TODAY – US TRADE DATA
Wheat prices overnight are down 1 1/2 in SRW, up 1 1/2 in HRW, up 2 3/4 in HRS; Corn is up 1/2; Soybeans down 2 1/4; Soymeal down $0.12; Soyoil up 0.52.
For the week so far wheat prices are up 4 1/2 in SRW, up 2 1/4 in HRW, up 12 3/4 in HRS; Corn is up 1 3/4; Soybeans down 2; Soymeal down $0.53; Soyoil up 1.36. For the month to date wheat prices are up 17 1/2 in SRW, up 1 3/4 in HRW, up 20 1/2 in HRS; Corn is up 16 1/2; Soybeans up 42; Soymeal up $8.60; Soyoil up 2.68.
Chinese Ag futures (MAY 22) Soybeans up 38 yuan ; Soymeal down 36; Soyoil up 58; Palm oil up 56; Corn down 5 — Malasyian Palm is up 179. Malaysian palm oil prices overnight were up 179 ringgit (+3.77%) at 4929.
There were changes in registrations (-11 Soybeans). Registration total: 1,861 SRW Wheat contracts; 100 Oats; 2 Corn; 266 Soybeans; 233 Soyoil; 1 Soymeal; 108 HRW Wheat.
Preliminary changes in futures Open Interest as of December 6 were: SRW Wheat down 2,092 contracts, HRW Wheat up 1,922, Corn up 8,733, Soybeans up 693, Soymeal down 564, Soyoil up 445.
Brazil Grains & Oilseeds Forecast: Rio Grande do Sul and Parana Forecast: Isolated showers Monday-Tuesday. Mostly dry Wednesday-Friday. Temperatures near normal Monday, near to below normal Tuesday-Thursday, near to above normal Friday. Mato Grosso, MGDS and southern Goias Forecast: Scattered showers through Friday, mostly north. Temperatures near normal through Friday.
Argentina Grains & Oilseeds Forecast: Cordoba, Santa Fe, Northern Buenos Aires Forecast: Mostly dry Monday-Tuesday. Isolated showers west Wednesday-Thursday. Isolated showers Friday. Temperatures near to below normal Monday, near to above normal Tuesday-Wednesday, near to below normal Thursday-Friday. La Pampa, Southern Buenos Aires Forecast: Mostly dry Monday-Tuesday. Isolated showers Wednesday-Friday. Temperatures near to below normal Monday, near to above normal Tuesday-Wednesday, near to below normal Thursday-Friday.
The player sheet for Dec. 6 had funds: net buyers of 2,000 contracts of SRW wheat, sellers of 4,000 corn, buyers of 5,500 soybeans, sellers of 7,000 soymeal, and buyers of 3,000 soyoil.
TENDERS
- WHEAT PURCHASE: Saudi Arabia’s main state wheat buying agency the Saudi Grains Organization (SAGO) purchased an estimated 689,000 tonnes of wheat in an international tender, SAGO said, confirming reports from traders. The tender closed on Friday with the agency seeking wheat with 12.5% protein content. The wheat was bought at an average price of $365.14 a tonne c&f, SAGO said.
- SOYBEAN SALE: The U.S. Department of Agriculture confirmed private sales of 130,000 tonnes of U.S. soybeans to China 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
- BARLEY TENDER: Jordan’s state grains buyer issued a new international tender to purchase 120,000 tonnes of animal feed barley
- CORN SALE: Taiwan’s MFIG purchasing group bought about 130,000 tonnes of animal feed corn to expected to be sourced from Argentina in an international tender which closed on Tuesday
PENDING TENDERS
- WHEAT TENDER: An Ethiopian government agency issued an international tender to buy about 400,000 tonnes of milling wheat
- WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of milling wheat
China Nov. Soybean Imports 8.57m Tons: Customs
General Administration of Customs says on website.
