Global Ag News for Nov 12th

 TODAY – EXPORT SALES

Wheat prices overnight are up 1/2 in SRW, down 1/2 in HRW, up 4 in HRS; Corn is up 1; Soybeans up 1 1/2; Soymeal up $0.15; Soyoil down 0.24.

For the week so far wheat prices are up 45 in SRW, up 47 3/4 in HRW, up 54 3/4 in HRS; Corn is up 16 3/4; Soybeans up 17 1/2; Soymeal up $1.33; Soyoil up 0.03. For the month to date wheat prices are up 39 3/4 in SRW, up 41 1/4 in HRW, up 17 in HRS; Corn is up 2 3/4; Soybeans down 26 1/2; Soymeal up $13.40; Soyoil down 2.35.

Chinese Ag futures (JAN 22) Soybeans down 46 yuan ; Soymeal up 15; Soyoil up 32; Palm oil up 58; Corn down 31 — Malasyian Palm is up 54. Malaysian palm oil prices overnight were up 54 ringgit (+1.11%) at 4935 on concerns over tight supplies as heavy rains may delay harvesting of fresh fruit bunches in the world’s top growers.

There were changes in registrations (-11 Soybeans). Registration total: 1,180 SRW Wheat contracts; 2 Oats; 2 Corn; 1,307 Soybeans; 233 Soyoil; 1 Soymeal; 108 HRW Wheat.

Preliminary changes in futures Open Interest as of November 11 were: SRW Wheat up 7,673 contracts, HRW Wheat down 3,017, Corn up 26,366, Soybeans up 758, Soymeal up 3,271, Soyoil up 2,799.

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

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

Midwest corn, soybean and winter wheat forecasts: West: Snow north Thursday-Friday. Scattered showers Saturday night-Sunday. Mostly dry Monday. Temperatures above normal Thursday, near to below normal Friday-Monday. East: Scattered showers Thursday. Isolated showers Friday-Saturday. Scattered showers Sunday. Isolated showers Monday. Temperatures above normal Thursday, near to above normal Friday, near to below normal Saturday, below normal Sunday-Monday. 6 to 10 day outlook: Mostly dry Tuesday. Scattered showers Wednesday-Thursday. Mostly dry Friday. Scattered showers Saturday. Temperatures above normal west and near to below normal east Tuesday, near to above normal Wednesday, near to below normal Thursday-Saturday.

The player sheet for Nov. 11 had funds: net buyers of 6,500 contracts of  SRW wheat, buyers of 2,500 corn, buyers of 2,000 soybeans, buyers of 2,000 soymeal, and  no soyoil.

TENDERS

  • CORN SALE: South Korea’s Feed Leaders Committee (FLC) purchased some 65,000 tonnes of animal feed corn expected to be sourced from South America or South Africa in a private deal on Wednesday without an international tender being issued
  • WHEAT SALE: Japan’s Ministry of Agriculture bought a total of 157,987 tonnes of food-quality wheat from the United States, Canada and Australia in a regular tender.
  • WHEAT TENDER: Bangladesh’s state grains buyer has issued an international tender to purchase 50,000 tonnes of milling wheat

PENDING TENDERS

  • WHEAT TENDER: The Ethiopian government issued an international tender to buy about 300,000 tonnes of milling wheat
  • WHEAT TENDER: The United Nations agency issued an international tender to purchase about 110,000 tonnes of milling wheat for supply to Ethiopia
  • CORN TENDER: Turkey’s state grain board TMO has issued an international tender to purchase about 325,000 tonnes of animal feed corn
  • WHEAT, BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said it will seek 80,000 tonnes of feed wheat and 100,000 tonnes of feed barley to be loaded by January 31, 2022 and arrive in Japan by February 24, via a simultaneous buy and sell (SBS) auction that will be held on November 17.
  • SOYBEAN TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp has issued international tenders to purchase around 115,000 tonnes of soybeans free of genetically-modified organisms (GMOs)
  • WHEAT TENDER: An Ethiopian government agency issued a new international tender to buy about 400,000 tonnes of milling wheat

Brazil Soy Crop Seen Up 3.4% Y/y to 142.01M Tons: Conab

Compares with 137.3m tons in prev. season, Brazil’s national supply co. says in report

  • Soy output seen up 0.89% from 140.8m tons last month
  • Total corn output seen at 116.7m tons; 0.34% from last month; 34.1% from last season
  • Total grain, oilseed and fiber production estimated at 289.8m tons vs 288.6m tons last month; up 14.7% from 252.8m tons last season

Brazil Clears Genetically Modified Wheat Developed by Bioceres

Brazil cleared the sale of a genetically modified, drought-tolerant wheat strain developed by Bioceres Crop Solutions Corp., marking a critical milestone in the Argentine company’s quest to convince the world of the safety of such crops.

