Global Ag News for Jan 27.22

TODAY  – EXPORT SALES

Wheat prices overnight are down 2 1/4 in SRW, down 1 3/4 in HRW, up 2 1/2 in HRS; Corn is down 1/2; Soybeans up 3 1/4; Soymeal up $0.11; Soyoil up 0.29.

For the week so far wheat prices are up 12 3/4 in SRW, up 20 3/4 in HRW, down 17 1/4 in HRS; Corn is up 10 1/4; Soybeans up 28 1/2; Soymeal up $0.89; Soyoil up 1.21. For the month to date wheat prices are up 22 in SRW, up 12 1/2 in HRW, down 63 1/4 in HRS; Corn is up 33 1/4; Soybeans up 104; Soymeal up $2.50; Soyoil up 7.69.

Chinese Ag futures (MAY 22) Soybeans down 16 yuan ; Soymeal up 72; Soyoil up 170; Palm oil up 216; Corn up 4 — Malasyian Palm is up 115. Malaysian palm oil prices overnight were up 115 ringgit (+2.16%) at 5444.

There were no changes in registrations. Registration total: 1,900 SRW Wheat contracts; 21 Oats; 50 Corn; 316 Soybeans; 143 Soyoil; 0 Soymeal; 92 HRW Wheat.

Preliminary changes in futures Open Interest as of January 26 were: SRW Wheat up 3,656 contracts, HRW Wheat up 2,546, Corn down 4,232, Soybeans up 6,941, Soymeal up 246, Soyoil up 5,370.

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

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

The player sheet for Jan. 26 had funds: net sellers of 12,000 contracts of  SRW wheat, buyers of 7,500 corn, sellers of 15,000 soybeans, buyers of 5,500 soymeal, and  buyers of 5,500 soyoil.

TENDERS

• WHEAT PURCHASE: Algeria’s state grains agency OAIC purchased milling wheat in an international tender which sought shipment to two ports only
• CORN PURCHASE: South Korean animal feedmaker Nonghyup Feed Inc. (NOFI) is believed to have purchased around 193,000 tonnes of animal feed corn in a tender
• CORN PURCHASE: South Korea’s Major Feedmill Group (MFG) purchased about 69,000 tonnes of animal feed corn to be sourced from any worldwide origins in an international tender
• FEED WHEAT PURCHASE: South Korea’s NOFI also purchased around 55,000 tonnes of animal feed wheat to be sourced from optional origins in an international tender
• FEED WHEAT PURCHASE: South Korea’s Feed Leaders Committee (FLC) purchased about 60,000 tonnes of animal feed wheat from optional origins in a private deal without issuing an international tender
• WHEAT PURCHASE UPDATE: An importer group in the Philippines is believed to have bought around 35,000 tonnes of animal feed wheat sourced from Australia at around $356 to $359 a tonne c&f in a tender for the same volume which closed on Tuesday
• FEED WHEAT TENDER: Three importer groups in the Philippines tendered to purchase animal feed wheat with total volume sought unclear
• BARLEY TENDER POSTPONED: Jordan’s state grains buyer is believed to have postponed an international tender to purchase 120,000 tonnes of animal feed barley which closed on Wednesday with no purchase made

PENDING TENDERS

• BARLEY, CORN, SOYMEAL TENDER: Iranian state-owned animal feed importer SLAL issued international tenders to purchase up to 60,000 tonnes of animal feed barley, 60,000 tonnes of feed corn and 60,000 tonnes of soymeal
• WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy a total of 47,841 tonnes of food-quality wheat from Australia in a regular tender that will close late on Jan. 27.
• RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 46,344 tonnes of rice to be mainly sourced from China with some from Thailand
• 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
• WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy 120,000 tonnes of milling wheat which can be sourced from optional origins

DOE: U.S. Ethanol Stocks Rise 3.7% to 24.476M Bbl

• Analysts were expecting 23.955 mln bbl
• Plant production at 1.035m b/d, compared to survey avg of 1.043m

Brazil 2022 Soy Exports Seen Reaching 85.5M Tons: Safras

Estimate is 1% lower than the 86.1m tons expected for 2021, consulting firm Safras & Mercado says in emailed report.

• Soy crushing seen at 47.5m tons in 2022, an 2% increase compared to 2021 estimate of 46.5m tons
• Soy imports seen at 1m tons in 2022, 16% rise y/y
• Total soy supply seen down 2% to 139.13m tons in 2022
• Ending stocks expected to fall 56% to 2.53m tons

Planalytics Lowers Argentine Soy Crop Forecast to 2.85 Tons/Ha

Outlook for this year’s crop yield is slightly down from previous forecast of 2.86 tons/hectare, according to data issued by Planalytics on Wednesday.

