Global Ag News for June 15.23

TOP HEADLINES

Romania’s 2023 Wheat Crop Estimate Cut to 8.76M Tons: Agritel

Romania’s 2023 wheat crop set to drop to the second-lowest in seven years, farm adviser Agritel said in a report.

• Agritel cut estimate to 8.76m tons from 10.4m-ton estimate in April
• Cites a lack of rainfall in May; conditions particularly were below expectations in areas around Constanta, where yields are expected to fall 20-25% below average
• Spring corn could also be at risk due to late planting, but there is time for conditions to improve: Agritel
• Constanta port is facing long queues and stock levels “far higher” than usual
• Stocks carried over from 2022 are set to be high

FUTURES & WEATHER

Wheat prices overnight are up 6 3/4 in SRW, up 3 1/2 in HRW, up 2 in HRS; Corn is up 8 1/4; Soybeans up 16 3/4; Soymeal up $4.60; Soyoil up 0.48.

For the week so far wheat prices are up 6 1/4 in SRW, down 8 1/4 in HRW, down 1 1/4 in HRS; Corn is up 28; Soybeans up 53 3/4; Soymeal up $13.20; Soyoil up 2.26.

For the month to date wheat prices are up 42 3/4 in SRW, up 1/2 in HRW, up 31 1/4 in HRS; Corn is up 35 3/4; Soybeans up 110 1/4; Soymeal up $14.20; Soyoil up 8.04.

Year-To-Date nearby futures are down 19.5% in SRW, down 11.1% in HRW, down 13.6% in HRS; Corn is down 9.5%; Soybeans down 7.6%; Soymeal down 18.1%; Soyoil down 11.7%.

Chinese Ag futures (SEP 23) Soybeans up 8 yuan; Soymeal up 13; Soyoil up 20; Palm oil up 28; Corn up 17 –Malaysian palm oil prices overnight were up 68 ringgit (+1.97%) at 3520.

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 14 were: SRW Wheat down 2,001 contracts, HRW Wheat down 1,542, Corn down 24,357, Soybeans down 7,652, Soymeal down 4,723, Soyoil down 850.

Northern Plains: A system will come through with scattered showers through Friday or Saturday, but will miss many areas. The pattern remains active for the region for the following week, with another system moving through with potential for showers mid-late next week.

Central/Southern Plains: Areas of showers and thunderstorms continue across parts of the region for the next few days and a system will move through Friday through the weekend with more potential for showers. Another system will try to move into the region later next week, but showers could pop up at times between the systems. 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 spinning around the Great Lakes brought some areas of heavier rain on Tuesday, hitting some areas that were missed from the weekend. Another disturbance may follow behind it on Thursday with some showers and a system will move through over the the weekend with the next chance for widespread showers. The forecast coverage and intensity is uncertain with this system, as is the forecast for next week which is favoring hotter and drier weather for most areas.

Delta: Several disturbances will continue to create heavy showers in the region into next week, increasing soil moisture and reducing concern about growing dryness. Conditions are turning favorable for developing crops again.

Canadian Prairies: A system moving through Wednesday and Thursday should bring more widespread showers 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. Overall, conditions are either favorable or improving for most areas.

The player sheet for 6/14 had funds: net sellers of 4,000 contracts of SRW wheat, sellers of 1,000 corn, unchanged soybeans, sellers of 3,500 soymeal, and  buyers of 2,000 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.

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

CROP SURVEY: US May Soybean Crush Seen at 176.6M Bushels

Projections are based on a survey of seven analysts conducted by Bloomberg News on June 13-14.

• Soybean crush seen 3.2% higher vs May of last year, and an increase of 2% vs a month ago
• Oil stocks at the end of last month seen at 1.961b lbs vs 1.774b a year earlier

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

Estimate ranges are based on a Bloomberg survey of five analysts; the USDA is scheduled to release its export sales report on Thursday for week ending June 8.

• Corn est. range -100k – 600k tons, with avg of 275k
• Soybean est. range 300k – 900k tons, with avg of 575k

Indonesia to Set June 16-30 CPO Reference Price at $723.45/Ton

Govt to cut crude palm oil reference price for June 16-30 to $723.45 a ton from $811.68 a ton in the first two weeks of June, according to Musdhalifah Machmud, deputy for food and agriculture at the coordinating ministry for economic affairs in a text message.

• The reference price would lower export tax to $3/ton and additional levy to $65/ton for the period
• NOTE: The trade ministry will issue official decree on the reference price
• NOTE: Indonesia Sets June 1-15 CPO Reference Price at $811.68/Ton

Argentina Tugboat Strike Hurting Agriculture Traders: Port Group

A strike by tugboat pilots demanding better wages is affecting companies in Argentina’s crop-export hub on the Parana River, Guillermo Wade, head of port group CAPyM, said by phone from Rosario.

• Cofco, ADM and Bunge among companies affected: Wade
  • NOTE: Bulk carriers need tugboats to enter and leave ports
• “Measure is affecting all movements at all ports in which tugs are required for berthing and unberthing,” the Nabsa shipping agency said in an emailed statement

Argentine exchange cuts soy crop forecast again, this time by 5%

Argentina’s Rosario grains exchange again cut the estimate for its nearly-concluded soybean harvest, the country’s most important cash crop, with the latest forecast 5% below its last one, the exchange said on Wednesday.

