Global Ag News For June 6.22

HEADLINES TODAY

Wheat prices overnight are up 48 3/4 in SRW, up 48 1/2 in HRW, up 46 3/4 in HRS; Corn is up 13; Soybeans up 17; Soymeal up $0.32; Soyoil up 0.64.

Markets finished last week with wheat prices down 67 3/4 in SRW, down 67 3/4 in HRW, down 67 1/4 in HRS; Corn is down 37 1/2; Soybeans down 17; Soymeal down $2.14; Soyoil up 2.56.

For the month to date wheat prices are up 1 1/4 in SRW, up 4 in HRW, down 9 in HRS; Corn is down 13 1/2; Soybeans up 31 1/2; Soymeal down $7.90; Soyoil up 2.99.

Year-To-Date nearby futures are up 41% in SRW, up 46% in HRW, up 26% in HRS; Corn is up 25%; Soybeans up 29%; Soymeal down 0%; Soyoil up 47%.

Chinese Ag futures (SEP 22) Soybeans down 27 yuan; Soymeal up 32; Soyoil up 142; Palm oil up 92; Corn up 16 — Malaysian markets are closed for holiday (King’s Birthday).

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

Preliminary changes in futures Open Interest as of June 3 were: SRW Wheat up 4,254 contracts, HRW Wheat up 931, Corn down 1,880, Soybeans down 1,345, Soymeal up 1,521, Soyoil up 6,449.

Northern Plains Forecast: Waves of showers will continue to move through the region this week in an active pattern. Eastern North Dakota will see relatively little precipitation from the events through the week, allowing it to continue to dry out and give some potential planting increases. A storm system this weekend is not likely to miss the region, however.

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

Western Midwest Forecast: Scattered showers through Friday. Temperatures near to below normal through Friday.

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

Canadian Prairies Forecast:  Showers will continue in these areas throughout the week. Across eastern areas, dryness has favored draining soils and planting progress. While the southwest gets the showers, the east will remain dry throughout the week, though cool. A system coming through this weekend is not likely to miss many areas with showers.

Black Sea Forecast: Temperatures will increase a bit over the course of the week and the showers will be hard to come by after Monday. There are pockets of the region that are a bit on the drier side, which could stress crops a bit, but overall the region is in good shape.

 Brazil Grains & Oilseeds Forecast:  Rio Grande do Sul and Parana: Scattered showers Monday-Tuesday. Mostly dry Wednesday-Friday. Temperatures near to above normal through Thursday, near to below normal Friday. Mato Grosso, MGDS and southern Goias: Mostly dry through Tuesday. Isolated to scattered showers south Wednesday-Friday. Temperatures near to above normal through Friday.

Argentina Grains & Oilseeds Forecast: Cordoba, Santa Fe, Northern Buenos Aires: Mostly dry through Friday. Temperatures near to below normal through Thursday, below to well below normal Friday. La Pampa, Southern Buenos Aires: Mostly dry through Friday. Temperatures near to below normal through Thursday, below to well below normal Friday.

The player sheet for 6/3 had funds: net sellers of 5,500 contracts of  SRW wheat, sellers of 500 corn, sellers of 11,500 soybeans, sellers of 3,500 soymeal, and  buyers of 2,000 soyoil.

TENDERS

• CORN SALE: The U.S. Department of Agriculture confirmed private sales of 101,600 tonnes of U.S. corn to unknown destinations for delivery in the 2021/22 marketing year that began Sept. 1, 2021.

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 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

SOYBEAN/CEPEA: Soy oil price sets real record and underpins soybean quotations

Concerns about a possible decrease in the supply of palm oil in Asia, oil valuations and the firm world demand for soy oil have recently boosted the quotations for soy oil in Brazil and in the United States to record levels.

Cepea surveys show that the average price for crude degummed soy oil closed at BRL 9,693.25/ton in São Paulo (SP) in May (with 12% ICMS), 5.3% higher than that in April and a real record (IGP-DI from Apr/22) in the monthly series of Cepea, which began in July/98. The highest increases were registered between the second fortnight of April and the first half of May. In a year’s time, soy oil prices rose by 20.6%, in real terms. Between May 26 and June 2, quotations increased by 0.5%, closing at BRL 9,356.34/ton on Thursday, 2.

