Information produced by ADM Investor Services, Inc. and distributed by Stewart-Peterson Inc.

 

Wheat prices overnight are down 7 in SRW, down 7 1/4 in HRW, down 8 1/4 in HRS; Corn is up 6 3/4; Soybeans down 17 3/4; Soymeal down $0.24; Soyoil down 0.92.

Markets finished last week with wheat prices up 10 in SRW, up 9 in HRW, up 3/4 in HRS; Corn is up 42; Soybeans up 8 1/4; Soymeal up $1.07; Soyoil down 0.40.

For the month to date wheat prices are down 27 1/2 in SRW, down 6 1/2 in HRW, down 17 1/4 in HRS; Corn is up 51; Soybeans down 25; Soymeal up $7.60; Soyoil up 0.30.

Year-To-Date nearby futures are up 1% in SRW, up 9% in HRW, down -10% in HRS; Corn is up 13%; Soybeans up 20%; Soymeal up 16%; Soyoil up 25%.

 

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Chinese Ag futures (JAN 23) Soybeans up 1 yuan; Soymeal up 5; Soyoil down 14; Palm oil down 68; Corn up 38 — Malaysian palm oil prices overnight were up 11 ringgit (+0.26%) at 4183.

There were changes in registrations (-24 Soyoil). Registration total: 2,653 SRW Wheat contracts; 0 Oats; 0 Corn; 0 Soybeans; 61 Soyoil; 0 Soymeal; 1 HRW Wheat.

Preliminary changes in futures Open Interest as of August 26 were: SRW Wheat down 7,039 contracts, HRW Wheat down 631, Corn down 17,575, Soybeans down 474, Soymeal down 10,669, Soyoil down 5,658.

Northern Plains Forecast: Scattered showers moved through the region over the weekend but were not overly widespread. Though some showers may hang around North Dakota on Monday, drier conditions are expected for the week while temperatures will increase. The combination is not favorable for filling corn and soybeans.

Central/Southern Plains Forecast: Scattered showers and thunderstorms moved through a good portion of the region over the weekend and will continue to press south through the week as a front settles down into Texas by midweek. The front will likely continue to produce showers across Texas through the coming weekend, which could offer some needed relief from the drought. Other areas will only see light to moderate rain with little to no effect.

Midwest Forecast: Scattered showers and thunderstorms moved into the region over the weekend with some limited reports of severe weather. The front to a system will continue to push through the region with scattered showers through Tuesday before the region dries out. Temperatures will be seasonable for a couple of days behind the front, but will increase this weekend and next week. Some of the drier areas in the region will continue to see stress while areas that have been wetter recently should be alright for filling corn and soybeans.

The player sheet for Aug. 26 had funds: net buyers of 5,500 contracts of SRW wheat, buyers of 11,000 corn, buyers of 9,500 soybeans, buyers of 7,500 soymeal, and  buyers of 2,000 soyoil.

TENDERS

• SOYBEAN PURCHASE: U.S. exporters sold 146,000 tonnes of soybeans for delivery to unknown destinations during the 2022/2023 marketing year, according to the U.S. Department of Agriculture.
• WHEAT PURCHASE: Bangladesh is set import 500,000 tonnes of wheat at $430 a tonne from Russia in a government-to-government deal as it battles to secure supplies amid surging prices, two government officials with the direct knowledge of matter said on Sunday.

PENDING TENDERS

• WHEAT TENDER: Iranian state agency Government Trading Corporation issued an international tender to purchase about 60,000 tonnes of milling wheat
• WHEAT TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of milling wheat
• FEED BARLEY TENDER: Jordan’s state grains buyer issued a new international tender to purchase 120,000 tonnes of animal feed barley
• RICE TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of rice

