Global Ag News for Dec 30th

TODAY – EXPORT SALES

Wheat prices overnight are up 3 in SRW, up 3 1/2 in HRW, unchanged in HRS; Corn is down 2 3/4; Soybeans down 10 1/2; Soymeal down $0.21; Soyoil down 0.43.

For the week so far wheat prices are down 24 in SRW, down 33 1/2 in HRW, down 23 1/2 in HRS; Corn is down 3; Soybeans up 17 1/2; Soymeal up $0.56; Soyoil up 1.06. For the month to date wheat prices are up 3 1/2 in SRW, up 5 3/4 in HRW, down 1 in HRS; Corn is up 35 1/4; Soybeans up 131 3/4; Soymeal up $65.00; Soyoil up 1.16.

Chinese Ag futures (MAY 22) Soybeans down 56 yuan ; Soymeal down 8; Soyoil up 6; Palm oil up 24; Corn up 9 — Malasyian Palm is down 12. Malaysian palm oil prices overnight were down 12 ringgit (-0.26%) at 4683.

There were no changes in registrations. Registration total: 1,900 SRW Wheat contracts; 39 Oats; 50 Corn; 244 Soybeans; 143 Soyoil; 0 Soymeal; 92 HRW Wheat.

Preliminary changes in futures Open Interest as of December 29 were: SRW Wheat down 2,889 contracts, HRW Wheat down 528, Corn down 883, Soybeans down 8,326, Soymeal down 2,674, Soyoil down 4,071.

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

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

The player sheet for Dec. 29 had funds: net buyers of 500 contracts of  SRW wheat, buyers of 500 corn, buyers of 250 soybeans, sellers of 500 soymeal, and  buyers of 750 soyoil.

TENDERS

  • WHEAT PURCHASE: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), said it bought 300,000 tonnes of wheat in an international tender for shipment Feb. 15 to Mar. 3. The purchase comprised 60,000 tonnes of French wheat, 180,000 tonnes of Ukrainian wheat and 60,000 tonnes of Romanian wheat, GASC said.
  • WHEAT PURCHASE: Jordan’s state grains buyer purchased 60,000 tonnes of hard milling wheat to be sourced from optional origins in a tender which closed on Wednesday

PENDING TENDERS

  • RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 22,000 tonnes of rice to be sourced from the United States
  • BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase 120,000 tonnes of animal feed barley
  • RICE TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of rice with import using land transport by railway
  • WHEAT TENDER: Iraq’s state grains buyer issued a tender to buy a nominal 50,000 tonnes of milling wheat with a limited number of trading companies asked to offer

