Global Ag News for Jan 7 22

TODAY – COMMITMENTS OF TRADERS

Wheat prices overnight are down 7 in SRW, down 11 in HRW, down 10 in HRS; Corn is down 2; Soybeans down 5; Soymeal down $0.25; Soyoil up 0.14.

For the week so far wheat prices are down 31 3/4 in SRW, down 44 in HRW, down 68 1/4 in HRS; Corn is up 8 1/2; Soybeans up 43 1/4; Soymeal up $0.94; Soyoil up 2.51.

Chinese Ag futures (MAY 22) Soybeans down 10 yuan ; Soymeal down 18; Soyoil up 30; Palm oil up 26; Corn down 12 — Malasyian Palm is up 8. Malaysian palm oil prices overnight were up 8 ringgit (+0.16%) at 4993.

There were no changes in registrations. Registration total: 1,900 SRW Wheat contracts; 25 Oats; 50 Corn; 573 Soybeans; 143 Soyoil; 0 Soymeal; 92 HRW Wheat.

Preliminary changes in futures Open Interest as of January 6 were: SRW Wheat up 9,505 contracts, HRW Wheat up 951, Corn up 91, Soybeans up 1,238, Soymeal up 1,405, Soyoil up 2,183.

Brazil Grains & Oilseeds Forecast: Rio Grande do Sul and Parana Forecast: Isolated showers north through Monday. Temperatures near normal through Monday. Mato Grosso, MGDS and southern Goias Forecast: Scattered showers through Monday. Temperatures near normal through Monday.

Argentina Grains & Oilseeds Forecast: Cordoba, Santa Fe, Northern Buenos Aires Forecast: Mostly dry through Monday. Temperatures near to below normal through Friday, near to above normal Saturday, above normal Sunday-Monday. La Pampa, Southern Buenos Aires Forecast: Mostly dry through Monday. Temperatures near to below normal through Friday, near to above normal Saturday, above normal Sunday-Monday.

The player sheet for Jan. 6 had funds: net sellers of 8,500 contracts of  SRW wheat, buyers of 1,500 corn, sellers of 3,000 soybeans, sellers of 3,500 soymeal, and  sellers of 1,500 soyoil.

TENDERS

  • SOYBEAN SALE: The U.S. Department of Agriculture confirmed private sales of 102,000 tonnes of U.S. soybeans to Mexico for delivery in the 2021/22 marketing year that began Sept. 1, 2021.

PENDING TENDERS

  • 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
  • RICE TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of rice

Argentina Soy Area May Get Trimmed on Dryness, Bourse Says

Dryness and heat are delaying field work, and if it doesn’t rain in the coming days and weeks the window will shut for planting soybeans, the Buenos Aires Grain Exchange says in its weekly crop report.

  • Soy area forecast kept for now at 16.5m hectares (40.8m acres)
  • Rains also needed to stem yield losses for the early corn crop and to complete planting of late corn
  • Wheat production forecast jumps 1.4% to 21.8m metric tons thanks to better-than-expected yields in the bread basket region of southern Buenos Aires province; harvest 99% complete

Argentine Soy, Corn, Wheat Estimates Jan. 6: Exchange 

The Buenos Aires Grain Exchange releases weekly report on website.

  • 2021-22 Wheat production est. raised to 21.8m tons vs 21.5m
    • Harvest 99.3% complete
  • Soybean and corn planting area estimates maintained

La Nina Halts Brazil Soy Record as Analysts Slash Forecasts

  • Production expected to fall from last year’s high on drought
  • Far south of Brazil and Argentina may see additional losses

Crop forecasters have slashed their estimates for Brazil’s soy output as persistent drought and heat caused losses in the nation’s south. Production is now seen below last year’s level, when the South American nation reaped 137.3 million tons. The harvest could have reached as much as 145 million tons this season, according to initial forecasts.

Heat and dry conditions were intense in December in Brazil’s south, a region accounting for about a third of the nation’s crop. That led brokerage StoneX to cut its production estimate by 7.7% to 134 million tons earlier this week. On Thursday, the local consultancy AgRural said output may be even lower at 133.4 million tons.

