Evening Report | June 30, 2022

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USDA boosts corn acres, sharply cuts soybeans… U.S. farmers planted more corn than they’d initially planned earlier this spring while scaling back soybean acres more than expected, based on USDA’s Acreage Report today. USDA estimated 2022 U.S. corn plantings at 89.921 million ac., up from 89.49 million ac. in the agency’s March Prospective Plantings Report and above the average analyst projection of about 89.861 million ac. This year’s estimated plantings are still down about 3.44 million ac. from 2021. USDA lowered its estimate for U.S. soybean plantings from 90.966 million ac. in March to 88.325 million, far under trade expectations averaging 90.446 million. Estimated all U.S. wheat plantings were lowered to 47.092 million ac. from 47.351 million ac. in March, slightly above expectations.

USDA also noted that as of June 1, there were still 4.027 million ac. of corn left to plant, compared to 2.175 million on the same date in 2021. There were still 15.806 million soybean ac. left to plant as of June 1, up from 9.836 million a year earlier.

 

Grain futures nosedive following USDA reports… USDA’s higher than expected acreage figure sent December corn futures down 34 cents to $6.19 3/4, the most-active contract’s lowest closing price since $6.12 on March 3. USDA’s quarterly Grain Stocks number for corn also topped expectations. November soybeans dropped 20 1/4 cents to $14.58 as higher than expected quarterly stockpiles and sharp declines in corn outweighed unexpectedly low U.S. plantings. Winter wheat futures sank near four-month lows.

 

First cargo ship leaves Ukraine port after months-long blockade… A first cargo ship has left the Russian-occupied Ukrainian port of Berdyansk, a local official said today, after Russia said the port had been de-mined and was ready to resume grain shipments. “After a stoppage of several months the first cargo ship has left the Berdyansk port,” Yevgeny Balitsky, a Russian-installed official in Russian-occupied areas of Ukraine's Zaporizhzhia region, wrote on the Telegram messaging service, according to Reuters. Russia's TASS and RIA news agencies cited Balitsky as saying the first cargo ship to leave Berdyansk was carrying 7,000 MT of grain to “friendly countries.” But an edited Telegram post by Balitsky seen by Reuters did not say what cargo the ship was carrying. Ukraine has accused Russia of stealing grain from the territories that Russian forces have seized since its invasion began in late February. The Kremlin has denied that Russia has stolen any Ukrainian grain.

 

Americans tap the brakes on spending in May… U.S. household spending growth slowed in May amid incomes that haven’t kept up with historically high inflation. U.S. consumers boosted their seasonally adjusted spending by 0.2% in May, a slowdown from the revised 0.6% increase in April. Personal income grew by 0.5% in May, the same as April’s rate. Adjusted for inflation, after-tax income declined by 0.1% in May, showing that wage increases have been struggling to keep up with price rises. Inflation-adjusted spending declined by 0.4% in April. Core personal consumption expenditures prices, excluding food and energy, rose 4.7% from a year ago, slightly less than expected.

 

Supreme Court curbs EPA’s power to regulate emissions and fight climate change... The Supreme Court has made it more challenging for the Environmental Protection Agency to regulate greenhouse gases and fight climate change, as justices ruled today in favor of Republican-led states and coal companies that asked the court to limit how much the EPA can control emissions from power plants. The court ruled 6-3 along ideological lines that the EPA does not have the authority under the Clean Air Act to create caps for greenhouse gas emissions. The consolidated cases are known as West Virginia v. EPA.

     Chief Justice John Roberts wrote for the court’s conservatives. “Capping carbon dioxide emissions at a level that will force a nationwide transition away from the use of coal to generate electricity may be a sensible ‘solution to the crisis of the day’ " Roberts wrote, referring to a court precedent. “But it is not plausible that Congress gave EPA the authority to adopt on its own such a regulatory scheme.”

    Justice Elena Kagan, writing for the dissenters, countered: “Today, the Court strips the EPA of the power Congress gave it to respond to ‘the most pressing environmental challenge of our time,’ " referring to another precedent.

     Bottom line: The ruling delivers a blow to Democrats and environmental groups, who want the agency to crack down on emissions from power plants and other sources to mitigate climate change.

 

Biden administration can get rid of Trump’s ‘Remain in Mexico’ Policy, Supreme Court rules… The Biden administration can rescind the Trump administration’s “Remain in Mexico” policy that forced asylum seekers to stay out of the U.S. as they awaited an immigration hearing, the Supreme Court ruled Thursday, after conservative federal judges had previously thwarted the White House’s attempts to get rid of the controversial policy. The vote was 5 to 4, with Chief Justice John Roberts writing for himself and Justice Brett Kavanaugh, and the court’s three liberals, Stephen Breyer, Sonia Sotomayor and Elena Kagan. Justices Clarence Thomas, Samuel Alito Jr., Neil Gorsuch and Amy Coney Barrett dissented. The case is Biden v. Texas.

 

Romanian wheat harvest seen lower… Soft wheat production in Romania is expected to fall to 9.31 MMT next season from last year's record of 11.15 MMT due to dry weather throughout the growth cycle, Reuters reported, citing French consultancy Agritel said. Romania is among the largest grain sellers in the European Union and an active exporter to the Middle East, mainly to Egypt. The country's wheat crops suffered from dry conditions during spring seeding, cutting expected wheat yields to 4.4 from 5.21 MT per hectare in 2021, said Agritel.

 

Truckers strike in Argentina eases… An Argentine truckers strike continued today, though it eased in some key areas around the major grains hub of Rosario, helping improve the flow of grains tracks to ports, a local transport agency and grains exchanges said. The truck driver protest over high fuel prices which started last week has threatened to paralyze grains exports during a key harvest period. Argentina is the world's top exporter of process soyoil and meal and the No. 2 for corn. Truck numbers entering ports, however, rose about 70% today versus a day earlier to over 1,500, though below normal average levels, according to the Rosario grains exchange as protesters allowed more grains cargoes to pass.

 

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