HEADLINES TODAY
Wheat prices overnight are down 30 in SRW, down 23 in HRW, down 6 1/2 in HRS; Corn is down 12; Soybeans down 3; Soymeal down $0.08; Soyoil up 0.07.
For the week so far wheat prices are down 48 1/4 in SRW, down 42 1/4 in HRW, down 6 in HRS; Corn is down 17 1/2; Soybeans down 26 3/4; Soymeal down $0.51; Soyoil down 2.07. For the month to date wheat prices are up 74 1/2 in SRW, up 104 1/2 in HRW, up 108 in HRS; Corn is down 53 1/4; Soybeans down 6 3/4; Soymeal down $8.90; Soyoil down 5.19.
Year-To-Date nearby futures are up 45% in SRW, up 51% in HRW, up 30% in HRS; Corn is up 28%; Soybeans up 26%; Soymeal up 3%; Soyoil up 40%.
Chinese Ag futures (SEP 22) Soybeans down 15 yuan; Soymeal down 17; Soyoil down 26; Palm oil down 150; Corn down 11 — Malaysian palm oil prices overnight were up 156 ringgit (+2.44%) at 6539.
There were no changes in registrations. Registration total: 1,010 SRW Wheat contracts; 23 Oats; 0 Corn; 0 Soybeans; 98 Soyoil; 0 Soymeal; 139 HRW Wheat.
Preliminary changes in futures Open Interest as of May 25 were: SRW Wheat up 264 contracts, HRW Wheat up 969, Corn up 1,099, Soybeans up 5,493, Soymeal down 225, Soyoil up 146.
Northern Plains Forecast: Mostly dry Thursday. Isolated to scattered showers Friday-Sunday. Temperatures near to above normal Thursday-Saturday, near to below normal west and above normal east Sunday. Outlook: Isolated to scattered showers Monday-Wednesday. Mostly dry Thursday. Isolated showers Friday. Temperatures near to below normal west and above normal east Monday, near to below normal Tuesday, below normal Wednesday-Friday.
Central/Southern Plains Forecast: Mostly dry Thursday-Friday. Isolated showers north Saturday-Sunday. Temperatures below to well below normal Thursday, near to below normal Friday, near to above normal Saturday-Sunday. Outlook: Isolated showers Monday-Tuesday, mostly north. Scattered showers Wednesday-Friday. Temperatures above normal Monday-Tuesday, near to below normal north and above normal south Wednesday, near to below normal Thursday-Saturday.
Western Midwest Forecast: Scattered showers Thursday. Mostly dry Friday. Isolated to scattered showers north Saturday-Sunday. Temperatures near to below normal through Friday, near to above normal Saturday, above normal Sunday.
Eastern Midwest Forecast: Scattered showers through Friday. Mostly dry Saturday-Sunday. Temperatures near to above normal Thursday, near to below normal Friday, near to above normal Saturday-Sunday. Outlook: Isolated to scattered showers Monday-Friday. Temperatures above normal Monday-Wednesday, near to below normal northwest and above normal southeast Thursday-Friday.
The player sheet for 5/25 had funds: net sellers of 4,500 contracts of SRW wheat, sellers of 3,500 corn, sellers of 7,000 soybeans, sellers of 2,500 soymeal, and sellers of 4,500 soyoil.
TENDERS
- BARLEY PURCHASE: Jordan’s state grains buyer purchased about 60,000 tonnes of animal feed barley to be sourced from optional origins in a tender
- WHEAT OFFERS IN TENDER: The lowest price offered in a tender being held by Pakistan to purchase 500,000 tonnes of wheat was believed to be $515.49 a tonne, cost and freight (c&f) included, traders said.
PENDING TENDERS
- 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. Offers were to be submitted by May 19.
- CORN TENDER: Turkey’s state grain board TMO issued an international tender to purchase and import a total of 175,000 tonnes of animal feed corn
- WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of milling wheat
Russia Says It’s Opening Sea Corridors From Ukraine Ports (1)
Russia’s Defense Ministry said it’s opening sea corridors for international shipping from seven Ukrainian ports, after growing international criticism of an unfolding global food crisis triggered by a Russian blockade.
Humanitarian maritime corridors from ports on the Black Sea and Azov Sea, including Odesa, will operate from 8 a.m. to 7 p.m. daily, Russian Defense Ministry official Mikhail Mizintsev said Wednesday, according to an emailed statement.
The head of the United Nations World Food Program, David Beasley, said earlier this week that Russia’s blockade of Ukrainian ports, which have obstructed shipments of grain out of the country, is a “declaration of war” on global food security. He said 49 million people in 43 countries were “knocking on famine’s door.”
The world was already facing a global food crisis before the Ukraine war, but the invasion of a nation sometimes referred to as the “breadbasket of Europe” has compounded it and now threatens to trigger mass migration, the UN official said at the World Economic Forum in Davos.
