Global Ag News for Sep 30
TODAY – EXPORT SALES, QUATERLY GRAIN STOCKS, SMALL GRAINS
Wheat prices overnight are up 4 3/4 in SRW, up 5 in HRW, up 5 3/4 in HRS; Corn is up 1 3/4; Soybeans up 1 3/4; Soymeal down $0.18; Soyoil up 0.64.
For the week so far wheat prices are down 9 3/4 in SRW, down 3 1/2 in HRW, down 7 1/2 in HRS; Corn is up 13; Soybeans down 1 3/4; Soymeal up $0.04; Soyoil up 0.35. For the month to date wheat prices are down 7 1/4 in SRW, up 4 3/4 in HRW, up 5 3/4 in HRS; Corn is up 6 1/2; Soybeans down 7; Soymeal down $6.20; Soyoil down 0.28.
Chinese Ag futures (JAN 22) Soybeans up 7 yuan ; Soymeal down 8; Soyoil up 144; Palm oil up 178; Corn up 22 — Malasyian Palm is up 128. Malaysian palm oil prices overnight were up 128 ringgit (+2.87%) at 4583 ending the quarter on a high, with prices surging to a record amid concern about tight vegetable oilsupplies while demand booms.
Brazil Grains & Oilseeds Forecast: Rio Grande do Sul and Parana Forecast: Scattered showers through Sunday. Temperatures above normal through Saturday, near to below normal Sunday. Mato Grosso, MGDS and southern Goias Forecast: Scattered showers north through Thursday. Isolated to scattered showers Friday-Sunday. Temperatures near to above normal through Saturday, near normal Sunday.
Argentina Grains & Oilseeds Forecast: Cordoba, Santa Fe, Northern Buenos Aires Forecast: Isolated showers Wednesday-Thursday. Mostly dry Friday. Isolated showers Saturday, east Sunday. Temperatures near to above normal Wednesday-Thursday, near normal Friday, below normal Saturday-Sunday. La Pampa, Southern Buenos Aires Forecast: Isolated showers Wednesday-Thursday. Mostly dry Friday. Isolated showers Saturday, east Sunday. Temperatures near to above normal Wednesday-Thursday, near normal Friday, below normal Saturday-Sunday.
Midwest corn, soybean and winter wheat forecasts: West: Mostly dry Wednesday. Isolated to scattered showers Thursday-Sunday. Temperatures above to well above normal through Saturday, above normal Sunday. East: Mostly dry through Friday. Isolated to scattered showers Saturday-Sunday. Temperatures above normal through Sunday. 6 to 10 day outlook: Isolated showers Monday-Friday. Temperatures above normal Monday-Friday.
The player sheet for Sept. 29 had funds: net buyers of 1,000 contracts of SRW wheat, buyers of 8,500 corn, buyers of 6,000 soybeans, buyers of 2,000 soymeal, and buyers of 2,000 soyoil.
Preliminary changes in futures Open Interest as of September 29 were: SRW Wheat up 576 contracts, HRW Wheat down 1,258, Corn down 667, Soybeans up 2,585, Soymeal up 335, Soyoil up 1,288.
There were no changes in registrations. Registration total: 1,180 SRW Wheat contracts; 2 Oats; 17 Corn; 1 Soybeans; 365 Soyoil; 1 Soymeal; 1,273 HRW Wheat.
- WHEAT TENDER UPDATE: The lowest price offered in the tender from Pakistan to purchase 640,000 tonnes of wheat which closed on Wednesday was believed to be $377.00 a tonne c&f
- FAILED WHEAT TENDER: Jordan’s state grain buyer the trade ministry has made no purchase in an international tender to buy 120,000 tonnes of milling wheat which closed on Wednesday
- WHEAT FLOUR TENDER: The state purchasing agency in Mauritius issued an international tender to buy 47,000 tonnes of wheat flour to be sourced from optional origins
- WHEAT TENDER: A United Nations agency has issued an international tender to purchase about 200,000 tonnes of milling wheat on behalf of the Ethiopian government
DOE: U.S. Ethanol Stocks Rise 0.5% to 20.22M Bbl
According to the U.S. Department of Energy’s weekly petroleum report.
- Analysts were expecting 20.195 mln bbl
- Plant production at 0.914m b/d, compared to survey avg of 0.939m
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 Thursday for week ending Sept. 23.
