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Canadian wheat, canola production forecast to rise from year-ago... Statistics Canada estimated Canadian farmers will produce more wheat and canola compared with 2023, according to July-derived yield model estimates using satellite imagery and agroclimatic data. Increased production is expected to be driven by higher yields because of overall better growing conditions in Western Canada as of the end of July, compared with a year earlier. However, Stats Canada acknowledged that a lack of moisture and high temperatures in some parts of the Prairies continued to be a cause for concern.
Canadian wheat production is forecast to rise 4.3% to 34.4 MMT. Yield is expected to increase 5.9% to 48.5 bu. per acre. Harvested area is expected to decrease by 1.6% to 26.0 million acres.
Canadian canola production is forecast to increase 1.6% from last year to 19.5 MMT. Yield is forecast to rise 1.8% to 39.4 bu. per acre, while harvested area is expected to be down 0.4% to 21.8 million acres.
Mike Jubinville with MarketsFarm noted Western Canada had “bumper crop conditions, with the best spring rains in years and mild temps. But conditions changed during the latter half of July and start of August, turning hotter/drier. Early (and it’s early) harvest results in the southern areas of the Prairies are showing light test weight cereals (spring wheat, durum, barley, oats) and diminished yield, but higher protein. I suspect yield and crop conditions will get better when harvest really gets going further north and east from southern Alberta/southwest Saskatchewan in the next couple of weeks.”
Jubinville said, “Interesting to note that in this report… StatsCan boosted its crop totals for 2023 and 2022… adding 1 MMT to canola and 1.5 MMT to wheat. As for this year’s production, there was a lot of trade skepticism here ahead of the StatsCan report release since the data they used was five weeks old. So there was some confusion on what to expect… how well would these numbers reflect current conditions. After voicing my own skepticism of what this report might say going into this report… concerned the numbers might come in higher than expected in reflecting early growing conditions… they in fact are probably closer to the reality of today’s more diminished yield expectations.”
French wheat quality below average... French soft wheat harvest data showed test weights and protein content were below the five-year averages, according to the country’s ag ministry. Test weight data from the ministry and crop institute Arvalis showed 26% of the 2024 crop scored above the common standard of 76 kilos (167 lbs) per hectoliter, down from an average of 76% for 2019-2023. For protein content, 74% of the crop had an average protein content above 11%, down from the five-year average of 85%, while 43% of the crop had an average protein content above 11.5%, a level used by several key importers. By contrast, Hagberg falling numbers, another measure of milling quality, were above average, with 99% of the crop showing readings above 240 seconds, compared with the five-year average of 87%.
Besides the lower quality, France’s wheat production was hurt by persistent rains throughout the growing season and will be the lowest since the 1980s.
Backlog on Canada’s railroads may take weeks to clear up... The recent labor dispute involving Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) has significantly impacted Canada’s rail freight operations. The lockout of union workers, which began on Aug. 22, led to a temporary halt in operations, causing disruptions in the supply chain and affecting both Canadian and U.S. trade. The Canada Industrial Relations Board intervened on Aug. 24, ordering the workers back to their jobs and mandating binding arbitration to resolve the contract dispute. Despite this resolution, the union plans to challenge the arbitration in court.
Although operations have resumed, experts predict it could take several weeks for the rail networks to fully recover. The backlog of freight, particularly hazardous materials, is a significant challenge. The embargoes and the brief shutdown have led to congestion and delays in the supply chain, affecting industries reliant on rail transport.
The disruption has had substantial economic repercussions, with billions of dollars in trade affected, particularly U.S.-bound commerce that relies on Canadian railways. The railways are crucial for transporting goods such as fertilizers, grains, and consumer products across North America.
Both CN and CPKC are working on recovery plans to address the backlog and restore normal operations. These efforts include coordinating with ports and other industry partners to manage the flow of goods and reduce congestion. However, full recovery and stabilization of supply chains may take additional time beyond the immediate resumption of operations.
U.S., China hold high-level talks... U.S. National Security Advisor Jake Sullivan met with China’s top diplomat Wang Yi in Beijing, marking the first visit by a sitting NSA to China in eight years. While Wang emphasized overcoming obstacles for stable bilateral relations, Sullivan reiterated the Biden administration’s commitment to managing U.S./China competition responsibly. The meetings are seen as a chance to clear the air before changes in U.S. leadership, with both sides managing expectations for significant shifts in relations.
