Global Ag News for Feb 25.22

TODAY – EXPORT SALES

Wheat prices overnight are down 40 3/4 in SRW, down 33 1/4 in HRW, down 28 in HRS; Corn is down 28 1/2; Soybeans down 41 1/2; Soymeal down $0.79; Soyoil down 1.79. Managed funds liquidating longs after Biden failed to impose sanctions on Russia food,  oil and gas companies.

For the week so far wheat prices are up 90 1/2 in SRW, up 92 3/4 in HRW, up 31 in HRS; Corn is up 9 1/4; Soybeans up 8 3/4; Soymeal up $0.19; Soyoil up 2.57. For the month to date wheat prices are up 127 3/4 in SRW, up 148 1/2 in HRW, up 89 1/2 in HRS; Corn is up 37 1/4; Soybeans up 117 1/4; Soymeal up $30.70; Soyoil up 5.37.

Year-To-Date nearby futures are up 15% in SRW, up 16% in HRW, up 2% in HRS; Corn is up 13%; Soybeans up 22%; Soymeal up 11%; Soyoil up 25%.

Chinese Ag futures (MAY 22) Soybeans up 215 yuan ; Soymeal down 19; Soyoil up 52; Palm oil up 126; Corn up 12 — Malaysian palm oil prices overnight were down 487 ringgit (-7.55%) at 5966.

There were no changes in registrations. 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 24 were: SRW Wheat down 7,571 contracts, HRW Wheat down 3,176, Corn down 24,818, Soybeans down 32,796, Soymeal down 19,750, Soyoil down 14,959.

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

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

The player sheet for Feb. 24 had funds: net buyers of 21,000 contracts of  SRW wheat, buyers of 17,500 corn, buyers of 13,500 soybeans, sellers of 3,500 soymeal, and  buyers of 6,500 soyoil.

TENDERS

• WHEAT TENDER CANCELLED: Egypt, often the world’s top wheat importer, cancelled its international purchasing tender as a result of low turnout from major exporters on Thursday after Russia’s invasion of Ukraine. After extending its submission deadline by an hour, Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), had only one offer for French wheat for April 11-21 shipment, stoking fears of supply disruptions.
• WHEAT TENDER: Jordan’s state grain buyer has issued an international tender to buy 120,000 tonnes of milling wheat which can be sourced from optional origins
• FEED WHEAT SALE: A group of importers in Thailand is believed to have purchased about 63,000 tonnes of animal feed wheat expected to be sourced from Australia in a tender concluded late on Wednesday
• FAILED CORN TENDER: Taiwan’s MFIG purchasing group rejected all offers and made no purchase in an international tender for up to 65,000 tonnes of animal feed corn which closed on Friday

PENDING TENDERS

• BARLEY-SOYMEAL TENDER: Iranian state-owned animal feed importer SLAL issued international tenders to purchase up to 60,000 tonnes of barley and 60,000 tonnes of soymeal
• 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
• 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

DOE: U.S. Ethanol Stocks Rise 0.1% to 25.507M Bbl

According to the U.S. Department of Energy’s weekly petroleum report.

• Analysts were expecting 25.618 mln bbl
• Plant production at 1.024m b/d, compared to survey avg of 1.01m

GRAIN EXPORT SURVEY: Corn, Soy, Wheat Sales Before USDA Report

• Corn est. range 600k – 1,100k tons, with avg of 854k
• Soybean est. range 800k – 2,000k tons, with avg of 1,600k

Argentine Soybean, Corn Estimates Feb. 24: Exchange

The Buenos Aires Grain Exchange releases weekly report on website.

• 2021-22 Production estimates maintained for both corn and soybean crops
• Corn harvest is 3.2% complete

Argentina Forecast for Rain Sustains Soy, Corn Harvest Estimates

Rains in the last 24 hours and the forecast for more precipitation mean the Buenos Aires Grain Exchange maintains its harvest estimates for parched soybean and corn plants, it says in a weekly report.

• Soybean estimate kept at 42m metric tons
• Corn kept at 51m
• Moderate-to-abundant rains seen for most of the Pampas growing belt from Feb. 24 to March 2, according to separate exchange weather reports
  • But a “double La Nina” event means the region may continue to experience dryness until mid-March, “causing significant losses to yields”
• NOTE: Smaller production because of the drought will be compensated by higher prices, with 2022 crop exports now estimatedat $38.9b, more than was forecast at the start of the soy/corn season in September, according to the Rosario Board of Trade

Indonesia sets March CPO reference price at $1,432.24 per tonne

Indonesia set its crude palm oil reference price at $1,432.24 per tonne for March shipments, Musdhalifah Machmud, a senior official at the coordinating economic ministry said on Friday.

The March reference price is higher than February’s $1,314.78 per tonne, and will place next month’s tax and levy rates at maximum levels of $200 per tonne and $175 per tonne respectively, unchanged from this month’s.

