Evening Report: March 21, 2022
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Russia/Ukraine update... Russia’s war in Ukraine continues and shows no signs of abating. The Russian military plans to continue using state-of-the-art hypersonic Kinzhal missiles on Ukrainian targets. Experts say Russian forces are stalled. Ukrainian officials say there are no discussions of surrender. Russian and Ukrainian officials have held a series of talks, but no substantive solution to the conflict has emerged from that dialogue. Ukrainian President Volodymyr Zelenskyy said he would be prepared to meet personally with Russian President Vladimir Putin. However, a Russian spokesman said more progress would need to be made before a meeting of the two leaders.
The Russian Foreign Ministry summoned the U.S. ambassador and said relations with the U.S. are “on the verge of a breach.” U.S. President Joe Biden was scheduled to discuss the war with European leaders on Monday. Biden will be traveling to Europe to meet with NATO leaders later this week.
EU can’t agree on Russian oil embargo... The foreign ministers of the EU could not reach an agreement to ban Russian oil imports. Several countries, including Germany, Poland, Denmark and the Netherlands said Russian oil was untouchable. Germany explained some of the EU member countries were too dependent on Russian oil. However, EU diplomats warned that a Russian chemical weapon attack or the heavy bombing of Kyiv could start a Russian energy embargo.
Ukraine resumes limited corn exports... Ukraine has restarted corn exports via rail through the western part of the country, said Roman Slastyon, general director of the Ukrainian Agribusiness Club. He reported shipping via rail could handle 600,000 metric tons of grain per month, about 10% to 15% of port shipping capacity. Reuters reports that all Ukrainian ports on the Black Sea and Azov Sea remain closed. The association noted the exports could provide money for fuel, fertilizer, seeds and salaries for spring planting. Ukraine has around 20 million metric tons (MMT) of wheat and corn still to export from the 2021-22 season, which ends in June.
Argentina raises soybean oil and meal export tax, resumes exports... The Argentine government increased the export tax for soybean oil and meal two points from 31% to 33%. It also re-opened exports of the commodities. A week ago, the government halted soybean oil and meal exports. The country's chamber of grains exporters and processors CIARA-CEC has strongly criticized the tax hike, saying it threatens the industry and is “analyzing all legal avenues” to take against the measure.
India exploring wheat exports to several countries... India is in discussions about shipping wheat to Egypt, China, Turkey, Bosnia, Sudan, Nigeria and Iran, according to India’s commerce ministry. The talks with Egypt, the largest global wheat purchaser, are entering the final stages. India, the second-largest wheat producer, expects to produce 111.3 MMT in 2021-22, up 1.7 MMT from the previous year.
Brazil’s soybean harvest remains ahead of last year... As of late last week, 69% of Brazil’s soybeans were harvested, up five percentage points from the previous week and 10 points ahead of last year at this time, according to ag consultancy AgRural. Fieldwork is virtually done in Mato Grosso and Mato Grosso do Sul. Rains slowed harvest in Parana. Some farmers reported higher than average grain moisture. However, there have been no discussions about quality issues.
China starts the year buying more Brazilian, less U.S. soybeans... China’s soybean imports from Brazil for January and February increased to 3.5 million metric tons (MMT), up 2.5 MMT from the previous year, according to China’s General Administration of Customs. For the same period, China imported 10.0 MMT of soybeans from the U.S., down 1.9 MMT from 2021. In 2021, China increased U.S. soybean purchases due to the trade deal signed in 2020. Brazil’s soybean exports to China were delayed due to a later-than-expected harvest.
Powell: More aggressive inflation policy possible... Federal Reserve Chair Jerome Powell said interest rates could be raised faster than currently expected if needed. He noted if the Fed needs to raise interest rates by more than 25 basis points at a meeting, it will do it. The central bank could also “tighten beyond common measures and into a more restrictive stance.” Powell said the bank might reduce its balance sheet at its May meeting. However, he noted the decision had not been made yet. Overall, he pointed out that the economy was “very strong” and could handle higher interest rates.
Iowa reports more avian flu cases... USDA and Iowa Department of Agriculture recently confirmed two more cases of highly pathogenic avian influenza (HPAI). One case, in a commercial layer chicken flock in Buena Vista County, Iowa, was announced late on Friday, March 18. The other one in a non-commercial backyard flock in Warren County, Iowa, was announced over the weekend. It is the first case in Warren County and the second case in Buena Vista County. Officials quarantined the affected premises, and birds on the property were depopulated to prevent the spread of the disease. Birds from the flock will not enter the food system.
EU to consider measures to help farmers... The European Commission will propose the first-time use of a $551 million agricultural crisis fund to help farmers cushion the impact of the Russian invasion of Ukraine. An EU official explained it would help ensure food security for the bloc. The EU is also working to allow farmers to plant protein crops on fallow land to provide feed for the pork industry, according to EU Agriculture Commissioner Janusz Wojciechowski. The European Commission is also considering delaying two new proposals – binding targets to restore nature and a more sustainable pesticides law – which is scheduled to be released on Wednesday.
