Tuesday Watch List

Markets

At 7:30 a.m. CST Tuesday, the U.S. Labor Department will release the producer price index for October, a topic on many investors' minds. At 11 a.m., USDA will release its WASDE and Crop Production reports for November with all eyes on the corn and soybean crop estimates. Traders will watch for any export sales news and any surprises in USDA's reports.

Weather

A storm system is moving into the western states on Tuesday with scattered showers that may be at least partially beneficial for winter wheat in the Pacific Northwest. Mostly fair weather is expected east of the Rockies that should favor the remaining harvest.

Governors Explore Ways for States to Expand Biofuel Sales

A bipartisan group of governors asked the Biden administration for guidance on an action that could expand fuel sales containing a higher ethanol blend. The letter was sent following action by an appeals court that struck down a 2019 ruling that allowed year-round sales of E15. Reuters says farm and biofuel groups were angered by the ruling after spending a lot of time advocating for year-round sales which boosted demand for their products. The seven governors point out that a section of the Clean Air Act allows governors to effectively request from the EPA that E15 be sold in their state year-round. “In the wake of the court decision, we are exploring all our options to ensure retailers can sell E15 to consumers all year long without interruption,” the group says in their letter. Groups like the Iowa Renewable Fuels Association and the national Renewable Fuels Association were grateful for the letter. “We all hope either Congress or the EPA will take action to preserve year-round access to E15 across the country,” says Iowa Renewable Fuels Association President Monte Shaw. “But if no timely solution can be found, governors have the authority to implement solutions state-by-state.”

USDA Emphasizes Commitment to Climate at COP26

USDA Secretary Tom Vilsack attended the 26th United Nations Climate Change Conference in Glasgow, Scotland. He emphasized USDA’s support for President Biden’s whole of government approach to combatting climate change, creating good jobs, and economic growth in the U.S. During the conference at various events, he highlighted USDA partnerships and initiatives that put agriculture, forestry, and rural communities at the center of global solutions to climate change. “Climate change is happening,” Vilsack says. “It threatens to disrupt our food systems, worsen food insecurity, and negatively impact the livelihoods of our agricultural producers. Now is the time to address this.” Vilsack also told conference attendees that the U.S. can lead the way with investments in climate-smart solutions that improve the profitability and resilience of agricultural producers and improve forest health while creating new income opportunities and building wealth that stays in rural communities. Vilsack touched on several topics, including building support for the Agriculture Innovation Mission for Climate Initiative launched last week. He also highlighted the Climate Smart Agriculture and Forestry Partnership Initiative, as well as the USDA-supported Pathways to Dairy Net-Zero.

Supply Chain Holes Will Take Time to Fill

Supply chain issues are challenging the agricultural sector, and farmers and ranchers hoping for quick solutions may be out of luck. DTN says a House Ag Committee hearing focused on transportation problems that are slowing the export of goods and commodities across the U.S. and the world. The Associated Press reports a significant backlog of ships entering U.S. waters out west and fewer ships making a voyage back across the ocean as a big reason that U.S. exports have slowed down. Gregg Doud, a former USTR Chief Ag Trade Negotiator, says the logistical problems aren’t going to get solved soon. “So much of the U.S. ag exports are in containers, so the lack of containers heading back across the ocean is significant,” Doud says. “80 percent of what leaves the Port of Tacoma, Washington, goes out on backhaul or as agricultural products to Asia. Right now, the shipping industry would much rather speed up the process and get those empty containers back to Asia without reloading first.” Ted McKinney, a former USDA Undersecretary, says COVID played a big part in the problem but not the only one.  “When China can order empty containers to come back and then pay for it, I’ll bet you the industry isn’t the one that’s paying the bill for the empty containers to return,” McKinney says.

Conner Disappointed with OSHA Vaccine Mandate Exemptions

The Occupational Safety and Health Administration released exemptions to the mandatory COVID-19 vaccine mandate for large, private employers. The Hagstrom Report says the mandate won’t take effect until January 4 and goes into effect after harvest season. Chuck Conner, president of the National Council of Farmer Cooperatives, says he’s still disappointed that the exemptions didn’t include other accommodations. “I’m disappointed that OSHA’s exemptions don’t adopt several commonsense accommodations to recognize the unique nature of agriculture,” Conner says. “The deadline does take farmers past harvest and does exempt employees working exclusively outdoors. However, implementing this standard will be disruptive and it contains no provisions included to help ensure the integrity of the food and agriculture supply chain.” He also points out that NCFC will provide formal comments to OSHA outlining their concerns further and will work with members to look for ways to minimize the disruptions the requirements will cause to a critical sector of the U.S. economy.

New Leadership Program Designed to Help Animal Agriculture

Emerging leaders in agriculture have a new opportunity to get next-level leadership and professional development training specifically focusing on animal agriculture. It’s called Advanced Training for Animal Agriculture Leaders, a program created and sponsored by the United Soybean Board and the National Institute for Animal Agriculture. It’s designed to empower professionals in the early or middle part of their careers to build on previous leadership development experiences and collaborate with peers across the industry. “Advanced Training for Animal Agriculture Leaders is a win for program participants and a win for the animal agriculture industry,” says J.J. Jones, NIAA executive director. “Developed as a 2.0 leadership experience, the program will not only give participants world-class hands-on training but also put their training into practice.” Jones also says it’s a chance to create meaningful connections with one another and advance real solutions to real animal agricultural challenges. The 16-month program focuses on four areas of development: critical thinking, leadership development, connecting and relating skills, and operational excellence.

Export Sales of Corn, Wheat, and Soybeans Rise

The USDA says export sales were higher across the board during the week ending on October 28. Corn sales in those seven days totaled 1.22 million metric tons, up 37 percent over the previous week and 10 percent higher than the prior four-week average. Mexico was the biggest buyer at 666,300 metric tons, while Japan and Guatemala finished out the top three. Exports for the week totaled 748,500 metric tons, nine percent higher week-to-week. Soybean sales last week totaled 1.86 million metric tons, a 58 percent increase from the previous week and 19 percent higher than the prior four-week average. China once again led the way by purchasing 1.21 million metric tons, while Mexico was a distant second at 157,400 tons. Soybean exports rose 10 percent during the week to 2.65 million metric tons. Wheat sales came in at just over 400,000 metric tons, 49 percent higher than the previous week and four percent above the prior four-week average. Mexico was the top wheat buyer at 101,400 metric tons. Wheat exports fell 27 percent to 136,400 metric tons during the week.