Global Ag News for July 6.23

TOP HEADLINES

Malaysia Rolls Out Palm-Based Pellets to Lower Animal Feed Costs

Malaysia’s commercialization of palm-based beef cattle feed will reduce reliance on imports of animal feed ingredients such as corn and soy meal, according to Deputy Prime Minister Fadillah Yusof.

• Imports of these inputs for animal feed will be replaced with palm-based products such as empty fruit bunches and palm kernel expeller, Fadillah, who is also plantation and commodities minister, says in speech text delivered at Malaysian Palm Oil Board event on Thursday
• These palm-based products will be used to produce food pellets for livestock such as cattle, goats and chicken
• Malaysia to focus efforts in replanting palm trees with high-yielding seeds in order to increase crude palm oil output without further landbank expansion
• MPOB on Thursday also launched other technologies for commercialization including:
  • High-resolution DNA fingerprinting platform to ensure palms with desired genetic lineage are used commercial plantations
  • Palm-based mozzarella cheese
  • Fertilizers formulated to help palm trees speed up nutrient absorption

FUTURES & WEATHER

Wheat prices overnight are down 14 in SRW, down 4 in HRW, down 2 1/2 in HRS; Corn is up 1/2; Soybeans down 1; Soymeal up $0.80; Soyoil down 0.69.

For the week and month to date wheat prices are up 9 1/4 in SRW, up 42 1/4 in HRW, up 38 in HRS; Corn is down 3/4; Soybeans up 10 3/4; Soymeal down $3.30; Soyoil up 1.74.

Year-To-Date nearby futures are down 17.3% in SRW, down 4.4% in HRW, down 11.1% in HRS; Corn is down 17.9%; Soybeans up 1.3%; Soymeal down 12.7%; Soyoil up 7.5%.

Chinese Ag futures (SEP 23) Soybeans down 50 yuan; Soymeal down 9; Soyoil down 2; Palm oil up 4; Corn up 18 — Malaysian Palm is up 41.

Malaysian palm oil prices overnight were up 41 ringgit (+1.06%) at 3903.

There were changes in registrations (-285 SRW Wheat, 34 Oats, -21 Soyoil). Registration total: 2,059 SRW Wheat contracts; 436 Oats; 121 Corn; 0 Soybeans; 906 Soyoil; 0 Soymeal; 97 HRW Wheat.

Preliminary changes in futures Open Interest as of July 5 were: SRW Wheat down 873 contracts, HRW Wheat up 2,324, Corn up 13,759, Soybeans up 4,126, Soymeal down 98, Soyoil up 3,956.

Northern Plains: A front brought scattered showers to the Northern Plains early this week. Some additional showers may develop at times for the rest of the week but largely be spotty. Fronts moving through next week may bring more widespread precipitation, though that isn’t certain yet. Cooler temperatures will be in the region and help to reduce stress on developing crops. Overall, conditions are mostly favorable.

Central/Southern Plains: A front has been active across the Southern Plains while another front dropped down from the north early this week. The fronts will continue to produce periods of showers and thunderstorms across the region for the next week. Another front will likely drop into the region sometime next week and may bring additional rainfall as well. Though the areas receiving rainfall are somewhat spotty, the frequency is very good for this time of year. Temperatures are also mild for most areas, though will be increasing across Texas next week. Conditions are mostly favorable for much of the region despite the continued drought, though rain may disrupt the wheat harvest.

Midwest: A front moved into northwestern areas of the Midwest the last couple of days and brought some areas of showers and thunderstorms, but coverage was disappointing in some areas that need it. The front will continue to sweep southeastward through Friday, though the southern end may stay active through the weekend with a disturbance moving along it. Additional fronts will drop out of Canada next week with potential for more showers while temperatures stay mild to cool. Rain is coming at enough of a frequency to maintain or boost soil moisture in many areas, though there are plenty that are also seeing disappointment and low soil moisture, creating mixed conditions for developing corn and soybeans. Those with wheat yet to harvest will have to dodge periods of showers.

Delta: A front has stalled in the Delta with periods of showers since the weekend, beneficial for crop growth. The front will remain in the area this week and be reinforced by another over the next few days, which should continue periods of showers and thunderstorms through next week.

The player sheet for 7/5 had funds: net buyers of 15,000 contracts of SRW wheat, buyers of 1,500 corn, buyers of 2,000 soybeans, sellers of 1,000 soymeal, and  buyers of 4,500 soyoil.

