Global Ag News for Jan 24 22

TODAY – EXPORT INSPECTIONS

Wheat prices overnight are up 2 3/4 in SRW, up 5 1/4 in HRW, up 4 in HRS; Corn is down 2 1/2; Soybeans down 6 3/4; Soymeal up $0.01; Soyoil down 0.79.

Markets finished last week with wheat prices up 41 1/4 in SRW, up 53 1/2 in HRW, up 61 3/4 in HRS; Corn is up 17 1/2; Soybeans up 37 3/4; Soymeal down $1.30; Soyoil up 3.75.

For the month to date wheat prices are up 12 in SRW, down 3 in HRW, down 42 in HRS; Corn is up 20 1/2; Soybeans up 68 1/4; Soymeal down $6.30; Soyoil up 5.64.

Chinese Ag futures (MAY 22) Soybeans up 58 yuan ; Soymeal up 6; Soyoil up 86; Palm oil up 132; Corn down 12 — Malasyian Palm is down 63. Malaysian palm oil prices overnight were down 63 ringgit (-1.18%) at 5259.

There were no changes in registrations. Registration total: 1,900 SRW Wheat contracts; 21 Oats; 50 Corn; 316 Soybeans; 143 Soyoil; 0 Soymeal; 92 HRW Wheat.

Preliminary changes in futures Open Interest as of January 21 were: SRW Wheat down 4,164 contracts, HRW Wheat down 2,110, Corn up 14,478, Soybeans up 3,051, Soymeal down 1,177, Soyoil down 537.

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

Argentina Grains & Oilseeds Forecast: Cordoba, Santa Fe, Northern Buenos Aires Forecast: Isolated to scattered showers through Tuesday. Temperatures near normal through Tuesday. La Pampa, Southern Buenos Aires Forecast: Isolated to scattered showers through Tuesday. Temperatures near normal through Tuesday.

The player sheet for Jan. 21 had funds: net sellers of 5,500 contracts of  SRW wheat, buyers of 6,500 corn, sellers of 6,000 soybeans, sellers of 3,500 soymeal, and  buyers of 1,000 soyoil.

TENDERS

• SOYBEAN SALE: U.S. exporters sold 132,000 tonnes of soybeans for delivery to China during the 2021/2022 marketing year, according to the U.S. Department of Agriculture.
• WHEAT SALE: Iran’s Government Trading Corporation (GTC) is believed to have purchased about 195,000 tonnes of milling wheat in a tender that closed on Thursday
• WHEAT SALE: A group of South Korean flour mills bought some 82,000 tonnes of milling wheat expected to be sourced from the United States in a purchase earlier this week
• CORN SALE: U.S. exporters sold 247,800 tonnes of corn for delivery to unknown destinations during the 2021/2022 marketing year
• FEED WHEAT TENDER: An importer group in the Philippines is tendering to purchase around 35,000 tonnes of animal feed wheat

PENDING TENDERS

• RICE TENDER: The lowest price offered in the tender from Bangladesh’s state grains buyer to purchase 50,000 tonnes of rice which closed on Sunday was $421.99 a tonne CIF liner out, officials and traders said. Offers are still being considered and no purchase had yet been made, they said.
• BARLEY TENDER: Jordan’s state grains buyer has issued a new international tender to purchase 120,000 tonnes of animal feed barley
• RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp has issued an international tender to purchase an estimated 46,344 tonnes of rice to be mainly sourced from China with some from Thailand
• SUNFLOWER OIL TENDER: Turkey’s state grain board TMO has issued an international tender to purchase and import about 6,000 tonnes of crude sunflower oil
• WHEAT TENDER: Jordan’s state grain buyer has issued an international tender to buy 120,000 tonnes of milling wheat which can be sourced from optional origins

Parched Argentina Soy Still Struggling, Needs More Rain: Rosario

Rains that fell in recent days on the Pampas crop belt “weren’t significant or widespread,” the Rosario Board of Trade says in a report.