• Minor declines across two out of three major growing regions
• Yield in key provinces versus previous Planalytics forecast (in tons/hectare):
  • Buenos Aires unchanged at 2.72
  • Sante Fe 3.15 vs 3.17
  • Cordoba 3.16 vs 3.17

Planalytics Lowers Brazil Soy Forecast to 3.39 Tons/Hectare

Outlook for this year’s crop yield is down from previous forecast of 3.44 tons/hectare, according to data issued by Planalytics on Wednesday.

• Declines across most of Brazil’s major growing regions
• Yield in key states versus previous Planalytics forecast two weeks earlier (in tons/hectare):
  • Mato Grosso 3.56 vs 3.59
  • Parana 3.12 vs 3.19
  • Rio Grande do Sul 2.89 vs 3.06
  • Goias 3.70 vs 3.68

IHS Markit trims 2022 U.S. corn, soy plantings forecast, document shows

Private analytics firm IHS Markit Agribusiness on Wednesday trimmed its forecasts of U.S. corn and soybean plantings for 2022 compared with its mid-December projections, according to portions of an IHS client note seen by Reuters.

• The firm projected U.S. 2022 corn plantings at 91.489 million acres, down from its Dec. 16 forecast of 91.578 million acres, and down from the 93.357 million acres that the U.S. Department of Agriculture said farmers planted in 2021.
• IHS forecast 2022 soybean plantings at 87.805 million acres, down from its Dec. 16 figure of 88.815 million acres but above the USDA’s estimate of 2021 soybean plantings of 87.195 million.
• IHS matched the USDA’s Jan. 12 estimate of U.S. 2022 winter wheat plantings at 34.397 million acres, up from the 33.648 million acres that U.S. farmers planted for 2021.
• Spring wheat plantings (excluding durum) for 2022 were seen by IHS at 12.010 million acres, down from the 12.720 million projected in mid-December but up from 11.420 million acres seeded in 2021.
• For durum, IHS lowered its forecast of 2022 plantings to 1.750 million acres, from 1.850 million last month but still up from the 1.635 million acres planted in 2021.
• IHS Markit projected U.S. 2022 plantings of Upland cotton at 11.702 million acres and Pima cotton plantings at 132,000 acres. The figures compare with the firm’s mid-December forecasts of 11.716 million acres for Upland cotton and 128,000 acres for Pima.

Argentina soybean production down again despite recent soil moisture recovery

2021/22 Argentina soybean production is cut by 3% to 43.6 [38.7–47.9] million tons amid unfavorable torrential rains in the eastern Pampas, despite overall soil moisture recovery across the rest of the country. Our current estimate puts planted area at 16.3 million hectares, slightly above the Bolsa de Comercio in Rosario’s 16.2 million hectares, but below 16.4 million hectares reported by Bolsa de Cereales in Buenos Aires. In January’s WASDE (12 January), USDA placed Argentina soybean production at 46.5 million tons, down from its previous estimate of 49.5 million tons. Bolsa de Cereales in Buenos Aires and Bolsa de Comercio in Rosario currently forecast production at 44 and 40 million tons, respectively.

The past two weeks featured widespread coolness and wet conditions across the Pampas, except the areas to the far west of La Pampa/San Luis and some portions of northern Santiago del Estero, where average or below average precipitation was observed. Some torrential downpours took place in northern Buenos Aires and Entre Ríos as well as eastern Córdoba and southern Santa Fe (150 mm in total and up to 100 mm above normal), causing localized flood and water logging problems. Plantings were largely suspended for several days in these areas, and although the inundation was relatively short-lived, it is deemed to have caused potentially negative impacts on early crop development.

Vegetation densities derived from satellite imagery remain below historical median levels across nearly all major production regions in the Pampas (except in La Pampa), reflecting the ongoing dryness concerns despite recent beneficial rainfall. Soybean planting is 97% complete nationally according to the Ministry of Agriculture, now behind last year’s 99% and the 98% five-year average. Bolsa de Cereales in Buenos Aires also reported a progress of 94.8%, largely behind schedule. The latest ENSO outlook by the Refinitiv’s Weather Research team (12 January) indicates that key forecast indicators increasingly support a neutral negative state during March-May, much of Argentina’s harvest season. Dryness is favored in most crop areas of the Pampas as a result, which should bode well for the season-ending activities.

Paraguay soybean production down again as abnormal warmth continues to surge

2021/22 Paraguay soybean production is cut by 4% to 8.85 [8.03–9.47] million tons as hot and dry weather continues to worsen already poor soil moisture conditions in key southeastern crop regions. Our median production estimate is below the USDA World Agricultural Outlook Board (WAOB)’s 8.5 million tons, which assumes national level area and yield at 3.2 million hectares and 2.66 tons per hectare (tph), respectively (vs. Refinitiv Ag Research’s 3.36 million hectares and 2.63 tph, respectively).