US BASIS/CASH

  • Basis bids for soybeans and corn shipped by barge to the U.S. Gulf Coast were mixed on Wednesday in thin trade, with values underpinned by a lack of grain movement into river markets that feed the Gulf, traders said.
    • Cash markets have been quiet between the Christmas and New Year’s holidays, with some traders on vacation until next week.
    • Barge freight rates on Midwest rivers eased on Wednesday but remained at elevated levels due to tight supplies of empty barges. Spot barges on the Mississippi River at St. Louis were offered at 725% of tariff, down from 775% a day earlier but still up from 425% at the start of the month.
    • CIF soybean values remained sharply inverted, with December soy barges commanding a hefty premium above January loadings.
    • New soybean export sales, however, have slowed as importers wait for cheaper, new-crop Brazilian beans to hit the market in early 2022.
    • Growers in Brazil’s top soy state of Mato Grosso have already begun harvesting, farmers told Reuters, representing an advance of about 20 days from the prior season, when bad weather delayed field work.
    • At the U.S. Gulf, CIF soybean barges loaded in December were bid at about 115 cents over January futures, down 5 cents from Tuesday, while January barges were bid at around 87 cents over futures, up 2 cents.
    • FOB soybean basis offers for January loadings held at around 125 cents over January futures while February offers were around 110 cents over March, underpinned by tight export capacity.
    • For corn, Gulf CIF barges loaded in December were bid around 85 cents over March futures, down 1 cent from Tuesday.
    • FOB basis offers for January corn loadings held at around 110 cents over March futures while February FOB offers were around 98 cents over futures, up 3 cents from Tuesday.
  • U.S. spot cash millfeed values held steady on Wednesday in subdued trade ahead of the New Year’s Day holiday, brokers said.
    • Feed mixers have covered most of their immediate needs for ingredients and are waiting until January to resume pricing, one source said this week.
  • Spot basis bids for soybeans and corn were steady to weak at U.S. Midwest processing plants on Wednesday, grain dealers said.
    • The basis for both commodities was unchanged at elevators along Midwest rivers as well as around the interior of the region.
    • Some farmers were locking in prices for soybeans and corn they had been paying to hold in storage at commercial elevators, a dealer in Ohio said.
  • Spot basis bids for soybeans eased at processors and elevators around the interior of the U.S. Midwest on Wednesday morning, grain dealers said.
    • Along rivers, soybean bids were steady to firm, rising by 1 cent a bushel in Seneca, Illinois.
    • Cash bids for corn were flat at processors and interior elevators and steady to weak along rivers and at ethanol plants.
    • Farmers were not showing interest in booking sales of either commodity, an Iowa dealer said.
    • Dealers reported heavy farmer sales of soybeans earlier in the week when the futures market rallied to a five-month high, pulling cash prices higher.
    • The country movement on Monday and Tuesday satisfied demand for soybeans at processors and elevators around the region, which pressured basis levels.
  • Spot basis offers for soymeal were steady to weak at truck market processors in the U.S. Midwest on Wednesday, dealers said.
    • The rail market was unchanged after firming earlier in the week.
    • Activity on the cash market was light, with most end users well supplied, an Iowa dealer said.

DOE: U.S. Ethanol Stocks Fall 0.1% to 20.676M Bbl

According to the U.S. Department of Energy’s weekly petroleum report.

  • Analysts were expecting 20.762 mln bbl
  • Plant production at 1.059m b/d, compared to survey avg of 1.055m

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

  • Corn est. range 500k – 1,300k tons, with avg of 738k
  • Soybean est. range 700k – 1,200k tons, with avg of 885k

China to auction 500,000 tonnes of wheat from reserves to milling plants

China will sell 500,000 tonnes of wheat at auction from state reserves on Jan. 5, the National Grain Trade Center said in a notice late Wednesday.

The auction, the second round since this year’s new harvest, was only open to wheat flour processing companies, according to the notice. Wheat bought can only be processed by the milling plants and can not be resold, the notice said.

Brazil’s top soybean grower Mato Grosso kicks off harvesting of record crop

Soy growers in Brazil’s top producer Mato Grosso state began harvesting fields, farmers told Reuters, marking an early start to a record-setting season with potential output above 140 million tonnes.

The start of harvesting right after Christmas represents an advance of about 20 days from the prior season, when bad weather delayed farmers in Mato Grosso, where an estimated 38 million tonnes will be produced.

Less than 1% of soybeans had been harvested by mid-January 2021 there. Larger volumes are likely starting on Jan. 4, said Matheus Pereira, director at agribusiness consultancy Patria AgroNegocios.

Brazilian conglomerate Amaggi, which this season planted around 176,000 hectares (434,905 acres) with soybeans, began harvesting in Campo Novo do Parecis on Wednesday, according to a statement.

The company, which also plants cotton and corn after soy, estimates average soy yields at 60 bags per hectare.

By Feb. 20, most of Mato Grosso’s soybeans will have been harvested, said Fernando Cadore, president of the state’s farm group Aprosoja. With soy out of fields sooner this year, growers will be able to plant cotton and corn crops on the same areas within the ideal climate window, he said.

