Global Ag News for June 27.23

TOP HEADLINES

EU Sees Russia’s 2023 Wheat Crop Near 87m Tons on Mixed Weather

This year’s Russian wheat harvest may total 86.7m tons, 17% below the prior season, according to a report from the EU’s Monitoring Agricultural Resources unit, which also monitors crops in nearby regions.

• That would be 4% above the five-year average
• Spring rainfall improved soil moisture in most of the winter-wheat belt
• Still, dry and warm weather in the Volga region and Asian areas of Russia have curbed wheat crops there

FUTURES & WEATHER

Wheat prices overnight are down 19 3/4 in SRW, down 17 1/4 in HRW, down 9 1/2 in HRS; Corn is down 14 1/2; Soybeans down 32 1/2; Soymeal down $10.70; Soyoil down 0.55.

For the week so far wheat prices are down 28 in SRW, down 10 3/4 in HRW, down 10 3/4 in HRS; Corn is down 14; Soybeans down 20; Soymeal down $10.20; Soyoil up 0.66.

For the month to date wheat prices are up 110 1/2 in SRW, up 65 3/4 in HRW, up 80 1/2 in HRS; Corn is up 52; Soybeans up 144; Soymeal up $23.20; Soyoil up 9.48.

Year-To-Date nearby futures are down 11.0% in SRW, down 4.3% in HRW, down 8.9% in HRS; Corn is down 7.0%; Soybeans down 0.9%; Soymeal down 14.3%; Soyoil down 7.1%.

Chinese Ag futures (SEP 23) Soybeans up 21 yuan; Soymeal up 12; Soyoil up 46; Palm oil up 92; Corn up 30 — Malaysian palm oil prices overnight were down 41 ringgit (-1.10%) at 3678.

There were changes in registrations (-24 Soyoil). Registration total: 2,389 SRW Wheat contracts; 2 Oats; 0 Corn; 0 Soybeans; 1,052 Soyoil; 11 Soymeal; 97 HRW Wheat.

Preliminary changes in futures Open Interest as of June 26 were: SRW Wheat down 3,013 contracts, HRW Wheat down 143, Corn up 21,952, Soybeans up 7,479, Soymeal up 3,706, Soyoil up 5,789.

Northern Plains: Heavy rain moved through the Northern Plains over the weekend, helping eliminate many of the drier patches in the region. Some areas were missed, however. A few disturbances will bring showers through the region this week and weekend, helping to fill in areas that were missed. Additional showers may be possible next week as well. Overall, the outlook is favorable for developing crops and forages.

Central/Southern Plains: Isolated showers went through the Central and Southern Plains with a system this weekend but was much drier than most forecasts while triple-digit heat built up into the Red River Valley as well. Texas will continue to be hot all week and the heat will expand northeastward later this week again. Some areas of showers and thunderstorms will be possible, but mostly across the north until a front comes through this weekend to bring cooler temperatures into the region. That front may get stuck and bring more periods of rain to southern areas next week. Sporadic rainfall will leave many areas drier with stress continuing over those in drought. Wheat harvest should increase this week.

Midwest: Widespread showers and thunderstorms moved across the Midwest this weekend, but rains missed some key areas in central Illinois. Still, parts of Iowa, northern Illinois, Wisconsin, Indiana, and Michigan that desperately needed it saw rain. The region will be on the active side for the next week, but rains will come in sporadic fashion, with many areas staying dry in the active pattern. Temperatures may peak above normal across the south and east later this week, which could cause additional stresses for those areas that continue to lack rainfall. Needless to say, rainfall needs to hit the right places going forward to maintain chances for good yields.

Delta: A front came through the Delta on Sunday and will produce some showers Monday and bring brief relief to temperatures, but heat should build up mid- to late-week that could be stressful for some of the drier areas. Rainfall will be mostly located to the north this week, but a cold front coming through this weekend may bring needed showers into next week, as well as some cooler temperatures.

Canadian Prairies: A front dropping south Monday will largely stall out and some disturbances moving through the Canadian Prairies will help to bring at least some areas of showers throughout the week. The showers do not look overly widespread and many areas are going to be missed in the pattern. Any drier areas currently that continue to be dry this week may show significant stress in developing crops, especially in southern Alberta, where temperatures are likely to be higher most of the week. A system is forecast to move through next week, but the extent of any precipitation is unknown at this time. Temperatures should cool down, however.

