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Global Ag News for July 21.22

HEADLINES TODAY

Wheat prices overnight are down 4 1/4 in SRW, down 3 1/4 in HRW, down 6 1/4 in HRS; Corn is down 7 3/4; Soybeans down 16 1/2; Soymeal down $0.11; Soyoil down 1.44.

For the week so far wheat prices are up 48 1/4 in SRW, up 40 1/4 in HRW, up 22 3/4 in HRS; Corn is down 16; Soybeans down 14; Soymeal up $0.04; Soyoil down 1.20.

For the month to date wheat prices are down 68 3/4 in SRW, down 84 1/2 in HRW, down 72 in HRS; Corn is down 37 1/2; Soybeans down 142 1/4; Soymeal down $16.90; Soyoil down 8.30.

Year-To-Date nearby futures are up 7% in SRW, up 10% in HRW, down -5% in HRS; Corn is down -1%; Soybeans up 9%; Soymeal up 6%; Soyoil up 6%.

Chinese Ag futures (SEP 22) Soybeans up 5 yuan; Soymeal down 1; Soyoil down 54; Palm oil down 104; Corn unchanged — Malaysian palm oil prices overnight were down 232 ringgit (-5.90%) at 3703.

 

There were changes in registrations (-10 Soyoil, -78 HRW Wheat, ). Registration total: 2,653 SRW Wheat contracts; 0 Oats; 6 Corn; 6 Soybeans; 194 Soyoil; 0 Soymeal; 1 HRW Wheat.

 

Preliminary changes in futures Open Interest as of July 20 were: SRW Wheat up 1,390 contracts, HRW Wheat up 1,450, Corn up 1,814, Soybeans down 42, Soymeal down 992, Soyoil up 109.

 

Northern Plains Forecast: Outside of some stray showers, the next organized system moves through this weekend. That system will send temperatures below normal and another front moving through early next week will support cooler temperatures in the region along with another round of showers.

 

Central/Southern Plains Forecast: The next organized shower event comes this weekend across the north as a cold front settles into Nebraska and northern Kansas. Another front will move through the region next week with another round of showers, but this front could penetrate farther south, bringing cooler temperatures along with it.

 

Midwest Forecast: Mostly dry days to finish out the week. Scattered showers are expected with a system this weekend and, although the showers will likely miss some areas, they will be favorable and bring temperatures down a bit. Another cold front will sweep through the region in the middle of next week, providing more showers and cooler temperatures to reduce stress for areas that have been too dry.

 

Canadian Prairies Forecast:  A system will move through Thursday night into Saturday morning with a few showers, but a stronger system is forecast to move through Sunday into early next week with more showers and cooler temperatures.

 

The player sheet for 7/20 had funds: net buyers of 5,000 contracts of  SRW wheat, sellers of 4,000 corn, buyers of 12,000 soybeans, sellers of 500 soymeal, and  sellers of 6,000 soyoil.

 

 

TENDERS

  • WHEAT PURCHASE: Egypt’s state grain buyer bought 640,000 metric tons of wheat from various European origins following direct talks with trading houses
  • WHEAT PURCHASE: Pakistan has given approval for the purchase of some 300,000 tonnes of wheat in an international purchase tender, a government agency said in a statement.
  • WHEAT PURCHASE: Bangladesh’s state grains buyer has purchased about 50,000 tonnes of milling wheat in an international tender that closed on July 5, officials in Bangladesh and European traders said.
  • SOYBEAN SALE: The U.S. Department of Agriculture reported exporters sold 136,000 tonnes of U.S. soybeans to China for delivery in the 2022/2023 marketing year.
  • WHEAT TENDER: Jordan’s state grain buyer has issued an international tender to buy 120,000 tonnes of milling wheat which can be sourced from optional origins
  • NO PURCHASE IN BARLEY TENDER: Jordan’s state grain buyer is believed to have made no purchase in an international tender for 120,000 tonnes of animal feed barley
  • CORN TENDER: Leading South Korea’s feedmaker Nonghyup Feed Inc. (NOFI) has issued an international tender to purchase up to 138,000 tonnes of animal feed corn to be sourced from optional origins
  • CORN TENDER: South Korea’s Major Feedmill Group (MFG) has issued an international tender to purchase up to 70,000 tonnes of animal feed corn

