Global Weather Extremes Impact Agricultural Exports

Last Week’s Moves 

Corn 681-6 (+8.27%)  |  Soybeans 1440-2 (+0.35%)  |  SRW Wheat 839-6 (+6.98%)

KC Wheat 908-6 (+5.34%)  |  Live Cattle 143.025 (-1.06%)  |  Lean Hogs 92.200 (-1.81%)

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Welcome to your weekly agriculture report, where we cover everything you’ll need to know for the week ahead. This week, global food frets aren’t fading and the USDA announces they will invest up to $300 million in a new organic transition initiative and $550 million in funding to help struggling farmers. 
 

Global Food Frets Aren’t Fading

Worldwide droughts and war are impacting agriculture exporters as we look ahead to future food availability. While Ukraine attempts to catch up on essential exports following their new UN agreement, China battles weather, attempting to remain productive despite its longest period of drought since records began.

• China’s Wacky Weather…Faced with months of excessive heat and limited rainfall, the depletion of water sources is impacting everyone. The agriculture ministry has now urged farmers across the country to replant fall crops rather than relying on current crops to rebound. 
   
• An Avant-Garde Approach…Desperate times call for desperate measures, which means deploying rain-seeding drones throughout the country to battle fires and provide irrigation to drought-stricken agricultural areas. 
   
• Importation Inquiries…China is running out of steam as hydropower infrastructure is disrupted, which could lead them to coal. The country is already the largest importer of agricultural products but some begin to wonder where their imports could come from as strong agricultural exporters face their own yield limitations and world wheat reserves are the lowest they have been since 2008.

USDA to Invest up to $300 million in New Organic Transition Initiative

The US Department of Agriculture announced last week that they are investing $300 million in the Organic Transition Initiative, which aims to build new and better markets and streams of income for farmers and producers.  The new program will deliver wrap-around technical assistance, including farmer-to-farmer mentoring; provide direct support through conservation financial assistance and additional crop insurance assistance, and support market development projects in targeted markets.

• Production Pauses… According to the USDA National Agricultural Statistics Service, the number of non-certified organic farms actively transitioning to organic production dropped by nearly 71 percent since 2008.  
   
• Reaching for Reversal... The USDA hopes to reverse the trend of fewer farms transitioning to organic by opening opportunities for new and beginning farmers and expanding direct consumer access to organic foods through increased production.

Two days later the USDA announced another initiative which will provide $550 million in funding intended to train the next generation of agricultural professionals and help ensure underserved producers have the resources, tools, programs, and technical support they need to succeed.

• Serving the underserved… Up to $300 million is being allocated for projects intended to increase land, capital and market access for underserved producers.  The USDA is accepting applications for projects that qualify under this directive from now until October 28th.
   
• Leveling the (corn) field… $250 million will be used for the “From Learning to Leading: Cultivating the Next Generation of Diverse Food and Agriculture Professionals” program which aims to produce career development opportunities for next-generation scholars at minority-serving institutions.   The deadline for applications is Oct. 25.

What else you need to know… 

• USDA dropped the bale… The USDA retracted weekly commodities export data it had released last week after a technical misstep left traders scrambling and caused uncertainty in the futures markets. 
   
• Water the odds?...Rainfall was more miss than hit in the Corn Belt last week.  It was the fourth driest final week of August in 30+ years for the Corn Belt as a whole.
   
• Ramping up Renewables… Renewable diesel production is expected to overtake biodiesel production in the United States in October.  Renewable diesel capacity was estimated at 1.92 billion gallons per year in May, up from 1.75 billion gallons in January.

That’s all we have for you this week, do you have anything for us? We’d love to hear from you with stories or recommendations for new sections to include! Drop us a line at news@barchart.com with any feedback or input.

More Grain News from Barchart

• Corn Futures Double Digits Higher
• Beans Fade Double Digits
• Wheat Markets Rally 5%
• Coffee Slightly Higher on Brazil Crop Risks