Global Ag News for Nov 17th

 TODAY – EIA WEEKLY PETROLEUM

Wheat prices overnight are up 4 in SRW, up 2 1/2 in HRW, up 3 in HRS; Corn is up 1/2; Soybeans up 6 1/4; Soymeal up $0.16; Soyoil up 0.56.

For the week so far wheat prices are down 4 1/2 in SRW, down 10 1/4 in HRW, down 26 1/2 in HRS; Corn is down 7; Soybeans up 13 1/4; Soymeal up $0.72; Soyoil up 0.76. For the month to date wheat prices are up 39 in SRW, up 36 1/4 in HRW, down 13 in HRS; Corn is up 1 3/4; Soybeans up 8; Soymeal up $33.40; Soyoil down 1.47.

Chinese Ag futures (JAN 22) Soybeans down 40 yuan ; Soymeal down 5; Soyoil down 10; Palm oil up 22; Corn up 9 — Malasyian Palm is up 111. Malaysian palm oil prices overnight were up 111 ringgit (+2.32%) at 4899 buoyed by rising edible oil prices in Chicago and Dalian as well as anticipation for robust export demand to last through November.

There were changes in registrations (-32 Soybeans, ). Registration total: 1,180 SRW Wheat contracts; 2 Oats; 2 Corn; 1,083 Soybeans; 233 Soyoil; 1 Soymeal; 108 HRW Wheat.

Preliminary changes in futures Open Interest as of November 16 were: SRW Wheat up 3,984 contracts, HRW Wheat up 3,343, Corn up 14,921, Soybeans up 5,477, Soymeal up 46, Soyoil down 3,092.

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

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

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

The player sheet for Nov. 16 had funds: net sellers of 9,000 contracts of  SRW wheat, sellers of 7,000 corn, sellers of 3,000 soybeans, sellers of 2,000 soymeal, and  buyers of 4,500 soyoil.

TENDERS

  • CORN SALE: The U.S. Department of Agriculture (USDA) confirmed private sales of 270,000 tonnes of U.S. corn to Mexico for shipment in the 2021/22 marketing year.
  • SOYBEAN SALE: The USDA confirmed private sales of 161,000 tonnes of U.S. soybeans to unknown destinations for shipment in the 2021/22 marketing year.
  • CORN SALE: South Korea’s largest animal feed maker Nonghyup Feed Inc (NOFI) purchased about 68,000 tonnes of animal feed corn in an international tender which closed on Tuesday but made no purchase of 65,000 tonnes of feed wheat also sought
  • WHEAT TENDER: Egypt’s GASC set a tender on Tuesday to buy an unspecified amount of wheat from global suppliers for shipment from Jan. 1-15 for payment at sight. Deadline for tender is Wednesday.
  • FEED WHEAT TENDER: An importer group in the Philippines is tendering to purchase an estimated 220,000 tonnes of animal feed wheat
  • WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy a total of 121,805 tonnes of food-quality wheat from the United States and Canada in a regular tender that will close late on Nov. 18.
  • WHEAT SALE: Algeria’s state grains agency OAIC purchased at least 600,000 tonnes of optional-origin milling wheat in an international tender on Tuesday

 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
  • WHEAT, BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries said it will seek 80,000 tonnes of feed wheat and 100,000 tonnes of feed barley to be loaded by Jan. 31, 2022, and arrive in Japan by Feb. 24, via a simultaneous buy and sell auction that will be held on Nov. 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
  • WHEAT TENDER: The Taiwan Flour Millers’ Association has issued an international tender to purchase 48,000 tonnes of grade 1 milling wheat to be sourced from the United States. Deadline for price offers is Nov. 18.
  • WHEAT TENDER: Bangladesh’s state grains buyer has issued an international tender to purchase 50,000 tonnes of milling wheat
  • WHEAT TENDER: An Ethiopian government agency issued a new international tender to buy about 400,000 tonnes of milling wheat
  • WHEAT TENDER: The Korea Feed Association (KFA) has issued an international tender to purchase up to 138,000 tonnes of animal feed corn to be sourced from optional origins

ETHANOL: U.S. Weekly Production Survey Before EIA Report

Output and stockpile projections for the week ending Nov. 12 are based on eight analyst estimates compiled by Bloomberg.

