Evening Report

Pro Farmer Evening Report: Jan. 19, 2022

Wed, 05 Oct 2022 18:44:12 GMT

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Check our advice monitor on ProFarmer.com for updates to our marketing plan.

Wheat damage expected to be limited due to cold temps... Limited damage will likely occur in HRW and SRW areas with the cold snap across the country, according to World Weather Inc. While temps are forecast to be negative to single digits on Thursday in HRW areas and Thursday and Friday in SRW regions, only areas without sufficient snowcover are at highest risk for winterkill.

In the HRW area, some snow is forecast for Colorado and immediate neighboring regions. However, forecasts are only calling for 0.2 inches of moisture away from the mountains, not enough to change the drought status. Snowcover will be lacking in Nebraska and Kansas, and winterkill concerns would increase if temps get colder than expected.

World Weather predicts another cold wave Tuesday and Wednesday of next week in HRW areas. In SRW areas, World Weather says another threat will evolve during the middle of next week with questionable snowcover to protect the crops.

South Korea lifts Canadian beef import ban... South Korea is lifting its suspension of Canadian beef imports that it imposed after Canada detected an atypical case of bovine spongiform encephalopathy (BSE) in December, Canadian Agriculture Minister Marie-Claude Bibeau said. Last month, South Korea halted shipments after Canada reported its first BSE case in six years. China and the Philippines then followed with beef import suspensions.

Italy issues more ASF containment rules... On Wednesday, Italy introduced the immediate slaughter of pigs and a six-month restocking ban in two northern regions to contain a recent African swine fever (ASF) outbreak, according to the national news agency ANSA. Additional rules include strengthening surveillance and regulation of hunting and other agricultural and pastoral activities within a 10-km radius of the boundaries of the infected area.

Last week, the Italian government issued a hunting ban and several other outdoor activities in 114 rural areas of the northwestern regions of Piedmont and Liguria.

Wall Street banks eye ‘new normal’ for trading revenue... Wall Street banks are expecting trading revenues to settle in a range between pre-pandemic levels and the highs of the past two years, according to bank executives and analysts. Wall Street banks benefited from the influx of cash from the Federal Reserve as traders were looking for ways to invest the money. However, trading revenues dropped at the end of 2021 as the Fed tightened the money supply. Some analysts believe prospects for trading businesses are better than people were anticipating and will remain above 2019 levels.

Scoular ships soybeans out of the new North Carolina export facility... Scoular shipped its first container of soybeans out of its new export facility at the Port of Wilmington in North Carolina, according to company officials. The facility can ship over 100 soybean containers per week. In January 2021, the company announced plans to develop the agricultural transload facility that would be used to transfer bulk agricultural products to containers for export on ocean-going vessels. The company plans to ship soybeans from the facility to Asia.

ARC-PLC unlikely to pay for the 2022 crop... Farmers should not count on an Ag Risk Coverage (ARC) or Price Loss Coverage (PLC) payment for the 2022-crop marketing year, according to University of Illinois farmdoc agricultural economists. Farmers have until March 15 to make their safety net election. If an election is not changed, farmers will automatically be enrolled in the same option as last year.

When making an election and enrollment, the economists explain ARC-CO for soybeans and PLC for corn will give farmers the highest chance of payments. Farmers should also consider their risk management as PLC only covers price and ARC-CO covers revenue. If farmers want to purchase a Supplemental Coverage Option (SCO) crop insurance policy, they must select PLC for the commodity.

U.S. funds to improve waterways, expand ports... The Biden administration announced it would fund improvements to the waterway system and expand ports. More than 500 projects in 52 states and territories will be targeted, according to the White House.

The Army Corps of Engineers plans to complete 15 feasibility studies, the pre-construction engineering and design phase of five projects, and 19 construction projects in Fiscal Year (FY) 2022. Additionally, in FY 2022, 22 new projects will be funded in the construction account. The plan includes $732 million to fund the design and construction of Lock and Dam #25, the southernmost lock and dam on the Mississippi River.

Expanding the shipping capacity at some of the nation’s largest and fastest-growing ports, including the Port of Long Beach, is also part of the projects to get funding.

Mexican science agency recommends reduced glyphosate imports... To phase out the use of glyphosate by 2024, Mexico’s top scientific council recommended a 50% reduction in imports of the herbicide this year. Mexico’s National Council of Science and Technology (CONACYT) advised a maximum import quota of 8.26 million kilograms (kg) for formulated glyphosate and 628,616 kg for the more concentrated technical glyphosate.

In 2020, Mexico President Andres Manuel Lopez Obrador issued an executive order to phase out glyphosate and GMO corn by 2024. He said the country needs to be food self-sufficiency without using glyphosate.

Mexico’s top farm lobby CNA has opposed the plan. It argues neither glyphosate nor GMO corn are harmful to health and that reducing their use could affect farm production.

Pro Farmer Evening Report: April 26, 2022

Wed, 05 Oct 2022 18:44:12 GMT

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Livestock producers: Extend soybean meal coverage… May soybean meal futures dropped below our target at $450.00. We advise livestock producers to cover all soybean meal needs in the cash market through May. Be prepared to extend coverage on further price weakness.

Concerns raised about two controversial cattle market proposals... During a review of two controversial cattle market proposals – the Cattle Price Discovery and Transparency Act of 2022 and the Meat and Poultry Special Investigator Act of 2022 – Sen. John Boozman (R-Ark.), Senate Agriculture Committee ranking member, raised concerns about how the focus on large meatpackers would affect the thousand small packers across the country. He also raised concerns about the impact on the pork, poultry and lamb industries that would be subjected to the same law but did not testify. Boozman noted his concern about the Meat and Poultry Special Investigator Act, sponsored by Sen. Jon Tester (D-Mont.). Boozman was also concerned about not getting an opinion on the bill from USDA’s Office of Chief Economist. The North American Meat Institute, in a statement, urged members of the Senate Ag Committee to reject the Grassley-Fischer bill’s mandates and federal intrusion in the beef and cattle markets. Some producers testified on their differing opinions of the bill and whether it would help or hurt them. Click here for more details on today’s hearings.

U.S. consumer confidence dips in April... U.S. consumer confidence edged down in April, though households planned to buy automobiles and many appliances, which should help to underpin consumer spending in the second quarter. The Conference Board reported its consumer confidence index nudged down to a reading of 107.3 this month from a slightly upwardly revised 107.6 in March. Economists polled by Reuters had forecast the index rising to 108.0 from the initially reported reading of 107.2 in March. The Present Situation Index declined but remains relatively high, suggesting the economy continued to expand in the early second quarter. The Expectations Index, while weak, did not deteriorate further amid high prices.

Canadian farmers plan to plant more wheat, less canola... Canadian farmers are expected to plant 25.0 million acres of wheat in 2022, up 1.6 million acres from last year and 800,000 acres more than traders expected, according to Statistics Canada. Mike Jubinville of MarketsFarm says, “The gain in wheat acres is more than I anticipated... likely attributable to strong prices and high worldwide demand.”

Canadian canola acres are expected to total 20.9 million acres, down 1.6 million acres from last year and 1.2 million acres less than traders’ average estimate. Jubinville says, “This is a bit shocking to me. With demand for canola still very strong, and old-crop carryout likely to be drawn down to dust, without an exceptional yield in 2022, Canadian canola supply will remain quite constrained for the coming 2022-23 marketing year.”

Indonesia’s RBD palm oil export ban details released... Indonesia will ban the export of refined, bleached and deodorized (RBD) palm olein until prices drop below 97 cents per liter. Currently, cooking oil sells for $1.18 to $1.39 per liter. However, the government is prepared to widen its ban if there are shortages. RBD palm olein accounts for about 40% of Indonesia’s total shipments of palm oil products. Crude palm oil exports will be allowed. The policy will be evaluated periodically and will continue to be adjusted as needed. However, some industry officials don’t expect the palm oil export ban to last more than one month as the country has limited storage capacity and buyers are pressuring the government to resume exports. The Indonesian president announced the export ban last Friday without any details. He is facing declining poll numbers and over 60% of the country’s population favored a cooking oil export ban before it was announced.

ADM forecasts tight crop supplies until 2024... Demand will likely continue to outpace supplies for key crops for at least two years, said ADM CEO Juan Luciano during the company’s quarterly earnings call. He expects demand to continue to grow and noted the world needs two “very good” crops in North and South America to become more comfortable with the supply-demand imbalances. Higher crop prices will draw down grain stocks and encourage more South American acres to be planted.

World Bank: Ukraine war commodity price shock to last three years... Global food and fuel price shocks linked to the Russia/Ukraine war are likely to last until at least the end of 2024 and raise the risk of stagflation, the World Bank said in its latest Commodities Market Outlook report. The world faces the biggest commodity price shock since the 1970s the bank said in its first comprehensive analysis of impacts on commodity markets. The World Bank expects energy prices to rise more than 50% in 2022 before easing in 2023 and 2024, while non-energy prices, including agriculture and metals, are seen climbing by almost 20% in 2022 before moderating. Commodity prices will only retreat slightly and stay well above the most recent five-year average for the medium term.

German company organizing ‘grain bridge’ from Ukraine... DB Cargo, a German international transport and logistics company, is organizing a “grain bridge” from the Ukraine to ship grain out of the country and prevent a global famine, reported Handelsblatt. Railways in Germany, Poland, the Czech Republic, Slovakia and Romania are negotiating about how to implement the plan that would likely involve 20,000 trains, each with 52 containers or several thousand tons of cargo. DB Cargo has also offered to transport grain by rail to Adriatic or North Sea coast ports to be shipped to regions most in need, such as Ethiopia, Lebanon and Indonesia.

Romania seeks to revive Soviet-era rail line to boost Ukraine shipments... Romania has issued a tender seeking to rehabilitate a Soviet-era train line connecting its port of Galati on the Danube River to Ukraine to help boost grain exports. The deadline for the tender is May 19 and the work will likely take two months. The rail line to Ukraine via Moldova uses a wider gauge that would allow Ukrainian goods to be shipped easily to the Romanian port. The difference in gauges between Ukraine and Europe has been an issue in moving grain via rail since the war started.

Crop storage could be an issue this fall in Ukraine... Ukraine farmers are likely to face storage issues later this year despite the likely reduction in total production. Due to reduced exports resulting from Russia’s invasion of the country, grain storage facilities will likely be full during this year’s fall harvest. Kyiv-based analyst UkrAgroConsult explained the attack halted corn exports during the country’s peak shipping season. Exports are being done via truck and rail and will likely take at least ten months to ship excess corn supplies. Additionally, 5% of the country’s grain elevators have suffered damage from the war and another 15% can’t be accessed. Earlier harvested crops such as wheat and barley are less likely to be affected than later harvested ones like corn. If the Black Sea ports continue to be blocked into September, some Ukraine farmers might leave their corn in the field until next spring.

Two million children at risk of starvation in the Horn of Africa... Close to 2 million children are at risk of starving to death as the Horn of Africa faces one of its worst droughts in decades, according to U.N. aid chief Martin Griffiths. Parts of Kenya, Ethiopia and Somalia are suffering their driest conditions in more than 40 years. Aid agencies are seeking to avoid the repeat of a famine a decade ago that killed hundreds of thousands of people. A fourth failed rainy season in the region is now a growing probability of making the situation worse. More than 15 million people in the area are already experiencing high hunger levels, and 3 million animals have been lost due to drought.

Pro Farmer Evening Report: Jan. 21, 2022

Wed, 05 Oct 2022 18:44:12 GMT

Click here to view weekly export sales/commitments charts and here to view report details.

Check our advice monitor on ProFarmer.com for updates to our marketing plan.

Your Pro Farmer newsletter is now available... In the Jan. 12 Supply & Demand Report, USDA updated its 2021-22 balance sheets. This week, we give you our updated old-crop balance sheets, along with an initial look at the 2022-23 marketing year. While focus for the U.S. the remainder of the 2021-22 marketing year will be on how much of the supply is used, South American production remains the focal point globally. Recent rains provided some temporary relief for areas of Argentina and southern Brazil, but more is needed... and crop forecasts continue to decline. Traders are also keeping a closer watch on the Russian situation with Ukraine, as an invasion could stir up markets. We cover this and much more in this week’s newsletter, which you can download here .

Hot temps to continue in South America... While some areas of South America received some recent rains, any crop improvement was likely limited as moisture will be lost to evaporation, according to World Weather Inc. Stressful conditions are likely to continue in Paraguay and far southern Brazil through Saturday, with those areas expected to see little to no rain of significance and hot temps.

But some relief might come Sunday and next week. “Rio Grande do Sul will likely see an increase in rain Sunday into Monday, says World Weather. “Paraguay and the remainder of far southern Brazil is predicted to get more rain Tuesday through next Friday. Paraguay will likely see additional rain Jan. 29-Feb. 4, while far southern Brazil will dry down again. Most of the remainder of Brazil will see a mix of rain and sunshine during the next two weeks. Central and southern Minas Gerais and southern Espirito Santo into eastern Sao Paulo will be driest overall and the drying will be beneficial in areas that are still excessively wet.”

In Argentina, frequent rains are predicted through next Thursday, but excessive heat will continue through Tuesday in northern areas, with Chaco and Corrientes missing much of the expected rain. “Central and southern Argentina will see mild temperatures during the next week and with significant rain expected, crop conditions should improve dramatically where crops are still viable,” says World Weather. “Drier weather will return Jan. 28-Feb. 4.”

No breakthrough on Ukraine, but U.S., Russia talks to continue... U.S. and Russian talks in Geneva produced an agreement to keep communication open to defuse the possible military conflict at the Ukraine border. U.S. Secretary of State Antony Blinken warned Russian Foreign Minister Sergei Lavrov of a “swift, severe” response if Russia invades Ukraine.

Russia is waiting on U.S. written responses to its security demands to advance talks. Blinken plans to share U.S. concerns and ideas in writing next week. Blinken and Lavrov agreed to discuss issues after that. Russia’s RIA news agency reported the two sides could hold another meeting next month to discuss Moscow’s demands for security guarantees.

Cattle on Feed Report: Placements heavier than anticipated... USDA estimated there were 12.037 million head of cattle in large feedlots (1,000-plus head) as of Jan. 1, up 70,000 head (0.6%) from year-ago and 94,000 head more than the average pre-report estimate implied. The increase was primarily driven by a 6.5% jump in placements during December, which was above the highest pre-report estimate. December marketings increased 0.2%, which was fractionally less than anticipated.

Cattle on Feed Report	USDA (% of year-ago)	Avg. Trade Estimate (% of year-ago)
On Feed Jan. 1	100.6	99.8
Placements in Dec.	106.5	102.6
Marketings in Dec.	100.2	100.8

The bigger-than-expected jump in December placements appears to have been driven largely by drought in the Plains, as Colorado (+10,000), Kansas (+10,000), Nebraska (+25,000) and Texas (+65,000) accounted for 110,000 head of the 119,000-head increase. Feedlots placed more cattle than year-ago in the four lowest weight categories, with lightweights (under 600 lbs.) up 9.8%, 6-weights up 8.0%, 7-weights up 5.9% and 8-weights up 4.4% from year-ago levels. Feedlots placed 4.5% fewer 9-weight cattle and the same number of heavyweights (1,000-plus lbs.).

A breakdown of feedlots inventories showed steers down 40,000 head (0.5%) and heifers up 110,000 head (2.4%) from year-ago levels. The larger number of heifers in feedlots signals herd contraction continues, at least partially due to drought conditions in pastures.

With all three categories coming in on the bearish side of the average pre-report estimates, the report is price-negative. Given the higher-than-expected increase in movement of cattle into feedlots and the weights of the increased placements, the most pressure will be felt in deferred live cattle futures. But with the increased placements in the lighter categories, it may mitigate the bearishness somewhat since it will spread out marketings. Plus, Cattle on Feed Reports rarely have much lasting price impact on the market and we expect focus to quickly return to wholesale price action and the cash cattle market.

Covid vaccine mandates affecting pig and feed shipments between U.S., Canada... Canadian pigs headed to the U.S. to be fed and slaughtered are getting stuck in Canada, while feed is stranded in the U.S. as new vaccine rules exacerbate a labor shortage for truckers and railroad employees.

Bloomberg reported that many weaned pigs could not be shipped to Iowa, Minnesota and the Dakotas due to the lack of truck drivers. Many of the pigs are shipped out of Manitoba and the providence can’t feed and process a surge of hogs domestically, said Cam Dahl, general manager of Manitoba Pork. Last year, Manitoba shipped about 3 million weaned pigs to the U.S. to be finished.

At the same time, some truck shipments of soybean meal from the U.S. to Manitoba are also being limited. Due to the drought last year, Alberta cattle feeders are also importing large amounts of corn and dried distillers’ grains (DDGs) from the U.S., according to RealAgriculture. Corn has been shipped in via rail, but there have been shipping delays. DDGs are trucked up from Montana.

Canadian livestock producers say the vaccine mandates could worsen the shipping issues. On Jan. 15, Canada’s vaccine mandate took effect, meaning Americans crossing into Canada need to be fully vaccinated and Canadians must quarantine when they return to the country. On Jan. 22, U.S. vaccine mandate rules on Canadians entering the country will take effect.

Ukraine grain exports remain strong... Ukraine exported 36.1 MMT of grain as of Jan. 14, according to ag ministry data, up 27.7% from the same period last year. The total included 16.6 MMT of wheat, 13.7 MMT of corn and 5.4 MMT of barley. Since Dec. 17, the country has exported 6.9 MMT of grain, including 1.3 MMT of wheat, 5.3 MMT of corn, and 300,000 MT of barley.

Ukraine’s ag ministry expects the country to export 65.2 MMT of grain. That would be up nearly 46% from last year’s shipments, which included 23.1 MMT of corn, 16.6 MMT of wheat and 4.2 MMT of barley.

SovEcon: Russian and Ukraine wheat crop estimate unchanged... SovEcon, a Black Sea region ag consulting firm, kept its Russian and Ukraine winter wheat crop estimates unchanged from last month. The firm predicts an 81.3 MMT wheat crop for Russia, compared to 75.9 MMT harvested in 2021. For the Ukraine, a 29.1 MMT wheat crop is expected, compared to 32.1 MMT in 2021. The firm reports temps and precip have been generally favorable for the wheat crop.

U.S. leading economic indicator rises in December... The Conference Board said its Leading Economic Index (LEI) rose 0.8% for December, compared to a 0.7% increase in November. The Conference Board estimated that gross domestic product growth would slow to a 2.2% annualized rate in the first quarter. It forecasts growth of 3.5% for the year. The government’s fourth-quarter GDP snapshot is scheduled to be published next week.

“The U.S. LEI ended 2021 on a rising trajectory, suggesting the economy will continue to expand well into the spring,” said Ataman Ozyildirim, senior director of economic research at the Conference Board. “For the first quarter, headwinds from the Omicron variant, labor shortages and inflationary pressures, as well as the Fed’s expected interest rate hikes, may moderate economic growth.”

Pro Farmer Evening Report: Jan. 24, 2022

Wed, 05 Oct 2022 18:44:12 GMT

Click here to view weekly export inspections charts and here to view report details.

Check our advice monitor on ProFarmer.com for updates to our marketing plan.

Brazil’s soybean harvest reaches 5%... As of Jan. 20, Brazilian farmers had harvested 5% of the country’s soybean crop, up from 0.7% on that date last year, according to ag consultancy AgRural. Most of the harvest progress was in Mato Grosso, the top producing soybean state with “satisfactory” yields.

AgRural says yields in Parana remain low due to drought in the state. Farmers have not started harvesting soybeans in Rio Grande do Sul.

“In the rest of the country, crops are developing well and the harvest is beginning in several states. Despite some losses due to excessive rains in Matopiba (a five-state area located mainly in northeastern Brazil) and Minas Gerais, expectations point to a great crop in all of these states,” AgRural noted.

The firm reported 5% of the safrinha corn crop had been planted, mainly in the Mato Grosso area. Some of the safrinha corn in Parana might need to be replanted due to the lack of soil moisture.

Good growing conditions for European crops but frost tolerance a concern... Most of Europe’s winter crops have benefited from slightly warmer-than-usual temps and average to above-average precip, the EU’s crop monitoring service MARS said on Monday. Winter crops are generally fair to good (or very good). Weather conditions have allowed lagging crop stands to get caught up in their development.

Crops are mostly hardened in northern and east-central Europe. The service reported that hardiness in other areas is a concern, especially in the Black Sea region. Precip has been above average and a cold snap could potentially lead to frost damage.

Dry conditions were noted along the Mediterranean from southern Spain to northern Italy. However, crops yields have not been affected yet. Drought conditions have reduced crop development in northern Africa, including Morocco. MARS said rain is needed in western and central Algeria.

Update on what Vilsack said last week regarding WHIP+... Payouts initially are coming in April or May via the Wildfire and Hurricane Indemnity Program-Plus (WHIP+) program. Congress authorized $10 billion over four months ago with instructions to make the program less complex and to implement accelerated payments versus the lengthy payment process for eligible 2018 and 2019 ag disasters. The coming program impacts eligible 2020 and 2021 crops, livestock and dairy.

Payments will likely be split in two tranches. The first tranche will be “based on information we already have,” Vilsack said. They would be pre-filled applications for grain producers (and) livestock forage data. Then there will be a second tranche to basically make up for whatever the first tranche didn’t cover, or for those who didn’t have Noninsured Crop Disaster Assistance Program (NAP) information or crop insurance information. USDA would then leverage the data it already has on file to calculate the benefit.

The program will still be administered by FSA but the Risk Management Agency (RMA) would calculate the payment for insured producers and pass that dollar amount to FSA to pre-fill an application and apply payment limitations and eligibility provisions, etc.

The second tranche would include opportunities for shallow losses and quality. A producer that receives a pre-filled application under the first tranche could be eligible to apply under the second.

On the livestock side, under the first phase, USDA would leverage LFP data and this would not require a producer to file an application; rather, FSA would just generate a payment based on the information submitted for LFP. Under the second tranche for livestock, USDA would be looking at what other gaps there may be to close them. This approach, meant to avoid FSA having to manually key in information already held by RMA, will save time in getting help out to producers.

Cold Storage Report: Beef stocks build, pork stocks decline... It’s typical for frozen beef stocks to rise during December, though the increase was slightly greater than normal. It’s also normal for pork stocks to decline in December, though the drop was less than average.

As of Dec. 31, USDA reported frozen beef stocks at 503.8 million lbs., up 13.4 million lbs. from November, whereas the previous five-year average was an 8.8-million-lb. increase during the month. However, beef stocks dropped 32.1 million lbs. from December 2020 and were 9.4 million lbs. below the five-year average.

Pork stocks at 398.9 million lbs. dropped 3.2 million lbs. from November versus the five-year average of a 12.8-million-lb. decline during December. Pork stocks fell 17.0 million lbs. from December 2020 and were 93.0 million lbs. below the five-year average.

Total poultry stocks increased 27.8 million lbs. from November to 915.2 million lbs., though that was down 174.1 million lbs. from last year. Chicken breast meat inventories dropped 104.5 million lbs. (40.6%) from last year’s record to 152.6 million pounds.

U.S. oil CEOs differ on output growth... ConocoPhillips CEO Ryan Lance predicted oil output would likely eclipse the record 13 million barrels per day (bpd) reached in late 2019. Occidental CEO Vicki Hollub was more measured in her forecast, saying the U.S. would likely surpass 12 million bpd at some point – but fall short of the all-time record. While speaking at the Argus Americas Crude Summit in Houston, Lance was bullish about markets as high oil prices “will persist for a while.”

The U.S. Energy Information Administration predicts annual crude production will average 11.8 million barrels per day (bpd) this year and 12.4 million bpd in 2023. That average would be a record for a full year, even though it is less than the monthly record of 12.97 million bpd set in November 2019.

Traders watching Fed meeting for interest rate hints... Investors expect the Fed to signal on Wednesday that it plans to raise rates in March, tightening monetary policy for the first time since it slashed borrowing costs to near-zero. Fed funds futures, which track short-term rate expectations, have priced in a total of four rate increases this year, as the U.S. central bank fights to stem soaring inflation.

The Fed will not update its formal outlook after the Jan. 25-26 meeting. However, investors will be listening to the news conference by Fed Chair Jerome Powell after the release of the policy statement for more details about Fed’s plans, current view of the economy and equity markets.

If history is any indication, the Fed will likely try to avoid rattling markets further and raise rates in 25 basis-point increments. The Fed has not raised interest rates by more than 25 basis points in one policy move since May 2000, when it hiked by 50 basis points to 6.5%.

Canadian trucker convoy fights vaccine mandate... A trucker convoy protesting the government’s Covid-19 vaccine mandate for truckers started on Sunday in Vancouver and is expected to reach the Canadian capital city of Ottawa on Jan. 29.

Under the vaccine mandate, the Canadian Trucking Alliance (CTA) estimates as many as 32,000, or 20%, of the 160,000 Canadian and American cross-border truck drivers may be taken off the roads. However, the organization does not support any protests on public roadways and the only way to cross the border on a commercial truck is by getting vaccinated.

