Global Ag News for June 23.22

HEADLINES TODAY

Wheat prices overnight are down 16 1/4 in SRW, down 21 1/2 in HRW, down 15 in HRS; Corn is down 19 3/4; Soybeans down 36; Soymeal down $1.09; Soyoil down 1.06.

For the week so far wheat prices are down 70 3/4 in SRW, down 85 1/2 in HRW, down 77 3/4 in HRS; Corn is down 53 1/4; Soybeans down 94 1/2; Soymeal down $1.69; Soyoil down 4.31. For the month to date wheat prices are down 125 in SRW, down 147 3/4 in HRW, down 156 3/4 in HRS; Corn is down 37 1/2; Soybeans down 69; Soymeal down $13.00; Soyoil down 8.31.

Year-To-Date nearby futures are up 25% in SRW, up 27% in HRW, up 11% in HRS; Corn is up 28%; Soybeans up 22%; Soymeal up 3%; Soyoil up 25%.

Chinese Ag futures (SEP 22) Soybeans down 108 yuan; Soymeal down 185; Soyoil down 424; Palm oil down 416; Corn down 38 –Malaysian palm oil prices overnight were up 247 ringgit (+5.49%) at 4746.

There were no changes in registrations. Registration total: 1,010 SRW Wheat contracts; 0 Oats; 0 Corn; 0 Soybeans; 98 Soyoil; 0 Soymeal; 66 HRW Wheat.

Preliminary changes in futures Open Interest as of June 22 were: SRW Wheat down 2,666 contracts, HRW Wheat down 3,265, Corn down 28,243, Soybeans down 6,997, Soymeal down 1,823, Soyoil up 1,603.

Northern Plains Forecast: A couple of drier and warmer days are expected in the Northern Plains before the next front moves through late Thursday and Friday, bringing temperatures back down again with more areas of showers. Another front will move through early next week with potential for a few more showers. Recent showers have brought improved soil moisture to the region. But forecast showers are not consistent across the region, leaving some areas drier, even though showers are moving through every couple of days.

Central/Southern Plains Forecast: Heat continues south of a cold front that moved into Nebraska and Kansas where it has stalled for the rest of the week, occasionally with showers and thunderstorms. A stronger front will push through the region this weekend, perhaps making it down to south Texas by early next week. That could bring more showers and lower temperatures through the region for a few days. Any showers or cooler temperatures would be beneficial for growth for corn and soybeans but have some negative effect on wheat harvest.

Midwest Forecast: A cold front moving through the Midwest will bring temperatures back down over the next day or two, but only slightly as it remains above normal for the next several days. A stronger cold front will move through this weekend with potentially below normal temperatures for a few days. Scattered showers will be hit-or-miss across the region, helping some areas maintain good soil moisture while the heat is quickly taking away topsoil moisture elsewhere.

Canadian Prairies Forecast:  The region will stay active with another system moving through late this week and another front moving through with showers early next week. Temperatures will be on a roller coaster ride as the systems pass, making for mixed conditions in the region.

 Black Sea Forecast: Recent weather conditions have been fair in Ukraine but have been declining in Russia. An upper-level low pressure center is moving into the region this week with scattered showers, and then will drift into the Black Sea where it may continue to bring showers to southern areas of the region into early next week. This will be a more favorable scenario for developing corn and sunflowers.

Europe Forecast: Periods of showers will continue there through the week as the atmosphere tries to reverse the hot and dry pattern of the spring. It is difficult to determine if the reversal will be enough for corn and spring grains, but the showers are more than welcome. Germany and eastern areas will be warmer throughout the week, with periods of showers moving through as well. Overall, conditions remain mostly good in eastern areas for maturing winter grains and developing corn and spring grains.

The player sheet for 6/22 had funds: net buyers of 4,500 contracts of  SRW wheat, buyers of 3,000 corn, buyers of 13,000 soybeans, buyers of 1,000 soymeal, and  sellers of 8,000 soyoil.

TENDERS

• WHEAT TENDER: A government agency in Pakistan issued an international tender to purchase and import 500,000 tonnes of milling wheat.
• WHEAT, BARLEY PURCHASE: Tunisia’s state grains agency is believed to have purchased around 100,000 tonnes of soft wheat and 50,000 tonnes of animal feed barley in international tenders.
• BARLEY PURCHASE: Jordan’s state grain buyer has purchased about 120,000 tonnes of animal feed barley to be sourced from optional origins in an international tender.
• WHEAT DEAL: Bangladesh is trying to secure wheat supplies from Russia in a government-to-government deal after its biggest supplier India banned exports of the grain last month to contain local prices, government and trade officials told Reuters.

PENDING TENDERS

• WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries is seeking to buy a total of 168,330 tonnes of food-quality wheat from the United States, Canada and Australia in regular tenders that will close on June 23.
• WHEAT TENDER: Bangladesh’s state grain buyer will issue an international tender to import 50,000 tonnes of milling wheat to replenish reserves, an official at the country’s grain purchasing agency said. The deadline for submission of price offers is July 5, the official said.

