Global Ag News for Sep 9

TODAY – EIA ENERGY SUPPLY/DEMAND WEEKLY

Wheat prices overnight are down 12 1/4 in SRW, down 10 3/4 in HRW, down 10 in HRS; Corn is down 4 1/4; Soybeans down 7; Soymeal down $0.06; Soyoil down 0.38.

For the week so far wheat prices are down 29 in SRW, down 29 1/4 in HRW, down 28 in HRS; Corn is down 18; Soybeans down 19 1/2; Soymeal down $0.38; Soyoil down 1.90.

For the month to date wheat prices are down 25 in SRW, down 18 in HRW, down 19 in HRS; Corn is down 28 1/4; Soybeans down 20; Soymeal down $8.40; Soyoil down 1.64.

Chinese Ag futures (JAN 22) Soybeans up 53 yuan ; Soymeal down 31; Soyoil down 8; Palm oil up 66; Corn down 10 — Malasyian Palm is down 87. Malaysian palm oil prices overnight were down 87 ringgit (-1.94%) at 4391 amid a further decline in soybean oil, with investors awaiting a key report on the tropical oil’s stockpiles and production in second-largest grower Malaysia.

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

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

The player sheet for Sept. 8 had funds: net sellers of 5,000 contracts of  SRW wheat, sellers of 0 corn, sellers of 1,250 soybeans, buyers of 500 soymeal, and  sellers of 750 soyoil.

Preliminary changes in futures Open Interest as of September 8 were: SRW Wheat down 31 contracts, HRW Wheat down 61, Corn up 6,085, Soybeans up 3,314, Soymeal down 584, Soyoil down 1,578.

There were no changes in registrations. Registration total: 1,180 SRW Wheat contracts; 3 Oats; 0 Corn; 0 Soybeans; 299 Soyoil; 1 Soymeal; 1,275 HRW Wheat.

TENDERS

• WHEAT SALE: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), on Wednesday said that it bought 300,000 tonnes of wheat in an international tender. The purchase comprised 240,000 tonnes of Ukrainian wheat and 60,000 tonnes of Russian wheat, GASC said.
• SOYBEAN SALE: The U.S. Department of Agriculture confirmed private sales of 106,000 tonnes of U.S. soybeans to China for shipment in the 2021/22 marketing year.
• FEED WHEAT, BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said on Wednesday it will seek 80,000 tonnes of feed wheat and 100,000 tonnes of feed barley to be loaded by Dec. 31 and arrive in Japan by Feb. 24, 2022, via a simultaneous buy and sell (SBS) auction that will be held on Sept. 15.
• FAILED FEED GRAIN TENDER: South Korea’s largest animal feedmaker Nonghyup Feed Inc. (NOFI) has rejected all offers and made no purchase in an international tender for up to 69,000 tonnes of corn, 65,000 tonnes of feed wheat and 15,000 tonnes feed barley which closed on Wednesday, European traders said. Prices were regarded as too high.
• 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.

PENDING TENDERS

• FEED WHEAT TENDER: Importers in the Philippines are tendering to purchase an estimated 112,000 tonnes of animal feed wheat
• MILLING WHEAT TENDER: Bangladesh’s state grains buyer has issued another international tender to purchase 50,000 tonnes of milling wheat
• 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: Saudi Arabia’s main state wheat buying agency, the Saudi Grains Organization (SAGO) on Thursday issued an international tender to purchase about 360,000 tonnes of wheat

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

Output and stockpile projections for the week ending Sept. 3 are based on nine analyst estimates compiled by Bloomberg.

• Production seen higher than last week at 909k b/d
  • Would be the first week-on-week increase after eight straight declines
• Stockpile avg est. 21.112m bbl vs 21.11m a week ago

USDA updates farmer-reported U.S. crop planting totals for September

Farmers participating in U.S. crop subsidy programs reported “prevented plantings” by Sept. 1 of 637,805 acres of corn, 336,563 acres of soybeans and 291,881 acres of wheat, the U.S. Department of Agriculture (USDA) said on Wednesday.

