Global Ag News for June 16

TODAY —- EIA WEEKLY ENERGY STATUS REPORT / ETHANOL PRODUCTION & STOCKS

Wheat prices overnight are up 3/4 in SRW, down 1/4 in HRW, up 4 3/4 in HRS; Corn is down 3 1/4; Soybeans down 22 1/2; Soymeal down $0.14; Soyoil down 2.02.

For the week so far wheat prices are down 19 1/4 in SRW, down 25 in HRW, down 11 1/4 in HRS; Corn is down 39 1/4; Soybeans down 87 3/4; Soymeal down $1.76; Soyoil down 4.42.

For the month to date wheat prices are down 1/2 in SRW, up 1/2 in HRW, up 26 1/2 in HRS; Corn is up 25; Soybeans down 21 3/4; Soymeal down $15.60; Soyoil up 0.52.

Chinese Ag futures (SEP 21) Soybeans up 24 yuan ; Soymeal down 25; Soyoil down 22; Palm oil up 24; Corn down 10 — Malasyian Palm is down 132. Malaysian palm oil prices overnight were down 132 ringgit (-3.69%) at 3448 tracking losses in rival soy, while investors weighed the tropical oil’s production outlook amid labor constraints.

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

The player sheet for 6/15 had funds: net sellers of 8,000 contracts of  SRW wheat, sellers of 4,000 corn, sellers of 8,000 soybeans, sellers of 2,000 soymeal, and  sellers of 3,500 soyoil.

Preliminary changes in futures Open Interest as of June 15 were: SRW Wheat up 506 contracts, HRW Wheat down 3,316, Corn down 23,516, Soybeans down 750, Soymeal down 3,890, Soyoil up 717.

There were no changes in registrations. Registration total: 20 SRW Wheat contracts; 16 Oats; 0 Corn; 13 Soybeans; 868 Soyoil; 442 Soymeal; 1,249 HRW Wheat.

TENDERS

• WHEAT TENDER CANCELED: Egypt’s state grains buyer, the General Authority for Supply Commodities, on Tuesday said it was canceling an international wheat purchasing tender that had been seeking the grain for shipment over Aug. 21-31. GASC did not provide a reason for the cancellation, but traders said high freight rates may have been a factor.
• FEED WHEAT SALE: South Korea’s Major Feedmill Group (MFG) has purchased about 65,000 tonnes of animal feed wheat which can be sourced from optional origins in a tender which closed on Tuesday.
• WHEAT TENDER: Japan’s Ministry of Agriculture sought 207,472 tonnes of food-quality wheat from the United States, Canada and Australia in a regular tender.
• WHEAT TENDER: Importers in the Philippines are tendering to purchase a total of around 205,000 tonnes of milling wheat and animal feed wheat.
• FAILED WHEAT BRAN TENDER: Jordan’s state grains buyer has canceled an international tender to purchase 20,000 tonnes of wheat bran which closed on Tuesday.
• CORN PURCHASE: The Korea Feed Association (KFA) purchased an estimated 60,000 tonnes of corn expected to be sourced from South America in a private deal on Tuesday without an international tender being issued.

 PENDING TENDERS

• WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of milling wheat.
• FEED WHEAT AND BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said it will seek 80,000 tonnes of feed wheat and 100,000 tonnes of feed barley to be loaded by Sept. 30 and arrive in Japan by Nov. 25, via a simultaneous buy and sell (SBS) auction that will be held on June 16.
• WHEAT TENDER: Jordan’s state grain buyer issued international tenders to buy a total 120,000 tonnes of milling wheat which can be sourced from optional origins
• WHEAT TENDER: Iranian state agency the Government Trading Corporation (GTC) has issued an international tender to purchase about 60,000 tonnes of milling wheat

 NOPA May soybean crush below most estimates at 163.521 million bushels

The U.S. soybean crush in May fell short of market expectations for a fourth straight month, rebounding only slightly from a sluggish April pace blamed largely on processing plant downtime, according to National Oilseed Processors Association (NOPA) data released on Tuesday.

NOPA members, which handle about 95 percent of all soybeans processed in the United States, crushed just 163.521 million bushels of soybeans last month, up from 160.310 million bushels in April and 169.584 million bushels in May 2020.

The May crush had been expected to rise to 165.120 million bushels, according to the average of estimates from eight analysts. Estimates ranged from 160.000 million to 170.380 million bushels, with a median of 165.650 million bushels.

