Evening Report | Aug. 30, 2021

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Rains help corn condition ratings hold steady… USDA rated 60% of the U.S. corn crop in “good” to “excellent” (G/E) condition as of Aug. 29, steady with the week prior and a point higher than analysts polled by Reuters expected on average. Last year at this time, 62% of the crop was rated G/E.

Crop development continues to run a few points ahead of the five-year average, with 91% of the crop in dough, 59% dented and 9% of it mature.

Soybean ratings also hold steady… USDA once again rated 56% of the soybean crop G/E as of Sunday, which was in line with expectations. Last year at this time, 66% of the crop was rated G/E. The department estimates 15% of the crop is now rated “poor” or “very poor,” which is a one-point improvement from last week.

As of Sunday, USDA estimates 93% of the crop was setting pods and 9% of it was dropping leaves, which compares to 92% and 7% for the respective five-year averages.

Just 12% of the spring wheat crop remains unharvested… Spring wheat harvest jumped 11 percentage points over the past week to 88% complete. While rains slowed harvest to some degree, the small, drought-stricken crop has enabled farmers to make quick work of harvest this season. The five-year average is for 71% of harvest to be complete at this point in the season. In top-producing North Dakota, harvest is running 16 points ahead of the five-year average at 84% complete.

Cotton ratings edge off elevated levels… Cotton condition ratings remain solid with 70% of the crop rated G/E. But that is a one-point drop in the overall G/E rating and the amount of crop rated “excellent” did slide three percentage points. In top-producing Texas, 68% of the crop is rated G/E.

Cotton development continues to lag the norm, with just 86% of the crop setting bolls vs. the usual 94% for this time of year and 21% with bolls open vs. the usual 26%.

Grain terminals assessing damage from Hurricane Ida… Global traders like Bunge Ltd., Archer Daniels Midland Co. (ADM) and Cargill Inc. are working to assess damage to key export facilities shuttered by Hurricane Ida and related power outages. Around 60% of U.S. exports are shipped from the Mississippi Gulf Coast.

Bunge plans to open its major Destrehan, Louisiana port-based facility on Tuesday, “provided the evacuation order for the parish is lifted and there is not significant damage,” a spokeswoman told Reuters. The facility is one of Bunge’s busiest port facilities, handling corn, wheat, soybeans and sorghum from over 50 grain elevators along the Mississippi River.

Cargill Inc. reports its grain terminal in Reserve, Louisiana sustained significant damage. The firm gave no timeline for when that facility might resume operations.

ADM is assessing damage to its four New Orleans grain elevators and port operations, noting it is making alternate shipping arrangements in the meantime.

Statistics Canada confirms sharply reduced crop prospects… As expected, Statistics Canada (StatsCan) confirmed sharply reduced crop prospects this season due to heat and drought this summer in western production regions. Its July Estimates Production of Principal Field Crops report shows durum wheat crop prospects down 39.2% from the 2020 season at nearly 4.00 MMT, with spring wheat crop prospects down 37.7% at 16.10 MMT.

Canada’s 2021 canola crop is expected to drop 24.3% from year-ago levels to 14.75 MMT, with production falling to the lowest level since 2012. This comes at a time when canola processing in Canada is ramping up. StatsCan’s all wheat and canola production estimates came in a bit higher than analysts surveyed by Reuters expected, on average.

StatsCan notes that while dry conditions may lead to an increase in abandoned acres, coarse resolution-based modelling relies on historical averages for harvested area. Its final harvested area estimates will be published Dec. 3, 2021.

WTO will once more examine China’s use of grain import quotas… The World Trade Organization (WTO) announced it would once again weigh in on a dispute between the U.S. and China over Beijing’s use of low tariff-rate quotas for imports of ag goods. In 2019, the WTO ruled against China’s use of TRQs for ag imports, which the U.S. had argued limited market access for U.S. grain exports. China says it has since implemented WTO recommendations, but the U.S. disagrees and believes it is entitled to take countermeasures against China. The WTO’s dispute settlement panel typically presents its decision to those involved within six months.

Biden presidency: from competence, calm and control to chaos... The Washington Post quotes a Democratic member of the House, speaking on the condition of anonymity, as saying many in the caucus believe the lower chamber of Congress is already lost in the midterms. Other Democrats said they are bracing for the prospect of Republicans making double-digit seat gains. Besides the Afghanistan withdrawal debacle, Republicans label Biden as a weak leader who has lost control of a swirl of crises, from the surge in migrants at the southern border to a rise in violent crimes.

Polls show Biden’s precipitous decline, with even more negative results likely ahead. Gallup found Biden’s approval rating declining from 56% in June to 50% in July and 49% in the first half of August. A mid-August NBC News survey pegged it at 49%, with 48% disapproving. The survey showed a 16-point drop in Biden’s handling of the pandemic and Americans disapproving of his handling of Afghanistan by more than 2-to-1.

Democrats in early assessments say the botched Afghanistan withdrawal ups the odds for infrastructure spending bills clearing. Why? The party must show something they accomplished following recent negative polls regarding border issues, crime statistics on the rise, and Biden’s sudden poll rating declines.

Aluminum prices are reaching 10-year highs… There is enough aluminum to go around globally. The trouble is that much of the metal is sitting in Asia, and buyers in the U.S. and Europe have struggled to get their hands on it. Ports are jammed with a crush of orders from companies hustling to restock inventories and prepare for the Christmas holiday shopping spree. Containers used to move industrial metals are in short supply, and traders are feeding rocketing freight costs through to customers, the Wall Street Journal reports.

Signal to Noise podcast… Chip Flory and Pro Farmer Policy Analyst Jim Wiesemeyer discuss policy issues and happenings in D.C. Listen here.

Chart Trend… Daily and weekly charts are still pointed sideways for corn and soybeans... Find more updates to our short-term, intermediate- and long-term trends for commodity and key outside markets here.