Global Ag News for Feb 9.22

 TODAY – EIA WEEKLY PETROLEUM STATUS REPORT, USDA SUPPLY & DEMAND

USDA report day! Wheat prices overnight are down 4 1/2 in SRW, down 3 3/4 in HRW, down 6 3/4 in HRS; Corn is up 5; Soybeans up 10 1/4; Soymeal up $0.10; Soyoil up 0.52.

For the week so far wheat prices are up 12 1/2 in SRW, up 14 1/4 in HRW, up 26 1/4 in HRS; Corn is up 17 1/2; Soybeans up 27 1/2; Soymeal up $1.50; Soyoil down 1.52. For the month to date wheat prices are up 13 in SRW, up 16 1/4 in HRW, up 27 1/4 in HRS; Corn is up 11 1/4; Soybeans up 88 3/4; Soymeal up $37.70; Soyoil down 0.84.

Chinese Ag futures (MAY 22) Soybeans up 13 yuan ; Soymeal up 18; Soyoil down 204; Palm oil down 262; Corn down 3 — Malaysian palm oil prices overnight were up 145 ringgit (+2.66%) at 5594.

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 8 were: SRW Wheat down 3,926 contracts, HRW Wheat down 2,589, Corn up 8,715, Soybeans up 5,181, Soymeal up 4,236, Soyoil down 8,816.

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

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

The player sheet for Feb. 8 had funds: net buyers of 6,000 contracts of  SRW wheat, sellers of 8,500 corn, buyers of 7,500 soybeans, buyers of 500 soymeal, and  sellers of 8,000 soyoil.

TENDERS

• SOYBEAN SALE: The U.S. Department of Agriculture (USDA) reported private sales of 132,000 tonnes of U.S. soybeans to China and 332,000 tonnes to unknown destinations. The sales were for shipment in the 2022/23 season.
• CORN SALES: Turkish grain board TMO has provisionally bought a total 325,000 tonnes of corn in an international tender for the same volume on Tuesday
• BARLEY SALE: Jordan’s state grain buyer has purchased about 60,000 tonnes of animal feed barley to be sourced from optional origins in an international tender which closed on Tuesday
• CORN TENDER: Taiwan’s MFIG purchasing group has 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, SOYMEAL TENDER: An importer group in the Philippines is tendering to purchase animal feed wheat and soymeal with total tonnage sought unclear.
• 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

Brazil to Export 7.5m Tons of Soybeans in February: Anec

Brazil’s expected soybean exports for February are less than the 9.9m tons estimated before last week, based on shipment schedules, says grain-exporter group Anec.

• Weather woes and harvest delays are contributing to a lack of soybeans at ports, pushing back loading times and lifting premiums
• The premium buyers pay above futures to stimulate sales is up 59% this year, reaching $1.315 a bushel on Tuesday in Santos
• Brazil exported 5.5m tons of soybeans in February 2021 and 14.9m tons last March

Canada Dec. 31 Wheat Stocks Fell 38% Y/y; Canola -43%: StatsCan

Statistics Canada in Ottawa releases prinicpal field crops report for stocks as of Dec. 31.

• Total wheat inventories fell to 15.56m tons vs 25.09m in the same period of previous year
  • Below survey est. of 17.88m
• Durum wheat stocks fell 56.4% y/y to 2.09m tons, est. 2.12m tons
• Canola stocks fell 43.1% y/y to 7.56m tons, est. 7.44m tons
• Barley stocks fell 43.6% y/y to 3.15m tons, est. 3.34m tons

ETHANOL: U.S. Weekly Production Survey Before EIA Report

• Production seen lower than last week at 1.035m b/d
• Stockpile avg est. 26.122m bbl vs 25.854m a week ago
• Would be the highest since April 2020

EU Soft-Wheat Exports Rise 4.3% Y/y; China Moves to No. 2 Buyer

Soft-wheat shipments during the season that began July 1 reached 16.9m tons as of Feb. 6, versus 16.2m 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 (2.577m tons), China (1.644m tons) and Egypt (1.641m tons)
  • NOTE: China ranked as the third-largest market as of last week
• EU barley exports at 5.14m tons, versus 4.75m tons a year earlier
• EU corn imports at 9.79m tons, against 10.3m tons a year earlier

China Expects Imported Corn to Cost More on Tight Supply: CASDE

China increased its forecast for imported corn costs for the 2021-22 season as global supply tightens, according to China Agricultural Supply and Demand Estimates.

