TODAY – EXPORT INSPECTIONS, CROP PROGRESS
Wheat prices overnight are down 1/4 in SRW, up 1/2 in HRW, up 4 1/4 in HRS; Corn is down 2; Soybeans up 1; Soymeal up $0.22; Soyoil down 0.75.
Markets finished last week with wheat prices up 22 3/4 in SRW, up 20 1/4 in HRW, up 26 1/4 in HRS; Corn is up 3; Soybeans up 23 1/4; Soymeal up $0.14; Soyoil up 2.25.
For the month to date wheat prices are up 1 1/4 in SRW, up 8 1/4 in HRW, up 16 3/4 in HRS; Corn is down 9 1/2; Soybeans down 6 1/2; Soymeal down $4.40; Soyoil down 1.63.
Chinese Ag futures (JAN 22) Soybeans down 46 yuan ; Soymeal down 11; Soyoil up 24; Palm oil up 16; Corn down 7 — Malasyian Palm is down 46. Malaysian palm oil prices overnight were down 46 ringgit (-1.04%) at 4395.
Brazil Grains & Oilseeds Forecast: Rio Grande do Sul and Parana Forecast: Isolated showers north Friday. Mostly dry Saturday-Monday. Scattered showers Tuesday. Temperatures near normal Friday, near to above normal Saturday-Sunday, above normal Monday-Tuesday. Mato Grosso, MGDS and southern Goias Forecast: Isolated showers in Mato Grosso Friday. Scattered showers north Saturday-Tuesday. Temperatures near to above normal Friday, near to below normal north and near to above normal south Saturday-Tuesday.
Midwest corn, soybean and winter wheat forecasts: West: Isolated showers Friday. Mostly dry Saturday-Tuesday. Temperatures near normal Friday-Saturday, above normal Sunday, above to well above normal Monday-Tuesday. East: Scattered showers Friday night-Saturday. Isolated showers north Sunday. Mostly dry Monday-Tuesday. Temperatures near normal Friday-Saturday, near to above normal Sunday, above normal Monday-Tuesday. 6 to 10 day outlook: Mostly dry Wednesday. Isolated showers west Thursday-Sunday. Temperatures above to well above normal Wednesday-Sunday.
The player sheet for Sept. 24 had funds: net buyers of 4,000 contracts of SRW wheat, sellers of 1,000 corn, buyers of 1,000 soybeans, sellers of 1,000 soymeal, and buyers of 3,500 soyoil.
There were no changes in registrations. Registration total: 1,180 SRW Wheat contracts; 2 Oats; 17 Corn; 1 Soybeans; 365 Soyoil; 1 Soymeal; 1,275 HRW Wheat.
Preliminary changes in futures Open Interest as of September 24 were: SRW Wheat down 4,176 contracts, HRW Wheat up 715, Corn up 1,295, Soybeans up 8,669, Soymeal down 2,633, Soyoil down 2,512.
TENDERS
- WHEAT PURCHASE: Japan’s Ministry of Agriculture bought 113,067 tonnes of food-quality wheat from the United States and Canada in a regular tender.
- CORN PURCHASE: The Korea Feed Association (KFA) in South Korea purchased about 60,000 tonnes of animal feed corn in a private deal on Friday after earlier making no purchase in an international tender for 138,000 tonnes
- CORN TENDER: Taiwan’s MFIG purchasing group issued an international tender to buy up to 65,000 tonnes of animal feed corn which can be sourced from the United States, Brazil, Argentina or South Africa
PENDING TENDERS
- 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: A government agency in Pakistan issued an international tender to purchase and import 640,000 tonnes of wheat
- WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy 120,000 tonnes of milling wheat which can be sourced from optional origins
- WHEAT TENDER: The UN’s Office for Project Services has issued a tender seeking 200k tons of milling wheat on behalf of Ethiopia’s government, according to a notice on its website.
CROP SURVEY: U.S. Sept. 1 Grain Stocks and Wheat Production
U.S. corn stocks seen at 1.15b bu as of Sept. 1, a decline of 766m from last year’s level at this time, according to the avg est. of as many as 23 analysts surveyed by Bloomberg.
- Soybean stocks seen at 174m bu, down 351m from Sept. 2020
- Wheat stocks seen at 1.86b bu, 303m below last year
- 2021 Wheat production seen down 15m bu from the USDA’s August est. to 1.68b bu
- Biggest decline seen in spring wheat, down 12m bu to 331m bu
Indonesia Palm Oil Output Growth to Slow on Lack of New Planting
Crude palm oil output in Indonesia, the world’s biggest grower, is likely to rise to 47.458m tons in 2021 from 47.03m tons a year earlier, said Togar Sitanggang, vice chairman of the Indonesian Palm Oil Association, also known as Gapki.
