Global Ag News for Mar 31.22

TODAY – USDA ACRES/STOCKS REPORT

Wheat prices overnight are up 4 3/4 in SRW, up 3 1/4 in HRW, up 9 in HRS; Corn is down 3/4; Soybeans down 2 3/4; Soymeal up $0.10; Soyoil down 0.82.

For the week so far wheat prices are down 74 3/4 in SRW, down 66 1/2 in HRW, down 40 1/4 in HRS; Corn is down 16 1/4; Soybeans down 48 1/2; Soymeal down $1.39; Soyoil down 3.20. For the month to date wheat prices are up 98 in SRW, up 94 3/4 in HRW, up 73 in HRS; Corn is up 46 1/2; Soybeans up 24 1/2; Soymeal up $27.80; Soyoil down 1.12.

Year-To-Date nearby futures are up 33% in SRW, up 30% in HRW, up 8% in HRS; Corn is up 24%; Soybeans up 25%; Soymeal up 15%; Soyoil up 27%.

Chinese Ag futures (MAY 22) Soybeans up 118 yuan; Soymeal up 13; Soyoil up 100; Palm oil up 34; Corn up 4 — Malaysian palm oil prices overnight were down 179 ringgit (-3.02%) at 5751.

There were no changes in registrations. Registration total: 2,185 SRW Wheat contracts; 1 Oats; 15 Corn; 132 Soybeans; 98 Soyoil; 0 Soymeal; 154 HRW Wheat.

Preliminary changes in futures Open Interest as of March 30 were: SRW Wheat up 2,448 contracts, HRW Wheat up 811, Corn down 2,239, Soybeans down 4,767, Soymeal up 911, Soyoil up 2,507.

Northern Plains Forecast: Mostly dry Thursday. Isolated showers Friday. Mostly dry Saturday. Isolated showers Sunday. Temperatures near to below normal through Thursday, near normal Friday-Sunday. 6-to-10-day outlook: Isolated showers Monday-Wednesday. Mostly dry Thursday-Friday. Temperatures near to above normal Monday-Tuesday, near to below normal Wednesday-Thursday, near to above normal Friday.

Central/Southern Plains Forecast: Mostly dry Thursday. Isolated showers Friday. Mostly dry Saturday. Isolated showers Sunday. Temperatures near to below normal Wednesday-Friday, near normal Saturday, above normal Sunday. 6-to-10-day outlook: Isolated showers Monday-Tuesday. Mostly dry Wednesday-Friday. Temperatures near to above normal Monday-Wednesday, near to below normal Thursday-Friday.

Western Midwest Forecast: Isolated showers Thursday. Mostly dry Friday. Isolated showers Saturday-Sunday. Temperatures near to above normal Wednesday, below normal Thursday-Friday, near to below normal Saturday-Sunday.

Eastern Midwest Forecast: Scattered showers Thursday. Isolated showers Friday-Sunday. Temperatures above normal Wednesday, near normal Thursday, below normal Friday-Sunday. 6-to-10-day outlook: Isolated to scattered showers Monday-Friday. Temperatures near to below normal Monday, near to above normal Tuesday-Wednesday, near to below normal Thursday-Friday.

Argentina Grains & Oilseeds Forecast: Cordoba, Santa Fe, Northern Buenos Aires Forecast: Mostly dry through Sunday. Temperatures below to well below normal through Friday, below normal Saturday-Sunday. La Pampa, Southern Buenos Aires Forecast: Mostly dry through Sunday. Temperatures below to well below normal through Friday, near to below normal Saturday-Sunday.

The player sheet for 3/30 had funds: net buyers of 7,000 contracts of  SRW wheat, buyers of 10,500 corn, buyers of 9,000 soybeans, buyers of 4,500 soymeal, and  buyers of 2,500 soyoil.

TENDERS

• SOYBEAN SALE: The U.S. Department of Agriculture confirmed private sales of 128,000 tonnes of U.S. soybeans to Mexico for shipment in the 2022/23 marketing year.
• WHEAT SALE: The Taiwan Flour Millers’ Association purchased an estimated 40,000 tonnes of milling wheat to be sourced from the United States in a tender which closed on Wednesday
• WHEAT TENDER: Bangladesh’s state grains buyer has issued an international tender to purchase 50,000 tonnes of milling wheat
• FEED BARLEY SALE: Jordan’s state grain buyer has purchased about 60,000 tonnes of animal feed barley to be sourced from optional origins in an international tender which closed on Wednesday
• SOFT WHEAT, BARLEY SALE: Tunisia’s state grains agency is believed to have purchased around 125,000 tonnes of soft wheat and 100,000 tonnes of animal feed barley in international tenders which closed on Wednesday
• WHEAT BUYING BEGINS: Algeria’s state grains agency OAIC has started buying optional-origin milling wheat in an international tender with initial purchase prices reported to be low

