Global Ag News for Jan 19 22

TODAY

Wheat prices overnight are up 12 3/4 in SRW, up 15 1/2 in HRW, up 18 1/4 in HRS; Corn is up 7 1/4; Soybeans up 14 3/4; Soymeal up $0.39; Soyoil up 0.86.

For the week so far wheat prices are up 39 1/2 in SRW, up 41 1/4 in HRW, up 44 1/4 in HRS; Corn is up 10 1/2; Soybeans up 4 3/4; Soymeal down $1.14; Soyoil up 1.49.  For the month to date wheat prices are up 11 in SRW, down 13 1/4 in HRW, down 56 3/4 in HRS; Corn is up 13 1/2; Soybeans up 36 3/4; Soymeal down $5.10; Soyoil up 3.41.

Chinese Ag futures (MAY 22) Soybeans up 14 yuan ; Soymeal down 8; Soyoil up 76; Palm oil up 168; Corn up 10 — Malasyian Palm is up 91. Malaysian palm oil prices overnight were up 91 ringgit (+1.81%) at 5125.

There were changes in registrations (-4 Oats, -55 Soybeans). Registration total: 1,900 SRW Wheat contracts; 21 Oats; 50 Corn; 316 Soybeans; 143 Soyoil; 0 Soymeal; 92 HRW Wheat.

Preliminary changes in futures Open Interest as of January 18 were: SRW Wheat up 3,938 contracts, HRW Wheat down 3,584, Corn down 12,327, Soybeans down 1,201, Soymeal up 2,704, Soyoil up 4,673.

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

Argentina Grains & Oilseeds Forecast: Cordoba, Santa Fe, Northern Buenos Aires Forecast: Isolated to scattered showers through Saturday. Temperatures below normal Tuesday-Wednesday, near normal Thursday-Saturday. La Pampa, Southern Buenos Aires Forecast: Isolated to scattered showers through Saturday. Temperatures below normal Tuesday-Wednesday, near normal Thursday-Saturday.

The player sheet for Jan. 18 had funds: net buyers of 15,500 contracts of  SRW wheat, buyers of 1,000 corn, buyers of 6,500 soybeans, sellers of 9,000 soymeal, and  buyers of 2,000 soyoil.

TENDERS

• WHEAT SALE: Turkey’s state grain board TMO provisionally purchased some 335,000 tonnes of wheat in an international tender seeking the same volume on Tuesday
• SOYBEAN SALE: The U.S. Department of Agriculture (USDA) on Tuesday reported private sales of 239,486 tonnes of U.S. soybeans to Mexico.
• SORGHUM SALE: The USDA on Tuesday reported private sales of 126,000 tonnes of U.S. sorghum to unknown destinations.
• BARLEY TENDER: Algerian state agency OAIC is believed to have purchased about 120,000 tonnes of animal feed barley to be sourced from optional origins in a tender which closed on Tuesday
• WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy a total of 72,351 tonnes of food-quality wheat from the United States and Canada in regular tenders that will close on Jan. 20.
• RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp has issued an international tender to purchase an estimated 46,344 tonnes of rice to be mainly sourced from China with some from Thailand
• RICE TENDER UPDATE: The lowest price offered in the tender from Bangladesh’s state grains buyer to purchase 50,000 tonnes of rice which closed on Sunday was $421.99 a tonne CIF liner out, officials and traders said
• FAILED WHEAT TENDER: Jordan’s state grain buyer the trade ministry is believed to have made no purchase in an international tender to buy 120,000 tonnes of milling wheat which closed on Tuesday, traders said.

