Global Ag News for Apr 10.23

TOP HEADLINES

Poland to halt Ukraine grain imports temporarily

Imports of Ukrainian grain to Poland will be temporarily halted to mitigate impact on prices, but transit will still be allowed, Polish Agriculture Minister Robert Telus said on Friday.

Telus took office on Thursday after his predecessor resigned amid farmers’ protests over falling prices of produce.

“We agreed to limit and for now halt exports to Poland,” Telus told reporters after meeting his Ukrainian counterpart.

“Transit will be allowed but will be closely monitored in both countries, so that Ukraine grain doesn’t stay in Poland.”

Large quantities of Ukrainian grains, which are cheaper than those produced in the European Union, have ended up staying in Central European states amid logistical bottlenecks, hitting prices and sales for local farmers.

This created a political problem for Poland’s ruling nationalists Law and Justice (PiS) in an election year.

The prime ministers of five states including Poland last month wrote to European Commission President Ursula von der Leyen to demand action on Ukrainian agricultural imports.

FUTURES & WEATHER

Wheat prices overnight are up 5 1/4 in SRW, up 10 in HRW, up 7 1/4 in HRS; Corn is down 1; Soybeans up 1/4; Soymeal down $0.16; Soyoil up 0.08.

Markets finished last week with wheat prices down 12 1/2 in SRW, down 3 3/4 in HRW, down 15 1/2 in HRS; Corn is down 14 3/4; Soybeans down 24 1/4; Soymeal down $1.03; Soyoil down 2.03.

For the month to date wheat prices are down 11 1/2 in SRW, down 3 1/4 in HRW, down 16 1/2 in HRS; Corn is down 18; Soybeans down 12 3/4; Soymeal down $13.20; Soyoil down 0.81.

Year-To-Date nearby futures are down 14.0% in SRW, down 1.6% in HRW, down 6.2% in HRS; Corn is down 5.2%; Soybeans down 1.4%; Soymeal down 5.2%; Soyoil down 14.5%.

Chinese Ag futures (JUL 23) Soybeans up 2 yuan; Soymeal down 8; Soyoil down 86; Palm oil down 76; Corn up 35 — Malaysian palm oil prices overnight were up 54 ringgit (+1.42%) at 3848.

There were changes in registrations (-7 Corn, -22 Soybeans, -18 HRW Wheat). Registration total: 2,537 SRW Wheat contracts; 23 Oats; 22 Corn; 55 Soybeans; 613 Soyoil; 1 Soymeal; 1 HRW Wheat.

Preliminary changes in futures Open Interest as of April 7 were: SRW Wheat unchanged , HRW Wheat up 459, Corn down 418, Soybeans up 41, Soymeal unchanged , Soyoil unchanged.

Northern Plains Forecast: Above-normal temperatures will be melting the snowpack early this week, causing flooding in some areas. The warmth will not last all that long, with a shot of colder air moving through behind a system later this week and weekend. Scattered mixed-precipitation will be moving through during the temperature change. Another warm period is likely to move in by the middle of next week, which will increase the melting of the snowpack again. Though flooding is not favorable, the high amounts of water locked in the snowpack need to be released and worked through the system before fieldwork can start. The sooner the better for on-time planting.

Central/Southern Plains Forecast: A disturbance moving through the region Sunday and Monday is bringing some scattered showers, including across the Texas Panhandle with some very spotty areas of heavier rain. Most of the drought areas will remain dry, but some have gotten needed rains. Additional showers may develop across the area later this week as a system moves through. Again, showers are likely to be spotty, but could be significant in some areas. A stronger burst is possible this weekend, but uncertain. Otherwise, dry conditions remain a concern for winter wheat. The system later this week could bring some strong winds, which would be unfavorable for all locations, and especially those that do get rain, as it would sap that moisture right out.

Midwest Forecast: Most areas were dry with rising temperatures this weekend with only some spotty showers north and west. Snowpack in the north continues to melt off. A system may bring a few waves of showers through the region later this week and weekend, but a stretch of mostly dry weather should allow some planters to roll across the south where soils are not too wet. A burst of cold air will move through behind the system, stalling progress.

