Global Ag News for Mar 29.22

TODAY – Kansas Winter Wheat Conditions Rise to 32% Good/Excellent

Wheat prices overnight are down 13 3/4 in SRW, down 14 3/4 in HRW, down 15 3/4 in HRS; Corn is down 5 3/4; Soybeans up 3 3/4; Soymeal down $0.23; Soyoil up 0.91.

For the week so far wheat prices are down 59 in SRW, down 55 in HRW, down 40 1/2 in HRS; Corn is down 11 1/4; Soybeans down 42 1/4; Soymeal down $1.13; Soyoil down 1.39. For the month to date wheat prices are up 109 1/4 in SRW, up 102 3/4 in HRW, up 69 3/4 in HRS; Corn is up 52; Soybeans up 31 1/4; Soymeal up $30.30; Soyoil up 0.84.

Year-To-Date nearby futures are up 35% in SRW, up 32% in HRW, up 8% in HRS; Corn is up 25%; Soybeans up 26%; Soymeal up 16%; Soyoil up 30%.

Chinese Ag futures (MAY 22) Soybeans down 64 yuan; Soymeal down 93; Soyoil down 102; Palm oil down 54; Corn down 24 — Malaysian palm oil prices overnight were up 32 ringgit (+0.54%) at 6010.

There were changes in registrations (-66 Soybeans). Registration total: 2,185 SRW Wheat contracts; 1 Oats; 15 Corn; 132 Soybeans; 98 Soyoil; 0 Soymeal; 154 HRW Wheat.

Preliminary changes in futures Open Interest as of March 28 were: SRW Wheat up 141 contracts, HRW Wheat up 762, Corn down 10,369, Soybeans down 2,456, Soymeal up 2,437, Soyoil down 1,654.

Northern Plains Forecast: Scattered showers Tuesday. Isolated showers Wednesday. Mostly dry Thursday. Isolated showers Friday. Temperatures near to above normal Tuesday, near to below normal Wednesday-Friday. 6-to-10-day outlook: Isolated showers Saturday-Sunday. Mostly dry Monday-Wednesday. Temperatures near normal Saturday-Monday, above normal Tuesday-Wednesday.

Central/Southern Plains Forecast: Scattered showers Tuesday-Wednesday. Mostly dry Thursday. Isolated showers Friday. Temperatures above normal Tuesday, near to below normal Wednesday-Friday. 6-to-10-day outlook: Isolated showers Saturday-Wednesday. Temperatures near to below normal Saturday-Monday, near to above normal Tuesday-Wednesday.

Western Midwest Forecast: Scattered showers Tuesday-Wednesday. Isolated showers Thursday. Mostly dry Friday. Temperatures near to above normal Tuesday-Wednesday, below normal Thursday-Friday.

Eastern Midwest Forecast: Scattered showers Tuesday-Thursday. Isolated showers Friday. Temperatures below to well below normal Tuesday, above normal Wednesday, near normal Thursday, below normal Friday. 6-to-10-day outlook: Isolated showers Saturday-Wednesday. Temperatures near to below normal Saturday-Tuesday, near to above normal Wednesday.

Brazil Grains & Oilseeds Forecast: Rio Grande do Sul and Parana Forecast: Mostly dry Tuesday. Scattered showers Wednesday, north Thursday. Mostly dry Friday. Temperatures near normal Monday, near to above normal Tuesday, near to below normal Wednesday, below normal Thursday-Friday. Mato Grosso, MGDS and southern Goias Forecast: Isolated showers through Friday. Temperatures near to above normal through Friday.

Argentina Grains & Oilseeds Forecast: Cordoba, Santa Fe, Northern Buenos Aires Forecast: Scattered showers Tuesday. Mostly dry Wednesday-Friday. Temperatures near to below normal Tuesday, below to well below normal Wednesday-Friday. La Pampa, Southern Buenos Aires Forecast: Scattered showers Tuesday. Mostly dry Wednesday-Friday. Temperatures near to below normal Tuesday, below to well below normal Wednesday-Friday.

The player sheet for 3/28 had funds: net sellers of 17,500 contracts of  SRW wheat, sellers of 8,000 corn, sellers of 17,500 soybeans, sellers of 6,500 soymeal, and  sellers of 8,000 soyoil.