• NOTE: Swaths of Argentina Soy Farms Need More Rain, Exchange Says
• “Soil water reserves haven’t significantly recovered”
• Drought continues in 42% of the key part of the Pampas known as “zona nucleo”
• More rains, and across a wider area, are forecast this month
• Yields will be limited for earlier-planted soy despite the rains, while late-planted beans still have potential to perform decently

Fertilizer Prices Flicker as Risks Rise Around Historic Highs

After startling surges in 2021, prices are wavering across major fertilizers. Survey data suggest buyers expect to pay more in 2022. Yet 2Q, historically the start of a planting-season price uptick, will test whether strong fall use pulled demand forward from spring. Any easing of export limits in multiple regions could loosen supply. Nitrogen demand is typically the least price-sensitive, supporting sales for CF Industries and Yara, while potash producers such as Nutrien and Mosaic face greater risk that farmers might skip a season. A contract between Belarus and China in 1Q should set the direction for potash prices.

Fertilizer-Price Drop May Signal Relief at Last for U.S. Farmers

Wholesale U.S. prices for fertilizer are dropping, and that could signal easing food-cost pressures and relief for farmers getting set for spring planting.

Cornbelt urea prices fell 8.2% Friday to $675 per short ton, the lowest since October, according to Bloomberg’s Green Markets. Prices have fallen each week this month as the market adjusts to recent reports of full warehouses, signaling the anticipated shortage of the crop nutrient this year may not come to pass.

Retail prices are still at stratospheric levels, but that could soon reverse, Green Markets analyst Alexis Maxwell said in an email.

“U.S. retail urea prices are firm as wholesalers have higher-cost inventory in their system,” Maxwell said. “As they replace inventory with lower-cost urea, I expect them to pass on the savings to farmers ahead of spring plantings and in the first quarter.”

Fertilizer prices 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.

Russian Wheat Exports Decline 21% Y/y So Far This Season: Agency

Russian wheat shipments for the 2021-22 season amounted to 23m tons as of Jan. 20, down 21% from a year earlier, the Federal Center of Quality and Safety Assurance for Grain and Grain Products said on its website, citing inspections before exports.

• That means wheat exports totaled about 300k tons in the week to Jan. 20, compared with 1.1m tons in the period to Jan. 13
• Exports of all grains are at 32.1m tons so far this season
  • Barley exports declined 33% y/y
  • Corn exports rose +12%

High Food Prices Dash India’s Hopes to Curb Cooking Oil Imports

• Demand for vegetable oils far exceeds local production
• Consumer food costs in India hit record highs last yearBy Pratik Parija

Indians will probably buy expensive cooking oils from overseas for at least another 15 years, as demand continues to far outpace domestic production.

Consumption is expected to climb in India by as much as 17% over the next four years, according to B.V. Mehta, executive director of the Solvent Extractors’ Association. A rise that steep would further widen the manufacturing gap: India will likely produce about 10 million tons of edible oils in 2021-22, compared with local consumption of as much as 23 million tons.

SOYBEAN/CEPEA: Gap between bidding and asking prices constrains liquidity in BR

Uncertainties about the Brazilian production of soybean, expectations for higher demand and the US dollar depreciation against the Real have widened the gap between bidding and asking prices, constraining liquidity in Brazil. On the one hand, farmers have reported great losses, majorly in the southern region of the country, because of the lack of water during crops development. On the other hand, purchasers and other agents from the soybean market believe production in the remaining Brazilian regions will be high, offsetting most losses in the south.

According to agents, the demand for soybean may be higher this season, in both Brazil and abroad, which is making farmers cautious about selling the remaining of the 2020/21 crop and term contracts for the 2021/22 season. This week, consumers have been cautious too, due to the dollar depreciation and expectations for the new crop.

On the other hand, in Maro Grosso, farmers expect the crops to be harvested to have higher yield than that previously harvested, which presented satisfactory productivity. According to Imea, 4.16% of the crops in MT have been harvested. Activities have been interrupted by both recent rains in the major soybean-producing areas and the delay in the delivery of desiccants.

DOMESTIC PRICES – In the Brazilian spot market, the CEPEA/ESALQ Index Paraná for soybean rose by 0.5% between January 13 and 20, to BRL 176.07 (USD 33.15)/60-kilo bag on Thursday, 20. The ESALQ/BM&FBovespa Index Paranaguá increased by 1.1%, to BRL 179.39 (USD 32.54)/bag on Jan. 20. On the other hand, the export parity in Paranaguá (PR) is at BRL 178/bag for Feb/22, despite the increase in the export premiums.

Among the Brazilian regions, however, prices followed opposite trends. On the average of the regions surveyed by Cepea, prices dropped by 0.4% in the over-the-counter market (paid to farmers) and by 0.5% in the wholesale market (deals between processors). The dollar dropped by 2% in the last seven days, to BRL 5.4110 on Jan. 20, the lowest, in nominal terms, since Nov 11th.

