Explore Special Offers & White Papers from AFS

Global Ag News for Aug 5.22

HEADLINES TODAY

Wheat prices overnight are down 9 in SRW, down 7 in HRW, down 3 in HRS; Corn is down 4 1/2; Soybeans down 5 3/4; Soymeal down $0.33; Soyoil up 0.68.

For the week so far wheat prices are down 24 1/2 in SRW, down 10 3/4 in HRW, down 5 3/4 in HRS; Corn is down 14 1/2; Soybeans down 53 3/4; Soymeal down $0.08; Soyoil down 3.45.

Year-To-Date nearby futures are up 2% in SRW, up 8% in HRW, down -8% in HRS; Corn is up 1%; Soybeans up 22%; Soymeal up 25%; Soyoil up 19%.

Chinese Ag futures (SEP 22) Soybeans up 12 yuan; Soymeal up 81; Soyoil down 158; Palm oil up 72; Corn up 6 –Malaysian palm oil prices overnight were up 69 ringgit (+1.81%) at 3890.

Northern Plains Forecast: Isolated to scattered showers Friday-Sunday. Mostly dry Monday. Temperatures near to above normal Friday, near to below normal Saturday-Monday. Outlook: Mostly dry Tuesday-Wednesday. Isolated showers Thursday. Mostly dry Friday-Saturday. Temperatures near to above normal Tuesday-Saturday.

Central/Southern Plains Forecast: Mostly dry Friday. Scattered showers north Saturday-Sunday, south Monday. Temperatures near to above normal through Saturday, near to below normal north and above normal south Sunday-Monday. Outlook: Isolated showers south Tuesday-Wednesday. Mostly dry Thursday-Saturday. Temperatures near to below normal Tuesday-Wednesday, near to above normal Thursday-Saturday.

Western Midwest Forecast: Mostly dry Friday. Scattered showers Saturday-Monday. Temperatures above normal Friday-Saturday, near to below normal north and above normal south Sunday, near to below normal Monday.

Eastern Midwest Forecast: Isolated to scattered showers through Monday. Temperatures above normal through Sunday, near to above normal Monday. Outlook: Isolated to scattered showers Tuesday. Mostly dry Wednesday-Saturday. Temperatures near to below normal Tuesday-Wednesday, near to above normal Thursday-Saturday.

The player sheet for 8/4 had funds: net buyers of 500 contracts of  SRW wheat, buyers of 5,000 corn, buyers of 5,000 soybeans, buyers of 3,000 soymeal, and  buyers of 1,000 soyoil.

TENDERS

  • WHEAT PURCHASE: Iranian state agency the Government Trading Corporation (GTC) is believed to have purchased between 180,000 tonnes to 240,000 tonnes of milling wheat in a tender which closed on Wednesday
  • WHEAT PURCHASE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought 122,103 tonnes of food-quality wheat from the United States, Canada and Australia in regular tenders that closed on Thursday.
  • WHEAT PURCHASE: The Taiwan Flour Millers’ Association purchased an estimated 50,910 tonnes of milling wheat to be sourced from the United States in a tender which closed on Thursday

PENDING TENDERS

  • BARLEY TENDER Jordan’s state grains buyer has issued a new international tender to purchase 120,000 tonnes of animal feed barley

US BASIS/CASH

  • Spot basis bids for corn and soybeans delivered to elevators and processors in Iowa were mostly steady to higher on Thursday, grain dealers said.
    • Spot basis for corn was stronger in western Iowa, reflecting drought conditions.
    • Soy basis was not as strong, though some elevators needed to bring in soy due to low supply.
  • Spot basis bids for hard red winter wheat delivered to grain elevators in the southern U.S. Plains were mostly steady to weaker on Thursday on adequate supplies and light demand, grain dealers said.
    • Grain sales by growers were light as farmers have wrapped up harvesting and are awaiting higher prices before liquidating more of their crop.
    • Global wheat demand has improved with a recent downturn in prices, although export market competition remains stiff for U.S. shipments. Several importers have issued international wheat tenders or purchased wheat this week, including Algeria, Jordan, Iran and Tunisia.
  • Spot basis bids for corn and soybeans delivered to elevators and processors in Iowa were mostly steady to higher on Thursday, grain dealers said.
    • Spot basis for corn was stronger in western Iowa, reflecting drought conditions.
    • Soy basis was not as strong, though some elevators needed to bring in soy due to low supply.

