Global Ag News for July 22.22
Wheat prices overnight are down 23 3/4 in SRW, down 19 3/4 in HRW, down 18 in HRS; Corn is down 7; Soybeans down 10 1/4; Soymeal down $0.39; Soyoil down 0.01.
For the week so far wheat prices are up 9 3/4 in SRW, up 5 1/4 in HRW, down 12 1/4 in HRS; Corn is down 36; Soybeans down 49; Soymeal down $0.88; Soyoil down 2.21.
For the month to date wheat prices are down 101 1/2 in SRW, down 110 1/4 in HRW, down 95 1/2 in HRS; Corn is down 53 1/4; Soybeans down 166 3/4; Soymeal down $25.40; Soyoil down 8.41.
Year-To-Date nearby futures are up 2% in SRW, up 5% in HRW, down -9% in HRS; Corn is down -4%; Soybeans up 6%; Soymeal up 5%; Soyoil up 4%.
Chinese Ag futures (SEP 22) Soybeans down 49 yuan; Soymeal down 43; Soyoil down 94; Palm oil down 226; Corn down 36 Malaysian palm oil prices overnight were down 9 ringgit (-0.24%) at 3711.
There were changes in registrations (-6 Corn). Registration total: 2,653 SRW Wheat contracts; 0 Oats; 0 Corn; 6 Soybeans; 194 Soyoil; 0 Soymeal; 1 HRW Wheat.
Preliminary changes in futures Open Interest as of July 21 were: SRW Wheat up 3,791 contracts, HRW Wheat up 33, Corn up 10,764, Soybeans up 4,092, Soymeal down 2,034, Soyoil up 917.
Northern Plains Forecast: Outside of some stray showers in the Northern Plains the next couple of days, the next organized system moves through on Saturday. That system will send temperatures below normal and another front moving through early next week will support cooler temperatures in the region along with another round of showers.
Central/Southern Plains Forecast: Outside of some stray showers occurring at times for the next few days in the Southern Plains, the next organized shower event comes this weekend across the Central Plains as a cold front settles into Nebraska and northern Kansas. Another front will move through the region next week with another round of showers, but this front could penetrate farther south, bringing cooler temperatures along with it.
Midwest Forecast: Some isolated showers will pop up in the Midwest over the next couple of days, but most areas will remain dry to finish out the week. More scattered showers are expected with a system this weekend and, although the showers will likely miss some areas, will be favorable and bring temperatures down a bit. Another cold front will sweep through the region in the middle of next week, providing more showers and cooler temperatures to reduce stress for areas that have been too dry.
Canadian Prairies Forecast: Soil moisture is mostly favorable across the Canadian Prairies. Another system will move through Thursday night into Saturday morning with a few showers, but a stronger system is forecast to move through Sunday into early next week with more showers and cooler temperatures.
Black Sea Forecast: Temperatures will continue to be milder so drier areas should not feel as much stress. Temperatures will increase next week, and showers will turn isolated or absent.
Europe Forecast: A ridge is bringing intense, record-breaking heat across Europe this week and has pressed more into eastern portions of the continent. Showers have followed behind the heat across the northern areas, but it remains hot across the south. The showers are bringing at least some relief, but areas that get missed will see more stress developing for spring grains and corn. The heat will continue in waves through next week, expanding back north at times as well.
The player sheet for 7/21 had funds: net sellers of 4,500 contracts of SRW wheat, sellers of 12,500 corn, sellers of 15,000 soybeans, sellers of 4,000 soymeal, and sellers of 4,000 soyoil.
- CORN SALE: South Korean animal feed maker Nonghyup Feed Inc. (NOFI) has bought an estimated 138,000 tonnes of animal feed corn in an international tender which closed on Thursday
- CORN SALE: South Korea’s Major Feedmill Group (MFG) has purchased an estimated 66,000 tonnes of animal feed corn expected to be sourced from South America or South Africa in an international tender which closed on Thursday
- CORN SALE: South Korea’s Feed Leaders Committee (FLC) purchased about 65,000 tonnes of optional-origin animal feed corn in a private deal on Thursday without an international tender being issued
- WHEAT SALE: Egypt’s state grains buyer is believed to have bought an additional 120,000 tonnes of Russian and French wheat in direct negotiations with trading houses on Thursday
- WHEAT SALE: A government agency in Pakistan has made awards to buy 300,000 tonnes of wheat in an international tender which closed this week
- BARLEY TENDER: Jordan’s state grains buyer has issued a new international tender to purchase 120,000 tonnes of animal feed barley.
