Evening Report | September 3, 2024

Check our advice monitor on ProFarmer.com for updates to our marketing plan.

Corn conditions unchanged... USDA rated 65% of the corn crop as “good” to “excellent” as of Sunday, unchanged from the previous week, whereas analysts expected a one-percentage-point decline. However, there was a one-point drop in the top category. The “poor” to “very poor” rating declined one point to 12%.

USDA reported 90% of the crop was in dough stage (90% average), 60% was dented (58%) and 19% was mature (13%).

Soybean conditions decline more than expected... USDA rated 65% of the soybean crop as “good” to “excellent,” down two points from last week. Analysts expected a one-point decline. The “poor” to “very poor” rating increased one point to 10%.

USDA reported 94% of the crop was setting pods (93% average) and 13% was dropping leaves (10%).

Cotton conditions improve... USDA rated 44% of the cotton crop as “good” to “excellent,” up four points from last week. The “poor” to “very poor” rating dropped four points to 24%. The Texas crop was rated 36% in the top two categories and 31% in the bottom two.

USDA reported 95% of the crop was setting bolls (94% average) and 37% had bolls opening (31%).

Spring wheat harvest running at average pace... USDA reported spring wheat harvest reached 70%, equal to the five-year average but one point more advanced than analysts expected. Harvest stood at 61% in top producer North Dakota, one point behind average.

Winter wheat planting starts on average pace... USDA reported 2% of the winter wheat crop was seeded as of Sunday, equal to the five-year average. Planting was 1% done in Kansas (0% average), while Texas and Oklahoma hadn’t started yet (1% average for both).

Record July soybean crush... U.S. processors crushed 193.4 million bu. of soybeans in July, which was a record for the month and 1.7 million bu. more than analysts expected. The crush pace increased 9.7 million bu. (5.3%) from June and was 8.6 million bu. (4.7%) above July 2023.

To reach USDA’s 2023-24 forecast of 2.29 billion bu., crush needed to total 170.3 million bu. in August, up 0.8% from last year. We estimate 2023-24 soybean crush at 2.300 billion bushels.

July corn-for-ethanol use easily tops expectations... Corn-for-ethanol use totaled 473.5 million bu. in July, whereas analysts expected 462.8 million bushels. Ethanol use increased 27.4 million bu. (6.1%) from June and was 18.3 million bu. (4.0%) above last year.

To reach USDA’s 2023-24 forecast of 5.450 billion bu., corn-for-ethanol use in August needed to total 464 million bu., up 5.0% from last year. We estimate 2023-24 corn-for-ethanol use at 5.455 billion bushels.

Weakening farm income prospects weigh on farmer sentiment... Farmer sentiment nose-dived in August, according to the Purdue University/CME Group Ag Economy Barometer, which fell 13 points (11.5%) to a reading of 100. The index dropped 15 points (13.0%) from August 2023. The Index of Current Conditions fell 17 points (17.0%) to 83, while the Index of Futures Expectations dropped 11 points (9.2%) to a reading of 108.

The survey noted, “Weakening farm income prospects weighed on farmer sentiment as the outlook for a bountiful fall harvest were more than offset by declining crop prices. This month’s decline in the barometer takes farmer sentiment back to the average level observed from fall 2015 to winter 2016, a period when farm incomes were declining sharply. The weakness in farmer sentiment could indicate that farmers expect this year’s farm income downturn to last for an extended period.”

Although the short-term farmland index remained above 100, signaling that more survey respondents still expect values to rise over the next year than those anticipating values to decline, farmers are less optimistic about farmland values this summer than in recent years. Notably, the short-term farmland index posted its lowest reading since spring 2020. Despite the weakness in farmer sentiment and expectations for weak farm financial performance, 70% of crop farmers in this month’s survey said they expect farmland cash rental rates to remain about the same in 2025 as this year.

Click here to view the full report.

