Global Ag News for Aug 31st

Pakistan Boosting Food Imports as Afghan Demand Pressures Prices

Wheat prices overnight are down 4 1/4 in SRW, down 1 1/2 in HRW, down 5 1/2 in HRS; Corn is down 3/4; Soybeans up 3/4; Soymeal up $0.18; Soyoil down 0.35.

For the week so far wheat prices are down 13 1/4 in SRW, down 13 in HRW, down 13 1/2 in HRS; Corn is down 11 1/2; Soybeans down 19 1/4; Soymeal down $0.34; Soyoil down 1.04.

For the month to date wheat prices are up 6 1/4 in SRW, up 26 3/4 in HRW, up 13 1/4 in HRS; Corn is down 3 1/4; Soybeans down 45 1/4; Soymeal down $4.90; Soyoil down 3.78.

Chinese Ag futures (JAN 22) Soybeans down 72 yuan ; Soymeal down 18; Soyoil down 34; Palm oil down 42; Corn up 2 — Malasyian Palm is down 79. Malaysian palm oil prices overnight were down 79 ringgit (-1.82%) at 4254.

Midwest corn, soybean and winter wheat forecasts: West: Isolated to scattered showers south through Tuesday. Mostly dry Wednesday. Scattered showers north Thursday-Friday. Temperatures near to above normal through Friday. East: Isolated to scattered showers south through Wednesday, could be heavy. Mostly dry Thursday. Isolated showers Friday. Temperatures above normal Monday, near to above normal Tuesday, near normal Wednesday-Friday. 6 to 10 day outlook: Isolated to scattered showers Saturday-Wednesday. Temperatures near to above normal Saturday-Sunday, near normal Monday-Wednesday.

The player sheet for Aug. 30 had funds: net sellers of 6,500 contracts of  SRW wheat, sellers of 16,000 corn, sellers of 11,500 soybeans, sellers of 3,500 soymeal, and  sellers of 4,000 soyoil.

Preliminary changes in futures Open Interest as of August 30 were: SRW Wheat down 4,664 contracts, HRW Wheat up 3,648, Corn down 17,798, Soybeans down 4,998, Soymeal down 2,414, Soyoil down 3,385.

There were no changes in registrations 1,000 SRW Wheat, 47 Oats. Registration total: 1,000 SRW Wheat contracts; 47 Oats; 0 Corn; 0 Soybeans; 249 Soyoil; 1 Soymeal; 1,288 HRW Wheat.


  • WHEAT SALE: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), said on Monday it had bought 120,000 tonnes of Romanian wheat and 60,000 tonnes of Ukrainian wheat in an international tender.
  • SOYBEAN SALE: The U.S. Department of Agriculture confirmed private sales of 256,000 tonnes of U.S. soybeans to China for delivery in the 2021/22 marketing year that begins Sept. 1.
  • CORN SALE: The Korea Feed Association (KFA) purchased about 66,000 tonnes of corn expected to be sourced from South America or South Africa in an international tender which closed on Friday
  • CORN TENDER: Taiwan’s MFIG purchasing group has issued an international tender to buy up to 65,000 tonnes of animal feed corn which can be sourced from the United States, Brazil, Argentina or South Africa
  • WHEAT TENDER: Algeria’s state grains agency OAIC has issued an international tender to buy milling wheat to be sourced from optional origins


  • FEED WHEAT TENDER: An importer in the Philippines is tendering to purchase an estimated 60,000 tonnes of animal feed wheat,
  • WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of milling wheat
  • WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy 120,000 tonnes of milling wheat which can be sourced from optional origins
  • 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 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

 USDA CROP PROGRESS: Corn Conditions 60% G/E, Soybeans 56%

Highlights from the report:

  • Corn 60% G/E vs 60% last week, and 62% a year ago
  • Corn dented 59% vs 41% last week, and 60% a year ago
  • Corn dough 91% vs 85% last week, and 93% a year ago
  • Corn mature 9% vs 4% last week, and 11% a year ago
  • Soybeans 56% G/E vs 56% last week, and 66% a year ago
  • Soybean drop leaves 9% vs 3% last week, and 7% a year ago
  • Spring wheat harvest 88% G/E vs 77% last week, and 66% a year ago
  • Cotton 70% G/E vs 71% last week, and 44% a year ago
  • Sorghum 58% G/E vs 62% last week, and 50% a year ago

World’s Top Canola Grower Anticipates Smallest Crop in 9 Years

  • Canada also expects drop in spring wheat output due to drought
  • Forecast drop in Canadian grains comes as food inflation rises

The world’s biggest canola grower expects to harvest its smallest crop of the oilseed in nine years after high temperatures and drought slashed yields.

Canada is expected to harvest 14.7 million metric tons of canola this year, down almost a quarter from the prior year and its lowest since 2012, Statistics Canada said Monday in a production report. Wheat output is forecast to plunge to a 14-year low.

Wheat production is forecast at 22.9 million metric tons, down 35% from last year and the lowest since 2007 due to lower anticipated yields and less harvested area. The drop is largely attributable to spring wheat, which has been hurt by drought in Western Canada.

