Evening Report: Jan. 27, 2022

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Russia/Ukraine diplomatic talks to continue... After meeting in Paris on Wednesday, Ukrainian, Russian, German and French diplomats agreed more talks should be held in Berlin in two weeks. That means Russia was likely to remain on a diplomatic track for at least two weeks, Ukraine’s Foreign Minister Dmytro Kuleba said.  Russia said it needed time to review the U.S. and NATO’s written response to its demands, but that it appears clear the U.S. was not willing to address its main security concerns in the standoff with Ukraine. However, the Kremlin is keeping the door open to further dialogue. China told the U.S. that it wants everyone involved in the Ukraine to remain calm. 

The Ukrainian government wants to borrow $5 billion from international organizations as the Russian attack threat limited capital markets access.


Most Ukraine ports resume grain loading... Black Sea ports of Odessa, Chornomorsk, Mykolayiv, Pivdeny, and Olvia have restarted loading grain after shutting down due to weather earlier this week, according to the state seaport authority. Loading restrictions remain for the ports of Kherson and Reni.


U.S winter wheat drought area unchanged... The amount of U.S. winter wheat considered in drought conditions remained steady at 68% for the week ended Jan. 25, according to the U.S. Drought Monitor. USDA labeled winter wheat drought as 25% “moderate,” 23% “severe,” 18% “extreme” and 2% “exceptional.”  Last week, USDA said winter wheat drought was 27% “moderate,” 22% “severe,” 17% “extreme” and 2% “exceptional.”

Abnormally dry/drought conditions increased nine percentage points to 91% in Nebraska, five points to 86% in Kansas and one point to 96% in Oklahoma. Dryness/drought conditions were unchanged in Texas (96%), Montana (92%), Colorado (100%), and South Dakota (78%).

There was some improvement in abnormally dry/drought conditions in the SRW areas. North Carolina had a 23-point decline to 60% of its area considered abnormally dry/drought. Missouri has 40% of its area considered abnormally dry/drought, up two percentage points from the previous week. Illinois had a 10-point increase in the area considered abnormally dry/drought to 26%. Michigan, Indiana, Ohio and Arkansas had the same percentage of areas considered abnormally dry/drought as the previous week.


2021 GDP highest since 1984... Fourth-quarter U.S. Gross Domestic Product (GDP) growth of 6.9% pushed 2021 GDP growth to 5.7% for the year, the highest since 1984, according to the Commerce Department’s advance GDP estimate on Thursday. Third-quarter GDP growth increased 2.3%.  Economists had predicted before the report that 2021 GDP growth would be 5.5%.


U.S. jobless claims trend down... For the first time in four weeks, initial unemployment claims dropped, falling 30,000 from the previous week to 260,000 for the week ended Jan. 22. The Labor Department revised the earlier claims by 4,000 to 290,000. The four-week moving average for unemployment claims was 247,000, an increase of 15,000 from the previous week’s revised average of 231,000.



Parana trims soybean production forecast... Parana’s crop forecasting department Deral reduced the state’s soybean production estimate to 12.83 MMT, down 270,000 MT from its forecast earlier this month. The department estimated the soybean crop at 13.1 MMT after it conducted an emergency assessment after Jan. 1. In late December, the department had projected the state’s soybean production 18.4 MMT.

However, Deral raised its estimate for Parana’s first corn crop to 2.73 MMT, up 330,000 MT from its previous forecast. The safrinha corn crop was forecast to be 15.2 MMT for the state.


Avian flu reported in Virginia...  Virginia’s state veterinarian has advised that five wild birds, waterfowl taken by hunters in central and eastern Virginia, tested positive for highly pathogenic avian influenza (HPAI), according to a Delmarva Chicken Association member update.

The birds were hunted on Jan. 8 in Henrico and Surry counties. There have not been any trade interruptions. No cases have been found in backyard flocks or commercial poultry operations. This report follows avian flu found in North and South Carolina wild birds.


EU raises wheat import, corn export forecasts... The European Commission increased its forecast for European soft wheat imports by 500,000 MT to 2.0 MMT in its monthly supply and demand report. That increase along with a 100,000-MT cut to the crop means total wheat ending stocks are forecast to rise to 13.3 MMT for 2021-22, up 400,000 MT from the December estimate, and a four-year high.

The Commission raised EU corn exports to 5.0 MMT, up 1.3 MMT from December. Usable production was reduced to 69.0 MMT, down 400,000 from the December estimate. Total corn ending stocks were cut to 17.3 MMT.

The commission reduced rapeseed imports to 4.9 MMT, down 400,000 MT from December. However, ending stocks were unchanged at 500,000 MT as domestic use was lowered by the same amount.


USDA to extend Pandemic Cover Crop Program... USDA’s Risk Management Agency (RMA) forwarded a final rule on the Pandemic Cover Crop Program (PCCP) to the Office of Management and Budget (OMB). The move signals the program might become a permanent crop insurance option for producers.

USDA launched the effort in 2021 and indicated 12.1 million acres were covered in 2021. It was only authorized under the December Covid aid package. Farmers had to report cover crops to the FSA by June 15, 2021, to get a $5 per acre crop insurance premium reduction.


Indonesia mandates domestic palm oil sales... Starting today, all cooking oil exporters in Indonesia will be required to sell 20% of their planned exports to the domestic market at a maximum price of 9,300 rupiah ($0.6465) per kg for crude palm oil and 10,300 rupiah per kg for olein, according to Indonesia’s Trade Ministry.  Also, palm oil exporters must get an export permit after companies declare their domestic distribution plan for six months.


Argentina faces IMF repayment... Argentina has a Friday deadline to repay $730 million to the International Monetary Fund (IMF), with another $365 million repayment due next Tuesday. Argentine officials have not confirmed plans to make the repayments. The country has been discussing repayment plans with the IMF as it has been battling currency and debt crises for years. Hundreds of people have been protesting in Buenos Aires against IMF. They blame IMF for the austerity measures that worsened the country’s economy in 2001-02.

 

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