Global Ag News for Apr 20.23

TOP HEADLINES

EU to Ban Domestic Sale of Ukraine’s Grain in Five Member States

The EU looks to ban the domestic sale of Ukraine’s grain in five member states including Poland, only allowing transit to other member states and countries outside the bloc, according to a senior EU official.

• The EU will take preventive measures under appropriate trade rules for wheat, corn, sunflower and rapeseed to address the situation, after several EU countries banned imports of grain from Ukraine, a spokesperson for European Commission President Ursula von der Leyen said at a briefing earlier on Wednesday
  • Von der Leyen is offering three proposals to address the situation, spokesperson says
  • EU has already provided support package of €56m for most affected farmers — now preparing second package of €100m for five countries
  • EU is launching investigation on other sensitive products
• The measure on grain transit will run till the end of June and doesn’t require an approval of other member states, the EU official said
  • Ukrainian grain can either enter the five countries in sealed containers or with supporting documentation that it is bound for other countries
• The official said that the €100m support package for five countries will be proposed very soon
• NOTE: Bulgaria, Poland, Hungary and Slovakia have banned imports
  • Romania’s ruling Social Democrats have planned to ask their partners in the ruling coalition, the Liberals and the ethnic Hungarians, to agree on a temporary suspension of imports of grains and food products from Ukraine

FUTURES & WEATHER

Wheat prices overnight are down 9 3/4 in SRW, down 13 3/4 in HRW, down 4 3/4 in HRS; Corn is down 4; Soybeans down 9 1/4; Soymeal down $0.29; Soyoil down 0.30.

For the week so far wheat prices are down 6 3/4 in SRW, down 24 3/4 in HRW, down 9 in HRS; Corn is down 2 3/4; Soybeans up 3 1/2; Soymeal down $0.77; Soyoil up 0.97.

For the month to date wheat prices are down 21 1/2 in SRW, down 25 3/4 in HRW, down 35 1/4 in HRS; Corn is down 3 1/2; Soybeans down 6; Soymeal down $12.20; Soyoil down 1.13.

Year-To-Date nearby futures are down 14.8% in SRW, down 4.1% in HRW, down 7.9% in HRS; Corn is down 1.2%; Soybeans down 1.3%; Soymeal down 5.5%; Soyoil down 14.4%.

Chinese Ag futures (JUL 23) Soybeans down 80 yuan; Soymeal down 85; Soyoil down 146; Palm oil down 96; Corn down 27 — Malaysian palm oil prices overnight were down 37 ringgit (-0.99%) at 3698.

There were no changes in registrations. Registration total: 2,463 SRW Wheat contracts; 23 Oats; 11 Corn; 0 Soybeans; 613 Soyoil; 1 Soymeal; 1 HRW Wheat.

Preliminary changes in futures Open Interest as of April 19 were: SRW Wheat down 231 contracts, HRW Wheat up 202, Corn down 5,656, Soybeans up 3,270, Soymeal up 2,074, Soyoil down 3,451.

Northern Plains Forecast: Another system is moving through the Northern Plains and Canadian Prairies this week with a few bursts of showers, including some areas of heavy snow. Temperatures will fall back below normal and remain there for the rest of the month, which is unfavorable for fieldwork and planting. It will still be warm enough to continue melting the remaining snowpack, but be slow enough to reduce the impact of flooding, which is becoming a major issue in the Red River Valley.

Central/Southern Plains Forecast: A system moves through the Central and Southern Plains this week with a few bursts of showers, but little for the southwestern drought areas. Some snow isn’t out of the question in the northwest as colder air fills in behind the system throughout the week. Additional frosts may be more widespread over the weekend, which may have some impact on wheat. Colder temperatures will be unfavorable for corn and soybean planting. Next week, the pattern remains active and models are producing plenty of rain chances in the drought areas, but that remains to be seen.

Western Midwest Forecast: A system will move through the Midwest with several rounds of showers through the weekend, including potential for more snow. Another burst of cold air will move through as well, which is more likely to lead to widespread frosts and freezes that could be troublesome for winter wheat and be unfavorable for corn and soybean planting. The active pattern continues next week with several more days of rain chances.

Delta Forecast: Another system is likely to produce widespread precipitation Thursday and Friday in the Delta and more is expected next week. Many areas of the region are wet, limiting spring planting. Some areas that have been able to plant will find good conditions for germination and early growth, though temperatures will be on the cooler end of normal.

Argentina Grains & Oilseeds Forecast: Outside of a few showers next week, it will be drier across Argentina for the next couple of weeks. Overall, conditions are good for harvesting damaged corn and soybean crops. Soil moisture is still sub-optimal for winter wheat planting and a drier stretch won’t be helpful once planting starts at the end of the month. More rainfall is needed.