Brazil Farmers to Reap Big Profits Despite Cost Surge: Rabobank
Profits from soybean sales in the 2022-23 season are seen above five-year average as high prices in Brazil offset skyrocketing fertilizer prices, Rabobank analysts in Sao Paulo say in an interview.
- Margin seen around 56% over operational costs, the third largest ever reported, says Rabobank’s farm inputs analyst Bruno Fonseca
- That’s above 46% in five-year average, but below the 64% reported in the previous season
- Soy farmers’ expenses with fertilizers seen rising 86% y/y
- Prices for growers in Sorriso, Mato Grosso state, rose 20% in the first quarter from a year ago, reaching 170 reais per 60-kg bag
- Farmers would only report a negative margin if soy prices decline to 75 reais a bag, which is an “extreme scenario”
- Good margins should encourage farmers to increase planted area to 42m ha from 40.5m ha past season, says Marcela Marini, Rabobank’s grain analyst
- Area increase still relies on fertilizer supplies, which will be determined by imports flow in the coming months
India Wheat Output Seen Declining to 99M Tons on Heat, USDA Says
“Terminal heat stress” is reducing its forecast for India’s 2022-23 wheat production to 99m metric tons, down from an initial estimate of 110m, according to a US Department of Agriculture attache report Wednesday.
- Abnormally hot weather beginning in mid-March have yields declining by 10-15%, especially for late-planted wheat
- The shrinking crop prompted India to ban some wheat exports, exacerbating a global food crisis in the wake of Russia’s invasion of Ukraine that stalled shipments in the Black Sea
- NOTE: India’s farm ministry last week estimated wheat output at 106.41m tons
Brazil’s corn exports to China requires GMO deal-producers association
Brazilian corn exports to China require an agreement about genetic modified grains before effectively beginning, local corn growers association Abramilho said on Wednesday as most Brazil’s corn production is transgenic.
Abramilho’s comments come in the wake of China’s customs authority announcing an agreement with Brazilian authorities regarding a protocol to allow imports of Brazilian corn. (Full Story)
The Chinese are keen to sign a “biotechnology equivalence” agreement for transgenic corn to allow trade with Brazil, according to Glauber Silveira, Abramilho’s executive director.
This is key as China is rumored to have already made advance purchases of the Brazilian corn for shipment in September, he said.
Brazil plants larges swathes of land with GM soybeans and corn.
Genetically modified corn has accounted for about 90% of the total corn area in Brazil since the 2015/2016 season, according to academic research.
Brazil is poised to harvest a record corn crop in 2021/2022, meaning the country has a surplus to export around 30 million tonnes in the current cycle to destinations including China, Abramilho said.
Beijing and Brasilia signed a protocol of phytosanitary requirements for exporting corn from Brazil to China in 2014 but little trade has happened due to complex inspection requirements.
The revised agreement, concluded during high-level talks on Monday, is expected to be signed in coming weeks, opening the way to more substantial trade.
“Now the second step is the approval of biotechnologies, which needs to be more agile,” Silveira said. China already imports GMO soy from Brazil and has approved transgenic technologies from other origins.
Even so, a biotechnology equivalence agreement related to corn is required, he said.
Anec, a Brazilian association that represents cereal exporters, anticipated it would take about three months for Brazil’s government to revise phytosanitary requirements for exporting corn to China so that shipments could begin.
Indonesia’s Palm Oil Exports Still Not Fully Back, Mistry Says
Indonesia’s palm oil exports are still not fully operational despite the lifting of a ban, according to veteran analyst Dorab Mistry, adding that storage tanks in the top grower is close to overflowing.
Stockpiles are estimated to have surpassed a record 7 million tons, Mistry, director at Godrej International Ltd., said in an emailed note. Indonesia liftedthe ban on exports on May 23 after three weeks and reimposed a policy that requires producers to sell some output domestically to keep prices affordable.
Palm oil futures for August delivery climbed 2.4% to close at 6,539 ringgit ($1,487), after falling as much as 1.5% earlier. Soybean oil futures in Chicago turned positive after declining 0.8%.
“Indonesia is heading to a calamitous situation as the palm exports are still not fully operational,” Mistry said.
“If unrestricted exports do not start before the end of May, we foresee a situation where all storage tanks will be full and the industry will grind to a halt,” he added. “The loser in all this will be the poor Indonesian farmer.”
More details:
- Even if exports start immediately, it is already inevitable that some farmers will not be able to harvest fruit early June and will be forced to watch it rot on the trees.
- The problem of the export curbs is exacerbated by the fact the Indonesia’s production is entering a boom cycle following an extended period of near-perfect rainfall.
- Mistry on May 11 forecast palm oil futures would sink to 5,000 ringgit a ton by June, and further to 4,000 ringgit by September, when Indonesia relaxes its export ban and the war in Ukraine is resolved.
