Global Ag News for June 28.22

HEADLINES TODAY

Wheat prices overnight are up 23 in SRW, up 13 1/4 in HRW, up 3 in HRS; Corn is up 11 1/2; Soybeans up 19; Soymeal up $0.19; Soyoil up 0.95.

For the week so far wheat prices are down 1 3/4 in SRW, down 11 in HRW, down 19 1/2 in HRS; Corn is down 12 1/4; Soybeans up 26 1/2; Soymeal up $0.52; Soyoil up 1.71.  For the month to date wheat prices are down 157 in SRW, down 180 in HRW, down 200 in HRS; Corn is down 47; Soybeans down 57 3/4; Soymeal down $5.90; Soyoil down 8.09.

Year-To-Date nearby futures are up 19% in SRW, up 22% in HRW, up 7% in HRS; Corn is up 27%; Soybeans up 24%; Soymeal up 9%; Soyoil up 28%.

Chinese Ag futures (SEP 22) Soybeans up 102 yuan; Soymeal up 61; Soyoil up 186; Palm oil up 264; Corn up 6 — Malaysian palm oil prices overnight were up 96 ringgit (+1.95%) at 5018.

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 27 were: SRW Wheat down 7,741 contracts, HRW Wheat down 4,498, Corn down 23,984, Soybeans down 21,036, Soymeal up 3,364, Soyoil down 2,564.

Northern Plains Forecast: Isolated showers Tuesday-Friday. Temperatures near to above normal Tuesday-Wednesday, near to below normal Thursday-Friday. Outlook: Mostly dry Saturday. Isolated showers Sunday-Wednesday. Temperatures near to below normal Saturday, near to above normal Sunday-Wednesday.

Central/Southern Plains Forecast: Isolated showers south and west Tuesday. Mostly dry Wednesday-Thursday. Isolated showers north Friday. Temperatures near to below normal Tuesday, near to above normal Wednesday-Friday. Outlook: Isolated showers Saturday-Wednesday, mostly north. Temperatures near to below normal Saturday-Sunday, near to above normal Monday-Wednesday.

Western Midwest Forecast: Isolated showers north Tuesday-Thursday. Isolated showers Friday. Temperatures near to below normal Tuesday, near to above normal Wednesday-Friday.

Eastern Midwest Forecast: Isolated showers north Tuesday. Mostly dry Wednesday. Isolated showers Thursday-Friday. Temperatures near to below normal Tuesday, above normal Wednesday-Friday. Outlook: Isolated showers Saturday-Wednesday. Temperatures near to below normal Saturday-Sunday, near to above normal Monday-Wednesday.

Canadian Prairies Forecast:  A front will move through early in the week followed by a system around midweek with more showers and potential for another system over the coming weekend. Conditions will continue to be mixed for a while, favoring the west over the east, including with temperatures.

Europe Forecast: The heat over eastern Europe will continue this week, turning good conditions for spring crops into concerns with declining soil moisture. Meanwhile, the west is only getting a temporary break as the heat looks to come back next week. Showers are going to become more isolated as well, bringing concerns for the drier areas. However, winter wheat and other winter grains should have overall more favorable conditions.

Black Sea Forecast: The low from the weekend will continue to sink south toward Turkey this week, with showers becoming much more isolated, especially in Russia where dryness is becoming more of a concern. As the low retreats, the heat will increase, causing more concerns for corn and sunflowers, mostly in Ukraine. The weather will be more favorable for wheat harvest, however.

The player sheet for 6/27 had funds: net sellers of 6,500, sellers of 17,000, sellers of 9,000, buyers of 5,000, and  buyers of 3,000.

