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

 

Wheat prices overnight are up 8 1/2 in SRW, up 6 3/4 in HRW, up 6 3/4 in HRS; Corn is up 2 1/2; Soybeans up 4 1/4; Soymeal up $0.25; Soyoil down 0.40.

For the week so far wheat prices are down 3/4 in SRW, down 1/2 in HRW, down 4 1/2 in HRS; Corn is up 2 3/4; Soybeans down 2 3/4; Soymeal down $0.63; Soyoil up 1.93.

For the month to date wheat prices are down 72 1/2 in SRW, down 44 in HRW, down 23 1/4 in HRS; Corn is up 10; Soybeans up 21 3/4; Soymeal up $8.20; Soyoil up 11.46.

Year-To-Date nearby futures are up 10% in SRW, up 18% in HRW, down -3% in HRS; Corn is up 16%; Soybeans up 5%; Soymeal down 0%; Soyoil up 30%.

 

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Chinese Ag futures (JAN 23) Soybeans down 11 yuan; Soymeal unchanged; Soyoil down 24; Palm oil up 28; Corn up 3 — Malaysian palm oil prices overnight were up 30 ringgit (+0.73%) at 4151.

There were changes in registrations (-57 Soyoil). Registration total: 3,080 SRW Wheat contracts; 0 Oats; 0 Corn; 5 Soybeans; 39 Soyoil; 288 Soymeal; 40 HRW Wheat.

Preliminary changes in futures Open Interest as of October 26 were: SRW Wheat up 406 contracts, HRW Wheat up 340, Corn up 15,980, Soybeans down 31,309, Soymeal up 3,159, Soyoil up 2,288.

Northern Plains Forecast: Isolated showers south Thursday. Mostly dry Friday-Saturday. Temperatures Thursday, near to above normal Friday-Saturday. Outlook: Mostly dry Sunday-Monday. Scattered showers Tuesday-Thursday. Temperatures above normal Sunday-Tuesday, near to above normal Wednesday, near to below normal Thursday.

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

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

Eastern Midwest Forecast: Mostly dry Thursday-Saturday. Scattered showers Sunday. Temperatures near to below normal Thursday-Friday, near to above normal Saturday, above normal Sunday. Outlook: Isolated showers east Monday. Mostly dry Tuesday-Wednesday. Scattered showers Thursday-Friday. Temperatures above to well above normal Monday-Thursday, near to above normal Friday.

The player sheet for Oct. 26 had funds: net buyers of 2,000 contracts of SRW wheat, sellers of 1,000 corn, buyers of 0 soybeans, sellers of 3,000 soymeal, and  buyers of 4,000 soyoil.

TENDERS

• VEGETABLE OILS PURCHASE: Egypt’s state grains buyer GASC bought 14,000 tonnes of soyoil in an international tender, it said. Traders said the soyoil was offered by Aston at a price of $1,587 a tonne C&F.
• WHEAT PURCHASE: The Taiwan Flour Millers’ Association purchased an estimated 38,515 tonnes of milling wheat to be sourced from the United States in a tender which closed on Thursday
• BARLEY TENDER PASSED: Jordan’s state grain buyer is believed to have made no purchase in an international tender for 120,000 tonnes of animal feed barley which closed on Wednesday
• BARLEY TENDER: Jordan’s state grains buyer issued a new international tender to purchase 120,000 tonnes of animal feed barley, an official source said.
• WHEAT TENDER UPDATE: The lowest price offered in the tender from Pakistan to purchase 500,000 tonnes of wheat that closed on Wednesday was believed to be $373.00 a tonne c&f
• WHEAT TENDER: A group of South Korean flour mills issued a tender to purchase an estimated 128,000 tonnes of milling wheat to be sourced from the United States, Australia and Canada

