Global Ag News for Jan 10 22

TODAY – EXPORT INSPECTIONS

Wheat prices overnight are down 3 3/4 in SRW, down 5 1/2 in HRW, down 9 1/2 in HRS; Corn is down 1/4; Soybeans down 4; Soymeal down $0.11; Soyoil up 0.30.

Markets finished last week with wheat prices down 3 in SRW, down 22 in HRW, down 54 in HRS; Corn is up 17 1/4; Soybeans up 50 3/4; Soymeal up $1.26; Soyoil up 2.66.

For the month to date wheat prices are down 16 in SRW, down 32 in HRW, down 68 1/4 in HRS; Corn is up 13 1/4; Soybeans up 67; Soymeal up $24.80; Soyoil up 2.55.

Chinese Ag futures (MAY 22) Soybeans down 51 yuan; Soymeal up 13; Soyoil up 22; Palm oil unchanged; Corn up 15 — Malasyian Palm is up 36. Malaysian palm oil prices overnight were up 36 ringgit (+0.72%) at 5029.

There were changes in registrations (-92 Soybeans, ). Registration total: 1,900 SRW Wheat contracts; 25 Oats; 50 Corn; 481 Soybeans; 143 Soyoil; 0 Soymeal; 92 HRW Wheat.

Preliminary changes in futures Open Interest as of January 7 were: SRW Wheat up 966 contracts, HRW Wheat down 5,264, Corn down 95, Soybeans up 14,731, Soymeal up 4,898, Soyoil up 3,864.

Brazil Grains & Oilseeds Forecast: Rio Grande do Sul and Parana Forecast: Isolated showers north through Tuesday. Temperatures near normal through Tuesday. Mato Grosso, MGDS and southern Goias Forecast: Scattered showers through Tuesday. Temperatures near normal through Tuesday.

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

The player sheet for Jan. 7 had funds: net buyers of 5,500 contracts of SRW wheat, buyers of 3,500 corn, buyers of 12,500 soybeans, buyers of 6,500 soymeal, and sellers of 1,500 soyoil.

TENDERS

• CORN SALE: The U.S. Department of Agriculture confirmed private sales of 176,784 tonnes of U.S. corn to Mexico for delivery in the 2021/22 marketing year that began Sept. 1, 2021.
• SOYBEAN SALE: The USDA also confirmed private sales of 120,000 tonnes of U.S. soybeans to unknown destinations for delivery in the 2022/23 marketing year that begins Sept. 1, 2022.
• 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
• WHEAT TENDER: The Korea Feed Association (KFA) has issued an international tender to purchase up to 136,000 tonnes of corn to be sourced from optional origins

PENDING TENDERS

• RICE TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of rice with import using land transport by railway
• WHEAT TENDER: Iraq’s state grains buyer issued a tender to buy a nominal 50,000 tonnes of milling wheat with a limited number of trading companies asked to offer
• RICE TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of rice, traders said. The deadline for submission of price offers is Jan. 16.

Brazil’s 2020/21 Soybean Sales 95% Done as of Jan. 7: Safras

Brazilian producers sold 95% of its 2020/21 soybean crop as of Jan. 7, consulting firm Safras & Mercados said in an emailed report.

• Sales are moving at a slower pace compared with the same period a year ago, when 99.9% of the soybean crop was sold out, and also the 5-year average of 97.8%
• Producers have also sold in advance 36.5% of its upcoming 2021/22 soybean crop, which is currently estimated at 144.7m tonnes, the consulting firm says
  • Sales of the new crop are also behind last year’s level of 57.7% and a 5-year average of 40.2%: Safras

Good Soil Moisture for Some Argentina Crops Amid Drought: Bourse

Late-planted soybeans and corn “still have good moisture profiles, which means that for now we’ve not lost optimism on them,” Rosario Board of Trade analysts say in an emailed report.

• Early-planted beans and corn are suffering from drought as plants approach key development stages, with even more dryness in the days ahead
• NOTE: Weekly weather maps published by Buenos Aires Grain Exchange forecast rain for Argentina’s Pampas growing belt on Jan. 13-19

LATAM CROP WEATHER: Dryness, Heat Increase Argentina Crop Stress

Argentina’s major agriculture areas will face intense and prolonged heat coupled with little or no rain through Jan. 12, fueling concerns over corn and soybean crops, according to a report from Buenos Aires Grain Exchange.

