Global Ag News for June 2.22

HEADLINES TODAY

Wheat prices overnight are up 12 1/2 in SRW, up 15 in HRW, up 10 3/4 in HRS; Corn is up 2 3/4; Soybeans up 9 1/4; Soymeal up $0.18; Soyoil up 0.37.

For the week so far wheat prices are down 103 3/4 in SRW, down 92 in HRW, down 97 in HRS; Corn is down 43 1/4; Soybeans down 32 3/4; Soymeal down $1.78; Soyoil down 1.09. For the month to date wheat prices are down 33 3/4 in SRW, down 22 1/4 in HRW, down 39 3/4 in HRS; Corn is down 19 1/2; Soybeans up 16 1/4; Soymeal down $0.30; Soyoil up 0.56.

Year-To-Date nearby futures are up 37% in SRW, up 43% in HRW, up 23% in HRS; Corn is up 24%; Soybeans up 28%; Soymeal up 1%; Soyoil up 39%.

Chinese Ag futures (SEP 22) Soybeans up 46 yuan; Soymeal down 10; Soyoil up 36; Palm oil up 130; Corn down 20 — Malaysian palm oil prices overnight were up 109 ringgit (+1.71%) at 6465.

There were no changes in registrations. Registration total: 1,010 SRW Wheat contracts; 23 Oats; 0 Corn; 0 Soybeans; 98 Soyoil; 0 Soymeal; 139 HRW Wheat.

Preliminary changes in futures Open Interest as of June 1 were: SRW Wheat down 3,461 contracts, HRW Wheat up 881, Corn up 2,870, Soybeans up 4,220, Soymeal up 1,200, Soyoil up 3,446.

Northern Plains Forecast: Mostly dry Thursday. Isolated to scattered showers Friday-Sunday. Temperatures near to below normal through Sunday. Outlook: Isolated to scattered showers Monday-Friday. Temperatures near to below normal Monday-Friday.

Central/Southern Plains Forecast: Isolated to scattered showers through Sunday. Temperatures near to below normal Thursday-Saturday, near to below normal north and above normal south Sunday. Outlook: Isolated to scattered showers Monday-Friday. Temperatures near to below normal north and near to above normal south Monday-Friday.

Western Midwest Forecast: Mostly dry Thursday-Friday. Scattered showers Saturday-Sunday. Temperatures near to below normal through Sunday.

Eastern Midwest Forecast: Scattered showers Thursday. Mostly dry Friday-Saturday. Scattered showers Sunday. Temperatures near to below normal Thursday-Sunday. Outlook: Isolated to scattered showers Monday-Friday. Temperatures near to below normal Monday-Friday.

Brazil Grains & Oilseeds Forecast: A front that has stalled over southern Brazil brought showers to the region over the weekend and will continue to do so through the coming weekend. The front will not make it into central growing areas where time is running out for showers to offer any benefit. Showers may be possible next week, but it is becoming too late. Southern states can still take advantage of the showers for this week then will look for some drier weather as corn gets closer to maturity.

Black Sea Forecast: Warmer temperatures and occasional periods of showers will move through the Black Sea region over the next week. Areas that have good soil moisture will benefit from the conditions while some scattered drier areas will have some stress. Overall, the region is still in good shape.

The player sheet for 6/1 had funds: net sellers of 16,000 contracts of  SRW wheat, sellers of 22,000 corn, sellers of 4,000 soybeans, sellers of 2,000 soymeal, and  buyers of 2,000 soyoil.

TENDERS

• WHEAT PURCHASE: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), said it bought 465,000 tonnes of wheat in an international tender. The purchase comprised 175,000 tonnes of Russian wheat, 240,000 tonnes of Romanian wheat and 50,000 tonnes of Bulgarian wheat, it said.
• SOYBEAN SALE: The U.S. Department of Agriculture confirmed private sales of 132,000 tonnes of U.S. soybeans to China, including 66,000 tonnes of old-crop soy and 66,000 tonnes of new-crop supplies.
• BARLEY PURCHASE: Jordan’s state grain buyer purchased about 60,000 tonnes of animal feed barley in an international tender that closed on Wednesday.