The player sheet for 4/19 had funds: net sellers of 5,500 contracts of SRW wheat, sellers of 4,500 corn, sellers of 3,500 soybeans, sellers of 2,500 soymeal, and  sellers of 1,000 soyoil.

TENDERS

• MILLING WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy up to 120,000 tonnes of milling wheat that can be sourced from optional origins.
• NO PURCHASE IN BARLEY TENDER: Jordan’s state grain buyer is believed to have made no purchase in an international tender for 120,000 tonnes of animal feed barley, European traders said. A new tender is expected to be issued in coming days closing on May 3.
• WHEAT PURCHASE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 66,377 tonnes of food-quality wheat from the United States and Australia in a regular tender that closed on Thursday.
• SOYMEAL PURCHASE: Leading South Korean animal feed maker Nonghyup Feed Inc purchased an estimated 60,000 tonnes of soymeal expected to be sourced from South America in an international tender
• VEGETABLE OILS PURCHASE: Egypt’s state grains buyer GASC said it bought 35,000 tonnes of vegetable oils in an international tender.

PENDING TENDERS

• FEED WHEAT TENDER: An importer group in the Philippines has issued a tender to purchase around 150,000 tonnes of animal feed wheat, European traders said. The deadline for submission of price offers was believed to be April 14.
• 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.

TODAY

GRAIN EXPORT SURVEY: Corn, Soy, Wheat Sales Before USDA Report

Estimate ranges are based on a Bloomberg survey of four analysts; the USDA is scheduled to release its export sales report on Thursday for week ending April 13.

• Corn est. range 736k – 1,200k tons, with avg of 945k
• Soybean est. range 250k – 600k tons, with avg of 441k

Russia Sees 2023 Grain Harvest at 123M T: Agriculture Minister

Russia expects 2023 grain harvest around 123m tons, including from occupied territories of Ukraine, Agriculture Minister Dmitry Patrushev says in videoconference with President Vladimir Putin.

• Wheat harvest expected at 78m tons
• Projections are preliminary, Patrushev says

Russia 2023 Wheat Crop Estimated at 83.2 Million Tons: Agritel

Russia’s 2023 wheat output is seen at 83.2m tons, down from the 85.6m tons estimated in November, according to Paris-based farm adviser Agritel.

• Crop expected to be within range of 79m-87.3m tons
• Cut to forecast based on lower harvested acreages of winter wheat in central region
• Agritel lifted projection for Russia’s overall spring wheat areas to 12.85m hectares, from 12.62m in November report
• This didn’t offset a downwards revision in winter wheat harvested acreages

Russian 2022-23 Wheat Exports Seen at 37.5-45m tons: Vedomosti

Analysts see the Russian wheat exports in 2023 at 37.5-45m tons, Vedomosti reported.

• Analyst SovEcon sees Russian 2022-23 wheat exports at more than 43m tons, according to Vedomosti
• ProZerno sees wheat exports at 42m tons
• Rusagrotrans estimate is 37.5m tons, taking into account government purchases for the grain fund; exports could reach 40m tons if those purchases are adjusted
• IKAR sees Russian wheat exports at 45m tons

India March Oilmeals Exports Rise to 575,958 Tons

India’s oilmeals exports rose to 575,958 tons in March from 471,771 tons in February, according to the Solvent Extractors’ Association of India.

• Rapeseed meal exports rose to 248,063 tons from 141,401 tons in February
• Soymeal exports rose to 235,233 tons from 230,317 tons in February
• Rice-bran extract exports fell to 51,770 tons from 68,383 tons in February
• Castorseed meal exports rose to 39,710 tons from 29,697 tons in February

Ukraine’s Black Sea Crop Exports Resume After Latest Halt

• Ship inspections resume Wednesday after two-day halt
• Ukraine has also been hit with import bans from some EU states

Ukraine’s Black Sea crop shipments resumed on Wednesday, following a brief halt that sparked fresh concerns about future cargoes from the key exporter already contending with import bans from some of its European Union neighbors.

Inspections of vessels under a safe-passage corridor are again taking place after a two-day stoppage, according to Ukraine and the joint coordination center which oversees the checks. Kyiv has blamed the disruption  — which has been crucial for bringing down global food-commodity costs from records reached after Russia’s invasion — on Moscow. Wheat futures declined.

While the shipping resumption is good news for both Ukraine and developing nations that import its grain, it highlights uncertainty over the crop-export deal that Russia has repeatedly threatened to quit. It also comes as several EU countries halted Ukrainian grain imports over concerns the supplies are hurting their own markets, with Bulgaria on Wednesday following Poland, Hungary and Slovakia in prohibiting incoming shipments.

