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Corn conditions decline more than expected... USDA rated 65% of the corn crop as “good” to “excellent” as of Sunday, down two percentage points from last week. Analysts expected a one-point decline. The “poor” to “very poor” rating increased two points to 13%.
| This week | Last week | Year-ago |
Very poor | 5 | 4 | 6 |
Poor | 8 | 7 | 11 |
Fair | 22 | 22 | 27 |
Good | 49 | 51 | 47 |
Excellent | 16 | 16 | 9 |
USDA reported 84% of the crop was in dough stage (83% average), 46% was dented (42%) and 11% was mature (6%).
Soybean conditions slip as expected... USDA rated 67% of the soybean crop as “good” to “excellent,” down one point as analysts expected. The “poor” to “very poor” rating increased one point to 9%.
| This week | Last week | Year-ago |
Very poor | 2 | 2 | 4 |
Poor | 7 | 6 | 10 |
Fair | 24 | 24 | 28 |
Good | 54 | 54 | 48 |
Excellent | 13 | 14 | 10 |
USDA reported 89% of the crop was setting pods (88% average) and 6% was dropping leaves (4%).
Spring wheat conditions decline more than expected... USDA rated 69% of the spring wheat crop as “good” to “excellent,” down four points from last week. Analysts expected a one-point decline. The “poor” to “very poor” rating increased five points to 10%.
| This week | Last week | Year-ago |
Very poor | 3 | 1 | 4 |
Poor | 7 | 4 | 20 |
Fair | 21 | 22 | 39 |
Good | 56 | 61 | 34 |
Excellent | 13 | 12 | 3 |
USDA reported spring wheat harvest reached 51%, two points behind the five-year average.
Cotton conditions decline... USDA rated 40% of the cotton crop as “good” to “excellent,” down two points from last week. The “poor” to “very poor” rating increased two points to 28%. The Texas crop was rated 26% in the top two categories and 41% in the bottom two.
| This week | Last week | Year-ago |
Very poor | 12 | 8 | 23 |
Poor | 16 | 18 | 21 |
Fair | 32 | 32 | 23 |
Good | 34 | 35 | 28 |
Excellent | 6 | 7 | 5 |
USDA reported 89% of the crop was setting bolls (88% average) and 25% had bolls opening (23%).
USDA raises grocery price outlook, predicts ongoing increases... USDA revised its forecast for food prices in 2024 and 2025, expecting higher increases than previously predicted. For 2024, all food costs are now projected to rise 2.3%, up from 2.2% in July, with grocery prices expected to climb by 1.2%, up from 1%. Restaurant prices are forecast to rise 4.1%, down from July’s 4.3%. In 2025, grocery prices are expected to rise 1.1%, a significant increase from the 0.7% predicted in July, while overall food prices and restaurant costs remained steady.
In the new forecast, USDA said beef and pork prices would rise more than previously expected. Beef are expected to rise 5.6% this year and rise 3% in 2025. Pork is forecast to rise 1.4% this year and 1.5% next year.
Canada imposes 100% tariff on Chinese EVs, 25% on steel and aluminum... Canada will impose a 100% tariff on Chinese-made electric vehicles (EVs) and a 25% tariff on Chinese steel and aluminum, following similar actions by the EU and U.S. This move aims to protect domestic automakers from Chinese competition and is expected to prompt retaliation from China. The tariffs, which have been in development for weeks, highlight Canada’s strong stance in limiting Chinese EV exporters’ access to its market.
Sullivan to meet China’s foreign minister to ease U.S./China tensions... National Security Adviser Jake Sullivan will travel to China next week for a meeting with Foreign Minister Wang Yi, marking his first trip to Beijing under the Biden administration. The visit, aimed at defusing tensions between the two nations, will cover potential areas of cooperation, such as curbing the spread of fentanyl and contentious issues like Taiwan’s future. The meeting may also set the stage for a final summit between President Joe Biden and China’s leader Xi Jinping before Biden’s term ends. This high-level dialogue follows a series of efforts to stabilize relations after incidents like the Chinese spy balloon episode and ongoing disagreements over China’s stance on global conflicts.
Peru’s Chancay port: China’s $3.5 billion trade hub raises U.S. concerns over strategic influence... Chancay, a small tourist town in Peru, is set to become a major commercial hub with the inauguration of a $3.5 billion port controlled by China’s COSCO Shipping in October. This port, part of China’s Belt and Road Initiative, will significantly reduce shipping times from South America to China, enhancing trade and deepening China’s influence in the region. While Peru views the project as an economic opportunity, the U.S. sees it as a strategic threat, raising concerns over potential Chinese military use. Despite political instability, the project has garnered consistent support from Peru’s leadership, although it has also exposed the country to potential coercion from China, The Wire reported.
In July, Sens. Mark Kelly (D-Ariz.), Marco Rubio (R-Fla.) and Rick Scott (R-Fla.) introduced the Strategic Port Reporting Act, a bipartisan bill that would require the Defense Department devise a strategy to counter China’s growing influence at key global ports.
Bullard: Powell’s Jackson Hole speech ‘not quite a victory lap’... Former Federal Reserve Bank of St. Louis President James Bullard described Fed Chair Jerome Powell’s speech last week at the Jackson Hole economic forum as “not quite a victory lap,” but close. Powell indicated the economic distortions caused by the pandemic are diminishing and the U.S. is increasingly on a sustainable path to the 2% inflation target. He suggested that there’s “good reason to think” this target can be achieved while maintaining a stable jobs market and hinted that it may be time for the Fed to consider lowering interest rates. Bullard noted the way inflation was managed without triggering a recession will be studied for years. Powell added that this period will be analyzed and debated long after the current policymakers are gone. A crucial factor in this success, besides the aggressive rate hikes, was the public’s belief in the Fed’s commitment to price stability. This belief prevented households and businesses from acting as if high inflation would persist, which could have entrenched high prices for years.
Meanwhile, former Treasury Secretary Lawrence Summers, a frequent critic of the Federal Reserve, acknowledged the Fed’s efforts in addressing inflation. Summers praised the policymakers for acting decisively, which he believes has helped the U.S. navigate the inflation crisis without triggering a major recession. Summers shared his views during an appearance on Bloomberg TV, where he serves as a paid contributor.