Global Ag News for Oct 17.22

TOP HEADLINES

Russian drones hit sunflower oil terminal in Ukraine’s Mykolaiv – officials

Russian kamikaze drones hit tanks with sunflower oil at one of the terminals in the Ukrainian port city of Mykolaiv late on Sunday, the city mayor said on Monday.

One of Ukraine’s largest ports, Mykolaiv halted shipments at the start of the Russian invasion, but Ukraine is pushing to open the port to expand shipments of food under a deal brokered by the United Nations and Turkey. (Full Story)

“In Mykolaiv, three drones hit an object of industrial infrastructure, where tanks with sunflower oil were ignited,” Mykolaiv mayor Oleksandr Senkevich.

The attack took place hours before explosions in the capital Kyiv from suspected Iranian-made drones, increasingly used by Russia to attack deep into Ukrainian territory.

The regional emergencies service published photos of huge tanks with flames and smoke rising over them.

Mykolaiv, located near the Russian-occupied Kherson region, has been under constant shelling in recent months. Port terminals have already been hit at least twice – in June and August.

FUTURES & WEATHER

Wheat prices overnight are up 13 1/2 in SRW, up 12 in HRW, up 14 1/4 in HRS; Corn is down 1/2; Soybeans down 1 3/4; Soymeal down $0.11; Soyoil up 0.56.

Markets finished last week with wheat prices down 64 1/2 in SRW, down 60 in HRW, down 45 3/4 in HRS; Corn is down 9; Soybeans up 8; Soymeal up $0.43; Soyoil down 0.20.

For the month to date wheat prices are down 48 1/4 in SRW, down 27 1/4 in HRW, down 13 1/2 in HRS; Corn is up 11 3/4; Soybeans up 17 1/4; Soymeal up $7.00; Soyoil up 4.30.

Year-To-Date nearby futures are up 13% in SRW, up 20% in HRW, down -1% in HRS; Corn is up 16%; Soybeans up 4%; Soymeal down 0%; Soyoil up 17%.

Chinese Ag futures (JAN 23) Soybeans down 3 yuan; Soymeal down 12; Soyoil down 36; Palm oil up 78; Corn up 4 — Malaysian palm oil prices overnight were up 18 ringgit (+0.47%) at 3851.

There were changes in registrations (67 Soyoil, 47 Soymeal). Registration total: 3,084 SRW Wheat contracts; 0 Oats; 0 Corn; 5 Soybeans; 106 Soyoil; 349 Soymeal; 40 HRW Wheat

Preliminary changes in futures Open Interest as of October 14 were: SRW Wheat up 628 contracts, HRW Wheat up 263, Corn up 1,116, Soybeans up 8,069, Soymeal up 325, Soyoil up 166.

Northern Plains Forecast: A few isolated showers moved through over the weekend, but it will be dry this week, allowing for better harvest conditions for those yet to go. A pattern change is coming this weekend, which will bring storms through the region with heavier rain potential, wind gusts, and colder air.

Central/Southern Plains Forecast: A strong cold front moved through over the weekend with scattered showers occurring over Oklahoma and Texas. The front will slip south on Monday before the region goes drier again. Cold air moving into the region will produce more widespread frosts and freezes for the next couple of mornings. A pattern change coming this weekend will bring better chances for widespread precipitation to drought areas next week, which may be beneficial for winter wheat establishment. Long-standing drought in the region will be hard to reverse, however.

Midwest Forecast: Cold air moved back into the region over the weekend and produced scattered showers near the Great Lakes. The continuation of cold air should bring lake-effect rain and snow showers to the prone areas through Wednesday, annoying to those that have yet to harvest. A pattern change coming this weekend will bring warmer air to the region along with potential for showers farther west.

Brazil Grains & Oilseeds Forecast: Scattered showers fell over southern areas this weekend while it dried out over central and northern areas. A couple of weak disturbances will continue the showers over southern areas through Thursday before the region goes drier. That will return showers to central areas, making for mostly good conditions for planting and establishment this week. Dryness over southern areas is forecast to last a while, but may not be completely dry. Still, an extended period of dryness will change prospects for corn and soybeans, even though temperatures are forecast to be below normal.

Argentina Grains & Oilseeds Forecast: A few light showers fell in a couple of isolated spots over the weekend, but most areas were dry. A disturbance moving through will bring showers to the country on Wednesday and Thursday, while a front brings isolated showers to southern areas Friday and Saturday, but amounts are likely to be spotty and not turn around the overall dryness that has been plaguing the region for months. Winter wheat filling and corn establishment is already suffering, while soybean planting will likely be pushed back as well since that usually starts up this week. Long-range models continue to suggest the dryness continuing well into November.