- Soybean imports YTD fell 5.5% y/y to 87.653m tons
- Edible vegetable oil imports in Nov. 673,000 tons
- Edible vegetable oil imports YTD rose 1.6% y/y to 9.573m tons
- Meat (including offal) imports in Nov. 677,000 tons
- Meat (including offal) imports YTD fell 2.5% y/y to 8.724m tons
U.S.-China Trade Deal Should Be Extended, Improved: Branstad
It’s “critically important” for the U.S.-China trade deal to be extended and improved upon, Terry Branstad, former U.S. ambassador to China and former longtime Iowa governor, says Monday at a farmer conference in Chicago.
- “Although it’s not perfect,” the deal has been beneficial to American farmers: Branstad
- Under the deal signed early in 2020 just before the coronavirus outbreak, Chinese buyers have purchased record amounts of U.S. corn, soybeans, pork and beef
Mississippi River closed near Rosedale after barges run aground
Vessel traffic was halted on a seven-mile (11-kilometer) stretch of the Mississippi River around Rosedale, Mississippi, on Monday after several barges being pushed by a southbound tow ran aground on Friday, a U.S. Coast Guard spokesperson said.
The barges carrying dry cargo had been recovered as of Monday but a waterway restriction was in effect between mile markers 590 and 597 while dredging continued, the Coast Guard said.
Barge operators were hopeful that southbound river traffic might resume later on Monday and northbound traffic on Tuesday, one barge source said, during the peak U.S. soy export season.
The Mississippi River is the primary U.S. artery for shipping grains and soy by barge from the Midwest crop belt to export terminals at the U.S. Gulf.
EPA Proposal to Extend RFS Deadlines Elicits Protests
The EPA’s latest proposal to extend the deadlines for compliance dates under the Renewable Fuel Standard program has sparked some protests from groups representing the renewable fuels sector. “What we see is an admission that EPA will miss the statutory deadlines going forward, while making it easier to do so,” says Kate Shenk of the National Biodiesel Board. “EPA is acting as if there is no statutory deadline for promulgating annual rules.” Grains traders were looking for the EPA to release its new rules last week, and the lack of any new rules being released put pressure on corn and soybean futures. Both CBOT contracts are down again today, with corn down 0.9% and soybeans down 0.6%.
French Winter-Grain Area Down 0.4% Y/y, Rapeseed Rises: Ministry
French farmers are seen planting 6.8m hectares of winter-grain crops for the 2022 season, the country’s agriculture ministry said Tuesday on its website.
- That’s down 0.4% from last year, but 1.6% above the five-year average
- Winter rapeseed area seen at 1.1m hecatres, up “significantly” from a year earlier
- The 2021 soft-wheat harvest is estimated at 35.4m tons, versus a November estimate for 35.5m tons
- Corn-crop estimate raised to 15.4m tons, from 14.8m tons, as more area was shifted from forage to grain
- The sugar-beet harvest is seen at 34.5m tons, versus a previous estimate of 34.1m tons
Turkish Farmers Shun Wheat as Fertilizer Prices Soar, Dunya Says
Turkey may produce significantly less wheat next year after surging prices cut the use of fertilizers and pushed farmers to grow other crops, Dunya newspaper reported.
Many growers are switching to lentils or chickpeas as they require less fertilizer, the newspaper reported, citing farmers and agricultural organizations. In Diyarbakir and Mardin provinces, fertilizer use has been cut by as much as half after prices rose more than fivefold over the past year, Dunya said.
Turkey, one of the world’s largest importers of the grain, typically plants its winter-wheat crop in October and November.
Higher food prices are fueling inflation, while wheat production is expected to fall by 14% to 17.7 million tons this year, according to an October estimate by the Turkish Statistical Institute. Global trade of the staple grain will climb to a record this season, buoyed by an import frenzy in the Middle East, the United Nations said last month.
Ukraine’s Wheat Exports Rose 21% Y/y as of Dec. 6: Ministry
Ukraine exported 14.6m tons of wheat as of Dec. 6, a 21% y/y gain, the Agriculture Ministry said on its website.
