Russia

Global Demand for Cheese Continues to Climb

Fri, 19 Jan 2024 16:00:00 GMT

People can’t get enough cheese, regardless of what continent they live on. Cheese has long been a staple in many countries’ cuisine, and in those cultures where cheese has more recently been introduced, demand continues to rise. “Global cheese demand just keeps climbing,” said Sarina Sharp, analyst with the Daily Dairy Report.

According to USDA’s semi-annual Dairy: World Markets and Trade report, global cheese consumption is projected to reach a new record high of 21.6 million metric tons, or 47.7 billion pounds, this year. Compared to 2023, global cheese consumption is up 1.2% and compared to 2019, it’s up 5.7%.

“Global cheese production is rising even faster than demand, and the United States is the major contributor to the surplus,” Sharp noted. USDA expects that U.S. cheese production will be 9.8% greater in 2024 than it was in 2019, outpacing growth in domestic consumption, which is likely to rise 8.3%. During the same period, foreign cheese output is projected to grow 4.2%, which will not keep pace with the expected 4.6% increase in foreign cheese consumption.”

Sharp’s math makes it clear that the U.S. cheese industry will continue to depend on exports, but she quickly adds that the news on going forward is positive. USDA expects that each of the world’s major cheese importers will import at least as much cheese this year as they did in 2023.

“However, slower economic growth and waning populations have softened demand in key Asian markets. Although Japan and South Korea are likely to import more cheese this year than they did in 2023, their imports are expected to still fall short of 2020, 2021, and 2022 volumes,” Sharp said. “Somewhat softer demand from these markets will likely be offset by record-setting imports from Mexico and China and record-tying purchases from Russia, the world’s second-largest market for imported cheese.”

USDA expects U.S. cheese exports to climb 7.6% this year to a record high. In late 2023, U.S. cheese prices declined even as values climbed in Europe and Oceania. That price gap will likely provide U.S. exporters with some new business in the first half of 2024.

“To keep product moving, though, prices will have to stay low enough to retain buyers’ attention,” Sharp said. “Strong exports this year could help lift the U.S. cheese market from its recent depression, but with cheese output heavy on both sides of the Atlantic, the ceiling on the cheese market will likely need to be quite low.”

For more on milk prices, read:

USDA Allegedly Impacted by Russian-Speaking Hackers

Thu, 22 Jun 2023 17:04:38 GMT

USDA is investigating a possible data breach related to a broader hack of U.S. government agencies.

Officials in the Ag department say the data breach allegedly involves a contractor and impacts a small number of workers—roughly 30, which is a small pool considering USDA employees 100,000 people.

According to USDA, Russian-speaking hackers are the likely suspects and the department will contact and provide support to anyone affected.

The Office of Personnel Management and two organizations within the Department of Energy also were apparently targeted or breached.

Ukraine’s Dairy Sector Still Devastated by Russian Invasion

Wed, 05 Apr 2023 13:00:00 GMT

More than a year after Russia invaded Ukraine, the war continues to have devastating consequences on Ukrainian society and businesses, including dairy. On March 6, Ukraine’s economy ministry lowered the country’s forecast for 2023 gross domestic product (GDP) from 3.2% to 1%.

According to the Kyiv School of Economics, the damage from Russia’s war on the Ukraine has caused $143.8 billion in economic damage. The severe damage caused to Ukraine’s infrastructure system, including transportation and energy, has rippled through most business sectors, including dairy, according to Monica Ganley, analyst with the Daily Dairy Report and principal of Quarterra, a consulting firm in Buenos Aries.

“Dairy farms, especially those in the north and northeastern parts of Ukraine, have suffered extreme damage from the war,” Ganley said.

According to a recent report from USDA’s Foreign Agricultural Service, Ukraine’s dairy herd declined by more than 100,000 head, or 6.3%, to 1.49 million between January 2022 and January 2023. While the Russian invasion has accelerated contraction of the Ukraine’s dairy herd, the country’s dairy sector has been under pressure for decades. Since January 2021, the national herd has fallen by 232,000 cows.

“Many of Ukraine’s dairy producers run small operations, and without deep financial resources, they are heavily dependent on a continuous income stream from the sale of their milk,” Ganley noted. “When the war began in early 2022, many dairy processors were forced to shutter their operations and ceased paying producers. Without milk checks coming in, producers whittled down their herds.”