Argentina corn production down again as harvest delays continue – Refinitiv Commodities Research

2022/23 ARGENTINA CORN PRODUCTION: 35.1 [33.2–37.0] MILLION TONS, DOWN 3% FROM LAST UPDATE

Updated weather and early harvest conditions cut 2022/23 Argentina corn production by 3% to 35.1 [33.2–37.0] million tons. Our current estimate puts planted area at 7.65 million hectares, above 7.1 million hectares reported by Bolsa de Cereales in Buenos Aires, but below the Bolsa de Comercio in Rosario’s 7.9 million hectares. In April’s WASDE (11 April), USDA placed Argentina corn production at 37 million tons, down from its previous estimate of 40 million tons. Bolsa de Cereales in Buenos Aires and Bolsa de Comercio in Rosario currently forecast production at 36 and 32 million tons, respectively. Widespread cool and dry conditions were in place across Argentina’s core during the past two weeks, except in western Córdoba, La Pampa/San Luis and areas to the west, most of which saw near average precipitation along with relatively warm weather. Lingering drought across key production areas of northern Buenos Aires, eastern Córdoba, southern Santa Fe and Entre Ríos (which collectively account for more than 70% of Argentina’s total corn production), continues to hamper the crop’s late season development, and this trend is expected to remain intact as there appears to be no end in sight to dryness through the end of the month. Continued dryness could potentially help facilitate harvest, but the downsides will likely overweight most of the benefits, warranting close attention.

Argentina unions end strike that hit grains flow at Rosario port

A federation of unions representing Argentina’s port and maritime workers lifted a three-day-old strike that had affected the key Rosario grains shipping hub, the federation said in a statement on Wednesday.

The short-lived strike threatened to choke off grains exports from the South American agricultural powerhouse. The action was launched as a severe economic slump deepened, marked by the steady weakening of the local currency amid triple-digit inflation.

The announcement from the FeMPINRA union federation, which was demanding changes to taxes on worker salaries, followed meetings with government officials.

“With this agreement, the strike has been lifted and the functioning of the ports is getting back to normal,” said Juan Carlos Schmid, the FeMPINRA secretary general, in a statement.

He also praised the solidarity of all the participating unions.

The union representing grains-loader workers, known as Urgara, had on Monday joined the strike for 24-hours, paralyzing grains shipments from the major Rosario port, as well as nearby hubs where the bulk of Argentina’s corn, wheat and especially processed soybeans are sent out to buyers.

The decision to lift the strike followed a meeting at the Casa Rosada presidential palace in the capital Buenos Aires, in which President Alberto Fernandez’s cabinet chief, transport and labor ministers attended.

Argentina Bid To Bring in Dollars Stumbles as Peso Falls Faster

• Soybean exporters didn’t sell any dollars Wednesday on market
• Peso tumbling as inflation data fuels devaluation fears

Argentina’s renewed strategy to build up its stockpile of dollars at the central bank faced a setback Wednesday as the peso extended losses amid faster inflation over 100%.

Soybean exporters, who are temporarily allowed to sell dollars at a rate of 300 pesos per dollar compared to the official rate at 218, didn’t sell a single greenback Wednesday, the first day of no such sales since the policy started last week.

Inflation data published last Friday showed prices rose more than expected to an annual pace of 104%. That’s spurred a selloff this week in the commonly-used parallel peso exchange rate, which closed Wednesday at 433 pesos per dollar Wednesday and accumulated a loss of 6.7% so far this week.

As the parallel rate charges ahead, soybean exporters like Juan Ouwerkerk see the incentive dwindling for shipping abroad now at a fixed rate as many expect a currency devaluation to happen this year or next when a new government takes over. Ballooning uncertainty on the economy and a rumor mill of policy changes is making many exporters wait and see, Ouwerkerk added.

“The currency issues in the last two or three days make it so that whoever doesn’t need to sell holds onto their grains,” said Ouwerkerk, president of farm cooperative Alfa in southern Buenos Aires province. “The exporters who are well off can wait until December when there will undoubtedly be a devaluation.”

Argentina relaunched the so-called “soy dollar” exporters last week as farmers are suffering through the worst drought on record that’s expected to push the economy deeper into recession this year. The policy brought in $961 million in the first four days of operation. But that pace began to slow on Tuesday and came to a complete halt on Wednesday, according to PR Corredores de Cambio.

Read More: Argentina to Rework $44 Billion IMF Deal Over Drought Impact (1)

Soybean farmers can sell their dollars at this differential exchange rate until May 31, when this program ends. The government said it expects the measure to boost the central bank’s net cash reserves by $5 billion on top of another $4 billion of other agricultural products.

The central bank’s razor thin net reserves amounted to just $2.7 billion at the end of March, according to estimates by Argentine consulting firm FMyA. In Argentina, exporters must sell dollars they receive from sales abroad to the central bank for pesos, making commodity exports a key source of hard currency.

Farmers had sold just 730,000 metric tons of soy through Tuesday since the start of the program.

