Global Ag News for Apr 13.22

TODAY’S  HEADLINES

Wheat prices overnight are up 3 1/4 in SRW, up 6 1/4 in HRW, down 2 1/4 in HRS; Corn is down 1; Soybeans down 2 1/2; Soymeal down $0.08; Soyoil down 0.16.

For the week so far wheat prices are up 57 1/2 in SRW, up 63 in HRW, up 27 in HRS; Corn is up 10 3/4; Soybeans down 11; Soymeal down $0.57; Soyoil up 0.39. For the month to date wheat prices are up 113 3/4 in SRW, up 143 1/4 in HRW, up 77 in HRS; Corn is up 38 1/2; Soybeans up 49 1/2; Soymeal down $2.50; Soyoil up 5.22.

Year-To-Date nearby futures are up 44% in SRW, up 46% in HRW, up 18% in HRS; Corn is up 31%; Soybeans up 26%; Soymeal up 12%; Soyoil up 34%.

Chinese Ag futures (SEP 22) Soybeans down 23 yuan; Soymeal up 9; Soyoil up 104; Palm oil up 210; Corn up 6 — Malaysian palm oil prices overnight were down 41 ringgit (-0.66%) at 6136.

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 12 were: SRW Wheat down 1,131 contracts, HRW Wheat up 1,539, Corn up 21,921, Soybeans down 7,780, Soymeal up 3,744, Soyoil up 8,013.

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

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

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

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

Canadian Prairies Forecast: Alberta, Saskatchewan, Manitoba Forecast: Scattered showers east Thursday-Friday. Temperatures below to well below normal Thursday-Friday. Isolated to scattered showers Saturday-Sunday. Mostly dry Monday-Wednesday. Temperatures below to well below normal Saturday-Wednesday.

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

Argentina Grains & Oilseeds Forecast: Cordoba, Santa Fe, Northern Buenos Aires Forecast: Mostly dry through Friday. Temperatures below normal through Friday. La Pampa, Southern Buenos Aires Forecast: Mostly dry through Friday. Temperatures below normal through Friday.

The player sheet for 4/12 had funds: net buyers of 11,000 contracts of  SRW wheat, buyers of 8,500 corn, buyers of 7,500 soybeans, buyers of 2,500 soymeal, and  buyers of 4,000 soyoil.

TENDERS

• CORN SALE: South Korean feed maker Nonghyup Feed Inc has bought an estimated 207,000 tonnes of animal feed corn in an international tender that closed on Tuesday
• WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries is seeking to buy a total of 114,645 tonnes of food-quality wheat from the United States, Canada and Australia in regular tenders that will close on April 14.
• WHEAT TENDER UPDATE: Egypt’s state grains buyer will accept offers from Russia and Ukraine in its international wheat purchasing tender this week despite supply disruptions, according to the state buyer’s tender book seen by Reuters.
• FAILED BARLEY TENDER: Jordan’s state grain buyer is believed to have made no purchase in an international tender for 120,000 tonnes of animal feed barley which closed on Tuesday
• FEED WHEAT AND FEED BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said on Wednesday it would seek 70,000 tonnes of feed wheat and 40,000 tonnes of feed barley to be loaded by July 31 and arrive in Japan by Sept. 29, via a simultaneous buy and sell (SBS) auction that will be held on April 20.
• SOYMEAL PURCHASE: Three South Korean importers have purchased a total of 121,000 tonnes of soymeal in private deals largely expected to be sourced from South America

PENDING TENDERS

• WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of milling wheat
• 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

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

Output and stockpile projections for the week ending April 8 are based on eight analyst estimates compiled by Bloomberg.

• Production seen slightly lower than last week at 1.002m b/d
• Stockpile avg est. 25.7m bbl vs 25.903m a week ago
• The EIA in Washington is scheduled to release the report at 10:30am Wednesday

China March Soybean Imports 6.353m Tons: Customs

General Administration of Customs says on website.

• Soybean imports YTD fell 4.2% y/y to 20.282m tons
• Edible vegetable oil imports in March 307,000 tons
  • Edible vegetable oil imports YTD fell 62.8% y/y to 1.047m tons
• Meat (including offal) imports in March 594,000 tons
  • Meat (including offal) imports YTD fell 36.5% y/y to 1.666m tons

China’s agricultural product wholesale price index edges down

The wholesale prices of China’s agricultural products went down Wednesday, according to the Ministry of Agriculture and Rural Affairs.

The latest China agricultural product wholesale price index came in at 133.14, down 0.21 points from Tuesday.

By 2 p.m. Wednesday, the average wholesale price of pork, China’s staple meat, fell 1.1 percent to 17.88 yuan (about 2.8 U.S. dollars) per kg, and that of eggs was up 1.4 percent to 10.07 yuan per kg.