Other highlights from the report:

  • Corn for grain production is projected to rise 0.8% to 13.7 million metric tons due to higher yields despite a drop in harvested area.
  • Soybean production is forecast at 5.8 million metric tons in 2021, down 8.4% due to lower yields even with more acres planted.
  • Barley output is expected to fall 27% to 7.8 million metric tons due to hot and dry conditions, with yields seen falling 32% to 48.1 bushels per acre.
  • Oat production is pegged at 3.1 million tons, a 33% drop on a lower harvested area. Yields are expected to tumble 22% to 71.4 bushels per acre.

USDA attache sees Brazil cattle and hog herds expanding in 2022

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

“Post forecasts that the cattle herd will grow 4% in 2021 and 2022, while beef production is forecast to decrease 6% in 2021, reaching 9.5 million tons Carcass Weight Equivalent (CWE), but increase 2% in 2022. Post forecasts beef consumption for 2021 at 6.93 million tons (CWE), which is an 8% decrease from 2020, mainly due to rising beef prices, while consumption should increase 2% in 2022. Post forecasts an increase of almost 2% in the pig crop in 2022 and a 2% growth in domestic pork consumption. Pork production growth is forecast at almost 5% in 2021 and 3.5 percent in 2022, reaching 4.47 million tons (CWE), reflecting continued strong exports to China, and improved domestic demand, and more stable feed costs in the second semester of 2021 onwards.”

CROP SURVEY: U.S. Soybean Crush and Corn for Ethanol

The following is from a Bloomberg survey of five analysts.

  • Soybean crush seen at 165.2m bu in July, a 10.4% drop from year ago
  • Crude and once-refined soybean-oil reserves at end of July seen at 2.136b lbs, up from 2.123b
  • Corn used in ethanol production seen up 5.8% y/y to 448.8m bu
  • The USDA is scheduled to release its July Fats and Oils report along with the Grain Crushings report on Sept. 1 at 3pm

U.S. Inspected 563k Tons of Corn for Export, 377k of Soybean

In week ending Aug. 26, according to the USDA’s weekly inspections report.

  • Soybeans: 377k tons vs 240k the previous wk, 821k a yr ago
  • Wheat: 317k tons vs 729k the previous wk, 535k a yr ago
  • Corn: 563k tons vs 745k the previous wk, 424k a yr ago

U.S. Corn, Soybean, Wheat Inspections by Country: Aug. 26

  • Mexico was the top destination for corn, soybean and wheat shipments
  • China was the destination for 71k tons of soybeans and 139k tons of corn

Ethanol Lobby Urges EPA to Expand E15 to Curb Ida ‘Price Spikes’

Renewable Fuels Association calls on the U.S. EPA to allow fuel-terminal operators, blenders and marketers to increase use of ethanol to “fill the void in gasoline supplies created by refinery shutdowns in the Gulf Coast.”

  • EPA action would allow many retailers who don’t sell E15 blend to start offering it: RFA
  • Agency also should enable existing E15 retailers to keep selling the fuel through rest of summer season, RFA says in a letter to EPA chief Michael Regan
  • NOTE: Almost 12% of U.S. refining capacity has been affected in wake Hurricane Ida

Russian Wheat Yields Are Down So Far From Last Year: Ministry

Russian farmers harvested 21.5m hectares of wheat as of Aug. 30, versus about 20.1 hectares as of a similar time last year, according to datafrom the Agriculture Ministry’s analytical center. The average wheat yield is 3.03 tons/hectare, compared with 3.51 tons/hectare last year

Egypt’s Wheat Purchases Are Running 31% Behind Last Year

  • The nation booked Romanian, Ukrainian wheat in tender Monday
  • Russian grain has been uncompetitive lately in tenders

Egypt’s state buyer bought 180,000 tons of wheat in a tender on Monday, putting its total purchases for the 2021-22 season about 31% below a similar time last year.

Pakistan Boosting Food Imports as Afghan Demand Pressures Prices

Pakistan is stepping up food imports as it sees a surge in demand for staples in neighboring Afghanistan inflating prices at home.

“If demand from Afghanistan increases and we don’t have sufficient stocks, it will put pressure on prices,” Pakistan’s Finance Minister Shaukat Tarin said in a text message. “So we have made arrangements.”

Prime Minister Imran Khan’s government plans to import 500,000 tons of sugar and 550,000 tons of wheat, as it seeks to keep a lid on inflation which has breached the upper limit of the central bank’s 7%-9% target range for four out of seven months this year. The purchases also coincide with an as much as 35% increase in prices of food essentials like flour and oil in Kabul in recent weeks, reflecting supply disruptions in a nation in disarray after the Taliban’s takeover.

Landlocked Afghanistan has historically relied on Pakistan to meet its needs for everything from cereals to pharmaceutical products. Kabul purchased $871 million worth of goods from Islamabad last year, with food items accounting for 34% of the total, according to Trading Economics.

