Global Ag News for May 9.23

TOP HEADLINES

No Black Sea grain deal ships inspected as Russian deadline looms

The United Nations said no ships were inspected on Sunday or Monday under a deal allowing the safe Black Sea export of Ukraine grain, which Moscow has threatened to quit on May 18 over obstacles to its own grain and fertilizer exports.

The U.N. and Turkey brokered the Black Sea export agreement in July last year to help tackle a global food crisis that has been worsened by Moscow’s war in Ukraine. Officials from Russia, Ukraine, Turkey and the U.N. make up a Joint Coordination Centre (JCC) in Istanbul, which implements the deal.

The United Nations said on Monday that so far nearly 30 million metric tonnes of grain and foodstuffs had been exported from Ukraine under the Black Sea deal, including nearly 600,000 metric tonnes of grain in World Food Programme vessels for aid operations in Afghanistan, Ethiopia, Kenya, Somalia, and Yemen.

“In 2022, Ukraine supplied more than half of WFP’s global wheat grain procurement, as it was the case in 2021,” the U.N. said in a statement.

Ukraine had been putting forward daily a list of ships to be authorized by the JCC. Once approved, ships are inspected by JCC officials near Turkey before traveling to a Ukrainian Black Sea port via a maritime humanitarian corridor to collect their cargo and return to Turkish waters for a final inspection.

“The JCC conducted no inspections yesterday and today,” the U.N. said on Monday, adding that the U.N. and Turkey were “working closely with all sides with the aim to facilitate movements and inspections of inbound and outbound vessels … while discussions for the future of the Initiative continue.”

FUTURES & WEATHER

Wheat prices overnight are down 5 3/4 in SRW, up 2 in HRW, up 3 1/2 in HRS; Corn is down 3 3/4; Soybeans down 3 3/4; Soymeal down $2.10; Soyoil up 0.10.

For the week so far wheat prices are down 12 in SRW, up 13 1/4 in HRW, up 11 1/4 in HRS; Corn is down 3 3/4; Soybeans down 6 1/2; Soymeal down $1.30; Soyoil down 0.58.

For the month to date wheat prices are up 14 1/2 in SRW, up 70 in HRW, up 43 1/2 in HRS; Corn is up 7 3/4; Soybeans up 10 3/4; Soymeal down $7.60; Soyoil up 2.08.

Year-To-Date nearby futures are down 19.1% in SRW, up 0.3% in HRW, down 11.6% in HRS; Corn is down 4.1%; Soybeans down 3.6%; Soymeal down 11.1%; Soyoil down 16.4%.

Chinese Ag futures (JUL 23) Soybeans up 68 yuan; Soymeal down 9; Soyoil down 20; Palm oil up 30; Corn up 2 — Malaysian palm oil prices overnight were up 62 ringgit (+1.65%) at 3824.

There were changes in registrations (-7 Oats, 147 Soyoil). Registration total: 2,389 SRW Wheat contracts; 24 Oats; 11 Corn; 0 Soybeans; 995 Soyoil; 130 Soymeal; 81 HRW Wheat.

Preliminary changes in futures Open Interest as of May 8 were: SRW Wheat down 977 contracts, HRW Wheat down 1,556, Corn up 8,712, Soybeans up 5,301, Soymeal up 2,936, Soyoil up 2,132.

Northern Plains: Temperatures continue to be near or above normal in the Northern Plains for at least the next week, favoring planting. Scattered showers that fell over the weekend will continue in waves throughout the week, offering some increase in soil moisture for some of the dry areas.

Central/Southern Plains: Scattered showers went through some of the driest areas of Nebraska over the weekend, as well as parts of Texas. Drought areas in the southwest saw very little with high temperatures. Waves of showers will develop this week, but be largely disorganized, which may leave some areas missed by the activity. However, the continued period of rainfall is favorable to some of the driest areas in the country, including those areas in the southwest.

Midwest: Scattered showers and heavy rain went through some of the driest areas of the Midwest over the weekend, favorable for emergent corn and soybeans, but also brought severe weather. Showers continue Monday, though may have a couple drier days midweek before another system in the Plains brings showers in for late week and weekend. Most areas yet to plant will have a window of opportunity to get into the fields, while some of these showers will be beneficial. Showers will be disorganized, however, which will leave some areas dry.

Delta: Wetter soils in the Delta are mostly favorable for developing crops. Disorganized areas of showers and thunderstorms will be possible through the weekend, which may or may not hit most areas. Either way, conditions continue to be mostly favorable for seeds in the ground.

Canadian Prairies: Mild temperatures in the Canadian Prairies over the weekend favored further planting progress, while some showers developed and brought needed rainfall to limited areas. Disorganized showers will be possible throughout the week, though may not hit very many areas with anything of significance. Southeastern areas stand a better chance late this week. Cooler temperatures may be possible for a brief period next week but would also come with additional rainfall.