PENDING TENDERS

• RICE TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of rice
• FEED WHEAT, BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said on Wednesday that it will seek 80,000 tonnes of feed wheat and 100,000 tonnes of feed barley to be loaded by Feb. 15 and arrive in Japan by March 17, via a simultaneous buy and sell (SBS) auction that will be held on Jan. 19.
• WHEAT TENDER: The Taiwan Flour Millers’ Association has issued an international tender to purchase 49,395 tonnes of grade 1 milling wheat to be sourced from the United States
• BARLEY TENDER: Turkey’s state grain board TMO has issued an international tender to purchase 345,000 tonnes of animal feed barley

U.S. Inspected 1.204m Tons of Corn for Export, 1.72m of Soybean

• Soybeans: 1,720k tons vs 985k the previous wk, 2,327k a yr ago
• Wheat: 369k tons vs 234k the previous wk, 284k a yr ago
• Corn: 1,204k tons vs 1,023k the previous wk, 934k a yr ago

U.S. NOPA December Soybean Processing Rises to 186.4M Bushels

The better-than-expected crush compares with 183.2m bushels a year earlier, National Oilseed Processors Association data released by Thomson Reuters showed Tuesday.

• The average estimate of analysts in a Bloomberg survey was 184.5m bu
• Soybean-oil inventories at the end of last month were 2.031b lbs, compared with 1.699b a year earlier; average estimate by analysts was 1.872b

Corn Acres to Take ‘Meaningful Hit’ If Nitrogen Stays High: Citi

U.S. corn plantings this year are seen increasing by “a mere 1.8%” amid higher fertilizer and energy inflation, Citi analysts including Aakash Doshi and Ed Morse said in a note.

• Overall, acreage for corn, soybeans, wheat, cotton is now estimated to expand 0.8% versus the prior year, lower than the 2.7% increase forecast in December
• Wheat is expected to increase by 3.3%, and planted area for soybeans and cotton could decrease by 1.4% and 1%, respectively: Citi
• “If nitrogen expense remains high in Feb-June this year, which is when farmers are likely to source fertilizer for the 2022/23 planting season, planted area growth could take a meaningful hit”
• A soy/corn price ratio of 2.25-2.30x, below the average historical ratio of 2.5x, “provides farmers an incentive to rotate out of soybeans and into corn. Less fertilizer-intense wheat prices could see larger gains versus corn”

EU Soft-Wheat Exports Rise 5.3% In Season Through Jan. 16

Soft-wheat shipments during the season that began July 1 reached 15.3m tons as of Jan. 16, versus 14.6m tons in a similar period a year earlier, the European Commission said Tuesday on its website.

• NOTE: Figures for the prior season include trade for the U.K. until Dec. 31, 2020, when the country departed the EU customs union
• Top soft-wheat destinations are Algeria (2.55m tons), Egypt (1.39m tons) and China (1.23m tons)
• EU barley exports at 4.91m tons, versus 4.15m tons a year earlier
  • China is the top market at 2m tons
• EU corn imports at 8.26m tons, against 9.58m tons a year earlier

Indonesia’s Gapki Sees 2021 Palm Oil Output at 51.3m Tons

The palm oil association estimates 51.3m tons of palm oil were produced by Indonesia in 2021, consisting of 46.89m tons of crude palm oil and 4.41m tons of palm kernel oil, Chairman Joko Supriyono says in a parliamentary hearing on Wednesday.

• Production in Nov. and Dec. seen at 4.01m tons and 3.98m tons, respectively
• The association, known as Gapki, sees 34.2m tons of palm oil exports in 2021, including 2.7m tons of CPO
• Indonesia seen consuming 18.3m tons of palm oil in 2021

Malaysia Jan. 1-15 Palm Oil to India 121,530 Tons: SGS 

Some of Malaysia’s palm oil export figures, according to estimates by independent cargo surveyor SGS Malaysia Sdn.