Indonesia’s YTD Palm Oil Exports Seen at 2.78m Tons: Agency

Indonesia, the world’s palm oil producer, seen exporting 2.78m tons of palm oil during Jan.- Feb. 24, Eddy Abdurrachman, president director of the Indonesia Oil Palm Plantations Fund Management Agency, said in a webinar on Friday.

• Overseas shipments, excluding solid products such as palm kernel expeller and palm shells, were at 1.6m tons in January, Abdurrachman said
• The agency, known as BPDPKS, collected as much as 6.22t rupiah during Jan.-Feb. 24 from all kinds of palm oil export levies
• Indonesia exported 2.68m tons of palm oil in Jan. 2021 and 1.69m tons the following month, the agency’s data show

Wilmar’s Ukraine JV Suspends Operations at Processing Plants

Wilmar International’s joint venture in Ukraine, Delta Wilmar, has suspended operations at both its processing plants on Feb. 24 amid Russia’s attack on Ukraine, the Singapore-based company said in an e-mailed statement Thursday.

• Delta Wilmar’s contribution to group’s profit is “not significant” and Wilmar does not expect a material impact on its overall business
• “Our top priority is the safety of our employees and we will continue to monitor the situation very closely:” statement
• The plants are all located in Novi Bilyary village, about 30 km (19 miles) from Odessa city

French Soft-Wheat Ratings Edge Lower in Week to Feb. 21: AgriMer

The amount of France’s soft-wheat crop rated in good or very good condition dipped to 93% as of Feb. 21, slightly lower than the prior week, FranceAgriMer data showed on Friday.

• NOTE: Dryness is expected to build in parts of France, Spain, Italy, Hungary and Romania in coming days, according to a Maxar note
• Spring barley was 28% planted, versus 18% at this time last year
• Compares with 27% the prior week

Ukraine Conflict Pushes Morocco Millers to Step Up Wheat Imports

Moroccan importers are “getting into the market” for more soft wheat purchases to boost the kingdom’s inventories of the commodity amid the conflict in Ukraine, according to Abdelkader El-Alaoui, chairman of the Moroccan millers’ group FNM.

The kingdom’s inventories hold enough soft wheat to cover four to five months of milling needs, El-Alaoui said, versus three months under normal circumstances. “We have been importing massively since” authorities lifted an import tax in November, he added.

Ukraine is a major exporter of wheat. Ukraine’s president said his nation continued to resist on the second day of the Russian invasion as the U.S. and European Union stepped up economic penalties and fighting raged north of Kyiv.

“The market now is on fire, but we are used to this,” El-Alaoui said, commenting on prices. But because Morocco expects only an “average,” or lower, harvest than a year ago, the increase in prices will not deter local importers, he added.

Sunflower Oil Shipments to India at Risk on Ukraine Conflict

• Fate of over 350,000 tons of exports uncertain, Bajoria says
• India bought 74% of sunflower oil needs from Ukraine last year

Shipments of more than 350,000 tons of sunflower oil to India, the world’s biggest buyer, are at risk as Russia’s attack on Ukraine disrupts logistics and loadings at some ports.

Traders in the South Asian nation, also the top purchaser of palm and soybean oils, have contracted to import 550,000 tons of sunflower oil from Ukraine and Russia for deliveries in February and March, according to Sandeep Bajoria, president of the International Sunflower Oil Association. About 180,000 tons have already left, but the fate of the rest is now uncertain, he said.

Supply disruptions raise the risk of a further spike in cooking oil prices in India, which imports 60% of its needs. Consumer food prices rose in January at the fastest pace in 14 months, crimping household budgets in the second-most populous nation. The government has cut taxes and imposed stockpile limits, but prices remain elevated, tracking a surge in global edible oil futures.

Ukraine and Russia account for almost 80% of the world’s sunflower oil shipments. India bought 1.89 million tons of the crude variety of the oil in the year ended October, with Ukraine supplying almost 74% and Argentina and Russia each accounting for about 12%.

Global prices of vegetable oils, used for everything from preparing cookies to frying potato chips to making shampoo, have more than doubled in two years on supply constraints, with palm and soybean oils surging to all-time highs this week on supply jitters.

The situation has become more complicated with Russia’s attack on Ukraine, triggering one of the worst security crises in Europe since World War II. Western nations warned that Kyiv could fall as fighting continued, while U.S. President Joe Biden announced additional sanctions on Russia, saying Europe is facing “a dangerous moment.”

Operational risks are increasing in the region. Bunge Ltd. suspended business at two oilseed processing facilities in Ukraine, Wilmar International Ltd’s joint venture in Ukraine shut its vegetable oil units, while Archer-Daniels-Midland Co. closed an oilseed crushing plant in Chornomorsk.

