Global Ag News for June 24.22

HEADLINES TODAY

Wheat prices overnight are up 16 3/4 in SRW, up 10 1/4 in HRW, up 1 1/2 in HRS; Corn is up 4 1/2; Soybeans up 1/4; Soymeal up $0.10; Soyoil down 0.22.

For the week so far wheat prices are down 107 in SRW, down 109 in HRW, down 99 in HRS; Corn is down 77 1/4; Soybeans down 132 1/4; Soymeal down $2.05; Soyoil down 7.90. For the month to date wheat prices are down 131 1/2 in SRW, down 151 in HRW, down 166 1/4 in HRS; Corn is down 51 1/2; Soybeans down 93 3/4; Soymeal down $13.10; Soyoil down 11.05.

Year-To-Date nearby futures are up 20% in SRW, up 24% in HRW, up 9% in HRS; Corn is up 24%; Soybeans up 20%; Soymeal up 4%; Soyoil up 19%.

Chinese Ag futures (SEP 22) Soybeans down 58 yuan; Soymeal down 104; Soyoil down 104; Palm oil down 168; Corn down 39 — Malaysian palm oil prices overnight were down 59 ringgit (-1.24%) at 4685.

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 23 were: SRW Wheat up 1,475 contracts, HRW Wheat up 797, Corn down 25,779, Soybeans down 12,175, Soymeal down 103, Soyoil down 3,263.

Northern Plains Forecast: The next front moves through the Northern Plains late Thursday and Friday, bringing temperatures back down again with more areas of showers. Another front will move through early next week and will stall close to the region with potential for a few more showers. Showers are not consistent across the region, leaving some areas drier, even though showers are moving through every couple of days. There is plenty of soil moisture across most of the region for good plant growth.

Central/Southern Plains Forecast: Heat continues for the next few days in the Central and Southern Plains before a stronger front pushes through the region this weekend, 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 strong cold front will move through the Midwest this weekend. Another will move into the region early next week and stall. Both will bring lower temperatures and a few rounds of showers. Scattered showers will be hit-or-miss, helping some areas maintain decent soil moisture while the recent heat has been taking away soil moisture elsewhere. Some areas are starting to show significant deficits and need a good soaking.

Canadian Prairies Forecast:  Recent rainfall in the southwest Canadian Prairies brought welcome soil moisture to the area that really needed it. The region will stay active with another system moving through over the next couple of days and another front moving through with showers early next week. Temperatures will be variable but on the colder side more than warm, 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 in the region is producing scattered showers, and it may continue to bring showers to southern areas of the region into early next week. Warmer temperatures will spread across the region, but especially in the west where temperatures could be hot. As long as soil moisture is favorable, the heat will hasten crop growth. But some areas will dry out, causing stress. The conditions favor maturing wheat and harvest, however.

Europe Forecast: Periods of showers will continue in western Europe through the weekend 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. Eastern areas are turning much warmer with a heatwave through most of next week. Showers will be limited, but not absent and good soil moisture in the area should be allow spring and summer crops to cope with the heat at least for a little while. The conditions will favor maturing winter grains.

The player sheet for 6/23 had funds: net sellers of 11,000 contracts of  SRW wheat, sellers of 30,000 corn, sellers of 26,000 soybeans, sellers of 5,000 soymeal, and  sellers of 10,500 soyoil.

TENDERS

• WHEAT PURCHASE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 168,330 tonnes of food-quality wheat from the United States, Canada and Australia in regular tenders.

PENDING TENDERS

• WHEAT TENDER: A government agency in Pakistan issued an international tender to purchase and import 500,000 tonnes of milling wheat
• 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.

Argentine Soy, Corn, Wheat Estimates June 23: Exchange

The Buenos Aires Grain Exchange releases weekly report on website.

• 2021-22 soybean and corn production held at previous levels
• 2022-23 wheat planting reduced to 6.3m ha vs 6.4m a week ago

Ukraine 2022 Grain Export Estimate Raised 2M Tons on Corn: IGC

Ukraine is now expected to export 22.6m tons of grain in the 2022-23 year, up from a May estimate for 20.6m tons, the International Grains Council said in a report Thursday.

• Increase is based on higher corn sales
• That would still be sharply lower from 47.3m tons shipped the prior season
• Russia grain-export estimate steady at 44.6m tons
• Outlooks for Argentina, Australia and US trimmed slightly

IGC Raises Global Corn-Harvest Outlook; Wheat Estimate Steady

World corn production in the 2022-23 season is now seen at 1.19b tons, up from a May outlook for 1.18b tons, the London-based International Grains Council said Thursday in a report.

