Information produced by ADM Investor Services, Inc. and distributed by Stewart-Peterson Inc.
Wheat prices overnight are down 6 1/2 in SRW, down 10 1/4 in HRW, down 7 1/4 in HRS; Corn is down 2 1/4; Soybeans down 1; Soymeal up $0.44; Soyoil down 0.66.
Markets finished last week with wheat prices up 31 1/4 in SRW, up 24 3/4 in HRW, up 6 in HRS; Corn is down 1/2; Soybeans up 21 1/4; Soymeal up $0.82; Soyoil up 0.74.
For the month to date wheat prices are up 18 1/4 in SRW, up 20 in HRW, up 3/4 in HRS; Corn is down 1 1/2; Soybeans up 3 1/2; Soymeal up $16.10; Soyoil down 2.49.
Year-To-Date nearby futures are down 1.1% in SRW, up 1.4% in HRW, down 1.6% in HRS; Corn is unchanged0.0%; Soybeans up 1.5%; Soymeal up 4.8%; Soyoil down 5.8%.
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Chinese Ag futures (MAR 23) Soybeans down 16 yuan; Soymeal up 40; Soyoil up 6; Palm oil down 14; Corn up 22 — Malaysian palm oil prices overnight were down 8 ringgit (-0.20%) at 3923.
There were changes in registrations (-63 SRW Wheat, -11 Soybeans). Registration total: 2,660 SRW Wheat contracts; 0 Oats; 0 Corn; 588 Soybeans; 467 Soyoil; 0 Soymeal; 192 HRW Wheat.
Preliminary changes in futures Open Interest as of February 10 were: SRW Wheat up 3,953 contracts, HRW Wheat up 1,767, Corn up 25,381, Soybeans up 11,762, Soymeal up 1,395, Soyoil up 2,639.
Brazil Grains & Oilseeds Forecast: Scattered showers continue for central and northern areas, where breaks in the heavy showers are few and far between. Soybean harvest and safrinha corn planting remain behind schedule. If the delays are too great this week and next week, as they are forecast to be, safrinha corn will be more exposed to the dry season, which may include pollination. Southern areas continue to have issues with pronounced dryness. Some better rain will move through with a couple of fronts this week before dry conditions are likely to resume again.
Argentina Grains & Oilseeds Forecast: It was hot over the weekend with many areas reaching triple digits yet again. A front brought showers to southern areas on Sunday and will move north Monday. A second front will follow behind it by a couple of days, but forecasts have trended down with precipitation coverage and intensity on the second front, and forecasts remain dry for the following week, a bad situation for corn and soybeans.
Northern Plains Forecast: It was warm and dry over the weekend. Cooler temperatures will breeze through the region this week with some scattered snow showers, but the cold will be brief. Another shot of colder air will move through next week and is forecast to be a significant shot of colder air for the last week of February, increasing stress and feed requirements for livestock.
Central/Southern Plains Forecast: Dry conditions were noted over the weekend with increasing temperatures. A system will produce widespread showers and some thunderstorms Monday and Tuesday with a second system moving through Wednesday into Thursday. The second storm should produce a stripe of moderate to heavy snow across Colorado and Kansas. Precipitation this week will help to at least keep drought from getting worse, but much more will be needed.
Midwest Forecast: Rising temperatures over the weekend have led to some snowmelt. Two systems will move through this week. The first will be mostly rain while the second will bring a band of moderate to heavy snow for Iowa and Wisconsin. A brief shot of colder air will follow but temperatures will rise again over the weekend and into next week.
The player sheet for Feb. 10 had funds: net buyers of 10,000 contracts of SRW wheat, buyers of 10,000 corn, buyers of 11,000 soybeans, buyers of 1,500 soymeal, and buyers of 4,000 soyoil.
- CORN PURCHASE: The Korea Feed Association (KFA) purchased about 64,000 tonnes of animal feed corn sourced from optional origins in an international tender on Friday.
- WHEAT PURCHASE: Algerian state grains agency OAIC is believed to have bought milling wheat in an international tender this week which sought limited shipment to two ports only.
- RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 79,439 tonnes of rice
- RICE TENDER: Egypt’s state grains buyer, GASC, is seeking at least 25,000 tonnes, plus or minus 10% at the buyer’s preference, of white rice in a tender-practice on the account of the Holding Company for Food Industries. Offers should be submitted on Feb. 14. Payment will be submitted on a cost, insurance, and freight (CIF) basis in U.S. dollars, and will be at sight and via 180-day letters of credit. GASC will choose between either.
- FEED WHEAT AND BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) said it will seek 70,000 tonnes of feed wheat and 40,000 tonnes of feed barley to be loaded by May 31 and arrive in Japan by July 27, via a simultaneous buy and sell (SBS) auction that will be held on Feb. 15.
- Basis bids for corn and soybeans shipped by barge to the U.S. Gulf Coast were steady to mixed on Friday, after several days of lowering barge freight rates, improving river conditions and lax export interest, traders said.
- Spot barges on the Mississippi, Illinois and lower Ohio Rivers were relatively steady, after sliding in recent days, as traders noted that there was generally a lack of bidders for empty barges, traders said.
- Improving weather and river levels, as well as ice issues subsiding, has also weighed on freight prices in recent days, three traders said.
- U.S. soybean futures rose on Friday, with the market underpinned by soymeal’s firming to its highest level in nearly nine years and concerns about the forecast for Argentina turning drier, traders said.
- CIF corn barges loaded in February were bid at 79 cents over March corn, up 2 cents from Thursday’s last bid. Corn barges loaded in March were bid at 83 cents over futures, down 1 cent from Thursday.
- FOB basis offers for February corn shipments were around 88 cents over March, steady from Thursday. Offers for March shipments were around 92 cents over futures, down 1 cent from a day earlier.
- For soybeans, CIF barges loaded in February traded at 96 cents over March soybeans and were re-bid at 95 cents, down 1 cent from Thursday. March soy barges also were bid at 95 cents over futures.
- FOB offers for February soybean shipments were around 115 cents over March, steady with Thursday, while March shipments were offered around 112 cents over futures, up 2 cents.
- U.S. spot cash millfeed values were mixed on Friday in the Midwest and Plains regions, as bulky flour mill supplies continued to outweigh demand and feed mixers looked to alternative ingredients, dealers said on Friday.
- Flour mills in the U.S. midsection generally were running six to six-and-a-half days per week, generating plentiful supplies of flour and byproducts, two sources said.
- But a boost in corn futures gave prices a tiny price bump on the day in some markets, traders said.
- Spot basis bids for corn and soy jumped on Friday at a Midwest river terminal, but remained generally stable in other locations, grain dealers said.
- Soybean and corn basis firmed at the terminal in Morris, Illinois, which is on the Illinois River.
- Spot basis bids for U.S. corn and soybeans were steady to higher at processors on Friday, grain dealers said.
- Corn basis rose at a processor in Cedar Rapids, Iowa, while the soy basis increased at a Lafayette, Indiana, processor.
- Corn bids were flat to lower at ethanol plants.
- Spot basis bids for hard red winter wheat remained flat on Friday at rail and truck market elevators in the southern U.S. Plains, grain dealers said.
- Protein premiums for hard red winter wheat delivered by rail to or through Kansas City fell 20 cents for wheat with protein content ranging from 12% to 14%, according to the latest CME Group data.
- Spot basis offers for soymeal remained steady around the U.S. Midwest on Friday as futures prices soared, dealers said.
- Soymeal basis values at Gulf Coast export terminals were flat.
Brazil Farmers Harvest 17.39% Of Soybean Area Versus 29.85% At This Time Last Year – Patria Agronegocios
BRAZIL FARMERS HARVEST 17.39% OF SOYBEAN AREA VERSUS 29.85% AT THIS TIME LAST YEAR – PATRIA AGRONEGOCIOS
Ukraine’s Grain Exports Drop 29% Y/y in Season Through Feb.13
Ukraine’s grain exports during the season that began July 1 totaled 29.2m tons as of Feb. 13, compared with 40.9m tons a year earlier, the country’s agriculture ministry says on its website.