As Ukraine pushed Russian advances back toward the border, some of the infrastructure damage was repaired, and processors began to rebuild their operations. By late last year, many processors were, once again, open to taking in more milk. Ukrainian producers, however, have been reluctant to rebuild their herds because they are still operating in an environment of persistent uncertainty, she added.

“Dairy producers in Ukraine also cut back their operations due to labor shortages,” Ganley noted. “Many dairy workers left to fight on the front lines, and the exodus of 3 million people seeking refuge in nearby countries and elsewhere resulted in a shortage of available labor across the value chain.”

Curfews and logistical challenges created by road closures further exacerbated labor shortages, which created hiring challenges and new traffic patterns for agricultural goods.

“The Russian invasion of Ukraine has been devastating in many ways and the country’s dairy sector has been just another casualty of the conflict,” Ganley said. “It will likely to years for the sector to rebuild.”

First-Hand Accounts of War’s Impact on Ukrainian Agriculture

Thu, 20 Oct 2022 11:00:00 GMT

The Russian invasion of Ukraine and resultant, ongoing battle now is entering its eighth month.

While much of the world has grown disinterested and weary of the ongoing war, the situation remains dire for those on the ground in Ukraine. And because Ukraine once was referred to as the “breadbasket of the world,” the war’s impact on global food production and availability comes in both ripples and shockwaves.

The UK’s Agriculture and Horticulture Development Board (AHDB) hosted a recent webinar on which guest Roman Slaston of the Ukrainian Agribusiness Club shared insights on how the war would impact Ukrainian agriculture for years to come.

Slaston said Ukraine currently is harvesting 25% less corn for the 2022 growing season. But oilseed crop yields in Ukraine-controlled territories actually have been higher than expected. As farmers look to putting in the 2023 crop, oilseeds like sunflowers, soybeans, and rapeseed are expected to be more profitable than corn, wheat, or barley, and plantings will be shifted accordingly. Winter wheat and barley planting levels are set to be 25-30% lower.

Fertilizer applications are expected to drop by 40% or more in 2023, due to both cost and supply issues. Farmers currently are sitting on large grain stores due to closure of Black Sea ports for most of the summer, plus intermittent rail service. The result is current grain prices below the cost of production.

Larisa Guk, president of the Union of Agrarian Journalists of Ukraine, recently told a forum hosted by the International Federation of Agricultural Journalists (IFAJ) that low wheat prices are especially troublesome right now. “The logistic costs are higher than the grain price,” she stated. “There is a danger that farmers will simply refuse to sow winter wheat this fall.”

Fellow Ukrainian agricultural journalist Iuri Mykhailov told the same IFAJ audience that Russians have looted Ukrainian farms, stealing agricultural machinery, spare parts, fuel, and grain. They reportedly also have killed millions of chickens and tens of thousands of cows and horses.

“The fulfillment of numerous business contracts has been breached, which has caused a domino effect throughout the global food supply chain,” stated Mykhailov.

At the same time, Russia has incurred heavy losses of both troops and military equipment. “If the war continues, Russia’s economy inevitably will collapse,” Mykhailov predicted.

The journalists noted that even after the conflict subsides, it will take years to rebuild the production sites and infrastructure necessary to return Ukraine to its previous world agricultural standard. Many agricultural fields are mined, and some may never return to crop production due to heavy shelling and missile fire.

“Nobody knows when the war will end,” declared Guk. “Nobody knows when the ports will be unlocked. No one knows what the price of wheat will be and how much the fertilizers will cost. Farmers just want to grow bread and feed people.”

For more on the Russian invasion of Ukraine, read:

Lely Ceases Commercial Activities Throughout Russia and Belarus

Thu, 22 Sep 2022 04:12:56 GMT

Russia’s recent attack on Ukraine is the reason thousands of companies across the globe have recently cut ties with Russia. With Western sanctions intensifying, companies like Apple, Ford and Exxon Mobil have all announced they will suspend or halt business operations in Russia.

Lely, one of the leading dairy technology companies in the world, is now among this ‘banned business’ list, as they recently announced they will immediately cease commercial activities throughout Russia and Belarus.

“Lely is shocked by Russia’s military invasion of Ukraine,” the company said in a press release. “The Ukrainian people are in the midst of a war and face great uncertainty. Our thoughts are with the people directly affected by this crisis. Lely condemns Russia’s invasion and is immediately ceasing commercial activities in the region. This means that we will stop supplying robots to Russia and Belarus.”