Delta Forecast: Another round of heavy rain moved through the region over the weekend. Showers will be unlikely for the front half of the week, but will increase with a system in the Gulf of Mexico for the end of the week and another front moves through over the weekend. Many areas are fairly wet, limiting fieldwork and planting. Precipitation is becoming less frequent, but still steady through the rest of April, which may cause some areas that are too wet, while others will find the proper conditions to get out into the field.

Black Sea Forecast: Periods of showers fell over the weekend and will continue to move through the region for the next week, with mild temperatures. Overall, growing conditions are mostly favorable across the region. Some areas may be too wet and cool to plant corn, however.

Brazil Grains & Oilseeds Forecast: Showers were scattered across the country over the weekend as a system moved through. Showers may continue over central areas early this week, but most will see showers end or become very isolated and light. Another system will move north from Argentina late this week and weekend with another increase in showers. Overall, systems are providing adequate moisture for developing safrinha corn though wet season showers are diminishing. This pattern will need to be maintained for the late-planted crop.

Argentina Grains & Oilseeds Forecast: It was dry over the weekend. A system will move through with scattered showers Tuesday through Thursday, but be more isolated over the main growing region. Soil moisture has improved recently, but crop conditions are still poor due to heat and drought over the summer. Systems are coming at a more frequent pace, which may help to condition soil prior to winter wheat planting by the end of the month.

The player sheet for 4/6 had funds: net sellers of 3,000 contracts of SRW wheat, sellers of 7,500 corn, sellers of 9,000 soybeans, buyers of 2,500 soymeal, and  sellers of 3,000 soyoil.

TENDERS

• WHEAT PURCHASE: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), said on Thursday it bought 600,000 tonnes of Russian wheat in an international tender. The purchase comprised of 300,000 tonnes for shipment between May 10-20 and 300,000 tonnes for shipment between May 21-31, GASC said.
• WHEAT PURCHASE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 78,732 tonnes of food-quality wheat from the United States, Canada and Australia in a regular tender that closed on Thursday.

PENDING TENDERS

• CORN TENDER: Algerian state agency ONAB issued an international tender to purchase up to 70,000 tonnes of animal feed corn to be sourced from Argentina or Brazil.
• RICE TENDER: South Korea’s Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 121,800 tonnes of rice.
• FEED BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase up to 120,000 tonnes of animal feed barley.
• FEED WHEAT, BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said on Wednesday that it will seek 60,000 tonnes of feed wheat and 20,000 tonnes of feed barley to be loaded by July 31 and arrive in Japan by Sept. 28, via a simultaneous buy and sell (SBS) auction that will be held on April 12.

TODAY

US Export Sales of Soybeans, Corn and Wheat by Country

The following shows US export sales of soybeans, corn and wheat by biggest net buyers for week ending March 30, according to data on the USDA’s website.

• China bought 586k tons of the 1.27m tons of corn sold in the week
• China also led in soybean and wheat purchases

US Export Sales of Pork and Beef by Country

The following shows US export sales of pork and beef product by biggest net buyers for week ending March 30, according to data on the USDA’s website.

• China bought 20.2k tons of the 53.9k tons of pork sold in the week
• South Korea led in beef purchases

Brazil Farmers Harvest 80.8% Of Soybean Area Versus 85.5% At This Time Last Year – Safras E Mercado

BRAZIL FARMERS HARVEST 80.8% OF SOYBEAN AREA VERSUS 85.5% AT THIS TIME LAST YEAR – SAFRAS E MERCADO

Brazil 2022/2023 soybean crop view raised to 155.08 mln t – Safras & Mercado

Agribusiness consultancy Safras & Mercado on Thursday raised its estimate for Brazil’s 2022/2023 soybean crop to 155.08 million tonnes from 152.43 million tonnes in a previous forecast.

Safras estimated Brazilian farmers have sold 44.3% of their 2022/2023 soybean crop, or 68.8 million tonnes. This compares with 59.6% of five year average for the same time in the season.

Brazil 2022/23 Soy Sales 44.3% Done as of April 6: Safras

Compares with 56.6% a year earlier, and a five-year average of 59.6%, according to an emailed report from consulting firm Safras & Mercado.

