Evening Report: Feb. 10, 2022
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La Niña gains strength in Argentina... La Niña’s impact on Argentina’s corn and soybean production is not letting up, according to a Rosario Grain Exchange report. Last month, weather forecasts predicted the drier-than-normal weather conditions would fade away and more rains would fall across the country for the second half of February. However, the report said La Niña remains active and is predicted to remain that way. The exchange said forecasts for the end of February are not encouraging, calling for higher temps followed by rains between 10-25 mm in the main farming areas from Feb. 17-23.
The exchange said this year could rival 2018, where Argentina harvested 38 MMT of soybeans, though it kept its forecast for soybean production at 40.5 MMT. On the corn side, the exchange held its forecast at 48 MMT. However, it warned early harvest yields were not a good sign. The exchange is waiting until harvest progresses more to get a better yield estimate.
Add Mexico to the list of countries banning Indiana poultry imports... Poultry/products from Indiana will be prevented from being shipped to Mexico, the country’s agriculture ministry announced today. Mexico purchases 67% of U.S. turkey exports and 23% of broilers. It is the last country to impose import bans on Indiana poultry products after highly pathogenic avian flu was found in a commercial turkey flock in Dubois County. Other countries that have announced restrictions on poultry/products from Indiana include China, South Korea, Tunisia, Benin, Namibia, South Africa and Taiwan. Those countries make up 8% of U.S. turkey exports.
Nationally, Indiana ranks number 1 in ducks, second in layer chickens and table eggs, third in turkeys, and is a significant producer of broilers.
Only one flock tested positive for the disease. All 29,000 turkeys in the flock were depopulated to prevent the spread of the disease in the area. So far, tests of all poultry flocks in a 10-kilometer diameter area around the farm where the avian flu was detected have all come back negative, according to the Indiana Board of Animal Health. Testing will continue every week within the control area. State officials have reached out to hobby/backyard poultry owners in the control area to schedule the testing of birds.
CPI continues to rise, highest since February 1982... The all-items consumer price index (CPI) for January was up 7.5% from year-ago, according to the Department of Commerce. In December, the CPI rose 7.0%. Minus food and energy prices, the so-called core CPI rose 6.0%, the largest 12-month change since August 1982. From December to January, inflation was 0.6%, above pre-report expectations and the same as the December increase.
Higher food prices were among the most significant contributors to the seasonally adjusted all items increase. The food index rose 0.9% in January, following a 0.5% increase in December. The index for food away from home (restaurants) rose 6.4% over the last year, the largest 12-month increase since January 1982.
After the report’s release, traders increased the odds of a half-point Fed interest rate hike at its next month to 50%, up from 24% the day before, according to the CME Group.
Fed’s Bullard supports a 100-basis-point interest rate hike by July... St. Louis Federal Reserve Bank President James Bullard supports raising interest rates by a whole percentage point by the start of July, Bloomberg News reports. Bullard, a Federal Reserve monetary policy voter, also endorses a half-point rate hike in March. “I’d like to see 100 basis points in the bag by July 1,” Bullard said in an interview on Thursday. “I was already more hawkish, but I have pulled up dramatically what I think the committee should do.”
Winter wheat drought continues to increase... The amount of winter wheat considered in drought conditions rose two points to 71% for the week that ended Feb. 8, according to the U.S. Drought Monitor. USDA said winter wheat drought was 30% “moderate,” 24% “severe,” 17% “extreme,” and 2% “exceptional.” Last week, USDA said winter wheat drought was 27% “moderate,” 22% “severe,” 18% “extreme,” and 2% “exceptional.”
There was modest drought improvement in the Southern Plains over the past week, but the majority of HRW wheat areas remain heavily drought-ridden. The area considered abnormally dry/drought improved three points in Kansas to 86%, five points in Texas to 88% and four points in Oklahoma to 92%. Nebraska had a six-point increase in the drought area to 98%. The amount of land classified as abnormally dry/drought in Montana (92%), Colorado (100%) and South Dakota (78%) remained the same.