According to NPR, Russia is buckling under a raft of severe wide-ranging sanctions imposed by the U.S. and its allies. The impact from these sanctions have deepened the country’s economic pain following its invasion of Ukraine.

“As a global supplier of dairy farm robots, we are aware of our role in global food supply, including in Ukraine, Russia and Belarus,” Lely says. “We want to do right by the interests of the population (food supply), cows (animal welfare) and the promises we have made to our farmers, among others. On the other hand, we condemn all forms of violence used by Russia in this crisis. The current actions are not compatible with our values, and this has made us decide to completely stop our commercial activities in Russia and Belarus.”

Lely says it will not unilaterally stop supporting existing farmers in Russia, Belarus and surrounding countries due to the only reason of supplying parts and maintenance products to existing customers who are not on a sanctions list. The company says this is in the interest of supporting animal welfare and acknowledging the role farmers have in the country’s food supply.

First Thing Today: North Korea Tensions Rise

Wed, 21 Sep 2022 07:45:01 GMT

Good morning!

Soybeans push to new highs for the month... Corn and soybean futures started the overnight session under pressure, but both markets are now trading high-range, with corn up a penny and soybeans 7 to 8 cents higher. Winter wheat futures are up 1 to 2 cents, with spring wheat posting even stronger gains. The U.S. dollar index is under moderate pressure, with crude oil futures also favoring the downside.

Harvest-friendly forecast... The National Weather Service forecast for Sept. 27 through Oct. 1 calls for normal temperatures and dry weather in the western Corn Belt and into Illinois. Indiana and Ohio are expected to see warm temperatures and normal rainfall. The Central and Southern Plains are expected to see cool, wet weather over this timeframe.

North Korean tensions rise... North Korea reacted to President Donald Trump’s latest sanctions, announced yesterday, with Kim Jong Un warning of the “highest level of hard-line countermeasure in history.” The country’s foreign minister suggested this could include testing a hydrogen bomb in the Pacific. Asian stocks closed slightly lower into the weekend following the increase in tensions.

NAFTA 2.0 negotiators meet for third round of talks in Ottawa... Round 3 of North American Free Trade Agreement (NAFTA) modernization renegotiations will include sensitive topics like dispute settlement and rules of origin for automobiles as negotiators meet Sept. 23-27 in Ottawa. An agreement on digital trade is expected to be an early win for the negotiators. Commerce Secretary Wilbur Ross is getting ahead of a more challenging third round of NAFTA negotiations with Mexico and Canada by pushing for tougher rules of origin, based on the Trump administration’s belief that auto imports in particular have too little U.S. content. U.S. Trade Representative Robert Lighthizer will submit new proposals covering rules of origin, labor standards in Mexico and dispute resolution. U.S. negotiators view achieving several changes to NAFTA as necessary for meeting Trump’s goal of cutting the U.S. trade deficit. This includes: limiting Buy American procurement waivers, increasing U.S. content in rules of origin, raising Mexican wages, and changing investment rules.

Strong Russian wheat shipments thus far in 2017-18... Russia will likely export 4.1 MMT of wheat in September, projects the ag consultancy SovEcon. This would be a 15.8% increase from year-ago and 195,000 MT increase from August. For the first three months of the 2017-18 marketing year, the consultancy projects grain exports will total 9.4 MMT, up 1.058 MMT (12.7%) from this point in 2016-17. Egypt has been its top customer.

Rainy weather reportedly slows Russian winter grain seeding... Rainy weather has delayed winter grain plantings in Russia, reports Pyotr Checkmarev, head of the ag ministry’s crop growing department. He also said “next year does not really promise a good harvest,” which is why the country should have reserves for next year. But the latest ag ministry data does not reflect any major delays. As of Sept. 21, 10.0 million hectares had been planted, or 57.5% of the intended winter grain area. That compares to seedings of 10.1 million hectares at this point last year. Regarding the 2017 grain crop, the ag ministry is sticking with its 110 MMT by clean weight peg, which is well below crop estimates from other analysts topping 130 MMT. The ministry explains that there is risk some areas won’t harvest their crop before cold weather hits.

Lagging EU wheat shipments... From the start of the 2017-18 marketing year through Sept. 19, The European Union has exported 3.7 MMT of soft wheat, down 42% from last year at this point, official trade data shows. The region has struggled to compete against an influx of cheap wheat out of the Black Sea region.