It is important to highlight that domestic valuations were constrained by the lower demand from the biodiesel sector. Besides, agents from the food industry reported difficulties to pass on soy oil valuations.

SOYBEAN – The prices for soybean also increased between April and May, influenced by higher demand, majorly from national processors. The delay of ships and lack of quota at Brazilian ports constrained exports.

Besides, soybean quotations have also been influenced by the dollar appreciation against the Real, by 4.1% between April and May. However, the average of the American currency in May was 9.4% lower than that in May/21. Between May 26 and June 2, the US dollar rose by 0.7%, to BRL 4.794 on June 2.

Between April and May, the ESALQ/BM&FBovespa Paranaguá (PR) Index increased by 3.8%, and in a year’s time, by 4.2%. This week, this Index has increased by 0.6%, to BRL 193.64/60-kilo bag on Thursday. The CEPEA/ESALQ Index Paraná rose by 3.7% in the monthly comparison and by 4.8% in the annual comparison, in real terms. However in the last seven days, values dropped by a slight 0.7%, to BRL 186.70 per 60-kilo bag on Thursday.

On the average of the regions surveyed by Cepea, between April and May, prices increased by 3% in the over-the-counter market (paid to farmers) and by 3.6% in the wholesale market (deals between processors). In a year’s time, values rose by 10% and 9%, respectively. In the last seven days, however, quotations dropped by 0.9% in the over-the-counter market and by 0.8% in the wholesale market.

Farmers have been encouraged – by the lack of room in warehouses – to sell some of the remaining from the 2021/22 season. Aiming to receive higher prices for the product, some deals have been closed with extended payment deadlines.

Brazil Soy 2021/22 Sales Reach 65.9% as of June 3: Safras

Brazilian producers have sold 65.9% of the 2021/22 soybean crop by June 3, the agricultural consultancy Safras & Mercado says in an emailed report.

• Data compares to 61% until May 6. and 75.6% in the same period of last year
  • Taking into account an estimated harvest of 122.3m tons, the soybean sales have so far totaled 80.61m tons
• As for the early commercialization of the 2022/23 crop, currently seen at 144.7m tons, Safras estimates sales at 13.3%
  • This compares to 19.2% in the same period a year ago and a 5-year average of 18.8%

French Wheat Conditions Worsen on Dryness and Heat: AgriMer

The share of France’s soft-wheat crop rated in good or very good condition fell to 67% as of May 30, down from 69% the prior week, according to the latest FranceAgriMer data.

• Corn was 100% planted, versus 99% the prior week
  • Compares to 99% at this time last year
• NOTE: Extreme heat has hurt wheat crops in France

Brazil Harvests 3.3% Of Second Corn Area In 2021/22, The Fastest Pace Ever -Patria Agronegocios

BRAZIL HARVESTS 3.3% OF SECOND CORN AREA IN 2021/22, THE FASTEST PACE EVER -PATRIA AGRONEGOCIOS

Brazil’s Fertilizer Buyers Wait as Supply Hints at Normalization

A fertilizer-demand pullback is still spreading across Brazil, as farmers continue to restrain buying and wait for further price drops. New reductions could hit next season’s fertilizers in the coming days. Near-term supply appears ample, yet 2H threats are still limiting declines, despite a hint of normalization in Russian shipments.

US Urea, Phosphate Prices Fall Sharply in Friday Findings

Fertilizer prices continued to retreat in early June, led by sharp declines in New Orleans (NOLA) urea and phosphate prices. NOLA urea fell to $500-$550 a short ton (st) vs. last week’s $570-$585, reaching its lowest level since September 2021. NOLA phosphates plunged $40-$70/st from the previous week as reports of spring usage cutbacks continue to surface. The NOLA weakness fueled similar declines in inland pricing, with Corn Belt urea falling $50-$65/st and phosphates dropping $20-$40/st from last week amid flagging demand. Urea ammonium nitrate (UAN) and ammonium sulfate prices also fell at NOLA and inland, with the latter dropping $30-$40/st in the Corn Belt. The drop in UAN prices was accompanied by additional pressure on inland ammonia prices, even as demand for corn side dressing starts to accelerate.