Vilsack open to continuing as USDA Secretary under Harris administration... USDA Secretary Tom Vilsack told Radio Iowa he hasn’t ruled out continuing in the role if Kamala Harris wins the presidency and asks him to stay on. Vilsack emphasized his lifelong dedication to supporting farmers and small towns, expressing his desire to continue contributing to these communities. Vilsack, who served as USDA Secretary during the Obama administration and returned under President Joe Biden, is currently the second-longest-serving Ag Secretary in U.S. history. Speaking at the Farm Progress Show in Boone, Iowa, last week, Vilsack declined to comment on Iowa Governor Kim Reynolds’ request for a USDA waiver to provide state-purchased food to needy families, noting the request is still under review.

Trump confident in future U.S./China relations despite contradictory trade stance... During a two-part interview this weekend with Mark Levin on his Fox News program, former President Donald Trump expressed confidence in maintaining a “good relationship” with China if he wins a second term, even as he continues to advocate for increased tariffs on Chinese imports. This reflects the complex and often contradictory nature of Trump’s approach to U.S./China relations during his previous administration. While he initially fostered a positive relationship with Chinese President Xi Jinping, Trump’s imposition of significant tariffs on Chinese goods led to a trade war, straining economic ties and complicating diplomatic relations. Despite the economic costs, Trump’s hardline trade policies resonated with his voter base, highlighting the political dimensions of his stance on China.

“I think there is no greater critic of China than me,” Trump said. “But I respected China, and I respected President Xi and I had a great relationship with them… They took advantage of us. And why shouldn’t they? I mean, if we were stupid enough to let them do it, they made hundreds of billions of dollars a year, $507 billion. And most years over that and now it’s more, and I had them down to a much smaller,” he said. “And I put massive tariffs on them. Nobody got any money from China, but I got hundreds of billions of dollars from China.”

Bottom line: Trump has consistently argued for higher tariffs, saying they’re a good tool for negotiating leverage. Vice President Kamala Harris has yet to lay out her trade policy vision in detail.

Koch acquires $3.6 billion Iowa fertilizer plant amid antitrust concerns... Koch Ag & Energy Solutions (KAES) successfully completed the acquisition of a major fertilizer plant in Wever, Iowa, from OCI Global for $3.6 billion. This acquisition, announced in December 2023, gives KAES full ownership of the state-of-the-art facility, which has the capacity to produce 3.5 MMT of nitrogen fertilizers and diesel exhaust fluid annually. The plant, which opened in 2017, is a significant addition to KAES’s existing operations, which include several nitrogen production facilities in the U.S., Canada and other regions.

The deal faced significant opposition from local farmers and advocacy groups due to concerns about increased market consolidation in the fertilizer industry. These groups argued the acquisition could lead to higher fertilizer prices and reduced competition, as Koch Industries is already one of the dominant players in the market, controlling a substantial share of the U.S. nitrogen-based fertilizer market. Farmers and policymakers expressed fears the acquisition would exacerbate the already high costs of fertilizers, which are crucial for agricultural production in Iowa and beyond.

The Federal Trade Commission (FTC) and the Department of Justice were urged to investigate and potentially block the merger due to these antitrust concerns. However, the acquisition proceeded, marking a significant expansion of Koch’s presence in the fertilizer market. The acquisition also involved the transfer of approximately 300 employees to Koch Fertilizer, a subsidiary of KAES.

Johnson to propose short-term funding bill tied to controversial voting requirements... Punchbowl News reports that Speaker Mike Johnson (R-La.) is set to introduce a short-term funding bill next week that will keep federal agencies open until March, maintaining spending at levels established by the Fiscal Responsibility Act, but excluding “side deals” made between President Joe Biden and former Speaker Kevin McCarthy. In a move to gain support from former President Donald Trump and the House Freedom Caucus, Johnson plans to attach the SAVE Act to the bill. This act, authored by Rep. Chip Roy (R-Texas), would require proof of citizenship for voter registration in federal elections. The inclusion of the SAVE Act is expected to face strong opposition from Democrats and the White House.

The SAVE Act passed the House with five Democratic votes back in July. But it will face certain defeat in the Senate, should it get there.

More likely to occur is a continuing resolution that will extend into early December, leaving both sides to work on an omnibus package — or multiple minibuses — during the lame-duck session.