Global Ag News For Aug 9.22
Wheat prices overnight are up 17 1/2 in SRW, up 16 1/2 in HRW, up 17 1/4 in HRS; Corn is up 13; Soybeans up 21; Soymeal up $0.60; Soyoil up 0.47.
For the week so far wheat prices are up 21 1/2 in SRW, up 15 1/2 in HRW, up 11 1/2 in HRS; Corn is up 10 1/4; Soybeans up 12 1/4; Soymeal unchanged; Soyoil up 0.82.
For the month to date wheat prices are down 10 1/2 in SRW, down 10 in HRW, down 6 1/2 in HRS; Corn is up 1/4; Soybeans down 47 1/2; Soymeal down $13.40; Soyoil down 0.87.
Year-To-Date nearby futures are up 3% in SRW, up 8% in HRW, down -9% in HRS; Corn is up 5%; Soybeans up 23%; Soymeal up 21%; Soyoil up 23%.
Chinese Ag futures (SEP 22) Soybeans up 37 yuan; Soymeal down 5; Soyoil up 188; Palm oil up 174; Corn up 24 — Malaysian palm oil prices overnight were up 91 ringgit (+2.24%) at 4162.
There were changes in registrations (-17 Soymeal). Registration total: 2,653 SRW Wheat contracts; 0 Oats; 0 Corn; 0 Soybeans; 149 Soyoil; 0 Soymeal; 1 HRW Wheat.
Preliminary changes in futures Open Interest as of August 8 were: SRW Wheat up 1,550 contracts, HRW Wheat down 3,448, Corn down 26,795, Soybeans down 2,417, Soymeal down 1,283, Soyoil up 9,117.
Northern Plains Forecast: Mostly dry Tuesday. Isolated showers Wednesday night-Friday. Temperatures near to above normal through Friday. Outlook: Isolated showers Saturday-Wednesday. Temperatures near to above normal Saturday-Wednesday.
Central/Southern Plains Forecast: Scattered showers south through Wednesday. Mostly dry Thursday-Friday. Temperatures near to below normal Tuesday, near normal Wednesday, near to above normal Thursday-Friday. Outlook: Isolated showers north Saturday-Monday. Mostly dry Tuesday-Wednesday. Temperatures near to above normal Saturday-Wednesday.
Western Midwest Forecast: Scattered showers south Tuesday. Mostly dry Wednesday-Thursday. Isolated showers Friday. Temperatures near to below normal Tuesday-Thursday, near to above normal Friday.
Eastern Midwest Forecast: Scattered showers Tuesday, south Wednesday. Isolated showers Thursday. Mostly dry Friday. Temperatures near to below normal Tuesday-Friday. Outlook: Isolated to scattered showers Saturday-Wednesday. Temperatures near to above normal west and near to below normal east Saturday-Sunday, near to above normal Monday-Wednesday.
The player sheet for Aug. 8 had funds: net buyers of 2,500 contracts of SRW wheat, sellers of 2,000 corn, buyers of 3,000 soybeans, sellers of 2,000 soymeal, and buyers of 500 soyoil.
- SOYBEAN SALE: The U.S. Department of Agriculture confirmed private sales of 132,000 tonnes of U.S. soybeans to China for delivery in the 2022/23 marketing year that begins on Sept. 1.
- CORN SALES: The USDA also confirmed private sales of 105,000 tonnes of U.S. new-crop corn to Italy, and another 120,000 tonnes to unknown destinations.
- BARLEY TENDER Jordan’s state grains buyer issued an international tender to purchase 120,000 tonnes of animal feed barley
- WHEAT & BARLEY TENDER: Importers in the Philippines are tendering to purchase a total of around 120,000 tonnes of wheat and about 120,000 tonnes of animal feed barley
USDA CROP PROGRESS: Corn Conditions 58% G/E, Soybeans 59%
- Corn 58% G/E vs 61% last week, and 64% a year ago
- Corn dented 6% vs 7% a year ago
- Corn dough 45% vs 26% last week, and 53% a year ago
- Corn silking 90% vs 80% last week, and 94% a year ago
- Soybeans 59% G/E vs 60% last week, and 60% a year ago
- Soybeans blooming 89% G/E vs 79% last week, and 90% a year ago
- Spring wheat 64% G/E vs 70% last week, and 11% a year ago
- Spring wheat harvest 9% G/E vs 35% a year ago
- Winter wheat harvest 86% vs 82% last week, and 94% a year ago
- Cotton 31% G/E vs 38% last week, and 65% a year ago
- Sorghum 29% G/E vs 28% last week, and 63% a year ago
US Inspected 556k Tons of Corn for Export, 868k of Soybean
In week ending Aug. 4, according to the USDA’s weekly inspections report.