Brazil’s national biosafety commission, known as CTNBio, approved the commercial release of a genetically modified wheat known as IND-00412 at a meeting on Thursday morning, according to the the country’s Ministry of Science, Technology and Innovation. Brazil, the biggest buyer of Argentine wheat, cleared the strain after performing a safety assessment, the agency said in a statement Thursday, adding that it would publish a Youtube video on the topic later in the day.

The approval is the most critical milestone for genetically modified wheat to date. Before Thursday’s decision, only Argentina had approved Bioceres’ seeds for what it calls HB4 wheat. While the vast majority of the world’s soy and corn crops are already genetically modified, they’re largely fed to livestock. Modified wheat, meanwhile, has proven more controversial and difficult to gain acceptance of because it would be directly eaten by humans.

Argentine Wheat Harvest Facing Some Interruptions on Rainfall

Argentina’s wheat harvest had to be repeatedly halted last week due to rainfall in the west of the country, but production estimates remain on track, according to a major grains exchange.

The estimated total wheat production for the 2021-2022 season remains at 19.8 million metric tons due to higher crop yields, according to a report released by the Buenos Aires Grain Exchange on Thursday. Meanwhile, a limited water supply will adversely impact the harvest in the southern region of the country if current low-rainfall trend does not revert in the short-term, the report added.

Earlier in the day, the Rosario Board of Trade cut its own estimates of wheat output for the 2021-2022 season by 1.4%, citing heat and lack of rainfall. Precipitation expected this weekend will be key to define final estimates, the report said.

Soybean planting reached a 18.8% completion rate from 7.1% in previous week and total planting area was held at 16.5 million hectares. Corn planted estimates were also held at 7.1 million hectares.

Argentina 2021-2022 Wheat Output Estimate Falls By 1.4%: Rosario

Estimated production of the new crop falls marginally to 20.4m metric tons from 20.7m last month, the Rosario Board of Trade says in a report dated Nov. 10.

  • Output impacted by heat and lack of rainfall; Buenos Aires was the most affected region
  • Precipitation expected this weekend will be key to define final estimates, according to report
    • 80-140 mm of additional precipitation required to normalize conditions
    • Despite revised output, crop season still in route to surpass 2019/2020 record by ~1 Mt
  • Output in Cordoba, La Pampa and Santiago del Estero was in line with estimates
  • Planting area is highest in 19 years; 14% of the area has been harvested
  • Soy planting set to be the lowest in 15 years; planting has taken place in 2.75 million hectares, 17% of 20/21 goal
  • NOTE: Argentine soy is planted from late October and starts being harvested in March
  • Corn outlook has improved considerably due to rainfall and is now “very good” in Santa Fe, Buenos Aires, Cordoba and Entre Rios, according to report
    • Production estimate for corn in 2022 expected to reach between 55-56m tons
    • Planting reaches 42% of goal
  • La Nina weather pattern is already affecting the Argentinian weather and limiting rainfall, bourse says

Europe Fertilizer Output Cuts Deepen as Costs Rise: CRG Group

European fertilizer producers have cut ammonia output by a quarter amid concerns that natural gas prices will remain high until mid-2022, CRU Group’s Head of Fertilizer Chris Lawson said in an interview.