PENDING TENDERS

• FEED GRAIN TENDER: Iranian state-owned animal feed importer SLAL has issued an international tender to purchase up to 60,000 tonnes of animal feed barley, 60,000 tonnes of feed corn and 60,000 tonnes of soymeal
• SOYOIL TENDER: Iran’s state purchasing agency GTC has issued an international tender to purchase about 30,000 tonnes of soyoil
• WHEAT TENDER: Iraq’s state grains buyer has extended the deadline for the validity of price offers in a tender to buy a nominal 50,000 tonnes of hard milling wheat
• BARLEY TENDER: A buyer in Qatar has issued a tender to buy an estimated 105,000 tonnes of animal feed barley, traders said
• WHEAT TENDER: The Taiwan Flour Millers’ Association issued an international tender to purchase 40,000 tonnes of grade 1 milling wheat to be sourced from the United States
• SUNFLOWER OIL TENDER: Turkey’s state grain board TMO has issued an international tender to purchase and import about 18,000 tonnes of crude sunflower oil
• WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy 120,000 tonnes of milling wheat which can be sourced from optional origins
• WHEAT TENDER: Bangladesh’s state grains buyer has issued an international tender to purchase 50,000 tonnes of milling wheat

DOE: U.S. Ethanol Stocks Rise 1.5% to 26.529M Bbl

Cofco wins 25-year concession for new Brazil port terminal

Cofco International said on Wednesday it had won a 25-year concession for an agriculture bulk terminal at Brazil’s Port of Santos, expanding its footprint in the world’s top soybean exporter.

The STS11 terminal will be fully operational in 2026, Cofco said in a statement. The terminal will help expand Cofco’s port capacity in Brazil to 14 million tonnes.

Active vegetation density recoveries increase Brazil’s second corn yield potential – Refinitiv Commodities Research

2021/22 BRAZIL CORN PRODUCTION: 112.1 [103.8–119.5] MILLION TONS, UP 2% FROM LAST UPDATE

2021/22 Brazil total corn production is increased by 2% to 112.1 [103.8–119.5] million tons, mostly thanks to rapid second corn sowings and active vegetation density recoveries throughout major producing regions such as the Central-West and the South. Our current median estimate is 1.9 million tons below the USDA World Agricultural Outlook Board (WAOB)’s 114 million tons, which assumes total corn sowings at 20.8 million hectares and national level yield of 5.48 tons per hectare (tph) (vs. Refinitiv Ag Research’s 20.9 million hectares and 5.35 tph, respectively). Brazil’s agriculture state agency (CONAB) has lately pegged corn production and area at 112.3 million tons and 21.1 million hectares, respectively. As of 26 March, Brazil’s first corn is 47.1% harvested according to the latest CONAB crop progress report (28 March), largely in line with last year’s pace. The second corn is 98.2% planted nationally, well ahead of last year’s 91.7%, mainly thanks to rapid soybean harvest pace (+6% compared to last year). The latest short-term outlook by Refinitiv Weather Research analysts suggests continued moderately wet conditions on the horizon through the next 10 days, which should help early crop developments while not much hindering planting/harvest activities.

Brazil soybean production unchanged amid rapid/stable harvest progress

2021/22 BRAZIL SOYBEAN PRODUCTION: 125.9 [118.7–129.6] MILLION TONS, UNCHANGED FROM LAST UPDATE

2021/22 Brazil soybean production is unchanged at 125.9 [118.7–129.6] million tons, amid rapid/stable harvest progress throughout major producing regions despite recent wet conditions. Our current median estimate is 1.1 million tons below the USDA’s World Agricultural Outlook Board (WAOB)’s 127 million tons, which assumes total soy sowings at 40.6 million hectares and national level yield of 3.13 tons per hectare (tph) (vs. Refinitiv Ag Research’s 40.5 million hectares and 3.11 tph, respectively). Brazil’s agriculture state agency (CONAB) has lately pegged soybean production and area at 122.8 million tons and 40.7 million hectares, respectively. As of 26 March, Brazil’s soybeans are 75.8% harvested nationally according to the latest CONAB crop progress report (28 March), well ahead of last year’s pace (69.8%). The latest short-term outlook by Refinitiv Weather Research analysts suggests continued moderately wet conditions on the horizon through the next 10 days, which might hinder any remaining harvest activities.