US Agriculture Export Sales for Week Ending July 28

US Export Sales of Soybeans, Corn and Wheat by Country

The following table shows US export sales of soybeans, corn and wheat by biggest net buyers for week ending July 28, according to data on the USDA’s website.

  • China bought 269k tons of the 400k tons of soybeans sold in the week
  • Mexico was the top buyer of corn and “unknown buyers” led in wheat

 US Export Sales of Pork and Beef by Country (Table)

The following table shows US export sales of pork and beef product by biggest net buyers for week ending July 28, according to data on the USDA’s website.

  • China bought 16.8k tons of the 31k tons of pork sold in the week
  • South Korea and Japan combined for 5.4k tons of the 12.2k tons of beef sold

US Corn and Soybean Crops Increase Drought Exposure: Aug. 2

The following table shows the percent of US agricultural production within an area that experienced drought for the week ending Aug. 2, according to the USDA’s weekly drought report.

  • Corn area experiencing moderate to intense drought rose to 31% from 29% the previous week
    • This is the highest level seen since planting began in April
  • Soybean drought area rose to 28% vs 26%
  • Cotton drought area dropped 5 percentage points to 65%

3 Corn-Loaded Ships Leave Ukraine Ports on Friday: Turkey

Three corn-loaded ships leave Ukraine ports on Friday, Turkish Defense Ministry says in Twitter posts.

  • Cargo ship Navistar loaded with 33k tons of corn left Odesa on Friday morning, final destination Ireland
  • Cargo ship Rojen loaded with 13k tons of corn left Chornomorsk, final destination UK
  • Cargo ship Polarnet loaded with 12k tons of corn left Chornomorsk, final destination Turkey
  • Another ship, Fulmar S, is waiting for inspection in Istanbul before it leaves for Ukraine’s Chornomorsk port to load grain, state-run Anadolu reports

Ukraine has harvested 17.5 mln T of grain so far, traders union says

Ukrainian farmers have threshed 17.5 million tonnes of the 2022 grain harvest so far, Ukrainian grain traders union UGA said on Friday.

The union’s statement said the volume included 12.6 million tonnes of wheat with an average yield of 3.6 tonnes per hectare and 4.4 million tonnes of barley with a yield of 3.38 tonnes per hectare.

The UGA said that farmers also harvested 2.5 million tonnes of rapeseed with a yield of 2.68 tonnes per hectare.

Ukraine, a major global grain grower and exporter, harvested a record 86 million tonnes of grain in 2021. That included 42.1 million tonnes of corn and 32.2 million tonnes of wheat.

The government has said that this year’s harvest could fall to about 65-67 million tonnes of grain and oilseeds.

Argentine Corn, Wheat Crop Estimates Aug. 4: Exchange

The Buenos Aires Grain Exchange releases weekly report on website.

  • 2021-22 Corn harvest advanced to 81.4% complete vs 74.2%
  • 2022-23 Wheat planting area held at 6.1m ha
  • The following table compares most current data to previous week and last year’s crop:

 Asia Grains-Russian suppliers offer wheat in Asia, but buyers reluctant

Suppliers offered Russian wheat at lower prices this week in Asia, but most millers were unwilling to sign deals in the face of economic sanctions against Moscow, Singapore-based traders said.

Russian wheat with 11.5% protein was offered around $405-$410 a tonne, including cost and freight (C&F), to Southeast Asia, they said.

“Russian crop looks good and prices are very attractive at just above $400 a tonne,” said one of the traders. “But buyers are not willing to take chances with Russian supplies as cargoes might get into trouble, even though food is not under sanctions.”

The United States has issued clarification aimed at reassuring banks, shippers and insurance companies that transactions for Russian food and fertiliser exports would not breach Washington’s sanctions on Moscow over its invasion of Ukraine. (Full Story)

Last month, Russia-focused Sovecon consultancy raised its forecast for Russia’s 2022 wheat crop to 90.9 million tonnes from 89.2 million tonnes, it said on Thursday, citing high yields at the start of harvesting in southern regions.