Last month’s crush was only the third largest May crush on record, behind both 2018 and 2020, despite recently expanded processing capacity in the United States.

Some soy processors have been scheduling seasonal maintenance downtime amid tight stocks of the oilseed and the highest soybean prices in about eight years.

NOPA said soyoil supplies among its members as of May 31 declined to 1.671 billion lbs, from 1.702 billion lbs at the end of April and below the 1.880 billion lbs in storage at the end of May 2020.

Oil stocks were also below the consensus trade forecast of 1.713 billion lbs, based on estimates gathered from six analysts. Estimates ranged from 1.630 billion to 1.830 billion lbs, with a median of 1.714 billion.

Soymeal exports last month rose to 714,377 tons, up from a 22-month low of 689,441 tons in April but below the 776,677 tons exported in May 2020, according to NOPA data.

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

Output and stockpile projections for the week ending June 11 are based on seven analyst estimates compiled by Bloomberg.

• Production seen lower than last week at 1.063m b/d
• Stockpile avg est. 20.149m bbl vs 19.96m a week ago

China’s Sinograin to Sell 37,126 Tons of Ukraine Corn This Week

The state stockpiler will offer the corn imported from Ukraine at auction on Friday, the company said in a statement Tuesday. Corn from 2020 harvest stored in Dongguan city, Guangdong province

China’s Li Vows to Prevent Excessive Drop in Local Corn Prices

• Farmers suffer from increasing fertilizer costs and land rents
• Country is importing record quantities of corn to cool prices

China’s premier pledged to farmers that the government will act to prevent excessive falls in local corn prices in order to protect grower incomes and ensure they can manage rising costs of fertilizer and land rent.

“The government will regulate prices and not let them drop so much that farmers are unwilling or unable to plant the grain,” Li Keqiang told a group of corn growers in Jilin province, one of the top producing regions. Li said his administration is paying close attention to concerns among farmers about increasing input costs at a time when corn prices are coming off their highs.

Biden Weighs Small Cut to Biofuel Targets in Nod to Refiners

• Renewable fuel targets divide two key Biden constituencies
• Refining advocates and labor unions want lower requirements

The Biden administration is developing targets for biofuel that are likely to be relatively flat or even lower as it seeks to balance the interests of blue-collar refining workers and advance a clean-energy agenda.

The Environmental Protection Agency is set to propose renewable fuel requirements within weeks, according to several people familiar with the strategy who asked not to be named before a formal announcement. The targets will dictate how much corn-based ethanol, biodiesel and other renewable fuels oil refiners must blend into their products in 2021 and 2022. The proposal is on track to be issued after the Supreme Court makes what could be a pivotal ruling on the EPA’s ability to exempt refineries from the mandates.

Oil refiners meet the government’s biofuel quotas either through blending renewable fuels themselves, or by purchasing credits from others that have. Prices for some of those credits have hit all-time highs this year on expectations the Biden administration would impose more ambitious quotas and stop exempting refineries from them. Corn and soybean prices have also climbed on expectations of more demand from biofuel makers.

Instead, the EPA is considering more modest targets under the Renewable Fuel Standard program, according to three people familiar with the matter who asked not to be identified describing internal deliberations. The agency is also moving to abandon a plan for incorporating waived quotas that had been adopted under former President Donald Trump.

Manitoba Gets Crop-Saving Rain; Needs More to Sustain Growth

Rainfall brought reprieve to many crops in the Canadian Prairie province, but more is needed in the next two weeks, the Manitoba government said in a weekly report Tuesday.

• Drought has negatively affected tillering and yields of winter cereals, as well as spring wheat in some cases
  • Stress from drought causing some crops to mature into reproductive stages faster than expected
• Widespread use of foliar insectide due to severe flea beetle pressure
  • Reseeding continues where crops were damaged by flea beetle

Russian Wheat Exports Rose 8% So Far This Season: Agency

Wheat shipments for the current season totaled 37.3m tons as of June 10, the Federal Center of Quality & Safety Assurance for Grain & Grain Products said on its website, citing inspections before exports.

• NOTE: That means wheat exports totaled about 500,000 tons in week to June 10, compared with 300,000 tons a week before
• Exports of all grains are at 47.8m tons so far this season; no comparative data was given for the year-earlier period
• NOTE: Data are preliminary and include exports to the Eurasian Economic Union, a customs union of countries that includes Russia

Russia Expects Wheat Crop of More Than 81m Tons in 2021: TASS

Total grain crop is seen at 127 million tons this year, including over 81 million tons of wheat, Deputy Prime Minister Viktoria Abramchenkosays in interview with TASS.