  • Plants that have remained operational despite higher production costs have curbed output by 7.2m tons, further tightening the region’s supply of nitrogen fertilizer
  • This is in addition to ~3.2m tons of output lost after some plants shut down amid soaring energy costs
    • NOTE: European gas and power prices surged to record-highs in recent weeks amid a supply crunch and uncertainty over Russian flows to the region
  • Fertilizer producers are holding back from ramping up production due to fluctuating gas prices
    • NOTE: European gas prices rose Thursday after Belarus President Alexander Lukashenko said he might consider shutting down a key pipeline linking Russia to Europe
  • Some farmers in Europe may miss out on supplies for use in spring 2022, Lawson says
  • Curbs on fertilizer exports from China and Russia, combined with a potentially colder-than-usual winter, will likely exacerbate the crisis
    • Lawson sees prices remaining elevated for the next 6 months
  • A significant drop in fertilizer prices, similar to in 2008, is highly unlikely as demand for the crop nutrient is expected to remain high amid tight supply and low inventories

Indonesia’s Palm Oil Stockpiles Rises 6.4% M/m in Sept.: Gapki

Stockpiles increased to 3.65 million tons in September, from 3.43 million tons in previous month, as exports dropped, according to the Indonesian Palm Oil Association, known as Gapki.

  • Total shipments dropped to 2.89m tons in Sept., from 4.27m tons in August, Gapki said in an emailed statement on Thursday
    • Exports to the two biggest buyers India and China fell, along with cargoes to Malaysia and the European Union
  • Palm oil production fell to 4.57m tons in Sept., from 4.62m tons in August
  • Domestic consumption at 1.475m tons in Sept., vs 1.465m tons in August
    • Palm oil use for biodiesel rose to 622,000 tons in Sept. vs 569,000 tons in August
    • Palm oil use for food fell to 672,000 tons in Sept. vs 718,000 tons in August

NOPA October U.S. soybean crush seen at 181.945 mln bushels -survey

The U.S. soybean crush likely rebounded in October from a three-month low the prior month as newly harvested beans bolstered crushing supplies, according to analysts polled 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 181.945 million bushels of soybeans in October, according to the average of estimates from 11 analysts.

If realized, the figure would be up 18.3% from the 153.800 million bushels processed in September and the fourth largest crush for any month on record. But it would be 1.8% below the 185.245 million bushels processed in October of last year, which was the largest-ever crush for any month.

Estimates for the October 2021 crush ranged from 176.900 million to 187.789 million bushels, with a median of 181.700 million bushels.

The monthly NOPA report is scheduled for release at 11 a.m. CST (1700 GMT) on Monday. NOPA releases crush data on the 15th of each month, or the next business day.

Soyoil supplies at the end of October were seen rising for a fourth straight month to 1.724 billion pounds, based on estimates from eight analysts. If realized, it would be up 2.4% from 1.684 billion at the end of September.

Stocks estimates ranged from 1.590 billion to 1.834 billion pounds, with a median of 1.742 billion.

NOPA’s monthly release will no longer include soymeal export totals reported by its members “due to likely inadvertent under-reporting,” the group said.

“While our members have adequate information about the location of their direct customer-buyers, they currently have no way of knowing with certainty whether the product may ultimately be moved or transferred into shipment channels that are actually destined for export,” NOPA said in a statement.

Brazil flour millers ask president to intervene against GMO wheat from Argentina

Brazilian flour milling association Abitrigo said it would ask the president’s office to convene a national biosecurity committee to review a decision allowing imports of GMO wheat flour from Argentina, according to a statement on Thursday.

Abitrigo also said it is evaluating legal options to suspend a decision by Brazilian biosecurity agency CTNBio on Thursday approving the flour imports from Argentina.

French Barley, Soft-Wheat Planting in Final Stages: AgriMer

  • Soft-wheat planting was 87% complete in France as of Nov. 8
    • Compares with 80% in the prior week and 86% last year
  • Winter-barley planting was 94% complete
    • Compares with 90% the prior week and 93% last year
  • Durum-wheat planting was 38% complete
    • Compares with 26% the prior week and 50% last year
  • French corn crop was 83% harvested
    • Compares with 73% the prior week and 97% last year
  • 99% of winter-barley is in good or very condition
    • Compares with 98% the prior week and 94% last year

China corn prices rise as bad weather delays crop shipments

Corn prices in China have pushed to multi-month highs despite the advancing harvest after wet weather slowed crop collection just as record energy prices pushed up grain drying and logistics costs, analysts and traders said.

New crop corn futures on the Dalian Commodity Exchange have rallied nearly 9% in the past month to their highest since June, while key cash markets in the east and south of the world’s second-largest corn consumer have climbed sharply in recent days.

Cash corn in the key grain consumption hub of Shandong Province in eastern China jumped to 2,890 yuan ($451.81) a tonne this week from less than 2,650 yuan at the start of the month, after snowstorms hit northern and northeastern China snarling crop shipments.

