Evening Report: Feb. 9, 2022

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USDA cuts South American soybean production, trims carryout... USDA cut its forecasts for Brazil, Argentina and Paraguay soybean crops, though the crop pegs remain above those of many private crop forecasters. Brazil’s soybean crop was sliced to 134 MMT, down 5 MMT from the January WASDE Report. Argentina’s soybean production was trimmed 1.5 MMT to 45 MMT. Paraguay’s soybean crop was lowered by 2.2 MMT to 6.3 MMT. U.S. soybean ending stocks were decreased by 25 million bu. from last month to 325 million bushels. Traders expected USDA to reduce projected soybean carryover by 40 million bushels. As a result, global soybean carryout stocks were reduced 2.4 MMT to 92.8 MMT but above the pre-report average estimate of 91.51 MMT.  

USDA cut Brazil corn production by 1 MMT to 114 MMT. U.S. corn ending stocks were unchanged at 1.540 billion bu., whereas traders expected a 28-million-bu. cut. Global carryover was trimmed 850,000 MT to 302.22 MMT; the average pre-report estimate was 300.32 MMT.

U.S. old-crop wheat carryover was increased 20 million bu. from last month to 648 million bushels. U.S. cotton ending stocks were increased to 3.5 million bales, up 300,000 bales from last month, mostly on reduced cotton exports.

Click here to view details of the report.

Avian flu found on Indiana turkey farm... Highly pathogenic avian influenza (HPAI) has been confirmed on a turkey farm in Dubois County in southwest Indiana, according to USDA’s Animal and Plant Health Inspection Service. It is the first time since 2020 a case has been found in a U.S. commercial poultry operation. USDA will report the finding to the World Organization for Animal Health (OIE) and international trading partners.

The current outbreak has only been detected on one farm and is not as bad as the 2016 outbreak in the county, according to Tammy Humbert, Dubois County Emergency Management director. The county ranks second in poultry production in Indiana and has between 1.5 million and 2.0 million turkeys, according to the National Agricultural Statistics Service.

APHIS is working closely with the Indiana Board of Animal Health on a joint incident response. State officials quarantined the affected premises, and birds on the property were depopulated to prevent the spread of the disease. Birds from the flock will not enter the food system. Federal and State partners are working jointly on additional surveillance and testing in the nearby area.

Earlier this year, avian flu was detected in wild birds in Maryland, North Carolina, South Carolina and Virginia.

Companies announce higher pesticides prices... FMC will raise its pesticide prices due to higher costs to make the crop protection products, said CEO Mark Douglas. He announced the price increases during the company’s quarterly earnings call.  Last week, Corteva Inc. announced it would also raise pesticide prices.

Chinese railroad invests in troubled Chinese pork producer... Jiangxi Railway Aviation Investment Group has invested $1.6 billion into the second-largest pork producer in China, Zhengbang. The pork producer said the deal would help boost its cash flow and ease pressure on its funding needs. The railway had bought $12.6 million of feed for the producer and will assist in future purchases. On Jan. 29, Zhengbang warned it could lose as much as $3.1 billion due to lower prices and culling over 2 million sows. When the Chinese stock market opened this week after the Chinese New Year, the company’s stock has dropped 19%.

Indonesia expands palm oil export rules...  Exporters of all palm oil products including margarine and kernel oils, must declare their export plans, according to the Indonesia trade ministry. The rules take effect on Feb. 15. Previously, the Indonesian government said the rules only applied to crude palm oil (CPO), olein, used cooking oil and residue exports.  On Jan. 27, the country mandated all palm oil producers market 20% of crude palm oil shipments for domestic use.

Nine Midwest states agree on emergency weight limit increase... Department of Transportation officials in Illinois, Indiana, Iowa, Kansas, Minnesota, Michigan, Missouri, Ohio and Wisconsin signed a memorandum of understanding that increases interstate truck weight limits during major disasters declared by a U.S. president, according to USDA Train Transportation Report.

The agreement between the states in the Mid America Association of State Transportation Officials increases emergency interstate truck weights to 88,000 lbs. from 80,000 lbs. with no more than 10% weight increase per axle. Individual states can allow for heavier shipments.

The group says it is an effort to speed up the interstate shipment of emergency supplies.

U.S.  Chamber:  New tariffs on China possible... The U.S. could impose new tariffs on Chinese goods if current trade talks with the country break down and the U.S. conducts a new trade investigation, according to the U.S. Chamber of Commerce. The Biden administration is considering a range of options, said Myron Brilliant, the Chamber's head of international affairs. Reuters reported another option would be for the U.S. to work with allies such as the EU to present a united front to China to level the playing field. Brilliant said any action against China would need to be done with allies to be successful. China fell short of its purchase commitments under the Phase 1 trade deal.

Farm Bureau: Farm bankruptcies down dramatically in 2021... For the first time in the last decade, every region in the U. S. had fewer farm bankruptcies than the previous year, according to an American Farm Bureau analysis. In 2021, 276 Chapter 12 bankruptcies were filed in the United States. The Northeast had the largest percent decline in farm bankruptcies. The Midwest had the largest drop of actual bankruptcies, down from 297 in 2020 to 144 in 2021. The region still had the most farm bankruptcies.

Wisconsin (27) and Minnesota (26) led the nation in Chapter 12 filings. Six additional states had double-digit filings in 2021: Kansas (19), Iowa (17), Nebraska (17), North Carolina (12), Alabama (10) and Georgia (10).

Chipotle’s CEO: No signs of lower prices... Brian Niccol, Chipotle CEO, says he is not seeing any signs higher prices for beef and freight will ease anytime soon. He said the higher beef prices would have the company “think twice” before adding steak-based menu items. The company added a smoked beef brisket to its menu last year for a limited time. It raised prices in December. Niccol says the company might increase prices again.