Global Ag News for Sept 30.22

HEADLINES TODAY

Brazil more competitive than U.S. to ship soy to China, Rumo CEO says

Brazil, the world’s biggest soybeans supplier, has overtaken rival United States as the most competitive shipper of the oilseed to top importer China, the head of rail company Rumo RAIL3.SA said on Thursday.

Rumo Chief Executive Joao de Abreu noted Brazil’s cost per tonne in dollars to ship soy to China was lower than that of the United States in the first half of this year.

“Brazil has just become more competitive than the United States to move agricultural products to their destinations,” he said during an event in São Paulo. “I am talking mainly about China, Brazil’s top market.”

Rumo is a leading rail company and operates Latin America’s biggest grain terminal in Rondonopolis, in the south of Mato Grosso state, at the heart of Brazil’s farm country.

While reaffirming plans to add more logistics capacity there soon, Abreu said the country cannot stop investing to keep its competitive edge.

“We are going to start (building) a railroad serving the north of Mato Grosso, which accounts for 40% of Brazilian grain exports,” he said, adding the state only has 300 kilometers (186 miles) of railroads.

Rumo’s project will add another 700 km there, connecting farmers in remote parts of the state.

In recent years, Brazil has made progress improving its national infrastructure, even though most of its cargo is still moved by trucks.

One key development involved shipping more grains through northern ports, an operation that entails the use of barges, with Brazil taking advantage of its abundant Amazonian waterways to ship produce.

That became a competitive alternative compared to relying solely on southern ports like Santos and Paranagua.

MARKETS & WEATHER

Wheat prices overnight are up 11 3/4 in SRW, up 11 3/4 in HRW, up 9 in HRS; Corn is up 3 3/4; Soybeans up 5; Soymeal up $0.16; Soyoil down 0.21.

For the week so far wheat prices are up 27 1/2 in SRW, up 28 in HRW, up 25 3/4 in HRS; Corn is down 3 1/2; Soybeans down 10; Soymeal down $1.45; Soyoil down 0.03.

For the month to date wheat prices are up 76 1/2 in SRW, up 66 in HRW, up 45 1/2 in HRS; Corn is up 2 3/4; Soybeans down 6 3/4; Soymeal down $6.30; Soyoil down 3.83.

Year-To-Date nearby futures are up 18% in SRW, up 22% in HRW, down -1% in HRS; Corn is up 13%; Soybeans up 7%; Soymeal up 0%; Soyoil up 19%.

Chinese Ag futures (JAN 23) Soybeans up 2 yuan; Soymeal up 2; Soyoil up 22; Palm oil up 92; Corn up 5 — Malaysian palm oil prices overnight were up 85 ringgit (+2.54%) at 3427.

There were changes in registrations (50 Soymeal). Registration total: 3,084 SRW Wheat contracts; 0 Oats; 0 Corn; 5 Soybeans; 46 Soyoil; 197 Soymeal; 40 HRW Wheat.

Preliminary changes in futures Open Interest as of September 29 were: SRW Wheat down 2,606 contracts, HRW Wheat down 2,231, Corn down 2,950, Soybeans down 32,286, Soymeal down 7,289, Soyoil down 232.

Northern Plains Forecast: Isolated to scattered showers Friday-Monday. Temperatures above to well above normal through Monday. Outlook: Isolated showers Tuesday. Mostly dry Wednesday-Saturday. Temperatures above normal Tuesday-Wednesday, near to above normal Thursday-Saturday.

Central/Southern Plains Forecast: Mostly dry Friday. Isolated showers northwest Saturday-Monday. Temperatures near to above normal through Monday. Outlook: Isolated showers Tuesday-Wednesday. Mostly dry Thursday-Saturday. Temperatures near to above normal Tuesday-Saturday.

Western Midwest Forecast: Isolated showers north through Monday. Temperatures near to above normal Friday-Monday

Eastern Midwest Forecast: Mostly dry Friday. Isolated showers far southeast Saturday-Sunday. Mostly dry Monday. Temperatures below normal Friday, near normal Saturday-Monday. Outlook: Isolated showers Tuesday-Thursday. Mostly dry Friday-Saturday. Temperatures near to above normal Tuesday-Wednesday, near to below normal Thursday-Saturday.

The player sheet for Sept. 29 had funds: net sellers of 1,500 contracts of SRW wheat, sellers of 0 corn, sellers of 1,000 soybeans, sellers of 4,000 soymeal, and  buyers of 4,500 soyoil.