The USDA’s Farm Service Agency released the data on Wednesday, two days earlier than scheduled, after the data was “inadvertently posted” online earlier in the day.

Producers enrolled in subsidy programs as of Sept. 1 reported planted acreage, including failed acres, at 91.218 million acres of corn, 86.184 million acres of soybeans and 49.323 million acres of wheat.

Producers that enroll in several Farm Services Agency programs must submit to USDA an annual report regarding all cropland use on their farms. USDA uses the information as an element in its crop estimates, which cover all farms, not just those that participate in the farm program.

Cooking-Oil Binge Has World’s Biggest Canola Reserves Plunging

• Stockpiles in Canada dwindled to a four-year low in July
• Falling stocks signal oilseed prices may remain elevated

Stockpiles of canola in the world’s biggest producer plunged as a drought in Canada combines with global surge in demand for cooking oil made from the seed.

Inventories of the oilseed tumbled by 49% to 1.8 million metric tons on July 31, the lowest level since 2017, Statistics Canada data showed Wednesday. More restaurants are opening up even as the Covid-19 pandemic drags on, using up vegetable oil. China is also purchasing more of the seed, with exports rising about a third from the prior year.

Prices for oilseeds like soybeans and canola have been touching new highs in 2021, and falling reserves signal that they could remain expensive. Groceries around the world have been getting pricier, and dwindling stockpiles offer little hope of relief from food inflation.

The soaring demand for vegetable oil is also evident in the figures for canola crushing, which the process of extracting oil from the seed. The Canadian crush rose to a record 10.4 million tons.

Canola futures rose slightly Wednesday, hovering below record-high levels reached in July due to drought in parts of the Canadian Prairies that are fanning supply concerns.

Brazil truckers block highways, Bolsonaro asks protestors to stand down

Brazilian truckers staged demonstrations throughout Brazil on Wednesday, partially blocking key routes in several states and prompting President Jair Bolsonaro to ask the protestors to stand down.

Truckers sympathetic to the president had partially blockaded highways in 16 states as of the late evening, briefly shutting down traffic in two locations, according to a statement from the Infrastructure Ministry.

In the late morning, federal Brazil’s highway police (PRF) had reported 53 blockades on federal roads tied to “social and political events, not involving key issues for independent truckers.”

Bolsonaro drew tens of thousands of supporters to major cities on Tuesday, including some truckers, using a national holiday to step up his attacks on Brazil’s Supreme Court and voting system. Truckers have previously demonstrated this year over high fuel prices.

India Increases Minimum Purchase Prices of Winter-Sown Crops

The government said Wednesday that it will increase the minimum support price for wheat by 2% from a year earlier to 2,015 rupees per 100 kilograms for 2022-23 marketing year that begins in April, according to a government statement.

• The support price is raised from 1,975 rupees/100kg a year earlier
  • Cost of production for wheat is estimated at 1,008 rupees for 2022-23
• NOTE: Government agencies buy various crops from farmers for welfare programs at minimum support prices, normally announced twice in a year before the sowing of monsoon crops like rice, cotton and soybeans, and winter crops such as wheat and rapeseed
• The following are the new government-approved minimum support prices for winer-sown crops in rupees per 100 kilograms or 220 pounds

U.S. 2021 Corn Prevented Planting 638k Acres, Soybeans 337k

From the USDA Farm Service Agency’s September report.

• Corn prevented planting up by 17,346 acres from Aug. report
• Soybeans rose by 20,176 acres
• Wheat mostly unchanged at 292,881 acres
• Prevented planting for all U.S. crops at 2.09m acres vs 2.04m

Asian crop importers brace for delays after Ida hits U.S. export hub

Asia’s grain and oilseed buyers are set to face shipping delays of at least one month after Hurricane Ida damaged key export terminals around the U.S. Gulf Coast, two traders and one miller said.

The slowdown in supplies is likely to stoke food inflation fears for price-sensitive consumers in Asia, where many importers have already drawn down crop inventories after having been forced to curb purchases amid volatile crop prices and COVID-related supply disruptions this year.

