Global Ag News for May 12.23

TOP HEADLINES

NOAA Gives El Niño Over 90% Chance to Develop — Market Talk

The NOAA’s Climate Prediction Center says that an El Niño climate system is expected to develop over the summer, with an over-90% chance of it being in place by this winter. The NOAA says that El Niño is expected to start forming this month, and what’s unclear is how strong this system will be. The NOAA gives an 80% chance for at least a moderate El Niño developing, with a 55% chance of a strong system developing. Early in the trading session, most-active corn futures on the CBOT are down 1.4%, while soybeans are off 0.8% and wheat loses 0.9%.

FUTURES & WEATHER

Wheat prices overnight are up 7 1/2 in SRW, up 15 3/4 in HRW, up 10 3/4 in HRS; Corn is unchanged; Soybeans up 9 3/4; Soymeal up $4.30; Soyoil up 0.18.

For the week so far wheat prices are down 25 1/2 in SRW, up 23 3/4 in HRW, up 11 1/2 in HRS; Corn is down 14 1/4; Soybeans down 21 1/2; Soymeal up $9.60; Soyoil down 3.00.

For the month to date wheat prices are up 1 in SRW, up 81 in HRW, up 43 3/4 in HRS; Corn is down 2 3/4; Soybeans down 4; Soymeal up $3.30; Soyoil down 0.34.

Year-To-Date nearby futures are down 22.4% in SRW, up 0.4% in HRW, down 12.3% in HRS; Corn is down 6.8%; Soybeans down 5.0%; Soymeal down 10.8%; Soyoil down 20.2%.

Chinese Ag futures (JUL 23) Soybeans up 100 yuan; Soymeal up 32; Soyoil down 112; Palm oil down 144; Corn down 17 — Malaysian palm oil prices overnight were up 43 ringgit (+1.19%) at 3646.

There were no changes in registrations. Registration total: 2,389 SRW Wheat contracts; 22 Oats; 11 Corn; 0 Soybeans; 1,145 Soyoil; 130 Soymeal; 97 HRW Wheat.

Preliminary changes in futures Open Interest as of May 11 were: SRW Wheat up 3,861 contracts, HRW Wheat down 134, Corn up 5,575, Soybeans up 7,406, Soymeal up 6,143, Soyoil up 7,932.

Northern Plains: Temperatures continue to be near or above normal in the Northern Plains for the next week, favoring planting. Scattered showers will continue in waves through the weekend and could be heavy in spots, offering an increase in soil moisture for some of the dry areas.

Central/Southern Plains: Heavy rain fell in western areas of the Central and Southern Plains Wednesday, and waves of showers will continue to develop through the weekend. Where they hit, they will be heavy, helping ease the drought in some of the driest areas of the country. Heavier rain is forecast across the south this weekend before it gets drier next week. Texas may see showers continuing, however.

Midwest: A system in the Plains will bring more widespread showers to the Midwest through the weekend and may be significant for the drier areas in the west. Most areas yet to plant have had an opportunity to get into the fields this week, while some of these showers will be beneficial. Showers are disorganized, however, which will leave some areas dry. After this weekend, the region will dry out for next week. Temperatures will be warm until a front drops south through the region early next week, with cooler readings likely for eastern areas.

Delta: Wetter soils in the Delta are mostly favorable for developing crops. Disorganized areas of showers and thunderstorms will be possible through Monday, which may or may not hit most areas. Either way, conditions continue to be mostly favorable for crops in the ground.

Canadian Prairies: Mild temperatures continue to favor planting progress in the Canadian Prairies. Disorganized showers have been occurring throughout the week. They have not been all that widespread but have dropped some significant rain where they have hit. A system to the south will bring heavier showers to southeastern areas Friday and Saturday before the region goes drier for next week. Temperatures are forecast to stay mild even after a couple of weak fronts moving through next week. Some light showers may be possible with those fronts, but more is needed.