US BASIS/CASH

  • Basis bids for corn and soy shipped by barge to the U.S. Gulf Coast were flat to lower on Wednesday, traders said.
    • FOB basis offers also weakened.
    • Other export demand is lackluster, brokers said.
    • Bids for CIF Gulf soybean barges loaded in July declined 10 cents to about 120 cents over August soybeans.
    • CIF soybean barges for August loadings traded at 105 cents over August soybeans.
    • FOB soybean offers for August Gulf shipments fell 15 cents to about 160 cents over August.
    • CIF corn barge bids for July loadings weakened 10 cents to 145 cents over September corn, traders said.
    • FOB basis offers for September shipments eased 3 cents to about 157 cents over September futures
  • Spot basis bids for soybeans were steady to sharply lower across the U.S. Midwest on Wednesday on muted demand at some processors and elevators, dealers said.
    • Spot corn basis bids were mostly steady to lower, while wheat bids were flat.
    • A large soy processor in Decatur, Illinois, cut its spot basis bid by 40 cents a bushel, while a terminal in Burns Harbor, Indiana, slashed its bid by 60 cents. A river elevator in Davenport, Iowa, dropped its spot bid by 15 cents.
  • Spot cash millfeed values were mixed on Wednesday as demand perked up for autumn, brokers said.
    • Values rose in the Central States truck market for August/September and for October/November/December, a broker said.
    • In the Buffalo truck market, spot values eased while October/November/December values firmed slightly.
  • Spot basis bids for hard red winter (HRW) wheat were mostly steady around the southern U.S. Plains on Wednesday as futures prices were flat to lower and farmer selling was minimal, dealers said.
    • Improving demand for U.S. wheat exports underpinned the market, dealers said.
    • Wheat traders are monitoring operations at mills across the southern Plains as a severe heat wave this week threatens a slowdown in production. Hot weather last month had prompted some mills to slow output to conserve power.
  • Spot basis bids for soybeans delivered to processors and elevators around the U.S. Midwest were flat to sharply lower on Wednesday, pressured by weak demand for near-term supplies, grain dealers said.
    • Spot corn basis bids were flat to lower at ethanol plants and steady at other processors, while bids at elevators around the region were mixed.
    • A second straight day of corn and soybean futures declines on the Chicago Board of Trade blunted farmer selling interest on Wednesday. But demand has also slowed, particularly for soybeans.
    • A large soy processor in Decatur, Illinois, dropped its spot basis bid by 40 cents a bushel, and a plant in Lafayette, Indiana, cut its spot basis by 55 cents.
    • At barge-loading river elevators that move supplies to Gulf Coast export terminals, basis bids fell by as much as 25 cents.
    • Spot corn basis bids at ethanol plants fell as much as 12 cents a bushel.
  • Spot basis offers for truck- and rail-delivered U.S. Midwest soymeal were steady to lower on Wednesday and down sharply at U.S. Gulf export terminals, dealers said.
    • Rail basis offers fell for a third day as the Chicago Board of Trade soymeal futures inversion increased, with gains in the spot August contract outpacing deferred months. Cash meal traders will be rolling basis offers to the September contract in the coming days, a dealer said.

EU Soft-Wheat Exports Rise 24% Y/y; Some Data Incomplete

EU soft-wheat exports during the season that began July 1 totaled 364k tons as of July 10, compared with 294k tons in a similar period a year earlier, the European Commission said Wednesday on its website.

  • Top destinations were Morocco (76k tons), Saudi Arabia (58k tons) and Tunisia (55k tons)
  • NOTE: Trade figures for Belgium, France and Italy may be incomplete, Commission says
    • The data, normally released weekly on Tuesdays, has been delayed by technical issues
    • Data through July 17 will be published Friday if possible
  • EU barley exports at 196k tons, against 378k tons a year earlier
  • EU corn imports at 348k tons, compared with 320k tons a year earlier
    • Of the total, 248k tons came from Ukraine

Turkey says talks with Ukraine, Russia, U.N. on grain corridor going well

Talks between Turkey, Russia, Ukraine and the United Nations on resuming Ukrainian grain exports through the Black Sea are going well so far, Turkish Foreign Minister Mevlut Cavusoglu said on Thursday, adding he was hopeful about reaching a deal.