The average wholesale price of 28 key types of vegetables tracked by the government dropped 1.5 percent, coming in at 5.31 yuan per kg, while that of six key types of fruits edged down 0.9 percent to 7.34 yuan per kg.

The wholesale price index is compiled on the basis of data collected from around 200 agricultural wholesale markets and is updated daily based on the weighted average of price indices for goods including vegetables, fruits, aquatic products, livestock products, cereals and edible vegetable oil.

Argentine grains truck traffic grinds to a halt as strike hardens

Argentine truck owners extended a grains transport strike on Tuesday, bringing grains haulage traffic to a virtual halt at the peak of the harvest season in the world’s leading exporter of processed soy and number two shipper of corn.

The protest, demanding higher freight rates as inflation spirals, started on Monday, leaving important roadways for carrying grains for producers to the ports without the normal jam of trucks which occurs every year from around April.

The indefinite strike has not yet hit exports because the ports have large stored reserves of grains, but a prolongation of the protest could start to affect shipments. About 85% of Argentina’s grain is transported around the country by truck.

“We will come out of the strike with a new rate schedule. Otherwise we won’t come out of the strike at all,” Pablo Agolanti, vice president of the Federation of Argentine Carriers (FETRA), told Reuters.

The country’s transport ministry in a statement called for a meeting on Wednesday at 10:00 local time (1300 GMT) to continue the “dialogue” with the truckers.

Regarding the impact of the protest, local agricultural logistics company AgroEntregas said that “there is no truck movement” towards the port terminals. Its data showed just 57 grains trucks entering ports, down from over 6,000 on April 9.

USDA attaché sees Brazil 2022/23 corn output at 118 million T

Following are selected highlights from a report issued by the U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) post in Brasilia:

“Next season, Post forecasts corn area to expand by one million hectares (ha), to a total of 22.5 million ha, and production to top 118 million metric tons (MMT). The wheat planted area will grow to 3.4 million ha, with production reaching nearly 9 MMT. The expansion for both commodities is forecast on rising global prices and demand, spiked by the armed conflict in the Black Sea region. Although Brazilian growers have room to expand planting, the big question is whether they will have enough fertilizer to do so. A reduction in inputs would also lead to lower yields, though the impact will be uneven across the country and will depend at least to an extent on climate.”

USDA attaché sees record-large India wheat harvest, exports in 2022/23

Following are selected highlights from a report issued by the U.S. Department of Agriculture’s Foreign Agricultural Service (FAS) post in New Delhi:

“India is heading for a record wheat harvest this marketing year (MY) thanks to highly favorable weather conditions in the major wheat growing areas. FAS New Delhi (Post) forecasts MY 2022/2023 (April-March) wheat production at a record 110 million metric tons (MMT) from 30.9 million hectares, and up from last year’s record 109.6 MMT from 31.1 million hectares. With the Russo-Ukrainian war disrupting supply from the Black Sea, Indian wheat is primed for record exports. Post forecasts MY 2022/2023 wheat exports at 10 MMT (record) on continued competitive prices in the region and sufficient domestic supplies. MY 2022/2023 rice production is forecast at 125 MMT, from 46 million hectares planted area, with yields of 4.08 MT/hectare (rough rice).”

China’s corn planting facing delays as lockdowns leave farmers stranded

Planting of corn in one of China’s major producing areas could be delayed as many of the region’s millions of farmers struggle to return home from temporary city jobs because of strict coronavirus lockdowns.

Any delay to planting could hit output in the world’s No. 2 corn producer, where corn prices are already hovering at record levels, and government support for soybeans also threatens to reduce growing of the grain.

China’s northeastern provinces, its breadbasket, have endured weeks of restrictions on movement, with the toughest measures in Jilin province where COVID-19 cases soared in early March.

With the critical time for sowing grain fast approaching, some farmers remain stuck and are getting increasingly worried, despite recent government pledges to tackle the issue.

The problem highlights the challenge for China in balancing its strict zero-COVID policy with its high priority on food security.

Fertilizer supplies to the region have also been disrupted by the transport curbs, and farmers are already facing record prices of the crop nutrient as well as diesel and other costs. (Full Story)

As thousands of farmers took to social media last week to vent their frustrations with the situation, the Jilin government stepped in to organize special transport.

Smallholder farmers in China typically take manual jobs in cities over the winter months when farming activity stops.

Nearly 100,000 stranded farmers had returned home by April 10, according to the local authorities.

Planting is “slightly delayed, but the impact will not be big,” said the state-backed Farmers Daily on Monday.

It is not clear how many farmers were still stuck in cities in Jilin or further afield due to the virus measures.

China’s winter wheat improves more than expected, says ministry

China’s weak winter wheat crop has improved more than expected, the agriculture ministry said on Wednesday.

