Global Ag News for Jan 30.23

TOP HEADLINES

Ukraine Says 90% of Corn Area Harvested as of Jan. 27

Ukrainian farmers harvested corn from across 3.8m hectares which accounts for 90% of areas planted with the crop, the Agriculture Ministry says on website.

• This compares with 85% of harvest progress as of Jan. 12
• Corn harvest reached 25.2m tons versus 23.5m tons on Jan. 12

FUTURES & WEATHER

Wheat prices overnight are up 5 1/4 in SRW, up 9 in HRW, up 2 1/2 in HRS; Corn is up 3 1/4; Soybeans up 19; Soymeal up $0.73; Soyoil up 0.82.

Markets finished last week with wheat prices up 35 1/4 in SRW, up 59 1/4 in HRW, up 36 1/4 in HRS; Corn is up 20; Soybeans up 38 1/4; Soymeal up $1.89; Soyoil down 0.60.

For the month to date wheat prices are down 36 3/4 in SRW, down 9 in HRW, down 14 3/4 in HRS; Corn is up 7 3/4; Soybeans up 4 1/2; Soymeal up $9.80; Soyoil down 2.63.

Year-To-Date nearby futures are down 4.6% in SRW, down 1.1% in HRW, down 1.6% in HRS; Corn is up 1.1%; Soybeans up 0.6%; Soymeal up 0.5%; Soyoil down 3.7%.

Chinese Ag futures (MAR 23) Soybeans up 30 yuan; Soymeal up 25; Soyoil up 124; Palm oil up 172; Corn up 29 –Malaysian palm oil prices overnight were up 34 ringgit (+0.87%) at 3936.

There were changes in registrations (-55 SRW Wheat). Registration total: 2,728 SRW Wheat contracts; 0 Oats; 154 Corn; 819 Soybeans; 479 Soyoil; 62 Soymeal; 192 HRW Wheat.

Preliminary changes in futures Open Interest as of January 27 were: SRW Wheat down 2,330 contracts, HRW Wheat up 1,288, Corn up 3,930, Soybeans up 4,003, Soymeal up 3,694, Soyoil up 5,966.

Brazil Grains & Oilseeds Forecast: A front moved into southern areas over the weekend, but precipitation was not very consistent or heavy, especially over Rio Grande do Sul. Central and northern area will continue to see showers throughout the week, but there should be some breaks to complete some soybean harvest and safrinha corn planting from Mato Grosso to Minas Gerais. Otherwise, showers are trying to keep the delays coming.

Argentina Grains & Oilseeds Forecast: A front went through last Friday with scattered showers and some very good amounts for the main growing area. There were many areas that received over an inch, but there were some areas that did not. Another front will pass through this week with scattered showers, but showers may again miss some key areas. The country’s primary growing areas will be in a stretch of drier weather again until maybe mid-February when the next significant front moves through.

Northern Plains Forecast: Very cold air pushed into the region over the weekend but will be replaced by some brief warm air late week and weekend. Another round of cold air will move into the region early next week, but could be in-and-out as we move through February.

Central/Southern Plains Forecast: A cold front moved through the region over the weekend, bringing a round of cold air in. The cold will threaten livestock and exposed wheat for the next few days before some warmer air moves in from the west for the weekend and early next week. Southern areas will see precipitation continuing through Thursday, and will be cold enough for some freezing rain and snow accumulations. Drought areas in Oklahoma and Texas will see some more precipitation, but not enough to turn the drought around in a meaningful way.

Midwest Forecast: A strong cold front pushed into the region over the weekend, bringing a round of moderate to heavy snow from Iowa to Michigan. Some light precipitation will be possible early this week but should be drier and cold for the rest of the week. Warmer air will build back into the region over the weekend.

The player sheet for Jan. 27 had funds: net sellers of 1,500 contracts of SRW wheat, sellers of 4,500 soybeans, sellers of 3,000 soymeal, and  sellers of 1,000 soyoil.

TENDERS

• FEED WHEAT PURCHASE: South Korea’s Major Feedmill Group (MFG) purchased about 68,000 tonnes of animal feed wheat thought likely to be sourced from Australia in a private deal without issuing an international tender
• RAPESEED MEAL PURCHASE: Leading South Korean feedmaker Nonghyup Feed Inc. (NOFI) bought about 40,000 tonnes of rapeseed meal animal feed to be sourced from India in an international tender which closed on Thursday.

PENDING TENDERS

• SOYBEAN TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued international tenders to purchase around 19,000 tonnes of food-quality soybeans free of genetically-modified organisms (GMOs)
• WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy up to 120,000 tonnes of milling wheat which can be sourced from optional origins.
• FEED BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase up to 120,000 tonnes of animal feed barley.

TODAY

Brazil 2022/23 Soybean Harvest 4.4% Done as of Jan. 27: Safras

Compares with 1.7% a week earlier, and 11.3% a year before, according to an emailed report from consulting firm Safras & Mercado.

