Global Ag News for May 3.23

TOP HEADLINES

SovEcon Trims Russian Wheat Export Estimate, But Still at Record

Russian wheat exports in the current season are now seen at 44.4m tons, versus a previous estimate of 44.5m tons, research firm SovEcon says in a note.

• “The wheat-export estimate has been cut due to sluggish sales, as Russian traders struggle to compete with other suppliers because of an unofficial price floor” of $275/ton
• Exports in the 2023-24 season are estimated at 43m tons, the second-highest on record after the current year

FUTURES & WEATHER

Wheat prices overnight are down 1 1/2 in SRW, unchanged in HRW, up 1/4 in HRS; Corn is down 6 3/4; Soybeans down 8; Soymeal down $2.50; Soyoil down 0.27.

For the week so far wheat prices are down 26 in SRW, down 36 in HRW, down 30 in HRS; Corn is down 11 3/4; Soybeans down 16 1/2; Soymeal down $7.00; Soyoil down 0.15.

For the month to date wheat prices are down 26 in SRW, down 36 in HRW, down 30 in HRS; Corn is down 11 3/4; Soybeans down 16 1/2; Soymeal down $7.00; Soyoil down 0.15.

Year-To-Date nearby futures are down 24.7% in SRW, down 13.1% in HRW, down 19.2% in HRS; Corn is down 7.3%; Soybeans down 5.7%; Soymeal down 10.6%; Soyoil down 19.5%.

Chinese Ag futures (JUL 23) Soybeans down 56 yuan; Soymeal up 21; Soyoil down 88; Palm oil down 118; Corn down 30 — Malaysian palm oil prices overnight were down 10 ringgit (-0.29%) at 3411.

China markets are closed for holiday.

There were changes in registrations (-2 Oats). Registration total: 2,389 SRW Wheat contracts; 52 Oats; 11 Corn; 0 Soybeans; 848 Soyoil; 1 Soymeal; 45 HRW Wheat.

Preliminary changes in futures Open Interest as of May 2 were: SRW Wheat up 1,551 contracts, HRW Wheat up 2,785, Corn up 3,593, Soybeans up 849, Soymeal up 1,463, Soyoil up 302.

Northern Plains: Temperatures continue to rise in the Northern Plains this week, favoring some planting. Scattered showers will likely move in Friday and continue in waves through next week, offering some increase in soil moisture for some of the dry areas

Central/Southern Plains: Temperatures are on the rise for the Central and Southern Plains this week. After some favorable rains last week, this week should offer periods of showers as well as next week, though less organized in nature. Still, the additional rains will be beneficial to wheat and early corn and soybeans.

Midwest: A big storm system continues to produce showers near the Great Lakes through Wednesday and may be mixed with snow during the overnight periods. Some cold air will remain in place early this week with a gradual rise later in the week and improving conditions for planting. Another system moves through this weekend into next week with showers being possible.

Delta: Wet conditions in the Delta are mostly favorable for developing crops, though somewhat difficult for planting. Scattered showers will move through later this week and again over the weekend with another couple of systems moving through.

Argentina: A front moved through Argentina on Sunday with scattered showers. The rains are helpful for conditioning soils for winter wheat planting, but more are needed. However, it should remain drier–unfavorable for winter wheat but favorable for corn and soybean harvest.

The player sheet for 5/2 had funds: net sellers of 3,500 contracts of SRW wheat, sellers of 3,000 corn, sellers of 5,000 soybeans, sellers of 3,000 soymeal, and  sellers of 1,000 soyoil.

TENDERS

• WHEAT PURCHASE: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), said it bought 655,000 tonnes of wheat in an international tender for shipment June 10-30 and July 1-20, 2023. The purchase comprised 420,000 tonnes for shipment June 10-30 and 235,000 tonnes for shipment July 1-20. Most traders estimated the bulk of the purchase was sold at an FOB price of $260 per tonne, while some cargoes were believed to have been sold at $250 per tonne. Origins likely to have been purchased include Russian and Romanian cargoes, traders added.
• WHEAT PURCHASE: Jordan’s state grains buyer purchased about 60,000 tonnes of hard milling wheat to be sourced from optional origins in an international tender.

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
• BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase up to 120,000 tonnes of animal feed barley.
• WHEAT TENDER: The Taiwan Flour Millers’ Association issued an international tender to purchase an estimated 51,925 tonnes of grade 1 milling wheat to be sourced from the United States.

TODAY

ETHANOL: US Weekly Production Survey Before EIA Report

Output and stockpile projections for the week ending April 28 are based on seven analyst estimates compiled by Bloomberg.

• Production seen lower than last week at 963k b/d
• Stockpile avg est. 24.423m bbl vs 24.306m a week ago

Brazil April Agriculture by Volume: MDIC

Following is a summary of key Brazilian agriculture and mining exports by volume, from the Brazilian Trade Ministry.

