Evening Report: March 24, 2022
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Argentina corn crop estimate decreased... The Buenos Aires Grain Exchange lowered its forecast of the Argentine corn crop to 49 million metric tons (MMT), down 2 MMT from its previous estimate. The report noted most of the data used for the calculation was based on early planted corn in the eastern part of the country. Yields remained below initial projections. Argentine farmers have harvested 10.1% of the corn crop, up 3.2 points from the previous week.
Highly variable Argentine soybean yields reported... As Argentine farmers get started harvesting their soybean crop, yields are highly variable and below average, reports the Buenos Aires Grain Exchange. Early yield reports are between 15 and 40 qq per hectare (22.3 bu. to 59.6 bu. per acre). Yields are below the five-year average. The variability was expected due to drought conditions, especially in the northern part of the country. Harvest has started in the central part of Argentina. Frosts could affect second-season soybeans in Buenos Aires and La Pampa. However, the exchange kept its estimate of Argentine soybean production unchanged at 42 MMT.
Egypt seeks wheat import alternatives... Egypt is reportedly discussing future wheat imports with Argentina, India, France and the U.S. as it looks to replace its wheat imports from Ukraine and Russia. Last year, the country imported 80% of its wheat from the two Black Sea countries. Egypt’s supply minister said there is no hurry, and his country could start looking to make purchases mid-harvest that runs from mid-April until July or August. He said the country was making plans for the entire year, looking at all possibilities, and making backup plans.
U.S. winter wheat drought shows improvement... The amount of U.S. winter wheat considered in drought conditions decreased to 70% for the week ended March 22, according to the U.S. Drought Monitor. USDA rated winter wheat drought as 21% “moderate,” 31% “severe,” 16% “extreme” and 2% “exceptional." Last week, USDA said winter wheat drought was 18% “moderate,” 32% “severe,” 20% “extreme,” and 3% “exceptional.”
For HRW areas, the area considered abnormally dry/drought in Kansas dropped 22 points to 77%. Oklahoma had a five-point drop in the area classified as abnormally dry/drought to 87%.
Safrinha corn acres likely increased... Responding to higher world prices, farmers in Mato Grosso, Goias, Sao Paulo, Minas Gerais and the Matopiba region of Brazil probably planted more safrinha corn than initially projected, according to Paulo Molinari, an analyst with the ag consultancy Safras & Mercado. In addition, favorable weather conditions would likely increase Brazil’s corn yields. As a result, he said, next week, the consultancy might increase its projection of the safrinha corn crop to more than 83 million metric tons (MMT). The firm is estimating a record 115.7 MMT for Brazil’s total corn crop. Brazil’s corn exports could increase to 34.5 MMT, up 66% from 2020-21.
Brazilian beef, poultry exports increase... For the first two months of the year, Brazilian meat exports are up 1% to 142,600 metric tons (MT), according to Safras & Mercado. For beef, 493,000 MT was exported, up 35%. For chicken, 699,700 MT was shipped, up 12.4% from last year.
More oil releases discussed... The U.S. and other countries are talking about releasing more crude oil from strategic reserves, according to U.S. Energy Secretary Jennifer Granholm. At the annual International Energy Agency (IEA) meeting in Paris, members said they were “immediately ready to react” with releases to fill any gap resulting from a Russian oil boycott. Major oil and gas customers pledged oil cutbacks in Russian imports at the meeting. U.S. and other IEA countries previously announced a release of 60 million barrels of oil from their reserves.
Ukraine’s largest poultry company restarts exports... Ukraine’s largest chicken producer and exporter, MHP, has resumed exports, Chief Financial Officer Viktoria Kapelyushnaya told Bloomberg News. The company is starting by shipping poultry in trucks. It is looking at the option of using railways. However, Ukraine and European railways have infrastructure issues, including using different gauges. The railcars would need to be unloaded and loaded back into other cars as they cross borders. Overall, the company expects to increase export volumes. MHP, which also grows crops, generates about 60% of its annual $1.9 billion revenue from exports.
European supermarket limits on flour, sunflower oil purchases to expand... Greece supermarket chains will limit the amount of flour and sunflower oil customers can purchase. Supermarkets have already imposed flour and sunflower oil limits in Spain and Italy. The supermarkets report demand for those products has dramatically increased as customers are worried about future supply shortages. About 30% of Greece’s wheat imports are from Russia and Ukraine. The government has requested fertilizer, animal food, grains, flour, sunflower and other vegetable oils supply information from suppliers, including supermarkets and other food retailers. Next Monday, the Greek government will be holding a meeting to discuss shortages due to the Russian invasion of Ukraine.