PENDING TENDERS

• SUGAR TENDER: Egypt’s state grains buyer, the General Authority for Supply Commodities, is seeking 50,000 tonnes of raw sugar of any origin on behalf of the Egyptian Sugar & Integrated Industries Company.
• WHEAT TENDER UPDATE: Iraq changed the closing date of its international tender for 50,000 tonnes of wheat to Oct. 30 from Oct. 24
• WHEAT TENDER: Jordan’s state grain buyer issued an international tender to buy 120,000 tonnes of milling wheat

US BASIS/CASH

• Spot basis bids for soybeans and corn shipped by barge to U.S. Gulf export terminals softened on Wednesday as freight costs slipped in a few areas, although extremely low water levels on Midwest rivers continued to stall barge traffic, traders said.
  • Rains on Tuesday brought limited relief. A gauge on the Mississippi River at St. Louis rose more than 3 feet (91 centimeters) between Monday afternoon and Tuesday night, National Weather Service data showed, but increases were more modest at other locations such as Memphis, Tennessee.
  • Supplies of empty barges remain tight, barge sources said, with few offers available for this week. Yet offers for spot barges declined in some areas. Barges on the Lower Ohio River were offered at 2,700% of tariff, down from 2,800% a day earlier, and Illinois River barges were offered at 2,300% of tariff, down from 2,400% previously.
  • CIF soybean barges loaded in October were bid around 230 cents over November futures, down 10 cents from Tuesday, and November-loaded barges were bid at 205 cents over futures, down 5 cents.
  • Export premiums for soybeans shipped in first-half December held at around 250 cents over November futures while premiums for January shipments fell by 5 cents, at 205 cents over futures.
  • For corn, barges loaded in October were bid around 205 cents over December, down 15 cents from Tuesday. November corn barges traded at 180 cents over futures and were re-bid at 170 cents over, down a nickel from Tuesday’s last bid.
  • First-half December corn export premiums were nominally quoted around 225 cents over futures, unchanged from Tuesday, while January loadings held at around 160 cents over futures.
• Spot basis bids for corn were sharply down in parts of the eastern U.S. Midwest on Wednesday, as farmers raced to reap their crops amid what has been a compressed harvest window.
  • One Ohio dealer said that farmers had been delivering their corn crops coming out of the fields, but that end-user demand had somewhat chilled.
  • However, in the west, corn bids firmed as drought continued to impact harvest and some elevators and processors sought supplies.
  • Soybean bids remained steady around the interior, dealers said, but slipped along some river regions, as low water levels continued to hamper barge shipments to export terminals at the U.S. Gulf.
• Spot basis bids for hard red winter wheat were unchanged at rail and truck grain terminals across the southern U.S. Plains on Wednesday, dealers said.
  • Though recent rains came as a boon to some drought-plagued areas, dealers said farmers remained reluctant to sell their crop on hopes that prices would continue to rise.
  • Premiums for wheat delivered by rail to or through Kansas City rose by 40 cents a bushel for wheat with protein content ranging from 11% through 11.4%, according to CME Group data.
  • Premiums rose 5 cents a bushel for ordinary protein wheat, and wheat with protein content ranging from 11.6% through 12.6%.
  • Premiums also rose 15 cents a bushel for wheat with protein content of 12.8%; and was up 25 cents a bushel for protein content of 13% and higher.
• Spot basis bids for corn and soybeans generally eased at elevators around the U.S. Midwest on Wednesday morning, as farmers began wrapping up their bean harvest and are well-entrenched in harvesting their corn crops.
  • However, corn and soybean bids were mixed at processors.
  • Some processors in recent days have been trying to lure farmers to deliver their newly harvested crops with higher bids, in order to maintain crop supplies.
  • The basis was steady to higher at ethanol plants.
  • New farmer sales of grain was relatively light, one dealer said, as farmers are focused on pulling their crop out of their fields and delivering previously booked grain loads to buyers.
  • Ongoing strength in soymeal and soyoil profit margins continues to keep demand firm for supplies by processors.
• U.S. spot cash millfeed values were steady to lower at midweek, falling in some markets where increased flour mill output outweighed demand from animal feed mixers, ingredient brokers said.
  • Spot offers were down $40 per ton from last week in the Buffalo, New York, truck market and down $30 in the “central states” region spanning Ohio and neighboring states. “Some mixers are trying to sell back feed,” one source said.
• Spot basis offers for soymeal firmed at U.S. Midwest rail market processors on Wednesday, amid ongoing logistical snarls, dealers said.
  • Offers were steady to slightly down in the truck market on relatively flat demand, one dealer said.
  • Spot offers on the export front remained flat, but deferred offers firmed again.

