Global Ag News for Aug 26th
TODAY – EXPORT SALES
Wheat prices overnight are up 7 1/2 in SRW, up 6 in HRW, up 3 1/4 in HRS; Corn is down 2 3/4; Soybeans down 5 1/2; Soymeal down $0.08; Soyoil down 0.54.
For the week so far wheat prices are up 4 3/4 in SRW, up 5 1/4 in HRW, up 9 in HRS; Corn is up 12; Soybeans up 36 1/2; Soymeal down $0.29; Soyoil up 4.05. For the month to date wheat prices are up 20 in SRW, up 36 3/4 in HRW, up 20 1/4 in HRS; Corn is up 3 3/4; Soybeans down 22; Soymeal down $1.90; Soyoil down 2.34.
Chinese Ag futures (JAN 22) Soybeans up 49 yuan; Soymeal up 3; Soyoil up 98; Palm oil up 110; Corn down 12 , Malaysian Palm is up 28. Markets finished last week with wheat prices down 9 3/4 in SRW, down 7 1/4 in HRW, up 6 3/4 in HRS; Corn is down 1 3/4; Soybeans up 7 1/4; Soymeal down $0.16; Soyoil up 0.78. Malaysian palm oil prices overnight were up 28 ringgit (+0.64%) at 4392 as traders weighed shrinking exports and rising output in Malaysia with tight global edible oil supplies.
Midwest corn, soybean and winter wheat forecasts: West: Isolated to scattered showers through Sunday. Temperatures above normal through Sunday. East: Isolated to scattered showers through Sunday. Temperatures above normal through Sunday. 6 to 10 day outlook: Isolated to scattered showers Monday-Friday. Temperatures near to above normal Monday-Friday.
The player sheet for Aug. 25 had funds: net sellers of 3,000 contracts of SRW wheat, buyers of 5,000 corn, sellers of 1,000 soybeans, sellers of 500 soymeal, and buyers of 2,500 soyoil.
Preliminary changes in futures Open Interest as of August 25 were: SRW Wheat down 796 contracts, HRW Wheat down 3,108, Corn up 169, Soybeans down 2,197, Soymeal down 3,996, Soyoil down 3,547.
There were no changes in registrations. Registration total: 0 SRW Wheat contracts; 0 Oats; 0 Corn; 0 Soybeans; 298 Soyoil; 5 Soymeal; 1,288 HRW Wheat.
- WHEAT PURCHASE: A government agency in Pakistan provisionally bought about 160,000 tonnes of milling wheat in an international tender for up to 400,000 tonnes which closed on Monday
- WHEAT PURCHASE: Jordan’s state grains buyer purchased 60,000 tonnes of hard milling wheat to be sourced from optional origins in a tender which closed on Wednesday
- DURUM WHEAT TENDER UPDATE: Morocco’s state grains office ONICL received no offers in a tender to import around 363,000 tonnes of U.S.-origin durum wheat as part of a reduced-tariff import quota tender
- WHEAT AND BARLEY TENDER: Tunisia’s state grains agency issued an international tender to purchase 100,000 tonnes of soft milling wheat and 100,000 tonnes of animal feed barley
- FEED WHEAT TENDER: Importers in the Philippines are tendering to purchase an estimated 168,000 tonnes of animal feed wheat
- WHEAT TENDER: Turkey’s state grain board TMO issued an international tender to purchase about 300,000 tonnes of milling wheat
- WHEAT TENDER: The Taiwan Flour Millers’ Association issued an international tender to purchase 48,875 tonnes of grade 1 milling wheat to be sourced from the United States
- WHEAT TENDER: Japan’s Ministry of Agriculture sought 81,853 tonnes of food-quality wheat from the United States and Canada in a regular tender.
- WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of milling wheat
- WHEAT FLOUR TENDER: The state purchasing agency in Mauritius issued an international tender to buy 47,000 tonnes of wheat flour to be sourced from optional origins
DOE: U.S. Ethanol Stocks Fall 1.6% to 21.223M Bbl
According to the U.S. Department of Energy’s weekly petroleum report.
