Global Ag News for Feb 11.22

TODAY – COMMITMENTS OF TRADERS

Wheat prices overnight are up 6 3/4 in SRW, up 2 in HRW, up 5 3/4 in HRS; Corn is up 5 1/2; Soybeans up 9 3/4; Soymeal up $0.35; Soyoil up 0.45.

For the week so far wheat prices are up 15 1/2 in SRW, up 16 1/4 in HRW, up 35 in HRS; Corn is up 24 1/4; Soybeans up 28 3/4; Soymeal up $1.35; Soyoil down 0.45. For the month to date wheat prices are up 19 1/4 in SRW, up 21 1/2 in HRW, up 41 1/2 in HRS; Corn is up 21 1/2; Soybeans up 91; Soymeal up $38.30; Soyoil up 0.14.

Chinese Ag futures (MAY 22) Soybeans up 12 yuan ; Soymeal up 8; Soyoil down 52; Palm oil down 64; Corn down 7 — Malaysian palm oil prices overnight were up 38 ringgit (+0.69%) at 5573.

There were no changes in registrations. Registration total: 1,900 SRW Wheat contracts; 17 Oats; 50 Corn; 146 Soybeans; 137 Soyoil; 0 Soymeal; 92 HRW Wheat.

Preliminary changes in futures Open Interest as of February 10 were: SRW Wheat up 5,774 contracts, HRW Wheat up 2,534, Corn up 30,033, Soybeans up 11,904, Soymeal up 4,048, Soyoil down 3,477.

Brazil Grains & Oilseeds Forecast: Rio Grande do Sul and Parana Forecast: Mostly dry Thursday. Isolated showers Friday-Sunday, north Monday. Temperatures near normal Thursday, near to above normal Friday-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: Isolated showers Thursday night-Friday. Mostly dry Saturday-Monday. Temperatures near to above normal Thursday, below normal Friday-Sunday, near to below normal Monday. La Pampa, Southern Buenos Aires Forecast: Isolated showers Thursday night-Friday. Mostly dry Saturday-Monday. Temperatures near to above normal Thursday, below normal Friday-Sunday, near to below normal Monday.

The player sheet for Feb. 10 had funds: net sellers of 8,000 contracts of  SRW wheat, sellers of 5,500 corn, sellers of 9,000 soybeans, sellers of 3,000 soymeal, and  buyers of 1,000 soyoil.

TENDERS

• SOYBEAN SALE: The U.S. Department of Agriculture on Thursday reported private sales of 233,700 tonnes of U.S. soybeans to unknown destinations for 2021/22 marketing year shipment and 66,000 tonnes for 2022/23 shipment.
• CORN SALE: Taiwan’s MFIG purchasing group bought about 65,000 tonnes of animal feed corn to expected to be sourced from Argentina in an international tender which closed on Thursday
• WHEAT SALE: Japan’s Ministry of Agriculture, Forestry and Fisheries bought a total of 115,913 tonnes of food-quality wheat from United States, Canada and Australia in regular tenders that closed on Thursday.

PENDING TENDERS

• SOYMEAL, BARLEY TENDER: Iranian state-owned animal feed importer SLAL has issued international tenders to purchase up to 60,000 tonnes of animal feed barley and 60,000 tonnes of soymeal
• WHEAT, SOYMEAL TENDER: An importer group in the Philippines is tendering to purchase animal feed wheat and soymeal with total tonnage sought unclear. The deadline for submission of price offers in the tender is Feb. 11.
• WHEAT TENDER: Bangladesh’s state grains buyer has issued an international tender to purchase 50,000 tonnes of milling wheat. The deadline for submission of price offers is Feb. 14.
• MILLING WHEAT TENDER: A Syrian state grains agency has issued an international tender to purchase and import 200,000 tonnes of milling wheat
• FEED WHEAT, BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries said it will seek 80,000 tonnes of feed wheat and 100,000 tonnes of feed barley to be loaded by May 31 and arrive in Japan by July 28, via a simultaneous buy and sell auction that will be held on Feb. 16.
• BARLEY TENDER: Jordan’s state grains buyer has issued a new international tender to purchase 120,000 tonnes of animal feed barley

Argentina Needs More Rains to Reach Slashed Corn Est.: Exchange

A new reduced corn forecast of 51 million metric tons in Argentina will be achieved only if it rains sufficiently in February, the Buenos Aires Grain Exchange says in a weekly report.

• Previous forecast, published in the pre-season last year, was 57m metric tons
• Late corn crop needs rain to keep its production potential
• Early corn crop, which is starting to be harvested, was damaged by drought, curbing yields
• Many soybean plants continue struggling with dryness and also need rain
  • Plants have been lost to flooding in some pockets of the Pampas growing belt
  • Soy estimate kept at 42m tons

U.S. Export Sales of Soybeans, Corn and Wheat by Country

The following table shows U.S. export sales of soybeans, corn and wheat by biggest net buyers for week ending Feb. 3, according to data on the USDA’s website.

• China and buyers listed as “unknown” accounted for 1.85m of the 2.49m tons of soybeans sold
• Mexico was the top buyer of corn and also led in wheat

Brazil’s biggest farmer coop sees 40% soy supply drop amid drought

Coamo, the largest farmer cooperative in Brazil, expects to receive 3.6 million tonnes of soybeans from the 2021/2022 crop, 40% less than initially projected amid crop failure caused by a drought.

In an interview with Reuters on Thursday, Coamo Chief Executive Airton Galinari said the company had expected to receive 6 million tonnes from farmers, a volume that would exceed the approximately 5.1 million gotten last year.

