Global Ag News For Mar 15.22

TODAY – NOPA CRUSH

Wheat prices overnight are up 31 3/4 in SRW, up 25 1/4 in HRW, up 17 3/4 in HRS; Corn is down 7 1/2; Soybeans down 21; Soymeal down $0.63; Soyoil down 1.24.

For the week so far wheat prices are up 21 1/2 in SRW, up 36 in HRW, up 17 3/4 in HRS; Corn is down 21 3/4; Soybeans down 26 1/2; Soymeal up $0.11; Soyoil down 3.32.

For the month to date wheat prices are up 194 in SRW, up 172 1/4 in HRW, up 94 in HRS; Corn is up 50; Soybeans up 12 3/4; Soymeal up $31.70; Soyoil up 0.21.

Year-To-Date nearby futures are up 46% in SRW, up 40% in HRW, up 11% in HRS; Corn is up 25%; Soybeans up 24%; Soymeal up 16%; Soyoil up 29%.

Chinese Ag futures (MAY 22) Soybeans up 66 yuan; Soymeal up 12; Soyoil down 88; Palm oil down 578; Corn up 11 — Malaysian palm oil prices overnight were down 233 ringgit (-3.66%) at 6128.

There were changes in registrations (71 Soybeans, 50 Soymeal). Registration total: 2,185 SRW Wheat contracts; 1 Oats; 17 Corn; 247 Soybeans; 98 Soyoil; 50 Soymeal; 154 HRW Wheat.

Preliminary changes in futures Open Interest as of March 14 were: SRW Wheat up 2,075 contracts, HRW Wheat down 340, Corn down 1,722, Soybeans up 1,358, Soymeal up 2,318, Soyoil down 2,369.

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

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

Western Midwest Forecast: Mostly dry Tuesday-Wednesday. Scattered showers south Thursday night-Friday. Temperatures above normal through Friday.

Eastern Midwest Forecast: Isolated showers Tuesday. Mostly dry Wednesday. Isolated showers Thursday. Scattered showers Friday. Temperatures above normal through Friday. 6 to 10 day outlook: Scattered showers Saturday. Mostly dry Sunday-Monday. Scattered showers Tuesday-Wednesday. Temperatures above normal Saturday-Wednesday.

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

The player sheet for 3/14 had funds: net sellers of 1,000 contracts of  SRW wheat, sellers of 12,500 corn, sellers of 2,500 soybeans, buyers of 4,500 soymeal, and  sellers of 7,000 soyoil.

TENDERS

• CORN SALE: The U.S. Department of Agriculture confirmed private sales of 159,000 tonnes of U.S. corn to Mexico for shipment in the 2021/22 marketing year.
• WHEAT TENDER: Turkey’s state grain board, TMO, has issued an international tender to purchase and import about 270,000 tonnes of milling wheat
• BARLEY TENDER: Algeria’s state grains agency OAIC has issued an international tender to buy a nominal 50,000 tonnes of animal feed barley to be sourced from optional origins
• WHEAT TENDER: South Korea’s Major Feedmill Group (MFG) has issued an international tender to purchase up to 210,000 tonnes of animal feed corn

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.

CROP SURVEY: U.S. February Soybean Crush Seen at 165.5M Bushels

U.S. Inspected 1.145m Tons of Corn for Export, 773k of Soybean

Russia Grain-Export Ban to Cover Only Eurasian Union:IFX

Russia’s planned ban on grain exports through June 30 will cover only shipments to countries of the Eurasian Union and allow shipments under the existing 11m-ton quota to other countries, Interfax reported, citing a government document.

