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Global Ag News for Apr 7.22

TODAY

Wheat prices overnight are down 4 in SRW, down 4 1/4 in HRW, down 3/4 in HRS; Corn is down 1; Soybeans up 7 1/2; Soymeal up $0.23; Soyoil up 0.30.

For the week so far wheat prices are up 48 in SRW, up 65 1/4 in HRW, up 41 1/2 in HRS; Corn is up 23 1/2; Soybeans up 41; Soymeal up $1.44; Soyoil up 0.68. For the month to date wheat prices are up 28 1/4 in SRW, up 52 in HRW, up 28 1/2 in HRS; Corn is up 13; Soybeans up 8 3/4; Soymeal down $3.40; Soyoil up 2.19.

Year-To-Date nearby futures are up 34% in SRW, up 34% in HRW, up 13% in HRS; Corn is up 27%; Soybeans up 22%; Soymeal up 13%; Soyoil up 28%.

Chinese Ag futures (SEP 22) Soybeans down 83 yuan; Soymeal down 30; Soyoil up 106; Palm oil up 182; Corn up 7 — Malaysian palm oil prices overnight were down 72 ringgit (-1.22%) at 5840.

There were no changes in registrations. Registration total: 2,185 SRW Wheat contracts; 1 Oats; 0 Corn; 132 Soybeans; 98 Soyoil; 0 Soymeal; 154 HRW Wheat.

Preliminary changes in futures Open Interest as of April 6 were: SRW Wheat up 1,376 contracts, HRW Wheat down 2,007, Corn up 2,789, Soybeans down 890, Soymeal down 2,401, Soyoil down 267.

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

Central/Southern Plains Forecast: Isolated showers northeast Thursday. Mostly dry Friday-Sunday. Temperatures below normal Thursday-Friday, near normal Saturday, above to well above normal Sunday. 6-to-10-day outlook: Scattered showers Monday-Wednesday. Mostly dry Thursday-Friday. Temperatures above to well above normal Monday, below normal northwest and above normal southeast Tuesday-Wednesday, below normal Thursday-Friday.

Western Midwest Forecast: Scattered showers Thursday. Mostly dry Friday-Sunday. Temperatures below normal Thursday-Saturday, near normal Sunday.

Eastern Midwest Forecast: Isolated to scattered showers through Saturday. Mostly dry Sunday. Temperatures near to below normal Thursday, below normal Friday-Sunday. 6-to-10-day outlook: Scattered showers Monday-Thursday. Mostly dry Friday. Temperatures above to well above normal Monday-Wednesday, below normal west and above normal east Thursday, below normal Friday.

Canadian Prairies: Alberta, Saskatchewan, Manitoba Forecast: Mostly dry Thursday-Friday. Temperatures near to below normal Thursday, above normal Friday. 6-10 Day Outlook: Isolated to scattered showers Saturday-Wednesday. Temperatures above normal Saturday, near to below normal Sunday, below to well below normal Monday-Wednesday.

 Brazil Grains & Oilseeds Forecast: Rio Grande do Sul and Parana Forecast: Isolated showers to scattered showers through Friday. Temperatures near to above normal through Friday. Mato Grosso, MGDS and southern Goias Forecast: Isolated showers through Friday. Temperatures near to above normal through Friday.

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

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

TENDERS

  • SOYBEAN SALE: The U.S. Department of Agriculture confirmed private sales of 132,000 tonnes of U.S. old-crop soybeans to China.
  • WHEAT TENDER PASSED: Jordan’s state grain buyer is believed to have made no purchase in an international tender to buy 120,000 tonnes of milling wheat which closed on Wednesday
  • BARLEY TENDER: Jordan’s state grains buyer issued a new international tender to purchase 120,000 tonnes of animal feed barley
  • WHEAT TENDER: An importer group in the Philippines is believed to have bought around 55,000 tonnes of animal feed wheat expected to be sourced from India in an international tender which closed on Wednesday
  • WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 137,516 tonnes of food-quality wheat from the United States, Canada and Australia in regular tenders that closed on Thursday.

PENDING TENDERS

  • BARLEY TENDER: A buyer in Qatar issued a tender to buy an estimated 105,000 tonnes of animal feed barley
  • WHEAT TENDER UPDATE: Bangladesh’s state grains buyer received the lowest price offer assessed at $406.83 a tonne CIF liner out in an international tender to purchase and import 50,000 tonnes of wheat which closed on April 4
  • WHEAT TENDER: Importers in the Philippines are tendering to purchase at least 50,000 tonnes of animal feed wheat
  • WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of milling wheat

DOE: U.S. Ethanol Stocks Fall 2.4% to 25.903M Bbl

China’s Corn Imports Seen 2m Tons Lower on Ukraine War: USDA FAS

China’s corn imports in the current 2021-22 season are seen at 24m tons, 2m tons below the USDA’s official outlook, the agency’s Foreign Agricultural Service said in a report.

