Evening Report | October 16, 2023

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Corn harvest nearing halfway mark... USDA reported corn harvest reached 45% done as of Sunday, three percentage points ahead of the five-year average but one point slower than traders expected. USDA reported 95% of the crop was mature, three points ahead of average for mid-October.

USDA’s final corn crop rating held at 53% “good” to “excellent,” though there was a one-point increase in the top category. The portion of crop rated “poor” to “very poor” held at 18%.

Soybean harvest advances more than expected... USDA reported 62% of the soybean crop was harvested, 10 points ahead of average and five points more advanced than traders expected. USDA said 97% of the crop was dropping leaves, four points ahead of average.

USDA’s final soybean crop rating increased one point to 52% “good” to “excellent.” The amount of crop rated “poor” to “very poor” held at 18%.

Cotton harvest one-third done... Cotton harvest advanced eight points over the past week to 33% done, which was one point more advanced than the five-year average. The Texas harvest stood at 37%, three points ahead of average. USDA reported 87% of the crop had bolls open, one point behind average.

USDA rated the crop 30% “good” to “excellent,” down two points from last week. The portion of crop rated “poor” to “very poor” increased two points to 43%.

Winter wheat planting on average pace... Winter wheat planting advanced 11 points over the past week to 68% complete, which was equal to the five-year average but one point slower than traders expected. Emergence stood at 39%, four points behind average.

Record NOPA soy crush in September... Members of the National Oilseed Processors Association (NOPA) crushed a record 165.5 million bu. of soybeans during September, up 2.5% from August and 4.6% above last year. Traders expected the September crush to total 161.7 million bushels.  

NOPA data implies a full September soybean crush of 175.0 million bu., which would be a record for the month and well above last year’s 167.6 million bushels.

Soyoil stocks totaled 1.108 billion lbs. at the end of September, down 142 million lbs. from August and 267 million lbs. less than last year, despite the stronger-than-expected crush figure.

Jim Jordan’s speakership prospects soar as former opponents rally behind him... In a surprising turn of events, the possibility of Jim Jordan (R-Ohio) becoming House speaker is now closer to reality, as several of his key opponents among House GOP members have reversed their positions and announced their support for him. Representatives Mike Rogers (R-Ala.), Ken Calvert (R-Calif.) and Ann Wagner (R-Mo.), who had previously been vocal opponents of Jordan, all revealed that conversations with him had changed their minds.

The shift in support from frontline members and Steve Scalise loyalists, while not entirely unexpected, underscores the trend of moderates and establishment figures aligning with the hard right within the House GOP Conference. A pressure campaign over the weekend from conservative media outlets, including Fox News host Sean Hannity, urged GOP members to rally behind Jordan.

Mike Rogers, Chair of the House Armed Services Committee, indicated he had received assurances from Jordan on critical issues such as the National Defense Authorization Act, the farm bill and government funding. Ken Calvert, a prominent appropriator, echoed similar sentiments.

Notably absent from discussions were details regarding Ukraine aid, which may face significant challenges under a potential Jordan speakership.

Bottom line: As the floor vote approaches, Jim Jordan appears to be in a stronger position than he did just days ago, with Kevin McCarthy (R-Calif.) expressing confidence in Jordan’s ability to secure victory. But not all members have shifted their stance, with Rep.  Steve Womack (R-Ark.) and Carlos Gimenez (R-Fla.) maintaining their support for alternative candidates.

Next step: The House Republican Conference is meeting tonight at 6:30 p.m. ET. Jordan has set the vote for noon ET on Tuesday, regardless of whether he has secured the backing of 217 Republicans by then.

Key GOP House members to monitor to see if they switch to Jordan:

• Jen Kiggans (R-Va.)
• Steve Womack (R-Ark.)
• Rep. Mario Diaz-Balart (R-Fla.)
• John Rutherford (R-Fla.)
• Carlos Gimenez (R-Fla.)
• Vern Buchanan (R-Fla.)
• Brian Fitzpatrick (R-Pa.)
• Don Bacon (R-Neb.)
• Mike Lawler (R-N.Y.)
• Dave Joyce (R-Ohio)
• Andrew Garbarino (R-N.Y.)
• Nick LaLota (R-N.Y.)
• Anthony D’Esposito (R-N.Y.) and
• Drew Ferguson (R-Ga.).

USDA has allocated more than $1.77 billion this year through CRP... Currently, over 667,000 participants in the Conservation Reserve Program (CRP) have received payments from USDA's Farm Service Agency (FSA) for their voluntary conservation initiatives covering more than 23 million acres of private land. The top five states receiving CRP participant payments:

1. Iowa - $402,508,900
2. Illinois - $172,723,800
3. Minnesota - $150,773,400
4. South Dakota - $129,545,200
5. Missouri - $99,849,600

 Since 2021, FSA has implemented several changes to the CRP program, including:

• Introducing a new climate-smart practice incentive for CRP general and continuous signups aimed at rewarding participants who implement conservation practices enhancing carbon sequestration and reducing greenhouse gas emissions.
• Enabling additional soil rental rate adjustments or rate flexibilities, including potential rate increases where warranted.
• Increasing payments for practice incentives from 20 percent to 50 percent, based on establishment cost, for continuous CRP practices.
• Raising payments for water quality practices rates from 10% to 20% for specific water quality-enhancing practices available through the CRP continuous signup, such as grassed waterways, riparian buffers, and filter strips.
• Establishing a Grassland CRP minimum rental rate benefiting over 1,000 counties with rates currently below the $13 minimum.

FSA has also enhanced the Conservation Reserve Enhancement Program (CREP) to make it more accessible to a broader range of agricultural producers and conservation partners.

In 2023, FSA enrolled 3.9 million acres in CRP, including 927,000 acres through General CRP, 2.3 million acres in Grassland CRP, and 694,000 acres in Continuous CRP.

U.S. prepares sanctions relief on Venezuelan oil... The Biden administration is preparing to offer sanctions relief on Venezuelan oil, contingent on President Nicolás Maduro’s commitment to conducting freer and fairer elections next year, with the inclusion of international monitors, according to a report from the Washington Post. This potential move marks a significant departure from the authoritarian governance that has characterized Maduro’s regime. Under the proposed agreement, the U.S. may retain the option to reimpose sanctions if President Maduro fails to follow through on his promises. The prospect of lifting sanctions on Venezuela’s oil industry holds substantial economic implications for the country. This pivotal accord is expected to be signed and officially announced soon, possibly as early as Tuesday.

Fed’s Harker: Likely done with rate hikes... The Federal Reserve should stop raising interest rates and hold them at current levels as long as it takes to ensure inflation is sustainably on a path back to its 2% target, Philadelphia Fed President Patrick Harker said. While Harker expects an extended pause for monetary policy, he said his “expectation is that rates will need to stay high for a while.” He noted such a stance on monetary policy would “allow us to achieve the soft landing that we all wish for our economy.”