TENDERS

• CORN PURCHASE: South Korea’s Feed Leaders Committee purchased around 65,000 metric tons of animal feed corn in a private deal.
• WHEAT PURCHASE: An importer group in Thailand is believed to have purchased about 60,000 metric tons of animal feed wheat expected to be sourced from Romania or Bulgaria in a tender for up to 180,000 metric tons.
• WHEAT PURCHASE: Algeria’s state grains agency OAIC is believed to have purchased between 200,000 and 250,000 metric tons of durum wheat in an international tender.
• WHEAT, DURUM PURCHASE: Tunisia’s state grains agency is believed to have purchased about 100,000 tonnes of soft wheat and about 100,000 metric tons of durum wheat in international tenders.
• WHEAT PURCHASE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 115,717 metric tons of food-quality wheat from United States and Canada in a regular tender that closed on Thursday.
• WHEAT PURCHASE: The Taiwan Flour Millers’ Association purchased an estimated 56,000 metric tons of milling wheat to be sourced from the United States in an international tender on Thursday
• 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.
• CORN TENDER: South Korea’s Major Feedmill Group (MFG) has issued an international tender to purchase up to 70,000 metric tonnes of animal feed corn

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

TODAY

ETHANOL: US Weekly Production Survey Before EIA Report

Output and stockpile projections for the week ending June 30 are based on six analyst estimates compiled by Bloomberg.

• Production seen lower than last week at 1.049m b/d
• Stockpile avg est. 22.926m bbl vs 22.979m a week ago

Brazil has harvested 20% of second-crop corn, and production forecasts have been raised again

As of June 1, 20% of second-crop corn crops have been threshed in Brazil. Based on yield data, analysts again raised forecasts for the second-largest grain harvest.

According to the IMEA agency, in the main producer state of Mato Grosso, 33% of the planned 7.4 million hectares of corn have been harvested, which is slightly lower than last year’s pace, while this year’s yield is very high.

Against the background of favorable weather, the experts of the local agency AgRural increased the forecast of the second corn crop in Brazil in 2023 from 97.9 million tons to 102.9 million tons, compared to the May estimates, and the experts of StoneX – from 102.9 to 105.2 million tons .

StoneX raised its forecast for total corn production in Brazil in 2022/23 to 136 million tons (116 million tons in the 2021/22 season), while the USDA estimated it at 132 million tons in June.

Estimates of the Brazilian official agency Conab are somewhat more pessimistic. In the June report, its experts increased the forecast of the total production of corn in the country in 2022/23 MY by 0.2 million tons to 125.7 million tons, in particular, the first harvest – up to 27.1 million tons, and the second – up to 96.3 million tons .

Second-harvest Brazilian corn will hit the world market in July-August and will increase pressure on US corn prices.

At the same time, from January to May, Brazil already exported 8.2 million tons of corn, compared to 4 million tons for the same period in 2022. According to forecasts, in 2022/23 the country will supply 55 million tons of corn to world markets and will become the world leader in grain exports.

Brazil soy exports seen reaching 9.44 mln tns in July – Anec

BRAZIL SOY EXPORTS SEEN REACHING 9.44 MILLION TNS IN JULY VERSUS 7.00 MILLION TNS IN SAME MONTH A YEAR AGO- ANEC

BRAZIL CORN EXPORTS SEEN REACHING 6.34 MILLION TNS IN JULY VERSUS 5.63 MILLION TNS IN SAME MONTH A YEAR AGO- ANEC

BRAZIL SOYMEAL EXPORTS SEEN REACHING 2.25 MILLION TNS IN JULY VERSUS 2.07 MILLION TNS IN SAME MONTH A YEAR AGO- ANEC

Russia Wheat Crop Est. Raised 2.5m Tons on Good Weather: Agritel

Russia’s 2023 wheat harvest is now seen at 85.7m tons, up from an April estimate for 83.2m tons, according to a report from Agritel, the agriculture analytics arm of Argus.

• That would fall below last year’s record 103m-ton crop, but remains a “strong” amount
• Revision follows good spring weather in southern and central Russia, which are key winter-wheat regions
  • Meanwhile, spring-wheat production is curbed by dryness in Siberia and the Urals
• The quality of the wheat harvest could be lower this year, with more 11.5% protein grade wheat and less 13.5% grade, due to lower agricultural investment and some weather challenges

Palm Oil Output to Rise This Year on Mild El Niño Impact: MPOB

El Niño is unlikely to have a major impact on Malaysia’s palm oil production this year, according to Malaysian Palm Oil Board Chairman Mohamad Helmy Othman Basha.