- “Indonesia’s production growth will not be as strong as previous years due to the lack of new planting area,” Sitanggang said at the annual Globoil conference on Friday
- We are now witnessing the impact of a mild El Nino that took place in 2019
- Weather conditions, such as El Nino or La Nina, tend to have an impact on oil palm trees 12 to 24 months after the events
- Covid-19 is not, by far, hurting production or hampering operations
- Crude palm kernel oil production in 2021 seen unchanged at 4.549m tons
- Domestic palm oil use in food seen climbing to 9.486m tons from 8.428 million tons in 2020
- Consumption in the oleochemicals sector seen at 2.12m tons vs 1.695m tons
- Palm oil’s use to make biodiesel may fall to 7.03m tons vs 7.23m tons
- Crude palm oil exports estimated at 2.781m ton vs 7.171m tons
- Refined palm oil exports may climb to 25.09m tons from 21.12m tons
- Closing stockpiles of palm oil seen rising to 4.966m tons in 2021 from 4.867m tons
Palm Oil May Touch 4,400 Ringgit on Tight Supplies, Mistry Says
- Futures seen supported by Indonesia’s move to raise export tax
- Palm oil production in Malaysia may recover only after Ramadan
Palm oil futures will stay strong at least until March on an increase in export levies by top grower Indonesia, with supplies seen tight during the first two months of 2022, according to veteran trader Dorab Mistry.
The most-used vegetable oil is expected to trade between 4,000 ringgit ($955) to 4,400 ringgit per ton during the October-February period, before slightly dropping in March, Mistry, director at Godrej International Ltd., said at the Globoil conference on Saturday. Futures have averaged 3,908 ringgit so far this year, according to data compiled by Bloomberg.
Higher benchmark prices may potentially curb purchases by top importer India in the coming months as the festive-season buying by the South Asian nation will almost be over by next month. Malaysian stockpiles may swell further going forward, after surging 25% in August from a month earlier.
Palm oil prices will be underpinned by Indonesia’s biofuel mandate and higher export taxes, Mistry said. Indonesia last month raised its palm oil export duty for September to $166 a ton from $93 a month earlier following a rally in the tropical oil. Any move by Indonesia to increase its export tax generally boosts demand for Malaysian palm oil and supports futures in Kuala Lumpur.
Mistry said benchmark prices may slide to 3,200 ringgit-3,800 ringgit during April to September on expectations of favorable weather conditions for oil palm trees. The commodity has jumped more than 23% this quarter mainly on supply concerns and a rally in soybean oil, palm’s closest food and fuel substitute.
Global Vegetable Oil Output Seen Rising, Boosting Stockpiles
Vegetable oil production is set to climb in 2021-2022 on expectations conducive weather will boost soybean crops in the U.S. and South America and oil palm trees in Asia, according to Thomas Mielke, executive director of Hamburg-based Oil World.
Output in the 12 months starting October may increase to 249.4 million tons, from 240.5 million tons a year earlier, Mielke said at the Globoil conference on Saturday. That’s compared with demand of about 247.66 million tons in 2021-22, from 240.9 million tons in the previous period, he said.
Global edible oil prices have rallied this year due to a supply crunch and rising biofuel use. The outlook for higher vegetable oil supplies is good news for India, the world’s biggest buyer of soybean, palm and sunflower oils. The South Asian nation recently cut duties on overseas purchases to cushion consumers from high rates.
Vegetable oil stockpiles at the end of the 2021-22 period may total 32.21 million tons, compared with 30.87 million tons a year earlier, Mielke said. “We expect stocks to recover and veg oil prices to decline,” he said.
CPO FUTURES EXPECTED TO TREND LOWER ON PROFIT-TAKING NEXT WEEK
The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is expected to trend lower next week on profit-taking activities, said Interband Group of Companies senior palm oil trader Jim Teh.
He said the increasing stockpiles in producing countries Indonesia and Malaysia were expected to weigh on market sentiment.
“There will be a lot of palm oil demand for Christmas, mainly from Europe. The price is considerably very high. With the production cost being around RM1,500 to RM1,800 per tonne, the current CPO price is seen as paper price and speculative play; therefore, it is already an excellent price for the commodity,” he told Bernama.
