Evening Report | June 7, 2023

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Bigger ending stocks expected in Friday’s WASDE Report... USDA will likely raise its forecasts for old- and new-crop ending stocks for both corn and soybeans in the June World Agricultural Supply and Demand Estimates (WASDE) Report on Friday. We expect cuts to old-crop use, which will push up carryover and likely trickle down through the 2023-24 balance sheets. Changes to the new-crop wheat balance sheet will be largely driven by any adjustment to USDA’s winter wheat crop estimate, which is expected to increase slightly from last month. The following pre-report estimates are from Reuters; Bloomberg for cotton.

Russia, Ukraine say ammonia pipeline sustained damage... A pipeline used to transport ammonia fertilizer from Russia via Ukraine was damaged, according to both Kyiv and Moscow, potentially complicating talks around the Black Sea grain deal. Both sides blame the other for the damages.

Resumption of supplies via the Tolyatti-Odesa pipeline, the world’s longest ammonia pipeline, may be key to the extension of the Black Sea grain deal after mid-July. Moscow has said it will limit the number of ships allowed to travel to Ukraine’s Pivdennyi port near Odesa under the deal until the pipeline, which has been closed since the start of the war, is restarted – and for it to continue the deal past the current agreement date.

China’s meat imports modestly increase in May... China imported 596,000 MT of meat in May, according to preliminary data. That was up 0.7% from April and 0.5% from year-ago. China doesn’t break down meat imports by category in the preliminary data, but the increase was driven by pork imports, which have been on the rise since late last year. Through the first five months of this year, China imported 3.14 MMT of meat, up 10.2% from the same period last year.  

Stabenow: No new funding for farm bill... Senate Ag Chair Debbie Stabenow, (D-Mich.) said there will be no new funding for the new farm bill. This means any increase in funding for programs will require reallocating money from other parts of the bill. She expressed her disappointment at new savings from the debt ceiling bill not being allocated to the farm bill. Despite asking the House and Senate Budget Committee for even a few billion dollars, their requests were unmet.

Stabenow specifically warned the audience at the Nutrition Incentive Hub's National Convening Tuesday that they should not expect additional funding for the Gus Schumacher Nutrition Incentive Program, which aims to provide fresh produce to low-income individuals. She emphasized that a win in this scenario may look like preserving the current funding to maintain the program before moving forward.

Stabenow stressed she will not allow conservation funding from the Inflation Reduction Act to be redirected, highlighting the importance of addressing the climate crisis and mitigating risks faced by farmers.

Bipartisan group of lawmakers pushing for bill that would allow schools to serve whole and 2% milk... A bill was approved Tuesday by the House Education and Workforce Committee in a 26-13 vote. “We have seen students opt out of consuming milk altogether if they don’t have access to a variety that they enjoy,” Rep. Glenn “GT” Thompson (R.-Pa.), chair of the House Ag Committee, said during Tuesday’s debate. “Let’s face it: the only way to benefit from milk’s essential nutrients is to consume it.”

This proposal has been supported by more than 100 lawmakers and the dairy industry, who argue that children are more likely to drink milk if it has a better taste. However, opponents contend that children can receive the same nutrients from lower-fat milk without consuming increased saturated fat.

The bill, if passed, would reverse the rules implemented in 2012 that only permitted schools to serve nonfat or 1% milk for children over the age of two. Schools participating in USDA’s school meals program haven’t been permitted to serve either whole milk — which has 3.25% milk fat — or 2% milk, since 2012, when new rules went into effect. The debate involves the question of whether saturated fat from dairy products is different from saturated fat from other food sources. Researchers are still divided on this issue.

USDA approves Bayer’s short stature corn... USDA said approved a GM corn variety from Bayer designed to be shorter and better tolerate high winds. USDA determined the crop is not subject to regulation because it poses no greater pest risk than other types of corn. Bayer still needs approval from EPA and importing countries before it can launch the short stature corn in the United States.

U.S. farmers are already growing a separate, non-GMO version of short Bayer corn on about 30,000 acres this year as part of a large trial, according to the company. Bayer is also working on a third type of low-stature corn, developed using gene editing.