• Average for the last 5 years is 6.2%
• Mato Grosso state harvest at 14%, below average of 17.2%

Brazil’s 2022/23 soybean harvest hits 5.15% of planted area – Patria Agronegocios

BRAZIL’S 2022/23 SOYBEAN HARVEST HITS 5.15% OF PLANTED AREA VERSUS 11.41% A YEAR EARLIER – PATRIA AGRONEGOCIOS

Brazil 2022/23 Summer Corn Output Est. Cut to 23.7M Mt: Safras

Compares with previous estimate of 24.9m metric tons, and a 21.9m mt crop in 2021/22, according to an emailed report from consulting firm Safras & Mercado.

• Estimate change due to impact of drought in Rio Grande do Sul state, which is now expected to produce 4.64m mt vs prior forecast of 5.89m mt
• Summer corn area seen dropping 4.5% to 4.19m ha in Brazil’s center-south region
  • Yield seen rising to 5,664 kg/ha from 4,986 kg/ha in previous season
• 2023 winter corn area seen at 15m ha, vs 14.8m ha in previous season
  • Winter corn output seen at 87.7m mt, compared to previous forecast of 87.8m mt in Decembe

Brazil Soy Price Falls to the Lowest Since 2021 on Ample Supply

Soybean prices at Paranagua port plunged 3.7% in the week ending January 26 to 170.31 reais ($33.53) per 60-kg bag, the lowest since December 2021.

• Prices fell amid estimates of a record crop in Brazil, beneficial rains in Argentina and the Lunar New Year holiday in China, which kept buyers there out of the market, Cepea, a research arm at Sao Paulo University, says in report
• Local currency strength and weak demand from local crushers also helped to push prices down
• Export premiums fell 8% in the same span, with buyers offering $0.38 a bushel above Chicago prices on Thursday, Cepea says
  • That’s far below $0.84 a bushel a year ago
• Soybean farmers’ sales are 25% complete on average: Cepea
  • In top growing state of Mato Grosso, farmers sold 40.7% of the expected production through the first week of January, below the five-year average of 53.6%, according to Imea, the state rural economy institute

SOYBEAN/CEPEA: Prices drop and return to level from Dec/21

Estimates pointing to a high harvest in Brazil, rains in Argentina and the celebration of the Chinese New Year (which drove the Chinese away from trades) have pressed down soybean quotations this week. Thus, in some Brazilian regions, prices are the lowest since Dec/21.

Devaluations are also linked to the dollar depreciation and the weak demand from Brazilian processors, which are waiting for the harvesting to advance in order to close new deals, expecting lower prices. These purchasers are aware of the low volume of the 2022/23 season already sold.

Between January 19th and 26th, the US dollar dropped 2%, to BRL 5.072 on Thursday, 26, the lowest level since Nov 4th, 2022. The CEPEA/ESALQ Paraná Index decreased a steep 4.3%, closing at BRL 163.78 (USD 32.29) per 60-kilo bag on Thursday, 26, the lowest since Dec. 14th, 2021. In the same period, the ESALQ/BM&FBovespa Paranaguá (PR) Index decreased 3.7%, to BRL 170.31 (USD 33.58) per 60-kilo bag on Jan. 26th, also the lowest since Dec. 15th, 2021.

On the average of the regions surveyed by Cepea, soybean prices dropped 3% in the over-the-counter market (paid to farmers) and 3.7% in the wholesale market (deals between processors).

ESTIMATES – According to agents consulted by Cepea, 25% of the 22/23 crop have been traded in Brazil. In Mato Grosso, 40.67% have been traded, according to Imea – 5.9% have been harvested so far.

Em relatório divulgado no dia 26, o Deral/Seab reajustou a produção de soja no Paraná, para 20,7 milhões de toneladas, 3,72% abaixo da estimativa inicial. Essa redução está atrelada ao clima desfavorável, sobretudo no oeste do estado. Do total a ser produzido, o Departamento estima que apenas 7% foi comercializado antecipadamente. In Rio Grande do Sul, despite the higher volumes, rains have been heterogeneous. According to Emater/RS, problems with pests and fungus have been reported.

According to Conab, a slight 2% of the crop had been harvested in Brazil by Jan. 21st, less than the 5.5% from the same period last year. According to the farmers consulted by Cepea, activities have begun in Paraná and in Mato Grosso do Sul too, however, the volume harvested is still low.

CORN/CEPEA: Expectations for higher supply keep purchasers away from the market

With the progress of the summer crop harvesting in the major corn-producing regions and the beginning of sowing the second crop, agents expect supply to increase in the Brazilian spot market – it is important to mention that the output is estimated to set a new record. This scenario is keeping purchasers away from the spot market, and prices are fading. On the other hand, at national ports, exports have been high, despite the recent decrease in the number of deals for exports.

Between January 19 and 26, on the average of the regions surveyed by Cepea, prices dropped 1.5% in the over-the-counter market (paid to farmers) and 1.8% in the wholesale market (deals between processors).

