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IKAR in Mass Media

TFM Morning Update 09-02-2022

05 сентября 2022 года

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

Wheat prices overnight are up 12 1/4 in SRW, up 11 3/4 in HRW, up 12 1/4 in HRS; Corn is up 5 3/4; Soybeans up 13 3/4; Soymeal up $0.40; Soyoil up 0.38.

For the week so far wheat prices are up 1 1/4 in SRW, down 2 1/2 in HRW, down 10 3/4 in HRS; Corn is down 1/2; Soybeans down 53 1/2; Soymeal down $0.92; Soyoil down 2.91.

For the month to date wheat prices are down 25 in SRW, down 32 3/4 in HRW, down 30 3/4 in HRS; Corn is down 6 3/4; Soybeans down 14; Soymeal up $4.20; Soyoil down 3.51.

Year-To-Date nearby futures are up 1% in SRW, up 9% in HRW, down -11% in HRS; Corn is up 12%; Soybeans up 11%; Soymeal up 11%; Soyoil up 21%.

Chinese Ag futures (JAN 23) Soybeans up 13 yuan; Soymeal up 14; Soyoil down 372; Palm oil down 378; Corn unchanged — Malaysian palm oil prices overnight were down 65 ringgit (-1.63%) at 3929.

There were changes in registrations (20 Soymeal). Registration total: 3,084 SRW Wheat contracts; 1 Oats; 0 Corn; 0 Soybeans; 61 Soyoil; 20 Soymeal; 40 HRW Wheat.

Preliminary changes in futures Open Interest as of September 1 were: SRW Wheat down 620 contracts, HRW Wheat down 1,421, Corn down 6,175, Soybeans up 2,650, Soymeal down 1,155, Soyoil down 4,243.

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

Central/Southern Plains Forecast: Isolated showers through Monday, mostly in Texas. Temperatures near to above normal north and near to below normal south through Monday. Outlook: Isolated showers south Tuesday-Friday. Scattered showers Saturday. Temperatures near to above normal north and near to below normal south Tuesday, near to above normal Wednesday-Saturday.

Western Midwest Forecast: Isolated showers Friday-Sunday. Mostly dry Monday. Temperatures near to above normal through Monday.

Eastern Midwest Forecast: Mostly dry Friday. Isolated showers Saturday-Monday. Temperatures near to above normal through Monday. Outlook: Mostly dry Tuesday-Friday. Scattered showers Saturday. Temperatures above normal Tuesday-Saturday.

The player sheet for Sept. 1 had funds: net sellers of 10,000 contracts of SRW wheat, sellers of 10,500 corn, sellers of 9,500 soybeans, sellers of 0 soymeal, and sellers of 10,000 soyoil.

TENDERS

• CORN SALE: Buyers in Indonesia on Wednesday purchased around 65,000 tonnes of food-quality corn expected to be supplied from either the United States or South America
• WHEAT SALE: Japan’s Ministry of Agriculture, Forestry and Fisheries bought 95,497 tonnes of food-quality wheat from the United States and Canada in regular tenders that closed on Thursday.
• WHEAT SALE: Algeria’s state grains agency OAIC is believed to have bought about 105,000 tonnes of milling wheat in an international tender which closed on Tuesday which was limited to shipment to two Algerian ports
• WHEAT SALE: Egypt’s state grains buyer, the General Authority for Supply Commodities, is believed to have bought 120,000 tonnes of Russian wheat via direct talks with suppliers, traders said.
• FEED WHEAT SALE: South Korea’s Major Feedmill Group purchased about 63,000 tonnes of animal feed wheat expected to be sourced from Australia in a private deal on Wednesday without issuing an international tender
• SOYMEAL SALE: Three South Korean import groups purchased about 120,000 tonnes of soymeal expected to be sourced from South America, the United States and China in private deals on Thursday without international tenders being issued
• SOYBEAN SALE: The U.S. Department of Agriculture confirmed private sales of 396,000 tonnes of U.S. soybeans for shipment to unknown destinations in the 2022/23 marketing year.