In SRW areas, Missouri had 34% of its state considered abnormally dry/drought, down 11 points. North Carolina had a 23-point drop to 43% of its area considered abnormally dry/drought. Forty-one percent of Arkansas is listed as abnormally dry/drought, down one point. However, the area classified as abnormally dry/drought in Michigan increased by 12 points to 56%. Illinois (33%), Ohio (0%) and Indiana (0%) had the same percentage of area considered abnormally dry/drought as the previous week.
Canadian truck protest shuts down North Dakota/Manitoba border crossing... On Thursday, a Canadian Covid vaccine mandate protest blocked all north and southbound lanes at the border crossing between Pembina, North Dakota and Emerson, Manitoba. The crossing is an important one for pigs heading to U.S. farms and livestock feed heading north, according to Manitoba Chamber of Commerce CEO Chuck Davidson said. Truckers also closed the border crossing at Coutts, Alberta and Montana. On Wednesday, the Royal Canadian Mounted Police issued tickets to protesters blocking the Coutts border crossing. The protests have halted traffic on the Ambassador Bridge between Detroit and Windsor, Ontario. There is also a protest in the nation’s capital, Ottawa.
Similar protests have also erupted in Australia, New Zealand and France. Paris officials plan to block any “freedom convoy” from entering the city. The convoy is planning to converge on Paris and Brussels. In the U.S., the Department of Homeland Security warned law-enforcement agencies that cross-country protest convoys might start on Sunday when the Super Bowl is played in Los Angeles. The truckers would likely arrive in Washington D.C. in early March and could be timed with President Joe Biden’s State of the Union Speech on March 1.
2022 Pandemic Cover Crop Program (PCCP) signup announced... If farmers planted a cover crop for 2022, they could get a $5 per acre premium reduction, according to USDA’s Risk Management Agency (RMA). All cover crops are eligible. Farmers need to report cover crop acreage by March 15 at the local Farm Service Agency office.
PCCP is not available for Enhanced Coverage Option, Hurricane Insurance Protection – Wind Index, Post-Application Coverage Endorsement and Supplemental Coverage Option. Stacked Income Protection (STAX) and Margin Protection (MP) policies are only eligible for PCCP when insured as a standalone policy. STAX and MP endorsements to underlying policies are not eligible for PCCP.
U.S. EV charging network details announced... The Department of Transportation will award state grants to develop an electric vehicle (EV) charging network. States will need to submit plans and get federal approval to install EV charging stations for part of the $615 million in 2022. Charging stations installed along interstate highways will be the top priority. They want DC Fast chargers that are capable of charging four EVs at the same time. The charging stations should be placed every 50 miles and within one mile of interstate highways. The federal government will cover 80% of the EV charging costs.
There are several incentives in legislation being held up in Congress to encourage the purchase of EVs.
By 2030, Biden wants half of all new vehicles sold to be electric or plug-in hybrid electric models and 500,000 new EV charging stations. Biden has not supported the phasing out of new gas-powered automobiles by 2030.
Bayer resubmits GMO cotton application in India... Bayer resubmitted the application to get approval for its Bollgard II Roundup Ready Flex trait in December, according to sources reported by Reuters. The start date for the approval process is unclear. Once the approval process starts, it might take a few years to get final approval.
Monsanto withdrew the Bollgard II Roundup Ready Flex approval application in 2016 after India’s government imposed measures against the company. Since then, Bayer purchased Monsanto.
The new GMO variety can help control pink bollworm. Nearly 20% to 30% of the country’s 12 to 13 million hectares of cotton area is infested with pink bollworm, based on industry estimates.
India had approved two previous GMO traits from Monsanto. The last one, Bollgard II, was approved in 2006. Farmers say the existing approved traits are losing their effectiveness against the pest.