TENDERS

• SOYBEAN, CORN SALES: Exporters sold 132,000 tonnes of U.S. soybeans for delivery to China and separately sold 127,920 tonnes of U.S. corn to unknown buyers, the U.S. Department of Agriculture said.
• CORN PURCHASE: Turkish grain board TMO provisionally bought about 300,000 tonnes of corn in an international tender for imported supplies
• WHEAT TENDER: Algerian state grains agency OAIC issued an international tender to buy milling wheat
• WHEAT TENDER: The Taiwan Flour Millers’ Association issued an international tender to purchase 40,000 tonnes of grade 1 milling wheat to be sourced from the United States
• WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy 120,000 tonnes of milling wheat which can be sourced from optional origins

PENDING TENDERS

• FEED GRAIN TENDER: Iranian state-owned animal feed importer SLAL has issued an international tender to purchase up to 60,000 tonnes of animal feed barley, 60,000 tonnes of feed corn and 60,000 tonnes of soymeal
• SOYOIL TENDER: Iran’s state purchasing agency GTC has issued an international tender to purchase about 30,000 tonnes of soyoil
• WHEAT TENDER: Iraq’s state grains buyer has extended the deadline for the validity of price offers in a tender to buy a nominal 50,000 tonnes of hard milling wheat
• BARLEY TENDER: A buyer in Qatar has issued a tender to buy an estimated 105,000 tonnes of animal feed barley
• WHEAT TENDER: Bangladesh’s state grains buyer has issued another international tender to purchase 50,000 tonnes of milling wheat

U.S. Inspected 1.607m Tons of Corn for Export, 629k of Soybean

Ukraine May Resume Wheat Exports If Enough Sowing Completed

• Cabinet will likely discuss easing of curbs in April: official
• Restrictions already lifted on corn, sunflower oil exports

Ukraine may ease wheat-export curbs as soon as next month, once it is confident that spring sowing is progressing enough despite Russia’s invasion, though export capacity remains strained with some seaports effectively closed by fighting, an official who oversees the country’s trade said.

The Cabinet will likely discuss whether it can remove licenses required from shippers to sell wheat abroad in April, after it estimates potential yields following planting and makes sure this year’s harvest will be enough to provide food security, Taras Kachka, deputy economy minister told Bloomberg News in a video interview Sunday.

The government introduced licensing in March to curb exports of major Ukrainian agriculture commodities like wheat, corn, sunflower oil, poultry and eggs, following Russia’s invasion the previous month. However, restrictions on corn and sunflower oil were removed last week, as the nation has stockpiled enough and farmers need foreign cash to keep their operations going.

“We hope that for wheat we will be able to resume exports as well,” Kachka said. “Sowing has begun and, fingers crossed, it will be as good as it can be. Once we see what the outlook for this year harvest is, and what our domestic stockpiles are, we will make a balanced decision.”

Spring Planting During a War

The eastern European nation is struggling to conduct its spring planting campaign in conditions that it hasn’t faced since the Second World War, with farmers having to work in fields under constant risk of shelling and fighting. The Agriculture Ministry estimates sowing areas may shrink by 30% to 50% from last year. The planting effort is vital for the country’s economy, which is heavily dependent on agriculture exports.

READ: Ukraine Sunflower Planting to Sink With Crop Hit Hardest by War

Another obstacle is how to ship out grains and oilseeds, as most of the country’s southern seaports typically used for exports have been blocked by Russian troops in regions near the Black Sea and the Sea of Azov. Even under such conditions, shippers managed to export more than 1 million tons of corn and 300,000 tons of wheat since the beginning of March, according to Kachka.

The government in Kyiv is considering redirecting export shipments to seaports that are under Ukraine’s control near the border with Romania, from which cargoes may later go further west to foreign markets via the Danube river. But the bottleneck is Ukraine’s railway that can ship just a few hundred thousand tons of crops per month under current circumstances, and that’s far below the volumes that can usually be exported via sea ports, according to the market researcher UkrAgroConsult.

The first shipments via that route, via Izmail, took place last week, Kachka said. Izmail is an inland port in southwestern Ukraine, in the Danube delta region.

Russian wheat exports via Black Sea steady, domestic grain prices rally

Russia kept its wheat exports steady via its Black Sea ports last week as Azov Sea routes remain restricted, analysts said on Monday, while domestic prices for the grain continued to rally because of the recent weakening of the rouble.

Western sanctions imposed on Russia for what Moscow calls “a special military operation” in Ukraine have complicated trade logistics and transactions in foreign banks for many Russian firms in the last four weeks.

“Export flow continues as a combination of old and newly signed contracts,” said Dmitry Rylko, the head of the IKAR agriculture consultancy.

