Good morning!
Followthrough buying in wheat overnight... Wheat futures posted followthrough to Monday’s strong gains overnight, while buying was limited in corn and soybeans. As of 6:30 a.m. CT, corn futures are trading steady to fractionally higher, soybeans are narrowly mixed, SRW wheat futures are mostly 3 to 5 cents higher, HRW wheat is 5 to 6 cents higher and HRS wheat is 7 cents higher. Front-month crude oil futures are around 50 cents lower and the U.S. dollar index is nearly 100 points lower.
HRW, SRW crops headed in opposite directions... USDA rated 50% of the winter wheat crop as “good” to “excellent,” down five percentage points from the previous week. The amount of crop rated “poor” to “very poor” increased three points to 16%. On the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop dropped 11.4 points to 325.6, led by a 7-point decline in top producer Kansas. The SRW CCI rating improved 3.4 points to 385.5, led by a 1.4-point increase in top producer Illinois. Click here for details.
Crop Progress Report highlights… Following are highlights from USDA’s crop progress and condition update as of April 14:
- Winter wheat: 50% good/excellent (55% last week); 17% headed (13% five-year average).
- Corn: 12% planted (10% average); 3% emerged (2% average).
- Soybeans: 8% planted (4% average).
- Spring wheat: 15% planted (10% average); 2% emerged (3% average).
- Cotton: 11% planted (11% average).
Third temporary channel opened in Baltimore... A third temporary channel has been opened at the site of the Francis Scott Key Bridge collapse. Commercial vessels can now use the Fort Carroll Temporary Alternate Channel. However, this temporary channel is distinct from the limited access channel expected to open by the end of April. The U.S. Army Corps of Engineers anticipates opening the limited access channel to the Port of Baltimore by the end of April, supporting one-way traffic for barge container service and certain vessels transporting automobiles and farm equipment.
South American crop estimates unchanged with a focus on corn... South American crop consultant Dr. Michael Cordonnier left his Brazilian crop estimates at 147 MMT for soybeans and 112 MMT for corn. He has a neutral to slightly higher bias toward both crops, though with soybean harvest winding down, much of the focus is on the safrinha corn crop. Early maturing safrinha corn should have generally favorable yields, while weather will determine yields on later-planted acres. Cordonnier left his Argentine crop estimates at 51 MMT for soybeans and 50 MMT for corn. His bias is neutral toward soybeans and lower for the corn crop, depending on damage from corn stunt disease, which continues to spread across northern and central areas of the country.
Ukraine’s April grain exports strong despite Russian strikes... Ukraine grain exports might total 6 MMT to 7 MMT in April despite Russian attacks on Ukrainian port infrastructure on the Black Sea, industry sources told Reuters. Russia has stepped up attacks on Ukrainian seaports, damaging grain storage facilities in the Port Pivdennyi in Odesa region. Local media reported one of the strikes may have damaged railway tracks to the port of Chornomorsk cargo terminals in the region.
Some Egyptian wheat ships sailing while others remain delayed in Russian ports... An Egyptian wheat ship has been allowed to sail after waiting three weeks for the correct paperwork, as a dispute between one of Russia’s top grain traders and a local regulator continues to disrupt exports. The dispute between TD Rif and the Russian government has caused concerns about disruptions in grain exports from Russia, which could affect major importers like North Africa and the Middle East, including Egypt. Another Egyptian ship had faced similar issues earlier in the month, prompting intervention from Egypt’s foreign ministry to ensure its departure. While the Wadi Almolouk has been cleared to sail, two more Egyptian ships, the Edfu and Wadi Tiba, are still awaiting necessary documents, Bloomberg reports. Efforts to resolve the situation involved Egyptian officials holding urgent meetings with Russian delegates in Rome to secure the timely import of wheat, which is crucial for Egypt.
ClimateAi launches AI-driven crop yield forecasts... ClimateAi announced the public launch of ClimateLens Monitor Yield Outlook. This offers climate-driven yield forecasts for key crops, including corn, soybeans, wheat, sorghum, barley, canola, oats, hops and potatoes, as well as insights into the climate factors driving the variability. The product offers weekly yield outlooks from planting through harvest for key production countries, states and specific sourcing locations, surfacing the key climate risk factors contributing to yield with models uniquely calibrated by crop and region.
U.S. implementing sanctions on Chinese banks facilitating trade between China and Russia... This trade has enabled Russia to bolster its military capabilities, raising concerns in the West about Russia’s potential success in a prolonged conflict with Ukraine. Washington hopes to pressure China into altering its support for Russia by threatening the Chinese banks’ access to the dollar and potentially disrupting trade relations with Europe. This gives Secretary of State Antony Blinken some diplomatic leverage as he heads to Beijing.
Yen weakens, intervention watch heightens... The yen hit multi-year lows against the dollar and the euro on Tuesday, keeping investors on heightened intervention watch ahead of this week’s Bank of Japan (BOJ) meeting. Japan’s finance minister today said the Japanese government will take appropriate measures against excessive currency moves, while the BOJ governor said it will raise short-term interest rates if inflation moves toward 2%.
Gold, silver futures plunge... Gold sharply extended losses overnight after its biggest daily decline in almost two years on Monday. While major central banks and other longer-term investors have been snapping up gold bullion with no intention of selling it back anytime soon, shorter-term speculators are being forced to liquidate their losing long positions amid margin calls as gold futures plunge from recent highs. It’s a similar situation in the silver market. This week’s selloffs in the gold and silver markets are still just significant downside price corrections in major bull runs. However, if the sharp selling pressure continues deeper into this week, technical damage would suggest near-term market tops, if not major market tops, are in place.
Euro zone business activity expands in April... Business activity in the euro zone in April expanded at its fastest pace since May 2023 as strength in the services industry more than offset a deeper downturn in manufacturing. HCOB’s preliminary composite euro zone purchasing managers index (PMI) compiled by S&P Global rose to 51.4 this month from March’s 50.3 reading, marking its second straight month of expansion. The flash PMI for services rose to 52.9, while the manufacturing reading slumped to 45.6.
Cash cattle uncertainty for this week... Cash cattle prices averaged $182.67 last week, down $1.17 from the previous week and the lowest price since mid-February. If cattle futures build on Monday’s strong gains it would set up the possibility of ending the four-week slide in cash, though showlist numbers are expected to be higher, especially in the Southern Plains.
Pork cutout rises... The pork cutout rose $1.61 on Monday, fueled by strong gains in bellies, ribs and picnics, while the other cuts were weaker. The cutout strength has allowed packers to maintain margins solidly in the black. The CME lean hog index is down 4 cents to $91.31 as of April 19, the second straight daily decline, though sustained weakness is not expected.
Overnight demand news... Taiwan tendered to buy 106,675 MT of U.S. milling wheat. Algeria tendered to buy a nominal 50,000 MT of optional origin durum wheat. Indonesia purchased 300,000 MT of rice – 109,000 MT from Vietnam, 110,000 MT from Thailand, 56,000 MT from Myanmar and 25,000 MT from Pakistan. South Korea tendered to buy 116,900 MT of rice – 64,700 MT to be sourced from the U.S. and the remainder from Australia, Thailand and Vietnam.
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
- 2:00 p.m. Meat Animals - Prod., Disp., and Income — NASS
- 2:00 p.m. Milk - Prod., Disp., and Income — NASS
- 2:00 p.m. Poultry - Production and Value — NASS