Global Ag News For Mar 13.22

 TODAY – EXPORT INSPECTIONS

Wheat prices overnight are down 18 in SRW, down 14 1/4 in HRW, down 8 3/4 in HRS; Corn is down 11 1/2; Soybeans down 1 3/4; Soymeal up $0.71; Soyoil down 1.16.

Markets finished last week with wheat prices down 205 1/2 in SRW, down 176 1/2 in HRW, down 136 in HRS; Corn is unchanged; Soybeans up 15 1/2; Soymeal up $2.55; Soyoil up 0.65. For the month to date wheat prices are up 154 1/2 in SRW, up 122 in HRW, up 67 1/2 in HRS; Corn is up 60 1/4; Soybeans up 37 1/2; Soymeal up $37.90; Soyoil up 2.35.

Year-To-Date nearby futures are up 41% in SRW, up 34% in HRW, up 12% in HRS; Corn is up 26%; Soybeans up 28%; Soymeal up 20%; Soyoil up 45%.

Chinese Ag futures (MAY 22) Soybeans down 68 yuan; Soymeal down 21; Soyoil down 272; Palm oil down 616; Corn down 6. Malaysian palm oil prices overnight were down 331 ringgit (-4.94%) at 6376.

There were changes in registrations (44 Soybeans). Registration total: 2,185 SRW Wheat contracts; 1 Oats; 17 Corn; 176 Soybeans; 98 Soyoil; 0 Soymeal; 154 HRW Wheat.

Preliminary changes in futures Open Interest as of March 11 were: SRW Wheat up 249 contracts, HRW Wheat up 781, Corn up 7,186, Soybeans down 2,846, Soymeal down 644, Soyoil up 2,704.

Northern Plains Forecast: Mostly dry Monday-Tuesday. Temperatures well below normal Friday, near to below normal Saturday, near to above normal Sunday-Tuesday. 6 to 10 day outlook: Isolated showers Wednesday-Thursday. Mostly dry Friday-Sunday. Temperatures near to above normal Wednesday, near normal Thursday-Friday, near to above normal Saturday-Sunday.

Central/Southern Plains Forecast: Mostly dry to isolated showers Monday. Mostly dry Tuesday. Temperatures below to well below normal through Saturday, near to below normal Sunday, near to above normal Monday-Tuesday. 6 to 10 day outlook: Mostly dry Wednesday. Isolated to scattered showers Thursday-Friday. Mostly dry Saturday-Sunday. Temperatures above normal Wednesday, near to above normal Thursday, near to below normal Friday-Saturday, near normal Sunday.

Western Midwest Forecast: Isolated to scattered showers Monday. Isolated showers Tuesday. Temperatures well below normal through Saturday, near to above normal Sunday, above normal Monday-Tuesday.

Eastern Midwest Forecast: Isolated to scattered showers Monday. Isolated showers Tuesday. Temperatures near to below normal Friday, well below normal Saturday, near to below normal Sunday, above normal Monday-Tuesday. 6 to 10 day outlook: Mostly dry Wednesday. Scattered showers Thursday-Friday. Isolated showers to mostly dry Saturday. Mostly dry Sunday. Temperatures above normal Wednesday-Friday, near normal Saturday-Sunday.

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

Argentina Grains & Oilseeds Forecast: Cordoba, Santa Fe, Northern Buenos Aires Forecast: Mostly dry through Tuesday. Temperatures below normal Friday-Sunday, near normal Monday, near to above normal Tuesday. La Pampa, Southern Buenos Aires Forecast: Mostly dry through Tuesday. Temperatures below normal Friday-Sunday, near to above normal Monday-Tuesday.

The player sheet for 3/11 had funds: net buyers of 2,000 contracts of  SRW wheat, buyers of 5,500 corn, buyers of 3,500 soybeans, sellers of 3,000 soymeal, and  buyers of 4,000 soyoil.