- Wheat: 604k tons vs 308k the previous wk, 654k a yr ago
- Soybeans: 868k tons vs 595k the previous wk, 115k a yr ago
- Corn: 556k tons vs 905k the previous wk, 816k a yr ago
US Corn, Soybean, Wheat Inspections by Country: Aug. 4
Following is a summary of USDA inspections for week ending Aug. 4 of corn, soybeans and wheat for export, from the Grain Inspection, Packers and Stockyards Administration, known as GIPSA.
- Soybeans for China-bound shipments made up 250k tons of the 868k total inspected
- China was the top destination for corn inspections, Mexico led in wheat
U.S. Average Corn Yield at 167.2 BPA, Soybeans at 48.9 BPA, Tour Finds
The 2022 DTN Digital Yield Tour, powered by Gro Intelligence, finds a corn crop that’s poised for success in the east, but struggling with oppressive heat and sporadic rain patterns in the west. Springtime’s messy fingerprints are everywhere, especially national corn and soybean yield estimates.
Now in its fifth year, the DTN Digital Yield Tour takes an in-depth look at how this year’s corn and soybean crops are progressing using Gro’s real-time yield maps, which are generated with satellite imagery, rainfall data, temperature maps and other public and private data. Unlike previous years, the 2022 tour begins with national yield estimates and will examine crop prospects in 10 major growing states throughout the week.
On Monday, August 8, Gro’s corn yield model forecasts a 167.2 bushel-per-acre national average corn yield and a 48.9 bpa soybean yield. Unlike static estimates, Gro’s yield projections update daily on a county and state level, so the numbers at publication time may be slightly different than what you find on Gro’s displays, which you can access as an exclusive perk of the DTN Digital Yield Tour.
Ukraine Wheat Crop Estimate Cut to 18.5m Tons: UkrAgroConsult
That’s down from a prior outlook for 20m tons, Kyiv-based analyst UkrAgroConsult says in a report.
- Yields are lower than last year due to dry weather from May through July
- The wheat harvest is about two-thirds complete
- NOTE: That compares with about 32m tons of wheat harvested last year before the war erupted
First Crop Ship to Leave Ukraine Is Stuck Without a Buyer
- Ukrainian embassy says cargo rejected by its buyer in Lebanon
- Razoni was the first ship to transit new grain-export corridor
The first crop cargo to depart Ukraine’s newly opened grain ports is now floating in the Mediterranean Sea, searching for a new destination after losing its buyer.
Ukraine’s embassy in Beirut on Monday posted a picture of the vessel Razoni and said the cargo has been rejected by its final buyer in Lebanon, due to a five-month delay in its delivery. It was the first agriculture ship to leave the country’s major Black Sea ports since Russia’s invasion, loaded with about 26,500 tons of corn after a deal was recently brokered to restart exports.
The Razoni is currently anchored in the Mediterranean Sea, ship-tracking data show.
The tumult in its journey to find a customer highlights the challenges that lie ahead for Ukrainian grain shipments to return to normal as the war persists. The Razoni’s shipper is looking for a new buyer in Lebanon or elsewhere, according to the embassy. Its destination changed Sunday from Tripoli to “order,” ship-tracking data shows.
A spokeswoman at Lebanon’s economy ministry said the government isn’t involved with the shipment, as the cargo was bound for the private sector. There’s also no interference from the United Nations — which helped broker the grain-export agreement — on where vessels departing Ukraine head, as those are commercial decisions, a spokesman for its secretary-general said at a briefing Monday.
Meanwhile, a smaller corn vessel from Ukraine reached its final destination in Turkey on Monday, marking the first such ship to reach its terminus, Ukraine’s infrastructure ministry said. Two others that left in the same caravan should reach their ports in about a week. About 10 vessels have departed so far in total.
Andersons CEO Says US Farm Production ‘Really Good’ Despite Heat
US farmers will have “really good” production this fall despite scorching heat in some areas, according to one of the five largest US grain handlers.
While parts of the western grain belt have been hot and dry, the main part of the corn belt across the central Midwest is “in pretty good shape,” The Andersons Inc. Chief Executive Officer Pat Bowe said in an interview on Bloomberg Television. “We won’t have a record crop, but we’ll have a really good US production this fall.”
