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Wheat prices overnight are up 5 in SRW, up 5 1/2 in HRW, up 2 1/2 in HRS; Corn is up 4 1/4; Soybeans up 7 1/4; Soymeal up $0.08; Soyoil up 1.01.

For the week so far wheat prices are up 27 3/4 in SRW, up 31 in HRW, up 25 3/4 in HRS; Corn is down 2; Soybeans down 9 1/2; Soymeal down $0.98; Soyoil down 0.58.

For the month to date wheat prices are up 76 3/4 in SRW, up 69 in HRW, up 45 1/2 in HRS; Corn is up 4 1/4; Soybeans down 6 1/2; Soymeal down $1.60; Soyoil down 4.32.

Year-To-Date nearby futures are up 18% in SRW, up 22% in HRW, down -1% in HRS; Corn is up 14%; Soybeans up 7%; Soymeal up 2%; Soyoil up 18%.

 

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Chinese Ag futures (JAN 23) Soybeans up 33 yuan; Soymeal up 48; Soyoil up 12; Palm oil down 128; Corn up 3 — Malaysian palm oil prices overnight were up 117 ringgit (+3.63%) at 3343.

There were no changes in registrations. Registration total: 3,084 SRW Wheat contracts; 0 Oats; 0 Corn; 5 Soybeans; 46 Soyoil; 147 Soymeal; 40 HRW Wheat.

Preliminary changes in futures Open Interest as of September 28 were: SRW Wheat up 5,141 contracts, HRW Wheat down 118, Corn up 10,508, Soybeans up 6,946, Soymeal down 6,292, Soyoil down 833.

Northern Plains Forecast: Mostly dry Thursday. Isolated to scattered showers Friday-Sunday. Temperatures above to well above normal through Sunday. Outlook: Isolated to scattered showers Monday-Wednesday. Mostly dry Thursday-Friday. Temperatures above normal Monday-Friday.

Central/Southern Plains Forecast: Mostly dry through Friday. Isolated showers Saturday-Sunday. Temperatures near to above normal through Sunday. Outlook: Isolated showers Monday-Wednesday. Mostly dry Thursday-Friday. Temperatures near to above normal Monday-Friday.

Western Midwest Forecast: Mostly dry through Saturday. Isolated showers north Sunday. Temperatures near to below normal Thursday, near to above normal Friday-Sunday.

Eastern Midwest Forecast: Mostly dry through Friday. Isolated showers far southeast Saturday-Sunday. Temperatures below normal through Friday, near normal Saturday, near to above normal Sunday. Outlook: Mostly dry Monday. Isolated showers Tuesday-Thursday. Mostly dry Friday. Temperatures near to above normal Monday-Friday.

The player sheet for Sept. 28 had funds: net buyers of 8,500 contracts of SRW wheat, buyers of 2,500 corn, buyers of 2,000 soybeans, sellers of 1,000 soymeal, and  sellers of 1,500 soyoil.

TENDERS

• MILLING WHEAT PURCHASE: The Taiwan Flour Millers’ Association purchased an estimated 51,800 tonnes of United States-sourced milling wheat in a tender that closed on Thursday
• BARLEY TENDER: Jordan is seeking 120,000 tonnes of barley in an international purchasing tender with a deadline for offers on Oct. 5, a government source told Reuters on Wednesday.
• BARLEY TENDER UPDATE: Three trading companies are believed to be taking part so far in the international tender from Jordan’s state grains buyer to purchase 120,000 tonnes of animal feed barley which closed on Wednesday, Sept. 28, traders said. But Jordan made no purchase in the international tender.
• WHEAT TENDER: Iraq’s state grains buyer has issued tenders to buy a nominal 50,000 tonnes of milling wheat, European traders said on Wednesday. The deadline for submission of price offers in the tenders is Oct. 10. The wheat can be sourced from optional origins but Russian wheat cannot be offered, they said.
• CORN TENDER: The Korea Feed Association (KFA) has issued an international tender to purchase up to 69,000 tonnes of animal feed corn to be sourced from optional origins