Key topics on Sullivan’s agenda included Taiwan and the South China Sea, both of which are major points of contention. Beijing views Taiwan as a non-negotiable issue, accusing the U.S. of promoting Taiwanese independence through arms sales and high-level visits. The South China Sea remains a flashpoint, particularly following recent clashes between Chinese and Philippine vessels, raising the possibility of U.S. military involvement to protect Philippine interests.
Other critical issues included expanding military-to-military communications to prevent regional conflicts, addressing China’s relationship with Russia — especially concerning dual-use technology — and tackling the production and export of chemicals used to manufacture fentanyl. Additionally, U.S. export controls on advanced semiconductors remain a contentious issue, with Beijing accusing Washington of attempting to stifle its technological development.
President Joe Biden and Chinese President Xi Jinping are expected to speak by phone in the coming weeks and they could potentially meet at international summits in November.
Crop insurance performance spreadsheet tool available in the farmdoc FAST Tool lineup... The Crop Insurance Summary of Business Tool provides county-level summaries of the federal crop insurance program based on information from the Risk Management Agency’s publicly available Summary of Business data files. This article (link) introduces the new tool and highlights the “Product Use” feature, which shows users historical trends in insurance use for the major policies at the county level for corn, soybeans and wheat. This feature of the tool provides farmers with trends in insurance use, which can serve as benchmarks as they make their own crop insurance choices.
FAA grants boost SAF development in Georgia... The Federal Aviation Administration has awarded nearly $3.4 million in grants to support sustainable aviation fuel (SAF) initiatives in Georgia. LanzaJet will receive $3.1 million to develop a new SAF production facility in Soperton, while $240,000 will go to Hartsfield-Jackson Atlanta International Airport to enhance regional SAF supply chains. SAF represents a new market for Georgia’s timber industry and a key component in aviation’s push toward decarbonization.
Europe is leading the way in deploying SAF. Starting in 2025, 2% of all aviation fuel used at EU airports must be sustainable. This percentage is set to increase to 6% by 2030, 20% by 2035, and eventually 70% by 2050.
The U.S. does not currently have a federal mandate requiring the use of SAF in aviation. Instead, the U.S. government has adopted a strategy based on incentives to encourage the production and use of SAF. This approach includes tax credits and subsidies aimed at reducing the cost of SAF and promoting its adoption by airlines and fuel suppliers. The Inflation Reduction Act provides significant tax credits for SAF producers, ranging from $1.25 to $1.75 per gallon, depending on the lifecycle greenhouse gas emissions reduction achieved by SAF compared to conventional jet fuel. This initiative aims to produce at least 3 billion gallons of SAF per year by 2030. The goal is to reduce aviation emissions by 20% by 2030 and to eventually meet 100% of aviation fuel demand with SAF by 2050. Some U.S. states have their own programs that support SAF. For example, California’s Low-Carbon Fuel Standard allows SAF to generate credits, although it does not penalize the use of conventional jet fuel.
Senators urge USDA to resolve food distribution issues for tribal and senior programs... Senate Ag Committee leaders, Debbie Stabenow (D-Mich.) and John Boozman (R-Ark.), have urged USDA Secretary Thomas Vilsack to address supply chain disruptions affecting the Food Distribution Program on Indian Reservations (FDPIR) and the Commodity Supplemental Food Program (CSFP). These programs, serving tribal and senior households, have faced inventory shortages and delayed or expired food deliveries. The Senators demand an explanation, immediate action to resolve the crisis and steps to prevent future disruptions. USDA is working to restore regular, on-time deliveries but more action is needed.
EIU: Softening U.S. labor market signals economic slowdown ahead... The U.S. labor market, while still strong historically, is showing signs of weakening, according to the Economist Intelligence Unit (EIU).. The Fed’s tight monetary policy, coupled with a cooling labor market, raises the risk of a larger employment contraction, potentially moving away from a “soft landing” scenario, the report notes. Although inflation is within target, continued tight policy could further strain the labor market. The slowdown is expected to impact cyclical industries like construction and manufacturing more than others.