Global Ag News for Sep 24

China’s Energy Crisis Roils Food Supply as Soy Crushers Halted

Wheat prices overnight are down 4 1/4 in SRW, down 5 3/4 in HRW, down 4 1/2 in HRS; Corn is down 3 1/4; Soybeans down 2 1/2; Soymeal down $0.02; Soyoil down 0.27.

For the week so far wheat prices are up 4 3/4 in SRW, up 1 1/4 in HRW, up 6 1/2 in HRS; Corn is down 1 1/4; Soybeans down 2 1/4; Soymeal down $0.23; Soyoil up 0.49.

For the month to date wheat prices are down 8 3/4 in SRW, up 2 1/4 in HRW, up 3 1/2 in HRS; Corn is down 8 1/4; Soybeans down 10 3/4; Soymeal down $5.70; Soyoil down 2.00.

Chinese Ag futures (JAN 22) Soybeans up 52 yuan ; Soymeal down 20; Soyoil up 144; Palm oil up 170; Corn up 14 — Malasyian Palm is down 16. Malaysian palm oil prices overnight were down 16 ringgit (-0.36%) at 4431.

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

Midwest corn, soybean and winter wheat forecasts: West: Mostly dry Thursday. Isolated showers Friday. Mostly dry Saturday-Monday. Temperatures near to below normal Thursday, near normal Friday-Saturday, above normal Sunday-Monday. East: Scattered showers Thursday. Scattered showers Friday night-Saturday. Mostly dry Sunday-Monday. Temperatures near to below normal Thursday, near normal Friday-Saturday, near to above normal Sunday-Monday. 6 to 10 day outlook: Isolated showers east Tuesday. Mostly dry Wednesday-Saturday. Temperatures above normal Tuesday-Saturday.

The player sheet for Sept. 23 had funds: net buyers of 9,000 contracts of  SRW wheat, buyers of 4,500 corn, buyers of 1,000 soybeans, sellers of 1,000 soymeal, and  buyers of 2,500 soyoil.

There were no changes in registrations. Registration total: 1,180 SRW Wheat contracts; 2 Oats; 17 Corn; 1 Soybeans; 365 Soyoil; 1 Soymeal; 1,275 HRW Wheat.

Preliminary changes in futures Open Interest as of September 23 were: SRW Wheat up 3,971 contracts, HRW Wheat down 7, Corn up 274, Soybeans up 4,678, Soymeal up 2,603, Soyoil up 2,471.

TENDERS

• WHEAT PURCHASE: Algeria’s state grains agency OAIC is believed to have purchased durum wheat in a tender which closed on Wednesday, European traders said. The volume bought was unclear but initial trade estimates were between 300,000 tonnes to almost 500,000 tonnes
• WHEAT PURCHASE: A government agency in Pakistan is believed to have bought some 575,000 tonnes of wheat in an international tender to purchase 500,000 tonnes which closed this week
• WHEAT PURCHASE: The Taiwan Flour Millers’ Association purchased an estimated 49,580 tonnes of milling wheat to be sourced from the United States in a tender which closed on Thursday
• CORN SALE: The U.S. Department of Agriculture confirmed private sales of 138,403 tonnes of U.S. corn to Guatemala for delivery in the 2021/22 marketing year that began Sept. 1.
• 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

• WHEAT TENDER: Japan’s Ministry of Agriculture sought 113,067 tonnes of food-quality wheat from the United States and Canada in a regular tender.
• WHEAT FLOUR TENDER: The state purchasing agency in Mauritius issued an international tender to buy 47,000 tonnes of wheat flour to be sourced from optional origins
• WHEAT TENDER: A government agency in Pakistan issued an international tender to purchase and import 640,000 tonnes of wheat

U.S. Sold 913K Tons of Soybeans Last Week; 373K of Corn: USDA

USDA releases net export sales report on website for week ending Sept. 16.

• Soybean sales fell to 913k tons vs 1,266k in previous week
• All wheat sales fell to 356k tons vs 617k in previous week
• Corn sales rose to 373k tons vs 249k in previous week

U.S. Export Sales of Soybeans, Corn and Wheat by Country

• China bought 624k tons of the 913k tons of soybeans sold in the week
• Canada was the top buyer of corn and Philippines led in wheat

U.S. Export Sales of Pork and Beef by Country

• Mexico bought 16.3k tons of the 32.6k tons of pork sold in the week
• Japan led in beef purchases

Argentine Corn, Wheat Crop Estimates Sept. 23: Exchange

The Buenos Aires Grain Exchange releases weekly report on website.

• Corn 2021-22 planting 8.5% complete vs 2.3% in the previous week
• Planting est. maintained at 7.1m ha

India’s 2021-22 Soybean Output Seen Rising on Good Rains: Patel

India’s output of soybeans, the country’s biggest monsoon-sown oilseed crop, may climb to 10m tons in 2021-22 from 8.9m tons a year earlier as favorable rains in main growing areas boost yields, according to G.G. Patel, a veteran trader.

