Written Commentary
TOP HEADLINES
Raizen Forecasts Ethanol Fuel Demand to Grow 75% Until 2035
Brazilian sugar and ethanol producer Raizen forecasts global demand for ethanol as a fuel will increase by 75% from 2002 until 2035, Paulo Neves, vice president of trading, said in a presentation to investors in Sao Paulo.
- Demand estimated to total 184b liters in 2035 from 105b in 2022
- Growth is connected to higher blend rates across the globe
- Sustainable Aviation Fuel (SAF), bioplastics and other industrial uses to generate additional demand, totaling 277b liters in 2035
- Raizen expects 25% of global SAF to use ethanol as feedstock by 2030, based on already announced projects
FUTURES & WEATHER
Wheat prices overnight are down 2 3/4 in SRW, down 6 in HRW, down 2 in HRS; Corn is down 3/4; Soybeans down 7 1/2; Soymeal down $2.20; Soyoil up 0.14.
For the week so far wheat prices are unchanged in SRW, down 14 3/4 in HRW, down 5 1/2 in HRS; Corn is up 32 3/4; Soybeans up 10 1/2; Soymeal down $8.80; Soyoil up 0.90.
For the month to date wheat prices are down 30 1/4 in SRW, up 30 in HRW, down 6 3/4 in HRS; Corn is up 1 1/2; Soybeans down 102 1/4; Soymeal down $32.40; Soyoil down 3.53.
Year-To-Date nearby futures are down 23.6% in SRW, down 8.8% in HRW, down 14.9% in HRS; Corn is down 13.4%; Soybeans down 13.3%; Soymeal down 16.3%; Soyoil down 24.5%.
Chinese Ag futures (JUL 23) Soybeans down 3 yuan; Soymeal down 24; Soyoil down 42; Palm oil down 18; Corn down 3 — Malaysian palm oil prices overnight were up 91 ringgit (+2.67%) at 3498.
There were no changes in registrations. Registration total: 2,389 SRW Wheat contracts; 2 Oats; 11 Corn; 0 Soybeans; 1,163 Soyoil; 47 Soymeal; 97 HRW Wheat.
Preliminary changes in futures Open Interest as of May 24 were: SRW Wheat up 5,032 contracts, HRW Wheat down 1,571, Corn up 12,912, Soybeans up 2,449, Soymeal up 3,276, Soyoil up 4,152.
Northern Plains: Isolated to scattered showers through Sunday. Temperatures above normal through Sunday. Outlook: Isolated to scattered showers Monday-Friday. Temperatures above normal Monday-Friday.
Central/Southern Plains: Isolated to scattered showers through Sunday, mostly west. Temperatures near to above normal through Sunday. Outlook: Isolated to scattered showers Monday-Friday. Temperatures near to above normal Monday-Friday.
Western Midwest: Mostly dry through Sunday. Temperatures near to above normal through Sunday.
Eastern Midwest: Mostly dry through Sunday. Temperatures near to above normal Wednesday, near to below normal Thursday-Friday, near to above normal Saturday-Sunday. Outlook: Isolated showers Monday-Friday. Temperatures above normal Monday-Friday.
Delta: Mostly dry through Sunday. Temperatures near normal through Sunday. Outlook: Isolated showers Monday-Friday. Temperatures near to above normal Monday-Friday.
Argentina: Cordoba, Santa Fe, Northern Buenos Aires: Isolated to scattered showers through Friday. Mostly dry Saturday-Sunday. Temperatures above normal through Friday, below normal Saturday-Sunday. La Pampa, Southern Buenos Aires: Isolated to scattered showers Thursday. Mostly dry Friday-Sunday. Temperatures above normal through Friday, below normal Saturday-Sunday.
The player sheet for 5/24 had funds: net sellers of 6,500 contracts of SRW wheat, buyers of 3,500 corn, sellers of 1,500 soybeans, sellers of 2,500 soymeal, and buyers of 2,000 soyoil.
TENDERS
- CORN PURCHASE: Taiwan’s MFIG purchasing group bought about 65,000 tonnes of animal feed corn to expected to be sourced from Brazil in an international tender on Wednesday.
PENDING TENDERS
- RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 43,500 tonnes of rice.
- WHEAT TENDER: The Taiwan Flour Millers’ Association has issued an international tender to purchase an estimated 56,000 tonnes of grade 1 milling wheat to be sourced from the United States.
TODAY
DOE: US Ethanol Stocks Fall 5.0% to 22.041M Bbl
According to the US Department of Energy’s weekly petroleum report.
