Good morning!
Quiet overnight grain trade... Corn, soybeans and wheat held in tight trading ranges during a quiet overnight session. As of 6:30 a.m. CT, corn futures are trading steady to a penny higher, soybeans are steady to 2 cents lower, SRW wheat is 3 to 4 cents higher, HRW wheat is fractionally to a penny higher and HRS wheat is 2 to 3 cents higher. The U.S. dollar index and front-month crude oil futures are both modestly weaker this morning.
France cuts non-EU wheat export forecast... France’s ag ministry cut its 2023-24 wheat export forecast outside the EU by 150,000 MT to 10 MMT. Expected shipments within the bloc were raised 90,000 MT to 6.28 MMT.
USDA meeting focuses on cuts to data, reports... At USDA’s spring data users meeting on Tuesday, the decision to withhold county estimates for the 2024 growing season and discontinue the July Cattle Inventory Report was a major topic. NASS officials explained these choices were driven by budget constraints rather than shifting funds to other projects. Despite a reduced budget for fiscal year (FY) 2024 compared to FY 2023, officials stated they were open to resuming these efforts if funding becomes available. They also noted USDA’s Risk Management Agency (RMA) provides county data, serving as a potential alternative. Additionally, a representative from USDA’s Foreign Agricultural Service discussed plans to overhaul the export sales reporting system, aiming for a 2025 rollout after addressing issues from a failed update in 2022.
Thompson gets sensitive and critical regarding upcoming farm bill details... House Ag Chair Glenn “GT” Thompson (R-Pa.) said this regarding a new farm bill: “A lot of this bill, quite frankly, has been written. We’ve found some pretty creative ways to be able to fund what I think would be a transformational and highly effective farm bill.” He threw in this kicker: “Anyone who criticizes our funding framework is either being ignorant of the details or being disingenuous.” Comment: Congress has a long history of some lawmaker or staff self-describing their own legislation, which sometimes falls flat of early assessments, especially from its authors. As for the “pretty creative” funding mechanisms, why not release them so a fair and accurate assessment can be made?
Boozman: Farm bill would face higher hurdles in 2025... Sen. John Boozman (R-Ark.), ranking on the Senate Ag panel, nixed the idea Republicans would rather delay a new farm bill for a potential Trump presidency to write a bill next year. He said a new administration would further delay a bill because of turnover in staff. “I would argue for farmers that we have as great a chance, an easier chance of getting a farm bill done this year rather than next year,” Boozman said. Ag consultant Randy Russell of the Russell Group said: “I think there are low odds the bill is done in 2024. It could come next year depending on the election outcome… could be large changes… personnel, etc. First item up for the new Congress and White House: the debt ceiling, which will trigger a debt/deficit debate. All of sudden we may not be talking about a budget neutral farm bill but rather a cost savings farm bill.”
WTO chief: ‘Free for all’ under Trump’s tariff-hike plan... The head of the World Trade Organization (WTO), Ngozi Okonjo-Iweala, warns that former President Donald Trump’s proposal to increase tariffs on goods imported into the U.S. could trigger a global trade “free for all.” She predicts other nations would retaliate in kind, leading to instability and unpredictability in trade. Trump’s plan includes imposing 60% tariffs on imports from China and 10% other countries, which could potentially raise inflation. “I think it will result most likely in a tit-for-tat approach — other members will also look to levy these kinds of charges in return,” Okonjo-Iweala said at a forum in Washington hosted by the Peterson Institute for International Economics. “Then, I think we will have a little bit of a free-for-all, which would upend the stability and predictability of trade.” Okonjo-Iweala hopes the tariff plan doesn’t materialize, describing it as a “lose-lose” scenario. However, if it does, she urges WTO members to remain calm and avoid retaliation to preserve the stability of the world trading system.
Powell signals higher rates for longer... Fed Chair Jerome Powell’s recent statements indicate a cautious approach towards adjusting interest rates due to persistent inflationary pressures. Powell suggested the Fed may delay rate cuts, acknowledging that recent data has not increased their confidence in achieving their inflation targets promptly. He emphasized the importance of allowing current policy measures to continue working and relying on evolving economic data to guide future decisions. While Powell indicated rate increases were not under consideration, he also stated the Fed would keep rates at their current level for as long as necessary if inflation remains stubborn. This stance represents a shift from earlier indications that suggested the Fed was nearing a point where rate cuts could be considered.
Euro zone inflation at 28-month low... Consumer inflation in the euro zone fell to 2.4% above year-ago in March, in line with the preliminary reading and matching last November’s 28-month low. Core inflation, minus food and energy costs, dropped to 2.9%. Falling inflation reinforces ideas the European Central Bank will begin cutting interest rates in June.
UK inflation drops to 30-month low... The United Kingdom’s annual consumer inflation rate dropped to 3.2% in March, the lowest since September 2021. The annual core inflation rate, which excludes energy and food, dropped to 4.2%, the lowest rate since December 2021.
Choice beef back below $300... Choice boxed beef prices fell $2.86 on Tuesday to $298.02, while Select firmed $1.30 to $292.64. The $300.00 level has become a pivot point for Choice beef of late, hovering within a couple dollars on either side of that level for the past two weeks. The back-and-forth trade suggests retailers are being selective buyers around that level.
Pork cutout back below $100... The pork cutout value dropped $4.05 to $99.55 on Tuesday, due almost entirely to a $22.78 plunge in primal bellies. That ended eight straight days with the cutout above the $100.00 level. While a short-term pullback wouldn’t be out of the question, wholesale pork prices should generally continue to strengthen seasonally into summer.
Overnight demand news... South Korea purchased 70,000 MT of corn expected to be sourced from the U.S. or South America. Jordan tendered to buy up to 120,000 MT of optional origin milling wheat. Tunisia tendered to buy 25,000 MT of optional origin durum wheat.
See ‘Policy Updates’ for late-breaking morning news updates... For updates to items in “First Thing Today” or any late-breaking morning news stories, check “Policy Updates” on www.profarmer.com.
Today’s reports
- 9:30 a.m. Weekly Ethanol Production — EIA
- 2:00 p.m. Livestock, Dairy, and Poultry Outlook: April 2024 — ERS
- 2:00 p.m. Sugar and Sweeteners Outlook: April 2024 — ERS
- 2:00 p.m. Broiler Hatchery — NASS
- 2:00 p.m. National Hemp Report — NASS
- 2:00 p.m. Potato Stocks — NASS