Global Ag News For Dec 23.22

TOP HEADLINES

BRAZIL’S FARMERS KICK OFF SOYBEAN HARVEST IN TOP GRAIN STATE

Farmers from Mato Grosso, Brazil’s top grain producing state, started harvesting the 2022/2023 soybean crop, farmer group Imea said on Thursday.

The work is still in its early stages, with less than 1% of the state’s total planting area already harvested, said the group.

FUTURES & WEATHER

Wheat prices overnight are up 7 in SRW, up 5 3/4 in HRW, up 2 1/2 in HRS; Corn is up 3 1/4; Soybeans up 5; Soymeal up $0.07; Soyoil up 0.09.

For the week so far wheat prices are up 14 3/4 in SRW, up 26 1/2 in HRW, up 14 3/4 in HRS; Corn is up 9 3/4; Soybeans down 6 1/4; Soymeal down $1.04; Soyoil up 1.74.

For the month to date wheat prices are down 26 1/4 in SRW, down 28 in HRW, down 18 1/4 in HRS; Corn is down 3 1/4; Soybeans up 1 1/2; Soymeal up $33.00; Soyoil down 6.18.

Year-To-Date nearby futures are down 0% in SRW, up 9% in HRW, down -6% in HRS; Corn is up 12%; Soybeans up 11%; Soymeal up 10%; Soyoil up 17%.

Chinese Ag futures (MAR 23) Soybeans down 33 yuan; Soymeal up 3; Soyoil down 136; Palm oil down 178; Corn down 1 — Malaysian palm oil prices overnight were down 68 ringgit (-1.74%) at 3830.

There were changes in registrations (-1 Soymeal). Registration total: 2,788 SRW Wheat contracts; 0 Oats; 154 Corn; 91 Soybeans; 774 Soyoil; 290 Soymeal; 410 HRW Wheat.

Preliminary changes in futures Open Interest as of December 22 were: SRW Wheat up 3,583 contracts, HRW Wheat up 260, Corn down 1,840, Soybeans down 6,292, Soymeal down 2,228, Soyoil down 3,100.

Brazil Grains & Oilseeds Forecast: Scattered showers will continue in central and northern Brazil for at least the next two weeks, as is typical for this time of year. Soybeans remain in mostly favorable condition, though dryness across the far south is a little concerning for both corn and soybeans that are in reproductive stages. A cold front will move into the south over the weekend with showers into next week. The front is expected to move north of Rio Grande do Sul, which could remain dry and see conditions worsen for corn and soybeans.

Argentina Grains & Oilseeds Forecast: A cold front will bring some brief showers to Argentina Friday and Saturday, but push north into Paraguay and Brazil on Sunday. The brief shot of showers will at least be widespread, which may improve conditions and planting progress somewhat for both corn and soybeans. The front also will leave the country with some cooler conditions next week, but it will still be dry and conditions will not improve significantly until showers are more consistent.

Northern Plains Forecast: Well below temperatures will continue in the Northern Plains through the weekend before moderating next week. Winds will stay strong into Friday. Conditions continue to be harsh for livestock for another few days before improving next week.

Central/Southern Plains Forecast: The polar vortex is surging into the Plains Thursday and Friday with very cold temperatures moving through. The strong front also is producing some snowfall in the region, but it may not be enough to protect vulnerable wheat from winter kill. The cold blast does not last long, though, with temperatures moderating over the weekend and warming above normal next week.

Midwest Forecast: An arm of the polar vortex is moving through the Midwest over the next couple of days with a strong arctic front pushing through. A system forming along the front will bomb out over eastern sections, creating strong winds and blizzard conditions where snow is falling. Heavy lake-effect snows will follow through the weekend. The cold could potentially cause some winter kill for areas that do not get adequate snowfall. The blast of cold air will not last long, though, with temperatures moderating next week.

The player sheet for Dec. 22 had funds: net sellers of 2,500 contracts of SRW wheat, sellers of 1,500 corn, sellers of 5,500 soybeans, sellers of 2,000 soymeal, and  sellers of 1,500 soyoil.

