Global Ag News for Apr 29.22

TODAY

Wheat prices overnight are up 13 3/4 in SRW, up 8 3/4 in HRW, up 10 1/2 in HRS; Corn is up 2 1/2; Soybeans up 16; Soymeal up $0.35; Soyoil up 0.83.

For the week so far wheat prices are up 24 1/4 in SRW, up 1/2 in HRW, up 39 1/4 in HRS; Corn is up 27; Soybeans up 12 3/4; Soymeal down $1.85; Soyoil up 6.92. For the month to date wheat prices are up 97 1/2 in SRW, up 120 1/4 in HRW, up 125 1/4 in HRS; Corn is up 83; Soybeans up 102 3/4; Soymeal down $25.80; Soyoil up 18.79.

Year-To-Date nearby futures are up 41% in SRW, up 42% in HRW, up 21% in HRS; Corn is up 38%; Soybeans up 30%; Soymeal up 7%; Soyoil up 62%.

Chinese Ag futures (SEP 22) Soybeans up 56 yuan; Soymeal up 19; Soyoil up 100; Palm oil up 244; Corn up 18 –Malaysian palm oil prices overnight were up 189 ringgit (+2.73%) at 7103.

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

Preliminary changes in futures Open Interest as of April 28 were: SRW Wheat down 3,199 contracts, HRW Wheat up 620, Corn down 15,984, Soybeans down 6,804, Soymeal down 8,771, Soyoil down 5,558.

Northern Plains Forecast: Scattered showers Friday-Sunday. Mostly dry Monday. Temperatures near to below normal Friday, below normal Saturday-Monday. Outlook: Mostly dry Tuesday. Isolated to scattered showers Wednesday-Saturday. Temperatures below normal Tuesday-Thursday, near to below normal Friday-Saturday.

Central/Southern Plains Forecast: Isolated to scattered showers through Monday. Temperatures above to well above normal Friday, near to below normal north and above normal south Saturday-Monday. Outlook: Isolated to scattered showers Tuesday-Saturday. Temperatures near to below normal north and above normal south Tuesday-Wednesday, near to below normal Thursday-Saturday.

Western Midwest Forecast: Isolated to scattered showers through Monday. Temperatures near to above normal Friday-Saturday, near to below normal Sunday-Monday.

Eastern Midwest Forecast: Isolated to scattered showers through Sunday. Mostly dry Monday. Temperatures near to below normal Friday, near to above normal Saturday-Monday. 6-to-10-day outlook: Isolated to scattered showers Monday-Friday. Temperatures near to below normal Tuesday-Saturday.

Canadian Prairies Forecast:  Isolated showers Friday. Scattered showers east Saturday. Temperatures near to below normal through Saturday. Scattered showers east Sunday. Mostly dry Monday. Temperatures near to below normal Sunday, near to above normal west and below normal east Monday. Mostly dry Tuesday-Thursday. Isolated showers Friday-Saturday. Temperatures near to above normal west and near to below normal east Tuesday, near to above normal Wednesday-Saturday.

The player sheet for 4/28 had funds: net sellers of 2,500 contracts of  SRW wheat, buyers of 3,000 corn, sellers of 6,500 soybeans, sellers of 6,000 soymeal, and  buyers of 7,500 soyoil.

TENDERS

• CORN SALE: The U.S. Department of Agriculture confirmed private sales of 476,000 tonnes of U.S. corn to China for shipment in the 2021/22 marketing year and 612,000 tonnes for shipment in 2022/23.
• SUNFLOWER OIL SALE: Turkey’s state grain board TMO on Thursday provisionally purchased about 18,000 tonnes of crude sunflower oil in an international tender, traders said.
• CANCELED VEGOIL TENDER: Egypt’s state grains buyer the General Authority for Supply Commodities has canceled its international tender for vegetable oils, it said on Thursday, opting for a purchase of the cheaper local soyoil.