- Barley exports rose 34% y/y to about 5m tons
- Total grain exports advanced by 17% y/y to 26m tons
CN Rail Reopens Tracks Near Vancouver After Rainstorm Repairs
Canadian National Railway Co. train movement has resumed on its Kamloops-to-Vancouver corridor in western Canada, co. says. CN Rail crews will continue to monitor both the rail infrastructure and terrain over the coming weeks, co. says in emailed statement
Brazil 2021-22 Soy Planting 94% Done as of Dec. 2: AgRural
Compares with 90% a week earlier, and also a year before, AgRural says in emailed report.
- Dry weather in Brazil’s Southern region threatens the growth of newly-planted crop, AgRural says
- Summer corn is 94% planted in Brazil’s Center-South, compared to 96% a year earlier
Brazilian Fertilizer Market in Gridlock Over Inflated Prices
Volatile fertilizer prices are dragging out negotiations, which may force sellers to halt price increases in the week ahead. Phosphate in particular maintained an upward trend vs. last week’s references after U.S. ammonia rose sharply in response to strong demand. Nitrogen markets stabilized this week, yet India’s upcoming new tenders could pressure Urea prices in late 4Q or 1Q. The only signs of softening in prices came in Brazil’s southern regions, where they dipped from peaks as farmers balk and producers rush to sell before safrinha planting starts
As high prices and tight supply worry the market and slow dealmaking, fertilizer companies such as Mosaic and Nutrien are launching productivity-boosting initiatives throughout Brazil. These aim to help alleviate supply fears in the new year.
WHEAT/CEPEA: End of the year and wheat devaluations abroad reduce liquidity in BR
The number of deals closed in the Brazilian wheat market is beginning to decrease, largely because of the nearness of the holiday season, when many national mills reduce or halt activities. Besides, the steep price drops for wheat abroad also drove some agents away from the domestic market.
In general, wheat supply is considered satisfactory in Brazil, since the harvesting has ended, and high volumes are being imported. As for prices, the US dollar and the import parity are underpinning wheat values in the national market.
According to Secex, in November, Brazil imported 381.036 thousand tons of wheat, 26.4% down from that in October, but 23.3% up from that in Nov/20. Of the total volume imported last month, 96.2% came from Argentina, and 3.8%, from Paraguay.
Import value averaged USD 282.52/ton FOB origin, 1.9% higher than that in October and 25.3% up from that a year before (USD 225.41/ton). Considering the average of the US dollar in Nov/21, at BRL 5.559, the average import cost last month closed at BRL 1,570.52/ton FOB, 28% up from that in Nov/20.
In the Brazilian market, Cepea surveys show that, between Nov. 26 and Dec. 3, the prices paid to wheat farmers rose by 0.68% in Rio Grande do Sul, 0.55% in Paraná, and 0.23% in Santa Catarina. In the wholesale market (deals between processors), values increased by 1.19% in Rio Grande do Sul, 0.49% in Santa Catarina, 0.41% in Paraná and 0.19% in São Paulo. In the same period, the US dollar rose by 1.37% against the Real, to BRL 5.677 on Friday, 3.
Based on data from Conab (Brazil’s National Company for Food Supply), between November 22 and 29, the import parity price for the wheat from Argentina delivered to Paraná State was USD 329.24/ton. Considering the average of the US dollar in that period, at BRL 5.598, the wheat imported was sold at BRL 1,843.05/ton, while for the Brazilian wheat traded in Paraná, the average was lower, at BRL 1,620.71/ton, according to data from Cepea. In Rio Grande do Sul, the import parity for the product from Argentina would be of USD 308.93/ton (BRL 1,729.36/ton), against BRL 1,497.86/ton on the average of the state surveyed by Cepea.
CROPS – Data from Conab show that, by Nov. 27, 98% of the national wheat crop had been harvested in Brazil, a weekly advance of 6.3 percentage points. Activities are taking place in Paraná (99%), Rio Grande do Sul (97%) and Santa Catarina (93.7%).
Brazil eyes $1.17 trillion halal food market, keen to boost its share in trade
Brazil, the world’s largest exporter of foodstuffs like coffee and soybeans, is keen to increase farm product exports to Islamic countries, said Flavio Bettarello, deputy trade secretary at the Agriculture Ministry.
