Global Ag News for July 10.23

TOP HEADLINES

Erdogan Says Turkey Wants Three-Month Extension of Grain Deal

Turkey wants the safe-transit deal for Ukrainian grain exports from Black Sea ports extended for three months instead of two, said President Recep Tayyip Erdogan.

“I’m hopeful for an extension,” Erdogan said in Istanbul early Saturday in a joint appearance with Ukrainian President Volodymyr Zelenskiy. The pair discussed the grain deal and other matters late Friday after Ukraine’s leader arrived from Slovakia.

The shipping deal is set to expire on July 17. It’s been a vital lifeline for Ukraine’s agricultural exports that’s seen millions of tons of grains and other commodities exported over the past 11 months.

Turkey brokered the original deal along with the United Nations. Its termination – which Russia has repeatedly threatened – may lift global food prices given Ukraine’s importance as an exporter of grains.

Russia increased its criticism of the agreement during the previous extension period, saying the pact didn’t deliver sufficient food to poor African nations. Moscow recently said it sees “no grounds for further continuation” of the deal.

Erdogan also said Russian President Vladimir Putin will visit Turkey in August.

“The whole world is interested in the functioning of the grain corridor,” Zelenskiy said, adding that the continuation of the agreement shouldn’t depend on the “wishes of one state” or “on the mood with which the president of the Russian Federation woke up.”

FUTURES & WEATHER

Wheat prices overnight are up 7 in SRW, up 6 in HRW, up 7 3/4 in HRS; Corn is up 6 3/4; Soybeans up 22; Soymeal up $3.70; Soyoil up 1.50.

Markets finished last week with wheat prices up 5 1/2 in SRW, up 24 1/4 in HRW, up 38 1/2 in HRS; Corn is up 6 1/4; Soybeans down 3; Soymeal down $7.10; Soyoil up 0.92.

For the month to date wheat prices are up 5 1/2 in SRW, up 24 1/4 in HRW, up 42 3/4 in HRS; Corn is up 6 1/2; Soybeans down 3 1/2; Soymeal down $7.30; Soyoil up 0.86.

Year-To-Date nearby futures are down 19.0% in SRW, down 7.9% in HRW, down 9.6% in HRS; Corn is down 17.3%; Soybeans down 0.4%; Soymeal down 14.4%; Soyoil up 4.3%.

Chinese Ag futures (SEP 23) Soybeans down 34 yuan; Soymeal down 33; Soyoil down 36; Palm oil down 36; Corn down 8 — Malaysian palm oil prices overnight were up 89 ringgit (+2.32%) at 3923.

There were changes in registrations (-187 SRW Wheat, 1 Oats, -138 Soyoil). Registration total: 1,455 SRW Wheat contracts; 437 Oats; 121 Corn; 0 Soybeans; 765 Soyoil; 0 Soymeal; 147 HRW Wheat.

Preliminary changes in futures Open Interest as of July 7 were: SRW Wheat down 762 contracts, HRW Wheat up 2,412, Corn down 12,174, Soybeans down 3,583, Soymeal down 2,105, Soyoil up 2,389.

Northern Plains: Isolated to scattered showers through Tuesday. Temperatures below normal through Sunday, near to below normal Monday-Tuesday. Outlook: Isolated to scattered showers Wednesday-Sunday. Temperatures near to below normal Wednesday-Sunday.

Central/Southern Plains: Isolated to scattered showers through Tuesday. Temperatures near to below normal Friday, near to below normal north and near to above normal south Saturday-Tuesday. Outlook: Isolated to scattered showers Wednesday-Sunday. Temperatures near to below normal north and above normal south Wednesday-Sunday.

Midwest: The eastern Corn Belt received measurable rain this past weekend. An active pattern looks likely this week as a few disturbances will move across the north-central U.S., providing chances for rainfall.

The player sheet for 7/7 had funds: net sellers of 3,000 contracts of SRW wheat, sellers of 7,000 corn, sellers of 7,000 soybeans, sellers of 3,000 soymeal, and  sellers of 2,500 soyoil.

TENDERS

• CORN SALE: Private exporters reported the sale of 45,000 metric tons of U.S. corn to Mexico for delivery in the 2022/23 marketing year and 135,000 metric tons of corn to Mexico for delivery in 2023/24, the U.S. Agriculture Department said.