TENDERS

• SOYBEAN SALE: The U.S. Department of Agriculture confirmed private sales of 264,000 tonnes of U.S. new-crop soybeans to China.
• CORN SALE: The USDA also confirmed private sales of 128,900 tonnes of old-crop U.S. corn to unknown destinations.
• WHEAT AND BARLEY PURCHASE: Tunisia’s state grains agency is believed to have purchased about 125,000 tonnes of soft wheat and about 100,000 tonnes of animal feed barley in an international tender that closed on Friday
• WHEAT PURCHASE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 163,276 tonnes of food-quality wheat from the United States, Canada and Australia in regular tenders that closed on Friday.
• WHEAT PURCHASE: The Taiwan Flour Millers’ Association purchased an estimated 50,000 tonnes of milling wheat to be sourced from the United States in a tender which closed on Friday

PENDING TENDERS

• FEED GRAIN TENDER: Iranian state-owned animal feed importer SLAL issued an international tender to purchase up to 60,000 tonnes of animal feed barley, 60,000 tonnes of feed corn and 60,000 tonnes of soymeal
• BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase 120,000 tonnes of animal feed barley
• WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of milling wheat
• FEED WHEAT, BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said it would seek 80,000 tonnes of feed wheat and 100,000 tonnes of feed barley to be loaded by June 30 and to arrive in Japan by Aug. 25. It said it would seek the grain via a simultaneous buy and sell (SBS) auction that will be held on March 16.
• WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy 120,000 tonnes of milling wheat which can be sourced from optional origins

Argentina Suspends Exports of Soy Meal, Oil Amid Tax-Hike Talk

Argentina suspended agriculture traders from registering soybean meal and oil for export, according to a memo signed by Javier Preciado Patino, the secretary for agriculture markets.

• The government typically puts a block on the export register, known as DJVE, before increasing taxes on shipments in order to stop farmers from preempting the hike with a flood of selling
• Speculation has been circling trading desks that Argentina will increase taxes on soy meal and oil to 33% from 31% currently
• Argentine farmers start collecting soybeans at the end of the month, with the bulk of the harvest done in April and May
• Soy processors had bought and priced 2.17 million metric tons from farmers through March 2, according to government data, with none of that volume registered yet for export
• The suspension comes as prices for crops soar because of Russia’s invasion of Ukraine
• How War in Ukraine Is Tearing Apart the Global Food System
• Argentina had already intervened in food markets since the start of the war with a subsidy for the domestic wheatindustry that mirrored an earlier policy for vegetable oils

China beefs up soybean breeding to boost yield

Northeast China’s Heilongjiang Province, the country’s leading soybean production base, has selected 23 new soybean varieties for breeders, as the government has been committed to the breeding efforts in order to boost the yield, quality, and disease resistance of the crop.

Du Zhentao, chairman of a pilot modern agricultural cooperative in Hailun City, Heilongjiang, said he is ready to continue planting “Dongsheng 22,” a new soybean variety that he tried last year.

He said the seeds developed by Li Yanhua, a researcher with the Northeast Institute of Geography and Agroecology, Chinese Academy of Sciences, proved a yield per mu (about 0.067 hectares) exceeding 200 kg, much higher than before.

China is striving to achieve self-sufficiency of oil-bearing crops such as soybeans. The Heilongjiang provincial science and technology has implemented a biological breeding program to breed the new soybean varieties.

Heilongjiang’s soybean planting area accounts for more than 40 percent of the country’s total. This year, the province has set the target of adding 10 million mu of soybean plantation area to boost the output.

Turkish Ships Carrying Sunflower Oil Start Leaving Azov Sea

Turkish ships with cargoes of sunflower oil have been permitted to exit the Azov Sea, Turkey’s Transportation Minister Adil Karaismailoglu said, after transit in the waterway linked to the Black Sea was suspended following Russia’s attack on Ukraine.

Five of 18 Turkish commercial vessels have so far sailed toward the Black Sea and will start arriving at their destinations in Turkey starting Sunday, Karaismailoglu said in a Demiroren Press Agency report. The others are waiting at the Kerch Strait and in the Azov Sea, he said.

