Global Ag News for May 10.23

TOP HEADLINES

Trudeau Vows to Back Farmers If China Retaliates Economically

Prime Minister Justin Trudeau promised to support Canadian agricultural producers if China retaliates economically in a growing feud that’s seen both countries expel diplomats.

“We have always been there to assist farmers, whether it was pork or canola producers, and we will be there to support businesses and producers. But we do hope that that will not happen,” Trudeau told reporters Tuesday, speaking in French outside the legislature in Ottawa

FUTURES & WEATHER

Wheat prices overnight are down 6 in SRW, down 9 in HRW, down 7 1/4 in HRS; Corn is down 4 3/4; Soybeans down 9 1/4; Soymeal down $2.10; Soyoil down 0.45.

For the week so far wheat prices are down 22 3/4 in SRW, up 14 1/4 in HRW, up 4 1/2 in HRS; Corn is down 16 1/2; Soybeans down 31 1/2; Soymeal down $9.20; Soyoil down 1.74.

For the month to date wheat prices are up 3 3/4 in SRW, up 71 in HRW, up 36 3/4 in HRS; Corn is down 5; Soybeans down 14 1/4; Soymeal down $15.50; Soyoil up 0.92.

Year-To-Date nearby futures are down 20.4% in SRW, up 2.1% in HRW, down 11.2% in HRS; Corn is down 6.0%; Soybeans down 5.0%; Soymeal down 13.0%; Soyoil down 17.4%.

Chinese Ag futures (JUL 23) Soybeans down 108 yuan; Soymeal down 41; Soyoil down 56; Palm oil down 20; Corn down 48 — Malaysian palm oil prices overnight were down 106 ringgit (-2.78%) at 3701.

There were changes in registrations (-2 Oats, 150 Soyoil, 7 HRW Wheat). Registration total: 2,389 SRW Wheat contracts; 22 Oats; 11 Corn; 0 Soybeans; 1,145 Soyoil; 130 Soymeal; 88 HRW Wheat.

Preliminary changes in futures Open Interest as of May 9 were: SRW Wheat down 1,468 contracts, HRW Wheat down 1,075, Corn up 9,823, Soybeans up 3,659, Soymeal up 5,842, Soyoil up 371.

Northern Plains: Isolated to scattered showers through Saturday. Temperatures near to above normal through Saturday. Outlook: Isolated showers Sunday. Mostly dry Monday-Thursday. Temperatures near to above normal Sunday-Thursday.

Central/Southern Plains:  Isolated to scattered showers through Friday, south Saturday. Temperatures above normal through Thursday, near to above normal Friday-Saturday. Outlook: Isolated to scattered showers south Sunday-Monday. Mostly dry Tuesday-Thursday. Temperatures near to below normal Sunday-Thursday.

Western Midwest: Isolated to scattered showers through Saturday. Temperatures above normal through Saturday.

Eastern Midwest: Mostly dry through Thursday. Scattered showers Friday-Saturday. Temperatures near to above normal Wednesday, above normal Thursday-Saturday. Outlook: Isolated to scattered showers Sunday. Mostly dry Monday. Isolated showers Tuesday. Mostly dry Wednesday-Thursday. Temperatures near to above normal Sunday, near to below normal Monday-Thursday.

Delta:  Isolated to scattered showers through Saturday. Temperatures above normal through Saturday. Outlook: Isolated to scattered showers Sunday-Wednesday. Mostly dry Thursday. Temperatures near to above normal Sunday, near to below normal Monday-Thursday.

Argentina: Cordoba, Santa Fe, Northern Buenos Aires:  Mostly dry through Saturday. Temperatures near to below normal through Thursday, near to above normal Friday-Saturday. La Pampa, Southern Buenos Aires:  Mostly dry through Saturday. Temperatures near to below normal through Thursday, near to above normal Friday-Saturday.

The player sheet for 5/9 had funds: net sellers of 4,500 contracts of SRW wheat, sellers of 9,500 corn, sellers of 8,500 soybeans, sellers of 4,500 soymeal, and  sellers of 2,000 soyoil.

TENDERS

• VEGETABLE OIL TENDER: Egypt’s state grains buyer, the General Authority for Supply Commodities, said on Tuesday it was seeking vegetable oils in an international purchasing tender for arrival June 25 – July 10. GASC said traders should submit bids for payment at sight and 180-day letters of credit, and it would choose between them. The deadline for offers is May 11.
• LOCAL VEGETABLE OIL TENDER: Egypt’s state grains buyer, the General Authority for Supply Commodities, said on Tuesday it set a tender for local vegetable oils, seeking at least 1,000 tonnes of soyoil and 500 tonnes of sunflower oil for delivery July 1-20. The deadline for offers is May 11.
• CHINA CANCELS U.S. CORN SALE: The U.S. Agriculture Department announced Tuesday that private exporters reported the cancellation of sales totaling 272,000 tonnes of corn headed to China for the 2022-2023 marketing year.
• CORN TENDER: Taiwan’s MFIG purchasing group has issued an international tender to buy up to 65,000 tonnes of animal feed corn which can be sourced from the United States, Brazil, Argentina or South Africa
• FOOD WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy a total of 125,974 tonnes of food-quality wheat from the United States, Canada and Australia in a regular tender that will close on May 11.
• NO PURCHASE IN CORN, SOYMEAL TENDERS: Algerian state agency ONAB is believed to have rejected all offers and made no purchase in an international tender for up to 140,000 tonnes of animal feed corn, and an international tender 70,000 tonnes of soymeal which closed last week.

