Global Ag News for May 20.22

TODAY

Wheat prices overnight are down 12 1/2 in SRW, down 15 3/4 in HRW, down 13 3/4 in HRS; Corn is down 5; Soybeans up 2 1/2; Soymeal up $0.02; Soyoil up 0.72.

For the week so far wheat prices are up 23 1/2 in SRW, up 11 3/4 in HRW, down 3/4 in HRS; Corn is down 1 1/2; Soybeans up 49; Soymeal up $1.67; Soyoil down 3.59. For the month to date wheat prices are up 132 1/4 in SRW, up 173 3/4 in HRW, up 150 3/4 in HRS; Corn is down 35 1/4; Soybeans down 15 1/4; Soymeal down $6.80; Soyoil down 3.93.

Year-To-Date nearby futures are up 56% in SRW, up 61% in HRW, up 35% in HRS; Corn is up 31%; Soybeans up 28%; Soymeal up 3%; Soyoil up 42%.

Chinese Ag futures (SEP 22) Soybeans up 30 yuan; Soymeal up 26; Soyoil up 28; Palm oil down 22; Corn down 5 — Malaysian palm oil prices overnight were up 31 ringgit (+0.51%) at 6103.

There were changes in registrations (-11 HRW Wheat). Registration total: 1,010 SRW Wheat contracts; 23 Oats; 0 Corn; 0 Soybeans; 98 Soyoil; 6 Soymeal; 139 HRW Wheat.

Preliminary changes in futures Open Interest as of May 19 were: SRW Wheat up 1,950 contracts, HRW Wheat up 267, Corn down 10,447, Soybeans up 6,964, Soymeal up 1,478, Soyoil down 171.

Northern Plains Forecast: Scattered showers Friday. Mostly dry Saturday-Sunday. Scattered showers Monday. Temperatures below to well below normal Friday-Monday. Outlook: Isolated to scattered showers Tuesday-Saturday. Temperatures below normal Tuesday-Wednesday, near to above normal Thursday-Saturday. Central/Southern Plains wheat and livestock highlights… Isolated to scattered showers. Temperatures above normal.

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

Western Midwest Forecast: Isolated to scattered showers through Saturday. Mostly dry Sunday-Monday. Temperatures below normal northwest and above normal southeast Friday, below to well below normal Saturday-Monday.

Eastern Midwest Forecast: Isolated to scattered showers through Sunday. Mostly dry Monday. Temperatures above to well above normal through Saturday, near to below normal Sunday-Monday. Outlook: Isolated to scattered showers Tuesday-Saturday. Temperatures near to below normal Tuesday-Thursday, near to above normal Friday-Saturday.

The player sheet for 5/19 had funds: net sellers of 11,500 contracts of  SRW wheat, unchanged in corn, sellers of 9,000 soybeans, buyers of 7,500 soymeal, and  sellers of 4,000 soyoil.

TENDERS

• CORN SALE: South Korean animal feed maker Nonghyup Feed Inc. (NOFI) has bought an estimated 69,000 tonnes of animal feed corn to be sourced from South America in an international tender which closed on Thursday
• WHEAT SALE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 174,744 tonnes of food-quality wheat from the United States, Canada and Australia in regular tenders that closed on Thursday.
• 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

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. 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
• WHEAT TENDER: A government agency in Pakistan has issued an international tender to purchase and import 500,000 tonnes of wheat
• CORN TENDER: Turkey’s state grain board TMO has 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 has issued an international tender to purchase 50,000 tonnes of milling wheat

Argentine Soybean, Corn Estimates May 19: Exchange

The Buenos Aires Grain Exchange releases weekly report on website.

• 2021-22 Production estimates maintained for both corn and soybean crops
• Soybean harvest advances to 78% complete from 65%

India Cuts Wheat Output Estimate to 106.4M Tons: Farm Ministry

Wheat production in India will likely total 106.41m tons in 2021-22, compared with an earlier estimate of a record 111.3m tons, according to the farm ministry.

