Evening Report: March 15, 2022
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Russia/Ukraine update... Russia stepped up its bombardment of Kyiv on Tuesday. Russia said its forces had taken complete control of the southern region of Kherson. Ukraine reported more airstrikes on an airport in the west.
Ukrainian and Russian officials resumed talks via video link, which Ukrainian negotiators said focused on ceasefires and troop withdrawals. Russia is also circulating a proposed U.N. Security Council resolution proposing a ceasefire to evacuate civilians and create safe passage for humanitarian aid. Ukrainian President Volodymyr Zelenskyy said Ukraine might seek security guarantees short of NATO membership.
In a show of solidarity with Ukraine, prime ministers of the Czech Republic, Poland and Slovenia headed to Kyiv by train. Turkey's foreign minister traveled to Moscow to press for a ceasefire. President NATO leaders will discuss the war in Ukraine at a special summit in Brussels on March 24, the alliance's Secretary-General Jens Stoltenberg said. U.S. President Joe Biden will attend.
Russia attacks Ukraine’s agriculture infrastructure... Russia’s military has destroyed a warehouse and damaged agriculture equipment, Bloomberg reported. A major poultry producer explained $8.5 million worth of frozen chickens was destroyed due to a fire in the nation’s largest frozen-food store caused by shelling near Kyiv. Another 8,500 tons of poultry, worth more than $20 million, is at risk in the southern region because employees can’t get to the location due to damaged roads and railways. Ukrainian defense ministry reported 30 machines were destroyed on Sunday by bombs. Troops are stealing agricultural equipment to either tow military equipment or build fortifications.
Russian poultry producers request supply export ban... The National Union of Poultry Producers of Russia has asked the Ministry of Agriculture for a complete export ban on feed and other supplies. The group is requesting feed grains, including sunflower and soybean meals, premixes, amino acids and vitamin exports to be stopped. In addition, they are also asking for poultry equipment and parts and veterinary supplies exports to be halted.
NOPA soybean crush drops in February... Members of the National Oilseed Processors Association (NOPA) crushed 165.1 million bu. in February, down 17.2 million bu. from January. The February crush was expected to be 165.0 million bu., according to a Reuters survey. The difference in monthly crush numbers is because February is a shorter month. The NOPA soybean oil stocks totaled 2.059 billion pounds and up 33 million pounds from January. Traders expected soyoil stocks to decline to 1.985 billion pounds.
Producer prices continue to rise... February’s Producer Price Index (PPI) rose 0.8% from January and was up 10.0% from a year ago, according to the Bureau of Labor Statistics. Economists had predicted a 0.9% monthly increase and a 10% yearly increase. Overall goods prices jumped 2.4%, the largest increase since December 2009. Two-thirds of the monthly goods increase was due to the 8.2% increase in energy prices. Food increased 1.9% from the previous month.
India to announce measures to increase wheat exports... India’s government is expected to announce several actions in the coming weeks to help it replace global wheat supplies, according to government sources Reuters reported. The government plans to increase the number of labs testing wheat for export, make more railcars available to transport wheat and have port authorities prioritize wheat exports. The measures are an effort to gain market share and support India’s farmers. India is the second-largest wheat producer and has excess wheat supplies. Government officials think the country could export 10 million metric tons (MMT) of wheat in their new season that starts in April. Last year, India exported 6.12 MMT and 1.12 MMT the year before.
Coceral raises Europe’s soft wheat and corn production forecasts... Grain trade association Coceral raised this year’s soft wheat and corn and lowered the rapeseed production estimates for the European Union and Britain. The group estimates the 2022 soft wheat harvest in the EU plus Britain at 141.3 million metric tons (MMT), up from an initial 139.8 MMT estimated in December but still below the 2021 production of 143.2 MMT. Corn production for the region was increased to 67.3 MMT, up from 66.4 MMT in December and 67.2 MMT last year. The rapeseed production estimate was cut to 19.3 MMT from 20.0 MMT in December and 18.5 MMT last year.
Shipping industry watches for possible rail strike... Shippers are watching to see if Canadian Pacific (CP) rail workers will strike this week. The workers have threatened to strike Canada’s second-largest railway. However, they have not given the required 72-hour notice. The company is considering a lockout but has not provided the 72-hour notice. Company officials say the railway cannot operate without the workers. The last major Canadian rail stoppage happened in 2019. It lasted eight days. But took weeks for shippers to recover. Industry groups have requested the U.S. and Canadian governments to avert a strike. The Canadian government is monitoring the situation and can order workers back to work.
USTR: U.S.-South Korea trade deal needs implementation improvements... U.S. Trade Representative Katherine Tai said that the implementation of the U.S. Korea Free Trade Agreement (KORUS) needs to be improved to increase U.S. agricultural exports in Korea. One area for improvement is to create a regulatory environment that facilitates access to agricultural biotechnology. In the first ten years of the trade deal, U.S. agricultural imports increased 35% to $9.4 billion in 2021. South Korea is now the top export market for U.S. beef. Tai said there is still room to grow U.S. agriculture products in the Korean market.
India switches fertilizer sources... To offset potash imports from Russia, India will import 2.1 million metric tons (MMT) of potash from Canada, Israel and Jordan, according to industry sources. The country uses 4 to 5 MMT of potash fertilizer, with a third of it from Russia and Belarus. India has relied on Russia and Belarus for complex fertilizers. Indian companies have also been increasing nitrogen, phosphate and potash supplies from Saudi Arabia and Morocco. The country says it has a “comfortable” opening supply of fertilizer. India has typically used deals with Russia and Belarus to set prices. However, since an agreement was not signed before the Russian invasion, Canada has become the price setter for this year.
Bank of England expected to continue rate hikes... The Bank of England is expected to add another 25 basis points to its interest rate on Thursday, taking it to 0.75% - its pre-pandemic level - according to a Reuters poll. It would be the third consecutive rate increase. The Bank of England was the first major central bank to raise interest rates since the pandemic began two years ago. Economists predict the bank will raise interest rates 25 basis points in the next quarter and the third quarter.
Lender wants to increase African crop production... The African Development Bank is raising money for a $1 billion plan to increase wheat, rice and soybean production on the continent to rely on fewer food imports, Bloomberg reported. Transportation infrastructure and finance system improvements are also being looked at to save money and improve trade around Africa.