Importers led by top soybean buyer China, major corn buyer Japan and number two wheat importer Indonesia are likely to take a hit after top exporters such as Cargill suffered damage to grain-loading facilities.

Exporters said deals for grains and soy shipped from Louisiana Gulf terminals have stalled as most terminals remain dark, shifting demand to other locations such as the U.S. Pacific Northwest or Brazil.

China booked up to five bulk cargoes of U.S. soybeans for December shipment from the Pacific Northwest overnight, said two traders with knowledge of the deals. The U.S. Department of Agriculture (USDA) also confirmed sales of 106,000 tonnes of U.S. soybeans to China on Wednesday morning in the first daily soybean sales announcement in a week.

In Brazil, prices at ports have been rising in recent days, from under 167 reais per 60 kilo bag to 169 reais or more, according to Cepea, a research center at the University of Sao Paulo. Large exporters have been bidding up for beans to ship this month, trade sources said.

Indonesia’s 7-Month Palm Oil Exports Rise 3% Y/y: Trade Ministry

Exports of palm oil and its derivatives rose to 23.67m tons in January-July from 22.97m tons in the same period last year, Asep Asmara, director for exports of agriculture and forestry products at the Indonesia’s Trade Ministry, said in a webinar on Thursday.

Egypt’s Wheat Purchases Are Running 28% Behind Last Year

Egypt’s state buyer bought 300,000 tons of wheat in a tender on Wednesday, putting its total purchases for the 2021-22 season about 28% below a similar time last year.

Key highlights of the tender:

• It was Egypt’s biggest purchase since April, when the country started booking cargoes for the current season.
• Egypt bought Russian supplies for the first time since July, while Ukrainian grain now accounts for about a quarter of the total sales so far this season.
• The average price, including freight, climbed for a fifth straight tender and is at the highest in at least five years.

EIA maintains 2021, 2022 ethanol production forecasts

The EIA currently predicts fuel ethanol production will average 970,000 barrels per day this year, up from 910,000 barrels per day in 2020. In 2022, ethanol production is currently expected to average 1.01 million barrels per day.

On a quarterly basis, ethanol production is expected to average 990,000 million barrels per day during the third quarter of this year, falling to 980,000 barrels per day in the fourth quarter. In 2022, ethanol production is expected to average 980,000 barrels per day in the first quarter, 1.01 million barrels per day in the second quarter, 1.02 million barrels per day in the third quarter, and 1.01 million barrels per day in the fourth quarter.

Ethanol blending is currently expected to average 890,000 barrels per day this year, down when compared to the 900,000 barrels per day forecast made in the August STEO. Moving into 2022, ethanol blending is expected to increase to an average of 920,000 barrels per day, a forecast maintained from last month’s STEO. Ethanol blending averagede 820,000 barresl per day in 2020.

The agency also noted that the fuel ethanol-corn crush spread has been positive since mid-July after a few atypical months of negative spreads.

According to the EIA, the decrease in fuel ethanol prices is monthly the result of lower prices for corn. Corn prices increased during the first half of the year due to high demand in China, concerns of low production as a result of cold weather in the Midwest, and a La Nina weather pattern that brought hot and dry weather to Brazil and Argentina. Corn prices have come down since June, according to the EIA, as a result of increased planted corn acreage, increased production forecasts in the U.S., and uncertain demand in Asia.

The EIA also noted that uncertainty concerning Renewable Fuel Standard renewable volume obligations (RVOs) for 2021 has supported high renewable identification number (RIN) demand and ethanol prices.

Turkey cuts to zero import duty on agricultural products including wheat, rye, barley oats and maize oats and maize

Turkey has cut to zero the import customs duty for wheat, rye, barley, oats and maize, chick peas and lentils until year-end, according to an announcement published by the country’s Official Gazette on September 8. The notice also said import duties were reduced for coffee, with the duty for coffee from European Union countries lowered to 6% from 11%. Turkey is struggling with domestic crop production because of prolonged drought as well as high food inflation.