Turkey hosted officials from Russia, Ukraine and the U.N. to discuss details of the U.N.-led plan last week. Ankara has since said a general agreement was reached, and that it wants to put this into writing this week.

Speaking to state broadcaster TRT Haber, Cavusoglu said he hoped to be able to announce “good news” on the talks in coming days, but added there were still minor issues being discussed between the parties.

 

The Central People’s Government of the People’s Republic of China – Summer grain output hits record high in China’s Henan – Public Technologies

The summer grain output in China’s major food-producing province Henan reached a historic high of over 38.13 billion kg this year, local authorities said on July 20.

The figure also represents an annual increase of 0.3 percent, said the Henan provincial government information office at a press briefing.

The total area growing summer crops in Henan reached nearly 85.26 million mu (about 5.68 million hectares) in 2022, according to the Henan Survey Organization National Bureau of Statistics Information Network.

Henan’s total growing area and output of summer crops continue to rank first in China, it added.

China’s total grain output consists of three parts – early rice, summer grain and autumn production. Summer grain is the first season of the annual grain production cycle.

 

High vegetation densities continue to boost U.S. spring wheat yield – Refinitiv Commodities Research

2022/23 U.S. WHEAT PRODUCTION: 47.3 [45.1–49.7] MILLION TONS, UP <1% FROM LAST UPDATE

2022/23 U.S. total wheat production is fractionally increased to 47.3 [45.1–49.7] million tons, thanks to high spring wheat condition scores/vegetation densities and stable winter wheat harvest progress. Our current median estimate puts national-level winter wheat production at 32.6 [31.2–34.4] million tons, down 6.1% compared to last season. Production of total spring wheat is now estimated at 14.7 [13.9–15.3] million tons (with durum and other spring wheat at 1.75 and 12.9 million tons, respectively), up 1.5% from last update, which is well above last season’s output of 10 million tons. In July’s WASDE (12 July), USDA pegged total U.S. wheat production at 48.47 million tons, slightly above our current projection.

USDA’s latest Crop Progress report (18 July) continues to indicate far better spring wheat conditions compared to the same time last year, with 71% of the crop in good or excellent (GEX) condition (vs. 11% last year). Vegetation densities from satellite imagery remain well above historical median levels throughout key producing regions (except in Minnesota), and are even close to record highs in South Dakota, Montana and Washington, conforming well with the positive trends in condition scores. On the other hand, winter wheat harvest is in full swing across all producing states with little concerns. Nationally winter wheat is 70% combined so far, largely in line with last year’s 71% and the 71% five-year average. Warm and dry conditions will likely continue throughout winter wheat areas of the Plains and the soft red winter (SRW) wheat belt, which should help facilitate harvest activities.

 

Lingering dryness and planting delays lower Argentina wheat production – Refinitiv Commodities Research

2022/23 ARGENTINA WHEAT PRODUCTION: 19.0 [17.6–20.4] MILLION TONS, DOWN 2% FROM LAST UPDATE

Continued dryness/soil moisture depletion throughout the eastern Pampas cut 2022/23 Argentina wheat production by 2% to 19.0 [17.6–20.4] million tons, amid worsening planting delays. In July’s WASDE (12 July) USDA placed Argentina wheat production at 19.5 million tons, down from its previous estimate of 20 million tons. Our current estimate puts planted area at 6.29 million hectares, down 6.7% from last season, slightly above 6.2 and 5.9 million hectares reported by Bolsa de Cereales in Buenos Aires and Bolsa de Comercio in Rosario, respectively. Plantings are nationally 88% complete according to the Ministry of Agriculture, and 90.7% complete according to Bolsa de Cereales in Buenos Aires, behind last year’s 95% and the five-year average of 91%. Latest EC/GFS short-term weather forecasts (GFS & EC) indicate a continuing trend of below normal precipitation throughout the Pampas at least until next week, warranting attention.