The player sheet for Oct. 14 had funds: net sellers of 11,500 contracts of SRW wheat, sellers of 5,500 corn, sellers of 3,000 soybeans, sellers of 0 soymeal, and  sellers of 4,500 soyoil.

TENDERS

• SOYBEAN SALES: The U.S. Department of Agriculture confirmed private sales of 392,000 tonnes of U.S. soybeans to China and another 198,000 tonnes to unknown destinations, all for delivery in the 2022/23 marketing year that began Sept. 1.
• SOYMEAL SALES: The USDA also confirmed private sales of 230,000 tonnes of U.S. soymeal to the Philippines for the 2022/23 marketing hear that began Oct. 1.
• WHEAT PURCHASE: South Korea’s Major Feedmill Group (MFG) purchased about 65,000 tonnes of animal feed wheat expected to be sourced from Australia in a private deal on Friday without issuing an international tender, European traders said.

PENDING TENDERS

• FEED WHEAT TENDER: An importer group in the Philippines issued a tender to purchase around 165,000 tonnes of animal feed wheat, European traders said. The deadline for submission of price offers was Oct. 13.
• WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy 120,000 tonnes of milling wheat, an official source said, closing on Oct. 18.
• FEED BARLEY TENDER: Jordan’s state grain buyer issued an international tender to purchase 120,000 tonnes of animal feed barley seeking March and April shipment, an official source said. The tender will close on Oct. 19.
• FEED WHEAT AND BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said it will seek 70,000 tonnes of feed wheat and 40,000 tonnes of feed barley to be loaded by Jan. 31 and arrive in Japan by Feb. 24 via a simultaneous buy and sell (SBS) auction that will be held on Oct. 19.
• 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

US Export Sales of Soybeans, Corn and Wheat by Country

The following shows US export sales of soybeans, corn and wheat by biggest net buyers for week ending Oct. 6, according to data on the USDA’s website.

• China bought 622k tons of the 724k tons of soybeans sold in the week
• Japan was the top buyer of corn and also led in wheat

US Export Sales of Pork and Beef by Country

The following shows US export sales of pork and beef product by biggest net buyers for week ending Oct. 6, according to data on the USDA’s website.

• Mexico bought 8.1k tons of the 29.9k tons of pork sold in the week
• Japan led in beef purchases

NOPA September U.S. soybean crush seen at 161.627 million bushels

The U.S. soybean crush in September likely reached an all-time high for the ninth month of the year as processors ramped up operations with the arrival of newly harvested beans, analysts said ahead of a monthly National Oilseed Processors Association (NOPA) report due on Monday.

NOPA members, which handle about 95% of all soybeans processed in the United States, were estimated to have crushed 161.627 million bushels of soybeans last month, according to the average of estimates from eight analysts.

If realized, the monthly crush would be down 2.4% from the 165.538 million bushels processed by NOPA members in August but up 5.1% from the September 2021 crush of 153.800 million bushels. It would also be the largest September crush on record, just ahead of the September 2020 crush of 161.491 million bushels.

The September estimate implied a daily processing rate of 5.388 million bushels, which would be up from an 11-month low of 5.340 million bushels a day in August.

Estimates for the September 2022 crush ranged from 152.000 million to 170.400 million bushels, with a median of 162.108 million bushels.

The monthly NOPA report is scheduled for release at 11 a.m. CDT (1600 GMT) on Monday. NOPA releases crush data on the 15th of each month, or the next business day.

Soyoil supplies held by NOPA members as of Sept. 30 were projected to have dropped to 1.522 billion pounds, a 23-montdh low, according to the average of estimates gathered from six analysts.

If realized, the soyoil stocks would be down 2.7% from 1.565 billion pounds at the end of August and down 9.6% from the 1.684 billion pounds held by NOPA members at the end of September last year.

Soyoil stocks estimates ranged from 1.475 billion to 1.600 billion pounds, with a median of 1.511 billion pounds.

Argentina corn planting slowest in six years due to drought, Rosario exchange says

Argentina corn planting is progressing at its slowest pace in six years due to a protracted drought, the Rosario grains exchange (BCR) said on Friday, which will drag down the amount of early-planted corn that normally has a higher yield.

Argentina is the world’s third largest corn exporter, but has been grappling with a major period of dry weather that has hit grains farmers hard in the South American nation, which is also a major producer of soy and wheat.

The Rosario exchange said that it expected early planted corn to only make up 10% of the total 2022/23 cycle in the core production areas. That would be the lowest level in a decade. Farmers are expected to plant 8 million hectares (19.8 million acres) of the grain.

