Global Ag News for Dec 12.22

TOP HEADLINES

USDA Cuts Ukraine Corn Crop Outlook 4.5m Tons on Harvest Delays

Ukraine’s 2022 corn harvest is now seen “sharply lower” at 27m tons, down from November outlook for 31.5m tons, the USDA says in its monthly WASDE report.

  • Cut due to harvest delays, spurred by the ongoing war and record-setting autumn rainfall in three key oblasts
  • Export outlook raised to 17.5m tons, versus 15.5m tons

FUTURES & WEATHER

Wheat prices overnight are up 12 1/4 in SRW, up 9 1/2 in HRW, up 4 3/4 in HRS; Corn is up 4; Soybeans down 20 1/4; Soymeal down $0.76; Soyoil down 0.72.

For the week so far wheat prices are up 9 1/2 in SRW, up 8 1/4 in HRW, up 3 in HRS; Corn is up 1 1/4; Soybeans down 22 1/4; Soymeal down $0.87; Soyoil down 0.94.

For the month to date wheat prices are down 49 in SRW, down 57 1/4 in HRW, down 36 3/4 in HRS; Corn is down 19; Soybeans down 6; Soymeal up $45.00; Soyoil down 11.46.

Year-To-Date nearby futures are down -8% in SRW, up 6% in HRW, down -6% in HRS; Corn is up 7%; Soybeans up 10%; Soymeal up 15%; Soyoil up 9%.

Chinese Ag futures (MAR 23) Soybeans down 50 yuan; Soymeal down 20; Soyoil down 192; Palm oil down 340; Corn up 2 — Malaysian palm oil prices overnight were down 258 ringgit (-6.46%) at 3737.

There were changes in registrations (-87 SRW Wheat). Registration total: 2,968 SRW Wheat contracts; 2 Oats; 308 Corn; 91 Soybeans; 749 Soyoil; 291 Soymeal; 495 HRW Wheat.

Preliminary changes in futures Open Interest as of December 9 were: SRW Wheat up 2,512 contracts, HRW Wheat up 1,238, Corn down 6,409, Soybeans down 1,462, Soymeal down 1,745, Soyoil down 126.

Brazil Grains & Oilseeds Forecast: Rio Grande do Sul and Parana Forecast: Isolated to scattered showers through Tuesday. Temperatures near to above normal through Tuesday. Mato Grosso, MGDS and southern Goias Forecast: Scattered showers through Tuesday. Temperatures near normal through Tuesday.

Argentina Grains & Oilseeds Forecast: Cordoba, Santa Fe, Northern Buenos Aires Forecast: Mostly dry Monday-Tuesday. Temperatures near to above normal Monday-Tuesday. La Pampa, Southern Buenos Aires Forecast: Mostly dry Monday-Tuesday. Temperatures near to above normal Monday-Tuesday.

Northern Plains Forecast: Scattered showers Monday, heavy snow and blizzard conditions Tuesday. Temperatures near to above normal Monday, below normal west and above normal east Tuesday. Outlook: Heavy snow and blizzard conditions Wednesday. Lingering light snow Thursday-Friday. Mostly dry Saturday-Sunday. Temperatures below normal west and above normal east Wednesday, below to well below normal Thursday-Sunday.

Central/Southern Plains Forecast: Scattered showers Monday-Tuesday. Temperatures above normal Monday-Tuesday. Outlook: Snow possible north Wednesday-Thursday. Mostly dry Friday-Sunday. Temperatures below normal Wednesday-Sunday.

Western Midwest Forecast: Mostly dry Monday. Scattered showers Tuesday. Temperatures above normal through Tuesday.

Eastern Midwest Forecast: Mostly dry Monday. Scattered showers Tuesday. Temperatures above normal through Tuesday. Outlook: Scattered showers Wednesday. Lingering snow Thursday-Sunday. Temperatures above normal Wednesday, near to below normal Thursday-Sunday.

The player sheet for Dec. 9 had funds: net sellers of 5,000 contracts of SRW wheat, buyers of 1,500 corn, sellers of 2,000 soybeans, buyers of 1,500 soymeal, and  sellers of 3,000 soyoil.

