Global Ag News for May 18

TODAY—-

Wheat prices overnight are up 8 1/4 in SRW, up 11 in HRW, up 8 1/2 in HRS; Corn is up 11 1/2; Soybeans up 16 1/2; Soymeal up $0.16; Soyoil up 1.31.

For the week so far wheat prices are down 3/4 in SRW, up 3 1/2 in HRW, down 17 in HRS; Corn is up 21; Soybeans up 16; Soymeal down $0.25; Soyoil up 2.23.

For the month to date wheat prices are down 26 3/4 in SRW, down 40 1/4 in HRW, down 40 1/4 in HRS; Corn is down 9 1/4; Soybeans up 69 3/4; Soymeal down $9.60; Soyoil up 7.89.

Chinese Ag futures (SEP 21) Soybeans down 8 yuan ; Soymeal up 21; Soyoil up 6; Palm oil down 32; Corn down 10 — Malasyian Palm is up 200.

Malaysian palm oil prices overnight were up 196 ringgit (+4.62%) at 4438, to fresh 2008-highs while industry participants anticipate weakening output from second-biggest grower Malaysia.

Midwest corn, soybean and winter wheat forecasts: West: Scattered showers through Friday. Temperatures near to above normal Monday-Tuesday, above to well above normal Wednesday-Friday. East: Scattered showers through Friday, especially west. Temperatures near to above normal Monday-Tuesday, above to well above normal Wednesday-Friday. 6 to 10 day outlook: Scattered showers Saturday-Wednesday. Temperatures above to well above normal Saturday-Monday, above normal Tuesday-Wednesday.

BRAZIL: Mostly dry through Wednesday. Isolated showers south Thursday. Scattered showers Friday. Temperatures near normal Monday, near to below normal Tuesday-Wednesday, near to above normal Thursday-Friday. Mato Grosso, MGDS and southern Goias… Summary: Mostly dry. Temperatures near to above normal. Forecast: Mostly dry through Thursday. Scattered showers MGDS Friday. Temperatures near to above normal through Friday.

ARGENTINA: Mostly dry through Tuesday. Scattered showers Wednesday-Friday. Temperatures near to below normal Monday-Tuesday, near to above normal Wednesday-Friday.

AUSTRALIA:  Western Australia Forecast Isolated showers Monday-Tuesday. Mostly dry Wednesday. Temperatures above normal through Wednesday. Southern South Australia, Victoria, southern New South Wales Highlights: Isolated showers Victoria Forecast Mostly dry through Wednesday. Northern New South Wales and southern Queensland Forecast Mostly dry through Wednesday.

INDIA: Heavy rain through Wednesday. Temperatures below normal through Wednesday. Mostly dry Thursday-Saturday. Temperatures below normal Thursday-Saturday.

CHINA: Forecast: Mostly dry through Wednesday. Temperatures near to below normal through Wednesday. Mostly dry Thursday-Saturday. Temperatures near to above normal Thursday-Saturday.

The player sheet had funds net sellers of 5,000 contracts of SRW Wheat; seller 4,500 Soymeal, and; net buyers of 7.000 lots of Soyoil.

Preliminary changes in futures Open Interest as of May 17 were: SRW Wheat up 1,766 contracts, HRW Wheat down 1,633, Corn down 11,562, Soybeans down 315, Soymeal down 2,313, Soyoil up 24.

There were changes in registrations (-68 SRW Wheat, -7 HRW Wheat) Registration total: 20 SRW Wheat contracts; 16 Oats; 0 Corn; 165 Soybeans; 1,020 Soyoil; 442 Soymeal; 1,255 HRW Wheat.

TENDERS

• USDA confirmed private sales of 1.7 million tonnes of U.S. corn to China for shipment in the 2021/22 marketing year. Purchase is China’s third largest ever.
• USDA confirmed 128,000 tonnes of corn to Mexico for shipment in the 2021/22 marketing year.
• Three South Korean importers bought an estimated 263,000 tonnes of corn on Friday in separate deals.
• The Taiwan Flour Millers’ Association purchased an estimated 89,425 tonnes of milling wheat to be sourced from the United States in a tender which closed on Thursday.
• Algeria’s state grains agency OAIC has issued an international tender to buy milling wheat to be sourced from optional origins.