“It’s been pretty lethargic so far,” said Eugenio Irazuegui, head of research at grains brokerage Enrique Zeni in Rosario.

China Is Boosting Imports of Ukrainian Corn Through Black Sea

• Asian nation top destination under UN-brokered safe corridor
• About a fifth of crop exports under Black Sea deal go to ChinaBy Hallie Gu and James Poole

China, the biggest corn importer, is buying more of the grain from Ukraine, even as Beijing strengthens its strategic relationship with Russia.

About 1.5 million tons of corn left Ukrainian ports bound for China under the Black Sea Grain Initiative in March and so far in April, according to data from the Joint Coordination Centre for the agreement. That brings the amount since the start of the year to more than 3 million tons. By comparison, shipments were about 1.7 million tons from September to December, the data show.

China has been the top destination for all crop exports from Ukraine since the UN-brokered deal created a safe corridor in the Black Sea last year, just as Beijing has been deepening ties with Russia. Some 6.5 million tons have left for China since August, including sunflower oil, sunflower meal and barley, as well as corn. That’s about a fifth of crop exports to all destinations under the pact.

The shipments from Ukraine are reflected in China’s import data. Inbound corn cargoes from the country were about 1.2 million tons in January and February, or about a fifth of China’s total imports of the grain, according to customs.

While China is the largest producer and consumer of corn after the US, it still has to import the grain to meet its needs. It historically bought most of its cargoes from the US and Ukraine, but purchases from the latter slumped after the war began and Beijing sought to diversify supplies by buying from Brazil.

The agreement allowing safe passage for crop exports from Ukraine was renewed in March, with Russia saying the extension was for 60 days and Ukraine saying it was double that. The flow of cargoes has been subject to disruptions, including another this week. Ship inspections of cargoes resumed Wednesday after a two-day halt, the coordination centre said.

Underscoring the relationship between China and Russia, President Vladimir Putin praised ties between the two militaries Sunday as he met China’s defense minister. The minister told Putin that China was willing to boost “multilateral coordination and cooperation,” according to China Central Television.

China farm official expects little growth in soybean planting this year

China’s soybean acreage may only slightly increase this year, an official said on Thursday, suggesting output is unlikely to match last year’s jump due to soft prices.

The world’s top soybean importer launched a major effort to increase its production of the oilseed in 2022 amid concerns over its heavy reliance on imports. Output increased almost 24% to 20.3 million tonnes.

However an official from the Ministry of Agriculture and Rural Affairs said farmers were less willing to plant more of the crop in 2023.

“Frankly speaking, due to the low soybean market price and low comparative benefit, the enthusiasm and willingness of farmers to plant soybeans has declined compared with this time last year,” Pan Wenbo, director general of the ministry’s Department of Crop Production, told a press briefing.

After offering a package of incentives including significantly higher subsidies to plant soybeans compared to corn in key growing areas in the northeast, planting intentions had improved, he added, though any increase would likely come from other regions where a campaign to promote intercropping with corn is underway.

“Compound planting” of the two crops is expected to increase slightly by 5 million mu (333 hectares) and reach 20 million mu (1.3 million hectares) this year, Pan said.

As a result, Pan expected the country’s soybean acreage this year to be stable or slightly increase.

China’s homegrown soybeans are used for food, while imported genetically modified beans are crushed into meal for animals and oil for cooking.

Also, China’s hog farmers are set to make profits by the end of the second quarter, another official said at the same briefing, as feed prices fall and consumption picks up.

Hog prices in the world’s top pork producer have slumped this year, weighed down by the largest quarterly slaughter volume in five years, data showed earlier this week.

But consumption is due to improve during the upcoming Labour day and Dragonboat festival holidays, said Zeng Yande, chief agronomist, with losses turning to profits by the end of the second quarter.

He added that a sow herd of 43.05 million pigs at the end of March was still within a reasonable range. The number is 0.9% lower than February but higher than the ideal number of 41 million.

Zeng also said that the disease situation in the country’s hog herd was “generally stable”, and described recent reports of outbreaks in the north as “hype”.

Fertilizer Prices Rise as Spring Demand Stretches Supply

A spike in spring fieldwork and near-term demand caused fertilizer supplies to tighten at New Orleans and inland, contributing to higher prices for urea, phosphates and potash. Urea futures at New Orleans price a short-term, demand-fueled price increase as US farmers rush to fertilize all at once.

Urea Prices Continue Climb

Early week urea prices continued to move up at New Orleans and major inland US hubs, as well as in Egypt and Brazil, with reports that cargoes to the latter had been diverted to the US to meet seasonal demand. Inland US ammonia and urea ammonium nitrate prices waned, yet phosphate and potash were firm-to-up, with tight supplies cited. Ammonium sulfate followed urea up in Brazil. Tampa sulfur prices for 2Q dropped 21% from 1Q.

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