News & Media

Market Briefs for April 27, 2017

Mexico could boost ethanol use
The Mexican Association of Sustainable Transportation has submitted a plan to the country’s energy regulator, CRE, to increase the amount of ethanol that can be blended into motor fuel from 5.8 percent to 10 percent. The industry group explains this would power job growth and reduce air pollution. But critics say that the fuel additive methyl tertiary butyl ether is better at reducing air contaminants and that corn production can lead to deforestation. CRE commissioners are not expected to make a decision on this until November.

Wage protests in Argentina
Port workers at Argentina’s main Rosario grains hub will hold flash protests and block gates in the weeks ahead as they push for a 40-percent increase in wages, Edgardo Quiroga, a local representative of the CGT labor union, told Reuters yesterday. Quiroga said that the port will hold these strikes for one or two days a week until the end of the month. He also said that the exact times and locations would not be announced ahead of time. Such disruptions are not unusual in Argentina, but the situation bears watching

Aggressive Chinese bean buys
China imported nearly 6.327 MMT of soybeans in March, a gain of 3.73 percent from year-ago levels. The U.S. got 66.75 percent of this business. For the first three months of the year, China has brought in 19.521 MMT of soybeans, a gain of 20.02 percent from last year at this point. Again, the U.S. was its No. 1 supplier, shipping China more than 15.428 MMT of soybeans. This was an increase of 17.82 percent from a year ago.

Senate confirms Perdue
Sonny Perdue was sworn in as the new U.S. Department of Agriculture secretary this week. The Senate voted 87-11 to confirm the former Georgia governor. A U.S./Canada dairy trade issue is the first topic on Perdue’s list as he is set to journey to Wisconsin, a major dairy-producing state, for his first trip as USDA secretary. Perdue will need to nominate dozens of administrative-level positions at the USDA, ranging from deputy secretaries to administrators in some of the 17 agencies that fall within the department. Some appointments might be announced this week.

Perdue wants export expansion
Agriculture Secretary Sonny Perdue sees surplus commodities as a “blessing” — and wasted no time on his first day in office today emphasizing that a top priority will be promoting and finding markets for U.S. agricultural products abroad.

“I know there is a lot of anxiety, but the blessing of America is that we are so productive, American farmers and ranchers have been so productive over the years, that we have an abundance that we need to sell,” Perdue told reporters April 25. “That’s going to be my task, to go around the world with [Commerce Secretary Wilbur] Ross, with our U.S. trade representative and our undersecretary for trade, to make sure American products are on tables all over this world.”

The 2014 farm bill called for creation of an undersecretary for trade at USDA, but the position has not been realized. Perdue has promised lawmakers he would present Congress with a plan for establishing it. President Donald Trump also has tasked Perdue with drawing up plans detailing opportunities for greater exports of U.S. agricultural products.

Farmers take advantage of planting window
Drier weather has allowed many farmers across the Corn Belt to get into their fields in recent days, with more planting efforts likely before expected rains move into the lower and eastern Corn Belt. The National Weather Service forecast for April 29 to May 3 calls for cool, wet conditions across the Midwest, which would also slow planting efforts. Meanwhile, World Weather Inc. reports some hard freezes occurred in Colorado and Nebraska April 22-23, with light freezes reported in Kansas and the western Texas Panhandle. It said this likely burned back the vegetative development of the crop, but permanent damage was unlikely.

Vomitoxin a concern
The fungus vomitoxin has increasingly been an issue with the 2016 corn crop in Indiana, Wisconsin, Ohio and parts of Iowa and Michigan, according to the food testing firm Neogen Corp. Neogen reports a 29-percent jump in global sales for toxin tests, including strong demand for vomitoxin tests, in the third fiscal year quarter. Heavy rain before and during harvest led to the storage of some wet grain last fall, plus the record size of the crop meant some of it was stored on the ground or in other makeshift ways. Poultry and pork farmers are having to test their grain to ensure the toxin will not sicken animals, and it has some grain processors searching for alternative sources of feed supplies. Indeed, vomitoxin is reportedly the reason a shipment of corn from Paraguay is headed for the U.S. next month.

Cattle on Feed Report
Cattle and calves on feed totaled 10.9 million head April 1, which was slightly above April 1, 2016 and higher than trade expectations of 10.822 million head. Placements in feedlots during March totaled 2.10 million head, 11 percent above 2016, compared to trade expectations of 6.5 percent above 2016. Marketings of fed cattle during March totaled 1.91 million head, 10 percent above 2016, compared to trade expectations of 9.4 percent above 2016.