Map of North & South America

TENDERS

  • BARLEY PURCHASE: An importer group in the Philippines is believed to have bought around 50,000 tonnes of animal feed barley expected to be sourced from Australia in an international tender which closed on Thursday
  • MILLING WHEAT SALE: The Taiwan Flour Millers’ Association purchased an estimated 51,800 tonnes of milling wheat to be sourced from the United States in a tender which closed on Thursday, European traders said.
  • FOOD WHEAT SALE: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) bought a total of 61,800 tonnes of food-quality wheat from the United States and Canada in regular tenders that closed on Thursday.
  • CORN PURCHASE: The Korea Feed Association (KFA) purchased about 60,000 tonnes of animal feed corn in a private deal on Friday after previously cancelling an earlier purchase in an international tender.
  • WHEAT SALE: Algeria’s state grains agency OAIC has started purchasing milling wheat in an international tender on Thursday, European traders said in early assessments. The tender was held on an optional-origin basis but reported prices suggested Russian wheat was likely to be supplied, traders said.

PENDING TENDERS

  • WHEAT TENDER: Pakistan’s tender to buy 300,000 tonnes of wheat closed on Monday with the lowest offer believed to be $398.92 a tonne c&f, European traders said in initial assessments. Only one trading house, Agrocorp, was believed to have submitted offers. The state agency Trading Corporation of Pakistan (TCP) is still considering the offers and no purchase has been reported, traders said.
  • WHEAT TENDER: Jordan’s trade ministry is seeking 120,000 tonnes of wheat shipped in March and April in an international tender closing Sept. 27, a government source said. Jordan’s state grains buyer opened the new tender after making no purchase in a Tuesday tender.
  • WHEAT TENDER: The World Food Programme, a United Nations agency, has issued an international tender to purchase about 100,000 tonnes of milling wheat, European traders said on Monday. The deadline for submission of price offers in the tender is Sept. 28 with an award expected on Sept. 30.
  • WHEAT TENDER: Jordan is seeking 120,000 tonnes of wheat in an international purchasing tender with a deadline for offers on Oct. 4, a government source told Reuters on Tuesday.
  • BARLEY TENDER: Jordan is seeking 120,000 tonnes of barley in an international purchasing tender with a deadline for offers on Oct. 5, a government source told Reuters on Wednesday.
  • WHEAT TENDER: Iraq’s state grains buyer has issued tenders to buy a nominal 50,000 tonnes of milling wheat, European traders said on Wednesday. The deadline for submission of price offers in the tenders is Oct. 10. The wheat can be sourced from optional origins but Russian wheat cannot be offered, they said.

US Export Sales of Soybeans, Corn and Wheat by Country

The following shows US export sales of soybeans, corn and wheat by biggest net buyers for week ending Sept. 22, according to data on the USDA’s website.

  • China bought 549k tons of the 973k tons of soybeans sold in the week
  • Mexico led in corn, Guatemala led in wheat

US Export Sales of Pork and Beef by Country

The following shows US export sales of pork and beef product by biggest net buyers for week ending Sept. 22, according to data on the USDA’s website.

  • Mexico bought 23.8k tons of the 34.4k tons of pork sold in the week
  • South Korea and China combined for 13.3k tons of the 22k tons of beef sold

Argentina Rains in October Would Put End to Wheat Gloom: Bourse

Rains forecast for October would sustain the Buenos Aires Grain Exchange’s new wheat production estimate of 17.5m metric tons, it says in a weekly report.

  • This week’s estimate, which comes after a severe drought, is 15% lower than a pre-season estimate from May
  • 46% of the wheat crop is in a poor-to-very poor condition vs. 42% last week
  • Seeding of the first corn crop remains delayed and rains are needed to cement planting intentions

Argentine Corn, Wheat Crop Estimates Latest: Exchange

The Buenos Aires Grain Exchange releases weekly report on website.

  • 2022-23 corn area held at 7.5m ha, planting 6% complete
  • 2022-23 initial wheat production est. is for 17.5m tons, 22% lower than the previous season

Drought Pushes Mississippi River Grain Shipping Rate to a Record

  • Prices spike during crucial harvest, threatening supply chain
  • Less room for barges could force up rates more, USDA warns

American farmers face yet another supply-chain headache just as harvest season moves into high gear: Not enough barges on a shrinking Mississippi River.

Drought is drying up the crucial US water artery. That means less room for vessels shipping out corn and soybeans, the biggest US crops. Barge rates reached $49.88 per ton on Tuesday, the highest on record and up nearly 50% from a year ago, according to a government report released Thursday.

The Mississippi River is by far the largest US export channel for corn and soybeans, accounting for more than half of the shipments bound for the world market. The barge woes are hitting at harvest time when supplies will be the biggest, and follow a harrowing season of weather setbacks and soaring inflation for farm necessities like fuel and fertilizer.

“It’s game time,” said Mike Steenhoek, executive director of the Soy Transportation Coalition. “We need our supply chain to be operating on all cylinders.”

