Global Ag News for June 21.23

TOP HEADLINES

German 2023 Grain-Harvest Estimate Cut on Drought: DRV

Germany’s grains harvest is now seen at 42m tons, agricultural cooperatives group DRV said Wednesday in a report.

• That’s down from a May estimate for 43.2m tons
• Latest 2023 output estimates include:
  • Wheat at 21.9m tons, down from 22.5m tons in 2022
  • Corn at 3.74m tons, down from 3.84m tons in 2022
  • Barley at 10.8m tons, down from 11.2m tons in 2022
• Rapeseed estimate cut by about 200k tons to 4.1m tons
• “In mid-May, some areas were only accessible to a limited extent due to heavy rainfall, but now crops across Germany are now suffering from massive drought stress,” according to DRV market expert Guido Seedler
• Eastern Germany is particularly affected

FUTURES & WEATHER

Wheat prices overnight are up 15 3/4 in SRW, up 16 in HRW, up 13 3/4 in HRS; Corn is up 16 1/4; Soybeans up 10 1/4; Soymeal up $12.40; Soyoil down 3.28.

For the week so far wheat prices are up 21 in SRW, up 9 1/2 in HRW, up 7 1/4 in HRS; Corn is up 14 3/4; Soybeans up 9; Soymeal up $11.70; Soyoil down 3.56.

For the month to date wheat prices are up 116 1/2 in SRW, up 65 1/4 in HRW, up 83 1/4 in HRS; Corn is up 92; Soybeans up 206 1/2; Soymeal up $50.00; Soyoil up 8.23.

Year-To-Date nearby futures are down 10.4% in SRW, down 4.2% in HRW, down 8.5% in HRS; Corn is down 2.9%; Soybeans down 2.0%; Soymeal down 11.1%; Soyoil down 12.3%.

Chinese Ag futures (SEP 23) Soybeans up 66 yuan; Soymeal up 26; Soyoil down 144; Palm oil down 162; Corn unchanged — Malaysian palm oil prices overnight were down 111 ringgit (-2.98%) at 3616.

There were no changes in registrations. Registration total: 2,389 SRW Wheat contracts; 2 Oats; 0 Corn; 0 Soybeans; 1,088 Soyoil; 11 Soymeal; 97 HRW Wheat.

Preliminary changes in futures Open Interest as of June 20 were: SRW Wheat down 11,504 contracts, HRW Wheat down 5,442, Corn up 4,433, Soybeans up 4,852, Soymeal down 5,008, Soyoil down 5,510.

Northern Plains: A system went through with only isolated showers over the holiday weekend, and missed some of the driest areas in the eastern Dakotas. A slow-moving front took its place however, and should provide some strings of showers throughout the week until a system goes through on Friday and Saturday that is forecast to bring more widespread showers and thunderstorms. Ahead of this front, temperatures are hot with many areas eclipsing 90 degrees F. If showers disappoint, crop conditions will continue to decline and drought will expand. Temperatures should be more variable after the system moves through this weekend.

Central/Southern Plains: Areas of showers and thunderstorms have moved through over the last several days, especially in a band between Colorado and Oklahoma, where heavier rain and severe weather have caused some flooding and damage. Heat has built in over Texas and has expanded north, a consistent feature until a system moves through this weekend. Temperatures will be more variable after its passage, but Texas will still remain hot. More rounds of showers and thunderstorms are forecast until that system moves through, and may even continue next week as well, most likely farther north. Conditions for developing corn and soybeans is dependent on rainfall frequency. Those areas with consistent rainfall are more able to withstand the heat stress.

Midwest: A system clipped western and southern areas of the region over the long holiday weekend. Some areas of good rain fell, but were not widespread. Some areas ended up dry and are seeing temperatures increase into the 90s this week. The system continues to spin over the Southeast and though uncertain, may spread some showers into eastern areas later this week. Following that, a system will move through with more widespread showers and thunderstorms this weekend into early next week, with potential for continued showers for a couple of days and another system late next week or weekend to do something similar. Areas missing out are seeing stress increase for both corn and soybeans, though not all areas are dealing with harsh conditions. The coming rainfall is forecast to only be a stop-gap in the poorer conditions, but the pattern does favor better chances for rain after this week.

