Evening Report | September 12, 2024

Top stories for Sept. 12, 2024

Pro Farmer's Evening Report
Pro Farmer’s Evening Report
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USDA lowers corn, soybean ending stocks... USDA’s corn crop estimate came in higher than anticipated, but it cut ending stocks for both 2023-24 and 2024-25. For soybeans, the production estimate inched down from last month, while both the old- and new-crop ending stocks forecasts declined. Soybeans extended their corrective gains into the close after the report data. Corn had an initial negative reaction but also ended higher on the day. The report data was neutral for wheat, with no change in ending stocks this month – the eighth time in the last nine years with no adjustment in September. Click here to view all of the report details.

FSA updates certified acreage... USDA’s Farm Service Agency certified acreage as of Sept. 3 showed just modest changes, as we expected following our analysis of the August data.

· Corn: Planted/failed of 89.149 million acres (89.104 million acres in August), with 2.673 million acres of prevent-plant (2.670 million acres in August).

· Soybeans: Planted/failed of 86.110 million acres (86.046 million acres in August), with 774,582 acres of PP (774,962 acres in August).

· Wheat: Planted/failed of 49.690 million acres (49.666 million acres in August), with 390,272 acres of PP (389,373 acres in August).

· Cotton: Planted/failed of 10.784 million acres of upland and 193,643 acres of ELS (10.785 million acres for upland and 192,289 acres for ELS in August), with 314,627 acres of PP for upland and 33,658 acres of PP for ELS (314,564 acres for upland and 32,144 acres for ELS in August).

This too shall pass: Ag sector stakeholders anxious over low prices, inaction on new farm bill... The significant downturn in portions of the ag sector has more than a few stakeholders in a pessimistic and anxious mood. Ag markets have a clear history of ups and downs, with some extreme volatility at both ends of the price spectrum. Some farmers don’t understand why Congress can’t get a new and better safety net farm bill accomplished when it is so obvious to them legislation is needed. Southern Ag Today looks at this topic in a personal and interesting manner. Click here for details.

House passes bill to boost oversight of foreign farmland purchases... The House approved the Protecting American Agriculture from Foreign Adversaries Act, aimed at increasing oversight of farmland purchases by foreign investors, particularly those from China, Russia, Iran and North Korea. The legislation builds on previous efforts to monitor foreign ownership of U.S. agricultural land, including the Agricultural Foreign Investment Disclosure Act (AFIDA) of 1978.

Key aspects of the legislation include:

· The bill permanently adds the U.S. Secretary of Agriculture to the Committee on Foreign Investment in the United States (CFIUS) for transactions related to agricultural land, biotechnology, and other agriculture-related industries.

· It provides a mechanism for the USDA to notify CFIUS of particularly sensitive agricultural transactions, requiring the interagency process to determine whether a review is appropriate.

· The bill specifically targets oversight of purchases made by adversaries like China, North Korea, Russia, and Iran.

Proponents of the bill argue that it addresses several key concerns:

· The legislation aims to protect U.S. national security by scrutinizing foreign investments in critical agricultural assets.

· Supporters emphasize that food security is an essential component of national security.

· The bill seeks to safeguard economic opportunities for American farmers and prevent foreign adversaries from gaining control over U.S. agricultural resources.

Outlook: With its passage in the House, the bill now moves to the Senate for consideration. If enacted, it would represent a significant step in increasing federal oversight of foreign investments in U.S. agriculture, particularly from countries deemed adversarial to American interests. The White House announced it opposes the bill, calling it “unnecessary” because the changes are already included in the appropriations package.

Corn, soybean growers criticize proposed tariffs on imported herbicide 2,4-D... The National Corn Growers Association (NCGA) and American Soybean Association (ASA) expressed frustration with the U.S. Department of Commerce’s recommendation to impose preliminary countervailing duties on imported herbicide 2,4-D. The decision follows a petition by domestic producer Corteva Agriscience, which sought antidumping measures on imports from certain foreign suppliers. Farmers argue that domestic supply is insufficient and rely on imports to meet demand.

