Evening Report | September 7, 2021

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Corn crop ratings drop a point… As of Sunday, USDA rated 59% of the U.S. corn crop as “good” to “excellent,” down a point from the previous week. Traders expected corn ratings to remain 60% “good” to “excellent.” It continued to rate 14% of the crop as “poor” to “very poor.”

The portion of crop dented jumped 15 points to 74%, five points ahead of the five-year average. USDA said 21% of the crop was mature, a 12-point advance on the week and two points ahead of average.

Soybean conditions improve a point… USDA raised its “good” to “excellent” soybean rating by a point to 57%, which was in line with traders’ expectations. The amount of crop rated “poor” to “very poor” dropped a point to 14%.

The portion of crop dropping leaves doubled from the previous week to 18%, which was three points more advance than normal for the first week of September.

Cotton ratings drop notably… USDA’s “good” to “excellent” rating for the cotton crop plunged nine points to 61%. The amount of crop rated “poor” to “very poor” increased a point to 7%.

USDA indicated bolls were open on 29% of the crop, an eight-point increase from the previous week but five point below the five-year average for this point in the growing season.

Spring wheat harvest just about wrapped up… The U.S. spring wheat harvest advance seven points to 95% done as of Sunday, 12 points ahead of the five-year average. Harvest is completed in South Dakota and Minnesota. Top producing North Dakota has cut 94% of its spring wheat crop, 13 points ahead of average for the first week in September.

Vilsack: No major disruptions to grain shipments via Ida... The U.S. will likely avoid major disruptions to grain shipments linked to damage from Hurricane Ida at the Gulf Coast, USDA Secretary Tom Vilsack said today. "I understand that while there's going to be some disruption, it's not going to be so critical as to significantly curtail our capacity to export," he told reporters on an unrelated call. "At this point, I am fairly convinced we are not going to see major disruptions to our exports."

USDA to provide Covid aid to farm, slaughter, grocery workers… Vilsack announced today that USDA will make $600 payments to farmworker and meatpacking workers to help with pandemic-related health and safety costs. The $700 million in competitive funding will be available through the new Farm and Food Workers Relief (FFWR) grant program. The money will be distributed by nonprofit and labor group-related entities that can prove they can reach the workers. It may take as long as one or two years to reach everyone who deserves the payments, Vilsack said in a call to reporters. The workers will not have to show receipts to prove they are entitled to the aid. Vilsack said that the number of workers affected by the pandemic is “sobering.” He could not say whether undocumented workers can get the payments, because there are legal issues that have to be resolved. But he said personally he believes that as many workers should be helped as possible.

There is no requirement in terms of vaccination status, Vilsack said.

Additionally, to recognize the essential role and costs borne by front-line grocery workers, $20 million of this amount has been set aside for at least one pilot program to support grocery workers, and to test options for reaching them in the future. That program is not large enough to cover all grocery workers, but Vilsack said he hopes Congress will provide more money that could be used to aid other food production workers and grocery store workers.

Vilsack said he plans another announcement of $700 million in grants for producers, farmers and others, including seafood processors. Click here for more.

White House wants extra funding for disaster relief, resettlement of Afghan refugees… The White House will ask Congress to include an additional $20 billion-plus as part of an upcoming continuing resolution (CR) to keep the federal government open beyond the end of September, Acting OMB Director Shalanda Young said Tuesday in a blog post. Of that request, $14 billion will go toward disaster relief, and another $6.4 billion will cover resettlement costs for tens of thousands of Afghan refugees. Most of that resettlement money would be directed toward the State and Defense departments. There will be additional “anomaly” funding requests as part of the CR.

Congress has already approved more than $1.1 billion for Afghan resettlement as part of a recent Capitol security bill. But with thousands of Afghans currently being housed on military bases inside the U.S. and overseas, the cost for this effort will mount.

OMB is estimating it will cost at least $10 billion more for the federal government to respond to the damage from Hurricane Ida in Louisiana and the Northeast, but that is not included in the coming request. Administration officials said they hope “Congress addresses Ida’s needs in the CR.”

Wonder what this means?... A plane belonging to Sen. Joe Manchin (D-W.Va.) landed in Lexington, Ky., today. It was expected to return to West Virginia this afternoon. Washington rumors are rampant that this COULD mean a possible switch of political parties for the centrist Democrat, but such predictions have proven false in the past.

Brazilian full-season corn planting underway, soybean planting to start mid-month… As of Sept. 4, Brazilian farmers had planted 10% of their full-season corn, according to AgRural, down from 14% on that date last year. AgRural expects full-season corn plantings in the center-south region of the country to increase only 0.6% versus year-ago, despite a shortage of supplies and high domestic prices.

Brazil’s ag ministry published the dates for the 2021-22 growing season when farmers in various states may start planting soybeans and when they must finish. The soybean seeding window runs from Sept. 13 to Jan. 31, 2022 in Parana, Rio Grande do Sul and Santa Catarina; Sept. 16 through Feb. 3 in Mato Grosso, Mato Grosso do Sul and Sao Paulo; Sept. 25 through Feb. 12 in Goias and Minas Gerais; and Oct. 1 through Feb. 18 in Bahia, Tocantins and Piaui (southern zone). These dates were established to help control soybean rust from one growing season to the next. If farmers violate these dates and are caught, they can face fines and are not eligible for government programs. 

Kansas City Southern is taking a new look at $27 billion offer from Canadian Pacific... A larger deal with Canadian National was thrown into doubt after intervention by a U.S. regulator. The Surface Transportation Board ruled that a “voting trust” proposed by Canadian National in its bid for Kansas City Southern could not be used. The board of the railroad, which is headquartered in Kansas City, Missouri and runs between that city and Mexico, said on Saturday that Canadian Pacific’s offer “could reasonably be expected to lead to” a “superior” offer than the one Canadian National made in May to buy the railroad for $30 billion. Kansas City Southern said it would open its books to Canadian Pacific, but that the move would not necessarily lead to a deal.

If Canadian National acquires Kansas City Southern, the railroad would be the third largest on the continent. A tie-up with Canadian Pacific would still be the smallest of the six remaining big rail operators. Canadian Pacific chief executive Keith Creel said a deal between his railroad and Kansas City Southern was “the only truly end-to-end Class 1 merger that preserves and enhances competition. It is the perfect combination… for the rail industry and for commerce in North America.”

Canadian Pacific previously offered to pay $275 per share in stock and cash for the railroad but has raised that to $300 per share. Kansas City Southern stockholders are scheduled to meet Sept. 24 to consider the next steps.