TENDERS

• WHEAT PURCHASE: The Taiwan Flour Millers’ Association purchased an estimated 56,000 tonnes of milling wheat to be sourced from the United States in a tender on Thursday.
• WHEAT PURCHASE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 144,441 tonnes of food-quality wheat from the United States and Canada in a regular tender that closed on Thursday.
• BARLEY PURCHASE: Thailand’s association of feed mills (TFMA) is believed to have bought about 50,000 tonnes of animal feed barley expected to be sourced from Australia in a tender on Wednesday.
• WHEAT PURCHASE: Iraq has purchased 150,000 tonnes of wheat, its trade ministry said on Thursday. The purchase was comprised of 100,000 tonnes of Australian wheat and 50,000 tonnes of U.S. wheat, the ministry added.

PENDING TENDERS

• CORN TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued new international tenders to purchase around 25,000 tonnes of food-quality soybeans free of genetically modified organisms (GMOs)
• SUNFLOWER OIL TENDER: Turkey’s state grain board TMO has issued an international tender to purchase about 24,000 tonnes of crude sunflower oil
• RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp has issued an international tender to purchase an estimated 83,672 tonnes of rice to be sourced from the United States.
• RICE TENDERS: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of rice.

TODAY

US Export Sales of Soybeans, Corn and Wheat by Country (Table)

The following shows US export sales of soybeans, corn and wheat by biggest net buyers for week ending Dec. 15, according to data on the USDA’s website.

• China bought 551k tons of the 876k tons of soybeans sold in the week
• Mexico was the top buyer of corn and countries listed as ‘Unknown’ 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 Dec. 15, according to data on the USDA’s website.

• Pork sales of 74.8k tons were the highest since Dec. 2020
• Japan led in beef purchases

Russia may reduce its oil output by 500,000-700,000 barrels a day in early 2023 in response to the Group of Seven’s price cap on the nation’s crude exports, according to Deputy Prime Minister Alexander Novak.

Argentina Soy Estimate to Fall 200,000 HA If Rains Don’t Come

The total area in Argentina to be seeded with soybeans this 2022-23 season could fall by 200,000 hectares (494,000 acres) if rains don’t come to central areas in the next few days, the Buenos Aires Grain Exchange said in its weekly crop report.

• Lack of rains continue to hamper fieldwork
  • Planting is 61% complete, 18 percentage points less than normal for this stage of the season
• The dryness is also hindering the early growth stages of soybean plants in the ground
  • Soy area estimate kept for now at 16.7m ha
• Dryness is spurring harvest of wheat
  • Wheat collection is 78% complete

Argentina Soy Trades Reach 4.8m Tons After FX Measure: Bourse

Farmers have traded 4.83m metric tons of soybeans since the government temporarily devalued the peso for them for a second time from Nov. 28, according to the Buenos Aires Grain Exchange.

• The exchange data is through Dec. 21
• New soy sales account for 3.14m tons
• Farmers have completed transactions on delayed-price contracts for another 1.58m tons
• NOTE: The measure runs until the end of the year
• NOTE: The first temporary devaluation in September spurred 16.1m tons of sales worth $8.1b

EU Cuts 2022 Corn Crop Estimate, Keeps Wheat Exports Steady

The EU’s 2022 corn harvest is now seen at 52.1m tons, the European Commission said in a report.

• That’s down from a November estimate for 53.3m tons and 29% lower than last year
  • Import outlook steady at 23m tons
• Soft-wheat crop estimate cut to 126.4m tons, from 127m tons
  • Export outlook steady at 34m tons
• Barley crop estimate unchanged at 51.6m tons
• Total grains production seen at 266.5m tons, down from 268.4m tons

Indian Farmers Boost Planting of Winter-Sown Wheat and Oilseeds

Farmers in India, the world’s second-biggest wheat grower, planted wheat in 31.23 million hectares (77.2 million acres) of land as of Dec. 23, a rise of 3.2% from a year earlier, according to the farm ministry.

The area under winter-sown pulses increased 2.7% from a year ago to 14.85 million hectares, while the planting of oilseeds rose to about 10.15 million hectares from 9.33 million, the ministry said on Friday. Sowing operations are still continuing in some parts of the country.

Ukraine Says 65% of Winter Grain Began Dormancy in Good Shape

About 65% of winter-grain in Ukraine was in good or excellent condition as it entered winter dormancy, up from 56% last year, Ukraine’s agriculture ministry says on its website.

• 28% was in satisfactory condition and 7% was poorly developed
• NOTE: Ministry says plantings were delayed due to prolonged rains

Brazil’s Parana Winter-Corn Crop Seen Rising 16%: Deral

Winter-corn production in Brazil’s second largest producing state is estimated at 15.4m tons for current season, up from 13.3m tons in prior season, state’s rural economy agency Deral says in report on website.

