Global Ag News for Dec 14th

TODAY

Wheat prices overnight are down 5 1/2 in SRW, down 4 3/4 in HRW, down 1 in HRS; Corn is down 2; Soybeans down 2 3/4; Soymeal up $0.14; Soyoil down 0.62.

For the week so far wheat prices are down 2 1/4 in SRW, up 1 in HRW, down 4 1/2 in HRS; Corn is down 7 1/2; Soybeans down 26; Soymeal down $0.47; Soyoil down 0.74. For the month to date wheat prices are down 4 in SRW, down 14 1/2 in HRW, up 7 1/4 in HRS; Corn is up 15 1/2; Soybeans up 21 1/2; Soymeal up $20.80; Soyoil down 2.56.

Chinese Ag futures (MAY 22) Soybeans down 4 yuan ; Soymeal down 38; Soyoil down 70; Palm oil down 104; Corn up 2 — Malasyian Palm is down 93. Malaysian palm oil prices overnight were down 93 ringgit (-1.94%) at 4699 as investors fret that the tropical oil’s narrowing spread to rival soybean oil would weaken demand..

There were changes in registrations (15 SRW Wheat, -1 Soyoil, -1 Soymeal). Registration total: 1,900 SRW Wheat contracts; 100 Oats; 0 Corn; 266 Soybeans; 164 Soyoil; 0 Soymeal; 108 HRW Wheat.

Preliminary changes in futures Open Interest as of December 13 were: SRW Wheat down 412 contracts, HRW Wheat down 2,412, Corn up 1,817, Soybeans down 6,663, Soymeal up 8,968, Soyoil up 6,436.

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

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

TENDERS

  • WHEAT TENDER: Turkey’s state grain board TMO has issued an international tender to purchase about 320,000 tonnes of milling wheat
  • WHEAT TENDER: Jordan’s state grain buyer has issued an international tender to buy 120,000 tonnes of milling wheat which can be sourced from optional origins
  • WHEAT TENDER: Algeria’s state grains agency OAIC has issued an international tender to buy milling wheat to be sourced from optional origins

PENDING TENDERS

  • WHEAT TENDER: Bangladesh’s state grains buyer received the lowest price offer assessed at $404.11 a tonne CIF liner out in an international tender to purchase and import 50,000 tonnes of wheat which closed on Dec. 8
  • FEED WHEAT AND BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries said it will seek 80,000 tonnes of feed wheat and 100,000 tonnes of feed barley to be loaded by Feb. 8 and arrive in Japan by March 10, via a simultaneous buy and sell auction that will be held on Dec. 15.
  • BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase 120,000 tonnes of animal feed barley
  • RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued another international tender to purchase an estimated 22,000 tonnes of rice to be sourced from the United States

U.S. Corn, Soybean, Wheat Inspections by Country: Dec. 9

Following is a summary of USDA inspections for week ending Dec. 9 of corn, soybeans and wheat for export, from the Grain Inspection, Packers and Stockyards Administration, known as GIPSA.

  • Soybeans for China-bound shipments made up 841k tons of the 1.72m total inspected
  • China was the top destination for corn inspections, Japan led in wheat

NOPA November U.S. soybean crush estimated at 181.640 mln bushels -survey

U.S. soybean processors continued their strong crushing pace in November, aided by ample supplies of beans and good processing margins, according to analysts polled ahead of a monthly National Oilseed Processors Association (NOPA) report due on Wednesday.

NOPA members, which handle about 95% of all soybeans processed in the United States, were estimated to have crushed 181.640 million bushels of soybeans last month, according to the average of estimates from 12 analysts.

If realized, the figure would represent the fifth largest monthly crush on record and the biggest ever November crush, topping the 181.018 million bushels processed in November 2020. But it would be down 1.3% from the 183.993 million bushels processed in October.

Estimates for the November 2021 crush ranged from 178.000 million to 185.000 million bushels, with a median of 181.600 million bushels.

The monthly NOPA report is scheduled for release at 11 a.m. CST (1700 GMT) on Wednesday. NOPA releases crush data on the 15th of each month, or the next business day.

Soyoil supplies at the end of November were seen increasing for a fifth straight month to 1.903 billion pounds, based on estimates from nine analysts. If realized, it would be up 3.7% from 1.834 billion pounds at the end of October and the largest end-of-month oil stocks since April 2020.

Stocks estimates ranged from 1.817 billion to 2.150 billion pounds, with a median of 1.875 billion.