IKAR and Sovecon, another consultancy, said prices for wheat with 12.5% protein content from the Black Sea ports were being assessed at around $390 per tonne free on board (FOB).

However, buyers do not want to buy at FOB and carry delivery risk, so traders mainly sell Russian wheat at a cost and freight basis, Sovecon added.

Sovecon said Russia exported 400,000 tonnes of grains last week compared with 520,000 tonnes a week earlier.

In the domestic market, prices for wheat in roubles continued to rally to reflect earlier depreciation of the Russian currency against the dollar, Sovecon said.

Russia’s southern regions have started spring grains sowing amid favourable weather. As of March 18, spring grains were planted on 222,000 hectares compared with 178,000 hectares on the same date a year ago, Sovecon said.

India buys Russian sunflower oil at record high price as Ukraine supplies halt

India has contracted 45,000 tonnes of Russian sunflower oil at a record high price for shipments in April as edible oil prices in the local market surged after supplies from rival Ukraine stopped, five industry officials told Reuters.

Sunflower oil from Russia could help the world’s biggest edible oil importer in easing the shortfall at a time when availability of vegetable oils is stretched because of Indonesia’s decision to restrict palm oil supplies and lower soybean crop in South America.

“As vessel loading is not possible in Ukraine, buyers are trying to secure supplies from Russia,” said Pradeep Chowdhry, managing director of Gemini Edibles & Fats India Pvt. Ltd, which contracted 12,000 tonnes of Russian sunflower oil for April shipments.

Refiners bought crude sunflower oil at a record price of $2,150 a tonne, including cost, insurance and freight (CIF), in India for April shipments, compared with $1,630 before Russia invaded Ukraine, dealers said.

Sunflower oil was cheaper than rival palm oil and soyoil before the conflict, but as supplies from top exporter Ukraine stopped, buyers have to pay hefty premium, Chowdhry said.

The Black Sea accounts for 60% of world sunoil output and 76% of exports.

Indian buyers were not making purchases of Russian sunflower oil for nearly a month, but now they are placing orders as banks are opening letters of credit (LC) for the imports, said a New Delhi-based dealer with a global trading firm.

“Indian buyers are paying in dollars. Indian insurance companies are providing cover to vessels bringing sunoil from Russia,” the dealer said.

Shipments of more than 300,000 tonnes of sunflower oil from Ukraine to India are stuck as loading at Ukrainian ports is suspended, said a Mumbai-based dealer.

India imports sunoil mainly from Russia and Ukraine. It imports palm oil from Indonesia and Malaysia, whereas the bulk of soyoil is sourced from Argentina and Brazil.

India has now been trying to increase imports of sunflower oil from Argentina, said Sandeep Bajoria, chief executive of Sunvin Group, a vegetable oil brokerage and consultancy firm.

“Even after the imports from Russia and Argentina, there would be shortfall of sunoil. Nobody can replace Ukraine’s shipments,” Bajoria said.

India consumes around 200,000 tonnes of sunflower oil but currently refiners can import around 80,000 tonnes only, the New Delhi-based dealer said.

Consumers are forced to switch to soyoil, rapeseed oil and groundnut oil as sunflower oil supplies are limited, the dealer said.

“Sunflower oil is very expensive. This is forcing price sensitive buyers to shift to other oils,” Bajoria said.

Brazil’s Abiove sees soy crop, exports down; good domestic crush margins

Brazilian soybean crusher group Abiove on Monday lowered projections for the country’s 2021/2022 crop to 125.3 million tonnes, a 7.7% drop from the end of January, to better reflect harvest progress and the impact of drought-related losses.

Despite a reduction of 10.5 million tonnes from the previous output forecast, Abiove, which represents companies such as Cargill and Bunge, still believes local crushers will process a record 48 million tonnes, reflecting strong margins to make oil and soymeal in Brazil, the world’s largest supplier of soybeans.

The country, on the other hand, is poised to export 9.2 million fewer tonnes of the oilseed this season, or 77.7 million tonnes in total, a sign that U.S. competitors are receiving more orders at a time when Brazilian shipments should be peaking.

“For soy exports, companies are dealing with a more tense scenario than was projected before,” said Daniel Furlan Amaral, chief economist at Abiove. “But I want to look at the glass as half full … What’s positive is to have Brazil’s crushing industry modern and competitive to meet the needs of the market,” he added.

Abiove said Brazilian exports of soybeans, soymeal and soyoil would total $51.4 billion in 2022, down from the $56.3 billion forecast in January.