Argentina: It remains dry in Argentina, unfavorable for winter wheat planting and establishment. More rain is needed. However, it should remain drier for the next week. A front may go through with showers late next week with scattered showers. Models are inconsistent with the amount of rain being forecast.

The player sheet for 5/11 had funds: net sellers of 5,000 contracts of SRW wheat, sellers of 8,500 corn, sellers of 0 soybeans, buyers of 4,500 soymeal, and  sellers of 2,500 soyoil.

TENDERS

• VEGETABLE OILS PURCHASES: Egyptian state grains buyer GASC said on Thursday it had bought 34,000 tonnes of vegetable oils in an international tender. The purchase was comprised of 22,000 tonnes of sunflower oil and 12,000 tonnes of soyoil, GASC added.
• SOYBEAN SALES: The U.S. Department of Agriculture confirmed private sales of 132,000 tonnes of U.S. soybeans to “unknown” destinations for shipment in the 2022/23 marketing year.
• SOYMEAL PURCHASE: Leading South Korean animal feed maker Nonghyup Feed Inc. (NOFI) purchased an estimated 60,000 tonnes of soymeal in an international tender on Thursday, European traders said. NOFI had issued an international tender to purchase up to 120,000 tonnes of soymeal
• CORN PURCHASE: South Korea’s Major Feedmill Group (MFG) has purchased an estimated 133,000 tonnes of animal feed corn expected to be sourced from South America in an international tender on Thursday
• NO CORN PURCHASED: South Korea’s largest animal feed maker Nonghyup Feed Inc. (NOFI) is believed to have made no purchase in an international tender which closed on Thursday to buy up to 69,000 tonnes of animal feed corn
• FOOD WHEAT PURCHASE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 125,974 tonnes of food-quality wheat from the United States, Canada and Australia in a regular tender that closed on Thursday.
• UPDATED WHEAT PURCHASE: Algeria’s state grains agency OAIC is believed to have bought around 600,000 tonnes to 720,000 tonnes of milling wheat in an international tender on Wednesday.

PENDING TENDERS

• RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 43,500 tonnes of rice.
• FEED WHEAT, BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said on Wednesday that it will seek 60,000 tonnes of feed wheat and 20,000 tonnes of feed barley to be loaded by Aug. 31 and arrive in Japan by Oct. 26, via a simultaneous buy and sell (SBS) auction that will be held on May 17.

TODAY

Brazil 2022-23 Soybean Crop Seen at 154.8M Tons: Conab

Output est. raised from 153.6m tons, Brazil’s national supply co. says in its monthly report.

• Analysts in a Bloomberg survey were expecting 155.1m tons
• Yield seen higher at 3,532 kg/ha vs 3,527 kg/ha last month
• Area planted raised to 43.834m ha vs 43.562m ha last month
• Corn production est. raised to 125.5m tons vs 124.9m tons

Argentine Soybean, Corn Estimates May 11: Exchange

The Buenos Aires Grain Exchange releases weekly report on website.

• 2022-23 soybean and corn production estimates both maintained
• Soybean harvest advanced to 51.6% complete from 36.4%
• Corn harvest 21.2% complete

US Export Sales of Soybeans, Corn and Wheat by Country

The following shows US export sales of soybeans, corn and wheat by biggest net buyers for week ending May 4, according to data on the USDA’s website.

• Indonesia bought 89k tons of soybeans, and countries listed as “unknown” cancelled 120k tons
• Mexico was the top buyer of corn and Philippines led in wheat

US Export Sales of Pork and Beef by Country

The following shows US export sales of pork and beef product by biggest net buyers for week ending May 4, according to data on the USDA’s website.

• Japan bought 9.9k tons of the 30k tons of pork sold in the week
• South Korea led in beef purchases

NOPA April U.S. soybean crush seen at 174.173 million bushels

U.S. soybean processors likely recorded their busiest April on record despite sharp declines in the futures market, analysts said ahead of a monthly National Oilseed Processors Association (NOPA) report due on Monday.

