Evening Report: Feb. 15, 2022

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Russia/Ukraine update... Russia is ready for talks with the United States and NATO on military transparency, missile deployment limits and other security issues, Russian President Vladimir Putin said on Tuesday after hosting Germany’s chancellor. It is another sign of easing tensions over a possible Russian invasion of Ukraine. Russia said it was moving troops away from the Ukraine border. The U.S. wants proof of soldiers being moved. However, Ukrainian authorities on Tuesday reported a series of cyberattacks that knocked the websites of Ukrainian government offices and major banks offline.


 

January NOPA crush drops from record levels... Members of the National Oilseed Processor Association (NOPA) crushed 182.2 million bu. of soybeans in January, down 4.2 million bu. from the December record and 4.5 million bu. below the average pre-report estimate. NOPA data implies a total January soybean crush of 194.0 million bu., which would be down from the record 198.2 million bu. crushed in December and below the 196.5 million bu. crushed last year. NOPA reported total soybean oil stocks of 2.026 billion lbs. at the end of January, down 5 million lbs. from December and less than the average trade estimate of 2.062 billion lbs. due to the smaller-than-expected crush.

 


Agroconsult slashes Brazil’s soybean production again... Agroconsult slashed its Brazilian soybean crop forecast by 8.4 MMT to 125.8 MMT. Based on its crop survey, the Brazil-based consultancy cut the national average yields to 51.7 60-kilo bags per hectare. For the various areas of Brazil, the firm estimated yields at 27 60-kg bags per hectare for Rio Grande do Sul, 41 bags for Paraná, 61.5 bags in Mato Grosso and 64.5 bags in Goiás.


 

Producer prices index increase... The January producer price index (PPI) soared 1.0% from December, the highest monthly increase since May, according to the Bureau of Labor Statistics. The yearly reading rose by 9.7% from January 2021. Economists expected an average increase of 0.5% for the monthly reading and a 9.1% yearly increase.

The monthly increase followed monthly increases of 0.4% in December and 0.9% in November.

In January, the index for services grew 0.7%, and prices for goods moved up 1.3%. Prices less food, energy and trade services increased 0.9%, the largest increase since rising 1.0% in January 2021. For the 12 months ended January 2022, the index less food, energy and trade services surged 6.9%.

 


Alberta border crossing blockade ended... Traffic can cross the U.S./Canada border in both directions at Coutts, Alberta, according to the Royal Canadian Mounted Police (RCMP). On Tuesday, demonstrators left voluntarily after police arrested some people and planned to clear the blockade. On Monday, Canadian Prime Minister Justin Trudeau invoked the Emergencies Act for the first time in Canada’s history to give the federal government temporary powers to handle ongoing blockades and protests against pandemic restrictions.

Demonstrators continue to block and dictate who can cross the U.S./Canada border crossing on Highway 75 between Manitoba and North Dakota. The protestors have been allowing emergency vehicles through, according to RCMP.

 

 

Wild U.S. weather Wednesday and Thursday... An aggressive storm will develop in the Southern Plains and move into the Midwest over the next couple of days, according to World Weather, Inc. The storm is predicted to be similar to the one across the Midwest in mid-December and another storm is expected next week. However, the resulting damage should not be as significant or devastating as the December storm. World Weather forecasts severe thunderstorms from the southeastern Great Plains through the Delta to the Tennessee River Basin, heavy rain and local flooding in the northern Delta and a part of the Ohio River Basin and a band of impressive snowfall coming out of Kansas and passing through Missouri to Michigan.

 

 

Crop insurance price guarantee trending higher...  Crop insurance price guarantees might be higher than last year for corn and soybeans, according to USDA Chief Economist Seth Meyer at the Crop Insurance Convention. Meyer said the corn price guarantee could be $5.80 per bu. and soybeans could be $14.11 per bushel. 

The 2021 corn insurance price was $4.58 per bushel. Between 2014 and 2021, projected prices averaged $4.06. Projected prices were near the $5.70 level in the mid-2010s: $6.01 in 2011, $5.68 in 2012, and $5.65 in 2013.

The 2021 soybean price guarantee was $11.87 per bushel. Between 2014 and 2021, projected prices averaged $9.86. In the mid-2010s, projected prices were $13.49 in 2011, $12.55 in 2012, and $12.87 in 2013.

The spring price guarantee for corn and soybeans is set by the average settlement price for the December corn futures contract and November soybean contract during February. Crop insurance premiums are set using the prices and a volatility index.

 

 

Brazil ethanol sales drop in January... Brazil’s January ethanol sales by producers decreased to their lowest level since April and were down 32% compared to January 2021, according to industry group Unica. The group reported sales of 1.76 billion liters. Sales of hydrous ethanol that competes with gas at commercial pumps fell 44% to 918 million liters. The group explained higher prices meant people drove fewer miles. Mills switching to produce more sugar instead of ethanol led to higher ethanol prices.

 

 

Sustainable aviation fuel producers want Congress to review tax credits... Sustainable aviation fuel makers are asking Congress to change how they account for life-cycle emissions that would allow their fuel to qualify for tax credits under the Build Back Better Act, according to a letter to Congress reported by Reuters. Under the bill, parameters were developed by the International Civil Aviation Organization. The group wants Congress to switch the U.S. Department of Energy's GREET model. The switch would allow sustainable aviation fuel to qualify for tax credits under the bill.

 

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