NCGA President Harold Wolle and ASA President Josh Gackle warned that the proposed duties could drive up costs and strain farmers’ operations at a difficult time, with corn prices having dropped over 40% in two years. Both organizations plan to advocate against the duties as the investigation proceeds, with a final decision expected in 2025.

EU urged to overhaul farm subsidy program, shifting focus to farmer income... A Brussels-commissioned report recommends a “major overhaul” of EU farm subsidies, proposing that farmers be paid based on income rather than land size, according to the Financial Times. The report, prompted by consultations with stakeholders following farmer protests, urges that current subsidy practices are unsustainable and should support “active farmers” based on their financial status. The findings were presented to European Commission President Ursula von der Leyen on Sept. 4.

The report recommends moving away from the current system of subsidies based on land size to one focused on farmer income. This shift aims to:

· Target support to farmers who need it most, particularly small and mixed farms, young farmers and those in areas with natural constraints.

· Ensure more effective use of the €387 billion CAP budget.

· Address criticisms that the current system disproportionately benefits large landowners.

The report also emphasizes the need for greater environmental sustainability:

· It calls for a “new sustainability benchmarking” system to standardize assessments of sustainable practices.

· The proposal includes increasing the portion of direct payments linked to environmental measures.

· A temporary off-budget fund is suggested to assist farmers in transitioning to more sustainable practices.

Von der Leyen has committed to studying the recommendations carefully. She plans to present a roadmap for agriculture and food policy within the first 100 days of her next mandate.

Bottom line: This is a potential paradigm shift in how the EU approaches farm subsidies and agricultural policy, aiming to balance economic support for farmers with environmental sustainability goals.

Ukraine says Russia hit grain vessel near Romania... Ukraine accused Russia of using strategic bombers to strike a civilian grain vessel in a missile attack in Black Sea waters near NATO member Romania. President Volodymyr Zelenskyy said the vessel carrying Ukrainian wheat to Egypt had been hit overnight by a Russian missile just after it left Ukrainian territorial waters. Zelenskyy said there were no casualties, adding, “wheat and food security should never be targets for missiles.”

Chinese cargo cranes at U.S. ports raise espionage, security concerns... A year-long congressional investigation has found that Chinese-manufactured cargo cranes used at U.S. seaports contain embedded technology that could potentially allow Beijing to access and disrupt operations, according to the Wall Street Journal. The report, led by Republican lawmakers, highlighted that ZPMC, the crane manufacturer, had pressured port operators to allow remote access to cranes for maintenance purposes. This remote access, facilitated by cellular modems, could be exploited by the Chinese government, as China’s national-security laws require companies to cooperate with state intelligence agencies.

While some ports resist such access, others have allowed it, seeking lower costs or stronger warranties. The report emphasized the cranes pose a significant national security risk, especially considering a potential U.S.-China conflict over Taiwan. In response to these concerns, the Biden administration has proposed investing over $20 billion to replace foreign-made cranes at U.S. ports.

ZPMC denied responsibility for installing modems and has delayed responding to congressional inquiries due to Chinese legal requirements. China’s embassy dismissed the concerns as protectionism. Despite the findings, the American Association of Port Authorities claims there have been no known security breaches due to the cranes.

U.S. producer prices rose more than expected in August, driven by services costs... U.S. producer prices rose 0.2% in August, slightly above expectations for a 0.1% increase. The producer price index (PPI) increased 1.7% annually. Excluding food and energy, core PPI climbed 0.3% from July and 2.4% from year-ago.

Despite this uptick, investors still expect a quarter-point interest-rate cut by the Federal Reserve at its meeting next week. This follows Wednesday’s consumer price index, which reflected diminishing cost price pressures.

ECB delivers second rate cut amid sluggish growth and cooling inflation... The European Central Bank (ECB) reduced its deposit rate a quarter-point, the second such cut this year. This widely expected move follows slow economic growth and inflation falling closer to ECB’s 2% target in August. Attention now shifts to the ECB’s next steps, with economists divided on whether the central bank will pause or proceed with another rate cut.