The player sheet for 6/26 had funds: net sellers of 4,500 contracts of SRW wheat, buyers of 1,500 corn, sellers of 9,500 soybeans, buyers of 2,000 soymeal, and  buyers of 5,500 soyoil.

PENDING TENDERS

• WHEAT TENDER: Morocco’s ONICL will offer subsidies for the import of up to 2.5 million tonnes of milling wheat between July 1 and September 30, the state grains agency said on its website.
• RICE TENDER: The state purchasing agency in Mauritius has issued an international tender to buy 6,000 metric tons of long grain white rice sourced from optional origins, European traders said. The deadline for submission of price offers in the tender is June 26.

TODAY

US Inspected 543k Tons of Corn for Export, 141k of Soybean

In week ending June 22, according to the USDA’s weekly inspections report.

• Corn: 543k tons vs 831k the previous wk, 1,247k a yr ago
• Soybeans: 141k tons vs 180k the previous wk, 477k a yr ago
• Wheat: 204k tons vs 235k the previous wk, 353k a yr ago

US Corn, Soybean, Wheat Inspections by Country: June 22

Following is a summary of USDA inspections for week ending June 22 of corn, soybeans and wheat for export, from the Grain Inspection, Packers and Stockyards Administration, known as GIPSA.

• Soybeans for Mexico-bound shipments made up 69k tons of the 141k total inspected
• Mexico was the top destination for corn inspections, Yemen led in wheat

Canada Canola Processing Rose 30.1% Y/y in May: StatCan

Canola processing rose 30.1% in May from a year ago, according to Statistics Canada data released Monday on agency’s website.

• Oil production totaled 323k tons, and meal output at 451k tons
• Aug.-May crushings up 16.3% from year ago to 8.283m tons
• NOTE: Canada is the world’s top canola grower

Brazil C-S Winter Corn Harvest 9.3% Done as of June 22: AgRural

Comapres with 4.7% a week earlier and 20.3% last year, according to an emailed report from consulting firm AgRural.

While moisture in grains have made works more difficult in Mato Grosso state, yield has been reportedly great

South Africa reports two outbreaks of H7 bird flu in poultry

South Africa reported two outbreaks of highly pathogenic H7 bird flu in poultry east of Johannesburg, the Paris-based World Organisation for Animal Health (WOAH) said on Monday.

In total 9,500 farm poultry died from the virus in the town of Victor Khanye in Mpumalanga province, with one location having 2,000 poultry and the other 7,500, WOAH said, citing South African authorities.

The strain detected was H7, which is different from the H5N1 one that has killed several hundred million birds around the world.

Ukraine’s Black Sea Crop Exports Fall 18% in Week to June 25

The volume of crops departing Ukrainian ports under the Black Sea Grain Initiative totaled about 358,256 tons in the week to June 25, down 18% from the prior week, according to data posted by the Joint Coordination Centre.

• TOTAL TONNAGE: More than 32m tons of crops have been shipped since the initiative was established in July 2022
• NOTE: The grain deal is next up for renewal in mid-July

Ukraine Grain Harvest Estimate Raised Slightly on Barley: UAC

Ukraine’s grain harvest in the 2023-24 season is now seen at 47.3m tons, researcher UkrAgroConsult say in a note.

• That’s based on a 0.17m-ton increase in the barley crop estimate to 4.5m tons, due to better than expected plantings
  • Wheat crop left steady at 17.7m tons and corn at 23.9m tons
• Grain export estimate raised to 32.5m tons
  • Wheat unchanged at 11m tons, while corn and barley raised slightly to 19.5m tons and 1.85m tons, respectively

WHEAT/CEPEA: Sowing activities advance in both Brazil and Argentina

Wheat sowing activities are advancing in Brazil and in Argentina, surpassing half of the area expected for the season in both countries. It is important to mention that the area projection has been reduced last week for Argentina, and it may be the same as that observed last crop.

Conab says that 60% of crops in Brazil had been planted up until June 17, for an increase of 4.6 percentage points in relation to that registered in the same period of 2022. In Paraná, data from Seab/Deral indicate that sowing activities reached 83% of the total area until June 19.

In Rio Grande do Sul, activities totaled 55% of the area up to June 22, only 2 p.p. below that verified in the same period last year and 8 p.p. lower compared to the average over the last five years. Rains have hampered activities last week.

As for Argentina, Bolsa de Cereales reduced the area projection by 200 thousand hectares, now estimated at 6.1 million hectares, due to the dry weather in the central-western part of the country. Sowing activities reached 58.1% of the area until June 22, advancing 18.6 p.p. in one week.

