Global Ag News for Aug 15.23
US Rejected Rare Import of Polish Wheat Due to Prohibited Seeds
A rare cargo of wheat shipped from Poland to Houston was rejected from being imported because it contained “prohibited seeds,” the US government said Monday in a statement.
The vessel Yochow, carrying about 30,000 metric tons of Polish grain, was held up last week off the coast of Texas. Years of drought in the American heartland had hit grain harvests, making some imports like wheat from Europe a relative bargain. However, US Customs and Border Protection ordered the Yochow’s cargo to be exported elsewhere after authorities determined it was contaminated.
“Invasive species and toxic substances are among the many threats to American agriculture and natural resources,” a US Customs and Border Protection spokesman said.
FUTURES & WEATHER
Wheat prices overnight are down 4 3/4 in SRW, up 1/4 in HRW, down 1 1/4 in HRS; Corn is down 3 3/4; Soybeans down 3 1/2; Soymeal down $1.80; Soyoil up 0.20.
For the week so far wheat prices are down 17 in SRW, down 6 1/2 in HRW, down 10 3/4 in HRS; Corn is down 3 1/4; Soybeans up 15; Soymeal up $1.50; Soyoil up 1.12.
For the month to date wheat prices are down 55 in SRW, down 70 in HRW, down 51 1/2 in HRS; Corn is down 29; Soybeans down 9 1/4; Soymeal down $5.70; Soyoil up 1.36.
Year-To-Date nearby futures are down 22.9% in SRW, down 15.4% in HRW, down 14.3% in HRS; Corn is down 30.4%; Soybeans down 12.3%; Soymeal down 13.5%; Soyoil up 2.2%.
Chinese Ag futures (NOV 23) Soybeans down 29 yuan; Soymeal up 65; Soyoil up 114; Palm oil up 50; Corn down 4 — Malaysian palm oil prices overnight were up 89 ringgit (+2.41%) at 3783.
There were changes in registrations (41 Soybeans, 53 Soyoil). Registration total: 1,398 SRW Wheat contracts; 448 Oats; 0 Corn; 41 Soybeans; 117 Soyoil; 0 Soymeal; 147 HRW Wheat.
Preliminary changes in futures Open Interest as of August 14 were: SRW Wheat up 5,085 contracts, HRW Wheat up 3,065, Corn up 10,470, Soybeans up 2,514, Soymeal up 3,003, Soyoil up 5,535.
Northern Plains: Mostly dry through Friday. Temperatures near to below normal through Thursday, near to above normal Friday. Outlook: Isolated showers Saturday-Wednesday. Temperatures near to above normal Saturday-Wednesday.
Central/Southern Plains: Mostly dry Tuesday-Friday. Temperatures near to below normal north and above normal south through Thursday, near to above normal Friday. Outlook: Mostly dry Saturday-Wednesday. Temperatures above normal Saturday-Wednesday.
Western Midwest: Mostly dry Tuesday. Isolated showers north Wednesday. Mostly dry Thursday-Friday. Temperatures below normal Tuesday, near to below normal Wednesday-Friday.
Eastern Midwest: Isolated to scattered showers Tuesday. Mostly dry Wednesday. Scattered showers Thursday. Mostly dry Friday. Temperatures near to below normal through Friday.
The player sheet for Aug. 14 had funds: net sellers of 5,000 contracts of SRW wheat, sellers of 6,000 soybeans, buyers of 2,500 soymeal, and buyers of 3,500 soyoil.
- SOYBEAN SALES: The U.S. Department of Agriculture confirmed private sales of 416,000 metric tons of U.S. soybeans for delivery to unknown destinations in the 2023/24 marketing year that begins Sept. 1.
- SOYMEAL PURCHASE: South Korean animal feed maker Nonghyup Feed Inc (NOFI) purchased an estimated 60,000 metric tons of soymeal in an international tender on Monday.
- VEGETABLE OILS TENDER: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), said it was seeking vegetable oils in an international tender for arrival Sept. 20-Oct. 5. The deadline for offers is Aug. 16.
- CORN AND SOYMEAL TENDERS: Iranian state-owned animal feed importer SLAL issued two international tenders to purchase up to 180,000 metric tons of animal feed corn and 120,000 metric tons of soymeal.
- WHEAT TENDER UPDATE: The lowest offer in an international tender from Bangladesh’s state grains buyer to purchase and import 50,000 metric tons of wheat which closed on Sunday was assessed at $304.83 a metric ton liner out.
- WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy up to 120,000 metric tons of milling wheat which can be sourced from optional origins
- FEED BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase up to 120,000 metric tons of animal feed barley
- VEGETABLE OILS TENDER: Egypt’s GASC is seeking refined sunflower oil in one-litre bottles in an international tender. It is seeking at least 5,000 metric tons of oils, free of customs, on behalf of the Holding Company for Food Industries, for delivery during October and/or November and/or December. Deadline for submitting offers is Aug. 17.
- RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 130,200 metric tons of rice all to be sourced from China
- WHEAT TENDER: A Syrian state grains agency issued an international tender to purchase and import 200,000 metric tons of soft milling wheat.
- FEED WHEAT AND BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said it will seek 60,000 metric tons of feed wheat and 20,000 tons of feed barley to be loaded by Nov. 30 and arrive in Japan by Jan. 25 via a simultaneous buy and sell (SBS) auction that will be held on Aug. 23.
US Inspected 398k Tons of Corn for Export, 298k of Soybean
In week ending Aug. 10, according to the USDA’s weekly inspections report.
- Wheat: 183k tons vs 293k the previous wk, 390k a yr ago
- Soybeans: 298k tons vs 284k the previous wk, 768k a yr ago
- Corn: 398k tons vs 388k the previous wk, 539k a yr ago
Ukraine’s Grain Export Rises 18% Y/Y Through Aug. 14
Ukraine’s grain exports in the season that began July 1 totaled 3.12 million tons as of Aug. 14, up 18% from last year, data on the Agriculture Ministry’s website shows.
- Total includes:
- 1.48m tons of corn, down 16% from last year
- 1.25m tons of wheat, almost twofold increase from last year
- 385,000 tons of barley, up 70% from last year
- NOTE: Ukraine’s grain exports may reach about 48 million tons, including about 22 million tons of corn and 15 million tons of wheat, in 2023/2024 marketing year that started in July, according to the Grain Association industry group
IKAR Raises Russia Wheat Crop Forecast to 89.5m Tons: Rylko
IKAR raised its Russian 2023 wheat crop estimate to 89.5m tons from the 88m tons expected earlier, Dmitry Rylko, director of the Moscow-based consultant said by phone on Monday. Cited higher yields in central, Volga regions
Palm Oil Prices May Rise Slightly on El Niño, Golden Agri Says
Palm oil prices will likely remain at current levels before rising slightly as the El Niño weather pattern further materializes, according to major producer Golden Agri-Resources Ltd.
- The full impact of El Niño will be mostly be seen in 2024, Richard Fung, director of investor relations, said during a briefing Monday following the company’s 1H earnings
- Plantations are already experiencing drought
- An escalation of Black Sea hostilities may limit edible oil supplies
- Fundamentals are especially good for palm oil compared with other vegetable oils due to its high productivity, competitive price, and continuing extreme weather conditions
- Palm oil production has been below expectations so far this year due to unfavorable weather conditions and tree stress; yields are expected to improve in 2H
- Full-year production in both Indonesia and Malaysia may still see a slight decline compared with 2022 due to aging plantations and replanting activity
- Golden Agri’s full-year palm output seen dropping 3% y/y
- Co. targeting re-plantation of 20,000 ha this year; 6,500 ha replanted in 1H
- Indonesia’s biodiesel consumption expected to further climb to nearly 13m kiloliters this year
- Golden Agri targeting full traceability to plantations by end-2023, from 98% as of the end of last year
WHEAT/CEPEA: Harvest begins in PR; record supply may keep pressure on prices
The harvest of wheat crops has just begun in Paraná, one of the major wheat-producing states in Brazil. So far – and although the output may be lower than that last season –, estimates show that the domestic availability (initial inventories + output + imports) is expected to be a record, mainly because of higher imports.
And although data indicate consumption will grow up in Brazil, exports will have to be high too, since the domestic surplus is expected to be a record. Otherwise, pressure on wheat prices may increase – it is important to mention that wheat prices have been fading since 2022.
Cepea surveys show that, between August 4-11, the prices paid to wheat farmers dropped 0.52% in Paraná and 0.37% in Santa Catarina but remained stable in Rio Grande do Sul. In the wholesale market (deals between processors), values decreased 1.97% in São Paulo, 0.69% in PR and 0.38% in SC but rose 0.36% in RS. In general, deals were closed sporadically, as mills are waiting for an increase in the volume of wheat from the new season to raise purchases. In the same period, the US dollar increased 0.68% against the Real, closing at BRL 4.902 on August 11th.
