Good morning!
Followthrough selling overnight... Corn, soybean and wheat futures extended recent losses overnight amid a lack of supportive news and elevated risk aversion. As of 6:30 a.m. CT, corn futures are trading 3 to 5 cents lower, soybeans are 9 to 12 cents lower, SRW wheat futures are 7 to 8 cents lower, HRW wheat is 11 to 13 cents lower and HRS wheat is 3 to 5 cents lower. Front-month crude oil futures are more than $1 lower and the U.S. dollar index is around 150 points lower.
Weekly Export Sales Report out this morning... For the week ended April 13, traders expect:
| 2022-23 expectations (in MT) | 2022-23 last week | 2023-24 expectations (in MT) | 2023-24 last week |
Corn | 575,000-850,000 | 527,719 | 135,000-400,000 | 0 |
Wheat | 0-300,000 | 135,680 | 0-175,000 | 67,830 |
Soybeans | 250,000-425,000 | 364,539 | 0-175,000 | 66,000 |
Soymeal | 140,000-300,000 | 255,158 | 0-90,000 | 37,500 |
Soyoil | 0-10,000 | (425) | 0-10,000 | 0 |
Argentine grain union strike ends... A federation of unions representing Argentina’s port and maritime workers lifted a three-day-old strike that had affected the key Rosario grains shipping hub, the federation said. The announcement from the FeMPINRA union federation, which was demanding changes to taxes on worker salaries, followed meetings with government officials. “With this agreement, the strike has been lifted and the functioning of the ports is getting back to normal,” said Juan Carlos Schmid, the FeMPINRA secretary general.
Hungary to allow transit of Ukrainian grain, bans some meat imports... Hungary will continue to allow transit of Ukrainian grain, ensuring the departure of such shipments “in a controlled manner,” its agriculture minister, Istvan Nagy, told state news agency MTI after talks in Brussels. Talks were ongoing about further products that could fall under a current import ban, in addition to wheat, maize, rapeseed and sunflower. Hungary also said it has banned imports of certain meat products and honey in addition to grains from Ukraine until June 30.
Russia may permit grain export quota sharing... Russian grain suppliers may be able to waive a part of their export quotas so they can be redistributed to other companies, a draft regulation shows, as Moscow seeks to maximize exports and avoid domestic oversupply. According to the draft, which was opened to input from the industry on Wednesday before being finalized, exporters who have already used up their quotas will be able to claim more from companies that do not use theirs. They will not be allowed to top up their initial quota by more than 45%, however, the document says.
Argentina again allows delay in wheat shipments... The Argentine government granted exporters more time to reschedule wheat shipments without penalty after the historic drought slashed production. Wheat exporters have been allowed a 360-day extension “with the start of shipment between December 1, 2022 and July 31, 2023.” The government’s previous extension, which was granted in November, covered sales with shipments beginning in the first two months of the year.
China’s soybean acres expected to rise modestly... China’s soybean acreage may only slightly increase this year, an official said on Thursday, suggesting output is unlikely to match last year’s jump. A Chinese ag ministry official said farmers were less willing to plant more soybeans this year due to prices. “Frankly speaking, due to the low soybean market price and low comparative benefit, the enthusiasm and willingness of farmers to plant soybeans has declined compared with this time last year,” Pan Wenbo, director general of the ministry’s Department of Crop Production said. After offering incentives including significantly higher subsidies to plant soybeans instead of corn in key growing areas in the northeast, planting intentions had improved, he added, though any increase would likely come from other regions where a campaign to promote intercropping with corn is underway.
For food price inflation clues, watch India... India’s monsoons are an essential economic indicator for a country that relies on rainfall to feed 1.4 billion people. A poor season can topple governments and threaten global food security. U.S. and Australian forecasts now point to an increased probability of an El Niño episode in 2023. El Niño is a periodic weather event that drives monsoon clouds away from India — and has historically hurt food production. A subpar monsoon is an underappreciated threat to global food security and inflation, writes the Wall Street Journal.
Yellen: Security worries on China eclipse economic interests... Treasury Secretary Janet Yellen said the Biden administration was prepared to accept economic costs as it sought to protect U.S. national security interests from threats posed by China. However, Yellen appealed to Beijing to cooperate on shared global concerns.
Cattle traders stay conservative... Cattle futures continue to trade at sizable discounts to last week’s average cash price despite expectations the cash market will rise again. As is often the case in strong bull markets, cash is leading the way higher. The cautious trade in cattle futures is frustrating to market bulls but rather healthy, as major market tops are typically marked with a blowoff.
Hog traders reducing premiums... Summer-month lean hog futures continue to trade at premiums to the cash index, but traders have reduced those levels as they wait on the cash market to put in a low. The CME lean hog index is down 7 cents to $71.57 (as of April 18). While that’s a nickel above the low from two days ago, traders are far from convinced the cash index has bottomed.
Overnight demand news... Japan purchased 66,377 MT of milling wheat, including 35,477 MT from the U.S. and 30,900 MT from Australia. The Philippines purchased 60,000 MT of Australian feed wheat and 60,000 MT of corn expected to be sourced from South America.
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
- 7:30 a.m. Weekly Export Sales — FAS
- 2:00 p.m. U.S. Bioenergy Statistics — ERS
- 2:00 p.m. Chickens and Eggs — NASS
- 2:00 p.m. Livestock Slaughter — NASS