The exchange estimated that the 2022/2023 soybean crop will likely yield 20.5 million metric tons, down from 21.5 million metric tons previously expected.

The South American country is the world’s largest exporter of processed soybeans, but the most recent season was hit hard by a historic drought, leading to regular estimate cuts.

During the previous soybean harvest, Argentina’s farmers produced more than double the volume currently seen.

The soybean harvest is coming to the end of an “extremely bad” season, with estimated output now seen coming in 58% less than what had been forecast at the start of the cycle, the exchange said in its monthly crop report.

The report also forecasts a total harvest area for the upcoming 2023/2024 wheat season at 5.6 million hectares, while production should reach 16.2 million metric tons of the key bread and pasta grain.

“The rains at the end of May saved the wheat planting,” the exchange said, adding that 2023/2024 wheat production might otherwise have ranked among the lowest in the past decade due to the drought.

The report also noted that key agriculture areas such as western Buenos Aires province, plus La Pampa and Cordoba provinces, remain dry despite the recent rainfall.

China’s state reserve to start first auction of imported soybeans in 2023

China will start auctioning 315,000 metric tons of imported soybeans from state reserves on June 20, an announcement by the National Grain Trade Center showed.

The soybeans were produced in 2020 and are distributed in warehouses in Guangxi, Fujian, Shandong, Henan and Jiangxi, according to the announcement.

India’s May palm oil imports drop to 27-month low, trade body says

• Palm oil imports at 439,173 T vs 510,094 T in April
• Soyoil imports at 318,887 T vs 262,455 T in April
• Sunflower oil imports at 295,206 T vs 249,122 T in April

India’s palm oil imports in May plunged 14% from a month ago to a 27-month low as buyers cancelled expensive cargoes of the edible oil and replaced them with cheaper soyoil and sunflower oil, a leading trade body said on Thursday.

The drop in purchases by the world’s biggest importer of vegetable oils could weigh on palm oil prices FCPOc3, which are already trading near their lowest level in 30 months.

India’s palm oil imports in May fell to 439,173 tonnes, the lowest since February 2021, the Mumbai-based Solvent Extractors’ Association of India (SEA) said in a statement.

The average monthly palm oil imports in the first six months of the 2022/23 marketing year that started on Nov. 1 were 818,203 tonnes, according to the SEA.

Palm oil was trading at a premium over soyoil and sunflower oil in April, when Indian buyers were making purchases for May shipments, said a New-Delhi based dealer with a global trade house.

“Buyers moved to cheaper alternatives by reducing palm oil purchases,” he said.

In April, buyers opted to cancel large amounts of palm oil purchases for May shipments for the first time in many years.

Usually palm oil trades at discount to rival oils. Price-sensitive Asian buyers typically rely on palm oil because of the low cost and quick shipping times.

Imports of soyoil in May rose around 22% from a month ago to 318,887 tonnes and those of sunflower oil were up 18.5% at 295,206 tonnes, it said.

Vegetable oil imports inched up nearly 1% to 1.06 million tonnes, it added.

India buys palm oil mainly from Indonesia, Malaysia – the top two producers – and Thailand, while it imports soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine.

Indonesia’s April Palm Oil Exports Falls 19.3% to 2.13M Tons

Indonesia’s palm oil exports in April fell to 2.13m tons vs 2.64m tons a month earlier, says the Indonesian Palm Oil Association (Gapki) in a statement.

• CPO output fell to 4.12m tons from 4.35m tons m/m
  • CPKO output fell to 404,000 tons
  • Total palm oil production 4.52m tons, also down m/m
  • Production declined due to Eid holidays and seasonal factor
• Domestic consumption at 1.9m tons vs 1.81m tons m/m
  • Palm oil use for food industry rose to 919,000 tons, 776,000 tons for biofuel
• Stockpiles jumped to 3.63m tons in April from 3.14m tons in March
• Exports to China down 48.7% m/m to 332,400 tons in April
  • To India fell 36.5% to 160,100 tons m/m
  • Jan-April exports at 10.63m tons, output at 17.79m tons

India Cuts Import Duties on Refined Soybean and Sunflower Oils

The government reduced base import taxes on refined soybean and sunflower oils to 12.5%, from 17.5%, the finance ministry said in a notification late Wednesday.

• The changes are effective from Thursday
• “The government wants to keep the price of edible oils under check,” said B.V. Mehta, executive director of the Solvent Extractors’ Association of India
  • But even with a lower duty difference between crude and refined oils, imports of refined oils won’t be commercially viable, he said
  • The tax changes will temporarily curb bullish sentiment in the market, he said

Rains Needed in France to Improve Spring-Grain Crops: AgriMer

“We’re still on a rather very high potential” for winter-grain crops, Benoit Pietrement, chair of the grains council at FranceAgriMer, said at a press briefing Thursday.