- SOYMEAL TENDER: Leading South Korean animal feed maker Nonghyup Feed Inc. (NOFI) has issued an international tender to purchase up to 60,000 tonnes of soymeal
- 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
Ukraine and Russia to Sign Grain Export Deal Friday, Turkey Says
A deal to restart Ukrainian grain exports from the country’s blocked Black Sea ports will be signed on Friday by representatives of Ukraine, Russia and the United Nations, according to an official in Turkey, which has been hosting negotiations.
Turkish President Recep Tayyip Erdogan and UN Secretary General Antonio Guterres will attend the signing, according the statement from Erdogan’s spokesman.
The agreement could help revive the crops trade from one of the world’s biggest wheat, corn and vegetable-oil exporters, improving global supplies and helping ease worries of a food crisis. Millions of tons of grain are stalled in Ukraine after the war stifled seaborne trade, which normally accounts for the bulk of the country’s sales to buyers spanning Africa to Asia.
However, much remains to be seen about how the deal is implemented and whether Ukrainian sales can return to normal levels with Russia’s invasion still raging. Moscow’s forces have also targeted infrastructure at ports and crop fields have caught fire in shelling, adding to the challenges to a resumption of sales.
The US National Security Council said in a statement that “we are hopeful though realistic about the prospects for re-opening Ukraine’s agricultural exports given how Russia has been blocking exports throughout the war, exacerbating global food insecurity. Success in ending Russia’s blockade will of course depend not only on Russia agreeing to a deal, but on Russia actually implementing it.”
Wheat futures in Chicago declined on the news before paring some of the losses.
China to auction 500,000 tonnes of soybeans on July 29 -trade centre
China will auction 500,000 tonnes of imported soybeans from its state reserves on July 29, the National Grain Trade Center said on Friday.
Beijing has been selling reserve soybeans regularly since March in an effort to boost supply on the domestic market.
Top Importer China to Buy Less Soy as Local Production Ramps Up
China, the biggest soybean importer, is set to cut purchases as Beijing increases efforts to boost local output and its Covid Zero policy triggers snap lockdowns and movement restrictions, threatening consumption.
Inbound shipments fell more than 5% in the first six months from a year earlier to 46.3 million tons, the smallest since the start of the pandemic in 2020, customs data show. Imports are expected to shrink further in the second half, according to Anhui-based broker Huishang Futures.
An expansion in the domestic soybean area will ease the country’s dependence on foreign supplies, Huishang said. Poor crush margins have also hurt demand for overseas beans, and the continuing Covid curbs are reducing movement and increasing hurdles for businesses, including hotels and restaurants.
China’s consumption of soybeans is almost as large as the entire US harvest, and the country has to import about 85% of its needs. Global prices have surged in the past two years as heat and drought cut supplies. At home, Beijing is making a big push to raise output, targeting a 40% increase through 2025.
The country has fulfilled a target to inter-crop soybeans with corn on more than 1 million hectares of land, a farm ministry official said this week, citing it as a major highlight of agricultural production this year. Autumn grain production is progressing well, the official said.
The US Department of Agriculture cut its estimate for Chinese soybean imports by 1 million tons to 98 million tons in 2022-23 and by 2 million tons to 90 million tons in 2021-22, according to a report earlier this month.
Rusagrotrans Ups Russia Wheat Crop Estimate to 92.7m Tons: Tass
Analytical center at rail carrier Rusagrotrans raised its Russia wheat harvest forecast by 2.6m tons to 92.7m tons, Tass reports.