• Deputy Prime Minister Viktoria Abramchenko says in Telegram she signed off on the the acts to impose the ban that were proposed by the Industry Ministry, according to Interfax
• Grains impacted are wheat, meslin, rye, barley and corn; exports will be allowed under licenses within the earlier quota
• “This is a temporary measure to keep volumes inside the country. It will allow us to keep prices down and cover the needs of domestic consumers and processors,” she says, without specifying when measures may take effect
• White sugar and raw sugar exports outside Russia also banned until Aug. 31; sugar export for customs union possible according to Agriculture Ministry decisions

Ukraine Spring-Grain Plantings May Fall Almost 40% Y/y: APK

Ukrainian farmers may plant about 4.7m hectares (11.6m acres) of spring grain this year, down 39% y/y, consultant APK-Inform said in a note, citing it as a preliminary estimate.

• Farmers are unable to start sowing in many key regions due to the Russian invasion
• Supply-chain disruptions will also hamper planting, yields
  • “Farmers cannot get the seeds they have booked”
• For winter crops, about 5.5m hectares of the 7.6m hectares sown last autumn with wheat, rye and barley may get harvested
• Sunflower plantings could fall to a 13-year low of about 4.2m-4.4m hectares, down 35% y/y, APK-Inform said in a separate note
  • Most of the military action is concentrated in key sunseed areas in the south and east

Russia to License Some Grain Exports Amid Planned Ban: Interfax

A planned ban on grain exports through June 30 will allow some shipments under indvidual licenses. Interfax reports, citing comments by Deputy Prime Minister Viktoria Abramchenko on Telegram.

• Abramchenko says she signed on off the the acts to impose the ban that were proposed by the Industry Ministry
• Grains impacted are wheat, meslin, rye, barley and corn; some exports will be allowed under license within the earlier quota
• “This is a temporary measure to keep volumes inside the country. It will allow us to keep prices down and cover the needs of domestic consumers and processors,” she says
• White sugar and raw sugar exports outside Russia also banned until Aug. 31; sugar export for customs union possible according to Agriculture Ministry decisions

Brazil 2021-22 Soy Harvest 64% Complete as of March 10: AgRural

Compares with 55% a week earlier and 46% a year before, according to data compiled by consulting firm AgRural.

• The works are practically finished in Mato Grosso state, where there are still quality problems due to excessive rain, and in the final stretch in Goias and Mato Grosso do Sul states, AgRural says
• Center-South second corn planting was 94% complete as of March 10, compared with 74% a year earlier
• 2021/22 summer corn harvest is 52% complete in the Center-South versus 41% a year before

Brazil 2022 Soybean Exports Seen at 78m Tons: Safras

Brazilian producers now expect to export 78m tons of soybeans in 2022, less than the 80.5m tons estimated in the report released by the end of Feb., consulting firm Safras & Mercados said in an emailed report.

• If materialized, exports will be 9% lower than 86.1m tons indicated on 2021
• Safra sees crushing of 47.5m tons in 2022 and 46.5m tons in 2021, a increase of 2%
• Total soybeans supply is expected to fall 7%, to 131.9m tons
• Demand is estimated at 129.1m tons, down 5% over the previous year

About 28 Crop Vessels Left Russia In Early March

• About 28 agriculture vessels departed Russian ports as of last week, down from 50 vessels the week prior, Nabil Mseddi, CEO of AgFlow, says by phone
• The 28 departing vessels were carrying about 350k tons of staple crops, such as wheat
• Vessel traffic at Ukraine ports remains at a standstill

Spain Facilitates Latin American Corn Imports During Ukraine War

Spain is temporarily allowing the import of Latin American corn with traces of pesticides as a solution to the disruption of supplies from Ukraine, the Ministry for Agriculture, Fishing and Food says in a statement.

• Argentinian and Brazilian corn will replace Ukrainian imports for the time being
• The Ministry concluded six out of ten pesticides “do not present a problem in light of the current legislation,” and the remaining four will be subject to use limits
• Corn will be used for animal feed

Asia’s Reliance on Russia Fertilizer Imperils Crop Yields

Asia’s food production could take a hit should a prolonged war lead to a shortage of fertilizer from the sanctions-hit Russia and Belarus. The two nations account for roughly 40% of imported potassium fertilizer in Vietnam, Indonesia and China, and over a quarter in India, Thailand and Malaysia. “Without a sufficient supply of it, crops get reduced yields, utilize water less efficiently and are more susceptible to pests and diseases,” said Wellian Wiranto, economist at Oversea-Chinese Banking Corp. A decline in farm production risks worsening food inflation that’s already elevated due to persistent supply chain bottlenecks, he added.