• The whole Pampas growing belt will be completely dry in the period, while temperatures are seen above 100 degrees Fahrenheit (38 Celsius)
• Crop stress currently reaching 40% of the nation’s grain belt will expand to about 75% next week, Commodity Weather Group says in a report
• Rains are expected in seven days from Jan. 13, with highest accumulation in central areas, while extreme heat will persist
• Early-planted soybeans and corn have already been hit by the drought, crimping crop development, says Esteban Copati, chief estimates analyst at the Buenos Aires Grain Exchange
• An area corresponding to 47% of Argentina’s corn field is losing yield every day because of the drought, he says
• Precipitation in the second half of January could rescue soy yields

BRAZIL SOYBEANS & CORN

• Far southern Brazil will also be very hot and dry next week, diminishing the benefit of rains expected for the second half of January, according to Commodity Weather Group
• Parana state may get beneficial rain in the coming days, but showers will continue focusing in northern areas

Soy Output Seen Halved by Drought at Brazil’s Coopavel Group

Members of Coopavel, one of Brazil’s largest oilseeds and grains cooperatives, expect to harvest 50% less soybeans than initially forecast due to the severe drought that hit Parana state in November and December, says Dilvo Grolli, president of the group.

• “We haven’t seen a loss like this in at least 20 years,” Grolli says in telephone interview
• Farmers reporting soy yields between 20 and 30 bags per hectare at start of harvest, vs 65 bags/ha previously expected
• Summer-corn yields are around 85 bags/ha vs 180 bags forecast
• NOTE: A bag weighs 60 kilograms (132 pounds)
• Coopavel’s harvest was about 3% complete through Jan. 6
• In Cascavel municipality, where Coopavel is based, rain totaled only 3mm last month, compared with 135mm a year earlier
• Coopavel expects to receive around 225,000 tons of soybeans from its members this year, down from initial expectation of 450,000 tons
• Last year, Coopavel’s farmers reaped 420,000 tons of soybeans

Rapid soymeal exports continued in Brazil in December; January exports may reach all-time high

Brazil soymeal exports since March 2021 exceeded last year’s record high level at 14.1 million tons amid rising prices in December. Soymeal export prices have increased by near 20% since early December. The high prices boosted December soymeal exports in Brazil to 1.45 million tons, up 19% from a month earlier. The high export figure in December brought total exports since March to a 5-year high, breaking last year’s record. The latest line-up data (released on 07 January) indicates that 1.7 million tons of soymeal are scheduled to deliver in January, well above the 5-year average for the month (0.9 million tons). The strong exports close to the end of the export season are also attributed to relatively sufficient soybean supplies in the country.

SOYBEAN/CEPEA: Harvest starts in MT and PR; unfavorable weather reduces production

Producers in the west of Paraná and north of Mato Grosso have started the 2021/22 soybean harvest. Prevailing unfavorable weather conditions in important producing areas in Brazil, however, have been increasing the perspective of a sharp crop reduction.

While in Northern Brazil there is excessive rainfall, in the South and in part of Mato Grosso do Sul the climate is mostly dry. Therefore, institutions have already been reducing their production forecasts for the current season, and both domestic and international soybean prices are moving up. This week, the CEPEA/ESALQ Index Paraná hit a nominal record of Cepea series, which started in July 1997.

In Paraná, the productivity is low, and part of the first harvested areas has registered a significant reduction. According to data from Seab/Deral released on January 3, losses are estimated at 37% in Paraná, at 13 million tons – in the beginning of the season, the projection was 21 million tons.

Producers in Santa Catarina and Rio Grande do Sul also indicate a smaller production. In SC, the impacts have been more significant; however, in RS, as sowing activities occur later, crops can recover if rains return. Conab says that the sowing reached 98% and 91% in SC and RS, respectively.

TRADES – In this scenario, producers are concerned about accomplishing contracts. It is worth noting that, due to favorable weather conditions at the beginning of 2021/22 sowing activities, many sellers closed contracts due to January. As a result, the demand in this early 2022 is firm, from both the domestic industry and the international market.