As such, the price movement next week is expected to hover between RM4,200 and RM4,300 per tonne, he said.
SOYBEAN/CEPEA: Low moisture hampers sowing of the new crop in BR; prices drop
Rainfall has been irregular and below the expected in the soybean-producing regions in Brazil, and this scenario is not forecast to change until October. Thus, Brazilian farmers have slowed down the sowing pace for the new crop, majorly in Mato Grosso and Paraná States – activities began in several states last week. Meanwhile, uncertainties related to China and a Chinese property developer pressed down soybean values in Brazil, despite the valuations of soybean by-products. With the recent price drops, Brazilian farmers left the market, and the gap between asking and bidding prices widened.
CROPS – Cptec forecasts a 70% chance of rains in several Brazilian regions next week, but still heterogeneously. Weather issues for two consecutive years now have been concerning agents, since second crops may be damaged again, majorly corn crops.
Also, there is a chance that the La Niña phenomena returns to Brazil, which would lower rainfall and raise temperatures in central-western, southeastern and southern Brazil and increase rains in the northern and northeastern regions of the country. If this scenario is confirmed, soybean crops in the 2021/22 season may be damaged, since there would be a water deficit between December and January, beans-filling stage.
In Paraná, 3% of the soybean area had been sown until early this week, according to Deral/Seab. In Mato Grosso, agents reported that activities were interrupted in many regions, since farmers are waiting for rains in order to continue sowing. According to Imea, 0.28% of soybean crops had been sown until Sept. 17, 0.05% up from the average in the last five years.
In Goiás and in Minas Gerais, the host-free period ends today, but the current drought is not encouraging agents to begin sowing. In São Paulo and in Mato Grosso do Sul, activities have not begun either, since farmers are waiting for rains.
CORN/CEPEA: Index drops and returns to real level from Feb/21
Although a decrease in corn supply has been confirmed in Brazil, due to bad weather conditions, and inventories are low, corn prices are still dropping in many Brazilian regions surveyed by Cepea.
Pressure comes largely from disinterested purchasers, but also from the progress of the second crop harvesting, lower exports and sowing of the 2021/22 summer crop. In this scenario, many purchasers are buying batches sporadically, while sellers have been more flexible regarding asking prices, majorly those who need cash flow to pay debts.
CROPS – Favored by rains and higher soil moisture, corn harvesting advanced in southern Brazil in the last days. In the central-western region of the country, activities advanced too.
In Paraná, there are only 2% of the area to be harvested, according to Seab/Deral. In Mato Grosso do Sul, 98.8% of the area had been harvested until Sept. 17, according to Famasul. Thus, if the weather continues favorable, activities may end soon. In São Paulo and in Minas Gerais, until Sept. 18, the harvesting had reached 95% and 93% of the respective areas, according to Conab (Brazil’s National Company for Food Supply).
As regards the 2021/22 season, sowing is in progress in Paraná, however, in some areas in Rio Grande do Sul, activities were interrupted by rains. In PR, 45% of the area had been sown until Sept. 20, according to Seab/Deral, and all crops are in good conditions (98%). This week, Seab has reported that the summer crop of corn may total 4.113 million tons, 32% higher than that in the 2020/21 season.
In Rio Grande do Sul, according to Emater/RS, rains and high soil moisture hampered corn sowing this week, however, precipitation favored the development of the crops already sown.
In Santa Catarina, activities have begun, and agents are optimistic. According to Epagri/Cepa, if the weather continues favorable, the corn output may reach 2.7 million tons in the state, 51.2% higher than that in the previous season.
Russian Wheat Exports Fall 9% So Far This Season: Agency
Wheat shipments for the 2021-22 season totaled 11.1m tons as of Sept. 23, the Federal Center of Quality and Safety Assurance for Grain and Grain Products said on its website, citing inspections before exports.
- That means wheat exports totaled about 1m tons in the week to Sept. 23, compared with about 1.2m tons a week earlier
- Exports of all grains are at 12.9m tons so far this season
- NOTE: Data are preliminary and include exports to the Eurasian Economic Union, which is a customs union of countries that includes Russia
Malaysia’s Sept. 1-25 Palm Oil Exports 1,283,449 Tons: Amspec
Shipments rose 29.8% m/m from 988,809 tons exported during Aug. 1-25, according to AmSpec Agri on Saturday.