Speaking at a business conference in Sao Paulo on Monday, Bettarello said Brazil is in talks with Indonesia, Lebanon and Morocco to access their markets and sell agricultural products other than corn, beef, chicken and raw sugar.
“There is a concern relative to the types of products exported and the destinations,” Bettarello said.
The Organization of Islamic Cooperation (OIC), which comprises 57 members, imported $190.5 billion of food items including wheat, corn, sugar, rice, milk and dairy products in 2020, according to data compiled by the Arab Brazil Chamber of Commerce. Of that, Brazil accounted for $14.1 billion or some 7.5%, the data showed.
Bettarello said only five OIC nations get about 50% of Brazil’s agricultural exports, citing Turkey, Iran, Indonesia, Saudi Arabia and Bangladesh as the biggest importers of the group.
“China is our main trade partner and our share in the Chinese market is 21%,” he said referring to food exports. “We know there is room for us to expand our participation in OIC countries and the Islamic world.”
The government’s desire to negotiate reflects Brazil’s quest for a bigger share of the global food trade.
The country is already the world’s biggest exporter and producer of halal meats including beef and chicken, which are made according to Muslim dietary requirements. Brazil’s exports of halal beef and chicken totaled a combined $4.7 billion last year, according to government data compiled by industry groups Abiec and ABPA.
Muslims spent an estimated $1.17 trillion to buy food in 2019, according to the State of the Global Islamic Economy Report. By 2024, Muslims are projected to spend $1.38 trillion on food, the report said.
Malaysia Sees $3.4B in Losses Due to Palm Oil Worker Shortage
Malaysia, the world’s second-biggest palm oil grower, estimates its plantation sector will lose about 14.48 billion ringgit ($3.4 billion) this year due to a severe shortage of workers.
- That compares with just 9.27 billion ringgit in 2020 and 5.94 billion in 2019, Plantation Industries and Commodities Minister Zuraida Kamaruddin said in parliament Tuesday
- The projected losses are based on fresh fruit bunches that were not harvested due to the lack of fruit pickers and harvesters, and assumption of average crude palm oil prices at 4,555 ringgit a ton, she said
- As of August, the shortage of harvesters and fruit pickers stood at 25,471, resulting in an average of 15.9 million tons of fresh fruit bunches that are not harvested in a year. At an oil extraction rate of about 20%, that translates to a loss of about 3.18 million tons of potential crude palm oil supply
- The Malaysian Palm Oil Association, a growers group, estimated in October that the industry will lose 20%-30% of production this year and will miss out on about 20 billion ringgit in revenue, or about double the amount last year
- To prevent these losses from climbing further, the ministry is working toward bringing in foreign workers into Malaysia, Zuraida said. The government is also encouraging industry players to adopt mechanization and reduce reliance on manual labor
Top Grower Australia Says Global Wheat Prices Will Keep Climbing
Global wheat prices look set to push higher as supplies of the high-grade variety in key breadbaskets are extremely scarce, according to the Australian government forecaster, who added to warnings about quality issues in the nation’s crop.
Heavy rainfall and flooding in parts of Australia’s east coast will delay harvests and result in some crop losses. The larger impact will be on grain quality, with a higher-than-usual proportion of the crop being lower-value feed-grade wheat, the Australian Bureau of Agricultural and Resource Economics and Sciences said.
“Continued high rainfall in December will cause further damage and more total crop losses if crops cannot be harvested,” Abares said in its outlook report.
Prolonged poor conditions in Canada, the U.S. and Russia have led to very tight global supplies of high-protein milling wheat. “Any significant downgrading of the quality profile of the Australian harvest due to wet weather is likely to push world prices for high-protein wheat even higher,” it added.
Australia experienced its wettest November on record in 122 years. The rains have also bogged down machinery just as growers head into what should be peak harvest season across many areas in Queensland and New South Wales. As the full extent of the damage is still being assessed, the figure could top A$1 billion ($703 million), according to the NSW Department of Primary Industries.
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