U.S. winter wheat production unchanged amid alarmingly high drought risks in the South – Refinitiv Commodities Research

2022/23 U.S. WINTER WHEAT PRODUCTION: 37.9 [34.6–41.2] MILLION TONS, UNCHANGED FROM LAST UPDATE

Outlooks for 2022/23 U.S. winter wheat planted area and production are unchanged at 35.1 million acres and 37.9 [34.6–41.2] million tons, respectively. In Winter Wheat and Canola Seedings (12 January), USDA set its initial estimate of 2022/23 plantings at 34.4 million acres, up 2% from last season.

As the winter wheat crop begins to green up and moves into booting/heading stages in coming weeks, potential cold weather outbreaks may lower yield potential and will thus need to be monitored closely. Forecasted temperature anomalies for the first half of April are expected to be generally warmer than normal across much of the HRW regions through the eastern SRW belt. Both EC/GFS model guidance indicates a favorable warm-up next week, relieving spring freeze concerns at the moment. While short-term outlooks appear to be optimistic, uncertainty remains for the long term. If a warm late March/early April was followed by sudden cold temperatures, spring freeze risk on the winter wheat crop could be elevated due to crops being pulled out of dormancy earlier than expected. Any wheat at this time of the year reaching the jointing stage could be at risk if overnight temperatures were to drop below 24 °F for two hours or more. The result could be moderate to severe freeze damage as the growing point of the crop emerges from the soil exposing it to cold temperatures.

USDA’s latest monthly crop progress (29 March) and many local reports continue to discuss the risks of low soil moisture in the Southern Plains and Southwest U.S. Kansas’ topsoil moisture supplies are reported to be 52% short or very short, and nearly 80% of the whole Oklahoma region is currently in the severe/extreme drought category. The similar goes for the key crop areas of northern Texas (where over 70% of the state’s total wheat is grown), which has barely received any rain since the beginning of the planting season. Most eastern U.S. regions are expected to pick up some degree of rainfall later this week and next week, but the western portion of the Southern Plains and Southwest U.S. will likely continue to miss out on precipitation, warranting close attention.

Ukraine 2022 grain/oilseeds crop forecast

Ukraine’s 2022 grain harvest could fall by 55% to 38.9 million tonnes due to a sharp decrease in sowing and harvesting areas caused by the Russian invasion, the APK-Inform agriculture consultancy said.

India extends stock limit on oilseeds, edible oils by six months

India has extended a stock limit on oilseeds and edible oils by six months to Dec. 31, 2022, in an attempt to check hoarding and arrest rising prices, the government said late Wednesday.

India is the world’s biggest importer of edible oils and prices of cooking oils have risen sharply because of a rally in global prices.

For edible oils, the limit would be three tonnes for retailers and 50 tonnes for wholesaler and it would be applicable until the year end, an official statement said. Oilseed processors could hold stocks up to 90 days of their daily production capacity.

The stock limit was earlier applicable until June 30.

While India buys palm oil from Indonesia and Malaysia, it mainly imports soyoil from Argentina and Brazil and sunflower oil from Russia and Ukraine.

Romania in Talks to Aid Ukraine Grain Exports: Defense Minister

Romania is facilitating a transfer mechanism from Ukraine to Constanta port at the Black Sea to aid its neighbor find new routes for its grain exports after the Russian invasion, Defense Minister Vasile Dincu says.

“The talks are being held not only among governments, but also between companies and we’re facilitating this transfer mechanism from Ukraine to Constanta,” Dincu tells reporters on Thursday.

“This may help Ukraine get funding for its survival. Romania has no issues with grains supply and of course this could benefit the Constanta port as well. And after all, even if there is no benefit, we’re still supporting a neighbor in need.”

France to Open Up Fallow Land for Crops to Aid Food Security

France will allow farmers to cultivate land they had declared fallow for the 2022 growing season, as the war in Ukraine threatens global food security, its agriculture ministry said Thursday in an emailed statement.

• Growers can plant spring crops including proteins, oilseeds and grains, or use the area for grazing
• Fallow land represents about 300k hectares (741k acres) in France, about 1% of total agricultural area
• Objective is to aid European food and feed supplies, as well as global reserves, particularly for grain import-dependent countries in Mediterranean and Africa

Ukraine has stocks of 13 mln T соrn, 3.8 mln T wheat -deputy minister

Ukraine, a major global grain grower and exporter, has stocks of 13 million tonnes of соrn and 3.8 million of wheat, but cannot export the grain as seaports are blocked due to the Russian invasion, deputy agriculture minister Taras Vysotskiy said on Thursday. More than 90% of Ukraine’s grain exports leave the country through its Black Sea ports.

