TOP HEADLINES
Indonesia OKs Bioceres’s Gene-Modified Wheat for Use in Food
Indonesia approved imports of genetically-modified HB4 wheat for use in food after already green-lighting it for feed.
NOTE: Rosario-headquartered Bioceres is trying to go where no company has before by bringing a GM wheat to market, and its plans to scale up production in Argentina this year
NOTE: Brazil recently became the second country after Argentina to approve HB4 wheat for planting, though it will take years to adapt seed genetics to more tropical conditions
FUTURES & WEATHER
Wheat prices overnight are up 7 3/4 in SRW, up 5 in HRW, up 5 in HRS; Corn is up 5 1/4; Soybeans up 2 3/4; Soymeal up $0.32; Soyoil down 0.23.
For the week so far wheat prices are up 25 1/4 in SRW, up 21 1/4 in HRW, up 27 1/4 in HRS; Corn is up 9 1/2; Soybeans down 7 1/2; Soymeal down $0.08; Soyoil down 0.38.
For the month to date wheat prices are down 1 1/2 in SRW, up 10 in HRW, down 11 3/4 in HRS; Corn is down 4 1/4; Soybeans up 17 1/2; Soymeal up $17.30; Soyoil down 4.09.
Year-To-Date nearby futures are down 11.1% in SRW, down 7.7% in HRW, down 9.3% in HRS; Corn is down 7.6%; Soybeans down 1.3%; Soymeal up 1.4%; Soyoil down 11.9%.
Chinese Ag futures (MAY 23) Soybeans down 33 yuan; Soymeal down 15; Soyoil down 10; Palm oil up 58; Corn up 6 — Malaysian palm oil prices overnight were up 33 ringgit (+0.83%) at 4015.
There were changes in registrations (55 Corn, 1 Soymeal). Registration total: 2,587 SRW Wheat contracts; 43 Oats; 117 Corn; 256 Soybeans; 652 Soyoil; 1 Soymeal; 88 HRW Wheat.
Preliminary changes in futures Open Interest as of March 14 were: SRW Wheat down 3,249 contracts, HRW Wheat up 2,696, Corn up 9,544, Soybeans down 1,538, Soymeal down 4,470, Soyoil up 5,933.
Brazil Grains & Oilseeds Forecast: Scattered showers continue for much of Brazil’s growing regions this week. Despite recent rains, many areas continue to make progress with regard to soybean harvest and corn planting. However, some areas are behind, somewhat significantly, and will expose more of the corn crop to the dry season which is forecast start up in April and frosts that may occur in June. Corn already in the ground will benefit from good soil moisture.
Argentina Grains & Oilseeds Forecast: Periods of isolated to scattered showers are possible across the northern half of Argentina through Thursday, with drier conditions returning thereafter. However, for most areas, the rain is too late to have much of an impact. Additionally, above-average temperatures are expected to continue this week, with daytime highs near 100 degrees Fahrenheit when the rains do not occur. The heat will keep stress high for both crops in various stages of growth, but isolated rain showers may provide some relief for dry conditions.
Northern Plains Forecast: A few systems will move through the Northern Plains and Canadian Prairies this week, providing more snowfall. Below to well-below normal temperatures will remain across these areas through early next week, requiring more input for livestock operations.
Central/Southern Plains Forecast: A few isolated showers are possible across west Texas and Oklahoma on Tuesday. A stronger system will move in Thursday and Friday, providing scattered rain and thunderstorms to the area. Even a few snow showers cannot be ruled out behind the system’s cold front. However, areas such as western Kansas could miss out on the heavier rainfall again as drought conditions persist.
Midwest Forecast: A calmer pattern settles across the region through the middle of the week with a ridge developing over the region. By Thursday into Friday, another low pressure system from the West will provide more rain and snow showers to the area. In the wake of this system, below to well-below average temperatures will follow into early next week.
The player sheet for 3/14 had funds: net buyers of 5,000 contracts of SRW wheat, buyers of 5,500 corn, buyers of 0 soybeans, buyers of 500 soymeal, and buyers of 1,500 soyoil.
TENDERS
- CORN PURCHASE: The U.S. Department of Agriculture confirmed private sales of 612,000 tonnes of U.S. corn to China for shipment in the 2022/23 marketing year.
