Global Ag News for Apr 26.22

TODAY – U.S. Inspected 1.651m Tons of Corn for Export, 602k of Soybean

Wheat prices overnight are up 23 1/4 in SRW, up 19 1/2 in HRW, up 17 1/2 in HRS; Corn is up 6 3/4; Soybeans up 12 3/4; Soymeal up $0.38; Soyoil up 0.73.

For the week so far wheat prices are up 21 1/4 in SRW, up 23 in HRW, up 32 1/4 in HRS; Corn is up 15 3/4; Soybeans up 1/4; Soymeal down $0.25; Soyoil up 0.30. For the month to date wheat prices are up 93 3/4 in SRW, up 142 3/4 in HRW, up 118 1/4 in HRS; Corn is up 71 3/4; Soybeans up 90; Soymeal down $10.00; Soyoil up 12.17.

Year-To-Date nearby futures are up 41% in SRW, up 45% in HRW, up 22% in HRS; Corn is up 36%; Soybeans up 29%; Soymeal up 11%; Soyoil up 49%.

Chinese Ag futures (SEP 22) Soybeans down 38 yuan; Soymeal down 38; Soyoil down 328; Palm oil down 440; Corn up 10 -Malaysian palm oil prices overnight were up 182 ringgit (+2.92%) at 6411.

There were changes in registrations (-99 Soybeans). Registration total: 2,185 SRW Wheat contracts; 1 Oats; 0 Corn; 0 Soybeans; 98 Soyoil; 0 Soymeal; 154 HRW Wheat.

Preliminary changes in futures Open Interest as of April 25 were: SRW Wheat down 2,173 contracts, HRW Wheat down 884, Corn down 32,339, Soybeans down 6,128, Soymeal down 5,550, Soyoil down 7,248.

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

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

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

Eastern Midwest Forecast: Mostly dry Tuesday-Thursday. Isolated showers Friday. Temperatures below to well below normal Tuesday-Friday. 6-to-10-day outlook: Scattered showers Saturday-Wednesday. Temperatures near to below normal Saturday-Wednesday.

Canadian Prairies Forecast:  Isolated showers west Tuesday-Wednesday. Temperatures near to above normal west and well below normal east Tuesday, below to well below normal Wednesday. Mostly dry Thursday. Scattered showers Friday. Temperatures below to well below normal Thursday-Friday. 6-10 Day Outlook: Scattered showers Saturday-Wednesday. Temperatures below to well below normal Saturday-Monday, near to above normal west and below normal east Tuesday-Wednesday.

 Brazil Grains & Oilseeds Forecast: Rio Grande do Sul and Parana Forecast: Scattered showers through Friday, mostly south. Temperatures above normal through Friday. Mato Grosso, MGDS and southern Goias: Mostly dry through Friday. Temperatures above normal through Friday.

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

The player sheet for 4/25 had funds: net sellers of 4,000 contracts of  SRW wheat, buyers of 6,500 corn, sellers of 9,000 soybeans, sellers of 4,000 soymeal, and  sellers of 2,500 soyoil.

TENDERS

• SOY SALES: The U.S. Department of Agriculture reported sales of 330,000 tonnes of U.S. soybeans to China, including 66,000 tonnes for delivery in 2021/2022 and 264,000 tonnes for delivery in 2022/2023. The USDA also reported 204,000 tonnes of U.S. soybeans sold to China for 2022/2023 delivery.
• SOYMEAL PURCHASE: South Korean animal feed maker Nonghyup Feed Inc. (NOFI) purchased around 60,000 tonnes of soymeal to be sourced from optional origins in an international tender
• VEGOILS TENDER: Egypt’s state grains buyer said it was seeking vegetable oils for arrival June 10-30 and/or July 1-20 in an international purchasing tender. The deadline for offers is April 28.
• SUNOIL TENDER: Turkey’s state grain board TMO has issued an international tender to purchase and import about 18,000 tonnes of crude sunflower oil
• DURUM WHEAT TENDER: Algeria’s state grains agency OAIC has issued an international tender to purchase a nominal 50,000 tonnes of durum wheat, European traders said. The tender closes on Tuesday.

