Evening Report | May 9, 2022

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Corn planting even slower than anticipated... USDA reports as of Sunday, 22% of the U.S. corn crop was planted, an advance of only eight percentage points and three points slower than traders expected. Corn planting was 28 points behind the five-year average for the date. In the top 12 production states, corn planting stood at 15% in Illinois (58% on average), 11% in Indiana (39%), 14% in Iowa (63%), 46% in Kansas (50%), 4% in Michigan (22%), 9% in Minnesota (48%), 32% in Missouri (67%), 39% in Nebraska (57%), 1% in North Dakota (18%), 5% in Ohio (27%), 11% in South Dakota (32%) and 7% in Wisconsin (29%).

Corn emergence advanced only two points over the past week to 5%, compared to the five-year average of 15% on this date.   

 

Soybean planting half of normal pace... Soybean planting increased only four percentage points over the past week to 12% done, half of the five-year average. Traders expected soybean planting to reach 16% completed as of Sunday. In the top 13 production states, USDA showed planting at 38% in Arkansas (39% on average), 11% in Illinois (30%), 7% in Indiana (24%), 7% in Iowa (34%), 16% in Kansas (14%), 8% in Michigan (17%), 2% in Minnesota (25%), 7% in Missouri (14%), 28% in Nebraska (29%), 0% in North Dakota (6%), 4% in Ohio (14%), 5% in South Dakota (12%) and 6% in Wisconsin (15%).

USDA says 3% of the soybean crop was emerged as of Sunday, one point behind the five-year average.

 

Cotton planting right on the normal pace... Cotton planting advanced to 24% done, up eight points on the week and equal to the average for this time of year. Texas had planted 22% of its cotton, one point behind normal. Georgia had planted 22% of its cotton, three points behind average.

 

Winter wheat conditions improve a little more than expected... USDA rates 29% of the U.S. winter wheat crop as “good” to “excellent,” up two points from the previous week and a point better than traders expected. The portion of crop rated “poor” to “very poor” declined four points to 39%.

 

 

This week

Last week

Year-ago

Very poor

21

22

5

Poor

18

21

13

Fair

32

30

33

Good

26

24

42

Excellent

3

3

7

Winter wheat crop development remains behind average, with 33% headed as of Sunday versus the normal 40%. The Kansas crop is 30% headed, four points behind average.

 

Spring wheat seeding falls farther behind... U.S. spring wheat seeding increased eight points over the past week to 27% done, 20 points behind the five-average and a point slower than anticipated. Top producer North Dakota had seeded only 8% of its crop, 29 points behind average.

USDA reported spring wheat emergence at 9%, six points behind normal for this date.

 

AgRural slashes Brazilian corn crop estimate... AgRural cut its 2021-22 Brazilian corn crop estimate by 5 MMT from last month to 112.3 MMT. The Brazil-based consultancy now estimates the safrinha crop at 80.9 MMT as drought trimmed production prospects in all of the center-south states except Parana. AgRural says it could make additional cuts to its production forecast if weather remains dry.

 

China soybean imports expected to rise 5.4% in 2022-23... China is expected to import 98 MMT of soybeans in 2022-23, according to the initial forecast from the National Grain and Oil Information Center (CNGOIC). That would be up 5 MMT (5.4%) from CNGOIC’s estimate for 2021-22, as the state-run think tank expects crush demand to rise from the current year. CNGOIC forecasts China’s soybean production will rise 20.1% from this year to 19.7 MMT.

CNGOIC expects the country to import 5.7 MMT of palm oil in 2022-23, up 500,000 MT from this year, backed by expectations of improved global palm oil supply and lower prices.

 

Bronaugh supports White House plan to boost wheat, soybean acres... Asked about some of the criticism of subsidies (higher loan rates and subsidy to double crop wheat/soybeans) proposed by the White House, USDA Deputy Secretary Jewel Bronaugh told Politico USDA wants to “support our farmers and ranchers in being productive” amid “concern[s] about food availability… To be able to increase the availability of soybeans and wheat in our major commodities, both here in the United States and all over the world, is going to be critical not only from a nutrition security standpoint, but also from an ability to support our producers here in the United States,” Bronaugh said.

Asked why crops like soybeans would require subsidies into next year, Bronaugh said prices could dip in the next year — even though ag economists expect prices to remain high through 2023. “We always want them to be able to, through their prices, to be able to survive in terms of our major commodities,” Bronaugh told Politico. “But the reality of the history of so many years [is that] they have needed more support. And so, we as necessary will continue to support them, because that’s what they’re going to need to be sustainable.”

Comments: New-crop soybeans and wheat are currently considerably above the loan rate levels under the White House plan designed to attract more wheat and soybean plantings. Of note, Politico said a USDA spokesperson says the department was involved in designing the programs. USDA Secretary Tom Vilsack has yet to specifically comment on the acreage-boosting plans but will likely be asked to comment on this topic during a Senate hearing Tuesday.

 

White House adviser details efforts to slow inflation, doesn’t foresee recession... In an appearance on CNBC’s Squawk Box, Jared Bernstein, a member of the White House’s Council of Economic Advisers, said as it pertains to inflation, the Biden administration is focused on “improving supply-side issues... There are five ‘buckets’ for that: reducing energy costs, reducing kitchen-table costs, reducing transportation and logistics costs, reducing the deficit and increasing labor supply.” According to Bernstein, “There is no question that both monetary and fiscal policy are pushing back against inflation this year.” Bernstein added, “When the IMF marked down global growth this year by 80 basis points, their markdown in the U.S. was only 30 basis points to 3.7%. Now, maybe they are right, maybe they are wrong. But that is still well above-trend growth. And I do think the expectation is for something like trend to above-trend growth on GDP.”

 

NPPC asks SEC for more time to review climate reporting proposal... National Pork Producer Council (NPPC) officials met last week with senior leadership from the Securities and Exchange Commission (SEC) on the agency’s proposed regulations mandating that publicly traded companies report on their carbon emissions and other climate-related information, including not only their direct greenhouse gas emissions but the GHGs from partner companies, suppliers and distributors throughout the supply chain. NPPC raised concerns, including the proposal’s potential to expose farmers and ranchers to the risk of litigation and lead to further concentration in and integration of the pork industry.

In late March, the SEC voted 3-1 to advance the rule but provided only a 39-day comment period on the more than 500-page proposal. The deadline for filing comments on the proposed rule is May 20. NPPC signed onto a letter from 120 agricultural groups sent to SEC Secretary Vanessa Countryman asking for an additional 180 days to review and comment on the regulation, which company with experience in environmental, social and governance reporting estimated would cost companies $6.7 billion over the next three years.

 

STB implements new rules for some railways... The Surface Transportation Board (STB) implemented new rules for some of the largest railroads after customers said train backlogs have hampered their operations, the agency said. STB, which regulates freight railroad operations, says certain carriers will need to permit service-recovery plans and regular progress reports on rail service, operations and employment. The move follows complaints voiced at an STB hearing last month about rail-service congestion involving the major railways. Customers in the ag sector say delayed trains are impeding crop shipments, causing grain storage facilities to fill up, backing up fertilizer shipments and temporarily shutting down production at ethanol producing plants.

The National Grain and Feed Association (NGFA) praised the STB action. “NGFA members continue to experience rail service issues in many areas of the country impacting feed availability for livestock, exports and processing facilities for food and fuel,” NGFA President and CEO Mike Seyfert said in response to STB’s announcement. “The additional transparency should help the board with its oversight and help shippers and receivers more efficiently plan operations and more accurately gauge when contingency plans are needed.”

 

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