Global Ag News for July 7.23

TOP HEADLINES

Biodiesel production in the world will grow by 8% this year – forecast

Global biodiesel production in 2023 may increase to 56.2 million tons, up 8% or 4 million tons from last year. This forecast was published by experts of the Hamburg-based analytical agency OilWorld (Germany). According to the experts, the main increase will be in the United States, where the volume of eco-fuel production will reach a record 12.5 million tons (+2.3 million tons by 2022).

In addition, experts explain that an increase in production is also expected in Indonesia, as a new B35 blending mandate (35% palm oil instead of the previous 30%) came into effect this year.

According to preliminary estimates, global consumption of palm oil in biodiesel production in 2023 will increase by 1.6 million tons to 20.3 million tons, mainly due to Indonesia. A similar situation is expected for soybean oil, which may increase by 0.6 million tons to 12.8 million tons.

It is worth noting that biodiesel production from palm oil is actively developing in Southeast Asia, soybean oil in North and South America, and rapeseed oil in the European Union. Sunflower oil is practically not used for these purposes.

FUTURES & WEATHER

Wheat prices overnight are down 9 1/4 in SRW, down 16 in HRW, down 11 1/2 in HRS; Corn is down 4; Soybeans down 3 3/4; Soymeal down $3.00; Soyoil up 0.07.

For the week and month to date wheat prices are down 2 1/4 in SRW, up 27 3/4 in HRW, up 29 1/2 in HRS; Corn is up 7 3/4; Soybeans down 7 1/2; Soymeal down $8.50; Soyoil up 0.34.

Year-To-Date nearby futures are down 18.3% in SRW, down 6.4% in HRW, down 9.1% in HRS; Corn is down 17.0%; Soybeans down 0.3%; Soymeal down 13.1%; Soyoil up 3.4%.

Chinese Ag futures (SEP 23) Soybeans down 14 yuan; Soymeal down 10; Soyoil down 62; Palm oil down 82; Corn up 3 — Malaysian palm oil prices overnight were down 68 ringgit (-1.74%) at 3843.

There were changes in registrations (-417 SRW Wheat, -3 Soyoil, 50 HRW Wheat). Registration total: 1,642 SRW Wheat contracts; 436 Oats; 121 Corn; 0 Soybeans; 903 Soyoil; 0 Soymeal; 147 HRW Wheat.

Preliminary changes in futures Open Interest as of July 6 were: SRW Wheat up 1,109 contracts, HRW Wheat down 271, Corn up 8,577, Soybeans up 3,070, Soymeal down 1,029, Soyoil down 299.

Northern Plains: Some isolated showers may develop in the Northern Plains at times through the weekend, 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 stalled front will continue to produce periods of showers and thunderstorms across the Central and Southern Plains 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 is moving through the Midwest this week, but coverage of showers has been largely disappointing. The front will continue to sweep southeastward through Friday, though the southern end will 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 and will continue with periods of showers through next week, beneficial for crop growth.

Canadian Prairies: Several fronts will sweep through the Canadian Prairies through next week, but likely will only contain spotty showers. Soil moisture continues to fall, though temperatures are much milder, which will help to reduce stress for the drier areas.

The player sheet for 7/6 had funds: net sellers of 6,000 contracts of SRW wheat, buyers of 8,000 corn, sellers of 6,500 soybeans, sellers of 1,000 soymeal, and  sellers of 8,000 soyoil.

TENDERS

• WHEAT PURCHASE: Japan’s Ministry of Agriculture, Forestry and Fisheries bought a total of 115,717 metric tons of food-quality wheat from United States and Canada in a regular tender.
• 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.
• CORN TENDER UPDATE: South Korea’s Major Feedmill Group is believed to have rejected all offers and made no purchase in an international tender to buy up to 70,000 metric tons 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.
• 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.

TODAY

GRAIN EXPORT SURVEY: Corn, Soy, Wheat Sales Before USDA Report

Estimate ranges are based on a Bloomberg survey of four analysts; the USDA is scheduled to release its export sales report on Friday for week ending June 29.

• Corn est. range 200k – 650k tons, with avg of 375k
• Soybean est. range 200k – 700k tons, with avg of 458k

Argentine Corn, Wheat Crop Estimates July 6: Exchange

The Buenos Aires Grain Exchange releases weekly report on website.

• 2022-23 corn production est. maintained at 34m tons
• 2023-24 wheat planting area est. unchanged at 6.0m ha with 81.4% complete

DOE: US Ethanol Stocks Fall 3.1% to 22.26M Bbl

According to the US Department of Energy’s weekly petroleum report.

• Analysts were expecting 22.926 mln bbl
• Plant production at 1.06m b/d, compared to survey avg of 1.049m

Brazil to export 9.4m mt of soybeans in July

Brazil’s grain exporters’ association Anec projects soybean exports to reach 9.4 million mt in July, down 32.1% from June’s 13.9 million tons.

Last month such high figures were achieved due to increased sales of South American oilseeds in the last week of June, experts say.

Soybean shipments then averaged 660,522 tons per business day, down from the penultimate week of 717,068 tons, but 38.9% higher than the June 2022 average of 475,705 tons. Preliminary expectations are for a slightly lower figure for July.

Recall that Brazil could sell about 34 million tons of soybeans on foreign markets in the second half of 2023, an increase of 8 million tons over the same period last year.

In total, at the end of the current calendar year Brazil may export 96.3 million tons of soybeans, which will exceed the result of 2022 by 17-18 million tons.