IKAR Sees Russia 2021 Wheat Crop Totaling 76.7M Tons

This year’s total grains harvest is now seen at 122.7m tons, up from previous estimate of 121.7m tons, Dmitry Rylko, director general at consultant IKAR in Moscow, said by email.

  • Wheat crop seen at 76.7m tons, up from prior estimate of 75.5m tons
  • Barley crop seen at 18.2m tons and corn at 15.3m tons
  • NOTE: In late October, IKAR had estimated the wheat crop at 75m-75.6m tons and total grains harvest at 119.5m-121.7m tons

SovEcon Ups Russian Wheat Crop Est., Sees Harvest Data Issues

Russia’s 2021 wheat crop is estimated at 75.4m tons, up 0.1m tons from a prior outlook, consultant SovEcon says in an emailed report.

  • Says some of the country’s recent harvest data may be unreliable
    • “In recent weeks, we have seen that some regions have added a substantial amount of harvested wheat. This looks strange as the harvest is over and reported bigger wheat crop numbers were not accompanied by larger harvested area numbers,” says Andrey Sizov, head of SovEcon
    • Estimates “dubious amount” of at least 0.7m tons

LATAM CROP WEATHER: Downpours Raise Concerns in Northeast Brazil

Excessive precipitation in Bahia’s south over the past week raises soybean, coffee concerns, while some cattle producers have already reported losses due to flooding, Celso Oliveira, a meteorologist at Climatempo, says in a telephone interview.

  • Frequent, heavy rain has hampered chemical applications, boosting the risk of disease appearances in soy and coffee crops
  • The highest accumulation was seen in Itamaraju, a coffee growing municipality in Bahia state, where almost 500mm (20 inches) fell in seven days, Oliveira says in report
  • Precipitation seen easing in the coming days in the northeast, possibly resuming in the weekend
  • This week, rain will move across Brazil, improving moisture conditions in the south, where dryness and heat have caused isolated corn, soybean losses

ARGENTINA SOY & CORN

  • Weekend showers benefited much of Argentina’s soybeans and corn, though they will be limited to far south and west in the next two weeks, Commodity Weather Group says in report
  • Moisture is likely becoming short in the nation’s northeast by the end of the month, probably stressing crops if heat continues

Malaysia Dec. 1-10 Palm Oil Exports to EU 114,035 Tons: SGS

Following is a summary of Malaysia’s palm oil export figures, according to estimates by independent cargo surveyor SGS Malaysia Sdn.

  • EU imported 114,035 tons; +4.8% m/m
  • India imported 74,050 tons; -13.9% m/m

Russian Ministry Estimates 2021 Wheat Harvest at 76m Tons

This year’s wheat harvest is seen at about 76m tons, while total grain production is pegged at 123m tons, Agriculture Minister Dmitry Patrushev said in a televised parliament meeting. NOTE: The Agriculture Ministry’s research center in November said the wheat crop may reach 77m tons this year

Europe, Black Sea Grain Has Low Winter Frost Tolerance: MARS

Autumn weather has largely been good for newly-sown crops across Europe, the EU’s Monitoring Agricultural Resources unit says in a report.

  • However, plants have built up a weaker-than-usual level of frost tolerance in most of central, eastern and southeast Europe, especially in the Black Sea region
  • “Although frost tolerance is expected to increase with the forecast colder temperatures, the current hardening status could expose winter cereals to frost damage in the event of severe cold spells in the weeks to come”
  • In western Europe, below-average temperatures since early October hampered early development of winter-wheat, including in France

Argentina To Get $400m From World Bank for Green Farm Projects

The bank’s board approved the loan to “implement climatically intelligent and innovative practices that improve the productivity and competitiveness of Argentina’s farm-food system,” according to an emailed statement dated Dec. 10. The loan, due to be paid back in 34 years, is part of a World Bank program that seeks “green development through investments in climate-resilient infrastructure”

Brazil’s FOB soybean oil basis lower than Argentina’s on biodiesel cut

Brazilian FOB soybean oil port differentials had an unusual start for December, lower than Argentinian levels, amid a cut in the mandatory mixture of biodiesel into diesel for 2022.

From Nov. 30 to Dec. 7, the Brazilian FOB Paranagua soybean oil premium for January loading was assessed as lower as 30 points compared to Argentina’s FOB Up River, according to S&P Global Platts. By this time last year, in contrast, Brazilian FOB Paranagua basis was as higher as 100 points than the reported in Argentina.