- 10.3m tons of wheat, down 41% y/y
- 1.9m tons of barley, down 65% y/y
- 16.7m tons of corn, down 3.8% y/y
Argentina Corn Crop Cut to 45M Tons as Drought Bites: USDA FAS
Argentina’s corn harvest in the 2022-23 season is now seen at 45m tons, the USDA’s Foreign Agricultural Service said in a report.
- NOTE: That’s below the USDA’s forecast for 47m tons in last week’s WASDE report; it saw the crop at 52m tons in January
- Drought has caused “serious damage” to early-planted corn, which usually accounts for 35-40% of the total area and a larger share of the harvest volume: report
- Late-planted corn is also “somewhat affected,” although rain in mid-January halted the production declines
- “If dry conditions return, especially in mid/late February, further cuts would be expected”
India Edible Oil Refiners Want Government to Increase Import Tax
- Association says move will protect local farmers and refiners
- Duties unlikely to be raised to prevent food inflation surge
India’s edible oil processors, which turn palm, soybean and sunflower oils into refined products for the food industry, want the government to increase import taxes in order to protect domestic companies.
The Solvent Extractors’ Association said the basic duty on refined palm oil imports should be raised to 20% from 12.5% currently, according to B.V. Mehta, executive director of the group. Officials should also scrap the rule that allows duty-free import of sunflower oils, he said on Friday.
The request comes as India has already imported huge quantities of edible oils in recent months, pushing stockpiles to a record. Raising taxes could reduce fresh imports and allow refiners to increase domestic selling prices of cooking oils. It would also lead to a drop in international prices on prospects for weaker Indian demand. The country is the biggest importer of vegetable oils.
Stockpiles across India hit a record 3.22 million tons as of the start of January, according to the extractors’ association. Earlier this week, another industry group, the Soybean Processors Association, also sought higher import taxes as it would benefit local farmers who will harvest their oilseed crop in March.
Authorities are unlikely to raise the duties as they want to prevent a surge in food inflation, said Anilkumar Bagani, head of research at Mumbai-based Sunvin Group. “They want vegetable oil prices at an affordable level,” he said.
Right now, domestic prices of refined palm oil are down and that’s leading to losses for manufacturers, Bagani said. Still, he doesn’t rule out the possibility of higher import duties if pressure from farmers and processors continue.
Global benchmark palm oil futures fell 1.1% to close at 3,931 ringgit ($907) a ton in Kuala Lumpur, after slumping as much as 3.1% earlier.
SOYBEAN/CEPEA: Expectations for higher demand for by-products raise crush margin
Cepea, February 10 – While the international demand for soybean is low, for the Brazilian by-products, demand has been high. Thus, the export premiums for soybean have dropped in Brazil this week, while the premiums for soybean meal and oil increased. This context raised the crush margin of national processors between February 1st and 9th, by 22.7%, calculated by Cepea at USD 111.11/ton, considering the Mar/23 contract traded at CME Group on Thursday, 9.
According to Secex, the Brazilian exports of soybean decreased 65.7% between Jan/22 and Jan/23, totaling 839 thousand tons last month. On the other hand, Brazil shipped 188.96 thousand tons of soy oil in January, 33.6% more than that a year ago and the highest volume for the month since 2003. Of soybean meal, Brazil exported 1.42 million tons in January, 1.8% less than the record shipped in Jan/22 but still the second highest for the month.
Still, soybean prices have increased in Brazil this week, boosted by the dollar appreciation against the Real – by 4.6% in the last seven days, to BRL 5.27 on Feb. 9th – and the slow harvesting of the 2022/23 crop.
According to Conab, Brazil has harvested 8.9% of the national 22/23 crop of soybean, nearly 8 percentage points less than that a year ago. In São Paulo, farmers reported that many crops are ready to be harvested, however, high rainfall is hampering activities.
