Global Ag News for Oct 12.22

TOP HEADLINES

Railroad Service in Question Despite Shipping Improvements

The availability of railroad services for transporting grains remains a focus for traders–with a large railroad union rejecting a tentative contract with freight railroads that was brokered by the White House last month. The American Farm Bureau Federation says there was a 19% rise in cars being filled with grains and shipped in 3Q versus last year. But there was a big jump in the amount of grain shipments overdue for arrival at their destination, with nearly 80,000 cars being late by over 11 days in the 3Q–an uptick of 1,800% from last year.

FUTURES & WEATHER

Wheat prices overnight are down 10 3/4 in SRW, down 7 in HRW, down 4 1/4 in HRS; Corn is down 1 3/4; Soybeans down 1; Soymeal down $0.12; Soyoil down 0.02.

For the week so far wheat prices are up 10 1/4 in SRW, up 15 in HRW, up 13 in HRS; Corn is up 8; Soybeans up 8 1/4; Soymeal up $0.41; Soyoil down 1.15.

For the month to date wheat prices are down 31 1/4 in SRW, down 7 3/4 in HRW, down 1 in HRS; Corn is up 13 3/4; Soybeans up 10 1/2; Soymeal up $1.80; Soyoil up 3.89.

Year-To-Date nearby futures are up 16% in SRW, up 23% in HRW, down 0% in HRS; Corn is up 17%; Soybeans up 3%; Soymeal down 0%; Soyoil up 23%.

Chinese Ag futures (JAN 23) Soybeans down 68 yuan; Soymeal down 18; Soyoil up 114; Palm oil up 28; Corn up 7 — Malaysian palm oil prices overnight were up 44 ringgit (+1.19%) at 3736.

There were no changes in registrations. Registration total: 3,084 SRW Wheat contracts; 0 Oats; 0 Corn; 5 Soybeans; 39 Soyoil; 247 Soymeal; 40 HRW Wheat.

Preliminary changes in futures Open Interest as of October 11 were: SRW Wheat up 4,895 contracts, HRW Wheat down 679, Corn up 4,922, Soybeans down 181, Soymeal up 1,069, Soyoil down 2,399.

Northern Plains Forecast: Isolated to scattered showers Wednesday. Mostly dry Thursday. Isolated showers Friday-Saturday. Temperatures near normal Wednesday-Thursday, near to above normal Friday-Saturday. Outlook: Mostly dry Sunday-Thursday. Temperatures near to below normal Sunday-Tuesday, near to above normal Wednesday-Thursday.

Central/Southern Plains Forecast: Isolated showers Wednesday. Mostly dry Thursday-Saturday. Temperatures near to above normal through Saturday. Outlook: Scattered showers south Sunday-Monday. Mostly dry Tuesday-Thursday. Temperatures near to above normal Sunday, near to below normal Monday-Wednesday, near normal Thursday.

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

Eastern Midwest Forecast: Scattered showers Wednesday. Isolated showers Thursday-Saturday, mostly north. Temperatures above normal Wednesday, near to below normal Thursday-Saturday. Outlook: Mostly dry Sunday. Lake-effect showers Monday-Tuesday. Mostly dry Wednesday-Thursday. Temperatures below normal Sunday-Thursday.

The player sheet for Oct. 11 had funds: net sellers of 27,500 contracts of SRW wheat, sellers of 3,500 corn, sellers of 1,250 soybeans, sellers of 0 soymeal, and  sellers of 1,000 soyoil.