PENDING TENDERS

• WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of milling wheat
• MILLING WHEAT TENDERS: Turkey’s state grain board TMO issued two import tenders to buy a total of around 480,000 tonnes of milling wheat
• FEED BARLEY TENDER: Jordan’s state grains buyer has issued a new international tender to purchase 120,000 tonnes of animal feed barley

Ukraine Crop Exports by Rail at About Half of Max Capacity

Ukraine is loading about 305 railway wagons per day with crop exports in April, equating to about 600k tons per month, Roman Slaston, chief executive officer of the Ukrainian Agribusiness Club, says Thursday on a webinar.

• There are challenges to reach the maximum capacity, which is estimated at 560 grain wagons per day (1.1m tons per month) and 130 sunflower-oil wagons per day (250k tons per month)
  • NOTE: Those volumes are well below normal seaborne trade
  • NOTE: Most Ukrainian ports have been shut since Russia invaded
• Shippers lack the necessary wagons with narrower wheels to run on European tracks, or the capacity to swap wheels at the border
• Much more is loaded on wagons than can currently be exported, resulting in long queues at border crossing points
• Potential for exports by trucks is limited due to high costs and lack of vehicles

China to sell 500,000 T imported soybeans on May 6 -trade centre

China will sell another 500,000 tonnes of imported soybeans from state reserves on May 6, the National Grains Trade Center said in a notice on Friday.

Beijing has been releasing soybeans from its reserves to boost domestic supplies and cool prices of soymeal.

SovEcon Cuts Ukraine Wheat Crop, Boosts Corn Estimates

SovEcon cut its Ukraine wheat crop estimate by 0.5m tons to 23.1m tons due to a smaller wheat area because of the Russian offensive in South-eastern Ukraine, analyst Andrey Sizov said by email.

• Sees pre-harvest wheat area at 6.5m ha, down 0.3m ha
• Increases corn area estimate to 4.4m ha from 4.2m ha

U.S. Farm Belt States Urge EPA to Allow Year-Round E15 Sales

Governors across the U.S. Corn Belt are calling on EPA to take steps that would allow permanent year-round sales of higher-ethanol gasoline in their states.

• “We urge swift action to help lower fuel prices across the country, restore energy independence,” governors of eight states write in a letter to EPA Administrator Michael Regan
• The states — Iowa, Wisconsin, Illinois, Nebraska, North Dakota, South Dakota, Minnesota and Kansas — specifically are asking for the federal government to treat so-called E15, which is comprised of 15% ethanol, the same as E10 under the law
  • NOTE: E10, or 10% ethanol and 90% gasoline, is widely accepted and available at U.S. gas stations

French Wheat Ratings Steady, Corn Sowing Accelerates: AgriMer

The share of France’s soft-wheat crop rated in good or very good condition held at 91% as of April 25, unchanged from the prior week, according to the latest FranceAgriMer data.

• That’s the best score for this point in the season since 2015
• Corn was 60% planted, versus 32% the prior week
• Compares to 69% at this time last year

Ukraine accuses Russia of stealing grain during war

Ukraine accused Russia on Thursday of stealing grain in territory it has occupied, an act which it said increased the threat to global food security posed by disruptions to spring sowing and the blocking of Ukrainian ports during the war.

Asked about the allegations, the Kremlin said it had no information on the matter.

The Ukrainian Foreign Ministry said in a written statement that it “strongly condemns the criminal actions of the Russian Federation in the so-called expropriation of crops from farmers in the Kherson region” of southern Ukraine.

It gave no further details of the alleged theft of grain in the Kherson region, whose main city has been occupied by the Russian forces since the early days of the Russian invasion on Feb. 24.

“The looting of grain from the Kherson region, as well as the blocking of shipments from Ukrainian ports and the mining of shipping lanes, threaten the world’s food security,” it said.

“We demand that Russia stop the illegal theft of grain, unblock Ukrainian ports, restore freedom of navigation and allow the passage of merchant ships.”

The Ukrainian Prosecutor General’s office said in a separate statement that it had opened a criminal case into allegations that Russian soldiers, threatening violence, had on April 26 taken away 61 tonnes of wheat from an agricultural enterprise in the Zaporizhzhia region of southern Ukraine.

Reuters was unable immediately to verify the assertion.