Grains, crop nutrients and ethanol have all rallied over the past year, helping fuel profits at the Maumee, Ohio-based company’s core businesses. Bowe has said the outlook for the rest of 2022 is strong even as still elevated prices have cooled.
“We have high farmer income, we have high fertilizer prices and with these kind of corn prices you still want to be giving pretty ample supply of nutrients to your soil,” Bowe said in an interview last week.
Russia, Ukraine agree to protect Ukraine grain shipping channel
Ships exporting Ukraine grain through the Black Sea will be protected by a 10 nautical mile buffer zone, according to long-awaited procedures agreed by Russia, Ukraine, Turkey and the United Nations on Monday and seen by Reuters.
The United Nations and Turkey brokered a deal last month after Russia’s Feb. 24 invasion of Ukraine halted grain exports, stoking a global food crisis that the United Nations says has pushed tens of millions more people into hunger.
Since then Russia, Ukraine, Turkey and the United Nations have been working to hammer out written procedures in the hope that it will assure shipping and insurance companies enough to resume grain and fertilizer shipments from the Ukrainian ports of Odesa, Chornomorsk and Yuzhny.
“We very much hope it will increase the traffic under this initiative,” said U.N. Secretary-General Antonio Guterres’ spokesman Stephane Dujarric after the procedures were agreed.
The initiative has been operating in a trial phase for the past two weeks. Ten ships – stuck in Ukraine since the war started – have departed with corn, soybeans and sunflower oil and meal. Two empty vessels have traveled to Ukraine to collect shipments.
The biggest ship yet, the Ocean Lion, is due to leave the port of Chornomorsk on Tuesday to deliver 64,720 metric tons of corn to South Korea, said the Joint Coordination Centre (JCC) on Monday. The JCC in Istanbul oversees the deal and is made up of Turkish, Russian, Ukrainian and U.N. officials.
Ukraine, along with Russia, is a major global supplier of wheat and other foodstuffs. However, the first ship to depart Ukraine under the U.N. deal last week is now looking for another port to unload after the initial Lebanese buyer refused delivery, citing a more than five-month delay. (Full Story)
The United Nations has stressed that the export deal is a commercial – not humanitarian – operation that will be driven by the market. All ships are required to be inspected to allay Russian concerns they could be smuggling weapons in to Ukraine.
Neil Roberts, head of marine and aviation at Lloyd’s Market Association – which represents the interests of all underwriting businesses in the Lloyd’s of London insurance market – told Reuters that the industry could now “play its part.”
“The successful exit of multiple vessels was beyond the imagining of most people only a few weeks ago and to have come this far is extraordinary,” said Roberts. “To actually achieve the goals of the U.N.’s initiative would be something for historians to reflect on.”
The shipping and insurance industry wanted assurances of a secure journey with no threat of sea mines or attacks to their ships and crews. These are typically covered in standard operating procedures, which is what was agreed on Monday.
“The parties will not undertake any attacks against merchant vessels or other civilian vessels and port facilities engaged in this initiative,” according to the ‘procedures for merchant vessels’ document.
One insurance industry source said the procedures “read as a reassuring set of rules. But will all sides stick to it?”.
Under the agreed procedures, the JCC will provide information on the planned movement of ships through the maritime humanitarian corridor, which will be shared with Russia, Ukraine and Turkey’s military to prevent incidents.
Then as the vessel moves through the maritime humanitarian corridor it will be protected by a 10 nautical mile circle buffer zone around it.
“No military vessel, aircraft or UAVs (drones) will close to within 10 nautical miles of a merchant vessel transiting the Maritime Humanitarian Corridor, excluding territorial seas of Ukraine,” according to the document.
Ukraine’s President Volodymyr Zelenskiy said there was “every chance” the pace of exports could be maintained.
“The key is how in the days to come our partners will prove able to prevent any attempts by Russia to disrupt exports and again further provoke a world food crisis,” Zelenskiy said in a video address on Monday.
Russia has blamed Ukraine for stalling shipments by mining its port waters and rejects accusations Moscow is responsible for fueling the food crisis.
Indonesia Sets CPO Export Tax at $52/Ton for Aug. 9-15: Ministry
Indonesia sets crude palm oil export tax at $52/ton for August 9-15, according to Asep Asmara, secretary for directorate general of foreign trade at the trade ministry.
- Trade ministry’s regulation detailing the reference price is in process to be released soon
Indonesia Lowers Taxable Palm Oil Export Price to $680/Ton
Indonesia lowers the minimum taxable export price from $750/ton. the finance ministry says in a new regulation published on its website.