PENDING TENDERS

• RICE TENDER: Bangladesh’s state grains buyer issued an international tender to purchase 50,000 tonnes of rice
• SOYBEAN TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued international tenders to purchase around 30,000 tonnes of soybeans free of genetically modified organisms
• BARLEY TENDER: Jordan’s trade ministry is seeking 120,000 tonnes of barley in a tender, a government source said. The deadline for submission of offers is Sept. 7 for shipment during February and March
• CORN TENDER: Taiwan’s MFIG purchasing group has issued an international tender to buy up to 65,000 tonnes of animal feed corn which can be sourced from the United States, Brazil, Argentina or South Africa
• WHEAT TENDER: Bangladesh’s state grains buying agency postponed the deadline for submission of price offers in its international tender to purchase 50,000 tonnes of wheat from Sept. 1 to Sept. 18

US BASIS/CASH

• Basis bids for soybeans shipped by barge to U.S. Gulf Coast export terminals firmed for a second day on Thursday on strong demand and rising barge freight rates, traders said.
  • Concerns about tight supplies of export-grade soybeans after ripe Delta crops received heavy rain has further propped up nearby bids. Exporters in need of beans to meet sales commitments were forced to bid up for higher-quality supplies remaining in storage in the Midwest, traders said.
  • Soybean barges loaded in August were bid around 360 cents over November futures, up 10 cents from late Wednesday. September soy barge bids rose 5 cents to 215 cents over futures.
  • Soybean export premiums were firm. Premiums for late October shipments were quoted 5 cents higher at 215 cents over November.
  • Corn barge basis bids were steady to firm on higher barge freight costs and tight spot supplies.
  • CIF barges loaded in September were bid a penny higher at 109 cents over September futures. October barges traded at 104 cents over futures, up 2 cents from bids late on Wednesday.
  • September corn export premiums gained 2 cents to 150 cents over futures.
• Spot basis bids for corn fell sharply at U.S. Midwest river terminals on Thursday, grain dealers said, with light demand from exporters at the U.S. Gulf weighing on values.
  • The corn basis was weak at interior processors and elevators west of the Mississippi River and flat at locations in the eastern half of the region.
  • Soybean bids continued to climb at river terminals, with a flurry of sales announced by the U.S. Agriculture Department underpinning the basis.
  • Cash bids for soybeans were unchanged at processor and interior elevators.
• Spot basis bids for hard red winter wheat rose at truck market elevators in Kansas on Thursday, underpinned by slow farmer sales in recent weeks, grain dealers said.
  • The cash basis for wheat was flat at grain terminals in Oklahoma and Texas. Country movement remained light across the southern U.S. Plains, a dealer in Oklahoma said.
  • Protein premiums for wheat delivered by rail to or through Kansas City were weaker, falling by 5 cents a bushel for all protein grades, according to the latest CME Group data.
• Spot cash millfeed values were steady to firm around the United States on Thursday as tight supplies and good demand kept a floor under prices, brokers said.
  • Flour mill downtime before and after the U.S. Labor Day holiday on Monday limited millfeed output and underpinned prices. A large Buffalo, New York, area mill is due to be down all of next week, a broker said.
  • Some mills were not quoting prices for next week because they have already sold all available supplies, a broker said.
  • High corn prices, meanwhile, boosted demand for deferred shipments of millfeed. Corn competes with millfeeds for space in animal feed rations.
• Spot basis offers for U.S. soymeal rose at processors in Iowa on Thursday, dealers said.
  • The basis was flat at other truck and rail market processors.
  • High cash prices were keeping most potential buyers out of the market unless they had immediate feeding needs to fill, dealers said.
  • Dealers continued to roll their basis offers to the October soymeal futures contract September contract, which is in the delivery period and expires on Sept. 14.
  • But many dealers planned to keep their offers against the September contract for as long as possible since it was trading at a premium of more than $36 to the October contract, a rail broker said.

US Soybean Crushings at 181M Bushels in July: USDA

USDA releases monthly oilseed report on website.

• Crushing 9% higher than same period last year
• Crude oil production 9.4% higher than same period last year
• Crude and once-refined oil stocks up 7.6% y/y

Saskatchewan Says Harvest Progress Lags Five-Year Average

Harvest is 23% complete as of Aug. 29, trailing the five-year average of 26%, the province’s agriculture ministry says Thursday in a report.

• Much of the province received rain in the last week and in some areas rainfall was heavy enough to lodge crops and further delay harvest
• There have been multiple reports of grain samples being denied at elevators due to grasshoppers
• Producers will have to clean their grain thoroughly before taking it to the elevator to sell

Ukraine’s Winter Grain Planting May Drop by Half: Lobby Group

Ukraine’s planted areas for winter grains may fall by half this year after the Russian invasion deprived farmers of land, equipment and cash, according to the Ukrainian Agri Council lobby group.

A year earlier, Ukrainian farmers planted winter crops across 8.4 million hectares (20.8 million acres), including 6.2 million hectares of wheat, 0.9 million hectares of barley and 1 million hectares of rapeseed, according to the Agriculture Ministry’s data.