- Analysts were expecting 22.978 mln bbl
- Plant production at 0.983m b/d, compared to survey avg of 0.997m
GRAIN EXPORT SURVEY: Corn, Soy, Wheat Sales Before USDA Report
Estimate ranges are based on a Bloomberg survey of six analysts; the USDA is scheduled to release its export sales report on Thursday for week ending May 18.
- Corn est. range -300k – 400k tons, with avg of 63k
- Soybean est. range -50k – 700k tons, with avg of 400k
Russia 2023 Wheat Crop Estimate Raised to 86m Tons: IKAR
IKAR raised its Russian 2023 wheat crop estimate to 86m tons from 84m tons, Dmitry Rylko, director of the Moscow-based consultant, said by email.
- IKAR boosts export potential to 44m tons from 42m tons
- Cites stronger crops in south, close to record-high spring-wheat sowing in central Russia and good rains across European Russia
- Key risks remaining include drought in eastern wheat belt, excessive rain in some areas, and hot and dry wind in south
EU Grain Output Set to Rise 4.6% From Last Year: Copa-Cogeca
This year’s EU-27 grain harvest is likely to total 277m tons, up 4.6% versus last year, farm lobby Copa-Cogeca says in a report.
- Increase is partly due to a 22% jump in corn output, as crops recover from last year’s drought
- Soft-wheat output is expected to rise 2.8%, while barley and durum-wheat decline
Russia 2023 Wheat Crop Estimate Raised to 86m Tons: IKAR
IKAR raised its Russian 2023 wheat crop estimate to 86m tons from 84m tons, Dmitry Rylko, director of the Moscow-based consultant, said by email.
- IKAR boosts export potential to 44m tons from 42m tons
- Cites stronger crops in south, close to record-high spring-wheat sowing in central Russia and good rains across European Russia
- Key risks remaining include drought in eastern wheat belt, excessive rain in some areas, and hot and dry wind in south
Argentina Rains Slow Soy Harvest, Improve Outlook for Next Crop
Rains are impeding soy and corn harvesting on the Pampas, the Buenos Aires Grain Exchange said in a weekly report.
- Soy harvest is 78% complete, lagging behind the average for this time of year by 14 ppts
- Meanwhile, rains are dampening parched farms, which will help planting of the upcoming wheat and barley crops
Palm Oil May Climb to 3,800-4,000 Ringgit in 2H on El Niño: MPOB
Palm oil may advance to 4,000 ringgit a ton or even higher in the second half of this year due to El Niño weather event, according to Ahmad Parveez Ghulam Kadir, director general of the Malaysian Palm Oil Board.
- Prices could average 4,200 ringgit this year, he told reporters in Kuala Lumpur
- NOTE: Palm futures have averaged 3,850 ringgit so far in 2023; prices hovered around 3,480 ringgit Thursday
- El Niño may have a bigger impact on palm oil production next year; the impact is not likely to be major this year
- Possible reduction in palm oil not likely to be more than 10% due to better planting material and improved labor
- Still, the actual impact on palm yields will depend on the severity and duration of the weather pattern
- El Niño’s impact on palm output won’t be as bad as 2016
- Palm oil production may drop by 1m to 3m tons in 2024 if El Niño is very bad and prolonged
- Output is still expected to increase to about 19m tons this year due to improvement in labor supply and better application of fertilizers
UN Working With Afreximbank on Russia Grain Exports: Reuters
The United Nations is working with the African Export-Import Bank to establish a platform to help process Russian grain and fertilizer transactions for exports to Africa, Reuters reported, citing UN trade official Rebeca Grynspan.
A UN spokesperson confirmed the comments when contacted by Bloomberg
Fertilizer Prices Fall as Suppliers Fight for Market Share
Lower commodity prices and competition between suppliers continue to weigh on the Brazil phosphate and potash markets ahead of the next buying season. With corn demand expected to improve in 3Q, nitrogen prices in the South American nation will likely stabilize despite strong inventories.
Downward Pressure Continues: Wednesday Whisper
Reports of limited purchasing interest and upcoming logistic problems combined with declining grain prices are depressing demand in Brazil. Urea prices dropped to $295-$305 a metric ton (mt) cost and freight (CFR), down from last week’s $315-$325/mt CFR, with unconfirmed reports of transactions at an even lower number. Ammonium sulfate slipped to a flat $170/mt CFR, down from the prior $175-$180/mt range. Downward pressure continues in the phosphate markets. MAP prices dropped sharply, to $470-$490/mt CFR from last week’s $520-$535/mt CFR range. Potash prices continue to decline, falling to $330-$370/mt CFR from last week’s $350-$390/mt CFR.
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