TENDERS

• WHEAT PURCHASE: Algeria’s state grains agency OAIC bought about 400,000 to 480,000 tonnes of milling wheat in an international tender which closed on Tuesday, European traders said in initial assessments. Initial purchases reported were around $380 to $384 a tonne, cost and freight (c&f) included, they said. The wheat, though of optional origin, was likely to be largely sourced from Russia, although at least one shipment could be sourced from France, traders said.
• FEED BARLEY PURCHASE: Turkey’s state grain board TMO bought 495,000 tonnes of animal feed barley in an international tender for the same volume on Tuesday, European traders said. The tender is complete and no more purchases are expected. Purchases in TMO’s tenders are provisional, subject to final confirmation in the coming days and can be canceled completely.
• VEGETABLE OILS PURCHASE: Tunisian state agency Office National de l’Huile purchased an estimated 8,000 tonnes of crude degummed soyoil in a tender on Tuesday, European traders said. Trading house Aston was said to have sold the soyoil at an estimated $1,355 a tonne c&f for optional-origin supplies for delivery between Nov. 21 and Dec. 5. No purchase of rapeseed oil in the tender was reported.
• WHEAT TENDER PASSED: Jordan’s state grain buyer made no purchase in an international tender to buy 120,000 tonnes of milling wheat which closed on Tuesday, an official source said, confirming earlier reports from traders. A new tender was issued for 120,000 tonnes of wheat with the same shipment periods closing on Oct. 18, the official said. Four trading houses participated on Tuesday, CHS, Cargill, Ameropa and Buildcom, traders said.
• WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy 94,140 tonnes of food-quality wheat from the United States, Canada and Australia in regular tenders that will close on Oct. 13.
• 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 which closed on Wednesday, European traders said..

PENDING TENDERS

• WHEAT TENDER: The World Food Programme, a United Nations agency, issued an international tender to purchase about 100,000 tonnes of milling wheat, European traders said. The deadline for submission of price offers in the tender was Sept. 28, with an award expected on Sept. 30.
• RICE TENDER: South Korea’s Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 90,100 tonnes of rice sourced from the United States, Vietnam and other origins, European traders said. The deadline for submissions of price offers in the tender is Oct. 19, they said.

TODAY

USDA CROP PROGRESS: Corn Conditions 54% G/E, Soybeans 57%

Highlights from the report:

• Corn harvest 31% vs 20% last week, and 39% a year ago
• Corn 54% G/E vs 52% last week, and 60% a year ago
• Corn mature 87% vs 75% last week, and 93% a year ago
• Soybeans 57% G/E vs 55% last week, and 59% a year ago
• Soybean drop leaves 91% vs 81% last week, and 90% a year ago
• Soybeans harvested 44% vs 22% last week, and 47% a year ago
• Winter wheat planted 55% vs 40% last week, and 58% a year ago
• Winter wheat emerged 26% vs 15% last week, and 29% a year ago
• Cotton 30% G/E vs 31% last week, and 64% a year ago
• Cotton harvested 29% vs 22% last week, and 19% a year ago
• Sorghum 22% G/E vs 20% last week, and 55% a year ago

US Inspected 457k Tons of Corn for Export, 969k of Soybean

In week ending Oct. 6, according to the USDA’s weekly inspections report.

• Soybeans: 969k tons vs 585k the previous wk, 1,744k a yr ago
• Corn: 457k tons vs 673k the previous wk, 851k a yr ago
• Wheat: 614k tons vs 668k the previous wk, 447k a yr ago

US Corn, Soybean, Wheat Inspections by Country: Oct. 6

Following is a summary of USDA inspections for week ending Oct. 6 of corn, soybeans and wheat for export, from the Grain Inspection, Packers and Stockyards Administration, known as GIPSA.

• Soybeans for China-bound shipments made up 690k tons of the 969k total inspected
• Mexico was the top destination for corn inspections, Iraq led in wheat

China Boosts Forecast for Corn Harvest as Area Expands: CASDE

China has raised its forecast for corn production in the 2022-23 year, citing surveys that found an increase in planted area, according to the latest China Agricultural Supply and Demand Estimates.

• Corn production is now seen at 275.31 million tons, up 2.75 million tons from the forecast a month earlier, according to the report from the agriculture ministry
• The planted area estimate has been raised by 426,000 hectares to 42.95 million hectares
• Feed demand for corn is expanding as hog margins improve, while industrial consumption remains stable
• Forecasts for corn consumption and imports in 2022-23 stay unchanged from the previous month
• Still, the estimate for corn imports in 2021-22 was raised to 22 million tons, up 2 million tons from a month earlier
• Forecasts for soybean output, imports and consumption in the 2022-23 year remain unchanged from a month ago

Manitoba Says Harvest Still Two Weeks Behind Average Pace

79% of crops harvested, vs the five-year average of 89%, the province’s agriculture ministry says Tuesday in a report.

