Global Ag News for Apr 5.22

Wheat prices overnight are up 32 3/4 in SRW, up 31 1/2 in HRW, up 17 in HRS; Corn is up 7; Soybeans up 15 1/4; Soymeal up $0.48; Soyoil up 0.50.

For the week so far wheat prices are up 55 in SRW, up 52 1/2 in HRW, up 33 1/2 in HRS; Corn is up 19 1/2; Soybeans up 30 1/2; Soymeal up $0.88; Soyoil up 1.45. For the month to date wheat prices are up 37 in SRW, up 39 1/2 in HRW, up 22 1/2 in HRS; Corn is up 8 3/4; Soybeans down 3/4; Soymeal down $7.60; Soyoil up 2.90.

Year-To-Date nearby futures are up 35% in SRW, up 33% in HRW, up 12% in HRS; Corn is up 27%; Soybeans up 21%; Soymeal up 11%; Soyoil up 29%.

Chinese Ag futures (SEP 22) Soybeans up 5 yuan; Soymeal down 131; Soyoil down 12; Palm oil down 186; Corn down 4 — Malaysian palm oil prices overnight were up 218 ringgit (+3.83%) at 5910. China markets are closed for holiday.

There were no changes in registrations. Registration total: 2,185 SRW Wheat contracts; 1 Oats; 0 Corn; 132 Soybeans; 98 Soyoil; 0 Soymeal; 154 HRW Wheat.

Preliminary changes in futures Open Interest as of April 4 were: SRW Wheat down 125 contracts, HRW Wheat up 347, Corn up 10,564, Soybeans down 594, Soymeal down 569, Soyoil up 3,612.

Northern Plains Forecast: Isolated to scattered showers through Thursday. Mostly dry Friday. Temperatures near to above normal Monday-Tuesday, near to below normal Wednesday-Friday. 6-to-10-day outlook: Mostly dry Saturday. Isolated showers Sunday. Scattered showers Monday-Wednesday. Temperatures near to above normal Saturday-Sunday, near to below normal Monday, below to well below normal Tuesday-Wednesday.

Central/Southern Plains Forecast: Scattered showers north Tuesday. Mostly dry Wednesday-Friday. Temperatures near to above normal Monday-Tuesday, near to below normal Wednesday, below normal Thursday-Friday. 6-to-10-day outlook: Mostly dry Saturday-Sunday. Scattered showers Monday-Wednesday. Temperatures near to below normal Saturday, above to well above normal Sunday-Tuesday, below normal northwest and above normal southeast Wednesday.

Western Midwest Forecast: Scattered showers Tuesday-Thursday. Mostly dry Friday. Temperatures near to above normal through Wednesday, below normal Thursday-Friday.

Eastern Midwest Forecast: Isolated to scattered showers through Friday. Temperatures near to above normal Tuesday-Wednesday, near to below normal Thursday, below normal Friday. 6-to-10-day outlook: Isolated showers east Saturday. Mostly dry Sunday. Scattered showers Monday-Wednesday. Temperatures below normal Saturday, near to below normal Sunday, above to well above normal Monday-Wednesday.

 Brazil Grains & Oilseeds Forecast: Rio Grande do Sul and Parana Forecast: Isolated showers to scattered showers through Friday. Temperatures near to above normal through Friday. Mato Grosso, MGDS and southern Goias Forecast: Isolated showers through Friday. Temperatures near to above normal through Friday.

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

The player sheet for 4/4 had funds: net buyers of 13,500 contracts of SRW wheat, buyers of 14,500 corn, buyers of 10,500 soybeans, buyers of 3,000 soymeal, and  buyers of 3,500 soyoil.

TENDERS

• CORN SALE: The U.S. Department of Agriculture confirmed private sales of 1.084 million tonnes of U.S. corn to China, the biggest such sale to China since May 2021. The purchase included 676,000 tonnes of old-crop corn and 408,000 tonnes of new-crop corn.
• WHEAT PURCHASE: Saudi Arabia’s main state wheat buying agency, the Saudi Grains Organization (SAGO), said it agreed to buy 625,000 tonnes of wheat in an international tender. SAGO said it made the purchase at an average price of $422.47 a tonne.
• WHEAT PURCHASE: Iraq’s state grains board purchased about 100,000 tonnes of wheat expected to be sourced from Germany in a tender which closed in March
• WHEAT TENDER UPDATE: Bangladesh’s state grains buyer received the lowest price offer assessed at $406.83 a tonne CIF liner out in an international tender to purchase and import 50,000 tonnes of wheat which closed on Monday
• 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

