Evening Report | July 19, 2021

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Corn conditions hold steady… USDA rated 65% of the U.S. corn crop “good” to “excellent” (G/E) as of July 18, unchanged from the week prior and a point lower than analysts expected. The amount of crop rated “excellent” did edge a point higher to 15%. But the amount of crop rated “poor” to “very poor” (P/VP) also climbed a point to 9%. Rains across the Corn Belt were enough to stabilize ratings, with concerns about overly dry conditions in the far northwest Corn Belt lingering.

Crop development advanced rapidly over the past week, with 56% of the crop estimated to be silking as of Sunday, a 30-point advance from last week and now four percentage points ahead of the five-year average versus four points behind last week. USDA reports 8% of the crop is in dough stage, roughly in line with 7% on average.

 

This week

Last week

Year-ago

Very poor

2

2

2

Poor

7

6

6

Fair

26

27

23

Good

50

51

52

Excellent

15

14

17

 

Soybean condition ratings, as expected… Analysts polled by Reuters were correct in their forecast for USDA to raise the amount of crop rated G/E a percentage point to 60% as of July 18. The amount of crop rated the P/VP categories held steady at 11%.

As of Sunday, 63% of the crop was blooming and 23% of it was setting pods, six and two percentage points ahead of the five-year averages for this date, respectively.  

 

This week

Last week

Year-ago

Very poor

3

3

2

Poor

8

8

5

Fair

29

30

24

Good

49

49

54

Excellent

11

10

15

 

Spring wheat ratings dive again, as hot, dry weather bakes crop… USDA’s spring wheat condition rating once again fell well short of analysts’ expectations, with USDA dropping its rating five percentage points to 11% G/E. Analysts expected just a one-point drop on average, despite another week without rainfall and temperatures topping 100 degrees F. Also of note, USDA’s P/VP rating for the crop surged eight percentage points to 63%. USDA reports just 11% of top-producing North Dakota’s crop is G/E, with 64% of the crop rated P/VP.

Ninety-two percent of the crop was headed as of Sunday, which is in line with the five-year average.

 

This week

Last week

Year-ago

Very poor

29

21

2

Poor

34

34

5

Fair

26

29

25

Good

10

15

55

Excellent

1

1

13

 

Winter wheat harvest pace in line with the norm after a big week-to-week gain… Winter wheat harvest advanced 14 percentage points over the past week to 73% complete, just a point shy of the five-year average pace and in line with year-ago. USDA reports Kansas producers have collected 96% of their crop, right in line with the average for this point in the season.

 

Big week-to-week improvement in cotton ratings… Rains for West Texas have bolstered crop prospects and helped lift the amount of crop USDA rates G/E by four percentage points to 60%. That’s a relatively high rating and a dramatic improvement from 47% G/E last year at this time.

Recent wet weather has cotton development lagging the norm. USDA reports 69% of it is squaring and 23% is setting bolls. That compares to 73% squaring and 30% setting bolls on average for this point in the season. But long-term weather maps signal a warm fall is likely ahead, limiting concerns about any development lag.

 

This week

Last week

Year-ago

Very poor

2

1

5

Poor

7

8

17

Fair

31

35

31

Good

49

44

39

Excellent

11

12

8

 

Report Kazakhstan to limit exports of feed grains amid domestic shortages… Kazakhstan is reportedly planning to limit exports of barley and wheat used for animal feed and to completely halt exports of rye for six months, with restrictions currently expected to take effect Aug. 15, according to a government source cited by Reuters. Kazakhstan is dealing with feed shortages caused by drought.

 

Yellen comments that Phase 1 trade deal didn’t address fundamental problems with China… The Biden administration’s view on the trade deal between the U.S. and China was clearly shown by Treasury Secretary Janet Yellen in a New York Times interview where she said it failed to address the “fundamental problems we have with China.” She continued, “My own personal view is that tariffs were not put in place on China in a way that was very thoughtful with respect to where there are problems and what is the U.S. interest,” she said.

Her comments come as the world’s two largest economies face off over a range of issues from Hong Kong to human rights to the pandemic. In Congress, a recently passed House bill that aims to hobble China’s ability to recruit American scientists shows Washington’s willingness to confront the Asian nation’s growing influence.

Note: The Phase 1 agreement did not put the tariffs in place. Meanwhile, the U.S. Trade Representative review of China trade policy is still ongoing, with no apparent timeline for it to be completed or at least no signal on when it will be wrapped up.

 

China continues to focus on commodity hoarding, ‘malicious’ speculation... Chinese authorities are continuing to focus on commodity prices, with the country’s Ministry of Industry and Information Technology the latest to issue statements about the supply of bulk commodities. “We will coordinate with relevant departments to ensure the stability of bulk commodities supplies and prices ... guide upstream and downstream players in the industrial chain to stabilize production, supply and marketing of raw materials,” ministry spokesperson Huang Libin said, according to a transcript on the ministry's website. “In responding to the risk of the market's price fluctuation, we must resolutely crack down on hoarding, malicious speculation, and the bidding up of prices.”

Other Chinese agencies have focused on commodity prices and have announced efforts to rein in commodity speculation as the country seeks to temper price increases.

 

Impact unclear from court ruling on RFS in favor of environmentalists… The U.S. Court of Appeals for the District of Columbia Friday ruled in favor of environmental groups who challenged EPA’s conclusion that the Renewable Fuel Standard (RFS) levels for 2019 did not pose a danger to the habitats of endangered species. The court said EPA violated the Endangered Species Act by not consulting with the U.S. Fish and Wildlife Service and the National Marine Fisheries Service before setting the 2019 biofuel levels. The ruling orders EPA to reassess the 2019 levels. But the court also rejected claims by the biofuel industry that EPA set the 2019 levels too low and a claim by refiners that the levels were set too high. It is still not clear what impact the ruling will have, and history has shown it may not be a quick turnaround on a reexamination of the issue by EPA.

 

Migrant surge continues along southern U.S. border… Customs and Border Protection (CBP) reported that its agents had some 188,000 migrant encounters in June. CBP has made more than a million arrests at the U.S.-Mexico border so far this fiscal year, already more than any full-year total since at least 2005. The number of families caught trying to cross reached 55,805 for the month, a 25% increase from May, and unaccompanied children encounters rose to 15,253. These numbers don’t count those who cross illegally and aren’t caught.

 

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