Global Ag News for May 18.22

TODAY

Wheat prices overnight are down 26 1/4 in SRW, down 30 3/4 in HRW, down 26 1/2 in HRS; Corn is down 1/2; Soybeans up 2 3/4; Soymeal up $0.24; Soyoil down 0.41.

For the week so far wheat prices are up 73 3/4 in SRW, up 55 in HRW, up 42 in HRS; Corn is up 19; Soybeans up 34 1/4; Soymeal up $0.49; Soyoil down 0.71. For the month to date wheat prices are up 207 1/2 in SRW, up 231 1/4 in HRW, up 201 in HRS; Corn is down 13 1/4; Soybeans down 4; Soymeal down $18.10; Soyoil down 1.10.

Year-To-Date nearby futures are up 62% in SRW, up 67% in HRW, up 39% in HRS; Corn is up 35%; Soybeans up 26%; Soymeal up 1%; Soyoil up 48%.

Chinese Ag futures (SEP 22) Soybeans down 3 yuan; Soymeal up 15; Soyoil down 6; Palm oil up 18; Corn up 3 — Malaysian palm oil prices overnight were up 20 ringgit (+0.33%) at 6136.

There were changes in registrations (-36 Corn, -24 Soymeal). Registration total: 1,010 SRW Wheat contracts; 23 Oats; 26 Corn; 0 Soybeans; 98 Soyoil; 6 Soymeal; 150 HRW Wheat.

Preliminary changes in futures Open Interest as of May 17 were: SRW Wheat up 6,777 contracts, HRW Wheat up 531, Corn up 4,696, Soybeans up 5,890, Soymeal up 1,314, Soyoil up 827.

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

Central/Southern Plains Forecast: Periods of isolated to scattered showers through Saturday. Temperatures above to well above normal through Thursday, below normal northwest and above normal southeast Friday, near to well below normal Saturday. 6-to-10-day outlook: Mostly dry Sunday. Isolated showers Monday-Thursday. Temperatures near to below normal Sunday-Monday, near to above normal Tuesday-Thursday.

Western Midwest Forecast: Isolated to scattered showers through Saturday. Temperatures above normal Wednesday-Thursday, below normal northwest and above normal southeast Friday, below to well below normal Saturday.

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

Canadian Prairies Forecast:  Isolated showers Wednesday. Temperatures near to below normal Wednesday. Scattered showers Thursday-Friday. Some snow in Manitoba. Temperatures below to well below normal Thursday-Friday. Outlook: Mostly dry Saturday-Sunday. Isolated showers Monday-Wednesday. Temperatures below to well below normal Saturday-Sunday, near to below normal Monday-Wednesday.

Brazil Grains & Oilseeds Forecast: Rio Grande do Sul and Parana: Isolated showers Wednesday-Thursday. Mostly dry Friday. Temperatures below to well below normal through Friday. Mato Grosso, MGDS and southern Goias: Mostly dry Tuesday-Friday. Temperatures below to well below normal Wednesday-Friday.

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

The player sheet for 5/17 had funds: net buyers of 13,000 contracts of  SRW wheat, sellers of 5,500 corn, buyers of 10,000 soybeans, sellers of 500 soymeal, and  buyers of 3,000 soyoil.

TENDERS

• WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy a total of 174,744 tonnes of food-quality wheat from the United States, Canada and Australia in regular tenders that will close on Thursday.
• WHEAT TENDER: Bangladesh’s state grains buyer has issued an international tender to purchase 50,000 tonnes of milling wheat
• CORN PURCHASE: Taiwan’s MFIG purchasing group bought about 55,000 tonnes of animal feed corn to expected to be sourced from South Africa in an international tender which closed on Wednesday
• FAILED WHEAT TENDER: Jordan’s state grain buyer is believed to have made no purchase in an international tender to buy 120,000 tonnes of milling wheat which closed on Tuesday, traders said

PENDING TENDERS

• BARLEY TENDER: Jordan’s state grains buyer has issued a new international tender to purchase 120,000 tonnes of animal feed barley
• FEED WHEAT, BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said that it will seek 70,000 tonnes of feed wheat and 40,000 tonnes of feed barley to be loaded by Aug. 31 and arrive in Japan by Oct. 27, via a simultaneous buy and sell (SBS) auction that will be held on May 18.
• RICE TENDER: Egypt’s state grains buyer the General Authority for Supply Commodities (GASC) is seeking at least 25,000 tonnes of white rice in a tender-practice on the account of the Holding Company for Food Industries. GASC set the arrival date for July 1-31 and Aug. 1-31. Offers should be submitted on May 19.
• WHEAT TENDER: Bangladesh’s state grains buyer has issued an international tender to purchase 50,000 tonnes of milling wheat
• WHEAT TENDER: A government agency in Pakistan has issued an international tender to purchase and import 500,000 tonnes of wheat

