Strong open for wheat markets following Russia’s decision to send military in to Ukraine
Canola processing declined 28.9% in January from a year ago, according to Statistics Canada data released Tuesday on agency’s website.
• Oil production totaled 272k tons, and meal output at 387k tons
• Aug.-Jan. crushings down 15.7% from year ago to 4.454m tons
Wilmar International Ltd., one of the world’s biggest food processors, warned that the outlook for soybean crushing will be challenging due to surging prices of the oilseed and poor hog margins in China.
The Singapore-based company, which operates more than 300 plants in China, posted weaker sales volume from soybean crushing in 2021. This comes as Chicago soy futures are near a nine-year high, while Chinese hog prices have lost about 50% in the past year, denting demand for soymeal used in feed.
Russia recognized two breakaway regions of Ukraine, the Donetsk People’s Republic and the Luhansk People’s Republic as independent and has ordered troops into those regions for “peacekeeping.” The US immediately put sanctions on those two regions prohibiting trade and investment there.
Brazil exported 1.7 MMT of soybeans during the third week of February bringing the total so far for the month at 3.3 MMT. Last year Brazil exported 2.6 MMT during the month of February. The country shipped 242,122 MT (8.9 million bushel) per working day.
Brazil’s soybean harvest is 33% complete. Farmers made progress on field work in 9% of the estimated area according to AgRural.
Brazil’s largest soybean producing state, Mato Grosso, was 67.7% harvested as of February 18 according to IMEA. Although dryness is an issue in Southern Brazil, excessive rains in Mato Grosso and Minas Gerais may have hurt the soybean quality.
AgRural is expected to release new Brazil soybean crop estimates after down grades in the last three estimates.
Chinese buyers purchased one cargo of Brazil soybeans for April shipment and another four cargoes from the US for October/November shipment according to anecdotal reports.
Russia exported 900,000 MT of wheat for the week ending February 17. The marketing-year-to-date total now stands at 25.2 MMT according to Russia’s agriculture ministry.
PIRSA reported South Australia’s wheat production is 5.5% lower than last year but still beats the 5 year average. Production for the 2021/22 marketing year is 4.7 MMT compared to 4.4 MMT last year. PIRSA estimates South Australia’s barley production at 2.2 MMT and canola production at 417.4 TMT.
Some soybean crushing plants in China have suspended soybean crushing operations amid declining domestic soy crush margins. Bunge’s plant in Tianjin halted operations from February 14 to April 3. Their plant in Nanjing plans to be shutdown from late February to March. Soybean crush margins in China deteriorated rapidly after China’s Lunar New Year holiday. Import costs of soybeans are higher on South American production declines and meal demand is down due to the decline in hog prices since December. According to CNGOIC, China’s soybean stocks were estimated at 3.95 MMT, which is 1.5 MMT lower than the same week in 2021. The market is most likely waiting for the government to release reserves.
Mpls wheat +7
KC wheat +15
Chic wheat +11
Matif wheat +3
Soybean oil +97