Secex indicates that, in December/21, soybean shipments totaled 2.7 million tons, 4.82% up compared to November and significantly higher than the 274 thousand tons registered in December/20.

This scenario, along with increases in tdavehe international market and of dollar quotes, boosted quotes in Brazil. The CEPEA/ESALQ Index Paraná rose by 3.5% from December 30 to January 6, closing at BRL 176.13 (USD 30.98)/bag on January 6 – the nominal record of 178.23 BRL/bag was registered on January 5. The ESALQ/BM&FBovespa Index Paranaguá rose by 4.8%, at BRL 180.62 (USD 31.77)/bag.

On the average of the regions surveyed by Cepea, the prices paid to soybean farmers (over-the-counter market) in Brazil rose by 2.5% from Dec. 30 to Jan. 6; in the wholesale market (deals between processors), values increased by 4.3%. The US dollar rose by 2% in the same period, to BRL 5.686 on Jan. 6

China sells 100% of wheat on offer at Jan. 5 state auction – trade centre

China sold 100% of the wheat put up for auction on Jan. 5, or 506,568 tonnes, said a statement from the National Grain Trade Center on Monday.

The grain, targeted only at millers, came from the 2014 through 2020 crop years and sold at an average price of 2,707 yuan ($424.73) per tonne.

Turkey to Leave Grain Import Tax at Zero Through 2022: USDA FAS

Turkey’s import tariffs on wheat, corn, rye, barley, oats, chickpeas and lentils have been eliminated through the end of 2022, USDA’s Foreign Agricultural Service said in a report, citing a government notice.

• NOTE: The import taxes were originally cut to zero in September
• “The announcement of a dramatic change in agricultural and food tariffs for the entire calendar year is an extremely unusual move, which signals the government’s concern about the inability to control food inflation in the short-to-medium term,” USDA says

Malaysia Dec. Palm Oil Exports to India -10.8% M/m

Malaysia’s palm oil exports to India fell 10.8% to 0.37 million tons in Dec. from a month earlier, the Malaysian Palm Oil Board posted on its website.

• Exports to India -10.8% m/m to 372,453 tons, +23.7% y/y
• Exports to China -27.3% m/m to 147,018 tons, -51.2% y/y
• Exports to EU +6.2% m/m to 165,299 tons, -8.6% y/y

Malaysia Dec. Palm Stockpiles -12.9% M/m to 1.58M Tons: MPOB

Palm oil stockpiles in Malaysia, the world’s second-largest producer, fell 12.9% to 1.58 million tons in December from a month earlier, Malaysian Palm Oil Board says in statement today.

• Palm oil exports -3.5% m/m to 1.41m tons
• Imports +5% m/m to 102,768 tons
• Crude palm oil production -11.3% m/m to 1.45m tons

India’s Winter Crop Area Rises 0.9% to 65.22 Million Hectares

• The area under winter-sown crops, such as wheat, rapeseed and pulses, climbed to 65.22 million hectares (161 million acres) as of Jan. 7, from 64.62 million hectares a year earlier, according to the farm ministry.
• Wheat area fell about 1.7% to about 33.4 million hectares, while land under rice cultivation dropped 12% to 1.64 million hectares from a year earlier, the ministry said in a statement on Friday.

Fertilizer Prices Sag Most Since 2009 in Break for Red-Hot Rally

Soaring fertilizer prices that have helped drive up food inflation finally tumbled this week, but the reprieve may be short-lived.

The Green Markets North American Fertilizer Price Index fell 12% on Friday, the most since 2009. Prices for urea, a type of nitrogen fertilizer, swung wildly. They rose and fell by more than $100 per short ton every day this week as the market tried to assess prospects for spring demand and natural gas came off highs in Europe, said Alexis Maxwell, an analyst at Green Markets.

Fertilizer prices have soared to repeated records over the last few months, spurred by setbacks including an energy crunch in Europe, unexpected plant closures and halted exports from major suppliers. The increase has stoked concerns over prospects for further food inflation at a time when consumers are already paying more for staples like grains and coffee.

This week’s drop isn’t a sign that high fertilizer prices will continue to ease, Maxwell said in an email.