• The crop area will stay unchanged at about 12.1m hectares, Patel, managing partner of Dipak Enterprises, said at a vegetable oil conference in Goa on Thursday
• Excess rains this month may have damaged the crop in some areas
  • Any more rain next month will be bad for the crop
• The western state of Maharashtra may overtake the central province of Madhya Pradesh as India’s top soybean grower this year as farmers planted the crop on a larger area, said Patel, who has been trading edible oils for more than 50 years
• NOTE: India’s soybean output in 2021-22 seen at 12.72m tons: farm ministry
• Edible oil prices in India may soften during ensuing festivals, helped by higher imports this month and the next, according to Atul Chaturvedi, president of the Solvent Extractors’ Association of India
  • Imports may total 1.6m-1.65m tons in September and 1.3m-1.35m tons in October
• NOTE: Festival Binge to Lift India’s Palm Oil Imports to Six-Year High

Farmers to Biden: Biofuel Cut Would Damage ‘Green’ Credibility

President Joe Biden is being urged by farm and renewable fuel groups to “pull EPA back from the brink” and ensure the U.S. Environmental Protection Agency doesn’t slash national biofuel-blending requirements.

• “We are deeply concerned that this administration is favoring the oil industry over the environment, rural communities and hardworking farmers by providing handouts that eclipse those obtained by fossil fuel advocates under the previous administration,” the Renewable Fuels Association, National Biodiesel Board, American Soybean Association and other groups say Thursday in joint statement
• While a formal plan from EPA hasn’t been released yet, reports indicate that the proposal would “destroy a decade of progress on low-carbon biofuels and brazenly violate the promises that President Biden made to farmers, green voters, and his own allies in Congress:” statement

U.S. Crops in Drought Area for Week Ending Sept. 21: USDA

• Winter wheat crops in areas of moderate to intense drought rose to 38% vs 33% in the previous week
• NOTE: Winter wheat 21% planted as of last Sunday
• Cotton crops in drought area rose to 10% vs 5%
• Overall, drought conditions ranging from moderate to severe (D1-D4) rose to 46.6% from 45.6%

China’s Energy Crisis Roils Food Supply as Soy Crushers Halted

• Plants in Tianjin told to suspend output for at least a week
• Move is part of efforts to cut energy use amid supply crunch

Soybean processing plants in a northeastern Chinese city have been ordered to shut down for at least a week, the latest fallout from Beijing’s moves to cut energy consumption and secure dwindling power supplies.

Plants in the coastal metropolis of Tianjin stopped operations earlier this week and may not resume production until next month, according to people familiar with the matter. The units have a combined soy processing capacity of about 25,000 tons a day and Tianjin is one of the country’s crushing hubs.

Some of the plants, including those operated by top agricultural traders Louis Dreyfus Co. and Bunge Ltd., had to suddenly stop after the government cut power supplies, the people said, asking not to be identified as the information is private. This is the first time all the plants have ever been told to shut down completely, the people said.

Louis Dreyfus declined to comment, while media representatives for U.S.-based Bunge didn’t immediately return emails seeking comment. The Tianjin municipal government didn’t immediately respond to questions sent by fax.

The shutdowns are another sign of how a severe power crisis in China is roiling commodities from aluminum to steel to now food. Industries across the country have seen their power supplies curbed in the last few weeks over pressure to lower energy use and suppress emissions, and also on fears that surging global energy prices and dwindling coal supplies at home will worsen a power crunch.

China’s top economic planner earlier this week warned that the industry must ensure skyrocketing energy prices don’t raise the cost of fertilizer, which is crucial for food production. Urea futures have soared, tracking a rally in coal.

More than 10 provinces, including industrial powerhouses Jiangsu, Zhejiang and Guangdong, are rationing electricity and forcing cuts to factory production amid power supply issues and a push to enforce environmental regulations.

The crushing plants convert soybeans into edible oil, used in cooking, as well as meal to produce animal feed. China is the world’s biggest soybean importer and buys large volumes from countries including Brazil, Argentina and the U.S.

IGC Raises Global Grains Stockpile Estimate on Corn Supply

Global grain inventories in the 2021-22 season are now seen at 599m tons, up from last month’s estimate of 589m tons, the London-based International Grains Council said in a report.

• That’s mainly due to bigger corn production
  • Inventories for the grain are now seen at 282m tons, versus 270m tons projected last month
  • That now puts stockpiles higher than the prior season
• Meanwhile, the world wheat inventory outlook was trimmed to 277m tons, from 278m tons, on a smaller crop

Ukraine 2021 grain harvest 66.5% complete at 46.4 mln T

Ukrainian farms have harvested 46.4 million tonnes of grain from 66.5% of its sowing area with the yield averaging 4.38 tonne per hectare, the agriculture ministry said on Friday.

The volume includes almost 33 million tonnes of wheat, 10.2 million tonnes of barley and some volume of other grains, the ministry said. Favourable weather could help Ukraine to harvest all-time high harvest of 80.6 million tonnes of grain this year, up from 65 million in 2020, the ministry has said.