DOE: US Ethanol Stocks Rise 2.0% to 22.291M Bbl

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

• Analysts were expecting 21.887 mln bbl
• Plant production at 1.033m b/d, compared to survey avg of 1.017m

Signalmen Union Nixes Rail Deal, Raising Specter of Strike

The National Brotherhood of Railway Signalmen has voted to reject a five-year contract with the nation’s largest rail companies, reviving the threat of a nationwide strike.

Union members overwhelmingly torpedoed the collective bargaining proposal, which offered a 24% wage increase and more flexible sick time but fell short of unions’ demands. It came as part of a deal brokered by the Biden administration last month to avert a nationwide shutdown. More than 60% of the membership voted against the proposal, the union said Wednesday.

“For the first time that I can remember, the BRS members voted not to ratify a National Agreement, and with the highest participation rate in BRS history,” union President Michael Baldwin said in a statement, in which he criticized a “lack of good-faith bargaining” by the railroads.

The rejection won’t immediately trigger a strike. The parties agreed to a status quo period until early December, preventing the unions from walking off the job, according to the National Carriers’ Conference Committee, which represents freight-rail companies.

“We are disappointed that the Brotherhood of Railroad Signalmen (BRS) has failed to ratify the recent tentative agreement with the nation’s freight railroads, delaying the benefits of the tentative agreement for BRS-represented employees and further extending resolution of the bargaining round with BRS,” the NCCC said in a statement Wednesday.

Five more unions are scheduled to vote on contract proposals by mid-November. A sixth union, the Brotherhood of Maintenance Way Employes, rejected the agreement earlier this month and is renegotiating terms.

The US rail system is highly integrated and specialized, meaning any one union could shut the system down by walking off the job. The BRS represents more than 10,000 workers who maintain electronic signals directing train traffic.

At the center of the dispute are rail companies’ sick time policies, which unions say are inadequate. Baldwin, in his statement, called it a “basic right” denied.

But the NCCC said in its statement that workers “can and do take time off for sickness and already have paid sickness benefits” beginning after four days of a medical absence.

Canadian Pacific Says US River Woes an ‘Opportunity’ for Rail

Dwindling water levels on the Mississippi River could lead more US grain shipments to be transported by rail, according to executives at Canadian Pacific Railway Ltd.

River closures and the low water levels have limited vessel drafts, slowing exports of corn and soybeans amid the critical harvest season for farmers. The US Army Corps of Engineers has dredged parts of the Mississippi to open up channels.

“Near-term, this is going to provide itself to be a rail opportunity,” John Brooks, chief marketing officer of Calgary-based Canadian Pacific, said on the company’s earnings call Wednesday. That opportunity includes grain transports to the Gulf of Mexico.

China’s Shortage of Pig Feed Set to Ease on Looming Soy Imports

China is reeling from a nearby shortage of soybean meal, an important ingredient for hog feed, which is shown by a hefty backwardation in the futures market on the Dalian Commodity Exchange.

Futures for November delivery settled at 4,884 yuan ($676) a ton Thursday, about 800 yuan higher than prices for January. Chinese processors slowed buying of foreign soybeans during the summer when crush margins turned negative, curbing arrivals. Shallow water in the Mississippi River because of drought has also limited prospects for US exports and worsened the crunch.

Demand for soybean meal has also shown a seasonal improvement as farmers fatten their hogs for winter and festivals such as Lunar New Year in January.

