Global Ag News for Mar 21.22

TODAY

Wheat prices overnight are up 17 in SRW, up 19 in HRW, up 7 3/4 in HRS; Corn is up 10 1/4; Soybeans up 18 1/2; Soymeal up $0.33; Soyoil up 1.70.

Markets finished last week with wheat prices down 18 3/4 in SRW, down 13 1/2 in HRW, down 2 3/4 in HRS; Corn is up 2 1/2; Soybeans up 16; Soymeal down $0.43; Soyoil down 0.08.

For the month to date wheat prices are up 146 3/4 in SRW, up 136 1/2 in HRW, up 74 in HRS; Corn is up 61 1/4; Soybeans up 49 3/4; Soymeal up $34.00; Soyoil up 1.47. Year-To-Date nearby futures are up 40% in SRW, up 36% in HRW, up 9% in HRS; Corn is up 27%; Soybeans up 27%; Soymeal up 17%; Soyoil up 31%.

Chinese Ag futures (MAY 22) Soybeans down 33 yuan; Soymeal up 40; Soyoil down 162; Palm oil down 354; Corn up 3 — Malaysian palm oil prices overnight were up 131 ringgit (+2.33%) at 5760.

There were no changes in registrations. Registration total: 2,185 SRW Wheat contracts; 1 Oats; 15 Corn; 247 Soybeans; 98 Soyoil; 0 Soymeal; 154 HRW Wheat.

Preliminary changes in futures Open Interest as of March 18 were: SRW Wheat up 11 contracts, HRW Wheat down 726, Corn down 1,977, Soybeans up 932, Soymeal down 563, Soyoil down 5,285.

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

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

Western Midwest Forecast: Scattered showers Monday-Tuesday. Temperatures above normal through Tuesday.

Eastern Midwest Forecast: Mostly dry Sunday-Monday. Scattered showers Tuesday. Temperatures above normal through Tuesday.

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

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

The player sheet for 3/18 had funds: net sellers of 12,000 contracts of  SRW wheat, sellers of 7,500 corn, sellers of 5,000 soybeans, buyers of 2,000 soymeal, and  sellers of 5,500 soyoil.

TENDERS

• WHEAT SALE: Turkish state grain board TMO provisionally bought 260,000 tonnes of wheat in an internal market tender on Friday, in line with the volume sought, traders said.
• WHEAT SALE: A group of South Korean flour mills bought about 45,000 tonnes of milling wheat expected to be sourced from the United States in a purchase on Friday
• Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), said on Friday it was seeking vegetable oils in an international purchasing tender for arrival May 5-25, 2022. The deadline for offers is March 22.

PENDING TENDERS

• FEED WHEAT TENDER: Two importer groups in the Philippines have issued separate tenders to purchase together a total of around 270,000 tonnes of animal feed wheat
• WHEAT TENDER: Iranian state agency the Government Trading Corporation (GTC) has issued another international tender to purchase about 60,000 tonnes of milling wheat
• FEED GRAIN TENDER: Iranian state-owned animal feed importer SLAL has 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
• SOYOIL TENDER: Iran’s state purchasing agency GTC has issued an international tender to purchase about 30,000 tonnes of soyoil
• WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of milling wheat
• WHEAT TENDER: A group of South Korean flour mills has issued a tender to purchase about 45,000 tonnes of milling wheat to be sourced from the United States
• BARLEY TENDER: Jordan’s state grains buyer has issued a new international tender to purchase 120,000 tonnes of animal feed barley
• WHEAT TENDER: Jordan’s state grain buyer has issued an international tender to buy 120,000 tonnes of milling wheat sourced from optional origins
• BARLEY TENDER: A buyer in Qatar has issued a tender to buy an estimated 105,000 tonnes of animal feed barley

Egypt Sets New Prices for Unsubsidized Bread: Cabinet

Government sets price of loaf weighing 45 grams at 0.50 Egyptian pounds, the Cabinet says in a statement.

• 65 gram loaf set at 0.75 pounds; 90 grams at 1 pound and a kilogram of bread at 11.5 pounds
• Decree also sets soft bagatte loaf weighing 40 grams at 0.50 pounds, 60 gram loaf at 0.75 pounds and 80 gram loaf at 1 pound

Kazakhstan Wheat Harvest Seen Flat in 2022-23: USDA FAS

Kazakhstan’s wheat production and exports in the 2022-23 season, which starts in September, will likely be unchanged from the current year, USDA’s Foreign Agricultural Service says in a note.