Pro Farmer Evening Report: April 29, 2022

Fri, 29 Apr 2022 19:53:14 GMT

Check our advice monitor on ProFarmer.com for updates to our marketing plan.

Your Pro Farmer newsletter is now available... The U.S. is ramping up food aid to those impacted by Russia’s invasion of Ukraine via USDA and the U.S. Agency for International Development initiatives. President Joe Biden also proposed $33 billion in additional aid, including $500 million to encourage U.S. farmers to increase production of crops such as soybeans and wheat to address global food shortages. While food shortage concerns around the world mount, USDA again raised its U.S. food price forecasts. U.S. weather will remain wet into early May, further delaying corn planting, that’s already the slowest for the date since 2013. Meanwhile, congestion and service issues have become a “real problem” for industries across the country that need rail to move their goods, including agriculture. We cover these issues and much more in this week’s newsletter, which you can access here .

EPA issues E15 summer emergency waiver... EPA issued an emergency waiver for E15 summer sales on Friday to help lower gas prices. The waiver goes into effect on May 1 and must be reviewed every 20 days. The White House says E15 can save consumers on average 10 cents per gallon at current prices. The waiver comes after President Joe Biden announced he would have EPA issue the waiver during his visit to an Iowa ethanol plant last month. Eight Midwest governors wrote EPA to request allowing year-round E15 sales in their states this week.

Hard freeze threatened Argentina’s crop... Argentina had another round of frost, with some crop areas having a hard freeze Friday morning, according to World Weather Inc. While the country had earlier frosts, today’s cold was more significant, impacting Buenos Aires and La Pampa with some hard freezes. Those hard freezes could end the growing season and threaten more immature late-season corn and soybeans with quality issues. A small part of the corn crop was still in the dough stage. The hard freeze could have helped the early soybeans by assisting them in dropping leaves, leading to faster harvest progress in May. The more immature late-season soybean crop was in varying stages of development. Some of the potential effects on the late-season soybean include reducing bean quality, more blackened beans and decreased oil content.

Weather extremes hampering Canadian planting progress... Farmers in Canada are struggling to plant crops in fields that are either too wet or too dry in the Prairie provinces. One-quarter of the cropland in Alberta, or 44 million acres, is in a significant drought, including major growing areas for spring wheat, barley and durum, according to Agriculture and Agri-Food Canada. In Manitoba, two-thirds of growing regions, another 21 million acres, suffer from excess moisture after back-to-back storms. There has been flooding in Manitoba and more rain is forecast over the weekend. World Weather Inc. predicts a strong ridge of high pressure for the latter part of next week into the following weekend resulting in temperatures well above average and limited rainfall across the Canadian Prairies. Immediately following the mini-heatwave, World Weather forecasts a good chance for rain in the southwestern Prairies to help improve growing conditions.

Ukraine farmers making planting progress... Ukraine farmers have planted 775,000 hectares of corn as of today, according to Ukraine’s agriculture ministry. That compares to the 1.07 million hectares by the same time last year when the country planted 5.4 million hectares of corn. For other crops, 175,800 hectares of spring wheat, 838,000 hectares of barley, 144,000 hectares of oats and 116,300 hectares of peas have been planted. The ministry did not provide total planted area or crop production forecasts. The ministry reported early spring planting was complete in six of the country’s 24 regions. There are no plans to plant crops in the Luhansk region and the total planted area is expected to be down 20% this year from last year due to the war.

Ukraine grain exports picked up in April, but still far below pre-war levels... Ukraine exported 763,000 MT of grain in April, compared to the 300,000 MT it shipped in March and the 6 MMT a month before Russia invaded the country. Ukraine’s April grain exports included 115,000 MT of wheat, 622,000 MT of corn and 25,000 MT of barley. Since July 1, Ukraine has exported 45.709 MMT of grain, including 18.5 MMT of wheat, 21.1 MMT of corn, and 5.7 MMT of barley. Ukraine’s agriculture ministry resumed publishing grain export information today. The ministry did not clarify how grain was delivered. Since the Russian invasion, the country has been working to secure alternative ways to ship grain as seaports are shut down.

India allows remaining GMO soymeal imports... India has allowed an extra 550,000 MT of genetically modified (GM) soymeal imports to help its poultry producers deal with a surge in animal feed prices, Reuters reported. The shipments need to be imported before Sept. 30. In August 2021, the government allowed the import of 1.2 MMT of GM soymeal. Indian importers were able to purchase 650,000 MT before the Oct. 31, 2021, deadline. The Indian poultry association had asked the government to allow the import of the remaining 550,000 MT of soymeal. The Soybean Processors Association of India opposes allowing GM soymeal imports since the country does not allow farmers to grow any GM crops.

Fed likely to slow rate hikes after May and June meetings... The Federal Open Market Committee will likely raise its benchmark rate by 50-basis points after its May 3-4 meeting and do so again in June – the first hikes of that size since 2000 – then downshift to a series of 25-basis-point moves during the second half of the year, according to a Bloomberg survey of 48 economists. The survey forecasts the Fed will lift rates to a target range of 2.25% to 2.5% by December, while markets are pricing in around 2.75% at year’s end. The last published forecasts by the Fed in March showed rates rising to 1.9% this year and 2.8% in 2023. The economists see Fed rates peaking at 2.88% in December 2023. The vast majority of economists surveyed saw little appetite for a 75-basis-point hike, which the Fed last delivered when Alan Greenspan was chair in 1994. The economists also expect The U.S. central bank to start shrinking its $9 trillion balance sheet in May.

Consumer Sentiment Index rises from March... University of Michigan’s Consumer Sentiment Index final survey for April had a reading of 65.2, a tad below the estimate released earlier in the month of 65.7 but well above March’s reading of 59.4, the worst level in over a decade. The Consumer Expectations Index came in at 62.5, a little below the earlier estimate of 64.1 but above last month’s reading of 54.3. The Current Conditions Index came in at 69.4, better than the earlier estimate of 67.8 and higher than the previous month’s 68.1 reading. The gauge of one-year inflation expectations remained unchanged at 5.4%, while the gauge for five-year inflation expectations was also unchanged at 3.0%.

U.S. inflation hits 40-year high...The personal consumption expenditures price index, which the Federal Reserve uses for its inflation target, advanced 0.9% from a month earlier and 6.6% from March 2021, the most since 1982, the Department of Commerce reported. Unadjusted for inflation, spending rose 1.1% from the prior month, while incomes increased more than expected. The median forecasts in a Bloomberg survey of economists called for a 0.1% decrease in inflation-adjusted spending from the prior month and a 6.7% rise in the price index from a year ago. The core PCE (minus food and energy prices) increased 5.2% from last year but declined 0.1% versus February.

Euro zone inflation hits new record high... Euro zone inflation rose to 7.5% in April from 7.4% in March, in line with expectations, driven by an ongoing surge in energy and food prices, data from European Union statistics agency Eurostat showed on Friday. Although volatile energy costs were the most significant contributor, the energy inflation rate declined compared to March. Price growth in food, services and non-energy industrial goods accelerated further, suggesting inflation is increasingly broad-based. Excluding food and fuel prices, core inflation that is closely watched by the European Central Bank (ECB), rose to 3.9% from 3.2%, while a narrower measure that excludes alcohol and tobacco products jumped to 3.5% from 2.9%. Both figures were well above expectations.

Vilsack defends budget request at House hearing... USDA Secretary Tom Vilsack defended USDA’s FY 2023 budget request, saying the topline $23.6 billion budget, $2.2 billion (10%) more than FY 2022 enacted levels, is needed at a House hearing on Thursday. He explained both discretionary and non-discretionary spending at the department has grown slower than the average across all federal agencies. He flagged the need to hire new staff in USDA’s Rural Development office, Natural Resources Conservation Service (NRCS), and other consumer-facing agencies as key — detailing that 5,300 fewer people work at USDA today than at the end of the Obama administration. Vilsack defended USDA’s projection that SNAP participation will increase by 1.2 million people next year. He explained one reason for the increase is USDA’s plan to boost outreach to people who may qualify for SNAP but do not currently collect benefits. He also stressed the need for agricultural research funding as he warned the U.S. is falling behind countries like China.

Sanford Bishop (D-Ga.), House Appropriations Agriculture Subcommittee chair, was pleased with the budget request that “continues to build” on climate, research, equity, and other efforts funded in previous budgets. However, Ranking Member Andy Harris (R-Md.) noted it includes little to address critical issues brought by surging inflation, transportation and export challenges, high fertilizer costs, and a possible global food crisis from Russia’s invasion of Ukraine. Harris also said he wants more oversight of non-discretionary spending at USDA, pointing to changes to the Thrifty Food Plan that “unilaterally increased spending $20 billion a year on SNAP.” He added that he eagerly awaits a GOP-requested Government Accountability Office (GAO) review of those changes.

USDA paid out $146 million in bird flu indemnities... USDA has paid out about $146 million in indemnities to poultry owners, with an additional $263 million available, USDA Secretary Tom Vilsack told the House hearing on Thursday. “That’s about half of where we were in 2014-2015 with the last outbreak,” he said, referring to the highly pathogenic avian influenza (HPAI) epidemic that killed more than 50 million turkeys and egg-laying chickens. Vilsack hopes the warming temps will see an abatement of the virus. So far, this year’s avian influenza outbreak has topped 35 million fowl.

Food aid might cost more to ship than purchase... USDA Secretary Tom Vilsack told a House hearing on Thursday he is concerned the cost to ship food aid will be more than it is for the purchases. He was successful in reducing some shipping food aid shipping costs. The shipping costs are high partly because of cargo preference requirements that the food move on U.S. carriers. “I’m not sure that I have the authority as secretary to waive those provisions,” Vilsack said. Overall, Vilsack thinks the budget “provides the resources to do what we think is necessary” for food aid purchases.

Pro Farmer Evening Report: April 28, 2022

Thu, 28 Apr 2022 20:33:30 GMT

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U.S. GDP unexpectedly contracts... The U.S. gross domestic product (GDP) contracted at a 1.4% annualized rate in the first quarter, following a 6.9% increase at the end of last year, the Commerce Department’s preliminary estimate showed Thursday. The average projection in a Bloomberg survey of economists called for a 1% increase. The contraction was due to a jump in imports and a drop in exports, coupled with a slower buildup of businesses’ stockpiles. On a year-over-year basis, the economy grew 3.6%.

Ag production incentives part of Ukraine assistance request... President Joe Biden proposes spending $500 million to encourage U.S. farmers to increase production of crops such as soybeans and wheat to address global food shortages. This is part of the $33 billion Ukraine assistance request. The production incentives would include a temporary increase in marketing assistance loan rates and incentive payments through crop insurance to encourage farmers to double-crop wheat. The higher loan rates would apply to “wheat, edible oilseeds including soybeans, and rice to encourage greater supply availability for humanitarian needs or export,” the summary says. The supplemental request includes $1.6 billion earmarked for the U.S. Agency for International Development for emergency food aid and humanitarian assistance. The Agriculture Department would get another $100 million for the Food for Progress program and $20 million for the Bill Emerson Humanitarian Trust.

Vilsack transfers $263 million from CCC to APHIS due to bird flu... USDA Secretary Tom Vilsack transferred $263 million from Commodity Credit Corporation (CCC) funding to assist USDA’s Animal and Plant Health Inspection Service in response to highly pathogenic avian influenza (HPAI). The transfer allows APHIS to continue its work with state and local partners to quickly identify and address cases of HPAI in the United States. This follows a mid-March approval of $130 million in emergency funds. The Secretary is authorized to transfer funding from available resources to address emergency outbreaks of animal and plant pests and diseases. HPAI has been confirmed in 29 states, affecting more than 33 million domestic birds.

Midwest governors request year-round E15 sales... Eight Midwest governors have sent a letter to the EPA requesting E15 to be allowed year-round in their states. Under the Clean Air Act, governors have the authority to ask EPA to equalize the summer regulations for E10 and E15. E10 and E15 are currently regulated differently, allowing oil refiners to game the system by not supplying the proper gasoline to blend for summer E15. The governors are pursuing this route to enable year-round E15 sales permanently. The governors of Illinois, Iowa, Kansas, Nebraska, North Dakota, Minnesota, South Dakota and Wisconsin noted E15 sales would help lower gas prices. Combined, these eight states account for more than 10% of U.S. gasoline use – a market larger than California. According to the Renewable Fuels Association, the states involved are also home to 57% of the nation’s 2,512 stations currently selling E15.

Winter wheat drought area decreases... The amount of U.S. winter wheat considered in drought conditions dropped one point to 69% for the week ended April 26, according to the U.S. Drought Monitor. USDA said winter wheat drought was 12% “moderate,” 31% “severe,” 23% “extreme” and 2% “exceptional.” Last week, USDA rated winter wheat drought as 16% “moderate,” 30% “severe,” 21% “extreme” and 2% “exceptional.”

For HRW areas, the area considered abnormally dry/drought in Kansas increased five points to 79%. Oklahoma dropped three points to 77%. Texas’s abnormally dry/drought area decreased by two points to 94%. South Dakota had 86% of its land classified as abnormally dry/drought, a one-point decrease.

In SRW areas, Arkansas had a four-point drop to 17% of its area considered abnormally dry/drought. Illinois had 8% of its land classified as abnormally dry/drought, a two-point drop. North Carolina had 43% of its area classified as abnormally dry/drought, a one-point decrease.

Drought area for spring-planted crops declines... The percent of U.S. corn considered in drought dropped by six points to 23%. Iowa had 15% of the state in drought, a 13-point decrease. Illinois had an eight-point drop in the amount of its corn crop in drought to 0%. None of Minnesota’s corn area is in drought, a seven-point drop from last week.

USDA said 15% of the soybean crop area is in drought, down four points from the previous week. Illinois had none of its soybean acres in drought, down four points from last week. Sixteen percent of Iowa’s soybean acres are in a drought, a ten-point decrease from last week. Minnesota had a six-point drop to none of its soybean in drought.

Spring wheat had a five-point decline in the amount of the crop in drought to 35%. North Dakota had 6% of its spring wheat area in drought, down eight points from the previous week. South Dakota decreased the amount of its spring wheat in drought by eight points to 50%.

The amount of cotton in drought remained steady at 55%. Texas had 93% of its cotton acres in drought, down four points from last week. Georgia had an eight-point increase in the amount of its cotton crop in drought to 32%.

Unilever changes oil in some recipes... As a shortage of sunflower oil ripples through the global food industry, Unilever said it had altered some of its recipes to substitute rapeseed oil, which could help it save money as input costs soar. Due to tight supplies of sunflower oil, food makers are moving to replace it with alternatives like rapeseed or soybean oil. Unilever counts edible oils as the “most significantly impacted commodity sector” it deals in. Sunflower oil is listed as an ingredient in several Unilever products. France is giving companies up to six months to update product labels to reflect recipe changes if they replace sunflower oil.

Ukraine reaches an agreement to export through Bulgaria... Ukraine and Bulgaria reached an agreement on transporting Ukrainian grain via the Bulgarian port of Varna, Ukrainian President Volodymyr Zelenskyy said after talks on Thursday with Bulgarian Prime Minister Kiril Petkov. He gave no timeline and provided no details of the volumes of grain to be shipped via Varna on the Black Sea.

Russia accused of stealing Ukrainian grain... Ukraine accused Russia on Thursday of stealing grain in the Kherson region, whose main city has been occupied by the Russian forces since the early days of the Russian invasion on Feb. 24, Reuters reported. In a separate statement, the Ukrainian Prosecutor General’s office said it had opened a criminal case into allegations that Russian soldiers, threatening violence, had on April 26 taken away 61 MT of wheat from an agricultural enterprise in the Zaporizhzhia region of southern Ukraine. The Ukraine government called on Russia to stop stealing grain, unblock Ukrainian ports, restore freedom of navigation and allow the passage of merchant ships. The Russian government said it had no information on the matter.

Ukraine wheat production cut, corn crop increased... SovEcon, a Black Sea region consulting firm, reduced its 2022 Ukrainian wheat production forecast by 500,000 MT to 23.1 MMT. In 2021, the country produced 32.1 MMT of wheat. The cut was mainly due to a 300,000-hectare reduction of likely harvested wheat area to 6.5 million hectares due to the large-scale Russian offensive in Southeastern Ukraine.

The firm increased its Ukraine corn production estimate by 1.4 MMT to 25.8 MMT. The country produced 42.1 MMT of corn last year. The corn area was increased by 200,000 hectares to 4.4 million hectares. Russian troops leaving key corn-growing regions in northern and central Ukrainian regions and ample precipitation are the main reasons for the increased corn production forecast.

Higher retail meat prices will test consumer demand... U.S. consumer demand for retail meat remains exceptionally strong despite higher prices stemming from increased production costs and supply-chain limitations. However, once the full effects of producer price inflation finally hit retail meat cases, consumer demand for meat will be tested again, according to a new report from CoBank’s Knowledge Exchange. The report expects retail meat prices will remain elevated throughout 2022. With combined cutout values of beef, pork and chicken climbing 22% year-over-year for the first quarter of 2022, consumers will see higher prices in the meat case. Higher overall inflation might significantly change consumers’ willingness to pay for red meat. If that turns out to be the case, the U.S. broiler industry may yet again be well-positioned for modest growth and strong margins.

For retailers in 2022, they might feature more value items like ground beef, hot dogs and sausage items. As grilling season enters full swing, retail meat departments’ focus will likely shift to profit margins over volume sales this year, increasing creativity in the meat case. Rather than vying for consumer dollars through aggressive price points, “no price” features will be an attractive solution for retailers.

OPEC+ likely to stick to existing deal, raise June output... OPEC+ is expected to stick to its current deal and agree to another slight output increase for June when it meets on May 5, Reuters reported. Under an agreement reached in July last year, the cartel is set to increase output targets by 432,000 barrels per day (bpd) every month until the end of September to unwind its remaining production cuts. Last month, it agreed to go ahead with the planned output increase for May. Major consumers have been pressing the group to boost output faster. However, the cartel has been struggling to produce at its agreed targets, a trend that is likely to continue. It produced 1.45 million bpd below its production targets in March.

Major Brazilian soybean grower to cut fertilizer use... One of Brazil’s largest farmers plans to reduce fertilizer use by a quarter next season, relying on more precise applications and soil testing to maintain crop yields, Bloomberg reported. SLC Agricola SA, which cultivates an area bigger than Delaware with soybeans, corn and cotton, will probably use between 20% and 25% less fertilizer in 2022-23 without jeopardizing yields, according to company officials. Many farmers are considering cutting fertilizer usage due to higher prices and shortages. According to fertilizer industry sources, only about 15% of Brazil’s agriculture areas may sustain itself without fertilizers.

Pro Farmer Evening Report: April 27, 2022

Wed, 27 Apr 2022 20:14:31 GMT

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Indonesia changes palm oil export ban details – again... Indonesia announced today its palm oil export ban will now include crude and refined palm oil. The announcement flipped the minister’s statement a day earlier, in which he had said the export ban would only cover refined, bleached and deodorized palm olein. Indonesia deployed navy ships and personnel to thwart illegal shipments. The export ban will be reviewed monthly or as often as needed but is unlikely to last more than a month due to limited infrastructure to store the surplus oil and mounting pressure from buyers to resume shipments, industry officials said.

Palm oil export ban re-ignites biodiesel debate... Indonesia’s palm oil export ban has re-ignited the discussion of using cooking oils to make biodiesel. The Malaysian Palm Oil Board said countries should cut back on using edible oils for biodiesel. However, the Malaysian Biodiesel Association countered that the country should not cut its biodiesel mandate as it would lead to a crash in crude palm oil prices. Indonesia and Malaysia are the world’s top palm oil producers, accounting for around 85% of global output. Both countries make it mandatory for biodiesel to contain a certain amount of palm oil. The Pakistan Edible Oil Refiners Association has also called for Indonesia to cut back its use of palm oil for biodiesel instead of imposing an export ban.

Part of Brazil’s safrinha corn facing dryness concerns... Mato Grosso, Brazil’s top safrinha corn producer, is facing its driest April in 17 years, according to weather service EarthDaily Agro. Accumulated April rainfall for the state is expected to be 70% below the ten-year average. The weather service noted the Normalized Difference Vegetation Index (NDVI) has deteriorated slightly in recent days and soil moisture levels are low and expected to drop even further, potentially cutting the corn yield. Neighboring Goias is expected to have an 85% reduction in April rainfall.

Heatwave throughout India... India is getting too hot too early, raising the risk of fires, Prime Minister Narendra Modi warned on Wednesday, as a heatwave gripped much of the country. Extreme heat has swept across large areas of India and Pakistan this week and follows the hottest March since the India Meteorological Department (IMD) began keeping records 122 years ago. Near the capital New Delhi, temperatures have soared past 40 degrees Celsius (104 Fahrenheit) for several days. They are forecast to linger around 44C (111 Fahrenheit) until Sunday, with peak summer heat still to come before cooling monsoon rains arrive in June. The typically humid eastern Indian states have been the worst hit, with temperatures above 43C (109 Fahrenheit) on Wednesday. IMD warned that conditions were likely to worsen in the next four days.

India might consider a cotton export ban... India’s government may impose a temporary ban on cotton exports if prices continue to surge, textiles secretary Upendra Prasad Singh told Mint, an Indian financial daily newspaper. The statement comes when the Indian textile Industry is reeling under a spike in cotton and yarn prices, impacting production and exports. However, he cautioned a move should not be a knee-jerk reaction and an export ban would be an extreme step. The statement comes after India suspended import duties until September.

India approves fertilizer subsidy... India will provide a $7.96 billion subsidy for phosphatic and potash-based fertilizers over the coming months to insulate farmers from higher global prices. The subsidy will cover the period to September 2022. India provided a subsidy of $7.47 billion for the previous 12-month period ending March 31. A subsidy of $32.68 for each 50 kg bag of the crop nutrient diammonium phosphate will retain the price at $17.64 in local markets, the minister said, detailing the decision taken by the federal cabinet.

Attaché cuts Argentine soybean crush, raises next year’s acreage... USDA’s attaché in Argentina reduced the country’s projected soybean crush to 38.9 MMT due to reduced imports from Paraguay. The office also expects Argentine farmers to plant 17 million hectares (HA) to soybeans for next year’s crop, projecting production to 51 MMT as farmers shift acreage out of cereal crops that require more fertilizer. The post kept 2021-22 soybean production unchanged at 41 MMT. The post also expects farmers to increase their sunflower seed acres to 2 million hectares with total production estimated at 4 MMT in response to high prices for the 2022-23 marketing year.

The attaché cut Argentina’s corn production forecast to 51.5 MMT for the 2021-22 marketing year, 1.5 MMT lower than the official USDA projection. The post expects farmers to harvest 52 MMT of corn for the 2022-23 marketing year, despite planting 6.75 million hectares, a drop of about 550,000 hectares from the planted area in 2021-22. Corn exports are forecast at 38 MMT for 2022-23, the second-highest on record and slightly higher than 2021-22.

Mexico inflation measure to include farmer assistance... Mexico’s plan to fight inflation will consist of extra fertilizer and other aid to increase domestic food supplies. Mexico’s government is in talks with companies to reach price agreements on essential goods amid the fastest inflation in two decades. The government is seeking a deal with major Mexican businesses on the price of 24 items including rice, corn, beans and milk. The plan doesn’t involve imposing a price limit without the sellers’ consent. The government is reaching agreements with major food item producers and distributors, with stores to help without establishing price controls. The plan will be presented formally in a week.

EU looks to remove Ukraine trade tariffs and quotas... The EU has proposed temporarily removing all remaining tariffs and quota requirements on Ukrainian exports in an effort to bolster the war-torn nation’s economy. The proposal also includes the temporary removal of existing tariffs and quotas on steel, industrial goods and agricultural products currently not covered by the EU’s trade agreement with Ukraine. Since 2016, Ukraine and the EU have had a free trade deal to eliminate tariffs or quotas. The proposal will need to be agreed by all 27 member states and the European Parliament before it comes into force.

Deutsche Bank raises interest rate expectations, recession risk... Deutsche Bank AG economists expect the Federal Reserve to move interest rates into the 5% to 6% range. The bank expects the U.S. to slide into a “deep recession” by late next year. That includes unemployment ultimately rising “several percentage points.” The economists are much more pessimistic than most other major forecasters by their own admission. Goldman Sachs Group Inc. estimated the chances of a contraction at about 35% over the next two years. Bloomberg Economics’ recession-probability model has estimated a 44% chance of recession before January 2024.

Beef cow slaughter numbers above average... Beef cow slaughter for the year to date is up 17.5 percent year over year, according to Derrell Peel, Oklahoma State University Extension livestock marketing specialist, in his weekly “Cow Calf Corner” newsletter. He says combined with a large number of heifers in feedlots and the fact that heifer slaughter is up 2% year over year thus far in 2022 suggests that female numbers are being pulled down even before the worst drought impacts are felt. Perhaps the ongoing drought, carried over from 2021 for many producers, combined with strong feeder cattle and cull cow prices is prompting early adjustments in herds. At the current pace of cow slaughter, the beef cow herd could decrease up to 4% year over year in 2022. This would be the largest yearly decrease in the beef cow inventory since the 1980s. The pace of cow slaughter may slow in the second half of the year but is expected to remain strong in the second quarter and significant herd liquidation seems inevitable this year.