NOPA members, which handle about 95% of all soybeans processed in the United States, were estimated to have crushed 174.173 million bushels last month, according to the average of estimates from 8 analysts.

That compares with 185.810 million bushels processed by NOPA members in March and an April 2022 crush of 169.788 million bushels. NOPA members notched their busiest April in 2020, when they crushed 171.754 million bushels of soybeans.

Estimates for the April 2023 crush ranged from 172.000 million to 177.500 million bushels, with a median of 173.750 million bushels.

The monthly NOPA report is scheduled for release at 11 a.m. CDT (1600 GMT) on Monday. NOPA issues crush data on the 15th of each month, or the next business day.

Soyoil supplies held by NOPA members as of April 30 were forecast at 1.828 billion pounds.

Soyoil stocks at the end of March stood at a 12-month high of 1.851 billion lbs. At the end of April 2022, soyoil stocks were reported at 1.814 billion lbs.

Soyoil stocks estimates ranged from 1.750 billion to 1.950 billion pounds, with a median of 1.809 billion pounds.

China May Cancel More US Corn in Shift to Cheaper Brazil Cargoes

• Brazil is set to pass the US as world’s biggest exporter
• Wheat in key Chinese growing region cheaper than corn

Top corn importer China could cancel more purchases of the grain from the US because the country can buy more cheaply from Brazil and as some local producers of hog feed replace corn with wheat in their rations.

Corn futures in Chicago have come under pressure from Chinese cancellations of 832,000 tons in the past three weeks. Increased competition from Brazil is underscored by forecasts for it to pass the US as the top exporter this year.

China went on a corn buying spree in March, with purchases of almost 4 million tons announced by the US government between March 14 and April 14. But US corn is now less competitive, with supplies from Brazil about $30 a ton cheaper for delivery in the third quarter, traders said. Weak domestic demand for corn as animal feed is also a reason behind the cancellations.

“Demand for corn is really poor,” said Wang Xiaoyang, a senior analyst with Sinolink Futures in Henan, one of the top grain-growing provinces. “Feed producers are using a lot of wheat to replace corn as prices keep falling.”

Wheat prices are about 180 yuan ($26) a ton cheaper than corn in Henan, and they may decline further as a bumper harvest is about to arrive on the market. Wheat also has a higher protein content than corn, and can also be used to replace some of the soybean meal used in feed.

Struggling hog farmers are doing all they can to cut feed costs, so replacing corn with wheat is a natural choice, traders and analysts said. The economy is also taking longer than expected to recover from Covid, which is affecting restaurant demand for food and consumption of corn for starch.

The country’s corn imports hit a record of over 28 million tons in 2021, before dropping to about 21 million tons last year, according to customs. Inbound shipments were 7.5 million tons in the first three months, up 6% from a year earlier, with most of the cargoes coming from the US, Brazil and Ukraine.

The cancellations come as China expects a bumper corn crop. Farmers in the northeast, the top production region for corn and soybeans, are more inclined to grow corn this year due to higher profits and easier management, CITIC Futures said, despite a government push to grow more soybeans.

India April Vegetable Oil Imports Rise 15% Y/y to 1.05m Tons

India’s vegetable oil imports were 1.05 million tons in April, compared with 911,846 tons a year earlier, according to the Solvent Extractors’ Association of India.

• April vegetable oil imports compared with 1.17 million tons in March
• April palm oil imports were 510,094 tons vs 728,530 tons m/m
• Soybean oil imports were 262,455 tons vs 258,925 tons m/m
• Sunflower oil imports were 249,122 tons vs 148,145 tons m/m
• Edible oil stockpiles were at 3.37 million tons as of May 1, compared with 3.45 million a month earlier, according to the processors’ group

Indonesia’s March Palm Oil Stockpiles Rises to 3.14M Tons: Gapki

Palm oil output rose from 4.25 million tons in Feb. to 4.76 million tons in March, according to Indonesian Palm Oil Association (Gapki) in an emailed statement on Friday.

