Update for September 14th, 2022
USDA September Report and Possible Railroad Workers Strike
September USDA reports were released Monday. Corn yields came in where expected at 172.5 bushels per acre but harvested acres surprised the trade as they were lowered by 1 million acres. This cut resulted in a total U.S. corn production loss of 144 million bushels, far below trade estimates. Exports were lowered by 100 million bushels to 2.3 billion bushels. Overall U.S. ending stocks fell by 169 million bushels with an expected season average corn price of $6.75 per bushel. Foreign corn production was increased in China and Canada and Mozambique which offset reductions from the EU and Serbia.
The soybean numbers shocked the market. The average USDA soybean yield was lowered to 50.5 bushels per acre vs the August estimate of 51.9 bushels per acres vs the average trade estimate of 51.5. In addition to the adjustment in yield, harvested acres fell by 600,000 acres which dropped U.S. total new crop soybean production by 93 million bushels.
A railway workers strike effecting 10’s of thousands of workers has been brewing all summer and now may be just hours away. The workers are unhappy about pay and conditions following the Covid pandemic. Senior White House officials are working on a contingency plan with ocean-shipping, trucking, airfreight and other companies to keep the supply-chain moving if the strike occurs. According to The Wall Street Journal the focus will be on food, energy and public health related products. The press secretary said yesterday, “We have made crystal clear to the interested parties the harm that American families, businesses and communities would experience if they were not to reach a resolution.” Meetings are being held today between the U.S. Labor Secretary and representatives from the union and rail companies. Prior to this meeting some agreements had been reached with 10 out of the 12 workers unions, the two unions that have not settled yet represent about 66,000 workers.
One former White House official said, “I think there’s going to be a lot of pressure on Congress to step in…Certainly, the best outcome is for there to be some resolution before then” (end of this week). According to
The Wall Street Journal, “Congress could prevent a strike under federal law. Under the Railway Labor Act, railroads and unions are bound to collective bargaining agreements including mediation with multiple cooling-off periods to provide time to resolve disputes and stave off strikes.”
Some railroads are stopping shipments ahead of Friday’s deadline even though it is prohibited by law. “The railroads don’t want to have the cars and equipment out, in areas of the country where they can’t protect them very well. So, they’re taking steps to mitigate damages. For our members, they’re looking at essentially not receiving their grain on time and not being able to then ship out the finished products such as ethanol, flour, things of that nature.”
The last time railroad workers went on strike was over 30 years ago. That time the strike only lasted a couple of days.
The Russia/Ukraine war has now surpassed 200 days. Last week Ukraine was able to retake a sizable portion of their territory that had been occupied by Russian forces in the SE. In response Russian forces launched multiple counter offensive strikes in eastern Ukraine hitting various infrastructure and power stations causing wide-spread power outages. To avoid a possible disaster, reactors at the largest nuclear power plant in Ukraine, which is also the largest in Europe, was shut down over the weekend as fighting neared the area. This is the beginning of a big energy crisis that is likely to occur across Europe this winter as a result of the war.
The total expected precipitation map for the next 7 days is below. Maps that follow show the extended precipitation and temperature outlooks from NOAA.