Evening Report | July 22, 2021

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Spotty Midwest drought improvement, spring wheat areas still baking… Today’s U.S. Drought Monitor reflected spotty drought improvement across Kansas, southern South Dakota, central and northeast Iowa and into south-central Wisconsin and northern Michigan for the week ended July 20. Nebraska saw mix of drought improvement and drought degradation. Drought worsened from the Pacific Northwest to central and northern Minnesota.

“Active weather prevailed across much of the South, East, and Midwest, as well as parts of the Plains, into the middle of July, followed by a southward shift in widespread shower activity,” today’s report noted. Limited drought improvement in the western Corn Belt speaks to existing dryness. Heavy rain stretched from southern Missouri to northern Ohio with secondary showers extending from Iowa and southeast Minnesota to Michigan, today’s summary report says.

Today’s update also says, “little or no rain fell in California, the Great Basin, and the Northwest, where dozens of wildfires were in various stages of containment. … Dry weather extended eastward across the nation’s northern tier as far east as Lake Superior, while heavy rain eased or eradicated drought in the remainder of the Great Lakes region, along with the Northeast.”

The summary says that in the driest northern and western areas of the U.S., the drought’s impact on water supplies, rangeland, pastures and crops was amplified by ongoing heat. In contrast, temperatures were near to a bit below normal for the Plains, Midwest and South the week ending July 20.

Nearly 100% of North Dakota, South Dakota, Wyoming and Minnesota are impacted by abnormal dryness or (primarily) drought. Dryness/drought coverage in Iowa eased a percentage point to 70%. Nebraska is close behind with roughly 68% of the state impacted by abnormal dryness or drought. Click here for related maps.

Strategie Grains cuts French soft wheat crop forecast after disappointing tour findings… The consultancy Strategie Grains cut its French soft wheat crop estimate to a range of 37.0 MMT to 37.5 MMT, which compares to a 38 MMT crop forecast last week. The cut came after a crop tour revealed lower-than-expected yields in the country’s top-producing north and northeast, along with disappointing crop quality. The consultancy’s crop peg now aligns with that of the French farm ministry; it pegged the crop at 37.1 MMT last week. The slightly smaller crop estimate would still represent a major rebound from last year’s 29 MMT crop.

Strategie Grains Crop Analyst Vincent Braak told Reuters that Hagberg falling numbers and crop weights are likely to fall, but protein levels are less of a concern.

Kazakhstan to suspend or limit exports of feed products… As rumored earlier this week, Kazakhstan’s ag ministry announced it would suspend exports of feed products like hay, haylage, silage, oats and rye beginning mid-August, with the suspension to remain in effect for six months. The country also plans to limit exports of soft wheat (Grade 5), barley and soymeal/cake for half a year, beginning mid-August. Kazakhstan is dealing with feed shortages caused by drought.

Cold Storage report signals strong demand for beef… There were 398.66 million lbs. of beef in cold storage around the U.S. as of June 30, which was an 18.02-million-lb. (4.3%) retreat for the month versus the usual 400,000-lb. increase for the period, USDA’s monthly Cold Storage Report showed. Frozen beef stocks were also 30.64 million lbs. (7.1%) lighter than year-ago. The data signals strong domestic and export demand as the world emerges from a year-long pandemic.

Pork stocks dropped 20.30 million lbs. (4.4%) from May 31 to the end of June, which was a bit lighter drawdown than the usual 27.60-million-lb. slide in stocks for the timeframe. But overall stocks are also 3.9% tighter than year’s 460.17 million pounds.

June 30 poultry stocks of 1.15 billion lbs. were up 2.1% for the month but down 15.0% from last year. Chicken breast meat stocks ended June at 195.13 million lbs., which was 4.5% under May 31 levels and 9.2% lighter than last year’s record.

Big jump in weekly jobless claims… Jobless claims rose to 419,000 last week the Labor Department reported. Analysts had expected the weekly report to show roughly 350,000 in new jobless claims. The total was the highest weekly count since May 15.

Biden administration to provide $300 million to coal-dependent communities... The Biden administration will send $300 million in funds to coal-dependent communities utilizing aid from two different areas. The Commerce Department will administer the funds through its Economic Development Administration (EDA) from the Covid aid package approved in March and other funds.

The aid announcement was in part targeted at trying to convince Senator Joe Manchin (D-W.Va.)  to vote in favor of the go-it-alone reconciliation package that Democrats want to use for the $3.5-trillion social infrastructure package that needs all 50 Democratic votes in the Senate.

Senate Judiciary examines ag worker/immigration; Vilsack challenged by Republicans… The Senate Judiciary Committee held a hearing on a contentious issue Wednesday — addressing immigration issues as it relates to the U.S. agricultural worker situation. Focus was the Farm Workforce Modernization Act (FWMA), which is aimed at addressing worker shortages in the agricultural industry that typically are met by the use of H-2A visas. The FWMA would provide five-year visas to undocumented farm workers who meet specific eligibility criteria and provides a pathway to permanent legal status. It would also reform the H-2A visa program to allow dairies and livestock producers to use the program. Some are suggesting Democrats could use the reconciliation process to address immigration, eyeing ways to potentially create pathways to citizenship for certain categories of undocumented immigrants. But that will hinge on whether the Senate parliamentarian allows such provisions to be included. Neither lawmakers nor Ag Secretary Tom Vilsack minced words during the contentious hearing. The main takeaway is that there was certainly no major bipartisan consensus on the topic. Read more here.