Ships Start Moving Again Into Black Sea as Ukraine War Continues

The shipments offer some respite to concerns over the supply of sunflower oil in Turkey, where surging prices for the kitchen staple had triggered panic buying in the country.

The Ukraine war has thrown the world’s global crop markets into chaos as vessel traffic came to a halt after Russia’s invasion began on Feb. 24. The two countries supply more than a quarter of the world’s wheat exports, a fifth of corn sales and about 80% of sunflower oil cargoes.

The concerns over higher crop prices threatens to elevate Turkey’s inflation, which is already running at 20-year high.

Brazil Fertilizer Plan Mulls to Reduce Imports to 45% of Demand

Brazil aims to reduce fertilizer imports to 45% of consumption by 2050 from the current 85% even if demand for crop nutrients doubles in the period, according to a statement from Brazilian government on its national plan for the sector launched Friday.

Plan addresses a tax policy favorable to the sector, rising credit to producers, incentives for private companies, production capacity increase and improvements in logistics

Egypt Targets Buying Over 6m Tons in Local Wheat in 2022 Season

Local output will be around 10m tons this year, cabinet says in statement. Egypt working on additional incentives to encourage farmers to sell their crop to govt

Egypt to receive 189,000 tonnes of Black Sea wheat – ministry

Egypt is to receive a total of 189,000 tonnes of previously contracted wheat in the coming days after it was shipped from Russia, Romania and Ukraine, the Supply Ministry said on Sunday.

Egypt is often the largest importer of wheat in the world and its purchases have been thrown into turmoil by Russia’s invasion of Ukraine.

Egypt received 63,000 tonnes of French wheat on March 8, and a similar amount of Romanian wheat on March 5, the Supply Ministry’s General Authority for Supply Commodities said in a statement.

Egyptian officials have said they are working to secure booked cargoes of wheat from the Black Sea and to purchase from other origins amid the uncertainty over Black Sea shipments.

China sells 525,869 tonnes of wheat at auction of state reserves – trade centre

China sold 525,869 tonnes of wheat, or 100% of the total offer, at an auction of its state reserves on March 9, the National Grain Trade Center said in a statement on Monday. The average selling price of the wheat was 2,991 yuan ($471.16) per tonne.

Ukraine to start 2022 spring sowing in coming days – deputy minister

Ukraine plans to start sowing spring grains in the coming days and has enough grain in stocks to ensure the population has enough bread, deputy agriculture minister Taras Vysotskiy said on Saturday.

He said the country, which consumes 8 million tonnes of wheat a year, had 6 million tonnes in stocks. Stocks also include 15 million tonnes of corn and a five year supply of sunflower oil.

Ukraine bans fertiliser exports – agriculture ministry

Ukraine, a major global producer of agricultural products, has banned exports of fertilisers given the Russian invasion, the agriculture ministry said on Saturday.

Ukraine has already banned exports of some agricultural commodities and introduced licenses for its key export goods – wheat, corn and sunflower oil.

“The cabinet of ministers is introducing a zero quota for the export of mineral fertilisers that is a de facto ban on the export of fertilisers from Ukraine,” the ministry said in a statement.

It said the ban would help “to maintain balance in the domestic market” and applied to nitrogen, phosphorus, potassium and complex fertilisers.

Ukraine traditionally starts spring field work in late February or in March. Farmers say they will start sowing in safe areas as soon as they can.

Ukraine’s President Volodymyr Zelenskiy said on Friday the country must sow as many crops as possible this spring, despite the Russian invasion.

The country’s agriculture producers’ union said this week farmers were likely to reduce areas sown to sunseed, rapeseed and corn this year, replacing them with cereals – buckwheat, oats and millet.

Ukraine, the world’s largest exporter of sunflower oil, had forecast before the invasion that it could export more than 60 million tonnes of grain, including 33 million tonnes of corn and 23 million tonnes of wheat, in the 2021/22 July-June season.

The agriculture ministry said Ukraine had exported 43 million tonnes of various grains in the 2021/22 season as of Feb. 23, the day before the invasion.

