Global Ag News for Jan 26.22

TODAY – EIA WEEKLY PETROLEUM STATUS

Wheat prices overnight are down 14 in SRW, down 12 1/2 in HRW, down 15 3/4 in HRS; Corn is down 2 3/4; Soybeans up 1/4; Soymeal down $0.04; Soyoil up 0.35.

For the week so far wheat prices are up 29 3/4 in SRW, up 32 in HRW, down 1 3/4 in HRS; Corn is up 3; Soybeans down 6 1/4; Soymeal down $0.01; Soyoil down 0.33. For the month to date wheat prices are up 33 1/4 in SRW, up 20 1/2 in HRW, down 50 1/2 in HRS; Corn is up 24; Soybeans up 68 1/4; Soymeal down $7.50; Soyoil up 6.33.

Chinese Ag futures (MAY 22) Soybeans up 97 yuan ; Soymeal up 17; Soyoil unchanged; Palm oil up 74; Corn up 22 — Malasyian Palm is up 47. Malaysian palm oil prices overnight were up 47 ringgit (+0.89%) at 5329.

There were no changes in registrations. Registration total: 1,900 SRW Wheat contracts; 21 Oats; 50 Corn; 316 Soybeans; 143 Soyoil; 0 Soymeal; 92 HRW Wheat.

Preliminary changes in futures Open Interest as of January 25 were: SRW Wheat up 11,708 contracts, HRW Wheat down 983, Corn up 21,976, Soybeans up 7,195, Soymeal up 3,462, Soyoil up 4,411.

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

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

The player sheet for Jan. 25 had funds: net buyers of 9,000 contracts of  SRW wheat, buyers of 5,000 corn, buyers of 2,500 soybeans, sellers of 2,000 soymeal, and  buyers of 2,500 soyoil.

TENDERS

• WHEAT SALE: An importer group in the Philippines is believed to have bought around 35,000 tonnes of animal feed wheat in an international tender for the same volume which closed on Tuesday
• BARLEY, CORN, SOYMEAL TENDER: Iranian state-owned animal feed importer SLAL issued international tenders to purchase up to 60,000 tonnes of animal feed barley, 60,000 tonnes of feed corn and 60,000 tonnes of soymeal
• WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries(MAFF) is seeking to buy a total of 47,841 tonnes of food-quality wheat from Australia in a regular tender that will close late on Jan. 27.

PENDING TENDERS

• BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase 120,000 tonnes of animal feed barley
• RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 46,344 tonnes of rice to be mainly sourced from China with some from Thailand
• WHEAT TENDER: Algeria’s state grains agency OAIC issued an international tender to buy a nominal 50,000 tonnes of milling wheat to be sourced from optional origins
• SUNFLOWER OIL TENDER: Turkey’s state grain board TMO issued an international tender to purchase and import about 6,000 tonnes of crude sunflower oil
• WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy 120,000 tonnes of milling wheat which can be sourced from optional origins
• CORN TENDER: South Korea’s Major Feedmill Group (MFG) has issued an international tender to purchase up to 70,000 tonnes of animal feed corn
• CORN AND WHEAT TENDER: South Korea’s leading feedmaker Nonghyup Feed Inc. (NOFI) has issued an international tender to purchase up to 207,000 tonnes of animal feed corn and up to 195,000 tonnes of animal feed wheat

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

Output and stockpile projections for the week ending Jan. 21 are based on seven analyst estimates compiled by Bloomberg.

• Production seen lower than last week at 1.043m b/d
• Stockpile avg est. 23.955m bbl vs 23.592m a week ago
  • Would be the highest since February

Farmers Hoard Crops as Dry Brazil Weather Keeps Prices Elevated

Farmers are holding back grain and soybean sales in a bet that prices will continue rising as dry weather in Brazil and Argentina stokes fears of tight global supplies.

Crop sales by farmers for the current marketing season were below a year ago in the U.S., Brazil and Argentina, which together account for more than three-quarters of global corn and soybean exports, according to Archer Daniels Midland Co., one of the world’s biggest agricultural traders. The season runs from September to August.

Harvest estimates for Brazilian crops have been declining, dashing hopes of a supply recovery and relief from food inflation. Farmers in the South American nation have sold 19% of corn they expect to gather in the coming months, down from the five-year average of 29%, according to an ADM presentation.

Recent rains should help limit crop losses in both Brazil and Argentina, Chief Executive Officer Juan Luciano told investors. Dry weather in southern Brazil has cut yield potential while wetter conditions in the north could stall soybean harvesting and delay plantings of the second crop of corn.

“A lot of people are looking at the South American weather,” the CEO said. “South American weather is very strange at the moment.”

Canada Canola Crush at 705K Tons in December: StatsCan

Canola processing declined 22.1% in December from a year ago, according to Statistics Canada data released Tuesday on agency’s website.

• Oil production totaled 294k tons, and meal output at 423k tons
• Aug.-Dec. crushings down 13% from year ago to 3.802m tons

Goldman Says High Grain Prices to Last on Commodities Supercycle

The surge in grain prices that has pushed global food inflation to a decade high could persist amid a multiyear commodities supercycle, according to Goldman Sachs Group Inc.

Jeff Currie, the bank’s global head of commodities research, reiterated a view that commodities are set for a supercycle that has the potential to last a decade. Price gains in metals and grains will probably be “more sticky and longer term,” he said in a Bloomberg TV interview Wednesday.