• Wheat and barley crops are in good shape at national level
• Given the recent dry weather, “the concern is rather for spring plantings”
• “There’s a need for water, whether it’s for corn, sunflower, or spring-barley. As soon as we get some rain, that will be positive”

Europe Grain Crop Est. Cut by 5.4M Tons on Dry Spell: Strategie

Dry weather that has held across northern Europe for a few weeks “is beginning to cause concern” for wheat and barley crops, analysis firm Strategie Grains said in a report.

• Yield prospects have fallen in the Baltics and Scandinavia
• The dryness, coupled with rains in southern Europe, also spurred corn-planting delays
• Outlook for 2023 EU grain harvest cut to 273.2m tons, compared with an estimate of 278.6m tons in May
• Still, demand for grain in animal feed could be “sluggish” in the coming season as consumption on pig farms declines further
• Here are the latest EU crop estimates for 2023-24:

Protests by Mexican farmers over grains prices shut down Sinaloa airport

Dozens of flights at an international airport in the northern Mexican state of Sinaloa were suspended Wednesday as protests by farmers demanding guaranteed prices for grains ramped up a standoff with the government.

Farmers in at least 20 states kicked off demonstrations on Tuesday, blocking traffic on highways and toll booths and occupying government offices, as well as the airport in Sinaloa state capital Culiacan, which has domestic flights and an international route to Phoenix, Arizona.

Operations at the airport were first suspended on Tuesday afternoon and remained paused on Wednesday, pending the arrival of officials to talk with farmers, according to the airport’s Twitter account.

Producers urge President Andres Manuel Lopez Obrador to guarantee prices for corn, wheat and sorghum, saying government intervention is vital to counter a steep drop in international prices.

Farmers sent him a public letter last week asking for the price of corn to be set at 7,000 pesos ($402.90) per ton, wheat at 8,000 pesos ($460.45) per ton and sorghum at 6,500 pesos ($374.12) per ton to help keep them afloat as production costs rise.

Saying they had no response, a group of farmers marched to Culiacan airport and blocked the doors in videos shared on social media.

In other videos, farmers entered government offices and tipped grain from bags onto the floor.

National guard troops and police were deployed to some of the protests, video showed.

Sinaloa Governor Ruben Rocha asked farmers to instead protest commodities trader Cargill CARG.UL and Mexican corn product makers Minsa and Gruma, implying they were responsible for lower prices.

“Let us go together to protest against those truly responsible….,” Rocha said on his Facebook page.

A spokesperson for Cargill in Mexico did not respond to a request for comment. Spokespeople for Gruma and Minsa could not immediately be reached.

A spokesperson for the Agriculture Ministry did not comment.

China seeks common ground while reserving differences in relations with Australia

China said it will focus on the long-term development of relations with Australia as it seeks common ground while reserving differences between the two, commerce ministry Spokesperson Shu Jueting told a press conference on Thursday.

China unveils plan to modernize farm facilities 2023-2030 -ministry

China launches plan to modernize agricultural facilities from 2023 to 2030, the Chinese Ministry of Agriculture and Rural Affairs said on its official website on Thursday.

The plan includes upgrading facilities for farming, animal husbandry, fishing and logistics, the ministry said.

US May Producer Prices for Agricultural Items

Following is a table detailing US producer prices for agricultural commodities and processed goods, from the Labor Department:

• The overall producer price index for final demand fell 0.3% m/m
• For below table, m/m%’s are calculated using seasonally-adjusted data where available and are indicated by (*), all other items and all y/y% use unadjusted data

Fertilizer Costs Remain High to Start Summer

While the price of fertilizer has come down from record-highs seen last year, they have not returned to pre-pandemic levels. The stubborn high prices are starting to be a factor farmers are considering for their balance sheets next year, says agronomists with the University of Illinois and Ohio State University in a note. “Some farmers begin purchasing in the late summer of the year prior to planting, with purchases continuing through June or July of the year of production,” they said, adding that prices may move lower by this Fall. In recent months, prices for the three major forms of nitrogen — anhydrous ammonia, urea, and liquid nitrogen — have all stayed steady, although are slightly down from where they started 2023, according to USDA data.

Strong Supply, Delayed Demand Pressure Brazil Fertilizers

China’s deal with Canpotex failed to firm potash prices in Brazil as competition remains high and demand slow in the region. Phosphate prices plunged amid strong imports, while urea slumped again as reports emerged of cheaper offers in India’s latest tender.

Inactive Market Pressures Brazil Fertilizers

Urea prices in Brazil once again drifted lower, falling to $275-$280 a metric ton (mt) cost-and-freight vs. last week’s $280-$290. Urea bids were heard around the $270/mt level, but were reportedly rejected for new business. Ammonium sulfate prices dropped to $145-$150/mt vs. the prior $160, with bids reported around the $140 level. Brazil monoammonium phosphate (MAP) prices slipped again, falling to $440-$450/mt vs. last week’s $440-$470 range. MAP prices at these levels haven’t been seen since January 2021. Brazil potash prices continued to retreat, declining to $310-$340/mt vs. last week’s $330-$350 amid slow demand and market inactivity.

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