Arkansas advances a measure to ban dicamba use over growing season... Arkansas’ State Plant Board advanced a proposal that would ban the use of dicamba weed killers from April 16 to Oct. 31, 2018, meaning the state is just one step away from enacting an official ban on the herbicide that farmers charge can drift and damage crops not meant to withstand the chemical. Monsanto’s Vice President of Global Regulatory Ty Vaughn said the decision was not based on science and warned that “all options are on the table for Monsanto’s next move.” Previously, the company said it may file a lawsuit if the board denied its petition for it to reject the proposed cutoff date for sprayings, which the board did with a unanimous vote. BASF and DuPont also sell dicamba herbicides under different brand names. After a public comment period and public hearing on Nov. 8, the proposal will move to the Arkansas legislative subcommittee for final approval.

Senators push for more funding of ag export promotion programs... A group of lawmakers have introduced bipartisan legislation that would double funding over the course of five years for two of USDA’s export promotion programs -- the Market Access Program and Foreign Market Development Program. The measure was introduced by Senators Joe Donnely (D-Ind.), Angus King (I-Maine), Joni Ernst (R-Iowa) and Susan Collins (R-Maine). “As American farmers and ranchers are struggling with historically low commodity prices, maintaining and strengthening U.S. trade relationships around the world is critical to the survival and profitability of the agricultural community,” Ernst explained, adding that these programs have “proven to be effective in expanding foreign markets for American agricultural goods.”

Exchange lowers initial margins on live cattle... CME Group has lowered initial margins for speculators in live cattle futures from $1,925 per contract to $1,650 per contract; the rates will take effect after the close of business today.

Another week of extended cash cattle negotiations... Cash negotiations are again stretching late into the week. So far, just a few hundred head have changed hands in Kansas around $107. Trade could be limited leading up to the Cattle on Feed and Cold Storage Reports this afternoon. The former is expected to show a 2.9% drop in Placements from year-ago.

Pork tumbles as aggressive slaughter continues... For the third day in a row, packers slaughtered an estimated record-high 455,000 hogs on Thursday, keeping this week’s kill ahead of week-ago and well ahead of year-ago levels. In fact, this week’s kill could be near the fall high. An abundance of pork has also weighed on the product market. The pork cutout value plunged $3.01 yesterday and it is now down $4.58 from last Friday. Movement also slowed after strong load counts the prior two days.

Overnight demand news... South Korea issued a tender to buy 55,000 MT of corn from worldwide origins.

Today’s reports:

2:00 p.m., Cattle on Feed -- NASS
2:00 p.m., Chickens and Eggs -- NASS
2:00 p.m., Cold Storage -- NASS

South American Exporters Having Trouble Moving Product to Russia

Tue, 19 Apr 2022 15:00:00 GMT

The unprecedented economic sanctions that have been levied against Russia for its invasion of Ukraine have started to disrupt South American dairy shipments to Russia. And it is unclear at this point, whether Belarus, Russia’s primary dairy supplier, will be able to fill the gap left by South American exporters who still want to trade with the country.

Russia is an important destination for South American dairy exports, and the trading relationship strengthened beginning in 2014 when Russia annexed Crimea and the United States, Europe, and others applied sanctions to Russia, according to Monica Ganley, analyst with the Daily Dairy Report and principal of Quarterra, an agricultural consulting firm in Buenos Aries.

The 2014 sanctions spurred Russia to ban imports of some products, including U.S. and EU dairy products, but did not apply to South America. Last year, Russia accounted for 11% and 7% of Argentina’s and Uruguay’s dairy exports in value terms, respectively, Ganley said, and Russia is a key destination for cheese, butter, and anhydrous milkfat exports from South America.

“The more stringent economic sanctions levied against Russia in recent weeks, however, have disrupted the flow of products from South America,” Ganley said. “Limitations on financial tools including access to the SWIFT banking system has left Russian buyers unable to pay for imported goods. The ruble’s deterioration has also rendered imported product relatively more expensive for Russia.”

In early April, some dairy exporters in Argentina and Uruguay reportedly had product en route to Russia. However, because of the issues resulting from Western sanctions, these exporters said they would delay future shipments until the current problems can be resolved, Ganley said. Thus, today’s battered supply chain, along with Western sanctions on Russia, will continue to disrupt the flow of dairy trade.

“With the loss of the Russian market, South American dairy exporters will search for alternative destinations,” she said. “While some of these exporters have already had success rehoming products in China, sellers will be keen to develop additional channels for distributing cheese and milkfat products that otherwise would have been bound for Russia.”