Data released by Conab last week showed that the wheat output in Brazil is estimated at 10.41 million tons, 0.2% lower than that forecast in July and 1.4% down (-144.9 thousand tons) from the record set last season. The area estimated for wheat crops in Brazil has increased 11.2% from that last season, to 3.43 million hectares. On the other hand, crops productivity is forecast at 3.03 tons/hectares, lower than that estimated in July and 11.3% below that from 2022 (3.42 tons/hectare), according to Conab.
As for imports, Conab reduced by 300 thousand tons the volume estimated in the previous report, to 5.2 million tons between Aug/23 and Jul/24. Estimates for the domestic availability were revised down from that released in July, to 16.29 million tons, still 3.3% higher than that last season.
Consumption is forecast by Conab to reach 12.43 million tons, a slight 0.4% higher than that last season. Exports estimates were kept at 2.6 million tons. Thus, ending inventories would total 1.25 million tons by July/24.
CROPS – According to data from Conab, 99.9% of the national crop of wheat had been sown by August 5th. As for the harvest, 2.7% have been harvested so far – activities are taking place in Goiás (70%) and in Minas Gerais (22%).
Ukraine Grain Exports by Rail to Rise in Sept: UkrAgroConsult
Shipments of Ukrainian grain by rail will increase in September-November according to UkrAgroConsult.
- NOTE: Ukraine’s sea ports are blocked after Russia exited a safe-corridor grain-export deal
- Rail shipments won’t reach records unless Russia “completely paralyzes the option of exporting through small Danube ports with shelling of grain infrastructure”
- Rail shipments have been lower in recent months due to high costs, and five EU countries banning purchases; says ban “is expected to be extended beyond 15 September”
Democrats Prod EPA to Revive Biofuel Credit for Electric Cars
Congressional Democrats are prodding the US government to share longstanding biofuel incentives with electric vehicles, insisting the EPA should swiftly create new tradeable credits tied to EV charging and adjust renewable fuel quotas accordingly.
- EPA shelved its plan to allow automakers to generate eRIN credits tied to charging EVs with power from renewable biomass while setting US biofuel-blending quotas earlier this year
- Further delay “introduces unnecessary risk and jeopardizes billions of dollars that could be invested in accelerating electric vehicle adoption and new low-carbon electricity production,” the nine lawmakers say in letter to agency Administrator Michael Regan
- “There is simply no discernible reason EPA would not finalize any necessary rules and allow eRIN generation to begin in 2024,” say the lawmakers, led by Maine Democrat Chellie Pingree
- Lawmakers say EPA should finalize an eRINs program before the end of September, authorize their generation no later than Jan. 1 and swiftly impose relevant renewable volume obligations
Biden Urged to Intervene on Delayed Ethanol Expansion Rule
The head of a biofuel lobbying group called on President Joe Biden to act quickly to ensure the Environmental Protection Agency approves a rule allowing year-round sales of gasoline containing 15% ethanol in eight US Midwestern farm states.
- The petition from governors in April 2022 “has unfortunately turned into a sixteen-month odyssey,” American Coalition for Ethanol CEO Brian Jennings writes in a letter to Biden
- Expansion of the higher corn-ethanol fuel blend known as E15 would curb harmful emissions and improve air quality: letter
- It also helped lower gasoline costs for consumers last summer as prices soared
- “While we continue to work on legislation to permanently provide these benefits to all Americans, the eight states deserve immediate action by EPA,” Jennings writes
India Boosts Its Urea Supply on Big Buy From China
Nitrogen prices appear set for a 3Q boost, as India’s latest tender revealed urea prices up 40% from the previous one. Chinese material — the marginal-cost setter — made up over 1 million metric tons of the 1.8 million mt India will buy. The purchase signals a comfortable supply level for India and pushes the next tender out a quarter. China is playing an outsized role in this process against expectations for low participation, with domestic inventory near a five-year low. Yet overall economic slowdown hasn’t hit the Chinese fertilizer industry. Nitrogen operating rates are 78%, a five-year high, supported by elevated fertilizer prices and declining input (coal, natural gas) costs.
Interested in more futures markets? Explore our Market Dashboards here.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.