• Soybean exports rose 25% in April from a year ago
• Corn exports fell 32% y/y
• Beef exports fell 30% y/y

Brazil 2022/23 soybean crop seen at 157.7 mln tns – StoneX

• BRAZIL 2022/2023 SOYBEAN CROP SEEN AT 157.7 MILLION TNS VERSUS 157.7 MILLION TNS IN PREVIOUS – STONEX
• BRAZIL 2022/2023 TOTAL CORN CROP SEEN AT 131.59 MILLION TNS VERSUS 131.34 MILLION TNS IN PREVIOUS – STONEX
• BRAZIL 2022/2023 SECOND CORN CROP SEEN AT 100.8 MILLION TNS VERSUS 100.54 MILLION TNS IN PREVIOUS – STONEX

WHEAT/CEPEA: Prices drop steeply in April; monthly averages are the lowest since 2020

Wheat values finished April in a downward trend in Brazil, and monthly price averages are the lowest since 2020. Price decreases are attributed to the slow pace of trades. While producers are focused on crop activities, many purchasers are away from trades, claiming to have stocks and waiting for new price drops. In Paraná, Seab/Deral indicates that planting activities have totaled 10% of the area up to April 24.

Cepea surveys show that, in real terms, the monthly price average in Rio Grande do Sul in April was BRL 1,416.02 per ton, the smallest since March 2020. In Santa Catarina, the average was BRL 1,570.72 per ton, the lowest since April 2020. In Paraná, the price average in April was BRL 1,594.88 per ton, the lowest since September/20. In São Paulo, the average was BRL 1,709.66 per ton last month, the smallest since July 2021.

Between April 20-28, the prices paid to wheat moved down 3.62% in Rio Grande do Sul, 4.34% in Paraná and 4.26% in Santa Catarina. In the wholesale market (deals between processors), values decreased 4.67% in RS, 1.81% in PR, 1.73% in São Paulo and 1.86% in SC. Dollar quotes dropped 1.2% in the same period, closing at BRL 4.989 on April 28.

According to data from Secex, imports totaled 212.8 thousand tons up to the third week of April, against 511.7 thousand tons in the entire month of April/22. Exports, in turn, amounted 230.9 thousand tons, against 147.2 thousand tons in April last year.

BY-PRODUCTS – Data from Abitrigo (Brazilian Association of Wheat) indicate that the wheat processing in Brazil totaled 12.56 million tons in 2022, generating 8.47 million tons of flour. Paraná continues as the most important state that process wheat, with circa 30% of the total in Brazil.

Top palm oil buyer India’s April imports fall to 14-month low – dealers

India’s palm oil imports in April fell 30% from a month earlier to hit a 14-month low, as its premium over rival soft oils prompted price-sensitive buyers to shift to sunflower oil and soyoil, five dealers told Reuters.

The surprise big drop in palm oil imports by India, the world’s biggest importer of vegetable oils, could increase Malaysian stocks and weigh on palm oil prices FCPOc3 trading near a seven-month low, they said.

It will also likely make it difficult for top producer Indonesia to increase exports after easing restrictions imposed on the shipments earlier this year, traders said.

India’s palm oil imports fell to 508,000 tonnes last month, down from 728,530 tonnes imported in March, according to average estimates from the dealers.

Imports fell as buyers shifted to rival oils due to the price difference, said Rajesh Patel, managing partner at GGN Research.

The average monthly imports in the first five months of 2022/23 marketing year that started on Nov. 1 were 879,000 tonnes, according to the Solvent Extractors’ Association of India, which is likely to publish its April import data by mid-May.

Sunflower oil substituted palm oil as it was available at the same price or at a discount to palm oil, Patel said.

Sunoil usually commands premium over palm oil and was trading at a premium of as high as $500 per tonne in 2022.

“We were expecting palm oil imports of 650,000-700,000 tonnes for April but shipments fell to 500,000 tonnes,” said a New Delhi-based dealer with a global trading house.

Indian buyers have opted to cancel 75,000 tonnes of palm oil purchases for the first time in many years and switch to rival soft oils for May shipments, including sunflower oil and soyoil.

Sunoil imports in April surged 69% from a month ago to 250,000 tonnes, while soyoil imports edged up 2.3% at 258,925 tonnes, the dealers said.

Palm oil has been losing market share in India at a rapid pace and will need to trade at a discount to soft oils to become bring back dominance, said Sandeep Bajoria, CEO Sunvin Group, a vegetable oil brokerage and consultancy firm.

The oil’s share in India’s total imports fell below 50% in April for the first time since July 2022, dealers said.

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

EU Soft-Wheat Exports Rise 9.4% Y/y in Season Through April 30

The European Union’s soft-wheat exports in the season that began July 1 reached 25.7m tons as of April 30, compared with 23.5m tons in a similar period a year earlier, the European Commission said on its website.