In the national spot market, the ESALQ/BM&FBovespa Paranaguá (PR) Index and the CEPEA/ESALQ Paraná Index increased 0.9% and 1.6% between Feb.2nd and 9th, to BRL 173.86/bag and BRL 166.78/bag on Feb. 9th. On the average of the regions surveyed by Cepea, soybean prices rose 1.7% in the over-the-counter market (paid to farmers) and 1.1% in the wholesale market (deals between processors).
As for the by-products, on the average of the regions surveyed by Cepea in Brazil, meal quotations rose 0.6% in the last seven days, while oil prices dropped 0.4%, to BRL 6,500.81/ton on Feb. 9th (in SP). This devaluation is linked to the lack of Brazilian purchasers in the market.
CORN/CEPEA: Prices are still firm in BR, despite expectations for a record corn harvest
Corn prices are still firm in most of the regions surveyed by Cepea in Brazil, although official data are pointing to a record harvest in the country in the 2022/23 season. The upward trend of quotations has been slightly higher in the regions with lower supply.
In Campinas (SP), base for the ESALQ/BM&FBovespa Index, prices rose 1.1% in the last seven days, closing at BRL 85.96 per 60-kilo bag on Thursday, 9. In the regions that produce summer crops, such as Santa Rosa (RS) and Northern Paraná, quotations increased 0.9% and 2%, respectively. On the average of the regions surveyed by Cepea, prices dropped 0.5% in the over-the-counter market (paid to farmers) but remained stable in the wholesale market (deals between processors).
At the national ports, exports have been high, and prices are on the rise, boosted by the appreciation of the dollar against the Real – by 4.6% in the last seven days, to BRL 5.27 on Thursday, 9.
In Paranaguá (PR), corn prices averaged BRL 91.28/bag on Thursday, 9, 1.8% up from that on the previous Thursday, 2. Anec estimates Brazilian corn exports to total 2.29 million tons in February, against 4.9% in January and 523.34 thousand in Feb/22.
ESTIMATES – This week, Conab and the USDA have revised the estimates for Brazil’s and the world’s corn production, which continue high. As sowing is late in Brazil, estimates may be revised down again. So far, Conab forecasts the Brazilian corn output to total 123 million tons, and the USDA, 125 million tons, 9% and 8% up from that last season.
The report released this month by Conab has lower production estimates for the second crop – compared to that reported in January –, forecast at 94.96 million tons, nearly 2 million tons below the previous estimates. This is due to the production decreases in Paraná, Mato Grosso do Sul and Paraíba. For the first and the third crops, production estimates remained stable between the reports from January and February, at 26.46 million tons and 2.31 million tons, 6% and 5% higher than that in the previous season.
Thus, considering the three crops, total supply is expected at 123.74 million tons, according to Conab. Domestic consumption estimates were revised down, and exports, up, to 79.37 million tons and 47 million tons, respectively. This month, Conab has updated consumption estimates of previous season, leading ending stocks in Jan/24 to eight million tons, higher than the seven million tons from the beginning of the current season.
CROPS – Sowing of the second crop is late in Brazil. According to Conab, by Feb. 4th, 10% had been sown in Brazil, against 22% in the same period last year. As for the second crop, the harvesting is late too, having reached 9.1% of the national area late last week.
New U.S. agriculture trade chief seeks to diversify buyers beyond China
U.S. chief agricultural trade negotiator Doug McKalip wants China to keep striving to meet U.S. farm goods purchase commitments under the 2020 “Phase 1” trade deal, but told Reuters that he also is pushing to diversify exports beyond the biggest U.S. grain customer.
In his first media interview on Thursday since his Dec. 23 Senate confirmation of his U.S. Trade Representative office post, McKalip said that his top priority was opening new markets for U.S. agricultural products.
“I think for the American farmer, it’s important to have a diverse set of buyers out there,” he said. “We need to develop additional markets.”
China will remain an important top customer, he said, a day after U.S. Census Bureau trade data showed China reached a record $40.85 billion – nearly a fifth of global U.S. farm exports that also reached a record $213 billion.
The purchase values, aided by sharply higher grain prices due in part war-constrained supplies from Ukraine, meant that China would have satisfied the 2020 target outlined in the Trump administration’s Phase 1 trade deal – goals that China failed to reach in the prior three years.
