Evening Report | Sept. 23, 2021

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Drought worsens across winter wheat country… Warm, dry weather pushed crop maturation and harvesting across much of the country the week ended Sept. 21, though rain had moved into some areas of the Midwest that had been experiencing dryness or drought as of the cutoff date. Rains for the Upper Midwest and eastern areas of the High Plains likely arrived too late to benefit summer crops. And reduced topsoil moisture for newly planted winter grain is concerning, according to today’s National Drought Monitor. “Some of the most significant short-term dryness, aggravated by late-season heat, existed across the Southern Plains,” the summary report says.

Remnants of Hurricane Nicholas continued to produce heavy rains to the south, but that contrasted notably with rapidly developing dryness and moderate to extreme drought in Arkansas, Oklahoma and Texas. “Broad deterioration of up to one category was observed across the driest areas,” today’s update said, adding that Tulsa, Oklahoma is one of the driest areas.

Today’s update shows 79% of Oklahoma is now impacted by abnormal dryness or drought, a 25-point surge from the week prior. In Texas, dryness/drought coverage jumped 12 percentage points with 31% of the Lone Star State now affected. In Kansas, the U.S.’s top winter wheat producing state, drought coverage rose four percentage points, with 40% of the state now affected.

Drought also intensified in some Midwest states, including parts of Missouri, northern Illinois, southern Wisconsin and the lower Great Lakes region. Find related maps here.

IGC boosts global corn crop forecast for 2021-22… The International Grains Council (IGC) raised its global total grains production forecast for 2021-22 by 5 MMT to 2.289 billion MT, as larger-than-expected corn and sorghum harvests more than made up for cuts to its wheat, barley and oats production outlooks. That paired with a boost in beginning stocks and unchanged consumption raised its global ending stocks forecast by 10 MMT to 599 MMT.

IGC shaved 1 MMT off its wheat production outlook for 2021-22, but it also boosted its trade forecast by 2 MMT. Global wheat carryover will likely total 277 MMT in 2021-22, forecasts IGC, down 1 MMT from what it projected last month and 2 MMT below its 2020-21 carryover stocks estimate.

The global corn crop will likely total 1.209 billion MT in 2021-22, a 7-MMT month-to-month increase and an 82-MMT jump from 2020-21, according to IGC. Its trade and consumption forecasts held steady and a rise in carry-in stocks pushed its 2021-22 ending stocks projection 12 MMT higher from its forecast last month to 282 MMT. A strong year-over-year jump in consumption helped limit the increase in ending stocks from 2020-21 to just 8 MMT.

On soybeans, IGC expects bigger crops out of the U.S. and Brazil to underpin record production, which the council continues to estimate at 380 MMT. That would be an 18-MMT (5%) year-over-year increase. IGC also stuck with its total use and trade outlooks for the oilseed, with the result being it still expects ending stocks of 57 MMT for 2021-22, up just 3 MMT from 2020-21.

IHS Markit adds to already record soybean crop forecast for Brazil… IHS Markit (formerly IEG Vantage) expects Brazil to produce a 145 MMT soybean crop in the 2021-22 growing season that is just kicking off, according to a report from Reuters. That’s a 1-MMT increase from its previous forecast.

IHS Markit expects the country’s full-season corn crop to total 29.5 MMT, which would be a 4.6-MMT year-over-year increase.

Indian monsoon expected to finish strong… India’s monsoon rains picked up in September, and robust rains are likely through month’s end, Mrutyunjay Mohapatra, director general of the India Meteorological Department (IMD), told Reuters. The rainy season got off to a quick and strong start, with June rains topping the long-term average by 10%, but rainfall during July and August was down 7% and 24% from the average, respectively. So far this month, rains are running 29% above average, according to IMD. The monsoon is unlikely to start withdrawing from the country until October, Mohapatra indicated. IMD still expects normal rainfall of somewhere between 96% and 104% of the 50-year average accumulation of roughly 34 inches during the four-month rainy season.

Framework deal announced to pay for human infrastructure measure, but details lacking… Senate Majority Leader Chuck Schumer (D-N.Y.) this morning announced the Senate, House and White House have reached a deal on a “framework” to pay for the massive human infrastructure spending package they hope to pass this fall under budget reconciliation.

“The White House, the House and the Senate have reached an agreement on a framework that will pay for any final negotiated agreement. So the revenue side of this, we have an agreement on,” Schumer announced at a joint press conference with House Speaker Nancy Pelosi (D-Calif.) and Treasury Secretary Janet Yellen.