TENDERS

  • U.S. CORN EXPORT FORECAST REDUCED: U.S. domestic corn stocks will be larger than previously thought at the end of the 2022/23 marketing year as rising competition cuts demand for U.S. exports, the government said on Friday. The U.S. Agriculture Department in a monthly report lowered its forecast for U.S. 2022/23 corn exports to 2.075 billion bushels (52.71 million tonnes), from 2.150 billion (54.61 million tonnes) last month.
  • CORRIDOR FOR UKRAINIAN GRAIN: Belarus told the United Nations on Friday that it would allow, without preconditions, the transit of grain from Ukraine through its territory for export from Lithuanian ports, a U.N. spokesman said.

PENDING TENDERS

  • FEED WHEAT AND SOYMEAL TENDER: A group of importers in the Philippines issued an international tender to purchase up to 110,000 tonnes of feed wheat and up to 135,000 tonnes of soymeal to be sourced from optional origins
  • CORN TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued new international tenders to purchase around 25,000 tonnes of food-quality soybeans free of genetically modified organisms (GMOs)
  • 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 via a simultaneous buy and sell (SBS) auction that will be held on Dec. 14.
  • RICE TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of rice

News of the world

TODAY

SOYBEAN/CEPEA: Firm demand and low moisture in Argentina raise soybean meal prices

The export premium for soybean meal rose high in Brazil this week, reflecting the firm demand from abroad and, majorly, concerns about the supply of this by-product in Argentina in the 2022/23 season – the hot and dry weather is hampering soybean sowing in Argentina, the number one exporter of soybean by-products.

As the observed in recent years, due to the low supply of soybean, Argentina imported the product, while the international demand for by-products was reallocated to Brazil and the United States. It is important to highlight that China has been increasing meal imports.

According to the Bolsa de Cereales, 37.1% of 16.7 million hectares had been sown in Argentina by Wednesday, 7. 19 percentage points behind that in the same period last season.

At CME Group (Chicago Mercantile Exchange), the Dec/22 contract for soybean meal rose by a staggering 11.5% between Dec. 1st and 8th, to USD 469.30/short ton (USD 517.31/ton) on Thursday, 8, returning to the level from mid-September. Cepea calculations show that the share of soybean meal in the industry’s crush margin was 60.3% on Thursday, 8, the highest since August 4th.

Besides the international demand, meal quotations in Brazil are being boosted by the export premiums. Based at the port of Paranaguá (PR), the export premium for soybean for shipment in Jan/23 had bids at USD 27/ton and asks at USD 33/ton, higher than the USD 15/ton (bid) and the USD 21/ton (ask) from last Thursday. Thus, on the average of the regions surveyed by Cepea, the prices for soybean meal rose 3.1% in the last seven days.

According to data from Secex, although exports decreased 11.4% between October and November, Brazil exported 1.55 million tons of the product last month, the highest volume for a month of November. This year, Brazil has exported the record volume of 19.25 million tons of soybean meal, 24.4% up from that shipped in the same period last year. The major destination for the Brazilian soybean in 2022 is Indonesia.

SOYBEAN – Soybean prices have been underpinned by the valuation of soybean meal and the firm demand from abroad. In Brazil, the upward trend of prices has been limited by expectations for a record output in the 22/23 season, whose harvesting will soon begin in Mato Grosso. The Brazilian soybean production is estimated at 153.47 million tons by Conab, 22.2% higher than the output from 21/22. Still according to Conab, of the 43.4 million hectares to be sown with soybean in Brazil, 90.7% have already been sown.

Between Dec. 1st and 8th, the ESALQ/BM&FBovespa Paranaguá (PR) Index rose by 1.2%, to BRL 182.84 (USD 35.08) per 60-kilo bag on Thursday, 8th. The CEPEA/ESALQ Paraná Index increased by 1.3%, closing at BRL 179.39 (USD 34.42) per 60-kilo bag. On the average of the regions surveyed by Cepea, prices rose by 0.2% in the over-the-counter market (paid to farmers) but dropped by 0.4% in the wholesale market (deals between processors). The US dollar rose by 0.1%, to BRL 5.212 on Thursday.

