Evening Report | April 18, 2023

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

Romania may also restrict Ukraine grain imports... Romania looked set on Tuesday to follow Poland, Hungary and Slovakia in banning Ukrainian grain imports. Romania’s ruling Social Democratic Party increased pressure on Kyiv by saying it would ask the coalition government to approve an emergency decree enforcing a temporary ban on Ukrainian grain imports though it wants transit to continue.

Ukraine’s agriculture minister is due to hold talks on Wednesday with Romania, whose Black Sea port of Constanta has processed some 12 MMT of Ukrainian grain since the war started.

Istanbul vessel inspections suspended for second day in a row… Inspections of vessels waiting to exit or enter the Ukrainian Black Sea were suspended for a second day in a row, while no further information was available for April 19, according to Agricensus. Some trade sources indicated the delay could have been classified as a day of following the Orthodox Easter celebrations, though inspections did not resume the following day. Since April 10, The Russian side of the Joint Coordination Center in Istanbul has unilaterally stopped registering vessels that Ukrainian ports submit to form an inspection plan, which “completely contradicts” the terms of the initiative and is unacceptable to Ukraine, according to the Ukrainian port administration.

SovEcon raises Russia wheat crop forecast... SovEcon raised its 2023 Russian wheat crop forecast by 1.5 MMT to 86.8 MMT due to “further improvement in weather conditions.” The top two growing regions – South and Black Earth – received 100% to 150% of normal rainfall during the past four weeks, though the Volga Valley (No. 3 producer) was drier than average. Despite the increase, Russian wheat production will be down sharply from last year’s record 104.2 MMT crop.

Only U.S. EV brands now qualify for full tax credits... Starting today, the U.S. Treasury enforced stricter criteria to qualify for the full $7,500 electric vehicle (EV) credit. In new rules announced last month, the state department split the EV tax break into two: Carmakers can claim one half — $3,750 — if 50% of their vehicle’s battery components are manufactured or assembled in North America. They can claim the other half if at least 40% of its critical minerals — like graphite, lithium and cobalt — are sourced from the U.S. or a trade partner.

Just a dozen EV models now qualify for the full $7,500 incentive in 2023, according to the Treasury Department’s list.

Despite costing thousands of dollars more than gas-powered vehicles, EVs as a percentage of U.S. cars sold more than doubled in the past two years to 8.5% in February, car-rating business J.D. Power said. The Biden administration wants two-thirds of car sales to be EVs by 2032.

New math of carbon emissions... Weyerhaeuser Co. has cut down more trees than any other American company since its founder started logging before the Civil War. Environmentalists have long treated it as an enemy. Now, according to the Wall Street Journal, the new math of carbon emissions is enabling the lumber producer to cast itself as something quite different: a force for environmental good. Its 10.6 million acres of U.S. timberland act as a giant sponge for carbon dioxide. It is selling that carbon dioxide storage capacity to other companies.

Investors are the most underweight stocks versus bonds since 2009... That’s according to Bank of America’s global fund manager survey. They indicated that fears of a credit crunch have driven up bond allocation to a net 10% overweight, while a net 63% now expect a weaker economy.

Manufacturing execs remain upbeat despite tightening credit... Manufacturing executives say they’ve experienced a cutback in credit and tighter loan terms in recent weeks, according to a new poll of 150 U.S.-based firms by Forbes, Xometry and Zogby, yet they remain optimistic. Details:

• 82% say they’ve either moved overseas factories back home or were in the process.
• 3/4 say they’ve already hiked prices this year, many by double-digits.
• Top investment priorities are automation of workflow operations, AI and robotics.

House Speaker addresses debt-limit debate... Highlights of House Speaker Kevin McCarthy’s (R-Calif.) speech Monday at the New York Stock Exchange:

• Unless President Joe Biden agrees with conservatives to cut federal spending and debt, the economic consequences of a continued impasse will be on him.
• Has a general plan to resolve a looming debt ceiling crisis but is still working to unite his conference.
• Key quotes: “Debt limit negotiations are an opportunity to examine our nation’s finances… Defaulting on our debt is not an option, but neither is a future of higher taxes, higher interest rates, more dependency on China and an economy that doesn’t work for working Americans.”
• Said in the coming weeks, the House “will vote on a bill to lift the debt ceiling into the next year.”
• Said House Republicans are targeting Supplemental Nutrition Assistance Program (SNAP) work requirements. The GOP proposal will “restore work requirements that ensure able-bodied adults without dependents earn a paycheck and learn new skills that grow the economy and help the supply chain.” McCarthy said food assistance work requirements were “weakened” during the Biden administration. During the pandemic, work requirements were relaxed, but go back into full effect on May 11. “Incentives matter. And incentives today are out of whack,” McCarthy said.

Deadline for debt-limit solution: The Bipartisan Policy Center has estimated a summer or early fall deadline for when the government can no longer pay its debt and obligations. The exact timing depends on 2022 tax collections, with tax filing day today. New estimates for the deadline are expected in May.