The Brazilian FOB Paranagua basis for January shipment was assessed Dec. 7 at plus 480 points to CBOT, from plus 640 points by this time in 2020.

FOB soybean oil port differentials in Brazil are used to having a premium over Argentina’s given its geographical location and the fact that most of Brazilian agricultural exports are via sea-based ports, while Argentina relies on the Parana River, with subsequent reduction in loading capacity, to ship more than 80% of its agricultural goods.

But on Nov. 29 the Brazilian council for energy policy, or CNPE, announced that the biodiesel mandate for the whole year of 2022 will be 10%. The 16/2018 regulation, however, previously stated a 13% blend for January and February and a 14% mixture from March 2022.

According to CNPE, such a decision “fits with society’s interests and reconciles measures to contain diesel prices.” Throughout 2021, the Brazilian government also reduced the required blend from 13% to 12% or 10% amid concerns of inflation impacts.

Soybean oil is the main raw material for biodiesel production in Brazil, so a lower-than-expected mandate for the biofuel could eventually mean a surplus of the edible oil to be redirected towards the export side. That’s why such a pressure over nearby FOB Paranagua basis levels has been observed, according to sources.

For the rest of 2022, however, soybean crush operations could possibly decrease given the lower necessity of soybean oil to produce biodiesel, according to market participants. From January 2022, the Brazilian biodiesel market will move to a direct-sales contracts model, from regulatory auctions that occurred until this year.

China Food Import Rules to Take Effect Despite EU, U.S. Concerns

China’s new rules on food imports will take effect on Jan. 1 as planned, even after trading partners including the U.S. and Europe urged Beijing to delay the rollout, saying the policy would further disrupt supply chains.

Food imports into China from next year will have to meet new registration, inspection and labeling requirements, customs authorities said in a noticedated Dec. 13. The measures, which were first announced in April, cover a broad range of products from royal jelly to vegetable oils and infant food.

Diplomats from seven economies, which also include Australia, Japan, Canada and Switzerland, have urged China to delay the policy for at least 18 months, citing a lack of clarity on how it will be implemented. They’re concerned that a failure to comply will result in costly, last-minute logistics delays, and risk disruptions to global food supply chains at a time when the world is already experiencing serious shipping bottlenecks due to the Covid-19 pandemic.

The new rules require all overseas food manufacturers, processors and storage facilities to be registered with Chinese customs. Producers of goods that belong to 18 specific categories would require recommendations by authorities in their home countries, while others must self-register via an online platform.

China has said the move will help create an “effective food safety and sanitation management system” and ensure that food imports meet national regulations and food safety standards, according to the customs notice in April.

Egypt and Russia Mull Developing Joint Company for Grain Trading

Egypt’s supply minister discussed with a Russian delegation the possibility of establishing a joint Egyptian-Russian company for grain trading in Egypt to benefit food security in the North African country and some neighboring nations, Egypt’s supply ministry said in a statement.

  • They discussed establishing stores for vegetable oils under the partnership, as well as a zone with the Russian side to store 1m tons of wheat in Egypt per year in the first phase
    • That would help reduce shipping costs
  • The Russian delegation said the Egyptian-Russian relations should allow for large investments in the Egyptian markets
    • Called for regular meetings and to follow up on the proposals with studies and memorandum of understanding
  • NOTE: The Russian delegation was headed by the country’s deputy agriculture minister
    • Russian agriculture officials are currently on an exporters mission visit to Cairo, according to its agriculture ministry

LATAM CROP WEATHER: Downpours Raise Concerns in Northeast Brazil

Excessive precipitation in Bahia’s south over the past week raises soybean, coffee concerns, while some cattle producers have already reported losses due to flooding, Celso Oliveira, a meteorologist at Climatempo, says in a telephone interview.

  • Frequent, heavy rain has hampered chemical applications, boosting the risk of disease appearances in soy and coffee crops
  • The highest accumulation was seen in Itamaraju, a coffee growing municipality in Bahia state, where almost 500mm (20 inches) fell in seven days, Oliveira says in report
  • Precipitation seen easing in the coming days in the northeast, possibly resuming in the weekend
  • This week, rain will move across Brazil, improving moisture conditions in the south, where dryness and heat have caused isolated corn, soybean losses

ARGENTINA SOY & CORN

  • Weekend showers benefited much of Argentina’s soybeans and corn, though they will be limited to far south and west in the next two weeks, Commodity Weather Group says in report
  • Moisture is likely becoming short in the nation’s northeast by the end of the month, probably stressing crops if heat continues

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