France Corn Harvest Seen Falling 19% Y/y On Hot, Dry Summer

This year’s French corn harvest is estimated at 12.66m tons, down 19% y/y, the country’s agriculture ministry said in a report.

  • That’s also 9.1% below the five-year average
    • NOTE: That would be the lowest production since 2016, USDA data shows
    • Says corn production is uncertain at the moment; yield could decrease and along with a declining surface area cause production to drop
  • Soft-wheat crop estimate raised to 33.9m tons, versus July estimate of 32.9m tons
  • Barley crop estimated at 11.4m tons
  • Rapeseed crop estimated at 4.3m tons
  • Sunflower crop estimated at 1.9m tons

French Corn Conditions Continue to Deteriorate, Agrimer Says

The share of France’s corn crop that’s in good or very good condition dropped to 63% as of Aug. 1, from 68% a week earlier, crops office FranceAgriMer said on its website.

  • NOTE: European corn fields, including in France, have been hit by hot, dry weather
  • NOTE: Heat will remain moderate in the north over next few days , but very high temperatures will still affect the south-east of the country, according to Meteo France
  • Farmers have now finished collecting soft wheat, winter barley and durum wheat
  • Here’s a breakdown of the French corn crop in good or very good condition:

Flour Millers in India Seek Abolition of Wheat Import Levy

Flour millers in India, the world’s second-biggest producer and consumer of wheat, asked the government to scrap a 40% import duty on wheat to soften local prices that have jumped 12%-16% in the past fortnight, according to Anjani Agarwal, president of the Rollers Flour Millers’ Federation of India.

  • Domestic wheat prices have risen by 300 rupees to 350 rupees per 100 kilograms in two weeks
  • Millers are buying wheat at 2,400-2,500 rupees per 100 kilograms from main wheat growing areas and at 2,750-2,850 rupees from other parts of the country
  • The millers also asked the government to restart open market sale of wheat from state stockpiles to users, including flour mills, to cool domestic prices

Ukraine Sees Sunflower Seed Output Dropping to 10-Year Low: IFX

Ukraine’s sunflower seed production may decrease by 42.6% to 9.4m tons in 2022-2023 marketing year due to Russia’s invasion of the country, Interfax reported, citing lobby group Ukroliyaprom’s head Stepan Kapshuk.

  • NOTE: Marketing year spans September-August
  • The group sees sunflower seed exports dropping to 1m tons in the period compared with 1.7m tons in the 2021-22 marketing year
  • Stockpiles will allow Ukraine to export 4.2m tons of sunflower oil in 2022-2023 marketing year even as output is seen at 4m tons

Ukraine’s 2022-23 Grain Exports Down 49% Y/Y So Far: Ministry

Ukraine’s grain exports have almost reached 1.9m tons in marketing year 2022-23 since July, down 49% from same period last season, according to Agriculture Ministry’s data.

  • Total includes:
    • 1.2m tons of corn, up 19% y/y
    • 444k tons of wheat, -65% y/y
    • 165k tons of barley, -87% y/y
  • NOTE: Marketing year for Ukraine’s grain exports start in July, ends in June
  • NOTE: Ukraine’s grain exports scaled up after war-torn nation earlier this week resumed shipments from port of Odesa, previously blocked by Russia’s invasion

Globe on Axis

Brazil fertilizer deliveries to stabilize or fall as cost woes weigh – Yara executive

Fertilizer deliveries to Brazilian farmers will stabilize or fall in 2022, an executive at Norway’s Yara YAR.OL, a major supplier, told Reuters on Thursday, citing a global rise in prices that is also causing domestic logistical bottlenecks.

Deliveries of crop nutrients have been growing steadily since at least 2019, according to data from Brazilian industry group Anda, having jumped 13% to 45.8 million tonnes at the end of 2021.

“In recent years, we have seen impressive market growth,” said Maicon Cossa, Brazil commercial vice-president at Yara, one of the country’s top three fertilizer companies. “This year we see the market tending to be stable or possibly even a little smaller than in 2021.”

Factors driving a potential reduction include higher prices after the threat of supply disruptions linked to the war in Ukraine, which sparked sanctions on Russia, a major fertilizer exporter, and caused a surge of Brazilian imports from countries like Canada.