• That’s mainly based on Ukraine, where plantings exceeded initial expectations
• Corn stockpiles outlook increased to 271m tons, versus 269m tons
• World wheat production estimate left steady at 769m tons
  • Stockpiles outlook increased by 2m tons, based on smaller consumption
• Total grains production estimate raised to 2.26b tons, versus 2.25b tons
  • Stockpiles lifted to 583m tons, from 580m tons
  • Remains below 607m tons in the prior season
• Soybean production estimate raised to 390m tons, from 387m tons

Argentina Grain Ports Receiving Few Trucks Amid Protest

Just 686 trucks were lined up to enter ports along the Parana River shipping hub on Thursday, when the average for this time of year is more than 3,000, trucking agency AgroEntregas says on Twitter.

NOTE: Argentina truckers are protesting diesel shortages and risingfuel prices with roadblocks

Russia May Link Wheat, Sunflower Oil Tax to Ruble: Interfax

Russia is studying an option to link an export tax for wheat and sunflower oil to the ruble rather than the dollar, Interfax reports, citing a person familiar with situation.

• The option, which would be implemented in stages, is among measures intended to help farmers maintain profitability
• NOTE: Russia started the floating wheat tax from June 2, 2021 with a $28.10/ton levy; this week the tax reached $142/ton

Zimbabwe Corn Harvest Will Drop by 43%, Boosting Imports: USDA

Zimbabwe’s corn crop will decline to 1.6m tons, raising the need for imports to maintain strategic reserves of the nation’s principal food crop, USDA’s Foreign Agricultural Service says in a report.

• Harvest decline follows previous year’s bumper crop of 2.7m tons, which was largest in more than three decades
  • “Many factors contributed to the drop in production including sub-optimal weather conditions, high input costs and macro-economic challenges”
• Imports of corn estimated at 400k for the marketing year running from May 2022 to April 2023

Argentina Grain Ports Receiving Few Trucks Amid Protest

Just 686 trucks were lined up to enter ports along the Parana River shipping hub on Thursday, when the average for this time of year is more than 3,000, trucking agency AgroEntregas says on Twitter.

• NOTE: Argentina truckers are protesting diesel shortages and risingfuel prices with roadblocks

Saskatchewan Says Crop Growth Stalls With Fields Too Dry or Wet

“Crop development has stalled due to extremely dry conditions in the west, which delayed germination and growth,” Canadian province’s agriculture ministry says Thursday in a report.

• Growth has been slow in eastern areas due to overly wet conditions and cooler temperatures
• Conditions improving and “crops will hopefully catch up”
• 73% of fall cereals, 55% of spring cereals, 45% of oilseeds and 64% of pulse crops at normal development stage

Corn Piles Up Outside Silos as Key Brazil Region Reaps Record Crop

• Big corn harvest leaves farmers short of space to store the grain as warehouses remain full of soybeans

Corn is stacking up outside of Brazilian silos at the fastest rate in years after the country’s biggest-producing region harvests a bumper crop.

Warehouses are still full of soybeans, which are reaped only a few months before the corn. In Mato Grosso, soy production was also huge this season and sales have been slower than usual, leaving the warehouses with no room to receive the corn, according to Cleiton Gauer, superintendent at IMEA, Mato Grosso’s rural economy institute.

While it’s not unusual for crops to be stored in the open when indoor capacity fills up, it hasn’t been seen at such a scale for at least the past two years. But as Mato Grosso’s huge corn harvest gets pace, farmers and traders have been especially short of room.

The pileup threatens to add further pressure to corn and soy prices that are already slumping in Chicago futures markets amid promising weather in the US growing areas. Corn sank Thursday to the lowest level since before Russia invaded Ukraine, while soybeans touched the lowest level since January with edible oil supply picking up and a broader commodities malaise. The slide in crop futures offers a glimmer of optimism that food inflation may be tempered in coming months, even as prices remain historically high.

At the end of May, around 11 million tons of soybeans in the state were still on farmers’ hands, compared with 5.5 million tons a year earlier, according to Daniele Siqueira, an analyst at AgRural consultancy firm. This month, soy sales have accelerated on a weaker real, improving demand and the pressure to get the oilseed out of the bins, she said.

