Evening Report | December 8, 2022
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Brazil soy crush association forecasts record Brazilian soybean crop... The Brazilian Association of Vegetable Oil Industries (Abiove) forecasts 2022-23 Brazilian soybean production at a record 153.5 MMT, matching the official forecast from the Brazilian government. Abiove expects Brazil to export 93 MMT of soybeans in 2022-23, 3.6 MMT less than Conab’s forecast. The soy crushers association expects Brazil to process 52.5 MMT of soybeans domestically in 2022-23.
Drought hampers Argentine crop condition ratings... Drought stress continues to weigh on crop conditions in Argentina. The Buenos Aires Grain Exchange rates the country’s corn crop 18% good/excellent, 56% fair and 26% poor. It rates the soybean crop 11% good/excellent, 66% fair and 23% poor. The exchange says around two-thirds of Argentina’s corn and soybean acres have inadequate soil moisture.
Argentina’s soybean plantings could be cut due to the prolonged drought, the exchange warned. Just 37% of the country’s expected 16.7 million hectares of soybeans have been planted. Of the expected 7.3 million hectares of corn, one-third has been planted, according to the exchange.
Drought still covers most of U.S.... As of Dec. 6, 79% of the U.S. was experiencing abnormal dryness/drought, according to the U.S. Drought Monitor, down one percentage point from the previous week.
USDA estimated 73% of the winter wheat crop was experiencing drought, down one percentage point from the previous week but 20 points greater than last year.
In HRW areas, dryness/drought covers 84% of Colorado (unchanged), 100% of Kansas (unchanged), 88% of Montana (unchanged), 100% of Nebraska (unchanged), 100% of Oklahoma (unchanged), 100% of South Dakota (unchanged) and 74% of Texas (unchanged).
In SRW areas, dryness/drought covers 81% of Missouri (unchanged), 86% of Illinois (up 5 points), 93% of Indiana (down 5 points), 57% of Ohio (down 16 points), 41% of Michigan (down 1 point), 98% of Kentucky (down 2 points) and 97% of Tennessee (down 1 point).
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EU palm oil use to decline significantly by 2032... The share of palm oil in biodiesel and in food in the European Union is expected to fall significantly within the next 10 years, leading to a sharp drop in imports, the European Commission said on Thursday. In its 2022-2032 Agricultural Outlook, the Commission projected palm oil would account for 9% of total biodiesel output by 2032, down from an average 23% between 2019 and 2021.
Under the EU's renewable energy directive, palm oil-based fuels, accused of being linked to deforestation, are to be phased out progressively by 2030. In contrast the share of advanced biodiesels was expected to grow to 42% by 2032 from 29% in the 2019 to 2021 period. Of this biodiesel from waste oils and fats would account for 26%, up from 23%, and other advanced biodiesels for 16%, up from 6%.
In food, the use of vegetable oils was expected to rise by 2.9% compared with the 2020 to 2022 average to 10.6 MMT in 2032. Palm oil use in food would fall by 35.7% and soybean oil by 23.5% while rapeseed oil would gain 12.6% and sunflower oil would rise 27.5%, the Commission said.
U.S. labor market still tight despite continuing claims hitting 10-month high... The number of Americans filing new claims for jobless benefits increased modestly last week, pointing to a still-tight and strong labor market, despite continuing claims rising to a 10-month high. Initial claims for state unemployment benefits increased 4,000 to a seasonally adjusted 230,000 for the week ended Dec. 3. The number of people receiving benefits after an initial week of aid, a proxy for hiring, increased 62,000 to 1.671 million in the week ended Nov. 26. That was the highest level in continuing claims since February.
Thompson to keep ‘foot on the gas’ as head of House ag committee... On Wednesday, the House Republican Steering Committee elected Glenn "GT" Thompson (PA) as Chairman of the House Committee on Agriculture for the 118th Congress. Thompson will be the first Chairman from Pennsylvania in nearly 170 years.
Thompson said, “I am honored to lead the Committee on Agriculture and build on the accomplishments of the past two years as Ranking Member. The political landscape in Washington may be fractured, but as Chairman, I will prioritize the needs of our producers and rural communities—the backbone of this country. We will keep our foot on the gas to deliver principled solutions, robust oversight, and a Farm Bill that is responsive to the needs of the country’s farmers, ranchers, and foresters.”
USDA extends DMC signup deadline... USDA extended the deadline for producers to enroll in Dairy Margin Coverage (DMC) and Supplemental Dairy Margin Coverage (SDMC) for program year 2023 to Jan. 31, 2023.
“We recognize this is a busy time of year with many competing priorities, so we’ve extended the DMC enrollment deadline to ensure every producer who wants coverage for 2023 has the opportunity to enroll in the program,” said Farm Service Agency (FSA) Administrator Zach Ducheneaux. “Early projections indicate DMC payments are likely to trigger for the first eight months in 2023.”
Holds continue on USDA, USTR nominees... Senators are continuing with holds on nominees for roles at USDA and the Office of the U.S. Trade Representative (USTR), keeping prospects of the nominees being dealt with before year-end uncertain. Sen. Dan Sullivan (R-Alaska) has a disagreement with USDA Secretary Tom Vilsack over USDA’s plans to end logging in the Tongass National Forest. Sullivan has put a hold on the nominations of Jose Emilio Esteban to be undersecretary for food safety; Margo Schlanger to be assistant secretary for civil rights; and Alexis Taylor to be undersecretary for trade and foreign agricultural services. Congressional Quarterly reported Sen. Cory Booker (D-N.J.) also has a hold on Esteban over meat labeling standards and he voted against sending the nomination to the full Senate. Meanwhile, Politico reported Sen. Bob Menendez (D-N.J.) has continued his hold on the nomination of Doug McKalip to be chief agricultural negotiator at USTR as he wants the trade agency to be more transparent and wants to establish an inspector general at the office.