Price Slip Extends as Fertilizer Sellers Offer More

Lower spot fertilizer prices in this week’s final assessments for Brazil reflect more supply and heightened competition among sellers in the interior. Even with Russian cargoes starting to recover, market participants suggest concern over 2H potash supply is still limiting price decreases. By contrast, phosphate dropped $20 and nitrogen $50 a metric ton, reflecting stiff competition among suppliers that aim to release inventories as new cargoes arrive at ports.

With demand sluggish, prices may fall further in upcoming weeks. But the approach of planting season from June-July typically spurs farmers to buy in anticipation of logistical constraints, creating upward pressure on prices.

Saudi Arabia’s SAGO awards SALIC contract to supply 240,000 tonnes of wheat from abroad

Saudi Arabia’s state grain buyer SAGO said on Sunday it had awarded Saudi Agricultural and Livestock Investment Co (SALIC) a contract to supply 240,000 tonnes of wheat from abroad to be delivered to the kingdom between August and October 2022.

The awarded cargo represents the first batch of Sago’s purchases from Saudis who have invested in agricultural assets abroad, and is equivalent to 20% of the total amount allocated to those investors, SAGO governor Ahmad Al-Fares said in a statement.

Sago did not specify the origin of the wheat that will be supplied by SALIC and if any is coming from Ukraine. In its previous wheat deliveries to the Kingdom in late 2021, SALIC said it sourced the supplies from its external investments in Australia, Ukraine and Canada.

SALIC, owned by the Public Investment Fund, was formed in 2011 to secure food supplies for the desert kingdom through mass production and foreign investments.

Indonesia June Domestic Palm Oil Sales Quota Set at 300,000 Tons

• Government sets export ratio at 5 times of local obligation
• Distribution of local cooking oil to be strictly monitored

Indonesia is setting a domestic palm oil sales quota of 300,000 tons for the month of June to ensure the country has a sufficient supply of cooking oil at affordable prices.

Producers will be allowed to export up to five times the volume of their domestic sales obligation, said Coordinating Minister of Investment and Maritime Affairs Luhut Panjaitan, who is in charge of the policy for Java and Bali regions. The government plans to revise the palm oil export levy soon, Musdhalifah Machmud, deputy official at the Coordinating Ministry for Economic Affairs, said in a briefing on Sunday.

The world’s largest producer of palm oil is imposing a range of measures to curb soaring prices of cooking oil at home after lifting a ban on overseas shipment of the edible oil, which is used in everything from food to soap to fuel. So far, 251 permits have been issued to 23 companies to ship 302,032 tons of palm oil, Trade Minister Muhammad Lutfi said.

Indonesia’s ban, which was imposed for about three weeks, was one of the biggest acts of crop protectionism since Russia’s invasion of Ukraine, which stymied exports of sunflower oil and worsened a global shortage. The move by Indonesia threatened to push up costs even more across global supply chains at a time of rampant inflation.

The government will use a digital application system to strictly monitor distribution of bulk cooking oil to avoid hoarding and manipulation of prices in the local market, Panjaitan said. The app will be similar to the one used to monitor the spread of the coronavirus pandemic, he added.

The government has introduced a program called “Bulk Cooking Oil for the People” that will require palm oil producers to sell the oil at certain prices to the local market, said Lutfi.

Indonesia’s Jan.-May Biodiesel Consumption at 3.75M Kiloliters

Palm-based biodiesel consumption reached 3.75m kiloliters this year through May, according to Dadan Kusdiana, director-general of new and renewable energy at the Ministry of Energy and Mineral Resources.