CORN/CEPEA: Prices continue to rise in BR; liquidity is low

Corn prices are still rising in the Brazilian spot market, despite the beginning of the harvesting of the first crop in the southern region of the country – so far, the volume available is still low, since activities have just begun. It is important to consider that the output is expected to be lower, due to bad weather conditions during crops development.

The consecutive valuations have been concerning purchasers, who are having difficulties to replenish inventories. Between January 13 and 20, on the average of the regions surveyed by Cepea, the prices paid to corn farmers (over-the-counter market) rose by 1.6%; in the wholesale market (deals between processors), values increased by 1.9%.

In São Paulo State (SP), despite the higher availability of corn from central-western BR, purchasers are prioritizing the product from SP, which had been stocked since the harvesting of the second crop. However, lower volumes are being traded at higher prices, but for prompt-delivery. In seven days, the ESALQ/BM&FBovespa Index (Campinas, SP) rose by 1.7%, to BRL 98.13/60-kilo bag on Thursday, 20 – this is the 14th consecutive rise for the index, which has returned to the level from August/21.

EXPORTS – At Brazilian ports, despite the typical lower demand for corn in January, some sporadic demand was observed, with higher prices. However, deals were constrained by the wide gap between prices in the interior of the country and at ports.

CROPS – As the harvesting advances in southern Brazil, agents observe a lower productivity, on average – the first crops to be harvested were the most damaged by high temperatures and low rainfall. Thus, supply may change as activities advance.

In Rio Grande do Sul, the dry weather hampered maturation. According to Emater/RS, some farmers opted for not harvesting corn in some regions, due to low quality. Until Jan. 20, 27% of the crops in RS had been harvested.

In Santa Catarina, 4.3% of the state area has been harvested, according to Conab. In Paraná, 1% had been harvested until Jan. 17, according to Seab/Deral.

While the harvesting is in progress, sowing of the second crop has begun. In Paraná, according to Seab/Deral, 2% of the state area have been sown. So far, the output is expected at 15 million tons in an area of 2.56 million hectares.

In central-western BR, with the fast pace of the soybean harvesting, farmers are already sowing the second crop of corn. According to Imea/MT, 1.57% of the area has been sown.

Algeria Targets Wheat Harvest of 2.7M Tons in 2022: Minister

Govt seeks to at least equal May-August 2021 harvest of 2.7m tons this year, allowing it to reduce wheat imports by 26%, Agriculture Minister Mohamed Abdelhafid Henni says on state radio. He also says:

• Decision to increase prices paid to local farmers for wheat to encourage production will cost state 30b dinars
• Algeria’s west currently seeing shortage of rainfall, while situation in east is “satisfactory” and central region “average”

India’s Winter Crop Area Rises 1.1% to 67.93 Million Hectares

India’s area under winter-sown crops, such as wheat, rapeseed and pulses, climbed to 67.93 million hectares (168 million acres) as of Jan. 21, from 67.2 million a year earlier, according to the farm ministry.

Wheat area fell about 1.3% to about 34.08 million hectares, while land under rice cultivation dropped 22% to 2.36 million hectares from a year earlier, the ministry said in a statement on Friday.

Russian Wheat-Export Tax to Fall to $95.80/Ton Next Week

Russia’s wheat export customs duty will fall to $95.80/ton next week, from $97.50, according to the Agriculture Ministry’s website.

• NOTE: The rates are set weekly and take effect three working days after publication
• NOTE: Russia started the floating tax from June 2, with a $28.10/ton levy

U.S. Cattle on Feed Rose to 12.04M Head on Jan. 1

The feedlot herd rose 0.6% from a year ago, according to the USDA’s monthly report. Analysts were expecting a drop of 0.1%

• Placements onto feedlots up 6.5% to 1.963m head
• Cattle marketed from feedlots increased 0.2% to 1.857m head

U.S. Beef Production Up 3.1% This Week, Pork Rises: USDA

U.S. federally inspected pork production rises to 531m pounds for the week ending Jan. 22 from 513m in the previous week, according to USDA estimates published on the agency’s website.

• Cattle slaughter up 2.9% from a week ago to 636m head
• Pork production up 3.5% from a week ago, hog slaughter rises 3.1%
• For the year, beef production is 8.6% below last year’s level at this time, and pork is 15% below