Global Ag News for Apr 25.22

TODAY – U.S. Cattle on Feed Rose to 12.11M Head on April 1

Wheat prices overnight are up 5 1/4 in SRW, up 9 in HRW, up 6 3/4 in HRS; Corn is down 3; Soybeans down 21 1/2; Soymeal down $0.54; Soyoil down 0.91.

Markets finished last week with wheat prices down 47 3/4 in SRW, down 30 1/2 in HRW, down 8 1/2 in HRS; Corn is down 21; Soybeans down 26 1/4; Soymeal down $1.35; Soyoil up 1.51.

For the month to date wheat prices are up 78 1/2 in SRW, up 128 3/4 in HRW, up 92 3/4 in HRS; Corn is up 53; Soybeans up 68 1/2; Soymeal down $12.70; Soyoil up 10.96.

Year-To-Date nearby futures are up 39% in SRW, up 44% in HRW, up 19% in HRS; Corn is up 33%; Soybeans up 28%; Soymeal up 10%; Soyoil up 46%.

Chinese Ag futures (SEP 22) Soybeans up 13 yuan; Soymeal down 77; Soyoil up 204; Palm oil up 386; Corn down 19 — Malaysian palm oil prices overnight were down 100 ringgit (-1.57%) at 6255.

There were no changes in registrations. Registration total: 2,185 SRW Wheat contracts; 1 Oats; 0 Corn; 99 Soybeans; 98 Soyoil; 0 Soymeal; 154 HRW Wheat.

Preliminary changes in futures Open Interest as of April 22 were: SRW Wheat down 2,578 contracts, HRW Wheat down 933, Corn down 32,315, Soybeans down 12,896, Soymeal down 6,487, Soyoil down 3,722.

Northern Plains Forecast: Mostly dry Monday. Isolated showers Tuesday. Temperatures below to well below normal Monday-Tuesday.

Central/Southern Plains Forecast: Scattered showers south Monday. Mostly dry Tuesday. Isolated to scattered showers Wednesday-Friday. Temperatures below normal Monday-Tuesday, near to above normal Wednesday-Friday. 6 to 10 day outlook: Mostly dry Saturday. Isolated showers Sunday-Wednesday. Temperatures near to above normal Saturday, below normal north and above normal south Sunday-Monday, near to above normal Tuesday-Wednesday.

Western Midwest Forecast: Mostly dry through Wednesday. Isolated to scattered showers Thursday-Friday. Temperatures below to well below normal Monday-Tuesday, near to below normal Wednesday-Friday.

Eastern Midwest Forecast: Scattered showers Monday. Mostly dry Tuesday-Friday. Temperatures near to above normal Monday, below to well below normal Tuesday-Friday. 6 to 10 day outlook: Scattered showers Saturday-Wednesday. Temperatures near to below normal Saturday-Wednesday.

Canadian Prairies Forecast:  Mostly dry Monday. Isolated showers west Tuesday-Wednesday. Temperatures near to above normal west and well below normal east Monday-Tuesday, below to well below normal Wednesday. Mostly dry Thursday. Scattered showers Friday. Temperatures below to well below normal Thursday-Friday. 6-10 Day Outlook: Scattered showers Saturday-Wednesday. Temperatures below to well below normal Saturday-Monday, near to above normal west and below normal east Tuesday-Wednesday.

 Brazil Grains & Oilseeds Forecast: Rio Grande do Sul and Parana: Scattered showers through Friday, mostly south. Temperatures above normal through Friday. Mato Grosso, MGDS and southern Goias: Mostly dry through Friday. Temperatures above normal through Friday.

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

The player sheet for 4/22 had funds: net sellers of 2,000 contracts of  SRW wheat, sellers of 5,500 corn, sellers of 14,500 soybeans, sellers of 8,500 soymeal, and  buyers of 4,500 soyoil.