But even so, sales of the so called soy complex will be a record, reflecting higher product prices than last year.

Abiove estimates record soymeal exports at 18.3 million tonnes this season, and soyoil exports at 1.7 million tonnes, virtually the same as the record high of 1.756 million tonnes registered 10 years ago.

If Abiove’s soybean and domestic crushing projections are confirmed, Brazil’s carryover stocks at the end of 2022 would drop to an estimated 1.9 million tonnes, the lowest level in more than a decade, according to Abiove figures.

WHEAT/CEPEA: Dollar depreciation lowers both import parity and prices in BR

After rising for two consecutive weeks, wheat prices (paid to farmers and in the wholesale market) resumed dropping in Brazil, following the US dollar depreciation against the Real, which reduces the import parity and favors purchases from abroad. In the international market, values reacted, due to concerns about the world supply.

Between March 18 and 25, the US dollar decreased by 5.25% compared to the Real, to BRL 4.751 on Friday, 25. Data from Cepea show that, in the same period, the prices paid to wheat farmers dropped by 1.49% in Rio Grande do Sul and 1.5% in Paraná, but remained firm (+0.38%) in Santa Catarina (SC). In the wholesale market (deals between processors), quotations decreased by 2.35% in RS, 2.1% in PR, 1.31% in São Paulo and 0.69% in SC.

Despite the recent devaluations, the monthly averages are at the highest nominal levels in the series of Cepea, which began in 2004. This scenario may lead farmers to increase the area allocated to wheat crops in Brazil, however, high production costs may constrain this increase.

Based on data from Conab (Brazil’s National Company for Food Supply), between March 14-18, the import parity price for the wheat from Argentina delivered to Paraná State was USD 405.52/ton. Considering the average of the US dollar in that period, at BRL 5.0815, the wheat imported was sold at BRL 2,060.64/ton, while for the Brazilian wheat traded in Paraná, the average was at BRL 1,908.34/ton, according to data from Cepea. In Rio Grande do Sul, the import parity for the product from Argentina would be of USD 380.79/ton (BRL 1,934.95/ton), against BRL 1,902.50/ton on the average of the state surveyed by Cepea.

The Futures dropped on some days last week, but resume rising high on Friday, 25. In general, international prices have been unstable, influenced by the Russia-Ukraine war and concerns about the world supply of wheat. It is important to highlight that Ukraine’s wheat crop may be much lower than the expected before the conflict.

Indonesia Raises Crude Palm Oil Reference Price for April

Govt raises reference price for crude palm oil to $1,787.50 per ton in April, from $1,432.24 in March, according to trade ministry decree on Tuesday.

CPO export tax to be set at $200/ton and additional levy at $375/ton in April

Brazil Fertilizer Prices Pressured by International Constraints

Brazil’s potash prices rising quickly with no expectation for relief in the coming week, as sanctions against Russia and Belarus have caused concerns about adequate supply. As a result, producers are limiting offer amounts, elevating prices.

The surge in prices for other nutrients will likely last longer as well. Natural gas price volatility is affecting ammonia production, a key input for nitrogen and phosphate-based fertilizers. Phosphate prices have risen $40 a metric ton and nitrogen prices to $50 per mt. Additional pressure on these nutrients comes from China maintaining export restrictions and India’s imminent tender announcement.

Top Wheat Shipper Australia ‘Pretty Well’ Sold Out in First Half

• Competition from India seen in some traditional markets
• Customers are unfazed by offers of lower protein wheat

Australia, one of the world’s top three wheat exporters, is ‘pretty well’ sold out for the first half of the year as buyers in the Middle East and Southeast Asia seek to replace Black Sea supplies cut off by the war in Ukraine, according to CBH Group, the country’s biggest shipper.

Most of the available capacity will be in the second half, Jason Craig, chief marketing and trading officer, said by phone. As the war continues, there’s interest further out “as customers look to cover some of their requirements that they would have traditionally got from either Russia or Ukraine,” he said.

Russia’s invasion of its neighbor more than a month ago, and the ongoing war and sanctions, have choked off more than a quarter of global wheat exports. Severe damage to ports, transport and logistics have brought shipments from Ukraine to a standstill, though some cargoes are still moving out of Russia.

Australia is looking to ship a record amount of wheat this year after a huge harvest. The country is set to export 27.5 million tons of wheat in 2021-22, behind Russia with 32 million tons and the European Union with 37.5 million tons, according to the U.S. Department of Agriculture. The Russian figure may be subject to revision as the war persists and sanctions bite.