• Wheat exports from Russia in the 2020-2021 agricultural year will amount to 37 million tons, she says
  • In total, 48 million tons of grain can be exported abroad this season, she says

Ukraine sunoil exports at 4.42 mln T so far in 2020/21, say producers

Ukraine’s sunflower oil exports totalled 4.421 million tonnes in the first eight months of the 2020/21 season, amounting to 82.1% of the season’s export quota, the sunoil producers’ association said on Tuesday.

It said sunoil exports in May totalled 502,000 tonnes and Ukraine exported its sunoil mostly to India, China and the European Union.

The Ukrainian government and sunflower oil producers in April agreed to limit 2020/21 sunoil exports to 5.38 million tonnes, aiming to avoid a jump in domestic prices because of excessive shipments overseas.

Wholestone Farms Plans $500M Pork Plant in South Dakota: Report

Wholestone Farms, made up of about 200 hog farms, plans to build a pork-processing facility in Sioux Falls, South Dakota, according to a report.

• Wholestone has exercised an option to purchase land to build the plant that would open in 2025 and initially employ more than 1,100 people, according to June 14 report in Sioux Falls.
• Wholestone didn’t immediately reply to an email regarding its plans
• U.S. livestock farmers have pushed for additional meat plants to make the industry more resilient in the wake of the Covid-19 outbreak that shut plants when workers caught the virus

Australia’s Farm Exports Set To Climb Amid Strong Global Demand

• Increased value of shipments driven by beef, wool and dairy
• Livestock and oilseed prices seen staying historically high

Australian farm exports are poised to ramp up by 6% in 2021-22, driven by increases in beef, wool and dairy shipments, and a sharp recovery in cotton, according to government forecaster Abares.

The upcoming season is expected to see agricultural exports hit A$49.7 billion ($38.3 billion) — the first year-on-year expansion since 2017–18, the Australian Bureau of Agricultural and Resource Economics and Sciences said in its June commodities outlook. Shipments are seen shrinking 3% in 2020-21.

China Urges Reasonable Hog Production After Pork Price Decline

China’s economic planning agency urges hog producers to keep “reasonable” hog production after recent pork price decline, according to a statement on NDRC website.

• NDRC says it will closely monitor hog production and prices changes, and use reserves in time to stabilize prices
• The advice is based on a newly adopted early warning system to ensure stable pork supply and stable prices
• Pork wholesale prices fell to lowest level since July 2019.

China’s pig herd up 23.5% in May vs year ago – state media

China’s pig herd rose 23.5% in May from a year earlier, state media said on Wednesday citing the Ministry of Agriculture and Rural Affairs.

The sow herd increased 19.3% during the same period, according to the CCTV report, reaching 98.4% of the stocks at the end of 2017.

China’s huge hog herd, which produces about half of the pork consumed globally, plunged 40% in 2019, official data shows, after the deadly African swine fever virus swept through its farms. The industry has poured billions of yuan into new, intensive farms over the last year to rebuild the herd.

High Shipping Costs Are Hitting the Wheat Trade Next

• Top importer Egypt canceled a wheat tender on Tuesday
• Prices to ship goods around the world have skyrocketed

The surging shipping costs roiling global supply chains have extended to the wheat trade.

When top importer Egypt canceled its latest wheat tender on Tuesday, the decision was in part due to expensive freight costs, according to a person familiar with the matter who asked not to be identified because the information was private. The state buyer didn’t announce an official reason for pulling the purchase.

Skyrocketing prices for shipping goods around the world are affecting everything from cargoes of coffee to car parts this year. That could exacerbate food inflation, particularly for import-dependent countries. Egyptian urban prices in May accelerated at their fastest pace in five months, driven by food and beverage prices.

Egypt has only canceled a handful of tenders in recent seasons, although this is the third time it’s happened this year. The nation imports vast amounts of grain to subsidize bread for its citizens, but typically keeps enough stockpiled wheat to last several months and also buys from local farmers at this time of year.

Argentina says deal on re-opening beef exports may be close, talks continue

Talks between Argentine policymakers and meat industry officials are on track to reach a deal on re-opening exports, officials said on Tuesday, days ahead of the expiration of the government’s month-long suspension of international shipments. Argentina, China’s second-biggest beef supplier after Brazil, halted exports for a month in mid-May as it grappled with runaway domestic inflation. Meat packers have since been negotiating a way to lift the curbs amid fears they could be extended.

