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Conab releases crop projections for 2024-25... Brazil’s National Supply Company (Conab) presented prospects for planted area and production for soybeans and corn, titled “Perspectives for Agricultural Production in the 2024-25 Harvest.”
In its initial outlook, Conab projects soybean production rising 12.8% to 166.28 MMT, with planted area expected to increase 3% to 47.4 million hectares and improved yields.
Conab projected Brazil’s 2024-25 corn production at 119.8 MMT, a 3.6% year-over-year increase. The country’s safrinha corn crop, which represents around three-quarters of the national output, was projected to rise 4.1% to 94.02 MMT.
Conab’s first official estimates following field observations are set to be released on Oct. 15.
Brazilian bill would greatly increase soy crush for biodiesel production... The Brazilian Chamber of Deputies approved the “Fuels of the Future” bill last week, which could increase soybean crushing for biodiesel production to 55.8 MMT in 2025, up from the current 31 MMT forecast for 2024, according to the Brazilian Association of Vegetable Oil Industries (Abiove). The increase in soybean crushing will be necessary to meet targets for the mandatory blending of biodiesel in diesel, set by the bill at 15% in March 2025, with increases of 1 percentage point per year until reaching 20% in March 2030. The current mandatory blending is 14%.
Another change proposed by the bill is an increase in the blending of ethanol into gasoline, which would rise from a minimum of 22% to 27% and a limit of 35%. Currently, the blend can reach 27.5%, with a minimum of 18% ethanol.
The bill will now return to the Senate for approval. If approved, it would then be sent to President Luis Inácio Lula da Silva for his signature to become law.
Low waters on Paraguay River impeding barge traffic... Barge traffic to Bolivian and Brazilian ports on the Paraguay River has almost ground to a halt due to low water levels north of Paraguay’s capital Asuncion, said Raul Valdez, chairman of shipping trade group CAFyM. Navigation has almost completely halted in the northern sections of the Paraguay River. Over half of the river’s shipping capacity is either stopped or delayed, according to Paraguay’s main shipping association. Vessels are forced to carry smaller loads to avoid becoming stranded, extending travel times and causing delays.
This situation is severely impacting:
· Agricultural exports: Paraguay relies on rivers to transport 80% of its agricultural exports.
· Local economies: 1,600 fishermen have been left unemployed due to the low water levels.
· Regional trade: The Paraguay-Paraná waterway is crucial for transporting grains, corn, soybeans and other goods across South America.
Outlook: No significant rainfall is forecast soon. Experts worry this could establish a new norm for the region. The upcoming October-November rainy season is not expected to be sufficient to restore river levels to normal.
Australia frost, freezes raise crop concerns... Frost and freezes occurred in many areas of New South Wales, southeastern Queensland, Victoria and southeastern South Australia during the past week. There is some debate over the significance of the cold blast, World Weather, Inc. believes any lost yield should be limited. At this point in the growing season, World Weather believes very little wheat or barley was likely permanently harmed except in a few fields that experienced temperatures below freezing in southeastern Queensland or northeastern New South Wales.
Potential port strike update... The contract between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) is set to expire on Sept. 30. Negotiations between the two parties have stalled, raising concerns about a possible strike starting Oct. 1. The main points of contention are wage increases and limits on port automation. Negotiations broke down in July after the ILA learned that APM Terminals and Maersk were using automated technology to process trucks without union labor.
A strike would affect East Coast and Gulf Coast ports, which handle 43% of U.S. imports. It could disrupt $3.7 billion worth of trade per day. The strike would impact retailers, manufacturers, and farmers by delaying shipments and potentially shutting down production lines.
Many companies have been redirecting shipments to West Coast ports. Some businesses have brought in products earlier to frontload the peak shipping season. Air freight is being considered as an alternative for time-sensitive or high-value goods.
As of mid-September, the two sides appear far apart in negotiations. ILA has voted unanimously to support a strike if their demands are not met. There are calls for both parties to return to the negotiating table to avoid disruption. The parties could resume negotiations and potentially extend the current contract. President Joe Biden could use his influence to encourage negotiations or appoint a federal mediator. As a last resort, Biden could invoke the Taft-Hartley Act to implement an 80-day cooling-off period. But Biden administration officials told Reuters he does not intend block a port strike.
More concerns with weakening labor market, economy... U.S. retailers plan to hire around 520,000 seasonal workers for the upcoming holiday season, down from 564,200 in 2023, according to a report by Challenger, Gray & Christmas provided to Reuters. The decline reflects tightening consumer spending and slowing job growth. Andrew Challenger, the firm’s senior vice president, noted that seasonal hiring needs may fluctuate based on economic conditions, with the possibility that retailers may either struggle to fill positions or reduce hiring if the economy cools further. If the forecast holds, this would be the lowest seasonal hiring since 2022 and the second lowest since 2009, raising concerns about the broader U.S. economic outlook.