• Wheat harvest estimated at 11.8m tons, exports at 7.4m tons
• “Grain producer contacts were pessimistic about the upcoming planting season, given last year’s dry conditions and this winter’s reduced snow cover in several grain producing regions”

Brazil Has to Cut Wheat Import Tariff, Guedes Says

Government will reduce more taxes and import tariffs to face to face the cost increase triggered by Russia’s invasion of Ukraine, Economy Minister Paulo Guedes said during an event.

• Brazil’s government plans on reducing IPI taxes by another 35%: Guedes
• Minister also said govt may take additional measures to reduce fuel prices if necessary

Canada Cuts 2022-23 Wheat Ending Stocks by 450,000 Tons

Ending stocks cut as exports est. raised for both 2021-22 and 2022-23 marketing years, Agriculture and Agri-Food Canada says Friday in an emailed report.

• 2022-23 ending stocks cut to 4.7m tons vs 5.15m in February report
• 2021-22 ending stocks cut to 3.8m tons vs 4m tons
• 2022-23 canola ending stocks cut to 600,000 tons from 650,000 tons

Bulgaria Detains 300,000 Tons of Grains, Halting Some Export

Bulgaria’s revenue agency found more than 300k tons of wheat, sunflower and corn without documents providing their origin, the tax watchdog says in a statement.

• The inquiry in a village near the Black Sea city of Burgas is part of the agency’s efforts to tighten the legal control over supplies and trade with grains, sunflower oil, flour
• Earlier, local private BTV channel reported that the operation has delayed the loading of 45k tons on a ship meant to deliver to Spain, citing warehouse co-owner

China sells 522,804 tonnes of wheat at March 16 auction

China sold 522,804 tonnes of wheat, or 99.61% of the total offer, at an auction of the state reserves on March 16, said the National Grain Trading Center in a statement on Monday.

The average selling price of the wheat was 2,958 yuan ($465.03) per tonne, edging down slightly from last week’s average.

Wheat prices in China have rallied in recent weeks on tightening supplies and elevated international prices.

U.S. Grain Shipping Costs Soar as War, Drought Boosts Demand

War in Ukraine and drought in Brazil have global crop importers turning to the U.S., and the pivot means costs to ship grains and soybeans on the Mississippi River have soared to an almost eight-year high.

China and other importers were purchasing more soybeans than usual at this time of year from the U.S. after dry weather took a toll on the crop in top-producing Brazil. Meanwhile, Russia’s invasion of Ukraine has damaged ports along the Black Sea and halted corn shipments beginning last month.

The disruptions caused ripple effects on the Mississippi River, the main route for crops on barges to flow to export terminals along the U.S. Gulf Coast. Rates for dry bulk barges on the Mississippi at St. Louis jumped to $34.75 per short ton, the highest since 2014, according to U.S. Department of Agriculture data.

The higher shipping costs faced by importers are adding to fears of further inflation, which is already the highest in four decades in the U.S.

Elevated water levels on Mississippi River were also restricting the amount of barges that towboats could push by about 15%, Barrett said. Waters were near a minor flood stage on the Mississippi River at Baton Rouge.

Further pushing up barge freight was the resurgence in coal markets amid demand to replace Russian natural gas and crude oil, presenting a rare demand boon for both agricultural and energy along U.S. rivers.

China calls for efforts on spring farming

China will make all-out efforts to ensure that spring farming proceeds in good time, while implementing COVID-19 epidemic control, according to the Ministry of Agriculture and Rural Affairs.

The ministry will guide farmers to optimize the planting structure by stabilizing the growth of the staple grains and corn, as well as expanding soybean and oil production, according to a circular issued by the ministry.

Differentiated epidemic prevention and control measures should be taken based on rural conditions, the circular stressed, noting that farming activities should be carried out in time.

The transport of agricultural supplies should be smoothened out, with “green channels” established in epidemic-affected areas, it said.

China aims to ensure that the grain output for 2022 stays above 650 billion kg, according to this year’s government work report.

Despite challenges such as COVID-19 and the delayed planting of winter wheat in a few areas, Tang Renjian, minister of agriculture and rural affairs, is confident that China can ensure a bumper harvest of summer grain thanks to policy and technical support, and improving grain crop conditions.

Argentina exchange warns third straight La Nina could hit 2022/23 crops

Argentina’s farmers could be hit by a third straight La Nina weather phenomenon, the Rosario grains exchange said, which would mark a potential blow for the grains producing nation’s upcoming 2022/23 season.

The climate pattern, which has already disrupted two consecutive seasons, generally brings lower rainfall in key farming regions, which can hurt production in the world’s top exporter of processed soy and No. 2 exporter of corn.