Argentina Grains & Oilseeds: It remains dry in Argentina, unfavorable for winter wheat planting and establishment. More rain is needed. However, it should remain drier for at least the next week.

The player sheet for 5/8 had funds: net sellers of 2,000 contracts of SRW wheat, sellers of 2,500 corn, sellers of 2,000 soybeans, sellers of 0 soymeal, and  sellers of 2,000 soyoil.

TENDERS

• SOFT WHEAT TENDER PASSED: Algerian state agency ONAB is believed to have rejected all offers and made no purchase in tenders for up to 140,000 tonnes of animal feed corn and 70,000 tonnes of soymeal which closed last week.
• FEED WHEAT TENDER: Taiwan’s MFIG purchasing group has issued an international tender to buy up to 65,000 tonnes of animal feed corn which can be sourced from the United States, Brazil, Argentina or South Africa
• WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy a total of 125,974 tonnes of food-quality wheat from the United States, Canada and Australia in a regular tender that will close on Thursday.

PENDING TENDERS

• RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 43,500 tonnes of rice
• CORN TENDER: Algerian state agency ONAB issued an international tender to purchase about 140,000 tonnes of corn to be sourced from Argentina or Brazil
• SOYMEAL TENDER: Algerian state agency ONAB issued an international tender to purchase up to 70,000 tonnes of soymeal.
• FEED BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase up to 120,000 tonnes of animal feed barley.

TODAY

US Inspected 963k Tons of Corn for Export, 395k of Soybean

In week ending May 4, according to the USDA’s weekly inspections report.

• Corn: 963k tons vs 1,519k the previous wk, 1,477k a yr ago
• Wheat: 209k tons vs 358k the previous wk, 263k a yr ago
• Soybeans: 395k tons vs 408k the previous wk, 507k a yr ago

USDA CROP PROGRESS: Corn Crop 49% Planted, Soybeans 35% Planted

Highlights from the report:

• Corn planted 49% vs 26% last week, and 21% a year ago
• Corn emerged 12% vs 6% last week, and 5% a year ago
• Soybeans planted 35% vs 19% last week, and 11% a year ago
• Soybeans emerged 9% vs 3% a year ago
• Winter wheat 29% G/E vs 28% last week, and 29% a year ago
• Spring wheat planted 24% vs 12% last week, and 26% a year ago
• Spring wheat emerged 5% vs 2% last week, and 8% a year ago
• Cotton planted 22% vs 15% last week, and 23% a year ago
• Sorghum planted 24% vs 21% last week, and 22% a year ago

Brazil second corn crop sales slower as prices drop, logistical woes weigh – Safras

Forward sales of Brazil’s second corn crop hit 24.3% of the expected production of 92.2 million tonnes, according to a survey by agribusiness consultancy Safras & Mercado that reflects slow farmer selling for this time in the season.

Lower prices and uncertainty related the weather have weighed on farmer sentiment, Safras said citing the risk of frosts affecting part of the fields in some states, though weather forecasts do not indicate they will.

Second corn planting, which occurs after soybeans are reaped, occurred later than normal this year because of delays in the soybean harvesting.

In May of 2022, Brazilian second corn crop sales were 31% of the expected production while the historical average for this time of year is 32.6% of projected output, according to Safras data.

Paulo Molinari, an analyst at Safras, cited logistical bottlenecks at ports and lack of storage space as affecting sales of Brazil’s second corn crop, which represents 70% to 75% of national output in a given year.

“Prices dropped a lot and farmers are still waiting for something that will improve this condition,” Molinari told Reuters. “In Parana, Mato Grosso do Sul and Sao Paulo, the risk of frosts is still making farmers put off forward sales of their second corn crop,” he added.

Corn prices have been pressured by expectations of a record harvest in Brazil, among other factors, and have deepened their decline throughout April.

A warehousing deficit in Brazil, compounded by slow sales of a record soybean crop in the country, has also exacerbated the silo shortage problem, Molinari noted.

“There is no room to accelerate corn sales in May,” Molinari said, adding Brazil’s port logistical woes will only improve around September, after most of Brazil’s soybean crop has been shipped.

China April Imports: Customs

General Administration of Customs says on website.

• Soybean Imports 7.263m Tons
  • Soybean imports YTD rose 6.8% y/y to 30.286m tons
• Edible vegetable oil imports in April 851,000 tons
  • Edible vegetable oil imports YTD rose 136.5% y/y to 3.09m tons
• Meat (including offal) imports in April 593,000 tons
  • Meat (including offal) imports YTD rose 12.7% y/y to 2.544m tons
• Fertilizer exports in April 1.794m tons
  • Fertilizer exports YTD rose 25.1% y/y to 7.375m tons

China April soy imports down 10% y/y on stricter customs checks

China’s imports of soybeans fell 10% in April compared to a year ago, customs data showed on Tuesday, after a stricter clearance process at customs delayed processing of cargoes.

