Good morning!
Varied tone in grains this morning... Soybeans pulled back from recent gains overnight, while corn and wheat traded on both sides of unchanged. As of 6:30 a.m. CT, corn futures are trading steady to fractionally higher, soybeans are mostly 6 cents lower, SRW wheat futures are 3 to 5 cents higher, HRW wheat is mostly a penny higher and HRS wheat is 2 to 5 cents higher. Front-month crude oil futures are modestly firmer and the U.S. dollar index is nearly 300 points lower.
Weekly Export Sales Report out this morning... For the week ended April 18, traders expect:
| 2023-24 expectations (in MT) | 2023-24 last week | 2024-25 expectations (in MT) | 2024-25 last week |
Corn | 400,000-900,000 | 501,166 | 25,000-350,000 | 65,000 |
Wheat | (100,000)-100,000 | (93,556) | 100,000-400,000 | 222,016 |
Soybeans | 300,000-600,000 | 485,795 | 0-300,000 | 263,200 |
Soymeal | 100,000-400,000 | 129,789 | 0-50,000 | 1,022 |
Soyoil | (5,000)-10,000 | 140 | 0-10,000 | 0 |
Warm winter would hinder Argentina’s leafhopper fight... Argentine corn farmers are bracing for a warmer-than-normal Southern Hemisphere winter that will likely undermine efforts to reduce the population of leafhopper insects that damage the crop, the Rosario Grain Exchange said. Farmers were hoping cooler weather could check the growth of leafhoppers, as they do not tolerate temperatures below about 39 degrees Fahrenheit (4 degrees Celsius). But the exchange forecasts that upcoming winter weather conditions are unlikely to help control the pest with “minimum temperatures at average values or even slightly higher.”
Thailand rice exports surge... Thailand exported 3.06 MMT of rice from Jan. 1 to April 24, according to the commerce ministry, up 23.4% from last year and a record for the period. The value of exports surged 54%. Thailand says exports this year could exceed its target of 7.5 MMT.
Blinken raises concerns about fair treatment for U.S. companies in China... Secretary of State Antony Blinken called on China to provide a level playing field for American businesses as he began a visit with Chinese leaders. Blinken stressed U.S. firms need a level playing field in China and brought up “non-market economic practices” in the country during the meeting, according to a State Department spokesperson. Beijing pushed back against the criticisms, saying its practices are in line with international rules. It urged Washington to cooperate in developing steady U.S./China business ties. Blinken is set to hold talks with American business leaders in Shanghai before heading to Beijing for meetings on Friday, including a possible face-to-face with President Xi Jinping. Blinken will try to convince Chinese officials to halt defense trade with Russia, with the threat of U.S. sanctions on Beijing for its support of Moscow.
USTR keeps China on ‘priority watch list’ for IP protection issues... The latest Special 301 Report, coinciding with Blinken’s visit to China, criticizes Beijing for a slow pace of IP reforms and ongoing concerns like technology transfer, counterfeiting and online piracy. Despite some improvements, significant issues remain regarding the fair implementation and enforcement of amended IP laws. The report highlights long-standing U.S. concerns over China’s IP practices, including forced technology transfers and unequal treatment of foreign rights holders. Additionally, China is noted as a major source of counterfeit goods and lacks transparency in its judicial proceedings, which affects IP rights enforcement.
Yen falls to 34-year low against the dollar... The yen hit fresh 34-year low versus the dollar and a 16-year low against the euro as investors expect the Bank of Japan won’t be hawkish enough following its monetary policy meeting that ends Friday to support the Japanese currency. Japanese officials have not yet had active discussions on what yen level would be entice intervention, Reuters reported, though market speculation is action would be taken in the 160 to 170 to the dollar area.
CPOPC seeks EU deforestation rule delay for smallholders... The Council of Palm Oil Producing Countries (CPOPC) is urging the European Union (EU) to postpone the enforcement of deforestation regulations for small businesses involved in supplying beef, palm oil and other agricultural products to Europe. While the EU Deforestation Regulation will take effect on Dec. 30 for large and medium enterprises, small and micro businesses are given until June 30, 2025, to comply. CPOPC officials argue that smallholders need more time to meet certification requirements and improve practices. Failure to delay implementation could lead to supply chain disruptions, as mills may refuse to accept produce from uncertified smallholders, impacting producing countries like Indonesia, Malaysia and Honduras. The EU is considering the request amid ongoing discussions, with potential shifts in its agricultural regulations to accommodate environmental concerns.
Mixed signals for beef, pork demand... USDA’s Cold Storage Report showed frozen beef stocks declined more than average during March, signaling demand remains strong. Pork inventories built contra-seasonally last month. Total beef stocks at 432.2 million lbs. declined 15.1 million lbs. from February, which was more than the five-year average drop of 12.4 million lbs. for the month. Frozen beef inventories fell 45.6 million lbs. (9.5%) from last year and were 58.0 million lbs. (11.8%) under the five-year average. Pork stocks rose 6.5 million lbs. to 464.2 million lbs., whereas the five-year average was a 10.3-million-lb. decline during March. But pork inventories dropped 69.7 million lbs. (13.1%) from year-ago and 75.0 million lbs. (13.9%) from the five-year average.
Colombia blocks some U.S. beef due to H5N1 in dairy cows... Colombia blocked fresh/frozen beef and beef products from cattle slaughtered on or after April 15 in Idaho, Kansas, Michigan, New Mexico, North Carolina, Ohio, South Dakota and Texas – the eight states that have detected the H5N1 virus in dairy cattle. USDA’s Food Safety and Inspection Service (FSIS) said the restrictions are “temporary” and could result in shipments being held at port even if exporters have a valid import permit. Indications are that the Dominican Republic may also deploy some restrictions, but FSIS information does reflect any change as of yet.
Cattle futures drop amid fear-based selling... Cattle futures faced heavy selling pressure on Wednesday amid news USDA plans to ramp up testing of dairy cattle for H5N1, even though there has been no impact to the beef herd. The psychological pressure offset initial light cash cattle trade that occurred at roughly steady prices with week-ago, suggesting the four-week slide in cash prices could be ending. Active followthrough in cattle futures, however, could weigh on cash cattle prices.
Hog traders optimistic on cash strength building into summer... The CME lean hog index is up another 19 cents to $91.64 as of April 23, marking a new high in the seasonal rally. May lean hog futures ended Wednesday $5.71 above today’s cash quote, which is close to the five-year average advance from now until May 16 when the contract is cash settled. Traders have bigger-than-normal premiums built into June and August lean hog futures, signaling they expect the rally to a summer high in the cash market to outperform the five-year average performance.
Overnight demand news... Taiwan purchased 106,675 MT of U.S. milling wheat. Algeria purchased 30,000 MT each of optional origin corn and soymeal, and around 200,000 MT of durum wheat from unspecified origins.
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
- 8:00 a.m. Food Price Outlook — ERS
- 2:00 p.m. Vegetable and Pulses Outlook: April 2024 — ERS
- 2:00 p.m. Livestock Slaughter — NASS
- 2:00 p.m. Peanut Stocks and Processing — NASS
- 2:00 p.m. Poultry Slaughter — NASS