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NWS: Warm, dry finishing weather in western Corn Belt... The 30-day forecast from the National Weather Service (NWS) indicates increased chances of above-normal temperatures across most of the U.S. aside from far northern areas of the Corn Belt and Northern Plains, along with most of the PNW during September. The hottest temps are expected to be west of major crop areas, centered over the Rocky Mountains. A bubble of below-normal rainfall is forecast for most of the Plains and western Corn Belt during September, while the eastern Corn Belt has “equal chances” for above-, below- and normal rainfall next month. The 90-day outlook for September through November is much the same.
The Seasonal Drought outlook calls for drought to persist or develop across much of the Central and Southern Plains and Mid-South through November.
Click here to view the extended forecast maps and here for the drought outlook.
Record July NOPA soybean crush... Members of the National Oilseed Processors Association (NOPA) crushed 182.9 million bu. of soybeans in July, slightly more than the 182.4 million bu. analysts expected. The crush pace increased 7.3 million bu. (4.1%) from June and topped last year’s record by 9.6 million bu. (5.5%).
NOPA data implies a full U.S. crush of 191.0 million bu. for July. At that level, crush would top USDA’s forecast of 2.290 billion bu. by about 10 million bu., so our forecast is 2.300 billion bushels.
Soyoil stocks fell to a seven-month low of 1.499 billion lbs., down 123 million lbs. from June and 28 million lbs. less than last year.
IGC raises global corn production forecast, cuts wheat crop... The International Grains Council (IGC) raised is 2024-25 global corn production forecast by 1 MMT to 1.226 billion MT. Corn production is now expected to rise 3 MMT (0.2%) from last year. IGC raised its U.S. corn production forecast 5.5 MMT, which was partially offset by reductions for Russia and Romania.
IGC cut its global wheat crop estimate by 2 MMT to 799 MMT on a downward revision to France’s crop. Global wheat production is still expected to increase 5 MMT (0.6%) from last year.
IGC raised the global soybean production forecast to 419 MMT, up 4 MMT from last month due mostly to a bigger U.S. crop. Global soybean production is expected to jump 27 MMT (6.9%) above last year’s record.
Southern Ag Today: If it’s not time to hit the panic button, we are getting close... A Southern Ag Today article raises significant concerns about the current state of the agricultural economy in the U.S., particularly in relation to the upcoming farm bill. The article was written by Dr. Joe Outlaw, Professor and Extension Economist Co-Director Agricultural & Food Policy Center at Texas A&M University, Dr. Bart Fischer, Research Assistant Professor Co-Director Agricultural & Food Policy Center at Texas A&M University, and Natalie Graff, Research Assistant Professor.
Summary of the article:
• Need for a new farm bill: Over the past three years, there has been a growing need for a new farm bill that offers enhanced support to the agricultural sector. This need has become more urgent due to declining market prices.
• Current economic pressures: USDA’s price projections indicate that some crops are being sold below their average cost of production. Despite a decrease in some input costs from their 2022 highs, commodity prices have fallen even more sharply, creating financial pressure on farmers.
• Farmers holding crops: Some producers are holding onto their 2023 crops, reluctant to sell at a loss. However, with the 2024 harvest approaching, they face the prospect of two consecutive years without profit, exacerbating financial strain.
• Rising loan delinquencies: Reports from Federal Reserve banks indicate an increase in loan delinquencies among farmers, a worrying sign of the broader financial challenges facing the sector.
• Urgent need for legislative action: The article argues that if Congress fails to pass a new farm bill this year, there will be strong demands for immediate financial assistance to farmers, like the large-scale aid provided during the 2020 pandemic. Even if a new farm bill is passed, it won’t take effect until the 2025 crop year, which could lead to a gap in support.
• Market dynamics: The steady decline in commodity prices, despite decreasing input costs, suggests that market dynamics are unfavorable for farmers, pushing many towards financial instability.
• Legislative implications: The timing of the farm bill is critical. If delayed, it could lead to political pressure for short-term financial interventions, which are often less efficient, and more reactionary compared to a well-structured farm bill.
• Economic impact: The increase in loan delinquencies highlights the vulnerability of the agricultural sector. This could have broader economic implications, particularly in rural areas where agriculture plays a central role in the economy.
Bottom line: The article underscores the urgency for legislative action to support the agricultural sector. Without a new farm bill or some form of financial relief, farmers could face significant economic hardship, potentially leading to broader economic and political consequences.
Rural economic index continues to slump... For a 12th straight month, the Rural Mainstreet Index (RMI) sank below growth-neutral, according to the August survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy. The region’s overall reading for August sank to 40.9 from 41.3 in July -- the lowest reading since November of last year. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral.
Farming and ranching land prices: For the third time in the past four months, farmland prices sank. The region’s farmland index fell to 45.5 from July’s 52.2. Only 9% of bank CEOs reported farmland prices increased from July levels.
Farm equipment sales: The farm equipment sales index for August slumped to 16.7, its lowest since January 2017, and down from July’s 19.0. This is the 13th straight month the index has fallen below growth-neutral. Higher borrowing costs, tighter credit conditions and weak grain prices are having a negative impact on the purchases of farm equipment.
Despite falling farm commodity prices and farm income, bankers, on average, report loan delinquency rates had increased by only 1% over the past six months.
Bankers were asked to identify the greatest threat to regional banking operations over the next 12 months. Approximately 61% named falling farm commodity prices; 18% identified the Fed’s too high interest rates; 8% reported rising regulatory costs; 6% named low loan demand; and the remaining 8% identified other factors.
Confidence: Rural bankers remain very pessimistic about economic growth for their area over the next six months. The August confidence index slumped to 27.3 from 28.3 in July.
Russia to extend export duties on sunflowers, soybeans... A Russian government commission has approved the extension of current export duties on sunflowers and soybeans through August 2026, Interfax news agency reported, citing the Russian economy ministry. The sunflower export duty stands at 50% but no less than 32,000 rubles per metric ton, and the soybeans duty rate at 20% but no less than $100 per metric ton. The commission also reportedly extended “floating” duty rates on the export of sunflower oil and sunflower meal. It will lift the ban on rapeseed exports and impose a duty of 30% but no less than 165 euros per metric ton. The duty will be effective from Sept. 1, 2024 through Aug. 31, 2026.