• Leading destinations include Morocco (4.08m tons), Algeria (3.62m tons) and Nigeria (2.24m tons)
• EU barley exports were 5.27m tons, versus 6.72m tons
• Corn imports stand at 23m tons, versus 13.5m tons

Oklahoma wheat crop seen at 54.3 million bushels -industry tour

A group of Oklahoma crop experts on Tuesday projected Oklahoma’s drought-shortened 2023 winter wheat harvest at 54.3 million bushels, with an average yield of 24.6 bushels per acre, following an annual tour of the state, said Mike Schulte, executive director of the Oklahoma Wheat Commission.

The estimates were based on field assessments conducted by Oklahoma State University Extension educators as well as private crop consultants and area agronomists, said Schulte.

However, the average wheat production estimate among members surveyed at a meeting of the Oklahoma Grain & Feed Association, where the tour numbers were released, was much lower, at 40.7 million bushels. That would be the state’s lowest since 1955.

Oklahoma is the No. 2 producing state behind Kansas of hard red winter wheat, used to make bread, normally the largest U.S. wheat class in terms of production.

EU sets Ukraine grain import restrictions in 5 countries until June 5

The European Commission said on Tuesday it set restrictions until June 5 on imports of Ukrainian wheat, maize, rapeseed and sunflower seed to ease the excess supply of these grains in Bulgaria, Hungary, Poland, Romania and Slovakia.

The EU executive arm said that during that period, Ukrainian wheat, maize, rapeseed and sunflower seed can be sold to any other of country of the 27-nation bloc, except to the five countries, which had complained the cheaper Ukrainian grain was making domestic production unprofitable.

The EU had earlier liberalised all imports from Ukraine to help the country’s efforts to fend off the Russian invasion. The five countries became transit routes for Ukrainian grain that could not be exported through the country’s Black Sea ports because the war.

“The products can continue to circulate in or transit via these five Member States by means of a common customs transit procedure or go to a country or territory outside the EU,” the Commission said.

With the Commission restrictions in place, Bulgaria, Hungary, Poland and Slovakia agreed to lift their unilateral bans for entry of Ukrainian wheat, maize, rapeseed and sunflower seed they had imposed earlier to protect their farmers.

The Commission’s measures also include a support package worth 100 million euros ($110.25 million) for local farmers in the most affected five EU countries.

The Commission, which is responsible for trade policy in the European Union, said it could extend the grain import restrictions beyond 5 June if exceptional conditions continue.

SLUGGISH U.S. EXPORTS DEMAND FUELS BEARISH CORN MARKET SENTIMENT – Refinitiv Commodities Research

UNITED  STATES: April is usually a high month for corn exports from the United States, but this year, the exports have been hitting record lows. China, the most important buyer of U.S. corn, has not met the expected demand this season and has started canceling corn shipments from the U.S. In April 2023, U.S. corn sales to China totaled 631,000 tons, almost three times lower than the 1.6 million tons sold a year ago and around four times lower than the 2.5 million tons sold in April 2021. The upcoming Brazilian corn harvest also adds more pressure on the decreased U.S. corn export demand.

In April, the U.S. corn exports totaled a preliminary 4.4 million tons, a decrease from the 4.5 million in March and the lowest in nine years for the month. As of April 27, U.S. corn exports in 2022/23 are at 23.9 million tons, 31.9% below the average. The U.S. outstanding sales totaled 14.8 million tons of corn as of April 20, 20% below the 5-year average.

This season is experiencing one of the slowest U.S. export paces in the last five years. Additionally, flooding in Upper Mississippi might bring more issues to U.S. grain exports in the upcoming weeks. Based on these market indicators and the export pace, Refinitivs 2022/23 corn exports at 45.6 million tons, 1.4 million tons below USDA’s April estimate.

BRAZIL: Brazil’s corn exports from March to June are meager as the country focuses on soybeans. The latest lineup report (released on April 28) shows 228 thousand tons of corn scheduled to deliver in April and 167 thousand tons to deliver in May. Despite lingering warm and dry conditions in Brazil Central-West, Brazil’s 2022/23 harvest ised at 124.6 million tons, 9.1 million tons above last season. As of May 1, Brazil has exported 1,031 thousand tons at the start of the 2022/23 export season, a record-high start. Refinitiv maintains the 2022/23 Brazil corn export at 50.3 million tons and 0.3 million tons above USDA’s April Wasde estimate.

ARGENTINA:  As of April 28, Refinitiv’s trade flow has tracked only 3.9 million tons in the Argentinian 2022/23 corn export season, around three times below the average of 10.8 million tons by this point and the lowest figure in recent years. Refinitiv keeps decreasing Argentina’s 2022/23 corn production estimates to 35.1 million tons, 30% below its output in the previous season. Drought in key production areas and harvest delays continue affecting Argentina’s corn supply. As a result, Refinitiv lowered 2022/23 Argentina corn exports to 23.1 million tons, 4.6 million tons below the last estimate, and 1.9 million tons below the April WASDE estimate.

US Agriculture Sentiment Rises in April: Purdue Univ.

The Purdue University/CME Group’s agricultural sentiment index increased to 123 points in April from 117 in March, according to a survey of 400 agricultural producers.

• Current conditions component improved by 3 points from March
• Future expectations up by 7 points

 

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