Buyers aren’t fazed by the lower protein wheat on offer from Western Australia this season, Craig said on Tuesday. “In these sorts of market circumstances, most customers are just trying to cover some of their requirements,” he said.

Booming Wheat Exports From India to Help Ease Global Shortage

The country is feeling some heat from India. Australian wheat is competitively priced, Craig said. “But Indian wheat is certainly at a lower value than Australian wheat, and therefore we’re starting to see that compete against Australian wheat in some of our traditional markets,” like Indonesia, he said.

For Australia, there is pressure on grain supply chains across the country because of the record crops and other issues such as Covid, and “that limits the amount of exports you actually can do in a year,” he said.

China’s Grain Supplies Ample, Prices to Stay Stable: Eco. Daily

China’s supplies of grains and other farming products key to daily life are secure and their prices can stay stable, Economic Daily reports, citing agriculture ministry and its affiliated researchers.

• China’s grains are more than 95% locally produced, which has helped contain domestic price gains even as global prices rise faster this year
• Cooking oil prices are expected to fall gradually as output is likely to rise this year, while pork price declines may ease as government steps up support to farmers
• Supplies of eggs, dairy products and vegetables are all ample

USDA attaché sees Egypt 2022/23 wheat imports falling to 11 mln T

March 28 (Reuters) – The following are selected highlights from a report issued by the U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) post in Cairo:

“Egypt is closely following the repercussions of the Russian-Ukrainian crisis. Certainly Egypt’s grains imports from both countries were affected. Accordingly, FAS Cairo forecasts Egypt’s wheat imports in MY 2022/23 (July–June) at 11 MMT (million metric tons), down by 8.3 percent from MY 2021/22 Post’s import estimate figure of 12 MMT. Importing and buying wheat from other markets remains a viable option for government and private purchases. Wheat production in MY 2022/23 is up by 8.9 percent from the previous marketing year. Egypt has sufficient wheat stocks for its bread subsidy program until the end of calendar year 2022. Corn and rice production in MY 2022/23 (Oct–Sept) are forecast to be similar to the previous marketing year. MY 2021/22 (Oct–Sept) Corn imports are expected to decline by 5.1 percent.”

Indonesia turns to Russia for cheap oil and wheat

Singapore/Jakarta | Indonesia’s biggest energy player is revamping a refinery to take advantage of cheap oil, with Russia offering big discounts for any buyer prepared to find a way around its isolation from global payment systems.

Pertamina president Nicke Widyawati said the discounting of Russian oil as a result of the war in Ukraine was a buying opportunity for the company. “During this geopolitical situation, we see that there is an opportunity to buy Russian oil at a good price,” Ms Widyawati told a parliamentary commission.

The manoeuvring by Pertamina, Indonesia’s largest state-owned enterprise that’s active in upstream and downstream sectors of oil and gas, comes a week after Russia’s ambassador to Indonesia said Russia was ready to increase its wheat exports to make up for any shortfall from a war-torn Ukraine.

The West’s sanctions slapped on Russia for invading Ukraine exclude grain, while the US and UK, but not the EU, have sanctioned Russian oil. Payments have also become more difficult with most Russian banks cut off from the SWIFT global payments system.

Singapore is the only country among the 10 members states of the Association of South-east Asian Nations to sign on to sanctions and export controls. Indonesia’s President Joko Widodo’s has called for a ceasefire but maintains dialogue, not sanctions, are the fastest route to peace.

Jakarta has also so far refused calls from Washington and Sydney to reconsider Moscow’s G20 role. As this year’s G20 President, Indonesia is co-ordinating the leaders summit scheduled to be held in October in Bali. There are anecdotal reports that G20 working group members have already made it clear they will not participate in events with a Russian representative in attendance.

Pertamina isn’t ready to take Russian oil yet. It first has to modify its Balongan Refinery in West Java, that can currently only process crude oil with low sulphur levels, such as that produced by Saudi Aramco. However, these changes are under way and are expected to be completed by next month.

Payments via India

Ms Widyawati said Pertamina was working with Indonesia’s central government and central bank on ways to transmit payment via a business-to-business mechanism.

“There is no problem as long as the companies we deal with are not sanctioned. For the payment, we may co-ordinate through India,” Ms Widyawati.

Indonesia’s Finance Minister Sri Mulyani has warned inflationary pressures are building due to the conflict in Europe.

Higher prices for commodities including natural gas, coal, oil, palm oil, corn and wheat have a direct impact on inflation, Ms Mulyani said.