- Corn est. range 300k – 1,100k tons, with avg of 585k
- Soybean est. range 700k – 1,200k tons, with avg of 885k
CROP SURVEY: U.S. Soybean Crush and Corn for Ethanol
The following is from a Bloomberg survey of six anlaysts.
Soybean crush seen at 169.1m bu in Aug., a 3.2% drop from year ago
- Crude and once-refined soybean-oil reserves at end of August seen at 2.115b lbs, up from 1.945b
- Corn used in ethanol production seen up 2.7% y/y to 422m bu
- The USDA is scheduled to release its Aug. Fats and Oils report along with the Grain Crushings report on Oct. 1 at 3pm
Manitoba Harvest is 90% Complete With Cereal Seeding Finished
Harvest in the Canadian agricultural province is ahead of the five-year average of 77% for this time of year, Manitoba government says.
- Winter cereal seeding is largely complete with crop development ranging from two- to six-leaf stages, weekly crop report says
- Barley, oats and field pea harvest is complete, with 99% of spring wheat in the bin
- 94% of canola is harvested, along with 55% of soybean and 68% of flax
- Preliminary reports show canola crops are generally yielding below-average oil content
- Some drought-stressed soybean fields have regrowth with green stems and new pods forming, but this is not affecting harvest quality
- Early corn moisture is 25%-29%
EU Soft-Wheat Exports Rose 37% in Season Through Sept. 26
Soft-wheat shipments during the season that began July 1 reached 6.95m tons as of Sept. 26, versus about 5.09m tons in a similar period a year earlier, the European Commission said Wednesday on its website.
- NOTE: The figures are incomplete, as French data is through Aug. 12 and Italy through Sept. 10, the commission said
- 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 (901k tons), South Korea (770k tons) and Egypt (568k tons)
- EU barley exports totaled 2.37m tons, compared with 2.11m tons a year earlier
- China is the top market at 603k tons
- EU corn imports reached 3.43m tons, against 4.22m tons a year earlier
China’s Sluggish Sow Herd Recovery May Boost Brazil Pork Exports
Brazil’s pork exports are expected to rise as much as 13% next year, to 1.25m tons, encouraged by a lower Chinese production and an economic rebound in other nations, Ricardo Santin, head of country’s exporter group ABPA, says in press conference.
- China has cut its estimate for its sow herd in 2021-2025 to 37m-41m head from 40m-43m previously, Santin says
- Pork shipments may also be favored by a upcoming opening of Canada to Brazilian products
- Brazil government is negotiating an increase on its chicken export quota to U.K., which faces a supply shortage
- Local corn supply has increased amid export disruptions and the removal of duties on corn imports, including those from the U.S.
- “There’s no risk of a corn shortage for meat producers”
- Chicken, pork producers have passed on rising costs to prices, which are expected to remain high
- Brazil’s chicken, pork per capita consumption seen rising next year amid economic rebound and expensive beef
- Chicken consumption in Brazil may rise as much as 5.5% in 2022, while pork could rise 5%
Malaysia’s September Palm Oil Exports 1,628,168 Tons: AmSpec
Shipments climb 33.6% m/m from 1,219,166 tons exported in August, according to AmSpec Agri on Thursday.
China’s farmers face more pain as power crunch drives up feed costs
China’s huge livestock sector is facing a hike in feed costs as the country’s worst power outages in years forces soybean crushing plants to close, diving down supplies and sending prices higher, analysts and industry participants said. The rise in feed costs comes at a bad time for China’s farmers, many of whom are struggling with losses and weak margins due to low prices for hogs in particular.
At least half the soybean crushing plants in northern and northeastern China have been shut since last week and will stay closed until at least after the National Day holiday on Oct 1, a plant manager and a feed purchase manager told Reuters, on condition of anonymity as they were not authorized to speak to media.
The volume of soybeans crushed nationwide this month fell by 9.4% from August to 7.68 million tonnes, said consultancy MySteel in a report on Thursday.
Soymeal prices in Tianjin, a major northern production hub, jumped by 220 yuan ($34) to 3,800 yuan per tonne in the last week, though prices have edged down slightly ahead of the National Day holiday.
The feed cost hikes come as pig farmers grapple with weak hog prices, under pressure from higher production as stocks are rebuilt after the deadly African swine fever disease decimated the massive pig herd.
