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U.S. producer prices record-high in November... The U.S. producer price index (PPI) jumped 0.8% last month after advancing 0.6% in October, according to the Department of Labor. Economists polled by Reuters expected the PPI would climb 0.5% on a monthly basis.
PPI surged 9.6% over year-ago in November compared to 8.8% for October and expectations of 9.2%. The annual gain is the largest since the index was redone in 2010.
U.S. Senate to vote on $2.5 trillion boost to federal debt limit... The U.S. Senate is expected to raise the federal government’s $28.9 trillion debt limit by $2.5 trillion and forward the measure to the House of Representatives for final passage, to avoid an unprecedented default.
The increase would take borrowing into 2023, through next year’s Nov. 8 midterm elections.
The Senate has allowed for up to 10 hours of debate, which could push the vote into Tuesday evening. The House will also need to approve the bill before sending it to President Joe Biden for his signature.
Fertilizer prices could affect 2021 taxes, 2022 planting intentions... Farmers’ inability to purchase their fertilizer in 2021 for 2022 means they will likely face a higher tax bill in 2021, according to an American Farm Bureau Federation’s (AFBF) Market Intel service report.
In the report released Monday, AFBF noted there are many reasons fertilizer prices have skyrocketed. “Given all these factors, fertilizer prices are expected to remain high through springtime, which may compel some farmers to shift planted acres away from corn to commodities that use fertilizer at a lower rate, like soybeans or wheat,” said the report.
“With the price of ammonia about 85% correlated with the price of corn, farmers must consider whether the increased cost of fertilizer and other inputs can be recovered by cash receipts from crop revenues in order to break even. There are also expectations retailers will have to turn customers away because they will not be able to deliver fertilizer products on time, increasing the need for supply chain and infrastructure improvements.”
COVID-19 rattles major Chinese manufacturing province... At least 20 listed companies have shut operations in virus-hit areas in Zhejiang, one of China’s biggest and busiest manufacturing hubs.
The region, which accounts for around 6% of China’s GDP, is trying to contain the Covid outbreak.
The suspended operations at multiple companies affects goods from batteries and clothing to textile dyes and plastics. Many of Zhejiang’s goods are for export.
Tens of thousands are in quarantine and some domestic flights have been suspended as a national health official said the outbreak in three cities – Ningbo, Shaoxing and Hangzhou – was developing at a
“relatively rapid” speed.
The three cities accounted for more than 50% of the province’s economic output of around 6.46 trillion yuan ($1.02 trillion) last year.
Soybean harvest in Mato Grosso could be the earliest ever... The earliest maturing soybeans in Mato Grosso, Brazil’s top producing state, will be ready to start harvesting in two to three weeks, according to Crop Consultant Dr. Michael Cordonnier.
As a result, Brazil’s soybean exports might start one month earlier than normal. Cordonnier says there may be a “few vessels” of soybeans leaving Brazilian ports by the end of January.
The early soybean harvest means the second crop of cotton and corn will likely be planted in the ideal window. This increases odds of good yield potential, especially for the corn crop.
Argentina exchange says dry summer poses ‘big challenge’ for soybeans, corn... Lower-than-normal rainfall due to the La Niña climate pattern during Argentina’s summer would pose a “big challenge” for soybean and corn production, according to the Buenos Aires Grain Exchange.
In its monthly climate report, the exchange said, “one of the most damaging effects caused by La Niña in the Pampeana Region (the central farming area) and adjacent areas, is to extend the seasonal drought, which normally takes place during January. The return of the rains could be delayed until mid-March.”
Applied Climatology Consultancy (CCA) meteorologist Germán Heinzenknecht forecasts the summer season to be drier than normal, especially in the agricultural east of Argentina.
Heinzenknecht says La Niña could bring some rains to southern Brazil that might help to refill the Paraná River, a key grains waterway that carries some 80% of Argentina’s farm exports to the sea. Earlier this year, the river hit a 77-year low level earlier due to a historic drought upriver. hindering transport.
Putin and Xi to discuss geopolitics, energy, trade and investment... Russian President Vladimir Putin and Chinese President Xi Jinping are expected to discuss trade, energy, investment, and geopolitics during their video call on Wednesday. China is expected to approve Russia as a supplier of grain to the country, according to Russia-based ag consultancy SovEcon. An announcement could come after the video call.
Russia has cultivated closer ties with China as its relations with the West have worsened, and Putin has used the partnership as a way of balancing U.S. influence while striking lucrative deals, especially on energy. Putin and Xi agreed to extend a 20-year friendship and cooperation treaty earlier this year.
The discussion will take place at a moment of high tension in both countries’ relations with the West, with Beijing under pressure over human rights and Moscow over its build-up of troops near the border with Ukraine.
EU crops off to good favorable start, hardiness a concern... Favorable weather during the past month has allowed most EU crops to get off to a good start, according to the bloc’s crop monitoring service MARS. Above-average temperatures and near-seasonal precipitation in November were favorable for crop emergence and early development in northern and central Europe. France has reported very good early conditions for wheat and barley, though below-normal temps in October hampered some of the early growth of winter wheat in western Europe.
However, a lack of hardiness could leave some of the crop vulnerable to frost, warns the service.
Frost tolerance build-up has been generally weak in central, eastern and south-eastern Europe. MARS noted the risk could be greater in the Black Sea region, where crop development was delayed due to late planting.
India rapeseed production predicted to be up... Rapeseed output in India is likely to rise as much as 29.4% to 10 MMT to 11 MMT in the crop year that ends June 2022, according to the Central Organization for Oil Industry and Trade (COOIT). Favorable weather conditions and higher prices encouraged farmers to plant more area to rapeseed. For the 2020-21 crop year, 8.5 MMT of rapeseed was produced.
India is one of the largest importers of vegetable oils from various crops and countries around the world.
FDA urges U.S. food facilities to register by Dec. 17 to meet China deadline... U.S. companies that currently export certain food products to China are urged to voluntarily submit an application to FDA by Dec. 17 as it seeks to build a list of those companies ahead of a Jan. 1, 2022, shift in Chinese customs rules. China’s General Administration of Customs (GACC) announced the new registration requirement in April 2021 that affects all overseas food manufacturers, processors, and storage facilities of certain food products that export to China.
The new requirement appears to apply to U.S. companies that export foods such as eggs, edible oils, edible grains, nuts and seeds, vegetables, unroasted coffee, functional foods, milled grain products, condiments, dried fruits, foods for special dietary purposes, stuffed wheaten products, casings and bee products.
GACC will continue recognizing current registrations for establishments that export meat and meat products, aquatic products, dairy and infant formula products and bird nests and bird nest products, according to the FDA.
WTO panel rules against India in sugar case... For five sugar seasons between 2014-15 and 2018-19, India provided domestic support to its sugarcane producers at more than the maximum level of 10% permitted by a global agriculture deal and failed to notify a World Trade Organization committee of its sugar export subsidies, a WTO panel ruled.
The case was brought to the international trade organization by sugar producers, Brazil, Australia and Guatemala. India is the second largest sugar producer behind Brazil.
India plans to appeal the panel’s findings. Any appeal action will be stalled since the WTO’s Appellate Body does not have enough judges to function.
