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Global Ag News for May 30.23

TOP HEADLINES

EU Raises 2023 Soft-Wheat Crop Estimate by 1.3M Tons

This year’s EU soft-wheat harvest is now seen at 131.5m tons, up from an April estimate for 130.2m tons, the European Commission said Friday in a report.

  • That’s up 4.6% y/y and 5.8% above the five-year average
    • Grain production prospects are improving in France and Romania, offsetting the drought in Spain
  • Soft-wheat export forecast kept steady at 32m tons
  • Barley crop estimate trimmed to 52m tons, from 52.2m tons
  • Corn crop estimate cut to 64.1m tons, from 64.4m tons

FUTURES & WEATHER

Wheat prices overnight are down 9 1/2 in SRW, down 16 in HRW, down 9 1/4 in HRS; Corn is unchanged; Soybeans down 11 1/2; Soymeal down $4.00; Soyoil down 0.65.

Markets finished last week with wheat prices up 1/4 in SRW, down 22 1/2 in HRW, down 3/4 in HRS; Corn is up 33; Soybeans down 15 1/2; Soymeal down $14.00; Soyoil down 0.61.

For the month to date wheat prices are down 27 1/4 in SRW, up 27 in HRW, up 5 in HRS; Corn is up 19; Soybeans down 93 1/2; Soymeal down $34.20; Soyoil down 3.50.

Year-To-Date nearby futures are down 23.4% in SRW, down 9.5% in HRW, down 13.8% in HRS; Corn is down 11.0%; Soybeans down 12.7%; Soymeal down 16.8%; Soyoil down 24.5%.

Chinese Ag futures (JUL 23) Soybeans up 64 yuan; Soymeal down 36; Soyoil down 110; Palm oil down 100; Corn down 7 — Malaysian palm oil prices overnight were down 141 ringgit (-3.98%) at 3405.

There were changes in registrations (-11 Corn, -30 Soyoil). Registration total: 2,389 SRW Wheat contracts; 2 Oats; 0 Corn; 0 Soybeans; 1,133 Soyoil; 47 Soymeal; 97 HRW Wheat.

Preliminary changes in futures Open Interest as of May 26 were: SRW Wheat down 306 contracts, HRW Wheat up 1,726, Corn down 1,866, Soybeans up 3,712, Soymeal up 515, Soyoil down 2,214.

Northern Plains: Widespread showers occurred over the weekend and continue throughout this week as well. While there may be some delay to the ongoing planting progress, especially in parts of North Dakota, continued showers should continue to ease remaining dry spots while hitting most areas with good rainfall throughout the week.

Central/Southern Plains: Showers and thunderstorms were numerous over the holiday weekend, especially across the west. That did cause some flooding issues in spots, but continued to ease drought concerns. However, eastern areas continued to be drier and above normal temperatures are a concern for soil moisture going forward. The region will continue to see showers and thunderstorms developing in clusters going into next week, though still focused more on western areas than in the east. If eastern areas continue to miss out, then drought may worsen there.

Midwest: Outside of some spots near the eastern Ohio River, it was dry and warm over the long holiday weekend. Temperatures continue to be above-normal all week long while chances for showers are fairly limited. Showers will be around throughout the week though, and will help to stave off dryness where they hit. Areas that do not could see drought developing or increasing this week. There is some concern over young plants, but drought is not deep or forecast to spread to too many areas just yet.

Delta:  It was dry over the long holiday weekend and soil moisture has been dropping, though is still in good shape across most of the region. Showers will continue to be limited throughout the week and may start to be a concern if the drier pattern continues deeper into June.

Canadian Prairies:  Scattered showers developed over the weekend, but have been very sporadic on where they have been hitting. Coverage of showers will be different each day this week, but will be around the region at least through this weekend if not well into next week as well. Temperatures remain above normal, but not extremely so.

Argentina: Scattered showers moved north out of the country over the weekend, but fell in some important areas last week, favoring wheat establishment. More showers are expected to come in waves Friday into next week, increasing soil moisture in the country’s primary growing areas.

