Global Ag News for Feb 24.22

TODAY – EIA WEEKLY PETROLEUM STATUS REPORT

Wheat prices overnight are up 50 in SRW, up 50 in HRW, up 60 in HRS; Corn is up 35; Soybeans up 77; Soymeal up 1.70; Soyoil up 4.00.

For the week so far wheat prices are up 130 3/4 in SRW, up 128 in HRW, up 101 1/2 in HRS; Corn is up 63 1/2; Soybeans up 141; Soymeal up 3.76; Soyoil up 6.97.  For the month to date wheat prices are up 168 1/2 in SRW, up 183 3/4 in HRW, up 160 in HRS; Corn is up 91 3/4; Soybeans up 252 3/4; Soymeal up 66.00; Soyoil up 9.77.

Year-To-Date nearby futures are up 20% in SRW, up 20% in HRW, up 8% in HRS; Corn is up 21%; Soybeans up 32%; Soymeal up 19%; Soyoil up 33%.

Chinese Ag futures (MAY 22) Soybeans down 1 yuan; Soymeal up 122; Soyoil up 352; Palm oil up 404; Corn up 39 — Malaysian palm oil prices overnight were up 471 ringgit (+7.87%) at 6453.Malaysian palm oil prices overnight were up 444 ringgit (+7.42%) at 6426.

There were changes in registrations (-43 SRW Wheat, ). Registration total: 1,857 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 23 were: SRW Wheat up 5,643 contracts, HRW Wheat down 1,153, Corn down 11,129, Soybeans down 554, Soymeal down 10,393, Soyoil down 2,944.

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

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

The player sheet for Feb. 23 had funds: net buyers of 15,000 contracts of  SRW wheat, buyers of 15,000 corn, buyers of 17,000 soybeans, buyers of 9,000 soymeal, and  buyers of 2,000 soyoil.

Russia halts vessel movement in Azov sea, Black Sea open

Russia has suspended movement of commercial vessels in the Azov sea until further notice, but kept its ports in the Black Sea open for navigation, its officials and five grain industry sources said on Thursday.

Russian President Vladimir Putin authorised “a special military operation” against Ukraine on Thursday to eliminate what he called a serious threat, saying his aim was to demilitarise Russia’s southern neighbour.

The Azov sea is home to shallow water ports of smaller capacity.

“All ships are on ‘stop’ (in the Azov sea),” a grain industry source told Reuters on condition of anonymity.

Ukraine asked Turkey to close the Bosphorus and Dardanelles straits to the Russian ships, the Ukrainian ambassador to Ankara said earlier on Thursday.

There has been no reaction yet to Ankara’s request.

China Confirms It Will Allow Wheat Imports From Whole of Russia

The Chinese customs said in a notice dated Wednesday that it will allow wheat imports from all of Russia. Customs notice confirms Feb. 4 report from Russia that China will accept wheat and barley from all over Russia, up from a previously allowed seven regions which excluded major growing areas

Wilmar Says Ukraine JV Facilities, Staff ‘Not Affected So Far’

Wilmar said the facilities and employees of its joint venture Delta Wilmar Ukraine are unaffected so far by Russia’s attack on Ukraine, according to emailed response to questions.

• Joint venture has two processing plants — one for tropical oils and the other for sunflower oilseeds — as well as a complex for vegetable oils transshipment in Yuzhny port
• All the plants are located in Novi Bilyary village, about 30km away from Odesa city

OZK Says Grain Received as Usual at its Novorossiysk Terminal

Grain is being received as usual at the Novorossiysk Bread Plant terminal, Russian wheat trader OZK said in a statement.

• Shipments were not planned in the coming days according to schedule; the company doesn’t see any disruptions, but is monitoring the situation.
• NOTE: Earlier, Tass reported that Russia has suspended navigation in the Sea of Azov, but that Russia’s Black Sea ports were operating as usual
• NOTE: OZK, which is also known as United Grain Co., is Russia’s fourth-biggest wheat exporter

Dalian Exchange Raises Margins to Cool Corn, Soymeal Speculation

Dalian Commodity Exchange will raise the minimum margin requirements for speculative trading of some corn and soybean meal futures contracts, according to a notice dated Feb. 23.