PENDING TENDERS

• WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of milling wheat
• FEED BARLEY TENDER: Jordan’s state grains buyer issued a new international tender to purchase 120,000 tonnes of animal feed barley
• 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

Canada Canola Crush at 740K Tons in March: StatsCan

Canola processing declined 22.8% in March from a year ago, according to Statistics Canada data released Monday on agency’s website.

• Oil production totaled 308k tons, and meal output at 443k tons
• Aug.-March crushings down 17.3% from year ago to 5.823m tons

CME Increases Price Limits For Some Grain, Oilseed Futures

CME, CBOT are resetting price limits for grain, oilseed, lumber futures effective Sunday, May 1 for trade date Monday, May 2. This is first of two price limit resets in 2022, CME Group says in statement Monday.

Biofuel Changes May Not Fix Food Supply Issues

A research note from BofA Global Research says governments shouldn’t count on changing biofuels mandates as a way to keep grocery stores stocked with affordable food. “Against a backdrop of soaring food inflation, some have called for reduced blending mandates to avoid food shortages,” it says. “The US, which consumes >1mn b/d of biofuels, uses 140mn mt of its 400mn mt annual corn crop for ethanol production, or about 5x Ukraine’s corn exports. While countries like Brazil and Finland have dialed back biofuel mandates, the US is signaling for more usage by proposing summer E15 gasoline sales. Thus, a material reduction in biofuel supply seems unlikely at this time.”

US Ethanol Impacted by Rail Delays

A backup in the US rail system is impacting grain shipments, as well as shipments of ethanol. According to written testimony by the Renewable Fuels Association ahead of a Surface Transportation Board hearing beginning tomorrow, the dwell time–time at a scheduled stop without moving–for ethanol-carrying trains has more than doubled occasionally. “In some cases where on-site storage is reaching capacity, some producers are having to reduce ethanol production rates until cars are made available,” says the RFA. According to data from the EIA, the daily rate of ethanol production in the US has declined over 9% in the past month, to 947,000 barrels per day in the agency’s latest assessment. It’s the lowest production has been since last September.

Argentina hikes domestic bioethanol prices again as inflation heats up

Argentina’s government raised domestic prices for corn-based bioethanol on Monday, it said in a resolution in the official gazette, the second increase in a month for the biofuel which is mandatory for mixing with gasoline in the country.

According to the economy ministry’s energy department, bioethanol prices will be set at 94.93 pesos (83 U.S. cents) per liter for April, 96.35 pesos for May, 98.28 pesos for June, 100.74 pesos for July, and 103.76 pesos for August.

The previous price hike, earlier in April, had raised the price to 73.11 pesos per liter for both corn- and sugarcane-based bioethanol.

Argentina, which is battling high inflation, is a major global producer of biofuels – mainly biodiesel – and regularly updates its prices for the domestic market.

Indonesia Palm Oil Ban Applies to RBD Palm Olein, Excludes CPO

Indonesia is banning exports of refined bleached deodorized palm olein until there’s no shortage of cooking oil in the country, the world’s top palm oil shipper says in a circular letter to provincial governors.

• Crude palm oil is excluded from the export ban that starts on April 28, Dedi Junaedi, director of processing and marketing of plantation crops at the agriculture ministry says
• Govt excludes CPO from the ban to avoid a drop in prices of fresh fruit bunches bought from farmers amid fears of overflowing storage tanks: ministry

Indonesia could widen palm oil export ban if local shortages -official

Indonesia will only ban exports of refined, bleached and deodorized palm olein starting Thursday, while the ban will not include crude palm oil or other forms of derivative products, senior government official Musdhalifah Machmud said on Tuesday. The government will strictly monitor the implementation of the ban and the availability of refined palm oil and crude palm oil domestically, according to a presentation the government gave to companies, which Machmud verified. “If there is shortage of refined palm oil, then further export bans can be carried out,” according to the presentation.

Indonesia’s Gapki Expects Cooking Oil Issue to be Resolved Soon

Indonesian Palm Oil Association, known as Gapki, expects domestic cooking oil issues that prompted the government to ban exports of certain products to be resolved soon.