“There is a reasonable chance that the force of La Nina will continue into the southern hemisphere’s winter,” the report released late on Thursday said, adding it had been 20 years since the last time Argentina faced three straight La Ninas.

“From that moment on, there is a very even probability (40-50%) of a transition to La Nina, which would be the third consecutive one.”

The weather pattern caused significant soybean and corn losses in the 2020/21 and 2021/22 seasons. It will likely be present during the upcoming winter period and could hit wheat crops, which undergo yield development stages during that period.

Farmers will start planting 2022/23 wheat in late May, after harvesting a record 22.1 million tonnes in the 2021/22 cycle.

“The problem with these scenarios is that month by month a water shortage that becomes structural worsens,” the exchange said. “The deep soil levels are severely dehydrated.”

A drought that affected important farming zones between December-February caused the exchange earlier this year to slash its estimates for 2021/22 soybean and corn production by 5 million tonnes and 8 million tonnes respectively.

China’s Jan-Feb imports of Brazil soybean up on year, U.S. cargoes fall

China’s soybean imports from Brazil in the first two months of 2022 rose significantly from the corresponding period last year, customs data showed on Sunday.

The world’s top buyer of soybeans, China brought in 3.51 million tonnes of the oilseed from Brazil, up 241% from 1.03 million tonnes in the previous year, data from the General Administration of Customs showed.

Rains in Brazil last year delayed the harvest and exports from the South American country, China’s top soybean supplier. (Full Story)

This year, drought slowed the harvest and shipments in Brazil, tightening soybean supplies in China, forcing many crushers to shut operations and pushing meal prices to record highs. (Full Story)

Soybean arrivals were still larger than the previous year, however, the data showed.

China also brought in 10.04 million tonnes of soybean from the United States in the first two months, down 16% from 11.9 million tonnes a year ago, according to customs data.

Early in 2021, it stepped up purchases of U.S. farm goods to fulfil its commitment in the initial trade deal the two countries signed in January 2020.

Crushers did not book large volumes of U.S. soybeans late last year as they waited for cheaper and earlier Brazilian beans.

The drought in South America has pushed up premiums on shipments from the region, however, prompting Chinese buyers to turn to U.S. cargoes.

Argentina hikes export tax on soy meal, oil to 33% to combat inflation

Argentina has raised the export tax rate on soy oil and meal by two percentage points to 33% until the end of the year in a bid to combat domestic inflation, the government said in the official gazette on Saturday.

The South American country is the world’s top exporter of processed soy oil and meal. The government has declared a “war” on inflation, which is running at above 50% annually.

The decree undid a tax reduction announced in late 2020 by the current government of center-left President Alberto Fernandez, and means that processed soy products will be taxed at the same rate as raw soybeans.

India in Talks With Top Wheat Buyer Egypt to Start Shipments

India is in final talks to begin wheat exports to Egypt, the biggest importer, while negotiations are also going on with countries such as China and Turkey, after Russia’s invasion of Ukraine upended global supplies.

The country is in discussions to sell wheat to Bosnia, Sudan, Nigeria and Iran too, the commerce ministry said in a statement at the weekend. India is the world’s second-largest producer, while Bangladesh was the largest buyer of the nation’s wheat in 2020-21, it said.

The government has given assurances to make sufficient railway capacity available to meet any immediate surge in demand for wheat exports, while port authorities have been asked to increase the number of terminals and containers dedicated to wheat, according to the ministry.

• Agricultural and Processed Food Products Export Development Authority, an arm of the commerce ministry, held a meeting of stakeholders last week on how to increase shipments.
• India’s wheat exports climbed more than fourfold to about 6 million tons in the 10 months ended Jan. 31, from 1.38 million tons a year earlier, according to the authority.
• Wheat output will likely rise to a record 111.3 million tons in 2021-22, from 109.6 million tons a year earlier, farm ministry data show.

Canada’s CP Rail shuts down railroad, workers strike

Canadian Pacific Railway (CP) CP.TO halted operations and locked out workers over a labor dispute early on Sunday, with each side blaming the other for a halt that will likely disrupt shipment of key commodities at a time of soaring prices.

“We are very disappointed with this turn of events,” said Teamsters Canada Rail Conference spokesperson Dave Fulton. The union said in a statement that it had begun to strike across the country in the dispute that it says affects 3,000 engineers, conductors and yard workers.

Canada’s second-biggest railroad operator accused the union of misrepresenting the company’s position, saying in a statement that the Teamsters were “well aware of the damage this reckless action will cause to the Canadian supply chain.”