Malaysia’s March 1-31 Palm Oil Exports 1.29m Tons: Amspec

Shipments rise 6.7% m/m from 1,210,993 tons exported during Feb. 1-28, according to AmSpec Agri.

China allocates another $315 mln for growth of winter wheat crop

China has allocated another 2 billion yuan ($315.10 million) to facilitate the growth of its winter wheat crop, the country’s finance ministry said on Thursday.

The money will be used to help the crop to grow stronger in 11 main production provinces, the Ministry of Finance said in a statement on its website.

The move came after heavy rains last fall delayed winter wheat planting in many production regions, which could hurt yield and output of the crop. (Full Story)

China has allocated 5 billion yuan in total from its central finance system to stablise winter wheat output this crop year, according to the statement.

Fertilizer Buyers Paying Record Prices as War Squelches Supply

Urea and phosphate keep climbing in New Orleans (NOLA), Brazil, Europe and the Middle East. Tampa ammonia closed at a record $1,625 a metric ton (mt) for April, up 43% from March. India’s tender program could resume in April at record urea prices. Potash jumped in NOLA and Brazil to almost 2x last month’s Chinese annual contract.

Fertilizer Prices Keep Climbing

Most major fertilizers are trading at or near record prices, with two major phosphate raw materials — sulfur and ammonia — pushing higher in the past week. Second-quarter sulfur was concluded at $481 a long ton, up 71% from 1Q and marking the highest price since 2008. Tampa ammonia rose 43% in April, or $490/mt, to $1,625 from March’s $1,135, which was already a record.

Russia says it will boost export quotas for nitrogen, complex fertilizers

Russia plans to increase its export quotas for nitrogen and complex fertilizers, its economy ministry said in a statement on Thursday.

Russia is a major producer of potash, phosphate and nitrogen containing fertilizers – key crop and soil nutrients. It produces more than 50 million tonnes a year of them, 13% of the global total, and exports to Asia and Latin America.

In November, Moscow decided to limit exports of nitrogen fertilizers and complex nitrogen-containing fertilizers for Dec 1-May 31 to help curb any further increase in food prices amid higher gas prices.

The quotas will be raised by 231,000 tonnes for nitrogen fertilizers and by 466,000 tonnes for complex fertilizers, the ministry said in a statement.

The measure will help to increase exports of these products and at the same time secure sufficient amount of the crop nutrients for domestic farmers, it added.

Russia is one of the world’s largest wheat exporters, it competes mainly with the European Union and Ukraine in this market. Its farmers are now sowing spring grains for the 2022 total crop amid favorable weather.

The previous export quota for nitrogen fertilizers was 5.9 million tonnes and the one for complex nitrogen-containing fertilizers was 5.35 million tonnes.

Sulfur Skyrockets 71%, Signaling Food Prices May Keep Rising

Fertilizer prices continue to soar as Russia’s invasion of Ukraine puts a big portion of the world’s supply at risk, adding to concerns over accelerating global food inflation.

Second-quarter Tampa sulfur prices hit the second-highest level ever, and may quickly hit the 2008 record, according to Alexis Maxwell, an analyst at Bloomberg’s Green Markets. Prices climbed 71% from first quarter, driven by outages in the U.S. and uncertainty about the international supply, according to Green Markets.

Sulfur is used in production of phosphate, one of the most popular fertilizers.

Investors worry that potential sanctions on fertilizers from Russia, a big, low-cost shipper of major crop nutrients, could disrupt global trade. Russia has urged domestic fertilizer producers to reduce exports, further stoking fears of shortages. At the same time, prices for staple crops like wheat, corn and soybeans are soaring, with war in one of the world’s breadbaskets threatening to push millions more into hunger. Rising costs for farm inputs like fertilizer could further send the price of food skyrocketing.

High Oil Prices Accelerate Biofuel Uptake in France: BNEF

• Gasoline prices are up 33% year-on-year
• E10 and E85 now make up over 60% of gasoline sales

Surging oil prices are leading French drivers to opt for cleaner gasoline in search of cheaper fuel.

The cost of gasoline in France is 33% higher than this time last year, with the standard blends SP98 and SP95 surpassing 2 euros per liter. While the prices of higher ethanol blends E10 (10% ethanol) and E85 (up to 85% ethanol) have also risen, so too have their discounts to standard gasoline.