PENDING TENDERS

• RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp has issued an international tender to purchase an estimated 43,000 metric tons of rice. The deadline for submissions of price offers in the tender is July 10.
• WHEAT, BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries will seek 60,000 metric tons of feed wheat and 20,000 metric tons of feed barley to be loaded by Oct. 31 and arrive in Japan by Dec. 21 via a simultaneous buy and sell auction that will be held on July 12.

TODAY

US Export Sales of Soybeans, Corn and Wheat by Country

The following  shows US export sales of soybeans, corn and wheat by biggest net buyers for week ending June 29, according to data on the USDA’s website.

• China was the top buyer of soybeans in the week with 270k tons
• Japan was the top buyer of corn and Mexico led in wheat

US Export Sales of Pork and Beef by Country

The following shows US export sales of pork and beef product by biggest net buyers for week ending June 29, according to data on the USDA’s website.

• Mexico bought 15.1k tons of the 26k tons of pork sold in the week
• Japan led in beef purchases

Brazil June Corn and Soybean Exports by Country: MDIC

Brazil’s Trade Ministry updates its website with exports by country of destination for June.

• Soybean shipments to China rose 42% in June vs the same period last year
• Jan.-June shipments to China reached a record 43.5m tons
• Soybean shipments to Argentina were 1.1m tons, a record high for that destination

CORN/CEPEA: With favorable weather and record crop, prices remain in a downward trend

The combination of advances of the second corn crop harvest (which may hit a record) and the fact that some purchasers are away from trades has been keeping values in a downward trend. It is worth mentioning that some price rises have been registered due to problems in logistics (high freight values) and high humidity in some regions, which hampers the harvest and/or the closing of new deals.

On the average of the regions surveyed by Cepea, corn prices dropped 2.2% in the wholesale market (deals between processors) and 3.3% in the over-the-counter market (paid to farmers) from June 29 to July 6. In Campinas (SP), the ESALQ/BM&FBovespa Index moved down 1.4% in the same period, at BRL 55.35 per 60-kilo bag on July 6.

At B3, future contracts had been influenced by price rises in the international market; however, they closed the week in a downward trend, due to the weak pace of trades and the harvest in Brazil.

In the international market, rains have brought relief for crops conditions in the United States. However, players are still concerned with the productivity. On the other hand, the USDA indicated last week that the 2022/23 area (38 million hectares) is the third biggest since 1944.

In Brazil, the dry weather favored advances of crop activities. Conab data indicate that, up to July 1st, the harvest reached 20% of the national area, advancing 9 percentage points in one week, but with a delay of 8 p.p. compared to the season before.

As for the summer crop, there are only 5.2% of the area in Brazil to be harvested, also according to data from Conab until July 1st.

Secex indicates that Brazil shipped 1.03 million tons of corn in June, higher than the 989.29 thousand tons registered in the month before.

In Paranaguá (PR) and Santos (SP), quotations decreased 6.8% and 5.4%, respectively, from June 29 to July 6.

SOYBEAN/CEPEA: Futures and dollar increases boost prices in Brazil

Soybean prices are moving up in the domestic market in this early July, due to increases observed for both international quotations and the exchange rate, scenario that leads the Brazilian product to be more attractive to importers.

Based on soybean FOB price for shipment at the port of Paranaguá (PR) and future dollar traded at B3 on July 6, the soybean export parity for shipment in August/23 is calculated at BRL 151.76/60-kg bag, higher than values in the spot market. The ESALQ/BM&FBovespa Paranaguá (PR) Index increased 6.6% comparing June 29 and July 6, to BRL 144.66/bag (USD 29.37)/bag.

The CEPEA/ESALQ Index Paraná upped 4.6% in the same period, to BRL 134.46 (USD 27.30/bag) per 60-kg bag July 6. On the average of the regions surveyed by Cepea, soybean prices rose 3.8% in the wholesale market (deals between processors) and 3.5% in the over-the-counter market (paid to farmers). Dollar quotes increased 1.4% between June 29 and July 6, to close at BRL 4.926.

BYPRODUCTS – Soybean meal values have also moved up in the Brazilian market, influenced by price increases of the grain and in the international market and the firm demand.

Most purchasers in Brazil, who were away from trades, needed to close new deals to replenish inventories. On the average of the regions surveyed by Cepea, soymeal prices increased 1.8% over the last seven days.

