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Winter wheat conditions below expectations... USDA rated 30% of the winter wheat crop as “good” to “excellent.” That was 10 points below the average estimate from a Reuters survey. USDA rates 36% of the crop as “poor” to “very poor.” The “good” to “excellent” rating plunged 14 points from the end of November and was 23 points below year-ago.
USDA reported 4% of the wheat crop has headed, equal to last year and one point ahead of the five-year average.
| This week | Nov. 29, 2021 | Year-ago |
Very poor | 18 | 8 | 5 |
Poor | 18 | 15 | 11 |
Fair | 34 | 33 | 31 |
Good | 27 | 38 | 47 |
Excellent | 3 | 6 | 6 |
Corn, spring wheat planting in line with year-ago... USDA reports 2% of the U.S. corn crop was planted as of Sunday, in line with analysts’ expectations, last year and the five-year average. Texas had 54% of its corn crop planted, equal to year-ago and a point behind the five-year average.
The U.S. spring wheat crop was 3% seeded, equal to year-ago but one point more advanced than analysts expected and the five-year average. Washington had 27% of its crop planted, 10 points ahead of the five-year average. Planting hasn’t started yet in North Dakota.
China makes large U.S. corn purchase... USDA reported Chinese buyers bought 1.084 MMT of corn, the largest purchase since May 2021. The purchase consisted of 676,000 MT of corn to be delivered by the end of August and 408,000 MT in the 2022-23 marketing year.
This is the first daily old-crop corn sales announcement to China since December. It would also be China’s largest old-crop purchases since the week ended March 18, 2021, at 3.89 MMT.
U.S. diesel prices increase... U.S. diesel fuel prices rose last week by 5.1 cents to a national average of $5.185 per gallon. Prices increased in all regions, with the most significant increase in New England, where prices jumped 18.4 cents last week, followed by the Rocky Mountain region, which saw a 15.7-cent increase, according to the Department of Energy’s Energy Information Administration. According to ProMiles’ Fuel Surcharge Index, the most expensive diesel is in California at $6.212 per gallon, and the cheapest can be found in the Midwest region at $4.856 per gallon.
Goldman poll expects recession... Over 60% of the 328 insurance executives that oversee $13 trillion in assets expect the U.S. to enter into a recession, according to a Goldman Sachs Group poll. The downturn will likely happen in the next two to three years. Inflation was the top macroeconomic risk to investment portfolios, with 59% of the respondents ranking it in the top three and 28% listing it as the top issue. Tightening U.S. monetary policy was also a top risk, with 43% of the respondents listing it as a top-three concern and 20% listing it as the top concern. More than a third said commodities were among the top three assets expected to deliver the highest returns in the next year. However, due to high volatility and capital inefficiency, they showed very little willingness to increase investment in commodities in 2022.
Survey: U.S. recession likely next year... The U.S. is expected to fall into a recession in 2023, according to the 525 respondents to the Markets Live weekly survey. Bloomberg reported that 15% of respondents said the U.S. would go into recession this year, close to 50% said it would happen in 2023, 21% said recession would hit in 2024 and 16% said it would be 2025 or later. More than half believed the two-year vs. 10-year yield curve inversion was the most likely warning signal of a recession among yield curve inversions. Only 12% thought the yield inversion between the three-month and 18- month notes was a top signal of recession.
Ukrainian exports and imports drop from February... Ukraine’s March grain exports were four times lower than February, according to its economy ministry. In March, Ukraine exported 1.1 MMT of corn, 309,000 MT of wheat and 118,000 MT of sunflower oil. The ministry said total March exports were 5.97 MMT worth $2.7 billion. In February, total exports were 13.1 MMT worth $5.3 billion. Imports into the country also declined due to the Russian invasion. In March, the country imported 1.6 MMT worth $1.8 billion. Natural gas, crude oil and coal were the main imported products. In February, the country imported 5 MMT of goods worth $5.9 billion.
India’s wheat exports hit a record... India’s wheat exports hit a record 7.85 MMT in the marketing year that ended in March, according to traders. It is a 5.75-MMT increase from the previous year and might increase more for the second largest wheat-producing country. Earlier this month, a top government official said the country would likely export more than 7.0 MMT of wheat for the year.