ETHANOL: US Weekly Production Survey Before EIA Report

Output and stockpile projections for the week ending June 17 are based on six analyst estimates compiled by Bloomberg.

• Production seen lower than last week at 1.054m b/d
• Stockpile avg est. 23.182m bbl vs 23.197m a week ago

Fall in Vegoil Prices in India to Help Cool Inflation: Pandey

Major edible oil brands have cut prices by 10 rupees (13 cents) to 15 rupees per liter because of the government’s timely interventions, according to federal food secretary Sudhanshu Pandey.

• Surprise inspections by the ministry to check illegal stockpiling of cooking oils brought desired results: Pandey
• Wholesale and retail prices of soybean and sunflower oils have decreased over the week
• Vegetable oil prices are beginning to show a downward trend and set to decline further, Pandey is quoted as saying in government statement

China’s Li Urges Efforts to Ensure Bumper Grain Harvest: Xinhua

China’s premier Li Keqiang urges agricultural industry to take more measures to ensure a bumper harvest for the whole year, Xinhua reports, citing a state council meeting chaired by Li Wednesday.

• China has a bumper harvest of summer wheat with higher output, and grain quality is better than average years: Xinhua
• China should ensure the full-year grain output stays above 650 billion kilos: Xinhua
• More efforts will be made on flood control: Xinhua

Indonesia’s April Palm Oil Reserves Surge to Highest on Record

Palm oil reserves in Indonesia rose 7.4% to 6.1 million tons in April, from 5.68m tons in March, Indonesian palm oil association known as Gapki says in an emailed statement on Thursday.

• April stockpiles are highest since Gapki began releasing data in 2016
  • NOTE: Indonesia’s palm oil stockpiles hit 6.08m ton in Oct. 2020
• Total production +2.5% m/m to 4.26m tons in April, which includes crude palm oil output at 3.88m tons
• Exports +3.5% m/m to 2.09m tons; -20.8% y/y
  • Shipments drop y/y as govt adds cooking oil supply to cool local prices
  • Exports to Pakistan, US, China and India down in April, shipments to Russia, Bangladesh rose
• Domestic consumption in April +16.2% m/m to 1.75m tons
  • Food industry sector consumed 812,000 tons; +27.9% m/m
  • Biodiesel industry consumed 755,000 tons; +8.3% m/m

Argentine truck drivers block roads at harvest peak, protest lack of diesel

Angry Argentine truck drivers blocked highways on Wednesday, protesting shortages and rising prices for diesel fuel, just as the country’s crucial grains harvest requires transport amid surging inflation.

Truck driver unions said the protests across the major corn and soybeans exporting nation will continue for an unspecified amount of time, aimed at pressuring the government to do more to address the extended motor fuel shortages and rising prices.

Outside the capital Buenos Aires, standstill traffic on a main highway extended some 4 miles (7 km) as a result of one of the protests, called for by commercial transportation unions.

National truck drivers union UNTRA asked the government to assure what it described as proportional diesel prices, according to a statement on Wednesday. Other associations joined in on the highway blockades, blasting the spiking cost of diesel.

Nearly the entire country, or 21 of 23 provinces, suffer fuel shortages, according to the national freight transport federation Fadeeac.

Senior government officials laid the blame for the shortages on growing demand as the economy recovers from a pandemic-led slowdown.

This month, the government raised required biodiesel content in diesel blends, hoping that could help alleviate shortages of the industrial motor fuel.

U.S. urges countries to reach out if having issues with Russian food, fertilizer exports

Countries should ask the United States for help if they have any problems importing Russian food and fertilizer, a senior U.S. official said on Wednesday, stressing that such goods were not subject to U.S. sanctions over Moscow’s war in Ukraine.

“Nothing is stopping Russia from exporting its grain or fertilizer except to own policies and actions,” U.S. State Department Bureau of Economic and Business Affairs Assistant Secretary, Ramin Toloui, told reporters.

But he added that concerns had been raised about “so-called over compliance with sanctions.” Washington has slapped Moscow with a broad range of sanctions since Russia invaded neighboring Ukraine on Feb. 24.

Facilitating Russian food and grain exports is a key part of attempts by U.N. and Turkish officials to broker a package deal with Moscow that would also allow for shipments of Ukraine grain from the Black Sea port of Odesa.

A meeting between Russia, Ukraine, Turkey and U.N. officials would likely be held in Istanbul in coming weeks, sources in the Turkish presidency said on Tuesday. (Full Story)

“We are fully supportive of this and want to see that play out,” Toloui said of the U.N. efforts. “We’ll continue close coordination with the U.N. delegation and the government of Ukraine on ways to mitigate the impacts to global food security of (Russian President Vladimir) Putin’s war in Ukraine.”

Russia’s war has stoked a global food crisis. Russia and Ukraine account for nearly a third of global wheat supplies, while Russia is also a key fertilizer exporter and Ukraine is an exporter of corn and sunflower oil.

Moscow denies responsibility for the food crisis, blaming Western sanctions and Ukraine for mining its Black Sea ports.

“The United States does not want there to be impediments to the ability of countries, companies to purchase Russian food, Russian fertilizer, and for those goods to access international markets,” Toloui said.

