Global Ag News for Aug 10.23

TOP HEADLINES

Rains to Curb Quality for Last Stretch of French Wheat Harvest

Harvesting of soft-wheat fields in northwest France has been postponed by persistent heavy rainfall, according to a joint statement from FranceAgriMer, Arvalis and Terres Inovia.

• The so-called specific weight — a gauge of crop quality — will deteriorate for those fields
• However, for the crop that was collected before rains began in late July, specific weights largely meet market expectations
• NOTE: 87% of the country’s soft-wheat was harvested as of July 31
• Protein content is running at about 11.5%, a satisfactory level, and falling numbers also meet milling-industry needs

FUTURES & WEATHER

Wheat prices overnight are up 3 1/4 in SRW, up 8 3/4 in HRW, up 4 1/4 in HRS; Corn is up 2 1/2; Soybeans up 9 1/2; Soymeal up $4.20; Soyoil down 0.15.

For the week so far wheat prices are up 4 3/4 in SRW, up 15 1/2 in HRW, up 1 3/4 in HRS; Corn is down 1/2; Soybeans down 15 1/4; Soymeal down $2.80; Soyoil down 1.22.

For the month to date wheat prices are down 26 3/4 in SRW, down 44 3/4 in HRW, down 31 3/4 in HRS; Corn is down 16 1/4; Soybeans down 13 3/4; Soymeal down $0.90; Soyoil up 0.29.

Year-To-Date nearby futures are down 19.3% in SRW, down 13.3% in HRW, down 12.2% in HRS; Corn is down 28.7%; Soybeans down 5.8%; Soymeal down 10.9%; Soyoil up 4.5%.

Chinese Ag futures (SEP 23) Soybeans up 33 yuan; Soymeal up 34; Soyoil up 164; Palm oil up 104; Corn down 6 — Malaysian palm oil prices overnight were down 44 ringgit (-1.17%) at 3727.

There were no changes in registrations. Registration total: 1,398 SRW Wheat contracts; 448 Oats; 0 Corn; 11 Soybeans; 71 Soyoil; 0 Soymeal; 147 HRW Wheat.

Preliminary changes in futures Open Interest as of August 9 were: SRW Wheat up 3,654 contracts, HRW Wheat up 877, Corn down 13,651, Soybeans up 1,151, Soymeal down 1,664, Soyoil down 2,855.

Northern Plains: The pattern remains active and cool across the Northern Plains through next week with multiple chances of precipitation, favorable for filling corn and soybeans, but disrupting wheat harvest.

Central/Southern Plains: A front has set up around Oklahoma and will be active for most of the week. Systems will pass by off to the north, with chances for precipitation continuing as well as cooler temperatures. It will continue to be hot and fairly dry in Texas into next week, otherwise, the forecast is favorable for filling corn and soybeans.

Midwest: Several systems will move through the Midwest with more favorable rainfall through next week. Temperatures will be variable but generally near to below normal throughout the period as well, favorable for filling corn and soybeans.

Delta: A front has stalled across the Delta and will be a focal point for shower development for most of the week while systems moving through the Corn Belt could provide additional precipitation for northern areas as well. Drought areas in the south will remain hotter and drier, unfavorable for soybeans and cotton there.

The player sheet for Aug. 9 had funds: net sellers of 6,000 contracts of SRW wheat, sellers of 4,000 corn, sellers of 1,000 soybeans, sellers of 1,000 soymeal, and  buyers of 2,000 soyoil.

TENDERS

• SOYBEAN SALES: The U.S. Department of Agriculture confirmed private sales of 251,000 metirc tons of U.S. soybeans for delivery to China in the 2023/24 marketing year that begins Sept. 1.
• CORN TENDER PASSED: South Korea’s Major Feedmill Group (MFG) is believed to have rejected all offers and made no purchase in an international tender to buy up to 140,000 tonnes of animal feed corn
• CORN TENDER: Algerian state agency ONAB issued an international tender to purchase up to 80,000 metric tons of animal feed corn to be sourced from Argentina.
• WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy up to 120,000 metric tons of milling wheat which can be sourced from optional origins.
• FEED BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase up to 120,000 metric tons of animal feed barley.
• FEED WHEAT AND BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said it will seek 60,000 metric tons of feed wheat and 20,000 tons of feed barley to be loaded by Nov. 30 and arrive in Japan by Jan. 25 via a simultaneous buy and sell (SBS) auction that will be held on Aug. 23.