- CORN PURCHASE: The Korea Feed Association (KFA) in South Korea purchased about 68,000 tonnes of animal feed corn expected to be sourced from South America or South Africa in a private deal on Tuesday without issuing an international tender
- CORN PURCHASE: South Korea’s Major Feedmill Group (MFG) has purchased an estimated 135,000 tonnes of animal feed corn in two consignments in an international tender on Tuesday
- WHEAT PURCHASE: Tunisia’s state grains agency is believed to have purchased an estimated 234,000 tonnes of soft wheat in an international tender for the same volume on Tuesday.
- WHEAT PURCHASE: Jordan’s state grains buyer purchased about 60,000 tonnes of hard milling wheat to be sourced from optional origins in an international tender on Tuesday, traders said.
- WHEAT PURCHASE UPDATE: Algeria’s state grains agency OAIC is believed to have bought around 540,000 tonnes of milling wheat in an international tender on Monday.
- WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy a total of 73,518 tonnes of food-quality wheat from the United States, Canada and Australia in a regular tender that will close on March 16.
- CORN TENDER: Algerian state agency ONAB has issued an international tender to purchase up to 35,000 tonnes of animal feed corn to be sourced from Argentina.
PENDING TENDERS
- FEED BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase up to 120,000 tonnes of animal feed barley
- SUNFLOWER OIL TENDER: Turkey’s state grain board TMO issued an international tender to purchase about 18,000 tonnes of crude sunflower oil.
- RICE TENDER: South Korea’s Agro-Fisheries & Food Trade Corp has issued an international tender to purchase an estimated 121,800 tonnes of rice.
TODAY
ETHANOL: US Weekly Production Survey Before EIA Report
Output and stockpile projections for the week ending March 10 are based on six analyst estimates compiled by Bloomberg.
- Production seen higher than last week at 1.02m b/d
- Stockpile avg est. 25.378m bbl vs 25.32m a week ago
CROP SURVEY: US February Soybean Crush Seen at 166.3M Bushels
Projections are based on a survey of seven analysts conducted by Bloomberg News on March 13-14.
- Soybean crush seen 0.7% higher vs February of last year, and a decline of 7.1% vs a month ago
- Oil stocks at the end of last month seen at 1.891b lbs vs 2.059b a year earlier
Brazil Soymeal Exports Seen Reaching 2.091 Million Tns In March Versus 1.905 Million Tns Forecast In Previous Week – Anec
- BRAZIL SOY EXPORTS SEEN REACHING 14.893 MILLION TNS IN MARCH VERSUS 14.662 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC
- BRAZIL CORN EXPORTS SEEN REACHING UP TO 845.063 MILLION TNS IN MARCH VERSUS UP TO 803,219 TNS FORECAST IN PREVIOUS WEEK – ANEC
- BRAZIL WHEAT EXPORTS SEEN REACHING 728.594 TNS IN MARCH VERSUS 612,824 TNS FORECAST IN PREVIOUS WEEK – ANEC
- BRAZIL SOYMEAL EXPORTS SEEN REACHING 2.091 MILLION TNS IN MARCH VERSUS 1.905 MILLION TNS FORECAST IN PREVIOUS WEEK – ANEC
Brazil 2022/23 Soybean Crop Seen At 149 Million Tns – Patria Agronegocios
BRAZIL 2022/2023 SOYBEAN CROP SEEN AT 149 MILLION TNS – PATRIA AGRONEGOCIO
Black Sea Crop Deal Aims for 120-Day Renewals as Talks Go On: UN
“Within the context of the Black Sea Grain Initiative, the agreement foresees a renewal of 120 days but, in the present circumstances, the Secretary-General and his team are focused, in close contact with all the parties, on doing everything possible to ensure continuity of the Initiative,” Stephane Dujarric, spokesman for the UN Secretary-General, says in a statement.
- Regarding the parallel agreement aimed at facilitating Russian food and fertilizer trade:
- “Meaningful progress has been made, but it is true that some obstacles remain, notably with regard to payment systems. Our efforts to overcome those obstacles will continue unabated”
Egypt Says Vegetable Oil Stockpiles Sufficient for 5 Months
Egypt has vegetable oil stockpiles sufficient for 5 months, supply minister Ali El-Mosilhy says to reporters in Cairo.
