Global Ag News for May 17.22

TODAY

Wheat prices overnight are down 23 1/4 in SRW, down 35 1/4 in HRW, down 24 3/4 in HRS; Corn is down 8; Soybeans down 4 1/2; Soymeal down $0.06; Soyoil down 0.35.

For the week so far wheat prices are up 45 3/4 in SRW, up 34 3/4 in HRW, up 35 1/4 in HRS; Corn is up 20 1/4; Soybeans up 5 1/2; Soymeal up $0.37; Soyoil down 1.15.

For the month to date wheat prices are up 168 1/2 in SRW, up 211 in HRW, up 194 1/4 in HRS; Corn is down 12; Soybeans down 32 3/4; Soymeal down $19.30; Soyoil down 1.54.

Year-To-Date nearby futures are up 59% in SRW, up 64% in HRW, up 39% in HRS; Corn is up 35%; Soybeans up 24%; Soymeal up 0%; Soyoil up 47%.

Chinese Ag futures (SEP 22) Soybeans down 29 yuan; Soymeal up 22; Soyoil down 40; Palm oil down 136; Corn up 16 –Malaysian palm oil prices overnight were down 21 ringgit (-0.33%) at 6348.

There were changes in registrations (-26 SRW Wheat, -2 Oats, 2 Corn, -1 HRW Wheat). Registration total: 1,010 SRW Wheat contracts; 23 Oats; 62 Corn; 0 Soybeans; 98 Soyoil; 30 Soymeal; 150 HRW Wheat.

Preliminary changes in futures Open Interest as of May 16 were: SRW Wheat up 4,548 contracts, HRW Wheat down 151, Corn up 6,678, Soybeans up 3,261, Soymeal down 308, Soyoil down 287.

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

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

Western Midwest Forecast: Isolated to scattered showers Tuesday-Friday. Temperatures near to above normal through Tuesday, above normal Wednesday-Thursday, below normal northwest and above normal southeast Friday.

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

Canadian Prairies Forecast:  Isolated showers through Wednesday. Temperatures near to above normal west and near to below normal east Tuesday, near to below normal Wednesday. Scattered showers Thursday-Friday. Some snow in Manitoba. Temperatures below to well below normal Thursday-Friday. Outlook: Mostly dry Saturday-Sunday. Isolated showers Monday-Wednesday. Temperatures below to well below normal Saturday-Sunday, near to below normal Monday-Wednesday.

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

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

The player sheet for 5/16 had funds: net buyers of 20,500 contracts of  SRW wheat, buyers of 20,000 corn, buyers of 5,500 soybeans, buyers of 3,000 soymeal, and  sellers of 2,000 soyoil.

TENDERS

• WHEAT TENDER: A government agency in Pakistan has issued an international tender to purchase and import 500,000 tonnes of wheat

PENDING TENDERS

• BARLEY TENDER: Jordan’s state grains buyer has issued a new international tender to purchase 120,000 tonnes of animal feed barley
• FEED WHEAT, BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said that it will seek 70,000 tonnes of feed wheat and 40,000 tonnes of feed barley to be loaded by Aug. 31 and arrive in Japan by Oct. 27, via a simultaneous buy and sell (SBS) auction that will be held on May 18.
• CORN TENDER: Taiwan’s MFIG purchasing group has issued an international tender to buy up to 65,000 tonnes of animal feed corn, which can be sourced from the United States, Brazil, Argentina or South Africa
• RICE TENDER: Egypt’s state grains buyer the General Authority for Supply Commodities (GASC) is seeking at least 25,000 tonnes of white rice in a tender-practice on the account of the Holding Company for Food Industries. GASC set the arrival date for July 1-31 and Aug. 1-31. Offers should be submitted on May 19.
• WHEAT TENDER: Bangladesh’s state grains buyer has issued an international tender to purchase 50,000 tonnes of milling wheat

US Inspected 1.037m Tons of Corn for Export, 784k of Soybean

U.S. April NOPA Soybean Crush of 169.8M Bu Falls Below Estimates

Soybean processing rose to 169.8m bu in April from 160.3m in the same period a year earlier, according to National Oilseed Processors Association data released Monday by Thomson Reuters.

• NOTE: Crushing was below average Bloomberg survey estimate of 173.4m bu
• Soybean-oil inventories at the end of April rose to 1.814b lbs vs 1.702b lbs a year ago
  • Inventories came in below the average Bloomberg survey analyst estimate of 1.866b lb

NOPA April soybean crush below expectations at 169.788 mln bushels

The U.S. soybean crush dropped by more than expected in April, while the end-of-month soyoil supply thinned to the lowest in seven months, according to National Oilseed Processors Association (NOPA) data released on Monday.