• NOTE: The country, the world’s second-biggest wheat grower, produced 109.6m tons, an all-time high, in 2020-21
• Food grain production will likely climb to record 314.5m tons in 2021-22, from 310.74m tons a year earlier, according to third advance estimate by the ministry; that compares with earlier estimate of 316.06m tons
  • Rice output may rise to 129.7m tons from about 124.37m tons y/y
  • Pulses production seen at 27.75m tons, compared with 25.46m tons y/y
  • Corn output may climb to 33.18m tons from 31.65m tons y/y
• Sugar cane harvest will likely be at 430.5m tons, compared with about 405.4m tons y/y
• Cotton production is seen falling to 31.54m bales of 170kg each from 35.25m bales y/y
• Production of oilseeds may rise to 38.5m tons from 35.95m tons y/y
  • Rapeseed output may climb to a record 11.75m tons from 10.21m tons y/y
  • Soybean harvest seen at 13.83m tons compared with 12.61m tons y/y
  • Peanut production seen at 10.09m tons vs 10.24m tons y/y

Kansas Winter-Wheat Yield Seen Sharply Down From 2021: Crop Tour

Winter-wheat yield for top US producer Kansas is estimated at 39.7 bu/acre, down from a year ago as drought hinders plant growth, according to final estimate from Wheat Quality Council crop tour.

• Estimate based on samples taken from 550 fields compares with last year’s tour projection of 58.1 bu/acre; actual 2021 yield was 52 bu/acre, according to USDA
• NOTE: USDA currently projects Kansas winter-wheat yield of 39 bu/acre, and overall national production at the lowest level since 1963
• NOTE: Hard red winter wheat used for bread flour is the most widely grown US variety; harvests start this month in southern states like Texas and kick off in Kansas next month

Planalytics Lowers U.S. Winter Wheat Forecast to 48.70 Bu/Acre

Outlook for this year’s crop yield is down from previous forecast of 48.80 bu/acre, according to data issued by Planalytics on Thursday.

• Yield in key states versus previous Planalytics forecast (in bu/acre):
  • Kansas 38.20 vs 42.80
  • Oklahoma 27.00 vs 29.60
• Winter wheat forecasts updated each fortnight until June 29

Saskatchewan Says Planting Delayed by Large Amount of Rainfall

33% of crops sown as of May 16, down from five-year average of 53%, the province’s agriculture ministry says Thursday in a report.

• Rainfall is improving topsoil moisture and pasture conditions while also delaying seeding
• “Producers are hoping for some warm days to allow field work to advance”

World Grain Reserves Are Lowest Since 2008, Forecaster Warns UN

• ‘This is seismic’: CEO of agriculture firm Gro Intelligence
• High crop prices put millions at risk as grain supplies fall

The world only has 10 weeks worth of wheat consumption in reserve, the lowest since the 2008 financial crisis, according to agriculture analysis firm Gro Intelligence.

That’s more dire than other estimates. While governments peg global wheat inventories at 33% of annual consumption, Gro Intelligence CEO Sara Menker told a United Nations Security Council meeting on food security Thursday that the figure is actually closer to 20%.

Menker, who has long warned about a future food crisis, said urgent action is needed to combat the growing threat of hunger. Soaring crop prices have put millions more at risk, while droughts and soaring fertilizer prices threaten to further reduce grain supplies.

“This isn’t cyclical. This is seismic,” said Menker, a former energy commodities trader who predicted the crisis before the pandemic snarled supply chains. “It’s a once-in-a-generation occurrence that can dramatically reshape the geopolitical era.”

Earlier on Thursday, Gro Intelligence — which uses AI-driven modeling to study crop markets and climate risks — announced the launch of a free online tool aimed at food security across 49 African countries. The database, backed by the Rockefeller Foundation, includes supply-and-demand information for commodities including corn, soybeans and wheat.

“The world right now has nothing,” Menker said in an interview. “It has anecdotes.”

Planalytics Lowers U.S. Winter Wheat Forecast to 48.70 Bu/Acre

Outlook for this year’s crop yield is down from previous forecast of 48.80 bu/acre, according to data issued by Planalytics on Thursday.

• Yield in key states versus previous Planalytics forecast (in bu/acre):
  • Kansas 38.20 vs 42.80
  • Oklahoma 27.00 vs 29.60
• Winter wheat forecasts updated each fortnight until June 29

Indonesia Imposes Domestic Market Obligation for Cooking Oil

Indonesia will reimpose a domestic market obligation policy requiring producers to sell a portion of its cooking oil output to the local market to secure supply and keep prices affordable, the government says.

