Global Ag News for June 14.23

TOP HEADLINES

Russia Mulls Quitting Ukraine Safe-Corridor Crops Accord

Russia is considering leaving the deal that allows Ukraine to ship grain exports from Black Sea ports, President Vladimir Putin said at a televised meeting.

The Russian leader said that his country had agreed to the deal’s extension several times not in Ukraine’s interests, but for its allies in Africa and South America.

Russia endorsed the deal “to support developing countries — our friends, and in order to achieve the lifting of sanctions from our agricultural sector,” Putin said. “We have been deceived once again. We are now thinking about how we can get out of this so-called grain deal.”

Russia has threatened repeatedly to leave the agreement, which was brokered by the United Nations and Turkey last year and extended for two months in mid-May. Even with Russia’s involvement, traffic to Ukraine’s ports has been disrupted, with Ukraine accusing Russia of slow-walking checks and blocking ships destined for one of the three ports in the deal.

Russia and Ukraine are both major agricultural exporters, and mixed messages over the fate of the deal have contributed to volatility in grain prices. In May, total agricultural shipments through the safe-corridor hit the lowest since it was agreed, according to UkrAgroConsult.

FUTURES & WEATHER

Wheat prices overnight are down 6 in SRW, down 8 1/2 in HRW, down 6 in HRS; Corn is down 6 3/4; Soybeans down 7 1/2; Soymeal down $2.90; Soyoil down 0.41.

For the week so far wheat prices are unchanged in SRW, down 12 in HRW, down 9 in HRS; Corn is up 14; Soybeans up 27 3/4; Soymeal up $7.70; Soyoil up 1.18.

For the month to date wheat prices are up 36 in SRW, down 3 1/2 in HRW, up 23 3/4 in HRS; Corn is up 22 3/4; Soybeans up 85 1/2; Soymeal up $9.30; Soyoil up 6.99.

Year-To-Date nearby futures are down 20.4% in SRW, down 11.8% in HRW, down 14.4% in HRS; Corn is down 10.8%; Soybeans down 8.4%; Soymeal down 17.0%; Soyoil down 13.6%.

Chinese Ag futures (SEP 23) Soybeans up 4 yuan; Soymeal up 33; Soyoil up 112; Palm oil up 170; Corn up 21 — Malaysian palm oil prices overnight were up 36 ringgit (+1.05%) at 3452.

There were no changes in registrations. Registration total: 2,389 SRW Wheat contracts; 2 Oats; 0 Corn; 0 Soybeans; 1,088 Soyoil; 11 Soymeal; 97 HRW Wheat.

Preliminary changes in futures Open Interest as of June 13 were: SRW Wheat down 4,619 contracts, HRW Wheat up 2,194, Corn down 1,262, Soybeans down 4,495, Soymeal up 176, Soyoil up 2,619.

Northern Plains: A system will come through the Northern Plains with scattered showers Wednesday through Friday but will miss many areas. The pattern remains active for the region for the rest of June, though.

Central/Southern Plains: A couple of disturbances will continue showers across parts of the Central and Southern Plains for the next few days and a system will move through Friday through the weekend with more potential for showers. Recent and forecast precipitation will do its best to ease drought conditions further, but that may not translate to improved conditions in all places.

Midwest: A low-pressure system will spin around the Great Lakes with showers through Wednesday morning. Another disturbance may follow behind it on Thursday and a system will move through over the weekend with the next chance for widespread showers. The forecast coverage and intensity are uncertain with this system, as is the forecast for next week. Any drought reduction is likely to be sporadic in the region, though growth may not be overly widespread either.

Delta: Several disturbances will create heavy showers in the Delta this week, increasing soil moisture and reducing concern about growing dryness.

Alberta: A system moving through the Canadian Prairies should bring more widespread showers Wednesday and Thursday to western areas that had been drier over the last couple of weeks. Additional systems are expected this weekend and next week as well. Temperatures will be variable and less consistently hot over the next couple of weeks.

Argentina: Soil moisture is still suboptimal in Argentina, but the recent run of showers has been helping in some spots. Colder temperatures have settled in and will produce areas of frosts and freezes through much of the week, slowing germination and growth for wheat.

The player sheet for 6/13 had funds: net buyers of 2,000 contracts of SRW wheat, buyers of 1,000 corn, buyers of 12,000 soybeans, buyers of 1,000 soymeal, and  buyers of 5,500 soyoil.