• Market will react positively after govt confirms that exports ban applies only to certain products, said Joko Supriyono, chairman of the association after attending a meeting with the coordinating minister for economic affairs on Tuesday
• Distribution of the bulk and subsidized cooking oil needs to be improved and the govt has assigned state-owned food logistics company Bulog to be involved
• Supply of bulk cooking oil is expected to enter the market faster so its price can reach govt target of 14,000 rupiah/liter
• Trade ministry is still discussing the export regulation, according to secretary general Suhanto

Unilever Doesn’t Expect Shortages From Indonesia Palm Export Ban

Unilever Plc, one of the world’s largest buyers of palm oil, says it does not foresee any immediate product shortages from Indonesia’s move to ban some exports of palm oil.

• “We are already well placed to look at alternative materials,” the company said in an emailed response to questions
• Unilever currently has sufficient supplies to cover its needs
• NOTE: The maker of Ben & Jerry’s ice cream, Hellmann’s mayonnaise and Dove soap purchases about 1 million tons of palm oil, palm kernel oil and derivatives annually

Malaysia Ready to Supply Palm Oil Amid Indonesia Ban: Minister

Malaysia, the world’s second-biggest palm oil producer, said on Tuesday it’s ready to supply the global market following a sudden export banby neighboring Indonesia.

• The country’s palm oil production is expected to increase after the re-opening of borders, enabling hiring of foreign workers, Plantation Industries and Commodities Minister Zuraida Kamaruddin said in a response to questions
• The ministry is confident that the labor shortage issue in Malaysia’s plantation sector will be resolved with the arrival of a new batch of foreign workers in May-June
• “Malaysia is unlikely to struggle with cooking oil supply shortages as its domestic consumption of palm oil is relatively lower than Indonesia’s,” Zuraida said

Russia Losing $70/Ton on Grain Exports Due to Supply Risks: IFX

Russia is losing up to $70 per ton of grain sent abroad due to recent high freight and insurance costs, Interfax reports, citing comments by Russian Grain Union head Arkady Zlochevsky at a conference.

• Says there is an “unprecedented discount” on Russian grain compared to European and American prices; there is demand, but buyers are looking elsewhere first, he said
• Says that when Russia was gaining share in the wheat market, the discount was $10-$20 a ton

USDA attaché sees Argentina 2022/23 wheat exports at 12.6 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 Buenos Aires:

“Wheat exports in marketing year (MY) 2022/2023 are forecast down at 12.6 million metric tons (MMT), as result of a smaller acreage and lower productivity. Meanwhile, barley exports are projected up at 3.7 MMT, which would be the largest on record. Corn exports in MY 2022/2023 are forecast at 38 MMT, the second-highest on record. Sorghum exports are forecast at 2 MMT, the same as in the previous year. Rice exports in MY 2022/2023 are projected down at 340,000 MT, milled basis. For MY 2021/22 Post estimates corn, sorghum, and rice production slightly lower than official USDA estimates at 51.5 MMT, 3.3 MMT, and 1.2 MMT respectively. For wheat and barley, Post estimates higher production than the official USDA estimates at 21.9 MMT and 3 MMT.”

USDA attaché sees Argentina 2022/23 soy crop at 51 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 Buenos Aires:

“For marketing year (MY) 2022/23 Post projects a recovery in Argentine soybean planted acreage to 17 million hectares (HA), resulting in 51 million metric tons (MMT) of soybean production as farmers shift acreage out of cereal crops that require more fertilizer. MY 2022/23 sunflowerseed planted acreage is projected up at 2 million HA, with total production estimated at 4 MMT in response to high prices. MY 2022/23 peanut-planted acreage and production is reduced slightly due to competition from other row crops. MY 2021/22 soybean and sunflowerseed production estimates remain unchanged at 41 MMT and 3.4 MMT, respectively. Projected soybean crush is reduced to 38.9 MMT, in part due to reduced imports from Paraguay. MY 2021/22 peanut production is lowered to 1.2 MMT on drought and early frosts.”

USDA attaché sees Australia 2022/23 wheat crop at 29 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 Canberra:

“Australia is expected to produce another big grain crop in marketing year (MY) 2022/23 after a record setting winter crop and strong summer crop production in MY 2021/22. Another favorable set of conditions around the time of winter grain planting across most production regions of Australia bodes well for another big planted area of wheat and barley for MY 2022/23. However, yields are set to come down from the records set in the previous year, resulting in smaller crops. This is set to lead to a decline in wheat and barley exports in the forecast year from record volumes estimated this year. … FAS/Canberra forecasts wheat production to decline significantly to 29 million metric tons (MMT) in MY 2022/23, but if realized would still be a very large crop. This follows a 36.3 MMT crop in MY 2021/22, and a 33.3 MMT crop in MY 2020/21.”