• Govt to set cooking oil DMO quota at 10 million tons, including as much as 2 million tons in reserves, according to Coordinating Minister for Economic Affairs Airlangga Hartarto at a briefing on Friday
• Govt to also apply price control for cooking oil in the local market
• Trade ministry will issue further policy details, such as breakdown of DMO volumes set for each producer and the distribution method
• Companies violating the policy will be penalized
• Govt expects mills to buy fresh fruit bunches from farmers at reasonable prices
• State-owned company Bulog to maintain bulk cooking oil reserves at 10% of local demand
  • Bulog to distribute simple packaged cooking oil at 14,000 rupiah/liter
• Details on resumption of exports and domestic market obligation will be explained before May 23

Malaysia Keeps Crude Palm Oil Export Tax at 8% in June

Gazetted price for crude palm oil at 6,816.05 ringgit a ton, which incurs the maximum export tax of 8%, according to a statement from the customs department posted on the Malaysian Palm Oil Board’s website.

• NOTE: Tax has been kept at 8% since Jan. 2021, following government exemption in July-December 2020
• NOTE: Export duty structure starts at 3% when FOB prices for CPO are in the 2,250-2,400 ringgit per ton range
• Maximum tax rate is 8% when prices are above 3,450 ringgit per ton

Ukrainian grain exports this month much lower than in May 2021 – ministry

Ukraine has exported 643,000 tonnes of grain since the start of May, considerably less than during the same period of last year when it sold 1.8 million tonnes abroad, the agriculture ministry said on Thursday.

The volume has shrunk because of logistical problems since Russia invaded Ukraine on Feb. 24 and blocked Ukraine’s Black sea ports, the main routes for Ukrainian grain exports.

The ministry said May’s volume included about 617,000 tonnes of corn, 16,000 tonnes of wheat and 8,000 tonnes of barley. It did not say how the grain was delivered.

Senior agriculture officials have said Ukraine exported up to 300,000 tonnes of grain in March and 1.09 million tonnes in April.

Ukrainian traders managed to export up to 6 million tonnes of grain per month before Russia’s invasion.

The ministry data showed that Ukraine has exported 46.51 million tonnes so far in the 2021/22 July-June season, versus 40.85 million a season earlier.

The ministry said 2021/22 export volumes included 18.54 million tonnes of wheat, 21.83 million tonnes of corn and 5.68 million tonnes of barley.

IGC cuts forecast for 2022/23 world corn, wheat crop

The International Grains Council on Thursday cut its 2022/23 forecast for world corn (maize) production to 1.184 billion tonnes from 1.197 billion.

In its monthly update, the inter-governmental body also cut its 2022/23 wheat production forecast to 769 million tonnes from 780 million.

China Boosted Corn Imports From Ukraine in April From Year Ago

China’s corn imports from Ukraine jumped 30% in April from a year earlier to 695,497 tons, according to customs data on Friday.

• Purchases were down by half from March levels
• Imports of US corn climbed 16% y/y in April to 1.50m tons
• NOTE: China’s total corn imports rose 19% y/y in April to 2.21m ton; +8.5% in first four months of the year

China’s April soybean imports from Brazil up from March as delayed cargoes arrive

China’s soybean imports from Brazil in April surged from the previous month, customs data showed on Friday, with the arrival of delayed cargoes.

China, the world’s top importer of soybeans, received 6.3 million tonnes of the oilseed from Brazil in April, up 120% from 2.87 million tonnes in March, according to data from the General Administration of Customs.

The figures were also up from the 5.08 million tonnes China received from its top soybean supplier in the same month last year.

Bad weather delayed Brazil’s soybean harvest and exports, reducing shipments to China earlier in the year.

Soybean arrivals from Brazil began picking up in April and are expected to remain abundant in May as previously booked cargoes clear customs.

China received 1.64 million tonnes of soybeans in April from the United States, its second-largest supplier, down from 3.37 million tonnes in March.

The figures for U.S. supplies were also down from 2.15 million tonnes in the same month a year earlier.

In the first four months of the year, China’s soybean imports from Brazil stood at 12.7 million tonnes, up from 6.42 million tonnes in the same period a year before. Shipments from the United States came in at 15 million tonnes, down from 21.27 million tonnes, according to customs data.

Chinese buyers turned to U.S. soybeans because, with the Brazilian crop diminished, they were cheaper. (Full Story)

Chinese crushers have slowed down soybean purchases for the period until September because of weak crush margins, traders said.

Soybean crush margins in China have plunged since early March and were at minus 282 yuan ($41.97) per tonne on Thursday.

China to Provide More Support to Farmers and SMEs, Li Says

Premier Li Keqiang says farmers will get subsidies and other financial incentives, while also reassuring small- and medium-sized enterprises they’ll get aid from central and local governments: state broadcaster CCTV.

