Evening Report | March 6, 2024

Evening Report
Evening Report
(Pro Farmer)

Check our advice monitor on ProFarmer.com for updates to our marketing plan.

 

Please fill out our acreage survey... You should have received our annual spring acreage survey via e-mail last week. Please fill out the survey with your current planting intentions for this year. We’ll cover results and our acreage forecasts ahead of USDA’s March 28 Prospective Plantings Report. Click here to fill out the survey if you haven’t already responded. Please don’t take the survey more than once.


Fine-tuning expected in USDA’s March S&D Report... USDA is expected to make minor adjustments to its U.S. usage forecasts in Friday’s Supply & Demand Report, which would lead to slight changes to 2023-24 ending stocks. Analysts expect USDA to project U.S. ending stocks at 2.159 billion bu. for corn (down 13 million bu. from February), 319 million bu. for soybeans (up 4 million bu.), 657 million bu. for wheat (down 1 million bu.) and 2.72 million bales for cotton (down 80,000 bales). A greater focus will be USDA’s changes to South American crop forecasts, especially for Brazil, which will impact global ending stocks. The following estimates are from Reuters; Bloomberg for cotton:

Expectations for U.S. Carryover

Corn – billion bushels

 

 

2022-23

2023-24

Average est.

NA

2.159

Range

NA

2.075 – 2.250

USDA February

1.360

2.172

 

 

Soybeans – million bushels

 

 

2022-23

2023-24

Average est.

NA

319

Range

NA

295 – 350

USDA February

264

315

 

 

Wheat – million bushels

 

 

2022-23

2023-24

Average est.

NA

657

Range

NA

648 – 682

USDA February

570

658

 

 

Cotton – million bales

 

 

2022-23

2023-24

Average est.

NA

2.72

Range

NA

2.55 – 2.90

USDA February

4.25

2.80

 

 

 

Expectations for Global Carryover

Corn – MMT

 

2022-23

2023-24

Average est.

NA

320.39

Range

NA

317.00 – 322.06

USDA February

300.25

322.06

 

 

Soybeans – MMT

 

2022-23

2023-24

Average est.

NA

114.27

Range

NA

11.00 – 118.00

USDA February

103.57

116.03

 

 

Wheat – MMT

 

2022-23

2023-24

Average est.

NA

259.12

Range

NA

257.00 – 260.21

USDA February

271.21

259.44

 

 

Cotton – million bales

 

2022-23

2023-24

Average est.

NA

83.31

Range

NA

82.34 – 84.00

USDA February

82.97

83.70

 

Brazil’s February soybean exports surge, corn shipments slow... Brazil exported 6.610 MMT of soybeans during February, according to official government data. That was up 3.755 MMT (118%) from January and 1.593 MMT (31.8%) more than last year given the rapid soybean harvest.

Brazil’s corn shipments totaled 1.713 MMT during February, down 3.163 MMT (64.9%) from January and 561,000 MT (24.7%) from year-ago.

 

Cargill’s Brazil CEO says farmer bankruptcies are a concern... A recent wave of farmer bankruptcy filings in Brazil is a concern for the South American farming powerhouse, says Paulo Sousa, CEO of Cargill’s Brazilian unit. “There is a wave of bankruptcy filings, a legal novelty that brings a lot of concern to the sector,” Sousa said.

Brazilian exporters have become increasingly vocal about the problem. The rise in farmer bankruptcy cases, which affects delivery of committed grains, may also hamper exporters’ ability to complete export programs, grain exporter lobby Anec said last month.

 

Premature to expect interest rate cuts in near future... Continued progress on lowering inflation “is not assured,” though the Fed is still expects to reduce its benchmark interest rate later this year, Fed Chair Jerome Powell told the House Financial Services Committee.

“If the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year,” Powell said in prepared remarks. “But the economic outlook is uncertain, and ongoing progress toward our 2% inflation objective is not assured.”

He noted inflation had “eased substantially,” but remained reluctant to say when monetary policy might ease, repeating that officials still need “greater confidence” in a continued decline of inflation before they cut interest rates.

 

USDA set to update voluntary labeling rules for U.S. meat products... USDA is preparing to announce a regulatory update regarding the voluntary labeling of meat and poultry products originating from the United States. This update follows the completion of the Office of Management and Budget’s (OMB) review on March 5 of USDA’s final rule on this matter.

The final rule represents a slight departure from the proposed rule, which primarily addressed the voluntary labeling initiative known as the Product of USA labeling effort. During its review, OMB conducted three meetings with stakeholders, including The North American Meat Institute, representatives from the livestock industry in Mexico and Canada and the National Turkey Federation.

Significant concerns were raised during these meetings, particularly by the Mexican and Canadian representatives, who argued USDA’s proposed rule did not adhere to the Administrative Procedure Act and could conflict with U.S. customs practices, the U.S.-Mexico-Canada Agreement (USCMA) and international standards. They also criticized the rule for being based on flawed or questionable data. 

A key issue highlighted by the Canadian and Mexican representatives was the potential for the rule to lead to discrimination and segregation within the meat industry, potentially disrupting the integrated North American market. They expressed concerns the requirement for animals to be born, raised, slaughtered and processed in the U.S. could shift parts of the supply chain away from their countries.

Furthermore, they warned that such measures could trigger retaliatory actions, leveraging their successful challenge of U.S. mandatory Country of Origin Labeling (COOL) rules.

Notably, no groups supporting the USDA plan met with OMB during the review process.

Final details of the rule will be crucial, and there is significant apprehension within the U.S. industry about its implications. The ultimate impact could be substantial, especially if Mexico and Canada perceive the rule as contradicting U.S. commitments, potentially leading to retaliatory measures.

 

Meat groups express concerns over increased costs, potential litigation to new competition rule... While USDA’s new livestock and poultry market final rule aims to address discrimination and promote competition, critics argue it could lead to excessive regulation and higher consumer prices.

The National Chicken Council (NCC) criticizes the rule as part of the Biden administration’s regulatory agenda, questioning the need for additional regulations given stable consolidation rates in the poultry sector.

The North American Meat Institute (NAMI) also opposes the rule, viewing it as an overreach of federal authority and warning of increased meat prices for consumers.

However, the National Cattlemen’s Beef Association (NCBA) takes a softer stance, acknowledging some improvements in addressing concerns but urging USDA to focus on the rule’s intended objectives.

American Farm Bureau Federation President Zippy Duvall said, “AFBF appreciates Secretary Vilsack and USDA’s finalization of another rule that helps bring transparency and fairness for farmers and ranchers who raise livestock and poultry under contracts with companies. This rule provides additional clarity regarding retaliation and deceptive practices in business dealings. It is a welcome complement to USDA’s Transparency Disclosures for Contract Poultry Growers rule implemented in February. Farm Bureau will continue to work with USDA to ensure a level playing field for the farmers and ranchers who keep America’s kitchens stocked.”

The final rule was published today in the Federal Register and will take effect after 60 days.

 

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