The sowing of winter wheat, rapeseed and barley is gaining pace now that grain exports from Ukrainian sea ports have resumed and provided cash flow for farmers, Andriy Dykun, the head of the council, said at a briefing on Thursday. Another incentive was support from the government, which extended its guarantees on bank loans for farmers.

Harvesting and sowing is complicated in liberated areas of eastern and northern Ukraine where the Russian army planted mines and destroyed farming equipment and is still under question in territory occupied by Russia.

Quarter of Argentina Wheat Planting Area Faces Poor Conditions

Nearly one quarter of Argentina’s wheat planting area is facing poor conditions including lack of rain, increased temperatures and frost, according to a report from the Buenos Aires grains exchange.

• The exchange expects lower yields and smaller planting areas in 23.7% of Argentina’s total wheat planting area
• Scarce to moderate rain is expected over the central and southern agricultural area in the first two weeks of September, which could help prospects for recovery

USDA Revises Up US 2022 Net Farm Income Estimate by $34B

The USDA expects farmer profits to be $148b in 2022, much higher than its previous est. made in February, according to the agency’s Farm Income and Financial Forecasts report, released on Thursday.

• This would be 5.2% higher than 2021 net income
• Gross income est. adjusted upward by $60b from February, outweighing a $26b upward revision of expenses
• Income from crops and livestock raised by a combined $63b

StoneX Cuts Brazil Summer Corn Outlook, Still Sees Record

Brazil’s 2022-23 summer corn crop estimate was cut to 29.85m tons, almost 500,000 tons less compared to previous estimate from August, StoneX says in report.

• Lower demand for seeds indicates a reduction in planting area in Minas Gerais state, market intelligence specialist Ana Luiza Lodi says in report
• As most of supply depends on the second crop, total production will depend on winter planting
• Second corn crop estimates for 2021-22 season unchanged at 93m tons
• Corn inventories seen at 13.66m tons
• Soybean crop estimate seen 1m tons higher at 153.6m tons
• Risk of drought due to La Nina is a concern for planting
• Soybean exports forecast affirmed at 100m tons

StoneX Lowers US Corn Production Outlook From Previous Month

US corn yields est. at 173.2 bu/acre, production at 14.168b bu, according to September survey from brokerage StoneX.

• That’s below last month’s call for 176 bu/acre corn yield, 14.417b bu production
• It is also under USDA estimates and above the forecast issued last week by the Pro Farmer crop tour
• StoneX sees corn yield in Iowa, the top US producing state, at 203 bu/acre vs 207 last month
• Read more: Smallest US Corn Crop Since 2019 Signals Higher Food Costs Ahead
• The brokerage trimmed its soybean outlook from August to a yield of 51.8 bu/acre and production of 4.515b bu

Russian Wheat Shipments Falter While Ukraine Ramps Up Exports

• Shipping lines, banks and insurers are wary of Russian grain
• Russia ships 22% less wheat this season; Ukraine ports reopen

Russia is struggling to export its record wheat crop, just as the opening of a safe corridor supports an uptick in shipments from the country it invaded just over six months ago.

Shipments from Russia in July and August, the first two months of the new season, fell 22% to 6.3 million tons from a year earlier, according to ship lineup data from Logistic OS. Last month, Ukraine restarted shipments, exporting 1.5 million tons of food through the grain corridors established under a deal brokered by the United Nations and Turkey.

While the cargoes from Ukraine’s Black Sea ports are little more than a quarter of pre-war volumes, the government hopes shipments will pick up in the coming months. By contrast, the slow pace of Russian wheat exports is adding pressure to global supplies as harvests elsewhere are hit by drought. Food was exempted from western sanctions, but bankers and insurers are cautious about doing business with Russia and shipping lines are wary of sending their vessels into a war zone.

“We have reputational risk or informal sanctions,” Dmitry Rylko, general director of Moscow-based institute IKAR, said in an interview. “They cause problems with finding vessels for Russia Black Sea, and we see some banks don’t want to open letters of credit for wheat of Russian origin.”

Since the start of the new season, Russian shipments are no longer constrained by an export quota that was in place for the second half of the previous season to protect domestic supplies. Now the government is complaining about restrictions on trade, even after the EU and US stressed that food is not targeted by sanctions.

“Despite the statements made by Washington and Brussels that anti-Russian sanctions do not apply to food and fertilizers, the blocking obstacles to bank settlements, insurance and transportation of goods that have arisen as a result of their introduction still remain,” Russia’s foreign ministry said last week.