Whether Russia will be able to obtain the dairy products it needs is also in question. Since Russia implemented a ban on dairy imports from Western nations in 2015, ally Belarus, a country that has sent troops to aid Russia in its attack on Ukraine, has been supplying much of Russia’s dairy needs. But following last year’s drought, a shortage of soybean and other protein meals has developed in Belarus, and deliveries from neighboring Ukraine have been stopped.

Today’s geopolitical situation and the ongoing disruption in the flow of dairy products could put downward pressure on prices, but that would only slow the upward price trajectory, supported by concerns that global demand will continue to outpace supply, Ganley said.

Russia-Ukraine Crisis Could Lower Global Dairy Consumption

Tue, 29 Mar 2022 16:42:27 GMT

The Russian invasion of Ukraine could also have an impact on the dairy supply chain. In addition, inflation in dairy markets could begin to weaken consumption, especially in Russia and low-income nations. The analysis coming from Betty Berning with the Daily Dairy Report.

According to Rabobank, Russia and Ukraine are responsible for 18% of global corn exports, which is a key feed ingredient in dairy rations around the world. And that’s where the domino effect begins. As input prices rise, so do milk and dairy prices. Higher dairy prices could then threaten global consumption.

Some dairy companies, such as Lely, have stopped operations in Russia. Danone has closed one of its two plants in Ukraine, which could also have an impact.

Canada Exports

Canada is an important market for U.S. dairy products. How important? Exports to our neighbors to the north have grown by nearly 50% in just over a decade. That shows in this graphic from USDA’s Economic Research Service.

From 2010 to last year, total dairy exports from the U.S. to Canada rose 48% from just over $466 million to more than $691 million last year. The country’s proximity to the U.S. aiding in the export of items such as food, milk, cheese and infant formula.

By value, infant formula has been the top U.S. dairy product exported to Canada representing about 22% of the total.

Russia’s Invasion of Ukraine to have Far-Reaching Impacts on Dairy

Wed, 23 Mar 2022 17:32:47 GMT

Russia’s unrelenting attack on Ukraine will worsen the ongoing disruptions in the dairy supply chain. In addition, inflation in dairy markets could begin to weaken dairy consumption, particularly in Russia and low-income nations.

Betty Berning, analyst with the Daily Dairy Report, said that while Russia’s invasion of Ukraine will almost certainly reduce dairy consumption in those countries, “it will also impact the global dairy industry, not necessarily through supply and demand shifts, but by causing prices of critical inputs such as oil, natural gas, and fertilizer to increase.”

According to Rabobank, Russia and Ukraine are responsible for 18% of global corn exports, a key feed ingredient in dairy rations worldwide. As corn and other input prices rise, milk and dairy product prices will likely rise, too. Higher dairy prices will threaten global consumption, particularly of high-value dairy products.

“In Russia, as the ruble weakens and costs increase, dairy consumption could fall as consumers are forced to choose purchases carefully,” Berning said. Access to products could also be an issue, she said. Some dairy companies, such as Lely, have ceased operations in Russia, while Danone, which has suspended investments in Russia, has closed one of its two plants in war-ravaged Ukraine.

Russia is one of the world’s most deficient dairy countries, according to the United Nations’ Food and Agriculture Organization. While per capita dairy consumption in Russia, on a milk equivalent basis, is a hefty 315.4 lbs. per person, according to Italy’s CLAL, it is still well below Europe’s 550 lbs. per person.

“Russia was forced to grow its domestic dairy industry after issuing an embargo against dairy products from the European Union, Australia, United States, and New Zealand in response to sanctions issued by those countries due to Russia’s annexation of the Crimean Peninsula,” Berning noted. “And outside investors have poured money into the dairy industry since 2015 to make Russia self-sufficient.”

Since the embargo, Russia has grown milk production by 15%, according to Rabobank. Even so, the country still imports much of its milk needs from neighbor and ally Belarus, which ships the majority of its milk into Russia.

Belarus was expected to produce more than 17 billion pounds of milk in 2021 and supplied Russia with 154.5 million pounds of butter and 615 million pounds of cheese in 2021, accounting for 60% of Russia’s butter imports and more than 85% of its cheese imports. Russia also relies heavily on imports of fluid milk, skim milk powder, whey, buttermilk, and yogurt, Berning said.