US BASIS/CASH

• Basis bids for soybeans shipped out of the U.S. Gulf Coast firmed on Friday as export demand stayed strong, with bids for barges upriver of the Gulf also firming as early soybean harvest was delayed by rainfall across the southeast United States, brokers said.
  • Soybean barges loaded in August were bid steady at 300 cents over November futures, while September CIF soy barges were bid at 190 cents over November, up 5 cents.
  • FOB export premiums for first-half October soybean loadings, the first available delivery period, firmed 5 cents to about 245 cents over November futures.
  • For corn, CIF barges loaded in August were bid at 133 cents over September corn, 8 cents up from Thursday. September corn barges were bid around 104 cents over futures, up 1 cent.
  • FOB corn export premiums for September loadings at the Gulf were unchanged, trading at around 142 cents over September futures, while October premiums traded about 146 cents over December.
• Spot corn basis bids held mostly steady at interior elevators and processing plants around the U.S. Midwest on Friday, while bids at river elevators were steady to higher, grain dealers said.
  • Spot soybean basis bids were unchanged at crush plants and interior elevators and steady to firmer at river terminals as demand for export-quality beans has improved amid concerns that heavy rains may damage the Delta crop, dealers said.
• Spot basis bids for hard red winter wheat were mostly unchanged around the southern U.S. Plains on Friday as farmer sales remained slow but futures prices climbed, grain dealers said.
  • Some farmers sold small amounts of wheat earlier this week as prices rose. Many growers are now awaiting further price gains before booking fresh sales, dealers said.
• Spot basis offers for soymeal delivered by truck around the U.S. Midwest were steady to lower on Friday, while offers for rail-delivered soymeal were steady, dealers said.
  • Gulf basis values were unchanged after easing earlier in the week.
  • Higher Chicago Board of Trade soymeal futures have capped cash basis values as rising prices chilled some end-user demand. Soymeal futures are on pace for a 6% weekly advance.
  • Basis offers also eased ahead of the September delivery period. The spot contract is at a more than $44 per ton premium to the October contract.

TODAY

CFTC Money Managers’ Commodity Positions for Aug. 23

Summary of US Pro Farmer Crop Tour After Day Five

The following tables are based on data from the Pro Farmer Crop Tour that ran Aug. 22-25, with nationwide estimates provided by Pro Farmer on Friday.

Pro Farmer’s nationwide corn and soybean yield estimates are based on a mix of data, including tour findings, weather and acreage adjustments

Corn, Rapeseed Vessels Authorized to Leave Port in Ukraine: JCC

Two vessels carrying 58,750 tons of grain and food products were authorized to leave Ukraine on Saturday, the Joint Coordination Centre says Friday in emailed statement.

• The S-Breeze vessel was carrying 44,000 tons of corn from the Chornomorsk port to Egypt
• Adnan Torlak was hauling 14,750 tons of rapeseed from Chornomorsk to France
• Meanwhile, the Oris Sofi carrying 5,900 tons of sunflower oil was delayed en route to Turkey due to weather conditions, according to the group
• Nine vessel inspections were planned for Saturday
• NOTE: So far, 978,636 tons of grain and other food products have been shipped under the initiative to ensure safe transport of food and fertilizer in the wake of Russia’s invasion of Ukraine

Indonesia Ups Biodiesel Allocation for B30 Mandate to 11.03M Kl

Indonesia imposes a higher allocation of palm-based biodiesel to be mixed with gasoil to 11.03 million kiloliters this year from 10.15 million kiloliters to meet demand, according to a statement from the coordinating ministry for economic affairs.

• NOTE: Indonesia has imposed a national mandate to use 30% of palm-biodiesel blended with 70% gasoil since 2020
• Fuel consumption including diesel is seen to increase further in 4Q as the economy recovers
  • Additional palm-based biodiesel allocation is needed to meet the B30 policy until the end of the year
• The ministry also reaffirms govt decision to extend palm oil levy waiver until end of Oct.

Indonesia Sets CPO Reference Price at $930.02/Ton for Sept.1-15

Indonesia, the world’s largest palm oil producer, sets crude palm oil reference price for September 1-15 at $930.02 a ton, Musdhalifah Machmud, deputy for food and agriculture at the Coordinating Ministry for Economic Affairs, says in text messages.