• Soybean yields range from 30 bu/acre to upwards of 60 bu/acre
• Some unharvested cereal grains have seen their quality downgraded due to recent wet weather
• “Many farms have completed harvest, while some have just started”

Argentina Soy to Yield Like Last Crop If Rains Come as Forecast

Argentine farmers can expect 2022-23 soybean plants to yield similarly to the 2021-22 crop if the forecast for a drought to ease over the next two quarters comes to fruition, according to a Buenos Aires Grain Exchange report.

• NOTE: Yields in 2021-22 were 2.8 metric tons/hectare, the third-lowest since 2014-15, according to grain exchange data
• NOTE: Soy planting starts at the end of October, with the bulk of fieldwork in November, December
• “If the climate forecast is right, we could register similar yields in central areas to those reported in 2021-22, while eastern fringes could see below-average yields”
• Rains are predicted to fall this month, laying down moisture for planting, though fieldwork may falter in November and December as La Nina persists and dryness returns
• January would see rains as La Nina fades, with precipitation returning to normal levels in February and March
• NOTE: The harvest starts at the end of March

USDA attaché sees Argentina 2022/23 soybean production at 49 mln T

Following are selected highlights from a report issued by the U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) post in Buenos Aires:

“According to the Argentine government, farmers sold a record volume of soybeans, more than 13.7 million metric tons (MMT) in September, after the government offered a special exchange rate for producers. As a result, exporters booked nearly 4 MMT in export declarations, with China as the principal destination. Post raises projected MY (marketing year) 2021/22 soybean exports to 5.5 MMT and reduces projected crush to 37.5 MMT. Soybean ending stocks are lowered to 5.7 MMT, the lowest level since MY 2012/13. MY 2022/23 production is lowered to 49 MMT, due to lower-than-anticipated area switching from corn to soybeans. However, farmers may still make changes if dry weather persists.”

Argentina Wheat Crop Seen Shrinking to Under 16m Tons: Rosario

Dryness and frosts have hit Argentina’s wheat crop hard, Cristian Russo, head of estimates at the Rosario Board of Trade, says in an audio message sent to Bloomberg News.

• Rosario analysts led by Russo currently see the wheat crop at 16m metric tons, down 3% from the most recent estimate in September of 16.5m metric tons
• “The situation is very ugly. We’ll continue to revise the estimate, and I think we’ll end up at less than 16 million”: Russo
• Publication of the Rosario Board of Trade’s monthly estimates report, which is normally the second Wednesday of the month, has been pushed back to Oct. 19

Russia Says It Will Continue Work Toward Agreement on Grain Deal

“We managed to agree on a grain deal in July — prices fell — so we believe that we need to continue working toward an agreement. This gets results,” Finance Minister Anton Siluanov says in a statement issued after G20 gathering.

• Siluanov says Russia is a “responsible supplier” of food and is prepared to boost exports in 2023
• NOTE: Ukraine’s crop-export deal is more than halfway through its initial 120-day run; officials have been holding talks over an extension of the agreement

Brazil Corn Exports Seen Reaching Up To 6.164 Million Tns In October – Anec

BRAZIL CORN EXPORTS SEEN REACHING UP TO 6.164 MILLION TNS IN OCTOBER VERSUS UP TO 5.5 MILLION TNS FORECAST IN PREVIOUS WEOCEK – ANEC

BRAZIL SOYMEAL EXPORTS SEEN REACHING 2.112 MILLION TNS IN OCTOBER VERSUS 1.804 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC

BRAZIL SOY EXPORTS SEEN REACHING UP TO 3.463 MILLION TNS IN OCTOBER VERSUS 3.110 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC

Brazil Oilseeds Crushers Group Abiove raises 2021/2022 Soybean Output View to 127 mln T – Reuters