Egypt bans exports of vegoil and corn for three months

Egypt’s trade ministry on Saturday banned exports of all kinds of vegetable oil and corn for three months starting from March 12, the ministry said in a statement.

Egypt said on Thursday it was banning exports of lentils, pasta, wheat, flour and fava beans for three months from March 11.

Russia cuts wheat exports 53.1% YoY to nearly 1.45 mln tonnes in January – customs service

Russia cut exports of wheat and meslin 53.1% year-on-year to 1.448 million tonnes in January 2022, the Federal Customs Service (FCS) said on Friday.

The price of exported grain decreased 36.6% to $455 million.

Russia also exported 109,100 tonnes of vegetable oil totaling $144.1 million in January, which was 63.4% and 53.5% less, respectively, than in January last year.

Ukraine Farmers Urged to Sow But Fear for Workers’ Lives

• Zelenskiy makes appeal to growers as food supply threatened
• UN says 30% of fields for corn, sunflowers may not be planted

Ukraine President Volodymyr Zelenskiy is urging farmers to sow as many fields as possible to protect the food supply. But several of the nation’s largest agribusinesses say some plantings just won’t happen if Russia continues its war in Europe’s breadbasket.

The country should organize a full-fledged sowing campaign in all of its territory “to the extent that’s possible,” Zelenskiy said in a video released Friday. “All depends on people and the situation, because this is about life.” His nation is the world’s second-biggest shipper of grains and biggest exporter of sunflower oil.

One of Ukraine’s largest agricultural companies, UkrLandFarming, said a number of its company managers had been killed in Sumy in northern Ukraine, and in Kyiv.

UkrLandFarming has lost at least 120,000 hectares (297,000 acres) of land in the Kherson, Odesa and Mykolayiv regions to the Russian invasion, or about a third of its land portfolio. It’s been forced to shut three egg farms including Europe’s largest, the Chornobaivka factory near Kherson, where 3.1 million laying hens are dying, the company said.

IMC SA, another agricultural company, wants to keep its operations going, but it isn’t allowing workers into many fields because of worries about their safety, Chief Executive Officer Alex Lissitsa said Friday in an interview. Lands owned by the company, among Ukraine’s 10 largest agribusinesses, are concentrated in the north, where Russian forces are occupying villages. Bridges and roads are broken, and roadways are mined, they said, compounding the hurdles for sowings usually done by mid-May.

“Poltava hopefully will be planted, but other fields not, because I’m just scared to send my people,” Lissitsa said, naming a region east of Kyiv. “We do wish that the war will be ending soon, and then we’re going to prepare something and try to plant everywhere. But honestly, nobody knows.”

The company cultivates grains and oilseeds on about 120,000 hectares, and also produces milk from its dairy herd.

Ukraine’s farming sector is one of the world’s largest and hawks its bounty of grains and vegetable oil across Asia, Europe and Africa. Russia invaded at a vital time for fieldwork, endangering Ukraine’s food system and the global supply chain.

Farmers are pushing forward wherever possible. MHP SE, another major agribusiness, said 50,000 hectares of its land are occupied by Russian artillery, but it plans to sow the rest of its fields in two weeks if nothing changes.

Palm Oil Imports by India Slump to 12-Month Low in February: SEA

Palm oil purchases by the world’s biggest buyer decreased to 454,794 tons in February, from 553,084 tons a month earlier, according to the Solvent Extractors’ Association of India.