• Margins for May soymeal contract will increase to 9% from 8%
• Margins for May corn futures will rise to 12% from 11%
• Margins for May corn starch will increase to 9% from 7%

Indonesia to Seek Alternative Wheat Supplies Amid Ukraine Crisis

Indonesia’s flour mills will start seeking alternative sources of wheat amid the escalating Ukraine crisis, said Franciscus Welirang, chairman of Indonesian Flour Mills Association.

• Potential sources of wheat include Argentina, Brazil, India and other European countries, Welirang said by phone
• Situation in the Black Sea won’t impact wheat availability as the next Ukraine crop harvest is in Aug-Sept
• Bigger concern is the impact on prices, which were only recently starting to decline
• No reports of shipment problems from association’s members so far

TENDERS

• WHEAT TENDER: Egypt’s General Authority for Supply Commodities (GASC) set a tender to buy an unspecified amount of wheat from global suppliers for shipment from April 11-21. The deadline for offers is Feb. 24 and payment is at sight, it said.
• SOYBEAN SALE: The U.S. Department of Agriculture confirmed private sales of 132,000 tonnes of new-crop U.S. soybeans to China.
• SUNFLOWER OIL PURCHASE: Turkey’s state grain board TMO provisionally bought about 6,000 tonnes of crude sunflower oil in an international tender to purchase and import the same volume
• WHEAT PURCHASE: Bangladesh’s state grains buyer purchased about 50,000 tonnes of milling wheat in an international tender which closed on Feb. 14
• 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-SOYMEAL TENDER: Iranian state-owned animal feed importer SLAL issued international tenders to purchase up to 60,000 tonnes of animal feed barley and 60,000 tonnes of soymeal
• FEED WHEAT TENDER: A group of importers in Thailand issued an international tender to purchase up to 294,600 tonnes of animal feed wheat
• FEED BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase 120,000 tonnes of animal feed barley
• WHEAT TENDER: Turkey’s state grain board TMO issued an international tender to purchase about 435,000 tonnes of milling wheat

PENDING TENDERS

• 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
• 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

BRIEF-Brazil 2021/2022 Soybean Crop Forecast Raised to 130.25 Million Tns – Datagro

BRAZIL 2021/2022 SOYBEAN CROP SEEN AT 130.25 MILLION TNS VERSUS 130 MILLION TNS IN PREVIOUS FORECAST – DATAGRO

BRAZIL 2021/2022 TOTAL CORN CROP SEEN AT 117.82 MILLION TNS VERSUS 115.22 MILLION TNS IN PREVIOUS FORECAST – DATAGRO

2021/22 ARGENTINA SOYBEAN PRODUCTION: 41.6 [38.0–44.9] MILLION TONS, DOWN <1% FROM LAST UPDATE

Low vegetation densities throughout the northern half of the main Pampas fractionally lower 2021/22 Argentina soybean production to 41.6 [38.0–44.9] million tons, despite relatively better crop conditions in the southern counterpart. Our current estimate puts planted area at 16.3 million hectares, in line with the Bolsa de Cereales in Buenos Aires’ latest national-level projection, but slightly above 16.1 million hectares reported by Bolsa de Comercio in Rosario. In February’s WASDE (09 February), USDA placed Argentina soybean production at 45 million tons, down from its previous estimate of 46.5 million tons. Bolsa de Cereales in Buenos Aires and Bolsa de Comercio in Rosario currently forecast production at 42 and 40.5 million tons, respectively.

The past 15 days featured split weather conditions across Argentina’s core. The southwestern half of the Pampas received moderate near-normal precipitation, while the northeastern counterpart only picked up scattered rain totaling less than 10 mm. This split pattern coincides with that of current soil moisture throughout the main Pampas, where poor conditions are still prevalent throughout much of key northern producing provinces such as Santa Fe, Salta, and Santiago del Estero. Most soy crops in these regions are about to enter the critical pod fill phase very soon, and the lack of moisture will likely continue to put downward pressure on yield.

