, underpinning export premiums, which hit the highest levels since 2018 – considering the contracts from October and November in the same period of previous years. Based on the port of Paranaguá (PR), asking prices hit 2.35 USD/bushel yesterday, 30, higher than the 2.2 USD/bushel registered on the previous Thursday, 23. The dollar rose by 2.4% between Sept. 23 and 30, at 5.437 BRL. From August to September, the American currency increased by 0.8%.

CORN/CEPEA: Sellers leave the market again, and prices rise

Corn sales have been weak in Brazil, in both the spot and the term markets. This scenario reflects the disinterest of sellers, who left the market, expecting better sales opportunities in the coming weeks. On the other hand, demand has increased slightly, since many consumers claim to have inventories.

In general, agents are focused on sowing the summer crop and on the weather. So far, rainfall has been irregular and below the average. Besides, agents are worried about the possibility of La Niña, which may limit precipitation and raise temperatures in central-western, southeastern and southern Brazil.

Bursa Malaysia Launches East Malaysia Crude Palm Oil Futures

Contract aims to provide a new platform to access East Malaysia palm oil price, according to Bursa Malaysia Derivatives at a virtual launch ceremony Monday.

  • Contract will have delivery points in Sabah and Sarawak, which account for nearly half of Malaysia’s crude palm oil production
  • Approved port tank installations in Bintulu, Lahad Datu and Sandakan will improve logistics costs of physical delivery
  • Contract is accessible globally

LIVESTOCK: USDA Cattle and Hog Slaughter Estimates

  • Cattle slaughter estimate at 637k, down 4.1% from a year ago
  • Hog slaughter at 2.524m, down 3.4% y/y

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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