Evening Report | November 13, 2023

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Winter wheat conditions decline... USDA rated 47% of the U.S. winter wheat crop as “good” to “excellent,” down three percentage points from the previous week. Traders expected no change in condition. The amount of crop rated “poor” to “very poor” held at 17%, though there was a one-point increase in the bottom category.

USDA reported winter wheat planting was 93% done (equal to the five-year average), while emergence stood at 81% (80% on average).

Corn, soybean harvest remains ahead of average... USDA reported corn harvest was 88% complete, two points ahead of average. Soybean harvest advanced to 95% done, four points ahead of average.

Aside from Illinois, corn harvest was running behind average across the eastern Corn Belt. Of the top 18 production states, soybean harvest was behind normal only in Michigan (83% vs. 84%) and Wisconsin (89% vs. 90%).

Cotton harvest two-thirds done... USDA reported cotton harvest at 67% complete, four points ahead of average. Harvest stood at 56% in Texas (55% average) and 57% in Georgia (63%).

Iowa, South Dakota report additional HPAI cases... Iowa reported four additional cases of highly pathogenic avian influenza (HPAI), with one case occurring in a commercial layer flock in Taylor County, and the other three outbreaks affecting backyard flocks in Jones and Cerro Gordo counties and a game bird flock in Kossuth County.

Meanwhile, USDA confirmed two more cases of HPAI in South Dakota, both in commercial turkey operations — one with 58,400 birds in McPherson County and the other with 51,200 birds in Roberts County.

Tyson reports decline in Q4 sales... Tyson Foods Inc. reported a decline in sales for the fourth quarter and fiscal year 2023, with lower chicken and pork prices and reduced demand for beef. The company’s operating income loss in Q4 decreased by 160% to $463 million, while sales for the quarter dropped 2.9% to $13.35 billion. Tyson’s beef segment operating income also declined, with a $323 million loss in Q4, despite a 10.2% increase in average beef prices. The company anticipates an adjusted operating income loss between $400 million and breakeven for fiscal year 2024 in the beef segment.

Paraguayan beef decision raises FMD concerns for NCBA, limited impact expected on U.S. imports... USDA’s decision to reopen the U.S. market to specific Paraguayan beef has raised concerns from the National Cattlemen’s Beef Association (NCBA) about the potential for Foot and Mouth Disease (FMD) to enter the United States. Despite the criticism, trade experts believe there will be minimal effects on U.S. beef imports from Paraguay because the country must compete with others for a reduced tariff on their exports to America.

China’s buying patterns changing commodity demand... Over the past few decades, as China’s wealth has increased, its appetite for foreign produce has grown substantially. The country now imports more than $200 billion worth of food annually, surpassing all other nations. This figure is a significant increase from around $15 billion two decades ago, as reported by the World Trade Organization. This shift in demand from China is prompting farmers around the world to adapt and capitalize on the changing landscape of global agriculture. An article in the Wall Street Journal explores how farmers are adjusting to meet China’s evolving tastes and increasing demand for imported agricultural products.

Mosaic predicts fertilizer stockpiles will need to be replenished next year... Fertilizer supplier Mosaic Co. anticipates a significant increase in global shipments of potash, a crucial crop nutrient, with an expected rise of 5 MMT, reaching a total of 70 MMT next year. This would mark the highest volume since at least 2021, prior to Russia’s invasion of Ukraine.

Mosaic notes that excess inventories in Brazil, a major agricultural player, have been fully depleted, setting the stage for stronger sales and profits into 2024. Mosaic reported its shipments of potash and phosphate to meet the demand from North American farmers during the spring planting season were the highest in five years.

Copper price slump challenges renewable energy transition... The prolonged decline in copper prices presents a significant challenge to the global shift towards renewable energy sources. Meeting the demand for copper required for the transition to renewables will necessitate large-scale mining operations over the coming years. However, the current slump in demand has led to low copper prices, which in turn discourage investment in the development of new copper supplies. This poses a dilemma for the renewable energy sector and highlights the need for balancing supply and demand dynamics in the copper market to support sustainable energy transitions.