Advanced sales from the 2023/24 crop are equivalent to 4.2% of the estimated output, compared with 9.8% last year and a five-year average of 15.1%

Ukraine’s farms sow 620,500 hectares of spring crops so far -ministry

Ukrainian farms have sown 620,500 hectares of spring grains as of April 7, but rainy weather has delayed field work, agriculture ministry data showed on Friday.

Ukraine expects reduced sowing this year because of Russia’s invasion and occupation of a significant part of the country.

Farmers have sown only about 120,500 hectares over the past seven days, the data showed.

The total sown area as of April 7 included 126,700 hectares of spring wheat, 376,600 hectares of barley, 73,100 hectares of peas, 41,300 hectares of oats and 200 hectares of millet.

Ukraine’s grain sowing area could shrink by 1.4 million hectares to 10.2 million in 2023 while the area sown to oilseeds could rise, the ministry last month said last month.

It said the 2023 grain harvest could drop to 44.3 million tonnes from 53.1 million tonnes while oilseed output could rise to 19.2 million tonnes from 18.2 million.

USDA attaché sees China 2023/24 corn imports at 18 million T

Following are selected highlights from a report issued by the U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) post in Beijing:

“Post forecasts little change in overall feed production in MY2023/24 but corn utilization in feed rations should rise while wheat and rice utilization should decline. Corn planted area is expected to lose ground to soy with government policies and subsidies emphasizing more soy production. Corn imports in MY2023/24 are forecast stable at 18 MMT (million metric tons) while sorghum imports should return to higher levels with greater international supplies. Rice consumption and imports are forecast down as less broken rice is imported and used as a feed alternative.”

CORN/CEPEA: Expectations for high output press down quotations in early April

April began with fading corn prices in most regions surveyed by Cepea – quotations have been dropping since mid-March. Earlier in the year, Brazilian farmers were concerned about the sowing delay, while now, they have been more optimistic about production, majorly because of the favorable weather. Thus, these agents are currently focused on harvesting the summer crop and sowing the second crop.

In the United States and in Argentina, other important countries that produce corn, the scenario is different. While in the US, sowing began in late March – with expectations for a good harvest –, in Argentina, the progress of the harvesting is confirming productivity has decreased.

In Brazil, Conab estimates the 2022/23 harvest at 124.67 million tons, 10% higher than that in 2021/22. In the USA, the USDA estimates the 22/23 crop to total 348.75 million tons, and the 23/24 crop (whose sowing began a few weeks ago) to be even higher. On the other hand, in Argentina, the output is forecast to be 16 million tons lower this season, at 36 million tons, according to the Bolsa de Cereales.

Thus, with the expectations for a higher output in Brazil, purchasers continue away from the market, waiting for values to drop. Also, these agents are aware that many farmers do not have room in their warehouses. At ports, although sellers are willing to lower asking prices, liquidity is fading. Purchase intentions are for exports only from August onwards.

PRICES – With the recent drops, the current average prices are already lower than that from March in many Brazilian regions. Between March 30 and April 5, on the average of the regions surveyed by Cepea, quotations decreased 0.8% in the over-the-counter market (paid to farmers) and 1.9% in the wholesale market (deals between processors).

In Campinas (SP), the ESALQ/BM&FBovespa Index dropped 2.4% in seven days, closing at BRL 80.89 (USD 16.00) per 60-kg bag on Wednesday (5), the lowest level since July 25th, 2022, when the Index averaged BRL 80.2 per bag.

CROPS – The harvesting of the summer crop and sowing of the second crop have been favored by the firm weather. According to data from Conab, by April 1st, 47.6% of the summer crop had been harvested and 96.3% of the second crop had been sown.

SOYBEAN/CEPEA: Higher demand raises soybean prices in BR

Soybean prices have increased in Brazil this week, boosted by higher demand, international valuations of the product and the low productivity of soybean crops in Argentina. However, price rises were constrained by the current high availability in the domestic market and the dollar depreciation against the Real.

Considering the demand from abroad, according to Secex, in March, Brazil exported 13.27 million tons of soybean, more than two-fold the volume shipped in February and 8.8% more than that exported in March/22. This is also the highest volume shipped since May/21 and a record for the month.

This week, shipments have been limited by the lack of room at ports, which resulted in higher liquidity for delivery from May onwards.

