Evening Report | Aug. 4, 2021
Check our advice monitor on ProFarmer.com for updates to our marketing plan.
Corn producers: Increase old- and new-crop sales… Forecasts indicate generally favorable weather conditions for much of the Corn Belt during the next two weeks. Unless the forecast shifts to much hotter and drier, it would likely take a bullish reaction to USDA’s Aug. 12 reports to spark fresh buying. As a result, we advise corn hedgers and cash-only marketers to sell another 5% of 2020-crop to get to 95% sold. We also advise selling another 10% of expected 2021-crop to get to 40% forward-priced.
Soybean producers: Increase old- and new-crop sales… Forecasts indicate generally favorable weather conditions for much of the Midwest during the next two weeks. Unless the forecast shifts to much hotter and drier, it would likely take a bullish reaction to USDA’s Aug. 12 reports to spark fresh buying. As a result, we advise soybean hedgers and cash-only marketers to sell another 5% of 2020-crop to get to 95% sold. We also advise selling another 10% of expected 2021-crop to get to 40% forward-priced.
ANEC says Brazil’s corn exports will be halved in 2020-21… Brazil will likely export just 17 MMT of corn in 2020-21, Luciano de Souza, president of the grain exporter group ANEC, said during a presentation. That would be less than half of last season’s 34.8 MMT in shipments and under the 2015-16 season when Brazil shipped 18.8 MMT of corn. USDA in mid-July forecast Brazil would likely export 28 MMT of corn this season, but since then crop conditions have continued to erode. If ANEC’s dramatically lower export forecast proves accurate, that could open the door for even stronger U.S. corn exports.
The association also projected Brazil’s 2021-22 soybean crop would climb to a record 144 MMT on a rise in planted area, with exports likely to climb to 94.3 MMT. Both figures would be solid gains from this year’s 137 MMT crop and an expected 86.5 MMT in exports.
Trucker strike adds to Argentina’s shipping woes… A trucker protest for better pay has disrupted the flow of soybeans and corn to Argentina’s Bahia Blanca right in the midst of the busy harvest season, according to local officials. The strike reportedly got underway Friday, preventing grain trucks from entering local port terminals, Carlos Ortiz, a board member of the Bahia Blanca Port Management Consortium, told Reuters. He detailed, “Exports are being shipped, but the terminals are not getting any more grains because new merchandise cannot be received. That will cause the queues for ships to start in a one or two more days.”
The Bahia Blanca port had seen an uptick in business due to low water levels along the Parana River at the country’s main Rosario port hub. The port is located farther to the south in Buenos Aires province and has served as a place for lighter-loaded ships to be “topped off.”
The truckers are not organized under a labor union.
Argentine producers have sold more than 60% of their beans, farmers remain reluctant sellers… Argentina’s ag ministry estimates producers have sold 26.3 MMT of their 43.5 MMT soybean crop, as estimated by the Buenos Aires Grains Exchange, representing 60.5% of the crop. Last year at this time, producers had sold 28.5 MMT, (58.2%) of the 49 MMT crop. So while the volume of sales was higher last year, the percentage of the crop sold is actually running a few percentage points ahead of year-ago. Producers are again hesitant to sell much of their crop, given instability of the country’s currency and sky-high inflation. That was the case last season, too.
The ag ministry reports farmers in Argentina have sold 35.8 MMT (74.6%) of their 48 MMT corn crop. Sales are running 3.1 MMT ahead of last year at this point.
NOAA’s revised hurricane outlook… The National Oceanic and Atmospheric Administration (NOAA) mid-season update says the Atlantic hurricane season is showing no signs of slowing. The weather agency is now calling for 15 to 21 named storms this year, which is up from its May forecast for 13 to 20 named storms. NOAA still expects 7 to 10 hurricanes and 3 to 5 major hurricanes. “A mix of competing oceanic and atmospheric conditions generally favor above-average activity for the remainder of the Atlantic hurricane season, including the potential return of La Nina in the months ahead,” said Matthew Rosencrans, lead seasonal hurricane forecaster at NOAA’s Climate Prediction Center. So far, there have been five named storms. The six-month hurricane season ends Nov. 30.
French exports beyond the EU off to slowest start in more than a decade… France exported just 349,200 MT of soft wheat outside the EU in July, the lowest tally in Refinitiv records for the month that date back to 2009-10. France’s harvest has been slowed by late-season rain, which has in turn slowed exports. Britain was the largest non-EU buyer of French wheat. Exports should pick up this month, with 118,000 MT already loaded and another 308,400 MT waiting to load or scheduled to ship. France’s total soft wheat exports beyond the EU will likely climb 3 MMT in 2021-22 to 10.5 MMT, forecasts the French farm office.
More detail on WOTUS information gathering effort... EPA and the U.S. Army Corps of Engineers have published a notice in the Federal Register outlining their reasoning for pursuing a rewrite of the definition of what constitutes waters of the U.S. (WOTUS) and providing more detail on the feedback they are seeking via the notice and a series of meetings that have been or will be scheduled in the months ahead. The two-track effort will first be a rulemaking to restore the pre-2015 definition of WOTUS and a second to craft a new definition. The first effort to replace the Trump-era Navigable Waters Protection Rule (NWPR) is based on several factors, the agencies said, including concerns raised about the rule, issues raised in ongoing litigation over the rule and on “legitimate concerns” that there was not appropriate consideration given to the revised definition of “waters of the United States.” However, the agencies said they would continue to implement the rule until it is not in effect either via a new final rule or “by virtue of a court order.”
The new rule the agencies will develop will be based on making sure it will further the principles set forth by Congress, consider the latest peer-reviewed and relevant science, prioritizing practical implementation approaches for state and tribal co-regulators. It will “Reflect the experiences of, and input received from, landowners, the agricultural community, states, tribes, local governments, community organizations, environmental groups, and disadvantaged communities with environmental justice concerns.”
The agencies want feedback from the public. They will hold web conferences Aug. 18, 23, 25, 26 and 31, and have reserved Sept. 2 as another date in case all speaking slots were filled at the earlier meetings. A series of dialogues will be held with state and tribal regulators this fall to “discuss both rulemakings.” There will also be 10 regional roundtables that have yet to be scheduled.
The agencies plan to publish a revised rule in 2022 and a final rule by spring 2023, according to its July court filing. In the meantime, the agency said it can work to mitigate or eliminate alleged potential
SEC plans to regulate cryptocurrency markets… The Securities and Exchange Commission (SEC) will regulate cryptocurrency markets to the maximum extent possible using its existing authority, Chairman Gary Gensler said Tuesday, while also calling on Congress to grant the agency more scope and resources to oversee the sector. Calling the asset class rife with “fraud, scams and abuse,” Gensler signaled the SEC is likely to become more active in policing crypto trading and lending platforms, as well as so-called stablecoins. “We just don’t have enough investor protection in crypto. Frankly, at this time, it’s more like the Wild West,” Gensler said.