PENDING TENDERS

• RICE TENDER: Egypt’s state grains buyer, the General Authority for Supply Commodities, was seeking at least 25,000 tonnes of white rice in a tender-practice on the account of the Holding Company for Food Industries. Offers were to be submitted by May 19.
• WHEAT TENDER: Algeria’s state grains agency OAIC issued an international tender to buy milling wheat for shipment to one or both of Mostaganem and Tenes, two small ports, suggesting a limited volume may be purchased, traders said. The optional-origin tender specified possible shipment dates covering all of July and August if wheat is sourced from main supplier regions including Europe, with shipment required one month earlier if wheat comes from South America or Australia, the traders said. The bidding deadline was May 31.
• WHEAT TENDER UPDATE: Bangladesh’s state grains buyer received the lowest price offer of $464.55 a tonne CIF liner out in an international tender to import 50,000 tonnes of wheat, officials from the country’s grain purchasing agency said on Monday. Trading house Bagadiya Brothers submitted the lowest offer in the tender, which closed on Sunday, the Directorate General of Food added. No purchase had yet been reported and the offers were still being considered, the officials said.

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

Output and stockpile projections for the week ending May 27 are based on seven analyst estimates compiled by Bloomberg.

• Production seen higher than last week at 1.017m b/d
• Stockpile avg est. 23.754m bbl vs 23.712m a week ago

U.S. Soybean Crushings at 181M Bushels in April: USDA

USDA releases monthly oilseed report on website.

• Crushing 6.5% higher than same period last year
• Crude oil production 7.6% higher than same period last year
• Crude and once-refined oil stocks up 11.3% y/y

U.S. Corn Used for Ethanol at 414.7M Bu in April

The following table is a summary of U.S. corn consumption for fuel and other products, according to the USDA.

• Corn for ethanol was 1.8% higher than in April 2021
• DDGS production fell to 1.705m tons

Ukraine Grain Group Raises Harvest Forecast for Corn and Wheat

Ukraine’s Grain Association raised its forecast for this year’s wheat harvest by 5.5% to 19.2m tons, it said in an emailed statement on Wednesday.

• Outlook for the corn crop is raised by 13% to 26.1m tons
• Forecast for the sunflower harvest is cut by 8% to 9m tons
• Ukraine’s wheat exports seen at about 10m tons in the upcoming season that starts in July
  • Corn exports may reach 15m tons

India allows small amount of wheat to move out after ban, big stocks still stuck – Reuters News

India has allowed wheat shipments of 469,202 tonnes since banning most exports last month, but at least 1.7 million tonnes is lying at ports and could be damaged by looming monsoon rains, government and industry officials told Reuters.

Shipments that have been allowed moved mainly to Bangladesh, the Philippines, Tanzania and Malaysia, said a senior government official, who also stated the total quantity.

The ban pulled Indian wheat exports down to 1.13 million tonnes in May from a record 1.46 million tonnes in April, the official said, declining to be named.

India, the world’s second-biggest wheat producer, imposed a general ban on exports on May 14 as a scorching heat wave curtailed output and pushed domestic prices to record highs.

Exceptions were allowed for shipments backed by letters of credit that had already been issued and those to countries that requested supplies to meet their food security needs.

But even after the departure of some wheat, at least 1.7 million tonnes remained piled up at various ports, three dealers with global trading firms told Reuters.

Before the ban, exporters moved unusually large quantities to ports, because the crop was then expected to be strong and the government was encouraging them to replace Black Sea supply lost because of the war in Ukraine.

They expected New Delhi to authorize shipments this year of 8 million to 10 million tonnes or even more, compared with 7.2 million tonnes last year. India has received requests to supply more than 1.5 million tonnes of wheat from several countries facing shortages.

Good Monsoon Outlook in India Tempers Fears of Rice Export Curbs

• Global markets are worried that India may limit rice exports
• Supply upheaval worldwide gives India more markets for goods

Ample rice reserves in India, the world’s biggest exporter of the food staple, and expectations for bountiful monsoon rains should allay concerns about the possibility of any “drastic” measures to curb exports, according to National Commodities Management Services Ltd.

Global markets are fretting that rice may be next on the agenda after India restricted wheat and sugar exports. Unlike other commodities such as edible oils and wheat, which surged on supply disruptions after Russia’s invasion of Ukraine, rice has been broadly stable on bumper output and huge stockpiles.

UK Food Makers Can Swap in Corn Oil as Sunflower Supply Runs Dry

• Russia’s invasion of Ukraine has stymied sunflower oil exports
• British companies can now use corn oil without changing label

The list of products that UK food makers can substitute for sunflower oil is getting longer as companies are struggling to find supplies due to the war in Ukraine.

