Information produced by ADM Investor Services, Inc. and distributed by Stewart-Peterson Inc.
Wheat prices overnight are up 1/4 in SRW, up 3/4 in HRW, down 2 1/4 in HRS; Corn is down 4 1/2; Soybeans down 8 3/4; Soymeal down $0.52; Soyoil up 0.18.
Markets finished last week with wheat prices up 1 3/4 in SRW, down 2 in HRW, down 1 1/4 in HRS; Corn is down 9 1/2; Soybeans down 8 1/2; Soymeal up $0.44; Soyoil down 2.04.
For the month to date wheat prices are down 4 1/4 in SRW, down 5 in HRW, down 3 in HRS; Corn is down 6 3/4; Soybeans down 14 3/4; Soymeal up $7.10; Soyoil down 2.93.
Year-To-Date nearby futures are down 4.8% in SRW, down 1.8% in HRW, down 2.0% in HRS; Corn is down 0.6%; Soybeans up 0.5%; Soymeal up 3.1%; Soyoil down 7.3%.
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Chinese Ag futures (MAR 23) Soybeans down 17 yuan; Soymeal up 48; Soyoil up 42; Palm oil up 132; Corn down 25 — Malaysian palm oil prices overnight were up 100 ringgit (+2.67%) at 3851.
There were changes in registrations (-5 SRW Wheat). Registration total: 2,723 SRW Wheat contracts; 0 Oats; 0 Corn; 797 Soybeans; 479 Soyoil; 37 Soymeal; 192 HRW Wheat.
Preliminary changes in futures Open Interest as of February 3 were: SRW Wheat down 4,254 contracts, HRW Wheat down 1,183, Corn down 173, Soybeans up 130, Soymeal up 6,400, Soyoil up 14,821.
Brazil Grains & Oilseeds Forecast: Scattered showers have returned to central and northern areas, where breaks in the heavy showers have closed for the week. Soybean harvest and safrinha corn planting remain behind schedule. If the delays are to great this week and continue through next week as well, corn may have to deal with a shortened wet season and runs the risk of running into its pollination stages as the wet season rains shut down — unfavorable weather conditions for corn production. Southern areas continue to have issues with pronounced dryness, which continues this week as well.
Argentina Grains & Oilseeds Forecast: The country is in the midst of a dry stretch that lasts this week before showers move through again this weekend with a cold front. Some spotty showers may occur in a couple of spots this week, though rising temperatures will negate any precipitation that falls until the weekend. The showers that come with the front are unlikely to have a significantly positive impact on soil moisture, though another front that follows it next week could be more substantial. Crops have had a boost in crop conditions the last couple of weeks, but the heat and dryness this week should have negative effects again.
Northern Plains Forecast: Above-normal temperatures returned to the region over the weekend and should stay in the region over the next week or so, reducing stress and feed requirements for livestock. Temperatures will be on a cooling trend again next week.
Central/Southern Plains Forecast: A front will move across the region on Monday with some limited showers. A low-pressure center will form along the front across the southeast on Tuesday and Wednesday where showers will be more significant. Some cooler air will move in behind this system to close out the week, but nothing significantly cold that would produce too much stress for livestock. Warmer air will quickly replace the cold again this weekend.
Midwest Forecast: Cold temperatures were quickly replaced by warm air this past weekend. Though a front and system will pass through this week with scattered showers, temperatures behind this system will still be mild for this time of year, which continues into next week.
The player sheet for Feb. 3 had funds: net sellers of 2,000 contracts of SRW wheat, buyers of 1,000 corn, sellers of 2,000 soybeans, buyers of 3,000 soymeal, and sellers of 6,000 soyoil.
- CORN SALE: The Korea Feed Association (KFA) purchased an estimated 126,000 tonnes of animal feed corn in an international tender on Friday.
- SOYBEAN SALE: The U.S. Department of Agriculture confirmed private sales of 132,000 tonnes of U.S. soybeans for shipment to unknown destinations in the 2023/24 marketing year.
- WHEAT TENDER: The Taiwan Flour Millers’ Association has issued an international tender to purchase 48,100 tonnes of grade 1 milling wheat to be sourced from the United States.