“We’d certainly like to see their purchases be closer to the top numbers that they agreed to,” McKalip said of China.
He added that USTR was “not asking for a favor. We’re just asking them to do what they signed onto when they signed Phase 1.”
NEW MARKETS, NEW PRODUCTS
Every continent has potential markets for U.S. row crops, grains and other staples, and the Ukraine war means demand for these will stay high, he said, but there were many other new export opportunities to pursue.
“I’m interested in specialty crops, organics, biofuels, all kinds of emerging areas of U.S. agriculture that I think are exciting, and that I think consumers out there want,” McKalip said. “We just need to make sure we’re in a position where other governments don’t have barriers” to such products.
Southeast Asia represents an important region to expand U.S. farm exports, and McKalip said he intends to work on reducing trade barriers through the Biden administration’s Indo-Pacific Economic Framework negotiations.
Although the talks are not expected to result in any tariff reductions, McKalip said that “regulator-to-regulator” discussions for improving standards for using land and water resources, conservation, and farm labor standards can help level the playing field in such talks.
McKalip also told Reuters that he has asked Mexico to explain the science behind its genetically modified corn ban and that USTR also wants Canada to broaden U.S. access to its dairy import quotas to resolve a second U.S. trade challenge.
US Pork Production Falls 4.1% This Week, Beef Down: USDA
US federally inspected pork production falls to 544m pounds for the week ending Feb. 11 from 567m in the previous week, according to USDA estimates published on the agency’s website.
- Hog slaughter down 3.7% from a week ago to 2.498m head
- Beef production down 1.8% from a week ago, cattle slaughter falls 1.7%
- For the year, beef production is 2.9% below last year’s level at this time, and pork is 2.2% above
Ammonia, UAN, Urea Prices Drop as Nitrogen Complex Slumps
Nitrogen and potash prices remain under pressure in the US as buyers delay spring purchases. Producers lowered spring ammonia prices by as much as $260 a short ton at midweek to spur sales, while New Orleans and inland prices for urea, urea ammonium nitrate, ammonium sulfate and potash continue to fall.
Corn Belt Ammonia Prices Plummet Amid Slow Demand
An expected reset of spring ammonia prices pushed new offers in the Corn Belt down to $840-$850 a short ton (st) on Feb. 9, significantly lower than the prior $1,050-$1,110. The drop was anticipated amid falling urea and urea ammonium nitrate (UAN) prices and reports of poor spring ammonia sales. The softness in urea and UAN continued, with New Orleans (NOLA) urea down $20-$40/st and UAN $25-$30 lower than last week. Inland terminal prices for urea and UAN remained squeezed as well.
NOLA phosphates declined $25-$50/st vs. last week, while NOLA potash dropped $5-$8 due to low seasonal demand. Monoammonium phosphate (MAP) prices moved down $10/st in the Pacific Northwest and more in Western Canada, where additional declines were also reported for urea, UAN and ammonium sulfate.
Quiet Global Demand Pressures Brazil Fertilizer Prices
Fertilizer prices in Brazil remain under pressure as suppliers compete for new buyers amid weak global demand. Fueled by delayed purchases in North America, suppliers have turned to Brazil to offload stocks, extending a free fall in nitrogen prices and pushing potash lower after weeks of stability.
Potash Prices Fall in Brazil as Producers Compete
After four weeks of stability, potash prices in Brazil dropped as suppliers try to accelerate sales for the 2023-24 soybean season. Potash fell to $495-$510 a metric ton (mt) vs. $500-$520, with Canadian and Russian producers competing against Belarusian offers as low as $470/mt. Prices might soften further amid reports of excess inventory and aggressive bids, but upward adjustments are also possible as global demand rises and imports drop. Roughly 1.3 million mt of potash are scheduled to arrive in Brazil in February and March. Combined with January’s total, potash 1Q imports awould be 29% lower than 1Q22.
Urea’s decline continued, with prices falling another $40/mt vs. last week. Phosphates remained stable, but recent declines in the US and slow domestic demand suggest potentially softer prices in next week’s negotiations.
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