• Higher reference price pushes current CPO export tax up to $124/ton from $74/ton, in line with the progressive rate policy

India Restricts Wheat Flour, Other Exports to Curb Prices

India announced a ban on outbound shipments of wheat flour and other products, according to a notification by the commerce ministry dated Aug. 27.

• However, shipments will be allowed subject to permission being granted by the Indian government after requests by other countries’ governments to meet their food security needs.

Three Food-Laden Vessels Authorized To Leave Ukrainian Ports

Three commercial vessels carrying 72,985 metric tons of grain and food products are authorized to leave Ukraine Aug. 29, Joint Coordination Centre says in emailed statement.

• Karteria to depart Pivdennyi/Yuzhny for Turkey, carrying 37,500 metric tons of wheat
  • It will be milled to flour in Turkey and then be loaded onto a new ship that will head to Yemen
• Peace M to depart Odesa to Constanta, Romania, carrying 24,485 metric tons of corn
• Ash Baltic to depart Odesa to El Dekhela, Egypt, carrying 11,000 metric tons of corn
• Anastasia which was due to depart from Chornomorsk to Turkey, carrying 3,800 metric tons of wheat, was delayed and is now scheduled to leave Ukraine on Aug. 29
• NOTE: Total tonnage of grain and other foodstuffs exported from the three Ukrainian ports under Black Sea Grain Initiative is 1,249,780 metric tons as of Aug. 28.

Australia Set for Third Bumper Wheat Crop After Rains, IKON Says

IKON Commodities raised its forecast for Australia’s 2022-23 wheat crop to 35.8 million tons as favorable conditions boost prospects across major growing regions in both the eastern and western grainbelts.

• Production outlook raised by 6.6%, or 2.2m tons, from a May forecast, and the nation is on track for third consecutive bumper harvest, IKON said in a Aug. 29 note
• The new estimate is 40% above the 5-year average and compares with a record 39m tons a year earlier
• While flooding interrupted planting in some parts of Queensland and New South Wales, the net impact was above-average soil moisture across the east coast
  • Still, the area lost due to water-logging will prevent this season’s output from exceeding last year’s record
• After “excellent rainfall,” growers in Victoria and South Australia’s Mallee region are set for a significant swing in production following last year’s dry conditions
• In Western Australia, rains in July and August arrived “just in time” for crops in the Geraldton and Northern Kwinana regions, while crops in the Esperance Port Zone look set for a bumper harvest should spring conditions be favorable
• Other 2022-23 production forecasts:
  • Barley 12.5m tons, up 9% from prior estimate; vs 14.2m tons last year
  • Canola 6.7m tons, up 23% from prior estimate; vs 6.8m tons last year

CORN/CEPEA: Weather abroad concerns agents and raises quotations in BR

Corn prices have increased for another week in Brazil and abroad. In the United States, quotations were boosted by news indicating that the productivity of the crops in the United States may decrease, concerns about the drought in Europe and in China, and lower exports from the Black Sea. This scenario reflected on Brazilian prices, reducing farmers’ interest in sales and raising values.

According to the crop report from the USDA, the number of crops in good conditions has decreased by 2 percentage points, to 55%. Compared to that in 2021, they have decreased by 5 p.p. Besides, news agencies have reported that productivity may be lower because of the drought, winds and hail.

In Europe, the drought and high temperatures have been the worst in the last decade, leading to negative revisions in the productivity of the summer crop. In early August, the USDA revised down the European production estimates by 8 million tons, to 60 million tons.

The same scenario of drought has been observed in China, where extreme heat is hitting rice and corn crops in the southwestern part of the country. In the regions of the Black Sea, despite the resume of exports, logistic issues for grains shipments are still being reported.

In this context, quotations resumed rising at Brazilian ports, boosting prices in the interior of the country and hampering agreements between purchasers and sellers. At the ports of Paranaguá (PR) and Santos (SP), corn values rose by 2.8% and 1.4% between August 18 and 25, respectively, despite the 0.9%-dollar depreciation.

