Evening Report | July 21, 2021
Check our advice monitor on ProFarmer.com for updates to our marketing plan.
Livestock producers: Cover remaining August corn and meal needs… Forecasts call for a stretch of hot, dry weather to extend into at least early August, which would stress crops and support prices. As a result, we advise livestock producers to cover remaining August feed needs in the cash market. For corn, that means covering the final 50% and for meal the last 25%. You should already have 50% of September corn-for-feed needs along with 75% of September and 25% of fourth-quarter meal needs covered in the cash market.
Another forecast for an even bigger 2021-22 Brazilian bean crop… Brazil’s 2021-22 soybean crop is likely to surge 6% from the current season to a record 144.7 MMT, according to the Brazil-based consultancy Pátria Agronegócios. It expects soybean plantings to climb 6.7% to 40.85 million hectares (100.94 million acres). Earlier this month, USDA called for a 144 MMT Brazilian soybean crop in 2021-22, up 7 MMT from its 2020-21 crop peg.
High degree of uncertainty about coming cattle placements number… On average, analysts surveyed by Reuters expect USDA’s Cattle on Feed Report to show there were around 11.324 million head of cattle on feed as of July 1, down 1% from year-ago levels. Placements are expected to slide 4.1% and Marketings are expected to climb 2.1% from year-ago. But the relatively wide range of trade estimates (particularly for placements), signals quite a bit of uncertainty about the data coming Friday at 2:00 p.m. CT.
|
Avg. Trade Estimate (% of year-ago) |
Range |
Million head |
On Feed on July 1 |
99.0 |
96.8-102.0 |
11.324 |
Placements in June |
95.9 |
90.4-105.0 |
1.724 |
Marketings in June |
102.1 |
99.4-105.0 |
2.010 |
Semi-annual Cattle Inventory Report expected to reflect ongoing herd contraction… Following are expectations ahead of Friday’s 2:00 p.m. CT Cattle Inventory Report that are based on a survey of analysts conducted by Urner Barry. Given last year’s pandemic-related disruptions to the cattle herd, the data could receive more market attention than it typically does, with traders likely to take particular note of USDA’s calf crop estimate. On average, analysts expect the calf crop to slip 0.4% to a six-year low of 34.995 million head. All cattle and calves as of July 1 are expected to come in around 101.689 million head, the lowest figure in five years.
Cattle Inventory |
Range of Estimates |
Average Estimate |
All cattle/calves (July 1) |
99.5 |
99.3-99.7 |
Cow/heifers that have calved |
99.3 |
98.9-99.6 |
Beef cows |
98.9 |
98.3-99.4 |
Dairy cows |
101.0 |
100.5-101.7 |
Heifers 500 lbs.+ |
99.6 |
99.4-100.0 |
Beef heifer replacements |
99.0 |
97.7-100.0 |
Dairy heifer replacements |
100.1 |
98.8-101.3 |
Other heifers |
99.8 |
98.7-101.3 |
Steers 500 lbs.+ |
99.6 |
99.3-99.7 |
Bulls 500 lbs.+ |
98.8 |
95.2-100.0 |
All calves 500 lbs. and under |
99.5 |
99.3-99.6 |
Calf crop |
99.6 |
99.0-100.5 |
Odds favor Powell’s run as Fed chair being extended, but it’s not a certainty… President Joe Biden’s selection of the next Federal Reserve chair is likely to be a choice between keeping the current chief, who enjoys broad support in markets and among lawmakers from both parties, or replacing him with one of his well-regarded colleagues, the Wall Street Journal reports, echoing others on the matter. Chairman Jerome Powell, whose term expires in February, is viewed by some inside and many outside the administration as the front-runner for the job. But if Biden decides he would prefer his own pick, rather than the Republican chosen by President Trump, Fed governor Lael Brainard is the most likely candidate to succeed him.
Is the Dems’ go-it-alone $3.5 trillion human infrastructure package really a $5 trillion plan?... The real cost is $5 trillion or more, according to an independent analysis by the Committee for a Responsible Federal Budget. Assuming the major provisions will be made permanent and continue through the 10-year budget window, the group says, the “policies under consideration could cost between $5 trillion and $5.5 trillion over a decade.”
The budget-resolution fact sheet Democrats circulated last week, a Wall Street Journal commentary notes, “includes only a bare-bones description of the bill’s major programs for tax credits, new entitlements, healthcare, climate and housing. Some categories include this revealing caveat: ‘The duration of each program’s enactment will be determined based on scoring and Committee input.’ That’s Washington-speak for admitting the budget will be built on phony assumptions and gimmicks. Democrats know their proposed tax hikes and dubious ‘pay-fors’ won’t come close to fully funding “every major program that President Biden has asked us for”— as Senate Majority Leader Chuck Schumer (D-N.Y.) claimed.
Democrats’ plan “is to include every program but start small and pretend they’re temporary. This will let them skirt the budget-reconciliation rule that spending can’t add to the deficit outside a 10-year budget window without triggering a 60-vote threshold to pass,” the WSJ adds.
Vilsack: More aid coming... When USDA Secretary Tom Vilsack on Tuesday announced up to $200 million in pandemic relief for loggers and timber haulers, he said “there is more to come” for agriculture in the weeks ahead. An additional $2.4 billion is on the USDA’s list for action this summer, including $700 million for biofuel producers and $980 million in dairy supports (a $400 million dairy donation program; approximately $580 million in Supplemental Dairy Margin Coverage for small and medium-sized dairies). The Biden administration has committed $7.3 billion to Covid aid to farmers since March.
Besides the Pandemic Assistance for Producers initiative, USDA operates a Build Back Better program to strengthen the food system. Vilsack said $6 billion is earmarked for that effort, including the $500 million offered early this month for grants, loans, and technical assistance to expand meat processing capacity. “Between these two programs, we have essentially made commitments of $13 billion,” said Vilsack during a teleconference.
USDA has said it would make funds available for contract growers, but so far it has only announced funds will be coming for poultry but not yet for hogs.
U.S. life expectancy fell sharply in 2020... Life expectancy in the U.S. fell by 1.5 years in 2020, as the Covid-19 pandemic killed hundreds of thousands and exacerbated crises in drug overdoses, homicides and some chronic diseases. Provisional data from the Centers for Disease Control and Prevention showed that American life expectancy dropped to 77.3 years in 2020, roughly the same level as in 2003, erasing years of hard-won gains in the nation’s public health. It was the largest single-year decline recorded since 1943.