• India imported 121,530 tons; -12.7% m/m
• EU imported 92,240 tons; -43.8% m/m
• Rest of Asean imported 49,460 tons; -11.6% m/m

USDA attache sees Brazil 2021/22 soy crop at 136 million T

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

“Post lowered its 2021/22 forecast for soybean planted area to 40.4 million hectares (ha) and soybean production to 136 million metric tons (MMT). This season sowing began optimistically, with most soybeans planted on time compared to last year. However, extreme weather, with drought in some regions and excessive rain in others, has dampened prospects for a record crop. Post consequently also lowered the 2021/22 soybean export forecast to 88 MMT. Based on strong performance in the 2020/21 season, Post revised up the soybean export estimate to 88.5 MMT, a new record. For the 2021/22 MY, Post adjusted down slightly the soybean processing forecast to 46 MMT, and maintained the 2020/21 crush estimate at 46.5 MMT of soybeans. The crush forecast and estimate is driven by domestic soy oil demand, which will likely decline when the biofuel mandate is reduced to 10% in 2022. With China’s strong appetite for Brazilian soybeans, Brazilian soy stocks will hover at less than 5% of the domestic supply.”

Argentina Farm Drought Seen Curbing GDP by 1ppt, Rosario Says

A drought on the Pampas crop belt that’s reining in harvest estimates is expected to curb Argentina’s GDP in 2022 by $4.8b, or 1% of the IMF’s GDP forecast for the country, the Rosario Board of Trade said in a report.

• Soy and corn exports for the season are now seen $2.7b lower than the bourse’s forecast in September, a fall of 10%
• Government tax collection is seen $1.4b lower
• Less net income for farmers “will result in less freight, less financial and intermediation services, and less consumption,” impacting the overall economy
• NOTE: Rains in the last few days may have improved the outlook for crops in some areas

Argentina ends wheat harvest at a record 21.8 mln tonnes -exchange

Argentina’s 2021/22 wheat season produced a record 21.8 million tonnes of the grain, blowing past the country’s previous all time high harvest of 19 million tonnes in the 2018/19 crop year, the Buenos Aires Grains Exchange said in a report on Tuesday.

The harvest, which ended this month, came in 2.8 million tonnes higher than the exchange’s initial estimate thanks to rains that, while scarce, were distributed evenly and in time to bolster yields, it said.

The national average yield was 3.44 tonnes per hectare, or 21.9% higher than the previous season and 11.5% better than the average over the last five years, the exchange said.

The harvest should generate exports worth a record $4.5 billion and tax revenue of $1.45 billion. Argentina needs cash as it exits recession and negotiates a new program with the International Monetary Fund. (Full Story)

“The wheat chain should continue on a growth path, considering its good performance over recent years,” the exchange said.

Argentina is a major wheat exporter, especially to neighboring Brazil. It is also the world’s second biggest corn supplier and the top exporter of soymeal livestock feed used to fatten hogs and poultry from Europe to Southeast Asia.

Dryness has been a concern, but heavy rainfall brought relief to Argentina’s main agricultural areas over the weekend, interrupting several weeks of dry weather that led the Rosario grains exchange to trim forecasts for soybean and corn production. (Full Story)

The Rosario exchange last week cut its 2021/22 corn crop forecast to 48 million tonnes from 56 million tonnes due to a recent heat wave. The soybean crop was estimated at 40 million tonnes, down from a previous forecast of 45 million tonnes.

The Buenos Aires exchange sees Argentina’s 2021/22 corn crop at 57 million tonnes and soy at 44 million tonnes.

Brazil soy farmers aim to import Diquat directly as Syngenta deliveries lag

Brazilian farmer group Aprosoja Brasil is requesting permission from the Agriculture Ministry to directly import Diquat, a herbicide mainly used as  desiccant to aid harvesting, citing a shortage of the product when farmers need it the most, according to a statement on Tuesday.

Brazil’s soybean farmers have reaped less than 2% of their 2022 soy crop, and January is a key month for harvesting work in top growers like Mato Grosso state.

Aprosoja said Diquat orders are not being fulfilled by Syngenta, which is the holder of the product’s registration in Brazil.

The ministry did not have an immediate comment.

“The huge demand for Diquat has not been met by the industry,” Aprosoja, which represents about 400,000 soy and corn farmers, said in the statement. Aprosoja said Syngenta issued a note on Dec. 23 saying there was not enough of the product available on the market to meet Brazilian farmers’ demand.