2021/22 ARGENTINA SOYBEAN PRODUCTION: 45.7 [41.9–49.0] MILLION TONS, DOWN <1% FROM LAST UPDATE

Insufficient rainfall across key producing areas of the northern Pampas fractionally lowers 2021/22 Argentina soybean production to 45.7 [41.9–49.0] million tons, despite decent planting progress so far. Our current estimate puts planted area at 16.3 million hectares, slightly above the Bolsa de Comercio in Rosario’s 16.2 million hectares, but below 16.5 million hectares reported by Bolsa de Cereales in Buenos Aires. In December’s WASDE (09 December), USDA placed Argentina soybean production at 49.5 million tons, unchanged from last update. Bolsa de Cereales in Buenos Aires and Bolsa de Comercio in Rosario currently forecast production at 44 and 48.8 million tons, respectively.

Dryness largely continued throughout the Pampas over the past two weeks, despite a few scattered rain showers that fell across northern crop areas. Timely precipitation over major producing regions such as Santa Fe, Entre Ríos, Santiago del Estero and areas to the north (up to 50 mm in total, but 10-30 mm below normal) was not enough to induce meaningful recovery of soil moisture. These regions have been showing near 5-year low soil moisture levels since August, with little chance to recover. On the other hand, relatively healthy moisture conditions remain in the southern half of the Pampas, showing a startling contrast. La Pampa and San Luis, for example, are still maintaining close-to-optimal soil moisture conditions, hinting a good early season yield outlook. Estimated yield potential for western Buenos Aires also remains mostly above trend, despite overall disappointing rainfall totals early in the planting season.

Soybean planting is 78% complete nationally according to the Ministry of Agriculture, largely on schedule compared to last year’s 81% and the 79% five-year average. Bolsa de Cereales in Buenos Aires also reported a progress of 73.3%, not too far off the expected pace. In Argentina early planting typically starts in late October and ends in December, but second crop soybean (otherwise known as double crop soybeans) planting can occur until January once wheat is harvested. Wheat planting is currently at 80%, near the 5-year average. Updated long-term outlooks from the Refinitiv’s Weather Research team indicate that moderate La Niña conditions will likely continue through much of Argentina’s prime growing season (January-March). La Niña conditions are most frequently associated with hot and dry weather in the main Pampas production region. Argentina’s very worst soy harvests occurred during La Niña events historically, including the latest one witnessed in the 2017/18 season.

2021/22 ARGENTINA CORN PRODUCTION: 52.3 [46.4–57.5] MILLION TONS, DOWN 1% FROM LAST UPDATE

Insufficient rainfall across key producing areas of the northern Pampas lowers 2021/22 Argentina corn production by 1% to 52.3 [46.4–57.5] million tons, despite decent planting progress so far. Our current estimate puts planted area at 7.3 million hectares, in line with the Bolsa de Cereales in Buenos Aires’ latest national-level projection, but well below 7.96 million hectares reported by Bolsa de Comercio in Rosario. In December’s WASDE (09 December), USDA placed Argentina corn production at 54.5 million tons, unchanged from last update. Bolsa de Cereales in Buenos Aires and Bolsa de Comercio in Rosario currently forecast production at 57 and 56 million tons, respectively.

Dryness largely continued throughout the Pampas over the past two weeks, despite a few scattered rain showers that fell across northern crop areas. Timely precipitation over major producing regions such as Santa Fe, Entre Ríos, Santiago del Estero and areas to the north (up to 50 mm in total, but 10-30 mm below normal) was not enough to induce meaningful recovery of soil moisture. These regions have been showing near 5-year low soil moisture levels since August, with little chance to recover. On the other hand, relatively healthy moisture conditions remain in the southern half of the Pampas, showing a startling contrast. La Pampa and San Luis, for example, are still maintaining close-to-optimal soil moisture conditions, hinting a good early season yield outlook. Estimated yield potential for western Buenos Aires also remains mostly above trend, despite overall disappointing rainfall totals early in the planting season.

Planalytics Lowers Brazil Soy Forecast to 3.52 Tons/Ha

Outlook for this year’s crop yield is marginally down from previous forecast of 3.53 tons/hectare, according to data issued by Planalytics on Wednesday.