The player sheet for 5/26 had funds: net buyers of 4,500 contracts of SRW wheat, buyers of 8,500 corn, buyers of 5,000 soybeans, buyers of 2,500 soymeal, and  buyers of 2,000 soyoil.

TENDERS

  • WHEAT PURCHASE: The Taiwan Flour Millers’ Association purchased an estimated 56,000 tonnes of milling wheat to be sourced from the United States in a tender on Friday.

PENDING TENDERS

  • RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 43,500 tonnes of rice, European traders. The deadline for submissions of price offers in the tender was April 25.

Earth

TODAY

Turkey Projects 3.8% Increase in Wheat Output in 2023

2023 wheat production is expected to increase by 3.8% to 20.5m tons, Turkish statistics office says in its first crop output estimate of the year.

  • Barley production seen rising 1.2% to 8.6m tons
  • Sugar beet production seen increasing 13.2% to 21.5m tons
  • Soybean output seen decreasing 3.2% to 150K tons
  • Overall crop production seen rising 4.8% to 73.6m tons
  • Overall vegetable production estimated to increase 1.9% to 32.2m tons
  • NOTE: Second statement on estimates to be published on Oct. 27

Ukraine Sows Spring Grains on 5.3M Hectares, Less Than Last Year

Ukraine’s farmers planted almost 5.3m hectares with spring grains by May 26, about 10% lower than the same period of 2022, according to data published on Agriculture Ministry’s website.

  • Total includes:
    • 261,900 hectares of spring wheat, up about 38% from last year
    • 763,300 hectares of spring barley, down by about 18%
  • More than 3.6m hectares of corn, down about 16%
  • Besides farmers planted:
    • more than 4.6m hectares with sunflower, up about 8%
    • more than 1.6m hectares with soybean, up 42%

Ukraine Black Sea Crop Exports Slowest Since Corridor Opened: UN

The daily rate of completed inspections of crop ships is running at 3.2 vessels so far this month, the Office of the UN Coordinator for the Black Sea Grain Initiative said in a statement.

  • That’s down from 4 in April and the lowest since the corridor opened
  • Crop exports so far month stand at 1.07m tons, versus 2.79m tons in April
  • The Joint Coordination Centre “has not reached consensus to register vessels” since April 29 for Pivdennyi port, which accounts for more than a third of the shipment volumes via the corridor
  • Additionally, the number of inspection teams at the JCC dropped to two on May 25-26
  • UN and Turkey “are working closely with the rest of the parties with the aim to resume full operations in accordance with the framework of the initiative and agreed procedures”

SovEcon Raises Ukraine 2023 Wheat Crop Outlook, Lowers Corn

Ukrainian farmers may collect 18.5m tons of wheat this year, up 0.4m tons from a prior estimate, due to strong April rains, research firm SovEcon says in an emailed note.

  • Corn crop estimate cut to 23.1m tons, down 0.3m tons, on smaller plantings
  • Grain exports in the 2023-24 season are expected to shrink y/y because of lower harvests and smaller reserves
    • Wheat seen at 10.5m tons, versus 16m tons
    • Corn seen at 19m tons, versus 28.3m tons

Brazil C-S Winter Corn Harvest 0.8% Done as of May 25: AgRural

Compares with 1.2% last year, according to an emailed report from consulting firm AgRural.

  • AgRural last week raised Brazil’s corn crop estimate to 127.4 metric tons from 125.1m mt in April, citing better outook for the winter crop
  • Estimates to be revised again in 2nd half of June

Brazil 2022/23 Corn Output Est. Raised to 137m Tons: Safras

New estimate released today by Safras & Mercado consulting firm indicated that Brazilian corn production in the 2022/23 harvest should reach a record volume of 136.998m tons, surpassing the 120.230m tons harvested in the previous season.

