Global Ag News for Apr 24.23

TOP HEADLINES

Russia Says G-7 Export Ban Would Trigger Grain Deal Exit

Moscow may retaliate if Group of Seven countries proceed with a total ban on most exports to Russia by withdrawing from the safe-transit deal that allows Ukraine to ship grains from Black Sea ports, said Dmitry Medvedev, deputy chair of Russia’s Security Council.

Russia would also consider banning exports of some of its own goods, Medvedev said in a Telegram post.

G-7 officials are considering moving closer to an outright ban on most exports to Russia and are discussing the idea ahead of a leaders summit in Japan in May, according to people familiar with the matter. The proposal is still being debated and could change, the people said last week.

“The total ban on the export of goods to our country by default is a wonderful idea, because it also implies retaliation and a ban of the import of goods from our country,” said Medvedev, a former Russian prime minister and president. “The grain deal will end,” he added.

On top of the G-7 discussions, the European Union is also set to propose a ban on many goods transiting through Russia as the bloc attempts to tighten enforcement of sanctions imposed over the past year, people said on Saturday.

The safe-transit agreement, brokered by the UN and Turkey, has allowed Ukraine to export millions of tons of grain since last summer. Russia, which is currently the world’s largest wheat exporter, has repeatedly threatened to withdraw from the deal, which is next up for renewal in mid-May, if issues regarding its own grain and fertilizer shipments aren’t resolved.

A shipment of Russian fertilizer held in Latvia since Moscow’s invasion of Ukraine 14 months ago has sailed for Kenya, Latvian authorities said on Saturday, in what was seen as a possible boost for efforts to extend the Black Sea deal.

Russian Foreign Minister Sergei Lavrov is expected to discuss the grain agreement with UN Secretary-General Antonio Guterres while in New York this week to chair the UN Security Council meeting, Tass reported.

Yet Medvedev’s comments suggest another hurdle for the agreement to continue.

Medvedev is known for inflammatory comments on social media. He issued a veiled threat via Twitter on Friday to Boris Pistorius, Germany’s defense minister, saying that “the German who wishes to attack Russia, must be ready for our parade in Berlin.”

FUTURES & WEATHER

Wheat prices overnight are up 2 1/4 in SRW, up 3 in HRW, up 6 1/4 in HRS; Corn is down 5; Soybeans up 2; Soymeal up $2.50; Soyoil down 0.26.

Markets finished last week with wheat prices down 29 1/4 in SRW, down 43 1/4 in HRW, down 33 1/2 in HRS; Corn is down 29 1/2; Soybeans down 32 1/4; Soymeal down $16.60; Soyoil down 1.20.

For the month to date wheat prices are down 26 1/2 in SRW, down 28 1/2 in HRW, down 42 1/4 in HRS; Corn is down 23; Soybeans down 22 1/4; Soymeal down $15.20; Soyoil down 2.12.

Year-To-Date nearby futures are down 15.9% in SRW, down 4.4% in HRW, down 8.8% in HRS; Corn is down 2.2%; Soybeans down 1.8%; Soymeal down 6.3%; Soyoil down 16.4%.

Chinese Ag futures (JUL 23) Soybeans up 33 yuan; Soymeal down 31; Soyoil down 94; Palm oil down 92; Corn down 18 — Malaysian Palm is down 30. Malaysian markets are closed for Holiday.

There were changes in registrations (-74 SRW Wheat). Registration total: 2,389 SRW Wheat contracts; 23 Oats; 11 Corn; 0 Soybeans; 613 Soyoil; 1 Soymeal; 1 HRW Wheat.

Preliminary changes in futures Open Interest as of April 21 were: SRW Wheat up 1,404 contracts, HRW Wheat up 1,151, Corn down 12,838, Soybeans down 24,910, Soymeal up 1,410, Soyoil down 5,293.

Northern Plains Forecast: Below-normal temperatures continue for the next week, but still be warm enough continue melting the snowpack in the region. A system moving through later this week will bring in scattered showers, mostly in the form of rain despite the cooler temperatures. Rain should not be heavy enough to increase pressure on the ongoing flooding across the Red River by too much, but the colder temperatures will slow the drying process, limiting fieldwork and planting.

Central/Southern Plains Forecast: Some showers went through southern areas over the weekend with a small disturbance, but missed most of the drought areas. Cold temperatures made for widespread frosts and freezes across a good portion of the region outside of eastern Oklahoma and most of Texas, which may have been damaging for wheat. A system will bring more widespread showers to the drought areas over the next few days, and could be substantial in some areas. That will help to reduce the impact of the drought, but will not make much of a dent in it. Additional showers could be possible late this week with another system. Wheat may not benefit from the rain too much due to poor conditions, but the increased soil moisture would favor corn and soybean planting and establishment.

