Global Ag News for Feb 23.22

TODAY

Wheat prices overnight are down 3 in SRW, down 5 1/2 in HRW, down 1 3/4 in HRS; Corn is down 4; Soybeans up 7 1/2; Soymeal up $0.20; Soyoil up 0.59.

For the week so far wheat prices are up 45 1/2 in SRW, up 41 1/4 in HRW, up 24 3/4 in HRS; Corn is up 15 3/4; Soybeans up 39; Soymeal up $0.71; Soyoil up 3.03. For the month to date wheat prices are up 83 1/4 in SRW, up 97 1/4 in HRW, up 83 1/4 in HRS; Corn is up 44; Soybeans up 147 1/4; Soymeal up $35.80; Soyoil up 5.84.

Year-To-Date nearby futures are up 9% in SRW, up 9% in HRW, up 0% in HRS; Corn is up 13%; Soybeans up 24%; Soymeal up 11%; Soyoil up 26%.

Chinese Ag futures (MAY 22) Soybeans up 1 yuan; Soymeal up 23; Soyoil down 100; Palm oil up 262; Corn up 19 — Malaysian palm oil prices overnight were up 142 ringgit (+2.43%) at 5982.

There were changes in registrations (-10 Oats, -11 Corn ). Registration total: 1,900 SRW Wheat contracts; 0 Oats; 17 Corn; 68 Soybeans; 137 Soyoil; 0 Soymeal; 92 HRW Wheat.

Preliminary changes in futures Open Interest as of February 22 were: SRW Wheat down 7,355 contracts, HRW Wheat down 3,880, Corn down 31,197, Soybeans down 8,221, Soymeal down 5,381, Soyoil down 7,847.

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

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

The player sheet for Feb. 22 had funds: net buyers of 19,000 contracts of  SRW wheat, buyers of 23,500 corn, buyers of 18,500 soybeans, buyers of 3,000 soymeal, and  buyers of 8,500 soyoil.

TENDERS

• SOYBEAN SALE: The U.S. Department of Agriculture confirmed private sales of 132,000 tonnes of new-crop U.S. soybeans to China.
• WHEAT SALE: The USDA also confirmed private sales of 120,000 tonnes of U.S. hard red winter wheat to Nigeria, including 60,000 tonnes of old-crop and 60,000 tonnes of new-crop wheat.
• FEED BARLEY PURCHASE: Turkey’s state grain board TMO purchased an estimated 255,000 tonnes of animal feed barley in an international tender for the same volume on Tuesday
• FEED BARLEY TENDER PASSED: Jordan’s state grain buyer made no purchase in an international tender for 120,000 tonnes of animal feed barley which closed on Tuesday
• FEED BARLEY TENDER: Jordan’s state grains buyer has issued a new international tender to purchase 120,000 tonnes of animal feed barley
• CORN TENDER: Taiwan’s MFIG purchasing group issued an international tender to buy up to 65,000 tonnes of animal feed corn which can be sourced from the United States, Brazil, Argentina or South Africa

PENDING TENDERS

• WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of milling wheat. The deadline for submission of price offers was Feb. 14.
• WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy 120,000 tonnes of milling wheat sourced from optional origins
• SUNFLOWER OIL TENDER: Turkey’s state grain board TMO issued an international tender to purchase and import about 6,000 tonnes of crude sunflower oil
• RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 72,200 tonnes of rice to be sourced from the United States and Vietnam, European traders said. The deadline for registration to participate in the tender is Feb. 25.

U.S. Inspected 1.577m Tons of Corn for Export, 975k of Soybean

 Kansas Winter Wheat Conditions Fall to 26% Good/Excellent: USDA

China Sees Continued Tight Balance in Grain Supply: Minister

China’s grain consumption continues to grow and the tight supply-demand balance will likely persist in the short term, Chinese Minister of Agriculture and Rural Affairs Tang Renjian says at a briefing.

• Summer grain harvest faces unprecedented challenges due to late sowing of winter wheat and complicated growth condition
• China is determined to expand soybean, oilseeds output and use both global and domestic markets to increase supply
• China aims to greatly improve self-sufficiency rate of soybean and oilseeds in 5-10 years with various measures

Argentine farmers have sold 39.2 mln tonnes of 2020/21 soybeans – ministry

Argentine farmers have sold 39.2 million tonnes of soybeans from the 2020/21 season so far after selling some 368,200 tonnes in the most recent week period, the Agriculture Ministry said on Tuesday in a report that included data through Feb. 16.

The pace of sales of the country’s main cash crop was slightly behind the previous season, when sales of 40.7 million tonnes of the oilseed had been recorded by the same date.