Ukraine 2022 winter wheat sowing 18.3% complete -ministry

Ukrainian farms had sown 1.2 million hectares of winter wheat for the 2022 harvest as of Sept 23 or 18.3% of the expected area of 6.68 million hectares, the agriculture ministry said on Friday.

Winter wheat accounts for 95% of Ukraine’s total wheat sowing area.

The winter grain sowing area will also include 1.02 million hectares of winter barley and the sowing is 5% complete, it said.

Last year, the autumn drought reduced the area planted with winter grains, and farmers sowed 6.1 million hectares of winter wheat, 954,700 hectares of winter barley and 125,200 hectares of rye for the 2021 harvest.

One of the major grain growers and exporters globally, Ukraine plans to harvest a record 80.6 million tonnes of grain in 2021.

China state planner calls for sufficient gas, coal to ensure fertilizer supply – Reuters

China’s state planner on Friday called on state companies to provide sufficient power supply to fertiliser producers amid soaring prices.

It urged state oil majors Petrochina, Sinopec and CNOOC to strictly fulfil gas supply contracts to fertiliser makers, and said firms in some provinces would be allowed to increase output of phosphate ore – a key ingredient in the production of fertilisers.

French Corn Conditions Steady; Harvest Kicks Off: AgriMer

French corn conditions held unchanged in the week to Sept. 20, FranceAgriMer data showed on Friday

• 89% of the crop was rated in good or very good condition, the same as in the prior week
  • That’s up from 58% at the same time last year
• Corn harvest has also begun, with 1% of the crop collected so far
  • That compares to 15% at the same time last year

Global Vegetable Oil Prices May Ease in Next Six to 12 Months

• Production is recovering, says LMC International’s James Fry
• Palm oil may average slightly below 4,000 ringgit next year

Global vegetable oil prices will probably ease in the next six to 12 months as production recovers, according to James Fry, a veteran industry analyst and chairman of LMC International.

The outlook for edible oil supply for the next crop year is fairly well-established, with expanding palm oil output from Indonesia and improving Black Sea sunflower oil, Fry said at the annual Globoil conference on Friday. Demand will be the key driver in the next few months.

Global edible oil prices have rallied this year due to a supply crunch and rising biofuel use. The key to future prices lies in biofuel in Europe and the U.S., Fry said. Hesitancy over U.S. waivers may signal that its demand will weaken in the short run to allow prices to ease further. Incentives for low-carbon feedstocks could also curb vegetable oil use in biofuel mandates, he added.

Saskatchewan Farmers Harvest 89% of Crop as Soil Moisture Drops

Harvest in the Canadian agricultural province is well ahead of the five-year average of 63% for this time of year, Saskatchewan government says Thursday.

• Additional 7% of crop is swathed or ready to straight-cut, weekly crop report says
• 94% of spring wheat is harvested, along with 89% of barley, 97% of durum and 80% of oats
  • 80% of canola and 64% of flax are harvested
  • Lentils and field peas are 99% harvested
• Cropland topsoil moisture is rated as 25% adequate, 46% short, 29% very short
  • Hay and pasture land topsoil moisture is 16% adequate, 40% short, 44% very short
  • Strong winds and lack of rain caused these conditions to decline
• Majority of crop damage in past week was due to wind, frost, waterfowl, wildlife and lack of moisture

China steps up Australian wheat imports despite trade standoff

China is snapping up cargoes of Australian wheat despite a bitter trade standoff between the two countries, as crop downgrades elsewhere lead to a global shortfall in output.

The buying spree comes as Australia, a key global food supplier, is expecting a second consecutive bumper harvest, while Northern Hemisphere producers have been hit by adverse weather and drought.

China, the world’s top importer of agricultural products, has imposed anti-dumping duties on Australian wine and barley and slashed purchases of Australian coal and beef during the long-running dispute, but is seeking out wheat as prices hover near eight-year highs.

Russian Wheat-Export Tax to Rise to $53.50/Ton for Next Week

Russia’s wheat export customs duty will increase to $53.50/ton next week, from $50.90, the Agriculture Ministry said Friday on its website.

• NOTE: The rates are set weekly and take effect three working days after publication

U.S. Barge Shipments of Grain Fell 4% Last Week: USDA

Shipments along the Mississippi, Illinois, Ohio and Arkansas rivers declined in the week ending Sept. 18 from the previous week, according to the USDA’s weekly grain transportation report.

• Barge shipments of corn rose 70% from the previous week
• Soybean shipments down 32% w/w

LIVESTOCK: U.S. Red Meat Production Fell 2.2% Y/y in August

Commercial beef and pork production fell to 4.59b pounds in Aug., according to the USDA’s monthly livestock slaughter report.

• Beef production up 1% y/y to 2.36b pounds
• Aug. cattle slaughter totaled 2.89m head, an 2.9% increase from a year ago
  • Avg live weight dropped by 11 pounds from last yr to 1,354 pounds
• Pork production down 5.4% y/y to 2.21b pounds
• Hog slaughter fell 4.6% y/y to 10,611m head
  • Avg live weight was 280 pounds vs 282 pounds a year ago