Vegetation densities derived from satellite imagery continue to coincide with the dry north-wet south pattern. They remain well below historical median levels across nearly all major production regions in the northern Pampas (except in Tucumán) and near record low levels in Salta and Santa Fe, reflecting the dire drought conditions. On the other hand, the density levels remain above historical medians in most of the southern counterpart, including key producers such as Buenos Aires and La Pampa, showing a startling contrast. First crop soybeans are now fully in reproductive stages of development, while most of second crop soybeans are entering flowering and blooming stages. The latest short-term weather forecasts (GFS/EC) indicate that the divided precipitation pattern is likely to continue into early March amid cool weather, warranting attention.

Renewable Credits Rise as Market Eyes Biofuel Blending Shortfall

Renewable credits costs are on the rise this week amid concerns that the market will fall short of this year’s proposed biofuels blending targets.

• The cost per barrel to produce gasoline and diesel for consumption in the U.S. in compliance with the RFS mandate, as measured by an aggregate of RINs based on the EPA’s blending targets, rose to $6.95/bbl on Wednesday, the highest level since 10 January, according to data compiled by Bloomberg
• The EPA proposed a 15b gallon ethanol blending target for this year. Shortfalls must be met with credits from the RIN bank
• “Gasoline demand won’t be high enough to blend 15b gallons of ethanol at E10”, said Mario Lopez, an analyst with Energy Aspects, referring to the 10% ethanol blend in gasoline. “Thus the market will have to tap into the RIN bank”, he said.

China to Strictly Control Corn Ethanol Production Due to Short Supply of Corn

China has adjusted its policy on ethanol produced from corn biomass and will strictly control the corn ethanol industry due to the undersupply of the cereal.

China’s new policy will “strictly control the corn-based fuel ethanol processing industry,” according to the country’s No. 1 central document released yesterday. It will replace the “moderate development of grain ethanol fuel” policy that was implemented in 2017.

The principle of China’s development of corn deep processing business is to ensure food security and land use for grain, Cai Hailong, a professor at the School of Economics and Management of China Agricultural University, told Yicai Global.

As in China over 60 percent of corn is used in feed and about 30 percent in industrial processing, if the corn deep processing industry develops excessively, it will squeeze the normal supply of feed corn and affect the supply chain of products such as meat, eggs, and milk, Cai added.

The policy of “moderate development” was implemented in 2017, when the corn stock was high, Lin Guofa, research director at bulk agricultural product e-commerce and fourth-party logistics service platform 16988.Com, told Yicai Global.

Corn production declined for four consecutive years since 2016, the year when the new corn processing projects started to use new corn after the old stocks were consumed, Lin added, noting that the demand for corn from the feed industry continues to grow.

These factors led to a tight supply and rising prices of corn since 2020, Lin said, which result in corn price occasionally even higher than wheat price, he added.

China’s corn production increased 4.6 percent to 273 million tons last year due to a sharp rise in planting area.

U.S. Bird Flu Outbreak Spreads to Delaware, USDA Confirms

USDA confirmed highly pathogenic bird flu was detected at a commercial poultry operation in Delaware as the virus spreads across the eastern U.S.

• Virus already has been detected in commercial flocks in Indiana and Kentucky and in backyard flocks in Virginia, New York and Maine, according to USDA
• The disease, which is highly lethal for poultry, was previously confirmed in January in wild birds in South Carolina and North Carolina
• USDA’s Animal and Plant Health Inspection Service says it will only announce the first confirmed case in each state and won’t announce subsequent cases in a state
• A serious U.S. outbreak of avian influenza in 2014-2015 led to the death of more than 50 million chickens and turkeys and cost the U.S. economy about $3.3 billion, USDA found
• 18 countries — including China, Russia and South Korea — banned trade of poultry and poultry products from the U.S. during the 2014-2015 outbreak