TENDERS

• 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 a tender on Wednesday
• CORN, SOYMEAL TENDER: Iranian animal feed importer SLAL has issued international tenders to purchase up to 120,000 metric tons of animal feed corn and 120,000 metric tons of soymeal.
• WHEAT, BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries said that it will seek 60,000 metric tons of feed wheat and 20,000 metric tons of feed barley to be loaded by September 30 and arrive in Japan by November 30.
• VEGETABLE OILS TENDER UPDATE: The lowest offer presented at an Egyptian state purchasing tender for vegetable oils on Tuesday was $926 per tonne c&f for 6,000 metric tons of sunflower oil. The lowest offer presented for soyoil at the tender was $1,075 per tonne c&f for 30,000 metric tons.
• SOYMEAL TENDER UPDATE: Algerian state agency ONAB is believed to have made no purchase in a tender for up to 35,000 metric tons of soymeal which closed on June 8.

PENDING TENDERS

• RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 62,200 metric tons of rice.

TODAY

ETHANOL: US Weekly Production Survey Before EIA Report

Output and stockpile projections for the week ending June 9 are based on six analyst estimates compiled by Bloomberg.

• Production seen higher than last week at 1.043m b/d
  • Would be the highest since December
• Stockpile avg est. 23.052m bbl vs 22.948m a week ago
• The EIA in Washington is scheduled to release the report at 10:30am Wednesday

Brazil Corn Exports Seen Reaching 1.59 Million Tns In June Versus Up To 1.66 Million Tns Forecast In Previous Week – Anec

• BRAZIL SOY EXPORTS SEEN REACHING UP TO 14.76 MILLION TNS IN JUNE VERSUS 13.11 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC
• BRAZIL CORN EXPORTS SEEN REACHING 1.59 MILLION TNS IN JUNE VERSUS UP TO 1.66 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC
• BRAZIL SOYMEAL EXPORTS SEEN REACHING 2.45 MILLION TNS IN JUNE VERSUS 2.27 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC

Brazil 2022-23 Soybean Crop Seen at 155.7M Tons: Conab

Output est. raised from 154.8m tons, Brazil’s national supply co. says in its monthly report.

• Analysts in a Bloomberg survey were expecting 155.6m tons
• Yield seen higher at 3,537 kg/ha vs 3,532 kg/ha last month
• Area planted raised to 44.032m ha vs 43.834m ha last month
• Corn production est. raised to 125.7m tons vs 125.5m tons

Brazil Winter-Corn Crop Seen at Record, Jumping 12% y/y: Conab

Brazil’s winter-corn production, known as “safrinha” crop, is seen at 96.3m tons, a record high, rising 12% from the previous season, the state-owned agency Conab says in report.

• Estimate was slightly raised from 96.1m tons last month
• Planted area seen at 17.1m ha, increased by 0.8% comparing to May report
• In top growing state Mato Grosso, harvest has just started and crops look “excellent”
• Dry weather in May reduced yield potential in crops of Parana, Goias and Piaui states
• Total corn crop seen at 125.7m tons, little changed from 125.5 seen in May report
• Corn exports estimate unchanged at 48m tons
• Estimate for soy exports raised to 95.6m tons from 95.1m tons on higher production

EU Soft-Wheat Exports Rise 13% Y/y in Season Through June 11

The European Union’s soft-wheat exports in the season that began July 1 reached 30m tons as of June 11, compared with 26.5m tons in a similar period a year earlier, the European Commission said on its website.

• Leading destinations include Morocco (4.68m tons), Algeria (4.08m tons) and Nigeria (2.77m tons)
• EU barley exports were at 6.27m tons, compared with 6.88m tons
• Corn imports stand at 24.92m tons, against 15.61m tons

NOPA May U.S. soybean crush seen at 175.880 million bushels

The U.S. soybean processing pace likely slowed for a second straight month in May as some crushers idled facilities for seasonal maintenance, analysts said ahead of a monthly National Oilseed Processors Association (NOPA) report due on Thursday.

The monthly crush, however, was still expected to be the largest May crush on record.

NOPA members, which handle about 95% of all soybeans processed in the United States, were estimated to have crushed 175.880 million bushels last month, according to the average of estimates from 10 analysts.

The estimate implies a daily crush rate of 5.674 million bushels, down from 5.774 million bushels a day in April and the slowest daily rate since September, according to NOPA data.

If the estimate is realized, it would be up 1.5% from the 173.232 million bushels processed by NOPA members in April and up 2.8% from the May 2022 crush of 171.077 million bushels, which is the current record for the fifth month of the year.

Estimates for the May 2023 crush ranged from 172.850 million to 179.200 million bushels, with a median of 175.334 million bushels.