Ukraine’s 2023/24 grain exports 497,000 T so far, ministry says

Ukraine’s grain exports for the new 2023/24 season stood at 497,000 metric tons as of July 7, Agriculture Ministry data showed on Friday.

The volume included 273,000 tons of corn, 177,000 tons of wheat and 46,000 tons of barley.

The ministry did not give an exact comparison for the same date a year ago but said that Ukraine had exported 318,000 tons of grain as of July 8, 2022.

Exports for the entire 2022/23 season were almost 49 million tons, exceeding the previous season’s 48.4 million tons.

Most of the volume was exported via deep Black Sea ports under a deal brokered by the United Nations and Turkey last July to tackle a global food crisis worsened by Russia’s invasion of Ukraine and a blockade of Ukrainian ports.

A major grain grower and exporter, Ukraine’s grain output dropped to about 53 million tons in clean weight in calendar 2022, down from a record 86 million tons in 2021.

The ministry has said the crop could fall to 46 million tons of grain in 2023.

Global Grain Stocks-to-Use in 2023-24 Seen Steady Y/y: FAO

Global grain stockpiles at the close of the 2023-24 season are now seen at 878m tons, up 5.1m tons from last month’s outlook, the UN’s Food and Agriculture Organization says in a report.

• Outlook comes amid a bigger wheat crop, which is offsetting slightly higher grain demand
• That would put the global stocks-to-use ratio at 30.6%, unchanged y/y and indicating “comfortable supply prospects”

Astarta Starts Grain, Rapeseed Harvesting in Ukraine

Astarta starts harvesting wheat and rapeseed in Poltava region, central Ukraine, according to a statement on its website.

• Astarta plans to reap winter wheat from 43,000 hectares
• NOTE: Ukraine sees its total harvest shrinking this year amid Russia’s full-scale invasion
• NOTE: Under an agreement with Moscow, brokered by the UN and Turkey, Ukraine may export grain by sea; the deal expires mid-July and Russia has threatened to pull out

China’s sow herd shrinks further in June – Shanghai Securities News

China’s sow herd declined 1.68% in June compared with the prior month, state-backed Shanghai Securities News said on Friday, as farmers reduced herds following months of losses.

The pace of the decline in the world’s top pork producer is bigger than in prior months, suggesting that farmers are accelerating culling of sows to cut their losses.

The sow herd declined by just 0.6% in May and 0.5% in April, according to farm ministry data.

Shanghai Securities News did not provide the source of its data.

China’s hog prices have been low for much of this year, pressured by excess supply and weak consumption.

Prices fell to 14 yuan ($1.93) per kilogramme last week, as record high temperatures eroded demand already affected by slowing economic growth.

The state planner said on Monday that it will start a second batch of pork reserve purchasing as the hog price has fallen into a warning zone.

Food Prices Continued Slide in June, Grain Output Expected to Climb in 2023/24

Food prices continued to slide in June, helping ease inflation pressures on consumers globally, while grain production is expected to climb further in 2023/24, the United Nations Food and Agriculture Organization said Friday.

The FAO’s food price index, which tracks global prices for a basket of staple foods, averaged 122.3 points in June down 1.4% from May’s reading and 23.4% from the March 2022, led by declines in dairy, sugar and grain prices.

In particular cereal prices averaged 126.6 points in June, down 2.1% from May, with the price of most grains falling during the month, the FAO said.

Corn prices, for example, fell for a fifth consecutive month, led by plentiful supplies coming from South America, while rain toward the end of June in key U.S. growing states helped ease concerns over crop conditions. Wheat prices fell 1.3% while rice dropped 1.2%, according to the FAO.

The FAO now expects grain crop in 2023/24 to reach 2.819 billion metric tons, a 1.1% increase on last year’s crop, which should help boost cereal stocks to a record 878 million tons.

Wheat production is set to gain the most from the boost, with output in 2023/24 expected to be 783.3 million tons, though this is down marginally by last year’s record of 18.4 million tons.

Elsewhere, vegetable oil prices in June slipped 2.4% from May, driven by falling prices for palm and sunflower oil. Dairy prices dropped 0.8%, meaning prices are now down 22.2% from a year ago. Meat prices however were largely unchanged from May as price rises in pork and poultry offset declines in beef.

Sugar prices fell 3.2%, the first monthly decline seen after four consecutive increases, the FAO said. Prices, however, are still nearly 30% higher than a year ago. “Concerns over the potential impact of the El Niño phenomenon on the 2023/24 sugarcane crops, along with the strengthening of the Brazilian real against the United States dollar, limited the declines in world sugar prices,” the FAO said.

US Miss. River Grain Shipments Rise, Barge Rates Increase: USDA

Barge shipments down the Mississippi river increased to 403k tons in the week ending July 1 from 400k tons the previous week, according to the USDA’s weekly grain transportation report.

• Barge shipments of corn rose 32% from the previous week
• Soybean shipments down 38% w/w
• Louis barge rates were $9.70 per short ton, an increase of $0.79 from the previous week

Drought Eases in US Corn and Soybean Regions: USDA

The following shows the percent of US agricultural production within an area that experienced drought for the week ending July 4, according to the USDA’s weekly drought report.

• Corn crops experiencing moderate to intense drought fell by 3 percentage points from the previous week to 67%
• This marks the first decline since May
• Soybean crops in drought also declined by 3 points, falling to 60%

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