Evening Report | October 7, 2024

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Corn conditions unchanged... USDA rated 64% of the corn crop as “good” to “excellent” as of Sunday, unchanged from the previous week, as expected. The “poor” to “very poor” rating increased one point to 13%.

USDA reported 87% of the crop was mature, six percentage points ahead of the five-year average. Harvest reached 30%, three points ahead of average but four points slower than analysts expected.

Soybean conditions decline, as expected... USDA rated 63% of the soybean crop as “good” to “excellent,” down one point from last week, as expected. The “poor” to “very poor” rating held at 11%.

USDA reported 90% of the crop was dropping leaves, five points ahead of average. Harvest advanced to 47%, 13 points ahead of average and three points more than analysts expected.

Cotton conditions decline again... USDA rated 29% of the cotton crop as “good” to “excellent,” down two points from last week. The “poor” to “very poor” rating declined two points to 35%.

USDA reported 82% of the crop had bolls opening, two points ahead of average. Cotton harvest reached 26%, four points ahead of average.

Winter wheat planting passes half-way point... USDA reported winter wheat seeding reached 51%, one point behind average and three points slower than analysts expected. Planting stood at 51% in Texas (50% average), 32% in Oklahoma (36%) and 52% in Kansas (50%).

Winter wheat emergence stood at 25%, equal to the five-year average.

Hurricane Milton explodes to Category 5... Milton strengthened into a Category 5 hurricane as it bears down on Florida’s west coast. World Weather Inc. noted, “Milton’s rapid intensification includes a 22 mb drop in four hours and a 92-mph wind increase in 24 hours, which is only succeeded by Hurricane Wilma in 2005 and Felix in 2007 on the record books. Milton is currently projected to make landfall near the Tampa Bay area late Wednesday into early Thursday as a strong category 3 or low-end category 4 hurricane. Citrus crops are especially vulnerable to Milton’s impacts, particularly if the storm veers slightly south of Tampa. Fruit droppage and tree damage is possible with high wind speeds. Other fruits and vegetables may also see damage from flooding. Sugarcane should see minor impacts as long as the storm remains in its current path, though if Milton veers southward, more serious impacts may occur.”

China continues to outperform U.S. ports... The Container Port Performance Index 2023 highlights a significant gap between the efficiency of Chinese and American ports, with implications for global trade and economic competitiveness. This ranking system is based on the amount of time a ship spends in port, which is a crucial metric for assessing port efficiency and overall trade facilitation.

The Container Port Performance Index 2023 reveals a stark contrast between Chinese and American port efficiencies:

· Yangshan port in China ranks No. 1 globally

· Not a single U.S. port appears in the top 50

· The highest-ranked American port, Charleston, South Carolina, comes in at 53rd place

China has been actively investing in ports throughout Latin America, which could have significant implications for regional trade dynamics and U.S. influence:

· The port of Chancay in Peru is a prime example of China’s port investments in the region. This $3.5 billion project is 60% owned by the China Ocean Shipping Group (Cosco) and is set to become a key hub connecting Latin America and Asia.

· Chinese state-owned companies have built, financed, or currently operate several ports and related infrastructure in strategic locations across the Western Hemisphere, including areas near the Panama Canal and the Caribbean Sea.

Implications for trade and influence. China’s superior port performance and investments in Latin American infrastructure could have several consequences:

· Trade efficiency: Chinese-operated ports may offer faster processing times, potentially redirecting trade flows in their favor.

· Economic influence: By investing in and operating key ports, China can strengthen its economic ties with Latin American countries.

· Strategic positioning: These ports could potentially be used for more than just commercial purposes, raising concerns about their use for intelligence gathering or military purposes.

U.S. competitiveness: The lack of highly efficient U.S. ports in the global rankings could impact America’s ability to compete in global trade. The United States has been taking steps to counter China’s growing influence in Latin American ports:

· The U.S. International Development Finance Corporation provided a $150 million loan to Ecuador to expand and modernize a port.

· The U.S., along with the Inter-American Development Bank, plans to co-finance $3 billion worth of high-quality critical infrastructure projects throughout Latin America and the Caribbean.

Reason behind the U.S. lack of port competitiveness: Labor unions. U.S. labor unions, particularly those representing dockworkers, are actively fighting against automation at U.S. ports. This is evident from the recent strike and ongoing negotiations between the International Longshoremen’s Association (ILA) and port employers. ILA has taken a firm stance against automation at ports:

· The union is “steadfastly against any form of automation — full or semi — that replaces jobs or historical work.”

· ILA President Harold Daggett called for “absolute airtight language that there will be no automation or semi-automation.”

· The union’s executive vice president, Dennis Daggett, labeled automation as a “cancer.”

Last week’s three-day strike by ILA workers on the East and Gulf Coasts was partly motivated by concerns over automation. The union is seeking protection from technologies like driverless trucks, automated cranes, and automated gate checkpoints. Automation remains a sticking point in ongoing contract negotiations.

West Coast dockworkers faced similar issues in the 1960s, negotiating protections against job losses due to automation. The current ILA contract includes a clause requiring both parties to agree on workforce protections before implementing semi-automated technology.

White House to host farmer-centered event to boost rural support ahead of election... The White House is holding an event on Tuesday focused on farmers, as Democrats aim to highlight rural investments and gain support in key battleground states before the upcoming election. Key speakers include USDA Secretary Tom Vilsack, USTR chief agricultural negotiator Doug McKalip and White House policy adviser Neera Tanden. The event follows the Biden administration’s announcement of $7.7 billion in climate-smart agriculture funding and $1.3 billion in rural energy investments, aiming to sway rural voters and reduce the GOP’s stronghold in these areas.

USDA invests over $11 million to strengthen U.S. dairy industry... USDA announced $11.04 million in funding under the Dairy Business Innovation Initiatives (DBI) to support small and mid-sized dairy businesses. The grants aim to enhance production, marketing and distribution of dairy products, providing technical assistance and fostering innovation. Funds will be distributed to four regional initiatives across the U.S., including in California, Tennessee, Vermont and Wisconsin, to improve dairy supply chain resiliency and create economic growth.