TENDERS

• WHEAT TENDER: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), announced on Monday an invitation to submit offers for an unspecified amount of wheat in an international tender. The deadline for offers is Wednesday, June 29.
• WHEAT PURCHASE: Separately, Egypt has contracted to buy 180,000 tonnes of wheat from India, Supply Minister Aly Moselhy said in a news conference on Sunday.
• WHEAT PURCHASE: Saudi Arabia’s state grain buyer SAGO on Monday bought 495,000 tonnes of wheat in an international purchasing tender for shipment from November 2022 to January 2023.
• U.S. WHEAT TENDER: The Taiwan Flour Millers’ Association has issued an international tender to purchase 40,000 tonnes of grade 1 milling wheat to be sourced from the United States
• 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
• WHEAT TENDER: Jordan’s state grain buyer has issued an international tender to buy 120,000 tonnes of milling wheat which can be sourced from optional origins
• FEED BARLEY TENDER: Jordan’s state grains buyer has issued a new international tender to purchase 120,000 tonnes of animal feed barley
• WHEAT TENDER: Bangladesh’s state grains buyer has issued another international tender to purchase 50,000 tonnes of milling wheat

PENDING TENDERS

• WHEAT TENDER: A government agency in Pakistan issued an international tender to purchase and import 500,000 tonnes of milling wheat
• SOYMEAL TENDER: Leading South Korean animal feed maker Nonghyup Feed Inc. (NOFI) has issued an international tender to purchase up to 120,000 tonnes of soymeal

US Inspected 1.246m Tons of Corn for Export, 468k of Soybean

Russia Wheat Crop Seen Rising 16% Y/y on Favorable Weather: MARS

Good weather throughout the growing season has aided grain yields in most of Russia, the EU’s Monitoring Agricultural Resources unit says in a note.

• There was adequate rainfall and cooler-than-usual temperatures during spring
• Spring-crop yields in Siberia might be curtailed by a rain shortfall and high temperatures in recent weeks
• Wheat production seen at 88.8m tons, up 16% y/y
  • NOTE: That would be an all-time high, based on USDA data
• Barley production seen at 19.7m tons, up 7% y/y
• Corn production seen at 16.7m tons, up 8% y/y
• In Kazakhstan, winter-grain crops also had adequate temperatures and rains, MARS says in a separate report
  • More moisture is needed to bolster spring-grain crops
• Wheat production seen at 14.2m tons, up 28% y/y
• Barley and corn production also will increase from 2021

SovEcon Cuts Ukraine Wheat Estimate on War Damage, Dry Weather

Ukraine is likely to collect 20.7m tons of wheat this year, 1.4m tons below a prior estimate, consultant SovEcon says in an emailed note.

• Some growing areas have been heavily affected by the war, reducing the area for harvest
• Yield prospects are also lower because of below-normal precipitation in key regions, including Odesa
• Meanwhile, the outlook for corn output has been bolstered by better availability of agricultural inputs than expected
  • Still, more rains is needed
  • Crop now seen at 28.1m tons, up 1.1m tons from a prior estimate
• NOTE: Ukraine harvested about 33m tons of wheat and 42m tons of corn last year, before Russia’s invasion, according to USDA data

Brazil’s dry weather gives second corn harvesting a big boost – consultancy

Hotter and drier weather in key Brazilian corn growing areas gave a boost to harvesting work, especially in Brazil’s top grain state Mato Grosso, according to a survey by AgRural released on Monday.

The agribusiness consultancy said 20.3% of the area cultivated with second corn was harvested in the Center-South of the country through last Thursday.

This compares with 11.4% in the previous week and 5.3% in the same period last year, said AgRural, which raised Brazil’s total corn forecast to 113.8 million tonnes citing expectations of a bigger corn output in the north and northeast.

In Parana, Mato Grosso do Sul and Goias, the loss of moisture from the grains remained low and, as such, harvesting lagged, according to AgRural. But the expectation is that the work progresses more quickly this week in those regions, the consultancy noted.

Second corn, which is planted after soybeans are reaped from fields in the same areas, represents about 75% of national production in a given year.

With second corn, Brazil becomes an aggressive exporter in the second half of the year, competing with heavyweight suppliers like United States. This season, however, Brazilian corn exports via a Southern rose atypically driven in part by a lack of product from Ukraine. One consultancy pegged Brazil’s corn exports at 43 million tonnes this year thanks incoming large supplies.