PENDING TENDERS

• WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy a total of 93,972 metric tons of food-quality wheat from the United States and Canada in a regular tender that will close on Aug. 10.
• WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 metric tons of milling wheat
• VEGETABLE OILS TENDER: Egypt’s GASC is seeking refined sunflower oil in one-litre bottles in an international tender. It is seeking at least 5,000 metric tons of oils, free of customs, on behalf of the Holding Company for Food Industries, for delivery during October and/or November and/or December. Deadline for submitting offers is Aug. 17.
• WHEAT TENDER: A Syrian state grains agency issued an international tender to purchase and import 200,000 metric tons of soft milling wheat

TODAY

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 Aug. 3.

• Corn est. range 350k – 1,200k tons, with avg of 590k
• Soybean est. range 450k – 1,500k tons, with avg of 918k

Argentina’s Rosario exchange gives upbeat 2023/34 soy, corn forecasts

Argentina’s Rosario grains exchange on Wednesday issued an upbeat forecast for the South American country’s 2023/24 soybean and corn harvests.

The exchange predicted a 48 million metric ton harvest of soybeans, up from 20 million tons in the last season, while the corn harvest could stand at 56 million tons, up from 34 million tons expected for 2022/23.

The South American country is one of the world’s largest exporters of processed soybeans as well as a major corn and wheat supplier.

Argentine farmers will start planting soybeans in October, and the Rosario exchange expects the planting area to surpass the previous season’s by 6.3% with some 17 million hectares.

The corn planting area, however, should remain the same size as that of the 2022/23 season due to higher farming costs and uncertainty around the availability of fertilizers, the exchange said.

Many farmers are nor in a position to invest in the more expensive corn crops, it added, as they look to recover from a devastating drought that hit Argentina’s agricultural heartlands last season. Corn planting is set to start in September.

The 2022/2023 cycle a “bad season” for soybeans, the exchange said last month, as the harvest came in 59% below initial forecasts as crops suffered what has been called the worst drought in 60 years.

Argentina Corn Sales Under FX Program Reach 6m Tons: Rosario

Corn farmers have traded 6m metric tons since the government temporarily devalued the peso for them on July 24-25, according to the Rosario Board of Trade.

• The 6m includes new trades and completion of previous delayed-price sales
• NOTE: Total Argentine 2022-23 corn supplies are 34.5m tons
• The program, which also applies to sunflowers, sorghum and barley, has so far brought in $1.8b to the central bank

Malaysian Palm Oil Reserves Hit Five-Month High on Strong Output

Palm oil stockpiles in Malaysia rose to a five-month high in July as production in the world’s second-biggest grower surged more than expected, although robust exports kept the increase in check.

Inventories rose about 0.7% from a month earlier to 1.73 million tons, according to the Malaysian Palm Oil Board on Thursday. That’s the highest since February, but below the 1.79 million tons estimated in a Bloomberg survey.

Crude palm oil production jumped 11% to a seven-month high of 1.61 million tons, compared to 1.56 million tons in the survey. Output dropped 4.6% in June. Exports last month surged 16% to 1.35 million tons, the highest since March and surpassing estimates of 1.28 million tons.

“Inventories are mildly up, as exports are good so far, but the production increase is quite large,” said Gnanasekar Thiagarajan, head of trading and hedging strategies at Kaleesuwari Intercontinental. “With no major demand expected in the coming month, prices could come under pressure.”

The MPOB data is seen as overall quite bearish as rising production and weakening demand going forward will add to more stocks, Thiagarajan said.

Futures in Kuala Lumpur fell as much as 1.4%, before trading at 3,720 ringgit a ton by the midday break. The world’s most-consumed cooking oil rallied above the 4,000 ringgit psychological mark last month on fears that escalating tensions in the Black Sea region will disrupt shipments of sunflower oil, but have since retreated as investors shift focus to swelling palm supplies and dwindling demand from key importers.

“With end-stocks at these levels, there seems to be little relief on the horizon,” said Paramalingam Supramaniam, a director at Selangor-based broker Pelindung Bestari. “No other industry is facing margin pressure as acute as palm refining, as demand for palm products wanes.”

The Malaysian Palm Oil Board last week said it expects prices to hover between 3,800 ringgit and 4,000 ringgit by the end of this year, lower than an earlier forecast of 4,200 ringgit, as attractive prices of sunflower and soybean oils are likely to have an impact on the tropical oil. Palm competes with these vegetable oils for a share in the global market. 