China accounts for about 60% of the world’s soybean imports. The domestic shortage has also pushed spot physical prices of soybean meal in Shandong and Guangdong to the highest on record in data going back about two decades.

Still, more soybean cargoes are expected to head for China after the country stepped up purchases from leading producers as crush margins bounced back. China could also buy more from Brazil and Argentina during the peak US export season if the low levels of the Mississippi River continue to hamper shipments.

Brazil Soy Farmers Halt Advance Sales in Gamble on La Nina Boost

• Growers hold forward sales betting drought may curb production
• Lack of silos may force growers to sell at the same time

Farmers in Brazil, the world’s largest soybean exporter, are gambling on La Nina to boost profits.

Advanced sales for the next soy crop are halted as farmers await higher prices, according to Luiz Fernando Roque, an analyst at consulting firm Safras & Mercado. Growers are betting that a third consecutive year of La Nina may cause drought losses in Brazil’s far south and in Argentina, boosting futures prices, he said.

The strategy isn’t without risks: a bumper harvest and storage shortages could end up favoring buyers, undermining the position of farmers and driving down global prices of ubiquitous oilseed that’s used around the world for food, cooking oil, animal feed and biofuels.

Unlike prior years, Brazilian farmers are cash handy and don’t need to rush to sign forward sales agreements to pay for planting costs. There are low incentives to sell in advance as offers on the spot market are above futures contracts.

Brazil’s low storage capacity may force growers to flood the market with soy when the pace of harvesting picks up in December, driving prices down. Unlike the US, where most farmers own their silos, most small and medium-sized Brazilian producers harvest and immediately deliver their grains because they lack their own storage.

That means Brazilian farmers need to have a large portion of their production sold at the harvest. If volumes are big, such selling could pressure prices and favor trading powerhouses such as Bunge Ltd. Cargill Inc. and Archer-Daniels-Midland Co. that have strong operations in the South American nation.

ADM said this week that Brazilian soy farmers have sold 19% of this season’s expected production, down from 28% in the previous season and below the five-year average.

Brazil produces more grains than it can store. The country is expected to harvest 152 million tons of soybeans and 126 million tons of corn next year, according to US Department of Agriculture estimates, even though the country has a grain storage capacity of 181 million tons, with only 27.6 million tons capacity at farms.

Argentina Exporters Won’t Oppose Govt Move to Ensure Local Wheat

Argentina exporters won’t oppose a possible government resolution to postpone shipments of wheat over the next three months, said a person with direct knowledge of the matter.

• NOTE: The government is eyeing such a policy move to ensure domestic supplies as a drought cripples production
• Exporters will show goodwill because the severity of the drought was unforeseen, but they want the government to publish the resolution as soon as possible to give them plenty of time to renegotiate deliveries with buyers
• No fewer than 2m metric tons of shipments scheduled over the next three months would have to be delayed
• NOTE: With the Rosario Board of Trade now estimating production of the upcoming harvest at just 13.7m tons and traders already registering 8.85m for export, that leaves domestic millers way short of the 6m a year they require on average
• NOTE: Exporters are also over-exposed because farmers worried about how little they may harvest aren’t locking in sales

Rains give Argentine soy a needed boost as planting begins

Much-needed rain brought timely relief to drought-plagued farmlands in Argentina’s main agricultural region on Wednesday, experts said, boosting prospects just as planting begins for the country’s critical soybean crop.

Up to 100 millimeters (3.9 inches) of water fell in some areas in the past 24 hours, with much of the country’s most important farmlands receiving at least 30 millimeters, according to the Argentine National Meteorological Service.

“In general, the rainfall was very good,” German Heinzenknecht, a meteorologist at Applied Climatology Consulting (CCA), told Reuters, adding that the “clear winners” were areas west of Buenos Aires, southeast of Cordoba and southwest of Santa Fe.