- Wheat sufficient for 3.3 months, sugar for 3 months and rice for 3.3 months
- Egypt to start purchasing wheat from local farmers by mid-April
EU Soft-Wheat Exports Rise 8.6% Y/y; Corn Imports Increase 60%
The European Union’s soft-wheat exports for the season that began July 1 reached 21.5m tons by March 12, compared with 19.8m tons a year earlier, the European Commission said on its website.
- Leading destinations include Morocco (3.27m tons), Algeria (2.94m tons) and Nigeria (1.87m tons)
- EU barley exports were 4.28m tons, versus 6.03m tons
- Corn imports were 19m tons, versus 11.8m tons
- NOTE: Commission says some export figures for Germany may be inaccurate due to its recent shift to a new declaration system and Italy import data is only available through December
Russian Wheat Exports Expected to Grow
Russia is projected to export roughly 4.2 million metric tons of wheat in March, research firm SovEcon says. That’s expected to be double the exports by Russia at this time last year. Russian exporters are expected to play catch-up in March, after the previous month was bogged down from increased winter storms. As a result, heavy Russian competition is expected to keep constraint on US prices. “Active wheat exports from Russia will continue to put pressure on global market prices,” says SovEcon in a note. However, that pressure is nowhere to be found in trading today — with the most-active contract up 1.9%.
UkrAgroConsult Sees Bigger Winter Wheat Planted Area in Ukraine
UkrAgroConsult increased its estimate of Ukraine’s winter wheat planted area but revised down its projection for winter barley, it said in a report.
- Winter wheat crop planted area in late February seen at 4.1m hectares; higher than Ukraine agriculture ministry estimate of 4m hectares
- Winter barley crop planted in late February seen at 0.54m hectares, lower than ministry estimate of 0.68m hectares
- Spring wheat areas in 2023 likely to be 150k-200k hectares, according to report
- On grain production, Ukragroconsult sees 16.1m tons of wheat, up 0.3m tons from February estimate; 4.07m tons of barley, down by 0.13m tons; keeps corn estimate steady at 21.4m tons
Conflict in Ukraine Halves Europe’s Fertilizer Production: BNEF
- EU’s nitrogen fertilizer production down 46%
- Average price of fertilizer increased by 71%
The energy crisis has sharply increased cost of fertilizer production and restricted global supply. Cuts to gas supply from Russia, and the resulting energy crisis, hit Europe’s fertilizer production particularly hard.
Natural gas represents 90% of the variable costs of nitrogen fertilizer production. BNEF estimates that fertilizer manufacturing in the EU dropped by 46% on average between March – December 2022. In October 2022, as much as 70% of European fertilizer production was either closed or curtailed.
Russia produces 45% of Europe’s fertilizer, which became inaccessible once the conflict started in February 2022. Lack of Russian supply and decline in fertilizer production in Europe resulted in a 71% increase in fertilizer prices in the first quarter of 2022.
Fertilizer production has partially recovered but will remain volatile as long as the natural gas crisis in Europe persists. The review of Black Sea deal, which enables export of Ukrainian grain, is currently taking place and will likely influence European production.
More Dryness, Heat Wave Seen for Argentina Soy Belt: Govt Maps
The heart of Argentina’s crop region comprising segments of Buenos Aires, Santa Fe, Cordoba and La Pampa provinces is set for another week of dryness and extreme heat, according to Agriculture Secretariat weather maps published in a report.
- Precipitation won’t surpass 20mm (0.8 inch), with temperatures clocking more than 40 degrees C (104 F)
- NOTE: The region needs cooler, wetter weather to put a halt to deterioration of soy and corn plants
- Argentina’s Rosario Bourse Readies More Cuts to Soy Forecast
- Swaths of Argentina are enduring the ninth heat wave of the growing season, when normally there are only two or three, the Agriculture Secretariat said in its report
India Feb. Vegetable Oil Imports Fall to 1.11m Tons: SEA
India’s vegetable oil imports fell to 1.11m tons in February from 1.66m tons in January, according to the Solvent Extractors’ Association of India.
- Palm oil imports fell to 586,007 tons from 833,667 tons in January
- Soybean oil imports fell to 355,840 tons from 366,625 tons in January
- Sunflower oil imports fell to 156,628 tons from 461,458 tons in January
Malaysia’s March 1-15 Palm Oil Exports 750,530 Tons: AmSpec
Shipments jump 71.6% m/m from 437,327 tons exported during Feb. 1-15, AmSpec Agri said Wednesday.
