- Two very recent news flashes:
- Russian authorities are holding up two Egyptian ships loaded with wheat for export, in the latest sign that a domestic dispute between a key grain trader and the agriculture regulator is hindering deliveries abroad. The ships are carrying cargoes from Grainflower DMCC, which people familiar with the matter say is an export partner of Russian trader TD Rif. Rif has been targeted by the industry watchdog recently. Egypt’s Supply Minister Ali El-Mosilhy told Bloomberg News the ships were denied permission to sail because they did not have the right documents and are now being held up in Russian ports. They were meant to sail by the end of March, according to a January tender, and Egypt is waiting for a response from Russian embassy officials on the issue, El-Mosilhy said. The people linking Grainflower to Rif asked not to be identified as the topic is sensitive. Last month, Rif’s owner said the firm’s exports were being blocked and that it’s facing pressure to sell its assets for a “negligible price.” Meanwhile, the agriculture regulator has said it’s stopping some exports by Rif due to “systematic inconsistencies” in grain safety and quality. Egypt is a major importer and a key customer for Russian exporters. Spokespeople for Russia’s agriculture ministry and regulator did not immediately respond to email and phone requests for comment, nor did representatives for Rif and Grainflower. El-Mosilhy said that Egypt will decide what to do with the cargoes once it receives a response from Russia on the ships, which are named Wadi Almolouk and Wadi Safaga.
- Polish farmers have for months been blockading the country’s border crossings, particularly with Ukraine, against the import of cheaper food products they say is harming their livelihoods. Poland plans to earmark PLN 2 billion (€467 million) on grain subsidies to help its farmers compete with a glut of Ukrainian produce and battle low market prices, a deputy agriculture minister has said. Polish farmers have for months been blockading the country’s border crossings, particularly with Ukraine, against the import of cheaper food products they say is harming their livelihoods. Stefan Krajewski told reporters on Thursday that the agriculture ministry was working on draft regulations intended to implement the demands of protesting farmers. “The drafts are ready, they must go through their own procedural path, but we want to introduce them as soon as possible,” he said. Among the planned regulations, according to Krajewski, is one regarding subsidies for the purchase of around 5 million mt of grain. “We want to allocate approximately PLN 2 billion to purchasing surplus grain from the market… arrangements with the Ministry of Finance on this matter are currently underway,” Krajewski said. He added that the subsidies would be paid out by the end of May.
- HEADLINES: Chicago mixed/uneventful; US export demand cools in week ending March 28; GFS weather forecast warm/hot in US mid-April.
- Midday Chicago values are mixed, with corn and wheat steady/higher and beans lower as oil/oil share corrects on weakness in crude. Spot WTI crude at midday is down $0.60/barrel at $84.85. Energy markets are overbought and last week’s counter-seasonal modest build in stocks has paused crude’s rally at $85. Crude is unlikely to reach a seasonal top until May, but a more two-sided energy marketplace is forecast nearby. The Dow is up 183 points.
- US export demand in the week ending March 28 eased from prior weeks. Corn sales totalled 37 million bu, vs. 48 million the prior week. Corn export sales tend to drift lower beyond late March/early April as S American surpluses become imminent, though we note weekly sales into late August must now average only 17 million bu. Soybean export sales were 7 million, vs. 10 million the prior week. Wheat sales totalled 0.6 million bu vs. 12 million the prior week. USDA in its April WASDE is expected to leave its annual corn and wheat projections unchanged while trimming soy exports 10-20 million bu.
- Longer term, there remains evidence available that USDA’s 2023/24 corn export forecast is understated.
- Official Census corn exports in February were 211 million, 39 million (23%) above weekly FGIS inspections during the month. Cumulative official Sep-Feb exports sit at 948 million bu, 40% above last year, vs. USDA’s projected 26% increase. Incredible Mexican demand, which is not fully accounted for in weekly FGIS data, is cited with respect to this year’s sizable difference between USDA and Census numbers. US exports have committed 727 million bu to Mexico, up 195 million (36%) on last year. Recall even amid record Mexican corn imports, Mexican corn stocks will be just 2.5 million mt, which covers only 19 days of consumption. Mexico has become an even more critical market for US ag.
- Census soy exports in February totalled 193 million bu, vs. 197 million a year ago and right at expectations. Official wheat exports in Feb were 76 million bu, a marketing year high and up 24 million year on year.
- The midday GFS weather forecast maintains needed showers in the driest areas of Mato Grosso do Sul, while the monsoon continues to perform normally in Mato Grosso into April 15. Safrinha yield ideas are improved from mid-March, but it is lingering drought in Parana, which accounts for 15% of total safrinha production, and 2024’s decline in planted area that caps total Brazilian production at 115-117 million mt, vs. 137 last year. The Black Sea forecast is keeps rainfall in southern Russia light/spotty in nature. Temperatures in Ukraine/Russia stay abnormally warm.
- The midday GFS weather forecast is wetter across the Delta/Southeast but consistent elsewhere. 10-day rainfall in LA, AR and MS is now forecast in a range of 5-8”, which triggers regional flooding and shifts more acres from corn to soy. A lengthy period of dryness blankets the Plains and Midwest into mid-month, and temperatures rise considerably beginning this weekend. The GFS forecast is likely overdone, but today features high temperatures in the 70s & low 80s April 13-15. Heat favours fieldwork and planting, but the extreme nature of the N American climate continues.
- The theme stays rangebound nearby. Seasonal trends are positive into early summer and prices today are aligned with old crop supply and demand. Be prepared for weather-based volatility post-planting.