China’s Grain Basket Warns of ‘Hard Battle’ as More Rain Looms

China’s northeastern grain basket is bracing for more rains and flooding brought on by Typhoon Khanun, as producers struggle to recover from the impact of an earlier storm that ravaged farmland and destroyed crops.

Heavy rains are expected in parts of China’s northeast that includes the provinces of Heilongjiang, Jilin and Liaoning, and the Inner Mongolia region, in the next few days. Local governments are making urgent preparations to secure agriculture production and minimize crop losses in an area that produces almost 30% of China’s grain.

Although the full picture of the damage sustained so far isn’t clear, recent flooding has inundated corn and rice crops, as well as wrecking greenhouses and livestock pens, according to a slew of notices released by local agriculture bureaus this week.

Typhoon Khanun made landfall in South Korea earlier Thursday and heavy rains are expected to lash parts of northeast China through Sunday. It’s the sixth such storm of the year and follows hard on the heels of Typhoon Doksuri, which claimed dozens of lives in northern China.

The government in Heilongjiang warned in an emergency notice on Tuesday of a “hard battle” to ensure agriculture production. In Jilin, the farm bureau said “risks from the impact of Typhoon Khanun are mounting, leading to huge pressure on agricultural disaster prevention and rescue work.”

Bureaus in Liaoning and Inner Mongolia have urged farmers to plant alternative crops with shorter life cycles, like vegetables and oats, on farmland devastated by flooding.

Ukrainian Navy Designates Temporary Corridors for Trade Vessels

• Trade ships will be admitted into corridors amid military risk
• Routes to allow passage of ships in and out of Ukrainian ports

The Ukrainian navy designated new temporary Black Sea sea routes for trade vessels that are willing to navigate waters threatened by Russian forces.

The routes will focus on allowing ships to exit Ukrainian ports at Chornomorsk, Odesa and Pivdennyi, the Navy said in a statement on Facebook. Russia’s Defense Ministry said last month that all ships headed to Ukraine’s ports would be considered as potentially carrying military cargo.

“Vessels whose owners and captains officially confirm that they are ready to sail in the current conditions will be allowed to pass through the routes,” the statement said. It wasn’t immediately clear how many ships would be willing to sail in such conditions.

The routes will allow ships to move in and out of Ukrainian ports even amid Russia’s military threat and the risk of mining, it said.

The last ship with Ukrainian food cargo left the port of Odesa on July 16 as Russia pulled out of the Black Sea grain deal and continued attacks on Ukrainian port infrastructure.

Fertilizer Rallies for Seventh Week With India Set to Buy More

Nitrogen and phosphate rose in the US and Canada last week as producers reset summer prices and autumn prepay offers, while potash list prices edged higher after the close-of-summer fill programs. India’s Aug. 9 tender revealed a more than 40% price jump, supporting margins for producers, including CF Industries, Nutrien and Yara.

US Phosphates Strengthen, Urea Slips

Phosphate prices continued to strengthen on reports of tight supply, with New Orleans (NOLA) barge offers moving up $35-$55 a short ton vs. last week and many inland warehouses showing similar gains. NOLA urea was down slightly, to $370-$385 a short ton vs. the prior $375-$445, but the market paused at midweek following news of India’s latest tender, which saw offers up a full $115 a metric ton from the June tender. US prices were mixed for other nitrogen fertilizers, with urea ammonium nitrate strengthening slightly and ammonium sulfate moving down in several regional markets. Potash prices were flat at NOLA and inland.

Brazil Urea Seeks Direction Following India’s Latest Tender

Thin supply pressured phosphate prices higher in Brazil, while potash edged lower on limited demand. Urea and ammonium sulfate prices also retreated slightly as farmers delay purchases in a strong market and the industry assesses India’s latest urea tender, which saw offers up $115 a metric ton (mt) from the country’s last tender in June.

Phosphate Firms; Nitrogen, Potash Retreat: Wednesday Whisper

Ammonium sulfate prices in Brazil fell $10 a metric ton (mt) vs. last week, to $220-$225 cost-and-freight (CFR), while urea dropped to $410-$420/mt vs. last week’s $440-$450, with reports of new bids closer to $400. Monoammonium phosphate (MAP) prices strengthened to $490-$510/mt vs. $490-$500 last week, with new offers around $515-$520. Potash prices in Brazil slipped to $330-$360/mt vs. last week’s $345-$360.

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