In northern and northeastern China, around 12% of the corn crop has already been sold to the market on average so far, compared with 14% at same time last year, according to a survey done by Myagric.com.

Corn prices are also supported by the rising costs of harvesting and drying the new crop, the country’s agriculture ministry said in its monthly crop report this week.

China’s grain drying towers are mainly coal fuelled. Some of the facilities have shut in recent weeks because of record coal prices and to comply with government orders to reduce consumption.

Brazil Says Possible Mad Cow Human Cases Aren’t >From Eating Beef

Two possible cases of mad cow disease in humans that are under investigation in Brazil have no relation to beef consumption, Agriculture Ministry says Thursday in emailed statement.

  • Both cases are in Rio de Janeiro state, Brazilian health foundation known as Fiocruz says in separate statement
  • The two patients admitted to hospital for investigation of mad cow disease still have no confirmed diagnosis, Fiocruz says

 JBS Says Labor Woes Are Crimping Output Growth Around Globe

  • Meat giant says worker shortage limits production increases
  • Jobs issue is hurting supply chain and logistics around world

The world’s largest meat supplier is finding that a shortage of workers are affecting operations in every developed nation, limiting production increases and raising costs.

The issue is more acute in the U.S. though it also impacts operations in Europe, Canada and Australia, with a lack of direct and indirect workers, Andre Nogueira, head of JBS SA’s U.S. division, said Thursday during the Brazilian company’s earnings call.

“Labor shortages are holding back production growth,” he said. “This is a key issue for the industry.”

Staffing shortages aren’t necessarily cutting into existing production capacity, though the lack of workers is keeping JBS from expanding its output. JBS USA has a full team in pork and beef operations, though that doesn’t mean his division is delivering the same level of production using a similar number of employees as in the past, Nogueira said. Workers don’t accept Saturday shifts anymore. Labor shortages are also seen in the whole supply chain, affecting logistics.

JBS USA’s beef operational costs rose on more labor expenses and benefits in the third quarter, while its pork unit faced hurdles to hire truck drivers, the company said in its earnings statement. On chicken, production mix was less than optimal due to a lack of workers. In the U.K., JBS controlled companies faced hurdles to hire truck drivers as those from the European Union left following Brexit, adding to labor shortages in facilities.

“It’s structural adjustment in the meat industry,” Nogueira said.

World food import bill to reach record high in 2021: FAO

The global food trade should hit an all-time record high in both volume and value terms, according to a new report released on Thursday by the UN Food and Agriculture Organization (FAO).

By the end of 2021, the global food import bill should extend beyond $1.75 trillion, marking a 14 percent increase from the previous year, and 12 percent higher than the previous forecast.

According to FAO’s new Food Outlook, trade in foodstuffs has shown “remarkable resilience” to disruptions throughout the pandemic, but rapidly rising prices, pose significant challenges for poorer countries and consumers.

The increase is driven by higher price levels of internationally traded food commodities and a threefold increase in freight costs.

Developing regions account for 40 percent of the total and their food import bill is expected to rise by 20 percent compared to the year before. Even faster growth is expected for Low-Income Food Deficit Countries (LIFDCs).

In terms of products, developing regions are facing sharp increases in basic staples such as cereals, animal fats, vegetable oils and oilseeds.

In developed regions, while high-value foods, such as fruits and vegetables, fishery products and beverages are driving the bulk of the increases.

Food and Metals Weighting Grows in S&P GSCI Index Shake Up

  • Soybeans, corn sees a jump while copper rises, gold falls
  • Total assets following the index estimated at $76 billion

Agriculture and industrial metals will comprise a larger share of the S&P GSCI commodity benchmark next year while energy, livestock and precious metals will shrink.

Soybeans and corn will see the biggest increases within agriculture, which will have the largest sector weight gain, S&P Dow Jones Indices said in a press release. Copper will rise the most among base metals, while gold’s share will fall by nearly 1 percentage point to 5.3%.

The commodity benchmark has about $76 billion tracking it, according to Societe Generale SA estimates in January. The S&P GSCI spot index has jumped about 42% this year.

Energy will still make up more than half the index weighting, with the two major global oil contracts adding up to more than 37% of it. The new weights will become effective with the January roll period beginning Jan. 7. No new contracts will be added or removed.

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