PENDING TENDERS

• A Tunisian state agency issued an international tender to purchase up to 27,000 tonnes of vegetable oils.
• Indonesia’s state procurement agency Bulog issued an international tender buy and import about 180,000 tonnes of animal feed wheat.
• Algeria tenders to buy nominal 50,000 tonnes milling wheat

China April Agricultural Import Summary

• YTD corn imports rose 301.2% y/y to 8.58m tons
• April wheat imports 900,000 tons, +146.8% y/y
  • YTD wheat imports rose 134.7% y/y to 3.83m tons
• April cotton imports 230,000 tons, +84.5% y/y
  • YTD cotton imports rose 62.7% y/y to 1.2m tons
• April edible palm oil imports 290,000 tons, +28.6% y/y
  • YTD edible palm oil imports rose 23% y/y to 1.31m tons
• April pork imports 430,000 tons, +8.7% y/y
  • YTD pork imports rose 18.1% y/y to 1.59m tons
• April beef imports 190,000 tons, +14.1% y/y
  • YTD beef imports rose 18.8% y/y to 810,000 tons

 NOPA April soy crush drops to 160.310 million bushels, below all estimates

CHICAGO, May 17 (Reuters) – U.S. soy processors crushed fewer soybeans than expected in April, with the month’s crush volume sinking to the second lowest in 19 months, according to data released by the National Oilseed Processors Association (NOPA) on Monday.

NOPA members, which handle about 95 percent of all soybeans processed in the United States, crushed just 160.310 million bushels of soybeans last month, down from 177.984 million bushels in March and 171.754 million bushels in April 2020.

Analysts, on average, had expected the April crush at 168.741 million bushels, according to estimates from nine analysts. Estimates ranged from 162.752 million to 172.000 million bushels, with a median of 169.500 million bushels.

Soy processor downtime and tight stocks of the oilseed amid soaring exports and a torrid crush over recent months limited the crushing pace in April, analysts said.

NOPA said soyoil supplies among its members as of April 30 dipped to 1.702 billion lbs, from 1.771 billion lbs at the end of March. Stocks among NOPA members were at 2.111 billion lbs at the end of April 2020.

Oil stocks were also below the average trade forecast of 1.785 billion lbs, based on estimates gathered from six analysts. Estimates ranged from 1.682 billion to 1.850 billion lbs, with a median of 1.813 billion.

Soymeal exports last month slumped to a 22-month low of 689,441 tons, down from 937,023 tons in March and 890,931 tons in April 2020, according to NOPA data.

USDA CROP PROGRESS: Corn Crop 80% Planted, Soybeans 61% Planted

• Corn planted 80% vs 67% last week, and 78% a year ago
• Corn emerged 41% vs 20% last week, and 40% a year ago
• Soybeans planted 61% vs 42% last week, and 51% a year ago
• Soybeans emerged 20% vs 10% last week, and 16% a year ago
• Spring wheat planted 85% vs 70% last week, and 57% a year ago
• Spring wheat emerged 47% vs 29% last week, and 28% a year ago
• Winter wheat 48% G/E vs 49% last week, and 52% a year ago
• Cotton planted 38% vs 25% last week, and 42% a year ago
• Sorghum planted 27% vs 22% last week, and 31% a year ago

EU Soft-Wheat Exports at 23.4m Tons in Season Through May 16

Shipments during the season that began July 1 amounted to 23.4m tons as of May 16, versus 31.3m tons in the same period a year earlier, the European Commission said on its website.

• Top destinations are Algeria (5.15m tons), Morocco (2.21m tons) and Nigeria (2m tons)
• EU barley exports totaled 6.86m tons, slightly ahead of the prior year
• EU corn imports totaled 12.8m tons, versus 18.3m tons a year earlier
• NOTE: Data for the 2020-21 season includes trade for the U.K. until Dec. 31, when the country departed the EU customs union
  • Figures for the entire prior year include U.K. trade

 Top China pig breeder promotes low-protein hog feed

China’s leading pig producer Muyuan Foods Co Ltd 002714.SZ used only 9.8% soymeal in its feed last year, cutting costs as feed prices soared, Chairman Qin Yinglin said on Monday. Qin’s comments follow guidelines from Beijing to its huge livestock sector last month to lower the soymeal and corn content in feed after record imports of both during 2020. “We recommend a low-protein diet for raising pigs. Currently the consumption of soybean meal for pig feed in our country is too high,” Qin told a conference. The industry average of 18% is almost twice what Muyuan uses.