  • The number is also above the 130.289m tons predicted in the survey carried out in March, Safras said in an emailed statement
  • According to the consulting firm, the increase can be attributed to the expected raise in second corn crop, given the favorable weather conditions for the development of crops, with continued rains and without the occurrence of frosts so far
  • Brazil 2022/23 summer crop in the Center-South was also revised by Safras & Mercado and should reach 24.817m tons, against the 24.057m tons projected in the previous survey
  • The number should exceed the production recorded in 2021/22, of 21.863 million tons
  • Adjustment takes into account the improvement in production figures in states such as Minas Gerais, Parana and Sao Paulo, Safras said
  • Winter crop harvest in 2023 should reach also a record, of 97.833m tons, well ahead of the 92.199m tons indicated in the previous survey and the 84.403m tons of corn harvested last year, according to the statement

AgRural raises estimate for Brazil corn production; harvest underway

Brazil’s total corn production in 2022/23 is expected to hit 127.4 million tonnes, agribusiness consultancy AgRural said on Monday, raising its April estimate of 125.1 million tonnes as growers start to harvest their second crop.

Harvesting of the so-called “safrinha”, which represents 70%-75% of national output in a given year, reached 0.8% in Brazil’s center-south region as of last Thursday, slightly below the 1.2% reported in the same period a year ago, AgRural said.

Work in the field is still concentrated in top grain producing state of Mato Grosso, according to the consultancy, which added it will make a new output forecast in second half of June.

SOYBEAN/CEPEA: Dollar appreciation raises export parity in BR; liquidity increases

Liquidity has resumed increasing in the Brazilian market of soybean, majorly influenced by the dollar appreciation against the Real – by 1.4% in the last seven days, to BRL 5.038 on Thursday, 25 –, leading importers to Brazil. Sellers were encouraged to trade soybean in the last days too, by higher export premiums.

At the port of Paranaguá (PR), the export premium for soybean, for shipment in June/23, had bids for -50 cents of dollar/bushel and asks for -35 cents of dollar/bushel on Thursday, 25. Last week, bids were around -65 cents of dollar/bushel and asks, -58 cents of dollar/bushel. Soybean prices (FOB) for shipment in June/23 rose 1.3% between May 18 and 25. In Reais – based on the future dollar traded at B3 –, the export parity for soybean for delivery in June/23 is at BRL 143.33/60-kg bag, and for shipment in July/23, at BRL 146.90/bag, at the port of Paranaguá.

In the national spot market, the ESALQ/BM&FBovespa Paranaguá (PR) Index rose 0.5% between May 18-25, to BRL 136.97 (USD 27.19)/bag on Thursday. The CEPEA/ESALQ Index Paraná closed at BRL 129.40 (USD 25.68) per 60-kg bag, 0.4% higher than that on the previous Thursday, 18. On the average of the regions surveyed by Cepea, soybean prices decreased 0.2% in the over-the-counter market (paid to farmers) and 0.3% in the wholesale market (deals between processors).

It is important to highlight that the increases in both the premiums and the domestic prices were constrained by the current high inventories in Brazil, since the harvesting of the 2022/23 crop is ending in Brazil. According to Conab, 98.5% of the national soybean crop had been harvested by May 21st.

CORN/CEPEA: Harvesting begins amid concerns with stocking and fading prices

The harvesting of the second crop of corn has begun in Mato Grosso State, however, difficulties in stocking the cereal – because of the high production of grains this season – and low prices are concerning farmers in that state. Purchasers have been away from the market, expecting steeper price drops.

CROPS – The percentage of crops reaching maturation is rising, and activities are beginning to step up, favored by the current low moisture. However, the end of crops development is only expected to mid-June.

According to Conab, 0.4% of the national crop had been harvested by May 20th. In Mato Grosso, 0.16% of the crop had been harvested by May 19th, 1.18 percentage points behind that in the same period of 2022, due to the sowing delay.