 

Brazil corn production slightly up as favorable late season weather continues – Refinitiv Commodities Research

2021/22 BRAZIL CORN PRODUCTION: 115.5 [110.8–119.3] MILLION TONS, UP <1% FROM LAST UPDATE

2021/22 Brazil total corn production is fractionally raised to 115.5 [110.8–119.3] million tons, thanks to favorable late season weather and rapid second corn harvest progress. Our current median estimate is 0.5 million ton below the USDA World Agricultural Outlook Board (WAOB)’s 116 million tons, which assumes total corn sowings at 21.8 million hectares and national level yield of 5.32 tons per hectare (tph) (vs. Refinitiv Ag Research’s 21.4 million hectares and 5.40 tph, respectively). Brazil’s agriculture state agency (CONAB) has lately pegged corn production and area at 115.7 million tons and 21.7 million hectares, respectively. As of 16 July, Brazil’s first corn is 97.8% harvested according to the latest CONAB crop progress report (18 July), in line with last year’s pace of 97.5%. The second corn is 49.2% combined so far nationally, well ahead of last year’s 30%, thanks to warm and dry weather conditions in early July. There appears to be little risk in wrapping up the season as favorable harvest conditions are expected to continue across most parts of the Central-West through the end of the month.

France’s Rouen Grain Exports Jump Fivefold in Week to July 20

Grain shipments from France’s Rouen port totaled 204,517 tons in the week to July 20, compared with 35,600 tons a week earlier, according to an emailed report.

South Africa Soybean-Planted Area Expanded in Past Year

South Africa’s soybean-planted area expanded by 12% in the year beginning March 2021 through February 2022, the U.S. Agriculture Department said late Monday.

The planted area increased to a record 930,000 hectares from 830,000 hectares the prior year, the USDA said in its South Africa annual grain and feed report. One hectare is 2.47 acres.

The soybean-planted area represents more than 20% of the area planted with summer rainfall field crops, up from 4% two decades ago. Soybean crops are expected to continue to grow in 2022-23 at the expense of corn area, it said.

“As soybean generally use fewer farming inputs, especially fertilizer, than corn, the high cost of inputs will further contribute to soybean expansion,” the USDA said.

South Africa soybean production is forecast to rise by 4.8% to 1.98 million metric tons from 1.89 million tons the prior year, the USDA said in an earlier report.

South Africa soybean consumption is expected to rise by 6.7% to 1.92 million tons, the USDA said.

Urea Ammonium Nitrate Slides in US Summer Reset as Supply Rises

Summer fill programs nudged US fertilizer prices lower again, with phosphate, ammonia and ammonium sulfate significantly below the spot market during the seasonal reset. Urea ammonium nitrate (UAN) reset early in the week. The ITC’s rejection of CF Industries’ UAN antidumping petition may hurt producer margins but help US farmers.

Most Fertilizer Flat-to-Soft

Most fertilizer prices in North America and Brazil were flat-to-down, with Tampa ammonia up due to idled capacity in Europe. Urea pricing in India collapsed $200 a metric ton on new tender results, and fill programs circulated in the US, including one for UAN that dropped the market $40-$50 a short ton. The US International Trade Commission also rejected CF Industries’ push for duties on UAN imports from Russia and Trinidad and Tobago.

Brazilian Fertilizer Prices Hint at Further Declines

Fertilizer prices in Brazil appear to be falling as demand significantly pulls back ahead of September and the upcoming planting season. Sluggish orders and higher supply suggest a $10-per-metric-ton drop in potash, with additional declines anticipated for nitrogen prices in the wake of lower-than-expected offers in the latest India urea tender.

Low Demand Pressures Brazil Fertilizer Prices

Fertilizer prices in Brazil appear to be falling amid unusually slow demand. Urea offers slipped to a wide $590-$630 per metric ton (mt) cost-and-freight (CFR), down $20 from last week at the low end of the range. Weak prices in the latest India urea tender are likely to pressure the Brazil market even more in the coming days. While demand is slowly rising, potash in Brazil was down $10/mt from last week as most buyers push for additional discounts and suppliers seek to release inventories. Phosphate prices were stable, with reports of plentiful supplies in distributor warehouses.

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.

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