  • Production seen higher than last week at 1.058m b/d
  • Stockpile avg est. 20.441m bbl vs 20.286m a week ago
    • Would be the highest since August

LIVESTOCK SURVEY: U.S. Cattle on Feed Placements Seen Up 2.3%

October placements onto feedlots seen rising y/y to 2.24m head, according to a Bloomberg survey of nine analysts.

  • Placements were down 2.9% y/y in September
  • Feedlot herd as of Nov. 1 seen falling by 0.3% y/y to 11.94m head
  • Marketings seen falling 3.8% y/y
    • Would be the fourth straight y/y decline

SovEcon Sees Ukraine 2022 Wheat Output Falling Due to Weather

Ukraine’s wheat crop may decline to 27.1m tons in 2022 from 31.9m tons this year due to challenging weather, consultant SovEcon said in an emailed note.

  • The area under winter wheat is expected to decline by 0.1m hectares from a year earlier to 6.8m hectares
    • Says winter-crop conditions “are the worst for recent years due to lack of precipitation and extremely dry soil”
  • Sovecon raised its 2021 Ukraine corn-crop forecast by 1.5m tons to a record 39.9m tons
    • Says average yield of 7.05 tons/hectare is close to a record, and may reach 7.3 tons/hectare by end of campaign

Ethanol Lobby to White House: Blend Rule Rollback Would Backfire

  • Group says easing biofuel mandate would boost gasoline prices
  • White House is considering options to lower gas pump costs

The ethanol industry warns the Biden administration that rolling back national biofuel blending rules to lower gasoline prices would be a big mistake.

“We were shocked to learn that one of the potential actions reportedly being discussed by the White House is ‘relaxing mandates to mix gasoline with biofuels’,” Renewable Fuels Association CEO Geoff Cooper wrote to Brian Deese, director of the White House National Economic Council.

  • Lowering biofuel blending requirements under the Renewable Fuel Standard would lead to higher, not lower, gasoline prices, as well as boost tailpipe pollution tied to climate change and public health risks, Cooper argues in Nov. 15 letter
  • The Biden administration should focus instead on proposing overdue blending rules and expanding higher ethanol blends nationwide: RFA
  • NOTE: While wholesale prices of conventional gasoline have recently been at the biggest discount to a 10% ethanol fuel blend since 2014, RFA stressed that the increase is a temporary aberration related to higher demand following a pandemic-driven slump in production

EU Soft-Wheat Exports Up 7.7% Y/y; Still Missing French Figures

Soft-wheat shipments during the season that began July 1 reached 10m tons as of Nov. 14 vs 9.29m tons in a similar period a year earlier, the European Commission said Tuesday on its website.

  • NOTE: Figures for France, one of the EU’s top grain exporters, are complete only until July
  • NOTE: Data 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 were Algeria (1.43m tons), Egypt (1.2m tons) and South Korea (823k tons)
  • EU barley exports totaled 3.02m tons, compared with 3.16m tons a year earlier
    • China is the top market at 660k tons, Saudi Arabia second at 506k tons
  • EU corn imports reached 4.52m tons, against 6.55m tons a year earlier

EU 2021/22 soybean imports at 4.51 mln T by Nov. 14, rapeseed 1.61 mln T

European Union soybean imports in the 2021/22 season that started in July had reached 4.51 million tonnes by Nov. 14, data published by the European Commission showed on Tuesday. That compared with 5.41 million tonnes by the same week in the previous 2020/21 season, the data showed.

