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Your Pro Farmer newsletter is now available... USDA unexpectedly raised its corn crop estimate and mildly reduced the soybean production forecast. We give perspective on where USDA might be headed with yields and crop forecasts in the coming months. It was cuts to old- and new-crop ending stocks for both corn and soybeans that garnered the most market reaction this month. The wheat data was neutral as USDA left ending stock unchanged in September for the eighth time in the last nine years. Aside from the report data, wheat traders were focused on declining private production forecasts in the Black Sea region and Europe. Hurricane Francine ripped through the Louisiana Gulf Coast and Delta, though crop damage was likely limited. The rains associated with the storm should at least temporarily improve water levels on the lower Mississippi River and could provide late-season moisture for some double-crop soybeans up into the Ohio River valley. On the economic front, U.S. consumer inflation inched down toward the Fed’s target, though the data wasn’t tame enough for more than a 25-basis point cut to interest rates as its monetary policy easing starts on Sept. 18. We cover all of these items and much more in this week’s newsletter, which you can access here.
NATO condemns Russia’s missile strike on civilian grain vessel, Russia issues warning... NATO strongly condemned a Russian missile strike on a civilian grain ship in the Black Sea on Thursday. “There is no justification for such attacks. Yesterday’s strike shows once again the reckless nature of Russia’s war,” NATO spokesperson Farah Dakhlallah said.
India scraps floor price for basmati rice exports, lowers wheat stocks limit to tame prices... India removed the floor price for basmati rice shipments to boost the premium variety’s competitiveness in the global market. The decision to scrap the minimum export price of $950 per metric ton is expected to boost demand. The country continues to curb non-basmati rice exports to keep a lid on domestic prices.
India also lowered the limit of wheat stocks traders and millers can hold to help boost availability and moderate prices for the domestic market. Traders and processors can now hold only 2,000 MT of wheat, down from 3,000 MT previously.
USTR finalizes modifications to China tariffs after review... The U.S. Trade Representative (USTR) finalized modifications to tariffs on Chinese products under the Section 301 investigation, primarily related to technology transfer and intellectual property issues. Following over 1,100 public comments, updates include changes to tariffs on medical supplies, an exclusion for certain equipment and adjustments for additional products like tungsten and polysilicon. While economic analysis shows minor negative impacts on U.S. economic welfare, the tariffs have positively affected targeted sectors. The modifications also include 100% tariffs on Chinese electric vehicles, with further machinery exclusions to be announced soon.
Changes include new timing and rates for tariffs on face masks, medical gloves, needles and syringes; an exclusion for enteral syringes; a proposal regarding coverage of additional tungsten, wafers and polysilicon tariff lines; an exclusion for ship-to-shore cranes ordered prior to May 14, 2024; an expansion of the scope of the machinery exclusions process to include five additional tariff lines; and modification of the coverage of proposed exclusions for solar manufacturing equipment.
Vilsack, Boozman discuss farm bill and Prop 12 impacts... At the National Pork Producers Council’s Legislative Conference, USDA Secretary Tom Vilsack and Sen. John Boozman (R-Ark.) addressed 120 pork producers, focusing on the 2024 Farm Bill and California’s Proposition 12.
Vilsack highlighted the financial strain Prop 12 places on pork producers, including construction costs of up to $4,000 per sow, rising pork prices in California and reduced sales volumes. He warned the law’s impact complicates pork inclusion in nutrition programs and risks farm closures, potentially leading to job losses.
Boozman expressed optimism about passing a farm bill this year, emphasizing the need for bipartisan support to address agriculture’s challenges, including Prop 12.
CAFO regulations case key decision for agriculture... The 9th Circuit Court heard arguments in a lawsuit filed by Food and Water Watch, seeking to compel EPA to reconsider its denial of a 2017 petition for stricter water pollution regulations at concentrated animal feeding operations (CAFOs). Environmental groups challenge the EPA’s 2023 decision to deny a petition for stricter regulations, arguing that the agency is neglecting its duty to control CAFO pollution. EPA defends its stance, prioritizing further studies before regulatory changes. Agricultural industry groups, citing a 2005 court decision, support the EPA’s current approach. The outcome could reshape CAFO regulation, with implications for environmental protection and the agricultural sector.
Of note: Senior Judge Jay Bybee called the situation “awkward,” suggesting the court may defer to EPA’s ongoing evaluations. The lawsuit highlights concerns over the nearly 10,000 unpermitted CAFOs. A decision may take up to a year.
Report highlights crucial role of ag checkoffs in national security, sustainability... A new report from The Directions Group (formerly known as Aimpoint Research) underscores the vital role U.S. agriculture checkoff programs play in national security, social betterment and environmental sustainability. “The Future of Agriculture Checkoffs” report emphasizes the importance of these programs in driving domestic demand, expanding export markets, fostering innovation and supporting economic stability for U.S. producers. The research identifies key areas where checkoff organizations can evolve to meet future challenges, including geopolitical risks and the shifting agri-food system. Mark Purdy, executive VP of Agri-Food at The Directions Group, stressed the need for checkoffs to continuously adapt to support the nation’s agricultural leadership.
GAO: China vastly outspends U.S. in global infrastructure lending... China outspent the US almost nine-to-one on infrastructure projects around the world over eight years, according to a report from the Government Accountability Office (GAO). China lent $679 billion under its Belt and Road Initiative from 2013 to 2021 for projects that involved highways, power plants and telecommunications, GAO said. The U.S. provided $76 billion during the same period. The biggest chunk of the Chinese money — $104 billion — went to Russia, in a sign of those two countries’ deepening cooperation. The rest funded a railway line in Kenya, hydroelectric power transmission in Angola, and other projects around the world, mostly in low and lower-middle income countries. GAO said the bulk of the Chinese funding was via government-to-government loans, underscoring Beijing’s willingness to lend money quickly and with minimum safeguards, as a way to extend its influence.
GAO also documented downsides of Belt and Road lending, citing examples of air and water pollution, and cases that infringed on the land rights of some indigenous people. While it said the Chinese loans were usually linked to “positive outcomes,” some projects had failed or been tainted by bribes.