PENDING TENDERS

• FEED GRAIN TENDER: Iranian state-owned animal feed importer SLAL issued an international tender to purchase up to 60,000 tonnes of animal feed barley, 60,000 tonnes of feed corn and 60,000 tonnes of soymeal
• BARLEY TENDER: A buyer in Qatar issued a tender to buy an estimated 105,000 tonnes of animal feed barley
• BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase 120,000 tonnes of animal feed barley
• WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of milling wheat

U.S. Inspected 1.528m Tons of Corn for Export, 737k of Soybean

Ukraine Can’t Sow 3.5m Ha of Planting Areas Amid War: Minister

Ukraine suggests that farmers should sow crops that have a higher market price and produce lower volume of harvest per hectare to ease deliveries, the nation’s agriculture ministry says in a statement, citing Minister Mykola Solskyi.

• NOTE: The overall area for spring crops was 16.9m ha in 2021
• Crops that should be prioritized include sunflower, soybean, rapeseed
• Farmers are well supplied with seeds as well as fuel
• Biggest challenge is how to export crops, given that Ukraine is cut off from the sea by Russia’s troops

Ukraine Grain Group Asks Gov. to Lift Wheat-Export Restrictions

The Ukrainian Grain Association, a group representing producers and exporters, is asking the nation’s government to scrap licensing restrictions on wheat exports to restore shipments, it said Tuesday in an emailed statement.

• Ukraine has extra stockpiles of wheat due to a robust harvest last year
• Maintaining shipments has been complex amid Russia’s invasion that’s blocked the country’s seaports
• NOTE: Ukraine’s government will likely consider removing the need for licenses from shippers to sell wheat abroad in April after it has clarity on how the nation’s sowing campaign is progressing

Kazakhstan to Limit Wheat Exports for 2 Months from April 15

Kazakhstan decided to limit wheat exports to 1m tons for April 15-June 15, Agriculture Ministry says in reply to emailed questions.

• Kazakh agriculture ministry works on order regulating the limit of wheat exports
• NOTE: Kazakhstan, the largest former Soviet wheat exporter after Russia and Ukraine, plans grain exports at an average level of previous years

India’s wheat exports hit record 7.85 million tonnes in 2021-22 -traders

India’s wheat exports hit 7.85 million tonnes in the fiscal year to March, an all-time high and a sharp increase from 2.1 million tonnes in the previous year, traders said, as Russia’s invasion of Ukraine cuts off rival Black Sea supplies.

Earlier this month, a top government official said India would export a record 7 million tonnes of wheat in the 2021-22 fiscal year as a rally in global prices gave the world’s second biggest producer of the grain an opportunity to gain market share. (Full Story)

India achieved its target of exporting 7 million tonnes of wheat on March 21, according to the Indian government, which is yet to issue wheat shipment data for the last 10 days of March.

Traders said wheat shipments, including cargoes sold to neighbouring Bangladesh by land, totalled 7.85 million tonnes in 2021-22, surpassing the target of 7 million and indicating robust exports in the 2022-23 fiscal year that began on April 1.

Other than Bangladesh, India exported wheat to South Korea, Sri Lanka, Oman and Qatar, among others, traders said. Most export deals were signed at between $225 and $335 a tonne free on board, they said.

“Business has been very brisk, and both Mundra and Kandla ports have been very busy handling outbound wheat cargoes,” said Rajesh Paharia Jain, a leading New Delhi-based trader.

India’s new season wheat harvest is underway, and this year’s production is pegged at a record 111.32 million tonnes – the sixth straight surplus output – encouraging traders to clinch more export deals.

Russian Farmers Switch to Domestic Suppliers as Planting Starts

• Farmers in major wheat producer face higher input costs
• Shift shows challenges to sector as Russia becomes isolated

Russian farmers are switching to domestic suppliers of seeds and pesticides to sow their spring crops, as the fallout from President Vladimir Putin’s invasion of Ukraine leads to import challenges.

War-related sanctions and logistical issues have created import problems for about 10% of seeds, Dmitry Rylko, general director of the Moscow-based Institute for Agricultural Market Studies, said in an interview. For now, most demand for seeds has been fulfilled “one way or another” and planting is going smoothly, he added.

Still, the switch to domestic supply shows how Russian agriculture will have to adapt as the nation becomes more isolated over the war. Russian farmers are facing a steep increase in costs as it becomes more complex to source pesticides, seeds and equipment due to sanctions and foreign companies exiting the country.