A drought beginning in May has forced the country’s main grains exchanges to reduce their wheat harvest estimates to 13.7 million tonnes, from more than 22 million in the previous cycle, and has generated significant delays in corn planting, which began last month.

But while the rains are overdue for much of farmers’ corn and wheat crops, they are right on time for soybeans, said Cristian Russo, an analyst at the major Rosario Grains Exchange, and some lots intended for corn will now be sown with soybeans.

Argentina is the world’s leading exporter of soybean oil and meal, which provide a source of sorely needed foreign currency.

“Surely this is going to kick off the planting,” Russo noted, warning however that in many places there is still not enough water.

Rains expected for this weekend are likely to be insufficient, Heinzenknecht added, with late frosts possible on Monday in some farming areas.

The Rosario exchange earlier this month forecast the current soybean crop to reap a harvest of 48 million tonnes, above the 42.2 million tonnes in the previous cycle.

Argentine wheat harvest forecast slashed again amid drought

Argentina’s 2022/23 wheat harvest will come in at 13.7 million tonnes, the Rosario grain exchange said on Wednesday, a sharp cut from its previous forecast of 15 million tonnes amid a protracted drought that has hammered farmers in the country.

Argentina is a major international supplier of wheat, a role that has come into greater focus amid Russia’s invasion of Ukraine that has dented global grains supply. Ukraine and Russia are both major wheat producers.

But the South American nation has faced several months of dry weather and late frosts that have hit wheat yields hard, with the harvest set to be the worst in seven years and well below the record 23 million tonnes a year earlier.

The Rosario and separate Buenos Aires grains exchange have both repeatedly cut their forecasts for wheat production over the last month.

“There is an unprecedented drought,” said Cristian Russo, a Rosario agronomist, adding that more than half of the province of Buenos Aires, the main farming region in Argentina, was suffering the lowest level of water reserves in 30 years.

A production of 13.7 million tonnes of wheat would be the lowest since 10.9 million tonnes in the 2015/16 campaign.

“We are beginning to realize that we have to adjust lost area,” Russo added, indicating that 9.2% of the area planted with 2022/23 wheat will not be harvested due to its poor condition, from the 6.6% previously forecast.

Just over 70% of Argentina’s 2021/22 soybean crop sold so far – government

Soybean producers sold 70.3% of Argentina’s 2021/22 crop through last week, the agriculture ministry said on Wednesday.

The portion of the soybean crop sold to date underperforms the 74.2% sold during the same period in the 2020/2021 season.

Argentina, the world’s top exporter of processed soy, harvested 44 million tonnes in the 2021/2022 soybean season.

Producers sold 164,900 tonnes of the harvest between October 13-18, far below the 750,000 tonnes sold in same period last year, though a temporary soy export boom last month makes comparison difficult.

After the government announced a preferential “soy dollar” exchange rate, soy exports in September jumped to 13.3 million tonnes, far above the historical monthly average of 4.4 million tonnes.

The agriculture ministry also reported that 69.4% of Argentina’s 59-million-tonne corn harvest had been sold, above the 67.6% sold at the same point last year.

Corn planting for the 2022/23 cycle began last month, although drought delayed planting and contributed to the smallest planted area in six years, according to the Rosario Grains Exchange.

The exchange on Wednesday slashed its forecast for Argentina’s wheat harvest to 13.7 million tonnes from 15 million. Through last week, producers sold 73,200 tonnes of the 2022/2023 season.

U.N. aid chief ‘relatively optimistic’ on Black Sea grain deal

United Nations aid chief Martin Griffiths said on Wednesday that he was “relatively optimistic” that a U.N.-brokered deal that allowed a resumption of Ukraine Black Sea grain exports would be extended beyond mid-November.

Griffiths traveled to Moscow with senior U.N. trade official Rebeca Grynspan earlier this month for discussions with Russian officials on the deal, which also aims to facilitate exports of Russian grain and fertilizer to global markets.