In the United States, 15% of the winter crops were harvested up to June 18, below the 23% verified in the same period of 2022 and lower than the 20% on the average over the last five years (2018-2022).

The Russian consulting company SovEcon has reduced by 1.2 million tons the wheat crop projection in Russia compared to the previous forecast, currently at 86.8 million tons. This scenario is linked to the worsening of spring crops in the country.

PRICES – Cepea surveys show that, between June 16-23, the prices paid to wheat farmers upped 0.41% in Rio Grande do Sul and 0.3% in Paraná, remaining stable in Santa Catarina. On the other hand, in the wholesale market (deals between processors), values downed 0.68% in PR, 2.28% in São Paulo and 1.82% in SC, but increased 1.36% in RS. In the same period, the US dollar decreased 0.8%, closing at BRL 4.781 on June 23.

Based on data from Conab (Brazil’s National Company for Food Supply), between June 12-16, the import parity price for the wheat from Argentina delivered to Paraná State was at USD 356.93/ton. Considering the average of the US dollar in that period, at BRL 4.8456, the wheat imported was sold at BRL 1,729.54/ton, while for the Brazilian wheat traded in Paraná, the average was lower, at BRL 1,387.79/ton, according to data from Cepea. In Rio Grande do Sul, the price of the product from Argentina closed at USD 334.76/ton, which accounts for BRL 1,622.10/ton – against BRL 1,244.15/ton on the average of the state calculated by Cepea.

Mexico Sets 50% Tariff on White Corn Imports: El Universal

The Mexican government set a 50% tariff on all white corn imports, local media outlet El Universal reported.

• Decree was published in the national gazette

Biden administration to spend $450 million on higher-blend biofuels

The U.S. Department of Agriculture will spend $450 million to expand the production and availability of transportation fuels that are blended with higher volumes of biofuels, the agency said on Monday.

The Biden administration sees the expanded use of lower-emission biofuels as critical to decarbonizing the transportation sector.

The Environmental Protection Agency last week announced the highest-ever targets for a federal program that requires oil refiners to blend biofuels into the nation’s fuel mix, though the targets were lower than the ethanol industry had expected.

“No administration has been more supportive of the biofuel industry than the Biden-Harris administration,” Agriculture Secretary Tom Vilsack told reporters on a conference call.

The money, which comes from the Inflation Reduction Act, will go to the USDA’s Higher Blends Infrastructure Incentive Program (HBIIP), a cost-share program for fuel facilities to build and retrofit infrastructure that supports biofuel blending and distribution.

The agency also announced the recipients of $25 million in grants from a previous HBIIP funding round.

Senators Tina Smith and Amy Klobuchar of Minnesota, a key biofuel state, joined Vilsack on the call and said the investment will create new jobs and increase national security.

“We don’t want to be dependent on other countries when it comes to energy,” Klobuchar said.

Corn-derived ethanol, the most commonly used biofuel, can cut greenhouse gas emissions by as much as 52% over gasoline, according to the Renewable Fuels Association, a trade group.

Some academics and environmental groups have challenged that figure, arguing that biofuel use actually increases emissions due to the carbon released when farmers till land for crops.

US Fertilizers Pressured Amid First-Round Summer Fill Programs

US inland fertilizer prices continue to be squeezed as farmers wrap up fieldwork, suppliers strive to empty bins and producers launch the first round of summer fill programs. India’s first urea tender yielded less volume than expected, but inventory 2.3x average could keep the world’s largest importer from frequent, large 2H tenders.

Biotech Firm Moolec Discloses Good Results With Pork-Infused Soy

Moolec, a molecular farming company that inserts animal DNA into plants, says soybeans it infused with pig genes produced “a significantly high amount of pork protein,” according to a statement.

• “The animal protein reached a high expression level up to 26.6% of total soluble protein in soy seeds, 4x higher than initially projected”
• Moolec says the results prove that molecular farming is a valuable alternative technology for producing animal proteins

India Cumulative Monsoon Rainfall 23% Below Normal as of June 26

India has so far received 104.1 millimeters of rains during the current monsoon season, which runs from June through September, compared with a normal of 134.3 millimeters, according to data published by the India Meteorological Department on June 26.

• The southern peninsular region got 46% below normal rains
• Rainfall in the northwestern region was at 46% above normal
• Cumulative seasonal rainfall data is compiled by the IMD

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