PENDING TENDERS

• RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 43,500 tonnes of rice
• FEED BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase up to 120,000 tonnes of animal feed barley.
• SOFT WHEAT TENDER: Algeria’s state grains agency OAIC has issued an international tender to buy soft milling wheat to be sourced from optional origins.

TODAY

ETHANOL: US Weekly Production Survey Before EIA Report

Output and stockpile projections for the week ending May 5 are based on six analyst estimates compiled by Bloomberg.

• Production seen higher than last week at 987k b/d
• Stockpile avg est. 23.515m bbl vs 23.363m a week ago
• The EIA in Washington is scheduled to release the report at 10:30am Wednesday

Brazil Soybean, Corn Crop Survey Before Conab’s Report

The following table shows results of a Bloomberg News survey of as many as eight analysts for Brazil’s soybean and corn crops. Conab, the Brazilian national supply company, is scheduled to release its latest estimates on May 11 at 9am local time.

Canada March 31 Wheat Stocks Rose to 13.26M Tons: StatsCan

Statistics Canada in Ottawa releases principal field crops report for stocks as of March 31.

• Total wheat stocks rose to 13.26m tons vs. 11.22m in same period last year
• Durum wheat fell to 1.81m tons vs 1.9m
• Canola rose to 5.95m tons vs. 5.16m in the same period last year

Drop in Brazil corn prices should ease cost pressure on meatpackers

A sharp drop in corn prices in Brazil should provide some relief for the poultry and pork industries this year, the president of meat trade group ABPA said on Tuesday, BRF SA, JBS SA and other companies gear up to release first-quarter results in coming days.

Corn and soy are used as livestock feed and account for about 70% of production costs of chicken and pork. Corn prices fell by nearly one third in the domestic market, as the country expects to harvest a new record crop in coming months.

In Campinas, Sao Paulo state, corn prices are close to 60 reais per bag, down 28% this year and well below the highs of more than 100 reais per bag in 2022.

This is a boon for food companies like BRF, which posted consecutive losses in 2022 partly due to high feed costs.

“The industry is in no hurry to buy corn,” said Ricardo Santin, head of ABPA. “Nowadays things are better for the grain buyer, we are finally recovering some of the losses we had in the past.”

In the worst moments of corn supply, the meat industry was forced to pay premiums on corn destined for export markets to keep the grain in the country, Santin said.

According to private consultancies, Brazil will produce close to 130 million tonnes of corn, a record, with exports likely to surpass 45 million tonnes in 2023.

Lower corn prices restore “balance” in the industry, Santin said, adding that even at these levels corn remains an attractive commodity for farmers to cultivate.

“When there is a reduction in the cost of production, the industry can maintain stable [food] prices,” Santin said. “The good news about inflation is that it won’t rise, at least on our part.”

Brazil 2022/2023 Second Corn Crop Seen At 97.17 Million Tns Versus 92.27 Million Tns In Previous Forecast – Pátria Agronegócios

BRAZIL 2022/2023 SECOND CORN CROP SEEN AT 97.17 MILLION TNS VERSUS 92.27 MILLION TNS IN PREVIOUS FORECAST – PÁTRIA AGRONEGÓCIOS

Brazil Corn Exports Seen Reaching 319,432 Tns In May Versus 324,070 Tns Forecast In Previous Week – Anec

• BRAZIL SOY EXPORTS SEEN REACHING 15.35 MILLION TNS IN MAY VERSUS 12.08 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC
• BRAZIL SOYMEAL EXPORTS SEEN REACHING 2.37 MILLION TNS IN MAY VERSUS 2.2 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC
• BRAZIL CORN EXPORTS SEEN REACHING 319,432 TNS IN MAY VERSUS 324,070 TNS FORECAST IN PREVIOUS WEEK – ANEC

Malaysia April Palm Oil Stocks Falls to 1.5m Tons: MPOB

Malaysia’s palm oil stocks fell to 1.5m tons in April from 1.67m tons in March, according to Malaysian Palm Oil Board.