  • Yield in key states versus previous Planalytics forecast (in tons/hectare):
    • Mato Grosso 3.62 vs 3.56
    • Parana 3.41 vs 3.58
    • Rio Grande do Sul 3.18 vs 3.29
    • Goias 3.73 vs 3.63

Planalytics Lowers Argentine Soy Crop Forecast to 2.89 Tons/Ha

Outlook for this year’s crop yield is down from previous forecast of 2.92 tons/hectare, according to data issued by Planalytics on Wednesday.

  • Yield in key provinces versus previous Planalytics forecast (in tons/hectare):
    • Buenos Aires 2.75 vs 2.79
    • Sante Fe 3.20 vs 3.24
    • Cordoba 3.20 vs 3.23

France’s Rouen Grain Exports Drop 49% in Week to Dec. 29: Port

Grain shipments from France’s Rouen port totaled 137,049 tons in the week to Dec. 29, compared with 270,293 tons a week earlier, according to an emailed report.

Russian Wheat-Export Tax to Rise to $98.20/Ton on Jan. 12-18

Russia’s wheat export customs duty will increase to $98.20/ton for the Jan. 12-18 period, from $94.90, according to the Agriculture Ministry’s website.

  • NOTE: The rates are set weekly and take effect three working days after publication, but the schedule has been changed due to Russian holidays from Dec. 31 to Jan. 9
  • NOTE: Russia started the floating tax from June 2, with a $28.10/ton levy; next week’s level will be the highest yet

2022/23 INDIA WHEAT PRODUCTION: 110 [101–115] MILLION TONS, unchanged from last season

Near normal temperatures and sufficient soil moisture maintain 2022/23 India wheat production at 110 [101-115] million tons, slightly above last year’s record. India wheat planting is near completion. The latest planting report released by India Ministry of Agriculture on 03 December indicates that India farmers sowed 20.1 million hectares of wheat as of the report date, compared to 19.3 million hectares for the same period last year, with fast sowings primarily in Madya Pradesh and Rajasthan.

Soil moisture is generally above normal and better than last year across the key wheat production areas. Temperatures over the past month were near average, with slightly warm anomalies this past week. Absence of extreme temperatures and beneficial soil moisture indicate high yield potential for India wheat production. Yield variations will primarily depend on weather conditions during the critical yield formation period. Should normal to cool temperatures prevail during January-March, wheat yield could be raised to a record high. Alternatively, hot temperatures, together with unseasonal rain during harvest, could cut yields substantially.

2.42 pc of 4,461 different edible oils samples found to be substandard: FSSAI

About 2.42 per cent of the 4,461 samples of different edible oils from 587 districts and four metros are found to be non-compliant with safety parameters, food safety regulator FSSAI said on Wednesday.

Releasing the findings of a nationwide survey conducted during August 25-27, 2020, the Food Safety and Standards Authority of India (FSSAI) said states have been asked to intensify the enforcement drives to prevent the adulteration in the oils.

The ministries of agriculture and food processing industries are being requested to integrate their efforts in eliminating the problem of contaminants through implementation of good agricultural practices and/or safe handling or processing techniques, it added.

“The results from this survey indicated that out of 4,461 picked samples, 2.42 per cent (108) samples were non-compliant on account of safety parameters, which included the presence of Aflatoxins, pesticide residues and heavy metals at levels higher than those prescribed by FSSR,” the regulator said in a statement.

In the quality category, FSSAI said about 24.2 per cent (1,080) samples were non-compliant with respect to the presence of hydrocyanic acid, and failure to meet the prescribed limits of Refractive Index, BR reading, fatty acid profile and iodine value, among others, across states and Union territories.

“Non-compliance in quality parameters indicates possible adulteration or blending with other oils or materials,” it said.

Turkey Production of Cereals, Other Crops Decline in 2021

Production of cereals and other crops in 2021 fell by 13.4% from the previous year, statistics office says in statement.

  • Vegetable production increased by 1.8% while output of fruits, beverage and spices crops rose by 5.4%
  • Wheat production fell by 13.9% to about 17.7m tons
  • Barley production dropped by 30.7% to about 5.8m tons
  • 61.7m tons of cereals and other crops, 31.8m tons of vegetables and 24.9m tons of fruits, beverage and spices crops were produced in 2021

Egypt to Start Talks on Food-Price Hedging With Citi by End-Jan.