Under the July 22 agreement, Ukraine was able to restart its Black Sea grain and fertilizer exports, which had stalled when Russia invaded its neighbor on Feb. 24. The Ukraine export deal was initially agreed for 120 days.

“We are keen to see that renewed promptly, now. It’s important for the market. It’s important for just continuity. And I’m still relatively optimistic that we’re going to get that. We’re working hard,” Griffiths told reporters.

The United Nations is working to extend the deal for up to a year and smooth the joint inspections of ships by U.N., Turkish, Russian and Ukrainian officials. The United Nations recently warned there was a backlog of more than 150 ships.

“I think we should have another look at some of those (procedures) to see if they may be simplified in some way,” Griffiths said.

A U.N. official has also suggested that Ukraine could seek to expand the export deal to include another port: Mykolaiv.

Russia has criticized the deal, complaining that its own exports were still hindered and not enough Ukraine grain was reaching countries in need.

Russia’s U.N. Ambassador Vassibly Nebenzia cited issues with ship insurance, transactions and port calls, telling reporters on Wednesday: “We recognize that the secretary-general and his team are trying to do their best to resolve those issues, but unfortunately it’s not just on them that it depends upon.”

Moscow could object to extending the pact on Ukraine’s exports beyond late November.

“This agreement was signed by all people on the basis that it’s a commercial enterprise,” Griffiths said.

“We would not have the volume if it hadn’t been a private sector-driven enterprise. Everybody knows this – Russia, Ukraine, Turkey and us knew that that’s the basis of the operation,” he said. “It was not intended at the time to be an operation which was all humanitarian.”

He said the deal had brought down prices, boosted export quantities and improved confidence, adding that it was “doing what we negotiated, and I don’t think anybody need have any doubt about that.”

Indonesia to Boost Food Commodity Stockpiles to Maintain Price

Indonesia will build stockpiles of 11 food commodities that include corn, soybean, white sugar, and cooking oil to ensure enough supply and keep prices affordable for consumers, according to President’s Regulation posted on cabinet secretary’s website.

• At initial stage, the government will assign Bulog and other state-owned companies to build a “dynamic” stockpile of rice, corn and soybean, Arief Prasetyo Adi, head of National Food Agency by phone on Thursday
  • Currently, Bulog manages the govt’s rice reserves
• Reserves of about 1%-2% of national demand for staple foods will be managed by state-owned companies such as Rajawali Nusantara Indonesia
  • Agency to determine who will manage stockpiles of other commodities such as sugar, cooking oil, meat, poultry and eggs, chili, shallots and fishes at a later date
  • The agency is mapping demand for the commodities, gathering data on production levels and suggested dietary recommendation

Strong Dollar May Deepen Food and Energy Crises, World Bank Says

• Poor nations not seeing relief from falling commodity prices
• Local prices remain high because of strengthening dollar

A strong US dollar could worsen food and energy problems in developing nations even as the prices of grains, crude oil and other essential commodities fall from recent highs.

While worry about a worldwide economic slowdown has sent futures tied to key goods lower, the dwindling value of currencies in many economies has kept local prices high, the World Bank said.

“This could deepen the food and energy crises already underway in a number of countries,” according to the Washington-based lender’s Commodity Markets Outlook report released on Wednesday.

The dollar last month soared to new heights against a basket of foreign currencies. That means that even though Brent crude priced in the greenback fell almost 6% from February to September, more than half of oil-importing emerging markets saw higher prices in the same period because of currency depreciations, according to the report. And almost all of them experienced a steeper increase in wheat prices in local currency terms compared to the gain in the US dollar.

World Bank Price Outlook:

• After surging by an expected 60% in 2022, energy prices are seen dropping 10% next year and another 12% in 2024
  • Prices still are seen staying more than 50% above their five-year average through 2024
• Agricultural prices are forecast to fall by 5% in 2023 before stabilizing in 2024
• Following an estimated decline of nearly 2%, metal prices are projected to fall more than 15% next year before stabilizing in 2024

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