TOP HEADLINES
White House’s Podesta Pressed by Renewable Diesel Lobby on SAF
A coalition representing farmers and green fuel makers are urging the Biden administration to embrace a US model for tracking greenhouse gases when it issues tax credit policy aimed at encouraging production of sustainable aviation fuel.
- If Treasury Department guidance, expected this year, doesn’t include the model used by the US Energy Department “our combined members and others in the industry may not be able to follow through on investments in SAF production,” the groups told White House senior clean energy adviser John Podesta in a letter on Tuesday
- A rival emissions model created by the UN’s International Civil Aviation Organization uses “old, inaccurate farming practices data that would effectively prevent sustainable aviation fuels made from crops such as soybean and canola oil from qualifying for the credit”
- Letter is from the Clean Fuels Alliance America, American Soybean Association, US Canola Association and National Oilseed Processors Association
- NOTE: Environmentalists argue the UN model is more environmentally rigorous
- Trade groups representing truck stops and fuel retailers say the global approach would ensure raw materials used to make SAF and green diesel would only shift from motorway fuel uses when “environmentally justified”
FUTURES & WEATHER
Wheat prices overnight are down 2 1/4 in SRW, down 2 1/2 in HRW, down 1 1/2 in HRS; Corn is down 1 1/2; Soybeans down 12 1/4; Soymeal down $2.60; Soyoil down 0.47.
For the week so far wheat prices are down 18 in SRW, down 19 1/4 in HRW, down 7 1/4 in HRS; Corn is up 4 1/2; Soybeans down 32 3/4; Soymeal up $0.90; Soyoil down 3.35.
For the month to date wheat prices are down 15 1/2 in SRW, down 3/4 in HRW, up 15 1/4 in HRS; Corn is up 2 1/2; Soybeans down 61; Soymeal down $11.50; Soyoil down 3.69.
Year-To-Date nearby futures are down 26.0% in SRW, down 18.1% in HRW, down 16.7% in HRS; Corn is down 29.1%; Soybeans down 13.9%; Soymeal down 17.4%; Soyoil down 5.8%.
Chinese Ag futures (NOV 23) Soybeans up 15 yuan; Soymeal down 9; Soyoil down 122; Palm oil down 64; Corn down 4 — Malaysian Palm is down 43.
Malaysian palm oil prices overnight were down 43 ringgit (-1.16%) at 3677.
There were changes in registrations (-4 Soymeal). Registration total: 3,005 SRW Wheat contracts; 741 Oats; 4 Corn; 220 Soybeans; 67 Soyoil; 59 Soymeal; 402 HRW Wheat.
Preliminary changes in futures Open Interest as of September 20 were: SRW Wheat up 4,775 contracts, HRW Wheat up 2,562, Corn up 18,967, Soybeans up 279, Soymeal up 3,980, Soyoil down 823.
Northern Plains: A system moving into the region Wednesday will produce areas of scattered showers through the weekend. Some areas of heavy rain will be possible, which may have some benefit for late-filling corn and soybeans, but will delay harvest.
Central/Southern Plains: A system moving into the region on Thursday will be slow to move east with multiple rounds of precipitation through the weekend before it leaves. Areas of heavy rain will be beneficial for winter wheat establishment, but not corn and soybean harvest.
Midwest: Clusters of showers and thunderstorms will be possible the next couple of days mostly across western areas of the region. A system will move into the region Friday but be slow to move out next week. Rain should be heavier for western areas as opposed to eastern ones. Rain is largely too late to be a benefit and will delay early harvest plans in some areas instead.
Delta: A system will move into the region this weekend or early next week with potential for limited rain. Cotton is running out of time for rainfall to be helpful and the coming rains may be heavy enough to disrupt harvest progress for soybeans.
Brazil: A front in the south will continue with periods of showers for most of the week and possibly into next week as well. There could be additional flooding concerns for Rio Grande do Sul. Early soybean and full-season corn planting should otherwise continue to go well.
Argentina: A front will produce areas of showers for northern areas at various points going into next week. Southern areas may get in on some rainfall later this week and weekend. Recent and forecast rain is improving soil moisture for winter wheat and early corn planting.