NOPA members, which account for around 95% of soybeans processed in the United States, crushed 169.788 million bushels of soybeans last month, down 6.6% from the 181.759 million bushels crushed in March but up 5.9% from the April 2021 crush of 160.310 million bushels. It was the second-largest April crush on record for NOPA members, behind only 2020.

The crush had been expected to drop to 172.370 million bushels, according to the average of estimates from 10 analysts. Estimates ranged from 169.448 million to 177.000 million bushels, with a median of 171.825 million bushels.

The processing pace slowed in April despite strong margins and adequate crushing supplies as several plants were idled for seasonal maintenance, analysts said.

Soyoil supplies among NOPA members as of April 30 fell to 1.814 billion lbs, the smallest end-of-month stocks since September. The stocks were down 4.9% from 1.908 billion lbs at the end of March but up 6.6% from the end of April 2021, when NOPA members held stocks totaling 1.702 billion lbs.

Soyoil supplies at the end of April were expected to have tightened to 1.839 billion pounds, according to the average of estimates gathered from seven analysts. Estimates ranged from 1.648 billion to 1.950 billion, with a median of 1.860 billion.

India Eases Some Wheat Export Curbs to Help Meet Commitments

The Indian government has eased some curbs on wheat exports to help traders meet prior commitments, according to a statement from the nation’s trade ministry.

• Wheat consignments that have been handed over to customs for examination, and registered into their systems on or before May 13, would be allowed to be exported
• India has also allowed a wheat consignment headed for Egypt, which was already under loading at the Kandla port

UkrAgroConsult Sees Ukraine Agri Exports at 1.3-1.5m Tons in May

The estimate includes exports by truck and through ports that are still operating, Kyiv-based UkrAgroConsult says in a report.

• Average daily loading of grains so far in May is 410,000 tons
• Transfer of grain wagons to the EU increased 11% in May, average transfer is 23,000 tons a day
• Exports via Belarus to Latvia also under discussion
• NOTE: Ukraine’s grain exports were far below normal levels in April due to the war impacting operations of terminals and ports on the Black Sea; Ukraine can normally ship 5m tons or more of grain monthly via its ports

Morocco to Import up to 4M Tons of Soft Wheat in Next 12 Months

Morocco is looking to Romania, Hungary and Bulgaria for soft wheat, the Agriculture Ministry’s secretary-general, Redouane Arrach, says in a conference organized by the official Le Matin newspaper.

• US wheat too expensive, Arrach says
• Morocco to import 1m-1.5m tons of hard wheat over the coming year
• Canada is in pole position to supply Morocco with hard wheat: Arrach
• Morocco grain import bill may reach $5b after drought, Rachid Benali, the deputy head of the nation’s farmers lobby group, says at the same conference
• Grain imports could rise to 10m tons vs 8.7m tons a year earlier

Egypt plans to expand agricultural land under cultivation to achieve partial food self-sufficiency

The Egyptian government is planning to expand agricultural land under cultivation by half a million feddan in fiscal year (FY) 2022/2023 in a national food security drive aimed at achieving partial self-sufficiency.

A feddan is roughly equal to 0.42 hectares, so the expansion envisaged is of rather more than 200,000 hectares.

The new policy response was designed in reaction to rising wheat prices on international markets, which is expected to lead to a rise in Egypt’s wheat import bill to $4.4bn this year, compared to just $2.7bn last year for the same quantity of wheat.

The government wants to incentivize farmers to increase agricultural land productivity by 15%-20% this year. In the medium term, it plans to raise self-sufficiency from the current 45% to 65% in 2025 in wheat production, from 24% to 32% in corn, production from 30% to 80% in fava beans, and from 57% to 65% in meat.

The state also plans to expand agricultural exports, primarily of fruits and vegetables, from $2.4bn in FY2022/2021 to $3.6bn in FY2022/2023, to raise the share of agriculture in total non-oil exports to 15%.

Ukrainian Agribusiness Astarta Finishes Planting, Shifts Crops

Astarta has completed spring plantings, despite the challenges from Russia’s invasion, it said Monday in a statement.

• The total sown area includes 33k hectares of sugar beet, 38k hectares of corn, 40k hectares of soybeans and 30k hectares of sunflowers
• Company has reduced the corn area versus normal level, in favor of oilseeds, says Vadym Skrypnyk, its director of agricultural production and storage
• The crops have a lower yield per hectare, but can be processed locally

Brazil Still Hunting for Fertilizer, as Feverish Prices Pause

Brazilian fertilizer prices are dipping from record highs as the shock of Russian sanctions wanes and market participants adapt to trade and transport restrictions. Yet the threat of insufficient fertilizer supply this year, particularly given Russia’s historical role as a top supplier, has spurred Brazil’s government to seek tons.