Minister of Labour Seamus O’Regan Jr said CP and Teamsters were still at the table with federal mediators.

“We are monitoring the situation closely and expect the parties to keep working until they reach an agreement,” he said in a tweet just after midnight.

Canada, the largest country by area after Russia, depends heavily on rail to move commodities and manufactured goods to port. CP’s network runs across much of southern Canada and extends as far south as Kansas City in the United States.

The lockout is the latest blow to Canada’s battered supply chain, which last year weathered floods in British Columbia that washed out track and suspended access to Canada’s biggest port. CP has said a stoppage would disrupt the movement of grain, potash and coal.

CP had notified the union on Wednesday that it would lock out employees on Sunday, barring a breakthrough in talks on a deal covering pensions, pay and benefits.

It said the key bargaining issue is the union’s request for higher pension caps. Chief Financial Officer Nadeem Velani told a New York investor conference on Tuesday that the railway was unwilling to accept that demand.

Canada’s Nutrien said this week it may need to reduce potash production at its mines in the province of Saskatchewan if the shutdown lasts longer than a few days.

The country’s last major railway labor disruption was an eight-day Canadian National Railway Co CNR.TO strike in 2019. But in the past 12 years, there have been 12 stoppages due to poor weather, blockades or labor issues, according to the Western Canadian Wheat Growers Association.

CORN/CEPEA: Prices rise by almost 20% at Brazilian ports in March

Corn prices have been rising high at the port of Paranaguá (PR) this month, influenced by higher demand from abroad and corn valuation in the international market, which is being partially passed on to quotations in Brazil. Between Feb. 25 and Mar. 17, the price of the corn sold at the port of Paranaguá rose by a staggering 19.3%.

Higher demand from abroad is linked to the Russia-Ukraine war, since both countries are among the five major corn exporters in the world. Besides, Argentina may reduce the volume exported, aiming to ensure domestic supply.

So far, Brazilian corn exports have been low. In the first eight working days of March, Brazil shipped 2.82 thousand tons of the cereal, which accounts for 1% of the total exported in Mar/21, according to Secex. However, this week, purchasers have been more interested in closing deals at the port of Paranaguá, paying higher prices than that in the interior of the country.

On the average of the current month (until March 17), corn prices in Paranaguá have been 6 Reais/bag higher than the ESALQ/BM&FBovespa Index (Campinas, SP), 5.8 Reais/bag higher than the average in northern PR and 4.7 Reais/bag up from the average in Ponta Grossa. Until February, prices at ports were lower than that in these regions.

However, from Thursday, 17, onwards, some purchasers began to show lower interest in closing deals, claiming to have bought enough corn for the month of March – and some for April too. Thus, between March 10 – 17, prices dropped by a slight 1% in Paranaguá, to BRL 108.39/bag on Thursday, 17.

Brazilian consumers reported difficulties to buy corn, since sellers, aware of higher prices at the ports, raised asking prices. On the average of the regions surveyed by Cepea, the prices paid to corn farmers (over-the-counter market) decreased by a slight 0.2% between March 10 – 17; in the wholesale market (deals between processors), values rose by 1%.

On March 14, the ESALQ/BM&FBovespa Index for corn set a new nominal record in the series of Cepea, closing at BRL 103.90/bag, dropping on the following days. On Thursday, 17, this Index closed at BRL 103.57/bag, 2.1% up from that on March 10.

CROPS – Rains in most regions that produce second crops have heartened farmers. In Rio Grande do Sul, 68% of the summer crop has been harvested, according to data from Emater/RS released on March 17. In Paraná, 75% of the summer crop had been harvested by March 14, according to Seab/Deral. According to Conab, by March 11, 33.7% of the national corn crop had been harvested.

As for the second crop, in Mato Grosso, 98% of crops had been sown by March 14, according to Imea. In Paraná and in Mato Grosso do Sul, 87% and 71.8% of the second crop of corn had been sown, according to Seab/Deral and Famasul. In Brazil, 87.4% of the second crop of corn had been sown by March 12, according to Conab.

SOYBEAN/CEPEA: Price for soybean meal continues to rise in BR; international demand may increase

Prices for soybean meal are still rising in the Brazilian market, boosted by the current firm demand and perspectives for higher demand from abroad too, due to the possible increase in the export tariff on the soybean meal and oil from Argentina, the top world supplier of these products. If that is confirmed, importers may reallocate demand to Brazil. Export deals for these products have already decreased in Argentina.

In the first two months of 2022, Brazil exported 3.073 million tons of soybean meal, a record for the period, according to Secex.