The player sheet for Sept. 20 had funds: net buyers of 2,500 contracts of SRW wheat, buyers of 4,500 corn, buyers of 4,000 soybeans, buyers of 8,000 soymeal, and sellers of 3,000 soyoil.
TENDERS
- SOYBEAN SALE: The U.S. Department of Agriculture confirmed sales of 120,000 tonnes of U.S. soybeans to unknown buyers for delivery in 2023/24.
- WHEAT PURCHASE: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), said it bought 120,000 metric tons of Romanian wheat in an international tender.
- WHEAT, BARLEY PURCHASES: Algeria’s state grains agency OAIC purchased a total of around 600,000 metric tons of milling wheat in an international tender
- WHEAT PURCHASE: A group of South Korean flour mills bought an estimated 50,000 metric tons of milling wheat to be sourced from Australia in an international tender.
- WHEAT TENDER: A group of South Korean flour mills issued a tender to purchase about 50,000 metric tons of milling wheat to be sourced from the United States.
PENDING TENDERS
- RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued an international tender to purchase an estimated 21,700 metric tonnes of rice all to be sourced from China, European traders said. The deadline for submissions of price offers in the tender was Sept. 12.
- WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) is seeking to buy a total of 89,940 metric tons of food-quality wheat from the United States, Canada and Australia in a regular tender that will close on Sept. 21.
- VEGETABLE OILS TENDER: Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), said it was seeking vegetable oils in an international purchasing tender for arrival Dec. 15 – 31. The deadline for offers is Sept. 21.
- WHEAT TENDER: The Taiwan Flour Millers’ Association has issued an international tender to purchase an estimated 93,125 metric tons of grade 1 milling wheat to be sourced from the United States. The deadline for submission of price offers is Sept. 22.
TODAY
GRAIN EXPORT SURVEY: Corn, Soy, Wheat Sales Before USDA Report
Estimate ranges are based on a Bloomberg survey of six analysts; the USDA is scheduled to release its export sales report on Thursday for week ending Sept. 14.
- Corn est. range 550k – 1,100k tons, with avg of 767k
- Soybean est. range 550k – 1,200k tons, with avg of 822k
DOE: US Ethanol Stocks Rise 2.4% to 21.681M Bbl
According to the US Department of Energy’s weekly petroleum report.
- Analysts were expecting 21.223 mln bbl
- Plant production at 0.98m b/d, compared to survey avg of 1.025m
SovEcon Cuts Russia Wheat Crop Estimate, Boosts Grains Outlook
Consultant SovEcon cut its estimate for Russia’s 2023 wheat crop to 91.6m tons from 92.1m tons, citing a decrease in the expected crop in Siberia.
- That would still be second-highest output ever, behind 2022’s record
- Total grains outlook boosted to 142.9m tons from 142.4m tons due to better barley, corn projections
- SovEcon says yield in Western Siberia was impacted by drought in summer; rains in August-September delayed harvest and impacted quality
- NOTE: Includes grain production on territories controlled by Russia as of the beginning of 2022
Slovakia Says Ukraine Promises to Halt Lawsuit Over Grain Ban
Ukrainian Agriculture Minister Mykola Solskyi promises Ukraine will halt all actions related to the lawsuit against Slovakia, as well as statements on stopping the trade in agro-commodities from Slovakia to Ukraine, Slovakia’s agriculture ministry says in an emailed statement.
- Solskyi had a constructive call with his Slovak counterpart Jozef Bires on Wednesday afternoon, ministry says
- Ministers agreed to establish a license-based system, but until its effectiveness is proven, Slovakia will keep the ban on grain imports in effect until the end of the year
China August soy imports from Brazil up 45% on year ago
China’s soybean imports from Brazil rose 45% in August from a year earlier, data showed on Wednesday, as a huge crop produced by the South American nation this year continued to flow to the world’s top buyer.
China imported 9.09 million metric tons of the oilseed from Brazil last month, according to the General Administration of Customs showed, almost all of the 9.36 million tons of total soybeans that arrived in China during August. CNC-SOY-IMP
Brazil’s market share to China remained the same even though Chinese buyers ramped up purchases from the world’s top supplier due to attractive prices of this year’s record Brazilian soy crop.