He encouraged countries to contact the U.S. Treasury Department or local U.S. embassies if they were having issues.

U.S. Secretary of State Antony Blinken will attend a food security ministerial meeting in Germany on Friday ahead of a three-day Group of Seven (G7) nations summit, also in Germany, starting Sunday.

Crop Facilities Hit at Ukraine Port, Adding to War’s Food Damage

• Sites owned by Viterra and Bunge struck in Wednesday attacks
• Russian forces fired at least seven missiles at Mykolayiv

Infrastructure owned by two major agriculture traders was damaged in Russian attacks at one of the biggest crop-handling ports in Ukraine, adding to the mounting losses suffered by its farm sector.

Rocket strikes on the Ukrainian port city of Mykolayiv on Wednesday damaged a terminal owned by agricultural trader Viterra, and the site is on fire, a company spokesperson said. Bunge Ltd. also said one of its facilities was hit and a city rescue brigade was at the site.

The attacks come even as delegations from Turkey and Russia said they held a “positive” meeting in Moscow on the exit of grain-laden ships from Ukraine, Turkey’s state-run Anadolu Agency reported earlier. Mykolayiv normally accounts for about a quarter of the country’s grain shipments, and damage there could make it more difficult to restart seaborne trade, which has largely been halted since the invasion.

“Even if an agreement were reached today, safe passage could take months to complete,” Rabobank analysts said Wednesday in an emailed note. “A return to Ukrainian export normality is currently not in sight.”

Viterra’s terminal can export as much as 1.5 million tons of vegetable oil annually, the company said when it completed the acquisition in 2020. A major player in grains and other agricultural products, Viterra is 50% owned by the world’s top commodities trader, Glencore Plc.

Bunge did not specify what crops its Mykolayiv facility handles but said the plant had been closed since the invasion on Feb. 24.

Bunge’s main grain terminal was acquired in 2011 and includes an oilseed processing plant, grain storage and export loading operations. The total storage capacity is around 150,000 tons at the port and the transshipping capacity is around 3 million tons a year of mainly soybeans, sunflower and wheat, according to website Elevatorist.

Infrastructure damage risks prolonging the loss of Ukraine’s agricultural supplies on global markets, which has accelerated global food inflation this year. Russian forces fired at least seven missiles that struck southern Mykolayiv on Wednesday, regional governor Vitaliy Kim said on Telegram. Chicago wheat prices rose by as much as 3.2% following the assault, before paring the gain to trade 2% higher.

Ukraine’s farm industry has suffered $4.3 billionin damage to land, machinery and livestock due to Russia’s invasion, the Kyiv School of Economics estimates. Its government estimates a fifth of grain silos have been damaged or been lost to territory occupied by Russian forces, and stalled exports are leaving farmers short of storage with the harvest now underway.

In recent months, another grain and fertilizer complex was struck at Mykolayiv port, a frozen-chicken warehouse was shelled and an elevator complex was destroyed in the Luhansk region.

Brazilian Nitrogen Offers Jump in Preparation of Planting Season

In anticipation of more demand from farmers ahead of planting season, increased fertilizer orders from buyers appear to be driving nitrogen prices up across Brazil, as the planting season for key crops takes hold in 2H. Natural gas price increases in Europe are an added upward pressure. Potash and phosphate prices have been weak amid slow demand.

Buyer Stock-Ups Point to Urea Price Hike

Brazilian urea prices appear to be reversing course from declines in past weeks before Friday’s final assessments, as buyers anticipate increased demand from farmers in July ahead of planting corn, coffee and sugarcane crops in 2H. Natural gas prices also rose in Europe, raising expectations for more increases in nitrogen offers of $30-$60 a metric ton this week. Meanwhile phosphate, mainly traded for soybean planting, looks to be trading $30 less a ton, while potash slips $50. Prospective buyers seem willing to wait for deeper price cuts.

US Fertilizer Markets Pressured as Summer Price Reset Begins

US fertilizer prices remain squeezed by reduced spring demand and excess nitrogen inventory. Phosphate supply has tightened at New Orleans due to lower imports, even though summer fills in the western US showed sizable price drops. Urea is near bargain levels after falling 50% since April 1. Higher European gas prices are starting to affect urea and ammonia

Higher European Gas Prices Bite

Higher European natural gas prices are again starting to close plants, prompting stiffer price ideas for ammonia and urea. New Orleans urea spiked to $515 a short ton (st) free-on-board in early week trading vs. $410-$470 a week ago. Corn Belt, Brazil and Egyptian prices were also up. Inland US ammonia is seeing a seasonal wane in pricing, yet Tampa for July may have less of a change than expected due to European outages. By comparison, phosphates and potash were relatively stable-to-up at most locations.

India Cumulative Monsoon Rainfall Normal as of June 22

India has so far received 105.8 millimeters of rains during the current monsoon season, which runs from June through September, compared with a normal of 106 millimeters, according to data published by the India Meteorological Department on June 22.

• The central region got 34% below normal rains
• Rainfall in the eastern and northeastern region was at 38% above normal