“The global supply chain has still not recovered from the ongoing pandemic-related disruptions, and Russia’s invasion of Ukraine has only compounded the situation,” Berning said.

Dairy Report: Danone Closes Factory in Ukraine, Lely Cuts Ties with Russia

Tue, 08 Mar 2022 19:30:00 GMT

Several companies around the globe are cutting ties with Russia amid its invasion of Ukraine. This includes several dairy related companies, including the French food group, Danone.

Company shares dropped 3% on Monday after Danone announced it was suspending investments in Russia. The company also closed one of its two factories in Ukraine, however, it did say it would continue to sell dairy and baby food in Russia. Danone generates about 6% of its sales in Russia and the Ukraine. It is the world’s largest yogurt maker.

One of the leading dairy technology companies in the world, Lely, says it is also cutting commercial activities throughout Russia and Belarus. The company said in a release that it was shocked by Russia’s military invasion of the Ukraine. The global supplier of dairy farm robots says it will continue to supply spare parts to existing customers in the country saying that otherwise cow comfort and food supply in the region would be compromised.

First Thing Today: EPA Mulling Shift on How It Counts Biofuel Exports

Thu, 12 Nov 2020 04:42:20 GMT

Good morning!

Some pressure overnight... Corn futures are around a penny lower after a quiet overnight session, while soybean futures are trading low-range and down roughly 6 cents. Winter wheat futures are fractionally to 2 cents lower across all three flavors. The U.S. dollar index is slightly lower this morning, while crude oil futures are posting solid gains.

Weekly Export Sales Report expectations...

Commodity	2016-17 (MT)	2017-18 (MT)
Corn	NA	500,000 to 800,000
Wheat	NA	250,000 to 450,000
Soybeans	NA	1,800,000 to 2,200,000
Soymeal	25,000 to 100,000	50,000 to 150,000
Soyoil	0 to 10,0000	0 to 20,000

EPA mulling major shift for biofuel export policy... The Environmental Protection Agency (EPA) is reportedly considering a change to how it treats exported biofuel, allowing it to qualify toward biofuel quotas. Currently, each gallon of biofuel produced in the U.S. generates a tradable renewable identification number (RIN) that can be used to prove compliance with annual Renewable Fuel Standard (RFS) quotas. But the RIN must be withdrawn if that gallon is exported. On the other hand, since imported ethanol is blended into the fuel supply, credits associated with the use of foreign supplies qualify for compliance. Ethanol makes up the vast majority of exported biofuel, with the U.S. shipping roughly 1.2 billion gallons of mostly corn-based ethanol last year. It is also considering lower the 2018 biomass-based diesel, advanced biofuel, and total renewable fuel volumes, and/or the 2019 biomass-based diesel volume under the RFS to ease pressure on refiners.

Tax cuts/reform now enters the hard stage of filling in the details and congressional passage... Portions of a tax reform effort were unveiled Wednesday by President Donald Trump and GOP congressional leaders, including lower taxes on corporate profits, incentives for business investment, fewer and lower individual income tax brackets and the end of estate taxes, with the goal of boosting economic growth and benefiting middle-income families. Get details on the reform plan. The 10-year Treasury yield rose to 2.348%, the highest in two months, as Trump promoted what he called “the largest tax cut” in U.S. history. U.S. equities surged on hopes the cuts will become law this year. But that could be a daunting task.

NAFTA 2.0 update... Negotiators finished a chapter on expanding small- and medium-sized business access to markets and made advances on digital commerce, U.S. Trade Representative Robert Lighthizer and his Canadian and Mexican foreign counterparts said as the third round of talks completed in Ottawa. U.S. officials did offer text on seasonal safeguards for agriculture, which could block Mexican produce imports during certain times of the year. Lighthizer said contentious issues remain for the fourth round Oct. 11-15, when the NAFTA negotiators meet in Washington. Get more details .

Russian ag minister has high hopes for grain and wheat shipments... Russia will likely export 45 MMT of grain, including 30 MMT of wheat in 2017-18, forecasts Russian Ag Minister Alexander Tkachev. He added that this year’s grain crop was on track to hit a record-high, detailing that the previous record was the 127 MMT crop of 1978.