Makers of food from crisps to cookies and frozen items will temporarily be allowed to use corn oil instead of sunflower oil without changing labels, the UK food regulator said Wednesday in a statement. It has already allowed manufacturers to switch for palm, coconut, and soybean oil.

Ukraine accounts for almost half of the world’s sunflower oil exports, which it usually ships by sea. Russia’s invasion in February blocked Ukraine’s ports, causing shortages and sending prices soaring as much as 1,000%. Some supermarkets have limited the number of bottles that consumers can buy per purchase.

Manufacturers could be grappling with shortages for some time as it’s not clear how soon shipping activity can realistically restart. Russia has denied any responsibility for blocking shipments, calling on Ukraine to remove mines from its harbors but offering no assurances that it won’t attack them if it does.

Some alternatives to sunflower oil are less healthy and more damaging to the environment. Products like palm oil and soy have come under increasing scrutiny in recent years over their role in deforestation.

Argentine grain exporters sold $4.2 bln in May, setting new record

Argentina’s grain industry sold $4.2 billion in May, the best month since monthly records started, the Argentine Chamber of the Oil Industry (CIARA) and the Grain Exporters Center (CEC) said in a report on Wednesday.

On a month-on-month basis, the exports increased 33%, and the country’s foreign exchange income from agro-exports in the first five months of the year totaled $15.3 billion, the report said.

In a statement, the institutions said grain exports have been affected by the sharp movements in the international market, government-set export caps, and by a “huge idle capacity” of the soybean crushing industry.

Soybean meal is the country’s main export product, representing 14.2% of the total exported. It is an industrialized by-product generated by this agro-industrial complex, which currently has a high idle capacity close to 50%.

The oilseed-grain complex, including biodiesel and its derivatives, accounted for 48% of Argentina’s total exports last year.

Posco International Partially Resumes Grain Terminal in Ukraine

Posco International has partially resumed operations at its grain terminal in Ukraine as clients requested shipment amid concerns over Ukraine grain supply network disruption, Posco says in statement.

• Exported 2,000 tons of wheat
• Posco International’s grain terminal had been shut down since Feb.; the terminal currently has 115,000 tons of wheat, corn and barley
• Supply route using ships is blocked due to the blockade of the Black Sea port, but transportation to the western border area of Ukraine through land routes such as Izov, Vadul-Siret, and Uzhgorod is possible

Indonesia has issued palm oil export permits for nearly 180,000 t – official

Indonesia, has issued export permits for 179,464 tonnes of palm oil as of June 2, a senior trade ministry official said on Thursday, after a ban on shipments was lifted last week.

The government has issued 160 export permits to 18 companies for the shipments, said Oke Nurwan of the trade ministry.

Indonesia imposed a three-week export ban from April 28 to control soaring prices of cooking oil, made from palm oil, at home.

While exports have resumed, the government has put in place a obligatory domestic sales requirement for producers where export permits will only be granted if they have sold a portion of their products to the local market.

The government expected to allocate 1 million tonnes of palm oil exports based on domestic sales made during the export stoppage.

So far, permits have been issued for 87,109 tonnes of refined, bleached, and deodorised (RBD) palm oil and 90,255 tonnes of RBD olein, while the rest were issued for cooking oil, according to trade ministry data provided by Oke.

China to sell 500,000 T of imported soybeans from reserves on June 10 – trade centre

China will sell 500,000 tonnes of imported soybeans from its state reserves on June 10, the National Grain Trade Center said on Thursday.

Fertilizer Demand, Prices Weaken as US Farmers Wrap Up Planting

US urea, phosphate and potash prices face extended downward pressure as spring planting winds down after a delayed start due to inclement weather. The season’s late start shortened the application window for ammonia and pressured dry fertilizer volume. North American potash inventory reached a six-year high.

Fertilizer Prices Drop as Demand Eases

Fertilizer prices kept falling as the spring season winds down. New Orleans (NOLA) urea barges were down $20-$35 a short ton (st) in early-week trading, with urea declines also reported in the Northern Plains, Eastern US and Eastern Canada. Prompt ammonia prices were off $25/st in the Eastern Corn Belt, and urea ammonium nitrate (UAN) also drifted lower across the inland US, as demand for corn side-dressing continues. NOLA phosphate prices were down $60-$100/st vs. last week, with more reports surfacing of diminished spring application volume due to weather and price resistance. June phosphoric acid pricing was also lower in the Midwest.