BRAZIL OILSEEDS CRUSHERS GROUP ABIOVE RAISES 2021/2022 SOYBEAN OUTPUT VIEW TO 127 MILLION TNS FROM 126.9 MILLION TNS

ABIOVE RAISES SOYMEAL PRODUCTION FORECAST BY 100,000 TNS TO 37.5 MILLION TNS

ABIOVE MAINTAINS SOYOIL PRODUCTION FORECAST AT 9.9 MILLION TNS

ABIOVE MAINTAINS BRAZIL SOY EXPORT FORECAST FOR 2021/2022 CYCLE AT 77 MILLION TNS

ABIOVE RAISES SOYBEAN PROCESSING ESTIMATE BY 100,000 TNS TO 49 MILLION TNS

U.S. Gulf grain exports slowed by low Mississippi River

U.S. crop exports at Louisiana Gulf Coast terminals were at their lowest level in nine years for the first week of October, a period when export shipments typically accelerate, according to U.S. Department of Agriculture (USDA) data issued on Tuesday.

Low water on southern sections of the Mississippi River closed the major shipping waterway for days last week, halting the flow of grain barges from Midwest farms to the nation’s largest grain shipping port.

The ill-timed shipping disruption comes as farmers are busy harvesting corn and soybeans, their top cash crops, leaving exporters scrambling for supplies at the start of the busiest period of the year for overseas U.S. crop shipments.

In a weekly report, the USDA said 976,255 tonnes of corn, soybeans and wheat were inspected for export at the Mississippi River Gulf Coast in the week ended Oct. 6, the lowest for the first week of October in at least nine years and down 22% from the previous five-year average.

Two closed sections of the Mississippi River reopened over the weekend, allowing a backlog of stalled barges to begin moving again, but low water remains a concern for shippers amid a largely dry weather forecast.

Shippers are loading less grain per barge to prevent the vessels from getting stuck in the drought-parched river and towboats are hauling fewer barges per tow to navigate the narrowed channel.

Traders expect a slow start for exports in the fourth quarter, when a third or more of the year’s exports are typically loaded and shipped.

AgriMer Pegs French Wheat Reserves at Lowest in at Least 6 Years

French soft-wheat exports outside the EU are now seen at 10.1m tons in the 2022-23 season, crops office FranceAgriMer said in a report Wednesday.

• That’s up from a September outlook for 10m tons
• Total exports seen at 17.29m tons, up from 17.25m tons
• Stockpiles estimate cut to 2.13m, from 2.36m tons
• That would be the lowest in at least six seasons

BARLEY

• Non-EU exports seen at 2.5m tons, versus 2.6m tons
• Total exports seen at 5.44m, versus 5.55m tons
• Stockpiles estimate raised to 1.77m tons, from 1.66m tons

CORN

• Stockpiles for 2022-23 season are seen at 2.01m tons, FranceAgriMer says in its initial outlook
• That would be down from 2.23m tons the prior year

Europe Bulks Up on Foreign Corn After Drought Withers Harvest

• EU’s imports are running at double the rate seen last year
• Local shortfall has boosted feed costs for livestock farmers

The European Union is gobbling up foreign corn at double last year’s rate after summer drought withered the local harvest.

The bloc’s production of the staple grain — often fed to chickens, pigs and cows — sank 24% after blistering heat and dryness struck growers from France to Romania. The EU buys significant amounts of corn even in normal years, but the extreme weather has left it more reliant on imports to fill the gap and will put it ahead of China as the world’s top buyer.

EU corn imports since July 1 are running at 7.88 million tons, twice that of the prior season, government data showed Tuesday. Most of the cargoes are coming from Brazil, and the EU is also bringing in large amounts from Ukraine, where farmers are trying to clear supplies backlogged by the war.

The shortfall has boosted feed costs for livestock farmers, who are also grappling with surging expenses to heat barns and run tractors amid an energy crunch. Herds are dwindling, and the government expects beef, pork and poultry production to dip this year.

EU soybean imports by Oct. 9 at 3.12 mln T, rapeseed 1.78 mln T

European Union soybean imports in the 2022/23 season that started on July 1 had reached 3.12 million tonnes by Oct. 9, data published by the European Commission showed on Tuesday.

The total so far this season compared with 3.38 million tonnes by the same week in the previous 2021/22 season, the data showed.

EU rapeseed imports had reached 1.78 million tonnes, compared with 1.38 million tonnes a year earlier.

Soymeal imports over the same period totalled 4.21 million tonnes against 4.61 million tonnes the prior season, while palm oil imports stood at 923,130 tonnes versus 1.67 million tonnes in 2021/22.