Malaysia March 1-15 Palm Oil Exports +55.03% M/m: Intertek
Malaysia’s palm oil exports rose 55.03% m/m during March 1-15, according to Intertek Testing Services.
- Total exports for March 1-15: 751,814 tons
- Crude palm oil exports: 141,560 tons, 18.8% of total
- EU led all destinations for total exports: 187,800 tons
US senators seek to expand sales of ethanol-gas blend with support from Big Oil
U.S. senators reintroduced a bipartisan bill on Tuesday that would allow nationwide sales of gasoline with a higher blend of ethanol year-round, as a second heavy-weight oil trade group appeared ready to back the idea.
Republican Senator Deb Fischer from Nebraska and Democratic Senator Amy Klobuchar from Minnesota – both major corn-producing states – argue that the expanded sales of E15, or fuel containing 15% ethanol, would decrease gasoline prices and reduce U.S. dependence on foreign oil. Year-round sales of E15 have been long sought by the biofuel industry and corn farmers, who would benefit from the increased market.
The American Petroleum Institute (API), one of the largest U.S. oil trade groups, has supported the bill since it was introduced last autumn. It began cooperating with the Renewable Fuels Association, a biofuels trade group, on expanded nationwide E15 sales after governors from major corn-producing Midwestern states requested the U.S. Environmental Protection Agency (EPA) lift restrictions on E15 in their states, Reuters previously reported. The governors’ effort raised oil industry concerns that the proposal would create a patchwork of different fuel regulations and logistical challenges around distribution.
On Tuesday, another top U.S. oil group, the American Fuel and Petrochemical Manufacturers (AFPM), signaled it could support a national standard.
AFPM said that while the bill needed work, a legislative approach was less disruptive than creating patchwork requirements for new fuel blends.
AFPM did not take a position on the bill last autumn.
The governors’ proposal is gaining headway. In response to their request, the EPA in early March proposed to allow year-round E15 sales in those states. That rulemaking would take effect in the summer of 2024 and still needs public comment.
The EPA restricts summertime sales of E15 over concerns that it contributes to smog in hot weather, though research shows the higher percentage blend may not increase smog relative to the 10% blend called E10 that is sold year-round.
Corn consumption for ethanol increasing amid favorable margins – Refinitiv Commodities Research
2022/23 U.S. CORN CONSUMPTION FOR ETHANOL: 5,279.5 MILLION BUSHELS, UP <1% FROM LAST UPDATE
U.S. ethanol high margins continue lifting the biofuel production in 2023. As of March 14, the average ethanol margins in the corn belt are at $0.54/gal, a 9-year high. With a lower U.S. domestic demand and an expected increase in the 2023/24 U.S. corn supply, the corn prices have lost pressure, likely resulting in good margins for the ethanol industry.
In February, corn for ethanol use totaled 410.9 thousand bushels, a 1.4% increase from January and only 2% above the February 5-year average. As of March 8, the accumulated corn consumption for ethanol for the 2022/23 season is at 2,717.8 million bushels, aligned with the long term average and 3.6% below the prior season. Corn consumption for ethanol production is increasing week over week in response to favorable industry margins. Based on the market indicators, Refinitiv’s Agriculture Research increased the 2022/23 U.S. corn consumption for ethanol use to 5,279.5 million bushels, 22.1 million bushels from the last update and 29.5 million bushels above the USDA’s March estimate.
Besides the positive market factors and the summer season around the corner, the policy environment also favors the U.S. ethanol industry. The Biden administration plans to allow the sales of E15, gasoline with 15% of ethanol, in various Midwest states. The group of governors emphasized that this action would lower the gas prices at the pump and help the corn farmers.
In Brazil, the second largest ethanol producer, corn-based ethanol production capacity has soared recently. Brazil is taking advantage of its record harvest 2022/23 corn season. According to the country’s national corn ethanol union (UNEM), Brazil will produce six billion liters of corn-based ethanol in the 2023/23 season, a 36.7% increase compared to last season and 1,053% compared to 2017. Corn-based ethanol is expected to account for 19% of the ethanol produced in the country, a significant increase from 13.7% in the current season.
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