WHEAT/CEPEA: Nearness of the harvesting presses down values in Brazil

Despite the low wheat supply and high demand for wheat bran in the Brazilian market, wheat prices are currently fading. Pressure comes from the nearness of the harvesting in Brazil – activities are expected to begin in September.

Thus, agents from mills opted for waiting for the new crop to arrive at the national spot market in order to resume closing deals for higher volumes. Besides, despite the recent frosts and water deficit at Brazilian wheat crops, production may be a record this season, which raises expectations for lower prices.

CROPS – In Paraná, data from Seab/Deral show that production estimates for the state were revised down to 3.72 million tons, due to the drought and recent frosts. However, the output forecast for PR is still 17% higher than that in the previous season, which totaled 3.19 million tons. Rains forecast for the end of August may favor crops productivity. Until August 23, 58% of the wheat crops in Paraná were in good conditions; 30%, in average conditions; and 12%, in bad conditions – compared to that in the previous week, crops conditions worsened last week.

In Rio Grande do Sul, according to data from Emater released on August 26, rainfall in the second fortnight of the month favored crops, but development is still slow in drier areas – until the end of the month, less than 10 mm are forecast for most state.

Ukraine Delays Setting Wheat Export Target Until Sept. 27

Ukraine’s government and largest grain traders agreed to set target for wheat exports in the 2021-22 marketing year on last Monday of September, Ukrainian Grain Association head Mykola Horbachov tells Bloomberg News by phone.

  • Currently, two sides discussing curbs only for wheat exports
  • Target, which is usually set every year in August, will be approved later due to delays in harvesting, deputy economy minister, Taras Vysotskyi, says in separate message
  • NOTE: Usually Ukraine’s government, shippers set target for wheat, corn exports in the beginning of every marketing year to calm fears of domestic millers, bakers that abundant sales of grain abroad will raise cost of bread
  • Target is not a strict limit, could be slightly exceeded

USDA forecasts $2.4 billion in US ethanol exports for FY 2022

The USDA predicts fiscal year (FY) 2021 ethanol exports will be at $2.2 billion, down $60 million when compared to FY 2020. Moving into FY 2022, however, U.S. ethanol exports are expected to reach $2.4 billion, up $200 million from FY 2021.

The agency made those predictions in its latest quarterly trade forecast, released Aug. 26. Beginning with this latest quarterly trade forecast, the USDA said it is adopting the World Trade Organization’s definition of “agricultural products,” which adds ethanol, distilled spirits and other products to the agency’s previous definition of agricultural products.

According to the Aug. 26 export forecast, the USDA currently predicts U.S. ethanol exports for FY 2022 will reach $2.4 billion, up $200 million from FY 2021 on volume and unit value gains. The agency said higher expected corn prices keep ethanol unit values elevated. Modest volume gains are projected for many markets, as gasoline fuel markets continue to recover and demand for industrial ethanol grows with the economic recovery and continued elevated demand for disinfectants.

For FY 2022, the largest export gains for U.S. ethanol are expected for Brazil and the U.K. The USDA said an expected sharp sales increase to Brazil is supported by the recent drought and frost damage that lowered sugarcane yields, higher sugar prices, and ongoing fuel recovery demand. The U.K. is raising its fuel ethanol blend to E10 this fall, increasing their overall demand, the agency added. India’s push to meet its E20 by 2025 continues to expand the demand for industrial ethanol. Uncertainty persists on the future of fuel ethanol exports to China, according to the USDA. The agency also said that the proportion of U.S. ethanol exports used as fuel remains at a historically low 60 percent since the pandemic eroded gasoline use and spurred demand for disinfectants.

For FY 2021, the USDA predicts ethanol exports will be at $2.2 billion, down $60 million from the previous year with higher export unit values only partially offsetting lower export volume. U.S. exports of fuel ethanol to Brazil in FY 2021 have fallen to levels not seen in a decade, according to the agency. In addition, Colombia’s lower blend mandate has reduced imports from the U.S. Exports sales to Mexico and Nigeria are also down from FY 2020 records, following the earlier demand surge for medical-grade ethanol. U.S. industrial ethanol sales to India are lower due to higher U.S. prices and the substitution of surplus sugar supplies to ethanol. U.S. fuel ethanol exports to China reached their second-highest level on record due to low, early-year U.S. prices, according to the USDA. U.S. sales to Canada are up on fuel demand recovery, while sales to South Korea are up due to record demand for industrial product.

Brazil’s Copersucar Teams Up With Vibra to Trade Ethanol

Vibra agreed to acquire 49.99% shares of the company from Copersucar, which will hold 50.01% of the venture that the companies say will be Brazil’s largest ethanol-trading firm.

  • Vibra distributes 6b to 6.5b liters of ethanol per year while Copersucar trades 4.5b and 5b liters from its ethanol mill members in Brazil, according to a statement Monday
  • The JV will be responsible for acquiring volume demanded by Vibra and for transporting production from Copersucar’s members
  • JV is free to acquire volumes from outside Copersucar and sell to other clients, besides Vibra
  • Deal closing depends on regulatory approvals

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.

Latest News & Market Commentary

Explore the latest edition of The Ghost in the Machine

Explore Now