- SOYBEAN TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued international tenders to purchase around 19,000 tonnes of food-quality soybeans free of genetically-modified organisms (GMOs)
- WHEAT TENDER: Jordan’s state grain buyer has issued an international tender to buy up to 120,000 tonnes of milling wheat which can be sourced from optional origins.
- RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp has issued an international tender to purchase an estimated 79,439 tonnes of rice.
- Basis bids for soybeans shipped by barge to the U.S. Gulf Coast were mostly steady to weak on Friday on seasonally slowing demand, while CIF corn basis bids were largely unchanged, traders said.
- Barge freight rates were narrowly mixed as improved near-term river shipping conditions anchored spot values while some deferred rates were underpinned by expected tight supplies of empty vessels. BG/US
- Barge lines were able to increase vessel drafts at St. Louis and further upriver as water levels there rose late this week, traders said. Reduced barge drafts in recent days had limited the amount of grain that shippers can load.
- Soybean export demand is slowing seasonally as newly harvested Brazilian beans are beginning to flood the market.
- Wheat basis values at the Gulf were mostly flat on dull demand as rival exporters continue to offer shipments at lower prices.
- Bids for CIF soybean barges loaded in February were a penny lower at 102 cents over March futures.
- FOB basis offers for February soybean shipments fell 5 cents to around 120 cents over March futures.
- CIF corn barges loaded in February were bid unchanged at 85 cents over March corn.
- FOB offers for February corn shipments held at around 90 cents over March.
- Spot basis bids for soybeans rose at processors and river terminals in the eastern half of the U.S. Midwest on Friday.
- The soy basis was unchanged at eastern elevators, and at processors, river terminals and elevators west of the Mississippi River.
- Cash bids for corn were unchanged around most of the region, but fell by 1 cent a bushel at an elevator in Council Bluffs, Iowa.
- Farmer sales of both commodities were slow, grain dealers said.
- Spot basis bids for U.S. soybeans were flat at interior processors and elevators on Friday morning, grain dealers said.
- Along rivers, the soybean basis was steady to firm, rising by 6 cents a bushel in Seneca, Illinois.
- Cash bids for corn were steady to weak at interior elevators, and unchanged at processors, ethanol plants and river terminals.
- Farmer sales of both commodities were slow, an Iowa dealer said.
- Spot basis bids for hard red winter wheat were unchanged at rail and truck market elevators across the southern U.S. Plains on Friday, grain dealers said.
- Farmers were showing little interest in making deals for either old-crop or new-crop supplies.
- U.S. spot cash millfeed values were mostly flat on Friday and lower in the week as sluggish demand and adequate supplies in most markets around the country weighed on prices, dealers said.
- Increased flour mill run times in most markets following curtailed schedules earlier in the year have boosted millfeed output and dragged prices from recent peaks.
- Spot basis offers for U.S. soymeal were unchanged on Thursday, with dealers reporting tight supplies due to a slow pace of crush in recent months.
- Market activity was quiet in both the rail and truck markets, dealers said.
- Surging futures prices pulled cash prices higher despite the steady basis levels.
US Corn, Soy, Wheat Ending Stocks Survey Before USDA WASDE
World Corn, Soybeans, Wheat Survey Before USDA WASDE Report
Brazil, Argentina Corn and Soy Survey Before USDA WASDE Report
Brazil farmers harvest 9.86% of soybean crop, less than half 2022 area -Patria
Brazilian farmers have harvested 9.86% of the country’s soybean area so far in the season, with work progressing slowly due to rains in key producing regions, Patria Agronegocios consultancy said on Friday.
At this time last year, 20.4% of the planted area had been harvested, Patria data showed.
Safras, another agribusiness consultancy, estimated 7.8% of the planted area has been harvested so far, compared with 17.1% in the previous season and 10% historically.
Brazilian farmers increased soybean area by 4.7% to 43.4 million hectares (107.3 million acres) in the current cycle, according to government agency Conab.
This year, Brazil’s total soybean output is estimated at around 153 million tonnes by Safras, a record.
Brazil Soybean Harvest 7.8% Completed, Safras Says
Harvest advanced from 4.4% a week earlier, though it’s still below five-year average and progress from the same period last year, according to Safras & Mercado.