Asked by Reuters if the Kremlin had any information about Ukraine’s accusations, Kremlin spokesperson Dmitry Peskov said via the Telegram messaging app: “No. We do not know where this information comes from”.

According to International Grains Council data, Ukraine was the world’s fourth-largest grain exporter in the 2020/21 season, selling 44.7 million tonnes abroad. The volume of exports has fallen sharply since the Russian invasion.

“Through its illegal actions, Russia is robbing not only Ukraine but also consumers abroad. The United Nations estimates that about 1.7 billion people may face poverty and hunger due to food disruptions as a result of a full-scale war waged by Russia against Ukraine,” the Ukrainian Foreign Ministry said.

Egypt Issues First Import Permit for Wheat Shipment From India

Egypt issued its first import permit for a shipment of wheat from India, Ahmed El-Atar, chairman of Egyptian agriculture quarantine, said in a message.

US EPA to send 2020-2022 biofuel mandates to White House by early next week -sources

The U.S. Environmental Protection Agency is expected to send biofuel blending mandates for 2020, 2021 and 2022 to the White House for final review by early next week, according to two sources familiar with the matter.

The EPA proposed the rule in December, and the proposal included scaling back the amount of biofuels that U.S. oil refiners were required to blend into their fuel mix since the onset of the COVID-19 pandemic. (Full Story)

The EPA declined to comment for this article.

Nigeria Cancels Most U.S. Wheat Since 2009, Dragging on Sales

Nigeria canceled net purchases of 78.5k tons of U.S. wheat last week, helping to pull export sales of the grain below analysts’ estimates, USDA data Thursday showed.

• That’s the biggest cancellation by Nigeria since Jan. 22, 2009
• Nigeria typically sources wheat out of the Black Sea and the U.S., and the move could be a sign of reduced worries of shipment delays in the Black Sea following Russia’s invasion of Ukraine
• Overall U.S. wheat export sales of 156.6k tons fell below estimatesranging from 200k to 500k

Malaysia Palm Producers Must Meet New Sustainability Standards

Malaysian palm oil plantations and processing facilities will need to comply with new sustainability standards launched last month, according to the Malaysian Palm Oil Board.

• Companies will be re-audited based on the new standards beginning Jan. 1, 2024
• The Malaysian Sustainable Palm Oil 2022 seeks to ensure that industry’s practices meet global sustainability standards
  • It replaces the old standards issued in 2013
• Assessment will now include forced labor indicators, greenhouse gas measurements, and traceability and legality of fresh fruit bunches

EU Cuts 2022 Harvest Estimates for Wheat, Corn; Rapeseed Raised

This year’s EU soft-wheat harvest is now seen at 130.1m tons, down from a March estimate for 131.3m tons, the European Commission says in a report on its website.

• Export outlook left steady at 40m tons
• Stockpiles estimate raised to 12.6m tons, versus 12.2m tons
• Barley crop estimate trimmed to 53.5m tons, from 53.6m tons
• Corn crop estimate cut to 73.4m tons, from 74m tons
• Total grains estimate cut to 295.8m tons, from 297.7m tons
  • That’s mainly due to a smaller outlook for France
• Rapeseed crop estimate raised to 18.3m tons, from 18.1m tons

Major Brazil Soybean Grower to Cut Fertilizer Use Amid Shortage

• SLC Agricola says it’s possible cut fertilizer and keep yields
• Most of Brazil’s farmers will adopt similar strategy, CEO says

One of Brazil’s largest farmers is planning to reduce fertilizer use by a quarter next season, relying on more precise applications and soil testing to maintain crop yields.

SLC Agricola SA, which cultivates an area bigger than Delaware with soybeans, corn and cotton, will probably use between 20% and 25% less fertilizer in 2022-2023 without jeopardizing yields, according to Chief Executive Officer Aurelio Pavinato. The decision on whether and where cut applications will be based on soil testing and precision agriculture, tools already adopted by the firm for several years.

SLC’s plan offers a glimpse of how growers in the agriculture superpower are preparing to deal with a global shortage of crop nutrients in the wake of Russia’s invasion of Ukraine that has caused prices to skyrocket, threatening to reduce production of staple crops exported around the world. The prospect of lower yields has increased concern that crop prices will hit fresh records, adding to pressure on food supply to developing countries.