In a statement to Reuters, Syngenta recognized short-term challenges to supply products with Diquat as an ingredient. It cited issues affecting production of certain active ingredients for pesticides in China, global logistics disruptions and heated demand for Diquat in 2021.

Syngenta, owned by ChemChina, said it is fully committed to increasing Diquat supplies in Brazil.

“We are looking for additional supply alternatives from all possible sources around the world, including viable alternatives in China itself,” the statement said.

Aprosoja said the company has been unable to deliver product that has already been ordered, worrying farmers.

The problem arose after Anvisa, the Brazilian health watchdog, banned the use and marketing of the herbicide Paraquat, Aprosoja said. Lack of the substitute Diquat made the desiccant’s price more than triple compared to the last harvest, it added.

Syngenta said there was a lack of Diquat products available for immediate delivery anywhere, adding direct imports into Brazil would not solve the matter.

U.S. finds more avian flu cases in wild birds, identifies strain

The U.S. Department of Agriculture reported two more cases of highly pathogenic avian flu in wild birds on Tuesday, raising risks for potential infections in poultry.

The USDA on Friday reported the nation’s first case of a Eurasian H5 type of the virus since 2016 and on Tuesday said all three cases are the H5N1 strain. That strain has caused a wave of outbreaks of bird flu in poultry across Europe and Asia. (Full Story) (Full Story)

H5N1 is one of the few bird flu strains that has passed to humans, though U.S. officials said there was a low risk to people from the case confirmed on Friday.

The infections are disappointing because it is rare for a Eurasian strain to make its way to North America, said Carol Cardona, a professor of avian health at the University of Minnesota.

“Avian influenza viruses tend to stay in their hemisphere,” she said.

The latest U.S. cases were in Colleton County in South Carolina, where Friday’s infection was found in a wild duck, and in Hyde County in North Carolina, the USDA said.

Wild birds can transmit avian flu to each other or to poultry through direct contact and through their feathers or feces.

“These findings are not unexpected, as wild birds can be infected with HPAI and show no signs of illness,” the USDA said. “They can carry the disease to new areas when migrating.”

The USDA advised poultry producers to review safety measures to assure the health of their flocks and said people should wear gloves when dealing with wild birds.

Cardona said poultry producers need to make sure the virus cannot enter their barns.

“Poultry producers are going to be busy this spring,” she said. “They have to check the doors and windows every day, twice a day, 10 times a day.”

The World Organisation for Animal Health (OIE) said on Tuesday that Spain reported an outbreak of H5N1 bird flu on a farm north of Madrid.

Paraguay Soybean Giant Girds for Worst Harvest in Two Decades

• CCU says it may reap 160,000 tons versus 400,000-ton goal
• Cooperative sees animal proteins, corn trimming soy dependence

Paraguayan agribusiness giant Cooperativa Colonias Unidasprobably will harvest less than half its original forecast this year as a deep drought stunts crops across South America’s farming belt, according to a senior manager.

Production of 150,000 to 160,000 metric tons would mean around $100 million less revenue for the cooperative, whose members farm about 120,000 hectares (297,000 acres) in the southern provinces of Itapua and Alto Parana, said Eduardo Dietze, who oversees farm supplies and technical assistance.

Hot, dry weather in December and early January has analysts and trade groups lowering their estimates for soy production in key producers Argentina, Brazil and Paraguay, helping push up prices of the oilseed by about 12% since the end of November.

In a good year, Paraguay produces just over 10 million metric tons, with more than 90% exported as beans, oil and pellets to markets including Argentina and Brazil. But this year, farmers will be lucky if the first harvest reaches two thirds of its usual yield of about nine million tons, according to trade group Capeco.

Members are trying to make their fields more resistant to unpredictable rainfall by adopting no-till farming and rotating soy with corn and sorghum to improve soil fertility and water retention.

“Even though the area planted with soy might decline, we expect production to remain around 400,000 tons” with those methods and enough rain, said Dietze, himself a third generation soy farmer.

The cooperative is also increasing grain, pork and dairy production to trim its dependence on soy. Those plans include more than doubling annual corn production to as much as 250,000 tons in the next five years.