Another reason for the lack of room is how fast the harvest is happening in Mato Grosso. On June 17, reaping was 27% complete, compared to 4% a year earlier and the five-year average of 14%, according to Imea. The state is expected to collect 39 million tons of corn, rising 20% from past season. That’s about a third of Brazil’s production, that may also reach a record at 115.2 million this season, according to Brazil’s national company Conab.

Brazil to boost non-GMO soy area for higher European demand, industry group says

The area planted with non-genetically modified soybeans in Brazil in the new season (2022/23) is expected to grow by 24%, at a much faster rate than that of the total area to be sown, according to a study by the Instituto Soja Livre (ISL), an industry group.

Farmers’ intention to grow the non-GMO soy area will answer to higher demand from Europe, which partly gets its soy from India, a country that only plants conventional, or no-transgenic, beans.

The situation will lead to a sharp rise in premiums paid for Brazil’s conventional soy, ISL said.

“The soy that India produces is all conventional, but sold to Europe without a premium…,” ISL Director of International Relations Endrigo Dalcin told Reuters on Thursday. “Now, with the pandemic, India closed its borders for food exports and generated this extra demand (for Brazil).”

Non-GMO soybeans accounted for just 2% of the soy planted area in Brazil, the world’s largest producer and exporter of the oilseed.

Brazil’s total soybean area was almost 41 million hectares (101.3 million acres) in 2021/2022.

In the new season that will begin in September, the area planted with ​​conventional soybeans is expected to reach almost 1 million hectares, compared with 793,000 hectares in 2021/2022, according to ISL.

Given the global fall in conventional soybean supplies, European buyers are already closing early deals with Brazilian farmers, paying premiums of up to $11 per 60-kilo bag, with an average of US$6/bag in Mato Grosso for soy to be produced in the next crop, Dalcin said.

“More and more Europeans are demanding milk from cows fed on conventional soy meal, eggs from chickens fed on conventional soy,” he said.

In Germany, he said, there is growing movement for pig production to be made entirely using non-GMO grains.

China to auction 500,000 tonnes of imported soybeans from reserves

China will sell 500,000 tonnes of imported soybeans from its state reserves on July 1, the national grain trade centre said on Friday.

Beijing has been selling soybeans from its state reserves, in an effort to boost supplies in the domestic market.

The move was started when prices of soybean meal, crushed from oilseed, soared amid tight supplies. Inventories of the feed ingredient have tripled in the past months, as abundant soybeans arrived while demand from the livestock sector was weak.

Drought Exposure Rises in US Corn and Soybean Areas: USDA

The following table shows the percent of US agricultural production within an area that experienced drought for the week ending June 21, according to the USDA’s weekly drought report.

• Corn area experiencing moderate to intense drought rose 2 percentage points to 19%
• Soybean drought area rose to 11% vs 9%

US Barge Shipments of Grain Fell 7% Last Week: USDA

Shipments along the Mississippi, Illinois, Ohio and Arkansas rivers declined in the week ending June 18 from the previous week, according to the USDA’s weekly grain transportation report.

• Barge shipments of corn fell 12% from the previous week
• Soybean shipments up 3% w/w

US Grain Movement by Rail Fell 0.6% Week Ended June 15: USDA

Bioceres Crop to Seek Australia’s OK to Plant GM Wheat

Argentina’s Bioceres Crop Solutions plans to conduct field tests of its genetically modified drought resistant wheat in Australia and seek planting approvals next year, Reuters reports citing an interview with company CEO Federico Trucco in London.

• Trucco called Russia’s invasion of Ukraine a “reality check” for global food supplies, helping make the case for GMO wheat
• Bioceres is also in talks to take a majority stake in a new venture in Australia with the local unit of US-listed S&W Seed
  • Trucco said the deal could be announced in 3Q this year

LIVESTOCK: U.S. Red Meat Production Rose 4.3% Y/y in May

Commercial beef and pork production rose to 4.48b pounds in May, according to the USDA’s monthly livestock slaughter report.

• Beef production up 3.3% y/y to 2.29b pounds
• May cattle slaughter totaled 2.81m head, a 4.1% increase from a year ago
  • Avg live weight dropped by 9 pounds from last yr to 1,351 pounds
• Pork production up 5.4% y/y to 2.18b pounds
• Hog slaughter increased 4% y/y to 10,036m head
  • Avg live weight was 291 pounds vs 288 pounds a year ago