- Analysts were expecting 21.519 mln bbl
- Plant production at 0.933m b/d, compared to survey avg of 0.975m
GRAIN EXPORT SURVEY: Corn, Soy, Wheat Sales Before USDA Report
Estimate ranges are based on a Bloomberg survey of six analysts; the USDA is scheduled to release its export sales report on Thursday for week ending Aug. 19.
- Corn est. range 500k – 1,100k tons, with avg of 757k
- Soybean est. range 1,000k – 2,600k tons, with avg of 1,610k
USDA Stands By Forecast for American Soybean Exports to China
USDA chief economist Seth Meyer defended the agency’s outlook for U.S. soybean exports to China against any criticism that it may be too high.
- While China’s overall buying has been slow, USDA is “doing more than a simple pace analysis” and expects additional purchases to start showing up, Meyer says during a soy industry conference
- NOTE: Latest WASDE forecasts 2021-22 U.S. soybean exports at 55.93m, down from 61.51m in the 2020-21 season
Largest Reservoir in US Enacts Conservation Measures
Lake Mead, the largest reservoir in the US, has enacted measures to conserve up to 180,000 acre-feet of water over the next three years — which is expected to raise the water level there by 3 feet at a time of drought across the western US. According to the US Bureau of Reclamation, area farmers participating in this new program will be paid to fallow a portion of their land over the next three years, with the conserved water then being added to Lake Mead. According to the US Drought Monitor, much of California, Nevada, and Arizona — areas served by Lake Mead — is locked in exceptional drought. Areas of the US Corn Belt have been hit by drought conditions also rocking the West Coast this summer, damaging crops this year.
Western Canada Grain Shipments Fall 37% From Year Ago: Quorum
Grain shipments from Western Canadian port terminal elevators for the second week of August are 24% below the three-year average, according to grain transportation monitoring company Quorum Corp.
- Country elevators are at 40% working capacity, down 12% y/y, Quorum says Wednesday in report
- Western Canadian port terminal elevators at 51% working capacity, down 14% y/y
Russia’s 2021 grain harvest progress as of Aug 25
Russia, one of the world’s largest grain exporters, has harvested 86.4 million tonnes of grain before drying and cleaning with an average yield of 2.80 tonnes per hectare, data from the agriculture ministry showed on Wednesday. Farmers have already sown winter grains for next year’s crop on 1 million hectares, down from 1.5 million hectares as of the same date in 2020, the data said.
Malaysia Aug. 1-25 Palm Oil Exports to EU 262,971 Tons: SGS
- EU imported 262,971 tons; -33.2% m/m
- China imported 94,724 tons; -50.1% m/m
Belarus suspends grain exports after poor harvest
Belarus has imposed a six-month grain export ban because of a poor, weather-hit harvest, the government said on Thursday. The country has completed the 2021 harvest, threshing 6.2 million tonnes of grain compared with 7.2 million tonnes in 2020. The government resolution said the ban applies to wheat, rye, corn and other types of grain and cereals.
Indonesia’s B40 biodiesel plan faces new delay due to palm price
Indonesia’s plans to raise the mandatory bio-content in its palm oil-based biodiesel to 40% may face further delays, after the high price of the vegetable oil has made the programme too costly, a senior government official told Reuters.
Indonesia, the world’s largest palm oil producer and exporter, has a mandatory biodiesel programme with 30% palm oil content, known as B30, but intends to expand the use of the oil for energy to save on fuel imports.
Authorities had planned to increase the mix to 40% in July this year, but the timetable for the B40 programme is now unclear.
“We don’t have a timeline yet for B40, although from the technical side, we’re ready,” Dadan Kusdiana, a director general at the energy ministry, said in an interview. He said implementing B40 in 2022 will be “challenging”.