EU rapeseed imports in 2021/22 had reached 1.61 million tonnes, compared with 2.65 million tonnes a year earlier. Soymeal imports 2021/22 totalled 5.14 million tonnes against 6.95 million a year ago, while palm oil imports stood at 2.02 million tonnes versus 2.47 million tonnes.

SovEcon Sees Ukraine 2022 Wheat Output Falling Due to Weather

Ukraine’s wheat crop may decline to 27.1m tons in 2022 from 31.9m tons this year due to challenging weather, consultant SovEcon said in an emailed note.

French wheat shipments outside European Union at seven-year high in October

French soft wheat shipments outside the European Union last month reached their highest for an October since the 2014/15 season as shipments to China ramped up following a slow September, Refinitiv data showed.

Soft wheat exports to destinations outside the 27-country bloc totalled 973,300 tonnes in October, the fourth month of the 2021/22 season, an initial estimate based on Refinitiv loading data showed.

China was the largest non-EU destination for French soft wheat for the second consecutive month, with an initial estimate of 431,500 tonnes, followed by Algeria with 193,400 tonnes.

France is the EU’s biggest grain exporter.

Farming agency FranceAgriMer this month trimmed its forecast for French soft wheat exports outside the EU over the full July-June 2021/22 season to 9.4 million tonnes, but this is still 2 million tonnes above last season’s total.

Agriculture Market Isn’t in a Supercycle, Two Merchants Say

The fundamental conditions aren’t present for a supercycle in agriculture markets, although grain prices have potential to increase further, Ksenia Bolomatova, deputy director general of Russia-based United Grain, said on a panel at the Global Grain Geneva conference.

  • Rising grain prices have been caused by the pandemic, soaring demand and poor harvests in some countries
  • Supercycle conditions are seen more on the energy side than for agriculture, said Yves Pache, general manager of merchant Amaggi SA
  • For crops, surging Chinese imports have helped to drive demand, but the purchases are more for rebuilding government reserves than new consumption

Ukraine Looks to Avoid Grain-Export Restrictions: Minister

Ukraine faces similar challenges to Russia regarding domestic grain markets, but is working to avoid government interventions, Taras Kachka, Ukraine’s deputy minister for economic development, trade and agriculture, says at the Global Grain Geneva conference.

Canada Wheat Acreage Could Climb 6% in 2022 Season: Ministry

Canadian wheat acreage may climb about 6% y/y in the coming season and durum up 10%, said Tony McDougall, deputy director of the grains and oilseeds division at the country’s agriculture ministry.

  • That’s due to tight global supplies and prospects for favorable returns
  • NOTE: Canadian crop production was hit by a major drought in 2021
  • McDougall spoke at the Global Grain Geneva conference

Vietnam Lowers Tariffs on Wheat, Corn and Frozen Pork, USDA Says

Vietnam has changed its most-favored nation tariffs for corn, wheat and frozen pork, a move that will give U.S. producers greater access to the southeast Asian market, USDA says.

  • Vietnamese govt decree scraps most-favored-nation tariff on all classes of wheat, lowers the duty on corn to 2% from 5%, and reduces the duty on frozen pork to 10% from 15%: USDA statement
  • Tariff reductions for wheat and corn take force Dec. 30; frozen pork change effective July 1, 2022: USDA
  • NOTE: U.S. exports of corn, wheat and pork to Vietnam were valued at $228m in 2020: USDA
  • NOTE: Chicago hog futures jumped as much as 2.2% to the highest since early October

Algeria Amends Import Rules for More Black Sea Wheat: Ennahar

Algeria has amended grain-import requirements that will allow four major Russian and Ukrainian suppliers to compete for wheat sales to the North African country, Ennahar news portal reported, citing unidentified official sources.