Delta: Several disturbances brought heavy showers and severe weather through the region over the last week. Though damage has been reported, the increased soil moisture is turning around dryness concerns. Though less active for the next week, there will be some additional chances for showers and thunderstorms in the region.

Canadian Prairies: Another system moved into the region over the weekend and brought heavy rain to parts of Alberta and Saskatchewan again. The system will be in place through Thursday, though showers will become more isolated each day this week. Soil moisture is still reported to be low across much of the region, leaving some areas in desperate need of rainfall. Temperatures will be more pleasant as this system passes through, keeping stresses down for those drier areas, however.

The player sheet for 6/20 had funds: net buyers of 1,500 contracts of SRW wheat, sellers of 1,000 corn, buyers of 1,000 soybeans, sellers of 2,500 soymeal, and  sellers of 1,500 soyoil.

TENDERS

• SOFT MILLING WHEAT PURCHASE: Algeria’s state grains agency OAIC has bought milling wheat in an international tender which closed on Monday
• CORN PURCHASE: Taiwan’s MFIG purchasing group bought about 65,000 metric tons of animal feed corn to expected to be sourced from Brazil in an international tender on Wednesda
• FOOD WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy a total of 92,529 tonnes of food-quality wheat from United States, Canada and Australia in a regular tender that will close on June 22.
• 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.
• NO PURCHASE IN CORN, SOYMEAL TENDERS: Iranian state-owned animal feed importer SLAL is believed to have made no purchases in tenders that closed on June 14 for 120,000 metric tons of animal feed corn and 120,000 metric tons of soymeal
• NO OFFERS IN FEED WHEAT, BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said it received no offers for feed-quality wheat or barley in a simultaneous buy and sell (SBS) auction that closed late on Monday. The ministry had sought 60,000 metric tons of feed wheat and 20,000 tons of feed barley to be loaded by Sept. 30 and arrive in Japan by Nov. 30.

PENDING TENDERS

• RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 62,200 metric tons of rice.

TODAY

USDA CROP PROGRESS: Corn Conditions 55% G/E, Soybeans 54%

Highlights from the report:

• Corn 55% G/E vs 61% last week, and 70% a year ago
• Corn emerged 96% vs 93% last week, and 94% a year ago
• Soybeans 54% G/E vs 59% last week, and 68% a year ago
• Soybeans emerged 92% vs 86% last week, and 81% a year ago
• Spring wheat 51% G/E vs 60% last week, and 59% a year ago
• Winter wheat harvest 15% vs 8% last week, and 23% a year ago
• Winter wheat 38% G/E vs 38% last week, and 30% a year ago
• Spring wheat emerged 98% vs 90% last week, and 87% a year ago
• Cotton 47% G/E vs 49% last week, and 40% a year ago
• Cotton planted 89% vs 81% last week, and 95% a year ago
• Sorghum 60% G/E vs 57% last week, and 46% a year ago
• Sorghum planted 73% vs 64% last week, and 78% a year ago

US Inspected 877k Tons of Corn for Export, 185k of Soybean

In week ending June 15, according to the USDA’s weekly inspections report.

• Corn: 877k tons vs 1,170k the previous wk, 1,193k a yr ago
• Soybeans: 185k tons vs 148k the previous wk, 430k a yr ago
• Wheat: 238k tons vs 248k the previous wk, 348k a yr ago

 US Modestly Boosts Biodiesel Quotas Despite Lobbying Frenzy

• Ethanol mandate would be limited to 15 billion gallons
• Biodiesel producers sought higher targets for fat-based fuel

The Biden administration is only modestly boosting quotas for plant-based diesel despite a fierce lobbying push by biofuel makers who complained the government is lowballing the industry’s potential production.

Under a final slate of biofuel quotas set to be released Wednesday, the Environmental Protection Agency will require at least 3.35 billion gallons of bio and renewable diesel be blended into US fuels in 2025 — up from an earlier proposal of 2.95 billion and last year’s 2.76 billion requirement, according to a person familiar with the matter who asked not to be named before a formal announcement.