• Palm oil production in March increased due to seasonality factor with CPO at 4.35m tons and crude palm kernel oil (CPKO) at 413,000 tons
• March exports at 2.64m tons vs 2.91m tons in Feb.
• Shipments to China, India, Egypt and the middle east fell
• Domestic demand at 1.81m tons in March vs 1.8m tons in Feb.
• Palm oil use for food industry rose to 911,000 tons, for biodiesel at 714,000 tons

Ukraine’s Grain Exports Fall 6.5% Y/y to 43.3m Tons This Season

Ukraine has exported 43.3m tons of grain so far in the season that began last July, the Agriculture Ministry said on its website.

The season-to-date total includes:

• 14.9m tons of wheat, down 20% y/y
• 25.6m tons of corn, up 18% y/y
• 2.5m tons of barley, down 56% y/y

US Crops in Drought Area for Week Ending May 9: USDA

The following shows the percent of US agricultural production within an area that experienced drought for the week ending May 9, according to the USDA’s weekly drought report.

• Spring wheat experiencing moderate to intense drought dropped by 2 percentage points from the previous week to 11%
• At this time last year, 35% of spring wheat crops were in drought
• Corn area rose by 2 points to 29% in drought, soybeans up by a point to 21%

US Miss. River Grain Shipments Fall, Barge Rates Decline: USDA

Barge shipments down the Mississippi river declined to 463k tons in the week ending May 6 from 595k tons the previous week, according to the USDA’s weekly grain transportation report.

• Barge shipments of corn fell 13% from the previous week
• Soybean shipments down 46% w/w
• St. Louis barge rates were $8.88 per short ton, a decline of $1.71 from the previous week

Argentina GM-Wheat Rollout Sees ‘Significant’ Progress: Bioceres

Rosario-headquartered Bioceres, which is trying to bring the world’s first genetically-modified wheat to market, said it is “significantly expanding access to multipliers and distributors in Argentina” after neighboring Brazil became the second country to approve company’s drought-tolerant HB4 strain for planting, CEO Federico Trucco said on an earnings call.

• Multipliers can develop their own inventories for direct sales to farmers
• Brazil’s approval opens the door to 1.1m hectares (2.5m acres) of HB4 wheat planting, but plant genetics need to be adapted
  • Bioceres’s partnership with Embrapa seeks to combine HB4 technology with tropical genetics, which would allow growing to prosper in the Cerrado region and put Brazil on the road to wheat self-sufficiency
  • Will “take a few years before we can be at the stage where we are today in Argentina”
• Rollout of drought-tolerant HB4 soybeans in Brazil is “steadily advancing”
  • Seeds have been tested in five Brazilian states, “with at least one variety consistently outperforming the top commercial alternatives”
  • In the US, HB4 soy development is 12 to 18 months behind Brazil

India Warns Temperatures to Climb Across Nation as Rain Recedes

Maximum temperatures are forecast to rise over most of India in the next two days, with heat waves in some areas, potentially boosting power demand as more people turn to cooling devices such as air conditioners.

• Hot and uncomfortable weather is likely over the eastern state of Odisha in the next five days, due to humidity and high temperatures, and in Kerala and Tamil Nadu on May 13-14, the India Meteorological Department said Friday.
• Most parts of the nation will remain dry in the five days from Friday except some areas in West Bengal, Odisha, Uttarakhand, Tamil Nadu, Kerala, Karnataka and northeastern states, according to the weather bureau. Showers were above normal across most of the country in the week ended May 10, it said.
• Heat wave conditions are likely over parts of Gujarat, Maharashtra, Bihar and West Bengal on May 12; Rajasthan on May 12-13 and in parts of Andhra Pradesh for four days through May 16.
• The highest maximum temperature in India on Thursday was 44.8C (112.6F) at Jalgaon in Maharashtra

 

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