  • “Delivery into China for contracted corn could be problematic owing to Russia’s invasion of Ukraine”
  • “Initially, after Russia’s invasion into Ukraine, local industry contacts reported China expedited taking delivery of already purchased U.S. corn. However, any large sales have yet to materialize as industry continues to monitor the global situation”
  • U.S. remains only “feasible supplier” to fill the gap left by Ukraine, as China has not yet resolved trade barriers for Brazil and Argentina supply
  • For the 2022-23 season that starts in October, corn imports may fall to 20m tons
    • “Profitability issues” expected to spur hog-herd declines
    • That would still be third-largest imports on record
  • China’s 2022 corn harvest seen at 265m tons, versus 272.6m tons a year earlier
  • China’s wheat imports seen at 9m tons in 2022-23, similar to the current season

CHS Warns on Russia Fertilizer Flows, Ukraine Grain, Cyber Risks

The largest U.S. farm cooperative warns that sanctions on Moscow are likely to cause disruptions in getting fertilizer from Russia and potentially hurt the company’s profits.

  • Minnesota-based CHS says some Ukrainian employees have been forced to relocate, including to other countries, with many unable to perform all or some work duties
  • NOTE: CHS said last month it had more than 40 workers based in Ukraine

Higher Fertilizer and Food Costs Likely to Persist, CHS CEO Says

  • Outlook for Russia and Ukraine trade flows are big unknowns
  • Fertilizer surge fuels profit at the top U.S. farm co-op

Fertilizer prices are likely to stay high given the uncertainty of Russia’s future standing within the global economy, according to the head of the largest U.S. farm cooperative.

Production from Russia, the world’s biggest nitrogen fertilizer exporter, is “suspect” because of big questions over how its commodities will fit into the global market following a raft of sanctions against the country in response to its invasion of Ukraine, CHS Inc. Chief Executive Officer Jay Debertin said in an interview.

CHS swung to a profit from a loss a year ago in the latest quarter as earnings at its nitrogen production business surged $143 million. The company’s investment in CF Nitrogen contributed “a significant portion” of the earnings, according to a statement Wednesday. The disruption of agriculture trade out of Russia and Ukraine has sent fertilizer to a record high, threatening to stoke further food inflation if farmers around the world cut back and crop yields suffer.

“I think food inflation is going to be higher,” Debertin said. “It’s hard to imagine how the country of Ukraine plants a crop this year anywhere close to what they have historically have done.”

For closely held CHS, a nearly $32 billion agriculture company based in Minnesota, the “outlook for the remainder of the year is strong,” he said.

Diesel Shortages Wreak Havoc as Top Soy Exporter Starts Harvest

  • Argentina struggling with fuel supplies for tractors, trucks
  • Drillers selling abroad to tap oil rally as local prices lag

Argentina is grappling with shortages of diesel fuel that powers tractors and trucks just as the soybean and corn harvests pick up in the powerhouse crop exporter.

Farmers ready for fieldwork and truckers who drive the crops to port are reporting rationing and soaring prices across the Pampas growing belt, with protests this week along key trucking routes. Argentina is the world’s biggest exporter of soy meal and soy oil and the third-biggest corn supplier.

If the soy harvest gets delayed, plants would start to shed beans and lose yield, according to Esteban Copati, head of crop estimates at the Buenos Aires Grain Exchange. High diesel prices, he said, also risk squeezing profit margins that are closely watched by traders because they impact farmers’ planting and selling strategies.

Oil-rich Argentina produces plenty of diesel, but it also intervenes in energy markets. Right now, it’s trying to shield Argentines suffering inflation running at 52% from the global oil rally. Local crude traded at around $60 a barrel in March even as international prices climbed above $100.

The ample difference has encouraged drillers in Argentina to export crude oil rather than supply domestic refiners like state-run YPF SA, which accounts for more than half of the nation’s fuel sales, and Raizen. They’re making up for the shortfall with imports that have become hard to source amid the Russia-Ukraine war.

There are talks to keep more crude in Argentina. “We are trying to improve prices in the second quarter,” YPF’s Chief Financial Officer Alejandro Lew said in a March 22 interview. “We are pushing a little bit harder and stronger for upstreamers to leave some extra barrels in the local market.”

YPF said in a statement on Tuesday that it would grow diesel output in April and May and “guarantee” supplies for harvesting.

Increasing Argentine diesel’s bio-blend mandate to make the fuel less dependent on provisions from drillers and more on biodiesel made from soybeans would help alleviate shortages, according to the Federation of Grain Elevators. Argentina slashed the blend mandate by half last year.