- Progress compares with 17% a year ago and the five-year average of 10% completed for the period, firm says in emailed report
- Harvest in top-producing state Mato Grosso is complete in 24% of the planted area, up from 13.6% a week ago, according to figures from Imea, the state’s rural economy institute
- Mato Grosso’s harvest remains delayed compared to about 47% a year earlier and about 32% for five-year average
Brazil 2022/23 Soy Sales 30.5% Done as of. Feb. 3: Safras
Sales of the 2022/23 soybean crop in Brazil reached 30.5% of the projected output, Safras & Mercado says in an email report.
- Data compares to 28.5% until Jan 6. and 44.1% seen in the same period of 2022
- With an estimated harvest of 154.37m tons, the percentage corresponds to 46.72m tons
- Sales of the 2021/22 crop was 97.9% vs 96% in early January and 95% in the same period of 2022, Safras says
- The historical average for the period is 97.3%
- Farmers sold 124.76m tons of the 127.44m tons estimated for that crop year
Brazil’s farmers grapple with higher cost as soy rust cases rise
Brazil’s rainy summer this year has increased cases of soy rust on soybean crops, requiring farmers to boost pesticide applications that raised their fungicide bills by almost 10%, industry insiders said.
Through Thursday, around 160 cases of the disease had been reported during the 2022-23 season in ten states, according to data from the Anti-Soybean Rust Consortium.
A week earlier, there were 144 cases, up from 88 at the same time in the previous season.
“Soy rust is more prevalent this year,” said Matheus Pereira, director of agribusiness consultancy Patria AgroNegocios. “Rain favors fungal reproduction and we are noticing a need for increased fungicide applications.”
Despite more cases of the disease, Brazil’s soy output prospects are excellent as the country is poised to produce a record between 152 million and 154 million tonnes. (Full Story) (Full Story)
In Brazil’s center-western farm belt, the cost of inputs including seeds, pesticides and fertilizers was on average 4,300 reais ($842) per hectare this season, up 28% from the previous one, Patria data showed.
That does not factor in additional fungicide application costs, Patria’s Pereira said.
Ana Kowalski, an analyst at a Parana farm syndicate, said cases were expected to increase in Southern states as the weather is wetter this year. She said some farmers had to double fungicide applications, raising costs by as much as 85% depending on the case.
Parana state has the most soy rust cases in 2022-23 with 56 reports, according to the Consortium. Cases were also reported in Mato Grosso do Sul, but occurred at the end of the cycle, posing a lesser risk, a local farmer group said.
In top grower Mato Grosso, the disease was prevented by alternating the use of chemicals to prevent widespread infections, a farmer association said.
Argentina January Soy Meal Exports Seen Lowest in Two Decades
Argentina’s exports of soybean meal in January are estimated to have been the lowest for that month of any year since at least 2002, the Rosario Board of Trade said in a weekly newsletter.
- Shipments are estimated at 1.06m metric tons vs. an average for January in the previous five years of 1.87m
- The expiration at the end of December of a special FX rate for Argentina’s soy industry has subdued trading: Rosario
Russia may export 30-35 mln tonnes of grain in H1 2023 – Interfax
Russia may export 30-35 million tonnes of grain in the first half of 2023, the Interfax news agency reported on Monday, citing the deputy agricultural minister.
Indonesia Puts Some Palm Oil Quotas on Hold to Cool Local Prices
Indonesia will not allow companies to utilize all of their palm oil export quotas until the domestic supply of cooking oil is secure and local prices stabilize, says Luhut Panjaitan, the coordinating minister for maritime and investment affairs.
- Exporters can resume using the rest of their export quotas when the situation “cools down,” Panjaitan says in a posting on his instagram account on Monday
- Domestic cooking oil prices have soared above the govt bulk target of 14,000 rupiah/liter nearing the Ramadan month due to a shortage of supply in the market
- “High exports rights held by companies are a disincentive for them to supply to domestic market amid slowing exports demand,” Panjaitan wrote in his account
- Rising local cooking oil prices showing distribution issues as stockpiles are high and retailers violating govt ceiling price
SOYBEAN/CEPEA: Price rises abroad and valuation of soybean meal underpin soybean quotations in BR
International valuations of soybean and high demand for soybean meal have interrupted the downward trend of soybean prices in some Brazilian regions – this scenario even limited the decrease in the monthly average. Besides, low stocks and the slower pace of the harvesting – compared to that last year – helped to underpin quotations.