Total shipments from the South American nation were 47.99 million tons so far this year, up 17.3% compared with the same period last year.
August soybean arrivals from the United States, China’s number 2 supplier, declined 58% compared to the same month a year ago to 120,073 tons.
Total arrivals from the U.S. in the first eight months came to 19.95 million metric tons, up 14% on a year ago, the data also showed.
Ukrainian and Polish Ministers to Seek Solution on Grain Dispute
Ukrainian Agriculture Minister Mykola Solskyi had a phone call with his Polish counterpart, Robert Telus, the Ukrainian ministry said on Telegram.
- The ministers discussed Ukraine’s proposal for resolving the countries’ dispute over grains shipments, and agreed to seek a solution that would take into account both countries’ interests
- The sides reiterated their “close and constructive relations”
- The next talks between Poland and Ukraine on grains will take place in the coming days
Crop costs in Brazil’s state of Mato Grosso fall in August
Crop costs in the Brazilian state of Matto Grosso, an agricultural powerhouse, dropped in August, according to figures by the state’s institute of agricultural economics (Imea), Argus reported on September 15.
The cost of growing soybean crops for the upcoming agricultural season (2023-2024) fell to BRL 4,146/hectare ($816/hectare), down 0.8% from July and a sharp 16% lower than in the previous agricultural season.
Fertilizer and pesticide costs fell by 1% each to BRL 1,812/hectare and BRL 1,317/hectare, respectively.
Seed costs also fell slightly.
Sowing activities for the 2023-2024 cycle typically begin on September 15, but this year the agriculture ministry approved 216 requests to begin planting by September 14.
Production costs to cultivate corn in August stood at BRL 3,344/hectare, down 0.7% month on month.
Meanwhile, Imea said costs to cultivate cotton crops stood in August at BRL 9,912/hectare, down 1% month on month.
India’s soybean output likely to drop y/y amid erratic rains – industry
India’s soybean production is expected to drop as patchy monsoon rains in August stunted the crop in some key growing areas, industry officials and farmers said on Thursday.
India uses soybeans to manufacture soyoil, which helps the country cut its hefty edible oil imports, while the by-product soymeal is used for animal feed and exported mainly to Southeast Asia.
Farmers grow soybeans once a year during the monsoon season in June and July and harvest the main summer oilseed crop from October.
Indian farmers planted 12.5 million hectares of soybean this year, compared with 12.4 million hectares in the year-ago period, according to the farm ministry’s latest data on crop sowing.
“The rainfall deficit is likely to result in lower yields, and that’s why I believe that soybean production could be lower than last year,” said B.V. Mehta, executive director of the Mumbai-based industry body the Solvent Extractors’ Association of India (SEA).
Although rains have revived, some regions are still dry in western India, he said.
Monsoon rains, critical for the soybean crop, came in 36% below average in August, although rains have revived this month to rebound to 7% above average.
“Despite a late start of the monsoon in June, the crop was quite good until August when a prolonged dry spell hit the crop,” Mehta said.
Madhya Pradesh, Maharashtra and Rajasthan are some of India’s top soybean-producing states.
“The crop suffered a lot of moisture stress when it didn’t rain for two weeks in August. As rains revived in September, some of the losses have been recouped,” said Rameshar Singh, an oilseed grower from the central state of Madhya Pradesh.
Despite the lower output, soybean supplies will come in higher than the demand as stockpiles at the start of the new marketing year are expected to be anywhere between 1.5 million tonnes and 2 million tonnes, Mehta said.
Russia mulls extra tax for some commodities exports, including metals – sources
Russia is considering imposing an additional tax tied to the rouble-dollar rate on exports of metals, fertilisers and some other commodities, sources in two major exporting companies told Reuters on Wednesday.
The tax, which may be imposed from October and last until the end of 2023, would apply to all major export contributors to the Russian gross domestic product (GDP), excluding oil, gas, grains, timber, machine building and scrap metal.