The 2020/21 soybean harvest in Argentina ended in June at 43.1 million tonnes, according to the Buenos Aires Grains Exchange (BdeC), which estimated the previous 2019/20 crop at 49 million tonnes.

Foreign exchange from agricultural exports is key for Argentina’s battered economy, with reserves depleted and the country nearing a deal with the International Monetary Fund to revamp over $40 billion in debts it cannot pay back.

Argentina is the world’s No. 1 exporter of processed soybean oil and meal and the second largest global exporter of corn.

Regarding Argentina’s 2021/22 soybean crop, the planting of which is almost complete, there have already been sales of 7.8 million tonnes, according to official data. The BdeC estimates the soybean harvest for the new campaign at 42 million tons.

China Reiterates Plan to Boost Soybean Output to Ease Imports

• Nation will ‘vigorously’ push to increase production capacity
• Chinese soybean crushers under pressure from high prices

China reiterated its plan to boost domestic soybean output in an annual policy guideline for rural development, as the nation seeks to reduce its reliance on imports that have stoked concerns over food security.

The nation will “vigorously” push to increase production capacity of soybeans and oilseeds this year, according to the policy document released late Tuesday. While the statement didn’t provide output targets, China has a goal to produce 23 million tons of soybeans by the end of 2025, up 40% from current levels.

The focus on soybeans comes after China, the world’s top importer, sharply increased overseas purchases in recent years, mainly from Brazil and the U.S. China has the biggest hog herd and depends on foreign supplies of the oilseed for its processing industry, which produces meal for pig feed and cooking oil.

Domestic soybean crushers have been under pressure from the blistering rally in oilseed prices, while hog farming margins have been extremely weak, denting demand for soy meal. Wilmar International Ltd., one of the world’s biggest food processors with more than 300 plants in China, warned Tuesday that the outlook for crushing will remain challenging this year.

China imports about 100 million tons of soybeans a year. The nation aims to reduce overall demand by 30 million tons by promoting the use of alternative proteins in animal feed, Xinhua News reported this month, citing an official from the agriculture ministry.

Vessels Sit Empty for Weeks Waiting for Delayed Brazil Soybeans

• Excessive rains in Mato Grosso add extra time to dry grains
• Wait times to load push to more than 40 days at some key ports

A backlog of vessels waiting to load soybeans from some Brazilian ports is stretching to near-record lengths as the world’s biggest bean exporter struggles to harvest and ship this season’s crop due to extreme weather.

Following harvest woes and heavy rains that have made it challenging to dry and transport the beans, some boats have now been waiting for more than 40 days for their cargoes. That’s significantly longer than the seven to 15 days that’s typical, resulting in longer lead times, higher premiums and rising costs for buyers.

“The lineup is growing when it should be going down in a clear message that not enough soybeans are making it to the ports,” said Marcos Pepe Bertoni, chief operating officer at Corredor Logistica e Infraestrutura SA at the Tegram grain terminal.

The shipping delays come as bad weather has battered this season’s crops, with heavy rains in Mato Grosso state delaying the harvest even more than anticipated since wet beans need to be dried before being hauled to ports. Although the state’s harvest is further along than it was at this time last year, it’s still behind where experts expected it would be.

The country is now expected to export only 7.2 million tons this month, according to grain-exporter group Anec, below the 9 million ton forecast made in January.

Those delays are showing up in markets, with both U.S. and Brazilian soybean prices climbing. South American prices are usually the cheapest in the world starting in February, when the harvest starts, until the fall harvest in the U.S., but the lack of available soybeans in Brazil has pushed those prices even higher.

Due to the multi-week queue for loading, some big trading companies are now withdrawing cargoes from Port of Santos and sending them instead to ports in the Northern Arc, such as Itaqui and Barcarena. Bertoni said most of trains heading to Santos are not able to fill more than 60% of the initial schedule, driving some of the vessels to switch ports.

Brazil Working on Unprecedented Commercial Grain Deal with Iran

Brazil and Iran are working on a deal that could guarantee exports of roughly 5m tons of Brazilian corn in exchange for Iranian fertilizers every year, says Aprosoja’s Mato Grosso president Fernando Cadore, following a business trip with the country’s Minister of Agriculture, Tereza Cristina.