DHS now says Jones Act Waiver for Puerto Rico still possible but is unlikely... Despite a statement from a Department of Homeland Security (DHS) that the agency denied a request for a waiver of the Jones Act to help speed aid to Puerto Rico, the agency now says it has not yet decided on the Monday request from lawmakers. However, senior DHS officials signaled Wednesday that a waiver is unlikely and a final determination could take days or weeks. Homeland Security officials are evaluating a Democratic request to waive a requirement that only U.S. ships carry emergency supplies to Puerto Rico in the wake of Hurricane Maria.

Brazil hopeful U.S. will lift ban on fresh beef next month... The U.S. could lift its ban on Brazilian beef next month, the country’s ag ministry recently said. This could come after the U.S. wraps up its current evaluation of documents sent in response to questions that arose on a U.S. veterinary mission to the country. The ag ministry also points out that The U.S. recently informed Brazil it would allow thermo-processed meat exports from five plants to begin again, giving hope that the ban on fresh beef that has been in place since June due to food safety concerns would soon be lifted. The U.S. has said it would follow no timeline for lifting the ban.

Waiting for cash trade to begin... Traders are still waiting for cash cattle trade to get underway, with most hoping recent beef strength (though values slipped Wednesday), steady showlists and strong packer margins will help the market build on last week’s $108 (mostly) to $109 cash action. October futures are in line with last week’s action. Yesterday’s online Fed Cattle Exchange auction provided little direction, as none of the 1,342 head of cattle offered sold.

H&P Report a big focal point today... Traders were encouraged by some signals demand is finally catching up to supply yesterday. Namely, average hog weights in the Iowa/southern Minnesota market declined slightly from the week prior -- a welcome change from recent reports that showed supplies were backing up. But the Quarterly Hogs & Pigs Report that will be released this afternoon is expected to remind of ongoing expansion in the industry, with all hogs and pigs expected to come around 73.647 million head, up 2.5% from year-ago. Hogs kept for breeding and kept for marketing are also expected to rise 1.2% and 2.5% from last year, respectively.

Overnight demand news... Jordan made no purchase in its tender to buy 100,000 MT of wheat. Saudi Arabia issued an international tender to buy 540,000 MT of barley.

Today’s reports:

7:30 a.m., Drought Monitor -- USDA/NWS
7:30 a.m., Weekly Export Sales -- FAS
2:00 p.m., Agricultural Prices -- NASS
2:00 p.m., Hogs and Pigs -- NASS

First Thing Today: China Imports a Record Amount of Soybeans in August

Thu, 12 Nov 2020 04:42:13 GMT

Good morning!

Dollar plunge helping to lift grain and soy futures at week’s end... Corn futures enjoyed fresh buying overnight after setting back Thursday. As of 6:30 a.m. CT most contracts are up a penny. Soybeans are around 2 cents higher after seeing two-sided trade overnight. Wheat futures are also up 1 to 2 cents in early trade. The U.S. dollar index is facing heavy pressure with prices hitting their lowest level since January 2015.

Hurricane Irma update... “Every Florida family must prepare to evacuate,” said Florida Gov. Rick Scott as Hurricane Irma, one of the most powerful storms ever recorded, left a path of devastation through the Caribbean and headed toward his state. There are already shortages of gas, water and sandbags. The death toll from Irma — at least seven — is expected to rise. What is expected to be the strongest hurricane strike since Charley 13 years ago has “triggered near-panic in a region of more than 6 million people that includes Miami, Fort Lauderdale and West Palm Beach, clustered along a narrow ribbon of coastline that has seen nearly double-digit population growth over the past five years,” according to the Associated Press.

NWS calls for rain in the western Corn Belt, but dry weather in the east... The National Weather Service (NWS) calls for warm temperatures in northern and western areas of the Corn Belt, with cool temps for southern areas of the eastern Belt Sept. 13-17. Other areas of the Midwest should see normal temperatures. The precip outlook varies widely. The Dakotas and western Nebraska should see some rain, but dry weather is likely for most of Iowa, Illinois, and Indiana. Normal precip is expected in other areas of the Midwest.

China imports a record-high amount of soybeans last month... China imported 8.45 MMT of soybeans in August, a record for the month and a 10.2% jump from year-ago levels, according to preliminary customs data. Its purchases were down from July when the country brought in a record 10.08 MMT of the oilseed. Some of the arrivals the past two months were shipments that had been delayed by port congestion. But crushers also upped their bean buys as their margins improved, with most making a profit as of late August. For the first eight months of the year, China has purchased 63.34 MMT of soybeans, a 9.34 MMT (17.3%) gain from year-ago.