- Forecast increased due to higher yields in the center and Volga regions, Tass reports; high moisture reserves and high yields at the beginning of harvesting are favorable
- Total Russian grain harvest may reach 141m tons
- NOTE: Rusagrotrans includes the Russian-occupied peninsula of Crimea in its forecasts
Indonesia Considers Scrapping Palm Oil Domestic Obligation: CNN
Govt is considering removing the domestic market obligation and domestic price obligation for palm oil to speed up exports, CNN Indonesia reports, citing Trade Minister Zulkifli Hasan.
Hasan will discuss the plan with palm oil companies to ensure the producers commit to upholding local supply
Indonesia’s Palm Oil Exports Jumps 213% M/m in June: Intertek
Exports climbed to 1.8m tons in June from 574.9k tons a month earlier, cargo surveyor Intertek Testing Services says in an emailed statement.
- June shipment by grade:
- 112,250 tons of crude palm oil
- 703,555 tons of RBD palm olein
- 448,896 tons of RBD palm oil
- June versus May sales by destination:
- India and subcontinent 531,776 tons vs 61,300 tons
- China 313,571 tons vs 114,669 tons
- EU 347,544 tons vs 141,821 tons
IGC Cuts 2022-23 Global Grain Crop Outlook on Europe Drought (1)
World grains production outlook for the 2022-23 season is now seen at 2.252b tons, down from a June estimate for 2.255b tons, as drought hampers the EU’s corn, wheat and barley harvests, the International Grains Council says Thursday in a report
- Stockpiles estimate kept steady at 583m tons, due to shrinking consumption
- Wheat output estimate raised to 770m tons, from 769m tons
- Corn output estimate cut to 1.189b tons, from 1.19b tons
- Estimate for Ukraine grain exports kept steady at 22.6m tons
- Russian exports slightly raised to 45.1m tons, versus 44.6m tons
Egypt’s GASC Wheat Purchases Reach at Least 2.4m Tons
Egypt’s state buyer bought 640,000 tons of wheat in private negotiations on Wednesday, bringing its total purchases for the 2022-23 season to at least 2.4 million tons.
- NOTE: USDA forecasts Egypt to import 11 million tons during the season, and about half is typically booked by the government
- The General Authority for Supply Commodities recently began booking some wheat in private talks with traders, marking a shift from its historical process of securing supply in tenders
- As a result, the table below may not include all purchases made during period
- By this time last year, GASC had booked about 1.2 million tons of wheat in tenders
- France appears to be the leading supplier so far this season
French Corn Conditions Decline to Three-Year Low: AgriMer
The share of France’s corn crop rated in good or very good condition dropped to 75% as of July 18, from 83% a week earlier, crops office FranceAgriMer said on its website.
- That’s the lowest share for this time of year since 2019, FranceAgriMer data compiled by Bloomberg show
- NOTE: European corn fields, including in France, have been hit by hot, dry weather
- The French soft-wheat harvest is now more than 80% complete and farmers have finished collecting winter barley
Saskatchewan Says Canola Crops Damaged by Heat, Humidity
“Many producers are reporting that their crops have experienced heat blasting and are worried about the effect it will have on their yields,” the province’s agriculture ministry says Thursday in a report.
- Crops will be ready for harvest sooner if heat continues with minimal rainfall
- 74% of fall cereals, 65% of spring cereals, 61% of oilseeds are at their normal stage of development
- Storms and “wild weather” in past week damaged crops
- Humidity has slowed haying
USDA attaché leaves India 2022/23 wheat crop estimate at 99 million T
Following are selected highlights from a report issued by the U.S. Department of Agriculture’s Foreign Agricultural Service (FAS) post in New Delhi:
“The weak southwest monsoon in first half of June 2022 slowed ongoing plantings of the kharif (fall harvested) season crops. Plantings will recover under adequate soil moisture conditions with the revival of monsoon starting the third week of June, along with expected normal precipitation in July. On July 6, India’s Ministry of Commerce and Industry notified authorizing the export of wheat flour and other products … only on the recommendation of Inter-Ministerial Committee on the Export of Wheat. Based on the domestic market supply situation, FAS New Delhi continues to estimate market year (MY) 2022/2023 wheat production at 99 million metric tons (MMT), exports at 6 MMT, and ending stocks at 8.5 MMT.”
