Evening Report | July 29, 2024

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Corn conditions unexpectedly improve... USDA rated 68% of the corn crop as “good” to “excellent” as of Sunday, up one percentage point from last week. Analysts expected a one-point decline. The “poor” to “very poor” rating dropped one point to 9%.

USDA reported 77% of the crop was silking (76% five-year average) and 30% was in dough stage (22%).

Soybean conditions decline... USDA rated 67% of the soybean crop as “good” to “excellent,” down one point from last week, as anticipated. The “poor” to “very poor” rating held at 8%.

USDA reported 77% of the crop was blooming (74% average) and 44% was setting pods (40%).

Cotton conditions remain volatile amid big weekly swings in Texas... USDA rated 49% of the cotton crop as “good” to “excellent,” down four percentage points from last week. The “poor” to “very poor” rating increased four pointes to 22%. The Texas crop was rated 40% in the top two categories and 31% in the bottom two, down five points and up six points, respectively.

USDA reported 87% of the crop was squaring (84% average) and 54% was setting bolls (46%).

Spring wheat conditions decline more than expected... USDA rated 74% of the spring wheat crop as “good” to “excellent,” down three points from last week and one point lower than analysts expected. The “poor” to “very poor” rating dropped one point to 4%.

USDA reported 94% of the crop was headed (96% average) and 1% was harvested (3%). Harvest had not yet started in top producer North Dakota (1% average).

Winter wheat harvest not quite as advanced as expected... Winter wheat harvest reached 82%, two points ahead of the five-year average but one point behind expectations. Harvest is done in Arkansas, Illinois, Indiana, Missouri, North Carolina, Ohio, Oklahoma and Texas. The Kansas crop is 99% cut, one point ahead of average for the end of July.

U.S. ambassador to Canada optimistic about Canadian efforts to block Chinese EV loophole... The U.S. ambassador to Canada, David Cohen, is optimistic regarding the Canadian government’s efforts to close a loophole that could potentially allow Chinese-backed electric vehicles (EVs) to enter the U.S. market via Canada, thereby circumventing American tariffs. This loophole has raised concerns about the influx of Chinese EVs into the North American market, which could undermine local industries due to the competitive pricing enabled by China’s extensive subsidies and non-market practices.

The primary issue revolves around the possibility that Chinese EV manufacturers, such as BYD Co., could exploit the relatively lower tariffs and regulatory environment in Canada to gain access to the U.S. market. This situation is particularly concerning for the U.S., which has implemented stringent tariffs on Chinese-made EVs to protect its domestic industry. The U.S. tariffs on Chinese EVs have been significantly increased, with rates as high as 102.5%.

In response to these concerns, Prime Minister Justin Trudeau’s government has been considering several measures to deter the entry of Chinese-made EVs into the Canadian market. These measures include:

· Imposing tariffs on imported Chinese EVs.

· Blocking Chinese investment in new Canadian EV manufacturing facilities.

· Making Chinese-made EVs ineligible for federal consumer incentives.

· Addressing data privacy and security concerns related to connected vehicles and infrastructure.

The Canadian government has initiated formal consultations to gather feedback from stakeholders, including labor unions and automotive industry groups, on these proposed measures. These consultations are set to run until Aug. 1, 2024.

Two-thirds of U.S. dairy farms vanish, yet milk production rises by a third... California and Wisconsin continue to lead U.S. milk production, making up one-third of the total output, but the dairy industry has undergone significant changes over the past 20 years, according to USDA analysts. The number of dairy herds dropped from 70,375 in 2003 to 26,290 in 2023, while milk production increased from 170.3 billion lbs. to 226.4 billion lbs., a 33% rise.

Texas and Idaho have grown to be among the top five dairy states, each contributing 7% to U.S. production. California’s production share decreased from 21% to 18%, and Wisconsin’s share rose to 14%.

Nationwide, there are fewer dairy cows, but they produce more milk. Large dairy farms with over 2,000 cows now provide 39% of the milk supply, with larger farms being more common in the West. These farms have become more specialized, focusing mainly on dairy production and relying more on purchased feeds. The Economic Research Service report highlighted that larger farms are also more likely to adopt advanced technologies and management practices.