China releases fertilizer stocks for spring, more expected

China has begun the annual release of fertilizers to the market ahead of spring planting, its state planner said late on Monday, ensuring sufficient supplies to help it meet its grain targets.

More than 3 million tonnes will be issued during the key spring ploughing period, and the government will monitor the market closely to ensure stable supply and prices, said the National Development and Reform Committee in a statement.

NDRC has implemented a fertilizer reserve scheme since the 2004-2005 crop year, with volumes released depending on the market situation.

Beijing is however also expected to release fertilizer for the summer growing period for the first time ever this year, said Gavin Ju, analyst at CRU, underlining the concern about soaring global prices and tight supplies.

A tender for a temporary fertilizer reserve for summer application including urea, diammonium phosphate (DAP) and NPK was issued in December, and will be released from June, said Ju.

Indonesia to Subsidize Bulk Cooking Oil to Push Down Prices

Indonesia, world’s largest palm oil producer, will subsidize bulk cooking oil in an attempt to cool prices and maintain purchasing power, according to Airlangga Hartarto, coordinating minister for economic affairs, in a briefing on Tuesday.

• Govt will use funds from the palm oil levy to keep the ceiling price of unbranded cooking oil at 14,000 rupiah/liter, Musdhalifah Machmud, deputy for food and agriculture at the ministry, says by phone
• Subsidy will be given starting April 1 and can last until end of the year
• Govt also decides to scrap ceiling price for branded cooking oil
• Both policies meant to ensure ample supply of cooking oil in the market, as Indonesia consumes about 2.4m kiloliters of bulk cooking oil every year

Oilseed Meal Exports From India Rise 5.9% M/m in February: Group

Shipments climbed to 187,320 tons in February from 176,967 tons a month earlier, the Solvent Extractors’ Association of India said in an emailed statement Tuesday.

• NOTE: Exports totaled 397,517 tons in February last year
• Soymeal exports 33,760 tons in February vs 52,771 tons in January
  • Rice bran extract sales 78,847 tons vs 72,738 tons
  • Castorseed meal exports 32,047 tons vs 35,142 tons
  • Rapeseed meal shipments 42,666 tons vs 16,164 tons
• India’s soymeal shipments are not competitive with supplies from Brazil and Argentina
  • Supplies unlikely be competitive for next 2-3 months
  • Less soy crushing boosts imports of crude soybean oil
• Rice bran extract shipments are rising on higher demand from Vietnam and Bangladesh

WHEAT/CEPEA: Prices drop abroad, but rise high in Brazil

Despite the concerns about wheat supply worldwide because of the Russia-Ukraine war, wheat prices dropped abroad last week, after rising high in previous weeks. Besides profit realization, international devaluations were linked to the release of the USDA’s supply and demand report, which indicated slight reductions in consumption, but higher ending stocks. On the other hand, in Brazil, quotations rose sharply, due to concerns about domestic supply and growing exports.

In the United States, the March/22 Future for the Soft Red Winter wheat decreased by 19.1% between March 4 and 11, from the record level of USD 13.4800/bushel to USD 10.9000/bushel (USD 400.51/ton) on March 11. At the Kansas Stock Exchange, the March/22 Future for the Hard Winter wheat dropped by 10.4% in seven days, from USD 12.0075/bushel to USD 10.7575/bushel (USD 395.27/ton). In Argentina, FOB prices at the port of Buenos Aires decreased by 1.4%, to USD 419/ton on Friday, 11. However, it is important to mention that, compared to that on Feb. 28, these prices increased sharply.