“The 2022/23 campaign would have only 10% of early corn area in the core production area, leaving the rest as late corn,” the BCR said in a report.

The exchange currently forecasts 2022/23 corn production of 56 million tonnes, up from a drought-hit 51 million tonnes a year earlier, though this season’s number is likely to be revised down due to the current dry weather.

Late corn planted, that starts being sown at the end of the year, has lower yields than the plants planted at the beginning of the campaign, which starts in September.

Argentine farmers so far have planted 1.6 million hectares with corn, down from the 2.8 million tonnes planted in the same period a year ago, the exchange said.

Argentina Plans to Mitigate Problems From Parched Wheat Crop

Agriculture Secretary Juan Jose Bahillo met with representatives of the country’s wheat industry, including millers and crushers-exporters, on Thursday evening, according to a government statement.

• They discussed a drought that’s withering Argentina’s wheat crop
• The Secretariat will publish a report in the next few days detailing steps to “mitigate and reduce any problems the drought may cause”
• NOTE: Argentina already protects local wheat-flour supplies and prices via export quotas and a subsidy paid by exporters to domestic millers

India Sept. Oilmeals Exports Fall to 240,669 Tons

India’s oilmeals exports fell to 240,669 tons in September from 282,498 tons in August, according to the Solvent Extractors’ Association of India.

• Rapeseed meal exports fell to 163,089 tons from 228,960 tons in August
• Soymeal exports fell to 13,718 tons from 17,547 tons in August
• Rice-bran extract exports rose to 36,492 tons from 11,787 tons in August
• Castorseed meal exports rose to 24,897 tons from 23,670 tons in August

Malaysia’s Oct. 1-15 Palm Oil Exports 594,282 Tons: AmSpec

Malaysia’s palm oil Shipments rose 1.9% from 583,446 tons exported during Sept. 1-15, AmSpec Agri said on Saturday.

Indonesia Cuts Crude Palm Oil Export Tax on Oct. 16-31 Shipments

Indonesia, the world’s largest palm oil producer, cut its export tax for crude palm oil to $3 a ton for shipments from Oct. 16 to Oct. 31, from $33 a ton previously, as the government lowered its reference price, according to the latest trade ministry regulation.

The crude palm oil reference price has been set at $713.89 a ton, from $792.19 a ton in Oct. 1 to 15.

China sold 41,359 tonnes of wheat at reserve auction – trade centre

China sold 41,359 tonnes of wheat, or 100% of the total offer, at an auction of its reserves held on Oct. 12, the National Grain Trade Center said in a statement on Monday.

The average selling price of the wheat, which was from the 2014, 2015 and 2016 crops, was 2,854 yuan ($396.63) per tonne, it said.

Ukrainian Farmers Have Finished Harvesting Wheat and Barley

Ukrainian farmers harvested 27.1 million tons of grain as of Oct. 14 and have finished harvesting of wheat and barley, according to the Agriculture Ministry.

• Wheat harvest amounts to 19.2 millions tons with 100% of sown area vs 32.2 million tons a year ago. The yield remained at 4.1 tons\hectare, in line with indicators from last month, but lower than last year’s 4.62 tons
• Barley harvest amounted to 5.6 million tons with 100% of sown area. That compares with 10 million tons a year ago
• Corn harvest continues with 5% area processed vs 22% a year ago, farmers had harvested 996,000 tons vs 6.92 million tons a year ago

South America’s Adecoagro Is Testing Drought-Tolerant Crops: CEO

Adecoagro, a farming company with operations in Argentina and Brazil, is testing Bioceres’s HB4 drought-tolerant crop strains, CEO Mariano Bosch said in an interview on the sidelines of a conference in Mar del Plata.

• NOTE: Adecoagro farms ~290,000 hectares (716,000 acres) of soybeans, corn, wheat, sunflowers, peanuts, rice and cotton, and another 190,000 ha of sugarcane
• NOTE: Bioceres’s HB4 technology is for soybeans and wheat

SOYBEAN/CEPEA: With concerns about the weather and lower supply in the USA, values rise

Soybean prices have resumed rising in the Brazilian market this week. The boost came from the frequent rains in the major soybean-producing regions in Brazil – which have been interrupting crop activities – and valuations abroad, due to estimates for lower supply in the United States.

According to the USDA’s report from October 12th, the estimates for soybean production in the USA have been revised down to 117.32 million tons, 1.5% lower than that forecast in September and 3.4% below that last season. According to the USDA, 44% of the American soybean crop has been harvested, less than the 47% harvested in the same period last year.