As for the summer crop, activities have ended in São Paulo and Santa Catarina. According to Conab, 77.2% of the national crop had been harvested by May 20th. In southern Brazil, where most summer crops are located, the harvested has advanced this week. In Paraná, according to Seab/Deral, 98% of the state crop had been harvested by May 22nd.

PRICES – The ESALQ/BM&FBovespa Index for corn (Campinas, SP) has been at the lowest nominal levels since August/20. Between May 18-25, the ESALQ/BM&FBovespa Index for corn (Campinas, SP) dropped 2.7%, closing at BRL 55 (USD 10.92) per 60-kg bag on Thursday, 25. On the average of the regions surveyed by Cepea, quotations decreased 1.1% in the over-the-counter market (paid to farmers) and 2.7% in the wholesale market (deals between processors).

WHEAT/CEPEA: Sowing advances in Brazil; devaluations weaken

Brazilian wheat farmers are focused on sowing the new crop – activities are advancing in Brazil, having surpassed 30% of the estimated area. As for demand, mill’s interest in purchases continues low, since the demand for by-products has been weak. Thus, liquidity has been low in the national wheat market, but devaluations have not been as steep as that in mid-May.

According to Conab (Brazil’s National Company for Food Supply), by May 20th, 30.5% of the Brazilian wheat crops had been sown, 3 percentage points ahead of that in the same period last year. Activities have ended in Mato Grosso do Sul, are about to end in Minas Gerais (99.6%), Goiás (99%) and Bahia (95%) and are in progress in São Paulo (75%) and in Paraná (50%).

As for prices, Cepea surveys show that, between May 19-26, the prices paid to wheat farmers dropped 1.86% in Rio Grande do Sul, 0.56% in Paraná and 0.46% in Santa Catarina. In the wholesale market (deals between processors), values decreased 1.43% in RS, 1% in SC, 0.44% in São Paulo and a slight 0.13% in PR. In the same period, the US dollar decreased 0.2%, closing at BRL 4.99 on Friday, 26.

Based on data from Conab (Brazil’s National Company for Food Supply), between May 15-19, the import parity price for the wheat from Argentina delivered to Paraná State was at USD 347.24/ton. Considering the average of the US dollar in that period, at BRL 4.9443, the wheat imported was sold at BRL 1,716.85/ton, while for the Brazilian wheat traded in Paraná, the average was lower, at BRL 1,433.93/ton, according to data from Cepea. In Rio Grande do Sul, the price of the product from Argentina closed at USD 325.65/ton, which accounts for BRL 1,610.11/ton – against BRL 1,301.50/ton on the average of the State calculated by Cepea.

Argentina hikes domestic ethanol prices for gasoline mix

Argentina’s government on Monday increased domestic prices of both sugarcane and corn-based ethanol for blending with gasoline, according to the country’s official gazette.

The Ministry of Economy’s energy secretariat set the price of bioethanol at 155.168 Argentine pesos ($0.66) per liter, up from 148.479 pesos previously, the government said.

Amid high domestic inflation exceeding 100% at an annual rate, biofuel prices are periodically updated to remain competitive in Argentina.

The new prices are effective immediately, said the government, “until new prices replace them.”

The payment term for bioethanol must not exceed 30 calendar days from the date of the corresponding invoice, it added.

 Heavy rain floods China’s top wheat province ahead of harvest

Heavy rain has flooded wheat fields in China’s central Henan province, just days ahead of the harvest, pushing up prices and raising concerns about the quality of this year’s crop in the world’s top consumer of the grain.

The rain, which started in the middle of last week in the southern half of Henan, is causing some of the wheat to sprout or become affected by blight, according to videos posted on social media and a local grain dealer.

“Wheat is still unharvested and already sprouting,” the dealer surnamed Li told Reuters on Monday.

China is expected to harvest a bumper crop this year, with officials estimating a crop at least as large as last year’s.

The good outlook and a surge in imports in recent months has pressured prices in recent weeks to a one-year low, attracting demand from animal feed makers who are swapping corn for cheaper wheat.

