Evening Report | March 26, 2024
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Key planting intentions, grain stocks data coming Thursday... USDA will release its Prospective Plantings and Quarterly Grain Stocks Reports on Thursday, highlighting farmer planting intentions for the upcoming growing season and March 1 stocks. Much of the pre-report attention is on planting intentions, but quarterly stocks have proven to be strongly market-moving, especially for corn. The following pre-report estimates are from a Reuters survey.
Expectations for Prospective Plantings Report |
|
Corn – million acres |
|
Average est. |
91.776 |
Range |
90.000 – 93.472 |
Pro Farmer/Doane survey |
91.750 |
USDA final 2023 |
94.641 |
|
|
Soybeans – million acres |
|
Average est. |
86.530 |
Range |
85.350 – 88.000 |
Pro Farmer/Doane survey |
86.750 |
USDA final 2023 |
83.600 |
|
|
All wheat – million acres |
|
Average est. |
47.330 |
Range |
46.200 – 49.982 |
Pro Farmer/Doane survey |
47.100 |
USDA final 2023 |
49.575 |
|
|
Winter wheat – million acres |
|
Average est. |
34.870 |
Range |
34.000 – 38.370 |
Pro Farmer/Doane survey |
34.425 |
USDA final 2023 |
39.699 |
|
|
Other spring wheat – million acres |
|
Average est. |
10.891 |
Range |
10.100 – 11.320 |
Pro Farmer/Doane survey |
10.900 |
USDA final 2023 |
11.200 |
|
|
Durum wheat – million acres |
|
Average est. |
1.652 |
Range |
1.133 – 1.800 |
Pro Farmer/Doane survey |
1.775 |
USDA final 2023 |
1.676 |
|
|
Cotton – million acres |
|
Average est. |
10.906 |
Range |
10.241 – 11.300 |
Pro Farmer/Doane survey |
10.500 |
USDA final 2023 |
10.230 |
|
|
Expectations for Quarterly Grain Stocks Report |
|
Corn – billion bu. |
|
Average est. for March 1, 2024 |
8.427 |
Range |
8.129 – 8.568 |
USDA March 1, 2023 |
7.396 |
USDA Dec. 1, 2023 |
12.169 |
|
|
Soybeans – billion bu. |
|
Average est. for March 1, 2024 |
1.828 |
Range |
1.740 – 1.986 |
USDA March 1, 2023 |
1.687 |
USDA Dec. 1, 2023 |
3.000 |
|
|
Wheat – billion bu. |
|
Average est. for March 1, 2024 |
1.044 |
Range |
0.997 – 1.080 |
USDA March 1, 2023 |
0.941 |
USDA Dec. 1, 2023 |
1.410 |
Dairy industry urges against trade actions for HPAI detection... A group of dairy trade organizations released a joint statement on the highly pathogenic avian influenza (HPAI) outbreak in dairy cattle in Texas and Kansas we reported on Monday, urging U.S. trading partners to avoid placing bans on American dairy products in response. The International Dairy Foods Association, the National Milk Producers Federation, the U.S. Dairy Export Council and Dairy Management Inc. were among the groups that signed onto the statement. “It is essential that trading partners do not impose bans or restrictions on the international trade of dairy commodities in response to these and future notifications and rely on the science-based food safety steps taken in U.S. dairy processing, namely pasteurization, in preserving market access,” the groups said.
Russian wheat crop raised even amid increased risks... SovEcon raised its Russian wheat crop forecast by 400,000 metric tons (MT) to 94 MMT, which would be up 1.2 MMT from last year’s production. While weather was favorable through winter amid mild temps and plentiful moisture, the Black Sea consultant noted crop conditions have deteriorated the past two weeks amid a lack of precipitation. Since mid-March, the South region received 40% to 60% of normal precip, while it was only 20% to 40% of average in the Central and Volga regions.