• Soybean output seen at 21.4m tons, slightly lower than last month’s estimate of 21.5m tons
  • Production may rise from 12.3m tons in past season
  • 90% of crops rated good, 9% regular, 1% in bad conditions as of Dec. 20
• NOTE: Brazil Corn Exports Set to Surge Just as World Needs Them Most

China’s soybean imports to recover, a boon to Brazil farmers

China is expected to end the year with historically low soymeal carryover stocks, which should increase dependence on imported soybeans in 2023, Victor Martins, senior risk manager at HedgePoint Global Markets, said Thursday.

Brazilian soybeans, which are processed in China to make livestock feed, are currently more attractive than U.S. soybeans for February shipments, Martins said in an interview.

The news is positive for Brazilian farmers, some of whom may start harvesting their 2023 beans in as little as a week.

Ample new-crop supplies from Brazil, which is likely to raise its share of global soy exports to 51.5% in the 2021/2022 season, are priced in FOB port prices.

“The combination of higher supplies in Brazil, low soymeal stocks in China and relaxation of COVID-zero policies (in China) are expected to boost China’s soybean demand for 2023,” Martins said.

Weaker 2022 demand for soybeans from top buyer China could result in Brazilian sales volumes to that nation falling to the lowest level since 2017, according to government trade data.

But while volumes could end 2022 at a six-year low, high prices meant Brazilian sellers got paid handsomely for the product going to China, even as less of it got sold.

Brazil exported 52.4 million tonnes of soybeans to China through November, amassing $31 billion, according to Brazilian government data. That compares with $27.2 billion for the whole of 2018, when a record 68.5 million tonnes of Brazil’s soy was exported to China alone.

Reduced Brazilian soybean exports were the result of crop failures amid a drought in the south, which cut the exportable soy surplus and boosted domestic port premiums.

The drop affected Chinese processors, who faced negative crushing margins in early 2022 as soy prices climbed.

In the second half, low soymeal stocks coincided with a sudden rise in Chinese hog margins. This, Martins said, will spur more demand for soymeal in China in coming weeks.

Grain Shipments on Mississippi River Rose 3% Last Week: USDA

Barge shipments down the Mississippi river increased to 790k tons in the week ending Dec. 17 from 769k tons the previous week, according to the USDA’s weekly grain transportation report.

• Barge shipments of corn rose 21% from the previous week
• Soybean shipments down 9% w/w
• St. Louis barge rates were $33.63 per short ton, a decline of $0.35 from the previous week

LIVESTOCK: US Red Meat Production Fell 0.3% Y/y in November

Commercial beef and pork production fell to 4.79b pounds in Nov., according to the USDA’s monthly livestock slaughter report.

• Beef production up 1.9% y/y to 2.42b pounds
• Nov. cattle slaughter totaled 2.91m head, a 1.7% increase from a year ago
  • Avg live weight rose by 2 pounds from last yr to 1,384 pounds
• Pork production down 2.4% y/y to 2.35b pounds
• Hog slaughter fell 2% y/y to 10,916m head
  • Avg live weight was 290 pounds vs 291 pounds a year ago

Fertilizer Markets in Brazil Stay Active for Safrinha Supplies

The Brazil fertilizer market remained active, with 80-85% of purchases secured for Safrinha and buyers rushing to book phosphates. Some large distributors are reportedly out of phosphates amid persistent reports that OCP isn’t making the product available for sale in warehouses.

Brazil Phosphates Rally on Short Supply: Wednesday Whisper

Monoammonium phosphate (MAP) prices in Brazil jumped to $640-$655 a metric ton (mt) vs. last week’s $630-$640 amid reports of short supply. Low interest among urea buyers, along with high inventory and the absence of a new India tender, pushed urea down to $480-$490/mt vs. last week’s $500-$505. With sanctioned urea transacting at $470/mt and buyers bidding at $450/mt CFR, lower prices are expected. Brazil ammonium sulfate prices dropped to $250-$265/mt vs. last week’s $265, with the high for January and low for forward shipments. Potash prices widened to $480-$520/mt vs. last week’s $500-$520, with the high for small volumes or forward sales and the low for large volumes.

Prices or movements quoted in our Wednesday Whisper may not reflect the full range to be reported in the final Friday edition of Green Markets Brazil.