On the average of the regions surveyed by Cepea, the quotations for soybean meal rose by 1.5% between March 10 and 17. Of the 31 regions surveyed by Cepea, in 20 of them the monthly averages have hit nominal records this month (considering until March 17th). In real terms (values deflated by the IGP-DI from Feb/22), prices have been the highest since Feb/21 in Campinas (SP), Mogiana (SP), Dourados (MS), Rio Verde (GO), Triângulo Mineiro (MG), Ponta Grossa (PR), northern and western Paraná.

For soy oil, quotations have been stable this week, due to lower liquidity. In São Paulo city, prices (with 12% ICMS) dropped by 0.2% in the last seven days, to BRL 9,689.74/ton on March 17.

SOYBEAN – High demand for soybean meal and the absence of sellers in the market have limited soybean devaluations this week – quotations have been pressed down by the nearness of the end of the harvesting in the major regions in Brazil and international devaluations. Besides, high freight costs reduced the prices received by farmers in the interior of the country.

On the average of the regions surveyed by Cepea, prices dropped by 1% in the over-the-counter market (paid to farmers) and by 1.1% in the wholesale market (deals between processors). The ESALQ/BM&FBovespa Index Paranaguá decreased by 1.6% between Mar. 10 – 17, to BRL 203.85 (USD 40.46) per 60-kilo bag on Thursday (17). The CEPEA/ESALQ Index Paraná for soybean decreased by 1.4%, to BRL 199.80 (USD 39.66)/60-kilo bag on Mar. 17.

In general, farmers are not selling large batches of soybean. According to Imea, in Mato Grosso, 61.3% of the 2021/22 soybean crop has been traded, against 67% on the average of the last five years. In Paraná, farmers have not been trading soybean either, due to the crop failure in that region.

In Rio Grande do Sul, recent rainfall has favored the crops that were sown last, according to Emater/RS. However, agents consulted by Cepea reported that rains halted the harvesting of the crops sown. In Brazil, 63.1% of soybean crops had been harvested by March 12, according to Conab, up from the 48.6% harvested in the same period last season.

Malaysia’s March 1-20 Palm Oil Exports 744,841 Tons: Amspec

Shipments fall 7.5% m/m from a revised 805,293 tons exported during Feb. 1-20, according to AmSpec Agri on Monday.

Malaysia March 1-20 Palm Oil Exports -8.39% M/m: Intertek

Malaysia’s palm oil exports fell 8.39% m/m during March 1-20, according to Intertek Testing Services.

Malaysia Keeps Crude Palm Oil Export Duty at 8% in April

Gazetted price for crude palm oil at 5925.33 ringgit a ton, which incurs the maximum export tax of 8%, according to a statement from the customs department posted on the Malaysian Palm Oil Board’s website.

• Tax has been kept at 8% since Jan. 2021, following government exemption in July-December 2020
• Export duty structure starts at 3% when FOB prices for CPO are in the 2,250-2,400 ringgit per ton range
• Maximum tax rate is 8% when prices are above 3,450 ringgit per ton

JBS Kicks Off Fertilizer Production at Sao Paulo State Plant

JBS started to produce fertilizer in its unit located in Guaiçara, in the state of Sao Paulo, and foresees a 150,000 tons production per year, according to a statement.

• JBS invested 134m reais in the plant
• Production will use waste generated in the company’s operations as input

Ammonia Prices Climb Amid Supply Concerns

Ammonia prices jumped in Europe and the Middle East amid more European plant closings due to high natural-gas prices and the absence of Russian tons due to sanctions and Black Sea port closures. The price strength carried over into the U.S., where Koch and CF Industries boosted ammonia prices in the Eastern Corn Belt as spring demand picks up. Prices jumped for New Orleans (NOLA) urea as well, and stronger urea prices in the Middle East were seen as the industry awaits a new tender from India and expectations of even steeper prices.

Price increases at NOLA and inland were also reported for urea ammonium nitrate (UAN) and ammonium sulfate, with the latter fueled by a $60 a short ton (st) price hike from AdvanSix. NOLA and inland phosphate and potash prices also ratcheted up to the higher end of the previous week’s ranges.

U.S. Pork Production Falls 2% This Week, Beef Unchanged: USDA

U.S. federally inspected pork production falls to 531m pounds for the week ending March 19 from 540m in the previous week, according to USDA estimates published on the agency’s website.

• Hog slaughter falls 1.6% in the week to 2.435m head
• Beef production unchanged from a week ago at 541m pounds
• For the year, beef production is 0.2% above last year’s level at this time, and pork is 7.2% below