Soy oil prices, in turn, moved down due to low liquidity – there is a wide gap between prices from purchasers and sellers. The value dropped 0.6% from June 29 to July 6, at BRL 4,996.02 per ton (in São Paulo city with 12% ICMS) on July 6.

2023/24 CROP – The pace of soy trades for the 2023/24 season has been slow this week. Although the global supply is expected to increase, players are focused on weather problems in the United States, on the lower processing activities in Argentina and on the possible higher demand for the Brazilian product.

INTERNATIONAL MARKET – Contracts for soybean and byproducts rose at CME Group in the first week of July. USDA projections indicating smaller area in the US compared to the sea

Fallow Argentine Wheat Farms to Fuel More 2023-24 Corn: Rosario

Farmers who ditched plans to plant wheat on parched fields will use the acreage for an early 2023-24 corn crop, the Rosario Board of Trade said in a report.

• In the so-called zona nucleo that covers the heart of Argentina’s growing belt, “a large part of the 300,000 hectares that couldn’t be planted with wheat will be turned over to corn”
• Zona nucleo will see 2023-24 corn planting increase by 14% y/y
• NOTE: Early corn is sown from September

Malaysia June Palm Oil Stocks Rises to 1.72m Tons: MPOB

Malaysia’s palm oil stocks rose to 1.72m tons in June from 1.69m tons in May, according to Malaysian Palm Oil Board.

• Palm oil production fell to 1.45m tons from 1.52m tons in May
• Palm oil exports rose to 1.17m tons from 1.08m tons in May

Russia’s Wheat-Export Tax to Rise to 2,990 Rubles/Ton: Tass

Russia’s wheat-export duty will rise next week to 2,990 rubles a ton, from 2,610 rubles, Tass reported, citing the agriculture ministry.

India’s summer-sown crop planting lags on uneven monsoon rains

Farmers in India have fallen behind in planting key summer-sown crops such as rice, cotton, corn and soybeans due to the uneven distribution of monsoon rainfall, although they could catch up in the coming weeks if sufficient rain occurs.

Millions of Indian farmers plant summer crops mainly in the monsoon months of June and July, with the harvest starting in October.

This year, the delayed arrival of monsoon rains and lower rainfall in some southern, eastern and central states held back planting of summer crops even as monsoon covered the entire country nearly a week in advance.

Farmers have planted summer-sown crops on 35.34 million hectares as of July 7, nearly 9% lower than a year ago, according to data compiled by the Ministry of Agriculture & Farmers’ Welfare, which will keep updating the provisional crop sowing figures as it gathers more information from states.

Area under rice, the most important summer crop, stood at 5.4 million hectares, down from the last year’s 7.1 million hectares, the data showed.

India accounts for more than 40% of world rice exports, which were 56 million tonnes in 2022, but lower production could force New Delhi to impose more restrictions on the exports, traders said.

“Rice planting in southern states and eastern India was down due to lower rainfall. But it will accelerate as monsoon rains are picking up,” said an exporter based at Kakinada in the southern state of Andhra Pradesh.

The country has so far received 3% lower rainfall than the normal since the four-month long monsoon season started on June 1, but in some regions, the deficit is as high as 43%, weather department data showed.

In July, the most crucial month for planting of summer crops, India is likely to receive average monsoon rainfall between 94% and 106% of the long-term average, the weather department said last week.

Some 3.56 million hectares were planted with soybeans, 26% less than a year ago. Corn was planted in 2.71 million hectares, and was down 12%. Cotton area was down 11% to 7 million hectares, while sugar cane area rose 4.7% to 5.58 million hectares.

Saudi fund signs contracts worth 926 mln riyals for agricultural imports – statement

The Saudi agricultural development fund has signed a number of contracts worth 926 million Saudi riyals with a number of companies to finance imports of soybeans, barley, and corn, the fund said in a statement on Sunday.

“Signing these contracts is part of the fund’s efforts to support food security and compensate for any shortage that may happen in the commodities and agricultural supplies,” the statement said.

US, Canada Fertilizer Prices Slide as Fill Programs Continue

Fertilizer prices in the inland US and western Canada are slipping as farmers wrap up fieldwork, suppliers strive to empty bins and producers launch more summer pricing programs. India’s potash imports are below trend, pressuring the nation to increase imports during 3Q plantings despite its high-cost contract at $422 a metric ton cost-and-freight.