While losses in Parana are consolidated as the crop is at a more advanced stage, yields in Rio Grande do Sul, which has a late planting, also had a big cut as adverse weather shortened the plant cycle in several areas, it said.

“Rain and lower temperatures are necessary right away to avoid more losses in the state,” AgRural said in its report. In other regions, the crop is developing well and high yields are expected in the top-growing state Mato Grosso, where reaping has started.

Lack of rain and extreme heat in southern Brazil are conditions caused by the La Nina phenomenon, which is hitting the nation’s agriculture for the second year in a row. Argentina, also a major supplier of the oilseed, faces a similar weather pattern, with moisture deficits reaching at least 75% of the nation’s soy next week, according to the Commodity Weather Group.

While soybeans in some corners of Argentina’s Pampas growing belt could perform well thanks to rains at the end of 2021, vast swaths of farmland have already been hit by the drought, seriously crimping early plant development, Esteban Copati, chief estimates analyst at the Buenos Aires Grain Exchange, said in an interview.

If the forecast for more dryness is correct, the bourse’s pre-season forecast of 44 million metric tons would nosedive. At the same time, if surprise rains fall in the second half of January — which happened last season — that could rescue yields, Copati said.

Top Palm Oil Buyer India to Cut Imports on Scorching Price Rally

Palm oil purchases by biggest importer India may slump 23% in January from a year ago as high prices prompt refiners and traders to cut buying, according to veteran trader G.G. Patel. Soybean oil imports may jump.

The tropical oil’s inbound shipments may not exceed 600,000 tons this month, said Patel, managing partner of GGN Research. That compares with 780,741 tons last year and an estimated 575,000 tons India bought in December.

Weaker shipments to India from top growers Indonesia and Malaysia may potentially put pressure on palm oil, which traded around 5,000 ringgit ($1,189) per ton on Friday and headed for its biggest weekly gain since October. Futures have been rallying on supply concerns as heavy rains and floods threaten supplies in Malaysia.

“There is a disparity between domestic and global prices and that will decrease demand from the importers,” Patel said by phone. Local rates are about 3,000 rupees ($40) a ton cheaper than global levels, he said.

Meanwhile, India’s soybean oil imports will likely stay strong as the soft oil has become less expensive to palm oil, with the price gap shrinking more than 80% from a record in the middle of this year, Patel said.

The country’s soybean oil imports may total 350,000 tons to 400,000 tons in January, compared with just 88,667 tons a year earlier and 398,000 tons estimated for last month, according to Patel. Sunflower oil purchases may total 250,000 tons, compared with 205,227 tons a year ago and an estimated 252,000 tons in December, he said.

Brazil unable to unload wheat imports due to tax collectors’ protest

Brazil has been unable to promptly unload wheat shipments at its key port in Santos as agricultural tax collectors protest as part of a campaign for higher wages, local association Abitrigo said on Thursday.

Abitrigo’s head Rubens Barbosa told Reuters that two vessels carrying imported wheat had their unloading operations delayed due to the work-to-rule effort.

One of the vessels was unloaded but the shipment was not yet cleared by officials, he said, while the other one needs to wait for these procedures to be concluded so it can discharge.

Brazil is one of the world’s largest wheat importers, buying its cereal mainly from Argentina. Brazil, however, has just finished harvesting a record wheat crop and is also exporting large amounts of the commodity.

Neither the full impact of the delays nor which companies were affected was immediately clear. Abitrigo said Brazil’s Agriculture Ministry is working to resolve the issue.

“If needed, measures to secure the normalcy of affected services will be adopted,” it said in a statement, without providing details.

Local association ABPA, which represents poultry and pork exporters, did not report a specific issue, but told Reuters it believes the work-to-rule situation will be “rapidly solved”, saying tax auditors will understand the need for regular trade flow to continue.

Anec, an association representing grain exporters, and coffee industry group Cecafe said soybean, corn and coffee exports were not affected so far.

Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.

ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.                  

A subsidiary of Archer Daniels Midland Company.

© 2021 ADM Investor Services International Limited.

Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

Latest News & Market Commentary

Explore the latest edition of The Ghost in the Machine

Explore Now