Pakistan Seen Importing More Oilseeds This Year: Westbury
Imports of oilseeds, such as soybeans and rapeseed, in 2021 are expected to exceed last year’s total of 2.93m tons, according to Rasheed Janmohammed, director of Westbury Group.
- Pakistan has already imported 2.17m tons of soybeans and 555,039 tons of rapeseed in the 8 months ended Aug. 31, he said at the annual Globoil conference on Friday
- Importers have booked about 450,000 tons of soybeans and 350,000 tons of rapeseed to be shipped between September and December
- Buyers have also contracted about 725,000 tons of soybeans that will arrive in Pakistan between January and June
Russian wheat up for 11th week, taking lead from global benchmarks
Russian wheat export prices rose for an 11th consecutive week, following higher global benchmarks in Chicago and Paris, analysts said on Monday.
- Russian wheat with 12.5% protein loading from Black Sea ports for supply in the first half of October was $304 a tonne, free on board (FOB), at the end of last week, up $3 from the previous week, consultancy IKAR said in a note. 0#IKAR
- Sovecon, another consultancy, pegged wheat steady at $304.5 a tonne, while barley rose by $0.5 to $260.5 a tonne.
- Russian wheat exports are down 22% since the start of this season on July 1 due to a smaller crop and a higher export tax.
U.S. Soybean Meal Export Hub Damage May Take Months to Fix
- Crane at Ag Processing West Coast facility collapsed Sept. 1
- Damage hits on heels of trade disruptions in Gulf of Mexico
Shipments from a U.S. West Coast terminal that handles almost 20% of the nation’s soybean meal exports have been curbed while damage from a crane collapse earlier this month is repaired, marking the latest setback to global trade flows.
A loading boom at farm cooperative Ag Processing Inc.’s export facility in Aberdeen, Washington, fell Sept. 1 as a bulk carrier was being loaded, according to a person familiar with the matter and a shipping agent notice to customers seen by Bloomberg. The damage could take months to repair, according to the notice.
The disruption puts yet another kink in global supply chains with the U.S. still reeling from the export chaos caused by Hurricane Ida in the Gulf of Mexico, home of America’s busiest agricultural port. The terminal in Grays Harbor handles the bulk of America’s soy meal shipped to Asia from the West Coast.
Brazil Chicken, Pork Consumption Rises 6% on Pricier Beef: Group
Domestic demand for poultry and pork meat has risen this year through August as consumers replaced beef in their meals after price surge, Ricardo Santin, head of meat exporter group ABPA, says in an interview.
- Growth rate this year already surpasses the 5.5% increase in 2020
- Consumption growth may reach 7% for full year as Brazil’s economy rebounds following vaccination gains, while year-end celebrations may give an additional boost on demand, he said
- Higher production costs due to corn hike haven’t been fully passed through to consumers yet, neither for the domestic market or exports
- Santin sees higher domestic consumption competing with meat for export, which probably will improve margins
- Export demand also seen increasing following production disruptions at other competitors
Indonesia to Keep Palm Oil Export Tax at $166/Ton in Oct.: Govt
Govt will also keep the additional levy unchanged at $175/ton, Musdhalifah Mahmud, deputy for food and agriculture at the Coordinating Ministry for Economic Affairs, says in text messages.
- The reference price for CPO will be set at $1,196.6/ton in Oct.
India Cumulative Monsoon Rainfall 2% Below Normal as of Sept. 26
India has so far received 843.8 millimeters of rains during the current monsoon season, which runs from June through September, compared with a normal of 864.9 millimeters, according to data published by the India Meteorological Department on Sept. 26.
- Rainfall in the southern peninsular region was at 9% above normal
- The eastern and northeastern region got 12% below normal rains
U.S. Cattle on Feed Fell to 11.23M Head on Sept. 1
The feedlot herd fell 1.4% from a year ago, according to the USDA’s monthly report. Analysts were expecting a drop of 1.8%
- Placements onto feedlots up 2.3% to 2.104m head
- Cattle marketed from feedlots declined 0.4% to 1.885m head
U.S. Beef Production Falls 2% This Week, Pork Rises: USDA
U.S. federally inspected beef production falls to 528m pounds for the week ending Sept. 25 from 540m in the previous week, according to USDA estimates published on the agency’s website.
- Cattle slaughter down 2.4% from a week ago to 641m head
- Pork production up 1.9% from a week ago, hog slaughter rises 1.6%
- For the year, beef production is 3.2% above last year’s level at this time, while pork is 1.8% below
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