Russian farmers are also reluctant to sell wheat as a strong ruble and high export tax make it less attractive, while IKAR said some European customers weighted their orders to earlier in the year.

Ukraine Rebound

Russia and Ukraine signed a deal in July to release millions of tons stuck in Black Sea ports. The first cargoes were carried by vessels trapped in Odesa and two other Black Sea ports, while another 1.15 million tons of grain was shipped by rail in the first 23 days of August, according to Ukragroconsult.

Still, it remains to be seen whether shipments can be accelerated further as Ukrainian forces mount a counter-offensive in the south of the country. Before the war, 5 to 6 million tons of grain were typically dispatched monthly via its Black Sea ports.

The United Nations, which brokered the deal to end the logjam at Ukrainian ports, has emphasized the importance of Russian fertilizers and agricultural commodities making it to customers.

Russian exports are starting to speed up slightly, something that’s essential to the global wheat market, according to Agritel. IKAR expects shipments to rise to 4 million tons in September, though that would still be behind the 4.7 million tons exported a year earlier.

“The wheat production of the five major exporters outside the Black Sea is barely progressing compared to last year,” Agritel analyst Nathan Cordier said at a briefing on Tuesday. “It will not allow them to cover a failure of Ukraine or Russia.”

French Corn Ratings Extend Drop With 45% in Good State: AgriMer

The share of France’s corn crop that’s in good or very good condition fell to 45% as of Aug. 29, crops office FranceAgriMer said on its website, marking a new low in the data.

In the previous week, 47% of corn crop was rated good or very good, which was the lowest share for the time of year in at least a decade

Supply of China’s daily necessities generally sufficient: commerce ministry

Market supply of China’s daily necessities is generally sufficient, with slight price fluctuations, an official with the Ministry of Commerce said on Thursday.

Wholesale prices of grain, pork, eggs and vegetables went up by 0.4 percent, 1.4 percent, 4 percent and 6.2 percent, respectively, in the week from Aug. 22 to Aug. 28, compared with the first week of August, ministry spokesperson Shu Jueting told a press conference.

Beef and fruits posted lower prices while prices of edible oil and mutton remained unchanged during the same period.

With the Mid-Autumn Festival approaching, the ministry will closely monitor the supply and prices of staple goods to guarantee market supply, Shu said.

“Frozen pork, beef and mutton will be released from central reserves in batches to increase meat supply during the upcoming holiday,” the spokesperson added.

World Food Prices Extend Decline as Supply Uptick Offers Relief

• UN index of food costs dropped 1.9% in August from July
• Higher food prices have helped fuel a cost-of-living crisis

Global food prices fell for a fifth month after demand for some products weakened and there was a seasonal uptick in supplies.

Wheat harvests in the northern hemisphere are helping ease supply constraints, while more grain trickles out of ports in Ukraine. A United Nations index of world food costs dropped 1.9% in August from the previous month, data showed Friday. The index remained at the lowest level since January.

Falling prices may offer some relief to consumers as they grapple with a deepening cost-of-living crisis. Still, the declines are not as sharp as in July when food prices plunged the most since 2008, and remain higher than a year ago. Food inflation shows no signs of easing in many nations, with higher energy prices likely to boost processing costs. Harvests may shrink in the long term as farmers curb fertilizer use.

Concerns over the impact of drought on corn harvests have partly offset declines in grain prices. And while more grain is leaving Ukraine, the volume is still far below the norm and lost farmland and weak local prices are threatening its next wheat harvest.

The UN index tracks export prices for raw goods and excludes retail mark-ups, so it may take a while before their impact is felt by consumers.

US Barge Shipments of Grain Fell 4% Last Week: USDA

Shipments along the Mississippi, Illinois, Ohio and Arkansas rivers declined in the week ending Aug. 27 from the previous week, according to the USDA’s weekly grain transportation report.

• Barge shipments of corn fell 40% from the previous week
• Soybean shipments up 21% w/w

Brazil August Agriculture Exports by Volume: MDIC

Following is a summary of key Brazilian agriculture and mining exports by volume, from the Brazilian Trade Ministry.

• Corn exports rose 74% in August from a year ago
• Soybeans fell 5% y/y

US Crops in Drought Area for Week Ending Aug. 30

The following table shows the percent of US agricultural production within an area that experienced drought for the week ending Aug. 30, according to the USDA’s weekly drought report.

• Corn area experiencing moderate to intense drought up a point to 28% in the week
• Soybean drought area up a point to 21%
• Cotton area in drought eased to 47% from 51%

UNITED STATES

SOUTH AMERICA

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