Improved planting conditions and June weather prospects increase U.S. soy production – Refinitiv Commodities Research

2022/23 U.S. SOYBEAN PRODUCTION: 125 [118–133] MILLION TONS, UP 1% FROM LAST UPDATE

As planting pace narrows the gap with historical averages after a wet start to the campaign, updated mid- and long-term weather forecasts slightly increase 2022/23 U.S. soybean production to 4.60 [4.36-4.88] billion bushels. In May’s WASDE (12 May), USDA placed U.S. soy production at 126.3 million tons, slightly above our median projection. Our current estimate puts planted area at 90.1 million acres, up 3% from last season, which is 0.9 million acres below the USDA March Prospective Plantings report figure of 91 million acres (31 March). A recently released Reuters Poll of Analysts (25 March) placed U.S. soybean crop area at 88.7 [86.0–92.2] million acres. The next USDA survey-based estimate of acreage will be released in the 30 June Acreage report.

After cold and wet conditions kept plantings slow by early May (and at times into the first few days of mid-May), mild and dry conditions throughout most of the Midwest and Plains through last week allowed for a meaningful catch up in the core Soy Belt states. The latest Crop Progress report of the season (31 May) estimated national-level sowings at 66%, a whopping 16% jump from last week, though still behind last year’s 83% and the five-year average of 67%. While most key producing regions of the central/eastern Soy Belt, including the “I” states (i.e. Illinois, Iowa and Indiana), have seen a huge catch-up over the past two weeks, some of the Northern crop areas continue to suffer from severe delays (most notably the Dakotas and Minnesota, where plantings are 25-40% behind schedule), warranting close attention.

The next 15 days should feature mix conditions for most major production areas in the Midwest and Central Plains, with widespread wetness to follow during the second/third week of the month after some lingering dry conditions wrap up early June. A recently released June outlook from Refinitiv Weather Research suggests the warmth will continue through the end of June, with few precipitation extremes. Given generally high soil moisture levels, warmth in June could boost crop development.

EPA Biofuel-Blending Mandates to Hew to Earlier Proposals

Final 2022 quotas track a proposal to use 20.77 billion gallons of renewable fuel

The Biden administration is set this week to finalize biofuel-blending mandates that largely track plans it already proposed in December, according to several people familiar with the matter.

Environmental Protection Agency officials have told industry representatives to expect final 2022 quotas to be aligned with that initial proposal, which laid out a requirement for using 20.77 billion gallons of renewable fuel this year, said the people, who asked not to be named before a formal announcement.

The approach reflects a bid by the Biden administration to balance competing oil and refining industry interests, while trying to tame record-high gasoline prices and climbing food costs. Yet it would be a blow to oil refiners who said the proposed 2022 quota, which requires biofuel to make up at least 11.8% of transportation fuels, would end up boosting prices at the pump. It would raise industry compliance costs and strain the available pool of biofuel credits that refiners use to prove they have fulfilled annual quotas. Most gasoline sold in the US is made up of 10% ethanol.

The proposed 2022 quota would represent the highest-ever biofuel target EPA has established under the renewable fuel program since its creation 17 years ago.

Spokespeople for the EPA didn’t immediately respond to emailed requests for comment.

Ethanol and biodiesel producers have lobbied the White House to boost targets, arguing the proposed quotas underestimate potential production.

The EPA is on track to issue the proposal Friday, fulfilling a deadline under a legal settlement with advocates for corn-based ethanol. The agency is set to retroactively lower already established targets for 2020, partly to adjust for pandemic-battered fuel demand that year.

The final rule is set to include slightly higher-than-proposed targets for biofuel blending in 2021, based on updated consumption data that year, two of the people said. The initial proposal, coming weeks before the end of the year, did not reflect final government data on renewable fuel demand in 2021.

Vietnam Works With US to Make First African Swine Fever Vaccine

Vietnam has worked with US experts to produce the first global commercial vaccine against African swine fever, Deputy Minister of Agriculture Phung Duc Tien said on the government website.

• The country partnered with scientists at the Agriculture Research Service of the US Department of Agriculture: Tien
• The government allowed the import in 2020 of an attenuated virus strain created by US experts to help develop the vaccine: Tien
• The USDA confirmed the safety and efficacy of the vaccine NAVET-ASFVAC, produced by Navetco National Veterinary JSC, in a May 17 letter to the ministry’s animal health department: Tien
• Vietnam is looking to export the shots, which offered immunity lasting six months during trials: Tien