Evening Report | June 15, 2021

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China to auction off a small amount of corn, seeking to cool domestic prices and curb speculation… China’s state stockpiler Sinograin will auction off 37,126 MT of imported corn from Ukraine on June 18. This is the first such state auction for the country in several years, and Sinograin says the move is meant to replenish tightening supplies and cool high domestic prices for corn. Chinese corn prices hit a record high 2,887 yuan ($451) per metric ton last month.

The tonnage represents just a fraction of the 11.3 MMT of corn China imported in 2020. Some traders within the country said the auction was primarily a warning to the market not to speculate on ag products. China has been actively working to curb speculation and to control its supply of major commodities.

 

NOPA crush once again comes in lighter than expected… Members of the National Oilseed Processors Association (NOPA) say they crushed 163.52 million bu. of soybeans during May, marking the fourth month in a row that processing has fallen short of expectations. Analysts surveyed by Reuters expected NOPA members to report May crush of 165.12 million bushels. Nevertheless, the tally the third largest May crush on record and processing was up 3.21 million bu. (2%) from April. Last month’s crush was 6.06 million bu. (3.6%) short of May 2020. Some plants were still closed for maintenance during May, plus soybean stocks are tight and prices were at eight-year highs.

Soyoil stocks ended May at 1.67 billion lbs., which was 42 million lbs. lighter than analysts anticipated given the smaller-than-expected crush. Stocks retreated 31 million lbs. from April and they were 209 million lbs. lighter than year-ago.

Soymeal exports climbed to 714,377 MT last month, an improvement from April’s poor showing but still shy of the 776,677 MT of soymeal NOPA members shipped in May 2020.

 

Anec adds to its Brazilian soybean export forecast for June… Brazil will likely export 11.50 MMT of soybeans this month, the association of grain exporters ANEC forecast. That’s a 500,000-MT increase from its forecast last week but would be down from 15 MMT shipped in May. The group also expects Brazil to export 2.13 MMT of soymeal this month, which is up 170,000 MT from its forecast last week.

 

Late safrinha corn harvest presents challenges for Brazilian producers… Because Brazil’s safrinha corn crop was planted late, harvest of the crop will extend into August. South American Crop Consultant Dr. Micheal Cordonnier warns this could cause two problems for farmers: “The first potential problem is the heightened risk of fires during the peak of the dry season.  The risk comes from combine fires and fires that could move into a corn field from adjacent areas… The second concern is the short period of time between the end of the corn harvest and the planting of the 2021-22 soybean crop.  The delayed harvest means less time for tillage work and soil management practices before soybean planting is allowed starting Sept. 15.”

 

White House officials told House Democrats Tuesday to get ready to go it alone on infrastructure… This sets the stage for party leaders to tap an obscure budget procedure to move President Joe Biden's top domestic priority without Republican support. If the two parties cannot come together to find a solution on this issue that enjoys bipartisan support, it seems highly unlikely they will be able to work together on much else.

 

Vilsack says he backs proposal for USDA investigator to examine meatpacking competition… U.S. Agriculture Secretary Tom Vilsack said he backs a proposal by three senators to appoint a special USDA investigator to examine competition in the meatpacking industry. Senators Jon Tester (D-Mont.) Chuck Grassley (R-Iowa) and Mike Rounds (R-S.D.) last week introduced legislation to create a special investigator for competition matters within the USDA’s Packers and Stockyards Division, which enforces a 1921 law to protect farmers and ranchers against unfair practices in livestock market.

“It’s a good proposal. It’s part of what needs to be done,” Vilsack said in response to a question on the legislation from Tester during testimony to a Senate subcommittee. The legislation would give the special prosecutor subpoena power and an investigative staff.

The Biden administration announced Friday it is moving to strengthen U.S. regulatory protections for livestock and poultry producers in their dealings with meatpackers. The Justice Department launched an antitrust investigation of meatpackers last year.

 

Next Covid farm aid round to include $700 million for biofuels… The Biden administration plans to provide $700 million in aid for biofuel producers in a new round of pandemic relief that also targets timber haulers, dairy farmers and food suppliers that purchased masks, gloves and other gear for workers. “This is a next step in expanding the process of pandemic assistance,” Vilsack said during a telephone interview with Bloomberg. “It’s not the end. There will probably be additional announcements over the next couple of months.”

USDA announced the aid Tuesday amid reports the administration is considering ways to give relief to oil refiners on requirements they mix ethanol and other biofuels with fuel, a step fought by groups representing Midwestern farmers. Vilsack declined to comment on the reports, citing the Environmental Protection Agency’s jurisdiction over the program.

Vilsack said the new round of aid is targeted at producers who didn’t benefit or weren’t adequately covered in prior rounds. That includes $200 million for timber harvesters and haulers, approximately $1 billion for dairy producers and $700 million in grants to assist with the cost of PPE and other measures to help meatpackers, specialty-crop growers and seafood-industry workers. “For some, it may make the difference whether or not they can make that bank payment at the end of the year,” Vilsack said.

The aid comes from funding earmarked for agricultural producers in the $1.9 trillion Biden Covid-19 relief package Congress passed in March. Details follow.

  • $200 million: Small, family-owned timber harvesting and hauling businesses.
  • $700 million: Biofuels producers.
  • Support for dairy farmers and processors:
    • $400 million: The new Dairy Donation Program to address food insecurity and mitigate food waste and loss.
    • Additional pandemic payments targeted to dairy farmers that have demonstrated losses that have not been covered by previous pandemic assistance.
    • Approximately $580 million: Supplemental Dairy Margin Coverage for small and medium farms.
  • Assistance for poultry and livestock producers left out of previous rounds of pandemic assistance:
    • Contract growers of poultry.
    • Livestock and poultry producers forced to euthanize animals during the pandemic (March 1, 2020, through Dec. 26, 2020).
  • $700 million: Pandemic Response and Safety Grants for PPE and other protective measures to help specialty crop growers, meat packers and processors, seafood industry workers, among others. Large meatpacking companies won’t be eligible for the PPE grants.
  • Up to $20 million: Additional organic cost share assistance, including for producers who are transitioning to organic.

 

USDA expands CLEAR30 pilot nationwide… USDA announced today it will expand the Clean Lakes, Estuaries, And Rivers initiative, called CLEAR30, from a pilot program to a nationwide program. Landowners and agricultural producers currently enrolled in the Conservation Reserve Program (CRP) will now have a wider opportunity to enroll in a 30-year contract via CLEAR30. “Eligible producers must have certain water quality benefitting practices currently enrolled under continuous CRP or through the Conservation Reserve Enhancement Program (CREP), under contracts that are expiring on Sept. 30, 2021,” USDA said in a release. Those interested in enrolling should do so by Aug. 6, 2021.

The program provides incentives to those enrolled who make 30-year commitments to water quality practices on CRP land. Previously, the pilot was only available in the Great Lakes and Chesapeake Bay water sheds. “Annual rental payments for landowners who enroll in CLEAR30 will be equal to the current Continuous CRP annual payment rate plus a 20% water quality incentive and annual rate adjustment of 27.5%,” USDA details. Learn more.

 

Today is paperwork deadline for new cover crop insurance premium benefit… Today is the deadline for producers to file a report of acreage form (FSA-578) for cover crops with the Farm Service Agency to qualify for the new federal Pandemic Cover Crop Program. Eligible producers must have planted cover crops and purchased crop insurance during the 2021 crop year.

 

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