EU sunflower oil imports, most of which usually come from Ukraine, were at 448,677 tonnes, against 390,193 tonnes a year earlier, the data showed.

EU 2022/23 soft wheat exports at 9.81 mln tonnes by Oct. 9

Soft wheat exports from the European Union in the 2022/23 season that started on July 1 had reached 9.81 million tonnes by Oct. 9, data published by the European Commission showed on Tuesday.

The total so far this season compared with 10.02 million tonnes by the same week in 2021/22, the data showed.

EU barley exports so far in 2022/23 totalled 2.25 million tonnes against 3.64 million a year ago, while EU maize imports were at 7.88 million tonnes, against a year-earlier 3.92 million.

Planet Labs Boosts Estimate for US Corn Crop Ahead of WASDE

US corn crop yield is forecast at 178.4 bu/acre, satellite-imaging firm Planet Labs PBC says in exclusive report.

• That’s above its September estimate of 177.6 bu/acre
  • Compares to USDA’s September corn yield est. of 172.5 bu/acre
  • A Bloomberg survey of analysts published Monday put yields at 172.1 bu/acre
• Planet lowers soybean yields est. to 50.9 bu/acre, below September estimate of 51.1 bu/acre
  • USDA September soybeans yield was 50.5 bu/acre
  • Bloomberg October survey est. at 50.6 bu/acre
• NOTE: Planet uses observations from satellite data, not optical imagery, to calculate soil water content, land surface temperature and vegetation depth
  • Final results are based on an aggregation of over a thousand smaller models and historical data for all individual counties in a state
• NOTE: USDA to release WASDE report Wednesday

UN Seeks Quicker Checks to Clear Ukraine Crop Exports: Reuters

Amir Abdulla, the UN’s coordinator for the Black Sea Grain Initiative, is proposing quicker, targeted inspections of outbound crop ships from Ukraine, Reuters reported Tuesday, citing an interview with him in Istanbul.

• Says there needs to be a change and hopes officials can negotiate a better way of conducting the inspections, as part of the ongoing talks to extend the grain-export deal that is due to expire in mid-November
• “There has to be a check, but that check need not be a full-blown inspection,” he says
• Abdulla is pushing for clearance from Russia, Ukraine and Turkey to double the number of four-party inspection teams to eight

Fertilizer Trade Could Stall on Strong Dollar, High Inventories

US nitrogen-fertilizer prices remain robust, fueled by ammonia-plant outages in Europe due to high natural gas costs. India is 4Q’s largest buyer of urea — a form of nitrogen — but high inventories and a strong dollar could push the world’s largest importer to the sidelines after October’s tender.

Canada Farmland Seeing Fewer Bids as Interest Rates Pinch Market

“We’re still seeing sales, just fewer bidders,” J.P. Gervais, Farm Credit Canada’s chief economist, said by phone.

• The rate of increase in farmland values is poised to slow down amid higher interest rates, he said
• Demand will slow but not enough that there will be a drop in farmland values as supply for sale remains limited
  • “They’re not making any more land,” Gervais said
• The average value of Canadian farmland rose 8.1% in the first half of 2022, down from 13.1% in the 12 months ending in June, according to an October Farm Credit Canada report

Panana to add green hydrogen production to major advanced biorefinery

The government of Panama and energy companies, including SGP BioEnergy, announced Tuesday that they will add green hydrogen production to an advanced biorefinery in development.

The facility plans to refine 180,000 barrels a day of biofuels, including sustainable aviation fuel (SAF), and generate 405,000 metric tons of green hydrogen annually. Producing green hydrogen will allow the facility to operate with net-zero emissions, SGP BioEnergy said in a news release.

The airline industry is harder to decarbonize than other types of transportation, so a massive ramp-up in SAF output will be needed for aviation to reach net-zero emissions.

SGP BioEnergy first announced the plan for the facility, located in Colon and Balboa, Panama, in May.

Construction is set to begin in 2023. For the project, SGP BioEnergy will work with Topsoe Sustainable Aviation Fuel to produce green hydrogen from waste carbon and renewable fuels by-products produced during refining, the release said.