Evening Report | January 24, 2023

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S&P Global forecasts increase in U.S. corn, soybean and wheat acres... S&P Global Commodity Insights, formerly known as IHS Markit Agribusiness, projected U.S. farmers would plant 90.504 million acres of corn in 2023, up 2.2% from last year, according to portions of a client note seen by Reuters.

S&P Global projected 2023 U.S. soybean plantings at 88.0 million acres, up 0.6% from 2022.

All-wheat plantings for 2023 are projected at 49.837 million acres, up 9.0% from 2022. That included 36.950 million acres of winter wheat, up 11.1% from last year; 11.200 million acres of spring wheat (excluding durum), up 3.4% from last year; and 1.687 million acres of durum, up 3.4% from last year.

S&P Global projected sorghum plantings for 2023 at 6.570 million acres, up 3.9% from 2022.

The firm projected 2023 all-cotton plantings at 10.892 million acres, down 20.9% from last year.

Geopolitical focus intensifies as Germany will send tanks to Ukraine... German Chancellor Olaf Scholz has decided to send Leopard 2 tanks to Ukraine and also allow other countries such as Poland to do so, a source familiar with the matter told Reuters.

Two U.S. officials, meanwhile, told Reuters the U.S. appeared to be dropping its opposition to sending some of its M1 Abrams main battle tanks to Ukraine.

GOP faces challenge of inexperience in writing a farm bill... In the four years since Congress enacted the current farm bill, more than 40% of the seats in the House have turned over. Nearly 200 of the 435 members may know little about the multiyear, far-ranging and sometimes contentious legislation, posing a challenge to House Agriculture Chairman Glenn Thompson (R-Pa.) as he writes a new farm bill, Roll Call reports.

Perspective: This type of story usually surfaces around the time of writing another major farm bill. Sometimes a fresh perspective on the often-complex farm programs is needed. Sometimes experience can work the other way in making lawmakers entrenched in their positions.

Another small rise in ERP, CFAP 2 payouts... Payments under the Emergency Relief Program (ERP) rose to a total of $7.35 billion as of Jan. 22, up from $7.33 billion the prior week. The total includes non-specialty crop payments of $6.25 billion ($6.234 billion prior) and specialty crop payments of $1.1 billion ($1.09 billion prior).

Payouts under the Coronavirus Food Assistance Program 2 (CFAP 2) also increased as the additional payments announced by USDA earlier this month continued to move out to producers. Total CFAP 2 payments were at $19.34 billion as of Jan. 22, up from $19.31 billion the prior week. The total included original CFAP 2 payments of $14.45 billion ($14.44 billion prior) and top-up payments now at $4.89 billion ($4.87 billion prior).

There was essentially no change in CFAP 1 payments.

EU wheat exports remain ahead of year-ago... European Union soft wheat exports since July 1 reached 18.14 MMT as of Jan. 22, according to official data from the European Commission. That was 6% ahead of the same period last year. EU barley exports so far in 2022-23 totaled 3.09 MMT, down 40% from the same period last year.

However, the Commission said that it was still experiencing problems compiling grain trade figures from Germany and Italy. Export data submitted by Germany from November may be inaccurate following the country’s switch to a new declaration system, while for Italy import data was available only until the end of November, it said.

Granholm: Biden would veto GOP plan to thwart SPR sales... Energy Secretary Jennifer Granholm Monday revealed President Joe Biden would veto a bill offered by House Republicans that would prohibit tapping of the Strategic Petroleum Reserve (SPR) without there being a plan to boost oil and gas leasing on federal lands unless the release is to address a severe oil supply emergency. “He will not allow the American people to suffer because of the backwards agenda that House Republicans are advancing,” Granholm told reporters. It seems unlikely the House legislation would garner enough support to clear both the House and Senate.

White House, Democrats’ strategy on GOP is now clear... Senate Majority Leader Chuck Schumer (D-N.Y.) dared House Republicans to propose and vote on the deep spending cuts they demand in exchange for lifting the debt ceiling later this year. Such a vote would tie Republicans politically to what Schumer called “draconian” reductions that conservatives want to make to popular federal programs. Speaking on the Senate floor, Schumer said it isn’t clear what conservatives want, whether it be cuts to Social Security or Medicare, or to military pay raises or public health programs. “Frankly, I expect the House Republicans themselves will struggle to come up with a serious answer, because deep down they know that no matter what they propose their cuts are likely to be deeply unpopular with the American people,” Schumer said.

Meanwhile, President Joe Biden recently called Republicans “fiscally demented” and knocked GOP priorities during the keynote speech at the National Action Network’s (NAN) annual breakfast to mark Martin Luther King Jr. Day. “They’re gonna talk about big-spending Democrats again. Guess what? I reduced the deficit last year $350 billion. This year, the federal deficit is down $1 trillion-plus. That’s a fact. And there’s gonna be hundreds of billions reduced over the next decade. But, so what? These guys are the fiscally demented, I think. They don’t quite get it,” Biden said of Republicans. Biden will use similar language this Thursday during a speech in Virginia.

Germany considering withdrawal from crop-based biofuels by 2030... Germany’s government is considering proposals to phase out the use of biofuels produced from food or animal feed crops by 2030, the German biofuels industry association (VDB) said. German Environment Minister Steffi Lemke said she will soon send proposals to the cabinet to withdraw from use of crop-based biofuels in order to reduce greenhouse gas emissions. Lemke had said previously in May 2022 she wanted to turn the country away from crop-based biofuels, instead intensifying the use of biofuels produced from garbage, wastes and used edible oil.

VDB, however, said draft proposals to cut crop-based biofuel use would mean an increase in Germany’s transport carbon dioxide emissions by around 32 MMT by 2030.