Argentina Wheat Area Estimate Slips Again on Drought: Exchange
Area is seen shrinking another 1.6% to 6.1m hectares (15.1m acres) because fields remain too dry to get seeds in the ground as the planting window shuts, the Buenos Aires Grain Exchange says in a weekly report.
- Planting is 97% complete
- NOTE: The bourse’s estimate at the start of the season was 6.6m ha
- Early wheat plants are suffering incrementally from the dryness
- The initial growth stages of late-sown plants are delayed because of the drought and frosts
- The Bahia Blanca Grain Exchange, which covers Argentina’s breadbasket region, also reported delayed growth
Argentine Corn, Wheat Crop Estimates July 21: Exchange
The Buenos Aires Grain Exchange releases weekly report on website.
- 2022-23 Wheat planting area revised down to 6.1m ha vs 6.2m last week
- 2021-22 Corn harvest advanced to 67.2% complete vs 58.1%
Ukraine Grain Firm Said to Discuss Changing Terms of China Loan
- State Food & Grain Corp. has $1.5b loan with China’s Exim Bank
- Talks come as key creditors back Ukraine’s debt-freeze plan
Ukraine’s state-controlled grain trader State Food & Grain Corp. is in talks with the Export-Import Bank of China about changing the terms of a $1.5 billion loan guaranteed by the sovereign, according to three people familiar with the matter.
The goal is to get the sort of relief from Chinese creditors that the government got from international investors, said two of the people who spoke on the condition of anonymity as the talks are private. Key members of the Paris Club said Wednesday that they will allow the nation to suspend debt servicing until the end of 2023.
A spokesperson for State Food & Grain Corp. didn’t answer calls from Bloomberg News. Calls to Exim Bank after office hours went unanswered.
“Various options” regarding the loan are being explored, Ukraine’s Finance Ministry said in an emailed comment. It also said it believes in “comparability of treatment” after securing debt relief on Wednesday and that it does not envisage unilateral sovereign default.
The Ukraine government on Wednesday asked creditors for a two-year freeze in payments on its foreign debt obligations. The world’s largest private investors and countries including the US are among parties supporting the plan.
The grain trader’s struggle to service the debt predates Russia’s invasion of Ukraine. In January, the company got government support to pay a $96.4 million installment on the loan. Its next payment is due Thursday. It’s unclear how big the payment is and whether the loan agreement assumes any grace period.
State Food & Grain Corp. was set up in 2012 to export Ukrainian grain. It got a 15-year loan from Exim Bank to purchase corn domestically and ship it to China.
Fertilizer Supply Rises as Farmers Pull Back from Pricey Inputs
Fertilizer shortage concerns have eased as Russian material increasingly moves to the market and farmers curtail use. The North American summer price reset is ongoing, with the UAN fill program coming out higher than expected on July 19 at $400 a short ton, only 10% below prompt levels. Russian fertilizer exports are pivoting to Brazil from the EU.
Russian Fertilizers Flow in Sanctions Exemption
Russia continues to export fertilizers, adding supply to a softening market. Still, Russia’s long-term supply outlook remains unclear. Supported by low-cost natural gas, Russian ammonia and urea capacity is set to expand over 10 years by 4.9 million and 5.5 million metric tons, respectively. US sanctions explicitly allow for Russian fertilizer trade, but it remains unclear whether financiers and engineering and technical providers will participate in the country’s expansion plans. Russia is the world’s largest nitrogen exporter, shipping 4.4 million tons of ammonia, 7 million of urea and 1.8 million of urea ammonium nitrate (UAN).
Russia’s export quotas ran through May and resume in July. Nitrogen’s 2H quotas are 1.9 million tons of ammonium nitrate, 5.1 million of urea and 1.36 million of UAN.
US Barge Shipments of Grain Fell 2% Last Week: USDA
Shipments along the Mississippi, Illinois, Ohio and Arkansas rivers declined in the week ending July 16 from the previous week, according to the USDA’s weekly grain transportation report.
- Barge shipments of corn fell 15% from the previous week
- Soybean shipments up 25% w/w
US Grain Movement by Rail Fell 15.5% Week Ended July 13: USDA
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.