LIVESTOCK SURVEY: US Cattle on Feed Placements Seen Down 4.3%

Brazil soy exports seen reaching 11.483 mln T in May – Anec

• BRAZIL SOY EXPORTS SEEN REACHING 11.483 MILLION TNS IN MAY VERSUS 10.615 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC
• BRAZIL SOY MEAL EXPORTS SEEN REACHING 2.009 MILLION TNS IN MAY VERSUS 1.919 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC
• BRAZIL CORN EXPORTS SEEN REACHING 1.264 MILLION TNS IN MAY VERSUS 927,209 TNS FORECAST IN PREVIOUS WEEK – ANEC
• BRAZIL WHEAT EXPORTS SEEN REACHING 104,720 TNS IN MAY VERSUS 103,719 TNS FORECAST IN PREVIOUS WEEK – ANEC

EU Soft-Wheat Exports Fall 4% in Season Through May 15

Soft-wheat shipments during the season that began July 1 totaled 22.9m tons as of May 15, versus 23.9m tons in a similar period a year earlier, the European Commission said Tuesday on its website.

• NOTE: Figures for the prior season include trade for the U.K. until Dec. 31, 2020, when the country departed the EU customs union
• Top soft-wheat destinations are Algeria (3.5m tons), Egypt (2.36m tons) and China (2.13m tons)
• EU barley exports total 6.7m tons, versus 7.07m tons a year earlier
• EU corn imports came to 14.2m tons, versus 13.4m tons a year earlier

Ukraine Seen Harvesting About 50m Tons of Grain This Year: UAC

The total includes 19.8m tons of wheat and 21.5m tons of corn, according to a presentation by Sergey Feofilov, director general of UkrAgroConsult, at the GrainCom conference in Geneva.

• Barley crop seen at 6.1m tons
• NOTE: Last week, the USDA estimated Ukraine’s 2022-23 wheat output at 21.5m tons and corn at 19.5m tons
• Compares with 33m tons and 42.1m tons the prior year, respectively

Egypt in Talks With Ukraine Over How to Receive Pending Wheat

Ukraine transporting the contracted wheat by rail to Romania is one of possibilities being considered, Egyptian Supply Minister Aly El-Moselhy tells reporters.

• North African nation won’t cancel its pending Ukraine wheat contracts
• Egypt is awaiting final contract for agreement with India to buy 500,000 tons of its wheat
• Egypt has bought 2m tons of domestic wheat so far this season

Next Year Will be Worse for Ukraine Farmers Than 2022: Harveast

Ukraine’s agricultural production may fall 30%-40% y/y this year due to the war, but 2023 will be “very bad,” said Dmitriy Skorniakov, CEO of Harveast Agri Holding in Ukraine.

• “Sooner or later, we’ll find some solution with logistics” for exports, but sales could be later than normal, he said at the Grain Comconference in Geneva
  • For example, wheat that would usually be sold in July might only be cleared by year’s end
  • Corn sales that usually took place from October-March might get delayed to December-June
• That means a huge “money gap” for farmers, and they’ll also need to pay for inputs sooner, as seed and input companies are less willing to sell the products on loan
• For Harveast, 80k hectares out of its 120k total are near Mariupol, which is now occupied
  • Russian forces have also taken about 25k tons of the company’s grain, as well as machinery, he said

Russia to Start Wheat-Price Index, Followed by Futures: Izvestia

Russia’s National Mercantile Exchange will start publishing new index of local wheat prices on May 18th, Izvestia reported.

• The index will be calculated in rubles based on weighted-average price for a ton of fourth-grade wheat delivered to Novorossiysk without VAT
• Moscow Exchange, which owns National Mercantile, plans to launch cash-settled wheat futures based on the new index in July-August, NAMEX chief Nikita Zakharov told Izvestia
• NOTE: Deliverable wheat futures on Moscow Exchange launched in December 2020 have so far failed to attract liquidity

Oilseed Meal Exports From India Jump 38% M/m in April: Group

Shipments climbed to 333,972 tons in April from 242,043 tons a month earlier, the Solvent Extractors’ Association of India said in an emailed statement Wednesday.