Biden administration to release $670M in international food aid... USDA and the U.S. Agency for International Development are providing $670 million in food assistance to countries in need “as a result of [Russian President Vladimir] Putin’s unprovoked invasion of Ukraine,” USDA said in a statement. The Bill Emerson Humanitarian Trust will provide $282 million to bolster existing emergency food operations in Ethiopia, Kenya, Somalia, Sudan, South Sudan and Yemen. USDA will provide $388 million in additional funding through the Commodity Credit Corporation to cover ocean freight transportation, inland transport shipping and other associated costs.

CME Group to launch Canadian wheat futures... CME Group announced it will launch Canadian wheat (Platts) futures on June 13, pending regulatory review. This contract will offer market participants a new tool to directly manage exposure to the Canadian wheat market. Canadian wheat futures will be cash-settled and will closely track the shipment of grains from Vancouver, where the bulk of Canadian western red spring wheat is exported today. The Canadian wheat contract will be based on the Platts CWRS (Canadian Western Red Spring) Wheat for Number 2 CWRS 13.5% protein FOB Vancouver daily price assessment.

Pro Farmer Evening Report: April 25, 2022

Mon, 25 Apr 2022 21:15:18 GMT

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Winter wheat conditions continue to worsen... USDA rates 27% of the U.S. winter wheat crop as “good” to “excellent” as of Sunday. That was down three points from the previous week and also three below the average estimate from a Reuters survey. USDA rates 39% of the crop as “poor” to “very poor,” an increase of two points from the previous week.

	This week	Last week	Year-ago
Very poor	20	19	6
Poor	19	18	13
Fair	34	33	32
Good	24	27	43
Excellent	3	3	6

USDA reported that 11% of the winter wheat crop has headed, five points behind last year and eight points behind the five-year average.

Corn planting falls further behind... USDA reports 7% of the U.S. corn crop was planted as of Sunday, compared to 4% last week and 15% for the five-year average. Analysts expected 9% of the nation’s crop to be planted. According to USDA, Iowa had 2% of its corn planted, 16 points behind last year and 13 points behind average. Illinois also had 2% of its corn in the ground, 19 points behind both last year and the average. Nebraska had 10% of its corn planted, five points ahead of a year ago and one point behind average. Minnesota farmers still did not have any corn planted, 16 points behind last year and 10 points behind average. Indiana had 1% of its corn planted, 12 points behind last year and 10 points behind average.

Nationally, two percent of the corn has emerged, one point behind both last year and the average.

Soybean planting also lagging... USDA said farmers have 3% of the soybean acres planted as of Sunday. That is four points behind last year, two points behind average, but in line with what traders expected. Illinois had 1% of its soybeans planted, 15 points behind last year and seven points behind average. Iowa reported 1% of its soybeans planted, four points behind last year and three points behind average. Minnesota reported none of its soybeans were planted, two points behind last year and one point behind average. USDA says Indiana soybean planting had not started, eight points behind last year and four points behind average. Nebraska has 3% of its soybean crop planted, equal to both year-ago and the five-year average.

Cotton planting pace slightly ahead of normal... USDA said farmers had 12% of U.S. cotton acres planted as of Sunday. That is one point ahead of the five-year average. Texas has 19% of its cotton acres seeded, up two points from the same time last year and four points ahead of the five-year average. Georgia has 3% of its cotton crop planted, four points behind and the five-year average.

Spring wheat planting remains behind... Farmers have 13% of U.S. spring wheat in the ground, up five points from the previous week, but two points behind the five-year average and one point behind traders’ expectations. North Dakota had 4% of its spring wheat planted, four points behind the five-year average. Montana farmers have planted 18% of their spring wheat, four points ahead of the five-year average. Minnesota has none of its spring wheat seeded, eight points behind the five-year average. South Dakota farmers have 36% of their spring wheat planted, one point ahead of average. Idaho farmers have 37% of their spring wheat planted, 16 points behind the five-year average.

Midwest planting conditions expected to improve... World Weather Inc. predicts the Midwest will see a mix of rain and sunshine during the next two weeks. The forecaster says fieldwork will improve overall and some planting should happen between rain events. The wettest period will occur from Friday to Thursday, May 5, with two rounds of rain predicted. Widespread rain is expected Friday through Sunday and another round May 3-5 before drying out May 6-9.

The Delta and Southeast are predicted to see a few rounds of rain during the next two weeks. World Weather forecasts planting should make progress between the rain events. However, planting could remain sluggish at times in the Delta.

USDA reports a higher Food Producer Price Index... USDA reported unprocessed foodstuffs and feedstuffs had the largest increase from February to March at 6.2% in its Food Price Outlook Producer Price Index. The category had a 35.2% increase in the past year and has an 18.2% increase year-to-date average over 2021. In its forecasts for 2022, the largest increase from last month was a 20-point increase for farm-level wheat to be up 40% to 43% in 2022. Wholesale fats and oils had a 13-point increase from March to a 40% to 43% price jump this year. Wholesale wheat flour is predicted to increase 21.0% to 24.0% in 2022, up nine points from last month. Farm-level soybeans were increased by 3.5 points to 12.0% to 15.0% in 2022. Wholesale poultry was increased by 3 points to a 12.0% to 15.0% increase. Farm-level milk is predicted to increase 2.0% to 5.0% in 2022, up 2 points from March. Farm-level eggs, wholesale pork and farm-level cattle predictions were unchanged from the previous month. USDA expects wholesale beef producer prices to increase 2.0% to 5.0% in 2022, down two points from last month’s forecast.

USDA raises 2022 consumer food price outlook... USDA predicts consumer food prices will increase 5.0% to 6.0% in 2022, up 0.5 points from its last month’s projection. USDA reported consumer food prices rose 1.0% from February to March and 8.8% in the past 12 months. In its updated 2022 forecast, all food categories were higher except for consumer food prices away from home, which is the same as last month at a 5.5% to 6.5% increase. Consumer egg prices had the largest increase from last month, up 3.5 points to a 6.0% to 7.0% increase this year. Consumer beef and veal prices were increased by 3.0 points at 6.0% to 7.0% increase for 2022. Consumer poultry prices were increased by 1.5 points to 7.5% to 8.5% above last year. Pork prices are expected to increase 4.0% to 5.0% from year-ago.

Russia blocks economic data releases... In an effort to hide the effects of Western sanctions, Russia has stopped publishing some of its economic data, the Wall Street Journal reported. Last week, its Federal Customs Service suspended its monthly publication of data on exports and imports. The data normally contains thousands of categories of goods and services that Russia imports and exports, including agricultural and energy commodity information. Russian lawmakers are also working on a bill banning lenders from sharing data with foreign states. The government still publishes inflation, GDP and other mainstay figures. Economists expect Russia to impose more data restrictions in the future.

Floating mines reduce Danube River shipping... Ukrainian border guards last week closed several shipping lanes at the mouth of the Danube River due to drifting mines in the Black Sea, according to APK-Inform agriculture consultancy. Last week, the Danube ports of Izmail and Reni remained the only sea routes for Ukrainian grain exports after seaports were blocked due to the Russian invasion. Ukrainian agriculture and transport officials are seeking to boost Danube River ports’ export capacity, which would allow shipping grain through the Danube to Romanian Black Sea ports.

Mexico to release plan to be more food self-sufficient... Mexico President Andres Manuel Lopez Obrador will present a plan that will make the prices of Mexican staples less exposed to foreign markets, reported Bloomberg. Boosting domestic food production and reducing global price swing exposure are goals of the plan. He does not want to cut Mexico’s connections to international suppliers or impose tariffs. Consumer prices can be kept down by giving government assistance to farmers and developing a plan with private businesses. Obrador said the country needs to plant corn beans, and rice to be self-sufficient and help control inflation.

CME Group will reset daily trading limits on May 2... CME Group announced some price limits for grains and oilseeds would be reset starting May 1 for the trade date of May 2, 2022. This is part of the usual semi-annual review of limit resets that occurs on May 1 and Nov. 1. Daily corn limits will change from 35 cents per bu. to 50 cents, with the new expanded limit moving to 75 cents. Soybean future limits will increase to $1.15, up from 90 cents with a $1.75 expanded limit. The daily limit for SRW and HRW wheat futures will drop 15 cents from the current level to 70 cents with expanded limits of $1.05. The soyoil limit would increase from 40 cents per pound to 50 cents with a 75-cent per pound expanded limit. Soymeal futures will increase from $25 per ton to $30 per ton with a $45-per-ton expanded limit.

Pro Farmer Evening Report: April 22, 2022

Fri, 22 Apr 2022 19:59:35 GMT

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Your Pro Farmer newsletter is now available... Food insecurity, debt distress and inflation were among the list of global risks cited by leaders of the World Bank and the International Monetary Fund (IMF) during their annual spring meetings. War in Ukraine is adding pressure to a global economy already hit by the Covid pandemic. Both IMF and the World Bank lowered their global economic forecasts due to the increased risks. With heightened food security concerns, there’s greater focus on global production forecasts. The U.S. winter wheat crop continues to be rated very poorly, while spring planting is off to a slow start. Brazil’s safrinha corn crop is holding up for now, but the dry season may be starting early. Ukraine’s crop production will be severely impacted by the Russian attack, but Russia is forecast by some to grow a record wheat crop this year. We cover all of these items and much more in this week’s newsletter, which you can access here .

Cattle on Feed Report: Placements top expectations... USDA estimates the April 1 inventory of cattle in large feedlots (1,000-plus head) totaled 12.105 million head, up 208,000 head (1.7%) from year-ago and 160,000 head more than the average pre-report estimate implied. The bigger-than-expected increase was driven by placements, which declined only 0.4% from last year, whereas traders expected a 7.8% drop. March marketings were just fractionally less than anticipated at 2% under last year’s pace.

Cattle on Feed Report	USDA (% of year-ago)	Avg. Trade Estimate (% of year-ago)
On Feed April 1	101.7	100.4
Placements in March	99.6	92.2
Marketings in March	98.0	98.2

Compared to last year, March placements dropped 7.4% for lightweights (under 600 lbs.), increased 1.5% for 6-weights, rose 3.9% for 7-weights, declined 1.5% for 8-weights, increased 2.9% for 9-weights and were unchanged for heavyweights (1,000-plus lbs.). Nebraska placed 30,000 head more cattle than year-ago during March, while placements were unchanged in Kansas and Colorado. Placements dropped 30,000 head in Texas and 8,000 head in “other states.”

As of April 1, there were 7.54 million head of steers on feed, up 133,000 head (1.8%) from last year and 4.565 million heifers in feedlots, up 75,000 head (1.7%) versus year-ago.

The report data is bearish, as the April 1 feedlot inventory and March placements both topped the highest pre-report estimates. That will weigh on the market Monday. But barring a heavy round of sustained fund liquidation, we doubt there will be much lasting impact.

Cold Storage Report: Record March beef stocks... USDA’s Cold Storage Report showed increases in both beef and pork stocks at the end of March, whereas both typically decline during the month.

Beef stocks totaled a March record 536.9 million lbs., up 5.4 million lbs. (1.0%) from February and 53.9 million lbs. (11.2%) above last year. Over the previous five years, beef stocks declined an average of 15.5 million lbs. during the month. Beef inventories were 63.8 million lbs. (13.5%) above the five-year average for March.

Pork stocks at 487.2 million lbs. increased 7.3 million lbs. (1.5%) during March and were 36.1 million lbs. (8.0%) above year-ago. Over the previous five years, pork stocks declined an average of 18.6 million lbs. during March. Pork inventories were still 79.4 million lbs. (14.0%) under the five-year average.

Total poultry stocks increased 10.0 million lbs. (0.9%) during March to 1.087 billion pounds. Poultry meat inventories declined 5.8 million lbs. (0.5%) from last year.

Japan’s inflation finally taking off... The Bank of Japan has resolved to keep interest rates low. The Bank of Japan’s (BOJ) unusual stance has propelled the yen to its weakest level against the dollar in two decades. The weak yen is one reason prices are rising in Japan, with consumer price inflation expected to approach the central bank’s longstanding 2% target in the next month or two. Japan is paying more in yen terms for imports such as oil and food, while global energy shortages and supply-chain bottlenecks also push prices higher. BOJ officials believe the current inflation is a one-time phenomenon driven by factors outside of their control. In BOJ’s mind, such “cost-push” inflation contains the seeds of its own demise because it is likely to tamp down demand and cool the economy. Japan and the U.S. will likely discuss the idea of coordinated currency intervention to stem further yen depreciation during an upcoming bilateral finance leaders’ meeting.

Import tariffs could be in Chinese trade strategy re-examination... U.S. Treasury Secretary Janet Yellen said the U.S. trade strategy with China is getting re-examined. On Bloomberg Television’s “Balance of Power,” she said it was worth considering scaling back the Trump-era import tariffs on Chinese imports. The Peterson Institute for International Economics estimated that eliminating a wide array of Trump-era tariffs, including those on Chinese goods, could reduce inflation by 1.3 percentage points.

IMF: Central banks need quick action on inflation... Central bankers must act decisively and quickly to tackle the rise in inflation, said Gita Gopinath, first deputy managing director of the International Monetary Fund. She said there was confidence central banks would bring down inflation, but the time frame for action is narrow. She noted central banks worldwide intend to act now on inflation.

Indonesia to ban palm oil exports... Starting on April 28, Indonesia will effectively ban palm oil exports, President Joko Widodo announced. The export ban is aimed at controlling domestic prices for cooking oil. GAPKI, an Indonesian palm oil group, asked the government to re-evaluate the export ban if it harms the palm oil sector.

In reaction to the news, USDA called for international cooperation rather than export bans given the global supply disruptions due to the war in Ukraine and other factors.

Indonesia conducting palm oil investigations... Indonesian state prosecutors are examining transcripts of conversations between people accused of unlawfully obtaining palm oil export permits. To get an export permit earlier this year, palm oil companies had to sell part of their planned exports to domestic buyers to control cooking oil prices at home. Currently, a trade official and palm oil executives are suspected of corruption. More investigators are being added to the case. The government is also investigating eight cooking oil producers on suspicion of cartel practices amid high prices of edible oil.

Malaysia increases palm oil export tax reference price... Malaysia raised its palm oil export tax reference price from $1,371.61 per MT to $1,564.63 per MT for May. The export tax rate was unchanged at 8%. The country’s export tax rate starts at 3% when crude palm oil is in a range of $520.23 to $554.91 per MT and can rise to a maximum rate of 8% when prices are over $798.61 per MT.

Ukraine extends ag export rail restrictions... Ukrainian Railways is extending its temporary restrictions on supplies of some agricultural goods through the Izov border checkpoint into Poland from April 25 to May 3. The restrictions cover exports of cereals, oilseeds, grains and other plant food products, finished animal feed and residues of food. Last week, the state-run railway imposed restrictions to Romania through the Dyakovo and Vadul-Siret crossings and to Poland through Yahodyn and Izov.

Ukraine able to cover Europe’s sunflower oil needs... Ukraine will be able to export 745,000 MT of sunflower oil until the end of the marketing year that ends in August, according to APK-Inform agriculture consultancy. That would be more than enough to cover Europe’s needs. The consultancy reports the country shipped 107,000 MT in March via rail and truck. Before the war, it would only ship 20,000 to 25,000 MT via land.

Ukraine increases planting estimates... The Ukraine agriculture ministry raised its estimate of how much of the country’s farmland will get planted by five percentage points to 75%. It explained that many fields were demined primarily in Sumy and Chernihiv. The planted area could be revised up another five points if more fields cleared from landmines.

Pig crate activists take aim at McDonald’s... The Humane Society of the United States has asked the U.S. Securities and Exchange Commission to investigate and hold McDonald’s accountable for deceiving shareholders and the public about its animal confinement policies. This comes after McDonald’s said investor activist Carl Icahn’s demand to stop buying pork from suppliers that use crates would be logistically unfeasible and prohibitively expensive. McDonald’s said it would require at least 300 to 400 times the animals housed today in “crate-free” systems to keep its supply chain running. Icahn has also nominated two directors to monitor the progress on the issue. Investors will vote for directors at the company’s annual meeting on May 26.

China to increase production in ten-year projections... China plans to increase its grain output by 1.3% annually over the next decade, according to the China Agricultural Outlook Report issued by China Agricultural Outlook Conference 2022. Xinhua news reported that China’s grain production is expected to total 688 MMT in 2022 and increase to 762 MMT in 2031. The average yield is forecast to increase by 6.4% during the period. The country should reach 88.1% grain self-sufficiency by 2031 and significantly cut agricultural imports. The authors noted science and technology would play a role in helping the country achieve its goal of being more grain self-sufficient.

Pro Farmer Evening Report: April 21, 2022

Thu, 21 Apr 2022 20:11:21 GMT

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FBI warns about cyber attacks in agriculture... The FBI sent out a bulletin warning that ransomware attacks on agricultural cooperatives are more likely during critical planting and harvest seasons, disrupting operations, causing financial loss, and negatively impacting the food supply chain. It was noted there were already two attacks in early 2022 and six in the fall of 2021 targeting grain cooperatives. Cyber attackers may perceive cooperatives as lucrative targets with a willingness to pay due to the time-sensitive role in agricultural production. The goal could be to disrupt seed and fertilizer supplies.

U.S., Britain, Australia, Canada and New Zealand cybersecurity agencies issued a warning of increased cybercrime risk due to Russia’s invasion of Ukraine. They added cybercrime groups pledged to support the Russian government in carrying out digital extortion attacks against Western targets. Last week, the U.S. reported advanced hackers have shown they can take control of an array of devices that help run power stations and manufacturing plants. In March, the U.S. government stated “evolving intelligence” that Russia was exploring options for potential cyberattacks.

Winter wheat drought area increases... The amount of U.S. winter wheat considered in drought conditions increased one point to 70% for the week ended April 19, according to the U.S. Drought Monitor. USDA rated winter wheat drought as 16% “moderate,” 30% “severe,” 21% “extreme” and 2% “exceptional.” Last week, USDA said winter wheat drought was 17% “moderate,” 31% “severe,” 18% “extreme” and 2% “exceptional.”

For HRW areas, the area considered abnormally dry/drought in Kansas increased three points to 74%. Oklahoma dropped four points to 81%. Texas’s abnormally dry/drought area decreased by one point to 96%. South Dakota had 87% of its land classified as abnormally dry/drought, a three-point increase. Nebraska (99%), Montana (90%) and Colorado (100%) had the same amount of land considered abnormally dry/drought.

In SRW areas, Arkansas has a six-point drop to 21% of its area considered abnormally dry/drought. Illinois had 10% of its land classified as abnormally dry/drought, a one-point drop. Michigan had 6% of its area considered abnormally dry/drought, a one-point decline. North Carolina had 44% of its area classified as abnormally dry/drought, a one-point decrease. Missouri (0%), Ohio (0%) and Indiana (0%) had the same percentage of the area considered abnormally dry/drought as the previous week.

Spring planted crops drought area decreases... Spring wheat had a six-point decline in the amount of the crop in drought to 40%. North Dakota had 14% of its spring wheat area in drought, down 11 points from the previous week. South Dakota increased the amount of its spring wheat in drought by two points to 58%.

The amount of cotton in drought declined by five points to 55%. Georgia had a three-point drop in the amount of its cotton in drought. Mississippi had a 42-point reduction in the amount of cotton in drought. Arkansas had the amount of cotton considered in drought drop by six points. Texas stayed at 97% of its cotton area in drought conditions.

USDA said 19% of the soybean crop is in drought, down two points from the previous week. The percent of U.S. corn considered in drought dropped by one point to 29%, due to a two-point drop in Iowa.

NWS: Hot, dry in HRW areas, western Corn Belt through July... The National Weather Service 90-day forecast continues to give elevated odds of above-normal temps and below-normal precip across HRW wheat production areas through July. The highest probability of hot, dry conditions is centered over Colorado, the panhandles of Texas and Oklahoma and western Kansas.

Above-normal temps and below-normal precip are also expected across much of the western Corn Belt, including Nebraska, South Dakota, most of Iowa, southern Minnesota and northwestern Missouri. Much of the eastern Corn Belt is expected to see above-normal precip and “equal chances” for normal, above- and below-normal temps during the period.

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Rural Mainstreet Index drops but remains above growth-neutral... The Creighton University Rural Mainstreet Index (RMI) overall reading for April declined to 62.0 from March’s 65.0. Any reading over 50.0 is above growth-neutral. The region’s farmland price index for April climbed to 80.0 from 78.0 in March, marking the 19th straight month the index has been above growth-neutral. April’s farm equipment-sales index declined to 67.6 from 72.2 in March, though that was the 17th consecutive month the index remained above growth-neutral. More than 91.7% of bankers in the survey expect the Federal Reserve to raise short-term interest rates by 50-basis points at its next meeting on May 3-4. Only 39.1% of bankers expect the E15 emergency summer waiver to have a positive impact.

Global total grain estimate raised on increased Brazil corn production... The International Grains Council (IGC) raised its 2021-22 total grain production (wheat and coarse grains) by 3 MMT from last month, primarily due to an increase in Brazil’s corn production forecast. Corn carryout stocks were cut by 1 MMT for 2021-22. The group reduced 2021-22 world soybean production by 1 MMT, cut consumption by 2 MMT and increased carryout stocks by 2 MMT from its March report. Wheat trade for 2021-22 was cut by 1 MMT and carryout stocks were increased by that amount. Wheat production and consumption were unchanged from the March report.

2022-23 global grain production, carryout stocks cut... In its first estimate for 2022-23, IGC noted the projections “are especially tentative given the conflict in the Black Sea region.” For total grains, IGC cut production by 12 MMT, trade by 9 MMT and carryout stocks by 26 MMT from its 2021-22 estimate. It increased total grain consumption to 2.302 billion MT (BMT). For corn, production was cut 13 MMT to 1.197 BMT, trade was lowered by 4 MMT to 171 MMT and carryout stocks were reduced by 21 MMT to 265 MMT.

Global wheat production in 2022-23 was estimated at 780 MMT, down 1 MMT from 2021-22, and consumption was increased to 785 MMT, up 7 MMT. Total 2022-23 wheat ending stocks were projected to be 277 MMT, down 5 MMT from 2021-22.

For soybeans, 2022-23 total production was increased 5 MMT to 520 MMT, trade was cut 1 MMT to 50 MMT, consumption was raised 3 MMT to 517 MMT and ending stocks were increased 3 MMT to 184 MMT.

SovEcon raises Russia’s wheat production, export forecasts... Black Sea region consulting firm SovEcon increased its 2022 Russian wheat production estimate to a record 87.4 MMT on excellent crop conditions and good inputs availability. The firm expects the pre-harvest winter wheat area to hit a record 17.0 million hectares. Crops in key growing regions look good and there was below-average winter kill.

The firm increased its 2022-23 Russian wheat export forecast to 41.0 MMT from 33.9 MMT this year, assuming no western sanctions on food exports or escalation of the Russian war. While the Russian government will likely set export quotas for the second half of 2022-23, SovEcon expects them to be close to export potential.

Argentina expected to cut wheat plantings in 2022-23... Argentine farmers are expected to plant 6.5 million hectares to wheat in 2022-23, according to the Buenos Aires Cereal Exchange. That would be a 200,000-hectare cut from what they planted in 2021-22. For 2021-22, the country produced 21.8 MMT of wheat. The exchange noted high fertilizer prices, rising input costs, a relative improvement in barley margins and domestic policies as reasons for the reduced planted area.

Ag economists: Cash Cattle Mandate bill solves a problem that does not exist... A group of agricultural economists noted the revised Cash Cattle Mandate bill is attempting to solve a problem that does not exist. “There is no research evidence of any significant or persistent fed cattle price discovery problem at this time,” they said.

The agricultural economists note the legislation offers zero benefits for fed cattle markets and imposes many millions of dollars of additional cost, added risk and lost value. The cost of the implementation will depend on the details. But they expect it will cost at least hundreds of millions of dollars resulting in lower feeder cattle prices and higher consumer beef prices. The revised legislation was assessed ahead of a hearing on April 26 on the topic by the Senate Ag Committee.

Powell blesses a 50-basis point interest rate increase... Federal Reserve Chair Jerome Powell blessed a half-point interest-rate hike next month and signaled support for further aggressive monetary tightening to curb inflation by noting that he saw merit in “front-end loading” policy moves. He said the Federal Reserve is committed to getting inflation back to 2%.

Interest-rate futures are fully pricing in a 50-basis point increase in the benchmark lending rate when U.S. central bankers meet May 3-4 and another 50-basis point hike is fully priced for June. Investors are betting on a third 50-basis point increase for July. St. Louis Fed president James Bullard has opened a debate about doing a more aggressive 75-basis-point increase if needed.

