First Thing Today | August 23, 2022
Day 1 Crop Tour results for South Dakota and Ohio… Scouts on the first day of the Pro Farmer Crop Tour found an average corn yield of 118.45 bu. per acre in South Dakota, down sharply from both last year’s 151.45 bu. per acre estimate and the three-year Crop Tour average of 161.59 bu. per acre. Soybean pod counts in a 3’x3’ square came in at 871.40 for South Dakota, down from 996.86 in 2021 and 1,026.86 for the three year average.
In Ohio, samples yielded an average corn yield of 174.17 bu. per acre, down from 185.06 bu. per acre in 2021 but up from the three-year average of 169.03 bu. per acre. Soybean pod counts in a 3’x3’ square totaled 1,131.64 for Ohio, down from 1,195.37 in 2021 and below the three-year average of 1,038.35.
Today, scouts on the eastern leg of the Tour will sample routes from Noblesville, Indiana to Bloomington, Illinois, and scouts on the western leg will sample southeast Nebraska.
Corn, soybeans and wheat higher overnight... December corn futures climbed to a six-week high overnight after USDA’s weekly crop ratings fell short of expectations, while soybeans and wheat also rose. As of 6:45 a.m. CT, corn futures were trading 14 to 16 cents higher, soybeans were 7 to 10 cents higher and wheat was 7 to 14 cents higher. Front-month crude oil futures were up well over $1 and the U.S. dollar index was down slightly.
Consultant holds U.S. corn and soybean yield forecasts unchanged... Crop consultant Dr. Michael Cordonnier kept his corn yield estimate unchanged this week at 173.0 bu. per acre but holds a neutral to slightly lower bias. He kept his soybean yield estimated unchanged at 50.5 bu. per acre and has a neutral bias. “August is the make-or break month for soybeans and the soybeans in the eastern Corn Belt have benefited from recent rainfall,” he wrote. “The weather has not been as beneficial in the western Corn Belt especially in Kansas, Nebraska, and South Dakota.”
Corn and soybean CCI ratings slip, spring wheat crop improves... When USDA’s latest weekly condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the corn crop fell another 4.07 points to 344.75, the sixth straight weekly decline. The soybean crop declined by 2.64 points to 346.44, the third straight weekly decline. The spring wheat crop improved 1.33 point to 369.69, up sharply from a year-ago rating of 223.40 for the drought-ravaged crop.
Crop Progress Report highlights… Following are highlights from USDA’s crop progress and condition update for the week ended Aug. 21.
- Corn: 97% of the crop was silking (99% average), 75% dough (79% average), 31% dented (35% average) and 55% good/average (57% last week).
- Soybeans: 98% blooming (98% average), 84% setting pods (86% average), 57% good/excellent (58% last week).
- Spring wheat: 33% harvested (54% average), 64% good/excellent (unchanged from last week).
- Winter wheat: 95% harvested (97% average)
- Cotton: 88% setting bolls (85% average), 19% bolls opening (18% average), 31% good/excellent (34% last week).
Russia massing missiles for potential attack? Russia appears to be amassing missiles in Belarus in preparation for an attack on Ukraine, according to an independent military intelligence group. Meanwhile, Russia’s intelligence service on Monday blamed “Ukrainian special services” for carrying out a car bombing on Saturday which killed Darya Dugina, a 29-year-old journalist and the daughter of the prominent pro-Putin intellectual Alexander Dugin.
U.S. government urges its citizens to leave Ukraine… Saying it believed Russia was preparing to target civilian and government infrastructure in the next few days, the U.S. warned citizens to leave Ukraine, following a ban by the Ukrainian government on celebrations in the capital Kyiv on tomorrow's anniversary of independence from Soviet rule due to fears of attack.
Unplanted acres rise sharply… Acres that U.S. farmers were unable to plant have more than tripled from the same period last year as extreme weather wreaks havoc on fields. Prevented planting acres were at 6.4 million, according to the USDA Farm Service Agency’s August report. That’s up from 2.1 million in 2021. Corn was the hardest hit with more than 3 million acres unplanted, with the data indicating there were 1.19 million corn acres in North Dakota and 540,193 corn acres in South Dakota prevented from planting. Soybean prevented planting totaled 987,229 acres in the August data, with more than half — 522,061 acres — in North Dakota.
Dems new climate law harder to challenge in court… The Democrats’ climate law legally defines greenhouse gases as pollution. That will make new regulations harder to challenge in court. The new law amends the Clean Air Act to define the carbon dioxide produced by the burning of fossil fuels as an “air pollutant.” That language, according to legal experts, explicitly gives the EPA the authority to regulate greenhouse gases and to use its power to push the adoption of wind, solar and other renewable energy sources. When the Supreme Court restricted the ability of the Environmental Protection Agency to fight climate change this year, the reason it gave was that Congress had never granted the agency the broad authority to shift America away from burning fossil fuels. Link to details via the New York Times.
China’s currency drops to its weakest level against the U.S. dollar in two years… yuan is likely to depreciate further as the country’s central bank moves to combat a slowing economy and a deep housing downturn. Today the yuan traded at more than 6.86 to the dollar in China’s tightly controlled onshore market, hitting levels last seen in August 2020, according to FactSet. The currency weakened past 6.88 in the more freely traded offshore market, taking its year-to-date decline against the dollar to more than 8%. A weaker currency helps China’s exporters by making their goods cheaper. But it creates another headwind for foreign investors in stocks and bonds in mainland China by eroding their value.
ERP payments at $6.47 billion as of Aug. 21… Payments under the USDA Emergency Relief Program (ERP) increased to $6.47 billion as of August 21, up from $6.37 billion the prior week. The total includes $5.61 billion to non-specialty crop producers ($5.51 billion prior) and $862 million to specialty crop producers ($824.1 million prior) for eligible 2020 and 2021 losses related to natural disasters. USDA has mailed additional applications under Phase 1 which they said would be for over $750 million in payments before factors are applied.
OPEC+ could reverse action and tighten oil supply… Saudi Oil Minister Prince Abdulaziz bin Salman said “thin liquidity and extreme volatility” in the futures market are moving prices in ways that do not conform to normal supply and demand factors, which may spark OPEC+ to take action. The Saudi-led group could tighten production when it meets next month, doing a U-turn after reversing all of the cuts made during the Covid-19 pandemic. Crude oil futures have slumped 27% since mid-June amid concerns about the global economy, surging shipments from Russia and the possibility of more Iranian oil coming back online in the event of a nuclear deal.
Coronavirus payments climb… Payments under the Coronavirus Food Assistance Program 1 (CFAP 1) edged up to $11.81 billion for total payments ($11.8 billion prior), including $10.62 billion in original CFAP 1 payments ($10.61 billion prior) while top-up payments remained steady at $4.83 billion. There were no changes in CFAP 2 payments as of August 21.
Ford axes thousands of jobs in its shift to EVs… The automaker said it was cutting 3,000 jobs, mostly in the U.S., because it needed to slash costs for its $50 billion pivot to electric vehicles. “Building this future requires changing and reshaping virtually all aspects of the way we have operated for more than a century,” CEO Jim Farley and Executive Chairman Bill Ford wrote in a memo. The job cuts are primarily coming to units that produce vehicles using internal combustion engines.
Overnight demand news... Exporters reported no tenders or sales.
See ‘Policy Updates’ for late-breaking morning news updates... For updates to items in “First Thing Today” or any late-breaking morning news stories, check “Policy Updates” on www.profarmer.com.