Thus, the ESALQ/BM&FBovespa Paranaguá (PR) Index and the CEPEA/ESALQ Paraná Index increased 1.2% and 0.3% between Jan. 26th and Feb.2nd. In January, the monthly averages closed at BRL 177.03/bag and at BRL 170.87/bag, respectively, 2.8% and 3.6% down from that in Dec/22 and the lowest since Dec/21.
On the average of the regions surveyed by Cepea, soybean prices dropped 0.6% in the over-the-counter market (paid to farmers) and 0.2% in the wholesale market (deals between processors) in the last seven days. Between December and January, the monthly averages dropped 1.9% and 2.6%, respectively.
In recent weeks, concerns about low supply and the crop failure in South America led purchasers to the United States. According to a report from the USDA, American soybean exports increased 1% in the two last weeks and 31% compared to the same period of 2021.
On the other hand, Brazil exported a slight 851.87 thousand tons of soybean in January, according to Secex, a steep 57.82% down from that in Dec/22 and 65.2% less than that in Jan/22.
SOYBEAN MEAL – Expectations for higher demand for soybean meal and uncertainties about the supply from this by-product in Argentina (the world’s number one exporter of soybean meal) raised the international prices for this by-product, which hit record levels.
The export premiums for soybean meal increased in Brazil too. At the port of Paranaguá (PR), the premium for shipment in March/23 closed at USD 25/short ton on Thursday, 2, higher than the USD 17/short ton on the previous Thursday.
This scenario underpinned the quotations for soybean meal in Brazil. However, the valuations in the national spot market were limited by the lack of some purchasers in the market, who have been working with the product in stock, expecting prices to drop in the coming weeks, based on the record soybean harvest in Brazil.
On the average of the region surveyed by Cepea, the prices for soybean meal remained stable in the last seven days. Between Dec/22 and Jan/23, values rose 2.6% in Campinas (SP), averaging BRL 2,955.72/ton last month, the second highest nominal average in the series of Cepea, which began in Jan/99 for this product – only lower than that from Mar/22, when it hit BRL 2,917.22/ton.
CORN/CEPEA: Because of the weather, sellers leave the market, and prices rise in some regions
Corn prices have resumed rising in some of the regions surveyed by Cepea, influenced by concerns about the dry weather in southern Brazil and in Argentina and its effects on crops productivity. Besides, Brazilian corn exports have been high, helping to underpin quotations.
Despite the expectations for a higher output in the national summer crop of corn and initial estimates pointing to a good harvest in Argentina, the dry weather during crops development has led Emater/RS and the Bolsa de Cereales to revise down productivity estimates.
As for exports, in January, Brazil exported 6.34 million tons of corn, according to data from Secex, 132% more than the volume shipped in Jan/22. In the 2021/22 season (Feb/22 – Jan/23), exports totaled 47 million tons, 128% up from that in the same period of the previous season (20/21).
Thus, supply in the 2021/22 season (harvest + imports + ending stocks) is estimated by Conab at 123.78 million tons. With consumption forecast at 75 million tons and exports at 47 million tons, ending stocks are expected to be around 2 million tons this month, a lot lower than the 7 million tons from Jan/22. By adding the output of the summer crop to ending stocks, this volume would account for 35% of the consumption in the 2022/23 season, against 40% last season.
Corn exports usually begin to decrease at the beginning of the summer crop, majorly because of soybean shipments. However, for the 2022/23 season, exports are expected to continue stable. For this month, exports are estimated to reach 2 million tons, surpassing the 770 thousand tons shipped in 2022. In the 22/23 season, Conab estimates 45 million tons will be exported.
PRICES – Sellers have been monitoring the weather in Brazil and are aware of the high exports’ performance and sporadic logistic issues – because of the lower availability of trucks, due to the soybean harvest and transport –, limiting supply to the spot market, while some others raised asking prices.