TENDERS

• CORN SALE: U.S. exporters sold 1.347 million tonnes of corn for delivery to China – 735,000 tonnes for the 2021/2022 marketing year and 612,000 tonnes during the 2022/2023 marketing year, according to the U.S. Department of Agriculture.
• CORN SALE: U.S. exporters sold 281,000 tonnes of corn for delivery to Mexico – 90,200 tonnes for delivery during the 2021/2022 marketing year and 190,800 tonnes for the 2022/2023 marketing year, the USDA said.
• SOYBEAN SALE: U.S. exporters sold 144,000 tonnes of soybeans for delivery to Mexico – 48,000 tonnes for delivery during the 2021/2022 marketing year and 96,000 tonnes during the 2022/2023 marketing year, the USDA said.

PENDING TENDERS

• WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of milling wheat
• SOYMEAL TENDER: Leading South Korean animal feed maker Nonghyup Feed Inc. (NOFI) has issued an international tender to purchase up to 60,000 tonnes of soymeal
• FEED BARLEY TENDER: Jordan’s state grains buyer issued a new international tender to purchase 120,000 tonnes of animal feed barley
• 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

Ukraine’s Corn Areas Seen Shrinking 31% Y/Y in 2022: UCAB

Ukraine’s farmers are expected to cut sowing areas under corn, spring barley and sunflowers this year as the Russian invasion takes a toll on the country’s agriculture sector, according to estimates from Ukraine’s Club of Agrarian Business.

• Areas under corn are seen at 3.8m ha, down 31% from last year
• Areas under spring barley are seen at 906,000 ha, down 32% y/y
• Areas under sunflower are seen at 4.7m ha, down by 28% y/y
• Areas under soybean are seen at 1.4m ha, up 12% from 2021
• Sowing hampered by war impacts including “destruction of the material base of agricultural producers, the theft of agricultural machinery by the Russian occupiers, mines in fields and roads, remnants of shells, mines and equipment in the fields”
• Farmers to reduce planting areas under corn due to higher sowing costs
• Outlook for total area under spring crops raised by 5% from previous estimate to 13.9m ha, as northern areas became available for planting after Russian troops pulled back

EU Rapeseed Output to Post Small Increase in 2022-23: USDA FAS

Rapeseed production seen at 17.6m tons in the 2022-23 season, versus 17.2m tons the prior year, USDA’s Foreign Agricultural Service says in a report.

• “Though acreage increased by a higher percentage, forecast is based on lower yields since prices for fertilizer are skyrocketing and rapeseed is a relatively fertilizer intensive crop”
• Imports to drop to 5m tons, from 5.2m tons, as war curtails shipments from Ukraine

Indonesia Palm Oil Group to Comply With Government’s Export Ban

The Indonesian Palm Oil Association respects the government’s decision to ban exports of cooking oil and associated raw materials and will follow the policy while monitoring its impact on the industry, spokesman Tofan Mahdi said in a statement late Friday.

If the policy negatively impacts the sustainability of the industry, the association will ask the government to re-evaluate

Indonesia’s Export Ban Excludes Crude Palm Oil, RBD Palm Oil

Indonesia, the world’s biggest palm oil producer, will only halt exports of bulk and packaged refined, bleached and deodorized palm olein, according to people familiar with the matter.

Exports of crude palm oil and RBD palm oil are still allowed, said the people, who asked not to be named as the government regulation hasn’t been published

INDONESIA MAY LIFT PALM OIL EXPORT BAN IN ONE OR TWO MONTHS

Indonesia’s palm oil export ban is expected to be lifted in one or two months, Maybank Investment Bank Bhd (Maybank IB) said.

“Once the Indonesian President is satisfied (that) there is sufficient cooking oil to serve the masses, the export ban will be lifted,” the investment bank said in note today.

Last Friday, Joko Widodo announced Indonesia will ban palm oil exports from April 28, 2022 until further notice to ensure the fulfilment of domestic needs.

According to Maybank IB, the anticipated problem faced by growers and refiners will be insufficient storage capacity if the export ban is not lifted quickly.

