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Oil futures rose sharply Monday, with Iran’s demands reducing hopes for an imminent reopening of the Strait of Hormuz. But it was diesel prices that led the charge higher, as has tended to be the case this summer, with the latest surge also reflecting attacks on Russian refineries by Ukraine and on Saudi refineries by Iran-backed Houthi rebels.
“The refinery attacks have taken substantial amounts of diesel off the market with global benchmarks rallying strongly,” Robert Yawger of Mizuho told Dow Jones Newswires. “Unless there are big breakthroughs in the peace process around both conflicts, large amounts of diesel will remain shut in.”
Nymex diesel futures surged more than 7% to around $4.1817 a gallon. Nymex West Texas Intermediate crude soared 5.1% to end at $82.13 a barrel, while Brent rose 5% to $87.72 a barrel.
Crop conditions steady: Corn and soybean conditions showed little change in the past week, USDA data showed Monday afternoon.
The percentage of the corn crop rated good or excellent was unchanged at 61% as of Sunday, stabilizing after deteriorating the past few weeks and matching the average forecast produced by analysts in a Bloomberg survey.
The Pro Farmer Crop Condition Index (0-to-500 scale, 500 equals perfect), offers a single, weighted, easy-to-track number that’s widely used to monitor the health and potential of U.S. corn and soybean crops during the growing season. The CCI for corn saw a 2.28 point decline as conditions declining in Iowa and Minnesota outweighed steady to slightly higher ratings elsewhere in the U.S.
Soybeans were rated 62% good or excellent, down one percentage point from last week and a point below the average estimate.
The soybean CCI rating fell 0.48 point to 363.84. Condition changes were spotty geographically this week. Ratings diverged in the Dakotas, with North Dakota notching a decline while South Dakota came in slightly higher from last week. The Midwest saw declines in Iowa and Wisconsin, while Illinois and Indiana saw minor gains.
The spring wheat crop was rated 51% good or excellent, down from 55% and below the average guess of 54%. USDA said 24% of the spring wheat crop had been harvested, up from 5% a year ago and well ahead of the 14% expected by analysts. Winter wheat harvest was pegged at 91%, up from 86% a week ago and matching expectations.
The spring wheat CCI rating fell 3.69 points in response to state-level ratings changes, as declines were seen in every state except Idaho. Read more about the latest Pro Farmer CCI readings here.
Ahead of the pace: Both corn and soybeans appear to be ahead of their usual development pace after having seen rapid planting progress this spring. USDA said 61% of the corn crop was in the dough stage as of Sunday, up from 43% the previous week and ahead of the five-year average of 55% for this time of year. The report showed 16% of the crop dented, up from 6% a week ago and compared with the five-year average of 12%. Seventy-four percent of the soybean crop was blooming, up from 62% a week ago and six percentage points ahead of the five-year average.
Trump extends Jones Act waiver, but narrows it: The Trump administration on Monday extended its exemption of the Jones Act by another 90 days, but narrowed its scope as it attempts to keep domestic fuel supplies flowing during the Iran war. The Jones Act requires the transport of goods between American ports to be conducted by American vessels. The extension was narrowed to apply only to vessels hauling certain energy sources, CNBC reported, citing a White House official. The extension also requires the Pentagon to consult with the U.S. Maritime Administration to determine if the waiver applies to each individual shipping voyage, the report said.
Chicken glut: Poultry companies are producing more chicken than consumers can buy, depressing wholesale prices and squeezing their profits, the Wall Street Journal reported, emphasizing that the dynamic could provide inflation relief for shoppers and restaurants. Wholesale prices for boneless, skinless chicken breasts in the U.S. are down about 37% over 12 months. The report noted that suppliers including Tyson Foods, Pilgrim’s Price and Wayne-Sanderson Farms have been ramping up offerings of boneless chicken breasts, wings, and thighs over the past year to meet what they had thought would be an onslaught of consumer demand prompted by high prices for steaks and burgers. But beef demand hasn’t cooled, the report noted, while bigger chicken breeds and a lack of disease pressure over the summer has led to a glut.
Farm bill next steps: Senate Agriculture Committee Chairman John Boozman, R-Ark., is encouraging farmers and ranchers to pressure Democratic lawmakers to support the Republican farm bill, Politico reported in its Monday Ag newsletter, after the legislation failed to advance out of committee last week. Democrats want the farm bill to set up a delay of two years to requirements that states share costs for the Supplemental Nutrition Assistance Program based on payment-error rates. Boozman offered a one-year extension. Governors from both parties have urged a two-year delay. Lawmakers return from a late-summer recess next month. If Sen. Mitch McConnell, R-Ky., is able to attend – he has been absent since a fall earlier this summer – Republicans would be able to advance the bill without Democratic support. Boozman has told reporters he’s unsure of the timing of McConnell’s return.
Southern Plains, Delta facing stress: The U.S. southern Plains and Delta dried down significantly during the past week, observed World Weather Inc. in a Monday note. A large section of Texas and Oklahoma into the northern Delta were dry or did not receive enough rain to counter evaporation. Aggressive drying is slated for the southern Plains and Delta in the coming weeks, the forecaster noted, warning that the lack of moisture and periods of hot weather will likely stress coarse grains and cotton across Texas and Oklahoma. World Weather said concerns over production losses will increase. The Delta will have some moisture to support growth during the next few days but crop conditions will deteriorate later this month as the ground dramatically dries down. World Weather warned that production potentials may be impacted if the drier and warmer weather prevails through the end of the month.
Don’t miss these must-reads:
- Heat takes bite out of corn, while rains offer relief in driest areas, Pro Farmer members say
- El Niño’s growing threat: A slower harvest at home, a bigger problem in Brazil
- Turning cattle loss into recovery: What is LIP? (Drovers)
And check out this week’s Pro Farmer Podcast, with a look ahead to this week’s USDA crop production and supply-and-demand data and an August checklist that will help avoid harvest-season headaches.