Evening Report | July 20, 2023
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Drought recedes in corn, soybean areas but still widespread... As of July 18, the U.S. Drought Monitor showed 49% of the U.S. was covered by abnormal dryness/drought, unchanged from the previous week. USDA estimated drought (D1 or higher) covered 55% of corn production areas (down nine points) and 50% of soybeans (down seven points). Drought expanded in spring wheat areas, with 31% now covered (up six points). USDA estimated 17% of cotton areas were covered by drought (up two points).
For the Midwest, the Drought Monitor noted: “The past week was a mixed bag across the region. Heavy rains improved conditions in significant parts of Michigan, Ohio and Indiana, with localized improvement noted in parts of Illinois, Missouri and Wisconsin as well. But in some cases, there was a sharp gradient between areas with copious rainfall and neighboring areas that received little or none, creating a sharp gradient between some areas of severe to exceptional drought, and others only mildly impacted by dryness. Exceptional drought (D4) persisted in central Missouri while D3 covered sizeable sections of central and northeastern Missouri, southeastern Iowa, and both northern and southern parts of Wisconsin. In addition, new areas of extreme drought (D3) were assessed in parts of east-central and southeastern Minnesota. Agricultural impacts have been observed region-wide, particularly in Missouri.”
For the Plains, the Drought Monitor stated: “Drought remained widespread across Kansas, Nebraska outside the Panhandle, and southeastern South Dakota, with some swaths of improvement incurred in eastern parts of Nebraska and Kansas. Meanwhile, dryness and drought expanded slightly across northern North Dakota, and with the Southwest Monsoon off to a slow start, abnormal dryness has developed over a large part of the southwest quarter of Colorado. Other parts of the central Rockies and most of the Dakotas are unchanged from this past week.”
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Mostly favorable finishing weather expected for Corn Belt... The extended weather forecast from the National Weather Service calls for increased chances of above-normal precip from the eastern halves of Nebraska and Kansas across the south-central and southeastern Corn Belt, Mid-South and Delta for August through October. Other areas of the Corn Belt and Plains are expected to see “equal chances” for normal, below-normal and above-normal precip during the period. The 90-day outlook shows elevated chances for below-normal temps in a bubble covering much of Iowa, eastern Nebraska and the northern half of Missouri. There are “equal chances” for temps for the rest of the central and northern areas of the Corn Belt and Plains. Above-normal temps are likely across the far eastern Corn Belt, Mid-South, Delta and Southern Plains during the period.
The seasonal drought outlook calls for drought improvement or removal for most areas of the Corn Belt through October.
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Ukraine to treat ships on way to Russian ports as potential carriers of military cargo... Ukraine’s defense ministry said on Thursday it would consider all Russian ships travelling to ports on the Black Sea as potential carriers of military cargo, starting at midnight. Russia made a similar declaration against Ukrainian ships in the Black Sea on Wednesday. The ministry also said navigation in the northeastern part of the Black Sea and the Kerch-Yenikal Strait of Ukraine was banned as dangerous.
UN Security Council to meet regarding Russia ending Black Sea grain deal... The United Nations Security Council will meet on Friday over the “humanitarian consequences” of Russia’s withdrawal from the Black Sea grain deal, Britain’s UN mission said.
UN Secretary-General Antonio Guterres strongly condemns the attacks by the Russian military on ports in Ukraine. Guterres criticized the destruction of civilian infrastructure as a violation of international humanitarian law, according to UN spokesperson Stéphane Dujarric.
IGC raises global corn production outlook, cuts wheat and soybean forecasts... The International Grains Council (IGC) raised its forecast for 2023-24 global corn production by 9 MMT to 1.22 billion metric tons, reflecting an improved outlook for the United States. IGC forecast U.S. corn production at 383.7 MMT, up 10 MMT from a previous outlook. It now expects global corn production will rise 64 MMT (5.5%) from last year.
IGC lowered its 2023-24 world wheat crop outlook by 2 MMT to 784 MMT, which would be down 19 MMT (2.4%) from last year.
IGC trimmed its 2023-24 global soybean production forecast 2 MMT to 400 MMT, though that would still be up 32 MMT (8.7%) from last year.
USDA’s 2023-24 global production projections are 1.22 billion metric tons for corn, 797 MMT for wheat and 405 MMT for soybeans.
India bans most rice exports... Effective July 20, India banned exports of non-basmati white rice to ensure plentiful domestic supplies and limit price gains. India has also banned exports of wheat and sugar to control domestic price inflation.
India accounts for more than 40% of world rice exports, so impacts from the export ban could be strong.
“India would disrupt the global rice market with far greater velocity than Ukraine did in the wheat market with Russia’s invasion,” B.V. Krishna Rao, president of the Rice Exporters Association told Reuters. “The sudden ban on exports would be very painful for the buyers, who can’t replace the shipments from any other country.”
More than 125 amendments proposed to FY 2024 Agricultural-FDA spending... A significant number of these amendments, introduced largely by Republicans, aim to tighten work stipulations linked to the Supplemental Nutrition Assistance Program (SNAP). GOP House lawmakers have also sought to restrict funding for USDA’s diversity and equity programs further than what was initially proposed.
Prior work prerequisite expansions in SNAP were solidified by Republicans during debt ceiling negotiations. Despite those measures, the party is pushing for additional constraints through the appropriations procedure. There will not likely be enough House votes for the SNAP amendement(s) as no Democrat will support the attempt, and Republicans can afford only four GOP dissentions.
Crop insurance measure proposed... To encourage fair treatment of specialty crop and small farmers, Sen. Cory Booker (D-N.J.) and Rep. Andrea Salinas (D-Ore.) are proposing a new bill: the Insuring Fairness for Family Farmers Act (IFFFA). The measure changes the current compensation strategy for crop insurance agents. Instead of being paid a percentage of the policy premium, which can often favor agents working with larger farms, compensation under IFFFA would be calculated based upon the effort required to sell or service the policy. IFFFA also includes provisions for offering rewards to agents who provide insurance to previously uninsured farms or farms growing specialty crops, which traditionally require more work. Although the payment model is changing, lawmakers affirm the reform would be revenue neutral with an anticipated increase in agent commissions due to implementation of the bill.