“It’s possible to cut fertilizers in a year and have a null impact on production,” Pavinato said in an interview. Fertilizer reserves in the soil from previous seasons will ease the impact of applying less, he said.

The majority of farmers will probably adopt the same strategy, and lower demand will lead the market to balance again, he said. Of the three key nutrients for crops, SLC has secured 83% of the potassium it’s planning to apply next season and half of phosphorus, but hasn’t yet bought nitrogen.

In the Cerrado, where the main grain belt is located, a lack of nutrients in soil makes farmers more dependent on fertilizer, according to Flavio Bonini, a manager of technical services for Mosaic Co. in Brazil.

Only about 15% of Brazil’s agriculture areas may sustain itself without fertilizers, Bonini said. The estimate is based on figures collected from farms where Mosaic does soil testing for its clients. “About 80% of Brazil’s agriculture areas are still very reliant on fertilizers.”

On the farms owned by Sementes Falcao, a farming and seed company based in Passo Fundo, Rio Grande do Sul state, one of the areas with the richest soil in Brazil, tests on cutting fertilizer were successful. The company spent five seasons using only nutrient reserves in the soil, according to its President Humberto Falcao.

“Production may have declined a little, but the profitability was kept,” he said. “Brazil could spent a year with no fertilizers, which could reduce costs and its dependency on imports. But of course it needs soil analysis.”

White House seeks $500 mln for farmers to grow more wheat, pay for market loans

The Biden administration is asking Congress to approve $500 million for the farm sector, in a bid to woo U.S. wheat producers to double-crop their fields, and boost how much the federal government will spend on short-term loans to farmers who grow certain food crops.

The request is part of President Joe Biden’s broader $33 billion request on Thursday to lawmakers to support Ukraine, a dramatic escalation of U.S. funding for the war with Russia. (Full Story)

The effort comes as global grain prices have surged, following Russia’s invasion of Ukraine which disrupted shipments of corn and wheat from those key suppliers. Meanwhile, food inflation is surging worldwide. (Full Story) (Full Story)

The request aims to increase the production of U.S. food crops – particularly wheat – which are experiencing a global shortage due to the war, according to a U.S. Department of Agriculture official.

USDA estimates it will help U.S. farmers replace up to 50% of the wheat typically exported by Ukraine onto the global market, and lower food costs for American consumers, the official said.

The request includes about $100 million to pay for a $10 per acre incentive to farmers – paid through crop insurance premiums – for a soybean crop planted after a winter wheat crop in 2023, the official said.

These payments are designed to encourage farmers to add more wheat production, while still being capable of producing a spring crop, the official said.

In addition, $400 million would be routed through USDA’s marketing assistance loans, which provide interim financing to growers and buy them more time to sell their crops at a higher profit.

The Biden administration is seeking a two-year increase in these USDA loan rates for food commodities including wheat, rice and edible oils such as soybean and sunflower oilseeds. Under that proposal, wheat loan rates would go up 63%, oilseed up 40%, and rice and pulse crop up 21%.

U.S. Grain Movement by Rail Fell 5% Week Ended April 20: USDA

U.S. Barge Shipments of Grain Rose 3% Last Week: USDA

China’s newly developed rapeseed variety sets yield record

A newly developed rapeseed strain has set a yield record in China, amid the country’s efforts to advance the expansion of oil crop planting.

The new rapeseed variety “Zhongyouza 501” achieved a yield of 419.95 kg per mu (about 0.07 hectares) in Xiangyang City, central China’s Hubei Province.

With an oil content exceeding 50 percent, the strain produces 211.57 kg of rapeseed oil per mu.

Rapeseed oil is a major cooking oil in China.

The Chinese Academy of Agricultural Sciences invited experts to conduct the yield measurement of the new strain in Hubei.

Li Jiana, head of the expert group and professor of the College of Agronomy and Biotechnology of Southwest University, said that at present, the average per-mu yield of rapeseed in China is 138.5 kg with an average oil-bearing rate of 43 percent.

