Good morning!
Wheat mildly firmer, soybeans mixed and corn weaker... Wheat futures posted mild corrective overnight, while soybeans traded mixed and corn faced followthrough selling. As of 6:30 a.m. CT, corn futures are trading 1 to 5 cents lower, soybeans are 3 cents lower to 5 cents higher, winter wheat futures are 1 to 3 cents higher and spring wheat is 5 to 7 cents higher. Front-month crude oil futures are modestly weaker, while the U.S. dollar index is down around 150 points.
Central Plains clipped by frost/freeze... Some frost and freeze damage may have occurred in Nebraska, northern Kansas and northeastern Colorado Sunday morning when temperatures fell to the upper teens and lower 20s, according to World Weather Inc. Impacts are expected to be limited, but it will take several days to assess any damage. Meanwhile, needed rains are forecast for HRW areas of the Plains this week, though limited amounts are expected in the driest southwestern areas of the region. Temperatures will trend cooler than normal across the Corn Belt and Plains for the next 10 days.
Exporters union: Russian grain exports could be record-large despite no benefit from Black Sea deal... Russia could export a record 60 MMT of grain in 2022-23, including 50 MMT of wheat, the head of the Russian Grain Union said. But he noted the Black Sea grain deal had not yielded anything positive for Russia or helped facilitate supplies to the global market. Russia has repeatedly said it will not extend the Black Sea grain deal beyond May 18 unless Western restrictions blocking its agricultural and fertilizer exports and other matters are addressed.
Latvia releases Russian fertilizer... A batch of Russian fertilizer that Latvia seized last year is being shipped to Kenya via the United Nations’ World Food Program, Latvia’s Foreign Ministry said. A vessel left the port of Riga on Friday with part of the 200,000 MT of seized fertilizer, the ministry said. Several more vessels are due to transport the rest of the fertilizer, which was seized in March 2022.
The week ahead in Washington... The House will vote on Speaker Kevin McCarthy’s (R-Calif.) debt-limit proposal on Wednesday. It would raise the debt ceiling by around $1.5 trillion or through March 31, 2024, whichever comes first, but also return federal spending to 2022 levels and cap growth at 1% annually. On Sunday, Sen. Amy Klobuchar (D-Minn.) said that President Joe Biden McCarthy should negotiate on the budget and not hold Americans’ mortgages “hostage.” Farm-state Republicans could be the deciding factor on whether McCarthy can garner enough GOP votes. Why? The McCarthy package includes key provisions that gut some favorite programs of biofuel proponents and could cause re-election problems for Republicans in some districts in 2024 races. Farm bill hearings and other events on that front continue this week. Key economic data this week includes first quarter GDP on Thursday and the Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation gauge, on Friday.
WOTUS put on hold in another state... The Biden administration’s Waters of the U.S. (WOTUS) rule has been temporarily put on hold in another state with the U.S. Court of Appeals for the Sixth Circuit last week halting implementation of the rule in Kentucky. The halt is only temporary, lasting until May 5, to give the court an opportunity to consider the state’s request for an injunction on the rule. Other federal court actions have put implementation of the rule on hold in 26 states. There is a pending Supreme Court ruling on the matter, with a decision expected between now and June. Meanwhile, EPA has asked the appeals court to clarify that stay does not apply nationwide.
California disaster aid request... Democratic Representatives Salud Carbajal and Jimmy Panetta will lead a group of their fellow California lawmakers in asking the House Appropriations panel and chamber leadership for a disaster recovery package for farmers, according to a letter shared with Bloomberg Government. The lawmakers estimate their districts saw more than $500 million in damage to agricultural operations as a result of flood and storm damage in California. The California Democrats said the Farm Service Agency has received over 900 filings for assistance from the storms, highlighting the need for on-farm recovery in the nation’s top agricultural state.
Inside the struggle to make lab-grown meat... The U.S. lab-grown meat industry got a boost last fall when FDA for the first time declared cultivated chicken from Upside Foods safe to eat. The company, which is backed by Bill Gates and Richard Branson and the meat giants Tyson and Cargill, can grow small amounts of meat from cells. But making large volumes at low cost is proving much harder, according to Wall Street Journal (WSJ) interviews with current and former employees, industry officials, investors and outside scientists. WSJ reports that many of Upside’s investors said they were comfortable with their long-term bets on the company.
Slightly negative Cattle on Feed Report... USDA’s Cattle on Feed Report showed the April 1 feedlot inventory 4.4% smaller than year-ago, with placements down 0.6% and marketings 1.2% lower. The report data was mildly negative compared with pre-report expectations, especially placements, which could weigh on deferred live cattle futures. But the report is not bearish as it showed a tightening feedlot inventory, with this marking the seventh straight month of year-over-year declines.
Has the cattle market topped?... Market bulls were disappointed by price action in cattle futures and the cash market last week, prompting some to proclaim a top in the market. But supply-side fundamentals remain bullish and demand is solid, despite lofty wholesale and retail prices. A seasonal high during spring is rather common, but bulls could make another push to the upside if support at last week’s lows holds.
Cash hog index continues to weaken... The CME lean hog index is down a dime to $71.31 (as of April 20), extending the prolonged decline. Lean hog futures are oversold and due for a correction but buyer interest will be limited until the cash index puts in a definitive bottom. May lean hog futures finished Friday $5.715 above today’s cash quote.
Weekend demand news... Exporters reported no tenders or sales.
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
- 10:00 a.m. Export Inspections — AMS
- 2:00 p.m. Raw-Fiber Equivalents of U.S. Textile Trade Data — ERS
- 3:00 p.m. Crop Progress Report — NASS