Evening Report | September 15, 2022

Click here to view weekly export sales/commitments charts and here for report details.

Check our advice monitor on ProFarmer.com for updates to our marketing plan.

Some details on agreement to avert rail strike... As we reported in “First Thing Today,” a deal between major U.S. railroads and unions representing tens of thousands of workers was reached after about 20 hours of talks brokered by Labor Secretary Marty Walsh. Unions will now vote on the deal, which President Joe Biden called a “big win for America.” Even if union votes fail, the deal includes language removing for several weeks the potential of a work stoppage that could have started as soon as a minute after midnight on Friday, a person familiar with the negotiations told Reuters. If they accept the deal, workers whose pay had been frozen would win double-digit increases and would be allowed to seek certain types of medical care without fear of being punished, union leaders said. The agreement also includes an immediate 14.1% wage rise, the railroads said.

Extended forecast favorable for fall fieldwork, worrisome for HRW wheat... The National Weather Service (NWS) 30-day forecast calls for elevated chances of above-normal temps and below-normal precip across all but far northern areas of the Corn Belt during October. The 90-day forecast shifts to “equal chances” for above, below and normal precip for most of the Corn Belt, though the extended outlook should facilitate rapid harvest of corn and soybeans and fall fieldwork. The forecast also calls for hotter and drier conditions across the Southern and Central Plains over the 90-day period covering October through December. That’s a concern for the HRW wheat crop that’s being planted into dry soils across the region.  

Click here for related maps.

Drought footprint broadens, especially in the Northern Plains... As of Sept. 13, 66% of the U.S. was experiencing abnormal dryness/drought, according to the U.S. Drought Monitor, up two percentage points from the previous week. There was a major expansion of drought across the Northern Plains, while drought conditions intensified in the Central Plains. In the Midwest, there were improvements in drought conditions in northern Illinois and Indiana, while conditions worsened in Iowa and Minnesota.

Across the Corn Belt and Plains, dryness/drought covers 84% of Colorado (unchanged from last week), 29% of Illinois (down 1 point), 21% of Indiana (down 10 points), 67% of Iowa (up 5 points), 96% of Kansas (unchanged), 33% of Michigan (up 12 points), 39% of Minnesota (up 13 points), 52% of Missouri (up 8 points), 100% of Nebraska (unchanged), 84% of North Dakota (up 56 points), 5% of Ohio (down 2 points), 100% of Oklahoma (unchanged), 82% of South Dakota (up 8 points), 78% of Texas (down 1 point) and 16% of Wisconsin (down 3 points).

USDA estimates the drought footprint covers 30% of corn acres (up 1 point from last week), 23% for soybeans (up 2 points), 44% for cotton (down 1 point) and 54% of winter wheat acres (up 1 point).

Click here for more details and to view the related map.

NOPA August crush falls short of expectations... Members of the National Oilseed Processors Association (NOPA) processed 165.5 million bu. of soybeans in August, which was shy of the 166.1 million bu. analysts on average expected. The crush pace slowed 2.8% from July but was up 4.2% from August 2021. NOPA implies the full August crush at 175.4 million bushels. If that is confirmed, it would push the 2021-22 total to 2.204 billion bu., just 1 million bu. shy of USDA’s forecast.

Soyoil stocks at the end of August totaled 1.565 billion lbs. and 93 million lbs. lower than the average pre-report trade estimate.

Dozens of grain ships remain stuck at Ukrainian ports... Around 82 ships remain stuck around Ukrainian ports despite the opening of a United Nations-backed sea corridor to ship grains, according to shipping industry officials. The agreement only involved dry bulk ships around three Ukrainian ports with dozens of other vessels including oil tankers not able to access the corridor and awaiting approval to leave while waterways remain controlled by Russia and other ports are blocked by Ukraine. The head of the International Chamber of Shipping (ICS) had discussions with UN shipping agency the International Maritime Organization to speed up matters on getting other ships moving but noted “it’s not easy and a complicated matter.”

FY 2023 sugar TRQ information released... USDA announced via the Federal Register information on the fiscal year (FY) 2023 in-quota aggregate quantity of certain sugars, syrups, and molasses at 222,000 metric tons raw value (MTRV). This quantity includes the minimum amount the U.S. committed to under the WTO of 22,000 MTRV, of which 20,344 MTRV is established for any sugars, syrups and molasses, and 1,656 MTRV is reserved for specialty sugar. An additional amount of 200,000 MTRV is added to the specialty sugar TRQ for a total of 201,656 MTRV. The FY 2023 specialty sugar TRQ will be opened in five tranches, with the first totaling 1,656 MTRV to open October 3. The second tranche of 60,000 MTRV will open on October 10, while the third tranche of 60,000 MTRV will open on January 20, 2023; the fourth tranche of 40,000 MTRV will open on April 14, 2023. The fifth tranche of 40,000 MTRV will open on July 14, 2023. USDA said the second, third, fourth and fifth tranches will be “reserved for organic sugar and other specialty sugars not currently produced commercially in the U.S. or reasonably available from domestic sources.”

DOE: SPR purchase plan doesn’t include trigger price... The Department of Energy (DOE) says its plan to restock the nation’s emergency oil supply (SPR) doesn’t include a trigger price, and that such purchases aren’t likely to occur until after fiscal 2023, which ends Sept. 30. 2023. Bloomberg News reported Tuesday that administration officials have discussed refilling the SPR when crude prices dip below $80 a barrel, with an eye toward protecting U.S. oil-production growth and preventing oil prices from plummeting. In a statement released Wednesday, the Energy Department pointed to its previously released plans. “Claims that we are currently considering buying oil once it dips below $80 a barrel are inaccurate,” Charisma Troiano, a department spokeswoman, said in the statement. “The Department of Energy proposed an approach months ago to replenish the Strategic Petroleum Reserve, and that approach does not include any such trigger proposal. As we said then, we anticipate that replenishment would not occur until well into the future, likely after fiscal year 2023.”

U.S. retail sales unexpectedly rise... U.S. retail sales unexpectedly rebounded in August as Americans ramped up purchases of motor vehicles and dined out more amid lower gasoline prices, but demand for goods is cooling as the Federal Reserve aggressively raises interest rates. Retail sales increased 0.3% last month. Data for July was revised down to show retail sales falling 0.4% instead of being unchanged as previously reported.

Excluding automobiles, gasoline, building materials and food services, retail sales were unchanged last month. Data for July was revised lower to show these so-called core retail sales increasing 0.4% instead of 0.8% as previously reported.

Last month’s unchanged core retail sales and the downward revision to July data could prompt economists to trim their third-quarter GDP growth estimates, which are mostly below a 2% annualized rate.

U.S. mortgage rates climb above 6% for first time since 2008... An industry gauge of average fixed 30-year mortgage interest rates climbed to 6.01%, according to weekly Mortgage Bankers Association data. It marks the first time since November 2008 that the trade group’s measure of mortgage rates was higher than 6%. Higher interest rates mean more expensive home loans for prospective home buyers and homeowners interested in refinancing. The trade group’s index tracking the volume of loans for purchasers remained near two-year lows last week, and refinance application volumes are at their lowest since October 2000.