However, lower supply in the US has been offset by higher production estimates in Brazil, where the output is forecast at 152 million tons, 2% higher than that estimated in September. Thus, the world soybean production in the 2022/23 season is forecast to be a record, at 390.98 million tons, 0.31% higher than that estimated last month.

In Brazil, high rainfall delayed soybean sowing, and in Paraná, agents have reported the need of replanting some areas. According to Conab, 11% of the national soybean crop had been sown by October 8.

Between October 6 and 13, the ESALQ/BM&FBovespa Index Paranaguá (PR) and the CEPEA/ESALQ Index Paraná rose by 5.1% and 5.3%, respectively, closing at BRL 187.56 (USD 35.53) per 60-kilo bag and BRL 182.72 (USD 34.61)/bag on Thursday, 13. On the average of the regions surveyed by Cepea, prices increased by 3.7% in the over-the-counter market (paid to farmers) and by 4.7% in the wholesale market (deals between processors). The US dollar rose by 1.4% in the last seven days, to BRL 5.279 on Thursday.

CORN/CEPEA: Higher demand from abroad raises prices in Brazil

The international demand for the Brazilian corn has been higher this week, for both prompt delivery and for delivery in the coming months. This scenario raised corn prices at the national ports and in the interior of the country.

The increase in the demand from abroad is a reflect of the worse scenario of the Russia-Ukraine war, which may halt grains exports from the Black Sea, and the harvesting in the United States, which has been lower than that last season. This context boosted the future contracts in the USA.

New estimates for a lower world output this in the current season helped to underpin the futures. Despite the recent valuations in the Brazilian market, the purchases in the interior of Brazil have not shown higher interest in the cereal than that observed for exports. Many of them – still based on the good performance of the summer crop and in the forecast for good ending stocks in the current season – are selling corn only for delivery in the short term.

On the other hand, farmers began to limit the volume available in the domestic market, aware of the higher prices at the national ports.

PRICES – Between October 6 and 13, on the average of the regions surveyed by Cepea, values increased by 1.7% in the over-the-counter market (paid to farmers) and by 0.9% in the wholesale market (deals between processors). The ESALQ/BM&FBovespa Index for corn closed at BRL 84.42 (USD 15.99) per 60-kilo bag on Thursday, 13, 1.7% up in seven days.

PORTS – With corn prices being higher at Brazilian ports, exports have been higher this month than that in the entire month of October/21. In the first five working days of Oct/22, Brazil exported 1.8 million tons of corn, almost 100 thousand up the volume shipped in the 20 working days of Oct/21, according to data from Secex.

ESTIMATES – On Wednesday, 12, the USDA released its monthly supply-demand report, revising down both production and stocks in the world 2022/23 season. Decreases were linked to lower production in the USA and the European Union, by 0.4% and 4%, respectively, compared to the previous report. On the other hand, in Brazil and Argentina, the outputs are still estimated at 126 million tons and 55 million tons.

CROPS – The recent rains observed in southern and southeastern Brazil have favored the development of the summer crop of corn. By the end of last week, 27% of the national crop had been sown, according to data from Conab released on October 10th.

Argentina Soy, Oilseed Crushers Agree to 98% Pay Rise: Union

Oilseed-crush workers in Argentina have agreed to an annual wage increase from October of 98%, according to a trade union statement.

• The country’s two main unions representing workers in the industry both reached the agreement with oilseed crushers/agricultural traders
• The base monthly salary is now 222,000 pesos (~$1,470 at the official FX rate)
• NOTE: In previous years, strike action arising from pay disputes has paralyzed Argentine soy meal shipments

India Allows Wheat Flour Exports Under Advance Authorization

India has allowed the export of wheat flour produced from imported wheat against advance authorization by export-oriented units and firms in the special economic zones, according to a trade ministry statement.

• The shipments will have to be exported within 180 days from the date of import of the wheat consignment
• Procurement of domestic wheat for the purpose of export of wheat flour will not be allowed

Russia Wheat-Export Tax to Rise to 2,934 Rubles a Ton: Interfax

Russia’s wheat export duty will increase to 2,934.3 rubles ($46.79) per ton next week, from 1,926.8 rubles, Interfax reported, citing the agriculture ministry.

• NOTE: Russia started calculating the export tax in rubles in July; previously, it was calculated in dollars, and the amount was markedly higher

US Beef Production Falls 0.6% This Week, Pork Down: USDA

US federally inspected beef production falls to 547m pounds for the week ending Oct. 15 from 550m in the previous week, according to USDA estimates published on the agency’s website.

• Cattle slaughter down 0.6% from a week ago to 660m head
• Pork production down 0.5% from a week ago, hog slaughter falls 0.5%
• For the year, beef production is 1.4% above last year’s level at this time, and pork is 2.5% below