Between January 26 and February 2, the ESALQ/BM&FBovespa Index (Campinas, SP) increased 0.2%, closing at BRL 85.04 (USD 16.89) per 60-kg bag on Thursday (2). At the port of Paranaguá (PR), quotations dropped 0.2%, influenced by international devaluations and the dollar depreciation – the American currency decreased 0.7% in the last seven days, to BRL 5.036 on Thursday, 2.
On the average of the regions surveyed by Cepea, prices dropped 0.6% in the over-the-counter market (paid to farmers) and a slight 0.1% in the wholesale market (deals between processors).
CROPS – Recent rains have interrupted the harvesting of the summer crop of corn in some regions in Paraná, Minas Gerais and São Paulo. By Jan. 30th, 7.8% of the national crop had been harvested. As for the second crop, 3.9% had been sown in Brazil, less than the 10% from last year, according to Conab.
Ukraine’s 2023 Grain Harvest Seen Between 45m-50m Tons: Ministry
Ukraine’s grain harvest may be between 45m to 50m tons this year, Deputy Agriculture Minister Taras Vysotskyi told Bloomberg News in a text message.
- The “many drivers” that could influence the future crop “are not clear yet”
- NOTE: Ukraine’s grain harvest reached 53.2m tons between January 2022 and Feb. 3, 2023, with 9% of corn remaining unharvested in fields, according to the Agriculture Ministry
- NOTE: Lower harvest than last year will cut Ukraine’s GDP growth by 0.6 percentage points in 2023, according to the central bank’s projections
Russia’s Wheat-Export Tax to Rise to 4,497 Rubles/Ton: Interfax
Russia’s wheat-export duty will rise next week to 4,497 rubles a ton ($63.75) from 4,365 rubles, Interfax reported, citing the agriculture ministry.
NOTE: Russia started calculating the export tax in rubles in July; previously, it was calculated in dollars, and the amount was markedly higher
UAN, Urea, Ammonia Prices Drop as Nitrogen Complex Slumps
Nitrogen and potash prices remain under pressure in the US as buyers review producers’ winter and spring pricing programs. New Orleans (NOLA) and inland prices for urea, urea ammonium nitrate and potash continue to fall. A February reset for ammonia pushed prices significantly lower at Tampa and NOLA, with a Midwest reset expected soon.
Fertilizers Remain Pressured, Led by Plunging UAN, Urea Prices
Nitrogen markets remained under pressure in the US, led by a sharp drop in urea ammonium nitrate (UAN) and urea prices. Amid plentiful supply and lackluster demand for prompt and spring shipments, UAN dropped $50-$70 a short ton (st) at many inland terminals in the Corn Belt and Southern US, with urea falling $40-$60/st at some locations. New Orleans (NOLA) barge prices also dropped for both products, while softer ammonia prices in the Southern US, along with a weaker global market, fueled expectations for a downward reset of Corn Belt ammonia in the coming weeks.
Phosphate prices also showed small declines at NOLA and in the Corn Belt, while potash fell another $5-$15/st at NOLA and inland.
Brazil Fertilizers Mixed Amid Reduced Need on Corn
As nitrogen demand for safrinha winds down, nitrogen prices weakened in Brazil. Potash is bearish amid high competition and phosphates are bullish, even though prices for both remained stable as soybean 2023-24 negotiations slowed.
Off-Season Lull Drives Nitrogen Prices Lower in Brazil
Fertilizer prices were mixed in Brazil amid slow demand as farmers transition to corn planting from soybean harvesting. Urea slipped to $390-$400 a metric ton (mt) vs. prior week’s $405-$425, and the bearish market was reinforced by sentiment at the Fertilizer Latino Americano (FLA) conference this week in Rio de Janeiro. Potash was unchanged at $500-$520/mt, but competition between suppliers is likely to pressure prices as offers for Belarusian product dip to $490/mt. Monoammonium phosphate (MAP) was also steady, but demand is about to rise globally and low supply may boost prices.
Many FLA attendees said they agreed that Brazil’s fertilizer market will grow in 2023 vs. 2022, but doubt a return to 2021’s record. If potash and phosphate prices advance ahead of 2023-24 soybean demand, low affordability may add pressure.
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