Evening Report | October 11, 2024

Top stories for Oct. 11, 2024

Pro Farmer's Evening Report
Pro Farmer’s Evening Report
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Your Pro Farmer newsletter is now available... USDA issued its third crop estimates for corn, soybeans and cotton on Friday. Along with changes to the usage forecasts, that drove adjustments to projected new-crop ending stocks. We cover all of the report details on News pages 1 and 4. Corn and soybean harvest continues to rip along at a quick clip given ongoing hot and dry conditions. That limits impacts from the cold blast that will hit the upper Midwest. Hurricane Milton ripped through central Florida last week. Aside from the citrus crop, the potentially biggest impact to agriculture could be to the phosphate industry as Florida accounts for nearly two-thirds of U.S. production. On the geopolitical front, Moscow stepped up attacks on Ukrainian port infrastructure and grain cargoes, possibly to limit Ukraine’s shipments as Russia has less wheat to export this year. While U.S. East Coast and Gulf ports are returning to normal after the recent strike by union workers, Chinese ports continued to outperform those in the United States. We cover all of these items and much more in this week’s newsletter, which you can access here.

Negative reaction after USDA reports... Corn and soybean futures retreated from their pre-report gains and wheat extended its losses after USDA’s October crop reports. There wasn’t anything overly bearish in the report data, though a lack of bullish news weighed on markets. Click here for report details.

Russia raises wheat export duty 41%, sets price floor... Russia raised the duty on wheat export to 1,872 rubles ($19.51) per metric ton for Oct. 16-22 from 1,328.3 rubles ($13.84) previously, a 40.9% jump. Russia’s ag ministry asked exporters to not sell wheat at below the $250 free-on-board (FOB) level at international tenders at a closed-door meeting Friday, two sources with direct knowledge of the matter told Reuters. The floor is set to curb exports, which were active during the first quarter of 2024-25.

Russia’s Grain Exporters Union said the ministry also told exporters to engage in direct deals with buyers without third parties. The union said exporters agreed not to provide Russian grain to foreign winners of tenders.

U.S. frost, freezes to have minimal impact on crops... A strong cold front is expected to move across the Plains and upper Midwest late this weekend into early next week. World Weather Inc. notes, “Crop damage should be minimal as a majority of the corn and soybeans should already be mature. The impact of frost and freezes for any immature crop will be minimal with the biggest risk being blackened soybeans. The cold will not have any major impact on winter wheat. The wheat crop’s biggest threat is due to ongoing dryness and drought will continue to spread and intensify in the Midwest and Great Plains due to the lack of rain.”

Pure Prairie Poultry leaves producers in the lurch... Pure Prairie Poultry’s abrupt closure has left its contract growers in a difficult situation. Minnesota and Iowa have stepped in to help manage millions of chickens. Wisconsin has provided minimal support. USDA is investigating after the company received government loans and grants in 2022.

In November 2022, Pure Prairie Poultry received substantial USDA funding:

• A $38,720,000 loan from the Food Supply Chain Guaranteed Loan Program.

• A $6,963,725 grant from the Meat and Poultry Processing Expansion Program.

The total funding of $45.6 million was intended to help the company expand and renovate a shuttered processing plant in Charles City, Iowa.

According to the company’s CFO, George Piechel, the $38.7 million loan “was delayed substantially, thereby exacerbating the company’s economic stress.” Multiple appraisals and re-underwriting were reportedly required. The $6.9 million grant was used to provide gap financing for the company when it was generating little revenue in early 2023.

Despite the significant investment, the company filed for Chapter 11 bankruptcy in September, less than two years after receiving the funding.

Harris targets Trump’s rural base as fight for farming communities intensifies... Kamala Harris is intensifying efforts to win over rural voters, traditionally a Republican stronghold, in key swing states like Wisconsin and Pennsylvania, Bloomberg reports. Her campaign has launched a series of ads featuring farmers pledging support for her and is emphasizing rural healthcare and federal investments. Partnering with Minnesota Governor Tim Walz, Harris is making a push in regions where Trump’s support remains strong. While Trump’s trade policies have earned him loyalty in rural areas, Harris aims to capitalize on discontent with farm costs and Trump’s handling of China. The race in these battleground states remains tight.

Producer prices ease in September but higher than expected... U.S. producer prices rose 1.8% annually in September, down from the upwardly revised 1.9% increase in August but the lowest in seven months. Economists expected producer prices to fall to a 1.6% annual increase. Core PPI, minus food and energy costs, increased to 2.8% from 2.4% in August.

Two more human cases of H5N1 in California... The California Department of Public Health said the state’s fifth and sixth human cases of H5N1 virus had been confirmed by the U.S. Centers for Disease Control and Prevention. All six people who contracted the virus had been exposed to infected cows on dairy farms.

China seeks carbon data from ships as trading scheme grows... Chinese authorities have started to ask some overseas shipowners to report on their carbon emissions, Bloomberg reported, highlighting greater scrutiny of the industry as the regulatory framework shifts. The requests for figures on voyages that service local ports affect some tanker and container-ship owners, according to people familiar with the matter. The move follows the EU’s recent adoption of a carbon levy on vessels, and could help in China’s expansion of its emissions-trading system to cover shipping. It’s unclear how many ports are involved.

In March, Beijing set up its first carbon-emissions management agency for the shipping sector in Shanghai to collect figures from China-flagged ships. China’s transport ministry told Bloomberg it had issued verbal notices to some ports, and that the requests were in response to the International Maritime Organization’s data-collection requirements.

China’s requests to overseas shipowners follow the introduction this year of a carbon levy by the European Union that requires vessels calling at the bloc’s ports to pay for carbon pollution, regardless of the flags they fly or where their owners are incorporated. The majority of ships are still powered by oil-derived fuels, which remain significantly cheaper than low-carbon alternatives.

European sugar companies struggle as oversupply drives down prices... Europe’s sugar producers are facing financial pressures due to increased supplies driving down prices, Bloomberg reports. Suedzucker, the largest producer, reported an 81% drop in operating profit for its sugar unit, citing lower EU prices and higher exports. Austrian producer Agrana saw a 49% profit decline and expects challenges ahead. Oversupply from strong harvests in Europe and increased imports from Ukraine have pushed white sugar prices down 8% in the EU. Many producers are now selling at prices below production costs, adding to financial strain.

Canada announced plans to require large corporations to disclose climate-related risks... Canadian Finance Minister Chrystia Freeland revealed the policy as part of efforts to attract private investment and achieve net-zero emissions by 2050. The regulation will apply to all sectors and extend beyond industries under federal regulation. The government also plans to introduce sustainable-investment guidelines, excluding new natural gas production from “green” labels. The timeline for these changes remains uncertain and political shifts could impact their implementation as the Conservative Party leads in polls ahead of a possible election.