Fertilizer Demand, Prices Slip as US Farmers Focus on Planting
US urea, phosphate and potash prices continue to face downward pressure due to the delayed arrival of typical spring weather, which finally enabled heavy planting. The season’s late start may shorten the application window for ammonia. North American potash inventory reached a six-year high.
Fertilizer Prices in End-of-Season Decline
Most North American fertilizer prices, while still historically strong, were in an end-of-season taper in early-week trading. This included most major nitrogen and phosphate products, though potash was stable, and the New Orleans phosphate market was quiet. Tampa ammonia is under pressure from lower international prices. Brazil is also still seeing a downward trend for major fertilizer products.
Retreating Brazilian Demand Dents Prices
Brazilian fertilizer prices appear to be falling ahead of Friday’s final price assessments as sufficient near-term supply allows buyers to be more deliberate in purchasing decisions. Low-end offers for nitrogen of $680 a metric ton were down $10 at midweek and could end the week even lower due to waning demand. Potash port prices similarly tracked $25 a ton below last week, though long-term supply uncertainties remain. Phosphate looks to have fallen $20 a ton as China, Morocco and Russia compete for Brazilian orders.
Brazil Gets Critical Fertilizer Shipments in Time for Soy Crop
- Top soybean producer imports record amount defying supply chain chaosBrazil is importing record amounts of fertilizer for its massive soybean crop, relieving concerns about supply chain disruptions for products from Russia, its No. 1 supplier.
There was worry that the South American nation wouldn’t be able to get enough fertilizer because of sanctions against Russia for the war in Ukraine, as well as shipping chaos that’s unfolded in the region. Brazil is the world’s biggest shipper of several crops including soybeans, and a shortfall of fertilizers could result in smaller harvests. That would drive up food prices around the globe, which are already at all-time highs, pushing more people into hunger.
Total Brazilian fertilizer imports from January to April are higher than they were in 2021, when there were record purchases, according to data by both the government and companies that track imports.
“We’ve already received over 70% of all our purchases for the soybean crop, and the rest of the deliveries are scheduled within the normal wait,” said Leandro Bianchini, commercial supervisor for Coacen, the largest agriculture cooperative in Mato Grosso. “On corn we still have lots to buy and a smaller window to operate.”
The stakes are significant. Fertilizer supplies will determine how many hectares of soybeans Brazilian farmers will seed, according to Marcela Marini, a senior analyst at Rabobank in Sao Paulo. If fertilizer shipments continue to flow in June and July, months when imports peak, producers may increase plantings by 3.7% to 42 million hectares even amid skyrocketing crop nutrients prices, she said. Margins from soybean sales are seen at 56% over operational costs next season, above the five-year average and the third largest ever reported, according to a Rabobank estimate.
Soybeans are harvested on a farm near Brasilia in March.
Initially, Rabobank estimated that the South American nation would have to deal with a lack of about a third of its potash needs. Now, in the worst case scenario, Rabobank sees a shortage of as much as 20%, said Rabobank’s farm inputs analyst Bruno Fonseca.
Potash is nearly three times as expensive as last year, according to data by Green Markets, a Bloomberg company. The chemicals are expensive for a host of reasons including runaway pricing for natural gas, the key ingredient for nitrogen fertilizer, sanctions on a major Belarusian potash producer, and Covid-19 restrictions that have disrupted every global supply chain, including chemicals. The invasion of Ukraine by Russia, a huge exporter of every major fertilizer, has sent the market into further chaos.
US Grains Trader Scoular Expands to Vietnam as Food Demand Grows
Scoular is adding Vietnam to its growing list of Asian markets, part of firm’s bet that growing populations in the region will fuel demand for food and livestock feed.
- Imports and distribution are expected to begin by the end of 2022, Scoular Asia President Adrian Gasparian says in Wednesday statement
- Leaders of Omaha, Nebraska-based Scoular are meeting with customers in Vietnam this month to determine the “best combination of assets and investments that will add value to their business”: statement
- The 130-year-old company hired two employees in Vietnam and expects as many as 12 additional ones, including a country manager, within the coming months
- NOTE: Scoular has its regional headquarters and trade office in Singapore, as well as various operations in Indonesia and Myanmar
Poet to Reopen Idled Ethanol Plant, Citing Biden Biofuel Support
Top US ethanol maker is reopening its shuttered plant in Cloverdale, Indiana, citing stronger federal and state support for biofuels.
- Facility will resume operations in 2023, create 50 full-time local jobs, generate demand for 34 million bushels of corn a year from Indiana farmers, Poet says in statement
- Poet says it plans to invest $30 million in new technology to “position the facility for long-term success and increase its annual production rate from 80 million to 95 million gallons of bioethanol”
- NOTE: Plant was idled in 2019, in part because of Trump-era EPA’s “mismanagement” of biofuel policy, Poet says
- Poet praises Biden administration for lifting restrictions on sales of a higher ethanol fuel blend, known as E15; co. also says Indiana’s “strong” backing of E15 was a main driver of decision to reinvest in the state
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