• NOTE: That’s lowest since February 2021, when the nation imported 394,495 tons, and is in line with estimates
• Soybean oil imports at 376,594 tons last month vs 391,158 tons in January
• Total vegetable oil imports, including non-edible oil, at 1.02m tons in February vs 1.27m tons m/m
• Edible oil stockpiles at ports and in the pipeline were 1.87m tons on March 1, compared with 1.862m tons at the start of February
• India’s sunflower oil purchases fell more than 50% to 152,220 tons in February, from 307,684 tons a month earlier
• India’s sunflower oil imports in March will likely be similar to February
• Shortage of sunflower oil supplies in the domestic market could be met through higher availability of soybean and rapeseed oils
• Indonesia’s plan to increase domestic sale quota of palm oil will further reduce exports from the country

SOYBEAN/CEPEA: High demand from abroad boosts soybean prices in BR

The prices for soybean and its by-products are still rising in the Brazilian market, influenced by firm demand in Brazil and the significant increase in the demand from abroad. This scenario has increased the dispute between national processors and international consumers, boosting prices to record levels in the Brazilian spot market. Valuations are also linked to lower supply in South America and the consequent reduction in the world stock/consumption ratio, which is currently the lowest since 2013/14, according to the USDA.

The ESALQ/BM&FBovespa Index Paranaguá rose by 2.1% between Mar. 3 – 10, to BRL 207.14 (USD 41.28) per 60-kilo bag on Thursday (10), the highest nominal level in the series of Cepea, which began in March 2006.

The CEPEA/ESALQ Index Paraná for soybean increased by 1.4%, to BRL 202.56 (USD 40.37)/60-kilo bag on Mar. 10. On Tuesday (8), this Index hit BRL 203.22/bag, also a nominal record in the series of Cepea, which began in July/97. On the average of the regions surveyed by Cepea, prices rose by 1.4% in the over-the-counter market (paid to farmers) and by 1.7% in the wholesale market (deals between processors).

The positive side to processors is that the demand for by-products has been high too, allowing costs to be passed on. Based on the FOB prices for soybean, meal and oil at the port of Paranaguá (PR) on Thursday (10), “crush margin” has been calculated by Cepea at USD 114.59/ton for shipment in April/22 and at USD 93.14/ton for shipment in May/22, while in the same period last year, crush margin was below USD 50.00/ton.

As for soybean meal, on the average of the regions surveyed by Cepea, quotations rose by 1.9% in the last seven days. In São Paulo city, soy oil prices (with 12% ICMS) increased by a staggering 6.4% between March 3 and 10, to BRL 9,710.84/ton on March 10 – on Wednesday (9), values closed at BRL 9,790.30/ton, a nominal record in the series of Cepea, which began in Jul/98 for this product.

As for exports, in February, Brazil shipped 6.27 million tons of soybean, the highest volume since August 2021 and a record for the month. China continues as the top destination for the Brazilian soybean.

The exports of soybean meal set a record last month too, totaling 1.58 million tons, 7.1% higher than that in Jan/22 and a staggering 52.79% up from that in Feb/21, according to Secex. Indonesia, Thailand and Vietnam were the major purchasers of the product in February. On the other hand, oil exports decreased by 36.7% compared to that in Jan/22, totaling 89.46 thousand tons. Considering only months of February, however, that was the highest amount exported since 2018. The major destination for the Brazilian soy oil last month was India.

SUPPLY AND DEMAND – On a report released on March 9, the USDA revised down the estimates for the world 2021/22 soybean crop by 2.77% compared to that previously reported, to 353.79 million tons. This decrease is linked to the crop failure in South America because of bad weather conditions during beans development.

Brazil is expected to harvest 127 million tons of soybean, according to the USDA, 5.22% down from that previously forecast. On the other hand, Conab estimates the national harvest to be lower, at 122.76 million tons, 11.1% down from that forecast in February. According to Conab, 52.5% of soybean crops had been harvested by March 5.

CORN/CEPEA: Prices rise in BR and surpass BRL 100/bag

High demand from both the domestic and the international markets have boosted corn prices in Brazil. This week, quotations surpassed BRL 100.00 per 60-kilo bag in many of the regions surveyed by Cepea.

Brazilian purchasers need to buy some new batches, however, sellers have been away from the market and/or prices are considered too high in the spot. Purchasers have been even more concerned about production costs, since the recent fuel valuation is expected to raise freight prices.