Schumer described the framework agreement as a “menu of options” to pay for the eventual human infrastructure bill. He also said negotiators still need to determine how high the package price tag should go.

The Hill reports some Democrats were caught off guard by the deal, noting “several Democrats — including key votes, members of leadership and senators on the panel responsible for coming up with the bill's funding sources — said they hadn't yet seen the framework and didn't know what's in it.” That list includes Senate Budget Committee Chairman Bernie Sanders (I-Vt.) and Dick Durbin (D-Ill.), the Senate’s No. 2 Democrat.

Linkage requirements for payments received under WHIP+ and/or QLA… If you received a payment under the Wildfires and Hurricanes Indemnity Program+ (WHIP+) or the Quality Loss Adjustment Program (QLA) for crop production and/or quality losses occurring in the 2018, 2019, or 2020 crop years, you are required to meet linkage requirements by obtaining federal crop insurance or Non-Insured Crop Disaster Assistance Program (NAP) coverage at the 60/100 level or higher, for both the 2022 and 2023 crop years.

When applying for WHIP+ or QLA, form FSA-895 (Crop Insurance and/or NAP Coverage Agreement) was submitted acknowledging the requirement to obtain federal crop insurance, if available, or NAP coverage if federal crop insurance is not available. The coverage requirement is applicable to the physical location county of the crop that received WHIP+ and/or QLA benefits.

Failure to obtain the applicable coverage by the sales/application closing date will result in the required refund of WHIP+ benefits received on the applicable crop, plus interest. If you receive WHIP+ payments on small grains, your deadline is fast approaching: Sept. 30, 2021.

Vilsack comments about ASF in Haiti, Dominican Republic... Ag Secretary Tom Vilsack at an event earlier this week was asked to comment on the trade implications for pork of the discovery of African swine fever in Haiti after its earlier detection in the neighboring Dominican Republic. “There's no state in the country that has more at stake,” Vilsack said of Iowa, where he previously served as governor, adding he was “very sensitive” to the issue. In terms of trade, he said USDA “will continue to underscore the importance of our international trading partners understanding and appreciating the regional nature of particular diseases and particular challenges.”

Vilsack predicted that efforts to ink regionalization strategies, which allow the continued flow of exports from areas of the country free of ASF, including protection zones for imports, will help minimize any impacts of an ASF discovery in the U.S. and hopefully prevent its spread there in the first place. The message to trade partners, he explained, is: “We're doing everything we possibly can to ensure that it doesn't get into the U.S. and therefore you can be comfortable continuing to import products from the U.S.”

Near-term keys to USDA’s strategy on ASF, Vilsack said, are “investing additional resources through APHIS to harden our system here in the U.S. from African swine fever, to do an even better job of surveillance, of making sure that we have folks at the border to understand and appreciate what they need to be looking for.” In the event the disease does reach the U.S., USDA aims to identify and respond quickly so “we're able to quarantine quickly, we're able to eradicate quickly, and we’re able to contain the damage.”

USDA will be proposing additional investment in ASF prevention and response, Vilsack told the gathering. In the meantime, he said the department is working closely with the Dominican Republic and Haiti which lack many of the resources needed to respond to the ASF outbreaks. Vilsack also remarked, “we don't know how extensive the situation is in Haiti, but our theory and our belief is it's more widespread than perhaps we know today.”

On a positive note, Vilsack said investments in research and development on an ASF vaccine might soon yield results. “We've had some pretty good news recently in terms of the possibility of a vaccine that might work, at least against the Asian variety of African swine fever,” he noted.

Vilsack was also on AgriTalk this week, discussing the Biden administration's recently announced plans to protect workers and communities from extreme heat, his G-20 visit to Italy, President Joe Biden's tax plan and support for biofuels and more. Listen here.

A majority of Americans disapprove of President Biden for the first time in his presidency… According to a Gallup poll released Wednesday, Biden’s approval rating is 43% — the lowest to date — while 53% of Americans disapprove of his job as president. The poll was conducted from Sept. 1 to Sept. 17, after the botched Afghanistan withdrawal and as the Delta variant was continuing to surge. Biden’s approval has slid six percentage points since August, when he had a 49% approval rating and a 48% disapproval rating. A Quinnipiac University poll released last week found 42% of participants approved of Biden's overall performance, with his approval on foreign policy dropping significantly.

The White House has generally dismissed the numbers. Biden’s approval rating is seven percentage points higher than former President Donald Trump’s was at the same time in his first term, according to a FiveThirtyEight average.