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Argentina temps will be the hottest in about eight years... With temps around 117 degrees, Argentina will likely see its hottest temps on Friday and Saturday since Jan. 23-24, 2014, according to World Weather Inc. Due to the combination of lack of soil moisture and rain with higher temperatures, Argentina’s crops have likely seen the most stress in the past couple weeks it has seen in several years.
World Weather reports crop areas north of southern Cordoba and southern Santa Fe may be in the worst condition except for some cotton areas in Formosa and Chaco, which had more rainfall in December. Southern Cordoba, northeastern La Pampa, southeastern San Luis and northwestern through central Buenos Aires had been in reasonable condition two weeks ago. However, soil moisture levels have been depleted and crop stress has increased. World Weather forecasts cooler temperatures and rain after the heatwave into next week for Argentina. With the forecast, some late corn planting might resume. Longer-term, February’s weather conditions are forecast to gradually come back to a more normal pattern.
In southern Brazil and Paraguay, World Weather reports the weather has become less extreme. It predicts some of the rains from Argentina to move into Rio Grande do Sul next week. While relief will be limited, more showers are expected later in the month. World Weather predicts other Brazilian areas that have been too wet, will have more sunshine and less rain next week. Early-planted bean harvest and safrinha corn and cotton planting will continue trouble-free with favorable weather conditions.
Argentine grain cargoes 30% lighter... Due to a “record” plunge of river levels on the Parana River, Argentine grains ships near Rosario have reduced cargoes by 30%, according to the head of the local ports chamber. That cut means a Handymax ship would carry 13,000 MT and a Panamax 16,000 MT less cargo on the river that is used to transport about 80% of Argentina’s farm exports.
The Parana level had rebounded after hitting a 77-year low in the middle of last year. However, it dropped to a new low at Rosario due to the heat-wave and less rainfall upriver.
Powell: Economy can withstand Fed’s inflation fight... The Federal Reserve’s plans to tighten monetary policy this year shouldn’t undercut strong employment in an economy that “no longer needs or wants” the massive stimulus the U.S. central bank has provided, Fed Chair Jerome Powell said during his U.S. Senate Banking Committee nomination hearing. Any impact of the current Covid-19 surge on the economy is “short-lived” and likely not derailing Fed plans to raise interest rates and decrease its asset holdings this year, he said.
Stabilizing prices will be necessary to keep economic expansion and employment growth underway, according to Powell. He predicted inflation would ease by the middle of this year. The Fed stands ready to prevent the high rate of price increases from becoming “entrenched.” No decision had been made about normalizing policy, but it was likely the Fed would decide to let the balance sheet shrink “sooner and faster” than it did following the 2007-2009 recession, Powell said.
Wall Street banks predict four U.S. interest rate hikes in 2022... Goldman Sachs, J.P.Morgan and Deutsche Bank expect the Federal Reserve to raise interest rates four times in 2022, starting in March. Goldman Sachs expects the Fed to raise interest rates in March, June, September and December. J.P.Morgan expects a raise every quarter.
“I’d personally be surprised if it’s just four increases next year. I think that four increases of 25 basis points is a very, very little amount and very easy for the economy to absorb,” said J.P. Morgan CEO Jamie Dimon.
After the Fed’s December minutes were released, traders priced an 80% chance of an interest rate hike in March. In its December meeting, the central bank noted it would end its bond purchasing program by March and potentially raise interest rates to tame inflation.
World Economic Forum survey paints gloomy global recovery outlook... Only 10% of World Economic Forum (WEF) members surveyed expect the global recovery to accelerate over the next three years. Only 17% are optimistic about the world outlook, according to a survey of about 1,000 business, government and academic leaders.
In the WEF’s annual risks report, climate change was the top danger by respondents. Social cohesion erosion, livelihood crises and mental health deterioration were identified as risks that had increased the most since the start of the Covid-19 pandemic.
Extreme weather was considered the world’s biggest risk in the short term and a failure of climate action in the medium and long term – two to 10 years. Other emerging risk areas outlined in the report are a disorderly climate transition, migration pressures and competition in space.
The annual report is published ahead of the annual WEF meeting in Davos that was postponed from January to mid-2022.