It’s Getting Too Expensive to Ship Soy From Top Grower Brazil

• Road freight costs are higher than expected, Cargill says
• Brazil soybean acres unlikely to shrink on fertilizer shortage

It’s getting very expensive to export soybeans from Brazil, the world’s top supplier.

That’s according to Cargill Inc., one of the biggest global shippers of the oilseed. Diesel price hikes and worsening road conditions have led to expensive freight rates. The cost to export soybeans this season has exceeded Cargill’s estimates for freight rates by at least 25%, slashing margins, according to Paulo Sousa, who heads Cargill’s operations in the South American nation.

“Logistics were very complicated for Brazil’s summer crop,” Sousa said in a telephone interview. “Who could’ve forecast oil prices at current levels?”

Spiking fuel costs in one of the world’s biggest crop exporters are in focus, because they threaten to further accelerate food inflation that’s gripping the globe. Transportation is already one of the biggest costs in getting crops out of fields to their ultimate destinations, which in the case of soy could be a livestock feeding operation or a food processing plant.

In Brazil, more than half of grain and oilseed production is carried from farms to ports via trucks, and fuel prices largely determine freight rates. Also, a big difference between estimates and the real cost of freight can lead to significant losses for traders like Cargill, because companies usually discount freight costs when they pay farmers, often months before harvest.

WHEAT/CEPEA: Sowing expected to step up in BR; wheat area may shrink in AR

Brazilian agents are currently focused on the beginning of wheat sowing in Brazil, aware that the area allocated to wheat crops in Argentina may shrink slightly. As the neighboring country is the major wheat supplier to Brazil and its output may be lower – and as Russia and Ukraine are important world players when it comes to wheat trades –, Brazilian agents have been on alert. In the United States, sowing of the spring crop has been slower than in previous years, while the conditions of the winter crop have worsened.

BRAZIL – In northern Paraná, according to data from Deral, wheat sowing has not reached 1% of the estimated are yet, which is expected to total 1.22 million hectares. In Santa Catarina and in Rio Grande do Sul, activities are supposed to begin in May.

ARGENTINA – According to information from the Bolsa de Cereales, the area allocated to wheat crops in the 2022/23 season may total 6.5 million hectares, 200 thousand hectares smaller than that in the previous season. The smaller area is linked to the increase in production costs, higher profit margins from barley and domestic policies.

BRAZILIAN MARKET – Data from Cepea show that, between April 14 and 22, wheat quotations fluctuated. When values increased, the influence came from both the US dollar appreciation against the Real and concerns about the world supply, while devaluations reflected wheat price drops abroad.

In the same period, the prices paid to wheat farmers remained stable in Rio Grande do Sul (RS) but decreased by 0.35% in Paraná (PR) and rose by 0.35% in Santa Catarina (SC). In the wholesale market (deals between processors), quotations increased by 0.57% in PR and by 0.51% in RS but dropped by 0.42% in SC and by 0.22% in São Paulo. In the same comparison, the dollar rose by 2.2% against the Real, closing at BRL 4.975 on Friday, 22.

Bird Flu Found in Manitoba Poultry as Cases Spread Across Canada

A case of avian influenza was found in a commercial poultry flock in Manitoba, the province said Sunday in an emailed statement.

• The case in the Rural Municipality of Whitemouth is the first case of H5N1 in Manitoba, according to the Canadian Food Inspection Agency
• The Canadian Food Inspection Agency has confirmed other cases in Alberta, Ontario, British Columbia, Newfoundland and Labrador, Nova Scotia, Quebec and Saskatchewan

Africa Risks $10b Food Production on Lack of Fertilizer: AfDB

Africa could lose more than $10b of food production to a fertilizer crisis emerging from Russia’s invasion of Ukraine, African Development Bank President Akinwumi Adesina said.

• Problem prompted Adesina to call a crunch meeting of finance, public and private sector leaders to discuss access to fertilizers for Africa in mid-May, according to an emailed statement from the Abidjan-based lender
• Meeting is expected to discuss the bank’s African Food Crisis Response and Emergency Facility, among other strategies