- CPO shipments will get zero tax at a reference price of $680/ton or lower, according to the regulation
- The maximum tax rate is $288/ton for a reference price higher than $1,430/ton
- New regulation takes effect from Tuesday
Malaysia Palm, Palm-Oil Product Exports Rose 55% in 1H: Minister
Shipments of palm oil and palm products from Malaysia, the world’s second biggest producer, climbed 55% in the January-June period from a year ago despite the drop in crude palm oil output in the first half of 2022.
- Exports rose to 67.5 billion ringgit from 43.5 billion ringgit a year ago, the nation’s Plantation Industries and Commodities Minister Zuraida Kamaruddin said in a statement Tuesday
- Palm oil contributed 66% of the export earnings totaling 44.6 billion ringgit verus almost 29 billion ringgit in the same period last year
- In terms of volume, exports of palm oil and palm oil-based products rose almost 3% to 11.47 tons in the January-June period
- CPO output dropped 1.1% to 8.27 tons in the first half due to a fall in fresh fruit bunch, the minister said, citing data from the Malaysian Palm Oil Board
WHEAT/CEPEA: Amid expectations for grains exports from Ukraine, values fade
Wheat quotations dropped in the first week of August both in Brazil and abroad. The major reason for that were expectations for the resume of wheat exports from Ukraine, since the country shipped corn last week. Besides, better crops conditions in the United States pressed down international values too. This scenario led to wheat devaluations in Brazil.
In the Brazilian market, Cepea surveys show that, between July 29 and August 5, wheat prices dropped by 5.04% in the wholesale market (deals between processors) in Rio Grande do Sul ((RS), 2.11% in that of Santa Catarina (SC), 1.71% in São Paulo and 1.68% in Paraná (PR). In the over-the-counter market (values paid to farmers), quotations decreased by 1.49% in RS but rose by 0.81% in SC and by 0.46% in PR. In the same period, the US dollar dropped by a slight 0.2%, closing at BRL 5.168 on Friday, 5.
Domestic quotations were strongly influenced by the price drops abroad. As for sales, liquidity continues low, and mills are waiting for the new crop, while the farmers that still have wheat from last crop are not interested in selling the cereal at lower values.
INTERNATIONAL ESTIMATES – The Russian consultancy SovEcon has revised down the production estimates for Ukrainian wheat crops because of the war against Russia. The wheat output in Ukraine is now forecast at 19.9 million tons, a lot lower than the 32.2 million tons produced last year.
BRAZILIAN EXPORTS – According to data from Secex, in July/22, Brazil exported only 805.12 tons of wheat, however, in the last 12 months (August/21 – July/22) shipments totaled 3.16 million tons, a record for the period. Between January and July 2022, Brazil exported 2.6 million tons of wheat, also a record, considering the first seven months of previous years.
As for imports, in July, Brazil imported 499.49 thousand tons of wheat, 20.3% less than that in June and 6.6% down from that in July/21. Most of the wheat imported came from Argentina (+90%), at the average price of BRL 2.257.01/ton. In 12 months, Brazil imported 6.08 million tons of wheat.
Europe’s Drought Puts Paris Corn at Rare Premium to Wheat
- November corn in Paris reaches premium versus December wheat
- Another heat wave is due to blast parts of the EU this week
European corn futures have become more expensive than wheat, a rare occurrence highlighting the toll that drought is taking on the region’s fields.
Corn — primarily grown for livestock feed — typically trades at a discount to milling wheat, which is used to bake a host of staple foods. But that’s being upended as dryness and heat grip fields during the heart of the corn-growing season, curbing production estimates. Wheat is sown earlier and most fields have already been harvested.
“In France, concerns are growing about the current weather conditions,” said Paris-based adviser Agritel. “An unprecedented water deficit is having a major impact on corn crops and fodder production for farmers.”
November corn futures in Paris, which track supply after the next harvest, traded at 323 euros ($329.44) per ton. That puts them ahead of December milling-wheat futures, with the ratio reaching the highest since 2017.
By comparison, December corn futures in Chicago are trading at $6.0325 a bushel, almost $2 below wheat for the same month. The US is the world’s top corn producer.
The outlook for Ukrainian grain exports is also in focus. The European Union imports corn even in years of better production and often sources from the Black Sea country, whose exports have been constrained by Russia’s invasion. Some agriculture vessels recently began leaving Ukraine after months of blocked shipments, while the pace remains far below normal.
