Global Ag News June 23
Drought-Stressed Manitoba Crops Urgently Need Rainfall
Wheat prices overnight are up 8 1/4 in SRW, up 11 1/4 in HRW, up 15 1/4 in HRS; Corn is up 2 1/4; Soybeans up 3 3/4; Soymeal down $0.12; Soyoil up 0.81.
For the week so far wheat prices are down 2 1/2 in SRW, up 1 1/2 in HRW, up 31 3/4 in HRS; Corn is down 25; Soybeans down 6 3/4; Soymeal down $1.34; Soyoil up 2.80.
For the month to date wheat prices are down 4 in SRW, down 3 1/4 in HRW, up 64 1/2 in HRS; Corn is down 4 1/4; Soybeans down 66 3/4; Soymeal down $28.00; Soyoil up 0.01.
Chinese Ag futures (SEP 21) Soybeans up 38 yuan ; Soymeal down 7; Soyoil up 112; Palm oil up 94; Corn down 3 — Malasyian Palm is up 48. Malaysian palm oil prices overnight were up 48 ringgit (+1.42%) at 3438 on worries over prospects for tighter global oilseed supplies with dry weather threatening canola production in Canada, the world’s biggest producer. Gains in soybean oil and a weaker Malaysian currency contributed to the advance.
Midwest corn, soybean and winter wheat forecasts: West: Isolated showers around Iowa Tuesday-Wednesday. Scattered showers Thursday-Saturday. Temperatures below normal Tuesday, near to above normal Wednesday-Friday, near normal Saturday. East: Scattered showers northwest through Thursday. Scattered showers Friday-Saturday. Temperatures below normal Tuesday, near to below normal Wednesday, near to above normal Thursday-Saturday. 6 to 10 day outlook: Scattered showers Sunday. Isolated showers Monday-Thursday. Temperatures near to below normal southwest and near to above normal elsewhere Sunday-Tuesday, near to above normal Wednesday-Thursday.
The player sheet for 6/22 had funds: net sellers of 5,500 contracts of SRW wheat, sellers of 15,000 corn, sellers of 12,500 soybeans, sellers of 5,000 soymeal, and buyers of 2,000 soyoil.
Preliminary changes in futures Open Interest as of June 22 were: SRW Wheat down 6,188 contracts, HRW Wheat up 395, Corn down 42,259, Soybeans down 508, Soymeal up 1,908, Soyoil down 6,105.
There were no changes in registrations. Registration total: 20 SRW Wheat contracts; 16 Oats; 0 Corn; 13 Soybeans; 768 Soyoil; 442 Soymeal; 1,249 HRW Wheat.
- WHEAT TENDER: Jordan’s state grain buyer issued a new tender to buy 120,000 tonnes of wheat, with a bidding deadline of July 6, after cancelling a previous tender earlier on Tuesday that sought the same amount
- WHEAT TENDER: Japan’s Ministry of Agriculture sought 159,665 tonnes of food-quality wheat from the United States and Canada in a regular tender.
- VEGOIL PURCHASE: Egypt’s state grains buyer, the General Authority for Supply Commodities, said it bought 73,500 tonnes of vegetable oils in an international tender for arrival Sept. 5-30.
- WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of milling wheat
- WHEAT TENDER: Turkey’s state grain board TMO issued an international tender to purchase a total of about 395,000 tonnes of red milling wheat
- WHEAT TENDER: The Taiwan Flour Millers’ Association has issued an international tender to purchase 55,000 tonnes of grade 1 milling wheat to be sourced from the United States.
Chinese Corn Prices Tumble to Lowest This Year on Record Imports
- Country on track to more than triple imports in current year
- Farmers have boosted area and could harvest a record crop
Corn prices in China, the world’s second-largest consumer and producer, have dropped to around the lowest level since December because of record imports and a government clampdown on hoarding and speculation.
The most active, rolling contract on the Dalian Commodity Exchange has fallen about 12% from its record in January. Imports of the grain used in animal feed jumped fivefold in May from a year earlier, and are on course to reach an all-time high of 26 million tons in 2020-21, more than three times the amount purchased the previous year, according to the U.S. Department of Agriculture.
Chinese farmers have also expanded their corn acreage this year and production could increase just over 4% from a year earlier to a record 272 million tons. Other bearish pressures come from competition with wheat in animal feed and low prices in the hog industry, a top consumer.
China to Check Local Firms’ Trading in Commodities Markets: NDRC
China’s national economic planning agency and the market regulator sent “many” joint work teams to some provinces and cities to ensure commodities supply and stabilize prices, NDRC says in a statement, without identifying the regions.
- The work teams will check enterprises’ trading in the commodities futures and spot markets, listen to suggestions from various firms on crackdown on speculations and ensuring market supply
- The officials will also seek opinions from experts and market institutions on strengthening supervision of both futures and spot markets, and ensure normal market order
- NOTE: The two government agencies recently also visited the Beijing iron ore trading center and the national coal trading center, in efforts to stabilize commodities prices
Early monsoon rains cause damage to maize crop in Bihar
Early monsoon rains have damaged maize crops in Bihar’s Seemanchal and Kosi regions with farmers looking for solace in higher procurement prices for the crop this year due to higher demand.