In Brazil, liquidity continues low, but wheat prices rose high in the last days, and valuations are being passed on to by-products. Cepea data show that, between March 4 and 11, the quotations paid to wheat farmers (over-the-counter market) rose by 6.44% in Santa Catarina (SC), 6.39% in Rio Grande do Sul (RS) and 5.92% in Paraná (PR). In the wholesale market (trades between processors), values rose even more sharply: by 15.46% in RS, 8.92% in SC, 7% in PR and 6.08% in São Paulo.

BY-PRODUCTS – The prices for wheat by-products increased high last week in Brazil, influenced by the valuation of wheat grain and uncertainties related to the market in the coming weeks. However, Cepea collaborators reported that these price rises hampered liquidity.

CROPS – In this month’s report, Conab revised up imports’ estimates (between Aug/21 and Jul/22), to 7 million tons. Thus, domestic availability (initial inventories + output + imports) is now forecast at 14.82 million tons, 15.2% higher than that last season.

As for demand, consumption in Brazil is estimated at 12.55 million tons, 5.5% up from that last season. However, exports between Aug/21 and Jul/22 are forecast to total 2.1 million tons, higher than that previously estimated, due to higher acceptance of lower pH levels. If this is confirmed, exports will be 2.5-fold that in the previous season (+155%). As the estimates for exports and imports increased the same, ending stocks by Jul/22 are still forecast at 176.5 thousand tons.

For the 2022/23 season, which begins in August, the output is forecast at 7.87 million tons, 2.6% higher than that in the previous crop, with imports totaling 6.5 million tons. Wheat availability is expected to decrease by 1.8%, consumption is forecast at 12.75 million tons (+1.6%), and exports, at a million tons. Ending stocks, by July/23, were revised up, to 806 thousand tons.

EXPORTS AND IMPORTS – Data from Secex show that, in Feb/22, Brazil exported 836.8 thousand tons of wheat, a record. As for imports, Brazil imported 498.76 thousand tons of wheat last month, 0.6% less than that in January, but 10.9% more than that in Feb/21. Of the total wheat imported, 86.1% came from Argentina; 6.1%, from Uruguay; 5.4%, from the United States; and 2.7%, from Paraguay. In the last 12 months, Brazil imported 6.1 million tons of wheat, according to Secex.

Brazil Sugarcane Crush Down 76.2% in 2H February, Mills Made Only Ethanol

Brazilian sugar mills in the country’s center-south region crushed a small amount of cane in the second half of February compared with a year earlier, and used it to make only ethanol, according to industry group Unica.

Center-south mills crushed 159,000 metric tons of cane in the period, a drop of 76.2% from the same period a year earlier, Unica said Monday. They made no sugar and produced 129 million liters of ethanol, up 8.1% from a year earlier.

In the period from April 1, 2021, through Feb. 28, 2022, mills in the region crushed 521.8 million tons of cane, down 12.9% from the same period a year earlier. Sugar production for the season fell 16.2% to 32 million tons, and ethanol output declined 8.8% to 27.2 billion liters.

The production mix for the season through Feb. 28 was 45.1% sugar to 54.9% ethanol, compared with 46.2% sugar and 53.8% ethanol in the same period a year earlier.

Fertilizer Prices Surge as Costs and Protectionism Cut Supplies

A shocking surge in fertilizer faces farmers, just as planting season arrives. Prices, from the U.S. corn belt to Brazil, are registering their fastest increases in years — with some up 50% in the past two weeks. Crop prices aren’t keeping up. The supply challenges look tough-to-tackle. These range from energy (much of the world’s nitrogen is based on now-soaring European natural gas) to limited capacity expansions, to protectionism. The Russia-Ukraine conflict has abruptly added export curbs and shipping halts that effectively cut major exporters out of the global spring supply mix.