China’s livestock sector uses about 70 million tonnes of soymeal a year. To make the soymeal, it imports around 100 million tonnes of soybeans a year, more than 60% of the global trade. Reducing soymeal use could lower dependence on imports, lower costs and reduce emissions, according to Qin’s proposal, which he shared on Monday. Muyuan saved 28 yuan per pig, or 560 million yuan in total, by using less soymeal and increasing the use of amino acids, he said. Cutting soymeal to 9.8% also lowers soybean consumption by 31 kg (68 pounds) per pig, Qin said, equating to 20 million tonnes for the whole country. Muyuan sold 18 million hogs last year.

Australia Canola Output to Soar With Winter Grains in Good Shape

• Australia’s canola production is expected to hit a record 4.7 million tons in 2021-22 as strong global prices and “optimal” moisture profiles in some states encourage farmers to plant more, IKON Commodities said.
• IKON raised canola estimate by 28% from 3.66m tons in March
• Canola planting near record on prices and subsoil moisture levels in New South Wales and Western Australia
• The outlook and moisture levels for the winter grain crop are looking good in most areas and may well continue to improve
• IKON increased output forecasts for all main winter crops, including:
  • Wheat estimate raised 3.5% from March to 29.5m tons, “which is well above average, but still below last season’s stunning crop of 34.8m tons”
  • Barley estimate up 4% from March to 10.5m tons, but still well below last year’s 13.2m tons

Argentina Halts Beef Exports for 30 Days to Contain Prices

Argentina’s government is limiting exports of beef, a staple in the country, in the latest unorthodox move to try to contain runaway inflation that’s approaching 50% annually. President Alberto Fernandez told a key beef export association that they won’t be allowed to sell the product abroad for 30 days. The measure shows that the government is willing to sacrifice much-needed dollars from exports to appease local consumers ahead of a key midterm election later this year. The country’s beef exports in 2020 amounted to roughly $3 billion, but the government may be more focused on the political cost of falling domestic consumption. The 30-day period could be shortened if the implementation of the measures leads to “positive results,” the note added.

California Farmers Facing Drought Are Choosing Empty Fields

In some areas of California it’s so dry that farmers aren’t even bothering to plant crops this season. Growers north of San Francisco have begun pulling out of local farmers markets and produce-box programs. The announcements are concerning because California grows a third of the country’s vegetables and two-thirds of the country’s fruits and nuts. “Due to severe drought, for the first time in 21 years, we will not be able to grow this summer in Petaluma,” County Line said in its post. Drew Lerner, president of World Weather Inc. in Kansas, said California “missed the rainy season” and is not going to be seeing much moisture over the next several months.

WHEAT/CEPEA: High wheat prices should lead to increases in area and the national output

Data from Conab (Brazil’s National Company for Food Supply) released this month estimated the area allocated to wheat in Brazil to grow by 5% compared to that in the 2020 season. Productivity is forecast to increase by 1.5%, in the same comparison. However, it is worth to highlight that wheat crops are sensitive to drought and frosts, even at the end of the cycle. Therefore, data may be changed in the coming months, majorly because the drought is hampering sowing activities. So far, the output is expected to increase by 6.5%, to 6.63 million tons, the highest since 2016.

With higher supply in Brazil, imports should decrease to 6.4 million tons between August/21 and July/22, the lowest since 2017. The domestic availability is estimated at 13.15 million tons, the highest since 2018. This volume should be enough to meet the domestic demand for wheat, estimated at 12.11 million tons, 0.12% up from that in the previous season. Exports continued estimated at 600 thousand tons, according to Conab. Thus, ending stocks, in July/22, should total 438.7 thousand tons, much higher than that forecast for July/21 (113 thousand tons).

Feed prices forced Brazilian poultry and pork producers to ask for help

A list of demands was sent to the federal government of Brazil by the Brazilian Association of Animal Protein (ABPA) and the Union of Industries of Poultry Products of the State of Paranaá (Sindiavipar). Both organizations are asking for immediate support for Brazilian poultry and pork producers as the industry is confronted with a spike in feed prices never seen before. In the last 12 months, soybean prices have increased by 73%, while corn jumped by 140%. Both are representing about 51% of production costs in poultry farms and the current situation is putting pressure on the industry, according to representatives of the Brazilian cooperatives consulted by Gazeta do Povo. Besides that, the domestic market is oversupplied with chicken meat, as production grew 3.3% in the last year, while the increase in exports was only 1%.