Global Ag News for Jan 20.23

TOP HEADLINES

Wheat Surge Is Seen Crowding Out US Corn and Soy Acres: Survey

Bigger US wheat plantings are expected to limit corn and soybean acreage this year as farmers seek to profit from soaring grain prices, a Farm Futures survey finds.

  • Total 2023 wheat acres are estimated at 48.8m acres, a 7% increase from the earlier season
    • If realized, that would be the largest wheat crop sown in the US since 2016
  • Winter wheat seedings are projected to expand 5% to 34.9m acres
    • Spring wheat is seen at 13.9m, up 12% from last year
  • The survey shows 90.5m acres of corn to be planted this spring, a rise of 2.2%
    • 88.9m acres of soybeans, a 1.7% increase
  • Along with higher wheat futures, soaring fertilizer costs motivated growers to focus on growing wheat over corn, which requires more nitrogen, according to Jacqueline Holland, an analyst at Farm Futures
  • NOTE: The survey of 560 farmers was taken from Nov. 28-Dec. 30

FUTURES & WEATHER

Wheat prices overnight are down 5 in SRW, down 6 1/4 in HRW, down 2 1/2 in HRS; Corn is down 3; Soybeans up 3/4; Soymeal down $0.06; Soyoil up 0.38.

For the week so far wheat prices are down 14 in SRW, down 18 1/2 in HRW, down 12 3/4 in HRS; Corn is unchanged; Soybeans down 12 1/4; Soymeal down $0.41; Soyoil up 0.40.

For the month to date wheat prices are down 62 1/2 in SRW, down 62 1/4 in HRW, down 37 1/4 in HRS; Corn is down 4 1/4; Soybeans down 8 1/2; Soymeal down $0.40; Soyoil down 0.54

Year-To-Date nearby futures are down 7.9% in SRW, down 7.1% in HRW, down 4.2% in HRS; Corn is down 0.5%; Soybeans down 0.2%; Soymeal down 1.3%; Soyoil down 0.5%.

Chinese Ag futures (MAR 23) Soybeans up 23 yuan; Soymeal down 38; Soyoil up 42; Palm oil up 24; Corn down 22 — Malaysian palm oil prices overnight were up 3 ringgit (+0.08%) at 3892

There were changes in registrations (-42 Soybeans, -15 Soymeal). Registration total: 2,787 SRW Wheat contracts; 0 Oats; 154 Corn; 1,140 Soybeans; 479 Soyoil; 62 Soymeal; 280 HRW Wheat.

Preliminary changes in futures Open Interest as of January 19 were: SRW Wheat up 80 contracts, HRW Wheat up 2,918, Corn up 4,796, Soybeans up 2,757, Soymeal up 3,394, Soyoil up 3,728.

Brazil Grains & Oilseeds Forecast: Rio Grande do Sul and Parana:  Scattered showers north Friday. Scattered showers Saturday-Sunday, north Monday. Temperatures near to above normal through Monday. Mato Grosso, MGDS and southern Goias:  Scattered showers through Monday. Temperatures near normal through Monday.

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

Northern Plains Forecast: Mostly dry Friday-Saturday. Isolated showers Sunday-Monday. Temperatures near to above normal through Monday. Outlook: Isolated to scattered showers Tuesday-Saturday. Temperatures near to above normal Tuesday-Wednesday, below normal Thursday-Saturday.

Central/Southern Plains Forecast: Scattered showers Friday night-Saturday. Isolated showers Sunday. Mostly dry Monday. Temperatures below normal northwest and above normal southeast through Saturday, near to below normal Sunday-Monday. Outlook: Scattered showers Tuesday. Mostly dry Wednesday. Isolated showers Thursday. Mostly dry Friday-Saturday. Temperatures near to below normal Tuesday, below normal Wednesday-Friday, below normal northwest and above normal southeast Saturday.

Western Midwest Forecast: Mostly dry Friday. Scattered showers south Saturday night-Sunday. Mostly dry Monday. Temperatures near to above normal Friday-Monday.

Eastern Midwest Forecast: Scattered showers Friday. Mostly dry Saturday. Scattered showers Sunday. Mostly dry Monday. Temperatures above normal Friday-Monday. Outlook: Isolated to scattered showers Tuesday-Saturday. Temperatures above normal Tuesday, below normal west and above normal east Wednesday-Thursday, near to below normal Friday-Saturday.

The player sheet for Jan. 19 had funds: net sellers of 4,000 contracts of SRW wheat, sellers of 4,000 corn, sellers of 3,500 soybeans, sellers of 2,500 soymeal, and  sellers of 2,500 soyoil.

TENDERS

  • CORN SALE: U.S. exporters sold 195,000 tonnes of corn for delivery to Mexico during the 2022/2023 marketing year, the U.S. Department of Agriculture said.
  • DURUM WHEAT PURCHASE: Tunisia’s state grains agency is believed to have purchased about 125,000 tonnes of durum wheat in an international tender.
  • FEED WHEAT PURCHASE: An importer group in the Philippines is believed to have bought around 110,000 tonnes of animal feed wheat expected to be sourced from Australia in an international tender.
  • WHEAT PURCHASE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 77,763 tonnes of food-quality wheat from the United States and Canada in a regular tender that closed on Thursday.
  • CORN PURCHASE: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), bought 50,000 tonnes of Romanian corn in an international tender.