As per official estimates, about 250,000 farmers produce 35 to 40 lakh metric tonnes of maize in over 350,000 hectares of land across the seven districts of Kosi and Seemanchal regions in Bihar . Some are happy they are getting a better price for the crops than last year. “We sold our maize at ₹1000 per quintal last year, but this year it is ₹1500 or even more,” one farmer said.
Drought-Stressed Manitoba Crops Urgently Need Rainfall
Rainfall is needed in one of Canada’s key agricultural provinces to keep crop yields and forage production up due to “highly variable weather,” Manitoba government said Tuesday.
ETHANOL: U.S. Weekly Production Survey Before EIA Report
Output and stockpile projections for the week ending June 18 are based on nine analyst estimates compiled by Bloomberg.
- Production seen higher than last week at 1.031m b/d
- Stockpile avg est. 20.661m bbl vs 20.602m a week ago
- The EIA in Washington is scheduled to release the report at 10:30am Wednesday
U.S. May Pork Supplies in Cold Storage Dropped to 461M Pounds
According to the USDA’s May cold storage report released on the agency’s website.
- Total pork fell 1.5% from May of last year
- Pork belly supplies dropped to 36.2m pounds from 60.3m last year
- Beef supplies fell to 414m pounds from 417.4m last year
Brazil Increases Crop Financing by 6.3% For 2021-2022 Season
Brazil government will offer 251.2b reais for farmers to plant, invest and sell their crops, Agriculture Ministry said in a statement.
- From this total, 165.5b reais will have subsidized interest rates, +7% y/y
- Brazil Treasury destined 13b reais to equalize interest rate
- About 178b reais of the total will be delivered to fund farmers planting and trade while 73b reais to investment
- Farmers can take loan from July 1 until June 30, 2022
Brazil’s 2020/2021 corn crop forecast below 94 mln T – Reuters poll
Brazilian farmers will harvest just under 94 million tonnes of corn this season, a Reuters poll of ten forecasters indicated on Tuesday, a fall of 8.5% from the last due to a severe drought.
Crop failure will lead to higher imports and lower exports of the cereal, the forecasters suggested, as Brazil, home to some of the world’s largest meat processors, needs it to make livestock feed.
Daniely Santos, an analyst with agribusiness consultancy Celeres, cut her 2021 corn export forecast to 22.5 million tonnes from 32 million tonnes, and told Reuters she estimates Brazilian corn imports at 4 million tonnes.
If dry weather persists, corn yields may fall further in states such as Mato Grosso, Goias and Minas Gerais, a weather specialist said.
Last year Brazilian farmers collected 102.58 million tonnes of corn, according to government estimates.
In April, a Reuters poll of 11 forecasters showed the possibility of a record corn crop of 107 million tonnes, but poor weather during the development stage hurt that prospect.
Brazil’s second corn crop, which is planted after soybeans are harvested at the end of the country’s summer, was the most hit by a lack of rainfall.
Agribusiness consultancy Safras & Mercado had initially pegged Brazil’s second corn crop at 84 million tonnes, only to slash that forecast to below 71 million tonnes a few weeks into the season.
Argentina Dials Back Ban on Beef Exports Amid Soaring Inflation
- Argentine meatpackers get OK to sell restricted volumes abroad
- Fifth-biggest exporter is trying to mitigate inflation at home
Argentina is stepping back from its ban on beef exports, an unorthodox move implemented last month in an effort to rein in runaway inflation.
The government brokered a deal with meatpackers including Brazil-based JBS SA and Marfrig Global Foods SA, allowing them to export up to half of last year’s levels on some beef cuts, Production Minister Matias Kulfas told reporters Tuesday. The measure lasts through August.
The beef restrictions are a new chapter in the uneasy relationship between Argentina’s leftist government and farmers whose exports rake in tens of billions of much-needed hard currency. The government took office 18 months ago and has has already tried to nationalize a bankrupt soy exporter and banned corn exports, only to backtrack on both.
So far, the ban hasn’t curbed high beef prices as intended. Instead of getting cheaper, they’ve increased in part due to a farmer strike in protest.
Prices in Buenos Aires jumped 76% from a year ago, according to beef institute Ipcva, easily outstripping overall inflation. The ban also sent U.S. cattle futures higher. Argentina is the world’s fifth-biggest beef exporter, and much of its product goes to China, the largest buyer of commodities.
LIVESTOCK SURVEY: Analysts See a 2.3% Decline in U.S. Hog Herd
June 1 hog inventory seen falling to 75.551m head vs 77.364m head last June, according to the avg in a Bloomberg survey of seven analysts.
- Breeding inventory seen down 1.2% y/y, and market hogs seen falling 2.5% y/y
- The pig crop seen 1.9% lower y/y
- March-May farrowing seen down 2.5% y/y, and June-Aug. farrowing intentions seen falling 3.1% y/y
LIVESTOCK SURVEY: U.S. Cattle on Feed Placements Seen Down 4.6%
May placements onto feedlots seen falling y/y to 1.96m head, according to a Bloomberg survey of ten analysts.
- At this level, placements would fall below the five-year avg for May, which is 2.05m head
- Feedlot herd as of June 1 seen rising by 0.7% y/y to 11.75m head
- Marketings seen rising 23.6% y/y
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