However videos shared on China’s Douyin platform showed water lying in fields around the city of Zhumadian, and blackened kernels of wheat, a sign of blight.

Wheat infected by Fusarium head blight cannot be fed to animals as it raises the risk of toxins, said Jan Cortenbach, technical manager at Wellhope Foods.

The rain is supporting prices to some extent, said Rosa Wang, an analyst at Shanghai-based JC Intelligence, though the full impact will not be clear until the rain ends.

The wheat price in Henan’s capital Zhengzhou rose 2% last week to 2,740 yuan ($396.41) per tonne on Friday. JCI-WHT-ZHZH

More rain is forecast for this weekend in western Henan, according to China’s Meteorological Administration.

The Henan government has promised to help speed up the wheat harvest by facilitating transport of harvesters and drying equipment to farms, provincial newspaper the Henan Daily reported on Monday.

China’s sow herd down 0.5% from previous month, up 2.6% y/y

China had 42.8 million sows at the end of April, down 0.5% from a month earlier but up 2.6% from a year earlier, data released on Monday by China’s Ministry of Agriculture showed.

India monsoon advances after stalling for 11 days

India’s monsoon rains advanced into some more parts of southwest Bay of Bengal after stalling for the past 11 days at a far-flung island, weather department said on Tuesday.

The monsoon, the lifeblood of the country’s $3 trillion economy, delivers nearly 70% of the rain that India needs to water farms and recharge reservoirs and aquifers.

Nearly half of India’s farmland, without any irrigation cover, depends on the annual June-September rains to grow a number of crops.

Monsoon rains arrived over the remote Andaman and Nicobar Islands on May 19, but then didn’t make any progress until May 30, the India Meteorological Department (IMD) said.

Monsoon advanced into some parts of southwest Bay of Bengal on Tuesday and conditions are favourable for further advance into more parts of the region during the next 2-3 days, the IMD said.

Rains usually lash mainland Kerala around June 1 and cover the whole country by mid-July. Timely rains trigger planting of crops such as rice, soybeans and cotton.

This year, the onset of the monsoon over Kerala is likely to be slightly delayed. The onset of monsoon rains over the southern Indian state is likely to be on June 4, with a model error of plus/minus 4 days.

US Beef Production Falls 2.6% This Week, Pork Down: USDA

US federally inspected beef production falls to 510m pounds for the week ending May 27 from 523m in the previous week, according to USDA estimates published on the agency’s website.

  • Cattle slaughter down 2.6% from a week ago to 625m head
  • Pork production down 1.4% from a week ago, hog slaughter falls 1.1%
  • For the year, beef production is 4.6% below last year’s level at this time, and pork is 0.7% above

Bunge Launches Fintech With $500 Million to Fund Brazil Farmers

Crop trader Bunge Ltd. launched Fincrop, a Brazilian fintech with $500 million available to lend to Brazilian farmers, the company said Monday in an emailed statement.

  • Fincrop to use environmental and social criteria on credit-risk assessment
  • Bunge will verify sustainable practices through its farm-monitoring system, including satellite images and real-time information from fields
  • Goal is improving risk-assessment tools for retailers that sell Bunge’s agricultural inputs

Fertilizer Prices Fall as Suppliers Fight for Market Share

Lower commodity prices and competition between suppliers continue to weigh on the Brazil phosphate and potash markets ahead of the next planting season. Though nitrogen demand is forecast to improve in 3Q, prices are expected to keep softening.

Led by Phosphates, Fertilizer Prices Plunge Again in Brazil

Prices in Brazil continued to fall as a bearish market sentiment prevailed. MAP (monoammonium phosphate) prices dropped an average of 7.5% against last week amid rumors that Russian cargoes are being diverted to Brazil, flooding even more Brazilian inventories. With China and US phosphate prices losing traction, still softer prices are expected in Brazil before soybean planting season in September. Potash and urea prices fell to levels unseen since 1Q21. An expected India tender in the coming weeks may give urea some stability, but high inventories could continue to pressure prices in the off season.

 

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