The world’s top soybean buyer brought in 7.26 million tonnes of the oilseed last month, significantly less than the 9 million tonnes expected by traders, based on vessel line-ups.

Analysts and traders attributed the drop to new customs procedures that began in April, delaying discharging of soybean cargoes for up to two weeks.

“The strengthened inspection at customs continued during the whole month of April and that resulted in lower imports than expected,” said Rosa Wang, analyst at Shanghai JC Intelligence Co Ltd.

Soybeans are crushed to make protein-rich soybean meal, one of the major ingredients in animal feed, as well as oil for cooking.

Crushers had stepped up purchases of soybeans since late last year to meet an expected recovery in demand from China’s livestock sector.

But Chinese customs began in April requiring traders to wait for the result of quarantine checks before taking delivery of their soybeans up to two weeks later, according to Wang Mingwei, an analyst at Dayue Futures.

The change has not been publicly announced. China’s General Administration of Customs could not immediately be reached for comment.

The delays have pushed up cash prices of soymeal in China, said a Beijing-based trader, with the price in crushing hub Rizhao up 13% during April to 4,320 yuan per tonne.

That will exacerbate losses for hog farmers, already struggling with an oversupply of pigs that has dragged down prices.

Hog prices are currently less than 15 yuan ($2.17) per kilogramme, with farmers losing up to 204 yuan per hog in some regions, according to Shanghai JC Intelligence.

With April soybeans delayed until May unloading, May imports should return to high levels, probably between 9 million and 10 million tonnes, Wang said.

Soybean arrivals for the first four months came to 30.29 million tonnes, up 6.8% from the same period in 2022, the data also showed.

WHEAT/CEPEA: Prices continue to fade in Brazil but rise abroad

Wheat prices are following opposite directions in the Brazilian and the international markets this month. In Brazil, purchasers are not interested in closing deals, and supply is low, pressing down quotations – it is worth to mention that the last harvest was a record. Abroad, values are being underpinned by high demand, the worse conditions of winter crops in the United States and low sowing of spring crops.

Cepea surveys show that, between April 28 and May 5, the prices paid to wheat farmers dropped 4% in both Paraná and Santa Catarina and 0.24% in Rio Grande do Sul. In the wholesale market (deals between processors), values decreased 6.86% in PR, 4.08% in São Paulo, 3.66% in RS and 1.16% in SC. The US dollar dropped 0.9% in the same period, closing at BRL 4.944 on Friday, 5.

Based on data from Conab (Brazil’s National Company for Food Supply), between April 24-28, the import parity price for the wheat from Argentina delivered to Paraná State was at USD 350.26/ton. Considering the average of the US dollar in that period, at BRL 5.0384, the wheat imported was sold at BRL 1,764.76/ton, while for the Brazilian wheat traded in Paraná, the average was lower, at BRL 1,562.63/ton, according to data from Cepea. In Rio Grande do Sul, the price of the product from Argentina closed at USD 328.55/ton, which accounts for BRL 1,655.38/ton – against BRL 1,351.91/ton on the average of the State calculated by Cepea.

CROPS – In Paraná, according to Seab/Deral, 28% of the new crop had been sown by May 1st, ahead of the 13% from early May 2022.

TRADE BALANCE – According to data from Secex (Foreign Trade Secretariat), Brazil imported 312.82 thousand tons of wheat in April, 27% less than that imported in March and 39.3% down from that in Apr/22. In the last 12 months, imports totaled 5.15 million tons. In April, 54.8% of the wheat imported came from Argentina; 43.4%, from Uruguay; and 1.79%, from Paraguay.

As for exports, Brazil exported 281.68 thousand tons of wheat in April, a steep 56.4% less than that shipped in March but still 82.5% more than that from Apr/22. In 12 months (May/22 – Apr/23), exports totaled 2.79 million tons.

Ukraine Crop-Vessel Inspections Drop to 2.9 Per Day in May: UN

Completed ship inspections by the Joint Coordination Centre have dropped to a daily average of 2.9 inbound and outbound vessels so far in May, according to the office of the UN coordinator for the Black Sea Grain Initiative.

• That’s down from a daily average of 4 in April, 5.6 in March and a peak of 10.6 in October
• The UN, as well as the Turkish delegation, are “working closely with all sides” to facilitate ship movements and inspections, while discussions on the future of the initiative continue

US Fertilizer Price Hikes Likely to Revert as Demand Ebbs

A surge in spring fieldwork and near-term demand caused fertilizer supplies to tighten at New Orleans (NOLA) and inland. Yet the recent price surges for urea, phosphates and potash are showing strain as demand wanes and suppliers strive for empty bins by summer. A steep drop in phosphate pricing at NOLA brought the US market back in line with other global buyers.

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