“The idea appeared out of the blue, discussions about it were kept secret,” one of the sources said.
The discussions at the government were first reported by the Interfax news agency, which quoted sources as saying that the tax could be imposed from next month, but one of its sources added that it could also be extended to 2024.
According to one of the Reuters’ sources, the tax would apply to “long-distance” exports, meaning it would not affect deliveries to Russia’s neighbouring countries such as Belarus or Kazakhstan, and its prospects for 2024 are unclear yet.
President Vladimir Putin in June cited positive data points to laud Russia’s economic health and said surging defence spending was needed to boost national security, as Moscow grapples with the cost of fighting in Ukraine.
Russia’s budget deficit for January-August narrowed to 2.36 trillion roubles ($24.6 billion), or 1.5% of GDP, being driven by falling revenues, but also surging spending, particularly on what Moscow calls its “special military operation” in Ukraine.
The size of the tax under discussion, according to one of the sources, would be up to 7% when the currency rate is higher than 95 roubles per dollar and would gradually decline to 3% when one dollar is equal to 80-85 roubles.
The rouble ended Wednesday at 96.15 per dollar. RUBUTSTN=MCX, RUB=.
Russia’s economy ministry declined to comment, the finance ministry has not replied to a Reuters’ request for comment.
Cargill Converts Russia Terminal After Exiting Grain Exports
Cargill Inc. is converting a port terminal in southern Russia after exiting the grain export market in the world’s largest wheat shipper, according to people familiar with the matter.
The agricultural commodities giant is converting its river terminal in Rostov-on-Don to handle vegetable oils instead of grains, according to the people, who asked not to be identified because the information isn’t public. The Minneapolis-based trader also sold a 25% stake in its Black Sea grain terminal in Novorossiysk to Delo Group.
The move comes after Cargill said earlier this year that it would halt grain purchases for export from Russia. International traders Viterra and Louis Dreyfus Co. also exited the grain export market after local officials called for limited foreign influence in grain trading.
Cargill didn’t respond to a request for comment.
Brazil Nitrogen Prices Falter After India Tender Disappoints
After Brazil urea jumped $100 a metric ton at mid-month following India’s latest tender call, the market dropped this week when India booked fewer tons than expected at prices roughly $5 a metric ton above its August contract. Potash prices weakened and phosphates stabilized as buyers move slowly amid soybean 2023-24 preparations.
Fertilizer Sales Pause as Harvest Accelerates
Brazil’s farmers are focused on the soy harvest and not purchasing fertilizer, pressuring nitrogen and potash prices. Ammonium sulfate declined to $205-$210 a metric ton (mt) cost-and-freight from last week’s $210-$220, and urea slipped to $410-$420 from $415-$425, with buyers reportedly bidding $380-$400 in an inactive market. Brazil potash softened to $340-$360/mt from last week’s $350-$360, with the drop attributed to the availability of sanctioned products and other non-sanctioned producers selling on a formula basis. Mono-ammonium phosphate (MAP) was stable at $530-$535, but scarce offers for October could push prices higher going forward.
Nitrogen Firms as India Tender Prices Revealed, Brazil to Buy
The global urea market found direction as India’s tender revealed prices above $400 a metric ton delivered. China may limit urea exports in 4Q, setting up a scramble for tons as India sources material and Brazil seeks supply. Ammonia and urea are balanced on a unit basis, with both inching higher in the US as global nitrogen markets strengthen.
US Nitrogen Up, Phosphates Mixed
New Orleans (NOLA) urea firmed to $430 a short ton (st) from last week’s $390-$408 following reports of delayed load dates and low water on the Mississippi River, which fueled concerns about tight prompt supply. Ammonia inched up again in the Corn Belt, to $660-$675 from $610-$655 a week ago, and prices were also rising for urea ammonium nitrate (UAN) and ammonium sulfate after higher producer postings from CF and Interoceanic. Phosphates were mixed at NOLA, with diammonium phosphate (DAP) firming and mono-ammonium phosphate (MAP) slipping slightly. NOLA potash was reported at $340/st for new business vs. last week’s $330-$335, though Corn Belt potash remained flat.
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