The mills also cannot purchase fresh fruit bunches especially from the smallholders.

In fact, palm oil has a short shelf life once processed into crude palm oil, unlike oilseeds which can be kept for a year or two without losing too much quality.

Maybank IB said, currently, there are short-term negative knee-jerk reactions to plantation stocks with a relatively bigger presence in Indonesia, while Malaysia-centric planters will be the prime beneficiaries.

The futures prices on Bursa Malaysia Derivatives may also correct sharply when the export ban is lifted as Indonesia’s palm oil flood the global market amid the second-half seasonal harvest.

SOYBEAN/CEPEA: Firm demand for soy oil worldwide underpins soybean prices

Soy oil prices are still rising in both Brazil and the United States, reflecting the high world demand. Despite the end of truckers’ strike in Argentina, the country is expected to produce a lower volume of soybean by-products this season because of the lower supply of soybean. Besides, higher exports of soybean and soybean products from Argentina added to the lower world supply of palm and sunflower oils are raising the demand for soy oil in the USA and in BR, and this scenario is boosting soybean prices in both countries.

At CME Group, the May/22 contract for soy oil rose by a staggering 4.3% between April 13 and 21, to USD 0.8150/pound (USD 1,796.75/ton) on April 21, the highest since March 11, 2022, and the second highest in the series of CME Group.

Despite international valuations, the export premium for soy oil has resumed rising in the Brazilian market. It is important to highlight that, amid difficulties to purchase this by-product, national consumers have been buying batches at higher prices than the export parity.

Based on the port of Paranaguá (PR), the export parity price for soy oil is at BRL 8,816.92/ton for shipment in May/22 (zero taxes). On the other hand, in the spot market, the average price for soy oil (São Paulo, with 12% ICMS) closed at BRL 9,222.28/ton on April 20, 1.6% higher than that on Wednesday, 13.

SOYBEAN – With the higher demand foy its by-products, soybean prices are on the rise too. However, in Brazil, the dollar depreciation against the Real constrained higher valuations – between April 13 and 20, the American currency decreased by 1.3%, closing at BRL 4.6250 on Wednesday, 20.

In the same period, the ESALQ/BM&FBovespa Index Paranaguá and the CEPEA/ESALQ Index Paraná rose by 1.6% and 2.1%, respectively, closing at BRL 186.67 (USD 40.36) and BRL 182.71 (USD 39.51) per 60-kilo bag on Wednesday, April 20. On the average of the regions surveyed by Cepea, prices increased by 2.1% in the over-the-counter market (paid to farmers) and by 2.5% in the wholesale market (deals between processors).

Agents from Brazilian processing plants were more interested in purchasing soybean in the last days, which raised domestic liquidity. However, some farmers stayed away from the market, opting for stocking the beans rather than selling them in the spot market.

CROPS – The soybean harvesting is ending in Brazil – in central-western and southeastern Brazil, activities are already over. In the southern region of the country, lower rainfall allowed the harvesting to continue. According to Conab, 87.1% of the soybean crops sown in Brazil had been harvested by April 16, less than the 89.9% harvested in the same period last season.

CORN/CEPEA: International valuations push up prices in some Brazilian regions

Although corn prices continued to drop in some Brazilian regions this week, in some other areas/, values reacted slightly, majorly in typical corn-consuming regions. Valuations were influenced by the future contracts at CME Group, which hit the highest levels in the last 10 years, surpassing USD 8/bushel in some periods, level last registered in 2012. This scenario heartened Brazilian corn farmers, which resumed limiting supply.

In Brazil, corn prices were fading steeply since early April, pressed down by the disinterest of purchasers and the necessity of some sellers to trade the cereal, due to the progress of the summer crop harvesting and the good expectations for the second crop – official estimates indicate a record output.

