Evening Report | October 23, 2023

Evening Report
Evening Report
(Pro Farmer)

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Corn harvest in line with expectations... Corn harvest advanced 14 percentage points to 59% done as of Sunday, equal to traders’ expectations and five points ahead of the five-year average. Across the Corn Belt, harvest stood at 70% in Illinois (67% average), 42% in Indiana (54%), 62% in Iowa (47%), 82% in Kansas (76%), 24% in Michigan (30%), 62% in Minnesota (49%), 75% in Missouri (73%), 62% in Nebraska (51%), 45% in North Dakota (38%), 20% in Ohio (36%), 48% in South Dakota (46%) and 24% in Wisconsin (28%).

 

Soybean harvest passes three-quarters done... USDA reported soybean harvest advanced 14 points to 76% complete, nine points ahead of average. Traders expected harvest to be 77% done. Across the Corn Belt, harvest stood at 80% in Illinois (71%), 65% in Indiana (67%), 87% in Iowa (71%), 71% in Kansas (50%), 43% in Michigan (53%), 88% in Minnesota (80%), 61% in Missouri (42%), 83% in Nebraska (79%), 85% in North Dakota (70%), 64% in Ohio (64%), 90% in South Dakota (74%) and 69% in Wisconsin (60%).

 

Cotton harvest a little ahead of average... USDA reported cotton harvest reached 41%, two points ahead of average. Harvest was 50% done in Texas, one point ahead of average. USDA reported 90% of the crop had bolls opening, one point behind average.

USDA rated 29% of the cotton crop as “good” to “excellent,” down one point from last week. The portion of crop rated “poor” to “very poor” held at 43%, though there was a one-point increase in the bottom category.

 

Winter wheat planting passes three-quarters mark... USDA reported 77% of the U.S. winter wheat crop was seeded as of Sunday, one point behind average and two points less than traders expected. Planting stood at 68% in Texas (69% average), 71% in Oklahoma (75%) and 85% in Kansas (79%).

Winter wheat emergence stood at 53%, equal to the five-year average for the third week of October.

 

Ukraine grain production forecast cut but exports increased... Agriculture consultancy APK-Inform cut its 2023 Ukraine grain harvest forecast to 53.4 MMT, down 800,000 MT from its previous outlook, amid a smaller corn crop estimate. Despite the smaller production forecast, APK-Inform raised its 2023-24 grain export estimate to 34.7 MMT, including 19 MMT of corn and 13 MMT of wheat.

 

Ukraine hopes to offset Black Sea grain deal with new corridor... The Ukrainian Agrarian Council (UAC) says a new Black Sea corridor could enable exports of up to 2.5 MMT of ag products per month, almost offsetting the impact of Russia’s decision to quit the UN-brokered Black Sea grain deal. The Black Sea export routes are still not fully operational and the current export figures are lower than last year, said Denys Marchuk, deputy head of UAC. “But this is not critical as we are developing an alternative route and the last month has shown that we can export by the Black Sea without Russia’s participation,” Marchuk said. “I hope that exports by the new corridor will amount to 2 MMT to 2.5 MMT per month and then together with other routes grain exports may reach 5 MMT to 5.5 MMT a month,” he said.

 

Disagreements over farm bill funding priorities stall progress amid budgetary cuts proposals... House Ag Chair Glenn “GT” Thompson’s (R-Pa.) proposal to offset farm bill priorities, including crop subsidies, with $50 billion in cuts, primarily from climate change and public nutrition programs, was swiftly rejected, highlighting ongoing disputes surrounding the farm bill. A growing number of lawmakers are signaling the need for a one-year extension of the 2018 Farm Bill as a potential solution.

Rep. David Scott (D-Ga.) shared the $50 billion list with Democratic members of the House Ag Committee last week. Politico reported (link) some Democrats were unhappy with Scott’s negotiating strategy. It also quoted Thompson as saying he was aware that “whatever I identify on this list, we’re not going to be able to get all of that or maybe even much of it.”

As noted frequently, the primary point of contention is higher reference prices, with potential costs running into the tens of billions. With no new funding available, any new initiatives must be balanced within the farm bill. Senate Ag Chairwoman Debbie Stabenow (D-Mich.) has firmly opposed cuts to SNAP (Supplemental Nutrition Assistance Program/food stamps) and the redirection of the $20 billion allocated to USDA conservation programs by the 2022 IRA/Climate Bill).

Thompson’s proposal also involved diverting the $20 billion to finance higher reference prices and preventing updates to the Thrifty Food Plan. Farm groups are prioritizing higher reference prices to facilitate subsidy payments to crop growers, while some Republicans view the $20 billion for climate mitigation as available for other purposes.

Of note: Politico today reports every Democrat on the House Ag Committee signed a letter demanding Thompson and Scott reject cuts to the Inflation Reduction Act via the farm bill.

 

Vilsack to hold press call Tuesday announcing significant support for American producers... USDA Secretary Tom Vilsack will host a press call Tuesday, where he will announce “a significant investment” to support American farmers through new funding opportunities “to help maintain and develop markets for their commodities and contribute to global food security efforts through bolstering international food aid.”

 

St. Lawrence Seaway workers strike... Workers at the St. Lawrence Seaway have gone on strike, leading to an immediate disruption in cargo shipments along the waterway connecting Montreal and Lake Erie. The strike follows unsuccessful negotiations between the union and the employer, particularly on the issue of wages. The St. Lawrence Seaway Management Corporation (SLSMC) cited the impasse, with the union seeking wage increases and inspiration from automotive industry negotiations. The halt in operations is expected to impact the North American economy and supply chain, particularly the movement of essential commodities like grain. SLSMC has applied to the Canada Industrial Relations Board for an order related to the movement of grain during the strike. Over 100 vessels outside the system are affected by the situation, while negotiations, which began in June, remain at a standstill. The strike comes after nearly $16.7 billion worth of cargo, including grain and iron ore, transited through the seaway last year.

 

UAW expands strike with walk out at Stellantis plant... The United Auto Workers (UAW) initiated a walkout at Stellantis’ Sterling Heights, Michigan, Assembly Plant, intensifying the Stand Up strike that has been ongoing for nearly six weeks. This action involves around 6,800 workers and has brought the total number of striking UAW workers across the nation to almost 40,000. The strike, which started on Sept. 15, has led to layoffs and an estimated loss of $9.9 billion in the auto industry. The union’s discontent centers on key issues such as wage progression, temporary worker pay and cost-of-living adjustments. Negotiations between Stellantis and the UAW continue, with both parties expressing their desire to resolve issues promptly.

 

Global olive oil prices surge... Olive oil prices have skyrocketed, more than doubling over the past year, creating challenges for American consumers and businesses alike, a New York Times story highlights. Factors such as drought in Spain and unfavorable weather conditions in Italy, Greece and Portugal have severely impacted olive oil production. The U.S., primarily importing from Spain and Italy, faces the consequences of these global disruptions, resulting in significantly higher prices for consumers. A roughly 25-ounce bottle of extra virgin olive oil has seen a nearly 22% price increase in just a year. Although some businesses have explored alternative sources in the Southern Hemisphere, the overall impact of Mediterranean shortages remains a significant concern, with consumers potentially having to bear the burden of these rising costs.

 

 

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