As for the international demand for the Brazilian corn, the Russia-Ukraine war has led to changes in shipping routes, raising the demand for the national cereal. Thus, sales have been high at Brazilian ports, majorly at the port of Paranaguá (PR), where, according to Cepea collaborators, corn availability is higher. In Santos (SP), agents are said to be focused on receiving soybean.

PRICES – In Northern Paraná, Paranaguá (PR), São Carlos (SP) and Ijuí (RS), average prices have been near or higher than BRL 100/bag. On the average of the regions surveyed by Cepea, the prices paid to corn farmers (over-the-counter market) increased by 4.7%; in the wholesale market (deals between processors), values rose by 5.7%.

Between Mar.3 – 10, the ESALQ/BM&FBovespa Index (Campinas, SP) rose by 3.8%, to BRL 101.42 (USD 20.21) per 60-kilo bag on Thursday, 10, the highest nominal level since August. At the port of Paranaguá, values rose by a staggering 9% in that period, to BRL 109.44/bag on Thursday.

ESTIMATES – Data released on Thursday (10) by Conab reinforced estimates for lower corn supply in the first semester, due to the failure of the summer crop, forecast at 24.33 million tons, 1.6% down from that last season. For the second crop, Conab estimates the output at 86.15 million tons, 25 million tons up (+42%), in the same comparison. For the third crop, production estimates were revised up by 17%, to 1.85 million tons.

Brazilian corn exports between Feb/22 and Jan/23 are estimated at 35 million tons, and imports, at 1.7 million tons. Domestic consumption continued forecast at 76.53 million tons. Thus, ending stocks by Jan/23 are predicted to total 10.3 million tons, 32% higher than that last season (Jan/22), which could bring some relief to Brazilian purchasers from the second crop onwards.

CROPS – High temperatures and low rainfall this month are concerning Brazilian farmers. In Paraná, 64% of the summer crop had been harvested by March 7, according to Seab/Deral. As for the second crop, 69% had been sown.

In Rio Grande do Sul, 64% of crops had been harvested by March 10, and production estimates are currently 37.5% lower than that last season, according to Emater/RS.

In Mato Grosso, sowing has been fast. According to data from Imea, 94.08% of corn crops had been sown by the end of last week. Imea estimates the output to be 24% higher than that in the 2020/21 season, at 40.56 million tons.

Sinograin Plans Auction of 4,066 Tons of Rapeseed Oil Thursday

Sinograin plans to auction 4,066 tons of rapeseed oil produced in 2020 Thursday afternoon, it says in a statement on its website.

The Chinese grains stockpiler sold 10,778 tons of rapeseed oil, accounting for 10% of the volume it planned to sell, last Friday, it says in a separate statement

Iowa reports highly lethal bird flu in commercial egg-laying chickens

Iowa reported an outbreak of highly lethal bird flu in a commercial flock of egg-laying chickens on Friday, raising the risk for further infections in the top U.S. egg-producing state.

Iowa was already facing restrictions on exports of poultry products after a commercial turkey flock tested positive for the disease on Sunday. (Full Story)

In 2015, Iowa was at the center of the biggest-ever U.S. outbreak of avian flu, which killed about 50 million egg-laying chickens and turkeys.

France to cull millions more poultry as bird flu hits west

France is to slaughter several million poultry birds in the second mass cull of flocks this winter as the country tries to contain outbreaks of avian influenza, the agriculture ministry said on Friday.

After a wave of cases in the southwest led to the culling of around 4 million animals, the ministry said the disease has spread rapidly since last month in the Pays de la Loire region, another major poultry zone further up France’s west coast.

The authorities had slaughtered 1.2 million birds so far in the region and expect to cull another 3 million, as they adopt the same strategy as in the southwest by emptying poultry farms in areas near outbreaks, a ministry official said.

Avian influenza, commonly called bird flu, is often carried by wild birds in autumn and winter. The highly contagious H5N1 strain has been spreading quickly in Europe in recent months, prompting massive culls in several countries. (Full Story)

Bird flu cannot be passed on to humans through the eating of poultry products, although there have been occasional cases of humans catching strains of the disease.