• NOTE: Exports totaled 303,705 tons in April last year
• Rapeseed meal shipments 229,207 tons in April vs 93,984 tons in March
  • Exports of rapeseed meal are likely to increase on higher local crushing
• Soymeal exports 25,265 tons vs 23,872 tons
• Rice bran extract sales 53,742 tons vs 91,416 tons
• Castorseed meal exports 25,758 tons vs 32,771 tons

CROP TOUR: Dry Wheat in North Central Kansas Lags 2021 Yields

Hard red winter wheat yield potential averaged ~38.4 bu/acre along a route in north central Kansas, according to five field samples taken on day one of the Wheat Quality Council’s annual crop tour.

• That compares with last year’s average of 59.9 bu/acre for the same region: tour data
• NOTE: Statewide estimates for first day of tour will be unveiled later Tuesday; final projected yields for Kansas, the top U.S. grower, will be released Thursday
• USDA estimates Kansas will yield 39 bu/acre, down from 52 bu/acre last year
• NOTE: Kansas and nearby states are being hit hard by drought; USDA expects national hard red winter wheat production to be the lowest since 1963

Russia to Extend Fertilizer Export Quotas at Least Till Dec: IFX

Russian government will extend fertilizer export quotas from June 1 until at least December 2022, Deputy Prime Minister Victoria Abramchenko said at a meeting, according to Interfax.

NOTE: April 27, Putin Ordered Fertilizer Export Quotas Extended to Aug. 31

Indian Wheat Export Changes ‘Not Good’; EU Crop Dropping: Panel

For India’s wheat exports, “the policy changes are not good for anyone,” Gaurav Jain, analyst at AgPulse Analytica, said Wednesday at the GrainCom conference in Geneva.

• NOTE: In a government order dated May 13, India restricted wheat exports to avoid a domestic supply squeeze
• Biggest loser from the shifts are Indian farmers
• Traders have also been stuck with wheat

ON EU WHEAT:

• Analyst Noel Fryer says EU may only be able to export about 30m tons of wheat in the coming season, about steady with the current year
• That compares to a USDA outlook for 36m tons
• Bloc’s production potential has declined since USDA’s report
• Drought is also becoming a worry for corn supplies, particularly given Ukraine’s export constraints

Russia Wheat Exports Seen at 32m Tons, Trailing USDA: AgResource

Russia’s invasion of Ukraine, coupled with the drought in South America, has provided the biggest supply shock to the grain markets in a century, Dan Basse, president of consultant AgResource, says at the GrainCom conference in Geneva.

• End-users of crops are short and have been caught “flat-footed”
• “Today we do not have a food crisis, but we’re on the doorstep of it”
• The war is rerouting world agriculture trade
  • Expected to spur record large EU wheat exports, as well as record U.S. corn and soybean shipments
  • Grain from Russia is still leaking into the market, but banking and freight woes imply future difficulty
• Sees Russia wheat exports at 32m tons in 2022-23, below USDA estimate of 39m tons, as trade challenges grow
  • Ukraine shipments estimated at 7.5m tons
• Paris wheat futures may start outperforming Chicago due to tremendous demand expected for EU’s next harvest
• “Each week the war goes on, it becomes more problematic in terms of logistics and supply going forward”
  • Once it ends, there will be a dramatic correction in grain prices
  • Even so, it would take two to three years of big harvests to buoy major world exporters’ grain stocks-to-use ratios back to comfortable levels
• If there were a dire drought in the US, there’s a small chance even they may seek to limit exports

Fertilizer Application Accelerates, But Delays Pressure Prices

US urea, phosphate and potash prices remain pressured due to the delayed spring season, which finally took off with improved weather allowing the start of heavy application. The late start may shorten the application window for ammonia. India tendered for 1.7 million tons of urea and their entrance marks a likely 2Q urea floor price.

Urea Firms as India Begins Season With a Big Take

India purchased a large volume of urea at lower prices, setting a likely 2Q price floor. India’s 1.7 million metric tons (mt) is the first take as the world’s largest urea buyer imports in the 2Q-4Q period. Tender prices were $716.5 per mt cost-and-freight (CFR) West Coast India and $721 per mt CFR East Coast. Urea prices had drifted lower in 2Q on the delayed US season, but this tender signals a floor for 2Q. We expect India to buy 8-10 million mt in 2022 and see the nearly 2.1 million mt imports in January-February as delayed 4Q21 demand. The urea market since firmed with Egypt selling 60k mt at $700 per mt for end-May shipment and Southeast Asia buying at $745 per mt.