However, this week, prices reacted. Between April 14 and 20, the ESALQ/BM&FBovespa Index for corn (Campinas, SP) rose by 0.7%, to BRL 87.87 (USD 19.00) per 60-kilo bag on Wednesday, 20. On the average of the regions surveyed by Cepea, corn prices increased by 1.2% in the over-the-counter market (paid to farmers) but dropped by 0.7% in the wholesale market (deals between processors).

PORTS – Despite international valuations, low demand for prompt-delivery and the dollar depreciation against the Real this week pressed down corn prices at Brazilian ports. Still, quotations have been higher than that in the interior of the country.

Between April 14 and 20, the American currency decreased by 1.4% compared to the Real, closing at BRL 4.625 on Wednesday, 20. At the ports of Santos (SP) and Paranaguá (PR), values dropped by 0.8% and 0.95%, respectively, to BRL 89.14 and BRL 89.00/bag.

CROPS – In Brazil, the weather has been favoring the second crop of corn, however, cold fronts are forecast for the coming weeks, concerning farmers.

In Paraná, 97% of corn crops were in good conditions by April 18, and 3% were in average conditions. According to Conab, by April 16, 99.8% of the second crop had been sown.

As for the summer crop, the harvesting has been slow, and according to Conab, 60% of the national area had been harvested by April 16. In Rio Grande do Sul, activities have been slow too. According to Emater/RS, by April 21, 82% of the crops had been harvested.

USDA reports many flour millers ceasing operations in Kazakhstan

The Foreign Agricultural Service of the US Department of Agriculture (USDA) has reported that many flour millers in Kazakhstan have ceased operations due to a lack of wheat imports from Russia.

Partly to address the shortage of imports, the Kazakh government introduced wheat and wheat flour restrictions from April 15 to June 15 that allow Kazakh producers to export only up to 1mn tonnes of wheat and 300,000 tonnes of flour. Exporters are required to sell 10% of their export volume to the domestic market at a fixed price.

The Ministry of Agriculture said the restrictions were meant to balance exports with domestic food security needs, but domestic flour millers have nevertheless been affected by Russia ceasing to export wheat to Eurasian Economic Union (EEU) countries.

Fertilizer Prices Diverge at Equator on Tighter 3Q Supply Views

U.S. fertilizer prices were mixed as cold, wet weather delays fieldwork and farmers pull back on expensive inputs. In Brazil, prices were down slightly for urea and phosphates, but concerns remain about a 2H potash shortage with Russia and Belarus exports sanctioned. India re-entered the market with a small urea tender, but a larger one is expected soon.

Tampa Ammonia Falls, Urea Pressured in Friday Findings

U.S. inland ammonia prices were firm-to-higher as the industry waits for weather conditions to clear and for spring applications to shift into high gear. The Tampa ammonia contract for May fell to $1,425 a metric ton cost-and-freight, however, down $200 from April as news circulated of Incitec Pivot’s Waggaman, Louisiana, ammonia plant returning to production and more European plants restarting amid lower natural gas prices. India finally called a small urea tender, but the move failed to stem sliding urea prices in New Orleans, Brazil and the U.S. Midwest, where wet weather continued to delay spring fieldwork.

Potash and phosphate prices were mostly unchanged in the U.S., though concerns about Russian sanctions and limited imports pushed prices higher in Eastern Canada for most fertilizer products.

Malaysia’s palm oil board urges countries to reconsider food versus fuel priorities

Malaysia’s palm oil board on Monday said it is time for countries to reconsider their food versus fuel priorities, as Indonesia’s decision to ban palm oil exports has ignited a “crisis” of global edible oil shortage.

“It’s very important for countries to ensure available oils and fats are used for food and…temporarily stop or reduce their biodiesel mandates,” director general of the Malaysian Palm Oil Board (MPOB) Ahmad Parveez Ghulam Kadir told Reuters.

Palm oil, the most widely used edible oil, is also used as biodiesel feedstock.

Malaysia is the world’s second largest producer of palm oil after Indonesia. Its producers have said they cannot meet the global supply gap that will be triggered by Indonesia’s ban on palm oil exports which is due to come into effect on April 28.