For 2023 and 2024, the quotas for biomass-based diesel, generally made from soybean oil and other fats, would be set at 2.82 billion and 3.04 billion gallons respectively.

At the same time, the agency is paring the amount of conventional corn-based ethanol that could be used to fulfill quotas in 2024 and 2025 — down to 15 billion gallons for each of those years, from 15.25 billion as previously proposed.

Representatives of the EPA did not respond to requests for comment. Agency staff were briefing key stakeholders, including congressional offices, on the matter Wednesday afternoon.

Brazil Soymeal Exports Seen Reaching 2.37 Million Tns In June Versus 2.45 Million Tns Forecast In Previous Week

BRAZIL SOY EXPORTS SEEN REACHING UP TO 14.3 MILLION TNS IN JUNE VERSUS UP TO 14.76 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC

BRAZIL CORN EXPORTS SEEN REACHING 1.46 MILLION TNS IN JUNE VERSUS 1.59 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC

BRAZIL SOYMEAL EXPORTS SEEN REACHING 2.37 MILLION TNS IN JUNE VERSUS 2.45 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC

UN Urges for Ukraine Corridor Pace Pickup as Next Harvest Nears

The United Nations Secretary-General is “disappointed” in the slowing pace of ship inspections under the Black Sea grain deal and the exclusion of the port of Pivdennyi, a spokesperson says in emailed statement.

“The Secretary-General calls on the parties to accelerate operations and urges them to do their utmost to ensure the continuation of this vital agreement, which is up for renewal on 17 July,” according to Tuesday statement

1.3m metric tons of foodstuffs were shipped via the corridor in May versus peak of 4.2m tons in October

Russia Says UN Unable to Meet Ukraine Grain Deal Demands: Tass

UN representatives told Russia that they can’t do anything about Russia’s requirements for the framework of Black Sea grain deal, Tass reported, citing Deputy Foreign Minister Sergei Vershinin.

• During consultations, UN officials said there was no prospect of meeting Russia’s demands: Tass cites Vershinin
• Vershinin cited the resumption of the Togliatti-Odesa ammonia pipeline, the supply of agricultural machinery and spare parts, and the reconnection of Rosselkhozbank to SWIFT as Russia’s requirements under the agreement
• UN representative didn’t immediately reply to request for comment

EU 2022/23 soybean imports down 12%, rapeseed up 38% by June 18

European Union soybean imports in the 2022/23 season that started in July had reached 12.52 million metric tons by June 11, down 12% from 14.17 million a year earlier, data published by the European Commission showed on Tuesday.

EU rapeseed imports so far in 2022/23 had reached 7.24 million tons, up 38% compared with 5.26 million a year earlier.

Soymeal imports over the same period totaled 15.38 million tons, down 4% from 16.06 million the prior season, while palm oil imports stood at 3.86 million tons, down 20% versus 4.83 million a year ago.

EU Soft-Wheat Exports Rise 11% Y/y in Season Through June 18

The European Union’s soft-wheat exports in the season that began July 1 reached 30.4m tons as of June 18, compared with 27.3m tons in a similar period a year earlier, the European Commission said on its website.

• Leading destinations include Morocco (4.68 tons), Algeria (4.08m tons) and Nigeria (2.77m tons)
• EU barley exports were at 6.28m tons, compared with 6.94m tons
• Corn imports stand at 25.3m tons, against 16.1m tons

China to Be World’s Top Wheat Buyer With Australia Key Supplier

• Rain damage leaves a lot of harvest destined for animal feed
• Purchases should stay elevated if prices remain favorable

Add wheat to the extensive list of commodities markets dominated by Chinese buyers.

Already the world’s top importer of corn and soybeans, the nation is now poised to overtake Egypt and Turkey as the biggest buyer of wheat in the year through June, Chinese and US official data show. Purchases exceeded 12 million tons in the first 11 months of the marketing year, which runs through June. More than half of those cargoes were supplied by Australia.

