Check our advice monitor on ProFarmer.com for updates to our marketing plan.
Corn producers: Increase 2023-crop sales... Corn futures are eroding technically and showing no signs of finding a bottom. With August being a historically bearish month and time winding down to finish old-crop sales, we advise hedgers and cash-only marketers to sell another 10% of 2023-crop in the cash market to get to 70% sold.
Soy crush smaller than expected in June... U.S. processors crushed 183.7 million bu. of soybeans during June, 1.1 million bu. less than analysts on average expected. The crush pace slowed 8.1 million bu. (4.2%) from May but was 9.1 million bu. (5.2%) above last year.
Through the first 10 months of 2023-24, soybean crush totaled 1.926 billion bu., 3.7% above the same period last year. To reach USDA’s forecast of 2.290 billion bu., crush must run 2.8% above last year during the final two months. Our forecast is 2.300 billion bu., 10 million bu. above USDA’s.
Corn ethanol use drops more than expected in June... Corn-for-ethanol use totaled 442.3 million bu. during June, falling shy of the average pre-report estimate of 450.0 million bushels. Corn ethanol use fell 13.1 million bu. (2.9%) from May and was only marginally bigger than last year.
Through the first 10 months of 2023-24, corn-for-ethanol use 4.508 billion bu., up 229 million bu. (5.4%) from the same period last year. To reach USDA’s forecast of 5.450 billion bu., corn ethanol use must run 5.0% above year-ago over the final two months. Despite the disappointing June figure, we maintained our 2023-24 corn-for-ethanol usage forecast at 5.475 billion bushels.
Beijing calls for action to secure flood-impacted grain supplies... China’s Vice Premier Liu Guozhong urged local authorities to seek to minimize agricultural losses and ensure a robust fall grain harvest, after torrential rain and floods lashed Henan, the country’s largest wheat-growing province. Liu told authorities to take measures to promote the restoration of affected crops and guide farmers to replant land on which fall-harvested crops were destroyed. He emphasized the critical need for disaster prevention and mitigation to ensure food security.
Although the summer wheat harvest in Henan is mostly complete, hot temperatures and rainy weather have raised concerns about the quality of stored wheat.
EPA grants emergency fuel waiver to Midwest states impacted by Joliet refinery shutdown... EPA issued an emergency waiver to help alleviate fuel shortages in four states where the supply of gasoline has been impacted by the shutdown of the Exxon Mobil Refinery in Joliet, Illinois. The waiver, which applies to Michigan, Wisconsin, Indiana and Illinois, suspends federal rules requiring the sale of low Reid Vapor Pressure gasoline during the summer months. The waiver applies through Aug. 20, EPA said.
Exxon Mobil shut down the 251,800 barrel-per-day refinery in mid-July due to a power outage after a storm. Although power was restored to the refinery by July 24, it is likely to take the company at least a few weeks to restart the facility.
Will we see a new farm bill this year?... The House departed Washington last week and the Senate is currently wrapping up its business. When Congress returns in September, most of the legislative agenda prior to the presidential election will be focused on funding the government past Sept. 30. This raises the question: will we see a new farm bill this year?
Southern Ag Today says, “Only two of the last 10 farm bills were enacted during presidential election years (1996 and 2008 Farm Bills), and both of those were signed into law before Congress left town for the August recess. The remaining eight farms bill were enacted in the Congress following the presidential election, with two of those (1990 and 2018 Farm Bills) coming in the lame duck session following the midterm elections.
Following are the key issues holding up completion:
· Improving the farm safety net. As we’ve said for the last two years – and there seems to be growing agreement on this point – there is no point in doing a farm bill absent improvements to the farm safety net, namely improving the Reference Prices in the Price Loss Coverage (PLC) program and the loss thresholds in the Agriculture Risk Coverage (ARC) program. With that said, there is still disagreement on the extent of the improvements and how to pay for them.
· Commodity Credit Corporation (CCC). Discretionary use of the CCC has long been a sticking point for lawmakers, but that concern has grown dramatically over the course of the last two Administrations, where the CCC has been used to deliver tens of billions in aid to agricultural producers and, more recently, climate-smart programming. Many in Congress would like to restrict the Secretary’s use of the CCC, returning decisions about funding to Congress. Doing so would save money that could be used to offset improvements to the farm safety net. While we discussed CCC funding in detail last Fall, the Congressional Budget Office (CBO) will officially weigh in on this topic tomorrow when they release the cost estimate for the House Agriculture Committee-passed farm bill.
· Inflation Reduction Act (IRA). While there seems to be growing consensus over bringing the IRA conservation funding inside of the farm bill, there are ongoing disagreements about whether that funding should continue to be restricted to climate-smart practices. Some lawmakers would like to put those decisions – like most other conservation decisions – in the hands of local decisionmakers.
· Thrifty Food Plan (TFP). There is still considerable frustration among most Republican lawmakers over the Biden Administration’s roughly $250 billion unilateral increase to the Supplemental Nutrition Assistance Program (SNAP) via adjustments to the TFP in 2021. Similar to the discussion on the CCC, many lawmakers would like to return decisions about future increases in SNAP spending to Congress.
Southern Ag Today says, “While there are certainly disagreements, in our view, the list above is by no means insurmountable. While there is very little legislative runway prior to the election, we do think it’s possible to wrap up the farm bill during the lame duck session, perhaps as part of a supplemental... Rather than punting the farm bill into the new Congress and relying on another year of disaster assistance, Congress could choose to reauthorize the farm bill in the lame duck session – improving the farm safety net and side-stepping the need for disaster assistance – all the while keeping the farm bill out of what will already be a very crowded legislative calendar in 2025.”
U.S. manufacturing slumps in July... The Institute for Supply Management’s U.S. manufacturing purchasing managers index (PMI) dropped to 46.8 last month, the lowest reading since November. It was the 20th decline in activity during the last 21 months, underscoring the impact of high interest rates on goods demand, pressured by a fresh contraction in the level of new orders.
Another measure of factory activity, the S&P Global U.S. Manufacturing PMI. was revised slightly higher to 49.6 in July from a preliminary reading of 49.5 but was still the lowest reading so far this year and marked the first contraction since December.