Indonesia funds its biodiesel programme with proceeds from palm export levies.
Indonesia Sees Rainy Season Starting Early This Year: Agency
Indonesia’s weather agency forecasts early rainy season in almost half of the country’s weather zones, starting Sept.-Oct.
- Agency expects rainy season to last until March with normal intensity of rainfall in most of the zones, said Dwikorita Karnawati, head of the weather agency that is locally known as BMKG, on Thursday
- Only 26% of the zones to see higher intensity
- Agency warns of extreme weather in Oct.-Nov., with heavy rains and strong winds, and forecasts peak of rainy season in Jan.-Feb.
- Agency sees neutral weather pattern, with a probability of La Nina emerging at end of this year
- Last year’s La Nina resulted in 40% higher intensity of rainfall in Indonesia
- Lower intensity of rainfall may occur in eastern coasts of Aceh, North Sumatra and Riau in Feb.
China pork production to decline by 14% in 2022 -USDA attache
Following are selected highlights from a report issued by the U.S. Department of Agriculture’s Foreign Agricultural Service (FAS) post in Beijing:
“In 2022, China’s hog production is forecast to decline by 5%. Low prices and disease outbreaks in 2021 led to significant slaughter and delayed restocking. Pork production in 2022 will decline by 14% as fewer hogs come to market and government policies designed to limit price fluctuations inadvertently undermine expansion. Pork imports will rise to 5.1 million MT (metric tons) as consumer demand for pork exceeds domestic production. Cattle and beef production will grow slowly in 2022. High beef prices will encourage investments by large producers. However, small producers with poor herd genetics and space constraints will continue to dominate production. Cattle imports will be stable at 350,000 head. Beef imports will grow to reach 3.3 million MT, but at a slower rate, as high beef prices are balanced by more diverse beef suppliers entering the market.”
Fertilizer Spikes to 9-Year High as Farmers Vie for Supply
- Rising commodity prices are fueling demand for the chemicals
- Fertilizer has become so expensive, farmers may curb purchases
Fertilizer is seeing fierce demand and constraints on supplies at the same time, making it the latest market with prices touching near-decade highs.
Farmers are throwing more fertilizer onto their fields in pursuit of bigger corn, soy and wheat yields, because those crops have become so valuable. As a result, global fertilizer costs are at the highest since 2012. It may be at the point where U.S. farmers have to curb their purchases, according to a Rabobank report.
Besides demand, a number of other factors are helping to drive up prices for the crop fertility chemicals. There are elevated freight rates, increased tariffs, bigger energy costs and supply constraints for nitrogen, potash and phosphate.
Shipping Issues a Concern for Soybeans
Issues with the availability of shipping containers in the wake of Covid-19 has impacted the US soybean industry, members of the US Soybean Export Council and Specialty Soya and Grains Alliance said in a joint press conference Wednesday. Members of the council say that difficulties in securing timely shipments of US exports to countries where storage is limited is hurting some of their customers. “This has been frustrating for many of us that rely on container supply,” says Bob Sinner of the SSGA. “This whole transition… has been really challenging for us and frustrating for our customers.” Both groups advocate for legislation out of Congress to help ensure the availability of shipping containers at US ports.
Argentina forms agency to manage cargo river, grain exporters worry
Argentina said on Wednesday it had formed a new government agency to manage dredging operations needed to ensure navigation of the Parana River, which carries about 80% of the country’s grains exports from the Pampas farm belt out to sea.
For decades, cargo ships have paid tolls directly to the private dredging company in charge of keeping the river open.
Industry executives worry that government intervention in the waterway will heap bureaucracy and extra costs on the grains export sector, which is the main source of hard currency needed to refresh central bank dollar reserves strained by a three-year recession exacerbated by the COVID-19 pandemic.
The National Ports Administration has been given authority over the next 11 months to subcontract management of the waterway, while the Transportation Ministry evaluates bids from dredging companies for the long-term concession to follow.
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.