Higher prices could also have a ripple effect globally, as Russia and Ukraine together account for about a quarter of the world’s wheat trade. Ukrainian farmers are trying to carry out spring planting in the midst of the war, and any disruption in supply places greater importance on Russia’s crop.

Major Russian agricultural producer Steppe Agroholding said it would keep the area of wheat crops at last year’s level, while expanding plantings of “highly profitable niche crops.”

Sugar-beet farmers are now having to pay in advance for inputs and equipment, rather than in installments as they did before the war, Interfax reported, citing Russia’s union of sugar producers, which said 60% of components for sugar beet are imported.

Some major shipping companies have restricted vessels from visiting Russia, creating further complications. The country was dependent on the European Union for 58% of its pesticide imports and 68% of its high-value seed imports last year, according to the UN Food and Agriculture Organization.

Russian pesticide company Shans Group said it saw increased demand in March because of other manufacturers facing logistical problems and farmers stocking up due to economic instability.

Machinery manufacturers Deere & Co. and Caterpillar Inc. are among companies that have suspended their Russian operations. Bayer AG said crop supplies for the 2023 growing season will depend on the country “returning to a path of international diplomacy and peace.”

 

 

WHEAT/CEPEA: Values continue to drop; wheat area may be smaller in PR

Wheat prices are still fading in Brazil and abroad. In the domestic market, quotations are being pressed down by the dollar depreciation against the Real, which lowers the import parity. Brazilian farmers have even been away from the spot market, reducing liquidity; these agents are now focused on sowing the new crop and selling the summer crop.

Between March 25 and April 1st, the US dollar dropped by 1.53% compared to the Real, to BRL 4.669 on Friday, 1st. Data from Cepea show that, in the same period, the prices paid to wheat farmers dropped by 3.7% in Paraná (PR), 3.42% in Santa Catarina (SC) and 1.16% in Rio Grande do Sul. In the wholesale market (deals between processors), quotations decreased by 2.7% in RS, 2.13% SC, 1.38% in PR and 1.34% in São Paulo.

Based on data from Conab (Brazil’s National Company for Food Supply), between March 21-25, the import parity price for the wheat from Argentina delivered to Paraná State was USD 395.05/ton. Considering the average of the US dollar in that period, at BRL 4.8178, the wheat imported was sold at BRL 1,903.27/ton, while for the Brazilian wheat traded in Paraná, the average was at BRL 1,909.77/ton, according to data from Cepea. In Rio Grande do Sul, the import parity for the product from Argentina would be of USD 370.76/ton (BRL 1,786.25/ton), against BRL 1,877.57/ton on the average of the state surveyed by Cepea.

As for the coming season in Brazil, Deral has released its first area estimates for PR, at 1.17 million hectares, 4% lower than that in 2021 and losing area to corn crops, majorly in western PR, also because of the tight profit margins of farmers. However, area may still be larger, since sowing may take place up until July.

According to data from Secex, in the 22 working days of March, Brazil exported 800.80 thousand tons of wheat, the second largest monthly amount since 1996, only lower than the record set in Feb/22. Since August/21, Brazil has shipped 2.85 million tons of wheat.

Imports totaled 527.70 thousand tons, against 611.45 thousand tons in Mar/21. As for the import value, it averaged USD 302.3/ton in Mar/22 (FOB origin), 16.1% higher than that in Mar/21 (USD 260.3/ton).

 

European Farmers Turning to GM Feed to Replace Corn From Ukraine

• Ukraine is a key supplier for Spain and the Netherlands
• Alternative suppliers in the U.S. and Brazil produce GM corn

European farmers are set to buy more genetically modified animal feed from the U.S. and South America after Russia’s invasion cut off corn shipments from Ukraine.

The war in Ukraine is already pushing companies to turn to less sustainable alternatives to sunflower oil, and that shift is also likely to include corn, which is mainly used as animal feed. Ukraine’s non-GM corn accounts for about half the European Union’s imports. However, 92% of U.S. corn is GM, according to the Center for Food Safety, with similar levels in Brazil.

While companies in the EU don’t have to label meat or products from animals fed GM crops, over the past decade, consumer demand has increased for dairy produce from cows fed with the non-GM variety.

As the EU shifts to shoring up food security, it’s relaxing import rules. In Spain, which is expecting corn shipments from the U.S., Argentina and Brazil over the next two weeks, the government is temporarily allowing imports with traces of pesticides to compensate for the loss of Ukraine output.