B30 biodiesel mandate program is running as expected, reaching 37% of 10.1m kiloliters annual target, Kusdiana told parliamentary hearing on Monday

Putin Warns Fertilizer Market Will Suffer From Latest Sanctions

Russian President Vladimir Putin sought to deflect Russia’s responsibility for contributing to the global run-up in food and energy costs, blaming foreign governments and saying Europe’s “short-sighted” policies drove up gas prices on the continent.

• New EU sanctions will worsen the situation on the fertilizer market, Putin says in an interview broadcast on state television
• NOTE: EU’s sixth package of measures to punish Russia over its invasion of Ukraine includes sanctions against the wife of Andrey Melnichenko; Aleksandra Melnichenko had received some of her husband’s assets after the co-founder of fertilizer maker EuroChem was penalized in March
• NOTE: Russia accounts for about a quarter of the global fertilizer market
• Putin says Russia is being made a scapegoat for problems it didn’t cause
• Sanctions to push up prices for agricultural products; that’s “a short-sighted, erroneous, stupid policy,” Putin says
• Putin denies that Russia is blocking shipments of Ukrainian grain
  • Russia won’t attack Ukraine if its ports are cleared of mines
  • Russia also guarantees safety of grain export from ports it controls
• Russia can boost its own grain export next season to 50m tons from 37m tons

Imports from Russia Hint at Normalization

Russian fertilizer shipments to Brazil appear to be on a path to normalcy. Given Russian imports were a focal point of supply fears, this is easing concerns and supporting price relief. At first glance, this week’s newly scheduled shipments dropped 36% against May’s weekly average. However, 108,000 metric tons a week have been added on average in the past five weeks — 23% above the average before the Russia-Ukraine war.

Potash and phosphates make up 81% of the fertilizer cargoes projected to arrive in the next three months, while nitrogen accounts for only 6%. Brazil seeks to recover from a 9% overall drop in imports from January-April (vs. 2021), when nitrogen comprised more than 60% of declines, driven mostly by international trade quotas and sanctions.

India’s May palm oil imports surge to 7-month high despite Indonesia’s ban-dealers

India’s palm oil exports in May were its highest in seven months and up 15% on April as the country overcame curbs on Indonesian exports by sourcing more of the commodity from Malaysia, Thailand and Papua New Guinea, five industry officials said.

Higher purchases by India, the world’s biggest importer of vegetable oil, could support Malaysian palm oil prices FCPOc3, which are trading near a record high.

India imported 660,000 tonnes of palm oil in May, up from 572,508 tonnes in April, according to the average estimate from five dealers.

Indian imports from Indonesia fell in May, but refiners managed to buy more from Malaysia, Thailand and Papua New Guinea, said Sandeep Bajoria, chief executive of Sunvin Group, a vegetable oil brokerage and consultancy.

Indonesia, the world’s biggest producer and exporter of palm oil, on April 28 halted exports of the product to control soaring prices at home. Jakarta allowed exports to resume from May 23 but put in place policies to safeguard domestic supplies.

The Solvent Extractors’ Association of India, a trade body based in Mumbai, is likely to publish May’s import figure in mid-June.

India’s soyoil imports in May rose to 352,614 tonnes from 315,853 tonnes in April, said a senior government official, who declined to be named.

The country’s soyoil imports could rise sharply in coming months, because New Delhi has allowed duty free imports of 2 million tonnes of the commodity, said a Mumbai-based dealer with a global trading firm. (Full Story)

Sunflower oil imports jumped to 123,970 tonnes in May from 67,788 tonnes a month earlier, the government official said.

India buys soyoil mainly from Argentina and Brazil and sunflower oil from Ukraine and Russia.

“As sunoil shipments from Ukraine have stopped, India is trying to import more from Russia,” the dealer said.

India Cumulative Monsoon Rainfall 38% Below Normal as of June 5

India has so far received 9.3 millimeters of rains during the current monsoon season, which runs from June through September, compared with a normal of 14.9 millimeters, according to data published by the India Meteorological Department on June 5.

• Rainfall in the eastern and northeastern region was at 6% above normal
• The northwestern region got 92% below normal rains
• Cumulative seasonal rainfall data is compiled by the IMD

US Beef Production Falls 6.8% This Week, Pork Down