• Govt is working on financing plans, according to report, which doesn’t provide details
• Li stresses importance of stability in food prices and energy resources during visit to Yunnan province
• Li calls for an end to power cuts this year

Brazil Crop Losses From Frost Seen Minimal, Meteorologists Say

Frost was registered in some parts of Brazil’s Parana, Goias, Mato Grosso and Minas Gerais, though events were of low intensity without significant impact to national production of corn, cotton, coffee or sugarcane, according to meteorologists at Rural Clima.

• Frost was not as extensive as in 2021 because prevailing cloudiness minimized heat loss by radiation
• “However, even if there are no widespread frosts, the fact of having several days with periods of low temperatures may lead to reductions in productive potential of corn and cotton,” Rural Clima forecasts
• In key coffee regions of Minas Gerais, the lowest temperatures were recorded in Patrocinio at 3.1 Celsius (about 38 Fahrenheit), and Serra do Salitre at 2.9 Celsius, said Celso Oliveira, meteorologist at Climatempo
  • In Sao Paulo, which is the top sugarcane grower, lowest readings were in Pedregulho at 3.6 Celsius and Franca 3.2 Celsius, Oliveira says in daily coffee bulletin
• “The frost threat for higher elevations of southern Minas Gerais will remain low” for Thursday into Friday, followed by a warming up period in the following days, according to Donald Keeney, meteorologist with Maxar Technologies

EPA Plans Flexibility for Refineries on Old Biofuel Quotas

• White House is reviewing draft plan benefiting small players
• EPA has proposed rejecting biofuel waivers for oil refineries

The Biden administration is advancing a plan to give small oil refineries more flexibility in fulfilling years-old biofuel-blending quotas when the facilities are denied exemptions from the requirements, according to two people familiar with the matter.

The plan, now under White House review, comes as the Environmental Protection Agency prepares to deny scores of refinery waivers from 2019, 2020 and 2021 biofuel-blending quotas. It also follows a decision to revoke 31 previously granted exemptions from 2018 targets. The move could help address concerns there are not sufficient valid biofuel credits, known as RINs, for refineries to satisfy the old quotas, said the people, who asked not to be named before a public announcement.

A draft proposed rule under review at the White House would create an “alternative RIN retirement schedule for small refineries,” according to an online notice.

An EPA spokesman declined to comment on the matter, but Administrator Michael Regan on Wednesday stressed the agency was seeking to provide flexibility for small oil refineries that have historically received waivers from federal mandates to mix renewable fuel into their products.

“When you take a look at the exemptions that were not recently granted, there’s also compliance flexibility built into that,” Regan told a Senate panel Wednesday. “Some decisions have been made in the past so far back that some of that compliance was forgiven.”

And for more recent rejections, compliance plans are phased in, he said. “It wasn’t a blanket denial” and then “you’re on your own.”

The EPA is set to finalize biofuel-blending quotas for 2022 and 2021 — and retroactively revise 2020 requirements — by June 3. Setting those quotas has proved especially fraught this year, as President Joe Biden battles record-high gasoline prices, climbing food costs and inflationary pressured that threaten the US economic recovery.

Egypt Says It Refused Shipment of Undocumented Ukrainian Grain

• Russia allowed Ukrainian cargo to sail, minister says
• Ukraine says Russia is stealing grain and selling it abroad

Egypt refused to allow a shipment of undocumented Ukrainian wheat to land at its ports, the country’s supply minister said in an interview.

Ukrainian harbors are sealed off by Russian forces in a blockade that’s cut off a vital source of grain and vegetable oils, sending global food prices soaring. Ukraine accuses Russia of stealing grain in occupied areas and selling it abroad, and local traders have said Russian troops have confiscated grain, equipment and fertilizers in occupied areas in the southeast of the country.

“There was a Ukrainian wheat ship that Russia had allowed to sail, it is said it was going to the Egyptian ports.” Aly El-Moselhy said on the sidelines of an event in Cairo earlier this week. “The ship did not have shipping documents, nor any request from any government or even the private sector for this cargo. We refused its entry to the Egyptian ports and it moved away.”

Meanwhile, Russia has continued to sell large volumes of wheat to its regular customers in the Middle East and Africa. Its Defence Ministry didn’t immediately respond to a request for comment.