“World over, there is going to be a shortage of sunflower oil and prices will rise,” Bajoria said. Indian importers will wait for about a week before switching to palm and soybean oil purchases to boost domestic supplies, he said.

Indonesia’s Jan, Feb palm oil exports seen slowing -estate crop fund

Indonesia’s palm oil exports are estimated at 2.34 million tonnes in January, while exports between Feb 1-24 are seen at 1.70 million tonnes, Eddy Abdurrachman, chief executive of the agency in charge of collecting palm oil levies (BPDPKS), said.

In comparison, Indonesia exported 3.35 million tonnes of palm oil products in January 2021 and 2.40 million tonnes in February 2021, BPDPKS data showed.

Indonesia, the world’s biggest palm oil producer, late in January announced a restriction on palm oil exports in order to secure domestic supply and control prices of cooking oil that had shot up 40% at the start of the year. L1N2U70U2

Companies are required to sell 20% of their planned exports to local buyers at a set maximum prices for crude palm oil and olein, which had an impact on exports in February, Eddy said.

“In the beginning, there must be special preparation by the exporters to meet with requirements, thus affecting export activities,” he told an online media briefing.

Global prices of palm oil have surged to historical highs in the past year as global demand for vegetable oils recovered from the impact of coronavirus pandemic, while output from top producers Indonesia and Malaysia has slowed.

Malaysia’s Feb. 1-25 Palm Oil Exports 1,060,303 Tons: AmSpec

Shipments rise 27.9% m/m from 829,022 tons exported during Jan. 1-25, according to AmSpec Agri on Friday.

South America Beef Seen More Competitive as Grains Jump: Minerva

Higher grain prices may increase South America competitiveness on beef exports as around 90% of the region’s cattle is grass fed, while in the northern hemisphere they are mostly raised on feedlots, Minerva CFO Edison Ticle says in a conference call with investors.

• Beef may also gain competitiveness against chicken, pork as theirs feed is made from grains such as corn and wheat
• NOTE: Wheat and corn futures in Chicago surged by the maximum allowed by the exchange after the Russian attack in Ukraine
• Minerva Ebitda seen rising in 2022 amid rising beef prices, increasing cattle supplies in Brazil and strong export demand
• Beef prices in U.S. dollars have been rising in the 1Q22 vs 4Q21
• Beef imports from the U.S. remain strong
• Company is able to resume acquisitions using only its free cash flow
• Debt structure, leverage and capacity to pay dividends won’t be jeopardized, CFO said

Cargill Says Ship It Chartered Was Hit in Ukraine Waters

A ship chartered by Cargill Inc. was hit while sailing in Ukrainian waters in the Black Sea and is currently sailing south to Romanian waters to receive assistance, the U.S. agricultural trading giant said.

“The vessel and all crew are safe and accounted for,” Cargill said Thursday in a statement. The vessel was empty when the incident occurred, the company said.

The attack is the first confirmed instance of physical damage related to commodity trading in the region. Ukraine and Russia together account for more than a quarter of the global trade in wheat and about a fifth of corn. That trade has been thrown into chaos after Ukraine’s ports closed in the wake of Russia’s invasion of the country.

Cargill didn’t confirm the name of the vessel. Istanbul-based YA-SA Holding said earlier that Yasa Jupiter, a Marshall Island-flagged ship it owns, was slightly damaged by a shell after unloading coal at the Ukrainian port of Odesa. It was unclear whether the ship was deliberately targeted or who fired the shell, and the vessel is heading under its own power to the closest port for a damage assessment, YA-SA said.

Brazil farmers brace for potential fertilizer pinch due to Ukraine crisis

Brazilian agricultural exports may lose their competitive edge due to a scarcity of fertilizer and soaring prices for the key material if Russia’s invasion of Ukraine triggers Western sanctions on Russian fertilizer exports, according to analysts.

Brazil relies on imports for about 85% of its fertilizer needs. Russia is its biggest supplier of the NPK mixture of nitrogen, phosphorus and potassium.

Even before the Ukraine conflict, fertilizer prices were climbing due to global logistics issues, U.S. sanctions on Belarus and China’s absence from the market since October.

The Ukraine crisis means Brazilian growers of soybeans and other agricultural commodities are potentially in for a rough time.

The situation raises doubts about whether Brazil can expand its area planted with soy for the 2022/2023 crop, as costs may become prohibitive, Souza said.

ANDA, an association representing fertilizer companies in Brazil, said in a statement it is early to assess the impact of international sanctions stemming from Russia’s attack on Ukraine, adding it is still evaluating the effects on the fertilizer market and on the food supply chain as a whole.

ANDA acknowledged risks regarding the lack of inputs to produce fertilizers as the conflict develops, and said it will work to create alternatives to ensure supplies.

Brazil bought about 40 million tonnes of fertilizer products in 2021, a record high, with Russia accounting for some 9 million tonnes of imports, according to data compiled by Agrinvest.