USDA FAS Maintains South Africa Corn Crop Est. Despite Flooding

South Africa’s 2021-22 corn harvest is seen at 16.1m tons, unchanged from a prior estimate, USDA’s Foreign Agricultural Service says in a report.

• NOTE: That’s below the official USDA estimate of 17m tons
• “Excessive rainfall during December to early January caused damage to planted crops in some areas that could impact crop size, although the extent will only become clear over the next few months”
• South Africa should remain net corn exporter

Ukraine Says China Refuses to Restructure Grain Trader’s Debt

Export-Import Bank of China rejected the proposal of Ukraine’s government-controlled grain trader State Food & Grain Corporation to restructure debt the company owes to the Chinese lender, the press office of Ukraine’s Economy Ministry said in an email.

• Talks will be continued during a trip of Ukraine’s delegation to Beijing for Olympic games next month
• Statement doesn’t provide details of the restructuring offer
• NOTE: Ukraine Helps State Food & Grain Corp. Pay $96m Owed to China
  • The grain trader paid $8.8m out of $96.4m that Eximbank received this week; the rest was paid by Ukraine’s government
  • State Food & Grain Corporation still needs to pay more than $1b to the Chinese lender through 2027

Indonesia Sets 20% Local Supply Rule for Palm Oil Exporters (1)

Govt requires Indonesian palm oil exporters to allocate 20% of their shipment volume for local supply, according to Trade Minister Muhammad Lutfi.

• Rule effective from Thursday, Lutfi said in a media briefing
• Price set at 9,300 rupiah (0.65 US cent) per kg for crude palm oil and 10,300 rupiah for olein under the domestic market obligation rule
• Govt to set price ceiling for local sales of cooking oil, effective Feb. 1:
  • Bulk cooking oil at 11,500 rupiah per liter
  • Simple packaged cooking oil at 13,500 rupiah
  • Premium cooking oil at 14,000 rupiah

China’s Top Food Firms to Restructure Storage, Processing Units

China’s food giant Cofco will form an oilseed crushing and processing venture and stockpiler Sinograin will set up a grain storage venture as part of an “equity cooperation,” the State-owned Assets Supervision and Administration Commission said on its WeChat account Thursday.

• NOTE: China has been planning a shake-up of its massive state-run food companies in a move that’s set to reverberate around global agricultural markets, Bloomberg reported in 2019

Urea Price Drop Signals Spring Ammonia Correction: Weekly Wrap

Urea’s relative value portends a steep drop in ammonia prices ahead of spring demand. Spring anhydrous offers remain at $1,300-$1,350 a short ton in the Corn Belt despite urea’s 27% drop from December’s peak of $855 a ton. On a nutrient basis, ammonia is trading at the highest premium to urea since October 2008. Should the products return to an average spread, ammonia would trade at $900 a ton in the Corn Belt, down $450 from the prompt price. Large anhydrous applications in 4Q suggest corn farmers will switch to more economical urea in spring.

CF Industries and Nutrien are the largest publicly traded North American ammonia producers. U.S. farmers apply anhydrous ammonia in the fall and spring, with the former being the larger season.

U.S. crop insurance payouts rise sharply as climate change worsens droughts, floods

Insurance payments to U.S. farmers for crops lost to droughts and flooding have risen more than threefold over the past 25 years, according to an analysis of federal data by the Environmental Working Group (EWG) released on Thursday.

The report reinforces concerns that insuring the nation’s crops will get more expensive for insurance companies, farmers and taxpayers as climate change drives more erratic weather events that disrupt agriculture.

The federal government pays about 60% of the nation’s crop insurance premiums through taxpayer subsidies, according to the Congressional Budget Office, and those premiums tend to rise as insurance payouts grow.

Insurance payments to farmers due to drought rose more than 400% between 1995 and 2020 to $1.65 billion, while payments due to excess moisture – like floods – rose nearly 300% to $2.61 billion, according to the nonprofit environmental group, which examined publicly available data from the U.S. Department of Agriculture.

During the period analyzed by EWG, the number of insured acres grew just 84.5%, according to the data from the department’s Risk Management Agency, which administers the federal crop insurance program.

“As extreme weather has become more frequent, the climate crisis has already increased insurance payments and premium subsidies. These costs are expected to go up even more, as climate change causes even more unpredictable weather conditions,” EWG said in the report.

The report did not detail average increases in premiums since 1995. The cost of insuring crops, however, could increase between 3.5% and 22% by 2080 due to climate change, even if farmers adapted what and where they plant, according to a 2019 USDA report.

The federal crop insurance program requires farmers to meet minimal conservation standards, like not planting on land highly vulnerable to erosion.

But Anne Weir Schechinger, the Midwest director of EWG, said those standards should be tougher. “The program needs to be reformed so it encourages farmers to be resilient to extreme weather events that we know are ahead,” she said.