The percentage of first and second grade grain was on par with normal levels, according to a statement on the Ministry of Agriculture and Rural Affairs website.

Recent COVID-19 outbreaks are having varying impact on planting, farming materials transport and supplies of fresh produce in some regions, the ministry said.

China’s March soybean imports fall 18% on year

China imported fewer soybeans in March than a year earlier, customs data showed on Wednesday, as bad weather delayed exports from Brazil and poor crush margins curbed demand.

The world’s top importer of soybeans brought in 6.35 million tonnes of the oilseed in March, down 18% from 7.77 million tonnes in March 2021, General Administration of Customs data showed.

Arriving shipments in the first three months of the year were down 4.2% from a year earlier, at 20.28 million tonnes, according to the data.

Chinese prices of soybean meal rose from the beginning of the year to record highs late in March, as supplies of beans tightened after drought hit the crop in top supplier Brazil, delaying its harvest, though prices later fell from the peak.

Crushers were also slow in making purchases as poor hog margins weighed on crush margins, said traders.

Board crush margins for soybeans for delivery in the period from May to July were around minus 200 yuan to minus 300 yuan (minus $31 to minus $47) per tonne, discouraging buying for future delivery.

Farmers nationwide are losing 300 yuan to 600 yuan for each pig raised, which on soymeal demand.

Beijing has been releasing soybeans from state reserves, increasing supply of the oilseed, which can be crushed into soymeal and cooking oil.

That move, coupled with market expectations of more soybean arrivals in coming months, has helped cool soymeal prices, though they have climbed back up in the past few days.

Prices were pushed up by low rates of operation at crushing plants and recent anti-COVID measures that had restricted transportation of the feed ingredient, said Zou Honglin, an analyst with the agriculture section of China-based consultancy Mysteel.

China’s imports of vegetable oils from January to March plunged 62.8% from a year earlier, to 1.047 million tonnes. March imports were 307,000 tonnes, down 61%, customs data also showed.

Palm Oil Imports by India Climb From 12-Month Low in March: SEA

Palm oil purchases by the world’s biggest buyer increased to 539,793 tons in March, from 454,794 tons a month earlier, according to the Solvent Extractors’ Association of India.

• NOTE: The country imported 526,463 tons in March 2021
• Soybean oil purchases at 299,421 tons last month vs 376,594 tons in February
• Total vegetable oil imports, including non-edible oil, at 1.1m tons vs 1.02m tons
• Edible oil stockpiles at ports and in the pipeline were 2.09m tons on April 1, compared with 1.87m tons at the start of March
• India’s sunflower oil purchases increased to 212,484 tons in March, from 152,220 tons a month earlier
  • March shipments of sunflower oil included vessels that left before the war in Ukraine
  • Supplies from Ukraine were 127,000 tons in March; 73,500 tons from Russia; 11,900 tons from Argentina
  • No shipment of sunflower oil from Ukraine in April
  • India’s total sunflower oil imports may total about 80,000 tons this month, mainly from Russia and Argentina
  • India’s sunflower oil consumption has fallen due to high international prices
  • This shortfall is being partially replaced by palm oil, soybean oil and groundnut oil in southern parts of the country and by refined mustard oil and ricebran oil in the northern region

Indonesia Warns 24 Cooking Oil Producers for Slow Distribution

Industry Ministry has issued warning letters to 24 cooking oil producers that have yet to distribute or report their sales of subsidized bulk cooking oil, according to an emailed statement on Tuesday.

• Cos. need to speed up the distribution of subsidized cooking oil to anticipate the increase in demand ahead of Eid al-Fitr holiday
• Avg. national distribution of the commodity as of April 11 was at 6,060 ton/day, rising from 4,050 ton/day in March
  • Demand for bulk cooking oil is estimated at 77,850 tons during first 10 days of April
• 75 out of 81 cooking oil cos. in the country are registered with the ministry to produce and distribute subsidized cooking oil
  • Another six companies are either yet to become operational or are not eligible to join the subsidized cooking oil program
• Sanctions, including fines and suspension of business permit, will be imposed on cos. that fail to comply with govt requests

Indonesia Consumes 2.5M Kiloliters Biodiesel in 1Q: Ministry

Palm-based biodiesel consumption reached 2.5m kiloliters in Jan.-March period, out of total annual target of 10.1m kiloliters, Arifin Tasrif, energy and mineral resources minister, tells parliament on Wednesday.

• Govt projects annual biodiesel consumption at 10m-11.6m kiloliters in 2023-2025
• Indonesia consumed 9.28m kiloliters of biodiesel in 2021

AgriMer Cuts Outlook for French Wheat Exports Outside the EU

French soft-wheat exports outside the EU are now seen at 9.5m tons in the 2021-22 season, down from 9.7m tons seen in March, it said in a report on Wednesday.