Oil refiners plan to increase summer diesel and jet fuel production... In response to market prices, oil refiners are planning to increase jet fuel and diesel production instead of gasoline this summer. Typically, refiners increase gas production as the driving season increases gasoline demand. Over the past ten years, the average profit at this time of year for distillates and gasoline was $26.24 and $27.48 a barrel, respectively. The current distillates profit margin is $60 and gas is $34. Demand for distillates has increased as the world

Pro Farmer Evening Report: April 20, 2022

Wed, 20 Apr 2022 20:24:19 GMT

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Sharp slowdown in feedlot placements expected... USDA’s Cattle on Feed Report on Friday is expected to show feedlots dramatically slowed their placement of animals during March. After aggressively moving calves off pastures during fall and winter, available supplies have been reduced. Marketings are also expected to be down from year-ago, though not as dramatically as placements. The April 1 feedlot inventory is expected to come in 0.4% above year-ago.

Cattle on Feed	Avg. Trade Estimate (% of year-ago)	Range (% of year-ago)	Million head
On Feed on April 1	100.4	99.5-101.0	11.945
Placements in March	92.2	87.0-96.0	1.842
Marketings in March	98.2	97.7-98.7	2.004

High winds, hot temps could stress Plains crops, livestock... World Weather Inc. forecasts high winds, hot temps and low humidity will hit the Central and Southern Plains late this week. The combination of the three will stress crops and livestock in the region. The worst days will likely be Friday and Saturday. World Weather says winds are expected to be lighter with more seasonable temps late in the weekend into early next week. However, another bout of higher winds and hot temps might arrive during the middle of next week.

Beige Book: Economic activity grew at a moderate pace... The U.S. economy grew at a “moderate pace” from mid-February to mid-April, the Federal Reserve said in its Beige Book survey. Consumer spending accelerated among retail and non-financial service firms, as Covid-19 cases tapered across the country. Manufacturing activity was solid overall across most Districts, but supply chain backlogs, labor market tightness, and elevated input costs continued to challenge firms’ ability to meet demand. Outlooks for future growth were clouded by the uncertainty created by recent geopolitical developments and rising prices.

Federal Reserve banks: Agricultural conditions mixed... Overall, the Federal Reserve District Banks reported mixed agricultural conditions across the country in the Beige Book report. Higher crop prices have supported farmers and the agricultural sector. However, there are some challenges facing the industry. The Dallas Federal Reserve said drought conditions in its area have worsened. It reported higher feed costs with flat cattle prices meant some cattle herds were being culled. The Kansas City Federal Reserve also noted higher feed costs for livestock producers and food processing facilities. The Chicago Federal Reserve said farmland prices were higher due to increased investor interest. Most of the districts noted greater volatility and uncertainty due to the global geopolitical issues. They also reported higher inputs costs and input availability issues.

U.S. crude oil stocks plunge... U.S. crude oil stocks dropped by 8 million barrels in the past week, according to the Energy Information Administration (EIA). Analysts polled by Reuters expected a 2.5-million-barrel increase. The drop in stocks came amid U.S. oil exports that totaled the most in two years. U.S. production hit 11.9 million barrels per day, the highest level since May 2020. U.S. gas stocks dropped by 761,000 barrels to 232.4 million barrels. Distillate stocks, which include diesel and heating oil, fell by 2.7 million barrels to 108.7 million barrels, the lowest level since May 2008.

EIA reported ethanol stocks fell 461,000 barrels to 24.342 million barrels during the week ended April 15 – the lowest level since the week ended Jan. 14, 2022.

Palm oil exports likely to rebound... Vegetable oil buyers will likely switch some purchases back to palm oil as its discount is widening compared to other vegetable oils. One broker noted palm oil is $150 per MT cheaper than soyoil. Earlier this month, palm oil was $40 per MT cheaper. In March, palm oil was higher than soyoil and sunflower oil. Brokers explained refiners are switching to palm oil for May shipments. Crude palm oil was offered to India at $1,765 per MT for May shipment, compared to $1,930 for crude soybean oil and $2,100 for crude sunflower oil.

India will likely import more than 600,000 MT of palm oil in April, compared to 539,793 MT in March. Imports in May could be more than 650,000 MT. Bangladesh and Pakistan are also buying more palm oil for May shipments, one dealer said. If the Covid outbreak is contained within the next few weeks, China could also increase its palm oil purchases.

World Bank asks to release global food stockpiles... World Bank President David Malpass called for the release of food from large international reserves to help address the worsening food insecurity crisis that has been exacerbated by spiking prices in the wake of Russia’s invasion of Ukraine, Reuters reported. He welcomed moves by India to sell food from its stockpiles and said similar steps by advanced economies would increase available supplies.

Malpass expects the current food security crisis to last at least several months and perhaps into next year.

Egypt considering allowing GM crop planting... Egypt’s government is considering allowing farmers to plant GM seeds to increase production and reduce imports, according to a member of Egypt’s government. Egypt currently prohibits importing and planting GMO seeds. However, it allows imports of GM-produced soybeans and corn that have been approved from the country of origin, especially from the United States. Planting GM crops in Egypt is implemented on a very limited scale as it is based on pollination to get improved strains of plants.

Canada’s CPI jumped in March... Canada’s consumer price index (CPI) advanced 6.7% on a year-over-year basis in March, Statistics Canada said, versus a 5.7% rise the previous month. Market expectations were for inflation to reach 6.1% in March. The March inflation rate was the highest since January 1991, when annual prices advanced 6.9%. On a month-over-month basis, CPI rose 1.4% in March, the largest advance since January 1991. On a seasonally-adjusted monthly basis, CPI was up 0.9% in March. Core inflation (minus volatile food and energy prices) rose 3.8% in March, up from 3.5% in the previous month. Economists think the inflation jump will trigger another big interest rate increase in June.

Judges approves second Smithfield antitrust case settlement... A federal judge has initially approved a $42 million settlement in a class-action lawsuit between Smithfield Foods and foodservice operators. Both parties signed the settlement on March 19 after negotiating for months. It is the second Smithfield settlement in the antitrust cases. In July 2021, the company agreed to pay $83 million to settle multiple company’s direct-purchaser claims.

Serbia limits agricultural exports... The Serbian government has restricted wheat, corn, flour and cooking oil export quantities to help stabilize its domestic market. The restrictions are on a monthly basis and for a certain period. However, the government did not provide details. Last month, the country banned basic food staple exports. However, it gradually made exceptions under pressure from traders and wheat producers.

China’s exports to North Korea rebound... China’s exports to North Korea leaped to $173.4 million from only $13.0 million a year earlier. The top export items were edible oil and wheat flour. North Korea bought $16.4 million of soybean oil, $5.1 million of palm oil, $4.3 million of wheat flour and more than $3.7 million of tobacco. North Korea has been subjected to U.N. sanctions since 2006, although the Security Council does allow for humanitarian exemptions. The U.S. is urging the U.N. Security Council to further sanction North Korea over its renewed ballistic missile launches. The U.S. is also seeking a tobacco export ban to North Korea. Its leader Kim Jong Un is known as a chain smoker.

Pro Farmer Evening Report: April 19, 2022

Tue, 19 Apr 2022 20:13:03 GMT

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Best Midwest planting conditions thus far next week... World Weather Inc. says the best planting conditions for the Midwest will be next week. However, it notes temps will be trending lower by that time. Some warming is expected in the second half of this week. However, Midwest drying conditions will be poor between storm systems through next week. For the Delta region, World Weather predicts planting progress is expected to slowly improve with less frequent precip and warmer temps.

On Monday, USDA reported corn and soybean planting was behind normal for mid-April.

Dry central Brazil conditions raise concern... Crop Consultant Dr. Michael Cordonnier reports Brazil’s safrinha corn is fine for now, but there are warning signs on the horizon. The driest areas extend from the state of Sao Paulo northward into Minas Gerais, Goias, Bahia, northern Mato Grosso do Sul and eastern Mato Grosso. World Weather Inc. says topsoil moisture is already rated short in Mato Grosso and central Bahia while its short to very short in northern Minas Gerais. Ten days of drying will result in crop moisture stress for Mato Grosso and a few neighboring areas, harming safrinha corn and cotton production potentials. The Brazilian National Weather Service (Inmet) forecasts below-average rainfall for April-May-June for most of central Brazil.

Argentine ship workers to strike, grain ports unaffected... Argentine ship works plan to strike for 24 hours on Thursday to protest government delays in awarding bids for maintenance of the Parana River. The strike is not expected to affect grain shipments as the union does not have a significant presence in the areas of Timbues, Puerto General San Martin, San Lorenzo and Rosario. The Parana River is a main agricultural shipping route for Argentine agricultural exports.

China to purchase 40,000 MT of pork... China’s government will buy 40,000 MT of pork for state reserves on April 22, according to a China Merchandise Reserve Management Center notice. This is the fifth batch of government purchases this year. China’s pork prices have remained low in recent months due to higher supplies and softening demand.

Chinese consumers switching from pork to seafood... Chinese consumers are switching from pork to seafood for their protein needs, according to Bu Rui Ke (which also trades as China Brick), a research consultancy focused on agricultural commodities and publicly listed agricultural and food firms. Seafood Source reported the change is driven by higher incomes, health concerns and an aging population. The report notes average Chinese pork consumption peaked in 2014 at 43 kilograms (kg) per person, up from 11.7 kg in 1981. It is now under 40 kg. Pork has long been considered the bedrock protein of the Chinese diet and is typically cheaper than seafood. However, higher incomes mean consumers are better able to purchase seafood. The firm found seafood is facing a battle with beef to become the protein of choice. However, the report says pork can regain market share by focusing on higher-value products.

U.S. diesel exports continue to soar... U.S. Gulf Coast diesel exports increased to 1.3 million barrels per day so far this month, according to oil analytics firm Vortexa. That is the most exports since January 2016, when it started tracking shipments. U.S. government data shows weekly national diesel exports increased to 1.74 million barrels per day in April, the highest since June 2018. Most of the diesel exports have been shipped to Latin America. However, Europe has also been making purchases to offset the reduction in Russian diesel imports. Increased exports have helped push U.S. diesel stocks to their lowest level since 2014.

OPEC+ misses production goal, again... OPEC+ countries produced 1.45 million barrels per day (bpd) below its March production targets, reported Reuters. In February, the cartel missed its production target by more than 1 million bpd. In March, Russia’s oil production was 300,000 bpd below its 10.0 million bpd target. The International Energy Agency (IEA) expects Russia’s April output to drop by 1.5 million bpd and 3 million bpd in May. Other countries, including those in West Africa, are having trouble increasing oil production to meet the cartel’s target.

IMF forecasts 3.6% growth in 2022, 2023... The International Monetary Fund (IMF) expects the global economy to grow by 3.6% in both 2022 and 2023. That would be a 0.8-percentage-point cut for 2022 and a 0.2-point cut for 2023 from its January forecast. This is the second time IMF has cut its global economic growth forecast this year. The international lender estimates 2022 inflation at 5.7% in advanced economies and 8.7% in emerging market and developing economies — 1.8 and 2.8 percentage points higher, respectively, than it projected in January.

For advanced economies, IMF projects 3.3% growth in 2022 and 2.4% growth in 2023. For the U.S., it forecasts 3.7% growth in 2022 and 2.3% GDP in 2023. Japan is projected to grow 2.4% in 2022 and 2.3% in 2023. Canada’s growth is forecast at 3.9% this year and 2.8% in 2023. China’s economy is expected to grow 4.4% in 2022 and 5.1% in 2023.

Interest rate tone gets more hawkish... Chicago Fed President Charles Evans, a dovish policymaker, said he’s open to discussing a half-point increase, and said he doesn’t see a big risk in waiting to get to neutral by a few months. He called the March FOMC projections for a year-end rate of 1.9% reasonable. Sometimes-hawk Kansas City Fed President Esther George has urged a “steady, deliberate approach.” Meanwhile, St. Louis Fed President James Bullard discussed the idea of the Federal Reserve’s first 75-point basis hike since 1994. Bullard is the most hawkish official and the only person to vote against a 25-basis point increase, as he wanted a 50-point hike in the March meeting.

Pierre-Olivier Gourinchas, International Monetary Fund chief economist, also weighed in on U.S. interest rate hikes. He noted the Ukraine war has made the U.S. interest rate hike cycle more urgent and necessary.

Lawmakers join ag/farm groups in filing brief at Supreme Court supporting WOTUS challenge... A group of 45 senators and 154 House members have filed an amicus brief with the U.S. Supreme Court calling for it to reverse a lower court ruling on Waters of the US (WOTUS) under the Clean Water Act (CWA). The lawmakers, led by Senate Environment and Public Works Ranking Member Shelley Moore Capito (R-W.Va.) and House Transportation and Infrastructure Ranking Member Sam Graves (R-Mo.), detailed several arguments for the nation’s top court to narrow the determination of what counts as navigable waters under the CWA. They indicated the case marks the chance for the nation’s top court to “put the genie back in the bottle” on WOTUS and reverse the lower court ruling as failing to do so would mean “the definition of ‘waters of the United States’ will continue to whipsaw from one administration to the next.” A separate filing by the American Farm Bureau Federation and 13 other groups notes the organizations grow “virtually every agricultural commodity produced commercially in the United States, including much of the U.S. wheat, corn, rice, soybean, cotton, wool, sugar, milk, poultry, egg, pork, lamb, and beef supply,” adding that producers face “significant problems” from the shifting definitions of WOTUS. The Supreme Court is expected to hear arguments in the case later this year.

Pro Farmer Evening Report: April 18, 2022

Mon, 18 Apr 2022 21:15:30 GMT

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Winter wheat conditions decline... USDA rates 30% of the U.S. winter wheat crop as “good” to “excellent” as of Sunday. That was down two points from the previous week and three points below the average estimate from a Reuters survey. USDA rates 37% of the crop as “poor” to “very poor,” up a point from last week.

	This week	Last week	Year-ago
Very poor	19	18	6
Poor	18	18	11
Fair	33	32	30
Good	27	29	46
Excellent	3	3	7

USDA reported that 7% of the winter wheat crop has headed, two points behind last year and five points behind the five-year average.

Corn planting remains behind average... USDA reports 4% of the U.S. corn crop was planted as of Sunday, compared to 2% last week and 7% last year. The five-year average is 6% planted for mid-April. Analysts surveyed by Reuters expected 5% of the nation’s corn to be planted. In the Corn Belt, 2% of Nebraska’s corn was planted, the same as a year ago and the five-year average. Kansas farmers have planted 12% of their corn acres, up seven points from last week and a point ahead of the five-year average. Iowa, Illinois, Minnesota, South Dakota and Indiana reported no corn was planted yet. Texas leads the country with 64% of its corn planted, up one point from last week and three points ahead of the five-year average.

Soybean planting starts slow... In its first soybean planting progress update, USDA said farmers had 1% of soybean acres planted as of Sunday. That is two points behind last year and one point behind the five-year average and traders’ expectations. No soybeans have been planted in Illinois, Iowa, Minnesota, North Dakota, Missouri, Nebraska, Indiana and South Dakota. Louisiana leads the nation with 23% of its soybean acres planted, 13 points ahead of last year but two points behind the five-year average.

Cotton planting ahead of average... Farmers had 10% of U.S. cotton acres planted as of Sunday, according to USDA. That was a point ahead of the five-year average and one point less than last year. California led the country with 55% of its cotton planted, up 20 points from last week and 35 points ahead of the five-year average. Sixteen percent of the cotton acres in Texas have been planted, up four points from last week and two points ahead of the five-year average. Georgia has one percent of its cotton crop planted, two points behind average.

Spring wheat seeding behind normal... Farmers had 8% of the spring wheat crop seeded as of Sunday, up two points from the previous week but one point behind the five-year average and traders’ expectations. North Dakota had 3% of its spring wheat planted, nine points behind last year and one point behind the five-year average. Montana farmers have planted 10% of their spring wheat, four points ahead of the five-year average. Minnesota has none of its spring wheat planted, four points behind the five-year average. South Dakota farmers have 25% of their spring wheat planted, three points ahead of average.

Snow to delay Northern Plains planting... The far Northern Plains and southeast Canadian Prairies will likely see two more snow events in the coming week that will further delay planting, according to World Weather Inc. Within the past week, two storms have produced substantial amounts of snow in North Dakota, Manitoba and southeastern Saskatchewan with lighter snow amounts in surrounding areas. As of April 18, much of North Dakota (outside of the southeast corner) into southern Manitoba and southeastern Saskatchewan, generally has four to 20 inches of snow on the ground.

World Weather forecasts there are two more storms predicted for the region in the next two weeks. The first storm is expected tonight into Wednesday with strong winds. The winter storm late Thursday and this coming weekend could also dump six to 12 inches of snow with locally greater amounts in southern Manitoba, northern North Dakota and areas of eastern and southern Saskatchewan. Winds will also be elevated and likely promote another round of blizzard or blizzard-like conditions.

As a result, World Weather says farmers are not likely to be able to get into the fields in the area until early May or even later, depending on the amount of warming that follows this event.

U.S. banks’ commodity trading risk exposures increase... Goldman Sachs Group Inc and JPMorgan Chase & Co commodity trading risk has increased, according to the companies’ first-quarter earnings disclosures. Reuters reported Goldman Sachs’ average daily Value at Risk (VaR) in commodities totaled $49 million in the first quarter of 2022, up from $32 million in the previous quarter and its highest for over a decade. VaR shows how much money it could lose trading a particular asset in a single day. In equities trading, Goldman’s average VaR was $33 million and $25 million in currency trading. JPMorgan’s average daily trading VaR in commodities rose to $15 million during the first quarter, up from $12 million the previous quarter and surpassing $12 million for equities and $4 million for foreign exchange. Citigroup’s most recent disclosures showed VaR in commodities was up year-on-year for each quarter in 2021, peaking at $48 million at the end of the second quarter. Morgan Stanley, which has cut the size of its commodities trading business since the financial crisis, does not break out its VaR by asset class.

NOPA reports record March crush... Last Friday, the National Oilseed Processors Association (NOPA) said its members crushed 181.8 million bu. of soybeans in March, up 16.7 million bu. from February and 3.8 million bu. from last year. It was a new March record. The NOPA data implies a full monthly crush at 194.5 million bushels. Last year, March’s total soybean crush was 188.2 million bu.

NOPA reported soyoil stocks at 1.9 billion lbs., down 152 million lbs. from the previous month. The implied total March use at 2.3 billion lbs. and daily use at 74.2 million lbs. are new records. The previous record monthly use was 2.2 billion lbs. and daily use was 70.6 million lbs. in May 2020.

Ukraine warns of deteriorating grain on ships... Mykola Solskyi, Ukraine’s agriculture minister, warns the 1.25 MMT of grains and oilseeds loaded in 57 vessels but unable to ship due to the Russian invasion could deteriorate in quality soon. He noted the grain condition depended on the condition of the vessel cargo holds. However, he stressed that quality issues could arise and that cargo could be spoiled if stored for more than three months. Most of the ship captains most likely do not know if there are quality issues and they probably did not plan to keep the grain loaded in the ships this long.

World Bank cuts global growth forecast... The World Bank cuts its global growth forecast for 2022 from 4.1% to 3.2%. The largest part of the reduction in growth was a 4.1% contraction in Ukraine, Russia and areas around those countries. The World Bank predicts Ukraine’s economic output will drop by 45.1% and Russia’s 11.2%. It reduced the economic growth forecast for central Europe (Bulgaria, Croatia, Hungary, Poland and Romania) from 4.7% to 3.5%.

Russian fertilizer shipments continue to Brazil... Despite concerns that sanctions would limit Russian fertilizer shipments to Brazil, shipping data shows fertilizer is still being shipped, Reuters reported. At least 24 vessels carrying almost 678,000 MT of Russian fertilizers will reach Brazil in the following weeks. Despite sanctions against Russia, 11 of the 24 vessels left Russian ports after Feb. 24, when the war started. Most are carrying potassium chloride used for soybean and corn production. The most recent cargo left Russia on April 4. Overall, Brazil’s fertilizer imports and raw materials used to make plant nutrients rose by 24.6% to 9.795 MMT in the first quarter, according to Siacesp, an industry group.

Higher fertilizer prices could cut this year’s world rice crop... Higher global fertilizer prices could lead to reduced global rice production. The International Rice Research Institute predicts yields could drop 10%, translating to a loss of 36 MMT of rice, or the equivalent of feeding 500 million people. However, that is a very conservative estimate, according to an agricultural economist with the organization. While other crop prices have kept up with higher fertilizer prices, rice prices have lagged due to ample production and existing stockpiles. That is leading to farmers cutting back fertilizer use in rice. However, many governments are aware of the situation and politicians could react as rice is a staple for hundreds of millions of people, especially lower-income groups.

Pro Farmer Evening Report: April 14, 2022

Thu, 14 Apr 2022 19:57:11 GMT

Click here to view weekly export sales/commitments charts and here for report details.

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Happy Easter! Good Friday trading schedule... Government offices are open tomorrow, but markets are closed for Good Friday. As a result, there will be no Pro Farmer updates. We’ll resume our normal market commentary on Monday, April 18. Happy Easter from Pro Farmer!

Your Pro Farmer newsletter is now available... Rising food and energy costs are some of the biggest reasons for surging inflation, which surged to a 40-plus year high in March. Russia’s war on Ukraine is behind food security concerns of some outside the United States... and mounting political concerns in this country. We look at concerns with global food shortages on News page 4 this week. The Biden administration issued an emergency declaration to allow E15 fuel to be sold from June 1 to Sept. 15 as a means of saving consumers at the gas pump. But it won’t likely have a major impact on gas prices - or produce as much additional ethanol demand as some believe (hope). We had an opportunity to talk to hog producers about reasons they aren’t expanding their herds this week. We also highlight changes to USDA’s meat and poultry forecasts. We cover all of these items and much more in this week’s newsletter, which you can access here .

Record March soybean crush report expected... Analysts expect the National Oilseed Processors Association (NOPA) on Friday to report a record March soybean crush of 182.0 million bu., according to a Reuters survey. In February, NOPA members processed 165.1 million bu. of soybeans in February and 178.0 million bu. in March 2021. The record NOPA March soybean crush is 181.4 million bu. in 2020.

Average estimate for soyoil stocks is 2.2 billion lbs. based on the Reuters survey. There were 2.1 billion lbs. of soyoil stocks at the end of February and 1.8 billion lbs. at the end of March 2021.

Pork exports could be affected by Mexican border crossing blockage... The U.S. Meat Export Federation is monitoring the crossing delays at the Texas/Mexico border. In a Meat+Poultry interview, Travis Arp, U.S. Meat Export Federation assistant vice president of export services, explained that crossing delays could affect U.S. meat exports, especially pork. While both beef and pork exports to Mexico are chilled, there are larger volumes of pork and it has a shorter shelf-life. He noted if the product arrives in Mexico in off condition, the exports could be rejected by the government and the exporting plants could also be suspended from shipping to Mexico. Blockades entered its fourth day even after an agreement was reached to open up one border crossing as local media reported truckers shifted their focus to other crossing sites. Agriculture producers hope the issue gets resolved soon. Meanwhile, experts say the first Mexican produce shortages due to the blockades will likely occur in the Midwest and the East Coast.

CF Industries warns of fertilizer shipping issues... CF Industries is warning customers that fertilizer shipments might be delayed or may not reach farmers after Union Pacific (UP) railroad mandated certain shippers to reduce the volume of private cars on its railroad. CF ships fertilizer from its Donaldsonville Complex in Louisiana and its Port Neal Complex in Iowa via UP railroads. The railroad asked CF Industries to reduce its shipments by 20%. The company said it might not have available shipping capacity to take new rail orders involving UP rail lines to meet late-season demand for fertilizer. “The timing of this action by Union Pacific could not come at a worse time for farmers,” CF’s Chief Executive Officer Tony Will said on Thursday. CF Industries had previously announced it planned to increase fertilizer shipments from the world’s largest nitrogen plant to both U.S. coasts to help offset some of the decline in fertilizer supply due to Russia’s invasion of Ukraine.

Crops in drought remain steady... The amount of U.S. winter wheat considered in drought conditions remained at 69% for the week ended April 12, according to the U.S. Drought Monitor. USDA said winter wheat drought was 17% “moderate,” 31% “severe,” 18% “extreme” and 2% “exceptional.” Last week, USDA rated winter wheat drought as 18% “moderate,” 34% “severe,” 16% “extreme” and 2% “exceptional.”

For HRW areas, the area considered abnormally dry/drought in Oklahoma declined one point to 85%. Texas’s abnormally dry/drought area increased by two points to 97%. South Dakota had 84% of its land classified as abnormally dry/drought, a two-point drop. Other HRW states were unchanged on the week.

The percent of U.S. corn (30%), cotton (40%) and spring wheat (46%) acres listed in drought remained the same as the previous week.