  • Among the changes to requirements, Algeria doubled the allowed level of bug damage to 1%
  • The country has held talks with Russian and Ukrainian partners to import significant amounts of wheat, and the move is also to diversify away from French wheat
  • NOTE: The share of French wheat in Algeria’s imports has declined to 24% this year
  • Algeria held a wheat tender this week, allowing up to 1% bug damage in cargoes and calling for wheat on an 11.5% protein basis

Malaysia Reviewing 2-Tier Price Mechanism Of Cooking Oil To Control Price-Minister – NewsRise

Malaysia is reviewing all proposals including the two-tier price mechanism of cooking oil to keep a lid on rising cost on the back of higher crude palm oil prices, the federal domestic trade minister said Wednesday.

“If the CPO prices keep on increasing, there will be an effect on the government’s spending, especially on the implementation of cooking oil stabilization price scheme”, Alexander Nanta Linggi said in parliament.

The government will look at other measures to ensure adequate supply of cooking oil and make stocks available at reasonable prices especially to the bottom 40% of the financially weaker section of the population, Linggi said. “Our threshold subsidy a few years before was at 2500 ringgit metric ton CPO”, he added.

Canada floods kill one person, leave two missing; rail access cut to Vancouver port

The port of Vancouver, Canada’s largest, said on Tuesday that all rail access had been cut by floods and landslides further to the east that killed at least one person and left two others missing.

Two days of torrential rains across the Pacific province of British Columbia touched off major flooding and shut rail routes operated by Canadian Pacific Rail CP.TO and Canadian National Railway CNR.TO, Canada’s two biggest rail companies.

At least one person was killed when a mudslide had swept cars off Highway 99 near Pemberton, some 100 miles (160 kilometers) to the northeast of Vancouver, killing an unspecified number of people.

Search and rescue crews were combing through the rubble for signs of survivors or additional casualties, officials said.

Vancouver’s port moves C$550 million ($440 million) worth of cargo each day, ranging from automobiles and finished goods to essential commodities.

The floods temporarily shut down much of the movement of wheat and canola from Canada, one of the world’s biggest grain exporters, during a busy time for trains to haul grain to the port following the harvest.

This year drought has sharply reduced the size of Canada’s crops, meaning a rail disruption of a few days may not create a significant backlog, a grain industry source told Reuters.

EU Targets Key Commodities in New Rules to Prevent Deforestation

  • Rules to cover soy, beef, palm oil, wood, cocoa and coffee
  • Bloc to collect data to boost ‘deforestation-free’ goods

The European Commission will propose new rules Wednesday for companies selling six major commodities in Europe aimed at ensuring their goods aren’t contributing to deforestation and are legal in their country of origin, according to a document seen by Bloomberg.

The rules would apply to soy, beef, palm oil, wood, cocoa and coffee, as well as some derived products such as chocolate, leather and furniture.

Under the new rules, operators would have to collect the geographic coordinates of where the commodities originated, the document says. As part of the plans, the EU will operate a benchmarking system to categorize countries according to their level of risk for deforestation and that information will be used to determine the obligations on companies and member states.

For example, due diligence will be simplified for goods from lower risk areas while more enhanced demands will be placed on products coming from higher risk areas.

Safeguarding China’s grain supply ‘an eternal task’ for authorities as geopolitical tensions weigh on trade

With prices rising amid soured international relations, China’s top economic planner and a state mouthpiece commentary stress the importance of food security

Current level of grain reserves deemed ‘stable’, but a key task for the NDRC is improving its reserve-management capabilities

China intends to boost international cooperation to acquire critical farm produce while trying to diversify sources of grain, as food-supply security remains a pressing concern for the top leadership.

The call by the National Development and Reform Commission (NDRC), the country’s top economic planner, came at a time when grain prices are rising and relations with some exporting countries have turned sour.

China can largely sate its domestic appetite for rice and wheat, two staple foods, and runs a quota-based system for imports. It bought 2.94 million tonnes of rice and 8.38 million tonnes of wheat from overseas last year, compared with domestic production of 147 million tonnes and 134.3 million tonnes, respectively.

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