CORN/CEPEA: With agents monitoring the weather in Southern BR and exports, liquidity is low

Corn deals have been sporadic in the Brazilian market, with agents monitoring both the possible effects of the current high temperatures in southern Brazil on the development of the summer crop and the good exports performance. Corn prices dropped in the interior of Brazil, however, devaluations were even steeper at ports, due to price drops abroad and the dollar depreciation.

Between December 1st and 8th, on the average of the regions surveyed by Cepea, prices dropped by 0.9% in the over-the-counter market (paid to farmers) and by 0.4% in the wholesale market (deals between processors). In Campinas (SP), farmers have limited supply, leading purchasers to search for corn in central-western Brazil – however, it is important to highlight that many purchasers have had logistic issues. Between December 1st and 8th, the ESALQ/BM&FBovespa Index for corn dropped 0.1%, to BRL 85.9 (USD 16.48) per 60-kilo bag on Thursday, Dec. 8th.

PORTS – The recent devaluations at ports have limited deals this week. At the ports of Paranaguá (PR) and Santos (SP), quotations dropped 2.9% and 0.2%, respectively. The dollar, which hit BRL 5.28 on Monday, 5, closed at BRL 5.212 on Thursday, 8.

Despite the recent decrease in the liquidity of corn, Conab has revised up Brazil’s exports estimates in the 2021/22 season, from 38 million tons in November to 41.5 million tons in December. Agents from Anec believe corn shipments will total 42.59 million tons, two-fold the amount exported in 2021, which would be a new record. In December, exports may hit 5.43 million tons. In this context, by the end of the season (Jan/23) ending stocks would total 7.1 million tons, according to Conab’s estimates.

ESTIMATES 2022/23 – On Thursday, 8, Conab released a report estimating the Brazilian output in the 22/23 season at 125.82 million tons, 11% higher than that in the previous crop (2021/22) and a record. However, compared to data from November, estimates are 0.5% lower, due to the lack of rains in Rio Grande do Sul and mild temperatures in Paraná and in Santa Catarina, which have been delaying the development of the summer crop.

Thus, corn production in the 2022/23 season is forecast at 27.22 million tons, lower than the 28.15 million tons estimated in November but still above the 25.02 million tons from 21/22.

However, for the second and third crops, estimates have been more optimist, and, so far, no negative adjustments have been made, and productions are forecast at 96.27 million tons and 2.33 million tons, 12% and 10% higher, respectively.

Thus, considering initial stocks + output + imports, the domestic availability of corn is expected to be 10% higher in 2022/23 compared to that in 21/22, at 135.51 million tons. With production being high in 2023, exports may continue high too, hitting 45 million tons. By the end of the season (Jan/24), ending stocks are forecast at 9.71 million tons, 0.1% above the average of the last five seasons.

CROPS – Although low rainfall and high temperatures have been concerning Brazilian farmers, sowing of the summer crop advanced nearly 3 percentage points between Nov. 26th and Dec. 3rd, reaching 71.2% of the national area, according to data from Conab.

Malaysia’s Oct industrial production up 4.6%, below forecast

Malaysia’s industrial production in October rose 4.6% from a year earlier, below expectations, government data showed on Monday.

October’s factory output had been forecast to expand 8.1%, according to 10 economists surveyed in a Reuters poll.

China’s 2022 soybean output rebounds, corn slightly rises

  • Soybean output up 23.7% to 20.3 mln T
  • Government encouraged more soybean planting this year
  • Corn output up 1.7% on good weather

China’s 2022 soybean crop jumped almost 24%, while corn and wheat output also saw small increases, official data showed on Monday.

Rice output, however, fell 2% to 208.5 million tonnes due to declining acreage and severe drought and high temperatures in southern China that hurt yields, said the National Statistics Bureau.

Wheat output rose 0.6% from a year earlier to 137.72 million tonnes.

China issued a series of policies this year to promote higher production of soybeans, including double-cropping with corn, amid concerns the country was too reliant on imports.

Soybean output rose 23.7% to 20.3 million tonnes, as the acreage planted with the oilseed jumped 21.7%.

High temperatures and rainy weather in Northeast China also helped soybean yields, said Ma Wenfeng, senior analyst at the Beijing Orient Agribusiness Consultant Co Ltd, in a report ahead of the data’s release.