Chinese trade surplus unexpectedly tightens... China’s overall imports climbed 13.3% in August from year-ago, topping expectations, while its exports were up 5.5% from year-ago, as expected, based on preliminary customs data. That left the country with a $41.99-billion trade surplus, down from $46.73 billion in July. Analysts had expected the trade surplus to widen to $48.6 billion last month. Its trade surplus with the U.S. through the first eight months of the year stand at $168.06 billion, with the August surplus of $26.23 billion with the U.S. being the highest in nearly two years. That is likely to draw the attention of President Donald Trump.

Export sales report expectations...

Commodity	2016-17 (MT)	2017-18 (MT)
Corn	0 to 250,000	650,000 to 950,000
Wheat	NA	350,000 to 550,000
Soybeans	-200,000 to 100,000	700,000 to 1,000,000
Soymeal	40,000 to 100,000	100,000 to 350,000
Soyoil	0 to 22,0000	0 to 20,000

SovEcon hikes grain crop estimates... The ag consultancy SovEcon has hiked its Russian grain crop estimate for 2017 by 5.4 MMT to 133 MMT. SovEcon also upped its wheat crop forecast by 2.2 MMT to 81.1 MMT. Rising crop prospects for the region signal even more competition for the U.S.

Budget, hurricane aid and debt limit suspension bill will be on the way to the White House soon... The Senate Thursday passed, 80-17, a stopgap spending, $15.25 billion in hurricane aid and debt ceiling relief package, with the House poised to give final approval today. The Senate package includes a suspension of the debt limit through Dec. 8 and a stopgap funding measure, through Dec. 8, to avoid a government shutdown when the new fiscal year begins on Oct. 1. The House is set to give final approval to the package today, clearing the way for the president’s signature.

New farm bill on agenda as Perdue held a breakfast with ag panel leaders... USDA Secretary Sonny Perdue on Thursday hosted House Ag Chairman Mike Conaway (R-Texas) and Senate Ag Chairman Pat Roberts (R-Kan.). They discussed issues relating to the upcoming new farm bill debate and pending USDA nominations. Perdue briefed the legislators on the reorganization plan he announced later in the day, which includes combining the Agricultural Marketing Service with the Grain Inspection, Packers and Stockyards Administration.

U.S. ethanol groups want Trump to intervene in Brazil dispute... U.S. ethanol producers will ask the Trump administration to intervene in a trade dispute with Brazil as tensions between the industry and foreign competitors continue to escalate. The Renewable Fuels Association, Growth Energy and the U.S. Grains Council -- all Washington-based lobbying organizations -- said in a statement Thursday that the government should “take immediate action and consider all avenues to encourage Brazil” to revoke or at least ease the 20% tariff on ethanol imports from the U.S. it announced last month. The groups are drafting a letter that they plan to send to USDA and the U.S. Trade Representative, requesting the agencies consider the tools that they have under World Trade Organization rules, Growth Energy Chief Executive Emily Skor said. More than $750 million in U.S. exports and jobs are at stake, the groups said.

Monsanto challenges Arkansas ban on dicamba... Monsanto filed a petition with the state of Arkansas, seeking to remove a ban on the herbicide dicamba that is scheduled to take effect next April 15. Dicamba has been linked to crop damage, but Monsanto calls the ban “unwarranted and misinformed.”

Still waiting on cash cattle action... Choice and Select boxed beef values both softened on Thursday, but movement was again solid at 152 loads. Meanwhile, feedlots and packers remain at an impasse on cash trade. Futures signal traders believe prices will strengthen this week given wide packer profit margins and improved beef movement. But with showlist estimates up from week-ago, that is by no means a certainty.

Rising hog weights concerning... Despite aggressive daily kill numbers, weight data signals supplies are backing up on farms. And that could become more of an issue as farmers in the Midwest get busy with fall fieldwork. Strong packer demand has led to choppy cash hog prices this week, however. Meanwhile, the pork cutout value slipped again on Friday and movement moderated to 335.23 loads.

Overnight demand news... Algeria’s state grain agency purchased around 250,000 MT of durum wheat in a tender from optional origins, with traders signaling Mexico got most of the business, with Canada supplying some of the wheat. Bangladesh approved the purchase of 200,000 MT of wheat from Russia in an inter-state deal.

Today’s reports:

7:30 a.m., Weekly Export Sales -- FAS
2:00 p.m., Cash Rents - County -- NASS