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Livestock producers: Extend feed coverage... Soymeal futures have continued to decline after we extended coverage in the cash market last Friday. With October marking a traditional period for a market bottom, we advise livestock producers to extend cash soymeal coverage another month through November. We also advise covering corn-for-feed needs in the cash market for the remainder of October.
Russia continues recent attacks on Ukraine’s ports... A Russian ballistic missile attack on Wednesday on the port infrastructure of Ukraine’s southern Odesa region killed five people and injured nine, Deputy Ukrainian Prime Minister Oleksiy Kuleba said. The attack on the port of Chornomorsk was the third in the region in the past four days. Kuleba said a Panamanian-flagged container ship, the Shui Spirit, sustained damage in the attack.
Fed minutes reveal debate about size of September rate cut... Minutes from the Fed’s September monetary policy meeting noted a “substantial majority” of officials supported starting the easing cycle with a 50-basis-point cut to interest rates. However, “some” participants favored only a quarter-point reduction and “a few others indicated that they could have supported such a decision.” While Governor Michelle Bowman placed the only dissenting vote against the 50-point cut, the minutes revealed a deeper split among officials than implied by the near-unanimous decision. Some say that suggests Fed Chair Jerome Powell guided the committee to a larger move.
One issue for some officials was that such a large move was out of step with their intent to lower interest rates gradually. “Several participants noted that a 25 basis point reduction would be in line with a gradual path of policy normalization that would allow policymakers time to assess the degree of policy restrictiveness as the economy evolved,” according to the minutes.
The minutes provided further detail on the breadth of opinion within the Fed as policymakers approved a rate cut usually reserved for moments when the central bank is worried the economy is slowing fast and needs the support of looser financial conditions. “It was important to communicate,” the minutes said, the outsized cut “not be interpreted as evidence of a less favorable economic outlook.”
Record August pork exports... The U.S. exported 560.2 million lbs. of pork during August, which was a record for the month. Pork shipments declined 6.5 million lbs. from July but increased 32.8 million lbs. (6.2%) from last year. Through the first eight months of this year, pork shipments totaled 4.964 billion lbs., up 206.1 million lbs. (4.6%) from the same period last year. Big increases in exports to Mexico and South Korea more than offset declines to some of the other top trading partners, including China.
Beef exports totaled 238.2 million lbs. during August, down 19.4 million lbs. from July and 22.1 million lbs. (8.5%) less than last year. That was the smallest monthly export total since January. Through August, beef shipments reached 2.011 billion lbs., down 74.6 million lbs. (3.6%) from the same period last year. Of the top five markets for U.S. beef, only shipments to Mexico increased from year-ago.
Update: EU proposes delay of deforestation regulation amid controversy... The European Union’s Deforestation Regulation (EUDR), passed in 2023 to curb global deforestation by regulating imports tied to forest destruction, faces challenges as its December 2024 implementation date nears. Key hurdles include lack of guidance, logistical concerns and international pushback from major exporting countries like Brazil and Indonesia. Earlier this month, the European Commission proposed a 12-month delay, sparking mixed reactions. Businesses and conservative groups welcomed the postponement, while environmental groups criticized it as a setback for climate goals. The delay requires approval from the European Parliament and Council of the EU. If passed, larger companies would have until Dec. 30, 2025, to comply, while small and medium-sized enterprises would have until June 30, 2026.
Of note: ADM says it remains committed to its re:source™ Deforestation-free Soybean Program to help producers comply with the new EU Deforestation Regulation. But traders are now wondering whether ADM will pull the 20-cent premium on beans they have said they will pay this year for those that signed up with FBN proving no deforestation. As of July, ADM had almost 5,300 farmers enrolled in the program, with more than 4.6 million acres across 15 states participating for the 2024 season.
ADM has stated they can supply all existing European customers with compliant products when the new rules take effect.
Generally good start for 2024-25 Canadian grain exports but wheat shipments slower... Exports of Canadian grain for the first month of the 2024-25 marketing year were off to a good start with data from the Canadian Grain Commission showing increases for several crops. Overall, 2.79 MMT of bulk grain were exported from licensed facilities in August, up from 2.46 MMT a year ago, CGC reported.
Canola exports totaled 956,300 MT, more than twice the amount from August 2023. The bulk of the canola, 718,000 MT, was shipped to China, versus 233,300 MT a year ago.
China was also Canada’s top customer for barley, with 34,600 MT shipped compared to none a year ago. Total barley exports tallied 46,800 MT compared to 8,500 MT in August 2023.
On the flip side, Canada’s wheat exports in August tallied 1.24 MMT, down from nearly 1.40 MMT a year ago.
Algeria bars France from wheat import tender as relations sour... Algeria excluded French companies from a wheat import tender this week and required that participating firms did not offer French-origin wheat, in apparent fallout from renewed diplomatic tensions between Algiers and Paris, trading sources told Reuters. The move, echoing a dispute three years ago that led to France being sidelined from its former colony’s wheat tenders for months, may reinforce the recent dominance of Black Sea supplies, led by Russian wheat, in Algeria’s massive import market.
USDA seeks feedback on cattle market regulations amid concerns over pricing practices... USDA’s Agricultural Marketing Service (AMS) issued an advance notice of proposed rulemaking (ANPR) to gather input on regulatory options for addressing price discovery and fairness in cattle markets. The focus is on alternative marketing arrangements (AMAs), which now dominate cattle trading and often avoid using cash or spot market prices. AMS is particularly concerned about formula price contracts with fluctuating base prices and whether they may violate the Packers and Stockyards Act or antitrust laws. A 60-day comment period will follow ANPR’s publication in the Federal Register, with USDA saying the input gathered will direct future regulatory actions.
California confirms third human H5N1 case, identifies more possible cases... California reported a third human case of H5N1 virus on Wednesday in a person who had contact with infected dairy cattle and said it identified two more possible cases in people. The confirmation brings U.S. H5N1 infections among people exposed to dairy cows and poultry to 16 this year. Another person in Missouri who had no immediate known contact with animals also tested positive. There is no known link or contact between any of California’s confirmed or possible cases, suggesting the virus spread from animals to humans in the state and not from person to person, the California Department of Public Health said.