The increase brought production back to slightly higher than 2020 when output reached 19.6 million tonnes. The crop had shrunk last year after record corn prices encouraged farmers to plant more corn instead. (Full Story)

Corn output was up 1.7% to 277.2 million tonnes, even as the acreage sown with corn shrank slightly and less high-yield corn was planted due to the change in planting more soybeans, said the bureau.

Good weather across the northern China region increased corn production in a major growing area, more than compensating for a hit to output in the parched south.

Ukraine’s Odesa port resumes operations – infrastructure ministry

Ukraine’s Black Sea port of Odesa has resumed operations that had been suspended after a Russian attack on the region’s energy system, a spokesperson for the infrastructure ministry said on Monday.

Russia has since October been targeting Ukraine’s energy infrastructure with waves of missile and drone strikes.

Ukrainian Agriculture Minister Mykola Solsky said on Sunday that two other ports – Chornomorsk and Pivdennyi – that are authorised to export grains from Ukraine under a deal between Russia and Ukraine were partially operating.

US Beef Production Falls 1.7% This Week, Pork Down: USDA

US federally inspected beef production falls to 545m pounds for the week ending Dec. 10 from 554m in the previous week, according to USDA estimates published on the agency’s website.

  • Cattle slaughter down 1.7% from a week ago to 652m head
  • Pork production down 0.7% from a week ago, hog slaughter falls 0.7%
  • For the year, beef production is 1.5% above last year’s level at this time, and pork is 2.2% below

 Egypt Wheat Stockpiles Sufficient Until May 7: Supply Minister

Egypt will start local wheat purchases for new season 2023 by mid-April, supply minister Aly El-Moselhy says via DMC channel.

  • Egypt wheat inventories are enough until May 7
  • Vegetable oil stockpiles are sufficient for 5.7 months, sugar for 3.4 months and rice for 6.5 months, supply ministry says

Brazil Fertilizer Import Prices Discounted Compared With US

Brazil’s fertilizer prices are discounted vs. the US Gulf, with urea at a roughly $11.86 a metric ton (mt) discount, mono-ammonium phosphate (MAP) down $54.65/mt and MOP by about $20.64/mt. Urea prices in Brazil are at a discount to most other global destinations, with import prices falling below levels in Egypt, Southeast Asia and the Middle East.

Brazil Urea Prices Fall, Potash Firms as Phosphate Stays Stable

Urea prices in Brazil fell to $510-$530 a metric ton (mt) this week vs. last week’s $530-$550 amid limited buyer interest. Monoammonium phosphate (MAP) prices remained at $600-$630/mt, unchanged from last week, while Brazil potash prices rebounded slightly to $520-$540/mt vs. last week’s $500-$530. The uptick in potash isn’t likely to continue, however, as sellers are expected to drop prices to the $500 level again to generate new business.

Urea prices in Brazil are at a discount to most other global destinations, with import prices falling below current levels in Egypt, Southeast Asia and the Middle East.

US Fertilizer Imports From Russia Are Climbing as Prices Drop

A rise in US fertilizer imports from Russia are helping keep pressure on prices, which have fallen back after hitting records earlier this year.

Prices for fertilizer in North America have nearly halved since March, when the Green Markets fertilizer price index surged to a record $1,270 per short ton after Russia’s invasion of Ukraine threw the world’s crop-nutrient sector into disarray.

Falling prices are bringing relief to farmers, who have faced rising costs for everything that goes into growing food, from chemicals and fuel to equipment and labor. An easing of cost pressures could encourage farmers to plant more acres and apply more fertilizer, boosting production and helping to eventually bring down the cost of food for consumers experiencing historic inflation.

Farmers in the US and Brazil have been postponing purchases to await lower prices, creating gluts at some supply hubs. And US imports of fertilizer from Russia are approaching normal levels from before the war, according to data by Bloomberg, IHS and Genscape.

Fertilizer companies are holding firm that prices will rise again next year as farmers look to buy for 2023 planting seasons. But Mosaic Co., one of the largest producers, temporarily curtailed production of the fertilizer potash this month, citing weaker demand.

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