• Palm oil production fell to 1.2m tons from 1.29m tons in March
• Palm oil exports fell to 1.07m tons from 1.49m tons in March

Palm Oil Yield Improvement Needs Immediate Attention, MPOB Says

Topping the list of key issues for the palm oil industry is the need for yield improvement which requires immediate attention, Malaysian Palm Oil Board Chairman Mohamad Helmy Othman Basha said in a statement.

• Local oil palm industry has been facing stagnant yields which could affect its growth and sustainability
• Another critical area that needs innovative solutions is sustainable development
• Various issues have emerged as the oil palm industry continues to grow, ranging from land-use change and deforestation to the pollution of water, air, and land, as well as threats to biodiversity and conservation efforts

Palm Oil May Exceed 4,000 Ringgit on Weather Woes, Mistry says

• El Nino could hurt output in top producers this year
• Black Sea region supplies crucial for palm oil prices

Palm oil may climb above 4,000 ringgit ($898) a ton in the second half of this year on signs of any weather problems in growing areas, according to veteran trader Dorab Mistry.

“Climate change has made weather treacherous,” said Mistry, director at Godrej International Ltd. “El Nino is coming. There is scope for prices to rise unless there is a deep recession and energy prices fall.”

Still, futures will struggle between 3,400 ringgit and 4,000 ringgit in the near term if edible oil supplies continue to flow from the Black Sea or until a weather issue emerges, he said in slides prepared for delivery at Globoil International in Dubai. “If the Black Sea export corridor shuts, the outlook becomes stronger very quickly.” Palm oil was around 3,737 ringgit Wednesday.

Traders and investors are monitoring an increasingly volatile global climate, with some parts of Southeast Asia currently suffering from a brutal heat wave. A potential El Nino — a weather pattern that brings dry conditions to Asian regions — could affect plantations in Indonesia and Malaysia later this year.

Palm and other vegetable oils “need a weather problem to tighten supply,” said Mistry. “We have a lot of growing time and weather for northern crops as well for palm in 2023,” so it’s not possible to be bearish, he said.

Trudeau Vows to Back Farmers If China Retaliates Economically

Prime Minister Justin Trudeau promised to support Canadian agricultural producers if China retaliates economically in a growing feud that’s seen both countries expel diplomats.

“We have always been there to assist farmers, whether it was pork or canola producers, and we will be there to support businesses and producers. But we do hope that that will not happen,” Trudeau told reporters Tuesday, speaking in French outside the legislature in Ottawa

Outbound inspections resume under Black Sea grain deal – UN

The United Nations said inspections resumed on Tuesday of outbound vessels under a deal allowing the safe Black Sea export of Ukraine grain, which Moscow has threatened to quit on May 18 over obstacles to its own grain and fertilizer exports.

There were no inbound or outbound inspections of ships on Sunday or Monday.

The U.N. and Turkey brokered the Black Sea export agreement in July to help tackle a global food crisis that has been worsened by Moscow’s war in Ukraine. Officials from Russia, Ukraine, Turkey and the U.N. make up a Joint Coordination Centre (JCC) in Istanbul, which implements the deal.

“The JCC has confirmed that inspections have resumed today on outbound vessels,” Deputy U.N. spokesperson Farhan Haq said.

Senior officials from the four parties are due to meet in Istanbul this week for talks. Russia has said it will not extend the pact beyond May 18 unless a list of demands is met to remove obstacles to its own grain and fertilizer exports.

U.N. aid chief Martin Griffiths is traveling to Istanbul, Haq said.

Turkish Defence Minister Hulusi Akar on Tuesday described discussions ahead of the planned meeting on Wednesday and Thursday as “positive.”

“We will be working to continue the grains deal on May 18 without allowing for any stoppage or cessation,” Akar told broadcaster Haberturk.

To help convince Russia to allow Ukraine to resume Black Sea grain exports, a three-year pact was also struck in July in which the U.N. agreed to help Moscow facilitate those shipments.

While those Russian exports are not subject to Western sanctions imposed following the February 2022 invasion of Ukraine, Moscow says restrictions on payments, logistics and insurance are a barrier to shipments.

Russia in an excerpt of a letter seen by Reuters last month told its JCC counterparts that it will not approve any new vessels to take part in the Black Sea deal unless the transits will be done by May 18 – “the expected date of … closure.”

No new vessels have been authorized by the JCC since Thursday.

Tyson Foods aims to resume slaughtering pigs in mid May at Nebraska plant

Tyson Foods Inc TSN.N plans to resume slaughtering pigs in mid-May at a Madison, Nebraska, pork plant damaged by fire two weeks ago, the meatpacker said on Tuesday.

The extended halt to slaughtering comes as weak consumer demand for pork and low prices are squeezing margins for meatpackers and hurting hog farmers.

Tyson is continuing to divert hogs to other pork plants that would normally be slaughtered in Madison since the April 23 fire, spokesperson Liz Croston said. The Madison plant is doing limited “further processing” work, she said, after hogs are slaughtered elsewhere.

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