Evening Report | March 13, 2024

Evening Report
Evening Report
(Pro Farmer)

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

 

Last chance: Please fill out our acreage survey... You should have received our annual spring acreage survey via e-mail last week. Please fill out the survey with your current planting intentions for this year. We’ll cover results and our acreage forecasts ahead of USDA’s March 28 Prospective Plantings Report. Click here to fill out the survey if you haven’t already responded. Please complete the survey only once.

 

Livestock producers: Extend feed coverage... Corn futures are signaling a low is in place. With funds heavily short the market, extended price gains are possible. The case for a bottom in soymeal isn’t as strong, but that market has worked off its recent lows. We advise livestock producers to extend cash corn-for-feed and soymeal coverage another month through April.  

 

Concerns mount over declining U.S. ag exports and trade strategy... In a letter to U.S. Trade Representative Katherine Tai and USDA Secretary Tom Vilsack, Sens. John Thune (R-S.D.),  John Boozman (R-Ark.) and Mike Crapo (R-ID) express deep concern over the significant decline in critical markets for U.S. agricultural exports. They highlight the historical efforts made to increase market access through negotiations, removal of trade barriers, and holding trading partners accountable. However, recent data indicates a troubling trend with U.S. agricultural exports falling more than $17 billion in the last fiscal year alone, with further forecasts projecting an additional decline of over $8 billion in the current fiscal year. This decline is expected to result in a record agricultural trade deficit of $30.5 billion.

The writers attribute this decline to what they perceive as an unambitious U.S. trade strategy that fails to expand market access or reduce trade barriers effectively. They criticize the Biden administration for not pursuing traditional free trade agreements while other countries, including China, Canada, the European Union and the United Kingdom, continue to sign trade pacts that disadvantage American exporters.

Highlighting the importance of international trade for the U.S. agriculture sector, the letter points out that a significant portion of major crops and agricultural products are destined for foreign markets. Diminishing access to these markets poses economic challenges and threatens the livelihoods of millions of American workers, farmers, and ranchers.

The letter concludes with specific questions directed at the Biden administration, asking for details on the specific actions planned to increase agricultural exports in 2024 and whether there are intentions to pursue new or improved free trade agreements to gain market access for agricultural products. Additionally, they request the administration to analyze the relationship between U.S. competitiveness and market share in foreign agricultural markets with negotiated tariffs and other market access provisions.

 

U.S. held secret talks with Iran over Red Sea attacks... The U.S. has held secret talks with Iran this year in a bid to convince Tehran to use its influence over Yemen’s Houthi movement to end attacks in the Red Sea, Financial Times reported, citing U.S. and Iranian officials. The indirect negotiations in January were the first between the two countries in 10 months, and the U.S. also reportedly raised concerns about Iran’s expanding nuclear program.

Financial Times said, “The talks underline how the Biden administration is using diplomatic channels with its foe, alongside military deterrents, in a bid to de-escalate a wave of regional hostilities involving Iranian-backed militant groups that was triggered by the Israel-Hamas war.”

U.S. officials see an indirect channel with Iran as “a method for raising the full range of threats emanating from Iran,” a person familiar with the matter said. That included conveying “what they need to do in order to prevent a wider conflict, as they claim to want.”

 

Plan for e-truck charging, refueling stations... The Biden administration unveiled a plan to deploy battery-charging and hydrogen-refueling stations for electric trucks over a 16-year period. The plan initially focuses on 12,000 miles of freight-heavy interstates and major container ports in four phases, aiming to accelerate the adoption of battery-electric and fuel-cell electric trucks.

Phase 1 of the National Zero-Emission Freight Corridor Strategy targets local and regional trucking operations, first- and last-mile delivery, and port drayage, gradually moving towards accommodating long-haul trucking. The strategy, developed by the U.S. departments of Energy and Transportation and EPA, aims to meet current and future market demands while mobilizing actions to achieve decarbonization.

In conjunction with the charging strategy, the Federal Highway Administration (FHWA) has designated the National Highway Freight Network (NHFN) and roadways in several states as the National EV Freight Corridors network. These efforts align with the administration's goal to promote zero-emission medium- and heavy-duty truck sales.

Phase 1 targets 12,000 miles of interstates, including key routes such as Interstates 5, 10, 25, 75, 80, 95, and the Texas Triangle. Major container ports, including the Ports of Los Angeles, Long Beach, New York and New Jersey, Seattle, Tacoma, Miami, Houston and Savannah, are also included in Phase 1.

The strategy outlines a timeline for the expansion of infrastructure:

  • Phase 1: Establish priority hubs based on freight volumes (2024-2027).
  • Phase 2: Connect hubs along critical freight corridors (2027-2030).
  • Phase 3: Expand corridor connections initiating network development (2030-2035).
  • Phase 4: Achieve full access to the national network by linking regional corridors (2035-2040).

Throughout the phases, there will be a transition from battery-electric to hydrogen fuel cell electric truck technology, with an emphasis on regional goods distribution and long-haul transportation.

Phase 4 of the strategy expands to include truck parking facilities to service zero-emission trucks across all use cases, highlighting the importance of a fully integrated transportation energy system to support various vehicle classes and duty cycles.

 

Biden administration announces review of China’s shipbuilding subsidies... U.S. Trade Representative Katherine Tai will review a petition submitted by several major labor unions regarding China’s activities in the maritime, logistics and shipbuilding sector. The petition was made under Section 301 of the Trade Act of 1974 — the same statute that former president Donald Trump used to justify the imposition of tariffs on Chinese imports when he launched a trade war with Beijing in 2018.

The petition, submitted by unions including the United Steelworkers, the International Association of Machinists and Aerospace Workers, and others, raises concerns about China’s actions, policies and practices in these critical industries. Tai highlighted China’s creation of dependencies and vulnerabilities in various sectors, such as steel, aluminum, solar, batteries and critical minerals, which have negatively impacted American workers and businesses while posing risks to supply chains.

The USW petition will claim that Chinese shipbuilders have benefited from protectionist government policies, including preferential financing ranging from state-run bank loans to tax breaks. Over the past two decades, China has gone from producing roughly 12% of global commercial ships by tonnage to more than 50% in 2023, according to Clarksons Research, a maritime consultancy.

Of note: The U.S. Trade Representative now has 45 days to decide whether to initiate an investigation into the issues raised by the petition.

 

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