As such, their share of overall petrol sales has steadily risen. Combined, E10 and E85 now account for more than 60% of sales. E10 is by far the most popular blend. Its discount to SP98 and SP95 is just a few cents per liter, but it is widely available and compatible with standard engines.

Conversely, E85 requires a flex-fuel vehicle or a conversion kit. Yet, a rising number of French drivers are investing in such technologies, as tax breaks make E85 half the price of other blends. Availability is also improving — 30% of stations now offer the blend. TotalEnergies has the most E85 stations in France, having added 80 stations in the last year.

France’s Rouen Grain Exports Down 74% in Week to March 30: Port

Grain shipments from France’s Rouen port totaled 68,175 tons in the week to March 30, compared with 262,078 tons a week earlier, according to an emailed report.

Russia Introduces Sunflower Oil Export Quota: Interfax

Russia to introduce export quota of 1.5m tons of sunflower oil from April 15 through August 31, Interfax reports, citing the Agriculture Ministry.

Russia will halts exports of sunflower seed, rapeseed from April 1

Ukraine war may result in 25 pc supply shortage of sunflower oil in India: Report

The ongoing war in Ukraine, which is the world’s largest sunflower grower, is likely to result in at least 25 per cent or 4-6 lakh tonnes shortage of crude sunflower oil supplies in India next fiscal, according to a report.

Around 70 per cent of crude sunflower oil comes to India from Ukraine and about 20 per cent from Russia.

Balance sheets of domestic edible oil processors are healthy enough to withstand supply disruptions caused by the Russian invasion of Ukraine but will have a bearing on the production planning of domestic edible oil processors, rating agency Crisil said on Thursday.

Refined sunflower oil constitutes 10 per cent of the country’s consumption of 230-240 lakh tonnes of edible oils annually and almost 60 per cent of the demand is met through imports.

As much as 90 per cent of the country’s annual crude sunflower oil requirement of 22-23 lakh tonnes come from Ukraine (70 per cent), Russia (20 per cent) and the rest from Argentina and other countries.

“Supply disruptions caused by the Russia-Ukraine conflict could lead to a supply shortfall of at least 4-6 lakh tonnes of crude sunflower oil for India next fiscal,” Crisil said.

Cumulatively, Ukraine and Russia export 100 lakh tonnes of crude sunflower oil annually, with Argentina at the third place with 7 lakh tonnes in outward shipments, Crisil said in a report.

According to the report, the problem is that Russia’s major banks are severed from the SWIFT system after it invaded Ukraine and the resultant sanctions imposed by the US and European nations. Although trading of food products with Russia has not been prohibited, trade settlement has become difficult, leading to supply disruptions.

Domestic edible oil processors typically maintain raw material inventory of 30-45 days, which should help them tide over the supply shock in the immediate term. However, supply and prices will start hurting if the conflict, and the attendant trade disruption, prolongs.

A protracted trade disruption will push edible oil processors to source more crude sunflower oil from Argentina. This, however, will not be enough to offset the material shortfall in volume from Ukraine and Russia. To reduce the resultant idle capacity, the processors may choose to refine other edible oils, the report said.

The supply disruption also comes against the backdrop of a 25 per cent on-year increase in the average price of refined edible oils this fiscal while prices of crude edible oils have gone up because of supply side factors.

For example, crude soybean oil has soared following a bad crop in Brazil while crude palm oil climbed due to a weak output in Indonesia and Malaysia, the world’s top producers.

Soybean oil and crude palm oil constitute more than 75 per cent of the country’s edible oil imports and any further price increase of raw material will goad processors to raise additional debt to meet incremental working capital requirements.

Bird Flu Is Spreading in the U.S., Threatening Chicken Exports

A deadly strain of bird flu that’s been raising egg prices ahead of Easter was discovered in five new U.S. states Wednesday, and the virus increasingly is threatening American poultry exports.

Highly pathogenic avian influenza was discovered at a commercial poultry farm in Johnston County, North Carolina, and in backyard flocks in Massachusetts, North Dakota, Ohio and Wyoming, the U.S. Department of Agriculture said in a release. Since mid-January, it’s been found in 23 states in flocks totaling nearly 17 million birds.

Countries have been temporarily banning imports from U.S. states where bird flu is present as a result, according to the USDA.

Top buyers such as Mexico, China and Cuba could bring in less poultry following the discovery in North Carolina, a major producer of chicken and turkeys, said Jim Sumner, president of the USA Poultry & Egg Export Council in Tucker, Georgia.

Bird flu will also make eggs relatively scarce for the Easter holiday, with production still below levels seen prior to the Covid-19 pandemic, according to a report from agriculture lender CoBank.