China’s Growing Fondness for Bread Will Help Boost Wheat Imports

• High prices are now starting to rekindle food inflation
• China’s imports of iron ore are likely to fall this year

China will keep scooping up more and more global wheat supplies after record imports last year, with changing diets in an increasingly affluent society set to be a key driver of future demand.

Overseas purchases jumped 17% to about 9.8 million tons in 2021, customs data show. Increased use of wheat for animal feed because of high domestic corn prices and a difficult harvest played a major role in pushing up imports.

But the impact of rising wealth on people’s diets is also boosting demand for the grain, a core ingredient in everything from bread to noodles, dumpling skins, biscuits and pastries. Growth in consumption has accelerated in recent years as China adopts more western-style eating habits, and food use will be the leading driver of wheat demand, according to Sitonia Consulting.

“We’re still expecting China’s 2022 imports to be large,” said Darin Friedrichs, co-founder and market research director of Sitonia, a China-based agricultural information service provider. “Domestic prices remain high due to increased use of wheat in animal feed and structural trends in consumers’ eating habits.”

Less than half of projected U.S. renewable diesel output likely by 2025- study

U.S. refiners and biofuel companies are likely to reach less than half the renewable diesel production projected by the U.S. government for 2025 due to policy and feedstock constraints, according to a study released Tuesday from consultancy Cerulogy.

Numerous petroleum refiners across North America are planning to convert facilities to process waste and vegetable oils into renewable fuels, a small but growing market backed by government incentives.

The Energy Information Administration estimates renewable diesel production capacity in the United States could increase fivefold by 2024 from 1 billion gallons currently to more than 5 billion gallons per year.

But Cerulogy estimated the projects are more likely to yield approximately 2 billion gallons of total renewable diesel production capacity in 2025, meaning at least 2 billion gallons of already announced capacity additions are likely be delayed, canceled or downsized.

Achieving EIA predictions would be “exceedingly difficult” and would likely require relying heavily on feedstock imports and a very significant reduction in production of biodiesel – a biofuel made from similar feedstocks but blended with petroleum-based diesel – according to Chris Malins, who authored the report backed by the International Council on Clean Transportation.

Achieving EIA forecasts would require an increase of 17 million metric tons of additional demand for fats, oils and greases for renewable diesel, largely by diverting waste oils and fats from traditional biodiesel production, raising U.S. soy oil production and increasing U.S. vegetable oil imports, the report said.

The Renewable Fuel Standard supports 1.3 billion gallons of renewable diesel generated by 2022.

However, while the U.S. EPA finds the fuel significantly reduces greenhouse gas emissions compared with petroleum diesel, several parties are concerned the increased demand for the oils needed to create it will result in indirect land use change and cause food prices to rise.

Annual production of 2 billion gallons of renewable diesel by 2025 is a “high-end estimate” for what can be achieved without causing strong market distortions, Malins said.

In addition, policies meant to promote renewable diesel are not strong enough. The U.S. Renewable Fuel Standard and state policies such as California’s Low Carbon Fuel Standard are meant to achieve growth in renewable diesel.

The U.S. Environmental Protection Agency has highlighted the risk of negative market and environmental impacts if the supply of biomass-based diesel is further increased, Malins added.

EMEA CROP WEATHER: Russia Wheat in Good Condition; Snow Forecast

Russia’s northwest, central and Volga regions are forecast to receive heavy snow and sleet, UkrAgroConsult said in a note.

• Southern and north Caucasian regions will also get snow and sleet, according to UkrAgroConsult weather forecast for Jan. 17-23
• Separately, winter crops in Russia are mainly in good condition, with some exceptions, Tass reported, citing comments from Roman Vilfand, research director at the government’s weather center
  • Says snow fell earlier and prevented crops freezing
  • Temperature fell in Orenburg and Kurgan regions, but indicators are better in southern regions including Stavropol, Krasnodar regions
  • Global warming means growing conditions are better in the south of Russia now, Vilfand said