US farmers are under intense scrutiny this year as the world is counting on their harvests to help restock food reserves drained by Russia’s war in Ukraine. Farmers stand to see less for their crops as grain companies typically are willing to pay less for crops when it costs more to ship them.

“The tight barge supply is problematic for grain shippers heading into harvest,” the US Department of Agriculture said in its weekly grain transportation report. Increased demand “will likely put even more upward pressure on barge rates.”

Fertilizer sought by US grain producers also are at risk, raising the prospect of renewed price surges for crop nutrients like nitrogen at a time of worsening food inflation.

Limited vessel capacity follows freight railroad disruptions earlier this month and ongoing challenges in securing trucks. The nationwide labor crunch is also a problem as the barge industry is having difficulty hiring and retaining workers, according to USDA.

Cargo from barges is unloaded and then reloaded onto larger bulk vessels for the world market. According to the Iowa Department of Transportation data, one barge can hold the same amount of 16 rail cars or 70 large semi trucks.

Meanwhile, lack of rain has sent the water route by Cairo, Illinois, where the Ohio River flows into the Mississippi, to critically low levels. It’s forecast to drop even more in October, according to US government data.

A single shipment of soybeans, the second-biggest US crop export after corn, has been cut in size by as much as 38%, according to Steenhoek.

The corn industry depends on the Mississippi River for moving 65% of its exports. It’s also the most “efficient and cost effective way for the corn belt to receive inputs,” said Matt Ziegler, public policy manager at the National Corn Growers Association.

While barge scarcity and rate spikes could be “detrimental” to growers, “I’m not sure there’s much we can do about it,” Ziegler said.

Egypt Said to Agree Vegetable-Oil Purchases in Private Talks

Egypt has contracted to buy edible oil after private talks with suppliers rather than tender process, following a similar move for wheat purchases, according to two traders and a Supply Ministry official familiar with the situation.

No details given on who Egypt has held discussions with, nor amounts contracted

France’s Rouen Grain Exports Fell 49% in Week to Sept. 28

France’s Rouen grain exports totaled 75,700 tons, compared with 149,133 tons a week earlier, according to an emailed report.

Malaysia Sept. Palm Oil Exports +9.7% M/m: Intertek

Following is a summary of Malaysia’s Sept. palm oil exports according to Intertek Testing Services.

  • Total exports for Sept. 2022: 1.425m tons
  • Crude palm oil exports: 221,625 tons, 15.6% of total
  • EU led all destinations for total exports: 328,729 tons

Malaysia’s Sept. 1-30 Palm Oil Exports 1,319,792 Tons: AmSpec

Shipments rise 10.8% m/m from 1,190,848 tons exported during Aug. 1-31, according to AmSpec Agri on Friday.

French Corn Harvest Reaches Halfway Point: AgriMer

About 51% of the French corn harvest was collected as of Sept. 26, up from 26% a week earlier, crops office FranceAgriMer said on its website.

  • At this time last year, the corn harvest was only 2% done

Saskatchewan Says Harvest Progress Ahead of Five-Year Average

81% of crops harvested as of Sept. 26, compared to the five-year average of 75%, the province’s agriculture ministry says Thursday in a report.

  • Many producers in eastern and northern areas waiting for canola stems to dry down or for warm, windy days to lower moisture in cereal grains
  • 96% of durum, 83% of spring wheat and 66% of canola harvested
  • Winter cereals can’t be planted in some areas due to extremely dry soils
  • Fall fertilizer applications not possible in many areas due to dry conditions

China to lower port fees for cargoes by 20% in Q4

China will lower port fees for cargoes by 20% in the fourth quarter of this year to promote stability and smooth flow of industrial and supply chains, the transport ministry said on Friday.

Local governments are also encouraged to offer preferential fees during the COVID-19 prevention and control period, it added.

US Hog and Pig Inventory Fell 1.4% Y/y; Est. -0.8%

The hog herd totaled 73.8m head on Sept. 1, according to the USDA report released Thursday on its website.

  • That is the ninth consecutive quarter of y/y declines
  • Sows retained for breeding totaled 6.152m head, a 0.6% decline from year ago
  • Hogs for slaughter fell 1.5% y/y to 67.648m head
  • Pig crop fell to 33.581m from 33.944m last year
  • Pigs per litter unchanged from last year at 11.13

US Crops in Drought Area for Week Ending Sept. 27: USDA

The following table shows the percent of US agricultural production within an area that experienced drought for the week ending Sept. 27, according to the USDA’s weekly drought report.

  • Corn area experiencing moderate to intense drought up 6 percentage points to 40% in the week
  • Soybean drought area rose 9 points to 38%

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