The monthly NOPA report is scheduled for release at 11 a.m. CDT (1600 GMT) on Thursday. NOPA issues crush data on the 15th of each month, or the next business day.

Soyoil supplies held by NOPA members as of May 31 were forecast at 1.942 billion pounds, based on estimates gathered from seven analysts.

Soyoil stocks at the end of April totaled 1.957 billion lbs, a 14-month high, while stocks at the end of May 2022 stood at 1.774 billion lbs.

Soyoil stocks estimates ranged from 1.888 billion to 2.050 billion pounds, with a median of 1.925 billion pounds.

Russian agricultural exports to grow by at least 10% in 2023 – RIA

Russia’s agricultural exports will grow by at least 10% this year, despite being barred from selling to “unfriendly countries”, Russia’s RIA state news agency reported early on Wednesday.

“The closure of trade relations with unfriendly countries did not stop agricultural exports, we increased supplies both in rouble and in physical terms,” RIA cited Deputy Prime Minister Viktoria Abramchenko as saying.

“Unfriendly countries” is how Moscow terms those governments that have imposed sanctions over the war in Ukraine.

Abramchenko said that in 2022 agricultural exports exceeded $41.5 billion and were 12% higher than a year earlier. When asked whether a growth of more than 10% is possible this year Abramchenko said “yes,” RIA reported.

Russia and Ukraine are two of the world’s top agricultural producers, and are major players in the markets for wheat, barley, maize, rapeseed, rapeseed oil, sunflower seed and sunflower oil. Russia is also dominant in the fertiliser market.

French Wheat Stocks Estimate Raised as Season Nears End: AgriMer

France’s soft-wheat stockpile at the close of the 2022-23 season is now seen at 2.89m tons, crops office FranceAgriMer said in a report on Wednesday.

• That compares with a May estimate of 2.72m tons and is 3.8% above last season
• Estimate for exports outside the EU trimmed to 10.2m tons, from 10.3m tons
• Outlook for total exports cut to 16.7m tons, from 16.8m tons
• NOTE: The 2023-24 season will start July 1

BARLEY

• Non-EU exports seen at 3.15m tons, versus 3.2m-ton estimate last month
• Total exports estimated at 6.29m tons, down from 6.37m tons
• Stockpiles estimate raised to 1.26m tons, from 1.12m tons

CORN

• Stockpile estimate slightly cut to 2.11m tons

EPA Delays Release of US Biofuel-Blending Quotas to June 21

Biden administration officials have until the end of June 21 to finalize biofuel-blending quotas under an agreement reached with ethanol advocacy group Growth Energy and filed with a Washington, DC-based US District Court.

• The delay could allow EPA to incorporate more data on biofuel production into the final rule
• Growth Energy expects “a robust final rule that strengthens the RFS and enhances the biofuels industry’s ability to decarbonize the transportation sector,” the group’s CEO, Emily Skor, said in an emailed statement
• The EPA previously had agreed to finalize quotas by June 14 under a settlement agreement with the group

Bunge-Viterra Deal Likely to Face Argentina Antitrust Scrutiny

• Combined company could end up with 40% of oilseeds processing
• Bunge CEO Greg Heckman dodged questions about concentration

Bunge Ltd.’s deal to buy Glencore-backed Viterra will create an agriculture giant that’s likely to face antitrust scrutiny in Argentina, the world’s largest exporter of soy products.

The combined company could end up with 40% of the oilseeds processing capacity in Argentina if a previously agreed deal to rescue bankrupt soy supplier Vicentin SAIC goes through, according to Bloomberg calculations using data from grain brokerage JJ Hinrichsen. That’s likely to spark regulatory scrutiny.

The St. Louis-based agribusiness agreed to buy Viterra for $8.2 billion in stock and cash, creating a trading giant capable of competing with the world’s agriculture elite: Minneapolis-based Cargill Inc. and Chicago’s Archer-Daniels-Midland Co. The deal is expected to take 18 months to close, with the company saying it will have to file for approval “in a number of jurisdictions.”

Argentina is the region with the most significant overlap between the two companies, Goldman Sachs Group Inc. said in a report last month. Bunge and Viterra each have 12% of the country’s oilseeds processing capacity. If the $1.3 billion restructuring deal to rescue Vicentin together with a local cooperative goes through, that would take their market share to 40%.

Still, Bunge’s Chief Executive Officer Greg Heckman declined to comment on any possible divestments the company may have to make to get the deal approved, only saying Bunge will update investors throughout the process.

“We want to sit down and engage in a very constructive, meaningful manner with the regulators,” Heckman said in an interview. “And frankly, the way the assets fit together is very complementary.”

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