Brazil Soy Farmers Spend More on GM Seeds as Fertilizer Soars

• Top Brazilian seed company sees rising orders for soy seeds
• Farmers want to avoid missteps as costs soar, CEO says

Skyrocketing fertilizer prices may drive soybean farmers in Brazil, the world’s major oilseed supplier, to bet on genetically modified seeds to guarantee good yields.

That’s according to Brazilian soy seed company Boa Safra Sementes SA. Orders of the company’s soybean seeds in the first quarter rose 59% to total 742 million reais ($147 million) from a year ago, Chief Executive Officer Marino Colpo said in a phone interview. Its genetically engineered seeds accounted for 90% of the orders, up from 80.7% a year earlier, he said.

Boa Safra’s increase in orders is due to higher volumes — the company boosted its production capacity by 30% from a year ago — and more expensive seeds, Colpo said.

“Farmers may be thinking: Crop costs are so high that I can’t make a mistake,” he said. “I need a good-quality seed.”

Brazilian farmers are also boosting investments in technology to map their properties to make better decisions based on a precise analysis of the soil, Colpo said, adding that a fertilizer “crisis” is accelerating commitments by farmers to tap technology for their plantings.

WHEAT/CEPEA: Despite possible record output in BR, real price is the highest in RS

Wheat prices are still rising in the Brazilian market and abroad. In Brazil, although estimates point to a record output, Cepea surveys show that the average wheat price this month (until May 13th) is at a record level (in real terms) in Rio Grande do Sul State (RS) – values were deflated by the IGP-DI.

In Paraná (PR), Santa Catarina (SC) and São Paulo (SP), the monthly averages are the highest since 2013, in real terms. It is important to highlight that, in nominal terms, wheat quotations have been the highest in almost all the regions surveyed by Cepea, considering the price series, which began in 2004. Domestic values have been underpinned by the current low stocks in Brazil and lower supply from Argentina.

According to data released this month by Conab, the output in the 2022/23 is estimated at 8.13 million tons, 5.9% higher than that last season. The area allocated to wheat crops in Brazil is forecast at 2.82 million hectares, 3% larger than that in 2021, and productivity, at 2.88 tons/hectare, 2.8% up, in the same comparison.

Conab estimates Brazil to import 6.5 million tons and to export 1 million tons. Domestic consumption is forecast at 12.76 million tons, a slight 0.1% up from that estimated in April and 5% higher than that in 2021. Domestic availability is predicted at 14.96 million tons, 3.4% lower than that last year. Thus, ending stocks, by July/23, would increase to 1.208 million tons.

In Argentina, the Buenos Aires Stock Exchange (Bolsa de Cereales) estimates the wheat output in the 2022/23 crop at 20.5 million tons, 8.5% lower than the previous. The area allocated to wheat crops in the country has shrunk to 6.6 million hectares.

PRICES – In Brazil deals have been constrained by the low volume of wheat from last crop still available in the spot market. As for prices, Cepea surveys show that, between May 6 and 13, the prices paid to wheat farmers rose by 4.21% in Santa Catarina, 3.99% in Rio Grande do Sul and 2.54% in Paraná (PR). In the wholesale market (deals between processors), quotations increased by 5.3% in São Paulo, 4.92% in PR, 4.49% in SC and 4.12% in RS.

In real terms, the monthly averages in São Paulo and in Santa Catarina have been the highest since September 2013, at BRL 1,962.74/ton and at BRL 1,927.37/ton, considering the series of Cepea. In Paraná, the monthly average is the highest since Oct/2013, at BRL 1,960.92/ton. In Rio Grande do Sul, the monthly average is currently at BRL 1,934.52/ton, a record, in real terms, in the series of Cepea.

White House weighs inflation vs. farmers in new biofuel mandates

The White House is expected to announce in coming weeks the amount of biofuels like corn-based ethanol that U.S. refiners must blend into their fuel this year, a decision that will force it to weigh taming consumer inflation against supporting the nation’s farmers.

How the administration balances the competing priorities could play a role in November’s midterm elections, as high consumer prices pose a political threat to President Joe Biden’s Democratic party and Farm Belt voters remain a crucial constituency.

The White House National Economic Council, led by Brian Deese, is pouring over numbers to gauge whether lowering blending mandates for ethanol and renewable diesel will help blunt rising food and fuel prices, according to two sources familiar with the process.

Cutting mandates for ethanol and advanced biofuels like biodiesel could theoretically cut food costs by reducing demand for corn, soy and other staple crops that have become more scarce since Russia’s invasion of Ukraine. Trimming the mandates could also potentially take pressure off pump prices by reducing blending compliance costs for some oil refiners.

But doing so would anger farmers and the biofuels industry that insist the annual blending mandates are critical to supporting their livelihoods.

White House officials are meeting with lobbying groups representing oil and consumer goods giants, including the Food Manufacturing Coalition, American Bakers Association, American Petroleum Institute and Renewable Fuels Association, as they weigh the possible changes.