Brazil 2021/2022 Total Corn Crop raised to 113.8 mln T – AgRural

• BRAZIL CENTER-SOUTH 2021/2022 SECOND CORN CROP SEEN AT 80.3 MILLION TNS VERSUS 80.9 MILLION TNS IN MAY FORECAST – AGRURAL
• BRAZIL 2021/2022 TOTAL CORN CROP SEEN AT 113.8 MILLION TNS VERSUS 112.3 MILLION TNS IN PREVIOUS FORECAST – AGRURAL

Roadblocks by Angry Truckers Escalate Argentina Diesel Crisis

• Fewer crop supplies are arriving to export hub on Parana River
• South American nation buying more fuel abroad to ease shortageBy Jonathan Gilbert

Truckers in Argentina are upping the ante to protest shortages of diesel fuel with roadblocks across the country extending into a sixth day on Monday.

The protests are especially affecting Timbues, the site of several key crop export ports on the Parana River, trucking agency AgroEntregas SA said on Twitter. Arrivals of trucks packed with soybeans and corn to river ports on Monday was about 30% lower than usual for this time of year. Roadblocks have also impacted the lemon harvest in northern Tucuman province.

Transport Minister Alexis Guerrera said on June 25 that he hoped fuel shortages would be solved in the next 15 to 20 days as imports arrive.

The protesters may also try to win publicity by driving into Buenos Aires this week in a convoy of several hundred trucks, according to local news reports.

Indonesia Expects Palm Exports to Return to Normal in Mid-July

Top palm oil producer Indonesia expects exports to return to normal in the next 1-2 weeks, said Firman Hidayat, special staff on international relations and agreements at the coordinating ministry for maritime affairs and investment.

• Govt has issued permits for total 1.89m tons of palm oil exports, Hidayat said in a briefing on Tuesday
  • Permits for 1.08m tons were based on domestic market obligation program, while 806,000 tons were exempted from DMO by paying special tax
• Exports realization at about 1.2m tons of total permits
• Exporters sometimes needs to look for vessels and buyers before resuming shipments, said Rachmat Kaimuddin, acting deputy for coordinating infrastructure and transportation at the ministry
• Govt asks producers to keep buying fresh fruit bunches a 1,600 rupiah/kg to help farmers get better income

Malaysia urges palm oil mills to resume production despite price drop

Malaysian authorities on Tuesday called on palm oil millers to resume production and buy oil palm fruits from farmers, after a recent plunge in prices of the edible oil prompted some companies to halt processing.

Unprofitable pricing meant mills in Malaysia, the world’s second-largest palm oil producer, had temporarily halted operations, an industry body said on Monday.

Malaysian crude palm oil futures posted their biggest one-month decline in more than 13 years in June, recording a 22% drop and erasing most of this year’s gains. Prices had rallied to a record high earlier in 2022 due to supply concerns.

Wee Jeck Seng, deputy minister for plantation industries and commodities, said the government has received complaints about mills refusing to buy oil palm fruits.

“The fruits cannot be kept for more than two to three days, or they will rot. It will affect smallholders,” Wee told reporters on the sidelines of an industry seminar.

“The millers should be responsible, no matter if prices are high or low,” he said.

The state-run Malaysian Palm Oil Board, the industry regulator, will discuss the matter with the mills, Wee said.

The Malaysian Palm Oil Millers Association (POMA) told Reuters on Monday that at current prices, the mills – which are already facing labour shortages and high input costs – stood to lose at least 150,000 ringgit ($34,114.17) for every 100 tonnes of crude palm oil produced.

China to Boost Control of Hog Production to Prevent Price Swings

China will strengthen control of hog production capacity to prevent huge volatility in prices, Yang Yinkai, deputy secretary-general of the National Development & Reform Commission, said at a briefing Tuesday.

• While there’s pressure on imported inflation due to factors like geopolitical conflict, China has ample supply and policy tools to maintain stable prices
• The country’s current grain supply is fully secured and its goal of ensuring basic food self-sufficiency can be achieved with efforts, Ou Hong, an NDRC official, said at the briefing
• China will improve soybean, rapeseed and peanut production

WHEAT/CEPEA: Prices drop abroad and return to level from prior to the war; in BR, values rise

Wheat prices dropped steeply in the international market last week, influenced by the progress of the harvesting in the United State, corn devaluations (which substitutes wheat in feed) and expectations for a record harvest in Russia.

In the USA, the July/22 contract for the Soft Red Winter wheat decreased by a steep 10.7% at CME Group between June 17 and 24, to USD 9.2375/bushel (USD 339.42/ton) on the 24th. At the Kansas Stock Exchange, the same contract for the Hard Winter wheat dropped by 10.2% in the same period, to USD 9.9250/bushel (USD 364.68/ton). These are the lowest levels for a first contract since late February/22, which confirms that values have returned to the levels from prior to the Russia-Ukraine war.