Former Chinese trade negotiator condemns U.S. for ‘dismantling the system’ of global trade... In a trade environment where protectionism and supply-chain decoupling have left them with little other recourse, Chinese companies are finding themselves compelled to move production to Mexico, and any additional containment efforts by Washington would hit Americans in their wallets, according to a former high-ranking Chinese trade official. The South China Morning Post reported Long Yongtu told the Boao Forum for Asia that “globalized economic and trade systems are at stake.” Long said, “These Chinese companies could have continued to make goods in China for America at reasonable prices, but now they have to bear the extra costs of migrating to Mexico, and U.S. consumers are grappling with more expensive goods.”
He was the former vice-minister of foreign trade, and China’s point man during its 15-year talks to join the World Trade Organization more than two decades ago. Long made headlines in 2019 for his fervent support of Donald Trump’s re-election when he was U.S. president.
New grain/fertilizer port terminal to be built at Brazil’s Santos port... Brazilian rail operator Rumo has signed an agreement with Embraport to build a port terminal handling grains and fertilizers at the Santos port in Sao Paulo, Brazil. Rumo said the terminal will be able to move up to 9 MMT in grains and 3.5 MMT of fertilizer a year.
Construction is subject to the fulfillment of certain conditions, Rumo said, like licensing and legal and regulatory approvals. After these conditions are met, construction should take 30 months.
U.S. sugar group pushing for restrictions on Mexico imports... The American Sugar Coalition is pushing for restrictions on sugar imports from Mexico following concerns that some shipments may violate trade deal rules, Bloomberg reports. The coalition seeks a 44% reduction in Mexico’s sugar exports to the U.S., effective from April 1, due to concerns about exceeding export limits and potential violations of trade regulations. Mexican sugar production has declined, yet exports to the U.S. have continued, prompting the U.S. Department of Commerce to investigate possible breaches of trade rules.
The coalition’s counsel emphasized the need for consultations with Mexico to ensure compliance with regulations. Reducing Mexico’s export limit could strain global sugar supplies, leading to increased demand for imports from other countries.
The U.S. sugar industry, facing tight regulations on overseas imports, aims to protect domestic profits and prevent market flooding by other nations. The proposed reduction in Mexico's export cap aims to address production shortages caused by dry weather, ensuring sufficient supply for domestic consumption and meeting U.S. quotas.
The coalition previously raised concerns about inconsistent data and urged action to enforce trade agreement rules. The Mexican government has denied violating trade agreement terms, but responses from relevant agencies were not obtained. The American Sugar Coalition includes the American Sugar Cane League, the American Sugarbeet Growers Association, American Sugar Refining Inc. and the Florida Sugar Cane League.
Shipping industry faces fuel dilemma decision in bid to cut emissions... The shipping industry is under increasing pressure to decarbonize, but unclear regulatory guidelines, including what sorts of cleaner fuels large vessels should run, is complicating the path to net zero. Shifting to cleaner burner fuels is one path to lowering emissions, executives said last week at the CERAWeek energy conference in Houston, but many in the industry are reluctant to make the changes needed to run new fuels – such as retrofitting engines or purchasing new vessels – given the lack of a longer-term regulatory framework, Reuters reported.
Shipping accounts for roughly 90% of world trade and is responsible for nearly 3% of the world's carbon dioxide emissions. Most large ships currently run on very low-sulphur fuel oil, a tar-like oil that is relatively inexpensive and energy dense, meaning that a fairly small amount is needed to propel a vessel for great distances.
The lack of clarity leaves players reluctant to commit to one less carbon-intensive fuel over another for their fleets, be it hydrogen-carriers methanol, ammonia, biodiesel or liquefied natural gas (LNG).
Reuters noted, most vessel engines are designed to take one type of fuel. With an average 25-year lifespan, companies run a risk by committing to one fuel that is less developed and less predictable at scale than traditional bunkering fuel.
Cleaner marine fuels, like methanol and ammonia, are also seeing demand from other sectors, such as across Asia where countries are seeking to decarbonize power plants away from coal.