Valuations at ports raised domestic prices, leading sellers to limit supply and opt for trading at ports. Thus, the ESALQ/BM&FBovespa Index for corn (Campinas, SP) rose by 1.5% in the last seven days, closing at BRL 83.31 (USD 16.25)/bag on Thursday, 25. On the average of the regions surveyed by Cepea, values increased by 1.3% in the over-the-counter market (paid to farmers) and by 0.9% in the wholesale market (deals between processors).

EXPORTS – Brazilian corn exports have been firm, influenced by the high output in Brazil. This month, shipments have totaled 4.7 million tons, according to data from Secex, already 400 thousand tons higher than the volume shipped in August last year. If exports continue at 313 thousand tons per day, the total volume may hit 7.2 million tons. Anec estimates Brazil to ship 7.5 million tons of corn this month.

ESTIMATES – Conab has just released the first estimates for the Brazilian 2022/23 grains crop, highlighting good yield of corn crops. For next season, the output is expected to total 125.5 million tons – if confirmed, this will be the new record and 9% above the volume produced in the current season.

Higher production is a reflex of both larger area and higher productivity in the second crop. High production estimates may also boost the number of deals with the international market. Exports are still forecast at 44.5 million tons, higher than the 37.5 million tons in the current season.

CROPS – The harvesting of the second crop of corn has ended in Mato Grosso and is ending in most Brazilian regions. On the national average, 90.2% of the crop had been harvested by August 20, according to data from Conab.

SOYBEAN/CEPEA: Export premium is the highest since 2014; prices react

Valuations abroad, export premium at high level and the disinterest of farmers in selling the remaining of the 2021/22 crop in Brazil have pushed up soybean prices this week. Besides, higher international demand, majorly from China, increased competition with Brazilian agents. Purchasers from local industries are buying higher volumes of soybean, aware of a possible higher demand for soybean meal.

Thus, at the port of Paranaguá (PR), the export premium for the contracts with shipment scheduled between September and October have been at USD 2.60/bushel this week, the highest since 2014, considering the same contract in previous years.

Thus, in the Brazilian spot market, the ESALQ/BM&FBovespa Index Paranaguá (PR) and the CEPEA/ESALQ Index Paraná rose by 2.8% in the last seven days, closing at BRL 189.48 (USD 36.96)/60-kilo bag and at BRL 184.20 (USD 35.93)/bag on Thursday, August 25. On the average of the regions surveyed by Cepea, prices increased by 2.2% in the over-the-counter market (paid to farmers) and by 2.5% in the wholesale market (deals between processors).

BY-PRODUCTS – With soybean valuations and expectations for higher international demand, the quotations for soybean meal have increased in Brazil too. The hot weather in Asia and in Europe is leading to speculations of higher demand for this by-product for feed. And amid the economic crisis in Argentina, the major exporter of soybean by-products in the world, shipments from Brazil and the United States may increase.

Thus, on the average of the regions surveyed by Cepea, the prices for soybean meal increased by 1.5% between August 18 and 25. Purchasers from Goiás, Rio Grande do Sul and São Paulo are beginning to report difficulties in buying the by-product.

China to release pork reserves from Sept to ensure supply during holidays -state planner

China’s state planner said on Monday it will release pork reserves from September to ensure meat supply during upcoming holidays when demand typically increases.

Pork prices have risen rapidly in recent months amid tighter supply and as farmers held back from selling hogs.

Chinese drillers work 15-hour days building wells in drought-hit Jiangxi

Teams of drillers are working long hours to build wells to fight a devastating drought sweeping parts of China, farmers in Jiujiang city in the country’s central Jiangxi province told Reuters on Saturday.

“These villages, all of them, are particularly dry,” said Gao Pucha, 42, who led one drilling team in Dashan village in Jiujiang.

“When we got the notice to drill wells, we got up early and worked late, more than 15 hours a day.”