• Guarantees still a “work in progress,” but a memorandum of understanding should be signed and companies and state agencies will be invited to participate in the structure, Cadore says
• “The deal would not only mean we will have enough supplies, but we can also lower costs to farmers and to the final consumer, which can translate to cheaper food prices,” says Cadore in an interview.
  • Fertilizer prices more than doubled in the state from year ago
• The state produces historically around 30m-35m tons of corn per year and only crushes around 10m-12m tons.
  • “We need more markets otherwise we have a surplus of grains”: Cadore
  • Mato Grosso is pegged to harvest 40m tons of corn this year on a record planted area and Brazil estimated to export 43m tons this year, if weather is favorable for second-crop corn that’s currently being planted

EU Soft-Wheat Exports Rose 2.4% in Season Through Feb. 20

Soft-wheat shipments during the season that began July 1 reached 17.7m tons as of Feb. 20, versus 17.3m tons in a similar period a year earlier, the European Commission said Tuesday on its website.

• NOTE: Figures for the prior season include trade for the U.K. until Dec. 31, 2020, when the country departed the EU customs union
• Top soft-wheat destinations are Algeria (2.76m tons), China (1.68m tons) and Egypt (1.64m tons)
• EU barley exports at 5.2m tons, versus 5m tons a year earlier
• EU corn imports at 10.6m tons, against 10.8m tons a year earlier

EPA Sets Up June 3 Deadline to Issue Biofuel-Blending Quotas

The EPA would be required to finalize biofuel-blending quotas for 2021 and 2022 by June 3, under a proposed legal settlement with ethanol advocates.

• The EPA is inviting public comment on the legal settlement with a notice set to be published in the Federal Register on Wednesday
• The biofuel advocacy group Growth Energy had filed a complaint in the U.S. District Court for the District of Columbia challenging the agency’s delay in setting renewable fuel standards for 2021 and 2022
• NOTE: Federal law already requires most biofuel-blending targets to be established by Nov. 30 of the preceding year, but the deadline has been met inconsistently under multiple administrations
• Growth Energy chief executive Emily Skor called the agreement “a significant milestone for the biofuels industry” that could help get the Renewable Fuel Standard program “back on track”

EPA Seen Proposing Post-2022 Biofuel Blending Rules by July: RFA

EPA seeks to propose post-2022 U.S. biofuel blending rules in late spring or early summer, Renewable Fuels Association President Geoff Cooper says, citing communication with the agency.

• EPA might include proposals covering multiple years, Cooper said during RFA’s National Ethanol Conference in New Orleans
• Cooper reiterates objection to EPA plan to retroactively cut biofuel-blending quotas for 2020, saying it would set “dangerous precedent” and unfairly penalize market participants who complied with the rules
• Says the “quickest way to lower” gasoline prices would be to expand reach of E15 blends, an action the Biden admin. could do with “little more than the stroke of a pen”
• Future of ethanol is tied to reducing harmful greenhouse gases: Cooper
  • “We can’t afford to miss this opportunity”
• Sarah Dunham, director of EPA’s Office of Transportation and Air Quality, tells conference the Biden admin. is open to using “every tool in the toolbox,” including biofuels, in its aim to combat carbon emissions in transportation
  • Administration’s goal of expanding production of zero-emission vehicles “can and should and needs to include sustainable and renewable liquid fuels to power the transportation sector”: Dunham

LIVESTOCK SURVEY: U.S. Cattle on Feed Placements Seen Down 0.8%

LATAM CROP WEATHER: Argentina Soy, Corn to Get Beneficial Rain

Precipitation starting tomorrow through the end of the week will replenish soil moisture and halt additional losses in most growing areas, Don Keeney, a senior meteorologist at Maxar, says in an email.

• In eastern Buenos Aires, rain won’t be enough to end dryness concerns
• In the nation’s northern region, showers will linger this weekend and next week, while southern Argentina will begin to dry out again

BRAZIL SOYBEANS, CORN

• Soybean harvest and winter-corn planting should speed up in northern areas in the next 10 days amid drier conditions: Keeney
• In the nation’s south, rains may halt soybean losses in Rio Grande do Sul state, where 80% of crops are developing, according to Celso Oliveira, Climatempo meteorologist

Argentina Infernos Spread to Engulf Key Cattle Farming Region

• Fires in northeast province come as climate change fears mount
• Damage compounds broader impact of South American drought

Blazes are tearing through northeast Argentina, consuming more land than a typical California wildfire season and threatening a key cattle farming region of this major beef exporter.

Wildfires burn at Paraje Uguay, near the Ibera National Park in Argentina, on Feb. 22, 2022.

The fires have already swept through almost 2 million acres in Argentina’s Corrientes, about 9% of a province that’s a mix of ranching and protected wetlands, with little sign of relief as temperatures soar to 100 degrees Fahrenheit (38 degrees Celsius). The flames are consuming 30,000 hectares each day, about twice the size of New York’s Staten Island.

The land burned in Argentina this year far exceeds California’s five-year average of 1.6 million acres and is more than three-quarters of the land lost to wildfires in the U.S. state last year.