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Global Ag News for Sep 13

TODAY – CROP PROGRESS, EXPORT INSPECTIONS

Wheat prices overnight are down 2 1/4 in SRW, down 3/4 in HRW, down 5 1/4 in HRS; Corn is down 4 1/4; Soybeans down 2 3/4; Soymeal down $0.14; Soyoil up 0.14.

Markets finished last week with wheat prices down 40 1/2 in SRW, down 41 3/4 in HRW, down 39 in HRS; Corn is down 11; Soybeans down 8 3/4; Soymeal unchanged; Soyoil down 2.87.

For the month to date wheat prices are down 36 in SRW, down 30 1/4 in HRW, down 30 in HRS; Corn is down 21; Soybeans down 8 3/4; Soymeal down $4.50; Soyoil down 2.62.

Chinese Ag futures (JAN 22) Soybeans up 44 yuan ; Soymeal up 50; Soyoil down 52; Palm oil down 90; Corn up 12 — Malasyian Palm is up 32. Malaysian palm oil prices overnight were up 32 ringgit (+0.75%) at 4310 on anticipation of rising demand from the biggest buyer India after the country announced lower import duties for vegetable oils.

The player sheet for Sept. 10 had funds: net sellers of 5,000 contracts of  SRW wheat, buyers of 5,000 corn, sellers of 10,000 soybeans, buyers of 3,000 soymeal, and  buyers of 500 soyoil.

Preliminary changes in futures Open Interest as of September 10 were: SRW Wheat down 2,355 contracts, HRW Wheat down 4,070, Corn down 6,562, Soybeans up 1,243, Soymeal down 673, Soyoil down 1,425.

There were no changes in registrations. Registration total: 1,180 SRW Wheat contracts; 0 Oats; 0 Corn; 0 Soybeans; 299 Soyoil; 1 Soymeal; 1,275 HRW Wheat.

TENDERS

  • SOYBEAN SALE: The U.S. Department of Agriculture confirmed private sales of 132,000 tonnes of U.S. soybeans to China for shipment in the 2021/22 marketing year.
  • WHEAT SALE: A government agency in Pakistan is estimated to have bought some 405,000 tonnes of wheat from optional origins in an international tender to purchase and import up to 550,000 tonnes which closed this week
  • WHEAT, BARLEY SALE: Tunisia’s state grains agency is believed to have reached agreement to purchase about 75,000 tonnes of soft milling wheat and 100,000 tonnes of animal feed barley in an international tender which closed on Friday
  • WHEAT TENDER: A government agency in Pakistan has issued an international tender to purchase and import 500,000 tonnes of wheat
  • WHEAT TENDER: Saudi Arabia’s main state wheat-buying agency, the Saudi Grains Organization (SAGO), has purchased an estimated 382,000 tonnes of wheat in an international tender

PENDING TENDERS

  • WHEAT TENDER: Jordan’s state grain buyer has issued a tender to buy 120,000 tonnes of milling wheat sourced from optional origins
  • 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
  • MILLING WHEAT TENDER: Bangladesh’s state grains buyer has issued another international tender to purchase 50,000 tonnes of milling wheat
  • WHEAT TENDER: Morocco’s state grains agency ONICL has issued a tender to import about 363,000 tonnes of U.S.-origin soft wheat under a preferential tariff import quota
  • WHEAT FLOUR TENDER: The state purchasing agency in Mauritius issued an international tender to buy 47,000 tonnes of wheat flour to be sourced from optional origins

 KEY TAKEAWAYS from September’s USDA World Agricultural Supply and Demand Report

  • Baked In: The U.S. Department of Agriculture boosted its forecast for U.S. corn and soybean production, sending prices briefly into a tailspin before markets recovered. In general, the data matched analyst expectations for bigger supplies, and this report could signal that the seasonal lows that typically accompany the U.S. autumn harvest have been realized.
  • $5 Corn: December-delivery corn fell below this threshold for the first time since January, before paring losses. Farmers and traders like nice round numbers, so this will be a key level to watch going forward.
  • Early Acreage: The Agriculture Department adjusted U.S. corn planting acreage higher by 1%, while nudging soybeans lower by less than 1% as the agency’s data inputs — typically not done until October — were nearly completed a month early.
  • Ida Effect: The impact on both crops and exports from Hurricane Ida, however, was still very much a wild card. The USDA said effects from flooding in parts of Louisiana and Mississippi will not be fully reflected in the report; several big grain terminals around New Orleans that handle over half of U.S. grain and oilseed exports remained without power.
  • China’s Appetite: Sales of U.S. soybeans to China, the world’s top importer, have picked up as of late but more deals are needed to catch up with USDA projections. Meanwhile, the agency boosted China’s corn-production outlook, which could signal a future cut in the Asian country’s corn imports as more domestic supplies would reduce the need for foreign grain.

 Argentina 2022 Soy Output Seen Falling to 48.8m Tons: Rosario

Estimated production of the new crop falls marginally, to 48.8m metric tons from 49m last month, the Rosario Board of Trade says in a reportdated Sept. 8.