As the Pays de la Loire region is a major supplier of chicks, the authorities would grant an exemption to allow reproduction farms in high-risk zones to continue supplying the rest of the country, notably the southwest that is about to resume breeding after its bird flu lockdown, the ministry added.

Pricey Oil to Lift Ethanol Use as More Supply Comes Online: USDA

U.S. ethanol demand is poised to increase as high oil prices make the biofuel more competitive at the same time the USDA invests to expand E-15 availability, U.S. Secretary of Agriculture Tom Vilsack said during the Commodity Classic in New Orleans.

• “We can expect increases in use since we are adding over $100 million in USDA resources to expand the infrastructure to make E-15 more available,” said Vilsack
• Consumers will “see price difference” between E-15 and regular gasoline and “they can make a decision on what they want to do”
• Vilsack also said that the USDA will “continue looking at ways to deal with the immediate challenge, but also looking longer-term with aviation fuel and next generation of biofuels”

Fertilizer Prices Jump Again as War Heightens Supply Concern

As Russia’s invasion of Ukraine enters its third week, urea and phosphate prices spiked anew, particularly in New Orleans (NOLA) and offshore markets such as Brazil and Egypt. Rising natural gas prices will keep Europe’s ammonia producers offline in the near term. Potash prices also jumped in NOLA and Brazil, which imports significant volume from Russia.

Unrest Sparks Surge in Fertilizer Prices

Supply uncertainty fueled by Russia’s invasion of Ukraine drove fertilizer prices dramatically higher this week, and more increases are expected. Higher ammonia prices were reported in the Middle East, while increases are likely at Tampa and in Europe as plants start closing due to higher natural gas prices. Urea soared in Egypt, Asia and New Orleans (NOLA), where new granular barge trades jumped to $770-$900 a short ton (st) vs. last week’s $600-$740. Big hikes in phosphate pricing were also confirmed at NOLA and in Brazil, with Corn Belt prices jumping $85/st from the prior week. Potash prices moved up $80-$90/st at NOLA.

U.S. urea ammonium nitrate, ammonium sulfate and ammonium nitrate prices moved higher as well, while a new round of increases drove phosphate prices up again in the Western U.S.

U.S. agriculture department opens inquiry into fertilizer, seed prices

The U.S. Department of Agriculture is opening an inquiry into the impacts of concentration in the fertilizer, seed, and retail markets, according to an agency press release.

The inquiry stems from the Biden administration’s July 2021 executive order to promote competition across the U.S. economy, the agency said Friday.

Global supply chain problems and inflation have sent fertilizer and other farm input prices soaring, limiting farmers’ ability to capitalize on decade-high grain prices. Fertilizer is expected to be even more scarce as global markets shun Russia, a fertilizer exporter to North and South America, following its Feb. 24 invasion of Ukraine.

“Concentrated market structures and potentially anticompetitive practices leave America’s farmers, businesses, and consumers facing higher costs, fewer choices and less control about where to buy and sell, and reduced innovation — ultimately making it harder for those who grow our food to survive,’ Agriculture Secretary Tom Vilsack said in the release.

Vilsack said in February that he hoped that fertilizer and agricultural input supply companies would not take advantage of the crisis in Ukraine to push already high prices higher.

The Iowa attorney general’s office is also investigating high fertilizer prices. Prices for urea and potash are up more than 200% since January 2021 and liquid nitrogen is up 290%, the office said in February.

China Halts Beef Shipments From JBS Plant in Brazil: Valor

China halted for a week beef shipments from a JBS plant at Mozarlandia in Brazil’s Goias state, after the cargoes tested positive for Covid-19, Valor Economico reports, citing the decision taken by the Chinese customs administration.

• Shipments from another plant owned by Frialto in Mato Grosso do Sul state were also suspended for a week, according to the newspaper
• Suspension is just a routine measure and shipments from both companies are expected to be resumed after a week, Valor adds
• JBS’s unit in Mozarlandia is one of its largest in Brazil, the story says

U.S. Beef Production Falls 1.6% This Week, Pork Rises: USDA