• Output in the world’s second-biggest grower will continue its upward trajectory in coming months and full year’s production may be slightly higher than in 2022, as impact from the weather event is unlikely to play out as initially expected, he said at an industry event on Thursday
  • Even so, big jump in output like the one seen in May is unlikely to repeat
• Palm oil may trade in 3,800 ringgit-4,000 ringgit range in near term, and current prices are a “good balance” between producers and consumers, Mohamad Helmy said, adding that any further gains could erode consumer demand
  • NOTE: Palm oil rallied to a three-month high this week, driven by a jump in soybean oil prices after the US government slashed the area planted to soybeans this year
• Exports may recover in second half of 2023, helped by an increase in shipments to India as well as China, Africa and Middle East: Mohamad Helmy

China says it will buy 28,750 metric tons of frozen pork for state reserves – Reuters

China said it would release 28,750 tons of frozen pork, followed by a bid to buy the same amount on Wednesday, according to two notices issued by the state-owned company Huashang Reserve Commodity Management Center.

The company did not immediately respond to a request for comment.

CURRENT CPO PRICE IS FAIR FOR PRODUCERS, CUSTOMERS — MPOB

The current price for crude palm oil (CPO) is a good balance for both producers and customers, the Malaysian Palm Oil Board (MPOB) chairman Mohamad Helmy Othman Basha said.

He said that the current price, between RM3,800 and nearly RM4,000 per tonne, would satisfy both global and local customers.

“The price should not rise too high as it would render supermarket products unaffordable and create issues.

“If the price increases, both local and overseas customers will start looking for alternatives,” he told reporters after the launch of Transfer of Technology (TOT) MPOB 2023 event at MPOB headquarters here today.

French 2023 soft wheat yield seen 5% above 10-year average

This year’s French soft wheat harvest is expected to show a yield 5% above the 10-year average, helped by good sowing conditions and regular rains in early spring, crop institute Arvalis and grain industry group Intercereales said on Thursday.

The 2023 soft wheat yield would reach 7.5 metric tons per hectare (t/ha), up 4.5% from 7.2 t/ha last year, they said in a joint statement.

Arvalis and Intercereales did not give a production forecast but their projected yield multiplied by the farm ministry’s area estimate of 4.77 million hectares would give a soft wheat crop of about 35.8 million tons.

The projected protein content – a key quality requirement – in the French soft wheat crop would reach 11.4%, in line with last year and the 10-year average.

“Even though we have experienced another unique climatic year with alternating periods of drought and excess water, the soft wheat harvest forecasts are reassuring for the 2023 campaign,” Intercereales President Jean-François Loiseau said in the statement.

The soft wheat harvest has just started in France. Farm office FranceAgriMer last week said 1% of the crop had been cut by June 26.

US, Canada Fertilizer Prices Fall as Fill Programs Continue

Fertilizer prices in the inland US and western Canada are being squeezed 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.

July Reset Pushes Nitrogen, Phosphates Down

US fertilizers fell in early July as more summer prices emerged, with significant declines in the western US for ammonia, calcium ammonium nitrate (CAN) and phosphates. Ammonia dropped to $415 a short ton (st) in the Pacific Northwest, a full $280 below the last prompt spring business, while CAN prices in California fell to $350-$360/st vs. the prior $415-$450. Monoammonium phosphate (MAP) plunged more than 21% in the western US, with phosphoric acid and ammonium polyphosphate prices also resetting at sharply lower levels for July. Western Canada saw significant declines for ammonia, urea ammonium nitrate (UAN) and ammonium sulfate, with MAP and urea also under pressure.

Brazil Fertilizer Prices Climb on Demand, Supply Pressure

Several weeks after Brazil urea prices strengthened in the wake of India’s latest tender, ammonium sulfate, phosphate and potash prices also gained amid increased demand and higher grain prices. New orders are still needed to support the firming markets, but a pushback is possible ahead of the next planting season.

Major Fertilizers Strengthen Again in Brazil

Brazil urea prices increased to $335-$350 a metric ton (mt) cost-and-freight, up $20 vs. last week, with new but unconfirmed offers reported at the $360 level. Urea is up slightly more than 20% since the pricing rally started three weeks ago. Ammonium sulfate prices were also higher, to $165-$170/mt vs. the prior week’s $155-$165, with reports of most sellers pulling offers while others moved asking prices up to $185-$190/mt for new business. MAP prices in Brazil edged up to $440-$455/mt from last week’s high of $450, with reports of sellers pushing for $460 in the next round of business. Potash prices in Brazil jumped to $330-$340/mt vs. last week’s $310-$330 range.

 

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