EU’s 2021-22 wheat exports trimmed... Strategie Grains cut its estimate of 2021-22 EU soft wheat exports to 31.4 MMT, down 1.1 MMT from last month. The firm cited significant shipments from Russia despite Western sanctions and its war with Ukraine. In March, Strategie Grains increased EU soft wheat export as it expected more EU exports as demand shifted from the Ukrainian and Russian supplies. The firm raised its projection of EU soft wheat exports in 2022-23 by 500,000 MT to 30.3 MMT, factoring in a protracted conflict in Ukraine and poor crop weather in the United States. It also lowered the EU’s 2022-23 production by 200,000 MT to 126.7 MMT, more than 3 MMT below this season’s output. However, the consultancy reduced animal feed demand by 1.5 MMT. Animal feed demand for corn and barley was cut by 1 MMT each.

Attaché forecasts higher 2022-23 Brazil soybean acreage... USDA’s attaché in Brazil is expecting farmers to plant 42.5 million hectares (ha) in 2022-23, up from the estimated 40.7 million ha planted in the 2021-22 season. The forecast is based on current market conditions and trends – including strong demand, high prices and a favorable exchange rate. However, the Russia/Ukraine war and resulting fertilizer supply concerns may constrain expansion. Assuming a return to normal weather conditions, the post predicts Brazil’s soybean production at 139 MMT, up from the estimated 124.8 MMT harvest this season. The post expects soybean exports from Brazil to rebound to 87 MMT for 2022-23, compared to the estimated 77 MMT for 2021-22.

Consumer sentiment unexpectedly jumps... U.S. consumer sentiment unexpectedly rose to a three-month high in early April, according to the University of Michigan’s Index of Consumer Sentiment. The index rose from 59.4 reading in March to 65.7 reading in April. The figure exceeded all estimates in a Bloomberg survey of economists, with a median forecast of 59.

The survey’s measure of future expectations climbed to 64.1, the highest since January. The monthly increase of almost 10 points was the largest since 2006. A gauge of current conditions increased to 68.1, compared to a reading of 67.2 in March.

Consumers still expect inflation to rise 5.4% over the next year, and their expectations for price increases in the next five to 10 years remained at 3%.

U.S. export and import prices surged in March... U.S. export prices surged 4.5% in March to their highest since the report started in January 1989 and followed a 3.0% increase in February, according to the Department of Labor reported. Export prices jumped a record 18.8% year-over-year in March and followed a 16.5% increase in February. Agricultural export prices soared by 4.7%. Nonagricultural export prices vaulted 4.5%.

Import prices jumped 2.6% last month, the largest rise since April 2011, after increasing 1.6% in February. In the 12 months through March, prices raced 12.5%, the largest gain since September 2011, after advancing 11.3% in February. Economists polled by Reuters had forecast import prices, which exclude tariffs, would increase 2.3%. Last month, imported fuel prices jumped 14.6% after rising 10.0% in February. Petroleum prices shot up 16.1%, while the cost of imported food edged up 0.1%.

European Central Bank keeps unwinding schedule... The European Central Bank (ECB) confirmed it would keep its plans to end its bond-buying program in the third quarter. As expected, ECB did not raise interest rates. However, ECB President Christine Lagarde expressed more concerns about inflation. She did not discuss interest rate hikes, though she said that could start after the end of the bond purchasing program. Timing of interest rate hikes could be addressed in the bank’s July meeting. The ECB last raised interest rates over a decade ago and has kept its deposit rate in negative territory since 2014. Markets now price in 63 basis points of rate hikes before the end of the year, a modest retreat compared with 70 basis points priced in before the meeting.

IMF to trim global growth forecast... The International Monetary Fund (IMF) will cut its global growth estimates for 2022 and 2023, managing director Kristalina Georgieva said. The global lender will downgrade its growth outlooks for 143 economies representing 86% of global economic output. However, most countries will maintain positive growth. IMF will release its new forecast at next week’s IMF and World Bank spring meetings. Georgieva did not give a specific global growth target, but it will be lower than the January forecast of 4.4%, which was reduced 0.5%. She noted economies face the “clear and present danger” of inflation that is expected to remain longer than previously expected. Georgieva warned the world was in “a very dangerous time.” She also mentioned higher food and energy prices driving food security concerns.

Pro Farmer Evening Report: April 13, 2022

Wed, 13 Apr 2022 20:24:32 GMT

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Producer Price Index has largest monthly gain since December 2009... The U.S. producer price index (PPI) increased 1.4% from February, the largest monthly gain since the government revamped the series in December 2009, after rising 0.9% in February, according to the Bureau of Labor Statistics. The PPI jumped 11.2% from year-ago, the largest year-on-year increase since November 2010, compared to a 10.3% increase in February. Economists polled by Reuters expected the PPI to rise 1.1% for the month and 10.6% versus year-ago. In the 12 months through March, the core PPI soared 7.0% after increasing 6.7% in February. The core monthly PPI rose 0.9% from February.

The index for final demand goods rose 2.3% in March, the same as in February. The index for final demand services increased 0.9%. Over half of the broad-based advance in March can be traced to a 5.7% jump in prices for energy. Diesel fuel prices jumped 20.4%. Food prices climbed 2.4%, though the cost of beef and veal fell 7.3%. The indexes for gasoline, fresh and dry vegetables, jet fuel, iron and steel scrap, and electric power also increased.

Higher producer prices signal higher future food costs... March’s PPI showed food costs climbed 2.4% from a month earlier, the largest increase since May. The jump was driven by higher grain, vegetable, cooking oil and pork prices. Economists explain the consumer price index will likely show these food price increases in the future. From a year earlier, food prices advanced 16.2%, the largest increase in annual records back to 2010, PPI data showed. One economist explained that consumer prices for commodity-based food categories lag the producer price by one to two months. Consumer food prices have been increasing for months. However, economists note supply shortages will likely mean higher food prices will continue into the foreseeable future.

Bank of Canada hikes interest rates by 50 basis points... The Bank of Canada became the first central bank in the Group of Seven to approve a 50-basis point interest rate increase since the pandemic. The bank’s largest rate hike in 22 years raises Canada’s overnight benchmark rate to 1%. According to a Bloomberg survey, 25 of 30 economists expected the 50-basis point hike, with the markets pricing in a 70% chance of that size of a rate increase. The bank expects rates to return to the “neutral range” of 2% and 3%, and is prepared to move “forcefully” if needed. The bank will also shrink its balance sheet by stopping government bonds purchases later this month.

Ukraine to export 17 MMT of corn in 2021-22... Ukraine’s corn exports could decrease by 6.1 MMT from last year to 17 MMT for the 2021-22 marketing year, according to a senior Ukraine agriculture official. Ukraine corn prices with April-May delivery stood at $240 to $250 per MT DAP (Delivered at Place) on the Polish border, down by as much as $15 an MT from a week earlier, according to APK-Inform, a Black Sea consultancy. The drop in corn prices was due to limited demand and large stocks. The country’s corn stocks totaled about 13 MMT at the end of March, with only 300,000 MT exported during the month.

Deputy Agriculture Minister Roman Rusakov said sunflower oil exports could total 3.4 MMT for the 2021-22 marketing year, down from 5.3 MMT from the previous year. Before Russia’s invasion, Ukraine’s sunflower oil exports were predicted to reach 6.6 MMT.

Taras Vysotskiy, another Ukrainian deputy agriculture minister, said Ukraine could export 2 MMT of wheat during the remainder of 2021-22 that runs through June.

India suspends cotton import duties... India’s government announced it will halt cotton import duties until Sept. 30 due to record domestic prices. The total import tax was 11%, according to industry sources. The move will help textile mills import cheaper cotton from the U.S., Australia, Brazil and African countries. The country could import 2.5 million bales of cotton this year. India is expected to produce 33.51 million bales in the current year, down 1.79 million bales from last year.

Avian influenza cases outpacing 2014-15 outbreak... The number of highly pathogenic avian influenza (HPAI) cases in the U.S. are outpacing the 2014-15 outbreak. However, the higher numbers might be attributed to detection and reporting protocol improvements. American Farm Bureau Federation economists found as of April 7, there have been more than 600 detections of HPAI in wild birds across 31 states, and 158 detections in commercial and backyard flocks across 25 states. The Mississippi flyway had 49% of the commercial flock detections, while 36% of the commercial detections were in the Central flyway and the Atlantic flyway had 15% of the cases. The Pacific flyway has not had a reported case. The 2014-15 outbreak prompted revisions to the National HPAI Surveillance Plan, which has led to heightened annual surveillance plans, providing poultry producers earlier notice to increase their biosecurity measures.

Mexican truckers continue blocking Texas border crossing... Since Monday, Mexican truck drivers have blocked the Pharr-Reynosa International Bridge in protest of Texas Gov. Greg Abbott directing Texas Department of Public Safety troopers last week to pull over and inspect trucks coming into the state from Mexico. The bridge is the largest land port for produce entering the United States. An estimated 3,000 trucks would cross the Pharr border bridge on a typical day, according to the National Freight Transportation Chamber. Unusually long backups — some lasting 12 hours or longer — have also been reported elsewhere along Texas’ roughly 1,200-mile border in the early rollout of an initiative that Abbott says is needed to curb human trafficking and the flow of drugs. U.S. Customs and Border Protection officials confirmed another blockade at the Mexican customs facility at the Santa Teresa port of entry in southern New Mexico. Experts warn U.S. grocery shoppers could notice shortages or higher prices due to the blockage.

March tractor sales drop... In March, a total of 24,715 tractors were sold in the U.S., compared to 31,276 sold during the month last year, a 21% decrease, according to the Association of Equipment Manufacturer’s monthly “Flash Report.” Compared to a year ago, two-wheel-drive under 40 HP tractors were down 26%, 40 & under 100 HP were down 14%, two-wheel-drive 100+ HP were up 7%, four-wheel-drive tractors were down 2% and combine sales were down 10% to 343. For the year, two-wheel-drive under 40 HP are down 11% from last year, 40 & under 100 HP are down 4%, two-wheel-drive 100+ HP are up 13%, 4-wheel-drive tractors are down 1% and combine sales are down 19%.

Yellen warns China on Russian relations... U.S. Treasury Secretary Janet Yellen warned China that in the future, it would be tough to separate economic issues from national interests, including national security. She hoped the U.S. and China could avoid a “bipolar” split between the countries. She noted the world’s attitude toward China and its economic integration could be affected by Beijing’s reaction to Russia’s invasion of Ukraine. Yellen also warned nations sitting on the fence over the international effort to punish Russia or any actions to undermine sanctions on the country could be penalized by the U.S. and its allies.

Yellen to convene food security meeting... Yellen will discuss global food prices and supply solutions during next week’s Spring Meetings of the International Monetary Fund and World Bank. Participants will include ministers representing the G-7 and G-20, International Monetary Fund Managing Director Kristalina Georgieva and World Bank President David Malpass. Yellen is looking to assist the countries that spend the largest share of their income on food. She explained that development banks need to make longer-term investments to correct vulnerabilities of underlying food systems. The banks provide money to increase domestic food production, strengthen safety nets and finance trade. However, higher commodity and food prices increase inflation and threaten food and energy security.

Four meatpacker CEOs agree to Congressional hearing... CEOs of meatpackers Cargill, Tyson Foods, JBS and National Beef Packing have agreed to testify at a Congressional hearing to discuss cattle markets and price increases for consumers, according to House Agriculture Committee Chairman David Scott (D-Ga.). He also noted there would be a rancher panel to discuss the impact of meatpacking consolidation on their businesses. The House Ag Committee had requested the CEOs of the top five meatpackers to appear before the panel on April 27, Pro Farmer has learned. Meanwhile, some lawmakers are pushing for a general counsel at USDA to investigate meat industry competition.

Pro Farmer Evening Report: April 12, 2022

Tue, 12 Apr 2022 20:17:59 GMT

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Some analysts skeptical about the E15 impact... Some analysts think today’s announcement by President Joe Biden about an emergency waiver for summertime sales of E15 gasoline is much ado about little. They note the sparse number of gas pumps in place to sell E15, and most of those are in the Midwest, whereas gas consumption is heavier in the east and west coasts, where there are far fewer E15 pumps. Only about 2,300 of the nation’s more than 150,000 stations now sell E15, and though it is available in roughly 30 states, the fuel is most widely offered in the Midwest. Not only is E15 hard to find, but it’s difficult to get an assessment of what impact the White House ethanol waiver will have. Summertime sales of E15 will boost demand, but not as much as some believe – or hope. Impacts to fuel prices will be both limited and short-term.

Oil industry critical of E15 announcement... Chet Thompson, president and CEO of American Fuel and Petrochemical Manufacturers (AFPM), described the Biden E15 decision as “an unlawful executive order” that is “not how to solve the problem” of high fuel prices. “Emergency fuel waivers are short-term and reserved for very specific unforeseen events and regionally acute supply disruptions, such as those resulting from a hurricane,” Thompson said in a statement. But the White House said it’s pursuing an emergency waiver, not proposing a rulemaking to change the E15 regulation. An administration official said Monday the EPA action “will be rooted in the current fuel supply emergency” and said, “EPA is planning to make this waiver so long as the current fuel supply emergency continues.”

An EPA FAQ page on fuel waivers stresses they “cannot be issued to address concerns regarding the price of fuel.” But White House officials characterized the decision as “yet another action that the president is taking to combat Putin’s price hike.”

March CPI’s largest yearly increase since December 1981... The U.S. Consumer Price Index (CPI) increased 8.5% from a year earlier in March, following a 7.9% annual gain in February, according to the U.S. Bureau of Labor Statistics. The widely followed inflation gauge rose 1.2% from a month earlier, the biggest gain since 2005. Economists had expected a 1.2% monthly increase and an 8.4% yearly jump in consumer prices. Excluding volatile food and energy components, the so-called core CPI increased 0.3% from a month earlier and 6.5% from a year ago, both less than projected – due to the biggest drop in used vehicle prices since 1969.

On a year-over-year basis, goods inflation excluding food, energy and used vehicles rose 8.1% in March, the most since 1981. Services costs increased 5.1% from a year ago, the biggest advance since 1991. The gasoline index rose 18.3% in March and accounted for over half of the all items monthly increase. The food index rose 1.0% and the food at home index rose 1.5%. The energy index rose 32.0% over the last year, and the food index increased 8.8%, the largest 12-month increase since May 1981.

Global growth optimism at an all-time low... Global fund managers’ optimism hit an all-time low while stagnation concerns reached its highest level since August 2008, according to a Bank of America Securities survey. A net 71% of survey respondents were pessimistic about prospects, the most since survey records began in the early 1990s. A global recession remains the top “tail risk” for international markets. Other top risks included aggressive central bank interest rate actions, inflation and the Russia/Ukraine conflict. Allocations to commodities jumped to a record 38%, with investments into oil and other commodities zipping up the charts to become the top most “crowded trade.” Other long positions were resource stocks and healthcare. Investors expect a decline in prices for bonds and cyclical stocks whose performance is most linked to economic growth.

Reuters poll: Economists expect 50-basis point hikes in May and June... A majority of 100 economists polled by Reuters predicted the Federal Reserve would raise interest rates by 50-basis points in its May and June meetings. It would be the first back-to-back 50-basis point hikes since 1994 and take the Fed funds interest rate to 1.25% to 1.50% by the June meeting. Then Federal Reserve rate moves will likely reduce to 25-basis point increases in the second half of this year. The Fed funds rate is expected to end 2022 at 2.00% to 2.25%, 50 basis points higher than the median forecast in a poll taken last month. The economists expect the Fed funds rate to be 2.50% to 2.75% by the end of 2023. The economists gave a median one-in-four chance of a U.S. recession in the coming year, rising to 40% over the next 24 months. The survey did not expect inflation to decrease to the Fed’s 2% target until 2024.

OPEC cuts 2022 world oil demand forecast... World oil demand is expected to increase 3.67 million barrels per day (bpd) in 2022, down 480,000 bpd from the previous OPEC monthly forecast. The cartel cited Russia’s invasion of Ukraine, higher inflation and more Chinese Covid cases affecting world oil demand. OPEC predicted world oil consumption will still surpass the 100 million bpd mark in the third quarter. On an annual basis, the world last used more than 100 million bpd of oil in 2019.

On the supply side, OPEC reported its output only increased 57,000 bpd to 28.56 million bpd. That would be 253,000 bpd lower than OPEC+’s agreed output target. The cartel cut non-OPEC supply by 300,000 bpd to 2.7 million bpd. U.S. shale oil supplies are expected to increase 880,000 bpd, up from 670,000 bpd last month.

EIA: Summer gas prices to average $3.84 per gallon... This summer’s retail gas price is predicted to average $3.84 per gallon, the highest inflation-adjusted average summer gas price since 2014, according to the Summer Fuels Outlook by the U.S. Energy Information Administration (EIA). The average summer price was $3.06 per gallon last year. March’s average retail gas price was $4.22 per gallon, according to EIA. The average gas price is expected to gradually decrease to $3.75 per gallon in July and $3.68 per gallon by September. The outlook forecasts gas consumption will average 9.2 million barrels per day, up 0.8% from last summer and 3.5% lower than 2019. Ethanol fuel blending was predicted to be close to last summer’s level at 930,000 barrels per day, about 10.1% of total gasoline consumption. However, the report was prepared on April 7, before President Joe Biden’s announcement allowing E-15 sales over the summer.

EIA: Summer retail diesel prices to average $4.57 per gallon... This summer’s average retail diesel price is estimated to average $4.57 per gallon, according to EIA. This would be the highest inflation-adjusted average summer diesel price since 2014. Last year, the average summer diesel price was $3.28 per gallon. The five-year average summer price is $2.92 per gallon. Summer diesel consumption is forecast to average almost 3.9 million barrels per day, up nearly 90,000 barrels per day from 2021 and slightly less than consumption in the 2019 summer driving season. This summer, biodiesel production is projected to average about 100,000 barrels per day, down slightly from last summer. Renewable diesel production is predicted to average approximately 90,000 barrels per day this year, up more than 40,000 barrels per day from last year.

NCBA renews call for Brazilian beef imports suspension... The National Cattlemen’s Beef Association (NCBA) renewed its call to immediately suspend fresh beef imports from Brazil. NCBA has repeatedly called for a thorough audit of Brazil’s animal health and food safety system, to ensure the safety of the U.S. cattle herd. In 2021, Brazilian exports to the U.S. increased by 131%. In the first three months of 2022, Brazil has already shipped more than 50,000 MT of fresh beef to the United States. The imports triggered a temporary tariff safeguard of 26.4% that will apply to Brazilian beef imports for the rest of 2022. A temporary tariff increase may discourage further imports from Brazil. However, the cattle organization says it does not address the underlying concern over Brazil’s repeated failure to adhere to international animal health and food safety standards.

Consultant raises Paraguay corn crop estimate... Crop Consultant Dr. Michael Cordonnier raised his estimate of Paraguay’s corn crop by 1.5 MMT to 5.5 MMT. The higher estimate comes as Paraguay farmers planted more safrinha corn acreage in hopes of compensating for a dismal 2021-22 soybean crop. USDA estimates that Paraguay farmers will plant 825,000 hectares of safrinha corn (2.03 million acres), up 14.5% compared to last year.

According to the consulting firm Consultoria TF Agroeconomiea, Paraguay’s total 2021-22 corn crop could be 6.0 MMT, surpassing the current record of 5.0 MMT set in 2018-19. USDA estimates 2021-22 Paraguay corn production at 4.3 MMT. Last year, the country produced 3.2 MMT of corn.

Cordonnier left his estimates of Brazil’s and Argentina’s corn crops unchanged at 112 MMT and 49 MMT, respectively.

No significant impacts on Brazil’s safrinha corn expected... Despite hot and dry weather during the past week in Mato Grosso, Goias and much of northeastern Brazil, World Weather Inc. expects minimal impact on Brazil’s safrinha corn crop. The Kansas City-based weather forecasting company said the corn crop was able to draw on subsoil moisture as the topsoil dried out. The area is expected to get more rain this week. Portions of southern Brazil will continue to see significant rainfall and the ground will remain excessively wet in parts of Parana, Santa Catarina and northern Rio Grande do Sul, where crop development may be sluggish. World Weather said the remaining safrinha corn areas will see mostly good conditions this week.

EU to start food diplomacy... The EU is planning to start food diplomacy to counter Russia’s claims that Western sanctions were the reason for food shortages and higher food prices in the Balkans, North Africa and the Middle East. One diplomat noted they could not risk losing the region. The EU is working with the U.N. World Food Program to mitigate food shortages. French diplomats have considered setting up a global food distribution mechanism for poorer nations. Hungary has suggested boosting the EU’s agricultural output by altering its climate goals. The Food and Agriculture Organization of the United Nations (FAO) considered a food import financing facility. The EU is also working to improve Ukrainian exports and imports through Poland. Last week, the EU announced it would provide $244 million in aid to North Africa and the Middle East. Western Balkan countries, especially Serbia, will get agricultural support as part of the regular funding to the region.

Pro Farmer Evening Report: April 11, 2022

Mon, 11 Apr 2022 21:10:24 GMT

Click here to view weekly export inspections charts and here for report details.

Check our advice monitor on ProFarmer.com for updates to our marketing plan.

Winter wheat conditions improve slightly... USDA rated 32% of the U.S. winter wheat crop as “good” to “excellent” as of Sunday, up two points from the previous week. Traders surveyed by Reuters expected crop conditions to be unchanged. USDA rates 36% of the crop as “poor” to “very poor,” unchanged from the previous week. The “good” to “excellent” rating was 21 points below year-ago.

	This week	Last week	Year-ago
Very poor	18	18	6
Poor	18	18	11
Fair	32	34	30
Good	29	27	46
Excellent	3	3	7

USDA reported 5% of the wheat crop has headed, equal to last year and one point behind the five-year average.

Corn planting behind expectations... USDA reports 2% of the U.S. corn crop was planted as of Sunday, the same as last week and a point behind the five-year average. That was two points slower than traders expected. In the top 12 production states of the Corn Belt, only Kansas at 5% (equal to the five-year average) and Missouri at 1% (4% on average) had any corn planted, according to USDA.

Texas had 63% of its corn crop planted, six points ahead of a year ago and five points ahead of the five-year average.

Spring wheat planting progress matches expectations... The U.S. spring wheat crop was 6% seeded as of Sunday, compared to 3% last week and 10% a year ago, USDA reported. Analysts expected 6% of the spring wheat would be planted in a Reuters survey. Spring wheat planting is running one point behind the five-year average for this date.

Washington had 32% of its crop planted, a point ahead of the five-year average. Top producer North Dakota has planted 2% of its crop, equal to the normal pace for this time of year. Planting hasn’t started yet in Minnesota.

Sworn testimony sought from meatpackers regarding pricing practices... House Ag Committee has requested the CEOs from the top five meatpackers to appear before the panel on April 27, Pro Farmer has learned. They will reportedly be sworn in before making comments and the panel will take “other measures” if the CEOs say they will not attend, contacts advise. Meanwhile, some lawmakers are pushing for a general counsel at USDA to investigate meat industry competition. On April 26, the Senate Ag Committee will have a hearing on livestock pricing bills.

U.S. economy now ‘facing rocky waters’... The U.S. economy is facing a lot of uncertainty and “rocky waters,” according to President Joe Biden’s top economic adviser. Brian Deese, director of Biden’s National Economic Council, said on Bloomberg Television the U.S. is in a better position than other major countries to deal with economic issues. He refused to place any odds on a recession risk. However, he said other economies have a higher recession risk than the United States. Deese said inflation would likely be elevated in the March consumer price index, which will be released on Tuesday. However, he predicts inflation will be lower by the end of the year and next year. He added the government is working to improve container processing at ports, releasing oil supplies to lower gas prices and monitoring the Chinese Covid shutdowns.

New York Fed: Consumers expect more short-term inflation... Consumers expect another increase in short-term inflation but a decline in medium-term price pressure, according to the Federal Reserve Bank of New York’s March 2022 Survey of Consumer Expectations. The median one-year-ahead inflation expectations increased to a new series high of 6.6% from 6.0% in February, while median three-year ahead inflation expectations decreased to 3.7% from 3.8%. Expectations about year-ahead price changes increased by 0.8 percentage points for gas prices (to 9.6%) and by 0.4 points for food prices (to 9.6%). Labor market and income growth expectations receded somewhat, and respondents turned less optimistic about their year-ahead household’s financial situation.

OPEC says it can’t replace Russian oil... OPEC officials signaled the cartel would not pump more oil in a meeting with EU officials if the EU sanctions Russian oil. OPEC said current and future sanctions could create one of the worst oil supply shocks ever. The EU and other countries have asked OPEC countries to pump more oil to offset potential Russian oil sanctions. The EU has not sanctioned Russian crude oil yet. However, EU officials sanctioned Russian coal last week. Some EU officials say oil is next and plans for sanctions are being prepared.

Fed’s Evans thinks interest rates target should be 2.25% to 2.5% ... Chicago Federal Reserve Bank President Charles Evans signaled he would not necessarily oppose getting interest rates up to a neutral setting of 2.25% to 2.5% by the end of the year. That would require a couple 50 basis-point rate hikes at upcoming Fed meetings. He noted the Fed should not raise rates too fast, and it should assess inflation pressures and adjust as needed.