Droughts, supply-chain hiccups, labor shortages and increased demand have sent up food prices across the globe by about a quarter in the past year. While the United Nations index tracking world food prices eased in December, they remain near their 2011 all-time high.

Weather worries still abound across major crop suppliers, as the La Nina pattern disrupts typical growing conditions. Dryness in parts of Brazil and Argentina is trimming expectations for bountiful soy and corn harvests. Grain prices could rise further, though not a lot this year, according to Currie.

EU 2021/22 soybean imports at 7.34 mln T by Jan. 23, rapeseed 2.73 mln T

European Union soybean imports in the 2021/22 season that started in July had reached 7.34 million tonnes by Jan. 23, data published by the European Commission on Tuesday showed.

The volume compared with 8.37 million tonnes by the same week in the previous 2020/21 season, the data showed.

EU rapeseed imports so far in 2021/22 had reached 2.73 million tonnes, compared with 4.02 million tonnes a year earlier.

Soymeal imports so far in 2021/22 were at 9.01 million tonnes against 10.01 million a year ago, while palm oil imports stood at 3.01 million tonnes versus 3.38 million.

Figures for France were only complete up to December, the Commission said in its report, without indicating the reason. The delay follows months of missing French data earlier this season due to a technical problem at France’s customs service.

EU 2021/22 soft wheat exports at 15.62 mln T, French data incomplete

Soft wheat exports from the European Union in the 2021/22 season that started in July had reached 15.62 million tonnes by Jan. 23, according to data published on Tuesday by the European Commission, which said French figures were incomplete.

The EU soft wheat exports compared with 15.04 million tonnes by the same week in 2020/21, the data showed.

EU 2021/22 barley exports had reached 4.91 million tonnes, against 4.33 million a year ago, while EU maize imports were at 8.87 million tonnes, against 9.75 million.

Figures for France were only complete up to December, the Commission said in the report, without indicating the reason. The delay follows months of missing French data earlier this season due to a technical problem at France’s customs service.

Argentina rains bring ‘water bomb’ to NW Buenos Aires, drier in the south – exchange

Argentine rains in recent weeks have brought a “water bomb” to key farming areas in the northwest of Buenos Aires province, though there has been less water further to the south, the important Rosario grains exchange said in a report.

The South American country had been suffering a prolonged drought since December which has hit soybeans and corn, but rains in recent weeks have limited crop losses in the world’s largest exporter of processed soy and the no. 2 for corn.

“The first important rains of 2022 left a water bomb of more than 200 mm (millimeters) in the NW of Buenos Aires,” the exchange said in a report on Sunday, adding some regions had received an “entire summer” of rain in just five days.

The picture was mixed, however, with torrential rains in some areas, while other parts of the country’s farming regions received relatively little.

“The southern part of Buenos Aires received less than 25 mm between January 19 and 24. In Santa Fe and Cordoba relief has arrived for crops, but it is not enough,” the exchange added, adding some local areas still faced a lack of water.

The arrival of the rains has overall improved the harvest outlook in Argentina, which relies heavily on grains exports to bring in much-needed dollars as it battles to revamp some $40 billion in debts to the International Monetary Fund.

Some more rains are expected in coming days, it added.

Ukraine wheat production unchanged thanks to favorable weather conditions

Recent and expected favorable weather over the key wheat producing areas maintain 2022/23 Ukraine wheat production at 31.1 [29.5-32.6] million tons (mmt).

Past two weeks featured favorable weather for winter wheat in Ukraine. Temperatures oscillated above normal with no risks of winter kills.. Additionally, a significant amount of precipitation fell across the country, which resulted in beneficial snow cover for winter crops.

Weather forecasts call for continuation of near or above normal precipitation. A cold spell is expected in 7 days, especially in the north-west oblasts where temperatures may drop to the winterkill levels. But decent snow cover should mitigate any significant cold damage to winter crops currently in dormancy.

Favorably normal to warm temperatures maintain EU-27 + UK wheat production

Recent and expected weather conditions maintain 2022/23 EU-27 + UK wheat production at 158.2 [153.5-161.2] million tons.

Dry conditions prevailed across Europe in the past two weeks. Except for Norway, Finland and Denmark, precipitation levels dropped below normal across the whole continent. Temperatures showed a mixed pattern in the past weeks. Values exceeded the long-term normal in the central, north-eastern, and northern regions, especially in Scandinavia. Below normal temperatures were recorded in United Kingdom, Spain, France, Italy, and most of Balkan region. Overall, temperatures in Europe indicate little cold damage risk to winter crops so far.

Upcoming days will maintain similar warm and dry conditions across Europe. Some precipitation and lower temperatures are expected at the end of next week, but no frost risks are present at the moment. Overall short-term weather forecasts show favorable warm conditions for winter crops in Europe.

Ukraine Grain Trader Gets State Aid to Pay Back Chinese Loan

A state-owned Ukrainian grain trader got government support to pay off debt owed to the Export-Import Bank of China.

State Food & Grain Corporation had to pay $96.4 million by Jan. 26, an annual installment on a 15-year loan the trader got from the Chinese bank a decade ago.

The Finance Ministry helped the trader pay part of the amount it owed, a spokesperson for the ministry told Bloomberg News. They didn’t specify the ministry’s share in the payment and said it was planned in Ukraine’s central budget for the year.

The trader’s $1.5 billion loan was guaranteed by Ukraine. The company was set up by the government in 2012 to export Ukrainian grain. It got the loan from Eximbank to purchase corn domestically and ship it to China.