Brazil imported 23.6 million tonnes of crop nutrients including potash and formulated products containing NPK through July, a 15.5% rise compared with the same period a year ago. By value, the import bill rose 175.3% to $16.1 billion, according to government data.

Even amid a surge in imports, Brazilian deliveries of fertilizers in May dropped 4.7% to 3.2 million tonnes, Anda said.

“On the one hand, the specter of (fertilizer) shortages caused by the war has disappeared,” Cossa said. But getting products in and shipping to the farm gate is going to be a challenge, he added.

Cossa said Brazilian farmers delayed fertilizer orders this year, affecting port unloading operations on the eve of Brazil’s planting season. A fall in fertilizer applications is a possibility, he said.

Brazil relies on imports for about 85% of its fertilizer needs.

In July, Yara temporarily halted a blending unit in southern Brazil, blaming supply disruptions related to the Ukraine war. To avoid Russian suppliers amid sanctions, the Brazilian arm of Yara sought to import more from its own sites in Europe, and from Morocco, Israel and North America, Cossa said.

World Food Prices Drop for Fourth Month as Grain Gets Cheaper

  • Price drop may offer limited relief amid cost-of-living crisis
  • Ukraine restarted some grain shipments after deal with Russia

Global food prices dropped for a fourth month after hitting a record on the war in Ukraine, as concerns over supplies of grains and vegetable oils eased.

A United Nations index of world food costs plunged more than 8.6% in July. The index fell to the lowest since January, before Russia’s blockade of ports in Ukraine — a major food exporter — pushed up food costs. Still, prices remain elevated, and people on low incomes are feeling the pinch as a cost-of-living crisis deepens.

Wheat and corn prices eased last month after Moscow and Kyiv reached a deal to reopen Ukraine’s ports and the first ship sailed from Odesa. But two weeks after the deal, a myriad of challenges are left to solve before exports can be ramped up. Three more grain ships are expected to leave the country’s ports, the Ukrainian Infrastructure Minister Oleksandr Kubrakov said on Friday.

“Increased seasonal availabilities in Argentina and Brazil, where maize harvests progressed ahead of their pace last year, also helped to ease the pressure on prices,” the FAO said in a statement.

The UN index tracks export prices for raw goods and excludes retail mark-ups, so while it’s a more encouraging sign for consumers, they’re still facing high prices. In poorer countries, tens of millions of people face hunger, with Africa’s Sahel region experiencing the worst food-security crisis in a decade.

Food giant Nestle SA pushed another round of price increases on consumers during the second quarter as its own costs increased. Supermarket Ocado group said that consumers are switching to cheaper products to save money.

Food prices had already climbed during the pandemic as logistics snarl-ups caused problems and demand outstripped supply as the economy recovered. But now the start of harvests in the Northern Hemisphere and concerns about a looming recession are weighing on commodities.

Nitrogen Prices Rebound in Brazil; Phosphate, Potash Weaken

Nitrogen prices in Brazil have moved up after weeks of decline and demand destruction as companies adjust offers to reflect the increase in global urea prices from Europe’s natural-gas constraints. Oversupply suggests lower phosphate and potash prices for the coming summer season.

Urea Prices Jump on Tight Ammonia Supply

Nitrogen prices in Brazil rebounded this week amid ammonia supply constraints that have been affecting urea prices globally. Urea offers were up $100 a metric ton (mt), but demand for the corn winter planting season was described as slow, indicating growers may postpone orders while the market remains volatile. Potash and phosphate prices appear to be falling further amid high inventory levels, with both indicating a $50/mt decrease. The summer planting season — the main period of phosphate demand — is getting closer, with only a few sales opportunities left to be done.

US Barge Shipments of Grain Rose 30% Last Week: USDA

Shipments along the Mississippi, Illinois, Ohio and Arkansas rivers increased in the week ending July 30 from the previous week, according to the USDA’s weekly grain transportation report.

  • Barge shipments of corn rose 20% from the previous week
  • Soybean shipments up 43% w/w

US Grain Movement by Rail Fell 3% Week Ended July 27: USDA

Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

Latest News & Market Commentary

Explore Special Offers & White Papers from Archer Financial Services

Get Started

Contact Us Today