Argentine grain truckers strike starts... Argentine truckers today started their indefinite strike to demand higher rates for transporting grain and livestock. There are no negotiations underway, according to union officials. The truckers want higher rates to offset inflated diesel prices. They have also complained about fuel shortages. The government and rural associations agreed on new rates for grain transportation in early February. Since then, fuel prices and the inflation rate in the country have increased due to Russia’s invasion of Ukraine. About 85% of Argentina’s grain volume is transported to the country’s ports by truck from fields. If the strike continues for several days, grain exports can be affected, as the country is in the midst of its harvest.

Australia believed to export record amount of wheat in February... Australia exported 2.8 MMT of wheat in February, which is thought to be a monthly record for the country, according to the Australian Bureau of Statistics (ABS). In January, the country exported 2.7 MMT. In February 2021, the country shipped 2.6 MMT of wheat. From December 2021 to February 2022, Australia exported 6.94 MMT of wheat, compared to 6.76 MMT a year before. The country was expected to ship around 3 MMT in March. However, excessive rains affected some of the country’s ports and likely held wheat shipments under February’s total.

India to have excess wheat to export... India should have extra wheat to help supply the world market, according to government officials. Indian farmers are currently harvesting what is expected to be a record 111.32 MMT wheat crop. It would be the sixth straight year that India produced more wheat than needed. India needs 25 MMT of wheat every year for its food welfare program. Last year, the Indian government purchased 43.34 MMT of wheat. As of April 1, the government had 19 MMT in storage, above its target of 7.46 MMT. This year, government wheat purchases will likely drop as the market offers farmers higher prices. Government officials are also working with port and railway authorities to prioritize wheat exports.

Residue burning bans pose another Chinese crop production hurdle... Chinese farmers are saying crop residue-burning bans might limit crop production, Bloomberg reported. Typically, Chinese farmers burn the crop residue in the fields as the quickest and cheapest way to clear the land. The government has adopted strict anti-pollution rules such as crop residue burning bans to reduce dangerous air particles. Beijing wants farmers to use machines to collect crop residue and take it to electric plants to burn for fuel. Farmers say the collecting machines result in poorer land conditions and more pests, potentially affecting seed emergence. The country has called for more crop production this year. There are other factors such as Covid shutdowns and higher fertilizer and fuel costs that farmers must contend with to increase production.

Xi: Seed independence key for Chinese food security... Independently controlled seed sources and self-reliant technology are the keys to China’s food security, Chinese President Xi Jinping said during a trip to a Sanya seed lab in Hainan province, according to a Xinhua news report. Last month, Xi told delegates to the annual parliament meeting that China must not rely on the international market for food. In late 2020, the central leadership said the country’s seed industry was a weak link in the food chain and needed to make better use of science and technology to achieve a turnaround. One researcher noted most of the focus on seeds has been on rice and wheat, and more work is needed on vegetables and fruits and corn.

Bird flu has killed more than 13 million birds in France... Since the end of November, more than 13 million birds have been culled due to bird flu in France, according to the country’s agriculture ministry. As of April 8, France reported 1,230 outbreaks of avian influenza. The country has seen a 10% rise in outbreaks in the past eight days.

Pro Farmer Evening Report: April 8, 2022

Fri, 08 Apr 2022 19:43:43 GMT

Check our advice monitor on ProFarmer.com for updates to our marketing plan.

Your Pro Farmer newsletter is now available... With USDA’s March planting intentions known, markets will start to look more toward weather for near-term price direction, especially the corn market since acreage is expected to be down sharply from last year. We feature outlooks from four prominent meteorologists in our News page 4 feature this week. Weather will also be important for the suffering U.S. winter wheat crop, which started spring rated only 30% “good” to “excellent” by USDA. Aside from weather, traders remain focused on global grain trade and impacts to U.S. ending stocks given the building global food crisis. EPA remanded 36 small refinery exemptions (SREs) from 2018, saying they were wrongly authorized. However, EPA will not require 31 of the facilities to buy compliance credits to fulfill the quotas. U.S. beef exports stayed strong in February, while pork slumped due to sharp reductions in shipments to China. We cover all this and much more in this week’s newsletter, which you can access here .

WASDE note on Russia... In its April World Agricultural Supply and Demand Estimates (WASDE) Report, USDA noted the following: “Russia’s recent military action in Ukraine significantly increased the uncertainty of agricultural supply and demand conditions in the region and globally. The April WASDE represents an ongoing assessment of the short-term impacts as a result of this action.”

U.S. corn, wheat carryouts higher than expected... USDA left its projection of old-crop corn ending stocks at 1.440 million bu., 25 million bu. more than traders expected in the WASDE Report. U.S. old-crop wheat ending stocks were increased by 25 million bu. from last month to 678 million bu., 22 million bu. above the average pre-report estimate. The old-crop soybean ending stocks forecast was cut by 25 million bu. from last month to 260 million bu., which was basically in line with traders’ expectations of 262 million bushels. Old-crop cotton carryout stocks were unchanged at 3.5 million bales, whereas traders expected a modest 40,000-bale increase. Click here fore more details.

USDA raises global corn, cotton ending stocks... USDA raised its forecast for 2021-22 global corn ending stocks to 305.46 MMT in the WASDE Report, up 4.49 MMT from last month and 3.55 MMT more than the average pre-report estimate. Global cotton stocks were increased to 83.38 million bales, 810,000 bales more than the March estimate and 740,000 bales more than the average pre-report estimate. Global soybean carryout stocks were estimated at 89.58 MMT, down 380,000 MT from last month and 790,000 MT higher than the average pre-report estimate. Global wheat carryout stocks were projected at 278.42 MMT, down 3.09 MMT from March and 2.99 MMT below the average pre-report estimate.

USDA cuts Brazil, Paraguay soybean production... USDA trimmed Brazil’s soybean production to 125.0 MMT, down 2.0 MMT from its March report and 14.5 MMT below last year. Paraguay’s soybean crop was estimated at 4.2 MMT, down 1.1 MMT from the March report and 5.7 MMT below last year. Argentina’s soybean crop was unchanged from the March report at 43.5 MMT.

USDA increased Brazil’s corn crop by 2.0 MMT from March to 116.0 MMT. Its corn production estimates for China, Argentina, Ukraine and South Africa were unchanged from March.

For global wheat production, USDA increased Argentina’s production by 500,000 MT from the March report to 21.0 MMT. The EU crop was estimated at 138.42 MMT, down 580,000 MT from March. It left the production forecasts for China, Russia, Australia, Ukraine and Canada unchanged.

Meteorologists: La Niña and Pacific Decadal Oscillation major factors for growing season weather... Meteorologists agreed La Niña would be a weather factor for the third consecutive year. Drew Learner, World Weather senior meteorologist, says there is a 22-year pattern of multi-year La Niñas. Joe Woznicki, Commodity Weather Group meteorologist, notes previous episodes of multi-year La Niñas were 1998 to 2000, 1973 to 1975 and 1954 to 1956. The forecasters say there is a multi-year period of negative Pacific Decadal Oscillation (PDO), as well. Historically a negative PDO means higher odds of warmer- and drier-than-normal weather from June through August in the Corn Belt. Jon Davis, Everstream chief meteorologist, says the PDO will strongly impact summer weather. Jan Dutton, Prescient Weather CEO, expects the PDO weather influence to increase as La Niña wanes.

Lerner: Late-summer dryness in Western Corn Belt. World Weather’s Drew Lerner expects potential planting delays in the Delta and Tennessee Basin in April due to flooding. In the western Corn Belt, April will be cool, which could limit fieldwork. The eastern Corn Belt will have cool temps in May. The Upper Midwest will have plenty of moisture during the planting season.

Lerner says June weather in the eastern Corn Belt will be favorable, though he expects the region to dry out in July and August. He predicts the western Corn Belt will be drier during summer as drought in the western U.S. persists and potentially expands. While La Niña will continue, it should diminish in importance.

Lerner expects September and early October to have a drier bias across the Corn Belt, while precip should be close to normal in late October and November.

Woznicki: Only slightly above-average temps. Commodity Weather Group’s Joe Woznicki says spring conditions across the Midwest look to be favorable. However, the Delta might experience too much moisture.

La Niña will continue but will be weak to moderate through summer. He expects June to be the hottest month. However, it will also have the most precip to help offset any stress. There will be patchy dryness developing in late summer across the eastern Midwest. While there will likely be a warmer-than-normal pattern, severe heat is unlikely. The Southern Plains are forecast to be the hottest and driest area in the country, while he expects the Delta and Northern Plains will see normal to above-normal summer rainfall.

Heading into September, Woznicki says cooler-than-average temps are possible in the Northern Plains and Great Lakes region. He does not see an overly wet pattern for the fall. However, the Atlantic hurricane season will likely be a wildcard for early fall weather. He expects an active hurricane season similar to last year. But Woznicki says it is too early to tell where hurricanes will develop, either in the Gulf of Mexico or the Atlantic Ocean.

Davis: PDO a factor; 2022 weather generally favorable. Everstream’s Jon Davis says the negative PDO will likely continue through spring and summer, just like last year and expects it to play a significant role in the 2022 growing season.

Overall, Davis is optimistic about spring planting weather. He notes no area in the U.S. is overly saturated and adds the Upper Midwest does not have a lot of snowpack. For most of the U.S., he has a drier bias for spring but expects no extreme dryness, which likely means there will be minimal planting issues.

Davis says there are higher risks of dryness and heat in the western U.S. during the growing season. However, he does not expect problematic temps or moisture deficits for most U.S. crop areas. “We don’t see any long-term issues and expect generally favorable weather for the 2022 crop,” he says.

Dutton: La Niña to weaken in late summer. Prescient Weather’s Jan Dutton notes soil moisture levels in the western Corn Belt are drier than average to start the growing season, with Nebraska, South Dakota and North Dakota getting below-average precip the past 60 days. The eastern Corn Belt has received above-average precip over the same period.

He expects La Niña will continue to influence weather into summer. That means warm, dry, windy and sunny conditions will likely prevail across the Southwest and Southern Plains, with warm conditions in the Southeast during late spring. Cold and wet conditions are more likely in the Pacific Northwest and Great Lakes region.

However, he expects La Niña to weaken into late summer/early fall and the PDO will start to have more influence on the weather pattern. He says a waning La Niña and negative PDO usually lead to warmer and drier conditions during summer and early fall.

China to sell soybean reserves next week... China’s National Grain Trade Center announced it will sell 500,000 MT of imported soybeans from its state reserves on April 15. This follows a sale of the same amount this week. The soybean sales are aimed at helping ease tight supplies in the domestic market. China’s government started releasing soybeans from state reserves in mid-March when South American soybean imports were delayed. However, South American soybean imports have recently increased and lowered soybean prices.

Pro Farmer Evening Report: April 7, 2022

Thu, 07 Apr 2022 20:48:38 GMT

Click here to view weekly export sales/commitments charts and here for report details.

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EPA denies 36 small refinery biofuels waivers... The Biden administration on Thursday rescinded 36 refineries’ previously granted waivers from 2018 biofuel-blending requirements — but said it would not require the facilities to buy compliance credits to fulfill the quotas. EPA said the 36 previously granted exemptions were wrongly authorized because the RFS program itself did not directly cause any economic hardship suffered by the facilities. The agency said the new rejections were consistent with a 2020 decision by the 10th Circuit U.S. Court of Appeals. EPA said it would provide an “alternate compliance approach” so 31 previously exempted refineries can still “meet their new 2018 compliance obligations without purchasing or redeeming additional RFS credits.” The Biden administration is set to finalize blending quotas for 2020, 2021 and 2022 by June 3.

Conab cuts Brazil’s soybean crop, increases corn crop... Brazil’s soybean crop estimate was lowered to 122.4 MMT, down 340,000 MT from last month by Conab, Brazil’s crop estimating agency. It reduced Brazil’s soybean exports by 3.2 MMT from last month to 77 MMT. Last month, USDA cut Brazil’s soybean crop by 7 MMT to 127 MMT. A further reduction in USDA’s Brazilian soybean crop estimate is expected in Friday’s Supply & Demand Report.

Conab raised its estimate of Brazil’s corn crop to 115.6 MMT from 112.3 MMT last month. Much of that increase was a 36.3% jump in the safrinha corn crop estimate to 88.5 MMT. It also raised its corn export forecast by 2 MMT to 37 MMT.

Frost could have damaged Argentina’s soybean crop... The Buenos Aires Grain Exchange warned Argentina’s soybean production could fall below the current estimate of 42 MMT due to frosts over the past week. Frost this week came after cold temps at the end of March. Possible frost damage will be evaluated over the next few weeks and could affect the exchange’s soybean crop estimate. The exchange said 8.8% of the country’s soybeans were harvested. It did not warn of any possible changes to its corn production estimate of 49 MMT due to frost. Argentine farmers have harvested 17% of their corn crop. The exchange noted if weather conditions allowed, the sunflower harvest should wrap up within the next two weeks. It estimated the sunflower crop at 3.3 MMT.

Winter wheat drought area remains unchanged... The amount of U.S. winter wheat considered in drought conditions remained at 69% for the week ended April 5, according to the U.S. Drought Monitor. USDA rated winter wheat drought as 18% “moderate,” 34% “severe,” 16% “extreme” and 2% “exceptional.” Last week, USDA said winter wheat drought was 20% “moderate,” 32% “severe,” 16% “extreme” and 2% “exceptional.”

For HRW areas, the area considered abnormally dry/drought in Kansas dropped one point to 71%. Oklahoma (86%), Texas (95%), South Dakota (86%), Nebraska (99%) and Colorado (100%) had the same amount of land considered abnormally dry/drought as the previous week.

JP Morgan Chase: Be ready for a 40% commodities rally... Commodities could soar by as much as 40% if investors increase their investments in raw materials as an inflation hedge, according to JPMorgan Chase & Co. The bank advised there is an elevated need for inflation hedges. That means investors could distribute more than 1% of the total financial assets globally into longer-term commodity allocations. As a result, that “would imply another 30% to 40% upside for commodities from here.” The bank joins Goldman Sachs Group Inc., which has been bullish on raw materials as an inflation hedge. However, Goldman Sachs warned a global copper shock was underway.

Fed’s Bullard thinks interest rates should be raised to 3% to 3.25%... Federal Reserve Bank of St. Louis President James Bullard wants the Federal Open Market Committee to get interest rates to 3.0% to 3.25% in the second half of this year. Bullard, who supported a 50-basis-point hike at the March meeting, said it was clear that a higher interest rate is needed sooner. However, he noted that he didn’t want to prejudge the May meeting and would study any new data. Using the Taylor Rule as a guideline, he says the Fed may need to increase interest rates to about 3.5%. He explained that would mean the current rate is 300 basis points too low. Bullard predicts the economy will grow by 2.8% in 2022 and the unemployment rate will be under 3%.

Ukraine railcars with grain stuck at the Poland border... Some 1,100 railcars filled with grain are stuck near the main Ukraine/Poland border crossing, according to data from Ukraine’s state-run railway company. Reuters reported that those cars were part of the 24,190 railcars loaded with vegetable oil, iron ore, metals, chemicals and coal waiting to cross the border. About half the railcars were waiting near Izov, the main rail border crossing into Poland. Izov also serves as a gateway for reaching the Polish seaport of Gdansk. The reasons for backlog include the sheer volume of goods, shortages of railcars and staff and infrastructure issues including the railways being a different gauge. A Ukraine rail official said about 500 cars per day could cross the border at Izov, meaning there’s nearly a three-week backlog. However, he said other crossings weren’t backed up. Railway officials are working to increase the number of railcars with grain crossing into Poland, Romania, Hungary and Slovakia to 1,100 per day within three months.

Congress passes bills to punish Russia... Congress passed two bills on Thursday to punish Russia for its Ukraine invasion. One bill would ban U.S. imports of Russian oil, gas and coal. The bill would put into law an executive order that President Joe Biden previously issued. The other bill would remove “most favored nation” trade status for Russia and its close ally Belarus. U.S. law mandates that Congress approve the change in Russia and Belarus’ trade status. The trade bill allows the Biden administration to raise tariffs on imports from Russia and Belarus. Biden is expected to sign both bills.

Edible oils prices increase... Russia’s invasion of Ukraine has sparked a global shortage of sunflower oil that has drastically raised the price of other edible oils, the Wall Street Journal reported. Global edible oil prices were already high before the invasion due to crop issues in Canada and South America. Compared to a year ago, rapeseed oil increased by 72% by the end of March. Palm oil rose 61%. Sunflower oil prices were up 44%. Soyoil is up 41%. Olive oil is 15% higher. Except for olive oil, all the rest hit record high prices in March.

China temporarily bans imports from three Brazil meat plants... China’s General Administration of Customs has suspended imports from two Brazilian beef plants and one poultry producer, according to a statement on its website. Imports from a JBS beef plant in Goias, a Marfrig beef plant in Mato Grosso and an unnamed chicken plant in Sao Paulo owned by Zanchetta were banned. The bans will start April 8 and lasts one week. No reason for the ban was given.

Pro Farmer Evening Report: April 6, 2022

Wed, 06 Apr 2022 20:22:56 GMT

Check our advice monitor on ProFarmer.com for updates to our marketing plan.

Old-crop corn, soybean stocks expected to tighten... USDA’s April Supply & Demand Report typically is a virtual yawner, featuring only minor fine tuning to the old-crop balance sheets. Global supply issues due to the war between Russia and Ukraine, and potential impacts that could have on demand for U.S. products creates a little more uncertainty for Friday’s report. Heading into the reports, analysts expect U.S. old-crop corn and soybean ending stocks to tighten from month-ago, while wheat carryover is expected to inch up. Global ending stocks for corn, soybeans and wheat are all expected to tighten a little from last month. The following expectations are from a Reuters survey (Bloomberg for cotton).

Expectations for U.S. Carryover
Corn – billion bushels
	2021-22
Average est.	1.415
Range	1.365-1.520
USDA March	1.440

Soybeans – million bushels
	2021-22
Average est.	262
Range	196-305
USDA March	285

Wheat – million bushels
	2021-22
Average est.	656
Range	625-703
USDA March	653

Cotton – million bales
	2021-22
Average est.	3.54
Range	3.20-4.00
USDA March	3.50

Expectations for Global Carryover
Corn – MMT
	2021-22
Average est.	300.91
Range	296.54-304.00
USDA March	300.97

Soybeans – MMT
	2021-22
Average est.	88.79
Range	86.70-91.00
USDA March	89.96

Wheat – MMT
	2021-22
Average est.	281.41
Range	276.50-284.13
USDA March	281.51

Cotton – million bales
	2021-22
Average est.	82.64
Range	81.68-83.26
USDA March	82.57

Beef exports stay strong, pork exports slump... The U.S. exported 254.4 million lbs. of beef in February, down 33.2 million lbs. (11.5%) from January but up 4.1 million lbs. (1.6%) from last year and only 1.2 million lbs. below the record for the month posted in 2020. Through the first two months of this calendar year, the U.S. shipped 542.1 million lbs. of beef, up 45.7 million lbs. (9.2%) from the same period last year.

U.S. pork exports totaled 486.2 million lbs. in February, down 24.0 million lbs. (4.7%) from January and 105.7 million lbs. (17.9%) below last year’s tally. In the first two months of 2022, the U.S. shipped 996.5 million lbs. of pork, down 201.5 million lbs. (16.8%) from last year. U.S. pork shipments to China in the first two months of the year plunged 199.6 million lbs. (71.1%) from last year.

IEA nations to release an additional 60 million barrels of oil... International Energy Agency (IEA) members will release 60 million barrels of oil from their emergency stockpiles, adding to the 180-million-barrel release of crude reserves previously announced by President Joe Biden. Officially, the coordinated IEA stockpile release will amount to 120 million barrels of oil – half from the U.S. and half from other members. IEA expects Russia’s oil production to slump this month, leaving a gap of 3 million barrels per day in global energy supplies.

Fed minutes: Officials considered a 50-basis point interest rate increase... Many members of the Federal Open Market Committee would have preferred a 50-basis point increase in the target range for the federal funds rate at its March meeting, according to the meeting minutes released on Wednesday. However, members decided a 25-basis-point increase would be appropriate due to greater near-term uncertainty associated with Russia’s invasion of Ukraine. The committee has signaled that six more interest rate hikes are possible this year to cool inflation. Investors have priced in the possibility of more than seven rate increases in 2022 and see a high chance the Fed will raise rates by 50-basis points next month.

The committee also agreed to reduce its bond holdings to a maximum $95 billion per month. The last time the Fed trimmed its balance sheet, it did it at the maximum rate of $50 billion per month. The FOMC is also expected to start trimming its balance sheet at its next meeting on May 3-4.

EU grain exports and production to increase... The European Commission predicts grain production and exports in the European Union (EU) in 2022 will increase. EU grain production is projected to reach 297.7 MMT for the 2022 harvest. Grain exports are expected to increase by 14% this marketing year (until June 30), primarily driven by an additional 5.6 MMT of soft wheat shipments compared to the previous season. Grain exports for the 2022-23 marketing year that starts on July 1 could increase by almost 40% to 41.4 MMT. EU oilseed production is not a concern, as it is estimated to increase by 6.5% to 30.2 MMT this marketing year and increase to 32.2 MMT in 2022-23. The latter would include 11.2 MMT of sunflower seeds.

China’s zero-Covid policy risks causing agricultural crisis and food shortages... China’s strict Covid lockdowns are exacerbating severe fertilizer shortages, labor and seeds, just as many of its biggest agricultural provinces prepare for their crucial spring planting season, reports the Financial Times. According to official data, as many as a third of farmers in China’s northeastern Jilin, Liaoning and Heilongjiang provinces have insufficient agricultural inputs after authorities sealed off villages to fight the pandemic. The three provinces account for more than 20% of China’s grain production. According to the Jilin provincial government, about one-third of farmers did not have enough fertilizer at the end of March — only about three weeks before they were supposed to begin planting. Farmers and factory managers have blamed the disruption on China’s strict zero-Covid policy, under which authorities have adopted rigid controls ranging from traffic bans to local business shutdowns.

Livestock manure demand increases... Limited supplies and higher prices for commercial fertilizers have increased demand for manure. In the past, some farmers have had trouble giving it away. Now they have crop farmers calling them, some of them having waiting lists. As U.S. livestock herds and poultry flocks shrink, the manure supply might be limited, and prices could rise even more. However, the Iowa Department of Agriculture notes birds killed due to the bird flu can be composted and applied as fertilizer. Demand for manure handling equipment has also increased, with some farm equipment and implement dealers sold out for months.

Indian farmers holding back rapeseed crushing... Indian farmers produced a record 11 MMT rapeseed crop, up 28% from a year ago. However, industry sources report farmers are holding back sales during a time that they typically flood the market. Some farmers are holding back rapeseed sales as the price rallied after they made sales last year. This means rapeseed oil production might be limited and the country might have to import more than 1 MMT of vegetable oils every month to meet demand. Six months ago, rapeseed oil was available at a premium of 35% over soyoil, sunflower and palm oil. Now it is trading at par with other edible oils, according to a trader.

Iraq allows food imports for three months... Iraq will allow food imports for three months, the state news agency INA reported, citing the country’s prime ministry. The major grain importer wants to enhance food security by increasing wheat stocks and supporting local food subsidy programs. On Tuesday, the trade ministry said it is working to allocate 2 MMT of wheat for Iraq’s strategic reserves, which would be enough for six months.

Argentine farmers looking at switching wheat to sunflower acres... Argentine farmers might plant as many as 2 million hectares (4.9 million acres) of sunflowers for the 2022-23 growing season, Bloomberg reported. That would be a 20% increase from last year and the most in 14 years, according to the Buenos Aires Grain Exchange. Some of the factors driving the acreage change include higher sunflower oil prices, less export taxes on sunflower oil and less fertilizer. However, the acreage shift might be limited by available sunflower seeds to plant. Seeds just can’t be imported as the seed would not be bred for the Argentine environment. Normally, Argentine farmers plant wheat and barley in May. In July, sunflowers get planted in the northern regions of the country. Farmers on the Pampas plant sunflowers in October.

Argentina raises domestic biodiesel prices... Argentina’s government raised domestic biodiesel prices to 179,451 pesos ($1,608) per MT and will rise further increase them to 182,143 pesos ($1,632) in May and 185,785 pesos ($1,664) in June. The price will rise to 198,143 pesos ($1,775) per MT by August, according to a resolution in the official Gazette. The price had been 143,265 pesos per ton ($1,283) until March.

Australian state seeks to double soybean production... Queensland government scientists are working to double soybean production in high rainfall coastal and hinterland areas within three years. The project is working to make soybeans and sugarcane perfect partners. In the past five years, Queensland has produced an average of 21,680 MT of soybean per year with a gross value production of $14.5 million. The projected future demand in the region is for 200,000 MT of soybean per year for proposed new Australian processing facilities. Some of the efforts include training farmers to produce and maintain a quality product.

Turkey prices soar... Bird flu is causing turkey prices to soar, Bloomberg reported. Before the bird flu, one commodity researcher noted that turkey supplies were already predicted to be tight due to pandemic supply issues. More than 2 million turkeys, or about half a week’s slaughter, have already been lost due to the bird flu. Buyers are already vying for Thanksgiving turkey supplies.

