Evening Report | August 30, 2024

Top stories for Aug. 30, 2024

Pro Farmer's Evening Report
Pro Farmer’s Evening Report
(Pro Farmer)

Check our advice monitor on ProFarmer.com for updates to our marketing plan.

Corn producers: Finish 2023-crop sales... Today marks the end of the 2023-24 marketing year for corn. We advise hedgers and cash-only marketers to sell the final 20% of old-crop in the cash market to get to 100% sold as we don’t carry inventory from one year to the next.

Your Pro Farmer newsletter is now available... We’ve had a week to let the dust settle and reflect on what we found on the Pro Farmer Crop Tour. More importantly, we’ve had a week to do additional analysis of the data from the more than 3,300 corn and soybean samples scouts gathered Aug. 19-22. Our page 4 feature this week is an in-depth look at the data. Above-average temperatures hit right after Crop Tour, which caused corn and soybean crop condition ratings to fall to the lowest levels of the growing season, though they remain well above average. Temperatures and rainfall in early September will determine how crops finish after performing well into late August. Meanwhile, Canada estimated bigger wheat and canola production, though the forecasts partly reflected warmer and drier weather during August. Concerns about the ag sector are rising, with more than half of ag economists surveyed indicating agriculture is already in a recession. USDA’s latest ag trade outlook paints an extended bleak picture with the deficit expected to swell in fiscal year 2025. We cover all of these items and much more in this week’s newsletter, which you can access here.

Labor Day schedule... All markets and government offices are closed on Monday, Sept. 2, for Labor Day. There will be no Pro Farmer market updates on Monday. Grain markets resume trade on Monday, Sept. 2, at 7:00 p.m. CT with the overnight session. Livestock markets reopen at 8:30 a.m. CT on Tuesday, Sept. 3. Have a happy and safe holiday weekend.

PCE data solidifies Fed policy shift... The personal consumption expenditures (PCE) price index rose 2.5% annually in July, unchanged from June but lower than economists expected. Core PCE, the Fed’s preferred inflation metric, held at 2.6% for a third straight month, also below expectations. The inflation data supports the case for the Federal Reserve to begin cutting interest rates in September, with most expecting a 25-point reduction. Fed fund futures signal traders currently expect the Fed to cut rates 100 basis points by the end of this year.

USTR delays announcement on Chinese tariffs, decision coming soon... The Biden administration on Friday again delayed an announcement of its final determinations for steep U.S. tariffs on Chinese-made electric vehicles, batteries, semiconductors and solar cells, saying it will make a decision in the coming days. A spokesman for the U.S. Trade Representative’s Office said the agency “continues to develop the final determination regarding proposed modifications” to tariffs on Chinese goods.

Initially, the higher duties of 100% on EVs, 50% on semiconductors and solar cells and 25% on lithium-ion batteries and key minerals, steel and aluminum, ship-to-shore cranes and syringes were due to take effect on Aug. 1. But the agency on July 30 delayed implementation until sometime in September, saying it needed more time to study more than 1,100 public comments from industry. It set a new deadline of Aug. 31, which was further delayed by today’s announcement.

Soyoil use for biofuels surges to record in June... Soybean oil used to produce biofuels in the U.S. jumped to 1.267 billion lbs. in June, up from 1.076 billion lbs. the previous month, according to the Energy Information Administration. That was up 5.0% from last year and the second highest monthly figure ever behind July 2023. June soyoil usage included 578 million lbs. by biodiesel plants and 689 million lbs. by renewable diesel facilities. That was a record usage rate for renewable diesel plants, eclipsing the previous high of 594 million lbs. in July 2023.

Suspected H5N1 cases in California dairies... USDA is testing to confirm possible cases of the H5N1 virus in dairy cattle in California, the nation’s largest milk-producing state. California said on Thursday it was investigating potential cases at three dairies in the Central Valley region. The cases, if confirmed, would make California the 14th state to detect the H5N1 virus in dairy cows.

Mexico’s trade imbalance with China... “China sells to us but doesn’t buy from us and that’s not reciprocal trade,” said Mexican Finance Minister Rogelio Ramírez de la O. He has expressed concerns about this imbalance, suggesting that it negatively impacts Mexico’s economy and that there is a need to re-evaluate trade policies to protect domestic interests. He also pointed out that China’s expansion in international trade, particularly since joining the World Trade Organization in 2001, has come at the expense of North American countries, including Mexico. This has led to increased dependence on Chinese imports across the region, with Mexico relying on China for 19.6% of its imports.

The Mexican finance minister’s comments echo broader concerns about trade imbalances with China, similar to those expressed by the United States. Both countries are considering measures to address these imbalances, including changes in investment policies and efforts to reduce dependence on Chinese imports.

Dockworkers’ union at impasse with employers, strike looms at major U.S. ports... The union representing dockworkers from Maine to Texas reports being “at an impasse” with employers as negotiations for a new labor contract stall, raising the threat of a strike at some of the largest U.S. ports. The International Longshoremen’s Association (ILA) is demanding a 77% wage increase over six years, significantly higher than the 32% won by West Coast dockworkers last year. Despite the high stakes, formal negotiations have yet to begin. With the current contract set to expire on Sept. 30, concerns are growing among shipping customers about the potential disruption.

Pork, beef producers in developed markets face credit downgrade risks due to climate policies... Fitch Ratings warns that pork and beef producers in developed markets are increasingly vulnerable to credit downgrades due to rising costs from stricter climate policies and the need for new technologies. Emerging markets, however, remain less affected due to stable demand and delayed climate policy implementation. It said the beef industry also faces challenges from shrinking demand driven by population decline, health concerns and climate targets. Fitch estimates that one in five corporate issuers could be at risk of downgrades by 2035 due to climate-related vulnerabilities.

Harris defends policy shifts, stresses consistent values... In Thursday’s interview with CNN, Vice President Kamala Harris defended her economic record and addressed criticism regarding inflation under the Biden administration, acknowledging the challenges but highlighting efforts to lower costs. Harris emphasized her evolving policy stances, particularly on energy and immigration, while asserting that her core values remain unchanged. She hinted at a potential bipartisan Cabinet and committed to bipartisan border reform. On international issues, Harris reaffirmed her unwavering support for Israel. As she prepares for a potential presidency, Harris seeks to balance centrist approaches with progressive values, aiming to appeal to a broad electorate.