USDA grants biofuel producers $700 mln in COVID-19 aid

The U.S. Department of Agriculture (USDA) will give $700 million in aid to biofuels producers as part of a package to assist industries recovering from the financial devastation of the coronavirus pandemic, officials said on Tuesday.

Biofuel groups had been advocating for relief after the pandemic slashed fuel demand and sank consumption of biofuels like ethanol. The USDA said it plans to implement the aid in the next 60 days.

“USDA is honoring its commitment to get financial assistance to producers and critical agricultural businesses, especially those left out or underserved by previous COVID aid,” said Agriculture Secretary Tom Vilsack in a statement.

U.S. agriculture chief backs proposed meatpacking investigator

U.S. Agriculture Secretary Tom Vilsack on Tuesday threw his support behind a proposal to establish a special investigator to address concerns about anti-competitive practices in the meat and poultry industries.

Republican U.S. Senators Mike Rounds of South Dakota and Charles Grassley of Iowa and Democratic Senator Jon Tester of Montana have proposed legislation to create an office for a special investigator within the U.S. Department of Agriculture.

U.S. lawmakers and the USDA are seeking to address concentration in the beef processing industry in the aftermath of a ransomware attack against meatpacker JBS SA JBSS3.SA that disrupted U.S. meat production and disruptions caused by the COVID-19 pandemic.

The proposed office would have a team of investigators, with subpoena power, dedicated to preventing and addressing anticompetitive practices and enforcing antitrust laws in meatpacking, according to a statement from the senators.

Australia’s Pandemic-Hit Farms to Reach Out to Asia for Labor

• Three-year work visas to be offered to Asean nation citizens
• Lack of backpackers has threatened agricultural production

Australia is looking to recruit Southeast Asian farm workers as the pandemic and a new free-trade deal with the U.K. exacerbates labor shortages in the nation’s A$66 billion ($51 billion)-a-year agriculture industry.

The government aims to offer three-year working visas by the end of the year to citizens from the 10 Asean countries, which include Indonesia, Malaysia, Thailand and the Philippines, Agriculture Minister David Littleproud told reporters in Canberra on Wednesday. Australia already has a similar arrangement in place with Pacific Island nations.

With Australians reluctant to pick up what is often considered to be strenuous manual labor, reliance on foreigners has long been a crux to an industry that has seen a shrinking and aging local workforce.

Poultry Prices Soar to Record Amid U.S. Chicken-Sandwich Wars

Chicken-sandwich fever means poultry is pacing U.S. food inflation in the meat case.

U.S. producer prices for processed poultry jumped to an all-time high in May, climbing 2.1% in the eighth straight monthly increase, U.S. government data showed Tuesday. Gains in poultry outpaced the 0.8% increase in the broader producer price index.

The surge comes after several large fast-food restaurant chains recently launched fried-chicken sandwiches in a bid to match Popeyes’ 2019 viral success. Sales have also surged with consumers preparing more meals at home during the pandemic. Meanwhile, poultry producers have struggled to keep up with the growing demand, with labor shortages at meat plants and severe winter storms that killed thousands of birds constricting chicken supplies.

McDonald’s Corp., KFC and Burger King have all recently introduced new chicken sandwiches. At U.S. restaurants, orders for chicken entrees were up 4% for the year ending in April 2021, according to market researcher NPD Group. Beef orders were down 14% and pork was down 18%.

While chicken prices are at all-time highs, prices for beef are still below the peaks set during the 2020 Covid-19 outbreak that shuttered American meat plants, and pork values are below records from 2014 that came during a swine-disease outbreak.

Kim Says North Korea’s Food Situation Is ‘Getting Tense’ (1)

• Food shortages made worse by typhoons last year and pandemic
• Fitch Solutions says its economy will barely grow in 2021

North Korean leader Kim Jong Un said the country’s food situation is “getting tense” due to typhoons last year that wiped out crops, comments that underscored farm-sector shortfalls made worse by his decision to close borders to prevent Covid.

Kim told a plenary meeting of the Central Committee of his ruling Workers’ Party of Korea “the agricultural sector failed to fulfill its grain production plan,” and now is “high time to give full play to the indomitable revolutionary spirit and the fighting traits of self-reliance and fortitude,” the state’s official Korean Central News Agency reported Wednesday.