A trader said the Mundra and Kandla ports have been busy shipping wheat and the 2022-23 marketing year is also off to a strong start as buyers are looking to replace Russian and Ukrainian wheat supplies. Indian farmers have started harvesting their wheat crop, estimated at a record 111.32 MMT.
Australian first quarter beef exports record low... Australia started the year with record-low beef exports in the first quarter, Beef Central reported. Total Australian beef exports for the quarter totaled 177,233 MT, the lowest in the past decade and 27% below the ten-year average of 241,000 MT for the quarter. Some reasons for the lower exports include flooding, supply issues, port of Brisbane congestion, shipping container access issues and Covid issues at packing plants in January. Australian cattle supplies remain tight as producers rebuild their herds from the 2019 drought.
No Ukraine vegetable oil exports through June... The virtual halt of Ukraine vegetable oil exports will likely continue through June and gradually resume in July, according to Strategie Grains. The exports have stopped primarily due to logistics and port damage in Ukraine. Previously, the firm thought there would be a one-month export halt. It cut EU sunflower oil imports from Ukraine by 800,000 MT to 1.7 MMT for both 2021-22 and 2022-23. EU sunflower meal imports were reduced 400,000 MT to 604,000 MT. It previously cut sunflower meal imports by 230,000 MT. EU rapeseed production was reduced by 100,000 MT to 700,000 MT. It raised EU sunflower seed production by 400,000 MT to 10.2 MMT.
Iowa, Kansas attorneys general press for E15 sales... Iowa Attorney General Tom Miller and Kansas Attorney General Derek Schmidt asked EPA to allow the sale of E15 this summer to ease prices at the pump. In many areas of the U.S. air-quality regulations prohibit the sale of E15 from June 1 to Sept. 15. However, EPA has authority to allow E15 fuel to be sold year-round when “extreme or unusual fuel or fuel additive supply circumstances exist.” In a letter to EPA Administrator Michael Regan, the attorneys general explain E15 sales could help lower record-high gas prices. Iowa and Kansas are among the nation’s top ethanol producers.
U.S. considers bird flu vaccines... USDA is investigating using a bird flu vaccine to keep birds alive, prevent financial losses and help control food costs. In the past, USDA ruled out using vaccines because importers of U.S. poultry would not be able to tell the difference between infected birds from vaccinated ones. USDA’s Agricultural Research Service is working to find a vaccine that could be distinguished from the wild virus in birds. Researchers said a vaccine like that would impact trade less. However, it would take at least nine months to develop a vaccine.
USDA announces new HPAI webpage... USDA’s Animal and Plant Health Inspection Service (APHIS) announced the availability of a new webpage that displays the latest data and information about cases of highly pathogenic avian influenza (HPAI) confirmed in commercial and backyard flocks in the United States. The page uses the same APHIS data but in a different format that is more visual and easier to navigate. The new page displays high-level information about outbreaks, including the number of confirmed flocks, affected states and total birds affected. A new feature on the page’s data table lets users see when control areas and surveillance zones have been released for affected counties. APHIS will continue to announce the first case of HPAI in commercial and backyard flocks detected in a state but will not announce subsequent detections in that state. All cases in commercial and backyard flocks will be listed on this new page, which will be updated by 11 a.m. CT each weekday.
Australia ships first commercial canola cargo to U.S... A ship carrying what is believed to be the first bulk shipment of canola to North America left Australia on Saturday, according to Grain Central. The vessel with 33,000 MMT of canola is headed to Stockton, California. Penny Newman, a canola trader and participant in the grain and fertilizer markets, is located there. Wilmar Fats & Oils, which processes palm and coconut oils, is also in Stockton. Australian Oilseeds Federation executive officer Nick Goddard said Australian Bureau of Statistics data indicates Australia only shipped small amounts of canola to the U.S. and Canada. He said it was the first shipment of any commercial quantity.
Tunisia doubles first-quarter phosphate output... Tunisia produced 1.3 MMT of phosphate in the first quarter, double its 2021 production for the quarter, according to state-run Gafsa Phosphate. The company aims to produce 5.5 MMT of phosphate this year, up 1.8 MMT from last year. The country is trying to regain its position as a significant phosphate producer. In 2010, the country produced 8.2 MMT of phosphate, but its production has averaged 3 MMT since then.