Midwest Forecast: Below-normal temperatures continue for the next week, but still be warm enough continue melting the snowpack in the region. A system moving through later this week will bring in scattered showers, mostly in the form of rain despite the cooler temperatures. Rain should not be heavy enough to increase pressure on the ongoing flooding across the Red River by too much, but the colder temperatures will slow the drying process, limiting fieldwork and planting.

Canadian Prairies Forecast: Below-normal temperatures continues to limit melting of the heavy snowpack across the east. Western areas with less snow cover should see higher temperatures, but only slightly. The overall cooler nature will continue to limit or prohibit fieldwork and seeding across the east, but western areas may see a window opening up. Some showers will move through with a system this week, being a mix of rain and snow, but should dry out afterward. Still, it is not a completely favorable pattern for seeding.

Argentina Grains & Oilseeds Forecast: A system brought some showers to northern areas on Sunday and will continue there Monday. Most of the agricultural areas missed out and conditions are favorable for harvesting a severely damaged crop. Winter wheat areas are in need of more moisture as the crop will start to be planted in the next week or two.

The player sheet for 4/21 had funds: net sellers of 4,500 contracts of SRW wheat, sellers of 7,000 corn, sellers of 6,500 soybeans, sellers of 2,500 soymeal, and  sellers of 2,500 soyoil.

TENDERS

• CORN PURCHASE: South Korea’s Major Feedmill Group (MFG) purchased an estimated 69,000 tonnes of animal feed corn expected to be sourced from South America in a private deal, continuing a string of Korean purchases.
• CORN PURCHASE: The Korea Feed Association (KFA) Busan section purchased some 66,000 tonnes of animal feed corn expected to be sourced from South America
• CORN PURCHASE: The Korea Feed Association (KFA) Incheon section purchased some 68,000 tonnes of animal feed corn expected to be sourced from either South America or South Africa in an international tender.
• CORN PURCHASE: South Korean animal feed maker Nonghyup Feed Inc (NOFI) bought an estimated 137,000 tonnes of animal feed corn from optional origins in an international tender for up to 138,000 tonnes.

PENDING TENDERS

• RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 43,500 tonnes of rice
• WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy up to 120,000 tonnes of milling wheat that can be sourced from optional origins.
• BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase up to 120,000 tonnes of animal feed barley.

TODAY

US Cattle on Feed Fell to 11.61M Head on April 1

The feedlot herd fell 4.4% from a year ago, according to the USDA’s monthly report. Analysts were expecting a drop of 5.1%

• Placements onto feedlots down 0.6% y/y to 1.992m head
• Cattle marketed from feedlots declined 1.15% to 1.977m head

U.S. buys Brazilian soybeans after price drop – shipping data

A drop in prices due to abundant local supplies is making Brazil an attractive origin for soybeans, with at least two vessels carrying a combined 79,150 tonnes of Brazilian product heading to the U.S. in the next few days, according to shipping data.

The CS Satira, chartered by The Andersons ANDE.O, is expected to set sail on April 30 carrying 33,000 tonnes of Brazilian soybeans from the port of Santarem to the U.S., shipping data from Cargonave showed on Thursday.

A bigger cargo of 46,150 tonnes will be shipped by charterer Bunge Ltd BG.N from the port of Itacoatiara on April 25, according to the data.

Representatives from Bunge and The Andersons did not respond to requests for comment.

The movement of soybeans from Brazil’s record harvest to the U.S. could cut into the prices that U.S. farmers who have soybeans in storage bins receive for the crops they have been holding since the fall.

More shipments are expected in the coming months due to the price differential between U.S. and Brazilian supplies, said Michael Cordonnier, president of consultancy Soybean and Corn Adviser.

“The discount is like $2 a bushel coming out of Brazil,” Cordonnier said. “They say that is enough to pay for the transportation costs. The ports are working as fast as they can.”

Recent improvements in Brazil’s Amazon river ports and some facilities on the northern coast of the country also helped to facilitate shipments to the U.S.

Brazil, the world’s largest soybean producer and exporter, is also expected to sell massive volumes of soybeans to Argentina in 2023 to make up for a shortfall in its neighbor’s supplies due to a severe drought.

At least 15 ships chartered by global grain traders have sailed or will depart from different Brazilian ports carrying a combined 475,689 tonnes of Brazilian soybeans to Argentina, Cargonave data showed.

Brazilian soybean port premiums have fallen to historical lows amid lukewarm Chinese demand and a record soybean crop of above 153 million tonnes.