Besides its high yield, Zhongyouza 501 is also resistant to disease and suitable for dense planting and mechanized harvesting.

The new strain was developed by a team led by Wang Hanzhong, a member of the Chinese Academy of Engineering and vice president of the Chinese Academy of Agricultural Sciences, through years of research and experiments.

Heat Wave Scorches India’s Wheat Crop, Snags Export Plans

An unusually early, record-shattering heat wave in India has reduced wheat yields, raising questions about how the country will balance its domestic needs with ambitions to increase exports and make up for shortfalls due to Russia’s war in Ukraine.

Gigantic landfills in India’s capital New Delhi have caught fire in recent weeks. Schools in eastern Indian state Odisha have been shut for a week and in neighboring West Bengal, schools are stocking up on oral rehydration salts for kids. On Tuesday, Rajgarh, a city of over 1.5 million people in central India, was the country’s hottest, with daytime temperatures peaking at 46.5 degrees Celsius (114.08 Fahrenheit). Temperatures breached the 45 C (113 F) mark in nine other cities.

But it was the heat in March — the hottest in India since records first started being kept in 1901 — that stunted crops. Wheat is very sensitive to heat, especially during the final stage when its kernels mature and ripen. Indian farmers time their planting so that this stage coincides with India’s usually cooler spring.

Climate change has made India’s heat wave hotter, said Friederike Otto, a climate scientist at the Imperial College of London. She said that before human activities increased global temperatures, heat waves like this year’s would have struck India once in about half a century.

“But now it is a much more common event — we can expect such high temperatures about once in every four years,” she said.

India’s vulnerability to extreme heat increased 15% from 1990 to 2019, according to a 2021 report by the medical journal The Lancet. It is among the top five countries where vulnerable people, like the old and the poor, have the highest exposure to heat. It and Brazil have the the highest heat-related mortality in the world, the report said.

Farm workers like Baldev Singh are among the most vulnerable. Singh, a farmer in Sangrur in northern India’s Punjab state, watched his crop shrivel before his eyes as an usually cool spring quickly shifted to unrelenting heat. He lost about a fifth of his yield. Others lost more.

“I am afraid the worst is yet to come,” Singh said.

Punjab is India’s “grain bowl” and the government has encouraged cultivation of wheat and rice here since the 1960s. It is typically the biggest contributor to India’s national reserves and the government had hoped to buy about a third of this year’s stock from the region. But government assessments predict lower yields this year, and Devinder Sharma, an agriculture policy expert in northern Chandigarh city. said he expected to get 25% less.

The story is the same in other major wheat-producing states like Uttar Pradesh and Madhya Pradesh.

Overall, India purchased over 43 million metric tons (47.3 million U.S. tons) of wheat in 2021. Sharma estimates it will instead get 20% to nearly 50% less.

Even though it is the world’s second-largest producer of wheat, India exports only a small fraction of its harvest. It had been looking to capitalize on the global disruption to wheat supplies from Russia’s war in Ukraine and find new markets for its wheat in Europe, Africa, and Asia.

That looks uncertain given the tricky balance the government must maintain between demand and supply. It needs about 25 million tons (27.5 million U.S. tons) of wheat for the vast food welfare program that usually feeds more than 80 million people.

Before the pandemic, India had vast stocks that far exceeded its domestic needs — a buffer against the risk of famine.

Those reserves have been strained, Sharma said, by distribution of free grain during the pandemic to about 800 million people — vulnerable groups like migrant workers. The program was extended until September but it’s unclear if it will continue beyond then.

“We are no longer with that kind of a surplus . . . with exports now picking up, there would be a lot of pressure on the domestic availability of wheat,” Sharma said.

India’s federal agriculture and commerce ministries didn’t respond to questions sent to them via email.

Beyond India, other countries are also grappling with poor harvests that hinder their ability to help offset the potential shortfall of supplies from Russia and Ukraine, normally the world’s largest and fifth-largest exporters of wheat.

China’s agriculture minister, Tang Renjian, said last month that the winter wheat harvest was likely to be poor, hindered by flooding and by delays in planting.