India opens market to U.S. pork imports... USDA and the U.S. Trade Representative announced India has opened its market to U.S. pork imports. The Food Safety and Inspection Service updated its export library on Dec. 30 with the new requirements to allow U.S. pork exports to India, removing a longstanding barrier to U.S. agricultural trade.
The opening of the market to the population of 1.26 billion comes after decades of work. The agreement comes after the U.S. terminated India’s participation in a program that allowed the country access to the U.S. market because it did not provide equitable and reasonable U.S. access to its market, including pork, in 2019. In November at the U.S.-India Trade Policy Forum held in New Delhi, U.S. and India officials discussed the importance of market access for U.S. pork.
EPA proposed rule on canola oil pathways for renewable diesel, jet fuel sent for review... EPA has forwarded to the Office of Management and Budget (OMB) for review a proposed rule regarding canola oil pathways for renewable diesel, jet fuel, naptha and liquid propane gas under the Renewable Fuel Standard (RFS). Under the proposed rule, EPA said it was “providing an opportunity to comment on an analysis of the lifecycle greenhouse gas emissions associated with certain biofuels that are produced from canola/rapeseed oil, specifically diesel, jet fuel, heating oil, naphtha, and liquefied petroleum gas produced from canola/rapeseed oil via a hydrotreating process.”
EPA targeted release of the proposed rule yet this month and a final rule in July, according to the unified regulatory agenda released in December 2021.
Covid slows import and export operations in Tianjin... The Port of Tianjin and the airport have suspended pickup operations for all import containers, freight management companies said, after a small cluster of Covid cases was discovered over the weekend, according to third-party logistics providers in China. Meanwhile, in Shenzhen, authorities are blaming a contaminated import shipment infecting a cargo worker, who then spread the virus to three other people.
Meanwhile, in Zhengzhou, hundreds of thousands of workers at iPhone maker Foxconn’s facilities and Huawei’s research campus in Dongguan are being tested as more Covid cases appear. Zhengzhou is an air cargo hub and restrictions there could cause “massive” issues for shippers, Seko Logistics warned.
Maersk: Cargo delays to persist ... Top container shipping firm, A.P. Moller-Maersk, warned it is still struggling to move goods around the world as the easing of congestion is taking longer than expected. The company noted current Covid-19 outbreaks are impacting its ability to move cargo and expects constraints to continue for some time.
The longest waiting time for container ships to unload or load is the U.S. West Coast as the wait time at the Port of Long Beach is between 38 and 45 days. The company said the Northern Europe area has seen improvement as the wait time at the Port of Antwerp in Belgium dropped from a 10-day wait last week to a two-day wait this week.
ADM partners to build carbon dioxide pipeline... ADM signed a letter of intent with Wolf Carbon Solutions to build a pipeline that would capture and transport carbon dioxide produced at ADM’s ethanol facilities at Clinton and Cedar Rapids, Iowa.
A 350-mile steel pipeline would support its decarbonization goals, capable of transporting 12 million tons of carbon dioxide per year. The carbon would be stored underground at ADM’s sequestration site in Decatur, Illinois. The pipeline would have spare capacity to serve ADM customers looking to decarbonize across the Midwest and Ohio River Valley.
Anaerobic digesters incentives debate heats up... Environmental and the farm industry groups are at odds over proposed tax credits and grants in the “Build Back Better” bill (BBB) to build anaerobic digesters to capture methane and turn it into electricity or compressed natural gas to sell. Dairy farmers and investors say the incentives are a “game-changer” to help farm incomes and reduce fossil fuels. Environmental groups and some Democratic lawmakers argue the incentives help grow large farms, increase greenhouse gas emissions and delay a transition to an all-electric future.
Support from all Democrats in the Senate is needed to pass BBB. Some Democrats like Sen. Cory Booker (D-N.J.) say the money should be targeted to family farmers to build soil health through cover crops and no-till farming. Meanwhile, Sen. Joe Manchin (D-W.Va.) supports clean-energy tax credits like anaerobic digesters.
The spending plan would make digester owners eligible for a 30% tax credit and put billions of dollars into USDA programs that could help digester companies offset their costs. EPA reports there are currently 317 operational manure digesters nationally, up from 141 in 2009.