Egypt to start negotiations by end of January with Citigroup over potential hedging against wheat and food-oil price increases, Supply Minister Aly El-Moselhy tells reporters.

Egypt Boosted Wheat Cultivation Area for 2022 Season: Minister

Wheat cultivation area increased by 60k feddan, sufficient to produce an extra 180k tons, Supply Minister Aly El-Moselhy tells reporters. Storage capacity boosted to 3.4m tons per year

Indonesia Considers Subsidizing Cooking Oil as Prices Rise

Indonesia considers subsidizing cooking oil sold in domestic market to help consumers cope with rising prices, said Musdhalifah Machmud, deputy for food and agriculture at the Coordinating Ministry for Economic Affairs, in Thursday briefing.

  • Govt may use funds collected from palm oil export levy by the Indonesia Oil Palm Plantations Fund Management Agency (BPDPKS)
  • Further discussions needed with related ministries on the best mechanism

Palm Oil to Trade in $1,000/Ton Range on Tight Supply: CPOPC

Palm oil will likely continue to trade in a bullish range of $1,000 a ton as production remain constrained by labor shortages in Malaysia and high fertilizer costs, according to the Council of Palm Oil Producing Countries.

  • “Indonesia and Malaysia may not be able to deliver much output growth in 2022,” the group said in a report Thursday
  • Higher costs of fertilizers and a “logistics bottleneck” may lead to oil palm planters cutting back on its application
  • Key factors to watch for 2022 include the pace at which foreign workers are allowed to return to Malaysia, impact of flooding at oil palm estates and omicron variant
  • While demand for oils and fats continue to grow due to expanding populations and higher disposable incomes, palm oil supply may not be increasing at the high growth rates seen in the past
  • Post-moratorium on new land expansion for oil palm cultivation in Indonesia, and a lack of arable land in Malaysia have limited production growth and will temporarily curb supply in coming years
  • However, price gains may be curbed by higher soybean oil output in Brazil and Argentina, unless adverse weather conditions and La Nina hurt crops

DEMAND OUTLOOK

  • Prices will “depend heavily” on biodiesel mandates in 2022
  • Indonesia’s B30 will be kept for 2022-2023 before green diesel is commercially available
  • Higher demand for soybean oil in the U.S. for biodiesel next year will underpin palm oil prices
  • India’s palm purchases to be spurred by recovery in its hotel and restaurants segment, as well as lower palm oil import duties
  • China’s palm oil consumption to increase in 2022 due to lower supply of rapeseed oil and soybean oil; the No. 2 buyer is expected to buy more palm products for animal feed
  • Exports to EU seen muted next year due to unattractive palm prices for biodiesel blending, and early implementation of renewable energy policies that will curb palm imports
  • NOTE: Council is intergovernmental body set up in 2015 by Indonesia and Malaysia to strengthen collaboration among palm cultivating countries; members make up ~90% of global production

LATAM CROP WEATHER: Brazil South Seen Getting Beneficial Rain

Southern Brazil, specially Parana and Santa Catarina states, will get beneficial precipitation next week, aiding soil moisture in soybean crops that have been suffering amid dryness, says Celso Oliveira, a meteorologist at Climatempo.

  • In Rio Grande do Sul state, in the far south, rain will fail to restore soil moisture
  • In north and central Brazil, ample rain will halt fieldwork and delay the harvest’s start in Mato Grosso
  • Reaping conditions are seen improving in the second half of January
  • In the northeast, there are some flooding concerns for about 10% to 15% of the soybean crop, according to the Commodity Weather Group

ARGENTINA SOY & CORN

  • Irregular rain seen in the nation’s central regions from Dec. 31 to Jan. 3, with the water deficit expected to reach half of the corn and soy belt in 11 to 15 days: Commodity Weather Group
  • High temperatures, in the 90s to 100s°F, are expected in the next two weeks

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