  • Planting forecast also falls 1.2%, to 16.2m hectares (40m acres) from 16.4m last month, as farmers shift to corn
  • Soy planting set to be the lowest in 15 years
  • NOTE: Argentine soy is planted from late October and starts being harvested in March
  • Corn is being preferred because of higher profit margins, helped by a lower tax burden, and better yields in dry conditions
    • Production estimate for corn in 2022 jumps by 1.8% m/m to 56m tons
    • Planting estimate increases by 1.5% m/m to 6.9m ha
  • Recent rainfall has boosted the wheat crop already in the ground
    • Production estimate climbs 2% m/m to 20.5m tons
  • La Nina weather pattern is likely for the season ahead, the bourse says. While it’ll probably be of low intensity, it’ll nevertheless limit rainfall

 Ebbing Argentina River Means Lightest Cargoes in 3 Years: Bourse

Cargoes of late corn shipped in August from the Rosario export hub on the Parana River averaged just 28,400 metric tons, the lowest in three years, the Rosario Board of Trade says in its weekly newsletter.

  • A drought has shallowed the river to its lowest in 50 years, reducing draft in the shipping channel. The situation is expected to get worse, only improving after November
  • Argentina is meeting its export commitments, but sending ships to buyers with light cargoes is generating dead-freights costs. Bigger vessels are topped up at Atlantic ports, but that’s also an extra cost because grain is more expensive there

 India Slashes Import Taxes on Edible Oils to Boost Demand

India lowered base import taxes on palm oil, sunflower and soybean oils, a move that’s expected to bolster consumption demand in the country.

The base import tax on crude palm oil, crude soybean oil and crude sunflower oil was cut to 2.5%, the Ministry of Finance said in a notification late Friday. The base import tax on refined grades of palm oil, soybean oil and sunflower oil was slashed to 32.5%.

Hiccups in Fertilizer Extend Price Lift; Demand Dent More Likely

The jump in fertilizer prices that has boosted sales for producers is extending amid plant outages and shipping challenges — a worry for farmers as crop prices level off. Demand remained strong through planting season in Latin America, supporting sellers’ forecasts for rising demand across most products and regions. Yet farmers may curb autumn purchases should crop prices extend their trend of lagging behind hikes in fertilizer costs. Nitrogen demand is typically the least price-sensitive, supporting sales for CF Industries and Yara, while potash producers such as Nutrien and Mosaic face greater risk that farmers might skip a season.

Ebbing Argentina River Means Lightest Cargoes in 3 Years: Bourse

Cargoes of late corn shipped in August from the Rosario export hub on the Parana River averaged just 28,400 metric tons, the lowest in three years, the Rosario Board of Trade says in its weekly newsletter.

  • A drought has shallowed the river to its lowest in 50 years, reducing draft in the shipping channel. The situation is expected to get worse, only improving after November
  • Argentina is meeting its export commitments, but sending ships to buyers with light cargoes is generating dead-freights costs. Bigger vessels are topped up at Atlantic ports, but that’s also an extra cost because grain is more expensive there

Russia Harvested 70M Tons of Wheat so far This Year: Ministry

Russia harvested 97.2 million tons of grain, of which 70 million tons is wheat, Ministry of Agriculture says in statement.

  • Harvesting is nearing the end with only 17% of sown area yet needed to be harvested
  • Farmers in a number of regions have already started sowing winter crops for the harvest of 2022
    • It was carried out on an area of 6.3 million hectares as of Sept. 10

Russia’s grain export estimates for September by consultancy Sovecon

Russia’s September exports of wheat, barley and maize (corn) are estimated at 4.8 million tonnes, up from 4.6 million tonnes in August, the Sovecon agriculture consultancy said.

Russian Wheat Exports May Slow as Tax Rises, Grain Union Says

Based on current wheat prices, the export tax may reach $70/ton by end-September, slowing overseas shipments, Eduard Zernin, head of the Russian Union of Grain Exporters, said by email.

  • Separately, Interfax reported that the export levy may hit $60/ton, citing Dmitry Rylko, director general at consultant IKAR in Moscow
  • NOTE: Russian wheat export tax is set to rise to $52.50/ton for next week, the highest since the duty started in June

Alberta Harvest 45% Complete on Favorable Weather

Harvest in Canadian province is more than double where it was at this point last year, Alberta government says Friday.

  • Farmers have harvested ~54% of spring wheat, 56% of barley and ~14% of canola, weekly crop report shows
    • Oats are ~30% harvested and dry peas ~93%
  • Pasture growth is minimal in most areas, and heavily grazed pastures are struggling to recover, despite recent moisture
    • Pasture conditions are 55% poor, 28% fair and 17% good
  • Region has seen favorable weather over the past week
    • 32% of surface soil moisture is rated poor, 32% fair, 35% good, 1% excellent

India Cumulative Monsoon Rainfall 6% Below Normal as of Sept. 12

India has so far received 739.3 millimeters of rains during the current monsoon season, which runs from June through September, compared with a normal of 789.7 millimeters, according to data published by the India Meteorological Department on Sept. 12.

  • The eastern and northeastern region got 12% below normal rains
  • Rainfall in the southern peninsular region was at 12% above normal
  • Cumulative seasonal rainfall data is compiled by the IMD

 U.S. Beef Production Falls 7.5% This Week, Pork Down: USDA

U.S. federally inspected beef production falls to 473m pounds for the week ending Sept. 11 from 511m in the previous week, according to USDA estimates published on the agency’s website.

  • Cattle slaughter down 7.5% from a week ago to 577m head
  • Pork production down 5% from a week ago, hog slaughter falls 4.9%
  • For the year, beef production is 3.5% above last year’s level at this time, while pork is 1.7% 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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