More scorching temperatures are set to hit northwest and central Europe this week, adding to the challenges for crop production. The heat will exacerbate dryness gripping France, one of Europe’s top corn growers, where drought is already comparable to events last seen in 2003 and 1976, according to Meteo France.
Record High Milk Price May Lift DDGS Demand
Strong milk prices may elevate demand for dried distillers grains with solubles (DDGS), which are used to supplement cattle and dairy-cow feed. DDGS may have the benefit of raising cows’ milking performance, according to research by the Japan International Research Center for Agricultural Sciences. Milk prices rose to a record $4.20 per gallon in May 2022, based on prices for US fresh whole fortified milk. The US DDGS averaged $241.74 this year through July, up 22.6% vs. $197.22 for the whole of 2021. DDGS is also used for cattle feed for beef as well as an alternative to corn for poultry feed.
DDGS is the solid matter remaining after corn starch is extracted for ethanol. About 17 pounds of DDGS are produced per bushel of corn.
Brazil corn-based ethanol producers have enough supplies -farmer-backed group
Brazilian corn-based ethanol producers in Mato Grosso state are not expected to have problems sourcing the raw material even if China starts buying corn from Brazil this year, farmer-backed research group Imea said on Monday.
Mato Grosso producers have placed corn orders in advance, said Cleiton Gauer, Imea’s superintendent.
While the farmer group does not anticipate supply issues after China and Brazil agreed on a trade protocol to export corn, corn demand from the Asian country may change Mato Grosso’s price outlook going forward.
“The impact on the price of corn will depend a lot on the volume that the Chinese are going to buy,” Gauer told Reuters during an event in Sao Paulo.
Mato Grosso’s second corn area grew by about 50% over the past five years, according to corn ethanol lobby Unem, attracting corn-based ethanol plants to the region.
Second corn, planted after soybeans are harvested in the same areas, represent 70-75% of national corn production in a given year.
Brazilian corn ethanol production in the 2022/23 harvest, which started in April, should reach 4.5 billion liters, an increase of 31% compared with the previous season, according to Unem.
Most of Brazil’s supplies of corn ethanol will come from Mato Grosso.
Brazil fertilizer import bonanza exposes logistical gaps
Brazil’s plan to boost internal fertilizer supplies cannot succeed without infrastructure investments, a government official told Reuters on Monday after a strong importing season exposed domestic logistical woes.
Brazil announced its plan in April to reduce reliance on imports after Russia’s invasion of Ukraine in February.
But after buying record volumes of fertilizer in the first seven months of the year, the state of certain Brazilian ports was almost a revelation to the government.
“We discovered that the problem was not in shipping schedules, nor was it related to port services or the customs authority,” said Luis Eduardo Rangel, the agriculture ministry’s programs director.
He said the problem is a lack of warehouses around the ports, which are typically owned by the private sector to store and distribute products.
There can be no plan to boost internal supplies without improving that type of infrastructure, he noted.
Rangel said Brazil’s “fertilizer diplomacy,” which involved high-level talks with countries like Russia and Iran in recent months, helped secure fertilizer imports for the country’s summer crops, though at higher prices.
At least one company said logistical bottlenecks are hampering domestic fertilizer deliveries, a sign that while fertilizer imports surged, farmers are worried about rising costs, which in itself also exacerbates logistical problems.
Anda, an association representing local fertilizer distributors, estimated $2 billion in demurrage rates, a charge applied to containers left at the port for longer than expected, this year, according to Rangel.
That bill would have to be fronted by local farmers, he said.
Anda did not have an immediate comment.
Around 85% of the fertilizers used in Brazil come from imports, and the government aims to reduce that to about 45% by 2050.
“So now we need warehouses,” Rangel said. “By 2050, when the plan is concluded, I am still going to import 50 million tonnes of fertilizers even if I produce 50 million tonnes.”
Australia’s BoM Says Negative Indian Ocean Dipole Event Underway
The IOD index has been having been very close to or below the threshold for a negative event for the past 9 weeks, Australia’s Bureau of Meteorology said in a statement.
- All climate model outlooks surveyed indicate the negative IOD is likely to persist to until late spring
- A negative IOD is associated with above-average spring rainfall for the Northern Territory, Queensland and much of southern Australia
- It also typically increases the chances of warmer days and nights for much of the tropical northern regions
- During negative IOD years, the chance of observing a tropical cyclone across the Australian region in November increases, compared to positive or neutral IOD years
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.