Pro Farmer Evening Report: April 5, 2022

Tue, 05 Apr 2022 20:47:48 GMT

U.S. trade deficit narrows... February’s U.S. trade deficit declined less than $100 million from January’s revised $89.2 billion record, according to the U.S. Census Bureau. February exports were a record $228.6 billion, $4.1 billion more than January. February imports were $317.8 billion, $4.1 billion more than January imports. It was the fourth straight month imports have been $300 billion or more. Year-to-date, the total trade deficit increased $45.7 billion or 34.5% from 2021. Exports increased $68.0 billion or 17.6%. Imports increased $113.7 billion or 22.0%.

U.S. ag trade surplus increases... USDA reports the ag sector had a trade surplus of nearly $1.2 billion in February, up $1.0 billion from January. February’s ag exports totaled $15.6 billion, down from $15.9 billion in January. Ag imports for February were $14.5 billion, down $1.3 billion from January. Through the first five months of fiscal year (FY) 2022, U.S. agriculture is running a $9.1 billion surplus, with $84.1 billion of exports and $75.0 billion of imports. USDA forecasts a $10.5 billion ag trade surplus for FY 2022. The heaviest period for U.S. ag exports is through the first several months of the fiscal year, while imports typically pick up during spring.

Ag Economy Barometer drops amid war’s effect on input prices... The Purdue University/CME Group Ag Economy Barometer dipped to 113 in March, down 12 points from February and 36% lower than a year ago, marking the weakest farmer sentiment reading since May 2020. The decline was driven by producers’ weaker perceptions of current conditions and future expectations. The Index of Current Conditions declined 19 points to 113, down 44% from March 2021. The Index of Future Expectations fell 9 points to 113, down 31% from last year.

The March survey provided the first opportunity to ask producers how they expect the war in Ukraine to affect U.S. agriculture. Producers overwhelmingly said they expect input prices to be most affected (63%), followed by crop prices (33%) and livestock prices (3%).

Lawmakers ask Biden for fertilizer price relief... A group of lawmakers sent a letter to President Joe Biden asking him to review all available options to lower the cost of fertilizer, including increasing domestic natural gas production. The letter was led by Representatives Tom Emmer (R-Minn.), Pete Stauber (R-Minn.), Michelle Fischbach (R-Minn.), Greg Murphy (R-N.C.) and Jodey Arrington (R-Texas). Some of the other options listed in the letter included lifting the cross-border vaccine mandate for transporters of essential commerce, approving pending liquefied natural gas export permits and having USDA provide support for farmers.

Firms raise Brazil’s corn production estimate... StoneX and Safras & Mercado both raised their estimates for Brazil’s corn production. Commodity brokerage firm StoneX raised its total Brazil corn production forecast to 118.6 MMT, up 2.5 MT from its March forecast. The increase came from raising Brazil’s safrinha corn crop from 89.38 MMT to 91.9 MMT. Ag consultancy Safras & Mercado increased its Brazil corn production forecast to 118.155 MMT, up 2.47 MMT from February outlook. The increase was primarily due to the consultancy raising its estimate of the number of corn hectares planted by 89,000 to 14.669 million hectares.

Brazil and Belarus trying to find a way to trade potash... Brazil and Belarus are trying to find a way to ship potash from the Black Sea region to South America, Bloomberg reported. Belarusian President Alexander Lukashenko has approved smaller companies in his country to sell fertilizer to take advantage of higher prices. However, the issue is U.S. and EU sanctions on Belarus that prevent fertilizer shipments. Some industry sources say Brazil might have to barter or use Chinese currency and a Chinese intermediary to help facilitate the transaction.

Argentina raises ethanol prices... Argentine domestic prices for sugar and corn-based ethanol were raised from 59 cents per liter to 66 cents per liter, according to an announcement in the official gazette. The government regularly updates the biofuel price.

Egypt’s Russian wheat imports increased... Egypt imported 479,195 MT of wheat from Russia in March, up 24% from a year ago. Ukraine wheat exports to Egypt totaled 124,500 MT, down 42% from 2021. Traders note shipping slowed down at the start of the invasion and then picked up in March with either new contracts or ones signed before the war. Egyptian importers are still figuring out a secure payment channel to pay for Russian wheat. Egypt also has been looking at alternate wheat supplies. The country has a 2.6-month supply, below the government’s six-month target. However, its reserves will increase when the domestic harvest starts this month.

Large Chinese crushing plant damaged in Ukraine... Fighting around Mariupol in March damaged a Cofco Corp. sunflower seed crushing plant in Ukraine, Bloomberg reported. The plant can produce 1,500 MT of vegetable oil per day or about 10% of Ukraine’s supply and is the Chinese company’s only one in the country. The extent of the damage isn’t known. However, two main buildings have several holes. Dozens of bomb craters are around the facility. The facility also has a storage and a rail terminal connecting the plant to Cofco’s export terminal.

Putin: Western sanctions causing global food crisis... Russian President Vladimir Putin said Western sanctions would lead to more food shortages. He explained sanctions had disrupted fertilizer supply logistics from Russia and Belarus. Putin added higher natural gas prices made fertilizer production more expensive in the West. He predicted Western countries would print more money to make purchases and lead to food shortages in poor countries. As a result, food shortages will increase and cause waves of migration and higher food prices. Putin reiterated his country needed to be careful with food exports to “hostile” countries.

Mexico president asks for Vilsack’s help on food inflation... Mexican President Andres Manuel Lopez Obrador has asked USDA Secretary Tom Vilsack to work with Mexican Agriculture Minister Victor Villalobos to fight rising food inflation. Vilsack is in Mexico meeting with Villalobos to talk about cooperation opening up trade between the countries.

Mexico to allow U.S. potatoes nationwide by May 15... Following meetings between Vilsack and Villalobos, USDA announced Mexico would expand access to the entire Mexican market no later than May 15 for all U.S. table stock and chipping potatoes. U.S. and Mexico have concluded all necessary plant health protocols and agreed to a final visit by Mexican officials in April to finalize expanded access for U.S. potatoes to the entire Mexican market.

Pro Farmer Evening Report: April 4, 2022

Mon, 04 Apr 2022 21:21:08 GMT

Click here to view weekly export inspections charts and here for report details.

Check our advice monitor on ProFarmer.com for updates to our marketing plan.

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.

Pro Farmer Evening Report: April 1, 2022

Fri, 01 Apr 2022 21:21:23 GMT

Check our advice monitor on ProFarmer.com for updates to our marketing plan.

Your Pro Farmer newsletter is now available... USDA shocked traders by estimating farmers would plant more acres to soybeans than corn in 2022. That triggered a bearish reaction in soybean futures that may lead to a shift in momentum. Focus will now turn to spring weather and price action as traders add and subtract acres from USDA’s March benchmarks. Meanwhile, March 1 grain stocks surprisingly didn’t have any real surprises for a change. USDA’s Hogs & Pigs Report showed the U.S. hog herd contracted more than traders expected and there are no signs of expansion. But the market had a bearish reaction to bullish data, which typically isn’t a good sign. High gas prices are hurting consumers, so the Biden administration is planning the largest-ever release of emergency oil reserves and may lift summer sales restrictions on E15. But high gas prices aren’t as much of a concern as tight diesel supplies, especially for farmers. We cover all of these items and much more in this week’s newsletter, which you can access here .

February corn-for-ethanol use well above last year... USDA reported February corn-for-ethanol use totaled 405.2 million bu., down 58.3 million bu. (12.6%) from the downwardly revised January figure but up 72.3 million bu. (21.7%) from last year. Over the first half of the marketing year, corn-for-ethanol use at 2.689 billion bu. increased 9.8% from the same period last year. Over the final six months of 2021-22, corn-for-ethanol use must run 3% above the same period last year to hit USDA’s forecast of 5.350 billion bushels.

USDA reports higher soybean crush... February’s soybean crush totaled 174.4 million bu., according to USDA. That was down 19.9 million bu. (10.2%) from January but up 10.1 million bu. (6.1%) from last year. The February soy crush was just shy of the record for the month of 175.3 million bu. in 2020, but this year’s per-day rate was a record.

Soyoil stocks totaled 2.566 billion lbs. at the end of February, about 40 million lbs. more than expected. Stocks increased 66 million lbs. from January and were 260 million lbs. above year-ago.

IEA members agree on oil release, more details to come... Members of the International Energy Agency (IEA) agreed to a second coordinated oil release from reserves. However, the countries did not agree on the total volume or how much each country would release. President Joe Biden said U.S. allies and partners could release an additional 30 million to 50 million barrels of oil. The agency said that more details about the release would be announced early next week.

IMF: U.S. economy strong enough to avoid recession... U.S. economic growth will likely slow down but remain positive, the new chief economist at the International Monetary Fund (IMF) said. Bloomberg reported, Pierre-Olivier Gourinchas said it was too early to talk about the U.S. recession risk and he does not see a recessionary environment in the U.S. at least in the near future. IMF is updating its forecasts issued in January and will publish the results at the World Economic Outlook scheduled for April 19 during its spring meetings. The organization is still working on how much the Russian invasion will cut its growth estimates. Gourinchas said European economies are more vulnerable to impacts from the Russian invasion. IMF is also monitoring how pandemic lockdowns in China will affect the economy.

March jobs growth slows more than expected... The U.S. economy added 431,000 non-farm jobs in March, the Labor Department reported on Friday. Economists polled by Reuters expected the report to show the U.S. economy added 490,000 jobs. The unemployment rate fell to 3.6% and the labor force participation rate ticked up. Economists predicted the unemployment rate would decline 0.1 points to 3.7%. February’s job growth was revised to 750,000 jobs, up from the previously reported 678,000 jobs. The report also showed average hourly earnings rose 0.4% from February and 5.6% from a year ago, the most since May 2020.

The bond market is pricing in a series of 50-basis-point interest rate hikes by the Fed amid the strong jobs market and surging inflation.

Higher fuel efficiency requirements announced... The National Highway Traffic Safety Administration (NHTSA) announced fuel efficiency requirements that will increase fuel efficiency 8% annually for model years 2024-2025 and 10% annually for the model year 2026. NHTSA will also increase the estimated fleetwide average by nearly 10 miles per gallon for the model year 2026. The new standard is slightly raised from its August proposal but close to the EPA’s proposal. EPA and NHTSA are expected to write fuel efficiency rules for model year 2027 and beyond that would require automakers to produce electric vehicles to meet them.

Ocean Shipping Reform Act passes Senate, heads to conference committee... The U.S. Senate passed the Ocean Shipping Reform Act. Under the Senate bill, carriers would have to prove they are acting reasonably when they levy late fees for cargo. The bill would also prohibit carriers from unreasonably refusing to load cargo at U.S. ports and authorize the Federal Maritime Commission to launch investigations on its own of a carrier’s business practices. Co-sponsor Sen. John Thune (R-S.D.) said the bill would help consumers by “promoting fluidity and efficiency of the supply chain.” The House had already passed a similar bill. The bill will now head to one of the first conference committees between the House and Senate during this session to iron out differences in the two versions of the legislation.

Two more senators joined the call to plant some CRP land... Sens. Marco Rubio (R-Fla.) and Cynthia Lummis (R-Wyo.) sent a letter to USDA Secretary Tom Vilsack calling on USDA to allow farmers to plant acres enrolled in the Conservation Reserve Program (CRP) without penalty. They join farm groups and other politicians asking USDA to tap CRP acres to boost grain supplies in the aftermath of Russia’s invasion of Ukraine.

Panama Canal proposes toll restructuring and increases... The Panama Canal Authority proposed a comprehensive restructuring of its toll system, which would increase the rates charged for crossing the waterway. The restructuring would reduce the structure to less than 60 tariffs from the current 430. It would also focus on vessel capacity and fixed tariffs per transit. The toll would also be different based on the set of locks used. Car carriers, chemical and LNG tankers and vessels carrying bulk such as grains and coal would also see higher tariffs, affecting market prices by roughly 0.1% to 0.7%. The most affected segments would be passenger vessels and container ships. The canal authority will hold a public hearing on the changes on May 20 in Panama and consider feedback sent via email by May 17. Once approved, the new toll structure would be gradually implemented from January 2023 to 2025.

Russian agricultural exports increased in March... Russia exported about 1.7 MMT of wheat last month, according to consultant ProZerno. That would be 600,000 MT more than last year, but nearly half of the amount shipped in March 2020. March 2021 exports were reduced due to government grain export tax shifts. Geneva-based crop data company Agflow reported Russian agricultural exports that included corn, barley and sunflower oil totaled about 2.5 MMT during March, a 15% increase from last year.

Russia threatens ag exports only to ‘friendly’ countries... Russia could limit agricultural exports to only “friendly” countries, warned Dmitry Medvedev on social media. Medvedev is now deputy chairman of Russia’s security council and a close ally of Russian President Vladimir Putin. Reuters reported that countries importing Russian ag exports would pay in a combination of rubles and the importing country’s currency. Medvedev said Russia had plenty of “friendly” countries, and none of them were in Europe or North America. Putin recently threatened to stop exporting oil to “unfriendly” countries unless they paid in rubles.

SovEcon increases Russian wheat export forecast... Black Sea region consulting firm SovEcon increased 2021-22 Russian wheat exports by 400,000 MT to 33.9 MMT despite the war in the Black Sea. USDA projects Russian 2021-22 wheat exports at 32 MMT. The consultancy expects the country to reach the 8-MMT wheat export quota through June if no additional restrictions affect shipments. Most vessel availability and payment problems have been resolved, SovEcon reported. Other factors in its forecast include high wheat world prices, the weak ruble, demand switching from Ukraine to Russia and strong shipments in the last half of March.

China calls for efforts to ensure stable corn and rice production, supply... Chinese Vice Premier Hu Chunhua called for efforts to boost corn and rice production to stabilize the output and supply of the crops. The country needs to close the gap between production and demand, Xinhua news reported. Speaking at a video conference on advancing the production of corn and rice, he emphasized that efforts should be made to ensure corn planting areas and output in the corn regions stabilize at last year’s levels. Hu called for more regulation of corn processing demand and strict control of the use of corn for fuel. He added more efforts should be made to stabilize and increase rice production.

Attaché increases Brazil’s beef production, exports... USDA’s attaché in Brazil raised its estimate for the country’s 2022 beef production and exports. Brazilian beef production is forecast at 9.85 MMT, 3.7% higher than 2021. The attaché says higher Brazilian and global beef prices, more cattle available for slaughter and higher slaughter weights in the first half of 2022 are the main factors driving higher production. The post forecasts Brazilian beef exports will increase 12% from 2021. In 2021, Brazil exported 1.67 MMT of beef and veal, which was 8.9% lower than 2020. Brazilian beef exports are expected to be 26.4% of total production, up two percentage points from 2021.

Argentine corn, soybean shipment arrives in Lebanon... A ship carrying 33,400 MT of Argentine corn and soybean arrived in Lebanon’s Tripoli port to ease the market shortages caused by the Ukraine/Russia crisis, the National News Agency reported. The port is the only one in Lebanon capable of receiving large dry bulk ships. Lebanon is currently looking for alternative markets for the import of wheat, corn, oil and other grains and products previously imported from Ukraine and Russia.

2022-23 Brazil cotton acres might drop... With input costs increasing more than prices, Brazilian farmers might plant less cotton, according to Brazilian Association of Cotton Producers (Abrapa) president Julio Busato. He told Reuters the reduced cotton acres would likely be switched to corn or soybeans. Brazil, the world’s second-largest cotton exporter, produced a record 3 MMT in 2019-20. Production dropped to 2.35 MMT in 2020-21. Production in 2021-22 returned closer to the record high. Busato hopes 2022-23 total output will not decline below 2.5 MMT. He added that the cotton industry is worried about a possible economic downturn affecting demand.

Australia and India to sign interim trade deal... Australian and Indian officials will sign the interim Australia-India Economic Cooperation and Trade Agreement on Saturday as they continue working toward a complete free-trade agreement. Under the deal, 96% of Indian goods would enter Australia duty-free and 85% of Australian exports into India would be duty-free. Australia has been working to reduce its reliance on its largest trading partner, China. Australia Prime Minister Scott Morrison wanted to sign the deal before calling a national election.

Pro Farmer Evening Report: March 31, 2022

Thu, 31 Mar 2022 20:34:21 GMT

Click here to view weekly export sales/commitments charts and here for report details.

Check our advice monitor on ProFarmer.com for updates to our marketing plan.

Farmers expected to plant less corn, more soybeans... In its annual Prospective Plantings Report, USDA says farmers intend to plant 89.490 million acres of corn, down nearly 3.9 million acres from actual plantings last year and 2.5 million acres shy of the average pre-report estimate. They plan to plant 90.955 million acres to soybeans, up 3.8 million acres from last year and roughly 2.2 million acres more than traders expected. Combined corn and soybean acreage intentions are estimated at 180.445 million acres, which would be down 107,000 acres from last year.

The amount of cotton planted is expected to increase just over 1 million acres from last year to 12.234 million acres, 227,000 acres more than the average pre-report estimate. Farmers intend to plant 11.200 million acres of spring wheat, down 220,000 acres from last year and 601,000 acres below the average pre-report estimate.

USDA estimates total acres planted to principal crops at 317.375 million acres, up 214,000 acres from last year. That would be the highest acreage figure for principal crops since 319.3 million acres in 2018.

Click here for more report details.

March 1 stocks offers no major surprises for a change... In the Grain Stocks Report, USDA reported March 1 corn stocks at 7.850 billion bu., up 154 million bu. from last year but 27 million bu. below the average pre-report trade estimate. For soybeans, stocks totaled 1.931 billion bu., up 369 million bu. from a year-ago and 29 million bu. above the average pre-report trade estimate. March 1 wheat stocks totaled 1.025 billion bu., down 286 million bu. from last year and 20 million bu. below the average pre-report trade estimate.

More oil to be released from U.S. reserves... President Joe Biden announced the largest release from the U.S. emergency oil reserve and challenged oil companies to drill more to decrease gasoline prices. Starting in May, the U.S. will release 1 million barrels per day (bpd) of crude oil for six months from the Strategic Petroleum Reserve (SPR). The release would total 180 million barrels, about two days’ worth of global demand.

The administration is working with the International Energy Agency (IEA) to coordinate releases from reserves by other oil-consuming nations. Other countries might announce their releases at the IEA meeting on Friday. However, their releases are expected to be smaller than the U.S.

As expected, OPEC+ sticks with production plan... OPEC+, which includes Russia, ratified an existing plan to increase supplies in May by 432,000 barrels a day, according to a statement. The decision to stick with a gradual supply increase plan was in line with expectations. The cartel insists there’s no shortage of oil in the market. Some countries, including the U.S., asked OPEC+ to increase production more than its production plan.

Russia announces sunflower seed export ban, sunflower oil, meal quota... Russian sunflower seed exports will be banned from April 1 until the end of August. From April 15 to Aug. 31, there will be a 1.5 MMT sunflower oil export quota, according to Russia’s agriculture ministry. Sunflower meal will also have a 700,000-MT export quota. Russia is trying to avoid domestic shortages and ease price pressure. An Indian-based dealer said the restrictions will keep prices high but is unlikely to affect Indian buying. Russian crude sunflower oil is offered at $2,150 per metric ton in India for April shipment, compared to $1,767 for soyoil and $1,720 for crude palm oil.

Syngenta expects a 33% reduction in Ukraine crop production... Syngenta hopes to save about two-thirds of Ukraine’s normal crop production, according to a company spokesperson. The company does not expect a total failure in 2022. Syngenta is providing seeds and crop protection products to farmers in the country for food production. Company officials said Ukraine’s business activity is not for profit at the moment. It is providing the inputs on credit with a high risk of default.

“We are taking these high risks consciously and believe it’s the right thing to do,” a company spokesperson said.

The company employs around 730 people in Ukraine and 800 in Russia. It has no plans to withdraw from Russia as crop production is not subject to imposed Russian sanctions.

USDA announces livestock relief program... USDA announced that ranchers who have an approved 2021 Livestock Forage Disaster Program (LFP) application would soon begin receiving emergency relief payments for increases in additional feed costs in 2021 through the Farm Service Agency’s (FSA) new Emergency Livestock Relief Program (ELRP). Agriculture Secretary Tom Vilsack said phase one of the program would use LFP data to allow USDA to distribute payments within days. Producers are not required to apply for payment.

Phase one ELRP payments will equal the eligible livestock producer’s gross 2021 LFP calculated payment multiplied by a payment percentage, to reach a reasonable approximation of increased supplemental feed costs for eligible livestock producers in 2021. The ELRP payment percentage will be 90% for historically underserved producers, including beginning, limited resource and veteran farmers and ranchers, and 75% for all other producers. These payments will be subject to a payment limitation. Payments to eligible producers through phase one of ELRP are estimated to total more than $577 million.

Vilsack asks Surface Transportation Board to improve ag rail service... USDA Secretary Tom Vilsack tweeted he asked the Surface Transportation Board to take urgent action to improve rail service for agricultural commodities. He noted current rail disruptions pose critical threats to agriculture, including domestic meat and poultry production. Last week, the National Grain and Feed Association requested the Surface Transportation Board to take action. Organization members have reported delays with train movements that resulted in either not getting deliveries in or out of their facilities causing livestock feed delivery issues.

Winter wheat drought shows modest improvement... The amount of U.S. winter wheat considered in drought conditions decreased one point to 69% for the week ended March 29, according to the U.S. Drought Monitor. USDA said winter wheat drought was 20% “moderate,” 32% “severe,” 16% “extreme” and 2% “exceptional.” Last week, USDA rated winter wheat drought as 21% “moderate,” 31% “severe,” 16% “extreme” and 2% “exceptional.”

For HRW areas, the area considered abnormally dry/drought in Kansas dropped five points to 72%. Oklahoma and Texas each had a one-point drop in the area classified as abnormally dry/drought to 86% and 95%, respectively. The abnormally dry/drought area in South Dakota increased by four points to 86%.

In SRW areas, the abnormally dry/drought area in North Carolina declined by three points to 41%. Missouri had none of its area classified as abnormally dry/drought, a 26-point decrease. Arkansas had a four-point drop in the area listed as abnormally dry/drought to 31%. Michigan had 23% of its area considered abnormally dry/drought, a 31-point decline. Illinois had 19% of its land classified as abnormally dry/drought, a nine-point drop.

Tai: U.S. must shift trade policy focus... U.S. Trade Representative Katherine Tai said the U.S. must shift the focus of its trade policy to rebuilding its domestic manufacturing industries and lessening ties to unfriendly economies. Appearing before the House Ways and Means Committee on Wednesday, Tai said global events such as Russia’s invasion of Ukraine and the supply-chain disruptions triggered by the Covid-19 pandemic point to the need for new priorities. “The problem that we are confronted with today—after two years of Covid and also Russia’s invasion of Ukraine — is that this version of globalization that we are living in has not taken us to a place where we feel more secure,” Tai said.

Both Democrats and Republicans on the House Ways and Means Committee Wednesday prodded Tai about reaching new free trade agreements (FTAs) with several countries like the European Union (EU), U.K. and Kenya, but Tai gave no indication that the administration was going to pursue any such deals. Instead, Tai focused her remarks on the Biden administration push to use Trade and Investment Framework Agreements (TIFAs) to achieve U.S. trade goals. While those types of agreements can address certain areas on trade like sanitary or phytosanitary issues relative to agricultural products, they do not address tariff levels or market access.

As for China, Tai commented that discussions with Chinese Vice Premier Liu He over their Phase 1 trade agreement commitments had been difficult and resulted in little progress on getting China to live up to their commitments — observations that Tai has made in recent weeks relative to the talks that started in October.

While Tai pointed to other actions by the administration on trade to reduce tensions and remove tariffs in certain areas, she did not offer any new update on getting Canada to bring its operation of tariff-rate quotas (TRQs) for dairy in line with a U.S.-Mexico-Canada Agreement (USMCA) ruling which found them in violation of the deal. Tai also did not indicate whether the U.S. was ready to push ahead with retaliation against Canada in the matter.

Bottom line: While Tai offered lawmakers some additional perspective on the administration’s trade agenda, the areas she did not comment on speak louder on their trade policy.

Swine feed facility announced for western Iowa... AMVC and Landus Cooperative will build a 400,000 ton per year swine feed mill at Landus’ existing grain facility in Hamlin, Iowa. The mill is expected to generate demand for roughly 8.5 million bu. of corn and 48,000 tons of soybean meal annually. AMVC will own and operate the mill. Landus will originate grain. The project is expected to be completed by summer 2024.

Canada lawsuit alleges meatpacker price-fixing... The four largest beef packers in North America face a possible class-action lawsuit in Québec alleging the companies have colluded to raise the price of beef since 2015. Option consommateurs, a non-profit consumer organization, applied on March 24 to institute the class action against Cargill, Inc., JBS USA Food Company, Tyson Foods Inc. and National Beef Packing Company, alleging they conspired to restrict competition related to the production, supply or sale of beef in Québec. Members of the class action include anyone who purchased beef in Québec on or after Jan. 1, 2015.

