Evening Report | July 1, 2024

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Corn conditions decline more than expected …USDA rated 67% of the corn crop as “good” to “excellent” as of Sunday, down two points from the previous week and one-point below the average analyst estimate. The “poor” to “very poor” rating increased two points to 9%.

USDA reported 11% of the crop was silking, five points ahead of average.

Soybean conditions slightly better than expected…USDA rated 67% of the soybean crop as “good” to “excellent,” unchanged from a week ago and one point above analysts’ expectations. The “poor” to “very poor” rating was also unchanged from last week at 8%.

USDA reported soybean emergence at 95%, two points ahead of average, while 20% of the crop was blooming, five points ahead of average and 3% was setting pods, one point ahead of average.

Cotton conditions erode…USDA rated 50% of the cotton crop as “good” to “excellent,” down six points from last week. The “poor” to “very poor” rating increased three points to 17%. The Texas crop was rated 44% in the top two categories and 22% in the bottom two categories.

USDA reported cotton planting stood at 97% (99% average), 43% of the crop was squaring (38%) and 11% was setting bolls (9%).

Spring wheat conditions improve…USDA rated the spring wheat crop as 72% “good” to “excellent,” up one point from the previous week, while analysts expected a one-point decline. The “poor” to “very poor” rating was unchanged at 4%.

USDA reported the spring wheat crop was 38% headed, one-point ahead of the five-year average.

Winter wheat harvest continues to advance well ahead of normal…winter wheat harvest advanced 14 percentage points to 54%, 15 points ahead of average for the end of June. Harvest was 87% complete in Texas (85% average), 100% in Oklahoma (84% average) and 80% in Kansas (49% average).

Soybean crush rebounds sharply but less than expected... U.S. processors crushed 192.0 million bu. of soybeans during May. That was up 14.3 million bu. (8.0%) from April and 2.7 million bu. (1.4%) from year-ago but 2 million bu. less than analysts expected.

Through the first nine months of 2023-24, the crush pace was 3.5% above the same period last year. To reach USDA’s forecast of 2.290 billion bu., crush must run 3.6% above year-ago during the final three months of the marketing year.

Corn-ethanol use stronger than expected... Corn-for-ethanol use totaled 453.7 million bu. during May, up 36.8 million bu. (8.8%) from April and 14.7 million bu. (3.3%) from last year. Corn ethanol use increased 7.8 million bu. more than the average pre-report estimate.

Through the first nine months of 2023-24, corn-for-ethanol use totaled 4.064 billion bu., 5.9% above the same period last year. To reach USDA’s forecast of 5.450 billion bu., corn ethanol consumption must run 3.5% above year-ago through the final three months of the marketing year.

Mexico will drop plan to cut yellow corn imports... Mexico’s incoming administration will discard a core goal of outgoing President Andres Manuel Lopez Obrador, aka AMLO, to reduce imports of yellow corn, according to incoming agriculture minister Julio Berdegue. He told Reuters Mexico will focus on maintaining self-sufficiency in white corn, which is commonly used in the country’s staple tortilla.

AMLO aimed to limit the use of GM corn, a position that sparked an ongoing trade dispute with the U.S., by far Mexico’s largest commercial trading partner. The outgoing administration had already walked back its GM-corn ban to restrict it only for human consumption.

Mexico will likely have to continue importing large amounts of yellow corn, said Berdegue, due to the increased demand in the livestock sector as Mexicans’ appetite for meat products grows.

StoneX cuts Brazil’s safrinha corn crop forecast... StoneX cut its Brazilian safrinha corn production forecast 571,000 MT to 93.5 MMT due to dry weather impacting yields in Goias, Minas Gerais, São Paulo and Tocantins. The firm now estimates Brazil’s total corn production at 121.18 MMT.

SCOTUS issues ruling on Corner Post v. Federal Reserve... The U.S. Supreme Court delivered a significant ruling in the case of Corner Post, Inc. v. Board of Governors of the Federal Reserve System. This decision has substantial implications for the ability of businesses to challenge federal regulations. The case originated from a challenge to a 2011 Federal Reserve regulation that capped debit card swipe fees. Corner Post, a truck stop in North Dakota that opened in 2018, argued that the six-year statute of limitations for challenging the regulation should begin when the business was first affected by it, not when the regulation was issued. The regulation had been in place since 2011, and the deadline for legal challenges had passed in 2017. However, Corner Post did not start operations until 2018 and filed its lawsuit in 2021, claiming financial harm from the regulation.

The decision is seen as a victory for small businesses and anti-regulatory interests, allowing more flexibility in challenging federal regulations. However, it also raises concerns about the potential for an increase in litigation against federal agencies, which could destabilize long-established regulatory frameworks. Justice Ketanji Brown Jackson, in her dissent, warned that this ruling might lead to a flood of lawsuits and undermine the stability of federal regulations.

The Corner Post ruling marks a significant shift in administrative law, extending the timeframe for businesses to challenge federal regulations and potentially altering the landscape of regulatory compliance and enforcement.

SCOTUS issues presidential immunity ruling... The Supreme Court ruled 6-3 that presidents have immunity from criminal prosecution for official acts but not for unofficial acts, a decision that benefits former President Donald Trump, who will likely face a more straightforward trial in Washington. Trump had requested the court to rule he was immune from criminal prosecution for his official acts unless Congress had impeached and convicted him. The Supreme Court’s decision, written by Chief Justice John Roberts, stated the nature of presidential power grants a former president absolute immunity from prosecution for actions within his constitutional authority and presumptive immunity for all official acts, but no immunity for unofficial acts. Justices Ketanji Brown Jackson, Elena Kagan and Sonia Sotomayor dissented.

During oral arguments, conservative justices seemed inclined to remand the case to the district court for further clarification on what constitutes official versus private acts. Justice Neil Gorsuch and Justice Ketanji Brown Jackson expressed concerns about the broader implications of defining presidential conduct.

The last significant Supreme Court ruling on presidential immunity was in 1982’s Nixon v. Fitzgerald, which granted presidents absolute immunity from civil liability for actions within the outer perimeter of their official duties.

Wasserman’s thoughts on November elections... We chatted late last week with David Wasserman, election analyst for the Cook Political Report with Amy Walter. His current thoughts on key 2024 elections:

· President Joe Biden will not withdraw from the race.

· If Biden does withdraw, Wasserman sees a potential Democratic team of Michigan Governor Gretchen Whitmer and her possible VP pick: Raphael Warnock, senator from Georgia.

· Former President Donald Trump will likely win the presidential race as he is currently ahead in all key swing states. Wasserman gives this prediction 70% odds.

· He thinks Trump will tap North Dakota Governor Doug Burgum as his vice president. Reasons: His low-key personality will not conflict with Trump and Burgum would bring Midwest values to the role. Asked the impact if Trump would surprisingly pick Nikki Haley as his VP, Wasserman said: “Then Trump would win for sure.”

· The GOP will likely regain control of the Senate, 52-48, but the GOP tally could go as high as 56 depending on some close races. He sees Democratic candidates Jon Tester (Mont.) and Sherrod Brown (Ohio) losing, but Democratic Sens. Bob Casey (Pa.) and Tammy Baldwin (Wis.) getting re-elected.

· If the GOP wins Senate control, Wasserman sees three moderate GOP senators gaining clout: Lisa Murkowski (Alaska), Susan Collins (Maine) and the likely replacement to take Mitt Romney’s seat in the U.S. Senate — current Rep. John Curtis (R-Utah).

· Wasserman sees a very close House contest, with the GOP likely retaining control with a ratio like the current Congress.