• NOTE: USDA last week cut its estimate for EU wheat exports in the current season, citing a “lower-than-expected pace”
• AgriMer’s estimate for total exports raised to 17.7m tons, from 17.6m tons, on bigger sales within the EU
• Stockpiles outlook raised to 3m tons, from 2.96m tons

BARLEY

• Export estimate raised to 6.1m tons, versus 6.04m tons, on better sales outside the EU
• Stockpiles outlook cut to 1.27m tons, from 1.37m tons

CORN

• Export estimate raised to 5.8m tons, from 5.7m tons
• Stockpiles seen at 2.02m tons, versus 1.97m tons

EU Soft-Wheat Exports Fall 4% in Season Through April 10

Soft-wheat shipments during the season that began July 1 totaled 20.6m tons as of April 10, versus 21.4m tons in a similar period a year earlier, the European Commission said Tuesday on its website.

• NOTE: Figures for the prior season include trade for the U.K. until Dec. 31, 2020, when the country departed the EU customs union
• Top soft-wheat destinations are Algeria (3.1m tons), Egypt (2.17m tons) and China (2.04m tons)
• EU barley exports at 6.14m tons, versus 6.4m tons a year earlier
• EU corn imports at 12.6m tons, versus 12.5m tons a year earlier

German Grains Crop Outlook Improves After Recent Rains: DRV

Germany’s 2022 grain harvest is now seen at 43.6m tons, up from a March estimate of 43.2m tons, agricultural cooperatives group DRV says in an emailed report.

• That remains an “average” amount, it says
• Spring plantings are almost complete, aside from corn
• Precipitation the past two weeks has benefited grain and rapeseed fields, following a dry March
• Wheat crop estimated at 22.7m tons, up from March outlook for 22.6m tons
• Corn crop seen at 4.3m tons, up from March outlook for 4.1m tons
• Barley crop seen at 10.6m tons and rapeseed at 3.9m tons, both steady with the prior outlook

Ukraine’s Winter Grains Mostly in Good State, Forecaster Says

Weather conditions were satisfactory for Ukraine’s winter, spring crops in early April, the government-controlled Hydrometeorological Center said in a statement on its website.

• Rains helped plants, replenished moisture in soil
• Level of soil moisture was sufficient, optimal for crops as of April 10

Union Pacific Will Limit Traffic to Clear Clogged Rail Lines

• Company to begin metering customers’ railcars after April 18
• Railroad has also removed its own cars, added locomotives

Union Pacific Corp. plans to limit customer-owned railcars on its network beginning next week to ease traffic jams that have gummed up the supply chain.

The railroad said in a letter to customers that it would begin metering traffic after April 18 if customers don’t voluntarily reduce their inventory before then. Union Pacific also said it’s removing 2% to 3% of its own railcars and has added 50 locomotives since January with plans to bring on 100 more to help move cars along.

“The operating inventory levels continue to rise on a daily basis,” Kenny Rocker, Union Pacific’s sales and marketing chief, said in the letterpublished on its website on Monday. “We have already identified and notified those customers who can help us manage the current congestion by reducing their railcar inventories.”

The industry has struggled with soaring freight since the pandemic drove higher demand for goods, choking the nation’s supply chain. The situation prompted the U.S. Surface Transportation Board to call public hearings later this month to hear from all the major railroads on steps to improve network fluidity, citing a broad worker shortage and railroads’ “bare bones” cost cutting.

“The railroads simply do not have a sufficient number of employees,” board Chairman Martin Oberman said in a statement last week.

Union Pacific said in its letter that it has transferred 80 crew members to help in congested areas and has 450 employees in training that will be ready for locomotives in summer.

The moves come after Union Pacific took steps last July to ease a backup in Chicago, where trailers weren’t being unloaded fast enough amid a crush of traffic. The company halted all containers at the time from Los Angeles to Chicago for about a week.

In a new statement, Union Pacific said the latest attempt to meter railcars will help it work through the backlog, echoing the “approach we successfully applied last year with West Coast intermodal traffic.”

Union Pacific shares were little changed at 9:31 a.m. in New York.

ADM to Increase Capacity for Alternative Protein in Illinois

ADM is investing roughly $300 million to expand its alternative meat producing complex in Decatur, Illinois, according to a company statement.

• The investments will double extrusion capacity of the complex and increase soy protein concentrate capacity
• The new Decatur Innovation Center will put labs, test kitchens, and pilot-scale production capabilities in the same place
• Co. expects the new project to be completed in the first quarter of 2025
• This expansion, plus the acquisition of Sojaprotein, will increase ADM’s alt-protein global production capacity by 30%
• Sales in alternative protein in food and dairy alone will reach $125 billion in 2030