Evening Report | April 1, 2024

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

Winter wheat crop conditions improve notably but not quite as much as expected... As of Sunday, USDA rated 56% of the U.S. winter wheat crop as “good” to “excellent,” up six percentage points from the end of November but one point less than traders expected. The portion of crop rated “poor” to “very poor” stood at 11%, down four points from last fall. The initial crop ratings of the spring are much better than last year when 28% was rated in the top two categories and 36% in the bottom two.

USDA reported 4% of the crop was headed, two points ahead of the five-year average. The Texas crop was 20% headed, two points behind average.  

Corn planting ahead of average to start spring... As of Sunday, USDA reported 2% of the U.S. corn crop was planted, in line with expectations and one percentage point ahead of the five-year average. In the top 12 production states, Illinois stood at 1% planted, with Kansas and Missouri each at 2%.

Cotton planting a little slower than normal... USDA’s initial cotton planting figure showed 3% of the crop seeded, one point behind the five-year average. Texas had 5% of its crop planted, one point behind average. None of the crop was planted in Georgia, which is typical for this time of year.

Spring wheat planting 1% done... USDA reported spring wheat planting at 1%, in line with the five-year average but one point slower than traders expected. None of the crop was seeded in top producer North Dakota, which is normal for this time of year.

February soy crush smaller than expected... U.S. processors crushed 193.9 million bu. of soybeans during February, 2.8 million bu. less than traders anticipated. The crush paced dropped 900,000 bu. (0.5%) from January but increased 17.0 million bu. (9.6%) from February 2023.

Through the first half of 2023-24, soybean crush totaled 1.169 billion bu., 5.4% above the same period last year. To hit USDA’s forecast of 2.300 billion bu., crush must run 2.5% above year-ago during the final six months of the marketing year.

Soyoil stocks at the end of February totaled 2.146 billion lbs., up 117 million lbs. from January but down 218 million lbs. from last year.

Corn-for-ethanol use slightly higher than anticipated... Corn-for-ethanol use totaled 441.5 million bu. during February, 1 million bu. more than traders expected. Corn ethanol use increased 459,000 bu. (0.1%) from the upwardly revised figure for January and was 42.8 million bu. (10.7%) above last year.

Through the first half of the 2023-24 marketing year, corn-for-ethanol use totaled 2.712 billion bu., 164 million bu. (6.4%) ahead of the same period last year. To hit USDA’s forecast of 5.375 billion bu., the pace must run 1.3% above year-ago over the final six months.

Production of dried distillers grains with solubles increased to 1.811 million short tons, up from 1.763 million tons in January and 1.561 million tons last year.

Texas person diagnosed with HPAI after being in contact with dairy cows... The Texas Department of State Health Services reported a human case of avian influenza A (H5N1) virus in the state. The case was identified in a person who had direct exposure to dairy cattle presumed to be infected with highly pathogenic avian influenza. According to the Centers for Disease Control and Prevention (CDC), this is the second human case of H5N1 flu in the U.S. and the first linked to an exposure to cattle. CDC said the case does not change the risk for the general public, which remains low.

StoneX cuts Brazil soybean, corn crop forecasts... StoneX cut its Brazilian soybean crop forecast by 750,000 MT to 150.8 MMT due to reductions in Mato Grosso do Sul, São Paulo and Paraná. The consulting firm trimmed its Brazilian safrinha corn crop estimate to 96.1 MMT, down 200,000 MT from its prior forecast.

Study: Beef, pork exports boost U.S. corn, soybean industries.... Beef and pork exports have a significant impact on the U.S. corn and soybean industries, according to a study conducted by The Juday Group and released by the U.S. Meat Export Federation (USMEF). In 2023, beef and pork exports amounted to $18.1 billion, contributing substantially to the value of corn and soybeans nationally and on a state level in the leading production states. Key findings in the study:

• Nationally, beef and pork exports contributed an estimated total economic impact of 14.6% per bushel to the value of corn and 13.9% per bushel to soybeans in 2023.
• Beef and pork exports accounted for 512.7 million bu. of U.S. corn usage, with a market value of $3.05 billion.
• Beef and pork exports also contributed to the usage of distiller’s dried grains with solubles (DDGS), totaling 3.07 million metric tons and equating to $671.62 million.
• Pork exports accounted for 96.8 million bu. of U.S. soybean usage, valued at $1.36 billion.

These exports had a significant economic impact, contributing to the overall value of corn and soybeans in the market. Additionally, the quality of U.S. corn and soybeans as feed inputs was highlighted as a key differentiator for U.S. red meat in international markets, emphasizing the importance of sustainable production practices and feed processing efficiencies.

RFA challenges EU’s biofuel regulation; ethanol industry concerned... The Renewable Fuels Association (RFA) is joining a legal challenge against the European Union’s FuelEU Maritime Regulation, arguing it unfairly penalizes the use of crop-based biofuels in the maritime sector. The regulation aims to reduce greenhouse gas emissions in shipping by 2% by 2030 and up to 80% by 2050, with incentives for renewable fuels of non-biological origin. However, opponents argue the rules would disadvantage biofuels despite their lower emissions compared to conventional fuels.

RFA is supporting a challenge initiated by EU-based biofuels trade group ePure and biofuels firm Pannonia Bio, seeking to annul parts of the regulation. They argue the regulation unfairly equates crop-based biofuels with the highest emitting fossil fuels, thereby excluding them from decarbonization objectives. U.S. ethanol producers also fear being shut out of the growing EU market due to the biased regulation.

RFA emphasizes that ethanol and other renewable fuels have lower greenhouse gas emissions than gasoline, as demonstrated by a report from the U.S. Department of Energy’s Argonne National Laboratory. They argue the regulation’s bias against crop-based biofuels not only harms ethanol producers globally but also discourages the development and use of low-carbon marine fuels in the U.S. and beyond.

USTR releases 2024 report on global trade barriers... U.S. Trade Representative Katherine Tai released the 2024 National Trade Estimate Report on Foreign Trade Barriers (NTE Report), which details significant obstacles encountered by U.S. exports, foreign direct investment and electronic commerce in key global markets. This report is utilized as a tool by the U.S. government to identify and address barriers to trade and investment, thereby opening markets for American workers, businesses, farmers and communities.

Tai emphasized the importance of returning the NTE Report to its original statutory purpose, which is to highlight legitimate barriers to trade and investment, rather than including measures that may be valid exercises of sovereign policy authority by other governments. The report aims to focus on significant trade barriers that could be addressed to expand market opportunities for the U.S. and foster economic growth.

This year’s report covers barriers in 59 markets, including issues such as:

• Obstacles to U.S. agricultural exports, including opaque registration requirements and sanitary and phytosanitary measures not based on science.
• Failure of certain countries to recognize U.S. motor vehicle standards, hindering exports of FMVSS-compliant vehicles.
• Challenges faced by U.S. stakeholders in the European Union due to disparate policies across member states.
• Non-market policies and practices of China, which provide unfair advantages to Chinese companies and distort global markets.
• Concerns about data policies, including data localization, which can infringe on civil liberties and pose compliance challenges.

The 2024 NTE Report follows the earlier release of the 2024 President’s Trade Policy Agenda and 2023 Annual Report, with plans for the upcoming release of the annual Special 301 Report on intellectual property rights enforcement within 30 days.