Egypt relies on Russia and Ukraine for 42% of its grain imports. Its wheat bill is set to rise more than half to $4.4 billion this fiscal year that ends in June, as grain prices soared on supply concerns over the war and poor harvests elsewhere. Egypt is in talks with Ukraine about how to receive contracted wheat while export routes are blocked.

Ukrainian Foreign Minister Dmytro Kuleba tweeted that he was “grateful to Egypt for turning away a Russian ship loaded with grain stolen in Ukraine.” Egypt’s foreign ministry said in a statement that Foreign Affairs Minister Sameh Shoukry received a phone call from Kuleba, but the statement didn’t mention the wheat cargo issue.

“In such crises, there are traders who have a wheat shipment, which they move to any port in an attempt to sell it,” said El-Moselhy, who didn’t provide details of the ship. “Egypt did not allow such behavior.”

Argentina could lift corn export cap to 35 mln T -AgMin source

Argentina, the world’s No. 2 corn exporter, could raise its limit for exports of the 2021/22 harvest of the grain to 35 million tonnes, from 30 million tonnes currently, a source at the country’s Ministry of Agriculture told Reuters on Thursday.

The South American country, deep into its corn harvest, limited exports for the current cycle to 25 million tonnes in December from a 41.6 million tonne cap the season before, hoping to counter inflation. It lifted it to the current level earlier in May.

“We are waiting for the late corn to be threshed, which is the one that is sown last, with the expectation that there will be 35 million” tonnes of the grains authorized for export, the source with direct knowledge of the plans said.

Argentina, also the No. 1 exporter of processed soy, and a big global player in wheat and beef, is battling domestic food inflation as global commodities prices have surged due to the war in Ukraine.

The country’s 2021/22 corn harvest, including grains not expected to be commercialized, is estimated at 57 million tonnes, government data show. The harvest is 44% complete. The Buenos Aires grains exchange forecasts corn production for commercial use at 49 million tonnes.

Exporters have made sworn declarations of 2021/22 corn sales for 27 million tonnes so far, Ministry of Agriculture data show.

According to state statistics agency INDEC, last year Argentina exported around 40 million tonnes of corn, of which 1.5 million tonnes went to Vietnam, 1.2 million tonnes to South Korea and 697,000 tonnes to Egypt.

Russian Ports Load Wheat for Iran, Saudi Arabia, North Africa

North African destinations for Russian wheat include Algeria, Egypt, Libya, according to ship line-up reports from Logistic OS for the week to May 18.

• Ports also loaded corn for Turkey, and barley and corn for Libya during same period
• A few months into the war in Ukraine, demand for Russian wheat remains strong, and there’s little sign that exports will fall soon

French Wheat Ratings Plunge With Nation Set for Hottest Ever May

• Share of wheat in good or very good condition declines to 73%

France’s wheat crop is deteriorating as record heat across the European Union’s top grower adds to global grain-supply woes.

The share of the country’s soft-wheat crop rated in good or very good condition fell to 73% as of May 16, putting ratings below this time last year, according to the latest FranceAgriMer data. A dry, hot streak across France is draining soil moisture during a vital period for the crop’s development, with weekend temperatures expected to swelter above 35 degrees Celsius (95 degrees Fahrenheit) in many cities, forecaster Meteo France said in a note.

The summery spell means the nation is likely to record its hottest ever month of May, surpassing 2011, the forecaster said. That threatens to curb wheat yields in the country, adding to weather woes in other producers like the USand Canada at a time when Russia’s invasion of Ukraine is already curbing global grain supplies.

The International Grains Council on Thursday cut its outlook for world wheat production to 769 million tons, a three-year low. Weather-wise, France is Europe’s area of greatest concern for winter-crops like wheat, Kyle Tapley, meteorologist at Maxar, said at the GrainCom conference in Geneva.

US Crops in Drought Area for Week Ending May 17: USDA

The following table shows the percent of U.S. agricultural production within an area that experienced drought for the week ending May 17, according to the USDA’s weekly drought report.

• Corn area experiencing moderate to intense drought remained at 21% in the week
• Soybean drought area held at 12%
• Drought in wheat areas, including durum, spring and winter varieties, all declined

U.S. Grain Movement by Rail Up 8.3% Week Ended May 11

U.S. Barge Shipments of Grain Fell 7% Last Week: USDA

Shipments along the Mississippi, Illinois, Ohio and Arkansas rivers declined in the week ending May 14 from the previous week, according to the USDA’s weekly grain transportation report.

• Barge shipments of corn fell 19% from the previous week
• Soybean shipments up 22% w/w