Argentina 2023-24 Wheat Planting Area Seen at 6.7m Hectares

Argentina’s wheat planting area for the 2023-24 season is seen expanding to 6.7 million hectares, a 600,000 hectare increase y/y, according to a report from the Buenos Aires Grains Exchange.

• This season’s planting area represents a 4.7% higher than the average for the previous five seasons

Andersons’ Ethanol JV Is Put in Receivership Amid High Corn Cost

Andersons says its Element joint venture with ICM is in receivership after the ethanol plant missed debt payments amid market disruptions and costly local corn.

• The Element biofuels plant in Colwich, Kansas, is shutdown for maintenance and future operating decisions will be made by a court-appointed receiver, according to a company statement
• The company expects to post a non-cash pretax charge related to the JV of about $85m-$95m, 51% of which will be attributable to the firm
• Andersons doesn’t expect an impact on its previously stated long-term profit target
• NOTE: Element opened in 2019 to convert corn kernel fiber into ethanol and advanced corn oil

Poland Leads Push to Widen Ukrainian Farm Product Import Ban

Eastern Europe countries are looking to widen recently-imposed bans on the domestic sale of Ukraine’s grains to other agricultural products from their war-torn neighbor, including sunflower oil, meat, eggs, milk, and soft fruits.

The agriculture ministers of Poland, Romania, Slovakia, Hungary and Bulgaria will meet on Monday to discuss further steps, Poland’s Robert Telus said in interview with radio RMF FM. They already sent letter to European Commission asking for more action to protect local markets, days after EU gave its initial nod for local bans for grain, he said.

Pressured by protests by its farmers, Poland unilaterally banned the import of grains from Ukraine this month. The move triggered discussions on how to maintain the transit of Ukrainian products without the risk of flooding Eastern Europe’s markets with those goods. Import of Ukrainian grains to Poland rose eight-fold to about 3 million tons last year, Eurostat data show.

“Our decisions started talks with the European Union, as before the problem was not recognized widely,” Telus said. “Together with coalition of countries, we are now seeking further mechanisms that would help us to better control transit corridors.”

Eastern EU members asked Brussels to consider a common purchase mechanism for grains, subsidies for local farmers in case imports from Ukraine exceeds certain levels, and incentives for the transit of agricultural goods, according to Polish ministry. Polish media has reported that in addition to grain, the market is being flooded by Ukrainian poultry.

Poland is now rushing to sell about 4 million tons of grain abroad before its harvest season, and its cabinet offered subsidies to make purchases from local farmers more appealing.

Telus said that apart from maritime transport he’s counting on counts on road and railway logistics. Poland’s government is also considering investment in a new grain terminal on the Baltic Sea.

IKAR Cuts Russian Wheat Production Estimate By 2.3% to 84m Tons

Production outlook in world’s top wheat exporter declines from earlier forecast for 86m tons, according to emailed report Friday from Dmitry Rylko, director of consultant IKAR.

• Cut in outlook linked to problems in eastern Russia and Volga region; meanwhile Stavropol is “far from optimal”
• IKAR estimates Russia’s wheat-export surplus at 41m tons and all-grain surplus of 129.5m tons

US Weekly Beef and Pork Production Estimates: USDA

US federally inspected beef production rises to 510m pounds for the week ending April 22 from 503m in the previous week, according to USDA estimates published on the agency’s website.

• Cattle slaughter up 1.5% from a week ago to 622m head
• Pork production up 1.3% from a week ago, hog slaughter rises 1.2%
• For the year, beef production is 4.8% below last year’s level at this time, and pork is 1% above

Fertilizer Prices Climb as Spring Demand Stretches Supply

A spike in spring fieldwork and near-term demand caused fertilizer supplies to tighten at New Orleans and inland, contributing to higher prices for urea, phosphates and potash. Urea futures at New Orleans price a short-term, demand-fueled price increase as US farmers rush to fertilize quickly amid favorable weather and field conditions.

Tight Supply Drives Prices Higher for Urea, Phosphates, Potash

Tight supply and strong demand continued to push inland urea, phosphate and potash prices higher in the US, with increases also reported at New Orleans (NOLA) for phosphates and ammonium sulfate barges. Corn Belt urea jumped to $410-$450 a short ton (st) vs. last week’s $395-$430, with $20-$30 increases also reported in the Northern Plains and Northeast regions. Corn Belt phosphate prices were up $25-$75/st depending on location, while potash terminals climbed to $450-$500/st vs. $435-$475 last week.

While NOLA urea was up slightly early in the week, trades down to $338/st were confirmed on April 20, below last week’s $350-$387 range. Ammonium sulfate barges jumped $15-$20/st for new business, with monoammonium phosphate (MAP) barges at NOLA firming to $620/st vs. $585-$600 last week.*

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