In Rio Grande do Sul, not even the concerns about the productivity of the summer crop were able to limit devaluations. In Campinas, the ESALQ/BM&FBovespa Index has returned to the levels from Nov/22, closing at BRL 84.88 (USD 16.73) per 60-kg bag on Thursday (26), 0.6% down from that on Jan. 19th.

PORTS – The number of deals for exports has decreased this week, however, Brazilian corn shipments continue high, due to the deals previously closed. Data from Secex show that until the third week of January (15 working days), Brazil had shipped 4.22 million tons of corn, almost two-fold that exported in Jan/22 (2.73 million tons).

CROPS – Be the end of last week, 5.5% of the national summer crop of corn had been harvested, with significant increases in Rio Grande do Sul and Minas Gerais, according to data from Conab released on Jan. 21st. Meanwhile, the summer crop is still being sown in Maranhão and Piauí. Thus, according to data from Conab, 96% of the national summer crop of corn has been sown.

Strategie Grains keeps EU rapeseed forecast at 19.5 mln T

Consultancy Strategie Grains’ forecast for 2023 European Union rapeseed output remains unchanged at 19.5 million tonnes, in line with last year’s estimated volume, it said in an oilseed report on Monday.

Rapeseed crops are generally in satisfactory condition, with the weather outlook not suggesting any risks up to the end of January, the report said.

The French consultancy increased its forecast for this year’s sunflower seed harvest to 11.3 million tonnes from an initial projection of 11.2 million tonnes, with the planted area expected to reach a record high.

French Corn Plantings Will Probably Fall Further This Year: AGPM

While there’s no firm estimate yet, corn plantings this spring are expected to decrease slightly from a year earlier, Arthur Boy, an economist at French corn growers group AGPM, said in an interview on Friday.

• Input costs remain high and changes to EU farm policy could spur slight shifts in farmers’ crop rotations
• Other key EU growers, like Romania, may also plant less
• NOTE: French farmers last year cut corn plantings more than 6% as fertilizer costs surged, government data show
  • A summer drought also hampered crops, leaving the smallest harvest in more than three decades
• The peak in fertilizer prices seems to have passed, Boy said
  • Urea costs topped €1,000 ($1,088) a ton several months ago, and are now around €600
• Still, prices remain expensive historically and farmers may apply less

US Beef Production Up 1.9% This Week, Pork Rises: USDA

US federally inspected beef production rises to 545m pounds for the week ending Jan. 28 from 535m in the previous week, according to USDA estimates published on the agency’s website.

• Cattle slaughter up 2% from a week ago to 659m head
• Pork production up 0.7% from a week ago, hog slaughter rises 0.2%
• For the year, beef production is 1.7% below last year’s level at this time, and pork is 1.9% above

Brazil Fertilizers Mixed as Farmers Prepare for Planting

Nitrogen prices fell in Brazil as farmers prepare to plant corn in February and the markets in India and the US remain quiet. Potash and phosphates were stable amid slow activity, though sellers expect demand for the 2023/24 soybean crop to rise soon, with planting slated for September.

Brazil Urea Prices Fall Amid Quiet Global Markets

Fertilizer prices were mixed in Brazil as demand slows while farmers transition from soybean harvesting to corn planting. Urea fell more than $30 a metric ton (mt), to $405-$425/mt vs. last week’s $450-$455, boosting interest for next year’s second corn-crop supplies. With India delaying its next tender and remaining out of the global market, the pressure on urea may continue as international producers look for buyers. Though sellers anticipate higher prices for potash and phosphates, monoammonium phosphate (MAP) prices narrowed to $655-$660/mt vs. last week’s $650-$670, while Brazil potash was unchanged at $500-$520/mt amid limited transactions.

Tampa, NOLA Ammonia Prices Fall as Nitrogen Complex Slumps

Nitrogen and potash prices remain under pressure in the US as buyers review producers’ recently released winter and spring pricing programs. New Orleans (NOLA) and inland prices for urea, urea ammonium nitrate, ammonium sulfate and potash continue to fall. A February reset for ammonia pushed prices significantly lower at Tampa and NOLA.

US Nitrogen, Potash Prices Continue Downward Trend

Nitrogen prices remain pressured, led by a big decline in Tampa ammonia, which fell to $790 a metric ton for February vs. $975 in January. The drop was expected due to falling natural gas prices and increased ammonia production in Europe, which lowered demand for imported ammonia. Urea was also falling, with New Orleans (NOLA) prices slipping to $340-$392 a short ton (st) vs. last week’s $385-$418. Slumping NOLA markets also pushed inland terminal prices lower for urea, urea ammonium nitrate and ammonium sulfate in late January, while phosphates were largely steady from the prior week at NOLA and in most inland markets.

Though the order period for 1Q potash fill is now closed, prices remained flat to weak in the US and Canada, with NOLA and inland terminals falling $5-$10/st vs. last week.