PENDING TENDERS

  • RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 113,460 tonnes of rice to be sourced from the United States. The deadline for submissions of price offers was Dec. 29.
  • FEED WHEAT AND BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said that it will seek 70,000 tonnes of feed wheat and 40,000 tonnes of feed barley to be loaded by Feb. 15 and arrive in Japan by March 16, via a simultaneous buy and sell (SBS) auction that will be held on Jan. 25.
  • SOYBEAN TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued international tenders to purchase around 19,000 tonnes of food-quality soybeans free of genetically-modified organisms (GMOs).
  • FEED WHEAT AND SOYMEAL TENDERS: A group of importers in the Philippines has issued an international tender to purchase up to 45,000 tonnes of soymeal to be sourced from optional origins.

River barge

TODAY

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 Friday for week ending Jan. 12.

  • Corn est. range 275k – 800k tons, with avg of 475k
  • Soybean est. range 600k – 1,200k tons, with avg of 865k

DOE: US Ethanol Stocks Fall 1.7% to 23.402M Bbl

According to the US Department of Energy’s weekly petroleum report.

  • Analysts were expecting 23.907 mln bbl
  • Plant production at 1.008m b/d, compared to survey avg of 0.984m

Rains Seen for Argentina as Bourse Warns of More Cuts to Soy

“Most of the planted area depends on rain in the short term to avoid additional losses to yield and harvestable area,” the Buenos Aires Grain Exchange said in a weekly report.

  • If rains don’t come in the next 7 days, the bourse would cut its current soy estimate of 41m metric tons
  • In a separate weather report, bourse rain maps showed swaths of the key “zona nucleo” region getting showers of 10-50mm (0.4-2 inches), with some pockets of 75mm, over the next week
    • NOTE: Weekly government weather maps also predicted ~50mm for the zona nucleo, although the longer-term forecast remains uncertain
  • New official corn estimate falls to 44.5m tons from 50m because of the drought
    • NOTE: The bourse has already said it could slash estimates to 35.5m for soy and 37.8m for corn if growing conditions stay poor

Argentine Soy, Corn, Wheat Estimates Jan. 19: Exchange

The Buenos Aires Grain Exchange releases weekly report on website.

  • 2022-23 corn production lowered to 44.5m tons vs 50m tons
  • 2022-23 soybean and corn area estimates both are unchanged from the previous week

Ukraine Prioritizes Big Crop Ships Due to Inspection Delay: Govt

Ukraine is prioritizing crop-export vessels that carry at least 15k tons, or at least 6k tons for vegetable oil, through its Black Sea corridor, the agriculture ministry says Thursday in a statement.

  • That’s intended to bolster export volumes, amid delays in the vessel inspections that are required under the Black Sea grain deal
  • The decision was originally reached in late November and was extended on Wednesday

China bought less soy from Brazil and U.S. in 2022, more from Uruguay

China’s soybean imports from the United States dropped 10% in 2022, customs data showed on Friday, reducing the United States’ share of the world’s top soybean market to less than a third.

Total soybean imports by China last year dropped 5.6% to 91.08 million tonnes, due to high global prices and weaker demand earlier in the year.

But the United States, China’s No. 2 supplier, lost out more than Brazil, with shipments down 10% to 29 million tonnes, while arrivals from top supplier Brazil slipped 6% to 54.4 million tonnes.

Drought in Brazil early in the year had tightened supplies and pushed up global prices. Later on, low water levels in the Mississipi river hampered logistics in the United States, slowing exports of beans to China.

Brazil maintained its 60% share of the market, while the United States’ share has slipped slightly to under 32%, according to Reuters calculations based on the data.

Smaller supplier Uruguay was the main winner, with exports doubling from 866,000 tonnes in 2021 to 1.79 million tonnes last year. Argentina’s imports were little changed at 3.65 million tonnes.

Soybean arrivals in December from both Brazil and the United States were similar to last year’s level, at 2.56 million tonnes and 6.02 million tonnes, respectively, but arrivals from Argentina jumped to 1.46 million tonnes from just 340,000 tonnes a year earlier.

Argentina had offered its farmers a preferential exchange rate in September to boost soybean exports.

US Grain Shipments on Miss. River Rise, Barge Rates Down: USDA

Barge shipments down the Mississippi river increased to 547k tons in the week ending Jan. 14 from 355k tons the previous week, according to the USDA’s weekly grain transportation report.

  • Barge shipments of corn rose 75% from the previous week
  • Soybean shipments up 46% w/w
  • St. Louis barge rates were $19.28 per short ton, a decline of $2.29 from the previous week

U.S. generated fewer renewable fuel credits in December, EPA says

The United States generated fewer renewable fuel blending credits in December versus the month prior, data from the Environmental Protection Agency (EPA) showed on Thursday.

About 1.21 billion ethanol (D6) blending credits were generated last month versus 1.27 billion in November, according to the data.

About 583 million biodiesel (D4) blending credits were generated in December versus 582 million in the month prior.

The credits are used by oil refiners and importers to show compliance with EPA-mandated ethanol blending quotas for petroleum-based fuels. They are generated with every gallon of biofuel produced.

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

ADM & Industry News

Explore the latest edition of The Ghost in the Machine

Explore Now