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Livestock producers: Extend meal coverage... The sharp break in meal futures the past three days creates an opportunity for livestock producers to extend soymeal coverage beyond hand-to-mouth. We advise livestock producers to cover soymeal needs for the remainder of October in the cash market. Be prepared to further extend coverage if there’s a deeper price pullback.
Your Pro Farmer newsletter is now available... USDA’s Grain Stocks Report contained a bullish surprise for corn, as Sept. 1 stocks came in lighter than anticipated. That not only creates lower beginning stocks for 2024-25 but the implications for feed usage could trickle down through the new-crop balance sheet. Front-month futures for corn, soybeans and wheat all posted gains in September, which is rare and points to additional price strength this month. The Southeast was slammed by Hurricane Helene, creating a threat to supply chains and the economy. Our News page 4 feature looks at impacts from the storm, including to agriculture. Geopolitical tensions increased in the Middle East as Iran and Israel attacked each other and there are concerns the situation could expand. This could cause grain and livestock bulls to pull in their horns. We cover all of these items and much more in this week’s newsletter, which you can access here.
Strike over, but time needed to clear ship backlog... U.S. East Coast and Gulf Coast ports were reopened on Friday after dockworkers and port operators reached a wage deal to settle the strike, but the cargo backlog will take time. At least 54 container ships had lined up outside the ports as the strike prevented unloading, according to Everstream Analytics. Pricing platform Xeneta said it was likely to take two to three weeks for the normal flow of goods to be reestablished.
Supply chain pressures to remain calm amid U.S. port strike settlement... The resolution of a U.S. port worker strike is likely to keep the global supply chain pressures tracked by the New York Fed on a calm footing and contributing to cooling inflation trends. The bank reported its global supply chain pressure index, which measures how readings deviate from historical averages, eased to a reading of 0.13 in September. That ended a trend of rising pressures that started in April when the reading was -0.96. Global supply chain pressures have hovered right around normal or less than normal since early 2023 and their relative softness has played a key role in an ebbing of inflation that allowed the Fed to kick off a cycle of rate cuts last month.
White House economic adviser Lael Brainard said there shouldn’t be any effects on the U.S. economy or for businesses and consumers from the three-day port strike.
Jobs market strengthens in September... The U.S. economy added a stronger-than-expected 254,000 non-farm payrolls in September, up sharply from the revised figure of 159,000 for August and the most since May. The unemployment rate dropped to 4.1%.
Economists were nervous about the labor market, but this report suggests those fears might have been overblown. The stronger jobs data suggests the economy doesn’t need big interest rate cuts. The current highest odds are for a 25-basis-point cut in November, though the Fed will get the October employment data before making its decision.
Brazil soybean exports slow in September, corn shipments increase... Brazil exported 6.110 MMT of soybeans last month, according to official government data. That was down 1.932 MMT (24%) from August and 288,000 MT (4.5%) less than last year.
Brazil exported 6.422 MMT of corn in September, up 359,000 MT (5.9%) from August but 2.324 MMT (26.6%) less than last year.
India aims to double edible oil output... India approved a 101 billion rupee (US $1.2 billion) program to double edible oil production in the country within seven years, aiming to reduce dependence on costlier imports. The world’s largest importer of edible oils, India currently fulfils nearly two-thirds of its demand through overseas purchases of palm oil, soyoil and sunflower oil, primarily from Indonesia, Malaysia, Argentina, Brazil, Russia and Ukraine.
Under the program, oilseed productivity will be increased by promoting high-yielding, high-oil content varieties and expanding cultivation. Advanced technologies like genome editing will be used to develop superior seeds. The program aims to increase edible oil production from the current 12.7 MMT to 25.45 MMT by 2030-31, fulfilling around 72% of the country’s projected domestic requirement.
The country’s edible oil import bill surged to $15 billion in 2023-24 from $2.2 billion in 2006-07. During the same period, India’s edible oil imports rose to 15.5 MMT from 4.37 MMT. Last month, India raised the basic import tax on crude and refined edible oils by 20 percentage points to help protect farmers struggling with lower oilseed prices.
Big jump expected in Brazil diesel imports... Brazil is projected to import its highest amount of diesel in two years, driven by a strong economy and increased fuel demand during the corn harvest season. Diesel imports are expected to reach 452,000 barrels per day in October, following a similar surge in September, Bloomberg reports. The robust demand is due to the country’s reliance on trucks to transport goods, particularly during the harvest. Brazil’s economic growth, recently upgraded by the central bank, has fueled this increased diesel usage. However, the country’s refineries cannot meet domestic diesel needs, leading to heavy reliance on imports. While most of Brazil’s diesel came from Russia after European and U.S. buyers shunned Russian supplies, U.S. refiners are now regaining market share as Russian refineries undergo maintenance and U.S. diesel prices fall. Market competition for diesel shipments to Brazil may intensify as refineries in Nigeria and Mexico become fully operational, potentially increasing global diesel supply.
Firms tapped to expand U.S. bird flu vaccine supply... GSK, Sanofi and CSL Ltd have secured $72 million from the U.S. government to ramp up production of bird flu vaccines, a health official said on Friday. The latest award includes $37.9 million for CSL, $23.4 million for Sanofi and $10.5 million for GSK. The companies will use the funds to fill vials and pre-filled syringes so that doses can be ready to distribute if needed, said David Boucher, director of Infectious Disease Preparedness and Response for the U.S. Department of Health and Human Services. It would more than double the supply of shots targeting bird flu, raising the country’s total supply of ready-to-use doses to 10 million within the first quarter of 2025.