Argentina wheat production slightly down on recent/expected dryness across the Pampas
2021/22 ARGENTINA WHEAT PRODUCTION: 19.8 [17.6–21.7] MILLION TONS, DOWN <1% FROM LAST UPDATE
Recent dryness across the eastern Pampas fractionally lowers 2021/22 Argentina wheat production to 19.8 [17.6–21.7] million tons. In September’s WASDE (10 September) USDA placed Argentina wheat production at 20.0 million tons, down from its previous estimate of 20.5 million tons. Bolsa de Comercio in Rosario and Bolsa de Cereales in Buenos Aires are projecting it at 20.5 and 19.2 million tons, respectively. Our current estimate puts planted area at 6.8 million hectares, up 1.4% from last season, largely in line with 6.6 and 6.9 million hectares reported by Bolsa de Cereales in Buenos Aires and Bolsa de Comercio in Rosario, respectively.
The second half of September featured a drier weather pattern compared to recent weeks. The eastern Pampas, where more than two-thirds of the country’s total wheat is grown, barely received any rain (less than <10 mm in total, with deficits between 15-30 mm) over the past 15 days. Southern Santa Fe and eastern Buenos Aires, in particular, are currently showing near 5-year low soil moisture levels, warranting attention. Unfortunately for the crops there (that are already entering their late developmental stages at the moment), this dry trend is expected to continue at least through next week, which will likely further hurt yield potential.
Favorable warm conditions and low frost risks bode well for late season U.S. corn yields
2021/22 U.S. CORN PRODUCTION: 387 [372–405] MILLION TONS, UP <1% FROM LAST UPDATE
A favorable end to grain fill in the Midwest and positive harvest weather across the Central/Northern Plains fractionally raise 2021/22 U.S. corn production to 15.2 [14.7–15.8] billion bushels. In September’s WASDE (10 September), USDA placed U.S. corn production at 380.93 million tons, up from its previous estimate of 374.68 million tons. This change is directionally in line with what we have been calling for since early August. The latest Reuters Poll of Analysts (06 September) had analysts’ own estimates for corn production and yield at 14.85 [14.14–15.09] billion bushels and 174.7 [167.4–177.5] bushels per acre (bpa) (vs. Refinitiv Ag Research’s 176.2 bpa), respectively. Our current median estimate puts planted area at 93.9 million acres, slightly above the USDA’s September estimate of 93.3 million acres.
As the last week of the month continues, more mixed but overall positive weather is in store. Most of the major corn producing areas will likely remain anomalously warmer than average throughout the majority of the U.S. Plains and Midwest through the first few days of October (according to recent GFS & EC weather model guidance). Temperatures are likely to cool down towards the end of this period but frost risks should remain low. On rainfall, guidance through 10 days showcases above average totals in most of the western Corn Belt, which at this stage is deemed to be unfavorable for early harvest to catch up. While avoiding frost over the next few weeks will continue to lower chance of major late-season yield losses, the potential for harvest delays should still be monitored closely as the season winds down.
U.S. pledges up to $500 mln to prevent African swine fever
The U.S. Department of Agriculture on Wednesday pledged up to $500 million to prevent the spread of the fatal pig virus African swine fever, after Haiti and the Dominican Republic recently confirmed outbreaks.
A U.S. outbreak would likely slash American pork exports and pig prices, hurting rural farmers and meat companies like Tyson Foods Inc TSN.N.
African swine fever is harmless to humans but often deadly to pigs, leading to financial losses for farms. Governments also often block pork imports from countries where the disease has been found to prevent transmission.
The USDA said it would commit funds from its Commodity Credit Corporation spending authority to expand and coordinate monitoring and surveillance for the disease, along with other efforts.
The USDA told Reuters it has spent about $400,000 in the Dominican Republic to help the country respond to African swine fever.
A Brazilian Farming Boom Is Rewarding Funds That Bet on Bad Debt
- Even in a drought, years of high profit are spurring repayment
- Value of repayment deals almost tripled in year through August
Brazilian farmers flush with cash are taking the opportunity to repay old loans, rewarding investors that took on defaulted debt when times were tougher.
A combination of strong global crop prices and weak local currency has meant years of record farming profits in the top producer of everything from soybeans to sugar-cane and orange juice.
Even considering this year’s drought, the windfall has put farmers in a better position to pay back outstanding loans that their suppliers sold to financial firms. In the case of NPL Brasil, the value of repayment deals with farmers almost tripled in the first eight months of 2021 after gaining 150% last year.
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