PENDING TENDERS

• WHEAT TENDER: Pakistan’s tender to buy 300,000 tonnes of wheat closed on Monday with the lowest offer believed to be $398.92 a tonne c&f, European traders said in initial assessments. Only one trading house, Agrocorp, was believed to have submitted offers. The state agency Trading Corporation of Pakistan (TCP) is still considering the offers and no purchase has been reported, traders said.
• WHEAT TENDER: Jordan’s trade ministry is seeking 120,000 tonnes of wheat shipped in March and April in an international tender closing Sept. 27, a government source said. Jordan’s state grains buyer opened the new tender after making no purchase in a Tuesday tender.
• WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy a total of 61,800 tonnes of food-quality wheat from the United States and Canada in regular tenders that will close on Thursday, Sept. 29.
• WHEAT TENDER: The World Food Programme, a United Nations agency, has issued an international tender to purchase about 100,000 tonnes of milling wheat, European traders said on Monday. The deadline for submission of price offers in the tender is Sept. 28 with an award expected on Sept. 30.
• MILLING WHEAT TENDER: Algeria’s state grains agency OAIC has issued an international tender to buy soft milling wheat to be sourced from optional origins, European traders said on Tuesday. The tender sought a nominal 50,000 tonnes, but Algeria often buys considerably more in its tenders than the nominal volume sought. The deadline for submission of price offers in the tender is Thursday, Sept. 29, with offers having to remain valid until Friday, Sept. 30.
• WHEAT TENDER: Jordan is seeking 120,000 tonnes of wheat in an international purchasing tender with a deadline for offers on Oct. 4, a government source told Reuters on Tuesday.

US BASIS/CASH

• Spot basis bids for soybeans and corn shipped by barge to U.S. Gulf Coast export terminals were mixed on Wednesday, while spot barge freight rates continue to rise as exporters aggressively scouted logistics capacity, traders said.
  • Low water on the lower Mississippi River is limiting vessel drafts so shippers need more barges to haul the same volume of grain, traders said.
  • That, in turn, has sent spot barge freight rates soaring, with rates in some areas hitting the highest level in at least a decade, according to industry data.
  • The rates on the Mississippi River at St. Louis were 1,400 to 1,600 percentage points for early October, while the lower Ohio River was as high as 1,700 percentage points – both up 400 percentage points or more from a week earlier
  • Basis bids for corn barges loaded in September rose 10 cents to 160 cents over December. Export premiums for October shipments were steady at around 148 cents over futures.
  • Soybean barges loaded through the end of September were bid about 11 cent lower on Tuesday, at 195 cents over November futures.
  • FOB basis offers for soybeans shipped in October were up 1 cent at around 196 cents over November futures
• Spot basis bids for soybeans and corn fell at river terminals around the U.S. Midwest on Wednesday as low water levels slowed shipments by barge.
  • Corn bids also were weaker at the region’s interior elevators and mixed at processors.
  • Soybean bids were flat at elevators and steady to sharply lower at processors, falling by 25 cents a bushel in Des Moines, Iowa.
  • Farmer sales were slow.
  • Most growers had already locked in prices for crops they will deliver during the harvest season.
  • Dealers also have booked contracts to satisfy most of their demand for the fall so had little incentive to tighten up basis levels to spark a fresh round of sales.
  • But a slow start to harvest has underpinned basis levels in areas where farmers have made scant progress with their field tasks.
• Spot basis bids for soybeans fell at interior elevators and river terminals around the U.S. Midwest early on Wednesday, grain dealers said.
  • But the soy basis was steady to firm at the region’s processors, rising by 20 cents a bushel at a large plant in Decatur, Illinois.
  • Soybean harvest was well behind the typical pace in Illinois, with only 2% of the crop harvested as of Sept. 25. That meant that deliveries of new-crop soybeans also were lagging, keeping crush supplies tight at processors.
  • Corn bids were steady to weak at interior elevators, processors and ethanol plants and mixed at facilities along the region’s rivers.
• Spot basis bids for hard red winter wheat were unchanged at truck and rail market terminals across the southern U.S. Plains on Wednesday, grain dealers said.
  • Country movement was light.
  • Most farmers in the region were busy with planting tasks.
  • A rally in the futures market that pulled cash prices higher was doing little to generate fresh selling interest from the growers, an Oklahoma dealer said.
  • Dry soils were already raising concerns about 2023 yields, so farmers were holding tightly to whatever they had left from their 2022 crop in case they needed it to cover shortfalls in next year’s harvest, the dealer added.
  • Protein premiums for wheat delivered by rail to or through Kansas City were unchanged for all grades of wheat, according to the latest CME Group data.
• Spot basis offers for soymeal were mostly flat at truck market processors around the U.S. Midwest on Wednesday.
  • The rail market was steady to weak, with offers falling by $20 per ton in Decatur, Alabama.
  • Demand was routine, with end users who were booking deals only buying enough to meet short-term needs, dealers said.
  • Livestock and poultry producers were hoping that prices will fall in the coming weeks as processors that are flooded with recently harvested soybeans boost their crushing pace.
  • Although the truck basis was mostly flat, offers fell by $2 per ton in Mankato, Minnesota.
  • A dealer in that area said that reports from early harvest showed that soybean yields were bigger than expected, a sign that most growers will find a bumper crop in their fields in the coming weeks.