• The agriculture ministry’s outlook committee raised price forecast for corn delivered to China by 150 yuan/ton to 2,350-2,550 yuan
• Sharp rise in input costs like fertilizers spurred U.S. farmers to switch acreage from corn to soybeans
• Lack of rain in parts of Brazil also affected production expectations
• Global soybean supply is tightening due to dry weather in Argentina and Brazil; prices to remain elevated in the near term
• Outlook for 2021-22 cotton imports cut by 200k tons to 2.2m tons; end-stock forecast to fall to 7.3m tons
  • Sales from China’s state reserves to discourage imports
• CASDE maintains 2021-22 supply and demand forecasts for soybeans, edible oils and sugar

Indonesia Trade Ministry Issues Regulation on Palm Oil Exports

Indonesia’s trade ministry requires exporters of palm oil products including crude palm oil, olein, stearin and biodiesel to get permits before shipping products overseas, according to a regulation on its website.

• Export permit application must include realization of domestic distribution of crude palm oil and/or RBD palm olein since Jan. 25
  • Data on local supply volume and selling price must follow guidance from the ministry
• The regulation is valid from Feb. 15
• Export permits for crude palm oil; refined, bleached, and deodorized palm olein and used cooking oil that were issued previously can be valid 30 days after this regulation is effective

PKN Orlen Plans to Start Producing HVO Biofuel in Early 2024

PKN Orlen plans to start production of HVO standard biofuel at Plock in the second quarter of 2024, Poland’s state oil refiner said by email.

• NOTE: PKN had outlined plans to produce fuel from rapeseed oil or used cooking oil at Plock but had not previously given a timeframe
• Separately, PKN is also building a visbreaker at Plock, which will start operating in the first quarter of 2023; project was about 60% complete at the end of last year
• A hydrocracker being added at its Lietuva refinery in Lithuania is scheduled to start up in the fourth quarter of 2024
• READ: Jan. 20, Renewable Fuelmakers Can’t Get Their Hands on Enough Animal Fat

Australian Wheat Crop Set For Record 39 Million Tons: IKON

IKON Commodities raised its forecast for Australia’s 2021-22 wheat crop to a record 39 million tons, driven by above average yields across major growing regions, and it expects shipments to soar as exporters take advantage of supply-chain improvements nationwide.

• Wheat production outlook was raised by 1.8%, or 0.7m tons, from previous forecast; compares with 35.3m tons a year earlier and 10-year average of 24.5m tons
• Wheat shipments are expected to hit a record 25.5m tons if current strong export pace is maintained through peak shipping season, as exporters utilize expansions in supply chains across the country
  • Total grain exports are expected to surpass 40m tons for the first time
  • After a delayed start, canola export pace is picking up with regular vessels heading to the EU, IKON said
  • During past month, three new rail sets have been added to supply QUBE Agri export terminals at Newcastle and Port Kembla in New South Wales; previous upgrades to logistical capacity in Western Australia, as well as increased port capacity in Victoria and South Australia are supporting the pace of shipments, IKON said
• Total deliveries from farmers to the major grain storage groups increased by 7m tons to 39.8m when compared to the 2020-21 season, driven mostly by a record harvest in Western Australia as well as slightly larger production from the east coast
  • Grain receival reports also indicate a drop in storage market share for GrainCorp and Viterra with growers and competitors both expanding capacity, while CBH was able to hold market share in a record season for Western Australia, IKON said
• Other 2021-22 production forecasts:
  • Barley 14.2m tons, up 2.7% from prior estimate; compares with 13.2m tons last year
  • Canola 6.8m tons, up 3.1% from prior estimate; vs 4.8m tons last year

China Missed U.S. Trade-Deal Purchase Promises by One-Third

• Nation bought 62.9% of the goods it promised in early 2020
• Biden administration said it would hold China accountable

China came up more than one-third short of its purchase commitments for goods in the trade deal that the world’s second-largest economy reached with the U.S. during the Trump administration.

The nation bought 62.9% of the extra goods that it had promised as part of $200 billion in purchases in the so-called phase one deal in the two years through the end of 2021, according to a Bloomberg News analysis of data shared by the Commerce Department’s Census Bureau on Tuesday.

Energy was the area where China most missed its targets, buying only about one-third of the exports that it pledged. The Asian nation was closest to achieving its targets for agricultural goods, meeting about 83% of its commitments. In manufacturing goods, where China had committed to the biggest net increase, the nation bought less than 65% of the amount promised.

Russia Divides Upcoming Grain-Export Quota Among 206 Traders

Russia’s Agriculture Ministry divided the grain export quota, which will apply from Feb. 15 through June, among 206 traders, it says in a statement.

Argentina raises domestic biofuel prices

Argentina has raised domestic prices for both sugarcane and corn-based bioethanol, which are mandatory to mix with gasoline in the country, the government said in the official gazette on Tuesday.

According to the economy ministry’s energy department, bioethanol prices were set at 65.420 pesos ($0.6197) per liter from 59.350 pesos previously. The new prices are valid for transactions carried out from Feb. 2, it said.

Amid high domestic inflation of 50.9% in 2021, biofuel prices are periodically updated to remain competitive in Argentina, which is one of the world’s largest biodiesel producers.