The class action is currently at the authorization stage, meaning it may not be approved. The lawsuit seeks a judgment ordering the four companies to pay a financial amount equivalent to the profits made from the artificial inflation of the selling price. The amount is unknown at this time.

A similar ongoing class action is being pursued in British Columbia with the same four beef packers involved in price-fixing. More lawsuits are expected.

Mexican president: Food price controls possible... Mexican President Andres Manuel Lopez Obrador said the country might use food price controls if inflation remains high. He explained in the past, Mexico controlled inflation with fuel price controls. He said his country would do the same for food if inflation remains high for a prolonged period. Mexico’s inflation rate has been around 7%, the central bank’s target is 3%. The bank raised its benchmark interest rate to 6.5% last week.

Pro Farmer Evening Report: March 30, 2022

Wed, 30 Mar 2022 20:15:19 GMT

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Hogs & Pigs Report: Herd contraction greater than expected, no signs of expansion restarting... USDA estimates the U.S. hog herd at 72.2 million head as of March 1, down 1.7 million head (2.3%) from year-ago and 837,000 head less than the average pre-report estimate implied. The market hog inventory declined 2.4% and the breeding herd dropped 1.9%. That’s the smallest March hog herd and market hog inventory since 2018. The breeding herd is the smallest since 2017.

Hogs & Pigs Report	USDA (% of year-ago)	Average estimate (% of year-ago)
All hogs March 1	97.7	98.8
Kept for breeding	98.1	100.1
Kept for marketing	97.6	98.7

Market hog inventory
under 50 lbs.	99.0	101.1
50 lbs.-119 lbs.	98.1	99.5
120 lbs.-179 lbs.	96.5	96.5
Over 180 lbs.	96.2	97.9

Pig crop (Dec.-Feb.)	99.0	101.3
Pigs per litter (Dec.-Feb.)	100.1	101.0
Farrowings (Dec.-Feb.)	99.0	100.4
Farrowing intentions (March-May)	98.5	99.7
Farrowing intentions (June-Aug.)	99.4	100.6

The winter pig crop came in 309,000 head (1.0%) below year-ago and well below expectations for a 1.3% increase. Sow farrowings during winter dropped 1.0%, which wasn’t offset by a 0.1% increase in litter size. With the breeding herd down 1.9%, spring and summer farrowing intentions look optimistic at 1.5% and 0.6% below year-ago levels, respectively. Producers are giving no indications they intend to throw the brakes on contraction and start to rebuild their herds. Even with an increase in litter size, pig crops will continue to decline and the hog herd will contract further.

Market hog inventories signal slaughter will run about 3.5% to 4% below year-ago through spring and then be about 1% to 2% under last year’s levels through summer and into fall.

USDA made relatively minor adjustments to past data. It revised its estimate of the Dec. 1, 2021 hog population lower by 55,000 head (0.1%) to 74.146 million head. That change came in the size of the breeding herd, with the 55,000-head drop to 6.125 million representing a 0.9% decline. The Sept. 1, 2021 hog population was boosted by 250,000 head (0.3%) to 74.867 million head, reflecting a 250,000-head addition to the number of market hogs.

The report data is bullish in virtually all categories, which should trigger a strong price rally on Thursday.

Fourth quarter GDP growth trimmed... In its third estimate for the fourth quarter of 2021, the Commerce Department said real gross domestic product (GDP) increased at an annual rate of 6.9%, down 0.1 percentage point from the “second” estimate released in February. Economists polled by Reuters expected GDP growth to be revised up to a 7.1% rate. Personal consumption expenditures were revised down 0.6 points from the previous estimate to up 2.5% for the fourth quarter of 2021. In the third quarter of 2021, real GDP increased 2.3%. For all of 2021, the economy grew 5.7%, unrevised from the second estimate. It was the strongest yearly growth since 1984.

More support for a possible bigger May interest rate hike... Federal Reserve Bank of Richmond President Thomas Barkin told Bloomberg Television he is open to raising interest rates by 50 basis points at the May 3-4 Federal Open Market Committee meeting. He would base his decision on the strength of the U.S. economy. He added that the interest rate might need to go above neutral, which is 2.4%, to bring down inflation. Philadelphia Fed President Patrick Harker is also open to a 50-basis point hike at the May meeting. Traders put the odds of a 50-basis point hike at the May meeting better than 50%.

Traders expect European Central Bank interest rate hikes sooner... Money market traders now expect the European Central Bank to raise interest rates two months earlier than previously thought. Investors think the bank will raise interest rates by 50 basis points through October. Previously, they thought rates would increase by the that amount through December. Investors switched their minds after Spain’s inflation rate increased more than expected. Germany’s inflation rate was also reported higher than expected. The euro zone’s central bank plans to end its bond-purchasing program by summer and any rate hike would be after that.

Ukraine discussing shipping from Romanian port... Ukraine is discussing shipping its agricultural exports from the Romanian Black Sea port of Constanta, according to Ukraine’s agriculture ministry. The country is also discussing possibilities of rail transportation as an option. However, there are issues with Ukraine and European railways as they use different gauges. In addition, there is also a lack of European locomotives. Currently, Ukraine can ship exports three ways, the Danube ports, railways and highways. Danube ports account for 30% of the shipments. However, due to lack of investment because of limited use, they are limited on how much more exports can be shipped.

Ukraine lost $1.5 billion in food exports... During the first month of the Russian invasion, Ukraine has lost $1.5 billion in food exports, according to the country’s First Deputy Minister of Agrarian Policy and Food of Ukraine Taras Vysotsky. He explained before the invasion, Ukraine exported up to 5 MMT of agricultural products a month through Odesa and Mykolaiv. The export capacity has dropped to 500,000 MT per month. Up to 30,000 MT of domestic grain products are shipped by rail daily.

Ukraine accuses Russia of planting mines in the Black Sea... In recent days, Turkish and Romanian military diving teams have been defusing abandoned mines around their waters. The shipping insurance market increased the area it considers high risk in the region and raised insurance premiums as the shipping risks increased.

USDA confirms more HPAI cases... USDA’s Animal and Plant Health Inspection Service (APHIS) confirmed more highly pathogenic avian influenza (HPAI) cases. A commercial turkey flock in Johnston County, North Carolina tested positive for the disease. APHIS confirmed a case in a non-commercial backyard chicken flock in Kidder County, North Dakota. Non-commercial, mixed-species backyard flocks in Berkshire County, Massachusetts, Johnson County, Wyoming and Franklin County, Ohio were also confirmed. That raises the total number of U.S. cases of HPAI to 84.

Ethanol conversion kit sales soar in France... More French drivers are purchasing ethanol conversion kits to allow their cars to run on higher ethanol blends to take advantage of the ethanol and gas price differential. FlexFuel Energy Development reported it had sold 6,400 kits in the first 22 days of March, compared to 3,468 in February and 2,166 in January. Other companies are also reporting similar sales. The kits enable car engines to use an E-85 blend instead of the standard E-10 blend.

Israel shipping congestion increases... An unprecedented 80 cargoes are waiting to dock in Israeli ports, according to industry officials. They note some ships are deciding to bypass Israel altogether. Last week, Israel’s Minister of Transport, Merav Michaeli, instructed ports to prioritize t vessels unloading grain and livestock feed. The bottleneck comes just before Easter, Ramadan and Passover and the media is warning about possible shortages.

Iowa farmland soars 14% in the past six months... The Iowa Chapter of the Realtors Land Institutes survey pegs the state-wide value of high-quality cropland at $14,080 an acre, up 14.1% from September; the value of medium-quality cropland at $10,902, up 14.2%; and the value of low-quality cropland at $7,701 an acre, up 13.7%. In addition to cropland values, the survey lists a gain of 12.3% in pastureland value. According to the survey, 64% of all buyers were farmers and the remaining 36% were investors. Of the investor group, just over half, 52%, were local investors and 48% were non-local investors, some with 1031 money.

Spain allows supermarkets to ration products... Spain’s government authorized supermarkets to ration products until June 30 to prevent shortages. Supermarkets have requested legal backing from the government. The authorization comes after the Russian invasion of Ukraine and a trucker strike that resulted in shortages of eggs, milk, flour and sunflower oil. However, most of the shortages resulted from consumer hoarding more than actual supply issues.

Pro Farmer Evening Report: March 29, 2022

Tue, 29 Mar 2022 20:15:20 GMT

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H&P Report to show further hog herd contraction... Analysts expect Wednesday’s Hogs & Pigs Report to show the U.S. hog herd contracted 1.2% from year-ago as of March 1. Based on the average pre-report estimate, the March 1 hog herd is expected to total just over 73 million head, including a market hog inventory of 66.8 million head (down 1.3%) and breeding herd of 6.2 million head (up 0.1%). If realized, that would be the smallest March 1 hog inventory since 2018 when it was 72.1 million head.

	Average estimate (% of year-ago)	Range of estimates (% of year-ago)
All hogs March 1	98.8	97.1-99.5
Kept for breeding	100.1	99.4-100.5
Kept for marketing	98.7	97.2-99.5

Market hog inventory
under 50 lbs.	101.1	99.3-103.2
50 lbs.-119 lbs.	99.5	97.9-101.4
120 lbs.-179 lbs.	96.5	94.2-98.2
Over 180 lbs.	97.9	95.6-102.3

Pig crop (Dec.-Feb.)	101.3	100.4-102.6
Pigs per litter (Dec.-Feb.)	101.0	100.2-102.1
Farrowings (Dec.-Feb.)	100.4	100-100.9
Farrowing intentions (March-May)	99.7	99.2-100.5
Farrowing intentions (June-Aug.)	100.6	99.5-101.4

Analysts expect USDA to show the winter pig crop expanded 1.3% from last year amid a 0.4% increase in farrowings and a 1.0% rise in the number of pigs saved per litter. Looking forward, traders expect spring farrowing intentions to be down 0.3%, but to rise 0.6% during the summer months.

Fewer corn acres, more soybean seedings expected... USDA’s Prospective Plantings Report at 11 a.m. CT on Thursday is widely expected to show farmers intend to plant fewer acres to corn this year and more soybean seedings. Based on the average pre-report estimates from a Reuters survey, corn acres are expected to decline about 1.4 million acres to 92.0 million acres and soybean area is likely to expand by about 1.5 million acres to 88.7 million acres. But the range of estimates is wide for both. Traders also expect all wheat acres to rise to nearly 47.8 million acres, including 34.4 million acres of winter wheat, 11.8 million acres of other spring wheat and 1.7 million acres of durum. Cotton seedings are expected to decline modestly from last year to 12.0 million acres.

Expectations for Prospective Plantings Report
Corn – million acres
Average est.	92.001
Range	89.700-93.500
Pro Farmer/Doane survey	91.900
USDA final 2021	93.357

Soybeans – million acres
Average est.	88.727
Range	86.000-92.208
Pro Farmer/Doane survey	87.800
USDA final 2021	87.195

All wheat – million acres
Average est.	47.771
Range	45.900-48.892
Pro Farmer/Doane survey	48.500
USDA final 2021	46.703

Winter wheat – million acres
Average est.	34.382
Range	33.650-35.600
Pro Farmer/Doane survey	34.400
USDA final 2021	33.648

Other spring wheat – million acres
Average est.	11.801
Range	10.800-12.450
Pro Farmer/Doane survey	12.350
USDA final 2021	11.420

Durum wheat – million acres
Average est.	1.727
Range	1.500-1.835
Pro Farmer/Doane survey	1.750
USDA final 2021	1.635

Cotton – million acres
Average est.	12.007
Range	11.700-12.200
Pro Farmer/Doane survey	12.000
USDA final 2021	12.093

Huge range of estimates for March 1 grain stocks... Plantings intentions are getting much of the attention ahead of Thursday’s USDA reports. But it could be March 1 stocks that end up moving markets. The corn market has a history of major misses on quarterly stocks and the pre-report range of estimates is wide for corn, soybeans and wheat.

Expectations for Quarterly Grain Stocks Report
Corn – billion bu.
Average est. for March 1, 2022	7.877
Range	7.630-8.087
USDA Dec. 1, 2021	11.647
USDA March 1, 2021	7.696

Soybeans – billion bu.
Average est. for March 1, 2022	1.902
Range	1.562-1.965
USDA Dec. 1, 2021	3.149
USDA March 1, 2021	1.562

Wheat – billion bu.
Average est. for March 1, 2022	1.045
Range	0.998-1.302
USDA Dec. 1, 2021	1.390
USDA March 1, 2021	1.311

Another bond yield inversion signals potential recession... On Tuesday, for the first time since 2019, the U.S. two-year Treasury bond yield exceeded the 10-year Treasury bond yield, inverting yet another segment of the Treasury curve and strengthening the view that interest rate increases may cause a recession, Bloomberg reported. It is the latest inversion that started in October when 20-year yields topped 30-year yields. In the past month, inversion has come to the 7- to 10-year and the 5- to 7-year segments and others. Ben Emons, global macro strategist with Medley Global Advisors LLC, explained there has not been a recession without an inversion. However, he cautioned timing of the economic downturn is unknown and can take up to two years.

U.S. consumer confidence rebounds... The Conference Board Consumer Confidence Index rose to a reading of 107.2 this month from a downwardly revised 105.7 in February. Economists polled by Reuters expected the index to decline to 107.0 from the initially reported reading of 110.5 in February. The Present Situation Index — based on consumers’ assessment of current business and labor market conditions — improved to 153.0 from 143.0 last month. However, the Expectations Index — based on consumers’ short-term outlook for income, business, and labor market conditions — declined to 76.6 from 80.8. Consumers’ one-year inflation expectations shot up to the highest since 1987.

Investors expect Bank of Canada interest rate hikes to be more aggressive... The Bank of Canada will likely start raising interest rates in half-percentage-point increments, according to investors. Chances of a larger-sized move on April 13, when the central bank will make its next interest rate announcement, have increased to 70%. Investors expect the central bank to raise interest rates between 200 and 225 basis points in the six remaining interest rate announcements in 2022, up from about 140 basis points previously expected. That implies that up to three of those meetings could result in hikes greater than the quarter-percentage-point increments usually favored by the central bank. The last time it pushed through a half-percentage-point hike was in May 2000. The central bank raised rates earlier this month for the first time since October 2018, lifting its policy rate to 0.50%. Investors see the Bank of Canada’s policy rate peaking at about 3% next year.

EU wheat exports trail last year... As of March 27, the EU has exported 19.87 MMT of wheat during the 2021-22 marketing year, down 610,000 MT from the same period last year. Barley exports are down 220,000 MT from a year ago to 5.79 MMT. Corn imports are also down to 12.05 MMT, down 50,000 from last year.

Egypt wheat imports could hit a nine-year low... Egypt’s imports could fall to 11 MMT for the marketing year that starts in July, according to a report from USDA’s attaché in Egypt. That would be the lowest in nine years. The attaché reduced its estimate for the current year to 12 MMT, 4% below USDA’s official forecast. Egyptian corn imports were also cut to 9.2 MMT in the current marketing year, 500,000 MT below the official USDA estimate.

Revised cattle market transparency bill released... A bipartisan group of senators released an updated version of the Cattle Price Discovery and Transparency Act. Under the revised version, there would still be a requirement for minimum purchase levels by packers, a key concern point among many in the cattle industry. Under the revamped version, USDA would establish five to seven regions in the continental U.S. and set “minimum levels of fed cattle purchases made through approved pricing mechanisms.” The legislation identifies those mechanisms as cattle purchases made through negotiated cash, negotiated grid, at a stockyard and through trading systems that multiple buyers and sellers regularly can make and accept bids. The package would create a publicly available library of marketing contracts, mandating boxed beef reporting to ensure transparency, expediting the reporting of cattle carcass weights and requiring a packer to report the number of cattle scheduled to be delivered for slaughter each day for the next 14 days. The lawmakers worked with USDA to develop the current version. It is not clear if the revisions will win any additional supporters. The North American Meat Institute opposes the revised cattle market transparency bill.

Argentine farmers warned about possible diesel shortages during harvest... The Argentine Federation of Gasoline Dispensers in the Interior warns farmers that if diesel is not imported quickly, it will lead to shortages when farmers harvest their corn and soybean crops and ship them. Any diesel shortage would be felt most in the country and not in large cities. The country is working to replace Russian diesel imports. The group says there is more demand this year for diesel than in the previous two years.

Argentine corn ethanol group demands a price increase... Argentine corn ethanol companies are threatening to quit producing if they don’t get a price increase. The group asks for corn ethanol prices to be raised from 59 cents per liter to 90 cents per liter. The group says the price of corn has increased 80% since September 2021, while ethanol prices have only increased 10%. The organization says several ethanol producers are looking at bankruptcy. The country will need to replace 6% of the nation’s gasoline supply if corn ethanol production is halted.

Bangladesh cotton industry wants direct shipping of U.S. cotton... Bangladesh Textile Mills Association (BTMA) leaders want to establish a direct shipping line from the U.S. to Bangladesh to make it easier and cheaper to import U.S. cotton and export products to the United States. The group wants to diversify to include more U.S. cotton. However, they explain many shipping lines will not ship to Chattogram port because of congestion and the extended loading and unloading times. The group will propose a direct shipping line from the U.S. to the Bangladesh government. USDA predicts Bangladesh will import 8.3 million bales of cotton for 2021-22 and is the second-largest import market for cotton.

Rabobank: Ukraine conflict could push wheat prices to record highs... For the 2022-23 crop marketing year, RaboResearch estimates the average on-farm cash price will be $5.77 for corn and $10.50 for wheat. Andrick Payen, grain and oilseed analyst with Rabo AgriFinance, said the firm projected U.S. farm prices to be strong this year, but the Ukrainian conflict could push wheat prices to record highs. According to RaboResearch analysis, a 200-million-bu. increase in exports for each commodity would increase the 2022-23 average on-farm price for corn by approximately 13% and wheat by about 50%.

Brazil’s soybean acreage growth to slow... Brazil’s 2022-23 soybean area will expand by 0.5%, the slowest pace of growth in more than 15 years, according to investment bank Itau BBA agricultural specialists. They explained farmers face higher costs to convert pasture to field crops. Brazil farmers increased their soybean area by 3.8% to 40.7 million hectares (100.5 million acres) in 2021-22. The bankers predicted Brazil’s 2022-23 crop at 141 MMT.

Pro Farmer Evening Report: March 28, 2022

Mon, 28 Mar 2022 20:27:08 GMT

Click here to view weekly export inspections charts and here to view report details.

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Supreme Court to hear California Prop. 12 case... The Supreme Court agreed to hear the case challenging California’s Proposition 12 law. The California law was passed by voters in November 2018 and backed by the Humane Society. The law, called Proposition 12, requires breeding pigs to be able to lie down and turn around in spaces in which they are housed, essentially outlawing pork produced using small gestation stalls in most circumstances. Farm groups, including the National Pork Producers Council (NPPC) and the American Farm Bureau Federation (AFBF), are seeking to overturn the law that also bans the sale of pork from hogs that don’t meet the state’s production standards, even if the pork was raised on farms outside of California. Nearly all pork currently produced in the United States fails to meet California’s standards.

In the coming weeks, NPPC and AFBF will file their initial briefings with the Supreme Court, which could hear oral arguments in the fall and could render a decision by the end of the year. NPPC started the legal battle against the ballot initiative since it was approved, arguing at the U.S. district and appellate court levels that Prop. 12 violates the Constitution’s Commerce Clause, which grants Congress the power to regulate trade among the states and limits the ability of states to regulate commerce outside their borders. The high court is taking up the case on appeal from the U.S. Court of Appeals for the 9th Circuit, which in July 2021 upheld a lower court ruling against the NPPC-AFBF lawsuit.

“We are extremely pleased that the Supreme Court will consider the constitutionality of Proposition 12, in which California seeks to impose regulations targeting farming practices outside its borders that would stifle interstate and international commerce,” said NPPC President Terry Wolters.

Meanwhile, Prop. 12 supporters think the Supreme Court will uphold the law.

“We are confident the Supreme Court will uphold California’s landmark farm animal protection law,” said Kitty Block, president and CEO of the Humane Society of the United States. “The Court has repeatedly affirmed the states’ rights to enact laws protecting animals, public health and safety, and the pork industry should focus on eliminating cruel caging of animals rather than attacking popular, voter-passed animal cruelty laws.”

U.S. diesel exports increase... U.S. waterborne diesel exports from the U.S. Gulf Coast increased to 1.04 million barrels per day so far this month, according to Vortexa, an oil analytics firm. Current diesel exports are on pace for their highest level since August 2019. This has reduced U.S. diesel stocks to their lowest seasonally-adjusted level in eight years. Last week, two diesel cargoes were shipped from New York to Europe, a rare move. Europe has been a big buyer of diesel as they replace Russian diesel. Latin America has also increased its diesel purchases.

Sources: OPEC+ likely to stick to production target plan... When OPEC+ meets this week, the cartel is expected to stay with its plan to increase oil production by 400,000 barrels per day (bpd) each month and raise the target production level to 432,000 bpd after May 1. Several countries have requested OPEC+ countries to increase its oil production. While member countries have increased their production, they have produced less than their target. OPEC+ missed its target by 1.1 million bpd in February, according to the International Energy Agency.

Brazilian soybean crushers drop production, exports... Abiove, Brazil’s soybean crusher group, reduced its estimate of Brazil’s soybean crop to 125.3 MMT, down 10.5 MMT from its previous estimate. Soybean exports were reduced to 77.7 MMT. The group kept its crush projection at a record 48 MMT. Record soymeal exports of 18.3 MMT are expected in 2021-22. Soyoil exports are forecast at 1.7 MMT. The group predicts Brazil’s carryout stocks at 1.9 MMT, the lowest level in more than a decade.

France pledges to help Egypt with wheat supplies... France promised it would assist Egypt to cover its wheat needs over the next few months, French Finance Minister Bruno Le Maire said. France, the EU’s biggest wheat exporter, and Egypt, the top global wheat importer, have resolved quality issues and will be holding talks about price, including shipping costs. Egypt traditionally purchases a significant amount of wheat from the Black Sea region and is looking for new suppliers. France, which holds the rotating European Union presidency, has also floated an international food security plan, including measures like allowing grain stocks to be released.

Ukraine might restart wheat exports in April... In April, Ukraine’s government will likely discuss lifting wheat export restrictions, Taras Kachka, deputy economy minister, told Bloomberg News in a video interview Sunday. The decision will be based on how planting goes in the country and if production estimates would provide enough food security. The government has already lifted its export ban on corn and sunflower oil to help farmers get money for spring planting.

Ukraine limits nitrogen fertilizer exports... Ukraine’s government is limiting the amount of nitrogen fertilizer that can be exported to 70,000 MT per month from April to June. The total amount of exports is also limited to 210,000 MT, according to APK-Inform, a Black Sea consultancy. The quotas apply to exports of “mineral or chemical nitrogen fertilizers.”

South Africa increases corn crop, still below last year... South African farmers are expected to harvest 7.115 MMT of yellow corn, primarily used for livestock feed, and 7.570 MMT of white corn, used primarily for human consumption. The forecast for both types of corn by the government’s Crop Estimates Committee (CEC) is up from the previous estimate. However, it would still be a 10% reduction in total corn production compared to last year when the country produced 16.315 MMT.

Higher U.S., Europe sales increase WH Group 2021 profits... The largest pork company in the world, WH Group, increased revenue by 6.7% to $27.29 billion for 2021, according to its company filing. The company that owns Smithfield Foods in the U.S. reported a 1.3% rise in packaged meats sales, its core business, to 3.32 MMT in 2021. China’s sales volume dropped by 1.6% in a consumer market lacking growth momentum. The profit for its Chinese business fell 22.2% to $764.69 million due to lower hog and meat prices. It also said profits from frozen products and pork imports had dropped considerably. Hog prices in China plunged last year as farmers rebuilt herds after an African swine fever epidemic, but Covid-19 outbreaks dampened demand. The company predicts Chinese hog prices will remain low in the first half of 2022 before rising in the second half. Most analysts expect prices to stay low for the entire year.

Biden releases 2023 budget... President Joe Biden unveiled a $5.8 trillion budget. The 2023 budget calls for $1.598 trillion in so-called discretionary spending – areas that aren’t linked with mandatory programs like Social Security – with $813 billion for defense-related programs and $769 billion for domestic spending. It is a 5.7% increase from the omnibus spending bill for the 2022 fiscal year. Biden calls for more than $2.5 trillion in tax hikes on wealthy and large corporations over a decade, on top of the nearly $1.5 trillion of increases included in the House’s version of the Build Back Better plan. It would be the largest tax increase in history in dollar terms.

Japan to look at fuel, food relief package... Japan’s Prime Minister Fumio Kishida will order the government to put together a new relief package by the end of April to cushion the economic blow from rising fuel and food costs. His party’s ruling coalition partner Komeito presented Kishida with a proposal that called for expanding subsidies to industries hit by rising fuel costs, cutting the gasoline tax and steps to mitigate the impact of rising grain prices. Rising fuel and raw material prices have dealt an additional blow to Japan’s economy, which has lagged other countries in making a sustained recovery from the impact of the pandemic.