In the national spot market, although prices increased in the last days, they are still lower than the export parity calculated by Cepea for the coming months. Between March 30 and April 5, the ESALQ/BM&FBovespa Paranaguá (PR) and the CEPEA/ESALQ Paraná Indexes rose 1% and 0.7%, respectively, to BRL 154.65 (USD 30.60) per 60-kg bag and BRL 148.40 (USD 29.36)/bag on Wednesday, 5.

On the average of the regions surveyed by Cepea, soybean prices rose 0.3% in the over-the-counter market (paid to farmers) and 1.1% in the wholesale market (deals between processors). The US dollar dropped 0.9% in the last seven days, to BRL 5.054 on Wednesday.

However, the US dollar depreciation favored the American soybean, which became more attractive to importers. Besides, forecasts for storms and high moisture are concerning farmers in the US, which are preparing for sowing.

CROPS – In Brazil, productivity is high in most regions. According to Conab, by April 1st, 74.5% of the 151.41 million tons forecast for the 2022/23 season had been harvested, less than the 81.2% harvested in the same period last year.

Malaysia March Palm Oil Stockpiles Decline to 1.67m Tons: MPOB

Malaysia’s palm oil stockpiles declined to 1.67m tons in March from 2.12m tons in February, according to Malaysian Palm Oil Board.

• Production climbed to 1.29m tons in March from 1.25m in February
• Exports rose to 1.49m tons in March from revised 1.13m in February

Russia’s Wheat-Export Tax to Rise to 5,339 Rubles/Ton: Interfax

Russia’s wheat-export duty will increase next week to 5,339 rubles ($65.42) a ton from 5,179 rubles this week, Interfax reported, citing the agriculture ministry.

• NOTE: Russia started calculating the export tax in rubles in July; previously, it was calculated in dollars, and the amount was markedly higher

Russia Targets to Harvest 120M Tons of Grains in 2023: IFX

Russia plans to harvest 120 million tons of grains in 2023, Interfax says, citing Agriculture Ministry declaration draft.

Ministry’s December forecast was 125-127 million tons of harvest, Interfax says

Russia warns West: we may work around the Black Sea grain deal

• Russia to West: remove obstacles to agricultural exports
• Lavrov: West should take UN proposals seriously
• Lavrov: Ukraine may have to use land/rivers for exports
• Lavrov: Russia may work around Black Sea grain deal

Russia warned the West on Friday that unless obstacles to its exports of grain and fertilisers were removed, then Ukraine would have to export grain over land and Moscow would work outside the UN-brokered landmark grain export deal.

The Black Sea grain deal is an attempt by the United Nations to ease a food crisis that predated the Russian invasion of Ukraine, but was made worse by the most deadly war in Europe since World War Two.

The deal, first signed by Russia, Ukraine, Turkey and the UN in July last year and twice extended, allows for the export of food and fertiliser, including ammonia from Ukraine’s Black Sea ports of Odesa, Chornomorsk, Yuzhny/Pivdennyi.

While the West has not placed sanctions on Russia’s food and fertiliser exports, Moscow says they are compromised by obstacles – such as insurance and payment hindrances – that it says must be removed.

Russian Foreign Minister Sergei Lavrov said that if the West did not want to be honest about what UN Secretary-General António Guterres had sought to do with the deal, then Ukraine would have to use land and river routes to export.

If the West continued to refuse to remove the obstacles to Russian exports, Moscow would work around the grain deal, Lavrov said beside his Turkish counterpart at a news conference in Ankara.

“If they do not have the desire to honestly approach what Mr. Guterres proposed and so persistently promoted, well, let them continue to ship the relevant products from Ukraine by land, by rail and by rivers,” Lavrov said.

“And we will work, if necessary, outside the framework of this initiative. We have the opportunity to do this with Turkey, with Qatar – the presidents discussed relevant plans,” Lavrov said.

Russia and Ukraine are two of the most important producers of agricultural commodities in the world, and major players in the wheat, barley, maize, rapeseed, rapeseed oil, sunflower seed and sunflower oil markets. Russia is also dominant on the fertiliser market.

Russia’s agriculture ministry on Friday set its grain harvest plan for 2023 at 120 million tonnes, Interfax reported citing a draft declaration.