Use of wheat as silage due to insufficient supplies of corn

The harvesting of unripe green wheat for silage, which recently raised concerns, was due to shortages of corn silage at a few cow breeding farms in North China’s plain area, a dairy industry official said on Tuesday.

Chen Shaohu, deputy secretary-general of the Dairy Association of China, said that the storage of corn silage had been insufficient due to severe autumn floods last year, so a few cow breeders had to plant or buy wheat silage for emergency use.

“Most of the breeding farms rotated crops to plant wheat on the land designated for supporting forage use. Some farms bought unripe wheat planted nearby, but not on a big scale. The actual purchasing price wasn’t as high as indicated in the online speculation,” Chen said.

Videos circulated on social media showed green wheat fields being destroyed. Some explained in the videos that the wheat was harvested ahead of schedule and sold at a higher price as wheat silage.

Chen said relevant cow breeding farms have stopped purchasing unripe wheat, which is supposed to be harvested in June, for producing staple food rather than consumed as silage.

Given silage shortages faced by some farms, the association is connecting breeding farms with forage enterprises to strengthen provisions.

“The shortage of silage for large-scale dairy farms in the area is about 400,000 metric tons, which is not large and can be resolved,” Chen said.

“This kind of emergency use of wheat silage happened in previous years and the amount was also small,” he said.

“However, considering high public concerns over ensuring national food security, the association has issued a proposal to the entire industry to stop using wheat as silage,” he added.

Lack of precipitation lowers 2022/23 EU27+UK wheat production prospects

Persistent dryness across Europe over the past few months lowers 2022/23 EU27+UK wheat yield potential. Total wheat production is reduced by 2.4% to 153.4 [147.3-159.5] million tons, including 138.5 mmt in EU-27 and 14.9 mmt in UK.

Past two months featured unfavorable dry conditions across Europe. Most of the continent received below normal precipitation, reducing soil moisture and raising drought risk for this season harvest, especially in the major wheat producing countries (e.g. France and Germany). On the other hand, spring rain replenished soil moisture and improved crop conditions in Spain. Though satellite imagery shows that crops are mostly in satisfactory conditions at the moment, recent and upcoming dry weather indicates possible wheat yield losses across Europe.

Most Europe experienced above average temperatures and continuation of dry conditions in the past two weeks with exception of northern Ireland and UK, Scandinavia and southern Italy where small amount of precipitation was observed.

In the upcoming week most of Europe will likely see rainfall, however dryness concern remains in the south-western countries (e.g., France, Spain and Italy) where little/no rain is expected. Heat wave will move through Europe over the next few days heading south. Next week cooler weather is probable mainly in central, eastern and northern Europe. Our latest long-term weather outlook calls for cold and wet summer in western Europe which, if verifies, would significantly improve conditions for crops in those regions. On the other hand, central and eastern Europe will likely experience hot temperatures. We will closely monitor weather, satellite imagery and soil moisture data in the upcoming months and update our forecasts accordingly.

Malaysia Opens Up Food Imports to Secure Supplies: Bernama

Malaysia will allow all parties to import food to ensure adequate supplies in the country, Bernama reported, citing Prime Minister Ismail Sabri Yaakob.

• The government has agreed to not impose the Approved Permit requirements for food imports with immediate effect, the state news agency said. The decision was made at a Cabinet meeting the premier chaired Wednesday, the report said.
• “Prior to this, meat and beef required Approved Permits, from today this will be no more and anyone can import any food from foreign countries to ensure there is enough supply,” the report quoted Ismail as saying. The Ministry of Agriculture and Food Industries will announce further details on the matter, the report said.
• Malaysia joins other governments in taking steps to secure their own supplies with food costs surging to all-time highs as the war in Ukraine chokes crop supplies, piling inflationary pain on consumers and worsening a global hunger crisis. Indonesia banned its palm oil exports, India restricted wheat exports, while Serbia and Kazakhstan imposed quotas on grain shipments.

India Allows Use of More Feedstocks For Biofuels to Boost Output

India’s cabinet Wednesday approved amendments to the national biofuel policy to allow additional feedstocks for boosting production and reducing the country’s dependence crude oil imports, the government said in a statement.

• Policy changes include:
• Advancing ethanol blending target of 20% with gasoline to 2025-26 from 2030
• Allowing export of biofuels in specific cases
• To promote biofuels production through plants in Special Economic Zones and Export Oriented Units