In another nearby village, a 72-year-old man surnamed Chen scoured the fields for ears of rice left over from the paddy harvester to take home and feed to his chickens.

“Sesame, corn, sweet potatoes, cotton in the drylands are all dried up,” Chen told Reuters.

Chen added that only the rice fields could be filled with water from nearby reservoirs, “so they just filled them with a little bit of water and it was a little bit better.”

China issued a national drought emergency earlier this month as record-high temperatures continued to scorch the regions along the Yangtze River. On Wednesday, Jiangxi province raised its drought emergency response to Level III from Level IV. Level I is the highest of the country’s four-tier ranking system.

Jiangxi province is one of China’s 13 major grain-producing regions.

The heat has struck the agriculture sector hard and caused a patchwork of factory shutdowns across the country.

In July alone, high temperatures caused direct economic losses to China of 2.73 billion yuan ($400 million), affecting 5.5 million people and 457,500 acres of land, according to government data published on Thursday.

High-Cost European Ammonia Production Shuts

Europe’s right-most position on the ammonia cost curve will protect farmers from the worst of surging natural gas prices. The price of ammonia, the key input for nitrogen fertilizers, is up 15% in 3Q, trailing a near-doubling of European gas costs. Annual ammonia demand of 182 million metric tons is exceeded by global capacity of 234 million tons, leaving room for closures when production costs exceed the market price. Europe’s gas price of $65 per million Btu puts the cost of ammonia production at about $2,200 a ton. Global ammonia prices are about half that level, suggesting a more balanced market outside Europe as industrial demand weakens, production rates stabilize and new capacity comes online.

Ukrainian and Russian ammonia exports from the Black Sea remain offline, and their prolonged absence could push prices higher.

Brazil Urea Climbs as Potash, Phosphates Dip Again

Brazil urea prices moved up $30 a metric ton (mt) this week amid nitrogen plant shutdowns in Europe and expected supply constraints. Though suppliers were testing the higher price levels, Brazil relies on Russian urea traded at more competitive prices. If demand retracts, urea prices could fall again. Phosphate and potash prices were down as suppliers sought to accelerate the pace of sales with aggressive discounts. The outstanding balance of fertilizer demand for summer crops is estimated at 10-15%, signaling high competition as only a few opportunities are left to close.

The National Fertilizer Congress took place on Aug. 23, and no supply constraints or diminished consumption scenarios were considered. Estimates indicate 45.1 million mt are expected to be delivered this year, slightly behind the 45.8 million mt in 2021.

Fertilizer Price Relief Around Corner as Farmers Prep for Fall

Most nitrogen prices are up after aggressive summer fill programs, fueled by more nitrogen plant outages in Europe due to surging natural gas prices. But US wholesale and retail fertilizer prices are down significantly from spring highs, signaling relief for farmers ahead of the fall application season.

EU Outages Fuel Rise in Ammonia, Urea Prices in Friday Findings

Surging gas prices and nitrogen plant closings in Europe sparked an increase in Tampa ammonia for September, which settled $50 a metric ton higher than the August price. Europe’s production outages also fueled a rapid rise in New Orleans (NOLA) urea, which went from $560 a short ton (st) to $695 by the end of the week vs. last week’s $542-$578. The NOLA spike drove inland urea prices up as well, with Corn Belt terminals topping out at $725/st vs. last week’s $610-$640. Urea ammonium nitrate prices also bumped up, while phosphate and potash prices at NOLA and inland were generally flat to lower.

Phosphate and potash prices also softened in Brazil amid oversupply and slow demand, with phosphate prices in India and China falling as well.

US Beef Production Up 2.9% This Week, Pork Down: USDA

US federally inspected beef production rises to 551m pounds for the week ending Aug. 27 from 536m in the previous week, according to USDA estimates published on the agency’s website.

• Cattle slaughter up 2.6% from a week ago to 678m head
• Pork production down 0.3% from a week ago, hog slaughter falls 0.1%
• For the year, beef production is 1% above last year’s level at this time, and pork is 2.8% below

UNITED STATES

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