Since its signing, the 120-day grain deal has been extended twice, once in November and a second time in March, though Russia said the March extension was only for 60 days.

Russia has repeatedly said that any further extension of the grain deal will require a host of its demands to be fulfilled by the West including the reconnection of Russian Agricultural Bank (Rosselkhozbank) to the SWIFT payment system.

Other demands include a resumption in supplies of agricultural machinery and parts, a lifting on restrictions on insurance and reinsurance, access to ports, the resumption of the Togliatti-Odesa ammonia pipeline and the unblocking of assets and accounts of Russian companies involved in food and fertiliser exports.

FAO Boosts 2023-24 Global Wheat Production Estimate to 786m Tons

World wheat production is expected to total 786 million tons in 2023-24, compared with March estimate of 784 million tons, the United Nations’ Food and Agriculture Organization says in Friday report.

• Global wheat output seen 1.3% below the 2022 level and second-largest on record
• FAO cites near-record sown areas expected in Asia, moderate increase in EU production
• Expects Russia’s production to be constrained by a drop in winter-wheat plantings, while dry conditions are impacting North Africa and southern Europe

India to Get Below-Average Monsoon This Year in Risk to Economy

• Lack of rain could reduce crop yields and drive up food prices
• Skymet says the weaker monsoon is linked to shift to El Nino

India will likely see below-normal monsoon rain this year, according to a private forecaster, a prospect that could hurt its vast agriculture sector and stoke inflation in Asia’s third-biggest economy.

The coming season may bring only 94% of the rain India usually gets from June to September, Skymet Weather Services Pvt said Monday. A lack of rain spells disaster for the farming-dependent economy as it might cut yields of summer-sown crops like rice and sugar cane, driving up food prices.

India — still reeling from the after-effects of last year’s tormenting heat waves that slashed its wheat output and forced it to ban some exports — can ill afford another disruption to its agricultural supplies. Unseasonable rains have already damaged the wheat crop this year. Food inflation remains elevated, straining the government’s finances and putting meals out of reach for many.

“If the next crop too suffers due to lack of rains, the economic distress will increase,” said Lakhwinder Singh, professor of Economics at Punjabi University Patiala. “The hit to food grain production will lead to higher prices. And if India imports to meet domestic shortfall, the international rates too will rise.”

Adequate and timely monsoon showers are vital for India’s farm sector, the main source of livelihood for some 60% of its population and which accounts for about 18% of the economy. The India Meteorological Department, the nation’s official forecaster, is likely to provide its monsoon prediction later this month.

Skymet said the weaker monsoon is linked to a shift to El Nino. The event, triggered by warm water in the equatorial Pacific, can affect weather patterns worldwide. In India, it’s linked to drier conditions and reduced rainfall.

“Typically, below-normal rains are seen leading to lower agricultural output, higher food inflation and weaker rural demand,” said Sonal Varma, an economist with Nomura Holdings Inc. “But we will need to see the spatial and temporal distribution of rains to gauge the real macro-economic impact.”

“Right now, it is a risk factor we are monitoring, but we are not really changing any of our macro forecasts,” she said.

US Miss. River Grain Shipments Rise, Barge Rates Decline: USDA

Barge shipments down the Mississippi river increased to 715k tons in the week ending April 1 from 651k tons the previous week, according to the USDA’s weekly grain transportation report.

• Barge shipments of corn rose 9% from the previous week
• Soybean shipments up 3% w/w
• St. Louis barge rates were $16.13 per short ton, a decline of $1.40 from the previous week

US Crops in Drought Area for Week Ending April 4: USDA

The following shows the percent of US agricultural production within an area that experienced drought for the week ending April 4, according to the USDA’s weekly drought report.

• Winter wheat area experiencing moderate to intense drought remained at 48%, compares with 69% at this time last year
• Corn area in drought fell a point to 29%, last year was 31% at this time

China’s Dalian exchange reduces price limits for soymeal, other futures contracts

China’s Dalian Commodity Exchange said on Monday it will lower the trading range for soymeal and soyoil futures contracts from 8% to 6% above or below their opening price and from 11% to 7% for liquefied petroleum gas.

It also reduced the trading ranges on corn starch, palm oil and PVC, citing “risk management measures”.

Interested in more futures markets?  Explore our Market Dashboards here.