Ukraine, Russia Concerns Send Brazil Fertilizer Prices Higher

Fertilizer prices in Brazil, which historically move on a weekly basis, are now showing intra-day volatility, as constraints impact key international suppliers. Prices are being quickly raised, with only small volumes offered as sellers control inventories and attempt to manage risk. Nitrogen price hikes were the most extreme this week, and now exceed $300/mt since the start of the Ukraine invasion. Phosphate prices have risen over $100/mt, while potash prices (a top concern, given imports from Russia and Belarus) are up by over $150/mt. Uncertainty is only growing, and participants expect greater disruption.

Brazil depends on Russia for nitrogen, phosphates and potash. Brazil’s government is launching a Fertilizer Plan that aims to reduce Brazil’s reliance on imports, but effects are not expected in the near term.

U.S. approves faster processing speeds at three pork plants

The U.S. Department of Agriculture (USDA) allowed three pork plants to increase processing line speeds this month as part of a trial program, reviving a policy that started under the Trump administration.

The approvals will allow meat companies to boost pork production when there are ample supplies of hogs. They also renew concerns about worker injuries and food safety at meat plants. (Full Story) (Full Story)

The USDA said it approved faster line speeds at Clemens Food Group in Hatfield, Pennsylvania; Quality Pork Processors in Austin, Minnesota; and Wholestone Farms Cooperative in Fremont, Nebraska. The companies did not respond to requests for comment.

Nine plants were eligible to apply for the trial program because they were previously able to accelerate processing under the Trump-era rule.

Last year, a U.S. judge invalidated the 2019 rule after the United Food and Commercial Workers (UFCW) Union sued the USDA over safety concerns for workers running faster slaughter lines.

The ruling restricted plants to processing 1,106 hogs per hour.

Line speeds are “unique” for plants approved for the trial program, the USDA told Reuters on Monday. The agency declined to provide the specific limits.

Plants approved for the trial program can operate at faster speeds for up to a year and are supposed to collect data on how line speeds affect workers.

The UFCW is comfortable with the program in plants it represents because companies agreed to increase staffing when line speeds accelerate to ensure safety, said Mark Lauritsen, the union’s international vice president for meatpacking. The union represents workers at Quality Pork Processors and Wholestone Farms.

Brazil ag minister says Canada cleared Brazil beef, pork imports

Brazilian Agriculture Minister Tereza Cristina Dias said on Monday that Canada had cleared imports of beef and pork from Brazil.

“We are in Ottawa and have just left the Canadian Ministry of Agriculture with … great news: the opening up of the country’s pork and beef market,” she tweeted.

Dias, who traveled to Canada to speak with local suppliers of fertilizers, especially potash companies, said now Brazilian meatpackers are able to export products to more than 200 markets around the world, which was her goal when she took over the ministry more than three years ago.

Brazilian pork and poultry lobby ABPA welcomed the announcement, but noted that the clearance for pork currently affects only establishments in Santa Catarina, as the Southern state was the only one recognized as free of foot-and-mouth disease (FMD) without vaccination at the time of the initial request.

Santa Catarina accounts for more than 50% of Brazil’s pork exports, ABPA said in a statement. Negotiations with Canadian authorities are ongoing to include new areas already recognized as free of the disease by the World Organization for Animal Health (OIE).

China to buy third batch of pork for reserves for 2022 -state planner

China will buy a third batch of frozen pork for its state reserves, the National Development and Reform Commission said on Tuesday, to support hog prices in the world’s top pork consumer.

Prices have dropped because of weak demand while the cost of grain has surged, hurting farming incomes.

U.S. detects highly lethal bird flu in Wisconsin egg-laying chickens

A highly lethal form of bird flu hit a commercial flock of egg-laying chickens in Jefferson County, Wisconsin, the U.S. Department of Agriculture said on Monday, expanding an outbreak that has limited exports of U.S. poultry products.

Prior to the infections in Wisconsin, about 4 million commercially raised U.S. chickens and turkeys had been killed since February due to outbreaks of highly pathogenic avian flu, USDA data show.

Flocks are culled after the disease is detected, and importing countries have imposed state-specific import restrictions in response.