That will help to avoid shortages, said a spokesperson for CESFAC, the association of feed makers in Spain, one of Ukraine’s biggest customers, along with the Netherlands.

The price of corn and other grains have surged in the wake of Russia’s invasion. Ukraine had exported about 6.6 million tons of corn to the EU by the end of March, compared with a five-year average of 7.2 million tons.

Strategie Grains head Andree Defois forecasts that the EU will import 800,000 tons of U.S. corn this season, the most since 2017-18.

“Some farmers in central Europe and Denmark are starting to run out of non-GMO feed,” Ase Andersson, global head of media at dairy giant Arla, said in an email.

Argentina’s grain transporters call for strike amid fuel shortage

Leaders from Argentina’s major transportation union said on Monday they will call for a national strike to demand an increase in grain freight rates, as higher fuel costs cause tensions throughout the industry.

The national transport federation is demanding the government increase the tariffs on grain producers to reflect the higher costs for fuel, which has been affected by galloping inflation.

“In order to avoid further damage to the economy of its members, calls for a national stoppage of activities from Monday, April 11 at 00.00 hours (0300 GMT) until an answer is found,” the federation said in a statement.

Around 86% of soybean transportation to Argentina’s ports is carried out by trucks, 13% by trains and the remaining 1% by ships.

Agricultural producers in the South American country have expressed their concern about the lack of fuel in different production areas, at a time of the seasonal harvest of soybean and corn, the two main crops of the major global grains exporter.

Besides that, Argentina’s main rural associations have previously warned about the lack of fuel in the current context of international shortage of diesel oil and a sharp reduction in the global food supply due to the conflict between Ukraine and Russia.

The second quarter of the year is the time when the bulk of soybeans and corn are harvested, which last year recorded exports of close to $30.5 billion, including soy oil and meal shipments.

Egypt Wheat Stocks At 2.6 Months: Cabinet

Vegetable oil stockpile enough for 5.9 months, while sugar supplies sufficient for 5.6 months, the Cabinet says in a statement.

Rice stocks enough for 5.9 months

Canola Exports Running on Fumes

Canadian canola exports are close to running dry as domestic supplies tighten further.

Canadian Grain Commission data shows just 800 tonnes of canola were shipped in week 34 of the 2021-22 marketing year, down sharply from just over 128,000 the previous week. It was by far a new marketing year low, handily beating out the previous low of 6,200 tonnes in week three. The marketing year high was hit in week 15 at 304,900 tonnes.

“Everybody I talked to fully expected that by the time we got to April, there wasn’t going to be much left. That turned out to be true,” said Quorum Corp. president Mark Hemmes. Edmonton-based Quorum is an independent third party that tracks grain movement across Canada, monitoring the system’s efficiency and reliability.

Canola exports were fairly decent in September and October 2021, but by February of this year there was little left to move out, Hemmes said, adding he expects most the remaining canola supply to be earmarked for the domestic crush.

In the wake of last year’s summer drought that slashed Canadian production by about one-third, Agriculture Canada is projecting total 2021-22 canola exports at just 5.4 million tonnes, down by nearly half from the 10.57 million that was shipped the previous season. The domestic crush is estimated by Ag Canada at 8.5 million tonnes, a more modest 18% decline from a year earlier.

Like exports, the crush pace actually also held up relatively well through the first few months of the 2021-22 crop year but has now slowed to near expectations. Statistics Canada reported late last month domestic processors crushed 629,153 tonnes of canola in February, down from 651,282 in January and more than 168,000 tonnes or 21% below the same month a year earlier.

Russia Limit on Fertilizer Exports Will Squeeze Supplies Into 2H

Global fertilizer prices should get more support into 2H since trade with Russia remains limited due to export bans and U.S. sanctions. Russia is a low-cost, high-volume producer of nitrogen, phosphate and potash.

Parts, Materials Sanctions Limit Russia’s Ability to Expand NPKs

Russia fertilizer-expansion plans risk delay as sanctions limit materials and the engineering expertise needed for greenfield expansion. Russia is a high-volume, low-cost fertilizer exporter, with 90% of its potash production, 67% of its nitrogen and 75% of its phosphate (collectively called NPKs) sent abroad. As Russia expands its domestic-fertilizer production, global trade volume rises. The technical parts and engineering partners necessary to build new facilities are few and often in Western countries that have sanctioned Russia for its invasion of Ukraine. Before the war, Russian potash capacity was set to expand 4.7 million metric tons, or 62% of global potash capacity expansion in the next five years.