GRAIN EXPORT SURVEY: Corn, Soy, Wheat Sales Before USDA Report

Estimate ranges are based on a Bloomberg survey of five analysts; the USDA is scheduled to release its export sales report on Thursday for week ending Sept. 22.

• Corn est. range 275k – 800k tons, with avg of 475k
• Soybean est. range 275k – 900k tons, with avg of 600k

DOE: US Ethanol Stocks Rise 0.8% to 22.691M Bbl

According to the US Department of Energy’s weekly petroleum report.

• Analysts were expecting 22.402 mln bbl
• Plant production at 0.855m b/d, compared to survey avg of 0.912m

Argentina Farms to Come Out of Strong La Nina in January: Bourse

A La Nina weather pattern that’s been parching farms in Argentina is gradually easing and will largely be a spent force by January, Buenos Aires Grain Exchange climatologist Eduardo Sierra said in webinar.

• “Things will start to improve in January”: Sierra
• The probability of a La Nina for October is 80%
  • The likelihood will reduce by 10 ppts every month through April, when it’ll be just 20%
  • That means a neutral weather pattern that brings more rain is gaining ground
• October-December will see only light rain on the Pampas crop belt
  • “It’s a severe drought. La Nina is coming to the end of its cycle but still has a lot of power”: Sierra
• The southern hemisphere summer will then be wetter, helping soybean and corn crops after the dry start
• More rains in the fall will ensure good soil moisture for planting of the 2023-24 wheat crop
• The 2023-24 season should bring the best weather in several years for Argentine crops

Argentina 22-23 Soy Output to Climb 11% to 48m Tons: Exchange

A shift to soybeans in the upcoming growing season will see Argentine farmers expand the area planted with the oilseed by 2.5% y/y to 16.7m hectares (41.3m acres), Martin Lopez, crop estimates analyst at the Buenos Aires Grain Exchange, says in a webinar.

• Production seen rising by 11% y/y to 48m metric tons
• Corn area for the new season kept at 7.5m ha, down 2.6% y/y
  • The bourse’s first corn production estimate is 50m tons, down 3.8% y/y
• Wheat production estimate set at 17.5m tons, down 22% y/y

India Extends Free Food Plan for 3 Months, to Spend $5.5 Billion

India extended its free food grains program for three months through Dec. 31 with additional expenditure of about 447.6 billion rupees ($5.5 billion), Information and Broadcasting Minister Anurag Thakur said.

• Government will provide 12.2 million tons of free food grains to 800 million people through the plan approved by the cabinet on Wednesday
  • The beneficiaries will get 5kg of rice or wheat per person per month
• Prime Minister Narendra Modi’s government would have to spend a total of 3.91 trillion rupees on distributing 112 million tons food grains since the program started in April 2020 until December this year
• The announcement comes during India’s festive season and coincides with elections in two major provinces later this year
• The cabinet also approved an increase in the dearness allowance, an inflation-linked payment, to federal government employees and pensioners that will cost 128.5 billion rupees per year
• Investment of 100 billion rupees for redevelopment of 3 major railway stations, including New Delhi and Mumbai, was also approved

Brazil soy crushers halt production as margins turn negative

Brazilian soybean processors have temporarily halted units as crushing margins turned negative, reflecting weak domestic demand for biodiesel and high vegetable oil inventories, analysts said on Wednesday.

Abiove, a trade group representing global oilseed crushers in Brazil, confirmed the move, noting some members advanced scheduled maintenance stoppages as soy oil prices dropped even as soybean prices remained high, hurting margins.