This year’s projections will not be confirmed, he said, as the cooperative’s farmers, based in Parana, grow grains in the very regions hit by hot and dry weather.

Badly affected states include Parana, Santa Catarina, Mato Grosso do Sul, as well as Rio Grande do Sul.

Coamo processes grains sourced from farmers to make products sold on domestic markets. It also sells them on export markets. It trades in crops including corn, wheat and soybeans.

China’s sow herd down 2.9% at end of Q4 from pvs quarter -ag min

China’s sow herd fell 2.9% by the end of the fourth quarter of last year from the previous quarter, the agriculture ministry said on Friday.

The size of the herd, at 43.29 million head, was 4% greater than the previous year, according to the latest data on the website of the Ministry of Agriculture and Rural Affairs.

China’s pig herd at the end of December was up 10.5% from the previous year, at 449.22 million head. The numbers were also up 2.6% on the quarter, the figures showed.

Tough February Seen Ahead for Argentina’s Parched Soy Crop

A lack of significant rain forecast for the rest February means there’s little upside for soybean plants, Rosario Board of Trade says in monthly report.

• February production estimate is 40.5m metric tons vs. 40m in January
• Only pockets of Pampas growing belt benefited from end-January rains; most areas are still parched
• February corn estimate kept at 48m tons
• Some light rain seen in next couple of days for Pampas: Rosario
• For last two weeks of February “what we’re seeing is definitely not encouraging. La Nina has grown stronger”
• A separate report by Buenos Aires Grain Exchange forecasts moderate rainfall of up to 25mm (1 inch) for Feb. 10-16 in northwestern Buenos Aires province and southern Cordoba province, with the rest of key “zona nucleo” region drier
• Dryness to return across zona nucleo for Feb. 17-23, with no more than 10mm: Buenos Aires

Argentine Soybean, Corn Estimates Feb. 10: Exchange

The Buenos Aires Grain Exchange releases weekly report on website.

2021-22 Corn production cut to 51m tons from preliminary est. of 57m tons

Bioceres Mulls Rolling Out Drought-Tolerant Soy Without China

Rosario-based biotech company Bioceres is already in talks with Argentine authorities to remove a restriction that prevents it from fully rolling out its HB4 soy strain until China has approved it, CEO Federico Truccosaid on an earnings call.

• Trucco thinks that waiting for China any longer could be a miscalculation when several other countries, including the U.S., have already authorized HB4 soy
• China has had about seven years to make a decision, which is “enough time,” Trucco said
  • “We expected approval last year and are still waiting”
• Drought has curbed planting of new-generation HB4 soybeans
• HB4 WHEAT:
  • Bioceres will ask Brazil to approve imports of its HB4 wheat seeds in 2Q22 after it authorized flour made from the strain last year
  • Expects Brazil to give “cultivation” green light in 2023

Russian Share of Turkey’s Wheat Market Has Declined: IKAR

Russian wheat exporters’ share of Turkey’s market has fallen, in part due to export taxes, Dmitry Rylko, director general at consultant IKAR, said at a conference in Moscow.

• Russia’s share of Turkey’s imports has fallen to 65% this season, from 82% last season, he said
• Ukraine’s share of Turkish market has risen to 25% from 12%
• Russian share of Egypt’s market also fell; Egypt and Turkey are two key markets for Russian wheat exports
• Still, Russia made breakthroughs in new export markets in Saudi Arabia and Algeria, and sales to Iran hit a record, Rylko said
• NOTE: Russia started a floating export tax from June as part of efforts to keep domestic prices in check

Russian Wheat-Export Tax to Fall to $92.80/Ton Next Week

Russia’s wheat export customs duty will fall to $92.80/ton next week, from $93.20, according to the Agriculture Ministry’s website.

• NOTE: The rates are set weekly and take effect three working days after publication
• NOTE: Russia started the floating tax from June 2, with a $28.10/ton levy

Wheat Crop in Western Australia Up 29% on Previous Season: GIWA

Wheat output in the key growing state of Western Australia is estimated to have hit 12.9 million tons during the 2021 season, up 29% from previous year, according to the Grain Industry Association of Western Australia.

• Excellent growing conditions boosted yields and farmers expanded plantings
• Total grain tonnage for 2021 expected to reach 24m, up 31% from previous season
• For the 2022 growing season, input costs have risen substantially with high fertilizer and herbicide prices due to supply constraints; this will result in less area sown and subtle crop swaps
• Barley will be swapped out for wheat in areas with higher rainfall as wheat prices have better prospects for gains
• There will be more crop and pasture legumes sown to provide nitrogen for 2023 sown crops
• Oat area will probably remain static as even though sown area was down a lot in 2021, more grain was produced than in previous years
• Other 2021 production forecasts:
  • Barley 6.4m tons, up 29% from last season
  • Canola 3.1m tons, up 48% from prior season

EPA’s 2022 Biofuels Blending Proposal ‘Unachievable’: PBF

The Biden administration’s proposal to raise biofuels blending targets for 2022 will create a shortfall on renewable credits, says PBF president Matthew Lucey in an earnings call.

• “While the EPA’s 2020 and 2021 proposals appropriately reflect actual RIN generation, the EPA proposed an unachievable RVO for ethanol RINs in 2022,” Lucey said
• Unless the EPA lowers the 2022 RVO by 1.5b gallons to be more in line with EIA demand projections, the market will “run out of RINs,” and this will “create significant problems for the market at large,” Lucey said
• PBF will begin renewable diesel production at its Chalmette, L.A., refinery by 1H 2023
• EPA last year proposed as much as 15b gallons of biofuels to be blended into gasoline and diesel