According to the USDA, 98% of the Spring wheat crop had been sown in the USA by June 19, near a 100%, observed in the same period last season and on the average of the last five years. Of the total sown, 59% are in excellent/good conditions. As for the Winter wheat, 25% had been harvested, more than that in the same period last year (15%), but less than the average of the last five years (22%).

In Argentina, despite the smaller area allocated to wheat crops, FOB prices at the port of Buenos Aires decreased by 1.5% between June 16 and 24, to USD 475.00/ton on the 24th.

Data released last week by SovEcon (Russian consulting company) raised the Russian wheat output to 89.2 million tons, a record. The increase of 600 thousand tons in the 2022/23 season was linked to the larger area allocated to wheat in Russia and also to the current favorable weather in the country. In Ukraine, the wheat harvesting has begun, and farmers are still not sure how transportation will take place this season, since activities at ports are still halted.

BRAZILIAN MARKET – Despite the recent valuations abroad, in Brazil, wheat quotations are still rising, influenced by the dollar appreciation and low domestic supply. According to Cepea collaborators, amid the current low availability in Brazil, purchasers need to import the cereal from Argentina and Paraguay to be able to meet the domestic demand in the short term. The American currency rose by 2.3% in the last seven days, closing at BRL 5.258 on June 24th.

Cepea surveys show that, between June 17 and 24, the prices paid to wheat farmers rose by 5.47% in Rio Grande do Sul (RS), 0.94% in Santa Catarina (SC) and 0.35% in Paraná. In the wholesale market (deals between processors), values increased by 1.26% in PR and 2.09% in RS, but dropped by 1.54% in São Paulo and 0.32% in SC.

NATIONAL WHEAT CROP – According to data from Conab, 55.4% of the national wheat crop had been sown by June 18.

Indonesia Lets Companies Package Cheap Cooking Oil to Meet DMO

Indonesia, the world’s biggest palm oil producer, says it will allow companies to distribute cheap cooking oil for Domestic Market Obligation (DMO) quota in simple packages with government brand “minyakita” instead of in bulk to speed up sales.

• Companies could get incentives in form of bigger multiplication factor to calculate DMO realization if they choose that alternative way of distribution, according to Oke Nurwan, director general of domestic trade at the trade ministry on Tuesday
• Govt is still preparing the regulation and calculating incentive figures that can be converted into more exports quota

Indonesia to Road Test 40% Palm Oil Mix Biodiesel At End-July

Indonesia is planning to start road test for vehicles powered by 40% palm-biodiesel, or B40, at the end of July, says Dadan Kusdiana, director general of new and renewable energy at the Energy and Mineral Resources Ministry.

• Preparation is still ongoing for the five-month road test, Kusdiana said by text message on Tuesday
• Implementation for B40 biodiesel blending mandate will depend on the result of road test
• NOTE: Indonesia imposes B30 since 2020 to reduce the country’s fossil fuel import bill

Indonesia Will Use Covid Tracking App to Sell Cheap Cooking Oil

Indonesia will make use of its Covid-19 tracking app to distribute cheap cooking oil as the government takes steps to ensure its subsidies reach their target.

The PeduliLindungi app, which lets people scan QR codes to verify their health and vaccination status when entering buildings, will also let Indonesians buy as much as 10 kilograms of subsidized cooking oil each day, said Rachmat Kaimuddin, acting deputy at the Coordiating Ministry for Maritime Affairs and Investment. Kaimuddin was president director of e-commerce startup PT

“People’s IDs are verified on PeduliLindungi, so people can scan QR codes and the app will show green — meaning you can buy cooking oil — or red if you’ve met your quota,” he said on Tuesday.

Budget-Busting Inflation Relief Forces Asia Into Narrowing Aid

Indonesia, the world’s biggest palm producer, has pushed for better distribution of cheap cooking oil to temper local prices and keep it exporting edible oils. President Joko Widodo sent the market whipsawing when he announced a ban on all cooking oil shipments in April due to a local shortage, only to revoke it weeks later.