Fertilizer Prices Mixed as Summer Reset Presses On

New Orleans (NOLA) barge prices were down for urea ammonium nitrate (UAN), ammonium sulfate and potash, but up slightly for phosphates on reports of limited supply. Inland phosphate prices remained under pressure, however, with significant drops reported for July offers in the Western US. UAN and urea prices were also flat to lower in the inland US market, though NOLA urea barges tightened to $295-$310 a short ton (st) vs. last week’s $285-$315, with the premium for prompt barges fading as US demand wanes. Fill programs for potash and UAN are expected to push prices down for both products in mid-July.

India is anticipated to call another urea tender in mid-July, and urea prices were inching up in Brazil and Egypt. Stronger demand also pushed phosphates, potash and ammonium sulfate prices higher in Brazil.

Brazil Fertilizers Continue Climbing on Stronger Demand

Three weeks after Brazil urea prices strengthened in the wake of India’s latest tender, ammonium sulfate, phosphate and potash were also up as demand increased for summer crops. New orders are still needed to support the firming potash and phosphate markets, and resistance from buyers could pressure nitrogen ahead of the next planting season.

Potash, Phosphates Firm as Summer Season Approaches

With demand improving, Brazil fertilizer prices extended their bullishness as suppliers anticipate more orders for the summer season. Following last week’s upward move from a mid-June price floor, monoammonium phosphate (MAP) prices are expected to keep strengthening as demand grows and inventories diminish in the coming weeks, but a possible return of China to the export market could ease the pressure on supplies. Potash prices were up 4.7% week-over-week, also driven by a surge in demand, while urea prices rose 5.4% vs. last week as global markets remain pressured. With stronger summer crop demand expected to underpin phosphate and potash prices in the near term, additional strength in urea is less likely since demand for corn isn’t expected to begin until the end of the third quarter.

Gigantic swarm of grasshoppers flying into Utah is so large it is picked up by weather RADAR

A swarm of grasshoppers invading Tooele, Utah was so large it registered on weather radar systems.

The plague of grasshoppers that moved into northwestern Utah late last month it was picked up by the National Weather Service.

The plague-like surge was captured around 6 pm on June 21 heading northeast toward the Great Salt Lake before hitting Tooele, Utah leaving farmers with destroyed crops.

‘Every bit of alfalfa that’s in my fields is gone,’ rancher Michael Dow told KSLTV. ‘I planted a pasture and all the seedlings were about 3/4 of an inch tall Sunday morning, and on Sunday evening, they were gone, it was bare dirt’ he explained.

There have been other reports of insects terrorizing the region for the last few weeks.

Swarms of grasshoppers can destroy crops in a short amount of time, quickly eating their way through fields of  wheat, spinach, corn and other plants.

Turkey’s Erdogan to host Putin, hopes for Black Sea grain deal extension – Reuters News

• Erdogan hosts Ukraine’s Zelenskiy in Istanbul
• Two leaders discuss future of grain deal, prisoner swaps
• Russia is resisting extension of Black Sea grain deal
• Erdogan says Putin expected to visit Turkey in August
• Kremlin says no date yet set for such visit

Turkey’s President Tayyip Erdogan said on Saturday that he was pressing Russia to extend a Black Sea grain deal by at least three months and announced a visit by President Vladimir Putin in August.

He was speaking at a joint news conference with Ukraine President Volodymyr Zelenskiy after the two parties met to discuss the fate of an arrangement, brokered last year by Turkey and the United Nations, to allow for the safe export of grain from Ukrainian ports via the Black Sea despite the war.

Zelenskiy’s visit followed stops in Bulgaria, the Czech Republic and Slovakia, part of a tour of various NATO capitals aimed at encouraging them to take concrete steps at a summit next week towards granting Kyiv membership of the alliance, which Erdogan said Ukraine deserved.

Erdogan said work was underway on extending the Black Sea grain deal beyond its expiration date of July 17 and for longer periods beyond that. The deal would be one of the most important issues on the agenda for his meeting with Putin in Turkey next month, he said.

“Our hope is that it will be extended at least once every three months, not every two months. We will make an effort in this regard and try to increase the duration of it to two years,” he said at the news conference with Zelenskiy.

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