Victor Martins, risk manager at HedgePoint Global, said Brazil has over 99 soybean crushing plants, adding over 10 units had already been halted as global soy oil prices fell due to a spike in Indonesian palm oil stocks.

Both oils compete in export markets.

“Crushers have been caught off guard with a sudden soybean oil and soybean meal oversupply in the market, pressuring crushing margins to its lowest levels since July 2021,” he told Reuters.

Abiove could not comment on how much capacity has been shut, but said it may revise 2022’s soy processing forecasts as fresh crushing data come in reflecting changes in the market.

For now, Abiove still sees companies processing a record 48.9 million tonnes of soybeans this year, chief economist Daniel Amaral said.

Brazil was supposed to adopt a 14% biodiesel mix in diesel from March 2022, but kept it at 10% for all of 2022, frustrating the industry.

“The government not only should increase the mixture, but also signal a 15% blending for 2023,” Amaral said. “At this moment the industry should get a clear sign from policymakers.”

Eduardo Vanin, an analyst at Agrinvest, heard at least eight plants in five states had been halted due to bad margins and low demand for biodiesel, representing about 15,000 tonnes less of daily processing capacity in Brazil.

Brazil’s total daily crushing capacity is 202,300 tonnes per day, according to Abiove.

Conceivably, the halted plants could stay idle for about 30 days, or until demand for soy oil returns or products in storage start being moved, Vanin said.

Drought-Hit Mississippi River Puts US Farm Trade Flow at Risk

• Low water levels push barge rates up to highest since 2014
• River woes hit as harvest and fall fertilizer season speeds up

American farmers are facing yet another supply-chain headache just as harvest season gets into high gear: A shrinking Mississippi River.

The critical trade route for US crops and fertilizer used to grow them has had such a steep drop in water level that vessel traffic is being limited. Agriculture shipments are starting to stall and the fear is conditions could worsen, said Mike Steenhoek, executive director of the Soy Transportation Coalition.

The ebbing water flows have pushed barge prices to the highest in eight years right as the busiest season kicks off for key US crop exports. The world is in desperate need of the shipments to restock reserves diminished by Russia’s war in Ukraine. Fertilizer sent north from the US Gulf for growers to apply in preparation for next year’s crop is also under threat, raising the risk of price surges at a time of worsening food inflation.

“Rising barge rates will add another layer to farmers’ fertilizer expense in a year already beset by rising costs,” Bloomberg Intelligence analyst Alexis Maxwell said.

River levels in Cairo, Illinois, where the Ohio River flows into the Mississippi, are critically low and forecast to drop even further in October, according to US government data.

The Mississippi River is by far the largest domestic shipping channel for US soybean exports. The narrower route is already reducing the size of a single shipment by as much 38%, and the price for loading a barge of soybeans on the Upper Mississippi this week stands about 33% higher than a year ago, according to Steenhoek, citing US Department of Agriculture figures.

The slowdown comes as the trucking and rail industries also face supply-chain problems, potentially adding to the cost pressure on producers trying to profit after a tough season of weather setbacks and soaring inflation for fuel, fertilizer and other farm necessities.

“This is a time with harvest season when we need our supply chain to be operating on all cylinders,” Steenhoek said.

Fertilizer Prices Resist Knee-Jerk Reaction to Hurricane Ian

The phosphate-fertilizer market may take a few days to react to Hurricane Ian’s arrival over a key production area in Florida.

Prices for crop nutrients haven’t jumped even as the storm arrived in the state that’s home to Mosaic Co.’s phosphate rock assets, where they mine and process the the rock into fertilizers like diammonium phosphate and monoammonium phosphate, commonly known as DAP and MAP.

“Traders are waiting to see the impacts of the hurricane before making their next moves on futures,” said Taylor Eastman, fertilizer derivatives broker at Freight Investor Services in Kansas City, Missouri. “Of course everyone remembers what happened in 2017 with the production loss then, but we’re hearing from the trade it’s too soon to tell how this will impact supply going forward.”

 

This commentary is provided by ADM Investor Services, a futures brokerage firm and wholly owned subsidiary of ADM Company. ADMIS has provided expert market analysis and price risk management strategies to commercial, institutional and individual traders for more than 50 years. Please visit us at www.admis.com or contact us at sales@admis.com to learn more.

 

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