Malaysia, Pakistan Discussed Hiring Oil Palm Workers: Minister

Malaysia’s Plantation Industries and Commodities Minister met with Pakistan senior government officials to discuss the possibility of recruiting manpower to work in the Southeast Asian country’s palm oil plantations, according to a Thursday statement.

  • Malaysian minister Zuraida Kamaruddin met with Razak Dawood, Adviser of Commerce and Investment to Pakistan’s Prime Minister, and Ayub Afridi, Adviser of Overseas Pakistanis and Human Resource Development during a working visit March 30-April 1
  • Collaboration in R&D in the agri-commodity sector, as well as expanding Malaysia’s market share in Pakistan was also discussed
  • NOTE: Malaysia’s main agri-commodity exports to Pakistan are palm oil, valued at 2.92 billion ringgit ($690 million) in 2021, as well as rubber and timber

Iraq Plans to Import 3 Million tons of Wheat

Iraq’s cabinet allowed the trade ministry to import 3m tons of wheat to secure supplies for the state-run food ration program, Haider Majeed, a spokesman for the secretariat of the cabinet, said at a conference in Baghdad.

  • Iraq produced 3.5m tons of wheat in 2021, according to Agriculture Minister spokesman Hameed Al-Nayef
  • Harvest is expected this year at 2.5m-3m tons due to water shortages from Turkey and low rainfall
  • Iraq imported 157k tons of wheat so far this year, Maha Fadhel of the trade ministry’s press department, said at the conference

U.S. EPA soon to announce decision on small refinery biofuel waivers -sources

The U.S. Environmental Protection Agency will announce a decision as early as Thursday on numerous pending applications from small fuel producers seeking to be excused from biofuel blending mandates, according to two sources familiar with the matter.

The EPA has accumulated a backlog of more than 60 requests for the so-called Small Refinery Exemptions, sought by refineries that argue the cost of blending biofuels like ethanol into their fuel could put them out of business, after a 2020 court decision narrowed the criteria for what facilities should be eligible for the relief.

The EPA in December issued a proposal to reject 65 pending SRE applications. EPA’s web site shows the agency has a total of 69 pending SRE requests.

The sources said the EPA is poised to announce a decision on some or all of the pending SREs as early as Thursday. It was not clear if the agency’s decision would match the December proposal.

Former President Donald Trump’s EPA had dramatically increased such waivers to refiners, angering biofuel producers who argued the administration was abusing the program to help its allies in the oil industry at the expense of farmers. Trump’s EPA denied the claim.

Under the U.S. Renewable Fuel Standard, oil refineries must blend billions of gallons of corn-based ethanol and other fuels into the fuel pool or purchase credits from those that do. The policy is intended to help farmers and reduce petroleum imports.

Argentina corn production slightly up as favorable harvest weather continues

2021/22 ARGENTINA CORN PRODUCTION: 48.8 [46.2–50.6] MILLION TONS, UP 1% FROM LAST UPDATE

Updated weather and early harvest conditions increase 2021/22 Argentina corn production by 1% to 48.8 [46.2–50.6] million tons. 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 March’s WASDE (09 March), USDA placed Argentina corn production at 53 million tons, down from its previous estimate of 54 million tons. Bolsa de Cereales in Buenos Aires and Bolsa de Comercio in Rosario currently forecast production at 49 and 47.7 million tons, respectively. According to the Ministry of Agriculture, as of 31 March, corn harvest was 16% complete nationally, ahead of last year’s 13%. Bolsa de Cereales in Buenos Aires also reported progress of 14.4%, largely in line with last year’s pace. Favorable early harvest conditions will likely continue to support stable harvest progress, as warm and dry weather looks to remain prevalent across the main Pampas at least through next week.

Fertilizer Imports Beginning to Slow as Soaring Prices Bite

Urea and phosphate prices backed off at New Orleans (NOLA) as wet weather delays North American demand, USDA projects a significant drop in corn acreage and growers indicate application rate cuts amid high input costs. India’s potash imports are slowing. Potash remains strong at NOLA and Brazil, with prices at almost 2x last month’s annual China contract.

Bearish Corn Report Pushes Down Urea Prices in Wednesday Whisper

Fertilizer pricing volatility continues, affected by supply concerns and a potential drop in demand following USDA’s dour corn-acreage estimate. New Orleans (NOLA) urea tumbled to $835 a short ton (st) then again to $780-$800 at midweek, down sharply from last week’s $880-$940, with the corn-acreage decline and cold, wet weather to blame. The inland urea market remained mixed, with declines in the Southern Plains and gains in the Southeast. NOLA phosphates were also down, trading at or below the prior week’s low. Prices were up for potash and ammonium sulfate, however, with the latter fueled by a $50/st increase from AdvanSix.

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