Imports of the food staple accelerated above 1 million tons a month from October, before peaking at a record of 1.68 million tons in April. The US Department of Agriculture is forecasting another 12 million tons of Chinese imports in 2023-2024 after damage to the latest harvest left a lot of the crop suitable only for animal feed.

Heavy rains in Henan, China’s biggest growing region, have affected quality and pushed up prices of the higher-protein grain used to make bread and noodles. That should benefit wheat farmers and shippers around the world, while potentially hurting demand for other feed ingredients like corn and soybeans as more wheat gets swapped into livestock rations.

“Imports have been quite profitable and lots of cargoes were booked,” said Zhang Zhidong, senior analyst with Guolian Futures Co. “Domestic grains are expensive and stockpiles are falling, so there is the demand.”

Purchases should stay elevated if prices remain favorable and buyers need to replenish their reserves, said Rosa Wang, an analyst with consultancy Shanghai JC Intelligence Co.

India May Oilmeals Exports Fall to 436,596 Tons

India’s oilmeals exports fell to 436,596 tons in May from 493,448 tons in April, according to the Solvent Extractors’ Association of India.

• Rapeseed meal exports fell to 233,663 tons from 246,568 tons in April
• Soymeal exports fell to 114,225 tons from 177,243 tons in April
• Rice-bran extract exports rose to 42,398 tons from 37,479 tons in April
• Castorseed meal exports rose to 43,761 tons from 29,477 tons in April

Used Farm Equipment Pricing Up Y/y in June, Jefferies Says

A Jefferies tracker of used farm equipment shows continued strong pricing through 2023, with June prices remaining strong even with increasing listings, analyst Stephen Volkmann writes in a note.

• Large agriculture equipment pricing in June is up 13.8% y/y, while small agriculture equipment prices were up 11.4% y/y
• The analyst says the tight used market continues to support new sales at Deere and AGCO
• Adds that farm profitability remains solid despite lower crop prices as fertilizers in particular have come down recently

India Cumulative Monsoon Rainfall 33% Below Normal as of June 20

India has so far received 61.9 millimeters of rains during the current monsoon season, which runs from June through September, compared with a normal of 92.8 millimeters, according to data published by the India Meteorological Department on June 20.

• The southern peninsular region got 60% below normal rains
• Rainfall in the northwestern region was at 39% above normal
• Cumulative seasonal rainfall data is compiled by the IMD

Rhine river water level rising after rain but still too shallow

Water levels on the river Rhine in Germany have risen after heavy rain but in northern and central areas they remain too shallow for cargo vessels to sail fully loaded, commodity traders said on Wednesday.

Dry weather in June meant the river became too shallow for vessels to sail fully loaded and vessel operators imposed surcharges on freight rates to compensate for vessels sailing partly empty, increasing costs for cargo owners.

Heavy rain on Tuesday and Wednesday has raised water to normal levels in southern sections of the river, commodity traders said.

The Rhine is still too shallow for normal sailings at the chokepoint of Kaub and northern areas around Cologne and Duisburg. However, more rain in river catchment areas is forecast in coming days.

Water at the Kaub chokepoint is expected to return to normal levels allowing full vessel loads on Friday, German navigation authority WSV has forecast.

The Rhine is an important shipping route for commodities such as grains, minerals, coal and oil products, including heating oil. German companies faced supply bottlenecks and production problems in summer 2022 after a drought and heat-wave led to unusually low water levels on the Rhine.

Fertilizer Trade Shifts to Southern Hemisphere, Focus on Brazil

The US fertilizer market prices continue to fall 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 brought price relief as offers showed a decline of $50 a metric ton vs. the last tender. China continues to diversify its imported potash supplier base away from North America.

LIVESTOCK SURVEY: US Cattle on Feed Placements Seen Up 2%

May placements onto feedlots seen rising y/y to 1.91m head, according to a Bloomberg survey of ten analysts.

• Estimates range from 0.1% to 3.7% y/y change
• Feedlot herd as of June 1 seen falling by 3.3% y/y to 11.51m head
• Marketings seen rising 1.6% y/y

 

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